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The Global EWC Service and Maintenance Market to Increase by More than $437 Million by 2018


In its latest study of the $1.57 billion global market for explosives, weapons and contraband services (Design and Analysis, Installation, Service and Maintenance, and Training), IHS found that continued funding shortages in North America and Europe are causing end-users to prolong the life of their aging EWC detection equipment. This, in conjunction with the large installed base of EWC detection equipment, is expected to result in increased service and maintenance revenues in these regions. However, IHS expects the service and maintenance market in the emerging regions (the Middle East and Latin America), to be driven by new equipment purchases which will increase the installed base of equipment.


IHS found that the global service and maintenance market was worth $1.06 billion in 2013, and is forecast to increase by a compound annual growth rate (CAGR) of 7.1% over the forecast period, 2013 to 2018. The biggest surprise was the forecasted 7.4% CAGR in the cargo and vehicle market. IHS estimated the cargo and vehicle service and maintenance market to be the largest of all product types (Baggage and Parcel, Cargo and Vehicle, Hold Baggage, People Screening, Multi-application), in 2013 worth $358.2 million. IHS found that large gantry X-ray equipment and mobile cargo screening vehicles required increased levels of service and maintenance due to the large number of moving parts and the complexity of the technology.


Overall, the global service and maintenance market is forecast to see faster growth starting in 2016 and continuing through 2018. IHS expects the transition to Computed Tomography (CT) hold baggage screening equipment in the aviation market to be the main contributor to this increase. CT hold baggage equipment carries a significantly higher cost compared to single or multi-view X-ray equipment and IHS found that service and maintenance cost were also higher compared to other types of hold baggage equipment. 


With some customers delaying product purchases, manufacturers are looking for new revenue streams in the service and maintenance market and are currently using distributors to service and maintain EWC detection equipment in the emerging regions. In regions with a large installed base of equipment (North America and Western Europe), many manufacturers provide service and maintenance directly to the end-users due to the manufacturer’s large service infrastructure in these regions. Historically, the emerging regions have had a limited installed base of EWC equipment and the cost of developing a local service and maintenance capability outweighed the possible revenues.


As budgets decline in Western countries, and emerging regions move to purchase new EWC detection equipment, the service and maintenance market is poised to see continued growth. Therefore, knowing which industries and regions to target first, and how service and maintenance varies by country will provide suppliers with a significant competitive advantage.


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