Delivery Management 101

Delivery Management 101 – Lowers Costs & Retain Customers

For some ecommerce business owners, sending their customers’ orders out the door feels a little like watching your 16-year-old drive off in the family car. You’ve done all you can to prepare them, but all you can do now is hope and pray they get where they’re going safely.

But when it comes to ecommerce delivery, that’s not entirely true. There are many things you can do to improve the odds that your packages will arrive at your customers’ doors on time and in one piece. If you’re experiencing delivery problems or getting more customer complaints than expected, this article is for Y-O-U. So let’s discuss how your business can optimize its delivery management processes to fix common problems and meet (or exceed!) your customer’s expectations.

What is Delivery Management?

For shipping companies or any type of delivery service, delivery management focuses on using software to optimize routes and cargo space to move goods efficiently. For an ecommerce business, however, delivery management is the process of optimizing all the things you can control that might affect the delivery of an order. It’s not just about what happens on delivery day; it’s about fulfilling the order quickly and accurately, making sure it’s properly packaged and addressed, choosing the right shipping carrier, quickly solving any problems that may occur, and keeping your customers in the loop throughout the process.

Manage the Entire Post-Purchase Process

Delivery management is really about managing the entire post-purchase process. The post-purchase process encompasses everything that happens from the minute the order is placed until after it is delivered, including exchanges and returns. While some parts of the process (like driving the delivery truck) are out of your hands, other parts are entirely within your control. By better managing the things you can control, you improve the odds of accurate, on-time delivery.

Here’s an overview of the ecommerce order fulfillment process and ways to improve each step. For your convenience, we’ve broken the process down into 3 parts: fulfillment, delivery, and customer service.

1.  Fulfillment

Whether your business is fulfilling orders from your own warehouse or partnering with a third-party logistics provider (3PL) or fulfillment center, you have ultimate control over the handling of your inventory and the way you want your orders fulfilled. Here are some of the steps that may need improvement in this area.

Inventory Management

With today’s inventory management systems, there’s no excuse for stockouts that stop order fulfillment in its tracks. With the best systems you can monitor inventory levels in real time, set reorder points, automate notifications, generate custom reports, track sales, and improve forecasting. Distributing inventory to multiple warehouses can shorten delivery times, and you can manage the inventory through one centralized system.

Order Management

Sophisticated order management systems can manage orders coming in from multiple sales channels, prioritize orders according to your specifications, and route orders to the best location when more than one warehouse is involved. Automating the process reduces human error, while you, as the ecommerce merchant, have full transparency throughout the process and can make changes when necessary.

Warehouse Management

Some fulfillment centers have their own warehouse management systems that prioritize and route orders through the warehouse. More advanced software systems, such as ShipMonk’s, combine the best features of standalone order and inventory management systems so all parties can track order status and control inventory levels in real time. Merchants can monitor their 3PL’s performance by establishing and tracking KPIs for order accuracy, on-time shipments, and other metrics. If your 3PL is not performing up to speed or lacks the technology to monitor performance, it’s time to find another provider.

Warehouse Automation

Modernized fulfillment centers invest in technologies that streamline the fulfillment process and prevent errors. Address verification systems automatically detect incorrect addresses and flag them for follow-up with the customer before the order is filled. Items and packages are scanned at quality control checkpoints to ensure the correct items go in each order, and that the package gets loaded on the correct truck. Other scanning machines automatically calculate the size and weight of each item and recommend the best size box or bag for shipping it economically. Robotics and sorting machines move packages and bins around to save steps, improve accuracy, and speed up the process. Ultimately, all this automation gets your orders out faster and improves accuracy.

Pick and Pack

Accuracy and on-time shipping are the key metrics to watch with pick and pack services. Pickers (or advanced Locus robots, in ShipMonk’s case) move around the warehouse locating and pulling the necessary items to fill each order. Automation can cut down on the number of steps pickers must take, while multiple scanning checkpoints ensure the correct items are picked. Packers pack the items in the recommended box or bag with packing materials to prevent damage during transit. If your customers report damaged merchandise frequently, your 3PL can recommend alternative packing materials or offer pre-packing assembly services. Some 3PL’s, like ShipMonk, also allow merchants to personalize the delivery experience by using branded packaging or custom inserts.

Delivery Routing

The last step in the fulfillment process is selecting a shipping carrier (or carriers) and a route that will get the package to the customer most economically within the expected delivery window. This is where many self-fulfilling companies and smaller fulfillment centers fail. A 3PL that ships thousands of packages per day and partners with all major global, national, and local shipping carriers has superior options and much more data to work with when routing an order for delivery. For example, ShipMonk’s state-of-the-art 3PL ecommerce fulfillment platform automatically routes each package based on its size, weight, destination, and speed. The shipper is also automatically notified for pickup, and a shipping label is automatically generated. If done manually, this process can be time-consuming and error-prone, which is why many small businesses stick with one carrier, cross their fingers, and hope for the best.

2.  Delivery

Once an ecommerce order is loaded on the truck, it’s out of your hands, right? Wrong! While this is the part of the process you have the least amount of control over, you are nevertheless responsible if something goes wrong. That means you need to be able to tell your customers where their packages are at all times and quickly resolve problems.

Shipping

Once your carefully packed ecommerce order leaves the fulfillment center, it could potentially move from a ship, to a plane, to a truck, to a delivery van, etc. making several stops along the way before it gets delivered. Each time your package is transferred to a new vehicle, the barcode is scanned. All the major shipping companies have delivery management systems that track each vehicle in their fleet, reroute them to avoid weather or traffic, and automatically notify the sender (merchant) of any delays or potential problems if a package is not scanned within the expected timeframe.

