Automated Guided Vehicles (AGV) in Supply Chain Market Size (2024 – 2030)

As of 2023, the Global Automated Guided Vehicles (AGV) in Supply Chain Market stood at a value of USD 4.2 billion, with projections indicating an expected market size reaching USD 8.29 billion by 2030. This market is poised to experience a compound annual growth rate (CAGR) of 10.2% during the forecast period spanning from 2024 to 2030. AGV systems play a pivotal role in the movement and transfer of products within industrial plants, warehouses, and distribution centers, eliminating the need for fixed conveying systems or direct user involvement. These systems navigate adjustable guide pathways within confined spaces to optimize warehousing, selection, and transportation operations. The growth in automation for material handling across various sectors, a shift from mass production to mass customization, the increasing prevalence of e-commerce, and the enhancement of workplace safety standards collectively propel the AGV sector within the supply chain industry.

INDUSTRY OVERVIEW:

Automated guided vehicles represent a category of material-handling equipment designed for the programmed transportation of pallets, trolleys, and trays, among other items, across manufacturing and warehousing sites. These systems contribute to heightened efficiency, leading to increased output and subsequently, improved profitability for businesses. Contemporary industries prioritize efficiency over mere productivity enhancements. Many industrial facilities are exploring methodologies such as JIT (Just in Time) and KANBAN, among others. AGV systems facilitate the movement and conveyance of goods within industrial plants, warehouses, and distribution centers, sans the need for fixed conveying systems or direct human intervention. In confined space settings, these systems adhere to adaptable principles to optimize storage, picking, and transportation tasks. AGVs find extensive utilization owing to several advantages such as reduced labor costs, minimized product damage, enhanced productivity, and scalability to accommodate automated operations. Transportation and logistics enterprises are increasingly adopting AGVs to bolster the efficiency of their operations, leveraging these significant benefits.

The expansion of the automated guided vehicle market is propelled by a rising demand for automation and AGVs across diverse industries, coupled with advancements in safety standards, accuracy, and productivity. Nonetheless, the AGV market faces challenges such as high initial investment costs and limited flexibility. The advent of Industry 4.0 presents lucrative growth prospects for stakeholders in the automated guided vehicle market. The current COVID-19 pandemic has significantly disrupted the autonomous guided vehicle market, with labor shortages due to government-imposed lockdowns and halts in production operations. Nevertheless, the market is poised for substantial growth in the future, fueled by an increasing demand for efficient, contactless logistics infrastructure.

IMPACT OF COVID-19 ON AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET:

The AGV market witnessed a contraction in size in 2020 due to the disruptions caused by the COVID-19 pandemic and subsequent suspensions across various sectors. However, with widespread vaccination drives in numerous countries, industrial operations are on the path to recovery. As global conditions stabilize and the demand for industrial goods rises, the AGV industry is expected to regain momentum in 2022 and beyond. The sudden outbreak and spread of COVID-19 caught industries and businesses off guard, leaving minimal time for preparation or mitigation of losses. Consequently, the AGV market in 2020 experienced a downturn compared to the preceding year, marked by closures or suspensions of production facilities across numerous industrial units globally. Various sectors including healthcare, e-commerce, and food and beverage underwent significant transformations amidst the new normal. The global demand for both industrial and consumer goods surged, consequently paving the way for anticipated growth in the AGV market from 2021 onwards. With the continued rise of automation across industries, the market size is expected to surpass pre-pandemic levels in 2022, fostering increased adoption of AGVs by 2026.

MARKET DRIVERS:

The adoption of automation in material handling processes is a key driver for market growth:

The demand for automation is on the rise across supply chain industries, driven by the overarching need for heightened operational efficiency. The integration of AGV-enabled industrial facility automation assists in meeting material handling capacity requirements, reducing production time, mitigating the risks of human errors, enhancing safety protocols, ensuring high production throughput, and improving precision and repeatability. Technological advancements such as Big Data and machine learning have facilitated enhanced material handling processes, enabling industries to interconnect factories, consequently fostering the adoption of automated material handling services. This integration allows for more adaptable production processes, enhanced quality control, and improved labor management, thereby driving the growth of automated material handling systems in tandem with the global expansion of the e-commerce sector.

Enhanced safety, accuracy, and productivity are propelling market growth positively:

Automated guided vehicles are engineered with safety features, equipped with lasers, cameras, and sensors that enable secure interactions with workers and infrastructure. Unlike some manually operated vehicles such as forklifts, which rely on human input and lack robust safety measures, AGVs minimize the risks associated with operator distractions or fatigue, thereby reducing the likelihood of accidents. The increasing adoption of AGVs in place of human laborers mitigates inaccuracies in processes, resulting in heightened productivity and precision outputs. The integration of AGVs also ensures a consistent flow of operations, enhancing overall safety, precision, and productivity.

