Reverse Logistics Boost Warehouse Sector

Warehouse space grows limited as more people return unwanted holiday gifts.


While the peak season seemed to be over with after the holidays, it is only continuing within the warehouse sector as customers return unwanted goods. 

According to CNBC, warehouses have experienced increased demand since 2012 as e-commerce continues to grow. Demand for warehouse space continues to thrive, especially as reverse logistics steadily becomes the main user of the area. According to CBRE, e-commerce returns are currently taking up 700 million square feet nationally. 

Each year, nearly $100 billion worth of holiday gifts will be returned. In-store shoppers return about 8 percent of the goods they purchase, while online shoppers return upwards of 30 percent of products they purchased. Warehouse space is filling up as reverse logistics teams unpack items, check them for damage and send them wherever the retailer needs them to go. Consumers want their money back fast, so the process must be done efficiently and quickly. 

Reverse logistics requires more labor and at least 20 percent more space than regular shipments from suppliers, CNBC reports. An inbound truckload of goods from one supplier can take two to eight hours to process, while a truck filled with returns could take 48 hours to process because each item needs to be checked and processed. 

Meanwhile, construction for warehouse space continues to grow in areas near large cities and transportation hubs. Currently, the national vacancy rate is 4.3 percent, the lowest it has been in 20 years, CNBC reports.