Automated Sortation System Market Size, Share & Trends Analysis Report By Type (Linear Sortation, Loop Sortation), By End-use Industry (Retail & E-commerce, Transportation & Logistics), By Region, And Segment Forecasts, 2020 - 2027

Report Overview

The global automated sortation system market size was valued at USD 4.72 billion in 2019 and is expected to grow at a compound annual growth rate (CAGR) of 5.2% from 2020 to 2027. Automated sortation systems are used to sort numerous products, including consumer goods, luggage, mail, and parcel, based on various aspects such as destination, color, and product type. The rising need for a reduction in inventory and handling processes is anticipated to drive the market over the forecast period. Organizations from various industries are focusing on optimum utilization of their inventory by offering just-in-time delivery services. This has led to the demand for automated solutions for efficient management of operations at distribution centers. The outbreak of the COVID-19 (coronavirus) led various countries to impose strict lockdown measures during the initial stages of the pandemic.

This, in turn, encouraged individuals to switch from their traditional shopping methods to online shopping of life essential goods. Moreover, companies are forced to follow social distancing norms at workplaces due to which the investments in automation and connected solutions increased. According to Honeywell Intelligrated, companies from retail and e-commerce, logistics, and food and beverage sectors are willing to invest more in automation solutions, which will positively impact the market growth over the forecast period.

Rising adoption of Internet of Thing (IoT) technology is paving the way for market growth during the forecast period. Market players are focusing on utilizing the technology to enhance their product offering and meet the various sortation requirements of end-users. Sortation plays a vital role in pharmaceutical companies. These companies face wastage issues as products that are sorted outside their storage temperature range for a long time are rendered unusable. In order to overcome this challenge, market players are utilizing IoT connectivity and provide sortation at high speed and better visibility related to the location of the product.

High initial investments in the manufacturing of these systems are adversely affecting the growth of the automated sortation systems market. Moreover, market players need to manufacture systems that meet the standards set by various regulatory bodies. This limits the growth prospects for market players. However, with the growing tourism, the need for these products at airport facilities for sorting luggage is expected to drive the market growth over the next seven years.

Increasing investments in warehouse automation in various sectors are expected to boost the market over the forecast period. For instance, in June 2017, Coca-Cola European Partners announced investment worth USD 49.6 million in its automated warehouse at its factory in the U.K. The investment was done to increase the facility’s storage capacity and will have systems that are capable of automatically moving around 25,000 pallets. Additionally, the rising adoption of pouch/pocket sorters in clothing and apparel applications is anticipated to drive the growth over the forecast period.

Type Insights

The linear sortation segment held the highest market share of 51.48% in 2019. The segment comprises of numerous sortation systems, including shoe sorters, narrow belt sorters, tilt tray sorters, and cross-belt sorters. These systems are mainly used in cross-docking applications. These systems are built for maximum performance and are reliable for having a long operational life.

The loop sortation segment is projected to grow at a CAGR exceeding 4% during the forecast period. Loop sortation segment consists mainly of tilt tray sorters, cross belt sorters, Bombay sorters, and pouch/pocket sorters. Loop sortation systems are also known as circular sortation systems and are configured with tight radius curves for optimum utilization of the warehouse space. These systems are typically used in pharmaceutical applications. 

End-use Industry Insights

The retail and e-commerce segment held the largest market share of 29.86% in 2019. The growing number of internet users coupled with the ease of online shopping has led to an increase in the number of products ordered online. This has led to various retailers to automate their daily operations to meet the scheduled delivery time. With the number of internet users increasing annually, it is expected that the segment will maintain its high market share during the forecast period.

The food and beverage segment is anticipated to expand at a CAGR of over 3% during the forecast period. This growth is attributable to the increasing adoption of warehouse automation technology in the sector. Major companies in this sector including, PepsiCo, Cargill, Inc., and Nestle S.A., are focusing on automating their warehouse operations to meet the ever-growing demand. Market players such as Bastian Solutions, Inc., and Dematic are also focusing on offering products to companies in this sector and enhance their market share.

Regional Insights

Europe held the largest market share of 34.73% in 2019. This is due to the presence of prominent market players such as Siemens AG, KNAPP AG, and Beumer Group Gmbh. Rising demand in the transportation and logistics sector is anticipated to drive the market growth. Moreover, according to the World Bank Group, European countries have a high logistics performance index (LPI) score compared to countries from other regions. Furthermore, European companies such as System Logistics S.p.A. and DHL International GmbH widely use automation for their warehouse operations, owing to which the region is projected to maintain its high market share from 2020 to 2027.

Asia Pacific is estimated to expand at the highest CAGR exceeding 5% over the forecast period. This is attributable to the increasing adoption of online shopping among developing countries such as China and India. According to the India Brand Equity Foundation (IBEF), the Indian e-commerce market is anticipated to reach USD 200 billion by 2026 compared to USD 38.5 billion in 2017. Moreover, the Industry 4.0 revolution in this region is expected to increase the usage of automated technologies, which will create huge potential for market growth over the forecast period.

Key Companies & Market Share Insights

The key players are opting for inorganic growth strategies such as acquisitions and mergers to enhance their market share. For instance, in August 2019, Interroll Group acquired parts of the business activities and assets of its IBH ehf, the company’s sales agent in Iceland and Faroe Islands. The acquisition was done to strengthen the former company’s sales and service offerings in the food and beverage sector. Market players are also focusing on investing heavily in their facilities to manufacture products that cater to the end-user requirements. For instance, in March 2018, KNAPP AG announced its plans to invest in an innovation center in Austria. The company plans to utilize the new facility for the development of technologically warehouse logistics systems and gain a competitive advantage in the market. Some of the prominent players in the automated sortation system market include:

• Bastian Solutions, Inc.

• Beumer Group Gmbh

• Daifuku Co. Ltd.

• Dematic (KION Group AG)

• Honeywell Intelligrated

• Interroll Group

• KNAPP AG

Automated Sortation System Market Report Scope

Segments Covered in the Report

This report forecasts revenue growth at the global, regional, and country levels and provides an analysis of the latest industry trends in each of the sub-segments from 2016 to 2027. For the purpose of this study, Grand View Research has segmented the global automated sortation system market report based on type, end-use industry, and region:

• Type Outlook (Revenue, USD Million, 2016 - 2027)

  • Linear Sortation

  • Loop Sortation

• End-use Industry Outlook (Revenue, USD Million, 2016 - 2027)

  • Retail & E-commerce

  • Food & Beverages

  • Transportation & Logistics

  • Pharmaceutical

  • Others

• Regional Outlook (Revenue, USD Million, 2016 - 2027)

  • North America

    • The U.S.

    • Canada

  • Europe

    • The U.K.

    • Germany

    • France

  • Asia Pacific

    • China

    • India

    • Japan

  • Latin America

    • Brazil

    • Mexico

  • The Middle East & Africa