FedEx Ground Operator Takes 5 Trucks Off The Road

Vikram Sekhon is a former electrical engineer who spent more than a decade designing semiconductor process equipment in Silicon Valley. While Vikram doesn’t have a background in logistics, he’s a formally trained engineer who loves to solve complicated problems.

So in 2018, he decided to become a FedEx Ground contractor.

FedEx Ground specializes in shipping packages for both businesses and residential customers. Its fleet is comprised of independent contractors – like Vikram – who are responsible for buying their own FedEx trucks and equipment, as well as hiring, paying, and training their own employees.

FedEx Ground Business Challenges

Vikram’s FedEx Ground fleet is made up of 20 vehicles that visit as many as 2500 unique addresses every day in California’s Central Valley.

“When I took over the company, I started noticing how inefficient some of the pick up and deliveries were being routed.” he said. Vikram collected scanner GPS data which gave him the coordinates so he could plot a day’s worth of routes on a map.

“It looked like a Christmas tree,” he said.

“I knew there was a problem, but I didn’t know it was so bad. When I zoomed in, I saw that I had three different drivers delivering on the same street at one point.”

Another challenge was poor resource planning. “My biggest cost is payroll and it was clear I was way over capacity. My guys start at 8 a.m. and they’re finished by noon, but I still pay them for a 12-hour shift.” Running extra trucks also adds considerable costs related to fuel, maintenance and insurance.

FedEx Route Optimization with Routific

Vikram turned to Google and searched for delivery management software that specialized in route optimization. He found Routific.

“I took those coordinates and I uploaded them to Routific. The software drew a very, very nice delivery zone work area for me,” he said. “I showed it to other contractors and showed it to FedEx and they were really surprised.

“Routific is telling me I can service the same number of stops more efficiently with just 15 trucks with enough buffer to absorb additional volume spikes . I’m using Routific’s algorithms to help define my boundaries better. I’m running simulations for modeling and re-modeling my routes so I can make my operation as efficient as possible,” Vikram said. On an annual basis, this reduced their total operating costs by 17%, which significantly increased the profitability of his business.

Within three months, as Vikram told his neighboring colleagues about Routific, eight other ISPs adopted the solution, with a total of 200 FedEx trucks being optimized by Routific.