Propane Delivery Route Optimization Today: Tools, Technology & Best Practices

The next time you gather around for family dinner with grandpa, you might want to ask him how he and his dad did propane delivery route optimization for their trucks back in the 1960s. After you get past the puzzled look, you might ask some questions:

“Grandpa, how did you know the best way to organize your deliveries for a day?”

He replies, “Uncle Steve.”

“But how did you know where each stop was?”

“Uncle Steve.”

“How did you know if your drivers could deliver everything and not run out?”

“Uncle Steve.”

Yes, every company had an “Uncle Steve” who just had it “in his head” and after 20 years knew every customer location, where the tanks were, what the schedules were and everything else routing-related.

Today, things are a little different. Some of us still have an Uncle Steve, but we also have GPS satellites, highly predictable mathematical routines for calculating optimization and dozens of other tools that are readily available to all propane delivery companies. Moreover, we have electronic databases of our customers that can manage the process of storing and updating routes in seconds. All of these factors have changed the landscape of route optimization in our own enterprises. It has allowed us to use team members with average or better skills to be highly successful and give us the same advantages “the big boys” have. Almost as good as Uncle Steve.

So How Does This All Work?

When we start thinking of route optimization, we generally think about maps and organizing things geographically so we can save time and diesel. In the old days, this meant thumbing through a route book and then putting a pin on the map to reference each delivery location. Obviously, this was time-consuming and painful. It took hours, but it did give a clear view of where the customers were, and we could make a plan to get them all delivered.

Today, route accounting software has become more sophisticated, with many providing all delivery locations organized and available in electronic form. This makes it easy for either your route accounting software program to optimize stops (if it has that capability) or export the delivery data into a program that can do the task for you.

This saves hundreds of hours, duplicates databases and makes it possible to reorganize routes quickly — even optimizing daily, if needed. While some companies do use external tools for this process, many retail propane companies have this built into their route accounting system for seamless access.

As routes are optimized, your software should take into account not only the geographic location of the customer, but their opening hours, prior usage, size of tank and special requirements. In addition, it should also look at external factors such as weather, traffic on roadways, restricted access (bridges and tunnels) and a myriad of other factors. The algorithms used for this process are sophisticated and accurate.

The Role of AI in Route Optimization

Some of you may be curious to know how AI has played into this space. Over the last few years, we have been bombarded with everything AI: AI can do this and AI can do that. It seems as if AI can solve every problem, from raising your children to picking a winning stock.

While in the early days, there was more hype than substance, things are slowly starting to change, and we are starting to see measurable benefits from AI tools. From writing emails that actually sound like your style to doing a better job of finding information than Google, the tools are evolving to find more useful applications in the workplace.

When it comes to route optimization, the transition is more hidden as software suppliers integrate the better logic found in AI to improve efficiencies in their products. After spending decades perfecting optimization logic, developers are finding new ways to incorporate more data in doing predictive deliveries and optimal route times.

One thing you can do to get onto this wave is to sharpen your AI skills. While most of us are familiar with ChatGPT, what do you know about Claude or Jasper, Gemini and Copilot? By taking a few short courses and investing a little time, you can have a better feel for what tools may be best tailored to your corporate needs. Generally, none of us have time to become AI experts, but a little information can help us ask our team better questions. Furthermore, when AI is embedded into your optimization routines, you may not even be aware of its presence — it just does what it does even better.

How do you jump onto the electronic optimization bandwagon? The best place to start is to determine what your business needs most from route optimization. Will this be a one-off exercise, or something that you will be doing as an ongoing exercise? Do you have someone in your organization that can take this on? How do you get your stops geocoded? Who can help you get started?

Start with your existing route accounting software provider if you have one. They will know if their software can do those tasks for you. If not, they will often know what integrates nicely with their software.

Depending on your needs, you can forge a path that will provide the best bang for the buck. If you are using Quickbooks or a nonpropane-specific software package, you can Google what is compatible (or use an AI tool) for help.

After you determine what tool you will need, you will want to start the implementation process, which includes setting up various parameters, geocoding customers, determining service areas, etc. This may take a few days or even longer depending on the quality of your data and the size of your company. The time you spend cleaning up bad addresses and other information will come back to you tenfold as you start to run optimization scenarios.

With setup complete, you can now start to play “what if?” to get sample suggestions and output. Don’t take what the system says to do as gospel. Look at the output and compare it to what you do today. Ask your dispatcher and even the drivers if it makes sense.

Once you can build some trust with the tool and its output, it’s a game changer. There is a real sense of accomplishment as you see your routes in a whole new light. It gives you the flexibility with a couple of clicks to try different things and be creative with the resources that you have. It also allows you to pivot quickly if something happens and you need to adjust. You are doing things that Uncle Steve could only dream of!

The next decade will likely see as many changes in route optimization as did the entire last half century. New routing tools are coming at us faster and faster. By understanding what is needed and a few basic concepts, we will not only avoid pitfalls, but, more importantly, employ them in our business for greater efficiency and profitability.