The Car and Truck Fleet and Leasing Management Magazine

The Benefits of Route Optimization

October 2016, by Chris Wolski - Also by this author

Graphic courtesy of iStockphoto.com.
Graphic courtesy of iStockphoto.com.

From its days focused on moving drivers from point A to point B, routing has evolved into a sophisticated fleet function that touches every aspect of the operation from safety to customer service to the bottom line.

Subject matter experts recently weighed in on how routing has changed, the challenges still being faced today, and what the future may hold.

More Than Dots on a Map

There have been a number of advances in the use of routing from the days of “dots-on-the-map” technology in which a system could show a fleet manager or dispatcher where a vehicle was headed and that it had arrived, but it couldn’t tell if the driver was driving safely and was doing the work he or she was assigned to do.

“In the early days fleets wanted to see where the vehicles were. They weren’t doing much with that information they were just making sure that it was at the location where it was supposed to be and where it was supposed to go,” said Bernie Kavanagh, VP of North American Fleet for WEX. “When I think of routing, I think more of interactivity — prescribing how the vehicle is being used. I think the biggest advance is how people have been using the technology.”

With advances in technology, routing has become more three dimensional and dynamic.

At A Glance

Advancing from mapping point A to point B routes, today’s technology allows for optimized, dynamic routing that:

  • Takes into account variables such as real-time traffic conditions.
  • Adapted to changes in schedules.
  • Improve productivity and safety.
  • Integrates with other company systems and datasets.

“The biggest advance in routing technology is the emergence of the dynamic routing capabilities we see today,” said Colin Sutherland, executive vice president, sales & marketing for Geotab Inc. “This technology accounts for changing road conditions, weather conditions, and other valuable points of data, which are customizable based on business needs and priorities.”

This means that routing isn’t just limited to point A to point B decisions, but to the whole gamut of variables that may influence routing.

“Through the use of routing technology, companies and fleets can now see where there are school zones, road construction, and traffic delays along planned routes and then adjust for quicker navigation and reduced travel time,” added Sutherland.

Optimization has probably been responsible for the biggest advances in routing, among them eliminating the need for specialized routing personnel and hours of computer time to “crunch” the numbers and develop routes for the fleet’s drivers.

There have been positive consequences of optimization for fleet operations.

“The advancement in route optimization — where a solution loads and distributes routes and stops based on achieving the minimum miles driven — can drastically reduce fuel use, vehicle wear and tear and exposure risk, which has an impact on violations, accidents, and insurance premiums,” said Thomas Erdman, president of the Fleet Division for Azuga.

The integration and correlation of routing data with other fleet data has also been a significant advance, taking routing far beyond its dots-on-a-map days.

“There’s also the ability to take the basic routing and overlay other data points with that,” said Kavanagh. “One of the things that we see is integrating routing information with fueling information to take the most optimal route and the most advantageous fueling options.”

Fueling the optimization of routing has been the ubiquity of smartphones among most if not all of today’s fleet drivers.

“One of the biggest advances in routing is the advent of the iPhone and Android. Today they’re ubiquitous. We’ve done some good work helping every driver leverage their smartphone to route themselves to their next job in the most traffic-free manner possible,” said Rob Donat, founder and CEO of GPS Insight.

The smartphone has been revolutionary for routing and operations in general, explained Kelly Frey, VP of Product Marketing, Telogis.

“The reason the explosion in mobile technology is so important is because you can get the information easily out to the field, which makes it a lot easier to be more dynamic,” he said. “The reason we can be a lot more dynamic is that we can get new jobs out easier and get feedback from the field to improve the plan throughout the day.”

Perhaps going hand-in-glove with the ubiquity of the smartphone is that today’s dynamic solutions are available to most fleets.

“These solutions are now available to fleets of all sizes at an affordable price, which is just as important as the technology itself,” said Azuga’s Erdman. 

Being Optimal

Dynamic routing allows fleets to meet a challenging day head on.

Donat of GPS Insight refers to this type of routing as Level 4, which he said is the ultimate goal for routing. Level 1 is traditional point A to point B routing, Level 2 routing orders jobs correctly while getting the vehicle to its destination. Level 3 is multiple vehicle optimization (numbering in the hundreds or thousands) with optimal results. But it is with Level 4 routing (each level building on the previous level) where dynamic routing really comes into play.

“Level 4 — which is the ultimate goal — is the ability to have a plan from Level 3, and then all hell breaks loose, and something happens and you have to take a truck out of the mix, and re-optimize the day on the fly getting drivers to the right place in right order,” he said. “This is the next big step in GPS tracking — to couple it with work order management and route order optimization.”

Dynamic routing is, ultimately, a reflection of the realities of today’s world.

“We don’t have the luxury to schedule our interactions with the world in neat workday intervals with absolute confidence,” observed Toby Weir-Jones, direct of fleet product lines for CalAmp. “Things change, whether its traffic, or weather, or the customer cancels the service call. Optimization is all about bringing as close to real-time adaptive behavior into these decisions.”

Dynamic route optimization is just one of the many things being optimized in today’s complex operations.

“Increasingly it’s not just about the route optimization, it’s about the schedule optimization, territory optimization, etc.,” said Frey of Telogis.

Becoming Safe & Efficient

Dynamic, optimized routing benefitted fleets and the companies they serve in a number of ways, not least of which is becoming more efficient and safer.

