Our views on route optimization

We have come across a wide range of paying schemes for subcontractors during our route optimization implementations. And each of these schemes have a significant impact on performance and cost. Therefore, it will come as no suprise that companies are struggling with choosing the most advantageous paying scheme for their type of business.

Below you'll find the most-used paying schemes, together with their pros and cons. These insights allow you to influence your subcontractor cost and performance.

The transport industry is one of the most competitive industries. Road taxes, tenders and low-cost country competitors increase pressure on the profit margin of many West-European transport companies.

Many companies struggle to survive. However, some companies succeed at staying ahead of competition. In this post, we list the aspects that these successful transport companies have in common. 

The international transport business is characterized by a high level of complexity. Orders can be delivered directly to the end-customer or can be dropped-off at one of the many partner hubs, incurring the last-mile delivery fee. As a result, transport planners are facing multiple possible end locations for every order. During rush hours this complexity increases pressure on the transport planners. In these situations, planners use rules of thumb to cope with the complexity.

Complexity can be controlled. Many transport companies are having issues developing an effective incentive pay scheme for their subcontractors. We have come across many types of paying schemes during route optimization software implementations. We experienced that these incentives have a significant impact on the performance and cost. In this article the most-popular paying schemes are listed, together with their PRO's and CON's.

These insights allow you to influence your subcontractor cost and performance