Parcel Delivery Company Tyltgo Reaches Profitability With Intelligent Route Optimization

Tyltgo is a fast-growing last-mile courier company making over 20,000 deliveries/month across 4 markets in Canada – Toronto, Vancouver, Ottawa, and Waterloo, Ontario.

The company offers affordable, customer-centric same-day and next-day shipping to small to medium businesses in Canada, and was founded in 2018 with the mission to serve local economies.

“We believe local merchants and the courier partners that serve them are the backbone of our community. We want to help them,” explained Tyltgo’s founder and CEO, Aaron Paul.  

The company is backed by YCombinator, venture capitalists, and serial entrepreneurs, and recently became profitable thanks to an investment in intelligent route optimization.

Free VRP solver vs. Routific

As the company expands, managing the company’s margins remains extremely important.

For years, TyltGo relied on an open-source vehicle routing problem solver, because it was free, thinking that it would save the company money. But free solvers don't create efficient, cost-saving routes.

Tyltgo’s leadership realized that creating efficiently optimized routes was the single most impactful activity, which could make or break their margins.

So they tried Routific's Route Optimization API.

“When we did a comparison with Routific, we saw a difference of 20-30% in route efficiency gains, which resulted in 5% improvement in gross margins,” Aaron said.

A big problem with the open-source solvers (and other competitive solvers) is that they optimize routes mathematically without any concern for the happiness and efficiency of drivers.

Routes often overlap, zig-zag, and send many drivers to far-flung regions. Drivers hated the routes they were given. Routific avoids spaghetti routes and creates tightly packed clusters so drivers are happy and efficient as can be.

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The ROI of Routific

"Switching to Routific was the single quickest way to improve my business' margins. Integration took only 2 days. There's nothing else I can do for my business that has such a significant impact on my bottom line,” said Aaron.

At current volumes, Routific’s integration saves $3,000/month. These savings will only grow as the company grows. Relative to the price of Routific, TyltGo realized a 6x ROI immediately.

On top of that, TyltGo no longer needs to worry about maintaining their own routing stack anymore, freeing up engineering resources and mental overhead.

Since switching to Routific, TyltGo reached a major milestone of turning profitable.

Last-mile deliveries are growing

Global last-mile delivery is projected to grow at an annual CAGR of 7.6% from US $32 billion in 2020 to US $53 billion by 2027. 

There is a huge opportunity here, but there’s also a need to modernize the courier experience. Tyltgo is ready to do that with their commitment to affordable shipping and accountability to the end-customer.

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