MARKET RESTRAINTS:

The high costs associated with the installation, initial investment, maintenance, and transition to AGVs can impede market growth:

Compared to hiring labor or utilizing other human-operated equipment, the adoption of automated guided vehicles may not always yield immediate cost benefits. However, industries can realize long-term gains through the adoption of AGVs. Additionally, AGVs require regular maintenance and repairs, leading to significant downtime, which may not be financially viable for smaller enterprises lacking ready access to capital. Consequently, the automated guided vehicle market is anticipated to face challenges stemming from high initial investment and maintenance expenses.

In emerging economies, the prevalent availability of low-cost labor inhibits widespread AGV deployment:

The adoption of automated technologies remains limited in emerging economies such as India, Bangladesh, and Tanzania, primarily due to the low wages offered to workers. In regions where inexpensive labor is abundant, industrial automation may not always present a viable economic proposition. The cost-benefit analysis of labor versus automated systems in these emerging economies may favor human labor due to the relatively lower costs associated with employing workers. Countries such as Bangladesh, Cuba, and Tanzania are among those with the lowest average daily wages globally. Consequently, enterprises in emerging markets often opt for human laborers performing a variety of tasks, supplemented by semi-automatic tools, as a cost-effective solution for their manufacturing operations.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY COMPONENTS

• Hardware
• Software
• Service

The Automated Guided Vehicles within the supply chain sector are categorized into Hardware, Software, and Services based on components. In the year 2021, the hardware segment stood out in the market, holding a share of more than 70% of total sales. This inclination can be attributed to the rising utilization of collaborative robots within production and distribution facilities, aimed at reducing human labor and redundant tasks. The availability of various optimization techniques such as cobots, material handling equipment, gearheads, and actuators has led to the hardware segment's substantial market share. Furthermore, the services segment is set to make a significant contribution to the market growth of Automated Guided Vehicles within the supply chain sector. Projections indicate that the Services segment will witness the highest Compound Annual Growth Rate (CAGR) of 11.7% during the forecast period spanning from 2024 to 2030. The expanding end-user demand for diverse services including preventative and corrective maintenance, vehicle and software health assessments, and training for staff directly or indirectly associated with AGV operations is fueling this expansion.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY VEHICLE TYPE

• Tow Vehicle
• Unit Load Carrier
• Pallet Truck
• Forklift Truck
• Hybrid Vehicles
• Others

Categorized by Vehicle Type, the Automated Guided Vehicles within the supply chain industry include Tow Vehicles, Unit Load Carriers, Pallet Trucks, Forklift Trucks, Hybrid Vehicles, among others. As of 2021, the tow vehicle segment led the market, capturing more than 40% of total sales. These vehicles are designed for the transportation of substantial payloads on non-powered trailers, representing the most efficient type of AGV for towing and pulling due to their capacity to carry larger loads with multiple trailers compared to a single fork truck.

Over the forecast period, the unit load carrier category is expected to experience the fastest Compound Annual Growth Rate (CAGR) of 12.4%. Unit load AGVs are utilized for the delivery of pallets, large containers, and handling rolls. They facilitate improved work scheduling by reducing aisle traffic and minimizing product damage. These AGVs are particularly preferred over fork trucks that require human operation, making them suitable for long-distance travels, repetitive tasks, and potentially hazardous environments. Moreover, being autonomous robots, they decrease the dependency on human labor while enhancing workplace safety. Unit load carriers offer additional advantages such as trackable scheduling and efficient product delivery, making them efficient for shipping large items.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY BATTERY TYPE

• Lead Battery
• Lithium-Ion Battery
• Nickel-based Battery
• Others

The Automated Guided Vehicles in the supply chain sector are segmented by Battery Type into Lead Battery, Lithium-Ion Battery, Nickel-based Battery, among others. As of 2021, the lead battery category led the market, holding more than 60% of total sales. These batteries are favored for their affordability compared to other types. Additionally, they offer excellent reversibility, stable voltage, long service life, and versatility for various applications. Over the projected period, the lithium-ion battery segment is expected to exhibit the highest growth rate of 15.8%.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY NAVIGATION TECHNOLOGY

• Laser Guidance
• Magnetic Guidance
• Vision Guidance
• Inductive Guidance
• Natural Navigation
• Others

The Automated Guided Vehicles within the supply chain sector are classified by Navigation Technology into Laser Guidance, Magnetic Guidance, Vision Guidance, Inductive Guidance, Natural Navigation, among others. Among these, the laser guidance category led the market in 2021, accounting for more than 35% of total revenue. The laser guiding sub-segment in the logistics industry is anticipated to expand due to its role as an electronic eye for obstacle avoidance during operations. Laser systems are appealing to AGVs due to their combination of adaptability and precision in evading disruptions or obstacles encountered during operations.

Over the forecast period, the vision guidance market is expected to grow steadily. The increasing adoption of autonomous vehicles is driving the need for optimized and efficient routing. Advancements in computer vision and associated software solutions are aiding Automated vehicles in real-time environment evaluation, increasing demand for AGVs in challenging conditions such as navigating large components through narrow aisles. Additionally, the Natural Navigation segment is poised to significantly contribute to market growth. It is projected to exhibit the fastest growth rate of 17.4% over the forecast period.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY APPLICATION

• Logistics & Warehousing
• Storage & Assembly
• Packaging
• Others

Automated Guided Vehicles find applications across various industries including Transportation & Distribution, Storage & Assembly, and Packaging, among others. As of 2021, the logistics and warehousing segment dominated the market, accounting for more than 40% of total revenue. Businesses are rapidly adopting modern retrieval systems, automated storage solutions, and other material handling equipment to modernize existing facilities and construct new ones, aiming to reduce labor costs and enhance operational efficiency and productivity, thus driving segmental growth.

