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5 Potential Pitfalls in International Reverse Logistics

The successful reverse logistics process that works domestically may not translate if you try to take it international. When you cross borders, especially international borders, there are a host of issues and risks, which you need to consider and mitigate.

Imagine the scenario: You have done a fantastic job servicing the domestic reverse logistics needs of your multinational client. Your process is bullet proof, your service levels exceed benchmarks, and you are in the black. Impressed, your client asks you to take on their EU business. All you need to do is port over your process flows… right? Not so fast.

One of the first issues that you need to understand are the laws within the involved country (or countries) as well as any rules and regulations, such as taxes and tariffs, that focus specifically on border crossing of defective or non-working electronics. Not taking the time to understand the legal system could result in fines and/or costly delays.

Costs are another issue. Labor, transport, and disposal costs, for example, vary vastly from country to country. Accounting for even minor cost fluctuations is essential, and not only for budgeting and cost containment. Shifting cost can upend even the tightest client relationships.

Product classifications can vary from country to country. Research how the client country classifies product types. When it comes to defective or nonworking electronics, one country's commodity can be another country's contraband. Furthermore, misunderstandings can be expensive. For example, understanding product classifications such as tested-defected or non-tested-defective can mean the difference in being able to resell or recycle in one country to another.

You must also consider service levels. What are the labor norms? Are they drastically different than those in the United States? How will the labor norms impact the service level agreements you have in place? More than likely you will find that what works well here in the United States will need to be amended elsewhere.

Finally, one cannot begin working in another country without taking the time to learn about and understand the culture. Although it may be tempting, don't try and change the culture. Real success comes when you work with/within the culture.

Tell us about your experiences with cross-border reverse logistics. We want to hear about your biggest nightmares and best strategies.

4 comments on “5 Potential Pitfalls in International Reverse Logistics

  1. elctrnx_lyf
    July 14, 2013

    The logistics is a very critical part of any OEM to make sure all the product shipments are as per the local country regulations. These ragulations are very important because if the companies fail to adhere, the company executives can be trailed for crime also.

  2. t.alex
    July 14, 2013

    We once planned to request for the shipment from the factory on specific dates. However we could not make it as the factory was shut down for a long holiday period. So remember to check out the country holidays 🙂

  3. SunitaT
    July 20, 2013

    When it comes to cross country market transactions, one needs to be able to face bottlenecks. As said, damaged goods are transported illegally, more so where security and man power is not easily available. For this the company has to bear additional funds-giving to make sure their products reach the desired market safely. Moreover, the products must be tuned to perfection.

  4. Anand
    July 22, 2013

    If you are not shipping something illegal, you won't be tried in a court. Market heads are shielded from courts because of the interest of the government in the profits of the company. Moreover, as long as businesses run with information, they won't be facing setbacks. In plain words, if something you are shipping into a market, whether legally or illegally, actually benefits the market, then the local
    government supports the company and gets things done smoothly.

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