Updated Janurary 2026
A single failed delivery costs the average business over $17 in direct expenses—and that's before you count the customer service calls, the refunds, and the customer who quietly decides to shop somewhere else next time.
For companies shipping at scale, even a modest 5% failure rate can drain tens of thousands of dollars monthly from margins that were already tight. This article breaks down exactly where those costs hide, why they multiply faster than most businesses expect, and what you can do to prevent them.
Why failed deliveries matter to your bottom line
A failed delivery happens when a package can't be handed off to the recipient on the first attempt. Maybe the address was wrong, the customer wasn't home, or the driver couldn't access the building. Whatever the reason, the cost goes far beyond just sending someone back out the next day.
Here's what makes failed deliveries so expensive: they trigger a chain reaction across your entire operation. The logistics team pays for the redelivery. Customer service handles the complaint calls. Marketing watches repeat purchase rates drop. Finance sees margins shrink. And because the costs are spread across departments, most businesses never see the full picture.
The real damage often shows up in places you wouldn't expect. A single failed delivery can cost $17 or more in direct expenses, but when you add customer service time, refunds, and lost future orders, that number climbs to $25–$40 per incident. For businesses shipping hundreds or thousands of packages monthly, even a small failure rate adds up fast.
The true cost of a single failed delivery
When a delivery fails, the expenses don't stop at fuel and driver time. They ripple outward in ways that are easy to miss if you're only looking at your shipping invoices.
Direct redelivery expenses
Every reattempt means paying twice for what was supposed to be one trip, contributing to last-mile costs that now represent 53% of total shipping expenses. The driver goes back out, burns more fuel, and spends more time on a delivery that already happened once. Vehicle wear increases with each extra mile.
Think about it this way: a $10 delivery that fails twice can easily cost $25 or more once you factor in labor, fuel, and the administrative work of rescheduling. Now multiply that across your monthly volume.
Customer service and support costs
Failed deliveries flood your support channels. Customers call or email asking "Where's my package?" and each inquiry takes staff time to investigate, coordinate with the carrier, and follow up.
The industry calls these WISMO inquiries, short for "Where Is My Order." They account for 18% of ecommerce support tickets and pull your team away from more valuable work. The administrative burden of rescheduling, processing complaints, and updating order statuses rarely shows up in delivery cost calculations, but it's very real.
Refunds and goodwill credits
To keep disappointed customers from leaving, many businesses offer partial refunds, discount codes, or free shipping on future orders. While these gestures can save the relationship, they directly cut into revenue from transactions that were supposed to be profitable.
The more often deliveries fail, the more often you find yourself giving away margin just to maintain goodwill.
Lost customer lifetime value
The biggest hidden cost is the customer who quietly takes their business elsewhere. Research from DispatchTrack found that 47% of customers will switch to a competitor after just two poor delivery experiences. And here's the part that stings: customers typically blame the retailer, not the carrier.
Your brand absorbs the reputational damage regardless of who actually caused the problem. A customer who had a bad delivery experience doesn't think "that carrier was unreliable." They think "that company let me down."
How hidden costs multiply at scale
A 5% failure rate might sound acceptable when you're looking at individual orders. But when you apply that rate across your actual shipping volume, the math gets uncomfortable.
Keep in mind, this table only captures direct costs. It doesn't include the support hours, the refunds, or the lifetime value of customers who never come back. Because expenses are distributed across different teams rather than consolidated in one line item, businesses often underestimate how much failed deliveries actually cost them.
Common challenges in last-mile delivery that cause failures
Understanding why deliveries fail helps you focus prevention efforts where they'll have the biggest impact. While every operation is different, certain problems show up again and again.
Inefficient route planning
Poor routing leads to missed delivery windows and rushed drivers. When someone is racing against an unrealistic schedule, they're more likely to skip difficult stops or make mistakes that result in failed attempts.
Static routes that don't account for real-time traffic, construction, or weather set drivers up for failure before they even leave the depot. A route that worked perfectly last Tuesday might be a disaster today.
