Route Optimization
Definition
Route optimization is the process of determining the most efficient sequence of stops and paths for delivery vehicles, minimizing distance, time, or cost while respecting constraints like time windows, vehicle capacity, and driver hours.
In Practice
Routing is a version of the vehicle routing problem: given a set of stops, vehicles, and rules, find the assignment and sequence that minimizes total cost. Real-world constraints make it hard: customer delivery windows, truck capacity, driver hours-of-service limits, site restrictions, and traffic all narrow the feasible options. Software solves this heuristically, and good solutions routinely cut fleet miles 10 to 30 percent versus manual routing.
For planners running a delivery fleet, routing is a daily or weekly cadence: orders are cut off, routes are built and balanced across drivers, and dispatch releases them. The metrics that follow, stops per route, cost per stop, and on-time window compliance, feed straight back into route design.
For example, a food distributor routing 900 daily stops across 45 trucks rebuilds routes each night, sequencing refrigerated deliveries to hit restaurant receiving windows while keeping each truck under its 10-hour driver limit.
Related Calculators
Related Terms
Last mile delivery is the final leg of a shipment's journey, from a local depot or distribution center to the end customer's door. It is typically the most expensive and operationally complex portion of the delivery chain.
Milk RunA milk run is a scheduled route in which one vehicle makes multiple pickups or deliveries in a fixed sequence, such as collecting parts from several suppliers on a loop and delivering them to one plant. The name comes from historical dairy delivery rounds.
Transit TimeTransit time is the elapsed time between a shipment leaving its origin and arriving at its destination. It is a core component of total lead time and a key input to inventory and delivery planning.
On-Time In-Full (OTIF)OTIF measures the percentage of orders delivered both on the promised date and with the complete ordered quantity. An order must pass both tests to count, making OTIF a strict combined measure of delivery service.