Green Shipping: Routing Optimization Takes Center Stage
One of the buzz phrases I heard while listening to UPS and FedEx speakers at the 4th Green Transportation and Logistics Summit in San Francisco was “routing optimization”. RO is basically what it sounds like. It’s a fancy way of saying we’re working to minimize our fleet’s traveled distances and vehicle usage through the use of software. In turn RO reduces the amount of fuel used and GHG’s emitted. RO software is generally based on mathematical algorithms and originated from the fields of combinatorial optimization. The UPS “no left turn” PR piece was born from routing optimization. 
When I think about routing optimization the first and obvious optimization FGX makes is shipping direct. By utilizing flight paths that are direct we immediately lop off 30% of the mileage traveled. This is the strongest efficiency that FGX’s business model creates, but we want to take it even further. We’re studying our average weights and geographical collection densities. We’re realizing that it makes sense for FGX to have large vehicles strategically covering heavy collection zones supported by a walkers and
cargo bikes. The vehicle will act as a mobile collection center. My early analysis is showing we may be able to reduce our vehicle mileage by up to 50%.
One of the benefits of being a Business-to-Business company is that FGX can continue to expand ONLY in metropolitan areas and capture the vast majority of our market while operating very efficiently, even as companies like DHL are planning to do away with their services to domestic areas. As our very own RO project moves forward I will bring you the results.
How do you feel about FedEx, UPS and DHL talking about reducing left turns to save fuel, but then shipping a package going to Amsterdam from NYC to Memphis first?
Tags: Direct international shipping, FedEx, routing optimization, UPS
