In Christopher Nolan's film "Tenet", the flow of time is reimagined, challenging the characters to navigate a world where the past and the future converge in a complex, interwoven dance. This movie, where moving backward is as critical as moving forward, is an analogy for the next narrative violation in logistics. The next logistics unicorn, much like the protagonists in "Tenet", will master the art of moving backwards, focusing on the overlooked sphere of reverse logistics and, in particular, the "first-mile" part of shipping.
Reverse logistics involves the process of moving goods from their typical final destination back to the retailer or a designated location for return, repair, recycling, or resale. The "first-mile" part is where the product's return journey begins, and it's a stage fraught with inefficiencies and untapped potential.
The return process sucks! There’s no consistent user interface. You have to do some variation of packaging, printing, Googling obscure carrier partners and finding dropoffs. Some even involve finding out about “consignment codes” and barcodes that only function in certain countries. This is akin to having to type a SWIFT code for every payment at a grocery store. Or being exposed to server architecture when visiting Instagram.
Why is this? Well, you can’t use large-scale forward logistics infrastructure for reverse logistics. You’d have to build a whole new pipeline with completely different assumptions to do it in reverse. Reverse logistics has been the less glamorous side of the supply chain, viewed as a cost sink rather than a value driver.
Carriers are still living in the 1990s, when e-commerce was almost non-existent and there were no online returns to deal with. There’s now something called the “circular economy” as well. Consisting of rentals, recycling and reselling used items, it has a 100% “return rate”. I'm certain that circular commerce will be huge.
There's already traction of circular business models in e.g.:
This is the vector that an upstart player in the logistics space can & will use to scale. In first-mile alone, the global TAM is currently in high tens or low hundreds of billions USD. In this space, the forward-looking move is to work backwards.
