- What is the Capacitated Vehicle Routing Problem (CVRP) in Logistics?
- How does CVRP Differ from the Standard Vehicle Routing Problem (VRP)?
- Why is Solving the CVRP so Important for Modern Supply Chains?
- What are the Main Challenges Involved?
- How do Businesses Currently Solve the CVRP?
- How is Technology Making CVRP Easier to Solve?
- How does Shiprocket Cargo Help Businesses Overcome Route and Capacity Challenges?
- Conclusion
Shipment companies deliver a million parcels every day across India. For local businesses, the challenge is not just selling online, but also ensuring that parcels reach customers on time without cutting into profits.
Their biggest hurdle is deciding on efficient routes to deliver goods within a specified time and budget. If vehicles travel longer distances than needed or carry half-empty loads, costs rise and deliveries get delayed. This is exactly what the Capacitated Vehicle Routing Problem (CVRP) solves: finding the optimal routes that maintain vehicle capacity, minimise distance, and meet delivery demand.
For sellers, this can mean fewer late deliveries, lower shipping costs, and happier customers who return to place repeat orders.
This blog will break down CVRP in simple terms, explain the challenges behind it, and show how technology used by modern logistics platforms can help smaller sellers compete with bigger brands.
What is the Capacitated Vehicle Routing Problem (CVRP) in Logistics?
In logistics, delivery starts from a central hub where vehicles load up and return after completing their routes. CVRP comes into play when businesses need to decide:
- Which stops should each vehicle cover
- How much load each vehicle can carry without crossing its weight limit
- How to finish all deliveries using the fewest kilometres and the lowest fuel
For example, imagine you’re a seller sending out 200 orders in a day. If one van is overloaded while another travels half-empty, you waste time, fuel, and money. CVRP ensures that both vans are fully utilised, reach the correct pin codes on time, and avoid unnecessary detours.
By solving this, businesses achieve timely deliveries, reduce shipping costs, and make better use of their fleets.
How does CVRP Differ from the Standard Vehicle Routing Problem (VRP)?
Let’s understand how is CVRP different from the standard vehicle routing problem:
| Factor | CVRP | VRP |
| Definition | A category of VRP that factors in smart route planning and vehicle load capacity. | A challenge that focuses on determining an efficient route for vehicles that deliver to several locations. |
| Consideration | Considers distance, travel cost, and vehicle capacity | Only considers distance and travel cost. |
| Complexity | Complex as it balances route optimisation and load distribution | Less complex, as the load isn’t considered |
| Goal | Aims to reduce distance and cost without overloading the vehicles | Aims to minimise delivery cost and distance |
| Use Case | Ideal for bulk deliveries with pre-determined load capacity | Suitable for small delivery quantities where vehicle capacity isn’t considered |
From the table above, it becomes clear that CVRP is a part of the standard vehicle routing problem and is more complex in nature. While the former considers vehicle load capacity, VRP focuses solely on reducing delivery route costs and travel distance.
Why is Solving the CVRP so Important for Modern Supply Chains?
CVRP is a centralised delivery problem for several industries, including eCommerce, pharmaceutical, industrial supply, and retail. Thus, solving it is imperative to:
- Reduce Transportation Costs: Optimised routes cut down fuel usage, vehicle wear, and maintenance expenses.
- Improve Customer Satisfaction: On-time deliveries strengthen buyer trust and reduce complaints or returns.
- Maximise Resource Utilisation: Routes are planned so drivers cover more stops in fewer trips, reducing wasted kilometres.
- Increase Operational Efficiency: Reduce delivery time and idle hours, along with improving driver productivity.
- Adhere to Safety Laws: Balanced loads and efficient routing prevent driver fatigue and support safer journeys.
What are the Main Challenges Involved?
Although solving CVRP is crucial for modern logistics, it comes with a unique set of challenges:
- Computational Complexity: The number of routes increases with growing orders and delivery points. That’s when it becomes manually challenging to plan and overcome the problem.
- Different Delivery Requirements: Parcels vary in type and size, making it challenging for vehicles to balance demand and load capacity.
