Canada’s manufacturing sector to help drive global logistics automation market

A new study says the global logistics automation market size will be valued at US$81.5 billion by 2033, and that Canada’s manufacturing sector is helping drive the growth.

The study, which was done by Straits Research, says a yearly increase in the logistics automation market of 10.2 per cent from 2025-33 will result in an increase from the current market value of US$34 billion.

In addition to warehouses being one of the main drivers of the growth, the study said Canada has one of the world’s largest and most advanced manufacturing economies. A highly productive sector of the economy is the production of plastics, metal products, consumer goods and vehicles. Despite growth in the manufacturing sector, there is a sizable demand from the country’s e-commerce-focused storage and logistics industry.

“Scaling up and achieving innovative, practical standards are necessary for warehouses and fulfillment facilities,” the analysis indicated. “Automated warehouses have driven the demand for quicker responses and the requirement to manage a more significant number of stock-keeping units (SKUs) with less error due to the introduction of always-on e-commerce. The urgent need to cut costs, reorganize workflows, and boost productivity propels robotic breakthroughs. In addition, the economy is improving, and the industry under study has expanded due to the increased demand for automation brought on by the fierce competition in e-commerce.”

Automation has increased efficiency while enhancing control and making various purchases more manageable. It is also beneficial for controlling inventory and the manufacturing process. It assists in improving both customer service and the delivery of multiple commodities throughout time. Automation in this area has benefitted transportation and storage due to the increased use of automated vehicles, automatic mobile robots, robotic arms, automated retrieval, and storage systems. The usage of software and services has increased, which has enhanced warehouse management. It provides real-time updates on the loading and unloading of the cargo. In addition to these factors, the growing e-commerce sector will raise the demand for inventory management and warehousing.

Despite the comparatively developed marketplaces in industrialized nations and established businesses having set explicit norms, the digital shift is still in progress. The endeavour has been driven by increased funding from Asian economies and a flood of innovation from start-ups. As a result, there will probably be more warehouses and FCs worldwide. According to a recent Honeywell Intelligrated survey of 171 material-handling executives in the U.S., 35 per cent of the executives said that their primary challenge was to fulfill more orders (quicker and cheaper), while their secondary concerns were to reduce order processing errors/improve order accuracy and to find enough labor to support operations. Making room in the region for automation as a result.

To meet the demand for home delivery, warehouses and fulfillment centres have been observed using one of two strategies: extending their current location or building new ones (or curbside delivery). The latter, however, costs more than the former. By 2020, warehouses will have grown to approximately 200,000 square feet, up from an average size of roughly 65,000 square feet in 2000. Warehouses can accommodate higher volumes and SKUs due to their expanded size. The management of this further increases functional complexity. By hiring more workers, the centers would incur costs ranging from salaries to rent and a significant functional hit from delays and accidents. Automated, appropriate mini-load storage and retrieval systems (AS/RS), which use lightweight cranes to sort individual totes, cases, trays, and crates while enhancing storage and liberating priceless human and transportation resources, are designed to meet this market challenge. These systems maximize supply chain effectiveness by automating critical processes like receiving goods, optimal inventory management, and order fulfillment for outbound transportation. Additionally, several investments have been made to increase the technological capabilities of automation.

Regional analysis

Asia-Pacific is the most significant revenue contributor and is expected to grow at a CAGR of 12.37 per cent during the forecast period. A substantial industry in the Asia-Pacific region is manufacturing. China’s economy, which contributes significantly, is changing quickly due to rising labor costs and the traditional migrant workers availability. The Chinese economy has been compelled by these changes to automate its industrial processes. A significant supplier of warehouse robots in the Asia-Pacific region, particularly to the automotive, industrial and e-commerce industries, is China, one of the largest economies in the world. This is causing the market to expand. E-commerce will help the industry and sales grow even more. Australian warehouses are already adjusting to the rise in demand. The industry will witness more lone orders rather than standard bulk orders. Due to increased sales and corporate expansion, warehouses are predicted to expand and hire more personnel. The country is adopting modern technologies and implementing more automated processes, increasing logistic automation’s rise.

North America is expected to grow at a CAGR of 11.2 per cent during the forecast period. The growth of e-commerce is the primary factor driving the increase in the usage of robots in warehouses and distribution facilities in the United States. The market has grown due to technological developments that have decreased costs, improved and shrunk robots, and produced a labor shortage in some areas. Significant firms with plenty of warehouses and distribution facilities also employ acquisition strategies to increase their profitability and reduce labor expenses. For instance, retail behemoths like Amazon recently paid US$775 million for the startup robotics company Kiva Systems, giving it control over a new class of mobile robots. The foundation for creating new warehouse robotics models was created by this investment, opening the door for a potential future for the machines.