Truck Route Optimization: How It Can Help You Win More Business

Trucking and third-party logistics (3PL) firms may vary greatly, but they all face a common challenge: bringing onboard new business so their companies remain profitable.

Competition among trucking and 3PL companies is cut-throat, especially since exclusive transportation contracts are becoming more challenging to win. It’s imperative for businesses to gain a competitive advantage to stand out from the pack and improve contract closing rates.

Investing in the best tools is one way of beating the competition. For truckers and 3PLs, a truck route optimization solution is key to achieving unmatched operational excellence. Without this tool, companies will be lost in the already crowded industry.

Here’s a look at how truck route optimization software delivers more revenue for a business.

Benefits of Truck Route Optimization Software

Make Current Clients Happy

A common challenge for 3PLs is being able to improve their services for long-term contracts. It is a given that clients, even those with long-term contracts, want constant innovation without having to pay additional fees for analysts who will explore other possible cost-cutting strategies. Likewise, clients don’t want to pay extra fees if their business needs change over time.

For example, a brand that’s adding a new distribution center or store will want to know which center should serve which stores and vice versa. The right software can help generate new strategies without overburdening clients with additional costs. A planning solution that can model various strategies will help in determining the most optimal matching of distribution centers to stores and the new fleet routes.

Make Better Use of Assets

The key to maintaining profitability is to ensure that fleets are running efficiently. Unfortunately, operational efficiency is harder to achieve given that customers now demand shorter delivery timeframes and more frequent deliveries. Carriers that fail to optimize truck routes will have a more difficult time meeting consumers' demands while keeping costs low.

An automated planning tool such as route optimization software helps reduce transportation costs significantly by identifying routes with the least time and miles driven while maximizing vehicle capacity. The software can also improve on-time delivery, as it can factor in real-time road and weather conditions.

Win More Contracts

Freight requests for proposal (RFPs) are necessary to win new contracts. Creating RFPs requires generating and analyzing massive amounts of data on product dimensions, ship-to-points, delivery volumes, and other special requirements to provide a winning contract price. Businesses that already have software generating and analyzing tons of information have an edge over others.

When optimizing truck routes, a sophisticated routing software takes into consideration dozens of factors in calculating routes with the least distance and time. It eliminates the need for number-crunching, as the software can provide the analysis in just a few minutes. Even the most seasoned or smartest transportation planner cannot match the computational power of truck route optimization software.

Many truckers and 3PLs use routing software when bidding for new projects. Without the software, companies will have a hard time assessing the core elements of the costs of a new contract. The use of the software isn’t just for bidding purposes. Once the bid is won, businesses can use the same software to manage daily operations.

Determine Profitable Contracts

Winning a new contract doesn’t necessarily translate to more profits. Many truckers and 3PLs have, in fact, regretted getting a new client because of the badly computed contract price.

Advanced route optimization software helps businesses come up with a “cost to service” analysis to ensure that the new deal is profitable for the company. Likewise, the software can also help firms determine that a specific new potential client will only tie up assets and become an unprofitable account.

Sophisticated software with strategic modeling functionality is highly beneficial, as it allows management to suggest a different strategy to prospective clients. For example, 3PLs and truckers may want to consider the strategy of not delivering on a specific day and figure out if such a move is feasible and profitable for the prospective customer. This functionality helps convert what seems to be an unprofitable contract to a winnable opportunity.

Truck Route Optimization for Higher Profits

Truck route optimization software is a must-have for 3PLs and truckers determined to stay ahead of the competition. It’s a worthy investment, as it helps businesses win new contracts, maximize their fleets, and make current clients happy.