How To Optimize Delivery Routes: A Guide for Growing Businesses

Your delivery business is growing — congratulations! But with growth comes complexity. Maybe you started with one driver and a dozen stops. Now you may be juggling multiple vehicles, hundreds of deliveries, and increasing customer demands. That route plan you used to sketch out in 15 minutes now takes hours — and you have better things to do with your time. 

Sound familiar? You’re in the right place. Route optimization is a great way to make your last-mile delivery operations more efficient. 

If you want one thing you can do right now, for free, with just the tools you already have, try this: Group your delivery addresses by zip code or postal code before you do anything else. It’s easy to do with any spreadsheet, it instantly gives you rough delivery zones, and it might be all you need. Assigning the same zones to the same delivery drivers on every run means they get to know their roads, parking areas, and traffic patterns intimately — and that makes them more efficient. 

If that change won’t cut it and you need more, then route optimization software can help you cut hours off your planning time, reduce time and distance driven by 20-30%, save on driver overtime, and improve customer satisfaction. 

In this guide, you'll learn proven strategies for optimizing multi-stop delivery routes, whether you're planning 10 deliveries or 10,000. We'll cover everything from basic manual route planning to advanced route optimization strategies. We’ll add in real examples from businesses like yours who've been able to cut their operational costs and become more profitable.

What you'll learn:

• Step-by-step process for creating optimized routes.
• When and how to switch from manual route planning to algorithm-powered route optimization.
• Advanced strategies for managing time windows and driver assignments.
• How to measure and improve your delivery efficiency.

Let's start with what route optimization actually is, and why it matters for your bottom line.

Delivery route optimization basics

Route optimization is more than just finding the shortest path between multiple stops. It's about finding the most efficient routes for making all your deliveries, while also keeping your customers and your drivers happy, and meeting your business goals. 

Think of it as solving a giant puzzle. You need to figure out:

• Which driver should deliver to which customers.
• How to allocate routes fairly between drivers, taking into account their shift times.
• What order they should make their stops in. Are there any priority orders that need to happen first?
• How to handle specific delivery time windows. For example, delivery A must be before noon, while delivery B right next door can only be after 3pm.
• What to do when things don't go as planned — like when there’s no access to a building.

Common route planning mistakes

As your daily number of deliveries goes up, the challenge of creating a cost-effective delivery schedule gets more difficult. Without easy access to historical and real-time data, even experienced dispatchers can fall into these route planning traps:

• Planning routes by “feel” instead of data
• Not accounting for traffic patterns
• Trying to squeeze in too many deliveries per route
• Not building in buffer time for unexpected delays and bad traffic conditions
• Under-estimating the time needed to complete each delivery

Most of these problems are hard to solve without accurate data. The immediate results are inaccurate ETAs, leading to fewer on-time deliveries, higher costs and a poor customer experience. There are other costs to inefficient route planning as well:

• Unnecessary fuel consumption
• Driver overtime pay
• More vehicle wear and tear and increased fleet management costs
• Higher carbon emissions

The functionality in route planning software can solve most of these problems. But if you’re not ready to commit yet, you can still get some of the benefits of route optimization from improvements to your manual process. In the next section we’ll look at a process for manual route optimization, before moving on to look at the software options. 

Manual route optimization techniques

Manual route planning can work well when you're delivering to 20-30 stops per day. Here's a proven delivery management process that many successful small businesses use before they transition to route optimization software.

‍💡Use our free spreadsheet template to help you get started.

‍1. Start with time windows

One of the big advantages you have as a local small business is that you can offer your customers more flexibility than the corporate giants. For example: When I order something from Amazon, they tell me when they will deliver, and it’s my problem to make sure someone is home when the delivery happens. But when I order from a local Vancouver company like Flourist, they let me choose my delivery day.

