The postal automation market is predicted to grow at a compound annual growth rate (CAGR) of 6.10% to attain a market size of US$4.900 billion by the end of 2026. Mail sorting systems, postal software, package sorting systems, and automatic reading and coding systems are all part of the postal automation systems. The fundamental reason for the need for postal automation is to eliminate the flaws of traditional postal systems, such as human errors, longer processing times, and a high labor need. The postal industry's automation allows for faster and more accurate classification of letters and parcels, as well as the digitalization of the process.
Automation in the postal system streamlines the entire mail processing chain, from pre-sorting through sequencing, lowering fixed costs while also enhancing service quality. It also aids in boosting the system's profitability, competitiveness, and quality as well as lowering labor costs because the process requires less manpower. Furthermore, during the forecast period, the increased demand for industrial automation is expected to boost market expansion for postal automation systems. Due to the move from traditional to automated postal systems over the projection period, Government postal applications are expected to hold a significant market share by end-user.
Increased demand for automated sorting and delivery operations in the postal industry, growth in e-commerce businesses and growing labor costs are all factors propelling the market forward.
During the projected period, the growing popularity of the e-commerce industry is expected to drive market expansion in the postal automation market. The growing popularity of e-commerce is posing a challenge for the logistics business, as traditional operations can be inaccurate and waste a lot of time and money. According to the Wall Street Journal, nearly one-third of all products sold online are returned by customers, necessitating the use of reverse logistics. The high volume of package transfers is predicted to propel the postal automation market forward, as a big number of shipments would necessitate the use of an efficient parcel automation system. Another key benefit of an automated postal system will be a decrease in labor expenses and reliance. High attrition rates, government rules, declining efficiency, and a scarcity of employable skills are only a few of the causes for the rise in labor expenses that the traditional postal industry must face. Labor expenses are rising in many areas, including manufacturing, automotive, logistics, energy and power. The automated postal system saves businesses money by reducing labor expenses and making the entire process more efficient, accurate, and productive. Traditional postal operations are evolving into smarter, more connected, and more efficient automated postal operations as a result of the integration of Industry 4.0 principles, which creates potential for market suppliers. The market expansion is expected to be fueled by rising demand in the online shopping industry.
Maintenance costs and hefty initial investments curtail the market’s growth
The initial investment required to automate the mail system is considerable. Because the entire process will be digitalized, as well as the installation of various hardware and software, a considerable sum of money will be necessary to automate the entire postal system. Furthermore, once the automated system is in place, it will need to be maintained, serviced, and renewed on a regular basis, adding to the variable cost. As a result of the high costs involved with the installation and maintenance of the postal automation system, market growth may be hampered during the projection period as organizations seek to reduce or avoid this additional expense. Furthermore, technological problems halting the operating process and designing an advanced postal automation system in the era of the Industrial Internet of Things (IoT) are two major hurdles for participants in the postal automation system market. Technical faults with any sensor element in postal automation systems could bring the system to a standstill, causing mail and parcel delivery to be delayed. Any sudden difficulty with control software would cause automated systems to malfunction, causing a delay in the entire process of sorting and delivering messages.
The federal government's requirement that the post office contribute money to help lower the federal budget deficit restricts the amount of money available to spend for automated technologies. Rate incentives that encourage the privatization of mail processing divert work from the post office, lower postal earnings, and underutilize current automation equipment. In addition, the private presort sector undercuts the post office by paying personnel far less than postal wages to prepare mail shipments for distribution and delivery by the Postal Service.
The hardware component outperforms the software component to grow at a significant rate
In the postal automation market, the hardware component is likely to have a significant share. Automation is fundamentally a collection of connected hardware components and data solutions in any industry vertical. It is predicted that growth in the number of new system installations as part of capacity expansion and upgrades in existing systems as part of automation in the postal industry is likely to drive the market. Furthermore, crossborder retail has aided the increase of parcel deliveries. As a result, in order to improve the postal industry's supply chain, an automated and connected hardware system is required in a postal automation system.
Sortation systems are essential for increasing the efficiency of postal operations
Postal firms frequently utilize sortation systems such as flat sorters and package sorters. Increasing parcel quantities, on the other hand, have put postal operators under pressure to deliver parcels faster. To stay afloat in today's harsh business climates, postal operators are turning to novel automation solutions. As a result, package sorters play a critical part in parcel delivery operations, and their importance is projected to rise in the coming years.
The Asia Pacific region will expand at breakneck speed, but North America will dominate the market
During the forecast period, North America is estimated to hold the greatest share of the postal automation system market. The presence of large postal and courier, express, & parcel (CEP) firms in the region is one of the primary drivers driving market expansion in the region. The Asia Pacific will grow at a significant rate owing to an increased need for a more automated and streamlined approach that would arise from the growing trend of e-commerce in developing countries such as India, China, and South Korea, among others. The presence of some of the leading market companies makes products and services more readily available in emerging regions, increasing demand for these devices. The European and North American markets were early adopters of postal automation technology, and they are now upgrading their systems to provide greater connection and satisfy growing demands, resulting in a surge in demand for postal automation solutions in the region.
Coronavirus Pandemic Analysis
The report also provides a study about the impact of the coronavirus on market for the postal automation and other end-user industries, stating how the lockdown and employment have severely impacted the postal automation market along with the impact of a disrupting supply chain on the industry.