Global reverse logistics market is projected to witness a CAGR of 4.93% during the forecast period 2024-2031, growing from USD 715.10 billion in 2023 to USD 1051.17 billion in 2031. The market is growing rapidly due to increased e-commerce activity, stricter environmental regulations, and consumer expectations for sustainable practices. Companies recognize that efficient reverse logistics can increase customer satisfaction and loyalty as customers prefer hassle-free return options. Environmental concerns and regulatory pressures are forcing companies to focus on recycling and responsible disposal of returned goods to reduce waste and promote a circular economy. Technological advances, such as AI and automation, are streamlining reverse logistics, making returns management, product remanufacturing, and material recycling more feasible and profitable for companies. As sustainability becomes a priority across industries, reverse logistics offer companies an opportunity to demonstrate corporate responsibility aligning with evolving consumer values.
In October 2023, United Parcel Service of America, Inc. announced its acquisition of Happy Returns from PayPal, a reverse logistics company based in the United States known for frictionless no-box, no-label returns. This move will expand UPS’s returns footprint and enhance its digital solutions, offering over 12,000 convenient drop-off locations in the United States. Happy Returns, which serves over 800 merchant customers, simplifies the returns process through its software and reverse logistics operations, ensuring a hassle-free experience. By leveraging UPS’s extensive network this acquisition aims to transform the returns industry by reducing e-commerce costs and creating a more sustainable supply chain. This acquisition helps the reverse logistics market by streamlining returns improving operational efficiency and promoting sustainability through easy, cost-effective, and eco-friendly return solutions.
Rise in E-commerce Return to Fuel the Reserve Logistics Market Growth
The growth of the reverse logistics market is primarily driven by increasing e-commerce revenues. Online shopping has made it easier for consumers to purchase and try products, leading to higher return rates, especially for clothing, shoes, and electronics. Customers can order several articles to return those that do not satisfy their expectations, so the return rate of electronic commercial transactions may be much higher than conventional retail. The increase in this income was quick and economically effective, creating a high demand for the effective processing of these products. Many companies are investing in enhanced reverse logistics systems to improve customer satisfaction by simplifying the returns process and reducing costs. E-commerce continues to grow globally, and the demand for optimized reverse logistics will increase, making it a critical part of the modern retail supply chain.
In October 2023, Blue Yonder Group, Inc. announced its intent to acquire Doddle Parcel Services Ltd., a technology company specializing in first and last-mile solutions, to enhance its reverse logistics capabilities. This acquisition will integrate Doddle’s self-service return kiosks and pick-up and drop-off networks with Blue Yonder’s supply chain offerings, enabling a comprehensive end-to-end logistics solution. By leveraging Doddle’s expertise in returns management, Blue Yonder aims to improve customer experiences, reduce costs, and build more sustainable supply chains. This move addresses the growing importance of efficient reverse logistics in e-commerce, which helps retailers and logistics providers manage returns more effectively and sustainably.
Sustainability Initiatives to Drive the Global Reverse Logistics Market Growth
The rising need for sustainability initiatives is driving the growth of the reverse logistics market. Companies reduce the percentage of waste products and their negative impact on the environment through responsible disposal, recycling, and refurbishing of products. Reverse logistics is helping manage returns and reuse with approaches that significantly minimize landfill waste while supporting circular economy practices. Effective reverse logistics can recover material worth from returned or obsolete products, resell refurbished items, or properly dispose of unrecycled material. Sustainability is a major focus, along with environmental goals, brand image, and expectations built through eco-conscious consumers. Moreover, a strict regulatory mechanism by governments for waste management encourages business houses towards more environmentally friendly measures, leading to an additional positive impact on the need for efficient reverse logistics systems. Therefore, sustainable measures are contributing to the expansion of the reverse logistics market.
In January 2024, Accenture completed the acquisition of Onprosess Technology India Private Limited, a supply chain-managed service provider specializing in reverse logistics. This acquisition enhances Accenture’s supply chain delivery capabilities, integrating after-sales operations to improve operational efficiency and customer experience. OnProcess brings extensive expertise in automating reverse logistics processes, leveraging AI and data-driven decision-making to create more circular operations. This move supports Accenture’s goal of offering comprehensive, sustainable supply chain solutions that reduce waste and optimize inventory management, meeting the growing demand for efficient and eco-friendly logistics. This acquisition helps the reverse logistics market by advancing sustainable practices, improving operational efficiency, and leveraging technology to handle complex service challenges, thus supporting a more circular economy.
