Performance Linked Commercials - Pay for Performance

Performance linked commercials are a dynamic pricing model where the shipping rate paid to a courier partner is directly tied to measurable delivery performance metrics - delivery success rate, SLA adherence, and RTO (return to origin) rate. Partners that consistently meet or exceed agreed benchmarks earn standard or premium rates, while underperformance triggers rate adjustments. This creates a financial accountability loop that aligns brand and courier incentives.

ProShip tracks three primary metrics for performance-linked pricing: (1) Delivery Success Rate - the percentage of shipments successfully delivered on the first or subsequent attempts; (2) SLA Adherence - the percentage of deliveries completed within the promised transit time; and (3) RTO Rate - the percentage of shipments returned to origin. Each metric has configurable benchmarks per courier partner, zone, and shipment type, with transparent dashboards for both brands and partners.

Benchmarks are mutually agreed between the brand and each courier partner during the commercial setup phase. ProShip provides historical baseline data for each partner's actual performance across zones and shipment types, which serves as the starting point for benchmark negotiations. Benchmarks can be set at the overall level or broken down by zone, city tier, payment mode, and shipment category for granular accountability.

Rate adjustments follow a configurable review cycle - typically monthly or quarterly depending on the commercial agreement. At each review point, ProShip automatically calculates actual performance against benchmarks and generates the rate adjustment recommendation. Both the brand and courier partner see the same transparent performance data, minimizing disputes over metrics or rate changes.

Yes, PACE factors in performance-linked rates when selecting couriers for each shipment. Partners earning premium rates through strong performance naturally receive more volume because their cost-adjusted delivery success is higher. Underperforming partners with rate penalties become less competitive in PACE scoring, creating a virtuous cycle where better performers earn more volume and better rates.

Yes, ProShip provides transparent, shared dashboards accessible to both brands and courier partners. Both parties view identical delivery success rates, SLA adherence percentages, and RTO metrics for the agreed measurement period. This shared visibility eliminates disputes over performance claims and builds trust in the commercial adjustment process.

Consistent underperformance triggers escalating consequences: initial rate adjustments reduce the partner's commercial terms, PACE reduces volume allocation to the underperforming partner, and if performance does not improve within agreed timelines, the brand can choose to pause or terminate the partner relationship. ProShip provides performance trend reports that help identify whether underperformance is systemic or zone-specific.

Performance-linked pricing reduces effective shipping costs in two ways: directly, by adjusting rates downward for underperforming partners who cause RTO or SLA failures; and indirectly, by incentivizing all partners to improve delivery quality, which reduces the hidden costs of failed deliveries, returns, and customer complaints. Brands on performance-linked models typically see 5-10% reduction in total logistics cost over 6 months.

Performance-linked commercials can be configured for any courier partner on ProShip's 30+ partner network. The model works best with partners handling significant volume where performance data is statistically meaningful. ProShip's commercial team helps brands design the right performance-linked structure for each partner based on volume, route mix, and current performance levels.

Yes, ProShip supports separate performance benchmarks for COD and prepaid shipments since these have fundamentally different RTO risk profiles. COD benchmarks typically include a higher acceptable RTO threshold but stricter cash collection and remittance metrics. Prepaid benchmarks focus more on speed, SLA adherence, and first-attempt delivery rates. This ensures fair performance evaluation that accounts for inherent payment-mode differences.