Steel distribution is a complex supply chain that involves sourcing, warehousing, transportation, and customer delivery. With fluctuating demand, rising transportation costs, and just-in-time delivery expectations, tracking the right Key Performance Indicators (KPIs) is essential to maintain efficiency and profitability.

But which logistics KPIs matter the most in steel distribution? In this blog, we’ll break down the top metrics that help steel suppliers, distributors, and logistics teams optimize performance.

Why Are Logistics KPIs Important in Steel Distribution?
Steel is a heavy, high-value product that requires special handling, precise scheduling, and efficient transportation. Without proper tracking, companies can face:

🚫 Delays that slow down construction and manufacturing projects
💸 High transportation costs due to inefficient routing
⚠ Inventory shortages or excess stock affecting cash flow
📉 Customer dissatisfaction from missed deadlines

By monitoring the right logistics KPIs, companies can improve efficiency, reduce costs, and maintain customer trust.

Top Logistics KPIs in Steel Distribution
1. On-Time Delivery (OTD) Rate
📌 Why It Matters: Ensures that steel products arrive on schedule to avoid disruptions in manufacturing and construction projects.

🔎 How to Measure It:

OTD Rate
=
(
Number of On-Time Deliveries
Total Deliveries
)
×
100
OTD Rate=(
Total Deliveries
Number of On-Time Deliveries
​
)×100
✔ A high OTD rate (95% or above) means a reliable supply chain.
✔ A low OTD rate indicates delays, poor scheduling, or transportation issues.

💡 Pro Tip: Use GPS tracking and predictive analytics to anticipate delays and adjust shipments in real time.

2. Freight Cost Per Ton
📌 Why It Matters: Tracks how much it costs to transport each ton of steel, helping control logistics expenses.

🔎 How to Measure It:

Freight Cost Per Ton
=
Total Freight Cost
Total Tons Shipped
Freight Cost Per Ton=
Total Tons Shipped
Total Freight Cost
​

✔ Helps identify cost-saving opportunities (e.g., optimizing load sizes, choosing better carriers).
✔ Reduces unnecessary expenses from inefficient routes or underutilized trucks.

💡 Best Practice: Consolidate shipments and negotiate freight contracts to lower per-ton costs.

3. Inventory Turnover Ratio
📌 Why It Matters: Measures how efficiently steel inventory is moving through the supply chain.

🔎 How to Measure It:

Inventory Turnover
=
Cost of Goods Sold (COGS)
Average Inventory Value
Inventory Turnover=
Average Inventory Value
Cost of Goods Sold (COGS)
​

✔ A higher turnover means steel is selling quickly, reducing storage costs.
✔ A lower turnover could indicate overstocking or slow-moving inventory.

💡 Pro Tip: Use demand forecasting tools to maintain the right inventory balance and avoid excess stock.

4. Load Utilization Rate
📌 Why It Matters: Ensures that trucks and containers are fully loaded to reduce transportation costs and environmental impact.

🔎 How to Measure It:

Load Utilization
=
(
Actual Load Weight
Maximum Load Capacity
)
×
100
Load Utilization=(
Maximum Load Capacity
Actual Load Weight
​
)×100
✔ A low utilization rate means wasted space and higher costs.
✔ Optimizing load utilization improves fuel efficiency and profitability.

💡 Best Practice: Use route optimization software to maximize truckloads and reduce empty miles.

5. Damage Rate
📌 Why It Matters: Steel products (coils, sheets, pipes) must arrive undamaged to prevent waste, returns, and customer complaints.

🔎 How to Measure It:

Damage Rate
=
(
Damaged Shipments
Total Shipments
)
×
100
Damage Rate=(
Total Shipments
Damaged Shipments
​
)×100
✔ A high damage rate suggests poor packaging, rough handling, or improper loading.
✔ Lowering damage rates reduces costs and improves customer trust.

💡 Pro Tip: Implement better strapping, bundling, and protective coatings to minimize damage during transit.

6. Order Accuracy Rate
📌 Why It Matters: Measures how often the correct type, quantity, and grade of steel is shipped.

🔎 How to Measure It:

Order Accuracy
=
(
Error-Free Orders
Total Orders Shipped
)
×
100
Order Accuracy=(
Total Orders Shipped
Error-Free Orders
​
)×100
✔ A high accuracy rate (above 98%) means better customer satisfaction.
✔ Errors lead to returns, additional shipping costs, and lost business.

💡 Best Practice: Use barcode scanning and automated inventory systems to reduce picking and packing mistakes.

7. Lead Time (Order to Delivery Time)
📌 Why It Matters: Tracks how long it takes for steel orders to be processed, shipped, and delivered.

🔎 How to Measure It:

Lead Time
=
Delivery Date
−
Order Date
Lead Time=Delivery Date−Order Date
✔ Shorter lead times mean faster response to customer needs.
✔ Long lead times can indicate production delays, supply chain bottlenecks, or poor carrier performance.

💡 Pro Tip: Work with multiple suppliers to reduce dependence on a single source and speed up deliveries.

Final Thoughts: Why Tracking Logistics KPIs is Essential
For steel distributors, small inefficiencies in logistics can lead to big losses. By tracking and optimizing key metrics, you can improve delivery reliability, reduce costs, and keep customers satisfied.

💡 Key Takeaways:
✅ On-Time Delivery – Ensure shipments arrive as scheduled.
✅ Freight Cost Per Ton – Optimize transport costs.
✅ Inventory Turnover – Keep stock moving efficiently.
✅ Load Utilization – Reduce empty space in shipments.
✅ Damage Rate – Minimize product loss and claims.
✅ Order Accuracy – Prevent costly shipping errors.
✅ Lead Time – Improve response time to customer orders.

By focusing on these KPIs, steel distributors can stay competitive, reduce waste, and increase profitability in a demanding market.

🚀 Need help optimizing your steel distribution logistics? Let’s talk!