New York , Nov. 20, 2023 (GLOBE NEWSWIRE) -- The global route optimization software market size is slated to expand at 15% CAGR between 2023 and 2035. The market is poised to garner a revenue of USD 180 billion by the end of 2035, up from a revenue of USD 6 billion in the year 2022. The growth of this market can be attributed to the escalating demand for advanced transportation management systems. As the work is moving towards urbanization and industrialization more and more people are owning vehicles which leading more congestion, traffic, and accidents on roads.
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Route optimization software to these issues by offering the shortest and fastest route to drivers as a result optimizing delivery routes, enhancing overall transportation efficiency, and lowering travel time. As per research, during the peak commute times on average Americans spend 41 hours annually battling with traffic. Additionally, rapid advancement in technology is another substantial reason behind the expansion of the route optimization market in the projection period. Real-time insights and analytics are now possible because of the emergence of new technologies like the Internet of Things (IoT), big data analytics, and cloud computing. Through the use of these technologies, route optimization software can forecast traffic trends, closures of roads, and weather by learning from past data. This makes routing decisions more precise and effective.
Route Optimization Software Market: Key Takeaways
- Market in North America to propel highest growth
- The on-premises segment to garner the highest growth
- Market in Asia Pacific to grow at a highest rate
Increasing Integration by Logistics Companies across the Globe to Boost Market Growth
In 2017, traffic in the United States accounted for around USD 305 million which comes to around 1445 per driver. Traffic congestion highly poses an impact on the logistics industry. These transportation issues affect the business model and expand the operational cost. Therefore, the growth of the route optimization software market is highly driven by its high usage by the logistics industry. As a result of digitalization, the e-commerce industry is moving on top, and more people have indulged in online shopping such as online retail these days. The high popularity of online shopping has pushed courier services and e-commerce companies to incorporate route optimization software technology in order to optimize delivery effectively and provide customer satisfaction. Additionally, trends such as 2-day delivery, 10 minutes delivery have boosted the demand for market across the globe. Approx. 2.14 billion consumers are expected to have made online purchases in 2021. The prediction for worldwide e-commerce sales at the time was USD 4.891 trillion. Additionally, forecasts indicate that by 2024, global e-commerce revenues would reach USD 6.4 trillion. The increased usage of route optimization software, cloud-based deployment, on-premises deployment, and other technologies has been significantly impacted by the expansion in internet penetration worldwide. Due to the quick internet, many businesses may utilize route optimization software to effectively determine their routes.
Route Optimization Software Industry: Regional Overview
The global route optimization software market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America, and the Middle East and Africa region.
Expanding Cloud-Based Solutions for Scalability to Drive the Market Growth in North America Region
The route optimization software market in North America region is estimated to garner the largest revenue by the end of 2035. Cloud-based route optimization solutions are gaining popularity for their scalability and accessibility. The cloud enables businesses to access their route optimization tools from anywhere, streamlining updates and maintenance. This scalability is particularly beneficial for companies experiencing growth or seasonal fluctuations in demand. It was noted that 83% of enterprise workloads was in the cloud by 2020. Advanced route optimization solutions leveraging AI and machine learning offer more accurate and dynamic route recommendations. These technologies analyze historical data, real-time traffic conditions, and even weather, leading to optimized routes and better decision-making, further driving the adoption of these solutions. With growing awareness of environmental concerns, many businesses are embracing sustainable practices. Route optimization software assists in reducing the carbon footprint by optimizing routes, which minimizes fuel consumption and emissions, aligning with sustainability goals and regulations. The integration of route optimization software with IoT and real-time data analytics allows businesses to make dynamic route adjustments. Real-time information on traffic, vehicle conditions, and weather enables companies to optimize routes on the fly, ensuring efficient and timely deliveries, which is crucial in a region as vast as North America.
