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The parcel sortation market is estimated to grow by USD 1.71 billion, at a CAGR of 12.28% between 2023 and 2028. The market is experiencing significant growth, driven by the burgeoning e-commerce industry and the increasing industrial automation processes. As more consumers opt for online shopping, the volume of parcels requiring sorting and distribution continues to rise. Simultaneously, labor costs are escalating, making the implementation of automated sortation systems an attractive solution for businesses seeking to streamline operations and reduce expenses. Furthermore, the transportation and logistics sectors are experiencing heightened activity due to the increase in e-commerce transactions, necessitating advanced sortation technologies to ensure efficient and timely delivery of parcels.
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The market share growth by the linear sortation system segment will be significant during the forecast period. The commodities are transported and delivered to their designated stations using a sliding mechanism on the linear sorter, which is a sorting and distribution system. The linear sorter has a speed of about 3 m/s and is appropriate for products with smooth surfaces (cartons or containers).
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The linear sortation system segment was valued at USD 1.03 billion in 2018. A continuous material handling system is used for this form of sorting and distribution. As a result, the inventory is moved from point A to point B using a conveyor belt that runs automatically and continually. The individual commodities move into the branches that have been designated for them while the conveyor belt is continuously in operation. Depending on the bearing, the branches serve a variety of purposes. For example, the items are sorted by order for picking or delivery. If the products are stored, in another scenario, by kind. Before each branch, the system scans the inventory or analyses the weight and/or dimensions of the relevant products to determine whether the inventory has to turn at that branch or if it can continue moving along the main conveyor belt. The push-off devices are extended if the inventory needs to be transferred to the conveyor belt with branches. These do not affect the conveyor belt when not in use since they are positioned between or above the rollers of the conveyor belt. After that, the inventory retracts the push-off device, also known as the shoes, and travels along its designated course. The sorting and distribution system as a whole need not be paused during this procedure. A manual sorting procedure makes mistakes like inaccurate labeling and missorts that can delay the delivery of items and may ultimately lead to dissatisfied customers. Utilizing automated package sorting ensures consistent, precise results. Such factors are expected to drive the growth of the segment in the global market during the forecast period.
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North America is estimated to contribute 34% to the growth of the global market during the forecast period. Technavio's analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. Another region offering significant growth opportunities to companies is Europe. Parcel delivery is expanding across Europe as a result of the e-commerce boom, especially in nations such as the UK and Germany. The demand for parcel sortation systems is increasing as a result of the rising demand for delivered goods and the usage of automation in handling and sorting shipping materials. Furthermore, the UK's aviation sector, along with the e-commerce growth, is what drives the market for parcel sortation systems. Europe is expanding steadily. Smart technologies are being more widely used, with European makers of packet sorter systems adopting robot- and AI-based packet sorting systems. Germany makes a significant contribution to the expansion of the European market. To improve the distribution process, the nation is progressively employing automation technology. These elements are anticipated to stimulate the market for parcel sortation systems in Europe during the forecast period.
The market is witnessing significant growth due to the increasing demand for automation in logistics and warehouse. The market is driven by the need for operational efficiency in distribution centers and the rise of omnichannel retail. Parcel sortation systems are essential for handling and sorting parcels in a timely and accurate manner. These systems include conveyors, scanners, sorters, and software. Automation plays a crucial role in parcel sortation, with robotics and machine vision technology being widely adopted. The use of loop and linear systems, along with hardware and industry-specific software, enables real-time technical sorting and reduces sorting errors. The implementation of the Internet of Things (IoT) and Artificial Intelligence (AI) in smart warehouses further enhances the sorting process. Industry verticals such as e-commerce, retail, and healthcare are major consumers of parcel sortation systems. Labor cost inflation and the need for faster delivery have led to increased capital expenditure and installation costs for these systems. Leading companies in the parcel sortation market include Vanderlande and Logistics Application. Overall, the market is expected to grow significantly in the coming years, driven by the need for operational efficiency and the integration of advanced technologies like AI and robotics.
The increase in the e-commerce industry prominently propels market growth. With increased internet accessibility and online shopping adoption, e-commerce experiences notable expansion. Timely delivery and quality packaging stand as crucial differentiators for e-commerce entities competing with traditional retailers. The demand for automation increase, driven by e-commerce players seeking flexibility, expanded SKUs, and efficient returns processing, often relying on third-party logistics partners.
