1、 2022The AnnualState of Shipping ReportRecent digital sales have outpaced those of stores for the first time since early 2021.1 With more packages continuing to hit the road,businesses and carriers are becoming more cognizant of shipping mishaps in the delivery experience and for good reason.These i

2、ncidents range from traditional hiccups,like late,lost,and damaged deliveries,to emerging threats like porch piracy,fraud,and climate-related issues.Businesses of all sizes are experiencing the effects that increased shipping incidents have on their reputation and customer loyalty but,for small and

3、midsized businesses(SMBs),these scenarios can make or break their overall success.The Annual State of Shipping report,commissioned by UPS Capital,identified the top challenges and emerging risks merchants and shoppers face in the shipping and delivery experience and how to stay ahead of them as we e

4、nter the holiday season.As part of this study,500 merchants and 1,000 online shoppers across the United States were surveyed to better understand shipping-related issues.The research revealed that porch piracy and damaged or lost shipments are the leading threats impacting merchants businesses.The A

5、nnualState of Shipping ReportMerchants identified the following threats to company success:(Multiple responses allowed)Porch Piracy Losses 54%Damaged Shipments51%Lost Shipments49%Inventory Delays 37%Reverse Logistics 30%The Annual State of Shipping Report 2022 2Unfortunately,the impact of shipping-r

6、elated issues extends beyond hard costs alone.Merchants also see an impact on their businesss productivity,from the extra time spent resolving shipping mishaps to hours spent submitting and managing customer claims.Soft costs also add up,with 37%of merchants reporting an increase in negative reviews

7、 that adversely affected their businesss reputation.With 61%of shoppers stating they will stop ordering from an SMB after two or three delivery issues,merchants must be prepared to handle the increase in shipping mishaps to maintain customer satisfaction.Impacts of shipping-related issues according

8、to merchants:HARD COSTSTIME SPENTSOFT COSTSNegative reviews adversely affecting their businesss reputation-37%Extra time spent with customers resolving their damaged or lost packages and making them whole-53%Lost time and expense submitting and managing claims-35%Financial loss due to sending a seco

9、nd unit-50%Loss of sale/customer-45%Cancelled orders-34%Shipping incidents are not only damaging to a merchants reputation,but also damaging to a businesss bottom line.A whopping 92%of merchants surveyed reported costly impacts to their business as a result of lost,stolen,or damaged shipments,with o

10、ver half of merchants losing more than$50,000 as a result in the last year.292%The Annual State of Shipping Report 2022 3Porch Piracy Is Top of Mind in 2022Porch piracy is an increasingly common threat to the online shopper experience and to merchant business success this year.According to 50%of mer

11、chants,over one-in-ten customer packages are stolen by porch pirates each month.3 Findings also show that porch piracy becomes an increasingly common occurrence as merchants scale their online sales.4 With porch piracy on the rise,merchants are feeling the pain of these losses as theyre forced to ta

12、ke on the costs of replacing and reshipping stolen merchandise.Two-in-five merchants stated that porch piracy has become more of an issue for their business in 2022 than in previous years.34%of merchants proclaimed porch piracy has become one of the largest issues facing retailers.35%32%74%56%Over a

13、 third(35%)of merchants stated that stolen packages are significantly impacting their businesss profitability.Almost a third(32%)of merchants reported financial losses of more than$50,000 due to porch piracy in the last year.Nearly three-in-four(74%)merchants reported increasing their budgets for po

14、rch piracy losses.Nearly three-in-five(56%)merchants believe that acts of porch piracy should be taken as seriously as theft in brick-and-mortar stores.34%The Annual State of Shipping Report 2022 4Fraud Is an Emerging Concern for MerchantsWhile porch piracy remains the reigning threat of 2022,two em

15、erging threats that significantly impact merchants profitability and the shopper experience are fraud and climate change.False reports of stolen packages may lead merchants to believe that such acts should be considered fraud and prosecuted more seriously.5 And this concern is warranted 25%of consum

16、er respondents admitted to knowing someone who has falsely reported packages as stolen in the past.To mitigate the increasing risk of fraud,many merchants are interested in having greater visibility into shipping-related issues,including insight into credit card fraud transactions(71%)and notificati

17、on of addresses with high claims(70%).10%020%30%40%50%100%90%80%70%60%Shipping-related issues that are important for businesses to have visibility into:Number of late shipmentsNumber of lost claimsNumber of credit card fraud transactionsNotification of addresses with high claimsNumber of porch pirac

18、y claimsNumber of damaged claims74%72%71%70%70%70%37%of merchants reported credit card fraud is a growing risk to their business.31%of merchants reported that return shipment fraud is significantly impacting their profitability from missing merchandise to altered labels and return addresses.27%of me

19、rchants stated that false reports of stolen packages are a growing issue.(Multiple responses allowed)The Annual State of Shipping Report 2022 5Extreme Weather Events Call for Increased ProtectionExtreme and unpredictable weather events caused by climate change have also proven to be an increasing th

