Dynamic Route Planning Builds Stability into Bulk Gas Distribution

Supply-demand disruption during and since COVID-19 upended traditional static and master route distribution models for bulk gas fuel. The result has been higher fleet costs, uneven customer service and strained manual processes trying to meet volatile demand.  

Fleet operators in the commercial and industrial gas market have historically found supply management to be more art than science. The same trucks supply homes and businesses on fixed routes, delivering mainly propane gas and fuel oil. Usage fluctuates with temperature and demand. Large commercial and industrial users deploy sensors and metering to monitor flow and available capacity; small mom-and-pop businesses and households are mostly satisfied with a consistent schedule of regular deliveries based on rough demand forecasts. 

In the previous B2B environment it was enough to know tank capacities, baseline usage patterns — and “degree days” of declining temperatures (meaning higher consumption) since the last fill up — to forecast when next to schedule a delivery. When degree days pass a threshold, an optimal 150-gallon delivery is triggered through the fleet operator’s ERP system, to be made within a seven-day window, allowing the operator time to build a full load. A truck can never be precisely timed for all deliveries. Drivers constantly risk returning with fuel left over or, worse, coming up short, requiring a follow-up trip. 

Add to all of this market volatility from multiple competing suppliers of all sizes and geographic reach, delivering an essential but standardized product on fixed routes, many in remote locations. More customers, even those with smaller orders, have growing expectations around on-time/in-full (OTIF) delivery and updated ETAs. The system’s inefficiency — highlighted during COVID supply disruption and hoarding — continues to cost distributors serious money. 

The Need for Change

The industry is ripe for change, specifically dynamic route planning driven by optimization software and analytics, says Cyndi Brandt, vice president, fleet solutions for cloud-based logistics and supply chain management solutions provider Descartes. 

Dynamic route planning abandons fixed routes and regular calls initiated by the supplier based on past demand, usage and weather, and instead optimizes deliveries across the broad network, directing capacity and service where it’s most immediately needed. The challenge is the chan…