Even if it doesn’t make sense in your business to let your customers choose their own time window, it’s still a great way to organize your delivery schedule.  You can organize your time windows daily or weekly. For example:

• A grocery store might have morning, midday and late afternoon delivery slots. If their volumes are high enough, that ensures a good number of deliveries per route while also avoiding the problem of having fresh produce sit in a van all day.
• A farm share might deliver to different towns or neighborhoods on different days. 

You know your own business best, so ask yourself: How can I bundle my deliveries by time?

Arrange your deliveries in a simple Excel spreadsheet with columns for address, time window, and any special instructions. Sort first by time window, then by area. This gives you a clear view of which deliveries need to happen when.

2. Create and refine delivery zones

You already know about grouping by zip code or postal code. Once you've done that initial grouping, look at your delivery clusters on a map. There are two ways to do this:

1. Add your stops one by one in Google Maps. There’s a limit of 10 stops per route if you do it this way.
2. Export your spreadsheet to a CSV file, then upload it to Google’s My Maps (check out our detailed instructions here.)

With all your stops plotted on a map, look for ways to group them into delivery zones. Natural boundaries like highways, rivers, or busy commercial districts often make good zone boundaries. Keep each zone as compact as possible.

Google’s My Maps has a great feature that lets you color code your stops. If you set a different color for each zone, you can easily get a quick visual impression of how your stops are distributed.

If you have regular customers, keeping the same zones for each delivery run is more efficient than trying to optimize each day from scratch. That way you get an evergreen base route plan, that you can adjust as needed. Some vendors call this “static route planning”, as opposed to the more dynamic route planning you need if you’re serving different customers every day.

3. Plan around traffic patterns

Every city has its traffic patterns, but some are common everywhere. For example:

• School zones get busy at pickup and drop-off times. 
• There’s more traffic congestion in downtown areas during morning and evening rush hours. 
• Neighborhoods are more likely to be congested on street cleaning or garbage collection days.

Keeping notes about these patterns can help your streamline your delivery planning:

• Schedule downtown deliveries outside of rush hours.
• Route around school zones during busy times.
• Plan apartment deliveries early, before parking fills up.

4. Keep good records

The key to improving your manual route planning is good record-keeping. Make notes about:

• Which routes consistently run longer than expected.
• Where drivers often hit delays.
• Total travel times for each route.
• Difficult delivery locations.
• Customer preferences and access instructions.

Use this information to refine your zones and timing. For example, if a particular area always takes longer than expected, you might need to make that zone smaller or allow more time per stop.

5. Managing same-day changes

One of the biggest challenges with manual route planning is handling last-minute orders or changes. Keep your zone map handy, with rough delivery times marked for each area. This makes it easier to spot opportunities to add stops without disrupting the whole schedule.

Some businesses keep a flexible driver in reserve for urgent deliveries, while others mark certain time slots as available for last-minute orders. Both approaches can work, but they need careful management to stay profitable.

6. Know when to make the switch

Manual route planning works well for many small delivery businesses — until it doesn't. When things get too complex, planning becomes time-consuming and prone to human error. Watch for these warning signs that it’s time to switch to a more powerful route planner:

• Route planning takes more than 30 minutes per driver per day.
• Drivers frequently complain about route problems.
• You’re getting more customer complaints about late and missed deliveries.
• You can't easily add last-minute orders.
• Your business is growing past 30-40 deliveries per day.

Here’s a real-life example: Walden Local supplies premium meat from family farms in the north eastern United States. As they grew beyond 30 deliveries per route, they found manual planning wasn't sustainable and switched to Routific. Since then they’ve doubled the number of drivers on staff and scaled to more than 100 deliveries per route in their densest areas, while maintaining their high standards for customer service.

Route optimization software solutions

If you're ready to move beyond manual planning, route optimization software can transform your delivery operations. But with dozens of options available, how do you choose the right one? Let's look at what matters most for growing delivery businesses.

Essential software functionality for delivery businesses

Not all route optimization tools are created equal. Here are the must-have features for any software aimed at local delivery businesses:

1. High quality route optimization 

Creating efficient delivery routes is about a lot more than just connecting the dots from Point A to B to C in a way that looks pretty. The best route is one that meets time window constraints, accommodates driver shift schedules, and makes sense to humans (at Routific we call this “driver acceptability”).

