Route Optimization for Third-party Logistics Operators: Making your Logistics Operations Economical

Imagine a company in Mumbai wants to ship its products to California. This company does not have its own vehicles or transportation. What does it do? The company outsources its operations to a third-party logistics operator. This third-party logistics provider transports goods from one location to another. 

Third-party logistics operators conduct logistics and transport activities outsourced by companies operating under different industries. They are responsible for many functions like 

• Picking orders
• Packing
• Inventory forecasting
• Order fulfillment
• Packaging
• Freight forwarding, and so on. 

How can route optimization help third-party logistics operators? 

Most third-party logistics (3PL) companies deal with thousands of orders every day. Manually planning these orders can add up to costs and delay deliveries. The best way to multiply transport and logistics efficiency is route optimization.   

Route optimization provides the fastest, shortest, and cost-effective routes for delivery vehicles. It systematically and consistently helps fleet managers improve their customer service. 

Here’s how route optimization for third-party logistics operators can solve logistics problems in modern supply chains:

Pain point # 1: Increasing logistics costs

The term optimization means doing more with less resources, while sustaining efficiency at the same time. Today, the global supply chain is becoming complex and route optimization can help simplify it. 

How does route optimization reduce costs effectively? 

AI-based route optimization software cuts down the costs by helping fleet drivers reach the right customers at the right time. Its smart vehicle routing algorithms can reduce operational costs in logistics in different ways: 

• Prohibits the exposure towards violation, traffic, and safety risks. Hence, it reduces expensive liability costs like insurance. 
• Efficient routing helps in traveling shorter distances, thereby reducing fuel costs.
• Lesser time spent on the road leading to a reduction in vehicle maintenance cost
• Reduction in all the aforementioned costs leads to an overall reduction in operational costs. 

Pain point # 2: Transportation Delays 

The transportation problems that third-party logistics face: 

• Traffic congestion 
• Weather  
• Road condition
• Vehicle capacity and so on

How can route optimization software speed up deliveries? 

You may have 1000 orders to deliver on the same day, out of which 100 might be clashing. If you hire people to solve these manually, your operational costs will rise. But using a route optimization software can automate your route planning, thereby saving money. 

8 Factors to Consider When Choosing a Vehicle Route Optimization Software in 2021

A route optimization software provides details on real-time delivery status and Expected Time of Arrival (ETA). It automatically adjusts and allocates the accurate ETA, while optimizing routes for other delivery constraints like traffic, congestion, etc. Also, it provides alternative delivery routes for drivers in times of unexpected traffic delays. 

Pain point # 3: Burden of coordinating multiple tasks

To ensure smooth operations in third-party logistics companies, one needs  coordination between fleet managers, dispatchers, drivers and so on. When dealing with thousands of orders, manual coordination can cost your business heavily. With route optimization solutions, third-party logistics operators can handle multi-faceted coordination. 

How can route optimization solutions help third-party logistics companies coordinate multiple tasks? 

Route optimization software requires a clear input of tasks from the dispatchers on delivery. This input will help drivers deliver the consignment and receive an invoice for it. Also, it can make a huge difference in delivering the right goods at the right time and right place. 

Pain Point # 4: Shortage of Delivery Agents

The number of on-demand deliveries is constantly rising.  However, there is a shortage of delivery agents. The shortage of delivery agents has given rise to problems like delays in delivery, loss of productivity and increase in work hours. But multi-stop route optimization can help you solve this effortlessly. 

How does route optimization solve the shortage of delivery agents?

Delivery agents are a crucial component of the logistics industry. Increasing human effort definitely comes with huge costs. Hence, route optimization is the sole alternative here. It benefits 3PL companies in different ways:

• Maximizes the number of drops and completion of more deliveries
• Shows possible stoppages and planned routes
• Limits the work hour of the delivery personnel
• Offers proper meal breaks to the delivery personnel 

Pain Point # 5: Delivery Options are Diverse 

To become customer-friendly, you must become delivery-friendly with customers. If you should be delivery-friendly, then you have to cater to the diverse customer needs for delivery. There are different preferences for customers in terms of delivery. 

Home delivery is not a simple process, as you handle varying delivery preferences at the same time. Route optimization can make it simple to handle. 

How route optimization can help you handle diverse delivery options? 

If you wish to cater to these diverse delivery options, then you need a comprehensive order fulfillment system. An order fulfillment system that can help you identify the current status of every product in the delivery process.  Route optimization benefits your diverse delivery scenario in the following ways:

• Enhanced visibility of the entire shipping process from dock to doorstep 
• Real-time reporting and constant optimization after placing the order
• Improves the experience of customer assistance 
• Identify and analyze affordable delivery options

Conclusion

Increasing human dependencies is killing the efficiency in logistics. Get Locus’ route optimization software and enhance your customer experience effectively. 

Locus’ Dispatcher software is a robust and sophisticated route optimization tool. It benefits your route planning process in the following ways.

• Flags and autocorrects the wrong addresses into accurate geographic coordinates.
• Handles the on-demand orders and scheduled orders optimally. 
• Automated recommendation to allocate vehicles based on delivery constraints like speed, traffic and many more.