Parcel Sortation System Market by Type (Activated Roller Belt Sorters, Pop Up Sorters, Shoe Sorters, Cross Belt Sorters, Tilt Tray Sorters), Offering (Hardware, Software, Services), Application (Logistics, E-commerce) - Global Forecast to 2028
[236 Pages Report] The global Parcel Sortation System Market Size is estimated to be worth USD 2.0 Billion in 2023 and is projected to reach USD 2.8 Billion by 2028, at a CAGR of 7.0% during the forecast period.
The market is expanding due to several factors. Significantly growing e-commerce industry and growing adoption of parcel sortation system in industry, labor cost inflation and increase in industrial automation. Additionally, rising demand for faster delivery is driving the growth of the market.
Parcel Sortation System Market Forecast to 2028
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Parcel Sortation System Market Trends
Driver: Thriving e-commerce industry and growing adoption of parcel sortation system in the industry
E-commerce refers to the buying and selling of products and services over the internet, and it has experienced explosive growth in recent years. The demand for e-commerce is increasing worldwide. This is driving the growth of the parcel sortation systems market as there is an increasing need to sort and deliver a greater number of parcels. This growth can be attributed to various factors, including the increasing convenience and accessibility of online shopping, improved logistics and shipping networks, and a shift in consumer preferences towards digital platforms. According to the US Department of Commerce, e-commerce sales as a percentage of the total retail sales in the US have increased from USD 503.3 billion in 2019 to USD 856.8 billion in 2022, contributing 9% and 11.2%, respectively.
Restraint: Higher costs related to deployment and maintenance of parcel sortation systems
The expenses related to parcel sortation systems broadly include the initial capital expenditure for purchasing the sorting equipment, installation costs, ongoing maintenance, repairs, and upgrades. The set up and installation of parcel sortation systems requires high capital expenditure as it involves the installation of conveyors, actuators, and belts, among others. These costs can burden budgets and make it difficult for firms to justify the investment, especially for smaller organisations or those with limited resources. Depending on the sorting capacity of the overall system, the installation project cost can reach up to USD 2–5 million. The high costs discourage several midsized and small end users that opt for traditional/manual parcels sorting systems; this affects the overall demand for parcel sortation systems. Several companies abstain from investing in parcel sorting systems due to high initial investments and a long payback period.
Opportunity: Integration of emerging technologies like AI, Industry 4.0, IoT, with sorting systems
The evolution of traditional warehouses into smart, connected, and more efficient automated warehouses through integrating Industry 4.0 has provided huge growth opportunities for the companies in the parcel sortation systems market. The deployment of Industry 4.0-based systems creates an operational environment with optimal output through integrating, automating, and managing the logistic movement of goods inside a warehouse, a distribution center, or a fulfillment center. The increasing adoption of Industry 4.0-based systems necessitates transitioning traditional or manual ways of all operations in a supply chain, such as sorting, picking, and transporting, toward automation. This is expected to boost the adoption of parcel sortation systems.
The increasing adoption of Internet of Things (IoT) systems in the field of warehouse management and logistics is another trend expected to revolutionize manufacturing operations. IoT devices, along with radio-frequency identification (RFID) and sensors, offer several benefits in terms of reduced labor costs, increased shipment accuracy and operation speed, improved tracking, and enhanced visibility for retailers, among others. Moreover, Incorporating AI algorithms into parcel sortation systems can enable intelligent decision-making skills. The modular architecture of Industry 4.0 and IoT systems enables simple scaling, allowing greater package volumes and seamlessly expanding operations.
