4 Container Track & Trace Technology

Many of the stakeholder requirements in the transport supply chain, identified in Section 3, can potentially be addressed by the increased adoption of new container track and trace (CT&T) technology. During the past decade, innovation in the area of transport and communication technology has helped to develop new devices and systems, and revealed new uses for existing technology. Most of the technology applied in this area, however, is neither new nor is it specifically used to solve current issues in transport. The application of these technologies is, generally, reasonably expensive, for both small and medium sized firms as well as major companies. In addition, scarcely any other component of the transport industry is developing at a faster pace with solutions and solution providers changing at frequent intervals. Decisions about investments and commitments in this area need to be made cautiously. Nevertheless, approximately 80% of shipping managers recently predicted their next big investments to be in technological infrastructure (eyefortransport, 2002). It is important for decision-makers to have knowledge of the technological background and limitations of the technology applied in order to avoid costly and unnecessary investments. This section of the report includes an overview of existing and near commercial CT&T technology that has potential application in the Asia-Pacific region. Also included in this section are some profiles of businesses that were interviewed as part of this study and who have used various CT&T technologies to good effect.

Traceability
Basic minimal traceability between businesses in the supply chain is currently achieved by the exchange of relevant information (e.g. manifests, container ID). This exchange of information is by no means fully electronic, with many systems requiring exchanges of paper. There are a number of technologies available. There are however two major limitations to the increased adoption of advanced technology to improve traceability: a common identification platform, and information systems that are fully compatible. From a traceability perspective, the system is only as effective as its weakest point. If, for example, a port is able to provide real time information on all movements and other performance data to the carrier, but their data system is not able to handle all the information, then it is not possible for the shipper or the receiver to access it. The study has highlighted this as a major issue for achieving better traceability and improved trade between APEC economies. The best that most airlines can offer at present is Freight Status Update, which is often manually entered on a computer some time after movements take place. This system allows shippers to determine the status of their freight consignments (has left airport, still on ground, in air, etc.). It is expected that airlines will only improve traceability if they are forced to by legislation. All shipping companies have some form of CT&T system, which may be electronic, paper or

web-based. Typically, the web-based systems allow customers to look up shipment information by booking, bill of lading, and/or container numbers. The search results show information such as routeing, vessel and container location, carrier, mode, and status. Milestone events are included, e.g. empty container pickup, stuffing, and delivery to port. They can also send out, or show, exception alerts when changes in route, shipping time, ETA occur. In addition, the level of CT&T required by users generally matches the value of the cargo. CT&T was initially needed mainly as a trace back when there was a problem, to know cargo had arrived, or to claim insurance if stolen, damaged or lost. Several forwarders interviewed reported that they had not seen a great increase in requirements for tracking information from shippers above this basic level. Information overload was suggested as the main reason. The current security concerns and new US-initiated requirements have provided an impetus for a number of solution providers. The new security needs for enhanced traceability and more real time data exchange is providing the added-value that some of these solution providers have needed to make their products cost effective. Visibility Many of todays applications deal with the topic of asset visibility during transport. Customers and stakeholders who face the demand for Just-in-Time delivery and up-to-date data also require related information, such as arrival times and current locations. Some customers want to monitor the progress of their shipments. This demand is satisfied by a variety of solutions.

Container Identification
The current international container numbering systems for both sea and air freight essentially rely on alphanumeric IDs painted on the sides of a container. The limitation of this system is that it requires manual reading of container IDs at every transhipment point, with the attendant potential for error. An increased accuracy can be achieved with machine-readable IDs. The air freight industry uses highly sophisticated barcode technology to handle, sort and direct passenger baggage, and yet on the freight side still relies heavily on manual recording of alphanumeric ID on containers. Various cargo handlers and airlines have trialled barcode systems, but no universal systems have been adopted. Cost has been identified as a major inhibitor to ground handlers adoption of new technology. The various technologies for identification are discussed in this section. 4.2.1 Optical Character Recognition (OCR) The only standard identification on shipping containers is the alphanumeric number on the container. In order to work around the fact that the industry as a whole could not move on a machine-readable system or ID, the Port of Singapore developed an in-house automated solution that reads the current ID. This uses a patented OCR system. SSA Container Terminal 18 in Seattle-Tacoma Port has a similar system.

