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The Confidence Index 2024 report is a comprehensive survey of sentiment among tenants in the warehouse sector.

Confidence Index 2024 Barometer of sentiment in the logistics and supply chain industry Poland

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Contents

1 Introduction / 3 2 Measuring Confidence / 5 2.1 Respondents / 7

2.2 How Confident is the Logistics and Supply Chain Sector? / 9 2.3 Business confidence compared to 12 previous months / 11 2.4 Business confidence forecast for next 12 months / 12

2.5 Anticipated changes in turnover / 13 2.6 Anticipated changes in profitability / 14 2.7 Forecast of capital expenditure / 15 2.8 Forecast changes to employment / 16

3 Key Issues / 18 3.1 The economy, trading conditions and investment / 19 3.2 Logistics property / 24 3.3 E-commerce / 28 3.4 Customer / service provider commercial dynamics / 28

3.5 Technology / 30 3.6 Sustainability / 33 3.7 Future opportunities and challenges / 37

4 Appendix / 44 5 About Us / 47

Introduction

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

The Poland Logistics and Supply Chain Confidence Index 2024 is the seventh edition of a market survey undertaken to assess confidence and expectations in the Polish logistics and supply chain sector. CBRE and P3, with strong support from the specialist sector research agency Analytiqa, have summarised the main performance indicators for businesses operating within the logistics and supply chain sector. The report corresponds with similar analysis carried out in other European countries, such as UK, Ireland, Spain, Portugal or Netherlands. 50 decision makers representing both logistics companies, manufacturers and retailers have shared their opinions and insights to facilitate the industry research study. Respondents included CEOs, managing directors and senior management. Interviewees were asked about current business conditions in Poland and forecasts for the future. In addition to the quantitative analysis, we are delighted to yet again present the comments of a selection of our research respondents, who have agreed to share their more detailed views on key topics in the country and in the industry.

In a change to the results reported to the last year, and indeed, to the results from last four years, the research reflects a shift into an improved and more positive outlook for the logistics and supply chain market. The Poland Logistics and Supply Chain Confidence Index 2024 has been set at 52.2, which is a higher number than previous years (48.8 in the last edition).

A number over 50.0 indicates

an improvement, while below 50.0 suggests a decline. The further away from 50.0 the index is, the stronger the change over the period.

Analytiqa

industry verticals of the global supply chain. Analytiqa delivers high quality, commercially relevant research to assist clients to grow and profit in challenging and competitive markets.

All figures and data relating to the Poland Logistics & Supply Chain Confidence Index within this report have been researched by Analytiqa. Analytiqa is a market analysis company providing published reports, bespoke research and strategic advisory for multinational clients across all sectors and

www.analytiqa.com

Measuring Confidence

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

In undertaking this survey, we have adopted the same methodology used across similar surveys conducted by Analytiqa for other jurisdictions. The report examines the key performance indicators for businesses operating within the logistics and supply chain sector. It provides insights from the perspective of both logistics buyers and service providers, thus giving us a 360 degree view of sentiment as well as the current issues and topics affecting the sector. In addition to sharing their views on the recent performance of the logistics sector, respondents also outlined their expectations for the sector over the near term. This is the seventh recording of the Logistics and Supply Chain Confidence Index in Poland and the research was conducted between March – May 2024. The report was supported by CEOs, managing directors and senior decision makers from some of Poland’s most successful logistics providers, manufacturers and retailers including:

Arvato SCS

Hellmann Worldwide Logistics

Carlsberg

ID Logistics

CEVA Logistics

Kellanova

Dartom

Maersk

DB Schenker

Raben Logistics

DIREX

Rhenus Warehousing Solutions

DMT

Rohlig Suus Logistics

DSV Solutions

FIEGE

P3 Wrocław City

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.1 Respondents

There were a total of 50 respondents to our survey of which 25 were from logistics companies and 25 were manufacturers and retailers. We are grateful to our loyal respondent base, as we publish the seventh edition of the report, providing us with valuable consistency of responses, collected from senior industry leaders across Poland.

The group of the survey participants comprised predominantly Logistics Directors and Supply Chain Directors who altogether represented 40% of respondents, as well as Managing Directors and CEOs, who accounted for 25% of interviewees. Finance Directors and CFOs accounted for a further 10% of people that took part in this year’s research.

