The technical term for it is “reverse logistics.” It’s the art and science of planning how a package is to be returned and routed back up the supply chain from consumer to producer, and any logistician will tell you it’s a major pain in the backside to plan. In fact, returns are widely considered to be one of the most laborious and difficult components of delivery, despite being absolutely mission critical for any effective 21st century retailer.
The shift to eCommerce has occasioned an avalanche of returns, increasing both the market for couriers and retailers as well as their cost burden. In fact, according to a State of Logistics report by the Council of Supply Chain Management Professionals, as much as $1.5 trillion may be spent on logistics in a single year. Controlling these costs has become crucial for companies all along the supply chain. Fully $550 billion worth of returns moves through the economy every year, most of it sent back to the suppliers.
In an era when Amazon has forced traditional brick-and-mortar operations to adapt or die and in which same-day delivery is increasingly becoming a normal consumer expectation, strategizing returns is central to the competitive strategies of manufacturers, retailers, and couriers. Here we will discuss strategies that couriers are adopting to keep up with the new environment.
Re calibrating Transportation
One of the most innovative strategies adopted by couriers and retailers is to combine pickup and delivery on routes. Thus, the same driver might handle both drop-offs and returns on the same route. Another strategy is to either expand existing processing centers or create a new system of centralized return centers to handle the increased traffic. The limitations of the existing centers make return processing slow and cumbersome, with a greater possibility that packages may be mishandled.
New Return Policies
The flip side of same-day delivery becoming the new normal is that easy returns have become the new normal too, no matter how much of an albatross around retailers’ necks they may be. Easy returns are a competitive advantage — and the lack of them is a potentially fatal blow. At the same time, retailers are looking for discreet ways to crack down on habitual abusers of their lenient policies. Amazon, for instance, is shutting down the accounts of those who licentiously abuse their return policy. Couriers will have to keep track of all of these policies as they evolve.
Companies must walk a tight line with returns, making them easy enough to remain competitive, while also gently prompting consumers to think carefully about the reason for the return and provide the company feedback so they can provide better consumer experiences in the future. These can include features such as return forms and labels that the consumer prints themselves. Sometimes the courier costs are prepaid and sometimes they are not. Different retailers adopt different ways to handle return prep, and couriers must carefully accommodate these different policies. They must be able to scan, sort, and properly dispatch packages with different preparation systems, and stay on top of changes in company return preparation policies.
Rapid returns are a fact of life in the digital era, especially after Christmas. Reverse logistics is opening up many new ways for producers, retailers, and couriers to serve their customers while controlling costs, and Reliable Couriers is pleased to do its part. Call us at 888-415-1781 to learn how!