Is traffic congestion hurting your fleet’s bottom line? For many fleet owners, managers, and drivers, delays due to traffic have become routine. David Congdon, CEO of Old Dominion Freight Line (a shipping company), said in a statement that "unfortunately we've come to expect traffic congestion as a part of our daily lives.”
Congdon went on to say that analysis completed by the American Transportation Research Institute (ATRI) “illustrates what a significant productivity drain that congestion is on our industry and the economy at large.”
In this article, we will explain how traffic congestion is costing your fleet. We will also outline how to beat traffic congestion with route optimization software.
How Traffic Congestion is Costing Your Fleet
So how much does traffic congestion cost your fleet? More than you might think. According to the American Transportation Research Institute, “traffic congestion on the U.S. National Highway System added over $63.4 billion in operational costs to trucking in 2015.”
Traffic congestion is expensive. On average, congestion adds around $26,625 in additional per-unit operating costs (for fleet vehicles traveling 150,000 miles annually).
An ATRI study found that traffic congestion tends to be most severe in urban areas — 88 percent of congestion costs occur over only 17 percent of network mileage. Over 91 percent of total congestion costs are estimated to occur in metropolitan areas.
What is Route Optimization?
Route optimization involves determining the most cost-efficient route for your fleet vehicles to take. It’s a process that is more complex than merely finding the shortest path between two locations.
Route optimization has to include all relevant factors. It must consider the number and location of all designated stops on a route. Turns or intersections along the way are also a factor. Other factors may include left-hand turns where drivers must cross another line of traffic, the closest driver to an urgent job, or even traffic congestion for the time of day.
Route optimization software is required to crunch all the data and determine the best route for your drivers. The complexity involved in route optimization is immense. For example, with just one vehicle and ten stops, the number of unique possible ways to order the route is 3,628,800. And that doesn’t even count different roads that the driver could take from one stop to another. With more drivers and more destinations, the complexity increases exponentially. There is a good reason route optimization is best completed by computer algorithms.
Benefits of Route Optimization Software
Help Drivers Fight Congestion
Route optimization software can reduce costs associated with slow traffic and help drivers beat congestion altogether. This software can help fleet managers and drivers plan out routes that avoid traffic bottlenecks and shorten transportation times.
Not only that, but route optimization software helps fleet managers provide real-time assistance to drivers. When drivers find themselves in an unexpected traffic delay or congestion, the software can suggest alternative routes. Whether anticipated or a surprise, route optimization software helps fleets fight congestion.
Improve Customer Satisfaction
Route optimization software ensures that fleet drivers arrive at their destination on time. Being able to predict pickup and delivery times accurately is a huge benefit for any fleet. When companies have this ability, they can tighten service windows provided to customers, boost customer satisfaction, and increase on-time arrival rates.
Find the Most Cost-Effective Routes
Route optimization software can help fleets solve the “Traveling Salesman Problem.” The software uses advanced algorithms to find the best and most cost-effective routes for your fleet. It would be inconceivable to crunch by hand the volume of data route optimization software does almost instantaneously.
Lower Vehicle Mileage
One of the most significant benefits of route optimization software is that it creates routes based on vehicle and driver availability and considers scheduling constraints. It does all of this while minimizing the miles your drivers and vehicles travel.
Route optimization software helps reduce overall drive time on the road by intelligently assigning fleet resources. Fleets benefit from cost savings when their vehicles drive fewer miles.
Driving fewer miles reduces fuel costs. Fuel reduction is a considerable benefit as associated costs can make up over 30 percent of fleets’ overall expenses. Driving less also reduces vehicle maintenance costs and total cost of ownership via reducing wear-and-tear.
Spending less time on the road means your drivers are less likely to face traffic violations or accidents and their associated costs.
Lessen the Time Spent Planning Routes
Route optimization software beats manually designing routes hands-down. The latest route optimization software can decrease the amount of time fleet managers and drivers spend on route planning.
The software can determine the best routes for each of your destinations based on the cargo, vehicle, and time of day. It plans routes using real-time data and frees up fleet personnel to handle other critical jobs.
Decrease Fleet Vehicles in Rotation
Engaging in route optimization can cause fleet managers to reassess the number of vehicles they require to be productive. Using route optimization software, fleet managers can determine if they could perform at the same level using fewer vehicles.
When fleets can downsize to fewer vehicles, they pay for fewer drivers’ salaries and less maintenance and fuel costs. These costs can add up, and reducing the number of vehicles a fleet has can significantly reduce costs.
On the other hand, some fleets choose to keep these extra vehicles and drivers and instead use them to take on more work. For a fleet looking to scale its operations, route optimization can make it possible without adding vehicles and hiring new drivers.
Traffic congestion costs American fleets billions of dollars each year in lost productivity. Let the team at Azuga Fleet™ help improve your fleet’s productivity, safety, and save your company money year after year.