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Mærsk and IBM take a new step to track boxes.
Photo: Port of Gothenburg

Mærsk and IBM in liaison
to build RFID standard
Identifying the real wave in Radio Frequency Identification (RFID) for the maritime industry has been tough until now. Early adopters have had a plethora of choices and methodologies from the tags at the business end, through the middleware to the integration of data into their supply chain management processes. Freight forwarders and Third party logistics companies (3PLs) in particular have looked anxiously at the variety of solutions and hoped for an early form up on one or two standards. But now IBM and Maersk Logistics have teamed up to produce their own real-time solution, which trials on Maersk vessels later this year. Has the RFID gold standard arrived?

“When Big Blue and the world’s biggest box mover get together to do something, you have to pay attention”, comments an industry analyst, “Maersk is by no means averse to new technology but it is not given to rushing in first. It would seem to have watched the RFID market developing over the last two or three years and only now decided to join in, typically for it, on its own terms rather than anyone else’s. If the thing they are doing with IBM works, it is likely to leave a lot of other container and cargo tracking solutions dead in the water or forced to relocate around the Maersk/IBM solution”.

The genesis of this initiative however lies in IBM’s December 2004 acquisition of Maersk Data, which gave the computer giant extra savvy in the transportation and logistics industry, as part of its aggressive drive into what it calls Business Performance Transformation. The RFID solution, originally announced for trials this March but now delayed, is part of IBM’s Intelligent Trade Lane initiative. It combines an intelligent real-time tracking device named a TREC (Tamper-Resistant Embedded Controllers) fitted to a container with a fully integrated network that collects and presents all the data sent from the TREC.

“We felt that there was not a single solution that combined the technology on the container with the global infrastructure”, says Tony Barsham, Travel & Transport Industry Lead/Partner, IBM Business Consulting Services, “That was why we got together with Maersk to develop the Intelligent Trade Lane. There are active technologies out there and there is a number of strong players in passive tag and a number in active tag. Then you have the device makers who understand how to build devices that communicate with global positioning systems. What we have done is to bring it all together and put a global infrastructure around it, which is obviously an IBM strength. We can deliver the whole thing, whereas at the moment it is all bits and points of solutions”.

It is reported that TREC devices with eight sensors are about the size of a cigar box and are secured on the side of a container. They communicate real-time to a global IT network via wireless networks, GPRS-based mobile devices or Iridium’s satellite network.

	TREC devices will keep track of the box along the whole supply chain. Photo: Bent Mikkelsen

Clever TREC devices
As Barsham explains, the TREC devices not only report on the status of the container itself but they are also able to interrogate the passive RFID tags on palettes within the container and even the tags on individual products. If for instance some of the cargo needed very specific temperature control, the monitoring technology would be on the passive tag and the data picked up and sent on by the TREC.

Barsham declines to say how much the two companies are investing in developing and testing the TREC and the global infrastructure of the Intelligent Trade Lane concept, averring only that the sum is “significant”. He confirms that initially the resulting product will be used only by Maersk. “I think other shippers are sitting up and taking notice of this. There have been some discussions, but we are very clear that we are developing it with Maersk. The people who are most interested are the freight forwarders and the 3PLs”.

Maersk keeps control
Since a significant percentage of Maersk’s container carrying capacity is sold to these businesses, it would not make sense for Maersk to keep a proprietary hold on the product. It is also clear that IBM is hoping to build a standard which will be bought by the industry.

“There is a joint development agreement with Maersk”, explains Barsham, “that has certain conditions within it, which certainly mean that we are rolling it out with Maersk first and we will develop it with Maersk. Then we will roll it out to other clients as it becomes successful”.

One of the main drivers for all RFID implementations has been post 9/11-security. US customs have led the push for better visibility of containerised cargo. This makes it curious therefore that in testing the Intelligent Trade Lane, Maersk and IBM are working with an unnamed, Asian customs authority, believed to be Hong Kong, Singapore or China.

US Customs involved?
Barsham insists that US Customs have been involved in the development, but points out that the major trade flows are in Asia and therefore working with local customs makes sense. Nevertheless, given that in 2005 the US received over ten million containers and are at the forefront of security concerns, a more active American involvement might have been expected. It may be however that the real US Customs input will come with the next stage of the Intelligent Trade Lane product – the use of the TREC and the passive tags within a container, to produce an accurate filing of goods arriving at a port.

“The system could produce an active manifest”, admits Barsham, “and that is exactly where we are going with it, but we are not discussing it at the moment with US Customs”.

No rollout date yet
There is as yet no planned rollout date and no indication on pricing.
“The key things at the moment are getting the technology right and proving the business case”, says Barsham, “We don’t think there is any doubt about the business case, but we are going to prove it anyway”.

Maersk, beside the security considerations, had wanted to respond to growing demands from its customers for better visibility of the supply chain.
“The key point is the value of the Intelligent Trade Lane to customers”, says Basham, “Pricing, which will come out towards the middle to the back end of the year will stem from that value equation”.

// Nigel Ash