Reverse logistics operations are particularly prone to hazmat violations because employees aren't always aware they're handling hazardous goods. Here's how to minimize risk to your operation.
Contributing Editor Toby Gooley is a writer and editor specializing in supply chain, logistics, and material handling, and a lecturer at MIT's Center for Transportation & Logistics. She previously was Senior Editor at DC VELOCITY and Editor of DCV's sister publication, CSCMP's Supply Chain Quarterly. Prior to joining AGiLE Business Media in 2007, she spent 20 years at Logistics Management magazine as Managing Editor and Senior Editor covering international trade and transportation. Prior to that she was an export traffic manager for 10 years. She holds a B.A. in Asian Studies from Cornell University.
It's no secret that managing the product returns supply chain is different from handling the traditional outbound, or "forward" logistics, function—a fact that makes "reverse logistics" daunting to many practitioners.
You can add this to the list of challenges: Many returns contain hazardous materials, an inconvenient truth that often goes unnoticed by retailers.
For manufacturers, this is generally not a problem. They know their products' properties and handle returns in compliance with the laws and regulations that govern hazmat transportation, distribution, and storage. Retailers' employees, though, don't always recognize the potential hazards inherent in some consumer products. As a result, they may unknowingly violate federal laws and regulations.
Such ignorance puts companies at risk for penalties, lawsuits, employee injury, and property damage. And the risk isn't going away. Due to retailers' increasingly liberal returns policies, the volume of hazardous consumer goods in the reverse logistics stream is likely to increase, according to experts. Consumers' "voracious appetite for consumer electronics and the shrinking lifespan of these devices" means that hundreds of millions of potentially hazardous products are returned or discarded annually on a worldwide basis, says Joe King, vice president of sales, aftermarket solutions, for third-party logistics service provider ModusLink.
That's why it's more important than ever that reverse logistics operations be fully compliant with hazmat laws and regulations, not only at the warehouse or returns center but also at the retail store level. Costly though that may be, the potential consequences of failing to ensure compliance—possibly life-threatening injuries to employees and customers, lawsuits, enormous fines, and damage to facilities—are far worse.
Here's a look at the extent of this troubling situation, the reasons behind it, and what can be done about it.
For more information ...
Here are some resources for information on reverse logistics for hazardous products.
The Council on Safe Transportation of Hazardous Articles (COSTHA), an industry association that promotes regulatory compliance and safety, has launched a reverse logistics initiative and is working with retailers and government agencies to improve awareness, safe handling, and regulatory compliance. The group's recommendations to the U.S. Department of Transportation are available on its website.
The American Public University, an online educational institution, and its associated American Military University, periodically offer courses on reverse logistics, including one for hazardous materials. For details, click here and here.
The Dangerous Goods Advisory Council advocates for responsible regulation and safe transportation of dangerous goods. Note: The organization's website is being revamped, so some information about training and other services may be temporarily unavailable.
Wait—that's hazardous?
A surprising number of consumer products are regulated as hazardous materials. Some, like household cleaners and solvents, are fairly obvious, says Keith Anderson, senior director of regulatory compliance for Inmar, a third-party logistics company. But the average person may not think of items like health and beauty care products, aerosols, and batteries as hazardous, he says.
Most consumer electronics, including televisions, cameras, mobile handsets, computer monitors, and printers, contain materials that could be considered hazardous, says King. "Televisions, for example, are built with electronic circuit boards, glass, and color cathode ray tubes (CRTs), which often contain hazardous materials such as lead and mercury, as well as lesser-known toxins like cadmium, chromium, antimony, beryllium, and brominated flame retardants," he explains.
Sometimes only parts of consumer goods are subject to regulation, says Robert Jaffin, who teaches an online course in hazmat reverse logistics for the American Public University. Seemingly innocuous components like the toner in printer cartridges or the ink in dry-erase markers become a health and regulatory risk when a commercial entity accepts them as returned goods, he says.
Some items that were not subject to regulation when purchased by the consumer may be hazardous when they are returned, notes Jack Currie, administrator of the Council on Safe Transportation of Hazardous Articles (COSTHA) and president of the regulatory compliance firm Currie Associates. Examples include construction, camping, and lawn and garden equipment powered by gasoline, kerosene, or propane. If these machines have been used, then there will be fuel, oil, and—most dangerous of all—volatile vapor in the fuel tanks, fuel lines, and engines, he says.
