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Truck Route Optimisation

Efficient truck route planning in logistics

What is route planning? How does it differ from tour planning? How does route optimisation work and for which purposes is the use of specialised software recommended?

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The Travelling Salesperson-Problem

Imagine you were a dispatcher and had to decide the order in which your driver should drive to five different customers. Not a big problem, is it? In fact, there are already 120 different solutions for this simple planning problem and therefore 120 routes. If the number of customers triples, the number of routes rises to an incredible amount of 1.3 trillion. This illustration shows a dilemma, also known as the “travelling salesperson problem”.

This mathematical simplification occurs rarely in logistics, because usually there are numerous other restrictions and factors that influence the planning of a tour. These factors could be: fixed delivery dates, different opening hours, different vehicles in terms of capacity and equipment or customer and goods-specific requirements. If such factors must be considered during route optimisation, the number of routes is going to be limited, but additional complexity will be created.

In addition, there is no such thing as “a best tour” for route planning, but various (optimised) options, e.g. the fastest, shortest or cheapest tour. In order to determine the “most efficient” tour, various criteria must be taken into account, such as distance, travel and service time, toll charges or driver and vehicle capacity utilisation.

What is route planning?

The theory of the travelling salesperson problem shows that above a certain quantity of orders, the wide range of factors that must be taken into account makes it practically impossible to plan an efficient route manually. Route planning refers to the strategic planning and optimisation of routes for deliveries, pick-ups and services. It plays a significant role in logistics and enables companies to make their supply chains more efficient. This is where route planning software comes into play. With the help of powerful algorithms and approximation methods, so-called heuristics, and by taking restrictions into account, it can create an optimised route plan.

Route or tour planning?

The terms route and tour are often used synonymously in route planning. In the field of logistics, however, route planning and tour scheduling refer to two different things.

Tour

When creating a tour, the aim is to find the best viable way between two or more points. The order in which these points are approached is already determined.

A tour can be optimised according to travel time, distance or cost. Unlike Google Maps, for example, a tour planner, which is specially designed for trucks, also takes vehicle-specific regulations, restrictions and limitations into account. Such a tour planner knows, for example, that transports of hazardous goods must avoid water protection areas, that tall trucks cannot pass through low tunnels or that bridges in need of renovation are not approved for heavy goods traffic, and adjusts the route accordingly.

Route

When planning routes, both the assignment of orders to the individual routes and the sequence of stops within the routes are determined.

Time windows, specifications, requirements and the equipment and capacity of the vehicle to be used must be considered. The assignment of drivers, vehicles or depots can be part of the planning but does not have to be.

To combine orders into the most efficient routes possible, the use of a software solution is recommended for a larger fleet and frequently changing customers. In addition to delivery quantities, capacities and availability, it also takes numerous other restrictions into account when planning routes, such as loading and unloading times, driving and rest periods or special delivery requests.

When planning a route, the possible tours between the individual stops also play a role. Different tours may have to be selected for a route optimised for distance rather than for driving time.

Route planning is the grouping, also known as scheduling, of orders into one or more routes and the determination of the delivery sequence within the routes. This process is typically conducted by one person or vehicle and is important in various areas, such as deliveries to retail outlets, mail collection, waste collection and passenger transportation.

There are different types of routes: if the vehicles return to the initial depot after a route, this is referred to as a round trip or depot route. This is not the case with an open route. There are also pure delivery or collection routes and those in which goods are both delivered and collected (delivery and collection tours).

The objectives of route planning are

  • the proper delivery of goods,
  • the minimisation of costs, miles driven and vehicles used
  • an even utilisation of vehicles and drivers and
  • increased customer satisfaction through punctual and reliable deliveries.

These goals, as well as a significant reduction in planning time, can only be achieved with the help of a software solution.

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Route optimisation: take specifications into account

Tours can be planned manually, for example with the help of lists or maps. However, if there are several vehicles and orders, it is advisable to use software, as only this can consider the numerous planning requirements and calculate optimised routes using powerful algorithms.

Restrictions in route planning:

  • Individual requirements for vehicle equipment (e.g. temperature-controlled vehicles, hazardous goods equipment, lifting platform or truck-mounted forklift)
  • Different delivery windows and fixed dates
  • Driving and rest times, working time regulations, breaks
  • Different vehicle types (e.g. small truck, refrigerated vehicle, 7.5-ton truck)
  • Maximum route duration
  • Loading times at the depot
  • Restrictions at the delivery location (e.g. a low entrance)
  • Consideration of existing framework route planning
  • Prohibitions on mixed loading and single-item deliveries
  • Special customer requests
  • Multiple depots
  • Pick-up & delivery

Strategic, tactical or operational planning

Different time horizons and approaches can be distinguished in planning:

  • Strategic route planning
    It is primarily used when a company has a fixed customer base with a constant order situation. In this case, drivers can be assigned to areas and a framework for routes can be planned. Once created, they are valid for a long time and only need to be updated and optimised in the event of changes (e.g. new customers) or in public holiday weeks when, for example, a tour day is cancelled.
  • Tactical route planning
    Some companies draw up outline plans for the following weeks and months. Such weekly plans facilitate personnel planning and enable them to give their customers a delivery time early on (e.g. “week 13” or “mid-August”). Detailed planning then takes place a few days in advance.
  • Operational route planning
    Operational planning complements strategic and tactical route planning and is particularly necessary for companies with a fluctuating order situation and frequently changing customers. Here, the routes for the coming day are planned every day, as this is when all the relevant information is available. In some cases, dynamic route planning is even necessary, as changes have occurred after the planning has been completed and the route needs to be optimised again.

