DC Velocity - September 2018

newsworthy

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The global e-commerce unit of transport and logistics titan Deutsche Post DHL is piloting a program designed to facilitate the returns process for international e-commerce, a segment that is expected to grow as international e-commerce expands.

Charles Brewer, CEO of DHL eCommerce, said the program, which began in July, is being tested in the U.S.-United Kingdom and U.S.-Australia trade lanes. The plan is for the unit to cover all aspects of cross-border returns, including a straight return to the product seller, consolidation of return shipments at the warehouse and distribution center level, disposal of low-value returned items, and the recovery, repair, and repurposing of returns deemed to have a shelf life, Brewer said in an interview.

The program aims to leverage all parts of the DHL enterprise, Brewer said. For example, DHL Supply Chain, one of the world’s largest operators of contract warehouse and DC space, will be involved in the consolidation process, according to Brewer. DHL Express, the unit’s express operations, will be involved in the transportation. DHL Global Forwarding, the company’s freight forwarding division, will be brought in to provide forwarding services as necessary, Brewer said.

The testing will continue through the post-holiday period when returns are heaviest. The program is expected to be fully operational by the end of 2019, he said.

Brewer said that while other providers offer cross-border returns of products from the buyer to the seller, no one to date has come to market with a cross-border returns program to match the scope of development under way in domestic markets. Among the challenges is determining how customs authorities will process e-commerce returns when many countries are already swamped with what World Customs Organization (WCO) Secretary General Kunio Mikuriya earlier this year described as a “tsunami of small packages” that customs administrations, structured to clear business-to-business commerce between established trading partners, were not set up to process.

Brewer said his unit has not experienced problems getting its customers’ shipments cleared through customs in a timely manner. However, he said it is an issue that must be addressed, especially as cross-border e-commerce activity increases. He said there is merit to the concept of free-trade zones dedicated to e-commerce patterned to some extent after the “Foreign Trade Zone” model long in place for manufacturing. Brewer also endorsed an idea advanced by