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The rise in e-commerce has caused an increase in the volume and complexity of the logistics and package delivery market. The emergence of specific competition in the sector and consolidation into large international groups obliges companies to achieve increasing levels of efficiency, operational simplicity and service quality. The ability to have real-time information on the volume and weight of the package and flexibility in hiring transport providers requires instant, data-based decision-making with constant room for improvement.
Foqum's route optimization models enable a top 3 Spanish logistics company to optimize the cost of transport across platforms, simulate and model changes in demand and operational changes, and simplify and automate the decision-making of the route operators.
A top 3 company in the logistics and package delivery sector spends 80% of its operating costs on payment to cross-platform transport providers, with costs of more than $5M per month associated with those items. Furthermore, the difficulty of adapting routes to unforeseen circumstances or the inability to simulate the opening or closing of new platforms leads to decreased service quality at key times.
Both the Route and the Sales teams need automated and optimized decisions to accelerate decision-making and enable them to hire back-up services as soon as possible.
Foqum adapted its route optimization tool to the historical information provided by the IT team, meeting all the constraints set by the route team and calculating the needs of the sales teams. The entire process lasted less than 8 weeks and the result was a daily calculation process based on real-time demand which calculates the required routes and vehicles in less than 15 minutes.
The real-world outcome represented a saving of 6% of average operating costs and 11% in kilometers traveled, in a context in which companies are aware of their commitment to sustainability and their environmental impact. Quality criteria remained above 98%.
Remember: we cannot improve what we do not measure.
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