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1、LAST MILE EXPERTSPOLISH CEP REPORT2022September 2022Complimentary VersionPartners:2 Glossary 3 About Last Mile Experts 4 About Partners 12 Background to the report 15 Market overview 20 Summary 21 Polish parcels market background 26 Market trends:market share by carrier,volume,value 31 Closing comme
2、nts 61 Terms and conditions*63CONTENTS*To receive the full(paid)version of the report,please contact us by writing to:The full version of the report is more detailed and includes market shares by volume and revenue,with a split for the 8 major CEP operators in Poland followed by historical and forec
3、asted market shares of each distribution channels B2B,B2C,C2X,as well as domestic,international,and economy,express from 2019-2023.The full report also contains descriptions of upcoming changes in postal regulations and in addition a breakdown of the 10 European countries with the most OOH points.3G
4、LOSSARYDefinitions and abbreviations used in the report AA Advanced Analytic AI ArtificialIntelligence APM Automated Parcel Machine(parcel locker)B2C Business to Consumer B2B Business to Business BREEAM Building Research Establishment Environmental Assessment Method BTS Built to Suit CEE Central Eas
5、tern European countries CEP Courier&Express Parcels COD Cash on Delivery CX Consumer Experience C2X Consumer to Business/Consumer DALI Digital Addressable Lighting Interface DIY Do it Yourself D2D Door-to-Door(delivery)D2P Delivery to Point ESG Environmental,Social and Governance EV Electric Vehicle
6、s E-VEHICLE Ecological Vehicle(low emission)GHG Greenhouse Gas Emission G2P Goods to Person IDM Interactive Delivery Management LAST MILE Leg of a journey comprising the movement of goods from a distribution centretoafinaldestination LCV Electric light commercial vehicles LME Last Mile Experts MFCMi
7、croFulfillmentCenter MVP Minimum Viable Product NPS Net Promoter Score NRA National Regulatory Authorities OEM Original Equipment Manufacturer OOH Out of Home Paczkomaty Patented name for InPost parcel lockers PDA Personal Digital Assistant PLNPolishZotys(currency)PUDOPickUpandDropOff(point)P2D Poin
8、t to Delivery P2P Point to Point RPL Residential Parcel Locker SLA Service Level Agreement SQM Square meters UAV Unmanned Aerial Vehicle USO Universal Service Obligation 2D Density-Dependent 3D Third Party Logistics4LAST MILE EXPERTS CONSULTANCYOur focus drives Your SUCCESS!Last Mile Experts is a sp
9、ecialist CEP and E-commerce last mile consultancy.Ourteamhavejointexperienceofseveralhundred years and are supported by partnered specialists throughout the globe,who help us deliver industry best practice in even the most focused areas.In addition to the above,we have relationships with many key su
10、ppliers of hardware and software for route optimisation,sortation or tracking and control.Very few consultancies are so specialised and hence our mottoABOUT THE REPORT5LAST MILE EXPERTS MANAGING PARTNERMAREK RYCKIExperience in courier industry Financial Controller-DHL Express Poland 1990 Founder,Mas
11、terlink Express (now DPD Polska)1991 Turnaround CEO Masterlink Express 1999-2004 CEO CEE,DPD 2004-2006 CEO CSEE DPD 2006-2013 VP Amazon Logistics Europe 2014-2015 Deal Advisor SB Member Pekaes SA 2015-2017 Deal Advisor SB Member Integer/InPost S.A.2016-2017 Deal Advisor SB Advisor Urgent Cargus S.A.
12、2017-2019 Board Advisor eMAG/Sameday(CEE),Trendyol(TR),Tehnomanija(RS)Achievements Created leading domestic CEP carrier in Poland(DPD Polska)Successful turnaround of some 10 last mile businesses Developed the most homogenous road based parcel network in CSEE Conceived IT4EM(ERP for several DPD marke
13、ts)Part of start up team for Amazon Flex,Fresh and Prime Now Participated in creating the successful restructuring plan for InPost Selected Projects Complete nationwide PUDO/locker implementation plan in CEE Restructuring of some 10 CEP businesses Launch of fuel surcharge throughout DPD CSEE IT4EM/I
14、DM capability at DPD CSEE Helped acquire or sell over 10 CEP businesses Helped several e-commerce players develop their own last mile capabilitySummary Entrepreneurial ex-regional CEO with multicultural experience,a courier express parcel,restructuring and last mile e-commerce background.A team buil
15、der with a strong industry network who has operated in various CEP markets,especially Poland,with a proven track record of success,even in very challenging circumstances.ABOUT LAST MILE EXPERTS6Experience in courier industry Operations Supervisor,Oversea Courier Services 1992-1996 International Oper
16、ations Manager,M.S.Stolica 1996-2003(GSA for Airborne Express,FedEx,Aramex/GDA,Net Express)Founder,COO of MACS brokerage&freight forwarding 1998-2004 Key Account Manager,Frans Maas Polska 2004 International Operations Manager,M.S.Stolica 2004-2005 Industrial Engineering Manager,UPS Polska 2005-2010
17、Project Manager Nordics HQ relocation,UPS NE District 2010-2011 Industrial Engineering Manager,UPS EMEA Region 2011-2013 Outside Service Providers Manager,UPS Polska 2013-2014 Project Manager Central Hub construction,UPS Polska 2014-2015 COO,UPS Polska 2015-2019 Achievements OCS,Airborne Express,Fed
18、Ex and Aramex(GDA)next day international services implementation across Poland Full operational and IT integration of UPS and acquired M.S.Stolica UPS Nordics HQ and Stockholm package centre relocation UPS stage one integration with acquired Kiala B2C company UPS Poland central hub construction with
19、in 9 months UPS Poland best operational performance worldwide LAST MILE EXPERTS VICE PRESIDENTMIREK GRALSelected Projects Co founder of Polish Express Carriers Forum GSE contracts with Airborne Express,FedEx and Aramex UPS Poland integration with M.S.Stolica and complete distribution network redesig
20、n LaunchingUPSintercontinentalflightsviaWarsaw airport First stage of Kiala B2C business merge with UPS network Renegotiations of Polish UPS Outside Service Providers service agreements with new SLA implementation UPS Poland feeder&hubs network redesign BREXIT operational set up redesign for UPS Pol
21、andSummaryMore than 29 years of experience in CEP industry supported by cooperation with the largest players on the international market.Leader,team player with organisational and planning skills followed by experience of work abroad with multinational/multicultural environment and time critical pro
22、jects.ABOUT LAST MILE EXPERTS7WHAT WE DO AT LAST MILE EXPERTSAt Last Mile Experts,we support our clients to develop,deliver and sustain competitive advantage across several critical business areas with focus on Courier Express Parcel and e-commerce last mile:Business operating models(setup and optim
23、isation,research and benchmarking)for all last mile processes for e-commerce,postal,CEP and retail Generalorspecificoperationssolutions,including specialist knowledge in OOH(PUDOs&Lockers)networks,returns,same day delivery Strategic planning and commercial proposition Support in negotiating the best
24、 SLAs and commercial terms Consumer communication models,including IDM Hardware and software selection,development support and contract negotiation People and organisational development Strategic as well as operational pricing and product portfolio management Courier renumeration systems best practi
25、ce Support for last mile customers in identifying the best supplier/partnerMergers&acquisitions including market reviews,pre-deal due diligence and post-deal advisoryE-commerce/Amazon and the last mile Out of home delivery options including APMs and HUBs(lockers)and PUDOs(access points).Strategic pl
26、anning and commercial propositionInterim/turnaround managementABOUT LAST MILE EXPERTS8PASSION We all love what we do and genuinely want to give our best,every time.FOCUS All of our consultants have a proven track record of success in CEP and e-commerce last mile.Unlike almost all other advisors,we s
27、tay close to our area of experience and hold the belief that in this case,less means more for our customers.EXPERIENCE True customer obsession means recruiting and keeping the best specialists.We believe that our experts are attracted to the opportunity to work on the toughest business challenges in
28、 their areas of expertise.The above combination means that weareabletooffertrulyspecialistknowledge supported by a unique customer experience.WHY LAST MILE EXPERTSABOUT LAST MILE EXPERTS9OUR TEAMS EXPERIENCE COMES FROMABOUT LAST MILE EXPERTS10MEET OUR CUSTOMERS AND MEDIA PARTNERSABOUT LAST MILE EXPE
29、RTS11GLOBAL REACH WITH REGIONAL PARTNERSLast Mile Experts is a highly specialised consultancy focusing exclusively on all aspects of courier express parcel(CEP),postal and e-commerce last mile logistics.Our aim is to help CEP companies,postal operators,e-commerce players,potential investors or other
30、 stakeholders improve their performance,operations,organisation and technology.In addition,we also support clients in strategy development or M&A.OurofficeisbasedinWarsaw,Polandbut we are mobile and have partners in several locations in Europe and North America.Every member of our team has several y
31、ears experience in last mile logistics and/or e-commerce.With partners throughout Europe,North America,MENA and China,we can support our customers in international projects as well as supply local specialist knowledgeABOUT LAST MILE EXPERTS12MODERN WAREHOUSES FROM 7R 7R has been operating on the Pol
32、ish market since 2009.We are a dynamically growing developer specialising in the provision of modern warehouse and production space for lease.We implement both warehouse and industrial centres designed for many tenants,as well as BTS facilities preparedaccordingtothespecificexpectations of the futur
33、e tenant or building owner.The 7R portfolio includes large-scale logistics parks and city warehouses of the Small Business Unit type,which form the 7R City Flex Last Mile Logistics network.We engage in ESG activities,caring for the environment,local communities and corporate governance.So far,we hav
34、e completed projects with a total area of over 1.5 million sqm.Currently,over 650.000 sqm is under construction in facilities throughout Poland,some of which are city warehouses for the last mile,among others7RCityFlexKrakowAirportI.More and more City FlexesOne of the important factors driving the d