4.2.2 Bar Code Identification Bar codes explicitly identify products on a limited space label that is machine-readable. Together with improved informational infrastructure, bar code identification has become a powerful tool for monitoring the movements of goods and controlling inventories. One of the most common standards is the EAN128 Code, maintained by the Uniform Code Council (UCC), which is likely to become a worldwide standard in product identification as more and more companies recognise their need for worldwide standardisation (Price, 2002). Several standards exist for maritime cargo transport, from unique container numbers to global location numbers. Nevertheless, the variety of standards is overly large. In several cases the different standards of suppliers and recipients hinder international cooperation and limit the ability of products to be traced along their entire transport routes. Although it is relatively simple to provide a definite global identification for locations, parts and products, the gathering of information is still an error-prone manual procedure in the majority of cases. New wireless technology may help to reduce errors. As sophisticated technology and specialised applications tend to be costly, bar codes and their improved successors are likely to remain an important part of product identification along global supply chains (Hill & Cameron, 2001). 4.2.3 Radio Frequency Identification (RFID) The latest technologies that offer some opportunity for ID are RFID tags. RFID is already used in a number of other applications within the supply chain for truck and personnel ID. The technology is not new, however the costs have to date limited the number of applications (De Watchter & Pleysier, 2004). Essentially, the RFID system has two main components, a reader and the ID tag. The RFID tag consists of a microchip with built-in memory and a small radio antenna. The reader has an antenna that transmits a signal that provides sufficient energy to power the tag, and it will transmit data from its memory to the reader and in some cases, write new information to the tag. There are four main tag characteristics: Passive tag has no internal power and the read range is generally short. The size of the antennae determines the read range, so larger tags have more range. Typically the range is less than 1m. Active tag has an additional internal battery that can give much longer ranges. Read only has a unique ID burned at the factory. More sophisticated tags (Read/Write tags) can accept information as well. Anti-clash this refers to a tag and reader characteristic, which will read multiple tags within the read field. Standards in the area of RFID are developing. In order to make T&T along global supply chains feasible, these standards need to have a global scope. The Global Tag (GTAG) definition of the UCC is a good example of these efforts (EAN & UCC, 2002). Although a large market is available, the industry still is reluctant to agree on RFID standards (Cooke, 2001)

The RFID technology has been held to show a lot of promise for many years. It is claimed that RFID technology is likely to have a wide impact on T&T technology. Quite a few articles declared that 2003 would bring the change from former technology to RFID, at least in some dedicated business areas like warehouse management and fleet distribution (The Economist, 2003). This prediction appears to have been somewhat optimistic. As prices fall due to economies of scale, the likelihood of new application areas in air and maritime transport will increase as a result of lower costs and wider availability. RFID can also be a logistics solution at the pallet and package level. At present the industry does not see value at the container level. There has also been a concern raised that anyone with a reader could read the read/write tags and determine what is in the containers if the manifest were to be loaded onto the chip. A number of trials have been carried out with these technologies. The major factors that have led to a lack of adoption to date include insufficient read range for practical solutions, cost of technology and the fact that tags attached to containers are traded internationally so present an on-going cost for, say, a port wishing to use them in their system. The container owners and shipping lines similarly have not adopted them as the infrastructure to read the tags in the rest of the supply chain is not implemented. Each part of the system appears to be waiting for the first movers. Courier business DHL has been trialling the RFID system for 4 years. The technology has had to pass Federal Aviation Authority (FAA) tests to be used in the airline industry and decisions were made about the range and power of the antennae used. While it is possible to read data from tags at a distance of over 10m, DHL has opted for one with a 2.7m range. Trials in Asia and USA started in early 2004. If these tests are successful, implementation in the APEC regions will start in late-2004, with the ultimate goal of tagging every single DHL shipment.

4.3Container Location Technologies

4.3.1 Wireless Technology and RTLS These devices most often use radio signals with only a short range. The handheld units communicate with a network of local repeaters that are in turn linked to the main database. It is possible to use the signal strength to triangulate positions within the space covered by the repeaters. These Real Time Location Systems (RTLS) could be very useful for locating commodities in cargo port areas, but their adoption is limited to major companies by high installation costs (Hoffmann, 2001; Murphy, 2002b). 4.3.2 GPS and GIS Technology Global Positioning Systems (GPS) are already broadly implemented in transport solutions. The positioning of GPS receivers by satellites and transmission of current locations to a central database allow many applications such as the real time location of trucks and the direction of staff and vehicles towards appropriate positions. In combination with

Geographical Information Systems (GIS) that can provide topographical representations of transport routes and cargo positions, the GPS data is the most important information source in long-range transport across borders, where local communication and other location systems cease to apply. Several businesses have converged wireless communications (Global System for Mobile communications GSM, General Packet Radio Service wireless data protocol GPRS, Code Division Multiple Access wireless data protocol CDMA, or Satellite), the Internet and GPS technology to link vehicles and supply wireless vehicle services. Any Internet-enabled PC can then access services such as GPS fleet tracking and logging and two-way messaging capability. These technologies are now very common in trucking businesses involved in trans-continental and within-economy transport. Similar technology has yet to become commonly available to the sea freight container industry. GPS systems attached to containers do not work well on ships or in large container stacks as clear views of the sky are not available. When containers are at sea the location is often available through a GPS location of the vessel (see Case Study #1).

