Middle Mile 101: Why it matters and how tech is impacting it

The middle mile has long been one of the toughest parts of the supply chain to manage - it’s rigid, opaque, and costly to run effectively.

But that’s starting to change.

With tools like tracking software, smarter routing, and APIs, the middle mile is becoming more flexible, visible, and efficient.

To understand the middle mile better - what it is, how tech is impacting it, and how companies are adopting - I spoke with Troy Lester, co-founder of WARP.

Troy shared so much useful information that I broke it into two parts:

1. Understanding the middle mile

2. Actionable tactics to optimize it

Today, I’ll focus on #1 - understanding the middle mile.

(Part 2 out in two weeks!)

Table of Contents

1. Defining the Middle Mile

2. Evolution of the Middle Mile

3. The Impact of Technology

4. Challenges in Middle Mile

5. What’s Next

Connect with WARP on LinkedIn and their website.

This conversation has been edited for length and clarity. If you're short on time, skip to the TL;DR section for key takeaways & action steps.

1. Defining the Middle Mile

Let’s start simple. How do you define the middle mile in the supply chain?

TL: The middle mile sits between the distribution center (DC) and its various destinations, such as retail stores, wholesale partner stores, or fulfillment centers that feed into last-mile carriers. 

Let’s take an apparel retailer as an example. Imagine the goods are manufactured in China and arrive at a U.S. port, say the Port of LA. Once they clear customs, they are transported to a distribution center. This initial leg is often referred to as drayage. 

From the DC, the goods are dispatched to their next destination: either the retailer’s own stores, partner stores, or a last-mile carrier sort center. 

The transportation from the DC to any of these destinations is what we call the middle mile.

Can you walk me through the stakeholders involved in the middle mile?

TL: The middle mile has several key players:

• LTL (Less-than-Truckload) Providers: These handle smaller shipments. They pick up goods from the DC and move them through multiple terminals or crosstalks before they reach the final destination.

• Cross-dock Warehouses: These staging locations help manage inventory, keeping DCs from being clogged and positioning goods closer to their end destinations. Some inventory here may already be fulfilled, while other goods await fulfillment.

• In-House Networks vs. Third-Party Providers: Companies with large networks, like Walmart, may operate their own cross-dock warehouses and terminals, while smaller companies increasingly use third-party providers as technology enables better visibility and reliability.

Each stakeholder ensures the efficient movement of goods while balancing cost, speed, and accuracy.

2. Evolution of the Middle Mile

How has the middle mile evolved over the years, especially with the rise of e-commerce?

TL: The middle mile has undergone significant changes:

• Pre-E-commerce Era: Before e-commerce, networks were designed to funnel goods through single injection points that could deliver across the entire U.S. in about five days. Speed wasn’t the priority; coverage and cost efficiency were. Tracking and traceability at the package level were practically non-existent.

• Amazon Revolution: Amazon raised the bar with its fast delivery expectations, influencing both B2C and B2B sectors. Retailers began investing in forward-deployed fulfillment centers, reducing delivery times but driving up costs.

• COVID Pandemic: Speed became paramount, pushing consolidation strategies aside as retailers scrambled to meet consumer demands. High costs and inefficiencies emerged as companies prioritized rapid delivery over optimized logistics.

• Post-Pandemic Adjustments: With demand stabilizing, companies are revisiting consolidation. They’re exploring tech-driven solutions to regain efficiency while maintaining consumer expectations.

3. The Impact of Technology

What role does technology play in the middle mile today?

TL: Technology has been transformative. Here are a few ways how:

• Live Tracking and Transparency: Advances in tracking allow stakeholders to monitor goods in real-time, ensuring visibility from DCs to end destinations.

• Parcel Level Tracking: Ability to track inventory at the pallet or parcel/carton level, allowing companies to make data-driven decisions. This has opened up new possibilities for consolidation. For example, instead of sending ten trucks from a cross-dock to a DC, a retailer might now send one or two optimized loads, significantly cutting costs while maintaining speed.

• Dynamic Routing: Technology enables optimal route selection across various modes of transport, such as cargo vans, box trucks, and 53-foot trailers.

• API Integrations: Seamless communication between stakeholders improves scheduling, reduces delays, and enhances accuracy.

• Automated Notifications: Slack, email, and SMS updates keep all parties informed, reducing errors and improving coordination.

• Scalability: Systems now handle volume fluctuations better, enabling companies to optimize space in crosstalks and transport.

The industry has shifted from rigid networks to flexible, tech-enabled models that reduce costs without sacrificing speed.

4. Challenges in Middle Mile

What challenges do logistics operators face in the middle mile today?

TL: One of the biggest challenges is meeting heightened consumer expectations for fast and reliable deliveries without ballooning costs. 

The middle mile is often caught in the crossfire of competing priorities: maintaining speed while keeping budgets in check. Legacy contracts with rigid transportation providers add another layer of complexity. Many companies are locked into long-term agreements that limit flexibility. 

However, technology is helping to bridge the gap, allowing operators to implement more agile solutions.

5. What’s Next

What’s next for the middle mile?

TL: The middle mile is moving toward a more tech-driven, flexible model. 

Companies are exploring dynamic pay-per-use contracts instead of rigid, long-term agreements. This allows them to adjust to fluctuating demand without committing to fixed costs. 

Third-party networks equipped with advanced technology are also gaining traction, as they offer an alternative to asset-heavy models.

On the transportation side, there’s a shift toward analyzing shipments at the pallet or parcel level, which enables more efficient mode selection. Instead of defaulting to full truckloads or LTL, companies are mixing and matching modes to suit specific needs. 

This flexibility, combined with innovations in routing and tracking, is setting the stage for a more efficient and consumer-focused middle mile.

TL;DR - Key Takeaways for Supply Chain Pros

1. Understanding the middle mile is crucial for efficiency: The middle mile connects distribution centers to retail stores, wholesale partners, or last-mile sort centers. Optimizing this stage can significantly cut costs and improve delivery speed.

2. E-commerce has reshaped the middle mile: The shift from slower, centralized systems to tech-enabled, decentralized networks is driven by growing consumer demand for fast, reliable shipping.

3. Technology is a game-changer: Tools like real-time tracking, dynamic routing, and API integrations are enabling better visibility, faster decision-making, and more efficient use of resources.

4. Flexibility is replacing rigidity: Companies are moving away from long-term contracts and adopting dynamic, pay-per-use models to handle fluctuating demand without overcommitting on costs.

5. Challenges lie in balancing speed and cost: Rising consumer expectations create pressure to deliver quickly, but legacy systems and rigid contracts often hinder flexibility and innovation.

6. Data-driven decisions are unlocking efficiencies: Parcel- and pallet-level tracking allows for smarter mode selection and consolidation, reducing unnecessary shipments while maintaining delivery timelines.

7. Third-party networks are gaining traction: As technology improves visibility and reliability, more companies are turning to third-party providers for scalable and cost-effective solutions.

8. The future is in tech-enabled optimization: Innovations like dynamic routing, automated notifications, and scalable transport systems are paving the way for a more efficient, consumer-focused middle mile.