The Key to Successful Delivery Route Optimization

If you own a delivery business or use logistics planning at all, you might understand that planning a delivery route might not be that big of a challenge, but optimizing a delivery route is a whole other story. 

To optimize a route you need to account for a multitude of data points like vehicle attributes, delivery time requirements, and driver availability just to name a few. It’s no walk in the park if you don’t have the right tools for the job.

Fortunately, there are easy ways to start optimizing your routes today. If you run a delivery business, you’ll jump at the chance to increase the number of orders you can fulfill, but you’ll probably leap at the chance to do it in less time and for a lower cost. That’s the power of route optimization, and that’s what we’ll be breaking down today.

To jump to a specific section, go ahead and browse one of the headers below:

• How Can Route Efficiency Be Improved?
• What Are 5 Major Benefits of Optimizing Transportation Route Scheduling?
• How Do You Optimize a Delivery Route Plan?
• How Much Does Route Optimization Cost?

How Can Route Efficiency Be Improved?

Route efficiency is the secret sauce to a successful delivery business. More efficient routes enable drivers to make more stops, burn less fuel, and do it in less time, which can subsequently lower the labor costs for business owners. All of that unlocked efficiency contributes to more profits hitting the bottom line. 

You can manually improve route efficiency by taking care of the low-hanging fruit first. If you haven’t already, you could take some time to organize your stops in the order of shortest distance. If you have multiple drivers, you can assign routes based on their geographical proximity to the driver’s location. 

You could also consider which routes tend to use more fuel, e.g. perhaps certain roads, intersections, or highways are notorious for bad traffic at specific times of the day. It might be that the more fuel-efficient and faster route involves an alternate route that technically covers more miles. 

These are just a few of the tens, even hundreds, of data points that you can look at to optimize and improve route efficiency. Of course, the easiest way to improve route efficiency is to use delivery route optimization software which handles all of these variables for you and takes all of the heavy lifting off of your plate.

What is delivery route optimization?

Route management encompasses both the planning and optimization of routes. The goal is to wring the most value out of your fleet and achieve higher levels of customer satisfaction. Optimizing your routes can significantly improve your business’s bottom line by reducing driving hours, mileage, and gas usage while still maintaining top-notch delivery service.  

Route optimization is the answer to solving what’s known as the traveling salesman problem (TSP). Solving the TSP involves finding the shortest and most efficient route possible between a set of destinations. Fortunately, solving the TSP is easier than it ever has been before when you use a delivery route optimization algorithm. 

Most delivery route planning software is built on a delivery algorithm that accounts for factors like driver working hours and wages, sales territories, vehicle attributes and equipment (refrigeration, lifts, capacity, etc.), and specified delivery time. 

When you combine all of these data points, it ends up being far too complicated to try and manage manually. This is why you need an algorithm to do the computational mathematics required. 

Route optimization is often the difference between a successful, profitable delivery operation and a business that’s always scrambling to keep up with its orders.

What Are 5 Major Benefits of Optimizing Transportation Route Scheduling?

The truth is that there are far more than a handful of benefits when it comes to optimizing your routes. We’ve identified at least five major benefits that almost every delivery business can enjoy by implementing route optimization. 

Increased output

Optimizing your routes can unlock all kinds of efficiencies, one big one being that you’ll likely be able to make more stops. Because utilizing a route optimization tool means being able to account for not just the shortest distance traveled but also anticipated stop duration, left-hand turns crossing oncoming traffic, one-way streets, and other route particulars that can cost your drivers time. Managing all of these factors means eliminating time sucks and freeing up your drivers to make more stops on their routes. 

Decreased expenses

The obvious expense that you can save on by introducing route optimization is fuel, but that’s just the tip of the iceberg. By decreasing the mileage your drivers are covering on any given day, you can limit wear and tear on your vehicles and lessen maintenance costs. 

You can also balance workloads among your drivers to give longer routes to less expensive workers e.g. employees vs. contractors. Finally, with more direct, efficient routes, your workers could spend less time on the clock driving, potentially saving you hours of compensation expenses.

Better customer experience

If your routes are more efficient, your drivers are more likely to make their deliveries on time or even ahead of schedule. Good route optimization software also usually offers real time tracking so you can give your customers up-to-the-minute delivery ETAs and status updates. Other features typically include proof of delivery and the ability to automatically request customer feedback too. All of that adds up to more satisfied customers and more business.

Higher profits

When you combine increased output, decreased expenses, and a better customer experience, it all adds up to more profit hitting the bottom line. It may sound too good to be true, but the fact of the matter is that unlocking efficiencies in almost any business will lead to higher profits, and delivery businesses are no different. 

