45150 CARGO AND VEHICLE TRACKING June 2005 Cargo and vehicle tracking is the ability to trace goods, their containers, and their conveyances from the point of origin to their destination. Tracking is in- creasingly associated with information transfer using smarter tools such as radio frequency identification devices and global positioning systems. s et The Needs of Today's Supply Chain able aspect of the supply chain. To ade- quately provide security, the cargo and No Recent developments in the realm of inter- vehicle must be able to be tracked inde- national trade have increased the need for pendently, but the tracking mechanism heightened security to prevent multi- needs the capability to associate the two frontal attacks. The dual missions of pro- data points. tecting national security and collecting duties and taxes drive governments' inter- RFID Technology est in maintaining the integrity of the sup- ply chain. The interest of private compa- Radio frequency identification devices nies in just-in-time, reliable delivery, cost- (RFID) are low-cost tags that assist in the effective logistics, and maintaining the tracking of goods and vehicles. These de- integrity of goods leads to the develop- vices are placed on individual items and Explanatory ment of many tracking systems. can either be active, i.e., constantly emit- ting a radio frequency signal; or passive, Often overlooked as a supply chain vulner- i.e., only emitting a signal when queried ability is the movement of goods from the by an outside source. GFP manufacturer to the port or border cross- ing, or from the port to the distribution In order to track goods, readers (either center. Tracking represents an additional hand-held or fixed) need to be installed to layer of security to ensure goods reach track and record the numbers from the their destination in the same condition as RFID devices affixed to each product or they began their journey, though other lay- container. Installation of these readers, Group: ers must be put in place to achieve a more however, adds additional costs which comprehensive level of safety for vehicle would be assumed by the shipper or passed and cargo transit. along to the consumer/end user. Lost or resting cargo containers and vehi- RFID tags are limited in the number that Bank cles represent the point in the supply chain can be screened by each reader at one at which goods and conveyances are most time. For large numbers of loose goods, vulnerable. Some studies have indicated individually tagging each good is not an that 70 percent of senior executives are not efficient use of resources. Tagging the satisfied with their ability to track their unit containing these loose goods is a more World moving assets to ensure integrity and practical solution. RFID tags may not be safety. Tracking cargo and vehicles allows practical for all applications, including for advanced processing of information by tracking liquids and items wrapped in metal or foil, as these environments can The border and intelligence agencies and as- sists in defeating the vulnerabilities associ- create interference. ated with inland drayage, the most vulner- The RFID tags only serve as a tracking Benefits of Cargo and mechanism; they do not possess any ef- fying the cargo and conveyance through Vehicle Tracking fective security applications. To work an individual code and a fixed reader properly, specific frequencies will need and transmitting that information to a Public Private Sector Sector to be designated for RFID use only. central point. Government assistance and cooperation Increases secu- Port authorities is needed in order to prevent interference Benefits of Cargo and Vehicle rity by provid- and terminal with other existing devices and applica- Tracking Satellite Systems and ing information operators are GPS on the move- more capable of tions. ment of cargo knowing the Global Positioning System (GPS) track- throughout the inventory and While RFID development is progressing ing utilizes satellites to monitor fleets of international location of all rapidly, three issues could limit its vehicles or cargo containers, thereby trade environ- items in the yard spread in the near future. First, there is ment. at all times. an ongoing intellectual property dispute ensuring there are no unplanned stops and that a preplanned route is followed. Assists with the Maintains the regarding parts of the specifications re- Geostationary Earth Orbit (GEO) satel- customs clear- integrity of lated to commercializing the electronic lite systems use satellites that orbit the ance process. goods and the product code (EPC) technology. Sec- supply chain. ond, EPCGlobal, the nonprofit organiza- earth at the same speed of the earth's rotation, in order to continuously moni- Can help reduce Serves as a deter- tion charged with commercializing the the risk of ter- rent against theft EPC technology, and the International tor a particular area continuously. rorist attack by and pilferage, Standardization Organization (ISO) dif- These satellite mapping areas can be as hijacking a con- thereby reducing tainer or vehicle.costs. fer on the specification dealing with the large as North America or Australia, yet numbering systems to which RFID tags can identify individual containers and Improves the Provides effi- relate. Finally, many of the products vehicles. Networks of multiple satellites ability to moni- ciency through- being sold are not fully upgradeable to that sweep the globe and monitor activ- tor the flow of out the transport goods to and process. the next generation of RFID technology ity all over the world comprise Low from ports. that will be released shortly. Earth Orbit (LEO) systems. This cate- Creates a more Improves com- Authentication/Legitimization of gory includes voice-capable "big efficient system munication di- Customs Procedures LEO's" and lower cost, data-only sys- that saves