REVERSELOGISTICS [ INSIGHT ]
by Kristen Kelly VP of Product, Loop Returns kristen@loopreturns.com | 206-472-0440
Ecommerce and Logistics Partner Up As the ecommerce industry expands, it has brought with it a fundamental shift in how logistics companies operate. We see increasing collaboration between ecommerce companies and logistics providers like FedEx, UPS, and even Uber. Partnering with logistics companies
These providers are also expanding services into refurbishment and re-commerce, which helps merchants build a sustainable option for reselling gently used or open-box products on a secondary branded platform. This model helps to promote a second life for used products and to generate a secondary source of revenue for the merchant. To increase capabilities quickly, many logistics providers are turning to partnerships and acquisitions that can help them tap into new market opportunities. For instance, last year, UPS acquired Happy Returns, a reverse logistics company with a network of drop-off locations where customers can deliver box-free returns for a frictionless returns experience. By pairing Happy Returns’ existing drop-off centers with its network of 5,200 UPS Stores, UPS was able to expand its base of drop-off centers to more than 12,000 U.S. locations. In the future, partners that offer package-free drop-offs may get into the inspection, refurbishment and re-packaging space so that items can go directly to a warehouse for fulfillment, or possibly even drop-ship directly to a new buyer from the drop-off center. By using existing resources, and adding new partnerships and acquisitions, they can consolidate and streamline the reverse logistics process for merchants. n
partnerships develop, we can expect further innovations in the logistics sector that will ultimately benefit logistics companies, merchants, and consumers. RIPE FOR CONSOLIDATION Traditionally, warehouses and 3PLs have focused on outbound orders rather than managing returns—but with the rate of ecommerce product returns approaching 18%, reverse logistics is increasingly becoming a key concern for both merchants and their 3PL partners. Without a strategic plan for managing reverse logistics, the majority of returns end up getting discarded. This approach isn’t just terrible for the environment, it also forces merchants to foot reverse logistics costs for products they won’t resell. In response, warehouses and 3PLs are offering new services to support and streamline reverse logistics. For example, many warehouses and 3PLs now invest in software to house procedures for processing, grading, and getting items ready for inventory again, so that they can easily determine which products are viable for resale.
helps brands tap into economies of scale, with bulk shipping rates, shared warehousing, and optimized delivery routes. Customer experience is also key. Consumers demand not only quick delivery but also flexible options for receiving and returning products. Finally, the trend toward consolidating multiple vendor relationships into a single, comprehensive logistics partner streamlines communication, billing and contracting which often leads to lower costs. By going deeper into the merchant’s business, logistics providers can be more strategic, helping to creatively solve problems with merchants. Logistics companies are responding to increased demand by offering new pick-up and drop-off options, streamlining the experience with QR codes and package-free returns, and consolidating multiple shipments into bulk deliveries. The evolving relationship between ecommerce companies and logistics providers is driven by the need to reduce costs, enhance customer satisfaction, and streamline operations. As these
30 Inbound Logistics • September 2024
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