Episode Transcript
[00:00:00] Speaker A: Hey, this is really not salvageable. You need to do something with this immediately or not.
[00:00:05] Speaker B: Safe to donate. Yeah, it's never resolved in one email or one conversation. There's a lot of back and forth involved.
[00:00:11] Speaker A: Man, oh man, I spent 60 bucks on that. You just taught me to throw it away.
[00:00:15] Speaker B: How overpriced was this?
Super inefficient, problematic. And then it's gonna take you a while to get through it.
[00:00:20] Speaker A: So that leads us right into our solution.
[00:00:22] Speaker B: So it's just like a normal order. The only difference is you're just doing it in reverse.
[00:00:26] Speaker A: Right?
[00:00:28] Speaker B: Calling all CPG shippers, truckers and logistics pros.
Welcome to the truck. Yeah. Podcast your ultimate cheat code for smarter shipping, smoother logistics and dominating the shelf where it matters most. Buckle up, it's time to learn, laugh and get your freight on.
[00:00:46] Speaker A: Ladies and gentlemen, welcome back to another edition of the Zipline Logistics podcast. My name is Jesse Jewett. With me as always, Teddy Lee Knox. Hello, Teddy.
[00:00:59] Speaker B: Hello, how are you?
[00:01:00] Speaker A: Wonderful, wonderful, wonderful. We got a great topic today. We're talking reverse logistics. Drop top, flip it and reverse it. What comes back, what goes back must come around. Reverse logistics in CPG brands.
Very, very exciting. So we're going to talk about the process of products moving backward through the supply chain for returns, recycling, resale, etc, reverse logistics. How that impacts the CPG profitability, retailer relationships and brand sustainability.
The definition importance for, for CPG brands, key challenges, best practices and how to work smarter with your logistics partners in reverse logistics. Yeah, I think it's funny side note, you know, there's some of these big box retailers like Amazon, they, they just like don't even send it back. We'll just. Yeah, you're fine. Yeah, we'll send you a new one. You're good. Keep it wild.
[00:01:54] Speaker B: It is.
[00:01:54] Speaker A: We all know how much effort it takes to get your product on the shelf.
What happens when it comes off the shelf or worse, back from the customer.
[00:02:04] Speaker B: Yep. I always like to compare this to like, so I'm, I'm guilty of this. But like just general consumerism, shopping, I return a lot of things because I have to pick it up. Don't have chance to try it on, don't have time. My kids try it on, has to take it back and return it. And I think that's why there is that window of when you can return things because it is a pretty big hassle. It takes a lot of time for people to be able to re scan it in, re put it, you know, back on the shelf or return it to the warehouse, whatever it might be. To your point of Amazon, I think that they know sometimes what the. What it's worth and if it's going to take more money to return it.
[00:02:38] Speaker A: Yeah.
[00:02:38] Speaker B: Versus you know, actually putting it back on based off of how it's, how it's selling, things like that. So what I know about this is that these, this reverse logistics is usually only for a couple reasons. So returns, recalls, damaged goods, inventory.
It could be also something as simple as the wrong coding.
[00:02:59] Speaker A: Yeah.
[00:03:00] Speaker B: So it. Or out of date or seasonal buyer made a mistake, whatever it might be, those things can go back. And a lot of this depends on the retailers you're going to and how those DCs operate.
Some DCs will hold product versus others that are cross dock facilities. They don't have the space to hold those things. So those returns need to be taken care of right away.
Also it depends on you and your brand if you want it back and you want to reuse it.
We have a podcast and a blog post about how you can use product that is not selling, about to expire, no longer in season, what you can do with those things. And that also really helps with your brand. So there's a.
Those are the things that I know.
But again you want to make sure you're getting that product back and getting the right product there so you can keep those relationships strong and make sure that your product stays on the shelf.
[00:03:54] Speaker A: That's awesome. Yeah. I mean we've got like you said, damages seasonal products that are being returned by the retailers, customer returns for direct to consumer brands, product recalls or expired goods. Those are, you know, those are more like destroys.
[00:04:09] Speaker B: Yep.
[00:04:10] Speaker A: Right. But why it's important and how it's titled like trucking. It's a great opportunity to have another good experience with. For your customers. Right. If you, if you're, if you own that reverse flow and it's seamless, then that leaves them having a good feeling in there.
[00:04:27] Speaker B: Yeah.
[00:04:28] Speaker A: With your brand which.
[00:04:30] Speaker B: This is a pretty stressful situation. So if you, if you can find a way to make it a knot stressful situation it could make a big difference because it's. This is the kind of thing that creates a lot of white noise.
[00:04:41] Speaker A: Yeah.
