Transport Networks and Finding the Right Transport Providers

Benchmarking & KPI Management for Success

Transport is one of those supply chain functions that only gets attention when something goes wrong.

A delivery misses a cut-off and a customer escalates. A distribution centre runs out of dock space because linehaul arrives late. Freight invoices spike without explanation. One carrier performs brilliantly in metro areas but struggles in regional lanes. Suddenly, transport is no longer a background function—it is the business.

Across Australia and New Zealand, freight networks are becoming harder to manage. Costs are rising, service expectations are tightening, and disruption is more frequent. Many organisations are also dealing with more complex delivery profiles: e-commerce fulfilment, store replenishment, direct-to-site deliveries, bulky items, time-window commitments, reverse logistics and heightened compliance requirements.

In this environment, the difference between average and excellent transport performance often comes down to three things:

1. A transport network designed to suit your demand and service promise
2. Transport providers selected objectively, based on capability and fit (not familiarity)
3. Benchmarking and KPI management embedded into day-to-day operations and governance

This article walks through how to build a transport network that performs, how to select the right providers, and how to manage success using benchmarking and KPIs—without turning the function into a spreadsheet contest. It also outlines how Trace Consultants can help organisations in Australia and New Zealand improve transport outcomes with practical, independent support.

Why Transport Networks Matter More Than Ever

Transport is not just a cost line. It is a service engine, a risk exposure and, increasingly, a brand experience.

When transport networks are designed and managed well, organisations can achieve:

• Lower freight cost per unit without sacrificing service
• Higher DIFOT (Delivered In Full, On Time) and fewer customer escalations
• Better capacity certainty through seasonal peaks
• Reduced damage and claims
• Improved dock and warehouse flow (less congestion and rescheduling)
• More reliable inventory positioning and replenishment cycles
• Better data and visibility for decision-making

When networks are not designed or managed well, the opposite happens: operational workarounds grow, costs become opaque, service performance erodes, and the organisation becomes dependent on a few “hero operators” who keep things moving through sheer effort.

Transport networks deserve structured attention because they shape performance outcomes for years. Yet many organisations treat transport as something to “shop” every few years on rates alone, rather than designing a model that can sustain service and cost performance long term.

What Is a Transport Network, Really?

A transport network isn’t just which carrier moves freight from A to B. It is the complete set of decisions and structures that determine how freight flows through the business.

A transport network includes:

• The lanes and flows (DC to store, DC to customer, supplier to DC, inter-DC, returns)
• Service tiers (standard, express, timed, same-day, regional, remote)
• Mode choices (linehaul, courier, parcel, rigid/tautliner, containerised, dedicated fleet)
• Consolidation and deconsolidation points (cross-docks, hubs, metro depots)
• Cut-offs and lead times (how transport interacts with warehouse operations)
• Provider mix (single carrier, multi-carrier, primary/secondary, specialist providers)
• Governance and accountability (who owns decisions, escalation, improvement)
• Commercial structure (contracts, rate cards, minimums, fuel, accessorials)
• Performance management (KPIs, reporting cadence, claims process, root cause)

When these elements are aligned to the business strategy, transport becomes predictable. When they are not aligned, transport becomes a daily negotiation.

The Most Common Triggers for Reviewing a Transport Network

Organisations don’t usually set out to redesign their network for fun. It happens when pressure builds. Typical triggers include:

1. Cost Growth Outpaces Sales or Volume

Freight costs rise due to:

• accessorial charges creeping in
• poor consolidation
• inefficient lane allocations
• under-utilised vehicles
• non-compliant bookings
• fuel or surcharge complexity

Cost blowouts are often symptoms of network design and governance issues, not just carrier rates.

2. Service Performance Has Become Unreliable

Service declines show up as:

• late deliveries
• missed timed windows
• increased damaged freight
• rising customer complaints
• higher re-delivery costs

This often indicates capability mismatch between service requirements and provider model.

3. Growth, Channel Shift or SKU Complexity

New product ranges, new customer segments, and growth in direct-to-consumer fulfilment often break legacy networks.

4. Carrier Dependency Risk

Relying heavily on one provider can become a strategic risk, particularly during peak periods or industrial disruptions.

5. M&A, Footprint Changes or Network Moves

Warehouse moves, new facilities, or acquisitions often require lane redesign and provider reallocation.

