Route Optimization API as Solution for Logistics Challenges

The need to plan a route with a row of different stops is an integral part of modern companies' workflow. And it concerns not only logistics and supply chain but also a wide variety of companies and, accordingly, industries.

In order to optimize the aforementioned process, many successful businesses have already implemented the corresponding functionality in their software systems. One of the most potent and cost-efficient ways to do this is to integrate the route optimization API.

In this post, we will dive deeper into the common business challenges overcome by this innovative solution, its benefits, and types. Besides, we'll get acquainted with the route optimization algorithm and the API integration into the internal processes of the business.

The Vehicle Routing Problem is a challenge, the major aim of which is to build the maximally optimal route for a fleet of vehicles directing to diverse locations.

Optimization routing within the VRP implies defining the most cost-effective way to get to a certain location. It's highly important to understand that it isn't equal to creating the shortest one. Aspects like time amount between the start and finish of the trip, efficient loading, and intersections on the way should be considered as well.

This issue also represents a colligation of the Traveling Salesman Problem (or the TSP). The main question it asks is, "Taking into account the range of cities as well as the distance between each two of them, what is the shortest feasible way to trip to all stated locations a single time and get back to the departure point?"

Consequently, the main task is the vehicle route optimization from the departure station to a range of required points on the map, accounting for business-specific restraints. They may refer to the vehicle restrictions, budget limits, deadlines, resource bounding regarding the burdening process at the location, etc.

The main VRP types are the following:

Due to the maximum load capacity of every vehicle, the dimensions, as well as cargo heft, should be taken stock. The aim is to reduce expenses by shipping a larger amount of products for a single ride keeping up with the vehicle's capacity. Besides these are the other challenges that may be faced:

• Several depots
• Bounded number of vehicles with a particular required equipment/ facility (to illustrate, refrigerator)
• Weight and size inequality of items for supplying and receiving
• Varied vehicle capacities
• Multi-chamber vehicles

Another great challenge is scheduling the delivery to clients. Commonly, they are reachable for certain time limits. Therefore, the delivery should occur in these bounds, but not later. In case the service is provided without meeting these frames, it may result in decreased customer experience and reduced credibility towards the company.

In addition, time limits might be:

• Several frames (not intersecting, unequal duration)
• Non-coinciding frames (wait time due to the arrival between the two gaps)
• Loyal frames (permitted supplying without following the schedule, yet, charges fine)
• Strict frames (going beyond the set time isn't allowed, the vehicle must wait till the next gap)

The main goal of the vehicle is taking cargo/passengers from one point on the map to another without engaging the depo. Traditionally, this issue describes the contemporaneous supplying and picking up. The widespread request is on-demand transportation which refers to providing delivery services mirroring the clients' needs (in practice, it can be a taxi, shuttle service, transportation buses, and so on.) Thus, this route optimization problem results in united delivery and pickup locations.

With the help of routing optimization API, supply chain and shipping companies can solve a row of industry-specific issues:

• Reasonable resources allocation (vehicle, fuel purchasing)
• Decreased operational costs
• Creating routes according to the dynamic conditions (traffic, weather)
• Higher fulfilled orders number (enhanced company efficiency)
• More longevous vehicles
• Cut down time for routes building
• The increased client satisfaction rate
• Meeting the set schedule and time frame

Within business scaling, companies from the domains mentioned above begin to require route optimization methods. On average, in case the workflow comprises daily 20-30 stops, or you need a more expanded transportation management level.

Fulfill more daily orders

The route optimization solution’s main aim is to decrease travel time and consequently progress the performance. As a result, the route optimization software does both: it decreases expenses and helps to generate more profit.

Save up to 20% on vehicles and mile

Optimized routes allow you to substantially increase the amount of savings. Often, the percentage of economized expenses is approximately 20% when applying the route development solution.

The profitability of the route optimization API is also determined by the industry and business restraints. In case these restraints are stringent, the process of streamlining becomes more complex, and the outcome of route optimization is less efficient. Due to this fact, it’s essential to determine the “real” constraints prior to integrating the API.

Cut down vehicle quantity for trip fulfillment

The route optimization API enables cutting down the number of vehicles necessary to perform supplying services by streamlining the loading rate. The percentage of saved costs may surmount 50% with the margins on the order schedule covered. This considerable amount of saved expenses are real, exceptionally when the route optimization API has a smart scheduling module. Such pros of route planning are inherent to the transportation domain.

Cut down route planning time

There are specific domains the companies of which spend lots of time to come up with the most optimal way manually. The function of the route optimization API is to complete this task more rapidly and receive enhanced results. It is commonly used in route optimization apps.

