Developing a safe, responsible, and effective system for handling consumer electronics returns isn't just good for the planet. It can also be very, very good for your business.
Peter Bradley is an award-winning career journalist with more than three decades of experience in both newspapers and national business magazines. His credentials include seven years as the transportation and supply chain editor at Purchasing Magazine and six years as the chief editor of Logistics Management.
The images remain troubling long after they've faded from the screen. Vast quantities of toxic electronic waste dumped around villages and cities in countries like Nigeria or China. Workers burning wires in an attempt to recover copper or aluminum for resale, releasing a hazardous stew of chemicals into the air. Young children playing among the scattered, and often carcinogenic, materials.
That's not a vision of a dystopian future, but an everyday reality. Our love affair with electronics—and desire to have the next new thing—has created a surging tide of e-waste. Although some is disposed of responsibly, much of that waste still ends up in local landfills or incinerators, while quite a bit gets shipped overseas by unscrupulous recyclers for "dismantling under horrific conditions," according to the Electronics TakeBack Coalition (ETBC).
The volumes are staggering. In 2010, the latest year for which numbers were available, U.S. consumers and businesses disposed of 2.4 million tons of electronics—some 384 million units, according to statistics compiled by ETBC. And indications are the numbers will only increase.
So it's probably no surprise that manufacturers of consumer electronics as well as the resellers and retailers of those goods face increasing scrutiny from regulators, lawmakers, and the public over just how discarded goods are handled. Dale Rogers, a professor of supply chain management and marketing sciences at Rutgers University who has long studied reverse logistics and sustainability, reports that at least 27 states now have laws governing e-waste.
The challenges of reverse logistics are hardly news to the industry, however. Major electronics OEMs and their retailers have long understood the need for a safe, responsible, and effective system for managing returns. Such programs are important from both a regulatory compliance and social responsibility standpoint, of course. Beyond that, careful and aggressive management of the process enables companies to turn trash into cash, reselling some products and recovering valuable parts and materials from others—essentially, capturing value rather than producing waste.
"Years ago, manufacturers did not look at returns management from a recovery standpoint, but as a cost of doing business," says Joseph King, a vice president at ModusLink Corp., an international third-party logistics and supply chain services company. "We've seen a much greater focus on trying to minimize losses, improve recovery, and ensure that practices are environmentally responsible."
A JOB FOR PROFESSIONALS
But how do you go about setting up a safe, responsible, and effective system for recycling and managing e-waste? Rogers says it begins with the people. "The first thing you need to do is spend time with someone who understands this stuff and where it's going," he says. It's also important to understand that with recycling and sustainability initiatives, you're in in for the long haul, Rogers adds. "This is not just a short-term problem. You need to do this well," he says.
Rogers recommends that any company that must deal with electronics returns devote at least one employee to the problem. He suggests choosing an engineer who is familiar with design and understands the complex mix of components, chemicals, and minerals in today's electronics.
Whether they maintain in-house expertise or not, many companies opt to partner with a qualified expert. There are a number of third-party logistics service providers (3PLs) that specialize in returns management. These 3PLs not only will handle tasks like refurbishment, disassembly, recycling, and disposal on behalf of their clients, but they'll do it in a way that complies with the customer's own business rules, says Mike Baker, vice president of business development for Genco ATC, a third-party logistics company that specializes in product life cycle logistics.
Providers say an important part of their job is establishing systems that carefully track goods from the shipping facility through final disposal. That's partly to ensure that customers receive the full benefit of the resale of any goods or components, and partly to ensure that all materials are handled responsibly throughout the reverse supply chain. "We track every device by serial number and a customer compliance code," says King of ModusLink.
Chad Burke, director of supply chain excellence for Ryder System Inc., also underlines the importance of maintaining a strict chain of custody for every product and commodity from receipt to ultimate disposition. That includes requiring certificates of destruction for goods sent into the waste stream, down to the serial number level.
BACK ON THE MARKET
Whether a shipper opts for the DIY approach or contracts with an expert, the recovery and disposal process will follow the same basic pattern. When goods come into the facility, says King, the initial step is "triage," that is, determining the best way to handle each product.
Burke warns that this involves more than an at-a-glance assessment of the incoming items. Ryder, for example, goes through an extensive testing and disposition process for products returned to facilities it manages for clients, including a functional and cosmetic evaluation to determine whether a product is worth refurbishment or repair. As part of that process, it compares the estimated resale value with the cost of getting it to market.
