CHINOS Final Report final draft - TRIMIS · 2015-07-03 · Project no.TST5-CT-2006-031418 CHINOS...

Project no.TST5-CT-2006-031418

CHINOS

CONTAINER HANDLING IN INTERMODAL NODES – OPTIMAL AND SECURE!

Instrument: Specific Targeted Research Project (STREP)

Thematic Priority: Sustainable Development, Global Change and Ecosystems

Deliverable D0.4

Final Report

Due date of deliverable: 31/03/2009

Actual submission date: 15/05/2009

Start date of project: 01/10/2006 Duration: 30 Months

Organisation name of lead contractor for this deliverable: ISL

Document ID code: 02-RD-D0.4-2009-draft

CHINOS – Final Report 30/06/2009

CHINOS 02-RD-D0.4-2009-draft I

REVISIONS/DOCUMENT HISTORY:

Index Date Authors Reviewers Subject

0 19/03/2009 Nils Meyer-Larsen (ISL)

Deliverable draft

1 14/05/2009 Frank Arendt (ISL)

Re-formatting, identification of missing items (eg validation results)

2 30/06/2009 Nils Meyer-Larsen (ISL)

Frank Arendt (ISL)

Ready for final review

CLASSIFICATION AND APPROVAL

Classification: Public (PU)

DEFINITION

PU = Public

PP = Restricted to other programme participants (including the Commission Services).

RE = Restricted to a group specified by the consortium (including the Commission Services).

CO = Confidential, only for members of the consortium (including the Commission Services).

Public after Review:

The document may be freely distributed after successful EC review, given the EC’s

permission. Publication is governed by the EC Contract and the CHINOS Consortium

Agreement.

Confidential for the Duration of the Project:

As for ‘Confidential’, but only for the duration of the Project. After final Project Approval by

the EC, status for reports classified ‘Confidential for the Duration of the Project’ are

automatically down-graded to ‘Public’.

Confidential:

The document is for use of the TST5-CT-2006-031418 Contractors within the CHINOS

Consortium, and shall not be used or disclosed to third parties without the unanimous

agreement within the CHINOS PMC and subsequent EC approval since document

classification is part of the EC Contract.

Any executive summary specifically intended for publication may however be made known

to the public by the author and/or the Coordinator.


CHINOS 02-RD-D0.4-2009-draft II

AUTHORS:

Name Company Date Signature

Nils Meyer-Larsen ISL 30/06/2009

REVIEWERS:

Name Company Date Signature

Frank Arendt ISL 30/06/2009

APPROVAL:

All partners of the project consortium via a return email have approved the final version of

this CHINOS Deliverable.

DISCLAIMER

Use of any knowledge, information or data contained in this document shall be at the

user's sole risk. Neither the CHINOS Consortium nor any of its members, their officers,

employees or agents accept shall be liable or responsible, in negligence or otherwise, for

any loss, damage or expense whatever sustained by any person as a result of the use, in

any manner or form, of any knowledge, information or data contained in this document, or

due to any inaccuracy, omission or error therein contained.

The European Commission shall not in any way be liable or responsible for the use of any

such knowledge, information or data, or of the consequences thereof.


CHINOS 02-RD-D0.4-2009-draft III

Table of Contents

1 Executive Summary 7

2 CHINOS Objectives 8

3 The CHINOS starting point 10

3.1 The ocean container industry today 10

3.1.1 Market and players 10

3.1.2 Logistics view 11

3.1.3 Maritime safety, security and environmental protection in the

OCI 13

3.2 Anticipated changes and challenges 14

3.2.1 Market and technology changes 14

3.2.2 Strategic challenges for container transportation 15

3.2.2.1 Growing infrastructure pressures 15

3.2.2.2 Increasingly sophisticated customer requirements 18

3.2.2.3 Demand for tighter security by statutory agencies

and private enterprise 19

3.3 RFID fundamentals 21

3.3.1 Container ID fundamentals 24

3.3.2 RFID perspectives in (seaborne) containers handling 26

3.3.2.1 Drivers for RFID adoption 26

3.3.2.2 Paths for RFID adoption 28

3.3.2.3 Challenges in RFID adoption 30

3.4 Current Standards 30

3.4.1 Freight Containers – Automatic Identification (ISO 10374) 31

3.4.1.1 Operating temperature range / environmental

conditions 32

3.4.1.2 Container Speed 32

3.4.1.3 Position of the identification tag on the container 32

3.4.1.4 Container tag Data format 33

3.4.1.5 Basic principle of Operation 34

3.4.1.6 Container Tag 35

3.4.2 Freight Containers – Electronic Seals (ISO 18185) 35

3.4.2.1 Physical layer - ISO 18185 Part 7 35

3.4.2.2 E-seal verification according to ISO 18185 37

3.4.2.3 Brief technology introduction 39

3.4.3 Standardisation of business processes of terminals and

operators 41

4 CHINOS Requirements 42

4.1 General Technical requirements 43

4.1.1 Reading distance 43

4.1.2 Speed during readout 43

4.1.3 Cross-talk 43

4.1.4 Environmental conditions 43

4.2 Requirements in different scenarios 44

4.2.1 Container handling equipment scenarios 45

4.2.2 Hand-Held scenarios 46


CHINOS 02-RD-D0.4-2009-draft IV

4.2.3 Restricted lane scenario for truck and rail 47

4.2.4 Special requirements of the quayside scenario 48

5 The CHINOS components 50

5.1 System Architecture 51

5.2 Data flows 54

5.3 The Automatic Container Identification Unit 55

5.3.1 Stationary Automatic Container Identification Unit (ACIU)

Prototype 55

5.3.2 Test results 55

5.3.3 Handheld Prototype 56

5.3.3.1 The UHF System 57

5.3.3.2 The Savi System 57

5.4 The Damage Documentation System 58

5.4.1 System requirements and objectives 58

5.4.2 Technical Possibilities Overview 59

5.4.2.1 Advantages 59

5.4.2.2 Disadvantages 59

5.4.2.3 Limitations 60

5.4.3 Introduction to the Damage Documentation System 60

5.4.3.1 Cameras 61

5.4.3.2 Handheld Damage Documentation System 64

5.5 The Chain Event Manager 65

5.5.1 Setup of the Chain Event Manager 69

5.5.2 Generating Events 70

5.5.2.1 Deriving Events from RFID information 70

5.5.2.2 Deriving Events from interfaces 70

5.5.2.3 Generating events using mobile communication 70

5.5.2.4 Generating events using GPS information 72

5.6 The Communication Controller 73

5.6.1 Business Processes 73

5.6.1.1 Truck (gate-in and gate-out) 73

5.6.1.2 Train (gate-in and gate-out) 74

5.6.1.3 Vessel 74

5.6.2 Use Case Model 75

6 CHINOS tests in real-life environments 77

6.1 NTB terminal Bremerhaven 77

6.1.1 Stationary ID Gate “train” 77

6.1.1.1 Installation 77

6.1.1.2 Test scenario 78

6.1.1.3 Damage documentation 79

6.1.1.4 Results of the stationary ID Gate “train” 80

6.1.2 Mobile ID point “train” 81



6.1.2.3 Results of mobile ID point “train” 82

6.1.3 Stationary ID Gate “truck” 82




CHINOS 02-RD-D0.4-2009-draft V

6.1.3.3 Damage documentation 87

6.1.3.4 Results of the stationary ID Gate “truck” 88

6.1.4 Mobile ID point “truck” 88



6.1.4.3 Results of mobile ID point “truck” 88

6.1.5 Mobile ID point “vessel” 89



6.1.5.3 Results of mobile ID point “vessel” 89

6.2 Polzug terminal Pruszków 89

6.2.1 Stationary ID Gate “train” 89



6.2.1.3 Results of the stationary ID Gate “train” 91

6.2.2 Mobile ID point “train” 91



6.2.2.3 Results of mobile ID point “train” 91





6.3 Container Terminal Thessaloniki 94

6.3.1 Mobile ID point “vessel” 94



6.3.1.3 Results of mobile ID point “vessel” 95




6.4 Conclusions of the real-life tests 96

6.4.1 Bremerhaven test conclusions 96

6.4.2 Pruszków test conclusions 97

6.4.3 Thessaloniki test conclusions 97

6.4.4 Overall technical Conclusions 97

6.5 Analysis of the real-life test 98

6.5.1 Performance criteria 99

6.5.1.1 Performance criteria for terminals 99

6.5.1.2 Performance criteria for transport operators 99

6.5.1.3 Performance Criteria for transport

organizers/freight integrators 100

6.5.2 Cost-Benefit Analysis 100

6.6 Results of the test analysis 102

6.6.1 The logical framework matrix 104

6.6.2 Effectiveness of CHINOS system 109

6.6.2.1 Reliability 109

6.6.2.2 Validity 109

6.6.2.3 Usability 109


CHINOS 02-RD-D0.4-2009-draft VI

6.6.2.4 Technical endurance 110

6.6.2.5 Cost-effectiveness 110

6.6.2.6 Ability to support decisions 112

6.6.3 Impact of CHINOS system 113

6.6.4 Relevance of CHINOS system 114

6.6.5 Sustainability of CHINOS system 114

6.7 Analysis Summary 115

7 Exploitation Plans 117

7.1 Initial Plans 118

7.2 Dissemination and Exploitation Actions 118

7.3 External limitations and challenges 119

7.3.1 Investment of IT system providers 119

7.3.2 Leading Shipping Company to implement system 120

7.3.3 Terminal operators and shippers to motivate shipping Lines 120

7.3.4 Forming a consortium to implement the system 121

7.3.5 Political influence 121

7.4 Summary on exploitation 122

8 Conclusions 124

9 Acknowledgements 127

10 References 128


CHINOS 02-RD-D0.4-2009-draft 7

1 Executive Summary

CHINOS is the acronym for the project "Container Handling in Intermodal Nodes –

Optimal and Secure!", supported by the European Commission under the Sustainable

Development, Global Change and Ecosystems thematic area, Sustainable Surface

Transport Programme of the 6th Framework Programme. The support is given under the

vehicle of STREP, Contract No. TST5-CT-2006-031418.

This deliverable is the final report of the CHINOS project. It summarizes the approach of

the project, the work performed, and the results of the validation tests.

CHINOS aims at the optimisation of logistics procedures and the increase of security in

container transport by applying a set of technical components such as

• RFIDs as container tags and electronic seals for automatic identification of

container and seal and automatic check of the seal condition

• a system for documenting damages when taking over a container into the own

responsibility

• a component for improved monitoring of the container chain by applying the

Supply Chain Event Management (SCEM) approach

• a basis for communication of these data including the link to legacy systems of the

partners along the chain.

These CHINOS components have been validated in different geogrpahical locations

across Europe: in a large sea port in the North Sea (Bremerhaven), a medium-sized port

in the Mediterranean (Thessaloniki), as well as rail terminals/freight villages in Poland

(Pruszków) and Austria (Graz).

The test results clearly show that the components are applicable and beneficial for

optimising container chains especially in the transfer nodes. However, it was also noted

that the shipping industry is still reluctant in equipping their freight containers with RFID

tags and electronic seals on a voluntary basis. Reasons are for example the imbalance of

costs and benefits or still missing standards to secure investments (since container

shipping is a global business requiring global solutions).



2 CHINOS Objectives

The CHINOS system is required to provide more reliable data on the state of containers

from logistical and security point of view.

Presently, shipped goods can only be tracked at a few specific points in their logistics

journey, usually at the shipping and receiving ports and at customs points and some trailer

parks. But a common occurrence is that a container is found to have been tampered with

during its journey, and the full or partial shipment has either gone missing or been

damaged. But it is usually extremely difficult to determine at what point during the journey

the damage or theft has occurred, and therefore blame or responsibility cannot be

apportioned.

There are a few systems on the market that address some of these concerns, but they

range from basic mechanical solutions to more sophisticated electronic devices and are

virtually without exception proprietary systems that are incompatible with each other and

do not comply with the proposed Global Standards for container identification.

Some standards do already exist, but they do not encompass the latest technologies

available on the market nor do they comprehend all three aspects of container status

management, namely:

• identification

• seal condition and

• damage documentation.

The CHINOS system aims to address these issues by encompassing all three ‘container

status monitoring’ parameters into one single system as well as ensuring that the overall

system is compatible with the upcoming container traceability standard proposals. The

system is also fully electronic which allows for remote identification and monitoring. The

data can also be stored and retrieved, either in real time or as historical data for analysis

and statistical evaluation purposes.

The system consists of an electronic RFID transponder (also referred to as a Tag)

attached to the container, able to provide positive unambiguous identification of a

container. An electronic seal (e-seal) uses the current mechanically robust door seal

mechanisms but adds the electronic RFID technology to enable seal identification and

additional tamperproof electronic security to the device.

The damage documentation system (DDS), finally, ensures that a container cannot be

illegally penetrated in order to access the goods without authorisation. It also serves the

purpose of being able to detect accidental handling damage to the container which may

have a detrimental effect on the goods inside the container. This offers the possibility of

determining the origin and location of any damage and being able to help in apportioning

responsibility for it.

The typical logistics journey of a container is complex, often starting its journey by road or

rail before being transferred at a port or container terminal to a ship whereby it may be

transported to another continent. And on arrival, the container will most likely follow a



similar road or rail journey in reverse before reaching its final destination. The duration of

each sector of the journey is variable. The identification stations therefore need to be

flexible enough to encompass the need to monitor a container whilst moving by road or

rail as well as the need to be able to individually access the information by hand in a port

or trailer park, using mobile hand terminals.

The data about the identity, seal condition and physical condition of the container then

needs to be communicated to a central database able to be accessed in real time by its

authorised users.

A significant challenge of this project is ensuring that the data from several inherently

incompatible systems is translated cohesively into a single system architecture compatible

with the existing complex systems such as the port operating system.



3 The CHINOS starting point

3.1 The ocean container industry today

3.1.1 Market and players

The Ocean Container Industry (OCI), and especially container carriers and container

terminals, is certainly the maritime sector with the highest growth in the last decades.

However, apart from inherent positive economic results, the strong growth in container

volumes also raises the question whether today’s container terminals are sufficient to

handle it. This is amplified by an increased concern for maritime safety, security, and

environmental protection, the policies for which may have side-effects on the logistical

aspects of the OCI. Investment in container terminals, containerships as well as

information and telecommunications technologies are indispensable.

The use of Automatic IDentification (Auto ID) technologies, which could be used for the

tracking, has also significantly grown over the years. Among Auto ID technologies, there

has been much controversy regarding Radio Frequency Identification (RFID) technology.

Although RFID’s traces can be tracked back in the 1960s or even before, RFID had not

gained enough publicity until the decade of 2000. Retail industry giants like Wal-Mart or

METRO lead the utilization of RFID tags. Moreover, RFID currently attracts the increasing

interest of academics, statesmen and other stakeholders. In the microcosm of shipping,

RFID was still at its infancy until five years ago. Yet, many applications have emerged

during the last couple of years and the future looks promising.

Both ocean container carriers and container terminals, the two chief stakeholders of the

OCI, have exhibited a remarkable growth in the last decades. Whereas world fleet

capacity reached 857 million tons at the end of 2003, an increase of 25% over 1980,

containership fleet capacity increased 727% during the same period. Indeed, the

containerships tonnage on order is ca. half the current containerships fleet tonnage,

whereas this ratio historically has been about 30% (The Economist, 2007). World

container port throughput for 2002 reached 266.3 million TEUs1, an increase of 22.5

million TEUs, or 9.2%, over 2001 (UNCTAD, 2004). World container throughput is

expected to rise by ca. 10% per annum. In fact, Trans-Pacific and Russian container

cargo is projected to increase at levels 10-12% and 15-20%, respectively (ICC, 2005).

The ocean container carriers sector shares the characteristics of its “mother” liner market.

Liner companies operate in a conference (cartelized) system dispatching unitized, that is,

containerized, cargo of relatively high value. Containerships are comparatively expensive

high-speed ships with rapidly growing capacities. Liner fleets sail partly full throughout

fixed schedules. Seaborne container carriers exhibit a remarkable concentration: in 2004,

the top 10 industry players held 53% of market (BRS-Alphaliner, 2005). Containers’ gates

to the hinterland are the water container terminals; so, it has evolved interdependence –

with its inherent tensions and partnerships- between ocean container carriers and water

container terminals. Actually, certain ocean carriers’ subsidiaries have entered the

1 TEU: Twenty foot equivalent unit.



terminals’ business through acquisitions. Whereas carriers’ core business is the

dispatching of containers, the terminals are involved in a plethora of container handling

operations such as loading/unloading, storage, and link with other modalities, among

others.

Apart from the maritime transport and handling, the door-to-door delivery of containers

involves also rail, truck or barge transportation/handling. Ocean carriers monopolize the

transport of containers between different continents, trucks always deal with “the last

kilometers to the final destination” (e.g., warehouse), while rail gains share in large volume

inland O/D pairs especially between water ports and inland cargo centers. Since a

container may cross multiple countries before reaching its final destination, it is subject to

different legislations, customs requirements, stakeholders, etc. The various factors/players

that affect the transport of containers can be seen in Figure 3-1.

CarriersCarriers’ associations

Government inspectorsBrokers

OperatorsForwardersShippers

ConsigneesCustoms

National regulationsInternational regulations

Technical driversSecurity Initiatives

Politics

Figure 3-1: Various factors/players that affect container transport

3.1.2 Logistics view

We next present an overview of handling operations so as to thoroughly comprehend in

succeeding sections the concepts of container tracking, security, etc. For an international

shipment, the flow of a container usually has as follows (Figure 3-2): At the shippers’

warehouse the container is being loaded (e.g., palletized); it is then dispatched to a

consolidated warehouse (if any) via truck and afterwards to the port of departure by rail or

truck. Ships usually call at multiple ports before approaching the destination port of

container. The transshipment practice is often. At this practice, the container is unloaded

at an intermediate port (transshipment hub) and then loaded to another ship. Once the

ship calls at the port where the container is supposed to be unloaded, it is then usually

dispatched to a cargo center warehouse by rail or truck. At the end, almost always,

containers are transported to their consignees via truck.



Shippers’Warehouse

ConsolidatedWarehouse

Harbor ofDeparture

TruckTruck/Rail

Is next harbor the arrival harbor?

Ship

IntermediateHarbor

TransshipmentHarbor

Other ship

ShipHarbor of

ArrivalYes

No

Consignees’Warehouse

TruckCargo CenterWarehouse

Rail/Truck

Figure 3-2: Suggestive non-detailed door-to-door transportation flow of

seaborne containers

For the case of a container that enters the port from the sea, the operations are as

follows. Ships wait in the harbor until they moor at a berthing point along the quay. Once

the ship berthing process has been accomplished, the standard container handling

procedures begin (like lashing/unlashing). Then, the gantry cranes unload/load containers

off/on the deck/hold to the berth. Each time a container is unloaded, personnel visually

checks the container ID, the seal intactness and if there is any damage. Once the

unloaded container is checked, the internal port vehicles (like straddle carriers or other

cranes) dispatch it from the yard to the berth and vice versa. Containers are stored at the

yard stack till they are transshipped to another ship or till they are dispatched to another

inland destination. Regarding the latter, a truck driver comes at the truck gate from an

inland origin (e.g., depot). At the port truck gate three principal procedures take place:

documentation, inspection, and assignment to a “parking” location. At the same time, the

same assignment is given to the first available straddle carrier, which is going to load the

container off the stack and load it on the truck. Again, the state of the container and its

identity are checked. Once the loading is completed, the truck drives towards the port gate

exit where a final documentation and check takes place. See Figure 3-3 for a synoptic

representation of this process.

Ship QuayYardStack

TerminalGate

ConsigneeGantryCrane

StraddleCarrier

Truck Truck

Figure 3-3: Flow of ocean containers at a port

Inevitably, the above plethora of container handling operations is not devoid of executional

problems. The slow upgrade in container handling infrastructure, the involvement of

multiple players, and the imposition of many regulations result in significant delays,

something that also has monetary implications. These problems are epitomized in the

policy statement of the International Chamber of Commerce on maritime transport:



“Freight transportation infrastructure into and from ports and to the regions they serve is

increasingly incapable of adequately handling current cargo volumes.” (ICC, 2005)

The chief symptoms of executional problems we diagnosed are the following:

• Excessive time waiting before mooring;

• Unsatisfactory terminal productivity;

• Congestion at truck gates;

• Exceedingly time-consuming inspection procedures;

• Information sharing among stakeholders below expectations;

• Coordination problems.

The main reason behind these symptoms is that container traffic increases rapidly and the

container handling infrastructure (equipment, procedures, etc.) is not modernized in a

similar pace. In other words, the improvement in container handling infrastructure lags this

tremendous increase in container volumes. This project investigates the utilization of RFID

so as to alleviate these symptoms.