Retail Segment to Dominate the Reverse Logistics Market Share
Retail segment forms the leading contribution to reverse logistics, mainly driven by the increases in e-commerce return rates. After online sales, retailers continue experiencing a rise in return rates for goods sold, especially in clothing, electronics, and accessories. Therefore, reverse logistics systems must be effective in ensuring that returns are restocked, refurbished, resold, or recycled. This would result in increased customer dissatisfaction regarding hassle-free returns and, consequently, demands for reverse logistics solution. The ultimate objective of sustainability initiatives for retail, including waste reduction and reuse of products, underlines the relevance of reverse logistics. Retailing will continue being the dominant force in the reverse logistics market while constantly striving for optimized operations, cost reduction, sustainability, and customer friendly approaches.
In September 2023, The National Retail Federation (NRF) announced its acquisition of the Reverse Logistics Association to support sustainable practices in the retail industry. This move announced during the RLA Leadership Summit aims to enhance NRF’s commitment to the circular economy by leveraging RLA’s expertise in reverse logistics. By managing the collecting, sorting, repairing and refurbishing of products for resale or recycling this acquisition helps NRF promote sustainability, reduce waste, and improve the supply chain’s overall efficiency. This partnership is set to provide NRF members with innovative real-world solutions and drive the evolution of the global supply chain.
North America to Dominate Reverse Logistics Market Share
North America is the largest market for reverse logistics because of several key factors, one of them being the United States. The main reason for this is the high volume of transactions in e-commerce in the region, along with a corresponding high rate of product returns, especially for sectors such as apparel, electronics, and consumer goods. In light of the fact that increasing volumes of customers are shopping through e-commerce, retailers and companies such as Amazon, Walmart, and Best Buy depend upon reverse logistics systems to deal with returns, restore products, and ensure that all the recycled materials are processed. Companies in North America have encouraged sustainability initiatives, which led the companies to implement greener practices such as product refurbishing, recycling, and waste reduction, boosting the demand for reverse logistics. The region consist of advanced infrastructure, modern technology, and regulating policies that support efficient logistics operations. These factors, put together with a growing emphasis on consumer satisfaction and cost efficiency, have cemented North America’s dominance in the global reverse logistics market.
In May 2023, DB SCHENKER launched its new Circular Economy Logistics product line, focusing on returns, repairs, and refurbishment of electronic devices to support sustainability ambitions and business value. This initiative, introduced at Transport Logistic in Munich, positions DB Schenker as a leader in modular reverse management operations. Handling over ten million devices annually, including printers, smartphones, and server structures, the company excels in return initiation and repair processing, with environmentally friendly practices like low carbon warehousing. This move supports global manufacturers’ ESG missions and is expected to double the circular economy market size by promoting efficient, sustainable supply chains. This will help the reverse logistics market by enhancing sustainability, reducing waste, and improving operational efficiency through a comprehensive, environmentally friendly approach to handling returns and refurbishments.
Future Market Scenario (2024 – 2031F)
- The integration of AI, machine learning, and blockchain will enhance transparency, efficiency, and predictive capabilities in reverse logistics processes.
- Growing environmental awareness and stricter regulations will drive companies to adopt sustainable practices, promoting recycling, refurbishing, and minimizing waste.
- Online shopping continues to increase the demand for efficient reverse logistics solutions, necessitating streamlined return processes and better customer experiences.
- Companies will form more strategic partnerships and invest in innovations to expand their service offerings, improve operational efficiency, and meet evolving consumer expectations.
Report Scope
“Reverse Logistics Market Assessment, Opportunities and Forecast, 2017-2031F”, is a comprehensive report by Markets and Data, providing in-depth analysis and qualitative and quantitative assessment of the current state of global reverse logistics market, industry dynamics, and challenges. The report includes market size, segmental shares, growth trends, opportunities, and forecast between 2024 and 2031. Additionally, the report profiles the leading players in the industry, mentioning their respective market share, business models, competitive intelligence, etc.
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