Table of Contents
Common Challenges in Delivery Management and How Software Solutions Can Help
Introduction
Running an eCommerce business comes with its fair share of obstacles. You’re likely dealing with lots of hurdles, like cart abandonment, customer churn, fierce market competition, and more. Without a doubt, the toughest part of all is delivery management. The rising demand for same-day and next-day delivery, growing customer demands, complex routing, and higher operating costs have made the entire delivery process even more complicated for retailers.
This has made businesses invest in newer technology solutions, especially in delivery management software. As per the study, the global market size of delivery management software is expected to touch $4.94 billion by 2031. Delivery Management software have been toted as vital to maintaining customer satisfaction, through maintenance of delivery schedules, real time tracking, resource allocation, and careful planning.
This article will unfold some frequent delivery hurdles faced by e-commerce companies. We will also dive into how efficient delivery management software can play a role in overcoming common challenges like the ones discussed above.
Let’s dive in!
Top 5 Common Challenges Businesses Face in Delivery Management
If shipping were all about delivering goods from point A to point B, every business could easily master it. In reality, it is an intricate process that consists of numerous challenges that all kinds of businesses face - from restaurant owners to e commerce platforms. Most of them include:
1. Lack of real-time visibility
E-commerce companies often rely on third-party logistics providers to deliver orders to customers. This limits their control to monitor their shipments directly as they move. In addition, the tracking data offered by 3PL providers isn’t accurate and delayed, which results in fragmented information and data silos.
Not only that, when dealing with multiple 3PL providers, businesses are forced to manually visit each carrier’s tracking system to extract shipment information. This adds another layer of complexity to an already complicated system.
Due to these inconsistencies in tracking, companies can’t take immediate action on delivery delays and shipment loss. This ultimately affects their ability to ensure reliable deliveries and results in poor communication, which is the last thing customers expect. With 61% of shoppers prioritizing next-day deliveries and 73% of online shoppers considering CX as a primary factor in their buying decisions, shipment delays or misplaced shipments can cause serious issues.
2. Delivery Delays
Amazon’s launch of two-day and same-day delivery services and the expansions of local delivery services like DoorDash (one of the popular food delivery services in North America) and Instacart have been setting the bar high for fast delivery. These advancements have created a scenario where speed is no longer a luxury but a necessity.
While you can’t afford delays in such a scenario, they are persistent in delivery management. Factors such as traffic congestion, road blockages, and adverse weather conditions are the major contributors to inefficiencies in your delivery operations. Not only do the delayed deliveries hamper business operations, but they also lead to customer dissatisfaction. As per a recent study, around 22% of customers stated that they received orders much later than expected, and 17% of shoppers showed their dissatisfaction with delivery times.
3. Last-mile delivery disruptions
When deliveries leave the last distribution hubs to reach end consumers, it’s called last-mile delivery. It’s considered the most complex part of the entire logistics process. Issues like difficulty in navigating delivery locations, incorrect delivery addresses, and failed deliveries occur at this last leg of the delivery journey. Moreover, missed delivery is another significant hurdle businesses often face during this stage.
Alongside hampering customer expectations, these disruptions also shake a company’s bottom line, increasing returns and the number of lost sales.
4. Fragmented communication
Multiple stakeholders are usually involved in delivery management—internal company staff, 3PL providers, drivers, and delivery agents. A subtle coordination breakdown can result in confusion and delivery inefficiencies. Worse, you might even lose control of the entire process.
Along with internal communication breakdowns, businesses also face challenges while contacting customers. Different customers prefer different channels for business alerts. While some prefer SMSes, some of them prefer WhatsApp messages to get updates on orders. This diversity in preferences makes it difficult for brands to connect with their customers and leads to communication gaps.
5. High operational expenses
Logistics is the most expensive part of the entire supply chain ecosystem. As per a Statista study, global logistics costs are set to increase by $13 trillion by 2026. Several factors contribute to these rising expenses. Increasing fuel costs, labor expenses, technological investments, expenses in 3PL providers, and infrastructure costs are the major ones among them.
If not managed properly, these operational costs in delivery management can severely impact a company's profit margin.
How Delivery Management Software Helps Reduce Logistics Challenges and Improve Efficiency?