Fewer headaches

This might seem like a throw-in, but if you’re a fleet operator or business owner you know all too well the stress that can come from inefficient route planning. Imagine going from a manual, time-intensive scheduling process to automated software that handles all of the hard work for you and makes the scheduling process ten times easier. If that’s not a clear benefit, what is?

How Do You Optimize a Delivery Route Plan?

You can optimize a delivery route plan the old-fashioned way (manually) or using specialized route planning software. The manual approach is time intensive and far from perfect. There are simply too many data points to consider and it will be challenging to match a rules-based software system built to manage logistics route optimization using machine learning.

Software is the way to go when it comes to planning a delivery route. Not only can you input thousands of orders at once and automatically have your routes built, but you can have them assigned to your drivers while simultaneously accounting for all of the critical variables. Plus, route planning software offers comprehensive analytics so you can make smart adjustments to your routes at any time using hard data.

What type of data is needed to optimize the routing of deliveries?

There’s a basic assortment of data required to optimize the routing of deliveries effectively. Once you have this data, you can start optimizing your routes: 

• Order data: The most basic data required are addresses for each of your orders, but it’s also useful to have order particulars like time window requirements, customer requirements, etc. The more you know about each stop, the better prepared you can be as you plan and optimize your delivery routes.
• Driver data: How many drivers, what’s their availability, do they have any special skills or certifications, where are they located geographically, what’s their compensation level, how long are their break times, etc. Having that data in mind will inform how you allocate routes to each driver.
• Vehicle data: Some vehicles have larger storage capacity or special equipment built in like hydraulic lifts or refrigeration. These vehicle capabilities are crucial factors to consider as you build and optimize your routes with efficiency in mind. 
• Real time data: Knowing your orders, drivers, and vehicles backward and forwards is great, but it still won’t stop unanticipated issues from arising. That’s why you want to use software that incorporates live tracking and gives you the ability to make changes on the fly and instantly send the changes to your drivers via an app.  

Of course, there are many other variables that will be useful to know as you try to build the most efficient routes possible, but this is the foundational data that you’ll need to get started. The more data you accumulate in your route optimization software, the better analytical insights you’ll have access to, and the more improvements you’ll be able to make to your routes. 

Is there an app to plan delivery routes?

There’s no shortage of apps available to plan delivery routes. If you’re looking to optimize delivery route free of any cost, then your first instinct might be to turn to the delivery route planner Google Maps offers or MapQuest. The problem is, these aren’t really route planning tools as much as they’re mapping apps. 

Many of the features and capabilities we’ve discussed simply aren’t available in these free apps. So, while you might be able to use them for a time if you run a small operation and don’t need much besides mapping, they’re not ideal solutions long-term. 

For example, free apps typically lack the ability to bulk import large numbers of orders at any time or plan the most efficient paths for routes with multiple stops, as opposed to a trip from point A to point B. They also lack real time tracking capabilities, time window optimization, and driver management features. 

Specialized software is built on comprehensive route optimization code using Python or Java, and they’re designed to handle specific use cases that delivery businesses encounter every day. Plus, professional solutions have much higher stop limits unlike apps like Google Maps (ten-stop limit) and MapQuest (26 stops). 

How Much Does Route Optimization Cost?

The cost of route optimization tools can vary significantly based on the software and the plan you choose. 

Generally speaking, you can leverage route optimization software for as little as $39 per month or you can spend $500 per month (or more), so you can see that there’s quite a range.

The pricing typically hinges on how many drivers you want to include on the plan, how many stops you need on your routes, the features you need, etc. Based on these factors, you could end up paying less than $50 per month, a few hundred dollars per month, or thousands of dollars per month if you run a large operation. 

The bottom line is that the operational benefits of implementing route optimization software far outweigh the cost of the software itself. For example, here’s what an OptimoRoute customer was able to accomplish using our route optimization software:

• Saved over $3000 monthly by cutting delivery costs, miles traveled, and repeat orders
• Reduced delivery scheduling efforts from days to just a few hours
• Increased the number of deliveries by 25% with two fewer drivers

Those sorts of benefits are transformational whether you run a small business or a large one. When you look at the price of software from that perspective, you can see that it’s a drop in the bucket compared to the overall impact that route optimization can have on a business. Paying a smaller fee now for what will ultimately reward you in the long run is clever business thinking—think of it as an investment. 

If you’re still on the fence and want to learn more before making a decision, check out this route optimization breakdown for even more information as to why it’s worth implementing.