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Parcel Sorting System Market size was valued at USD 1.9 billion in 2022 and is anticipated to grow at a CAGR of over 7% between 2023 and 2032. Global parcel sortation system industry growth is driven by the increasing market competition and differentiation.
As competition in the e-commerce and logistics sectors intensifies, companies seek to differentiate themselves through efficient and reliable parcel sortation systems that streamline their supply chain operations. For instance, Vanderlande AutoSort Pro, launched in February 2023, is a high-speed parcel sortation system that can sort up to 10,000 parcels per hour. It is equipped with advanced features, such as barcode scanning and weight detection, that allow it to sort parcels accurately and efficiently. The changing technological landscape will help create a healthy growth trajectory for the parcel sortation system business.
Report Attribute | Details |
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Base Year: | 2022 |
Parcel Sorting System Market Size in 2022: | USD 1.9 Billion |
Forecast Period: | 2023 to 2032 |
Forecast Period 2023 to 2032 CAGR: | 7% |
2032 Value Projection: | USD 3.7 Billion |
Historical Data for: | 2018 to 2022 |
No. of Pages: | 300 |
Tables, Charts & Figures: | 271 |
Segments covered: | Component, Type, End-Use |
Growth Drivers: |
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Pitfalls & Challenges: |
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Consumer preferences for online shopping and the convenience of home delivery have significantly contributed to the demand for efficient parcel sortation systems. According to Eurostat, 87% of individuals aged between 25 and 34 years in Europe bought or ordered goods or services online in 2022. However, implementing advanced parcel sortation systems requires a significant upfront investment in terms of capital, technology, and infrastructure. This initial cost can be a barrier for some businesses, particularly smaller and mid-sized companies. Besides, integrating new parcel sortation systems with existing logistics and warehouse management systems can be complex and time-consuming. Compatibility issues, data migration, and operational disruptions during integration can pose challenges for businesses looking to adopt these systems.
The COVID-19 pandemic significantly impacted the demand for parcel sortation systems, driven by the surge in e-commerce and the transformation of consumer behavior. With lockdowns and social distancing measures in place, online shopping witnessed an unprecedented boom. This led to a substantial increase in parcel volumes, straining logistics operations. For instance, Amazon announced hiring thousands of employees and investing in warehouse expansion, highlighting the need for efficient parcel sortation systems to handle the escalated demand for rapid, accurate, and contactless deliveries during the pandemic.
Parcel sortation systems that offer modular design and scalability will allow businesses to adapt to changing demands more easily, thus gaining increased popularity. In January 2023, Siemens launched its new modular parcel sortation system, the FlexSort. It is designed to be scalable to meet the needs of any parcel sorting operation, from small businesses to large retailers. It is also easy to install and maintain, making it a cost-effective solution for businesses of all sizes. As parcel volumes fluctuate, modular systems can be expanded or contracted as needed without major disruptions, favoring their adoption over the coming years.
Based on component, the parcel sorting system market is segmented into hardware, software, and services. The hardware segment held around 40% of the market share and will expand commendably over 2023-2032. The hardware segment will witness exponential due to the industry's growing need for advanced automation and efficiency. As e-commerce and logistics operations expand, there's a heightened requirement for durable and high-performance components such as conveyor systems, robotic arms, sensors, and barcode scanners. Instances like DHL's investment in state-of-the-art parcel sorting technology highlight the urgency for reliable hardware solutions to meet escalating parcel volumes and ensure seamless sorting processes, driving the increased demand for these components.
Based on end-user, the parcel sorting system market is divided into transportation & logistics, retail & e-commerce, food & beverage, pharmaceutical and others. The retail & e-commerce segment dominates the market with around 20% revenue share in 2022. As consumers increasingly turn to e-commerce for their purchasing needs, retailers require efficient sorting solutions to handle the surge in parcel volumes and ensure timely deliveries. Parcel sortation systems enable streamlined order processing, accurate sorting, and optimized last-mile delivery, enhancing customer satisfaction. The ability to meet the fast-paced demands of online retail, expedite order fulfillment, and offer reliable shipping options fuels the adoption of these systems within the retail and e-commerce sector.
North America held over 30% parcel sorting system market share in 2022 and expected to grow at a significant CAGR through 2032. North America Parcel Sortation System industry will experience substantial growth due to the region's robust e-commerce landscape and technological advancements. The surge in online shopping has led to increased parcel volumes, compelling retailers, and logistics providers to invest in efficient sorting solutions. Additionally, the need for autonomous last-mile delivery to accommodate vast geographic areas and urban populations drives the demand for these systems. With a focus on optimizing supply chains, enhancing customer experiences, and meeting evolving consumer expectations, North America continues to drive the remarkable growth of the Parcel Sortation System industry.
Major companies operating in the parcel sorting system market are :
The parcel sorting system market research report includes in-depth coverage of the industry with estimates & forecast in terms of revenue (USD Billion) from 2018 to 2032, for the following segments:
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By Component
By Type
By End Use
The above information is provided for the following regions and countries: