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Global Visibilty Empowers Logistics Customers

Logistics providers—the link between manufacturers and retailers—are figuring out how to use RFID to share data among trucking, shipping and air cargo carriers. The value to customers is being able to use real-time information to make smart business decisions.
By Elizabeth Wasserman
Aug 01, 2008—In an unprecedented pilot sponsored by EPCglobal's Transportation and Logistics Services Industry Action Group, 37 companies and organizations—including worldwide logistics providers, technology vendors and government agencies—worked together to use RFID to track goods from the Port of Shanghai to the Port of Los Angeles, one of the busiest trade lanes in the world today. The pilot, which concluded in March, showed that RFID could provide end-to-end visibility into the whereabouts of tires, computers, agricultural machinery and other goods shipped from factories in China to distribution centers in the United States.

Key to the pilot's success were the logistics providers, including DHL, Maersk Line and NYK Line, which stand between the manufacturers and the retailers. It was an achievement that logistics companies could only imagine in 2005, when RFID Journal last wrote in depth about the use of RFID in the logistics industry.

Logistics providers—the link between manufacturers and retailers—are figuring out how to use RFID to share data among trucking, shipping and air cargo carriers.
Back then, logistics companies were using RFID internally to track assets, such as shipping containers and freight cars, and they were RFID-tagging goods for manufacturers that had to meet retailer mandates. Logistics companies knew they'd play a significant role in the use of RFID to track goods through the global supply chain, but many challenges stood in the way. In particular, how would logistics companies, which maintain proprietary data systems, share and secure data as goods changed hands from trucking companies to sea or air carriers to third-party logistics companies, which unpack and label goods for shipment to stores?

It was a difficult question, because the answer—EPC (Electronic Product Code) Information Services—was still on the drawing board. EPCIS, which was ratified in April 2007 by EPCglobal, is a standard for sharing EPC-related information among trading partners securely and in real time. The EPCIS databases sit on top of companies' proprietary systems, without replacing them. Logistics companies can enter into EPCIS only the "events"—departure from a factory, arrival at a port, delivery to a warehouse—they want to share with other trading partners. At the same time, more detailed or sensitive data—names of other customers or location of ships at sea—can be kept private.

"Before there was an in-depth understanding of how this could work, there were some concerns about it," says Gay Whitney, EPCglobal's standards director. That began to change in 2006, when EPCglobal established its Transportation and Logistics Services Industry Action Group (TLS IAG) to develop standards for the industry. "They worked together to understand where [RFID] could best be utilized in a standardized way—and in a universal way—to benefit the most participants in the supply chain," Whitney says.
The ability to use RFID to track international shipments promises to open up new business opportunities for logistics companies and their manufacturing and retail customers, but several challenges still need to be overcome before that can happen. Open-loop deployment in logistics—across networks and with multiple trading partners—will be feasible only when a critical mass of industry players deploys RFID, along with their customers in aerospace, automotive, chemicals, consumer electronics, pharmaceuticals, retail and other sectors.

"In the logistics industry, there are many links in the chain that have to be passed," says Doug Olson, general manager of systems and process for Schneider Logistics, based in Green Bay, Wis., and a TLS IAG co-chair. Schneider, which has been using GPS technology to track the real-time location of all its trucks and containers since 1983, participated in the pilot by reading RFID tags as its trucks picked up shipments in Los Angeles and delivered them to warehouses.

In addition, "we have to collaborate on standards to make it work," Olson says. The TLS IAG has developed RFID tag requirements for transportation and logistics. The passive Conveyance Asset Tag (CAT) and the active XCAT version are optimized to perform well with the industry's often long read ranges and sometimes harsh and/or metallic port environments. But standards work still remains, such as developing hardware and software interfaces.

Meanwhile, logistics companies are deploying RFID in closed-loop situations, where they have control over tagging, reading and environments. They're using RFID internally and offering value-added services to customers to maintain their competitive edge.
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