Control, not cost: Why the next battle in last-mile delivery is about network visibility

The economics of last-mile delivery are becoming increasingly challenging for operators. Fuel remains expensive, labour shortages continue to affect availability of drivers, and customer expectations show little sign of easing. Yet new research suggests that simply spending more money is not the answer. Instead, the companies performing best appear to be those with tighter control over increasingly complex delivery networks.

According to the latest Eye on the Last Mile America 2026 research from FarEye, delivery operators face structural cost pressures that have become embedded within the sector rather than representing a temporary market fluctuation. The survey, based on more than 3,000 datapoints collected from delivery enterprises across the United States, indicates that 88 percent of operators are experiencing delivery costs rising at least as quickly as revenue growth. This finding points to a wider challenge. In many industries, growth in revenue can offset rising operating costs. However, when costs increase at the same pace as revenue, profitability becomes harder to maintain, placing significant pressure on operational efficiency.

The research identifies fuel as the leading operational concern, with 70 percent of delivery operators citing it as one of their three biggest cost pressures. Driver costs and availability follow at 51 percent, while vehicle operating expenses account for a further 40 percent of concern. These are largely factors beyond the direct control of most businesses. Global fuel markets, labour availability and wage inflation are influenced by broader economic conditions. As a result, delivery organisations are increasingly focusing their attention on the factors they can influence, including routing efficiency, network design, customer communication and carrier management. This shift reflects a broader transition occurring across logistics. Rather than seeking competitive advantage through fleet expansion alone, companies are looking more closely at how effectively their existing assets are utilised.

Network control creates a performance gap

One of the most striking findings of the report is the difference between organisations operating high-control and low-control delivery networks. High-control organisations reported on-time delivery performance of 95 percent, compared with only 65.5 percent among operators reporting lower network control. The same organisations also experienced significantly lower cost inflation, with a median increase of 8.3 percent compared with 14.5 percent for less controlled networks. What makes the finding particularly noteworthy is that these differences occurred despite broadly similar levels of investment.

The implication is that operational excellence may increasingly depend on orchestration rather than expenditure. In other words, the capability to coordinate carriers, integrate information flows, manage exceptions and maintain visibility across the network may have become a more important differentiator than simply increasing budgets. For supply chain professionals, this echoes a wider digital transformation trend. Visibility and control frequently deliver greater returns than infrastructure investment when systems become increasingly interconnected.

Last mile delivery (also called final mile delivery) is the final stage of the supply chain in which goods are transported from a local distribution hub, fulfilment centre, depot, or transportation node to their final destination, typically a customer’s home, business, retail outlet, or healthcare facility.

The rise of hybrid delivery networks

The study also indicates that delivery networks are becoming more fragmented. Fifty-seven percent of respondents reported using hybrid delivery models that combine internal fleets with outsourced partners. Moreover, almost half of those operating hybrid models intend to increase outsourcing further. Hybrid networks offer considerable advantages. Organisations gain flexibility, can rapidly scale capacity, and often achieve wider geographic coverage without substantial capital investment.

However, hybrid models create additional layers of complexity. The research identifies challenges including inconsistent carrier data, reduced visibility, difficulties in performance auditing, and uncertainty regarding accountability when deliveries fail. The question facing operators is therefore changing. Historically, organisations debated whether outsourcing delivery activities was beneficial. Increasingly, the more relevant question is whether companies can maintain operational control while outsourcing larger portions of their delivery capacity. This distinction may prove crucial as delivery ecosystems continue to expand.

Reliability may matter more than speed

A second significant finding challenges a long-standing assumption in logistics: faster delivery is not necessarily the most valued attribute. Just 11.4 percent of respondents identified maximum delivery speed as their highest priority. In contrast, 55.7 percent prioritised delivery predictability and successful first-attempt delivery.

The data further suggest that prioritising reliability may produce stronger operational results. Organisations focused primarily on speed reported 76 percent on-time performance alongside 24 percent median cost inflation. By comparison, operators focused on predictability reported higher on-time performance and substantially lower cost growth. This represents an important shift in customer expectations. For years, businesses competed to reduce delivery windows from days to hours. Increasingly, however, customers appear more concerned with accurate delivery promises than with rapid delivery. A package arriving exactly when promised is often more valuable than a package arriving quickly but unpredictably. This shift aligns closely with behavioural research showing that certainty strongly influences customer satisfaction.

The report also examines “Where Is My Order?” (WISMO) enquiries, which are commonly used as a measure of customer service demand. FarEye’s research suggests that WISMO represents something more significant than a customer support metric. Operators reporting WISMO rates below 5 percent experienced median cost inflation of 7.3 percent, while organisations with WISMO levels above 30 percent reported cost inflation reaching 17.2 percent. High WISMO rates may therefore signal underlying operational friction.

Missed deliveries, inaccurate estimated arrival times, re-delivery attempts, manual interventions and exception management can all generate customer enquiries. These same factors simultaneously increase operational costs. In other words, WISMO may function as an operational health indicator rather than simply a measure of customer curiosity. The findings also show a relationship between proactive customer notifications and improved delivery performance. Organisations that communicate delays before customers need to enquire generally reported higher on-time performance rates.

Artificial intelligence continues to attract substantial attention within logistics. The proportion of operators implementing or actively operating AI increased from 46.2 percent in 2025 to 66.3 percent in 2026. Extensive operational deployment also increased substantially. Despite this expansion, the report suggests that organisations remain cautious about handing decisions directly to AI systems. Trust in real-time autonomous decision-making remains relatively low, with most operators preferring AI to support decisions rather than make them independently. Current applications remain focused on practical use cases. Estimated time of arrival prediction leads adoption, followed by demand forecasting, customer support and dynamic routing. This reflects a broader trend across industry sectors. Organisations often adopt AI first in advisory roles before allowing greater operational autonomy. The challenge moving forward will be translating AI-generated insights into coordinated action across complex delivery networks.

Taken together, the findings suggest that last-mile delivery is entering a new phase. Cost pressures appear structural rather than temporary. Delivery networks are becoming more fragmented. Customer expectations increasingly emphasise reliability over speed. Artificial intelligence is becoming more widespread, but operational control remains firmly in human hands. Perhaps most importantly, the research points to a simple but powerful conclusion: organisations that maintain stronger control over complex delivery ecosystems appear better positioned to contain costs, improve reliability and deliver consistent customer experiences.