4 Ways Route Optimization Makes You More Profitable
What is route optimization?
Logistics companies are always trying to figure out the most economical ways to deliver their parcels on time. Route optimisation is this process of finding the most cost-efficient route—and it is much more than just finding the shortest distance.
How can route optimization help your business?
The benefits of route optimisation go beyond the immediate operational cost savings of delivering your parcels in the quickest way. The more lasting effects of route optimization is a chain reaction that improves your business in several ways.
#1 Cost savings in terms of fleet, headcount, and warehousing
Having optimized routes increases productivity and reduces the amount of resources used for each delivery, leading to cost savings.
• Lower fuel costs
due to less time spent on the
road and shorter distance traveled
• Lower maintenance costs
due to reduced wear and tear on your vehicles
•Lower rental/capital expenditure
because each vehicle can now handle more jobs. You can now maintain a smaller fleet size
• Lower manpower costs
due to fewer overtime hours needed
• Savings on additional headcount
that would otherwise be hired to scale up and expand your business
• Lower rental/capital expenditure on facilities
because with each parcel spending less time in the hub, you will need a smaller facility at any one time
• Lower maintenance costs
to maintain smaller facilities
#2 Satisfied customers who are loyal to your brand
With your routes optimised, you will have higher on-time delivery rates and achieve higher service levels. These result in satisfied customers who are loyal to your brand.
Loyal, happy customers impact your bottom line in a few ways:
Loyal customers serve as your advocates. They will recommend you to their friends and bring in more business through word of mouth.
Higher lifetime value.
Happy customers will come back repeatedly and spend more on your products and services, and even your related brands, because they trust your brand.
#3 Happier workers who put in their best work
Route optimization results in higher productivity, which translates to less stress, lower levels of fatigue and higher levels of well being for your workers.
At the same time, route optimisation also improves the safety for your workers by planning safer and smoother routes by taking into account inclement weather.
With their well being and safety taken care of, you will have a happier workforce that will do their best for your company.
#4 Increased capacity to grow your business
The capacity freed up due to more productive workflows does not have to sit idle. You can use the extra capacity to break into new markets that are potentially more profitable.
Explore new business segments within your industry. For example, a last-mile logistics company can towards an end-to-end logistics business.
Serve a new industry. For example, the increased capacity could allow you to expand into a booming sector like ecommerce.
Move into a related and synergistic area of business. For example, you could start offering a one-stop solution including design and printing of packaging materials in addition to picking and packing.
Getting your routes optimized
Many companies out there offer route optimization. But how do you choose the right one?
The best solutions take into account a comprehensive list of factors that may affect your deliveries.
They employ AI and machine learning to work through massive data sets and identify trends that humans cannot. They gather intelligence from across various sources—internal and external—to inform your analyses.
Some, like Quincus, also employ powerful geocoding technology to help you cope with the disorganised addresses and complex geography prevalent in Southeast Asia.
If you’d like to understand more about how route optimization can help your operations, please feel free to reach out to email@example.com. We are always happy to chat!