A Comprehensive Guide on AI Route Optimization Software Development

Updated on Apr 26th, 2024

A Comprehensive Guide on AI Route Optimization Software Development

With the advent and growth of the eCommerce industry, both the opportunities and workload for transportation and logistics companies have increased. To remain competitive, they are now required to make deliveries in the shortest timespan possible while keeping the users updated with the latest status of their orders. Furthermore, to ensure quick deliveries, they need new tools to manage the fleet and drivers’ schedules for optimal utilization of time, as well as plan routes with optimal discretion. All these needs can be fulfilled with just one solution- AI route optimization software development. But before we get started with the development process, it’s important to know more about the software’s functionality and its various benefits.

  • The need for route optimization software is increasing with the expectations of customers from the eCommerce market. 
  • Route optimization is finding the optimal route for the fleet to ensure quick deliveries. 
  • Most modern route optimization software programs can schedule huge fleets for optimal outputs. 
  • Apart from improved customer experience, route optimization software benefits the logistics industry by reducing operational and fuel costs.

What Is Route Optimization?

Route optimization is a planning technique to find the most efficient routes for fleet operations to optimize the costs involved and improve productivity. It’s noteworthy that route optimization doesn’t concern simply with the shortest distance between two locations. To truly optimize which route a logistics company or the transportation department of a retail organization should take, many factors, like multiple deliveries and pick-up locations, vehicle capacity, business constraints, etc., need to be considered.  

Since evaluating all these data points can quickly become a laborious task, building custom route optimization software through AI development services becomes the ideal solution for the company. The software can plan sequences of stops, find the shortest routes that cover all of them and manage daily operations to ensure that both the transportation assets and drivers perform optimally. The software can also work on either standard or dynamic routing methods. The former would take into consideration all the information before planning the route, and the latter can use dynamic data like real-time traffic updates.

Traditional Vs. AI Route Optimization Software

Traditionally, route optimization has been performed in different siloes, meaning the administration would pick the best route based on information like different touchpoints and distances between them, drivers’ schedules, and availability of transportation vehicles. Since, in this approach, the administration does not take into consideration external factors like traffic and parking spaces at the destination, the drivers had to implement optimization techniques on their own end. Clearly, this approach is not effective, and since it’s manual and reactive, not efficient either.  

This is where route optimization software enters the picture. The software, with its computational capabilities, can take into consideration multiple factors and still present results almost instantaneously. To function thus efficiently, the route optimization software has to use applications of AI in logistics and transportation and its various subdomains. With neural network applications, the route optimization software can generate optimal fleet schedules based on drivers’ availability, vehicles’ capacity, the distance between multiple deliveries and pick-up locations, and market regulations. With Machine Learning based predictive analysis, the software can foretell which route would be most beneficial considering the usual traffic trends, stoplights, speed limits, delivery time on regular locations, and even real-time data from traffic congestion systems.

By processing so many variables at any given time, the software can more accurately predict ETAs for every delivery and thus create the most efficient fleet schedules for optimized use of resources and cost savings.

logistics software development

Benefits Of AI-based Delivery Route Optimization Software

Benefits Of AI-based Delivery Route Optimization Software

Route optimization has various benefits for the logistics and transportation industry, including operational cost reduction and improved productivity. Here are some of the other benefits of AI-powered route optimization software. 

Reduced Cases of Late Deliveries

Meeting delivery expectations is one of the most definitive and yet most difficult achievements for logistics businesses. From unpredictable weather and traffic conditions to maintenance of cargo and inventory, there are so many variables involved that any change can snowball into major delays in delivery. This is why a system that can ensure timely deliveries and reduce the occurrences of late deliveries to rare exceptions can prove to be a game changer. An AI-based delivery route optimization software can analyze historical data to find the ideal route and accurately predict the estimated delivery time. This software can also provide real-time updates to the users to further improve their expectations with the delivery, even in the case, it does get delayed. 

