Failed deliveries cost industry €1.85 billion ($2.08) every year

May 21, 2019 by
Nico Hoeijmans

returnsResearch done by NetDespatch and IMRG shows that failed deliveries have huge financial impacts for all three of the main groups involved; the customer, retailer and carrier.

There might be more reasons why the delivery does not add up to the customer’s expectations. The research only focused on four of the most common delivery failure scenarios, such as:

  • Failed first delivery – re-delivery is required.
  • Failed first delivery – collection by the customer.
  • Late delivery – not delivered within the expected time-window.
  • Order lost – a replacement has to be sent.

The estimated cost of the first three groups combined (failed first-time, on-time, every-time delivery) turned out to be over 1.85 billion euros in 2018.

Improvement

Statistically speaking, the rate of failed deliveries has improved over the past couple of years. The average level of failed attempts was 4.65% in 2014. From March 2018 until February 2019, this rate has decreased to an average of 2.77%.

This decrease is mainly due to the introduction of solutions that improve the delivery process. Some examples of these solutions are the prediction of delivery time, deferring delivery to a more convenient location or time and click & collect.

However, the costs of these failed deliveries still remain high due to increasing customer expectations - to which the retailer keeps adapting.

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