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Before we get into the nuances of what is route optimization and how it enhances delivery operations let’s understand why it matters so much now. Changing delivery trends and rising demand for next-day and same-day deliveries have made businesses embrace advanced route optimization solutions. These solutions improve the entire delivery planning process while minimizing the delivery turnaround time, optimizing logistics costs and improving customer experience significantly. Besides these, a business can get plenty of other benefits by adopting route planning and optimization solutions. So, what is route optimization?
Route optimization is the process of designing the most cost and time-efficient delivery route by considering multiple parameters, including the vehicle type, driver schedule, delivery time window, delivery location, and more.
Earlier, businesses used to optimize delivery routes manually, but with the rise in eCommerce sales and increase in order volume, manual route optimization is not possible. Therefore, most businesses use route optimization software for this purpose. Modern route optimization solutions can identify inefficiencies and analyze historical data to figure out low-efficiency routes. They utilize on-road contingencies and traffic patterns to design new delivery routes in no time.
Here are the six most important factors that are considered when planning and optimizing delivery routes:
Vehicles such as sprinter vans, box trucks, and tractor-trailers are used for the transportation and delivery of goods. Choosing a delivery vehicle totally depends on the type of goods. For example, frozen goods or hazardous materials cannot be transported in any van or truck. In other words, it requires specialized vehicles that meet all requirements to maintain the product’s safety. The size of the vehicle also matters when it comes to route planning. Certain types of vehicles are restricted to highways only. Similarly, small vans are suited for delivering within the city.
The delivery time window is also taken into account while deciding on the delivery routes. Time-sensitive deliveries are categorized considering the product’s committed delivery time and safety, as some products may expire or deteriorate if left in transit or delivered late.
The route optimization also includes considering the number of stops. For example, if a driver has to do five deliveries in one trip, the optimization process will include downtime for each delivery stop and necessary breaks.
The route optimization also considers unexpected delays caused due road accidents, vehicle breakdowns, traffic congestion, and inclement weather. These factors can impact the delivery time; therefore, it is good to leave drivers with enough time to manage such incidents.
Route planning for short-haul deliveries is different from long-haul. Short-haul deliveries are made primarily within one city by local drivers using small vehicles such as two-wheelers, vans, or box trucks. On the other hand, long-haul deliveries need big vehicles such as tractor-trailers, and the drivers work for days with longer breaks for resting. Due to these and other differences between short and long-haul deliveries, distance becomes one of the critical considerations for delivery route optimization.
Utilizing data and insights can help in optimizing delivery routes effortlessly. By examining existing delivery data, fleet managers can look into loopholes and common reasons for the delay. It can also assist in choosing the right vehicle and driver for the delivery based on their previous deliveries and experience.
Considering a driver’s skills and experience is one of the critical factors in route planning and optimization. That’s because one driver with a particular set of skills may not be able to fulfill all kinds of requirements. A driver capable of doing local deliveries with a sprinter van might not be the right fit to drive a tractor-trailer and do long-distance deliveries.
A business following traditional route optimization practices might face the following challenges:
Inefficient delivery route planning leads to increased use of resources, which adds up to the total delivery costs. Moreover, it can also cause a delay in deliveries and impact customer experience.
Traditional routing techniques require manual intervention. It means you need separate teams to sort orders, find a suitable vehicle and driver, track deliveries, inform customers, answer their queries, and perform various other route planning and optimization-related operations.
The inability to track consignments in real-time can lead to delivery delays. Late or missed deliveries directly impact customer retention and a brand’s reputation. It also increases the chances for return, which costs pretty high.
Traditional route planning and optimization practices may find the shortest delivery route but not the most effective one, which impacts productivity.
Poor optimization of delivery routes increases fuel consumption and empty miles that leads to increasing transportation costs.
With traditional routing software, it is difficult to predict delivery ETAs, send delivery-related alerts to customers, and check real-time status of the consignment. All these factors impact customer experience.
Route optimization software empowers businesses to save hours of manual labor, eliminate dependency on human resources, and ensure a smooth flow of processes. Let’s dig deeper into how an automated delivery route optimization solution benefits:
Route optimization software automates the route planning and optimization process, thereby eliminating the need for hiring a huge team for this task. It allows businesses to define parameters to auto optimize delivery routes leveraging the power of technologies such as artificial intelligence and machine learning.
A real-time tracking facility helps fleet managers to keep track of all deliveries under one roof. They can have end-to-end visibility on delivery vehicles, drivers, and other operations. The facility also contributes to minimizing delivery delays caused due to vehicle breakdowns or road accidents. The software immediately alerts fleet managers or generates a new route.
Route optimization is not only required during the last mile but also during the first mile to move goods from the manufacturing plant to the warehouse. Efficient management of routes since the beginning contributes to minimizing delivery turnaround time.
Optimized delivery routes mean a driver can do maximum deliveries by traveling the shortest distance possible. Doing this reduces fuel consumption and, thereby, fuel cost. Providing real-time information on traffic and weather conditions also helps avoid traffic congestion, which contributes to minimizing empty miles and the idling of engines. All these benefits add up to reducing transportation costs and carbon emissions.
Having complete visibility on the product, getting accurate ETAs and delivery-related alerts, and shorter turnaround times for returns are the factors that come under the “customer experience” umbrella. Route optimization software allows businesses to offer all these services to customers to meet their expectations and improve brand loyalty.
By maximizing the number of drops and pick-ups, delivery route optimization software facilitates a driver to execute more deliveries in one trip. It increases drivers’ productivity and delivery profitability. Another best part of route optimization software is dynamic route planning.
To understand dynamic route planning, let’s take an example. A driver is delivering five orders in one trip. At the last moment, one of the customers cancels the order. In this case, route optimization software will immediately alert the driver and design a new delivery route to prevent a delivery attempt to that location. This feature also contributes to saving time, effort, and delivery costs.
Now that you know what is route optimization and how beneficial it can be for your business, why not get the software to implement it. Let’s glance through some of the tips to help you choose the best route optimization software:
The cost of an automated route optimization solution depends on your particular business needs. You can choose SaaS-based solutions for route planning and optimization. To get an exact idea of the cost, connect to a route optimization software provider and share your requirements.
Shipsy’s route planning and optimization software intelligently design delivery routes to save time and delivery costs. It comes up with vehicle capacity management, smart route planning based on consignment mapping with delivery vehicles, intelligent load planning, real-time tracking, and other advanced features to make the entire last mile journey time and cost-efficient. The software helps retail, courier, express, and parcel, manufacturing, quick service restaurants, and other businesses to reduce transportation costs, improve vehicle capacity utilization, and save route planning and optimization time. To learn more about the software, request a demo today.
