Container security: a multi-billion dollar cash cow?

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Thomas Hallauer, Director, Telematics Update, London, UK

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Telematics Update’s Thomas Hallauer talks to Thales and ZOCA about the lack of standards in the container security industry.

Cargo security is a multi-billion dollar industry, with service providers who can offer efficient security and shipment visibility doing so at premium rates.

Technology providers are beginning to recoup the mountains of money they poured into R&D in response to the global paranoia and consequent demand for foolproof cargo security systems that was the world’s knee-jerk reaction to 9/11. The Homeland Security Research Corporation (HSRC) forecasts that US$12 billion will be spent on maritime container fleet security between 2006 and 2012, by which time the maritime smart container industry is expected to hit US$4 billion.

According to DeGeneste & Sullivan, ocean transportation accounts for just eight per cent of the total direct value of global cargo theft, followed by rail (four per cent) and air (one per cent). The biggest problem area is road transportation (87 per cent). While the importance of RFID and EPC technologies is acknowledged, the cost of hardware, software and integration is still an obstacle to widespread implementation. The RFID market is set to reach US$2.8 billion by 2009, with the number of RFID tags in use expected to exceed 25.5 billion. More than a quarter of these will be active RFID tags, according to research by UK consultancy, IDTechEx.

Lack of standards

However, the standards issue continues to rear its ugly head. No government department – specifically the Department of Homeland Security (DHS) in the US – has come out and given an indication of the requirement for the global container trade to use a particular technology or service. The DHS is not expected to dictate or recommend a particular technology, but rather it will suggest that all products use an open standard.

To date there is no ratified ISO standard for technology firms to work to. By the third quarter of this year, however, the industry expects a couple of standards to be announced. One is an ISO standard for electronic e-seals worked on by most of the industry; the second is a secure container device standard from a GE-led industry consortium.

Michael Naylor, Technical Manager at Thales Research & Technology (UK), comments: “Currently there are no standards in this area, except for the basic ISO  electronic seal standards. Niche markets and pilot trials will be able to use proprietary systems, but  until we have agreed worldwide open standards the larger market will not grow. The US in particular has a desire to mandate the use of container security technology as it becomes mature, but it’s hard to see how this can happen without open standards.”

Jaap van den Hoek, Director of ZOCA Container Security which is sponsoring the Container Tracking and Security Show in Dubai, believes that the technology  providers and the market should collaborate on the development and implementation of industry-driven and supported standards, so that neither gover nments nor other author ities have to dictate these requirements.

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