Smart Baggage Handling System Market Size, Share, Analysis, Trends, Growth, 2032

Smart Baggage Handling System Industry Prospective:

The global smart baggage handling system market size was worth around USD 28.69 billion in 2023 and is predicted to grow to around USD 155.41 billion by 2032, with a compound annual growth rate (CAGR) of roughly 20.65% between 2024 and 2032.

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Smart Baggage Handling System Market: Overview

A smart baggage handling system is a modern way of managing baggage-related traffic at airports, railway stations, and other public transportation systems. The novel baggage handling mechanism deploys the use of advanced technologies such as Artificial Intelligence (AI), Machine Learning (ML), Internet of Things (IoT), and others to manage and transport bags conveniently throughout the facility.

The most common applications of intelligent baggage handling systems are currently observed at airports with higher traffic on a regular basis.

However, railway stations are also investing in deploying novel ways of scanning and processing travelers' baggage. The systems work as one tool with the guidance of several other sophisticated technologies such as automation & robotics, IoT integration, Radio-Frequency Identification (RFID) Tags, and others.

The main goal of deploying smart baggage handling mechanisms is to improve security in public transport areas, reduce baggage-related errors, and speed up the process of baggage handling at crowded facilities.

The industry for next-generation baggage handling solutions is projected to register significant growth during the forecast period.

Key Insights:

• As per the analysis shared by our research analyst, the global smart baggage handling system market is estimated to grow annually at a CAGR of around 20.65% over the forecast period (2024-2032)
• In terms of revenue, the global smart baggage handling system market size was valued at around USD 28.69 billion in 2023 and is projected to reach USD 155.41 billion by 2032.
• The smart baggage handling system market is projected to grow at a significant rate due to the increasing traffic across public transportation units.
• Based on the technology, the radio frequency identification (RFID) segment is growing at a high rate and will continue to dominate the global market, as per industry projections.
• Based on the solution, the conveying smart baggage handling systems segment is anticipated to command the largest market share.
• Based on region, North America is projected to dominate the global market during the forecast period.

Smart Baggage Handling System Market: Growth Drivers

Increasing traffic across public transportation units will drive the market demand rate

The global smart baggage handling system market is expected to be driven by the growing rate of traffic at public transportation units such as airports and railway stations.

The increasing number of travelers worldwide has ramped up the traffic rate at transportation stations. This is especially observed at facilities that connect globally popular destinations. For instance, the Dubai International Airport can accommodate around 90 million passengers per year.

According to official data, more than 66 million passengers passed through the Dubai International Airport in 2022. Similar statistics are observed across international airport facilities in Europe, North America, Asia-Pacific, and other Middle Eastern countries.

The higher traffic rate at airports is led by an increased number of people visiting international regions for work, studies, or leisure purposes.

As per market research findings, the US hosted nearly 66.56 million tourists in 2023. The number is expected to increase further in the coming years due to growing job and study-related opportunities.

However, such intense traffic in public transport systems requires the facility management to spend heavily on baggage handling systems since it is easy to lose or damage passenger baggage.

Growing construction of new airport facilities and railway stations to provide revenue streams to the industry players

In recent times, investments toward constructing a more robust public transport infrastructure have grown steadily. This is especially visible in the growing construction of new airports and railway stations connecting remote locations.

For instance, in October 2024, Adani Airport Holdings Ltd (AAHL), a leading the largest private airport operator in India and Thales, announced an investment of INR 1300 crore for the expansion of Thiruvananthapuram International Airport (TRV) by 2027.

Similarly, the company is also investing in other emerging markets, thus providing growth avenues for the players in the smart baggage handling system market.

Smart Baggage Handling System Market: Restraints

High cost of the technology and its implementation will limit the industry’s expansion rate

The global industry for smart baggage handling system is projected to be restricted due to the high cost of the technology. These systems rely heavily on modern engineering solutions such as robotics & automation, AI & ML, and others.

Advanced technologies are expensive to develop and implement. The cost depends on the scale of implementation and features offered in the system.

For instance, the average cost of implementing a smart baggage management system at a large facility can be over USD 100 million.

Smart Baggage Handling System Market: Opportunities

Growing partnerships between technology companies and end-user facilities will generate expansion possibilities

The global smart baggage handling system market will generate growth opportunities due to the rising partnerships between technology providers and seekers. Such global partnerships open new avenues for exponential growth in the long run.

In December 2023, Leonardo, a leading innovation & technology firm, announced that it was selected by Southwest Airlines for its sorter technology. It is one of the leading US carriers, with more than 120 million passengers every day.

