An Industry Stuck in Reverse

By John Moore  |  Posted 2001-05-21 Print this article Print

And that's a good thing, logistically speaking.

The alarming numbers come from Jupiter Media Matrix: Online buyers will return 90 million items worth $5.8 billion in 2005.

Enter reverse logistics, the science of handling returned merchandise. Jupiter asserts that retailers must improve their "entire reverse logistics systems" to recoup the cost of returned items.

Logistics providers, not surprisingly, are ready to offer their services. Earlier this month, Airborne Logistics Services and ReturnBuy, which manage product returns and disposition, teamed to provide a reverse logistics service for the parcel industry.

Under the deal, Airborne provides core fulfillment and transportation services, while ReturnBuy manages product inspection and resale. ReturnBuy evaluates product returns and then sells the merchandise through a number of channels.

Some distributors, however, also are pushing into reverse logistics. IM-Logistics, the logistics arm of Ingram Micro, this month opened a 220,000 square-foot automated reverse logistics center in Harrisburg, Pa. The company spent about $6 million reverse engineering the former outbound distribution center into a reverse logistics facility, notes Michael Terrell, senior VP and general manager of IM-Logistics.

The channel, he says, "probably hasnt given the return part the focus that is needed as the technology turns have escalated," Terrell says. But apparently, theyll have to soon enough.

John writes the Contract Watch column and his own column for the Channel Insider.

John has covered the information-technology industry for 15 years, focusing on government issues, systems integrators, resellers and channel activities. Prior to working with Channel Insider, he was an editor at Smart Partner, and a department editor at Federal Computer Week, a newspaper covering federal information technology. At Federal Computer Week, John covered federal contractors and compiled the publication's annual ranking of the market's top 25 integrators. John also was a senior editor in the Washington, D.C., bureau of Computer Systems News.


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