In today’s on-demand marketplace, it’s the very last step of the logistics process that is the most critical. The journey from warehouse, restaurant, or store to the final destination is what’s referred to as the last-mile of order delivery, and how you manage this critical function can make all the difference in the success of your business.
When it comes to last-mile delivery challenges, you’ll often hear the terms route planning and route optimization — and it’s even likely that the two will be used interchangeably. However, there’s a significant difference between planning and optimizing, and practicing one without the other could mean significantly higher delivery costs. Here’s what you need to know about route planning versus route optimization.
Route Planning: The Old Way of Doing Things
In simple terms, route planning takes a predetermined list of destinations and puts them in the most relevant and efficient order while primarily focusing on the shortest distance and the fastest time. There are many free route planners out there (such as Google maps) but they can’t handle the variables associated with a complex delivery business.
Route Optimization: A Necessity For Delivery Businesses
Route optimization, on the other hand, uses a complex system of algorithms to evaluate hundreds and even thousands of variables to create the optimum delivery route. Route optimization software takes into account things such as driver schedules, vehicle capacities, driver coverage areas, and delivery window times to create the best, and most efficient route.
With the right route optimization software, you can grow your business from one or two drivers to thousands, and you can increase productivity while reducing delivery costs — two more key factors in building a successful delivery business.
Save Time and Money Through Route Optimization
The main challenge of last-mile delivery is that it is costly. That’s because it involves shipping smaller quantities to more locations. To offset these higher costs, it’s necessary to focus on planning and efficiency and the best way to do that is through route optimization. Here’s a closer look at the benefits of route optimization.
Reduce Transportation Costs
Fuel and labor are two of the most important factors to consider in your logistics cost equation. That’s because a large percentage of your total delivery cost can be attributed to them. Allowing your driver to spend all day on deliveries that should only take a few hours will eat away at your bottom line. And, going just a few miles out of the way for one delivery may not be the end of the world, but when you multiply that by several drivers and dozens of deliveries every day, that extra gas money can really add up.
Being able to shave time on your deliveries is not only good for boosting productivity, but it also has a positive effect on customer service. If you’re able to deliver goods faster than your competitors, this gives you a distinct advantage and shoppers will choose you over someone else if they know they can get what they want faster.
Grow Your Business
Driver capacity can be a bottleneck for delivery businesses. In order to invest in more drivers and more vehicles, you have to have the capital to support them. A better way to manage this is to first take a look at your current productivity. Is it possible that you could be doing more with the resources you have, without compromising customer service or safety? Route optimization can boost productivity by allowing you to do more, and do it more efficiently. This is the key to unlocking your growth potential.
Choose GetSwift For Route Optimization Software
Effective and efficient driver routing is one of the most important controllable factors for a last-mile delivery business. If you’re still just putting together route plans based on the location of the destinations, then you’re missing out. Delivery route optimization software can help you account for an unlimited number of variables so that you can crush the delivery business.
GetSwift has developed delivery route management software that will not only help you with managing your driver’s routes but with all of the elements of your delivery business. From dispatching and real-time driver tracking to automatic customer alerts and an easy-to-use mobile driver app, GetSwift offers everything you need to run your business now, and to prepare it for the future.
Check out how our software can help by watching a free demo or starting a free trial today.