Can Route Optimization Software Reduce Your Business Cost?

Navigation & guidance app systems require the selection of best routes for their operations. The best route software system provides route guidance instructions using navigation sensors.

The definition of best route may be different from one application to another.

It may be the fastest route or the safest route.

The complexity of computation increases when many parameters and large size of road networks are involved. Conventional algorithms are not suitable for navigation and guidance systems, as they cannot meet the real-time requirement. Alternative approaches, such as heuristic algorithms, have been proposed.

What is route optimization?

It is the process of determining the most cost-efficient route. It’s more complex than simply finding the shortest path between two points and includes points such as the number and location of all required stops on the route.

Other factors:

Number of turns or intersections along the route

Left hand turns (crossing the line of traffic)

Best or nearest driver to dispatch on the route

Traffic congestion for current time of day

Best approach to a stop on the route

Different route options can quickly add up.

With one vehicle and 10 stops, the number of possibilities is 3,628,800. If you have a fleet of five vehicles that number jumps to a whopping 37,267,043,023,296,000.

This is why route optimization is performed by computer algorithms and advanced heuristics that can quickly narrow down the options.

Route optimization solutions help home delivery businesses minimize driving time and fuel consumption by finding the most efficient route for the entire fleet.

Route planning gets complex when you need to account for delivery time-windows, balancing loads across the fleet etc.

Navigation apps like Waze and Google Maps might be considered to get directions from point A to B.

But what happens when you need to plan routes for point A to Z or when you have 100, or 1,000 destinations?

Alternative to Google Maps

If you have more than a few stops, you need a tool that can find the optimal order of stops, with all of their complexity, to ensure your routes are efficient. They need to be efficient because the costs associated with delivery route plans are recurring, and can have an impact on profitability.

Consider an alternative to Google Maps if you have any of these 4 problems:

Routing constraints

Time windows: Customer wants their delivery to arrive within a certain time-frame (e.g. 2pm and 4pm).

Driver shift times and breaks: Driver’s shift time and break needs to be incorporated into the route.

Vehicle loads

Stop distribution and route assignment: The solution must evenly distribute stops across your fleet of drivers, looks for the minimum number of drivers required, or assigns routes to the best or nearest driver.

Driver & Vehicle Prerequisites: Driver with a specific skill-set or customer relationship to a stop.

You need to plan the optimal stop order

Driving distances and working time carry with them high fuel and wage costs. Using a tool can help find the optimal sequence of stops. Manual figuring of a good stop sequence is very time-consuming.

You need to create routes for multiple vehicles

If you have to divide a list of addresses between two or more vehicles, you probably want to determine which driver should be getting certain delivery orders. The constraints get more complex with factors such as:

Where in the route the driver will be located relative to another address
If their shift times intersect with the customer’s time windows
If they have enough room in their vehicle for the order

You need to manage the rest of the delivery operation

There is more for a delivery business to consider than optimal routes. Route planners encounter problems related to fleet management, delivery experience, and internal operations. A software solution should help with the following:

Live Route Progress: Tracking driver location, identifying if they are sticking to their routes, ensuring they’re on target for the ETAs and knowing when a problem is happening are critical components of effective delivery route execution.

Customer Status Updates: Modern route optimization platforms can automatically communicate ETAs to customers.

Proof of Delivery: Capturing a signature so proof of delivery can be sent over email protects delivery businesses from a legal standpoint. It also helps customers identify who collected the package, and at what time.

Benefits of Delivery Route Optimization Software

Delivery route optimization software can help a delivery business to reduce its driving time by up to 40%, and route planning time by up to 95%.

Planning routes in minutes, not hours

The value of time is a non-monetary cost, but it can be translated into a financial spreadsheet.

Weigh the time spent on route planning vs. your wage for that period of time + the additional monetary value you could generate by working on other tasks.

Lowering costs to increase profitability

Route optimization has become important to delivery businesses because of competition in the market space. For profitability, revenues need to exceed costs, but businesses aren’t finding room to raise prices.

The biggest reason customers do not opt for delivery is because of the price. This sentiment has led to a surge in route optimization software adoption for delivery companies.

Disclaimer: The Blog has been created with consideration and care. We strive to ensure that all information is as complete, correct, comprehensible, accurate and up-to-date as possible. Despite our continuing efforts, we cannot guarantee that the information made available is complete, correct, accurate or up-to-date.

16+ Years of Industry Experience

Can Route Optimization Software Reduce Your Business Cost?

Table of Contents

What is route optimization?