Every day, logistics companies face a challenge. Whether you move products within a city, a region, or a country, you need to define the most efficient sequence for visiting multiple stops. But with dozens or even hundreds of locations, how do you find the most optimal route to save costs and product condition (especially if they are perishable)? This presents a vehicle routing problem, and there are various types of it. So, how do you solve each of them efficiently?
For logistics and transportation businesses, the right vehicle routing problem solution can be a game-changer. This article explains the complex phenomenon of vehicle routing problems and suggests strategies and tools to mitigate them.
What is the vehicle routing problem?
What is a VRP? Vehicle routing problem is the process of determining how to efficiently move vehicles from a central point to multiple destinations while satisfying various constraints. VRP asks two deceptively simple questions: which vehicle should visit each location, and in what sequence should these visits occur? A VRP is connected to handling multiple vehicles simultaneously across a complex network of possibilities.

Consider a brewery distributing craft beers to dozens of pubs with temperature-sensitive deliveries, or a mobile blood donation service scheduling neighborhood visits based on demographic data. Each scenario demands more than just finding shorter distances — it requires balancing vehicle capacities, driver schedules, fuel consumption, and customer expectations simultaneously.
Despite its complicated nature, there are strategies to solve it. The beauty of vehicle routing optimization lies in its versatility across industries. However, if you are hesitant about whether you need to implement this technology or not, let’s review issues that your business might face due to inefficient route planning.
How do vehicle routing mistakes impact costs, delivery times, and customer satisfaction?
The operational inefficiencies caused by poor vehicle routing result in resource misallocation, but do not end there:
- Increased fuel costs
When drivers take longer routes or make avoidable backtracking maneuvers, each wasted mile consumes fuel that provides zero value to your operation. For delivery businesses operating on thin margins, these excess fuel costs — which can reach 10-25% above optimal levels — directly erode profitability with every trip. Instead, route optimization cuts fuel costs - and just a 10% reduction in distance traveled saves tens of thousands of dollars monthly.
- Bigger maintenance expenses
Inefficient vehicle routing accelerates vehicle wear and tear dramatically. When vehicles drive longer distances on poorly planned routes, critical components like brakes, tires, and transmissions deteriorate faster. This accelerated deterioration typically increases maintenance costs by 15-30% compared to optimized routing scenarios, creating both scheduled maintenance expenses and unexpected breakdowns.
- Extended delivery times
Poor routing stretches delivery windows beyond limits. As a result, what should be a 1-2 hour delivery window might expand to 3-4 hours or more. These delays add up throughout the day, with each late delivery pushing further stops further behind schedule. Drivers become increasingly rushed, service quality suffers, and the entire operation begins to revolve around damage control rather than excellence.
- Raising customer dissatisfaction
Customer expectations for delivery precision have never been higher. Research shows that 17% of customers abandon retailers after just one late delivery, while 55% leave after experiencing 2-3 delays. In competitive markets, these defections translate directly to revenue loss. Moreover, dissatisfied customers typically share negative experiences with 8-10 others, creating a multiplier effect that damages reputation, which leads to the next consequence.
- Failed competitive advantage
Businesses failing to optimize their routing approach ultimately face a significant competitive disadvantage. While they struggle with manual processes or basic routing, competitors implementing sophisticated solutions can deliver faster, more reliably, and at lower costs. This efficiency gap typically shows as a 15-25% operating cost difference that competitors can either convert to higher profits or pass to customers as lower prices — either scenario leaves the inefficient business struggling to remain viable in the marketplace.