Understanding the evolving delivery landscape in Germany

The logistics and delivery industry in Germany is constantly adapting to meet consumer demands and leverage technological innovations. From dominant carriers like DHL to the rise of poodle points and AI integration, the German delivery sector reflects a mix of traditional approaches and forward-thinking trends. This post explores insights shared by logistics expert Fabian Riegel during a recent discussion, shedding light on key trends shaping this market and what they mean for businesses and consumers alike.

Understanding the evolving delivery landscape in Germany

The logistics and delivery industry in Germany is constantly adapting to meet consumer demands and leverage technological innovations. From dominant carriers like DHL to the rise of poodle points and AI integration, the German delivery sector reflects a mix of traditional approaches and forward-thinking trends. This post explores insights shared by logistics expert Fabian Riegel during a recent discussion, shedding light on key trends shaping this market and what they mean for businesses and consumers alike.

Dominating carriers in Germany's delivery market

When it comes to parcel delivery in Germany, a few key players dominate the landscape. DHL leads the market with an impressive 70% share of B2C e-commerce volumes, owing in part to its legacy as a former state-owned monopoly. Other major carriers like Hermes, GLS, and DPD contribute to the ecosystem, though they cater to more niche segments. For example, DPD is refocusing its efforts on B2B shipments after experimenting with B2C deliveries, while UPS and FedEx are commonly associated with specialized or high-value goods.

Interestingly, Germany's logistics landscape also includes a large network of carriers catering to full-truckload and freight-heavy deliveries, such as DB Schenker and Dachser, demonstrating the diversity within the broader logistics sector.

Key takeaway:

Businesses looking to enter the German market should assess how these carriers align with their delivery needs, focusing on factors like specialization (e.g., B2B vs. B2C) and cost structures.

The growth of PUDO points

PUDO points, also known as pick-up/drop-off points are gaining traction as an alternative to traditional home deliveries. Leading the charge is DHL, whose Packstation network has expanded steadily in recent years. These automated locker systems, alongside DHL’s post offices and other PUDO options, have transformed last-mile delivery.

Companies like Hermes, DPD, and UPS also offer their variations of pick-up points. While Amazon operates its own locker network, its growth in Germany has been relatively slower compared to other markets. Fabian noted that, despite a slow rollout in the beginning, DHL appears to be accelerating improvements in its Packstation infrastructure, motivated by cost efficiency and growing consumer demand for locker-based deliveries.

Emerging challenges and opportunities:

• Pricing incentives: Fabian mentioned that DHL is now incentivizing retailers to incorporate PUDO deliveries by offering better pricing compared to home deliveries.
• Consumer behavior: There’s a noticeable shift towards PUDO options, especially as convenience and cost-saving measures become more appealing to modern shoppers.

Retailers incorporating PUDO in their delivery strategies can potentially improve margins while offering a service that aligns with consumer expectations.

The role of AI in logistics

AI is fast becoming a buzzword in logistics, though its adoption is still in the early stages. Fabian highlighted one of the most promising applications of AI—enhancing carrier tracking processes. The complexity of harmonizing data from different carriers is a challenge across the globe. DHL, DPD, Hermes, and others output tracking updates in various formats, making it difficult to create a streamlined system.

By using AI-driven solutions to standardize and harmonize this tracking data, businesses can improve both forecasting and proactive communications with customers. For example, an AI-enabled system could predict delays in the last mile and alert consumers immediately, improving their overall experience.

AI benefits for retailers:

• Improved forecasting: Businesses can use AI to predict logistical bottlenecks, especially during peak seasons.
• Proactive communication: Retailers can elevate customer satisfaction by adopting transparent, real-time communication powered by AI insights.

For businesses aiming to stay competitive, investing in AI-driven logistics solutions could provide a critical edge in a crowded market.

Returns management in the German market

Returns are a major pain point in the e-commerce sector, with return rates in Germany reaching up to 50% in some industries. Historically, German retailers have relied on physical return labels included in parcels—a practice that is slowly evolving. Fabian noted that sustainability may not be the main driver behind this shift; instead, the real motivation lies in data.