Figure 1. Overall job titles

CEO

CFO / FD

11%

24%

Director

19%

Supply Chain / Logistics Manager

17%

Logistics Director

17%

Supply Chain Director

P3 Poznań

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

The majority of the logistics firms which participated in the survey were categorised as 3PL companies and represented 68%

of logistics respondents. 32% belonged to forwarding companies, hauliers and express firms.

Figure 2. Logistics company types

Haulier

Express

Forwarder

16%

68%

3PL

The manufacturers and retailers which responded to the survey were dominated by the food, drinks and consumer goods sector (36%). Retail companies accounted for 24% of respondents and the same

amount were from industrial manufacturers (24%). The remaining answers were sourced from the pharma/healthcare sectors (8%).

Figure 3. Manufacturers and Retailers company types

36%

24%

Retail

Food, Drinks, Consumer Goods

16%

Pharma / Healthcare

24%

Industrial (Automotive, Chemical…)

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.2 How Confident is the Logistics

and Supply Chain Sector in Poland?

Figure 4. Confidence Index in time series

60.7

57.4

52.2

49.0

48.8

46.4

44.8

2017/18

2018/19

2019/20

2021

2022

2023

2024

Overall Confidence

Manufacturers and Retailers Confidence

Logistics Operators Confidence

This year’s survey reports a higher result than in the last four editions of the research. An increase in confidence amongst logistics and supply chain professionals across Poland is noted. It is also the first time since 2018/2019 edition when the confidence is above 50.0, indicating optimism across the sector. The 2024 index is also the first time when the logistics operators’ and manufacturers and retailers’ confidence is so closely aligned, but for the second consecutive time, a higher result was observed in the manufacturers and retailers’ group of respondents. However, in 2024, in contrast to 2023, the divergence is minimal.

Following the challenging economic conditions which were prevailing in 2022 and 2023, the pressure appears to be easinge off in 2024. Inflation levels in Poland are significantly lower than in the last two years, whilst GDP results for the first quarter in 2024 and the forecast for the rest of the year are also positive. After a difficult period, logistics providers, in particular, are cautiously optimistic about the year ahead, despite many market challenges, including increases in labour costs and adverse currency movements, which have not helped competitiveness and, of course, the geopolitical uncertainty that remains.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Despite these challenges, opportunities for growth remain. These will be generated domestically, led by demand recovery and infrastructure development, but also by Poland’s role in cross-border trade.

The 2024 Index highlights a large increase in confidence amongst logistics operators, whilst optimism amongst manufacturers and retailers has remained similar to last year.

How Confident is the Logistics and Supply Chain Sector?

The 2024 Poland Logistics and Supply Chain Confidence Index is set at 52.2, its highest level for five years. It is also the first time since 2018/2019 edition that there was a breakthrough of the barrier of 50.0, which suggests that the sector is looking ahead with optimism, albeit at relatively low levels. The 2024 Index highlights a large increase in confidence amongst logistics operators – from 45.2 to 51.6, whilst optimism amongst manufacturers and retailers has remained similar to last year – with a minimal increase from 52.4 to 52.8. This is also the second consecutive edition when the manufacturers and retailers’ confidence is higher than the logistics operators.

This marginally e positive outlook is mirrored in other countries in Europe – out of all countries where Analytiqa is conducting Confidence Index research, only UK’s result is below the 50.0 barrier, although at the time of our publication, 2024 research has not yet been published. The 2024 Index illustrates that confidence levels remain positive. 2024 will continue to be characterised by inflation levels declining and an, economic rebound, although intense geo-political challenges will remain.

Figure 5. Confidence in 2024

52.2

Overall Confidence of the sector

52.8

51.6

Manufacturers and Retailers' Confidence

Logistics Operators' Confidence

The index calculation is based on the proportion of respondents reporting either an improvement, no change or deterioration within the sector.

The index calculation is based on the proportion of respondents reporting either an improvement, no change or deterioration within the sector. Therefore, a number over 50 indicates an improvement, while below 50 suggest a decline. The further away from 50 the index, the stronger the change over the period.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.3 Business Confidence Compared to 12 Months Previous

When comparing the current business conditions to the situation prevailing on the market one year ago, 20% of respondents claimed they are more confident about the business environment than they were 12

months ago. 36% see their current business conditions as the same as in the previous year, while for 44% of respondents, the current business conditions are “more difficult” & “much more difficult”.

