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Reverse logistics: What’s happening in the industry

Reverse logistics: What’s happening in the industry
Reverse logistics: What’s happening in the industry

The festive season has come and gone. Consumers are now returning gifts for several reasons. This may be due to the wrong order being received, or incorrect size of a clothing item. The reverse logistics journey is not always an easy one, especially for customers. 

Locate2u News looks at developments in the industry over the past few months. 

What is reverse logistic 

Reverse logistics is the process of returning goods back into the supply chain to be reused. The process forms an important part of the supply chain. It often involved the return of goods, for example damaged items. 

Reverse logistics can be a challenge. Carlton Farr II vice president of supply chain transportation with Radial Inc., n a report by TT News gave some insight into the reverse logistics industry. “It can be costly for businesses along the various functions of the supply chain: They generally require double the transportation and staffing costs, as well as additional warehousing space to hold inventory. From a business perspective, consumers may not exchange products or repurchase after making a return, so this can also eat into profit margins,” he says. 

Industry players master reverse logistics  

In October 2023, UPS acquired reverse logistics firm Happy Returns. The Los Angeles-based company provides no-box, no-label returns to merchants and customers. Its network consists of over 10,000 box-free return locations in the US. 

The reverse logistics process can be time consuming. But thanks to automation at warehouses – robotics provide speed and accuracy, enhancing the reverse logistics process. 

StartUs is a leading startup and innovation network that has identified some trends in reverse logistics in 2024. 

  • E-waste reverse supply chain: Machine learning is reducing electronic waste. This also allows valuable materials to be recovered. 
  • Cloud computing: This allows businesses to keep track of returns and enables businesses to integrate with other logistics systems. 
  • Returns management: Artificial intelligent (AI) technology allows businesses to streamline the process of handling returns. 

Global reverse logistics market 

Grand View Research estimates that the global reverse logistics market will grow at a compound annual growth rate of 9.4%. “The global expansion of e-commerce businesses and the increasing frequency of returns and replacements of products have propelled the demand for reverse logistics services.” 

The report adds that another aspect contributing to the growth of the market is government regulation. Because the e-commerce sector has experienced growth, businesses have needed to ensure a good reverse logistics process. 

“The e-commerce service providers emphasize reverse logistics as certain customers prefer to initially analyze the ordered products physically and then decide whether to keep them. If the product is not worth buying, customers can return it with the help of reverse logistics. For instance, buyers can only test clothing after making a purchase decision, especially for online shopping.”

About the author

Sharl is a qualified journalist. He has over 10 years’ experience in the media industry, including positions as an editor of a magazine and Business Editor of a daily newspaper. Sharl also has experience in logistics specifically operations, where he worked with global food aid organisations distributing food into Africa. Sharl enjoys writing business stories and human interest pieces.

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