Route Optimization Software Market: Information by Deployment Type (On-Premise, Cloud), Organization Size (SMEs, Large Enterprises), Industry Vertical, and Region — Forecast Till 2029

Mar 05, 2020   Global Statistics Representing Route Optimization Software Market Scenario Route optimization using algorithms recognizes the shortest possible route for one or more destinations with minimizing overall costs, resulting in superior desirable performance. The technology in the transportation and logistics sector is evolving, and software companies have already started adopting sophisticated technologies to optimize routes with minimum delivery time and excellent fuel efficiency. Technologies, su...
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Global Statistics Representing Route Optimization Software Market Scenario

Route optimization using algorithms recognizes the shortest possible route for one or more destinations with minimizing overall costs, resulting in superior desirable performance. The technology in the transportation and logistics sector is evolving, and software companies have already started adopting sophisticated technologies to optimize routes with minimum delivery time and excellent fuel efficiency. Technologies, such as artificial intelligence and machine learning, using cloud technology, have proven themselves as the game-changer for route optimization. For instance, “SmartMonkey,” the Spanish startup, is striving to make the logistics sector smarter and asserts to reduce logistics cost by 30%.

Counteracting Productivity Loss

A report presented by the American Transportation Research Institute on “Cost of Congestion to the Trucking Industry” in 2016, found that due to traffic congestion the overall operational cost of trucking industry has been upsized by USD 74.5 billion, which is equal to 1.2 billion hours of productivity loss i.e., 425,533 truck drivers sitting idle in traffic for the same year. Moreover, traffic congestion costs around USD 6,500 per truck every year.

On-Premise Deployment — Enhanced Customization and Data Control

The route optimization software implements and operates through companies’ computing infrastructure and in-house servers. This software requires a purchased copy or license to run. Besides, on-premise software is often priced under a one-time license fee with regards to the number of users and organization size. However, it is a capital-intensive process necessitating hardware and upfront license fees for software support, training, and updates. Moreover, on-premise route optimization software enables a high-level of customization and allows greater control over data and security.

Cloud-Based Deployment Eliminates Infrastructure Cost

Cloud-based route optimization software offers a network-based solution that can be accessed from anywhere with an active internet connection. It is usually easier to integrate with third-party solutions. It prevents upfront costs for all computing infrastructure, such as hardware and data servers. Cloud-based feedback shows real-time analyses of all the operational activities from both business and consumer ends. However, the data is stored on a remote server, which stands for the possibility of a data leak.

Large Enterprises Supplanting Conventional Methodology by Route Optimization

The large enterprise segment held the largest market value of USD 2,318 million in 2018, owing to the profusion of large enterprises in the developed regions such as North America, Europe, and Asia-Pacific. Route optimization software in large organizations integrated with route planning and fleet management entails the management of dispatching and services that are limited to factors such as time and location. Conventional methods for management are time-consuming and less efficient, thus widening the scope and presenting ample opportunities for the route optimization software market in such organizations.

Scalability for Small Enterprises

The presence of SMEs in developing countries such as Peru, Colombia, Chile, Argentina, and Nigeria is expected to accelerate market growth. Moreover, frequent gains and losses are inevitable for small enterprises during the development phase, for which they need to focus on personnel and assets management to help meet consumer demands. Thus, adopting technologies like route optimization software can offer scalability to tackle unpredictable variations occurring in the market.

Mitigating Transportation and Logistics Cost

The transportation and logistics segment held the largest market value to the tune of USD 1,221 million in 2018, followed by the business and home services industry vertical. The prevailing competitive scenario across all the economic sectors leaves no choice but to maximize profit for any enterprise to sustain. In the transportation sector, logistics costs hold the largest share of the total expenditure incurred by the enterprise. These costs are significantly influenced by fixed costs and variable costs involved in the supply chain; hence, the optimization of the supply chain can aid reduce the associated costs. On the other hand, the flourishing e-commerce sector capacitated customers to solicit prompt and efficient delivery service. Therefore, it is pivotal for service providers to meet these expectations and gain customer satisfaction. According to the United Nations Conference on Trade and Development (UNCTAD), e-commerce sales upturned by 13% in 2017. In such a scenario, deployment of route optimization software renders several benefits to the enterprise to not only meet the customer expectations but also cut down miscellaneous costs incurred.

