Online services and e-commerce are helping to shape the way the European logistics sector is developing – affecting everything from demand for warehouse and distribution space to the development of more complex distribution systems and technologies.
How is e-commerce affecting
European logistics? T
oday’s logistics market no longer sufficiently meets the complex demands of online retailers – that’s according to a recent report from PwC, ‘E-Shaping of the European Logistics Market’. The predominant reason for this is that the traditional logistics industry has up to now been geared towards handling large consignments primarily for the B2B sector.
Derek Bryan, VP EMEA
But the sector is changing. According to PWC, the European e-commerce market “is expected to expand amidst the further development of multi-channel selling offered by bricks-and-mortar retailers and the expansion of ‘pure play’ online stores.” While online purchases still account for only around 4 per cent of retail sales in the EU, e-commerce is one of the fastest growing markets. It recorded 18 per cent annual growth and was estimated to be worth €200 billion as far back as 2011, with around 70 per cent of this figure coming from the three European bighitters: Germany, the UK and France. That being said, in the years since there has been notable growth in the eastern European market as it is increasingly targeted by the large international players, and we can expect to see further development in these regions.
Increasingly complex demands All of the above has had – and will continue to have – a significant impact on the way the European logistics market is evolving. In 14 Industry Europe
particular, the growth of the online retail market has caused rapidly increasing demand for new warehouse and distribution space. As an example of this, online retail giant Amazon has increased its distribution space in Europe by more than 1000 per cent in the last 10 years. Furthermore, it has become apparent that e-tailers require more complex distribution systems than traditional logistics market players. One reason is that the e-commerce business is based on a Business to Consumer (B2C) model, meaning that at least one, if not several, steps have been eliminated from the supply chain, increasing the number of customers the e-tailer has to deal with directly. This also means working with multiple suppliers and distributing large quantities of goods with short delivery times. This growing business model has led to the many e-tailers establishing e-fulfillment centres which cover the whole supply chain, from sourcing products from suppliers to sorting, packaging, delivery and even managing returns.