3.1.3 Maritime safety, security and environmental protection in the OCI

Initiatives for increased safety, security and environmental protection would, indeed,

aggravate the above symptoms. The side-effects of these initiatives superimpose onto the

actual efficiency of operations because the lawmakers typically do not factor implications

on operational aspects. However, following the 9/11 attacks, the US is focusing on

transportation security and, especially, on the security of containers inasmuch as the

majority of the cargo entering the United States is coming in seaborne containers. To

advance security, the Container Security Initiative (CSI), the Electronic Container Seal (E-

Seal) and Radio Frequency Identification (RFID) technology are introduced. US port

operators currently inspect 2% of the more than 6 million containers that enter the US per

annum. However, since the US fears that containers will be a modus for terrorist attacks,

they want to increase the number of inspected containers. This could create chaotic

delays as the infrastructure is certainly not ready to handle this.

Inspection is a significant, yet bureaucratic and time-consuming procedure. In the

example of a certain EU port we investigated, ca. 2% of all the ocean incoming containers

are checked for security purposes. Truck incoming containers are usually not checked.

This check is not homogeneous in the sense that the majority of certain sets of “suspect”

containers may be inspected while other non-suspect sets may not be opened at all. This

is performed via a decision-support inspection system, which produces a probability

inspection function. Variables of the function are cargo data like origin, destination, etc. In

essence, this program resolves the containers that will be checked. The inspection takes

place only after the container has been stacked, the operator has adduced declarative

documents to the customs, and the container has been stored in the port information

system as a stored container. If the decision support system suggests the inspection of

the container, the customs broker/clearer communicates with the customs the inspection

command. Promptly, the container is “blocked” and the container operator is informed via

an XML message. Then, the container is moved to the area where the inspection takes

place. When the inspection finishes, a new seal is put to the cleared container, the



customs “unblock” the container, and the container is again stacked. Thus, the unblocked

container can be retrieved by a trucker.

Whether the initiatives for increased safety, security and environmental protection are

contradictory with operational excellence or not, it is certain that these initiatives will be

the drivers for change in container transport. Thus, the ocean container carriers and the

port terminals that will deliver enhanced safety and security will attain a competitive

advantage. Although RFID utilization is not mandatory, RFID and other innovative IT

technologies can assist in regulatory compliance as regards safety, security and

environmental protection. A non-exhaustive list of these initiatives has as follows:

• International Ship and Port Facility Security Code (ISPS Code)

• International Convention for Safe Containers (CSC)

• International Container Security Organisation (ICSO)

• Customs-Trade Partnership against Terrorism (C-TPAT)

• Container Security Initiative (CSI)

• 24-Hour Advanced Manifest Rule (AMS)

• Bioterrorism Act (BTA)

• Cargo Handling Cooperative Program (CHCP)

• Operation Safe Commerce (OSC)

• Smart and Secure Tradelanes (SST)

• Seal Verification Programme

• Supply Chain Security Regulation

• Port security act of 2006

3.2 Anticipated changes and challenges

3.2.1 Market and technology changes

It is indispensable to discuss the anticipated changes that affect container handling,

because the use of RFID is heading at the future.

To start with, the industry itself changes. As regards ocean container carriers, the

concentration of industry is increasing. IBM business consulting services (2005a) predicts

that in some years from now, the top 10 players will control about 80% of the market, with

the next 20 players controlling about 15%, and all the remaining players sharing the last

5%. Moreover, ocean container carriers transform themselves from maritime carriers to

intermodal door-to-door providers. A holistic, supply chain based, end-to-end perspective

is certainly the trend and the vision. Furthermore, ships are becoming bigger with future

ships being able to carry more than 11,000 TEUs. The historical evolution of the size of

containerships can be seen in Table 3-1. In addition, we observe a new generation of

planners in the maritime industry that is more open (and familiarized) to high-tech and

optimization solutions. The last holds true also for container terminals.



Generation Period Capacity (TEUs)

1st pre-1970 1,700

2nd 1970-1980 2,305

3rd 1981-1986 3,220

4th 1986-2000 4,848

5th 2000-2006 7,598

6th 2006-? 11,000

Table 3-1: Historical evolution of containerships size (updated table contained

in IBM, 2005b).

Secondly, there are anticipated changes in technology standards. Standardization will

regard many aspects that affect RFID in the OCI. Regarding the container seal, we note

that the result of the Customs Convention on Containers, which took place in Geneva in

1972, is hundreds of different seal designs to have been created. To tackle this, technical

committee ISO 104 has been working since 2005 to develop international standards on

mechanical and electronic seals as well as on stronger design of container doors.

Regarding RFID standardization, evolution is under its way including signal strength,

container tag specifications, etc. The advances in Ultra High Frequency RFID systems,

which have increased significantly readability, is an area that we should expect more to

evolve in the next years.

Finally, and more relevant to our research, big ocean container carriers are expected to

be the pioneers of large-scale RFID usage in container operations while smaller ocean

container carriers, terminals and inland transport operators the followers. This is the

observation stemming from our bibliographical research that is contained in CHINOS

deliverable 1.4 “Summary of project review”.

3.2.2 Strategic challenges for container transportation

The growing trend toward globalization is presenting the logistics industry in general, and

container transportation in particular, with a multitude of strategic challenges. The main

issues facing container transportation are growing infrastructure pressures, increasingly

sophisticated customer requirements, and the demand for tighter security by statutory

agencies and private enterprise. This chapter will discuss these challenges and identify

areas where innovative IT can help master them.

3.2.2.1 Growing infrastructure pressures

Figure 3-4 shows the development of global container-handling volumes between 1980

and 2004 in million TEU (twenty-foot equivalent unit), as well as growth forecasts based

on selected surveys (ISL 2005, page 7).



Figure 3-4: Global container handling volumes in million TEU

As Figure 3-4 shows, container transportation has seen decades of steady growth.

Forecasts suggest that this trend will continue. Figure 3-5 compares the volumes of

different cargo types handled by Europe’s main ports (Grossmann et al. 2006, page 65).

Although, container goods currently account for a smaller proportion of cargoes than solid

and liquid bulk goods, the picture will have changed dramatically by 2030. This

development highlights the key role of container transportation in handling global trade

flows.



Figure 3-5: Handling growth in Europe’s main ports by cargo type

These high growth rates have a downside: they lead to an infrastructure shortfall at ports

and within inland distribution networks, where capacity must be expanded to keep pace

with increasing handling volumes. The problem is compounded by the trend towards

larger container ships.

Figure 3-6: Container fleet development by TEU-size classes, 2001 – 2005



As Figure 3-6 shows, the number of container ships with a capacity above 4000 TEU has

increased sharply in comparison to vessels with a capacity below 4000 TEU (Heideloff

2005, page 2). This means that port facilities need to cater for larger ships, and that a

greater number of containers have to be unloaded from each arriving vessel. This

aggravates the capacity deficit, as in addition to the general increase in handling volumes,

there will be a rise in peak demand, i.e. the maximum number of containers unloaded per

time unit.

Port congestion is already having a negative impact on trade. The Hamburg Institute of

International Economics (HWWI) estimates that capacity problems at ports led, globally, to

additional costs of $34 to $57 billion in 2005 (Koller, Pflüger and Roestel 2006, page 12).

These are mainly attributable to congestion surcharges levied by port operators, as well

as to longer transit times and greater need for intermediate storage.

There are basically two ways to address the infrastructure shortfall: create additional

capacity, or utilize existing capacity more efficiently. The latter can be achieved by making

greater use of information technology.

3.2.2.2 Increasingly sophisticated customer requirements

A further trend that has emerged in the past few years, and is set to continue, is the

outsourcing of logistics services to third-party providers (3PLs). In 2002, the outsourcing

rate for administrative and operational logistics services in major industries was 50

percent, while the figure in the retail sector was 40 percent; EU-wide, this market was

worth €585 billion (Darkow/Kieffer 2004) page 30). The proportion outsourced is expected

to grow at an annual rate of 5 to 6 percent. Among other things, this is due to the greater

service depth 3PLs are being asked to provide. For example, the market for complex

logistics services in the areas of systems integration and supply chain management is

growing at a very high rate: 15 to 20 percent per year (Darkow/Kieffer 2004, page 30 f.).

While the market for third-party logistics services is growing overall, customers of 3PLs

are only prepared to partner with a limited number of providers, as the annual Third-Party

Logistics Study (Langley et al. 2006, page 6) indicates. According to its findings, 65 to 80

percent of respondents employ between one and five different 3PLs. And 55 percent of

them plan to reduce the number of 3PLs they work with. This means that to join the select

few providers who have direct contact with the customer, a 3PL must offer a portfolio that

covers most of the customer’s requirements. There are two ways of achieving this: a 3PL

can broaden the scope of its services by acquiring suitable competitors; according to

Klaus (Klaus 2004, page 57), this was the main strategic motivation for recent acquisitions

in the logistics industry. Alternatively, a 3PL can augment its portfolio by including the

services of other providers. Key to success with this is the ability to manage and

coordinate processes across enterprise boundaries. This paper will discuss how

information technology can facilitate this task.

In addition to breadth of service, price and quality remain the chief criteria by which

customers select logistics service providers (Langley et al. 2006, page 6). From the

customer’s perspective, quality primarily means reliability and visibility: the two key factors

enabling a company to reduce its own inventories (Hingorani/Moore/Tornqvist 2005, page

2). Information technology can play a useful role here – both by cutting costs through

greater process standardization, and by increasing visibility and transparency.



3.2.2.3 Demand for tighter security by statutory agencies and private enterprise

In the wake of the 9/11 atrocities, the terrorist threat has reached unprecedented levels.

Governments, especially the United States administration, regard international maritime

trade as particularly vulnerable to extremist attacks. Through its new Department of

Homeland Security (DHS), the United States has launched a number of initiatives to

increase maritime security. The two key thrusts of associated activities are to reduce

vulnerability to terrorist activities, and to minimize the impact of an attack. Container

transportation plays a significant role for the USA, with 95 percent of imported goods

transported by container (Arendt 2006, page 4). The most important initiatives are outlined

below.

The objective of the International Ship and Port Facility Security (ISPS) Code is to

increase security on board cargo ships and at ports by requiring the companies concerned

(i.e. ship-owners and terminal operators) to develop security plans. To meet the Code’s

requirements, these plans must be certified by a national body authorized by the USA for

this purpose. Companies that do not meet ISPS certification requirements by July 1, 2004,

may face sanctions when their vessels arrive or undergo customs clearance at US ports.

The Customs-Trade Partnership against Terrorism (C-TPAT) is a partnership between the

US Customs Service and the US business sector (specifically, importers, carriers and

freight forwarders). Its goal is to build cooperative relationships that strengthen overall

supply-chain and border security. Participation by private enterprises is voluntary. To be

certified, companies must be prepared to disclose the security measures they have

implemented. These are individually checked and evaluated against a variety of

parameters, such as staff safety, physical security, access control, safety and security

training and security plans. Additional measures may have to be adopted before

participation in the C-TPAT program is approved. The Customs Service reserves the right

to subject participating companies to ongoing monitoring of their security compliance. In

return, the companies have been promised faster and simpler clearance of their goods at

sea ports (see US Customs & Border Protection 2004, page 7 ff.). A related initiative was

the proposed Green Lane Maritime Cargo Security Act, involving the creation of so-called

“green lanes” at US port facilities to expedite clearance for C-TRAT-certified transport

companies. However, this bill was never approved by Congress.

The Container Security Initiative (CSI) was introduced to enable faster and more reliable

identification of containers that pose a potential terrorist risk. There are several elements

to this program: First, pre-screening of containers before they are shipped to US ports: to

this end, the US Customs Service is collaborating more closely with other customs

administrations in order to share the container-related data on their IT systems. This can

be employed for the timely identification of containers that pose a risk. Second, exploring

the feasibility of using of non-intrusive inspection techniques such as x-ray detection to

screen containers for hazardous materials. Thirdly, development of smarter containers

capable of alerting customs personnel if a container has been tampered with during

transit: this includes the development of e-seal technology, which will be described in

detail in section 3.5.3 (see US Customs & Border Protection 2006, page 2 ff.). Note that

the CSI has not yet led to the adoption of any regulations mandating the use of specific

technologies to enhance container security.

A further Department of Homeland Security measure is the US Customs 24 Hour Advance

Manifest Rule which requires that manifests – containing a precise description of each



container’s contents, route, shipper and foreign port of departure – must be transmitted to

the US Customs Service 24 hours prior to shipment in the port of lading. Where

necessary, this enables the Customs Service to issue a “Do Not Load” message for

specified containers. A carrier who does not comply with this instruction will be refused

permission to unload the container at any US port (see US Customs & Border Protection,

2003).

But it is not only statutory bodies that are pushing for improved container security.

Safeguarding the supply chain is a major concern for the business community, too. In a

study by AT Kearney (AT Kearney 2005, page 2), 183 of the USA’s leading global

importers and exporters were asked to name the biggest challenges facing their overseas

supply chains. The most frequent response was container security. As the study goes on

to explain, prioritizing this issue makes business sense – particularly for companies with a

strong brand identity – since any association with a terrorist attack would be extremely

damaging. Furthermore, investing in container security would pay off if tight restrictions

and conditions were imposed on container imports during a terror alert.

As well as avoiding extremist attacks, the business sector is also interested in reducing

loss and theft. The Transported Asset Protection Association (TAPA) is an association of

security professionals, high-technology firms and high-value goods manufacturers. Its

objective is to promote positive change in the security practices of the freight

transportation and insurance communities. TAPA has defined Freight Security

Requirements (FSR) used to assess and certify the security of suppliers’ and shippers’

warehouse and transportation processes. TAPA was established in the USA in 1997,

extending its activities to Europe in 1999. Today, high-tech original equipment

manufacturers (OEMs) use TAPA certification as a key criterion for selecting logistics

operators.

Although many of the above initiatives focus on reengineering transportation processes in

order to improve container security, some of their innovations cannot be implemented

without effective information technology. Foremost among these are the obligations to

give the US authorities advance notification of planned container transports, as specified

by the CSI and the 24 Hour Advance Manifest Rule. To comply, carriers and terminals

need continuously updated data pools, and this presents enormous challenges to their

information systems. Furthermore, should the US Congress decide to mandate the

introduction of RFID-based e-seals within the scope of the CSI, this could force carriers to

develop new RFID and IT infrastructure from scratch. And even in the absence of

statutory requirements, economic factors alone may well motivate logistics companies to

invest in information technology that can improve container security.

In conclusion, information technology can play a role in mastering strategic challenges in

all three areas discussed above. IT can help address the infrastructure shortfall affecting

ports and inland distribution networks by optimizing the utilization of existing capacity.

Against a background of rising customer demands, IT can standardize processes, cutting

costs; integrate cross-enterprise processes; and improve transparency and visibility in the

supply chain. And in the context of tighter security, IT can be deployed for the timely

identification of high-risk containers, and to make the containers themselves respond

intelligently to tampering.



3.3 RFID fundamentals

Since a significant body of the container transportation and handling community is not

familiarized with RFID, we describe its key elements in this section to better understand its

status and perspectives in next sections. RFID description is compiled from various

sources and especially based on certain articles from “the RFID Journal”.

RFID belongs to Automatic IDentification (Auto ID) technologies. This family of

technologies includes the famous bar code system, optical character readers and some

biometric technologies (like retinal scans). Auto-ID technologies have proved to reduce

time and working resources needed and to increase data accuracy. Despite their practical

value, the fact that a person is needed to manually scan items is itself a constraint. It is

exactly this last part that RFID revolutionizes Auto-ID technologies.

RFID regards a system that transmits wirelessly the identity of an object using radio

waves. This identity is usually a unique alphanumeric string or, simply, a unique serial

number. RFID readers capture data on tags and transmit it to a computer system with no

human intervention. Tags come in many kinds and can be active, passive or semi-

passive. A typical RFID tag has a microchip attached to a radio antenna mounted on a

substrate (Figure 3-7). Typical memory capacity of the chip is about 2 kilobytes. The tag

antenna enables the tag to send and receive information. Passive, low- (135 kHz) and

high-frequency (13.56 MHz) tags usually comprise of a coiled antenna that couples with

the coiled reader antenna to create a magnetic field. Ultra High Frequency (UHF) tag

antennas can have many shapes. Data retrieval is performed with an RFID reader. A

typical reader has one or more antennas that emit radio waves and receive signals back

from the tag. Then the reader, often called an interrogator as it “interrogates” that tag,

transmits the information to a computer system in digital form (Figure 3-8). Readers also

have antennas which are used to emit radio waves. The reader antenna energy is read by

the tag antenna and is utilized to power up the microchip, which changes the electrical

load on the antenna and transmits back its own signal.

Figure 3-7: RFID tag photograph. (SAP, 2005)



Figure 3-8: The fundamental functioning of RFID. (SAP, 2005)

RFID has been used by thousands of companies (only a very few of those belong to the

OCI) in the last fifteen years. Yet, RFID gained enough publicity only recently.

High cost and executional malfunctions of RFID have limited its mass employment.

Regarding cost, there are many applications where the cost of tags is surely

counterbalanced by the benefits it provides. However, in the case of open supply chains

goods, where RFID tags are palletized by one company and read by another, cost has

been a major obstacle to adoption.

A milestone in the life of RFID has been the inauguration of the Auto-ID Center in 1999.

The Uniform Code Council and European Article Number International partnered with

Gillette and Procter & Gamble to found the Auto-ID Center at the Massachusetts Institute

of Technology (MIT). Principal objective of the center was to develop an RFID tag that

would be very low cost for high-volume production. To do this, MIT partnered with private

companies and ultimate goal was the 5-cent tag. Once such a cheap tag was attained,

companies could tag items they own and then connect them to the Internet through a

secure network. After some time, the center was under the aegis of the U.S. Department

of Defense and more than a hundred of international organizations. RFID was promising

to these companies supply chain visibility: knowing where each supply chain item is at any

time. The Electronic Product Code (EPC) was developed, a numbering scheme that

makes it possible to put a unique serial number on every item manufactured. Moreover,

the air interface protocol, a way for tags and readers to communicate, and a network

infrastructure that stores information in a secure Internet database were created. In this

way, a virtually unlimited amount of data associated with a tag’s serial number can be

stored online, and anyone with access privileges can retrieve it. The Auto-ID Center gave

its way to a non-profit organization called EPCglobal. Before the Auto-ID Center proposed

the EPCglobal Network, there was no way (other than manually phoning, faxing or e-

mailing) for “Company X” to let “Company Y” know that it has shipped something.

Inversely, there was no way for “Company Y” to let “Company X” know that the product

has arrived.



The potential impact from mass RFID usage in commerce is enormous. Supply chain

visibility could transform nowadays push system to a pull one. Today, companies plan and

execute based on forecasts. The produced goods are pushed into the supply chain. When

demand is greater than the forecast, sales (and customers) are lost. Otherwise, there are

excess goods that reflect a loss. The vision is that goods are pulled through the supply

chain based on real-time demand. RFID readers placed on shelves, on the backroom, on

warehouses, on manufacturer facilities and so forth would monitor how many products are

being sold and the products’ inventories. If we continue this retroactivity of RFID

applications, we finally have the manufacturer's suppliers. Wal-Mart in 2003 was the first

mega retailer to require suppliers to put tags on cases and pallets of goods. Retailer giant

METRO also employed RFID solutions and today many real RFID applications exist.

Apart from the biggest retailers, supply chain solution providers (SAP, Oracle, and

Microsoft) regard RFID as a powerful tool to optimize SC practices. Internet is expected to

further catalyze the mass employment of RFID.

Regarding RFID costs, the business encounters a chicken-and-egg problem: tags will not

become inexpensive until they are used massively, but a lot of companies will not exploit

them until the tags get really economical. The five-cent tag appears still unrealistic to be

created. In Table 3-2, one can see the major RFID costs.

Component Actual cost Cost depends on

Passive

tags1

20-40 cents (up

to several USD

for more

sophisticated

solutions).

Frequency (e.g., HF is more expensive than UHF)

Memory size

Antenna design

Packaging around the transponder

Active tags 10-50 USD Battery size

Chip memory

Packaging

UHF

readers

500-3,000 USD Dumb vs. intelligent readers

Single-frequency vs. multi-frequency readers

Middleware Depends on

application

Depends on application

1 Companies should bear in mind the cost of testing passive tags.

Table 3-2: RFID core components and costs

It would be one-sided not to present the common problems of RFID. Common problems

with RFID are reader collision and tag collision. Reader collision happens when the

signals from two or more readers overlap. As a result, the tag does not respond to

simultaneous queries. However, we can overcome this problem by careful design. Tag



collision happens when many tags exist in a relatively small area; but since the read time

is very fast, it is easier for vendors to develop systems that ensure that tags respond one

at a time. As containers are not so small objects, we conjecture that tag collision will not

be a problem in container RFID applications. Other technical challenges include ultimate

accuracy (99% accuracy is not satisfactory) and occasional electromagnetic interference.

