Impact of new technologies on parcel markets (No. 542) © Photo Credit: ipopba - stock.adobe.com

Impact of new technologies on parcel markets (No. 542)

How AI, IoT and robotics are shaping innovation and competition in the parcel market

Rising customer expectations, accelerated e-commerce growth and a shortage of skilled workers are putting pressure on parcel services. A new study by WIK shows how AI, IoT and robotics are being used along the parcel logistics value chain, which providers are particularly innovative and why, and how technological progress is influencing competition in the German parcel market.

A new discussion paper by WIK examines the use of new technologies such as artificial intelligence (AI), the Internet of Things (IoT) and robotics along the entire parcel value chain. The focus is on solutions that are already being used in parcel logistics or could gain importance in the next five years. The research focuses on the concrete use of new technologies, the factors influencing the willingness and ability of parcel service providers to innovate, and the impact on competition in the German parcel market. Methodologically, the analysis is based on comprehensive desk research, supplemented by visits to trade fairs and the DHL Innovation Centre, as well as interviews with major parcel operators and industry experts.

A survey of current practices reveals that only a small number of technologies have been widely adopted in the field of parcel logistics. IoT is well established, AI is gaining prominence, and robotics remains in its infancy. Technological progress is typically achieved through continuous, practical improvements in ongoing operations, taking existing systems and processes into account. The implementation of new technologies must be financially viable for parcel service providers. They must be financially robust to assume the risks of potential failures.

Companies use innovations to differentiate themselves from their competitors in terms of service quality, speed and price-performance ratio. Parcel services with a high level of innovation can test new technologies early on, improve processes and thus strengthen their market position. However, scaling and implementation are limited for some providers due to organizational structures and resources. New market entrants have the potential to complement existing offerings, but thus far, their impact on market structure has been limited.