Near-real-time data-driven route optimization best practices

Jason VanoverFreight Market Blog

One of the most significant challenges facing logistics managers is route optimization. With so many shipping modes and options to choose from and a wealth of innovative technology to take advantage of, it can quickly become overwhelming and confusing. Data represents an integral part of daily life for most people, and it is no different within the transportation industry. Proper access and application of real-time data change, such as the ticker comparison above, showing how initial savings in intermodal start compare to rejections over the last three months, can provide insight for optimization. That insight into how freight logistics and optimization rely on data and understanding the full picture is critical to making the best improvements in supply chain route optimization too. And it’s important to know a few best practices to achieve that goal.

1. Capture market data in near-real-time

Real-time data represents a valuable tool for logistics managers when planning and adapting routes for the real world. Route optimization relies on fast and intelligent responses to real-world situations that may arise during transportation. Accurate and up-to-date data remains the best way to ensure everything runs as smoothly as possible. 

2. Identify hot versus cooling markets

The market constantly changes as demands shift and service availability rises and falls. Trends come and go, needs wax and wane, and the one thing that stays the same is the reality that everything changes.  Freight management represents a vital part of market adaptability. 

Predictive data analysis allows managers to tweak and adjust route optimization and shipping protocols to accommodate market demands. Shifting quickly and easily from cool markets to hot markets or vice versa, depending on segment and what data into the full shipment lifecycle shows, can help set companies apart from their competitors in a powerful way.

3. Optimize routes based on the whole picture, including intermodal

Optimization of delivery lanes represents a different and much more involved approach than it looks on a paper map. As highlighted by FleetOwner, traffic jams, vehicle problems, major weather events, customs and border issues and construction projects can delay delivery and disrupt normal transportation flow. The actual test of how well a route optimization system is applied is not creating the shortest line between point A and point B, but how quickly it can adjust and respond to alerts, disruptions and problems. The whole picture requires close attention when it comes to optimizing shipping routes in the modern supply chain.

4. Reduce your carbon footprint by implementing better optimization protocols in place

Moreover, route optimization today involves more than simply getting cargo from one location to another as quickly as possible. More than saving money by optimizing routes and shipping protocols must be addressed with route planning. The modern supply chain has to be mindful of sustainability, fuel consumption, pollution rates, collaboration opportunities, and the focus on going green. Consumers today want to do business with businesses that share their values and passion, and reducing carbon footprint impacts is one way to align with consumer interests.

5. Tender loads at competitive rates that are likely to get the attention of LSPs

Staying competitive helps ensure reasonable service rates and procedures remain a crucial focus for managers. When working with LSPs and other third-party vendors, competitive rates and services can be a key influence on networking partnerships. Reasonable rates and service packages can help improve vendor relationships and boost route optimization.

6. Use weather data and other apps to avoid risks and delays

Route optimization also involves predictive planning for how to deal with risks and delays associated with weather. Careful planning and monitoring with real-time data and updates can make it easier to be proactive rather than reactive in many cases. Shifting to another route might add 60 minutes to the delivery time, but it also highlights a much better option than staying on course and being delayed for hours due to a weather anomaly. Data is critical for these kinds of optimization and protocols. 

7. Always think about the strategic value of route optimization

The final tip for supply chain management regarding route optimization practices entails keeping the big picture in mind. The value of strategic planning and real-time data analysis cannot be overstated. It takes time to plan and implement, but will yield results now and down the road as well. Keeping a keen eye on the future, short-term and long-term, will continue to be a vital aspect of the modern intermodal supply chain network. 

Embrace data-driven management with the right data resource

Proactive supply chain management begins with understanding current operations, including knowing how market stability plays into RFP processes. Find out more about how your organization can gain those lane-level insights by requesting a demo of FreightWaves SONAR SCI Lane Acuity today. And continue on with those insights to understand how your current rates may contribute to a higher incidence of outbound tender rejections (OTRI), applied intermodal contract savings versus truckload (IMCSI) and more within FreightWaves SONAR. Request your demos below.