Central and Eastern Europe (Cee) Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

Central and Eastern Europe (Cee) Freight and Logistics Market - Growth, Trends, Covid-19 Impact, and Forecasts (2023 - 2028)

The Freight and Logistics Market In Central And Eastern Europe (CEE) is expected to witness a CAGR of more than 8% over the next five years. Eastern European countries, like Poland, the Czech Republic, Romania, Hungary, Bulgaria, and Slovakia, are among the fast-growing economies in Europe. Such strong economic performance is prompting countries in Eastern Europe to demand a greater say in the future of the European Union. With Germany dominating the logistics market, the eastern countries have to work a lot to increase their market share. In particular, Eastern European countries need to address issues such as poor infrastructure, political corruption, lack of competitiveness, staff shortages, etc.

• The logistics market in the region has been impacted due to COVID-19 restrictions with the decrease in volumes of freight transported. However, the demand has picked up, and with the growth in e-commerce, the market has recovered.
• The rapid growth in the e-commerce segment will support the growth of the logistics market in the region. While Germany and United Kingdom remain the top e-tailing markets in Europe, the fastest growth is expected to take place in Eastern Europe, with Poland leading the growth.
• Rapidly growing online sales, a large consumer market, access to a relatively cheap labor force, and an established logistics market make Poland an exceptionally attractive location for international e-tailers.
• Existing online retailers are likely to continually expand their warehouse space in the coming years, while new market players may search for suitable facilities and supply chain operators. Increasing demand for appropriate distribution space, as well as tailored logistics services, puts pressure on developers and 3PLs to adjust their offer to meet these new requirements.
• Despite the unstable environment, logistics operators have been clamping down cooperation year by year, offering a growing range of services with a modern technology and significant capacity.
• The logistics sector in Eastern Europe is a relatively young market. In Poland, there are more than 13.4 million sq. m of modern warehouses and the demand for warehouse space is growing gradually. Also driving this growth are the relatively cheap costs in CEE, which have attracted companies, such as Amazon (Slovakia) and Alibaba (Poland).

• The logistics sector is driven by the growing demand for logistics services, which is generated by the boom and evolution of e-commerce. Contrary to the basic assumption, Central and Eastern Europe (CEE) has seen robust growth in the industry and continues to dominate the European economy.
• The evolving e-commerce has put pressure on sales channels for faster delivery and an optimum supply chain. This scenario brings opportunities for third-party logistics and warehousing services. In the past, real estate and production were the factors driving CEE.
• Currently, e-commerce is in the same position, both in domestic, as well as foreign markets. Poland and the Czech Republic mainly export to the west. If firms cannot be located in United Kingdom, they need to be on the continent.
• CEE is currently preferred over its western counterparts. The e-commerce market in this region may be lagging behind other more mature European markets, but it is on its way to catching up over the next few years.
• Consumers are creating a rapidly growing demand for a multi-channel market for both products and services. Retailers, especially in the online food industry, are looking toward innovative e-logistics to help them grow in the future.
• TuSimple, a global self-driving technology company, has announced a partnership with Hegelmann Group, a leading European transportation and logistics provider with over 5,000 vehicles in operation.

• The Polish logistics market, the largest market in the Central and Eastern European region, has grown notably since the opening of its national borders. Poland is among the fastest-growing logistics markets in Europe due to its strong value proposition, proximity to Western Europe, and extensive transportation infrastructure.
• The logistics market has been developing at a double-digit pace for several years. Historically, the majority of warehouse space was located in the Warsaw area. However, regional markets have been growing more dynamically and account for over two-thirds of the current market.
• With around 12 million sq. m of modern logistics space across Poland, the majority of supply is concentrated in the five most-developed markets. Big-box logistics projects are generally located along motorways and exit roads outside of the administrative borders of the largest Polish cities, but there are also multiple projects within city borders, often for smaller occupiers, such as small business units (SBUs).
• With the ever-increasing cross-border trade, the country is also looking into the modernization of border infrastructure with the cooperation of the neighboring countries, as this is vital and supplements the growth of cross-border trade.
• Located at a strategic geographical location connecting Western Europe with Russia and China, the cross trade (international road transport between two different countries performed by a road motor vehicle registered in a third country) through the country is also very high.

The logistics market landscape of Central and Eastern Europe is fragmented in nature, with a mix of global and regional players. Many major Western European companies have factories in CEE because the cost of labor is low. It is known that Western Europe is home to some of the Global logistics giants. The aforementioned scenario has brought many western logistics players into the current market. Additionally, regional and global developers are adding new warehouses and distribution facilities. The facilities and infrastructure can be built and operated at less cost in countries like Poland or the Czech Republic and still serve markets of high-cost countries such as Germany, Switzerland, and France.

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