Reducing Delivery Costs with Truck Route Optimization

In fleet management, route optimization refers to the process dispatchers and routers use to determine the best routes for their vehicles to take when making deliveries across multiple delivery drop-offs. The best route isn't just the cheapest, shortest, easiest, or fastest, but the one that takes into account the many factors fleet managers must consider while scheduling and executing their daily schedules.

Once you’re routing more than about 25 stops per day, the free truck route planning tools on the market mostly stop working for you. And once you’re routing more than a small handful of trucks, the amount of time and effort it would take to jerry-rig truck routes by hand (or with a lightweight free tool) is likely to cost you more in time and effort than a robust truck route optimization software solution would cost in monthly subscription fees. 

Due to the herculean task of computing the optimal routes and coordinating across large teams, your best bet is to use an automated truck route optimization software that not only calculates optimal routes in real-time but also optimizes business processes for efficiency and costs. 

From there, you can build the foundation for faster, smarter, and more efficient delivery management—no matter the size of your fleet.

How Does Truck Route Optimization Work?

Route optimization refers to the process of determining the most efficient cost-effective routes for multiple drop-offs. Anyone who has tried to create routes that account for driver skill and availability, customer time window requests, and myriad other variables can tell you just how difficult it is to get this process right. 

A tremendous amount of computation goes into optimizing routes—it isn’t something that even the most seasoned route planners can handle effectively without some kind of route optimization tool. This becomes even more true when you account for the fact that truck route optimization involves constantly changing and unpredictable factors. 

Changing delivery windows, backhauls and returns, weather, re-routing, traffic, and re-deliveries all conspire to turn perfectly good routes into disorganized messes on the day of delivery. 

And the larger your operation, the more complex all of this can become. Even getting enough processing power to route all those trucks can become an issue if you don’t have the right tools!

What Features Should Your Truck Route Optimization Software Have?

When choosing route optimization software for last-mile delivery operations you should ensure that the software has the following features and capabilities:

• Route optimization for large, complex fleets across multiple destinations
• AI-powered algorithms that learn from previous delivery runs  
• A driver mobile application
• Electronic proof of delivery via notes, signatures, and photos
• Scalable SaaS technology that can handle thousands of trucks without breaking a sweat
• Robust reporting and analytics systems

Achieving Optimal Routes Through Truck Route Optimization Software 

There are plenty of different ways to approach route optimization, but by far the most effective way is using modern, AI-powered truck route optimization software. Why? Because it is the only method that actually takes into account all the real constraints that last mile deliveries present. 

The best route optimizer can offer large fleets a number of potential benefits, including: 

Reducing fuel costs

Large fleets operate numerous vehicles, employ many drivers, and leverage myriad delivery routes across different regions and geographies. With the use of delivery route management software, you can reduce the number of miles traveled and the amount of time that drivers spend in the field for each delivery. This helps to reduce fuel consumption, which makes up about 60 percent of the overall operating cost for companies running large fleet operations.

Boosting on-time performance

The best way to meet their customers' requirements for timely deliveries is to optimize your routes. Because of the large number of delivery drop-offs, it would be impossible to reach this goal without modern software that could turn complex requirements into optimal routes in a matter of seconds.

Crucially, if on-time performance is your goal, you need to find a route planning app that specializes in accurate ETAs. The smartest routes in the world won’t bolster your performance if they come with unrealistic ETA estimates that drivers can’t adhere to. Here, it’s best to utilize an AI-powered route optimization solution that can generate 98% accurate ETAs. 

Saving time and labor in route planning

An optimized route saves significant time for drivers—but the process of using the right route optimization software to create those routes can save huge amounts of time for your route planning team as well. 

DispatchTrack’s customers regularly see their time spent routing decrease by 50% at least. The result is significant time and cost savings in the routing process as well as the ability to shorten delivery lead times. After all, the more quickly you can get late orders routed, the further back you can push your order cutoff. At the same time, this frees up route planners’ time to work on more strategic and valuable tasks. 

Managing resource constraints effectively

One of the main challenges that companies face in the last mile is resource constraints. Fleet managers can use route optimization software for trucks to assess and balance a host of different parameters to find the most optimal routes to reach their daily delivery targets by utilizing their available fleet of vehicles and drivers. 

Often, what seems like a lack of delivery capacity is in fact a symptom of suboptimal delivery routes. 

Improving driver performance

Route optimization software assists fleet managers in tracking the performance of drivers and giving them the tools to do their jobs more effectively. This starts with leveraging smart delivery routes to help drivers complete more deliveries each day. 

From there, you can implement robust customer communication tools to help ensure that drivers are delivering to addresses where customers are actually home to receive deliveries. Modern solutions can even bring AI into the equation to empower drivers with contextual intelligence at each stop via AI-generated voice notes. 

Reducing costs across the last mile

Last-mile delivery is often the most costly—and challenging—part of logistics. With larger fleets, the problem with high costs is compounded even further. Route optimization helps lower the cost of last-mile deliveries by cutting down expenses related not just to fuel, but to labor, re-routing, idling, and more, thereby keeping operations as cost-effective as possible.

Improving customer satisfaction

Ultimately, businesses exist to meet the needs of their customers. If your customers ain’t happy, ain’t nobody happy. To retain customers, it’s important to find a way to satisfy modern consumers’ demands for cheap, fast, accurate, and predictable shipping. 

This requires you to get the most out of your existing capacity—and do so in a way that prioritizes visibility from end-to-end. If you can extend that visibility to your customers while ensuring on-time delivery performance, they’ll be more likely to buy from you again in the future. By using the right truck route optimization software, you can accomplish just that. 

DispatchTrack: AI-Powered Route Optimization for the Last Mile

DispatchTrack has been using AI and machine learning to achieve the cutting edge in route optimization for many years now—and our customers can attest to how versatile our truck route optimization software really is. 

Our platform helps businesses:

• Reduce time spent routing by 50% or more
• Improve on-time delivery rates to 98% or better
• Update routes in minutes as needed
• Create intelligent routes for a wide variety of use cases (including reloads, overnight, store stops, and more)
• Generate strategic route plans in radically less time

This all sits within an end-to-end last mile logistics platform that covers the entire delivery journey: order management, routing, dispatching, customer engagement, driver management, delivery tracking, reporting, and beyond. We integrate seamlessly with other solutions in your tech stack to help power true connected logistics. 

If you’d like to learn more about how we can help you reduce logistics costs and improve customer satisfaction, book a demo today.