To choose the best shipping carrier for each package, an ecommerce business or fulfillment center needs to balance shipping costs with speed and reliability. They also need to consider options for last-mile delivery, where unexpected delays can occur. A 3PL like ShipMonk can do this automatically.

Tracking Systems

The barcode on the package’s shipping label is tied to a tracking number that enables both the ecommerce merchant and the end customer to follow its progress. Most of your customers expect to be able to track their packages, so not offering this service can result in a negative experience, especially if the delivery is delayed. Both you and your customer can opt in to receive delivery status notifications whenever there is an unexpected delay in the normal delivery process. When there is a serious delay, such as a natural disaster or an incorrect address, the shipping carrier will notify the merchant of a delivery exception. It’s important to realize that it is your responsibility, not the shipping carrier’s, to contact the customer and solve the problem next, either by issuing a new shipping label to the carrier, or authorizing a reshipment.

The average customer checks the status of their order 7 times. You, as the seller, do have some control over this experience. The tracking number can be linked to an app, to the shipping carrier’s website, or to your own website. For example, ShipMonk offers a service called MonkProtect™ where customers can opt-in to insure their own orders against loss or damage. MonkProtect also enables merchants to host the order-tracking function and claims processing on their own branded website. So instead of sending customers to FedEx or UPS, ecommerce merchants can take advantage of those 7 views by promoting sales, seasonal promos, secondary purchases, loyalty plans, and referral discounts.

Shipment Protection

Different shipping services and shipping carriers have their own policies regarding limited liability. This type of shipping “insurance” can be complimentary or paid, depending on the package and the estimated cost of the contents inside. If you frequently ship fragile or expensive items, it makes sense to include additional protection in your shipping charges, or offer it to your customers as an option at checkout.

While these types of protection improve your odds of recovering costs if a claim is necessary, they take a lot of time to process and don’t solve the immediate problem of satisfying the customer. With ShipMonk’s MonkProtect™ post-purchase suite, the customer can opt in at checkout to insure their own packages against theft, loss, or damage starting at $0.97/order. If they need to file a claim, they can do so online and get instant reassurance that their claim is being processed. Status notifications keep customers updated and satisfied from start to finish. On the merchant’s side, claims are centralized and automatically pushed for approval, reshipment and/or reimbursement—making the whole process 10x faster than manual claims processing. 

Last-Mile Delivery

When you or your 3PL selects the shipping carrier and route, this includes the decision to designate a different and more economical last-mile delivery service, such as USPS or a local delivery service. This decision can save you and your customers in shipping costs, but may take longer. Giving your customers the option of an economy method as well as an expedited method puts the choice in their hands.

Proof of Delivery

You can request proof of delivery, such as a signature or a photo taken of the item when it arrives at your customer’s door. While this won’t prevent theft, it does prove that the package was delivered and may reduce fraudulent claims.

3.  Customer Service

What happens if an ecommerce order is lost and never delivered, the contents arrive damaged, or the wrong item is in the box? Delivery management doesn’t stop until the customer is satisfied, and you have complete control of this process.

Customer Service

Ecommerce businesses can reduce customer frustration by clearly communicating shipping policies, return policies, how to file a claim, or return an incorrect item. At a minimum, there should be an easy-to-find customer support page on your website with clear instructions on what to do in case of theft, damage, and lost or incorrect orders. Enclosing a return label with easy instructions in your orders is extremely helpful if you wish to recover incorrect or damaged items.

Merchants that follow up on delivery status alerts and quickly respond to customer claims rank higher in customer satisfaction than those who are slow to respond or do nothing. In the case of a lost or undeliverable package, the ecommerce merchant can help by contacting the shipping carrier to determine the cause of the problem and sharing this information with the customer so they know when to expect delivery or reshipment.

Claims Processing

When a customer files a claim, whether by phone, email, or online, it’s the merchant’s responsibility to process the claim and authorize a reshipment, return, or refund. The fulfillment center or 3PL should be able to handle the returns and reshipments. They can also help by processing claims with the shipping carriers to recover your costs. You can reduce customer service interactions significantly by offering an online self-service portal for submitting claims. Online claims filing, such as the branded portal offered by MonkProtect™, simplifies the recovery process for ecommerce merchants by keeping all the documentation in one place.

Reshipments, Refunds, and Returns

Reshipments, refunds, and returns are all a part of doing business online. The way your ecommerce business responds when things don’t go according to plan defines your brand, for better or worse, in the eyes of your customer. Your first priority should be satisfying your customer—you can determine who was at fault later. You should have a process in place so that your fulfillment center knows exactly how to handle returns and reshipments. A 3PL can also help you automate a lot of the process for faster resolution.

Delivery Management Checklist

As you can see, there are plenty of ways that ecommerce businesses can improve the delivery management process. Here’s a checklist to avoid some of the most common issues that cause delivery delays, mistakes, and unhappy customers.

  • Avoid stockouts
  • Partner with a 3PL as order volume grows
  • Pack fragile or heavy items carefully
  • Verify shipping addresses
  • Automate the shipping process
  • Offer delivery protection for high-value shipments
  • Monitor fulfillment center and shipping carrier performance
  • Offer real-time order tracking for customers
  • Monitor delivery delays
  • Quickly respond to delivery exceptions
  • Streamline the claims process
  • Communicate with customers

If you do all these things, you’ll have happier customers. Just as importantly, you will optimize your post-purchase operations for greater efficiency and reduce the number of costly returns due to mistakes or damaged goods. 

The fastest way to improve your post-purchase operations is to partner with a fulfillment provider that gets it. Contact ShipMonk today to see how our 99% accuracy rating, powerful 3PL software, and automated fulfillment technology can quickly help you get delivery management under control.

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