The rise of e-commerce is driving up demand for reverse logistics.Returns are a key part of digital shopping. It is estimated that up to 40% of all goods bought online are returned compared to only around 5 to 10% bought in brick and mortar stores. Furthermore, more than 65% of shoppers view returns policies before making a purchase.With an increasing demand for free and speedy delivery, customers want the same service for returns. Retailers also need goods back on shelves sooner rather than later.
According to Mario Harik, chief information officer at XPO Logistics, the return logistics process is complicated, which is why more retailers are opting to use third-party logistics providers (3PLs) to handle the business of returns.Speaking during a recent webinar, Harik said as e-commerce continued to grow, so would the need to create specific logistics capabilities.
A report released by investment firm CBR Group found many retailers and brands were looking for systems and technology to streamline and optimise the returns process because they understood the impact that returns had on their bottom line.Another finding is that distribution facilities handling returns need 15 to 20% more space than a traditional facility for outbound distribution because the volume, dimensions and final destination of returned goods are inconsistent and varied.
According to XPO this is part of the complexity of e-commerce reverse logistics. Goods leaving distribution centres are properly packaged, but more often return in a jumbled mess. The logistics giant estimates that an inbound truckload of products from a supplier can take as little as two to eight hours of sorting, while it can take up to 48 hours to process a truck full of returns because each item has to be individually checked – not only requiring more space but using twice the labour as well.