20、reat to the shipping experience.Nearly all merchants(92%)anticipate an increase in shipping and delivery issues due to climate change over the next five years.Shoppers also see the impact that extreme or unpredictable weather is having on their online purchases,with 28%reporting an increase in damag

21、ed,spoiled,or lost packages this year.As a result,77%of shoppers now believe that extra steps are needed to protect their orders from weather issues.10%020%30%40%50%Shipping and delivery issues merchants forecast over the next 5 years due to climate change:Increase in shipping fees-42%Increase in sh

22、ipping/delivery delays-41%Increase in damaged or expired merchandise-40%Increase in claims made for damaged,expired,or lost packages-37%Larger investment in weather stabilizing shipment packaging-33%Greater need/or demand for faster delivery times-30%Greater need for shipment insurance policies-20%7

23、5%of merchants experienced an increase in damaged,expired,or lost packages due to climate change over the last 12 months.75%(Multiple responses allowed)The Annual State of Shipping Report 2022 6Preparing for the Holiday SeasonWith the holiday season fast approaching and incidences of extreme winter

24、weather conditions converging with increased sales traffic its important for merchants to be prepared for potential delivery challenges.Informed by shipping issues theyve experienced in past holiday seasons,merchants reported their top concerns heading into this new season.The research found that 44

25、%of shoppers experienced porch piracy last holiday season,and households with children were twice as likely to experience porch piracy compared to childless households.6 With this in mind,38%of shoppers reported they are less likely to shop online during the 2022 holiday season due to ongoing delive

26、ry issues,such as lost,stolen,damaged,or delayed packages.This change in consumer online shopping behavior should be a concern for eCommerce merchants,which rely on holiday shopping to boost sales and meet revenue goals.Top issues amongst shoppers who experienced delivery issues with online orders o

27、ver the last two holiday seasons:RANKEDIssues merchants experienced the most in 2020 and 2021 peak seasons,compared to concerns for 2022 peak seasonFigures represent responses from the 66%of consumers who experienced delivery issues.Figures represent aggregated rating of top three most cited issues.

28、While the top three from the last two years inform 2022 concerns,merchants expressed rising concerns of credit card fraud.Porch Piracy(59%)Late Shipments(55%)Credit Card Fraud(52%)2020 and 2021 IssuesPorch Piracy(63%)Credit Card Fraud(54%)Late Shipments(51%)2022 ConcernsLostItems55%Damaged Items36%P

29、orchPiracy35%LateShipping28%UnfulfilledOrders Due to Products Going Out of Stock19%The Annual State of Shipping Report 2022 7To improve the shopping experience,merchants must become intimately familiar with shoppers expectations for delivery issue resolution.When experiencing a lost,stolen,or damage

30、d package,for example,the majority of shoppers expect to receive a replacement(84%)or a refund(80%)within a week of notifying the merchant.With this in mind,merchants should anticipate spending additional time with customers when resolving issues of damaged or lost packages,especially during peak se

31、ason when delivery threats and pressured timelines may create heightened tension.By budgeting extra time to file claims and thoroughly educating staff on the claims process,merchants can improve claim procedures and focus on the customer experience.Meeting Customer Experience ExpectationsTwo-thirds(

32、66%)of merchants,however,reported that it may take more than a week for the package carrier or insurance company to resolve a claim,forcing merchants to cover replacement,reshipment,and refunds out of pocket until they receive claim resolution.The Annual State of Shipping Report 2022 8Claims Process

33、 Pain PointsIt cant be ignored that with new,emerging threats and continued customer demands for swift resolution,there is a pressing need to streamline the claims process for merchants.According to 53%of merchants,they often spend more than an hour on a single claim time that can add up quickly in

34、their peak season.Extensive paperwork required 74%Lengthy claims process(from filing to resolution)73%Claims not paid in full(do not cover full invoice value and shipping cost)66%Multiple follow-ups required to get claim approved 65%Claims denied due to porch piracy(theft after delivery)59%Top Five

35、Issues Merchants Typically Experience During the Claims Process:These issues remained consistent with UPS Capitals 2021 findings,indicating that the claims process has not seen significant improvements in the last year.The Annual State of Shipping Report 2022 9Fortunately,there is hope for improveme

36、nt.Through new and improved features,there is an opportunity to streamline the claims process for everyone involved.By moving to a digital experience,for example,merchants can eliminate extensive claim paperwork and track the progress of their claims in an easy-to-use dashboard,instead of shuffling

37、files and conducting multiple follow ups.According to our research,merchants also expressed a desire for improved shipping insurance features,including full claim refunds and payments for the expedited reshipment costs of lost items.Merchants also see the benefit of a digital claims experience from

38、an end-user experience perspective,with API integrations appealing to their desire for simpler claims processes and the ability to include shipment protection in the checkout cart.Merchant Desired Digital Features for Managing Your Shipping Insurance/Claims Experience:Merchants work hard to build a

