A new study from Germany show rapid expansion in the maritime fleet management software sector.
While shipowners are generally classified conservative in the uptake of new technology, the advent of increasingly sophisticated software solutions which manage everything from fuel to cargo to crew make a compelling financial case to modernize quickly.
Earlier this summer Germany’s Fraunhofer CML issued what is arguably the most thorough study to date which analyzes the software market as applied to shipping companies. Entitled “Fleet Management Systems 2013,” the 60-plus page report provides exhaustive detail and insightful research on software solutions from 46 providers globally, with many pages of product overview helping to measure how one system stacks up versus another. In short, the study seeks to provide clarity to what many see as a confusing technology sector, one born of in-house solutions and evolving with the shipping industry to that of a more corporate and unified approach.
The umbrella term Fleet Management Systems (FMS) covers software solutions that support specific business processes in ship management.
In analyzing the shipping software market, it is important to keep in perspective that it is still in its infancy compared to the industry as a whole, as the study found that providers have been in the market for an average of 18 years, while nearly 30% of the companies have entered the market in the past decade.
Maritime Reporter editorial staff have noted a palpable uptick in the appetite for advanced software systems in recent years, and the report helps to support this notion. While difficult to pinpoint the total value of the market given that many of the software providers and their clients are private, the Fraunhofer CML studies estimates the size of the global FMS market to be $408-545 million and growing rapidly. The wide chasm in determining market size is due too to the disparity in company size, as larger companies offering more comprehensive solutions value the market higher. In general terms, researchers at Fraunhofer found the average cost of an FMS application was between $5,400-10,800 per year, per vessel.
Despite a generally horrible year for shipping in 2011, the FMS market grew about 7.5%, and the market is expected to grow between 8-17% in 2013.
While drivers for the growth are numerous, reduced fuel consumption and cost is the overriding reason ship owners are venturing into more sophisticated programming, as solid data is emerging which correlates efficient route and weather planning, for example, and its direct effect on saving fuel and money. Less tangible but still important factors in software solution growth in the sector centers on rapid communication capabilities connecting ship to short. Put simply, ship owners today are able to access faster, more reliable communications cheaper, and while the trend does not exactly mirror shore-based capabilities, the gap is narrowing.
Faster, cheaper communication are opening a plethora of new areas for onboard software development, as efficiency measures such as real-time machinery monitoring and maintenance assist, as well as crew welfare initiatives such as real-time medical assistance emerge from concept to reality.
In assessing the 46 companies, the study found an average operating revenue of $5.2 million, meaning that the majority of the companies are relatively small, and given the overall size of market, it is still a highly fragmented sector with fierce competition, meaning future consolidation to fewer, larger players is a distinct reality.
Finally, the industry-wide trend toward cloud solutions is noticeable in the FMS market, as nearly half (48%) of the providers currently provide cloud-enabled software solutions. While the other half does not, the study found that the majority of them plan to do so in the future.
$5,400-10,800 average cost, per vessel per year, of an FMS application
$5.2 million average operating revenue of software companies in the study
18 average age of software companies in the study
48 Average age of software companies in the study
$408-545 million Estimated size of the global market for Fleet Management Systems
For additional information on “Fleet Management Systems 2013,” contact Fraunhofer CML:
T: +49 4042878 4476
(As published in the October 2013 edition of Maritime Reporter & Engineering News - www.marinelink.com)