Securing Material Handling Assets

April 1, 2004
Battling terrorism is one reason for securing your assets. However, there are pragmatic benefits to gain as well.

"No one wants to have something bad happen to their supply chain," said Chris Corrado, vice president of customer service, APL Logistics. "No one wants a breach in their supply chain and have their goods tied up, or have their processes shut down. No one wants pilferage. And 9/11 made it clear that companies need to look at contingencies. All these factors have made companies look at supply chain processes and procedures and tighten them up. The result is that many companies are benefiting from a more efficient supply chain."

A more efficient supply chain may be a better reason to implement security measures than thwarting potential terrorism. Obtaining efficiency involves visibility. "This may seem like an easy step, but it is actually very difficult," said David Adams, senior vice president, corporate strategy, TrenStar. "Even inside the four walls of a single warehouse, visibility to where things are, when they move, who moved them and when they have violated simple business processes is difficult. When you expand from a warehouse to a global, multi-stage supply chain, the problem is significant." Smart containers, however, are one potential solution to the problem of obtaining greater supply chain visibility. "We track millions of beer kegs," continued Adams, "and we use RFID technology to tell our customers when a keg has sat too long, not been returned, its path, where it was dropped off and where it was picked up. From this information we can tell when illegal moves have taken place [taxes not paid, margin lost and illegal distributors]. Our customers can walk up to any keg they find and scan it to see if it is in an OK place, dispensing an OK product."

Obtaining intelligence

A little over a year ago, what was then known as U.S. Customs established the Container Security Initiative (CSI). It has four objectives: establish security criteria; prescreen shipping containers before they reach U.S. ports; inspect high-risk containers; use smart and secure containers that protect the integrity of contents and transmit accurately that integrity has been lost. The prescreening portion is in place with the 24-hour advance notice from foreign ports and the requirement for detailed content descriptions. The use of smart and secure containers is undergoing definition and debate.

A smart container is a cargo-carrying box with some ability to report its whereabouts and record whether someone tampered with it during its journey. The potential benefits of smart containers, such as speedier delivery of goods from origination port to destination port, port to distribution warehouse and, finally, from vendor to customer are being touted as incentives for vendors to implement stronger security measures. Depending on the technology that will be used, you will be able to receive all kinds of information from it, including whether the container is just sitting idly on a dock waiting for action. The incentive here is that vendors will have more leverage to keep their cargo moving to its final destination.

If better efficiency is not enough, there are always government directives to motivate implementation of security measures. However, even though various government agencies are working toward increasing security at all U.S. ports and border entries, much is being left to the private sector to handle. Initiatives to secure the supply chain, including development of smart containers, are at various stages of implementation, and the process of developing technologies, standards and procedures is likely to go on for years because of various obstacles.

Political maneuvering

One obstacle is politics. Lately, it has played a role in which agency does what and which agency obtains necessary funding. Port security funds (or lack of), costs and who will pay for what, and proposed policy changes are the focus of most recent meetings.

Until such issues are resolved, establishing much-needed standards for various security technologies and procedures will remain a slow process. For example, there's no officially accepted standard for mechanical bolt-seals and their use on containers coming into the U.S. In 2002, Transportation Security Administration (TSA) was given the task of establishing standards for high-security seals by January 1 of this year. This has not been done, noted Scott Kirk, executive vice president, E.J. Brooks. This responsibility has been moved to Border and Transportation Security within the Homeland Security department.

Thus, as agencies reorganize, the private sector moves ahead with technology and policy development. Which may not be a bad thing.

"September 11 happened, and security became the focus of the government," continued Kirk. "Major companies rushed in, figuring the government would hand out billions of dollars to support research. That hasn't occurred, so now private sector security initiatives are the focus. Companies are moving back toward customer-focused products, inventory management, inventory logistics, and so on. In the end, the government is going to rely on the private sector to pay for the establishment of the infrastructure and security."

Another obstacle to watch is over-reliance on technology to implement security. Government leaders and corporate executives talk confidently about the abilities of technology and policies to thwart terrorist attacks. Any system, however, can be defeated with enough resources and motivation. It is not realistic to assume that implementing smart seals, for example, will solve all security problems. Consider: Will a process really show whether tampering took place, or will it show that people merely signed paperwork?

