Logistics Automation Market Size, Share & Trends Analysis Report By Component (Hardware, Software, Services), By Function, By Logistics Type, By Organization Size, By Software Application, By Vertical, By Region, And Segment Forecasts, 2023 - 2030

Report Overview

The global logistics automation market size is expected to reach USD 30.90 billion in 2022 and is expected to grow  at a compound annual growth rate (CAGR) of 14.7% from 2023 to 2030. Logistics automation includes hardware and software solutions to automate logistics processes such as transport, storage, retrieval, and data management processes. Automating these processes improve efficiency, minimizes errors, and reduces the turnaround time. Automation solutions aid in scaling up businesses as larger volumes can be easily managed with autonomous robots, conveyor systems, and automated storage systems.

The growing consumer inclination towards online shopping and rising demand for short delivery timelines is one of the major factors fueling the market's growth. High consumer demands have led to a surge in fulfillment centers for last-mile and quick deliveries. The fulfillment centers are incrementally adopting automation from mechanized support to operator-free equipment. As the automated vehicle and robotics technologies mature with time, their applications in logistics and warehousing will broaden significantly and create growth opportunities for the target market during the forecast period.

The logistics automation sector faces several difficulties, including a competitive market, lack of standardization in the logistics sector, and lack of skilled and expert labor force to operate the advanced systems. Due to their complex nature, automation devices and software require a certain skill set and expertise to operate and manage. The shortage of skilled and trained labor, especially in developing nations such as India and China, may restrict the growth of the target market. Moreover, the lack of standardization makes it difficult to create standardized solutions for the supply chain process, which leads to high costs for developing specialized solutions.

COVID-19 Impact On The Logistics Automation Market

The COVID-19 pandemic impacted the majority of industries and economies across the globe. Strict lockdowns and border closures were announced by governments all over the world. In order to ensure employee safety and maintain social distancing, the production facilities were either shut down entirely or operated at reduced capacity. Shortage of labor caused disruptions in the supply chain across industry verticals and significantly impacted the logistics sector. A tremendous rise in online sales channels compelled the companies and logistics sector to restructure their logistics operations.

The pandemic has accelerated the adoption of automation and technologies such as the Internet of Things (IoT) and robotics in the logistics sector. These technologies were vital in ensuring the smooth functioning of warehousing activities despite the labor shortages. Post-pandemic, several logistics companies have started investing in automation to improve efficiency and optimize costs. The pandemic has provided a significant boost to the target market, and the market has witnessed a higher year-on-year growth rate post the pandemic as compared to the previous years before the pandemic.

Component Insights

Based on components, the market is segmented into hardware, software, and services. The hardware segment's market share was 66.84% in 2022 and is expected to grow at a CAGR of 14.4% through the forecast period. Based on the hardware, the market is further segmented into autonomous robots, conveyor systems, automated sorting systems, automated storage and retrieval systems, de-palletizing/palletizing systems, and automatic identification and data collection. Due to the increasing demand for automated transportation, the autonomous robots category holds the largest market share among hardware solutions. Autonomous guided vehicles are expected to draw most of the spend in autonomous robots.

The software segment is further segmented into the following categories: warehouse management system and transportation management system. The warehouse management software automates and optimizes several warehouse processes, such as tracking, storing inventory, receiving, and workload planning, among others, and is expected to be the fastest-growing software solution during the forecast period. The service segment is anticipated to grow at the fastest CAGR of 15.6% throughout the forecast period. The market's continued expansion is primarily due to the increased demand for the deployment and integration of logistics automation.  

Function Insights

Based on transportation mode, the market is segmented into inventory & storage management and transportation management. The transportation management segment dominated the market in 2022, with a market share of 62.51%. It is anticipated to grow at a CAGR of 13.9% through the forecast period. Autonomous robots, conveyor systems, and de-palletizing/palletizing systems are used for transportation management. Autonomous robots such as autonomous guided vehicles (AGV) and autonomous mobile robots (AMR) are motorized solutions that transport materials and products throughout the warehouse or manufacturing facility.

