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The reverse logistics market is estimated to grow at a CAGR of 7.8% between 2022 and 2027. The size of the market is forecast to increase by USD 324.23 billion. The growth of the market depends on several factors, including the growing e-commerce industry, increasing cross-border trade, and increasing use of multimodal transport.
This report extensively covers market segmentation by type (recalls, commercial and B2B returns, repairable returns, end-of-use returns, and end-of-life returns), end-user (e-commerce, retail, automotive, healthcare, and others), and geography (APAC, North America, Europe, Middle East and Africa, and South America). It also includes an in-depth analysis of drivers, trends, and challenges. Furthermore, the report includes historic market data from 2017 to 2021.
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The reports categorize the global reverse logistics market is a part of the global trucking market within the global transportation market. The parent global trucking market covers companies engaged in goods and passenger land transportation, including vehicle rental and taxi companies. Our research report has extensively covered external factors influencing the parent market growth during the forecast period.
The growing e-commerce industry is notably driving market growth, although factors such as high operational costs may impede market growth. Our researchers analyzed the data with 2022 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Key Reverse Logistics Market Driver
The growing e-commerce industry is notably driving the market growth. The e-commerce industry is growing rapidly due to the increasing global penetration of the Internet and the increasing availability of smartphones. The growth of the e-commerce sector directly affects the logistics sector. Consumers spend less time in the store and more time shopping at home, so their first direct interaction with a brand is a package delivered to their door.
Logistics plays an important role because the movement of goods depends largely on the transport and distribution network. The seller also offers better return options for reverse logistics than other providers. Such options simplify product return processes and are cost-effective for e-commerce businesses, but also free for customers. Thus, the rapid growth of e-commerce will simultaneously contribute to the growth of the market during the forecast period.
Significant Reverse Logistics Market Trend
The use of blockchain with logistics is the primary trend in the market. Blockchain is a distributed ledger technology linked to a list of blocks that stores data in a cryptographically secured and decentralized network. In the logistics industry, blockchain technology increases the visibility of operations and offers the ability to effectively track products throughout the logistics process. Due to the numerous advantages of blockchain technology, reverse logistics providers are collaborating with blockchain technology providers to develop platforms that increase the security and transparency of reverse logistics. This platform helps provide safer and more efficient global trade by better supporting transparency and information sharing, bringing different businesses together. Such developments will lead to the growth of the market during the forecast period.
Major Reverse Logistics Market Challenge
High operational costs is the major challenge impeding market growth. Factors such as a lack of skilled labor and rising fuel prices are some of the main cost drivers of transportation costs, which weakens the profitability of key vehicle logistics service providers. Some developing countries like India have high logistics costs compared to developed countries like the US, Japan, and many European countries.
Reverse logistics providers in the market are also under additional pressure from customers to lower prices. Constant customer demand for lower prices creates price pressure for reverse logistics providers. Also, the presence of insufficient logistics infrastructure in India, Brazil and South Africa, for example, increases operational costs. A disorganized and inefficient supply chain in these countries causes various indirect costs related to logistics, such as storage transportation costs, transportation damage and loss, or theft. Such factors are likely to limit the growth of the market during the forecast period.
Key Reverse Logistics Market Customer Landscape
The report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Global Reverse Logistics Market Customer Landscape
Vendors are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Aramex International LLC - The company offers reverse logistics such as Aramex E-commerce solutions as its key offerings under its logistics segment. The company offers warehousing and its management distribution, supply chain management, inventory management as well as other value-added services.
The report also includes detailed analyses of the competitive landscape of the market and information about 15 market vendors, including:
Qualitative and quantitative analysis of vendors has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize vendors as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize vendors as dominant, leading, strong, tentative, and weak.
The market share growth of the recalls segment will be significant during the forecast period. A product recall is a procedure in which a company must retrieve a product from the market and from consumers who purchase it because of a defect or error in its production. During this process, companies compensate or otherwise convince consumers to trade the products to ensure the safety of their customers. Therefore, a rise in the number of recalls will drive market growth during the forecast period.
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The recalls segment was valued at USD 193.41 billion in 2017 and continued to grow until 2021. Recall processing refers to a part of reverse logistics because it requires a logistics plan to get the product back and then discard, repair, or refund the purchase price. Recalls are issued to protect the public, and the entire line of products or a certain batch that has problems is removed from the market. Hence, the growth of the recalls segment of the industry will concurrently propel the growth of the market during the forecast period.
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APAC is estimated to contribute 42% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period.
The reverse logistics market in APAC is expected to grow due to the presence of a large consumer base for both food and beverage and healthcare product suppliers. Increased demand for organic food products due to the availability of certified organic dairy products and the rising health consciousness among consumers in countries such as China, Australia, and New Zealand are fueling the demand for cold chain logistics from the healthcare and food industries, as it helps maintain the shelf life as well as the quality of these products. Such benefits of cold chain logistics will increase its demand, which, in turn, will lead to the growth of the market in this region during the forecast period.
The reverse logistics market in the region was negatively impacted by the COVID-19 outbreak in the region in 2020. However, with the gradual recovery of economies from the COVID-19 crisis due to the resumption of activities and the adoption of e-commerce models by various end-user industries, including the automotive industry, the regional market is expected to rebound during the forecast period.
The report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the latest trends and growth opportunities from 2017 to 2027. The market has been segmented by Type (Recalls, Commercial and B2B returns, Repairable returns, End of use returns, and End of life returns), End-user (E-commerce, Retail, Automotive, Healthcare, and Others), and Geography (APAC, North America, Europe, Middle East and Africa, and South America).
Reverse Logistics Market Scope |
|
Report Coverage |
Details |
Page number |
166 |
Base year |
2022 |
Historic period |
2017-2021 |
Forecast period |
2023-2027 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.8% |
Market growth 2023-2027 |
USD 324.23 billion |
Market structure |
Fragmented |
YoY growth 2022-2023(%) |
6.8 |
Regional analysis |
APAC, North America, Europe, Middle East and Africa, and South America |
Performing market contribution |
APAC at 42% |
Key countries |
US, China, Japan, Germany, and France |
Competitive landscape |
Leading Vendors, Market Positioning of Vendors, Competitive Strategies, and Industry Risks |
Key companies profiled |
Aramex International LLC, Blue Dart Express Ltd., C H Robinson Worldwide Inc., CMA CGM SA, Core Logistic Pvt. Ltd, Deutsche Post AG, DTDC Express Ltd., Ecom Express Pvt. Ltd., FedEx Corp., First Flight Courier Ltd., GXO Logistics Inc., Happy Returns LLC, Kintetsu Group Holdings Co. Ltd., Nippon Yusen Kabushiki Kaisha, Pitney Bowes Inc., Reverse Logistics GmbH, Safexpress Pvt. Ltd., Shipbob Inc., TCI Express Ltd., and United Parcel Service Inc. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, and Market condition analysis for the forecast period. |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this report to meet your requirements. Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by End-user
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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