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Analytics Magazine

Vehicle Routing: Higher expectations drive transformation

March/April 2016

Biennial survey of vehicle routing software reveals many innovations in response to market demands.

Randolph Hall Janice Partyka

By Randolph Hall and Janice Partyka

In the two years since the last survey, vehicle routing has begun a transformation that mirrors changes occurring throughout the software industry, pushed forward by expectations set in consumer markets for transportation and retail. For instance, Waze (and its owner Google) has seen an explosion of followers in app-based, crowd-sourced navigation, residing on the mobile phone. Rather than relying on static maps that may be older than your car, Waze navigates and updates from information gathered from its users, and, as more users gravitate to its platform, the data becomes increasingly valuable (see accompanying sidebar article). For retail, Amazon’s same-day deliveries along with user-friendly interfaces for tracking and ordering have set new standards for customer empowerment.

We spoke with representatives of Omitracs Roadnet, Descartes, DNA-Evolutions, ALK and Appian TMW, and also surveyed vendors, to get the pulse of the industry. All of these companies offer software to solve variations of the “vehicle routing problem” – finding an optimal assignment of customers to vehicles, as well as the optimal sequence and schedule of customers served by each vehicle. The aim is to minimize transportation costs while satisfying feasibility constraints as to when and where stops are visited, what can be loaded in each vehicle, and what routes drivers can serve. Solutions are usually generated in advanced and executed as planned, though sometimes routes are dynamically updated throughout the day.

Routing software is used to plan deliveries from central locations, pick-ups from shippers, routes of service fleets (e.g., appliance repair), and bus and taxi schedules. The companies that use routing software vary greatly in size, ranging from small businesses with a fleet of 10 vans or fewer, to large corporations routing thousands of trucks. What these companies have in common is the need to coordinate and sequence tasks across multiple drivers and stops, ensuring predictable and expedient customer service at the lowest cost.

The Cloud

Routing software emerged in the 1980s at a time when routing software resided on personal computers or on mainframes. While these options still exist, the direction has been toward cloud-based solutions or software-as-a-service (SaaS). As Cyndi Brandt of Omnitracs Roadnet tells us, “When customers have different versions of the software or only install part of the solution, it’s hard for us to support them. Our customers use 10 to 15 versions, and they don’t always update. By moving to SaaS, Omnitracs Roadnet can manage data better and offer better features.”

According to Brandt, half of Omnitracs Roadnet customers are using SaaS.

Other companies have observed similar trends. “The cloud has removed the barrier of infrastructure and systems are easier to deploy,” says James Stevenson at Appian TMW. “This is more important in large enterprises, such as those with multiple branches.”

Ken Wood of Descartes indicates that the majority of its customers are cloud based, but he sees potential for future hybrid solutions to enable integration. “There are too many components outside the firewall that will be used as inputs to solutions,” he says.


With pervasive consumer adoption of smartphones, it is not surprising that the technology is affecting how vehicle routes are conveyed to drivers.

Marc Gerlach of DNA Evolutions has found that “the availability of cheap and powerful mobile devices will step-by-step replace fixed installed units.” In addition, he says, “most of our customers are providing telematics systems to communicate with the drivers on apps running on smartphones and tablets.”

Nevertheless, as Brandt indicates, rugged devices installed on vehicles still have a place “for proof of delivery, mobile forms or tracking how a truck is being driven, such as idling or speeding.” Device use also varies among transportation segments. As Stevenson tells us, “Long haul is less likely to use smartphones since they are required to comply with hours of service rules that require automated data logging connected to the engine bus.” However, tablets or “phablets” (cross between tablet and phone) can sometimes serve this purpose. Recent regulatory changes mandating automated data logging has created a push in this direction.

What we did not find in our surveys and interviews is a big move toward integrating Waze-style crowd-sourced data with fleet routing. One challenge is that travel time estimates produced for cars are not very accurate for trucks, which travel more slowly and must observe height and weight restrictions on roads.

ALK Technologies is a provider of mapping data specifically for trucks, as well as truck navigation products, such as “CoPilot Truck.” As Dan Popkin from ALK indicates, ALK has long provided mechanisms for customers to identify improvements in maps, which are then implemented through ALK’s quality assurance process. More recently, ALK has offered “MapSure” as a more automated way for customers to edit their own map files and submit changes into ALK’s data sets. As far as crowd-sourced navigation for trucks, Popkin says, “These are things we are looking into. It’s an exciting opportunity for the future.”
The companies that use routing software vary greatly in size, ranging from small businesses with a fleet of 10 vans or fewer to large corporations routing thousands of trucks.
The companies that use routing software vary greatly in size, ranging from small businesses with a fleet of 10 vans or fewer to large corporations routing thousands of trucks.


“Routing used to be just about creating a plan, but now it is about execution.” That’s the view of Omnitracs Roadnet’s Brandt, who lists proof of delivery, tracking and compliance as supplemental needs that demand system integration. Omnitracs, long a leader in the truck telematics industry, acquired Roadnet at the end of 2013, and Descartes acquired Airclic in 2014, with an eye toward these forms of integration.

Another emerging form of integration is “self-scheduling,” which Descartes’ Wood describes as “a self-chosen delivery time.” Wood also mentioned the need to satisfy “increased expectations of delivery as a continued expansion of the Amazon model.” In addition, Appian TMW’s Stevenson relates, “companies now want full end-to-end solutions. They want the day’s activities fed into a complete feedback loop.” This means providing information on actual performance that can be used to improve future routing.