When these triggers appear, the right approach isn’t to “retender everything immediately.” It’s to start by understanding the network and defining what “good” looks like, before going to market.

Finding the Right Transport Providers: Start With Fit, Not Familiarity

Provider selection in transport can be surprisingly subjective. Many organisations default to the carriers they know, or those that have “always been there.” But transport markets have evolved. Capability, technology, footprint, fleet profile and service models differ widely.

Selecting the right transport providers starts with a clear definition of:

• Your customer promise (what you must deliver, and when)
• Your freight profile (pallets, parcels, bulky, hazardous, temperature-controlled)
• Your lane structure (metro vs regional vs remote, density, frequency, variability)
• Your operational realities (dock constraints, cut-offs, packaging, loading)
• Your risk appetite (single source vs multi-carrier, contingency requirements)

Only once these are clear does “who is the best provider” become an objective question.

The Provider Selection Process That Actually Works

A strong provider selection process is structured, comparable and evidence-based. In practice, it usually includes these steps:

Step 1: Segment Your Freight and Lanes

Not all freight is equal. A good selection process segments:

• parcel vs pallet
• metro vs regional vs remote
• fast-moving vs low-frequency
• high-value vs low-value
• fragile vs robust
• timed vs standard

This segmentation enables targeted selection rather than forcing a single provider to do everything.

Step 2: Define Service Standards in Plain Language

Service definitions must be unambiguous, including:

• lead times by lane
• time window compliance requirements
• POD requirements
• claims and damage thresholds
• escalation processes
• booking cut-offs
• exception notification expectations

If you can’t describe service clearly, you can’t select providers fairly—or manage them effectively later.

Step 3: Run a Capability Assessment (Not Just a Rate Comparison)

Rates matter. But capability mismatch costs more than a higher linehaul rate.

Capability assessment should cover:

• network footprint and depot coverage
• linehaul schedules and frequency
• fleet profile and equipment availability
• subcontracting models and governance
• peak capacity approach
• safety and compliance maturity
• claims performance and handling processes
• technology and visibility capability
• customer service model and escalation response

Step 4: Align Commercial Structure to Behaviour

Commercial terms should encourage the behaviours you want:

• incentives for service and compliance
• clear treatment of accessorials
• transparent fuel mechanisms
• controls for rate variation over time
• clarity on minimums and volume commitments

Many transport relationships deteriorate not because a provider “gets worse,” but because the contract structure creates constant friction.

Step 5: Validate Through Lane Modelling

Where possible, compare providers on:

• total cost-to-serve across representative lanes
• service feasibility against your cut-offs
• operational constraints (dock hours, trailer swap models, equipment)

This moves the evaluation beyond rate cards.

Transport Benchmarking: What It Is (and What It Isn’t)

Benchmarking is one of the most powerful tools for improving transport performance—when done properly.

Benchmarking is not:

• asking a carrier if your rates are “competitive”
• comparing your rate card line-by-line with another organisation without context
• using generic industry averages that don’t reflect your lane mix

Good benchmarking is:

• a structured comparison of cost and performance relative to similar networks
• adjusted for volume density, distance, freight profile and service requirements
• used to identify improvement opportunities, not just negotiate harder

What to Benchmark in a Transport Network

Cost benchmarking can include:

• cost per pallet / carton / consignment
• cost per kilometre by lane
• cost-to-serve by customer segment or region
• accessorial and surcharge incidence
• claims cost and redelivery cost

Service benchmarking can include:

• DIFOT by lane and service tier
• on-time pickup performance
• damage rates
• exception rates (missed scans, lost freight)
• POD compliance times
• customer complaint incidence
• rework and rescheduling frequency

Operational benchmarking can include:

• dock-to-dispatch cycle time impacts
• trailer utilisation and cube utilisation
• consolidation rates
• booking compliance and despatch discipline

Benchmarking should lead to a short list of actionable initiatives, not a “report that sits on a shelf.”

KPI Management: Where Transport Relationships Win or Lose

Once providers are selected, performance management is where value is either realised or lost.

Many organisations have KPIs, but not KPI management. They produce reports, but don’t drive improvement. Or they manage performance through blame, which degrades relationships and encourages defensive behaviour.

