Installed base of container tracking systems grew 54 percent in 2012

Just released research from telecom business intelligence firm Berg Insight shows that although tracking solutions for shipping and intermodal container solutions are still in their early stages, they show a steady and promising growth. Aftermarket solutions mounted on high value cargo and refrigerated containers are the first use cases to adopt container tracking.

The number of active remote container tracking units deployed on intermodal shipping containers was 137,000 in Q4-2012, up from 89,000 a year earlier. Growing at a compound annual growth rate (CAGR) of 49.1 percent, this number is expected to reach 1.0 million by 2017. The penetration rate of remote tracking systems in the total population of containers is estimated to increase from 0.7 percent in 2012 to 4.1 percent in 2017. 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.

Shipping container tracking is a subset of asset tracking and aims at securing assets and increase 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 standardized, 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 containerization 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 2012, there were over 20 million cargo containers worldwide, the equivalent of 32.5 million TEU.

Berg Insight says 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 49.1 percent from 137,000 units at the end of 2012 to 1.0 million by 2017. The penetration rate of remote tracking systems in the total population of intermodal containers is estimated to increase from 0.7 percent in 2012 to 4.1 percent in 2017.
“The installed base of intermodal containers worldwide has now reached 20 million, which represents a significant market opportunity for the telematics industry”, said Johan Svanberg, senior analyst with Berg Insight. He adds that several prominent wireless M2M operators including Orbcomm, AT&T, Everything Everywhere and Telenor even have assumed the role of end-to-end solution providers of container tracking. 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.

“It has been challenging to find the right business models to suit the diverse range of players in the intermodal transportation chain, but technology advancement, declining hardware prices and market awareness are starting to come together to make remote container tracking solutions attractive” concluded Svanberg.

Aftermarket solutions mounted on high value cargo and refrigerated containers will be the first use cases to adopt container tracking. The satellite communication provider Orbcomm has after the recent acquisitions of StarTrak, PAR LMS and GlobalTrak emerged as the largest vendor of intermodal container tracking solutions featuring GPRS or satellite communication.
The company had achieved an installed base of 19,000 units at the end of 2012. Envotech and Skybitz are the second and third largest providers having 18,000 and 15,000 systems respectively installed on intermodal containers. Omnitracs, Pointer Telocation, Savi Technology and PearTrack Systems all have an installed base of approximately 10,000 units. ID Systems, Honeywell Global Tracking and Kirsen Global Security are other major vendors with an installed base of over 5,000 units each. In the recent years, the intermodal container tracking market has attracted wireless M2M communication providers.

There has been a consolidation trend in the container tracking market in the past two years with several major M&A activities. Orbcomm acquired StarTrak in May 2011, followed by the acquisition of PAR LMS in December 2011 and GlobalTrak in April 2013. EMS Global Tracking was acquired by Honeywell in August 2011, which formed the new business unit Honeywell Global Tracking. Furthermore, Telular acquired asset tracking specialist SkyBitz for US$ 42 million in December 2011.

In April 2012, Emerson acquired the marine container and boiler business of Johnson Controls enabling Emerson to expand its refrigeration technology and solutions offerings in the global transportation sector. In June 2012, FreightWatch International was acquired by Sensitech, a part of United Technology Corporation. Later in September 2012, Lockheed Martin divested Savi Technology to LaSalle Capital. ABB furthermore signed an agreement to acquire APS Technology at the beginning of 2013.

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 favor 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 and decrease the carbon footprint from container transportation. 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.

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