It costs about $166,000 to keep a tractor-trailer on the road for a year, based on the latest truck-operating cost data from the American Transportation Research Institute. With every mile costing $1.82, it’s no surprise that private and commercial fleet operators are leveraging route optimization software to improve delivery service, reduce miles, and shave anywhere from 10% to 30% off fleet-operating costs.
But many of these software solutions fail to address an enormously important piece of the route-planning puzzle: people.
Most route-optimization technology focuses exclusively on routing the truck, and ignores the person behind the wheel. Until we have genuinely self-driving trucks, driver availability will remain a crucial factor in putting together a route plan that’s efficient and workable. Plans that fail to factor in the availability of individual drivers can easily cost fleet operators hundreds of thousands of dollars a year.
Trucks can operate 24/7 and adhere to any schedule; drivers can’t. They get sick, take vacations and, importantly, are restricted by hours-of-service (HOS) limits. When plans fail to take into account available hours and driver preferences, dispatchers who have direct access to drivers and their schedules must scramble to reconfigure plans to work with the actual resources available. These changes add miles and costs to the original plan.
For instance, if Driver 5 is due to hit HOS limits with two deliveries left on his route on the west side of town, these deliveries might be re-assigned to Driver 6, who must now complete his east side route and travel across town to finish up, adding costly freight miles. Multiply this by several, even dozens, of routes a day, and the original plan begins to unravel — along with any savings expected from optimizing routes.
It’s a little like a general contractor planning a home-construction project without detailed data on the schedules of the plumbers, electricians and other subcontractors. When the on-site manager has to make adjustments on the fly to accommodate actual subcontractor availability, the entire project is thrown out of whack because, like truck routing, activities are codependent.
Framers can’t frame until design is done; electricians can’t wire until the frame is up, and drywall can’t be installed until the house is wired. So an eight-week, $150,000 project becomes an 11-week, $175,000 project — all because the original plan failed to consider the schedules of the people doing the work.
The solution to integrating driver schedules into route plans is making sure your route-optimization software offers “resource-level planning.” That’s route-management lingo for plans that consider driver preferences and availability as part of the route-optimization process.
It starts with fleet operators using the software to capture driver-specific data like vacations, doctor’s appointments, preferred shift patterns and special commercial driver’s license (CDL) endorsements. Next, the data captured by in-cab electronic logging devices (ELDs), including hours driven by each driver, is fed directly into the routing software. This is a critical component, since drivers’ actual hours don’t necessarily mirror what was in the original plan. Look for routing software that imports this ELD data easily and seamlessly.
The goal here is simple but powerful: take data that’s already in multiple places — within the software, ELD devices, and dispatchers’ heads — and put it all in one place. The algorithms that power the routing software can then consider driver-related data, along with dozens of other route-related variables, to produce a fully optimized plan that is also DOT-compliant.
An integrated approach benefits everyone in the fleet operations team:
- Dispatchers develop confidence that the plan will work in the “real world,” and therefore avoid the early-morning scramble of re-allocating routes. Instead, they can focus on their core task of getting drivers out the door and staying on schedule.
- Route planners avoid the frustration of seeing their carefully crafted plans unravel the minute the truck leaves the yard.
- Drivers appreciate consistently fair, accurate route plans that get them home at the scheduled time.
The use of routing software with resource-level planning can also have a galvanizing effect within an organization. Two functions that exist in silos and are often at odds — route planning and dispatch — can work more harmoniously because they are now working with one version of the truth.
The biggest winners from resource-level planning are fleet operators themselves, especially those managing large, complex operations costing millions of dollars to run. By reducing truck delivery time and miles across the board, route-optimization software can realistically reduce fleet operating costs by 10% to 30% — savings that go straight to the bottom line. But if route plans continue to ignore your most important and expensive resource — your drivers — that software investment is largely wasted.
William Salter is CEO of Paragon Software Systems.