Route optimization software has become a critical part of fleet management operations for companies of all shapes and sizes. Learn why route optimization will be more critical than ever in 2022 and beyond.
What Is Route Optimization Software?
Route optimization is the practice of getting a vehicle from Point A to Point B in the most efficient manner possible, including all stops along the way. Route optimization software uses machine learning, artificial intelligence, algorithms, and telematics to accomplish this goal. Businesses that take advantage of route optimization software enjoy its benefits every single day. However, with the challenges that fleets face today, implementing technology solutions like route optimization software is more critical now than ever. This article will discuss route optimization and how it addresses fleet problems.
How Does Route Optimization Work?
Route optimization has been in practice for a long time, even before route optimization software became available. There are three different types of route optimization that fleets use to create their routes.
Types of Routing
- Static Routing: When using this method, planners only change routes on an annual or semi-annual basis. This is best for fleets with consistent delivery locations at similar times.
- Dynamic Routing: Planners change routes daily utilizing traffic patterns and historical data. This is better for businesses whose stops change every day.
- Real-Time Dynamic Routing: The route changes as new orders add new stops in a logistical order. This is the most popular method of route planning that we will discuss.
Route optimization software is necessary for real-time dynamic routing as it is the only way to update with new information in real-time. Next, we will go over the features of route optimization software.
Updates in Real-Time
In real-time dynamic routing, the software updates when a new order comes in or when a customer cancels an order. When the drivers need to change course in the middle of their trip, the software lets them know. The route can also change in real-time based on traffic data or construction situations that might arise. The software will automatically update its directions to get the driver to the next location. The software must update in real-time, or drivers will wind up stuck in traffic jams or miss crucial schedule changes.
Utilizes Historical Data
By taking data from customers’ and drivers’ past experiences, the software can create a more accurate plan for how long a route should take. Information regarding traffic at a particular time of day can be beneficial when planning for rush hour traffic or school zones. Customer data such as preferred time slots and availability can help determine when to schedule their service. Taking advantage of historical data is key to creating the best routes for the present.
Sharing Routes With Others
Not all route optimization software offers this feature, but it is a valuable option to keep in mind. The ability to share routes with others is crucial in maximizing efficiency. Drivers cannot be updating their managers and customers while they are driving. It is not only a waste of time, but it is highly unsafe and can result in an accident. The best route optimization software will update customers when the driver is near. Fleet managers can track their drivers using their fleet management software in real-time, reducing their need to contact the driver. Drivers need to focus on the road and getting the job done while the system manages communications.
Integrates with Fleet Management Software
As mentioned above, route optimization must connect with fleet management software to streamline the entire job process. This way, when orders come in, the system can automatically update the driver’s routes and help them reach the most customers in the least amount of time. The software can also gather customer information from fleet management software and use it to optimize routes as well.
Current Problems in the Fleet Industry
Before we can discuss why route optimization is necessary today, we need to outline the current problems in the fleet industry. Various problems have come up over the past couple of years that fleets struggle to address every day. We will outline these problems and discuss how route optimization can help solve them.
Rising Fuel Costs
Fuel is one of the most significant expenses for any fleet. It represents 60% of a fleet’s operating budget, which is a staggering figure compared to other fleet expenses. Therefore, fleets are always looking for ways to cut back on fuel costs. However, this is challenging because the entire business operates on fuel and cannot function without it. Managers working on cutting down on behaviors that waste fuel, such as speeding and idling. They’re also taking advantage of fuel cards that offer them discounts based on how much fuel they use. Looking for ways to cut back on fuel use is a major challenge for fleets these days and will continue to be for the coming years.
Rising Labor Costs
It costs more to hire anyone these days, and this is particularly true of truck drivers. The job is so taxing, there is a shortage in the workforce, and drivers are demanding higher compensation. Wages and benefits in the industry reached a five- year high in 2017 and have only been climbing since then. In fact, driver wages amount to a third of motor carrier expenses. It’s an immense chunk of a business’s operating budget, leading many to find ways to cut costs elsewhere, while still keeping their fleets safe and efficient.
