Better late than never. According to estimates from PwC’s strategy consulting business, the number of packages delivered annually in the U.S. is expected to rise from 11 billion in 2018 to 16 billion by 2020.
In its first report released this week, LateShipment.com, a logistics technology company for e-commerce retailers who ship with carriers such as FedEx, UPS, DHL and USPS, outlined the importance of last-mile delivery transparency, as well as the existing inefficiency (and unavoidable delays) that plague customers.
Some firms, though, argue that delays could be better managed to avoid scaring the customer away based on one faulty delivery.
Along with LateShipment.com, other start-ups have launched to focus on remedying the last-mile delivery for e-commerce retailers, including Los Angeles-based Shipsi, a technology solution utilizing last-mile courier networks in more than 600 cities; Shipt, an online same-day delivery platform owned by Target.com. As a service that aims to predict parcel delays in real-time and prevent delivery mishaps from affecting one’s customers, LateShipment.com works with brands such as Michael Kors and Toys ‘R’ Us.
Tracking more than 500,000 packages between January and March from 100 e-commerce retailers, some 6 percent of all packages were delayed. For context, a healthy metric for apparel retailers would generally be around the 4 percent mark, rising up to 8 percent during busy holiday seasons.
With this report, Orlando, Fla.-based LateShipment.com hopes to inform e-commerce merchants with “neutral data” and “inspire action” in improving their last-mile delivery infrastructure. This means monitoring shipments in transit, proactively communicating with customers and mitigating a spiraling problem before it impacts their customers, as part of a larger initiative to improve customer experience.
Sriram Sridhar, founder and chief executive officer of LateShipment.com, ascribes a codependency between retailer and carrier as one that leaves out a third participant — unbiased data, saying: “It almost impossible for a merchant to evaluate shipping carrier performance or control their own last mile.”
Is faster always better?
Not necessarily, especially if a customer is pressed to select between FedEx Priority Overnight and UPS Next Day Air — both of which received the highest percentage of delays across all retailer groups in the report, (faster shipping methods usually pose higher probability of potential delays due to tight transit windows and plane hopping). And the apparel and accessories industry faced the most delays at nearly 22.7 percent, when parcels were shipped through FedEx Priority Overnight, according to the report.
Due to tight transit windows and plane-hopping of parcels, any delays or misses in the plane-hop can result in a delay, leading to a higher percentage of delays, as Sridhar informed. Across markets, the U.S. saw the most delayed shipments.
Sridhar perceives “the easiest way to achieve such change would be for merchants to enforce better accountability that forces shipping carriers to improve efficiency in the interest of their own bottom line.”
It’s no surprise that brands and retailers have maintained a distance once the package leaves the distribution center or retail store.
“Brands and retailers have traditionally considered their job to be done when a shipment leaves their warehouse on time,” said Sridhar. Outlining an increased focus on overall customer experience — placing greater emphasis on the last-mile delivery may help satiate one’s bottom line and not lose loyal customers because of delayed shipments.
As the holiday shopping season gleams in the not-so-distant future, last-mile may play an important role in mitigating customer headaches.
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