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Baggage Handling System Market Size, Share & Industry Analysis, By Type (Destination coded vehicle (DCV), Conveyor), By Technology (Radio-Frequency Identification (RFID), Barcode), By Application (Airport, Railway, Marine), and Regional Forecast, 2020-2027

Region : Global | Format: PDF | Report ID: FBI102785

 

KEY MARKET INSIGHTS

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The global baggage handling system market size stood at USD 8.55 billion in 2019 and is expected to reach USD 14.79 billion by 2027, exhibiting a CAGR of 7.2% during the forecast period.

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Baggage handling system transports checked baggage from first counter to areas where the baggage can be collected for storage or final checkout. There are five parties involved in this system. These are the passengers, airline companies, airport, security, and baggage-handling agents.


Renovation of airports across the globe is a growing trend in the market. Majority of airport authorities are investing in renewing airport infrastructure to offer better comfort and baggage handling experience to the travelers. Moreover, utilization of technologies including, radio-frequency identification (RFID), and destination coded vehicle system (DCV) are complimenting the growth of the market. According to the International Air Transport Association (IATA) and SITA (a baggage handling system manufacturer), the global adoption of RFID could help airline industry to save approximately USD 2.8 billion over the next seven years. There are regulations set up by the IATA regarding baggage tracking. The IATA resolution 753 on baggage tracking enables airline companies to address mishandling of baggage by implementing cross-industry tracking for every baggage journey.


However, the pandemic of COVID19 has adversely affected the baggage handling system market growth and has challenged the operational flow of the equipment system in airport, railway, and marine industries. According to the IATA, in merely two months, the global aviation industry’s prospects have taken a dramatic turn for the worse. The pandemic has led to a loss of approximately USD 60 billion and the number could reach nearly USD 110 billion with broader impact if the pandemic is not controlled around the globe. These factors will have adverse impact on the global market in the coming future.


MARKET TRENDS


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Renovation of Airports across the Globe is Upholding Market Growth


The number of airports across the globe is increasing owing to high acceptance of airway as a mode for transport. Up gradation of airport infrastructure by utilizing the technological developments such as, integration of baggage handling system with RFID technology, AI developed robotic baggage handler system, etc. is the major reason for the adopting air transportation. For instance, in June 2016, a self-propelling baggage robot named Leo was introduced by SITA with a carrying capacity of 32kgs. Leo was first utilized at the Geneva Airport in Switzerland. Moreover, in 2019, Smiths Detection Group Ltd. signed a contract of approximately USD 70 million with Transportation Security Administration (TSA) to set up luggage handling systems across the U.S. Furthermore, new airline operators have also started their airline services. For instance, in February 2017, in India, Zoom Air started its airline operations with its route limited to select Indian cities. It ultimately increased the demand for additional baggage handling equipment.Therefore, renovation of airports across the globe is bolstering the market growth.


MARKET DRIVERS


Sudden Increase in Passengers Travelling via Airways to Swell the Market


The International Air Transport Association (IATA) stated that the number of airline passengers would be around 8 billion in 2037. Passengers travelling via airways have increased in the recent years fueled by factors such as continuous economic growth, favorable population dynamics, demographic profiles, and improved household incomes. Taking these factors into consideration airport authorities are heavily investing in baggage handling equipment and modern facilities that can elevate the customer experience. For instance, in March 2018, Chicago City Council approved an agreement of USD 8.5 billion expansion plan for airport renovation, including renovation of airport’s existing terminals and increasing the number of gates.Hence, sudden increase in passengers travelling via airways is driving this market’s expansion.


MARKET RESTRAINT


High Investment Required for Advanced Luggage Management Systems to Hamper Market Growth


Manufacturers are investing heavily to offer better service to their customers. However, technological development requires more investments in terms of innovation in baggage transport infrastructure. The railway industry is facing an issue in investing in smart baggage handling system owing to factors such as huge number of passengers and low security. This demands for better luggage handling facilities and it requires huge amounts of investment. Furthermore, on airports, the sudden breakdown of baggage handling equipment challenges the airport infrastructure facilities. Sudden breakdown refers to the operating system failure, network failure, and power failure and outage caused by improper usage. If any out of these failures take place, the system will not be able to perform its processes automatically.


Considering all these factors, more investment is required by the airport and government authorities to enhance the efficiency of baggage handling equipment globally.


SEGMENTATION


By Type Analysis


Destination Coded Vehicle (DCV) to Showcase Highest CAGR during the Forecast Period


Within the type segmentation, the market is classified into destination coded vehicle (DCV) and conveyors.


