More than 1 in 10 packages 'disappear without explanation' in major US cities, and it's a huge headache for retailers
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- In major cities like New York; Washington, DC; and Denver, an estimated 15% of online shopping deliveries never make it to their final destination, according to a New York Times report published on Tuesday.
- In New York City, the report said, more than 90,000 packages disappear daily, contributing to growing problems for retailers and delivery service companies dealing with an estimated $25 million in lost goods and services.
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A growing percentage of packages are going missing in major cities like New York; Washington, DC; and Denver, and it's becoming a major problem for retailers like Amazon.
According to a New York Times report published Tuesday, an estimated 15% of all online shopping deliveries in urban areas fail to reach their final destination due to theft or logistics issues. Reporters Winnie Hu and Matthew Haag found that in New York City alone, more than 90,000 packages "disappear without explanation" each day - an increase of 20% from 2015.
Nationwide, more than 1.7 million packages disappear every day, contributing to a total of $25 million in lost goods and services, the report found.
While brands have started offering options like buy-online-pickup-in-store, and retailers like Amazon have implemented locker services to aid with package pickup, it appears it hasn't been enough to curtail the rampant loss. In turn, the onus is increasingly falling on shoppers to halt thieves, using a variety of tactics like installing video doorbells or redirecting packages to alternative venues like offices or commercial spaces, according to The New York Times.
How retailers handle lost and stolen packages varies by company, but there's no doubt that compensating for missing items is adding to existing financial headaches around the cost of doing business online. Returns, for example, are becoming a major financial suck for brands. Online returns cost double what they cost in store, according to a report from AlixPartners.
Leading into the peak of holiday shopping season, UPS said it anticipates receiving one million returns each day during the month of December, contributing to even more stress for retailers. UPS reported that returns are expected to reach a high of 1.9 million packages on January 2, an increase of 26% from the previous year.
"As retailers start preparing for the busy holiday season, they should certainly be factoring returns into their business plans," UPS' chief marketing officer, Kevin Warren, said in a news release in November.
While retailers certainly have their work cut out for them when it comes to preventing package theft, customers are finding more third-party services at their disposal to ensure safe delivery. In New York, startups are emerging for shoppers "willing to pay extra to ship them to a home-based network of package receivers," the New York Times reported.
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