Reverse logistics offers potential for sustainability

Reverse Logistics

Reverse logistics offers potential for sustainability
Return logistics, also known as reverse logistics, encompasses all processes for collecting, handling and transporting goods that are returned by customers (returns) or that are no longer required. It also coordinates their reprocessing, repair or disposal. From a holistic point of view, reverse logistics is now part of a company’s logistics chain in addition to procurement, production and distribution.

Reverse logistics is the counterpart to distribution logistics or sales logistics, which relates to the planning and control of all processes that arise between the production company and the customer. This includes the flow of goods and information and is used to prepare and carry out the distribution of goods.

The aim of reverse logistics is to close the recycling loop.
The conservation of natural resources is a key issue. Reverse logistics primarily serves to increase customer satisfaction, but this does not exclude careful use of resources. In the meantime, customers are even increasingly demanding that companies pay attention to ecologically oriented, environmentally friendly and sustainable production. This focus arose, among other things, from legal requirements that oblige production companies to undertake extended returns and waste disposal companies to a sustainable recycling economy.

The main areas of reverse logistics include disposal, returns, warranty and container and reusable systems. In addition to disposal, where increasing attention is paid to avoiding waste and utilizing waste through recycling, returns in particular offer great potential for environmentally-oriented action.

Returns offers enormous potential for more sustainability
Returns logistics are particularly important in the mail order business. This includes coupons, repair or disposal of the goods, repackaging and then reintegration into sales logistics. These areas would offer great potential for more sustainability, which is difficult for many retailers to implement.

In a study by the German Dealers Associationin 2019, where 531 digital and stationary retailers were surveyed, it was found that retailers destroy an average of 11.4% of their returns. The reasons for this are: damaged goods (95%), recycling uneconomical (18%), perishable goods (14%), donations uneconomical (11%), no storage space (5%).

The high proportion of damaged goods is largely (80%) due to transport damage. The reasons for this are to be found in the cost-effectively selected packaging and careless transport service providers. For many retailers (42%), safe and sustainable packaging now plays a much larger role than it did a few years ago (26% in 2018), but the prices for it are often deterring. For 59% of retailers, the cost of packaging is more important than its reusability (39%).

It can be seen that retailers are becoming more aware of sustainable packaging and are likely to switch to it as the price comparison for standard packaging improves.

Shipping service providers can also make an important contribution to environmental protection
Shipping service providers play a very important role for companies because they should deliver their goods reliably, quickly and as cheaply as possible. For 90% of the companies surveyed, reliable delivery is the number one important criterion for choosing a shipping service provider. This is followed by shipment tracking (79%), short delivery times (73%) and low costs (60%).

34% said that it was unimportant whether the delivery services ensure CO2-neutral delivery. However, this value has improved by 20% compared to the previous year. A trend reversal can thus also be seen in the area of ​​sustainable parcel delivery.

 

Sources:
Cf. Supply Chain Minded, How Reverse Logistics can Help Optimize Value and Sustainability for Your Business, accessed 23.11.2020
URL: https://supplychainminded.com/how-reverse-logistics-can-help-optimize-value-and-sustainability-for-your-business

Cf. BWL Lexikon, Reverse Logistik, accessed 23.11.2020
URL: https://www.betriebswirtschaft-lernen.net/erklaerung/reverse-logistik/

Cf. BWL Lexikon, Distributionslogistik, accessed 23.11.2020
URL: https://www.betriebswirtschaft-lernen.net/erklaerung/absatzlogistik/

Cf. Händlerbund, Logistik-Studie Retouren, Versand, Verpackungen, accessed 23.11.2020
URL: https://www.haendlerbund.de/de/downloads/logistik-studie-2019.pdf

Pictures:
http://www.freepik.com“>Designed by rawpixel.com / Freepik
http://www.freepik.com“>Designed by pikisuperstar / Freepik
https://www.freepik.com/vectors/background; Background vector created by rawpixel.com