What are the biggest emerging threats facing online delivery?
The “Annual State of Shipping Study” from UPS Capital, UPS’s insurance division, finds porch piracy, fraud and climate-related issues to be the top emerging threats facing online delivery.
On those threats, the survey of 500 merchants and 1,000 online shoppers across the U.S. found:
- Porch piracy: Two-in-five merchants stated that porch piracy has become more of an issue for their business in 2022 than in previous years. Almost a third (32 percent) reported financial losses of more than $50,000 due to porch piracy in the last year. Among shoppers, 44 percent experienced porch piracy last holiday season, and households with children were twice as likely to experience porch piracy compared to childless households.
- Fraud: Thirty-seven percent of merchants reported that credit card fraud is a growing risk to their business, with return shipment fraud (from missing merchandise to altered labels and return addresses) at 31 percent and false reports of stolen packages, 27 percent.
- Climate-related issues: Three-quarters of merchants experienced an increase in damaged, expired or lost packages due to climate change over the last 12 months, and 92 percent anticipate an increase in such issues due to climate change over the next five years. Among shoppers, 77 percent believe that extra steps are needed to protect their orders from weather issues.
The impacts of delivery incidents, according to merchants, included extra time spent with customers resolving their damaged or lost packages and making them whole, cited by 53 percent; financial loss due to sending a second unit, 50 percent; and negative reviews adversely affecting their business’s reputation, 37 percent.
When asked about possible solutions, 56 percent of merchants said they believe that acts of porch piracy should be taken as seriously as theft in brick-and-mortar stores.
The wide majority of merchants believe greater visibility into late shipments, lost claims, credit card fraud transactions, porch piracy claims and damaged claims would help better resolve overall delivery issues. Among the shopper respondents, 84 percent expect a replacement or refund within a week of notifying the merchant of a lost, stolen or damaged package.
On climate-related issues, potential mitigation steps include larger investment in weather stabilizing shipment packaging, faster delivery times and shipment insurance policies.
DISCUSSION QUESTIONS: Which of the three threats facing online delivery — porch piracy, fraud or climate-related issues — will be the toughest to overcome? What solutions do you see?