One of the world's largest shipping concerns is preparing to participate in a track-and-trace, radio frequency identification technology supply chain pilot in Asia with EPCglobal Inc., a non-profit organization spearheading RFID adoption. The move underscores an unprecedented wave of RFID adoption in the maritime industry.
Cindy Braun, general manager at Maersk Logistics, a division of shipper A.P. Moller-Maersk Group, which is participating in the pilot, detailed the program on Wednesday at an RFID forum hosted by the Wireless Internet for the Mobile Enterprise Consortium at the University of California Los Angeles.
"It's expected the project will provide ways to tighten security through U.S. customs, as well as border crossings between south China and Hong Kong," Braun said.
The project will begin later this year and end in December 2006, with findings from the pilot published the following year. EPCglobal is sponsoring the project in south China in cooperation with the Hong Kong government. Maersk will match the Hong Kong government's undisclosed financial investment for the project.
This RFID project in China is one in many for Maersk. The company is preparing its warehouses globally by installing networks, readers and infrastructure to manage RFID shipments for customers delivering goods to companies such as Wal-Mart Stores Inc. in the United States and Metro Group AG in Germany. On average ships today carry about 3,000 containers, up from 200 million in 2002, said Braun. About 100,000 documents are required to ship that cargo. RFID could reduce some of the paperwork with automatic data collection from readers and tags.
Monitoring cargo container shipments also is expected to reduce theft, which along with diverting products to another port without prior approval from the supplier, accounts for between 1% and 3% of goods shipped worldwide. The container's inventory content is typically valued at between $500,000 and $5 million, depending on the goods.
Another problem is product counterfeiting. It accounts for between 5% and 10% of all global trade, or roughly $350 billion. Braun estimates U.S. cargo theft costs companies $1 billion monthly, with most occurring in the transportation process of getting goods from one location to another, which isn't limited to cargo containers.
The terminals in Long beach that Embarcadero Systems Corp., which develops maritime shipping container management systems and software, receive 4,500 trucks daily. To comply with a Transportation Security Administration mandate that requires shippers have the ability to identify each driver, Embarcadero is using technology from WhereNet Corp. and has distributed 30,000 RFID tags to truck drivers in the Los Angeles areas. The tag is owned by the truck driver. Readers on port lots read the RFID tags to identify the truck and driver as it enters and exits the facility.
It's a security precaution. There is a theory by shippers that "if a bomb was planted in a shipping container it would come from someone inside the United States," said Keith Dierkz, senior vice president of operations for Embarcadero Systems Corp. "Instead of the bomb planted in a container being imported into the United States, it would be planted in a container being exported and set it off in the terminal."
Embarcadero also is testing at its terminals in Oakland, Calif. electronic seals on the back of containers to know if something has been added or removed from the container. The technology is from Savi Technology Inc. and General Electronic Co., Dierkz said. About 20 terminals in a dozen ports throughout the United States are using RFID technology to track and monitor container shipments.
But deployments aren't' limited to the United States. While there are plans to install new RFID readers at terminals in ports along the U.S. west coast, Savi recently upgraded reader technology at China and Hong Kong ports. Savi teamed up with Japanese shipping and logistics company Mitsui OSK Lines to provide RFID services for an undisclosed consumer-goods company headquartered in Japan, said Mark Nelson, Savi spokesman.