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Supply Chain: Tools to Make Containers Talk

When former U.S. Customs and Border Protection Commissioner Robert Bonner was asked how technology could help improve supply chain security, he answered in two words: smart containers

By Ben Worthen

April 01, 2006 — CSO —

Supply Chain Security

When former U.S. Customs and Border Protection Commissioner Robert Bonner was asked how technology could help improve supply chain security, he answered in two words: smart containers.

Smart containers could tell Customs officials whether a container had been opened and, if so, when and where. Unfortunately, smart containers still have problems, including high costs, security concerns and a high number of false positives on choppy oceans. Customs says this is one reason it hasn't rolled out a Green Lane designation for ships that works like an E-Z Pass lane on a toll road.

Meanwhile, some companies are using radio frequency identification (RFID) networks to track shipments. General Motors parts coming from Canada to the United States are carried on tagged trucks. The tag includes the vehicle and container identification numbers (matched to the manifest submitted by the carrier and GM) and a digital photo of the driver. If the picture doesn't match the driver, or the numbers on the RFID device don't match the manifest, the load is inspected and the driver questioned by a Customs officer.

For intercontinental shipments, an RFID tag can trigger automated alerts when a container enters a terminal equipped with an RFID network. (Without automated alerts, importers might wait days for terminal operators to send their manual alerts after a container arrives in the United States.) Stanford Professor Hau Lee found that with reductions in inventory and pilfering, as well as other savings, companies that use technologies such as RFID can avoid as much as $462 in costs per container. Reusable RFID tags cost between $20 and $150, and networks can cost from $30,000 for a small site to over $1 million. So it will be awhile before RFID is ubiquitous.