P O R T S
Hutchison is a key player in a global initiative that will significantly increase safety and security
within the world’s maritime container trade.
By Matthew Flynn
ust as a secure house helps people sleep peacefully at night, “HPH is joining with other industry leaders to build a net-
the introduction of Smart and Secure Tradelanes (SST) is work to read messages from individual containers as to their
allowing the shipping industry to rest easy in the knowl- location and sensor activity,” explains HPH Group Managing
Director John Meredith.
edge that containers carrying their valuable merchandise
“When the messages are received from their origin load-
will arrive safely every time. ing and destination unloading facilities, shippers will be able to
Until now, shippers had no real control over their goods closely monitor the containers in their supply chain.”
after they’d been packed into containers. Any tampering with Meredith is a founding member of the Strategic Council
the contents in transit, or even the loss of the entire container, on Security Technology (SCST), which is the driving force
was almost impossible to detect until it was too late. behind the SST initiative. The SCST was brought into exis-
But all this is rapidly changing with the introduction of tence in response to the events of 9/11 to focus on security
SST. The system effectively provides each container with the with the aim of being an international resource. It is com-
equivalent of its own electronic dead bolt and burglar alarm, prised of an international assembly of top executives from the
along with supporting technology that enables owners to track world’s largest port operators, logistics technology providers,
the container and monitor the integrity of their goods from military logistics leaders, former public officials and prominent
point of origin to final destination. transportation consultancies.The participation of leading glob-
The initiative comes at a time of growing concerns world- al ports players means that SCST represents 75% to 80% of the
wide over security issues. In the wake of the events of 9/11, the container traffic crossing US borders.
movement of containers has been identified in some quarters
as a vulnerable link in the global security chain. In the worst- TECHNOLOGICAL BLUEPRINT
case scenario, some argue, a container could be used to deliver With growing demand for the establishment of more
a bomb. dependable security, the commercial container industry has
At the forefront of technology solutions for container known for some time that it faces a dramatic change in the
security, and one backed by Hutchison Port Holdings (HPH), way of doing business.
are anti-intrusion sensor systems that are both tamper proof The basic requirement is that each container carry with it
and monitored by a radio-wave network. The sensor systems reliable information on where it has been and who has had
transmit coded radio alerts in the event of unauthorised tam- access to it. In short, each container must be secure and tracked.
pering and also carry an encrypted computerised log of the By volume, more than 95% of the US non-North
container’s handling history. American foreign trade arrives by ship. Yet the US Customs
This SST initiative is a global effort to use proven technolo- Service is only able to inspect 2% to 3% of the seven million
gies and best business practices to plug security gaps throughout containers that arrive each year, carrying everything from rugs
the supply chain. Similar technology is widely used in anti- and razorblades to frozen fish and sports cars. A major securi-
shoplifting devices. With an average container cargo worth ty breach conceivably could cripple global trade.
US$50,000 to US$100,000, it is not surprising that the technol- As the collection and discharge point for sea containers,
ogy is now being applied to protect commercial cargo in transit. ports are the strategic control points in the supply chain. But
Via the web-based software of Safe and Secure Tradelanes (SST), detailed cargo information is submitted to relevant security
1 authorities by the various links in the global supply chain – including factories, government representatives, logistics service
providers, terminals and shipping lines.The data is simultaneously captured and retained in the SST security software platform.
P O R T S
there have been obvious and potentially times a day after the containers of lunch PIVOTAL ROLE FOR PORTS
dangerous security gaps – until now. and dinner meals went missing.This was HPH has installed the Radio Frequency
The SCST has recently signed a part- a minor inconvenience, but planners Identification (RFID) reader equipment
nership agreement with the International realised the potential danger if ammuni- in several facilities – Hongkong
Standards Organisation (ISO) to acceler- tion were to get lost in a mountain of International Terminals (HIT), Port of
ate the standards-development process metal containers. Felixstowe (PFL) and Europe Container
and ensure that the industry-government Terminals (ECT) – and can bring new
coalition implements a defined, cohesive The system ports on line in a matter of weeks. In
and practical set of criteria. due course, all HPH container ports will
The participation of the ISO is provides each deploy the SST technology.
