What is a Delivery Exception? Impact + How to Solve & Avoid Delivery Exceptions

Whether you know it or not, you’ve probably experienced a delivery exception before. In fact, Loqate found:

• 62% of online shoppers have experienced delivery exceptions.
• When this happens, 78% of consumers expect the retailer to resolve the issue (even if the failed delivery was the carrier’s fault). 
• 1 in 20 online orders never make it to the correct address. 

While shipping carriers will make every effort to ensure that packages meet their general and estimated delivery dates, there are many instances where the ability to deliver on time is outside of everyone’s control. It happens — but being prepared for such events and responding to customers when it does happen can affect whether they shop from you again in the future.

In this article, we’ll cover what delivery exceptions are, how they affect ecommerce brands, and what you can do to reduce them.  

What does delivery exception mean?

A delivery exception is when a package is temporarily stalled in transit for an unforeseen reason, which could delay when it arrives at its destination.

Also known as a shipping exception, these incidents happen for a variety of reasons (ranging from completely uncontrollable to sometimes preventable) but are usually unexpected.  

Note: A delivery exception does not necessarily mean the shipment will be late but that there was an issue that had an unplanned effect on delivery or required attention at some point along the journey.

How delivery exceptions affect your business

Ecommerce businesses know firsthand how troublesome delivery exceptions can be. Below are a few of the ways delivery exceptions directly impact your business, and why ecommerce businesses should take them seriously.  

Reduced customer satisfaction

Delivery exceptions are one reason why carriers and ecommerce businesses provide you with a tracking number for your package(s). This transparency gives you visibility into what’s happening once the shipment is in the carrier’s hands. 

But even with the most reliable ecommerce order tracking, a lot can happen to a package while it’s in transit — which may even go undocumented. That’s why delivery exceptions may result in delayed (or undelivered) packages, and thus frustrated customers.

Increased churn rate

While delivery exceptions are always unintentional and many times unpreventable, they are still a point of frustration for customers and must be dealt with carefully. 

If a customer has a poor delivery experience with the package they ordered from you, they may choose to not order from you again (even if it was technically the carrier’s fault or Mother Nature’s and considered “an act of God”).

Damaged brand reputation

Even though ecommerce brands aren’t at fault for many causes of delivery exceptions, some consumers may take it out on them — even if it was the consumer’s fault such as entering an invalid or undeliverable address. 

Decrease in revenue

Delivery exceptions, like shipping errors and returns, are very costly. This may include the cost of re-shipping the order — potentially in terms of inventory and packaging/label costs. 

Waste of resources

In addition to lost shipping and/or product costs, delivery exceptions may also result in a loss of other resources like marketing dollars and unrecoverable customer lifetime value (CLTV) from losing a customer to a delivery exception

Delivery exceptions also increase WISMO (“where is my order?” type of support inquiries), which bloat customer support teams and lead to hours spent on delivery questions.

8 common causes of delivery exceptions

While the overwhelming majority of online shoppers receive their packages on time, it’s still likely that you will encounter delivery exceptions. Here are the typical culprits.

1. Customs delays

International shipping is not without its challenges. Packages often get held up at customs longer than expected, which can result in missed delivery dates. Ensuring you have the proper tariff codes at the SKU-level can help make for a more seamless shipping process.

I’m a strong believer in having local inventory in the country that we ship to. I don’t like to do cross-border shipments, just because there’s so much potential for delays and customer issues.

So for us, it’s very important that the fulfillment company that we work with has the capability to grow with us and provide service in the countries in which we want to sell our products – and I see that with ShipBob.

Their goal is to continue building their global network so that their customers have as many global selling options as possible, so I definitely see that working for us in the long term. And ShipBob’s current footprint is very aligned with our top ecommerce markets and target audience.

Mithu Kuna, Founder and CEO of Baby Doppler 

2. Federal holidays

Packages may be delivered late if a national holiday occurs — either in the country of origin or the destination country — while a package is in transit. If it is a federal holiday, shipping carriers will not be operating. Because of the day off, it is not uncommon for carriers to be further delayed from needing to play catch up due to a backlog of shipments.

3. Weather conditions

If there is a weather issue or natural disaster (e.g., hurricane, tornado, wildfire, or flood) that renders a delivery route unpassable, the package will likely be delayed. These types of unpredictable delays beyond anyone’s control, known as “acts of God,” are usually regional.

If you use multiple fulfillment centers, you may be able to ship the order from a different location as long as it’s outside the path to avoid. Safety is a top priority, but so is customer service. Many carriers will have contingency plans in place and the shipment will arrive as soon as it can be resumed in the affected area.

