Delivery

Late Shipments, On The Last Mile, Recognized Before The Fact

In the last mile, in carrier we trust.

That is, both the customer and the merchant must rely on a third party to get goods where they need to go.

And no one likes late shipments. When things go awry, when packages go missing — or at least get there late — customers fume, and merchants may lose future sales.

And shippers? Well, they keep on shipping seemingly with impunity, when it comes to delays.

All too often the merchant has no real control over what happens at some point in the supply chain.

A few things can change that power imbalance: data, of course, and refunds. Data helps merchants gain insight; refunds help them soften a financial blow and can help keep shippers responsible when it comes to their performance.

Yet merchants by and large do not have the wherewithal to track every parcel to their end destination.

Last month, LateShipment, which makes software that tracks packages, debuted Pulse, driven by artificial intelligence (AI), that enlists analytics to help merchants find out about late shipments before it’s too late. The Florida-based company helps merchants recover refunds that are tied to shipper errors. Pulse is now part of the platform, collecting more than 130 data points for each shipment, with cross-references to similar shipments and the millions of data points the company has gathered in years past.

Additionally, LateShipment said last month that Pulse can be integrated directly with order management systems to sync customer data, with an eye on automatic alerts. Support teams can search and view detailed tracking information focused on each shipment. Customized tracking pages help merchants connect better with customers through what LateShipment terms “unique tracking pages that retain the merchant’s branding.”

In the three months leading up to the software launch, Pulse identified more than 138,000 delivery exceptions before they were reported by carriers.

The AI-driven offering predicted more than 67,000 delays before they occurred. And, said LateShipment, the system also reported more than 1,500 instances where a package was likely to be returned to a sender. Pulse helped alert merchants of more than 7,000 lost shipments before the carriers’ reported it.

In an interview with PYMNTS, Sriram Sridhar, CEO of LateShipment, said the problem that needs to be solved in last mile delivery is that “as a merchant, often all control over a shipment stops once a package is picked up from the warehouse by a shipping carrier. There is very little visibility over what is happening to the shipment, except passive reporting from carriers and almost no ability to identify or prevent mistakes with last mile deliveries.”

“In fact,” he continued, “most businesses today learn about last mile delivery errors and delays only when angry customers call about the problem.”

He told PYMNTS that, as it stands currently, merchants do not have any process in place to hold shipping carriers accountable for their contractual performance promises.

“A shipping carrier often knows about issues currently affecting delivery performance across their entire network, but they have no interest in reporting potential errors before they happen, as it only shows their performance in poor light,” he told PYMNTS.

Instead, they wait until a delay has irrecoverably affected a package and only then report that back to merchants.

“A very simple example is congestion in a certain part of the country. Packages headed there will only reflect a delay after they have reached the congested part of the delivery network, even though the potential delay is very obvious even at the time of shipping,” said Sridhar.

These, and other issues, said the CEO, “are then presented to the merchant’s support team in the form of the intuitive Pulse dashboard, which lets the team immediately look closer at the issue and often fix it for the customer, thereby contributing to a better last mile delivery experience. The system lets support teams access and focus only on shipments that need attention and have information about the issue early enough to fix them before customers are affected.”

He told PYMNTS the refund process is automated to the point where algorithms integrate directly with shipping accounts, track every shipment, identify errors and delays that are eligible for refunds, file refund claims and follow up on them until the refunds are credited back to the merchant’s shipping account.

“After the initial two-minute setup process,” he said of the refund continuum, “it is truly automated such that it requires no input from customers or any change in their shipping processes … every merchant we work with sees a significant return from holding carriers accountable for their performance through these refund claims. Depending on what is shipped and the shipping types used, the refund percentage is sometimes as high as 20 percentage of total shipping costs paid on every single shipping invoice.”

The system currently has about 85 percent accuracy in predicting errors and 99 percent accuracy in identifying eligible claims, said the CEO.

“We aim to get to about 95 percent accuracy in failure predictions and aim to have these predictions made at least two days in advance for most shipments. In addition to this, we also aim to broaden the scope of errors spotted by improving our prediction algorithms,” he added.

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