The importance of scheduling

The optimisation of delivery areas depends heavily on precise scheduling. Only through precise planning and good coordination time losses and unnecessary routes can be avoided. Effective route optimisation also considers driving and rest times as well as individual customer requirements.

Process optimisation in logistics

Regular analyses of the distances travelled and the use of resources help to constantly increase efficiency and optimise the use of resources. By adapting tours to current conditions, companies can not only save costs but also reduce their environmental impact. Efficient process optimisation through route planning software minimises unnecessary travel, which contributes to the saving of resources and leads to a sustainable and economical logistics strategy.

Flexibility and adaptability

In addition to technology, the human factor is crucial. Scheduling should be flexible so that employees can react quickly to changes. A practical scheduling approach, combined with powerful algorithms, enables route optimisation to increase customer satisfaction and reduce costs at the same time.

Success factors in route optimisation

Route optimisation is crucial for improving efficiency in logistics, because it is a central element of tours. Route optimisation software is used to determine the best route between stops. For this, a distance matrix is used, which maps the distances between the locations. Modern route planning systems often work in real-time and adapt to current traffic conditions or unexpected events.

What is the difference between a transportation management system (TMS) and route planning software?

Freight forwarders and logistics service providers use a transport management system (TMS) to map and control their business processes. The focus is on the administration, execution, control and invoicing of their orders.

As a rule, transportation management systems also map route planning as an important sub-process. Manual planning by dispatchers is particularly common here. The planning decisions are made entirely by humans and then mapped in the software as a route plan.

If the planning is more complex - for example, if all tours should be created simultaneously, considering restrictions and specifications - the use of a separate software solution is recommended. It is connected directly to the TMS via interfaces, calculates the routes and then returns them to the TMS.

If there is the need to work only with one software solution, it is also possible to integrate suggestion, map and route planning functions directly into the TMS.

Areas of application for route planning in logistics

From animal healthcare to bailiffs, from parcel services to supermarket deliveries - the possible applications of route planning software are diverse and by no means limited to the logistics sector.

Wholesale, production, medical services, field service, service technicians, delivery services, parcel carriers, waste disposal, ride-sharing providers, and school buses - they all transport goods or people and can benefit from optimised, cost-efficient routes. The possible applications range from home delivery to distribution in local and distribution traffic, last-mile delivery and pre- & post-carriage in local traffic to multi-day routes.

A positive side effect: some companies use the software not only to create routes, but also to reduce and calculate the expected CO2 emissions. They then share this emissions balance sheet with their environmentally conscious clients or use it as a basis for compensation and offsetting measures. Even care services can benefit from route planning software in their work.

The foundation of route optimisation: precise maps and data

Route planning software requires a digital road network as a data basis. But not all maps are the same. Its quality is decisive for the quality of the calculated routes.

High-quality map material is characterised by excellent coverage, high precision, data plausibility and up-to-date. It should also be enriched with data that is required for the respective application, such as data on the road network or administrative areas, topographical information or information specifically tailored to truck route planning (e.g. bridge heights, axle weights, no-passing zones).

In addition to maps, traffic information is a key component for optimised tour planning.

There are different types of traffic information:

  • Real-time data on the current traffic situation:
    This includes information on traffic jams, roadworks, accidents or closed roads. This information is used, for example, to precisely calculate the ETA (estimated time of arrival) or to adjust the route guidance when navigating vehicles.  As route optimisation is usually conducted a few days before the trip, this data is less relevant for planning.
  • Statistical or historical traffic information:
    These are traffic patterns that represent the flow of traffic at specific time intervals in the form of static speed profiles for specific road sections.
    Example: If a maximum permitted speed of 60 mph is specified for a section between 5 p.m. and 7 p.m., but in practise the actual speed of a truck does not exceed 30 mph on average due to traffic conditions, this information can already be included in route planning and delays can therefore be avoided. This makes planning results even more practical.

Another quality criterion for a map is its legibility. As a huge amount of information is displayed here, such as orders with loading and unloading points, depots, planned routes, tours, vehicle positions and status information, a clear and easy-to-read display is important.

