{"id":7310,"date":"2020-08-27T01:08:52","date_gmt":"2020-08-27T06:08:52","guid":{"rendered":"https:\/\/flevy.com\/blog\/?p=7310"},"modified":"2022-05-30T10:57:06","modified_gmt":"2022-05-30T15:57:06","slug":"how-route-optimizing-works-and-what-it-means-for-courier-services","status":"publish","type":"post","link":"https:\/\/flevy.com\/blog\/how-route-optimizing-works-and-what-it-means-for-courier-services\/","title":{"rendered":"How Route Optimizing Works and What It Means for Courier Services"},"content":{"rendered":"

\"\"Route optimization helps courier services to determine the most efficient routes possible for reaching their destinations, and is used in all types of courier and delivery industries, including logistics, transportation, and last mile delivery<\/a> services.<\/p>\n

One of the primary benefits of route optimization<\/a> is a cost reduction in incurred expenses from time spent traveling, including driver hours, fuel costs, and needing less fleet. It\u2019s said that advanced routing optimization software can reduce transport costs by 10\u201330 percent. This is significant for an industry where fleet maintenance costs an average of $5,000 to $8,000 per year, annually.<\/p>\n

In this article, we\u2019re going to explain how route optimization software works, and the benefits it offers to courier services, whether it\u2019s large-scale operations, or a local courier business you\u2019re launching<\/a> in your hometown.<\/p>\n

Why Not Just Use Google Maps?<\/h2>\n

Rideshare services like Uber and Lyft drivers may be able to use standard GPS platforms like Google Maps, because they are individual drivers, and are typically just using the free GPS mapping apps available to everybody.<\/p>\n

This works for the average driver, and even for ridesharing services where individual drivers are concerned, but it does not offer all the features you\u2019d want in a specialized, commercial route optimization software, such as predicting the shortest route for multiple destinations<\/a> in a hassle-free way.<\/p>\n

For large-scale industries such as courier and logistics, Google Maps API also has significant limitations on the amount of requests sent per 24-hour period, and you will end up paying for anything that exceeds the quota of your Google Maps APIs for Work license.<\/p>\n

How Route Optimization Works<\/h2>\n

In order for a courier service company to successfully employ route optimization, it must first compile a database of all of its business routes. Route optimization software will then use the provided data to predict the most efficient routes. This involves the simulation of various scenarios, based on Vehicle Routing Problems (VRPs).<\/p>\n

These VRPs will typically include, but are not limited to VRPs with:<\/p>\n