Challenge: Real-time technical issues during sortation
Real-time technical challenges related to any sensing element in a parcel sorting system could disrupt the entire sorting process. For instance, if the camera or sensor installed in a parcel sortation system is not able to read a barcode properly, it would not be able to react effectively to a given command. Camera or sensor failure can also lead to the halting of the process, resulting in a delay in the entire production process. Mechanical failure may also be the consequence of improper maintenance; it may cause decreased production and poor performance. Parcel sortation systems are designed to handle standard package sizes and shapes. However, irregularly shaped, or damaged parcels can pose challenges during sorting. Moreover, any fault in the control software may lead to the improper functioning of the parcel sortation system. Sorting errors can arise when parcels are routed incorrectly or directed to the wrong destination. This might occur as a result of technical flaws in the sorting mechanism, misalignment of diverters or conveyors, or faulty sensors that detect package qualities.
Parcel Sortation System Market Ecosystem
Parcel Sortation System Market: Key Trends
Vanderlande,Beumer Group, Honeywell International, Bastian Solutions, and Fives are the top players in the parcel sortation system market. These parcel sortation system companies boast sortation technology trends with a comprehensive product portfolio and solid geographic footprint.
Loop parcel sortation system to grow with highest CAGR during the forecast period 2023-2028.
Loop or circular parcel sorters are used to sort parcels or cartons in facilities with space constraints or challenging layouts. These sorters can handle tight-radius curves as well as inclines and declines, thereby maximizing space utilization. Parcel induction points and sortation destinations can be arranged in several ways enabling users to utilize space better and achieve optimal sortation system performance. Moreover,the Loop Parcel Sortation System can seamlessly integrate with existing warehouse management systems, allowing for streamlined operations and real-time tracking of parcels. This integration enables efficient inventory management, order fulfillment, and enhanced visibility throughout the supply chain.
Logistics application of parcel sortation system to account for the largest share in the market during forecast period.
The rising demand for faster delivery is a key driver for the expansion of the Logistics application market. Logistics companies are facing challenges in terms of delivery of parcels, such as increasing volume of parcels or cartons, growing pressure to meet service level demands, shorter order delivery time, smaller orders, and rising need to provide accuracy in terms of order delivery. These all challenges can be resolved by adoptiong the parcel sortation systems. These systems ensure precise and effective parcel routing by automating the sorting procedure. They identify and sort parcels according to their destination, size, weight, or other specifications by scanning barcodes or using cutting-edge technology like optical character recognition. These companies use parcel sortation systems to expedite the delivery of parcels to their respective destinations while maintaining a high level of customer service.
Software segment to grow with a highest CAGR in the market during forecast period
Software in a parcel sortation system is used for analyzing the data about a parcel’s parameters generated via sensors and cameras. It is also used to make logical reasoning to sort packages and forward them to their respective destinations, through diverters and conveyor systems, It enables automation, tracking, and coordination of various components within the system, ensuring smooth package flow, accurate sorting, and real-time monitoring. Earlier, companies used historical data for decision making and sorting; however, with the adoption of Industry 4.0 and IoT applications, a large volume of data is generated to make decisions through the software installed in the parcel sortation systems.
North America held the largest share of the parcel sortation system market in 2022.
The parcel sortation market in North America is a rapidly growing market for the logistics and e-commerce industries. North America, comprising countries like the US and Canada, has a robust and highly developed logistics infrastructure, propelling the demand for efficient parcel sortation systems. North America also has a thriving logistics industry driven by critical factors such as extensive supply chains and warehousing and distribution networks. Parcel sortation systems play a crucial role in optimizing the flow of packages through these complex logistics networks and ensuring accurate and timely deliveries.
Parcel Sortation System Market by Region
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Key Market Players
The major companies in the parcel sortation system market include Vanderlande (Netherlands), Beumer Group (Germany), Honeywell International (US), and Bastian Solutions (US), Fives (France). These companies have used both organic and inorganic growth strategies such as product launches, acquisitions, and partnerships to strengthen their position in the parcel sortation system companies.
