McKinsey research into mid-mile and last-mile handovers found that waste created at blind handoffs between shippers, dispatchers, third-party logistics providers, and carriers accounts for between 6% and 13% of carrier revenue, with dwell time identified as a primary driver.
That figure is worth reading carefully. The waste is not attributed to warehousing, and it is not attributed to transport. It is attributed to the space between them. What follows is where supply chain inefficiency accumulates, why it remains invisible for so long, and the measures that bring it into view.
What supply chain inefficiency is
Supply chain inefficiency is resource consumed without producing delivered value. Vehicle hours spent waiting, handling cycles that add no transformation, capital held in stock that is not required, and administrative time spent reconciling records that should have matched.
It is distinct from failure. A failure is visible and gets investigated. Inefficiency performs to plan, arrives on time, and costs more than it needed to.
MIXMOVE frames it as the cost of things not being known at the moment they mattered. Almost every inefficiency in a distribution network traces back to a decision made without information that existed somewhere else in the same organisation.
Why the cost stays invisible
Inefficiency does not arrive as an invoice. It distributes itself across lines that each look reasonable in isolation.
It also hides behind ownership boundaries. Idle vehicle time appears on the carrier’s cost base. The dock congestion that caused it appears on the warehouse’s performance report. Neither party sees the whole figure, and no report adds them together.
Most damaging of all, inefficiency becomes the baseline. When a process has always taken four hours, four hours is the target, and nobody asks why it is not two.
Why the tolerance for it has gone
Margin compression has removed the cushion. Deloitte found that 66% of retail executives surveyed plan to restructure their supply chains if input costs rise, which indicates the absorbed cost has reached the point of structural response.
Labour has become the constraint rather than the variable. Where staff are difficult to recruit, hours consumed by rework are hours unavailable for throughput, and the cost is capacity rather than wages.
Emissions have made waste reportable. Under CSRD, transport emissions sit inside statutory disclosure, and under ETS2 they carry a direct cost. A vehicle idling at a dock now produces a figure that appears in a regulated report.
The four places inefficiency accumulates
The handoff. Where responsibility changes hands between parties, systems, or shifts. Each handoff is a point where information is re-entered, assumed, or lost. This is where the McKinsey figure lands.
The buffer. Stock, time, and capacity held to protect against uncertainty. Buffers are not waste in themselves, but a buffer sized for uncertainty that no longer exists is pure carrying cost.
The rework loop. Anything handled twice. Re-picking, re-labelling, re-scheduling, re-invoicing. Rework consumes capacity at precisely the moment capacity is scarcest, because rework peaks when volume peaks.
The reconciliation. Administrative effort spent making two records agree. Every hour spent reconciling is evidence that the underlying event was never captured accurately in the first place.
Why existing systems do not surface it
Warehouse management systems measure activity inside the warehouse. They report throughput, accuracy, and utilisation against their own boundary, and a trailer waiting outside is not in their model.
Transport management systems measure movement between locations. Cost per lane against plan looks acceptable even when the plan was inefficient.
Visibility platforms report position. They confirm where something is and cannot say what it cost to get there.
Each system reports itself as performing well. The waste sits in the gaps between their boundaries, which is exactly the territory none of them owns.
The five measures that expose the cost
Dwell time per vehicle, per site. The single most revealing measure available, and usually the least reported. It converts congestion into a number with an owner.
Touches per unit. Count how many times a unit is physically handled between receipt and despatch. Every touch beyond the minimum is cost and error risk.
Rework rate as a proportion of volume. Not the error count. The proportion of total volume that required a second pass, which scales differently and predicts peak failure.
Reconciliation hours. Administrative time spent making records agree. High figures indicate execution data is not being captured at the point of the event.
Fill rate by leg. Utilisation per movement rather than averaged across the network. Averages conceal the legs where the waste concentrates.
The three layers of a defensible efficiency figure
Execution data. What physically happened, captured at item level as it occurred rather than reconstructed afterwards.
Attribution. Which decision produced the cost, and where responsibility for it sits. Waste that cannot be attributed cannot be removed.
Reporting. The output structured for the audience that must act on it, whether that is an operations review, a financial forecast, or a statutory disclosure.
What the evidence shows
McKinsey attributes between 6% and 13% of carrier revenue to waste at handover points, with dwell time named as a leading driver.
Deloitte reports that 30% of retailers surveyed use AI for supply chain visibility, expected to reach 41% within a year, with 59% of executives anticipating positive return on investment from supply chain AI initiatives within 12 months.
Across MIXMOVE deployments, hub operations have recorded up to 130% higher warehouse hub throughput, up to 80% fewer errors, up to 50% less warehouse space, and up to 58% labour cost savings. Dwell time reductions of 40%, fill rate improvements of 10% to 20%, and up to 15% more billable output have been recorded. That last figure is revenue for work already being performed and previously absorbed, which is inefficiency in its purest form.
At 3M, a decade of collaboration produced a 35% reduction in transport costs, a 50% reduction in CO₂ emissions, and a 90% truck fill rate.
“By using the MIXMOVE software, 3M managed to reduce transport costs by 35% and CO₂ emissions by 50%.”
— Patrick Van De Vyver, Former Head of EMEA Logistics Operations, 3M
How MIXMOVE closes the measurement gap
MIXMOVE HUB OS captures the handoff, which is the layer nothing else owns. Inbound freight is identified at item level on arrival and matched against live outbound commitments before unloading decisions are made, so the sequence is known rather than discovered. Dwell falls because vehicles are not waiting for a decision. Rework falls because exceptions surface while the freight is still on the dock and still recoverable.
Because every movement is recorded as it happens, reconciliation effort falls at the same time. Two records do not need to be made to agree if only one was ever created.
MIXMOVE HUB OS operates alongside an existing TMS, WMS, or ERP as an orchestration layer, or as a standalone platform.
MIXMOVE DI turns that execution record into network-level intelligence. Dwell, utilisation, touches, and service performance are reported from what physically happened, and Scope 3 transport reports are structured to ISO 14083 methodology, which supports CSRD disclosure and ETS2 exposure calculation from operational data rather than estimates.
Inefficiency accumulates where nothing is watching. The handoff is that place in almost every network. Operations that capture it stop paying for waste they cannot see.
Read the MIXMOVE DI overview to see how dwell, utilisation, and rework are measured from execution data.
Frequently asked questions
What is supply chain inefficiency?
Resource consumed without producing delivered value, including vehicle waiting time, handling that adds no transformation, unnecessary stock, and administrative effort spent reconciling records. It differs from failure because it performs to plan while costing more than it needed to.
What does supply chain inefficiency cost?
McKinsey research into mid-mile and last-mile handovers puts waste generated at blind handoffs at between 6% and 13% of carrier revenue, with dwell time as a leading driver.
What causes most supply chain inefficiency?
Decisions made without information that already exists elsewhere in the organisation. The cost concentrates at handoffs, where responsibility changes hands between parties, systems, or shifts.
How is supply chain inefficiency measured?
The most revealing measures are dwell time per vehicle per site, touches per unit, rework as a proportion of total volume, reconciliation hours, and fill rate by individual leg rather than network average.
