Manage Pickup &

Delivery Logistics
with Ease:
What Is Route Optimization
and How Can It Transform
Your Business

– Lessons Learned from Mappost's Experience –

Chapter 1

The Need for Route

Optimization in
Business
 02

In today's fast-paced business world, companies must

manage complex logistics operations to meet
customer expectations while maintaining operational
efficiency. However, traditional, static routing
processes often fall short in delivering timely and
efficient deliveries, especially in the post-Covid era,
resulting in increased fuel costs, longer delivery times,
resource shortages, missed deadlines, unhappy
customers, and other operational and financial
consequences.

We draw on our experience of over 10 years in the

industry to explore the challenges that companies
face when managing complex logistics operations, and
why implementing route optimization software is
crucial for improving processes. As the logistics
environment continues to evolve, it's important for you
to stay ahead of the game and be on the lookout for
any challenges that may arise in your company!

SAVE
Up to
of transportation
20% costs

Up to
of CO2 emissions
15%

At least of route planning time –

40% the most scarce resource

address that your business may

operational have never encountered
challenges before, which require quick
solutions without the luxury
of prior experience
 03

Pain Points in Complex

Logistics Operations
If you're in an industry that handles complex logistics operations, you're well aware of the
challenges that come with it. Take, for example, a large postal & courier services business
that deals with thousands of orders daily, or any type of company that manages a large
network of delivery & pickup vehicles and drivers. In our experience working with clients,
we've witnessed how these pain points can significantly damage operational efficiency:

Traditional, static routing processes are effective only when the business remains
unchanged, such as fixed customer locations and demand characteristics,
Customers expect speedy delivery, regular updates about delivery status, reliable
customer service,
Changing demand volumes for each client/object,
Conflicting conditions, such as time windows, VIP customers, employee skillsets,
working hours and availability, and more,
Special object-job performer compatibility cases require specific employee skillsets or
working time/wellbeing conditions,
Merging businesses and/or acquiring new territories to service,
Purposeful integration of online data from IoT sensors indicating the need for an
object visit or online orders,
Poor transparency and visibility into operations make it challenging to track deliveries
& pickups from the time of order to the moment of vehicle returning to the base,
Change of vehicle fleet, such as transitioning to electric vehicles with different range,
capacity, and recharging requirements, requiring a different approach to routing
(becoming more important due to planned legislation, such as the EU's Clean Vehicles
Directive, and the UK's 2030 ban on the sale of new petrol and diesel vehicles)
Sustainability, carbon credits, and ESG compliance require companies to manage
employee work volume and hours responsibly. Route optimization is a way to plan
volumes realistically and treat employees responsibly (or conclude that without changing
your current approach and processes, it is impossible to fulfill your business goals and fit
into the given constraints).
 04

The Consequences of Not Having

an Optimized Logistics Process
We have witnessed that many companies are still relying on outdated methods, such as
dispatchers communicating with drivers one-on-one via messaging apps like WhatsApp,
sending unstructured photo evidence from task locations, or using paper invoices and sheets
for route planning and task reporting. The financial and operational consequences of not
having an digital and optimized routing process can be severe, including:

Increased fuel costs and CO2 emissions due to inefficient routing and unnecessary trips
Wasting the most valuable resource, which is human capital and their time, on tasks that
could be automated, structured, and handled by decision support systems. According to
PwC International Wage Projections, labor costs will continue to rise with a projected
increase of around 30% by 2040, and according to IRU, EU driver shortage is expected
to triple, reaching 2 millions already by 2026
Longer delivery times and ignored customer time windows that damage customer
satisfaction
Missed deadlines that can result in lost business opportunities
Unnecessary expenses associated with overtime and other inefficient work processes
Chapter 2

The Power of
Route Optimization
 06

In any organization that deals with deliveries or

pickups, it's essential to have an optimized route
planning process to ensure the smooth running of
operations. In this chapter, we will dive deeper into the
power of route optimization and how it can benefit
businesses dealing with complex transportation needs.

Dynamic Routing:
Dynamic routing is an approach to route optimization
that takes real-time data into account to create the
most efficient routes possible, still meeting the
deadlines, limits and restrictions set, or highlighting
tasks, which can’t be fulfilled in line with limits. With
dynamic routing, the route plan is not fixed in advance,
but rather is continually updated based on real-time
information. In practice, dynamic routing involves
using a combination of IoT sensor data, GPS tracking,
and customer feedback to continuously adjust the
delivery route.

