Optimizing Shipping and Delivery Processes for Online Shops

Optimized Logistics Strategy:

Advanced Route Planning:

Given the key routes of US, Canada, and UK:
Implement route optimization software that can predict and adjust routes in real-time based on traffic patterns, weather conditions, and other obstacles.
For shipments within North America (US and Canada), prioritize ground transportation where possible to reduce shipping times and costs.
For UK shipments, negotiate better air freight rates or explore alternative shipping lines that might offer faster or more reliable service.

Enhanced Collaboration:

With the current service providers (FedEx and DHL):
Discuss and negotiate Service Level Agreements (SLAs) focusing on improving delivery times and reducing package damages.
Investigate collaborations with local courier services in the UK for last-mile delivery, ensuring packages are handed over more quickly and efficiently.

Technology Enhancements:

Considering the basic online tracking system:
Upgrade to a more advanced tracking system that provides real-time location, temperature monitoring, and package handling details.
Implement IoT devices or smart labels that give more detailed insights about the package's environment, which could help in reducing damages.
Use predictive analytics to forecast peak times and adjust inventory and shipping methods accordingly.

Improve Warehousing Strategy:

With a central warehouse in New York:
Consider setting up regional fulfillment centers or collaborating with third-party logistics providers in Canada and the UK. This will reduce shipping times and costs for these key routes.
Adopt a Warehouse Management System (WMS) to streamline order processing and minimize errors, potentially reducing the instances of lost packages.

Customer-Centric Feedback Loop:

Given the feedback on delays and occasional lost packages:
Develop a system to gather, analyze, and act upon customer feedback more efficiently.
Offer compensation or incentives for delayed or lost packages, enhancing brand loyalty and trust.

Addressing Peak Times:

Considering the Holiday season:
Stockpile more inventory in advance of peak seasons.
Increase warehousing staff and shift rotations during peak times to ensure timely dispatching of shipments.
Collaborate with service providers in advance to get priority or dedicated slots for shipments during peak times.

Sustainability and Returns:

Keeping in view the recyclable packaging:
Investigate partnerships with sustainable shipping companies or solutions that offer carbon-neutral shipping options.
Due to the 5% return rate, implement a more stringent quality check before dispatching, potentially reducing returns related to product defects.
Enhance return policy by offering label-free returns or partnering with local stores in key markets for drop-off returns.

Cost Analysis and Shipping Options:

Given the average $7 per shipment:
Consider volume discounts with service providers.
For shipments within close proximity, evaluate the feasibility of a same-day or next-day delivery service, potentially charging a premium for this faster service.
As there's an express option of 3 days, negotiate better rates with providers for this service, or explore bundling multiple express shipments to reduce costs.

Communication:

To minimize dissatisfaction:
Keep customers informed at every stage of their shipment, from dispatch to delivery.
Send out proactive notifications if any delays are expected.
Final Thoughts:
The logistics landscape is continually evolving, and while the above strategy provides a comprehensive plan, it's crucial to remain adaptive. Regularly review the effectiveness of the measures implemented, remain open to technological advancements, and always prioritize customer satisfaction.