What are the most effective ways to optimize transportation routes and costs?

Google Maps. Love it, love it, love it!! Oh, it only looked like a short distance on the map! Google Maps doesn't take into account the max speed of HGV's, topography, rush hours, restrictions ( environmental and suitability for vehicles ) and diversions. If you do want a good route planning you have to assess the route in person, driving it and look at all aspects of it. Listen to your team of drivers. They are the once on the road for you, everywhere and every day. Not all vehicles are suitable for the same route!

I have opportunity to work with a situation where the customer needed to improve their route performance and at the same time reduce their logistics transportation. We did analyzis throught big data and google maps where it was possible to calculate all the target destination, transportation time and optmize and propose a new route throught this data

One of the first steps to optimize transportation routes and costs is to collect and analyze transportation data. This includes data on demand, supply, capacity, service levels, costs, and performance. By using data analysis tools, such as spreadsheets, dashboards, or transportation management systems (TMS), you can identify patterns, trends, and opportunities for improvement. For example, you can compare different scenarios, such as changing modes, carriers, or routes, and evaluate their impact on cost, time, and quality.

Compare fuel economy of routes as well as distance. Topography and weather can have significant impact on choice of best route.

The above indicators are all important in the planning. It all comes down to: - picking the right driver and vehicle. - Knowledge of her/his driving hours and the driving regulations. It doesn't help if she/he has done 35 hours driving, of the weekly 45, in the past 4 days, when the trip requires 15 hours driving over 2 days. - Has the diver local knowledge of the route? - How good is the driver's timekeeping? - Is the vehicle fit for purpose and reliable? This could go on and on.

Optimizing routes with the right fleet management software is crucial for efficient operations. In addition to the mentioned benefits, I'd like to emphasize the importance of leveraging advanced algorithms and data analytics in real-time route optimization solutions. These technologies can adapt to changing conditions, like unexpected traffic or weather disruptions, instantly recalculating the best routes to minimize delays and maximize resource utilization. Furthermore, integrating predictive analytics can help anticipate future demands and proactively optimize routes, making your logistics even more agile and responsive.

Another way to optimize transportation routes and costs is to implement routing optimization. This is the process of finding the best sequence of stops and paths for each vehicle or shipment, taking into account various factors, such as distance, traffic, fuel consumption, customer preferences, and delivery windows. Routing optimization can help reduce mileage, travel time, fuel costs, emissions, and driver fatigue. You can use routing optimization software, such as Google Maps, or specialized routing algorithms, such as the vehicle routing problem (VRP), to generate optimal routes.

A third way to optimize transportation routes and costs is to negotiate with carriers. Carriers are the companies that provide transportation services, such as trucking, rail, air, or ocean. Negotiating with carriers can help you secure better rates, discounts, or incentives, based on your volume, frequency, or loyalty. You can also negotiate service terms, such as transit time, reliability, or flexibility, to ensure that your transportation needs are met. To negotiate effectively, you need to have a clear understanding of your transportation requirements, the market conditions, and the carrier options.

Im my opinion every organization must have proper data to be transformed, load and prepare then for depth analyziation in order to get insights. As IA advances it has become easiest than ever to make reports, charts. But we do not need to forget to make a root cause analysis and define metrics, actions and charts in order to correct those cause. I do recommend to use PDCA approach