More and more shipments are being processed worldwide at dizzying speeds. But not all parcels are labelled sufficiently with barcodes and data, and the increase in unreadable or unsolvable parcels can cause an otherwise efficient distribution to get clogged.
By Jan Schroeder
Parcel distributors are experiencing an unparalleled rise in problematic shipments arriving at their distribution centres. One issue in particular is becoming more pronounced: the issue of “unsolvable parcels”. While commonly referred to as “no reads”, this term only partially covers the issue of unsolvable parcels, which can include parcels with missing, damaged, or invalid barcodes. By the end of this article, you will have a better understanding of what causes a parcel to be non-processable; is it actually because of a no-read issue or is it something else?
To maintain competitiveness in a fast-paced industry, distribution centres need to stay on schedule. But when “no read”, or unsolvable, items enter the finely tuned operations of a sortation loop, they can cause sudden disruptions, and in worst cases, a loss in profit for CEP companies.
The CEP industry usually distinguish parcels by whether or not they can be automatically sorted; good versus bad items.
A “good item” flows through sortation, from door to door, with just two manual touches: Onto the sortation system and into the delivery truck. What happens in-between is handled automatically. In these instances, parcels contain clear information about where they’re coming from, where they’re going, and how they’re going there. When automated flows break, it’s usually because sortation systems can’t find this information, causing the parcel to be unsolvable.
Distributors tend to think of “no reads” as one category of parcels, but in reality a parcel might be flagged as a such for several reasons:
While most distributors are aware of the challenges related to issues 1 and 2, it’s actually the issues of unsolvable parcels (3 and 4) that are most disruptive to CEP operations. In other words, just because a barcode seems legible, it’s not a guarantee for automated sortation. Limiting the occurrence of unsolvable parcels is key to reducing costs. As such, it’s important to recognise that a “no-read” parcel might in fact be readable, but unsolvable.
There are at least three e-commerce trends in particular which cause the number of unreadable parcels to grow: more consumer-to-consumer parcels, more returned goods and the emergence of more global e-tailers with different standards for how to label shipments.
Increasingly, parcel shipments are happening across regional borders. In the globalised world of e-commerce, consumers have for a while now been accustomed to purchasing goods from global e-tailers both within and outside of their region of residence. Standards for packaging, wrapping and labelling parcels vary significantly between e-tailers – while standards for parcel data management varies between CEP distributors.
This rarely happens.
Consumer-to-consumer shipping accounts for shipping between private households. This is enabled by the emergence of various online peer-to-peer marketplaces and resale platforms. C2C shipping is challenging to CEP providers because parcel labels are often printed at home on personal printers.
Home-printed labels can be problematic for reasons that are not necessarily visible to the human eye. But a high-speed barcode scanner sees everything and can have trouble reading these home-printed labels as proper barcodes. The same issue is also true for returned goods, that is, when consumers ship parcels back to retailers (C2B).
No reads can also occur because service providers handle items in ways that damage barcodes or if staff at parcel drop-off points are not ensuring correct labelling.
Read more: “Small parcel or large letter? How distribution centres can handle rest mail”
Very often, a data issue occurs because the sender has not followed the distributor’s conventions for how information is structured in a barcode. This issue is amplified by the fact that there is no universal standard for data management in parcel shipment. Some postal services have developed a shared standard, but there’s no general consensus on either domestic or global levels.
A common issue experienced by CEP providers is barcode labels with missing data. Usually, in these cases, the label seems fine and is physically in good shape, but the barcode doesn’t contain any data about where the parcel is going, for example, or the barcode contains a tracking number that can’t be found in the database used by the sortation system.
When parcels are missing data, it can also be caused by e-tailers using proprietary or niche IT systems, which don’t integrate well with more established systems. This means they can’t translate each other’s data entries – or even exchange data at all.
As with home-printed labels of inadequate quality, missing data is a recurring issue for parcels coming from smaller, niche e-tailers who don’t have the necessary equipment or know-how for labelling parcels correctly.