Growing E-commerce Ecosystem to Propel the Growth in the Asia Pacific Region
The Asia Pacific route optimization software market is estimated to garner the highest CAGR by the end of 2035. The surge in e-commerce activities, coupled with changing consumer behavior, has heightened the demand for efficient last-mile delivery solutions. Route optimization software plays a pivotal role in streamlining delivery operations, reducing costs, and enhancing the overall customer experience, making it indispensable for e-commerce players and logistics companies. The Asia Pacific region is experiencing significant urbanization and population growth, leading to greater logistical challenges, including traffic congestion and increasing transportation demands. Route optimization software helps businesses navigate these challenges by optimizing routes, reducing travel time, and alleviating the strain on infrastructure. The United Nations estimates that over 50% of the global population resides in Asia, with urbanization rates on the rise. Rising fuel prices and escalating operating costs are compelling businesses in the Asia Pacific region to seek cost-effective solutions. Route optimization software helps optimize routes, minimize fuel consumption, and enhance driver productivity, resulting in substantial cost savings and improved operational efficiency.
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Route Optimization Software Segmentation by Deployment Mode
- Cloud
- On-premises
Amongst these segments, the route optimization software market on-premises segment is anticipated to hold the largest share over the forecast period. Many industries are subject to specific regulatory requirements that dictate where and how data is stored and processed. On-premises solutions offer greater control over compliance with these regulations, as organizations can implement necessary security measures and processes directly. Data security and compliance remain paramount concerns for organizations, especially those handling sensitive or regulated data. On-premises software solutions provide greater control over data, ensuring it remains within the organization's physical boundaries, reducing the risk of data breaches or compliance violations. A survey found that 80% of organizations have compliance concerns about their data in the cloud. Certain industries, such as finance, healthcare, and government, handle extremely sensitive data. On-premises solutions are preferred in these sectors because they provide greater control over data and reduce the risk of data exposure due to the physical isolation of data centers.
Route Optimization Software Segmentation by Organization Size
- SMEs
- Large Enterprise
Amongst these segments, the route optimization software market large enterprise segment is anticipated to hold a significant share over the forecast period. Large enterprises frequently operate on a global scale, managing diverse operations across various regions. They require software solutions that can adapt to different markets, languages, and regulatory environments, while providing centralized control and visibility. According to the World Trade Organization, global merchandise trade volume is expected to increase by 9.2% in 2021. Large enterprises often have intricate business processes and workflows that require customization and tailoring to meet specific needs. The demand for software solutions that support customization and automation of these workflows is substantial. Many large enterprises operate in regulated industries such as finance, healthcare, and government. Compliance with industry-specific regulations is a top priority. Software solutions that facilitate regulatory compliance and meet industry standards are critical to these organizations. Large enterprises generate and manage vast amounts of data. They require software solutions that can scale to meet their specific resource and data capacity needs. On-premises and cloud-based software options are selected based on their ability to accommodate the enterprise's growth and resource demands.
Route Optimization Software Segmentation by Component
- Software
- Services
Route Optimization Software Segmentation by End User
- On-Demand Food Delivery
- Ride Hailing & Taxi Services
- Field Services
- Retail & FMCG
Few of the well-known market leaders in the global route optimization software market that are profiled by Research Nester are Trimble Inc., Caliper Corporation, Descartes Systems Group Inc, ESRI Global Inc., Onfleet Software Company, Best Mile Sarl Software Company, Arundo Analytics, Inc, PTV Group, and other key market players.
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Recent Development in the Route Optimization Software Market
- Google LLC announced the release of two new products, Google Cloud Fleet Routing API and Last Mile Fleet Solution on the Google Maps platform to help fleet operators improve delivery and optimize fleet performance optimization.
- PTV Group launched a cloud-based route optimization product for the consumer-packaged goods industry to help manufacturers, retailers, wholesalers, and carriers deliver goods packaging consumers by region and managing the complexities of urban delivery, enabling organizations to improve reliability and customer satisfaction with sustainably automated processes, and thus faster and more efficient.
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