[00:04:42] Speaker B: You're reaching out to a unfi to pick up four pallets that were refused and you need to find the right carrier to get in there. If they, if you don't, you have the DC reaching out to the customer, to the buyer. Everyone's asking questions, panicking, freaking out. They want to get the product back. And it's not something that you want to spend a little money on either.
[00:05:00] Speaker A: Yeah.
[00:05:00] Speaker B: So that's when we can come up with some unique solutions like consolidation or, you know, picking it up and, you know, taking it somewhere else. Like I think some of the examples we talked about before is like a FabFitFun subscription and selling it there to use for boxes. Things like that gets your name out there and allows you to reuse the product, depending on, of course, what it's being returned for.
[00:05:21] Speaker A: Sure, sure. So the, the, the elements of the. Why it's crucial for a CPG brand. We've got a cost recovery. Right. So you can resell the product instead of writing it off completely. We've got retailer relationships. You mentioned unfi. Right. You want to not only service like the end customer, but obviously your retailer partnerships as well.
So they expect you to handle this efficiently, just like a delivery. So if you don't and it's clunky, then that can again cause a lack of trust or maybe change the shelf space experience.
[00:05:53] Speaker B: Exactly.
[00:05:54] Speaker A: Sustainability. Consumers and retail partners care about recycling and waste reduction. We don't want to throw everything away. That's not a great look. Look, data and insight. How about this?
Understanding where the returns or the rejections or things are happening. That's very, very helpful in understanding your logistics as a whole, your routes, if there's an offloading issue, your packaging, et cetera, et cetera. And then finally, we already touched on the brand experience, you know, with that specific end customer.
A transparent return process protects your reputation and improves customer loyalty. I do agree with that. If it's just a pain in the, you know, not a great look, not someone I want to deal with later on. So let's talk about navigating the process. So talk to me about processing the return or how that works.
[00:06:45] Speaker B: So it would be. So it's just like a normal order. The only difference is you're just doing it in reverse.
[00:06:51] Speaker A: Right.
[00:06:51] Speaker B: So you're picking up where the consignee used to be and bringing it back to the same facility or possibly a different one.
[00:06:58] Speaker A: Yep.
[00:06:59] Speaker B: And there's usually different reference numbers, different things that you need to confirm, but the operations are essentially the same. You need to confirm that you have the right, the right carrier going in, the right specifications and all that information. And then also, again, something that's really important with this is what those KPIs are, where are we returning and how we are returning it to be the best, best experience.
[00:07:21] Speaker A: Yep.
[00:07:22] Speaker B: So this is those questions like you were talking about, like, is it more important to get this picked up and get it out of here right now to manage this relationship and get it off the dock, or is it more important to do it as cost effectively as possible?
[00:07:33] Speaker A: Yeah.
[00:07:33] Speaker B: So there's a couple options of what you can do.
[00:07:35] Speaker A: So that would be like modal solutions, right?
[00:07:37] Speaker B: Exactly. I guess we're going into another. Other points now. But like, so like the inspecting and sorting.
[00:07:42] Speaker A: Yeah.
[00:07:42] Speaker B: So there's different ways that we would need returns. So when we've talked about this before, if you are having a rejection at a big box retailer, you may want to salvage that a little bit differently. So that goes into taking it somewhere, inspecting, sorting, then figuring out what you want to do with what, updating the po, returning, recycling, donating different products from there.
[00:08:04] Speaker A: Yeah, you got to figure out if it's going to. Like you said, if they're going to try and sell it again. Right. That, that. And that would be understanding the value of the product. That's, I think, where, yeah, we touched on with like Amazon. It's just like, yeah, throw it away. It's. Man, oh man, I spent 60 bucks on that. You just taught me to throw it away.
[00:08:21] Speaker B: How overpriced was this? Yeah, so I think it's. That again, is really important on the partnership piece as well, is when someone's saying like, hey, what do I do with this?
Having those plans and having someone to be able to act on your behalf with your permission to say you had three items damaged, we recommend that you dispose of that case because it is leaking, you can't donate it.
Dispose of the case and then the rest. This is what it would be. It's better to deliver short versus not deliver at all to this facility and then. And then go from there. Update the purchase order and then have the right communication in place there.
[00:08:59] Speaker A: Tangent alert, shout out to all the folks in the supply chain taking pictures on their phones or at the terminals or whatever, showing the damage, showing a potential issue with a product that's really impactful.
Even in my 18 years of logistics, that's obviously been enhanced immensely with cell phones and things of that nature. So appreciate you, everyone.
