Industry: Industrial Automation
Format: PPT*, PDF, EXCEL
Published Date: December-2024
ID: PMRREP18838
Number of Pages: 188
The global industrial racking system market is estimated to reach the size of US$ 7.5 Bn by 2025. It is anticipated to experience a CAGR of 3.9% during the forecast period to reach a value of US$ 9.7 Bn by 2032. The need for supply chain reliance and optimization is predicted to drive investments in advanced racking systems that can handle high inventory turnover rates, and manage complex supply chains.
Integration of AI and ML with industrial racking systems is likely to provide valuable insights into warehouse performance, predictive maintenance, and inventory management. AI powered solutions are likely to be used in 40% of industrial warehouses by 2030, thereby improving operational performance and maintenance processes.
Growth of e-commerce is estimated to be a key growth driver for the industrial racking system market. With more goods being stored and distributed through warehouses, retailers and distributors are progressively adopting advanced racking systems to enhance space utilization and order fulfillment processes. Prominent e-commerce players like Amazon, Walmart, and Alibaba are leading the way by building vast warehouses that require high-density racking systems and automated material handling systems.
Key Highlights of the Industry
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Market Attributes |
Key Insights |
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Industrial Racking System Market Size (2025E) |
US$ 7.5 Bn |
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Projected Market Value (2032F) |
US$ 9.7 Bn |
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Global Market Growth Rate (CAGR 2025 to 2032) |
3.9% |
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Historical Market Growth Rate (CAGR 2019 to 2023) |
3.5% |
North America industrial racking system market is estimated to hold a share of 29% in 2024. According to the U.S. Census Bureau, e-commerce retail sales in the U.S. reached US$ 1.07 trillion in 2022. This rapid expansion of online retail increases the demand for high-density and automated racking systems to manage soaring inventory needs.
The adoption of automation technologies has further propelled market growth. Over 50% of warehouses in North America are estimated to implement automation solutions like automated storage and retrieval systems (ASRS) and robotics 2032.
Substantial investment in supply chain optimization has spurred demand for smart racking solutions that integrate with Warehouse Management Systems (WMS) and IoT-enabled inventory management tools. The region’s robust cold storage infrastructure also contributes to its dominance.
With the U.S. cold storage market valued at over US$ 35 billion in 2022, industries like food and beverage, pharmaceuticals, and chemicals are increasingly adopting temperature-controlled racking systems. Government incentives supporting sustainable practices in warehousing have encouraged the use of energy-efficient and recyclable racking systems.
Selective pallet racking systems are emerging as the leading product type with a share of 31% in 2024. These systems enable direct access to every pallet, making them ideal for warehouses with a diverse inventory and high SKU (Stock Keeping Unit) counts.
One of the key drivers of growth is the rapid expansion of the e-commerce sector, where selective racking is used extensively to ensure quick and efficient picking and replenishment of goods. Industries like food and beverage, retail, and pharmaceuticals prefer selective pallet racking for its compatibility with FIFO (First-In-First-Out) and LIFO (Last-In-First-Out) inventory management systems.
Selective pallet racking systems are also favored for their cost advantages compared to other high-density solutions, making them accessible to small and medium-sized enterprises. These racks are easy to install, customizable, and adaptable to automation technologies, increasing their utility in modern warehouses. Their balance of functionality, affordability, and adaptability ensures selective pallet racking remains the leading choice in the industrial racking system market.
The retail sector is estimated to hold a share of 41% in 2024. Retailers rely heavily on advanced storage solutions, such as industrial racking systems, to optimize warehouse operations, ensure quick order fulfilment, and accommodate diverse product range.
In 2023, online retail sales accounted for 19.2% of global retail sales and are expected to surpass 24% by 2026. This surge is predicted to increase the demand for scalable and efficient racking systems, particularly in large distribution centres and micro-fulfilment hubs supporting omnichannel retail.
