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Baggage Tagging Is a No-Brainer

RFID has the potential to make a $700 million dent in a major problem for airlines and travelers—mishandled bags.
By Mark Roberti
Oct 09, 2006My brother-in-law's business partner, Madeline, recently flew the remains of her deceased father home from the United States to Hungary, where he would rest with his parents. Madeline was traveling with her two children, and with the recent restrictions on handbags, she decided to put the urn with her father's ashes in her luggage and check the suitcase. Unfortunately, her bags went missing, and the airline told her the bags—and remains—were unlikely to ever be recovered.

Madeline's case is extreme, and she probably shares some of the blame for her father's remains forever remaining in limbo in some airport storage facility. More common is the case of Cinzia, who flew from Italy to attend our recent Industry Summits event in Chicago. She showed up for a meeting in jeans, apologizing for her casual appearance. "The airline lost my luggage," she said. "I hope they find it because I'm staying in the United States for a month."

Lost luggage always ruins a trip and turns customers off airlines. It also costs airlines a lot of money. SITA, a cooperative venture owned by the airlines industry, estimates that 3 billion bags were checked worldwide in 2005, approximately one percent (30 million) of which were mishandled. That doesn't necessarily mean lost, mind you. It means they might not have arrived with the customers and might have been delivered later. But whether the bags are lost or simply delayed, airlines have to spend a lot of money, time and labor tracking down the bags and getting them back to their owners.

Can RFID solve this problem? Not completely. Speaking at RFID Journal's Aerospace Summit, Andrew Price, RFID project manager for the International Air Transport Association (IATA), laid out the reasons for mishandled bags. These include errors at check in, delays in moving bags from an aircraft to the baggage-handling system, missed transfers due to a delayed inbound flight, missing baggage sortation messages and poor bar-code read rates.

RFID is not going to prevent a bag from going astray when an inbound flight is too late to get the bag on a connecting flight, but IATA has done some studies of the business case and believes RFID could save airlines $700 million annually by improving read rates and improving baggage-sortation messaging. Price said that in 1IATA tests, UHF RFID tags were read 98 percent to 100 percent of the time. Bar-code read rates can be as low as 67 percent on bags traveling down a conveyor in random orientation. That's because bar codes can be torn, soiled or covered by luggage ID tags.

A savings of $700 million annually is a lot of money. If tags cost 10 cents apiece, the airlines would need to spend about $300 million annually for 3 billion bag tags. The airlines would have to spend some money to install the reader infrastructure and develop a global system for tracking bags and sharing information about the location of bags. But the back-of-the-envelope numbers suggest such a system would deliver a payback to the airlines within two years. And the soft benefit of customer satisfaction would be incalculable. Imagine never having to worry about losing all your clothes when you fly—or worse, the remains of a loved one.

Mark Roberti is the founder and editor of RFID Journal. If you would like to comment on this article, click on the link below.
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