Newgistics buy enhances shipping ability

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Newgistics Inc. has acquired Cor­nerstone Shipping Services in a bid to extend its shipping and shipping logis­tics capabilities.

Newgistics uses a logistics- and data-based method to manage returns pro­cesses for online and catalog retailers including Neiman Marcus and J. Crew. Its SmartLabel product features a barcode that holds customer data collected at the point-of-sale, allowing the shipper to inte­grate sales, shipping and return data into its CRM system. Cornerstone provides small package shipping services.

“[The acquisition] makes us the first and only postal-based intelligent logistics [firm] that does both delivery and return that is aimed at serving the direct retailing and marketing community,” Bill Razzouk, CEO of Newgistics, said. “The shipping side — the delivery side — of this business is about 12 times as large as the return side of this business, and that's a huge opportunity for us.”

SmartLabel also plays into loyalty pro­grams and CRM. When Newgistics picks up returns packages, the company can scan the barcode and proactively notify the customer that their returned product has been received. The company also noti­fies the retailer of the number of returns and their origins, so the company can prepare for an influx in packages.

Combined under the Newgistics name, the two companies offer forward and reverse logistics to their combined client bases, as well as individualized reporting on inventory and Web-based tracking technology. With Newgistics' recent acqui­sition of Logistics Management Inc. the company can also provide transportation management for less-than-truckload and truckload shipping.

“[Before,] we could go to our custom­er base and say, ‘We'll manage all your returns,' but we couldn't say, ‘We can offer an alternative to FedEx, UPS, etc. to make deliveries to your customers,'” Razzouk pointed out. “Now we've married ship­ping and returns.”

Razzouk said that the 2006 passage of the Postal Accountability and Enhance­ment Act by Congress was another driving force in the decision to acquire Cornerstone.

Cornerstone will retain all employees and its headquarters, and its co-founder David Plemons will serve as VP of busi­ness solutions for Newgistics.

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