Limit the carbon footprint of your fleet

The decreased time spent on the trip by ferrymen parallelly cuts down the carbon emission. The reduced dioxide wastes are simple to estimate. For entities using low-emission vehicles, route optimization API will ensure the opportunity to take even more care about the planet. Nowadays, there is a row of solutions for planning the route taking into consideration the eco-friendliness of the vehicles.

What are the main factors that reflect the need for the route optimization API?

• Time-consuming creation and tracking of routes
• Belated informing of unmet time gaps
• Constant requests from clients concerning the cargo transportation status
• You're concerned about how much you're spending on fuel and driver wages.
• Inadequate amount of investments needed
• Care about the environment (carbon emission reduction)
• Transportation processes are unscheduled, disorganized, and inefficient

Over the next decade, companies that fail to invest in their logistics networks will find themselves disinter-mediated by companies that do. Consumers and companies alike will want real-time visibility, custody tracking, and sourcing information, combined with near instant on-demand fulfillment.

To understand what operation principle conditions such valuable benefits, let's consider the routing optimization algorithm more precisely.

It’s highly important to understand that instead of searching for exceptionally the shortest way possible to visit all the stated points at once, the solution is able to design the route based on such crucial details as all existing roads, bridges, one-way sections, traffic, and specific traffic laws, etc. The algorithmic route optimization applies all this data to design the most efficient way possible.

Apart from this, when building the route, the software must take into account factors like

• Time frames for the service providing
• Vehicle type and capacity
• Ferrymen's location and the need for stops
• Carries schedule and deadlines

Why is this type of solution beneficial, and can ensure the best route optimization algorithm?

API implies an Application Programming Interface, which is a software mediator that enables the communication and data transferring between the two applications. Such solutions are able to expand the existing functionality of the digital product and make it full-fledged due to the additional features they bring. Therefore, there's no need for entire software development from scratch, as route optimization algorithm API integration can ensure more capabilities for your current system.

According to the requirements of your business, it's significant to identify what route optimization algorithm to use specifically for your case. Below we'll reveal their classification and find out the solutions each option offers:

The number of stops is considered high in case their total quantity surmounts 150. Traditionally, this type is beneficial for organizations performing services like school bus transportation, newspaper distribution, waste products pickup, and postal supplying. In this case, the vehicle route optimization algorithm creates the trip with these points having minimal possible distance from each other.

The name speaks for itself — the operation principle is set to design a streamlined route comprising less than 150 stops. Due to this fact, the points on the map may not be essentially nearly located. They are only fulfilled within the schedule and a single visit.

In this case, the algorithm implies having a certain interval route when heading to the arrival spots. In practice, it may refer to the trip covering 50 stops. When passing each 5 of them, the vehicle is projected to make the changes in the route, like heading to the filling station/traveling to the store to have a bite to eat or purchase something else.

With these route optimization algorithms you can:

• Meet the expectations of your customers on time
• Avoid unnecessary miles
• Increase orders completed in a day
• Cut down operational costs
• Manage last-minute scheduling
• Decrease time spent scheduling routes
• Smartly manage the working time of your drivers
• Improve drivers’ working conditions
• Access field data in real time
• Limit your carbon footprint

Based on what business requirements you have and what services your organization delivers, you should select what routing optimization SDK (Software Development Kit) will be maximally efficient. The most productive way to do this is to receive consultation from qualified tech experts.

A diversity of existing software has already applied route optimization SDK for the API integration. Let's take a more precise look at some great examples of such solutions.

It is a route creating solution that is aimed at ferrymen, logistics and transportation service vendors, suppliers, delivery, and carrier services. On-demand functionality of ElasticRoute comprises dispatch and driver operation, online monitoring, API, fuel and location management, and a row of performance indicators.

Onfleet ensures the simplified opportunity for transportation and logistics companies to efficiently design, route, and operate their last mile delivery services. This is possible with user-friendly driver software as well as a solid dashboard and the API.

This solution is a cloud-based delivery route designing and streamlining solution aimed at increased fleet capacity, fuel expenses minimization, and monitoring real-time carrier performance in real time. Routific comprises interactive maps, API integrations, and even a mobile application for ferrymen.

eLogii is the relevant solution for entities that require productive multi-stop route creation and optimization for each vehicle as well as carrier in their fleet. By integrating this software into the domain-specific requirements, companies receive enhanced performance and overall efficiency.

Another opportunity to overcome the route planning hustle and bustle is to apply Route4Me. This highly intuitive solution enables building, sharing, controlling, and driving optimized routes quickly and efficiently. It is created primarily for companies requiring last-mile optimization.

After having more in-depth considerations of algorithm types as well as looking at route optimization examples, we can now define integral steps to take to integrate the API into the workflow.

Here are the essential stages of the implementation process that will help you with the route optimization API implementation. Please, remember that the offered list below serves as an exemplary roadmap. Therefore, the more individual approach relevant specifically to your case can be ensured by a proficient tech services provider.

