Ask any fleet driver if he/she prefers driving inside the city or outside, the usual answer is, “Outside, on the highways, anyday!”. Roadblocks, traffic congestion, or unexpected accidents make urban delivery routes really challenging. If there is something that fleet drivers and fleet managers are concerned about in the last-mile delivery, it is the fuel cost.
Fuel costs have an impact on the operational costs of a truck. The ever-fluctuating fuel costs mean that logistics companies and modern enterprises need to tighten their spending on trucks.
Only one-third of the energy from a tank of fuel turns into a useful mechanical effort for wheels.- UN Environment Programme (UNEP), pocket guide for fuel-saving tips.
This stat shows just why logistics companies need to make the most out of every liter. Every percentage of fuel costs saved increases the profitability of your logistics operations.
Cost-efficient route is something beyond the shortest route. It takes into consideration all the delivery constraints like traffic congestion, turns, intersection, and many more. Identifying the most cost efficient route reduces the overall usage of fuel and thus saves fuel expenses.
Route planning software solutions offer cost-efficient routes that can save your fuel costs considerably.
Find out how route optimization saves fuel costs on inter-urban or sub-urban delivery routes.
Getting ahead with efficient routing
Have you been unnecessarily driving the extra miles? If yes, then you have to re-evaluate your route planning. Fleet drivers drive the extra miles due to inefficient delivery schedules. Such out-of-route miles can incur costs on the logistics operations.
We are living in an age of on-demand and same-day deliveries. With the multitude of complexities, fuel costs are rising steadily. Traveling on an efficient route is the only way ahead to save your fuel costs and reach customers on time.
Fleet managers mostly aim for route efficiency and cost-effectiveness for their fleet. The cost-effectiveness of a fleet depends on the traffic routes its riders drive. Driving on high traffic routes also adds up the idling costs. You need a solution that calculates all these constraints and comes up with a smarter delivery route.
How does route optimization help you plan efficient routes and reduce fuel costs?
Route optimization software provides fuel and time-efficient routes for varying delivery schedules. It auto-updates delivery routes based on the live traffic and sudden change of routes. It ensures that the fleet adheres perfectly to delivery schedules, thereby matching the estimated arrival times.
Route optimization software helps you track the performance of routes in real-time. Based on the performance of past routes, it helps you predict and strategize future deliveries efficiently.
There are some dilemmas involved in last-mile delivery. Route planning solves those confusions and gives you the most optimal route to deliver your goods. Here are those dilemmas that route optimization addresses in the last mile delivery:
Efficiency and distance
The shortest path cannot always guarantee the least fuel usage. Traffic conditions, speed limits, and road quality also determine the Miles per Gallon (MPG). Route optimization takes into account all the real-world factors that impact efficiency and ensures that the least fuel is used.
Idling time and driving time
Fleets reach a mileage of zero MPG when idle. One cannot eliminate idling, but it is necessary to reduce it to the maximum extent possible. Route optimization provides route recommendations based on your previous data of idling and driving time. It helps in minimizing idling and driving time, thereby maximizing the overall fleet efficiency.
MPG on rough and flat terrain
A route with challenging terrain uses more fuel than a flat ground route. Route optimization also considers terrains, thanks to its machine learning capabilities and provides a cost-efficient delivery route.
Reduce idling costs
Limiting excessive idling can save fleets upto $6000 per truck annually- US Environmental Protection Agency.
Idling time is the time involved in the stoppage of work temporarily. In last-mile delivery, idle time is the time a fleet driver keeps the engine running, while the vehicle is stationary. The costs incurred during this ‘idle’ time is called idling cost.
When does a fleet incur idling cost?
Idling cost occurs in different situations like:
- Unloading and Loading
- When the fleet driver is processing paperwork, either manually or electronically
- When the truck driver is using the phone
- Driver downtimes like eating, resting or sleeping
- Cooling down the interior of vehicles .
Each year an average truck idles for about 1800 hours . Also, an average idling vehicle can burn 0.8 gallons of fuel per hour. You are going to reduce $2.416 for each hour of idle time.- USA Department of Energy, and Gas prices AAA.
These statistics may sound small in isolation. But when there are hundreds and thousands of trucks running, the idling costs will multiply. Also, idling causes additional vehicle wear and tear, adding to the maintenance costs.
Idling has environmental, and maintenance costs involved in it. Fleet drivers who drive on inter urban delivery routes incur huge idling costs. With increasing demand for deliveries, the idling costs will only multiply.
Rest-period truck idling uses one billion gallons of fuel annually and costs $3 billion.- Argonne National Laboratory
Rest period idling degrades air quality. It affects the truck driver and also the people in the community. Here are the harmful emissions that a rest period-idling causes in the USA.
Why should you reduce the idling time of a fleet?
The transportation sector in the USA is responsible for 28% of total annual energy-related CO2 emissions.-Us Energy Information Administration, 2018
Reducing idling time can have a positive impact on the environment.
For every 10 minutes of an engine being off, you prevent one pound of carbon dioxide from being prevented.- Environmental Defense Fund
Actually, there are laws in many areas for idling. Failing to adhere to such rules can result in hefty fines. Idling the vehicle during traffic stops is fine. Breakdowns and unscheduled maintenance are also some of the accepted reasons.