Figure 6. Change in business conditions vs the last 12 months

Much more favourable

Much more difficult

16%

Somewhat more favourable

36%

Somewhat more difficult

36%

The same

This is a more positive outlook than in the previous edition, as last year 56% perceived recent conditions as "much more difficult" or "somewhat more difficult". This year, for 56% of respondents conditions are better or the same, while those answers were

chosen by 44% last year. Also, for 4% of respondents this year, business conditions are “much more favourable” while there was no one selecting that option in the previous research.

P3 Katowice City

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.4 Business Confidence Forecast for Next 12 Months

When asked how confident the respondents feel about the coming 12 months, 30% believe the business conditions will stay the same. 28% of respondents were optimistic (up from

24%), amongst which only 2% are expecting the business conditions to be "much more favourable". 42% (down from 44%) expect external difficulties in running their business.

Figure 7. Change in business conditions vs the next 12 months

Much more favourable

Much more difficult

2% 6%

Somewhat more favourable

26%

36%

Somewhat more difficult

30%

The same

Logistics operators are more likely to predict a change in the year ahead – 36% have a negative outlook and 44% a

positive one, while 40% of manufacturers and retailers don’t foresee a change in conditions.

P3 Warsaw II

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.5 Anticipated changes in turnover

When asked about the anticipated changes in turnover over the next 12 months, 52% of respondents forecast an increase in turnover and 10% expect turnovers to remain on a similar level.

logistics operators expect an increase in turnover and 48% of manufacturers and retailers are of the same expectations. Stable levels of turnover are expected by 16% of manufacturers and retailers and only by 4% of logistic operators.

The results between the two groups of respondents are rather similar. 56% of

Increase

Figure 8. Change in turnover over the next 12 months

10%+

8 - 10%

22%

5 - 8%

24%

2 - 5%

No change

10%

-2 to +2%

Decrease

16%

2 - 5%

12%

5 - 8%

10%

8 - 10%

10%+

10%

20%

15%

25%

26% 27%

P3 Poznań

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.6 Anticipated Changes in Profitability

Optimism regarding turnover growth is, in most cases, followed by less positive forecasts about business profitability. This is a trend continuing in every edition of the report, although this year the difference is minimal. Whilst 52% of respondents forecast an increase in turnover, it is positive to see that 47% are anticipating higher levels of profitability (up from 36% in the last edition of the report). A further 20% of respondents said they do not expect any change in profitability over the next 12 months, whilst 33% claimed their profits may fall (34% in the previous year).

Manufacturers and retailers are more positive than logistics operators – 56% expect an increase in profitability, whereas 38% of logistics operators anticipate a growth in profits. The “no change” category is predicted by roughly similar percentages in both groups – 21% of logistics operators and 20% of manufacturers and retailers. 42% of logistics operators expect a decrease in their profits, which is not unexpected given current trading conditions, while 24% of manufacturers and retailers anticipate a fall in profits.

Figure 9. Change in profit over the next 12 months

Increase

10%+

8 - 10%

16%

5 - 8%

27%

2 - 5%

No change

21%

-2 to +2%

Decrease

12%

2 - 5%

5 - 8%

8 - 10%

10%+

10%

15%

20%

25%

30% 35%

Optimism regarding turnover growth is, in most cases, followed by less positive forecasts about business profitability.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.7 Forecasts of Capital Expenditure

When asked about the likelihood of making significant logistics and supply chain related capital expenditures in their companies over the next year, the responses were positive and eflect the overall increase in optimism from last year’s edition. 70% of respondents are expecting to make capital expenditures this year – in the previous report 62% were of the same opinion. 30% of respondents

are not expecting significant capital expenditure, down from 38%. The opinions of both groups are similar, with, opposite to last year’s editions, logistics operators being slightly more likely to invest (72%) against 68% of manufacturers and retailer choosing the same answer. It is a very positive sign for the market.

Figure 10. Significant capital expenditure by companies over the next 12 months

20%

Very likely

30%

Unlikely

50%

Likely

P3 Warsaw I

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

2.8 Forecast Changes to Employment

Regarding the forecast changes to employment, results are less positive than in the previous edition. When asked if respondents plan to increase or decrease their headcount over the next 12 months (excluding seasonality impacts), overall, 32% predict a reduction of employment levels compared to 24% in last year’s edition. 30% of respondents predict no change and 38% are still planning to increase their headcount (40% in the last edition).

