Route optimization

Delivery Routing in Urban Areas

Delivery Routing in Urban Areas

Delivery routing in urban areas can be complicated. But it doesn’t have to be like that.

In this post, we’re going to walk you through overcoming urban route planning. And how you can meet all of the logistical demands of routing vehicles in cities.

So if you want to:

Raise delivery speed.

Cut fuel and delivery costs.

Produce less waste.

Deliver a great experience to customers.

Then, you’ll enjoy the actionable tips in this post.

Let’s start.

Problems of Routing Vehicles in Urban Environments

Delivering goods to customers who live in the city is a big risk.

On the upside, it’s an opportunity to reach more consumers. And reap the rewards (and profits) of a well-developed market.

On the downside, order fulfillment in the city comes with its problems.

If you don’t address these challenges, they may overwhelm your operation. And cause your business to lose money.

So in this part of the article, you’ll see six of the biggest problems of routing vehicles in an urban setting:

#1 Traffic Congestion

Road traffic can have a serious impact on the delivery speed in the city. This may hinder your ability to fulfill order requests on time.

Traffic congestion occurs when the urban road network is incapable of supporting the high number of traffic (and vehicles) on the road at specific points in the city and at various times of the day.

Although it isn’t up to your business to develop better transportation infrastructure, you need to account for these events if you want to improve order accuracy and on-time delivery.

Another problem is the continuously changing urban transportation network. You need to be aware of small local changes in the street layouts to fulfill orders in an urban setting.

For example, closing a street for maintenance or cultural events may cause massive disruptions to your operations. So you have to be aware of them when planning routes and dispatching the fleet to customer locations.

#2 Lack of Space for Warehouses and Depots

Regardless of the type of delivery you operate, you need to plan single or multi-depot locations to create a steady supply line of orders to your fleet.

This can be a problem in cities, where a lack of space raises the demand for storage.

While demand for quality warehousing dictates high retail prices, which means they are often out of reach of small-to-medium businesses.

On the plus side, this is also putting a lot of pressure on real-estate developers to build new storage facilities near densely populated areas.

Or businesses to rethink the way they pick up goods for fulfillment within the cityscape.

In fact, Amazon is planning to put 1,000 warehouses in suburban neighborhoods across the United States.

These are accessible enough to reach consumers in the city. While affordable due to the lower real-estate price in residential areas.

An alternative for smaller businesses may be the use of vertical and stack warehousing in tall buildings.

Or the repurposing of out-of-order facilities such as old office buildings and shopping malls as depot and storage sites for last-mile delivery.

#3 Longer Wait Times

Delivery agents frequently experience challenges when transporting goods in urban areas because of traffic jams, bottlenecks, or inaccessible approach points at drop-off locations .

But other factors also limit delivery drivers.

For example, fourth-party logistics (4PL) providers may experience delays due to their inability to pick up shipments from stores because of specific work hours.

While delivery drivers may also be late due to external factors. These can include road closures, weather, or simply because they’re unable to find a customer in a residential building on time.

Logistics planners have to account for all of these factors if they want to reduce the wait times or provide a better service such as scheduled delivery times.

#4 Higher Delivery Costs

Delivering goods in cities means higher delivery costs.

Three factors drive up the expenditure in urban environments:

City speed limits, roundabouts, and traffic lights all prevent vehicles from travelling at faster speeds. The slower drive times cap the number of orders vehicles can complete per day.

And when demand exceeds capacity, businesses often have to invest in new vehicles, which raises capital expenditure.

Another factor that drives up costs is the number of smaller order requests customers who live in cities make when ordering goods online.

Low-cost items have smaller profit margins. Often, the amount of money you generate from affordable goods isn’t enough to cover the cost of delivery.

And because of all of the delays that can occur in urban last mile delivery, they can seriously affect fuel consumption. Which, in turn, drives operational costs up.

#5 Greater Fuel Consumption

Several factors influence higher fuel consumption in cities:

Stop-start traffic raises the amount of fuel vehicle engines consume, as there are less open roads within city limits.

Traffic congestion is another ineffective use of fuel. As are the frequent turns, stop lights, and lanes vehicles have to take to reach their destinations.

All of this raises travel times and time spent on the road, which raises the amount of fuel delivery vehicles use in cities when compared to a more rural setting.

But the high usage of fuel has another negative impact:

#6 Environmental Pollution

Stop-start traffic increases the fuel consumption of internal combustion engine cars, resulting in higher GHG (greenhouse gass) and air pollution emissions.

It also extends the amount of time that those who are stuck in traffic are exposed to pollutants.

Greater fuel consumption leads to higher delivery costs and greater pollution.

When it comes to vehicle routing research, pollution reduction has become a big concern.

Available space in urban areas is a severe constraint because it is rare and expensive in most cities.

The traffic congestion that is common in every urban environment is causing more pollution every day.

The implementation of parcel lockers in last-mile logistics can be a good solution for this problem.

Customers can pick up their deliveries whenever it is convenient for them, avoiding the issues that come with residential deliveries while also lowering the environmental impact.

How Can You Overcome Routing Problems in Urban Areas?

Building an effective routing plan is difficult, which is why manual planning is time-consuming and inefficient.

Nowadays, there is a variety of software on the market that optimizes routes, tracks deliveries, and even provides proof of delivery, making urban logistics less of a headache.

Here are some tips on how to overcome routing problems in urban environments:

Plan Routes Ahead of Time

Assume you’ve mapped out all of your deliveries' routes and schedules.

Your customers are notified when their orders are expected to arrive, and your team is now operating at maximum efficiency.

But what if something unanticipated occurs?

