Online retailers are taking greater control of fulfillment and dispatch, viewing the last mile as a competitive advantage and a driver of long-term brand value.
That approach is changing the role of third-party delivery providers that traditionally handled the last mile. Tight margins, recurring carrier disruptions, and rising customer expectations are pushing retailers toward more direct oversight.
Speed has long been a defining feature of digital commerce. However, the promise of two-day delivery means little if an order brings unexpected customs fees, vague tracking updates, or delays.
Nishith Rastogi, founder and chief executive technology officer of AI-powered logistics platform Locus, believes this marks the beginning of a broader move toward brands directing their own delivery networks. He expects more retailers to take direct control of logistics decisions in the coming years.
“Taking direct control of dispatch gives retailers more options when conditions change. If a carrier runs short on capacity, misses service levels, or becomes uneconomical on a particular route, the retailer can reallocate work instead of automatically accepting a premium, a delay, or both,” he told the E-Commerce Times.
Retailers Seek a Hedge Against Delivery Volatility
Direct control of dispatch and last-mile operations can provide retailers with a financial hedge against margin pressure. It also allows them to match each order with a delivery option based on geography, urgency, cost, capacity, and service history, Rastogi explained.
“That can reduce the tendency to default to whatever capacity a single provider happens to have available,” he said.
The financial benefits extend beyond transportation rates. Failed deliveries can generate reattempt costs, customer service inquiries, refunds, cancellations, and lost repeat business. Direct control does not remove volatility, Rastogi added, but it can reduce how much of a retailer’s margin depends on decisions made elsewhere.
“It gives the retailer the ability to respond earlier and choose among more options when the original plan no longer works,” he said.
Technology Puts Retailers in the Driver’s Seat
Rastogi said that five years ago, taking greater control of logistics often meant assembling systems, teams, and carrier relationships largely from scratch. For all but the largest retailers, the cost and complexity made outsourcing inventory storage, order packing, and delivery the more practical option.
“That’s changed. Transportation technology can now automate much more of the daily decision-making involved in running a delivery network,” he said.
According to Rastogi, retailers do not need to build every capability internally. They can combine their operational expertise with technology and external partners that provide the required infrastructure and capacity.
Third parties will continue to play an important role, he said, but retailers can retain control over the decisions that determine cost, service reliability, and customer experience.
“That control matters because 93% of U.S. shoppers say proactive updates can at least partially offset the frustration caused by a delivery delay,” Rastogi said.
Greater operational control ultimately matters only if it improves the shopper experience. In cross-border e-commerce, that increasingly means providing reliable delivery estimates and disclosing the full landed cost before checkout.
Reliability, Cost Transparency Challenge Race for Speed
A recent Landmark Global consumer survey found that 69% of North American consumers would be more likely to complete a purchase if duties and taxes were prepaid at checkout. Nearly one-third (32%) identified delivery delays as a top concern when ordering internationally.
The findings suggest that unclear final prices and delivery estimates can cause shoppers to abandon purchases, costing retailers sales.
E-commerce has long been characterized as a race toward faster delivery. However, Landmark Global’s Cross-Border Confidence Index found that hidden costs deter 43% of North American shoppers. Delivery delays were cited as a concern by 59% of Canadian shoppers, compared with 38% in the U.S.
Today’s cross-border shoppers increasingly value reliable delivery and certainty about landed costs alongside speed. Operational and technical breakdowns that produce surprise fees or delays can quickly erode customer trust.
“Speed is still very much a priority in e-commerce. If anything, expectations are higher than ever because large platforms have conditioned shoppers to expect international orders in days rather than weeks, otherwise known as the Amazon effect,” Scott MacRae, CEO at Landmark Global, told the E-Commerce Times.
Where the Investment Pays Off
Building or taking direct operational control of a logistics network requires upfront investment in software, integration, data, and expertise. The return comes from improving decisions made repeatedly across thousands or millions of orders.
Those decisions include how orders are grouped, which carrier receives the work, how routes are sequenced, and when to reallocate capacity, Rastogi noted. A small improvement on a single delivery can become material when applied consistently across an entire network.
Substantial savings can also come from preventing service failures instead of paying to resolve them later, according to Rastogi. Better planning and visibility can reduce reattempts, avoid unnecessary premium capacity, lower customer support volume, and protect the delivery commitment made at checkout.
“The long-term cost structure changes because the retailer invests upfront in software, data, and operational expertise instead of accepting limited choices and variable costs whenever network conditions change,” Rastogi said.
This approach does not require moving every activity in-house. Retailers can continue using third-party logistics providers (3PLs) and carriers for capacity while controlling how they deploy those resources.
“The objective is to use a third party because it is the best option for a particular shipment, lane, or period, not because the retailer lacks the ability to evaluate alternatives,” he explained.
Geography Changes the Delivery Equation
Delivery expectations and economics differ between the U.S. and Canada, according to MacRae. Canadian retailers and shoppers operate in a market where parcel delivery is generally more expensive.
Canada’s size, lower parcel density, and higher labor and fuel costs make cost-effective delivery more difficult than in the U.S.
Unexpected duties or fees can compound those costs for Canadian shoppers, MacRae noted, making upfront pricing particularly important.
“Expectations for speed in the U.S. have grown exponentially. This doesn’t mean that transparency is any less important. Still, U.S. consumers have become accustomed to faster delivery standards and will often gravitate toward an option that can get an order to them sooner,” MacRae said.
One Network, Multiple Delivery Options
Most retailers cannot bring every fulfillment operation in-house. Instead, they must balance control of their own fleets and dispatch operations with the reach and capacity of third-party carriers.
The key is to avoid treating in-house fleets and external carriers as separate networks, Rastogi said. Both should be managed through a common dispatch and orchestration layer.
That approach allows each order to be assigned based on available capacity, service requirements, cost, and the delivery commitment made to the customer, he explained.
Within that network, carrier partners can provide additional reach, flexibility, or specialized capabilities when needed. Managing them alongside in-house operations through one system can prevent teams from making conflicting choices and preserve visibility when an order moves to a third party.
The mix can vary by day, region, season, or individual order, Rastogi added. A retailer might use its own fleet in dense urban areas, regional carriers in selected zones, and national providers for broader coverage.
“What remains consistent is that the retailer operates one coordinated network rather than a collection of disconnected delivery channels,” he said.
