What Is Route Optimization Software? What are Route Optimization Benefits?

Route Optimization Software

Route optimization software enables shippers, carriers, and logistics service providers (LSPs) to understand operations, reduce inefficiencies, and gain additional ROI when the capability is embedded within a transportation management system or platform (TMS or TMP). 

Effective route optimization programs rely on data and offer actionable insights that go well beyond the limitations of manual route optimization, building additional competitive advantages through automation in TMS functions.

Is Route Optimization Software an Advantage or a Basic Shipping Requirement?

An organization’s use of route optimization software was once viewed as a competitive advantage. 

For those shippers, LSPs, and carriers who had the resources to optimize routes, they had access to more information and better tools to plan trucking schedules, manage docks, and generate estimated time of arrival. 

However, the necessity to optimize routes more efficiently grows increasingly important due to the rise of e-commerce and fierce retail competition. The use of route optimization in and of itself is now not enough. Route optimization capabilities within a TMS must enable transportation professionals to proactively work to identify new opportunities to speed shipping, reduce costs, and continuously optimize operations in real-time. 

According to SupplyChainBrain, route optimization capabilities can save up to 30% on fleet expenses, allowing users to leverage optimization to increase profitability. In addition to reducing costs, there are additional benefits realized through route optimization software.

Advanced, Route Optimization Empowers Shippers, LSPs, and Carriers With Strong Benefits

Advanced route optimization considers internal and external data to continuously manage freight from origin through the destination. 

Route optimization users no longer need to hope that freight moves according to plan, as the route optimization capability within the TMS will validate freight’s location, identify potential risks, generate reports to uncover insights, and provide analytics that allows the user to proactively manage or prevent risks. In other words, freight self-optimizes, and self-optimization is the quantum advantage of modern route optimization.

Anyone could look at a series of trucks and figure out if winter weather will affect lanes. But, imagine the possibilities of letting a computer, powered by the latest-generation machine vision technology, analyze potential lanes, identify patterns in weather, isolate the risks, notify supply chain partners of potential delays, and even generate a new order for fulfillment to prevent the order from missing an on-time delivery. That’s a powerful capability.

How Does Route Optimization Software Play Into In-Transit Changes to the Route?

Route optimization software allows for the changing of orders while in transit to avoid missing a delivery—a critical component of the omnichannel, everywhere supply chain. The diverse capabilities of artificial intelligence mesh well with route optimization software protocols.

For example, UPS is preparing to roll out dynamic routing on parcel deliveries, providing a real-time means of interacting with drivers to reduce delays due to weather, traffic, changing customer orders, available drivers, construction zones, and loading docks not visible from the street, says Paul Sawers of VentureBeat. This level of dynamic optimization provides for ongoing improvements in freight management while in transit.

Consider that route optimization software may also be defined as the process of using advanced technologies to understand freight movements and reduce its total costs. Therefore, the effects of route self-optimization software are applicable to reducing the carbon footprint of a TMS user. The takeaway is simple: route optimization allows the user to totally leverage all resources.

Deploy an Advanced TMS With Route Optimization 

An advanced TMS must include route optimization software functions. With companies around the globe looking to differentiate their services and deliver more freight, faster, and without any exceptions that cause a missed delivery, TMS users need dynamic routing capabilities that leverage real-time information.

Download this infographic to see the path to route optimization.

See how optimized route planning helped our customer.


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