High-performing transport organisations treat KPI management as a structured operating rhythm.

The Anatomy of Strong KPI Management

1. Choose KPIs That Influence Behaviour

Too many KPIs dilute focus. A strong set typically includes:

Service KPIs

• DIFOT (or on-time delivery) by lane and tier
• on-time pickup
• scan compliance / milestone visibility
• proof of delivery time compliance

Quality KPIs

• damage rate
• claims turnaround time
• loss incidence

Cost KPIs

• cost per unit (with clear unit definitions)
• accessorials as a percentage of spend
• invoice accuracy and dispute rate

Responsiveness KPIs

• exception notification timeliness
• time-to-resolution for escalations
• customer service response times

2. Define KPIs Precisely

A KPI that can be interpreted two ways will be argued two ways.

Define:

• time measurement basis (dispatch time vs booked time vs pickup time)
• what counts as “on time” (grace period, business hours, customer availability)
• what constitutes a “delivery attempt”
• how damages are attributed
• how exceptions are classified

Precision reduces friction and increases accountability.

3. Build a Cadence of Reviews

A strong cadence often includes:

• weekly operational reviews for exceptions and immediate fixes
• monthly performance reviews for trend analysis and root cause
• quarterly business reviews for strategic improvement and contract alignment

Without cadence, KPIs are just numbers.

4. Separate Root Cause from Blame

Performance problems are rarely caused by one party alone.

A missed delivery window could be:

• late linehaul
• poor booking data
• warehouse dispatch delays
• customer site constraints
• packaging failures

KPI management should drive joint root cause investigation and improvement actions.

5. Tie Performance to Commercial Outcomes (Carefully)

Incentives and penalties can work, but they must be:

• measurable
• fair
• controllable by the provider
• balanced

Overly punitive models drive gaming and degrade collaboration.

Building a Provider Portfolio: Single Carrier vs Multi-Carrier

There is no universally correct model. The right approach depends on network complexity, volume density, service requirements and risk appetite.

Single Carrier Models

Pros

• simplicity
• fewer interfaces
• consolidated negotiation

Risks

• dependency
• limited competitive pressure
• reduced flexibility in peak periods

Multi-Carrier Models

Pros

• resilience
• best-fit capability by segment
• competitive tension

Risks

• complexity
• governance burden
• risk of inconsistent customer experience

A common high-performing approach is:

• one or two primary carriers per segment or region
• secondary carriers for contingency and peak cover
• specialist providers for niche requirements (remote, bulky, temperature-controlled, timed)

This model balances simplicity and resilience.

The Hidden Value: Linking Transport KPIs to Warehouse and Customer Outcomes

Transport doesn’t exist in isolation. Some of the biggest gains come from aligning transport with warehousing and customer service.

Examples include:

• improving despatch discipline to reduce missed pickups
• adjusting cut-off times to improve linehaul performance
• slotting and loading practices that reduce damage
• packaging standards that reduce claims
• load building that improves utilisation and reduces cost per unit

When transport KPIs are linked to upstream warehouse metrics and downstream customer experience metrics, improvement becomes far more powerful—and far less political.

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to design transport networks, select transport providers objectively, and implement benchmarking and KPI management that drives sustainable outcomes.

We help clients move from reactive transport management to structured performance and cost control—without adding unnecessary bureaucracy.

Independent, Vendor- and Carrier-Agnostic Support

We are not a carrier, broker or software vendor. That independence allows us to:

• assess options objectively
• challenge assumptions
• focus on what fits your operation and service promise

Transport Network Review and Strategy

We can help define:

• the right transport network structure for your lanes and demand profile
• segmentation strategies for freight and service tiers
• risk and resilience approaches (capacity, contingency)
• service promise alignment and feasibility testing

Provider Selection and Go-To-Market Support

Trace Consultants can support:

• market scanning and capability assessment
• tender design and evaluation frameworks
• commercial structure design (including accessorial controls and governance)
• contract and KPI schedule development
• transition planning and implementation governance

The goal is not just to pick “the cheapest carrier,” but to build a provider portfolio that performs.

Benchmarking and Cost-to-Serve Analysis

We help clients benchmark:

• rates and cost drivers in context
• accessorial incidence
• lane density and utilisation opportunities
• cost-to-serve by segment and region

This provides a fact base for negotiation and improvement—without relying on generic industry averages.

