Transporting goods is becoming increasingly expensive due to rising fuel prices, supply chain volatility and labour shortages. For companies in the transport and logistics industry, maintaining profitability without compromising service levels is a growing challenge. However, one of the most effective solutions to address this is route optimisation technology.

Route optimisation software is a game-changer for businesses striving to improve efficiency and reduce costs. By automating the creation of optimised delivery routes, this technology allows businesses to save time, reduce fuel consumption and enhance customer satisfaction. Moreover, as sustainability becomes more important, route optimisation plays a crucial role in reducing environmental impact. For companies committed to both profitability and sustainability, route optimisation is an essential tool.

Whether you’re considering implementing route optimisation for the first time or are looking to maximise its potential, this article will explore how it can help reduce costs, improve efficiency and contribute to a greener future.

What is Route Optimisation?

Route optimisation refers to the process of determining the most efficient paths for vehicles when delivering goods, taking into account factors such as time, distance and cost. The primary goal is to streamline operations, reduce expenses and ensure timely deliveries. However, route optimisation can be complex, often requiring additional considerations like vehicle profiles, delivery time windows, product types and driver preferences.

To navigate this complexity, businesses often rely on route optimisation software, which uses advanced algorithms and mapping data to find the best combinations of pickups and deliveries. By considering real-time factors such as traffic, road conditions, and distance, route optimisation software helps businesses save time, reduce costs and improve overall efficiency.

How Does Route Optimisation Work?

The process begins by gathering accurate data related to orders, vehicles and drivers. This data can be manually entered into the software or automatically imported from a Transportation Management System (TMS) or Enterprise Resource Planning (ERP) system via an API integration. Once the data is in place, the next step is configuring the optimisation settings. These settings can be adjusted based on fluctuating demands, seasonality, or other business-specific factors.

Once the settings are fine-tuned, the route optimisation software takes over, generating an optimised plan. The planner can then review and compare different options before finalising the route. Once the plan is approved, it can be seamlessly exported to drivers’ mobile devices or onboard computers for execution.

Route Optimisation and Sustainability

In addition to improving operational efficiency, route optimisation software contributes significantly to sustainability efforts. As businesses look for ways to reduce their environmental impact, many are adopting green practices like using alternative fuels, establishing strategic hub locations and collaborating across the supply chain. Route optimisation plays a key role in these efforts by reducing fuel consumption, lowering emissions and ensuring that fleets operate in the most environmentally friendly way possible. Here’s how:

1. Optimal Load Factor: Route optimisation increases vehicle load efficiency, reducing the number of trips needed and thereby cutting down on fuel usage and emissions. By combining deliveries and collections, it maximises vehicle capacity, optimising every journey.

2. Reduced Time in Traffic: Real-time and historical traffic data helps route optimisation software avoid congested areas, minimising time spent in traffic and reducing fuel wastage and CO₂ emissions.

3. Fewer Kilometers Driven: The software’s advanced algorithms plan the most efficient routes, cutting down on the total kilometers driven, which in turn reduces emissions.

4. Flexibility for Future Needs: As regulations around emissions become stricter, route optimisation helps businesses adapt, especially when transitioning to electric vehicles or planning for low-emission zones.

Who Can Benefit from Route Optimisation Software?

Route optimisation software benefits any business that relies on transportation for deliveries. From parcel services to laundry services, maintenance teams to food delivery companies, this technology ensures that businesses can manage multiple routes efficiently.

Industries such as food delivery, e-commerce, retail, waste collection and pharmaceuticals have all seen significant improvements from route optimisation. The right software depends on the complexity and size of your operations, as well as your specific industry needs.

What you stand to gain from Route Optimisation

While manual route planning can deliver some advantages, route optimisation software leverages powerful algorithms and real-time data to take these benefits to the next level. 

1. Lower Transport Costs

Route optimisation helps reduce costs by creating more efficient routes. This means fewer miles driven, lower fuel expenses and reduced vehicle and driver requirements. With route optimisation software, the algorithm calculates the most cost-effective route, often delivering savings between 5% to 17%.

2. Better Resource Management

Efficient routes mean fewer vehicles are needed, which is crucial when drivers are in short supply. Route optimisation software ensures optimal use of resources, whether it’s reducing idle time or extending the life cycle of vehicles through balanced workload distribution.

3. Improved Customer Satisfaction

Faster deliveries and fewer delays lead to happier customers. By factoring in real-time data and delivery windows, route optimisation software makes it easier to meet customer expectations. It also simplifies returns, enhancing the overall customer experience.

4. Increased Flexibility

Route optimisation allows companies to adapt quickly to last-minute changes or disruptions, such as traffic jams. Software that processes real-time traffic data ensures that plans are updated in the moment, reducing delays and providing customers with more flexibility for their orders.

5. Elimination of Manual Processes

Route optimisation software automates route planning, saving time and reducing the risk of human error. This frees up staff to focus on higher-value strategic tasks and speeds up the overall planning process.

6. Support for Sustainability Goals

Fewer miles and vehicles on the road mean a direct reduction in CO₂ emissions. For companies with electric fleets, optimisation software ensures the most efficient routes are used, increasing mileage per charge and factoring in charging points along the way.

7. Regulatory Compliance

As environmental regulations tighten, especially in Europe, route optimisation software helps businesses comply with low-emission zones by routing vehicles based on their emissions labels. It also assists in cross-border planning, accounting for various rules and restrictions like cabotage, which is increasingly important with international shipping.

How to Choose the Right Route Optimisation Technology

Choosing the right route optimisation technology requires careful consideration of your business needs and goals. Key factors to keep in mind are:

• Return on Investment (ROI): The more you’re willing to invest in route optimisation technology, the closer you’ll get to an optimal solution. This can lead to faster deliveries, lower costs, and enhanced customer service, which supports both immediate profitability and long-term growth.
  
• Business Needs: Assess the complexity of your operations. If your business handles multiple stops and large fleets, investing in sophisticated route optimisation tools can provide significant savings. However, if you operate on a smaller scale, simpler, less expensive tools may suffice and prevent unnecessary costs.
  
• Integration with Existing Systems: It’s crucial that the route optimisation tool integrates seamlessly with your current transport tech stack. Effective data exchange between systems minimizes manual processes and maximises the efficiency of your operations.
  
• Environmental Impact: Route optimisation software isn’t just about cost savings, it also plays a significant role in reducing CO₂ emissions. By increasing load factors, minimising kilometers driven, and avoiding traffic jams, businesses can lower their environmental footprint while staying agile in response to external changes like new regulations.
  
• Overall Benefits: Beyond fuel and labour cost savings, route optimisation enhances operational efficiency and improves customer service. By reducing the risk of delivery delays and ensuring timely service, businesses can build stronger relationships with customers, ultimately supporting future growth and profitability.
  

At PTV Logistics, we understand the unique challenges businesses face, big or small. Our route optimisation solutions are developed to support you, helping you streamline operations and reduce costs while improving service quality and environmental impact. Whatever your business needs, we’re here to help you find the right solution that fits.

Explore how our route optimisation technology can transform your logistics operations at www.ptvlogistics.com