Shipway Report Reveals Key Trends Behind E-commerce Returns

Shipway, a Unicommerce subsidiary and a leading logistics platform, has released the first edition of its e-commerce logistics report, ShipNotes, focusing on the pressing issue of Return to Origin (RTO) in India’s direct-to-consumer (D2C) sector.

Based on FY25 data from millions of shipments, the report identifies the key factors behind failed deliveries, where packages are returned to the seller due to issues like incorrect addresses, failed attempts, or customer rejections—issues that lead to high logistics costs and blocked inventory for brands.

The findings reveal that prepaid orders have under 2% return rates, while Cash-on-Delivery (CoD) orders show nearly 26% RTOs, making CoD the primary concern. Therefore, this edition of ShipNotes examines CoD-related RTO behavior in detail.

City-level RTO trends show Vadodara as the city with the lowest return rate at 18%, while Patna tops the list with 35%. Other cities with low RTOs include Mumbai, Kolkata, and Ahmedabad, while higher rates were observed in Srinagar, Ranchi, and Meerut. These patterns reflect the diverse challenges across locations such as consumer trust, address accuracy, and logistics infrastructure.

Delivery speed also plays a major role. When delivery attempts were made within 1–2 days, the RTO rate was 22%, but this increased to 27% for 3–5 days and 35% beyond 5 days, indicating a direct link between delays and customer cancellations or refusals.

Regarding order value, mid-range purchases (₹500–₹1,000) saw the highest RTO at 28%, compared to 25% for orders below ₹500 and 24% for those above ₹1,000—suggesting possible impulse-buy behavior in mid-range pricing.

RTO rates also varied based on distance zones: Intra-city shipments (Zone 1) had the lowest at 20%, while remote regions and inter-state deliveries (Zones 4 & 5) reached 27–28%, reflecting the logistical challenges in those areas.

To address this, Shipway has introduced various tech-based interventions: Automated address and CoD verification, WhatsApp-enabled rescheduling and corrections, and manual call verification for high-value deliveries. These efforts aim to reduce RTOs while improving the customer experience.

Saurabh Choudhary, CBO at Shipway, emphasized that RTOs have been a persistent challenge and that Shipway’s data-led strategies and intelligent automation have significantly improved outcomes for D2C brands.

Looking ahead, Shipway plans to further enhance its AI tools and customer communication features, providing businesses with improved risk prediction and reduced return rates.