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Optimize routes, save money

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Editor-At-Large

So, you run a logistics and distribution fleet and are juggling the rising cost of fuel and equipment—and equipment utilization—as well as a variety of other issues that have left you trying to figure out the best way to optimize your resources. You are not alone.

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These days most major carriers are focusing on becoming more efficient and they are finding that the best was to do that is to more efficiently plan their routes and schedules. What many fleets are finding is that traditional methods of route planning do not address real-time events that impact businesses every day. To be competitive, fleets need to not only optimize routes, but also accommodate the random, short-notice requirements of their customers. This means keeping track of route availability, and route planning for quick responds to ensure the lowest cost of transportation.

Logistics companies and/or LTL carriers operate short-haul and long haul routes that include loading and materials handling complexities, such as the availability of equipment, which can include transfer of product between the different modes of transport and the subsequent consolidation of product in containers. To develop routes that cover all deliveries and pickups to and from numerous customers is complex. Many fleets have developed efficient routes but some have had to revise plans to accommodate the regulated hours of service (HOS) constraints. Because of this, less efficient routes must be calculated.

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There are a number of optimization software providers in our industry that can help carriers create solutions to build the most efficient daily routes, which can also be programmed to decrease load times by optimizing loading patterns for multiple route types. Further efficiencies—and customer satisfaction—can be achieved by adding GPS route-mapping analysis and live execution information via web access.

Look for route optimization software providers that offer features, such as telematics platforms for route tracking data analysis to create smart territories and optimize vehicle navigation. The best software includes integration with the carrier’s existing back-end accounting software and financial databases, which gives managers access to all costs when calculating routes. You may want to include data of fixed costs, per-mile cost, labor and overtime.

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Companies have employed manual route planning for many years and despite the experience of the route planners, the ever-changing complexity of today’s transportation network can affect the financial validity of a route from day to day. By modeling the transportation network, management can constantly monitor the small changes that affect the network in a real-time environment allowing changes that keep the most efficient and economic route planning. From deciding the locations your vehicles will cover and how you will make the best use of your equipment provides significant, long-term benefits. When choosing a optimization software provider, visualize the cost of your changes—before you commit. Even plans in action can be continually optimized with tight feedback loops from your mobile operations.

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It has been estimated that a good route optimization software can provide a return on investment (ROI) savings average of between 10% to 20% in reduced of mileage, hours and equipment maintenance. In addition, it helps fleets establish a repeatable process and the opportunity to centralize routing.

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