Driver Shortages
The driver shortage has been a hot topic for discussion in the fleet industry for a few years, and it only continues to worsen. The major issue is that the average truck driver is nearing retirement age. Very few young people are pursuing a career in truck driving. The pandemic has only worsened matters, as people are less willing to enter the supply chain due to the high pressure currently placed upon it. Not only do businesses have trouble finding drivers, but they have trouble keeping them. If a driver starts the job and is not happy, it’s easy for them to find a job elsewhere, and it’s therefore hard for businesses to keep their drivers if they don’t run as smoothly and efficiently as their competitors.
Higher Customer Expectations
Customers have higher expectations than they ever have before regarding timeliness and communication with their delivery and service providers. It can be challenging for many businesses, especially smaller businesses, to meet these expectations without many resources at their disposal. Companies must find a way to meet these expectations or be left behind for competitors that do. Businesses should always look for ways to improve their operations, leaving less room for error and making it easier to get more jobs done faster.
How Does Route Optimization Software Address These Issues?
You might be surprised to find that route optimization software can address all of these issues. It’s a simple solution that requires hardly any effort on your part, but that makes an immense difference for your business and everyone working there. Route optimization optimizes everything from your spending to your operations. Without it, you may find that these challenges overwhelm you. We will break down the benefits of route optimization software and how it addresses these problems below.
Streamline Operations
Route optimization software goes a long way towards improving your business’s operations. It automatically pulls the day’s jobs from your fleet management software and creates a route that gets you to all of these destinations quickly and easily. In fact, with route optimization software, you can optimize the vehicles that you have to ensure you have just the right amount. If you have extra vehicles, you can take on more jobs and expand your business or sell them and recoup their costs. Route optimization software makes your day-to-day operations easier than ever.
Cut Costs
Cutting costs is more important now than ever when it comes to operating your fleet business. There are a few ways that you can cut costs with route optimization software. Firstly, this software saves you money on fuel. You’d be surprised how much fuel you can save with route optimization software. This is because the software gets you to your destination in the fastest manner possible, without wasting time idling in traffic or getting lost on the streets. Without route optimization software, you may be wasting money on fuel that you could otherwise use on other aspects of your fleet business.
Secondly, route optimization software cuts down on the wear and tear inflicted on your vehicle. When your drivers spend a lot of time idling, that wears down the engine and means you’ll have to replace your vehicle sooner. Your fleet should always be looking for ways to increase the lifespan of your vehicles, and route optimization is one way that you can do s
Improve Customer Service
When you have route optimization software, your business runs a lot more smoothly. If your business isn’t running smoothly, you’re sure to run into delays that cause problems for your customers. Customers expect timely delivery and constant communication so they can keep up with what’s going on. Route optimization software helps your drivers complete routes on time, ensuring that customers are always satisfied with delivery times. Furthermore, you can even set up automatic notifications to the customer when the driver is close by, so they can prepare anything they need to on their end to make the interaction move even more smoothly. These are critical features of route optimization software, especially considering the high demands of customers today.
Attract Drivers
With the driver shortage ongoing, it is critical to find ways to attract drivers to your business. There is lots of competition regarding where employees want to work, and you have to make your business as appealing as possible. Nobody wants to work somewhere that is disorganized and where deadlines are difficult to meet. They don’t want to regularly field complaints from frustrated customers or spend time figuring out how to get to their stops during the day. Route optimization ensures that drivers can get to their destinations on time and primarily deal with satisfied customers. It also makes day-to-day operations far easier, so drivers don’t have to worry about delays on their routes.
When a business’s operations are efficient, and its customers are satisfied, drivers are more likely to want to work at that business. Route optimization goes a long way towards ensuring that your business meets customer expectations and driver expectations.
Get Started with Route Optimization
If you’re looking to get started with route optimization software, Azuga is the way to go. Our route optimization software has all of the features mentioned in this article, and you can take advantage of all of these features with our fleet management software. See what you can do with our tools by trying out a free demo online!