Before starting the actual development and integration process, it's vital to understand what issues in your business you would like to solve. For this, you should conduct a highly precise company analysis and detect the weak spots within the workflow that should be enhanced. Besides, details like your entity's domain, type of services, and the entire concept should be taken into account as well. It is worth mentioning that you don’t need to hire business analysts separetly, a professional software provider is ready to assist you during this stage.

Apart from setting goals that the solution should achieve, it would be useful to set KPIs (key performance indicators). In the future, they will help you to assess how profitable the route optimization solution is for your organization. The metrics should be chosen individually, based on the specific business case and industry.

The previous module serves as the foundation for assembling the requirements. This phase implies drawing up the list of demanded features appropriate for the objectives set afore. The functionality should directly mirror the company's goals and serve as an instrument allowing to reach them. Consequently, you should define the type of algorithm necessary for your case.

Data flow planning is also part of this stage. After completing the business analysis, you should define a crucial element of the API integration process with the help of your technical partner. Data flows are the components or information that should be transmitted from one solution to the other.

Precise requirements will help you to select the best partner in the entire market. When looking for the one, you have the main three hiring options:

• Freelancers. The most cost-efficient option is advantageous for small-scale companies/ startups. Yet, when selecting such specialists, you should pay attention to the rates and reviews left from the previous partners. This suggestion is highlighted due to the unpleasant possibility of quitting your project.
• In-house developers. This option has the highest price of all the previous ones. In case you have this type of team gathered to maintain and support your existing software, you may extend your employees' expertise with outstaffing for the route optimization API integration.
• Outsourcing company. Current market conditions allow you to select tech specialists all around the world with no boundaries and perform distant cooperation with the most credible ones. Outsourcing refers to a team of tech specialists taking all the responsibilities concerning the task of the project.

This last hiring option has the most reasonable cost as there are popular tech hubs with talented developers providing excellent performance to clients. One of such regions is Central and Eastern Europe. This area is full of experienced software architecture vendors, so we strongly suggest starting your search there

The partner selecting process is pretty complex. Due to this fact, we would like to turn your attention to the two main tips on how to make the right choice avoiding pitfalls:

• Feedback on verified resources. The first and most obvious advice is to check the rates and reviews for every potential vendor. The most popular platforms providing checked feedback are Clutch and GoodFirms.
• Domain expertise. Another great way to alleviate the choice is to select the software development vendor with the relevant expertise for your business industry. IT specialists that have previously created solutions for your market sector have great experience in coping with the common issues and domain-specific challenges. Thus, the integration process will be completed faster, more correct, and qualitative.

The selected partner should conduct a meeting with you to negotiate your requirements for the solution and issues that need a solution. After that, the team of tech experts will create a plan on how to implement the suitable route optimization API, what algorithm to apply and what set of tools to use.

Having your requirements on hand, developers complete the solution integration with the current system to extend its functionality and ensure the route optimization opportunities. Furthermore, they test the completed modification to verify its operation correctness.

Each case requires an individual approach, so we would like to emphasize that the list of steps is quite variable due to the requirements and domain.

To conclude, we would like to empathize that the development of routing optimization solutions within the logistics and transportation industries is always multi-component and involves a complex workflow. The implementation of such products and the subsequent business process optimization can only be realized in cooperation with a certified and experienced software development vendor.

Cleveroad is a professional IT company from Estonia with 10+ years of experience in the software development market. Our main specialization is custom digital products architecture and delivery for businesses of all scales.

• A cutting-edge set of tech tools and innovative software creation methods
• We believe that honesty with customers, partners, and our team is an integral step to creating great products
• A team that quickly responds to dynamic requirements and modifications and integrates into current workflows
• Software engineering teams comprising agile-oriented, high-qualified, and certified tech experts

Logistics software development, as well as the supply chain domain, is one of Cleveroad's main development vectors. Therefore, our competence includes LMS, TMS, SCM, ERP, and a range of other digital solutions.

Products architected by Cleveroad are aimed at decreasing operational costs, broader management capabilities, and wise resources distribution, supply chain optimization, and workflows of warehousing, transportation, and cargo delivery within the businesses of our clients. To prove our expertise, let us introduce one of our relevant projects for this domain — TMS from Cleveroad.

The system's main project objectives are the following:

• Ensure delivery route optimization algorithm, automate and streamline internal company's processes
• Provide an excellent transportation management system
• Integrate the solution into the already architected LMS software

The output our customers have received is an adaptive solution allowing to raise the performance productivity. Its great benefits are the substantial reduction in transportation time as well as losses. The rentability of the software is also proven by the profit from each vehicle and the overall gross income.