Moreover, there are also organizational challenges related with the fact that the

importance of information sharing has not been acknowledged by the industry.

For comparative purposes, Table 3-3 is the résumé of the differences between bar coding

and RFID.

System specifications Barcode RFID system

Data quantity 1-100b 2-64kb

Machine readability Good Good

People readability Limited Impossible

Influence of dirt/damp Can lead to failure None

Influence of covering Can lead to failure Moderate

Data carrier cost Very low Medium

Reading electronic cost Low Medium

Unauthorized copying/modification Slight Slight

Multiple reading No Yes

Reading speed Relatively Low Fast

Direct line of sight required Yes No

Maximum reading distance Relatively short Several times longer1

Simultaneous scanning No Yes

Reusable No Yes

1 References report reading distances up to 80-90 meters.

Table 3-3: RFID vs. barcode systems capabilities

3.3.1 Container ID fundamentals

The major objectives of container ID tracking are to perform quickly and with accuracy: (a)

container identification; (b) seal check; (c) damage inspection. With current practices,

these tasks are done by multiple players (shippers, forwarders, consignees, etc). Indeed,

one stakeholder may do each task many times (e.g., as we know at a container terminal

all (a), (b), and (c) are done at the gate, at the quay, etc.). To make matters worse, the

different players do not share the information of the checks and these are inevitably

repeated.



Container identification regards the correct reading (and correct storage of this

information) of the markings that associate with the container ID. The principal ID marking

of the container and its explanation are depicted in Figure 3-9. The container identification

system specified in DIN EN ISO 6346 consists solely of the elements shown, which can

only be used together: owner code, consisting of three capital letters; product group code,

consisting of one of the capital letters U, J or Z; a six-digit registration number; and a

check digit. Typically, container ID check is done visually by employees and, rarely, via

video check done again by an employee. In any case, human intervention takes place.

Figure 3-9: Container ID markings (Source: www.containerhandbuch.de)

Container identification check should not be confused with seal check. The use of

container seals aims to “stamp” the correct loading of container and ensure its non-

malicious contents. Thus, if someone tampers illegitimately the container, the seal will

unveil this. After applying the seal so that the internal locking mechanism comes into play,

the operator must ensure that pulling hard on the head locks the seal. This will confirm

that the seal is locked and secure at the time of closure. Tampering is not only suggested

by a completely broken seal but also by other events. At destination, before breaking the

seal, the operator must check if the seal itself has indentations or scratches, which would

suggest tampering with the integrity of the seal. The head of the seal should be checked -

if it opens easily, this again would suggest tampering. Naturally, the identity (usually with

numbers) of the seal should also be checked. It is implied that the check of a mechanical

seal is necessarily done by a human. Mechanical seals of containers can be seen in

Figure 3-10.

Figure 3-10: Container seals (Sources: oneseal.com; esto.de; globeriders.com)

However, it is possible that a seal is broken and replaced in a way so that tampering is not

identified in the next check. To solve this, a specific workforce in ISO TC 104 discussed



various approaches to an electronic seal. Some basic principles have been agreed on

meanwhile: The standard electronic seal will be an attachment device fixed to (or

integrated into) the mechanical seal that secures the door of the container. A photograph

of an electronic seal is depicted in Figure 3-11.

Figure 3-11: Container e-seals. (Source:www.ejbrooks.com)

Finally, the third part regards damage inspection. It is observed that most of the damages

occur on the top of the containers because the spreaders of the straddle carriers exert

forces on the containers. A complete damage check must regard all six sides (top, bottom

and four sidelong sides) of the container. This is usually done visually by employees and

rarely via video check from an employee. For example, when a container is unloaded from

the sea it is checked from the bottom and sidelong. Moreover, when a straddle carrier

comes to move it to the stack, its driver checks for damage on container top.

3.3.2 RFID perspectives in (seaborne) containers handling

The primary goal of the literature review was to review previous R&D projects. However,

we leverage the literature review analysis to speak about the perspectives of RFID in

(seaborne) containers handling.

3.3.2.1 Drivers for RFID adoption

RFID perspectives in ocean container transport reflect both the perspectives of the ocean

container industry as well as the perspectives of the RFID technology itself. Regarding the

former, the container industry is the maritime sector with the highest growth in the last

decades. Current massive investments in container fleets and container terminals

modernization in parallel with the trade growth and the fact that an increasing number of

items are produced overseas of the place they are consumed render the future of the

industry promising. As regards the latter, RFID awareness is becoming rapidly increasing

regardless of the type of industry and application. Figure 3-12 exemplifies the exponential

growth of RFID applications, depicting the number of RFID-related articles based on

Factiva, a database of 8,000 news and business publications, by Dow Jones & Reuters.



Figure 3-12: Number of RFID publications (Source: Sheffi, 2004)

Another positive indication is the fact that the as-yet trials and real-world seaborne

applications of RFID are considered successful. Indeed, RFID results appear to alleviate

the symptoms of the executional problems diagnosed in container handling, as follows.

Congestion at truck gates: RFID-enabled gate procedures can decrease truck-in and

truck-out gate times significantly. Specifically, documentation of driver and truck can

happen automatically by means of RFID identification tags. Moreover, time for check of

container ID number and seal number can be reduced, if this is done automatically by

RFID readers placed at the gates. In any case, re-engineering of current processes is

necessitated.

Exceedingly time-consuming inspection procedures: The number of containers that are

opened at the designated port area in order to be inspected can be reduced. This can be

reached if the customs are automatically notified of the status of incoming containers.

Interrogators placed at the entry gate and at the bridge can provide the customs and

security departments with information about the seal intactness and about any changes in

the light, temperature or other conditions of the container. With this information, customs

could only inspect containers with atypical suspicious characteristics.

Unsatisfactory terminal productivity: RFID can be a part of the terminal’s arsenal to

improve their executional excellence. Terminal productivity suffers from mistakes that

occur at different parts of container handling, like wrong container identification. Both by

reducing human mistakes and by accelerating processes (v., the gate example above)

terminal productivity can increase.

Coordination & information sharing problems: Coordination between ocean, rail, and truck

carriers, shippers, terminal operators, and customs officials is certainly a convoluted task.

Coordination levels below expectations is a cause of poor terminal productivity. The

terminal must know with relative certainty the times of arrival of cars, trains, and vessels

(and of the containers carried) to optimally allocate its resources. RFID tracking could

provide traceability including en route tracking. Moreover, the deviation of the times of

certain business operations will be reduced. The creation of internet applications where

various stakeholders can securely read data obtained from RFID could boost information



sharing. In this sense, the port and other stakeholders will be able to more reliably

organize their schedules.

Reliability of RFID and related technologies is increasing. Research conducted in the last

years renders reader and tag collision a non-common malfunction. In any case, we can

overcome reader collision by careful design, while tag collision is not a common problem

in RFID-enabled containers. Other positive news regards reading accuracy, which can

reach ca. 99.9%. Moreover, several interoperability bugs have been resolved. These bugs

were generated by not proper integration of RFID architecture into other existing IT

technologies (like container operations systems, GPS, etc).

Most probably the main driver for RFID adoption is certainly the increasing need for

container security. Until 9/11/2001, the container industry was considered a relatively anti-

smuggling and secure transportation sector. With ca. 2% of the many millions of

containers now entering U.S. and E.U. ports every year undergoing screening, seaports

and container transport systems are now considered gaping holes of vulnerability. In

parallel, RFID and its auxiliary technologies have proved successful in tackling tampering.

However, regulations do not enforce the use of RFID; currently, RFID can assist in

reaching regulatory conformity, but is not mandatory. We speculate that future regulations,

probably originating from the US, will enforce the use of RFID. This will lead to the mass

adoption of RFID in the container industry.

In addition, executional excellence, which is so far overlooked, will be forwarded in the

next years as competition in the container industry is intense. The outcome of RFID from

other industries has proved to accelerate processes and alleviate bottleneck problems.

Moreover, RFID can help ocean companies to achieve process standardization and

systems integration. In the near past, ocean systems management suffered from obscure

ownership of processes, a phenomenon that is a remainder of the traditional, often

myopic, management of the industry. RFID offers an opportunity for standardization of

processes and integration of systems. These, in turn, can be the basis for operational

excellence.

Another positive indication is the increased use of the internet. The internet, with which

the maritime industry is familiarized, can provide complementary functions to the RFID

applications. The most important fact is that internet can be the user-friendly interface

between RFID and ocean stakeholders, who are not experts at IT matters. Often, ocean

players are sceptical of RFID as they deem it does not offer simplicity. This can be

provided by the internet. For example, shippers, carriers, terminal operators, etc. can just

access over a secure network with a password the status of their shipments and not

interfere with the actual RFID actions.

Last but not least, the cost of tags to the cost of the containers and of their contents ratio

is rather low. In this respect, even if the container tags do not get cheaper, this should not

be a problem for adoption.

3.3.2.2 Paths for RFID adoption

The paths for RFID adoption should be principally traced at RFID applications. These

applications regard mainly container boxes security, container boxes and processes

tracking, and admission control.



The RFID adoption path in the container industry has its pioneers/leaders and followers.

Large ocean container carriers, which also possess the majority of the container boxes,

along with the biggest container terminals are the pioneers. Small-to-medium-sized

carriers, terminals, and inland transport operators will follow. We suggest that now is the

right time for an ocean company to invest in RFID. To reach this conclusion, we studied

and compared RFID with other technologies that initially evoked scepticism and finally

were globally adopted, like the telephone and the personal computer. Specifically, the

RFID (beyond the container handling applications) resisted the effects of the technology

trigger, the peak of inflated expectations and the subsequent disappointment. Presently,

we think that it exhibits a steady progression in terms of adoption, which could lead to a

plateau in 10 years from now. Thus, a company in the container industry that now invests

in RFID will harvest RFID advantages to full extend. Being an RFID leader can contribute

to the company’s reputation as technologically advanced, secure, and highly efficient.

The RFID adoption path should not restrict itself to substituting other technologies. It is

important that processes are re-engineered. RFID technology cannot work alone. It should

be adopted in coordination with other modern, emerging or not, technologies. This is

something that is also identified by Sheffi (2004). Examples of such technologies with

which RFID could develop synergies are WiMax and ZigBee. WiMax, which stands for

Worldwide Interoperability for Microwave Access, is a technology that can beam

broadband signals up to 30 miles from a cell tower. The 802.16 standard, which the

WiMax Forum industry group is pushing, is designed to operate in unlicensed or licensed

frequencies from 2 GHz to 66 GHz. It was initially introduced as a last-mile alternative

to DSL and cable modem. Ultimately, WiMax proponents see it as the basis for

ubiquitous, continuous mobile wireless connectivity. The ZigBee Alliance is the driving

force behind the 802.15.4 technology, which operates in unlicensed spectrum, including

the crowded 2.4-GHz band. It can transfer a mere 250K bit/sec of data within a range of

30 to 200 feet.

A break down of the industry adoption paths in categories is as follows:

Solo: This path takes place when many organizations invest in the technology, but the

benefits are exploited by a single company. This path is happening in the retail sector

where retail giants like Walmart obliged their suppliers to use RFID in their pallets and

cases. We do not expect it to occur in the container industry.

Single-to-many: In this case, key investments are made by one partner but benefits

accrue to many stakeholders. This path, which has successfully been tested in the

semiconductor manufacturer Intel, could be an adoption path in the container industry. For

example, if an ocean carrier adopts RFID, the company alone will bear the investments

costs; however, many stakeholders –shippers, consignees, terminals, etc- will benefit from

increased visibility.

Partnership: In this path, both the investment in the technology and the benefits are

collective. The partnership method is very relevant in the ocean industry. For example,

coordination between carriers and terminals could promote both terminal productivity and

carriers’ schedule reliability. We think that this model can work very well in the industry.

Partnerships could also exist between companies that provide RFID solutions with

companies that offer IT services in the maritime industry. Thus, telecommunications

interoperability issues will be addressed.



Closed Loop: In this path, a single company invests in RFID and harvests its benefits. We

reviewed certain applications where this has taken place. We think that this is a very good

path for terminals to track their equipment internally (cf., the reviewed example of APL).

3.3.2.3 Challenges in RFID adoption

Our cautious optimism does not disregard the open challenges as concerns RFID

utilization, which are as follows.

Risk aversion of ocean stakeholders: As was to be expected, initially the players were

very sceptical of RFID. Specifically, the terminals did not want to permanently put on their

equipment (e.g., on the spreaders that connect the straddle carrier with the container)

RFID tools. Similar was the case for carriers regarding their containers. Dissemination

actions could assist in overcoming this challenge.

Standardization: Progress in global RFID, e-seals and other seaborne IT standards is

long awaited. However, the international EU, US and Asian committees have not yet

reached a modus vivendi.

Information issues: The modus operandi of the ocean industry is not accustomed to the

concepts of information sharing and collaborative optimization of processes. Moreover,

information ownership and security issues arise and there are certain legislative gaps.

3.4 Current Standards

This chapter deals with standards which are relevant for the CHINOS project, such as

RFID standards as well as standardized standards for terminal processes and security

measures.

In the early 1990’s, with the first commercial RFID systems starting to be more readily

available on the market, the need was seen to find a more efficient way of identifying and

tracking intermodal freight containers.

At the time there were just a few vendors with suitable products on the market, one of

whom, Amtech of the USA, was already working with the American Association of

Railroads (AAR) on an RFID standard for tracking railcars, an application with many

similarities to that of Intermodal Container tracking.

The resulting AAR RFID system was trialled on intermodal containers and early pilots in

1990 and 1991 and it showed to perform adequately for this application. The first standard

for electronic identification of Freight containers was thus drafted around the Amtech

system which is why Annex B of ISO 10347 is still covered by patents of the Amtech

Corporation.

As well as being able to identify and track Freight containers, it is necessary to seal them

in such a manner that they cannot be opened or tampered with without authorisation and

that any attempt to tamper with the seal should be clearly visible.

This led to the drafting of a standard (ISO/PAS 17712:2003) to provide a single source of

information on mechanical seals acceptable for securing freight containers in international

commerce. ISO/PAS 17712:2003 has now been withdrawn and has been replaced with

ISO/PAS 17712:2006.



But with the advent of Electronic Identification it was necessary to consider a new

standard for Electronic (RFID) seals – known as e-seals – and work on ISO 10185 was

started. This standard still encompasses the mechanical requirements of ISO 17712.

3.4.1 Freight Containers – Automatic Identification (ISO 10374)

ISO 10374 is the existing voluntary standard for RFID automatic identification of freight

containers. It is a dual frequency passive read-only standard that includes 850-950 and

2400-2500 MHz.

This International Standard specifies a system of automatic identification of freight

containers and the electronic transfer of the identity of the container and permanent

related information to third parties in a standard format. It is intended that the Automatic

Equipment Identification (AEI) system will facilitate documentation, resource control, and

communications (including electronic data processing systems). The visual container

identification markings specified by ISO 6346 are not affected. Future additions to this

international Standard will specify modulation, encoding and an open protocol.

Annex B describes the technical specification of a system that complies with the

requirements of this International Standard. Parts of Annex B are covered by patents held

by Amtech Corporation, 17304 Preston Road E 100, Dallas, Texas 75252 USA. The

patent-holder has stated that licenses will be granted under reasonable terms and

conditions.

This International Standard establishes

a) a container identification system which allows the transfer of information from a freight container to an automatic processing system by electronic means,

b) a data encoding system for container identification and permanent related information which resides within an electronic device called a tag installed on a freight container,

c) a data coding system for the electronic transfer of both container identification and permanent related information from an electronic device installed on a freight container to automatic data processing systems,

d) the description of the data to be included in the tag for transmission to the sensing equipment,

e) performance criteria necessary to ensure consistent and reliable operation of the automatic equipment identification (AEI) system within the international transportation community,

f) requirements for the physical location of the electronic device on freight containers, and

g) security features to inhibit malicious or unintentional alteration of the information content of the electronic device when installed on a freight container.

It specifies all necessary user requirements in order to permit international use of the tag without modification or adjustment.



This International Standard applies to freight containers as defined in ISO 668.

The use of AEI systems and the equipping of containers for automatic identification is not

mandatory. The purpose of this International Standard is to optimize the efficiency of

equipment control systems. For this reason, any AEI system used for identifying

containers shall conform to and be compatible with this International Standard

As mentioned before, this standard does not contain enough information about applicable

technologies (active, passive, etc.). Additionally there is a strong indication from several

standardisation bodies (received from ISL) that passive UHF-RFID (EPC Class1 Gen.2)

will be the technology of choice in the future.

It was therefore decided to carry out all tests with passive UHF-RFID technology.

3.4.1.1 Operating temperature range / environmental conditions

The container identification tags shall operate between -50°C and +80°C (permanent data

storage between -70°C and +85°C). The device shall not be influenced by salt water, oil,

ice, snow or dirt, or by other communication equipment working in the same frequency

range.

3.4.1.2 Container Speed

As the identification is taking place during loading and unloading of vessels, trains and

trucks, the following speeds and operating ranges are required to be met:

Speed Range Resolution

[km/h] [m] [m]

130 1 to 13 10

80 1 to 13 5

30 0.1 to 2 1.2

0 0.1 to 2 1.5

Table 3-4: Required technical parameters for container tags

Resolution is the minimal distance between two container identification tags. This is

important in order to distinguish between two containers located in close proximity of each

other.

3.4.1.3 Position of the identification tag on the container

Figure 3-13 shows the designated position for mounting a tag on a container:



Figure 3-13: Container tag positions

The tests were conducted using a metal plate of approximately 1 m2 in size to simulate the

container. This was felt to be representative – from experience – of the influence from a

metal container, since it is not practical to carry out tests with a real container (especially

the dynamic ones).

3.4.1.4 Container tag Data format

The standard specifies a required data format, but as this standard is fairly old the next

step will be to review the standard with the present knowledge of existing technologies

(which will be carried out by the standardisation body).



Figure 3-14: Current data format of the container tag

3.4.1.5 Basic principle of Operation

UHF-RFID operates in the frequency range of 868 to 928 MHz and uses passive

backscatter communication. The interrogator sends out an electromagnetic wave (data

derived by frequency modulation) which is received by a passive (i.e. no battery)

transponder with an integrated antenna.

FORWARD COMMUNICATION LINK (interrogator to transponder):

The incident electromagnetic wave is converted to DC voltage and used to power the

silicon chip in the transponder. When sufficient energy has been received, the chip starts

to operate and receives and demodulates the interrogator’s commands.

RETURN COMMUNICATION LINK (Transponder to interrogator):

Since there is no active transmission from the transponder to the interrogator, a principle

called “backscatter” is used. The interrogator emits an unmodulated continuous wave

which is reflected from the transponder antenna depending on the antenna’s state (open

or short-circuited). The transponder therefore sends messages back to the interrogator by

switching the antenna’s state within a specified timing. The variations in reflections are

detected and demodulated by the interrogator receiving circuit.



The system’s operating range is limited by two facts: A) The energy level to power the

chip (e.g. modern low power chips can operate at a greater distance) and B) the

sensitivity of the backscattered signal demodulator.

Leaving the physical principles aside, there are several ways of implementing such timing

and commands communication. Two popular and currently used standards are ISO

18000-6B and EPC Class1 Gen.2 (ISO 18000-6C). This latter one (EPC Class1 Gen.2) is

proposed to be used for container identification.

3.4.1.6 Container Tag

A special Intermec mount on metal transponder was used for these tests. The big

advantage of this device is the standard durable housing with an integrated spacer on the

back that would preclude the need to develop any special housing.

Figure 3-15: Intermec Large Rigid EPC Global Gen 2 Transponder

3.4.2 Freight Containers – Electronic Seals (ISO 18185)

Initial point of standard for electronic seals is ISO 17712 which describes conventional

security seals at basic structure.

A seal is officinal defined as:

• mechanical device marked with a unique identifier

• externally affixed to the container doors

• designed to evidence all tampering or intrusion through the door of a container and

to secure close the doors of a container

• seal provides varying degrees of resistance to an intentional or unintentional

attempt to open it or enter the freight container through the container doors.”

• not permit removal or undoing without breaking, or tempering without leaving clear

visible evidence.

