Route optimization: Kardinal breaks down the latest trends
- June 18, 2025
- 6 mins
To mark the release of the 2025 Market Guide for Vehicle Routing and Scheduling (VRS) by Gartner, Kardinal is offering a deep dive into route optimization solutions and the key trends shaping their future.
The Gartner Market Guide, a go-to resource for the transport and logistics industry, highlights market trends, emerging technologies, and the key players redefining the future of route management.
Kardinal is proud to be featured as a Representative Vendor—a recognition that validates the innovation and effectiveness of our SaaS solutions dedicated to transport operations optimization. Our two flagship modules, Always-On Route Optimization (ARO) and Territory Analytics & Optimization (TAO), were recognized for their ability to address the complex challenges of route planning and execution.
Route optimization: a rapidly evolving market
A market experiencing strong growth
Vehicle Routing and Scheduling (VRS) solutions are tools designed to plan delivery routes by factoring in multiple constraints and service requirements, while optimizing costs and travel distances. These solutions can generate either recurring static routes or dynamic routes that adapt in real time to orders, operational rules, and business-specific constraints.
The VRS market is experiencing strong momentum, driven by the need to improve fleet productivity and optimize the customer experience. In 2023, the global market was valued at $8.51 billion, with a projected annual growth rate of 14.4% between 2024 and 2030, according to Grand View Research. This growth is fueled by several key factors: the automation of logistics processes, cost reduction, and the shift toward more sustainable transport models.
A response to urbanization challenges and e-commerce demands
Amid growing urbanization and increasing traffic, companies are facing new challenges related to congestion, delays, and inefficiencies in transport management. Route optimization addresses these issues by offering the fastest and most suitable routes, tailored to on-the-ground constraints—thereby improving delivery punctuality and operational profitability.
The rise of e-commerce has reshaped consumer expectations, with increasing demands for faster deliveries and greater flexibility. To remain competitive, market players have adapted their solutions to meet these new requirements. Many VRS platforms now include advanced features tailored to both B2B transport (full truckload or less-than-truckload deliveries) and B2C logistics (last-mile delivery), incorporating customer engagement tools and external fleet management capabilities.
These developments are pushing companies to rethink their transportation strategies. VRS solutions are no longer limited to route optimization—they now support broader logistics operations management, including shipment orchestration, coordination of internal and external resources, and improved visibility across the entire delivery chain.
💡 In this context, Kardinal stands out with an innovative and flexible approach to route optimization that goes beyond traditional static models. With our Always-On Route Optimization (ARO) solution, we continuously integrate constraints and real-time changes, allowing logistics operators to respond instantly to disruptions. This maximizes route efficiency while ensuring optimal service quality and more agile management of both internal and external resources.
The fastest-growing regions in the route optimization market
In 2023, North America led the route optimization software market with a 27.01% share. This region benefits from a strong presence of well-established providers and early adopters of advanced technologies. In the United States alone, the market accounted for 43.47% of North America, driven by an extensive logistics network and the presence of major e-commerce players.
The Asia-Pacific region is experiencing rapid growth, with an annual rate of 15%, fueled by the booming e-commerce sectors in China and India, as well as government-led digitalization initiatives. India, in particular, is showing strong momentum with a growth rate of 16.8%.
In Europe, the focus on sustainable transport and the expansion of e-commerce are accelerating the adoption of optimization solutions. The United Kingdom, with its increasing demand for faster deliveries, is leading the way in adopting these technologies.
Trends shaping the future of route optimization solutions
Software vs. Service: evolving needs and priorities
One of the most notable developments in the field of route optimization solutions lies in the growing distinction between software and the associated services. In 2023, the route optimization software segment dominated the market with a 62.31% revenue share, reflecting the popularity and undeniable advantages of software-based solutions. These tools provide a wide range of powerful features that enhance fleet management and optimize delivery operations.
However, the services segment is experiencing strong growth, with a projected compound annual growth rate (CAGR) of 14.6% between 2024 and 2030. Services such as consulting, map integration, deployment, and support have become essential to ensure effective software implementation and maintenance. Given the complexity of these solutions, more and more companies are turning to specialized providers to customize and adapt the software to their specific needs—ensuring optimal adoption and smooth long-term operations.