Securing containers

According to most experts, security measures are best installed in layers, creating an infrastructure that would be harder to defeat. For many manufacturers, the layers begin with the container.

"People are concerned about container security; that is, seal security," said Corrado. "And they are continually looking at opportunities for a really secure container. Customs announced that it will work toward an electronic smart container. But no one has come out with any container security measure that everyone accepts or identifies as the electronic solution.

"Customs would like some type of sensor that can be put into the container that would simply indicate whether the container was breached after it had been sealed and would indicate where and when. Most importers and exporters, though, are still using bolt seals, although they are high-security bolt seals." Until there's agreement on just what a smart seal is and what it will do, mechanical seals are a first step in container security.

As mentioned earlier, industry is still awaiting an official accepted standard for mechanical seals. "There is a standard, ISO PAS 17712, which establishes the values that a high-security barrier seal will have. But it's still open for debate. This is the standard, though, that most agencies are referring to for mechanical seals," added Kirk. "Everyone realizes that we need a standard established for mechanical seals, something, for example, that C-TPAT can point to for its members. Then we could push forward on standards for e-seals."

A seal smarter than a bolt seal will be needed because everyone wants some kind of record of what happened to a container on its journey, something a mechanical bolt can't provide. Presently, electronic seals (e-seals) are receiving the most attention as the solution for Customs’ smart seal.

At minimum, e-seals have some electronic components that will measure seal integrity, store data and communicate to other devices, such as RFID readers. Private companies, however, are developing seals with a range of capabilities, and a range of costs. You can obtain e-seals that will detect temperature or humidity changes, have GPS-like functions and contraband sensing, and detect radioactive material or weapons of mass destruction. Costs range from $15 per seal to more than $1,500 per seal per container.

Current e-seal products, in their basic form, have a type of bolt-barrier security and a PC board that will broadcast at various frequencies.

"That's another issue with these seals, which frequency will become the standard," added Kirk. Debate centers around UHF 433.92 MHz or higher frequency 2.45 GHz. "It doesn't make as big a difference as people are alluding to, even internationally," continued Kirk. "The decision will be made government by government. The key to all e-seals, though, especially in high volume, is the reader infrastructure."

"The 433.92MHz band has become the de facto

standard for the U.S. Department of Defense," said Fraser Jennings, vice president of Standards and Regulatory Activities, Savi Technology, "including for tracking assets in last year's Iraqi war, and it has also been successfully deployed in the global Smart and Secure Tradelanes initiative."

There are a few drawbacks to seals. "Not everyone is in favor of attaching something onto a box," noted Kirk. "The port people are not crazy about reusable products because of the added labor they will entail." Yet to be discussed among all parties is who will have ownership of security seals and be responsible for maintaining them. "Everything in this industry is driven by cost," said Kirk.

But seals are only a stopgap measure. Eventually, the container will have to be redesigned with security features built in, and the industry will replace older containers with newer designs.

Even though steps are being taken to define what constitutes security, technologies and processes for securing assets will be in a state of flux. Some in the security business are predicting that we won't have accepted standards and practices for about 10 years. MHM

Ship-to-Ship Distribution and Security

The U.S. Navy faces unique challenges when it comes to distribution and security. It uses high-speed floating "warehouses" to resupply its vessels deployed around the world. "The Department of Defense's mandate for RFID and containerization plays a large role in its security processes," noted Jim Stollberg, vice president and general manager, Irista. Irista will deploy its iristaWarehouse program to a new class of combat logistics force ships being built under contract.

"For this ship we're using fairly standard RF devices that went through a fair amount of testing and classification to make sure they were, from a security standpoint, capable of operating from the ship," said Stollberg. "The data needs encryption to ensure security primarily because of the ordnance that the ships hold."

Reloading is usually done at sea. The T-AKE supply ship pulls up with the receiving vessel, such as an aircraft carrier, and pallets are transferred from one ship to another. The ships use a commercial WMS system that's been modified to secure data on the type and amount of ordnance.


For more information, contact any of the following sources:

• APL Logistics,

• Irista,

• TrenStar,

• Savi Technology,

• E.J. Brooks,

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