time rectly with cus- tems dubbed "little LEO's." Satellite and money, tomers and en- Tracking can help verify the identity and systems are only viable options for while improving ables more exact contents of a vehicle or cargo container, tracking when the transmitter located on the quality of time estimates. cargo and vehi- and its use--coupled with risk manage- the vehicle or cargo has a direct line of cle screening. ment techniques--makes some of the sight to the satellite. They are conse- Use of initially current customs procedures redundant. quently impractical when utilized on voluntary stan- Elimination of those redundant proce- double-stacked railcars, in the holds of dards allows dures would expedite the customs ex- vessels, and in the stacks at container business and amination process and increase the as- yards. government to surance that the vehicle or cargo con- forge a relation- Despite some benefits of satellite track- ship of mutual tainer is safe and originates from an au- ing, the GPS signals emitted from most benefit through thorized or legitimate shipper. maximizing transmitters used by private industry and efficiency and RFID uses radio waves to automatically most federal governments are not secure security of bor- identify an object, often by storing a se- and are easily counterfeited. Thus, they ders. rial number (and any additional informa- create problems for precise tracking. A tion up to 2 MB) on an antenna. A re- false GPS signal can be replicated and ceiver emits a short-range alert when the transmitted to the receiver, masking the integrity of the bulk has been compro- true location of the cargo or vehicle, mised. Some RFID tags also monitor which allows for theft of cargo or the environmental conditions. introduction of an undesired element Tracking automates the customs clear- into a container or vehicle. ance system, thus minimizing the oppor- For more information, visit: tunity for corruption through bribery of http://www.eyefortransport.com/index.asp? news=38732&nli=freight&ch customs personnel. Barcode scanning simplifies the tracking process by identi- 2 GFP Explanatory Notes - www.gfptt.org Examples of Current Tracking A cross-border, bilateral agreement Case Study: Wal-Mart and Programs on rail security exists between Germany RFID and Poland. They exchange information All of the following programs establish Beginning in January 2005, on security incidents and risks. Addi- international and national codes of con- Wal-Mart is requiring that its top tionally, both countries share the burden duct which hold non-compliant compa- 100 suppliers encode all pallets of patrolling borders. and cases with RFID tags that nies and countries increasingly account- can be scanned by readers lo- able for their actions through the crea- International standards harmonize cated at distribution centers. tion of appropriate and enforceable sanc- regulations thereby simplifying proc- These tags must be located on tions. esses for companies and governments. all items sent to the distribution centers and readable 100 percent Smart and Secure Trade Lanes (SST) The International Ship and Port Facility of the time. Security (ISPS) Code represents one at- integrate business advantages with secu- tempt towards establishing such stan- Wal-Mart has issued this man- rity requirements. Containers with dards in maritime transport. date as a cost-saving and inven- Smart Tags bypass many customs delays For more information, visit: tory control measure. By ob- by transmitting their information auto- http://www.imo.org/home.asp (click on ISPS taining a more accurate account- matically, while simultaneously trans- Code Database) ing of goods in the distribution centers, the retail chain can more mitting vital information about their load accurately move goods based on via an RFID transmitter. The US has Chinese government officials, termi- nal operators, and businessmen have demand. By January 2006, Wal- expanded this project through the Con- Mart plans to impose this re- recognized the efficiencies associated tainer Security Initiative (CSI) to the top quirement on its top 200 suppli- with tracking cargo, including faster 34 with which it interacts, involving al- ers. The impact this program clearance of goods, automated data inter- will have on Wal-Mart and its most 80 percent of the cargo shipped to faces, and the development of new tech- suppliers remains to be seen, the US. nologies. Through supportive govern- including who will bear the ad- ditional costs associated with The Advance Cargo Information Sys- ment policies, rapid telecommunications implementation. tem (ACIS), developed by the United growth, the development of location- Nations Conference on Trade and Devel- based services, and supportive infra- Following Wal-Mart's an- opment (UNCTAD), allows cargo and structure, such as the development of nouncement, other companies, such as Albertson's Inc. and transport equipment to be tracked digital maps of highways and cities, Best Buy Co. Inc., have begun through ports and railway systems. cargo and vehicle tracking operations are pursuing similar RFID initia- Cargo can be tracked while on rail, at expanding rapidly and can be used for tives. ports, and on lakes and rivers. ACIS fleet management applications and ad- primarily consists of a set of computer vanced traveler information. For exam- applications and agreements between ple, a Universal Land Transport Man- beneficiary organizations for mainte- agement System, developed by Exel, nance. ACIS has been implemented in through GPS and advanced wireless several countries throughout the world, technologies, is designed to track vehi- including Thailand, Kenya, Tanzania, cles on delivery routes, provide real-time and Bangladesh. In these countries and transmission of delivery milestones, and others, the program has successfully allocate freight according to any number tracked