Step Up In SecurityStep Up In Security

In the second phase, already under way but with no specific end date, Smart and Secure Tradelanes members and Savi have worked to expand the program's security initiatives beyond shippers to include manufacturers, trucking companies, and railroads. Another of the initiative's phase-two goals is to improve the 24-hour electronic-manifest information-processing technology used by U.S. and international customs authorities. A third goal is to combine technologies such as GPS tracking, chemical-biological-radiological sensor devices, and intrusion-detection systems to provide multiple layers of security.

Hutchison is looking at using more-sophisticated sensor technology that would allow smart sensors to be placed inside containers, not just near a container's door. Since June, Hutchison has used Savi's Sentinel RFID sensors at the company's facilities at the Europe Combined Terminals in Rotterdam, Hong Kong International Terminals, Port of Felixstowe in the United Kingdom, and Yantian International Container Terminals in South China. The sensors generate E-mailed alerts about changes in light, humidity, or pressure that readers pick up, which could indicate that a nearby container has been tampered with. Each facility has about 30 RFID readers scattered throughout its yards, cranes, and gates.

However, much more work needs to be done, Gilbert warns. Ultimately, his goal is to have an RFID sensor placed on every container that passes through Hutchison's facilities. "We're nowhere near that kind of solution when it comes to the global supply chain," he says.

Hutchison's research into new ways of securing containers goes beyond what Smart and Secure Tradelanes is doing. The company has taken it upon itself to also deploy truck-mounted gamma-ray imaging systems from Science Applications International Corp. to inspect unintrusively the contents of trucks, containers, and cargo and passenger vehicles for explosive devices and contraband at its Hong Kong facilities. If the rollout proves successful in Hong Kong, the world's busiest port, the technology is likely to be deployed at Hutchison's other facilities.

As part of Operation Safe Commerce, the port of Seattle/Tacoma also has tested SAIC's gamma-ray imaging technology. One of the challenges remains combining this technology with RFID tags that can be placed on containers to record any seal-tampering; the tags can be damaged by the radiation emitted by SAIC's system, Hilden says. Other factors that can affect RFID tags on containers include salt water.

On the plus side, there seems to be consensus forming on a global RFID standard. Governments and businesses are beginning to lean toward tags that can transmit information over long distances at 434 MHz, according to an August report from ARC Advisory Group. According to the report, the U.S. Federal Communications Commission, European Union radio regulations, and China's State Radio Regulatory Commission support 434 MHz as a standard. Japan and South Korea have announced their intention to support the standard.

Increasing security will add new costs to the supply chain. Hutchison already is passing along the cost for enhancements in physical security at some of its facilities to the shippers that use those facilities. The company charges U.K. clients about 10 pounds per container and its other European clients about 15 euros. New security technologies will add to these fees, although Gilbert doesn't have specific numbers yet.

"Nobody likes the extra costs, but that's the reality of where we are now," Gilbert says. "The world's global supply chain will stop if a bomb goes off in a container."

That's something companies can't afford to have happen. "Our greatest vulnerability is the shutdown of the supply chain in an emergency," Ron Bone, senior VP of supply-chain solutions for pharmaceuticals distributor McKesson Corp., said at an October global supply-chain panel in New York hosted by technology provider Unisys Corp. "We're a just-in-time business, so all the work we do is almost in real time." Often, as in the wake of the Sept. 11 attacks, McKesson is called upon to be a supplier of medical products at the scene of a disaster, which puts additional pressure on its supply-chain logistics.

Ultimately, what most players in the shipping industry really want is to get more than security out of their security projects. They want to invest in technology that will increase revenue, PB Ports' Sewell says. For now, that's easier said than done, he adds, since most of the ports and shippers don't yet have the IT infrastructures--the server and networking capacity, in particular--in place to manage and finesse the large volumes of data that a comprehensive RFID deployment would yield.

It's going to take a lot more time and focus to put the right technology in place, Sewell says. And despite the freeing up of some funds, "there's no consensus as to how it will be paid for."