The shift toward omnichannel strategies, where businesses integrate physical and digital retail experiences, has necessitated flexible racking systems. Selective pallet racking and dynamic flow racking are particularly favoured in retail warehouses owing to their ability to handle fast-moving inventory and varying stock-keeping units (SKUs).
Reports indicate that 60% of retail warehouses globally adopted selective pallet racking systems in 2022, enhancing operational efficiency and reducing picking times by up to 40%.
Steel is estimated to emerge as the leading material with a share of 61% in 2024. Steel racking systems offer superior strength, enabling them to handle heavy loads and withstand wear and tear over extended periods.
The widespread availability and cost-effectiveness of steel material compared to alternative materials like aluminium or wood further bolster demand. The global steel industry has supported this trend through innovations such as high-strength alloys and corrosion-resistant coatings, which enhance the longevity of racking systems, especially in demanding environments like cold storage.
Steel racking systems are highly customizable, accommodating the diverse needs of warehouses, from selective pallet racks to high-density drive-in systems. Sustainability is another critical factor in the dominance of material.
Steel is 100% recyclable, aligning with the increasing demand for eco-friendly warehousing solutions. A report noted that 40% of warehouses globally are adopting green building practices, where recyclable materials like steel are preferred.
The ability of material to integrate with automation technologies, such as Automated Storage and Retrieval Systems (ASRS), further solidifies its position as the preferred choice. As industries continue to prioritize efficiency, durability, and sustainability, steel is expected to maintain its leadership in the industrial racking system market.
Potential growth in the global industrial racking system industry is predicted to be driven by its integration with AI, IoT, and advanced data analytics. These technologies are estimated to enable warehouses to optimize storage, effectively manage inventory, and enhance operational efficiency.
Around 80% of warehouses are projected to use AI-powered automation for inventory management by 2028, driving the demand for intelligent and scalable racking solutions. The continuous expansion of e-commerce coupled with the need for hyper-localized supply chains is expected to continue driving the demand for racking systems.
Green warehouses and energy efficient racking solutions are estimated to gain traction as business work toward reducing their carbon footprint. Around 60% of warehouse operators are planning to invest in sustainable technologies within the next five years.
The market showcased a CAGR of 3.4% during the historical period. The e-commerce sector witnessed explosive growth during the period, thereby driving the industrial racking system market growth. Continuous expansion resulted in a need for automated and high-density racking systems to enhance inventory management and order fulfillment.
In 2021, Amazon alone was reportedly operating more than 175 fulfillment centers across the globe, several of which feature state-of-the-art racking and shelving systems integrated with automated technologies. Industry also witnessed significant advancements in automation and robotics, contributing to the rise of automated storage and retrieval systems. The sales of industrial racking system to record a CAGR of 3.7 during the forecast period from 2024 to 2031.
Automation and Smart Warehousing
Automation storage and retrieval systems (ASRS) are becoming vital in modern warehouses. Warehouse with automated systems are noted to achieve 30% more storage density compare to traditional warehouses. Automation assists in decreasing labour costs, minimizing errors, and lowering overhead b enabling 24/7 operation.
A survey found that 60% of warehouse operators expected automation to decrease their operating costs by 10% to 20%. Robust growth in e-commerce, especially with the rise of same-day and next-day delivery services, makes automation in warehousing crucial.
A study conducted revealed that 85% of companies with advanced automation reported a 155 reduction in fulfilment times. Automated racking systems and smart warehousing solutions offer scalability for companies along with great flexibility. Around 70% of warehouses with automated solutions expect to scale their operation within the next 5 years, with a high focus on optimizing for high throughput demands.
Increase in Third-party Logistics (3PL) Providers
3PL providers are increasing their reliance on advanced racking systems to optimize warehouse space and improve operational efficiency. DHL reported that e-commerce is predicted to account for 50% of the global logistics revenues by 2025, thereby emphasizing the rising reliance on 3PL providers in retail and consumer goods sectors.
Sustainability is a key focus for 3PL provides with a focus on decreasing their environmental footprint through eco-friendly technologies and practices. This includes the adoption of energy-efficient racking systems, green warehouses, and electric vehicles for transportation.
