Did you know that UPS trucks almost never turn left?
Its no charming little quirk. Its a savvy business decision that saves them about 8 miles per route driven. And that adds up to millions of gallons of fuel annually.
The salaries of delivery drivers, along with fleet fuel costs, make up about 60% of a distribution businesss entire cost-per-mile. That doesnt even consider the cost of leasing, maintaining, insuring, and parking your fleet.
Its a massive figure. And if it causes you a little anxiety about your bottom line, youre not alone. So meet your new best friend, route optimization software.
Think of weather conditions and traffic congestion. Vehicle capabilities and delivery schedules. Now think of the size of your fleet. Is it 5 vehicles or 10? 25 or 50? The complexity of route planning for a growing B2B business is orders of magnitude larger than planning an individual route in one vehicle from point A to point B.
But leveraging modern mapping data and next-level algorithms is possible for as little as a few bucks a month. You just have to get some B2B route optimization software. Itll save you boatloads of time, money, and effort. And itll make you money, too. From growing your customer base to increasing sales to existing customers.
Compared to what youre losing right now in inefficiencies by not using it, you cant afford not to. So heres your invitation to the party. Read on to learn about what route optimization is, what its benefits are, and how to choose the right route optimization software.
What Is Route Optimization?
Route optimization is finding the best path between at least two locations, it's also known as routing. If youve ever personally used a service like Google Maps or, back in the day, MapQuest, youre familiar with it. When running a wholesale business, it's important to keep route optimization in mind. Keep this in mind when you learn how to run a wholesale distribution business, too.
Route optimization is finding the best path between two or more locations. But best is relative, of course. It can mean the shortest distance, least traffic, least tolls, or any number of factors. It can even refer to the shortest amount of walking distance between public transportation transfers.
Thats fundamentally what route optimization is. Its the process of making our movement from point A to point B as efficient as we can. Drivers in the U.S. spent over 6.9 billion hours and over 3 billion gallons of gas stuck in traffic in 2014. Thats what route optimization wants to change.
But, at a commercial level, its not so simple. And it gets even more complex if youre routing an entire fleet of delivery trucks. Like a B2B wholesaler would, for example.
B2B Route Optimization
B2B distributors and wholesalers are unquestioned experts in their industries. They specialize in a vertical, are authorities on certain products, and leverage that experience and know-how to grow their business. But theirs is a unique position. Because theres something else they have to master: distribution.
So, industry-leading expertise isnt enough. If youre not a master of logistics, your business is not firing on all cylinders.
Think about it. Youve got multiple vehicles making numerous stops. Youve also got to consider driver schedules and availability, delivery windows, specific drop requirements, and service time between drops.
Oh, theres also vehicle capabilities to think about. Whether a vehicle is refrigerated or not. And whether the products are shelf-stable or perishable. That, of course, impacts drop schedules and time-on-road.
These wholesale-specific factors increase the complexity of route optimization immensely. But theres good news. Route optimization software exists, and its not expensive. Its easy to implement and use, too. It is, in fact, one of the clearest examples of technology making business easier and more profitable with virtually no downside.
So lets take a look at exactly how this magical software helps businesses streamline inefficiencies and grow their bottom line.
B2B Route Optimization Software Benefits
Before we dive into the benefits of automating B2B route optimization, lets get a frame of reference. Lets talk about manual routing. Specifically, about how its bad.
Manual Route Planning Is Bad
- Its error-prone. Manual routing is really good at one thing: creating mountains of paperwork. Then you have to organize it, file it away, and access it reliably in the future. Mistakes are made creating documents, filing them, and retrieving them. Things are lost. Information is overlooked and misinterpreted. Its just human error. Relying solely on ourselves when the stakes are so high does us no favors. Just think about all the time, energy, and effort your company and drivers waste doing anything other than delivering products and servicing customers.
