5 Keys to Building Efficient Delivery Routes

Last mile delivery success begins with optimized routes. But threading the needle between ensuring a great customer experience and maintaining cost efficiency across the entire last mile delivery journey can be a serious challenge.

Luckily, the right best practices can go a long way. When you’re able to factor in service times effectively, predict delivery costs, reroute frequently, predict ETAs accurately, and integrate routing and customer experience, you can reduce costs and maintain control of the fulfillment process from end to end. If you can put them into practice, these key route optimization techniques will set you up for delivery success and cost-efficiency.

Are you concerned about getting the most out of your delivery capacity and keeping last mile delivery costs in check? Here’s how to get started on improving your delivery routes and boosting operational efficiency in the process. 

1. Factor in Variable Service Times

Route optimization is about a lot more than just finding the shortest routes for a given sequence of deliveries—that’s why Google Maps for trucks is usually a non-starter. You don’t just need to minimize miles driven, you also need to make sure you’re delivering at the right time and that you’re providing the right service levels to your customers. 

One of the most important keys to arriving at the delivery site at the right time is to make sure that you’re accounting for variations in service time across different types of stops. If, say, you’re delivering appliances and you have a mix of over-the-threshold deliveries, white glove deliveries, and installation services, your delivery teams will spend wildly different amounts of time at each stop.

If you treat all of these stops as if they'll take the same amount of time, you obviously risk late (or way-too-early) deliveries as these differences in service time pile up. By specifying a different service time based on the particular delivery types along your routes, you can avoid that pitfall and generate significantly more accurate delivery ETAs. Not only do you improve customer experience in this way, you also decrease the odds of missed or failed delivery attempts by improving on-time performance. 

2. Estimate Delivery Route Costs at the Planning Stage

The biggest last mile delivery costs come from driver pay and fuel usage—both of which are a function of the delivery routes you run. You want to provide the best possible service to your customers, but you need to make sure that service is profitable if you’re going to set yourself up for future success. 

The key here is to make data-driven decisions about your routes. You don’t want to keep running routes a particular way just because it’s how you’ve always done it—you want to run your routes the way you do because the numbers say that that’s the best sequence.

In other words, before you commit to a particular route, you should estimate the likely costs per route, per stop, and per case. This way, you can be sure that you’re making cost-effective decisions before you start loading goods into trucks.  

Luckily, predicting delivery costs per route or per case in the planning stage doesn’t have to be difficult. Most of the information you need comes down to expected miles driven and route time—with decent data visibility you can make this a best practice.  

3. Leverage AI to Predict ETAs

We’ve tried to keep our delivery route optimization advice relatively software-agnostic in this post, since we don’t know what solutions our readers will be leveraging to implement these routing best practices. But for this one, the software you implement to handle your last mile delivery operations is going to play a major role. 

AI is already having an impact on the supply chain writ large—though it may not be exactly the impact that prognosticators have been talking about. We’re still a long way away from autonomous supply chains and self-managing logistics, but we do have the ability to harness all the data that gets collected over the course of last mile delivery operations and turn it into something valuable. 

When it comes to delivery routing in particular, AI has the power to turn data on previous deliveries—as well as traffic, weather, and many other factors—into precise, accurate ETAs that are significantly more reliable than a human planner could generate on their own. 

The potential impact here is huge: a huge reduction in late deliveries and all the headaches they cause. The trick is to make sure that your data is reliable and easily accessible in one place, so you can give your AI tools what they need to work with. When you have a platform that can act as a single source of truth for the last mile, you can go a long way towards making that possible. 

4. Reroute Early and Often

If you’re mostly leveraging dynamic routing—e.g. if you’re a retailer servicing a new and different set of customers every week—you can probably skip this one. But if you’re a food distributor, a beverage wholesaler, or any other business that uses the same routes week in and week out for recurring delivery orders, the ability to reroute as needed is crucial to success. 

Why do we say that rerouting frequently is so important? Because even when your routes are similar from week to week, your business is almost certainly dynamic, and your customers’ needs are changing rapidly. Order mixes fluctuate, customer rosters change, transportation networks evolve—and when they do, it’s important for your route plans to keep pace with those changes. Otherwise, you’re going to be stuck making the most of plans that aren’t built to handle your actual circumstances. 

The trouble here is that most legacy route optimization software systems don’t make it easy for you to update your delivery routes as needed. They’re often cumbersome and slow, and it can take ages to make even simple adjustments to your routes. Obviously, no route planner wants to risk causing chaos, and the result is that distributors often run their routes long after they’ve lost efficiency. 

Simply put, you should reroute as often as you need to in order to service your customers in a cost efficient way. If your route optimization software doesn’t make it easy for you to do that, it might be time to upgrade.  

5. Integrate Delivery Route Optimization and Customer Experience

Or, rather, recognize that route optimization has a huge impact on delivery experience and act accordingly. Customer satisfaction is going to be impacted by whether you show up on time, and whether you’re able to accommodate their delivery needs—even when it means squeezing late or high-priority orders onto routes. If you can stay agile and ensure on-time deliveries, your customers will stick with you happily. 

That said, your overall customer experience does need to reflect what’s going on with your delivery routes. When you send customer communications—such as schedule confirmation messages, day-of-delivery notifications, etc.—they should include ETAs derived from your route optimization solution. If there are delays, your routing technology should be able to update those ETAs and incorporate that information into the customer experience going forward. 

Ultimately, you want the delivery experience to feel cohesive on the customer’s end, and combining these processes is the best way to make that happen. 

At the end of the day, these best practices can have a huge impact on how effective your delivery routes are—and thus how efficient your last mile is overall. While anyone can implement these suggestions, some technology solutions do make it easier than others. If you’re interested in learning more about the easiest way to put all of this knowledge into practice, don’t hesitate to reach out to our experts here at DispatchTrack.