Route optimization – milk run method

Optimizing transport routes has become a constant priority in logistics, especially where cost reduction, operational efficiency, and emissions control matter. Logistics managers aim to combine fast pick-ups, low fuel consumption, and reliable customer service. A modern method that meets all these needs is the milk run, increasingly adopted by companies in manufacturing, distribution, and third-party logistics (3PL).

Advanced software solutions enable automatic planning and management of routes, precisely adapting the milk run methodology. In this article, you’ll discover how the system works, what benefits it brings, and the recommended steps for effective implementation.

Definition and Origin of the Milk Run Method

The milk run method involves using the same truck to collect or deliver goods from or to multiple suppliers or recipients along a predefined circular route. The name comes from the traditional practice of dairy farmers, who transported milk to distribution points by visiting several farms in sequence.

In practice, milk run optimizes transportation in supply chains with relatively stable volumes or nearby suppliers. Instead of sending a separate vehicle for each shipment, you organize a circuit where a single truck picks up goods one after another.

For example, an automotive manufacturer can transport parts from three local suppliers to its factory on the same route with just one truck. This reduces transportation costs and eliminates empty runs, making it especially efficient when shipment volumes are relatively predictable.

Comparison with Direct Delivery

The direct delivery model means that each shipper sends goods separately to the customer, without consolidating shipments. The main difference between the two approaches lies both in cost and in how operations are organized.

Advantages of milk run compared to direct delivery:

• Reduced transportation costs: By managing transport more efficiently, multiple pick-ups or deliveries are consolidated into a single route, lowering the number of vehicles, kilometers traveled, and logistical resources involved.
• Lower fuel consumption and CO₂ emissions: Planning a circular route shortens distances and maximizes vehicle use, supporting initiatives to reduce environmental impact.
• Regularity and predictability: The method ensures stable frequency and a clear supply schedule, making it suitable for continuous production processes or rhythmic deliveries.
• Adaptability to fluctuations: Routes can be easily adjusted based on volumes and supplier availability, offering operational flexibility.

There are still situations where direct delivery remains useful—for example, urgent requests or long-distance transport, where consolidation brings no real benefit. Otherwise, companies handling consistent volumes over short or medium distances experience the milk run’s advantages in lower costs and easier-to-manage processes.

Operational Benefits of the Milk Run Method

Choosing the milk run approach brings both logical and practical advantages, whether in companies with their own fleet or in services provided by 3PL operators. The most important benefits include:

• Reduced transportation and maintenance costs – Direct savings on fuel, as well as lower vehicle wear and reduced driver workload.
• Lower traffic and emissions – By eliminating redundant trips, the method helps reduce urban congestion and supports environmental protection.
• Efficient inventory management – Production lines or retail outlets are supplied with exactly the amount of goods needed, at clear intervals.
• Improved route control – Greater transparency in monitoring allows quick intervention to adjust routes, avoiding delays or uneven vehicle loading.

For example, an FMCG distributor can group deliveries to stores within a metropolitan area on the same route, managing resources and shipments more efficiently.

Automating Milk Run Routes with xTrack TMS

Transport management applications such as TMS – Transport Management System – greatly simplify the organization of milk run circuits by integrating the following functionalities:

• Automatic routing based on data analysis of volumes, recipients, and available time slots – the system calculates the optimal route for minimal fuel consumption and travel time.
• Automatic vehicle selection and stop sequencing, taking into account cargo restrictions, schedules, or vehicle capacity.
• Real-time monitoring and rapid route adjustments. The xTrack TMS platform provides clear reports on the status of each trip and highlights areas where improvements can be made.
• Integration with warehouse management systems, ERP, or other logistics applications. This covers the entire flow from planning to execution and reporting, helping optimize resources and strengthen collaboration with external partners.

Recommended Steps for Implementing Milk Run with Technological Support

Successfully adopting the milk run method involves several well-defined stages:

• Analyze relevant data: Identify supplier locations, shipment volumes, pick-up frequency, and any restrictions related to goods or schedules. Accurate information is the foundation of an efficient route. A logistics operator can use digital maps and historical data from the TMS platform for a complete overview.
• Configure routes in the software platform: With route optimization software, set up routes with the exact order of stops, vehicle types, and cargo-specific restrictions. In xTrack TMS, you can simulate alternative routes and select the optimal option based on costs and delivery times.
• Monitor and continuously adjust: Use real-time reports provided by the TMS to track route performance. Adjust parameters when demand, traffic, or weather conditions change. Many platforms offer automatic alerts for significant deviations from the plan.
• Collaborate transparently with suppliers and partners: Efficient communication and information sharing among all parties involved (suppliers, distributors, customers) help quickly resolve potential bottlenecks. Informing partners about delays or recalculating routes promptly reduces the risk of disruptions in the logistics chain.

Optimizing transport through the milk run method, supported by an advanced TMS such as xTrack, can deliver visible improvements in logistics management.

Adapt the implementation to the specifics of your business and continuously monitor performance indicators. Invest in training for staff operating the software, and when needed, seek specialized consultancy for the initial stages.