Online shopping is booming, and so are shipping problems. McKinsey reports that we sent over 100 billion packages in 2020, and that number could double by 2030.
This simple fact creates a big challenge for retailers: more packages mean more chances for things to go wrong. Every damaged package, every lost shipment, and every stolen delivery represents a direct hit to the bottom line.
Here's how retailers are protecting their profits as shipping volumes soar.
Why do items get damaged during shipping?
There are several reasons why packages might get damaged. Here’s a deeper look into the most common reasons for damaged packages.
1. Improper or ill-fitting packaging
Ecommerce teams often default to one or two “standard” box sizes. That could mean extra void space and a spike in breakage when heavy items slide around in transit. Right‑sizing cartons—and using inserts that lock the item in place—reduces breakage rates and dimensional‑weight surcharges.
Void fill that’s too thin (or missing altogether) leaves fragile parts exposed to vibration and impact. Air pillows, bubble wrap, molded pulp, and kraft‑paper dunnage should create a snug “nest” on all sides of the product.
2. Poorly labeled packages
The way you carry a baby is different from the way you carry a toddler, which is different from the way you carry a sack of potatoes. When people who deliver packages know what is inside, they are more likely to handle them with care.
Clear “Fragile,” “This Side Up,” or orientation arrows prompt drivers and sorters to stack and carry with care, lowering corner crush and drop damage.
Even the best box can fail if it’s hurled down a chute or stacked under heavy freight. Shock and tilt indicators—combined with photo documentation of pre‑shipment condition—help assign liability and encourage gentler treatment.
3. Water or humidity damage
A shipment that leaves a dry mountain warehouse may finish its journey in a humid coastal climate. Condensation, rain, or snow can warp cardboard and ruin sensitive goods. Moisture‑barrier films, laminated corrugate, desiccant packs, and reinforced tape keep water out.
Extreme heat or cold can crack plastics, melt cosmetics, or trigger condensation inside electronics. Seasonal packaging—insulated liners, cold packs, or breathable vents—prevents thermal shock and keeps products within their safe temperature range.
4. Theft
Packages left unattended are vulnerable to porch theft, while high‑value items can disappear within the carrier network. Signature‑required delivery, local pickup points, real‑time SMS alerts, and discreet outer packaging reduce loss rates and costly reshipments.
5. Pest invasion
Bugs or mice can get into shipments, especially bulk foods, pet items, textiles, and paper products, when cargo sits too long in hot, damp warehouses or shipping containers.
Once they get in, these pests damage cardboard boxes, make products dirty, and cause expensive disposal costs or product recalls.
Seven ways to prevent shipping damages
The best way to deal with damaged packages is to avoid them in the first place. Here’s a closer look at how brands are working to prevent ecommerce shipping damages.
1. Run routine drop and vibration tests
Even the sturdiest‑looking carton can fail when it meets a conveyor junction or van floor. A systematic drop‑ and vibration-testing program spot‑checks packages before damage shows up in customer photos, and costs far less than a wave of returns.
Pick at least one item from each weight/fragility tier (e.g., lightweight apparel, midweight cosmetics, and heavy electronics). Aim for three to five SKUs per quarter, more if you introduce new packaging.
2. Use the right packaging
Different products require different kinds of packaging. If you’re selling t-shirts, you can get away with shipping them in a loose envelope or mailer. If you’re selling a desk with a glass top, you need packaging that will secure the desk, protect the glass, and fit the box.
“There is no way to avoid shipping damages and lost packages entirely, but it can be minimized through proper packaging and good customer service handling,” says Chad Brinkle, founder of High Country Off-Road.
“The best way to protect your products from shipping damages and lost packages is using packaging supplies that are sturdy enough to handle the shipment process. Packaging supplies like bubble wrap, foam sheets, and air pillows are a good starting point.”
3. Improve communication
Preventing damaged packages is one part of the equation for ensuring orders get to customers intact. But another huge piece of the puzzle is finding ways to reduce lost and stolen packages.
