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, 2020-2032

The global baggage handling system market size was valued at USD 8.55 billion in 2019 and is projected to grow worth USD 21.52 billion by 2032, exhibiting a CAGR of 6.8% during the forecast period. Asia Pacific dominated the baggage handling system market with a market share of 36.25% in 2019. The baggage handling system transports checked baggage from the 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.

The renovation of airports across the globe is a growing trend in the market. The majority of airport authorities are investing in renewing airport infrastructure to offer better comfort and baggage handling experience to travelers. Moreover, the utilization of technologies including, radio-frequency identification (RFID), and destination-coded vehicle system (DCV) are complementing 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 the 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 the 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 a broader impact if the pandemic is not controlled around the globe. These factors will have an adverse impact on the global market in the coming future.

MARKET TRENDS

Renovation of Airports across the Globe is Upholding Market Growth

The number of airports across the globe is increasing owing to the high acceptance of airways as a mode of transport. Upgradation of airport infrastructure by utilizing 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 adoption of 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 the 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, the 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 traveling via airways have increased in 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 a USD 8.5 billion expansion plan for airport renovation, including renovation of the airport’s existing terminals and increasing the number of gates. Hence, a sudden increase in passengers traveling 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 systems owing to factors such as a huge number of passengers and low security. This demands better luggage handling facilities and it requires huge amounts of investment. Furthermore, at airports, the sudden breakdown of baggage handling equipment challenges the airport infrastructure facilities. Sudden breakdown refers to the operating system failure, network failure, power failure, and outage caused by improper usage. If any 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 vehicles (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 the 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 a 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 a better traveling 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 the highest market share, owing to its utilization by the 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). A hybrid solution offers a higher read rate than using the technologies separately. Implementation of RFID with the hybrid solution can be a step toward full implementation of RFID.

By Application Analysis

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 a sudden increase in air passenger traffic around the globe. Moreover, major airports are equipped with technologically advanced baggage handling systems that make traveling less hectic. This equipment moves the baggage in and out during the check-in and checkout processes.

The applications of baggage handler mechanisms in the railway are 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

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, a rise in cruise travelers, and upcoming airport renovation projects. Moreover, the investments in railway transportation and the 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 a rising number of passengers traveling via marine and airway routes. This is because the authorities are heavily investing in the development of technology and opting for partnerships to gain a competitive advantage in the market. For instance, in May 2018, the Airport Authority of India (AAI) ordered 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 a technologically advanced 10-mile CrisBag, tote-based baggage transport, and sortation system. Moreover, the huge number of passengers traveling on cruises within the region has boosted the demand across North America.

Europe is experiencing substantial growth owing to the fact that most of the leading manufacturers of baggage sorting equipment have a presence in countries including Switzerland, Germany, the U.K., and the Netherlands. Moreover, these manufacturers are strategically investing in other countries to gain a competitive advantage. For instance, in May 2019, Vanderlande Industries signed a 20-year framework agreement with the Brussels Airport Company. The agreement includes the replacement of the 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 the Middle East and Africa show potential growth, owing to the increasing number of tourists traveling to countries such as Saudi Arabia, the 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 traveling 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 a 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 KEY COMPANIES PROFILED :

• Vanderlande Industries


• Siemens


• Daifuku Co., Ltd.


• BEUMER GROUP


• Pteris Global Limited


• SITA


• Fives


• Babcock International Group PLC


• Smiths Detection Group Ltd.


• G&S Airport Conveyor


• B2A Group


• Logplan

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 a 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 vehicles that minimize 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 the 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.

REPORT SCOPE & SEGMENTATION