This comment was written by Eduardo Lopez-Soriano, Vice President at UPS Capital. The views expressed herein are solely those of the author and do not necessarily represent the views of Modern Shipper or its affiliates.
The e-commerce boom of the past decade, coupled with ongoing supply chain disruptions, has created logistical challenges for carriers of all sizes. Shippers who want to remain competitive must now contend with rising costs and increasing last mile theft and damage rates. In this new environment, the shipping experience has become more important than ever to a brand’s bottom line and reputation.
As carriers try to meet the growing demand for faster and same-day shipping, they often take the back of customers when breakdowns occur. A recent research report commissioned by UPS Capital shows that 83% of the time when a delivery goes wrong, the carrier is blamed. This can end up damaging customer relationships for both shippers and distributors and damaging their brand reputation. And while it can be difficult to prevent unpredictable incidents like portal piracy, transport companies can differentiate themselves from the competition by offering more personalized options that put security first.
The same research report highlights some of the most pressing risks affecting the last mile while identifying opportunities to improve the customer shipping experience.
Meeting same-day delivery requirements increases risk
This research study found that more than half of the retailers surveyed (57%) believe that same-day delivery is critical to their business to remain competitive. Consumers share this sentiment, with 63% of respondents saying they are more likely to shop from a company that offers same-day or next-day delivery options, and a third saying the likelihood is “significantly” higher. To meet these new demands, many retailers have expanded their carrier networks to include gig economy carriers (such as DoorDash or Shipt) in addition to traditional regional and national carriers.
However, working with a variety of carriers who follow different shipping policies has created challenges for merchants looking to provide a consistent, seamless customer experience. This expanded last-mile carrier network poses a higher risk, with 60% of surveyed companies reporting an increase in losses and theft on gig economy carriers compared to traditional carriers. And since the carrier is held responsible for these mishaps in the vast majority of cases, same-day and fast deliveries are clearly an area for improvement and standardization.
The Rise of Portal Piracy
Another major factor affecting the brand’s reputation is the increase in piracy on the porch. Around 210 million parcels were stolen from residential properties in 2021, according to a study by Safewise. To put that number in perspective, there are approximately 122 million homes in the United States today, according to the U.S. Census. That means the average household experiences more than one parcel theft per year. Carriers and merchants that ship direct to consumers are feeling the pain of these losses – over the past two years, UPS Capital has seen twice the loss rate for home deliveries compared to B2B deliveries. Our research shows that 64% of merchants had to pay out of pocket to cover this type of loss, hurting their bottom line and their relationships with carriers. Carriers that can better protect their shipments will prove more attractive to both merchants and customers.
Improving CX through personalization
Personalized shipping experiences have emerged as an opportunity for carriers to provide excellent customer experiences in the wake of these disruptions. In addition to speed of delivery, today’s consumers also seek peace of mind that their shipment will arrive safely through personalized shipping options. In another study commissioned by UPS Capital, 87% of consumers said they would be more likely to shop from a merchant if they could personalize their shipping experience.
As customer concerns about shipping disruptions continue to grow, carriers can offer options that reduce a potentially negative experience, including offering specific date and time delivery windows, alternative secure delivery location options, and real-time package tracking.
Shipping insurance is another way for carriers to differentiate themselves and keep merchants happy. 95% of merchants surveyed in the Presonalized Shipping Experience report expressed an interest in offering customers the option to insure their packages in the event of loss, theft or damage. Providing options like shipping insurance gives merchants and customers more control while reducing expenses for carriers.
Reduce fears on the last mile
While same-day deliveries may only cover a short distance, risks of loss, piracy and damage remain – especially after the turbulent years of recent years. And for emerging gig-economy carriers, their ability to protect packets despite a volatile landscape could hurt or hurt their reputation. In addition to personalization options, it will help provide customers with more ways to protect the items they order online, quelling mounting last-mile fears and improving the overall customer experience.
About the author
Eduardo Lopez-Soriano is Vice President of Marketing at UPS Capital, leading the development of Insuretech solutions to meet the needs of small and medium-sized businesses (SMBs) in the US and elsewhere. Eduardo’s deep understanding of the evolving supply chain requirements of SMBs and the evolving e-commerce ecosystems in which they operate enables his team to develop relevant and timely solutions to mitigate SMBs’ risk and improve their… improve customer experience. Previously, Eduardo spent several years at UPS in a variety of roles including Vice President of New Product Development, where he led an initiative to improve UPS Weekend Services.