Panalpina sees reverse logistics as a strategic area for growThand to complement its business off ering in the technology sector, it has entered into a strategic alliance wiThHong Kong-based company Spread Logistics. Under this alliance the two companies now pick up faulty consumer electronics at origin, do failure analyses and – if need be – return them to the original manufacturer in Mainland China. The customer gains visibility of all return materials in the supply chain and can make data-based decisions on the reuse, repair, disposal or even redesign of its products.
Any smart device produced in China that has a manufacturing defect or requires major repair work will need to be returned to China if it is still under warranty. “However, returns to China are difficult,” says Mike Wilson, global head of logistics at Panalpina. “The faulty products need to be sorted by fault code and correctly repackaged in their original form to meet Chinese customs demands before they can be sent back to their original manufacturer.”
Because of these exacting Chinese customs demands, Hong Kong’s Spread Logistics is one of only a few companies that can manage the return of electronic consumer goods to Mainland China. A large proportion of smart devices that are re-imported to China for repair go through their hands.
“By partnering wiThSpread Logistics, we have enabled the circular supply chain for our technology customers. We collect and pass on the data that is needed to decide if a product can be repaired close to the consumer market or if it needs to be shipped back to China for bigger repair work or even disposal,” Wilson explains.
The process is called Return Materials Authorisation (RMA) and one of two areas where Panalpina and Spread Logistics have committed to working closely together. To facilitate this process, Panalpina is setting up four regional consolidation points. The first in Dubai is already operational; the others will follow in the coming months.
The points act as return centres for consumer electronic goods, undertaking first-level failure analysis (screening) to determine their condition and clarifying problems, if any are found. If Panalpina is able to easily repair or refurbish broken equipment, it will do so and put products back into the supply chain as quickly as possible so that they can be reused.
“Screening in the region means products can potentially be returned to available stock faster,” says Spencer Edmonds, global head of Logistics operations at Panalpina. “This improves the cash fl ow of our customers.”
Products that cannot immediately be reintroduced into the supply chain are forwarded to Spread Logistics, which has the ability to do second-level analysis (checking at component level) and repackaging. Correct repackaging is crucial to meet Chinese customs demands before sending products back to their original manufacturer.
Local customs regulations demand that any product returned to Chinese manufacturers must come back in its original form – in other words, complete wiThoriginal box, documentation and accessories. “Since many customers don’t return products this way, Chinese customs can be tricky to maneuver,” says Edmonds. “Our partner Spread Logistics is adept in dealing wiThreverse fl ows, receiving returned products and making sure they are repackaged properly to reenter the country.”