Dynamic routing enables businesses to be more

responsive to changing conditions and customer
needs, thus allowing to charge customers according
to service provided. For example, if a customer
requests a change to their delivery time or location,
you can quickly adjust the delivery route to
accommodate the change. Another advantage of
dynamic routing is that it can help businesses optimize
their fleet utilization by ensuring that vehicles are
always being used efficiently. In addition to real-time
adjustments, dynamic routing can also incorporate
predictive analytics such as predicted service times
for each object and plan routes accordingly.
 07

Simultaneous Pickup and Delivery

Orders:
Another benefit of advanced route optimization systems, like Mappost, is the ability to
simultaneously plan for pickup and delivery orders. A study published in the International
Journal of Advances in Scientific Research and Engineering found that the use of
simultaneous pickup and delivery orders can reduce the distance driven by 30%.

Mathematics and Route

Optimization:
Route optimization is a complex problem that involves finding the most efficient way to visit a
set of locations while considering a range of constraints, such as delivery windows, vehicle
capacity, traffic conditions, and driver working hours.
At the base of the problem is the Vehicle Routing Problem (VRP) which is a combinatorial
optimization problem that involves finding the optimal set of routes for a fleet of vehicles to
visit a set of customer locations.

The magnitude of the problem Mappost solves

Vehicles Objects Obj./route Possible dispatch scenarios

1 5 5 120

1 10 10 3 628 800

1 25 25 ≈1.55×10^25

5 50 10 ≈1.52×10^65

10 250 25 ≈3.23×10^493    

15 4500 300 ≈3.41×10^14487   ∞→

*for reference: stars in the Universe ≈10^23
 08

From our experience on real-world customer cases, we

have realized that for the system to be effective at
solving VRP in real-life applications, it has to consider
constraints that purely theoretical models do not usually
entail, for example:

the side of the road to approach the customer from,

the ability to make U-turns at intersections and dead
ends,
multiple routing profiles for different types of
transportation (cars, trucks, bicycles, pedestrians),
the need for driver rest times,
social responsibility (e.g. not driving a large truck by
a school from 7am to 9am in the morning),
the ability to plan and change routes in real-time.

Heuristic algorithms are typically used to find optimal

solutions for large problem instances since it is not
feasible to examine and evaluate all potential scenarios
within a reasonable timeframe.

Regarding heuristics, for more complicated use cases or

for efficiency of the simpler ones, at Mappost we design
and implement heuristics, which are specifically targeted
at the customer’s use case and their VRP model.

Combining theoretical knowledge with an understanding

of practical challenges businesses face in the reality to
solve VRP is an important part of Mappost’s competence.
Overall, the mathematical techniques used to solve the
VRP are highly complex, but they are critical for
optimizing delivery operations and reducing costs.
 09

Case Study
To give you a better idea of how route optimization works in practice, let's take the
example of a business that needs to plan routes for 300 objects with different delivery &
pickup conditions and 15 vehicles. In this case we assume drivers work 8-hour shifts,
each vehicle drives around 250km daily and consumes an average of 10L/100km. Using
Mappost route optimization software, the planning process of such magnitude would
take around 3-4 minutes, including data validation, to plan and assign routes for each
driver. With typical assumptions about hourly wages and average emissions, we can
estimate that with Mappost company of such size could save up to 20 800 EUR and more
than 3100kg of CO2 emissions per month.
Chapter 3

Real-Time Data and

Analytics for
Optimizing
Logistics Routes
 11

One of the key benefits of real-time data in routing Some of the industries
is the ability to optimize routes on the fly. Real-time that can benefit from
data can come from various sources, such as GPS route optimization
tracking, RFID tags, or IoT sensors. technology:

As demand volumes continuously change and new

orders come in, businesses can use this data to
optimize and adjust their routes and ensure that
they are meeting their customers' needs. For
example, IoT sensors can trigger low stock
vending
alerts, which automatically puts the affected
and equipment servicing
objects in the next day's routes. This ensures
that the business is always providing the best
possible service to its customers.

Integrating real-time data with basic business

systems like ERP, CRM, and accounting systems is forestry &
essential to ensure that everyone in the business is
agriculture
aligned and has access to up-to-date information.
This integration ensures that the team can follow
what is happening with deliveries, track KPIs,
and monitor operations with the help of business
intelligence, allowing the business to operate more
efficiently and make data-driven decisions.
postal & courier
Real-time data and analytics can also help deliveries
businesses optimize their resources, such as
vehicles and employees. For example, in some
cases, cars can be at employees' homes and
there is a necessity to start daily routes at
different times from different locations. Route
optimization software considers employee start
and end locations (like returning to home locations food and drink
after the daily routine) to plan routes that are both deliveries
efficient and convenient for employees.
Chapter 4

Choosing the Right

Route
Optimization
Solution
 13

With the right route optimization solution, businesses can reduce costs, save time, maximize
efficiency, and enhance customer satisfaction. With so many solutions available in the
market, it can be challenging to identify the right fit for your company's specific needs. In this
chapter, we will discuss key features to look for when selecting a route optimization solution
and how Mappost's solution can meet these requirements.

