How Transportation Route Optimization Unlocks Fleet Efficiency

What is route optimization in transportation?

Transportation route optimization is exactly what it sounds like — the process of finding the most cost-effective routes for vehicle fleets. 

The most cost-efficient route is not necessarily the shortest. Other variables are also important, including:

• Traffic congestion: A longer but less congested route may be more efficient and economical.
• Vehicle capacity and driver schedules: Optimal routes make the most cost-effective use of vehicle capacity and driver time.
• Customer expectations: If a customer wants their delivery within a certain time slot, an optimal route needs to accommodate that.  
• Road infrastructure: Bridges, tunnels, one-way streets, and turns across traffic can all slow things down. 

Needless to say, route optimization is complex. But finding the most efficient route plays a crucial role in streamlining supply chains and making sure shipments arrive on time.

Route optimization is often associated with last-mile delivery services, but trucking fleets around the world rely on optimization to ensure drivers are taking the most cost-efficient and practical route to their destination.

Why route optimization matters

The transportation industry is the backbone of the global economy. Every factory, every power station, and every store relies on the trucking industry to get shipments to their destinations so that operations stay up and running.

That means route optimization is not just important — it’s crucial. When done properly, it helps move goods more efficiently and cost-effectively. 

The key words here are “done properly.”

By nature, route optimization is difficult, and bad optimization can have significant consequences.

Take, for example, the route planning fiasco in the Jefferson County public school district in Louisville, KY. Public school officials spent $265,000 on route planning and optimization, but things went awry, and children wound up on the wrong buses in the wrong locations.

Fortunately, route optimization doesn’t normally lead to this kind of result, and there were other factors at play aside from the route designing itself.

Done right, route optimization saves fleets time and money.

💡 Experience the benefits of route optimization for yourself. Routific is free to try for 7 days — no credit card or phone number needed!

What is an example of route optimization?

At Routific, we specialize in helping delivery service providers optimize their routes using intelligent algorithms. While last-mile differs from transportation, the optimization process can look very similar.

Our customers have seen some great results.

Routific customer Tyltgo, a last-mile courier company, used our route optimization API to optimize their delivery process. What were their results?

• 20-30% improvement in route efficiency
• 5% improvement in gross margins
• Cost savings of $3,000 per month

Beyond the raw figures, our route optimization API helped improve driver satisfaction.

Before, overlapping and zig-zagged routes were sending drivers all over the place — to the point where they hated their routes.

Routific eliminated the spaghetti routes and created clusters that help drivers stay happy and efficient while saving the delivery business money.

Tyltgo’s story is just one use case example of how route optimization can help fleets improve efficiency and cost savings.

What are some benefits of route optimization?

The main benefits of route optimization are:

1. Improved productivity

When routes need to change at the last minute, manually adjusting or dispatching them can be a challenge. With route optimization software, planners can adjust routes easily without interrupting operations.  

Fleet managers can also spend less time mapping out routes and more time on more important tasks — like daily operations or improving growth.

2. Lower transportation and operational costs

Route optimization can help reduce fuel consumption and operational costs. Optimization takes into account things like road conditions, traffic patterns, and stops to find the most cost-effective and efficient route. As a result, fleets save on fuel and reduce unnecessary mileage.

Streamlining your transportation routes can also lower operational costs by reducing vehicle wear and tear, maintenance costs, and labor costs.

When routes are optimized, drivers use their time more efficiently, reducing labor costs in the process.

3. More accurate delivery ETAs and on-time deliveries

Intelligent route optimization takes typical traffic conditions, driving times and stop times into account to produce more accurate ETAs. When delivery times are estimated accurately, the on-time delivery rate goes up. That translates into less wasted time, and higher customer satisfaction. 

4. Data-driven insights

Route optimization provides data-driven insights that fleet operators can use to improve productivity and efficiency. Performance metrics offer key stakeholders the opportunity to monitor:

• Resources
• Delivery times
• Driver performance

5. Better working conditions for drivers 

Truck drivers often spend 60 - 70 hours a week behind the wheel, hauling freight to suppliers or warehouses as an integral part of the supply chain. Route optimization empowers truckers to deliver loads faster, spend less time on the road, and improve working conditions.

