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.
How Does Route Optimization Play Into In-Transit Changes to the Route?
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.
The potential for improvement goes beyond just delivering packages on time. According to Martin Jacobs via Medium: