Interested in growing your business…while also tightening up the slack?
If you own the company or are responsible for the bottom line…then the answer is undoubtedly, YES.
Whether you are a new start-up business, an entrepreneur trying to get your latest product into the right hands or a business that’s been growing for years, the ultimate goal is to continue to grow…
…while also avoiding the ever-daunting paranoia of a poor review on Google or social media due to shipment issues that are out of your hands in the first place!
And equally important — having to accept returns or provide discounts to keep the customer happy — which ultimately affects your profit margins.
Avoiding delivery exceptions is a huge part of streamlining the success of your company by avoiding overall customer support hassles, wasted time and money and of course, the dreaded negative online review.
So, What Are Delivery Exceptions and Why Do They Occur?
A delivery exception, as described by Fedex, means that your package has been delayed due to unforeseen circumstances while in transit. This could be anything from a flat tire to a natural disaster.
A delivery exception could also just simply mean you made your purchase during a holiday season and the package may be delayed due to holiday hours.
BUT, this vague description (for the average online consumer) could also indicate that their package is missing certain documentation or does not have the correct shipping information.
It could also mean the recipient of said shipment was not home to sign for the package or even worse…it was LOST.
It is important however to keep in mind that even if a purchaser’s shipment status is set to “delivery exceptions’, it does not necessarily imply their package will not be delivered on time.
Shipping companies like FedEx, UPS and USPS do their best to avoid being bogged down by undeliverable packages and avoid delivery exceptions when possible.
But, when these shipping carriers are responsible for large and small companies’ daily sales shipments, personal shipments and everything in between – even something as small as a flat tire can cause quite a delay.
Common delivery exceptions:
There are many causes for delivery exceptions and they are important to understand, but even more critical is how to deal with those issues as they come in order to ensure the best customer experience. Below is a list of common delivery exceptions:
According to Fedex and UPS, there are six main causes for delivery exceptions. Those include but are not limited to:
- Heavy Package Volume
- Weather and other service disruptions
- Technology and other service updates
- Air cargo capacity
- Address unknown
- Signature not received
So, let’s talk about each of those in more detail.
1. Heavy Package Volume
The 2020 Covid Pandemic shutdown taught people a new way to shop. Online shopping boomed after March 15th, 2020.
Amazon, one of the largest companies to reap the benefits of the online shopping trend, reported a 220% increase in sales after the pandemic with a 44% increase in the first three months of covid compared to those same months in 2019.
Social media shopping is also on the rise with a 1416% traffic increase just on instagram alone according to new statistics.
This online shopping trend has left brick and mortar stores no choice but to jump on the e-commerce bandwagon as well in order to stay relevant and competitive.
And as expected, the rise in online shopping due to social media ads, influencers and trends has created a logistics clog. While shipping companies have had time to shift to account for this new trend since 2020, it can still create heavy package volume issues…leading to delivery exception statuses.
2. Weather and Other Service Disruptions
Inbound and outbound shipments can take a hit when weather, natural disasters and other disruptions occur. The safety of logistics employees should always be top concern.
Unfortunately, seasonal storms, tornados, flooding, earthquakes, forest fires and flooding can create such devastation, a package may be permanently lost or destroyed.
When an area of the world is suffering from a natural disaster it may not even click with a customer waiting on a shipment where weather is not even a consideration in his/her part of the world.
When your company is experiencing severe weather conditions that are probably causing a delay, it is helpful to alert customers of this issue if possible. Providing that transparency ahead of time allows you to avoid angry emails and frustration and instead brings about goodwill, understanding and trust from your customers.
Service disruptions also occur and affect certain regions of the world. As of January 2023, the FedEx website has an active service disruption notice on their website. There is a current temporary suspension for all of Russia and Belarus. Due to the war in Ukraine, and its unsafe conditions, locations in that country have also been temporarily shut down and all inbound and outbound shipments have been temporarily suspended.
Keeping up to date with current events will keep you aware of these types of shipping disruptions as well — leading to less chaos and confusion in the shipping process for your business.
3. Technology and Other Service Updates
As with all technology, occasionally systems have to be rebooted and/or updated and since you are more than likely reading this blog from your smartphone or computer, you understand as well just how fickle technology can be.
When these technological errors or updates occur, logistics companies work as quickly as possible to reboot and resolve delivery exceptions.
4. Air Cargo Capacity
In recent years, air cargo capacity has become an issue for logistics companies as well. So much so that FedEx has added that to their list of reasons for potential causes for delayed shipments.
The pandemic in 2020 was the onset of this air cargo capacity issue and now with flight cancellations becoming more frequent in 2022 and 2023, this delay is still felt worldwide.
While shipping companies are working on adjusting to this obstacle, it is still considered problematic and could be the reason for a shipment status to read “delivery exception.”
5. Address Unknown
An undeliverable address is quite common and can definitely affect the likelihood of the shipment being delivered into the right hands.
Address issues could be anything from wrong address, illegible printing or incomplete address — just to name a few. It’s a very common issue that can lead to lost or delayed shipments.
6. Signature Not Received
Failing to get a signature from the recipient of a package is also a quite common reason for a delivery exception. Some packages do require a signature and if the signer is not at home at the time of delivery, the package cannot be left behind and marked “delivered.”
