Logistic Automation Market Outlook, 2029

Logistics automation refers to the application of technology and systems for optimizing logistics and supply chains. It involves a range of automated systems and software solutions aimed at greater efficiency, minimizing the role of humans, while enhancing accuracy in logistics. Logistics automation encompasses key fundamentals such as robotics, AI, machine learning, IoT devices, warehouse management systems (WMS), transportation management systems (TMS), and other automated solutions in the handling, storage, and transportation of goods. The e-commerce market has developed explosively and consumers need the same delivery to happen.

They should have automated warehouses and logistics operations to be able to fill orders within less than 24 hours to fulfill the demand. In picking, packing, and document processing with automation, they will be able to avail of same-day delivery, and with operational efficiency and low operating cost, this further raises demand. Warehouse decision making will be real-time efficient with robotics technology. AL-machine can learn, think and decide. Robotics will be extremely supporting to the adoption of logistic automation market in the near future. Rate of adoption and market expansion is high because of this. Furthermore, being in growing demand, the e-commerce is also supportive to logistics automation.

More products will transfer and deliver with the growth of the e-commerce industry. It will eventually lead to the growth of the logistics automation market. For instance, according to International Federation of Robotics (IFR), 34,987 robots were installed in the U.S. in 2021. That signifies the fast pace of rising automation in the country. The trend is likely to drive in the demand for logistics automation solutions such as Autonomous Mobile Robots and Automated Guided Vehicles.

According to the research report, “Global Logistics Automation Market Outlook 2029” the market is anticipated to cross USD 69 Billion by 2029, increasing from USD 34.63 Billion in 2023. The market is expected to grow with a 12.54% CAGR from 2024 to 2029. Booming e-commerce activity, industrialization, and urbanization are also putting an increasing burden on logistics companies, which is promoting demand for logistics automation. Advancements in logistics automation technologies and high investments in development of the same are also favoring market growth.

Rising labor costs and acute shortage of skilled workforce are also expected to increase the demand for logistics automation throughout the period of study and beyond. Increasing demand for faster deliveries worldwide is also likely to benefit logistics automation companies in the near future. Increasing importance of supply chain enhancement in optimizing processes is also expected to contribute to the growth of the market in the near future. The increasing popularity of same-day delivery across the globe and the rapid growth in e-commerce activity is also driving the demand for highly efficient logistics operations.

Furthermore, increased focus on productivity improvement and more rapid fulfillment of faster delivery times also is expected to positively influence logistics automation market growth going forward. Handling logistics equipment and machinery necessitate skilled labor, and there is a huge shortage for the same around the world. Thus, logistics companies are deploying automation in logistics to achieve maximum performance and generate more revenue. Interoperability of the automation solutions with existing infrastructure of logistics is one of the major obstacles that not only adds to the cost of deploying but also impairs the smooth conduct of operations to some extent.

Companies like Amazon.com, FedEx, IKEA, Nike, and Walmarts have automated their warehouses in many areas of the world. For instance, in February 2020, Nike collaborated with Geek+ robotics deployed 220+ robots for the release of same-day delivery across Japan. These are robots that will carry Nike products directly to the employees within the warehouse that will increase effectiveness and reduce the cost making the regular job easy.

Market Drivers

• Integration of Internet of Things (IoT): The integration of Internet of Things (IoT) technologies into logistics automation is driving significant changes in the industry. IoT devices, such as sensors and GPS trackers, provide real-time data on inventory levels, shipment locations, and environmental conditions during transportation. This data enables logistics companies to monitor operations closely, optimize routes, and make informed decisions based on live information. By leveraging IoT for enhanced visibility and control, organizations can improve operational efficiency, reduce delays, and enhance customer satisfaction. As IoT technology continues to advance, its impact on logistics automation will only increase, further driving the market.
• E-commerce Growth and Demand for Rapid Fulfillment: The exponential growth of e-commerce has created heightened expectations for rapid order fulfillment and delivery. Consumers now demand faster shipping options, often requiring same-day or next-day delivery services. Logistics automation plays a crucial role in meeting these expectations by streamlining processes such as order picking, packing, and shipping. Automated systems, such as robotic picking solutions and automated storage and retrieval systems, significantly reduce order processing times. As e-commerce continues to expand, the demand for automation in logistics will rise to support efficient and timely deliveries.

