SMART CONTAINERS

These days, there are more and more of what are called “smart containers” – electronic tracking and reporting systems and infrastructure, and the boxes themselves. While most supply chain executives understand that smart containers can detect something, little more is known or appreciated, such as the fact that not all smart containers have the same level of intelligence.

The smartest type tells who supervised its stuffing, what’s in it, where it’s leaving from and where it’s going, who’s carrying it, where it is at any given time, where it is but shouldn’t be, and whether an authorized person opens it at destination. It will also signal unauthorized access en-route and say where that took place. The dumbest container usually can tell you if its doors were opened en route.

The Homeland Security Research Group has estimated that revenues in the overall container security market will increase from less than US$1 billion in 2007 to more than $4 billion in 2012. A study from Stanford University points to quantifi able benefi ts such as a 50 percent increase in access to supply chain data, a 38 percent drop in theft and similar losses, a 14 percent cut in excess inventory, and 29 percent reductions in overall transit times.

Aside from business benefits, smart containers also offer enormous potential to improve national security worldwide. Although conventional sensing and reporting technologies can do a fine job of tracking a container’s physical location and whether it has been broken into or not, they cannot reliably determine whether, for example, the cargo includes enriched uranium or biochemical weapons.

WHAT TO DETECT?
The easy response is that it depends. If you are Coca-Cola and you’re shipping syrup from Puerto Rico to the US mainland, you probably aren’t worried about theft since thieves are unlikely to be able to move stolen syrup. A more practical worry is contamination of the syrup – deliberate or otherwise. If you work for a pharmaceutical company like Pfizer, you’ll also fear contamination, but you’ll also worry about theft of high-value medications.

There’s a difference between what should be detected in the private sector and what makes sense in the public sector. Government needs are likely to be more comprehensive. In addition to theft concerns, detection will include the need to detect weapons of mass destruction, including chemical, biological, and nuclear materials. The smart container must also detect illegal drugs and human cargo.

Not long ago, a major US motor carrier opened a container of products originating in Mexico. Inside, the trucking company found evidence of non-paying passengers: cans of tuna, both opened and unopened, items of clothing and plastic bags containing urine. Plus, there was a hole in the roof that was never discovered in transit to the US.

Although the specifics of what to detect vary by the type of shipper, there is some general agreement. The first order of business is to detect any unauthorized breach through any part of a container – not just through the doors. Second, it’s necessary to detect the container’s internal environment for the safety of the product being carried. And third, one must detect the presence of cargo such as weapons, illegal drugs, and human beings.

Those primary detection requirements can be supplemented by detecting the container’s location. If you work for Home Depot, for instance, you’ll want to know exactly where incoming containers are – especially if they are carrying products in high demand for a recent promotion. One location-detection option is called geo-fencing. In essence, the container detects a variance between where it should be and where it is – as a result of a hijacking, for instance, or if it has simply been sent to the wrong consignee or the wrong location.

HOW TO DETECT
In most cases, basic detection is available and inexpensive. We can detect breaches into containers using magnetic switches, light, vibration, temperature, and more. Companies such as General Electric and GlobalTrak off er systems that use a combination of sensors, RFID,and satellite technologies to detect unauthorized breaches. Detectinga container’s position is also quitesimple and low cost. Just as GeneralMotors’ OnStar system uses satellitepositioning to pinpoint location, socarriers and shippers can use servicesprovided by satellite service providerssuch as Iridium, Orbcomm, andInmarsat.

However, we still lack the sensing technologies needed to adequately detect biological agents, chemical agents, shielded enriched uranium, humans, explosives, and drugs – the issues that governments are likely to consider the most important. The technologies are still in the early stages of development. Moreover, when appropriate sensors do become available, the cost will be high.

That said, some advanced sensors are already available for use with containers. For instance, although we do not yet have the technology required for non-intrusive portal machines that can scan containers for an instant read-out on the presence of shielded enriched uranium, it is currently possible to detect the presence of shielded uranium over time. And emerging applications of electrochemical and electromagnetic technology suggest the continued development and production of sophisticated sensors that will be able to detect the presence of WMD, drugs, and humans.

