Enhancing Last-Mile Logistics: AI-Driven Fleet Optimization, Mixed Reality, and Large Language Model Assistants for Warehouse Operations

Abstract

Due to the rapid expansion of e-commerce and urbanization, Last-Mile Delivery (LMD) faces increasing challenges related to cost, timeliness, and sustainability. Artificial intelligence (AI) techniques are widely used to optimize fleet management, while augmented and mixed reality (AR/MR) technologies are being adopted to enhance warehouse operations. However, existing approaches often treat these aspects in isolation, missing opportunities for optimization and operational efficiency gains through improved information visibility across different roles in the logistics workforce. This work proposes the adoption of novel technological solutions integrated in an LMD framework that combines AI-based optimization of shipment allocation and vehicle route planning with a knowledge graph (KG)-driven decision support system. Additionally, the paper discusses the exploitation of relevant recent tools, including large language model (LLM)-powered conversational assistants for managers and operators and MR-based headset interfaces supporting warehouse operators by providing real-time data and enabling direct interaction with the system through virtual contextual UI elements. The framework prioritizes the customizability of AI algorithms and real-time information sharing between stakeholders. An experiment with a system prototype in the Apulia region is presented to evaluate the feasibility of the system in a realistic logistics scenario, highlighting its potential to enhance coordination and efficiency in LMD operations. The results suggest the usefulness of the approach while also identifying benefits and challenges in real-world applications.