Last Mile Delivery Optimization
What Is An Exception In E-Commerce Delivery?
Dec 15, 2022
11 mins read
When Walter Mischel came up with the marshmallow experiment and when Sigmund Freud introduced the pleasure principle – little did they know that their concept of instant gratification will transform e-commerce.
The rapid growth of e-commerce is largely being fuelled by a number of young and tech savvy users who prize convenience and the seemingly limitless product choices available. A survey predicts that e-commerce sales in India will hit the $100 billion mark for the first time in 2023.
The explosive growth in the e-commerce space has put pressure on the e-commerce businesses to satisfy customer expectations. As a result, timeliness in last-mile delivery activity are left wanting, thus giving rise to exceptions.
What is a delivery exception?
Delivery exceptions are circumstances where packages are temporarily delayed in transit due to unexpected events. They are roadblocks that halt the progression of deliveries to their destination.
Why are delivery exceptions important?
Say, you are operating a small e-commerce business and have received an order that must be delivered in three days. Everything goes smoothly, and the product is out for delivery on the correct day. However, at the end of the day, an angry customer calls you to check why his/her package is yet to be delivered.
If you’re getting continuous WISMO (Where Is My Order) calls in this manner, it is definitely bad news. Let’s say you are making a call after office hours to get information from the delivery company, and no one answers your call.
As an alternative, you get hold of somebody from the delivery company, but he has no information. This is because the delivery person is yet to update whether he has delivered or not. Now you are staring at an order cancellation and refund. What’s worse, you have an unhappy customer, who may never come back to you and may tell others of their experience. This affects the brand image of businesses and impacts profitability.
What causes delivery exceptions?
It’s a huge disappointment for your customers if they don’t receive their orders on time. Just like customers, delivery exceptions hurt your business.
When delivery exceptions increase, it eats up your operational costs and hurts your bottom line. Also, it puts your customer relationships under risk. To solve the delivery exceptions or reduce it, it is necessary to know the reasons. Let’s find out what are the root causes of delivery exceptions.
The significant issue with manual processes is its lack of end-to-end visibility, which breeds inefficiency. You should correctly prioritize, schedule and update your orders or re-deliveries.
If you manually update an entry incorrectly or miss updating the entry, such as tracking information, your business finds it out only when the customer complains. Customers will only order from a company that provides a complete visibility of the delivery process.
Delivery Order Incomplete
When you deliver an order to a wrong address or if a customer is unavailable to receive the order, your delivery order is incomplete. After incomplete deliveries, the order returns to the distribution center and the delivery should be reattempted. As a result, it increases your warehouse storage and delivery logistics costs.
Other important reasons for incomplete deliveries are missing documentation, incorrect labeling, inaccurate geocoding, and miscommunication.
Unforeseen events like wildfire, hurricanes, winter storms, cyclones, floods etc makes the routes impassable and keeps drivers off the road. These unanticipated events are out of human control and confined to a region.
These difficult-to-travel routes may even increase the risk of driver accidents on the road which results in late shipments.
When packages are transported during national holidays – either in the region of origin or destination- there will be a delay in delivering it. Shipping carriers won’t operate during these times. As a result of their day-off, your deliveries get delayed and you must catch up with the backlogs of orders after it.
Custom delays like flight delays, customs procedures, the intervention of government authorities or port congestions could result in delays. When your packages are held for a longer time than expected at ports, it results in delivery delays.
Lost and Damaged Packages
When packages are lost or damaged in transit, businesses should cancel the shipment and immediately send out its replacement. This results in serious delays.
How do delivery exceptions impact businesses?
Delivery exceptions are inevitable in this modern world of logistics. When the delivery is delayed, or expected delivery is missed, it frustrates the customers. So, you should build a system and prepare your business to deal with delivery exceptions effectively. But before that, it is necessary to know how exceptions impact your business.
High Costs & Wastefulness
Handling exceptions is both challenging and inefficient. They cost extra and utilize scarce resources that your business could deploy more gainfully elsewhere. And every delivery exception could cause a loss in your revenue. Most small eCommerce and delivery firms rarely have the resources to manage delivery exceptions.
Every extra minute your administrative or customer support staff spends to resolve a delivery exception increases overheads. Also, every additional time your vehicle is run to deliver the same order gets added to the expenses.
Loss of Reputation
A delivery exception invariably leads to poor customer experience resulting in the loss of a customer and potential revenues. Overall, it impacts your business’s brand image.
How to respond to delivery exceptions?
Delivery exceptions are an inevitable component for any business involved in last-mile delivery. It is how a brand responds to it that determines, if delivery exceptions are countered successfully.
If you deal with delivery exceptions as an opportunity to improve post-purchase customer experience, it helps you get back your customers. To enable a delightful post-purchase experience, it is essential to have successful delivery exception responses. So, it is necessary to have proper delivery management software to address the exceptions.
Proper live tracking page
The primary step to achieve end-to-end visibility in the last mile is by having a proper live tracking page. When we say a proper live tracking page, it means having a detailed, clear, and easy-to-navigate page. With a proper live tracking page, you can easily monitor if orders are delivered on time.
Timely notifications and alerts
With real-time alerts and timely notifications, your business can easily find where the delivery exceptions occur and solve them accordingly. By having these features ready, you can minimize the cost of WISMO calls.
