Route Planning: What Is It and How It Improves Businesses?

advantages of route planning

Route planning is one of the strategies that streamlines deliveries. Find out more about this strategy and how it can improve your logistics operations.

For the past decade, e-commerce has taken the centre stage, changing how consumers shop. Expectations of a good delivery experience have never been higher and businesses are competing against one another, to provide the lowest cost option with the shortest delivery time. 

Now you are wondering, why is route planning important?

Businesses send orders to different destinations every day, from factories to distribution centres or from warehouses to end customers. As the volume of delivery orders increases, so does the complication of coordinating a multitude of variables in getting one order from point A to point B. 

To give you a more detailed explanation, we will comprehensively review what route planning is in this article. The more you understand how it works, the better you could improve your logistics operations.

What is route planning?

Route planning is a task to get a package from point A to point B. Maybe it seems simple as it only refers to driving from one place to another but there are several considerations which have to be taken into account to obtain an efficient delivery route. 

Is one particular path more suitable than others?

Is this route the most cost-efficient while meeting the estimated time of arrival (ETA) promised to the customer? 

Apart from matching road conditions to vehicle size, there are certain times allocated for pick up in a warehouse, or a specific drop off time for the customer. Then there is driver availability and size and quantity of goods to consider. With so many variables at play, dispatchers will normally be tasked to handle the route planning process while delivery drivers are only responsible for safely delivering goods. 

How does route planning work?

Route planning requires both macro and micro-decisions. Businesses may apply these two decision-making scales to upgrade their service and constantly achieve their main goal — reaching the final destination from the starting point.

Typically, businesses will use a delivery management system to assist them in determining the sequence of each delivery order. It can be a single leg or a multi-leg, and each route is exclusive to each driver. The route planning algorithm will take these variables into consideration: 

  • Vehicle type and capacity
  • Size and quantity of goods
  • Drivers’ schedule
  • Pick up/drop off locations
  • Delivery time window
  • Costs

Essentially, the system will utilise route planning algorithms to select the best route for the delivery fleet automatically.

Even with an automated route sequencing, it allows manual changes which enables a dispatcher to manually change the sequencing based on current weather conditions, road accidents and toll avoidance. For example, would a truck weighing 10 tons be permitted to pass one specific road? Would the road’s contour support the vehicle? Is the road closed due to a landslide? 

If you are still unsure why it’s important to structure your route planning properly, we’ll help you explain the topic further.

Why is it essential to do proper route planning?

Deliver goods more quickly: An optimised path would result in shorter delivery times, exceeding customers’ demand for fast order fulfilment. Shorter delivery times would also enable more deliveries being completed daily by each driver, leading to higher fleet performance.

Prevent fleet from overworking: The system will automatically distribute tasks to the fleet, where each driver schedule is optimised but not over cramped. As a result, there will be less overtime work, enabling work-life balance and maintaining the fleet’s well-being. Happy and satisfied employees are important assets for businesses and by protecting their well-being, they will be more likely to be empowered and loyal.

Increase efficiency: If a dispatcher wishes to minimise the travel time, they can determine the average speed drivers need to keep. To minimise the distance for a same-day delivery, a dispatcher may choose shorter paths with toll fees. The flexibility offered by a route planning software would allow businesses to tailor their operation needs to their customers’ demands and expectations of their stakeholders while maintaining a level of operational efficiency.

Reduce overall operation costs: A well planned route could save fuel costs and in a long term, reduce vehicle wear and tear. A route planning system often comes with a real-time tracking dashboard and ePOD so it takes less time to know where the fleet is or a particular shipment status, whether it has been completed or late. All these are automated in the system and it would reduce overhead cost as well. 

With all of the above reasons, businesses can continuously improve their operations, cut costs and make more deliveries. More deliveries translate to higher profit margins. 

After understanding the significance of route planning, you may be wondering why quick order fulfilment is one of the indicators of successful deliveries. To help you figure this out, we’ll explain why you need to cut your business’ delivery time.

How do businesses benefit from route planning?

We previously discussed the importance of route planning for businesses. You may already acknowledge the value of the system in improving your business.

However, we want to make sure you have a comprehensive understanding of this topic, so we’ve included a list of the practical advantages of route planning below.

List of business’s areas that proper route planning can improve

Fuel consumption:

Reduce the risk of drivers being lost. Lost drivers will certainly drive on unnecessary out-of-route miles which leads to increased fuel consumption. 

