Currently, reverse logistics has a troublesome tendency to be less developed than its front-facing counterpart, and its cost impacts are notoriously high. The ideal solution is to partner with a provider that is capable of handling both forward and reverse logistics with high levels of efficiency and professionalism, asserts Agam Garg, General Manager, Yango Delivery UAE, in this special contribution.
Fast food, groceries, clothes, electronics, gifts — the list of items delivered daily to the doors of UAE residents is a long one and has expanded in recent years. The sheer volume of commerce conducted between businesses and private households across the nation may lead one to assume the country’s last-mile delivery sector is among the most advanced and robust in the world.
This assumption would not be without justification. Since the early days of the COVID pandemic, forward logistics has scaled and matured significantly producing intuitive and informative user experiences that have led to yet more customer engagement.
While this is a success story worth discussing, it does not tell the whole tale. Let us consider reverse logistics, the important work of moving goods back up the supply chain. This can be sold goods returned by customers or unsold goods returned by distribution partners.
Optoro
Washington DC-headquartered Reverse Logistics technology company Optoro estimates that for every dollar of the retail price of a good, we can add 66 cents to the cost of its return. That means it typically costs companies US$ 66 to process the return of a US$ 100 item.
We must also consider the adverse effect poorly managed reverse logistics has on the customer experience and hence brand reputation. We should remember that customers involved in the process are already displeased with the product.
These are digital natives, not known for their patience with drawn-out processes. Frustrate them further at your peril. If we also consider that we live in the age of ESG and that ill-conceived delivery operations lead to negative environmental impact, we can see plenty of incentive to optimise reverse logistics.
Two directions, two partners
As it stands, the UAE logistics market is home to an impressive majority of forward logistics providers. However, the number of reverse logistics providers is very small, relatively speaking. Traditionally, businesses have partnered with one provider for forward logistics operations and another for reverse.
This complexity can lead to a hampering lack of visibility into the process for the seller. Meanwhile, the customer experience is impacted by a scenario that will make little sense to someone outside the industry—that a product found to be defective on arrival cannot be immediately returned to the hands of the courier that delivered it. “Not authorised to process returns” is a response that will ring hollow in the ears of most of today’s customers.
The ‘not authorised’ problem evaporates, and operations become more streamlined across the board. Contract negotiation is also simplified, as is management and communication. Customers and suppliers endure far fewer missed collections under this system.
To make unified logistics work, companies must invest in the right technology. Even with a robust internal fleet or the best provider around, operations cannot hope to match the expectations of the market without an agile platform that can model last-mile operations flexibly. Not only do current solutions not meet this criterion; they have been deliberately designed to do the opposite, to cater to the current approach of distinguishing between forward and reverse logistics.
One route, two directions
Things must change if businesses are to capitalise on growing consumer markets. A good logistics platform must empower a delivery driver to execute both forward and reverse logistics within the same round trip.
While revamping their forward-reverse policy, businesses should also address another shortcoming of many fleet management platforms—that they only allow drivers to carry out one pick up and one drop off per route. If operations allow for the execution of multiple pick-ups and drop-offs in a single route, efficiency will be increased by many orders of magnitude.
Effective labelling
In the delivery arena, efficiency runs on effective labelling. While this is obviously true for forward operations, it still applies to returns. In fact, the risk of improper labelling is higher with reverse logistics given that the labelling process is generally left to the driver and carried out at the customer’s location, while the customer looks on impatiently.
This is where the right process can come to the rescue. Businesses must provide their delivery professionals with easy-to-apply labelling and packaging to ensure a return can be processed quickly and efficiently.
Returns labelling offers opportunities for efficiency enhancements that are especially significant to brands like clothing retailers, which experience above-average rates of returns. Such businesses could even get ahead of the curve by providing return labels with each original package at the time of delivery so customers or couriers can apply them quickly and conveniently.
An age of options
Return logistics is a cumbersome process and has traditionally been a drag on profitability, but in the experience-first economy, it is a crucial element in maintaining customer satisfaction and brand loyalty. Just think about how many bad reviews you have read where the underlying gripe concerned a poorly executed return process.
We live in an age of options, digital options that ensure we do not have to accept prevailing inefficiencies. The right fleet management platform with the right suite of options can pave the way to multi-drop-off, multi-pick-up, forward and reverse logistics that keeps customers happy and shaves business costs. In a hypercompetitive market, advantages accrue to those that stand out. If your competitors cannot crack the unified logistics equation and you can, that can only be good for brand longevity.
