Expert’s comment

2024 in logistics was not just about meeting current demands but also about anticipating and preparing for future challenges. What is considered innovation today will soon become the standard – and the industry, which thrives on flexibility and swift action, is ready for it. I’m very curious to see what 2025 will bring to logistics, but before that, here’s my brief summary of the past year.

WAREHOUSE AND INDUSTRIAL REAL ESTATE IN 2024

Summary: The year 2024 in the Polish warehouse real estate market was marked by stabilization, a slowdown in rent growth, reduced developer activity, and increased demand, albeit largely based on lease renegotiations. Tenants are paying more attention to eco-friendly solutions, and the market is adapting to their needs.

• Market Stabilization: The Polish warehouse market entered a stabilization phase in 2024, characterized by reduced developer activity and a stronger focus on tenant-specific projects.
• Slower Rent Growth: Rent increases were significantly lower than in 2023, with some regions even recording decreases. Base rent levels remained stable, varying depending on location and property type.
• Decline in Developer Activity: Developer activity reached 2.1 million sqm in the first three quarters of 2024, a 33% decrease compared to the previous year. The volume of new project launches also declined.
• Gross Demand Growth: Gross demand for production and logistics space in Poland reached 3.8 million sqm in Q1-Q3 2024, a 2.5% year-over-year increase. However, a significant portion of this demand came from lease renegotiations.
• Dominance of New Leases and Expansions: New leases and expansions accounted for 61% of all transactions.
• Highest Demand Regions: The Mazowieckie, Dolnośląskie, and Łódzkie provinces recorded the highest demand for warehouse space.
• Vacancy Rates: A slight compression in vacancy rates was noted. By September 2024, modern warehouse space in Poland reached 34 million sqm.
• Space Under Construction: At the end of H1 2024, nearly 2 million sqm of warehouse space was under construction, with 1.9 million sqm in Q3 alone.
• Ample Supply: With 1.4 million sqm delivered in H1, the total warehouse supply reached 32.3 million sqm.
• Increased ESG Focus: Tenants are increasingly considering ESG (Environmental, Social, and Governance) factors, especially building energy efficiency. Developers are certifying properties under the BREEAM system.
• Preference for Existing Locations: Due to costs and employment challenges, tenants prefer staying in their current locations.
• Nearshoring and Reshoring Trends: Nearshoring and reshoring – relocating production closer to suppliers and markets – continued to gain momentum.

TECHNOLOGY TRENDS IN WAREHOUSING AND LOGISTICS IN 2024

2024 was a year of dynamic technological advancements in warehousing and logistics, emphasizing automation, artificial intelligence, and sustainability. Companies increasingly invested in innovative solutions to boost efficiency, reduce costs, and enhance customer service.

Automation and Robotics:

Deployment of autonomous robots like Exotec’s Skypod for transporting goods between shelves and picking stations, as seen at ILS’s Zakroczym logistics center with over 200 robots.

Humanoid robots for diverse warehouse tasks, such as product handling, exemplified by GXO Logistics’ use of Reflex robots.

Robotic arms, like Arvato’s AI-powered “Leleka,” for automating picking and sorting, especially in the fashion industry.

Automated pallet transport systems to streamline goods flow, reduce forklift movement, and minimize noise, e.g., in Maspex’s Tymbark logistics complex.

Fully automated distribution centers incorporating AI and machine learning, like Auchan’s planned collaboration with Ocado.

AI and Machine Learning (ML):

Supply chain optimization through data analysis, demand forecasting, and inventory management.

AI systems predicting failures and optimizing routes, as utilized by Maersk.

AI-assisted customs transactions via platforms providing formalities, requirements, and cost estimates, e.g., DHL Express’s MyGTS.

Personalized e-commerce shopping experiences with intelligent AI-based recommendations, employed by Auchan.

Generative AI for scenario modeling, demand forecasting, and disruption management.

AI-based inventory management systems that help reduce food waste, as implemented by the Netto chain.

IT Systems and Platforms:

Integrated information hubs for better supply chain visibility and responsiveness.

Customer self-service platforms for international shipments, tracking, and cost estimation, such as DHL Express’s ShipNow.

AI-powered supply chain management platforms like RELEX Solutions, adopted by Auchan for demand planning and resource allocation.

Cyfryzacja procesów i wdrożenie oprogramowania do zarządzania dostawami i optymalizacji logistyki ostatniej mili.

Mobile Technologies:

Autonomous mobile robots (AMR) in warehouses, like DB Schenker’s deployment of over 100 units in Rudna.

Pick-to-light systems supporting order picking processes.

Sustainability and Ecology:

Route optimization to reduce CO2 emissions through better order management.

Food waste reduction via precise forecasting and inventory management.

Environmental certifications like BREEAM for eco-friendly warehouse buildings.

Automated packaging systems reducing material usage.

Other trends:

Dynamic demand forecasting is becoming crucial for companies, leveraging AI, IoT, and machine learning to analyze real-time data.

