In Last-Mile Delivery, Returns Are Our Problem
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Apr 04, 2023
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Your brand is at stake with how returns are handled
It’s two weeks before Christmas, and a customer logs on to your online site to order a gift for a significant other. Your gift is pulled in the warehouse, packaged, sorted, and shipped to your last-mile carrier. The package is routed to a driver at the sortation center and loaded up. The driver does his route, but the address for this package delivery isn’t correct, and the driver can’t deliver it. So the package ends up back in the warehouse. Two days later, with no gift in hand, the customer cancels the order and orders a similar product from Amazon or another competitor.
You’ve just lost a customer, probably for life.
We could tell you some stories. About deliveries gone wrong, packages going to the wrong location. Cringe-worthy issues like a birthday cake not arriving for a 7-year-old’s birthday party.
We all know that occasionally the right package does not make it to the correct location at the right time. Accenture says this happens about 5% of the time (we think that’s a little high, but who are we to argue with Accenture). If you’re shipping 10K packages a month, that’s 500 packages that don’t make it on time. Every re-attempt increases cost, but the loss of goodwill with your customer and reputational damage to your brand is much more significant than the increased delivery cost. That 7-year-old’s mom probably posted on all her social media sites.
Returns usually occur because some piece of information is incorrect:
- Wrong address or zip code
- The routing app can’t resolve an address and takes the driver to the wrong place
- Missing or inaccurate gate code or building access code
Sometimes, the address doesn’t exist in the driver routing app for new buildings. Sometimes customers leave special instructions that drivers cannot follow (i.e., “Where is the mailroom?”). The result is that the driver is left with an undeliverable package, at least temporarily. What do you do now?
A hill to die on
Last-mile carriers live or die on the hill of exception handling, including returns. The ability to satisfactorily handle all exceptions begins before they occur. It starts with understanding the shipper’s needs:
- Does the shipper want a single or multiple re-attempts, or no re-attempts at all?
- Does the shipper want the carrier or driver to reach out to the customer directly if more info is needed (access code, address correction, special instructions), or
- Does the shipper want to manage that communication themselves?
A carrier should be flexible enough to accommodate exception handling to align with the shipper’s needs.
Carrier system interfaces should be robust enough to keep the shipper in the loop at every step, from package intake to delivery, and allow the shipper to intervene in exception handling. The shipper should know there’s an issue while the driver does and should know why the package can’t be delivered.
A carrier’s systems and communications should promote transparency. Whether the driver is communicating directly with the customer or the driver notifying dispatch of an issue so dispatch can intervene and contact the customer, it should all be visible to the shipper. The more the driver and carrier can make corrections and get the package closer to the door, the less likely the customer is to post all over social media what a horrible company you are because you can’t get their package when they wanted it.
The key for the carrier is flexibility to handle whatever situations arise. Drivers need to be flexible too. Sometimes it’s just a matter of slowing down, taking an extra minute or two to get past an issue, and make sure the package gets to the customer. And sometimes, customers have unique needs due to age, medical conditions, or physical limitations. The package needs to be delivered in a certain way, left in a specific spot, etc. It’s essential that carrier systems allow the shipper to communicate special instructions and that drivers follow through to prevent customer service calls.
In the future, we expect exception processing to become more proactive. For example, a Delivery Service Provider we partner with tracks planes and freight across the country, anticipates when a medication shipment will not make it through its cold chain, and intercepts that package before it enters the warehouse to expedite delivery. So they’re actively preventing exceptions, which is pretty cool if you think about it. That’s one example, but the possibilities are endless.
For carriers, dealing with exceptions starts with an attitude – a willingness to take a little (and sometimes a lot) of extra time and effort to resolve issues. Frankly, we’re a bit perplexed by some in our industry’s lackadaisical or even resistant attitude toward fixing exceptions. Some carriers behave as if it’s “Not my problem.” Why bother? Just send it back and let the shipper sort it out.
In last-mile delivery, it is our problem. As an extension of your brand, every exception is our problem. It’s not just a package; it’s someone’s anniversary gift, someone’s new outfit for date night, or some 7-year-old’s birthday cake. It matters to the person who ordered it, and it should matter enough to your carrier for them to go out of their way to get it to your customer.
A carrier worth your business will work with you to implement processes that meet your needs around exceptions and will put in the effort to make those processes work. They’ll own it. If your carrier doesn’t respond that way, find a new one.