KPI Management Operating Rhythms

We support clients to implement practical performance management including:

• KPI definition and measurement design
• reporting and dashboarding requirements
• weekly/monthly/quarterly review cadences
• root cause and continuous improvement frameworks
• escalation pathways and governance structures

This is where savings and service improvements become “sticky.”

Building Internal Capability

Sustainable transport improvement requires internal capability. Trace Consultants can help uplift:

• transport governance maturity
• team capability and role clarity
• operating procedures and decision rights
• performance management routines

This reduces reliance on individuals and creates a repeatable approach.

Final Thoughts

Transport networks and provider relationships succeed when they are designed and managed deliberately.

Benchmarking gives organisations a fact base. KPI management turns that fact base into action. Provider selection determines whether capability matches your service promise. And network design sets the foundation that everything else sits on.

For organisations across Australia and New Zealand, the opportunity is significant:

• transport is often a major spend line
• performance is highly visible to customers
• small improvements compound quickly over time

The best outcomes come when organisations stop treating transport as a periodic procurement event and start treating it as an operating system: designed, governed, measured and improved continuously.

If your transport costs feel opaque, your service performance feels inconsistent, or your provider relationships feel reactive, it may be time to step back and redesign the way transport is managed—starting with the network, the provider portfolio and the KPIs that drive success.

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Warehouse Design – When and How It Can Make a Difference

Warehouse design is rarely top of mind until something breaks.

Orders start going out late. Labour costs creep up. Forklift congestion becomes the norm. Inventory accuracy declines. Safety incidents increase. Customer complaints rise. Growth plans stall because the site simply cannot cope.

At that point, organisations often jump straight to solutions: more automation, a new warehouse, racking upgrades, or a warehouse management system replacement. Too often, these decisions are made without stepping back to ask a more fundamental question:

Is our warehouse designed to support the way our business actually operates today—and where it needs to go next?

For organisations across Australia and New Zealand, warehouse design is one of the most powerful (and under-leveraged) levers available to improve cost, service and resilience across the supply chain. When done well, it delivers benefits for years. When done poorly, it locks in inefficiencies that are extremely hard and expensive to unwind.

This article explores:

• When warehouse design really matters
• The warning signs that a redesign is needed
• What “good” warehouse design actually looks like in practice
• Common pitfalls organisations fall into
• How warehouse design should align with operating models, workforce and technology
• How Trace Consultants can help organisations get warehouse design right

Why Warehouse Design Matters More Than Ever

Warehouses used to be viewed as simple storage facilities. Today, they are complex operational engines sitting at the centre of customer experience, working capital management and cost control.

Several trends are making warehouse design increasingly critical in Australia and New Zealand:

1. Rising Labour Costs and Workforce Constraints

Labour markets remain tight across logistics, with wage pressure, skills shortages and high turnover rates. Poorly designed warehouses amplify these challenges by:

• Requiring more manual handling
• Increasing travel time and congestion
• Making training more difficult
• Increasing fatigue and injury risk

Good design reduces reliance on brute labour by improving flow, layout and task efficiency.

2. Service Expectations Continue to Rise

Customers expect faster, more reliable fulfilment with fewer errors—regardless of whether the customer is a consumer, a hospital ward, a retail store or a construction site.

Warehouse design has a direct impact on:

• Pick accuracy
• Order cycle times
• Cut-off compliance
• Peak responsiveness

No amount of system configuration can compensate for a fundamentally flawed layout.

3. Growth, Volatility and Uncertainty

Many organisations are experiencing:

• Demand volatility
• SKU proliferation
• Channel complexity (B2B, B2C, omnichannel)
• Seasonal and promotional peaks

Warehouses designed for yesterday’s volumes and profiles struggle to cope without excessive overtime, temporary labour or service degradation.

4. Capital Is Expensive

Warehouses are capital-intensive assets. Poor design decisions can lock organisations into:

• Excessive operating costs
• Inflexible layouts
• Under-utilised space

Conversely, thoughtful design can defer or even eliminate the need for new sites.

When Warehouse Design Can Make the Biggest Difference

Not every warehouse needs a full redesign. However, there are clear moments in a business lifecycle when revisiting warehouse design delivers outsized value.

