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What to Know about Reverse Logistics in 2022

Feb 1, 2022

Reverse logistics tends to see a spike in the first quarter of the year, and 2022 is no exception. Following the holiday season, consumers often have one item or more that they wish to return, so companies have to anticipate this trend as prices and online shopping increased. This past season, U.S. holiday sales jumped 8.5 percent, and online shopping specifically rose 11 percent. The more consumer spending occurs, the more companies can expect returns, also known as reverse logistics, to come into play.

The basics of this process is defined as the process of the return of products one or multiple steps back in the supply chain, either from final destination back to shipper or back to distribution center. There are many factors involved in the process, including keeping costs low, keeping the customer happy with an easy return process and helping plan for the unknown. Our team is working closely with customers and carriers to make this a smooth process with the right reverse solutions.

Process Challenges

E-commerce shopping is constant in today’s market, and consumer demand remains high. Limitations impacting those in the reverse logistics sector include mainly labor shortages and ongoing COVID-19 obstacles. Considering these drawbacks paired with the costs of labor, transportation and warehousing that are required, the average return will cost retailers two-thirds of the original price for the item. This not only impacts the actual profitability of a company’s sales, but it also affects the eco-friendliness of the supply chain, since reverse logistics require additional packaging and transportation. If this process is a hassle for the customer, they are likely to not shop with that retailer again, which will create a loss in business and future sales.

A big challenge that retailers face is meeting the expectations of their customers. In a world where one, two or three-day shipping is normalized, many companies feel the strain to get their products out to consumers to ensure loyalty and satisfaction upon delivery. Constant visibility of a shipment’s location and estimated time of arrival are also expected, and although delays are more understood in recent months, speed and efficiency are still very important. This expectation goes beyond the initial order if the customer opts to return a product for a refund. Retailers then must keep visibility and urgency top of mind to keep their customers happy with no disruption to business operations. That’s when the use of a 3PL partner can help. Our team works with our trusted network of carriers to find the best optimized routes for the return logistics process to benefit any business.

Technology in Reverse Logistics

Technology and reverse logistics go hand-in-hand to ensure retailers can keep up with the demand from both outgoing orders and incoming returns. Processing inventory efficiently maintains profitability and customer satisfaction, so investing in solutions that limit disruption or error are imperative. Manually processing inventory provides room for mistakes and potential delays that could equate to lost time and money. For shippers that desire assistance with their reverse logistics, a 3PL partner will provide peace of mind and support in both steady and overwhelming markets. 

NTG Solution

Reverse logistics is an important piece of the supply chain puzzle, both from a customer-facing perspective and an internal operations standpoint. It’s most often a necessary offering that companies have to plan for, especially after the new year as a follow-up to the holiday season. With the right plan in place and partner on your side, reverse logistics is more efficient and successful for any business in the retail space. 

NTG’s extensive carrier network keeps the reverse process moving and helps our team provide the best service to customers. Our team also works closely with customers by providing end-to-end visibility solutions so the customer can be prepared to adapt quickly to manage return loads.

To learn how NTG can help your business handle reverse logistics demand, contact one of our logistics experts today.