35、evelopment of the warehouse industry,and above all last mile facilities,is the dynamic growth in e-commerce,for which location within cities is becoming essential.However,the structure of tenants of warehouse facilities located in urban centres is much more complex.A group of tenants for whom other
36、factors determine the attractiveness of these locations exists.There are companies among them that-unlike in the case of tenants focused on city logistics-want the customer to be able to reach them as soon as possible.There are also companies for which it is crucial to provide their employees with c
37、onvenient access by public transport.In addition to the location in our urban facilities,we focus on modular solutions ensuringflexiblespaceadaptationtoaspecifictypeofactivity.Therefore,ourcityflexesareusednotonlybylogisticsand e-commerce companies but also by,for example,pharmaceutical and medical
38、companies.We focus on sustainable developmentESG plays a key role in our business strategy.Therefore,one of our priorities is to care about the natural environment.All new 7R investments areBREEAMcertifiedasverygoodorexcellent.We ensure that our buildings are an integralpartofthespaceandfitintoa bro
39、ader context.What does this mean exactly?For example,reducing noise emissions,creating additional infrastructure for cyclists or safe access for pedestrians.We promote clean POLISH CEP REPORT 202213energy,reducing the carbon footprint or destruction of natural resources and protecting biodiversity.E
40、nergy efficiencyisalsoimportantforus-in this respect,we analysed several solutionsinthetechnicalspecificationand selected for implementation those thatgivethemostsignificantrealbenefittothetenantandthentranslateinto a high BREEAM rating.The solutions we have been implementing in 7Rs warehouses for y
41、ears help reduce tenants operating costs.Warehouse and industrial facilities are equipped,among others,with LED lighting,which,compared to standard light bulbs,consumes 90 per cent less electricity.Whats more,the intelligent DALI lighting control system-with motion sensors and activity diagrams-allo
42、ws you to manage energyefficiently.Additionalequipmentis a BMS system that manages its consumption.When creating functional buildings today,we consider the changes related to the market or the climate and carefully plan the entire life cycle of such a facility.That is why we focus on solutions that
43、create long-term investment value.In 7R,we use reinforced roof structures prepared for photovoltaic panels.It is a highly effectivetoolbecauseonceplacedon an area of 20.000 sqm,the panels are able to produce up to 60 per cent of the buildings daily energy demand.Pro-ecological water management in th
44、e building is a no less important aspect.We use many solutions in this area,including open paving stones that let in rainwater during heavy rainfall.Thisenablestheinfiltrationof thousands litres of water into the ground and avoids the expansion of infrastructure and the disturbance of the natural wa
45、ter cycle.In addition,using a simple solution,such as time faucets and aerators,i.e.covers limitingtheoutflowofwaterfromatap,reduces water consumption by up to 60 per cent.In practice,this means that in a warehouse with a size of approx.30.000 sqm,we save up to 3 million litres of water annually.Thi
46、s is enough tofillanOlympicswimmingpoolwithevery year.POLISH CEP REPORT 202214Cushman&Wakefield(NYSE:CWK)isa leading global real estate services firmthatdeliversexceptionalvaluefor real estate occupiers and owners.Cushman&Wakefieldisamongthelargestrealestateservicesfirmswithapproximately 50.000 empl
47、oyees in over400officesandapproximately60countries.In2021,thefirmhadrecordedof$9.4 billion across core services of property,facilities and project management,leasing,capital markets,and valuation and other services.To learn more,visit www.industrial.plor follow CushWake on Twitter.POLISH CEP REPORT
48、2022PARTNER:CUSHMAN&WAKEFIELD15What are the sources and methodology?The main sources for the report are:Extensive desk research on the parcels market and its operators covering company accounts,websites and other sources Published information on key market drivers such as economic data and estimates
49、 of home shopping levels and practices Interviews with senior-level contacts in the market LMEs own,in depth,expert knowledge The key input to our market size estimates is a bottom-up analysis of the revenues of the parcel companies operating in Poland.Adjustments have been made to compensate for co
50、mpany activities in areas other than CEP.Where actual or published data is not available,we have made estimations based upon our market knowledge.Our model allows us to prepare historical and future market estimates which are based on trends in company performance as well as future drivers such as g
51、eneral economic performance,specificcarrierstrategies,development of e-commerce and theeffectsofmajorone-offimpacts,such as the COVID19 pandemic or the invasion of Ukraine.Who will benefit from our report?The report is intended for:Owners and operators of parcel networks E-commerce or retailers requ
52、iring omnichannelfulfillment Investors in these businesses Market regulators and policymakers Journalists and editors of newspapers and magazines Analysts,consultants and other stakeholdersBACKGROUND TO THE REPORTBACKGROUND TO THE REPORTTo receive the full(paid)version of the report,please contact u
53、s by writing to:The full version of the report is more detailed and includes market shares by volume and revenue,with a split for the 8 major CEP operators in Poland followed by historical and forecasted market shares of each distribution channels B2B,B2C,C2X,as well as domestic,international,and ec
54、onomy,express from 2019-2023.The full report also contains descriptions of upcoming changes in postal regulations and in addition a breakdown of the 10 European countries with the most OOH points.16The Polish CEP Market Report 2022 covers the marketstructure,size,growth,key trends and competitive la
55、ndscape.Last mile markets worldwide have grown dramatically since COVID-19 accelerated e-commerce growth.However,this growth has faltered over the last few months arguably due to the invasion of Ukraine and associated issueswhichhavenegativelyaffectede-commerce.Nevertheless,Poland has been one of th
56、e fastest growing European markets,especially in the area of out of home pickupanddropoffpointsandparcellockers.According to the 2022 Last Mile Experts OOH Report,the country can now boast over 74.000 unique points(of which almost 20.000 are APMs).Amazon has been a major catalyst for change in the W
57、estern world,and although it entered the Polish market in a rather clumsy way,key players,notably InPost andAllegro(the leading local e-commerce marketplace)have learned from the e-commerce behemoth.As a result,they have made this market one of the most innovative CEP markets in Europe.Alibaba and S
58、hopee are also now also both present on the Polish market which also makes it one of the most competitive in Europe.Over the last few years,there has been significantchangeinmarketshares,parceltypes(B2CvsB2B)andfirstorlast mile channels(OOH vs D2D).In this report we seek to understand what is behind
59、 these trends and to assess what future impact this will have on the various stakeholders.BACKGROUND TO THE REPORT“ONE BOX”by Allegro Source:Allegro.pl 17The market is served by a combination of carriers ranging from Poczta Polska(the national postal operator)to InPost,their former rival in the mail
60、 sector but now the dominant parcel locker operator and indeed CEP player by volume and value.All the so called integrators are present(DHL,UPS and FedEx)as are the two major European Ground networks(DPD and GLS).There is a number of new OOH actors who have become more relevant in recent years such
61、as Allegro,Alibaba(Cainiao),abka(leadingconveniencestore network)or Ruch(former state newspaper distribution network)and part of the Orlen Group.This report looks at how the various players are performing and what we can expect to happen over the next few years.The report draws on:LMEs in-depth know
62、ledge of this market as well as various studies and reports we have already shared in the public domain.What can you find in this report?The report covers all key players in the Polish market,both for OOH and D2D.WedefinetheCEPmarkettoincludedomestic,intra-European and international parcels.It also
63、includes B2B,B2C and C2X parcels.Volume is calculated in parcels.All volumes are allocated to the carrier with commercial ownership of the customer.Sub-contracted volumes have been removed as far as possible to avoid double counting.Values are calculated in PLN(Polish Zotys).BACKGROUND TO THE REPORT
64、“Amazon Locker”18E-commerce is bursting at its seams and warehouses are followingFor the second time the e-commerce team of the global warehouse and logistics consultant Cushman&Wakefieldhasconductedacomprehensive study of the market of logistics space used for e-commerce services in Poland.The stud
65、y involved all the leading developers operating on the Polish market and the largest logistics operators specialized in the e-commerce sector.The study examined how much warehouse space is dedicated to e-commerce,how it is distributed regionally and which industries most often decide to set up a war
66、ehouse for e-commerce.In addition,the report includes a review of thespecificneedsoftenantsengagedin online sales and the factors that influencetheirdecisiontochoosea warehouse location.In the report,youwillalsofindanswerstomanyinteresting questions,such as:Does the situation in the warehouse market
67、reflectallitsneedsandmarket trends?Do e-commerce companies pursue theirstrategiesbasedontheofferofdevelopers and logistics operators throughout the country?How many e-commerce operations are conducted in Poland?Are these processes related to shipping and distribution to the Polish market?In what dir
68、ection will e-commerce develop in the coming years and how should the warehouse real estate industry react to this development?E-commerceis bursting at its seams and warehouses are following key takeaways An increasingly sophisticated omnichannel supply chain the narrow structure with a central ware
