How Does Route Optimization Software Assist 3PL Businesses?

Logistics Transportation Review | Tuesday, February 09, 2021

The route optimization software makes use of machine learning and artificial intelligence to assist 3PL companies efficiently by cutting down logistics costs by facilitating driver to get to the right customers at the accurate time, delivering the right products.

FREMONT, CA: Third-party Logistics Providers (3PLs) can considerably shape today’s supply chain setting as well as future logistics. In the meantime, route optimization software is warranted to boost operational competence by solving vehicle routing and scheduling problems that thousands of 3PL companies are struggling with.  

Below are three reasons why 3PL companies should use route optimization software.  

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1. Reduce Overall Cost of Logistics

There are many types of fees in logistics and supply chain impacting the overall transportation cost that thwarts managers from enhancing their business. The route optimization software makes use of machine learning and artificial intelligence to assist 3PL companies efficiently by cutting down logistics costs by facilitating driver to get to the right customers at the accurate time, delivering the right products.

With the help of route optimization software, 3PL companies can reduce four main types of costs as below:

• Reduce Fuel Cost: Fuel cost is stated to take more than 30 percent of overall operating costs. In contrast, the software yields more competent routing that reduces kilometers driven, therefore reducing fuel costs for small, mid-sized to big fleets.

• Decrease Vehicle Maintenance Cost: Less time spent on the road will lessen the need for protection of carriers so that they can stay in active rotation for a higher number of trips. Therefore, the loss of operative time will also be decreased as vehicles spend fewer hours experiencing maintenance and more hours in service.

• Cut Down TCO (Total Cost of Ownership): Route optimization software cuts down overall operational cost by reducing the wear-and-tear cost of carriers.

• Lesser Violations, Accidents, and Associated Costs: While enhancing the route, the software uses smart algorithms to propose the most appropriate route that avoids restricted roads for every type of vehicle and each time slot. The instance, in turn, implies less exposure to violations, safety risks, and traffic, thereby positively affecting the fleet’s insurance premiums and cutting high liability costs. More limited time on the road is also a safety advantage for the fleet since the safest miles are the miles never driven.

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2. Save Time To The Minimum

The correct routing software can suit numerous constraints (time window, traffic conditions, temperature constraint, and average speed) to analyze routes taking the least time and kilometers. The platform only takes seconds to calculate and give out an accurate figure that saves hours and days of number-crunching. Route optimization software also suggests the advanced route instead of showing a long list of destinations. If drivers follow the path, the time taken in transportation will be saved. 

Additionally, the smart tool also reduces transportation delays for drivers by helping dispatchers and drivers to map routes that avoid congestion, shortening transportation times, and reducing costs on the longer route. Furthermore, route optimization facilitates dispatchers to offer real-time assistance and alternative ways for drivers who find themselves in an unforeseen traffic delay.

3. Manage Multi-Task More Effectively

In route optimization software, one does not have to manually input each stop because a list of daily is already available for the delivery men to follow. The optimization software demands clear input from dispatchers to assign precise tasks, needs, and direction for drivers ranging from the specific location of every customer. Additionally, the time window of the destination, goods types, weight, volume, notes, and bills are also required to ensure that the drivers deliver the precise shipment and collect the exact invoice. Routing software will make sure that the optimized routes are proficient both in terms of distance traveled and time to the destination. The approach leads to shorter service times facilitating a company to increase productivity and save time for other tasks.

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