Unpredictable customer availability
The recipient not being home remains the leading cause of failed first attempts, especially for packages that require a signature. This challenge has gotten worse as delivery windows have narrowed and customer schedules have become less predictable.
Without tools that let customers communicate their availability or redirect packages, drivers often arrive at empty homes with no option but to try again later.
Poor communication and visibility gaps
When customers don't know when their package will arrive, they can't plan to be available. Missing delivery notifications, lack of real-time tracking, and no way to reschedule or redirect shipments all contribute to preventable failures.
Industry data suggests that roughly 40% of failed deliveries stem from address errors or incomplete information. Better communication systems can catch many of these problems before a driver ever leaves the warehouse.
Rising customer expectations
Same-day and next-day delivery promises have compressed acceptable delivery windows dramatically. What used to be a two-day window is now measured in hours, with 80% of consumers now expecting same-day delivery as standard.
This compression leaves less room for error. When expectations outpace operational capability, failure rates climb.
How to reduce failed deliveries
Most delivery failures are preventable. The right combination of technology, communication, and customer empowerment can dramatically improve first-attempt success rates.
Real-time tracking and delivery visibility
Live tracking lets both shippers and recipients monitor delivery progress as it happens. This visibility reduces uncertainty and helps customers prepare for arrival.
Platforms that provide real-time updates, like Koorier's shipper control center, give operations teams the information they need to intervene before a delivery fails rather than reacting afterward.
Proactive customer communication
Automated notifications via SMS or email alert customers before the driver arrives. This simple step addresses one of the most common failure causes: the customer simply not knowing when to expect their package.
Effective communication goes beyond "your package is on the way." It includes estimated arrival windows and easy options to reschedule if the timing doesn't work.
Route optimization technology
AI-powered routing accounts for traffic patterns, delivery windows, driver capacity, and historical success rates at specific addresses. These systems adjust throughout the day as conditions change.
Smart routing doesn't just improve efficiency. It directly reduces failures by ensuring drivers have realistic schedules and adequate time at each stop.
Flexible delivery options for recipients
Giving customers control over their delivery experience dramatically reduces failures. Options like rescheduling, safe-drop authorization, or alternate delivery locations address the availability problem at its source.
When recipients can manage their own delivery preferences, as Koorier's consignee tools enable, they become partners in ensuring successful delivery rather than passive participants hoping the timing works out.
Protect your margins with smarter last-mile logistics
Failed deliveries represent one of the most preventable sources of profit loss in ecommerce and retail. The costs are real, they're substantial, and they compound over time.
Investing in visibility, communication, and customer control pays for itself through reduced failures, lower support costs, and improved retention. The technology exists today to address the root causes of most delivery failures.
Ready to reduce failed deliveries and protect your margins? Request a shipping quote from Koorier to see how real-time visibility and consignee control can improve your last-mile performance.
Author & Authority
By Giovanna Freitas
Marketing specialist at Koorier
About Koorier
Koorier is a Canadian logistics technology company specializing in regional last-mile delivery networks and real-time delivery visibility for retailers and enterprises.
FAQs about failed delivery costs
What is a good first-attempt delivery success rate for last-mile logistics?
Most well-optimized delivery operations aim for first-attempt success rates above 90%. Top performers often achieve 95% or higher through proactive communication, accurate address validation, and tools that give recipients flexibility to manage their deliveries.
How can businesses calculate the total cost of failed deliveries?
Start by adding direct costs: redelivery expenses, customer service labor for related inquiries, and refunds or credits issued. Then estimate indirect costs like lost customer lifetime value based on your churn data. Multiply the total per-failure cost by your monthly failure volume to see the full impact.
Do failed deliveries negatively affect brand reputation?
Yes, and often more than businesses realize. Customers typically associate delivery failures with the retailer rather than the carrier, leading to negative reviews, reduced trust, and lower repeat purchase rates.
Which product categories experience the highest failed delivery rates?
Items requiring signatures, high-value goods, perishables, and bulky products tend to have higher failure rates. These categories often require recipient presence or special handling, making customer availability and communication even more critical.
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