On average, 5 % of the parcels entering hubs don’t come with sufficient data. For a distribution centre handling a large number of parcels imported from outside Europe, for example, this number will often be higher. In short, without sort data, a barcode is useless – and the parcel will not be accepted for automated sortation.
In parcel operations with automated sortation, more than 99 % of parcels with valid labels are read. That’s quite impressive considering that parcels often flow at up to three meters per second – or 11 kilometres per hour.
When a parcel label has been read by the scanner, the sortation system knows where on the item the barcode is placed, which condition the barcode is in, and of course which data the barcode contains.
With the high speed of today’s parcel distribution in mind, unsolvable parcels can easily clog up sortation systems and drive up processing costs in several ways:
Whenever a parcel cannot be sorted based on the barcode, the item is diverted from the automated system to be handled by operators who need to code the item manually. A human operator will have to process the parcel and re-induct it into the sortation system – the exact process you’re trying to avoid if you’ve invested in automated sortation. Because a processed unsolvable will have to be re-inducted into the system, every unsolvable requires at least double the processing as automatically processed items.
“Every unsolvable requires at least double the processing as automatically processed items.”
In extension of the above, the more unsolvable parcels need handling, the more reliant you become on manual labour. And as such, the more manning is required. Usually, the operators needed for the task of turning an unsolvable into a “good read” are more expensive as they must have a certain level of training and be skilled to a certain level in data processing and data management.
Handling unsolvable parcels requires floor space, which is a scarce and very expensive resource in distribution centres with floor layouts carefully optimised for reducing “waste” paths. The additional floor space goes to:
Turning unsolvable parcels into processable items is an office task as it usually involves data management. Having a desktop workstation in a production environment poses some challenges, both from a cost perspective and in terms of process efficiency.
Read more: “How to improve work environment at distribution centres with ergonomic design”.
The disruptions outlined above to both systems and work processes set off cascading effects in parcel distribution:
If your distribution centre has fixed throughput capacity, it will be jeopardised, because the induction area needs to process each unsolvable parcel at least twice.
Manual handling disrupts operations and can set off a chain reaction: The parcel stays in the hub’s sortation system longer than expected, delivery trucks are delayed, and the parcel doesn’t reach its destination on time. For example, if a long-haul truck leaves a big city just one hour later than planned, it risks running into rush hour traffic, messing up the planned rest schedule, and as a result arriving at its destination 3,000 km away, up to half a day later.
In a market where reliability is everything, such a delay is catastrophic to CEP providers: The delay can grow like a snowball and disrupt operations down through the distribution line.
Additional manning and facilities are the obvious cost drivers for handling unsolvable parcels in distribution. Another, less evident reason, is how these parcels are handled: If a parcel’s data contains unclear instructions about the delivery service assigned to it—2-day versus overnight service, for example—service-minded CEP operators will typically default to the better, and more expensive, service to reduce the risk of complaints. If the service upgrade is unwarranted, then the CEP provider has lost money. In short, handling unsolvable parcels is typically at the expense of the CEP operator – not their customers.
“Handling unsolvable parcels is typically at the expense of the CEP operator – not their customers.”
unsolvable parcels are not always undergoing the necessary rework. In some cases, after being picked up manually, the operator might simply look at the parcel label, e.g. the destination postal code, and bring it to the correct gate for delivery. As a consequence, the parcel goes ‘under the radar’ and is not properly tracked. Although it’s due diligence from the operator’s side, this action might cause problems whenever distributors need to invoice the customer for the shipment, or otherwise document its journey. It also doesn’t help operators to improve handling processes.
If an unsolvable parcel continues to the next point in the distribution network without corrective label rework, the problem has not been fixed, it’s simply been passed on. So the next hub or depot down the line will experience the same issues listed above.
In general, there are three areas CEP companies can optimise to improve how they deal with unsolvable parcels. We’ll go through each area in more detail below.
There is no single technology which will solve all the sources for no-read errors, but when used in combination, you will get a long way. Different approaches solve different issues:
Video coding can eliminate the need for physical handling of unsolvable parcels. This technology captures images of parcels—usually from different angles—which an operator can then look at on a computer screen. This way, the operator can analyse why the item was flagged as a no-read and enrich the data with missing information, e.g. postal code, without having to physically pick up the parcel.
