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With the booming eCommerce industry, customer preferences are changing, and it has become harder for businesses to ensure timely delivery of shipments, especially as the delivery windows are shrinking. While delayed shipments often lead to poor customer experience, they harm the business bottom lines by causing churn as well. Further, manual route planning methods no longer work as they don’t consider factors such as roadblocks, traffic congestion, vehicle capacity, shipment type, etc. This makes it harder to ensure timely deliveries and leads to extra miles driven, asset underutilization, higher fuel costs, and, eventually, delays in deliveries.
This calls for robust and smart delivery route planning software that could help businesses automatically find the shortest and most optimized route from the source to the destination, making sustainable and timely deliveries possible. This is fuelling the growth of the delivery route planning software market, and the Globe NewsWire states that the route planning software market is estimated to reach USD 12.41 billion by 2030, growing at a CAGR of 11.56%.
Delivery routing software not only helps plan the delivery routes with the highest efficiency, but it also helps managers optimize their delivery operations on the basis of specific optimization constraints. Smart delivery route planning platforms also use in-built AI/ML algorithms for highly efficient dynamic route planning.
Below, we discuss what delivery route planning software is, the challenges that conventional route planning methods pose, how businesses can tackle those challenges with reliable delivery routing solutions, and lastly, how businesses can choose the right routing platforms to maximize growth.
Delivery routing or delivery route planning is the process of finding not only the shortest but the most optimized route from the source to the destination. By optimized, we mean the route helps the vehicle cover maximum delivery points, avoid traffic congestion, minimize fuel consumption and ensure maximum vehicle utilization.
Advanced route planning software can automate the delivery route planning process to save time and manual intervention. It can help businesses save logistics costs and boost customer experience via timely deliveries, maximum asset utilization, and highly transparent delivery operations.
Before we dive deeper into the various features of delivery routing software solutions, let us have a quick look at the various challenges of conventional/static/manual route planning.
Using conventional delivery route planning methods that involve manual planning, it becomes quite hard for businesses to effectively allocate drivers or vehicles, especially when the workload increases. And this leads to high operational costs for fleet managers.
Also, managers fail to consider multiple constraints such as traffic, vehicle capacity, driver familiarity with the area, and language spoken, which often leads to more miles driven, adding to the last-mile delivery costs. And all this translates into higher operational costs and delivery inefficiencies.
Conventional delivery route planning involves manual labor. The route planners spend several hours a day plotting the route using maps. Still, they’re not accurate as they fail to consider different factors, such as service times, route length, customer-preferred delivery windows, traffic patterns, etc. And when the demand rises, the accuracy suffers even more.
This directly impacts the last mile logistics as drivers are unable to deliver the shipments on time, leading to poor customer experience and more logistics costs as delivery partners sometimes have to re-attempt deliveries (in case of missed deliveries).
Conventional route planning lacks real-time visibility over the shipments. It means businesses aren’t aware of the immediate location or status of the shipments. Because of this, whenever there’s an accident, congestion, or any other roadblock, businesses are unable to take appropriate action at the right time or verify the reasons marked for delays or failed deliveries by the rider.
Lack of real-time visibility leads to poor customer experience, higher operational costs, and business losses owing to fake delivery updates.
Without modern route planning software, businesses often struggle with fleet management. For instance, they have to manually assign fleet drivers and often encounter problems such as fewer or more vehicles, inefficient routing, delivery delays, etc. All these scenarios significantly add to the operational costs.
On the other hand, with smart route management solutions, businesses can allocate drivers effectively by considering different factors such as driver familiarity, shipment size, driver experience, etc., and effectively manage their fleet using modern delivery routing software.
With conventional delivery routing software, route planners lack analytical data and real-time updates. Because of this, they often assign last-minute orders randomly to new drivers, which could have been assigned to drivers that are already serving that location, leading to multiple drivers moving in the same region.
In addition, manual route planners fail to effectively analyze the vehicle capacity and driver availability, among other factors, while planning routes which leads to asset under-utilization that adds to the overall logistics costs.
Manual delivery routing is inefficient and fails to find the most optimized route from the source to the destination, which leads to more miles driven by a vehicle per delivery. If there’s an accident or traffic congestion, drivers must reroute on their own, which adds to the total miles traveled. Also, extra miles driven means more fuel spent, which further translates into a high carbon footprint and additional logistics costs.
Without proper driver and end customer nudges for delivery ETAs, the deliveries can get delayed, and SLAs can easily get breached. Failure to send automated alerts for deliveries to the customer can lead to delivery failures because the customer might not be there to receive the order.
Further, manual routing is inefficient and fails to take into account real-time dynamic events, such as traffic congestion, clubbing multiple orders, planning multi-stop deliveries, en route order clubbing, etc. All this leads to increased delivery times, failure to scale order deliveries, and ETA SLA breaches.
Just a few years back, when eCommerce was still in its nascent stages, customers were happy even if they had to wait for weeks to get their products delivered to their homes. Even delays wouldn’t bother them much, and the lack of follow-ups or timely tracking updates, etc., didn’t mar the overall customer experience.
However, with the rapid growth of eCommerce, customer requirements have changed. They now want their items to be delivered within a few days or even on the same day of ordering. And that’s impossible with inefficient manual route planning methods that lead to delays in shipment delivery and, thus, poor customer experience.
As there’s a lack of real-time visibility and monitoring, businesses fail to gather crucial data that would help them eradicate operational inefficiencies. And even if the data is collected, it’s of poor quality, which leads to poor quality decisions costing businesses a lot of money upon analysis. Further, the data is siloed as there is no unified system to collect this data or a smart interface to make sense of it.
An automated system is required to automatically gather high-quality data for data analytics and enable businesses to make informed and data-driven decisions.
