If you are working in the logistics industry or running a fleet business you will have an idea about the importance of route optimisation. There are various factors affecting route optimisation that automatically contribute to the success and efficiency of logistics operations.
Let’s have a look at what is route planning and what factors affect optimisation.
What is route planning?
Route optimisation or route planning means a standard process of deciding; which is the safest, and most cost-effective route for the transportation of vehicles from one place to another.
But it is not as simple as it seems now. There is more to route planning than anyone can think of. Finding the shortest or fastest way is not just all logistics businesses need.
There are many factors affecting route optimisation including the type of goods the vehicle will be carrying, potential road hazards, weather conditions, etc. Here is a list of factors that are involved in route planning.
Factors affecting route planning:
There are predictable and unpredictable elements included in route planning. Let’s have a look!
Travel Distance:
Distance is one of the predictable elements that affects route optimisation decisions. The decision is taken by considering minimum distance options available while ensuring on-time goods delivery.
Cost:
Logistics business success depends on many factors including making cost-effective choices to maximise profits. The cost of travel and delivery of goods involve many costs including; vehicle maintenance, tolls, fuel, goods transported, overtime wages, etc. While finding the optimised route it is important to consider all these factors so the cost can be reduced and efficiency can be improved throughout the process.
Expected Delivery time:
The delivery time window is also one of the factors that affect route optimisation planning. Sometimes the goods are time-sensitive and require faster and expensive routes to be chosen for safe and on-time delivery.
Route regulations and restrictions:
Every country, region and state has different restrictions and regulations on different vehicles. For instance; type of luggage, hours of driving, restriction on weight or limitation to travel through certain routes or ban on delivering restricted goods such as hazardous materials.
Mode of Transportation & Capacity:
One of the crucial factors affecting route planning is transportation mode and capacity. It includes quality, weight, volume of the items and type of vehicle in which it will be carried from one place to another. Sometimes heavier loads are restricted on specific routes, and sometimes the vehicle needs specific permits.
The factors mentioned above are predictable factors that affect planning for route optimisation. A few other elements are less predictable, yet need to be considered while planning for a better route for travel.
The unpredictable factors include strikes, road obstruction, rehabilitation of roads, weather, law & order situation of the area, etc. However, the unpredictable factors need real-time tracking and managers with quick decision-making capabilities to adjust routes promptly.
Understanding the importance of route optimisation factors:
It is important to understand the importance of factors affecting route planning to come up with an efficient and strong logistics strategy. For instance:
Short route importance:
While considering the factor of choosing the shortest and fastest route the reason is not only reducing fuel consumption. A longer route means your vehicle is more prone to wear and tear which will increase maintenance costs as well. Sometimes delivering goods by sea or railway proves to be an effective choice but it might take a little long time for delivery.
Delivery Window:
While considering the factor of delivery window time the fleet managers sometimes prioritise speed over the cost of the route. It happens often when the cargo is time-sensitive or delivery window is short or the route might not be long but tolls and extra fuel consumption make it an expensive choice.
Compliance with legal restriction:
Many times the route might seem shorter, safer and faster but legal restrictions make it drop. It is important to consider legal restrictions and regulations as going the opposite can leave bad results.
For instance, overlooking laws might cause vehicle damage, fines, financial losses, damage to the reputation, lawsuits or insurance claims. Moreover, these hurdles can cause unwanted delays that decrease the company’s reliability.
Impact of technologies in route optimisation:
The latest technologies and tools are leaving a positive impact on route optimisation. The complex route planning process has become easier with these logistics' latest tools and technologies. Many new software are effectively being used in logistics including GPS, AI, Machine learning, etc.
With the help of software and the latest technologies, fleet managers efficiently get real-time updates and make quick decisions to reduce unwanted halts or delays in delivery. For instance, they can now know about road conditions, weather conditions, law & order situations, etc.
The loT – integration of Internet Things has also proven to be a revolutionary step in the logistics industry. It helps in real-time tracking of goods, vehicles, conditions, drivers commuting behaviour, etc. All of these factors are helpful to craft an effective route optimisation strategy.
Once the managers have access to the data they can quickly provide a better alternative route to the drivers and make adjustments as needed.
The collected data is also used for analysis and bringing up a better route optimisation strategy helping in dealing with potential halts and reducing travel costs.