Walmart Rolls Out AI-Driven Route Optimization Software to Third Parties
Walmart is bringing its logistics savvy to other businesses, offering its own proprietary route planning software aimed at simplifying the complex “middle mile” of the supply chain.
Route Optimization is designed for businesses of all sizes to leverage artificial intelligence (AI)-powered software to optimize their driving routes, pack trailers efficiently and cut down on miles traveled by their trucking networks.
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The technology, developed by the company’s Walmart Commerce Technologies division, uses algorithms to determine the most efficient routes for deliveries and pickups. It considers factors such as traffic conditions, delivery windows, vehicle capacities and customer locations to generate automated, optimized routes for multi-stop deliveries that can minimize time driven and also lower emissions and fuel consumption.
Further aiding in efficiency and establishing a greener footprint, drivers can strategically plan inventory pickup on return trips from deliveries to ensure trailers are never empty.
These capabilities can enable businesses to adapt quickly to changes in delivery demands or scheduling constraints, ultimately enhancing trucking fleet productivity.
Using this custom technology, Walmart avoided 94 million pounds of carbon dioxide by eliminating 30 million unnecessary miles driven and optimized routes to bypass 110,000 inefficient paths.
“Customers want to be able to get the items they want where, when, and how they want them,” said Emily Schmid, channels and platforms senior director, digital strategy at Walmart. “A fast and efficient supply chain is critical to meeting this need, and the AI powering Route Optimization has helped us achieve this and more.”
Additionally, the technology’s dashboard is built to provide insights such as trailer usage, trip time and distance traveled without cargo to help operations management teams make faster, more informed decisions.
According to Schmid, the software has been a hit among employees and drivers alike.
“With its ability to organize and manage loading smartly, Route Optimization has made work more efficient for our associates,” Schmid told Sourcing Journal. “It has improved the experience for our drivers by removing unnecessary wait times during their journeys…Our core purpose is to save people money so they can live better; today, that not only extends to our customers, but to other businesses and to the communities that we serve.”
The software can be tailored to meet the specific needs of businesses across various industries and sizes, meaning local delivery services can use it, as well as large multinational logistics companies or a retailer with their own fleet, Walmart said.
“We have invested significant time, resources and operational knowhow into building solutions like Route Optimization, but that can be a barrier for many businesses,” said Anshu Bhardwaj, senior vice president and chief operating officer, Walmart Global Tech and Walmart Commerce Technologies. “By adopting our at-scale, AI-powered tech, businesses can eliminate the need and expense of developing their own technology, and instead focus on what they do best—serve their customers.”
The company did not reveal how many businesses are currently using the solution, but said “we have a healthy pipeline” of clients.
“Walmart has evolved beyond being just a retailer—we’re now an advertising business, a data company, a financial services provider, and a Software as a Service (SaaS) provider and more,” Schmid said. “By evolving our business model, we can make an even bigger impact. There are benefits for all of us by making Route Optimization available to all.”
Route Optimization is Walmart Commerce Technologies’ second turnkey, white-label solution, joining Store Assist, a SaaS technology that provides local fulfillment including shipping, pickup and delivery.
That app is designed to help retailers leverage their local stores as fulfillment centers, giving them the opportunity to optimize in-store fulfillment by increasing picking accuracy, speed and efficiency.
Walmart has provided businesses with other logistics tools since 2021, launching the B2B delivery service Go Local, which allows other retailers to leverage its contract delivery workers to cover the last mile.
The retailer itself has gotten more efficient at delivery in recent years as it seeks to better compete with Amazon and its other major rival, Target.
America’s largest retailer lowered last-mile store-to-home delivery costs by about 20 percent over the past year. Along with the optimized fulfillment costs, Walmart now offers same-day delivery from roughly 90 percent of its more than 4,600 U.S. stores. Additionally, store-fulfilled delivery sales were up nearly 50 percent.
