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Logistics optimization is about much more than finding the shortest route. In this episode of The Fleet, Arizona State University researcher Lacy Greening explains how AI, shipment consolidation and real-time coordination are helping organizations reduce transportation costs, improve resilience and build more efficient logistics networks. Discover why the most effective supply chains optimize the entire network, not just individual shipments.
The middle mile has the biggest impact. The network between warehouses and final delivery often presents the greatest opportunity to improve cost, speed and efficiency.
The shortest route isn't always the smartest. Consolidating shipments through strategically located hubs can reduce transportation costs while maintaining delivery performance.
AI improves coordination, not just automation. Real-time communication between facilities can help fleets respond faster to disruptions and optimize decisions across the network.
Resilience is becoming as important as efficiency. Modern fleet logistics strategies increasingly balance cost optimization with flexibility to adapt to changing demand, supply chain disruptions and market conditions.
The middle mile has the biggest impact. The network between warehouses and final delivery often presents the greatest opportunity to improve cost, speed and efficiency.
The shortest route isn't always the smartest. Consolidating shipments through strategically located hubs can reduce transportation costs while maintaining delivery performance.
AI improves coordination, not just automation. Real-time communication between facilities can help fleets respond faster to disruptions and optimize decisions across the network.
Resilience is becoming as important as efficiency. Modern fleet logistics strategies increasingly balance cost optimization with flexibility to adapt to changing demand, supply chain disruptions and market conditions.
Every day, fleet leaders make hundreds of routing decisions. The challenge is deciding which route creates the greatest value across the entire network.
At the same time, consumers have never expected more from delivery than they do today. Free shipping, same-day service and real-time tracking have become the norm. This is placing increasing pressure on supply chains to move goods faster and more efficiently.
According to Arizona State University assistant professor Lacy Greening, speed alone isn't what separates high-performing fleet logistics networks. The competitive advantage lies in how organizations optimize the "middle mile". This refers to the complex web of fulfillment centers, cross-docks and transportation hubs that connect manufacturers to the final delivery.
In a recent episode of Lacy explained why the most efficient route isn't always the most obvious one, how artificial intelligence (AI) is transforming logistics decision-making and why resilience has become just as important as efficiency.
Most people are familiar with the first mile, when products leave a manufacturer, and the when they're delivered to the customer. The middle mile, however, remains largely invisible despite playing a critical role in determining cost, speed and service.
"The middle mile is this network of facilities such as fulfillment centers, cross docks, different types of hubs, and all of these transportation connection points. That's the point that's important in terms of optimizing to get the right cost and to get the right speed," Lacy said.
Rather than moving shipments directly from origin to destination, companies often consolidate freight, reroute shipments through strategically located hubs and maximize trailer utilization. While this may appear less efficient on the surface, it often delivers significantly better business outcomes.
In fact, Lacy's research found that consolidation can dramatically reduce transportation costs.
"We actually compared the solution where you just sent everything direct versus using these consolidated lanes and we found it could save nearly 50%,” Lacy said.
Customers occasionally notice something puzzling when tracking a package. It appears to travel in the wrong direction before heading back toward its destination.
While that can look like a mistake, it's often evidence that the network is working exactly as intended.
"Your shipment goes in the opposite direction because it's going to a hub nearby that has many shipments,” Lacy said. “They may think something's going wrong, but really it's just that it's more cost-effective to actually send it in the opposite direction."
The lesson extends well beyond parcel delivery. Fleet and supply chain leaders are increasingly recognizing that optimizing an entire network often requires decisions that don't make sense when viewed from a single shipment's perspective.
Instead of asking, "What's the shortest route?" the better question becomes, "What's the most efficient outcome for the network as a whole?"
Artificial intelligence is rapidly reshaping logistics, but Lacy believes its greatest value is in helping organizations respond faster when plans change, rather than replacing human planners.
Today's logistics networks already generate enormous amounts of operational data. The challenge is coordinating decisions across multiple facilities before local adjustments create downstream problems elsewhere in the network.
"A lot of the is there, but the coordination is not up to speed for what modern networks need,” Lacy said. “Their local decisions may be rational and may be good for their facility, but it may have unintended consequences downstream."
Looking ahead, she sees AI acting more as an intelligent layer connecting operations across facilities.
"Maybe we could have AI agents that automatically communicate and coordinate decisions between facilities in real time. Having this kind of more autonomous communication is going to be important as we move forward," she said.
For years, fleet logistics has largely been measured by how quickly products reach customers. But customer expectations are evolving.
Lacy noted that some organizations are discovering customers often value reliable delivery estimates more than increasingly aggressive delivery promises.
"A few companies these days are seeing that customers actually appreciate more accuracy in delivery time estimates as opposed to just being the fastest."
That insight creates new opportunities for supply chains. If certain products can be delivered one day later without affecting customer satisfaction, organizations gain more opportunities to consolidate shipments, improve trailer utilization, and reduce costs.
The result is a better balance between customer experience and operational efficiency.
Recent geopolitical events, supply chain disruptions and changing trade policies have forced organizations to rethink what "optimization" really means. Historically, networks were designed primarily for efficiency. Today, resilience is becoming equally important.
"Organizations are having to not only try to optimize for cost, but more even for resiliency by having backup plans or easier ways to reroute,” Lacy said.
That shift is influencing everything from sourcing strategies to network design and transportation planning. Instead of relying on a single optimized path, organizations are building flexibility into their operations so they can adapt when disruptions occur.
As AI, automation and data analytics continue to mature, the organizations that gain the greatest advantage won't necessarily be the ones moving products the fastest. They'll be the ones making smarter decisions across increasingly complex networks.
In other words, the smartest supply chains may not always take the shortest route, but they may take the one that delivers the greatest value.
Want to build a more resilient logistics network?
Find out how Element helps organizations use intelligent fleet data, AI insights, and strategic advisory services toe. You can listen to the full conversation on The Fleet podcast.