Savi and Hutchison Port Holdings launch company to develop RFID network

April 25, 2005
Savi Technology Inc., a provider of active radio frequency identification (RFID) supply chain solutions, and Hutchison Port Holdings (HPH)

Savi Technology Inc., a provider of active radio frequency identification (RFID) supply chain solutions, and Hutchison Port Holdings (HPH), a port developer and operator, have formed a company to build and operate an active RFID-based information network to track and manage containerized ocean cargo.

The company, called Savi Networks LLC, will build the network by installing active RFID equipment and software in participating ports around the world to provide users with information on the identity, location and status of their ocean cargo containers as they pass through such ports. Shippers, third-party logistics providers (3PLs) and transportation companies will be able to connect to the network by installing compatible equipment at their own locations to further improve the efficiency, effectiveness and security of global supply chains.

The new company will be initially capitalized with an investment of $50 million from the joint-venture partners. Savi Technology will hold a 51% interest in Savi Networks, and HPH will hold the remaining 49%. Savi will take the lead in operating the joint venture and contribute a license to the software to operate the network, and HPH will provide access to its port facilities.

Savi Networks will seek to establish relationships with additional port partners to further extend the network, as well as with providers of complementary technologies and services to the global supply chain.

“We believe the availability of a shared RFID network will enable greater supply chain visibility and efficiency throughout global supply chains,” says Vic Verma, Savi’s president and CEO.

“Global concerns about supply chain efficiency, effectiveness and security continue to grow, and must be addressed with new and better ways to manage cargo,” adds John Meredith, HPH’s group managing director.

It is expected that Savi Networks will function much like a telecommunications network service provider. Savi Networks will own and operate the network’s core infrastructure and will provide information services, to be called SaviTrak, on a per-container trip basis. The company will also sell active RFID-related hardware and services to customers to extend the network to the customer’s own origin point, such as a manufacturing plant, and/or destination point, such as a distribution center.

The new company expects to offer customers a family of active RFID tags, including data rich, visibility and sensor tags, based on ISO 18000-7 standards. These tags would be affixed to containers, transforming them into “smart containers” able to communicate with the network, which will enable users to receive information on location, security and environmental conditions, such as temperature, humidity and light, as well as the container’s contents.

The network will be built on an interoperable architecture designed to accommodate automatic identification data collection (AIDC) technologies, such as bar codes, passive RFID technologies such as EPC, and global positioning systems (GPS) used to track ships and trucks that transport ocean containers. These complementary technologies will form the basis of a “nested visibility” solution, designed to provide users with greater visibility and management of both their container shipments and the contents they transport.

Concurrent with the formation of Savi Networks, HPH also has made a $50 million investment in privately held Infolink Systems Inc., the parent of Savi Technology, which will provide HPH with slightly less than 10% of Infolink on a fully diluted basis. Other strategic Infolink shareholders include Temasek Holdings, a major shareholder in transportation companies such as PSA International, Neptune Orient Lines and Singapore Airlines; SembCorp Logistics; Mitsui and Co. Ltd.; Oracle Corp.; TIBCO Software Inc.; and United Parcel Service (UPS).

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