Logistics companies are more likely to expect a decrease In employee numbers this year (44%) with the majority expecting this to be in the lowest range 2-5% (32%). Manufacturers and retailers mostly predict no change in staff numbers (36%) or an increase, by 44% respondents, including 28% in the range of 2-5%.

Figure 11. Forecast in headcount over the next 12 months

Increase

10%+

8 - 10%

5 - 8%

26%

2 - 5%

No change

30%

-2 to +2%

Decrease

22%

2 - 5%

5 - 8%

8 - 10%

10%+

20%

10%

30%

40%

50%

For the first time in our Confidence Index series, we have included an Appendix to our report, which tracks several of these key

measures of sentiment across the seven editions of our research.

Logistics companies mostly expect a decrease (44%) with majority in the lowest range 2-5% (32%).

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Wojciech Cipiur CEO & Managing Director, DSV Solutions

What are your expectations for this year’s performance for your company and the logistics sector in general in Poland? How will this be influenced by expectation for the general economic environment?

Despite a significant decline in road transport volumes, declining exports and a still weak rebound in consumption and investments, the prospects for the Polish logistics sector remain good. Whether it is very good depends on many factors, including, among others: competitiveness of our services, which have not been helped recently by the simultaneous strengthening of the zloty exchange rate and a drastic increase in the minimum wage. At DSV Solutions, this year started with some concerns, but after five months we already see more positive than negative

signals from the market and from our customers. We expect significant growth in all parameters of our business this year. The prospects for our industry in the next year depend on how quickly we will see the impact of KPO on the revival of investments and the economic situation of our largest trading partners, which has a significant impact on the volumes of our exports and new investments in Poland.

What, if any, changes in international supply chains have you observed in re cent years (nearshoring) and especially in the last 12 months – and which do you expect to see in the years ahead?

Trends such as nearshoring and friendshoring are visible and have a positive impact on the development of the logistics services sector in Poland. In recent months, the growth rate has slowed down significantly. In addition to the general situation in the global economy, this is also due to several internal factors, including: a drastic increase in labour costs, backwardness of the energy system or a significant strengthening of the zloty

exchange rate. Additionally, a visible factor taken into account by investors is access to green energy. If we work on these elements, Poland will continue to be one of the major beneficiaries of changes in global supply chains.

Key Issues

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

3.1 The Economy, Trading Conditions and Investment

When asked about their company’s performance, the biggest share, 67% of respondents, stated that increased fuel and energy prices are having a negative impact. Last year, this category came ranked in the third place. Increased labour costs were selected by 62% as having a negative impact and was the second most chosen category in the negative sense (last year it was selected the biggest negative impact). Changing economic conditions and economic uncertainty is also having a significant negative impact for 55% of respondents. Whilst inflation and price

pressure is having a negative impact on over one-half of respondents, this appears to be less of a negative issue than last year, as last year this was the second top result (76%) and this year it came in fourth with 54%. For 39% of respondents, transport capacity issues deliver a positive impact on their company’s performance and warehouse and storage capacity driving positive impacts for 33%.

Figure 12. To what extent are the following currently having a significant positive or negative impact on your company’s performance?

Warehouse / storage capacity

55%

33%

12%

Managing disruption in supply chains

72%

14%

Transport (road, rail, air or ocean) capacity Payment terms / bad debts from customers

43%

18%

39%

74%

20%

45%

18%

37%

International freight prices

54%

44%

Staff shortages

36%

10%

54%

Inflation and price pressure

Changing economic condi tions and uncertainty

55%

31%

14%

28%

10%

62%

Increased labour costs

Increased fuel and energy prices

67%

29%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Significant negative impact

Little or no impact

Significant positive impact

As for the impact of geo-political events on their business 72% of our respondents stated that a key consequence of geo political events is “higher operating costs” posing a slightly lower potential damage from last year’s responses (decrease by 8 percentage points). “Shortage and/or low availability of workers” was the second most

often chosen option by 42% - higher by 6 percentage points from last year. “Loss of business/customers” is an issue for 32% of the respondents. “Disruption to international supply chains” and “more expensive borrowing/finance costs” which were last year selected by 32% of our respondents, are now viewed as less pressing issues.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Figure 13. What, if any, are the impacts of geo-political events on your business in 2024?