The sorter technology by Leonardo will be implemented at the Denver International Airport. The partnership is worth 25 million euros and will allow Southwest Airlines to meet its specific requirements.

In July 2024, the Montreal Metropolitan Airport signed a deal with Alstef Group for its new terminal baggage handling system. The new terminal is expected to be inaugurated by 2025 with an investment of 200 million euros.

The growing collaborations are further cemented by the rising rate of innovations showcased by system providers in the form of integrating advanced technologies.

For instance, AI integration with baggage management systems is an upcoming segment that is slated to drive higher revenue in the market.

Smart Baggage Handling System Market: Challenges

Vulnerability of the technologies in terms of cybercrimes may challenge the market expansion trends

The technologies available in the global smart baggage handling system industry are vulnerable to cybercrimes since solutions such as IoT and AI are often facilitated by the Internet. In addition, integrating advanced systems with legacy technical solutions may create more challenging situations for industry players.

Smart Baggage Handling System Market: Segmentation

The global smart baggage handling system market is segmented based on technology, type of transportation, solution, and others.

Based on the technology, the global market segments are radio frequency identification (RFID), barcode systems, and others. In 2023, the highest growth was witnessed in the radio frequency identification (RFID) segment. During the forecast period, it is projected to grow at a CAGR of more than 22%.

Market surveys suggest that airports can reduce baggage-related errors by over 20.01% with the use of RFID tags. The increasing adoption of radio frequency identification systems across airports and railway stations will help the segment thrive.

Based on the type of transportation, the global smart baggage handling system industry is divided into railway stations and airports.

Based on the solution, the global market divisions are diverting smart baggage handling systems, tracking & tracing smart baggage handling systems, conveying smart baggage handling systems, sorting smart baggage handling systems, and others.

In 2023, the highest revenue-generating segment was conveying smart baggage handling systems. During the projection period, it is estimated to grow at a CAGR of over 21%. The rising number of travelers through public transportation channels is fueling the segmental demand rate.

Smart Baggage Handling System Market: Report Scope

Smart Baggage Handling System Market: Regional Analysis

North America to continue its growth streak during the projection period

The global smart baggage handling system market will be led by North America during the forecast period. The main reason for regional market dominance is the growing number of tourists across the US and Canada.

According to market reports, the US registered heavy traffic across major airports in the country throughout the year. For instance, the John F. Kennedy International Airport (JFK) hosts more than 60 million passengers every year.

In addition to this, the growing number of baggage-related incidents will further drive the regional market demand rate. The rising construction of new and technologically advanced airports and public transport stations throughout the US and Canada will provide more growth opportunities in the coming years.

Europe is a fast-growing market with a growing adoption of smart baggage handling systems. For instance, Netherlands-based Eindhoven airport is reported to be experimenting with novel AI bag identification technology in association with BagsID and Vanderlande.

In March 2023, France-based IDEMIA announced the launch of ALIX. The AI-powered solution is helpful in automating the process of lost luggage identification. As per company claims, some of the advantages offered by the tool include acceleration in the search process, reduction in the number of lost luggage, and lowering operational costs.

Smart Baggage Handling System Market: Competitive Analysis

The global smart baggage handling system market is led by players like:

• Honeywell
• IBM
• Thales Group
• Siemens
• Zodiac Aerospace
• Alstef Automation
• Vanderlande
• Baggage Airline Guest Services (BAGS)
• SITA
• Kardex Remstar
• Beumer Group
• L3 Harris Technologies
• Daifuku
• Aviat Networks
• Ryder System Inc.

The global smart baggage handling system market is segmented as follows:

 By Technology

•  Radio Frequency Identification (RFID)
•  Barcode Systems
•  Others

By Type of Transportation

• Railway Stations
• Airports

By Solution

• Diverting Smart Baggage Handling Systems
• Tracking & Tracing Smart Baggage Handling Systems
• Conveying Smart Baggage Handling Systems
• Sorting Smart Baggage Handling Systems
• Others

By Region

• North America
  • The U.S.
  • Canada
• Europe
  • France 
  • The UK
  • Spain
  • Germany
  • Italy
  • Rest of Europe
• Asia Pacific
  • China
  • Japan
  • India
  • South Korea
  • Southeast Asia
  • Rest of Asia Pacific
• Latin America
  • Brazil
  • Mexico
  • Rest of Latin America
• Middle East & Africa
  • GCC
  • South Africa
  • Rest of Middle East & Africa