Regulated products that were properly packaged, documented, and handled when shipped to a retailer's distribution center often aren't recognized as hazmats when consumers return them. That's partly due to a lack of awareness among store associates, many of whom are working in part-time, seasonal, or high-turnover positions and may not have been fully trained in hazmat regulatory compliance or even overlooked altogether.
As a result, Currie says, it's common for customer service or stockroom associates to toss hazardous (and frequently incompatible) items in any handy cardboard box or returnable tote, and then return them—undeclared, unprotected, and often mislabeled—to a warehouse or distribution center.
The presence of hazardous materials in returned consumer goods poses both legal and safety risks for reverse logistics operations, experts say. However, steps can be taken to minimize those risks and comply with applicable regulations. While not a comprehensive list, the following tips from the experts we consulted for this article can get a company headed in the right direction:
Follow the same hazmat policies and procedures you use in forward logistics in your reverse logistics operations. All of the legal and safety requirements that apply to outbound shipments also apply to returns. That includes documentation, labeling, packaging, transportation, mitigation and safety plans, and training, Anderson says. Make sure the returned-goods areas of facilities have the necessary safety equipment, and that insurance coverage reflects these hazmat-related activities and conditions, Jaffin advises.
Train the right people. Experts recommend that anybody who could be called on to handle returned consumer goods, whether at a customer service desk, in a stockroom, in transportation, or at the warehouse or returns center, receive job-appropriate hazmat safety training.
Teach employees to recognize "red flags." Rather than focus on specific products, think in terms of categories that are likely to contain hazardous materials. Employees should know, for example, that all lighting, aerosols, home electronics, cleaning supplies, pet care products, perfumes and nail polishes, and lawn and garden care products—to name just a few—could contain hazardous materials, and they should handle all such returns accordingly.
Pay attention to packaging. Whether at the customer service desk, in the stockroom, or at the shipping dock, employees need to know they can't randomly toss an assortment of items into any available box, Currie says. Returned consumer goods containing hazardous materials must be properly packaged and secured in accordance with Department of Transportation (DOT) regulations before they're sent to a warehouse or returns center. Jaffin points out that companies are required by law to report improperly packaged hazmat shipments to DOT. "You have accepted considerable responsibility if you receive and open those shipments," he warns.
Segregate incompatible merchandise. Train store and stockroom associates to separate products that could produce a dangerous reaction. Currie cites one case where retail associates shipped a drum containing water-activated fumigants together with bottles of cleaning fluids to a returns center. A single leak would have released toxic gas—with potentially fatal consequences for anyone who opened the drum at the warehouse. And don't package food or consumables with "ORM-D" items—consumer packaged goods classified as hazardous by DOT. Because of the risk of contamination, the consumables may no longer be fit for use and will have to be destroyed.
Be aware that some returned consumer goods must be treated as hazardous waste. Because returned items that are leaking, damaged, or have expired must sometimes be classified as hazardous waste, a hazardous waste program should be in place at the retail location, DC, and reverse logistics operation, recommends Anderson of Inmar. That will require registration as a hazardous waste generator, employee training, a designated hazardous waste storage area, and compliance with a number of specific regulatory requirements.
Send in the experts. Even with training, retail associates who handle customer returns may need additional support to ensure they're complying with all of the applicable regulations. Some consumer product manufacturers help out by providing approved packaging and instructions for returns, while some power equipment makers send out contractors to clean fuel systems in returned merchandise before it's shipped anywhere. Consider sending consultants, third-party logistics specialists, or your own in-house experts to conduct audits and train associates at the store level. Or you may decide to hand returns management over to a third party. But don't assume that all reverse logistics services are handling your materials properly, cautions King of ModusLink. Ask for copies of documented procedures—not just for direct providers, but also for their vendors, he says.
E-commerce activity remains robust, but a growing number of consumers are reintegrating physical stores into their shopping journeys in 2024, emphasizing the need for retailers to focus on omnichannel business strategies. That’s according to an e-commerce study from Ryder System, Inc., released this week.
Ryder surveyed more than 1,300 consumers for its 2024 E-Commerce Consumer Study and found that 61% of consumers shop in-store “because they enjoy the experience,” a 21% increase compared to results from Ryder’s 2023 survey on the same subject. The current survey also found that 35% shop in-store because they don’t want to wait for online orders in the mail (up 4% from last year), and 15% say they shop in-store to avoid package theft (up 8% from last year).
