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The Secret to Achieving Profitable Same-Day Deliveries with Dynamic Routing

Three years ago, the concept of same-day delivery was quite new. If you went to e-commerce sites to get same-day deliveries, you would be hit with a message to pay a very high ‘extra’ for the same-day delivery service. The reason for this was simple - same-day delivery was not seen as very profitable. One of the reasons was the effort required to plan highly efficient delivery routes and the cost involved in doing the same. But now as customer experience takes over price as a major competitive differentiator and popularity of fast deliveries gaining rapid momentum, businesses have little choice but to provide faster and same-day deliveries. 

While a lot of retailers and eCommerce brands were already struggling with scaling delivery operations and providing faster deliveries, the ongoing pandemic made things worse. Stay at home restrictions skyrocketed the demand for faster home deliveries of essential items. Hece, savvy businesses embraced dynamic routing tools to boost delivery operations. 

What is Dynamic Routing?

Every business sets a certain plan for the route along which the delivery lines would be set up. Dynamic routing refers to planning and building these routes from scratch so that they meet certain parameters based on the order set. Static routing, which is the opposite of dynamic routing, can result in inefficiency in terms of fuel loss, exceeding time windows and eventually, customer dissatisfaction. Dynamic routing is not set on stone. It relies on the flexibility of the order volumes and delivery timings and hence results in improved utilization of fuel or resources, less time windows and also, it can help cater to specific customer needs.

How can brands generate same-day deliveries using dynamic routing?

While dynamic routing has the advantage of efficiency, it is often regarded as expensive, which it is not considering the benefits it can deliver. Here are key ways in which dynamic routing can empower your business to generate profitable deliveries.

Machine Learning Based Routing

A machine learning based dynamic routing tool thoroughly analyzes historical data and KPIs of previously availed routes and based on that generates highly efficient and productive routes to from point A to B to C. Such a tool analyzes the routes based on weather, traffic congestion, delivery urgency, type of delivery, contents of a parcel, empty miles and so on. Hence, machine learning based dynamic routing saves both time and fuel,thereby making the deliveries more profitable.

Rerouting Routes To Mitigate Delays

While dynamic routing can help with a pre-plan of a route at the start of the delivery, we cannot completely ignore on-road inefficiencies like downtime caused by unnecessary diversions, road closures, prolonged stoppages among others. There is a possibility that the delivery executive accidentally enters the wrong street, which might end up costing time. In such cases, dynamic rerouting is possible where softwares will highlight an alternate route for the delivery agent. It also helps to mitigate any risks.

Lower Empty Miles

One of the problems with static or inefficient dynamic routes is that there can be a lot of empty miles. According to a research, 20% of miles travelled by freight trucks are just empty miles. When you accumulate the number of empty miles in each delivery, you would be surprised to find out how much fuel-loss is taking place. Fuel-efficiency is important for any business, and dynamic routing significantly shrinks empty miles by optimizing delivery routes and planning multi-drop deliveries.

Real-Time Tracking for Delivery Activities

Lack of visibility into the fleet is one of the most common issues faced by the users of traditional transport management systems. Dynamic routing tools overcome this problem by integrating predictive visibility to accurately predict ETAs and employ digital control towers to keep track of every shipment at any point in time. Such tools leverage real-time data from the largest GPS, ELD and telematics network to keep a check on the current status of all your loads, vehicles and delivery executives moving on the ground. Also, it empowers businesses to get easy alerts for exceptions and escalate tickets in real-time while enabling direct communication with drivers to prevent unnecessary breaks or delays.

This tracking facility can also be tied with customer tracking, as well. If the tracking information is shared with all the involved shareholders, it will create a sense of responsibility in the delivery executive to follow the rules and be more efficient on his timings. Plus, it acts as a communication feedback for customers too.

So, it is clear that dynamic routing can help in improving efficiency in making same-day deliveries profitable. However, as you might already see, there needs to be software integrated into the systems to ensure that you get correct data for dynamic routing to get activated. While you might be worried about the costs involved with it, the costs are actually going to fizzle out in the long-run. In comparison to the traditional delivery methods, dynamic routing is much cheaper. Modern dynamic routing softwares can integrate with your IT systems. 

Dynamic routing is the future of logistics. It can be used in e-commerce services, healthcare and even manufacturing industries. On the whole, an efficient dynamic routing ensures profitable deliveries in the long-run.

FarEye is empowering global brands to drive highly efficient delivery operations, especially at a time when the pandemic is causing massive supply chain disruptions. To know how our dynamic routing platform can help you sign up for a quick demo.

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