The installed base of container tracking systems will reach one million by 2016. According to a new research report from the analyst firm Berg Insight, the number of active remote container tracking units deployed on intermodal shipping containers was 77,000 in Q4-2011.
The market for container tracking solutions is still in its early stage. Aftermarket solutions mounted on high value cargo and refrigerated containers will be the first use cases to adopt container tracking. Orbcomm has after recent acquisitions of Startrak and PAR LMS emerged as the largest vendor of wireless container tracking devices with solutions targeting refrigerated containers. Qualcomm, ID Systems and Telular are prominent vendors focusing on inland transportation in North America, which is so far the most mature market for container tracking solutions. PearTrack Systems, Honeywell Global Tracking, EPSa and Kirsen Global Security are examples of companies offering dedicated solutions targeting the global end-to-end container transport chain.
“Ever since the events of 9/11, there have been a lot of activities to bring container tracking solutions to the market,” said Johan Svanberg, senior analyst, Berg Insight. He adds that it is, however, first now that technology advancement, declining hardware prices and market awareness are starting to come together to make remote container tracking solutions attractive. “Container telematics can help stakeholders to comply with regulations and meet the high demands on security, information visibility and transportation efficiency that comes with global supply chains,” said Mr. Svanberg.
Shipping container tracking is a subset of asset tracking and aims at securing assets and increasing operational efficiency. Berg Insight’s definition of a real-time container tracking solution is a system that incorporates data logging, satellite positioning and data communication to a back-office application. Tracking and monitoring of shipping containers came in focus after 9/11. Many companies saw an opportunity and started ambitious container tracking projects. However, neither the technology nor the market was ready at the time. Today, mobile and satellite networks can provide ubiquitous online connectivity at a reasonable cost and mobile computing and sensor technology delivers high performance, as well as excellent usability. All of these components combined enable the delivery of supply chain management, security management and operations management applications linking containers and enterprise IT systems.
Intermodal shipping containers are standardised, reusable containers used in intermodal transport systems worldwide. Container trade is the fastest growing segment in seaborne trade, having grown nearly 10 percent annually since the 1980s. Maritime transportation and the increased containerisation of goods are key enablers to make the global supply chain work efficiently.
Today, more than 80 percent of international trade goods are carried by sea. At the end of 2011, there were approximately 20 million cargo containers worldwide, the equivalent of 30 million TEUs.
Berg Insight is of the opinion that the market for shipping container tracking solutions has entered a growth period that will last for several years to come. The number of tracking systems with GPRS or satellite communication for intermodal containers in active use is forecasted to grow at a compound annual growth rate of 66.9 percent from 77,000 units at the end of 2011 to 1.0 million by 2016. The penetration rate of remote tracking systems in the total population of intermodal containers is estimated to increase from 0.4 percent in 2011 to 3.6 percent in 2016. Aftermarket solutions mounted on high value cargo and refrigerated containers will be the first use cases to adopt container tracking.
The U.S. satellite communication provider Orbcomm has, after the recent acquisitions of StarTrak and PAR LMS, emerged as the largest vendor of intermodal container tracking solutions with GPRS or satellite communication. The company had achieved an installed base of 15,000 units at the end of 2011. PearTrack Systems and Qualcomm Enterprise Services are the second and third largest providers having 10,000 and 7,000 systems installed on intermodal containers respectively. Honeywell Global Tracking is the fourth largest system provider after the acquisition of EMS Global Tracking. Other significant players include ID Systems, Telular and Cubic GTS from the U.S., Pointer Telocation from Israel and EPSa and Global Tracking Technology from Europe. Most players have generally a broader market scope than maritime shipping containers, covering all types of asset tracking. CSB Technology, Kirsen Global Security and Starcom Systems are examples of vendors with products specifically developed for intermodal shipping containers.
There has been a consolidation trend in the container tracking market in the past two years with several major M&A activities. Francisco Partners acquired Cybit in January 2010 in a deal worth about 28 million euros. This deal was later followed by the acquisition of Masternaut in April 2011. ID Systems further acquired GE’s Asset Intelligence division, a leading international provider of trailer tracking solutions. In May 2010, Cubic acquired Impeva Labs and formed Cubic Global Tracking Solutions. Orbcomm acquired StarTrak in May 2011, followed by the acquisition of PAR LMS in December 2011 in a deal worth about US$10 million. EMS Global Tracking was acquired by Honeywell in August 2011, which formed the new business unit Honeywell Global Tracking. The latest transaction was done in December 2011 when Telular acquired asset tracking specialist SkyBitz for US$ 42 million.
Berg insight anticipates that there will be a continued strong focus on container transport security and increased supply chain visibility in the coming years which will favour the container tracking market. Tracking solutions can help transportation chain stakeholders to comply with regulations and security programs as well as increase the transportation efficiency. Proving the commercial value, finding efficient solutions for reverse logistics and bringing down hardware prices are key components to increase the adoption rate for container tracking solutions.
About the author
Johan Svanberg is a Senior Analyst with a Masters degree from Chalmers University of Technology. He joined Berg Insight in 2007 and his areas of expertise include embedded connectivity, wireless M2M markets and mobile applications. Further information is available at:
http://www.berginsight.com