Illustrations with example numbers.
The foundation: dynamic order assignment. The system distributes orders live between the vehicles and drivers available at that moment. It takes into account time windows, maximum transport time, capacity, other requirements and the specifics of the logistics in question, and when something goes wrong (a breakdown, an absence, a traffic jam) it immediately re-plans the work of the others.
The second foundation: an accurate forecast. Demand has a random component, but it can largely be predicted. It depends, however, on many factors that differ from industry to industry, so building a reliable forecasting model is hard and few companies use one. We have been developing such models for years: the more accurate the forecast, the fewer resources need to be planned for the day.
Only then: fewer vehicles and one shared buffer. On these foundations you can reduce the number of drivers and vehicles and replace the separate buffers of fixed routes with one shared buffer, much smaller than their sum. Without them, a smaller fleet quickly takes its toll on quality.
Dynamic assignment does not mean the plan changes every few minutes. Orders are pre-assigned to vehicles straight away, roughly by direction, and most of them stay on their original vehicle until departure. Reassignments affect only part of the orders, usually between neighbouring routes, so order in the warehouse is maintained (how this works in the warehouse).
A shared fleet also makes forecasting itself easier. With a fixed split into routes, each area is in practice served by its own single-vehicle fleet, and the number of orders from one area is much harder to predict than from the whole territory. The total across all routes is largely repeatable from day to day, while individual routes fluctuate far more. It is a simple statistical effect: the fluctuations of individual areas partly cancel each other out.
Many fleets, for example in on-demand delivery and courier companies, already work as one shared fleet and still do not reach similar productivity. Simpler order dispatching mechanisms, which miss the dozens of nuances our system takes into account, need larger buffers, and therefore higher resource costs, to avoid losing quality.
An optimal split rarely looks obvious. A map shows only where the points are and how far apart they are, and simply ordering stops to minimise kilometres is a relatively easy task. What it does not show is what decides the order in practice: that a point is not yet open and cannot come first, that another has priority and a short delivery window, that a stretch of road has tolls, roadworks or traffic jams at that time of day. That is why a route that looks illogical on a drawing often turns out cheaper than the one a person would plan by eye.
Navigation matters too, but most fleets use navigation with consumer origins. It accounts for vehicle size and weight, but it does not find the optimal route taking road tolls into account, and in the last mile it will not take a courier through a car park or a gate. Ours does, which can cut a trip by two junctions and 10 minutes (how the system knows how long a trip will take).