As a result, businesses are increasingly relying on services to complement their software tools, enabling continuous improvement and adaptation to the evolving demands of the market.
💡 At Kardinal, we offer a SaaS (Software as a Service) route optimization solution that enables our clients to optimize their routes and logistics operations in real time. However, we understand that every business has unique needs. That’s why we also provide audit and consulting services to analyze our clients’ activities and propose tailored optimization strategies. By combining powerful software with expert services, we support our clients throughout their transformation journey, ensuring optimal long-term performance.
Cloud becomes the new standard
In 2023, while on-premises deployments still dominated the market, this model is increasingly being replaced by cloud-based solutions. On-premises solutions allow businesses to maintain full control over their applications and data, ensuring complete sovereignty—an essential requirement for companies handling sensitive information or operating in highly regulated industries. Furthermore, on-premises software often integrates more easily with existing enterprise systems, allowing for deeper customization based on specific business needs.
However, cloud solutions are growing rapidly and are expected to achieve the highest compound annual growth rate (CAGR) between 2024 and 2030. This growth is driven by several factors: cloud-based tools centralize data, reduce software update costs, and allow for faster implementation and greater scalability compared to on-premises alternatives. Cloud platforms also offer increased reliability thanks to robust infrastructure and continuous updates, minimizing downtime.
Additionally, they tend to be more cost-effective, especially through pay-as-you-go pricing models, which enable companies to only pay for what they use. This makes the tools more accessible to small and medium-sized businesses, often operating with smaller fleets. For all these reasons, companies looking for a new route optimization solution are increasingly turning to cloud-based options.
💡 At Kardinal, we chose the cloud to provide our clients with a high-performance, scalable, and easy-to-deploy route optimization solution. Thanks to our SaaS approach, users benefit from a solution that is accessible at any time, with no installation required, and that dynamically adapts to the evolution of their business.
Toward modular and interconnected solutions: the importance of APIs and integration with existing systems
Route optimization solutions are undergoing a major shift toward modular and interconnected architectures, driven by the widespread adoption of APIs (Application Programming Interfaces). Traditional providers, who long offered all-in-one monolithic solutions, are now pivoting toward a modular approach. This trend allows companies to select specific modules based on their needs, reducing subscription costs and offering greater flexibility for solution customization. It reflects a more agile model where each module can be updated or replaced independently, allowing companies to respond more quickly to market changes.
The growing use of APIs facilitates this modularity by enabling seamless integration with existing systems such as TMS (Transportation Management Systems), DMS (Delivery Management Systems), WMS (Warehouse Management Systems), and ERP (Enterprise Resource Planning). This allows businesses to connect their route optimization solution with their supply chain, warehouse, and resource planning systems—creating a fully integrated and automated ecosystem.
💡 At Kardinal, we are at the forefront of the shift toward modular and interconnected solutions. Our route optimization platform is designed to integrate seamlessly with our clients’ existing systems—whether DMS, TMS, WMS, or ERP. Thanks to open APIs, our clients can easily connect our solution to their current management tools while maintaining the flexibility to activate only the features they need. We also provide personalized support to facilitate this integration, ensuring a smooth transition to a fully interconnected solution optimized for their entire logistics chain.
AI and Machine Learning: a revolution in route optimization
Technological advancements are profoundly reshaping the route optimization market, with artificial intelligence (AI) and machine learning (ML) leading the charge. These technologies enable companies to refine their logistics strategies through algorithms that continuously learn, anticipate disruptions, and optimize routes in real time.
By analyzing big data, route optimization solutions powered by AI and ML can now predict traffic conditions, identify recurring delay factors (such as congestion, weather, or incidents), and tailor routes based on the specific constraints of each business. Leveraging diverse data sources—including GPS, IoT devices, and delivery history—AI enables dynamic planning that adjusts routes on the fly, resulting in increased efficiency and an improved customer experience.