When you think about routes this way, it’s clear that some route optimization algorithms are a lot better than others. Machine learning and AI can help out by doing all the complex math at lightning speed, but they have no common sense. Just because a set of routes is mathematically optimal, that doesn’t mean they’re effective routes! 

When you’re testing out using software to plan delivery routes, look out for criss-crossing spaghetti routes that loop back on themselves. They’re likely to set your delivery team scratching their heads and laughing at how dumb software can be.  That’s not ideal when you’re trying to get people to accept a change to their workflow.

2. Easy dispatcher controls

Even with high-quality route optimization, you will often want to make changes to your routes based on local knowledge and experience. Good software should streamline your route management by making it easy to: 

• Upload orders in bulk from your e-commerce platform.
• Make changes to routes on a map or timeline.
• Send routes to drivers.
• Monitor drivers' progress in real time, ideally via the GPS tracking feature on their phones.
• Respond quickly when things go wrong.

3. A driver mobile app

 Any worthwhile route planning tool should come with a driver app that’s free to download in the App Store or Google Play Store. A driver app enables:

• Dispatching routes directly to your drivers’ phones. 
• Easy access to drivers’ favorite navigation apps like Google Maps, Apple Maps, or Waze to guide them between stops.
• Real-time route monitoring. 
• Capturing photo and signature proof of delivery directly on drivers’ phones.

The app should work offline too, since not every delivery area has perfect cell coverage.

4. Real-time customer notifications 

Your route optimization and delivery management software should automatically notify customers about things like:

• When their delivery is planned, and what the ETA is. 
• When the driver is approaching their location. 
• When a delivery is completed or missed. 

Transparent, automated real-time updates via email or SMS dramatically reduce the number of "where is my delivery?" calls you have to handle. It’s a great way to set and manage customer expectations. 

Advanced route optimization options

Depending on how complex your business and your delivery process is, you might also want to look for features like:

1. Vehicle types and capacities

If you have a diverse vehicle fleet, you’ll want to take the types and capacities of your vehicles into account during your route planning. For example:

• If you have refrigerated trucks, which routes or drivers should they be assigned to?
• If some vehicles can take a load of 20 units and others can take 50, you want to plan your routes according to vehicle capacity. 

2. Return trips and pickups

Some delivery businesses need to handle:

• Package returns or recycling pickups
• Empty container collection
• Equipment pickup from job sites
• Multi-leg journeys with pickups and deliveries

For example, meal kit companies often collect their cooler bags and ice packs from previous deliveries while making new deliveries. The software needs to account for both the space needed for new deliveries and the space that will be taken up by returns.

3. API access and integrations

As your business grows, you might want to:

• Connect your e-commerce platform or order management system directly to your route planner so you can import your orders automatically.
• Build custom reports and dashboards.
• Integrate with your warehouse management system.

Look for solutions that offer APIs so you can move your data where you need it, without fuss.

Top route optimization software apps for delivery businesses

For last mile delivery businesses, the best route optimization and delivery management software options are:

1. Routific

‍Best for: Small to medium-sized local delivery businesses with 2-50 vehicles.

• Simple, intuitive interface that's easy to learn, including a timeline view. 
• Handles time windows and driver schedules effectively.
• Free mobile app for drivers with proof of delivery.
• Customer notifications included in all paid plans.
• Pricing starts at free for up to 100 stops/month.

2. Circuit for Teams

‍Best for: Individual drivers and small teams needing basic route optimization.

• Simple, attractive user interface. 
• Simple route optimization.
• Basic proof of delivery.
• Limited customer notifications.
• Pricing starts at $100 per month.

3. Optimoroute

‍Best for: Field service businesses with complex scheduling needs, and on-demand couriers.

