April 30, 2018 (RARC-WP-18-008)

  • Reverse logistics is not just forward logistics backwards; it is more complex and more expensive. Yet it is becoming more prominent, since return rates for ecommerce purchases are three times higher than for traditional physical retail.
  • The Postal Service handled 148 million return packages in FY 2016, but its share of the returns market is smaller than its share of the outbound parcel market, indicating a potential opportunity for growth.
  • The Postal Service can use its unique advantages, including a vast delivery network that goes to almost every address in the U.S. and a retail network of more than 30,000 post offices, to expand and improve existing returns services and offer new services that will ease the burdensome returns process for customers.

In 2016, the OIG issued a white paper, The Evolving Logistics Landscape and the U.S. Postal Service, that noted the continuing surge of ecommerce was fueling a rise in the number of packages returned. We now follow up on that work by identifying emerging trends in reverse logistics as well as potential opportunities for the Postal Service.

Notably, the U.S. saw between $113 and $132 billion of online purchases returned in 2017. Facing increased pressure on their reverse supply chains, as well as lost revenue from negated sales, retailers are struggling to address returns in an era when consumers have come to expect fast, free, and easy returns.

To address the threats and opportunities presented by ecommerce, the Postal Service could provide services close to its core competencies to serve ecommerce businesses reliant on return shipping as a part of their business model.  The Postal Service is well situated to serve the product returns market and already offers many return shipping services demanded by ecommerce retailers and consumers.

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Comments (2)

  • anon

    I have about a month of trying to talk with someone due to me not recieving certain important mail. I havent recieved any helpful help to fix my problem, i have the app that shows what mail i should recieve and i still have problems recieve important mail. I need help to solve my problem. I would appreciate it if i get any help or even someone kind of attention.

    May 08, 2018
  • anon

    Greetings Ms. Montenegro. I'm terribly sorry to hear of your displeasing situation. I'm afraid your frustration is directed at the wrong organization. The men and woman at the united states postal service are shining examples of a well-oiled machine. They possess the ability to send correspondence and parcels on your behalf to almost any location in the world. This madame is nothing short of exponentially amazing. In the age of technology and cyber interaction, it can be easy to lose sight of this. If your so-called mail was so important perhaps consider certified mail in the future. I am in no way employed or associated with the USPS and the thoughts conveyed in this comment are solely my own. May your tomorrow be better than your today. Respectfully yours, Carl T.

    Jun 21, 2018