The inventory & storage management segment is expected to grow at the fastest CAGR of 15.8% through the forecast period. The inventory & storage management includes automated storage systems and automated retrieval systems. Autonomous storage systems enable automated storage of crates or pallets in racks or shelves, while the retrieval system enables automated retrieval of the products for dispatch from the warehouse. The automation of the inventory and storage process simplifies and expedites the process of tracking and tracing a product in an enormous warehouse.

Logistics Type Insights

Based on logistics type, the market is segmented into sales logistics, production logistics, recovery logistics, and procurement logistics. Among these, the sales logistics segment dominated the market in 2022, with a market share of 35.67%. It is anticipated to grow at a CAGR of 14.8% through the forecast period. Sales logistics is the most critical aspect of the supply chain as it involves moving or delivering the goods to the end consumer. Sales logistics include order management, inventory management, shipping management, and vendor management. Automation solutions such as autonomous robots and automated storage and retrieval systems improve efficiency and reduce delivery turnaround time and hence are being increasingly adopted in sales logistics operations.

The production logistics segment is expected to grow at a considerable CAGR of 15.2% throughout the forecast period. Businesses heavily emphasize optimizing production processes, including time and cost optimization, to improve profitability. Logistics is one of the major expenditures of a business, and automation highly aids in minimizing or at least optimizing the expenditures to a large extent. Production logistics includes inventory management of raw materials, transportation within the manufacturing unit, and distribution.

Organization Size Insights

Based on organization size, the market is segmented into small & medium enterprises (SMEs) and large enterprises. The large enterprises' segment dominated the market in 2022, with a market share of 63.86%. It is anticipated to grow at a CAGR of 14.1% through the forecast period. Large enterprises handle huge volumes of products through the entire supply chain processes, which include raw materials, inventory, and final products. Given the enhanced productivity, large enterprises are increasingly adopting automation solutions such as robots in manufacturing units and inventory warehouses for raw material handling.

The SME segment is expected to grow at a considerable CAGR of 15.6% through the forecast period. Small and medium enterprises focus heavily on cost efficiency and adopt automation solutions to minimize labor costs. Several startups are propping up in the e-commerce fulfillment service industry, and fulfillment centers are increasingly deploying automated sorting systems for fulfillment processes such as kitting and bundling. Automation enables small and medium enterprises to compete with large enterprises.

Software Application Insights

Based on software applications, the market is segmented into inventory management, order management, yard management, shipping management, labor management, vendor management, customer support, and others. Among these, the order management segment dominated the market in 2022, with a market share of 18.45%. It is anticipated to grow at a CAGR of 15.2% through the forecast period. Order management includes management of the entire lifecycle, including order entry, fulfillment of the order, delivery, and post-sale services. The adoption of order management is increasing as it offers visibility to both businesses and customers.

The inventory management segment is expected to grow at the fastest CAGR of 15.9% through the forecast period. Inventory management includes keeping track of the inventory levels, managing the inventory of each product, forecasting demand, and accounting for the entire inventory. Efficient inventory management is critical for a successful business as both excess and low inventory can be disastrous in the probability of a company. The demand forecasting of products depending on historical sales is highly beneficial in the maintenance of optimum inventory levels.

Vertical Insights

Based on vertical, the market is segmented into retail & e-commerce, automotive, healthcare, electronics & semiconductors, and others. The retail and e-commerce segment dominated the market in 2022, with a market of 28.97%. The retail & e-commerce sector uses logistics automation solutions in order to meet the increasing volumes of orders and shipments. Logistics automation solutions improve reliability and ensure timely delivery, which aligns with the retail and e-commerce industry's interest.

The healthcare segment is anticipated to register a significant market share over the forecast period. Logistics automation solutions for the healthcare industry provide safe and secure handling, storage, and retrieval of healthcare products such as pharmaceuticals and vaccines. Healthcare sector demands a high level of accuracy and accountability in order to ensure the safety of the products, and automation significantly helps to ensure it. Pharmaceutical products require precise inventory management to avoid shortages and track expiration duration.

Regional Insights

North America led the overall market in 2022, with a market share of 33.74%. The region's growth can be attributed to the presence of several logistics automation solution providers and several logistics giants such as UPS, DHL, and FedEx Corporation, among others, in North America. In addition, the speedy implementation of modern technologies and the existence of modern infrastructure in the region is a supportive factor in the growth of the target market. The U.S. is expected to retain its dominance over the forecast period owing to the rapid boom of the e-commerce sector in the country.