Burke notes that as much as 50 to 75 percent of the electronics goods returned to manufacturers have nothing functionally wrong with them, and that as much as 70 to 80 percent of their value can be recovered in resale. But to recapture that value, you have to act quickly, he warns. Given the short life cycle of many of today's consumer electronics products, getting refurbished goods back on the market right away is imperative.
Many of the products that come back through the reverse logistics chain can be resold nearly as is, or with some refurbishment. But there's one step that can't be skipped: The party responsible for refurbishment must scrub every last bit of the previous owner's data from the device before it is returned to the market.
"One of the programs we're seeing explode is trade-ins for handsets, tabletop computers, and laptops," King says. "The big thing there is data wiping. There's a lot of liability around that."
PARTS HARVESTING
Products that don't make the cut then go through an extensive process to recover as much value as possible from components—circuit boards, power supply, plastics, ferrous metals, copper or aluminum, chemicals, and minerals—what King calls "parts harvesting."
This isn't just a matter of squeezing every last penny from returns. It's also about conserving minerals that are crucial to electronics manufacturing but are becoming increasingly difficult to obtain. For example, China has imposed export restrictions on rare earths used in high-tech products. While a significant proportion of electronics manufacturing takes place in China, mitigating the issue to some degree, manufacturers are nonetheless concerned about access to that important source of supply.
Further limiting the availability of materials needed for manufacturing is the recent crackdown on the use of "conflict minerals"—minerals that come from areas associated with conflict or human rights abuses, such as the Congo. In August, the Securities and Exchange Commission issued a rule requiring companies to disclose the use of conflict minerals that originated in the Democratic Republic of the Congo or adjoining countries. "Electronics companies are going to have to show where their minerals come from and prove that nobody was harmed in mining them," Rogers says.
Both of these developments have created powerful incentives to recover as many minerals as possible from existing products. "One of the big issues in reverse logistics is the potential shortage of rare earth," says Alan Amling, vice president of marketing, global logistics, and distribution for UPS Supply Chain Solutions. "This is where over the long term, we have to look at the concept of bringing sustainability and conservation of resources into reverse logistics. How do we tie reverse logistics back into the manufacturing process? How can we connect reclaimed materials like rare earths with manufacturing at the point where they are needed?"
TAKE CHARGE OF YOUR WASTE
Once a company has harvested everything of value from the returned product, there may still be waste to recycle or dispose of. Although plenty of contractors offer recycling and disposal service for electronic products, just picking a provider at random is a lot like playing Russian roulette. "Ownership of the waste is important because manufacturers can be held liable for improper disposal," says Amling. That means they must make it their business to know just how those recyclers handle products.
Fortunately, at least two programs for certifying electronics recyclers can help point the way.
Best known is the Responsible Recycling Practices, or R2 program. The R2 certification is a program offered by R2 Solutions, a nonprofit company that promotes environmentally responsible practices in the electronics recycling industry. To date, more that 200 facilities around the world have attained the certification.
The second is the e-Stewards Standards, created by the Basel Action Network, a Washington state-based nonprofit that focuses on environmental and sustainability issues.
The Environmental Protection Agency (EPA) has endorsed both initiatives, noting on its website that "these programs are based on strong environmental standards which maximize reuse and recycling, minimize exposure to human health or the environment, ensure safe management of materials by downstream handlers, and require destruction of all data on used electronics." Both certifications require companies to be audited by independent third parties.
It's important to note that when you go to contract for recycling services, you need not steer clear of a third-party service provider just because it isn't certified. While 3PLs may not be certified themselves, many make it a point to work with certified recycling companies on behalf of their customers.
Editor's note: Senior Editor Toby Gooley contributed to this report.
Supply chain planning (SCP) leaders working on transformation efforts are focused on two major high-impact technology trends, including composite AI and supply chain data governance, according to a study from Gartner, Inc.
"SCP leaders are in the process of developing transformation roadmaps that will prioritize delivering on advanced decision intelligence and automated decision making," Eva Dawkins, Director Analyst in Gartner’s Supply Chain practice, said in a release. "Composite AI, which is the combined application of different AI techniques to improve learning efficiency, will drive the optimization and automation of many planning activities at scale, while supply chain data governance is the foundational key for digital transformation.”
Their pursuit of those roadmaps is often complicated by frequent disruptions and the rapid pace of technological innovation. But Gartner says those leaders can accelerate the realized value of technology investments by facilitating a shift from IT-led to business-led digital leadership, with SCP leaders taking ownership of multidisciplinary teams to advance business operations, channels and products.
“A sound data governance strategy supports advanced technologies, such as composite AI, while also facilitating collaboration throughout the supply chain technology ecosystem,” said Dawkins. “Without attention to data governance, SCP leaders will likely struggle to achieve their expected ROI on key technology investments.”
