RFID success signals

Radio frequency identification technology has been around for years, but it has never lived up to its hype.

As implementation costs go down, however, there are specific applications, including asset tracking and supply chain automation, where RFID technology makes sense, says Rebecca Wettemann, an analyst at Nucleus Research.

"There was a lot of excitement about RFID for a while, and then people took a step back and asked, 'Is this really ready for prime time?' in terms of being cost-effective and in terms of being a better alternative to the bar-code and scanning systems," says Wettemann. "As tags get cheaper and the infrastructure to manage all of that data gets cheaper, there are other areas where RFID makes sense, including in the retail environment."

Companies are also implementing RFID technology to track assets within their own walls or in their parking lots, says Louis Sirico, an analyst and chief technology officer at RFID Switchboard, a Web portal that offers companies information about deploying RFID technology.

Sirico, too, sees RFID becoming much more ubiquitous as costs decrease.

"I see RFID tags being built into assets; so it's not a question of tagging something, but there's already a tag built into the product," Sirico says. "I see that already starting to happen. The primary barrier is cost, but as volumes increase, more and more companies will start using it because its benefits can lead to ROI. As demand increases, the products are going to become better and less expensive."

Costs for passive RFID tags have dropped dramatically, Sirico says. In 2000, passive RFID labels cost about US$1 each; now they go for less than 20 cents. The price of active tags has also decreased, from US$75-$100 to US$15-US$20, he says.

"The ability to find something on that 300-acre site is critical to our ability to service our customers because ... they want to know which container is in which parking stall out of the 8,000 or 9,000 parking stalls we have," says Nathaniel Seeds, director of port operations at APL.

The WhereNet technology replaces tracking equipment that had been used to scan each row of containers since the facility opened in 1997, Seeds says. Using the old system, finding a container could take upward of three hours, he says.

"I describe that inventory system as 'Park it now, find it later,'" Seeds says. "But over time, as the business grew, it didn't respond quickly enough to the new pace of the operation."

So APL began to explore alternatives, including GPS-based technology, motion-sensor-based systems and RFID, ultimately settling on the WhereNet system because it enables APL to immediately locate its inventory in real time and is cost-effective -- although Seeds wouldn't provide specific figures.

APL affixed WhereTag transmitters to more than 30,000 chassis, which store the containers, and to its entire inventory of terminal trucks. A local infrastructure of more than 80 wireless WhereLAN locating access points and WherePort devices at 12 entry and eight exit gates enables the system to automatically recognize when a chassis is entering or leaving the facility, Seeds says. The system provides real-time tracking of each on-site chassis and automatically updates the chassis location when it is parked, he says.

Now, when a container is unloaded from an APL ship and placed onto a chassis, a clerk ensures that the IDs of the container, chassis and yard tractor are entered into APL's terminal operating software. A yard tractor driver then transports the container and chassis into the yard. The yard tractor is equipped with sensors, and when it disconnects from the chassis, the location of the parking stall where the associated container has been dropped off is immediately recorded.

"WhereNet's deployment at APL's terminal in L.A. was the first deployment at a marine terminal anywhere in world, so we were sort of building this as we went," Seeds says.

Even so, implementation was pretty painless, he adds. APL knew that the core technology -- active tags and the DTOA (differential time of arrival) location algorithms -- would be functional, but WhereNet had to develop some new location algorithms specifically for the APL site, Seeds says.

"So there were some engineering issues from WhereNet's side -- like how to trigger the sensors on the tractors and how to write the algorithms so we would locate a chassis that was moved from one space to another by something other than a sensor-equipped yard tractor," Seeds says.

Although the project has yielded a return on investment, Seeds says the purpose of the implementation was to improve customer service.

"Our focus is on the customer," he says. "We wanted to make our customers' experience as good as it can possibly be. We didn't do this to cut costs, but to improve the efficiency of the operation. We would have still done it had we not saved a dime."

Although it would be better to put the tags on the containers rather than on the chassis, that probably won't be happening very soon because there is so much disagreement in the industry about the best technology to use, says Robert Foppiani, an RFID analyst at ABI Research.

"So what WhereNet is doing is tracking the chassis that hold the containers, which means it's the handling equipment that's being tracked, not the equipment itself," Foppiani says. "So the whole issue is, they want to move these containers as little as possible because the more they move them, the more time is wasted and the more it costs. So being able to monitor [the chassis] at all times and what containers they're handling helps improve efficiencies at the ports and terminals."

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