One of the most crucial steps you can take to expand your trucking or delivery operations is investing in a route optimization solution.
Relying on Google Maps and Excel sheets to plan your delivery routes might have worked for you thus far, but it will become next to impossible if you're planning for dozens of drivers with hundreds of routes. It will cost you a lot of time, effort, and money – resources that are better put elsewhere in your business.
So let’s take a look into what route optimization is and why it’s a crucial component of your delivery operations.
What is route optimization?
Route optimization is the process of finding the most cost-effective path to take from point A to point B. A lot of people think that this means finding the shortest route. This is true in some cases, but you'll find that this isn't always the case for the most optimized route.
The truth is that finding the most optimized route involves several factors beyond just distance. One of the most important is the traffic conditions of the route. During peak hours, the shortest route might often be the most congested. Sometimes, taking a longer, less crowded detour is faster.
Other important factors include the delivery window , accessibility of the right tools for the job (example: is a large truck needed to complete the task?), the number of intersections along the route, and the nearest driver that can run the route.
Route optimization benefits
The biggest reason for using route optimization is the cost and time savings it can give you. You'll often use the route that takes the shortest time so that you can save on gas costs.
A hidden benefit of route optimization is that your truck is exposed to less wear and tear, meaning you can save on maintenance costs as well.
With proper route optimization, you can help ensure that your customers get their cargo on time, every time. A properly chosen route means happier customers that can turn into loyal fans.
You can also save on labor costs, because drivers won’t need to log overtime hours just to complete all of their deliveries. You’re also able to maximize your drivers’ productivity by adding more stops into their routes, getting more delivered throughout the day.
How route optimization works
Planning the best route from point to point is a complex operation that involves plenty of possibilities. It’s too time-consuming for drivers to manage alone, so drivers often rely on a route optimization app that uses a route optimization algorithm or optimized driver routing that allows you to optimize routes and driver schedules based on vehicle locations.
The science is simple. You simply compare the paths from one point to the other, then find the most time or cost-effective options. Routing optimization considers several factors, like the shortest route, traffic and weather conditions, or number of drivers to determine the best course of travel. This helps managers and planners to make their delivery routing decision.
The driver will most often have a route optimization GPS app on their end. It allows managers to track vehicles and adjust routes on the fly if needed.
Even with modern computing power, delivery route optimization is still an intensive process. Mathematicians and computer scientists have yet to find the best route optimizer formula that perfectly weighs the different business objectives of service management. That’s because the number of possibilities goes up exponentially the more stops you add to the calculation, and that’s just for one vehicle. Adding more to the equation (which is how the real-world works) ramps up the complexity considerably.
Types of route optimization
When scouting around for route optimization solutions, you need to be aware of the different routing methods available to you.
Standard routing prioritizes getting from stop to stop on time by following a specific schedule. The advantage of this method is its predictability. It ensures your customers will get their packages or services at the time you promised. The standard method, however, might cost you more in terms of fuel costs. It's best used for business-to-consumer-oriented business where customer service is essential.
Dynamic routing prioritizes cutting costs over everything else. It will always calculate the routing schedule that's the least expensive, however, you sacrifice predictability in the process. Your customers won't always have a specific time where they can get the package. The dynamic method works best for specialized business-to-business companies, or when delivery costs are particularly high.
Types of routes
It’s important to note that there are two different types of routes:
- Fixed route - when the driver always travels to the same places throughout a shift.
- Dispatch routing - when someone makes a request for a service at a specific location and the driver needs to be directed to that location - think appliance delivery or field services.
Both of the strategies described above can be applied to either fixed route or dispatch.
Optimizing routes with Lytx
Lytx’s fleet management services can help you with route planning and fleet safety, both of which are crucial for modern delivery businesses. The Lytx Fleet Tracking Service uses cutting-edge technology to combine GPS and real-time mapping data, allowing dispatchers to adapt to traffic and driving conditions to optimize routes. This data is also a powerful tool for analyzing route history and recognizing patterns, helping you plan for more efficient routes, improved performance, and ultimately, higher levels of customer satisfaction.