Nearly 70% of companies say they frequently adjust delivery routes in real time, illustrating struggles with unexpected delays that can negatively affect customer satisfaction and lead to higher costs, according to a survey from Dutch optimization software and analytics solutions provider Ortec, released this week.
Ortec surveyed logistics, retail, manufacturing, and transportation professionals about their route optimization challenges. Of the 69% of companies that said they frequently make real-time route adjustments, nearly 40% said they make multiple changes per day.
The survey also found that traffic congestion (18%), strict delivery time windows (20%), and vehicle capacity constraints (22%) are the most significant challenges affecting last-mile route optimization. Additionally, nearly half of respondents said they are dissatisfied with their current route optimization methods, “signaling a critical need for more sophisticated solutions,” according to the survey’s authors.
Those problems are leading to higher industry costs and lower customer satisfaction.
The survey’s authors cited a recent report from the Council of Supply Chain Management Professionals (CSCMP) that indicated U.S. business logistics costs surged to more than $2.3 trillion in 2023, a 19.6% increase from the previous year.
“A large portion of these costs stem from last-mile inefficiencies, which have been exacerbated by labor shortages, fluctuating fuel prices, and unpredictable urban traffic patterns,” Ortec officials said in a statement about the survey results. “[Ortec’s] survey findings reinforce this broader industry trend, showing that inefficient routing is driving up operational costs for many companies.”
Beyond costs, the survey found that 40% of respondents reported that between 6% and 20% of their deliveries arrive outside the promised time window due to route planning issues, affecting customer satisfaction and brand reputation. In addition, 22% of companies cited inefficient routing leading to excess mileage as a primary factor increasing delivery costs.
Companies are turning to technology to address both cost and service concerns.
The survey found that while 25% of companies have successfully implemented AI-powered route optimization, an additional 30% are either in the process of adopting or planning to implement these solutions in the near future. However, 12% of respondents indicated that dynamic rerouting capabilities remain a key area for improvement, “suggesting that many existing solutions are not fully addressing the real-time complexities of last-mile delivery,” according to Ortec.
“The ability to set an effective strategy and create optimized standards that minimize real-time chaos while balancing cost efficiency and delivery accuracy is no longer a luxury—it’s a necessity in today’s fast-moving logistics environment,” Mat Witte, CEO of Ortec Americas, said in the statement.
The survey results are based on responses from 300 industry professionals.
This story has been updated to reflect survey methodology information from Ortec.
