How Are Companies Using Delivery Route Optimization to Combat Labor Shortages 

• How to overcome labor shortages with smart strategies and route optimization. 
• The key benefits of route planning, including reduced costs and increased productivity. 
• How technology can help your fleet operate more efficiently with fewer resources.

In today's rapidly evolving logistics landscape, distributors managing fleets face constant challenges, especially as labor shortages continue to disrupt operations. For fleet managers, improving efficiency, keeping costs down, and ensuring smooth operations are essential to maintaining customer satisfaction.  

A major contributor to these challenges is the ongoing labor shortage, particularly in sectors requiring drivers. However, solutions like route planning and optimization can mitigate these issues and help distributors maintain operational efficiency. 

The logistics industry, especially the last-mile delivery segment, has been hit hard by labor shortages. Factors such as high turnover rates, an aging workforce, and the surge in demand for delivery services have exacerbated this shortage.  

Distributors managing last-mile delivery, are finding it increasingly difficult to hire and retain drivers, which directly impacts the overall efficiency of their operations. 

To counter these challenges, distributors must focus on smarter strategies, including utilizing advanced solutions that reduce the need for extensive labor while improving operational processes. Delivery route planning, optimization & dispatch solutions allow companies to work around the labor shortage by increasing efficiency and maximizing the productivity of existing resources, allowing businesses to do more with fewer resources 

In fact, according to Descartes’ latest study, “What Are Companies Doing to Survive the Supply Chain and Logistics Workforce Challenge?”, 54% of businesses cited delivery route optimization as their top technology choice to mitigate labor shortages, while 45% relied on driver mobile productivity solutions. 

By using route optimization solutions, fleet managers can better plan daily operations, ensuring drivers follow the most efficient paths. This not only reduces fuel consumption and operational costs but also allows the business to meet demand even with fewer drivers.  

With fewer hours on the road, companies can deliver more orders per driver shift, which is crucial in an environment where finding qualified drivers is increasingly difficult. 

The benefits of route optimization go far beyond simply reducing the number of miles driven. It has a direct impact on operational costs, fleet performance, and customer satisfaction. Here’s how: 

1. Fewer Driver Hours Required: Route optimization allows companies to streamline delivery schedules, reducing the number of driver hours needed to complete a set of deliveries. This is particularly important when driver availability is limited. 

2. Lower Costs: By reducing fuel consumption, wear and tear on vehicles, and the number of miles driven, route optimization significantly cuts operational costs. In addition, the need for fewer drivers results in lower overall labor expenses. 

3. Increased Productivity: With optimized routes, drivers can make more deliveries in less time, improving productivity and helping the business meet delivery expectations despite labor shortages. 

4. Improved Service Levels: Faster and more efficient deliveries lead to higher customer satisfaction, as customers receive their orders more quickly and reliably. With fewer delivery delays, businesses can maintain a competitive edge in today’s fast-paced marketplace. 

5. Scalability: Route optimization allows businesses to scale their operations even with limited resources. By improving efficiency, companies can handle increased demand without the need for additional hires. 

For many distributors, adopting advanced technology is the key to overcoming labor shortages. Delivery route optimization is just one example of how technology can streamline operations, but other solutions can also play a role in addressing labor challenges: 

1. Fleet Mobile Apps:  Fleet mobile applications equip drivers with the tools to execute routes efficiently, handle disruptions, and capture proof-of-delivery details. Real-time GPS data enhances delivery visibility for managers and dispatchers, enabling timely adjustments and immediate issue resolution. 

2. Automation and AI: Automation tools, such as automated scheduling and real-time route adjustments, help reduce the manual effort required in fleet management, allowing companies to operate more efficiently with fewer employees. 

3. Data-Driven Decision Making: Fleet managers can use data from route optimization solutions to continuously refine their operations. By analyzing performance metrics, businesses can identify areas for improvement, further enhancing efficiency. 

 The logistics sector increasingly recognizes the critical role of advanced technologies in addressing workforce shortages. The referenced study shows that 68% of U.S.-based logistics companies view tools like route optimization as vital to bridging labor gaps. As distributors prioritize operational resilience, this trend is set to accelerate, underscoring the strategic value of technology investments to sustain efficiency amidst ongoing labor challenges. 

At Descartes, our end-to-end delivery management platform provide comprehensive solutions for routing, execution, enhanced safety, and customer engagement. From optimizing delivery routes and ensuring smooth execution to improving driver safety and enhancing customer communication, the all-in-one platform is designed to streamline operations across every stage of the delivery process. 

For businesses facing labor shortages in logistics and delivery, now is the time to invest in route optimization technology. Descartes' Routing, Mobile and Telematics solutions help you stay competitive by boosting efficiency and addressing one of the industry's biggest challenges. 

Labor shortages don’t have to slow you down. With Descartes, you can continue to deliver more with fewer resources while maintaining high customer satisfaction.  

Access our study today and connect with one of our last-mile solution experts to learn how we can help maximize your fleet’s potential.