While the market remains in the early stages, demand is increasing for technology that can be used to track containers as well as provide cargo monitoring and security features, the head of System Planning Corp.‘s (SPC) GlobalTrak business tells TR2.
The original plan for entering the market for container tracking devices, which are often generically referred to as container security devices, was to provide an additional layer of security, but no one has really wanted to pay for this, says Richard Meyers, CEO of GlobalTrak. GlobalTrak is the name for SPC’s asset tracking system, which the company began working on immediately after 9/11.
“I think one of the shifts we’re seeing in the market is where a few years ago…the only people that were interested in cargo condition and tracking and things like that were the shippers themselves, guys making the pharmaceuticals or electronics,” Meyers says. “They wanted to know where it is. But the carriers weren’t that interested in it. But now they are saying this is a way to make more money, it’s a way to differentiate services, and our customers want it, so you’re seeing it move up market into more of a carrier or third party logistics provider adoption.”
GlobalTrak has created a return on investment model for potential customers to show them the range of possible savings per container trip, Meyers says.
One of GlobalTrak’s customers is the freight forwarder Damco, a business within the A.P. Moller-Maersk Group, which is using the container tracking devices in support of logistics operations for the U.S. military in the Middle East. Recently Damco selected GlobalTrak for the tracking and monitoring of shipments of Army & Air Force Exchange Service (AAFES) goods from their transshipment point in Turkey where they head via trucks to destinations in Iraq.
Damco has been using GlobalTrak for about two years. In addition to AAFES, the carrier has other customers within the U.S. military who want in-transit visibility as well as more security for certain shipments in high risk corridors, Meyers says.
For the military Damco is using both internally and externally-mounted tracking devices. The externally mounted sensors are used when containers arrive already sealed and the forwarder isn’t allowed to open them, Meyers says. In these cases the sensor package on GlobalTrak is oriented toward tracking and security, such as door security, he says.
The internally-mounted sensors, in addition to providing tracking and security functions, are also capable of monitoring the condition of the cargo, he says.
Damco also forwards freight for commercial customers and GlobalTrak provides a value added service here, Meyers says.
Beyond Trial Stage
GlobalTrak is beyond the purely “trial stage” with a number of its customers with total combined sales numbering in the “thousands of units,” Meyers says. He hopes that next year those quantities will be in the tens of thousands.
The sales cycle for the asset tracking devices is extended because of the relative newness of the technology, Meyers says.
“I think folks are just trying to get their arms around, ‘Okay, how am I going to use this? How am I going t change the way I do business and handle things to be able to get the full value of it?’ And it just takes some time. “We’re in a situation where we’ve been through several dozens of trials and folks see the benefit of it and are starting to ramp up.”
The company is involved in several trials of GlobalTrak with potential customers in Europe. Meyers says that for some international routes there is the problem of transit shipments to an inland port where customs will finally see it. International customs organizations want these shipments tracked. He says that currently that one way to enhance the security of these shipments is to build up large truck convoys, anywhere from 50 to 200 vehicles, which proceed from the marine terminal to the inland port. But this is inefficient in terms of trade and labor so that’s the reason some of the customs agencies are having a look at the asset tracking devices, he says.
In the U.S., Meyers believes that trade benefits that companies using an asset tracking device may one day expect from Customs and Border Protection (CBP) will eventually occur once the agency has confidence that what is supposed to be in the container actually is. For that to happen, he says it’s important to work in partnership with CBP and to understand their needs to that they can be incorporated into “our system and used by our stakeholders.”
Meyers doesn’t think there will ever be a true “Green Lane” for easy passage at a port of entry just by having an asset tracking and security device on a container but believes that these systems can be incorporated into best practices used in a program like Customs-Trade Partnership Against Terrorism, thereby lowering the risk associated with a particular shipment.
GlobalTrak has a range of sensors that can help with security, such as door activity and radiation detection. The device is also being integrated with electronic seals and other seals. GlobalTrak is also working to develop an authorized chain of custody concept that would turn a container into an access control system so that it can be entered only by someone with the appropriate controls, Meyers says.
In addition to providing cargo condition, such as temperature monitoring, the company has integrated radio frequency identification readers into the device, “so now you take a warehouse situation and you move it into the entire supply chain,” Meyers says. If pallets and even items inside a container are equipped with RFID capabilities, then the GlobalTrak device can read those and provide data on the status of a pallet or item while it’s in a container, he says.
“And when a pallet gets dropped off at a customer it will automatically trigger an invoice, and if the wrong pallet gets dropped off at the wrong address the driver gets a PDA message before he leaves the parking lot,” Meyers says.
GlobalTrak is equipped with a variety of communications means, such as satellite, cellular and wireless local area network, allowing for 24/7 supply chain management.