Why delivery companies need fleet optimization algorithms

route planning

Why delivery companies need fleet optimization algorithms?

In the last ten years, e-commerce has changed the way people expect to receive their online purchases. Right now, when a user buys an item online, it needs to be fast, reliable and shipping-free. Therefore, physical business also require fast and intelligent goods provisioning in order to offer better products and services at the desired timing.

Delivery companies and fleet optimization algorithms

For delivery companies, regardless of their size and industry, optimizing their operations is critical for profitability. A recent article from Business Insider shows that around 53% of the transportation costs account for last-mile delivery operations. 

Companies spend hours every morning planning their delivery routes with the help of Excel sheets, Google Maps, ERPs or TMSs, which are tools not prepared for fleet and route optimization. It is literally impossible to get a decent optimization rate with the use of this tool and the power of experience, not because of people capacities but due to the complexity of the problem. Delivery businesses have a lot of restrictions such as tiny time windows to deliver, clients’ priorities, types of goods, traffic patterns, drivers’ skills, restricted areas and many more complex configurations that make the problem even bigger.

Below you can find a real example of a daily planning made with Hedyla’s distribution optimizer against the original planning of a delivery company. Whilst the original plan is made by a simple strategy of dividing the deliveries by their location zone, Hedyla’s planning algorithm takes into account all factors to guarantee a certain quality of service together with providing a 26% optimization in operation costs.

distribution map algorithm

This does not only account for cost optimization, but for other many benefits. Below you can find statistics from a real company working with Hedyla’s distribution algorithms:

 

  • 26% optimization in operation costs.

  • 29% reduction in CO2 emissions.

  • 24% optimization in overall routing time.

  • Reduction of planning time from 80 minutes to less than 10 minutes.

  • 100% accomplishment of all delivery time windows.

  • Removal of errors related with planning (e.g. clients geolocation or missing orders).

  • Overall real-time control and tracing of routes and deliveries.

 

In this way, algorithms can handle and process information in ways that human dispatchers can’t. Technology like route optimization software attempts to solve the problem of last-mile delivery by getting drivers to the right places more quickly and efficiently.

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