How Do Delivery Exceptions Affect Your Business?
There is no denying that delivery exceptions can and will affect your business. Putting processes in place to avoid or minimize these issues as best as possible and knowing how to respond when delays do occur is key.
As a business owner or manager of a business, this is the bottom line.
WISMO
The acronym, “WISMO” stands for “where is my order,” is an acronym that affects all e-commerce retailers. Providing easy tracking and fast shipping is critical for an e-commerce retailer.
Consumer expectations are higher than ever due to large corporations like Amazon, Walmart and Target. These retail giants are able to promise same-day or even next-day delivery for many purchases due to thousands of employees, logistics teams and inventory on hand.
Smaller e-commerce stores have been forced to run on a much smaller budget and team, but the customer expectation remains the same.
“Where Is My Order?”
These four separate words can easily become one four-letter word!
And what’s worse is, with technology, it’s not limited to a phone call or even a question regarding an order delay. It’s an email, direct message on Instagram/Facebook/Twitter, a live chat or even an SMS text message!
With never-ending ways for customers to contact you, all of your energy goes into a black hole — tracking down orders and other customer service related issues from every possible platform needed to compete with the retail giants.
Not only is this a frustrating cycle that can drain the life out of a small business, it also costs money.
Loss of Revenue
So, on that note…let’s talk about a loss of revenue.
Convenience is key in today’s society.
Buyer’s are accustomed to the big retail giants mentioned earlier like Amazon.
With easy tracking, returns and same-day to a max of 3 days delivery for most products, customers expect convenience.
In a recent study, it was found that 97% of potential customers have backed out of a purchase simply because it wasn’t convenient.
Even more alarming, 73% of customers have said that after one negative customer experience, they will consider switching to your competitor!
So, if a customer goes to your website, adds an item to their cart and then gets to the checkout page and is inconvenienced or the shipping process is not fast enough, 97% BACK OUT!
And if you have a great checkout page where people easily check out, purchase your product and then have a poor experience via a WISMO conversation, 73% will consider switching to your competitor!
A recent Forbes study shows that once a customer purchases a product, the excitement sets in and they will (on average) check the status of the package they are tracking 4+ times! And if there is an issue with the order and it is set to “delivery exception” status, they will start contacting you.
WISMO messages are costly to your company because time spent with a customer answering questions regarding an order can cost you, the owner, anywhere from $6 – $12 per WISMO call.
Take the average of WISMO calls per week that your team currently handles and multiply that by an average of $9 per call, and we’re sure it’s a number you will want to do everything you can to reduce — and, if possible, eliminate.
More Customer Support Needed
An increase in WISMO calls will likely require an increase in customer support hires.
Having to hire additional staff to answer questions regarding delivery exception questions can be costly and frustrating for an employer.
But, if you can decrease the number of calls regarding order tracking and other customer service issues while also increasing prompt response time and helpfulness to your customer base, you will actually outperform your competitors and increase your profit margins.
It’s a well known fact that it is less costly to keep an old client than to retain a new client. As discussed above, 73% of consumers have stated that they would consider immediately switching to a competitor after just one poor customer service encounter.
Customer service is so important to the average American consumer that 65% of the population is willing to pay 5% above market value for their purchases if outstanding customer service is a guarantee.
Coincidentally, 89% of companies providing “significantly above average” customer support outperform their competitors financially. So, while it may seem like a budget hit to increase customer support and pay more to ensure ease of shipping and tracking, it actually is proven to increase your profit margins by a great deal!
Discounts Given To Make Up for Delivery Exceptions
The big retail giants are also able to offer discounts to avoid negative customer interactions. Amazon is known to apply $5, $10 and even $20 credits to customers’ prime accounts due to delivery exceptions.
While this is great for the amazon prime customers, if you are a smaller business with a leaner profit margin, cutting into the margin can really hurt. And because these bigger retailers can afford to offer discounts and freebies to de-escalate angry customers, you are expected to do the same because it’s become common practice.
Avoiding delivery exceptions is the only way to ensure that these discounts are far and few between.
Negative Reviews Online
Social media comments can really make or break a small business. Delivery exceptions are going to occur. It happens. And when it does, it’s imperative to communicate transparently with your customers to avoid those negative reviews.
People behind a keyboard can be ruthless, and in an increasingly impatient world, delivery exception statuses can create a social media nightmare.
As discussed above, it’s less expensive to keep a current customer than to find a new customer — but, if negative reviews are posted all over the internet, it can be a daunting task either way because those reviews can ward off both old and new customers immediately.
So, How Can You As A Retailer Fight Delivery Exceptions?
E-commerce retailers have begun to look elsewhere for easy storing, shipping and delivery of their products — reducing time and overall costs.
Customers have clearly made their expectations known — convenience, open communication and tracking availability is key to the purchasing experience for today’s buyer.
Locad is a service that truly provides peace of mind to E-commerce businesses. This company streamlines shipping and delivery processes by providing order management systems that allow for faster picking, packing, shipping and tracking — while also allowing you and your customers to be in the loop during the whole process. This helps you easily solve transparency oversights.
Click here to learn more about Locad’s features and pricing.