- Its expensive. Every year, businesses lose 32.6 billion hours because of weather-caused traffic issues. It costs time. And 55% of customers say theyll stop using a company if 2 or more deliveries are late. That number goes up to 59% for incorrect deliveries. It costs customers. Most sobering of all, heavy-goods vehicles risk of a head-on collision goes up 4X during twilight conditions. Too many drivers are caught in those dangerous conditions because of inefficient routing. It can cost lives.
- Its inefficient. If your drivers are inputting their deliveries manually, theyre doing it one-by-one. And theyre taking their best guess on which order is most efficient. While they are driving experts, they cant compete with infinite, up-to-date data from a mapping API.
- Its inflexible. What should you do if a customer reaches out to your customer support and wants to change an order or delivery time? Or cancel a delivery outright? How can you change your routes on the fly, while communicating it all to a driver on the road? Theres only one way to do it safely and quickly, and its not manual route planning.
Your customer base is large and expanding. Their demands are unique and constantly evolving. They need different products at different times. Products that may need different trucks, and deliveries that need to align with driver and vehicle availability.
How can a business juggle all of this efficiently? Well, we can tell how UPS manages their fleet. And it sure as heck aint with manual routing.
Its with routing optimization software.
Route Optimization Software Is Good
There are two groups party to the amazing benefits of automating route optimization. Businesses and organizations as a whole, and drivers individually.
The benefits of route optimization software for businesses are:
- It saves a lot of time. Using a reliable, cloud-based mapping service is simply better than a person. Its faster, it accounts for more variables more thoroughly, and it provides more options. In no world is a human able to best modern mapping software for routing purposes.
- It reduces cost. As stated, about 60% of a delivery operations total cost per mile is fuel cost and driver wages. If youre decreasing miles driven, youre decreasing fuel cost, vehicle maintenance cost, and driver hours worked. And because drivers spend less time-on-road and drive in safer conditions, there are less accidents. Insurance premiums go down. Thats a lot of savings. It more than covers the cost of the route optimization software.
- It increases sales and profits. If youre delivering quickly and on-time, then customers are pleased. They order more. If your staff is spending less time planning routes and handling customer issues from delivery errors, they can sell more. They can spend more time nurturing existing relationships and acquiring new customers.
- It makes your fleet more efficient. Your fleet costs a lot to lease. Then insurance, gas, maintenance, etc. If youre optimizing your routes, youre optimizing the things that use the routes: the vehicles. They rack up less miles and you get the most from each truck.
The benefits of route optimization software for drivers are:
- It helps drivers avoid mistakes. Theres always a risk that an individual driver will make a mistake, and that goes up exponentially when youre not depending on routing software. That leads to upset customersand even churn.
- It increases on-time delivery. Automated strategic routing not only gets your drivers to their deliveries on time, but it makes each delivery feel less rushed. Drivers can spend more time servicing customers before they get back on the road. The increases order accuracy and helps address any errors on the spot.
- Windshield time is minimized. Time-on-road between deliveries is minimized. That improves driver working conditions.
- More employees are retained. The turnover rate for truckers in the U.S. is 90%. And growing. A happy employee is a productive employee. And happiness at work is contagious. With more efficient delivery routes, youre taking steps toward making drivers happierand retaining them.
Its clear. Manual route planning for wholesales is a ton of work. Its not cost-efficient, its error-prone, and its slow. And its even dangerous.
Route optimization software takes care of all of that. For a cost that is basically inconsequential. So heres how to choose the right one for your business.
Choosing B2B Route Optimization Software
What Exactly Is Route Optimization Software?
B2B route optimization software digitizes and automates deliveries and routing so thoroughly that theyre almost afterthoughts.
As stated, typical consumer-focused routing software is found in apps like Google Maps or Waze. These apps are great for individuals looking to get from one place to another. From your house to the airport, for example.
B2B route optimization software is a more powerful version of it. One of the biggest differences between routing software for consumers and wholesale distributors is the ability to handle multiple stops effectively. Most B2B route planning software is a multi-stop route planner.
