CEP and 3PL, Delivery Experience, E-Commerce, Fleet Optimization, Grocery, Healthcare / Pharmaceutical, Retail & CPG
When will my package arrive: The cost of missed deliveries
Jul 31, 2019
5 mins read
It’s 4.35 by the time I come back. I see a note on my doorstep. No! Not that. Anything but that. But alas! It is the infamous ‘Sorry; we missed you’ note. The best-case scenario for me from here is that my parcel is with my neighbour, and hopefully, they are in their house. Otherwise, I will have to book another delivery slot or might have to even drive to the depot. The worst case is if my iPhone has gone missing, and now I have to talk to the dreaded automated customer care services.
The cost of missed deliveries:
But that’s just me and my iPhone’s story. Thousands of people face similar situations every day. The whole point of quick and hassle-free shopping of e-commerce is lost when you have to waste time and energy in searching for your parcels.
Most customers can’t differentiate between a brand or retailer and the quality of the delivery experience. And online customers will very quickly vote with their clicks and choose competitors if the experience at the last mile delivery, which is the single touchpoint for e-commerce, falters.
The missed deliveries don’t just cost customers like me, but they cost the e-commerce and 3PL players as well. According to IMRG, it costs retailers, couriers, and consumers a collective $2 billion a year.
According to a study by Voxware, 69% of customers won’t shop with a retailer if an item they purchased is not delivered within two days of the date promised. 16% of customers will abandon shopping with a retailer altogether if they receive an incorrect delivery just one time, and 14% will do so if they receive a late delivery just one time.
The last mile of the supply chain itself costs 28% of the total transportation costs involved, and with an average re-delivery cost of $15/delivery, missed deliveries are emerging as the new headache for E-commerce and 3PL players.
Another problem with missed deliveries are false reports of stolen or lost packages. According to the 2015 LexisNexis True Cost of Fraud Study, United States e-tailers on an average lose around 0.51% of their annual revenue to fraud. On average, 36% of these activities are attributed to stolen and lost merchandise.
The other factor of concern is the green-house emissions occurring during redeliveries.
According to the EPA, 26% of all US greenhouse emissions are attributed to the transportation industry, which includes logistics and delivery. As the article suggests, at one billion missed deliveries annually, the total amount of carbon emitted due to redelivery is 3,742 metric tons. To put this into perspective, this is the amount of carbon 9,050 trees would have sequestered over a 58-year life span.
So how can missed deliveries be minimized
To understand how companies can reduce missed attempts of deliveries, let’s have a look at the most common causes of them:
- The customer is not present: Much like me and my iPhone’s case, the most common reason for missed deliveries is the absence of the customer. Locus enables time-defined deliveries on customer preferred windows. It also provides with an ETA link, which allows the customer to track his or her orders in real-time.
- Delay in deliveries: Unforeseen traffic conditions, roadblocks, or other real-world constraints can often lead to unavoidable delays from the delivery companies. However, autonomous route optimization software that take real-life constraints into account before generating optimized delivery routes can solve the issue and predict the correct delivery window beforehand.
- Failure while loading: A lot of times the delivery executives can simply miss out on carrying all the deliveries (or part of delivery) while starting the day. In these cases, functions like partial deliveries can save the day and stop the customer experience from becoming worse.
- Wrong address: Sometimes, the address given by the customer is fuzzy or incomplete. Geocoding solutions that can accurately depict the exact coordinates even when working with the most ambiguous addresses can be the real game-changer here.
How technology can help in improving FADR
AI-backed logistics solutions that provide dynamic route plans after considering operational constraints & environmental factors like real-time traffic can help in delivering on customer-preferred time windows to enhance the overall last mile experience.
At Locus, we are helping enterprises such as Big Basket (an Alibaba backed $bn e-grocery firm), Myntra (largest fashion e-tailer in India), and BlueDart (a DHL subsidiary) to increase their FADR leading to a dramatic reduction in logistics costs and increased brand loyalty. Our exclusive features ensure deliveries on customer-preferred delivery windows, accurate ETAs with live track-link for customers, resulting in time-definite deliveries (vs. day-definite deliveries).
To know more about FADR, kindly visit:
By the way, I had to cancel and reorder my iPhone, and this time, it was delivered on-time. Thankfully, the e-retailer was using Locus.
This post was authored by: Sreshtha Das
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When will my package arrive: The cost of missed deliveries
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