Connected Ships Market Size, Share & COVID-19 Impact Analysis, By Ship Type (Commercial, Defense), By Installation Type (On-board, Onshore), By Fit (Line Fit, Retrofit), By Application (Fleet Operations, Vessel Traffic Management, Fleet Health Monitoring, and Others), and Regional Forecast, 2021-2028

The global connected ships market size was USD 6.05 billion in 2020. The market is projected to grow from USD 6.23 billion in 2021 to USD 8.83 billion in 2028 at a CAGR of 5.11% during the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with witnessing a negative demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a lower growth of -10.33% in 2020 as compared to the average year-on-year growth during 2017-2019. The sudden rise in CAGR is attributable to this market's demand and growth, returning to pre-pandemic levels once the pandemic is over.

Connected ship is used in the marine and shipping industries to improve security, safety, and navigation efficiency by integrating connected technology. The application of the connected technology in vessels includes enhanced control over critical ship operation, health monitoring for preventive maintenance, vessel traffic management, and others.

COVID-19 IMPACT

COVID-19 Pandemic has Adversely Impacted Shipbuilding as well as Shipping Industry

The lockdown in the first two quarters of 2020 due to the COVID-19 pandemic has led to loss in revenues in the maritime sector. Shipyards, shipbuilding companies, and other vendors needed to adjust their working practices associated with government restrictions, which led to the suspension of shipbuilding operations.

• For instance, an Italy-based Fincantieri Shipyard suspended all manufacturing activities from 12th March 2020 until mid-April.

Moreover, the reduced demand for marine trades and travel resulted in the cancellation of new vessel orders, directly impacting this market. Furthermore, during the pandemic, cruises were moored and anchored due to decreased passenger traffic. These factors resulted in the delay of cruise deliveries and cancellation of orders in a few cases. Thus, due to the decline in demand for new vessels and the reduction in production operations, the market has been negatively impacted. However, this crisis is anticipated to be a promoter of digitalization, which will generate growth opportunities for connected ship.

LATEST TRENDS

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Increasing Development in Vessel and Cargo Monitoring Systems to Augment Market Volume

The shipbuilding industry is rapidly shifting toward digitalization. The growing industry has led to the development of connected ship solutions such as cargo monitoring systems and vessel monitoring systems to ensure the safety and efficiency of trade. The cargo monitoring systems provide data reading and alarm monitoring for pressure, temperature, and other parameters in a cargo tank.

Many companies are investing in the development of satellite-based monitoring systems.

• For instance, Iridium Communications Inc developed a product named Iridum Certus, a reliable satellite connection that helps uninterrupted cargo or vessel monitoring data transfer.

DRIVING FACTORS

Increasing Demand for Smooth Traffic Flow Across Congested Marine Routes is Driving Market Growth

The rising international trade is expected to be the key growth factor of the market. The growing seaborne transaction is anticipated to create traffic congestions in the marine routes. According to the United Nations Conference on Trade and Development (UNCTAD), up to 80% of the global trade volume are carried out by the sea at various marine ports. Hence, there is a rise in demand for efficient port traffic management and effective traffic congestion management at significant canals. The rapidly growing maritime trade and transport has increased the demand for vessel traffic management and real-time navigation systems, which are expected to fuel the growth of the market.

Increasing Investment by Shipping Companies for Digitalization for Vessel to Fuel Growth

Shipping companies are heavily investing in the vessels' digitalization due to the growing need for situational awareness among fleet operators. Connected type of ship has taken control of the maritime industry. It provides remote access to container/cargo monitoring systems to reduce a charterer’s claims for damaged cargo. These factors reduce the insurance costs of the vessel. Moreover, connected technology can offer significant cost improvements in operational performance and vessel maintenance. Thus, transportation companies invest in digitalization due to the advantages mentioned above.

RESTRAINING FACTORS

High Cost of Digitalization and Vulnerability to Cyberattacks Expected to Hamper Market Growth

The high initial investment required for the digitalization of the vessels is anticipated to degrade the Connected Ships Market growth. Moreover, incorporating information communication technology in maritime systems will lead to several cyberattacks. Connected ship may be vulnerable to cyberattacks and severe losses that hamper the market growth.

SEGMENTATION

By Ship Type Analysis

Commercial Segment to be Fastest Growing Owing to Rising Demand for Commercial Fleet

Based on ship type, the market is segmented into commercial and defense.

The commercial segment is expected to witness a faster growth rate during the connected ships market forecast period. Increasing demand for the commercial fleet for transportation of goods, such as electronic devices, FMCG products, automobiles, and others, is expected to boost the segment growth over the forecast period. Moreover, the additional benefit of reduced transportation time by identifying the shortest route via a connected network is expected to increase the demand for connected type of ships in the commercial sector.

