Opinion: Loop dispatch - turning right to profitability

By: Brendan Richards


Managing risk with technology and insight works for the bottom line

Opinion: Loop dispatch - turning right to profitability
Brendan Richards

 

As I have often stated, logistics is not an industry – it’s actually the function of movement itself. Understanding that, and developing a logistics mindset, can help businesses discover tremendous opportunities and sometimes those opportunities are the simplest of things.

UPS had its beginnings in 1907 as the American Messenger Company in Seattle, Washington. In 1919, the company expanded to Oakland, California, and changed its name to United Parcel Service, or the UPS we know today.

It now employs over 450,000 people and has revenues of around US$66 billion.

It’s impressive.

But even more impressive is some of the thinking that got it there. In particular, one decision that, since the 1970’s, has saved the company millions of gallons of fuel each year and avoided emissions equivalent to over 20,000 passenger cars per annum.

What is it?

UPS doesn’t turn left. That’s correct: UPS trucks don’t turn left.

For decades now, UPS drivers have been provided with a route to their destination which is calculated by software that figures out the most efficient course for each of its trucks. But the whole concept started many decades ago – long before GPS and computers were around to figure it out – when UPS simply relied on some smart people who, with a logistics mindset, had an epiphany.

The US drives on the right-hand side of the road. Every time American drivers turn left, they are turning against the flow of the traffic.

Not only is that dangerous because it makes collisions far more likely, it also wastes time and fuel. Your car idles longer while it waits to turn against the flow of traffic and that chews up both the clock and the petrol tank.

So, in the 1970’s, UPS started avoiding left-hand turns with a simple method called ‘loop dispatch’.

Basically, they just worked out deliveries based on a right-turning loop and starting with one side of the street first. By 2008, they had routing software calculating the best possible route for each vehicle while favouring right-hand turns.

Last year, that software managed to shave 20.4 million miles off their routes while UPS delivered 350,000 more packages.

Now, of course, the company hasn’t completely banned right-hand turns. It just tries to avoid them unless they are absolutely necessary.

Here in Australia, it’s the opposite.

We drive on the left-hand side of the road, so UPS would want to avoid turning right.

It’s a really simple idea that would probably save every transport company in Australia time, fuel and money not to mention lessen the likelihood of accidents.


Read Brendan Richards on avoiding curfews, here


To put that last bit in perspective for you, a study by the US National Highway Traffic Safety Association found that turning left was one of the ‘critical pre-crash events’ in almost 25 per cent of all accidents and were three times more likely to kill pedestrians than turning right.

UPS takes it so seriously that it has even developed its own maps that are more accurate than the commercially available ones.

After all, Google Maps will only show you the most direct route to your destination. It has no concept of avoiding a left-hand turn.

When I talk about having a logistics mindset, this is exactly the kind of thing I am referring to.

While UPS may benefit from being able to use GPS and software to maximise its route planning now, we all need to remember that the idea first came from people who understood that thinking about the function of movement is the key to unlocking opportunity.

Brendan Richards is KPMG National Sector Leader, Transport & Logistics

 

 

 

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