1. When Performance Has Plateaued

If productivity improvements have stalled despite:

• Process improvements
• Workforce initiatives
• Technology upgrades

…there is a strong chance that the physical design of the warehouse has become the limiting factor.

2. When Volumes or Profiles Have Changed

Warehouses are often designed around a specific:

• Throughput volume
• Order profile
• SKU mix

Over time, these assumptions change. What was once an efficient bulk-handling operation may now be dealing with high-frequency, small-order picking. Without design changes, inefficiencies compound.

3. When Safety Incidents Are Increasing

Congestion, manual handling risks, poor line-of-sight and ad-hoc storage solutions are often symptoms of layout issues rather than behavioural problems.

A redesign focused on flow and segregation can significantly improve safety outcomes.

4. When Automation Is Being Considered

Automation should never be the starting point. It should be the outcome of a well-designed operation.

Warehouse design work is critical before:

• Goods-to-person systems
• Conveyor networks
• Automated storage and retrieval systems
• Robotics

Without the right layout and flows, automation investments underperform or fail altogether.

5. When a New Warehouse Is Being Planned

New builds present a once-in-a-generation opportunity. Mistakes made at this stage are extremely costly to fix later.

Warehouse design must be completed before:

• Land is finalised
• Building footprints are locked in
• Services are positioned

The Difference Between “Storage Design” and “Operational Design”

One of the most common mistakes organisations make is treating warehouse design as a racking and space problem.

Good warehouse design is not about fitting pallets into a box. It is about designing how work flows through the facility.

Storage-Led Design (Common but Risky)

• Focuses on maximising pallet positions
• Prioritises cube utilisation over flow
• Treats people, equipment and technology as afterthoughts

Operational-Led Design (High-Performing)

• Starts with demand, order profiles and service requirements
• Designs end-to-end flows from inbound to outbound
• Aligns layout with operating model and labour strategy
• Uses storage solutions as enablers, not constraints

The difference between these two approaches is often the difference between a warehouse that looks good on paper and one that actually performs on the floor.

What Good Warehouse Design Looks Like in Practice

While every warehouse is different, high-performing designs share common principles.

1. Clear End-to-End Flow

Goods should move logically and predictably from:

• Receiving
• Putaway
• Storage
• Picking
• Packing
• Dispatch

Cross-flows, backtracking and congestion points are minimised.

2. Layout Aligned to Demand Profiles

Fast-moving items are located to minimise travel. Slow-moving or bulky items are positioned to reduce disruption.

Picking strategies (case pick, each pick, pallet pick) are reflected physically in the layout.

3. Appropriate Zoning and Segregation

Well-designed warehouses clearly separate:

• Pedestrians and material handling equipment
• Inbound and outbound traffic
• Value-added services
• Returns and quarantine stock

This improves both safety and productivity.

4. Flexibility for Change

Good designs allow for:

• Volume growth
• SKU expansion
• Changes in order profiles
• New technology

Fixed, highly constrained layouts often become obsolete faster than expected.

5. Workforce-Centric Design

Design decisions should consider:

• Walking distances
• Task variation
• Ergonomics
• Line-of-sight
• Ease of supervision

This has a direct impact on productivity, safety and staff retention.

6. Technology-Ready Infrastructure

Even if automation is not implemented immediately, the design should consider:

• Power and data
• Floor tolerances
• Clear heights
• Expansion zones

This avoids costly rework later.

Common Warehouse Design Pitfalls

Across Australia and New Zealand, Trace Consultants frequently see the same issues repeated.

Designing to a Single “Peak Day”

Designing a warehouse around a theoretical peak often leads to:

• Under-utilised space
• Excess capital spend
• Inefficient everyday operations

Better designs accommodate peaks through flexibility, not oversizing everything.

Locking in Assumptions Too Early

Early assumptions about:

• Volumes
• Automation
• Workforce models

…often change. Designs that cannot adapt become constraints rather than enablers.

Separating Design from Operations

When warehouse design is done in isolation from operations teams, the result often looks good in drawings but fails in reality.

Operational involvement is critical throughout the design process.

Over-Automating Too Soon

Automation can deliver value—but only when:

• Volumes are stable
• Processes are mature
• Data quality is strong

Poorly timed automation often locks in bad processes at scale.