Parcel Sortation System Market Report Scope:
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Report Metric |
Details |
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Estimated Market Size in 2023 |
USD 2.0 Billion |
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Projected Market Size in 2028 |
USD 2.8 Billion |
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Growth Rate |
CAGR of 7.0% |
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Years Considered |
2019–2028 |
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Base year considered |
2022 |
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Forecast period |
2023–2028 |
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Forecast units |
Value (USD million/billion) |
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Segments Covered |
Offering, Type, and Application |
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Regions covered |
North America, Asia Pacific, Europe, and Rest of the World |
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Companies covered |
Vanderlande (Netherlands), Beumer Group (Germany), Honeywell International (US), and Bastian Solutions (US), Fives (France). |
Parcel Sortation System Market Highlights
In this report, the overall parcel sortation system market has been segmented based on offering, type, application, and region.
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Segment |
Subsegment |
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By Offering |
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By Type |
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By Application |
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By Region |
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Recent Developments
- In March 2022, Vanderlande has announce a new automated piece picking robot as an addition to its smart item robotics (SIR) portfolio of technologies, which fits with Vanderlande’s strategy of accelerating the use of robotics for warehousing.
- In December 2021, Beumer Group has introduced a new type of small- and medium sized parcels sortation system into operation.
- In May 2021, Fives launched website for Smart Automation Solution. The new site, which replaces the previous Automation and Intralogistics pages, emphasises the Division's capacity to deliver a comprehensive offering for all markets.
Frequently Asked Questions (FAQ):
What is the market size for parcel sortation system market expected in next 5 years?
The parcel sortation system market is estimated to be worth USD 2.0 billion in 2023 and is projected to reach USD 2.8 billion by 2028, at a CAGR of 7.0% during the forecast period. The growth of the battery energy storage system market is primarily driven by the Thriving e-commerce industry and growing adoption of parcel sortation system in industry, and labor cost inflation and increase in industrial automation.
Who are the global parcel sortation storage system market winners?
Companies such as Vanderlande, Beumer Group, Honeywell International, and Bastian Solutions, Fives fall under the winners’ category.
Which region is expected to hold the highest share of the parcel sortation storage system market?
North America is expected to dominate the parcel sortation storage system market in 2023. The market growth in North America can be attributed to the presence of major logistics and e-commerce companies in the region. The growth of the parcel sortation system market in the US can be attributed to the large industrial base particularly for logistics, e-commerce, airports, pharmaceutical & medical supply, and food & beverage. Also, it can be attributed to the expectations of the customers for fast and efficient delivery. Factors such as integration of Industry 4.0 and IoT with warehouse distribution systems are expected to boost the demand for parcel sortation systems in the country.
What are the major drivers and opportunities related to the parcel sortation system market?
Thriving e-commerce industry and growing adoption of parcel sortation system in industry and unfolding the new application areas of parcel sortation system are some of the major drivers and opportunities for the parcel sortation system market.
What are the major strategies adopted by parsel sortation system companies?
The companies have adopted product launches, acquisitions, expansions, and contracts to strengthen their position in the parcel sortation system market.
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The study involves four major activities that estimate the size of the parcel sortation system market. Exhaustive secondary research was conducted to collect information related to the market. Following this was validating these findings, assumptions, and sizing with the industry experts across the value chain through primary research. Both top-down and bottom-up approaches were employed to estimate the overall size of the parcel sortation system market. Subsequently, market breakdown and data triangulation procedures were used to determine the extent of different segments and subsegments of the market.
Secondary Research
Secondary sources in this research study include corporate filings (such as annual reports, investor presentations, and financial statements); trade, business, and professional associations; white papers, certified publications, articles from recognized authors; directories; and databases. The secondary data were collected and analyzed to estimate the overall market size, further validated by primary research.
