Delivery fleet operators could be raking in higher incremental profits as well as more customer goodwill. That’s if they know how to make their operations efficient.
Efficiency gains can help a business achieve six or even seven-figure savings while making important improvements to their delivery service and quality levels. This holds true regardless of whether the business is involved in retail, manufacturing, or distribution.
Crucial to getting such benefits is optimizing delivery routes. Companies must ensure that their fleets are operating at maximum efficiency every single day.
In this article, we will tackle why delivery route optimization is a must these days, and how businesses can benefit from it.
What are the Market Forces Driving Efficient Delivery Operations?
Managing delivery fleets has become increasingly complex. Changing consumer preferences and regulations, among other factors, are driving the need for businesses to rely heavily on route optimization. Below are the market forces making fleet delivery management more complicated than ever.
More recurring deliveries
Supply chains are getting leaner, which results in less inventory in warehouses, on shelves, and even in production lines. A lean supply chain means smaller but more frequent shipments being delivered just in the nick of time.
Tighter time frames and need for more visibility on ETAs
Thanks to giants like Amazon, consumers around the world are now expecting not just quick deliveries but also precise delivery time frames at affordable rates. They want to know the exact date and time of the delivery of their packages.
Fuel price volatility
Fuel costs account for a large chunk of last-mile delivery expenses. Unfortunately for businesses, it is difficult to predict when fuel prices will spike. A high fuel bill is always bad for an enterprise, which is why it is necessary to make the most of every gallon of fuel to minimize the financial consequences of spiking fuel costs.
The driver shortage is a problem that the trucking industry has been dealing with for years. A study by the American Trucking Association (ATA) revealed that the industry is currently short of around 50,000 drivers. This number will likely increase in the coming years.
Urban delivery restrictions
Local governments are implementing more restrictions on commercial deliveries to address growing environmental concerns and vehicle congestion, thus complicating route planning.
How Route Optimization Helps
Route optimization is the practice of determining the best routes for delivery vehicles according to different variables such as the number of stops and traffic and road conditions, to name a few.
An effective way to optimize delivery routes is via a route optimization software, which can drastically cut delivery fleet operating expenses without compromising on consumer satisfaction.
Delivery route optimization offers many benefits, not just for the business, but also for the community. Here’s a look at these benefits.
Reduction of costs
On average, businesses that use routing software to optimize the performance of their fleets see a reduction of 10 to 30 percent in their fleet operating expenses. But just how does a business achieve such cost savings with the help of route optimization software
Increased driver and vehicle utilization
The biggest impact of route optimization software can be seen in the high utilization of vehicles and drivers. An advanced software, after all, efficiently matches deliveries to drivers, taking into account driver skills and available hours of service (HOS) under the HOS rules. This effective matching allows businesses to maximize the use of their vehicles every single day, as well as the number of deliveries the drivers can make in one day
Lower fuel expenses
Route optimization software normally leads to a reduction of time and miles driven, thus less consumption of fuel. Lowered fuel expenses affect a business’ bottom line significantly given that fuel costs are the second biggest expense in fleet operations, only next to driver-related expenses.
Decreased or eliminated need for third-party carriers
Maximizing vehicles and drivers means reducing the need to obtain the services of third-party delivery partners.
Fleet performance optimization is not a one-time benefit, as any business should always strive to improve their operations and increase their savings.
Improvement of Delivery Services and Customer Satisfaction Scores
Route optimization is not just about optimal fleet use and driver assignment. It is also a key driver in improving a business’ delivery services, which results in higher customer satisfaction levels. Route optimization, after all, offers accurate delivery time frames and reliable ETAs to consumers.
Route optimization satisfies consumers’ demand to know when their packages will arrive so they can plan ahead. It also allows for customers to place their orders even at a later time of the day since route planning software reduces the planning time for fleet managers, allowing fleets to receive late orders yet deliver them the same night or the next day.
Plus, route optimization satisfies the consumers’ demand for transparency in their orders, especially since the software is connected to the in-cab telematics system, which lets customers receive notifications regarding their packages.
Burning less fuel is key to cutting down last-mile deliveries’ contribution to greenhouse gas emissions. Fortunately, route optimization shortens the miles driven by fleet drivers, hence, reducing a fleet’s carbon footprint.
Plus, drivers’ idling time can be minimized since route optimization software informs both warehouse management teams and consumers of driver movements, allowing them to prepare for the arrival of deliveries.
Today’s economy requires a closer look at technologies that can propel businesses to greater heights. And in fleet management, investments in route optimization are necessary to ensure the business’ competitiveness. Route optimization remains an underrated business strategy in the industry, but implementing routing and planning software like DispatchTrack can take your company’s profitability and customer satisfaction to the next level.