The automated material handling market was valued at US$26.485 billion in 2020, and is estimated to grow at a CAGR of 7.36%, reaching a market size of US$43.528 billion by 2027.
Computerized technologies that use robots in place of any human labour are known as automated material handling systems. They are employed to push, pull, store, lift, and retrieve goods and resources. This technology has the potential to revolutionise manufacturing facilities and warehouses in terms of productivity. Through various stages of a product's life cycle, from production to delivery to clients or end users, automation and material handling are essential. By utilising cutting-edge equipment and technology, this material handling system shortens the transit period. The popularity and market growth of automated material handling have increased due to a number of significant factors, including rising labour costs and safety concerns, technological advancements, and an increase in the productivity and efficiency of manufacturing and warehouse operating companies. Furthermore, significant improvements in global manufacturing and growing industry demand for automation in emerging economies are expected to boost the demand for automated material handling.
The phenomenal increase in online shoppers over recent years has resulted in a boom for the e-commerce sector. The rise in B2C sales is especially evident in the online sales of food, household items, and prescription drugs. However, the e-commerce sector's rapid expansion has put immense pressure on businesses to find and deliver a vast quantity of goods within the allotted period. As a result, e-commerce companies have automated their operating facilities.
Automated technologies are increasingly being used by Amazon, Walmart, and other large retailers to carry out operations in a more reliable, accurate, efficient, and secure way. For instance, in January 2020, Amazon signed a contract with Baylo, a French robotic software company. The creation of ground-breaking robotic technologies for material handling vehicles gained value from this business arrangement. By enhancing Amazon's warehouse material management, this strategic project streamlined the e-commerce industry. In addition, the expansion of the manufacturing industry is a significant factor in the market. Facility owners are focusing on providing and delivering goods to their customers at a faster, more affordable, and higher quality rate.
As a result, incorporating automated equipment enables more productive production cycles while reducing waste and operational expenses. For instance, In October 2022, Walmart agreed to acquire Alert Innovation, a robotics automation business. Over the past five years, Walmart and Alert have collaborated to modify Alert's material-handling technology for use in Walmart's market fulfilment centres. Walmart is bringing Alert's skills in-house through the acquisition in order to scale its operations and deploy MFCs more quickly. Due to the thriving e-commerce industry, the market for automated material handling equipment is anticipated to expand rapidly over the coming years.
The material handling sector is expected to grow as smart factories become more popular. A digitalized factory, known as a "smart factory," continuously gathers and shares data using networked equipment, machinery, and production systems. The decisions made based on this data are then used to enhance the processes and address any potential problems. In order to assess operational effectiveness and minimise waste, the complete material handling equipment production floor, including selecting, sorting, and conveying systems, needs monitoring at every stage of the market process. Such situations are made possible by smart factories that are connected to automated forklift trucks market automated systems. Additionally, a number of user-friendly technologies, like data analytics and cloud connectivity, are integrated into material handling systems to enhance asset performance and deliver real-time actionable information. For instance, over 200 robots are assisting workers in Infineon's Smart Factory in Dresden, which has a 92 percent automation rate. The manufactured wafers are transported automatically, and the smart factory is run by algorithms and centralised operating and monitoring systems.
The integration of automated systems, which are already present in facilities, also offers wireless remote control systems, which aid in improved diagnostics and speed up commissioning.Due to the aforementioned elements, the automated material handling equipment market is potentially expanding as smart factories and Industry 4.0 develop.
The primary factors influencing the expansion of the Asia-Pacific regional segment include the region's expanding industrialisation, rising e-commerce sales, and the significant presence of technology suppliers. As a result, many businesses are investing in R&D to develop innovative solutions and maintain their competitiveness. For instance, in June 2020, VisionNav Robotics successfully closed a B1 round of fundraising led by Lenovo Capital & Flyfot Ventures and totaling over CNY 100.00 million with the previous stakeholder, Eastern Bell Capital. The funding was used to increase R&D efforts to advance current visual control and perception technology. These events will accelerate the market growth for AMH.
Rising interest in warehouse automation, increased focus on robotics and automation by advanced economies like China and Japan, and the expansion of e-commerce are a few of the key drivers of Asia Pacific's larger market share. The market for automated material handling equipment in Asia-Pacific is expanding as a result of the fast expansion of the automotive, e-commerce, food and beverage, and healthcare sectors in developing nations like China and Japan. Additionally, governments in the Asia-Pacific region are putting more of an emphasis on factory floor safety and security, which can be best achieved by implementing automated material handling technology. For instance, in July 2022, Smart Automation Grants (SAG) worth RM138.5 million were given to 238 companies by the Malaysian Investment Development Authority (MIDA). This is a specific incentive from MDEC intended to encourage businesses to digitally transform and automate their business processes. The funding will be used to support the creation and execution of initiatives that encourage the adoption of technologies to automate business processes.
The market for automated material handling solutions is being hindered by high implementation and switching costs. Businesses find it challenging to invest in AMH equipment due to the high total cost of ownership that is increased by deployment, software solutions, the use of intelligent sensors, after-sales services, and routine maintenance. SME's are unable to completely automate their supply chain operations due to the large upfront expenses associated with deploying AMH equipment. Small businesses choose manual material handling procedures because they cannot afford automated technologies. Some major businesses reduce the upfront costs by leasing equipment, renting industrial trucks, or purchasing used equipment. The automated material handling equipment market's growth is anticipated to be hampered by the high operational and maintenance expenses involved with these systems. Higher operational costs arise from the need to ensure smooth operations when using automation in the production process. The market's overall growth may be impacted by the increasing tendency to rent out equipment as a result of rising capital costs.