A last mile conference hosted by FarEye revealed a growing appetite for AI and a waning one for carbon reduction, reports Peter MacLeod.
I had the pleasure of attending the Last Mile Leaders European Conference in Amsterdam in May, an event hosted and expertly delivered by FarEye. Bringing together retailers, carriers and tech providers from across Europe, the conference provided a clear and, at times, candid view of where the last mile is headed and how sharply the road ahead is turning.
The headline takeaway came as no surprise, namely that cost is king. But closely following behind are customer expectations and a cautious but accelerating interest in AI. Somewhat surprisingly was the finding that whereas sustainability was once front of mind, it’s now viewed as more often a bonus than a baseline. As he unveiled the “Eye on the Last Mile” report during his opening keynote, Kushal Nahata, FarEye’s CEO and Co-Founder, said the European delivery ecosystem is at a decisive inflection point.
Shifting Priorities
Nahata (pictured, below) laid out the results of FarEye’s annual report, which surveyed logistics leaders across the continent. The data reveals that 98% of logistics leaders rank cost as their number one challenge heading into 2025 and that the top three concerns – rising costs, elevated customer expectations, and the race to invest in AI-enabled solutions – are reshaping strategies and budgets alike.
Perhaps unsurprisingly, Switzerland leads in average last mile cost increases (38%), followed by France (21.5%) and the UK (17.8%). More stable cost environments such as the Netherlands and Greece offer valuable lessons in efficiency. But across the board, labour remains the primary cost driver, far outpacing technology or fuel.
Despite all the talk of innovation, many firms still rely on legacy systems and manual operations, particularly in Western Europe.
What’s clear is that cost is not just a financial concern but a strategic lens through which every delivery decision is now made. As Nahata put it: “We need to stop treating the last mile as the last thought.”
Smarter Strategies
The good news is that the industry isn’t standing still. According to the keynote, firms are turning to AI agents and advanced routing systems to claw back profitability and operational control. FarEye’s own data shows that AI-driven systems can reduce costs by up to 30% in dense urban areas, while hybrid fleet models and dynamic routing can offer savings of between 12 and 18%.
We’re also seeing a growing reliance on lockers and pickup points as businesses look to balance consumer convenience with cost-efficiency. This was also reflected in the levels of audience interaction about this topic. That said, the promise of lockers remains contingent on scale. As explored in the first of several panel sessions during the day, “Cracking the Profitability Code,” pilot programmes won’t justify infrastructure investment unless adoption accelerates quickly and broadly.
Another encouraging shift is the rise of premium delivery as a viable revenue stream. FarEye’s research shows 54% of customers are willing to pay extra for faster delivery, suggesting that not every consumer is cost averse as long as the value is clearly communicated.
Delivery Experience
The “From Checkout to Doorstep” panel showed that the delivery experience starts earlier than ever, often from the product page itself. High delivery fees remain the biggest cause of cart abandonment, and accurate ETAs, real-time pricing, and flexible slot selection have become hygiene factors rather than differentiators.
Consumer expectations are evolving rapidly. While 51% of customers still prefer standard three- to seven-day delivery, a significant 34% opt for next-day, and 8% choose same-day delivery. Out-of-home options, including lockers and parcel shops, are growing in popularity, reflecting a shift in urban consumer behaviour.
Cost is so much more of a priority in many of today’s boardrooms than carbon reduction, yet customers are becoming less forgiving of poor experiences, especially in the post-purchase phase. The roundtable on “Crafting Seamless Post-Purchase Journeys” highlighted that 65% of logistics leaders identify data gaps as a barrier to improving the post-purchase experience, with metrics like OTIF, NPS, and first-attempt delivery now mission-critical.
AI Escapes the Hype
Artificial Intelligence was perhaps the most talked-about and polarising topic of the day. From panel discussions to informal conversations, it was clear that AI is finally moving from hype to hands-on in the last mile.
The deep dive session “AI in the Last Mile: From Hype to Hands-On Impact”, hosted by me with experts from FarEye, Accenture and Microsoft, provided real-world examples of carriers using AI to automate over 70% of customer service interactions, with tools like Generative AI for comms, agentic AI for route re-planning, and digital twins for forecasting now part of serious pilot schemes.
FarEye’s study revealed that nearly half of all businesses are prioritising AI investments, and that 80% of delivery-related queries could now be handled by AI, leading to a potential 40% reduction in support costs. As one speaker put it: “AI won’t replace logistics professionals, but professionals using AI will replace those who don’t.”
Sustainability: Not Urgent
One of the more sobering findings of the day was that only 16.7% of businesses currently offer green delivery slots. That means that despite increasing consumer and regulatory pressure, a whopping 83.3% of firms still don’t offer a sustainable delivery option at checkout.
The deep-dive session on circular supply chains reminded us that sustainability needn’t be sidelined if it is integrated intelligently. Featuring examples from Philips and Danish delivery company DANX Carousel, the session highlighted how reverse logistics, repair flows, and re-use models can turn the last mile into a circular engine, rather than a linear liability.
In Western Europe, precision and sustainability are beginning to take precedence over speed, but cultural and operational differences mean Eastern Europe still favours rapid delivery over greener models.
Every Mile Is Now the Last Mile
The conference’s underlying thesis – and one of its most powerful insights – is that the last mile is no longer just the final leg of a journey, but the focal point of the entire logistics experience. From front-end checkout triggers to post-purchase sentiment, from AI-enhanced routing to circular supply loops, every part of the value chain is being pulled into the last mile orbit. And while cost pressures continue to dominate, the most forward-looking companies are leveraging this constraint as a catalyst for innovation.
Whether it’s through modular delivery networks, data-enabled decisioning, or customer-first design, I came away from this enlightening conference believing that the next era of the last mile will be defined by three key capabilities: flexibility, intelligence and integration. And thanks to platforms like FarEye’s, we not only have a clear view of what that road looks like, we also know the tools and strategies we need to deploy to successfully negotiate it.