Automated Sortation System Market

• Integration of emerging technologies like Al is driving the market growth

Market CAGR for automated sortation systems is being driven by the rising adoption of Internet of Things (IoT) systems in warehouse management and logistics, which is another trend expected to revolutionize manufacturing operations. IoT devices, along with radio-frequency identification (RFID) and sensors, offer several benefits: reduced labor costs, increased shipment accuracy and operation speed, improved tracking, and enhanced visibility for retailers, among others. Furthermore, Incorporating Al algorithms into parcel sortation systems can enable intelligent decision-making skills. The modular architecture of Industry, 4.0 and loT systems enables simple scaling, allowing greater package volumes and seamlessly expanding operations.

The major firms operating in the industry are highly inclined towards adopting different growth strategies, such as capacity expansion, partnerships, geographical expansion, mergers and acquisitions, new product establishment, and product innovation, to remain competitive in the marketplace. This is anticipated to positively impact significant market growth. Hence, the development and manufacturing of innovative solutions in the automated sortation system market is augmenting the growth over the forecast period.

For instance, in June 2021, Interroll launched its MX 018V Vertical Crossbelt Sorter, which is set to help parcel and courier service providers, logistics service providers, and e-commerce providers in gaining the ability to handle an extensive variety of goods in an energy-efficient and space-saving manner.

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 due to multiple factors, including the increasing convenience and accessibility of online shopping, improved logistics and shipping networks, and a shift in consumer preferences toward digital platforms.

According to the US Department of Commerce, e-commerce sales as a share of the entire 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.

Labor shortages in the logistics and warehousing sectors are increasingly influencing the Global Automated Sortation System Market Industry. As companies face challenges in hiring and retaining skilled workers, there is a growing reliance on automation to fill the gaps. Automated sortation systems provide a solution by reducing the dependency on manual labor while maintaining operational efficiency. This trend is particularly evident in regions experiencing significant workforce challenges. By investing in automated solutions, businesses can ensure continuity in their operations, thereby positioning themselves favorably in a competitive market. The shift towards automation is expected to accelerate as labor market dynamics evolve.

The Global Automated Sortation System Market Industry is poised for substantial growth, with projections indicating a market size of 4.66 USD Billion in 2024 and an anticipated increase to 6.96 USD Billion by 2035. This growth trajectory suggests a compound annual growth rate (CAGR) of 3.71% from 2025 to 2035. Such figures underscore the increasing reliance on automated solutions across various industries, driven by factors such as e-commerce expansion, technological advancements, and the need for operational efficiency. The market's evolution reflects broader trends in automation and logistics, positioning it as a critical component of modern supply chain management.

Technological innovations play a pivotal role in shaping the Global Automated Sortation System Market Industry. The integration of artificial intelligence, machine learning, and robotics into sortation systems enhances accuracy and speed, thereby improving overall productivity. These advancements allow for real-time data analysis and adaptive sorting processes, which are essential for meeting the demands of modern logistics. As companies seek to optimize their operations, the adoption of these technologies is likely to increase, contributing to a projected CAGR of 3.71% from 2025 to 2035. This growth reflects a broader trend towards automation in various sectors, driven by the need for efficiency and cost reduction.

The surge in e-commerce activities globally drives the Global Automated Sortation System Market Industry. As online shopping continues to grow, logistics and warehousing operations must adapt to handle increased order volumes efficiently. In 2024, the market is projected to reach 4.66 USD Billion, reflecting the necessity for advanced sortation systems that enhance operational efficiency. Companies are investing in automated solutions to streamline their supply chains, reduce labor costs, and improve delivery times. This trend is expected to persist, with the market anticipated to reach 6.96 USD Billion by 2035, indicating a robust growth trajectory fueled by e-commerce expansion.

