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Blog November 2021 Updated July 2023

Food and catering: how to reduce transport costs

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Jan Tønder

Intelligent Optimization Solution Advisor

The cost of transporting food – or anything – is becoming more expensive. The emergence from lockdown has driven up the cost of petrol and diesel. Prices in the UK, for example, are at an eight-year high. In May, the Netherlands experienced 2012 highs. Labour shortages have driven wages higher. The last mile has always been the most expensive leg, with costs ranging between 35% and 53% of the total delivery costs.

Logistics for food and packaged meals become more complex due to issues such as transportation temperature. For example, produce such as broccoli, grapes, apples and packed salad greens can be carried safety at temperatures ranging from 0-degrees to 2-degrees Celsius. Foods such as potatoes, bananas and tomatoes require higher temperatures between 12 degrees to 15-degrees Celsius. Your planning doesn’t just involve routes and delivery times. You’ve got to consider how the products are transported.

Transporting food, drink and their ingredients must also meet legal requirements for safe consumption, which involves temperatures during transportation and arriving at its destination on time. Because we’re talking about food, any delay can adversely affect quality, safety or shelf life. This makes it all the more critical to overcome challenges and deliver on time, which puts pressure on your margins.

For those reasons, controlling costs has never been more important. Manual processes create inefficiencies and leak revenue. You’re not able to optimise routes, so your drivers are on the road longer than necessary, draining yet more money. More time on the road equates to higher fuel and labour costs, wear and tear on vehicles and the risk of missing delivery windows. Penalties, customer dissatisfaction and reputational and financial losses are often the consequences.

Digital technology leads to profitability: AMCS Route Planner Plus

The health of end customers and your margins depend on delivering food to its destination in as short a time as possible. Planning with the use of Excel sheets or a basic system is not up to the task – not if you want to gain significant efficiencies and save transportation costs. Accomplishing this demands digital technology in your planning. AMCS Route Planner is a best-in-class planner based on the cloud. With it, you can implement an end-to-end system and rise above the challenges you face by automating workflows and eliminating the errors so common in manual systems.

With AMCS Route Planner Plus, you have the option to implement an end-to-end system with add-on modules. This knocks down silos so that your team can work as a cohesive unit, sharing data that leads to efficiencies.

Route optimisation

Route optimisation is critical in this industry, where the quality and safety of food can be determined by inefficient routes.  AMCS Route Planner Plus includes an advanced route planning system to make routes smart and economical. By optimising routes to reduce mileage and driving time, the system helps ensure that food reaches its destinations on time, reducing your operating costs.

Planning made simple

If you have a relatively consistent schedule, then batch planning might be the smartest way to work. Food and catering delivery demands geographical batching to be efficient. How do you batch multiple orders in a single vehicle, however? This is where adding an AMCS planner to your system can help. The advanced algorithms do this for you, so that none of your orders have to endure long diversions to reach their final destination.

Though Route Planner is a batch-planning system, Route Planner Plus can also handle a certain amount of ad hoc orders (based on a maximum percentage of changes to the overall plan) and will instantly optimise and update the schedule as orders are confirmed and entered into the system. For fully dynamic and real-time based planning, there is the AMCS Fleet Planner solution – a powerful tool that optimises schedules “on the fly” – even after your vehicles have left! Or if you prefer, you can make adjustments manually, and you can even offer time-slotting to your customers.

You can create master plans based on visit frequencies and seasonal patterns. With AMCS Route Planner Plus, you can also optimise your master plans so that you coordinate events in your supply chain and synchronise demand with transport. Add AMCS Reporting module, and you can also draw on the data collected to create reports for analysing.

Know what’s happening in real time

What if you could look into your operations at any given moment and know what’s happening, as it happens? Transparency into your business eliminates the waiting game. Imagine getting a real-time view of estimated times of arrival, delivery updates, instantly learning of delays – and then making any relevant information available to your customers. With the AMCS Web Portal module, customers can receive updates on, for instance, new ETAs so that they know what to expect.

Embracing digitalisation enables you to improve customer relationships and gain significant efficiencies. AMCS Mobile Web, designed to operate on a tablet or smartphone, is an excellent example. Drivers can communicate directly with AMCS’s planning and optimization systems, and vice versa. They can receive route lists and send status updates in real time. With each status update, the dispatchers – or even customers – get an instant message about vehicle location, delivery status and possible deviations to the schedule. Drivers can use their device to log events, record proof of delivery and store documentation.

By enabling transparency, AMCS Route Planner Plus gives you the tools to gain insights into operations. For example, mileage and the exact time spent on the road are recorded. Knowing that information, how would that effect your strategy and business model?

The business you can become: results

Users of AMCS Route Planner Plus report between 5% and 25% reductions in the number of vehicles and driver shifts needed. They’ve also reduced the number of miles, driving time, and CO2 emissions by up to 30%. The time spent manually optimising routes consumes hours of resources and can’t begin to approach the same quality as the automated process of AMCS Route Planner Plus. Users have reduced the time spent per route optimisation by up to 90%. They’ve also significantly improved customer service and visit accuracy, delivering on time.

More nimble, more profitable

This is about creating significant efficiencies and delivering food, ingredients and packaged meals on time. Driving few miles with fewer vehicles dramatically reduces your transport costs. And saving on transport costs reduces your operating costs, while giving your margins breathing room. Considering the results we’ve given, it’s up to you to calculate how those figures would impact your business. Then ask yourself if it’s worth continuing on your current path.

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