Route Optimization Complements the Home Delivery Model

The definition of point-of-sale is evolving from a fixed store location to anywhere the customer is located, and this definition is encompassing almost every other economic sector such as food and beverages, home appliances, and fashion and luxury, among others. Even after the emergence of a concept called home delivery, several distributors, retailers, and wholesalers are not profiting in any manner. Thus, its high time to bring in changes in the home delivery model to sustain financially. The transportation and logistics sector witnessed profit by incorporating several technologies and software such as route optimization, which helped the industry in managing shipment-related concerns such as mileage, locations, and dimensions of packing, among others.

Streamlining the Construction Industry’s Supply Chain

The construction industry is usually considered as an industry with customer-driven projects, involving high investments and extremely uncertain planning environments, which makes the supply chains more cumbersome when compared to other sectors. Several methods, such as critical path method (CPM), metra potential method (MPM), program evaluation and review technique (PERT), and Gantt charts are utilized in the sector’s supply chain for project planning. However, project characteristics such as the use of the same resource pool for multiple projects, waste accumulation and disposal, meeting different stakeholder's interests, and environmental concerns need to be addressed as they are critical for the operation of processes in the sector. To curtail the consequences of the aforementioned factors, the industry calls for efficient planning and management, served by route optimization software.

North America’s Traffic-Congestion Issue

According to the Sustainable America report, the average American driver spends more than 16 minutes a day idling vehicle—which burns up to 3.8 million gallons of gas collectively—accounting for close to USD 7,980,000 of daily waste. According to the Mobility Lab, the U.S. ranked as the most traffic-congested nation in the world, with American drivers spending an average of 41 hours a year battling traffic during peak travel times.  In the U.S., traffic congestion costs around USD 305 billion in 2017, an average of USD 1,445 per driver. The NHTSA reports that every year companies lose approximately 32.6 billion hours on account of weather-related congestion, and the cost of weather-related delays hovers from USD 2.2 billion to USD 3.5 billion annually. Therefore, to avert the transportation issues, North American companies are extensively deploying the route optimization software, thereby contributing substantially to the market growth.

Europe’s Focus Toward Enhancing Third-Party Logistics

3PLs (third party logistics) and trucking companies are available in all shapes and sizes, but one challenge is shared among all — the need to continually bring in new businesses to keep trucks active and profitable. By dint of route optimization software, 3PL companies can reduce the cost such as fuel costs, vehicle maintenance cost, the total cost of ownership, and lower violations and accidents. In July 2018, Europa Worldwide Group, one of the U.K.’s largest privately-owned freight forwarding and logistics companies, selected Paragon’s routing and scheduling software to streamline its transport management. DHL has been a user of Paragon’s routing and scheduling software since the late 1980s and is now using more than 50 systems across its business development functions and operational contracts. CEVA Corporate Logistics chose Paragon as its strategic routing and scheduling system facilitating new business development in Europe, Australia, Asia, and Latin America. United Parcel Service Inc. (NYSE: UPS) deployed a new navigation tool called UPSNav into the handheld device drivers carry, offering them with "detailed turn-by-turn directions” derived from UPS’s routing software. UPS is providing a new direction for its close 60,000 package delivery drivers.

Asia-Pacific’s Flourishing E-Commerce Industry Demands Efficient Route Optimization Technique 

The Asia-Pacific route optimization software market is anticipated to register the highest growth, mainly due to the rising demand for route optimization solution across the on-demand food delivery and e-commerce sector. Besides, the online transportation companies such as Didi, Ola, and Uber are increasingly incorporating the latest advanced route optimization solution to solidify their position in the market. The retail e-commerce industry in India has grown remarkably over the past few years, driven by factors such as surging internet and mobile penetration, as well as broader acceptance of digital payment methods across the country. However, critical challenges such as on-time delivery, tracking of delivery, route planning, and vehicle tracking are hindering the retailer’s business growth. Besides, Amazon Prime and Amazon Prime Now (delivery within an hour) have further amplified the pressure on the logistics sector to facilitate super-fast deliveries across India, while keeping the costs low.  Therefore, the demand for route optimization software has increased massively in India.

Latin America’s Burgeoning Urban Population

Latin America has a high rate of the urban population, where 80% of the total population resides in the cities. The urban population has a penchant for innovative technologies and is increasingly adopting technologically advanced products and software. Moreover, Latin America is making a great deal of investment in technologies to enhance the tracking of real-time location and traceability throughout the logistics chain, which is crucial in ensuring transport competitiveness and sustainability. Hence, the region is adopting route optimization software to prevent transportation issues.