[00:09:24] Speaker B: I think that is actually a really great point too. So that kind of goes into like, I guess the next point, it was like repair, refurbish, repackage. We've had times where LTL orders are refused for the wrong product or issue, but the problem actually was there was one number off on the bol. Yeah, it was refused because the PO was incorrect.
Not what they expected, the product is fine. So if you are not actually confirming all the information, you don't know those differences of the slight differences in terminology. Yeah, that's, that's a really costly mistake.
[00:09:56] Speaker A: Oh yeah, just the details. I was thinking too, you mentioned maybe a numbers off in the. Well, but you know, mistakes happen, right. Maybe you picked lemon lime and you were supposed to pick strawberry kiwi for a particular product and it gets there and you've got a, you know, a third of a palate is lemon lime and that receiver is expecting strawberry kiwi, kiwi strawberry.
And so you take everything off and then maybe they put the lemon lime back on, wrap it up, boom. All right, this is in, let's call it Columbus, Ohio. Maybe that particular receiver is not going to receive that lemon lime, but we can divert it over to somewhere else for a small exact stop off charge or something like that. That, that you know, makes it efficient. So that's a different way to handle.
[00:10:40] Speaker B: A return or use it for a marketing event.
[00:10:42] Speaker A: Yeah. So how about recycling and. Or disposing it? Right, like you kind of touched on that already. The pictures go a long way. Hey, this is really not salvageable. Yeah, you need to do something with.
[00:10:53] Speaker B: This immediately or not safe to donate.
[00:10:56] Speaker A: Yeah, it's not putting it back into the supply chain or getting it on the shelf. It is, it needs to be disposed of. And what we do and what we process is it needs to be disposed of correctly with some. Yeah, in some cases. Right.
[00:11:11] Speaker B: Incinerated.
[00:11:12] Speaker A: Yeah, crushed. So you gotta, gotta document all that information. Like I wish everyone could have a damaged product and just take it home and you know, play with it, eat it, whatever. But you know, the brands don't wanna take on that risk, liability and I.
[00:11:27] Speaker B: Think so we've been talking about logistics and supply chain. So something that I think is really important to, to mention is a lot of these things are considered logistics, you know, like A to B, B to C. But then when you get into like the data, insights, the brand experience, the you know, like repair, refurbish, that to me is a little bit more supply chain and that goes through your entire network. And those are things that you really need to be paying attention to. Yeah, you don't need to be paying attention to like hey, I got the appointment scheduled, like you're good, let them do that. But everything else, like giving that information back, best practices, the process, like that goes a little bit more to fulfillment and supply chain. And I think those are the things that are really important to have a Pulse on. But also make sure that you're in your network has a pulse on, including all your partners.
[00:12:12] Speaker A: Absolutely.
[00:12:12] Speaker B: If you keep picking the wrong products, if you are not wrapping it correctly and it keeps shifting because of the friction, if you don't have the right dunnage involved, those are the things that can cause bigger problems.
[00:12:24] Speaker A: What are some other challenges?
[00:12:25] Speaker B: High return volumes.
[00:12:27] Speaker A: Yeah, we don't like those.
[00:12:28] Speaker B: No. So, you know, this can happen for a number of different reasons. Especially, you know, you go into the holidays or when you have promotions so, you know, an increase of sales and increase of return.
I feel like I see this one the most when it's a high return volume, when there's like a quality control issue. Maybe the. The package isn't correct or maybe they're like the cap isn't closing all the way. Not necessarily. There's something wrong with the product, but there's something wrong with the experience that the product would create. I feel like that's a big one and that those ones can usually be pretty stressful.
Retailer compliance. So this one is because it creates multiple problems. So you have to return it because it was refused or also you see that it's not the right coding date or not the right shelf life date. Those can cause some problems. And also depends on how you need to be shipping it there, how you need to be storing.
[00:13:17] Speaker A: Yeah. The retailers have a lot of similar expectations, but in some cases they're different. So you got to do all of them.
[00:13:23] Speaker B: Exactly right.
Storage issues. So you're having to hold it. So if it's refused, depending on the mode, you could see very high storage charges very quickly.
[00:13:33] Speaker A: Yeah.
[00:13:33] Speaker B: Versus having someone who can kind of hold it over the weekend. Cross docket. A couple different things there Also creates lack of visibility. It's hard to track. They said that they were refusing all of it. Is it actually all of it? What codes? Can you please confirm us what happened?
[00:13:48] Speaker A: Yeah.
