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PREPARED FOR
THE COMMITTEE ON GOVERNMENTAL AFFAIRS
December 6, 2001
CARGO SECURITY-A PARADIGM SHIFT
W. Gordon Fink
Emerging Technology Markets
EXECUTIVE SUMMARY
Cargo Security is defined as safe, reliable intermodal
movement of goods from the shipper to the consignee with no
loss due to pilferage, theft or damage.
It includes the key carrier assets that move the goods
- the containers, trailers, chassis, tractors, vessels, and
rail cars. The
combination of 1) a significant increase in demand for
information on the status of the goods movement process; 2) increased
security and safety concerns; 3) the constant pressure to
reduce transportation costs; and 4) the speed of cargo
movement have created the need for a paradigm shift.
Technology advancements such as global position location
systems, improved communications systems (wireless data and
the internet), and manifesting and cargo movement software
systems are creating a technology based paradigm shift in
Cargo Security. The
results will be significant as Cargo Security technology
applications are developed, tested, the benefits understood
and quantified. Multiple
sources of these technologies are emerging resulting in
reduced implementation costs.
Early adopters will benefit from reduced operating
costs, improved safety and security, and increased market
share. The U. S.
Military and regulatory agencies - such as U. S. Customs -
will also be major beneficiaries of Cargo Security technology.
THE DEMAND
The constant demand to reduce the cost of goods sold has
focused more emphasis on the
transportation system.
Just-in-time delivery, reduced inventory, and
redistribution of products to meet geographical demand are
significant factors in the decision process to achieve the
optimum blend of transportation, manufacturing, and
administrative costs. Customer
satisfaction is becoming a more significant factor in the
choice of carrier especially when it relates to reliable
location and delivery information.
The recent increase in cargo theft and safety are of
growing concern to the transportation industry.
Thefts, coupled with the potential to use shipments as
“weapons of mass destruction”, are placing new demands on
Cargo Security. While
terminal security has improved, there are significant
increases in off terminal theft – ranging from theft by
organized criminal organizations that often have “inside”
information on the shipments to thefts that are “targets of
opportunity”. Access
to information technology systems, including “corrupt”
employees who gain theft targeting information, is increasing.
Any time the cargo is stationary, the vulnerability
to theft increases. The FBI recently stated that cargo crime is conservatively
estimated at $12 billion per year – “the fastest growing
crime problem in U. S.”
The FBI believes that the growth in cargo theft is due
to lax penalties, high profit, and low risk of tracing the
stolen goods. There
is no central repository for cargo theft statistics including
common criminal practices.
Theft results in an increase in the cost of doing
business including increased insurance rates.
In other areas of criminal activity, shipments imported into
the U. S. are often used to conceal illegal goods –
narcotics, trademark violations, etc.
Recent emphasis on the potential to use cargo
containers as “weapons of terror” will increase the need
for better information and inspection technology.
The results are increased costs as well as the
potential for delay in cargo delivery.
Terminal operators and carriers work daily to reduce costs.
Improved yard and gate systems, remote monitoring
systems for reefer and high value cargo, and more efficient
use of assets all contribute to reduced operating costs and
the speed of transportation services.
The chassis has become a key concern of the
transportation industry – especially the ability to meet
roadability safety requirements. The challenge and debate continues on the responsibility for
chassis safety and liability, especially the inspection and
reimbursement for repairs responsibilities.
Increasing costs, caused by delays at terminal gates
and road congestion, are significant factors impacting
transportation system costs.
Hazardous cargo movement is also placing increased demands on
the carriers - both in the reporting and storage requirements
as well as the increased potential for use of these shipments
as “weapons of mass destruction”.
The list of cargo considered to be hazardous is growing
as well as the concerns of the public, the regulatory
authorities, the carriers, and the terminal and port
operators.
THE TECHNOLOGY RESPONSE
Technology is beginning to address the carriers’ operational
needs to reduce costs and increase safety and security.
Some marine terminals are using Radio Frequency
Identification (RFID) tags on their chassis, generator sets,
and in a few cases containers to reduce on-terminal costs.
At the terminal gate, the relationship with container
number and the RFID chassis tag is entered into the
manifesting system. These
systems are improving the efficiency of terminals including a
reduction in gate delays.
RFID systems eliminate the need for keystroke date
entry systems, thus reducing the frequency of human error and
increasing operational efficiency.
Rail carriers have installed RFID tags on all their rolling
stock and placed readers on their tracks to provide rail car
location. Recent innovations in their information technology systems
have integrated the container or trailer number with the rail
car identification providing location information on the cargo
including the estimated arrival and de-ramp times.
Customers who know which rail carrier are moving their
cargo can access this data - often using the internet.
Marine terminals are also reading the rail car RFID tag
as it enters their terminal and using information provided by
the rail carrier to immediately access the in-bound container
numbers.
Rail and marine terminals are also using optical character
recognition systems to read the container, trailer and chassis
number. Driver information entered into the software manifesting
system becomes part of the increase in terminal efficiency as
well as improving Cargo Security – providing a permanent
record for Cargo Security and movement information.
