according to data from real estate and logistics firm
JLL. Just three markets—Boston, Pittsburgh, and Portland,
Ore.—had vacancy rates at 10 percent or higher.
GETTING TO “BEST IN CLASS”
Robert Silverman, JLL’s executive vice president, supply
chain and logistics solutions, said he doesn’t think an
increase in e-returns will translate to a dramatic rise in
warehouse and DC demand. He said companies are gradually “baking in” reverse flows through their internal systems
and processes, such as reconfiguring one or two network
facilities to effectively carve out separate paths for e-returns.
Egan of CBRE said integrating elevated returns flow
into an existing facility might not be workable, because
the facility is designed to optimize the traditional forward
move. That leaves a company to either build out its own
reverse network by buying additional space or adding on to
an existing facility, or farm out the services to a 3PL, which
may eventually need its own additional space. Either way, it
spells more demand for the industrial property sector.
Unlike the forward move, returns don’t have to be sent
back to the location from whence they were shipped. The
nonlinear nature of returns may create demand in some
markets that have more available supply. That, in turn, will
absorb still more capacity, Egan reckons.
The complexity of managing e-returns and the challenge
of scaling up operations for peak returns periods could be
good reasons to farm out the work. Genco, for example,
has systems and technology designed just to support reverse
moves, even though forward logistics accounts for more
of its business than reverse. It also has several “all-in-one”
centers that handle forward and reverse moves, but can
support all types of reverse disposal as well as “re-com-
merce,” under which Genco repositions qualified returns
into the forward logistics flow.
However companies go about it, it seems clear that for
those who have truly high stakes in retail, a robust physical
network, along with strong inventory control technology,
will likely be the price of admission to compete in the big
leagues. “If you don’t have a best-in-class returns policy,
you’re uncompetitive,” said Egan.
—Mark Solomon
16 DC VELOCITY MAY 2016
www.dcvelocity.com
PT. Yusen Logistics Indonesia has launched its own air
import operation at Halim Perdanakusuma International
Airport in Jakarta, Indonesia. The company is now able to
offer end-to-end import services, from arrival at the air-
port to delivery to the customer. … Dachser has created
a new central organizational unit, Corporate Solutions,
Research and Development, in order to advance its
business with global industry-specific logistics solutions
and bundle its research and development activities. …
American Airlines Cargo has improved facilities in San
Juan, Puerto Rico, and Dallas/Forth Worth in its efforts
to invest in its global network to support increasing
demand for both pharmaceutical and perishable goods
across the world. … Hy-Tek Material Handling Inc. has
acquired Gems Conveyor Installation Inc. and Applied
Handling Equipment Co. … Penske Truck Rental has
launched a new website, www.pensketruckrental.com,
with expanded mobile capabilities, enabling businesses
to reserve trucks and customers to purchase supplies
using their smartphones. … A. Duie Pyle has announced
steady growth in its guaranteed expedited shipping
solution, Pyle Priority Service. This year, Pyle has shipped
close to 15,000 shipments with Pyle Priority, a year-
over-year increase of more than 30 percent. … FedEx
Trade Networks, the international freight forwarding
arm of FedEx Corp., has relaunched Bongo International
as “FedEx CrossBorder.” … Flirtey, an independent
drone delivery company, has completed the first fully
autonomous, FAA-approved urban drone delivery in the
United States. … This year, Ametek Prestolite Power
celebrates its 100th year of manufacturing battery char-
gers for the material handling industry. … Commercial
real estate services firm Cushman & Wakefield has
released its first-quarter 2016 market research for the
New Jersey industrial market, reporting robust leasing
activity, falling vacancies, and rising asking rents in a
market where competition for quality industrial space
remains strong. … Hyster-Yale Group Inc. has acquired
Speedshield Technology Pty. Ltd.’s telematics installa-
tion and distribution businesses in the United States and
the United Kingdom. … Descartes Systems Group has
announced record attendance and partner participation
at Evolution 2016, the company’s 11th annual Global
User and Partner Conference.
short takes
oversight
In the news story “Kion Group, Egemin subsidiary acquire
Retrotech Inc.,” which appeared in DC VELOCITY’s March
2016 issue, we incorrectly stated that Retrotech Inc. would
become Kion Group’s eighth brand. Retrotech is held by
Egemin and is not a separate Kion Group brand.