• Advanced scheduling features.
• Detailed driver profiles and skills matching.
• Real-time route modification.
• Limited delivery-specific features.
• Pricing starts at $35 per driver per month.

4. Onfleet

‍Best for: Enterprise delivery operations with custom needs.

• Powerful API and integration options.
• Advanced analytics.
• White-label options available.
• Steeper learning curve.
• Pricing starts at $599 per month. 

5. Route4Me

‍Best for: Sales teams and territory management.

• Territory planning features.
• Route optimization for sales routes.
• Complex interface.
• Pricing starts at $275/month.

How to calculate the ROI on route optimization software

We say route optimization will save you time and money, but how do you prove it?

Here’s how to roughly calculate the time and money you're spending on route planning and delivery inefficiencies right now. You’ll need these numbers:

• How many deliveries you make per month
• Your monthly driver wage bill
• Your average monthly fuel costs

Now plug those numbers into this calculator to see how much you can save every month:

We’ve assumed 20% savings from route optimization. Our studies show that customers usually save 20-30% when they automate their route planning, so this is a conservative estimate. But if you’d like to be even more cautious, you can change this number to 15% or even 10%.

You might also want to consider how many hours you spend each week in route planning — you will definitely spend a lot less time if you use route optimization software!

Finally, compare your savings each month to how much you’d spend on a monthly subscription to a route planning app. At Routific, for example, our pricing structure works like this:

• Up to 100 orders a month: FREE
• 101-1,000 orders a month: $150
• Above 1,000 orders a month, we charge a few cents per extra order. The more orders, the less you pay per order. 

Terra Firma Farm started with basic route planning but switched to Routific when they grew to 80+ deliveries per month. The switch helped them scale to 1,000 deliveries, while cutting fuel costs by 35%.

How to choose the right software

When evaluating route optimization software, consider:

1. Your business type and size 

A small local food delivery service has different needs than a large-scale logistics operation. Make sure the software is designed for businesses like yours.

2. Ease of use

 Your dispatchers and drivers need to actually use the software. Look for an interface that makes sense to your team.

3. Essential features 

Must-have features for local delivery businesses include:

• Route optimization that considers time windows
• A mobile app for drivers
• Customer notifications
• Proof of delivery
• Real-time tracking

4. Customer support

You'll need help getting started and solving problems. Look for:

• Live chat or phone support during your business hours
• Training resources and documentation
• Active customer success team
• Quick, appropriate responses

5. Price vs value 

The cheapest option isn't always the most cost-effective. Consider:

• Per-driver vs per-vehicle vs per-stop pricing.
• Contract length and minimum commitments.
• Extra costs for features like customer notifications.
• ROI based on your delivery volumes.

How to implement route optimization software in a delivery business

Here's a proven process for switching from manual to automated route planning:

1. Start with a trial

Most solutions offer a free trial period. Use it to test the software with a small subset of your deliveries. Keep records of how each app performs in the areas you care most about. 

💡Pro tip: If you run out of time on your trial, ask for an extension. Most companies will be happy to help — and it’s a good test of their customer service!

2. Run parallel systems

For the first few days, create routes both manually and with the software. Compare the results to build confidence in the system.

3. Start small

Don't try to implement every feature at once. Start with basic route optimization, then add features like customer notifications once your team is comfortable with the basics.

4. Train in phases

Start with your most tech-savvy drivers. Once they're comfortable, they can help train the rest of the team. Your drivers need to understand not just how to use the app, but why the optimized routes make sense. Take time to explain the benefits — less overtime, fewer miles driven, more predictable schedules.

5. Measure the results

Track key metrics before and after implementation. We suggest the following, but you may have others that are more relevant for your business:

• Time spent planning routes
• Deliveries per route
• On-time delivery rate
• Cost per delivery

Vancouver flower subscription service Bear's Blooms is a great example of a successful implementation. When they switched to automated route planning, they cut their route planning time from hours to minutes. More importantly, they were able to scale their flower delivery subscription service without adding office staff.