As reported recently, there are thousands of ships and millions of containers currently in circulation around the world. Tracking the location of shipping containers has become necessary and desirable – and now affordable – for shippers, vessel operators and box leasing companies.
Thanks to the latest innovations and developments, GPS is becoming more commonly available for tracking the location of cargo in real-time on the digital platform. The ability to view the location of shipping containers 24/7 gives businesses a sense of control and security.
Smart containers have increased in prominence following the onset of the Covid-19 pandemic and resultant supply chain disruption, which has highlighted the need for better cargo visibility to cope with longer and more volatile transit times. And the pace of adoption of smart containers is expected to accelerate over the next five years.
A container becomes “smart” when fitted with a telematics device that provides real-time tracking and monitoring, enabling operators to increase turn time of their containers and so improve equipment availability. It also allows ‘beneficial cargo owners’ (BCOs) to understand the location and status of their cargo so that they can better control their supply chains.
The ‘global telematics-enabled’ container equipment fleet is forecast to grow eight-fold over the next five years and account for 25% of global box inventories by 2026. This is one of the main conclusions from Drewry’s latest Container Census & Leasing Annual Review & Forecast 2022/23 report published at the end of June. Drewry is an independent maritime research consultancy, based in the UK and offering market insights and advisory services to stakeholders right across the global shipping industry.
Drewry estimates that by the end of 2021 around 3.6% of the global container equipment fleet was fitted with smart technology devices. Already as much as a third of the maritime reefer container fleet is smart-enabled, while the figure is over 40% for intermodal containers, by Drewry’s calculation. But the shipping consultant is expecting much higher penetration in the ‘dry’ container market.
A quick Google search will reveal the great number of players supplying container tracking devices. Tracker manufacturers such as Nexxiot and Orbcomm are moving apace and expect tracking to be pivotal for carriers to retain customers.
Recently, German shipping line Hapag-Lloyd (the fifth largest in the world) became the first to fit tracking and telemetry to all its containers, stealing a march on its competitors. The container vessel operator will equip its entire container fleet with real-time tracking devices, with the equipment upgrade expected to be completed next year.
Hapag Lloyd point out that there aren’t many players in the world with the ability to do this on a global level. Essentially, they have the ability to process billions of data points, because every time the position of, or temperature in, a container changes, it generates new data.
They face increasing competition from alternative tracking solutions such as removable devices or predictive analytical tools. But to achieve this step will require further investment to integrate smart containers into carrier IoT systems and collaboration among industry stakeholders to enable data sharing, particularly between carrier alliances.
Overall, digitising their container fleets will enable carriers to better control maritime supply chain information flows, enhancing their cargo visibility offering and thereby binding clients into longer term contractual commitments.
At a retail level, there are a number of factors driving this market growth. Continued supply chain disruption and port congestion, which show no sign of abating, underline the need for shippers and consignees to have improved control and security of cargo flow – thus paving the way for the next inevitable step in supply chain logistics.
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