Save money by optimizing reverse logistics procedures

Alex Robertson

By Alex Robertson Business Development at King Solutions

return to sender on boxMany businesses breathe a sigh of relief after the rush of the holiday season. Supply chain companies and logistics professionals are not among them. The logistics industry never stops moving, and while the new year brings an end to the increases in retail and e-commerce shopping, January introduces a new challenge to shippers: returns and reverse logistics optimization.

A game of numbers
The rise of holiday e-commerce shopping has brought with it big increases in return shipping. American consumers will return $90B worth of unwanted gifts this year, with 51% of those returns occurring in January alone. Shoppers are predicted to return more than 5.8 million packages this January, UPS reports.

Now is the time ensure that your reverse logistics practices are optimized to ensure that you are not spending a fortune on moving products that are either unwanted or damaged.

Restructure routes and optimize LTL shipping
The first challenge of reverse logistics is how to best bring products back to warehouses, distribution facilities, repair centers, original equipment manufacturers (OEMs), etc. Shippers can manage this process by analyzing routes taken by carriers and organizing return hauls based on the trips they will be taking.

Carriers who are already making a trip to your location will be more willing to haul return goods for lower rates than those forced to make a trip that is off of their projected route. LTL optimization and better route planning will allow you find carriers with space on their trucks and who are passing through your target area.

Recapture revenue
Once goods are returned, the question of how to get the most revenue out of them comes into play. While new products still in original packaging can simply be sold online or sent back to brick and mortar stores, other products that are damaged, opened, recalled or discontinued must be liquidated or repurposed using one of the following methods:

  • Repairing items and shipping them back to customers
  • Breaking items down and using them for spare parts
  • Selling parts for scrap
  • Selling opened items on secondary markets
  • Returning items to OEMs

Secure returning customers
Most importantly, your reverse logistics strategies should put the customer first. More profit is lost through a forfeiture of return business than from shrinkage because of returned and/or damaged goods. In today’s e-commerce driven marketplace, customers demand convenience and lenience when dealing with returns. Adopting policies that make it cheap, fast and easy for customers to return damaged or unwanted items is the key to earning their return business.

Optimize your logistics today
Reverse logistics are a small but important part of the supply chain. In order to fully optimize your business, you must first bring optimization to your supply chain. At King Solutions, we not only specialize in hauling goods, we also provide a variety of services that help you get the most out of your logistics investment. Contact King today to find out how we can assist you with your logistics strategy and execution this year.