The dreaded “Delivery Exception” notification is a source of frustration and disappointment for ecommerce customers. For too long, ecommerce companies have treated fulfillment and last-mile operations as a cost to be minimized, rather than a critical component of the customer experience. But the truth is, your shipping operation is about more than just moving boxes – it’s about delivering satisfaction. And when delivery exceptions occur, that satisfaction quickly turns to frustration.

The good news is that your shipment data holds the key to preventing most delivery exceptions before they happen. In this article, I’ll share four proven strategies for transforming your shipping data into a powerful tool for exceptional delivery performance. By leveraging these insights, you can turn what was once a source of frustration into a competitive advantage.

1. First, Make the Decision to Prioritize Reducing Delivery Exceptions.

Without a doubt, delivery exceptions significantly impact customer experience, leading to frustration, negative reviews, and lost revenue when shipments are delayed or lost. As a rule of thumb, about 10% of shipments will experience some type of delivery exception. Hence, it’s no surprise that many of these exceptions will also result in late shipments and disappointed customers. To illustrate the importance of reducing delivery exceptions, just look at Amazon. They became the leader in ecommerce because they focused on eliminating delivery exceptions.

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One Bad Customer Delivery Experience Leads To 3 Disastrous Results: Both Now And In The Future.

As evidence of Amazon’s obsession with on-time delivery, let’s look at their Seller Fulfilled Prime (SFP) program. Here Amazon merchants enroll in the SFP program so that they can have the Amazon Prime designation. With this designation they have to meet certain service levels, most notably free 1 to 2 day delivery.  To do this Amazon measures these merchants’ shipping performance closely. Specifically, Amazon’s standard for the SFP program is 99% valid tracking numbers and 93% on-time delivery. So, it is safe to assume that Amazon’s internal standard is the same or higher. Thus if you want to be an ecommerce company that really delights customers, you need to be obsessed with eliminating delivery exceptions.

For more details on the negative effects of delivery exceptions, see my article, One Bad Customer Delivery Experience Leads To 3 Disastrous Results: Both Now And In The Future.

2. Need to Measure and Diagnose the Root Cause of Every Delivery Exception.

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To improve delivery performance and customer experience, it’s important to measure and diagnose the root cause of delivery exceptions. This involves analyzing shipment data to identify patterns and trends that may be contributing to delays or other issues. By understanding the root cause of delivery exceptions, businesses can take targeted actions to address the underlying problems and prevent similar issues from occurring in the future.

For a detailed explanation on how to do this, see my write-up on this, Best Data Analytics Practices for Measuring eCommerce On Time Delivery. This piece explores the data analytics of determining a ship date, a delivery date, a promised date, delivery exceptions root cause analysis, and order fulfillment click-to-ship metrics.

3. Every Shipment is a Gold Mine of Data – Here’s Where To Get The Data.

Every shipment contains valuable data that can be used to improve delivery performance and customer experience. However, accessing this data can be a challenge for businesses that do not have the right systems in place. So, to get access to shipment data, most businesses need to work with their transportation carriers and logistics partners. Further unless you rely on a third party partner, you will need to invest in technology solutions that can provide up-to-date tracking and analytics. So where does this shipping data come from? Well for most of us, it is not all in one system. To list, below are the major data sources for measuring and improving shipping performance.

Shipment Data Sources

a. Transportation Management System (TMS).

Either a shipper or 3rd party logistics (3PL) partner may have a TMS. Key shipment data in this system would include the ship date, delivered date, and promised date. Additionally, this system may have more details on the shipment order detail, shipment characteristics, shipment status, and delivery exceptions.

b. Carrier-Provided Data.

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Carriers provide shipment data by various means. Specifically, shipment status data can come through the carrier’s web site, downloadable files, subscription data like Electronic Data Interchange (EDI) or Application Programming Interfaces (API). Normally, you will need your IT staff to establish a subscription or API data interface. Now, this data should include all key shipping events and exceptions. Some carriers are better than others at providing complete, understandable shipment status. Additionally, usually API and subscription status interfaces provide better data.