Terminal operators are also using technology to
remotely monitor the condition of reefer units and high value
cargo.
A number of the long haul trucking firms initially installed
remote monitoring, location, and communication systems in
their tractor units to provide information on the performance
of the driver, the tractor, and location of their tractor
assets with in-transit cargo.
Recently, they have invested in similar technology for
trailers, permitting them to independently remotely monitor
the trailer location and its status – e.g. connected to a
tractor, doors open, doors closed, and volumetric load
percentage. Newly
developed systems permit the remote locking and unlocking of
the transportation container.
When theft is detected, the doors can be remotely
locked and the truck engine disabled.
Cargo Security is already beginning to benefit from
technology. Carriers,
working with law enforcement authorities, have used these
systems to make cargo theft arrests.
The maturity of the technology, coupled with a
reduction in cost, have contributed to “making the business
case” for the technology investment to monitor the status of
their assets - the truck and trailer.
Increased asset utilization offsets the need to
purchase additional equipment. Carriers are meeting the significant increase in customer
demands for more information on their cargo location and
estimated delivery time.
While these examples are critical to establishing the
maturity and cost of Cargo Security technology, many
challenges remain to be addressed.
One organization that has taken the lead in the United
States to advance cargo handling and Cargo Security is the
Cargo Handling Cooperative Program (CHCP).
The CHCP is a public-private partnership sponsored by
the U. S. Department of Transportations’ Maritime
Administration. CHCP
members include ocean and rail carriers, port authorities,
terminal operators, trucking companies, asset lessors, and
industry associates. The
CHCP is actively working on projects to apply technology to
the movement of freight, including Cargo Security, in
cooperation with the U. S. Department of Defense
Transportation Command (US TRANSCOM) and the Center for the
Commercial Deployment of Transportation Technologies (CCDoTT).
The container and the chassis represent a unique
challenge. There
are physical and operational challenges for the chassis.
Chassis are often stacked for efficient storage on the
terminal. Stacking can damage RFID tags as well as the new remote
monitoring system installations.
Sometimes chassis are not returned to the carrier or
lessor within the agreed time period thus increasing asset
operating costs. The
approximately 750,000 chassis in the U. S. are an important
part of the container transportation system – both on and
off the terminal.
Projects are underway to investigate and test technology to remotely
monitor the chassis and container location and status. Emerging technology will permit the remote reporting of the
safety and status information on the chassis such as tire
pressures, brake system status, lights, geographical location,
generator set performance, and container Cargo Security – specifically
seal integrity. Communicating
this information to the carrier will make a significant
contribution to improved Cargo Security and improve the
utilization of cargo movement assets.
As previously noted, some of this technology is currently
operational on trailers.
Electronic cargo seals are currently being tested on
“in bond” containers transiting the Northwest Corridor
into Canada. This
technology, whether in the form of disposable or re-useable
seals is viewed as a critical part of insuring the security of
the cargo shipped in containers.
Knowledge of the containers’ location as well as
the seal integrity are vital pieces of information that can
contribute to increased Cargo Security as well as responding
to increased demands for the location, safety and delivery
time for cargo that is in-route to or that has departed the
carrier’s terminal.
Technology is the response to the long-standing need
for off-terminal information.
The long-term technology vision must address
improvements in imported container Cargo Security.
One concept is to require pre-inspection at terminals
and ports that export containers to the U. S.
The container would by imaged at the overseas port with
non-intrusive technology similar to the Gamma Ray Imaging
System currently being used at the land border crossings into
the U. S. from Mexico. Customs
would pre-screen the image and compare it with a Gamma Ray
Image made upon entry into the U. S.
Much of the processing could be automated through the
application of image change detection software including the
special U. S. Customs container examination techniques.
While costly, this technology coupled with the
electronic container seal integrity could provide major
advances in Cargo Security especially the knowledge that the
container has been tampered with prior to its entry into the
U. S.
Hazardous cargo shipments also present challenges.
The technology responses could employ biometric
information of the authorized driver combined with the
technology previously described for remote monitoring of the
location of the tractor, chassis or trailer.
Systems could track the location and status of the
hazardous cargo to determine if the driver is straying from
the “authorized route”.
This information, in addition to an emergency alarm
triggered by a hijacked driver, could immediately provide
critical location and hazardous cargo identification
information to law enforcement authorities.
The current CHCP program, in partnership with CCDoTT and U. S.
TRANSCOM is addressing many of these challenges.
The goal is to evaluate existing technology including
adapting it to meet Cargo Security, chassis and container
monitoring and location requirements.
Operational tests utilizing CHCP members’ equipment
are planned to evaluate available technologies and systems.
Requirements not met will be documented for future
research projects. The
CHCP will describe and quantify the benefits and costs so its
members can evaluate their Cargo Security requirements and
make their individual business case decisions.
The potential benefits are major in meeting the
increasing demands of both the private and government sectors. |