Capturing images for operators to analyse is nothing new. However, BEUMER Group is taking this concept to the next level by integrating business logic, sortation system algorithms, and latest software to help the operator in as many ways possible.
One of the benefits of video coding technology, is that the analysis can be done remotely: As mentioned earlier, data enrichment is an office job, and the VCS operator can do this in an office space rather than on the floor of the distribution centre.
The label reader captures an image of the label, and the system then analyses the contents of the label using Optical Character Recognition (OCR) technology. The approach of using OCR are similar to the use of video coding, but instead of an operator looking up the required code, the system will use OCR for looking up the information.
If an item has neither data attached to its barcode, nor a tracking number, the sortation system can automatically apply a new label with a sequential number which then qualifies the item for video coding and further sortation. This approach is not widely used, and it requires that the sortation system can read the address on the existing label to produce a new label. As with re-coding, using video or OCR, automated relabelling makes sure the unsolvable parcel isn’t passed on in the distribution line.
Traditional laser scanners have trouble reading damaged barcodes and they stop after reading the first barcode. More intelligent camera-based scanners will capture images of anything that might contain useful data, including damaged and additional barcodes.
Even with low-quality barcodes, especially home-printed labels, smart image handling software is often able to put together what the barcode is intended to look like to get just enough data to be able to process the item.
Get the full overview: Read our guide to e-commerce logistics for parcel distributors.
Distributors often spend more time figuring out where unsolvable parcels should go, and less time on why the sortation system is flagging items as no-reads. To optimise processes, you need this data. Are unsolvable parcels caused by damaged labels, missing data, or both? This will affect which technology to invest in, but also help you set up feedback loops in and outside your organisation.
Insights about unsolvable parcels can help distributors in various ways:
Gathering data about the frequency and causes of unsolvable parcels can help distributors better deal with incoming parcels. Knowing for example that requests for video coding increases every time you receive an item from a magazine distributor helps you plan work schedules, processes, etc.
Read more: “How to get the parcel mix right for your distribution centre?”
If the operator manning the no-read chute is informed by the sortation system about what kind of data is missing from an unsolvable parcel, he or she already knows which data to look up and add to the item for it to be swiftly re-inducted for automated sorting. If using video coding, the item doesn’t even have to leave the sortation loop while the operator re-keys the data.
With analytics about which customers are causing which no-read issues, and how often, distributors can present these insights to their customers, e.g. e-tailers, to find a shared solution for bringing the cost per item down.
Often, it’s just a matter of senders being made aware of the importance of barcode data following established patterns, for example. After all, no one has any interest in shipments being delayed or processed incorrectly, and senders have an interest in timely delivery to the lowest price possible. If the issue of unsolvable parcels is recurring, distributors can choose to charge their customers for the additional handling, or in the worst cases, terminate the collaboration.
Learn more about how you can benefit from data analytics at your distribution hub.
Unsolvable parcels are a major headache for distribution centres because they disrupt the “lights out” flow of automated sortation. They require additional manning and facilities, as processing unsolvable parcels involve both physical handling on the production floor as well as re-labelling and data enrichment done in an office-like part of the operation. Especially poor data exchange between regions and the emergence of home-printed labels are giving rise to no-read issues.
Unsolvable parcels lower throughput, delay production, and cause a documentation gap, and as a result, reduces profits for CEP providers. To better handle unsolvable parcels, distributors should invest in better scanning technology, such as video coding and optical character recognition, as well as improve data collection and establish feedback loops, which can help distributors do predictive analysis to accommodate for incoming parcels. Finally, CEP companies can work with their customers, i.e. the senders, for bringing down the frequency of unsolvable parcels and keeping down costs.
Emerging trends in global e-commerce make it increasingly difficult to know which is the right solution for automated parcel sortation.
To get started, download our guide for e-commerce parcel distributors: “5 things to consider for your automated sortation system”.