A High Security Seal is constructed and manufactured of material such as metal or metal

cable with the intent to delay intrusion

3.4.2.1 Physical layer - ISO 18185 Part 7

ISO 18185 is a Draft International Standard for electronic container seals. It includes

passive and active protocols, enabling both simple low cost and more robust seals.



This International Standard applies to all electronic seals used on freight containers

covered by International Standards ISO 668, parts 1 to 7 of ISO 1496, ISO 830 and

should, wherever appropriate and practicable, be applied to freight containers other than

those covered by the aforementioned International Standards.

In view of the fact that this standard comprises so many parts this chapter will concentrate

only on the most important section in determining the RFID technology for the application:

The Physical or ‘Air Interface’ Layer as described by ISO 18185 Part 5.

This Part of the Standard provides the air interface between electronic container seals and

reader/interrogators of those seals and shall be used in conjunction with the other Parts of

ISO 18185.

The Standard describes the physical layer for ISO 18185 and ISO 17363 for Supply Chain

Applications of RFID for Freight Containers since it is expected that the implementation of

these standards will face the same international conditions. However, each of these

standards has their own unique requirements other than the physical layer. It is expected

that RFID Freight Container Identification (as specified in ISO 10374.2), ISO 17363, and

electronic seals, as specified in the suite of standards under ISO 18185, shall be able to

use the same infrastructure, while recognizing that that there may be requirements for

different frequencies for passive devices as opposed to the active devices identified in this

standard.

Figure 3-16: System Components

The main feature of the system is its dual frequency operation. There are two types of physical layers: � Type A physical layer is the 433 MHz as long range Link and OOK LF short range link. � Type B physical layer is the 2,4 GHz long rang link and FSK short-range link.

The e-Seal shall support both types of air interfaces. The data link protocols are different

for each physical layer. Interrogators and reader devices may support one or both types of

physical layers.



The e-Seal shall be capable of communicating on two long-range RF links and shall also

be capable of receiving LF magnetically coupled transmissions. Data may be transmitted

from the LF transmitter to the e-Seal(s) without acknowledgment (one-way link only).

Short range, low frequency short-range link between LF transmitter and e-Seal(s) is used

to localize e-Seal(s) inside the magnetically coupled transmitter antenna field of a LF

transmitter. Data is transmitted from the LF transmitter to the e-Seal(s) without LF

acknowledgment. All e-Seal(s) in the field of a LF transmitter receive LF transmitter’s data

simultaneously, i.e. it takes LF transmitter the same amount of time to transmit its data to

any number of e-Seals.

The long range links (433,92 MHz or 2,4 GHz) are used by e-Seal(s) to reply to the

Reader with the location (i.e. LF transmitter ID), its own identification (e-Seal ID), and e-

Seal Status data is transmitted from the e-Seal(s) to the Reader(s).

3.4.2.2 E-seal verification according to ISO 18185

The current version of ISO 18185 describes a system using pre-programmed (non

alterable) e-seals operating at 433 MHz. However, unofficial information suggests that the

standard is due to be changed to specify a hybrid system with an activation frequency of

125 KHz and transmitting frequencies of 433 or 2400 MHz.

The following sections of this document cover the test descriptions and results on

currently available devices on the market that are partly compliant (at least the physical

operating principle). The test results are comparable to devices required by the standard

(regarding read range, speed; data format and functionality may vary).

3.4.2.2.1 Functionality

ISO 18185 calls for a battery-operated, non-proprietary radio frequency device that meets

the following criteria:

• Built to comply with the mechanical properties of ISO 17712 (“High security

seals”).

• Ability to detect and log the events (event, time stamp) of sealing and the opening

of containers in a permanent memory

• Built-in real time clock

• A minimum operating lifetime of 60 days (with remaining spare energy)

3.4.2.2.2 Data content

E-seals should contain the following data:

• Seal tag ID (32 bit)

• Seal manufacturer ID (16 bit)

• Date/time when sealed

• Date/time when opened



• Protocol ID

• Model ID

• Product version

• Protocol version

3.4.2.2.3 Operating temperature range / environmental conditions

The container identification tags shall operate between -40°C and +70°C (permanent data

storage between -51°C and +85°C).

Electronic seals shall fully operate at -40°C after having been stored at -51°C up to 60

days. Additionally they shall fully operate between +38°C and +70°C after having been

stored at a minimum temperature of +85°C for 12 to 15 hours a day for 60 days.

The devices shall not be influenced by salt water, oil, ice, snow or dirt, or by other

communication equipment working in the same frequency range. Humidity of up to 95%

has to be endured.

3.4.2.2.4 Container Speed

As the verification of the e-seal status is taking place during loading and unloading of

vessels, trains and trucks, the following speeds and operating ranges are required to be

met:

Speed Range Resolution

[km/h] [m] [m]

50 1 to 10 3

30 1 to 10 1.5

0 0.1 to 2 1.2

Table 3-5: Required technical parameters for e-seals

Resolution is the minimum distance between two container e-seals. This is important in

order to distinguish between two container seals located in close proximity of each other.

3.4.2.2.5 Orientation angle between interrogator and tags

Due to the lack of orientation or presentation angles being specified in ISO 18185,

arbitrary representative values have been selected for these tests.

3.4.2.2.6 Position of the identification tag on the container

ISO 18185 does not specify an exact location of the e-seal device. But the most likely

place to fit an ID Tag is on the container door lock bar (see Figure 3-17).



Figure 3-17: Mounting a container seal

Since it is not practical to carry out tests with a real container (especially the dynamic

ones), the following tests were conducted using a metal plate of approximately 1 m2 in

size and a similar construction to a lock bar to simulate the container door arrangement.

This – from experience – was felt to be representative of the influence from a metal

container on an RFID transponder,

3.4.2.3 Brief technology introduction

As already mentioned above, the current version of the ISO 18185 standard does not

cover possible future technology changes (dual frequencies, LF-triggering, etc.). In order

to provide the reader with a basic understanding of the RFID technology used in these

tests, the following description is meant as a general overview.

An e-seal system in accordance with the expected new version of ISO 18185 consists

primarily of:

• an e-seal capable of detecting the time of closing and opening of a container,

receiving a signal in the LF frequency range (e.g. 125 KHz) and sending in the

UHF frequency range (433 or 2400 MHz)

• an LF-transmitter capable of transmitting data in the LF frequency range (e.g. 125

KHz)

• a UHF receiver capable of receiving data in the UHF frequency range (433 or 2400

MHz)



Figure 3-18: e-seal application components

When an e-seal enters the operating radius of an LF-transmitter (e.g. at a truck gate) it is

woken up and receives the LF-transmitter’s ID sent via LF radio (Figure 3-19).

Figure 3-19: e-seal activation

The e-seal immediately responds by sending the LF-transmitter ID and its own e-seal data

(status, ID, battery information) via UHF radio to a UHF receiver nearby.

LF-transmitter ID

LF-transmitter ID +

e-seal data

Transmitting

Radius up to 6m

e-seal

LF-transmitter UHF-receiver

Receiving

Radius up to 1000m



The UHF receiver decodes the data and obtains the following information:

• identity of the e-seal

• status of the e-seal (battery, tamper evidence, etc …)

• the location of the e-seal at the moment of passing through the LF transmitters

field (as his position is static and known)

The first commercially available e-seals from Savi achieved a dynamic read range of

approximately 4 m which is sufficient for train and truck gate applications, since the

approximate read range required for a 2.5m wide container is 2.25m (1/2 the container

width plus 1m clearance)

A comparison of dynamic and static tests shows that there is a difference in achievable

read range. Taking into account that an object is moving through the whole antenna field it

is understandable, that the dynamic read range will be approximately equal to the

maximum static read range.

Under laboratory conditions the first e-seals proved to be suitable for the application, but

the real test will be when they are tested under actual live conditions on a container.

3.4.3 Standardisation of business processes of terminals and operators

In the run of CHINOS workpackage 1 “Detailed Requirement Analysis”, business

processes analyses have been performed at all terminals involved in the project:

• NTB, Bremerhaven, Germany (vessel, rail, truck)

• Thessaloniki Port Authority, Thessaloniki, Greece (vessel, truck)

• Cargo Center Graz, Graz, Austria (rail, truck)

• Polzug terminal Pruszkow, Warsaw, Poland (rail, truck)

In spite of the fact that the examined business processes of the different terminals show

analogies at some points, especially container handling within specific transport modes, it

became obvious that the processes differ between the terminals to a sensitive extent. This

is due to the fact that the business processes on the one hand were developed in the

course of an evolutionary process within each single terminal and on the other hand of

course depend on national and regional conditions such as laws and regulations which

influence e.g. information flows.

As a result, it was concluded that a standardisation of processes transcending terminals’

borders is problematic, not least because the national and regional laws and regulations

the processes are imbedded into are still not standardized either. It is beyond the scope of

CHINOS to develop appropriate standards which can be applied throughout Europe.



4 CHINOS Requirements

This chapter describes the technical requirements for employment of the new

technologies. The technologies envisaged lead to certain technical requirements which

may vary from country to country or between terminals. Furthermore the reading

distances between the tags and the interrogator vary in the same way regarding to the

different maximum allowed strength of signals in the countries. For finding the right

requirements the container handling scenarios of each terminal have to be taken into

consideration. The technical components of the CHINOS system are:

• Container license tag

• eSeal

• Damage documentation using optical devices

• Reading devices for transponder data (fixed and mobile)

The container license tag is specified in the standard ISO 10374. It is an old version from

1995. The eSeal is specified in the standard ISO 18185, which is a worldwide standard. In

general, the new components are supposed to operate in the standard MIL810F.

Table 4-1 shows in the blue marked column the 433 MHz frequency. This frequency is

most widely accepted in international areas.

Table 4-1: Frequencies and availabilities (based on www.autoid.org)



4.1 General Technical requirements

This chapter deals with technical requirements which must be met for the successful

application of RFID technology in the container terminal. These are e.g. reading distances

and the speed of container carriers.

4.1.1 Reading distance

The reading distance denotes the distance between RFID tag and RFID reader, inside of

which the reliable readout of the tag is possible. A limited reading distance primarily

affects fixed mounted readers. In contrast to fixed readers, handheld readers are operated

by employees who hold the reader close to the tags for readout. Due to this fact, a limited

reading distance is of less importance for handheld readers.

In the areas of gate and rail operations, which in principle allow the application of fixed

mounted readers, a reading distance of 4m is sufficient. Only at the container crane a

reading distance of 16 m would be necessary in case of fixed mounted readers, which is

not possible with current technology. As a consequence, handheld readers will be used

here. The mounting of any equipment at the spreader of the container crane is not

possible.

4.1.2 Speed during readout

The driving speed of container carriers (truck, train) during readout of the RFID tags

during entry and exit of the terminal will not exceed 30 km/h. The RFID technology has to

ensure the reliable readout of tags and eSeals up to this speed. It has to be taken into

account that a standstill of the vehicles is possible in the readout areas. The repeated

readout of the same tag in this case has to be avoided by appropriate measures.

4.1.3 Cross-talk

The term cross-talk describes the unintentional readout of a container if more than one

container is located in the readout range of the RFID reader. This problem occurs if

several containers are located close to each other, e.g. in case of several lanes at the

gate, twin lift, or containers on the same wagon or trailer.

In case of the eSeal, this problem can be solved by sending a wake up signal at 125 kHz

with a very narrow shape and a limited reading distance (“Signpost” technology). This

signal contains the reader’s identity. An eSeal which is woken up by the wake up signal

answers by sending its data together with the reader’s identity on the frequencies for data

transmission 433 MHz or 2,4 GHz. Hence, it is ensured that only the desired seal located

within the range of the wake up signal sends its data.

In case of the container tag, the problem of cross-talk is not as critical due to the reduced

reading distance of the passive container tags with respect to eSeals. This effect has to

be examined and avoided by fine tuning of the readers’ reading distances or the mounting

of shielding.

4.1.4 Environmental conditions

Containers (equipped with Tags/eSeal) are typically subjected to the harsh environments

of the marine, rail and road transportation industries. Sand and dust, salt spray, grease,



ice, snow and grime can be expected to coat of the sensing equipment (Tag/eSeal/cams).

The technologies shall fully operate during and after having been subjected to humidity of

up to 95% non-condensing. Substantial temperature variations are common in worldwide

container operations, as well as prolonged exposure to sunlight, including ultraviolet rays

or to deep temperatures. The components shall operate satisfactorily at surface

temperatures between -40°C up to +70°C and shall survive and maintain the integrity of

stored data at temperatures from -70°C up to +85°C.

The technologies shall be capable of full operation in the electromagnetic environment

typically found at transportation facilities (e.g. WLAN, wireless data transmission, ship

borne radar) and electrostatic discharge. The device shall survive and maintain the

integrity of stored data under a maximum peak field strength of 50V/m for 60s and an

electrostatic discharge from 25kV. Physical shock, vibration and drop shock are

commonly encountered as a result of handling and transport operations.

4.2 Requirements in different scenarios

The picture below describes that the envisaged technologies is used in different

scenarios. On the one side we have different container handling equipment which is used

to move the container in the terminals and on the other hand we have different operation

areas where the technologies have to run.

Nevertheless we have to make sure that in all scenarios the technologies have to work

under the necessary environments.



4.2.1 Container handling equipment scenarios

Figure 4-1: Container handling equipment scenarios

container license tag

eSeal

OCR

Handheld devices

container handling equipment

- Quay crane

- Portal crane

- Top loader

- Side loader

- Reach stacker

- RTG-rubber tire gantry

- Straddle carrier

- Empty container handlers

- Loaded container handlers

Operation areas

- Yard operation

- Vessel operation

- Truck and rail operation

Requirements

spreader mounted equipment - speed: 0 km/h

- range: 10 m (depends on antenna and tag

Location)

non-spreader mounted equipment

- speed: 0-44 km/h

- range: 35 m



4.2.2 Hand-Held scenarios

In some terminal business processes mobile devices (hand-held) are used. In such cases

we have to separate the requirements in the scenarios for short range or long range.

Figure 4-2: Hand-held scenarios

hand held

requirements

short range:

- speed: 0-5 km/h

- range: 5 m

long range:

- speed: 0-44

km/h


eSeal

OCR

Handheld devices



4.2.3 Restricted lane scenario for truck and rail

The truck and rail operation is based mostly on restricted lanes. In such processes the

container will pass a Gate and the data can be read via fixed mounted interrogators.

The kinds of gates are different, that is why the requirements have to make sure that the

data are readable in all conditions.

The following picture shows the requirements for restricted lane operation.

Figure 4-3: Restricted lane scenario

restricted lane scenario for truck and rail

- Gates (single lane, multi-lane, unidirectional, bi-

directional)

requirements:

- speed: 0-50 km/h

- lane with of 3-6 m

1,2 0,1 - 2 0

1,5 1 – 10 30

3 1 – 10 50

Discrimination

[m]

Range

[m]

Speed

[km/h]


eSeal

OCR

Handheld devices



The table in picture 4-3 shows the required discrimination in restricted lane operation. The

discrimination means the distance between two tags or eSeals on different containers in

order for them to be read correctly by the same interrogator.

4.2.4 Special requirements of the quayside scenario

Figure 4-4: Mounting of the RFID readers at the container crane2

The first question to answer is whether fixed RFID readers or handhelds should be used

at the container crane. Figure 4-4 shows possible mounting positions of fixed readers at

the container crane together with the respective maximum reading distances denoted by

green circles (we assume a maximum achievable reading distance for passive UHF tags

of 5m). The obvious solution of mounting the readers at the spreader which carries the

container can not be used due to the very high mechanical forces this device is exposed

to. Fixed readers thus can only be mounted to the frame of the container crane.

2 Source of the construction plan: NTB



It is clearly visible that RFID tags located at the door area of 40’ containers can be read

out by fixed RFID readers located at the “legs” of the container crane. Apart from that, in

case of a 20’ container, the distance between the container and any mounting position of

the reader is so big that tags located at the container can not be read out. This

circumstance can even not be optimised by additional readers located at the horizontal

support of the container crane.

Another problem is also visible in the picture. In order to achieve fast loading and

unloading of the vessels, the so-called “twin lift” procedure was invented, which means

that two 20’ containers are transported in one move using a special spreader. If a

transponder mounted on one of the containers is located towards the center of the

container crane, it can not be read by any fixed reader mounted to the container crane.

Due to these facts, the container crane should be equipped with mobile RFID readers

which are operated by the container crane staff.

A further argument in favour of this decision is the effort for the mounting of fixed mounted

readers which is not necessary in case of handheld readers. Furthermore, handheld

computers are already in use today, so the employees are used to the handling of these

devices.



5 The CHINOS components

In order to develop the CHINOS system architecture the following system elements have

to be taken into consideration:

Hardware components for

• container identification

• e-seal verification

• damage documentation

• triggering movements and events

Software components for

• Interfacing, managing and operating the devices

• Routing and storing messages and data

• Existing legacy systems.

Most of the hardware components already exist in one form or another, but are not able to

be seamlessly incorporated into a single system without modifications and specially

designed interface software.

RFID based Container Identification systems (CIS) have been available on the market

since the early ‘90s and have been evolving ever since. The various manufacturers of

these systems offer proprietary solutions that are incompatible to each other and operate

at different frequencies. A Standard was created around these systems, (ISO 10374 is a

result of this process) but it was created some time ago and does not incorporate the

advances of RFID technology that have taken place in the last few years. And it is

understood that changes to this standard are being considered to incorporate the latest

passive UHF technology -in the form of EPC Class 1 Gen 2- into the standard.

For this reason, apart from the existing proprietary solutions on the market, UHF passive

systems will also be evaluated.

E-seal Verification systems are offered as part of the container tracking and security

solutions by the same manufacturers of Container Identification systems referred to

above. E-seals evolved from the mechanical seals that have been used for decades – and

are still being used today – to seal containers. The standard for mechanical container

seals (ISO 17712) has been retained in the e-seal standard that – as with container

identification – has been written around the existing proprietary systems. This e-seal

standard (ISO 18185) describes a system using pre-programmed (non alterable) e-seals

operating at 433 MHz. However, unofficial information suggests that the standard is due to

be changed to specify a hybrid system with an activation frequency of 125 KHz and

transmitting frequencies of 433 or 2400 MHz. This document, therefore, incorporates the

architecture required for these new systems.

Damage Documentation systems (DDS) are also available on the market today, and use

video or photography to take images of containers as they move through identification



points in the supply chain. Units are identified by their number, which is painted on the

side of the container, and the images are then stored in a database and made available

on demand to establish the condition of a container. Cameras provide high resolution

images which are easily used by OCR systems for identification of the containers. But the

drawback is that many images have to be captured from many different angles to ensure

full coverage of the container. Triggering of the cameras is also critical to ensure that the

images are taken at exactly the right moment as the container moves through the reading

point.

Video systems offer the advantage of requiring fewer cameras and able to provide better

coverage from different angles and distances. But two trigger signals are required for

video cameras, one to start recording and one to stop the recording. But on the negative

side the resolution of video cameras is lower than that for Photographic cameras which

makes it more difficult for use of OCR systems.

5.1 System Architecture

DamageDocumentation

SystemVideo Camera

Automatic ContainerIdentification Unit

RFID Reader

RFIDTag

eSeal

CommunicationController

Port OperationSystem

ExternalSystems

Figure 5-1: CHINOS System Architecture

Figure 5-1 illustrates the basic system architecture with the different modular elements that go to make up the total system.

The heart of the system is the Communication controller that receives the data from the

various systems and organises it into useable information able to be remotely accessed in

real time with conventional systems.



Container transportation is a multi billion Euro industry with many legacy systems - such

as the port operating system - being employed to manage the different aspects of the

shipment. So the CHINOS system must be able to work with these legacy systems, yet

still offer the real time remote access to data on container logistics status that is not

offered today. Hence the importance of the Communication controller that interfaces with

the data providing systems (container identification, e-seal and Damage documentation)

the port operating systems and the remote external access systems.

Two of the data provision systems are similar because they rely on a reader and a

transponder attached to the container, whilst the damage documentation system relies on

capturing and storing images of the container at different points in its journey.

The elements of each of the data provision systems are as follows:

• Container Identification Unit

Direction Indicator

Container Tag

Reader and antenna system

Interface communication

• E-seal

LF Trigger unit

E-seal

Reader and Antenna system

Interface Communication

• Damage Documentation System

Camera or webcam

Interface Communication.

The identification or reading points may be of two types depending on the means of

container transport and the size and layout of the ID point: Stationary (fixed) reader gates

or Mobile (handheld) readers.

Most of the hardware components already exist in one form or another, but are not able to

be seamlessly incorporated into a single system without modifications and specially

designed interface software.

