Recently, the U.S. material handling equipment market passed through a period of uncertainty over raw material prices as the Trump administration announced the increase of tariff on aluminum and steel imports into the country. Indeed, the industry contenders were concerned that such an administrative move will cause the sale of steel intensive material handling products such as shelves and racks to take a nose dive. However, expert claims, stating that the investment scenario in material handling equipment industry will remain strong as ever, turned out to be true owing to the tremendous demand of warehouse equipment which has been augmented by the robust e-commerce industry.
Germany Material Handling Equipment Market, By Product, 2017 & 2024, (USD Million)
E-commerce has emerged as a disruptive trend that has potentially altered various market landscapes. It has easily outpaced traditional retail and numerous participants in the retail industry are fast upgrading themselves to stay afloat in a market currently influenced by e-commerce. Even online retailers have driven customers to have higher expectations of fast and often, free delivery. To keep pace with such a competitive environment not only the traditional retailers but e-commerce industry itself has maximized the used of automated processes which has in turn augmented material handling equipment market outlook.
The ecommerce sector was valued at $14 billion in 2017 and it has created a huge demand for flexible and scalable material handling solutions for the optimization of productivity and accuracy. Automation has become the mantra for increasing operational speed, storage, transportation and pick and placing objects. Such demands have necessarily fueled material handling equipment industry which will register significant profits through the e-commerce industry alone, by the year 2024.
But e-commerce is not the only trend that is shaping the future of the material handling equipment market. The global digital transformation is a key to understanding the future trends in the material handling equipment industry. As such, a recent survey found that 69% of the CFOs and financial executives have recognized digital transformation as a shaping influence and are planning to increase investments in technologies that speed up business change. Not only is such a move being undertaken to improve customer experience but also to overtake the competition. A trend for automation optimization has been reflected in the rising popularity of automated storage and retrieval system in the material handling equipment market. As per estimates, The automated storage and retrieval system (AS/RS) based material handling equipment industry is anticipated to account for $49 billion by 2024, driven by the product’s increased applications in transporting inventory to conveyor belt, operation station or manual outfeed.
Storage equipment such as pallets, racks and shelves also play an important role in the expanding e-commerce and retail scenario as these storage equipment are important for the orderly arrangement of goods that are to be transported or awaiting consumption. Trump’s increases of tariff on steel imports were most likely to hit the prices of storage equipment. However, material handling equipment industry growth is predicted to remain unhindered as major players across different industries realize the importance of such equipment. This would lead to material handling equipment prices retaining stability by increased tariffs on American exports. The inclination to sustain stability in the material handling equipment market at the possible expense of third party logistics providers who would possibly take the biggest hit, aptly demonstrates the desire among various participants to maintain the growth of the market.
An increasing number of companies are expanding their product lines which is making automation a necessity as on today. Companies offering effective automation solutions are thus expected to drive the material handling equipment industry growth. Strategic acquisitions will further strengthen the material handling equipment market – for example, the recent acquisition of VanRiet Material Handling Systems by Material Handling Systems. VanRiet offers automated sortation systems, after-market services and sortation equipment to a global customer base. The acquisition will facilitate both companies with superior products and services which also includes third party logistics, express parcel, warehousing and distribution.
In the years to come, material handling equipment industry will be peppered with numerous instances such as the aforementioned. As lucrative mergers and acquisitions make their presence felt across this vertical and product innovation also gains traction as a pivotal strategy, material handling equipment market is anticipated to uphold its steady pace of growth over 2018-2024.