‘Smart Box’ container technology, recently promoted by US Customs & Border Protection (CBP) for special ‘Green Lane’ clearance under the C-TPAT program, can also deliver sizable investment returns for shippers when linked to a proven global asset management and security network, according to new research by management consulting company, AT Kearney.
CBP Commissioner, Robert Bonner, announced during the recent Customs Trade Symposium in Washington DC that he was ready to take the C-TPAT program to the next level, which he called C-TPAT Plus. C-TPAT Plus would provide ‘no inspection upon arrival – immediate release’ for low-risk shippers using technology that can detect and record whether tampering has occurred with a container seal after being affixed at the point of origin.
“US Customs & Border Protection should be commended for its forward-looking recognition of ‘Smart Box’ technology in helping to further strengthen Homeland Security while also providing economic value for its users,” said Omar Hijazi, an AT Kearney principal who oversaw the report, which was conducted for client Savi Technology.
He said that the study validated that logistics executives for major importers and exporters believe that a tracking and security solution using RFID technologies linked to a networked platform that goes beyond simple tamper alerts can provide significant value. “Based on a number of potential benefits, we calculated that users could realise net benefits averaging $1,200 per container shipment. This would be added on top of benefits received through fast-track Green Lane qualification, and could create major productivity gains that outweigh the costs of implementation.”
The AT Kearney study found that container security and inventory management are among the most important issues facing the over-ocean supply chain. Logistics executives, however, believe smart box RFID technology goes beyond simple automated tampering alerts, as it enables reduced inventory, reduced out-of-stocks, reduced lead-time variance, increased manufacturing uptime, and reduced admin costs, as well as preventing theft and lost containers.
“It’s very clear now that economic security and physical security are inter-linked in the supply chain, and that RFID technologies networked on a software platform is the key driver,” said Mark Weidick, general manger of Savi’s Collaborative Network Services group. “With new incentives from Customs for shippers to achieve Green Lane status through ‘Smart Boxes,’ combined with analyses on investment returns of these proven technologies, our customers are gaining distinct competitive advantages.”
Weidick added that Savi’s solutions have been literally battle-tested in over a million container moves. Last year, on behalf of the US Trade & Development Agency, BearingPoint analysed results of a demonstration project between the Ports of Bangkok and Seattle of container shipments using RFID sensor tags provided by Savi Technology. BearingPoint found that hundreds of dollars worth of net savings could be realised with the RFID solution by reducing Customs compliance costs, improving timely deliveries and customer service, and reducing stock-outs and theft. Further, a Stanford University study found that RFID solutions provided by Savi Technology and deployed in the Smart & Secure Tradelanes industry-driven solution found similar benefits to shippers ranging from $400 to $1,800 per container trip.
A number of other recent government and industry policies have provided incentives to use RFID-related solutions. Last year, Wal-Mart, Target, the DoD, FDA and others issued policies requiring suppliers to use RFID to improve the visibility and authenticity of supply chain shipments.