Chad Brinkle suggested hiring a shipping company you trust, and having clear communication with the company on expectations. “Before placing an order, it is important to discuss it with the shipping company. This way, you can determine what it takes to ship the product and what will happen if something goes wrong,” says Chad.
Combat stolen items by sending up-to-the-minute shipping and delivery communications. Ideally, set up SMS, so the customer sees the notification and scoops up the package ASAP.
There are several order-notification apps that integrate well with Shopify. These apps will help protect your shipments, inform your customers of deliveries, and lower costs from potential damages or theft.
4. Track and insure your packages
It’s challenging to know what went wrong in the shipping and logistics cycle if you don’t track your packages.
Ben Rollins, cofounder of Axon Optics, says, “Once you’ve shipped your products, track them so you can keep an eye on their whereabouts. This way, you can quickly resolve any delays or issues with your shipment.”
There are also times when things go wrong and a shipping disaster is out of your hands. For this, there’s insurance. “Shipping insurance can help you recoup the costs of any damaged or lost packages. This is a great option to have if you’re shipping high-value items,” says Ben.
With Shopify Shipping, you can access both comprehensive tracking tools and up to $200 of embedded insurance on every shipment, giving you peace of mind and protection for your business as your packages make their journey to customers.
5. Provide robust delivery options
Packing your products yourself and shipping them through the mail aren’t your only delivery options.
If your store only operates online, consider a local delivery system. Local delivery is a stellar way to personalize delivery experiences to the needs of customers in your region. You can also build relationships with local delivery services and set expectations.
6. Partner with a great shipping company
Even if you’re a small ecommerce brand, it’s essential to partner with a shipping and logistics company that has its processes ironed out. If you’re a bigger ecommerce company or an enterprise, partnering with a 3PL company is essential.
“Choosing a reputable and reliable shipping company reduces the risk of damage to your packages. Their staff members are trained to handle packages properly, and they have the resources to get your parcels delivered safely and on time, without risking mishandling fragile packages,” says Ben from Axon Optics.
Services like Shopify Fulfillment Network make it easy to connect with trusted logistics partners such as Flexport, enabling you to ship anywhere, save time, and accelerate business growth. These partnerships give you access to a vast network of distribution hubs and fulfillment centers strategically positioned for nationwide coverage.
With the right fulfillment partner, you can offer customers competitive delivery speeds—down to two to three days—which meets modern consumer expectations. Advanced partners utilize data-driven network planning to strategically position your inventory closer to customers based on demand patterns, ensuring both speed and reliability.
As Jason Lee, chief operating officer at Kizik notes, "Flexport has been instrumental in helping us uncover new areas of growth for the Kizik business so that we can continue to delight our customers and partners with an exceptional delivery experience."
7. Create automation for high-value orders
In Shopify Flow, create a simple automation: If the order subtotal is $150 or more, identify the order with an “extra‑dunnage” tag. Warehouse staff or your 3PL can then see the tag in the pick list and add corner blocks, bubble wrap, or double‑wall cartons to your high-value packages.
How shipping damages harm your business
It goes without saying that if the transit of your products from paying customers is interrupted—for any reason—you’ll lose money, customers, and precious time.
Here are some ways shipping damages can harm your business, according to ecommerce merchants and marketers.
High costs of replacing items
If a customer pays for a product, you have to send it to them—no matter what. Your company is responsible for making sure the product gets from your warehouse pallets to their kitchen table. If it doesn’t, you have to spend the extra cash for replacing the damaged shipment.
Damaged and lost shipments harm business through extra spending. Customers expect a replacement if an order arrives damaged or is lost altogether.
Both scenarios amount to lost revenue. Some carriers even charge shippers to investigate a lost shipment, which often takes seven to 10 business days to receive an answer. The replacement you send to a customer could have been sold during those seven to 10 days.
Damaged reputation
“Shipping damages and lost packages can cause many problems for your business,” says Ben Rollins. “Apart from dealing with the cost of replacing the damaged items, you also have to deal with upset customers. This can hurt your reputation, making it difficult to retain customers.”
