Is Traffic Congestion Slowing Down Your Delivery During Peak Season? We Got A Solution!

Traffic congestion remains a significant obstacle in logistics management. As this trend continues, freight service operators face the challenge of scheduling efficient deliveries. This article discusses the causes of traffic congestion, its impact on Logistics efficiency, and potential solutions to mitigate traffic congestion.

Traffic congestion

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1. Impact of Traffic Congestion

Traffic congestion is escalating worldwide, especially in developing countries with rapid economic growth, significant population increases, and unmet infrastructure demands, like Vietnam. According to the Institute for Transportation Strategy and Development under the Ministry of Transport, Hanoi's annual traffic congestion cost reaches $1.2 billion, equivalent to 1 million lost work hours. The INRIX 2018 Global Traffic Scorecard shows cities like Moscow, Istanbul, Bogota, Mexico City, and Sao Paulo as the top five most impacted by traffic congestion. TomTom's Traffic Index indicates a 75% increase in congestion levels from 2017 to 2018 across 56 countries.

Sự gia tăng của tình trạng tắc nghẽn giao thông

The Rise of Traffic Congestion

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2. Negative Impacts of Traffic Congestion on Logistics

For regular commuters, traffic congestion is simply an obstacle encountered on highways or urban roads due to traffic overload. However, for logistics professionals, traffic congestion is associated with circulation, capacity, volume, speed, and stagnation. A study in the Netherlands named VERDI, conducted by TNO, shows that half of the delivery delays to warehouses are due to traffic congestion.

Traffic congestion negatively impacts the supply chain because it can occur at any time of the day when road capacity does not meet vehicle traffic demands, especially during festive seasons when travel, delivery, and shopping demands increase.

Delays related to traffic congestion increase operational costs, such as additional fuel fees or wages paid to transportation staff when vehicles are stuck in traffic. Not only does it increase operational costs, but congestion also causes logistics managers' predictions and estimates to deviate from plans due to the lack of tracking of the shipment and driver locations. Traffic congestion also creates difficulties in monitoring Travel Time Reliability, as measuring delays related to each other over the delivery route becomes more complex. When vehicles need to stop at multiple delivery points and are delayed at one stop, a series of subsequent delivery activities will also be delayed without any control or monitoring. Delivery delays often lead to customer dissatisfaction, while the majority of delays are caused by traffic congestion. Tắc nghẽn giao thông có ảnh hưởng tiêu cực đến chuỗi cung ứng

Negative Impacts of Traffic Congestion on Logistics

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A case explained in a study on traffic congestion in Cairo reveals that among all the cost components directly related to traffic congestion in Cairo, the primary contributor to the total direct costs is delay costs (36%). Late deliveries have been shown to negatively impact customer expectations and experiences, particularly for door-to-door deliveries. If customers have to wait for late deliveries, they might consider switching to other delivery partners.

Delays due to traffic congestion also increase capital costs, which are the main long-term costs for physical assets, including transport vehicles. Traffic congestion plays a significant role in increasing these costs when vehicles are not used to their full capacity. Traffic-related delays also affect business models like Just in Time (JIT), which rely on the timely supply of goods as needed. Due to traffic congestion, this inventory management technique cannot be applied to serve the purpose of cost reduction. Traffic jams also negatively affect warehousing costs because the productivity of warehouse operations decreases, workloads are not efficiently organized, and deliveries become backlogged.

3. Main Causes of Traffic Congestion

There are numerous causes of traffic congestion. Particularly during holiday seasons, the sudden spike in transportation demand, coupled with a shortage of transport vehicles, leads to delays in loading or unloading schedules. Labor strikes in various industries, mishaps in warehouse management, adverse weather conditions, or road incidents are also factors contributing to traffic congestion.

4. Impact of Traffic Congestion on the Supply Chain

Traffic congestion directly affects delivery schedules and a company's competitive edge compared to industry peers not experiencing congestion. Traffic jams reduce opportunities for market expansion, affect the multimodal connectivity of freight transport, slow down the resolution of inventory issues, and hinder business operations. Ùn tắc giao thông làm chậm quá trình vận chuyển và ảnh hưởng đến hoạt động kinh doanh

Traffic congestion slows down the transportation process and affects business operations.

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5. Solutions to Alleviate Traffic Congestion and Speed Up Delivery

To mitigate the adverse effects of traffic congestion on logistics, the demand for Information Technology systems to manage logistics activities more effectively is increasing. These software solutions provide real-time alerts about traffic congestion delays and facilitate communication between vehicles and delivery points. Route planning has significantly improved due to advancements in information technology. These systems arrange congestion-free routes for vehicles, ensuring maximum efficiency in dealing with traffic jams. Companies should also adopt centralized warehousing to manage inventory, track inventory in real-time, or use cross-docking processes to cut warehouse costs. Khắc phục tắc nghẽn giao thông và tăng tốc độ giao hàng

Alleviate Traffic Congestion and Speed Up Delivery

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By utilizing route optimization algorithms, Abivin vRoute offers the most optimal transport management solutions to avoid traffic congestion, saving businesses time and money. The system automatically generates optimal routes and allows users to navigate deliveries and track inventory in real-time. With Abivin vRoute, companies can reduce the negative impact of traffic congestion and gain control over delivery operations.