UPS forms alliance with reverse logistics specialist Optoro
UPS Inc. has entered into an operational alliance with
Optoro Inc., a provider of IT-based reverse logistics services, and has invested an unspecified amount in Optoro
as part of a new $30 million round of funding for the
Lanham, Md.-based company, the two firms said just
before Christmas.
The alliance, which combines UPS’s physical distribu-
tion network with Optoro’s niche in developing technol-
ogy-driven returns programs, took effect immediately. Its
launch came a little more than two weeks before Atlanta-
based UPS, the nation’s biggest transportation company,
Return volumes supporting holiday and
year-round retail commerce have been climb-
ing, due in part to the surge in online order-
ing. Because consumers can’t touch a product
or see it before buying it, they will frequently
order an item in multiple sizes or colors.
Invariably, they return all but one piece.
These multiple returns have strained supply
chains, many of which were formed to handle
just the forward movement of goods.
“As e-commerce grows, returns will become
an increasingly glaring challenge for retailers,”
Alan Gershenhorn, UPS’s chief commercial
officer, said in a statement.
In partnering with Optoro, UPS may also
be countering, albeit on a smaller scale,
Memphis, Tenn.-based rival FedEx Corp.’s
acquisition two years ago of Genco Supply
Chain Solutions, a contract logistics services
provider with a strong reverse logistics business. UPS has a history of buying companies
that it had initially partnered with. A UPS
spokesman did not comment on the depth of
any future relationship with Optoro.
THE PATH FOR RETURNS
Optoro’s software is designed to determine the
most cost-effective pathway for returned and
excess inventories so retailers can recover at
least a portion of the unused product’s costs.
It relies on online platforms like Amazon.com
Inc. and eBay Inc. to sell returned and surplus
goods. Optoro operates two of its own retail websites, called
Blinq.com and Bulq.com. It works with U.S. retailers and
manufacturers.
Sophisticated analytics tools such as those deployed by
Optoro have fueled the practice of repositioning returned
merchandise for a new forward move as manufacturers,
retailers, and reverse logistics practitioners look to monetize
returned goods that might otherwise be drastically marked
down or simply thrown away. For example, order manage-
ment systems built into the IT ecosystem contain “distrib-
uted order management” (DOM) modules that determine
when a return—the “eaches,” “onesies,” or “twosies” that,
in aggregate, account for most of e-commerce—should stay
within a retailer’s network for resale, or if the resale’s value
is so low as not to justify the cost of shipping.
UPS made the investment through its Strategic Enterprise
Fund, an internal venture capital group.
—M.S.
TVH in the Americas received the Employer of the Year award
from Access, Lift & Handlers (ALH) at its annual conference and
awards ceremony in October. … Green Mountain Technology,
a parcel spend management solutions provider, was honored at
the QVC Logistics Summit with the 2016 Supply Chain Partner of
the Year award. … Invata Intralogistics, an engineering/software
development firm specializing in the design, implementation,
and integration of technologically advanced omnichannel distribution systems, was chosen as a finalist in the Council of Supply
Chain Management Professionals’ 2016 Supply Chain Innovation
Award competition. … Frost & Sullivan has presented its 2016
Technology Leadership award to Rootstock for its cloud ERP solution. … Occupational Health & Safety
magazine has announced the winners of its New
Product of the Year awards. Winners include
Avery Products Corp.’s Avery UltraDuty Labels
with free GHS Wizard software and the free
Avery GHS Wizard safety labeling software. …
Old Dominion Freight Line Inc. has won the
Mastio award, which recognizes excellence in
customer satisfaction and loyalty, for the seventh consecutive year.
… Canadian Occupational Safety magazine has named CHEP, a pallet and container pooling specialist, one of Canada’s safest employers. … CenterPoint Properties has received the Developer of the
Year and Industrial Build-to-Suit Development of the Year awards
from NAIOP Chicago, a commercial real estate and development
association. … Railinc Corp. has won a 2016 NC Tech Award in
the “Industry-Driven Company” category. The NC Tech Awards
celebrate innovation and excellence in the state of North Carolina.
accolades
AVERY