69、house and several local buildings will become a thing of the past.Warehouses will include both BACKGROUND TO THE REPORT19a big-box distribution centre with an area of close to 400.000 sq m and up to 4.000 workers,and an urban micro-fulfilmentcentresupplyingfast-moving consumer goods and operated by
70、10 employees.In addition,omnichannel locations at the back of a retail shop in a shopping centre,which will enable deliveries to urban areas in under 20 minutes.Alongside the delivery address and the product itself,place of shipment will also become increasingly important.And again,it need not be a
71、central warehouse several hundred kilometres away from the customers address.Thanks to the fulfilment-from-storeoption,wecanhave a pair of jeans delivered from a brick-and-mortar store located in our city.This is how 2D logistics turns into 3D logistics.ESG will no longer be just a buzzword,but will
72、 translate into real measures although not all advanced solutionsmaybringfinancialsavings.According to developers calculations,buildings with photovoltaic panels,better insulated walls and roofs,LED lighting and an energy management system will consume up to 50%less electricity.While LEDs with a sma
73、rt lighting control system DALI that adjusts light intensity to changing external conditions will consume 90%less power than typical bulbs.Whileautomationwillnoteffectivelyreplace all manual processes,developers,logistics operators and other tenants will use tools embracingartificialintelligenceand
74、mirror worlds.The G2P market is expected to quadruple over the next three years and 50%of supply chain organisations will invest in applications that support AI and AA capabilities in 2024.Just like Microsoft has digitally reproduced 1.5 billion buildings and over 30 million square kilometres of gre
75、en areas for its“MS Flight Simulator”,to seamlessly implement processes in a new warehouse we will create 3D scans of facility.Solution enabling virtual tours and a simulated layout of devices o check for collisions and processefficiency.There is no such a thing as the best location for e-commerce.M
76、any locations across Poland have some advantages and developers are capable of creating conditions favourable for building a warehouse in seemingly secondary locations.The last three years have seen strong growth in warehouses for e-Commerce in Kuyavia-Pomerania and Lubuskie not only in such provinc
77、es as Greater Poland,Lower Silesia,Silesia,Lodzkie and Mazovia.BACKGROUND TO THE REPORTSource:“E-commerce is bursting at its seams and warehouses are following”Cushman&Wakefield20MARKET OVERVIEWMARKET OVERVIEW Parcelweightdefinitionsvary,between operators,but most describe parcels as being up to 31.
78、5 kg*.All service levels are included(time definiteanddeferred).We consider the following services as out of scope:mail,pallet distribution,groupage,freight forwarding,same day/on demand deliveryfulfilmentandcontractlogistics.While we will discuss CEP volume developments in Poland in detail,later,it
79、 is worth taking a quick look at the latest picture.As can be seen in the above chart,InPost is now a dominant leader and almost double the size of DPD or four times the size of Poczta Polska.The US integrators(UPS and FedEx)are now of limited importance in the domestic market and UPS,in particular,
80、has fallen from a once strong position(following the acquisition of a major local player,MS Stolica several years ago).The report offers historical and forecast market sizes covering the period from 2015-2023:Market sizes are presented in value and volume terms.Market values are presented on a const
81、ant currency basis and in Polish Zotys.The market is segmented by:recipient type(B2B,B2C and C2X),delivery channel(OOH,D2D),destination(domestic,international)service type(premium,economy).*This is due to EU restrictions on what one person can carry which are set at 31.5KGSource:LME,company accounts
82、,press reports,interviewsPolish CEP market volume by carrier in 2022E(in million pcs)21Market context and trendsAs a result of improved economic performance and the e-commerce boom,the Polish parcel market has reached almost PLN 13.7bn or 1bn parcels in 2021.While out of the scope of this report,sam
83、e day and premium deliveries are becoming the next development as the dominant marketplace,Allegro pushes its partners to develop new super-fast services.InPost and on a smaller scale,Xpress-Couriers(now owned by Allegro)are at the forefront here together with Deligoo and Stava.Market growth was mos
84、t rapid in the OOH segment(90%in 2020 and 62%CAGR 2019-2021 by volume).InPost remains the biggest winner,which grew 115%in 2020(over 250%CAGR 2015-2020)by volume and is nowmarketleader.abkaspositionstays strong as well-having started from nothings,it is now a leading independent OOH enabler via its
85、network of over 8,000 outlets.Inpost is now reported to have over 38,000 e-tailers and over 9,2 million users of its app.The key losers are the legacy carriers who have not been able to embrace the demands of the new lastmile,althougheffortsarenowbeing made by DPD and DHL to make up for lost time,es
86、pecially in the area of APMs.SUMMARYSUMMARYSource:LME,company accounts,press reports,interviews22Total internet retail sales in Poland reached over PLN 100bn in 2021,having grown at 28.1%per year on average(CAGR)since 2019.The biggest share in internet retail sales pertains to consumer electronics(2
87、3.9%),fashion(15.2%),and DIY and furniture(16.3%).The fastest growing industry in 2021 was e-grocery(30%)but the market share is still low(4%)Second-hand marketplaces such as Vinted or OLX appear to be the next big thing(and not just in the Polish last mile)LME estimates,based on PwC data.E-tailers
88、need capacity,and new,customer-centric features.Accordingly,new last mile services have been developed by carriers,large e-commerce players,as well as other parties such as independent parcel shop and locker network operators.Leading local e-tailers and marketplaces,such as Allegro,Empik and more re
89、cently Amazon,Alibaba,Shopee are increasingly getting more involved in delivery.That is either done by low-cost delivery or with the use of subscriptiondeliverymodels,reflectingthe strategic importance of it to their core business.Their large volumes give themsignificantmarketpowerandanabilitytooffe
90、rveryattractivedealstoshippers and shipment recipients.Carriers are investing in improving their systems,in particular IDM,to provide better customer experience as well as toimprovetheiroperationalefficiencyandeffectiveness.Newtechnologyis being applied throughout carrier operations,from automated s
91、orting and robotics in hubs and depots to use of lockers and parcel robots(robotic lockers).The traditional hub and spoke model remains important,but disruptors as well as e-grocery players are looking at more localised models allowing for faster delivery times.SUMMARY23Competitive landscapeInPost i
92、s the undisputed market leader,both by volume and revenue.DPDs the runner-up,together they make up 64%by volume and just under 50%by revenue.InPostisdefinitelytheoneto observe as it is estimated to have grown by 38%over the last year.Their dominance with respect to parcel lockers(they have the large
93、st network in Europe)is the key competitive advantage.A number of important independent localplayerssuchasabkaorRuch/Orlen have entered the CEP space in the form of infrastructure players.Allegro and Alibaba(Cainiao)are makinggreateffortstoachieveanMVP parcel locker network which LME estimates to be
94、 about 3,500 points large.Amazon already has 10 bigfulfillmentcentresinPolandandan increasingly large tech team.It has recently made a full market entry but only using third party carrier services.The only leading international e-commerce players that continue to be absent are eBay(arguably the resu
95、lt of its failed attempt to de-throne the incumbent marketplace,Allegro,some 10 years ago)and JD.com.InPost is the dominant B2C leader and holds the place traditionally occupied by the incumbent postal operator.Poczta Polska(Polish Post)is becoming more focused on parcels as their letter volumes ste
96、adily decline.Unfortunately,due to political turbulence,management change has been frequent and Poczta Polska seems to have lost the ability to challenge the private sector players.It now seems unlikely that they can recover a primary B2C role.Consolidators or parcel brokers continue to support the
97、C2X segment,and a leading broker,Apaczka has been merged with Sendit(formerly part of Allegro Group).B2B parcel volumes are growing slightly over GDP levels which contrasts with explosive volumes for B2C,and more recently C2X parcels.SUMMARYSource:LME,company accounts,press reports,interviews24Outlo
98、okWe expect to see more restrained market growth with more customer-centric services and features being largely a function of:Entry of Amazon and Shopee as well as the development of Alibaba and Allegroslastmileofferings Creation of alternatives to InPosts closed parcel network,unfortunately not as
99、a result of a consolidation of effortsbyallofthecarriersunabletoleverage InPosts network Consolidation of InPosts International position via partnerships with other carriers and Evri(formerly Hermes)Continued decline of the position of the Postal incumbent,unless the government takes steps to protec
100、t its position with anti-competitive regulatoryorfiscalmeasures Consolidation amongst start-ups dealing mainly with same day deliveries Further consolidation of courier brokers operating as IT solutions integrating multiple forms of delivery,including OOHSUMMARY25EXPERT OPINIONThe Polish CEP industr
101、y is more and more driven by the dynamic development of e-commerce which is one of the fastest growing sectors in recent years,both nationally and globally.The pandemic and the resulting restrictions at brick&mortar stores have contributed to its dynamic development.On the one hand,e-commerce has en
