Automated routing, carrier diversification, data can benefit bottom line

Automation, data and the use of regional carriers can help shippers to reduce costs, improve efficiency and increase profits, according to recent white papers from logistics technology providers.

An Omnitracs white paper shows companies are continuously looking to improve shipping efficiency while cutting costs to improve profitability. Economic factors and rising fuel costs have led shippers to reevaluate their territories, routes, stops and facility locations. This has revealed backtracking and out-of-the-way stops.

Route-based shipping can help to reduce costs and improve productivity in the distribution and service industry, according to the paper. This shipping method can automate strategic planning and lead to reduced miles, lower operational costs and properly-used vehicles and drivers. This method also can improve customer service, refine distribution operations and increase profits.

A top priority is to set up new customers in existing route territories, according to Omnitracs. Companies want to serve new customers while maintaining existing ones. Redefining routes is key to achieve this; however, companies that rely on manual rerouting can find this burdensome. Automated rerouting can save time and money, the paper shows.

Mergers and acquisitions have become more common, and as a result, distributors and service organizations have an increased amount of overlapping territories and branches. Each stop comes with a cost, and determining the routes and stops that generate the most and least revenue is important for companies. Many shippers have delivered to the same accounts and the same routes for years and have not set a priority on reevaluating those routes to ensure they remain the most cost-effective and efficient. Evaluating each route and accounting for new customers, territories and branches can help to determine the routes on which the accounts should be placed and the days of the week they should receive delivery.

Route planning to determine the day customers should receive delivery can be difficult if completed manually and without the necessary data, according to Omnitracs. Shipping managers must consider customer demands, efficiency and cost. However, the day a customer wants delivery might not be the most efficient and cost-effective day to deliver. Managing these exceptions is often where distribution companies break even or lose money.

Planning for smaller accounts that are geographically out of place can be time-consuming. Managers must determine the days and frequency an account should receive delivery. The more the routing is structured, the higher the profit increase. Smaller companies in rural areas might receive delivery once a week, while larger customers receive delivery five days a week. A key step in the rerouting process is to balance employee satisfaction with customer service.

Many companies understand balancing the driver and back-office experience with customer satisfaction, the paper shows. Putting a priority on driver satisfaction is important amid high driver turnover. Yet, customer satisfaction is significant as customers keep the business growing.

Meanwhile, manual rerouting can take hours daily for months at a time, and errors still can happen. This way of operating means drivers are driving more hours for less money while the back-office staff is completing manual rerouting instead of other important tasks. And, customers are not receiving their deliveries as quickly as they are used to get them.

According to a Sifted white paper, customers are disappointed by delayed deliveries. Amazon set a high bar on delivery expectations. Even if customers don’t need a shipment quickly, they expect the delivery to be completed fast. However, cutting shipping times and paying for next-day service are expensive for shippers.

Factors that can cause shipping operations to be inefficient include using the wrong size boxes and limiting the carriers that…

Read More: Automated routing, carrier diversification, data can benefit bottom line

Products You May Like