Costs up 11%, rates up 5%: FarEye’s Suryansh Jalan on the hidden “inefficiency tax” in Europe’s last mile [INTERVIEW]

FarEye is a last-mile delivery software company. It owns and runs Last Mile Leaders, a community event and thought leadership platform. The EMEA edition takes place on 13–15 October at the Mercure Amsterdam City Hotel, with two days of keynotes, panels and case studies.

The conference opened with a keynote by FarEye CEO Kushal Nahata, “The Fragmented Last Mile”, in which FarEye presented the EMEA edition of its Eye on the Last Mile report on what operators across the region are experiencing and what it means for delivery economics in 2027. The second day focuses on AI, from roadmaps to its impact on the P&L.

Below is our conversation with Suryansh Jalan.

What are the main objectives of this year’s Last Mile Leaders Europe event?

Suryansh Jalan: If you take a step back, the whole purpose of Last Mile Leaders was that the entire industry is moving through a rapid transformation with omnichannel. Business leaders, whether it’s a retailer or a carrier, are trying to work through these new challenges of the last mile and discover what best means. And we understood that no one business can solve this alone.

So we wanted to create a platform, or a vehicle, where business leaders and thought leaders can come together, share their experience with each other and together improve the last mile as an experience for all of us.

Today, last mile is nearly 40 to 50% of the cost, but it is the point of first experience for the customer. So it’s super critical for the revenue and growth of a business, but it is hitting the P&L as a cost centre. How do you solve these challenges? That’s why Last Mile Leaders was born.

This year, that challenge is even more magnified because of the number of disruptions that we’re seeing globally. It’s almost become the norm, in terms of the impact on inflation and the volatility in the supply chain. At the same time, the customer experience is not changing. The demands are not changing, they’re only increasing. And you have a new capability which is now really starting to impact the P&L: AI.

So with a lot of this volatility and unknowns, the focus for this year’s Last Mile Leaders is: how do you help leaders channel the power of AI and modern technology to better manage this volatility and cost inflation, while delivering the experience that consumers want?

What would you say makes this event different from other logistics and supply chain conferences?

Suryansh Jalan: I think two big things. I spoke to a lot of our guests who are coming for the second time – we are not an event organising company – and I asked them why they come again. They tell me two things.

First, there is no event which is so focused on the last mile. There are logistics events and supply chain events, but there’s a lot of conversation on warehousing, procurement and all the other areas of supply chain. A conversation that goes so deep – two and a half days just talking about last-mile customer expectations and cost in the last mile – is unparalleled. That is something a lot of people really appreciate.

The second big one is that there are no booths here, and there isn’t a crowd of vendors. It’s an exclusive, invite-only event – that’s why it’s called Last Mile Leaders. Each and every attendee is a decision maker in their organisation. So they have the opportunity to talk to other decision makers, to understand what they are doing and how it is impacting their supply chain.

We see most of the guests continuing that relationship outside the event as well. Many of them reach out to each other during the year to understand what challenges the others may be facing and what they can learn from them. It’s an evolving space. These are new problems, unknown problems, and nobody in their organisation has done this before either. So if they can rely and lean on each other, it makes their work much easier and better.

And the last one: because we are bringing selected, curated leaders who are actually delivering on what they’re saying, you’re not just learning from theory or concept. You’re seeing the people who are running that change successfully, sharing their experiences. So you get to know what the cutting-edge leaders are doing and you can adopt it right from Monday. It’s not something you need to study further before you start moving.

What are the key takeaways you would like attendees to leave with?

Suryansh Jalan: First, that the last mile is evolving into a critical boardroom conversation. It is not something that can be treated as a cost centre anymore. It’s something a CXO needs to leverage as a USP.

Second, these challenges are solvable, and they have been solved. What does the best look like, how do you benchmark yourself, and how do you get to what the best looks like? I think these are the two big ones that most guests leave with.

In your opinion, what is the biggest gap in the European last-mile logistics market that this event will cover?

Suryansh Jalan: We spoke a little bit about this in the keynote. I feel a perfect last mile is balancing the cost for your internal organisation while delivering on the expectations that the customer has. In today’s European landscape, cost inflation pressures consistently remain in double digits, supply chain volatility continues, crude prices are going up, insurance is going up. The question is how to deliver on customer experience expectations while handling this cost.

So let’s double-click on what this cost means. What we have seen is that the organisations that have been able to get the maximum control over the supply chain – and it’s not only about fuel costs, routing or exception management – are able to eliminate inefficiencies.

To put it in a very simple way: the cost inflation today is 11% in Europe, but the price that carriers on average are increasing is 5%. So the remaining 6% is the hidden cost coming from inefficiencies. It’s the inefficiency tax that all of us as organisations are bearing.

How do organisations answer that inefficiency tax? It could be getting your deliveries done right the first time – so you’re doing 20% fewer attempts, that’s 20% less cost. It could be having better drop density, so your routes are more optimised. Or, if you’re working with third-party carriers – or if you are a third-party carrier working with multiple retailers – knowing which shipments are subsidising the profitable ones. Can you know your cost to serve at shipment level?

On the other side, from a customer expectation perspective, we are seeing an evolution. It’s now less about speed, about how fast you can get it. Even though the majority of retailers have moved towards faster forms of delivery, what the consumer actually wants is predictability. The businesses that are able to deliver predictable delivery services, and the carriers that can support retailers in doing that, will have a competitive advantage – even more so than on cost. They will have fewer failed attempts, it will be cheaper for them to do it, and retailers and consumers will pick them over others. So how do we ensure the predictability of delivery that is becoming so essential in the European market today?

And finally, AI is here to stay. We see that 9 out of 10 businesses have started adopting AI in some shape or form, and 4 out of 10 have actually taken it into production. So it’s no longer a concept, it’s no longer a question mark. Now it’s about whether you are going to be one of those four out of ten, or one of the six out of ten. How do businesses make that leap into adopting AI? What are the challenges when it comes to data structures, people and processes, and how do they solve them? These are all areas that are becoming very pertinent in Europe today.

We have a lot more detail on this in our report, which has over 3,000 data points.

Where carriers can win back the 6%

For carriers, Jalan’s numbers point to an uncomfortable conclusion: price increases alone are not keeping up with costs. If costs grow by around 11% and rates by around 5%, the difference has to be found in operations – fewer failed deliveries, denser routes and a clear view of which customers and shipments actually make money.

His point about predictability matters for subcontracted carriers too. Retailers are increasingly judged on whether a parcel arrives when promised, not only on how fast it arrives. Carriers that can support that promise with reliable data will be in a stronger position in tenders.

It is part of a wider shift in which e-commerce is turning logistics operators into end-to-end flow managers.