Enhanced Fleet Utilization

One of the greatest challenges for logistics & transportation companies is optimizing the available fleet’s usage. More often than not, they either underuse or overuse the fleet. This increases either repair costs or operational costs. As a result, they fail to meet their optimal net revenues resulting in slow growth and scaling for the business. Route optimization software solves this problem by accurately calculating the capacity and routes of the entire fleet and then organizing their route for maximum savings. With the software, fleet managers can consider and balance the workload and find the ideal routes to complete maximum deliveries in the shortest time. 

Fuel And Cost Savings

By utilizing fleets more responsibly and optimally, logistics businesses can save tons of resources and the costs associated with them. Optimizing routes can save costs on many tiers. From saving on drivers’ remunerations by employing them on the ideal paths to cutting fuel costs by letting the vessels travel only the shortest routes, route optimization software benefits logistics and transportation companies on multiple levels. Moreover, by only always driving on the routes that face the least traffic delays, vessels can be saved from wear and tear, prolonging their lifecycle and minimizing the repair expenses. By finding the right route for maximum deliveries, logistics companies can also minimize the delays and the consequent involvement of other vessels.  

More Accurate ETA

As mentioned above, by always picking the shortest routes and navigating through heavy traffic jams, logistics companies can easily reduce the cases of late deliveries. What’s interesting here is that even though route optimization software can minimize delivery time, it can also assist users in managing rare cases of late deliveries. For route optimization software to function optimally, they need to collect real-time data from various touchpoints. Now, this concurrent data can be utilized to map the exact location of a vessel and the orders it is carrying. Meaning by the simple integration of an order management system with the route optimization one, companies can offer an accurate ETA to the users to set their expectations right and keep them informed on the latest status of their order. This, in turn, will also reduce the number of delivery-related queries from the users, eventually minimizing the load on the support department. 

Improved Safety

Route optimization isn’t limited to mere quick deliveries of orders. All the data the software collects and analyzer to meet its primary function can also be used to ensure better safety protocols. A logistic software development company can be hired to custom-develop route optimization software with an algorithm to minimize the left-turns and U-turns. This will not only help drivers complete the route more safely but also ensure they reach their respective destinations quickly avoiding the driving and traffic delays caused by such turns. 

Better Productivity

Logistics companies looking for more elaborate enterprise solutions can expand the functionalities of their route optimization software by embedding it with features to support productivity optimization. With smart sensors and cameras, the administration can monitor the driver’s performance. Such a system can assist drivers in improving their driving skills. For example, they can alert them to the wrong way of using brakes and hard-cornering and improve their deceleration and acceleration practices. This will not only improve their productivity to further reduce the delivery time but will also prolong the lifecycle of the vessels by reducing wear and tear. The data thus collected by such a smart system can also be used to appraise the drivers. This can then automate an unbiased reward system among drivers that encourages them to perform better.  

Proof Of Delivery

An AI-based route optimization software not only streamlines the delivery networks but also ensures better and more reliable customer service. By establishing edge devices on various destinations and touchpoints, the proof-of-delivery feature can also be offered. This automated system will save drivers time and the company operational costs in generating manual proofs for delivery of the cargo. What more? By digitizing the entire system, logistics companies can even replace the paper-delivery receipt system with a digital one, where an automated entry can be made into the system as soon as the designated order reaches its next touchpoint. This digital record is far easier to manage and organize and way harder to manipulate in case someone tries to tamper with it.  

Increased Revenue Per Driver

The route optimization software can help you plan and manage your resources better. It can analyze different drivers’ schedules and then plan the relay points better. Not only that by simply performing its major function, finding the shortest route with minimal hurdles, logistics and transportation companies can ensure that drivers’ operational time is not wasted on unnecessary long routes or in traffic jams. This way, they can better plan their schedule to ensure optimal earning for the hourly wage they pay.

route optimization software development

Route Optimization Software Development Process

Route Optimization Software Development Process

Even though the primary function of route optimization is simple, to find the best route from one point to another, it’s easier said than done. It requires real-time updates from various data points and then restructuring of jobs to finalize the ideal route for every vessel and schedule for every driver. This is why route optimization software development requires a sophisticated approach, as is described below- 

Analyze The Requirements

The foremost step in developing route optimization software is to analyze the company’s requirements. Does your company only need software to find the shortest route between different delivery locations? Or does it want to find and change the path as and when there is a traffic jam detected on the chosen route? The company may also require drivers’ scheduler in the route optimization software, and some may require to add safety protocols compliance to them. As such, they need to have a clear understanding of their requirements and the opportunities they want to explore, and the budget they want to shell out for it. 

