While accepting returns from customers is not a new practice, the extreme growth of eCommerce has led to an explosion of return processing that has caused significant challenges for retailers of all sizes. In 2020 one of the largest global 3PLs specializing in multimodal transportation services reached out to Sunland Logistics Solutions to help manage the liquidation of mixed pallets for one of their Fortune 50 retail customers.

Problem

The leading retailer had their reverse supply chain built around a Central Returns Distribution Center that received unwanted items from customers who were either returning products to one of their 1,800+ stores in the U.S. or by way of parcel shipment. From there, they were selling truckloads of mixed return products through a bid auction. Although this process minimized logistics costs, it was not an optimal solution.

The lack of product sortation caused the truckload bid prices to be undervalued, so the retailer was not maximizing their potential revenue from secondary markets.

Solution

Does the cost of the logistics support and returns processing justify the revenue recovered to sort it? This was the question the retailer and their 3PL shipping partner set out to answer when they connected with Sunland to help develop a returns sortation solution.

After a collaborative process to fully understand both their direct 3PL customer’s needs and the retail customer’s requirements, Sunland’s team provided both the operations design expertise and a customizable returns system solution to help drive efficiencies in the process and provide valuable real-time data visibility to the retailer.

The 80,000 SF returns sortation operation joined Sunland’s Reverse Logistics Center of Excellence. This 750,000 SF Industrial campus is located just outside of Greenville, SC – a centralized logistics hub in the growing Southeast market. Here the mixed pallets are received by the truckload from the centralized returns distributions center and returned products are sorted into 1 of 10 categories, i.e. Home goods, Toys, Apparel, Kitchen, Seasonal, etc.  The condition of the product is also assessed by Sunland’s team and is dispositioned as either Grade A or Grade B to determine if the product is able to be resold based on the retailer’s qualifications.

Off-the-shelf returns management software solutions are often expensive and don’t always fit the customer’s specific needs. With the help of Sunland’s strategic IT partner, ByteAlly, a custom returns management system able to integrate with its existing Tier 1 Warehouse Management System, Infor, was developed quickly and at a fraction of the cost. The customized returns management system was designed to meet the customer’s requirements, provide enhanced real-time visibility with productivity benchmarks, and optimize the user experience for the Customer Service Representative (CSR) processing the returns to help drive efficiency.

The sorted products are listed by category either as a Truckload (TL) or Less-than-Truck-Load (LTL) on the secondary marketplace. The auctions are open for 3-4 days a week and the products are sold to the buyer with the highest bid

Results

With the help of Sunland Logistics Solutions’ process design, implementation, and management of their new sortation center and customized returns management software solution, this leading retailer was able to generate more value from its reverse supply chain.

The number of un-manifested pallets has been reduced and the product value has increased for secondary markets. Additionally, through Sunland’s focus on Lean and continuous improvement, they have increased truck cubage efficiency, helped increase on-time delivery to customers, and capitalized on seasonal products for holiday markets.

  • Improved product information for pallet contents
  • Increase in product value for secondary markets
  • Increased on-time delivery to customers
  • Real-time visibility & performance metrics

Both Sunland’s direct 3PL customer and the leading retailer are pleased with the results of the partnership and the scope of the operations is forecasted to grow.

“Sunland has been a great service provider, willing to build solutions to the often complex nature of reverse logistics. It’s been a pleasure working with everyone as they’ve always been professional, friendly, and service-driven.” – Account Manager, Global Transportation 3PL