102、abled many people to access products and function relatively normally during this difficult period.On the other,internet became a place where it is easy and quick to buy something without a lot of thought almost as with impulse products(e.g.chewing gum)at the checkout in a shop.The e-commerce growth
103、 achieved during the pandemic is likely to be a lasting achievement and will be the basis for its further development.However,the dynamics of this development have recently been somewhat limited by the high level of inflation,which reduces the purchasing power of consumers.Due to the lack of geograp
104、hical restrictions in e-commerce,goods are sometimes shipped from very far away to the customer.Regardless of that,e-commerce is the most effective choice for delivery,even for long distances,because it allows to avoid using private transport to shopping malls and enables better consolidation and ro
105、utes optimization.However,one of the biggest challenges of e-commerce is the last stage in the process of delivering the shipment to the recipient(last mile delivery)that CEP companies deal with.prof.Arkadiusz KawaDirector of ukasiewicz Poznan Institute of TechnologySUMMARY26Market definitionThis re
106、port covers the market for parcel services in Poland.Items are typically small parcels,larger than a letter(for which parcel service is generally considered not tobecost-effective)butcanbehandled by one person.The precise upper weight limits vary between operators but are typically in the region of
107、25-35kg,with 31.5kg being a common standard due to EU regulations.Delivery may be next day or several days later,but not usually the same day the item was picked up on.The most common service,today is a declared(not guaranteed)next day delivery.Operations typically involve a hub and spoke network.Th
108、is usually consists of a network of local depots,which handle collections and customer deliveries and a central hub,acting as a clearing house to sort parcels sent between differentlocalareas.At the margin,express parcels overlap with other segments such as mail,pallet distribution,groupage,freight
109、forwarding,same day courier and contract logistics.Many operators,including the nationalpostoffices,theintegrators,as well as many independent players,also operate in adjacent areas.As far as possible we have tried to include only their parcel activity in our assessment of this market.POLISH PARCELS
110、 MARKET BACKGROUNDPOLISH PARCEL MARKET BACKGROUND27Characteristics of the marketCEP is a network type business where the overwhelming majority of costs relate to the provision of the service platformandarefixedinnature.Hence,the marginal cost of an additional customer or parcel is usually small;this
111、 is especially the case with OOH.As a service business,the largest cost item for a typical parcel operator is labour cost.Capital intensity is relatively low(except with lockers);hence returns on capital are generally high.Scale economies are important in certain areas but particularly in density of
112、 pickup and delivery routes.Reducing the time spent travelling between stops(both for collection and delivery)should lead directly to lower cost and increasedprofitability.Unless a carrier has some unique advantage,such as IDM or APMs,and/or is heavily integrated with the customer,switching costs ar
113、e relatively low and,in most markets,there exists a range of alternative providers.As a consequence,customer churn rates are frequently high,in particular for larger B2C customers.POLISH PARCELS MARKET BACKGROUND28Business vs.Consumer deliveryTherehasbeensignificantconvergencein recent years between
114、 the traditional parcels segments of B2B,B2C and C2C.In the past,each was considered to be a distinct market.Business carriers were wary of the risks of home deliveries,fearing that theywouldnotfittheirmodelsandwould increase costs.Residential addresses,likelytobeoffthenormaldelivery routes,can ofte
115、n be harder to locate and present a high probability of a failed delivery with no-one being available to receive or sign for the package.Home deliveries were largely carried out by specialist consumer carriers,many of whom had been set up by the catalogue mail order companies to enable them to serve
116、 their networks of agents.These carriers used low-cost models which were often able to offersegment-specificfeaturessuchas evening and weekend delivery but tended not to have the same level of parcel tracking and security as the business delivery models.Consumers and small businesses lookingtosendoc
117、casionalorone-offparcelswoulddropthemoffattheirlocalpostoffice.However,in recent years,many of the barriers have broken down.The expansion of home shopping has made consumer deliveries a faster-growing segment,attracting business carriers to the area.Increasing parcel density/volumes,developed PUDO
118、or APM networks have enabled moreefficientcollectionanddeliveryconsolidation.Together with improved routing,satellite navigation systems the abovereduced costs and risks of consumer delivery to the point that itcanbeascalableandprofitablebusiness as demonstrated by InPost in Poland.POLISH PARCELS MA
119、RKET BACKGROUND29 Most traditional consumer delivery carriers have invested in sophisticated tracking and tracing systems and,in some cases,lured B2B customers with low prices to improve their delivery density and hence their economics.eBay hobby forum sellers and internet shopping returns have made
120、 parcels sent by consumers and small business(C2X)a key growth area.The internet has made the segment easier to access,leading to far more alternatives offeredtosenders.Thoseincludetraditional carriers,often via their PUDO and locker networks,e-commerce last mile carriers such as Allegro Logistics o
121、r Cainiao and intermediaries such as the internet parcels brokers.Nevertheless,it is still useful to consider online shopping as a distinct market driver.Our market growth model does so,alongside the overall level of economic activity measured in real GDP,which is important given that parcels carrie
122、rs serve a wide variety ofcustomersacrossmanydifferentsectors of the economy.Business deliveries no longer account for the majority of the market in most developed countries,where deliveries are primarily driven by the growth of online retail.Simultaneously,C2C(Vinted,OLX etc)volumes are growing in
123、Europe and while no immediate volume growth is evident,we see this as the next big thing in terms of volume development,possibly from 2024.POLISH PARCELS MARKET BACKGROUND30Other segmentations of the marketThe market is often segmented in other ways,such as:PREMIUM/ECONOMYPremium services are those
124、which commit or“guarantee”to deliver a parcelonaspecificdate(typicallynext working day for most domestic services)and/orbyaspecifiedtimeofday.Introduction of such services enabled carriers to charge premium prices.However,as operations have becomemoreefficient,morecarriersincorporated premium delive
125、ries intotheiroffer,thusreducingdifferentiation.The gradual shift towards premium services seen in the B2B segment hasbeenoffsetbythefastergrowthof B2C segments.Initially skewed towards economy services,carriers are now increasingly moving towards next day rather as the default option INTERNATIONAL/
126、DOMESTICThe proportion of international shipments varies between carriers and integrators such as FedEx or UPS who are ceasing to play a key role in the domestic market.Most international shipments are B2B but the consumer element is growing as leading online retailers spread to new markets.DHL is t
127、he only player to have a separate International Express business(DHL Express)and a Domestic/International Deferred parcel business(DHL Parcel).Historically,significantpremiumscouldbechargedforinternationaltraffic,andthiswasaclearareaofdifferentiationbetween the global integrators/international netwo
128、rks and domestic operators.In recent years,price premiums,particularly within Europe,have fallen,partly in response to EU pressure to reduce single market barriers to trade.Most carriers arenowabletoofferinternationalservices,either by being part of an international group or via an alliance/partners
129、hip.Europeanparcelstendtobeofferedas Air Express(premium)services or road-based(standard)services.For close destinations,road-based parcelscanoffersimilardeliverytimesandaresignificantlycheaperfor heavier items.A recent innovation involving intra-EUtraffichasbeenthecreationofspecificoperationsforpro
130、ximatecross-border parcels.In the past such parcels would have been routed via the respective national hubs.Wherever volumesaresufficientparcelsarebeingtransported directly across the border via local depots only.This is both timeandcost-efficientandenablesfaster performance as well as more competet
131、ive pricing.Also,some players are seeking to implement a GLS-style cross-border model in which hubs are located for International as well as domestic optimisation.Prices(at least in the EU)relate more to distance than costs relating to crossing a boarder.POLISH PARCELS MARKET BACKGROUND31Last mile i
132、s currently the fastest growing major segment of logistics.Some of the key trends include:Continued development of PUDOs and,in particular,lockers Changes in retail patterns with e-tailers and retailers paying more attention to the last mile and even setting up their own capability here Improvement
133、in carrier IDM and a general increased use of technology in the last mile Growth of same day delivery Deteriorating situation at Polish Post Entry of new players,especially in OOH Continued role of brokers to serve the C2X segment Importance of C2C volumeDevelopment of OOH The need for capacity as w
134、ell as customer-centric features by e-commerce and retail is driving development of more efficient last mile infrastructure and,in particular,OOH delivery.PUDOsaregenerallyinPostOfficeretail outlets,convenience stores(abka)orKiosks&Petrolstations(Ruch/Orlen).Only two networks abkaandSwipBox,aretruly
135、opentoall carriers but the latter is struggling,now with less than 200 free access machines and an apparent lack of interest from the parent company to develop the model.In fact,we expect these machines to either be repurposed or sold.Lockersareubiquitousandofferexcellent coverage of all urban areas
