The Fraunhofer Center for Supply Chain Services (SCS) presents the new edition of the »TOP 100 in Logistics« on the European logistics market at International Supply Chain Conference in Berlin from 23 to 25 October 2019.

In times of increasing uncertainty, the logistics world (still) seems to be ok

Even if the uncertainties of a trade dispute on a global level clearly cloud the discussion about the near future of logistics, the logistics world still seems to be in order at present. European logistics grew by 3.7 percent in 2018, following 3 percent growth in the previous year. Looking back at the recent past, the logistics situation can therefore currently be seen as positive.

As in previous years, e-commerce is providing the main impetus for growth. Parcel services, consumer goods-oriented contract logistics and special transports are on the upswing, as the supply chains to end customers are becoming more filigree and complex. In addition to e-commerce, however, another operational driver is noticeable. The shortage of skilled labor in land transport has had a measurable impact on logistics since 2017. Only significantly higher prices in land transportation have made it possible to increase drivers' salaries in Central Europe in order to retain or recruit skilled personnel. Further developments include a significant increase in air freight volumes, but in return also a lack of growth impulses in the bulk transport sector.

The topic of digitalization should slowly be able to take off. At present, the investments of logistics service providers flowing into digitalization can be estimated at more than 2 percent based on annual sales. This means that an investment volume of around € 25 billion can be concluded for Europe. If this level of investment can be maintained, a noticeable wave of modernization should soon slosh through logistics.

In total, around 50 percent of the European logistics volume are provided by logistics service companies, i.e. this share is outsourced to logistics companies by industrial and trading companies. The remaining share is in the hands of the shipping industry.

A quantitative look into the near future reveals growth potential. Although capacity bottlenecks, trade disputes and unclear prospects with regard to sustainability cloud the outlook, the analytical forecast prepared for the first time for this edition of TOP 100 suggests growth of around 3 percent for European logistics in 2019 and 2020. Thus, the analytical forecast is slightly above the growth expectations of the TOP 100 logistics service providers.

A brief look at the largest European logistics market

German logistics reached a volume of around € 278 billion. Not only the number of people employed in logistics has risen by more than 3.5 percent compared to the previous year to 3.26 million, but also the wages attributable to them. The forecast for the development of logistics as a whole is also clouded here by smouldering trade conflicts on a global level and the Brexit chaos, which has now lasted for years. After strong growth of over 4 percent in 2018, growth of 2.5 percent to around € 285 billion is expected in 2019. By 2020, around 2.7 percent growth seems feasible at a level of around € 293 billion. If the trend continues well the € 300 billion mark could be cracked in 2021. However, this will require strong world trade, as exports in particular will boost the national logistics balance. Moreover, it is not just about mass. The quality of logistics must also be kept in mind through investments and progress in digitalization and sustainability. In addition, the shortage of skilled workers will continue to play a role for some time to come.

The study »TOP 100 in European Transport and Logistics Services 2019/2020«, which is published together with the Deutsche Verkehrs-Zeitung (DVZ) and the Bundesvereinigung Logistik e. V., will be published on October 23, 2019 and will be on the Red Sofa of the DVZ on the Thursday of the congress, 24 October 2019 at 4.30 p.m.

The study is supported by the following partners: AEB SE, Commerzbank, ICC International Chamber of Commerce, KPMG AG, Transporeon.

At booth L.A.-Passage, LA 08 in the Hotel InterContinental Berlin, Fraunhofer SCS informs about the development of the European logistics market and the »TOP 100 of logistics 2019/2020«.