During a recent customer meeting, our client requested access to the delivery statistics of the carrier to use as a benchmark for their service level agreement. Although I shared the information with them, I also conveyed my scepticism towards these statistics, as they often do not accurately reflect the reality of the situation. In this blog post, I would like to shed some light on the truth behind quoted delivery success rates on next day and international deliveries.
Statistics Versus Outcome
Firstly, the carrier delivery statistics versus actual outcome can look very different. This is based on how the carriers deem a delivery to be successful or not. For me a successful delivery means exactly that, a 100% signed for and delivered item. However, a carrier may not deem it to be an exception if they have left the goods as requested, or it has been carded. Your customer may phone up saying they haven’t received their goods and there’s no proof either way as to whether they’ve been delivered or not. Different statuses mean different things to different people – carded isn’t necessarily a failure to a carrier but to your customer who still hasn’t received the goods the order isn’t delivered either.
I would also say that sometimes the carriers overstate the failure rates. We recently had a big distribution before Christmas of 1,600 consignments via Yodel in one night and only fifteen of them were problematic. That’s an incredibly low statistic in terms of outbound delivery failure and a great service from our supplier.
What should you look for as acceptable exception rates? I think as a rule of thumb 1.5 to 3% is about right. Unless you’re using some of the lower grade carrier networks whereby, I know before Christmas there were delivery statistics anywhere between 75 and 87%. What does that mean? This implies that 25%, or one out of every four deliveries, is experiencing an error. We don’t have any of those carriers on the Despatchlab platform so you won’t ever suffer those statistics but if you are using those carriers, you will know exactly what I am talking about.
What should you budget for in performance? The opposite of that – that 98.5% of your deliveries will be seamless but in 1.5 out of 100 some intervention is needed. Now a great logistics partner can provide this exception management for you and can also be empowered to do much of the problem solving so that you don’t even have to get involved. For example, we have a deal with one of our clients that if a consignment is lost and it is worth under £35 then we simply replace the consignment in full and submit a claim to the carrier on their behalf, so they don’t have to get involved at all. While you have the flexibility to establish your own boundaries in this regard, it’s important to recognise that the more autonomy you grant to your logistics partner, the less involved you will be in the process.
Same day versus next day
One of the most important things to clarify is what to send next day delivery and what’s better to go same day courier. If you remember that next day and international deliveries do have a failure rate, then don’t send anything on next day delivery that is particularly time sensitive i.e., a tender or irreplaceable such as granny’s ashes (true story) or very expensive (engagement ring). In cases where the opportunity cost of the goods not arriving exceeds the cost of same-day delivery, opting for direct delivery with same day is strongly recommended. Next day and international carrier systems are incredibly cost effective and efficient. But many hands touch your consignment, and the more hands equals the more margin for error, so this must be budgeted in.
Proactive Exception Management
What do you need from your logistics provider to mitigate against all of this? Proactive exception management. Here at Diamond, we have the ability to detect issues before your consignee becomes aware of any delays. By prioritising exceptional customer service and staying ahead of potential problems, we are able to resolve 99% of issues and minimize the impact on your client base. If you keep people informed, arrange replacement goods, and communicate with them about the next delivery people are mostly reasonable. If you’d like more information on how we can support your business managing your delivery statistics, then get in contact today. Call us on 0333 567 5888, email firstname.lastname@example.org or simple complete the form below.