136、 with fast development also in smaller towns.Leave with neighbour doesnt work well in Poland so OOH is more important than in a market such as the UK where leave safe”works well.Lockers have achieved NPS scores above D2D and are now arguably the preferred delivery channel due to ease ofaccess,cost-e
137、fficiencyandsimplereturns.MARKET TRENDSLOOKING AT THESE TRENDS IN TURN:MARKET TRENDS132Lockers are fundamental to our last mile initiatives in Poland and we have invested significant time and money into developing Cainiaos own network in Poland.Veysel IsikCainiao Business Development Manager Eastern
138、 EuropeThe reason for locker(and to a similar degree PUDO)success is:More choice for the customer Highfirst-timedeliveryrates Ease of locating and accessing by couriers Highlyefficientdeliverymethodwhich increases last mile capacity by up to 5 times SignificantcostbenefitsvsD2D Significantlylesscong
139、estion Some 2/3 less carbon emissions in urban areas and more in rural onesOOH is increasingly important in many EU markets France,Germany and Poland have some 40%+OOH share of delivery.Poland has the largest locker network in Europe which is about double that of Germany or the UK.In Spain,there are
140、 about 6 900 lockers,but most of them are small RPLs(Residential Parcel Lockers).MARKET TRENDSCainiao parcel locker Source:warszawa.naszemiasto.pl33We anticipate continued growth in demand for OOH driven primarily by theneedforcost-effectivenessandhuge growth in second life products for which this i
141、s the only feasible delivery(and return)channel due to the low value of the items sold.Subscription models such as Allegro Smart or Empik Premium have promoted OOH options and have helped make this the fastest growing segment in the Polish last mile.Amazon,Cainiao,Shopee all have a suite of last mil
142、e options and both VintedandOLXwhonowoffersimplelast mile options are making C2X services ever more in demand.Key challenges in running an OOH model include:The need for a dense network(LME has an MVP rule of 1 point per 10.000 inhabitants or about 3,500 in Poland*).The need for suitable IDM softwar
143、e and toolstosupporteffectiveOOHservices.The need for an open and optimised network,including APMs and PUDOs,which is available to all carriers is apparent in this market.Unfortunately,InPost,whileofferinggooddensity,is a closed network.As noted earlier,abkaandSwipBoxaretheonlyothersignificantOOHnet
144、workswiththeformer being expensive for carriers and the latter being far below the MVP level of about 3,500 points.Since our last report,Allegro has initiated its plan to build a network of its own lockers as a closed network,catering for the Marketplaces parcels.Similarly to Cainiao,however,its str
145、ugglingtofindandsecureenoughgood locations.Orlen has also started rolling out its own lockers which will supplement its legacy network of Ruch and Orlen PUDOs.A further challenge for InPosts competitors is the utilisation of lockers.According to a recent a statement from InPost(dlahandlu.pl 31-03-20
146、22),theyre achieving 62x better utilisation in comparable locations versus their competitors,or 75 parcels to a mere 1,2.*this is not an optimal network but represents the minimum density that has any chance of successMARKET TRENDS34Changes in retail patternsWhile any detailed discussion of retailin
147、g trends is beyond the scope of this report,twosignificanttrendsappeartohavepositiveimplicationsforparceldelivery.2Increase in direct sales by e-tailers as well as brick and mortar retailersPolish e-tailers have been relatively slow in developing their own last mile operations.It is only recently th
148、at Allegro and Alibaba have started their own coherent last mile operations.As discussed already,Allegro and Alibaba now have 1,550*lockers in situ and while Amazon has now entered the market,despite rumours,they havent developed any in-house last mile capability.Following COVID-19 and lockdown rest
149、rictions,retailers were forced to develop multi-channel last mile strategies if they were to remain in business.Similarly,large brands are more and more open to developing their own omni channel distribution strategy.These trends have had positive impact on parcel volumes as brands and retailers gen
150、erate more OOH and D2D volumes.Furthermore,the tragic invasion of Ukraine has led to some 3 million new consumers in Poland,but evidence to date suggests that this has not compensated for the general slowdown in e-commerce growth.MARKET TRENDS35Subscriptions are a big business in PolandSubscription
151、models such as Amazon Prime,whereby consumers pay a oneoffannualfeeinreturnfor“free”shippingandabundleofotherbenefitshave become a key success story in the Polish market.Allegro Smart doesnt haveallofthepackagebenefitsofPrime but has been highly successful in generating loyalty to the marketplace an
152、dsignificantparcelvolumesforcarriers.Without any doubt,the key winner here is InPost with its extensive locker network.The second,smaller,but apparently also successful,subscription model in Poland is that of Empik,a leading e-commerce retailer under the Empik Premium brand.These models are attracti
153、ve to consumers due to the perception of“freedeliveryaswellasotherbenefitsand are also favoured by e-tailers due tosignificantincreaseindemandtheygenerate.A few years ago,Amazon estimated that this can be 100%or more.E-grocery becomes a realityUp until COVID,e-grocery was a means to an end used by p
154、layers such as Amazon to“own”all of a customers buyingtime.Thiscouldflywhereloss-making e-grocery is subsidised by high margin consumer goods but for grocers or other smaller e-commerce players,this simply didnt add up.COVID-19 dramatically increased e-grocery demand but in recent months there have
155、been several high profileplayerssuchasGorillas(justacross the border in Germany)or Getir having to pair down their activities.Accordingly,westillhavesignificantdoubtsaboutitsfinancialfeasibility,although we feel that with suitable automation it may become a“must have”for any successful grocery retai
156、l network.GdaskWarszawadPoznawiebodzinKrakwSosnowiecOkmianyGliwicePawlikowiceTechnology Development CentresAmazon Logistics CentersAmazon Web ServicesKobaskowoWrocawSource:Amazon Polska Amazon locations in PolandMARKET TRENDSE-grocery has a very high mental entry barrier for customers.Especially as
157、they have generally been doing their grocery shopping in a traditional way for all of their life.Once completely new cohorts were forced by the Covid situation to break this mental barrier,they have learned the convenience and granted their trust.From this point on,it is much of a recommendation gam
158、e,where stable growth of penetration can be foreseen.Due to high setup and logistics cost I expect only a handful of players to be present in the market with a single dominant leaderKatarzyna Kazior,LME PRO Partner and e-grocery expert36IDM;the“secret sauce”in the last mile3MARKET TRENDSEven the bes
159、t OOH networks will fail if they are unable to communicate interactively and in a timely manner with consignees.This is because IDM or,as we like to call it,the“Uber app for parcels”allows consignees to share their preferences for time and place of collection,to track how the delivery is going in re
160、al time,and to change their minds,even once a parcel is in transit to their selected delivery address.Not only does IDM improve the customer experience,but it also maximisesfirsttimedeliveryrates,which are the ultimate goal for any carrier.Probably the best in class IDM,today,is DPD UKs predict serv
161、ice.”DPD Predict”Source:DPD.co.uk37Increased use of technology in last mile operationsTechnology including software,robotics and AI are changing the way parcels are handled and delivered.Due to the consolidation of the Polish CEP market and dynamic volume levels this is now a key development area fo
162、r most carriers,especiallyforInPostandabka.While automated sorting lines in hubs or last mile route optimisation software and hardware(PDAs)tools have been around for some time here are some of the latest technologies being used on the Polish market:4Hub and depot automation Automation in parcel sor
163、ting hubs and depots is continuing to increase productivity through ever more sophisticated technology.All nationwide carriers have built large automated hubs which haveallowedforlatercutoffsandimprovedefficiencyofoperations.Like with APM technology,these solutionsarerarelycosteffectiveuntil they op
164、erate at a reasonable scale.Only a few years ago DPD Polska launched the largest hub in CEE at a cost of over EUR 40 milion but this will have now been dwarfed by the consolidated investments of InPost who were reported to have carried well over 4 million parcels on their peak day in 2021.“Denisort”
165、,Via Post,France Source:FMARKET TRENDS38MARKET TRENDSSince the lockdown in 2020 e-commerce has seen continuous growth and an associated increase in demand for process optimisation:shorter order throughput times,later acceptance deadlines and growing product diversity.This has had a major impact on t
166、he warehousing market and the need to automate warehouses,particularly at the completion and packing stages.The e-commerce boom has led to a greater variety of parcel types.Although the wide range of sorting solutions available may seem problematic,undoubtedly a few key aspects can help narrow down
167、the choice.The most important factor is the throughput provided by the sorting system,both during standard and peak seasons.It is important to look for solutions that provide maximum throughput at minimum machine speed.This strategy reduces equipment wear,energy consumption,noise and will provide a
168、considerably smoother treatment of shipments.Processing requirements are also important.All sorting systems have different advantages,so it is important to choose one that will work best with the consignments that are most frequently processed.The entire product range should be considered,not only t
169、he current one,but also the upcoming one.The main factors to consider are the types of items to be sorted,as well as packaging,variety of items and structural integrity.It is also worth reviewing space requirements,noise levels,capital and operating costs,energy consumption,skills of maintainers and
