Returns ManagementA Pivotal Moment for the Logistics Industry

Ian StanfordPublic Policy AnalystU.S. Postal Service OIG2016 PSA Seminar10/20/2016

A Time of Transition• In the past, large retailers relied heavily

on liquidation.

• Current trends shaping the future of returns logistics

• Rising ecommerce volume

• Access to global markets

• Technological innovation

• Shifting consumer preferences

Key Challenges of Returns

• Returns can be costly

• Consumer expectations are high

• Reverse and forward processes in logistics are very different

Source: LuxuryDaily.com

How Returns Work

Source: USPS OIG, The Evolving Logistics Landscape and the U.S. Postal Service.

THE RETURNS MARKET

DELIVERY COMPANIES

3PLs

SOFTWARE DEVELOPERS

RETAILERS and MANUFACTURERS

LIQUIDATORSREVERSE SPECIALISTS

WASTE DISPOSAL

An Industry Serving Two Customers

• Retailers

• Low Cost

• Scale

• Visibility/Routing

• Comprehensive Service

• Consumers

• Cheap (FREE)

• Quick

• Easy/Convenient

USPS Advantages/Opportunities

• Existing infrastructure could be used

• Returns to Post Offices

• Package Pick up

• Storage/Rerouting

• Returns Experience

• Trust and Presence

• PartnershipsSource: OIG Analysis of USPS RPW data.

02,0004,0006,0008,000

10,00012,00014,00016,00018,000

in T

hous

ands

Parcel Return Service Mail increased 30% since 2012

Total Pieces

Critical Challenges

1. Cross border Returns

2. Integrating Omnichannel Returns

3. Efficient Routing and Return to Market

4. Linking Returns Costs to Customer Experience

5. Design with Millennials in mind

6. Corporate Reorganization

Source: Findings from USPS OIG Returns Forum, Aug. 2016