Parcel lockers are becoming an integral part of the last mile logistics ecosystem in Europe, offering convenience to consumers and efficiency to carriers. Germany can proudly claim to have pioneered this innovation with the invention of the “Packstation” by Deutsche Post DHL in the early 2000s. However, despite this head start, Poland currently boasts more than double the number of parcel lockers for a population less than half the size of Germany’s.
According to 2022 data from the 2023 Out Of Home Delivery In Europe Report by Last Mile Experts, Poland boasts an impressive 28,800 parcel lockers, while Germany falls significantly behind with 13,450 lockers.
Why is this the case? To find out, we spoke to Marek Rozycki and Gary Winter, two last mile experts who offer their industry thoughts and analysis via the popular YouTube channel Last Mile Prophets.
Marek Rozycki, Managing Partner of Last Mile Experts, who has extensive experience in the logistics industry, including a role as Vice President for Amazon Logistics Europe and CEO for Central & South Eastern Europe at GeoPost, points out that despite its economic strength, Germany lags behind Poland in terms of locker numbers relative to the size of the country and population.
“What’s quite interesting is that Germany has had parcel lockers for longer than anyone, but actually, in terms of numbers and coverage relative to the size of the country and population, it’s significantly behind Poland despite it being stronger economically,” says Marek.
Gary Winter, Quadient’s VP of Global Strategic Initiatives for Parcel Locker Solutions, who previously lead the development of Paypoint’s Collect+ PUDO network, explains that the reason for this is actually relatively simple:
“The really pragmatic reason for this is that after Deutsche Post DHL and Keba effectively invented the smart parcel locker, they shrouded it in a world of patents. So there is a whole portfolio of fairly broad patents owned by DHL that have protected them from competitors. That’s why you’ve got this huge network that’s privately run and owned by the DHL group, and there’s very little activity from anybody else up to this point.”
Other difficulties highlighted by Gary include location hunting and navigating significant amounts of bureaucracy. “I don’t think it’s a simple market at all,” stresses Gary.
The good news, as Gary notes, is that many of these patents have now expired, which has coincided with increased activity in the German market.
Despite this, the question remains: will Germany’s parcel locker network start to look like in Poland, where one dominant player emerges and then everybody else follows suit by having their own locker solution?
Poland, like Germany, already has a clear market leader in the shape of InPost. However, InPost does have a host of competitors with their own parcel locker networks, including Orlen Paczka, Allegro, DHL, DPD and others. What’s interesting here is that these companies all seem to be flying solo in their efforts to take on InPost.
There is an argument, therefore, that these players should cooperate to share capacity and boost the size and efficiency of their networks. The same could be said about the German parcel delivery companies trying to challenge Deutsche Post & DHL.
“We know that the appetite for lockers from the German public is definitely there. The German public are very accomplished and experienced users of lockers, which perform a big part of the out-of-home delivery experience for Deutsche Post and DHL deliveries. The other carriers must be looking at that and thinking they want to do the same. If you take the next big 4 or 5 big carriers combined, they look about the same size as DHL. Could they do something jointly together?” asks Gary.
Marek Rozycki believes that for anyone to be able to challenge Deutsche Post effectively, they will indeed need to embrace cooperation with other market players.
“The big question with regards to Germany is whether the other players can take a step back, forget about their pride and other issues, and agree that the only way they can challenge Deutsche Post is by standing together. I think Deutsche Post has about 10-12,000 machines in place at the moment. I think they will prioritise expanding this to around 15,000. If this happens, nobody individually, whether it’s DPD, Hermes or GLS, is going to be able to do that in a hurry. On the other hand, if they all get together, there’s a chance,” says Marek.
Another player emerging in the German market is the startup MyFlexbox, as Gary explains:
“There’s MyFlexbox too, who’ve got their first bunch of lockers on the ground. They have GLS as their first carrier, and have raised 75 million euros to fund locker network expansion in the German speaking countries. So there’s some serious money being made available to expand there.”
However, Marek is adamant that MyFlexbox will also need to collaborate with more players if they want to make significant strides in the near future:
“Somebody independent like MyFlexBox will have to bring together several competing operators, because otherwise directly challenging Deutsche Post isn’t going to happen in a hurry. And I haven’t seen anything that suggests there is something that is on the cards imminently,” concludes Marek.
What are the chances of this parcel delivery ‘coopetition’ happening in Germany? At present, it’s difficult to say.
However, Gary notes that there is at least one significant precedent for cooperation in the German parcel delivery market:
“The 4 or 5 big carriers do actually share a common returns label format, and a common set of returns tracking numbers. So if you get a return label, you can stick it on your parcel, and the customer can choose where to drop it off. That means customers can go to a Hermes parcel shop, a post office, or even a DHL locker to drop off a return. I’ve not come across another market that has a similar process and I found it quite fascinating. So maybe that does suggest there’s a way forward to do something jointly.”