No impact

Other

Minimal impact, we have adapted to current events

10%

More expensive borrowing / finance costs

18%

Change of business strategy

24%

Disruption to international supply chains

26%

32%

Loss of business / customers

Shortage and/or low availa bility of workers

42%

72%

Higher operating costs

30%

20%

40%

0% 10%

50% 60% 70% 80%

Share of respondents nominating each answer category, will not sum to 100%

Across every year of our Confidence Index report, we have asked respondents to compare business conditions in Poland to other EU countries. The arrows indicate change in opinions, up or down, from last year. Respondents were more positive about Poland’s labour force skills (62% - up from 42% in the research last year) and the speed of running supply chain operations in Poland compared to other countries (46% - up from 40%). For a long time, the cost of supply chain operations was the category in which Poland was perceived as better than

average, but this year, it was chosen as being average in comparison, by 46% of respondents. Investment attractiveness, planning permission process and logistics space quality/availability in Poland were also described as in line with European averages by the majority of respondents. Legislation, ‘red-tape’ and bureaucratic decision-making in Poland was in 2023 perceived “worse than average” by 64% of responses, but in 2024 it was perceived mainly as average by 52%. In general, logistics operators perceive Poland as better in average in a larger number of categories than manufacturers and retailers.

Across every year of our Confidence Index report, we have asked respondents to compare business conditions in Poland to other EU countries.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

P3 Warsaw II

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Wojciech Szafran Managing Director Raben Logistics Polska sp. z o.o.

After a slowdown in 2023, economic growth is expected to gradually rebound this year, supported by strong consumption and investment. This, of course, should have a positive impact on the condition of the TSL industry. On the other hand, although inflation is also forecast to decline, price pressure will

remain elevated in the context of growing domestic demand and rising labour costs and the gradual unfreezing of energy prices. And rising costs pose a challenge to every company and industry.

The rising costs of energy and oper ation of warehouses and industrial buildings pose an increasing challenge for many companies, especially those in the logistics and production industries. What solutions to reduce these costs are you already using, and what solu tions are you considering implementing in the future?

Raben Group is taking a number of actions aimed at saving energy and reducing costs to deal with rising operating costs. Already at the stage of designing warehouses, we think about energy efficiency. The solutions currently used by Raben include, among others, the use of energy from renewable sources, the use of energy saving LED lighting, more efficient heating,

ventilation and air conditioning (HVAC) systems, and the implementation of intelligent sensors and automated lighting, heating and cooling systems, which allows for better control and optimisation of energy consumption.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Figure 14. How does Poland compare to other EU countries in terms of its logistics performance and/ or ease of managing supply chain operations?

Legislation / red-tape / bureaucratic decision-making

Planning Permission Process

Logistics Space Quality / Availability

Speed of supply chain operations

Cost of supply chain operations

Investment attractiveness

Labour force skills

Overall Better than average

46%

62%

42%

10%

28%

20%

36%

46%

52%

58%

64%

54%

30%

Average

Worse than average

12%

38%

14%

16%

10%

Logistics Better than average

48%

76%

40%

32%

25%

44%

67%

48%

40%

24%

Average

Worse than average

12%

44%

24%

12%

Manufacturers-Retailers

48%

44%

36%

12%

24%

16%

32%

Better than average

52%

56%

72%

60%

36%

Average

12%

32%

16%

24%

Worse than average

P3 Katowice City

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

3.2 Logistics Property

We once again asked our respondents questions about their expectations for logistics property. In terms of needing new logistics space, respondents have a positive, but more cautious outllook compared to 2023. 56% (67% last year) of companies are seeing an increased demand for logistics space in 2024, but they expect some challenges. 40% (26% last year) are expecting to need the same amount of space as last year, whereas just 4% are going to downsize or sublet their space.

The expected challenges in obtaining a new facility which were most common among respondents were similar to last year: rents and the location will be the most challenging for 11% of respondents each, while service charges were selected by 10%.

Figure 15. Does your company expect an increase in demand for logistics property in 2024 over 2023 and, if so, will there be any issues in supply or securing the additional warehouse space?