important because it responds to earlier container with the When the container enters the HPH
calls by the World Shipping Council to facility by truck or barge, a handheld
ensure a workable radio wave network equivalent of its own RFID reader is used to scan the sensor
as well as communications security. electronic dead bolt systems. Several dozen readers through-
While the ISO is responsible for out the marshalling yard watch over
defining the standards of the technology, and burglar alarm stored containers while fixed readers
the foundations of the Smart and Secure attached to quay cranes capture move-
Tradelanes have already been estab- Today, the US military uses sensor ment on and off container vessels.
lished, tested and proven by the US systems and radio tracking on all crucial The first wave of “smart and secure”
Department of Defense. shipments. During the second Gulf War, ocean containers was shipped in
The application of sensors and containers were tracked and kept secure December 2002.
automated tracking systems to con- while the data remained confidential. Among these shipments were ten con-
tainerised cargo came about after the The availability of an already devel- tainer loads of store merchandise loaded by
US military’s supply chain became oped secure method to tighten control HIT for a major US-based retailer. (HPH
hopelessly tangled during the first Gulf over supply chains serves as a useful handles about 50% of the 17,000 contain-
War. Soldiers were eating breakfast three model for the shipping industry. ers that enter US seaports each day.)
After the container has been packed and before it enters the contain-
2 er terminal, authorised personnel affix a sensor system, making the
container “smart and secure”.The Radio Frequency Identification (RFID) tag
contains automatic identification technologies and sensor-related intrusion-
detection systems that dramatically improve the ability to track, locate and
detect the integrity of shipments in real-time.
Following the typical 10-day journey ty applications. “We are in 32 locations work partners, which include carriers and
across the Pacific Ocean, the vessel and smuggling may occur in some of forwarders in addition to port operators.
berthed at the Port of Seattle, where these,” he says. “Shippers should use whatever
strategically placed RFID readers record- process and technology that will allow
ed their location and security status. them to monitor the location and sensor
After Customs clearance to exit the Everyone activity of the containers carrying their
Port of Seattle, the smart containers were will benefit goods as they move through their supply
loaded onto the chassis of a regional chain,” Meredith asserts.“We believe Safe
trucker and transported to a distribution and the shippers and Secure Tradelanes provides them with
facility where key events continued to be themselves this service and we think that the effort
captured and transmitted. Authorised we have already put into it will be seen in
personnel then unlocked the sensor sys- will be the a good light by all players internationally.”
tem using an encrypted code.The event main winners To date, SST is probably the most
was recorded and transmitted to the far-reaching container security initia-
Transportation Security System software, tive globally.
enabling complete information verifica- “HPH and the other participants of
tion and the instant creation of a docu- SST are committed to enlisting a strate- COMMERCIAL BENEFITS
mented audit trail. From there, the mer- gic group of multinational shippers who While the new technology brings addi-
chandise was shipped to retail stores can implement end-to-end and port-to- tional expenses, Meredith believes it will
throughout the American Northwest – destination container security.” also result in savings. “Everyone partici-
efficiently, safely and securely. Shippers’ requirements go back fur- pating will benefit from increased con-
ther than the ports, linking back to point tainer security and the shippers them-
SAFETY FIRST of origin at the loading docks and facto- selves will be the main winners,” he says.
Meredith points out that, as a major ries. The unbroken origin-to-destination Commercial benefits will include
container terminal operator, it is natural process will naturally require collabora- better supply chain visibility, bringing
for HPH to be well advanced in securi- tion with the shipper’s other physical net- “substitution cost savings” such as a
Information contained in the RFID tag is At the terminal in-gate, a hand-held device Once security is verified, the container enters the
3 captured on the Internet-based security
4 reads the container’s security status then 5 terminal to be loaded.Tracking occurs when the sen-
software platform which facilitates the necessary sends the information to the security software sor systems affixed on the container pass through the fixed
information exchanges and makes data readily platform. The device enables authorised person- readers installed in the node. At the point of loading, the
available to authorised parties. Phase 2 adds more nel to capture and verify key information, which sealed containers are scanned again through readers mount-
security layers, including a grid of sensor tech- is available for customs authorities to determine ed on quay cranes, providing a final security confirmation.
nologies for detecting environmental changes pre-loading inspections.
inside containers, surveillance cameras, biometric
identification, and satellite tracking for in-transit
P O R T S
reduction in Bill of Lading surcharges field, having won awards for the devel- shipper for the monitoring of location
and expedited freight. opment of a computer programme for and sensor activity is one more input to
Greater certainty of a container’s yard management and workflow systems their data from service providers,” he says.