170、 operators,and plans for future expansion.Daniel Kusak,Managing Director of Ferag Polska sp.z o.oMARKET TRENDS”Denisort Compact”Source:F39MARKET TRENDSWhile Amazon does not yet have their own last mile operations,they already haveanetworkof10largefulfillmentcenters.AttheFCsinWrocaw,Kobaskowoand Okmi
171、any,Amazon have implemented sorting robots and this is a trend that weexpecttodeveloptootherlargefulfillmentoperators.Moreover,asplayerssuchasDHL,UPSandInPostarealreadyworkinginthefulfillmentarea,wecanexpect this trend to continue.CEE and especially domestic market activity remains still growing,but
172、 undoubtably some processes were prolonged due to development process circumstances,low vacancy,unpredictable construction cost dynamics,“wait and see”strategy of tenants and some investment funds or equity partners.In general outlook our view on the ground is that demand should remain healthy in th
173、e long term,generated by further impact of e-commerce and nearshoring initiatives.Retail chains and FMCG companies also represent strong position in Poland.All the more,that some of them are still in early phase of omnichannel strategy adjustments.The Polish warehouse market appears to be expanding
174、at a rate similar to that for e-commerce.Warehouse supply set an all-time high in 2021 as Polands total industrial stock reached almost 24 million sq m,a 15%increase on the end of 2020(20.7 million sq m).Polands development pipeline currently stands at 4.5 million sq m,up by close to 130%on the same
175、 time last year.Despite these record levels,vacancy rates did not shoot up on the contrary,the overall vacancy rate has fallen to an all-time low of 3.8%,down by three percentage points compared to where it was a year ago.Polands five core provinces(Mazovia,Silesia,Lodzkie,Lower Silesia and Greater
176、Poland)currently account for 80%of the nations total warehouse stock;and of last years new supply,which came to over 3.1 million sq m,more than 30%(1.04 million sq m)was built in Mazovia and Silesia.Development activity also accelerated strongly in western Poland,in such provinces as Lower Silesia,G
177、reater Poland and Lubuskie,which saw 1.34 million sq m of warehouse completions,accounting for 38%of 2021s total new supply.It is worth noting that each province reported demand for warehouse space,with Kuyavia-Pomerania and Lubuskie experiencing their all-time highs of 450,000 sq m and 410,000 sq m
178、,respectively.It is notable that 12.5 million sq m of modern warehouse space came on stream in the last five years alone,accounting for over 50%of the entire Polish market.As a result,modern warehouses meeting the highest standards and requirements dominate,which sets Poland apart from Western Europ
179、ean markets,where much older and non-class A warehouse space makes up a substantial proportion of stock.On the other hand,due to high inflation and rising interest rates,consumer sentiment is deteriorating and some spending,especially for non-essential goods,may be curtailed,so we do have a pattern
180、of rising rents and low supply,but frankly-that is the pattern everywhere.Taking above into consideration,the sentiment remains positive,even despite the war in neighboring Ukraine.The transition towards e-commerce transformed the perception of logistics and warehouses which finally began to be seen
181、 as an element of building a competitive advantage and as an added value to a companys range of merchandise rather than a cost that needs to be minimized no matter what it takes.That is why it is advisable to be close to your end customers,to expand your supply chain to include mini-hubs and small b
182、usiness units located near the largest urban areas,to open secondary locations and to install modern automated systems in large distribution centres to ensure fast picking.Although inventory supplies and storage,order picking,added-value services or returns management may appear to be key in logisti
183、cs and logistical costs,the last mile accounts for 50%or more of all supply chain spend.The last mile is being increasingly referred to as new retail,so thats why the proper ecosystem of city logistics,transhipments hubs and sorting facilities will be a key differentiator and pivotal issue within CE
184、P industry over the course of next years.Damian KoataPartnerHead of Industrial&Logistics Agency PolandHead of E-Commerce CEE40MARKET TRENDSLast mile delivery technologyCarriers are increasingly looking at alternatives to traditional fossil fuel vans for last mile delivery with a view to gaining bett
185、er access to restricted areas and bus lanes as well as reducing their emissions levels and final mile delivery cost.InPost appears to be most active herewithafleetofcloseto300Voltia and Mercedes Benz EVs rolled out in 2021 and planning much bigger numbers in 2022 as more and more of its drivers real
186、ise the benefitsofEVsforurbandeliveries.DPD is also reported to have added over100EVstoitsfleet.Otherkeyplayers such DHL Express have some 10+vehicles and GLS Poland declared that by 2026,4 out of 10 parcels will be delivered by electric vans.Urban micro depots have been used by DPD for some time no
187、w,but we can expect other players to also begin reinventing their infrastructure to be closer to the market and to allow for faster delivery.Urban MFCs or micro consolidation depots will reduce stem mileages by being located much closer to the point ofdeliveryinsmallerflexiblespacessuch as under-use
188、d shopping centres or car parks.Voltia EV delivery van Source:https:/ OPINIONWhile the use of electric trucks in the logistics industry is very low,and the prospects for increasing this use are rather uncertain,electric-powered vehicles with a GVW of less than 3.5 tons are being increasingly used wi
189、thin Last Mile.The expansion of electric delivery vehicles in the courier services market will continue,primarily for environmental reasons.Last mile transportation is mainly carried out in cities,and according to the UN,cities account for 60-80%of total energy consumption and 75%of carbon footprint
190、 emissions.Projections presented in the Green Last Mile Europe Report 2022”state that the so-called last mile from e-commerce deliveries alone could generate CO2 emissions of 5.5 million tons in 2032.Switching to electric cars would reduce this to 1.3 million tons.In addition,the use of electric veh
191、icles is supported by the fact that the cost of using such a car is much lower than for internal combustion vehicles.Of course,the use of electric cars is not without disadvantages.And here it is worth mentioning,for example,that electric cars are heavier than vehicles with an internal combustion en
192、gine,which lowers the loading factor.In addition,the use of so-called electrics”necessitates investment in new infrastructure for charging vehicles.A very important role in inducing transport companies(from the KEP industry and beyond)to choose low-and zero-emission vehicles is played by both top-do
193、wn regulations related to,a.o.the functioning of clean transport zones in city centres,as well as the effective support of local authorities,including,i.e.providing financial support for the use of such solutions and striving to ensure their attractiveness in terms of price in the coming years.The g
194、rowth of electromobility in last mile area(and beyond),will probably cause an increase in energy demand and the need to develop vehicle charging infrastructure.The use of RES in Poland is relatively small(the share of RES fell to about 17%in 2021,despite record production from these sources of 30 TW
195、h),the dominant source of energy is still coal-fired power plants(the share of coal in electricity production in 2021 increased and amounted to more than 72%),which are highly emissive(CO2 emissions of Polish power plants in 2021 amounted to 104.9 million tons).Therefore,the reduction of CO2 emissio
196、ns in cities,a.o.as a result of the use of electric vehicles in the last mile area,may unfortunately result in increased CO2 emissions in the areas of Polish coal-fired power plants.The development of electromobility in Poland should accordingly go hand in hand with the trend of energy transformatio
197、n to finally ensure the required environmental effect.Marta Cudzio Deputy Director of the Logistics and Modern Technologies Center Poznan Institute of TechnologyMARKET TRENDS42MARKET TRENDSOther technologies that are likely to develop in the Polish last mile include:AGVs(aka delivery robots)are bein
198、g developed by 2 leading Estonian companies,Cleveron and Starship Technologies.Sofar,nosignificanttests have been made in Poland and with current technology relating to small machines that can carry only one or two fairly standard parcels.Robots,which cannot navigate steps this is not really a low-c
199、ost norefficientlocaldeliverymodel(especially given the need for a human“fail safe”person monitoring the robot).We can expect,however,are AGVs in the form of standard last mile vans or larger linehaul vehicles which obviate the need for a human driver and allow for longer uninterrupted driving times
200、 as well asmoreefficient“machine”driving(linehaul).The arguments for last mile vans are even more compelling as the courier can focus on planning their deliveries and doesnt need a driving license;the van simply drives them to the optimal location near their stop and waits for them in a safe and con
201、venient place.UAVs are used to transport smaller parcels or medication and currently receive a lot of hype.They are almost unknown in the Polish last mile and while we can imagine specificusecasessuchasurgentdeliveries of medical supplies or drugs circumventing natural obstructions or poor infrastru
202、cture such as a river,sea,mountain or even frequently congested road.This is unlikely to be used at scale for non-specialist cases for some time.The Polish Air Navigation Agencyrecentlyconfirmedthatit has issued approvals for more regulardroneflights.Fixed“long-distance”routes between Warsaw and Soc
