Warehouse automation market will cool down

Analysts forecast warehouse automation to slow down in 2023, growing at only 2% but then come back stronger in 2027. According to  Interact’s “Depot Automation 2022” report Analysis, from 2024 to 2027, the market will grow at a CAGR of 19%, thanks to improving macroeconomic conditions as well as steady growth in the e-commerce industry.

“Certainly the long-term outlook for the warehouse automation industry is very good, but there are some challenges in the short and medium term,” said Rueben Scriven, Research Director at Interact Analysis. One big challenge was that Amazon decided to slow down the process of building out its network of fulfillment centers. Figures show that about 35% of the total warehouse automation market in 2021 will come from Amazon, so when Amazon decides to slow down its investment in automation, it will slow down the market growth. However, this is not instantaneous due to the timelines involved in implementing many types of automation systems.

The market bottom line, said Scriven, is that revenue will still grow in 2023, but less than in 2021, largely due to more modest e-commerce growth. Other factors such as inflation, the Russia-Ukraine war that reduces spending on automation in Eastern Europe… will also affect the market.

“I find companies are getting too optimistic about e-commerce, while e-commerce sales will not be as high as originally expected. This is rebalancing some of the problems in the market. ‘ said Mr Scriven.

Besides, in the long term, Interact Analysis information of e-commerce will continue to grow, while other trends such as the use of electric vehicles (EVs) and the promotion of energy-saving technology will increase the demand for automation. warehouse automation in the EV and battery supply chain. Mr. Scriven further shared that in the US market, the trend of reshoring and near-shoring is also likely to increase the demand for warehouse automation. These trends will help automation suppliers and system integrators find more customers in the durable goods sectors.

For suppliers, the expert said that diversifying into fields other than e-commerce will help grow more stably. Additionally, software solutions do not have to be combined with new automation hardware projects, but can be used to coordinate existing systems or help optimize manual warehouse processes. labour. This is expected to make a difference, allowing integrated solutions providers to win the business.

In the long term, companies should continue to invest in warehouse automation to make e-commerce operations faster and more cost-effective.

Thanh Thu (according to Logistics Management)