The British logistics robot vendor Dexory this week said it has raised $80 million in venture funding to support an expansion of its artificial intelligence (AI) powered features, grow its global team, and accelerate the deployment of its autonomous robots.
A “significant focus” continues to be on expanding across the U.S. market, where Dexory is live with customers in seven states and last month opened a U.S. headquarters in Nashville. The Series B will also enhance development and production facilities at its UK headquarters, the firm said.
The “series B” funding round was led by DTCP, with participation from Latitude Ventures, Wave-X and Bootstrap Europe, along with existing investors Atomico, Lakestar, Capnamic, and several angels from the logistics industry. With the close of the round, Dexory has now raised $120 million over the past three years.
Dexory says its product, DexoryView, provides real-time visibility across warehouses of any size through its autonomous mobile robots and AI. The rolling bots use sensor and image data and continuous data collection to perform rapid warehouse scans and create digital twins of warehouse spaces, allowing for optimized performance and future scenario simulations.
Originally announced in September, the move will allow Deutsche Bahn to “fully focus on restructuring the rail infrastructure in Germany and providing climate-friendly passenger and freight transport operations in Germany and Europe,” Werner Gatzer, Chairman of the DB Supervisory Board, said in a release.
For its purchase price, DSV gains an organization with around 72,700 employees at over 1,850 locations. The new owner says it plans to investment around one billion euros in coming years to promote additional growth in German operations. Together, DSV and Schenker will have a combined workforce of approximately 147,000 employees in more than 90 countries, earning pro forma revenue of approximately $43.3 billion (based on 2023 numbers), DSV said.
After removing that unit, Deutsche Bahn retains its core business called the “Systemverbund Bahn,” which includes passenger transport activities in Germany, rail freight activities, operational service units, and railroad infrastructure companies. The DB Group, headquartered in Berlin, employs around 340,000 people.
“We have set clear goals to structurally modernize Deutsche Bahn in the areas of infrastructure, operations and profitability and focus on the core business. The proceeds from the sale will significantly reduce DB’s debt and thus make an important contribution to the financial stability of the DB Group. At the same time, DB Schenker will gain a strong strategic owner in DSV,” Deutsche Bahn CEO Richard Lutz said in a release.
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.
Serious inland flooding and widespread power outages are likely to sweep across Florida and other Southeast states in coming days with the arrival of Hurricane Helene, which is now predicted to make landfall Thursday evening along Florida’s northwest coast as a major hurricane, according to the National Oceanic and Atmospheric Administration (NOAA).
While the most catastrophic landfall impact is expected in the sparsely-population Big Bend area of Florida, it’s not only sea-front cities that are at risk. Since Helene is an “unusually large storm,” its flooding, rainfall, and high winds won’t be limited only to the Gulf Coast, but are expected to travel hundreds of miles inland, the weather service said. Heavy rainfall is expected to begin in the region even before the storm comes ashore, and the wet conditions will continue to move northward into the southern Appalachians region through Friday, dumping storm total rainfall amounts of up to 18 inches. Specifically, the major flood risk includes the urban areas around Tallahassee, metro Atlanta, and western North Carolina.
In addition to its human toll, the storm could exert serious business impacts, according to the supply chain mapping and monitoring firm Resilinc. Those will be largely triggered by significant flooding, which could halt oil operations, force mandatory evacuations, restrict ports, and disrupt air traffic.
While the storm’s track is currently forecast to miss the critical ports of Miami and New Orleans, it could still hurt operations throughout the Southeast agricultural belt, which produces products like soybeans, cotton, peanuts, corn, and tobacco, according to Everstream Analytics.
That widespread footprint could also hinder supply chain and logistics flows along stretches of interstate highways I-10 and I-75 and on regional rail lines operated by Norfolk Southern and CSX. And Hurricane Helene could also likely impact business operations by unleashing power outages, deep flooding, and wind damage in northern Florida portions of Georgia, Everstream Analytics said.
Before the storm had even touched Florida soil, recovery efforts were already being launched by humanitarian aid group the American Logistics Aid Network (ALAN). In a statement on Wednesday, the group said it is urging residents in the storm's path across the Southeast to heed evacuation notices and safety advisories, and reminding members of the logistics community that their post-storm help could be needed soon. The group will continue to update its Disaster Micro-Site with Hurricane Helene resources and with requests for donated logistics assistance, most of which will start arriving within 24 to 72 hours after the storm’s initial landfall, ALAN said.