In today’s society, the transportation of goods is an important task. On a daily basis, people must send packages, documents and other important things from one location to another. How can new solutions for transportation improve the logistics industry?
Most clients expect to receive a package within 1–2 days. This makes the courier service industry an essential tool in the belt of each company. For this reason, the aim of courier companies is to ensure that the package delivery process meets the clients’ highest expectations. In order to achieve that, every day courier companies spend huge amounts of money on fuel, equipment and its maintenance as well as salaries.
Time is money, and picking the most efficient route for package delivery may substantially lower the time needed to complete these deliveries. They should contribute to cutting the costs of transportation. Even minute improvements and optimized routing may result in a considerable improvement of absolute terms. We may make the routes shorter, economize fuel consumption, and also lower CO2 emissions. Companies may use their resources more efficiently. This will increase the quality of a customer service and create savings in transportation.
Modern solutions for transportation uses VRP
The Vehicle Routing Problem (VRP) applies to planning optimal routes of pick-ups and deliveries. This includs from one or multiple depots to a number of geographically scattered clients. These problems can be encountered in a wide range of industries, including courier services, where optimal routes play a major role. Recently, these type of services have become hugely popular. Hence, it is worth examining the solutions, which will improve the area of courier services, thanks to the application of the VRP algorithms.
The VRP algorithms not only offer an effectively planned route that satisfies delivery-related expectations. Their implementation may also contribute to solving problems linked to various client requests, such as their time preference (time windows) or delivery method.
The Courier Delivery Problem (CDP) is one of the elements comprising the Vehicle Routing Problem with time windows (VRPTW). This address the issue of uncertain time for the performance of the service. The problem is the process of package pick-up and delivery. It particularly concerns the courier companies that render services in densely populated, urban areas.
In these conditions, the travel time between locations is rather short. Therefore, one may assume that the courier’s transit time in an urban area is usually fixed. On the contrary to the number of ordered deliveries and the expected time of their delivery. These are hard to predict and change dynamically.
Examples from the market
Let us examine a situation in which a courier has to deliver several packages and pick up packages from a number of places. As an example, we may take offices located at one address, such as a large office building where multiple companies have their quarters. Each company may have a different preference for courier services. For this reason, the problem of managing deliveries should take into account the parameter of uncertainty. It results from the fact that the processing time is unknown. What is more, the daily influx of delivery orders placed by potential clients has no fixed delivery time.
The solution which is viewed in the logistics business as simple in the context of the CDP, is specifying a daily schedule of the consignment route.
They take into account the following data:
- the location of the delivery indicated by the client
- time requirement for the completion of the courier service.
It is possible to implement this solution if the data is provided at the beginning of the day. If the geographical area and timeframe specifying the regularity of the courier service cannot be stipulated. This method may not prove helpful in organizing a daily shipment schedule. This may result from not providing a sufficient level of coherence, or regularity of the solution necessary in courier practice.
Regional planning
One of the methods used to plan coherent and optimal delivery routes, is regional planning. It refers to the process of creating a realistic management plan. In this case routing consignment to appropriate clients, establishing profit targets and ensuring an increase of sales over time. In other words, regional planning is assigning regions where courier services are performed to drivers. They take into account the planning horizon. It is the amount of time a courier company will devote to preparing a delivery plan. The differences in demand are handled by adjusting the borders of the regions.
A solution that has recently gained popularity is the Consistent Vehicle Routing Problem (ConVRP). The ConVRP takes into account customer satisfaction and assigns a single driver to the client. The changeability of the hours when the courier arrives in a given time horizon, is limited. According to the ConVRP principles, limited number of drivers may visit each client. The courier may not modify the arrival time.
The goal of introducing the coherent VRP is finding the routes where the same drivers will visit almost identical clients. Everyting during around the same time. Each time a client needs to use courier services. What is the difference between the ConVRP and the CDP? In the CDP, matching drivers to clients is not a clear priority. On the other hand, the ConVRP does not consider the time window limitations, nor the uncertain timeframes of performing courier services.
What about traffic?
Effective driving in urban areas requires taking into account information about the typical, recurring traffic intensity for a given area. Time Dependent Travel (TDT) offers information about recurring impediments and standstills in urban traffic. Contrary to average travel time or distance, TDT allows for predicting typical phenomena in urban traffic. This results consequently in arriving at the most reliable delivery route.
Advanced technology affords most courier companies the ability to offer courier pick-up and delivery, in the locations and time windows selected by clients. As a result, a limited number of vehicles has to process a range of transportation requests and handle other various limitations. Each vehicle has a specified capacity. Each transportation request specifies the parameters of the shipment. The location of pick up is important, as well as the time window of the pick-up and delivery. Not to forget about the place where the package will be delivered.
Satisfying clients’ needs – this is what logistics industry are looking forward to. Tailoring the most optimal transportation schedules, will facilitate fleet management.
Savings on transportation is crucial in logistics industry
At first look, courier services may seem straightforward. However, the constantly changing business needs and internal processes render them extremely difficult. In today’s world, technological advancement enables clients to track their items at any time.
Courier companies are increasingly under pressure to deliver products on time and eliminate delays. While doing that, they have to make sure that their overhead is not too high. The reduction of transportation costs necessitates that a number of factors. Those are, for example, traffic, fuel consumption, weather conditions, etc. By applying advanced VRP algorithms and software, it is possible to achieve optimal routing. We may also answer the question which route will limit a company’s transportation costs the most.