The impact of COVID-19 is undeniable. Our personal, social and economic landscapes have shifted dramatically over the last couple of months, and in the face of shifting consumer behavior, businesses across the globe have had to pivot and adapt to meet demand.
As social distancing has become commonplace, it’s no surprise that more and more consumers are going online to get the things they need. Since the beginning of March, ecommerce sales are up 25%. This spike in demand came at a time when supply chains were affected, air freight had slowed, product shortages increased and enormous strain was being placed on shipping carriers to deliver (literally).
Delivering packages to the right place, at the right time and in the right condition is a tall order under normal circumstances, but doing all that while dealing with increased pressure and shifting limitations is a whole different story. So we asked ourselves, how is all this affecting shipping & delivery?
Between frequent policy updates and ever-changing shipping restrictions, it can be hard to get a clear picture of how the shipping & delivery landscape is shifting in real-time, and there are a plethora of headlines attempting to uncover the current state of business, but reliable data that shows how things *actually* are is few and far between.
Due to the unique nature of Route’s products, we are able to analyze the shipping & delivery data for millions of orders every month. So we dug in to see what insights we could pull out to help you navigate the final mile and increase customer confidence during uncertainty.
Here’s what we found.
19.1% increase in damaged packages
Shipping carriers plan months in advance for seasonal spikes to ensure they are staffed and ready for the volume. In this case, there was no time to prepare. With so much uncertainty surrounding timelines, supply chains, product availability and more, this was (and still is) the shipping equivalent of a fire drill.
To mitigate risk, and hedge against the unknown, every major carrier suspended service and money-back guarantees and many added surcharges to specific shipping types. This behavior reinforces the point that carriers were forced into a position that they weren’t prepared for. Increased demand, less space on trucks, tight timelines and less regulation has led to more packages being damaged.
Take a hard look at your product catalog and determine if you’re selling products that may be at higher risk for damage. Even if you don’t think you are, with so many unknown and uncontrollable factors affecting delivery, now is the time to get smart with packaging and fulfillment.
131% increase in stolen packages
Shipping carriers have done a phenomenal job adapting to unprecedented challenges. Packages are getting where they need to go, in a timely manner and for the most part, are arriving safely. But a “successful delivery” for a shipping carrier is not the same as a successful delivery for a consumer.
Route has seen stolen package claims jump 131% between February and March. March also had the highest amount of stolen package claims of all time, including the holidays. Why?
No signature required
- Along with service and money-back guarantees being suspended, major carriers like USPS and FedEx (rightfully so) suspended signature required deliveries. They are requiring drivers to get verbal verification, but we think it’s safe to say packages are being left on porches more often than ever before.
Extended timelines and poor tracking
- Every major shipping carrier has added language to their policies informing their customers that may experience delays in deliveries. Overnight deliveries are basically non-existent and two-day shipping is turning into three, four, five or more.
- With no real-time shipping updates and no delivery window guarantee, consumers have no idea when to expect their packages. Low visibility, coupled with perceived product shortages across the country is leaving delivered packages at increased risk for theft.
Shipping carriers have little control over stolen packages. If a package shows up on the right porch, at roughly the right time, they did their job right? So, when a package is stolen, they rarely cover it. As stolen package rates are climbing, this can put you in a tough position as you will be forced to pay out of pocket to remedy the situation or risk losing your customer… or both.
Route’s premium order protection is free to merchants and will give your customers the peace of mind they deserve, as well as give you the stability you need right now.
Carrier claims breakdown – “big four”
Across the board, every top US shipping carrier has been affected by the increased burden that’s been placed on them. But DHL and USPS have seen the most dramatic changes.
DHL saw a 167% increase in “damaged package” claims
With the largest worldwide coverage, DHL ships nearly 1.5B packages around the world every year. International shipping has been affected greatly over the past couple months – broken supply chains, increased flight restrictions etc. – which have forced carriers to operate differently than they normally would.
These changes in operations can lead to rushed orders, inefficient processes and over-crowded transports which can all play a part in packages being damaged in transit.
USPS saw a 155% increase in “stolen package” claims
Fittingly, no one delivers more in the US than USPS. On average, the USPS delivers over 181M pieces of mail every day.
For everything the USPS does extremely well, they are also notorious for marking packages as “delivered” before they’ve even left the office. Now this surely isn’t the only issue, but combining the increased pressure for home delivery, poor visibility caused by extended delivery timelines and USPS’ less-than-optimal policies has led to cities around the country reporting higher levels of theft.
China Post saw an 1844% increase in claims
The USPS and China Post partner to send and deliver packages to their respective countries. With so much uncertainty surrounding China, supply chains, trade restrictions and more, we saw claims for packages handled by China Post go through the roof.
Since consumers expect to receive free replacements for damaged and stolen packages, carrier delivery can wreak havoc on your bottom-line. Take a close look at your customer demographics and product offerings and evaluate if you’re at increased risk for damaged or stolen packages, review guarantee policies closely (hint: there are none right now) and do what you can to mitigate risk.
23% increase in insured orders
Consumers aren’t just worried about their packages arriving on time, they are worried about them arriving at all. Through the Route platform, we have seen a significant increase in insured orders, and more specifically we have seen jumps in key product verticals:
- Toys and Hobbies – 93% increase
- Smoking and Vaping – 35% increase
- Sports and Outdoors – 27% increase
- Home and Garden – 24% increase
- Apparel – 21% increase
- Automotive – 14% increase
- Health and Fitness – 13% increase
- Food and Drink – 12% increase
As we’ve covered throughout this piece, consumers are rightfully concerned, and they’re taking action where they can to protect themselves, their orders and their money.
Furthermore, consumer worries can vary drastically depending on your industry, and understanding your specific situation right now is key to providing top-notch service. Our partners at ShipBob put together this comprehensive guide for managing ecommerce during COVID-19, with lots of industry specific tips.
Any extra level of security or reassurance you can give your customers right now will pay off exponentially in the long run. Over-communicating, re-working claims and returns policies and providing tools that will keep your customers safe will build trust with your customers and keep them coming back.
Check out our brand communication guide here.
205% increase in tracked packages
There is a lot that can go wrong between purchase and delivery, and as online shoppers are dealing with extended timelines, no guaranteed delivery windows and high theft rates, it’s no wonder that they’re feeling a little extra stressed when a package is in transit.
This isn’t just unique to Route either, according to Google Trends, interest for “where’s my package?” is at an all-time high.
Unfortunately, shipping carriers aren’t always disciplined about updating delivery statuses—and with increased shipments, unclear timelines, and the heightened risk of theft, consumers aren’t sure what to expect.
There is a huge opportunity to win customer affection and loyalty by making your post-purchase communications a key component of your business. More than ever before, consumers are feeling the effects of poor visibility and you can capitalize on it by offering a better experience.
We hope these data points provide useful context as you monitor your business’ health in the coming months. We will proactively be monitoring our own data and release any additional information where applicable.
About the data
- These insights are based on aggregated data from millions of shipments placed between February 1 and March 31, 2020.
- Route tracks orders from every major shipping carrier, but for the purpose of this piece, we decided to focus on the “big four” carriers.
- Other data information;
- Delivery failures are self-reported by Route consumers, so the actual numbers may be larger
- Packages receive “lost” status if they’re never marked as “delivered” by the carrier
- Packages receive “stolen” status if they’re marked as “delivered” by the carrier and have not arrived within 5 days of that status being set
NOTE: Because the data is aggregated from Route customers’ orders, please keep in mind that individual businesses, including Route’s, may differ based on their own markets, customer base, industry, geography, stage, and/or other factors.