The global postal automation market was valued at US$3.238 billion in the year 2019 and is estimated to reach up to US$4.900 billion in 2026 to grow at the compound annual growth rate of 6.10%. The postal system is sending and receiving a message in a document form. And automation is rising in many industrial sectors as it reduces time consumption and operational cost. Whereas a postal automation system is an advanced intelligent system that provides a solution in terms to eradicate the limitations of the traditional postal system. These limitations occur due to human errors, insufficient labor, and time consumption. Due to the increase in the use of electronics to carry several tasks, the mailing is carried out electronically in almost all sectors. The automation postal system allows the mails to send and receive in a safe, reliable, and fast manner. This system also provides efficiency for sorting the parcels. The postal automation system includes automatic reading, encoding, decoding, and postal software system.
Growing E-commerce and Digitalization Driving the Growth of the Postal Automation Market
Due to many advantages and satisfactory results of the e-commerce system, in the last few years, the adoption of e-commerce has increased worldwide. Many industries rely on e-commerce for transactions. The rising number of online outlets also considers e-commerce as its growth factor. According to a report by the U.S. Department of Commerce, there is a 15% growth in the e-commerce industry in 2016 which has reached up to the US$395 billion total sales. As the manual logistic procedure require a lot of time, labor, and money, e-commerce is considered a reliable alternative to this traditional logistic industry. As per the report by Wall Street Journal, out of all the products sold by the online sales, one-third of products are returned by consumers; this generates the need for reverse logistics. Similarly, the packaging industry also is projected to drive the postal automation market owing to the rising demand for efficient voluminous parcel packaging and transfer systems.
Increasing the adoption of digitalization is another factor in the market growth of the postal automation market. Due to the positive results of digitalization, many industrial sectors rely more on digitalizing their mailing system. Additionally, to encode the messages and decode the received messages or data, automatic software is used. This software is provided by the postal automation system. The postal automation system increases profitability, improves quality, by reducing fixed costs, and processing time. From the IT industries to even the small-scale industries the rising adoption of digitalization is attributed to boosting the postal automation market during the forecast period.
Reduction in Labor Cost- A Reason to Adopt Postal Automation System in Industries
As the postal automation system is entirely automatic and uses software and hardware, it reduces labor dependence and labor costs. This is the primary advantage of the postal automation system which leads many industries to implement it. The increase in the labor cost is due to some government regulations, rise in attrition rates, downfall in productivity, and lack of employable skills. Due to these factors, the traditional postal system has to suffer which affects the productivity and overall performance of the industry sector. As per the report by Eurostat, in 2018, the Annual growth in labor cost was 2% and 2.7% in the Euro area and European Union respectively. The labor costs were increased in many sectors including, power, energy, logistic, automotive, and manufacturing. With saving from the labor costs, the automated postal system also helps the companies to make the postal process economical, with high productivity, and most importantly, accurate. Owing to these factors the postal automation market is estimated to grow n the upcoming years.
The Extravagant Price Restricts the Growth of the Postal Automation System
Although the automated postal system saves labor costs, the costs of installation of a postal automated system are comparatively high. It requires quite a huge fund to invest initially as it is entirely digitalized with various software and hardware. Moreover, after the installation, the postal automated system requires regular servicing, up-gradation of its software, hardware, and regular maintenance which of course requires a skilled employee. This will also add to the further costs. Therefore, an unaffordable rate of the overall procedure right from the installation to the maintenance can hinder the growth of automated postal systems as small-scaled industries and new market players tend to avoid extra expenditure. This can restrict the market growth of the postal automation market during the forecast period.
North America and Europe to Boost the Market
Due to advancements in technology in the countries like United States, Canada, Germany, etc., the early adoption of the postal automation system was done in North America and European countries. Many of the industries in these countries have now upgraded their postal automated system as these industries have experienced the positive results of the automated postal system in terms of accuracy, and productivity. The demand is expected to grow in upcoming years thereby boosting the market growth during the forecast period. Whereas Asia-Pacific countries like China, India, Japan, South Korea have also adopted the e-commerce trend in past few years. This trend is expected in the implementation of postal automation systems in the industries sector of these countries. Moreover, the presence of key market players also is projected to augment the demand for the postal automated system. Therefore, Asia-Pacific is also propelled to grow rapidly in the postal automation market during the forecast period.
Due to the infection of the coronavirus all over the world, many restrictions were imposed on social life such as social distancing, travel, shut down of the businesses, and industries. This surely has affected the productivity and finances of many sectors. However, to overcome the loss and to maintain productivity with fewer laborers, many industries adopted digitalized working alternatives. Additionally, there was a rise in e-commerce industries as the number of online outlets and online shopping was increased. Due to this, the postal automation market was moderately affected during this period.