Worldwide, many people consider reverse logistics as simply a process of returning goods to the seller or manufacturer, but the concept is broader. The increase in industrialization and commercialization has seen the need for reverse logistics become fundamental for organizations. Reverse logistics combines entire operations within a supply chain that covers reusing products, recycling, renovation of raw materials, renewal and reselling of restocked products (Banihashemi & Chen, 2019). Basically, the concept of reverse logistics covers management, selling surplus products, returned equipment, and other hardware items obtained from the leasing business.
Logistics is a combination of processes and activities that ensure goods and services reach the customer. In this context, the concept of reverse logistics involves resources that are used in the backward step in returning goods back into the supply chain (Sarder, 2021). In a complex supply chain system, any processes that improve the sale of products account for reverse logistics. For example, a supplier that sold a defective item to a customer will be required to return the product through reverse logistics process (Morgan et al., 2018). Further, the manufacturing firm of that product will be required to arrange for shipping by dismantling, organizing for repairs, recycling any materials, and dispose the defective product at the end of the reverse logistics.
In the contemporary business market, technologies in transport and communication have facilitated the growth of e-commerce. As such, multinational companies are selling products and manufactured goods to customers abroad using complex transportation processes (Banihashemi & Chen, 2019). For example, shipping perishable products to overseas countries requires an elaborate transport network. This is required to ensure that the product does not spoil, and it is critical that transportation is arranged in advance. The current global health pandemic has become a major issue causing food spoilage because of poor transport networks and strategies. However, the emergence of reverse logistics has provided a reprieve for food spoilage and minimized the high costs of transportation involved (Sarder, 2021). It is possible for a product to travel in reverse within a complex supply chain so that it can maintain its utility in the defective form. Therefore, reverse logistics refers to the backward flow of items and commodities within a supply chain.
Recycling materials and products is not a new phenomenon, but it has existed for quite some time. However, the current global market that is founded on e-commerce has enhanced the need for recycling and reverse logistics (Sarder, 2021). The majority of customers who purchase goods from e-commerce platforms are likely to return the products because they fail to meet their standards. Sometimes, what customers observe on the e-commerce platforms is not what is sold, and this increases the costs of parcel surcharges (Morgan et al., 2018). As such, without proper reverse logistics, the cost of transporting back the items will be high. The high costs of shipping products due to defects or manufacturing problems account for about 18% of the transportation costs (Morgan, 2018). This has increased the interest in reverse logistics as a system of reducing costs.
In the recent past, retail giants like Walmart and Amazon have changed their strategy and prefer refunding money because of the complex reverse logistics. This change of strategy is informed by the possibility of contamination for personal items that have been found to be defective. Retailers that develop strong reverse logistics have a competitive advantage because strategies that reduce transport risks create a positive reputation in the market. This demonstrates the need for efficient reverse logistics systems for e-commerce business entities. Proper reverse logistics strategies will support the development of new revenue streams, but it also comes with challenges as well. In a logistics system, the retailers need to have sufficient knowledge about production and distribution because this knowledge is also applicable in reverse logistics processes.
As observed from the conduct of giant retailers, reverse logistics remains a notable challenge. Transportation and distribution of goods pose a risk to quality, costs, and environmental effects that need to be incorporated into the operational complexities (Richey & Davis‐Sramek, 2022). However, the implementation of strong reverse logistics systems results in customer satisfaction and minimizes the need for too much storage and resources for managing the processes (Sellitto, 2018). Proper reverse logistics strategies in an organization result in a competitive advantage for effective management of their inventory, better reverse logistic time control, accurate performance, a proper response to market demands, and higher customer satisfaction.
This paper has identified that logistics and transportation are distinct terms that are used in e-commerce and face a lot of complexities. However, it is important to make a clear distinction between transport and logistics to enhance understanding of reverse logistics. Transportation involves the movement of goods, while logistics encompasses management aspects of inward and outward activities within the process of moving goods (Sellitto, 2018). In comparison, both terms involve the process of moving goods from one location to another. Logistics is inclined in the storage processes, movement of goods, cataloging, handling, production, manufacture, and packaging (Richey & Davis‐Sramek, 2022). However, transportation focuses on the function of all activities involved in the movement of products from the point of manufacture to consumers.
Logistics requires an approach to obtaining, producing, and distributing materials and products that have a proper quality to the customer. In the logistics process, planning, management, and implementation strategies are critical in ensuring effective storage and transportation of goods. Also, services obtained from the source to the consumer are achieved through a logistics channel to ensure the customer needs are fulfilled. Other skills that are critical in logistics include warehouse management and optimization, where information and feedback are analyzed to determine future trends (Guarnieri et al., 2020). Logistics needs to incorporate technology to support better innovations and distribution services. In the current business environment, proper management of logistics is critical in ensuring the efficiency of activities and improved productivity.
Transport involves the movement of goods within a supply chain using rail, road, and air. It is important to select a suitable route for transportation because it will ensure the delivery of products using a cheaper cost (Guarnieri et al., 2020). Transportation is categorized as infrastructure, vehicles, and processes involved in the movement of goods from one location to another. Transportation enhances communication and trade between entrepreneurs located at different locations. Therefore, transport is a factor in planning for logistics of goods.
In conclusion, the business environment has become complex, and transportation and logistics have changed to suit the customer’s interests and needs. It is critical that information and products within a supply chain move smoothly to reduce costs involved in transportation and reverse logistics. Transportation involves the movement of goods from one location to another to ensure that it reaches the final consumer. On the other hand, logistics involves the process involved in the management and distribution of goods from one location to another. The costs issues involved in the movement of goods require a high level of efficiency, and customers are demanding quality services and products within a supply chain. Therefore, successful organizations have strong transports and logistics systems that ensure all reverse logistics issues are effective and not costly.
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