By digitizing the returns process, retailers gain greater visibility into what items will be returned, when, and in what condition. This data helps streamline warehouse operations, allowing businesses to resell items more efficiently and minimize stock-related costs.

Balancing consumer expectations:

While many customers now appreciate digital returns options like QR codes, older demographics still expect traditional physical return slips. Fabian highlighted the need for businesses to balance these preferences while pursuing operational benefits such as:

• Faster resale cycles: Knowing which items are being returned allows retailers to list products back on their platforms sooner.
• Cost-efficiency: Reduced material waste and optimized internal processes.

Zalando, for example, serves as a case study in this transition, offering both physical and digital methods to accommodate diverse customer preferences.

The overlooked opportunity: Invoice accuracy

One of the most surprising insights Fabian shared was the widespread neglect of carrier invoice auditing. With carriers like DHL and DPD issuing complex, large-scale invoices, retailers often fail to verify billing accuracy. This oversight can lead to significant losses.

For instance, a parcel billed at €5.50 instead of the correct €5 adds up over thousands of shipments. By implementing software to review and reconcile invoices, businesses can identify discrepancies, potentially saving significant sums. Fabian noted that companies working with modern logistics tools have uncovered average savings of around 5% simply by catching these errors.

Actionable tips:

• Invest in logistics software that includes billing reconciliation functionality.
• Periodically audit carrier invoices for discrepancies.

By taking a proactive approach to invoice management, businesses can effectively reduce costs without renegotiating contracts.

Final thoughts

Germany’s delivery market remains a dynamic space shaped by shifts in consumer preferences, technological advancements, and operational priorities. From the dominance of DHL to the increasing popularity of PUDO points, the industry demonstrates its adaptability in meeting evolving demands. At the same time, innovations in AI and returns management present exciting opportunities for both retailers and logistics companies to enhance efficiency and customer satisfaction.

Businesses looking to succeed in Germany should consider leveraging these trends while keeping a close eye on overlooked aspects like invoice auditing. By doing so, they can position themselves for sustainable growth in an increasingly competitive market.

Actionable next steps for retailers and logistics teams:

• Evaluate your delivery strategy: Assess whether PUDO options could benefit your business and reduce delivery costs.
• Consider AI investments: Look into software that harmonizes logistics data, enhancing forecasting and customer communication.
• Digitalize returns management: Streamline returns to gain data-driven insights and speed up resale cycles.
• Audit your logistics costs: Take the time to review carrier invoices regularly and invest in automated tools for accuracy.

By staying ahead of these trends and adopting best practices, businesses can strengthen their foothold in Germany’s delivery space while improving operational efficiency and customer experience.

Optimize your delivery operations

Looking to stay ahead in the ever evolving delivery landscape? The nShift platform supports businesses in optimizing delivery management, cutting operational costs, and driving efficiency at scale. Book a tailored consultation to see how the nShift platform can help you navigate market trends, streamline your logistics, and deliver a better experience for your customers.

Further reading: Last mile FAQs

What is a last mile tracking number?

A last mile tracking number is a unique identifier assigned to a shipment during the final leg of its delivery journey, from the local distribution point to the customer’s doorstep. It enables real-time status updates and ensures customers can track the exact progress of their deliveries.

How to solve the last mile problem in logistics?

Solving the last mile challenge involves optimizing routes, leveraging local delivery partners, and integrating advanced technology like AI for dynamic routing and real-time updates. Using PUDO points can also reduce failed deliveries and control costs, increasing both efficiency and customer satisfaction.

What is first mile and last mile in logistics?

The first mile refers to the initial movement of goods from the sender (often a manufacturer or retailer) to a central hub or distribution center. The last mile covers the final delivery step, bringing the shipment from this hub directly to the end customer. Both stages are critical for operational efficiency, cost control, and delivering a seamless customer experience.

How do I track my last mile delivery?

Most carriers provide a last mile tracking option through their platforms or partner integrations. Enter your tracking number on the carrier’s website or app to receive real-time updates on your parcel’s status. Many services also send proactive notifications to keep you informed until your shipment arrives.