Market Trends of Germany Domestic Courier, Express, and Parcel (CEP) Industry
This section covers the major market trends shaping the Germany Courier Express & Parcel Market according to our research experts:
E-commerce is Driving the CEP Market Growth
The German e-commerce sector was unable to continue the high sales figures of the previous year in 2022, data from the Association for E-commerce and distance selling (bevh) suggests. Gross sales of goods in e-commerce, not adjusted for inflation, fell by 8.8% to EUR 90.4 billion (USD 97.13 billion) in 2022, compared to EUR 99.1 billion (USD 106.48 billion) in the previous year. The overall industry revenue was EUR 101.7 billion (USD 109.28 billion) in 2022 compared to EUR 107.1 billion (USD 115.08 billion) in 2021. However, compared to pre-Covid sales figures (2019), online sales of goods were still 24.5% higher in 2022. According to bevh, this is a special, economic development fact that the number of active customers remains unchanged, but they are buying less often and for smaller amounts. The bevh expects that the benefits of digital shopping, such as service, transparency, and availability, will contribute to e-commerce growing slightly stronger than the overall market again in 2023 with an expected growth rate of 4.8% for goods.
With the German e-commerce industry expected to record strong growth from the long-term perspective, global e-commerce investors are expected to pump millions of euros into the country. In June 2022, Clearco, an e-commerce investor from Canada, announced its launch in Germany. The firm has pledged EUR 500 million (USD 537.25 million) to local online businesses. This investment in the domestic e-commerce market will continue to drive the industry growth over the next three to four years. The firm has funded over 7,000 e-commerce businesses and has invested over EUR 3 billion (USD 3.22 billion) as of June 2022 globally. In 2022, the firm also launched in Ireland, announcing an investment of EUR 100 million (USD 107.45 million) in the local digital economy. This investment, along with funding from other global private equity and venture capital firms in Germany over the subsequent three to four years, is expected to drive the industry's growth. The UK is currently the leader in eCommerce in Europe, even after Brexit. However, Germany is expected to take over that place by 2025.This tremendous growth of eCommerce will drive the CEP market in Germany.
Growth in Parcel Volumes Fueling the Market Growth
The parcel market in Germany is growing at a tremendous pace. More than four billion parcels are now sent in Germany every year. In the German courier, express, and parcel delivery sectors, including B2B, B2C, and C2C shipments, the development of total shipping volumes has been on a constant upward trend for years. One of the main factors strengthening the German parcel market is the presence of numerous small and medium-sized businesses. In Germany, in 2021, over 12,000 companies were active in the CEP market, with the federal state of North Rhine-Westphalia having the highest concentration of firms. For some years now, there has been a clear shift in the market, with the B2B sector treading water and market growth coming from the B2C sector, main thanks to e-commerce. Last Mile Experts now estimates that B2C parcels represent more than 60% of the total market. Deutsche Post DHL is transporting more and more packages: in 2021 there were 1.8 billion parcels transported in Germany, compared to 1.6 billion in 2020. The higher number of shipments is mainly due to the flourishing online trade.
Parcel shipments are increasing every year because of growing online trade. Over the past 10 years, year-on-year shipment volume growth had ranged between 4-7%. The growth saw an especially rise sharp in 2020, with shipping volumes increasing by a double-digit year-on-year rate for the first time in 20 years, as a BIEK study shows. Throughout that year, in fact, parcel shipments exceeded four billion shipments, reaching 4.5 billion in 2021. Shipping volumes are expected to increase by a year-on-year rate of another 8% in 2023 and reach 5.7 billion shipments by 2025. Considering this, three German rail associations even submitted proposals to increase rail transportation of parcels in the country. The three associations involved are the Allianz pro-Schiene, the Federal Association of Parcel and Express Logistics (BIEK), and the Association of German Transport Companies (VDV). The proposals were presented to the German Ministry of Transport, Oliver Luksic. The associations highlight the necessity of improving capacity in the corridors, accelerating rail infrastructure expansion, and upgrading the urban rail infrastructure. These increasing parcel volumes will contribute to the CEP market growth in Germany.