The DCV segment is expected to offer lucrative growth opportunities as DCVs operate approximately 4.5 times faster than conveyor baggage handling systems (BHS). It is comparatively a new technology and it is being installed in big airports with multiple terminals. The rapid growth of this segment is attributed to factors such as increasing number of air travelers and up-gradation of airport infrastructure including technological development and capacity enhancement. A manufacturer, Logan Teleflex (Part of Daifuku Co., Ltd.), manufactured a flexible DCV to move bags at high speed at up to 20 miles per hour.


The conveyors BHS segment is expected to hold the highest market share during the forecast period owing to the utilization of conveyors baggage handling equipment at airports with low passenger traffic.


By Technology Analysis


Radio-Frequency Identification (RFID) to Generate the Maximum Revenue in the Forecast Period


By technology, the market is categorized into RFID and barcode. The RFID technology segment is expected to witness the highest growth owing to the cost-effectiveness and reliability of the technology in improving the baggage handling process. RFID reduces baggage-mishandling rates by almost 20%, leading to better passenger experience. It is an easy way to obtain the baggage mishandling track records to become compliant with the IATA resolution 753. The major airline companies are investing in RFID technology to provide better travelling experience to customers. For instance, in May 2016, Delta airlines invested approximately USD 50 million to implement RFID baggage tracking technology at 344 stations across the globe. Moreover, in February 2020, Indian Railways deployed RFID technology on tracks to capture the rolling stock location, freight cars, and passenger cars.


The barcode technology is expected to witness highest market share, owing to its utilization by majority of airline companies across the globe. Barcodes are cheap and simple to use. However, few airports are capable of handling both barcode and RFID-tagged baggage (A hybrid solution). Hybrid solution offers higher read rate than using the technologies separately. Implementation of RFID with hybrid solution can be a step towards full implementation of RFID.


By Application Analysis


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The Airport Category to be the Major Contributor in the Forecast Period


By application analysis, the market is classified into airport, marine, and railway.The airport category is a major contributor in the market, resulting from sudden increase in air passenger traffic around the globe. Moreover, major airports are equipped with technologically advanced baggage handling system that make travelling less hectic. This equipment moves the baggage in and out during the check-in and checkout processes.


The applications of baggage handler mechanisms in railway is expected to witness substantial growth, owing to the utilization of conveyor belts for handling passenger baggage while entering the railway station. Marine is expected to witness potential growth due to increased cruise business. The utilization of these equipment helps to minimize heavy lifting by workers, thus increasing the efficiency of operational processes.


REGIONAL ANALYSIS


Asia-Pacific Baggage handling system Market Size, 2019 (USD Billion)

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Geographically, the scope of this market is categorized into five regions, namely, North America, Europe, Asia-Pacific, Middle East and Africa, and Latin America.


Asia-Pacific is in the best position to lead the baggage handling system market share. This is attributable to factors including ever-growing air passenger traffic, rise in cruise travelers, and upcoming airport renovation projects. Moreover, the investments in railway transportation and economic growth of countries have triggered the demand for these systems. Furthermore, countries such as India, Singapore, Japan, China, Australia, and New Zealand are experiencing rising number of passengers travelling via marine and airway routes. This is because the authorities are heavily investing in development of technology and opting for partnerships to gain competitive advantage in the market. For instance, in May 2018, the Airport Authority of India (AAI) ordered for CTX 9800DSi, high-speed explosive detection systems (EDS), for hold baggage screening across nine airports in India. This collaboration with Smiths Detection Group Ltd. has an estimated worth of around USD 50 million.


North America is expected to witness strong growth, owing to the numerous airport development plans across the U.S. and Canada. The government authorities have taken initiatives to invest in luggage handler equipment because North America leads the world in baggage mishandling cases. By installing heavy capacity baggage handling systems, the baggage mishandling cases can be minimized. For instance, in August 2017, YYC Calgary International Airport in Canada signed a 10-year agreement with Beumer Group for the operation and maintenance of baggage handling systems with technologically advanced 10-mile CrisBag, a tote-based baggage transport and sortation system. Moreover, the huge number of passengers traveling through cruise within the region has boosted the demand across North America.


Europe is experiencing the substantial growth owing to the fact that most of the leading manufacturers of baggage sorting equipment have presence in countries including Switzerland, Germany, U.K., and Netherlands. Moreover, these manufacturers are strategically investing in other countries to gain the competitive advantage. For instance, in May 2019, Vanderlande Industries signed a 20-year framework agreement with the Brussels Airport Company. The agreement includes replacement of existing conventional baggage handling system with Vanderlande’s TUBTRAX technology, an up-gradation to high-level controls and integration of new baggage screening machines with EU regulations.