Increased transparency in costs and customs fees for customers, especially in e-commerce, which enhances trust.

CHALLENGES AND CRISES IN 2024

2024 presented numerous challenges for supply chains, including disruptions in rail, sea, and air transport, protests, and system failures.

• Rail Strikes: Strikes by the German GDL union caused significant disruptions in passenger and freight transport, forcing Deutsche Bahn to implement emergency schedules.
• Red Sea Crisis: Houthi attacks on commercial vessels disrupted shipping routes, forcing companies like CMA CGM and Maersk to reroute around Africa, increasing costs and delivery times.
• Lufthansa Strikes: Ground staff strikes affected over 100,000 passengers and disrupted Lufthansa operations.
• Farmer and Transport Protests:: Nationwide farmer protests, blocking roads, extended to the transportation sector. Carriers joined the blockades, demanding, among other things, the introduction of minimum rates for transport services. Farmer protests in several EU countries, including France and Germany, caused disruptions to road transport and left drivers stranded in parking areas.
• Windows System Outage: A global failure of the Windows operating system, caused by a software update error, disrupted operations at many airports worldwide. This led to the cancellation of approximately 1,400 flights. In Poland, issues were reported at airports in Poznań, Kraków, Warsaw, Wrocław, and Gdańsk, among others.
• Border Controls: Several European countries, including Austria, France, and Denmark, have extended border controls within the Schengen area. These controls are causing disruptions in road transport and delays in deliveries.
• Polish Post Struggles: Poczta Polska faced massive financial losses, resulting in the suspension of spending, investments, employee recruitment, and salary increases. The company plans to sell off properties.
• Everli’s Exit: Everli ceased operations in Poland after pioneering online shopping for Biedronka and Lidl.

LOGISTICS BUSINESS DEVELOPMENT 2024

The following events and trends illustrate that 2024 was a year of dynamic changes and development in the logistics industry, focusing on innovation, automation, expansion into new markets, sustainability, and adaptation to changing market conditions and geopolitical challenges.

• Optimism Growth in the Logistics and Supply Chain Sector: The optimism index in this sector reached its highest level in five years at 52.2. The improved sentiment is linked to easing economic pressures, lower inflation, and positive GDP performance.
• Improved Business Conditions: Nearly 6 out of 10 industry representatives rate current business conditions as better or the same as the previous year. The significance of employees’ skills in Poland compared to the EU has also increased.
• Increased Demand for Warehouse Space: 56% of companies reported increased demand for logistics space in 2024, driven by the dynamic growth of e-commerce and the need for larger inventories.
• Growing Importance of Transport Capacity and Warehouse Space: Transport capacity was cited as the factor most positively impacting company performance (39%), followed by the size of warehouse space.
• Negative Industry Factors: Rising fuel and energy prices, along with higher labor costs, were highlighted as the main negative factors.
• Transformation of Poczta Polska: Poczta Polska received funding and began a transformation plan, including IT modernization, employment optimization, and converting branches into retail outlets. A Voluntary Departure Plan for administrative employees was also introduced.
• Allegro’s Partnerships with Logistics Companies: Allegro expanded its partnership with Orlen, enabling deliveries to Orlen Paczka points. Additionally, it partnered with DHL to integrate DHL Box parcel lockers, DHL POP pickup points, and DHL courier services into the Allegro Delivery program.

Expansion of Parcel Locker Networks:

Biedronka started building a network of parcel lockers near its stores..

DPD Poland operates 9,000 parcel lockers.

Orlen Paczka increased its locker network to over 4,500 units.

• New Pickup Formats: DPD launched Poland’s first DPD Pickup Drive, allowing parcel collection and drop-off without leaving the car.
• InPost Acquisitions: InPost acquired the remaining 70% shares of Menzies Express and Newstrade, gaining full control over its logistics process in the UK..
• Development of “Recommerce” Services: DHL Supply Chain partnered with Reflaunt to optimize logistics processes in the second-hand clothing resale sector.

Acquisitions and Partnerships in the Logistics Industry:

Danish DSV acquired German Schenker.

DHL Global Forwarding completed the acquisition of Arab freight forwarder Danzas AEI Emirates.

Growth of Foreign Distribution Centers :

LPP Logistics opened its first international distribution center in Romania.

Spiżarnia launched a new warehouse in the UK.