“Retail and e-commerce continue to evolve,” Jeff Wolpov, Ryder’s senior vice president of e-commerce, said in a statement announcing the survey’s findings. “The emergence of e-commerce and growth of omnichannel fulfillment, particularly over the past four years, has altered consumer expectations and behavior dramatically and will continue to do so as time and technology allow.
“This latest study demonstrates that, while consumers maintain a robust
appetite for e-commerce, they are simultaneously embracing in-person shopping, presenting an impetus for merchants to refine their omnichannel strategies.”
Other findings include:
• Apparel and cosmetics shoppers show growing attraction to buying in-store. When purchasing apparel and cosmetics, shoppers are more inclined to make purchases in a physical location than they were last year, according to Ryder. Forty-one percent of shoppers who buy cosmetics said they prefer to do so either in a brand’s physical retail location or a department/convenience store (+9%). As for apparel shoppers, 54% said they prefer to buy clothing in those same brick-and-mortar locations (+9%).
• More customers prefer returning online purchases in physical stores. Fifty-five percent of shoppers (+15%) now say they would rather return online purchases in-store–the first time since early 2020 the preference to Buy Online Return In-Store (BORIS) has outweighed returning via mail, according to the survey. Forty percent of shoppers said they often make additional purchases when picking up or returning online purchases in-store (+2%).
• Consumers are extremely reliant on mobile devices when shopping in-store. This year’s survey reveals that 77% of consumers search for items on their mobile devices while in a store, Ryder said. Sixty-nine percent said they compare prices with items in nearby stores, 58% check availability at other stores, 31% want to learn more about a product, and 17% want to see other items frequently purchased with a product they’re considering.
Ryder said the findings also underscore the importance of investing in technology solutions that allow companies to provide customers with flexible purchasing options.
“Omnichannel strength is not a fad; it is a strategic necessity for e-commerce and retail businesses to stay competitive and achieve sustainable success in 2024 and beyond,” Wolpov also said. “The findings from this year’s study underscore what we know our customers are experiencing, which is the positive impact of integrating supply chain technology solutions across their sales channels, enabling them to provide their customers with flexible, convenient options to personalize their experience and heighten customer satisfaction.”
Transportation industry veteran Anne Reinke will become president & CEO of trade group the Intermodal Association of North America (IANA) at the end of the year, stepping into the position from her previous post leading third party logistics (3PL) trade group the Transportation Intermediaries Association (TIA), both organizations said today.
Meanwhile, TIA today announced that insider Christopher Burroughs would fill Reinke’s shoes as president & CEO. Burroughs has been with TIA for 13 years, most recently as its vice president of Government Affairs for the past six years, during which time he oversaw all legislative and regulatory efforts before Congress and the federal agencies.
Before her four years leading TIA, Reinke spent two years as Deputy Assistant Secretary with the U.S. Department of Transportation and 16 years with CSX Corporation.
Krish Nathan is the Americas CEO for SDI Element Logic, a provider of turnkey automation solutions and sortation systems. Nathan joined SDI Industries in 2000 and honed his project management and engineering expertise in developing and delivering complex material handling solutions. In 2014, he was appointed CEO, and in 2022, he led the search for a strategic partner that could expand SDI’s capabilities. This culminated in the acquisition of SDI by Element Logic, with SDI becoming the Americas branch of the company.
A native of the U.K., Nathan received his bachelor’s degree in manufacturing engineering from Coventry University and has studied executive leadership at Cranfield University.
Q: How would you describe the current state of the supply chain industry?
A: We see the supply chain industry as very dynamic and exciting, both from a growth perspective and from an innovation perspective. The pandemic hangover is still impacting decisions to nearshore, and that has resulted in a spike in business for us in both the USA and Mexico. Adding new technology to our portfolio has been a significant contributor to our continued expansion.
Q: Distributors were making huge tech investments during the pandemic simply to keep up with soaring consumer demand. How have things changed since then?
A: The consumer demand for e-commerce certainly appears to have cooled since the pandemic high, but our clients continue to see steady growth. Growth, combined with low unemployment and high labor costs, continues to make automation a good investment for many companies.
Q: Robotics are still in high demand for material handling applications. What are some of the benefits of these systems?
A: As an organization, we are investing heavily in software that will allow Element Logic to offer solutions for robotic picking that are hardware-agnostic. We have had success deploying unit picking for order fulfillment solutions and unit placing of items onto tray-based sorters.