The Middle-East — a Promising Marketspace for Route Optimization

According to PAYFORT Online Payment Gateway, the Middle East e-commerce sector is expected to be valued at USD 69 billion by 2020, almost doubling in size. Besides, 69% of startups in the UAE rely on e-commerce, infrastructure, and software-as-a-service. Of these, 52% are in B2C ventures, and 93% of them headquartered in Dubai. Online customers in the Middle East region want retailers to deliver “in-store” like buying experience for instant gratification. According to Google, in the UAE, only 53 percent of retailers offer “Click and collect” as a service, and only three retailers provide next-day service. Thus, there are abundant opportunities to improve the last mile experience with advanced route optimization software in the Middle East region.

Key Players

The prominent players in the global route optimization software market include Verizon Connect, Caliper Corporation, FarEye, FLS – FASTLEANSMART, Maxoptra, The Descartes Systems Group Inc., Trimble Inc., Route4Me, Inc., Omnitracs, LLC, ORTEC B.V., Paragon Software Systems Ltd, Routific, Inc.

Route Optimization Software Market Segmentation

By Deployment Type

  • On-Premise
  • Cloud

By Organization size

  • SMEs
  • Large Enterprises

By Industry vertical

  • Transportation and Logistics
  • Business and Home Services
  • Government and Public Safety
  • Construction and Heavy Equipment
  • Others

By Regions

North America

  • U.S.
  • Canada
  • Mexico

Europe

  • U.K.
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Europe

Asia-Pacific

  • China
  • India
  • Japan
  • South Korea
  • Australia
  • Southeast Asia
  • Rest of Asia-Pacific

LATAM

  • Brazil
  • Argentina
  • Columbia
  • Rest of LATAM

Middle East

  • Saudi Arabia
  • Oman
  • Qatar
  • Bahrain
  • UAE
  • Rest of Middle East

Africa

  • Nigeria
  • Tanzania
  • South Africa
  • Ghana
  • Rest of Africa

Frequently Asked Questions (FAQs)

Verizon Connect, Caliper Corporation, FarEye, FLS – FASTLEANSMART, Maxoptra, The Descartes Systems Group Inc., Trimble Inc., Route4Me, Inc., Omnitracs, LLC are the top players in Route Optimization Software Market.
North America is expected to hold the highest market share in Route Optimization Software Market.
Adopting technologically advanced products and software, rising demand for route optimization solutions across the on-demand food delivery and e-commerce sector are the key factors expected to drive Route Optimization Software Market during the forecast period.
Large Enterprises Segment is expected to be the leading segment in Route Optimization Software Market during the forecast period.
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Global Statistics Representing Route Optimization Software Market Scenario

Route optimization using algorithms recognizes the shortest possible route for one or more destinations with minimizing overall costs, resulting in superior desirable performance. The technology in the transportation and logistics sector is evolving, and software companies have already started adopting sophisticated technologies to optimize routes with minimum delivery time and excellent fuel efficiency. Technologies, such as artificial intelligence and machine learning, using cloud technology, have proven themselves as the game-changer for route optimization. For instance, “SmartMonkey,” the Spanish startup, is striving to make the logistics sector smarter and asserts to reduce logistics cost by 30%.

Counteracting Productivity Loss

A report presented by the American Transportation Research Institute on “Cost of Congestion to the Trucking Industry” in 2016, found that due to traffic congestion the overall operational cost of trucking industry has been upsized by USD 74.5 billion, which is equal to 1.2 billion hours of productivity loss i.e., 425,533 truck drivers sitting idle in traffic for the same year. Moreover, traffic congestion costs around USD 6,500 per truck every year.

On-Premise Deployment — Enhanced Customization and Data Control

The route optimization software implements and operates through companies’ computing infrastructure and in-house servers. This software requires a purchased copy or license to run. Besides, on-premise software is often priced under a one-time license fee with regards to the number of users and organization size. However, it is a capital-intensive process necessitating hardware and upfront license fees for software support, training, and updates. Moreover, on-premise route optimization software enables a high-level of customization and allows greater control over data and security.

Cloud-Based Deployment Eliminates Infrastructure Cost

Cloud-based route optimization software offers a network-based solution that can be accessed from anywhere with an active internet connection. It is usually easier to integrate with third-party solutions. It prevents upfront costs for all computing infrastructure, such as hardware and data servers. Cloud-based feedback shows real-time analyses of all the operational activities from both business and consumer ends. However, the data is stored on a remote server, which stands for the possibility of a data leak.

Large Enterprises Supplanting Conventional Methodology by Route Optimization

The large enterprise segment held the largest market value of USD 2,318 million in 2018, owing to the profusion of large enterprises in the developed regions such as North America, Europe, and Asia-Pacific. Route optimization software in large organizations integrated with route planning and fleet management entails the management of dispatching and services that are limited to factors such as time and location. Conventional methods for management are time-consuming and less efficient, thus widening the scope and presenting ample opportunities for the route optimization software market in such organizations.

