UPS forms partnership with returns logistic company

By

Susan Spies

Published
Dec 21, 2016

Not a moment too soon, just before the Big Return in retail after Christmas, shipping heavyweight UPS has tapped the talents of U.S. technology company Optoro to help it better manage the onslaught of holiday returned packages.

Founded in 2010 and headquartered in Washington D.C. Optoro claims to produce the world's leading reverse logistics platform. The idea is that returns pose a whole separate logistics challenge that includes issues like recovery value. The Optoro platform determines the best path for each item, maximizing recovery and reducing environmental waste.

It also uses an innovative approach to the traditional liquidations models, linking to external marketplaces to efficiently sell returned and excess goods across major digital platforms that includes Amazon, eBay and Optoro's own selling platforms.

While shipping companies like UPS seem to be in the right place at the right time in this e-commerce era, the reality is much tougher. The rise in home deliveries, costly for logistics companies, has cut into their profit margins and stagnated their U.S. domestic business, according to a recent report. So UPS’s partnering with Optoro is likely an effort to reduce costs and too, help its retailer customers cope with the era of (Amazon-induced) free shipping.

“We’re here to help retailers and manufacturers simplify returns management and unlock the full value from their reverse logistics programs,” said Alan Gershenhorn, UPS Chief Commercial Officer. “Optoro is an excellent complement to UPS’s existing portfolio of retail services that optimize the flow of goods, information and funds.”

“Retailers are facing a growing number of challenges, with the rise of customer returns being one of the most prominent, totaling over $260B in value annually in the U.S.” said Tobin Moore, co-founder and CEO of Optoro. “We’re excited to partner with UPS to couple our innovative technology platform with their world-class logistics services to offer the retail industry a best in class solution for this problem.”

UPS used the announcement to draw attention to its National Returns Day and post-holiday returns week. The company has designated Thursday, January 5 as its busiest, when it expects to receive more than 1.3 million packages for returns to retailers and manufacturers. In the first full week alone, UPS estimates more than 5.8 million packages will be returned. Last year, shoppers returned more than 1 million packages on UPS’s National Returns Day and more than 5 million packages during the company’s peak returns week.

UPS is also eager to use its new partnership, the terms of which were not disclosed, as proof of its environmental credentials. Indeed, Optoro strives to develop systems that minimize environmental impact and is the recipient of the winner of World Economic Forum’s Circular Economy Award as well as the U.S. Chamber of Commerce’s 2016 Corporate Citizenship Award for Best Environmental Stewardship.