2025 Descartes Warehouse

Performance Benchmark Report

2025 in review: Profitability under pressure

Key warehouse performance trends and insights to help you drive sustainable growth

Future-proofing fulfilment in 2026

2025 was a volatile year for many ecommerce businesses. Warehouse operations were impacted by rising
costs, labour shortages, and ongoing supply chain disruptions. Resilience was the name of the game and many
businesses looked to optimise their warehouses with automation and data-driven inventory management. As we
look ahead to 2026, it’s time to reflect on your performance this year – and see how you measured up against the
competition.

For ecommerce businesses, the warehouse is more than just a storage space. It’s the central hub of your operations.
Every order picked, packed, and shipped has a direct impact on customer experience, brand reputation, and
profitability. An efficient warehouse is critical to sustainable growth. But it can also be the part of your operations
where bottlenecks become normalised and inflexible processes limit your growth potential.

Benchmarking is an essential tool for not only evaluating how your current practices stack up against industry
standards (and those of competitors) but also identifying areas you need to improve. Whether you’re totally new to
measuring key performance indicators (KPIs) or looking to gain insights that will take you to the next level, this report
contains the six KPIs you need to track.

Where do we get our data?

The data in this report comes from Descartes Peoplevox™ and our customers. Our warehouse management system
(WMS) helps ecommerce businesses all over the world to overcome slow picking processes, minimise mis-ships, and
scale their operations. It empowers managers to deploy their workforce in the most efficient, productive manner, and

to make practical changes to improve operations.

In this report, we’ll show you what need to measure, how to do it, and highlight some of the challenges you might face
in the 12 months ahead. What links them all together is the understanding that the resilience and growth potential of
your business depend on whether your warehouse is enabling you or holding you back.

Ecommerce trends and challenges for 2026

#1 The focus shifts from cost reduction to profitability

Ecommerce businesses will continue to navigate cost pressures in 2026. Strategic investments are one way to try and
drive long-term profitability, but those investments need to deliver measurable return on investment (ROI) and better
customer experiences while integrating seamlessly into existing tech stacks. In a crowded landscape full of tools
and platforms promising overnight transformation, identifying what’s genuinely impactful versus what’s unnecessary
requires time and effort.

At the same time, businesses are diving into new sales channels and marketplaces. Without the right systems, this
expansion can quickly create issues around managing inventory, keeping fulfilment rates high, and maintaining
customer service quality. Success lies in thorough preparation. You need to plan every step of the expansion, including
trying to anticipate downstream impacts. At the same time, you need to create processes that allow you to adapt to
trends. If a new channel suddenly opens up and it gains traction, you need to be able to move attention and product
there quickly in a way that doesn’t disrupt your operations.

#2 Businesses need to manage volatility effectively

Making the most of online sales events like Black Friday, Prime Day, and Single’s Day, as well as those hosted on
platforms like TikTok Shop, is increasingly important for ecommerce businesses. Managing these sudden spikes in
demand (even if you know they’re coming) relies on the ability to scale up and down fast in a cost-effective way. Hiring
100 extra temporary staff to meet increased demand is not financially viable for many businesses.

Processes might just be an annoyance during calmer cycles, they can cause major issues during peak periods.

#3 Digitising the warehouse is no longer optional

Bringing your warehouse into the 21st century by getting rid of paper-based systems and automating unnecessary
manual processes is a non-negotiable. Moving to digital tools gives you more reliability, stability, and predictability
while also providing decision-makers with a steady stream of relevant data. It wasn’t that long ago that inefficiencies
and human error were an accepted part of non-digitised processes. Those days are over.

The majority of these “transformational” IT projects fail to deliver the intended results. This can be due to a number
of factors, such as unclear goals, poor change management, and selecting tools that don’t integrate into existing
infrastructure. At Descartes, we currently have a very high “go live” success rate, primarily because of the work we do
to help our clients understand exactly what it is they need from their solutions.