Gerlach of DNA-Evolutions sees the future challenge as the “interfacing of all systems along the supply chain. This will lead to more cloud- and web-based offerings on one hand, and the dispatching process will have to consider more aspects and data will thus become more complex.” One example is integration with the energy industry, where routing and production planning need to be optimized together.

This Year’s Survey

Twenty-two companies participated in this year’s online survey, ranging from small vendors (less than 100 customers) to large corporations (1,000+ customers). We asked for demographic information on the companies (such as contact information and date of introduction), platform (hardware, operating system, driver devices, maps), features and capabilities, and installations. We also asked several open-ended questions, inviting comments on recent and expected industry changes, innovations and impacts of the economy on the industry. The print edition provides an excerpted set of questions for all of the respondents. Keep in mind that results are all self-reported and unverified.

What’s notable in this year’s survey?

Operating systems: Almost everyone offers a SaaS solution, most provide a Windows solution, and half have solutions implemented on mobile devices (iOS or Android).

Digital maps: Solutions are diverging. HERE, TomTom, ALK, Google Maps and OpenStreetMaps were some of those mentioned.

Special features and innovations: These included integrated telematics, bulk load routing, integrated workforce management, integrated call centers and ultra low-latency route optimization.

Installations: Most common are private fleets transporting consumer goods (think of Home Depot, Walmart, Coca-Cola, Walgreens), but for-hire carriers were also mentioned (DHS, R+L), as well as transporters of industrial goods. It was less common for companies to support taxi or bus fleets, but some do.

Survey Directory & Data

To view the vehicle routing software
survey products and results,
along with a directory of statistical
software vendors, click here.

As to where the industry is heading, predictions include heading toward “connected fleet solutions,” integration of real-time information, cloud offerings and mobile offerings via smart phones. “Amazon Now” was mentioned as an influence, creating a standard for coordinated immediate delivery. Descartes emphasized the need to harmonize the consumer’s delivery experience across multiple channels of transportation. And, as James Stevenson explained, “We are now seeing same-day delivery that bypasses distribution centers. It is the ultra last-minute transportation, a bit like Uber, that’s setting the direction.” Amazon, Waze and Uber – all software-driven companies that depend on routing – are setting new standards for the industry.

In selecting a vehicle routing product, look for vendors that have experience serving similar industries to your own, and test the software on a representative data set to assess the quality and speed of solutions. Ask for references and determine whether any prior customers have switched to another product and why. And look ahead to see whether the company has the capability to maintain and update the software to meet your future needs. Consider total cost of ownership, including license costs, staff support and future upgrades and maintenance.

Randolph Hall ( is vice president of research for the University of Southern California, as well as professor in the Epstein Department of Industrial and Systems Engineering. He is a member of INFORMS.

Janice Partyka ( is principal of JGP Services (, a consulting group that helps companies with product strategy, market research and communications, specializing in M2M, telematics, logistics and the connected vehicle industries.

Which way to go

By Randolph Hall

As a new graduate student at U.C. Berkeley in the early 1980s, I was intrigued by the possibility of empowering travelers with information as a way to improve transportation. My first publication, titled “Habituality of Traveler Decisions and Travel Time Reliability,” proposed a method motivated by three theories. First, travel can be more reliable and faster when exploiting the full diversity of a network, utilizing different routes at different times (i.e., breaking habits). Second, for stochastic and time-dependent networks, the fastest path from point A to B is not a path in the classic sense, but instead an adaptive strategy that permits changes based on information learned while en route. And last, when initiating a journey, one should not only care about the travel time along individual links of a path, but whether they offer multiple options along the way, thus permitting changes as you acquire new information.

Thirty-five years later, however, it was as though I had forgotten my own ideas, choosing the same route almost every day for 20 years traveling to work, and the same (but different) route traveling home. Then I discovered the mobile phone app Waze. Crowd-sourcing travel time data by tracking the movements of its users’ mobile phones, Waze offered me dynamic choices, as well as an estimated time of arrival that reflected current travel conditions. Soon I was navigating through back streets of Echo Park, Silver Lake and downtown Los Angeles that I would have never considered. I had gotten out of my rut, but had my journeys become better?

Waze has several challenges in getting its algorithms to produce the best choices. First, because travel times constantly change (especially around the start of rush periods), it is not sufficient to have a good estimate of travel times at time of departure; a forward projected travel times along all points of a route is also needed (a USC spin-off company, TallyGo, is working on this issue). Second, travel times vary significantly along route segments depending on where you are heading next and which lane you have selected, and thus precise lane- and destination-based measurement is important. Third, travel time is partly a reflection of roadway congestion, but also a reflection of driver behavior, making the fastest route at least partly dependent on the individual. And last, owing to Waze’s own success, the system has the power to over-saturate streets (particularly the obscure ones) with traffic, resulting in unanticipated “Waze-induced congestion.”

So am I still using Waze? Absolutely. It has broken my habits, made me aware of routes I had never considered, and given me information on traffic congestion at the moment I’m traveling. But I do often ignore its choices because my experience tells me alternate routes are likely to be better, and I am fully aware that its ETA will be overly optimistic at certain times of day and overly pessimistic at other times of day. And no matter how many times Waze tells me otherwise, I do know that my office is not situated on a freeway on-ramp.

Our survey of fleet routing software tells us that the crowd-sourcing revolution has not spread throughout industry. But vehicle routing is ripe for disruption, as fleet drivers, like the rest of us, are ready to break habits to get places faster. Once perfected, smartphones, coupled with crowd sourcing and cloud computing, provide the perfect platform to do so.

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