No, we expect to maintain the same amount of space

40%

No, we will be downsizing / sub-letting space

Yes, we will need extra space but expect facility location to be a challenge

11%

Yes, we will need extra space but expect facility size to be a challenge

Yes, we will need extra space but expect facility attributes and quality to be a challenge

Yes, we will need extra space but expect facility costs - construction to be a challenge

Yes, we will need extra space but expect facility costs - rent to be a challenge

11%

Yes, we will need extra space but expect facility costs - service charges to be a challenge

10%

Yes, we will need extra space but expect facility contract terms to be a challenge

Other

10%

30%

20%

40%

50%

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Among respondents who are expecting to need additional space, there is no clear preference for the type of space, unlike last year when the most chosen answer was to lease a new build. Answers differ depending on the respondent type. Neither logistics operators or manufacturers and retailers wants to own a facility from existing stock,

when they prefer to own it’s only a new build. Leasing a facility from existing stock is an option for logistics operators (17%) and it might be somewhat easier to facilitate this year compared to previous years, as the vacancy rate in Poland is currently at the level of 8%, growing from historically low levels.

Figure 16. If your company is planning for new warehouse space in 2024, what type of facility do you expect to require?

13%

Use existing space of a 3PL operator

17%

Lease a facility from exist ing stock

17%

0% 0%

Own a facility from existing stock

Lease a new build, led by our environmental requirements

25%

Own a new build, led by our environmental requirements

17%

Lease a new build, led by our / our 3PL's requirements

25%

Own a new build, led by our / our 3PL's requirements

Lease a new build, led by client requirements

25%

12%

Own a new build, led by client requirements

10%

15%

20%

25%

30%

Man-Ret.

Logistics

Neither of the group wants to own a facility from existing stock, when they prefer to own it’s only a new build.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Yann Belgy Managing Director ID Logistics

We remain very positive about potential of Contract Logistics in Poland in general, and of ID Logistics in particular. On top of a steady development of the domestic market driven by internal consumption and dynamism of the local economy, Poland became a key logistics base for European distribution, especially for e-commerce and fashion industries.

There were therefore many new fulfilment centres created in Poland within recent years, thanks to the relatively lower costs in labour and real estates, but also thanks to its geographical position, modern infrastructure, educated population and superior flexibility. We expect this trend to go on during coming years and we developed a real know-how to efficiently answer such needs from our customers.

ID Logistics developed a specific expertise in energy management with a centralised team supported by local specialists who define good practices, relevant technologies, overall and local action plan, and follow their deployment. Such actions allowed us not only to lower our own consumption by approximately 40%, but also to help customers in reducing their own consumption and costs.

As per costs of operations, we more and more implement robots on a pragmatic way in processes where it makes sense and allows us to keep necessary flexibility. We also deeply believe in innovation as a way to compensate those rising costs and to differentiate, and we run regular programmes to develop innovative solutions together with our employees, customers and partners.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

P3 Prague D11

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

3.3 E-commerce

The growth of e-commerce business in Poland continues apace and the country remains one of the fastest growing markets in Europe after the Covid-19 pandemic. In 2023, CBRE conducted a European study “E-commerce in the post-pandemic era” in which it was assessed which countries returned to the pre-pandemic trend (had the pandemic e-commerce boost not happened). Poland is one of the outliers, where online shopping volume is still 2.9 years ahead of the trend which was present before the pandemic. Even though Polish customers have gotten used to omnichannel strategies, the e-commerce sales growth rate is slowing down, a trend

that is visible also in our Confidence Index answers.

44% of the respondents (up from 32% last year) estimate the growth rate for e-commerce growth in 2024 between 0 and 5%, while 28% (down from 40% last year) estimate the growth rate for e-commerce in 2024 to be between 6% and 10%. 28% of respondents forecast e-commerce growth of more than 11%. Last year this range was selected by roughly the same amount of respondents, although the growth of more than 15% was selected by 14% (10% this year).

Figure 17. In 2024, what will be the growth rate (year on year) for e-commerce (B2B and B2C) across Poland?

Overall 0% - 5%

44%

28%

6% - 10%

18%

11% - 15%

10%

>15%

3.4 Customer / Service Provider Commercial Dynamics

We asked our respondents a question about outsourcing their supply chain activity to third party logistics service providers. 46% of logistics providers don’t expect to change anything in terms of outsourcing or sub-contracting their supply chain activity, whereas 38% of manufacturers and retailers also plan to maintain their current outsourcing levels. For the logistics companies it’s a 24% decrease, while for manufacturers and retailers it’s a 22% increase compared to last year.

or distribution operations, while 19% of manufacturers and retailers plan to do so. 12% of manufacturers and retailers and 8% of logistics companies will be outsourcing more of their warehouse operations. 16% of producers and retailers and 4% of logistics companies are going to outsource more of both their warehousing and transport activities. As for outsourcing less of their operations, 12% of logistics companies plan to limit outsourcing of distribution, warehousing or both and 15% of manufacturers and retailers are planning to do so.