Primary Research
In the primary research process, numerous sources from both supply and demand sides were interviewed to obtain qualitative and quantitative information about this report. The primary sources from the supply-side included various industry experts such as Chief X Officers (CXOs), Vice Presidents (VPs), and Directors from business development, marketing, product development/innovation teams, and related key executives from parcel sortation system providers, such as Vanderlande (Netherlands), Beumer Group (Germany), Honeywell International (US), and Bastian Solutions (US), Fives (France).; research organizations, distributors, professional and managed service providers, industry associations, and key opinion leaders. Approximately 25% of the primary interviews were conducted with the demand side and 75% with the supply side. These data were collected mainly through questionnaires, emails, and telephonic interviews, accounting for 80% of the primary interviews.
To know about the assumptions considered for the study, download the pdf brochure
Market Size Estimation
In the market engineering process, both top-down and bottom-up approaches were implemented, along with several data triangulation methods, to estimate and validate the size of the parcel sortation system market and other dependent submarkets listed in this report.
- The key players in the industry and markets were identified through extensive secondary research.
- Both the supply chain of the industry and the market size, in terms of value, were determined through primary and secondary research.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
Market Size Estimation Methodology-Bottom-up Approach
Market Size Estimation Methodology-Top-Down Approach
Data Triangulation
After estimating the overall market size, the total market was split into several segments. The market breakdown and data triangulation procedures were employed wherever applicable to complete the overall market engineering process and gauge exact statistics for all segments. The data were triangulated by studying various factors and trends from both the demand and supply sides. The market was also validated using both top-down and bottom-up approaches.
Market Definition
A parcel sortation system is an automated system used by logistics companies and shipping carriers to automate the sorting and routing of parcels or packages. This system helps to efficiently process large parcels and ensure timely delivery to the intended destinations. A parcel sortation system comprises several sub-components working together under the direction of a warehouse management system or warehouse control system and machine controllers. It enables automated parcel sorting, which can be done based on several parameters, including size, volume, bar code reading, or fragility of the items in the parcel.
Key Stakeholders
- Government bodies and policymakers
- Industry organizations, forums, alliances, and associations
- Market research and consulting firms
- Raw material suppliers and distributors
- Research institutes and organizations
- Original equipment manufacturers (OEMs) of parcel sortation systems
- Traders and suppliers
- Parcel sortation system manufacturers
- Engineering and manufacturing companies
- E-commerce and retail companies
- Logistic companies
- Airports
- Pharmaceuticals and medical suppliers
- Retail service providers
- Research organizations and consulting companies
- Technology investors
- Technology standard organizations, forums, alliances, and associations
- Associations and industrial bodies
The main objectives of this study are as follows:
- To define, describe, and forecast the global parcel sortation system market, based on type, offering, application, and region, in terms of value
- To forecast the market size, in terms of value, for various segments with respect to four main regions, namely, North America, Europe, Asia Pacific, and Rest of the World (RoW), in terms of value
- To provide detailed information regarding the major drivers, restraints, opportunities, and industry-specific challenges influencing the growth of the market
- To strategically analyze the micromarkets1 with respect to individual growth trends, future prospects, and contribution to the total market
- To analyze the probable impact of the recession on the market in the future
- To provide a comprehensive overview of the value chain of the parcel sortation system ecosystem
- To profile the key players and comprehensively analyze their market rankings and core competencies2
- To analyze the competitive developments such as contracts, expansions, partnerships, and product launches in the parcel sortation system market
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To analyze the opportunities in the market for various stakeholders by identifying
the high-growth segments of the parcel sortation system market and provide a detailed competitive landscape for the market players
Available Customizations:
With the given market data, MarketsandMarkets offer customizations according to the specific requirements of companies. The following customization options are available for the report:
Country-wise Information:
- Analysis for additional countries (up to five)
Company Information:
- Detailed analysis and profiling of different market players (up to five)
Growth opportunities and latent adjacency in Parcel Sortation System Market
Interested in seeing the break down of sortation systems by type and the growth in each region. Can you provide me with the estimates?
We have parcel business under the name of SCG Logistics in Thailand, and we are interested in parcel sortation system, hope these information could help us a lot to improve business growth. Can you provide us with the same? Also I would like to understand the scope of parcel sortation in Thailand.