Route Optimization Software Market size is poised to expect exponential CAGR during the projected timeframe propelled by need for operational competency in route management. The world of supply chain has changed drastically over the last decade. The customers are now demanding varied & customer-centered experiences and faster delivery times & options. This has led the third-party shippers and manufacturers to adopt advanced digital route optimization solutions to gain edge over their competitors.
The growing demand for the route optimization solutions among the digital mobility, shred mobility and car sharing also promoted the market growth. The rising urban traffic congestion has reduced the transportation efficiency of the taxis. The cab drivers are unable to predict the unforeseen traffic conditions. The route optimization software considers multiple factors such as time of the day, location and distance to provide real-time updates regarding upcoming traffic scenarios to optimize their travel routes.
The route optimization software market is characterized by cloud and on-premise deployment models. The cloud market is expected to grow rapidly as it does not involve any capital cost and has low maintenance requirements. The cloud deployment models provide companies with flexible deployment alternatives which compromising on the functionality. Therefore, it is widely used across SMEs & large enterprises. The high capital investment associated with on-premise deployment model is the primary factor limiting the growth of the market.
The route optimization software is used across several business sectors including retail & ecommerce, 3PL service providers, home services, retail and consumer products & goods (CPG) & fast-moving consumer goods (FMCG). The retail & ecommerce holds the major share in the route optimization software market. The software helps companies avoid expensive delivery mistakes by ensuring accurate customer address, tracking of delivery agents and keeping customers informed about the delivery status. The 3PL market will grow at a very high pace during the forecast timeline. The route optimization software enables automated route planning that considers multiple real-life constraints & distribution models using machine learning algorithms. It also provides real-time re-routing & dynamic ETA calculations to ensure efficient operations.
North America holds the dominating position in the route optimization market. The rise of various digital mobility and shared mobility such Uber and Lift has accelerated the adoption of route optimization solutions in the region. In addition, the widespread adoption of advanced driver assistance systems by automakers has further fostered the market growth. The route optimization software providers are collaborating with automotive manufactures to integrate their cutting-edge technology into the vehicles.
The Asia-Pacific route optimization software market is anticipated to register the highest growth rate over the projected timeframe. This can be attributed to the high demand for route optimization solutions across the ecommerce and on demand food delivery industry. The online transportation companies such as Ola, Didi, Amazon ANI Technologies have focused on developing innovative and efficient route optimization solutions to strengthen their presence in the market. Moreover, the increasing adoption of smartphones in the region has nurtured the growth of route optimization software industry.
The companies operating in the route optimization software market are FLS- Fastleansmart, MiTSystems, ORTEC, PLC, Route4Me, Inc., Wise Systems, ROUTIFIC, Prism Visual Software, Paragon Software Systems, Optimoroutea, Verizon, Bestmile and Geoconcept. The market players are forming strategic partnerships with other companies to increase their market share. For instance, in 2018, Bestmile collaborated with HMI Technologies, New Zealand-based autonomous vehicle technology provider of develop route optimization solution for its self-driving vehicles. The start-ups present in the market have conducted fundraising activities to increase their market penetration. For instance, in 2015, Routific raised a funding round of USD 118 thousand from Techstars Chicago and Right-Side capital Management. This funding was aimed at expanding its U.S. operations.