Near shoring gains traction with reverse logistics specialists

“The benefits of “quality output,” a 24/7 working model, and low cost production can commonly be found in supply chains reliant on a near-shoring model. Now these same tactics are showing positive results for the reverse end of logistics,” said a prominent industry specialist.

According to Gary Cullen, chief operating officer of 4PRL LLC, a growing trend of being “cheaper and nearer” seems to fit well within the cost sensitive and eco conscious reverse logistics chain of events. 4PRL LLC, is the reverse logistics company of The Georgetowne Group – a supply chain management consultancy.

“Much efficiency can be found in near-sourcing third party service providers (3PSP) who specialize in the services of redeployment, repair, reuse, recycling, reclamation and resale,” he said. “This appears to be a successful business model in today’s fuel conscious and green minded environment.”

Cullen said 3PSPs are typically targeted to be near-shore to the originator of equipment being returned, reused or recycled and this new model has many additional benefits.

“A closer country allows for use of cheaper modes of transportation as well as less overall time and movement,” he said. “The goal for near-sourced reverse logistics operations is to reduce movement and handling, and being able to find service providers in the country with the lowest wage and processing costs. Combine this with the improving of your environmental image and you have a ‘win-win’ for your clients, consumers and shareholders. Also, in a near-shore model, language barriers are usually a non-issue and cross border relationships are typically improved between countries.”

Cullen agreed with industry analysts who said risk mitigation is compelling reason for adopting a “near-sourcing” model”>The benefits of “quality output,” a 24/7 working model, and low cost production can commonly be found in supply chains reliant on a near-shoring model. Now these same tactics are showing positive results for the reverse end of logistics,” said a prominent industry specialist.

According to Gary Cullen, chief operating officer of 4PRL LLC, a growing trend of being “cheaper and nearer” seems to fit well within the cost sensitive and eco conscious reverse logistics chain of events. 4PRL LLC, is the reverse logistics company of The Georgetowne Group – a supply chain management consultancy.

“Much efficiency can be found in near-sourcing third party service providers (3PSP) who specialize in the services of redeployment, repair, reuse, recycling, reclamation and resale,” he said. “This appears to be a successful business model in today’s fuel conscious and green minded environment.”

Cullen said 3PSPs are typically targeted to be near-shore to the originator of equipment being returned, reused or recycled and this new model has many additional benefits.

“A closer country allows for use of cheaper modes of transportation as well as less overall time and movement,” he said. “The goal for near-sourced reverse logistics operations is to reduce movement and handling, and being able to find service providers in the country with the lowest wage and processing costs. Combine this with the improving of your environmental image and you have a ‘win-win’ for your clients, consumers and shareholders. Also, in a near-shore model, language barriers are usually a non-issue and cross border relationships are typically improved between countries.”

Cullen agreed with industry analysts who said risk mitigation is compelling reason for adopting a “near-sourcing” model.

“Neighboring countries have a good feel for what’s happening around them politically, legally, economically, financially and socially,” he said. “By understanding these factors before conducting business one can limit organizational exposure and build a stronger cross-border business-to-business relationship.”

Furthermore, said Cullen, third party service providers can protect shippers from “volume unpredictability” and an idle and unproductive labor force.

“These near-shore service providers receive their workload from several clients and the total volume received is typically what dictates the amount of labor and facility space required,” he said. “This seems to be a best-cost solution for managing and moving low revenue and no revenue used surplus and obsolete

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