The storage and assembly segment is projected to expand at a Compound Annual Growth Rate (CAGR) of 13.1% over the forecast period. Logistics and storage companies are employing taller racks, compact layouts, and narrow lanes to remain competitive while aiming to enhance operational efficiency to meet growing service demands. These companies are particularly adopting AGV solutions due to their ability to navigate accurately and efficiently through narrow aisles and compact layouts, thereby improving the reliability of the storage process. The rising demand from logistics and warehousing companies is expected to boost the market for AGVs in the supply chain industry.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY END-USER

• Automotive
• Food & Beverage
• E-commerce
• Manufacturing
• Others

Automated Guided Vehicles are widely utilized across industries such as Automotive, Food & Beverage, E-commerce, and Manufacturing, among others. In 2021, the manufacturing sector led the market, accounting for more than 75% of total sales. AGVs are equipped with laser heads, cameras, and sensors to ensure safe operation around machinery, buildings, and personnel. Unlike human employees in production or distribution facilities, AGVs can aid in improving workflow accuracy, reducing waste, and enhancing efficiency. The E-commerce segment is anticipated to significantly contribute to market growth, driven by the expansion of eCommerce giants such as Amazon, Alibaba, and others. AGVs play a crucial role in proper material handling, ERP systems, high-rack storage systems, and warehouse management within the e-commerce industry.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY REGION

• North America
• Europe
• Asia Pacific
• Latin America
• The Middle East
• Africa

Regionally, the Automated Guided Vehicles within the supply chain industry are segmented into North America, Europe, Asia Pacific, Latin America, The Middle East, and Africa. North America is poised to witness rapid development, holding the largest share of the automated guided vehicle market. The strong presence of Key Players in the United States is expected to drive market growth during the forecast period. The rise in import and export operations is further fueling this expansion. Warehouse operators are increasingly turning to automation technology to enhance warehouse operations and boost efficiency. Companies in the region are innovating new tools and equipment using cutting-edge technology to meet the expanding demands of clients. Additionally, being one of the world's most technologically advanced nations, the United States is projected to exhibit substantial growth.

The Asia Pacific region is expected to experience exponential growth over the forecast period, driven by the rapid expansion of the e-commerce sector in nations such as China, India, and Japan. Several governments in the Asia Pacific region are implementing various initiatives to support the growth of the manufacturing industry, presenting an attractive market expansion opportunity. Moreover, the booming e-commerce industry is attracting several e-commerce companies to expand into these regional markets. Consequently, with rising e-commerce competition, industry players are striving to differentiate themselves by reducing delivery times to end-users.

The European market is anticipated to grow steadily during the projection period. The region's market is expanding due to the increasing demand for material handling equipment among incumbents in the manufacturing sector. Automation has also supported the growth of the regional market across all industries. Key players are focusing on enhancing their product portfolios to drive the advancement of industry 4.0 and industrial automation. Moreover, investments in sustainable development from both public and private sectors are expected to rise, propelling market growth in the region.

AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET - BY COMPANIES

The automated guided vehicle industry is moderately fragmented and competitive due to the presence of numerous market players. Factors such as digitalization and the integration of Industry 4.0 with IoT present significant growth opportunities for the autonomous guided vehicle industry. Major players are emphasizing innovation, mergers, and product launches to capture market share and expand their product portfolios. Notable market participants include:

1. Swisslog Holding AG
2. Egemin Automation Inc.
3. Bastian Solutions, Inc.
4. Daifuku Co., Ltd.
5. Dematic
6. JBT
7. Seegrid Corporation
8. TOYOTA INDUSTRIES CORPORATION
9. Hyster-Yale Materials Handling, Inc.
10. BALYO
11. E&K Automation GmbH

NOTABLE HAPPENINGS IN AUTOMATED GUIDED VEHICLES (AGV) IN THE SUPPLY CHAIN MARKET

• PRODUCT LAUNCH: Addverb Technologies Private Limited, a robotics and automation company, announced its expansion into the Australian, European, and Singapore markets in September 2021. This move was a response to the increasing global demand for unit load AGVs, robotics, and automation solutions.
• FUNDING: Seegrid Corporation announced a USD 25 million equity fundraising round led by G2VP Ventures. The company stated that the investment was driven by the COVID-19 pandemic, which mandated social distancing for non-essential personnel. This funding addresses various industrial positions requiring physical presence.
• PRODUCT LAUNCH: In July 2021, ElephantRobotics, a Chinese firm specializing in robotics design, production, development, and intelligent manufacturing services, introduced MyAGV. This vehicle is equipped with a 5-megapixel camera and an 8-meter recognition range, capable of identifying obstacles and gathering data.