5 Ways Retailers Can Make Sure Customer Packages Arrive on Time

The year 2020 is likely to remain in our memories for the rest of our lives. We saw an astonishing number of ecommerce sales thanks to consumers preferring to stay in and shop from home. With those sales came an equally astonishing demand for deliveries that, for one reason or another, couldn’t keep schedule with demand. For consumer-facing retailers, understanding how to get products to consumers’ hands on time was an essential part of managing the brand and making a good first impression.

Data from last-mile technology vendor, Convey, finds that UPS ranked first for on-time deliveries during the holiday rush (Dec 11 – 17 and Dec 18 – Dec 24) when compared to FedEx and USPS. UPS delivered 85% and 86% of packages on time, in respective weeks, that’s compared with 69% and 76%, respectively, for FedEx and 55% and 58% for USPS. In fact, USPS may be stifled with holiday packages until the end of March because the company had to shift to a last in, first out strategy to deliver packages meaning the packages that came in first will be buried under the pile for months to come.

So, how can we understand the various reasons for this massive backlog of package deliveries to customers, and what can retailers do to make sure that delays of this scale don’t damage their brand? Let’s look at the 5 ways to make sure your customers’ packages arrive on time:

1. Keeping a Well-Stocked Inventory

This might seem obvious but most companies around the World utilize a “just-in-time” supply chain method to distribute their products. This means that they keep a close eye on their inventory using various forecasting methods, and when supplies start to run low, they place a new order with the manufacturer to replenish their stock. This helps suppliers keep the inventory holding costs low. Unfortunately for them, when the pandemic hit China, the manufacturing link in the supply chain got obliterated. With supplies running low and no manufacturers to replenish that inventory, the disruption was so great that we are still seeing its impact today. In addition to making popular products difficult to source, the fundamental economic principle of supply and demand has greatly affected prices as well. The sudden increase in demand for shipping, for example, caused companies like UPS and FedEx to announce peak season surcharges as early as August. This price increase impacted the retailers’ product margins, so naturally they offloaded the additional costs to the end consumer. Instead of relying heavily on just-in-time manufacturing, my recommendation to retailers and their distributors is that they keep some inventory on hand. They should utilize flexible, on-demand warehousing space from companies like Ware2Go, STORD and FLEXE, to reduce their inventory holding cost while making sure they have the supply needed to fulfill customer orders.

2. A Store Redesign

Many retailers had to post deadlines for guaranteed Christmas delivery last year. These typically appeared as a banner at the top of the page saying, “Order by December 14 to guarantee delivery by Christmas.” While many sellers promised delivery by Christmas, some had a more refined last-mile delivery and fulfillment strategy than others, which gave them as many as 10 extra days of selling by not having to abide by the deadlines placed on them by parcel companies. Some partnered up with companies like OneRail, a last mile delivery management software, to offer store-to-door deliveries, while others partnered up with companies like Position Imaging, an in-store staging and fulfillment platform, to offer services like Buy Online Pickup/Return in Store and Curbside Pickup. Who knew the benefit of having a brick-and-mortar presence could work in the benefit of retailers? Most experts. That’s right, brick and mortar is not going away. The brick-and-mortar retailers who got crushed during the pandemic had long become obsolete because their executives wanted to cut costs to preserve margins rather than innovate. My recommendation for companies that have a brick-and-mortar presence is to redesign the store and make it the focal point of commerce by delivering from the store and incentivizing customers to pick-up/return at the store to reduce shipping costs.

3. Inevitable Weather Delays

Snowstorms and other extreme weather systems create an obvious problem for shipping. Trucks can’t drive through two feet of fresh snow, and airplanes won’t land in overly gusty winds. In fact, extreme weather conditions during the notorious 2012 holiday season caused UPS, FedEx and USPS to delay so many packages that it led Amazon to accelerate plans for its own distribution network. Since then, shipping companies have gotten a lot smarter about navigating weather systems. While at UPS, I helped develop the prototype of a prescriptive analytics algorithm that would detect large weather systems and prescribe a new route to redirect packages and prevent delays. This AI based algorithm has since evolved into the Network Planning Tool (NPT) that helps track package locations and which hub destinations are heavily impacted by weather patterns. With this tool, UPS can reroute packages around weather systems, while also identifying hubs that are subsequently impacted by an influx of additional packages and avoid those bottlenecks too. It’s an overall more efficient system, and it explains why sometimes packages don’t take the most map-logical journey from their destination to a customer's house when looking at the tracking number. Still, weather is an inevitable force of nature that can slow things down. My recommendation is to place the inventory closer to the end consumer. Leverage your local, physical presence that has a very small chance of facing severe weather systems. If you’re only selling online, you can leverage the flexible warehousing platforms I mentioned before, because they also provide fulfillment services such as picking and packaging. Being close to the end consumer will also help you decrease your shipping costs.

