Report

The Germany Last Mile Delivery Market size is estimated at USD 30.01 billion in 2025, and is expected to reach USD 37.77 billion by 2030, at a CAGR of 4.71% during the forecast period (2025-2030).

The mile delivery market is driven by several factors, including the development of the e-commerce sector and the rise in trading activities due to globalization, technological innovations in delivery vehicles, and the need for fast package delivery.

However, poor infrastructure, high logistics costs, a lack of control over logistics services by manufacturers and retailers, and an inaccurate postal address system will impede the market growth. Since the implementation of the directive to restrict social activities and non-essential commercial activities in Germany, freight transport by rail and road has decreased by approximately 20%.

The majority of online retailers were also affected by COVID-19. According to Deutsche Post, a daily average of 5.2 million parcels are usually delivered. Deutsche Post reported that during the lockdowns, more than 8 million packages and deliveries were transported daily. The coronavirus crisis has led to an increase in the demand for storage space in the country, which is not unexpected.

Germany has seen unprecedented growth in e-commerce, as has almost every country in the world. In parallel with the growth of e-commerce, nationwide out-of-the-home delivery options such as parcel lockers and parcel collection stations have become increasingly popular. Deutsche Post, for example, currently operates about 8500 automated parcel machines, that increased to 12,500 machines in 2023.

For instance, in June 2023, DODO, the same-day delivery service provider, expanded its operations into the German market, reinforcing the long-term viability of same-day, last-mile delivery. DODO has developed a comprehensive software and delivery ecosystem over the years to support players across a variety of industries. This ecosystem is further supported by the company's white-label solution, which allows direct integration into the company's IT structure. DODO currently employs more than 2500 couriers and 1,000 vehicles.

Germany Last Mile Delivery Market Trends

Growth in E-commerce is Driving the Market

The e-commerce platform market in Germany is mainly driven by the high internet penetration in the region and the growing use of smart devices. With increasing urbanization, many traditional businesses are turning to e-commerce platforms to increase the number of customers and market share, reduce overhead expenses, and increase the sales of their products.

Germany boasts one of Europe's largest e-commerce markets, surpassing the regional average in key metrics like the number of e-commerce consumers, internet penetration, and annual spending. In 2022, the country's e-commerce sales hit an estimated USD 141.2 billion, marking an 11% increase from the previous year.

Forecasts suggest that Germany's online population will grow from 62.4 million in 2020 to 68.4 million by 2025. Notably, smartphone penetration in the nation stands at 82%, complemented by a 53% social media penetration rate. Social media giants like Facebook, YouTube, and Instagram maintain their pivotal roles in the market. The robust growth in Germany's e-commerce sector is mirrored by a similarly positive trend in last-mile delivery services.

In Germany, the majority of online stores accept PayPal or credit cards as the payment method. Many websites also accept bank transfers. Most websites accept invoices/buy now and pay later, and online customers can cancel their orders within 14 days and return their goods or services for any reason or no reason at all. There are so many benefits offered by e-commerce companies that the e-commerce industry in the region will continue to expand over the next few years.

As of 2023, fashion makes up the biggest chunk of German e-commerce revenue (24.1%), followed by food and personal care (22.2%), furniture and appliances (20.2%), electronics and media (17.4%), and toys, and hobby and DIY (16.0%).

Government Investment in Transport Infrastructure Supports Last Mile Delivery

Last-mile delivery can be improved by investing in infrastructure that improves transportation networks, reduces congestion, and improves logistical efficiency. Upgraded roads, bridges, and ports will allow goods to be transported more quickly and efficiently, resulting in shorter delivery times. Smart traffic management systems (TMS) and dedicated delivery lanes can help reduce congestion and ensure timely deliveries. The digital infrastructure that supports real-time monitoring optimizes routes and improves communication between the delivery team and customers, improving last-mile delivery.

The expansion of the B247 became the largest infrastructure project in Northern Thuringia. The project consists of building two to four new lanes on a 22.2 km road section, including two new bypasses, 31 structures, including two bridges and five railway bridges, eight junctions, and around 6 km of additional state and federal roads. The works will be completed by mid-2025 by subsidiaries of the VINCI Group in Germany (Eurovia, VINCI Construction Terrassement, and Via Structure) in local partnership with Thuringian companies.

Over the next five years, the German government is set to prioritize transport and broadband infrastructure, alongside increased public investment and structural reforms. These initiatives aim to boost and sustain growth in the industry.

As part of the 2030 FTIP, Germany's federal government plans to invest a substantial USD 147.6 billion in the nation's roads, with an additional USD 74.4 billion earmarked for maintenance and infrastructure replacement.

Highlighting the urgency, Germany's road network has slipped to the 16th spot in the Global Competitiveness Report by the World Economic Forum. To address this, a significant investment of EUR 269.6 billion (USD 299.6 billion) is slated for Germany's transport infrastructure by 2030. Experts caution that without these investments, Germany risks lagging.

Currently, the public sector is set to finance 57.4% of the upcoming construction projects directly. Increased government spending on infrastructure is expected to bolster the economy and stimulate business investments.

While historically cautious about overspending, Germany is showing a more assertive stance. In 2024, the government's federal budget is a notable USD147.6 billion, a significant leap from the previous year's investment of just over EUR 66 billion (USD 79 billion) in 2016, spanning areas like roads, childcare facilities, and public transportation.

Germany Last Mile Delivery Industry Overview

Germany's Last Mile Delivery market is highly competitive as it is made up of a mix of international and domestic players. Some of Germany's leading players in the last-mile delivery market are DSV (Direktor von Schwerin), UPS (United Parcel Service) (UPS), DB Schwerin (Deutsche Post DHL), and FedEx (FedEx). Companies in the sector are focusing on growth through the integration of new technologies such as drones, e-vehicles, transport management systems (TMS), and artificial intelligence (AI). Germany's logistics players are struggling as labor costs are on the rise and labor availability is decreasing.

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- The market estimate (ME) sheet in Excel format
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