REPORTING OPTIONS
A smart container must be capable of reporting what it detects. There are currently three generally accepted methods of transmitting such data: RFID, satellite, and cellular. Users almost always trumpet the benefits of the application they employ. But it’s important to take a closer look at pros and cons of each.

RFID
RFID technology in logistics is not new, of course. Wal-Mart and Target are two of its best-known proponents. But the problems of RFID are many. Although the larger companies in the smart container sector indicate that they are committed to RFID, we believe their commitment will be short-lived.

RFID applications require the carriage and transmission of data through a wireless system. Changes in the status of an RFIDtagged container can be sensed and transmitted when the container is interrogated by a transceiver positioned along the global supply chain. The transceiver sends out the triggering frequency, which produces a return transmission of any change in the container’s status – for example, if the doors have been opened.

Since the data travels via electromagnetic waves, successful transmission depends on the use of the proper frequencies and the absence of noise or same-frequency emissions from competing antennas whose direction unintentionally or intentionally obstructs the intended RFID transmissions of the intended transponder.

In fact, the approved use of RFID at US seaports is a major security vulnerability. A perfectly benign RFID signal can be used to detonate an explosive device when the container is interrogated. This, in fact, was demonstrated in a specialtest in 2007, when a container carrying an explosive device wasdetonated by using the exact RFIDsignal approved and mandated foruse in US seaports. Officials fromthe US Department of Defensewere on hand to witness thedemonstration.

Additionally, RFID has no global protocols or standards. For instance, a transceiver in Shanghai or Cape Town cannot trigger data transmission on the tag on a container shipped from Boston or Jacksonville. In short, RFID for container security is applicable only to those areas of the world that have agreed on the same frequency.

An equally troublesome concern is the overland movement of containers and the corresponding creation of a land-based infrastructure of antennas and readers. Unlike RFID tags used in products and pallets that are read in controlled distribution systems, active RFID devices in containers that move through uncontrolled environments worldwide require the construction of antennas at chokepoints – the points of the container’s journey that cannot be circumvented by the carrier.

Satellite
Combined with round-the-clock communications from providers like Inmarsat and Iridium, satellite systems can get around the challenges posed by land-based infrastructure of RFID antennas and readers. However, it is important to note the distinction between satellite tracking and satellite communications. Tracking, where a satellite “pings” a container that has a GPS (global positioning system) antenna, may be fi ne for asset management but inadequate for container security and control.

For a container to declare its location to those who want to know, it must have another antenna to send the signal. Sophisticated two-way satellite communications require this additional antenna and a modem along with circuitry that allows the container to talk to its satellite provider under certain conditions.

GPS systems are not without weaknesses; they often have dead spots and they require visible antennas on the conveyance. A visible antenna might seem harmless, but it allows those who intend to hijack or breach a container to do so without detection. Secondly, the capacity to sense what is going on inside the container and to report back requires greater electronic sophistication than that needed fortracking alone.

Cellular
So far, cellular has not made significant inroads into the smart container world even though there are roaming capabilities and connectivity between different areas of the world. The problems are similar to those facing RFID with respect to frequencies and bandwidths, protocol challenges, infrastructure network issues related to network gateways, sub-network gateways, towers and base stations. There are also fundamental security issues such as interoperability, authentication, tampering, eavesdropping, or access to information that is transmitted in the clear as opposed to being encrypted.

END-TO-END
Much of the current literature on smart containers focuses not on solutions to the problem of security, but on the sensors and communication hardware that are part of the solution. In practice, a truly effective security solution requires a complete system of end-to-end coverage – from a container’s origin to its destination.

At origin, container systems must include the identification of a party responsible for final inspection of the cargo prior to its dispatch and subsequent international movement. Someone must take responsibility for confirming the cargo on the bill of lading or booking sheet, for activating the smart container system, and for locking the doors. This responsible person must be vetted for his or her integrity and competence.

Equally, there must be a counterpart at destination, and both parties must be electronically associated with the smart container by a unique identifier in order to complete the system. This can be done with an activation key that is loaded at origin with the bill of lading and booking information.Other data (such as the identity of the supervising and arming agent atorigin) then allow the fi nal agent todeactivate the system at destination.

The secure electronic key is used to transport and insert the data from the company’s logistics system into the device affixed to the container. When the key is used to activate the system at origin, the data contained in the container device’s memory can be read at almost any time during the voyage through satellite communication.

