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Surprising Increase Of E-Commerce And CEP Services – What Does The Future Hold?

Published 10 Jul 2021

Surprising Increase Of E-Commerce And CEP Services – What Does The Future Hold?

Surprising Increase Of E-Commerce And CEP Services – What Does The Future Hold?

The year 2020 passes under the influence of the Covid-19 pandemic all over the world. Since the beginning of the year, the pandemic, which first started in China and spread rapidly all over the world, has deeply affected human life. Although the number of cases and deaths differed in countries, the reactions to the epidemic and the measures taken were largely the same. Working life, ways of doing business and consumption patterns were significantly affected and changed. Supply chains have been disrupted by the measures taken and the spread of the disease, delays and disruptions in supplies of goods have occurred.


What Does CEP Stand For?

The term CEP is the abbreviation for “Courier, Express and Parcel Services”. It refers to postal and logistics companies that primarily transport consignments with comparatively low weight and volume – such as letters, small packages, documents or small items.


Big Opportunity For E-Commerce And CEP Services

Among the important changes the pandemic has created in our lives are the confinement of people to their homes, the continuation of working life from home in the form of home offices, and the shift of physical shopping to virtual locations. As a result of the introduction of curfews, the closure of shopping malls and the restriction of travel as part of the measures taken, people have reduced their consumption and turned to saving, while shopping has shifted to e-commerce channels. So much that even middle-aged and elderly consumers, who seem to be the most distant from e-commerce, have increased their e-commerce habits during this period. This type of shopping behaviour is seen internationally as the new norm.

The rush to online commerce has led to strong growth for both retailers and shop owners who have extensive digital capabilities.


Logistics Service Providers See E-Commerce Dynamics Even After The Pandemic

There may be some adjustments, but overall the leap we took from the pandemic seems to be here to stay. Shoppers may be returning to the malls, but e-commerce providers are confident that consumers will keep a firm grip on their digital shopping carts even after the pandemic restrictions fade.

Several brand executives report that while shop traffic is up, sales have not yet returned to pre-pandemic levels. Shops are still struggling to restock, but in some cases you can window shop, but you still have to buy online.

CEP Market Continues To Grow

The market for parcels and other shipments has grown faster than ever before. 2019 and 2020 were successful years for the CEP and e-commerce market. This development is due to the Corona pandemic.

The industry's shipment volume reached a new record with billions of shipments. And even today, there is no end in sight. According to studies, CEP shipment volumes will continue to rise until 2024 despite the pandemic.

Due to the closures of local shops, more people have resorted to online shopping than in previous years, which has caused the volume of shipments in the B2C sector in particular to rise. But how will things continue after the pandemic and how will the relationship between online and stationary retail develop with increasing opening steps?

For Holger Ostwald, Manager External Communications at UPS, there is no going back to the pre-crisis status quo when it comes to shipment volumes. "There will certainly be no return to the old ratio of stationary trade and shipping. From our point of view, the B2C share of shipment volumes in particular will remain at a high level."

Since the consequences of the Corona pandemic are not yet concretely foreseeable, the CEP studies look at possible medium-term developments of the CEP market in several scenarios. Until 2024, growth can be assumed to be between 3.6 percent and 4.2 percent per year.

CEP Services Are Essential For The Commercial Economy

This year's CEP studies show that CEP services are of enormous importance for the business economy (B2B). CEP service providers secure supply chains, provide companies with goods and merchandise and ensure cost savings, market expansion and positive turnover effects. Around 60 percent of commercial establishments used CEP services on a daily basis.

In order to meet this intensive demand, the CEP companies hired significantly more employees than in previous years.

CEP Services Are Relevant To The System

The CEP market has been significantly affected by the consequences of the Corona Shock, albeit in very different ways depending on the market segment.

CEP services are essential for private households, but also for the economy in cities and conurbations. They reliably supply trade, industry, commerce, crafts and service companies with urgently needed goods and commodities. This underpins the systemic relevance of the CEP sector, especially in times of crisis such as the Corona pandemic.

The Corona crisis shows that CEP services can be relied on. What's more: they are indispensable for safe supply in the country and thus systemically relevant. This applies to hospitals and laboratories as well as to end consumers and the economy as a whole.

How Are Companies Preparing For The Future?

Online trade is the trigger for the construction of new distribution centres and the recalibration of networks. CEP companies have placed particular emphasis on the rapid implementation of contactless delivery in the wake of the crisis, as well as achieving greater efficiency in delivery. In the future, they want to rely on a new generation of hand scanners and use digital platforms to better target recipients and involve them in the delivery process. These technologies are primarily intended to relieve CEP employees. Comprehensive measures in terms of automation, digitalisation and employee empowerment are on the agenda.

In addition, logistics companies and retailers are investing in information technology and automation to speed up the flow of goods and are still shifting inventory away from retail shops and towards e-commerce processing. Such adjustments are driving up demand for warehouse space, especially near urban centres - a trend that logistics developers expect to continue even as more customers return to shops. Companies that were able to keep up with the pandemic conditions did not have to close all their shops in the lockdown.

What Does The Future Hold?

It is expected that the volume of shipments will remain at an elevated level in the second half of 2021. There are still restrictions and customers have become very accustomed to ordering many goods, including everyday necessities, online in recent months.

Some CEP service providers, however, assume that there will be slower but nevertheless constant growth in the consignment market in the coming years.

However, it remains to be seen what will happen next...