From a benefit point of view, we’ve seen the consistency of a given operation improve. For example, the placement accuracy of a product onto a tray is far higher from a robotic arm than from a person. In order fulfillment applications, two of the biggest benefits are reliability and hours of operation. The robots don't call in sick, and they are happy to work 22 hours a day!
Q: SDI Element Logic offers a wide range of automated solutions, including automated storage and sortation equipment. What criteria should distributors use to determine what type of system is right for them?
A: There are a significant number of factors to consider when thinking about automation. In my experience, automation pays for itself in three key ways: It saves space, it increases the efficiency of labor, and it improves accuracy. So evaluating which of these will be [most] beneficial and quantifying the associated savings will lead to a “right sized” investment in technology.
Another important factor to consider is product mix. With a small SKU (stock-keeping unit) base, often automation doesn’t make sense. And with a huge SKU base, there will be products that don’t lend themselves to automation.
With any significant investment, you need to partner with an organization that has deep experience with the technologies that are being considered and … in-depth knowledge of the process that is being automated.
Q: How can a goods-to-person system reduce the amount of labor needed to fill orders?
A: In most order picking operations, there is a considerable amount of walking between pick faces to find the SKUs associated with a given order or set of orders. Goods-to-person eliminates the walking and allows the operator to just pick. I have seen studies that [show] that 75% of the time [required] to assemble an order in a manual picking environment is walking or “non-picking” time. So eliminating walking will reduce the amount of labor needed.
The goods-to-person approach also fits perfectly with robotic picking, so even the actual picking aspect of order assembly can be automated in some instances. For these reasons, [automation offers] a significant opportunity to reduce the labor needed to fulfill a customer order.
Q: If you could pick one thing a company should do to improve its distribution center operations, what would it be?
A: Evaluate. Evaluate the opportunities for improving by considering automation. In my experience, the challenge most companies have is recognizing that automation is an alternative. The barrier to entry is far lower than most people think!
Toyota Material Handling and its nationwide network of dealers showcased their commitment to improving their local communities during the company’s annual “Lift the Community Day.” Since 2021, Toyota associates have participated in an annual day-long philanthropic event held near Toyota’s Columbus, Indiana, headquarters. This year, the initiative expanded to include participation from Toyota’s dealers, increasing the impact on communities throughout the U.S. A total of 324 Toyota associates completed 2,300 hours of community service during this year’s event.
The PMMI Foundation, the charitable arm of PMMI, The Association for Packaging and Processing Technologies, awarded nearly $200,000 in scholarships to students pursuing careers in the packaging and processing industry. Each year, the PMMI Foundation provides academic scholarships to students studying packaging, food processing, and engineering to underscore its commitment to the future of the packaging and processing industry.
Truck leasing and fleet management services provider Fleet Advantage hosted its “Kids Around the Corner Foundation” back-to-school backpack drive in July. During the event, company associates assembled 200 backpacks filled with essential school supplies for high school-age students. The backpacks were then delivered to Henderson Behavioral Health’s Youth & Family Services location in Tamarac, Florida.
For the past seven years, third-party logistics service specialist ODW Logistics has provided logistics support for the Pelotonia Ride Weekend, a campaign to raise funds for cancer research at The Ohio State University’s Comprehensive Cancer Center–Arthur G. James Cancer Hospital and Richard J. Solove Research Institute. As in the past, ODW provided inventory management services and transportation for the riders’ bicycles at this year’s event. In all, some 7,000 riders and 3,000 volunteers participated in the ride weekend.
After years in the military, service members and their spouses can find the transition to civilian life difficult. For many, a valuable support on that journey is the U.S. Department of Defense (DOD) SkillBridge program. During their final 180 days of service, participants in the program are connected with companies that provide them with civilian work experience and training. There is no cost to those companies while the service member continues receiving military compensation and benefits.
Both sides benefit from the program. “We’re proud to work with SkillBridge to give back to our military veterans for the bravery and sacrifices they’ve made for all of us,” Troy Pederson, director of training and development at LiftOne, a Hyster-Yale dealer and established SkillBridge employer, said in a release. “In the last year, we’ve helped 10 SkillBridge interns transition from military to civilian life, and the value and positive impact of the program can’t be overstated. At LiftOne, we’ve gained so much from the experience and diverse mix of technical and leadership skills of our SkillBridge candidates.”