203、haczew and Warsaw and Pultusk join an existing shorter,local routeinJastrzbie-Zdrj.Swiss Post UAV Source:Swiss post43MARKET TRENDSSmartlocks,blockchain and other emerging technologies Smartlocks are beginning to gain credibility as a tool for ensuring successfulfirsttimedelivery,particularly for hea
204、vy and bulky items that cannot be served by PUDOs or lockers.So far,the Nordics and North America represent the best trial markets and Amazon Key now has a garage delivery service using exactly this technology.Put simply,the consignee is able to give one time or regular access to a courier in a cont
205、rolled and safe manner using an app.This can be linked to a camera so that the customer can control and record the whole delivery process for total peace of mind.Smartlocks are still virtually non-existent in the Polish last mile and while we see clearbenefits,itseemsthatthisisunlikely to change in
206、the near future.Similar projects with in-car delivery are also being tested in Europe but have not yet come to Poland.A blockchain is a decentralised,distributed,and generally public,digital ledger consisting of records(or“blocks”)that is used to record transactions across several computers so that
207、any relevant block cannot be altered retroactively,without the alteration of all subsequent blocks.Blockchain-based systems can allow a sender to track shipments and deliveries handled by several third-party carriers.Onereportedbenefitisthat the blockchain-based system enables automated invoicing an
208、d reduces disputed billing,which in turn reduces delays in paying transport companies.This technology is not currently used in the Polish last mile and we do not anticipate this to change in the near future.“Amazon in house delivery”Source:Amazon,Parked cars can be seen as an already deployed out-of
209、-home delivery network.This starts to make sense if we consider that 1bn cars in the world sit idle 95%of the time.In-car delivery can give vehicles a function also when parked,increasing operational efficiency of deliveries(and returns),and lowering their environmental impact.Technical integration
210、between connected cars and couriers to make in-car delivery a completely digital and peace-of-mind experience for the customer.We are working with major car manufacturers,couriers,and e-commerce players to enable in-car delivery services across Europe.We believe that reaching critical mass is the ke
211、y for this innovative service to be successful,and partnering with a player like 2hire allows couriers to be compatible with the major car brands with low effort and investment.Filippo Agostino CEO and co-founder 2hire 44Same day and premium delivery While same day services are outside ourdefinition
212、oftheparcelsmarket,it is an area of innovation and rapid growth especially in the light of COVID-19 experience.Same day delivery as a premium retail delivery option is becoming more widespread as traditional retail seeks to compensate for falling footfall in their physical stores.Recent research sug
213、gests that an increasing group of consumers is willing to pay more for fast and convenient delivery.This is especiallysoforyoungandaffluentconsumers or for higher value items such as mobile phones.Premium services can be grouped as:On Demand,“Amazon Prime Now”typeservicesofferedbothby smaller local
214、companies such as Quriers,Goniec,or Sprinter as well as larger companies such as Deligoo or Xpress Couriers(now part of the Allegro Group).Food or grocery delivery companies such as Uber Eats,Glovo,Bolt or Wolt.Same day evening deliveries offeredbymostondemandplayers and some larger carriers.“Custom
215、er pull”premium time window services used for e-grocery,fresh delivery or“White gloves”(heavy and bulky,white goods)services such as thatofferedbyEuroRTVGroup,No Limit or Rhenus Logistics albeit the latter was mooted to have withdrawn from this market.We estimate the proportion of CEP parcels delive
216、red same day is only about 1-2%.Given the expected dynamic growth,this could increase to 5-8%of all deliveries by 2025.Amazon has played a key role in the promotion of same day delivery in Europe.Accordingly,their anticipated market entry is likely to increase usage of this service.Allegro,possibly
217、as a pre-emptive move,has sought to increase its capability for same day delivery,initially by acquiring Xpress Couriers and with same day locker-based services via InPost.One key use case for premium delivery carriers will be to support retailers needing a way to reach their clients who can no long
218、er visit stores.Theseplayersareeffectivelytech companies matching orders and crowdsourced couriers in real time.Key features of their models include:Integration with the retailers online store to give the consumer the same day option.Real time link to retailer inventory systemstoenablethemtoseeexact
219、ly what stock is in which locations.Aflexiblepoolofcourierswhoare generally sub-contractors or crowdsourced.Ability to match couriers to jobs in real time.“Uber-like”real time tracking offeringfullvisibilityfortheconsignee.Multi-modal delivery encompassing bicycles,cargo bikes,scooters,cars,vans.Bri
220、ck and mortar stores are able to use their retail outlets as“urban”stock locations which makes service levels and costs attractive for those with a large retail footprint.5MARKET TRENDS45Changing situation at Polish PostBrokers and consolidators67 Letter volumes continue to decrease while parcel vol
221、umes grow.Polish Posts overall revenues were 6,300 million in 2021 with a fall in mail revenuesoffsetbygrowthinparcelrevenues(ca.21%CEP share in total revenue).Matters are exacerbated by the fact that there have been several politically motivated changes in the Posts senior management which has resu
222、lted in an inherent fear of any major new decisions and a relatively inexperienced senior management team.Regulatory changes related to the ending of the EU de minimis for VAT on inbound items have reduced the inbound parcel volumes delivered by Polish Post.In particular,large volumes of small,low v
223、alue B2C parcels primarily from China now require VAT surcharges.The large Asian shippers have reacted with new supply chain models and clear DDP pricing for consignees.Carriers,other than InPost,have not generally been targeting the C2X segment despite the potential for significantlyhigheraveragere
224、venueper parcel due to a perceived higher cost to serve.The slack has been taken up by brokers who consolidate orders so astoofferattractivepricestosmallshippers while taking a small margin for themselves.Carriersbenefitbybeingabletoobtain volume while avoiding the costs of managing many small custo
225、mers.Customers appreciate the fact that they can see price comparisons,from which they can choose the best option.This segment is quite well-developed in Poland and the key players include Apaczka/Sendit,Furgonetka,KurJerzy,Pakersi,Allekurier,Epaka.Apaczka recently acquired Sendit and the fact that
226、there are many broker sites implies that there are low barriers to entry and we expect further consolidation here.MARKET TRENDS46C2C and Second Life8C2C is becoming the next big thing in Europe,courtesy of companies such as Vinted and,to a lesser degree,OLX.While volumes in Poland have still been fa
227、irly stagnant at around 7%,we expect growth here.ThisissignificantasC2C,morethananyothersegmentrequireslow-costOOHoptions including exchange services where a parcel may even be delivered to and collected from the same access point or locker.This same exchange service fitswellwithin-cardelivery(espec
228、iallyifenhancedwithacameraoption,foradded security).MARKET TRENDS47MARKET TRENDSEffects of the Russian Invasion of UkraineWith some 3 million Ukranian(temporary)immigrants in Poland,we expect the short term need for OOH services to grow even more as many of these people do not have a stable home add
229、ress or are not at home during standard delivery hours.AnylongertermeffectwillbedependentuponhowlongthewarinUkrainecontinues for and,as a consequence,how long these people stay in Poland.OneadditionaleffectisthereportedplanbyNovaPoshta,Ukrainesleadingcarrier,to enter the Polish market.Due to the cur
230、rent pro Ukranian sentiment in Poland,customs procedures are operatingonaveryflexiblebasisandwecanexpectanincreaseinparcelflowsbetween the two countries.Nova Poshta parcel locker Source:Nova Poshta.Poland has become a strategically important market for Ukraine,and we expect a significant increase in
231、 the volume of shipments between our countries.For this reason,Nova Poshta will do all that is possible to make its unparalleled Ukrainian network of 13,000 parcel lockers and 8,500 access points available with fast and reliable delivery for both Polish and Ukrainian customers.Oleksii Taranenko,Nova
232、 Poshta Chief Business Development Officer48MARKET TRENDSPoland-Parcels market forecastGDP forecast Poland economic growth was anticipated to recover to levels from the last few,pre COVID-19 years and to peak at over 5%in 2022.The war in Ukraine may,however,have serious and ongoing implications here
233、.As such,itishardtobeasconfidentaswe might otherwise have been and therefore its advisable to treat this forecasts with some reserve.We expect the rate of internet retail growth to increase post COVID-19 and following Amazon and Shopifys entry into the market.Source:mBankWhat will the new last mile
234、be like?APMs or PUDOs Smart locks enabling in-home/in-garage/in-fridge delivery AGVs&UAVs Crowdsourcing(Amazon Flex)Smart cities and the sharing economy On demand(Amazon Now)Grocery&fresh disruption ahead Technology will be key:IDM&AI White Gloves(Heavy&Bulky)3D printing(limited use cases for now)49
235、MARKET TRENDSVolume in million parcelsValue in bn PLNDespite slower CAGR than in the period up to 2019,we still anticipate rapid compounded annual growth rates of over 14%in the period until 2023.We still anticipate rapid compounded annual growth rates of almost 20%(value based)intheperiodto2023.Thi
236、scouldbepartlyduetoinflationarypressure.Source:Market data and LME estimations Source:Market data and LME estimations 50MARKET TRENDSMarket share by volume in 2021 Market share by value in 2021 InPost is the undisputed leader in volume terms and is now almost double the size of DPD,the former market
