Sortation Systems Market Size (2024 - 2029)

Sortation Systems Market Analysis

The Sortation Systems market was valued at USD 5291.2 million in 2020 and is expected to reach USD 6886.7 million by 2026 and grow at a CAGR of 4.47% over the forecast period (2021-2026). The pandemic has demonstrated the need for terminals and ports to respond to dramatic changes in global logistics patterns immediately and the robustness of automated solutions compared to traditional crewed operations. Further, in the post-COVID world, terminals are adapting to the changing business landscape and leading to a highly rapid acceleration of remote capabilities and digitalization of operations. Operators are increasingly deploying terminal automation solutions that are anticipated to evolve to become more standardized, easier to deploy, and replicable from one installation to another.

• With the rapid growth in stock-keeping units (SKUs), wholesalers and distributors find it hard to make informed decisions about their operations. This drives the need for the more innovative use of labor, equipment, and technology.
• Additionally, the increasing number of available products and demand for more frequent and smaller deliveries in the current competitive landscape automates distribution operations. It can immediately increase an organization's order accuracy by half a percent up to several percentage points.
• Moreover, the adoption of Internet of Things (IoT) technology covers market growth during the forecast period. The players in the market are focusing on utilizing the technology to enhance their product offering and meet the various requirements of different end-users. Further, sortation plays a vital role in pharmaceutical companies. These companies face wastage issues because their products that are sorted outside their storage temperature range for a long time are rendered unusable. To overcome this challenge, market players utilize IoT connectivity and provide sortation at high speed and better visibility related to the product's location.
• High initial investments in the manufacturing of these systems adversely affect the growth of the automated sortation systems market. Moreover, the players need to manufacture systems that meet the standards set by various regulatory bodies. This limits the development of market players. However, with the growing tourism, these products at airport facilities for sorting luggage are expected to drive market growth over the next few years.
• Further, increasing investments in warehouse automation in various sectors are expected to boost the market over the forecast period. For instance, Coca-Cola European Partners announced an investment worth USD 49.6 million in its automated warehouse at its factory in the U.K. The investment was made to increase the facility's storage capacity and have systems automatically moving around 25,000 pallets.

Sortation Systems Industry Segmentation

A sortation system(hardware) merges, identifies, inducts, separates, and conveys products to specific destinations. Conveyors and sortation systems allow more efficient retail, wholesale, and manufacturing distribution and are used across industries, such as post and parcels, airports, food and beverages, retail, and pharmaceuticals. These end-user applications have been considered to arrive at the market estimates. Moreover, the country-level analysis for each of these end-user industries has been covered in the report. Further, the scope of the study considers the impact of COVID-19 in the market.