RFID based Container Identification Systems (CIS) have been available on the market

since the early ‘90s and have been evolving ever since. The various manufacturers of

these systems offer proprietary solutions that are incompatible to each other and operate

at different frequencies. A Standard was created around these systems, (ISO 10374 is a

result of this process) but it was created some time ago and does not incorporate the

advances of RFID technology that have taken place in the last few years. And it is

understood that changes to this standard are being considered to incorporate the latest

passive UHF technology -in the form of EPC Class 1 Gen 2- into the standard.

For this reason, apart from the existing proprietary solutions on the market, UHF passive

systems will also be evaluated.



E-seal Verification systems are offered as part of the container tracking and security

solutions by the same manufacturers of Container Identification systems referred to

above. E-seals evolved from the mechanical seals that have been used for decades – and

are still being used today – to seal containers. The standard for mechanical container

seals (ISO 17712) has been retained in the e-seal standard that – as with container

identification – has been written around the existing proprietary systems. This e-seal

standard (ISO 18185) describes a system using pre-programmed (non alterable) e-seals

operating at 433 MHz. However, unofficial information suggests that the standard is due to

be changed to specify a hybrid system with an activation frequency of 125 KHz and

transmitting frequencies of 433 or 2400 MHz. This document, therefore, incorporates the

architecture required for these new systems.

Damage Documentation systems (DDS) are also available on the market today, and use

video or photography to take images of containers as they move through identification

points in the supply chain. Units are identified by their number, which is painted on the

side of the container, and the images are then stored in a database and made available

on demand to establish the condition of a container. Cameras provide high resolution

images which are easily used by OCR systems for identification of the containers. But the

drawback is that many images have to be captured from many different angles to ensure

full coverage of the container. Triggering of the cameras is also critical to ensure that the

images are taken at exactly the right moment as the container moves through the reading

point.

Video systems offer the advantage of requiring fewer cameras and able to provide better

coverage from different angles and distances. But two trigger signals are required for

video cameras, one to start recording and one to stop the recording. But on the negative

side the resolution of video cameras is lower than that for Photographic cameras which

makes it more difficult for use of OCR systems.

The process for identifying, verifying the e-seals and carrying out the Damage

documentation check at a read point is as follows:

• The container approaches a read station

• The Direction Indicator (and the LF reader) triggers the start of an event, registers the location of the event and determines its direction (outgoing or incoming)

• Simultaneously:

a) The Container Identification reader confirms the container ID

b) The E-seal reader confirms the identity and status of the seal

c) The DDS starts to capture images of the container

• In the case of a video based Damage Documentation System a direction indicator (or other trigger) signals the end of the event

• The information from the three systems is uploaded to a Communications Controller to provide a common interface into a central database

• The configured information is sent to a central database

• The information is able to be accessed on demand from the database by the Port Operating System or other external systems.



In the case of a mobile reading station the same procedure takes place, but the difference

is that the containers are stationary and the events are manually triggered, with the data

acquisition devices consisting of handheld units. The data input is therefore manual rather

than fully automatic as with a Stationary Read Station.

5.2 Data flows

Figure 5-2: Data flows between the CHINOS systems, NTB, and the shipping

company

Figure 5-2 shows the information flow between the CHINOS systems and the other parties

involved in the processes. The information about containers to be loaded or unloaded or

to be expected at the truck gate or the quay is available from the terminal’s operating

system and can be used for validation of the container number read by the RFID reader.

Seal data must not be validated by seal data which is available at the terminal’s operating

system in advance. Seal data read by the RFID reader must be sent to the communication

controller, which assigns it to the correct container data. The data is sent to the shipping

company for validation afterwards. NTB is not responsible for any validation of the seal

number. They only act as a data forwarder for read seal data.



5.3 The Automatic Container Identification Unit

5.3.1 Stationary Automatic Container Identification Unit (ACIU) Prototype

In the stationary case all system components were connected to the IPC via LAN.

Figure 5-3: Overview of the ACIU stationary prototype

Though the Damage Documentation System is not part of the ACIU, the camera also

facilitates hardware resources of the ACIU (like router) to store the image data on a

network share. In order to guarantee this functionality the camera was attached to the IPC

within the ACIU and tested accordingly.

And as another essential part of the system the IPC and monitor plus the WLAN and

Router were also selected.

5.3.2 Test results

The Direction Indicator was equipped with an additional Telemecanique Osiris light

barrier, comprising of an XUB0 APSN L2 multimode photoelectric sensor plus an XUB0

AKSN L2T photoelectric sensor, which have a theoretical range of 15 meters when used

in combination. These components replaced the Infrared LEDs used with the original

Direction Indicator.

The first tests took place in the lab in order to evaluate the integration into the device.

After successful integration the setup was tested outdoor with strong back sunlight

conditions.



The test results showed that the sensors worked successfully up to a distance of 9

metres, even with back sunlight conditions. Additional tests in a real life setup proved that

the Direction Indicator unit is even able to detect movements and trigger at speeds of up

to 120 Km/h. This modification to the Direction Indicator will become part of the new

stationary gate. The sensor, however, has a very small detection field so care must be

taken when aligning the sender and receiver during set-up.

5.3.3 Handheld Prototype

The first objective for the Handheld ACIU prototype was to find a suitable handheld PDA.

The TDS Nomad 800LC was chosen because it already has an integrated camera which

could be used for the DDS. This eliminated the need to connect a camera via SD or

bluetooth which would have added complexity to the project and would not have resulted

in such an ergonomic and aesthetically pleasing unit. An additional benefit was the fact

that TDS Nomad 800LC handheld had already been used for other projects, and it was

known that the UHF module could be successfully integrated into the housing of the

Nomad handheld device. The only modification required was the addition of the Savi

Mobile reader unit which had to be attached to the body of the handheld.

The various components of the ACIU handheld device can be seen in the illustration

below (Figure 5-4).

Figure 5-4: ACIU Handheld prototype

Because the Nomad device has only one accessible serial port, a way had to be found to

switch between the different components, namely

• the UHF interrogator for Container Identification, TRU-MR-100 from Tricon

• the Mobile Reader SMR 650-212 from Savi



This was achieved using available control lines from the free serial port (RTS, DTR and

CTS) as these control lines are accessible via software on the PDA.

• DTR was used to enable the power supply of the attached devices

• RTS switches between Container Identification reader and e-Seal reader unit

• CTS was needed to feedback a status of the SMR 650-212 to the handheld

To ensure that this approach would work, tests were first carried out with the components

loosely connected – but not yet integrated – into the handheld unit.

These initial assembly tests were very successful, so a printed circuit board (PCB) was

designed to enable both systems to be connected together. This PCB enabled an easy

and reliable integration without too many loose wires and virtually completed the hardware

design of the prototype handheld ACIU.

The Handheld unit itself communicates with the IPC via WLAN and sends the acquired

data to the Communication controller when a wireless network is available. If no network

is available the device switches to “offline mode” and stores the data temporarily until a

connection is available again.

5.3.3.1 The UHF System

The first task to develop the handheld ACIU device was to integrate the Tricon TRU-MR-

100 module - which operates at a frequency of 869.525 MHz and can read ISO 18000-6B,

ISO 18000-6C (EPC Class 1 Gen 2) tags at a range of 60 to 100cm. - into the Nomad

handheld unit. The UHF Module had been integrated into similar handheld units before so

we knew that it should be possible, but due to the individual layout of each unit every

development is different. The main challenge was to develop the switch between the UHF

and Savi system as mentioned above. Additionally to the integration of the module, an

antenna also had to be incorporated into the device’s large cap and tuned accordingly

5.3.3.2 The Savi System

The Savi system was originally designed to be used on an Intermec handheld. Integrating

the Savi Mobile reader into the Nomad handheld unit required a new design, and one of

the issues needed to be overcome was the type of connector to be used, because the one

from the Savi Reader was incompatible with the one from the Nomad reader. Without a

wiring diagram it was difficult to identify the corresponding connection leads, but with the

help of an oscilloscope they were correctly identified and re-soldered into the correct

connector so that the mobile reader could be added to the complete system.



Figure 5-5: SMR 650-212 reader unit

Figure 5-6: CHINOS handheld with

attached SMR 650-212

5.4 The Damage Documentation System

The purpose of this project is to be able to identify the current state of a container and

verify that it is in the same physical condition as when it started its journey.

Trailers are identified by their number, which is painted on the side of the container, and is

optically captured and stored in a data base.

These tests compared the performance of different technologies and assessed their

different benefits and drawbacks. A recommendation was then made regarding the

possible technologies that could be used in the future to enhance the system functionality.

5.4.1 System requirements and objectives

The container information is required by various stakeholders in the logistics process,

such as:

• insurance companies

• trailer owners

• container’s content owner

• recipient

The main objective is to:

• complement the container identification system (RFID)



• store visual information of the container’s condition (highlighting any damage)

• at the following points:

o when a container is loaded and/or unloaded to or from a vessel

o when a container enters or exits an end user site, either by truck or rail.

Project Criteria:

• the efficiency of the current operating procedures should not be adversely affected

• a manual backup procedure with minimal influence on current operating

procedures should be available (e.g. manual addition of images if system fails,

“human damage detection and documentation”)

• the system should be robust enough to withstand harsh environmental conditions

(fog, rain, snow, dirt, sun light, etc.)

• existing security conditions are not violated (e.g. no flashing or additional

floodlights allowed)

• focused on portal cranes.

5.4.2 Technical Possibilities Overview

Cameras are installed on ship-to-shore cranes, bridges, gate houses or similar

installations that containers normally transit past. The objective is to capture still images of

the container from all sides to provide a record of the physical condition of the container.

To achieve this, cameras are required to be mounted in appropriate positions without

interfering with normal operations. Sensors are used to trigger the image capturing at the

moment the container passes the camera.

Different types of cameras may require different setups. Alternatively or in addition to

normal cameras, line-scan or infrared cameras may prove to be more effective under

certain circumstances.

5.4.2.1 Advantages

Cameras provide high resolution images. The image quality may3 be sufficient for

subsequent OCR or image analysis. Comparatively small file sizes make it easy to store,

backup and distribute image data.

The setup may consist of a minimum of cameras; or the number may be increased to

provide a range of alternative images to increase the system reliability.

The fixing of cameras to cranes or gates is usually a non-intrusive task with minimal effort.

Temporary installations are typically inexpensive, portable and fast.

5.4.2.2 Disadvantages

Unsheltered setups are vulnerable to a broad range of outside influences such as snow,

rain, fog or back lighting. Vandalism is also an important consideration.

3 Depending on the specific setup and hardware used



Depending on the degree of contamination, the camera optics needs to be cleaned from

dust or debris at periodic intervals.

The photographic equipment, sensors and electronics need to be sufficiently protected to

guarantee durable functionality in a harsh environment.

Depending on the type of setup – gate, crane, etc. – the calculations to trigger the image

capture at precisely the right moment can be a difficult task.

5.4.2.3 Limitations

Photography fails when the line of sight is obstructed or partially impaired. In an

environment exposed to changing lighting and weather this poses a serious risk.

Images are two dimensional snapshots of a moment in time. If for any reason (an

awkward viewing angle, a reflection or even a bird flying past the visual scope) the image

proves to be insufficiently clear, there is no alternative information to fall back on.

5.4.3 Introduction to the Damage Documentation System

Optical Damage Documentation is getting increasingly important in the transport chain of

(not only) container handling. Besides process optimization and security considerations, a

financial aspect became more and more important. Whenever responsibility for a

container changes from one party in the logistic chain to another, the terminal operators

would like to have a visual evidence about the outer condition of the container (or of any

type of truck mounting in case of a terminal truck gate). This can be achieved by

(automatically or manually) taking pictures at the relevant transition points, i.e. terminal

train and truck gates and, in ports, the pier. Motivation is the prevention of unjustified

claims and a conclusive assignment of liability in case of damages.

Within the framework of the CHINOS-project, Optical Damage Documentation has been

considered being a valuable component in a secure container transport chain and a

reasonable extension to automatic container identification and E-seal verification (both via

RFID-technologies).

Time-stamped images taken at the transition points and stored in a database for a certain

time period (up to years) serve as a repository of evidence for different stakeholders in

container logistics, e.g. shippers, port operators, forwarders, insurance companies and

others. For this purpose, different reporting functions based on the data acquired by the

CHINOS system components (ref. D3.7 – Spec. of the Communication Controller) have

been developed as well as tiered access mechanisms for the parties involved.

In the CHINOS project, the Damage Documentation Module has been integrated into the

logistic process chain at selected transition points, i.e. where responsibility for a container

changes from one party to another. For system test and validation fixed camera

installations were used at the train gate and the truck gate of EUROGATE Container

Terminal in the port of Bremerhaven as well as on the POLZUG railway container terminal

in Pruszkow (Poland), near Warszawa. In addition, a mobile handheld RFID-reader with

integrated CCD-camera was tested at the pier of EUROGATE Bremerhaven, at POLZUG

in Pruszkow and the port of Thessaloniki in Greece. At all the three locations, the

functionalities of the Optical Damage Documentation module have been tested

successfully and the integration into the overall information-flow of the CHINOS-system,



i.e. the interfacing to the Communication Controller and the Chain Event Manager was

achieved.

By interfacing the Damage Documentation System to existing legacy systems (e.g.

Terminal Operation Systems), the image and container identification data can be enriched

with bill of lading data and thus allows for more complex queries, e.g. listing of all

containers of a certain carrier/shipper, certain time periods, destinations, ship names etc.

However, the necessity to develop these queries depends on the future end user

requirements.

5.4.3.1 Cameras

A large portion of the Damage Documentation System is covered by software

functionality. A key component though is the camera hardware. Many different types of

optical recording devices are available. Obviously not all of them are suited equally well

for the defined scenarios.

The specification of the DDS contains recommendations for specific scenarios. E.g. line

cameras are proving to be most efficient at truck gates. For the integration tests however

the cameras not only needed to fulfill the technical requirements or be efficient in each

scenario, but also installation, maintenance, transportation and costs had to suit the scope

of the project. The main criterias for selecting the cameras were: the ability to trigger

captures on external events, a robust, weatherproof housing, accurate and synchronized

timestamping of the images, network connectivity, decent image quality and a realistic

pricing. Also a simple setup procedure would be preferable.

After assessing different types of cameras the choice fell on the CMOS based wide

angled M22M by MOBOTIX. Besides satisfying the defined criterias, another advantage is

the cameras ability to be power over LAN connection (PoE4).

The cameras needed to be purchased along with I/O units which provide audio in/out and

also most importantly a digital input line that can be configured to trigger captures. The I/O

unit is connected to the camera by a special USB cable.

Since the power supply is solely provided over LAN cables, the cameras needed to be

connected to a switch that supports of PoE. Btw. the power adapter set sold separately by

MOBOTIX did not deliver enough voltage to supply both, the camera and the I/O unit.

4 Power over Ethernet; standard defining the transfer of electrical power over twisted pair ethernet cables



The lens of the camera can be replaced to allow different focal lengths and thus providing

different image angels. In the CHINOS scenarios it is desirable to bring the cameras as

close to the object as possible. Consequently the cameras were equipped with wide angle

lenses. The image resolution and the inevitable distortion due to the wide angle lens can

be seen in figure 5-9. The picture also shows how well the camera is dealing with a

difficult backlight situation.

Each camera is accessible and can be controlled over the LAN. Settings can be managed

through the front end of a build in web server. Necessary steps to prepare the cameras for

integration into the Damage Documentation System involved the following configurations:

• use the NAS as external storage (either CIFS5 or FTP)

• capturing of still images rather than Motion JPGs

• time synchronization over ntp servers (network time )

• network settings

• external status LEDs to indicate network connectivity and I/O events for a visual

feedback

5 Common internet file system, also SMB

Figure 5-7: MOBOTIX M22 camera Figure 5-8: MOBOTIX CAM-IO



Figure 5-9: Screen shot of the MOBOTIX camera web interface



Figure 5-10: Manually reading the e-Seal and container ID-tag and, in case of

damage, taking pictures with the integrated RFID-reader-camera

device (small image)

5.4.3.2 Handheld Damage Documentation System

Several options were considered for the handheld DD System:

• The first idea was to find a camera that could be integrated into the handheld in

the same way as the Savi and UHF systems, but as no suitable cameras could

be found

• The second idea was to connect a webcam or a camera via Bluetooth.

Unfortunately though, the only suitable camera, which would communicate with

the device via Bluetooth, was still in the prototype phase

• The use of an SD Memory (Secure Digital) Camera was also discussed, but in

fact they are obsolete and also the storage capacity of the handheld would have

decreased without a SD – memory card (as the camera occupies the expansion

memory slot)



Since all our searches for an external camera failed, we started a new search for a

handheld unit with a suitable built-in camera. This search led us to the TDS Nomad, a

unit only just released on the market some weeks before with its integrated 2 mega pixel

camera. This camera was small and had a good resolution, the only problem being the

position of the camera on the top of the handheld. This was the only available position for

the UHF antenna so we decided to relocate the camera to the back of the handheld. In

doing this, care had to be taken to ensure that the camera lens was not obstructed by the

hand strap.

In addition it is positioned in a recess so there a cover glass could be placed to make the

camera outdoor suitable (which is not done for the prototype).

5.5 The Chain Event Manager

The Supply Chain Event Management (SCEM) methodology for planning and monitoring

supply chains is well known in the production industry. This document informs about the

approach within the CHNIOS project investigating how SCEM concepts can be used for

intermodal container transports covering several sub-transports performed by different

transport modes (e.g. imports using ocean shipping to one of the big North Sea ports, rail

transport into the hinterland, final distribution to the receiver by truck).

The intermodal transport of a container is accompanied by so-called events, which divide

into two categories: On the one hand there are expected events such as loading and

unloading messages. These and the sequence of their occurrence are clearly defined and

can easily be monitored. The second class are events which occur unexpectedly and

which may allude to problems such as delay messages or a notice indicating a technical

defect.

While traditional systems for planning, tracking and tracing are passive, i.e. the user gets

updated information only if he looks into the systems, the idea of SCEM systems is to play

an active role. To this end, the planned logistics chains (e.g. in door-to-door transports)

with expected events at expected times will be defined and matched against incoming

event messages. Depending on the configuration, certain triggers will be fired

• either if expected events do not happen

• or other events occur which were not expected.

The SCEM system will compare the expected events with the actual events and decide on

appropriate actions, e.g. inform the user, here the manager of the intermodal transport

chain, in case (and only in case) of problems. The chain manager is enabled to react in

time on exceptions. Problems can be coped with soon after their occurrence and before

they cause a severe impact to the transport process. Thus, an optimisation of the

transport chains will become feasible.

In the course of the CHINOS project, a concept and software tool have been developed to

support this approach. Events, decision rules, and corresponding actions can be defined;

links to operational systems ensure that the planning data are always up to date. It is a

goal within the project to implement a system which is able to receive and process these

events automatically respectively to react on the absence of events. In case of deviations

with respect to the planned transport process, the manager of the transport chain will be



informed such that he can intervene as soon as possible, for example by re-scheduling a

delayed container to a later train.

As already mentioned, the intermodal transport of a container is accompanied by so-

called events, which fall into two categories: On the one hand there are expected events

such as loading and unloading messages. These and the sequence of their occurrence

are clearly defined and can easily be monitored. On the other hand there are events which

occur unexpectedly and which may allude to problems such as delay messages or a

notice indicating a technical defect.

Nowadays there are Track & Trace systems where a controller is able to get informed

about the current events of a shipped container. The disadvantages of such systems are:

• The user gets updated information only on request based on manual interactions

• Users have to contact several sources (e.g. terminals, shipping lines, railways) to

get information about the complete chain

• A controller who is responsible for a huge amount of containers has to manually

review all these data although he is just interested in transports where something

is going wrong.

A better solution instead of those passive Track & Trace systems are SCEM systems.

Within the CHINOS Project, such an SCEM system will be developed for logistic purposes

to evaluate how SCEM concepts can be used for intermodal container transports covering

several sub-transports performed by different transport modes (e.g. imports using ocean

shipping to one of the big North Sea ports, rail transport into the hinterland, and final

distribution to the receiver by truck).

This SCEM system, called Chain Event Manger, compares the expected events with the

current events and decides on appropriate pre-configured actions, e.g. to inform the user

in case (and only in case) of problems. Problems can be coped with soon after their

occurrence and before they cause a severe impact to the transport process. Thus, an

optimisation of the transport chains will become feasible.

For each event there are decision rules which examine its occurrence on time, delay or

total absence. Depending on the result of these examinations, the SCEM system is able

to initiate appropriate actions in a flexible way. It can send emails or SMS which can notify

their receivers about the occurrence of a specific event. In addition, the user’s computer

system can be affected such that containers originally associated to a cancelled voyage

are marked so they can easily be re-scheduled to another voyage.

