Route Optimization Software: Simplified Definition

Route optimization software optimizes planned routes in near real-time to enable drivers to spend less time driving, prevent backtracking, save money on fuel, and improve customer service while keeping in mind the company's goals and financial strategy. Creating routes with pen and paper, maps, whiteboards, and spreadsheets is a time-consuming, complicated, and inefficient method. However, with the help of Route Optimization Software, most of the route planning work can now be automated and executed with more precision. Route optimization software helps dispatchers and drivers establish optimal routes, manage daily operations, and propose new fleet management methods based on the company's requirements and goals.

Route Optimization Software: Technical Definition

ClickPost defines Route optimization software as the software that accepts customer orders and automates vehicle scheduling and optimization activities for any fleet size, taking into account available resources, road networks, and operational constraints to determine the best route and delivery sequences that meet the company's financial and customer service objectives. Business rules specific to the company, fleet variables, vehicle size, cost and product suitability, driver skills, road network restrictions, customer time window requirements, and delivered goods restrictions are some of the crucial variables that can be represented as part of the route optimization process.

What is route optimization? / What is route management?

Planning and improving routes for greater efficiency and cost-effectiveness is known as route optimization. Route optimization aims to reduce mileage, fuel usage, and driving hours while assuring rapid delivery to get the most value out of your fleet of vehicles. It's not just about determining the quickest route from point A to point B; it's also about determining the most efficient route for various parameters such as driver schedules, available hours, total stops, traffic congestion, fulfillment estimates, and legal requirements.

Can Google Maps optimize my route?

The Google Maps software serves as a multi-stop route planner but not a route optimizer. Google Maps is referred to as a "web mapping service," in fact. If you simply have one or two deliveries, you can use Google Maps to optimize routes, but beyond that, Google Maps is a poor route optimization tool because you'd have to manually enter each conceivable variant of stops to check which one is the shortest.

How much does route optimization software cost?

Most route optimization software in the market is priced "per user, per month," in different pricing categories based on their initial price. The cost ranges from $5 to $45+. Additional features such as live tracking, in-vehicle GPS, and driver analytics may be included in a higher-priced enterprise or premium product.

Why is route optimization needed? / Why is route optimization important?

  • Driver salary and fuel costs account for 59.8% of total operating costs per mile in various sectors.

  • For fleet dispatchers, route optimization gives a high return on investment.

  • Route optimization reduces fleet miles and helps to avoid late arrivals.

  • Some softwares also provides updates and notifications for dispatchers, customers, and other parties, ensuring clear communication and real-time ETAs for all parties involved.

  • Improves client relationships while also adding value to your clients.

  • Furthermore, optimized routes save money on fuel, which is good for both company finances and the environment.

What are the benefits of route optimization software? / How Can Route Optimization Software Benefit Your Business?

Route optimization is critical for delivery businesses due to the following reasons:

  • Savings in fuel, mileage, and other associated costs: Software suggests fuel-efficient routes, reduce the number of miles driven and overall driver time on the road, allowing fleet insurance premiums and liability costs to be reduced.

  • Route optimization and enhanced fleet utilization algorithms to manage complex route planning and assist fleet managers to consider variables such as rush hour traffic to avoid unexpected delays. 

  • Optimize vehicle number in the fleet: Fleet managers can make the strategic decision to use fewer vehicles to complete the same amount of work using automated planning, real-time route adjustment, and live tracking.

  • Improves delivery productivity and customer satisfaction by evaluating more delivery permutations than possible for a human.

Where are the typical features of route optimization software?

There are numerous platforms available, each with its own set of pros and cons. These six fundamental features must be included in a great  Route Optimization Software:

  • Efficient dispatching- Drivers receive updates and alerts about routes on their mobile, allowing them to access and change route plans in real-time.

  • Driver Management- Provides a central dashboard that allows businesses to watch driver behavior and receive data on their driving habits.

  • Optimization of routes to find the most cost-effective and fuel-efficient routes.

  • Drag-and-drop scheduling interface to quickly schedule work orders, optimize routes, and dispatch the right field crew.

  • Track a driver's location and behavior in real-time.

  • Performance metrics to track each route's contribution to overall performance over time.

How to Choose the Best Route Optimization Software?

Keep these core fundamentals in mind while choosing the best  Route Optimization Software for your business -

  • Integration with dispatching and scheduling software to accommodate more calls/work orders in orders in one day and keep your customers on schedule.

  • Accommodates multiple routes for multiple vehicles enabling fleet managers to carefully plan out the shortest path to save time while also rerouting the previously scheduled route to complete delivery.

  • Fast processing of optimized routes in real-time to smoothen pick-ups, deliveries, and service calls.

  • Accepts universal formats for import & export of data for quick analysis and performance monitoring.

  • Uses up-to-date data mapping to save the time and hassle of updating things.

  • Geofencing to precisely locate the approximate latitude and longitude for coordinate mapping.

  • Analytics and report management help in detailed scrutiny of how the deliveries have been overtime in the past.

What are the primary routing strategies used by route optimization software?

No matter the fleet’s approach, each routing strategy addresses the traveling salesman challenge at its core. Most route optimization software supports three primary routing strategies.

  • Static –  Route planning is done on a quarterly or monthly basis.

  • Dynamic – New routes are built on a daily basis.

  • Real-time Dynamic – Routes alter during the delivery day as new orders enter the system and as conditions on the ground change.