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The parcel sortation market size is forecast to increase by USD 1.71 billion at a CAGR of 12.28% between 2023 and 2028. The market is experiencing significant growth due to the increasing demand for efficient and rapid delivery services in the e-commerce sector. High capacity sortation systems, incorporating advanced sorting technologies, are being adopted to meet the challenges of decreasing delivery times. Modular system designs offer investment barriers for businesses due to their initial high cost. However, these systems provide a competitive advantage through increased throughput and improved accuracy. Sustainability is also a key trend in the market, with companies integrating digital solutions to optimize sortation processes and reduce carbon footprint. As the market continues to evolve, the focus on automation and digitalization is expected to drive further growth.
The market is witnessing significant growth as businesses seek to streamline their logistics operations and improve operational efficiency in the face of rising labor costs and increasing customer expectations for faster delivery. This market encompasses various technologies and systems used in warehouses and distribution centers to automate the sorting process of parcels. Automation plays a crucial role in the market. Conveyor systems, scanners, sorters, and robotics are among the key hardware components used to automate sorting processes. These systems utilize machine vision and software to read barcodes and other data on parcels, enabling them to be sorted accurately and efficiently.
Furthermore, industrial automation, including loop systems and linear systems, is a significant trend in the market. These systems enable the automated sorting of parcels based on their destination, reducing the need for manual labor and minimizing sorting errors. Furthermore, the integration of the Internet of Things (IoT) and artificial intelligence (AI) in parcel sortation systems enhances real-time technical capabilities, ensuring faster and more accurate sorting. The omnichannel retail industry is a major vertical driving the growth of the market. With the increasing popularity of online shopping, retailers are under pressure to provide faster and more efficient delivery services. Parcel sortation systems help retailers meet these demands by automating the sorting process and reducing the time it takes to get parcels to their final destination.
Furthermore, capital expenditure and installation costs are essential considerations for businesses looking to implement parcel sortation systems. However, the long-term benefits of increased operational efficiency, reduced labor costs, and faster delivery times often outweigh the initial investment. Moreover, the adoption of smart warehouses, which integrate advanced technologies such as AI and robotics, can further enhance the efficiency and effectiveness of parcel sortation systems. Vanderlande, a leading provider of logistics automation solutions, is a notable player in the market. Their offerings include sorting systems, conveyor systems, and software solutions designed to optimize logistics operations and improve the customer experience. In conclusion, the market is an essential component of the logistics industry, enabling businesses to streamline their operations, reduce labor costs, and meet the growing demands of omnichannel retail. Through the adoption of automation, industrial automation, and advanced technologies such as AI and IoT, parcel sortation systems are helping businesses achieve operational efficiency, faster delivery times, and improved customer satisfaction.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The linear sortation system segment is estimated to witness significant growth during the forecast period. In the market, collaborations between companies are driving the adoption of advanced technologies to streamline operations and reduce labor costs. Industrial automation, such as the use of linear sorters and continuous material handling systems, is becoming increasingly popular. These systems utilize a sliding mechanism on the linear sorter to move parcels to their designated branches, which serve various purposes based on the parcel's destination. For instance, parcels may be sorted by order for picking or prepared for faster delivery. Capital expenditure and installation costs for these technologies are significant, but the benefits of increased efficiency and productivity outweigh the initial investment.
Furthermore, the Internet of Things (IoT) and Artificial Intelligence (AI) are also being integrated into parcel sortation systems to optimize operations and improve accuracy. Despite the initial capital expenditure, the long-term cost savings and faster delivery times make these investments worthwhile for businesses in the logistics industry.
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The linear sortation system segment accounted for USD 1.03 billion in 2018 and showed a gradual increase during the forecast period.
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.
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The market is projected to experience substantial growth in the upcoming years. In 2023, Germany and the United Kingdom held the largest market shares in Europe's parcel sortation sector. The expansion of parcel delivery services, particularly in the UK and Germany due to the e-commerce sector's growth, is driving the regional market. The increasing number of parcels being shipped poses challenges for courier and postal companies, leading to a heightened demand for parcel sortation systems. These systems facilitate the handling and sorting of shipping materials through automation, enhancing efficiency and productivity. The UK's aviation sector, coupled with the e-commerce industry's growth, significantly contributes to the European parcel sorting market.
Furthermore, parcel sortation systems play a crucial role in managing the increasing volume of parcels being shipped. Two common types of parcel sortation systems are pusher sorters and till tray sorters. Pusher sorters use a conveyor belt to move parcels and are ideal for sorting large volumes of parcels. Till tray sorters, on the other hand, use a tilting mechanism to sort parcels based on their size, weight, and destination. Advancements in technology, such as 3D machine vision, are being integrated into parcel sortation systems to improve accuracy and efficiency. While maintenance costs are a concern for companies implementing these systems, the revenue increase from streamlined operations and enhanced customer satisfaction outweigh the costs.
In conclusion, the European market is poised for growth, with Germany and the United Kingdom leading the way. The e-commerce sector and the aviation industry's expansion are the primary drivers of this growth. Parcel sortation systems, including pusher sorters and till tray sorters, are essential for managing the increasing volume of parcels and ensuring timely and accurate delivery. Technological advancements, such as 3D machine vision, further enhance the efficiency and productivity of these systems, making them a worthwhile investment for courier and postal companies.
