APAC Logistics Turns to AI as Delivery Costs Rise

Logistics operators across the Asia-Pacific region are approaching a critical turning point as delivery costs continue to rise, customer expectations evolve, and enterprises accelerate efforts to modernize fragmented last-mile operations.

Released during the Last Mile Leaders Asia 2026 Summit in Bangkok, FarEye’s Eye on the Last Mile 6.0: APAC Report 2026 reveals that the region’s logistics sector is moving beyond the traditional trade-off between speed, cost, and customer experience. Instead, companies are prioritizing reliable, transparent, and scalable delivery operations designed to meet growing consumer demands.

Supported by the Asian Supply Chain Logistics Alliance (ASCLA) and the Supply Chain Management Association of the Philippines (SCMAP), the report gathered insights from more than 500 logistics leaders and operators across 24 APAC economies.

The study found that average delivery costs across APAC increased by 18.9% year-on-year, with 75% of operators identifying inefficient routing as the industry’s biggest operational bottleneck. Other major challenges cited include driver shortages, limited delivery visibility, complex returns management, and manual carrier audits — all contributing to significant hidden margin leakage across logistics networks.

At the same time, consumer priorities are rapidly shifting. According to the report, customers now favor predictable delivery windows nearly two-to-one over faster shipping options, while 60% of operators said consumers are willing to pay a premium for guaranteed delivery reliability.

“Across APAC, the last mile is no longer being measured purely on speed or cost,” said Kushal Nahata, co-founder and CEO of FarEye. “Customer experience, operational efficiency, and delivery economics are becoming deeply interconnected. The organizations that will lead the next phase of logistics are those building orchestrated delivery networks capable of making smarter decisions in real time.”

The report also highlights APAC’s rapid adoption of artificial intelligence in logistics operations. An overwhelming 98.3% of logistics leaders expressed confidence in AI-driven decision-making, with companies increasingly deploying AI across routing, dispatching, ETA prediction, exception management, and carrier selection.

FarEye noted that logistics providers in APAC are now adopting AI technologies at a faster pace than their counterparts in North America and Europe.

As Southeast Asia’s logistics ecosystems become more interconnected, industry leaders are emphasizing the importance of stronger collaboration among carriers, retailers, fulfillment operators, and technology providers to support long-term industry growth.

“The future of logistics in Southeast Asia will depend heavily on how well ecosystems work together — from carriers and retailers to technology providers and fulfillment operators,” said Rob Locke, chief technology officer of GoGo Xpress. “Communities like Last Mile Leaders play an important role in bringing the industry together to solve shared operational challenges as delivery networks become more complex. The next phase of growth will be driven by connected operations, collaboration, and interoperable systems that can scale efficiently while continuing to meet rising customer expectations.”

Despite growing confidence in AI, FarEye said implementation challenges remain, particularly due to legacy infrastructure, poor data quality, and internal capability gaps. The report suggests that the industry’s biggest hurdle is no longer trust in AI, but the ability to execute and scale digital transformation effectively.

Organizations represented in the research initiative include Abenson, AC Logistics, GoGo Xpress, Hawk Logistics, QuadX, Fast Logistics, JB Hi-Fi, BJC Big C, Philippine Span Asia Carrier Corp., and CDO Foodsphere, among others.

As regional supply chains become increasingly complex, FarEye concluded that the next competitive advantage in APAC logistics will belong to companies capable of transforming fragmented delivery ecosystems into connected, intelligent, and highly predictable networks.