Optimizing trucking routes improves efficiency, saves money

Optimizing trucking routes improves efficiency and saves money (Photo: Jim Allen/FreightWaves)

The COVID-19 pandemic has made navigating the trucking industry even more complex. One of those complexities is the significant drop in freight volumes that has compounded issues within the less-than-truckload (LTL) market. Though the market saw an initial surge in volumes due to panic-buying of essential supplies before the onset of lockdowns, volumes dropped after a while, driving several carriers into bankruptcy.

“LTL companies saw that their cost per hundredweight was going up as volumes shrunk. This has forced them to figure out ways to move freight in a situation where they have fewer drivers, equipment and volumes than usual,” said Raghuram Venkatesan, director of trucking solutions at Optym. “From the route-planning standpoint, technology can be of help.”

The pandemic has carriers tackling a host of issues, including making do with less equipment, fewer drivers and reduced shifts. Venkatesan contended that carriers would be well served by providing tools for their planners to optimize routes within the available time windows. 

“Route optimization involves a lot of math and can’t be figured out manually. To make matters more complex, there are delays in the line-haul movement, when shipments are stuck in traffic,” said Venkatesan. “Route optimization software can account for all these disruptions and create an efficient route plan in terms of driver miles and driver time.”

Providing proactive and smart alerts to planners is another way to tighten operations. Venkatesan explained that communication between customers and planners is not easy today and that automating details like available drivers and equipment will help improve route suggestions. Machine-learning algorithms can leverage such data to accurately calculate trailer utilization and help planners add more crates — ultimately reducing empty miles. 

“Traditionally, in the LTL world, routing is usually done by dividing the trip into geographic areas based on ZIP codes. Drivers are then assigned geo-areas, depending on the volume of freight available. Dynamic routing can improve efficiency here as it breaks free from such geographic boundaries and creates highly optimized routes spanning multiple zones,” said Venkatesan. 

Interest in route optimization tools has seen a steady increase in the trucking industry, thanks to the e-commerce boom that led to a surge in freight volumes over the past decade. That said, these tools do not aim to replace planners but rather empower them to work more efficiently. 

“Route optimization tools bring about a shift in planners’ mindsets. By automating planning processes, planners can now focus on improving routes further based on their tribal knowledge. In a way, the system is helping them get better at what they do,” said Venkatesan. 

On the other end of the spectrum, these tools help customers gain clear insights into their freight’s estimated time of arrival (ETA). Calculating a truck’s ETA is complex, as it needs to account for stops, the time a driver takes at a stop, and the time it takes to drive from the point of origin to the customer’s location. Machine-learning algorithms can deduce ETAs based on historical driver behavior data, providing customers a better estimate of when their freight will arrive. 

An added advantage of route optimization software is that through digitalization, it removes the need for paper documentation for route planning. Apart from being environmentally friendly, such tools also reduce interpersonal physical contact — something of great importance post-COVID.