Dynamic route planning and optimization in logistics: the key to sustainability


By Komal Puri | October 18, 2022

The pandemic shifted consumer behavior with people demanding fast delivery of goods. The role of a dynamic route optimization platform with regards to ensuring seamless online deliveries is gaining rapid momentum.

For a company to survive during these changing times, logistic services need to be cost efficient, safe and fast in terms of delivery to their customers. The key to a successful logistics operation is to implement a route optimization method by which the most efficient routes are allocated to delivery fleets.

Types of Dynamic Route Planning and Optimization

Route planning in logistics can be broadly put into two categories -

1. Static

2. Dynamic

What is static route planning?

Static route planning or routing is a process of sending deliveries through pre-configured routes with no deviations allowed. These routes are fixed and if the predefined route becomes unavailable, deliveries stop which results in loss of business and customers.

A static routing approach restricts the company from creating a route based on real-time information, and also does not provide ways to communicate between delivery management and drivers, resulting in late delivery of goods. Static route planning might not be able to deliver on the evolving business and customer needs.

To maintain customer satisfaction and eliminate logistics failures, implementation of a dynamic route planning software will help.

What is dynamic route optimization/planning?

Dynamic route optimization in logistics means that routes are created from scratch using a given set of orders and also allow adjustments based on traffic-related or weather issues. The main advantage of dynamic route planning is scalability and adaptability. Such a platform is able to adapt and implement changes as and when the company grows.

4 Key Advantages of Dynamic Route Planning Software

With the advancements of technology, companies have various means to collect data through GPS navigation system, real-time location services, wireless technologies, RFID and many more, making dynamic route planning a reality. This collection of data provides insight into the current location of the fleet, traffic, weather conditions, fuel utilized and many more aspects related to logistics which can be used to revise the delivery route to meet customers’ needs and delivery schedules. A dynamic route optimization software would be able to reduce delivery errors, increase on-road efficiency and avoid last-mile complications.

1. Real-time tracking

A dynamic route planning platform allows companies to track delivery executives in real-time. This fleet visibility helps in utilizing assets to its fullest to streamline delivery operations. Such a platform would help companies improve the delivery distribution, assign additional deliveries and reduce idle time. Better productivity will increase the overall revenue of the company.

2. Use of analytical tools

A dynamic route optimization platform provides various analytical tools to print reports to review the on-road performance of the fleet. These analytical insights will help the company to optimize the delivery routes based on past experiences. When faced with real-time problems like weather or road blocks, dynamic rerouting feature helps suggest alternate and efficient routes for delivery. Transportation route planning helps to coordinate delivery time slots for customers and to minimize the stop time at each location. A well-planned route helps the company reduce the levels of carbon emissions and pollution for the environment.

3. Customer satisfaction

Dynamic route planning software provides updates on routes, track a vehicle, and provide information on completed deliveries. With this ability to provide an estimated time of arrival for goods, customer satisfaction is assured. It also provides tools to track vehicles and monitor what drivers are doing on the road in real time.

4. Cost-effectiveness

In the logistics sector, the term ‘empty miles’ refers to the distance traveled while generating no revenue for the company but incurring transport operating costs. This platform helps plan the shortest and the most fuel-efficient route, especially for return journeys, and also allows incorporating pickup jobs for fleets returning empty after delivery.

The cost for the implementation of a dynamic route planning platform is insignificant when compared with the benefits. A platform like this will help companies to manage their deliveries, improve productivity, save fuel costs and add more stops to their delivery route while providing the customer with a faster delivery. Companies will face huge financial challenges post the COVID-19 pandemic. Dynamic route optimization is a key to sustainability as it allows greater transparency, productivity and flexibility in fleet management.

Gartner has recently released a Market Guide for Vehicle Routing and Scheduling, mentioning notable vendors including FarEye.

What is real-time dynamic routing software?

Real-time dynamic routing software uses algorithms to create optimized real-time routes that help in making fast and efficient deliveries in the face of fluctuating consumer demand. Real-time dynamic routing software factors in order volume, availability of drivers along with weather conditions and possible traffic snarl to come with the best route for making the deliveries. The complex algorithms working in the background help improve fleet efficiency and facilitate faster deliveries and ensure enterprises can manage on-demand orders proficiently.

How to Create the Most Efficient Routes Using Dynamic Routing Software

While creating the most efficient routes using dynamic routing software an enterprise must ensure that they consider live traffic conditions, changing weather, real-time changes in sequence, mapping with customer availability and clustering of deliveries on similar routes.

Vital information like delivery location, type of vehicle, number of orders to be delivered, service time for each delivery is needed to map an efficient route. What time the does order need to be made? Which driver is nearest to the delivery location? Which warehouse is the nearest for sourcing the order? Is the driver making the delivery familiar with the location and which destination is the driver headed next? -- are some of the questions that enterprises need to work out to assist the dynamic routing software in creating the most efficient routes for delivery.

Komal puri

Komal Puri is a seasoned professional in the logistics and supply chain industry. As the Senior Director of Marketing and a subject matter expert at FarEye, she has been instrumental in shaping the industry narrative for the past decade. Her expertise and insights have earned her numerous awards and recognition. Komal’s writings reflect her deep understanding of the industry, offering valuable insights and thought leadership.

Komal Puri
Sr. Director of Marketing | FarEye

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