By the Numbers: The True Cost of Traffic on Deliveries

By Layla Shaikley, Wise Systems Co-Founder

Everyone knows that traffic is expensive, but the real numbers are staggering. According to a recent report compiled by Inrix, “congestion costs U.S. drivers nearly $300 billion in 2016, or an average of $1,400 per driver.” For delivery fleets that must keep a close eye on margins, this cost is significant. Furthermore, it impacts their ability to offer high quality service -- unpredictability and traffic causes delays, delays scuttle carefully scheduled route plans - causing missed time windows - and the cascading delivery issues rapidly multiply the true cost of a simple delay.

Based on the Inrix report, a business managing a fleet of 500 drivers loses on average about $700,000 per year due to traffic alone. But this doesn’t include the knock-on costs, which often include:

  • Missed time windows

  • Customer refusals

  • Route re-sequencing

  • Driver and dispatcher stress, and

  • Negative impact on customer service and brand

Just as consumers use traffic apps to navigate and avoid traffic, fleets now have a powerful set of tools to mitigate the effects of traffic on their businesses. For fleets that have flexibility, dynamic routing software automatically rearranges the order of deliveries to avoid visiting customers at high congestion times. This can significantly alleviate the impact of traffic delays for fleets that can work with real-time changes.

According to a June 2016 white paper published by the Stanford Value Chain Innovation Initiative, “Dynamic routing also enables greater flexibility and helps delivery providers better respond to customers’ requests, such as a change in the scheduled delivery time. By informing drivers in real time regarding changes in the route, and by using innovations such as geofences to inform customers of a delivery, the delivery process becomes much more efficient and flexible.”

And this is where we focus at Wise Systems. We develop responsive software-based solutions that help fleet operators meet their customer commitments -- keeping them on time, on schedule, and as efficient as possible. Using real-time traffic data, our software factors in nearby traffic issues, and uses advanced algorithms to rearrange delivery routes to meet time windows while keeping an optimal delivery sequence. Fleets that can adapt to dynamic routing have new technology that they can leverage. And when fleets can’t rearrange delivery sequences, they can still take the valuable learnings on the road to plan for a better tomorrow.

In a nutshell, Wise is committed to giving relief to fleets facing the chaos of complicated last-mile delivery operations. While we can’t eliminate traffic, we can reduce the impact of traffic on businesses’ bottom lines, while mitigating some of the stress on dispatchers, drivers, and their customers.