Security Related Technology

Many existing technologies related to security and quality issues are arousing new interest especially due to terrorism and responding government initiatives. These technologies already existed prior to September 11th 2001, and were and are applied regularly in a limited number of cargo applications (e.g. the US Military and high value electronics). The renewed interest combined with the opportunity of interfacing with new technologies is likely to see an increase in common application. 4.4.1 Electronic Door Seals Electronic door seals replace and enhance the physical protection of maritime cargo, especially of containers. While locks and bars can easily be broken, replaced or manipulated, electronic devices can reveal any modification during transport. They range from simple, small electronic components that function like common seals, through to complicated devices that monitor intrusion times and allow dedicated access control. In connection with monitoring devices along the supply chain, electronic door seals have the potential to expose intruders and improve security for cargo transport. In discussions in Singapore, however, we found evidence of theft off a vessel somewhere between Singapore and Europe where the container had an electronic door seal that was not tampered with, raising the issue of the efficiency of current designs. Other businesses that have evaluated these technologies have found the value provided by the enhanced capability of point-to-point tracking has not been sufficient to offset the cost. Savi Technology, Inc. is the company with the most advanced electronic door seal and related technology. Their system is being used by the US military to remotely track containers and is also being trialled in the CSI and OSC programmes in the USA. Location is determined by

GPS that is accessed by GPRS cell phone. The general consensus of those interviewed was that the US$400-500 price tag for this technology could not be justified by the benefits for most common cargoes. New technologies are being developed to detect tampering, such as light, vibration, infrared and impact sensors. These will connect to the electronic door seal.

4.5 Information to be Tracked

CT&T implies the tracking of the container, but there is a wide range of information that can potentially be tracked and be useful to different people in the supply chain. Different types of information are discussed in detail in Sections 4, 5 and 8. The most common information relates to the movement of the container: Current location and recent history of positions Locations where loaded, devanned, repaired, etc. In addition there is information that facilitates the containers movement through the supply chain and across international borders: Customs, security and quarantine documentation Commercial documentation, Bill of Lading, etc. Hazard and safety information Insurance information. Then there is information that relates to the performance of the container (particularly for refrigerated cargo): Temperatures Atmospheres and humidity On / off power conditions. Increasingly now, there is need for information on the security of the load: Door openings and seal tampering Breaches of the container Restuffing product into another container. Other information that would assist the owner of the container asset which is not currently collected as part of the CT&T process is: Performance of refrigeration units Maintenance schedules and repair histories. Finally, there is information relating to the manifest that is not confidential and would greatly assist in various places in the chain. CT&T technology should be able to access the manifest of the contents of containers for safety reasons. Certain containers, because of their contents, should never be located in close proximity or even on the same vessel. Freight planners can use the manifest information along with smart technology to avoid such situations happening if the information is available. The most obvious other information is the weight of sea containers. This is not transmitted through the supply chain in a sufficiently robust manner

that it can be used to: Determine how many containers to load on a vessel Determine if it can be transported by truck Determine how much duty to pay.

4.6Information Systems
There are two major components to the information system: the database design and functionality, and the means by which data is entered and extracted from the system. These issues are discussed in this section. 4.6.1 EDI and New Communication Standards Electronic Data Interchange (EDI) is the main communication standard used throughout diverse industries and businesses. It was developed in the late 1960s, when the need for data interchanges shifted from within the boundaries of one company to interconnectivity of several companies vertically and horizontally along the supply chain. EDI is used for the inter-industry electronic interchange of business transactions. The main technical standards for EDI messages are the UN/EDIFACT standard supported by the UN and the ANSI X12 standard commonly used in USA, Canada and Australia. EDI standards have evolved along with the developments of network technology. WebEDI was developed to transmit EDI messages over the Internet. Several firms and organisations are working on principles for future message transmission using the Extended Mark-up Language (XML), a specialised version of the Standard Generalised Mark-up Language (SGML). This framework allows companies and partners to develop their own language for interaction. While some of the new solutions are promising, the absence of worldwide standards is probably the main reason for a wide variety of different solutions, making comparison and safe decisions about investments difficult (Bowman, 2001). Most companies today rely on proprietary technology, sophisticated and specialised systems based on the exchange of EDI messages. While the market for new solutions has not stabilized yet, the application of new technology to existing EDI standards can decrease the costs for the installation and the update of systems. Sea freight has adopted EDI to a much greater extent than air freight. The air freight traceability system is still characterised by a significant amount of manual reading and recording of information and exchange via paper-based systems. 4.6.2 Internet/World Wide Web The increasing pervasiveness of the Internet has seen a strong trend by many involved in the container freight industry to move to this medium as a primary mechanism of business. Its main advantage is that it provides a very low cost communication format for data exchange. It is particularly useful for single tracking queries or sending out alerts and alarms. Information is made available on company websites and clients gain access to information with the use of a password. This data is then available for other information systems to

