What Is AI-Powered Routing?

Route planning used to mean choosing between two options: bad and worse. Traffic jams, vehicle breakdowns, weather delays, and constantly changing delivery volumes create thousands of variables that no human planner can juggle effectively. The result? Drivers stuck in traffic, customers waiting for late deliveries, and companies bleeding money on fuel and overtime.

Fortunately there’s now a solution to this problem: AI-powered routing. AI-powered routing changes this by processing massive amounts of real-time data to find optimal routes in minutes, learning from every delivery to get smarter over time. 

With a route optimization solution that’s been equipped with AI- and machine learning-based capabilities, you gain unmatched computing abilities and the ability to optimize routes in a matter of minutes. 

KEY TAKEAWAYS:

• Traffic congestion costs the trucking industry $74.5 billion annually - equivalent to 425,533 truck drivers being stuck in traffic all year
• AI route optimization learns and improves over time, unlike static mathematical routing that stays the same
• Fleets lose $6,500 per truck yearly due to traffic congestion alone
• E-commerce growth is accelerating demand for faster, more efficient delivery routing
• Dynamic route optimization allows real-time adjustments for last-minute changes and maximum capacity utilization
• Cost savings come from multiple sources: reduced fuel consumption, less vehicle wear, automated planning processes, and improved labor efficiency

The Impact of Artificial Intelligence in Route Optimization

Let’s talk about exactly what we mean by AI. Historically, it was possible to generate routes simply through mathematical brute force—i.e. generating as many conceivable routes as possible and then analyzing which one was the shortest. But with AI you can build systems that get better at predicting the ideal route over time. How? Because machine learning and AI algorithms are capable of uncovering trends and correlations in gigantic quantities of data that human beings would simply never be able to uncover with the naked eye. 

This means that the route planner can identify more and more of the factors that correlate with efficient routes over time. The more routes you plan with it, the better it gets at predicting driver behavior, traffic patterns, and more—which means that ETAs for particular stops go from being guesswork with large windows to precise and accurate estimates based on real data. 

AI solutions are always learning from the information they gather and analyze so they can come up with more predictive strategies and recommendations. Artificial intelligence can turn historical traffic data, previous routes, customer locations, current traffic notes, and even particular truck and driver data into more optimal routes. Compare this to the alternative: if you have a route planner that always spits out routes that are efficient but lack reliable ETAs, you’re stuck manually adjusting those ETAs for every route in order to avoid disruptions. This means that you’re pouring person-hours back into fixing the work of a solution that was supposed to automate this process. 

With AI, you can avoid that element of human rework—the algorithm really can do the heavy lifting, even in situations where the parameters and constraints are incredibly complex. It’s easy to imagine what some of the benefits here might be:

1. Minimizing Lost Time

A report entitled "Cost of Congestion to the Trucking Industry" revealed that traffic congestion costs the trucking industry some $74.5 billion annually, which are added to the industry's overall operational cost. That's equal to 1.2 billion hours of lost productivity or around 425,533 truck drivers stuck in traffic for the whole year. Fleets lose $6500 per truck every year due to traffic congestion.

That was several years ago, and it's only gotten more pronounced in the mean time. The high demand for online shopping isn't going away anytime soon either and more businesses are offering both next-day and same-day deliveries. E-commerce is pushing more drivers and vehicles on the road with worsening traffic and shorter timeframes.

A route planning solution is the best way to cut down lost time due to traffic congestion. A delivery route planner ensures that drivers are given the fastest routes, or routes with less idle time due to heavy traffic. With the power of artificial intelligence in tow, you can more effectively anticipate and avoid potential traffic situations by gathering and analyzing congestion data over time. 

2. Offering Faster Delivery Times

It's not easy to compete with giants like Amazon and Walmart, but with an AI-powered route planner, smaller businesses can go head-to-head with the big brands. Rapid delivery route planning is key to ensuring that orders are dropped off cost-effectively and on time. Since AI helps speed up calculation time, you can easily route orders for the next—or even the same—day. And because your routes are more efficient, you can complete more deliveries in a given day. 

By the same token, faster, more precise delivery routing means that you can be more agile when it comes to accommodating last minute changes or additions. In the manual route-planning era, it was difficult to make adjustments to or extract any extra capacity out of routes that had already been set. But with dynamic route optimization powered by AI technology, you can adapt to changing circumstances quickly and easily. 

3. Powering Cost Savings

The less time each truck in your fleet spends on the road per stop, the more costs you cut. Fuel expenses are reduced significantly when drivers are given the fastest routes. And fuel costs, after all, account for a large percentage of a business's overall transportation costs.

Aside from savings on fuel bills, businesses also get to save money with the automation that AI-powered delivery route planners provide—seeing as they eliminate laborious processes in manual route planning. Saving labor hours is obviously another big opportunity for cost savings. And, of course, this is in addition to the reduced fuel usage we talked about above, plus less fleet wear and tear, etc. etc. 

Companies competing with major brands need efficient fleet routing to stay competitive. AI-powered route optimization helps businesses maintain fast, cost-effective deliveries even as order volumes grow, traffic increases, and last-mile logistics become more complex, overcoming the fundamental difficulties of last mile routing.

Other Use Cases for AI in Logistics

AI has been making an impact in the world of route optimization for several years at this point—and as it turns out that use case was a harbinger of things to come. In the meantime, and particularly in the last two years, we’ve started to see more and more use cases beyond AI routing.

For instance, businesses like Jetson TV and Appliance have seen serious results leveraging AI-powered chat agents to handle inbound customer questions, with “70–80% of inbound delivery calls now handled automatically.” This kind of functionality sits atop your two-way customer communication capabilities and acts as a first line of defense to autonomously answer straightforward customer questions in a conversational way. 

By the same token, businesses like Updike Distribution Logistics have seamlessly inserted AI-generated location intelligence into their driver workflows. This takes the form of a voice note that lets the driver know about potential parking and access issues and keeps them apprised of any customer-specific requirements. According to UDL’s Director of Logistics, “it’s like having a local expert in the cab."

Within the next couple of years (and likely much sooner than that), we expect to see AI-powered capabilities around dispatching and reporting being added to a mix that already includes AI routing. As this technology gets more sophisticated, it will offer logistics businesses ever greater opportunities to decrease costs and improve performance. 

Conclusion: AI Routing Isn’t the Future—It’s Already Here

AI routing is something that’s already making a huge impact for delivery organizations around the globe. It’s helping them achieve huge improvements in ETA accuracy as well as greater route density and efficiency. That makes it a real competitive advantage for businesses that leverage it. 

And by leveraging AI routing, you’re also putting yourself in a position to take greater advantage of the other technology improvements that AI has to offer. It can be the first step towards digitizing your delivery technology and ultimately boosting efficiency across all functional areas.