Route Optimization Software: Simplified Definition

Route optimization software optimizes planned routes in near real-time to enable drivers to spend less time driving, prevent backtracking, save money on fuel, and improve customer service.

All of this is done while ensuring delivery time and speed align with the company's customer experience and financial goals. Creating routes with pen and paper, maps, whiteboards, and spreadsheets is time-consuming, complicated, and inefficient.

However, with the help of Route Optimization Software, most of the route planning work can now be automated and executed more precisely. Route optimization software helps dispatchers and drivers establish optimal routes, manage daily operations, and propose new fleet management methods based on the company's requirements and goals.

Route Optimization Software: Technical Definition

ClickPost defines Route optimization software as the software that accepts customer orders and automates vehicle scheduling and optimization activities for any fleet size, taking into account available resources, road networks, and operational constraints to determine the best route and delivery sequences that meet the company's financial and customer service objectives.

Business rules specific to the company, fleet variables, vehicle size, cost and product suitability, driver skills, road network restrictions, customer time window requirements, and delivered goods restrictions are crucial variables that can be represented as part of the route optimization process.

What is route optimization?

Route optimization is known as planning and improving routes for greater efficiency and cost-effectiveness. Route optimization aims to reduce mileage, fuel usage, and driving hours while assuring rapid delivery to get the most value out of your fleet of vehicles.

It's not just about determining the quickest route from point A to point B; it's also about choosing the most efficient route for various parameters such as driver schedules, available hours, full stops, traffic congestion, fulfillment estimates, and legal requirements.

Why is route optimization software essential for ecommerce companies?

• Driver salary and fuel costs account for 59.8% of total operating costs per mile in various sectors.

• For fleet dispatchers, route optimization gives a high return on investment.

• Route optimization reduces fleet miles and helps to avoid late arrivals.

• Some software also provides updates and notifications for dispatchers, customers, and other parties, ensuring clear communication and real-time ETAs for all parties involved.

• Improves client relationships while also adding value to your clients.

• Furthermore, optimized routes save money on fuel, which is good for both company's finances and the environment.

How Can Route Optimization Software Benefit Your Ecommerce Business?

Route optimization is critical for delivery businesses due to the following reasons:

• Savings in fuel, mileage, and other associated costs: Software suggests fuel-efficient routes and reduces the number of miles driven and overall driver time on the road, allowing fleet insurance premiums and liability costs to be reduced.

• Route optimization and enhanced fleet utilization algorithms to manage complex route planning and assist fleet managers in considering variables such as rush hour traffic to avoid unexpected delays. 

• Optimize vehicle numbers in the fleet: Fleet managers can strategically decide to use fewer vehicles to complete the same amount of work using automated planning, real-time route adjustment, and live tracking.

• Improves delivery productivity and customer satisfaction by evaluating more delivery permutations than possible for a human.

What are the typical features of route optimization software?

There are numerous platforms available, each with its pros and cons. These six fundamental features must be included in a great  Route Optimization Software:

• Efficient dispatching- Drivers receive updates and alerts about routes on their mobile, allowing them to access and change route plans in real time.

• Driver Management provides a central dashboard allowing businesses to watch driver behavior and receive data on driving habits.

• Optimization of routes to find the most cost-effective and fuel-efficient ways.

• Drag-and-drop scheduling interface to quickly schedule work orders, optimize routes, and dispatch the right field crew.

• Track a driver's location and behavior in real time.

• Performance metrics to track each route's contribution to overall performance over time.

How to Choose the Best Route Optimization Software?

Keep these core fundamentals in mind while choosing the best  Route Optimization Software for your business -

• Integration with dispatching and scheduling software to accommodate more calls/work orders in orders in one day and keep your customers on schedule.

• Accommodating multiple routes for multiple vehicles enables fleet managers to carefully plan out the shortest path to save time while rerouting the previously scheduled course to complete delivery.

• Fast processing of optimized routes in real-time to smoothen pick-ups, deliveries, and service calls.

• Accepts universal formats for import & export of data for quick analysis and performance monitoring.

• Uses up-to-date data mapping to save the time and hassle of updating things.

• Geofencing to precisely locate the approximate latitude and longitude for coordinate mapping.

• Analytics and report management help in detailed scrutiny of how the deliveries have been over time in the past.

What are the primary routing strategies used by route optimization software?

No matter the fleet’s approach, each routing strategy addresses the traveling salesman challenge at its core. Most route optimization software supports three primary routing strategies.

1) fixed Routing

The fixed routing strategy considers a fixed route from point A to point B as the best route for delivery. While this strategy is less complex and very easy to implement, it has limitations regarding optimization capabilities.

A fixed route from point A to point B means that it cannot take real-time factors into consideration. It also puts limitations on the scale of optimization the software can provide.

2) Random Routing

Random Routing is a simple and robust routing technique that uses a randomization formula to optimize your delivery route. A randomization formula to choose an outgoing link at random, excluding the incoming link.

The routing technique uses the probability of fixed link costs apart from data rates. It is unlikely that the route is chosen least-cost or minimum hop route. 

3) Adaptive Routing

Adaptive Routing is the best technological solution for Route Optimization software. The Adaptive Routing technique uses real-time factors, including incoming delivery requests, traffic and other factors that can affect the delivery time.

Since the routing technique considers real-time parameters, it is more accurate. However, it can cost a lot more as compared to other routing options and can slow the system down if your delivery route does not need much optimization, or the delivery environment is overly dynamic.

FAQs

1) Can Google Maps optimize my route?

The Google Maps software serves as a multi-stop route planner, not a route optimizer. Google Maps is a "web mapping service," in particular. You can use Google Maps to optimize routes if you have one or two deliveries.

Still, beyond that, Google Maps is a poor route optimization tool because you'd have to manually enter each conceivable variant of stops to check which one is the shortest.

2) How much does route optimization software cost?

Most route optimization software in the market is priced "per user, per month" in different pricing categories based on their initial price.

The cost ranges from $5 to $45+. Additional features such as live tracking, in-vehicle GPS, and driver analytics may be included in a higher-priced enterprise or premium product.