Where customer expectations for accurate and timely deliveries are at an all-time high, misshipments have become a prevalent challenge for businesses. A misshipment occurs when a package is not shipped correctly, leading to a variety of issues such as delivering to the wrong customer, including incorrect items in the package, or sending packages to the wrong location.
Understanding the root causes of misshipments and implementing effective strategies to reduce them is crucial for maintaining customer satisfaction and the overall success of an e-commerce business.
Common Causes of Misshipments
1. Errors During the Picking Process
One of the primary reasons for misshipments is errors during the picking process. When fulfilling an online order, a picking list is generated, and team members pick the items from the warehouse based on this list.
If the picking process is manual and relies on human judgment, there is a higher likelihood of picking the wrong SKU variant or an entirely different product. Lack of robust quality control checks before shipping exacerbates this issue.
2. Inventory Management Problems
Inaccurate or outdated inventory management is another contributing factor to misshipments. Without real-time visibility into inventory levels or SKU counts, businesses may struggle to track inventory accurately. This increases the likelihood of poor order accuracy due to SKUs being stored in the wrong place or becoming unavailable.
3. Lack of Order Management Software
The absence of an Order Management System (OMS) can lead to misshipments due to manual errors. An OMS is crucial for managing and tracking orders across multiple channels and each stage of the fulfillment process. Without this technology, human errors such as incorrect packaging or sending packages to the wrong carrier are more likely to occur.
4. Poor Communication with Carriers
Once a package leaves the warehouse and is in the hands of parcel carriers, businesses may face challenges in maintaining effective communication. Inadequate communication with carriers makes it harder to rectify misshipments or prevent them from happening in the first place. This lack of communication leaves customers frustrated, bouncing between the brand and the carrier to seek answers.
5. Package Theft (Porch Piracy)
The rise of package theft, often referred to as ‘porch piracy,’ has contributed to an increase in misshipments. If a delivered package is stolen before the customer can receive it, it is perceived as a failed delivery. Businesses are then faced with the responsibility of replacing the stolen package at their own expense.
The Impact of Misshipments
1. Poor Customer Experiences
Misshipments result in lower perfect order rates, diminishing the overall customer experience. Customers expect their orders to be delivered on time and contain the correct items. When misshipments occur, customers experience dissatisfaction, leading to Where Is My Order (WISMO) inquiries, delivery anxiety, and potential negative reviews that harm brand reputation.
2. Higher Operational Costs
Fixing misshipments becomes the responsibility of the business, incurring additional costs. This may involve rerouting packages, covering return shipping costs for incorrect items, and even the full cost of a replacement order if a missing package cannot be tracked down. Over time, the cumulative cost of misshipments can erode profit margins.
3. Higher Return Rates
Customers may choose to return incorrectly shipped items, further elevating the e-commerce return rate. Increased return rates negatively impact revenue and add complexity to the overall logistics and inventory management processes.
How do Misshipments Affect Customers?
Misshipments significantly impact customers by causing inconvenience and disappointment. In an era where quick and accurate deliveries are expected, receiving the wrong items or experiencing delays leads to dissatisfaction.
Beyond the initial frustration, customers must invest additional time and effort in contacting customer support to rectify the issue. Poor customer service exacerbates the situation, potentially leading to negative reviews and a diminished likelihood of repeat business. Misshipments undermine the trust and smooth shopping experience customers anticipate, resulting in a negative impact on brand loyalty.
How do Misshipments Damage Businesses?
Misshipments inflict substantial damage on businesses through decreased customer retention and conversion rates. Disgruntled customers, likely to abandon a brand after a misshipment, may leave negative online reviews, tarnishing the company’s reputation.
The financial impact is two-fold: businesses bear the cost of reshipping items and managing returns, while operational costs increase due to the need for corrective measures. Higher return rates further erode revenue, highlighting the cascading effect of misshipments on a company’s bottom line. Ultimately, misshipments jeopardize brand perception, customer relationships, and overall business success.
How to Reduce Misshipments
Reducing misshipments is a critical aspect of ensuring customer satisfaction and preserving a positive brand image. Implementing effective strategies throughout the order fulfillment process can significantly minimize errors. Here are five key measures to reduce misshipments
1. Implement Quality Control Checks
Introducing robust quality control checks is paramount to catching errors before packages leave the warehouse. These checks should encompass a thorough examination of each package to ensure correct Stock Keeping Units (SKUs), proper packaging to prevent damage, and accurate labeling.
By instituting a final quality assurance step, businesses can catch potential misshipments early in the process, minimizing the chances of incorrect orders reaching customers.
2. Utilize Barcode Scanners During Picking
Equipping warehouse staff with barcode scanners during the picking process is a powerful tool to enhance accuracy. Barcode scanners enable pickers to confirm each item’s accuracy by scanning its barcode against the order list.
This technology significantly reduces manual errors, as pickers can efficiently verify that they have selected the correct product and SKU variant. The result is a more precise and efficient picking process, contributing to a substantial reduction in misshipments.
3. Invest in Order and Inventory Management Software
Implementing advanced order and inventory management software is a transformative step toward reducing misshipments. This technology provides real-time synchronization of data, ensuring accurate and up-to-date information on inventory levels and order fulfillment.
Automated systems can help prevent human errors that may occur during manual data entry or order processing. With an integrated software solution, businesses can maintain a single source of truth across systems, minimizing the risk of misshipments due to discrepancies in inventory or order details.
4. Maintain Communication with Parcel Carriers
Establishing strong communication lines with parcel carriers is crucial for proactive issue resolution. Regular and open communication helps identify and address potential shipping and delivery issues before they escalate into misshipments.
By collaborating closely with carriers, businesses can stay informed about the status of shipments, address any anomalies promptly, and provide customers with accurate and timely information. Effective communication with carriers is a key element in preventing misshipments and ensuring a smooth customer experience.
5. Partner with a 3PL
Consider partnering with a Third-Party Logistics (3PL) provider to leverage their expertise and resources. A reputable 3PL can offer scalability, advanced technology solutions, and specialized knowledge in logistics. By outsourcing certain aspects of the fulfillment process to a reliable 3PL, businesses can enhance efficiency and accuracy.
The 3PL’s established systems and processes contribute to minimizing misshipments, especially during periods of rapid business growth. This strategic partnership allows businesses to focus on core competencies while benefiting from the 3PL’s logistical capabilities.
Misshipments pose significant challenges for e-commerce businesses, impacting customer satisfaction, brand reputation, and operational costs. By understanding the common causes of misshipments and implementing proactive strategies, businesses can significantly reduce the occurrence of errors in their order fulfillment processes.
Investing in technology, maintaining effective communication with carriers, and ensuring stringent quality control measures are essential steps towards providing a seamless and error-free customer experience in the world of e-commerce.
I’m Tammy Waller, a supply chain and logistics specialist with over 10 years of expertise. I’ve been an author and SFL employee for over 10 years.
As an author, I’ve been able to teach others. I love guiding users through supply chain and logistics operations.
I have substantial experience managing logistics operations, supply chain management, transportation, inventory management, and warehousing in shipping-moving and logistic services. I’ve worked on many worldwide logistics and supply chain projects, honing my abilities in negotiating rates, scheduling shipments, and managing vendors.