The defense segment is anticipated to witness significant growth throughout the forecast period due to increasing investment by governments in digitalization of marine vessels to improve navy strength.

• For instance, in May 2019, Tech Mahindra was awarded a contract by the Indian Navy to supply a radio frequency identification-based access control system for all vessels and naval bases.

By Installation Type Analysis

On-board Segment to Dominate the Market Owing to Increase in Monitoring & Controlling for On-board Operations

Based on installation type, the market is classified into on-board and onshore.

The on-board segment dominated the market in 2020 and is expected to continue leading the market during the forecast period. Connected ship is mainly utilized to carry out on-board operations, which involves monitoring and controlling the function of an ongoing vessel.

The onshore segment is expected to grow substantially owing to the rising use of connected ship data to track the traffic status and management of port activities.

By Fit Analysis

Line fit Segment to Hold Higher Market Share Due to Increasing New Vessel Orders

Based on fit, the market is classified into line fit and retrofit.

The line-fit segment held the highest market share in 2020 and is predicted to continue its dominance throughout the projection period due to growing investment in naval defense and surge in seaborne trade activities across the globe. Moreover, increasing new vessel orders are predicted to propel the segment's growth.

The retrofit segment is expected to showcase significant growth owing to vessel modernization programs by naval forces of various countries.

By Application Analysis

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Vessel Traffic Management Estimated to be Largest Due to Increasing Demand for Safety and Efficient Navigation

Based on application, the market is classified into fleet operations, vessel traffic management, fleet health monitoring, and others.

The vessel traffic management segment the largest segment in 2020 and is anticipated to grow at a higher CAGR during the forecast period. Increasing demand for maritime safety, efficient navigation, and other life safety features at sea drive the segment growth. Moreover, vessel traffic management systems in seaports for efficiently handling large volumes of containers are expected to fuel segment growth.

The fleet health monitoring segment is expected to grow significantly due to the growing demand for preventive maintenance and predictive diagnostics. 

REGIONAL INSIGHTS

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Region wise, the global market is studied across North America, Europe, Asia Pacific, and the rest of the world.

Asia Pacific held the highest shares in the market in 2020 and is expected to grow at a high CAGR during the forecast period. Rising traffic across ports in emerging countries of Asia Pacific such as China, South Korea, and others is driving the market growth in APAC. The development of new ports in Indonesia, Hong Kong, and others is expected to generate new opportunities for market expansion in APAC. Moreover, improving trade relations and the surge in import-export activities are anticipated to fuel the demand for connected ships in APAC.

Europe is anticipated to showcase considerable growth during the forecast period due to the rising demand for autonomous and connected vessels and cruises in France, the U.K., and others. Moreover, the presence of leading shipbuilding companies in France, Italy, Germany, and others is expected to influence the market growth in the region.

The market growth in North America is driven by technological advancement in ICT in the North America marine industry and key players operating in the region. Additionally, the increasing budgets of shipping companies for digitalization of vessels further influences the market. Moreover, growing maritime tourism and seaborne trades across North America are anticipated to propel market growth in the coming years.

KEY INDUSTRY PLAYERS

Wartsila Focuses on Development of Innovative Technology to Sustain its Leading Position

Wartsila is a significant player in the market. The company offers a propulsion control system designed for technologically advanced marine and naval vessels. Other key players are investing in research and development of connected ship by adopting artificial intelligence, the Internet of Things, and augmented reality. Moreover, the players are focused on offering connected products and services to accelerate digitization in marine sector.

LIST OF KEY COMPANIES PROFILED:

• Northrop Grumman Corporation (U.S.)


• Wartsila Oyj (Finland)


• General Electric Company (U.S.)


• Kongsberg Gruppen (Norway)


• Marlink (U.S.)


• Schneider Electric SE (France)


• Emerson Electric Co. (U.S.)


• ABB Ltd. (Switzerland)


• Rockwell Automation Inc. (U.S.)


• Ulstein Group ASA (Norway)


• Valmet Oyj (Finland)

KEY INDUSTRY DEVELOPMENTS:

• November 2021 – Wartsila successfully delivered its advanced integrated bridge and navigation solution for Lindblad Expedition’s polar expedition cruise vessel.


• July 2021 – ABB Ltd. launched a new online platform, “ABB Ability Marine Fleet Intelligence-Advisory” which can collect data from a wide variety of vessel systems. ABB is offering it as Software as a Service (SaaS).

REPORT COVERAGE

An Infographic Representation of Connected Ships Market

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The research report provides a detailed analysis of the industry and focuses on key aspects such as key players, ship types, installation type, fit, and applications of connected ship. Moreover, the report offers insights on the key market trends, drivers, restraints, competitive landscape, market competition, product pricing, market status, and highlights key industry developments. In addition to the factors mentioned above, it encompasses several direct and indirect factors that have contributed to the sizing of the global market over recent years.

Report Scope & Segmentation