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ODIN Forecasts Fast ROI for RFID-based Baggage Handling
Currently, most airline baggage is tracked using bar-coded labels, though about a dozen airports are utilizing RFID tags on their bags, reading them before they are loaded onto aircraft and again when they are unloaded. Industry-wide, Sweeney says, the average rate of mishandled baggage is approximately 10 percent, with about 10 percent of that mishandling being the result of failed bar-code scans. Mishandled bags are estimated to cost the industry between $90 and $100 apiece. On the other hand, he notes, this study demonstrates that if bags were tagged with RFID tags, they could be tracked at a rate of 100 percent.
One important concern for airlines and airports is whether a tag can be read globally. Therefore, the researchers tested the tags' range, ensuring they could be read at the UHF RFID band approved in Europe (865-869 MHz), the United States (902-928 MHz) and Japan (952-954 MHz).
"I was really surprised to see the RFID tags work so well on metal," Sweeney says. With bar-code labels reading at a rate of just under 90 percent, he indicates, he initially expected the metallic baggage to bring the RFID tags down to a similar rate—however, they were read 100 percent of the time. "I wasn't sure we'd improve on those [bar-code] read rates, so the fact that we got 100 percent was really noteworthy."
According to Sweeney, ODIN calculated a return on investment based on an average infrastructure investment of approximately $200,000, though that figure could change based on the size of the deployment. In carrying out its ROI analysis, he says, the firm reduced the expense of mishandled luggage from about $100 to $50, in order to gain a more conservative figure. ODIN concluded that the use of RFID would pay for itself within 18 months, based on the mishandling rate that would be reduced by employing RFID.
"I would anticipate a lot more airports will start looking for stimulus money," Sweeney says, which would help with funding and RFID deployment. The use of RFID to track baggage would not only reduce the operational costs of airlines and airports, but also help provide better service to passengers.
The "RFID Baggage Tag Benchmark" report is available online at a cost of $995.
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One important concern for airlines and airports is whether a tag can be read globally. Therefore, the researchers tested the tags' range, ensuring they could be read at the UHF RFID band approved in Europe (865-869 MHz), the United States (902-928 MHz) and Japan (952-954 MHz).
"I was really surprised to see the RFID tags work so well on metal," Sweeney says. With bar-code labels reading at a rate of just under 90 percent, he indicates, he initially expected the metallic baggage to bring the RFID tags down to a similar rate—however, they were read 100 percent of the time. "I wasn't sure we'd improve on those [bar-code] read rates, so the fact that we got 100 percent was really noteworthy."
According to Sweeney, ODIN calculated a return on investment based on an average infrastructure investment of approximately $200,000, though that figure could change based on the size of the deployment. In carrying out its ROI analysis, he says, the firm reduced the expense of mishandled luggage from about $100 to $50, in order to gain a more conservative figure. ODIN concluded that the use of RFID would pay for itself within 18 months, based on the mishandling rate that would be reduced by employing RFID.
The "RFID Baggage Tag Benchmark" report is available online at a cost of $995.
