Overcoming Route Planning Challenges during the Freight Recession

Although advances in technology have helped move goods more efficiently, the decrease in freight activity over the last several months has left the market more volatile and complex than ever. There has been a surge in drivers leaving their jobs, and some fleets have been forced to downsize or close their operations altogether.

Merchandise consumption has crept back to normal levels post pandemic and the U.S. supply chain has more capacity than it needs. This swift dip in demand for the transportation of goods has created what some are calling a “freight recession.” Higher interest rates have also added extra pressure to the increasing cost of keeping idle supplies in stock. Truckers are getting less than half their 2021 per-mile peak earnings based on FreightWaves data reported by Business Insider. Operating costs also continue to rise. The combination of lower freight demand and higher costs is eroding profit margins and taking a major toll, particularly on small and private fleets.

How can carriers differentiate themselves from their competition and find the right path forward amid a difficult market? Operational efficiency is key, and for anyone moving freight, efficiency starts with planning.

Navigating the Current Environment

For transportation companies looking to rise above the current volatility, they must differentiate themselves from competitors and offer services that are reliable, timely and cost efficient. A key component that can set a company apart is its route planning capabilities – the heart that feeds into the entire system. Strategic route planning helps dictate the ebb and flow of a fleet, its drivers and freight.

The industry has been on an aggressive road to modernization, and during difficult times like the present, is when those who invest in technology and innovate are more likely to capitalize on growth opportunities. Traditional manual routing processes may not be able to keep up with the speed of automation and will lose their relevancy in the competitive landscape. The global market for route optimization software is expected to grow from USD 3.52 billion in 2023 to USD 5.45 billion by 2028, at a CAGR of 9.16% during the forecasted period (2023-2028), according to Mordor Intelligence. The demand for e-commerce delivery, streamlined processes and operational savings are a few of the contributing factors to the growth of route optimization.

Route planning solutions not only improve daily delivery performance, but they also enable the execution of the best delivery strategies, identify accurate loading docks and help anticipate barriers such as inclement weather, construction, accidents, difficult turns to avoid and more.

Demands of Route Planning

A truck route planner’s job is to find and leverage the best routes possible between two or more stops to optimize travel time, length of stay and overall costs. Today’s savviest planners often rely on route optimization software that uses advanced algorithms and real-time data to generate recommended routes based on specific parameters and constraints.

The software pulls and integrates data from various sources, including digital maps, traffic information, vehicle specifications, customer sources and more to enable fleets to make informed decisions when planning routes. Calculating efficient paths, awareness of road conditions, traffic congestion and potential restrictions also help improve fuel efficiency, minimize vehicle wear, improve delivery times and increase overall operational efficiency.

But even with optimization software at their fingertips, the daily demands of a planner and a back-office team are high, and the pace is fast. Managing multiple vehicles, driver schedules, vehicle maintenance, freight volume, detention times at facilities, gas prices and customer orders, simultaneously, requires strong organization skills, attention to detail and the ability to troubleshoot on a dime.

Truck route planning requires a specialized skill set, knowledge of local and regional roadways, awareness of traffic patterns and familiarity with common restrictions. Typically route planning starts well in advance of finalized orders and execution. However, handling a flurry of route orders is part of the job, and is much easier to handle with a route planning optimization solution.

Route Planning for All

Most large fleets are already using some kind of freight management software to automate their processes. Many are focused on advancing and fine-tuning their processes to stay on the cutting edge of the supply chain’s technological demands.

Customized route optimization solutions are also beneficial for all-sized fleets. For private fleets and multi-stop fleets in particular, data can be accessed for each local market, and route options and guidance can be personalized to support every stop, turn and delivery in an efficient and cost-friendly manner. Route planning solutions allow multi-stop fleets to optimize stops to the number of available vehicles, sequence stops in the most optimal manner, and allows for last-minute additions or subtractions when needed.

By utilizing a route optimization solution, private fleets can build customer-centric master routes, create custom driver workflows, track real-time visibility and dynamic ETAs, and more. Look for a solution that integrates with commercial vehicle navigation for drivers, as well as robust business intelligence analytics and reporting capabilities.

The Wave of the Future

A new generation of software solutions based on data analytics and other technologies are emerging and paving the path for the future of the transportation industry. These developments are already helping fleet operators find smarter routes, improve customer services and save budgets. Cloud-based platforms and fleet management solutions, in addition to route planning, are monitoring vehicles, fuel usage, maintenance requirements, drivers’ hours of service and many other aspects that are used for compliance management and reporting requirements.

These solutions offer benefits ranging from dynamic decision-making and real-time insights for drivers, to continuous planning modes that allow for planning and updating numerous routes on a daily basis, to real-time tracking and monitoring for improved visibility into each trip, to fuel reduction for changing the environmental impact. A reduced carbon footprint through reduced fuel consumption and emissions can be a key differentiator for carriers looking to improve their sustainability practices and lower their greenhouse gas emissions.

The market desires this efficiency. According to a 2022 Convoy survey, 38% of dispatchers, drivers and owner-operators feel pressure to reduce carbon emissions in their businesses — a 3% increase from 2021. The same study found a reduction of empty miles would greatly reduce the use of fuel and is a top priority for carriers. Trimming just 1% of empty miles from one long haul truck can save over 100 gallons of fuel.

While the initial investment and onboarding of a route planning and freight management solution can take some time, the long-term benefits will give transportation companies a competitive edge and proven avenue of success for the future of their business.
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Learn more about Trimble’s route planning solution, Appian, and stay tuned for new, exciting product updates in the coming months.