The SCEM approach can be used for security purposes as well. Of course there are

logistic events which could be also interesting for security issues, e.g. a delayed arrival of

the container at a terminal could also be a fact of a disruption. But most events which are

important for security of a transport are not bound directly to logistic processes.

Within the SCEM system, each single container must be monitored apart from the others.

The appropriate decision rules are modelled using the tool “Visual Rules” [5] which allows

the user to define the decision rules using a graphical user interface. The complete set of

decision rules makes up a so-called rule tree. Figure 2 shows an example of a rule tree

used for a SCEM system. For each event there are decision rules which examine its



accurately timed occurrence, delay or total absence. Depending on the result of these

examinations, the rule tree is able to initiate appropriate actions in a flexible way.

The containers which have to be examined and the events are read from a central

database. The communication between Visual Rules and the database is performed by an

appropriate software tool using the object/relational framework “Hibernate” [4] to access

the database which reads out the container data and the related events and passes them

over to the rule tree which processes these data.

Visual rules offers a set of standard actions to be performed depending on the results of

the decision rules. As an example, the rule tree can send emails which can notify their

receivers about the occurrence of a specific event. In addition, we added user-specific

actions which make it possible to send SMS messages or directly affect for example the

computer system of the chain manager. For instance, if a damage of the train occurs, the

manager should be notified about this severe problem by SMS. In addition, his computer

system should be affected such that the appropriate voyage is cancelled and the

containers originally associated to the cancelled voyage should be marked such that they

can easily be re-scheduled to another voyage.

The definition of the rule tree is mainly oriented at the chronological sequence of the

events’ occurrence during the transport. Of course, there exist events with an undefined

sequence with respect to each other. In addition, there are events which may occur at any

arbitrary point of time during the transport. The latter are related to unforeseen events, as

for example a damage may occur and be reported at any time. Of course, the latter events

play an important role because they crucially affect the transport.

Consequently, there is a very complex set of decision rules which make up the SCEM

system. It is an important advantage of Visual Rules to provide the possibility of modelling

the appropriate business logic in a very flexible way. In addition, the clear and concise

graphical illustration of the decision rules makes the set-up and maintenance of the

system very easy.

The concrete SCEM scenarios to be developed within the CHINOS project will be

specified in co-operation with the end users during the development phase of the project.



Figure 5-11: Modelling of the SCEM system using Visual Rules



5.5.1 Setup of the Chain Event Manager

Rule

Engine

Leman

Rule

Engine

Leman

Expeditor system

DB

Planned data

Interface Rail operator

Customs

Terminal

Event

Generator

Mobile PC

Mobile phone

Events

email

SMS

Web FrontendEvents

Webservice

Figure 5-12: Setup of the Chain Event Manager

Figure 5-12 shows an overview of the setup of the Chain Event Manager. The central

component of the Chain Event Manager is called Leman (Logistics Event Manager). It

includes the rule engine which processes the events occurring during the transport of a

container by applying the so-called rule tree. The latter is further described in the next

chapter. Leman exchanges event and status data with the central database (DB) of the

system. Furthermore, it receives information about the planned schedule of the transport

from the database. As it is shown, the Leman component can react by sending email or

SMS or even interact with the transport organiser’s expeditor system using web services.

Events are sent to the database in two ways. First, there are events which are sent by

companies involved in the transport like for instance terminals, rail operators, or customs.

These are processed by a specific interface which saves the data in the database.

Second, events can be derived from mobile components like mobile PCs or mobile

phones. These data must be processed by a component called Event Generator before

being stored in the database.

In order to compare the actual status of a transport to the originally planned schedule,

information about the schedule is gathered from the transport organiser’s expeditor

system via an interface and stored in the database.



A web frontend accesses the database and can be used to control the actual status of all

containers currently under observation.

5.5.2 Generating Events

The following chapter describes several methods to generate the events which are

necessary in order to implement the SCEM approach.

5.5.2.1 Deriving Events from RFID information

It is an advantage of the CHINOS RFID system that the readout process can be

performed automatically. Thus, events can be derived from the reading process. This is

mainly the case for arrivals and departures of containers for instance at terminals if the

terminal gates are equipped with RFID readers.

Within the CHINOS system it is planned that the communication controller sends events

occurring during the transport of a container to the chain event manager. These events

are mainly gate-in and gate-out events at the terminals’ borders. Because the Automatic

Container Identification Unit is not able to detect the direction of a moving container when

it passes the RFID reader, it is not able to discriminate gate-in events from gate-out

events. To achieve this important function, a method has to be implemented, which is

described in the following. Whenever a gate event for a specific container is detected, the

communication controller searches for gate events which occurred in the past for the

same container. If another gate event is found, it is assumed that the earlier event

represents the gate-in of the container at the terminal and consequently the actual event

must be a gate-out event. If no earlier event is found, it is assumed that the actual event is

a gate-in event.

5.5.2.2 Deriving Events from interfaces

Events can be derived from status changes of the transport which are achieved by

involved parties like customs, rail operators, or terminals. This information of course must

be available electronically and in the best case sent automatically. An example is the

release of a container by the customs. The appropriate information already today is

available from the terminal’s operating system. In order to be processed by the Chain

Event Manager, the information has to be extracted from the operating system,

transformed to the event interface format which is described in chapter 9 of this document

and sent to the Leman component of the Chain Event Manager.

In addition, the Chain Event Manager will be able to derive event information from

standard interfaces which are commonly in use in container transport like CODECO or

COARRI messages.

5.5.2.3 Generating events using mobile communication

Nevertheless, not all desired information is available automatically. In order to access

information which can not be derived from existing interfaces, mobile communication can

be used. As an example, the driver of a train can be equipped with an application running

on a java enabled mobile phone as shown in Figure 5-13. After choosing the correct

voyage, he can now send status messages like for instance „Train arrived“ which is



transferred to the Chain Event Manager by mobile communication and processed as an

event.

Figure 5-13: Generating events using a standard Java-enabled mobile phone

A more convenient solution are personal digital assistants (PDA) which allow a more

sophisticated and user-friendly user interface as shown in figure 6. The events are as well

generated by a person accompanying the transport, for instance the train driver, and

transferred to the Chain Event Manager. In addition, some PDAs possess a GPS

component which can be used for localisation purposes.

Figure 5-14: Generating events using a mobile application running on a PDA



5.5.2.4 Generating events using GPS information

Within the CHINOS project a solution was developed which can be used on the vehicle,

like train, truck or barge. A standard mobile phone and a GPS receiver (or Galileo in the

future) is used to track the container while it is transported by the equipped carrier. A

mobile application on the mobile phone is receiving the GPS position by the GPS receiver

and sends it by using web services to a server. Users are able to track the current position

in a Google Maps application.

The current position of the container can be used for generating events, which is one

functionality of the Chain Event Manager. An event will be generated when a transported

container enter or leaves a defined area, e.g. a terminal. The user is able to define the

position and the radius of locations (like terminals or also motorway junctions) as well as

the type of event which should be fired by entering or leaving the defined circle. A server

is receiving the GPS position and calculating if the transported container has entered or

left a designed location and fires the defined event (see Figure 5-15). The Logistic Event

Manager receives the event and decides by using the rule tree to send an e-mail or to use

EDI to inform the user. The system is also able to inform the user about standstills of the

transport.

Figure 5-15: The GPS component generates an event when a specific location,

e.g. a railway station or a terminal, is reached



5.6 The Communication Controller

This document gives the specification for the CHINOS software component

“Communication Controller”. The CHINOS Communication Controller (CCC) has the

following tasks:

• receive and save RFID container events from CHINOS Container Identification

Unit

• receive and save RFID seal events from CHINOS Container Identification Unit

• receive and save camera events from the CHINOS Damage Documentation Unit

• correlate single RFID and / or camera events to valid groups of container RFID

tag, seal RFID tag and 0 to n pictures of the container.

• try to proof the correctness of correlated container-seal RFID pair

• provide information to customer systems (i.e. NTB)

• provide information to CHINOS Chain Event Manager

• build (per configuration) and manage device landscape (RFID devices, camera

devices)

5.6.1 Business Processes

In the following section the business workflow of the Communication Controller will be

described.

This chapter is based on the general CHINOS business processes. The workflow was

harmonized with the other partners and CHINOS sub systems.

5.6.1.1 Truck (gate-in and gate-out)

By truck container will be delivered to and picked up from train and sea terminals like

POLZUG or NTB.

• The readout of the container number is performed automatically using the RFID

reader and not visually by an employee.

• The comparison of the actual container number and the container number

available in the pre-announced data in order to check whether the correct

container was unloaded or loaded is not performed by the checker but

automatically by the Communication Controller or the terminal system after the

number was read. In case a deviation of the numbers is recognized, an

appropriate message is generated and the employee in charge is notified about

the error.

• The readout of the seal number of the electronic seal is also performed

automatically. The visual reading of the seal number and the manual input of the

data into a computer system is no more necessary.

• The comparison of the seal number with an available seal number in the pre-

announced data is not performed by the checker but automatically by the



Communication Controller or the terminal system after the number was read. In

case a deviation of the numbers is recognized, an appropriate message is

generated and the employee in charge is notified about the error. If there is no pre-

announced data available the Communication Controller tries to verify the seal

number with a request to the Shipping Company’s system.

• The documentation of possible damages of the container is done by the CHINOS

Damage Documentation Unit using high resolution cameras.

5.6.1.2 Train (gate-in and gate-out)

By train container will be delivered to and picked up from train and sea terminals like

POLZUG or NTB. The additional aspect with trains is the importance of the wagon and

container sequence within a train.

• The readout of the container number is performed automatically using the RFID

reader and not visually by an employee.

• The comparison of the actual container number and the container number

available in the pre-announced data in order to check whether the correct

container was unloaded or loaded is not performed by the checker but

automatically by the Communication Controller or the terminal system after the

number was read. In case a deviation of the numbers is recognized, an

appropriate message is generated and the employee in charge is notified about

the error.

• Sequence position will also be recognized and provided to the terminal system.

• The readout of the seal number of the electronic seal is also performed

automatically. The visual reading of the seal number and the manual input of the

data into a computer system is no more necessary.

• The comparison of the seal number with an available seal number in the pre-

announced data is not performed by the checker but automatically by the

Communication Controller or the terminal system after the number was read. In

case a deviation of the numbers is recognized, an appropriate message is

generated and the employee in charge is notified about the error. If there is no pre-

announced data available the Communication Controller tries to verify the seal

number with a request to the Shipping Company’s system.

• The documentation of possible damages of the container is done by the CHINOS

Damage Documentation Unit using high resolution cameras.

5.6.1.3 Vessel

• The readout of the container number is performed by the checker using the

handheld RFID reader and not visually by the checker and the supervisor. The

comparison of the container number with the respective data in the loading or

discharge list, respectively, is not performed by the supervisor, but automatically

after the readout. In case of a mismatch of these numbers a respective message

will be generated such that the employee can react on the error.



• The readout of the seal number is also performed by the checker using the

handheld RFID reader. The seal data is transmitted to the shipping company for

verification.

• The container check regarding damages is not performed by the checker. Instead,

the CHINOS Damage Documentation Unit will document any damages using high

resolution cameras.

5.6.2 Use Case Model

The Use Case model of the Communication Controller is the catalogue of system

functionality described using UML Use Cases which the Communication Controller

provides. Each Use Case represents a single, repeatable interaction that a user or "actor"

experiences when using the system. The Use Case includes one or more “scenarios”

which describe the interactions between the Actor and the System from the user’s

perspective.

uc CHINOS Use Case Modell

Communication Controller

Container Identification

Unit(from Actors)

UC001 - Process

container_ev ent

UC002 - Process

seal_ev ent

UC007 - Display system

status

Chain Ev ent Manager

(from Actors)

Terminal System

(from Actors)

Damage Documentation

Unit(from Actors)

Shipper System

(from Actors)

UC015 - Process

camera_ev ent

UC016 - Request for

Container Information

(uri_ev ent)

UC012 - Notification per

E-Mail

(terminal_information)

UC014 - Deliv er

expected information

about container

mov ements

(terminal_ev ent)

UC008 - Configuration of

dev ice - location pairs

User

(from Actors)

UC011 - Deliv er

container information

(container_information)

UC009 - Arrange

container data, match

container with seal,

wagon and image

UC010 - Validation of

container-seal ID pairs

(shippingcompany_information)UC003 - Process

lightbarrier_ev ent

UC006 - Process

heartbeat_ev ent

UC004 - Process

wagon_ev ent

UC005 - Authentication

w ether container-seal

pair is v alid

(v alidation_ev ent)

Figure 5-16: Communication Controller Use Case Model



The Use Case Model also shows the system boundaries of the Communication Controller.

Figure 5-16 describes in a short and brief form the Use Cases for the Communication

Controller. How these Use Cases work together is illustrated in Figure 5-17.

cmp CHINOS Interfaces

Container

Identification Unit

Communication

Controller

Container Event

Seal Event

Damage

Documentation Unit Camera Event

Terminal Information

Container Information

Chain Event Manager

Configuration

Terminal System

Shipping Company

System

Lightbarrier Event

Heartbeat Event

Shipping Company Information

Terminal Event

URI Event

Validation Event

«WS»«Email»

«use»

«use»

«WS»

«use»

«use»

«use»

«WS»

«WS»

«Dummy»

«use»

«use»

«WS»

«WS»

«use»

«WS»

«use»

«WS»

«WS»

«use»

«use»

«use»

«Web GUI»

Figure 5-17: Interfaces of the Communication Controller



6 CHINOS tests in real-life environments

6.1 NTB terminal Bremerhaven

6.1.1 Stationary ID Gate “train”

6.1.1.1 Installation

The system setup was basically the same as with the Live Integration Test in Traun. The

internet connection was not established through an UMTS gateway, but by means of the

NTB network connectivity on site. At the train gate the network connection was build via a

radio link system.

The power supply was supplied by a portable electric generator at the back of the

container.

An empty container was used as a rain protection for all laptops and computers which

have to be used to set-up the CHINOS system.

The CHINOS gates were mounted on concrete blocks on both sides of the track. For the

connection between the readers, antennas and cameras from both sides of the gate the

cables were protected with tubes under the rails. The construction of the gate is shown in

Figure 6-1.

Figure 6-1: Construction of the CHINOS gate at train side



Two cameras for the damage documentation were used in the train gate scenario: both

facing the tracks orthogonally. One installed onto the roof of a stationary container and the

other camera was fixed to a ladder. The cameras were almost in line with the light barrier,

which triggered a capture via I/O line.

The communication to the communication controller and triggering via light barrier events

was fully functional.

6.1.1.2 Test scenario

In the second scenario, a train was available with more than 40 containers on it. 40

containers were equipped with container tags and electronic seals. The tags were

mounted on the container at the corner next to the door and the e-seals were mounted

directly to the door (see Figure 6-2).

Figure 6-2: Container equipped with container tag and electronic seal.

In many cases the doors of two containers were directly faced to each other. In these

cases we placed the e-seals in this very small gap between the containers (shown in

Figure 6-3 and Figure 6-4).



After the train was equipped, the train drove through the CHINOS gate to perform the

detection of container tags and e-seals. This was done twice, one time with the direction

out and one time with the direction in.

6.1.1.3 Damage documentation

The view point of the cameras only allowed one container to be fully visible at a time. The

light barrier even registered containers separated only by a few centimetres.

Figure 6-3: Containers with little distance equipped

with container tag and electronic seal

Figure 6-4: Electronic seal between

two containers



Figure 6-5: Camera fixed on ladder

Figure 6-6: Camera on stationary container

Problems arose from unsynchronised clocks: the time difference for both cameras was 17

seconds! Both cameras were later configured to synchronise the time with ntpd servers.

Accurate timestamps are crucial for the correlation of images and container ids, executed

by the CCC.

The transfer of the files to the NAS is done by ftp. The current cameras use an

implementation of the protocol which unfortunately causes "drop outs" when images are

taken in quick succession (e.g. trains passing at speeds > 25 km/h). Even though the

containers were passing at a speed of approximately 5 km/h, the sequence of captures

hints at these "drop outs". A possible explanation would be unusually high network traffic

with high priority packages, which slowed down the ftp process. These problems did

not occur at the truck gate. Nevertheless it is deemed to be necessary to change the

mode of transfer for the next tests in Warsaw.

6.1.1.4 Results of the stationary ID Gate “train”

The results of the first run (train moving out) can be outlined as follows:

• all containers tags could be read

• only 2 e-seals could not be read

• the correlation of e-seals to containers was not possible for the reasons noted

below.



• the correlation of damage documentation pictures to containers did work in the

aspect that a lot of correlations were found, but it produced a lot of false

correlations (each image was correlated with more than one container)

The correct correlations between containers and e-seals and between containers and

damage pictures could not be identified because of the following reasons:

• The container tags are not identified and send to the Communication Controller

one by one, each with a unique timestamp as read time, but the containers tags

are send in batches of tags with the same read time. This is due to the fact that the

RFID readers read the tags over a certain amount of time (in this scenario 30

seconds) and then send all tags read within that amount of time with the same

timestamp. Although the train passed the gate very slowly (estimated less than 5

km/h), there were batches of 3 to 10 container tags. The assumption of a unique

read time for each container tag therefore is not valid. This assumption was an

important prerequisite for the container-correlation algorithm defined in the

specification phase of CHINOS. In order to improve this situation the operation

mode of the RFID reader will be changed for the next tests in Pruszkow which

should result in proper and unique time stamps for each container tag.

• The behaviour of the e-seals is different than expected: the e-seals within range

are triggered to identify themselves, and after that they answer. So the e-seals are

also reported in batches of e-seals with the same read time. Since the range of the

trigger signal in this setup could not be configured, it triggered a lot of seals. The

time the e-seals need to answer is quite significant. Therefore the assumption of a

unique read time for each e-seal is not valid, which was also an important

prerequisite for the container-correlation algorithm defined in the specification

phase of CHINOS. Also the assumption of a certain repeatable time gap between

the read of a container tag and is associated e-seal is not valid. Therefore no

means exist to identify the correct correlations between e-seals and containers.

The results of the second run (train moving in) can be outlined as follows:

• 4 containers tags could not be read (which equals a miss rate of 10%)

• only 1 e-seal could not be read

• the correlation of e-seals to containers was not possible, for the same reasons as

listed above for the first run

• the correlation of damage documentation pictures to containers did work in the

aspect that a lot of correlations were found, but it produced a lot of false

correlations (each image was correlated with more than one container).

6.1.2 Mobile ID point “train”


The mobile reader was used in offline mode, so no infrastructure and no installation was

necessary.




The data from the container tag, e-seal were read manually and some pictures for

container damage documentation were taken.

6.1.2.3 Results of mobile ID point “train”

All tags and e-seals were successfully read. Because of using the mobile reader in offline

mode the data of the mobile scenario were not transferred to the Communication

Controller.

6.1.3 Stationary ID Gate “truck”


Figure 6-7 shows the truck gate of NTB and the location where the internet connection

was available. This location was also the control centre where laptops and computers

were placed to configure the CHINOS system (shown in Figure 6-8).



Figure 6-7: Truck Gate of NTB

Figure 6-8: Control centre

The same equipment as used in the train area was used in the truck area.

Control centre



Figure 6-9: CHINOS Gate at truck area

The cable for the connection between the antennas, readers and cameras from both sides

of the restricted lane was protected with an angle steel. This angle steel was fixed with

some mounting brackets at the pavement of the gate (shown in Figures 6-10 through 6-

12). Some rubber mats were used to reduce the shocks from the tyres of the trucks by

driving over the angle steel.

Figure 6-10: Antennas right side

Figure 6-11: Antennas left side



The setup is similar to the train gate scenario, but this time the cameras were installed to

capture the containers from a slanted angle, top down and bottom up.

Figure 6-12: Cable protections

Figure 6-13: Cams on the roof of the housing

Figure 6-14: Cams on the roof of the housing

Figure 6-15: Cams mounted to a ladder

Mounting bracket




In the second scenario, containers on trucks where equipped with container tags and e-

seals before they reached the truck gateway out of the NTB premises.

Figure 6-16: Containers on trucks are equipped with container tags and e-seal

At the gateway, the CHINOS readers and cameras were set up to read the tags and the e-

seals and to take pictures.

Figure 6-17: E-Seal Figure 6-18: Container tag



6.1.3.3 Damage documentation

The pictures below show a flaw in the first setup of the cameras. When the light barrier is

broken, a capture is triggered immediately. But at that very moment, the truck is not in the

optimal position for the cameras yet.

Figure 6-19: Camera 01

Figure 6-20: Camera 03

Also multiple captures were triggered when the trucks cabin broke the light barrier before

the actual container. And again, where trucks were carrying two containers and again

each time personnel approached the truck and broke the light barrier.

