Expected Historic Reverse Logistics Volumes Post Holidays & How Transportation Management Systems Will Manage Returns

Expected Historic Reverse Logistics Volumes Post Holidays & How Transportation Management Systems Will Manage Returns

Just as shipments out to customers are expected to be high throughout the holiday season, reverse logistics and carrier returns will soon spike. E-commerce returns occur at a much higher rate than what is seen at brick-and-mortar shops, especially during the holidays. As reported by Shelley E. Kohan of Forbes, an estimated 25% or more of e-commerce sales result in returns while the rate of returns for brick-and-mortar shops is usually 10% or less. Data and figures like these make it necessary for logistics and shipping managers to prepare for returns logistics following the yearly buying rush.

Why Returns Spike After the Holidays

Preparing for reverse logistics and an increase in returns after the holiday shopping season just makes sense. When sales go up, the number of returns will also go up, even if the returns rate stays the same. Volume increase in sales means an increase in returns. According to Kohan, “E-commerce sales are expected to increase by 35.8% for the holiday season ($50 billion more than in 2019), reaching $190 billion for November and December combined. The value of returned items is projected to be $47 to $57 billion.” A return process that is customer-centric and proactively communicated is essential for shippers who want to effectively manage and scale to rising return volumes.

A TMS Enables Faster, Better Returns Management

Making the most of reverse logistics often comes down to having acceptable logistics management practices in place. A modern, enterprise-grade transportation management system (TMS) platform will streamline the shipping and return process. Such systems allow shippers to automate and simplify both the initial delivery and returns logistics process. An enterprise TMS can also help save time and reduce costs as shippers manage shipments through the duration of the year, well after returns season.

Tips to Increase Reverse Logistics Efficiency in the Reverse Logistics Peak

Dealing with e-commerce reverse logistics can be expensive as returns have historically been an afterthought. However, it is imperative that shippers plan in advance of returns being needed to preserve the customer base, profitability, and growth. A few easy ways to increase efficiency when dealing with returns include:
  1. Connect your returns processes to the TMS. With everything connected, data and information can be more easily accessed.

  2. Consider outsourcing inbound deliveries of returns to a third-party location. Letting someone else handle the work can free up valuable resources, including space and labor.

  3. Take stock of lessons learned, such as the need to improve product descriptions. Paying for a mistake now can help with scalability and flexibility.

  4. Use a strict Returns Management Authorization (RMA) process to prevent unauthorized, fraudulent returns. Returns are necessary, but it is essential to make sure the system is not being abused.

  5. Let analytics improve returns processes on the fly. Automation and other streamlined processes can make reverse logistics and returns easier to manage as the processes and automated data-capture create an environment for deeper analytics. Analytics provide a road map to improve future decision-making by informing shippers of where they went wrong and how they may change to yield a more desired business outcome.

Select the Right TMS to Better Manage Reverse Logistics

Reverse logistics will always have a peak season after the typical holiday shipping season. An inability to maximize efficiency in reverse processes will lead to higher costs. Fortunately, using new systems, including an advanced TMS, can make a world of difference.

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