Reducing Parcel Loss and Damage: 7 Tips for the Peak Season

Okay, what is the actual size of the peak season problem? How many parcels are lost or damaged? Just in case you were still hoping the problem was smaller than it is, here are some stats to pull out to help you make the case that needs to be high on the list of things to do.

In the UK, it is estimated that around 2-3% of parcels are reported missing during peak seasons, such as the Christmas period or major sales events like Black Friday. According to Which?, over 1 million parcels went missing in the UK during the 2020 holiday season alone.

Global Perspective: Globally, parcel loss rates vary but typically range between 1-2% under normal circumstances, according to data from the Universal Postal Union. This rate can increase during peak periods due to the significant rise in parcel volumes. For example, during the 2020 holiday season, it was reported that in countries like the United States, up to 1.5 million parcels went missing daily.

In the UK, parcel damage rates during peak seasons are generally reported to be around 3-6%, depending on the type of goods and the reliability of the carrier. A survey by the UK Parcel Services in 2021 indicated that the rate of damaged parcels increased by approximately 15-20% during the peak season compared to the rest of the year. Ouch.

Global Perspective: On a global scale, the parcel damage rate during peak seasons can range from 3-5%, similar to UK figures, with some carriers and regions experiencing higher rates, particularly in markets with less developed logistics infrastructure, so we see similar surges from 10% upwards during peak seasons.

What can organisations do to help combat this?

To navigate these challenges successfully, it's crucial to implement strategies that minimise these risks. This includes:

1 Invest in High-Quality Packaging

Investing in robust packaging is one of the most effective ways to reduce parcel damage. During peak seasons, parcels are often handled more frequently and sometimes roughly due to the sheer volume of shipments. According to a study by the Packaging Consortium, poor packaging accounts for up to 70% of product damages during transit. Sturdy boxes, bubble wrap, air pillows, and other protective materials can significantly reduce the risk of damage.

Tip: Ensure that packaging is tailored to the product's specific needs. Fragile items should be double-boxed, and voids within the box should be filled to prevent movement during transit. We recommend LC Packaging. They’ve been around for 100 years and counting, and with a push towards sustainability, they are a great choice.

2 Implement Advanced Tracking Technologies

Tracking technology is no longer a luxury; it's a necessity. GPS-enabled tracking devices and real-time monitoring software can help you keep tabs on your shipments throughout the supply chain. In 2022, Statista reported that 53% of retailers experienced reduced losses after implementing real-time tracking systems. This technology allows you to identify where a parcel was lost or delayed, enabling quicker resolutions. 

Tip: Choose a tracking solution that integrates seamlessly with your existing systems and provides real-time alerts for any irregularities in the shipment's journey.

3 Enhance Customer Communication

Clear and proactive communication with customers can mitigate the impact of lost or damaged parcels. A study by Oracle found that 85% of consumers are more likely to stay loyal to a retailer who resolves a problem effectively. Informing customers about possible delays, providing tracking information, and promptly addressing any issues can turn a potentially negative experience into a positive one. It’s worth investing in post-purchase communication tools that allow consumers to reschedule the delivery time on the day, to ensure a safe transfer or even OTP technology, which is the best-in-class option. A few of the businesses we work with are using Sorted for this.

Tip: Implement a customer service protocol specifically for peak season, including quick-response teams dedicated to handling loss or damage claims.

4 Optimise Warehouse Operations

Efficient warehouse management is crucial, especially when dealing with high volumes of orders. Misplaced parcels within a warehouse are a common cause of delays and loss. Implementing an optimised warehouse layout, proper labelling, and an inventory management system can significantly reduce these risks. According to a 2021 survey by WERC (Warehousing Education and Research Council), companies with optimised warehouse operations reported a 20% decrease in shipment errors.

Tip: Regularly train your staff on best practices for handling, storing, and picking products. Use automation where possible to minimise human error. Sib Solutions are using a combination of AI, Industrial Internet of Things (IIoT) and intelligent video analysis to help organisations stay ahead of the increasing fraud and theft taking place.

5 Partner with Reliable Carriers

Not all carriers are created equal. During peak season, some carriers may struggle with the increased demand, leading to higher parcel loss or damage rates. A 2020 report by ShipMatrix found that during the holiday season, the average parcel damage rate for top carriers was about 3%, with some lesser-known carriers reporting rates as high as 8%.

Tip: Vet your carriers thoroughly, considering their track record, customer reviews, and damage rates. Establish strong communication channels with them to ensure issues are addressed promptly.

Insurance Tip: If you want or need to use a range of carriers, one of the easiest ways to protect you and your clients or customers is by using Anansi as blanket coverage. Instead of trying to piece together courier coverage and hoping for the best, you can negotiate better rates, remove courier coverage altogether and implement white-labelled blanket coverage from Anansi. Build in protection and still have the flexibility because no matter if you have a three or an 8% damage rate, you'll still get access to our 98% payout rate that protects the bottom line. Plus, with the simplicity built into Anansi, you will be reducing any inefficiencies within your customer success team that impact your growth and profitability. We provide accountability and brand promise commitment to all your clients of a high-value service while reaping the benefits with the opportunity to upsell additional insurance coverage for more growth opportunities. All win/win!
Discover more here.

6 Leverage Additional Insurance for High-Value Items

While it's essential to minimise risks, some loss or damage is inevitable. For high-value items, consider additional insurance coverage. According to the National Retail Federation, retailers lost approximately $62 billion due to shrinkage in 2019, a portion of which could have been mitigated by insurance.

Tip: Review your insurance policies to ensure they cover the types of losses most likely to occur during peak season. Also, make sure you're covered by regulated insurance. Courier compensation is not regulated, meaning they don't have to pay out or provide you with any customer care standards. Compare courier compensation with a regulated product here.

7 Conduct Pre-Season Audits

Before the peak season hits, thoroughly audit your entire logistics operation. Identify potential weak spots in your supply chain where parcel loss or damage is most likely to occur. A pre-season audit allows you to address these issues proactively rather than reactively.

Tip: Engage external experts for an objective assessment. Their insights can help you pinpoint areas for improvement that might not be immediately obvious.

The peak season presents a unique set of challenges, but with the right strategies, 3PLs and retailers can significantly reduce the risk of parcel loss and damage. By investing in quality packaging, optimising warehouse operations, implementing advanced tracking, and enhancing customer communication, you can protect your bottom line and ensure a positive customer experience, even during the busiest times of the year.

Remember, preparation is key. Start planning now, and you'll be well-equipped to handle the peak season with confidence and efficiency.