Podcast: What Is Reverse Logistics, and How Can You Navigate It?

Location Cubed

Key Points: 

• Perishable items could prove a logistics challenge for online returns.
• The advent of grocery item returns may necessitate new logistics infrastructure models.
• Hybrid logistics facilities could be a soultion for processing returns.

Weaver’s Rob Nowak, Partner, Tax Services, and Howard Altshuler, Partner-in-Charge, Real Estate Services, know many logistical challenges come into play when ordering something online. But what barriers exist on the backend for returning those online purchases?

Nowak and Altshuler discussed the world of reverse logistics to see if they could figure out what goes on when people need to return an online item and what logistical challenges companies face with a world turning more and more to ecommerce for all of their purchases.

Nowak wondered, if a specific ecommerce platform’s truck was already in a neighborhood dropping off items, why can’t they pick up a return, as well? But, in trying to answer this question, Nowak realized it might come down to logistics that are more complicated than a customer sees.

Altshuler saw specific online shopping trends posing additional challenges for logistics, such as online grocery shopping, where refrigerated goods may be difficult to handle from a return standpoint. In contrast, dry goods may be solvable challenges.

With the rise of online purchasing in traditional brick and mortar establishments like grocery, Nowak recognized the potential need for industrial growth in logistics centers.

“For every 10 logistics facilities, there might need to be one or two reverse logistics facilities just to handle the flow of goods back in, then redistribute those to their warehouses so those items can be resold,” Nowak said.

But, even if additional facilities were required to handle an influx of returns, Altshuler believed they’d utilize smaller spaces. “You’re not going to need a million-square-foot warehouse to hold returns unless it’s a regional depot or something like that.”

Subscribe to the Beyond the Numbers podcast on Apple Podcasts and Spotify for the next episode of this series.

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