Like any growing or emerging industry, the rise of online shopping has brought with it benefits as well as threats.
A society-wide increase in product deliveries has resulted in growing numbers of unattended packages, creating abundant opportunities for thieves – known as porch pirates – to steal parcels from doorsteps, apartment waiting areas and other unsecured locations.
Porch piracy is a serious problem in Canada. According to isure Insurance, nearly one quarter of Canadians have had a package stolen, at an average value of CAD $113 per package, resulting in losses of CAD $784 million across the country.
The Impact of Porch Piracy on E-Commerce and Consumers
Financial Loss: Porch piracy has negative financial consequences for consumers, e-commerce companies and distributors.
In a 2023 survey, SafeWise, a home security company, reported that in the US, 47% of porch piracy victims were provided with a replacement from the seller; 37% were provided with a refund from the seller; and 15% were provided a refund from the last-mile delivery company that delivered the package.
In addition to the cost to replace the product, ecommerce and last-mile delivery companies also need to dedicate customer service resources to manage refunds and provide replacements.
These costs are typically accounted for in the financial models of e-commerce and delivery companies, and that cost is ultimately passed onto consumers through higher prices for goods and services.
Loss of Trust: When a consumer’s package is stolen, it can create a negative impression of the brand they purchased from, which can harm customer loyalty and brand reputation. It can also result in a loss of trust between ecommerce companies and their last-mile delivery carriers, as repeated thefts can call into question the effectiveness of a last-mile service’s safety protocols.
Law Enforcement Challenges: Porch piracy is difficult to police as porch pirates often work as individuals or in small groups, and large numbers of them can be operating in a given geographic area at any time. With limited resources, and all manner of crimes to investigate and prosecute, law enforcement agencies can often face limitations for implementing far-reaching solutions. This increases the responsibility for last-mile delivery companies to find innovative solutions to reduce theft.
Inconvenience: Porch piracy is just plain inconvenient for everyone. Consumers have to deal lost items, having to obtain refunds or reorder products, and a loss of trust that their products will be delivered safely. E-commerce companies and last-mile delivery service providers bear the cost of replacements, harm to their brands, and managing through providing refunds and replacements. Porch piracy results in considerable lost time and frustration for all concerned.
How Last-Mile Logistics Companies Use AI to Fight Porch Piracy
Last-mile logistics companies are a big player in the fight against porch piracy. And by using new and emerging artificial intelligence tools, they are helping to mitigate the impacts of parcel theft. Some ways last-mile service provider use AI to fight porch piracy include:
1. Real-Time Tracking and ETAs
AI enables accurate tracking and delivery time estimates, helping last-mile logistics companies and consumers time deliveries and plan for package arrivals. This reduces the chances of packages being left unattended, as customers can arrange to be home for deliveries. AI-powered chatbots are used to facilitate seamless communication that allow for a high level of coordination between customers, dispatch managers, and drivers.
2. Proof of Delivery (POD)
Visual confirmation and other proofs of delivery, such as photos or digital signatures, can be shared instantly with customers and product sellers. This increases transparency and trust, reducing disputes over stolen packages, and providing visual confirmation for where and when packages were delivered.
3. Data Collection and Analyzing
AI tools can collect and analyze massive amounts of data. By collecting data on the frequency of porch piracy in a given area and integrating this data with customer preferences – such as preferred drop-off locations and delivery times – companies can develop strategies to improve delivery success rates and reduce incidents of theft. Additionally, this information can be shared with drivers in real time to help them take extra precautions when delivering high-value packages.
4. Using One-Time-Passwords and Digital Signatures
One-time passwords (OTPs) and digital signatures provide an extra layer of security for package recipients. AI-generated OTPs are sent to customers before delivery, ensuring the package is handed over securely. This two-factor authentication process, combined with digital signatures, helps verify the successful delivery of parcels to intended recipients and reduces incidents of porch piracy.
5. Address Verification and Route Optimization
AI enhances address verification by comparing customer addresses against global databases. It also factors in traffic, weather, and historical data to optimize routes and predict delivery times. Higher levels of location accuracy and more pinpointed delivery times lessen the window for packages to be left unattended, reducing opportunities for porch piracy.
Investment in Innovation Matters
Choosing a last-mile delivery provider who invests in AI-driven solutions is vital for businesses looking to stay competitive in the modern logistics landscape. AI-enabled logistics providers are better equipped to reduce theft and can provide other business benefits such as more streamlined operations, stronger reporting, and effective cost management.
At Koorier, our custom software uses AI to help deliver packages safely and accurately. If you’re interested in learning more about how we leverage technology to deliver premium last-mile logistics services, get in touch with us today.
