What Last Mile Reverse Logistics is and its Importance

by | Aug 26, 2021 | Blog, Returns Automation

What Last Mile Reverse Logistics is and its Importance

Reverse logistics or return management involves taking the right measures to promote the flow of materials back from the point of consumption to the end of origin. It is vital in order fulfillment since there will always be returns due to product damage, errors, or dislike. As such, disposal or reintegration of the replaced products is necessary.

The Impact of E-Commerce Growth

As the pandemic continues, it is clear that industrial real estate has benefited more than other asset classes, and it all promotes massive growth in the e-Commerce sector. According to data from Digital Commerce 360, consumers spent $861 billion online in 2020, which was a 44% increase from the previous year. Take Amazon, for instance; the company recorded approximately 40% year-over-year growth and general online sales skyrocketed to 45% year-over-year for the holiday season. 

The rising online demand for products means that companies should reevaluate their supply chain operations and enhance their products to meet the growing demand. With all this growth in e-Commerce activity, many businesses have benefitted. Still, there is always a catch, and an increase in e-commerce returns can lead to massive losses when not accounted for. For instance, having $1 million in returns can often mean losing up to $500,000 in profits. All this makes it vital to have an efficient last-mile reverse logistics system in place.

Benefits of an Efficient Reverse Logistic System 

With e-commerce activity growing significantly and the expected sales growth of 13.7%, reaching $908.73 billion in 2021, companies that invest in a reverse logistics system stand to gain more than those that don’t. The following are some of the benefits they should expect:

  • Reduced Costs
    One of the benefits of having last-mile reverse logistics is decreasing the value of returns in advance and correcting the return order. You will be able to take charge of administration, shipping, transportation, quality assurance, and things like tech support. 
  • Quicker Service
    With a reverse logistics system, you can deliver goods and conduct returns of products quicker. Completing quick returns means that the customers get what they are looking for faster, and it can be essential in restoring the consumer’s trust in a brand. 
  • Retaining Customers
    It would be best to manage errors in your business, since the last thing you can do is not do something when your customer has had a bad experience. It would help if you understood how to ensure your customers are satisfied and still in touch with your business, even after making a mistake. 
  • Reverse Logistics Policies
    With last-mile reverse logistics, you get a comprehensive advantage through minimizing waste and prioritizing ecologically responsible and friendly practices.

Having a reliable reverse logistics strategy is one of the best ways of optimizing the supply chains across the diverse distribution spectrum. When you consider the impact of reverse logistics, it becomes more comfortable to boost returns and reduce costs, building long-term value. Investors who pay attention to what reverse logistics is all about will have an added advantage in capitalizing on the e-commerce revolution. The performance of reverse logistics is outstanding and contributes significantly to supply chains in general. 

Colton Ward

Colton Ward

Author

Colton Ward is our Strategic Marketing Coordinator and Marketing Video Producer. Get it? "Marketing Video Producer" = "MVP" (He came up with that title himself...). On a typical work day you can find him squashing website bugs (or being squashed by them) and swinging a camera around the office for the company's next video. When not at work, he enjoys boating and skiing his way around Wisconsin's beautiful lakes!

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