Market Challenges

• High Initial Investment Costs: One of the primary challenges of adopting logistics automation is the high initial investment required for technology implementation. Automated systems, robotics, and advanced software solutions often come with substantial costs that can be a barrier for small to medium-sized enterprises. Additionally, companies must consider the ongoing costs associated with maintenance, training, and updates. While the long-term benefits of automation can justify the investment, the upfront costs can deter many organizations from making the transition. Developing financing strategies or exploring scalable automation options can help mitigate this challenge.
• Data Privacy and Compliance Issues: As logistics companies increasingly rely on data analytics and IoT technologies, concerns regarding data privacy and compliance with regulations such as GDPR (General Data Protection Regulation) and CCPA (California Consumer Privacy Act) arise. The collection and processing of customer data must be conducted transparently and securely to avoid legal repercussions and maintain customer trust. Companies face the challenge of implementing robust data protection measures while still utilizing data for optimization and analytics. Striking the right balance between data usage and compliance is essential for the successful implementation of logistics automation.

Market Trends

• Hyperautomation in Logistics: Hyperautomation is an emerging trend that combines automation with advanced technologies like AI, machine learning, and robotic process automation (RPA) to automate complex business processes across the logistics supply chain. This trend emphasizes the need for organizations to automate not just individual tasks but entire workflows, allowing for greater efficiency and productivity. Hyper automation enables companies to enhance their operational agility, reduce manual interventions, and streamline decision-making processes. As logistics companies seek comprehensive automation solutions, hyperautomation is likely to become a key focus area.
• Cloud-Based Automation Solutions:The shift towards cloud-based automation solutions is transforming logistics operations by providing scalable, flexible, and cost-effective alternatives to traditional on-premise systems. Cloud platforms allow logistics companies to access advanced automation tools without significant upfront investments in infrastructure. Additionally, cloud solutions enable seamless collaboration between different stakeholders in the supply chain, improving visibility and coordination. As businesses continue to embrace digital transformation, the demand for cloud-based automation solutions in logistics is expected to rise, further enhancing operational efficiency and adaptability.

Sales logistics is dominating the market of logistics automation mainly because it plays a vital role in the amelioration of operational efficiency and response to stringent demands of e-commerce and retail sectors.

Significant growth in the market for logistics automation has come from the increasing complexity of supply chains as well as the need for faster and more reliable delivery systems, while order management, inventory management, shipping management, and vendor management form the gamut of sales logistics, which is at the forefront of this change. Combining the latest technological advancement in automation-for example, autonomous robots and automated storage and retrieval systems-into sales logistics operations End.

Not only does it smooth out process flows but also avoids man-made errors and has the same turnaround time, making them stand indispensable in businesses who want to cater to their customer expectations amidst rapidly emerging market needs. As e-commerce continues to grow, companies are under pressure to be able to fulfill orders within quick turnaround times and with minimal error, which puts them in a quest for strong logistics solutions that can efficiently process increased volumes. Those challenges can be addressed by automation as it gives the ability to track inventory in real time, thus streamlining order fulfillment and making the entire supply chain more visible.

Hardware logistics automation, which encompasses automated sorting systems as well as autonomous guided vehicles, garnered an even larger revenue share in 2023, demonstrating a move towards relying more on technology in sales logistics. Next, innovations in software improve the management of warehouse and transport systems to better plan and execute logistics functions. The coming together of all these factors-those that will see a rise in demand through e-commerce, technology advances in automation, and the need for operational efficiency-results in sales logistics leading the pack in the market for logistic automation.

The retail and e-commerce sector has a strong foot forward in the logistics automation market, primarily driven by accelerating distribution demands and growing customer expectations prompted by the rapid ascent of online shopping.

E-commerce has brought about a sea change in the nature of the global logistics industry. Traditional brick-and-mortar retailing is mostly based on the bulk transportation model, whereas online retailing engages in more complicated logistical processes. As shoppers increasingly prefer shopping online over browsing through physical stores, tremendous pressure has mounted on the e-tailers to deliver faster and save much. Automating several warehousing and fulfillment operations has helped them meet these tricky customer demands.

The highly advanced robotic systems and autonomous vehicles can now pick, sort, and move goods within a logistic distribution center and deliver goods to the final customers through last-mile delivery with precision and speed. The companies engaged in e-commerce can further facilitate multiple individual orders at high volume and accelerate shorter timelines for getting items delivered to their customers, thereby improving their customer experience. The world witnessed how lockdown and avoidance of crowded public areas further intensified the sales of e-commerce and elevated various business-to-consumer e-commerce companies.

