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Route Optimization for large fleets

How To Do Route Optimization Across Large Fleets?

Executive Summary

Route Optimization is the process that Fleet Managers use to arrive at the most optimal route(s) for their fleet vehicles to travel on while on their daily deliveries across multiple routes and paths.

It isn’t the shortest, cheapest, fastest, or the easiest route but the one that considers the myriad constraints that Fleet Managers must constantly balance for their daily schedules and deliveries e.g. number of vehicles, drivers, cargo type, destinations and distances, weather, and traffic, etc.

Since this is a herculean task involving massive computations and large teams, it is best solved by using a modern, automated Last-Mile Delivery Software that not only arrives at the optimal route(s) quickly but also optimizes company operations for cost and efficiency while balancing and using the available resources.

What does “Route Optimization” mean?

The process of identifying the most cost-effective route between multiple stops is referred to as “Route Optimization.

It isn’t the shortest distance between stops, or the cheapest, or the fastest – it is the optimal route covering all those multiple stops after taking into consideration all the constraints including cost (fuel costs, driver costs, fees, tolls, etc.), resources (number of vehicles, their capacities, number of drivers, etc.), number of deliveries, distances to be covered, and customer demands (delivery windows, rescheduling, etc.)

What challenges are encountered while doing Route Optimization? 

For Fleet Managers dealing with the issues of Route Optimization and Last-Mile Delivery, a constant problem they have to grapple with is the severe resource constraints such as limited resources and multiple deliveries. Route planners have to constantly juggle these various constraints while devising routes that are most cost-effective. However, the result of this daily Route Optimization is a cost-effective operation that offers quality logistics services. 

Additionally, the pandemic has meant that logistics companies suddenly have to deal with a massive increase in delivery volumes and this has made the task of Route Optimization even more complex and demanding. 

As mentioned earlier, the “shortest possible route” isn’t the one that is your most optimized route! Route Optimization must balance numerous other real-world factors and constraints – and, given that almost all of these are unpredictable by nature and can change significantly at any time (e.g. changing weather) makes it an even more complex and challenging task. 

Unending computations needed: endless calculations and a huge amount of computation effort sit at the very core of Route Optimization. Simply put, this isn’t something that even experienced Fleet Managers can solve manually.

Ever-changing, unpredictable elements: unfortunately, what compounds the Route Optimization problem is the unpredictability of the factors on which it is based i.e. weather, traffic, changing delivery windows, package returns and re-deliveries, re-routing (etc.)

Route Optimization: the optimal solution 

Although there are a few ways to address the Route Optimization problem (e.g. the traditional method of Manual Solving, and Preset Solvers) there really is only one effective method which is by using modern, automated fleet management software since it is the only method that solves for all the actual constraints that you function under. 

What features should a Last-Mile Delivery Software have?

When selecting a last-mile delivery software to do Route Optimization, Fleet Managers must ensure that it has the following features:

  • Safety provisions  
  • Uses a modern and flexible set of algorithms 
  • Can optimize routes for several fleets across multiple-stops
  • Cost-effective
  • Scalable 
  • Uses electronic Proof-of-Delivery (e.g. by using ePOD software)
  • Can be installed easily on Driver/User phones as a convenient App
  • Robust reports and insightful analytics

What problems does Route Optimization solve?

Route Optimization improves the efficiency of logistics companies in numerous ways: 

1) Manages resource constraints: The greatest challenge that Logistics companies operate under is resource constraints, a problem that has been severely exacerbated during the pandemic. Using a route-optimization software enables Fleet Managers to consider, and balance, all the constraints and quickly arrive at the most optimal route(s) to achieve their targeted daily deliveries by using the number of vehicles and drivers at their disposal at the time.

2) Minimizes fuel costs: Fleets operate a large number of vehicles, drivers and have multiple stops along the same route. By using last-mile delivery software, logistics companies can minimize the number of vehicles required, their stops as well as the time spent on the road. This optimizes fuel consumption, which forms approximately 60% of the operating cost for a fleet management company.

3) Improves Driver performance: Route Optimization software helps in tracking driver performances and maintaining a balanced Driver Scorecard for fleet drivers. This provides feedback to drivers for their improvement (braking, hard-cornering, acceleration, deceleration, etc.), uses the driving history of the good drivers as examples to emulate, and achieves a high level of driver efficiency for the fleet.

4) Reduces last-mile costs: last-mile delivery costs are often the most significant – and, troublesome- for a logistics organization. And, the larger the fleet, the more compounded the problems become. Route Optimization reduces numerous last-mile delivery costs (e.g. maintenance, re-routing, idling) to help maintain a cost-effective operation.

5) Timely and safe deliveries: Route Optimization software is the best way to achieve the task that fleet companies are contracted for by their clients i.e. timely deliveries using the prescribed safety protocols. Given the numerous destination points, it would be impossible to achieve this without using such a modern, automated system.

6) Customer satisfaction: at the end of it all, businesses exist to satisfy their customers. Without happy customers, no business could survive. For fleet management companies to maintain satisfied customers, they must ensure timely and safe deliveries, maintain competitive prices and accommodate the forever demanding customers in today’s competitive environment. All this would not be possible without the use of excellent last-mile delivery software.

Conclusion: Logistics Companies need to constantly juggle the ever-changing customer demands, operational conditions, and resource constraints to meet their daily delivery schedules. Using Last Mile Delivery Software is the only way to stay on top of such needs and keep their customers satisfied.

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