A container isn’t just a container anymore. Today, "smart containers" curtail cargo theft and can deter terrorism. But problems remain.

Progress Continues

By utilizing various technologies, including ultrasound, radio frequency identification (RFID) and satellite technology, containers can be equipped with devices that detect door openings, changes in light, temperature, vibration and more. For example, e-seals, RFID-enabled seals that fasten to a container door, provide wireless alerts if tampering occurs.

Some smart containers can even tell who supervised the loading, the type of contents, the departure and arrival ports, etc. Plus, they enable companies to precisely determine where their cargo is in the global supply chain.

This is essential since cargo theft is estimated in the tens of billions of dollars annually. But more importantly, it can deter terrorism that could inflict far greater losses.

A Problem To Communicate

As technologies have emerged, suppliers have utilized different communications frequencies, protocols, readers and tamper-detection methods. Consequently, a security system of one vendor is not always able to communicate with another. The result: a smart container in one part of the world may not be so smart in another.

Although the technology harmonization process is slow, and cost and control-related problems remain, progress is being made. For example, the Safe Port Act signed into law in October 2006 defined a smart container and provided incentives for shippers by allowing expedited treatment through the Customs process. And Savi Technology, Inc., a provider of RFID based solutions, who recently began licensing its intellectual property is now incorporated in the ISO 18185 global standard.

This is good news since the number of ships and the containers in transit continues to rise. Thus, from 1987 through mid-2007, the United Nations reports the total world container fleet has grown from 1,000 to 4,000 ships; and the number of TEUs (containers defined as twenty-foot equivalent units) carried on ships has jumped by two and a half times to reach 2,500. In 10 years, the average ship likely will carry 8,000 TEUs.

Miles To Go

Technologies needed to detect biological and chemical agents, shielded enriched uranium, and explosives still are inadequate. And more private-public initiatives and collaboration are required, analysts say. Additionally, in recent years security has not remained top of mind. And it's sometimes difficult to persuade corporate management to invest in new technologies.

But as smart containers reduce theft and improve supply chain performance, enhanced security systems will emerge. As such, Homeland Security Research Group estimates that revenues in the container security market will increase from less than $1 billion in 2007 to more than $4 billion in 2012. The bottom line: as cargo becomes more secure, so will the nation.

In 2007, nearly 20 million containers were imported into the U.S. Since containers represent a potential vehicle for terrorists, the development of advanced systems that can talk to each other on a global basis will remain essential.

This article appeared in January 2008. (CM)

John Manzella
About The Author John Manzella [Full Bio]
John Manzella, founder of the Manzella Report, is a world-recognized speaker, author of several books, and an international columnist on global business, trade policy, labor, and the latest economic trends. His valuable insight, analysis and strategic direction have been vital to many of the world's largest corporations, associations and universities preparing for the business, economic and political challenges ahead.

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