• Expansion of Delivery Platform Offerings: Pyszne.pl plans to add new product categories, such as small electronics, to its offerings.
• Collaboration between Poczta Polska and Eurocash Group: Poczta Polska expanded its network of pickup and drop-off points to include Duży Ben and Euro Sklep, part of the Eurocash Group.
• Increased Automation in Logistics: Ochama (a subsidiary of JD.com) opened an automated distribution center in Poland.
• Ongoing Logistics Collaboration: DSV and Tchibo Poland continued their partnership in logistics and road transport.
• Bright Prospects for Contract Logistics: The global contract logistics market accelerated in 2024, with its value growing by 3.5% in 2023. E-commerce continues to constitute a significant portion of contract logistics revenues.
• E-Commerce Growth: Online retail plays an increasingly vital role in logistics, driving revenue growth.
• Stabilization in the Warehouse Market: The warehouse market shows signs of stabilization after a drop in investment volume in the first half of 2024, with investor activity rebounding.
• Growing Interest in “Brownfield” Projects: Investors are increasingly focusing on brownfield projects, particularly in Upper Silesia.
• Rising Popularity of Intermodal Transport: Intermodal transport is becoming a prominent trend in the TSL (Transport-Shipping-Logistics) sector.
• Geopolitics and Cybersecurity as Key Threats: Geopolitical tensions and cyberattacks are the greatest risks to supply chains. Companies are increasingly investing in digital solutions to enhance supply chain resilience.
• Increase in Black Friday Orders: Experts estimate that this year’s Black Friday order volumes may rise by 10% compared to last year.
• Polish Warehouses Servicing Europe: Polish warehouses are becoming a critical logistics hub for all of Europe.

TRANSPORTATION IN 2024

In summary, 2024 was a challenging year for the transportation industry, particularly in international transport, due to declining economic conditions and rising costs. However, there were some positive signals, such as a recovery in the domestic market and stabilization in the warehousing sector. In 2025, carriers should prepare for further cost increases, stricter controls, and the need to adapt to new environmental regulations.

• Declining International Market Conditions: A downturn that began in mid-2023 persisted through 2024, with slight improvement signs toward the end of the year. The economic crisis in Europe, particularly in Germany, led to fewer orders for Polish carriers.
• Intensified Competition: A fragmented market saw fierce competition, sometimes involving unfair practices which led to underpricing.
• Lower Spot Rates vs. Contract Rates: Spot market rates remained below contract rates, creating a paradox where large contract firms faced challenges despite optimized costs.
• Freight Forwarders Entering Contract Markets: Freight forwarders increasingly entered contract markets, leveraging lower spot market prices, posing a threat to larger transport firms.
• Restructuring in Transport Firms: An increase in restructuring cases, such as an eightfold rise on the Silesian market compared to two years ago.
• Domestic Market Recovery: The domestic market showed signs of revival, particularly in FMCG and retail sectors, with noticeable peaks during the holiday season. >The growing importance of the domestic market for Polish carriers: Companies that diversified their operations by splitting them between international and domestic transport could consider this a good decision.
• Stabilization in the Warehouse Sector: After a period of significant growth during the pandemic, the warehouse market stabilized in 2024. Poland surpassed 33 million square meters of modern warehouse space and became the fifth-largest market in Europe in terms of available space.
• Increase in warehouse space leasing: In the first three quarters of 2024, nearly 4 million square meters of warehouse space were leased, with most of it being new space.
• Stable vacancy rate: The vacancy rate stabilized at around 8%, which was considered a healthy level compared to other countries.
• Boom w e-commerce: Online sales grew, with companies such as InPost reporting a 20% increase in sales. At the same time, online retailers felt pressure from sales platforms that were raising fees.
• Rising Labor Costs and Driver Shortages: Labor costs of employers in the transport sector increased by approximately 1000 PLN per employee, with only a small portion of this amount reaching the drivers. In 2025, further cost increases are expected due to the rise in the minimum wage and social security contributions.
• Driver recruitment issues: The shrinking Polish labor market, the aging of drivers, and difficulties in recruiting workers from abroad were significant problems.
• Long waiting times: Poland has the longest waiting times for issuing vehicle-related documents in Europe, which complicates the operations of transport companies.
• New tachograph regulations: In 2024, a requirement to replace tachographs with newer models was introduced, resulting in costs and availability issues with workshops. It is estimated that by the end of the year, only about half of the vehicles had their devices replaced.
• Tighter controls: An increase in the frequency and scope of inspections, including checks on weekly rest periods, cabotage, and sector wages, which were expected to be more detailed in 2025. The control period on roads is to be extended to 56 days.
• Platform Work Directive: An EU directive that may affect courier companies, potentially increasing employment costs by requiring couriers to be employed on contracts.
• ESG requirements and decarbonization: An increasing number of companies must report on their ESG activities, and clients expect data for their reports. Companies are being forced to decarbonize and reduce greenhouse gas emissions.
• Introduction of Euro 7 standards: New emission regulations that tighten standards, particularly for buses and trucks. The introduction of environmental passports for new vehicles. Euro 7 standards also introduce regulations on the maximum operational lifespan of vehicles and battery durability.
• Ban on transporting disposable e-cigarettes: Some transport companies, such as Cargolux, have introduced a ban on transporting disposable e-cigarettes due to their harmful impact on health and the environment.
• Increase in road tolls: Planned changes to the road toll system, which could increase costs for the most polluting vehicles.
• Potential changes in global supply chains: Changes in U.S. trade policy could affect the flow of goods and provide an opportunity to increase exports from Poland, but at the same time may increase competition from China in the European market.