237、 leader.Together,these players make up some 2/3 of the market and have distanced all other players.There can be no doubt that InPosts rapid and consequent adoption of OOH and longstanding partnership with Allegro have been the foundation of its success.While InPosts lead appears less dramatic in val
238、ue terms,the fact that they have significantlylowervalueandsmall,buthighmarginOOHparcels,artificiallydepreciates the strength of their position.SignificantAPMinvestmentplansfromDHLandDPDmaychangethepicturein2024+,although this will be dependent upon the success of their strategy and its execution.So
239、urce:Market data and LME estimations Source:Market data and LME estimations 51MARKET TRENDSCompetitor Analysis Market share by volumeWithout a doubt the key winner in terms of share of volumes continues to be InPost,which is now almost double the size of the former market leader,DPD.Virtually everyo
240、ne else has lost share.202120202019Source:Market data and LME estimations 52MARKET TRENDSCompetitor Analysis Market share by volumeWe dont anticipate any major developments in 2023,with InPost maintaining its lead and only minor shifts in the shares of other players.This may change in 2024 challenge
241、rs,especially DPD and DHL are able to implement a successful OOH model or if Allegro and Cainiao are able to gain more traction for the networks.2023F2022FSource:Market data and LME estimations 53MARKET TRENDSCompetitor Analysis Market share by valueWithout a doubt the key winner in terms of share o
242、f revenue is InPost but because of International revenues and less OOH volume at DPD,the gap between the former market leader,DPD is only a few percentage points.Virtually everyone else has lost share.201920202021Source:Market data and LME estimations 54MARKET TRENDSCompetitor Analysis Market share
243、by valueAswiththevolumebasedforecast,wedontanticipateanysignificantchangesinshare in 2023.2023F2022FSource:Market data and LME estimations 55Receipents in million parcels We estimate that the Polish parcels market will reach a market value of PLN 19.9bn and market volume of 1.33bn parcels in 2023,wi
244、th B2C clearly the largest segment of the market.B2C parcel growth will reach 77.4%by 2023 by volume.MARKET TRENDSSource:Market data and LME estimations 56To receive the full(paid)version of the report,please contact us by writing to:The full version of the report is more detailed and includes marke
245、t shares by volume and revenue,with a split for the 8 major KEP operators in Poland followed by historical and forecasted market shares of each distribution channels B2B,B2C,C2X,as well as domestic,international,and economy,express from 2019-2023.The full report also contains descriptions of upcomin
246、g changes in postal regulations and in addition a breakdown of the 10 European countries with the most OOH points.Recipients by volume shareWecanobserveaclear“Pacmaneffect”absorptionoftheB2BsegmentbyB2C.For several years,a gradual increase in the share of B2C shipments in the CEP market at the expen
247、se of the B2B segment has been observed(since 2017,B2C has a higher share than B2B).Driven by e-commerce,B2C is outgrowing all segments from an already strong base in 2018.It now represents over 3/4(together with C2X,over 4/5)of the market volume and,can be expected to grow further,albeit at a slowe
248、r parcel.C2X continues to grow in nominal terms largely due to Vinted or OLX but,unlike in places such as France,is unable to keep up with B2C growth.The share of B2C in volume terms is greater than B2B in value terms due to cheaper shipments(lighter,with fewer additional services).MARKET TRENDSSour
249、ce:Market data and LME estimations 2022F57Channels in million parcelsWe predict that in 2022,D2D will cease to account for more than 50%of all parcels in Poland and that this trend will not be reversed.While it is hard to make longtermpredictions,weassumethatwiththesignificantcoverageofOOHpoints in
250、Poland,we can expect that by 2025 OOH will represent over 60%of all parcels.MARKET TRENDSSource:Market data and LME estimations 58Channels by volume shareHereweseeareversed“Pacmaneffect”gradualabsorptionoftheD2Dsegment by pick-up and delivery to points(D2P,P2D,P2P).The popularity of the OOH delivery
251、 services(PUDO and parcel lockers)is growing year on year,which is why operators are constantly expanding their OOH networks.D2D is becoming less dominant moving from over 70%share to a forecast of 50%in 2023 and,as per our comment in the previous chart can be expected to continue to decline in impo
252、rtance.MARKET TRENDSSource:Market data and LME estimations 2022FVinted Go parcel locker in Paris”Source:Bloq.it 59Destination by volume in million parcelsDestination by value in bn PLNInternational volumes are relatively stable in percentage terms but their importance may grow if cross-border e-comm
253、erce develops.MARKET TRENDSSource:Market data and LME estimations Source:Market data and LME estimations 60International parcels by product in mln parcelsInternational parcels by product in million PLN The share of international express remains relatively small,and while stable,is unlikely to ever r
254、eturn to pre 2009 crisis levels.The share of international express by value,is larger due to the relative cost of express shipments.MARKET TRENDSSource:Market data and LME estimations Source:Market data and LME estimations 61Poland is one of the most dynamic CEP markets in the European Union and has
255、 been named“lockerland”by LME due to its dominant position in the European APM space.It is not only fast growing but has seen a dramatic change in fortunes of the main incumbents with InPost emerging as a dominant market leader,now both in volumes and revenue.All of the integrators(DHL,FedEX and UPS
256、)and the two pan-European CEP players(DPD and GLS)are present in Poland as well as,several e-commerce or retail-based challengers such as Amazon,Cainiao,Allegro(Logistics),Shopee,abkaand,eventhePolishPetroleum giant,Orlen.The Polish Post seems to have lost its way and is now unlikely to regain its o
257、nce dominant position in the B2C arena.The Russian invasion of Ukraine has brought some 3 million Ukranian refugees which can have a meaningful impact on the market and may,in time,bring the currently reported entry of Ukraines leading CEP player Nova Poshta.OOH will continue to grow and we predict
258、that by 2025,this will make up over 60%of all parcel volumes.Finally,we can expect increased EU and local government pressure on findingmoreecologicallyeffectiveand(especially in the light of the current energycrisis)energyeffectivelastmilesolutions.CLOSING COMMENTSCONCLUDING THOUGHTS62 It is not po
259、ssible to state exact revenues for all companies CEP activity.Some of the companies involved in CEP also have other logistics activities and do not clearly delineate data.Wherever required,LME has estimated parcel revenues or volumes.Data has been obtained from publicly and commercially available so
260、urces.The data published represents the latest information available from these sources at the time we carried out our research.Market size estimates are based on a methodology which uses a number of data inputs and assumptions.Thefirst,andmostimportant,isthat company revenues are the best indicator
261、 of market size.LME has reviewed company accounts results(revenuesandprofitwhereavailable).Moreover,we have conducted over 20 interviews(CEOs,senior-level CEP and e-commerce executives,experts,retailers)to develop our core,base data.We have used LME own market“know-how”and expectations for future de
262、velopments.This has been supplemented by government-collected statistics and UKE(regulatory)data as well as expert interviews and our own “in-house expert team”.For the purpose of preparing the presented forecasts,we have analysed historical data(2015-2021),forecasts prepared by CEP operators,consul
263、ting companies and macroeconomic indicators(GDP,inflation,exports,labourcosts),trends,announced changes and industry forecasts(e.g.for e-commerce).LME then reviewed anddiscussedtheeffectsoftheabove changes so as to come to the most realistic forecast for 2022-2023.We can produce bespoke,more detaile
264、d reports if needed.If this is of interest,please contact to get more information.To receive the full(paid)version of the report,please contact us by writing to: The full version of the report is more detailed and includes market shares by volume and revenue,with a split for the 8 major CEP operator
265、s in Poland followed by historical and forecasted market shares of each distribution channels B2B,B2C,C2X,as well as domestic,international,and economy,express from 2019-2023.The full report also contains descriptions of upcoming changes in postal regulations and in addition a breakdown of the 10 Eu
266、ropean countries with the most OOH points.CLOSING COMMENTSNOTES TO THE REPORT63 LME takes no responsibility for any incorrect information supplied to us by external parties.Quantitative marketinformationisbasedarangeof sources and assumptions and is madeonareasonableeffortsbasis.LME reports are publ
267、ications containing valuable market information.Our clients acknowledgethatanypaidornonpublic reports are not for publication or disclosure to third parties.No part of any LME paid report may be shared,lent,resold,or disclosed to third parties without our written permission.Third parties include,oth
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269、LME.LME paid report license conditions:This is intended for use within the sameorganisation.Saving a copy to a network drive,transmission by email,sharing with advisers,clients,sub-contractors or any other party would represent a breach of copyright and is not permitted.Quotation of short sections f
270、rom the document is permitted as longasthespecificreportandauthor is quoted as being the source.CLOSING COMMENTSTERMS AND CONDITIONS64LAST MILE EXPERTS GROUPA specialist data research and AI team,conducting analysis and predictions of CEP developmentLeading commentators in and around the last mile spaceWhether it is software or automation and operational systemswehelpyoufindandimplement the best solutionsWehelpyouraisefinanceorsell your last mile business65https:/ Mile Experts Sp.z o.o.Ul.Kiedacza 8aWarszawa,PMarekRyckiMirek Gral