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How Can Lumber Distributors Save Money with Smarter Route Optimization?

The competitive landscape for lumber dealers is tougher than ever—with big box stores and smaller online sellers trying to take a slice of the pie and evolving expectations around delivery experience, it can be tough to maintain profit margins.lumber distributors route optimization

In circumstances like these, building materials delivery operations present an interesting dilemma. In some ways, for many lumber dealers it would be easier to outsource last mile deliveries—after all, it’s difficult to compete with the largest players in the space, and when you’re not able to offer a comparable delivery experience you wind up weakening your brand. Outsourcing enables you to focus on your core competencies and leave the last mile challenges to someone else. 

At the same time, handling your last mile deliveries in house gives a huge increase in control—not just over the kind of customer experience you offer, but over costs. Simply put, when you have the right tools and processes in place to effectively orchestrate your last mile deliveries from end to end, you can roll out a branded experience that speaks to your business and builds relationships with customers, all while ensuring cost-efficiency across the board. 

One of the most powerful ways to put yourself in the driver’s seat in this way is to implement smarter route optimization technology. In this article, we’ll go over how and why upgrading your route optimization can empower cost savings for lumber dealers. 

Reduce Fuel Costs via Route Optimization

The simplest way to reduce costs with smarter route optimization is also one of the most powerful: reduced fuel costs. Fuel costs and driver hours (more on that below) are two of the biggest contributors to last mile delivery costs across any industry, and lumber’s no different. Whatever you can do to substantially impact these costs can go a long way towards strengthening your margins.

The best route optimization engines can save you more than 10% of your miles driven, thereby reducing your total fuel consumption by the same amount. The trick here is to make sure that you’re actually creating routes that work for your business. Something that might look efficient on paper might not actually be built to execute—you need to be able to effectively factor in equipment constraints, driver skill/speed, and other factors in order to blend planning and execution. 

Cut Down on Driver Time per Delivery

When your drivers have the most efficient possible routes for the use case, they can drive fewer miles and complete each delivery in less time. Broadly speaking, this ensures that you’re able to get the most out of your fleet and reduce your cost-per-delivery significantly. 

But effective route optimization is about more than just minimizing distance—it’s also about making sure that you deliver at the right time. Smart, AI-powered route optimization engines can empower you to pair efficient sequences of stops with highly accurate delivery ETAs. 

This is a bigger deal than it might seem at first glance. When you show at the right time, every time, you significantly reduce the odds of a missed or failed delivery. When you show up at a jobsite that can’t accept the delivery for whatever reason, you may be stuck making a redelivery attempt later—which means you risk damage and your cost-per-delivery skyrockets. Improved ETA accuracy decreases this risk significantly. 

At the same time, some route optimization solutions for lumber distributors will enable efficient customer self-scheduling. When you can balance customer delivery requests with your actual capacity limitations, you can maintain cost-efficiency while delighting your customers with a more flexible experience. 

Speed up Route Planning and Other Processes

We’ve talked a lot about the output of a next-generation route optimization engine, but let’s talk about the other side of the equation. 

Routing lumber deliveries by hand can be incredibly time consuming—determining the fastest routes is next to impossible once you add in more than a couple of parameters, and eyeballing your delivery ETAs is a recipe for late deliveries and the chaos that comes with that. Even many legacy routing solutions offer a slow and frustrating experience—either taking forever to generate a route or requiring so much manual intervention to fix unworkable routes that it amounts to the same time. 

The result is the same either way: you spend significant resources internally to get your routing done. This eats up costs, yes, but it also eats up time. The right route planner will enable you to create routes in a matter of minutes and adjust them as needed without long lead times. The result is significant reductions in time spent routing, which saves on back-office labor costs. 

<< Learn How BMD Leveraged DispatchTrack to Scale up Their Last Mile Processes >>

Get Lean by Decreasing Lead Times 

As if saving time on routing effort weren’t good enough—smarter, faster route optimization can also help you shorten your delivery lead times. Simply put, when you can route more quickly, you can move your order cutoffs back and respond to customer orders in less time. 

This is more than an added convenience for you and your clients. It’s also a valuable way to decrease your inventory costs by making your entire last mile delivery operation leaner. The faster you can move product from the warehouse or distribution center to customers, the more easily you can get away with decreasing your inventory overally. 

In this way, route optimization can help lumber dealers to actually decrease their overall warehousing costs—thereby addressing another of the major logistics costs that building supplies distributors face in the industry. 

Integrate Routing with Tracking and Execution to Uncover New Efficiencies 

Most of the power of a route optimization solution for lumber distributors comes from the direct cost-savings that we’ve discussed above. But another part of the equation is how route optimization fits into your overall logistics technology stack. 

Route optimization on its own can be a powerful tool, but when it’s closely integrated with other last mile capabilities the impact can be multiplied significantly. For instance, by integrating your route optimization with your customer experience, you seamlessly offer more accurate order ETAs to customers during the delivery process. 

By the same token, if you’re able to continuously update your ETAs over the course of the delivery day, and you have a last mile delivery tracking dashboard that shows you those ETAs at a single glance, you can quickly zero in on potential delivery exceptions. From there, you can reach out proactively to customers about late deliveries and other issues to keep them from snowballing into bigger problems. 

Route optimization that’s fully integrated with the rest of your last mile delivery management is also easier to integrate into your overall logistics technology stack. Since it’s just one solution that acts as your last mile planning and execution command center, there are fewer connections and data flows that have to be set up and maintained. Simply put, it simplifies the entire integration process—especially when you’re using software that makes it easy to set up the dataflows you need. 

There’s no magic bullet for the challenges that impact lumber dealers. But when it comes to last mile delivery, there’s a lot of room for optimization compared to the status quo. By leveraging smarter route optimization within their last mile operations, lumber distributors can do more than just save money—they can lay the foundations for smarter, faster, more agile deliveries across the board. 

 


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