Facts & Challenges
The logistics industry in Germany comprises a large number of players, including major international companies, medium-sized freight forwarders and transport companies, warehousing and contract logistics providers as well as specialised providers for specific sectors and niches. According to the German Logistics Association (BVL), there are more than 70,000 logistics services providers in Germany. These are predominantly medium-sized companies. Logistics services providers are diversifying in various ways in Germany and around the world in order to remain competitive and offer their customers a wider range of services. Their extended logistics portfolio also includes value-adding services such as packaging, assembly, contract logistics, e-commerce solutions, customs clearance and after-sales services. For full-service logistics providers it is important to offer customers a comprehensive solution. Some logistics service providers opt for vertical integration by expanding their value chain and taking on other parts of the supply chain. For example, they build their own warehouse and distribution centres, take over other logistics providers or integrate their transport and logistics services into existing production or trading companies. Integrating digital technologies into the range of services is playing an increasingly important role. Logistics companies are investing in digital platforms, tracking systems, data analysis, artificial intelligence (AI) and automation technologies in order to make their processes more efficient and offer their customers innovative high-tech logistics services. These may include, for example, the development of real-time tracking tools, intelligent route planning systems or warehouse robots. Other trends include geographical expansion into other regions and countries (e.g. through partnerships) and investment in sustainable logistics. More and more tech service providers from outside the industry, such as Amazon, Uber Freight, Sennder, InstaFreight and Flexport, are also entering the logistics services market. Uber Freight, for example, uses its platform technology to connect transport companies and freight forwarders with freight offers and optimise freight transport. The Berlin-based start-up Sennder operates a digital platform for road freight transport. The platform enables shippers and transport companies to book and manage freight orders efficiently and improve truck capacity utilisation.
The number of third party logistics (3PL) and fourth party logistics (4PL) services providers is steadily increasing. The trend towards outsourcing logistics tasks to external service providers in order to achieve efficiency, flexibility and cost optimisation has led to growth in the market for logistics services. This trend is being reinforced by the complexity of supply chains, companies focusing on their core competencies, specialised digital logistics services provided by 3PLs and 4PLs and cross-border international trade. Third-party logistics services providers take on individual logistics tasks such as transport, storage, distribution, packaging, customs clearance and freight handling, or the entire logistics division of a company. Fourth party logistics services providers, on the other hand, go one step further. They not only handle the implementation and coordination of logistics tasks, but also take care of strategic planning, management and optimisation of a company's entire supply chain. In addition, fourth party logistics providers work closely with third party logistics companies and are responsible for the management and integration of several logistics partners. They also assume the management and continuous improvement of entire supply chains, they monitor performance and analyse data.
Trends in the logistics services and freight forwarding sector
Diversification:
Complex international supply chains have emerged with logistics providers providing a wide range of services. Traditional haulage companies have developed into large logistics companies.
Logistics services providers are increasingly relying on the use of digital technologies such as big data, AI, the Internet of Things (IoT) and robotics to streamline their processes. Automation solutions such as warehouse robots, autonomous vehicles and automated sorting systems are increasingly being used to increase productivity and reduce costs.
Digitisation has led to greater networking among players along the supply chain. Digital trading platforms that connect different logistics services providers and customers are becoming increasingly important. This enables more efficient collaboration and optimised transport and logistics processes. However, competition for customers is also intensifying. Many of the platforms offer additional digital services such as real-time shipment tracking, document management systems and insurance services.
Digital warehouses are emerging. Goods will dispatch themselves and transmit their location in real time at any time (warehouse logistics 4.0). This requires efficient, cost-effective and error-free warehouse logistics.
The e-commerce boom is having a strong impact on the logistics sector. Companies must be able to fulfil the increasing demand for fast and flexible deliveries. Omnichannel logistics, which seamlessly integrates different sales channels, is gaining in importance.
Last mile deliveries remain a major challenge. Customers expect fast and flexible deliveries. This is why companies are increasingly relying on innovative solutions such as same-day delivery, express deliveries, micro-depots in city centres and the use of drones and autonomous vehicles for deliveries.
Sustainability is increasingly becoming an important differentiating factor for logistics services providers. Companies are investing in green technologies, alternative drives and environmentally friendly practices to reduce their CO₂ emissions and offer more sustainable supply chains. This includes introducing electric vehicles, optimising routes to reduce empty runs or using environmentally friendly packaging.
Impending and ongoing trade wars are making business more difficult.
There is a need for well-trained and qualified specialists with knowledge in the areas of digitisation, automation and sustainability. Warehouse workers and lorry drivers are also urgently needed.
What are the requirements for logistics?
On account of the many different areas of activity in the logistics services and forwarding industry, warehouse equipment is used in many different ways. Freight forwarders operate contract warehouses, cold stores, hazardous goods warehouses and transshipment halls, sometimes as outsourcing project for industrial customers (distribution warehouses, contract logistics). The entire array of storage and handling equipment is used, such as industrial trucks, storage and retrieval machines and shuttle carriers, robots, carton and pallet live storage racking, static shelving and racking, bins and containers, pallets, warehouse management systems, barcode scanners and much more.
Digitisation and the resulting new digital services such as cloud-based logistics platforms, real-time analysis using big data and AI and on-demand services are set to skyrocket. Cloud-based platforms offer the advantage of a central interface for managing and coordinating logistics activities. Companies can use these platforms to organise shipping, inventory management, shipment tracking along the supply chain, documentation and communication with partners and customers in a more efficient way. AI and machine learning models are increasingly being used to solve complex logistics problems. From route optimisation and freight capacity utilisation to demand forecasting, digital technologies are helping to optimise logistics processes and make informed decisions. The logistics industry and service providers are also increasingly turning to automation and robotics to optimise processes such as picking, packing, storage and material handling. Robots and automated systems can reduce the workload, improve accuracy and shorten throughput times.
Sustainable logistics services will also increase massively, as climate change is forcing companies to operate sustainably. Legal regulations such as the Supply Chain Act and the CSR Directive for improved transparency in sustainability reporting will boost this trend. Services include for example green delivery services with emission-neutral vehicles, low-emission logistics centres, entirely "green" supply chains, sustainable solutions for last mile deliveries, optimised route planning, packaging optimisation and return and recycling systems for packaging, pallets and other consumables.