Darren Litt, cofounder of Hiya Health, adds, “Damaged products and lost packages can hurt your reputation. This can lead to negative reviews and may discourage others from doing business with you in the future.”
Lost time
Not only is it expensive to replace damaged goods and lose customers, but there is an added expense of the time you lose when you spend too much time on the shipping process and supply chain problems.
“If you are constantly dealing with shipping issues, it can take up a lot of your time and energy, which could be better spent on other aspects of your business,'” says Darren.
If you do experience shipping problems, remember the economic principle of opportunity cost. The time it takes you to deal with shipping problems could be better spent focusing on other areas of your ecommerce business.
Instead of trying to deal with it yourself, hire a 3PL company to handle packaging, shipping, and returns for you.
Who is responsible for shipping damages?
There’s no straightforward answer when it comes to who is liable for shipping damages. The answer is: it depends.
How, where, and when the package is damaged plays a significant role in who is liable for the damages. Regarding the acceptance of most liability, there are different schools of thought. Some say the company is responsible. Others say the courier is responsible.
Camp 1: The company is liable
Phillip Akhzar, of Arka, is one ecommerce professional who believes the company is liable.
“Shipping damage can be incredibly detrimental to a company’s brand loyalty. When an item shows up damaged, ultimately, the company is responsible,” says Phillip.
While Phillip believes the company is responsible for the cost of lost packages, he agrees that sometimes it’s the courier’s fault.
“Though the courier can be held liable if there is proof the damage occurred while the item was in their possession. Either way, your brand image takes damage too.”
Regardless of whether you accept liability or the courier does, one thing is certain: You have to do everything in your power to serve your customers and protect the reputation of your brand.
Camp 2: The shipping company is liable
The other school of thought is that the shipping company is liable for damages, and the best thing to do is truly vet your logistics provider.
“Your shipping carrier is liable for provable damages that occurred when the package is being shipped. However, this is much more difficult than it sounds,” says James Green, owner of Cardboard Cutouts.
“If your packages are showing up damaged consistently, then you need to switch shipping carriers, otherwise you’re going to be consistently replacing products and eating those replacement and shipping costs yourselves.”
You may also want to note the type of freight shipping that your provider uses. The mode of transportation used to get your products from point A to point B may be a good indication of where in the shipping process freight damage is occurring, allowing you to alter your product packaging accordingly or use a different provider altogether.
Shopify can help you reduce shipping damages
If you’ve been experiencing higher than normal shipping problems (e.g., damages, theft, or loss), now is the time to look into better shipping options.
The good news is Shopify has a large list of 3PL shipping partners. Take a look at the 3PL systems that integrate into Shopify and streamline the order, fulfillment, shipping, and returns processes.
Shipping damages FAQ
How do you find a good shipping company for your ecommerce store?
There are many different types of shipping services out there, each with its own pros and cons. Choose a service that offers great customer service, can meet the demands of your scaling business, and is willing to share liability for damages.
When looking for a good logistics company, make sure it has a track record of delivering orders on time and in good condition. Ask them for their metrics so you get a better look into how well and with how much care they handle packages.
Another good way to find a shipping company is to check their online reviews and ask other ecommerce brands who are doing a good job.
What else can ecommerce brands do to limit shipping problems?
The best thing for ecommerce brands to do to limit shipping problems is to partner with a professional shipping company.
It’s also essential to research and evaluate your packaging and shipping materials and processes. Make sure you have the right materials to protect your items based on what the items are, where they are being shipped, and how they are handled.
Other ideas include tracking your packages, insuring your packages, labeling your packages correctly, and sealing your packages.
Should ecommerce brands get package insurance?
As a quick review, package insurance covers the cost of lost or damaged packages, ensuring that customers receive their products.
Deciding whether or not you should invest in package insurance depends on what kind of items you sell and whether or not the costs make sense.
If you sell high-ticket items, then package insurance is a good bet. Package insurance is also a great way to protect your brand’s reputation and ensure customer satisfaction.
Another option is for merchants to partner with companies that offer insurance to your buyers. In this instance, the buyer can purchase a small insurance policy and cover their bases.