Also, carrier invoice data is extremely useful for capturing shipment characteristics like billed weight, dimensions, zone, service, address corrections, and so on. For more on accessing carrier invoice data, see my article, Simple Data Access To Quality Electronic Freight Bills: Here Is How To Make This Less Painful For Shippers.

c. Non-TMS Systems.

Also, there may be other systems that are key for getting shipment data such as ERP, CRM, WMS, order fulfillment systems, ecommerce systems, and even financial systems. These systems can be a shipper’s internal system or 3rd party systems. The warehouse and fulfillment systems will have detailed information about the promised delivery date, the ship date, and detailed shipment order information. Also, many shippers have a separate financial system or they outsource carrier bill payment to a 3rd party, So these financial systems will normally have all the carrier billing data. In many cases, it is easier to get the shipment financial data from these sources instead of getting a dual feed from the carrier.

For more perspectives on shipment data sources, see Descartes’ Analytics For Improving Carrier and Supplier Performance and Nicholas Shaw‘s 5 Ways To Use Shipping Data To Enhance The Customer Experience. Also, find out how to get better access to your carriers’ invoice data for shipment analytics. See my article, Simple Data Access To Quality Electronic Freight Bills: Here Is How To Make This Less Painful For Shippers.

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4. Find Out Who Can Help You Eliminate Delivery Exception Problems.

Eliminating delivery exceptions requires a collaborative effort between businesses and their logistics partners. 3PL providers have expertise in managing shipments and can help businesses identify areas for improvement in their supply chain operations. By working together with logistics partners, businesses can implement strategies to prevent delivery exceptions and improve overall delivery performance, leading to better customer experiences and increased revenue.

Who Can Help You Eliminate Delivery Exceptions?

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• Your Transportation Carrier Representative. If you are a large shipper, carriers normally have extensive analytical resources to help with improving service performance. For smaller shippers, many carriers have extensive self-help online resources to include reports as well as raw shipment status and electronic invoices that you can download.
• Resources Within Your Company. If you have an IT department, they can work with your transportation carriers to get the data. Worst case, you can pull the data into software like MS Excel. 
• 3rd Party Logistics (3PL) Provider. If you have a 3rd party logistics (3PL) company, they should provide you with your shipping data or provide service performance dashboards. Additionally, these 3PLs and ecommerce fulfillment companies should already be proactive in reducing your delivery exceptions.
• Shipping Analytics Companies. Lastly, there are independent shipping analytics companies that can help you. These companies can consolidate data from various carriers and provide you shipping performance dashboards for you to take action to minimize delivery exceptions. 

More Resources.

For more ideas and references on reducing your delivery exceptions, below are more references:

• Bringg’s How To Handle a Delivery Exception For Greater Efficiency and Customer Satisfaction
• Optimoroute’s What the Heck Is a Delivery Exception? (And How to Avoid It)
• Also, if you are a shipper that ships to other businesses, the On-Time, In-Full (OTIF) is a critical customer success metric. See my article, Measuring The OTIF Metric: The Best Ways To Focus On Uplifting Supply Chain Excellence.
• Lastly, delivery exceptions are the primary reason for late deliveries. However, it also could be that you, the shipper, are not providing a realistic promised date for your customers. For a more detailed discussion on setting promised dates, see my write-up on this, Promised Delivery Date: This is Provided by the Shipper, Not the Carrier.

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Need help with an innovative solution to make your supply chain analytics actionable? I’m Randy McClure, and I’ve spent many years solving data analytics and visibility problems. As a supply chain tech advisor, I’ve implemented hundreds of successful projects across all transportation modes, working with the data of thousands of shippers, carriers, and 3rd party logistics (3PL) providers. I specialize in launching new analytics-based strategies, proof-of-concepts and operational pilot projects using emerging technologies and methodologies. If you’re ready to supercharge your analytics or if you are a solution provider, let’s talk. To reach me, click here to access my contact form or you can find me on LinkedIn.

For more from SC Tech Insights, see articles on Shipping.