Online and Mail Order and Logistics and Supply Chain Forums come together to fight ‘final mile fraud’ for the first time
Greater collaboration between online retailers and the parcel courier community would help reduce fraud and incidents of GLIT (Goods Lost in Transit)
This was the conclusion of two of ORIS’ Forums – Online and Mail Order and Logistics and Supply Chain – coming together for the first time to thrash out common objectives to fight ‘final mile’ fraud.
The meeting in Northampton on 12th February 2015 focussed upon common ground between online retailers and the parcel companies, as well as where there existed a divergence of opinion.
The meeting heard that problems often arise through a cost-driven culture where investment in safe and secure delivery is not always a driver, and environments where GLIT collusion and corruption could thrive.
Discussion centred around diverse subjects including retailers needing to maintain low courier costs, but desiring more secure delivery of goods and the prominence of corrupt delivery drivers, issues where both sides acknowledged that more could be done to tighten procedures and mitigate losses.
Both sides accepted that there needs to be a cultural shift from detection and arrest to prevention.
The meeting included examples of best practice including some carrier drivers being incentivised to report suspicious deliveries and prevent fraud, and a scheme whereby retailers pay a percentage of sales to the parcel companies so that they are able to employ an analyst to further reduce crime.
Other examples include lessons learned from ‘Shock Log’ technology used by one carrier, where information on where and how damages were occurring in the supply chain was identified and collated. The non-reporting of breakages at the time of occurrence, remains a key issue with most carriers.
Challenges discussed include a trend towards tighter delivery windows – from next day, to same day shipment – and the vetting of delivery drivers because CRB checking is arbitrary in an industry that is unregulated.
In addition each parcel courier provides a different service based on price and it is therefore difficult to implement the same standard across the board.
There was also discussion around how head office carrier contacts could better disseminate information to area/depot manager, and the need for Claims and Fraud to be embedded into Carrier Operational Field team culture more effectively.
There is also a disconnect between the LP function and the carrier negotiations as most heads of LP were not part of the contractual discussions to ensure security clauses and incentives are included. There was also discussion around the table regarding the need for retailers to build quality measurements covering claims/fraud into commercial agreements with carriers, which would increase the partnership approach to delivering a service.
In a question and answer session, it was agreed that better partnering between retailers and carriers is essential. This included open and honest sharing of data and one carrier with this process in place has managed to reduce claims by 65% year on year. Both sides would welcome intelligence on suspicious activities of staff or customers so that collective solutions could be investigated including the ad-hoc use of surveillance or tracker devices.
It was also conceded that better reporting on suspicious activity should be more specifically part of partnership agreements, through the inclusion of a clause written into contracts specifically around loss prevention.
There was further discussion around more proactive, real-time information because many retailers do not realise there is an issue with a delivery until a complaint arrives. The debate centred around so-called ‘In-flight options’ on last minute changes of address or delivery point, to keep all parties updated in real-time. However, it was acknowledged that additional service options come at a price.
Chair of the Online and Mail Order Forum, Alison Parkinson, said: “The discussion between the Forums was a good meeting of minds and it is a debate we will return to in order to help drive more collaborative working. When customers buy online, part of the promise is the safe delivery of their purchases. Both retailers and carriers have to work better and smarter to achieve this final mile service.”
Marie Griffiths, chair of the Logistics and Supply Chain Forum, added: “We had a useful discussion and we have agreed to meet again to pick up some of these themes in more detail. The debate is also very timely as more is expected of our carriers so we need to work more closely in partnership and collaborate better on suspicious activity. This will drive better practice and reduce losses in the supply chain.”