Top three shipping issues caused by rising e-commerce volumes are…

A new survey reveals the impact of e-commerce growth on retail shipping.

According to the survey of retailers from UPS Capital, the three leading challenges increased e-commerce volumes are having on shipping are:

• Fulfillment speed challenges;
• Managing spikes in demand during peak periods; and
• Enabling more real-time shipment tracking and transparency.

Respondents indicate that during the past two years, e-commerce growth has created an average 30% increase in shipping volume, with 54% of respondents reporting more than 30% shipping volume growth in that time.

Retailers turn to AI to solve shipping woes

The survey also reveals that more than three-in-four (77%) respondents have implemented some form of AI-enabled technology. Benefits respondents anticipate from deploying AI-driven shipping solutions include enhancing efficiency (67%), reducing human error (58%), and improving inventory management in warehouses (44%).

[Read more: Study: Supply chain execs turn to AI]

Returns pose continuing problems

Six-in-10 respondents acknowledged that more than 10% of their online orders end up being returned. Interestingly, while 92% of respondents expressed confidence in their returns logistics, they also reported encountering significant challenges in processing returns, such as:

• Processing time (50%)
• Cost of reverse logistics (43%)
• Identifying root causes (36%)
• Customer service impact (36%)
• Inventory management (33%)
• Financial forecasting (30%)

Respondents indicated they see data analytics and automation as potential solutions to alleviate some of the challenges posed by returns. Specifically, they see these technologies as instrumental in optimizing inventory management (50%) and reducing return processing costs through optimized return shipping (37%).

Other findings

More than half of respondents are prepared to offer exclusive discounts (55%), redeemable rewards (55%), and early access to new products/services (54%). UPS Capital also surveyed consumers, finding that 48% of consumer respondents intend to increase their online spending in 2024. 

In addition, eight-in-10 surveyed consumers said free shipping is one of the most appealing benefits that retailers offer, second to 49% who cited loyalty programs.