access and use to enhance the transparency of the whole supply chain. An example of how simple this can be is highlighted in Case Study #1. 4.6.3 Logistics Portals Given the large investments required to develop stand-alone systems that are able to coordinate all freight, container, vessel, port, forwarder and exporter activities, businesses have generally combined resources to develop these applications. Internationally there are three major e-logistic portals. INTTRA (see profile box above) is the largest portal with support from many of the worlds largest carriers. There are two smaller portals gaining a large share of the market: Cargo Smart, which is a subsidiary of OOCL, and GT Nexus. Development of these portals requires very large investment in software and hardware to deliver the performance expected in the market. To date, acceptance has been variable. 4.6.4 Supply Chain Event Management As a spin-off of the new information systems, exception management or the Supply Chain Event Management (SCEM) gains in importance. It is to be doubted that these approaches will have the major effects heavily advertised by solution providers (Bartholomew, 2002), but they indicate, nevertheless, the opportunities brought by the availability of data. New technologies allow automation of these reporting processes. As soon as a shipment is loaded, it can be cleared through Customs, the shipper notified of its status, the next shipper alerted and the recipient updated. The management and the optimisation of the processes are taken over by computers, so that monitoring and improving the performance of the systems becomes more important. Exceptions in the procedures that often cause costly delays are picked up in the software and the appropriate persons notified.

4.7 Future Solutions

The technology applied in todays Track and Trace solutions is sophisticated and the solutions themselves are complicated aggregations of different technologies and concepts taken from logistics, material handling and software engineering. While the time before the era of security concerns was characterised by cautious and deliberate investments, the new regulations impose high performance expectations on all involved in shipping containers internationally. The technology to fulfil the requirements is available, but the market for solutions is still complex. The most likely outcome of this situation is that the essential investments are implemented in order to fulfil the regulatory requirements, while the technologies and systems that can add some real value to supply chain performance within the APEC region, and facilitate trade, will not see wide adoption. The solutions described above are often limited to the boundaries of an individual business. Track and Trace technologies should offer a detailed insight on status and procedures along the whole supply chain. When visibility has to be expanded over the boundaries of companies, several different systems have to be integrated. A number of third party

businesses offer solutions for tracking cargo along supply chains, often formed by partnerships between hardware manufacturers, software developers and logistics providers. The main challenge lies in the combination and integration of available CT&T solutions. For their internal use and the optimisation of their own processes, many companies have already installed or are planning to implement solutions to monitor the flow of goods throughout their business. Combined with the development of standardised identification and inter-business communication standards, partnerships with members of the supply chain or specialised third party logistics providers allow the integration of their individual solutions and the development of more generalised CT&T solutions. The error-prone manual data collecting adds costs, which could be overcome by the use of more sophisticated and automated solutions. Currently, EDI and Bar Codes are the state of the art technology for CT&T of products along the supply chain outside of the container shipment component. Container identification and reading lag well behind other components in the logistics system. 4.7.1 Adoption of New Systems The major impediments to the adoption of new container tracking technologies are the cost and the inertia of changing from an existing system. There are four main areas that will see improved CT&T application. International regulation as already mentioned, the international security concerns are the major new driver for this change at present. If CT&T is mandated, the supply chain has to fall in line. Cost if the cost of the technology were to drop this will see more early adopters taking the risks with various systems. Who pays for the information? The point has been made that improved CT&T information comes at a cost, but shippers and receivers are often not prepared to pay for this. Essentially, there is information captured in the system that is not currently available to shippers or receivers. It is not made available due to provision costs and possible liability issues. If shippers and receivers were prepared to pay for this information, it appears that some of it might be made available. Long-term business position if the CT&T tools can be used within the business to improve efficiency and lower costs, then they may be adopted. If this information can be shared at a marginal cost then improved CT&T is enabled through the supply chain. There are a number of other drivers that might also be leveraged to help justify investment in improved CT&T and these include the security needs, HACCP and biosecurity (of both empty and full containers).