location in the supply chain will also that arrange containers efficiently. Each terminal facility has its own site
allow shippers to reduce their inventory SST operates on an “open architec- manager who collects the data from the
of “safety stock.” ture” software principle to read various readers. This information is then sent to
The US military, for example, has used the various shippers’ systems, or they can
the sensor systems to move from just-in- access it from the Internet using their
case logistics, where planners always This is going passwords. “The protocols are in place
shipped extra in case something was lost to be the for security,” Meredith confirms, point-
or delayed, and instead adopt a much more ing out that there have been no security
efficient just-in-time logistics. next revolution breaches in the US Department of
Meredith also anticipates that ship- in technology Defense’s use of the system.
pers will enjoy across-the-board direct “The key to monitoring the loca-
and indirect cost savings as fewer ship- tion and sensor activity of a ‘smart con-
ments get tangled in trade compliance manufacturers’ RFID tags. The moni- tainer’ is the network of readers and the
procedures and there is less risk of loss. toring information is then transmitted ability to forward data to the shipper for
“Major retail shippers are already rely- to software that alerts shippers on the alerts,” notes Meredith. The terminal
ing on imbedded computer chips to status of their cargo. operators’ network will be a large sector
protect products from theft,” he says. Naturally, shippers and other service of this but additional reading stations at
“Many of these corporations are now providers will be sensitive to who will intermodal yards/facilities will further
ready to adopt this type of technology have access to the commercially sensi- enhance the network to provide closer
to track their containerised shipments.” tive information. scrutiny of the shippers’ supply chain.
Meredith explains that shipping To date, the main company produc-
IT PEDIGREE information is the property of the ship- ing the smart locks is Savi Technology,
HPH has strong credentials in the IT per. “The information provided to the which clearly has a head start thanks to
Secure containers leave their port of origin on board a vessel. Each container can The container arrives at its destination port where its integrity is
6 now be tracked to its final destination along Smart and Secure Tradelanes. 7 again checked using a hand-held device. Information on key supply
(Currently, six lanes are available: HK to Seattle; HK to Tacoma; ECT to NY; Felixstowe chain and security events is immediately available. Business processes have
to NY; Singapore to LA/LB; Antwerp to NY.) been recorded, and container tamperings, mis-routes and delays have been
monitored and reported accurately throughout the global tracking network
its track record with the US military. December 2002 and focused on the secure supply chain, governments give
But RFID hardware is not limited installation of the readers and location them speedy access to land their goods,”
to one company. “This is a quickly monitoring. It has seen more than 900 says Meredith. “Shippers who can pro-
developing sector that is going to be containers secured from point-of-origin vide accurate and comprehensive loca-
the next revolution in technology,” to point-of-destination. In this phase, tion and sensor status of their containers
Meredith predicts. more than 4,000 container location will be at the top of that fast lane list.
A major container maker in China, This is a collaborative effort and not a
for example, has just signed on with a competition of terminal operators to
proposal for installed imbedded readers This is a build security into the global supply
in their newly built containers, while collaborative chain.The participants in SST recognise
retailers and product manufacturers are the importance of a secure trade lane to
now making orders for RFID to track at effort and not the world economy and believe that at
the product level. a competition present their initiative is the only one
“HPH welcomes more advanced upon which shippers can rely.”
systems that may come into play,” says As for the future, it’s quite feasible to
Meredith. “Security is the incentive and monitoring and sealing events were predict that someday soon all containers
security protects our people and our recorded, spanning the globe and will be “smart and secure”. And there’s
company’s assets,” he adds. “Our prime including ports in Rotterdam, Shanghai, almost no limit to the potential of the
motivation is to take concrete action Bangkok, Semarang, Jakarta, Singapore, technology to keep shippers informed.
and do our part to provide a service to southern China, and Hong Kong. Besides tracking their goods via global
shippers that enables them to better Phase 2 is now under way and the positioning, for example, they could
secure their supply chains.” focus is on sensor status monitoring, soon be keeping tabs on the temperature
while also expanding the volume of within their container or even be able to
ROLLOUT UNDER WAY tracked containers. “see” their goods via remote cameras.
SST has undergone a rigorous testing “A great deal of impetus will come Now, if only our homes and offices
process. Phase 1 was launched in when, in return for shippers showing a could be so secure.
The “seal” of the RFID sensor system is finally broken. The movement of
8 cargo within the marine container has been accomplished with a high level
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