Dynamic Route Planning: What It Is, How It Works, and Why You Need It
Retail and FMCG

Dynamic Route Planning: What It Is, How It Works, and Why You Need It

Nitin Mirchandani
August 29, 2023

What is Dynamic Route Planning?

Dynamic route planning is the process of creating delivery routes and stop sequences based on the customer and order mix. Dynamic route planning adapts to changing conditions and offers the best route at any given moment, in contrast to traditional route planning, which develops a fixed plan for a specific period.

Dynamic route planning is effective and useful for carrying out successful last-mile operations in e-commerce, food delivery, grocery delivery, home services, etc. Dynamic route planning is the ability to include last-minute customer requests with previously scheduled orders and reroute dynamically to customer locations.

How Does Dynamic Route Planning Work?

The Process of Dynamic Route Planning

Dynamic route planning works by using advanced algorithms and real-time data to optimize the delivery routes and schedules. Here are the main steps involved in dynamic route planning:

1. Real-time data collection

Real-time data is essential for dynamic route planning since it allows for the creation and modification of routes. Real-time data includes information such as:

  • Customer preferences and time windows
  • Order volume and size
  • Vehicle capacity and availability
  • Traffic conditions and road restrictions
  • Driver skills and availability
  • Weather conditions and events

Real-time data can be collected from various sources such as GPS devices, sensors, cameras, mobile apps, etc. Real-time data can also be updated by the drivers, dispatchers, or customers through feedback or requests.

2. Route optimization

Route optimization is the process of finding the best possible routes for the delivery vehicles based on the real-time data. Route optimization uses advanced algorithms and artificial intelligence to consider various factors.

  • Distance and travel time
  • Fuel consumption and emissions
  • Customer satisfaction and retention
  • Driver productivity and safety
  • Operational efficiency and flexibility
  • Profitability and competitiveness

Route optimization can also take into account different constraints such as:

  • Vehicle capacity and type
  • Driver skills and preferences
  • Customer time windows and locations
  • Traffic rules and regulations
  • Service level agreements and policies

Route optimization can generate multiple route options for each vehicle or fleet of vehicles. The best route option can be selected based on the objectives and criteria of the business.

3. Route execution

Route execution is the process of following the optimized routes by the delivery vehicles. Route execution involves real-time visibility and communication between the drivers, dispatchers, and customers. Route execution can also include features such as:

  • Turn-by-turn navigation and guidance
  • Live tracking and monitoring
  • Proof of delivery and signature capture
  • Alerts and notifications
  • Ratings and reviews

Route execution can also provide feedback and data to improve the route optimization process.

4. Route modification

Route modification is the process of updating the routes based on the changing conditions or customer requests. Route modification can be triggered by various events such as:

  • New orders or cancellations
  • Traffic jams or accidents
  • Road closures or diversions
  • Weather changes or emergencies
  • Driver delays or absences
  • Customer complaints or reschedules

Route modification can use the same algorithms and data as route optimization to generate new routes or adjust existing routes. Route modification can also communicate the changes to the drivers, dispatchers, and customers.

Why Do You Need Dynamic Route Planning?

Dynamic route planning can help you achieve various benefits such as:

  • Reduced fuel costs and emissions
  • Increased driver productivity and safety
  • Improved customer satisfaction and retention
  • Enhanced operational efficiency and flexibility
  • Higher profitability and competitiveness

Dynamic route planning can help you overcome the challenges of last-mile delivery such as:

  • Rising customer expectations and demands
  • Increasing order complexity and variability
  • Growing traffic congestion and road disruptions
  • Limited vehicle and driver resources
  • Changing regulations and compliance requirements


Dynamic route planning is a smart solution for the future of transportation. It can help you optimize your delivery operations, reduce your costs, improve your service quality, and increase your customer loyalty. If you want to learn more about dynamic route planning and how it can help your business, contact us today.

Naveen Merudi Co Founder Qbit
Nitin Mirchandani

Alumnus from IIM Calcutta, Nitin has experience of over two decades of strategic and operational experience, building companies and SAAS businesses.

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