It is in such a scenario that this online boom in purchases has further fuelled the quest for more automation in logistics so that there are adequate processes and controls in place to meet spiky volumes of orders without compromising on service quality. Going forward, the automation of distribution and delivery networks will be an imperative business for e-tailers to reap the advantages that the unstoppable growth of the B2C e-commerce sector is offering.

The retail & e-commerce segment will register the highest market share-this too because of skyrocketing demands for distribution and growing client expectations. As online shopping grows phenomenally, pressure on retailers to process large volumes of orders through their distribution networks on time is unprecedented. This has meant that the existing fulfillment infrastructure needs significant upgrade incorporating latest automation technologies.

The leaders in the market in logistics automation are the large enterprises mainly because of huge needs for efficiency and scalability in managing complex supply chains with large-scale operations.

Mega and huge-size companies are among the forerunners in this trend because they are able to hold such incredible quantities of products, but the need to optimize processes often follows to be able to compete. These organizations usually have long lines of warehouses and distributors' networks, so automation technologies, such as robotics, AI, and data analytics, can be aligned to increase operational efficiency. This way, large enterprises can cut down on errors while providing fast turnaround times and proper inventory management-a highly important aspect of their business because they handle higher volumes of goods owed to the large growth of e-commerce.

Moreover, large businesses often have more reserves with which to invest in high-end automation systems that may be expensive for their smaller counterparts. This financial capability enables them to experiment with the newer technologies such as autonomous trucks and drones that can further optimize logistics processes. Furthermore, the increasing complexity of supply chains suggests that that more sophisticated solutions must provide real-time visibility and responsiveness abilities that automation systems have the prowess to provide. Larger companies are more and more embracing automation-not just as an efficiency tool but also as a strategic response to such pressures. Their leading position in the market of logistics automation is therefore likely to persist as they work with technology to meet changing demands from their operations and customers alike.

Inventory and storage management will lead this market in logistics automation as it helps in reducing unnecessary operational inefficiency and errors by providing real-time data integration and advanced technologies.

The role of inventory and storage management in optimizing logistical and supply chain operations has increasingly been recognized, especially in the logistics sector. Automation technologies, such as robotics, AI, and IoT devices, are changing classical inventory practices into real-time tracking and management of stock levels in various locations. These innovations also reduce human error normally accompanying stock processes performed manually, where cases of inconsistencies between recorded and actual stock levels often occur. Automated systems update inventory records as items are received or shipped instantly.

This gives a business visibility of its inventories at every moment, thus aiding in forecasting demand effectively by providing an idea of when demand will arise and allowing the company to fine-tune their stock accordingly. More importantly, an automated inventory management system would alleviate time spent on reordering processes since it can automatically generate purchase orders that would be based on predefined thresholds. The risk of stock outs or overstocking situations could be avoided through automated inventory management systems, which would improve customer satisfaction as a result of having the available product and also adjust storage costs by not maintaining excess inventory.

In addition, automation, via automated guided vehicles (AGVs) and robotic systems, in warehouses increases not only the speed of picking orders but also reduces the error rate of order fulfillment within warehouses. These technologies will ensure that there will be better utilization of space and faster retrieval times, which are key factors in fulfilling the demand of e-commerce and its rapid delivery expectations. The latest in-depth research predicts higher penetration of automated inventory management solutions because businesses will continue in their pursuit of competitive advantages in a fast-paced market, further cementing its place as a leading solution in logistics automation.

Due to its role as the backbone of logistics operations that improve productivity and efficiency, hardware leads in the current logistics automation market.

The logistics automation market is expected to grow significantly with estimated hardware dominance. The reason for hardware to dominate is because it is central in the process of automating various logistics processes and includes devices such as AGVs, AS/RS, and robotics. These hardware solutions are developed and implemented to enhance material handling, optimal workflows, and operational efficiency in warehouses and distribution centers. Advanced technologies with sensor and control mechanisms need to be integrated into these materials tracking systems to provide for the real-time monitoring of shipment and inventory-a prime activity facing a surge in demand from rapid adoption of e-commerce and order fulfillment accuracy.

It implies that it is the logistics capabilities that companies are mainly investing in these technologies for-an aim to minimize manual errors and stay at high performance levels. However, the evolving hardware capability alone enables logistics operators to facilitate adjustments within the market and changing consumer expectations in the broader scheme of economic and consumer growth, especially through e-commerce expansion. Automation is also driven by a desire for cost efficiency and better safety in operations.

