Special Reports: Seal of Disapproval
When used to secure cargo contain-ers, e-seals allow importers, shipping companies, port officials and customs inspectors to quickly determine whether container security has been compromised. E-seals also provide supply chain tracking advantages. And while there are currently a few dozen manufacturers of e-seals, such as Savi Technology and General Electric, some use different technologies. The world's ports, ocean carriers and U.S. importers won't start investing in RFID seal and reader infrastructure until the International Standards Organization (ISO) blesses one of those technologies by issuing an international standard. ISO Technical Committee 104, which has responsibility for shipping container standards, nearly completed a draft standard in late 2004. But Motorola Inc., a member of the committee, raised a number of concerns.
Craig Harmon, president and CEO of a consultancy, says the changes in the draft standard being pursued by Motorola could end up increasing the cost of an e-seal between 50 percent and 200 percent.
Harmon is a member of TC104 and also heads the Joint ISO Working Group of Shipping Container Applications of RFID, which is working on standards for shipping container ID and supply chain tags that might be used in conjunction with e-seals.
The Best Defense
The Defense Department has used e-seals with Savi Technology's battery-powered RFID tags for 10 years. The Department of Homeland Security (DHS) is anxious to popularize e-seals among the 9,000 companies -- most of them U.S. manufacturers -- who voluntarily participate in the Customs-Trade Partnership Against Terrorism (C-TPAT) program run by Customs and Border Protection, a DHS component. That program assures U.S. importers various levels of expedited port handling of goods based on the extent of security measures taken by the importer. The DHS wants to give C-TPAT participants a new option, a "green lane" status.
Kelby Woodard, who was director of supply chain assets for Target Corp. before leaving the company earlier this year to start a consulting firm called Trade Innovations, says U.S. importers are responsible for knowing "what happens further up the supply chain" because of Customs form 7501, which contains information about the products coming in, tariff numbers and insures that the importer pays the proper amount of import duty and tax on the shipment. "U.S. importers better be looking for new security regimes," Woodard warns.
But Motorola's disputes with some members of the TC104, especially Savi Technology, are delaying finalization of ISO 18185, the e-seal standard. Craig Harmon has been working on RFID container standards for five years, and is increasingly frustrated by delays in issuing final standards. "Motorola came late to the activity and wanted us to start back at square one," says Harmon. He argues that Motorola's desired changes to the draft ISO e-seal standard will make the seals more expensive. Harmon says TC104 had responsibility to do "due diligence" and investigate Motorola's concerns. Carrier members of TC104 have done additional testing of elements of ISO 18185 since May. The testing will be completed, ostensibly, in November. Based on those tests, there may be changes made to the draft standard. The revised draft standard could go out for a two month ballot within TC104 as early as November. Changes are made to the draft standard based on considered comments. Then the revised standard goes to ISO members for a vote. There could be a final standard by next spring.
Others Weigh In Juergen Reinold, senior director, technology, architecture, standards and intellectual property for Motorola's secure assets solution division, freely admits Motorola upset the apple cart. He first raised Motorola's concerns at an ISO meeting in Beijing in December 2004. "The technical committee had not done a vulnerability study, and we were concerned about the security of the data on the tags," Reinold explains. Motorola has a number of concerns about the draft standard besides the encryption issue. For example, Reinold argues 18185-7 does not have any tag security, a vulnerability that can be exploited by terrorists. Another problem is lack of interoperability; 18185-7 is not sufficiently specified to enable smooth coexistence among vendors.
Fraser Jennings, vice president, Standards and Regulatory Activities for Savi Technology, thinks the draft standard is fine. "We feel the solution that has been put forth, and pursued for the past two and a half years, is the correct solution."
George Cavage, director, Strategy and Technology for APL, a global container transportation company, thinks Motorola raised some valid issues. But agrees that an ISO e-seal standard that does not specify ISO 18000 will result in more expensive e-seals. The Motorola-Savi dispute isn't particularly unusual, notes Cavage. But when asked when it might be resolved, he laughs and declines to make a prediction.
- Stephen Barlas