DHL continues to develop its e-commerce presence with the acquisition of a reverse logistics provider in the US. On the 10th January DHL announced the purchase of Inmar Supply Chain Solutions for an undisclosed amount. Inmar is a pharmaceutical and retail logistics and marketing technology company based in Ohio that has also developed a retail orientated return logistics capability. It is the latter that DHL has bought, giving the Bonn-based logistics service provider 14 ‘returns centres’ and a workforce of 800 people. This capability seems to cover all of the US.
It is worth noting that the purchase has been made by DHL Supply Chain, the contract logistics business of DHL, rather than that its eCommerce operations. This may be due to it being based in the US where DHL Supply Chain is strong, whilst the eCommerce business is mainly focussed on Europe and Germany in particular. However, this acquisition does highlight the overlap between the internet retailing operations of DHL Supply Chain and DHL eCommerce.
Patrick Kelleher, CEO of DHL Supply Chain North America, explained the acquisition as one which “strengthens our existing capabilities, allowing us to offer our customers a single-source solution for their entire supply chain, including the critical and complex area of returns management”. The logic of this position is that the newly acquired operation will be absorbed into the existing DHL Supply Chain network in the US.
Certainly, reverse logistics is an interesting niche area within internet retailing logistics, not least due to its complexity and its unpopularity amongst retailers. In the past it has been a source of considerable cost for retailers although recently some have attempted to gradually reduce the ability of customers to return purchased items. What its growth prospects are in the medium-term is unclear. In the US, internet retailing has seen low growth rates over the past couple of years although Amazon has seen a continued expansion in its business. The demand for logistics services has seen a clear movement towards cheaper services, with lower levels of service, something that has weakened the larger express carriers in the market.
Source: Ti Insight
Author: Thomas Cullen
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