4. Driver Challenges

Many of the most challenging delivery issues happen not in the last mile of the delivery, but closer to the last 50 feet. For example, delivering to multi-tenant buildings is a time-consuming, challenging task. There’s no easy way for drivers to enter the building vestibules. They typically try to tailgate the residents to gain entry, which is extremely creepy, or buzz the recipient’s doorbell and wait for someone to open the door. Sometimes they even carry around an abundance of door keys, which screams “liability” to me. An average driver loses about five to ten minutes per stop trying to figure out how to get inside. Finally, when they give up, they usually leave a note on the door that they will reattempt to deliver another day and take upwards of one hundred packages back to the hub during peak season. That’s possibly one hundred unique recipients, at a single building, whose packages have just been delayed and whose experience with your brand just got tarnished. This mishap keeps additional packages in circulation, causing unnecessary congestion in the network, and all your strategic planning to deal with the peak season go out the window.

By the way, this is the same reason why a package delivery status also changes from “out for delivery” to “package received at carrier facility.” Also, it’s an unfortunate fact that the urbanization of our society is going to continue, and more and more consumers are going to be turning to online shopping. So, I predict this problem will grow, but not all hope is lost. While at UPS, my team partnered with Latch, a smart access platform for multi-tenant buildings to provide the UPS drivers keyless entry into buildings. We conducted a pilot in New York City and the results showed a 48% increase in packages being delivered on first attempt, preventing delays caused by reattempts at the buildings where we tested the technology. The pilot was so successful that not only did I expand the partnership to 10 additional markets, but I also developed a comprehensive strategy for Access Control Technologies (ACT) to be used in other verticals. My recommendation to the delivery companies would be to do more when it comes to enhancing the last 50 feet of the delivery experience. The lack of initiative by the delivery companies is causing retailers to own the delivery experience with the launch of Amazon Key, Walmart InHome and Target’s acquisition of Shipt and Deliv.

5. The Unknown Address Problem

There’s a tradition at UPS that every holiday season, corporate employees volunteer to go out and help deliver packages during crunch time. I went on a similar ride-along, as a driver helper, during the busy holiday season to get a taste for the kinds of situations drivers deal with on their routes. What stood out to me more than anything else was how much confusion was caused by barely visible or missing house numbers. They were faded, obscured, too small, missing or otherwise not visible at night. It was the winter solstice, the sun had set at 4 p.m., and we were only halfway finished with our route. We were going to have to deliver the rest of the packages in the dark. By the way, in some parts of the world, Norway, Sweden and Finland, the sun sets as early as 2:49 p.m. As homeowners, when we switch our porch lights on in anticipation of a delivery, we imagine it would shine directly on the house number and that the delivery driver would know this is where they need to deliver the package. In fact, this causes drivers to suffer from “porch light blindness.” I saw this firsthand on my ride along. While I was trying to read the house numbers, I was staring directly into the porch light, because typically the house number is placed near or underneath the porch light. The problem is, when you’re staring directly into the light, you may as well just search for the house number with your eyes closed because you can’t see anything else. Staring into the light at night is sort of like staring into the sun during the day. When drivers are not able to find the correct address, they must take the package back to the hub. This causes a package to be delayed. A customer can either go pick it up themselves or have the driver attempt to deliver it again on another day. The most helpful thing that can be done to help avoid package delays and ensure that packages get delivered on time and to the right address, is to make sure a home address is visible, day or night. My recommendation is for companies to consider implementing the usage of eLiT, a back-lit LED address light box with large, digitally printed house numbers that can be easily seen and read. It has a dusk to dawn timer, so it automatically turns on at night, and when the driver comes to make a delivery, it begins to flash on and off to grab their attention. It even helps the delivery drivers to find an address by routing them to the precise location of a resident's house.

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Muhammad “Mo” Cheema is helping to revolutionize the logistics industry as an Advisor with Strategic Innovations, LLC. He also had a highly influential career at UPS, where he spearheaded several new product and business concepts, developed a strategically aligned product road-map to streamline the global last mile delivery for drivers, and routinely engaged with the senior level executives to influence investment decisions.