Award-winning European reverse logistics (C2B) specialist Cycleon aims to profit from thee-commerce boom with increasing volumes for its unique cross-border returns system, a senior
manager told CEP-Research.The fast-growing Dutch-based company, which describes itself as the only dedicated providerof pan-European reverse logistics solutions, managed several million returned items across 27European markets last year. This year it already reached the same volume by September, representing60% growth, chief operating officer Ernst Hoestra said in an interview at the recent Post-Expo inHannover.
Cycleon, set up in 2005 and acquired by German-based Reverse Logistics Group in 2007, offersa complete reverse supply chain for its clients, including physical transportation and ahigh-quality data flow, through its in-house returns management IT system. Partners provide thephysical transportation services. “We provide innovative solutions,” explained Hoestra, a formerTNT and Pitney Bowes executive who joined the company in early 2009.
Cycleon offers a seamless reverse logistics solution, including track-and-trace, thanks toits unique ‘uReturn’ barcode label. Consumers needing to return goods can print this on-demand orit can already be incorporated within the sales documentation. The label is then attached to thereturn parcel which can be taken to a drop-off point, generally the local post office, or pickedup.
Cycleon works with 27 European postal operators for returns, and can thus offer two milliondrop-off points across the continent, but also has a contract with parcel carriers where pick-upsare required. It continues to expand the network with alternative delivery companies. “The postaloperators are very good in their domestic areas. They have the brand name and a reliable service,”Hoestra pointed out.
Returns are transported to a network of national consolidation centres across Europe operatedby NYK Logistics. There the goods are consolidated into larger shipments and then transported byparcel operators back to the original shippers, who are mostly either manufacturers orretailers.
Cycleon has no plans to change this business model and will remain as a logistics managementcompany, using sub-contractors for physical operations. “We do not want to have Cycleon vans,”Hoestra stressed.
The company, whose clients include Canon, Brother, Hewlett-Packard, Nike,, Samsung, Freecomand Medion, focuses on five main market segments: e-commerce (which it terms ‘try and buy’),warranty returns, end-of-life goods, service parts and product recalls.
E-commerce offers significant growth potential, especially for returns of cross-border B2Cparcels, since internet and catalogue retailers need to offer customers simple and efficient returnsolutions, Hoestra pointed out. “In the future, e-commerce and hi-tech will be core growth areas.We will be working more with postal or parcel operators or integrators,” he stated. While about 92%of B2C parcels are domestic rather than international, the cross-border segment is growing rapidly.Cycleon estimates the volume of European cross-border C2B returns at some 15 – 20 million parcels ayear.
In the product recall sector, which requires comprehensive reactions to urgent customerneeds, Cycleon scored a major success in 2007. Within 30 hours, the company set up a productrecall involving the return of overheated batteries. The track-and-trace capability enablescustomers to have a constant overview of where the recalled goods are in the reverse supply chain.
Cycleon has already picked up two renowned awards so far this year. Last month it gained theFrost & Sullivan Niche Player of the Year Award in the European reverse logistics market. Ithad earlier won the World Mail Growth Award.
“Product returns are an opportunity to satisfy your customers beyond the point of sale, andthey are increasingly viewed as a means of increasing customer satisfaction and facilitating repeatpurchases,” Hoestra explained. “Cycleon will therefore continue to focus on providing reverselogistics solutions which improve customer service, drive customer loyalty, and turn the cost ofreturns into value”.
* The Reverse Logistics Group (RLG) also includes CCR Logistics, an automotive logisticscompany, and Vfw, a packaging specialist.
