Route Optimization Software Market - Global Industry Analysis, Size, Share, Growth, Trends and Forecast 2018 - 2026


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Transparency Market Research

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Route optimization is route scheduling software which improves operational efficiency through better route scheduling. Route optimization is the process of selecting the optimal route considering the factors such as customer’s and driver’s time constraints, vehicle issues, and route availability to ensure low transportation cost. Route optimization software tests multiple scenarios to review the cost of different route options, so as to generate the route planning schedule with optimum cost and in real-time to deliver priority service. Route optimization software maintains customer service objectives and helps deliver quality service within the timeframe. It helps companies reduce operating costs, minimizing fuel usage, total route distances, stop duration, and average miles.

Route optimization is achieved using advanced heuristics computer algorithms. Route optimization software identifies parameters such as number of turns, intersections, nearest driver, real-time traffic congestion, etc. along the route. Analyzing these parameters gives the optimum solution/route, thus helping in minimizing travelling distance, and fuel usage, improving on-time performance, and offering accurate departure and arrival times. Functions performed by route optimization software include planning and managing routes, defining territories, optimizing appointments, etc. These functions reduce travel time and miles, increase available resources, and enhance customer service which drives the use of this software across different industries. The adoption of route optimization software is increasing mainly in the service sector. Taxi services and home food delivery services are using route optimization software to ensure faster deliveries and reducing the overall logistics costs.

Increasing cost in the logistics sector, fuelled by factors such as fuel expenses, manpower cost, and lower turnaround of vehicles is the key driver for the growth of the route optimization software market. Logistics costs are increasing, creating the need to reduce operating expenses. Therefore, the logistics sector strives to become efficient in the way it manages transportation costs, and in turn the transportation routes and schedules. This drives the growth of the route optimization software market.

Route optimization software vendors are distinguishing themselves based on features offered. The software is provided with features such as real-time tracking, automated real-time resource allocation, iOS and Google Play support, support for multiple browsers such as Chrome, IE, and Firefox, and alerts for delivery and delays. Vendors also offer industry-specific route optimization software. Cloud route optimization software is gaining traction in the market. Companies such as Descartes Systems Group are offering optimization engines in the cloud and cloud computing support, thus creating technical advantage.

The global route optimization software market is segmented on the basis of component, deployment type, end-use industry, and region. The market is segmented on the basis of component into software and services. In type of deployment, the market is segmented as on-premise and cloud based. Cloud-deployed route optimization software is expected to gain traction as the vendors distinguish their offerings from competitors and strive to stay at the technological forefront. On the basis of the end-use industry, the market is segmented into retail and FMCG, taxi, food delivery, homecare services, and others. Retail and FMCG is the key segment driving the route optimization software market with highest adoption.

On the basis of geography, the route optimization software market is segmented into North America, Asia Pacific, Middle East & Africa (MEA), South America, and Europe. Geographically, Asia Pacific is expected to be the fasted growing region in the market.

Key players in the route optimization software market include The Descartes Systems Group Inc., Verizon, FLS- Fast Lean Smart UK Ltd., Route4Me, Inc., Paragon Software Systems plc, and OptimoRoute, Inc. These companies are the early players in the route optimization software market striving for competitive advantage by offering unique features and integration capabilities in their products.

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  • Competitive landscape and key players’ strategies

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