31% of logistics companies will be outsourcing more of their transport

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Figure 18. In 2024, will your company be outsourcing more or less of your supply chain activity to third party logistics service providers?

We will be outsourcing less of our warehouse and transport / distribution operations

We will be outsourcing less of our transport / distribu tion operations

We will be outsourcing less of our warehouse operations

No, we will keep our outsourcing levels the same

38%

46%

We will be outsourcing more of our warehouse and transport / distribution operations

16%

We will be outsourcing more of our transport / distribu tion operations

19%

31%

We will be outsourcing more of our warehouse opera tions

12%

10%

30%

50%

20%

40%

Man-Ret.

Logistics

When asked to identify the key drivers behind contract wins from customers or, for manufacturers and retailers contract awards to service providers, in the last 12 months, price competitiveness once again ranked as the most important factor for 33% of respondents (up from 29% last year), but this time standing out from the other answers more dominantly. “Scale of network” recorded 24% of responses. It

is somewhat surprising that, sustainability and environmental credentials came lower in the ranking compared to last year when 15% of responses nominated this category. The Consolidation of service providers, although ranking last similarly to 2023, has increased in importance in commercial decision-making, jumping from 1% to 6% of responses

Figure 19. In the last 12 months, what were the key drivers behind contract wins from customers/ awards to service providers?

33%

Price competitiveness

24%

Scale of network

17%

Personal relationships

14%

Value added services

Sustainability and environ mental credentials

Service provider consoli dation

10%

20%

15%

25%

30% 35% 40%

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

3.5 Technology

The increasingly vital role of technology in logistics and supply chain operations has been a key feature across all editions of the Confidence Index report. The answer to the question of which area of a respondent’s operations benefits most from technology has changed compared to the last edition. Operational visibility

and reporting registered 29% of responses, and more efficient warehouse operations (which came in first last year) recorded 27% responses. 18% of respondents suggested that the biggest benefit of technology to their business is more efficient distribution operations. Improved environmental responsibility which was an added category, came in last in this year’s edition.

Figure 20. Which is the area where technology is the most benefitting your business?

Greater operational visi bility and reporting

29%

More efficient warehouse operations

27%

More efficient distribu tion operations

18%

Improved collaboration (with customers / competitors)

14%

Improved customer communication

Enhanced service offering

Improved environmental responsibility

40%

20%

30%

10%

We asked our respondents if they have invested in supply chain technology over the last two years and, if so, what has been the impact on their business of this investment. Operational efficiencies, just like last year were the most selected answer accounting

for 29% of responses. What was significantly different from last year was the impact of technology on staffing requirements – contrary to last year when this answer was close to last in terms of its impact, it came in second in this edition, as chosen by 25% of responses.

29%

Figure 21. If you have invested in supply chain technology over the last two years, what has been the impact on the business of this investment?

Operational efficiencies

Reduced staffing requirements

25%

Increased customer satisfaction

15%

Improved performance reporting

14%

Winning new business

Profit increase

Not applicable

40%

20%

30%

10%

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

Rafał Witowski CFO, Board Member FIEGE sp. z o.o.

The logistics sector in Poland seems to be facing greater challenges this year than last year, but it is still in a better situation than in neighboring countries. Over the years, the role of local customers in the sector has increased, as has the demand among Poles for the products of our customers from Western countries,

which means that economic turbulence in Western Europe affects Poland to a lesser extent. At the same time, of course, we cannot underestimate the geopolitical instability and the constant question mark posed by the war in Ukraine and possible scenarios for its end.

Price instability on the market paradoxically forces the acceleration of long-term changes that are already inevitable, i.e. investments in green energy, continuous optimisation of processes and changes in habits. At the same time, technological development often significantly increases energy needs. Paradoxically, the fact that inflation is not a

new phenomenon in Poland makes it easier for all parties affected by these increases to understand the topic. The consistently high demand for the services of our sector in Poland for years also encourages people to make their own investment decisions, which, however, may be threatened by the rising cost of labour.