The Asia-Pacific is expected to grow at the fastest CAGR of 17.2% over the forecast period. Asia Pacific is expected to experience rapid economic growth, especially in e-commerce. Moreover, Asia Pacific includes several countries which are hubs of logistical activity, such as Singapore, Indonesia, China, India, etc. Furthermore, the rising technological advancements and rising adoption of Industry 4.0 in countries such as China, India, Japan, and Southeast Asia countries are expected to boost the demand for logistics automation significantly over the forecast period.

Key Companies & Market Share Insights

The market is fragmented and highly competitive owing to the presence of several global and regional companies. Market players focus on developing new products to stay relevant in the market and enhance their market share. For instance, in May 2019, Oracle introduced updates to Oracle Supply Chain Management (SCM) Cloud for logistics management. The updates include global trade management capabilities, new network modeling, and enhanced transportation management.

Key players in the market are engaging in collaborations and partnerships with logistics companies and business end-users to support their logistics functions spread out across several regions/countries. For instance, in September 2020, SAP SE announced extended partnerships with ClearMetal, Project44, and Shippeo. Through these partnerships, the companies will become members of the SAP Logistics Business Network, a collaborative cloud network to share insights on the supply chain and gain transparency in the networks. Some of the prominent players in the global logistics automation market include:

• Dematic Corp. (Kion Group AG)

• Daifuku Co. Limited

• Swisslog Holding AG (KUKA AG)

• Honeywell International Inc.

• Jungheinrich AG

• Murata Machinery Ltd

• Knapp AG

• TGW Logistics Group GmbH

• Kardex Group

• Mecalux SA

• Beumer Group GmbH & Co. KG

• SSI Schaefer AG

• Vanderlande Industries BV

• WITRON Logistik

• Oracle Corporation

• One Network Enterprises Inc.

• SAP SE

Logistics Automation Market Report Scope

Global Logistics Automation Market Report Segmentation

This report forecasts revenue growths at global, regional, and country levels and provides an analysis of the industry trends in each of the sub-segments from 2017 to 2030. For this study, Grand View Research has segmented the global logistics automation market report based on component, function, logistics type, organization size, software application, vertical, and region:

• Component Outlook (Revenue, USD Billion, 2017 - 2030)

  • Hardware

    • Autonomous Robots (AGV, AMR)

    • Automated Storage and Retrieval Systems (AS/RS)

    • Automated Sorting Systems

    • De-palletizing/Palletizing Systems

    • Conveyor Systems

    • Automatic Identification and Data Collection (AIDC)

  • Software

    • Warehouse Management System

    • Transportation Management System

  • Services

    • Consulting

    • Deployment & Integration

    • Support & Maintenance

• Function Outlook (Revenue, USD Billion, 2017 - 2030)

  • Inventory & Storage Management

  • Transportation Management

• Logistics Type Outlook (Revenue, USD Billion, 2017 - 2030)

  • Sales Logistics

  • Production Logistics

  • Recovery Logistics

  • Procurement Logistics

• Organization Size Outlook (Revenue, USD Billion, 2017 - 2030)

  • Large Enterprises

  • Small & Medium Enterprises

• Software Application Outlook (Revenue, USD Billion, 2017 - 2030)

  • Inventory Management

  • Order Management

  • Yard Management

  • Shipping Management

  • Labor Management

  • Vendor Management

  • Customer Support

  • Others

• Vertical Outlook (Revenue, USD Billion, 2017 - 2030)

  • Retail & E-commerce

  • Healthcare

  • Automotive

  • Aerospace & Defense

  • Electronics & Semiconductors

  • Others

• Regional Outlook (Revenue, USD Billion, 2017 - 2030)

  • North America

    • U.S.

    • Canada

  • Europe

    • Germany

    • UK

    • France

  • Asia Pacific

    • China

    • India

    • Japan

    • South Korea

    • Australia

  • Latin America

    • Brazil

    • Mexico

  • Middle East & Africa

    • KSA

    • UAE

    • South Africa