containers from the point of of different user-defined details. China's loading to the final destination, as well government is highly supportive of such as reduced the time that containers spend developments and projects. sitting idle. For more information, visit: For more information, visit: http://www.eyefortransport.com/index.asp? http://www.unctad.org/Templates/Page.asp? news=42070&nli=freight&ch= intItemID=1979&lang=1 Costs of Tracking Other US programs that help to track The ultimate costs of effective cargo and and streamline the movement of goods vehicle tracking, as well as the party that into that country include the Automated will ultimately bear those costs, is still to Commercial Environment (ACE) be determined. RFID tags currently cost and FAST. between a few US cents and one US dol- For more information, visit US Customs & Bor- der Protection's website. lar. The cost per tag is expected to drop Cargo and Vehicle Tracking 3 Case Study: SST for Africa as more companies and governments and enhancement of technologies which mandate their use and production in- further expand current cargo and vehicle In March 2004, the U.S. Trade and Development Agency, the creases. The use of RFID technology tracking capabilities. Governments South African Port Operations, also necessitates the purchase and utili- throughout the world can play a role by the Namibian Port Authorities, zation of either fixed or handheld readers providing incentives to companies devel- the World Customs Organiza- to be installed at the points of origin and oping tracking alternatives, or mandating tion, and Savi Technologies departure. Costs associated with this the use of certain technologies on all initiated the "Smart and Secure Trade Lanes" for Africa project, type of equipment are significantly cargo/container shipments and commer- designed to establish a global higher. cial vehicle travel to or within their model for secure trade within country. Africa and from Africa to other GPS technologies are comparatively countries. The project will ex- more expensive on a per item basis, but The ongoing pilot projects described amine three trade lanes from fewer devices would be needed per con- above should demonstrate the viability South Africa and Namibia to the tainer. The cost could be approximately of the tracking technologies and the cost- United Kingdom and the United States and will include both sea $50 per month per vehicle, plus addi- savings that can accrue through their and land routes. Smart RFID tional upfront costs for the hardware use. As they progress, more quantifiable security sensor tags are affixed necessary for GPS tracking. To accu- information will be available, allowing to each container, which com- rately provide location and tracking in- for countries and companies to make municate the location and secu- rity status of each container to formation, a vehicle would need a trans- more informed decisions regarding cargo fixed and handheld readers mitter installed and the ability to com- and vehicle tracking and the associated throughout the supply chain. municate with a satellite. Additionally, a technologies. data dissemination facility is needed and The pilot project will be com- serves as a critical component for receiv- Additional Resources and Links pleted in January 2005 and will have involved 50 smart con- ing, processing, and distributing the data A New Team Against Terrorism, tainer shipments. Upon comple- transmitted by the satellite. www.cbp.gov/xp/CustomsToday/2003/june_july/ tion, the results of the project ntcfinal.xml will be evaluated and further Conclusion Smart Tags Bring Security to Containers steps will be determined by all Entering US, those involved. Cargo and vehicle tracking has increased http://bulktransporter.com/mag/transportation_sm For more information, visit in use over the past few years and, based art_tags_bring/index.html Frontline Solutions on current trends, this rise should con- Strategic Council on Security Technology, Or: tinue. Tracking offers benefits to both http://www.scst.info/ http://www.ustda.gov/trade/ WCO Security and Facilitation Initiatives, press/Feb10_04A.html private and public sector individuals, allowing for real-time visibility of goods Container Security and the ability to receive advanced infor- South African Society for Intelligent Trans- port Systems ­ Vehicle Tracking, mation regarding cargo and security http://www.sasits.com/index.php?page_id=452&i status. The primary means of tracking d=41 cargo and vehicles, through RFID and Report on Container Transport Security GPS technologies, are quite common yet Across Modes: Executive Summary and Conclu- still require further development to truly sions, provide accurate and secure information http://www.oecd.org/dataoecd/29/8/31839546.pdf RFID and Homeland Security, with regard to the location and status of http://www.aimglobal.org/technologies/rfid/resou vehicles and cargo. rces/articles/dec03/Homeland.htm The private sector will be primarily re- sponsible for leading the development This GFP Note has been produced with the financial assistance of a grant from TRISP, a partnership between the UK Department for International Development and the World Bank for learning and sharing of knowledge in the fields of transport and rural infrastructure services. This Note was prepared by JBC International and reviewed by the World Bank Trade Logistics Group and GFP Steering Committee. The preparation of the GFP Notes was coordinated by Gérald Ollivier, World Bank. The views published are those of the authors and should not be attributed to the World Bank or any other GFP affiliated organization. Additionally, the conclusions do not represent official policy of the World Bank, its Executive Di- rectors, or the countries they represent. For more information, contact Mr. Ollivier at golliver@worldbank.org. 4 GFP Explanatory Notes - www.gfptt.org