Government Mandates Said Key to Electronic Container Tracking's Success

Customs agency stepping up support for C-TPAT, adding new security tier that offers immediate turnaround for shippers

Oyster Bay, NY — February 3, 2005 — Continuing U.S. government programs will be the main impetus for electronic container tracking as the federal agencies step up efforts to improve port security, according to a new study by market intelligence firm ABI Research.

The U.S. Customs and Border Protection (CBP) agency has recently announced plans to increase the level of support for the Customs-Trade Partnership Against Terrorism (C-TPAT), which grants shippers meeting security guidelines expedited processing at U.S. ports.

CBP is taking C-TPAT a step further by adding another tier of security, dubbed "C-TPAT Plus." This new program offers shippers immediate turnaround with no inspection upon arrival, in exchange for implementing more stringent requirements. These new requirements include technologies that can monitor tampering from the point of origin and provide inspectors with a record of events.

"This heightened level of support will boost electronic tracking of incoming containers," notes David Schrier, an ABI analyst. "But a government mandate, rather than voluntary provisions, will be the only way the industry can realize significant volumes of electronically-tracked containers in the near future."

The new ABI Research study, "Container Security and Tracking", examines evolving solutions and technologies for global electronic container tracking, including radio frequency identification (RFID), GPS, cellular, satellite, Ultrawideband, Bluetooth, barcode and optical character recognition.

According to the study, myriad technologies have been developed for container tracking, but none of them have been commercially implemented to any great extent. "The mass market devices will be those that can provide basic electronic supply chain management at a reasonable cost while working reliably within the port environment," Schrier adds.

While RFID-based solutions have met requirements for military container tracking, the Wal-Mart and Department of Defense (DoD) mandates have been slow to take form. This created a lag in the RFID industry as a whole and slowed the adoption of container tracking across other industries. However, the ABI study finds that there will be a significant market for RFID-based commercial container tracking.

For a contrary view of the future of the RFID market, see the article "The O'RFID Factor: A 'No Spin' Look at Where Radio Frequency Identification Is Headed," in the October/November 2004 issue of Supply & Demand Chain Executive.

For more information on trends relating to radio frequency identification, follow this link for an extensive listing of articles, featuring the latest research findings on the RFID, including adoption, return on investment and barriers to implementation.

For a look at how Tyco Fire & Security is tackling trade compliance issues in its global supply chain, see "Turning Global Trade Compliance Into a Competitive Advantage," in the August/September 2004 issue of Supply & Demand Chain Executive.

For more information on the global supply chain, with a focus on security issues, see "Building the Secure Supply Chain," the Net Best Thing article in the June/July 2003 issue of iSource Business (now Supply & Demand Chain Executive).

More research from ABI Research.