Vehicle Route Optimization Software Market Size, Share and COVID Impact Analysis, By Deployment Mode (On-Premises, Cloud), By Industries (Retail & FMCG, On-Demand Food Delivery, Ride Sharing & Hailing Services, Others), and Regional Forecast, 2025-2032

Vehicle route optimization software is route-optimizing & fleet management software designed to help dispatchers and fleet managers optimize their delivery routes cost-effectively and efficiently. It enables users to find the most efficient routes to various destinations, including pick-ups and drop-offs across the supply chain.

In today’s fast-paced and dynamic world, businesses that deal with goods transportation are always looking for ways to reduce operational costs and optimize the overall productivity of their fleet.

Vehicle route optimization software uses algorithms to help route planners and dispatchers calculate the best possible vehicle path that would minimize their transportation costs. With the help of vehicle route optimization software, drivers can spend less time in traffic and avoid the inconvenience of zig-zagging across town or road congestion.

Dispatchers and schedulers can use vehicle route optimization software to efficiently map out the fastest routes for their entire fleet and maximize the number of stops for each driver on any given day.

Vehicle route optimization software uses complex algorithms to analyze various factors such as a number of vehicles, their capacities, delivery locations, and traffic patterns to calculate the most efficient delivery routes to avoid delivery delays. These routing algorithms calculate multiple potential routes based on various parameters, such as driving times, and distance between locations. Even road conditions to find the best path for the vehicle in less than a minute.

Vehicle route optimizing software provides several benefits including reduced fuel cost, as the software takes into account the most efficient and shortest routes, increases efficiency by scheduling deliveries in real-time, and improves customer satisfaction as the customers receive goods faster and reliably.

The recent boom in online orders in e-commerce has led to last mile delivery challenges. The rise of e-commerce has changed consumer preferences, as they expect same-day delivery. Hence, most e-commerce companies use last mile delivery optimization tools such as vehicle route optimization to minimize cost and make last mile deliveries more efficient. For instance, in November 2022, Carrier Logistics Inc. (CLI), a freight management software provider has introduced a new AI based routing logic and planning optimization solution that helps trucking fleet operators determine which deliveries sequence, creating optimized and precise route plans. The module is designed to improve efficiency and profitability for last-mile and parcel delivery companies.

Impact of COVID-19 on the Vehicle Route Optimization Software Market

Supply chain disruptions posed a major challenge to the global economy since the start of the pandemic. Shutdowns of factories in early 2020, lockdowns in several countries, labor shortages, robust demand for consumer goods, disruptions to logistics networks, and capacity constraints led to increases in freight costs and delivery times. The vehicle route optimization software witnessed a significant boom during the pandemic owing to the rise in e-commerce and good deliveries.

The vehicle route optimization software helps in finding the most effective ways to transport goods from a central hub to several drop-off locations while matching different business requirements, such as vehicle cost, capacity, and loading time. COVID-19 had put an increased strain on delivery networks, and caused driver shortages, data mismanagement, factory closures, and an increase in fuel prices which impacted delivery time and success. Hence, to mitigate the losses several e-commerce companies implemented Last Mile Fleet Solution to address these issues and create seamless experiences for fleet operators, consumers, drivers, and fleet managers.

Key Insights

The report will cover the following key insights:

• Key Industry Developments – Mergers, Acquisitions, and Partnerships.


• Porter’s Five Forces Analysis.


• Technological Developments.


• Impact of COVID-19 on the Vehicle Route Optimization Software Market.

Segmentation

Analysis by Deployment Mode

The cloud segment is anticipated to register a higher CAGR over the forecast period. The growing number of cloud-based solution providers to the transportation & logistics industries is driving the segment growth. Cloud-based route optimization software offers maximum security, data backup, and protection.

Users of cloud-based route optimization software minimize the risk of software downtime and provide higher levels of resilience and improved uptime. Additionally, cloud-based software reduces the cost, inconvenience, and risk of data disruption. 

Analysis by Industries

The transportation segment is anticipated to hold a significant share of the vehicle route optimization market owing to its rapid deployment in ride-sharing & hailing services. According to Pew Research Center 2019, 36% of Americans use ride-hailing services such as Lyft, and Uber. The growing number of ride-hailing services and online cab booking will drive vehicle route optimization software deployment over the forecast period.

Cab-sharing services demand on-time passenger pick-up and drop at the destination point, which is possible through efficient & optimized route planning. Vehicle route optimization software saves fuel costs and reduces waiting time and extra riding time.

Regional Analysis

North America is projected to clutch the largest market share in the vehicle optimization software market owing to the growing number of online delivery services and the boom in the e-commerce sector. Additionally, several market players and startups provide cloud-based solutions & services to meet the requirements of various verticals, including FMCG, taxi services, and food delivery. Several new entrants or startups, such as FleetZoo, and HyperTrack, have created cutting-edge last-mile route optimization solution that reduces time spent by drivers planning their routes manually and helps increase the number of deliveries per day. All these factors will help drive regional growth over the forecast period.

Key Players Covered

Google LLC (U.S.), RoadWarrior(U.S.), Samsara (U.S.), Intellishift(U.S.), Route4ME, Inc.(U.S.), Prism Visual Software, Inc. (U.S.), Wise Systems, Inc.(U.S.),  ROUTIFIC (Canada), Paragon(U.S.), LogiNext (U.S.), and Fleetmatics Group PLC.(Ireland).

Key Industry Developments

• May 2022: PTV Group, a global software company for mobility and logistics solutions, launched a route optimization cloud product for the consumer packaged goods industry to meet the challenges of last-mile delivery for consumer packaged goods in urban areas.


• March 2022: Google announced tools to help businesses that operate extensive delivery fleets: the Cloud Fleet Routing API and Last Mile Fleet Solution. The Last Mile Fleet Solution, which is part of Google Maps, will emphasize optimizing their delivery operations.