OPINION: How to plan for the development of parcel locker volumes in a mature market

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As we reflect on the passing of the second year of the pandemic, it is plain to see that we’ve become accustomed to the growth of the e-commerce market and thus, the rapid increase in volumes handled by courier, express and parcel (CEP) service providers. One of the biggest beneficiaries of this growth has been ‘out of home’ delivery networks.

In 2020, InPost, the largest parcel machine network operator in Europe, showed significant increases in volume, revenues, and profits. Let’s take a closer look at whether this success was repeated in 2021 and what other operators can learn from the several years of development of parcel locker machines in Poland.

In 2021, InPost reportedly handled 424.3 million parcels in Poland and grew its network to more than 16,400 parcel machines. According to the company, parcel volume had increased 38% year-on-year. Undoubtedly, this is an impressive increase, and InPost again collected most of the growth of the entire CEP market, which I estimate at an increase of around 20% year-on-year. Nevertheless, it turns out that this increase is much lower than in previous years.

From 2018-2020, InPost parcel volumes increased by an average of 90% annually, with the vast majority being sent through lockers in Poland. With this in mind, could the recent slowdown in dynamic of growth be attributed to the saturation of this delivery channel?

It would be bad news for other investors in Poland’s networks of parcel locker machines, such as Orlen, Allegro, DPD, SwipBox, AliExpress, or Poczta Polska. Perhaps, this growth only shows that InPost has become a domestic market leader in recent years, and the growth rate from such a large base cannot be the same as in previous years?

Let’s collect a few hypotheses that can be useful to plan volumes in the parcel locker network:

  • InPost’s growth of 38% in volume is still more than the growth of the e-commerce market itself, which I estimated at 29% in 2021. It means that an operator so strongly dependent on e-commerce is still able to beat the market growth thanks to the development of the network and innovation.
  • The InPost network is relatively new; the operator grew its total number of parcel machines in Poland by 50% in 2021. Machines will gradually fill up, and the effect of the investment should be spread over a more extended period, not just 2021.
  • 2021 was also an intensive development of the PUDO delivery network. Following the example of Poczta Polska, other companies, such as DHL, DPD or GLS, are intensively building their reach. It is a direct competition for parcel machines, so it should keep pace with the development of the parcel machine volume a little.
  • The most attractive locations for parcel machines are already primarily occupied by InPost. The fight for new clients is shifting to smaller cities.
  • The growth of the e-commerce market in 2021 was driven mainly by the development of the consumer base in 2020. There should be a slowdown in the following years, which will translate into the CEP market.

When planning for volume development in your parcel machine network, I would therefore consider all the above hypotheses, together with the network density, the level of market maturity, and customer preferences.

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