“Everyone wants volume, until they’ve got it.”

That’s a popular saying in the shipping industry, and one that we talk about a lot at Shippit.

When volume surges, so too does complexity. In the notoriously complex and fragmented world of supply chains, things can (and do) go wrong quickly. Routes overlap, vehicles sit idle, delivery windows are missed and drivers spend more time in traffic than making drops.

Without control, it can explode into chaos - but with intelligent routing and fleet management, the same pressure can create a diamond.

In this week’s Delivered, Shippit’s resident fleet and route optimisation expert, Adam Amato, shines a light on everything delivery management; from the opportunities presented by AI to the nuanced, specialised and highly-regulated industries that stand to benefit.

TL;DR

• Without intelligent routing, delivery volume creates exponential complexity - AI-powered optimisation is now the nerve centre that separates market leaders from those struggling to scale.
• To improve flexibility, cost control, and service reliability, many businesses are turning to owner or hybrid fleet models - their success hinges on orchestration.
• In regulated industries, compliance and optimisation must work hand-in-hand to not only reduce cost and boost customer experience, but manage risk too.

From paper manifests to AI algorithms

Five years ago, brands were experimenting with crypto payments, consumers could try on an item through augmented reality, and even buy an item but pay later.

At the same time, Adam explains, many delivery fleets were managed manually:

• Routes were dictated by static postcodes;
• Traffic was left to chance;
• Manifests were paper-based;
• Decisions were made by dispatchers manually;
• Customers made peace with ‘It’ll arrive when it arrives’.

Now, those same customers have been trained to expect more.

As normalised by Uber and Amazon, transparency, speed, precision, and reliability are no longer ‘nice to haves’, they’re essential.

B2C consumers are voting with their feet, with Amazon and Temu winning the minds and wallets of millions of Australians.

And on a B2B delivery front, construction projects are falling behind and going over budget, pharmaceutical samples are spending more time in vans than labs, and fresh produce isn’t reaching commercial kitchens in time for service.

However, there is a shift toward AI-powered optimisation, with Shippit research showing that supply chain optimisation (20.7%) and AI and automation (15.5%) are the leading investments for decision-makers in 2025.

Smarter routes and fleet-wide optimisation is transforming how companies operate - and it’s a change Adam has seen firsthand.

Five years ago, Adam explains, it required phone call after phone call - today, an algorithm can now do it in under 100 milliseconds.

“AI is coming really fast,” he continues.

“Some businesses are adapting faster than others. Whoever has the most data to train these AI models is going to be the winner. Route optimisation could be driver machine learning. It could be a whole bunch of things, but I think what that's going to do is make deliveries much more accurate for the end recipient."

Not only is it going to enhance delivery speed and reliability for customers, it’s enabling drivers to complete more drops and reduce kms on the road.

Team Global Express, for example, highlighted at a recent Mobility Live event how it has used route optimisation to reduce its average PUD run from 124km/day to 96km/day, and we’re seeing more and more examples industry-wide.

The rise of owned fleets

As businesses seek to exert more control, there’s a move to them either managing their own fleets or operating a hybrid model.

“We're starting to see retailers or businesses use a mix of a hybrid pool of drivers,” Adam continues. “You still have your big players delivering to regional or hard-to-reach areas, but that's now being combined with full-time drivers to give you more control, and your gig economy, third-party drivers that can get it there faster.

“A combination of all offers business control and flexibility on when they can get an item to a customer.”

But it comes with extra operational complexity - which makes orchestration essential. It’s here that separates the market leaders from those who will struggle.

“We call it the ‘spaghetti bowl situation' where you've got deliveries going all over the place. You have to try to orchestrate those types of deliveries by minimising cost volatility.”

Untangling the ‘spaghetti bowl’

When you’re managing multiple elements - from owned to outsourced, hyper local to interstate - the spaghetti bowl can get very messy, very quickly.

Then there’s the issue of scaling up and down as demand ebbs and flows during peak and trough periods.

