Tech Fights Back in Battle Against Porch Pirates
Porch pirates could prove the Grinch of holiday season this year as package theft returns to the spotlight during the busy year-end shopping period.
According to a 2022 report from Vivint, eight in 10 Americans reported having a package stolen from their house during the holiday season — and three in four reported sending a package to an alternate address to avoid theft.
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Fifty-eight percent of Americans say they plan to shop online this holiday season, according to a recent NRF survey. But as package theft rates rise and retailers get stuck holding the bag for lost and stolen goods, big-time logistics providers and smaller startups alike are working toward solutions and mitigation strategies against this problem.
UPS Capital, the financial services division of logistics provider UPS, recently launched technology to help companies and brands assess how likely a package is to be stolen from consumer addresses.
The product, called DeliveryDefense, falls under UPS Capital’s InsureShield product line, which aims to help retailers better protect packages. DeliveryDefense uses artificial intelligence to assign a Delivery Confidence Score—one through 1,000—that helps retailers evaluate whether they should instead mail a package to a secure location, like a UPS store or pickup point, to ensure it makes it to the consumer safely.
Ashley Hillman, director of digital channel marketing for UPS Capital, said addresses with low confidence rates do not bode well compared with their counterparts on the higher end.
“If you have a score that falls in that 100 to 299 range, the loss likelihood at that address is 15 times higher than that of an address that falls in that 900 to 1000 range,” she said.
According to Hillman, UPS Capital’s machine learning model compares an address to other like addresses to determine the location’s score. Because of that, she said she did not know which specific cities or areas in the country had low delivery confidence rates.
“If you’ve got two different apartment complexes that were side by side… let’s say, at one apartment complex, that apartment, they collect the packages in the office, and the person who lives in the apartment unit has to come down and get it out of the locker or get it from the office—that typically is a lot safer than leaving it outside, where the apartment complex next door might be doing that… so they’re losing more packages. So it’s looking at those two addresses as two apartment complexes that are right next to each other and saying that something’s happening at this one that you should be cautious of, [rather than basing it on zip code].”
Vivint data showed that the top five U.S. metropolitan areas for package theft in 2022 were San Francisco; Seattle; Austin, Texas; Hartford, Conn., and Sacramento, Calif. Meanwhile, porch pirates struck least often in Miami; Tampa, Fla.; Raleigh, N.C.; Orlando, Fla.; and Cleveland last year.
DeliveryDefense’s data is trained on two years’ worth of data from 11 billion UPS touchpoints. USPS estimates there are about 165 million addresses in the U.S. DeliveryDefense has information on about 130 million, Hillman said. The status of an address could change overnight in the system, since the machine learning technology is continuously fine-tuning and improving.
UPS Capital launched its API on Oct.18. It’s currently integrated into the InsureShield site and requires manual entry when customers want to double-check an address. But Hillman said by the end of the year, DeliveryDefense will have an interface separate from InsureShield, where clients will be able to mass upload spreadsheets. Currently, the products are sold together, but once that interface launches, customers can purchase access to DeliveryDefense without purchasing standard InsureShield software.
While other major logistics providers, like DHL and FedEx, use signatures to help curtail theft and loss, and Amazon takes photos of already delivered packages, UPS is one of the only major service providers using predictive analytics to prevent the problem before it has the chance to escalate.
However, startups like PackageX have begun to enter the arena, using sorting technology to mitigate package loss in businesses and group residential settings, like apartment complexes and multi-tenant offices.
PackageX users scan a parcel using only a smartphone, rather than manually entering data or using an ineffective scanning system that doesn’t differentiate packages, said the company’s CEO and founder, Farrukh Mahboob. Once a user scans the package using PackageX, the end recipient receives a notification to pick it up—the chain of custody continues even beyond the delivery from the logistics provider.
Mahboob said that, while this helps with loss reduction, it also takes some of the burden away from those working in mailrooms and central receiving buildings.
“You want to deliver efficiency or productivity to the person who is handling those packages—the folks at the building level, at the mailroom level. Otherwise, if they are just heads down figuring out packages, they can do anything else,” Mahboob said.
When a consumer receives notification that their package has arrived, PackageX also sends them a photo of the parcel. That photo alone can decrease the amount of time it takes for a consumer to collect their package from a mailroom or desk—Mahboob said the company’s data shows that consumers pick up a package 60 to 70 percent faster after receiving an image. This, he said, helps with overcrowding in mailrooms, which leads to even fewer packages being lost.
The startup’s clients include WeWork, Hilton, Hyatt and Auburn University.
While this software depends on individual buildings purchasing it rather than retailers implementing it, Mahboob said retailers stand to benefit from fewer instances of loss in multi-tenant buildings.
“When buildings mess up, the consumer is not getting their stuff in the moment, and right now they just call retailers, and retailers are sending stuff again, so it’s this whole notion of resending something that was lost by the building. Nobody is taking that accountability and that [burden is] headed to retailers,” he said.
