Last-mile costs rise 12% for a second year

CHICAGO — Last year, FarEye reported a 12% increase in last-mile delivery costs. This year, the company has released new research showing that median costs have again risen by 12% in 2026, mirroring the 12% increase from the previous year. Sixty percent of operators saw increases exceeding 10%, while one in five operators experienced over 20% growth.

Eighty-eight percent of respondents reported delivery costs growing at the same rate as, or faster than, revenue. FarEye CEO Kushal Nahata presented these findings at the Last Mile Leaders America event in Chicago. He noted that while he initially suspected this increase might be an anomaly, it has persisted into the second year, suggesting that higher delivery costs have become the new norm.

The survey gathered data from over 3,000 U.S. delivery operators and identified fuel, driver cost, and vehicle operating cost as the top three cost pressures, with inefficient routing also contributing significantly. These ongoing cost increases are placing pressure on businesses, with 45% of operators prioritizing reducing delivery costs as an investment.

Reliability and speed are the primary factors consumers value in their delivery experience, with 55.7% of operators considering predictable delivery and first-attempt success most important. Companies with annual revenues above $1 billion saw the highest median cost increase at 13.8%. Operators who prioritize fastest delivery experienced a 76% on-time performance but a 24% cost increase, while those focusing on predictable delivery achieved an 88.4% on-time performance and a 10% cost increase.

Visibility in the delivery process, indicated by WISMO (Where Is My Order) rates above 30%, resulted in a 17.2% cost increase and an 81.4% on-time performance rate. Operators with WISMO rates of 5% or less reported a 7.3% cost increase and an 86.5% on-time performance rate. The survey also found that 66% of operators are now implementing or operating AI, compared to 46% in 2025, with leading use cases including ETA prediction, demand forecasting, and customer support. However, real-time dynamic routing, which could help manage costs, ranks last in adoption at 21%.