Warehouse Design and the Operating Model

Warehouse design should never be done in isolation. It must be tightly aligned to the operating model.

Key questions include:

• What services are delivered from the warehouse?
• What are the cut-off times and service promises?
• What level of responsiveness is required?
• What is done in-house versus outsourced?

For example:

• A warehouse supporting healthcare operations has very different design requirements to one supporting retail promotions.
• A facility supporting construction or infrastructure projects requires different flows again.

Designing without clarity on the operating model almost always leads to compromise.

The Role of Data in Warehouse Design

Effective warehouse design is grounded in data, not assumptions.

Key inputs typically include:

• Historical order data
• SKU velocity and dimensions
• Inbound profiles
• Labour standards
• Seasonality and peak behaviour

However, data alone is not enough. It must be interpreted in the context of:

• Future strategy
• Growth plans
• Service commitments

Good design balances quantitative analysis with operational judgement.

When Incremental Changes Are Enough (and When They’re Not)

Not every situation requires a full redesign.

In some cases, targeted interventions can deliver meaningful improvements:

• Slotting optimisation
• Pick path reconfiguration
• Racking adjustments
• Workstation redesign

However, incremental fixes often stop delivering value once fundamental layout constraints are reached.

A key role of good advisory support is helping organisations understand when:

• Small changes are sufficient, and
• A more structural redesign is required

How Trace Consultants Can Help

Trace Consultants supports organisations across Australia and New Zealand to design warehouses that actually work—operationally, commercially and strategically.

Our approach is grounded in independence, practicality and deep operational experience.

Independent, Solution-Agnostic Advice

We do not sell automation, racking or systems. This allows us to:

• Assess options objectively
• Challenge vendor-led assumptions
• Focus on what is right for the business

End-to-End Perspective

Warehouse design does not exist in isolation. We consider:

• Network strategy
• Transport interfaces
• Inventory and working capital impacts
• Workforce models
• Technology architecture

This ensures the warehouse supports the broader supply chain.

Operationally Led Design

Our work starts with:

• Understanding how the operation actually runs
• Engaging frontline leaders and teams
• Designing flows that work in practice, not just on paper

Scalable and Future-Ready Designs

We help clients design warehouses that can:

• Grow with the business
• Adapt to changing demand
• Incorporate technology when the time is right

Support Across the Full Lifecycle

Trace Consultants can support organisations through:

• Early feasibility and option analysis
• Concept and detailed design
• Business case development
• Vendor and automation evaluation
• Implementation support and transition planning

Importantly, we help organisations avoid over-designing or over-investing before the fundamentals are right.

Final Thoughts

Warehouse design is one of the most powerful—but misunderstood—levers available to supply chain leaders.

When approached thoughtfully, it can:

• Reduce operating costs
• Improve safety and workforce outcomes
• Lift service performance
• Enable growth without constant firefighting

When approached poorly, it locks in inefficiency and frustration for years.

The difference lies not in how much is spent, but in when design decisions are made and how they are approached.

For organisations across Australia and New Zealand facing growth, volatility or performance challenges, revisiting warehouse design is often not just worthwhile—it is essential.

If your warehouse feels like it is working against you rather than for you, it may be time to step back and ask whether the design still fits the business you are today—and the one you are becoming.

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Last-mile Logistics Optimisation: Network Design and Technology

Last-mile logistics has moved from being a downstream operational concern to a board-level strategic issue. For organisations operating across Australia and New Zealand, the “last mile” is often the most expensive, most visible, and most complex part of the supply chain — and the part customers judge most harshly.

Whether it’s home delivery in metropolitan Sydney, servicing regional towns in New Zealand, replenishing retail stores, delivering healthcare supplies, or managing hospitality and food & beverage distribution, last-mile performance has a direct impact on customer satisfaction, operating costs, and brand reputation.

At the same time, organisations are facing rising transport costs, labour constraints, tightening service expectations, sustainability pressures, and growing complexity in delivery channels. The result is that many last-mile networks are no longer fit for purpose — often because they evolved incrementally rather than being intentionally designed.

This article explores how last-mile logistics optimisation can be unlocked through a combination of network design and technology, with a particular focus on the realities of operating in Australia and New Zealand. It also outlines how organisations can approach last-mile transformation in a structured, commercially grounded way.

