The rising popularity of e-commerce companies and the growing demand for automated sorting systems in the logistics industry are some of the major factors driving the growth of this market. Additionally, government initiatives to promote food & beverage processing and rising investments in airport infrastructure are also expected to create a positive outlook for parcel sorting system manufacturers. Furthermore, increasing labour costs and high demand for greater accuracy and efficiency in parcel sorting operations are also likely to propel the growth of this market.

The growth of e-commerce has considerably raised the need for package sorting systems. The growing popularity of online shopping has necessitated a reduction in processing and delivery times. Automated parcel sorters can be useful in this situation. Automation offers effective, dependable package sorting and dispatch, assisting in maintaining a consistent flow of goods, cutting down on delivery times, and minimizing human involvement, all of which improve customer satisfaction. Furthermore, the expansion of logistics firms, e-commerce shops, airports, medical warehouses, and the food and beverage industries is fuelling the demand for modernized parcel sorting systems. These industries need effective parcel sorting systems to handle high volumes of packages with the least amount of labor and time. The increasing trend for warehouse automation is also driving the need for modernized, automated parcel sorting systems.

The parcel sorting system provides several advantages such as improved accuracy, reduced human intervention, and faster processing time. In addition, they are highly reliable and require minimal maintenance while providing cost-effective solutions. Furthermore, the increasing demand from the e-commerce and logistics sector is anticipated to drive the demand for parcel sorting systems.

Parcel sorting systems are automated sorting machines used for the separation and identification of parcels to improve efficiency and accuracy in the distribution process. These systems allow parcels to be sorted quickly, accurately, and with minimum labour required. The primary purpose of parcel sorting systems is to separate packages into specific categories, such as size, weight, or destination. The sorting process is typically completed in two stages, with the first stage involving the separation of parcels according to size/weight and then the second sorting them by address or destination.

By 2031, the market for parcel sorting systems is projected to be worth USD 5.36 billion, expanding at a CAGR of 8.8%.

The factors restraining the market growth are the high initial cost of installation, lack of skilled labour, and complex sorting algorithms. Also, many companies still prefer traditional manual sorting systems as they are less expensive than automated ones. Moreover, large-scale adoption in emerging economies is expected to further hamper market growth due to limited logistics infrastructure. However, technological advancements are expected to reduce the cost of automated sorting systems and create potential growth opportunities.

Key players operating in the parcel sorting system market include Vanderlande, Siemens AG, SSI SCHAEFER Group, Beumer Group GmbH & Co. KG, Intelligrated (Honeywell), Interroll Holding AG, ALSTEF SAS, Cimcorp Automation Ltd., Murata Machinery Ltd., and Muhlbauer Holding AG & Co. KG.

Segment Analysis

The Horizontal Cross-band Sorting Machine to Emerge as the Most Lucrative Segment

The horizontal cross-band sorting machine accounted for the largest market share in 2020 and is expected to witness a significant growth rate during 2021-2031 owing to its ability to process a wide range of items, such as apparel, books, fragile electronics, and other items. Vertical cross-band sorting machines are expected to witness a significant growth rate during the forecast period owing to their ability to sort items according to size and weight.

The Most Popular Application Segment in Logistics

The parcel sorting system market is segmented based on application into logistics, electronic commerce, airport, medical, food & beverage, and other applications. The logistics segment accounted for the largest market share in 2020 owing to its increasing use by various players, such as Amazon, FedEx, and UPS. The electronic commerce segment is expected to witness a significant growth rate during 2021-2031 due to the surge in online shopping activities across the globe.

North American region to render Adequate Financing Avenues

Because there are so many logistics firms in North America, the area had the greatest share in 2020. The industry is also expanding as a result of the region's e-commerce businesses' increasing demand for parcel sorting systems. Due to increasing demand from logistics and e-commerce enterprises in this area, Europe is anticipated to have considerable growth in the parcel sorting system market over the course of the projected period. Due to the region's increased adoption of automated sorting systems in the logistics, e-commerce, and other sectors of the economy, Asia Pacific is anticipated to have the quickest rate of growth over the projection period. The Middle East & Africa is estimated to account for a small share of the global market during the forecast period due to the limited presence of logistics and e-commerce companies in this region.

COVID-19 Impact and Market Status

The COVID-19 pandemic has had an immense impact on the parcel sorting system market. The outbreak of the virus and subsequent lockdowns led to a disruption in supply chains analytics, impacting the demand for parcel sorting systems across various regions. However, with gradual economies opening up and increasing e-commerce activities, the market is witnessing a rapid recovery. The market is expected to grow significantly during the forecast period.

Latest Innovations in the Global Parcel Sorting System Market: A Snapshot

• In 2020, Amazon announced the launch of a new automated sorting facility in Kent, Washington. The facility is equipped with advanced technologies and automated sorting systems to enable faster order processing.

• Siemens AG launched its Sortimat Birkman sorter which provides high levels of flexibility while reducing operating costs.

Parcel Sorting System Market Scope

Key Segments of the Global Parcel Sorting System Market

By Type Overview,  (USD Billion)        
                    •        Horizontal Cross – band Sorting Machine
                    •        Vertical Cross – band Sorting Machine
By Application Overview (USD Billion)
                    •        Logistics, 
                    •        Electronic Commerce,
                    •         Airport,
                    •         Medical, 
                    •        Food & beverage, 
                    •        Other
By Regional Overview (USD Billion)
North America
                    •        U.S
                    •        Canada
Europe
                    •        Germany
                    •        France
                    •        UK
                    •        Rest of Europe
Asia Pacific
                    •        China
                    •        India
                    •        Japan
                    •        Rest of Asia Pacific
South America
                    •        Mexico
                    •        Brazil
                    •        Rest of South America
Middle East and Africa