The global logistics automation market size is expected to reach $90-billion by 2030, with a compound annual growth rate (CAGR) of 14,7%, according to a new report by Grand View Research.
Logistics operations are critical factors in the smooth functioning of the supply chain of any business, especially low-margin, high-volume businesses.
The logistics sector is witnessing a continuous increase in investments with a significant emphasis on the automation of several logistics functions. Automation enhances efficiency and aids in integrating supply chains; thus, automation is increasingly getting adopted across sectors.
The growing tendency of the logistics industry towards adopting automation solutions is one of the significant factors driving the growth of the logistics automation industry.
According to a DHL report published in 2018, 80% of warehouses do not have any automation support and are still operated manually, while 15% of the total warehouses are just mechanised, which means the warehouses use sorters, conveyors, picker solutions, and other machined equipment which are not necessarily automated.
The report states that only 5% of total warehouses are automated. The trend displays a remarkable opportunity for the growth of the market in the coming years as companies are increasingly adopting automation in their warehouses, including autonomous robots, automated sorting systems and conveyor systems.
Technological development such as communication technologies, sensors, tracking devices, computer vision, artificial intelligence, and machine learning are aiding the growth of the target market.
The e-commerce boom is resulting in increasing adoption of automation solutions owing to the enormous volumes of shipments. The e-commerce shipment volume is growing exponentially by the year, and hence the warehouses require automation solutions to meet the short delivery timelines.
The e-commerce fulfillment centres are implementing automated sorting and conveyor systems and highly benefit from inventory management and order management software. Moreover, the major labor challenges faced by the logistics industry across the globe are driving the demand for logistics automation solutions.
The Covid-19 pandemic accelerated the adoption of automation technologies such as robots, conveyors, and automation software, among others, in the logistics sector. The imposed lockdowns and social distancing norms necessitated the deployment of automation tools in warehouses and logistics functions. Although there were shortages and delays in receiving the hardware equipment during the lockdown, the market displayed a positive growth trend from 2020 to 2022.
Grand View Research’s logistics automation market report highlights include:
* The hardware segment dominated the market in 2022 with a market share of about 67%. Autonomous robots are the largest sub-segment of hardware components in terms of revenue owing to the increasing demand for automated warehouse logistics.
* The inventory & storage management function segment is anticipated to grow at a CAGR of 15,8% during the forecast period. The inventory & storage management ensures the stocks are maintained at optimum levels, and the demand for each product determines the stock levels.
* The sales logistics segment dominated the market in 2022, accounting for a market share of about 36%. Sales logistics is a critical aspect of the supply chain as it involves moving or delivering goods to the end consumer.
* The small and medium enterprises segment is anticipated to grow at the fastest CAGR of 15.6% during the forecast period. The growth can be attributed to the automation that helps SMEs to optimise their labour costs.
* The order management software segment held the largest market share in 2022. The dominance of the segment is owing to the need to fulfill the orders correctly and without any delivery delays. The order management process starts when an order is placed and ends when the customer receives the order.
* The retail and e-commerce segment is anticipated to grow at a CAGR of 15,2%. The growth can be attributed to the increasing preference for online shopping among consumers across the globe.
* The Asia Pacific segment is anticipated to register significant growth with a CAGR of 17,2%. The growth can be attributed to the increasing investments in logistics infrastructure projects in countries such as India and China.