Why the Last Mile Has Become So Challenging

The last mile has always been difficult. What has changed is the scale, speed, and visibility of those challenges.

Customer Expectations Have Shifted Permanently

Customers now expect faster, more predictable, and more transparent delivery. Same-day and next-day delivery expectations are no longer confined to major cities or large retailers. Service windows are tighter, tolerance for failure is lower, and communication is expected to be proactive rather than reactive.

Cost Pressure Is Intensifying

The last mile typically represents the highest cost per unit moved in the supply chain. Labour, fuel, fleet, subcontractor margins, and failed deliveries all compound quickly. In many organisations, last-mile delivery costs have grown faster than revenue, eroding margins even as volumes increase.

Network Complexity Has Increased

Organisations are servicing more channels, more locations, and more delivery profiles than ever before. B2B, B2C, store replenishment, click-and-collect, home delivery, and service-based logistics often sit within the same network — frequently with different service expectations and cost drivers.

Geography Works Against Simplicity

Australia and New Zealand present unique challenges. Long distances, low population density outside major metropolitan areas, and a heavy reliance on road freight make last-mile design inherently more complex than in many global markets.

Sustainability Expectations Are Rising

Customers, regulators, and investors are increasingly focused on emissions, vehicle utilisation, and waste reduction. Last-mile logistics is a visible contributor to Scope 3 emissions, placing additional pressure on organisations to improve efficiency.

What “Last-mile Optimisation” Really Means

Last-mile optimisation is often misunderstood as simply improving route planning or negotiating better transport rates. While these levers matter, they rarely address the structural drivers of cost and service performance.

True last-mile optimisation requires organisations to step back and ask more fundamental questions:

• Is the network structured in the right way to serve demand efficiently?
• Are delivery points being serviced from the right locations?
• Is inventory positioned optimally to minimise delivery distance and frequency?
• Are service promises aligned with cost-to-serve?
• Is technology enabling decision-making — or just reporting problems after the fact?

This is where network design and technology must work together.

The Role of Network Design in Last-mile Performance

Network design sits at the foundation of last-mile logistics. If the network structure is wrong, no amount of routing optimisation or system configuration will fully fix the problem.

What Is Last-mile Network Design?

Last-mile network design involves determining:

• The number, size, and location of distribution facilities
• The role of each node in the network (e.g. fulfilment, cross-dock, micro-hub)
• Which customers, stores, or service points are served from which locations
• Delivery frequency and service models by segment
• The interaction between linehaul, middle-mile, and last-mile transport

Importantly, network design is not a one-time exercise. Demand patterns, service expectations, and operating constraints evolve — and the network must evolve with them.

Common Network Design Challenges in Australia and New Zealand

Across both countries, Trace Consultants frequently sees similar network-related challenges affecting last-mile performance.

Legacy Networks Built for a Different Demand Profile

Many networks were designed years ago for pallet-based, store-focused replenishment. Today, they are being stretched to support high-frequency, small-drop, customer-direct delivery without being fundamentally reconfigured.

Over-Centralisation

Highly centralised networks can reduce inventory holding costs but often drive long last-mile distances, higher transport costs, and poorer service responsiveness — particularly for regional and remote locations.

Under-utilised Regional Nodes

Conversely, some organisations operate regional facilities that are poorly integrated into the broader network, resulting in duplication, low utilisation, and inconsistent service models.

One-size-fits-all Service Models

Applying the same delivery frequency, vehicle type, and service promise across all customers often leads to over-servicing some segments while under-servicing others.

Designing the Network Around Demand, Not Assets

A common mistake in last-mile optimisation is designing around existing assets rather than demand realities.

Effective network design starts with:

• Understanding demand by location, channel, and time
• Segmenting customers based on service requirements and cost-to-serve
• Modelling different network scenarios to test trade-offs between cost, service, and risk
• Considering flexibility and scalability, not just current volumes

For example, introducing micro-fulfilment or urban consolidation points may significantly improve service and cost outcomes in dense metropolitan areas — but only if demand density and operating models support it.

The Role of Technology in Last-mile Optimisation

Technology is a critical enabler of last-mile performance — but only when deployed in support of a well-designed network and operating model.