Define Core Features

Once the department has finalized its requirements and the functionalities expected from the software, it can start defining its features for route optimization software development. Some of the more common features a logistics company would want from route optimization software are- 

Route Selection

This is the primary feature of route optimization software, to select the route with the shortest delivery timeline. This feature would be there in your software, regardless of whether you want advanced features like driver management and real-time traffic updates on it. 

Order Planning

A logistics company has to deal with a multitude of orders every hour. As such, to ensure that the route optimization software functions as expected, it needs to have a segment to plan orders. This would involve the source and destination points for the given order and the other orders with destination and sources from the vicinity. 

Driver Management

To optimally plan a route, planning a schedule for drivers is essential. Drivers need to have a clear schedule with no overlapping at all. They should be given sufficient brakes and have their journeys planned to avoid burnouts as well as long stopovers. The route optimization software can also be developed to help appraise drivers’ performance to encourage better productivity. 

Fleet Scheduling

Every vessel in a fleet is responsible for shipping many orders in one trip. As such, it is important to schedule the fleet as per the order schedules. Moreover, the volume and handling requirements of every order also have to match the capacity and maintenance of different containers. All these details can be too much for manual analysis to schedule the fleet for optimized delivery. This is why an integrated fleet scheduling feature is important for route optimization software. 

Also Read- What is Fleet Management Software and Why opt for it?

Real-time Tracking

This is a more advanced feature, which requires technologies like IoT, edge devices, and cloud computing for route optimization software development. The software can gather real-time data from warehouses through RFID readers and tagging systems. For real-time traffic updates to optimize the route selection in real-time, the software can easily be integrated with various navigation and traffic management software. 

Build A Team

Since the route optimization software development process requires skillsets in various technologies, it is important that you hire a team for all the roles. For a basic version of the software, you will need logistics software developers, project managers, QA engineers, AI developers, and UI experts. For a more advanced version, you will need services from IoT developers who will integrate the system for real-time updates. Other than that, for more reliable route planning, you will need data skills and thus have to hire data analysts and engineers. 

Maintenance And Update

Once the software is developed, you can deploy it on responsible servers. The administrator will definitely need the admin version of the software. The drivers, too, will need a mobile version to help them see their schedule and navigate effortlessly. The software also needs to be integrated with the online website of the logistics company to offer real-time updates and more accurate ETAs to the users. As such, so a proper deployment, maintenance, and update strategy need to be there in place, in order to facilitate the appropriate deliverance of the route optimization software development process.

route optimization software development

Wrapping Up!

Logistics and transportation companies constantly have to struggle with the ever-increasing expectations from customers. The market competition is making it difficult for them to meet the high demands of customers, who now expect everything delivered to them in the shortest imaginable time. This in addition to the ever-increasing fuel costs and deteriorating operational conditions, makes situations worse for logistics businesses. As such, if they find a one-stop solution through route optimization software, they can easily gain a huge competitive advantage through minimal investments. 

Transportation companies can hire software development services to custom-build such delivery route optimization software that optimizes their route planning processes to achieve maximum productivity and cost savings. Since such software would require real-time updates to function properly and integration to organize and plan the route optimally, it is important that you find your technology partner carefully.  

You should look for skillsets in development, IoT, blockchain, and AI/ML. Such a company with adequate and trackable experience in the transportation industry will fit all your requirements. Matellio, with its decade’s worth of experience and talented pool of developers, is one such match for you. Our experts will even offer you a free consultation to create a feasibility and development plan for your project, along with a free quote. All you need to do is fill up this form, and begin the journey of your route optimization software development right away! 

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