What Is a Route Optimization Algorithm?

Efficiency is a must for all logistics companies. Even small inefficiencies, like traffic delays, add up to more significant losses in time and money. With tighter deadlines and greater customer expectations, it’s no wonder why more companies are turning to technology to address performance gaps.

Route optimization software is a time- and money-saving technology that analyzes real-time data and determines the most efficient routes. However, it’s important to understand how route optimization algorithms work and why they’re such a powerful addition to your fleet. In this guide, we’ll discuss how these algorithms work and why every fleet should leverage a route optimization algorithm.

In this article:

• How Algorithms Work
• The Perks of Using a Route Optimization Algorithm
• Maximizing Impact with Optimized Routes
• Frequently Asked Questions

How Algorithms Work

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“Algorithm” might sound like a fancy technological term, but algorithms are far from new. In fact, people have used algorithms since ancient Mesopotamia. An algorithm is simply a sequence of instructions a person (or machine) follows to solve a problem.

Logistics companies use algorithms to find the best possible routes for their drivers. Route optimization algorithms take several factors into account to do this, including:

• Driver history
• Vehicle load
• Traffic conditions
• Fuel consumption rules

The result is highly optimized routes that keep your business productive and profitable.

You could calculate these routes manually following the same algorithm, but AI-powered software like the Wise Systems delivery automation platform does this in the blink of an eye for all your routes. At scale, that leads to improved efficiency and lower expenses. Book a demo today to learn more!

The Perks of Using a Route Optimization Algorithm

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Algorithms aren’t new, but route optimization algorithms are. While some logistics companies still build routes manually, that’s a recipe for bottlenecks, delays, and poor customer experience. Embracing route optimization algorithms comes with many benefits, from improved employee performance to greater customer satisfaction.

Lower Costs

Route optimization algorithms help drivers complete their deliveries with the shortest amount of driving possible. That means your drivers travel fewer miles, reducing fuel usage. With fuel costs currently on the rise, this could save you hundreds of dollars or more in fuel costs each week.

Optimized routes also put less wear and tear on your fleet. You may not see this benefit initially, but you’ll notice that trucks on optimized routes will likely need less maintenance in a few years.

Greater Customer Satisfaction

Route optimization software like Wise Systems updates customers as your driver completes their route, providing more accurate delivery time windows. With this setup, customers receive near real-time updates on delivery status, providing more transparency and building trust in your delivery processes.

Improved Driver Performance

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Delivery drivers are the unsung heroes of the logistics industry. They work long hours and work hard to support your customers. But long, inefficient routes contribute to driver fatigue, making them more likely to make mistakes — and even get into motor vehicle accidents.

Route optimization algorithms help drivers complete their deliveries in as short a period as possible, helping your team stay safe and alert. Plus, this software also considers safety factors and helps drivers avoid dangerous areas (like wrecks) and high-traffic areas.

Better Resource Management

Whether you have a small fleet or a large one, how you manage your vehicles can have a tremendous impact on profitability. Route optimization algorithms ensure you use each vehicle to its fullest potential. This technology helps you avoid unnecessary trips or underutilizing vehicles, making sure every vehicle in your fleet delivers value.

Your employees will appreciate the benefits of a route optimization algorithm, too. It better distributes work among drivers, ensuring no one is too overloaded.

Maximizing Impact with Optimized Routes

Tune in to our latest Feature Spotlight to discover how simplified route visualizations help you make decisions more quickly. Schedule a demo with us today to learn more about Route Planner from Wise Systems here! https://t.co/dMPjyYSEZv pic.twitter.com/AfKpRXJkyq

— Wise Systems (@goWiseSystems) April 10, 2023

Route optimization algorithms are the future of logistics. They not only reduce costs but also improve driver safety and drive customer satisfaction.

Route optimization is key, but that’s just one piece of the puzzle. Wise Systems optimizes every aspect of your last-mile operations, from dispatching to performance management. Schedule a demo today to plan airtight routes that enhance safety, boost customer satisfaction, and increase profits.

Frequently Asked Questions

How does route optimization software handle last-minute changes or urgent deliveries?

Last-minute changes happen. Route optimization software is flexible enough to regenerate route information based on real-time inputs, like cancellations or urgent requests. Dispatchers also have the freedom to manually adjust routes as needed.

What factors does the route optimization algorithm consider when planning routes?

It depends on your business goals, but most route optimization algorithms consider data points like:

• Delivery windows
• Traffic
• Road closures
• Vehicle capacity
• Driver schedules
• Customer requests

How much does it cost to set up route optimization software?

Route optimization software costs depend on your fleet’s size, additional features, and route complexity. The good news is that optimization software quickly pays for itself by reducing fuel costs.