Have you ever wondered how FedEx, a logistics expert, handles its deliveries?
Here's a quick quiz: How many packages does FedEx deliver daily in the U.S.?
The answer is 3.4 million packages every single day.
Impressive, right? They must be doing something right! Let’s take a closer look at the FedEx world. You might pick up some tips for your own home delivery needs.
Just a heads-up: These insights come from FedEx Independent Service Providers (ISPs). This doesn't reflect the operations of the entire ISP network or FedEx’s internal workings.
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FedEx Ground and Home Delivery are the last-mile ground shipping services of FedEx, a major American courier company.
A single FedEx contractor or ISP can deliver between 500 to 2,500 packages daily, using fleets of 5 to 25 vehicles. So, how do they plan routes and manage so many deliveries efficiently?
Their biggest advantage is the large number of orders they get. This high volume makes their operations more efficient. On average, a FedEx driver delivers 75 to 125 packages a day, which is a lot compared to the home delivery industry average of 15 to 35 packages per day.
FedEx customers can create a shipment or schedule a pickup in several ways. They can use FedEx’s website, call the toll-free line, or visit their nearest FedEx store.
After orders are processed, they are automatically allocated to a designated route according to the zip or postal code. These routes, also called driver territories, are set up in advance. This allows ISPs to divide large areas into smaller delivery zones, so drivers don’t waste time driving all over the city. Each zone is assigned to a dedicated driver, letting them focus on a specific area, get to know the route and customers, and complete more deliveries in less time.
This means that as soon as orders are placed, FedEx contractors know right away which driver will deliver the package. These preset boundaries reduce the number of route options and logistical decisions, making route planning much faster and easier.
Read more: How to Optimize Routes with Excel in 2024 [+Is It Worth It?]
Before drivers get to the FedEx depot, packages are already sorted into piles by territory. Drivers can start loading their trucks right away, focusing only on their own pile. They use a barcode scanner to scan each package as they load it. If a package is in the wrong pile, the scanner beeps to alert the driver.
One useful tip from delivery businesses is to pack trucks in the order they'll be emptied during the route. This saves drivers a lot of time since they won't need to search through the cargo to find the right parcels.
Read: Discover More Route Planning Tips from Small Delivery Businesses
Within each route, FedEx drivers decide the order of their stops. Some drivers plan a roughly circular route, hitting each area in the same sequence. Others might load their truck by region, though this can be tricky if the back of the truck looks like this:
Because FedEx routes have a lot of orders close together, they can use simple rules like territories to plan routes.
However, these rules have limits. For example, we saw a situation where a FedEx ISP split an area into two, sending 7 drivers east and 7 drivers west. The issue was that the western area was much busier, handling over 70% of the daily volume. This meant drivers in the west were overloaded, while those in the east had shorter days and were often idle.
If your last-mile delivery business has more varied routes and addresses every day, relying on simple rules like territories can hurt your efficiency. You might end up with some drivers overworked and others underworked. This kind of imbalance wastes time and resources.
In such cases, using route optimization software daily can help. It simplifies route planning while improving efficiency. It considers factors like delivery time windows, vehicle capacities, and driver schedules.
Route optimization usually relies on algorithms because the process is too complex for humans to handle manually, especially quickly. It would take too much time to calculate all the different factors for finding the best route.
These algorithms tackle two major problems in computer science: the Traveling Salesman Problem (TSP) and the Vehicle Routing Problem (VRP). Solving these problems helps plan efficient delivery routes.
Algorithms can also handle unexpected issues like detours and roadblocks better than human dispatchers. For example, if a customer needs a delivery between 2 and 4 p.m., the algorithm can factor that in when planning the best route. It can also adjust for things like roadblocks, traffic jams, driver breaks, and last-minute changes. That's a lot to manage on the fly.
Using an algorithm not only improves performance but also gives you peace of mind that your drivers are on the best route.
If your delivery volumes are low, creating delivery zones can help improve efficiency. You can increase density and streamline operations. Simply assign specific days for deliveries within each zone and use the same driver for those deliveries. This means letting customers know they’ll only receive deliveries on certain days of the week.
As your volumes grow, consider shifting to daily, dynamic routes. It will help to reduce costs and handle more deliveries efficiently.
To sum up, here are some courier tips and new ideas for your delivery operations:
eLogii’s Engine API is designed to optimize fleets and help delivery businesses grow. You can use advanced routing algorithms to tackle your vehicle routing challenges.