Heres an example of a multi-stop route planner in action. Lets say youre a wholesale meat distributor. You want to optimize your routes for your fleet of trucks. If you use a multi-stop route planner, youll give your drivers the best chance possible to make all their deliveries on time. While driving as few miles as possible. In fact, route planners make routes, on average, about 35% shorter.
But planning a route with multiple stops is just the beginning. Here are some of the other features of the software you need to be aware of.
Route Optimization Software Features to Look For
Its tempting, as a B2B wholesaler, to think about your personal experience with Google Maps and think Im good. But add the complexity of dozens of vehicles and other factors in. Along with hundreds or thousands of deliveries. Its a lot different from finding a burger joint in the town over. There are too many moving pieces. The stakes are too high and the risk too great to not cover our bases. Routing software for consumers wont cut it.
Think critically about your businesss unique needs. For wholesale distributors, you cant just throw in a list of addresses and off you go. Here are some route optimization software features that you should look for. Theyll make everyones lives easier.
- Mobile and smart device integration. Drivers have their phones with them, and they need their routing software to integrate with them.
- Ability for routes to be manually overridden. In the event that a route needs to be changed or adjusted, the ability to do it manually saves time and headaches.
- Traffic avoidance. This is a basic but wildly important feature. Traffic is one of the biggest blockers to on-time deliveries.
- Comparison of routes driven with routes planned. Knowing if and when a driver deviated from a planned route helps understand why and solve similar issues in the future.
- Notes field for customer buyer delivery information. Some buyers need special considerations, and drivers need a place to keep track of that information.
- Real-time GPS vehicle tracking. Knowing where your vehicles are helps provide updates to buyers, react to unforeseen issues on the road, or make routing decisions on the fly based on shifting needs.
- Both one-way and round-trip routing. If the routing software doesnt offer both types of common routes, stay away.
- Up-to-date mapping API integration. Constantly-updating access to visual mapping information is only available via the latest and greatest mapping services, like Google Maps.
- Cloud-based and online. This means accessibility via web and mobile with any internet connection.
- Offline capability. For truckers out in the world, in far-flung places, going through tunnels with spotty internet, this is huge. No offline access can mean a string of later deliveries and upset customers.
- B2B ecommerce platform integration. If your routing software is part of an end-to-end B2B ecommerce solution, youre saving money and operating as efficiently as possible. Because its all in one place, in one system. All-in-one solutions are one of the best benefits of B2B ecommerce.
- Very few or no stop limitations. Some free or low-cost solutions have a hard limit on the amount of stops. Even if you dont need many stops right now, a platform like this wont grow with your business.
- Updated ETAs in real time. If a buyer knows exactly when to expect their shipment, its the best buyer experience possible.
- Able to juggle multiple variables. Multiple routes, multiple vehicles, multiple trips. It should be multi-everything.
- Ability to print paper routes (for the old-school drivers). Most drivers, used to using Google Maps personally, will interact with their routes digitally. Some still dont. And they can be accommodated with a simple paper printout.
Route Optimization Saves Time-on-Road and Money
According to the American Transport Research Institute, fuel and driver pay make up about 60% of a delivery operations cost-per-mile.
Another study discovered that delivery from a distribution warehouse to a customer, AKA last-mile delivery, makes up 53% of transportation cost. That makes it the most expensive and labor-intensive piece of the supply chain. For both large and small businesses.
But all business sizes will see an almost instant return on investment (ROI) with automated routing. The software is available for as little as a few dollars per month. It wont take very long for your investment to pan out.
And even for the very largest delivery operations, the case for automating route mapping is airtight. UPS, as an example, saves millions and millions of dollars on gas, truck wear-and-tear, and insurance by using software to optimize their routing.
The use of route planning software has a profound impact on wholesale businesss bottom lines. If youre not using one yet, its time you see for yourself.