Labour costs:

Effectively decrease labour costs. The system will distribute the tasks evenly to the fleet so drivers can focus on their work within a scheduled time frame without working extra hours and. When routes are effectively planned, the fleet capacity is optimised. There won’t be any unnecessary overtime claims and additional hiring of drivers. 

Customer satisfaction:

A smooth and quick delivery experience will positively affect customer satisfaction. If businesses can meet customers’ expectations for on-time deliveries, their customers are more likely to become returning customers, increasing brand loyalty.

Back-end operations:

Back-end operations are mostly manual with plenty of paper orders, excel templates and endless phone enquiries. A route planning system usually comes with a tracking dashboard, to have an overview of where the entire fleet is and the shipment status of each delivery order. With this visibility, it allows the back-end staff to make real-time changes in case of a faulty vehicle, additional stop, driver reassignment and attending to customer queries. 

Static route VS dynamic route

After discussing the importance of route planning, you also need to understand the different types of routes in logistics. A route planning software contains various algorithms to enable static and dynamic routing. 

What is a static route?

Static routes refer to the master path that businesses define. The journey path is fixed in static routing and cannot be changed. 

Typically, businesses that send goods in predictable volume, distance, and destination will implement this routing. For example, transportation companies that deliver goods in bulk and provide B2B business models will be more suitable to use static routes.

What is a dynamic route?

Unlike static routes, dynamic routes provide greater flexibility and unique routing. The order volume will determine the journey path and the number of stops.

Businesses that deliver goods in varying volumes, distances, and destinations will use dynamic routes. For example, businesses may ease their last-mile deliveries by adjusting the transportation path based on traffic conditions.

What is static route planning?

Static route planning is the process of determining a master route that fleet vehicles will always follow at all times. Businesses may need to ensure that the paths are suitable in the long term during the static route planning process.

Due to its strict nature, a static route planning strategy may help the delivery drivers become more focused than businesses that don’t practice it. However, in reality, some obstacles may appear unexpectedly.

For this reason, many businesses are now transitioning to dynamic route planning, which we will discuss further below.

What is dynamic route planning?

Dynamic route planning refers to the process of determining the journey path with more flexibility. If the initial route does not work out due to several issues (e.g., traffic and weather issues), businesses can strategise the alternative ways by using this route planning.

Due to its adaptability, this route planning method is popular. Businesses will be able to plan alternative routes and plan the routes based on order volume. Ultimately, they can identify and resolve problems that arise on the road for the sake of the business’ development.

Route planning VS route optimisation

Route planning and route optimisation are two terms that are often used interchangeably. However, route planning and route optimisation hold different meanings.

Route planning may or may not include route optimisation. Essentially, route planning entails using pre-existing delivery orders and arranging them into several destinations. As a result, organising the delivery orders may increase productivity and cost-effectiveness. 

On the other hand, route optimisation takes route planning to the next level. This system entails using weight limits, drive time, and shift patterns as part of planning. Many businesses incorporate route optimisation software into their workflow to control the end-to-end operations and improve customer experience.

How does delivery route software help in route planning?

After learning about the functions that businesses gain from route planning, you may be wondering how to get started with this system.

If you are ready to improve your business’ workflow and service quality, now is the time to invest in a reputable delivery route software. We’ll go over the features commonly found in the software and how they can help you improve your route planning.

  • Dynamic route planning

Dynamic route planning helps businesses to stay ahead of the competition. The flexibility and adjustability it offers allow businesses to change routes directly if some obstacles arise due to several issues (e.g., traffic-related or weather conditions).

  • Real-time tracking

Real-time tracking allows back-end operations to monitor the fleet movements. If the drivers experience any roadblocks, the dispatcher may notice and resolve the problems quickly. 

  • Driver app

The driver app is a one-stop solution for all of your drivers. Using in-app navigation, truck drivers can follow the routes without needing to use other apps. Using in-app chat, they can also notify the dispatcher if they encounter any roadblocks and also collect ePOD after each successful delivery.

Final thoughts

After reading this article, we believe that you understand the significance of route planning for your business. You can implement a decent delivery software for your business to effectively plan routes and reduce operation costs.

If you are unsure about which delivery software to use, you can get in touch with our Yojee’s team. Get ready to streamline your delivery workflows and improve your customers satisfaction.

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