The activation also allows a smart container to notify appropriate parties of an unauthorized breach or to report the condition of the container. Depending on the sensors used, it could also report the condition of the cargo and even provide off -course alerts on its own hijacking all the way from origin to destination.

A smart container system, then, is much more than just a locked door. It is a complete system that must:

• Electronically identify the authorized personnel stuffing and securing the container, and accept and report information such as container/trailer number and booking data
• Detect a breach in any part of the container
• Report the breach in real time (or close to real time)
• Track the container through the supply chain
• Identify authorized personnel unsealing container
• Be software-friendly to accommodate disparate logistics programs in communicating critical data

The increased use of container security systems will ultimately depend on industry’s recognition of the bottom-line benefits and on the existence of real government incentives. The sooner those incentives can materialize, the sooner businesses are likely to see benefits from smart containers.

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GET SMART – IN UNDER A MINUTE

RFID specialist Odin Technologies is launching a retrofit solution that promises customers a quick and cost-effective transition to smart containers. President andCEO PATRICK SWEENEY talks to Logistics Insight Asia .

Q: How would you define a “smart container”?

A: It is something thing that can, with no human intervention, enable security, pedigree, and inventory of any shipping container. We’ve been working on our solution for close to five years now; it’s called SMART, which is acronym for Secure Material Asset Recording and Tracking. It will be officially launched at this April’s RFID Journal Live show in the US.

Q: Could you describe that solution?

A: There’s two main components: the body and the wings. The body, which comprises a battery pack, on-board power supply, an authentication device, and satellite communications capability, connects through a cable to a series of RFID reader wings that are placed inside the container.

The wings fit in the container’s indentations so that they do not take up cargo space. Anything that goes in and out of the container door and has an RFID tag is read. You can also set the device to inventory the container at set intervals.

All that captured information can be transmitted through satellite communications to a central database located anywhere in the world. We also have the capability to have sensor technology added on to provide e.g. bio, chemical detection as well as tracking. And apart from security, there’s an obvious businesses efficiency perspective in not having to manually record all the items going into a container.

Q: So these are all existing containers?

A: Yes, that right; what we are providing is a retrofit solution When you think that the Department of Defense (DoD) aloneuses 900,000 shipping containersand that there are millions morein the commercial world, it’s veryimportant that any device used tocreate a smart containers can bevery easily retrofitted. And the Odinsolution can be literally deployedin under a minute, i.e. in you cantake an existing container and veryquickly achieve those three things:security, pedigree, inventory.

Q: Security is a key driver behind the development of the solution?

A: Yes it is. The Department of Homeland Security is requiring that, by 2012, all containers (100 percent) entering the US be inspected. The issue is that this is a huge task and there’s just not enough people to inspect all the cargo. So what is going to happen is that the US will sanction inspection at the point of origin.

What this means is that partners around the world will be trusted to RFID tag everything going into a container and then seal it. If you trust the person packing it and if there is no change in the state of the cargo, then it can go in as a pre-inspected container. And what they’ll need to achieve this is something like the Odin SMART container solution.

Q: Who would be your customers ?

A: Apart from the government, the other two primary lines of business are shipping providers and shippers (manufacturers).

For shipping providers, there’s the opportunity of a new revenue stream, because the burden of inspection will be a cost passed onto the shippers and the shipping lines will be able to say, we have a smart container – we can get your inspection done at half the cost.

For the shippers – the Sonys and the Hyundais of the world – they would be keen to participate in a system that allows their goods to be pre-inspected because they would then get to market faster, especially come 2012 when the customs delays could be tremendous.

Q: You are optimistic about the business potential of your smart container solution?

A: The future of the shipping industry is clearly dependent on automation technology; it is not possible to meet Homeland Security requirements using people alone. While with other solutions it can take up to a week to retrofit a single container and cost tens of thousands of dollars, our ability to retrofit containers inexpensively and easily is what’s going to drive the adoption.

We currently have a large contract (US$19 million) to supply the system to the US Navy (it is mandatory for suppliers to the DoD to ship cases and pallets with RFID tags already attached), and I anticipate that within three to five years we are going to have a $100-$125 million dollar smart container business.

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