During peak season one year, there was flooding in California, and things were a bit of a mess. We never expected or planned for our containers to be flooded – nobody thought we were going to be able to recover. But with ShipBob’s support, we were able to get our inventory live and online in time to meet the demand surge! We feel really good about how we handled that peak, and we could not have done it without ShipBob’s team.

Molly Noonan, Senior Manager, Supply Chain at Tonies 

4. Damaged or missing labels

If the shipping label on a package is damaged and the carrier cannot read the delivery address or scan the shipping barcode, the package may be delayed. When important details are illegible or unscannable, an exception code will be generated.

Similarly, if the label contains an incorrect address (undeliverable, unrecognized to carriers, incomplete, etc.), then it can get stuck in a delivery exception.

5. No one was home to receive the package

Packages may be delayed if they require a signature upon reception and no one was home to accept the package. When a recipient is unavailable, delivery is re-attempted the next day in most cases.

Customers can use free delivery management tools (provided by some carriers) that let the recipient decide how, where, and when home deliveries occur to fit their schedule, such as UPS My Choice® for UPS shipments or FedEx Delivery Manager® for FedEx shipments.

6. Missing documentation

One of the most preventable causes of delivery exceptions is related to having the wrong information for a package once in the carriers’ hands. This can be anything from a bad address to missing or incorrect customs information.

7. Security or regulatory delays

Security and regulatory delays could be related to threats posed to carriers, or issues at borders for international packages. These holdups can be temporary and lead to delivery exceptions. 

8. Animal interference

While rare, it’s possible a delivery exception is caused by an animal — from a dog in an urban setting, to a cow in a more rural environment — either getting into packages in transit or posing a threat to a delivery driver.

How to prevent delivery exceptions (and keep customers happy)

While some delivery exceptions are inevitable, there are some clear steps you and your customers can take to reduce the chance of them. 

Provide customers with a tracking page

Shipment tracking is table stakes for ecommerce orders. The more visibility you provide your customers into real-time delivery updates, the more likely they are to be home when that package arrives. 

Verify delivery address

The delivery address is typically the most important information on your package. Including all necessary information will ensure the carrier can successfully deliver the shipment to its intended destination!

There are nuances for residential vs. business addresses, domestic vs. international addresses, and other address types such as government mail. There’s also a very manual component to address-related delivery exceptions that’s prone to human error: typing in the wrong address. Fortunately, there are tools that help to prevent this. 

For example, ShipBob uses automatic address validation tools to review all address elements to determine their validity. If the address validation tool verifies the address is valid, but typos were made or data was entered incorrectly, the validation tool will make corrections and return a clean version of the address. Check out ShipBob’s address formatting guide here.

ShipBob also allows ecommerce brands to edit their orders in the ShipBob dashboard up until the point that the order is picked. That means if a customer entered the wrong address and catches it quickly, they still have time to potentially fix the error.  

Enable shipping notifications

Sharing updates, tracking links, and other measures to ensure they know where to go to see the latest on their package(s) — and even get proactive updates via email and text — will only help prevent delivery exceptions. 

Optimize logistics processes

While the best logistics strategies can’t eliminate chance events like a truck breaking down or an earthquake blocking, damaging, or closing roads, there is some planning you can do to reduce certain delivery exceptions and put contingencies in place for greater supply chain agility.

One example of this is distributing your inventory across multiple fulfillment centers to have orders ship from the most optimal location each time. This also serves as a back up, where if a certain region or area is devastated by a hurricane, for example, you’ll still have inventory in another facility to get orders shipped out. This is especially helpful for companies that sell essential or health products to keep their supply chain going in times of need. 

We sell flammable goods that need to be shipped via ground, so ShipBob has been a great ally as they have fulfillment centers all over the US, facilitating a 2-3 day delivery time for any customer in the US. This is helpful especially when weather challenges happen; being able to have different locations to ship from allows for a more seamless supply chain.

Andrea Lisbona, Founder & CEO of Touchland 

Use weather-resistant labels

When a package is in the carrier’s hands and then delivered at its destination, it is subject to inclement weather such as rain or snow. To prevent the chance of ink bleeding, consider using labels and paper that are waterproof. 

Partner with multiple carriers

Diversifying your carrier mix has several benefits, including not putting all your eggs in one basket. If one carrier is more prone to delivery exceptions in your experience, try using others to see if things improve.

Similarly, it’s important to be aware of carrier-limited addresses, or destination addresses that can only use certain carrier services. Examples of these addresses include PO boxes, military bases, prisons, etc. In the US, only USPS can deliver to these addresses. 

