FedEx Moves to Simplify Returns, Consolidation



From Traffic World

FedEx Moves to Simplify Returns, Consolidation

FedEx Corp. is rolling out two new products with the aim of simplifying the returns process for catalog and online retailers, and improving the consolidation of product components from different locations.

"We've got lots of high-volume returns products out there," said Mark Colombo, FedEx vice president of supply-chain management. But FedEx Consolidated Return Service is new in that it consolidates multiple returns into a single shipment for high-volume goods, he said.

The service, currently in beta test, tackles the problem of "individual pieces trickling in all day with no information on them," he said. It replaces this sporadic flow of returns with a single, consolidated shipment complete with all relevant information on the items being returned.

"We have front-end decision logic set up with the customer," Colombo explained. When a consumer returns a purchase, the system advises on the most convenient location -- usually a FedEx service center -- and decides where the item should be shipped for consolidation. Once the center has accepted the item, a receipt is issued to the consumer and the retailer is notified. The item will be held for up to three days before being consolidated so that the customer "gets one big box," he said.

CRS uses FedEx deferred ground service, which delivers in three to five days, to keep the cost down. Also, it means that the carrier is leveraging its existing network without having to add infrastructure, Colombo said. The pricing structure is an implementation fee plus a flat per-piece transaction fee.

The other new product, FedEx EMerge, cuts costs by bundling transportation services for components that need to be brought together as part of the manufacturing process. For example, a computer company that has keyboards stored in California would be able to combine these items with monitors and system software sourced in Asia to make the final product. Colombo said that FedEx uses its time-definite shipment network to coordinate the movement of each set of components, according to the customer's manufacturing timetable.

The service is aimed particularly at shippers with a need to merge shipments via air transportation. "As soon as we see the purchase order, we start tracking it," he said. Proactive alerts also are built into the system to warn of potential problems. Shippers pay a supplement for the service, he said, and FedEx ensures that all relevant suppliers are hooked up. Implementation is typically complete in four to six weeks, said Colombo


For at least 10 years now, UPS and FEDEX have one-upped each other in many areas. The result has been excellence for both companies, and choices for shippers and consumers. The best thing that ever happened to UPS is FEDEX, and the same goes for the purple guys. Good competition makes us both better....