Leading Edge Logistics, a major new third-party logistics (3PL) supplier to the automotive and heavy truck aftermarket, has announced the formation of a specialized reverse logistics team called LEL Recovery.

The team provides a variety of special services in support of customers faced with return goods issues. LEL Recovery team members will involve themselves in redesigning supply chain activities connected with inbound logistics such as:

• In-transit and temporary collection and warehousing
• Sorting, refurbishing and repair
• Environmentally responsible scrap handling
• Product and packaging recycling
• Call center setup and management

LEL Recovery specializes in redesigning activities required to create an efficient reverse logistics operation.
Because returns represent a negative adjustment to sales, their handling has historically been an inconvenient afterthought. The costs associated with the return activity are substantial, but are often buried in the overall warehousing and freight budget. Unusually high costs are the result of freight moving "against the flow," as well as from poor "return-to-stock" percentages.
"One of the prevalent beliefs is that returned products are always defective and of little or no value," said Tom Torcomian, president of LEL. However, according to Torcomian, "Industry numbers suggest that 75 percent or more of returned goods are not defective and many returned products can be recovered. This is especially true in the aftermarket".
The reality, according to the LEL Recovery team, is that the leading cause of returns is mistaken information provided at the time a sale is made. Another prime cause is that the product simply doesn't meet the customers' expectations, and is returned. "No matter what the cause, the hidden expense numbers are staggering," says Torcomian.
In the case of an average consumer good, for example, up to 7 percent of gross sales are given over to return costs. In the aftermarket, levels between stores and DCs can run as high as high as 20 percent.
The supplier cost of processing a return may be as much as two or three times outward shipment of the same item.
Estimates suggest that return logistics currently constitute one-half of one percent of the United States GDP.
The LEL Recovery reverse logistics team is organized to manage a variety of returned, damaged or obsolete products (including "cores," the components of products returned for rebuilding and refurbishing). Reverse logistics differ considerably from forward logistics. For example, collection locations must be set up to receive the used goods, and storage systems will ensure that as much as possible, the value still remains, and is not lost due to careless handling, additional packaging damage or excess freight and handling during the return process.
Said Torcomian, "Return logistics programs are challenging no matter what the product. They require the best efforts of creative people who have the ability to respond effectively to changes in the fast moving aftermarket supply chain world."