In the world of online shopping and instant gratification, businesses face increasing challenges. How do we get products to consumers faster? How do we keep up with the constantly shifting demands of vendors? How do we reduce fuel costs, lower liability, and avoid poor traffic conditions? Fleet route optimization may be your answer.
Fleet route management is a big challenge for most administrators, especially considering the high-volume of orders to fulfill at any given time. Optimizing these deliveries to save fuel, time, and money requires careful route optimization. Take a look at the five best strategies for truck route planning in the sections below.
What is Fleet Route Optimization?
Fleet route optimization is the systematic identification of the best truck routes for fleet enterprises. It's sometimes confused or blended with route planning or route scheduling, but these are separate processes that help reach separate business objectives. The goals of fleet route management include:
- Improved customer relations
- Increased amount of vehicles on the road
- Increased shipment capacity
- Reduced liability
- Reduced insurance costs
- Reduced maintenance costs
- Reduced fuel costs
- Reduced administration costs
Fleet route optimization is a science involving many moving parts, which is why it differs from simply routes from point A to B. It utilizes algorithms (often metaheuristic algorithms) to optimize solutions by identifying different routes across multiple destinations. This is often described as a Vehicle Routing Problem (VPR) and usually includes a set of restraints such as weather conditions and traffic delays. A route optimization algorithm considers such variables and finds the best way around them by calculating routes against all individual constraints or combined for multiple depots.
These solutions are often configured by route optimization software, but there are other additional route optimization strategies that we’ll cover in the sections below.
Core Routing Optimization Strategies
For most managers in need of a comprehensive solution, route optimization entails more than just identifying the best truck routes.. It should also leverage real-time traffic, historical data, road construction, and recent accidents. Without integrated technology, this poses a significant challenge, but here are three key strategies you can implement when optimizing a fleet route:
- Static Routing
- Dynamic Routing
- Real-time Dynamic Routing
Static routing involves planning based on geographic areas on an annual or semi-annual basis. The object is to forecast the best truck routes to frequented depots. It’s the most common optimization method used by fleets that deliver to the same locations on a recurring timeline. The biggest challenge with static routings, is that it relies on consistency. When drivers are able to follow the same routes every day with the same volume and stops, it might work fine, but the method lacks flexibility.
This is somewhat changing, due to GPS tracking. Most fleet companies have made the shift to GPS tracking and adapt to different routes as needed. Establishing static routes is a good basis for fleets with consistent delivery locations.
Dynamic routes are established on a daily basis, but this method may also implement forecasted and historical traffic patterns. Dynamic routing allows you to make changes all the way up to truck loading. If there are sudden anomalies within the route, you can make adjustments as needed. Unlike static route planning, you’re not locked into one predetermined route and may find out on the day of delivery that there is a better route that takes less time.
This route optimization method has many benefits for business. It may increase customer satisfaction, speed up delivery time, and reduce mileage. It may even enhance the utilization of your equipment due to reduced wear and idle time.
Real-Time Dynamic Routing
Real-time dynamic routing is similar to dynamic routing because both adapt to sudden changes. However, companies that employ real-time dynamic routing focus on consecutive daily orders. This usually applies to those that serve local areas, such as plumbers and tow trucks. As new orders come in throughout the day, they’re added to the route in a logistical order to reduce run-around time and speed up delivery.
This method involves the use of complex algorithms that run in the background of dispatch technology.
Routing Techniques and Business Goals
So far, we mentioned several strategies for fleet optimization that utilize algorithms and route management systems, but there are a few techniques you should keep in mind during truck route planning. The technique you choose largely depends on your goals as a fleet company. Below, you can select your technique based on common fleet business goals.
Reduce fuel consumption and cost
The shortest distance to your destination usually costs the least fuel consumption, but if there's an accident or disruption, traffic and idle time come into play. Any route planning should consider these factors.
Determine the right number of vehicles for the job
When you plug your route into software, it should determine if your data is optimal. In other words, if you determine a job will need ten trucks, the software may determine you only need seven.
Service windows pose a challenge for most fleet companies and creates a constant pressure. Configuring your route optimization software to focus on meeting those deadlines increases satisfaction. Route optimization algorithms adapt to your needs. If you need them to focus on one aspect of your business over the other, it is possible.
Adapting to changing delivery options
Customer expectations are constantly changing. Now, more than ever, customers have more options with delivery methods. As such, route optimization integration should adapt to these changing needs.
Choosing Routing Techniques
Every fleet has its own needs. The software and optimization techniques each employ for fleet route management differ. To determine your fleet company needs, consider:
- Operation size
- Service area
- Scheduling (changing or consistent)
- Delivery dispatch
- Type of company (freight or service)
Once you determine these factors, you can select from the above techniques. Understanding your needs helps you decide which direct route software suits your fleet. You may decide that you only need a GPS with route optimization integration. Or, you may need to employ multiple route management systems. Determine which strategies for route management and optimization are best for your fleet. Then, head to Azuga for your route solutions.