The continued rise of the e-commerce industry and the growing demand for same-day shipping (or efficient delivery services) has posed both challenges and opportunities for businesses of all sizes. It has also pushed businesses to consider their options in terms of providing local delivery services for their business. In a State of Logistics Report published in Forbes, it was revealed that the cost of the logistics industry was estimated to be worth $1.6 trillion in 2019. In the US alone, the cost of logistics increased by more than 11%.
This is very important information to consider given that a lot of small businesses have relied on delivery and logistics services to maintain business. Following the Covid restrictions, many consumers have opted to shop or order goods from home. This makes logistics services more valuable than ever before. But even before the pandemic happened, this trend was already brewing – the pandemic only aimed to accelerate that.
How do you compensate the rising cost of logistics with improving your bottom line? After all, your goal as a business is to maximize profits. Any aspect of your operation that enables you to attain efficiency is one step closer towards that goal. This is why employing route management software might be the secret that you are looking for.
How Does Route Management Software Improve Your Bottom Line?
Whether your operational budget is getting tighter every year or you simply want to see an improvement in your bottom line, route management software can help. It starts by reducing the cost of your operation. The use of this software is not just about increasing the numbers of deliveries or orders fulfilled, it is about increasing efficiency in all aspects of the service.
With the use of the right software, you can see an increase in ROI through the following methods.
1. Limit downtime and errors
Businesses deal with a complex set of variables when fulfilling an order and getting it ready for delivery. For example, you need to determine the inventories, work orders, size and capacity of your vehicle, fuel consumption, dispatch times, work hours for the driver, and the delivery window for your customers. Needless to say, there are a lot of areas wherein it can go wrong and you can mess up the deliveries.
By employing a software for route management, you can streamline all of these processes. You simply have to input the variables into the system and it will allocate the vehicles to be used for delivery and suggest the most efficient route plan. With the route plan in place, you can reduce waste of your business resources and prevent delays.
2. Reduce time and distance traveled
When it comes to making deliveries, your goal is to reduce the time spent on the road so you can fulfill your deliveries in the soonest possible time. The best software can provide route optimization so you can achieve the shortest possible route for each delivery. It can even design a route that will optimize the delivery sequence so you can fulfill more deliveries in less time. Any amount of time or distance traveled that you reduce can add up in the long run, which also means more savings for your business.
Another essential feature that is offered by a software designed for route management and optimization is the traffic. This software can predict traffic conditions and take that into account in the route planning, as well.
3. Save on Fuel
The ability to save on fuel is where the majority of your savings is going to come from when it comes to making deliveries. Fuel costs are rising by the day; you can aspire to cut down on your travel time to save on fuel costs, too.
The use of route optimization tools is designed to minimize the number of stops you make. When there is less idling involved, it means you are reducing the amount of fuel wasted. It might not be significant enough if you consider it on a per-delivery basis but it will eventually add up.
4. No More Third Party Services
The use of third-party delivery services to fulfill your orders for you is where a huge chunk of your profits goes to. When you employ your own local delivery service, you can boost your bottom line because you no longer have to split your share of the profit.
By keeping your deliveries in-house, you have better control of your operational expenses. It also means that you can regulate the standard of service that you provide your customers. It is a win-win situation for you and your clients.
5. Less vehicles needed to operate
If you have to fulfill a large number of orders and deliveries, you need to operate a fleet (two or more vehicles) to cater to your clients. However, implementing the use of a route management software can significantly reduce the amount of vehicles you have to operate.
By using the route optimization feature, you can perform more deliveries on any given day. This means that you can also significantly reduce the amount of vehicles needed to fulfill those orders. Every vehicle can cover the maximum catchment area on every delivery schedule.
The reduction of vehicles that are required to provide delivery services does not only translate to savings on fuel costs. It also means that you can save on the maintenance costs for those vehicles.
Key Features to Look For
Efficient route management software clearly provides opportunities for your business to grow. It also leads to customer retention because you can deliver a better quality service to your clients. The secret to success with using this type of software is to identify the features that will bring about those benefits.
- Automated map planning so you can identify the most efficient routes
- Live tracking of deliveries and real-time updates to clients
- Route optimization to reduce mileage and ensure on-time deliveries
- Real-time modification of route to adapt to any changes on existing routes (such as traffic jams, road accidents, etc)
- Analytics to improve your long-term route planning
Are you ready to reap the rewards of implementing this type of software for your business? Investing in software is not a guarantee for success. It’s about how you maximize the features available and use it to streamline your services to your clients.