Logistics and Transportation

4.2.2.1. Airports

Many airports have been working with airlines to introduce RFID at their terminals. Let us explore the cause. According to Geneva-based aviation IT specialist SITA (formerly known as Société Internationale de Télécommunications Aéronautiques), every piece of mishandled passenger baggage cost carriers US$90 each. Luggage lost by airlines cost $3.8 billion total in 2007, representing approximately 42 million bags. This accounted for 2% of all luggage (Jones, 2008). Aside from the disappointment of customers it is obvious why airlines wish to reduce this number by every little bit possible.

One of the first airports to introduce RFID technology was Hong Kong International Airport.

The system here operates in parallel with the legacy barcode system. Henry Ma, Airport Authority Hong Kong's General Manager of Terminal Business, stated in 2008 "We've seen significant performance improvements, and we believe there will be further efficiency and reliability gains when the rollout is completed later this year,” This is attributed to the unique property of RFID tags that they can be read at any angle and from a distance this means tags can be read faster, contain more data and are more reliable, with read rates of 97% versus an average of 80% for the barcode only tags.

In 2005 McCarran Airport in Las Vegas Nevada changed to an RFID luggage tracking with an aim to reduce the number of lost bags. Airport officials in 2006 claimed that the system had been 99.5 percent accurate (Cheung, 2005). Milan’s Malpensa Airport served 21.7 million passengers in 2006. It was in an urgent need of a system for baggage tracking as part of an effort to reduce the cost of baggage handling. The airport signed a contract with

Denmark’s Lyngsoe Systems to install and integrate a system in Milan that is nearly identical to one used at Hong Kong International Airport. This resulted in the implementation of RFID system at the airport in 2007.

The International Air Transport Association (IATA) has endorsed RFID based baggage handling as a way of simplifying airport procedures. It has predicted that global

implementation of RFID, in controlled baggage handling, can lead to an annual saving of US$760 million for the airline industry. Several international airports have now implemented or have started implementing RFID technology in their baggage handling systems.

Heathrow, the UK’s busiest airport, began a six-month trial of RFID tags in 2008 for use in tracking passengers’ baggage. The RFID tags contain data that includes the passenger’s name and route. They are attached by airport personnel in specially equipped Emirates check-in counters. The trial will be tagging approximately 50,000 bags each month for passengers traveling or transferring on Emirates Airline between Heathrow and Dubai. The project is expected to save Heathrow around 400 million pounds in reduced luggage losses and replacing existing messaging systems (McCarter, 2007).

4.2.2.2. Yard Management

Though shipping sector was initially skeptical about the benefits of RFID when applied to yard management but after seeing the successful incorporation and working of RFID in so many industries, many companies in this sector have turned to RFID for yard management.

One example of a provider of yard management solutions is PINC Solutions based in

Berkeley, California, USA. They offer an asset visibility solution for distribution center yards

using passive RFID. Ruggedly designed Gen 2 RFID tags are attached to a yard's mobile and movable assets such as trailers. Their ruggedness has been a crucial feature in use of RFID in yard management. The tow trucks that move the trailers from one location on the premises to another are equipped with RFID readers. These readers are able to calculate their own locations. As the truck is moving the trailer, its reader records the event and relays the activity and location data back to a central server via a standard wireless LAN connection.

Then that information is incorporated into computer graphical representation of the yard, allowing the yard manager to see in real-time the location of all trailers and trucks (RFID Update, 2007).

4.2.2.3. Shipping and Freight

Shipping and freight service companies have begun to use RFID in their operations. Schenker is one of the world's leading providers of integrated logistics services. It offers land operation, air and sea freight as well as comprehensive logistics solutions and global supply chain management. It incorporated RFID as part of a system for its shipping in 2006. In shipping, goods need to be tracked as they are exchanged since it is at that time that the goods are lost mostly. The container RFID tag is automatically registered at points where liability changes hands. That means the shipment becomes immediately visible at important transitional milestones in the transport chain. The first phase initiates with the partners on the packing stations at the port. The second phase involves the container terminals. Schenker also tested the 'e-seal', an electronic seal that documents any opening and closing of the container (Oracle, 2007).

In 2004 Kuhne & Nagel (K&N) and Siemens Business Services began implementing a pilot transatlantic RFID project, to test for the first time across a supply chain from Munich to

New York under real conditions. The pilot was executed together with printing systems manufacturer Oce and Lufthansa Cargo. The pilot went on to be a success and in 2005 K&N announced that they now provide “rapidly implementable, cost-effective radio-frequency identification (RFID) solutions for its customers” (K&N, 2005). They went on to say “we believe that RFID will be an integral part of next generation supply chains”.

4.2.2.4. Railway

Railways around the world have also implemented RFID. This provides solution to some of the worst problems that railways face without the use of RFID, to eliminate bad information that can come from:

• From mistakes that are made manually when entering into the database

• During the process when railcars are switched onto different tracks.

Pertinent information can also be written onto the tags. This encompasses information such as what the railcar contains, any hazardous materials that might be on board and other important information (Bacheldor, 2007). A company called TransCore produces a variant of RFID technology that is already in use at numerous railways throughout the world. They have installed more than 6.5 million tags and 20,000 readers throughout the world's rail and intermodal freight industry.

The North American railroad industry operates an automatic equipment identification system based on RFID. The Association of American Railroads (AAR) adopted TransCore's Amtech RFID technology as the standard for automatic equipment identification. This has resulted in 100 percent of all railcars in interchange service being equipped with TransCore's tags in North America (Bacheldor, 2007).

4.2.2.5. Transportation Payments

In today’s fast paced society speed and ease of movement are becoming more essential. Road pricing is an effective tool for traffic demand management policies. In general, road pricing is implemented either for revenue maximization or for regulating transportation demand

(Tezcan, 2006). Regionally RFID has been becoming a very effective tool in speeding up the time it takes to pay for transportation in many formats.

RFID provides following benefits over the traditional systems:

• Much quicker and easier collection of road tolls

• With RFID no stopping is required

• Less staff is needed to work at toll booths.

An example is EZPass on the New Jersey turnpike to pay a toll without stopping. This is done by providing the Passenger person an RFID device, the EZPass, which communicates with the tollbooth (West Virginia Department of Transportation, 2009). Likewise, when someone uses their Speedpass in the US, this is a very small nation wide chain of Exxon and Mobil gas stations, where one can quickly pay for gas without having to use any cash. Speedpass can simply be swiped and will debit the funds from your account. Thereby letting your fill up your car very quickly and getting back on the road without having to wait in long lines.

In Singapore, public transportation buses and trains employ passive RFID cards known as EZ-Link cards. They have integrated the same card across different domains. People are able to pay for bus and train rides with it, as well as purchase items from shops. A similar service has been available in Taipei, Taiwan since 2002. In Taiwan the transportation system uses

RFID operated cards as fare collection. The Easy Card is charged at local convenience stores and metro stations (MRT).

In Toronto, Canada and surrounding areas, RFID pricing systems are used to collect toll payments on Highway 407 (Industry Canada, 2009). The RFID devices have been installed in the vehicles of frequent users since 1997. Similar RFID systems are used for electronic freeway tolling in Pakistan as well as Norway where all public toll roads are equipped with the RFID payment system that is known as AutoPass (ITS Decision, 2009).