Logistics businesses invest strategically in automation hardware as mounting labor costs and order volumes increase the likelihood of both directions. This is more pronounced in areas like Asia-Pacific, where urbanization and industrialization are phenomenal. Their logistics firms should therefore look at upgrading advance automation systems to enhance efficiency.

North America takes the lead in the global market for logistics automation because the region gives much importance to technological innovation and early adoption of automated cutting-edge solutions to enhance its supply chain's efficiency.

North America, particularly the United States, is the hub for many of the world's giant and technologically advanced companies that continuously invest in automation to make their logistics processes more streamlined and gain competitive advantage. Various strategic factors have contributed to the competitive advantage of the region in logistics automation. These include rapid growth in e-commerce and heightened consumer expectations related to fast and reliable delivery. This requires immediate attention to process efficiency and accuracy in order fulfillment, which can be supported by automation solutions such as AGVs, robotic picking systems, and AS/RS.

Major e-commerce players and retailers in North America are at the forefront in adopting these technologies to optimize their warehousing and distribution operations. The advanced technologies and strong innovation ecosystem of the North American region propel the lift in logistics automation. North America is regarded as a hotbed for technology research, development, and innovation, and it remains the only region that offers an entirely comprehensive and vertically integrated set of automation providers, software developers, and system integrators. It becomes the innovation and collaboration driver for high-end automation technologies customized according to logistics needs.

Other reasons that pressured companies to invest in automation include high labor costs in North America, which helped reduce a firm's operational costs and enhance productivity. Automation systems perform tasks more efficiently and with fewer errors compared to manual labor, and it saves the company huge amounts through the reduction of costs and overall improvement in performance. These economic incentives have urged automation adoption in various sectors, such as manufacturing, retail, and third-party logistics (3PL).

Another aspect has been the developed infrastructure and friendly regulatory environment in North America that enabled this region to be at the forefront of logistics automation. Advanced transportation networks combined with government initiatives that promote adoption of technologies, allow innovation, and have a good platform for implementation of automated logistics solutions.

• In February 2024, Dematic announced that it would partner with Groupe Robert, Canada's largest logistics company, and opened its first fully automated cold-storage facility, which is dedicated to third-party logistics services for Quebec, Canada. The facility utilizes a state-of-the-art high-capacity Automated Storage and Retrieval System, with 130-foot-tall cranes designed for fresh and frozen products. Sustainability and advanced fire safety measurements have also become priorities, all while focusing on improved supply chain efficiency and as a central hub of manufacturers shipping their products throughout North America.
• In May 2023, Swisslog Holding AG said it established a partnership with Northern Tool + Equipment to bring a Swisslog Automation Solution to the firm's facility in Fort Mill in the U.S. state of South Carolina. The partnership was established to help fill Northern Tool + Equipment's omnichannel distribution needs. The solution is comprised of SynQ software-optimized AutoStore system from Swisslog Holding AG. The solution, thus, should therefore be functional by October 2023, and it will change the nature of all operations generally in Northern Tool + Equipment, enhancing efficiency while ensuring effective operations.
• In 31 March 2023,Storage Solutions is a warehouse and distribution center solutions provider based in the U.S. The company offers solution and service provisions including lifecycle services, workflow optimization, and safety inspections among other services., Jungheinrich AG confirmed it would acquire Storage Solutions in an effort to expand its footprint in the U.S.

Considered in this report

• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029

Aspects covered in this report

• Logistic Automation market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Activity

• On-farm Sales
• By Logistics Type
• Production Logistics
• Sales Logistics
• Recovery Logistics
• Procurement Logistics

By End User

• Retail and E-Commerce
• Manufacturing
• Healthcare and Pharmaceuticals
• Food and Beverage
• Automotive
• Logistics and Transportation
• Others (chemicals, aerospace)

By Organization Size

• Large Enterprises
• Small and Medium-Sized Enterprises (SMEs)

By Function

• Inventory and Storage Management
• Transportation Logistics

By Component

• Hardware (AMRs, AGVs, AS/RS, Automated Sorting and Conveyor Systems, De-Palletizing/Palletizing Systems, AIDC, Order Picking Systems)
• Software(Warehouse Management System (WMS), Transportation Management System (TMS))
• Services (VAS, Maintenance, Consulting, Deployment and Integration, Support and Maintenance)

The approach of the report:

This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases.

After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience

This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Logistic Automation industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.