#4 Great customer experiences are table stakes for businesses looking to grow

A strong reputation may start with great products, responsive customer service, and a powerful social media
presence, but it’s what goes on behind the scenes that truly builds loyalty. Effective warehouse operations are how you
back up the promises you make and avoid a backlash in the comments section.

Customer expectations for convenience and transparency will continue to evolve in 2026. People demand real-time
updates, fast deliveries, and flawless accuracy. Any errors are likely to send them to one of your competitors. A great
reputation isn’t just built; it’s earned, one delivery at a time. Benchmarking gives you a clear view of how you measure
up to the rest of the industry and whether your current tools are providing the results you need.

KPI #1: Labour productivity

Labour productivity is a cornerstone of warehouse efficiency and cost management. It underpins your ability to meet
demand without adding staffing costs.

How to calculate it?

The best way to measure labour productivity is to measure the tasks you are doing most – picking, packing, and
shipping. The formula looks like this: Total Picks

$$ \begin{array}{r l}{a b b o w r P r o d u c t i v i t,(p c e e,p o r,h o w r,p e r s o,n)=}&{\frac{T o t a l/,i F i k c s}{T o t a l,H o u r s,W o r k e d,N i m m b e r,o f,E m p l o y o e s s}}\end{array} $$

What should you be aiming for?

For Descartes Peoplevox customers, the average number of orders picked per hour per person is 23.

One of our customers – a North American apparel company – is managing to significantly beat that with a score of 128.
Here is a breakdown by sector:

Orders Picked per Hour per Person
Pick method: Pick and sort to trolley

Common problems:

y Productivity data often focuses narrowly on picking tasks. This is because measuring productivity outside
of small, defined processes can be difficult, especially if you have variable product types and unpredictable
workflows.

y Assessing labour productivity in isolation ignores the fact that productivity in your warehouse directly impacts
your customer experience, reputation, brand, and growth. How quickly your team is completing tasks is not
necessarily an accurate indicator of how well they are completing those tasks.

y High staff turnover and fluctuating seasonal demands will likely influence your labour productivity. High
turnover rates are common due to the nature of the work, which often involves unskilled, temporary, and
mobile labour – particularly true during peak periods, such as Black Friday. Onboarding new staff quickly
becomes a challenge, especially if you are still using manual or highly specific processes.

Steps to improve:

y

Use technology to optimise workflows

Implement user-friendly barcode scanning technologies
and design flexible and scalable warehouse layouts.
This will not only streamline processes and reduce
errors but will also significantly speed up employee
onboarding.

KPI #2: Mean time to ship (MTTS)

MTTS measures the average time it takes from when an order is received to when it is ready for shipment. It
is tied directly to customer satisfaction and service level agreements (SLAs). A high MTTS indicates a longer
time for orders to be processed and ready to send. This suggests operational inefficiencies that could result
in customers having to wait for their orders, failure to meet SLAs, and an inability to compete with competitors
offering faster deliveries.

How to calculate it?

This metric measures how well the internal processes of your warehouse are working. It can be calculated as the
difference between the pick start time and the label creation time stamp.

For customers using Descartes Peoplevox, the average MTTS is 28 hours.

Common problems:

y Many ecommerce businesses still rely on paper-based processes. This means workflows are slower than
they could be and more prone to errors. These manual processes also complicate inventory tracking and
order management while limiting your agility and ability to adapt to change.

y Packing inefficiencies are frequent challenges in busy warehouse environments. This affects shipment
speed and risks compromising accuracy and overall customer experience.

Steps to improve:

y

Get rid of as many manual processes as you can

Implementing a WMS is the best option for automating workflows, improving inventory visibility, and
enabling real-time order tracking at scale.

y

Take a look at your packing bench workflows

Cutting-edge packing stations minimise unnecessary movement, keep materials readily accessible, and use
technology to guide packing processes.

KPI #3: Inventory count accuracy per location per unit

This metric measures how accurately the recorded inventory matches the physical stock available at each
location, down to the unit level. It’s a direct reflection of the precision of your inventory management process and
your ability to prevent overselling and underselling.