Green logistics is estimated to represent more than US$ 3.5 trillion of the logistics market by the end of 2032 as businesses and logistics providers aim to meet stringent environmental regulations.
Maintenance and Operational Costs
Maintenance and operational costs are crucial considerations in the adoption and long-term use of industrial racking systems. Routine maintenance includes schedules inspections, cleaning, lubrication of mechanical parts, and adjustments to ensure the proper functioning of racking systems.
According to a report by the Industrial Maintenance & Plant Operation (IMPO) in 2019, companies in industries like warehousing and distribution spend an average of 1% to 3% of their total revenue on maintenance-related activities annually.
Repair costs for racking systems can vary widely depending on the extent of the damage and whether or not a component need replacement. A survey by Material handling Institute in 2019 revealed that average annual maintenance cost for an automated racking system includes repairs and parts replacement can range from US$ 10,000 to US$ 50,000 per facility, depending on the scale and complexity of the operation.
Integration with Warehouse Management Systems
Warehouse management systems (WMS) assist businesses to manage and optimize day-to-day warehouse operation. Integration with WMS is a prominent factor driving the adoption of ASRS, robotic picking, and other automate systems in warehouses. Around 70% of warehouse operators are planning to invest in automation technologies in the next two years, with integration with WMS being one of the primary objectives.
Approximately 80% of warehouse operators reported that integrating WMS with automation technologies has boosted productivity by at least 25%. A key benefit of integrating WMS with automated racking systems is the ability to track inventory in real time. Over 62% of warehouse operators have implemented to plan to implement RFID-based inventory management systems in the next two years.
Integration of WMS with racking systems decreases human error in order picking, packing, and shipping, resulting in increased order accuracy and faster fulfilment times. Companies that have implemented WMS and automation technologies reported a 30% reduction in order picking errors and 20% decrease in fulfilment times.
Cold Storage and Temperature-controlled Solutions
The pharmaceutical industry is one of the largest consumers of cold storage solutions, especially with the growing importance of vaccines, biologics, and blood products that need stringent temperature control to maintain efficacy. Rapid growth of e-commerce coupled with the rising demand for fast delivery of fresh and frozen goods is driving the expansion of cold-storage facilities, especially for last mile delivery.
About 52% of companies in the food and beverage industry are planning to invest in automated cold storage and temperature-controlled warehouses to meet the increasing demand from online shoppers. Cold storage solutions assist in extending the shelf life of perishable products, thereby decreasing waste and ensuring products retain their freshness and quality. Rise in consumer preference for fresh, organic, and sustainably produced foods is estimated to drive the demand for cold storage.
Companies in the industrial racking system market are focusing on continuous product innovation to develop racking systems with improveed functionality like modular, automated, or adjustable racking systems. They are progressively investing in research and development activities to offer solutions that maximise space utilization, enhance safety, and improve operational efficiency.
Businesses are offering customized racking systems to cater to specific client requirements in terms of size, capacity, and configuration. They are also integrating advanced technologies like warehouse management systems, robotics, AI, and IoT in their racking solutions. Automated storage and retrieval systems are gaining traction as businesses seek to improve efficiency while decreasing human labor.
Recent Industry Developments
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Attributes |
Details |
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Forecast Period |
2025 to 2032 |
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Historical Data Available for |
2019 to 2023 |
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Market Analysis |
US$ Billion for Value |
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Key Regions Covered |
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Key Market Segments Covered |
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Key Companies Profiled in the Report |
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Report Coverage |
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Customization and Pricing |
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The market is anticipated to reach a value of US$ 9.7 Bn by 2032.
They are structures made from different materials that are designed to support goods in a warehouse or industrial facility.
Racking systems are grouped in three major product types such as drive-in pallet, push-back pallet, and selective pallet.
North America is predicted to emerge as the leading region in the industry with a share of 29% in 2024.
A few of the key players operating in the market are Kardex AG, Daifuku Co., Ltd., SSI Schaefer, and Foothills Systems.
