Route optimization savings can be estimated by taking a fleet’s yearly fuel use, applying an assumed percentage reduction, and converting the litres saved into money and tailpipe CO2. The calculation is simple, but the reduction percentage is an assumption, so the result is a planning estimate to be checked with a pilot, not a prediction.
How do you estimate fuel and cost savings from route optimization?
Work out annual fuel use from fleet size, distance and consumption, then apply the assumed reduction, then subtract software cost. The steps match the fleet route optimization and ESG calculator.
- Annual fuel (litres) = vehicles x daily km x working days / 100 x litres per 100 km
- Fuel saved = annual fuel x assumed reduction
- Gross savings = fuel saved x price per litre
- Software cost = monthly cost per vehicle x vehicles x 12
- Net savings = gross savings – software cost
- CO2 avoided = fuel saved x emission factor
The calculator uses approximately 2.68 kg of CO2 per litre of diesel and 2.31 kg per litre of gasoline, which cover tailpipe emissions only. They do not include fuel production and delivery.
Worked example
The numbers are illustrative. A fleet of 20 diesel vehicles drives 150 km a day for 250 days a year, uses 30 L per 100 km, pays $1.60 per litre, and assumes an 8% fuel reduction. Software costs $25 per vehicle per month.
- Annual distance = 20 x 150 x 250 = 750,000 km. Annual fuel = 750,000 / 100 x 30 = 225,000 litres, costing $360,000.
- Fuel saved = 8% x 225,000 = 18,000 litres, worth 18,000 x $1.60 = $28,800.
- Software = $25 x 20 x 12 = $6,000.
- Net savings = $28,800 – $6,000 = $22,800, or $1,140 per vehicle.
- CO2 avoided = 18,000 x 2.68 = 48,240 kg, about 48 tonnes.
If the real reduction is 4% instead of 8%, fuel saved is 9,000 litres, gross savings are $14,400 and net savings are $8,400. The case still works, but with a much smaller margin.
Which inputs matter most?
The assumed reduction matters most, followed by daily distance and fuel price. Fleet size scales everything linearly, and software cost is usually small by comparison unless the savings are very low.
| Input | Where to get it | Risk if wrong |
|---|---|---|
| Daily distance per vehicle | Telematics or fuel card records | Averages hide short urban routes and long linehauls |
| Fuel consumption (L per 100 km) | Fuel purchases divided by distance | Vehicle type, load and idling change it |
| Fuel price | Actual invoices over the last year | Price swings change the money value, not litres |
| Assumed reduction | A pilot with a comparison group | Vendor claims may not match your routes |
| Software cost | Quote including onboarding and support | Hidden setup or integration costs |
How realistic is the fuel reduction assumption?
It depends on how efficient the current routing already is, how dense the delivery stops are, and how much traffic and time windows constrain the plan. A fleet that is already well planned has less to gain. Routes with many scattered stops and manual dispatching usually have more.
No honest general figure exists, so treat any number as a hypothesis. The best method is a pilot on a subset of vehicles over several weeks, compared against similar vehicles still using the old process. Then use the measured result, discounted for scaling, as the expected case and run a low case at half of it.
What is missing from a fuel-only estimate?
Fuel is only one benefit. Better routes can reduce overtime, vehicle wear, driver hours and late deliveries, but these are harder to measure and are not included in the calculation. Count them only if you have your own data.
Some effects work the other way. Optimized routes can reduce fuel but add complexity for drivers, or concentrate deliveries and increase waiting at docks. Electric vehicles need a different calculation based on energy cost per kilometre and the emission factor of the electricity grid. For related topics, see the logistics and transportation guides and the shipping carbon footprint calculator.
Can the CO2 figure be used for reporting?
Treat it as a rough planning figure, not a reportable number. Corporate emissions reporting needs documented emission factors, a defined boundary and consistent methods, such as those in the GHG Protocol. Tailpipe-only factors omit upstream fuel emissions, and the share of a fleet’s emissions that counts as your own or as supplier emissions depends on who operates the vehicles.
Checklist before validating the result
- Pull a full year of fuel and distance data, not a single month.
- Separate vehicle classes with different consumption.
- Choose pilot and comparison groups of similar routes and loads.
- Record the baseline before the pilot starts.
- Track fuel, distance, stops and on-time performance together.
- Include onboarding and driver training time in the cost.
- Rerun the calculation with measured results.
Where AI and analytics help
Route optimization engines use algorithms and, increasingly, machine learning to sequence stops, balance loads and adjust to traffic. Analytics on telematics data can also reveal idling, speeding and detours that routing alone will not fix. The gains vary by fleet, which is why a measured pilot beats any general claim.
Common questions
How much fuel can route optimization save?
There is no standard figure, because savings depend on current routing quality, stop density, traffic and time windows. Use a pilot on a few vehicles and compare against similar ones left unchanged. Run the calculation at that measured figure and at half of it to see the range.
Does the estimate include electric vehicles?
No. The calculation covers diesel and gasoline. Electric fleets need energy use per kilometre, electricity price and the emission factor of the grid, so the structure is similar but the inputs differ.
Why is the CO2 factor different for diesel and gasoline?
Diesel contains more carbon per litre than gasoline, so burning a litre of diesel releases more CO2. The calculator uses approximately 2.68 kg per litre for diesel and 2.31 kg for gasoline, covering tailpipe emissions only.
Is software cost usually the deciding factor?
Rarely. Software cost per vehicle is usually small next to fuel spend, so the case depends on the savings assumption. Include onboarding, integration and driver training, because those one-time costs can matter more than the subscription.
Sources and further reading
- Corporate Value Chain (Scope 3) Standard (GHG Protocol)
- Transport Canada (Transport Canada)