“What’s the most expensive or dangerous mile? The mile you didn’t need to run — if I can eliminate that mile, I can eliminate the fuel used, the labor cost, and the accident — the elimination of unnecessary miles drives so many benefits — fuel savings, labor savings, productivity improvements, customer satisfaction, and it’s also the safest mile, because you’re not doing something that shouldn’t be done,” said Frey of Telogis.

Echoing Frey’s point, Donat of GPS Insight noted that efficient routing is fundamentally really about having drivers spending less time on the road.

“As long as you’re using telematics and technology to keep your drivers from driving as far or as frequently, you’re certainly going to see a situation where you have an opportunity to avoid getting into anaccident,” he said. “The fewer hours and miles someone is driving, the less likely he or she will get into an accident, and plus you have less fatigue and less suboptimal time on the road and more time you’re with the customer billing for the company.”

It’s the telematics aspects of routing that are helping to make driving safer while getting the vehicle and driver routed correctly and efficiently.

“Tools such as harsh driving alerts, speed monitoring and notifications around late starts and departures help ensure the driver gets there on time by driving safely, while ensuring dispatch can make adjustments once the schedule is in jeopardy,” said Todd Ewing of Fleetmatics.

Sutherland of Geotab credits improved safety as one of the biggest benefit of advances in routing technology.

“Driver scorecards give fleet managers complete visibility into the safe driving behaviors throughout their organization such as speeding, seat belt use, braking habits, acceleration, and hours of service,” he said. “Companies can also deliver customized driver coaching, right in the vehicle with add-ons for telematics.”

Erdman of Azuga also credits the tracking ability of routing technology with improving safety and efficiency.

“Visibility of fleets in real time has helped improve service levels and safety,” he said. “Historical reporting of activities has helped recognize safe driving and improved the information available to make driver coaching more effective.”

Sutherland added that some of the other ways that advances in routing technology have improved productivity; many going to the heart of efficiency programs that have become commonplace — but couldn’t exist without the technology.

“Routing technology has led to increased vehicle and fleet productivity by reducing idle time, engine hours, and the ability to avoid areas that are harsh on the vehicle, such as construction zones,” he said. “Optimized routing reduces the number of hours each vehicle spends on the roads, helping to cut down on overall maintenance and fuel costs.”

Optimizing fleet size is another efficiency benefit derived from advanced routing technology.

“People are able to do more with less,” said Kavanagh. “I think back in the old days if you had a fleet of 10 delivery vehicles, they all left the yard at the same time and they all came back at the same time at night and they were probably crisscrossing all day. Now you can route them. You can probably add 10-20% more work and do the same job with seven or eight vehicles, so there’s a cost savings there. Conversely, some fleets have found that they’re not reducing vehicles, but are able to add stops.”

There is one unexpected benefit from advanced routing cited by several of the experts: happier drivers.

“If you’re able to prescribe to a driver where they need to go to get their work done in the safest and most effective manner — you’ll get a happier employee, and better morale for the organization,” said Kavanagh.

Routing has also helped make happier customers, particularly for service-oriented companies that rely on making and keeping appointments, even when an appointment has to be cancelled. Thanks to dynamic routing, increasingly customers can be contacted prior to the appointment being missed.

“Customers respond much better to a phone call early in the day cancelling an appointment, than if the technician just doesn’t show up,” said Weir-Jones of CalAmp.

Frey noted that one of the benefits of dynamic routing is the ability of tightening up service windows. This benefit is evident in the trend with numerous service companies that are able to provide one-hour windows of service as opposed to the more traditional and — for the customer — less-than-optimal half-day or all-day service windows.

In addition, there has been a democratization of planning, said Frey, giving the power to schedule to the customer.

“This allows the customer to use a tool to choose the best time for them,” said Frey. “These choices have already been optimized for the route, but the customer now sees that they have a choice.”

Challenges Ahead

Even with the advances of optimized, dynamic routing, challenges remain, and one of those is the driver.

“At least until we get autonomous vehicles, we’ll be relying on drivers to adhere to the policies that we’ve set,” said Kavanagh of WEX. “With all the technology, this is where things like gamification comes into play. The ever-changing business needs is another challenge.”

Systems’ integration is one of the big challenges that also needs to be solved.

“Some of the challenges are the consequences of fleets not choosing open cloud-based systems, and, instead having silos of solutions,” said Frey of Telogis. “These tend to operate sub-optimally.”

The systems themselves also need to be flexible.

“Software systems must then balance how configurable they are versus how easy they are to use and understand for planners and dispatchers,” said Ewing of Fleetmatics.

Mapping the Road Ahead

Reflecting the automotive industry as a whole, the autonomous vehicle figures heavily in the predictions of what routing will look like in the future.

“Smart city programs will be using routing data to assist in traffic management. Autonomous driving will also advance routing technology, by focusing on how vehicles communicate with the grid and how vehicles talk to each other,” said Sutherland of Geotab. “The next step for routing is a more automated system that integrates all points of data, allowing fleets to see all aspects of changing road conditions, traffic delays, and vehicle-to-infrastructure communication in real-time.”

In the near term, Weir-Jones of CalAmp sees advantages being presented by integrating routing with optimizing energy use, particularly in the context of electric vehicles.

“Integrating alternative-energy infrastructure into routing is going to become a big thing,” he predicted. “That’s a really an important one, because all those charge points are highly interconnected, so you know who’s there, and how long they will be. All that will drive the momentum. That will clearly have an impact on routing and scheduling.”

Editor's note: This article first appeared in the October 2016 issue of Automotive Fleet.

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