How to calculate it?

You could argue that accurate inventory is the foundation of any efficient warehouse. Making sure the right items are
picked and shipped to the right customers is an essential part of ecommerce. This KPI will show you where the gaps
are and help you improve stock reliability.

You can start to calculate it as: Number of SKUs with a variance as a % of total SKUs in your warehouse.

What should you be aiming for?

For customers using Descartes Peoplevox, the average stock take count percentage average is 99.88%.

Common problems:

y Accurate inventory starts at goods-in/goods receiving. If you don’t track every item coming in against the purchase order details, you’ll never have accurate inventory. Rolling stock checks/cycle counting are a good addition to this.

Steps to improve:

y

Increase your oversight

To enhance inventory accuracy, conducting regular stock takes and spot checks is crucial. These audits
should be paired with ongoing optimisation of inventory management processes to ensure consistency and
reliability.

KPI #4: Cancellation rate

The success of your business relies on customers receiving complete orders. When orders are shipped in full,
it enhances customer satisfaction as well as reducing the costs and complexities associated with follow-ups,
replacements, and cancellations. On the other hand, a high cancellation rate or frequent incomplete orders erode
trust, damage your brand reputation and impact profitability.

How to calculate it?

Your cancellation rate is the percentage of orders that are cancelled before they are completed. Cancellations can
occur for two main reasons. Firstly, a customer cancels an order due to long wait times or they find a better price
elsewhere.

What should you be aiming for?

The Warehouse Education and Research Council (WERC) benchmark of 2021 shows best in class at >99.56%.

Common problems:

y Consumer expectations around ecommerce have shifted significantly over the last decade. This creates a
potential disconnect between customer expectations and the actual capabilities of a company’s fulfilment
operation.

Steps to improve:

y

Look for the root causes

Businesses should track the root causes of incomplete orders and cancellations. You need to know whether
issues stem from inventory inaccuracies, order processing errors, or problems in the picking and packing
stages.

KPI #5: Mis-ship percentages

Mis-ship percentages measure the frequency of orders that are shipped incorrectly, whether it’s the wrong item,
quantity, or destination. Reducing mis-ship rates is vital for improving customer satisfaction, preventing costly
returns and avoiding negative word of mouth.

How to calculate it?

$$ M i s-S h i p,P e r c e n t a g e;(\odot)=\bigg(\frac{N u m b e r,o f,M i s-S h i p p e d,O r d e r s,}{T o t a l,N a m b e r,o f,O r d e r s,S h i p p e d,}\Big)\times\ 00 $$

What should you be aiming for?

For customers using Descartes Peoplevox, the average percentage of orders shipped complete is 99.6%.

Common problems:

y A mis-ship happens when a customer receives an incorrect order. This usually happens due to inaccurate
data entry. Consistent errors in recording order details or inventory levels can quickly wreak havoc throughout
your fulfilment process and increase incorrect shipments.

Steps to improve:

y

Take a system-guided approach

There are a range of ways that businesses can leverage technology to reduce human error, improve efficiency,
and create experiences that drive longer customer lifetime value. A WMS can guide staff through the most efficient
picking routes, use barcodes or Radio-frequency identification (RFID) tags to increase picking accuracy, optimise
packing instructions, and automate order prioritisation.

Let’s turn your warehouse into a growth engine

Ecommerce never stands still and 2026 will present both challenges and opportunities. Your warehouse defines
your ability to deal with both. It determines whether your business is positioned to drive growth or continues to be
slowed by entrenched bottlenecks. The benchmarks in this report show how problems in your warehouse can quickly
become issues for your customers that impact your profitability and scalability.

Using these benchmarks will show you where you are right now as well as where you need to be. One of the most
impactful steps ecommerce businesses can take today is implementing a WMS. A solution like the one provided
by Descartes gives you a scalable framework that enhances accuracy, efficiency, and fulfilment speed.