This article was originally published by RFID Update.
August 30, 2006—Intelligent Global Pooling Systems (iGPS), a startup that plans to offer an RFID-tagged all-plastic pallet pool, has selected Xterprise as its RFID solution provider. Xterprise will work with iGPS’ manufacturing partners to embed RFID tags in the pallets, and will help design business applications for the company’s pallet tracking system.
Orlando, Florida-based iGPS was launched in March by Pegasus Capital Advisors and Bob Moore, former CEO of pallet provider CHEP International.
Under the agreement, Xterprise will use both its RFID Asset Management application and its AnalytiX RFID business intelligence application for iGPS’ plastic pallet pool. Xterprise will be responsible for RFID-centric software applications, RFID best practices and RFID infrastructure integration.
Xterprise will also provide Electronic Product Code (EPC) RFID tags based on the EPC Reusable Transport Item tag data format. EPCglobal is expected to utilize the Global Returnable Asset Identifier (GRAI) protocol, an existing GS1 format, for this data standard. Initially, Xterprise will supply 915 MHz Gen2 tags and readers from Alien Technology, but the company will also consider sourcing from other suppliers.
“We’re leveraging the source tagging experience we’ve gained working with Wal-Mart customers to develop a solution for the pallet manufacturer,” says Dean Frew, president and CEO of Xterprise. “We’ll give them an extremely granular view of how their business is running.”
In a pooling system, multiple companies lease pallets (or other types of shipping containers) from a provider like CHEP or iGPS instead of buying them. Since the pallet provider handles management and maintenance of the pallet fleet, customers are relieved of both the cost and administrative headaches of coordinating and purchasing the pallets.
iGPS will manage a pool of 48″ x 40″ plastic pallets for grocery, beverage, home improvement, pharmaceutical and consumer electronics customers. Internally, the RFID tags will be used to track the pallets throughout the shipping and return process to prevent loss and theft — costly problems in the pallet industry. If a pallet is not read for a certain number of days, an alert will be sent to iGPS’ asset protection staff to investigate. Customers will also be able to use the tracking data in their own supply chains. The pallets could be used to help generate advanced shipping notices, for example, or to aid in recalls.
In early August, iGPS announced that Ryder System would provide it supply chain and reverse logistics services throughout North America. Ryder will also develop and manage a web-enabled transportation and procurement solution for the company. Xterprise’s applications will be integrated with the Ryder systems.
Although most companies currently use cheaper wood pallets, demand for reusable plastic pallets could be spurred by a number of recent events. Because of cross-contamination fears, wood pallets used for shipping meat and other food products are often scrapped after one use because they can’t be sanitized. Last year, the U.S. adopted the ISPM-15 wood packaging standard developed by the International Plant Protection Convention (IPPC) that requires all imported wood pallets to be fumigated or heat treated to prevent the spread of invasive insects. Any pallets not marked as treated will be stopped at the border.
“Cross-contamination of pallets with things like bird flu and mad cow really has people concerned,” says Moore. “Once a wood pallet is used for meat, nobody else wants to touch it. We can sanitize a resin-based [plastic] pallet, so we don’t have that issue.”
Moore, who turned CHEP into a multibillion-dollar market leader, added that plastic pallets are also 30 percent lighter than wood, which can provide big savings on freight costs.
Xterprise worked closely with pallet manufacturer Schoeller Arca Systems to design cavities in the pallets for the RFID tags. The pallets are designed with a ten-year lifespan. Frew says there is a rework process in place in case the tag fails before the pallet is recycled, but noted that “we’ve done a lot of work to make sure that doesn’t happen.”
In addition to Schoeller Arca, iGPS plans to work with several other pallet manufacturers. Initially, the company will manufacture six million pallets starting in September. “We have a tightly defined spec sheet, and we’ve given it to twenty different manufacturers,” says Moore. “We’re working closely with three now that meet our criteria.”
According to Moore, iGPS and Xterprise hope to eventually develop pallets with temperature or shock sensors integrated with the RFID tags for specialty applications.
“We have one major retailer who is preparing for pilot testing of the pallets, and a major beverage manufacturer preparing to test them as well,” says Moore. “Right now demand is exceeding what we’ll be able to supply at first, which is a good problem to have from our perspective. Demand is really healthy, and we see this as the beginning of the move away from wood pallets.”