Logistics Optimization

Reducing Fuel Costs and Other Benefits of Route Optimization

April 8, 2022

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Reducing Fuel Costs (and Other Benefits) with Route Optimization

Reduced costs

The following are the biggest cost reductions you can expect when using route optimization technology.

  • Fuel: Route optimization software reduces fuel consumption, which lowers your fleet’s costs and carbon footprint.
  • Vehicle depreciation: Route optimization reduces vehicle mileage, resulting in lower maintenance costs, lower insurance rates and higher resale value.
  • Insurance: Optimizing routes allows your drivers to spend less time on the road, which means fewer risky driving situations and a better experience for everyone involved. This results in reduced insurance premiums.
  • Labor: Letting your team use route optimization is a smart way to reduce labor costs by helping them avoid rush hour traffic. This will make them more productive overall as they spend less time sitting in traffic and more time taking care of business at your customers’ locations.
  • Emissions: Using route optimization ensures that vehicles are not idling unnecessarily or making inefficient stops around town, reducing emissions from vehicles that are running without an effective purpose.

Shortened lead times

The route optimization software knows that no matter what delivery tasks you have, the pizza place is always first and the flower shop is always last—therefore routing the driver to those locations in that order drastically reduces lead times in your deliveries. The software also takes into account any relevant landmarks or areas for which drivers must take a different route, as well as one-way streets, stop signs and traffic lights to further reduce lead times.

Improved customer service

The customer benefits greatly from routing optimization. How?

  • You will get your order, when you want it, or sooner.
  • If a customer wants to know the estimated time of delivery, you'll have a better idea of when to expect the delivery.
  • Better routes=better customer service!

Route optimization can drastically improve logistics operations and the bottom line.

In addition to creating efficient routes, route optimization has a number of benefits for logistics operations. A recent article published by Inbound Logistics listed several:

  • Reduced fuel costs. Fuel is typically the largest single operating expense for fleets, which is why reducing fuel consumption is such an important consideration. Route optimization software uses algorithms that factor in a range of variables to determine the most efficient delivery routes in real-time.
  • Increased customer satisfaction. Customers prefer timely deliveries and dependable service, which means they want shipments delivered on time and with minimal delays. With route optimization software, you can ensure shipment arrival times are as accurate as possible and allow customers to receive notifications about their deliveries via mobile apps or email alerts.
  • Improved driver safety and productivity. Long hours behind the wheel often lead to driver fatigue and stress — not only does this make drivers more prone to accidents, it also leads to reduced productivity over time because of missed days due to illness or injury from motor vehicle accidents (MVAs).