It's only one segment of a multi-leg journey, but the last mile accounts for more than half the total cost of shipment. Gautam Kumar, chief operating officer of FarEye, explains why.

The last mile is just one of several legs involved in the journey of product from seller to end consumer, but as much as 54% of the total delivery cost comes from that segment, says Kumar.

The high cost has a lot to do with customer expectations for rapid, timely and accurate delivery. The consumer experience isn’t even accounted for when calculating hard costs, but it can be a major factor in ensuring customer satisfaction and loyalty. After all, when a delivery fails during the last mile, it’s typically the brand, not the carrier or warehouse, that gets blamed.

Last-mile management isn’t going to get any easier, as service expectations continue to ramp up. Artificial intelligence is poised to play an important role in ensuring last-mile excellence, Kumar says, with its ability to digest and process huge amounts of data. That can mean automating the arduous task of address correction, or coordinating the specific time of a delivery according to individual customer requirements. AI can also be of help in dispatching, slot-picking and keeping the customer apprised of order status and expected delivery time.