GERMANY CONTRACT LOGISTICS MARKET - Growth, Trends, COVID-19 Impact, and Forecasts (2022 - 2027)

Germany, along with UK and France is one of the biggest contributors to the contract logistics market in the Western Europe region and is expected to show a CAGR of over 3% during the forecast period of 2020-2025. The growth in the market is the result of the economic strength, population density, infrastructure and gateway function.

Divided into consumer goods and industrial contract logistics, German contract logistics is one of the most important markets in Europe with high market potential. Germany is one of the largest exporters of automotive contributing 20% of the total automotive exports across the world, majorly exporting to the US, China, UK and France. Despite the slow growth in the German economy in the year 2018-19, government regulation of the carbon-free economy by 2050 is driving the contract logistics service providers to bring about the technological improvements in the logistics and warehousing sector.

Key Market Trends

Climate Protection and Green Logistics

The logistic sector is one of the major contributors to carbon emission and global warming. Being one of the leading markets of contract logistics service, the German companies are focusing on transforming their services in such a way that reduces the use of fossil fuels, conserves resources and improves the efficiency through less waste. The German retail giant, Otto has now achieved its target of 50% CO2 reduction by 2020 and is aiming to become climate neutral by 2050 by expanding the renewable energies and systematic shift to more climate-friendly means of transport.

Dachser in partnership with Mercedes Benz is now using the all-electric 18-ton trucks for transporting deliveries both directly to customers and to the micro hub in Stuttgart, Germany. Likewise, DHL Freights in partnership with BMW pilots launched its first Liquified Natural Gas-powered truck with mega trailers. These trucks are 15% more efficient than the traditional trucks, has helped to reduce the operational costs of the company and are promising sustainable solution for automotive logistics.

Growth in the E-Commerce Retail

According to Handelsverband Deutschland (HDE), while apparel was the major contributor, the fast-moving consumer goods and groceries were the drivers of sales in the e-commerce market. The e-commerce spending reported a 7.5% growth in the year 2019 and is expected to grow with the increasing m-commerce penetration by about 12% in 2020.

While the e-commerce market is growing, the dependence of the e-retailers in the market is reducing. Two major e-retailers, Amazon and Otto, that hold about 50% of the market, are focusing on the development of their in-house logistics services while providing fulfilment services to the small retailers.

Competitive Landscape

The market is relatively fragmented with CEVA Logistics, DHL Supply Chain, DB Schenker Hellman Worldwide Logistics and Kuehne + Nagel as its major players. The companies are actively participating in mergers, acquisitions and partnerships to attain operational advantages. Emerson Climate Technologies in Europe (Alsdorf, Germany) signed Dachser Logistics as its contract logistics partner will not only handle storage and picking, but also the end-customer-specific packaging of the products as a value-added service.

In July 2019, DHL partnered with Lidl (German supermarket company), to build around 500 pack stations nationwide to all the customers to send and receive DHL parcels from the Lidl stores making its services available around the clock. DB Schenker is focusing on increasing its warehousing size at various locations like Augsburg and Güstrow, increasing the capacity by approximately 51,000 sq. meters.

Among the further developments, DHL extended its partnership with German football Association as its official contract logistics partner including the time frame of Women’s World Cup in France and Men’s 2020 European Championship.

Additional Benefits:

• The market estimate (ME) sheet in Excel format
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