Inside the Evolving World of Reverse Logistics and The Final Mile
Authored by SMC³ on May 22, 2025
One-click orders and doorstep convenience have caused a new problem for logistics. It’s no longer only about getting things to consumers, but it’s also about getting them back.
Cathy Roberson, a researcher with the Reverse Logistics Association, recently gave a webinar peeling back the layers on what Roberson called “the back end of the supply chain”—a messy, complex and rapidly evolving segment of freight logistics that too often goes unnoticed.
“Reverse logistics isn’t just returns,” Roberson clarified early in the discussion. “It’s everything from repairs and recycling to keeping things out of landfills. It’s about recovering value from items that would otherwise become waste.”
The Pandemic Tipping Point
Returns have long been part of the cost of doing business—frequently ignored, siloed and treated as a write-off. But the pandemic changed that. With brick-and-mortar retail on pause, e-commerce soared—and with it came an avalanche of returns.
“People were buying more—and returning more,” Roberson explained. “Retailers suddenly realized, ‘We’re losing money on all these returns. We need to manage them better.’”
Big and bulky items—furniture, appliances, exercise equipment—became a particular challenge. These weren’t things that could be stuffed in a padded envelope and dropped at the nearest mailbox. For LTL carriers, the demand for white-glove pickup, repackaging, inspection and re-routing grew rapidly.
The Rise of the Final Mile
Parallel to the rise in returns was an explosion of final-mile complexity.
“Last mile, final mile—call it what you want—it’s no longer just your doorstep,” Roberson said.
Today, delivery might end at a locker, a store or a designated pickup point. This shift, fueled by both technology and consumer expectation, has redefined the economics of the last mile.
Where once FedEx and UPS dominated the space, new players have entered the market—many powered by software, gig workers and retailer-managed fleets. Walmart now runs much of its own delivery network. Target acquired the platform Shipt. Even DoorDash and Uber have edged into parcel territory.
The pandemic created the perfect storm: Major carriers ran out of drivers and vehicles, raised fees to compensate and left retailers scrambling for more flexible, cost-effective solutions.
“Retailers are now taking control of their final mile. And they’re not giving it back,” Roberson said.
Returns: A Growing, Fragmented Cost Center
Asked how companies can better manage reverse logistics, Roberson’s advice was blunt: Start by knowing your numbers.
“Most companies can’t quantify their returns volume. Departments are siloed. No one’s talking to each other.”
From a cost standpoint, labor remains the biggest factor—workers are still needed to sort, inspect and decide whether returned items are fit for resale, refurbishment or liquidation. But Roberson also pointed to a more preventable cost: what she called “stupid returns.”
“If I order a blue couch and it shows up turquoise, that’s a stupid return,” she said. “Fix your website. Get your product images right. Make sure the sizing chart is accurate. That’s how you reduce returns before they happen.”
Even well-intentioned customer behavior contributes. “Bracketing”, i.e., ordering multiple sizes of a product just to try on and return the rest, remains a widespread and expensive issue, particularly in apparel.
Theft, “Free” Delivery, and the Illusion of Convenience
On the last mile side, theft and pricing continue to be problems. Packages stolen from porches result in losses for retailers, who often replace the item at their own cost. Meanwhile, the promise of “free delivery” and “free returns” remains largely a marketing illusion.
“There’s no such thing as free,” Roberson said. “Somebody pays for it—and that somebody is usually the retailer.”
This is why many are introducing subscription services like Walmart+ or Target Circle 365, where delivery fees are recouped through membership.
When the item is large or awkward, those costs become harder to hide. Restocking fees, reduced refunds and customer pushback are becoming more common, particularly as shoppers discover that flat-pack furniture doesn’t return quite as flat.
Secondary Markets and the Battle for Waste
What happens to returned or excess inventory? Increasingly, it ends up in recommerce and secondary markets. Companies like ReturnPro (formerly GotrG) manage this backend, reselling items via platforms like eBay, or in physical stores like Bargan Hut, where consumers treasure-hunt for discounted furniture, electronics and brand-name goods.
“It’s about keeping items out of landfills and recapturing value,” Roberson said. “There’s a whole ecosystem of refurbishment, recycling, and resale.”
Tariffs may push this market further. If costs rise for new goods, demand for refurbished and secondhand items is likely to grow.
Drones, Tech, and the End of the Duopoly
As the last mile fragments, the post-FedEx/UPS duopoly world is beginning to take shape. Amazon and Walmart are experimenting with drone delivery, though the economics remain questionable. RFID tracking is returning (quietly) to prominence—UPS now uses it to track inventory and enhance visibility.
But the most significant shift may be cultural. The final mile is no longer a commodity. Reverse logistics is no longer an afterthought. They are now strategic levers in customer satisfaction, sustainability and competitive differentiation.
“You’re always going to have returns,” Roberson said. “But you can mitigate the stupid ones. And that starts by treating reverse logistics as core, not peripheral.”
Interested in joining LTL Hybrid Sessions? Register here: https://smc3.info/LTLedu