39、strong customer base and maintain their reputation but,occasionally,factors outside of their control can cause shipping setbacks that affect their brand.As merchants rely more heavily on eCommerce,the need to protect against shipping risks is increasingly necessary.Digital Transformation in Claims a

40、nd Shipping InsuranceLittle or no paperwork needed during the claims processFull claim refund almost every timeFast claim refunds (4-7 days)Payment for expedited reshipment costs of lost items Ability to file and see claim status on the online shipping platformIn reference to UPS Capitals 2021 findi

41、ngs,in the last year,good customer service dropped from being the most attractive feature to being bumped out of the top five,while a desire for little to no claim paperwork rose to being the second most important feature.Figures represent aggregated rating of top three most attractive benefits of s

42、hipping insurance.60%57%52%44%38%Offer customer elected insurance in their checkout cart to share the insurance cost with customersAllow customers to select insurance coverage,file claims and upload paperwork right from their company website,via integrated APIs from their shipping insurance provider

43、Ability to submit and manage claims through an online portal,digitizing the claim process from start to finish86%64%53%Most Attractive Shipping Insurance Features to Merchants:The Annual State of Shipping Report 2022 10With InsureShield shipping insurance from UPS Capital,businesses can avoid the dr

44、ag of slow claims on their finances and protect their bottom line all while providing a better post-purchase experience.InsureShield policies offer comprehensive coverage and a variety of solutions for large and small merchants alike.And with consumer-elected options,including a Shopify app,merchant

45、s can customize their shipping experience.With proper resources like shipping insurance and a deep understanding of present and emerging risks,merchants can get the support they need during peak seasons and beyond.For more information,please visit Insurance coverage is underwritten by an authorized

46、insurance company and issued through licensed insurance producers,including UPS Capital Insurance Agency,Inc.(“UPSCIA”),a subsidiary of UPS Capital Corporation.The insurance company,UPSCIA and its licensed affiliates reserve the right to change or cancel the program at any time.This information does

47、 not in any way alter or amend the terms,limitations or exclusions of the applicable insurance policy or program.Insurance coverage is not available in all jurisdictions.2022 United Parcel Service of America,Inc.UPS,the UPS brandmark,UPS Capital,InsureShield,and the color brown are trademarks of Uni

48、ted Parcel Service of America,Inc.All rights reserved.The Annual State of Shipping Report 2022 11Sources:https:/ Survey:In the last year,how much money has your company lost as a result of lost,stolen or damaged shipments?Lost less than$10,00016%Lost$10,001$20,00015%Lost$20,001$50,00017%Lost$50,001$

49、100,00023%Lost$100,001$250,00018%Lost more than$250,00011%SMB Survey:On average,how often does your company experience porch piracy(theft after delivery)each month?Less than 2%of packages18%2 5%of packages16%6 10%of packages16%11 15%of packages15%16 20%of packages14%21 25%of packages11%26 30%of pack

50、ages 5%30%of packages or more5%SMB Survey:On average,how often does your company experience porch piracy(theft after delivery)each month?Revenue of$750K$1MRevenue of$1-$2M Revenue of$2$5MRevenue of$5$10MRevenue of$10$25MRevenue of$25$50MRevenue of$50$100MLess than 2%of packages34%17%21%16%9%21%15.3%

51、2 5%of packages12%28%23%16%17%9.5%13%6 10%of packages31%22%9%18%20%11%10%11 15%of packages9%12%28%21%11%14%17%16 20%of packages3%15%9%13%28%13%14.3%21 25%of packages11%1.5%6%11%11%15%12.3%26 30%of packages0%1.5%2%5%2%11%6%30%of packages or more0%3%2%0%2%5.5%12%SMB Survey:Please select the statements

52、 that you strongly agree with.Acts of porch piracy should be taken as seriously as theft in brick-and-mortar stores56%Porch piracy has become more of an issue for my business in 2022 than in any previous years40%Credit card fraud is a growing issue that is impacting my business37%Porch piracy is sig

53、nificantly impacting my business profitability35%Porch piracy has become one of the largest issues facing retailers34%Return shipment fraud(returns with missing merchandise,altered labels,or return addresses),is significantly impacting my business profitability31%False reports of stolen packages are

54、 a growing issue27%False reports of stolen packages should be considered as fraud and persecuted more seriously26%False reports of stolen packages have increased in 202220%Consumer Survey:Reflecting on the 2021 holiday shopping season(from September-December 2021),how many of your packages were stol

55、en off your porch or missing once they were claimed to be delivered?Select the number of packages stolen.Household with children 25 or youngerHousehold without children 25 or youngerTotal percentage of respondents experiencing at least one porch piracy incident64%33%Methodology:The 2022 Annual State

56、 of Shipping Study is based on an August 2022 survey conducted by Dynata of 500 U.S.SMBs owners and decision makers who leverage eCommerce platforms and marketplaces as part of their business strategy with revenue from$750K-$100M.This report also includes findings from Dynata of 1,000 U.S.consumers aged 18+.1 2 3456The Annual State of Shipping Report 2022 12