As demand for dairy products continues to rise, the pressure to enhance supply chain efficiency has become paramount.

That’s why efficient route planning and optimization are critical for maintaining freshness and reducing operational costs. Milk’s perishable nature presents unique logistical challenges. Implementing advanced routing strategies can minimize travel time, fuel consumption and spoilage, ultimately improving profit margins.

Planning routes

Desley Haas, chief executive officer of MADCAP, a product of Contec Group International, said the specialized software platform built to manage the raw milk supply chain from farm to factory is trusted by six of the world’s largest dairy companies and cooperatives, including Nestlé, which uses the platform to power its global milk supply across 23 countries.

“Our system handles everything from milk pick-up, transport and testing, to payments and equity management,” she said. “One of our core strengths is real-time centralized data access, which enables dairy processors to collaborate seamlessly with farmers, haulers and plants while maintaining transparency and accuracy at every step.”

Jeremy Ridley, technical director for MADCAP, noted when it comes to planning routes for transporting raw milk, things like milking times at the farm, truck access, road conditions and weather all play a big role in making sure everything runs smoothly.

“Milk is perishable, so any delays can impact its quality, which is why getting the timing right is crucial,” he said. “We combine real-time forecasting with scheduling that adapts as things change. This means processors can predict how much milk is available and adjust routes automatically based on farm specifics, like preferred pickup times, and road suitability. It helps us keep things moving quickly, reduce downtime and ensure the milk gets where it needs to be in the best possible condition.”

Jon Baldi, senior vice president customer solutions for Lily Transportation, which delivers feed to livestock throughout the northeast, noted it’s critical to ensure on-time delivery, as many farms coordinate deliveries on a just-in-time basis for freshness and inventory control.

“Ensure dairy transport with real-time monitoring, and short transit times,” he said. “Optimize routes for traffic and geography, plan loads for efficiency while segregating products and comply with food safety regulations. Use technology for route adjustments, maintain clear communication with customers and suppliers, and have backup plans for emergencies.”

Jon King, co-founder of Milk Moovement, which offers real-time software that connects the disparate elements of the dairy supply chain, noted the company has spent the last three years hyper-focusing on the core data points that make up the transportation angle of the dairy supply chain.

“By automating all the processes around milk transportation and logistics, we can reduce human error, inefficiencies and paperwork,” he said, explaining the system provides transportation and quality monitoring, production tracking and producer payment services.

The milk truck driver logs the pickup on farm using a handheld unit or smartphone and logs the drop-off when the milk is delivered. Milk sample test results and all relevant information around each pickup are uploaded to the system and available for viewing by registered users on Milk Moovement’s desktop and mobile dashboards.

“Right now, our optimization is hitting around 3.5% reduction on transportation costs and there’s still a lot more to go,” King said.

Milk Moovement software is used at a farm, with an iPad tracking production and quality data. (Photo: CNW Group/Milk Moovement)

Tech talk

Technology has revolutionized dairy transport. While GPS tracking has been around for decades, what’s changed is how accessible and affordable it’s become for processors to track trucks in real time, helping them stay ahead of delays and route changes.

“The real game-changer is IoT-powered GPS,” Ridley said. “It’s no longer just about tracking locations, it’s about monitoring critical factors like milk temperature and levels during transit. If there’s a leak or temperature deviation, the system sends instant alerts, helping processors minimize product loss, which is especially important in regions where milk theft and spoilage can be significant issues.”

Route optimization has also made a major impact. With tools like MADCAP, processors can automatically plan the most efficient routes, taking into account farm access, milking times and traffic. One of MADCAP’s clients reduced fuel costs by 10% and saved on driver hours using its scheduling module.

“Haulers benefit, too, as the system ensures trucks are used efficiently throughout the day, reducing downtime, fuel consumption and carbon emissions,” Ridley said.

