Reduce delivery costs with route optimization

Routing Software Reduces Costs

Direct route logistics software can help fleet management organizations save substantial amounts of money in overhead costs each year. Businesses in the transportation industry are responsible for organizing a variety of moving parts, which often makes it difficult to keep track of everyday expenditures.

The American Transportation Research Institute (ATRI) recently released a report identifying the top 10 concerns trucking professionals face in today's economy. While many issues listed are related to existing or upcoming federal policies, as well as industry-specific market conditions, the recent volatility of fuel prices is also a growing concern among many transportation businesses. In an official press release, the ATRI cited a separate survey conducted earlier this year that found fuel costs actually represent the single largest source of motor carrier costs, surpassing those related to driver benefits and wages.

How can fleet managers control overhead costs?
Route optimization software plays an important role in helping businesses limit their fuel-related expenditures. The ability to make faster, more efficient deliveries can reduce the number of trips drivers have to take each year, which can ultimately lead to larger profit margins. However, many managers are unaware of exactly what goes into creating a more efficient delivery system.

According to data compiled by Tyco International, a security systems company based in Switzerland, driving behavior and fleet management practices have profound impacts on overall fuel costs. For instance, trucks that travel at 75 mph - generally the highest speed limit in most U.S. states - use 23 percent more fuel than those that drive at a slightly slower pace of 65 mph. Businesses could save as much as $3,400 per truck each year if they maintain an average fleet speed at that level. Tyco International said maintenance costs even increase when trucks sustain faster speeds for long periods of time.

In other words, driving faster isn't always the solution to making more efficient deliveries. Rather, businesses can take advantage of automated routing software to easily plot customer locations and determine the shortest possible directions. These tools also allow fleet managers to automatically update existing route information with new data related to geographic conditions, available man hours and other external factors.

Logistics software is an essential tool for transportation organizations that want to maximize available resources to deliver goods in the most cost-effective and reliable ways possible. The flexibility of these advanced tools allow businesses to have greater visibility of all costs incurred during daily operations.