A delivery management system acts like a magic wand that mitigates most shipping challenges and creates a seamless delivery experience for both buyers and merchants. According to Verified Market Research, the market size for delivery management software is forecasted to reach $4.94 billion by 2031. This widespread adoption of the delivery management system is absolutely worth it! Here’s why:
1. Streamlines shipment tracking
A delivery management system comes pre-integrated with numerous carrier partners across the globe. It uses APIs to pull real-time data from carriers’ tracking systems and display it on an integrated dashboard. This helps businesses monitor shipments in real time, take instant action on delivery exceptions, and enhance operational efficiency through real time communication.
As a result, you don’t need to go back and forth with carriers’ portals to get tracking information. As soon as a delivery leaves the warehouse, the platform keeps updating them on the portal. Agrim (an agri-inputs eCommerce platform) used ClickPost’s delivery management system and achieved 100% shipment visibility for in-house teams & customers communication.
2. Helps in finding efficient routes
Shipping management solutions help choose the most optimal delivery routes by analyzing different variables like traffic, road times, conditions, etc. Optimizing delivery routes ensures that the delivery personnel avoids congested roads and fulfills as many orders as possible in a single trip. Consequently, this speeds up delivery times and reduces fuel costs, thereby lowering operational expenses.
Take the example of the Giant brand Walmart. Through custom route optimization, it has reduced 30 million unnecessary miles and bypassed 110,000 inefficient paths.
3. Reduces delivery errors
With a delivery management system at your disposal, you can automate manual processes that are mostly error-prone. These include label creation, AWB number generation, exception handling, POD collections, sending customer alerts, and more. Typically, these delivery management solutions use AI & ML technologies to get most of these tasks done within seconds.
Automating tasks is a surefire way to reduce errors that can usually be attributed to manual discrepancies. Tech even helps you weed out inefficient routes. Due to this, eCommerce companies can lower delivery errors and improve operational efficiency.
4. Minimizes failed delivery issues
Sometimes, using the most efficient routes don't guarantee accurate deliveries. When delivery agents fail to hand over an item to a customer on the first attempt, it falls under failed deliveries. Failed deliveries can happen because of any reasons, such as wrong address input, incomplete customer address, customer unavailability, and so on. There are other unforeseen circumstances that may also contribute to delivery exceptions.
Delivery management solutions offer an automated NDR management system that coordinates with the delivery personnel and customers to reduce such last-mile disruptions and make successful fulfillment. This further eliminates RTO% (Return-to-Origin) and saves the company’s profit margin.
DaMENSCH reduced its RTO rate by 54% after using ClickPost's failed delivery management solution.
5. Improves customer satisfaction
Delivery management software improves customers’ shopping experiences by optimizing various factors. For example, it sends on-time alerts on each milestone of the delivery journey via their preferred channels. In addition, it lets them track their parcels on a personalized tracking page. Most importantly, with a delivery management platform, you can send automated delay alerts in adverse situations.
Most of the time, they come up with checkout optimization functionalities that help customers in their buying process by showing EDD and pin code serviceability.
6. Lowers operational costs
Besides taking care of logistics optimization and customers’ post-purchase experience, delivery management tools also help in lowering operational expenses. It eliminates high labor costs by automating most repetitive tasks, reduces fuel consumption through route planning, and cuts down on the costs associated with reshipment and reverse logistics.
Simplify Delivery Management With ClickPost
ClickPost is a logistics intelligent platform that’s connected with over 500+ carriers worldwide, eCommerce platforms, WMS, OMS, and ERP systems. With just a few clicks, you can connect ClickPost with your eCommerce platform and start your operations. It manages over 50 million shipments each month and offers a bunch of APIs to eliminate logistical challenges and improve shoppers’ post-purchase experience. Brands like Snitch, Adidas, Puma, and CaratLane use ClickPost’s delivery management solutions.
Here’s how ClickPost makes delivery management effortless:
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It uses ML algorithms to fetch the most suitable delivery partner for online orders, so you can improve the delivery rate.
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ClickPost automates most logistics-associated tasks like capturing order details, order creation, tracking, NDR management, returns management, and more.
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It offers a centralized portal to monitor customer orders.
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It sends automated delivery notifications at each checkpoint and provides a white-labeled tracking page.
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ClickPost identifies SLA breaches and helps you take action immediately.
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It improves the checkout rate by displaying the most optimal EDD on the product and checkout pages.
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It manages customer returns from start to finish.
Conclusion
Logistics comes with numerous challenges that need proper management to ensure successful fulfillment. Delivery management software is a one-time investment that can deliver long-term benefits by addressing these challenges and streamlining the process for businesses. It doesn’t matter whether you’re running an enterprise business handling thousands of orders each day or a startup; opting for a shipping management solution is a must to pave the way for logistics success.