UPS said this week that it expects to handle 60 million returned packages through Jan. 22, a 10% increase over last year, with 25% of Americans expected to make at least one return.
That delivery strain reverberates throughout the entire supply chain, and inefficient and manual processes can cut into brands’ revenue as returned items sit in warehouses, unable to be resold.
Warehouse automation company Berkshire Grey is hoping to ease some of that pain with its new Reverse Logistics software solution. The company said the software will accelerate the resale of returned goods and improve labor utilization.
“Returns processing has a significant adverse impact on the real profitability of e-commerce,” said Steve Johnson, president and COO of Berkshire Grey. “As online shopping continues to grow, returns operations, while more critical than ever post-holiday season, are struggling to keep up. By applying robotic automation to optimize reverse logistics processing, e-commerce retailers and 3PLs have an opportunity to change the equation for e-commerce returns and turn a negative into a positive.”
The company estimates that $120 billion worth of goods will be returned from this holiday season, creating inventory nightmares and cost challenges for retailers. The average cost of an e-commerce return ranges from $20.75 to $45.25 when factoring in the costs of transportation, processing, and markdowns/liquidation to resell, Berkshire Grey said. That is regardless of the item’s actual value.
According to the automation company, its Reverse Logistics solution moves returned items to saleable inventory 25% faster than manual processes and improves labor efficiency up to 35%, Kishore Boyalakuntla, vice president of products for Berkshire Grey, told Modern Shipper.
Reverse Logistics leverages Berkshire Grey’s Robotic Product Sortation with Identification (RPSi) and Robotic Shuttle Put Wall (RSPW) systems. The RPSi is used by 3PLs and central returns processing centers to pre-sort incoming packages by brand and merchandise category prior to opening and inspecting the merchandise. The RSPW systems rapidly sort returned products for faster putaway for resale or refurbishment.
“It does this by automating returns receipt confirmations and pre-sorting unopened packages by brand and category so that inspection processing can be faster and more efficient. Then, by automating sortation of resellable items, [it] gets them back into inventory faster than manual sorting and putaway,” Boyalakuntla said.
The RPSi can be used to pick and sort a wide range of retail goods, including health and beauty items, apparel, electronics, housewares, packaged food, child care products, pet care, office supplies, toys, medical devices, and pharmaceuticals. It offers integrated order processing with automated storage and retrieval systems.
The Robotic Shuttle Put Wall is an automated solution that can handle as many as 240 orders at a time in a single wall, up from an average of 80 orders that manual walls can handle, the company said.
A put wall is a shelving system outfitted with lighting that indicates when an order is complete. Each slot in the wall can accept a tote that represents an e-commerce customer order. Typically, workers or robots place items in the totes or slots from one side of the wall, and on the other side, workers or robots remove the items/totes for packing.
Because both RPSi and RSPW can be used for both inbound and outbound item processing, the operator must indicate through the software which function the systems should be performing, Boyalakuntla said.
“For instance, when using RPSi in an outbound fulfillment situation it autonomously sorts packages by route and destination to containerize multiple packages bound for the same region or ZIP code to take advantage of preferential zone skipping carrier pricing used by the carrier to sort bunches of e-commerce packages into a single container for more efficient handling within their network,” he explained. “When using RPSi in the returns process, customers typically sort by merchandise brand or category to send containers of like products to inspection stations that are configured to handle those specific brands or categories.”
While returns inspection remains a manual process, Boyalakuntla said Berkshire Grey’s Reverse Logistics system can at least automate part of the process, speeding the overall reverse logistics operation.