Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: A Texas company aims to help keep holiday returns out of landfills; a U.S. logistics firm is building a border trade hub in South Texas; a logistics provider snaps up space in the Houston area; and DHL Supply Chain lays off workers in Texas.
Texas company aims to help keep returns out of landfills
A few months ago, one of Heather Hoover-Salomon’s colleagues bought a large piece of furniture online but decided not to keep it.
Hoover-Salomon, CEO of Austin, Texas-based uShip, said she was surprised when the company told her colleague the furniture would probably end up in a landfill rather than on a sales floor or in a warehouse.
“They told my colleague, ‘We’ll come take the furniture back and refund you,’” Hoover-Salomon told FreightWaves. “My colleague asked, ‘What happens with this? Do you guys resell it?’ They’re like, ‘Actually we’re just going to scratch it and it’s going to go to a landfill.’ I was like what?”
Consumers returned more than $816 billion worth of retail merchandise purchased in 2022, according to a report by the National Retail Federation and Appriss Retail. Optoro, a firm specializing in sustainable returns and resales, estimates that returned inventory creates about 5.8 billion pounds of landfill waste each year and the shipping of returns emits 16 million metric tons of carbon dioxide.
Hoover-Salomon said she was interested in learning more about returns and how retailers’ bottom lines are affected after the incident with her colleague, as well as after attending a Gartner Inc. symposium earlier this year.
She explained that uShip helps people and businesses haul items through use of its online marketplace that connects shippers with customer-reviewed carriers.
“One of the big buzzwords at the Gartner symposium was returns and it was mind-blowing how big it is in the industry and how we have not solved this problem, especially for items that are in the large and bulky space,” Hoover-Salomon said.
Large and bulky items can be furniture, home goods, appliances and hardware.
The Gartner symposium propelled Hoover-Salomon and uShip to work with WBR Insights to examine how returns affect companies and what could be done to help the issue. Uship recently published its findings in a report titled “Mastering Oversized Returns: Logistics Executives Weigh In On Their Top Challenges.”
Many businesses said they only recover a small percentage of the original sales price of oversized item returns, if any at all, because of the cost of reverse logistics and struggling to book reliable return shipping solution providers.
Based on insights from 100 business leaders that took part in the uShip research report:
- 91% said the costs of reverse logistics for oversized items are at least a somewhat significant problem.
- 87% struggle to find and book reliable return shipping solutions for big and bulky goods when they need them.
- 83% are not satisfied with their ability to track damage rates.
“What I took away from the research was that 87% of the respondents are struggling in some way with returns. They’re not pleased with their reverse logistics or returns process for those large and bulky goods,” Hoover-Salomon said. “Large and bulky goods, once they’re out of the box, predominantly, they don’t get put back in a box.”
More than 50% of retailers said they can’t resell up to one-third of the oversized items that are returned to them due to damage, loss or missing parts.
“Financially speaking, people or businesses are losing a lot of money and are not able to recoup that because the value of the good post-return is severely diminished,” Hoover-Salomon said.
Key suggestions from the research report concluded that investing in AI and digitalization technology could help companies recoup money from returns. Other suggestions include improving packaging practices, specifically by using reusable packaging and refining onsite product assessments, and investing in a delivery and logistics solution that emphasizes transparency.
“Where we can really kind of fit in is in making sure that we’re targeting customers who have these more complex or larger goods that they’re trying to get returns on,” Hoover-Salomon said. “Because our service can be point to point and highly customizable in terms of packaging — getting it out of the home and then back to the retailer’s warehouse or if they are consigning it, then it can go to a consignment center, but ensuring that the goods are not further damaged, so that they have a higher probability of getting a higher return value. Maybe it’s not full value, but better than some of the values we hear about — a lot of them were less than 50% of the original value of the item.”
US logistics firm to build border trade hub in South Texas
The CiL Group recently began construction of the Nearshoring Industrial Park in McAllen, Texas.
The 117-acre park is intended to attract companies that are shifting manufacturing and production operations from abroad to Mexico and Rio Grande Valley, according to Joaquin Spamer, CEO of the CiL Group.
“The McAllen Nearshoring Industrial Park brings along a crucial concept: nearshoring,” Spamer said in the Rio Grande Guardian, “one that perfectly fits with our goal of bringing production and manufacturing closer to home.”
The Nearshoring Industrial Park will total 1.5 million square feet once completed. The park is built-to-suit property, with lot sizes ranging from 3 to 30 acres.
Founded in 1992, McAllen-based CiL Group offers global door-to-door logistics services, including import and export services, through land, rail and ocean transport, as well as warehousing and distribution handling.
Logistics provider snaps up space in Houston area
Tigerhawk Logistics has inked a lease for 135,285 square feet of space at the Portside Logistics Center in Baytown, Texas.
Portside Logistics Center is a 1 million-square-foot industrial development from Stream Realty about 26 miles southeast of Houston. The facility offers warehousing, cross-dock capabilities and truck/trailer parking with access to Port Houston’s Barbour’s Cut and Bayport container terminals.
Pasadena, Texas-based Tigerhawk Logistics is a drayage and container logistics operator. The company has 21 power units and 13 drivers, according to the Federal Motor Carrier Safety Administration.
“As a logistics company working with a variety of clients, we had certain space and design-related needs that Portside Logistics Center met perfectly,” Ruben Sanchez, co-founder and COO of Tigerhawk Logistics, said in a news release.
DHL Supply Chain lays off workers in Texas
DHL Supply Chain is closing two Houston-area operations and laying off 60 employees, according to a WARN notice filed on Dec. 1 in Texas.
The closure and layoffs are at DHL facilities in Missouri City and Sugar Land.
DHL officials did not provide a reason for the two facilities’ closure. The operations will be permanently shut down by the end of January.
DHL Supply Chain is a division of Germany-based Deutsche Post DHL Group.
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