6. Less pollution and lower emissions

Less time on the road means less of all the bad stuff that’s an unfortunate side-effect of moving stuff around the world. Less fuel burned, less carbon dioxide emitted, and fewer tire particles polluting our lungs and water systems. That’s a win all around.  

How do you optimize a route plan?

Optimizing routes is a time-consuming, precise task requiring smart planning and a wealth of data points. Yet our survey found that 72% of the 11,246 businesses we talked to didn’t use route optimization software.

Manual route planning is possible when your routes don’t change much from day to day and your operations are small, but is it as accurate as advanced, real-time algorithms?

No.

You can map out the distance from one stop to the next and account for mileage between each segment. If you know the area well, you may even choose back streets that are less congested but have lower speed limits because you know that you’ll reach your destination faster.

But truly efficient route planning must consider:

• Delivery objectives
• Existing delivery data
• Average vehicle type
• Standard traffic conditions
• Speed limit 
• Distance between stops
• Overlapping routes
• Delivery constraints

That’s a lot of data for a human to handle! And if a routing problem arises or a driver schedule changes, you’ll need to adjust multiple stops and rapidly calculate a new route. 

All in all, manual route planning just doesn’t have the scalability that a growing business needs.

Dynamic route optimization helps keep travel time to a minimum and provides immediate cost savings. Algorithms can systematically update delivery time windows, traffic congestion, and the best route based on dozens of factors.

How do delivery companies optimize routes?

Delivery companies focus on profitability and operational costs. On-time deliveries require a cost-effective route optimization solution that takes less time than manual options. Fleets can automate much of the planning process.

For example, Spring Hope Food Drive used to spend four hours optimizing delivery routes. Switching to Routific’s route planning software:

• Reduced mileage by 37%
• Used eight fewer vehicles
• Cut down planning time to three minutes

Delivery operations and fleet management must automate the planning process at some point because manual route planning is simply not as efficient. As the number of stops increases, the more challenging it becomes to optimize routes.

Automation helps reduce transportation costs, reduces emissions, improves delivery windows, and adds to your bottom line.

Can Google Maps do route optimization?

Google Maps is convenient. Open up the app on your phone, plug in an address, and Google handles the logistics for you. The app will even re-route based on traffic conditions. For one, two, or even three stops, you can certainly use Maps.

However, as you can see from a recent article on Google Maps route planner for deliveries, you’ll be limited to:

• Adding one stop at a time
• Just 10 total stops per route

The lack of route optimization is the primary concern. Google Maps doesn’t offer route optimization for multiple destinations, so you’ll never be given the most efficient route. Truckers delivering freight across the country will have multiple stops planned, such as going to weigh stations, truck stops, and more.

💡If you don’t need to optimize more than 10 stops, try Routific’s free Chrome extension for Google Maps. It will transform your Google Maps experience!

For fleet owners who have outgrown manual optimization techniques and want a way to improve the number of loads they haul without increasing their fleet, route planning software is the next step. 

How do you optimize a route to minimize the number of miles?

Optimizing a route to minimize total mileage is best done with software that:

• Runs advanced routing algorithms to detect routes with the lowest mileage
• Utilizes historical data points to understand average route times, mileage, and delays

Traffic analysis and conditions may be considered to keep rigs from idling and to reduce fuel costs. Vehicle routing goes much deeper than total mileage because traffic, speed limits, grade, and vehicle type are considered.  

Transportation, last-mile delivery — what’s the difference? 

Transportation is a broad term, but typically, it refers to the trucking fleets that move shipments from one transportation hub or destination to another.

Last-mile delivery, on the other hand, refers to the last leg of the delivery process. When UPS or a local courier delivers a package to your doorstep, this is considered last-mile delivery. 

Let’s look at an example:

• You order an item online. That item makes its way onto a truck and is transported across the country.
• Your item arrives at a local distribution facility and is loaded onto a UPS truck to handle the last-mile delivery process.
• UPS delivers the package to your doorstep.

Both components go hand-in-hand and work together to complete the shipping and delivery process.

And these components also rely on route optimization to ensure that the entire process goes as smoothly and seamlessly as possible while saving on costs.