The German express and parcel market has seen growth drop back sharply in recent months due to thefinancial crisis and economic slowdown, and only low growth is now expected in 2009, according to
an in-depth new study presented today.Europe’s largest CEP market grew by 10% to revenues of €13.9 billion in 2007 and volumesincreased by 5.3% to 2.23 billion, the latest annual survey by the International Express andCourier Association (BIEK) showed.
“This trend continued through the first half of 2008 but in the second half-year it was clearthat demand was falling strongly,” commented BIEK president Gunnar Uldall at a media presentationin Berlin. This reinforced the role of the CEP sector as an early economic indicator, he noted.
As a result of the drop in demand, the German market will probably slow to about 2%-3% growthin revenue terms this year, and then grow only about 1%-2% in 2009, Uldall said. Low growth ratesover the following few years would mean the German market would grow to about €15 billion in 2012,he added. Low volume growth is also expected.
“The long-term expected growth rate of up to 2% a year despite the financial crisis liesabove the overall GDP growth rate,” Uldall stressed. “The key role of this industry for the Germaneconomy is thus confirmed. Although the high increases of 5% annual growth in recent years willhardly be achievable in the short term, cautious optimism is justifiable in view of the continuingtrend to international production,” he stated.
Future growth would be generated by the continuing increase in cross-border shipments,especially to and from Central and Eastern Europe, as well as from higher-margin value-addedservices, Uldall predicted. Changes in industrial production might also benefit the sector bygenerating more volumes of small shipments rather than large freight loads.
Nevertheless, CEP operators faced higher costs, including a forthcoming increase in motorwayusage charges, and would have to decide whether to seek price increases, the BIEK president said.DHL Express Germany is planning to increase rates by 3% on December 1 to compensate for higheroperating costs.
To promote more sustainable transport modes, the express and parcels sector is open to talkswith Deutsche Bahn about using rail services as an alternative to road transportation forlong-distance north-south and east-west routes, Uldall also said.
At a political level, the association, representing the major private CEP players (but notDHL), reiterated its long-standing criticism of Deutsche Post’s VAT exemption and called on theGerman parliament to support two recent Upper House recommendations for changes to a draft lawreforming postal VAT regulations.
Under the government’s draft law, Deutsche Post would lose its VAT exemption for parcels over10kg but retain it for private letters and small parcels. In return, private postal competitorswould gain VAT exemption for mail and small parcels if they can show that they offer a nationwidemail and parcel service.
The German upper house has proposed splitting this requirement into mail or parcel services,so that CEP operators offering a nationwide parcel service but not mail delivery will also beentitled to VAT exemption. It also proposed introducing the reform on May 1, 2009, rather than onJanuary 1, 2010, as planned by the German government. The draft law is due to be considered byParliamentary committees early next year.
