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Beyond Truck Miles: Other Ways Route Planning Saves You Money

Beyond Truck Miles: Other Ways Route Planning Saves You Money


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Beyond Truck Miles: Other Ways Route Planning Saves You Money

6 Dec 2021

Jim Endres
Warehouse worker loading delivery van while another takes inventory on tablet.

If you’ve been contemplating purchasing routing software for your private fleet, now is the time to pull the trigger. Or maybe you have routing software, but you haven’t really explored all the ways it can enhance your transportation business.

You probably know that route planning software will save you money. In general, private fleets that adopt advanced routing software save an average of 10 to 30% in transportation costs. Some of the reasons are obvious; routing software saves you on fuel, on maintenance, and on planning time. If that isn’t enough for you, we’ve rounded up a list of little-known ways that routing software will save you money within months of purchase.

1. Driver Performance Metrics

While many drivers have complained about telematics in the cab, for fleet managers, combining telematics with your routing software boosts both products. An interesting statistic: 5% of your fleet costs are influenced by the behavior of your drivers, so you want to encourage good behavior.

Of course, accidents happen, particularly when driving is your job. But you need to know when drivers exhibit hazardous behaviors, like speeding or harsh braking. If an accident does occur and your company is found at fault, it can cost you over $75,000 per incident, and that’s on the low end. However, it’s also expensive to replace a veteran driver—about $15,000 on average—so it’s important to strike the right balance between driver incentives and disincentives.

Have a debrief with your drivers at the end of each shift, and address issues as they arise. Keep driver scorecards and offer cash incentives to the drivers who perform well on service metrics. Communicate clearly with each driver so that they know how they’re doing. Give your drivers a chance to discuss their routes and any concerns they might have. Not only will this make your drivers feel valued, but it will also help your dispatch team to operate on a continuous improvement loop.

2. Change the Makeup of Your Fleet

One of the biggest benefits of fleet optimization is that your fleet will run at maximum efficiency every day. But how much more efficient could you be if you took some of your tractor-trailers out of the mix? If your fleet runs a high number of deliveries in urban areas, where weight limits or trailer space limit the number of deliveries your team can make in a day, it makes sense for you to look at alternate options.

You could try running multi-trip shifts in smaller trucks. You could try downsizing your fleet—after all, routing software boosts efficiency at every level, so you can run more routes per week with fewer trucks. The great part about routing software is that you can run what-if scenarios and figure out the best configuration of trucks and drivers to get your operation running more profitably. For example, if you can eliminate even ten trucks from your fleet, you can save about 20% per year—a saving of over $2 million on average.

3. Run a Cost to Serve Analysis

If you don’t know your cost to serve, now is the time to find out. Did you know that advanced routing software can help you make that analysis? By using complex what-if models, your routing software allows you to calculate the exact impact of route changes on delivery costs and margins.

Maybe you’re contemplating new customers or want to make changes based on new requests from an existing customer. Whatever factors you choose, you can do the cost to serve analysis in seconds. Can you afford to base future service decisions on an estimate? Probably not. In addition, route planning software helps you determine and sell a fair price, because it gives you clear, concise cost data, which you can leverage into discussions with prospective customers.

4. Avoid Compliance Fines with Resource Management

You know how important Hours of Service (HoS) are to keep your fleet compliant. Routing software will help you maintain compliance. Aptean’s routing software assists you with ongoing resource management. It collates real-time information about your drivers’ HoS taken directly from the in-cab telematics. This is crucial because it provides accurate data for your audits.

The average fine for exceeding the 14-hour daily limit is over $7,000. Think about this. If you are still running manual routes, you could constantly be facing stiff penalties if your drivers cannot finish their routes on time. Even with a small fleet of 10 trucks, that could add up to formidable numbers quickly. But if you were using advanced routing software, you could create a DOT-compliant schedule that makes efficient use of all your resources.

5. Change the Location or Number of Distribution Centers

When you first start using your advanced routing software, you’ll see some immediate results. But you can also use it to make significant, cost saving changes to your distribution strategy. Using the same strategic modeling tools we discussed earlier, you can look at the impact of adding a distribution center or moving one.

Using your existing data on volumes and locations, the software changes parameters. This gives you an exact analysis of how the alternate strategy would affect costs and service levels. What’s more, the analysis generates in minutes. If you tried to do an analysis like that using manual processes, it would take hours.

You know that to compete in the transportation industry, you must remain agile. Aptean’s advanced route planning software gives you the data you need to optimize growth strategies.

Contact our route optimization experts to learn how advanced routing software can help you stay agile in constantly changing market conditions.

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Delivery truck on laptop screen.