The postal automation market is expected to grow at a CAGR of 6.10% over the forecast period to reach a market size of US$4.900 billion in 2026. Automation is growing in several industries as it improves organizational efficiency while reducing the total operational cost. The postal automation system is an intelligent system, which provides a solution for effective parcel sorting and brings mails from the sender to the recipient in a reliable and fast manner. The postal automation systems consist of mail sorting systems, parcel sorting systems, postal software, and automatic reading and coding systems. The primary reason behind the need for automation in the postal system is to eradicate the shortcomings of the traditional postal systems such as human errors, higher processing time, and high labor requirement. Automation of the Postal industry provides a faster and better categorization of letters and parcels, it further assists in the digitalization of this procedure. The key drivers of the postal automation market are the rising labor costs, the need for proper checking and accountability, and the growing e-commerce industry. The total number of parcels and packages is on an increase owing to the rise in online shopping by end-users, this, in turn, increases the demand for efficient and reliable solutions for sorting parcels and delivering them to the recipient on time, which further creates a need for the automation of the postal system. Automation in the postal system simplifies the complete mail processing chain from pre-sorting to sequencing, this reduces the fixed costs and helps in improving the quality of service provided. In addition, it helps in increasing the profitability, quality, competitiveness of the system, and reducing the labor costs as the process requires less labor. In addition, the growing demand for industrial automation is further projected to fuel the market growth for postal automation systems during the forecast period.
By component, the postal automation services will grow on account of the regular repairs and updates required for the proper functioning of machines. In addition, the increasing training and supervision required for operating the machines will further drive the growth of postal automation services. The hardware component owns a substantial share to improve organizational efficiency and boost the company's profitability throughout the forecast period. By product type, the parcel sorter segment is expected to hold a significant market share owing to the growing need to cut down on intensive manual labor requirements. The increasing demand in the online shopping industry is also predicted to drive the market growth for this segment. By end-user, the Government postal applications are projected to hold a notable market share due to the shift from conventional postal systems to automated ones during the forecast period. Geographically, the Asia-Pacific region holds lucrative opportunities that can result in substantial growth during the forecasted period. The rising trend of e-commerce in developing countries like China, India, and South Korea among others will result in increased demand for a more automated and streamlined procedure. The presence of some of the major market players results in the easier availability of products and services in the emerging markets, thus augmenting the demand for these machines. The North American and European regions were the early adopters of postal automation equipment and are now moving towards upgrading their systems to provide better connectivity and meet the increasing needs, thereby boosting the demand for postal automation solutions in the region.
Growth Factors
The growing popularity of the e-commerce industry is expected to propel the market growth for the postal automation market during the forecast period. According to the United States Department of Commerce, the e-commerce industry has grown by 15% to reach USD 395 billion in total sales in 2016. The increasing popularity of the e-commerce industry is becoming a challenge for the logistics industry as the manual procedures may be erroneous and involve a lot of time and money. According to the Wall Street Journal, online sales generate the need for reverse logistics as approximately one-third of all the products are ultimately returned by consumers. The voluminous amount of package transfers are expected to fuel the market growth for the postal automation market as a large number of packages will require an efficient parcel automation system.
The primary advantage of an automated postal system will be the reduction in labor costs and labor dependence. Many factors such as high attrition rates, decreasing productivity, government regulations, and a shortage of employable skills are some of the reasons for the increase in labor costs, which the conventional postal market has to bear. According to Eurostat, in the first quarter of 2018, the annual growth in labor costs was 2% in the Euro area and 2.7% in the European Union. Many industries such as logistics, manufacturing, automotive, energy, and power, etc. have to bear the increasing labor costs. The automated postal system helps the companies to save on labor costs and make the complete process economical, accurate, and highly productive. Thus, the market for postal automation systems is expected to expand during the forecast period.
Restraints
The initial investment associated with automating the postal system is huge. To automate the entire postal system large amount of funds will be required as the entire process will be digitalized along with the installation of various hardware and software. Furthermore, once the automated system is installed, it will require regular maintenance, servicing, and renewal, which will further increase the variable cost. Thus, the high costs associated with the installation and maintenance of the postal automation system may hinder the market growth during the forecast period as company companies would want to minimize or avoid this additional expenditure.
Impact of COVID-19
The covid-19 pandemic moderately influenced the postal automation market as the E-commerce and logistics industry were on a rise despite the virus outbreak. Furthermore, many companies shifted towards automation of their postal systems as restrictions were imposed on travel due to which all manual labor-related work was put to a halt. This encouraged companies to shift towards postal automated systems as they wanted to reduce their dependency on labor. Also, owing to the pandemic many companies adopted postal automation to reduce labor costs as the business operations were hampered due to the lockdown restrictions imposed by the governments.
Competitive Insights
Prominent/major key market players in the Postal Automation Market include Siemens AG, Toshiba Corporation, NEC Corporation, Pitney Bowes, Solystic SAS, Vanderlande N.V, Fives Group, Leonardo S.P.A, Beumer Group GmbH & Co. KG, and National Presort (NPI) LP. The players in the Postal Automation Market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. For Instance, in September 2019, Vanderlande N.V has launched the next installment of its scalable solutions (evolutions) - DIRECTSORT in the Parcel and Post Expo 2019 in the Netherlands. DIRECTSORT is a modular, future-proof solution that sorts parcels from the moment they are unloaded from trailers, vans, or load carriers to optimize the total cost of ownership. Major market players in the market have been covered along with their relative competitive strategies in this report and the report mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered along with the recent deals and investments of these important players in the Postal Automation Market.
