With the influx of e-commerce, the last mile can’t always meet its delivery demands.
The report, “Driving E-commerce Last Mile Delivery Success,” from Lateshipment.com, found that FedEx Priority Overnight and UPS Next Day Saver faced the most delays–71.8 percent of late deliveries observed with so-called “Day Definite Services” were delayed by at least a day. FedEx 2 Day was the best-performing service type, with approximately 2 percent of parcel delays recorded across retailer groups, the survey said.
Despite being the most expensive services offered by FedEx and UPS, packages shipped through Priority Express services saw an average delay of 6.94 percent, said the survey of 100 small and medium e-commerce retailers that collectively shipped more than 500,000 packages between January and March 2019.
The apparel and accessories industry faced the most delays, at 22.68 percent, when parcels were shipped through FedEx Priority Overnight. Apparel and accessories had a 6.73 delay percentage overall compared to the average 6.03 delay percentage with the largest shipment volume of 144,595 during the period.
International shipments faced more delays than domestic shipments at about 25.89 percent, which the report said, “is not very surprising considering the challenges involved with cross border shipping include tackling customs clearance, cross border hand-off.”
LateShipment.com has tracked more than 75 million small parcels in real-time, validating more than 130 data points along the delivery lifecycle of every order. With track & trace capabilities for over 40 global shipping service providers including FedEx and UPS, it regularly monitors delivery performance metrics that matter the most to businesses.
For its part, UPS said in reporting second quarter financial results last month that the U.S. domestic segment generated significant volume growth in all products, led by a more than 30 percent surge in UPS Next Day Air volume. The sharp increase in demand for the company’s next-day services was driven by accelerated delivery requirements from e-commerce shippers.
“Demand for faster delivery is a structural change in our industry,” chairman and CEO David Abney said. “Anticipating this change, our additional air capacity and modernized network enabled this growth to have a positive impact on profitability and positions UPS well to serve the growing needs of the market.”
The purpose of the report is to level the “last mile” playing field, helping retailers gain an unbiased and strategic insight into the workings of small parcel shipping. According to Comscore, when it comes to online retail, “free shipping and returns” is a driving factor to complete the sale, the report noted. However, with e-commerce revenue in the U.S. estimated to hit $600 billion in 2019, merchants who simply provide free and fast shipping without any control over brand equity, efficiency and experience in the last mile are bound to be left behind in the retail race, Lateshipment.com said.
“The solution to overcome challenges around shipping and delivery comes both from gaining access to shipping data and making sense of it in a way that gives visibility, unlocks insights and provides optimization opportunities,” Lateshipment.com said. “With this report, we attempt to try and solve both, the lack of data-driven visibility in the shipping industry and the provision of insights to take better supply chain decisions.”
The report notes that with the growing importance of making e-commerce customer-centric, “retailers who put logistics on the frontline when competing for customer loyalty will find themselves ahead of the game.”
This can be accomplished by developing “a comprehensive last mile strategy that combines the brand, operations and the people around whom the business is built.”
The report identifies the “3 Ps” that influence a purchase the most: pricing, pace (at which an order arrives) and precision (in delivering a package when and where a customer wants it). It said “when a shipping carrier fails to meet a delivery promise, unforgiving customers always associate their delivery ordeal with the online store they purchased from and rarely return to shop with them again thereafter.”
This necessitates an active “customer-experience-driven” need for merchants to stay on top of shipments in transit and take proactive responsibility for delivery failures and delays, irrespective of why and how they happen.