Freight Reverse - February Happenings

Welcome to the monthly round up of what’s been going on in reverse logistics. The RLA hosted its 20th annual conference earlier this month – it was a record-breaking event that included great sessions and keynote speakers. Be on the lookout for a special edition of the Reverse Logistics Magazine.

Also, in case you missed it, our fabulous interns, David Medof and Sandra Rhee provided daily updates from the conference:

Day One Recap

Day Two Recap

Day Three Recap

RLA members can view and download photos from the conference here - Tag #RLAvegas2024 when you share!

We were also proud to announce the publication of Going Circular by Rich Bulger and give each conference attendee a copy of the book.

Amsterdam

Now, on to our Amsterdam event June 18 and 19! Registration is open.

Returns Index

Costs continue to outweigh volumes in the latest Returns Index. Higher transportation rates and surcharges, labor costs, warehousing and other costs drove this index data point to its highest point in Q3.

“It can be as expensive as 75% of the value of the unit, or 100% or above," goTRG CEO Sender Shamiss, told CBS MoneyWatch in December 2023. "Shipping costs eats up huge amount of the value of the good, so companies determine what it costs to take product back and if they're underwater, they say, 'Keep it.'"

Volumes have held steadily partly because of returns policies tightening up. According to a goTRG survey, one in three retailers give consumers just seven days to send goods back, or tack on fees for bulky goods to discourage consumers from making returns. About 40% of retailers charge for an online return, up from 31% last year, according to Narvar.

Another reason given for the smaller increase in returns was noted in the survey, “Overall assets available to recover has declined. Customers are holding onto IT equipment for longer periods.”

Q4 expectations were for higher costs and little change in volumes.

We’re tweaking the index in hopes to give us deeper insights into returns so help us out and take the latest survey. https://www.surveymonkey.com/r/CWKSVP7

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Upcoming Webinar

Join us for The State of Returns and The Secondary Market in 2024 on March 6. Zachary Rogers, Assistant Professor of Supply Chain Management at Colorado State University will update us on the current market and the outlook.

To register: https://rla.org/event/298

Sponsored by Cisco.

Reverse Logistics News

• According to Matt Guiste, global retail strategy lead with Zebra Technologies Corporation. Consumers want fast and easy returns, yet retailers often struggle to offer this cost-effectively. Guiste describes this as a fundamental clash. Reverse Logistics: Curing the Holiday Returns Hangover – Inbound Logistics.
• “It’s a seriously fragmented industry [Reverse Logistics], and it is looking for help,” Tony Sciarrotta says. “Many companies handle pieces of reverse logistics, but few do it all.”? Stakeholder Collaboration Could Unlock Reverse Logistics Profitability – Supply Chain Management Review
• Manufacturers and logistics companies involved in exporting to countries will have to factor in reverse logistics or repurposing/reuse at the destination of packaging materials, including pallets. Since January 2024 exporters to the United Kingdom have had to report how much packaging they use and pay a fee to account for the recycling costs. This regulation comes into force in the European Union in 2025. New laws underscore reverse logistics imperative – South Africa’s Freight News
• A UPS Capital survey found that Six-in-10 respondents acknowledged that more than 10% of their online orders end up being returned. While 92% of respondents expressed confidence in their returns logistics, they also reported encountering significant challenges in processing returns, such as:

1. Processing time (50%)
2. Cost of reverse logistics (43%)
3. Identifying root causes (36%)
4. Customer service impact (36%)
5. Inventory management (33%)
6. Financial forecasting (30%)

Respondents indicated they see data analytics and automation as potential solutions to alleviate some of the challenges posed by returns. Specifically, they see these technologies as instrumental in optimizing inventory management (50%) and reducing return processing costs through optimized return shipping (37%).

Top three shipping issues caused by rising e-commerce volumes are… - Chain Store Age.

That’s it for now. Be sure to hit subscribe to ensure you receive it in your inbox. Do you have news to share or an idea for the newsletter? Email me at [email protected].

-Cathy