Courier efficiency has come a long way since Ancient Greek messengers, carrier pigeons and the Pony Express – but modern couriers now encounter modern delivery issues. 

From system failures to handling errors, roughly one in ten deliveries in Western Europe encounters an issue, such as delay, loss or damage. These delivery issues are highly damaging to online retailers, leading to lost revenue and low customer satisfaction. But now retailers are fighting back with automated courier claims. 

We spoke to our CEO and Co-Founder, Andy Watson, to find out why and how retailers are taking control of courier claims with AI. 

Why did you set up Claimit?

Anyone that has worked in e-commerce has experienced the pain of lost or damaged shipments. It’s just part and parcel of the industry, excuse the pun. But nowadays, lost or damaged shipments are happening so frequently that e-commerce companies can no longer write them off as business costs.

All the major couriers offer a form of liability, usually up to £100 for each product, but the claims processes are so complex and time-consuming, that many e-commerce retailers don’t think it’s worth the effort. My Co-Founder (David Walker) and I have spent most of our careers in the logistics and e-commerce industries. We’ve experienced first-hand how frustrating the claims processes can be. So we decided to set up Claimit to simplify and automate the claims process for businesses worldwide, so they can recover what they’re owed quickly and efficiently.

Why is courier claims automation having a moment right now? 

Put simply: the problem has got bigger and the solution has got easier.  

Firstly, there are more delivery issues than ever before. Last year, there were almost 280 billion packages shipped globally, of which an estimated 1% were lost. When you factor in the myriad ways a parcel can ‘fall off the truck’ – be it loading problems, warehousing issues, last-mile logistics or simply human error – retailers are getting fed up with shipments ‘lost in transit.’ 

Given recent economic conditions, revenue retention is currently vital for online retailers and AI has made courier claims low-hanging fruit in that regard. Now, instead of waving goodbye to lost revenue, you can claim it back from couriers in a few clicks. 

How has AI transformed the courier claims process?

Making claims for lost or damaged shipments used to be a nightmare for retailers. It took ages to compile all the information, you had to submit complex claims forms within tight deadlines and then run the risk of claims denials for a typo on the product serial number. 

Now, AI automates the whole process, not only saving time, but also cutting out the errors and increasing the claims success rates. 

What’s more, automated claims pay out quicker. Instead of waiting for a customer to complain about a lost shipment, AI can spot the shipping error, fill in the claims form using info from your CRM, and then track the claim until you receive compensation. At Claimit, we’ve seen e-commerce retailers recoup costs in under a week, so it’s a no-brainer if you send out lots of shipments per month. 

Why does claims automation specifically help online retailers?

To generalise: the more shipments you send, the more you benefit from claims automation. If a high proportion of your sales are in-store or picked up via click and collect, delivery issues are naturally less of a problem. But for many online retailers, shipping goods to homes or businesses is the only way they deliver their goods and the only way they earn revenue. Therefore, if you have a problem with 10% of your shipments, that’s 10% of your revenue gone, even before you factor in the resource costs or the damage from poor customer experience. 

How much could automated claims boost an online retailer’s P&L?

Not all online retailers feel the same pain. If you’re an online furniture store that sends bulky items via specialised couriers, you’re less likely to have a delivery issue than sellers shipping thousands of smaller, lower-value items per month. 

Take fashion sales, for example. 60% of clothing and footwear is sold online in the UK. If you send 5,000 courier shipments each month, with an average value of £40, you only have to experience problems with 5% of deliveries to lose out on £10,000. Well, guess what? In the UK, there’s an issue with 6.5% of deliveries. That means, over the course of the year, many retailers could be losing out on £100,000+ revenue, which could make a real difference to the balance sheet come year-end.  

What do you aim to achieve by automating courier claims? 

In the short-run, it’s about helping retailers navigate a tricky economic period. Last year, some of our customers clawed back six figures in compensation by automating courier claims. The payouts also came in 40% quicker than manual claims, which is good for cash flow, and automation reduces manual work by up to 80%, freeing up the customer team’s time. 

But ultimately, I hope that courier claims automation will improve the purchase experience across the board. More successful claims will force couriers to implement better measures to prevent loss or damage. This will lead to a better service for end-customers, less hassle for retailers, and less problems for couriers. 

What’s your advice for e-commerce retailers thinking about automating their courier claims?

Do some quick research. Automated claims doesn’t have the same impact for every business, but it’s really beneficial if you send more than 5,000 courier shipments per month and currently rely on manual submissions to make claims. 

So take a look at your sales and logistics data from last year or last month:

  • How many lost or damaged shipments were there? 
  • What was the value of the goods? 
  • How much time did you spend on claims? 
  • How successful were those claims? 

If you’re looking at a lot of red, then why not try claims automation? It doesn’t take any time or cost anything if claims are not successful (at Claimit, we just take 25% per successful claim). 

Final question: we hear you have a massive dog, but how big is it? 

Haha. Well, he’s a 46kg Fox Red Labrador called Charlie, who is integral to our claims process and general office moral!

To find out how much you could save, check out our claims calculator or book a demo with us.