Segmentation:
By Component
By Product Type
By End-User
By Geography
By component, the postal automation services will grow on account of the regular repairs and updates required for the proper functioning of machines. In addition, the increasing training and supervision required for operating the machines will further drive the growth of postal automation services. The hardware component owns a substantial share to improve organizational efficiency and boost the company's profitability throughout the forecast period. By product type, the parcel sorter segment is expected to hold a significant market share owing to the growing need to cut down on intensive manual labor requirements. The increasing demand in the online shopping industry is also predicted to drive the market growth for this segment. By end-user, the Government postal applications are projected to hold a notable market share due to the shift from conventional postal systems to automated ones during the forecast period. Geographically, the Asia-Pacific region holds lucrative opportunities that can result in substantial growth during the forecasted period. The rising trend of e-commerce in developing countries like China, India, and South Korea among others will result in increased demand for a more automated and streamlined procedure. The presence of some of the major market players results in the easier availability of products and services in the emerging markets, thus augmenting the demand for these machines. The North American and European regions were the early adopters of postal automation equipment and are now moving towards upgrading their systems to provide better connectivity and meet the increasing needs, thereby boosting the demand for postal automation solutions in the region.
Growth Factors
- Increasing transactions in the E-commerce industry
The growing popularity of the e-commerce industry is expected to propel the market growth for the postal automation market during the forecast period. According to the United States Department of Commerce, the e-commerce industry has grown by 15% to reach USD 395 billion in total sales in 2016. The increasing popularity of the e-commerce industry is becoming a challenge for the logistics industry as the manual procedures may be erroneous and involve a lot of time and money. According to the Wall Street Journal, online sales generate the need for reverse logistics as approximately one-third of all the products are ultimately returned by consumers. The voluminous amount of package transfers are expected to fuel the market growth for the postal automation market as a large number of packages will require an efficient parcel automation system.
- Reduction in labor cost
The primary advantage of an automated postal system will be the reduction in labor costs and labor dependence. Many factors such as high attrition rates, decreasing productivity, government regulations, and a shortage of employable skills are some of the reasons for the increase in labor costs, which the conventional postal market has to bear. According to Eurostat, in the first quarter of 2018, the annual growth in labor costs was 2% in the Euro area and 2.7% in the European Union. Many industries such as logistics, manufacturing, automotive, energy, and power, etc. have to bear the increasing labor costs. The automated postal system helps the companies to save on labor costs and make the complete process economical, accurate, and highly productive. Thus, the market for postal automation systems is expected to expand during the forecast period.
Restraints
- High costs
The initial investment associated with automating the postal system is huge. To automate the entire postal system large amount of funds will be required as the entire process will be digitalized along with the installation of various hardware and software. Furthermore, once the automated system is installed, it will require regular maintenance, servicing, and renewal, which will further increase the variable cost. Thus, the high costs associated with the installation and maintenance of the postal automation system may hinder the market growth during the forecast period as company companies would want to minimize or avoid this additional expenditure.
Impact of COVID-19
The covid-19 pandemic moderately influenced the postal automation market as the E-commerce and logistics industry were on a rise despite the virus outbreak. Furthermore, many companies shifted towards automation of their postal systems as restrictions were imposed on travel due to which all manual labor-related work was put to a halt. This encouraged companies to shift towards postal automated systems as they wanted to reduce their dependency on labor. Also, owing to the pandemic many companies adopted postal automation to reduce labor costs as the business operations were hampered due to the lockdown restrictions imposed by the governments.
Competitive Insights
Prominent/major key market players in the Postal Automation Market include Siemens AG, Toshiba Corporation, NEC Corporation, Pitney Bowes, Solystic SAS, Vanderlande N.V, Fives Group, Leonardo S.P.A, Beumer Group GmbH & Co. KG, and National Presort (NPI) LP. The players in the Postal Automation Market are implementing various growth strategies to gain a competitive advantage over their competitors in this market. For Instance, in September 2019, Vanderlande N.V has launched the next installment of its scalable solutions (evolutions) - DIRECTSORT in the Parcel and Post Expo 2019 in the Netherlands. DIRECTSORT is a modular, future-proof solution that sorts parcels from the moment they are unloaded from trailers, vans, or load carriers to optimize the total cost of ownership. Major market players in the market have been covered along with their relative competitive strategies in this report and the report mentions recent deals and investments of different market players over the last few years. The company profiles section details the business overview, financial performance (public companies) for the past few years, key products and services being offered along with the recent deals and investments of these important players in the Postal Automation Market.
Segmentation:
By Component
- Hardware
- Software
- Services
By Product Type
- Culling and Cancelling
- Sorting Machines
- Parcel Sorter
- Mail Sorter
- Flat Sorter
- Mixed Mail Sorter
- Services
- Others
By End-User
- Government Postal
- Private Postal
By Geography
- North America
- USA
- Canadá
- Mexico
- South America
- Brazil
- Argentina
- Others
- Europe
- UK
- Germany
- France
- Spain
- Others
- Middle East and Africa
- Saudi Arabia
- Israel
- Others
- Asia Pacific
- Japan
- China
- India
- Indonesia
- Taiwan
- Thailand
- Others
Table of Contents
1. Introduction
2. Research Methodology
3. Executive Summary
4. Market Dynamics
5. Postal Automation Market Analysis, By Component
6. Postal Automation Market Analysis, By Product Type
7. Postal Automation Market Analysis, By End-User
8. Postal Automation Market Analysis, By Geography
9. Competitive Intelligence
10. Company Profiles
Companies Mentioned
- Siemens AG
- Toshiba Corporation
- NEC Corporation
- Pitney Bowes
- Solystic SAS
- Vanderlande N.V
- Fives Group
- Leonardo S.P.A
- Beumer Group GmbH & Co. KG
- National Presort (NPI) LP
Methodology
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