Cost Trumps Carbon in Shift Toward AI
19th May 2025
At the Last Mile Leaders Europe event last week FarEye revealed its latest industry, containing some very interesting findings, including that 98% of respondents cited rising delivery costs as their top operational challenge, and that AI and automation have become the most prioritised area for investment (43%), overtaking sustainability (20%).
Eye on the Last Mile 4.0, the fourth edition of FarEye’s industry report, was unveiled live at the recent Last Mile Leaders Europe 2025 event in Amsterdam, where Europe’s last-mile logistics leaders gathered for a pivotal moment in the evolution of delivery. The sharp shift in investment priorities was at the heart of the conversation. According to the Eye on the Last Mile 4.0 report, logistics executives across Europe are now investing more in AI than in sustainability, a sign of the intense cost and operational pressure reshaping the sector.
Hosted by FarEye, Last Mile Leaders Europe 2025 convened over 80 global voices from logistics, retail, and supply chain, including leaders from DHL, Dyson, DPD, IKEA, Beko, JB Hi-Fi, Electrolux, Heineken, Philips, PostNord, Slovenia Post, Wayfair, and more. Together, they examined the forces shaping the future of delivery, from AI adoption and rising expectations to infrastructure and sustainability gaps. The leaders closed with a call for collaboration across the ecosystem, from building shared locker networks to co-developing AI use cases and designing joint sustainability roadmaps.
“From AI-led orchestration to predictive fleet planning, innovation is moving from the sidelines to the centre,” said Kushal Nahata, CEO & Co-founder, FarEye. “What used to be aspirational – like sustainable delivery or hyper-personalised logistics – is now being balanced against hard costs, shrinking margins, and rising customer demands. Europe’s last mile is entering a decisive phase.”
Last Mile at a Crossroads
The event’s opening keynote, delivered by Nahata, framed Europe’s logistics landscape as being at a critical inflection point – caught between cost efficiency, customer delight, and sustainability. Drawing from the Eye on the Last Mile 4.0 report and FarEye’s operational data, the keynote highlighted:
• Cost is king: 98% of leaders ranked delivery cost as the top concern shaping 2025 decisions
• AI is no longer experimental: Almost 1 in 2 businesses are now prioritising AI, not just for orchestration and routing, but also for customer support and exception management, achieving up to 30% cost savings in dense delivery zones.
• Consumers want more than speed: 54% of shoppers are willing to pay for faster deliveries, but also demand specific and reliable delivery promises, not just faster ones.
• Support costs are dropping with AI: AI-driven customer service agents can resolve up to 80% of delivery-related queries, cutting support costs by 40%.
• Sustainability lags adoption: Although 83% of respondents believe in offering green delivery, only 16.7% do, thus revealing a wide execution gap.
• Regional cost spikes: Switzerland and the UK reported the highest cost increases (up to 38%), while countries like the Netherlands and Greece showed more cost stability.
Spotlight on Logistics Startups
Europe is now home to more than 200 last-mile logistics startups tackling everything from urban congestion to carbon emissions using AI, automation, and electrified delivery infrastructure. The European startup ecosystem has become a key innovation driver, attracting over $4.5 billion in funding in just the first half of 2024. At the Last Mile Nexus, three high-impact startups were shortlisted and took the stage to pitch live to a judging panel of industry experts.
Ultimately, ClearQuote was named the winner (see picture, above) for its AI-powered platform that transforms fleet damage assessment and maintenance, helping enterprises cut downtime and cost. Its co-founder, Venkat Sreeram, collected a cheque to go towards the growth and rollout of its AI-powered vehicle damage reporting tool.
Deep Dives and Real Conversations
Breakout panels explored the shift from AI hype to execution, strategies to scale locker networks across Europe, and post-purchase innovations that drive loyalty. New this year was The Last Mile Suite, a curated connection space where attendees met over selected drinks and shared conversations designed to spark collaboration. Europe is clearly investing in the future. But the tension between efficiency, customer delight, and sustainability remains unresolved. As infrastructure lags and AI accelerates, forums like Last Mile Leaders offer not just insight but direction. What began in Asia and Africa has now landed in Europe with scale. Last Mile Leaders is no longer a series of events, it has become a growing platform where research, startups, and strategy converge to define the next era of logistics.
Logistics Business was proud to be the exclusive media partner for Last Mile Leaders Europe 2025, with editor Peter MacLeod moderating a panel alongside experts from Accenture, Microsoft and FarEye on the part AI plays – and will play – in the last mile.
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