Companies and individual consumers have always returned products for reasons ranging from item defects to incorrect size or color to simply a change of heart about the purchase. And when those transactions took place in small numbers, the companies would handle the returns in whatever way made sense at the time. Often, there was no clearly defined process.
That somewhat haphazard approach has changed dramatically in recent years, giving rise to the field of reverse logistics. Exactly what it sounds like, reverse logistics is the term for the sum of activities that take place between when a buyer takes possession of a product and when it has been returned and disposed of in the appropriate manner.
As TechTarget defines it: “Reverse logistics is the set of activities that is conducted after the sale of a product to recapture value and end the product’s lifecycle. It typically involves returning a product to the manufacturer or distributor or forwarding it on for servicing, refurbishment or recycling. Reverse logistics is sometimes called aftermarket supply chain, aftermarket logistics or retrogistics.”
Today, there are third-party logistics (3PL) companies that specialize in this discipline and technology explicitly designed to simplify it. Reverse logistics software and systems are necessary because tracking, accepting, categorizing, and processing returns is challenging. So is determining how to maximize the value of returned merchandise since many options have to be weighed—restocking, recycling, refurbishing, donating, selling on the secondary market, etc.
But retailers are getting an assist from advanced systems—often powered by artificial intelligence (AI)—that can take several factors into account to quickly and effectively determine which return channel benefits the company most.
One of the primary reasons that reverse logistics is such a high-stakes endeavor is that return volumes have increased significantly thanks to sharp rises in ecommerce in recent years. And adding fuel to the fire is online retailers’ realization that they can attract more customers if they offer free return shipping.
As a result, an increasingly common shopping practice is to order multiple similar items (a pair of shoes in three different colors, for example), determine which they like best, and return the others. This creates an enormous reverse logistics challenge for companies, but they find that the benefits outweigh the costs. And, not surprisingly, retailers aren’t simply absorbing return expenses. As large return volumes have become the norm, many companies are paying for them with product price increases.
In addition to raising their prices to pay for returns, businesses are also looking for ways to keep their reverse logistics costs down. In some cases, that means simply issuing the customer a credit and not requiring them to return the item. The company is, in effect, giving products away, but that strategy is more cost-effective for them in the long run.
However, in scenarios where companies require customers to send items back, it’s crucial that the reverse logistics be streamlined to keep expenses as low as possible. One resource businesses can use to stay “lean” is rented or leased semi trailers.
Maintaining a fleet of trailers large enough to handle spikes in return volumes—such as after a major holiday—means equipment often sits idle through much of the year, even as the company continues to make payments on it. On the other hand, obtaining trailers on an as-needed basis lowers costs since there’s no “downtime penalty” like there is with owned trailers.
That approach also gives retailers more flexibility in how they transport returns. For example, some products might be best shipped in dry van trailers, while others may require the cooling capability of a reefer trailer or the open space of a flatbed.
Another critical aspect of reverse logistics is how to store returned merchandise until the company can assess and dispose of it as appropriate. Depending on staff availability and return volumes, this can be anywhere from weeks to months.
As with transportation capacity, no company wants to pay for costly warehouse space set aside for reverse logistics since it may only be needed during peak return season. Secure, weatherproof semi trailers are an affordable alternative. They can be delivered to the site of your choosing and filled with returned merchandise until you’re able to inspect and process it. Then, when return volumes decline, you can return the semi trailer until you need extra storage space again.
Consumer preferences help explain why simplifying reverse logistics and keeping costs down is so important. For example, by some estimates:
For companies in Colorado, Nevada, Arizona, Utah, and Texas, Boxwheel is the trusted choice for semi trailers they can use for over-the-road and onsite storage purposes. Our extensive inventory of well-maintained flatbeds, dry vans, reefers and other types of trailers from leading manufacturers like Wabash, Utility and Great Dane is a tremendous resource for companies that want to maximize their shipping, reverse logistics and storage capacity without a large capital investment.
Contact Boxwheel Trailer Leasing today to discuss your semi trailer requirements and how we can help you meet them. Even if you don’t currently need any equipment, we welcome your call, email or visit. Then, when a need arises, you can pick up the phone, tell us what you need, and expect the trailer(s) to be ready to roll quickly.
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