Trucking companies interested in route optimization all look for one thing: an efficient way to deliver goods appropriate for all parties. The question now is, how can individual motor carriers do this according to their business need? What is the right approach? Many modern trucking companies are using route optimization to get the most out of their hauls.
Is your trucking company utilizing route optimization to get the most out of your runs? If not, you may be missing out. But perhaps you don’t even know how to properly utilize route optimization. We want to take a closer look at the practice today. First, let’s look at what the process of route optimization actually is.
What is Route Optimization?
Route planning helps field service and trucking companies plan the best routes for their operators every day. Whether it be to offer more reliable ETAs or to improve customer satisfaction over multi-stop routes, optimization lets them do it. When routes are planned better, truck drivers spend less time driving, thus reducing fuel costs and increasing truck driver satisfaction.
Route optimization, put simply, is the process of determining the most cost-effective route for your truck drivers. Still, it isn’t a cake walk. It is far more complex than simply finding the shortest path between Point A and Point B. Fleet managers must factor in all the relevant factors, including the truck drivers, vehicles, and location of all required stops on the route. Finally, time windows for deliveries must be considered.
Other factors to think about include:
- Number of turns or intersections along the route.
- The number of left-hand turns.
- Crossing the line of traffic.
- Nearest truck driver to dispatch on the route.
- Best approach to a stop on the route.
Planning and optimization can quickly become overly complicated if you have certain restrictions and specifications in place, whether you have a lot of vehicles or not. For optimal route calculation, all relevant data must be considered, including truck and goods restrictions, individual vehicle types, as well as transportation and toll costs. And when you are en route, a professional truck navigation solution should make sure your truck drivers reach their destination quickly and safely.
Different Types of Optimization
Here’s the thing, there are different types of route optimization. It all depends on the type of trucking company you run. The two types you will likely run into include standard versus dynamic routing. There are questions you must ask to determine which type best suits your business. Are you running the same stops every day or week or is routing a complex mental workout?
Standard routing can be utilized when a vehicle visits the same customers in the same order all the time. Dynamic routing allows fleets to create a set of routes and stop sequences each day. This process is designed to drive fleetwide cost savings and create geographical routes.
Trucking companies across the country use standard optimization. By utilizing route planning, customer satisfaction is improved, and driver-to-consumer relationships are strengthened. Fleets benefit from offering delivery consistency. Pre-planned routes help ensure customers get their loads at reliably scheduled appointment times.
Dynamic routes are often preferred by trucking companies where transportation costs are high or customer needs change on a near real-time basis. These fleets need to be able to quickly adapt, and dynamic optimization allows them to do just that. Still, some companies require even greater route flexibility. What if, for instance, your trucking company operates both routine and complex deliveries?
That’s where cell routing comes in. While this is a lesser-known version of route optimization. Cell optimization refers to trucking companies grouping a series of service locations together. When you create a customer “cell,” you can ensure your truck drivers consistently serve certain customers while also taking advantage of dynamic routing for other stops to minimize delivery costs.
Planned versus Actual Routes
One of the main techniques used in route optimization is planned versus actual routes. Consider that even the best-laid plans don’t always pan out as you may intend for them to. This is why motor carriers utilize telematics to gather and sort information such as vehicle speed, time traveled, routes, pick up items, etc. All this information is then fed back into route optimization software.
For example, a planned route might use the posted speed limit to calculate travel time. But what if there is rush our traffic? Trucking companies must be able to route real-time information into their system to generate a more realistic plan for their truck drivers. Companies need to look at routes from a historical perspective.
It is equally important that fleet managers and route planners look at the trips of multiple vehicles in a given day. Are there any overlapping routes that can be eliminated or consolidated? By identifying and eliminating this overlap, you increase fleet efficiency and decrease overall fuel costs.
By organizing the data, fleet managers can uncover discrepancies. Comparing your planned versus your actual routes allows you to see any gaps in the process and set up any follow up plans accordingly. Anomalies happen. The question is, do you have a solution in place to account for them?
Match to Your Goals
Trucking companies must match their goals with their desires. While routing optimization can help trucking companies take the most efficient route, they can also help businesses achieve ancillary goals along the way. The key is to ask yourself – what is the goal?
If your goal is to reduce business costs, you should consider rout optimization. Taking the scenic route may be pretty and all, but it wastes time and extends fuel usage. By ensuring your vehicles take the most efficient route possible, you save both fuel and money.
You may also want to simply right-size your fleet. If you have 10 trucks making 100 stops and each stop takes 15 minutes, when you factor in other considerations, you may find you only need 7 trucks instead of 10. This will help you make sure your fleet is the right size for your routes.
You may be a direct-to-store trucking company. If so, you face challenges other trucking companies do not. Route optimization software can be used to help trucking companies meet delivery windows and increase customer satisfaction.
Should You Use Route Optimization Software?
The next question is whether your trucking company should invest in route optimization software. Modern optimization programs do help you find the shortest distance between two routes, but it also offers a lot more than just a simple suggestion of which roads to take. Advanced route optimization software helps fleet managers get driving directions, add multiple stops, improve efficiency, and ensure service-level agreements are adhered to.
But with all these considerations, what factors should fleet managers focus on when selecting route optimization software? Pay attention to the following:
- Real-Time Traffic: One study recently reported that traffic congestion costs the U.S. around $305 billion per year. This is an astounding number. Make sure you invest in optimization software that calculates ETA based on dynamic, real-time traffic data.
- Vehicle Order Problems: It is critical that your optimization software can consider order-vehicle constraints. Obviously, you cannot ship electronics with reefer goods. Special vehicle classes in real-world scenarios must be taken into consideration by your route planning software.
- Geocoding: It is hard to find a route optimization solution that does not include a geocoder. Still, there are times when addresses will be ambiguous, or the local context will be complex. You need a solution that includes a vast database of local addresses and apartment locations.
- Historical Data: There are three levels of optimization fleet managers need to pay attention to. You want to look at historical truck driver data, customer data, and time of day information. These insights will help your solution plan for prevailing conditions in certain places and at certain times.
- Operations Preferences: When it comes to implementing a route plan, you’ve got to ensure you do not get resistance from teams working on the ground. Your operating teams are used to doing things a certain way. Make sure the software you use takes considerations from your front-line force into account.
- Analytics and Reporting: Your route planning software should allow you to track and manage the entirety of your operation in real-time from a single platform. But it should also provide you with reporting and give you a bird’s eye view of every movement made in the fleet. You want comprehensive analytics delivered over a user-friendly interface.
With routing requirements being so complex in today’s trucking environment, route optimization software might be just what your business needs to create greater efficiency and add more to your bottom line.