Route optimization is essential to carriers’ CSR initiatives
- October 22, 2021
- 3 mins
[REPORT]
How can route optimization help
freight carriers in their CSR strategy?
In an increasingly digitalized world, where consumers’ voices are heard, social and environmental issues are now part of companies’ concerns. The growing collective awareness of these issues is pushing consumers to take a stand and to defend brands in their commitments and to position CSR (Corporate Social Responsibility) strategies at the heart of their operations.
Beyond the question of brand image, CSR helps companies stay ahead of regulations, differentiate themselves from their competitors, attract talent and new customers, and improve the well-being of their employees. For transport companies, the challenge of CSR is all the more essential as the industry is often accused of being environmentally unfriendly.
In this article, we will show how route optimization can support transport companies in their CSR strategy, based on the three key principles of economics, environment and society.
Reducing costs while aiming for customer satisfaction
In a highly competitive shipping market, the delivery costs charged to customers are decreasing, despite the fact that delivery times are becoming increasingly short and precise. In order to preserve their margins, carriers are therefore seeking to reduce their operating costs, in particular through the optimization of their transport operations.
Route optimization meets this need by reducing operational costs through a route plan that is as efficient as possible in terms of vehicles used, kilometers traveled, customers delivered and drivers’ working hours. Optimizing delivery routes allows for fuel savings on any unnecessary mileage. These gains are significant for carriers, as fuel represents 24.5% of the cost of transport (the second largest spending according to the French National Road Committee).
Route optimization also plays an important role in customer satisfaction. Delivering as quickly and accurately as possible is a real challenge for carriers but represents added value in a market where dissatisfaction is high: 54% of online shoppers had experienced at least one delivery problem in the past 12 months (OpinionWay survey for SprintProject and GS1 France in 2019).
Service quality is thus a competitive advantage and allows carriers to sustain their revenue and secure their business. Thanks to real-time route tracking, carriers now have the ability to react quickly to unforeseen events (delays, missed deliveries, traffic jams, accidents…) and to inform their customers of the exact arrival time of their delivery, for an ever more accurate and transparent service.
Reducing the environmental footprint
In the context of the fight against global warming, carriers need to provide a greener service, especially since cities are becoming increasingly strict in this regard. The city of Paris, for example, has already restricted access to diesel cars for both commercial and individuals, as well as heavy trucks that are too old and polluting. The city’s anti-pollution plan aims to have 100% clean vehicles on the roads by 2030. Carriers must therefore adapt their fleet of vehicles to be compliant with these new regulations. By optimizing their routes, they can reduce the number of vehicles used, cut down the number of kilometers traveled and avoid empty trips, thereby reducing greenhouse gas emissions. The Charte Objectif CO2 estimates that fuel consumption and CO2 emissions can be reduced by 5 to 15% when using a route optimization software tool. Furthermore, in order to maximize their environmental impact, many carriers are also looking to adapt their vehicle fleets by switching from a conventional fleet (diesel or gasoline) to greener vehicles such as hybrid or electric vehicles. However, the latter have constraints that must be taken into account: a limited range, a limited network of charging stations, etc.
In general, optimizing transport routes has other benefits for society: fewer traffic jams, less pollution in cities and less noise pollution thanks to the reduction in the number of vehicles on the road.
Improving the working conditions of drivers
We must not forget those who are at the forefront of these delivery routes: the drivers. As part of transport-related activities, CSR initiatives should include compliance with the labor rights of these professionals. The job of delivery drivers is quite difficult and exhausting:
- intense delivery schedules, especially in large urban areas with frequent and complicated stops
- stress and strain related to driving and traffic congestion
- working hours and breaks difficult to observe.
- carrying heavy goods, etc.
Route optimization makes it possible to set limits on the working hours of delivery drivers and to balance deliveries in order to avoid excessive variations in their working hours. By improving their working conditions, delivery drivers will be able to focus on the quality of the delivery service and will also be more available for end customers, thereby securing the business by improving the loyalty of their customers.
Finally, the improvement of the working conditions of delivery drivers also helps reduce turnover and improve the status of the profession, which is known to be one of the major problems of the industry.
Conclusion
Implementing a CSR strategy is therefore essential to ensure the sustainability of one’s business over time and to meet consumer expectations, which are more than ever concerned with environmental conservation and social justice. The transport industry is particularly involved because of the air pollution generated by their activity and the difficult working conditions of the industry. Transport is undergoing a true green transformation and it is not too late to take part, especially by anticipating future regulations and standards. Route optimization is an effective solution to help carriers in their CSR initiatives by reducing many economic and environmental costs, as well as increasing customer satisfaction and the well-being of delivery drivers.
Resources
- Charter of voluntary commitments to reduce CO2 emissions from road freight transport: http://www.objectifco2.fr/docs/upload/25/ObjectifCO2_TRM_FichesActions_Dec2012.pdf
- Transportation companies and bulk fuel CNR: https : / /www.cnr.fr/download/file/publications/Entreprises de transport et carburant en vrac.pdf
- Greenhouse gas emissions from transportation: https://ree.developpement-durable.gouv.fr/themes / defis-environnementaux/changement-climatique/emissions-de-gaz-a-effet-de-serre/ article /les-emissions-de-gaz-a-effet-de-serre-des-transports
- Old diesel cars banned from Greater Paris as of June 1, 2021: https://94.citoyens.com/2020/les-vieux-diesel-interdits-de-grand-paris-a-partir-du-1er-juin – 2021,01-12-2020.html
- CSR to be timidly imposed in the transport sector: https://www.lsa-conso.fr/la-rse-s-imposer-timidement-dans-le-transport-etude-exclusive,348269
[INFOGRAPHICS]
What is green logistics?