After your drivers have left for their routes, you’ll need to make quick adjustments.

That’s why, in addition to planning deliveries ahead of time, you’ll require a dynamic route and schedule replanning.

This function allows you to quickly alter routes and plan better delivery schedules.

All of the data is automatically updated on the phones of your field crew.

So, even if something does happen, you will be able to respond.

You should make sure that all of your orders arrive on schedule without any errors.

Use Physical Stores as Warehouses

Due to a lack of space and high real estate prices, finding a warehouse can be a problem in urban areas.

Using your physical stores as both inventory and depot locations is one solution to this problem.

Shopping can proceed as usual in the front.

Your drivers, on the other hand, will arrive in the back to pick up orders for delivery.

Aside from the convenience of utilizing stores to stock inventory, it also saves your business money now and in the future.

Raise Visibility Over the Last Mile

While last-mile delivery in cities has its challenges and it might be hard to increase visibility, there are advantages to investing time and money to improve it.

Some of those advantages include:

Live location and ETA for active employees

Employers can check the current position and ETA (estimated time of arrival) of active staff with real-time visibility for dispatch and customer service teams.

The ETA is vital since you’ll want to be able to communicate it to your consumers and utilize it for planning.

Improve customer experience

You can expect your customers to return if you improve the customer experience and meet or surpass their expectations.

Typically, this should result in increased sales and revenue for you.

In this case, word-of-mouth is also crucial.

When someone has a negative experience with your business, they aren’t hesitant about sharing it on social media or giving your business a bad review.

This could be detrimental to your overall brand.

Make sure that your employees are being efficient and effective

It would be hard to improve your routing operations without the last-mile visibility and driver tracking.

It’s not a bad idea to think about your options given the possible cost and time savings from optimizing your last mile delivery and raising visibility.

How Can Route Optimization Software Help You?

Automatically Plan Routes

Many businesses still use manual tools to dispatch and arrange activities.

Manual planning is especially hard when you have to plan routes for all of your fleet’s vehicles.

This task is much easier with delivery route optimization software.

Aside from planning vehicle routes, the software estimates the best, most efficient route for your drivers.

And you can do it regardless of how many stops and orders you have, or the size of your fleet in terms of vehicles and drivers.

Adjust Routes On-the-Go

When drivers get on the road, fleet managers and dispatchers know that anything may happen.

If a vehicle gets stuck in a traffic jam or a driver is delayed due to a customer, the pre-planned route and schedule can be severely disrupted.

As a result, routing software is a great solution.

With routing software, you can make real-time changes to delivery schedules and routes.

So, if something goes wrong, dispatchers will be contacted right away.

Then, in response to the situation, modify the route or timetable to account for the delay.

This assures that all orders are delivered on time to clients.

With last-mile delivery, you can preserve your company’s image while also increasing brand recognition.

Plan Better Delivery Schedules

Aside from route planning and optimization, implementing software provides another benefit:

You’ll be able to plan more efficient delivery schedules.

When you plan a route, the software creates a schedule for each driver automatically.

You can then change the timetable based on order priority or delivery type, for example.

These schedules are also more precise because you aren’t manually planning routes. Furthermore, each stop along the route offers a more precise estimated time of arrival (ETA).

This can assist you in scheduling extra deliveries or avoiding traffic congestion at pick-up.

It also allows you to take your service to the next level by giving your consumers a more exact delivery time.

Track Drivers and Orders

There are various reasons why driver tracking is important:

Like vehicle monitoring, it allows you to track your drivers' location the whole time they’re working on the delivery. And for the entire fleet.

This lets dispatchers know the following:

  • What exactly your drivers are doing
  • Next stop on driver’s route
  • Completed tasks
  • How well your drivers are performing
  • If all tasks are done in time

This information can help dispatchers to improve fleet dispatching. And keeps drivers on schedule and predicts more accurate estimated time of arrivals (ETAs).

It can also help make adjustments to routes on the go, and plan deliveries as orders arrive.

Once drivers leave for their routes, this is what provides your office teams more visibility and control over the fleet. As a result, you’ll be able to create a more agile delivery system.

It also provides useful information about driver behavior.

That can assist you in identifying possibilities to improve efficiency. As well as uncovering dangerous driving habits and preventing accidents.

Monitor Delivery KPIs

Using the software is necessary in order to track order accuracy and other KPIs.

You can monitor productivity throughout the entire fleet by tracking key performance indicators (KPIs).

This isn’t simply for keeping track of driving performance. It allows you to evaluate the entire delivery procedure. As a result, you’ll be able to identify waste and chances for development.

Once you have this information, you may put strategies in place to improve your delivery. Also, use KPIs to check if your efforts are increasing efficiency.

You can also enhance your last-mile delivery in cities over time because you can analyze KPIs at any time.

But there’s more.

And we’re here to help you.

Here are the nine free guides that will show you exactly what we do to optimize the last mile and dominate delivery logistics.

1. How you can drive MORE sales with local delivery

2. A step-by-step guide to building your food delivery business

3. Save time with delivery management software: How much do you ACTUALLY save?

4. Want to use delivery management software to WIN OVER customers? Here’s how

5. The challenges in last-mile delivery you need to overcome to crush order fulfillment

6. Grocery Delivery Software

7. Transportation Costs: A breakdown of how much you spend on delivery

8. Route optimization with Google Maps: Does it REALLY work for business?

9. How much does delivery software cost? A breakdown of your investment

Try it out for FREE

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BOOK A DEMO or START A FREE 14-DAY TRIAL (with a step-by-step guided setup) right now to learn more. No questions asked except one:

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