DHL (CBOE: DHL) wants to ease your buyer’s remorse
Deutsche Post AG (CBOE: DHL)—better known as DHL Group—wants to help make it easier for anyone suffering from a case of buyer’s remorse after an online shopping binge. The express package courier said earlier this month that it had acquired Inmar Supply Chain Solutions, a logistics firm that provides return services for retail e-commerce.
“The strategic acquisition will make DHL Supply Chain the largest provider of reverse logistics solutions in North America,” the company said in a statement. That’s interesting because DHL, while being the biggest express delivery carrier worldwide, currently lags behind rivals FedEx (NYSE: FDX) and UPS (NYSE: UPS) in the Americas.
While the company didn’t disclose financial details about the transaction, the acquisition will grow its North American footprint by bringing in 14 dedicated warehouses and expanding services to include product remarketing, recall management and supply chain performance analytics. Inmar’s network of return drop-off points includes more than 4,000 retail locations in the US that cover more than 90% of the population. That’s a lot of so-called customer touchpoints that could help DHL boost its name recognition and market share.
Online shoppers are increasingly demanding easier returns, and the National Retail Federation says that retailers are facing growing costs to manage and process the $890 billion worth of goods that were sent back last year. More than two-thirds of companies it surveyed said they planned to upgrade capabilities over the next six months, showing just how lucrative the market can be.
DHL’s entry into the space, meanwhile, will make it a direct competitor with UPS, which in 2023 purchased an end-to-end return solution provider called Happy Returns that offers a US-wide network of “Return Bar” locations like The UPS Store where shoppers can drop off items with no packaging or printed labels needed. The move is more evidence of the global shakeup that’s occurring among express couriers as they take steps to strengthen their core businesses amid speculation that US President-elect Donald Trump wants to privatize the United States Postal Service.
Shares of DHL have declined 25.6% over the past year amid what the company said has been “weak momentum of global trade.” UPS shares declined 19.7% over the same period, while FedEx rose 12%. That carrier said last month that it would spin off a specialized freight unit into a new, publicly traded company.
Returns are a headache for online retailers that already face hefty shipping expenses to get their products out to consumers in the first place, but they could be an untapped source of revenue for shippers that can capture additional volume when products end up reversing course. A return ticket usually costs more than a one-way trip, and UPS and DHL both want in on the full ride.
