Fall is in full swing, and for supply chains that means it will soon be time to test whether or not all those peak-shipping season preparations of the past few months were up to snuff.
This will be felt acutely in the final mile, as holiday orders make their way from distribution centers to doorsteps across the country. Last-mile delivery is often considered the most difficult part of the logistics journey, and it has been getting harder over the past decade thanks to accelerating e-commerce orders, labor challenges in both warehousing and transportation, and rising expectations for next-day and same-day delivery. Another factor is the high cost of last-mile delivery, which can account for more than 40% of total delivery costs, according to some industry estimates.
And it doesn’t end there.
Shippers and carriers are facing additional pressure this year, with many saying last-mile delivery costs are outpacing revenues—and that rising fuel and labor costs are at the heart of the problem. A recent survey of supply chain leaders by last-mile delivery platform FarEye, for instance, found that 70% of last-mile operators ranked fuel among their biggest cost pressures, with more than 50% citing labor issues. The results appear in the company’s “Eye on the Last Mile America 2026” report, which surveyed more than 500 delivery operators from across the country.
Compliance is another concern. I spoke to Gaurav Srivastava, co-founder and chief product and technology officer at FarEye, about the survey and the rising pressures shippers and carriers face as 2026 comes to close. He pointed to the May Supreme Court ruling stating that freight brokers can be held liable under varying state laws for accidents involving the federally licensed motor carriers they hire. The case, Montgomery v. Caribe Transport II LLC, affects shippers, too—especially those using unvetted carriers or substandard brokers to find better rates. Srivastava says the rule is creating an urgent need for compliant, certified, and insured drivers across the delivery chain—a factor that is also contributing to higher costs.
“Companies are now trying to find [better, vetted] drivers,” he explained, noting that in this case, the added costs are “for good reasons. But at the end of the day, it’s creating a lot of pressure for our customers.”
As a result, FarEye and others say they are seeing growing demand for tools that can help shippers and carriers get those costs under control. Chief among them are agentic AI (artificial intelligence) products that can address processes such as route planning, capacity optimization, and demand forecasting, according to Srivastava.
FarEye’s research shows that last-mile operators have greatly increased their use of AI over the past year, with more than 66% saying they were implementing or using AI products in 2026 compared with more than 46% in 2025. Organizations citing “extensive operational adoption” of AI rose to nearly 14% this year from 4% last year. Estimated time of arrival (ETA) prediction is the leading AI use case (39%), followed by demand forecasting (36%), customer support (31%), and real-time dynamic routing (21%), according to the research.
The tech firms say such tools are giving companies better decision-making control in their day-to-day operations. Srivastava explains that last-mile operators can’t control fuel prices or labor markets, but they can control how much fuel, labor, and capacity each delivery consumes, for example.
That makes a lot of sense—and, hopefully, will translate into savings for companies that have baked those solutions into their peak-season prep.