Since the service providers are unable to monitor their fleet, the drivers often don’t take their jobs seriously and lack proper motivation, which leads to poor productivity and, thus, delays in shipments, false delivery attempts, and costly re-delivery attempts.
In the absence of smart monitoring and management systems, the managers find it hard to measure and track team performance, which, in turn, spawns poor productivity. There is no way to instill healthy competition among the delivery agents apart from incentives that also come as added operational costs because of the lack of transparency in performance analysis.
Now that we have had a look at the various challenges of manual delivery route planning let us move on to find how smart automation for route planning & optimization can overcome these challenges and help transform delivery operations.
While with manual routing, businesses can find the shortest route from the source to the destination, it’s not necessarily the most optimized one. This is because managers can fail to consider important factors, such as dynamic order clubbing, delivery re-scheduling, etc., which eventually leads to delayed deliveries.
On the other hand, reliable delivery route planning software can help businesses consider various factors, such as road disruptions and multiple delivery stops, and find the most optimized route, keeping multiple optimization constraints in mind. This way, businesses can ensure optimum fuel consumption, vehicle utilization, and timely deliveries.
Logistics providers can have numerous vehicles of varying capacities and sizes. And allocating vehicles without considering their capacity, size, and other factors could lead to vehicle under- or over-utilization, translating to higher operational costs. The businesses might end up running multiple rounds to one location leading to higher fuel costs, and also lose out on the opportunities to optimize the costs by setting preferences for selecting the most profitable carrier assets first.
However, smart route planning software can smartly allocate the vehicles considering the driver’s availability, tonnage, vehicle size, etc., ensuring optimal asset utilization and lower operational costs. Managers can set multiple constraints for order allocation, routing, and vehicle capacity optimization, which makes it possible to choose the most profitable assets for every trip, maximize the number of orders sent in one trip, and deliver, keeping the operational costs to a minimum.
Smart route planning software allows logistics businesses to track fleet movement in real-time. This way, service providers can always ensure the shipments are moving as expected, translating to timely deliveries and better customer experience. Further, the AI-powered delivery routing software sends real-time updates and alerts for order movements, real-time order tracking, driver details, delivery ETAs, etc.
All in all, this reduces the information gap between businesses and their customers, automates the customer follow-up process, and reduces customer query calls significantly. It also helps build more trust and makes the overall order movement highly transparent, which again improves the customer experience.
When businesses use delivery route planning software to find the most optimized route, it helps reduce the total distance traveled. Also, features such as dynamic routing help reroute in case there’s an obstruction, effectively reducing the time lost in transit. Further, this re-routing ensures that all the custom optimization criteria set by the managers are followed, and the costs of deliveries stay low.
Moreover, using AI, delivery routing software considers different constraints such as the number of trips, consignment nature, and vehicle capacity that helps maximize vehicle utilization. Finally, the routing software also considers the customer delivery window to eliminate missed delivery chances. And all these factors come together to significantly reduce transportation costs for the service provider.
Businesses can automate all operations using delivery routing software, such as finding an optimized route for their shipments, drawing useful insights from data, adjusting any last-minute orders, and rerouting as and when required, eventually reducing manual Intervention.
This will help reduce the error margin, and improve productivity, as businesses will be able to get more work done in less time. As the managers can track, manage, monitor, and orchestrate the order movements from one dashboard, they no longer have to follow up with the 3PL partners or drivers for individual updates. They can plan and optimize the routes keeping multiple constraints in mind based on the nature of shipments, delivery ETAs, etc., and get rid of delivery redundancies brought by manual elements.
Using manual route planning, businesses miss out on tons of important data that they could use for making informed decisions. However, smart delivery routing software help businesses capture crucial data and monitor KPIs such as fuel costs, the average time of delivery, average cost, delays, etc.
Using this data, businesses can determine which area needs improvement and work on the same. This way, businesses can make informed decisions and make regular improvements.
Because there are too many delivery routing software options out there, it can be hard to choose the right one. However, to help businesses decide better here’s a list of essential features every delivery routing software must have:
A delivery routing software must be able to instantly consider all the factors and display the optimized route automatically, minimizing human Intervention.
The solution must offer businesses complete visibility over the fleet’s movement and also allow customers to track their shipments to build trust.
A reliable delivery route planning software should send automated alerts to the stakeholders in case there’s a delay or any other contingencies so that it can be dealt with.
Not all route planning software offers this, but it is extremely useful. Businesses can use data analytics to improve their service by drawing useful insights from historical data.
Resource allocation should be intelligent. For instance, delivery routing software must consider driver availability, experience, and familiarity with the region vehicle capacity, size, etc., before assigning a shipment. This helps utilize the assets to their best potential and ensures seamless operations.
Different businesses have different use cases for delivery routing software. For instance, some need route planning software to find the shortest route, while others want to automate the entire route planning and optimization process. Whatever the case, it’s always better to go for an end-to-end solution that caters to all route planning and optimization needs. This way, when a business needs to expand, they don’t have to purchase new software.
Shipsy’s end-to-end AI-powered delivery routing software is a single solution for all your logistics needs. Businesses can effectively manage fleets, optimize vehicle capacity, ensure intelligent route planning, make last-mile operations efficient, and control and track all the operations effortlessly using a single dashboard. Moreover, customers can get complete visibility and tracking details of the shipments.
With all these amazing features, businesses can achieve the following:
One of the many features that make Shipsy a highly reliable delivery routing software is its ability to offer complete customization and end-to-end logistics services. Businesses can customize it according to their requirements and manage all their logistics operations without having to purchase individual tools for managing different tasks. For deeper insights into how Shipsy works and how we can help, book a customized free demo now!
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