Sequence camera 01

Sequence camera 03

Figure 6-21: Sequences camera 01 and camera 03

The camera view points were adjusted to capture most of the containers exterior, when

the light barrier was broken by the truck cabins for the first time. Ideally however, the

cameras should delay the capture after the light barriers trigger for an estimated 5

seconds so that the truck has time to come to a halt, then take the pictures in the defined



view port. Unfortunately the cameras couldn’t be configured to delay a capture. The

possibility of a delayed capture is further investigated.

6.1.3.4 Results of the stationary ID Gate “truck”

The results of the truck scenario can be outlined as follows:

• all containers tags could be read

• all e-seals could be read

• the correlation of e-seals to containers did work better than in the train scenario,

which is not a surprise: the trucks stopped at the gatehouse to be checked by NTB

personnel; therefore they were within range of the readers for a longer period of

time. The (sometimes) relatively high number of “other correlated seals” might be

due to e-seals not mounted on containers that were not perfectly shielded from the

trigger signal. Since the gap between the read times of container tags and e-seals

often was quite big (more than 1 minute in many cases), the correlation was not

possible. In a real world scenario with more than one lane, the number of falsely

correlated seals can be expected to be quite high.

• the correlation of damage documentation pictures to containers seems to have

worked quite well; a visual inspection of some of the correlated pictures gave

reasons to believe that the correlations were correct. The time delta that defines

the amount of time in which correlated damage pictures and containers are

analyzed, was set to +/- 5 seconds, which in some cases was too small – for

example when a truck triggered the light barrier (which triggered the cameras) and

then drove through very slowly, so that the container tag was read a lot later.

6.1.4 Mobile ID point “truck”


In the truck gate a router was used to set-up the connectivity to the communication

controller via internet. The mobile reader was used in online mode with WLAN connection




6.1.4.3 Results of mobile ID point “truck”

Because of using the mobile reader in online mode the data of the mobile scenario was

transferred to the Communication Controller. Each tag and e-seal could be read. Since

the read times of e-seals, containers and pictures are set to the same value when send to

the Communication Controller, the correlations between them were easily identified by the

Communication Controller.



6.1.5 Mobile ID point “vessel”


The mobile reader was used in offline mode. That is why no more installation was

necessary.


The container was equipped with container tag and e-seal directly after the container was

discharged to the back reach area of the ship to shore crane. After mounting the tag and

the e-seal the mobile reader identified the data. Some pictures were taken for damage

documentation.

6.1.5.3 Results of mobile ID point “vessel”

All tags and e-seals were successfully read. The data of the mobile scenario is not

available on the Communication Controller, since the readings carried out with the mobile

equipment were not transferred to the Communication Controller. From earlier tests it can

be expected that the container tag and the e-seal are transferred with the same collect

time, therefore the correlations should be easily identified by the Communication

Controller, quite in contrast to the stationary hardware setup.

6.2 Polzug terminal Pruszków

6.2.1 Stationary ID Gate “train”


The CHINOS gate was set-up in the marshalling yard of the Polzug terminal.

Figure 6-22: CHINOS Gate at train area



The CHINOS gate couldn’t be set-up in the same way as in Bremerhaven, because of the

missing concrete blocks. The solution was an installation of the CHINOS gate directly to

the existing fence posts of the train gate. The fence posts on both sides of the track were

not parallel to each other. That is why a small extension for the installation of the antennas

was necessary (shown in Figure 6-24).

Figure 6-23: Antennas right side

Figure 6-24: Antennas left side with extension

The cams for the container damage documentation system were placed on both sides of

the track. They were fixed by using of tripods.

Figure 6-25: Cam right side

Figure 6-26: Cam left side




In the first scenario, a train was available with 31 containers. 31 containers were equipped

with container tags and electronic seals. The containers were equipped with container

tags and e-seals in the same way as in Bremerhaven. After mounting of tags and e-seals

the train drove through the gate. This was done three times, twice in the outward direction

and once with an inward direction.

6.2.1.3 Results of the stationary ID Gate “train”

The results can be outlined as follows:

• some container tags could not be read because of the positioning of the tag on the

container

• some e-seal could not be read

• due to some problems with the communication to the internet, data could not be

sent to the communication controller

• because of the problems with the internet connection, no correlation of tags, e-

seals and pictures was possible. The reasons for those problems are most likely

based in the IP-address range and the subnet mask (internet connection

throughout the company network and not via an external ISP). As the whole test

arrangement (locomotive, wagons, personnel) was only available a limited time,

the decision was taken to run those tests offline but with internal logging of data.

• Some Direction Indicator triggers were in the wrong direction (LTR instead of RTL

or vice versa). The reason for this behaviour were handles that were mounted on

the wagons in the height of the Direction Indicator which caused additional and

wrong triggering (as they had exactly the distance of the sensors of the Direction

Indicator). This behaviour can be avoided by simply putting the Direction Indicator

further up.

6.2.2 Mobile ID point “train”



necessary.




6.2.2.3 Results of mobile ID point “train”



Controller.



Unfortunately there was a problem with the software on the handheld reader and the local

test result files were overwritten from the test at the truck gate, so just the last one is

available!

From earlier tests it can be expected that the container tag and the e-seal are transferred

with the same collect time, therefore the correlations should be easily identified by the





necessary.


The tests were performed in two ways:

• truck with one 40’ container on it

• truck with two 20’ containers on it. The door was faced to the outside.

Figure 6-27: Container on Truck equipped with container tag and e-seal

The container tags were attached in the same way as in Bremerhaven. The e-seals were

attached differently, because they were locked in this test scenario to get realistic

conditions for filming the CHINOS film (shown in the following figures).



Figure 6-28: Container on Truck equipped with container tag and e-seal

Figure 6-29: Container tag

Figure 6-30: E-Seal locked

After attaching the tags and e-seals the truck drove ten times through the truck gate and

the data were read and some pictures were taken.



Figure 6-31: Reading container tag




Controller.




6.3 Container Terminal Thessaloniki

6.3.1 Mobile ID point “vessel”



necessary.


Ten containers were equipped with container tag and e-seal directly after the container

was discharged to the back reach area of the ship to shore crane. After mounting the tag

and the e-seal the mobile reader identified the data.



Figure 6-32: Container tags, e-seals and handheld

Figure 6-33: Reading data with handheld reader

6.3.1.3 Results of mobile ID point “vessel”



Controller.








At the chassis place of Thessaloniki ten containers were equipped with container tags and

e-seals. After this attachment the truck drove to the outgate. The tag and e-seal data were

read at the truck gate.

Figure 6-34: Reading container tag


All tags and e-seals were successfully read. Because of using the mobile reader in online

mode the data of the mobile scenario is transferred to the Communication Controller.

Each tag and e-seal could be read; therefore the correlations were easily identified by the


6.4 Conclusions of the real-life tests

6.4.1 Bremerhaven test conclusions

The communication between the partner systems worked reliably during the on-site

scenarios.

Due to technical restrictions of the currently used e-seal hardware and the current RFID

reading process, the correlation of containers with e-seals did not work as intended with

the stationary hardware setup. With the mobile hardware, the correlations between

container tags and e-seals are expected to work satisfactorily.



The correlation of containers with damage documentation images worked well in the truck

scenario. It did not work too well in the train scenario because of a combination of batches

of containers with the same read time and a relatively large time delta to look for events.

6.4.2 Pruszków test conclusions


scenarios.

The container ID tags were all read in the correct sequence. On the few occasions where

tags were read twice or more it was noticed that they had the same time stamp. This issue

can be put down to software and can be easily corrected. Some few tags were unable to

be read. This was probably due to the attachment positioning (height) on the container.

E-seal reading misses were more random. Some e-seals were missed in the Outgoing 1

test might have been attributable to switching off the logging function in order to store the

file to prepare for the next test before all e-seal responses were received (it was observed

that it sometimes takes up a considerable amount of time - sometimes minutes - to

receive all read e-seals in software)

Some wrong direction indicator results may be attributable to the short 'poles' on the

wagons giving false triggers. This can be easily overcome by positioning the DI higher up

to only 'see' the containers edges rather than the wagons' posts as well. Besides this

triggering of the small separation of 12 cm (two containers on a wagon) was more reliable

than in Bremerhaven (due to better alignment)

6.4.3 Thessaloniki test conclusions


scenarios.

All container tags and e-seals were successfully read and send to the communication

controller.

6.4.4 Overall technical Conclusions

Results from the three tests in Real-life terminal operating conditions confirmed that the

CHINOS system is able to satisfactorily identify and track the containers throughout their

transport chain, either at the quayside or transported by rail or truck. At the same time the

container seal status can be determined to assure that a seal has not been tampered with

and the Damage Documentation system is able to record the physical condition of the

container to check for accidental or malicious damage.

There were, however, some aspects of the system that did not work as well as intended,

but the reasons for these shortcomings were identified and it is expected that the solutions

can easily be incorporated if a fully operational system (as opposed to this prototype

system) is developed.

Firstly, the interfacing between all the elements of the system, from the Automatic

Container Identification Unit (ACIU) to the Damage Documentations system, the

Communications Controller and the Chain Event Manager, as well as the web access to

the system proved to work satisfactorily. At times there were issues with the internet



connections but these were due to local problems trying to connect through company

networks on a one-off basis rather than through an external ISP.

Handheld reading of containers ID tags and seals, plus the handheld Damage

Documentation worked extremely well. Since the handheld information was sent with the

same time stamp there was good correlation between IDs, Seals and pictures. One minor

issue was with the handheld unit was that when reading the container IDs it had to be held

at a slight angle to get the best read range. This was only due to the use of a proprietary

reader housing and antenna that dictated the need to fit it in a non-preferred orientation.

Automatic scanning of containers at truck gates with a stationary reader was also very

satisfactory. Because trucks have to stop at a gate, the stationary reader is able to identify

tags and seals and take damage documentation pictures and correlate them all. And as

mentioned above, handheld reading was also successful.

The rail fixed reader station was the one that gave less than fully satisfactory results. In

general nearly all container tags and e-seals were read, but on each test there were a

small percentage missed. The reason for this is not fully understood but is thought to be

due to software or triggering issues which can be overcome. The main problem was the

lack of correlation between container tags and e-seals. This problem is fully understood

but could unfortunately not be resolved without a redesign of the Savi operating system

that we had no access to. It is something, however, that can easily be resolved if a fully

operational system were to be developed.

One other e-seal correlation problem noticed was due to the long read range of the active

e-seals. This caused some problems during testing because quantities of unused tags

were often located within the operating range of the reader and were read in addition to

the correct container seal. In a production situation this could be overcome by reducing

the power (and hence the read range) of the e-seals so that they might be read at up to 10

metres instead of the present 100 metres.

6.5 Analysis of the real-life test

Each scenario has two forms, namely, “before” and “after”. Each form of a scenario is

comprised of a series of business processes or operations. Two average-case coefficients

(both ≥ 0) are assigned to each operation denoting the cost and time of each process. In

this way, the total cost and the total time of each scenario form is the sum of the

respective coefficients.

The objective criteria, which will determine whether CHINOS enhanced the state-of-the-art

of the processes in each scenario, are the following:

• A decrease (“before” vs. “after”) in total cost subject to an upper-bounded

allowable increase in total time.

• A decrease in total time subject to an upper-bounded allowable increase in total

cost.

We note that the wording used in the criteria above is appropriate for the scenario

applications in which a decrease in total cost (time) is not accompanied by an increase in

total time (cost).



A certain number of iterations for each trial scenario will be determined and mean values

will be drawn for each process constituting the scenarios.

6.5.1 Performance criteria

6.5.1.1 Performance criteria for terminals

• Throughput related (TEU/hour)

• Delay-related (Hours of overall delay);

• Productivity related (Output/Input, e.g., TEU/gantry crane, TEU/labor force)

• Reduction of lead time for train operation in the port (time between the train

shunted into the yard until train discharge can start

• Reduction of lead time in truck processing (automation of gate procedures, time

between arrival of a truck at the terminal until it is ready to be processed at the

truck transfer area)

• Reduction of time and share for manual seal reading (today 100% of all containers

are checked manually)

• Reduction of time and share for checking containers on damages manually (today

100% of all containers are checked manually)

• Increase of terminal throughput capacity

• Reduction of total turnaround time of trucks

• Reduction of total turnaround time of trains

• Increase of share of seals to be read in vessel operation (loading and discharging;

actually hardly done at all)

• Reduction of errors in reading container numbers and seal numbers

• Reduction of lead time identifying differences between booking data and

operational data (e.g. to detect wrong container numbers or differing seal

numbers)

• Reduction of manual input required to update the IT system data with real

information

• Reduction of efforts to answer manual requests on status data by improving status

information provision for the partners in the chain

• Reduction in human resources cost

• Reduction of efforts collecting statistical data by automated procedures

6.5.1.2 Performance criteria for transport operators

• Reduction of manual (e.g. phone) requests on status data by improving status

provision from the terminals




• Reduction of total turnaround time of trains

• Increase of carrier throughput capacity

6.5.1.3 Performance Criteria for transport organizers/freight integrators

• Reduction of manual (e.g. phone) requests on status data by improving status

provision from the terminals and the transport operators

• Reduction of delayed transports where the delay is significant and had not been

communicated to the client.

6.5.2 Cost-Benefit Analysis

The goal of the Cost-Benefit Analysis is to evaluate the trade-offs between benefit aspects

and cost components of the validation scenarios. This task can be beneficial from a

terminal’s point-of-view, only if the relative monetary outcome proved to be positive.

Furthermore, the cost-benefit approach is considered to be the most secure analytical

tool, in order to ensure and justify the proposed actions. Cost-efficiency is to be seen as a

specific performance criterion of the terminal; it will be sought in terms of reduced cost

and time and maximize utilization. The Cost-Benefit Analysis will eventually give some

safe answers to the central and probably most important question of the CHINOS

projects: in what extent and under what operational conditions the proposed CHINOS

technologies at each chosen terminal process will increase its benefits, reduce its costs

and enhance its competitiveness. All the tasks of this project are dedicated exactly to the

actual development of all the suitable new technologies and process reengineering. In that

sense, the appropriate completion of the Cost-Benefit Analysis is given a central role for

the successful project attempt.

The implemented Cost-Benefit Analysis focused on the following issues:

• Personnel cost,

• Purchase cost

• Installation cost,

• Utilization – availability

• Competitiveness and sustainability and

• Level of service in terminals.



Figure 6-35: The Generic Formation of the Implemented Cost-Benefit Analysis

Setting up the framework of the Cost-Benefit Analysis involves several steps. The first one

deals with the criteria to be used. The criterion of the Net Present Value (NPV) is selected

as the main comparison criterion between the “current” and the various scenarios of the

CHINOS project. Furthermore, two additional criteria are selected and implemented,

which are the Internal Rate of Return (IRR) and the Pay Back Period (PBP). The next

Figure shows the implemented Cost-Benefit Analysis procedure including all 3 criteria

under consideration. It must be noted that all the above criteria will be incorporated in a

same manner in the effort for the conclusion of the specific detailed Cost Benefit Analysis.

The second step deals with the selection of the relevant data needed for the completion of

the comparison. The terms “conventional” and “CHINOS” refer exclusively to the

technologies used for terminal operations. The NPV calculations will be conducted

Cost

C C C ……

Benefit

B B B ……

Outcome

Cost-Benefit

Analysis

Different Validation Scenarios



according to the consortium -defined case studies (the so-called scenarios). According to

these scenarios, the examined terminals will operate under different CHINOS

technologies.

6.6 Results of the test analysis

Contrary to the previous chapters, which presented the findings, interpretations and conclusions of the validation team for each specific CHINOS scenario, the present chapter takes a holistic approach in evaluating the CHINOS intervention as one entity. It consists of five sections. The first develops the logical framework matrix of the CHINOS system.

The four subsequent sections discuss the system’s: effectiveness, the degree to which the system results have been achieved; impact, the degree to which the CHINOS system results have contributed in achieving the 'project purpose; relevance, the degree to which the ''intervention logic", as described by the logical framework matrix, corresponds to the real needs of the target group and falls within the wider objectives of the funding agency; and sustainability, the degree to which the “CHINOS system results” will be retained following completion of the project.

In the following figures, the logical structure of the Cost-Benefit analysis of the project is presented, along with its main elements regarding direct and indirect costs & benefits. At the current stage of the project, the following costs and benefits cannot be quantified/ estimated in any way:

• Redesign/maintenance costs for corporate information systems in use at every terminal

• Reduced economic losses from theft

• Reduced losses from terrorism, sabotage and other cases of security breach

• Reduction of human errors due to misreading

• Various benefits from transportation chain improvement, i.e. significant reduction of bottlenecks at various locations of the Logistics nodes, leading to decrease of gas emissions, pollution, traffic, etc.



Table 6-1: Basic Costs & Benefits Analysis framework for CHINOS

Costs & Benefits Analysis

Direct Indirect

Costs Benefits Costs Benefits

CHINOS System

• Purchase

• Installation

• Maintenance

• Reduced Operation costs

• Redundancy of workers at checking points

• Redesign/maintenance of corporate information systems in use at every terminal

• Reduced Economic losses from theft

• Reduced losses from terrorism, sabotage and other cases of security breach

• Reduction of human errors due to misreading

• Various Benefits from transportation chain improvement, i.e significant reduction of bottlenecks at various locations at Logistics centers leading to decrease of gas emissions, pollution, and traffic, etc.



6.6.1 The logical framework matrix

The logical framework matrix pertaining to the entire CHINOS system is developed and presented in this section. The matrix is based on the logical framework matrices of the four project scenarios developed in previous chapters. As such, the list of automation functions developed under the system constitutes its activities:

• A Container Identification System (CIS)

• An electronic seal system (e-seal)

• A damage documentation system (DDS)

These systems all feed into a database system able to be accessed by authorised users to be able to determine the status of their cargo.

Provided that no external obstacles at the company level will nullify the benefits from the implementation of CHINOS, the activities identified above will lead to the following results:

• the successful functioning of procedures and software supporting planning and control along the transport chain;

• the successful functioning of procedures and software supporting data exchange and processing between all partners and

• improved co-operation between partners in transport.

• Automation of gate procedures


• Reduction of manual input required to update the IT system data with real information

• Reduction in human resources costs

• Reduction of time and share for manual seal reading

• Increase of terminal throughput capacity

while the following assumptions are considered necessary for their materialisation:

• the prototype models produced by the project are further developed to form widely applicable tools;

• organizational and managerial changes in the departments (or companies) permit the use of such automation tools; and

• sufficient time is elapsed for the system to mature and produce results and

• the system is used by a sufficient number of users, so as to ensure practical value, compatibility and fairness in trade.



• an extensive awareness campaign is launched to disseminate project results from the development of CHINOS, so as to promote the use of telematics in short sea shipping and inland waterways; and

• there are no location-specific factors prohibiting general application of the tools developed



Intervention Logic Objectively Verifiable Indicators Sources Assumptions Overall objectives

• Objective 3 “Re-balancing and integrating different transport modes”, Research Domain 3.16 of the Thematic Priority 6.2 “Sustainable Surface Transport” Development of equipment, methods and systems for optimal accommodation, fast loading and unloading of intermodal transport units and definition of optimal use of storage space both in vehicles/vessels and terminals and efficient distribution of goods.

• Objective 1 “New technologies and concepts for all surface transport modes (road, rail and waterborne)

Formal statistics Interview with users

Project purpose

• To research a methodology for the integration of container identification information using RFID technology, container security related information (electronic seals) and optical container condition information (Hi-Res images) in inter-modal transport nodes thus supporting the business processes within the nodes and the total transport chains.

• To develop an overall architecture for the implementation of an integrated system for real-time automatic

Reliability

• Number of system failures or crashes per actual running interval

• Ability to support operations Validity

• Accuracy of information • Sufficient internal self-control procedures Usability

• Full compatibility with existing systems • User friendliness • Level of co-operation among partners

Interview with users Demonstrations at site tests

The prototype models produced by the project are further developed to form widely applicable tools Organizational and managerial changes in the departments (or companies) permit the use of such an IT tool. Sufficient time is



Intervention Logic Objectively Verifiable Indicators Sources Assumptions system for real-time automatic container identification and optical damage documentation during the loading/unloading sequence in different inter-modal transport nodes.

• To develop an integrated prototype system for automatic container identification based on RFID-technology and optical damage documentation.

• To develop interfaces to existing legacy systems operated by these nodes.

• To install the prototype system at European inter-modal container handling nodes (ship-to-ground transportation, ground-to-ground transportation),

• to operate the system under real-life conditions and to validate the functionality, scalability and portability to other end-user scenarios.

