Real-time tracking solutions developed specifically for intermodal shipping containers is still a relatively nascent market. Many of the vendors offering solutions for this market have not yet achieved particularly sizeable installed bases in terms of the number of deployed units. As Johan Fagerberg, co-founder of Berg Insight says, they are today close to 25 million shipping containers in circulation worldwide.
Knowing the location and status of containers and the goods being shipped is of great value for container operators and shippers. However, only 6% of the global container fleet is today equipped with real-time tracking devices. The maritime container shipping market is highly consolidated and there are as a result relatively few operators manage very large fleets of containers.
There is a significantly higher value in connecting an entire fleet of containers, in contrast to connecting only a few containers, which means that a significant part of the addressable market consists of large-scale projects spanning many years valued at multiple millions of dollars.
The strategy of Traxens, a French-based provider of tracking solutions for intermodal shipping containers, has been to partner with major shipping companies to initiate large-scale projects. The company has managed to attract the largest players in the industry. Shipping companies CMA CGM and Mediterranean Shipping Company (MSC) invested in Traxens in 2012 and 2016 respectively.
In May 2019, A.P Moller – Maersk also announced that they had invested in the company. Traxens is thus backed by three of the four largest shipping companies in the world, which combined handle close to 45% of the world’s container cargo. In October 2018, MSC announced that they will equip 50,000 dry van containers with Traxens devices to be able to track the location, temperature, humidity, shock, vibration and door opening/closing of the containers.
Later in May 2019, both CMA CGM and Maersk announced that they are also committed to equip at least 50,000 of their containers each with tracking devices from the company. This is not the first time Maersk is involved in a large-scale IoT project. In 2015, the company rolled out a real-time tracking system for its full fleet of 270,000 refrigerated containers. The project was initiated already in 2009 and Maersk’s existing fleet of refrigerated containers were equipped over a three-year period.
The project involved AT&T, Ericsson and WAM Technologies (now owned by ORBCOMM) and is one of the largest IoT projects in the logistics industry to date. Loginno Logistic Innovation applies a similar strategy. The Israel-based company’s approach is to deploy its solution on entire fleets of dry containers. In 2015, the company announced a deal with two major Chinese shipping lines – SIPG Hai Hua and SITC – to convert their fleets of dry containers into smart containers.
Market adoption is in the medium term affected by a number of different factors. Battery life is a challenge especially for container tracking applications and breakthroughs within battery technology can help drive adoption on the market. The emerging area of Low-Power Wide-Area (LPWA) network technologies such as Sigfox, NB-IoT and LoRaWAN can have a positive effect on this market. LPWA technologies’ promise of long battery life and low hardware cost can be especially beneficial for dry containers which are inherently more power-starved compared to reefer containers.
With the exception of high-value transports (e.g. pharmaceuticals, tobacco and electronics) where non-permanent trip-based tracking has become increasingly common, the uptake for dry containers is in the foreseeable future expected to remain considerably lower than for reefer containers, where regulatory mandates have already fostered large-scale implementation of tracking and monitoring solutions in order to ensure the integrity of temperature-sensitive cargo.
The author is Johan Fagerberg, co-founder of Berg Insight.