Unreceived and Undeliverable Mail - Costs to Individuals and Businesses

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Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: UK

Research shows that undelivered or misdirected mail cost £4 million to all concerned individuals while businesses report a loss of £753,970,078 due to undelivered mail. On average, the cost for a single user is £16 while a business pays between £20 and £40.
OverviewRoyal Mail		
Revenue from letters: £4,152,000,000 
Number of parcels: £1,068,000,000 
Total Revenue: £5,220,000,000 [calculated] 
Number of letters: 14,378,000,000 
Number of parcels: 1,230,000, 000 
Total number of deliveries: 15,608,000,000 units [calculated]
Average cost per letter: £0.29 [calculated]
Average cost per parcel: £0.87 [calculated]
Cost to IndividualsWe have assumed that a very large percentage of complaints to Royal Mail about unreceived packages are from individuals, as businesses do not usually report such things. As such, this response does not include letters and parcels where Royal Mail was not notified. All the calculations are presented in the attached spreadsheet. 
"The Royal Mail received more than 250,000 complaints about lost letters and parcels in the last financial year — and forked out more than £4 million in compensation, according to a new analysis." 
Total cost for individual complaints: £4 million 
Number of individual complaints: 250,000 
Average cost per complaint is £16 per delivery [400,000,000 / 250,000 = 16]
Cost to BusinessesOne source estimated that each undeliverable letter or parcel costs a business up to $25 in reprocessing, reprinting, new postage, and lost business. 
Another source calculated that, when a company factors in delayed and lost revenue, return mail transaction cost and the risk of non-compliance, the total cost of undelivered mail results in $50 per piece or between £20 and £40 per mailing.
A study from the University of Westminister estimated that the total cost for businesses from returned mail in 2014 was £771 million. [7]
According to our calculations, the cost to businesses from undelivered mail is £753,970,078 [see spreadsheet for the full details of the calculations]

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Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: Global

Research shows that the direct cost to businesses of undelivered or misdirected mail in the United States is approximately $20 billion annually. The indirect cost to businesses for undeliverable as addressed (UAA) mail range from $3 to $50. 
COST OF UNDELIVERABLE AS ADDRESSEDAccording to the United States Postal Service, undeliverable as addressed mail is mail failing to reach its intended recipient mainly because the mailing address is "incomplete, incorrect, or illegible."
In 2017, there were over 6.1 billion individual pieces of undeliverable as addressed mail in the United States.
As per research from the United States Postal Service, the direct cost to businesses in the US for undeliverable as addressed mail is estimated at $20 billion. 
Research shows that the indirect costs to businesses per UAA unit are estimated to range from $3 to $50. 
Indirect costs for UAA mail are related to factors such as increased customer service costs, deleted payment receipt, lost sales, and damaged customer relations.

Research Strategy:After an extensive search, we were unable to find an answer to the cost of unreceived mail to individuals, as well as the cost of undeliverable as addressed mail to businesses globally.

We began our research on a general level by looking for the most direct, accurate answer to the request that will satisfy all parts of the research criteria. This strategy led us to official data and information on the cost of undelivered mail provided by the United States Postal Service and the Office of the Inspector General (OIG). These official sites offered key findings on the cost of UUA mail for businesses in the United States, but it did not provide information on the cost to individuals, as well as the global cost to businesses for UAA.

For the next part of our research, we searched for information in industry magazines/articles/websites related to mailing systems technology solutions, and industries specializing in solutions to problems like UAA. However, this strategy also did not yield information on the global aspect of the request or the cost to individuals.   
 
Next, we attempted to find information on the percentage of outbound international mail, in order to triangulate a partial answer, or at least provide relevant information. However, this data was neither found on official sites nor through general research. 

Regarding the global component, we assume that the unavailability of this data may be because autonomous countries have varying levels of development and government services, which would render quantification and comparison across countries effectively meaningless. Regarding the cost to an individual, we suspect the unavailability of information is due to how difficult it would be to calculate the cost, given that it would depend on all sorts of factors, including how an individual responds, what the UAA item was, if it wanted, e.t.c.

Wonder

Unreceived and Undeliverable Mail - Costs to Individuals and Businesses

Delivered June 2nd, 2019

Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: UK

Overview

Cost to Individuals

Cost to Businesses

Unreceived and Undeliverable Mail - Costs to Individuals and Businesses: Global

COST OF UNDELIVERABLE AS ADDRESSED

Research Strategy:

Did this report spark your curiosity?

From Part 01

Royal Mail Briefing Paper to Parliament - Dec 2018

Royal Mail Spreadsheet

Royal Mail forks out £4million in compensation over LOST POST

The High (and Pesky) Cost of Undeliverable Mail | Letter Jacket Envelopes

Undeliverable Mail Today: The Solutions (Part Two)

Online currency converter

Analysis of next day and economy parcels market .... in the UK

From Part 02

Where Is Your Returned Mail Hidden?

Undeliverable as Addressed Costs More than You Think | USPS Office of Inspector General

The Unexpected Cost of Undeliverable Mail

The Cost of Undeliverable Mail | CMS Mailing Shipping Specialists

Volume Tables: PARS 2017 | PostalPro