But technology alone doesn’t drive efficiency. The key is having systems that connect and integrate all this data into a single, reliable source. That’s what enables better decision-making and helps streamline the entire supply chain.

Hunter Morgan, regional director of operations for Transervice, which provides transportation solutions for The Kroger Co., one of the largest grocers in the US, noted the two partner to utilize Orbcomm for GPS and reefer temperature tracking.

“Leveraging this technology allows the supply chain to become more effective in managing the cold chain process from the time dairy is loaded on a trailer to the time it is placed in a cooler at a store,” he said. “Temperature tracking technology also helps prevent loss while ensuring we keep the integrity of our products.”

Lily has been able to ensure that the best routing and timing is used to satisfy fleet utilization and customer needs by using dynamic route adjustments based on live data, enhancing delivery reliability.

“This results in lower operational costs and less product waste,” Baldi said. “The integration of such technologies, such as GPS tracking and route optimization software, has made dairy feed logistics more efficient and sustainable.”

Lily utilizes an automated workflow system to reduce the need for drivers to always have to return to their home location to be assigned work. This has been able to impact efficiency and route miles reduction in specific circumstances.

“We have adopted several innovative practices for route efficiency and cost reduction, including the use of cloud-based route optimization solutions, which consider various feed delivery planning strategies,” Baldi said. “Additionally, the implementation of precision agriculture technology aids in better demand forecasting, reducing unnecessary trips. Real-time data analytics from IoT devices in transport vehicles help in dynamic route adjustments, avoiding delays and optimizing fuel use.”

Overcoming challenges

Dairy processors face numerous issues in route optimization, particularly concerning seasonal demand fluctuations and varying product shelf life.

“During peak production periods, the sheer volume of milk can strain fleets, causing bottlenecks and delays,” Ridley said. “In slower seasons, trucks are often underutilized, leading to inefficiencies and higher costs. One way processors address this is through commingling — combining milk from different producers or allowing haulers to combine milk destined for different processors on the same truck. This approach helps maximize fleet utilization and reduce transport costs, especially in regions with many small farms.”

Shelf life adds another layer of complexity to route optimization. Freshness is critical, and delays can jeopardize milk quality.

“That’s where tools like MADCAP’s Hauler Mobile come into play,” Haas said. “Working in tandem with the platform’s auto-scheduler, Hauler Mobile provides real-time, dynamic route updates to haulers. This means haulers can quickly adjust schedules based on real-time load forecasts, traffic conditions or unexpected disruptions. It reduces time spent on planning for processors and offers haulers the flexibility to adapt to challenges — ensuring milk gets where it needs to be on time and in optimal condition.”

The road ahead

Keeping dairy transportation compliant while optimizing routes is a real balancing act. What helps with this are tools like GIS, which tracks road classifications, weight limits and bridge clearances. This ensures the routes are planned within regulations and optimized for efficiency.

“MADCAP integrates this data seamlessly, making it easy to stick to the rules while optimizing for time and cost,” Ridley said. “We also have to consider hours of service regulations, which can limit how many hours a driver is allowed to be on the road. We’ve worked with clients who’ve had to deal with this issue, and having a scheduler that automatically adjusts to stay within those hours makes a difference. The real-time adjustments that MADCAP provides allow for flexibility without risking non-compliance.”

Looking ahead, industry insiders predict data is going to stay at the core of route planning.

“The key is having real-time, accurate primary data from all parts of the supply chain, whether that’s trucks, farms or processing plants, at your fingertips,” Haas said. “To make the most of this, companies need to have their systems working together. If everything’s siloed, it’s going to slow things down when decisions need to be made fast. The smoother the data flows, the better and quicker the routes can be planned.”

Baldi suggests future trends in dairy transportation route planning include the integration of AI for predictive analytics and real-time route adjustments, and the use of autonomous vehicles for more precise and efficient delivery schedules. Therefore, companies should invest in scalable technology solutions that can adapt to these advancements, focusing on data analytics for better decision-making.