Reverse logistics for industrial waste presents a massive business opportunity for logistics companies and is evolving into a mature industry. This trend is driven by the growing societal demand for a circular economy. “Reverse logistics—the collection and transportation of waste worldwide—is set to become a major business,” says Eiji Abo, Director of the Logistics Management Research Institute.

Reverse logistics for industrial waste presents a massive business opportunity for logistics companies and is evolving into a mature industry. This trend is driven by the growing societal demand for a circular economy. "Reverse logistics—the collection and transportation of waste worldwide—is set to become a major business," says Eiji Abo, Director of the Logistics Management Research Institute.

In fact, when Germany's Circular Economy and Waste Management Act came into effect in 1994, more than 1,500 waste transport companies entered the reverse logistics sector. Based on research findings related to reverse logistics in the United States, collection and transportation costs account for approximately 30% of the waste management market, including recycling. If we estimate the size of the Japanese market in early 2000 at approximately 30 trillion yen, this implies that the reverse logistics market is roughly 10 trillion yen in scale.

On the other hand, the following prediction is also possible. Currently, the Japanese trucking industry market is said to be 12 to 13 trillion yen, with nearly 100% of that consisting of forward logistics for the supply of products and goods. In the future, as the development of reverse logistics is promoted across all sectors, sold products and other goods will flow back from the "arterial" to the "venous" logistics streams. There is a strong possibility that a reverse logistics market rivaling the current arterial logistics market will emerge.

Nippon Express, which has achieved some success in entering the reverse logistics market in Japan, divides its reverse logistics operations into the following three business areas: ① Services for regional environmental conservation, such as the transport of excavated soil and the recovery of spilled heavy oil; ② Specialized transport and processing for specific items, such as mercury and waste oil; and ③ Recycling logistics for used products. Currently, there are reportedly over 90,000 companies engaged in the collection and transport of industrial waste across Japan, the majority of which are small-scale operations run by sole proprietors or similar entities. Nippon Express appears to be pursuing its own unique expansion strategy by leveraging its nationwide network.

As we transition toward a circular economy, the role of reverse logistics will become increasingly significant. In the future, if regulations on the collection and transportation of general waste are relaxed, the reverse logistics market is likely to expand even further. Considering that the foundation of a circular economy lies in self-sufficient local and regional systems, there remain many business opportunities for small and medium-sized enterprises to enter the market for locally-based collection and transportation services. Who will ride this new wave?