Route optimization bridges the gap between the growing demand for faster deliveries and the need for sustainable last-mile delivery businesses.
Online retailing is a lucrative business, as 17.08 million Australian shoppers use online shopping websites monthly. According to research, that’s a 45% increase from 2020.
While businesses strive to meet these high demands from customers, route optimisation ensures faster deliveries, reduced costs, and efficiency while being more environmentally conscious.
Definition of Route Optimization
Route optimization is the process of determining the most efficient and cost-effective route for a vehicle or a fleet of vehicles.
It involves analyzing various factors, such as:
- the number and location of required stops,
- time windows for deliveries,
- traffic patterns,
- and vehicle capacity,
to achieve goals like:
- minimizing costs,
- reducing fuel consumption,
- and improving customer satisfaction.
Imagine a delivery driver with a list of 20 stops scattered across a city. Without route optimization, the driver might take a longer, less efficient path, wasting time and fuel.
However, with route optimization software, the driver receives a carefully calculated route that considers real-time traffic, road conditions, and delivery windows.
This ensures that the driver reaches each destination in the shortest possible time, enhancing productivity and customer satisfaction.
Importance of Route Optimization in Last Mile Delivery
Last mile delivery refers to the final leg of the delivery process, where packages are transported from a distribution center or warehouse to the customer’s doorstep.
This stage is often the most complex and costly part of the delivery process. Route optimization plays a crucial role in last mile delivery, as it enables companies to reduce costs, improve delivery times, and increase customer satisfaction.
By optimizing routes, companies can significantly cut down on fuel consumption and lower emissions, contributing to a more sustainable operation.
Why Do Your Business Need Route Optimization?
Finding the most cost-effective and efficient route for delivery is difficult when you are trying to do it all by yourself, manually, and it becomes impossible as the business grows.
Route optimization software takes all the stops into account, factors in real time traffic jams, customer requests and your van capacity.
It’s a crucial aspect of delivery operations. It helps to maximize your deliveries for your business. It considers different criteria like driver schedules, available hours, total stops, fulfillment estimates, and legal requirements.
Doing this manually, is extremely time consuming and can take a large chuck of your hours of the day.
Route optimization software uses advanced algorithms to narrow down options and find the best-optimized route.
Here are ten ways how route optimisation can help boost your delivery rate.
1. Route Optimization Minimizes Delivery Times
Route optimisation identifies the shortest and most efficient path to deliver your parcels. In many cases, route optimization can be tailored to specific use-case scenarios, significantly enhancing efficiency across various industries.
It considers real time factors like traffic conditions, roadblocks, and weather. But it also ensures that drivers reach their destinations faster, minimizing delays. This improved speed enhances customer satisfaction and maximizes daily deliveries.
WATCH: What is route optimization
2. Cutting Fuel Costs With Route Optimisation
Route optimisation software helps businesses save up to 30% of their fuel costs while also being more efficient with time and money.
Fuel costs are the main culprit driving up your last mile bill, and efficient route planning is crucial, especially when dealing with numerous clients. On average, the last leg of the delivery accounts for roughly half of the supply chain cost.
Route optimisation software reduces fuel consumption by planning routes that avoid unnecessary mileage and congestion. According to the latest available statistics, companies can save up to $18250 per year per track on fuel by using the RO software.
3. Route Optimisation Improves Driver Productivity
Let’s say you use software to optimize routes; this means your drivers can deliver more packages in less time.
This not only improves efficiency but also gives drivers a chance to positively impact the industry by delivering more packages in less time.
Think of the Amazons and the Ubers of the world; they function strictly on these types of software.
ALSO READ: 11 Ways Amazon is improving last mile delivery
With Route Optimization, drivers know exactly when they will arrive at a customer’s house, increasing delivery accuracy.
One company managed to deliver 20% more stops by simply using the software. “Our drivers handle 155 stops daily now, up from 130 previously before optimization. The increased productivity is invaluable,” told Amanda K. from SummerSet Valet to Dynoroute.
4. Enhancing Customer Satisfaction
Almost half of online shopping customers abandon their online carts if shipping times are too long or aren’t provided. This McKinsey report shows how retailers have no choice but to respond or lose more sales.
Consumers want their delivery to be accurate and fast, a high expectation created among customers by the likes of Amazon. For smaller players, this could be extremely challenging.