The emphasis on operational efficiency is a driving force behind the Global Automated Sortation System Market Industry. Companies are increasingly recognizing the need to streamline their processes to remain competitive. Automated sortation systems facilitate faster processing times, reduced errors, and optimized resource allocation. This focus on efficiency is particularly relevant in sectors such as retail and logistics, where timely order fulfillment is critical. As organizations strive to enhance their operational capabilities, the demand for automated solutions is likely to grow. This trend is expected to contribute to the market's expansion, aligning with the broader goals of cost reduction and improved service delivery.

Environmental sustainability initiatives are gaining traction within the Global Automated Sortation System Market Industry. Companies are increasingly adopting eco-friendly practices to reduce their carbon footprint and comply with regulatory requirements. Automated sortation systems can contribute to sustainability by optimizing energy use and minimizing waste through efficient sorting processes. As organizations prioritize sustainable operations, the demand for automated solutions that align with these goals is expected to rise. This trend reflects a broader societal shift towards environmental responsibility, influencing investment decisions and operational strategies across various sectors.

By region, the study delivers market insights into North America, Europe, Asia-Pacific and the Rest of the World. The North American automated sortation system market will dominate this market, owing to the growing adoption of Internet of Things (IoT) technology. The prominent players in the region are focusing on using the technology to improve their product offerings and meet the various requirements of different end-users will boost the market growth in this region.

Further, the US automated sortation system market held the largest market share, and the Canadian automated sortation system market was the fastest-growing market in the North American region.

Further, the prominent countries studied in the market report are The US, Canada, German, France, the UK, Italy, Spain, China, Japan, India, Australia, South Korea, and Brazil.

Figure 2: Automated Sortation System Market SHARE BY REGION 2022 (USD Billion)

Source: Secondary Research, MRFR Database, Primary Research, and Analyst Review

Europe automated sortation system market accounts for the second-largest market share owing to the presence of prominent market players such as KNAPP AG, Siemens AG, and Beumer Group Gmbh in this region. Further, the German automated sortation system market held the largest market share, and the UK automated sortation system market was the fastest-growing market in the European region.

The Asia-Pacific automated sortation system market is expected to grow at the fastest CAGR from 2023 to 2032. This is due to the increasing adoption of online shopping among developing countries. Moreover, China’s automated sortation system market held the largest market share, and the Indian automated sortation system market was the fastest-growing market in the Asia-Pacific region.

Leading market players are investing heavily in research and development to expand their product lines, which will help the automated sortation system market grow even more. Market participants are also undertaking numerous strategic activities to expand their global footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. To expand and survive in a more competitive and rising market climate, the automated sortation system industry must offer cost-effective items.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the global automated sortation system industry to benefit clients and increase the market sector. Major players in the automated sortation system market, including General Mills Inc., Amway, Conagra Brands Inc., Cargill Incorporated, Abbott Laboratories, Kraft Foods Group Inc., and others, are attempting to expand market demand by investing in research and development operations.

Interroll Holding AG is a provider of material handling solutions. The company provides conveyor rollers, motors, and drives for conveyor systems, conveyors and sorters, drives and controls, pallet handling and flow storage systems for system integrators and OEMs. Interroll also includes a modular pallet platform, stacker crane, transfer car, pallet flow and smart pallet mover. It serves postal services, e-commerce, food and beverage, fashion, airports, automotive and other manufacturing industries. In August 2019, Interroll Group acquired components of the business movements and investments of its IBH ehf, the firm's sales agent in Iceland and the Faroe Islands.

The acquisition was accomplished to strengthen the former firm's sales and service delivery in the food and beverage sector.

Vanderlande Industries BV is a provider of automatic material handling systems and services. It delivers baggage handling solutions, parcel and postal sorting solutions, logistics systems, spares management, warehouse automation, customer services and process monitoring. Vanderlande focuses on the parcel, postal sorting and material handling solutions, hold baggage screening, and individual carrier systems at airports. The company serves warehouse and distribution centers, airports, food and beverages, and the post and parcel industry.

In March 2022, Vanderlande announced a new automated piece-picking robot as an expansion to its smart item robotics portfolio of technologies, which works with Vanderlande's strategy of accelerating robotics for warehousing.