How to Optimize Your Reverse Logistics

 

Optimizing your reverse logistics can help you reach one of your primary business goals – increasing revenue. 

 

Done right, reverse logistics improves customers’ overall experience, minimizes wasted spend, and increases efficiency. So, choosing the right company to oversee this process (or using the right software to do it well yourself) is vital. 

 

We put together a list of eight top reverse logistics companies along with a brief description of their unique features to help you determine if they might be a good fit for your business. Plus, we’ll show you how to optimize your own system for in-house logistics. 

 

What is Reverse Logistics?

Reverse logistics is a process of moving goods or services from what is usually their final destination to another location (either back to their origin point or to another designated location). Reverse logistics is typically work that happens after a product or service is delivered. This can include product returns, recycling, and exchanges.

 

A great example of a business that uses reverse logistics is Oco Meals, which offers a “zero waste” meal delivery service to customers across the greater Vancouver area of Canada. After Oco Meals delivers meals, they retrieve their reusable food containers from customers, which drastically reduces their environmental impact (by keeping these containers out of landfills) and helps build brand loyalty with eco-conscious clientele.

 

What Do Reverse Logistics Companies Do for Businesses?

Some of the services third-party logistics (3PL) companies commonly perform:

 

• Pick up returns and bring them back to a warehouse or other location to be restocked
• Streamline and oversee reverse logistics supply chain management
• Inspect and repackage returned products or parts
• Manage inventory (store products within their own warehouse and reorder when necessary)
• Handle customer refunds
• Reverse logistics companies can manage all or just part of your reverse logistics process, depending on what you need.

 

8 Top Reverse Logistics Companies in 2020

Below you’ll find a breakdown of eight of the most popular reverse logistics providers. Each one offers unique benefits to businesses. Some are global companies that specialize in worldwide logistics, and others offer fast access to most of the United States. We’ve highlighted some of the most distinguishing features each company offers to help you determine which 3PL company might be best for your business.

 

1. XPO Logistics

According to their website, XPO Logistics is “the second largest provider in North America, with over 100 million sq. ft. of facility space in the Americas and Asia.” 

 

They offer forward and reverse logistics solutions to both business-to-business (B2B) and business-to-consumer (B2C) companies in multiple countries. XPO Logistics not only processes returns, but they also handle refurbishing, disposal, and/or product recycling.

 

2. ShipBob

ShipBob is a tech-savvy 3PL focusing on forward and reverse logistics services for direct-to-consumer (D2C) eCommerce stores. They offer seamless integration with eCommerce platforms, including Amazon, Shopify, and BigCommerce (among others). ShipBob can store products in their warehouse and then package and ship them to consumers. ShipBob offers their own process for returns and also partners with Happy Returns and Returnly.

 

3. Bowman Logistics

Bowman Logistics offers a wide range of logistics and storage services, including pick and pack for eCommerce businesses, temperature-controlled food grade storage, consulting, and space for lease. Bowman Logistics offers warehousing and returns management for B2B and B2C companies.

 

4. Mercury Logistics

Mercury Logistics boasts a centrally located U.S. headquarters that is “within 1 day’s drive of more than 60% of the country’s population.” They handle forward and reverse logistics across an array of industries, including automotive, health/pharmaceutical, and alcohol/spirits. Mercury Logistics uses Microsoft Dynamics AX to provide real-time order updates and live tracking to customers.

 

5. Optoro

Optoro provides businesses with a technology-driven and consumer-focus reverse logistics solution. 

 

Their focus is on returns management and recommerce for retail stores and eCommerce businesses. Optoro also partners with Returnly to handle refunds and other aspects of the reverse logistics process.

 

6. Zipline Logistics

On their website, Zipline Logistics boasts the “highest level of customer service in transportation” based on their Net Promoter Score. Zipline Logistics provides grocery and beverage suppliers with temperature-controlled shipping options in addition to serving other industries.

 

7. ShipWizard

ShipWizard provides “end-to-end 3PL services” to a variety of eCommerce stores and other businesses. One of their key offerings is reverse logistics management, with a focus on customer experience. ShipWizard offers integration with an array of eCommerce marketplaces, including Amazon and eBay.

 

8. GEFCO

GEFCO provides logistics solutions by land, sea, and sky to businesses across 47 countries. 

 

They serve businesses in vastly different sectors, including fashion, aerospace, and healthcare. In addition to forward logistics services, they provide reverse logistics and urgent deliveries management.

 

Choosing between a 3PL and In-House Logistics Management

Outsourcing reverse logistics to a 3PL provides considerable benefits, especially to businesses that have a spread out client base or are shipping internationally. For small businesses with limited space, stocking products in a 3PL warehouse can be a great solution as well.

 

The major drawback to using a 3PL is that you may lose control over your customers’ experience. Anytime you hire a third party, whether it’s for delivery, shipping, or logistics, you run the risk of subpar customer interactions. When you don’t oversee the quality of the product or service provided under your brand name, you need to be 100% sure the third-party company you’ve hired will deliver up to your standards. 

 

In the end, the choice to either work with a 3PL or keep logistics in-house comes down to a question of profitability for most companies. Depending on the size of your company and the territory you cover, 3PLs can either help you save money or wind up costing you more. In their article about the pros and cons of outsourcing to a 3PL, Handshake explains that “A 3PL firm may be cheaper up front, but over time will likely be more expensive than handling the shipping functions in-house, provided those in-house functions are operating efficiently.”

 

So, how do you manage forward and reverse logistics efficiently in-house? With the right software.

 

Fulfill your own reverse logistics

Managing returns, exchanges, and other types of reverse logistics doesn’t have to be difficult. Many small and medium-sized businesses handle their own pickups and returns using route optimization software. Businesses can improve their reverse logistics efficiency dramatically by simply incorporating robust software that is capable of planning pickup routes in seconds.

 

For businesses that rely on both forward and reverse logistics like Oco Meals, OptimoRoute is able to seamlessly combine pickups and drop-offs for maximum efficiency. Oco Meals delivery personnel pick up food containers along their delivery routes on Sundays and Mondays to cut down on fuel costs and reduce their environmental impact.

 

Using Reverse Logistics to Stay Ahead of the Competition

The reverse logistics process is a source of untapped potential for many businesses. Returns, exchanges, and remanufacturing possibilities can get overlooked as they are sometimes perceived to be drivers of cost rather than revenue. 

This article was originally published at OptimoRoute.com