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For Small to Midsize Container Companies, RFID Makes Sense

Based on a study involving a real-life logistics provider, the average payback period for an EPC Gen 2 RFID implementation is between 12 and 24 months.
By Melanie Hippler
Investment Cost for a Pilot Project
RFID has been gaining greater relevancies in the past few years, and is expected to be deployed in many terminals, factories and container yard gates within the next five years. For a pilot project, therefore, the following assumptions have been made:

1) Factories shall have readers installed on their entrance and exit gates. As the shipper, customer and consignee all have an interest in tracking and tracing their cargo loaded in the container, Company X and other 3PL suppliers would be allowed to use the factories' RFID equipment (such as readers) and systems. Hence, it would be a win-win scenario. In the event that one party has no readers installed, a handheld interrogator can be employed.

2) Port terminals have made heavy investment in the traceability of containers at their terminals, with readers placed on the main entrance and exit gates, as well as on quay cranes.

3) Not many container yards have the amount of money needed to invest in RFID technology. Therefore, this project assumes Company X shall have to cover all of the investment costs for placing a reader at the container yard's entrance and exit gates.

4) Further analysis is necessary concerning the RF frequencies used on the different continents to which the container will be transported. Due to a lack of information, the assumption is made that container tags shall be readable by the devices in those nations.

5) In the analysis below, the following issues have not been considered: bundled shipments (several containers are loaded and shipped together, thus reducing the total time needed to organize the transportation); the container yard does not follow the specification, and an incorrect container (still dirty with previous product, and damaged from a prior trip) is picked up by the hauler and driven to the loading facility; and losing a container at the container yard or at the port or barge terminal.

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