AI and machine learning represent a major optimization lever for transportation and logistics companies, helping them reduce operational costs while enhancing service quality.
💡At Kardinal, we’ve embedded Artificial Intelligence and Machine Learning at the core of our route optimization technology to deliver increasingly accurate and high-performing results. By analyzing historical field data, our algorithms continuously refine their predictions—particularly regarding key aspects such as delivery durations, on-site waiting times, and variations in productivity depending on the operational context.
This approach enables routes to be more finely tuned to real-world constraints by taking into account specific factors such as customer type, location, and parcel volume. Furthermore, Machine Learning helps detect anomalies and uncover trends that could impact overall route performance. Thanks to this learning capability, our clients benefit from an adaptive optimization system that improves over time and evolves to meet the specific challenges of their operations.
Sustainability: a key driver of market evolution
Sustainability is now a critical growth driver in the route optimization market. In response to increasing environmental concerns—as well as shifting consumer expectations and tightening regulations—companies are actively seeking ways to reduce their ecological footprint, particularly in the transport sector, which remains a major contributor to emissions. This shift in perspective is prompting logistics players to adopt more sustainable solutions, with route optimization topping the list.
Route optimization plays a central role in reducing fuel consumption and CO₂ emissions. By calculating shorter, more efficient routes and dynamically adjusting itineraries in real time based on traffic conditions, these solutions help maximize vehicle use and avoid unnecessary trips. This not only lowers fuel costs, but also supports increasingly ambitious environmental goals and ensures compliance with stricter regulatory standards.
💡At Kardinal, from day one, we’ve placed a strong emphasis on developing technologies with a positive societal impact. We are actively committed to helping our clients reduce their environmental footprint by supporting their transition toward more eco-friendly fleets.
Our route optimization solution not only allows for the integration of electric vehicles or cargo bikes into delivery schedules, but also helps evaluate the costs and organizational impacts of such a shift. We offer the ability to optimize the use of mixed fleets and adapt delivery routes to the specific characteristics of each vehicle type—including pedestrian deliveries—ensuring maximum efficiency while supporting our clients’ ecological objectives.
Tailored optimization to meet each industry’s unique challenges
Customization is becoming a key differentiator in the route optimization market, where each industry faces its own operational complexities. Sector-specific constraints directly impact how routes should be optimized, requiring tailored solutions to ensure effective and relevant planning.
These specificities may include, for example:
Goods transportation: limited capacities (weight, volume, pallets, floor space), temperature-controlled logistics, compliance with regulations on working hours and overnight stays.
Urban couriers: maximum time allowed between pickup and delivery, multiple starting points (drivers’ homes), pedestrian micro-routes, and management of short distances.
Bulk and waste transport: handling of alternate collection/drop-off sites, capacity optimization of facilities (truck volumes, time slots), product mixing and equipment cleaning management.
Field services: management of technicians’ skills and certifications, intervention duration based on technician profiles, and consideration of site opening hours.
💡At Kardinal, we go beyond standardized solutions. Most route optimization tools include standard constraints such as driver schedules, delivery time windows, or vehicle capacities, and build algorithms that solve problems within this predefined framework. However, we understand that every sector and every client has unique needs. That’s why our approach is based on custom modeling, capable of incorporating a wide range of complex constraints—from specific regulations to highly detailed operational requirements. Our proprietary solver is designed to integrate these particular constraints and continuously adjust routes to ensure solutions that are perfectly aligned with each business reality.
In conclusion, route optimization stands at the core of today’s logistics challenges, addressing growing demands for efficiency, flexibility, and sustainability. Advanced technologies such as artificial intelligence, cloud-based platforms, and sector-specific customization now make it possible to design more powerful systems tailored to the unique challenges of each player in the market. As the need for faster delivery and carbon footprint reduction becomes non-negotiable, optimization solutions are transforming last-mile logistics—offering productivity gains while minimizing environmental impact.
💡Interested in learning more about our route optimization solution?
Contact us for a demo and discover how Kardinal can support your organization’s transformation.
