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RFID Contains Solution to Chinese Shipping Problems

China International Marine Containers recently launched an RFID pilot to track containers from its factory to the storage yard.
By Jill Gambon
Nov 06, 2006For China International Marine Containers (CIMC), a leading worldwide supplier of containers to the shipping industry, tracking its products is no small task. Each year, the $4 billion company manufactures more than 1 million dry-freight containers for customers across the globe. It operates 20 factories and stores the containers at 40 different yards throughout China before delivering them to clients.

For years, CIMC's inventory-tracking process was very labor-intensive. Workers used a mix of optical character recognition (OCR) technology, paper, pens, walkie-talkies and even binoculars in the container yards, to determine its products' whereabouts. This system caused inefficiencies and waste—in fact, the company often did not know the exact location of its containers, and in some cases, it lost them or delivered the wrong ones to its customers. In an effort to cut costs and improve operations, CIMC launched an RFID pilot project last year to track containers from the factory to the storage yard.

Since the pilot was launched in early 2005, 1,500 containers have been equipped with the passive tags for location-tracking purposes.

CIMC's goals were "to speed up the efficiency of global supply-chain management and reduce the cost of asset management," says Shouqin Zhou, director of CIMC's Smart and Security Research Center. Aware of the potential benefits RFID offered, Zhou was convinced the technology could help lower costs and provide better reliability than OCR.
CIMC worked with Laudis Systems, a software firm in Edison, N.J., specializing in RFID systems, to devise a real-time locating system (RTLS) pilot for one container yard in Shenzhen, China. CIMC opted for a low-risk approach, integrating RFID into its existing shipping and storage processes so the technology could be tested without disrupting operations. While many RTLSs usually involve active tags, CIMC's system uses passive tags because the price of active tags is prohibitive, the company says. The way the pilot was designed, the passive tags can achieve benefits on par with an active system at a fraction of the price, says Yuhong Zhu, chief technology officer of Laudis Systems, who was involved in the CIMC pilot. The passive tags cost $6 to $7 each, compared to $50 per active tag.

Since the pilot was launched in early 2005, 1,500 containers have been equipped with the passive tags for location-tracking purposes. Much of the work of accounting for the containers has been automated, with interrogators installed at the factory and storage-yard gates and on the forklifts used in the storage yard. Location information is transmitted in real time from a code division multiple access (CDMA) network to CIMC's existing yard-management system. This allows CIMC to know where its containers are at all times. "It's a major labor-saving tool for the company," says Frank Ritota, Laudis' CEO.

That's a far cry from CIMC's traditional method of tracking containers. Information about whether specific containers had left the factory grounds and were en route to the storage yard was hard to come by. The company's products are all made-to-order, and while they may look similar, each has its own unique features and specific weights, depending on customer requirements. As such, keeping track of each one is critical. Before the RFID pilot, when the containers were ready for transportation from the factory to the storage yard, truck drivers had to check out at the gate with piles of paperwork. This created backups, with drivers forced to wait in line until their papers were processed.

Once the containers were unloaded at the storage yard, things weren't any easier. For starters, the yard where the pilot was conducted spans more than 37 acres and can hold up to 30,000 containers. "It's like a little city," Ritota says. Forklift operators had to write down the location of the containers, which increased the likelihood of errors and slowed down the availability of location information.

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