If an order’s address is a PO box and the shipping option selected is UPS Ground, for example, the carrier selection may need to be overridden to USPS.

A fulfillment partner should be able to help you find and use the right shipping partners for your brand. ShipBob, for example, partners with major carriers like DHL, FedEx, USPS, UPS, and more, and even negotiates bulk shipping discounts on your behalf.  

Use order fulfillment software

Many types of software in the logistics space can help with all of the above practices. For example, ShipBob’s software helps ensure all the proper fields are inputted for delivery addresses and beyond, helps you split your inventory, provides up-to-date tracking, and more.

Delivery exception by carrier

All major carriers have a delivery exception process in place and the consumer has the benefit of choosing a carrier that best meets their needs. Check out ShipBob’s page on USPS vs UPS vs Fedex to find out more.  

FedEx delivery exceptions

FedEx is arguably the most reliable of the major carriers, specializing in overnight and express shipping. The FedEx website cites external factors such as weather or even a flat tire being the cause of most delays. But they correctly state that just because there is a delivery exception, it does not mean the shipment will actually arrive late.  

UPS delivery exceptions

UPS is well-known for shipping larger and more valuable products, making a delivery exception all that more concerning. According to the UPS website, unknown addresses, damaged goods, or lack of signature upon delivery are common reasons for an exception. 

USPS delivery exceptions 

Since USPS is run by the United States federal government, the most common reason for a delivery exception is a federal holiday, of which there are 11. Customers will receive a delivery exception notice when tracking their package if there is a delay. USPS encourages customers to manage their orders and keep an eye on their packages with their Text Tracking™ and Informed Delivery® features. 

DHL delivery exceptions 

DHL also refers to their delivery exceptions as shipment exceptions, and since DHL is primarily an international carrier, oftentimes a delay is due to customs. Check out their page oncustoms compliance. 

3 best ways for ecommerce businesses to respond to delivery exceptions

Depending on the cause of a delivery exception, you may need to take certain actions. Here’s what to do if you notice an exception while a package is in transit.

1. Contact the carrier

You should be able to look online for the exact location of the package and the reason for the delivery exception. If you are using FedEx, having the FedEx tracking number readily available so you can track the shipment and share it with the customer (if you want to give them the ability to track shipments).

2. Contact the customer

If the customer’s shipping address is unknown or incorrect, you’ll want to reach out to them to verify the accuracy of the mailing address and make any needed corrections.

If you know of any delays and the reason for them (e.g., poor weather conditions that closed down the shipping location or caused the carrier to halt operations), be sure to inform the customer of both the delay and the reason.

Email those affected, apologize for the potential late shipment, and thank them for their patience.

Any opportunity to turn a suboptimal situation into a positive experience will be remembered for another sale and future delivery.

3. Issue a refund or resend the package

If the package cannot be delivered or if it was damaged in transit, speak with the customer about either issuing a refund or resending the package.

If the package was damaged in transit, then the cost may be completely covered depending on the shipping insurance for that package.

How ShipBob manages delivery exceptions

ShipBob is an expert ecommerce logistics partner that provides order fulfillment services for ecommerce merchants, including storing inventory, picking and packing orders, and shipping packages. Through our technology, there are several measures you can take to prevent and handle delivery exceptions with ease.

Preventing delivery exceptions

Sometimes customers make mistakes when entering address details. ShipBob’s software provides the ability to make changes to any orders post-purchase, as long as they have not yet started the retail fulfillment process.

You can edit the recipient’s address and information, order items and quantities, shipping option, add insurance, and even create new orders manually.

Responding to delivery exceptions

We understand and realize that in the world of shipping, damages and losses happen. ShipBob handles claims processing for our customers at no extra cost. All claims can be filed quickly and easily through ShipBob for packages lost or damaged in transit. You can also create a reshipment in the system and ship out the item to the recipient again by copying the order, and modify it if needed.

Since partnering with ShipBob, we’ve found that the fees are transparent, packages are getting lost less (which means we file less claims), and customer service is much more responsive and attentive. Plus, the shipping is actually faster!

Peter Liu, Co-Founder of RIFRUF 

ShipBob also has contact management features that make it easy to notify any affected customers that meet certain criteria. Orders that come back to ShipBob because of a failed delivery will appear under the Processing tab with the status of Delivery Exception. 

To learn more about how ShipBob can help you minimize delivery exceptions and optimize your overall shipping strategy, click the button below.  

Delivery exception FAQs

Below are answers to some of the most commonly asked questions about delivery exceptions in shipping.