Technical Performance
Capabilities and Scalability
When evaluating route optimization solutions, one of the critical factors to consider is
technical performance capabilities. Put simply – the problem size and complexity the
optimization provider is actually ready and capable of solving efficiently. The solution
should be able to handle the company's current and future needs in terms of routing,
number of orders, and number of drivers. It should also be able to scale up or down as per
the company's requirements. The solution must be able to process data quickly and provide
real-time updates to the drivers and dispatchers.

Mappost's solution is built on advanced in-house developed algorithms that can process
complex data sets in real-time. It can handle large volumes of data and optimize routes
within minutes, even for complex scenarios. We can take an example for a postal service
customer case where Mappost's solution currently handles 2000+ of daily orders,
hundreds of drivers and dozens of parameters simultaneously, providing an optimized
solution in less than 30 minutes.
 14

Integration with
Existing Systems
Another critical factor to consider is integration with
existing systems. The solution should seamlessly
integrate with the company's existing ERP, CRM,
accounting, and other business systems to provide real-
time data exchange. The solution should be able to
communicate with these systems and share data related
to deliveries, driver performance, and other relevant
KPIs.

Mappost's solution is designed to integrate with existing

systems. Its API can be used to integrate the solution
with various third-party systems and Mappost team has
experience in developing custom customer data
integrations if necessary.

Supplier’s Ability to
Adapt
Businesses have unique requirements when it comes to
their operations and routing software must be able to
accommodate that – be it used cooking oil collection
on rush hours, waste collection in high-end
residential areas or refilling of coffee vending
machines based on real-time data. Therefore, it is
essential to choose a solution that can be customized
based on specific business needs and stay clear of black-
box solutions. As we know and believe – your business is
unique!
 15

We have learned from experience that adapting our system directly to our clients'
businesses is key to achieving optimal results. Mappost's solution allows businesses to
customize routes based on their specific requirements, considering various factors, such as
driver availability, employee-object compatibility cases, time windows, and countless others
while optimizing routes. Every parameter and factor can be modified by a dispatcher within
the Mappost system, making it easy to accommodate any changes as they occur.

Industry Experience
The route optimization solution provider's industry experience is also an important factor to
consider. Mappost has worked with businesses across various industries, including postal &
courier services, vending, waste management, forestry & agriculture, food delivery, road
maintenance, and others. We understand the unique challenges faced by businesses in
these industries and have tailored our solution to meet their specific requirements.
Chapter 5

Getting Started
with Route
Optimization
 17

If you're considering implementing route optimization into your business operations, this
chapter will provide guidance on how to get started and which may be the indications that
your business needs to consider route optimization.

Identify Pain Points

When getting started with route optimization, it's essential to first identify the operational
pain points and inefficiencies in your business. For instance, consider factors such as cargo
weight, types, and delivery & pickup locations, data availability, customer feedback, and
others. Additionally, it's crucial to evaluate the vehicles you use, their capabilities, and their
current routes. With this information, we can start developing an implementation plan that
meets your business needs.

Implementation Process
The implementation process for route optimization solutions will vary depending on the
solution and existing systems and processes. Data collection, analysis, homogenization, and
validation ensure seamless integration with your existing operations. Solution's compatibility
with your existing systems, such as your CRM, ERP, or accounting software is also important.
Sometimes, the implementation of an optimization system can trigger a complete review of
existing delivery&pickup processes, leading to the removal of inefficiencies accumulated over
time. This presents a good opportunity to refresh and upgrade the entire process to meet the
current pace of the times.

Training and Support Services

Route optimization solutions will require some training to ensure that your team can use
them effectively. It's essential to consider the type of training and support services offered by
the solution provider and whether it meets your business needs. At Mappost, we understand
that every business has its unique processes and details, and we take the time to dig deep
and offer tailored training and support for each client.
 18

When to Consider
Business changes, such as the development of new products or services, expansion to new
areas or service types, changing customer preferences, customer segmentation, fierce
competition and/or change in competitor landscape, among others, may trigger the need to
consider route optimization. Other factors that may prompt the need for route optimization
include customers requesting more frequent and clear status updates on their orders, cargo
weight restrictions, observance of work-rest mode for drivers, and transitioning to electric car
fleets with different ranges and power capacities. Mappost provides a range of features that
cater to these requirements and can help businesses optimize their routing and operations.
We are one click away and ready
to dig deep into your problems
and bring experience-based
solutions!

info.mappost.eu