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

P3 Prague Horni Pocernice

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

3.6 Sustainability

In this year’s edition of our report, we decided to focus on the topic of sustainability more intensely and five questions were concerning it. We chose to ask our respondents what was their rationale behind investing in such initiatives. The answers differed between the groups of respondents. In general, logistics operators seem to have more reasons for adoption of sustainability projects. For them, the most often selected reasons were: meeting both contractual and informal requirements of stakeholders

and meeting regulatory and legislative requirements. Each of these answers were selected by 52% of logistics respondents. For manufacturers and retailers, the most often selected drivers were: meeting informal requirements of customers, suppliers or service providers (44%). It is interesting to see that informal requirements were regarded as more crucial than contractual (24%). Other, most often selected answers, by 40% of respondents each were: meeting regulatory and legislative requirements and making a positive environmental impact.

Figure 22. What is the main driver of your decision to invest in any sustainable/environmental/ ‘green’ (supply chain) projects or other Corporate Social Responsibility (CSR) projects? (select all that apply) Share of respondents nominating each answer category, will not sum to 100%

Man-Ret.

Logistics

Meet the UN requirements to become climate neutral by 2050

20%

28%

Enhance corporate reputation

44%

40%

Make a positive environmental impact

44%

24%

Make a positive social impact

40%

Attract and retain employees

16%

Attract investors

12%

16%

Optimise long term capital expenditures

24%

Achieve financial or tax benefits and credits

16%

32% 32%

Reduce costs and, or enhance productivity

Attract new customers or achieve top-line growth

28%

Meet contractual requirements of customers, suppliers or service providers

24%

52%

Meet informal expectations or requirements of customers, suppli ers or service providers’

44%

52%

12%

Keep up with competitors

36%

40%

Meet regulatory and legislative requirements

52%

10%

30%

50%

60%

20%

40%

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

In 2024 or the following year, 33% of respondents will optimise fleet fuel use, 31% plan to extend environmental initiatives to suppliers/ sub-contractors and 30% will utilise technology to drive environmental objectives. In the next two-three years (2026-2027), 32% of respondents plan to introduce heat pumps and 27% will invest in hydrogen energy management, but these were also the categories which recorded the largest share of respondents with no plans at all to invest – 50% and 41%, correspondingly.

We then asked respondents about the sustainability initiatives which they had already implemented, which were going to be implemented in the near and mid term future or those that are not planned. 61% of companies have already invested in recycling and procurement initiatives, 56% in warehouse energy saving solutions, 55% in staff initiatives and 53% in positive environmental impacts (such as landscaping).

Figure 23. Which of the “green” projects has your company already or will be investing in? (select already implemented/ planning in 2024-25/ planning in 2026-27/ planning after 2027 / no plans)

42%

Optimising fleet fuel use / investing in alternative energy vehicles

33%

16%

24%

15%

Electric vehicle charging points

17%

35%

56%

22%

Warehouse energy saving solutions

14%

11%

Hydrogen energy management

27%

50%

11%

32%

Heat pumps

41%

43%

18%

Preserving water resources

32%

53%

15% 15% 15%

Positive environmental impact

55%

9% 9%

Staff initiatives

25%

61%

20%

Recycling and procurement initiatives

16%

33%

30%

Utilising technology to drive environmental objectives

28%

29%

Extending environmental initiatives to suppliers / sub-contractors

31%

20%

16%

10%

20%

30%

40%

50%

60%

70%

Already implemented

2024-2025

After 2027

No plans

2026-2027

LOGISTICS AND SUPPLY CHAIN CONFIDENCE INDEX 2024

and retailers, while for logistics companies the operational capability/ range of new vehicles and the lack of investment in public vehicle refueling/ charging infrastructure were the most pressing reasons for 28% and 24% of the respondents, respectively.

We then asked respondents, more specifically, about their expectations for future fuel and energy use. The first topic regarded companies’ transition from diesel vehicles and reasons for delaying it.

Cost of transition was the prevailing reason for delay for 36% of manufacturers

Figure 24. What is the most important reason delaying your company’s transition from diesel vehicles?

We have other, more imme diate, priorities to consider

Uncertainty on future fuel choices (electric, gas, hydrogen or diesel)

16%

36%

Cost

20%

Inability to host onsite vehicle refuelling / charging infrastructure

16%

Lack of investment in public vehicle refuelling / charging infrastructure

16%

24%

20%

Operational capability / range of new vehicles

28%

10%

30%

20%

40%

Man-Ret.

Logistics

P3 Katowice City

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