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.
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.
Route Optimization 101
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.
And because of the COVID-19 pandemic, logistics organizations have suddenly been faced with an exponential increase in delivery volumes, which has made the task of route optimization even more challenging and complex. For fleet managers dealing with the issues of last mile delivery and route optimization, one of the most commonly faced challenges is a lack of resources—it's a constant struggle for route planners to balance all of these factors to create the best possible routes.
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 route optimization involves constantly changing and unpredictable factors. Changing delivery windows, package 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 Last Mile Delivery Software Have?
When choosing a route optimization software for last-mile delivery operations, fleet managers should ensure that the software has the following features and capabilities:
- Optimizes routes for multiple fleets across multiple destinations
- AI-powered algorithms that learn from previous delivery runs
- Installable as an easy-to-use mobile app on drivers' phones
- Can capture electronic proof of delivery such as notes, signatures, and photos
- Scalable technology that can handle thousands of trucks without breaking a sweat
- A robust reporting and analytics system
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 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:
Managing resource constraints effectively
One of the main challenges that companies face in the last mile is resource constraints—a problem made more acute by the recent pandemic. 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 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.
On top of that, drivers can receive feedback for improvement on behaviors such as hard-cornering, hard braking, overspeeding, and excessive idling. Paying more attention to drivers’ performance enables fleet managers to obtain even higher levels of driver efficiency.
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, retailers and other businesses 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.
Improving on-time performance
The best way for fleet companies to meet their customers' requirements for timely deliveries is to optimize their 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.
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.
Powering customer satisfaction
Ultimately, businesses exist to meet the needs of their customers. Businesses cannot survive if their customers are not 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, 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.