“If you think about it,” Adam continues “you've got peak periods and you've got trough periods. You might have a hundred drivers at your peak, but what do you do with quiet periods? What do you do with those drivers, or those vehicles when they become dead assets?

“Having a software that can orchestrate all of that in a real-world situation where you're not overlapping routes, drivers aren't crossing paths, and you're balancing the peaks and the troughs by utilising third-party carriers.

“Route optimisation is quite an interesting piece for me because it crosses a real-world scenario with technical challenges that software can tackle.”

Optimisation doesn’t just streamline a delivery fleet or a delivery vehicle with high-density CBD drops; it’s just as critical for complex jobs. Imagine a delivery vehicle that has to transport hazardous materials from Sydney Airport to the Western Suburbs, with no other stops.

The driver, following their phone map, drives through a school zone, then has to navigate the CBD, only to hit a low-clearance tunnel and take a detour through a water catchment area.

Not only is that delivery late, the company could also face severe penalties if it's found to have breached the Dangerous Goods (Road and Rail Transport) Act 2008 or the Water NSW Act 2014 for driving hazardous materials past a school, through the CBD or adjacent to a source of drinking water.

With smart route optimisation, that drop is on time and hitch-free.

Basic fleet management falls sort in specialised industries

Owned or hybrid fleets are becoming increasingly common in trade supply, furniture retailing, healthcare and pharmaceuticals, and food and beverage.

They’re businesses - like Reece and Mitre 10, which deal with time-critical construction materials or Healius which must carefully transport critical samples between pathology centres and labs - that have complex, specialised and highly-regulated delivery needs.

“There's a lot of complexity in trade and building deliveries,” Adam continues.

“If you think about someone waiting for their parcel on a job site, they might not be waiting at the front door. You can't necessarily leave an expensive building item without getting a signature at times. The person may not even be on site. They might be a building manager.

“Consistent ETAs can help, but it's more around the subtle complexities of the operation. Is it a fork on or fork off job? Is it a hand unload job? If so, how many people are required to hand unload those goods? Is it a driver and a jockey? All of those things factor into service times, wait times, location times.

Whether it’s construction projects blowing out or concerns about the impacts of supply chains on medicine shortage, businesses are locked in a battle for survival. Growth expectations haven’t changed, but for many businesses budgets have halved.

With pressure to make their time and assets go as far as possible, what does that mean for factors like fatigue and tolls? And how does route optimisation support?

Navigating fatigue incidents

• Fatigue-related offences are rising, with 5,257 incidents reported in the last financial year - up from 4,900 in 2023/24. Could businesses under pressure to hit drop targets and meet customer expectations ignore strict fatigue-related regulations to stay on track?
• “If a truck driver is driving more than 12 hours a day, and they get tired and have an accident, the responsibility is not only on the driver, it's on the company,” Adam explains.
• That means retailers and fleet operators must optimise not only based on customer needs, but compliance too - ensuring their drivers don’t exceed shift limits and have adequate rest between shifts.

Do tolls cost or save money?

• And as they seek to balance speed and efficiency with cost, does a $50 toll help or hinder the unit economics of that run?
• In NSW, tolls can cost $40 or $50 a day. Drivers are faced with a choice: pay the toll or drive the long way and add, for example, 90 minutes to their run. It begs the question: which is the more economical choice?
• “You now no longer have 12 hours to deliver. You have 10.5 hours to deliver. You're trying to organise the economics of your operation while not breaking compliance and regulatory responsibility."

In delivery, volume and complexity go hand in hand. That’s complexity not only in orchestration, but in everything from cost to customer experience and even compliance.

Without intelligence, volume becomes volatile.

As AI and data-driven orchestration evolves, the next frontier won’t just be faster routes - it’ll be predictive delivery management that learns, adapts and evolves.

And as it does, that spaghetti bowl will look more like a symphony - one where every delivery arrives on time and on budget.