Gone are the days when logistics industry used to experience huge loss due to lack of infrastructure, unavailability of drivers, high transit time, the low turnaround of vehicles because of multiple checkpoints and excessive spend on fuel. Now the leading logistics companies are successfully planning their transportation routes and schedules to accommodate the growing level of short notice requirements of customers, the issue of unavailability of vehicles and the rising cost of fuel. Thanks to route optimization, it has become possible.
But what significance does route optimization exactly hold for the logistics industry?
Route optimization helps the drivers, as well as the companies, select the optimal route to deliver goods in order to ensure the lowest cost of transportation. It eases the issues that logistics companies usually face due to unavailability of enough vehicles or drivers while meeting customers’ short notice requirements. Moreover, route optimization in logistics takes into account the real-time events such as the condition of traffic, availability of equipment and personnel for loading/unloading etc. Be it any type of contingency that arises in the process of transportation, route optimization can quickly respond to it.
In short, route optimization helps in resolving various challenges that the transportation industry usually faces. Thus nowadays the logistics companies that offer user-friendly apps for streamlining their service have started adding route optimization as a feature for better benefits.
Let’s take a detailed look at the key challenges faced by the logistics industry and how the route optimization feature solves these.
Major Challenges Route Optimization Feature Can Solve
- High Demands
In today’s high tech world, with the rapid development of technology and ease of ordering products or availing services, B2C and B2B customers expect far more than they used to. Nowadays customers prefer everything to be delivered at their doorstep within just a few clicks. There are high consumer demands that logistics businesses are experiencing.
Despite the issues, route optimization can help you in:
– Proper Planning
– Opting from various available options
– Increasing the accuracy of pre-decided arrival time
– Delivering more in less time
- Diversity in Delivery Options
When an e-commerce business offers product delivery at a customer’s residential address, the common challenges it often faces are:
– Bulk orders
– High demand for fast order fulfillment
– Variety of home delivery options
Consumers expect fast and affordable shipments and even to have a choice between:
– Home delivery
– Workplace delivery
– The option of clicking and collecting the shipment from a designated place
Thus, for e-commerce businesses, home delivery is no longer a simple delivery method. With all the diversifications in delivery options, to meet customer demand, they need a comprehensive order fulfillment system that can deliver them the chance to spot exactly where every product is in the delivery process. Thanks to route optimization, now this is possible.
Route optimization for logistics industry ensures:
– Constant optimization and real-time reporting after the order placement to help you balance
– Affordable delivery options
– Improved customer assistance experience
– Visibility of the entire shipment process’ progress from dock to every customer’s doorstep
- Shortage of Delivery Agents
The number of delivery agents is less as compared to the increasing number of customer demand. This shortage has given rise to various issues such as:
– Late delivery
– An increase in work hour of the existing delivery personnel
– The decrease in the productivity of personnel
These problems can be solved using route optimization. It can help in various ways like:
– Showing planned routes and possible stoppages
– Giving proper meal breaks to the delivery person
– Limiting the work hour
In short, proper planning through route optimization helps the delivery personnel maximize the number of drops and complete more delivery than usual in less time, ensuring each trip as profitable as possible.
- Increased Expenses
The cost to meet the consumer expectations is also increasing with their increasing demands. Less amount of resources is resulting in high expenses to meet consumer expectations.
Route optimization helps in reducing these expenses with proper planning. It provides cost-effective options to reduce the expenses by best use of resources.
By solving all the above-mentioned challenges faced by logistics companies, route optimization takes the transportation business to the next level. It has a great impact on the time cost and branding expenditure involved with the logistics industry.
Let’s have a look at how route optimization benefits logistics business by boosting efficiency and managing cost.
Benefits of Route Optimization
- Effort Minimization
The logistics companies usually follow two types of route planning – manual and automated. Route optimization is such an automated route planning method that can help in finding accurate planning of shortest routes and reducing human efforts. It results in reducing the cost because there is no need to hire people and pay them to plan route manually.
- Awareness of Traffic Condition
In assistance with route optimization software, a logistics app can assess the local traffic conditions while optimizing the routes and keep the drivers and the vehicle owners updated about it. If there’s any sudden traffic congestion in a local area, it automatically makes the drivers aware of the fastest route to reach the destination.
- Accurate ETA Calculation
If there are any constraints hampering day-to-day operations, the ETA ( Expected Time of Arrival) calculation feature helps the logistic companies be informed and ahead of it. In a logistics app, having the route optimization feature, the owner can check the status of a particular delivery at any time. The real-time delivery status and the expected ETA can also be checked via voice-controlled planning and routing option in the app. If any unavoidable situation of delay or cancellation occurs, the ETA gets adjusted automatically in real time. And if the drivers want to meet any on-demand pick up request while driving, to make things easy for them, it auto allocates an accurate ETA while optimizing the routes.
- Improvement of Return on Investment
Route optimization benefits business by helping them attain a significant ROI. It helps companies gain a return on the amount invested for implementing this feature in their logistics apps within a short period of time. Route optimization method needs lesser resources as compared to traditional methods. This increases the profitability of the business.
How Route Optimization Helps Logistics Industry?
Route optimization accelerates and amplifies the return on investment of a logistics company as it moves from implementation to integration and eventually optimization. With this, the logistic managers can integrate all the metrics associated with a transportation process in one dashboard, to see how performance evolves in real time or as a record.
The key benefits that logistics companies get from route optimization are:
- Immediate access to all the carriers in real time
- Ability to customize service as per the demand of new customers, suppliers, and carriers
- Data streaming across the network, allowing users to have access to accurate and robust information
- Better management in lesser cost
Wrapping It Up,
Other than the product quality, quick and efficient delivery system makes any logistics company the preferred choice for the consumers. Thanks to route optimization feature, the companies can streamline their shipping process, making the best use of the resources while saving the money. This is considered as a highly regarded and sought after advanced feature that any logistics company can add to their respective applications. Through this, they can never fail to meet their customers’ expectations and sometimes even go beyond the expectations. So, are you ready to develop an intuitive trucking and logistics app solution, powered by innovative technology stack and having route optimization as an advanced feature? Do you want your app to help you improve and optimize your freight management operations with budget comfort? We, at Mobisoft Infotech, are here to meet your requirement and take your logistics business to the next level.
Nitin Lahoti is the Co-Founder and Director at Mobisoft Infotech. He has 12+ years of experience in Design, Business Development and Startups. His expertise is in Product Ideation, UX/UI design, Startup consulting and mentoring. He prefers business readings and loves traveling. Follow him @nitinlahoti