Scalability for Small Enterprises

The presence of SMEs in developing countries such as Peru, Colombia, Chile, Argentina, and Nigeria is expected to accelerate market growth. Moreover, frequent gains and losses are inevitable for small enterprises during the development phase, for which they need to focus on personnel and assets management to help meet consumer demands. Thus, adopting technologies like route optimization software can offer scalability to tackle unpredictable variations occurring in the market.

Mitigating Transportation and Logistics Cost

The transportation and logistics segment held the largest market value to the tune of USD 1,221 million in 2018, followed by the business and home services industry vertical. The prevailing competitive scenario across all the economic sectors leaves no choice but to maximize profit for any enterprise to sustain. In the transportation sector, logistics costs hold the largest share of the total expenditure incurred by the enterprise. These costs are significantly influenced by fixed costs and variable costs involved in the supply chain; hence, the optimization of the supply chain can aid reduce the associated costs. On the other hand, the flourishing e-commerce sector capacitated customers to solicit prompt and efficient delivery service. Therefore, it is pivotal for service providers to meet these expectations and gain customer satisfaction. According to the United Nations Conference on Trade and Development (UNCTAD), e-commerce sales upturned by 13% in 2017. In such a scenario, deployment of route optimization software renders several benefits to the enterprise to not only meet the customer expectations but also cut down miscellaneous costs incurred.

Route Optimization Complements the Home Delivery Model

The definition of point-of-sale is evolving from a fixed store location to anywhere the customer is located, and this definition is encompassing almost every other economic sector such as food and beverages, home appliances, and fashion and luxury, among others. Even after the emergence of a concept called home delivery, several distributors, retailers, and wholesalers are not profiting in any manner. Thus, its high time to bring in changes in the home delivery model to sustain financially. The transportation and logistics sector witnessed profit by incorporating several technologies and software such as route optimization, which helped the industry in managing shipment-related concerns such as mileage, locations, and dimensions of packing, among others.

Streamlining the Construction Industry’s Supply Chain

The construction industry is usually considered as an industry with customer-driven projects, involving high investments and extremely uncertain planning environments, which makes the supply chains more cumbersome when compared to other sectors. Several methods, such as critical path method (CPM), metra potential method (MPM), program evaluation and review technique (PERT), and Gantt charts are utilized in the sector’s supply chain for project planning. However, project characteristics such as the use of the same resource pool for multiple projects, waste accumulation and disposal, meeting different stakeholder's interests, and environmental concerns need to be addressed as they are critical for the operation of processes in the sector. To curtail the consequences of the aforementioned factors, the industry calls for efficient planning and management, served by route optimization software.

North America’s Traffic-Congestion Issue

According to the Sustainable America report, the average American driver spends more than 16 minutes a day idling vehicle—which burns up to 3.8 million gallons of gas collectively—accounting for close to USD 7,980,000 of daily waste. According to the Mobility Lab, the U.S. ranked as the most traffic-congested nation in the world, with American drivers spending an average of 41 hours a year battling traffic during peak travel times.  In the U.S., traffic congestion costs around USD 305 billion in 2017, an average of USD 1,445 per driver. The NHTSA reports that every year companies lose approximately 32.6 billion hours on account of weather-related congestion, and the cost of weather-related delays hovers from USD 2.2 billion to USD 3.5 billion annually. Therefore, to avert the transportation issues, North American companies are extensively deploying the route optimization software, thereby contributing substantially to the market growth.

Europe’s Focus Toward Enhancing Third-Party Logistics

3PLs (third party logistics) and trucking companies are available in all shapes and sizes, but one challenge is shared among all — the need to continually bring in new businesses to keep trucks active and profitable. By dint of route optimization software, 3PL companies can reduce the cost such as fuel costs, vehicle maintenance cost, the total cost of ownership, and lower violations and accidents. In July 2018, Europa Worldwide Group, one of the U.K.’s largest privately-owned freight forwarding and logistics companies, selected Paragon’s routing and scheduling software to streamline its transport management. DHL has been a user of Paragon’s routing and scheduling software since the late 1980s and is now using more than 50 systems across its business development functions and operational contracts. CEVA Corporate Logistics chose Paragon as its strategic routing and scheduling system facilitating new business development in Europe, Australia, Asia, and Latin America. United Parcel Service Inc. (NYSE: UPS) deployed a new navigation tool called UPSNav into the handheld device drivers carry, offering them with "detailed turn-by-turn directions” derived from UPS’s routing software. UPS is providing a new direction for its close 60,000 package delivery drivers.