Excessive and unnecessary idling with poor route planning can cause a significant increase in operational costs. Hence, you require a tech solution that caters to the present status of your fleet. Route optimization exactly does that.
How does route optimization reduce idling costs?
Route optimization helps fleet managers see where their vehicles stand in real-time. This helps in reducing costs incurred due to unnecessary idling.
The real-time fuel usage insights from route optimization help fleet managers to be aware of route and vehicle inefficiencies. Hence, it helps the fleet managers to manage vocational fleets traveling into the metropolitan areas.
Fighting traffic congestion
The traffic cost of the trucking industry in America alone is $63 billion. The traffic cost per truck driver is $63.70 per hour. – 2017, Cost of congestion report, American Transport Research Institute (ATRI)
Traffic congestion is a real problem for fleet drivers, and sometimes they use it as an excuse for not sticking to Service Line Agreement (SLA).
Traffic congestion adds to fuel consumption, vehicle wear and tear, and even labor costs due to driver overtime. Beyond excessive fuel consumption and travel cost, it results in delayed arrival times. The delayed arrival time creates a negative impact on the productivity of the fleet.
Traffic congestion determines the fuel spend and number of trips a fleet can make in a day. Hence, it has a direct impact on the revenue flow, thereby increasing the number of billable hours per day.
The annual cost of congestion delays and lost fuel is $160 billion. – Beyond Traffic 2045
Knowledge of traffic conditions helps in less use of fuel and reduces brake wear. Every time you stand in traffic, all you incur is the wasted mileage. Traveling in a less congested route can save the mileage costs of fuel.
Utilizing technology is the only way to reduce this wasted mileage. Route optimization helps in reducing this wasted mileage costs by coming up with less congested routes. It also ensures that the last-mile delivery operations are flexible to accommodate various delivery requests.
How route optimization helps you counter traffic congestion?
Route optimization utilizes scenario testing, historical data, and digital technology; to calculate the most fuel-efficient, and quickest route to destinations. It charts out an efficient journey plan factoring in speed limits, rush hour, and the shortest distance.
Route optimization helps you predict the routes that are the slowest and busiest. It performs thousands and thousands of complex calculations so that you have an optimal journey plan. It also identifies and predicts accurately when the quiet routes are going to turn busy.
Route optimization uses machine learning and insights from historical data. These insights provide real-time updates on traffic, taking into consideration all delivery constraints like idling time, no entry time, and so on. Also, it provides upcoming diversions and intersections to save the precious driving time of fleet drivers.
Reduce the maintenance costs of the fleet
Maintenance costs are instrumental in increasing the lifetime value of a fleet. For better performance of a fleet, you need to make mileage-related maintenance for it like oil changes, tire replacement, battery replacement, and so on.
Why is it crucial to reduce maintenance costs?
If your vehicles are frequently sidelined for unscheduled repairs, it affects your daily deliveries. It leads to a loss in revenue.These repair costs can affect your profitability.
If fleets spend lesser time on roads, their maintenance cost also reduces. This lets a vehicle stay in the active rotation before it is sent for maintenance. Also, lesser time spent in mileage-based care reduces the loss of functional time for the fleet.
Vehicle repair or maintenance is costlier compared to preventive maintenance. Reducing maintenance costs, improves your mileage consistency, thereby saving fuel costs. Driving on efficient routes reduces both the fuel and maintenance costs.
The maintenance costs depend on how a fleet travels on planned routes efficiently. Fulfilling delivery schedules on efficient routes incurs lesser fuel, thereby reducing mileage costs. Riding a fleet on optimized routes becomes easier with a route planning software.
How does route optimization reduce the maintenance costs of a fleet?
Route optimization helps you create efficient routing plans for deliveries, service calls, and pickups. More efficient routing leads to lesser miles driven, resulting in lesser wear and tear of vehicles. This lesser wear and tear of vehicles extends the timeframe for mileage-related maintenance.
Route planning enables you to spend less time on the road and lesser time on road leads to lesser exposure to traffic and safety risks. This cuts liability costs for a fleet and impacts insurance premiums positively. Lesser time on road is also a safety measure for a fleet. It is true that the miles that are never driven are the safest miles.
Route optimization helps fleet managers to contract fewer vehicles and still maintain the expected productivity levels. Fewer vehicles lead to lesser drivers, lesser maintenance costs, and lesser fuel costs. This fragmented cost reduction adds up to an overall reduction in the operational cost of a vehicle.
Logistics companies and modern enterprises want to make their deliveries economical and eco-friendly. To reach these goals, they should majorly focus on reducing the fuel cost of their fleet.
A logistics company or a modern enterprise using a route planning and optimization software can make its fleet operations cost-efficient, transparent and consistent.
The cost-efficient fleet takes the shortest route and reduces the delivery time considerably, thereby achieving customer satisfaction and retention.
Locus’ Dispatcher software provides the best-in-class route optimization support. It enables you to automatically assign riders based on vehicle capacity, skill sets, routes, and so on. Also, it has a lesser dependency on human intelligence, thus making your route planning powerful.
Locus’ Dispatcher helps you club orders based on delivery constraints and provides optimized urban delivery routes.