The global telematics-enabled container equipment fleet is forecast to grow 6-fold over the next 5 years and would account for 30% of global box inventories by 2027, driven by wider adoption across the dry container fleet.
The conclusion is based on Drewry's recently published Container Census & Leasing Annual Review & Forecast 2023/24 report.
"Smart containers have increased in prominence in recent years, a trend that accelerated following the onset of the Covid-19 pandemic and resultant supply chain disruption, which highlighted the need for better cargo visibility to cope with longer and more volatile transit times," the independent maritime research consultancy firm said.
It added that the pace of adoption of smart containers is expected to "accelerate over the next five years" as device costs fall and first-mover carriers challenge others to follow.
Drewry noted that a container becomes "smart" when fitted with a telematics device that provides real-time tracking and monitoring, enabling operators to increase the 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.
"There are a number of factors driving this market growth," Drewey said, adding that supply chain disruption and port congestion that plagued the pandemic era provided a wake-up call for improved visibility of cargo flows and container fleet management.
"And despite weak market conditions, carriers have funds to invest following the recent boom in industry profitability and see opportunities to improve the efficiency of their operations through the deployment of smart containers," it added.
[Photo: Drewry]
Drewry estimates that by the end of 2022, around 5.6% of the global container equipment fleet was fitted with smart technology devices, following growth of 57% through the year; an acceleration from the 32% gain recorded the previous year.
However, it noted that take-up varies considerably by equipment type, with penetration already strong in reefer and intermodal containers but much lower in the dry box sector.
Already over half of both the maritime reefer and land-based intermodal container fleets are smart-enabled, the former up from a third last year, according to Drewry estimates.
"Drewry forecasts that the number of smart containers in the global fleet will accelerate over the next five years to reach over 10 million units, representing as much as 30% of worldwide box inventories. As technological innovation lowers the cost of devices and enhances their value to both transport operators and BCOs, uptake is expected to hasten," it said.
Smart fleet acceleration will now be driven by strong uptake in the dry container fleet, where penetration is currently as little as 0.7%, according to Drewry estimates.
Several carriers, including Hapag-Lloyd and Japan's ONE, have publicly committed to equipping their entire dry box fleet with smart devices, the former as soon as next year.
Drewry said it believes that these moves will force other leading carriers to follow suit — noting that shipping line return on investment will come from the potential to optimise their box fleet and cargo operations.
Drewry noted that past initiatives to develop the dry smart fleet failed because they relied on BCO demand which was deterred by additional fees and a lack of integration into carrier IoT service offerings.
Furthermore, it added that digitising container fleets would enable carriers to better control maritime supply chain information flows, enhancing their cargo visibility offering and so tethering BCO clients into longer-term contractual commitments.
In the meantime, Drewry said shipping lines are expected to focus on building a critical mass of smart device installs to leverage operational benefits across their container fleets and cargo operations while readying for the next step change in supply chain visibility service offerings.
