Delivery drivers are spending hours building their daily routes for delivering multiple packages in one trip.
Time is money for the delivery drivers. And the more time they spend planning the daily routes, the fewer deliveries they will do on the following day.
In 2020, more than 20 billion parcels were delivered in the United States, generating a collective revenue of $171 billion for the industry. And they couldn’t have achieved this marvelous figure if the drivers relied just on manual route plans.
Therefore, it becomes important for you to know better ways of planning and optimizing your routes.
You should then calculate how the better routes contribute to maximizing the productivity of your business.
Table of Content
What is Route Planning?
Route planning is the automated way of acquiring a trip plan for the delivery drivers to carry out multiple deliveries in a single transit.
It is a computing process that finds the most cost-effective route that is also the shortest possible option to save time for delivery drivers.
Route plans are offered through dedicated software that allows you to optimize or modify the automated route plan only if you need it.
If you are willing to save a lot of your planning hours, automating route planning is the initiative you should integrate.
What do you mean by ROI?
Return on Investment (ROI) is generally a formula for businesses to determine their investments and the profit possibility. Its use has excelled over time, defining how well a business is managed and operated with profit concerns in mind.
When using an ROI calculator to measure the operating cost and profit of your delivery business, you must know that every route you plan and transport on can either make or break your profit.
Therefore, even though ROI is calculated monthly or annually, you still need to perfect the execution for every route you plan.
Hence, this is why people spend to create smarter route plans through automated software. Every time you use the route planner for valuable time managing a transit plan, you should assess the factor of how fast you can retrieve the cost of that entire trip.
But the problem is that several business areas for setting up the delivery route need consideration for determining ROI. The best route planning software would offer you an ROI calculator to do the needful yourself, while others will take your data insights and prepare an estimated ROI for you.
Proper route planning will reduce your overall delivery costs. It does that by allowing you to get more efficiency out of every delivery shift, saving time, and handing over more parcels. You will also use fewer vehicles throughout the month or year than before using a proper route planner.
And eventually, the fuel use will drop as the miles traveled by a vehicle will be reduced with smarter route plans. So, you can conclude that route planning and ROI go hand in hand for a delivery business.
Therefore, it becomes important for delivery businesses and independent drivers to calculate their change in ROI after they start using professional route planner software.
To help you understand the calculation of ROI with route plans for delivery operations, here is an example for you to refer to:
Get an insight into the raw numbers associated with your business. For this example, suppose you are:
- Operating with ten vehicles.
- Spending 3 hours in manual route planning every day.
- Driving an average distance of 1000 miles.
- Paying or getting paid an average hourly wage of $13.40
- Deciding on average daily working hours per vehicle as 8 hours
- Considering the fuel price for every gallon as $2.85
When you input these elements in an ROI calculator, you will get the current cost per year without a route planner as $1,619,300. And if you are using an automated route planner, your yearly cost will be $1,353,735. You can calculate the money you will save with a route planner.
As per this example, you will save around 250 hours of planning time in a year using proper route optimization software. Additionally, it would also reduce the working hours by over 500 hours. You will then be able to make data-driven decisions for your business.
When your performance examination planned outcomes are stated through statistical insights, you will be in a better position to improve your ROI.
Steps to Calculate Route Planner ROI
Using a route planning ROI calculator, you might not need the formula or steps to calculate the ROI. But if you are willing to calculate it on manual measures, here are the following steps for you:
1. Get all the important figures concerning your company’s performance
You must have some information before calculating the current profit of your delivery business. The details you must collect are:
- Number of vehicles used
- Planning hours per day
- Average driving distance per day
- Average hourly wage or monthly salary
- Daily working hours per vehicle
- Scheduled maintenance costs
- Average fuel price per gallon to determine fuel consumption
2. Find the total cost you have to bear for the business
It is better if you have already calculated the same delivery cost for all of your transits. It will help you speed up the ROI calculation. If not, then do the mathematics to find out your operating costs.
3. Calculate the profit earned
Now, total up the income you earned in a month or year and tally it with your average operating costs. The formula to determine the ROI percentage is:
(Financial gain or loss Operating cost) * 100 = ROI percentage
Use a route planner and note down the updated figures as asked in Step 1. Check for the change you experience in terms of money and time savings to plan out your choice.
What are the Benefits of Using Upper Route Planner?
Upper Route Planner is your business assistant software to help you meet even the tighter delivery time windows with better routes. With it, you can save hours automating route planning aspects.
We are trusted by the top brands worldwide, such as Gordon Food Service, Deliveroo, Ryder, Pepsico, and many more. We plan on demand and can import stops, plan routes, optimize them and dispatch the route to the driver.
We serve many industries such as grocery, food, pharmacy, eCommerce, HVAC services, thrift stores, and inspection services. We are signed up to save your money on every truck that leaves your warehouse and heads out to make deliveries.
Benefits of Upper Route Planner
These benefits below will educate you on how we add profitability to every truck that leaves your warehouse to make deliveries.
1. Reduce the fuel consumption
You don’t have to send your trucks on manual route plans with longer miles anymore. It will cause delivery delays and cost your business more over time. Upper Route Planner claims to save you up to 40% of fuel consumption with valuable time managing aspects.
2. Saves your working time
Whether you are a driver or a delivery business, you must intend to save time on one route to utilize it for the next. Usually, the same delivery cost for one truck to complete a route will be reduced if the working hours are shrunk.
Upper Route Planner can help reduce your planning time and will help you find efficient routes that are shorter than usual. With these efficient routes, delivery at dedicated stops will be faster.
The drivers can earn more by working on more than one route in a day, whereas the business will be able to send out more deliveries and generate positive online reviews for the brand.
3. Collect reports and insights
Upper Route Planner also offers reports to give you an understanding of the performance of your delivery operations. You can analyze this report, amend the flaws, and make data-driven decisions.
Reduce Route Planning Time with Upper
Spending too much time on calculating the faster routes? Simply get the Upper Route Planner and automize your delivery process now. Switch to route planner and accomplish your business goals early.Start Using Upper
There is a general ROI formula for measuring sales is specified as:
(Financial gain or loss Project cost) * 100 = ROI percentage
You need to use the formula with accurate figures collected concerning your company to find the ROI of your business. If not, you can use the free calculators available online to do the needful.
An annual ROI of 7% is considered good for businesses, whereas smaller companies eye for around 15% to 30% of ROI, as they take more risks and expect better returns.
So, it is proven that an ROI calculator can do wonders for you to avoid spending hours building route plans for delivery operations. You can now determine how a route planner software can boost a business’s or individual driver’s earnings using the same resources.
Upper Route Planner can help you win the competition in the delivery sector. You can conduct the business more efficiently, even with tighter delivery time windows. Take a 7-Day FREE trial to learn more about its features and efficacies.