Executive Briefings

Rail Not Likely to Make Greater Use of GPS to Keep Tabs on Carts Soon

Tracking rail carts with GPS and cellular could bring value to the rail sector; however, penetration rates on rail carts are currently very low (globally less than 50,000 in 2014), and growth is not forecasted to be very strong over the next 5 years, or even the next 10, according to ABI Research. Therefore, for the time being at least, it looks like RFID will dominate this sector.

Rail Not Likely to Make Greater Use of GPS to Keep Tabs on Carts Soon

Part of the problem is unlike trucks, rail carts travel on a track and therefore stick to a pre-determined route, and do not require tracking for the whole journey. Furthermore, when carrying “low-value” cargo the carts location is not of concern as long as it leaves from its start point and reaches its final destination.

The cost of RFID is also nominal (approximately $30) in comparison to GPS and the battery life of RFID lasts considerably longer than GPS. Therefore, GPS is only considered to be useful for high-value cargo or extremely hazardous cargo. With these factors in mind uptake is unlikely to reach mass adoption in this forecast period, and many in the industry consider this sector to be fairly unattractive for GPS and cellular.

Filomena Berardi, senior analyst, says: “From speaking with industry experts, many believe that either governmental legislation is needed to really drive adoption or an unfortunate security incident needs to happen, such as it did with the aerospace industry. Also, none of the bigger players are very active in this market, and it would appear that smaller companies, some with fewer than 50 employees, operate on a local bases. BSM Wireless and GlobalTrack are good examples of such a company mainly focused on the rail sector. With some attention either from governments, media or the industry this situation could turn around.”

Source: ABI Research

Part of the problem is unlike trucks, rail carts travel on a track and therefore stick to a pre-determined route, and do not require tracking for the whole journey. Furthermore, when carrying “low-value” cargo the carts location is not of concern as long as it leaves from its start point and reaches its final destination.

The cost of RFID is also nominal (approximately $30) in comparison to GPS and the battery life of RFID lasts considerably longer than GPS. Therefore, GPS is only considered to be useful for high-value cargo or extremely hazardous cargo. With these factors in mind uptake is unlikely to reach mass adoption in this forecast period, and many in the industry consider this sector to be fairly unattractive for GPS and cellular.

Filomena Berardi, senior analyst, says: “From speaking with industry experts, many believe that either governmental legislation is needed to really drive adoption or an unfortunate security incident needs to happen, such as it did with the aerospace industry. Also, none of the bigger players are very active in this market, and it would appear that smaller companies, some with fewer than 50 employees, operate on a local bases. BSM Wireless and GlobalTrack are good examples of such a company mainly focused on the rail sector. With some attention either from governments, media or the industry this situation could turn around.”

Source: ABI Research

Rail Not Likely to Make Greater Use of GPS to Keep Tabs on Carts Soon