Executive Briefings

Recalls in Automotive Industry Lead Reverse Logistics Activity in 2014, Report Says

Reverse logistics last year was punctuated by the record-breaking recall activity in the automotive industry, which created momentum that is now carrying into 2015. According to the Q4 Recall Index analysis from Stericycle, there was an unprecedented 74 million automotive units recalled throughout the year, an increase of 166 percent from 2013. Top affected products included air bags, which made up 34 percent of the total units recalled, and electrical systems, which impacted 31 percent of the units.

"It's clear that the recall landscape is shifting with such high activity. Consumers are more conscious and regulatory bodies are responding with measures to ensure the public is protected and recalls are closed as quickly as possible," said Todd Harris, Vice President, Stericycle. "What we are seeing underscores the critical importance of recall preparation and response. With such high stakes, brands cannot afford to be caught off guard when a recall strikes."

Heightened consumer awareness regarding recalls is another trend that emerged in 2014. With daily media coverage, many consumers went online to find out more about food, baby product and auto recalls. Monthly Google searches for recall-related terms increased by 60 percent from 2013. The CPSC also introduced new mobile applications to help improve consumer notification and response. In the automotive sector, NHTSA is on pace to receive 80,000 consumer complaints about possible auto defects, a nearly 50 percent increase from the annual average number.

The increased consumer awareness of 2014 was also mirrored in intensified scrutiny from various regulatory bodies and lawmakers. Hefty fines levied against manufacturers in 2014 exemplify increased regulatory action. The U.S. Consumer Product Safety Commission had a record year for recall penalties, issuing more than $12m in fines. CPSC fines have steadily increased each year since 2008 when the Consumer Product Safety Improvement Act came into play.

In the automotive sector, the National Highway Traffic Safety Administration issued $126m in fines; more than all of the fines issued in the agency’s 43 years combined. Surprisingly, many of the violations resulting in CPSC and NHTSA fines stem from prior years—in some cases going back nearly a decade.

Logistically complex to begin with, recalls become even more challenging with heightened consumer awareness and demand for high touch communications. With increased regulations, organizations executing recalls need to maintain the highest levels of compliance and rely on experts to help navigate new regulatory intricacies.
“We’ve seen that ramifications from regulatory actions can cause ripple effects for years to come, but organizations that handle recalls in a compliant and timely manner can restore consumer confidence, protect their brand and stay focused on future growth,” Harris concluded.

The Q4 Stericycle Recall Index contains a detailed look at recall data within the pharmaceutical, medical device, food, consumer product and auto sectors. The full report can be downloaded from the Stericycle site.

Source: Stericycle

"It's clear that the recall landscape is shifting with such high activity. Consumers are more conscious and regulatory bodies are responding with measures to ensure the public is protected and recalls are closed as quickly as possible," said Todd Harris, Vice President, Stericycle. "What we are seeing underscores the critical importance of recall preparation and response. With such high stakes, brands cannot afford to be caught off guard when a recall strikes."

Heightened consumer awareness regarding recalls is another trend that emerged in 2014. With daily media coverage, many consumers went online to find out more about food, baby product and auto recalls. Monthly Google searches for recall-related terms increased by 60 percent from 2013. The CPSC also introduced new mobile applications to help improve consumer notification and response. In the automotive sector, NHTSA is on pace to receive 80,000 consumer complaints about possible auto defects, a nearly 50 percent increase from the annual average number.

The increased consumer awareness of 2014 was also mirrored in intensified scrutiny from various regulatory bodies and lawmakers. Hefty fines levied against manufacturers in 2014 exemplify increased regulatory action. The U.S. Consumer Product Safety Commission had a record year for recall penalties, issuing more than $12m in fines. CPSC fines have steadily increased each year since 2008 when the Consumer Product Safety Improvement Act came into play.

In the automotive sector, the National Highway Traffic Safety Administration issued $126m in fines; more than all of the fines issued in the agency’s 43 years combined. Surprisingly, many of the violations resulting in CPSC and NHTSA fines stem from prior years—in some cases going back nearly a decade.

Logistically complex to begin with, recalls become even more challenging with heightened consumer awareness and demand for high touch communications. With increased regulations, organizations executing recalls need to maintain the highest levels of compliance and rely on experts to help navigate new regulatory intricacies.
“We’ve seen that ramifications from regulatory actions can cause ripple effects for years to come, but organizations that handle recalls in a compliant and timely manner can restore consumer confidence, protect their brand and stay focused on future growth,” Harris concluded.

The Q4 Stericycle Recall Index contains a detailed look at recall data within the pharmaceutical, medical device, food, consumer product and auto sectors. The full report can be downloaded from the Stericycle site.

Source: Stericycle