When route optimization meets the reality of parcel delivery
- May 9, 2025
- 2 mins
[REPORT]
What route optimization to meet the challenges of the parcel delivery industry?
Parcel delivery — especially last-mile — is a high-pressure sector: massive volumes, tight deadlines, and finely tuned daily operations. One might think a good route optimization tool would work wonders. Yet in practice, many players have been left disappointed.
A system too complex for standard algorithms
Standard route optimization software follows a fairly simple logic: wait until all parcel data is available, then run the algorithm to generate optimal routes.
The issue? That’s not how things work in the real world.
In parcel delivery hubs, everything runs on tight schedules. Parcels arrive in the morning and are unloaded, scanned, and sorted simultaneously—within a very short timeframe. There’s no way to wait for all parcels to be scanned before organizing routes.
As a result, software that requires complete data before it can operate simply isn’t usable in practice.
Autonomous transport partners
Another specific feature of the industry: drivers are often subcontractors assigned to a defined geographic area. They build their own routes and are not managed by a centralized dispatch system. Changing their daily organization is not only difficult — it’s often impossible.
In this context, daily centralized route optimization doesn’t make sense. The real optimization lever lies elsewhere.
The key: optimize territory sectorization
Faced with the limitations of traditional route optimization approaches, industry professionals have implemented another form of organization: sectorization. Each driver, often a subcontractor, is assigned a stable geographic area, which they manage autonomously on a daily basis.
This sectorization is most often based on postal codes, a simple and quick solution to implement. However, this division doesn’t always take local constraints into account:
An isolated industrial area can disrupt a route.
A natural barrier (river, railway) can complicate travel.
Delivery density can vary significantly from one neighborhood to another.
As a result, some sectors are overloaded while others are underused.
This is where Kardinal’s TAO (Territory Analytics & Optimization) solution comes in. Developed specifically for parcel delivery, TAO allows for a more refined, balanced, and realistic rethinking of sectorization, using the historical data from each delivery center.
This method creates robust sectors without requiring major changes to the existing organization.
Why does this solution work?
- Co-developed with one of the largest French parcel delivery operators, ensuring it meets the real needs of the field.
- Tested and approved by operational teams, who have successfully integrated it into their daily processes.
In summary: in parcel delivery, optimization cannot be limited to the daily sequencing of all routes. It starts with a well-organized territory, designed to last and evolve smoothly.
And that’s exactly what TAO offers.
Strategic sectorization solution dedicated to the parcel delivery industry