Use geocoding to verify the address
With an advanced geocoding system, you can easily convert the unclear addresses and convert them to geographical coordinates. By enabling you to verify the accuracy of addresses, it eliminates the time your drivers lose in searching for customer addresses and avoids delivering the orders to wrong addresses.
Empathize with your customers
The last thing that any delivery business wants is to avoid exceptions. As delivery exceptions are unanticipated, it is crucial to empathize with your customers and be honest with them.
To be honest with your customers in times of delivery exceptions, it is necessary to inform them when it’s likely to occur. So, a seamless communication with customers is critical to ensure customers know about your delivery exceptions and act on it.
With the help of an e-commerce logistics solution, you can inform your customers of likely exceptions through real-time alerts and timely notifications. This enables you to inform the exceptions to your customers when they are likely to occur.
Another biggest obstacle to empathize with your customers is not providing them multiple time slot options. When you’re unable to offer customized delivery time windows to your customers, they may quit your service and move on to your competitors for a lack of convenience. The best way to avoid this is by having an important feature like delivery linked checkout.
By using this delivery linked checkout feature, your business can provide multiple time slots to customers. Based on their choice of time slots, you can easily plan, assign and deliver orders to customers when they are available. As you respect your customer’s choice of time slots and serve them accordingly, your brand loyalty rises.
Data insights + Machine Learning = Increased ability to predict SLA breaches
The success of a last-mile delivery operation depends on how effectively a business fulfills its SLAs. An increase in delivery exceptions increases the likelihood of SLA breaches, which in turn leads to a fall in customer satisfaction and business revenues. The need of the hour for modern enterprise businesses is the improved ability to predict SLA breaches.
Last-mile visibility helps you generate comprehensive data insights on your current and past deliveries. Applying machine learning algorithms to these data insights enables you to find out when you faced the most number of SLA breaches and prepares your business for them in advance. As more data is added, it increases the ability to predict SLA breaches and prepare your on-ground staff and internal teams to deal with them effectively.
Frequent last-mile inefficiencies + time = High operational costs
Last-mile delivery is a business with low profit margins and increasing fuel costs add more pressure to its operations. Frequent inefficiencies spike up your operational costs, especially when you manage a large fleet and deal with massive order volumes on a daily basis. The best way to stop last-mile inefficiencies from eating up your business revenues is by investing in real-time visibility.
By giving a micro and macro view of delivery operations, last-mile visibility helps you quickly detect common delivery problems that lead to shipment exceptions like route diversions, unnecessary delays, excessive idling, high fuel consumption, and so on. All these insights on last-mile inefficiencies enable you to quickly identify the primary cause of delivery exceptions and plan optimal delivery routes accordingly. It also helps you plan and reward incentives for drivers who completed a maximum number of deliveries and saved operational costs.
By generating insights on last-mile inefficiencies, real-time visibility helps you rightsize your fleet, and plan a long-term strategy for saving your delivery costs.
Assists on-demand decisions for last-minute delivery requests
Being an operation manager, it becomes extremely difficult to manage delivery exceptions especially when there is a sudden inflow of last-minute delivery requests. It is a huge challenge for them to handle these high-priority last-minute delivery requests and make effective on-demand decisions for it. Visibility has been the partner behind the success of businesses handling last-minute delivery requests effectively.
With its real-time tracking abilities for delivery operations, having visibility helps you assign last-minute delivery requests to riders based on vicinity, driver availability, Hours of Service (HOS), time window, vehicle capacity, traffic restrictions, and so on. It helps you build a balanced, and realistic order schedule for standard deliveries, rescheduled deliveries, delivery exceptions, and last-minute delivery requests.
Delivery Exceptions: Primary Differentiator for bringing in repeat customers
Whether a consumer returns to you for future purchases or not, depends significantly on how you handle a delivery exception . In a May 2022 survey, 94% of consumers stated that positive customer service experience made them more likely to buy again. Remember that a memorable customer service experience can influence a consumer’s purchasing decisions. Your businesses could build a superior customer experience and increase repeat customer purchases by handling delivery exceptions effectively.
The first and most important step towards managing delivery exceptions is to know how, why, when, and where they occur. Visibility is that magnifying glass for your business that helps you spot the minute reasons for your delivery exceptions. Without the help of technology, it’s increasingly difficult to gain the visibility needed to counter and solve all your delivery exceptions. A Gartner survey predicts that 50% of supply chain organizations will invest in applications that support artificial intelligence and advanced analytics capabilities. So, investments in technologies like Artificial Intelligence have become more critical.
Locus is an integrated dispatch management system that helps manage your last-mile e-commerce operations without much manual intervention. Its dispatch planning, live tracking, and geocoding capabilities enable you to find delivery exceptions and solve for them before it gets bigger. Its timely notifications and alerts to customers through SMS helps you inform in advance if there are going to be any potential delays.
The dispatch management platform also provides the much-needed visibility to on-ground professionals, managers, and enterprise stakeholders. With its advanced Artificial Intelligence (AI) capabilities and live tracking capabilities, you can access timeline views to act quickly in case of route deviations or SLA breaches. It enables you to generate custom reports on on-ground performance like route history, mileage metrics etc. that helps you identify patterns of delivery exceptions and make strategic decisions to manage them.
Is your business struggling to manage delivery exceptions in the last mile?
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What Is An Exception In E-Commerce Delivery?