- Vehicle Capacity Constraints: Each vehicle has weight or volume limits. Overloading increases costs and reduces efficiency, so routes must respect these limits.
- Strict Delivery Deadlines: Most eCommerce and FMCG companies work under strict timelines. Therefore, it becomes tough to plan routes that cater to both time and capacity.
- Changing Road and Weather Conditions: Unforeseen climatic and traffic situations can delay your deliveries.
How do Businesses Currently Solve the CVRP?
Implementing the following steps can help address the CVRP challenges effectively:
- Define the problem: Outline the number of parcels, vehicle capacity, and travel time. It is also essential to calculate the distance between central depots and clients to figure out the most effective route.
- Choose a method: Two of the commonly chosen methods are:
- Heuristic: A problem-specific approach that finds quick solutions to handle complex issues. For example, assign deliveries according to the nearest location for shorter travel distance.
- Metaheuristic: Advanced solutions to find a vast solution space and target complex delivery networks. For example, Genetic algorithms improve routes by replicating the process of natural selection.
- Implement the solution: Apply the chosen method using appropriate tools or software to create efficient delivery routes.
- Test and analyse: Start with a limited dataset to verify accuracy, identify bottlenecks, and refine the routes before full-scale deployment.
How is Technology Making CVRP Easier to Solve?
With the global logistics market expected to reach $18.69 billion by 2026, there’s a rising need for cost-efficient operations. The struggle still lies in understanding which method to choose and which vehicle to assign to it. Here’s how AI is shaping modern logistics and improving a company’s operational efficiency:
- Automated Route Optimisation: Implements a complex algorithm to figure out the best delivery routes by considering distance, delivery timeframes, vehicle capacity, and real-time traffic.
- Dynamic Rerouting: Routes can adjust automatically in response to changes in traffic, weather, or last-minute orders, thereby reducing delays.
- Advanced Algorithms: Machine learning and data analysis enable the prediction of patterns from past deliveries, thereby improving future route planning.
- Real-Time Data Integration: GPS and live data integration enable businesses to monitor deliveries and respond promptly to any issues that arise.
How does Shiprocket Cargo Help Businesses Overcome Route and Capacity Challenges?
With the right technology in place, you can overcome the struggles of route planning and vehicle load capacity. However, it is not up to you; rather, it is in the hands of a logistics partner to overcome the CVRP challenges.
Shiprocket Cargo is a B2B company that promises bulk shipping services and timely delivery. Our tech-enabled shipping solution is designed to meet all your cargo needs and accelerate your business. We implement advanced routing algorithms to select the most efficient delivery routes and minimise delays.
Our delivery executives also factor in unpredictable issues, such as traffic and weather, as well as last-minute order modifications, to minimise downtime.
Conclusion
The capacitated vehicle routing problem has been a longstanding challenge in logistics, severely impacting cost and delivery timelines. By leveraging AI-driven route planning and smart logistics solutions, businesses can optimise vehicle capacity, cut fuel costs, and ensure on-time deliveries.
For sellers and growing businesses, adopting these solutions isn’t just about efficiency; it’s about building trust with customers through reliable service. Partnering with a tech-enabled logistics provider like Shiprocket Cargo can help you achieve these goals, turning smarter delivery planning into a competitive advantage and long-term business growth.
AI uses different algorithms to analyse a real-time dataset and determine cost-efficient routes without overloading vehicle capacity.
FMCG products have a short shelf life, so slow or inefficient deliveries risk spoilage and customer dissatisfaction. Optimising routes ensures freshness, timely delivery, and consistent repeat orders.
An ineffective CVRP results in slow or costly deliveries, directly impacting the customer experience and potentially reducing sales or leading to lost brand loyalty.
Yes, reoptimising regularly accounts for new orders, traffic changes, and vehicle availability, helping sellers maintain efficiency, reduce fuel costs, and keep deliveries on time.
A tech-enabled logistics partner utilises AI-driven route planning, tracks deliveries in real-time, and manages vehicle load limits, enabling sellers to scale their operations while maintaining efficiency.
