How Much Does Route Optimization Reduce Costs in Trucking?

Route optimization is a key feature and function of any Transportation Management System (TMS) and has the potential to reduce operating costs for trucking and freight companies when implemented. The addition of a TMS platform with truck routing software and route optimization capabilities will help your company drive profits and save money — but how much does route optimization reduce costs in trucking? This is a question that many freight companies are asking and we are here to help answer your questions.

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How Does Truck Routing Software Reduce Costs?

The implementation of truck routing software with the capabilities to optimize freight routes has the potential for incredible savings for trucking companies. Data and studies have shown that route optimization can reduce trucking costs by 10% to 30% in a variety of ways.

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Here is a better look at a few ways that route optimization can reduce operating costs for trucking companies:

Lower Fuel Costs: Truck routing software helps plan more efficient routes with fewer miles and delays that leads to reduced fuel consumption and costs.
Improved Productivity: This innovative software can automate delivery schedules for freight companies and find the right drivers and trucks that will improve efficiency.
Reduced Maintenance Costs: With shorter, more efficient routes and less time spent on the road, freight companies may be able to reduce maintenance costs.
Lower Labor Costs: Route optimization has the potential to reduce time spent on manual truck routing and can save companies money by reducing the man hours spent on route optimization.

Case Studies of Route Optimization and Increased Efficiency

The data and numbers provide valuable insight and information into how truck routing software can improve efficiency and reduce costs for trucking and freight companies — but data does not always tell the whole story. This is where case studies can shed additional light on the benefits of route optimization in real life and how it can improve efficiency.

Here is a better look at how route optimization has benefited real-world freight companies:

UPS and ORION Technology

The United Parcel Service (UPS) is one of the largest freight carriers in the world and employs On-Road Integrated Optimization and Navigation (ORION) with Artificial Intelligence (AI) capabilities to improve routing. This powerful routing software can analyze more than 250 million delivery points to create ultra-efficient routes. With this technology, UPS has been able to save an estimated 10 million gallons of fuel and reduce carbon emissions by more than 100,000 metric tons.

DHL and SmartTruck Technology

DHL is a global leader in the logistics industry and has implemented AI-powered SmartTruck technology to improve route optimization and reduce costs. SmartTruck truck routing software has helped the company optimize deliveries in cities across the country by analyzing traffic patterns and reducing the delivery times by as much as 15% and saving fuel.

Amazon and the CONDOR System

Amazon has implemented the CONDOR System — Custom Order and Network Density Optimizer — in an effort to optimize routes and improve customer satisfaction. This innovative system employs an algorithm to analyze orders and the delivery network to determine the most efficient routes, reduce the miles driven, reduce harmful emissions, and ensure packages are delivered faster.

Convoy and AI Freight Matching

Convoy is a digital freight network that employs AI-powered route optimization to improve business performance. This platform matches loads with available trucks and drivers based on location, deadlines, and other factors to ensure that trucks are always at full capacity and avoid empty miles. This ensures that every trip maximizes profits and improves efficiency.

Basic business tenets tell us that it is important to reduce costs whenever and wherever possible in an effort to maximize profits. Truck routing software and route optimization are a great way for freight companies to reduce costs and drive those profits upward — but how much does it reduce costs? Freight companies may want to know how much route optimization reduces costs in trucking and we hope that this overview created by TenTrucks will answer that question and more.

Contact TenTrucks today for more information on our TenTrucks TMS platform and dispatching services!