Latin America and Middle East and Africa show potential growth, owing to the increasing number of tourists traveling to countries such as Saudi Arabia, United Arab Emirates, Kuwait, Qatar, Brazil, etc. The leading manufacturers of luggage handling equipment are investing in these countries to offer greater satisfaction to customers while travelling via airplane and marine modes of transport. For instance, in May 2019, Beumer Group implemented in-tote hold baggage screening and 1800-position early baggage storage crisStore baggage-handling system for an approximate amount of USD 4.3 billion at Terminal 2 in Kuwait International Airport. Moreover, in February 2020, SITA provided self-service gates for bar coded boarding pass at Porto Alegre and Fortaleza Airport, Brazil.


KEY INDUSTRY PLAYERS


The key players in this market have adopted strategies such as advanced product penetration and acquisitions & mergers to sustain in the intense market competition. Moreover, these players are continuously focusing on integrating automatic systems with computer-managed technologies to retain their leading position in the market.


List of the Key Companies Profiled:



KEY INDUSTRY DEVELOPMENTS:



  • September 2019 Siemens modernized the existing inspection system for luggage control at Madrid, Barcelona, Malaga, Palma de Mallorca and Gran Canaria Airports in Spain for around USD 175 million. The modern solution named as ‘Hi-SCAN 10080 XCT’ will help tighten the security regulations of the European Civil Aviation Conference (ECAC).

  • December 2019 – Pteris Global Limited, a subsidiary of CMIC Group, signed an agreement with Chennai International Airport to provide baggage-handling system for the airport’s new terminal. The estimated worth of the agreement is approximately USD 45 million.


OVERVIEW OF THE COMPETITIVE LANDSCAPE


Major Companies have strong regional presence across the globe.


The major companies in the market are Vanderlande Industries, Seimens, Daifuku Co., Ltd., Beumer Group, and SITA. These companies are likely to hold approximately 70% share in the market owing to their strong presence across the globe.


FUTURE SCENARIO


The future of this market is in dilemma. The manufacturing companies are focused on offering turnkey solutions such as RFID enabled destination coded vehicle that minimize the strain injuries and maximize baggage security along with ensuring higher productivity. However, the COVID 19 pandemic has hit the world with greater effects. The virus has spread over 200 countries. It has adversely affected the transport industry and will directly affect this market. Therefore, the future of this market is in doldrums owing to the sudden impact of COVID19 on every industry vertical.


REPORT COVERAGE


The baggage handling system market report focuses on leading regions across the globe to offer a better understanding to end-users. Moreover, the report offers insights of the industry dynamics and analyzes technologies that are utilized at a rapid pace across the world. It also displays some of the key factors and restraints to help the readers to gain in-depth knowledge about the market.


An Infographic Representation of Baggage Handling System Market

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REPORT SCOPE & SEGMENTATION











































 ATTRIBUTE



 DETAILS



Study Period



  2016 – 2027



Base Year



  2019



Forecast Period



  2020 – 2027



Historical Period



  2016 – 2018



Unit



  Value (USD billion)



Segmentation



By Type



  • Destination coded vehicle (DCV)

  • Conveyor



By Technology



  • Radio-Frequency Identification (RFID)

  • Barcode



By Application



  • Airport

  • Railway

  • Marine



By Region



  • North America (U.S. and Canada)

  • Europe (Germany, U.K., France, and Rest of Europe)

  • Asia-Pacific (China, India, Japan, Southeast Asia, and Rest of Asia-Pacific)

  • Middle East & Africa (South Africa, GCC, and Rest of Middle East & Africa)

  • Latin America (Brazil, Mexico, and Rest of Latin America)



Frequently Asked Questions

Fortune business Insights says that the market value was at USD 2.878.55 billion in 2019.

Fortune Business Insights says that the market is expected to reach USD 14.79 billion in 2027.

Growth of 7.2% CAGR will be observed in the market during the forecast period (2020-2027).

The sudden increase in passengers travelling via airways is likely to drive the market growth.

Vanderlande Industries, Siemens, Daifuku Co., Ltd., Beumer Group, and SITA are the top companies in the market.

The airport category is expected to grow significantly at the highest CAGR during the forecast period.

The revenue of the market in Asia-Pacific in 2019 was USD 3.10 billion.

The high investment required for baggage handling system is restraining the growth of the market.

Baggage Handling System Market Size, Share and Global Industry Trend Forecast till 2026
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