Before planning: data import and preparation

Before you can plan the first route with a software solution, several preliminary steps are necessary:

  1. Create master data:
    Information on customers (addresses, opening hours, unloading location), vehicles (size, diesel/electric, refrigerated trucks, forklift trucks on board), drivers (working hours, qualifications, areas) and depots is essential for planning. They are usually stored in an upstream system, such as an ERP, which must be connected via an interface. Alternatively, this data can also be stored directly in the route planning software.
  2. Import orders:
    No route planning without order data. It is often not enough to simply import the data. It usually needs to be validated, supplemented and enriched, as it is often incomplete or inconsistent in terms of planning information. To make the address data usable for route calculation, it must also be geocoded, i.e. converted into coordinates.
  3. Define planning parameters:
    Route optimisation is classically based on the target variables of distance and time. The aim is therefore to minimise driving distances and times as far as possible, while at the same time complying with all specifications. The criteria, ancillary conditions and parameters to be considered, e.g. time windows, working times or vehicle requirements, must be defined before planning. Various planning procedures are available for this purpose, which can be selected and adapted accordingly.

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Benefits of a route planning software

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Reduced transportation costs

The automatic and optimised distribution of orders to the available vehicles makes them better utilised and avoids empty runs. Thanks to optimised routes, no unnecessary miles are driven.  As a result, savings in the double-digit percentage range can be achieved in the transport sector - the software solution can pay for itself after just a few months.

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Transparency & reliability

Route planning software ensures consistent service quality, even if the planner is on vacation, the fleet manager has just been hired or a temporary driver must spontaneously take over an unknown area. Planning knowledge is no longer stored in heads, but in the software and is therefore visible and available to everyone.

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Satisfied customers

The software can take special requests and requirements into account when planning routes. Automated notifications about the estimated time of arrival (ETA) improve customer service. And since the planning only takes minutes instead of hours thanks to the software solution, the cut-off time can be pushed back to the benefit of the customer.

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Relief for scheduling & time savings

Manual route planning ties up the scheduling department for most of the day. A software solution, on the other hand, completes these tasks in just a few minutes. This leaves planners more time for strategic and economic tasks, spontaneous changes to route plans and driver support.

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Compliance with the regulations

Legal and industry-specific requirements are automatically considered when planning routes with software. These include for example, driving and rest times, company and contractual agreements, dangerous goods regulations, truck driving bans and environmental protection obligations.

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Employee satisfaction

Good employees are hard to come by, especially in the logistics sector. This makes it more important to retain and satisfy them. With optimisation software, you can create realistic and feasible routes with little effort. This not only reduces stress and overtime, but also promotes driver and dispatcher satisfaction, leaving them more time for family and hobbies.

Industries

Home delivery

Transport & Logistics

Enhancing collaboration boosts efficiency & transparency in transport quality documentation.
Industry Retail and wholesale

Retail

Better communication with logistics improves service, streamlines documentation, and cuts costs & time.
Industry Production

Industry & Production

Live monitoring & ETAs (JIT/ JIS deliveries), auto-mated notifications & alerts, E-POD.
Courier, express and parcel delivery

CEP/ Home Delivery

Live monitoring & ETAs, E-POD & digital documentation, reduction of delivery failures.

Customers who optimize their route planning with PTV software

PTV Route Optimiser integrates functions that were previously done manually. It supports us in planning complex transport and distribution activities.

Giuseppe Galantuomo

Unilever Italy

We can now look at the whole system and work out how we could become more efficient.

Don Mackaness

SEQ Ice Cream

Installing PTV Route Optimiser paid off quickly. We're saving lots of money and planning time every month.

David Liebl

PDR Recycling

With PTV Route Optimiser, we can now calculate optimal routes and plan very quickly and above all, cost-effectively.

Raimund Müller

Okle

FAQs

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What is route planning?

Route planning is the process of determining the optimal routes for delivery vehicles to maximise efficiency and minimise costs. This includes considering factors such as traffic conditions, delivery times, vehicle capacities and customer requirements.

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Why is efficient route planning important?

Efficient route planning is crucial to reducing operating costs, increasing customer satisfaction and promoting environmentally friendly practices. It helps companies to make better use of their resources and remain competitive.

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What role does artificial intelligence play in route planning?

Artificial intelligence helps to analyse complex data and identify patterns to calculate the best routes. It enables dynamic adaptation to changing conditions and contributes to the continuous optimisation of route planning.

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Which software tools are useful for route planning?

Various software tools are useful for route planning, such as PTV Map&Guide. These tools offer functions such as route optimisation, real-time tracking and integration of telematics data.

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How does route planning contribute to sustainability?

By optimising routes, fewer miles are covered and less fuel is consumed, which reduces CO2 emissions. This contributes to environmental friendliness and supports the sustainable goals of companies.

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What challenges are there when planning routes?

The challenges of route planning include unexpected traffic conditions, changes in the supply chain, variable customer requirements and the integration of new technologies. A flexible and adaptable system is necessary to meet these challenges.

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