Moving Beyond Static Planning

Traditional planning approaches often rely on static routes, manual adjustments, and historical assumptions. Modern last-mile environments require more dynamic decision-making.

Technology can support:

• Dynamic route optimisation based on real-time conditions
• Improved delivery sequencing and load optimisation
• Visibility across drivers, vehicles, and delivery status
• Proactive exception management rather than reactive firefighting

Key Technology Capabilities That Matter

Rather than focusing on individual systems, organisations should think in terms of capability.

Transport Management Systems (TMS)

A fit-for-purpose TMS supports carrier management, routing, cost visibility, and performance measurement. The key is configuration aligned to the network and service model — not just system deployment.

Route Optimisation and Scheduling Tools

Advanced routing tools can significantly reduce kilometres travelled, improve drop density, and support tighter delivery windows when integrated properly with order management and dispatch processes.

Real-time Visibility and Execution

Mobile applications, driver visibility tools, and automated status updates improve execution discipline and customer communication while reducing administrative overhead.

Data and Analytics

High-quality data enables better decisions around network changes, service segmentation, and continuous improvement. Without clean, structured data, optimisation efforts stall quickly.

Why Technology Alone Often Fails

Many organisations invest heavily in last-mile technology but see limited benefits. This usually occurs for one or more of the following reasons:

• The underlying network design is suboptimal
• Service promises are misaligned with cost-to-serve
• Data quality is poor or fragmented
• Operating processes are not standardised
• Change management is underestimated

Technology amplifies whatever operating model it supports. If the model is flawed, technology simply makes those flaws more visible.

Integrating Network Design and Technology

The most successful last-mile transformations integrate network design and technology as part of a single, structured journey.

This typically involves:

1. Establishing clear service and cost objectives
2. Understanding current-state performance and constraints
3. Modelling network design scenarios
4. Defining the future-state operating model
5. Selecting and configuring technology to enable that model
6. Embedding governance, metrics, and continuous improvement

Crucially, decisions are made with an end-to-end lens rather than optimising isolated components of the supply chain.

Sustainability and the Last Mile

Sustainability is becoming inseparable from last-mile optimisation.

Network design decisions directly influence:

• Total kilometres travelled
• Vehicle utilisation
• Fleet mix and electrification readiness
• Delivery frequency and consolidation opportunities

Similarly, technology enables better measurement and management of emissions, supporting more informed trade-offs between service and environmental impact.

For many organisations, improving last-mile efficiency is one of the most practical ways to reduce emissions while also lowering costs.

Practical Steps Organisations Can Take Now

For organisations looking to improve last-mile performance, the following principles are consistently effective:

• Take a network-first view rather than jumping straight to technology
• Segment customers and service models deliberately
• Use scenario modelling to understand trade-offs
• Align service promises with economic reality
• Focus on data quality and decision-making discipline
• Treat last-mile optimisation as a continuous capability, not a one-off project

How Trace Consultants Can Help

Trace Consultants supports Australian and New Zealand organisations to optimise last-mile logistics through a pragmatic, analytically rigorous approach that balances cost, service, and sustainability.

Rather than pushing predefined solutions, Trace works with clients to:

• Diagnose last-mile performance issues across network design, transport, and operations
• Model alternative network scenarios to quantify cost and service impacts
• Define fit-for-purpose last-mile operating models aligned to demand and strategy
• Support technology selection, configuration, and integration
• Improve visibility, governance, and performance management across last-mile execution

Trace Consultants brings deep experience across retail, FMCG, healthcare, government, manufacturing, and hospitality supply chains — with a strong understanding of the unique geographic and operating challenges in Australia and New Zealand.

Importantly, Trace’s approach is independent and solution-agnostic, ensuring recommendations are driven by what works best for the organisation rather than by technology or asset bias.

Looking Ahead: The Future of Last-mile Logistics

Last-mile logistics will only become more complex. Urban congestion, labour constraints, sustainability expectations, and customer demands will continue to reshape how goods move from network to doorstep.

Organisations that treat last-mile logistics as a strategic capability — grounded in strong network design and enabled by fit-for-purpose technology — will be far better positioned to compete, scale, and adapt.

Those that rely on incremental fixes and reactive solutions will continue to struggle with rising costs and declining service performance.

The opportunity is there. The challenge is approaching it with the right structure, discipline, and insight.

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