Asia-Pacific’s Flourishing E-Commerce Industry Demands Efficient Route Optimization Technique 

The Asia-Pacific route optimization software market is anticipated to register the highest growth, mainly due to the rising demand for route optimization solution across the on-demand food delivery and e-commerce sector. Besides, the online transportation companies such as Didi, Ola, and Uber are increasingly incorporating the latest advanced route optimization solution to solidify their position in the market. The retail e-commerce industry in India has grown remarkably over the past few years, driven by factors such as surging internet and mobile penetration, as well as broader acceptance of digital payment methods across the country. However, critical challenges such as on-time delivery, tracking of delivery, route planning, and vehicle tracking are hindering the retailer’s business growth. Besides, Amazon Prime and Amazon Prime Now (delivery within an hour) have further amplified the pressure on the logistics sector to facilitate super-fast deliveries across India, while keeping the costs low.  Therefore, the demand for route optimization software has increased massively in India.

Latin America’s Burgeoning Urban Population

Latin America has a high rate of the urban population, where 80% of the total population resides in the cities. The urban population has a penchant for innovative technologies and is increasingly adopting technologically advanced products and software. Moreover, Latin America is making a great deal of investment in technologies to enhance the tracking of real-time location and traceability throughout the logistics chain, which is crucial in ensuring transport competitiveness and sustainability. Hence, the region is adopting route optimization software to prevent transportation issues.

The Middle-East — a Promising Marketspace for Route Optimization

According to PAYFORT Online Payment Gateway, the Middle East e-commerce sector is expected to be valued at USD 69 billion by 2020, almost doubling in size. Besides, 69% of startups in the UAE rely on e-commerce, infrastructure, and software-as-a-service. Of these, 52% are in B2C ventures, and 93% of them headquartered in Dubai. Online customers in the Middle East region want retailers to deliver “in-store” like buying experience for instant gratification. According to Google, in the UAE, only 53 percent of retailers offer “Click and collect” as a service, and only three retailers provide next-day service. Thus, there are abundant opportunities to improve the last mile experience with advanced route optimization software in the Middle East region.

Key Players

The prominent players in the global route optimization software market include Verizon Connect, Caliper Corporation, FarEye, FLS – FASTLEANSMART, Maxoptra, The Descartes Systems Group Inc., Trimble Inc., Route4Me, Inc., Omnitracs, LLC, ORTEC B.V., Paragon Software Systems Ltd, Routific, Inc.

Route Optimization Software Market Segmentation

By Deployment Type

  • On-Premise
  • Cloud

By Organization size

  • SMEs
  • Large Enterprises

By Industry vertical

  • Transportation and Logistics
  • Business and Home Services
  • Government and Public Safety
  • Construction and Heavy Equipment
  • Others

By Regions

North America

  • U.S.
  • Canada
  • Mexico

Europe

  • U.K.
  • Germany
  • France
  • Italy
  • Spain
  • Rest of Europe

Asia-Pacific

  • China
  • India
  • Japan
  • South Korea
  • Australia
  • Southeast Asia
  • Rest of Asia-Pacific

LATAM

  • Brazil
  • Argentina
  • Columbia
  • Rest of LATAM

Middle East

  • Saudi Arabia
  • Oman
  • Qatar
  • Bahrain
  • UAE
  • Rest of Middle East

Africa

  • Nigeria
  • Tanzania
  • South Africa
  • Ghana
  • Rest of Africa

Frequently Asked Questions (FAQs)

Verizon Connect, Caliper Corporation, FarEye, FLS – FASTLEANSMART, Maxoptra, The Descartes Systems Group Inc., Trimble Inc., Route4Me, Inc., Omnitracs, LLC are the top players in Route Optimization Software Market.
North America is expected to hold the highest market share in Route Optimization Software Market.
Adopting technologically advanced products and software, rising demand for route optimization solutions across the on-demand food delivery and e-commerce sector are the key factors expected to drive Route Optimization Software Market during the forecast period.
Large Enterprises Segment is expected to be the leading segment in Route Optimization Software Market during the forecast period.
Basically choose Pay by Purchase Order when you are checking out. We will connect with you via email to set up your order.
We will send you an email with login credentials to access the report. You will also be able to download the pdf.
Call us, email us, or chat with us! We encourage your questions and feedback. We have a research concierge team available at all times and included in every purchase.