Last-mile costs rise 12% for a second year

Last-mile delivery costs for U.S. operators have increased by 12% for the second consecutive year, according to a new study by FarEye. The median cost rise is the same as the 12% increase seen last year. Six out of 10 operators reported increases above 10%, while one in five operators saw increases above 20%. Ninety-eight percent of operators believe delivery costs are growing as fast as or faster than revenue. Only one in eight operators is creating operating leverage.

FarEye CEO Kushal Nahata presented these findings at the Last Mile Leaders America event in Chicago. He noted that the survey gathered data from over 3,000 delivery operators in the U.S. during the first half of 2026. Fuel costs, driver availability, and vehicle operating costs were identified as the top three cost pressures, with 70%, 51%, and 40% of operators citing them, respectively.

Inefficient routing was found to be a major contributing factor to cost increases, with 21% of operators placing it among their top three concerns. Failed deliveries and returns followed at 18%. Nahata highlighted that the 12% increase is a combination of the 6% rise in public rates by carriers like FedEx and UPS, and the 6% increase due to operational inefficiencies.

Reducing delivery costs was identified as the top investment priority for 45% of operators, surpassing other priorities. Companies with a revenue of over $1 billion saw the highest median cost increase of 13.8%. Fast delivery and guaranteed first-attempt delivery were cited by 55.7% of operators as the most important factors for maintaining the delivery promise.

Nahata emphasized that the focus on speed and certainty has shifted among consumers, with 55.7% of operators stating that these factors matter most. Operators prioritizing maximum speed experienced a 76% on-time performance but a 24% cost increase. In contrast, operators focusing on predictable delivery had an 88.4% on-time performance with a 10% cost increase.