[00:13:48] Speaker B: Depending on if it's a white glove service, are we picking it up and palletizing it for them? There's a couple different options there. And then inefficiencies. So wasted capacity, unpredictable returns, keeping warehouse staff there late for reworks or redeliveries. To recoup. It just depends. So it's. They can create some inefficiencies or, hey, this is all wrong. You need to go back and find all of the product even though you just did inventory, go find it again, pull it out, make sure we don't ship it again because it can't happen. Depending on what the issue Is, or.
[00:14:21] Speaker A: It'S like, you know, I think of a pallet that's totally fine, that gets rejected. Say you had a truckload, 26 pallets delivered to a retailer. One pallet gets rejected for whatever reason. They're like, okay, yeah, just ship it back to the, take it back to the shipper. Like, okay, we just drove 900 miles. You're gonna move one pallet on a 53 foot truck back to the shipper.
[00:14:44] Speaker B: I need it back now. I need it for another. I need it for another customer.
[00:14:47] Speaker A: Right. Which is fine.
[00:14:48] Speaker B: Yeah.
[00:14:49] Speaker A: You know, there's a cost associated with that. There's a lost some cost for the, for the driver, for the trucker who maybe has most likely has another reload out there. So all those things are considered. I think that would be wasted capacity. Right. Got 25 other pallet spaces that you can utilize.
[00:15:08] Speaker B: Yeah.
With that. My biggest thing with that is that if you are, if you are a transactional shipper and you are working with multiple different partners, asset based, non asset based. And every single time a problem happens and they ask you, it's never resolved in one email or one conversation, there's a lot of back and forth involved. And if you are noticing returns, that's when I think that's your cue that you need to reach out to someone and figure out a plan.
[00:15:33] Speaker A: Yeah.
[00:15:33] Speaker B: Because if you are constantly going back and forth, that's. That goes into that inefficiencies. Yes, it's an email, but if it takes 45 minutes to respond to something and you just incurred an additional 45 minutes of detention, wait time layover, super inefficient, problematic and then it's going to take you a while to get through it.
[00:15:52] Speaker A: So that leads us right into our solutions.
So auditing your return policies, understanding the retailers, we already touched on that. But also your three PL partners. Right. Or your carriers, you know, what, what are their plans when something happens? Do we have a, do we know the LTL terminals that are close by that we can drop off this one pallet that's remaining? Do we have a rework facility hint. And check out our blogs for our rework Costco network.
So just understanding all those and it kind of goes into the next one. Collaborating with the carriers early, it's kind of the same deal. But you know, planning and understanding what exactly is the, the tactic, the strategy once, if, if and when we do have a return and especially those ones that there are scenarios. Right. Oh my. We loaded two pallets of lemon line Lemon lime and they shouldn't have gotten it. So like we're going to have to have a plan. We know that's in transit. Right. We're not going to turn around the whole truck, but we know that that' so we're gonna have to have a plan ahead of time for these two pallets.
[00:16:51] Speaker B: Yeah. I think also this stuff never happens when there's nothing else going on. These things happen when there's a lot of other things going on. So to your point of having, you know, like auditing your returns and collaborating and having the data is really important because you need to almost have that separated so you can quickly go back and evaluate. So depending on when this is happening, you might be forecasting, you might be creating your next plan and you say, why was you know, like my unfi cost per piece a dollar higher than what I expected.
So coding it correctly and also being able to use that to understand and then create a plan with the entire network rather than just your shipping costs.
[00:17:32] Speaker A: Yep. What other solutions we got?
[00:17:35] Speaker B: So automation when it comes to tracking and updates, that's really important there. Again, because it's a reverse logistics.
The receiver may want some more communication than you would normally give them. So having that, having a link, having communication there is helpful and then the sustainability. So again, making sure you have the right carrier and then making sure that you have the best process using backhauls, dropping it off at a, at a terminal and having it come back ltl the rest of the way instead of cross docking it and having an ltl carrier pick it up. There's a couple different options that you can do. But again, having those solutions, I think the biggest thing is it needs to be a conversation. Even though you have a process, maybe someone has something slightly better or different.
[00:18:17] Speaker A: Right.
[00:18:17] Speaker B: That you can enhance it and create a little less work for yourself and for your network.
[00:18:22] Speaker A: It's a fun part of the supply chain. Hopefully it doesn't happen too often for our customers or our carriers. But when it does happen, it's important that you have an expert who's ready to deal with it. That would be Teddy. Reach out to her at 888. Go zipline like and subscribe. Apple and Spotify, leave us a five star review. We'd love to hear from you. Thank you.
[00:18:43] Speaker B: If you have a reverse logistics story that.
[00:18:45] Speaker A: Oh my gosh. Leave a comment, let us know. Yeah, that would be awesome. Thank you everyone for joining us in another edition of the Zipline Logistics podcast. We'll see you next time.
