The Federal Logistics Association (BVL), together with the consulting firm PwC, provided an extended commentary on the Q4 logistics index for the first time, as the survey results surprised even the experts.
‘The improvement in the business climate according to the BVL Logistics Index may come as a surprise, given the continuous negative news from the world of business and politics,’ said Peter Kauschke, Head of Transport, Logistics, and Mobility at PwC Germany.
For the study, numerous interviews were conducted with members of BVL’s advisory board and management. Logistics managers from retail, logistics, IT services, and other sectors of German industry were surveyed.
Logistics looks to the future with greater confidence
The results show that business expectations are rising and clearly diverging from the current poor business situation.
The positioning of logistics service providers and their industry and trade customers remains difficult. The index fell slightly in 2024, stabilizing at a low level of around 83 index points in the last quarter (in 2015, the base year, the index value was 100). This development continues the downward trend observed over the past three years.
On the other hand, companies’ expectations have steadily improved throughout the year. With an increase from 80.2 index points in January to 88.6 in November, the value of the business expectations index is now consistently above the value for the business situation. The overall business climate, therefore, shows a slight upward trend.
How can these changes be explained?
“A closer look at industrial, commercial, and logistics services shows that many companies are already adapting to the new normal, characterized by geopolitical uncertainty, unstable markets, and a weak economy. This explains why logistics is once again looking to the future with more confidence—despite these times of crisis,” Kauschke explains.
However, the decline in industry, trade, and logistics services continues. Both suppliers and users of logistics services still perceive the current situation of German companies as very difficult. This assessment is reflected in the business climate index, which has reached its lowest level since mid-2020.
The reasons for this are complex. In particular, the low level of orders and the decline in demand from China are exacerbating the current mood and posing challenges, especially for manufacturing companies in Germany.
‘The situation in the logistics sector remains difficult,’ concludes Christoph Meyer, Managing Director of BVL.
“After several crises in recent years, it is evident that most companies have adapted to the volatile situation and have generally become more resilient. This allows current and future crises to be better managed and no longer perceived as existential threats.”
“For the situation to truly improve, we need favorable conditions in Germany so that logistics can continue to function effectively. The greatest uncertainty remains the geopolitical situation. Will we see stability in the Middle East and Ukraine, or further escalation? Logistics companies should keep this in mind,” Meyer adds.
Recommendations for businesses
Thomas Schnur, Head of Logistics, Strategy, and Transformation at PwC Germany, recommends that companies “assess possible alternative courses of action based on scenarios in selected dimensions.”
In his view, businesses should consider three scenarios in particular:
- Geopolitical escalation versus conflict easing, especially regarding current events in the Middle East, Ukraine, and Taiwan.
- Extensive or less extensive trade barriers imposed by the new U.S. administration.
- Effective or less effective domestic investment incentives from the new German federal government.