1.7 million packages get stolen or go missing every day in the US.
15% of all deliveries in cities fail to reach customers due to package theft or wrong addresses, according to the New York Times. That’s a staggering number.
This amounts of over $25 million in value every day just in New York City.
Did you know that if you receive a package that was delivered to you, but intended for someone else, you can legally keep that package? You are not obligated to return that package to sender. Imagine the massive losses retailer incur, especially for electronics and other high value packages.
With COVID-19 slamming eCommerce and logistics companies with unprecedented volumes, no wonder the rate of stolen and disappearing packages has also skyrocketed 20%.
This problem not only plagues customers, delivery carriers, and shipping insurance providers, it most strongly hurts retailers, merchants, freight forwarders, and distributors.
A number of innovations have begun to address these porch pirate, logistics, and last mile delivery problems: warehouse robotics, delivery robots, Photo-on-Delivery, micro-warehousing, package receiving hubs, package lockers, and many more. One of the lowest hanging fruit through is automating label scanning and paperwork.
We haven’t even yet talked about “reverse logistics”. UPS says that it processes 1 million returns a day in the month of December. This peaks at 1.9 million packages on January 2.
Most freight forwarding, warehousing, and distribution companies still process shipping labels manually. Freight forwarders, package sorters, and distributors can 30 seconds to 5 minutes per package to receive, sort, open, inspect, repack, repackage, and forward the packages to their next destination. Higher volume shipping companies and logistics providers may outsource the process to humans, which causes on average 1 hour to 2 days of delays. The costs from those delays in package processing can easily outweigh the savings in labor costs. Humans still make plenty of mistakes.
Shipping companies admit that insurance is a large cost for them to deal with exceptions, lost packages, porch pirates, damaged items, returns, fraudulent returns, etc. AI and computer vision can lower the costs of insurance claims and lost packages by enabling deliverers to do Photo on Delivery, and recipients to confirm receipt of their packages. This closes the logistics loop. Merchants and senders get assurance from recipients that deliveries were successful.
Most shipping companies don’t dive into SKU-level traceability, but insurance claims need package, packing list, and item / SKU level traceability. Between 1–15% of packages fail to make it to their intended recipient depending on the location, route, season, carriers, and many other factors. That is even more massive waste especially for high value shipments, such as electronics, medical, and B2B shipments.
Even if lowering insurance fees is not the main source of cost savings — merchants and shippers themselves want to lower receiving and returns fraud and mistakes — i.e. people saying their package/items were damaged or never received. That’s a major cost to merchants. Merchants should know that their customers received packages and items down to SKUs, data which is useful for returns, damaged items, claims, and dispute resolution.
Many food delivery companies now have their deliverers take smart phone photos of their packages at the point of delivery — Photo on Delivery — which is critical proof of successful, contactless delivery. It reduces fraud, erroneous orders, or just confusion of where the delivery was dropped. AI can save millions of dollars of fraudulent or erroneous insurance claims, missing packages, and deliveries. To incentivize recipients to confirm receipt by snapping a photo, there are a lot of creative options. B2B recipients especially may care more about SKU level receipt confirmations, as their orders are more complex and valuable. Insurance claims may require SKU-level data, because insurers need to know the package and insurance value.
When a package gets lost or stolen, who loses?
Hint: it’s not only one of the following:
Many people might think that the problem is isolated to the insurer. In reality, the answer is that everybody loses.
The only person who gains is the thief.
Shipping insurance providers will not claim responsibility over any packages that were scanned at the point of delivery. It can take months to be approved or denied insurance claims. It is an extremely costly and time consuming process. Merchants don’t realize that if the product is defective, or if it’s never received by them, there is no recourse. There will be no replacement or refund. The merchant is out of luck. It’s a lose-lose situation, especially for shippers and merchants. Delivery exception management is a big deal for shippers and merchants. It’s time for merchants and shippers to come together to solve this massive delivery inefficiency. How can we get more people to claim when they actually receive their packages? How can we incentivize them to do so? How can we create a service offering that solves this problem? This is a problem that can be solved by us working together. This is an interesting problem to solve and will have significant benefits to all involved in the supply chain.
About Photon Commerce:
Photon Commerce’s package automation solution is the only solution in the industry that can capture shipping labels at super-human level accuracy. Photon Commerce’s computer vision and AI data validation solution collects data from YRCW, LMS, and over 100 other merchants, fulfillment centers, warehouses, freight forwarders, distributors, retailers, 3PLs, importers, exporters, package management, and logistics providers. Its API, scanning, and smartphone scanning technology tracks all of your packages and items across the supply chain network from the warehouse to the door. The data can be from any number of formats: smartphone app, mounted cameras, conveyor systems, scanners, PDFs, or even email or digital receipt.
Photon Commerce cuts down on lost packages and SKUs by delivering super human level accuracy for shipping label and packing list OCR, data extraction, and validation. These all can be used to scan parcels and packages in the warehouse, at the point of delivery, or in transit. The cloud-based API management system automatically verifies and updates data, providing global visibility to merchants, senders, logistics teams, vendors, and customers. With a simple tap, drivers or warehouse receivers are then able to pick up the parcel and scan its label to record the drop off or receiving point. Photon Commerce delivers:
Name, alias, ATTN, unit number, building, and account lookups
Reference and PO number extraction and lookups
Description of contents
Classify contents to categories and SKUs
Automated reconciliation to proof of deliveries, bills of lading, packing lists, and invoices
Fulfilling the need to capture, verify and update information in real-time across the supply chain network with a smartphone app, Photon Commerce enables postal and delivery companies to perform the three daily tasks of scanning, sorting and tracking parcels and packages in a second.
Check out this link for more information. Reach out at firstname.lastname@example.org to get a free assessment on how you can speed up your shipments and reduce exceptions.