Further, e-commerce's evolution necessitates selective mass picking, leading major players like Amazon to enhance customer experiences through partnerships with advanced logistics providers. This increasing reliance on e-commerce fosters demand for parcel sortation systems, especially as wholesalers automate operations to meet escalating delivery demands, further catalyzing market expansion.
The development of automated sortation systems is one of the emerging market trends. The ability of AI to accelerate virtual development in every industry has greatly aided the expansion of the material handling system sector. To offer same-day delivery, businesses are creating reliable sortation systems. Additionally, the development of future robotics and significant investments in its research and development fuel market expansion. To meet rising demand, businesses everywhere are changing and embracing cutting-edge technology. To generate sizable returns on investments, distributors constantly strategize for the future and ways to beat out the competitors on a worldwide scale.
Moreover, rich data insights are provided by the automated parcel sortation systems for improving operational effectiveness and customer satisfaction. Moreover, modern sorters' flexibility and scalability enable merchants and shippers to increase their assets in accordance with market developments. Thus, such factors are expected to drive the growth of the global market during the forecast period.
The high cost of implementation is a major challenge impeding market growth. Since parcel sortation systems involve the use of sensors, software, and advanced technologies, their prices are considerably high and require a large initial one-time payment. Also, investments in trailers and docks, as well as in their modification, add to the costs. The costs appreciate depending on customization and other operational requirements based on the industry. Since these are expensive to implement, only companies that derive significant cost benefits from implementing these solutions invest in them. Small- and medium-sized enterprises (SMEs), on the other hand, find it difficult to invest in such systems due to their limited cash flow in operations.
However, while these systems offer significant savings in labor costs, the lack of widespread awareness among potential end-users about cost-reduction procedures limits their implementation. This is a major deterrent to market growth, especially in labor-intensive economies, where cheap manual labor is available. Thus, the high cost of implementation will become a major challenge for the growth of the global market during the forecast year.
The market research and growth report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. The market growth analysis focuses on adoption rates in different regions based on penetration. Furthermore, the market growth and forecasting report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
The market forecasting report also includes detailed analyses of the competitive landscape of the market and information about 15 market Companies, including:
Qualitative and quantitative analysis of Companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize Companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize Companies as dominant, leading, strong, tentative, and weak.
The market research report provides comprehensive data (region wise segment analysis), with forecasts and estimates in "USD Billion" for the period 2024 to 2028, as well as historical data from 2018 to 2022 for the following segments.
The parcel sortation market is rapidly evolving, driven by advancements in sorting technologies and digital solutions. High capacity systems like loop parcel sortation and linear parcel sortation are essential for enhancing efficiency in warehouses and logistics sectors. Modular system designs, including cross belt sorters, pusher sorters, and shoe sorters, offer flexibility and scalability, crucial for meeting varied sorting needs. Optical character recognition and barcode scanning technologies are key for accurate inventory management and packet sorting, while 3D machine vision enhances sorting precision. Despite the competitive advantage provided by automation, investment barriers and maintenance costs pose challenges. To address these, companies are focusing on sustainability and forging collaborations to optimize delivery times and reduce costs. Automation in airports and other sectors is also driving revenue increase, underscoring the importance of efficient sortation systems in modern logistics.
Market Scope |
|
Report Coverage |
Details |
Page number |
157 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 12.28% |
Market growth 2024-2028 |
USD 1.71 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
10.59 |
Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
Performing market contribution |
North America at 34% |
Key countries |
US, China, Germany, France, and Italy |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Alstef Group SAS, Beumer Group GmbH and Co. KG, Daifuku Co. Ltd., Equinox MHE, Falcon Autotech Pvt Ltd, FIVES SAS, GBI Intralogistics Inc., Grey Orange Pte. Ltd., Honeywell International Inc., Interroll Holding AG, Intralox LLC, Invata Intralogistics Inc., KION GROUP AG, L. Possehl and Co. mbH, Murata Machinery Ltd., Northrop Grumman Corp., Okura Yusoki Co. Ltd., Pitney Bowes Inc., Siemens AG, and Toyota Industries Corp. |
Market dynamics |
Parent market analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, Market growth and Forecasting, COVID 19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the market forecast period |
Customization purview |
If our report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Type
7 Market Segmentation by Service Type
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Opportunity/Restraints
11 Competitive Landscape
12 Competitive Analysis
13 Appendix
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