A DHL-financed Start-Up
less computing time
Greenplan, a DHL-financed start-up, is driving sustainable logistics with its route optimization algorithm that lowers operational costs and the environmental impact of deliveries.
Poor route optimization has long been a common pain point for logistics providers trying to keep costs low and efficiency high. If left unresolved, logistics providers face delays in deliveries, a fall in productivity and mounting losses. But why is that the case?
Once manageable with a simple Excel sheet, the tedious route planning process now needs to account for evolving traffic conditions in often-congested urban cities, on top of factoring in different delivery times. In the perfect scenario, the outcome would be well-planned driver routes minimizing mileage, fuel use, and driving hours, while maximizing the productivity of the driver and utilization of the vehicle.
In reality, however, it rarely pans out without roadblocks. Many automated route optimization tools available on the market have tried and failed to tackle this problem, but that has not deterred newcomers like Find out more aboutGreenplan, a DHL-financed start-up, from joining the fray.
With its smart algorithm developed in conjunction with the Research Institute for Discrete Mathematics at the University of Bonn, Greenplan ensures delivery vehicle capacity is utilized efficiently and routes are calculated with the optimum delivery conditions including start time and traffic flow.
“By optimizing delivery routes and stop sequences, the algorithm significantly shortens operating times, reduces running costs and ultimately avoids every unnecessarily driven kilometer,” explains Dr Clemens Beckmann, CEO of Greenplan.
The logistics veteran is well aware of the complexities involved in route planning from his experience at the helm of multiple innovation projects at Deutsche Post DHL Group, where he has held various roles for over 20 years. Now, with Greenplan, keeping up with technological developments along with rising consumer expectations is the greatest challenge for Beckmann and his team.
“The growth of e-commerce and changing consumer behavior is driving demand for scalable delivery solutions as well as the need for same-day and time-definite deliveries,” said Beckmann on responding to customers’ needs.
Greenplan built the tool precisely to cater for these increasing delivery complexities. It enables better prediction of estimated arrival, allowing for possible time window arrangements, and enabling priority handling services for critical shipments. Unlike other tools that use postal codes or geo-fencing to map delivery routes, Greenplan’s algorithm considers relevant factors, such as vehicle characteristics and payload restrictions, to optimize costs and fleet utilization.
But what truly sets it apart from its competition is the way the company designed the algorithm according to the true traffic flows. It calculates the routes using daytime-dependent, road-specific travel times that reflect the actual situation that drivers face on the road, even in crowded cities.
“If drivers consider the planned tours and stop sequences as unrealistic or impractical and reject them, the new route planning system won’t be successful,” explained Beckmann on the importance of user acceptance.
This method of calculation generates costs savngs of up to 20 percent compared to standard route optimization solutions, simply by reducing kilometers driven and thus lowering the carbon footprint. The speed at which the calculation can be done is also a game-changer. In the planning stage, integrating time-of-day-dependent velocities on every street segment initially slowed the algorithm's processing times.
However, thanks to the rigorous, systematic approach of Greenplan’s collaboration with the University of Bonn, the algorithm's processing time was lowered significantly. It now uses 70 percent less computing time than standard tools. Likewise, Greenplan also offers rapid and flexible updates - a crucial feature for route optimization tools. By housing all map data in a single database, the tool is less rigid and can respond to changes efficiently unlike older systems or tools.
“Short-term changes or certain error corrections can be implemented in fast updates without long waiting times. Our software-as-a-Service (SaaS) architecture makes global deployments as easy as local implementations,” said Beckmann.
A DHL-financed Start-Up
less computing time
Besides offering practical features to optimize logistics operations, Greenplan also strives to fulfill its “green” responsibility of minimizing the environmental impact of delivery vehicles. “The ever-increasing growth of e-commerce is imposing two major challenges on dense cities: pollution and traffic congestion caused by the increasing number of delivery vehicles,” said Beckmann.
For city authorities and logistics companies, growing traffic volumes can cause delivery delays, increase accident rates, and lower air quality - issues that Greenplan aims to prevent with its algorithm. If implemented successfully, the algorithm should result in shorter distances and fewer tours for delivery vehicles. This would translate into reduced carbon dioxide (CO2) emissions, which is in line with Deutsche Post DHL Group’s commitment to Click here to learn more aboutzero-emissions logistics by 2050.
“We provide visibility on the estimated carbon footprint based on planned delivery routes. Our solution also considers CO2 emissions per vehicle type as well as specific parameters for electric vehicle fleets, like range limits, to plan the most efficient routes,” said Beckmann, who believes this development should be a standard practice in driving sustainability in logistics.
Despite the challenges ahead, he is optimistic that sustainable urban logistics is attainable in the near future. “If our solution can help to achieve climate goals, it is not only an entrepreneurial challenge but it also gives me the good feeling that Greenplan will serve a greater purpose beyond logistics,” added Beckmann. Others seem to agree. In October 2020, Greenplan won the Find out more about thePostEurop Innovation Award, which aims to foster a stronger affinity and engagement in innovation concepts, ideas, and findings among its members in a consistent and continuous manner. PostEurop is the association which represents European public postal operators.