Our researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Growing e-commerce industry is the key driver of the market. In today's digital age, the e-commerce industry's expansion is driven by the rise in Internet usage and the convenience of online shopping. E-commerce companies aim to differentiate themselves from traditional retailers through superior packaging and expedited delivery. To meet the demands of increasing product variety and the necessity for swift returns processing, e-commerce businesses heavily rely on third-party logistics providers.
Furthermore, automation has become essential in logistics operations, including warehouses and distribution centers, to enhance workflow efficiency and increase turnover. The implementation of conveyor systems, scanners, sorters, and software solutions for automation in parcel sortation is a response to the need for selective mass picking and the constant pressure to work at a faster pace. These technologies enable near 24/7 operations and contribute significantly to the success of e-commerce businesses.
Development of automated sortation systems is the upcoming trend in the market. In the material handling system sector, market leaders are investing heavily in research and development to gain a competitive edge. The integration of advanced technologies, such as AI, has accelerated industry growth. To meet consumer expectations for faster delivery times, businesses are developing high-capacity sortation systems. However, the postal industry faces challenges due to the limitations of existing sorting technologies, necessitating substantial up-front investments. Embracing digital solutions and sustainability are key trends driving market expansion. Modular system designs and the integration of future robotics are also important areas of focus. To remain competitive on a global scale, distributors are continually strategizing and seeking innovative solutions.
Moreover, the adoption of sorting technologies that can efficiently handle increasing volumes and improve delivery times is essential for businesses aiming to stay ahead of the competition. Investing in the research and development of sortation technologies offers significant returns. By implementing these systems, businesses can streamline operations, reduce costs, and improve customer satisfaction. The integration of AI and automation in sortation systems is expected to revolutionize the industry, enabling businesses to meet the demands of today's fast-paced marketplace. In conclusion, the material handling system sector is undergoing significant transformation, driven by the need for faster delivery times and the integration of advanced technologies. To remain competitive, businesses must invest in research and development, embrace digital solutions, and adopt sustainable practices. By doing so, they can generate sizable returns on investment and stay ahead of the competition.
High cost of implementation is a key challenge affecting the market growth. Parcel sortation systems, which incorporate technologies such as robotics, machine vision, and hardware, are essential for operational efficiency in various industry verticals, particularly omnichannel retail. The implementation of these systems involves significant upfront investment, including the purchase of trailers and docks, as well as customization to meet specific operational requirements. The cost benefits derived from these solutions justify the high initial investment for companies with closed-loop systems and high-speed dock door turnover needs, such as courier shipping companies. Moreover, the integration of advanced technologies like machine vision and robotics enhances the sorting process, ensuring customer satisfaction through faster delivery times and fewer errors.
However, maintenance costs are a crucial consideration, necessitating ongoing investment to keep these systems running smoothly. A single facility may require multiple parcel sortation systems to ensure seamless operations, especially in industries with high-volume requirements. Companies seeking to implement these systems must carefully weigh the costs against the potential benefits to their business operations.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis 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.
Alstef Group SAS - The company offers parcel sortation systems for courier, warehousing, and distribution facilities.
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key 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 is witnessing significant growth due to the increasing automation in logistics, particularly in warehouses and distribution centers. Automated sorting systems, including conveyors, scanners, sorters, and software, are being adopted to enhance operational efficiency and reduce labor costs. The integration of robotics, machine vision, and artificial intelligence is revolutionizing the industry, enabling high-capacity systems with faster delivery times and minimal sorting errors. The logistics sector, including omnichannel retail, is driving the demand for advanced sorting technologies. Hardware such as conveyors, scanners, and sorters are being integrated with digital solutions to create smart warehouses that offer real-time technical support and inventory management.
Furthermore, the use of modular system designs and collaborations between industry verticals is reducing investment barriers and increasing revenue for companies. The implementation of automated sorting systems comes with benefits such as improved customer satisfaction, lower maintenance costs, and a competitive advantage. However, capital expenditure and installation costs are significant challenges for companies looking to invest in these technologies. The integration of the Internet of Things, artificial intelligence, and 3D machine vision is enabling more sustainable and efficient sorting processes. Airports are also adopting automation in parcel sortation to handle increasing volumes and reduce delivery times. Technologies such as optical character recognition and barcode scanning are being used to streamline the sorting process and improve efficiency. Overall, the market is expected to continue growing as companies seek to improve operational efficiency and meet the demands of customers for faster delivery.
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Market Scope |
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Report Coverage |
Details |
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Page number |
157 |
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Base year |
2023 |
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Historic period |
2018-2022 |
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Forecast period |
2024-2028 |
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Growth momentum & CAGR |
Accelerate at a CAGR of 12.28% |
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Market growth 2024-2028 |
USD 1.71 billion |
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Market structure |
Fragmented |
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YoY growth 2023-2024(%) |
10.59 |
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Regional analysis |
Europe, North America, APAC, South America, and Middle East and Africa |
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Performing market contribution |
North America at 34% |
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Key countries |
US, China, Germany, France, and Italy |
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Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
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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. |
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Market dynamics |
Parent market analysis, market growth inducers and obstacles, market forecast, fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
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Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
We can help! Our analysts can customize this market research report to meet your requirements. Get in touch
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
Research Framework
Technavio presents a detailed picture of the market by way of study, synthesis, and summation of data from multiple sources. The analysts have presented the various facets of the market with a particular focus on identifying the key industry influencers. The data thus presented is comprehensive, reliable, and the result of extensive research, both primary and secondary.
INFORMATION SOURCES
Primary sources
Secondary sources
DATA ANALYSIS
Data Synthesis
Data Validation
REPORT WRITING
Qualitative
Quantitative
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