Cost of delivery complications hits £1.6 billion annually

Tuesday, October 2, 2018 - 12:40 by Simon Crisp

When goods ordered online do not arrive within the allotted timeframe, or consumers are not in to take delivery, these mistakes cost time and money.

Now a report from IMRG has shown the scale of this issue, estimating that it saps £1.6 billion from the coffers of retailers and consumers alike each year.

Retailers bear the brunt of this cost, being foisted with £1.2 billion in added expenses when deliveries are not completed as intended, for whatever reason. Consumers are hit with almost £375 million in wasted cash, while the companies responsible for shipping the items themselves have to pay out around £123 million on average.

For fans of shopping online, the biggest extra financial burdens come when they need to get a missed item shipped out for a second time, or have to head to their local delivery depot to pick it up in person.

Retailers face the biggest impact if an item ordered online goes missing in transit, with each absent parcel typically amounting to £123 worth of damage to their bottom line.

Perhaps most surprising of all is the fact that if a parcel is delivered later than expected, the carrier is not penalised in any way. Instead the retailer is likely to bear the brunt of the customer’s ire and have to repair its reputation, even if a third party was ultimately responsible for the hiccup.

Study spokesperson, Andrew Starkey, suggested that part of the problem comes down to the fact that the rapid rise of e-commerce has forced carriers to expand and take on casual workers or freelance couriers who do not have the local knowledge needed to ensure that they can complete delivery rounds efficiently and without any issues.