Correct, you won't see a specific "pickup" option, but there is a way and there is hope!
I made a rule based on "only apply these actions to orders that match specific criteria." And in the first dropdown, I chose "Requested Service (Marketplace Value). Marketplace value is the choice the customer chose. That's the one you want, not the "mapped" one. Then I made the next drop-down "equals." and the third drop-down is going to be very store specific and you enter that value manually. The value you choose is actually the name of your Shopify Location where people come to get things. That title is stored and changed within the Shopify settings in locations. But to find the exact wording I needed to input for the third box, I went into a ShipStation order that I was sure was actually a pickup order. One clicked, in the order details you'll see "requested service" and then behind that it'll show your location name which is actually what the customer chooses when they choose to pickup an order. They technically choose your location and not a shipping method.
With all three criteria input, in the apply an action section I said: "add a tag" end then chose an existing tag that says "instore pickup" that includes a bight red box. Making that tag was easy too, but you have to make it before you get to this point. Sorry, should have said that first!! But making the tag involved hitting my list of tags above the orders and choosing "manage tags." there you can create the instore pickup tag.
So, this did eventually work for me. I had to check and see what shopify was labeling our in store pickups as... in our case it was our cafe's physical address. So I used that in the fill in requested service field for automations and it FINALLY WORKED. THANK YOU.
Your tags are great, and I added one more customization to prevent errors by our shipping team... you can have it use a specific packing slip for the automation. So I made a packing slip that very clearly marks it as an in-store pickup.
Cheers. That was an ongoing problem for us.