Route optimisation luckily helps with that, giving the smaller players a competitive edge to keep up with the speed and demand.
This reliability builds trust and loyalty, giving businesses a competitive edge in the market.
5. How To Make Real-Time Adjustments With Route Optimisation
Unpredictable events like accidents or road closures can disrupt delivery schedules.
Delivery route planners often integrate with navigation apps to provide turn-by-turn directions, ensuring drivers can navigate efficiently without detours. But having real-time insight into your fleet and drivers position on the road can help with adjusting the routes instantly.
Drivers receive instant updates with route optimization helping to finish the last mile of delivery with precision.
6. Reducing Operational Costs With RO
Route optimization is a powerful tool to reduce overall operating costs in the delivery processes. The course of action required for effective route optimization involves a deeper analysis of factors like traffic conditions, customer needs, and fleet management.
Using efficient routes helps to reduce the monthly fuel expenses, and lower vehicle wear and tear.
Long, inefficient routes increase the strain on delivery vehicles, leading to higher maintenance costs.
The more time you spend on the road the more you need to pay for maintenance expenses, and overtime pay for drivers.
7. Route Optimization Simplifies Route Planning for Managers
Manual route planning is time-consuming and errors can happen at any time. Route optimisation software automates this process, generating accurate and efficient routes in seconds.
There is no need for a manager to stay up late to schedule the next day’s routes. Managers can focus on other strategic tasks, improving overall operational efficiency.
Route optimization software uses advanced algorithms to process a significant amount of data in seconds which includes:
- Delivery locations and priorities
- Traffic patterns
- Vehicle capacities
- Driver availability
- Specific time windows
8. Supporting Multi-Stop Deliveries
A delivery driver working for a retail company starts their day with a list of 15 packages to deliver across the city. They use an app that provides an optimized route, making sure they use the most efficient route when making these multi-stop route deliveries.
En route to the third stop, there is a traffic congestion. However the app quickly reroutes them to avoid delays. One of the stops has a time-sensitive delivery, so it’s prioritized and they ensure that it’s delivered within the promised window.
Route optimization considers all multi-stop routes and ensures the sequence is logical and efficient.
9. Leveraging Data Insights for Continuous Improvement
Data is collected from each delivery continuously with route optimization. It’s helpful, as it gives perfect insight into each driver’s performance and delivery times, as well as fuel usage.
To identify inefficiencies and areas where the business can grow, this data gathered through route optimization software can help put better structures in place to build the business.
10. Enhancing Delivery Route Transparency With RO
Delivery transparency is important to improve customer satisfaction. When there is no ETA or real time tracking, it creates unhappy customers.
Using a GPS tracking device can help to give customers an accurate idea of when their parcel leaves the warehouse, is on its way and will be at their door.
If you want to improve customer satisfaction, route optimization is vital. Businesses and customers can track deliveries in real-time.
Route Planning and Optimization Software
Route planning and optimization software is a powerful tool designed to help companies streamline their delivery operations.
This software uses advanced algorithms to determine the most efficient and cost-effective routes for vehicles.
By processing vast amounts of data, including delivery locations, traffic patterns, vehicle capacities, and driver availability, the software generates optimized routes in seconds.
For instance, a logistics company with a fleet of delivery trucks can use route planning software to ensure each truck follows the best route, avoiding traffic congestion and reducing unnecessary mileage.
This not only saves time and fuel but also improves customer satisfaction by ensuring timely deliveries.
The software’s ability to adapt to real-time changes, such as road closures or traffic accidents, further enhances its effectiveness, making it an indispensable tool for modern delivery operations.
Why Route Optimization Matters in Last-Mile Delivery
Route optimisation has shaped last mile delivery over the last century into a fast-growing business.
Whether you have three vehicles on the road or 50, route optimization helps save time, money and addresses challenges of urban congestion.
The demand for fast deliveries is not going to stop, in fact it will only get mor intense. Comapnies need to think fast and implement software that can put thier businesses on the top of their list of competors to stand out from the crowd.
About the author
Mia is a multi-award-winning journalist. She has more than 14 years of experience in mainstream media. She's covered many historic moments that happened in Africa and internationally. She has a strong focus on human interest stories, to bring her readers and viewers closer to the topics at hand.