• To disseminate the results of the project and to develop a credible exploitation plan.

• To contribute to standardization activities in the field of RFID in container handling.

Technical endurance

• Endurance with technical evolution Cost-effectiveness

• Cost reduction due to the system • Time savings due to the system • reduction in average total turnaround time of

trucks, trains and / or vessels • increase in maximum number of containers that

can be handled as input per 24h • increase of maximum number of containers that

can be handled as output per 24h • increase of terminal throughput capacity • reduction of average id-check related man-

hours consumed per container • increase of TEU/labor force (administrative

labor force excluded) • increase of TEU/gantry crane • overall reduction of operational cost for the

terminal • overall economic benefit from increase of the

terminal throughput capacity • reduction of total turnaround time of trucks • reduction of total turnaround time of trains • reduction of lead time for train operation in the

port (time between the train shunted into the yard until train discharge can start)

• economic benefit from increase of throughput capacity

• reduction of lead time in truck processing (automation of gate procedures, time between arrival of a truck at the terminal until it is ready

elapsed for the system to mature, become widely adopted and produce results The system is used by a sufficient number of users, so as to ensure practical value and minimise transportation chain and IT incompatibilities



Intervention Logic Objectively Verifiable Indicators Sources Assumptions to be processed at the truck transfer area)

Ability to support decisions

* Degree by which the easier access to information supports decisions by users

Results

• Development of a system capable of matching mainly part cargoes with vessels having available capacity

• Development of a vessel tracking system through the use of satellite technology

System development

Project reports On-site visits

No external obstacles will nullify benefits resulting from the system

Activities

• Identification of user’s requirements • Business process reengineering • Technical specifications of CHINOS

components • Software/system installation • Test site demonstrations

Means

197 man months in total (for the prototype system) Appropriate hardware and software such as:

Costs

Overall budget Euro 2.604.629

The users are willing to fully co-operate with system developers

Preconditions

The test site is willing to partly finance project activities System developers have the necessary skills

Table 6-2: The logical framework matrix for CHINOS system



6.6.2 Effectiveness of CHINOS system

6.6.2.1 Reliability

The first criterion for measuring reliability is the number of failures or breakdowns per actual running time interval. In this context, the reliability of the system is considered very high, as no technical failure was recorded beyond the testing phase of the system components. This is particularly important for all businesses, which do not have highly specialized in-house expertise in IT or automations troubleshooting.

This need for professional support is probably the reason behind having the CHINOS system installed in a secure server with the system developers, but no positive conclusions can be drawn from this case, as we are still in the testing phase.

In terms of system maintenance and support, all parties involved expressed the need for such services quite clearly. Evidence suggests that the CHINOS applications will require maintenance and support by the system developers, including updating of the system to cope with operational, legislative and other developments. On this topic, the system developers mentioned that, as happens with all new IT products, 80% of the functionality is delivered in the first 20% of the time, while the maturing of the system takes up about 80% of the development time. Hence, a need for professional support or minor further developments will most probably be the case with CHINOS, even beyond the termination of the project.

The second indicator of reliability is the ability of the system to support operations. It goes beyond the technical aspects of the system, and it mainly concerns the informational content of the application and its timely update. All CHINOS components have been successful in this respect, as they were purposely designed to support, enhance and accelerate existing operations.

6.6.2.2 Validity

Accuracy of the transmitted information is a prominent feature of all CHINOS components. All users consider CHINOS a safe communication link, as it has eliminated frequent errors that used to be made during the manual processing of mostly numerical information.

As for the security of the exchanged information against outsiders and intruders, sufficient precautions have been taken for those applications where sensitive information is transmitted. Access to the systems is therefore adequately controlled.

6.6.2.3 Usability

Usability was a concern of the CHINOS consortium since its design stage. The following technical targets on the design of the subsystems have been almost fully reached:

• full compatibility with existing systems;

• platform independence;

• well-established, future proof technology;

• easy to maintain and further develop; and

• low cost, but reliable and fast solutions.



Furthermore, intensive communication took place between developers and users in order to produce operational and user-friendly systems. It is worth mentioning that system developers encountered two major difficulties in this effort:

• the modification of user requirements during development (as usual, “the requirement phase never ends”); and

• the need to distinguish between generic components and specific solutions, generated by the multiplicity of the systems under development.

Despite these problems, as witnessed by both the users of the systems and the members of the validation team, the developers succeeded in producing easy to use solutions fully compatible with existing systems and the workers of each logistics node will face no difficulties using the handheld or the fixed reader as well as the supporting applications running on PCs. Generally, the installation procedure of the systems does not take more than two days, during which the application is presented and its capabilities analysed to the users. There is no real need for additional schooling and tutoring of user employees on the new system. Of course, the necessary time for the absorption of this knowledge depends on the computer literacy of the employees, which also depends on the use of IT in the company’s every-day business. Nevertheless, the minimum requirements do not exceed the basic computer literacy.

6.6.2.4 Technical endurance

The relevant indicator evaluates CHINOS against time and technological evolution. Due to its structure, CHINOS is basically a system mostly indifferent to technological evolution. Of course in a rapidly changing world and a continuously evolving electronics market, no one can really project future developments and therefore assess CHINOS’s technical sustainability, but it is widely accepted that RFID technologies and the related fixed/handheld readers have reached a plateau of technological maturity which guarantees technical endurance to a great extent.

6.6.2.5 Cost-effectiveness

Similarly to most automation technologies, CHINOS saves time by replacing tedious and repetitive tasks. In this respect, benefits have been recorded in all CHINOS components. Time cuts in data processing will lead to the redundancy of employees, who can now be engaged in other revenue-earning tasks, while of similar amplitude is the time saved.

Furthermore, it can be shown that there are secondary time savings not directly related to the processing of information. The electronic form of data entering the system allows for better scheduling of the yard activities, reducing the average service time for each vehicle transiting through the port, leading in turn to savings in the average time a ship stays in port.

The most important benefits, however, concern competitiveness advances of the CHINOS users, who will be able either to meet requirements imposed by clients and supervising authorities and hence stay in business, and expand their business, generating benefits to the surrounding communities, too.

It must be stressed here that the NPV analysis for the 4 terminals serving as test sites gives quite different results concerning the expected annual economic benefits resulting from the full scale installation of CHINOS. This is due to the fact that the current level of automation, size and throughput capacity at each site is different, but also even the type of organization for the test site plays an important role in the diversity of results: For



example, the Greek port of Thessaloniki used to be a public organization, thus the wage level for workers and their number is relatively very high (this variable also varies significantly from country to country).

Stationary ID-point in €

Material: 25300

Labour: 1500

Shipping cost: 800

TOTAL: 27600

Mobile ID-point

Material: 10200

Labour: 1200

Shipping cost: 150

TOTAL: 11550

Software Licenses (most probably per ID-point)

Server License (x1): 5000

Device License (x4): 3000

TOTAL: 8000

Project Implementation (site visit, installation, go live, …)

Site Evaluation: 3300

Installation: 9900

Travel Time: 1100

TOTAL: 14300

Maintenance (per year) For Stationary and Mobile: 2200

TOTAL: 63650

Table 6-3: Various cost components for the implementation of CHINOS

• These costs refer to the prototype system, as used for the CHINOS tests. For

example, the mobile reader system is based on the example used for the tests,

which includes a TDS Nomad handheld with a Savi Mobile reader attachment.

• These prices do not include travel and subsistence costs which will be charged at

cost based system on the prices at the time of travel.

• These costs can be drastically reduced if we have economies of scale due to a

large scale wide adoption of CHINOS in Europe.



• Various economic incentives could be given from each state member of the EU for

this investment at each logistics node, in order to ensure and accelerate its

adoption.

6.6.2.6 Ability to support decisions

As mentioned in the corresponding chapters, the validation team devoted a lot of time on the system, and we are now convinced that CHINOS has the ability to help the final users in decision making. The system is an efficient decision-support tool, which can be put in good use in every environment, including for example all sea ports of Europe and various other logistics centers.

Within the CHINOS system, a SCEM (Supply Chain Event Management) methodology system is developed for logistic purposes to evaluate how SCEM concepts can be used for intermodal container transports covering several sub-transports performed by different transport modes (e.g. imports using ocean shipping to one of the big North Sea ports, rail transport into the hinterland, final distribution to the receiver by truck).

This SCEM system, called Chain Event Manager, compares the expected events with the current events and decides on appropriate pre-configured actions, e.g. to inform the user in case (and only in case) of problems. Problems can be coped with soon after their occurrence and before they cause a severe impact to the transport process. Thus, an optimisation of the transport chains will become feasible.

In the course of the CHINOS project, a concept and software tool have been developed to support this approach. Events, decision rules, and corresponding actions can be defined; links to operational systems ensure that the planning data are always up to date. It is a goal within the project to implement a system which is able to receive and process these events automatically respectively to react on the absence of events. In case of deviations with respect to the planned transport process, the manager of the transport chain will be informed such that he can intervene as soon as possible, for example by re-scheduling a delayed container to a later train.

The intermodal transport of a container is accompanied by so-called events, which divide into two categories: On the one hand there are expected events such as loading and unloading messages. These and the sequence of their occurrence are clearly defined and can easily be monitored. The second class are events which occur unexpectedly and which may allude to problems such as delay messages or a notice indicating a technical defect.

For each event there are decision rules which examine its occurrence on time, delay or total absence. Depending on the result of these examinations, the SCEM system is able to initiate appropriate actions in a flexible way. It can send emails or SMS which can notify their receivers about the occurrence of a specific event. In addition, the user’s computer system can be affected such that containers originally associated to a cancelled voyage are marked so they can easily be re-scheduled to another voyage.

The SCEM approach can be used for security purposes as well. Of course there are logistic events which could be also interesting for security issues, e.g. a delayed arrival of the container at a terminal could also be a fact of a disruption. But most events which are important for security of a transport are not bound directly to logistic processes.



6.6.3 Impact of CHINOS system

The impact of an intervention can only be properly assessed if sufficient time has elapsed for the system to mature and have a sustainable effect towards meeting the CHINOS system’s objectives. In our case study, this is not possible, as the validation of the system takes place during the project period. Faced with this situation, the validation team has tried to capture and will present in this section the expected or perceived impact of CHINOS components.

To the extent that almost all CHINOS users have benefited from cost savings, as documented in the previous section, their competitiveness has been improved to varying degrees. In their broader definition, the objectives have been achieved in varying degrees. In a narrower sense however, CHINOS has made no impact on the operations mode of the test sites despite the fact that the relevant project results were produced. The pilot operation of CHINOS and not a full scale installation which would necessitate the redevelopment of all software used at CHINOS test sites can be cited as the main contributor to this outcome.

In moving from the CHINOS system purpose to its overall objectives, or in other words from the specific to the general, the following two points need to be made:

• Not all of the recorded benefits on the specific scenarios can be accrued to the entire industry.

• No matter how successful the specific case studies are, the achievement of the overall objectives of a project like CHINOS depends heavily on the awareness campaign undertaken, aiming to expand the outreach of the project and disseminate its results. In this respect CHINOS has been very active. Members of the CHINOS consortium made several presentations during the implementation period of the project at EU-sponsored meetings, conferences and exhibitions, special public relations events organised by the consortium, specialised workshops, articles of periodicals and national and regional newspapers, etc. Given that it not easy to persuade transport providers to consider this new technology, CHINOS has done all it was possible within the framework of the project.

The main conclusions of general use that can be drawn from CHINOS in terms of its impact are summarised below:

1. The facilitation of communication and information exchange achieved by RFID applications lead to elimination of errors, cost reductions, and improved transparency. This results in enhanced co-operation among different business units of the logistics node and better cooperation between a logistics node and the freight forwarders or shipping companies.

2. There is a strong resistance to organisational changes both intra- and inter-company. It is very difficult to shift to a new system and abandon old and well-trusted procedures, even when the technological advances are pressing towards this direction. Transport in general, and its waterborne segment more specifically, have proved very traditional.

3. Computer aided Automations are still not being considered as a strategic issue within the Logistics business.

4. CHINOS has been a technological success, its real power being the fact that it provides tailor-made solutions to existing market needs. Its impact, however, could be



much higher, if seen as an integral part of business processes, also contributing to process improvements.

6.6.4 Relevance of CHINOS system

The purpose of this section is to discuss the relevance of CHINOS, or in other words the degree to which the ''intervention logic", as described by the logical framework corresponds to the real needs of the shipping industry and Logistics sector in general and falls within the wider objectives of the EU, which finances the project.

From the validation phase, all CHINOS components are practically ready to be used, and as long as users are willing to pay for the services offered. This is probably the most indisputable evidence of the project’s relevance.

Furthermore, there is evidence that the market is moving towards the same direction. For example, there are already certain barcode technologies approaching the some of the problems CHINOS is dealing with, but their level of sophistication is much lower compared to CHINOS which has a holistic approach to various issues with cutting edge technological means, such as RFID. This is further evidence of the relevance of CHINOS.

6.6.5 Sustainability of CHINOS system

The purpose of this section is to discuss the potential of CHINOS to remain in use even after the end of the project-related funding. In this respect, the central argument cannot be different than the fact that CHINOS software components are practically fully developed. It is worth repeating once again that CHINOS software applications and hardware components are already available to enter commercial use, as long as users other than CHINOS members are willing to pay in order to acquire the appropriate hardware, software and the right to use it.

However, the challenge that CHINOS faces comes from its innovative character and the well-documented psychological resistance in abandoning tested practices of decades for a new tool, where no workers are employed. In this sense, the sustainability of CHINOS is difficult to assess.

Despite its traditional character, the waterborne transport industry is evolving, too. The merge of liner shipping companies with freight forwarders and the blending of container business with port operations are two good examples. Our experience from the scenarios shows that CHINOS can be adapted to serve the needs of ports and freight forwarders effectively, and as such, one can guess that it can survive the troubled waters. In fact, the evolutionary trends in the industry can be seen as more of an opportunity than a threat, provided that CHINOS remains in the first line of business and is not kept as a tool for all activities.

Furthermore, modern large logistics companies are relatively large in size and as such, more responsive and highly competitive according to market needs. Especially the liner business is more flexible than any other segment of the transport sector. This further supports our view that CHINOS will survive. We strongly believe that automation technologies will change business patterns at an enormous speed and CHINOS can serve as a starting point with large potential towards meeting the great expected demand for flexible and highly connective/easy to integrate automation solutions, as long as it is adopted from all participants of the supply chain, i.e. shipping companies, logistics nodes, freight forwarders, etc at a Pan-European scale.



6.7 Analysis Summary

In terms of impact, the main conclusions of general use that can be drawn from the CHINOS system are summarised below:

1. The facilitation of communication and information exchange achieved by RFID applications lead to elimination of errors, cost reductions, and improved transparency. This results in enhanced co-operation among different business units of the logistics node and better cooperation between a logistics node and the freight forwarders or shipping companies.

2. There is always a strong resistance to organisational changes both intra- and inter-company and it is every time a very difficult to shift to a new system and abandon old and well-trusted procedures, even when the technological advances are pressing towards this direction. Automations are still not being considered as a strategic issue within the Logistics business, while transport in general, and its waterborne segment more specifically, have proved very traditional. CHINOS, however, has the potential to be adopted by the sector, because it delivers tangible benefits.

3. CHINOS has been a technological success, its real power being the fact that it provides tailor-made solutions to existing needs of the logistics supply chains. Its impact, however, could be much higher, if seen as an integral part of business processes, also contributing to process improvements.

The project’s relevance is supported by the fact all CHINOS components with are ready to use.

The evolution of the waterborne transport industry and the responsiveness of the shipping companies to market needs due to their relatively small size are factors supporting the sustainability of the project, given that container transport gains further momentum from the constantly increasing international trade and that CHINOS remains at the frontline of business not being used as a mere tool for only specific handling activities. IT will change business patterns at an enormous speed. CHINOS can serve as a starting point with large potential.

CHINOS software components are practically fully developed. It is worth repeating once again that CHINOS software applications and hardware components are already available to enter commercial use, as long as users other than CHINOS members are willing to pay in order to acquire the appropriate hardware, software and the right to use it. The reliability of the system is considered very high, as none of the parties involved has recorded any technical failure beyond the testing phase of the applications. To the extent that almost all CHINOS users can benefit from cost savings, as documented in the previous sections, their competitiveness could be improved to varying degrees. In their broader definition, the objectives can be achieved in varying degrees. In the annual cash flows due to the implementation of CHINOS system, we present 4 different implementation scenarios, where the degree of workers redundancy due to the introduced automations varies from 25% to 100% of the maximum estimated possible human wage substitution at this site. In each of the scenarios, the number of devices employed also varies, which means that the system could also be selectively deployed at some checking points, not the totality, according to the decisions of the company. In a narrower sense however, CHINOS has made no impact on the operations mode of the test sites despite the fact that the relevant project results were produced. The pilot operation of CHINOS and not a full scale installation which would necessitate the



redevelopment of all software used at CHINOS test sites can be cited as the main contributor to this outcome.

It must be stressed here that the NPV analysis for the 4 terminals serving as test sites gives quite different results concerning the expected annual economic benefits resulting from the full scale installation of CHINOS. This is due to the fact that the current level of automation, size and throughput capacity at each site is different, but also even the type of organization for the test site plays an important role in the diversity of results. Generally, the total result more than compensates for the initial investment, as it manages to amortize initial investments in a relatively short time span, as it can be seen from the payback period values under several assumptions, as basis. In conclusion, as modern logistics companies are large in size and competitive as such, they could be very adaptive to this new technology. Especially the liner business is more flexible than any other segment of the transport sector. Automation technologies have the potential to change business patterns at an enormous speed. CHINOS can serve as a starting point with large potential towards meeting the great expected demand for higher productivity and security at logistics centers, as long as it is adopted from all participants of the supply chain, i.e. shipping companies, logistics nodes, freight forwarders, etc. at a Pan-European scale.



7 Exploitation Plans

CHINOS was always intended to be a prototype system. Its objective was to demonstrate

the benefits that can be gained by using state-of-the-art technologies such as RFID in

combination with leading Information Technology systems to identify and track containers

throughout their logistics journey, giving information of its status and location and

confirming whether the container was still in the condition as when it was shipped, tamper

and damage free. And more importantly, the system would be able to alert operators

whenever a deviation from its planned journey was observed.

The belief of the CHINOS team is that the project has fully demonstrated its capability and

is now ready to be taken on to the next step of having one or more major industrial

organizations take the prototype concept and turn it into a commercially available

‘productionised’ system able to be adopted by the intermodal container transportation

industry.

This step will only happen if CHINOS receives the full endorsement of the shipping lines,

ports and operators to give one or more of the leading manufacturers the confidence to

invest in taking the concept from prototype to a market available solution.

The objective of the exploitation plan was to optimise the use of the CHINOS

breakthroughs and complete Container Management solution in the market by proving the

concept and disseminating the information throughout the industry, as well as taking the

individual elements of the system and applying them to projects in other sectors or

industries requiring a similar solution.

Exploitation of CHINOS components can therefore be carried out at three levels:

• at the Total Solution Level

• at the Module level (where specific individual modular CHINOS breakthroughs

may be applicable to other applications)

• at the device level (hardware or software).

Results from the three tests in real-life terminal operating conditions confirmed that the

CHINOS system is able to satisfactorily identify and track containers throughout their

transport chain, either at the quayside or transported by rail or truck. The system also

assures that a container seal has not been tampered with whilst the Damage

Documentation system is able to record the physical condition of the container to check

for accidental or malicious damage.

It is therefore initially appropriate to consider all three levels of exploitation.

However, due to the complex nature of Intermodal container transport it was unfortunately

not possible to leave the CHINOS system operating over an extended time period which

would have provided uncontroversial proof of the benefits of the total system. For this

reason it is not likely that any end user partners would want to implement the whole

CHINOS solution, even as a long time trial or test.



But the second and third alternatives, namely that of using specific modules of the system

or considering a device level approach would be perfectly feasible.

7.1 Initial Plans

The initial plan of action for exploitation of the CHINOS breakthroughs was as follows:

1. Obtain agreement from the end-user companies in the CHINOS Consortium to trial

and/or use the CHINOS solution in their own operations.

2. Convince end-user companies in the CHINOS Consortium to disseminate the

solution information to obtain support from other end-users in the industry.

3. Obtain agreement from the end-user companies in the Mirror Group to trial and/or

use the CHINOS solution in their own operations.

4. Secure the support of other end-users through dissemination by the CHINOS

Consortium partners

5. Contact all CHINOS potential end-users in the Container Transport Industry to

make them aware of the solution and elicit their ‘in-principle’ support of the system.

This plan was based upon the fact that the CHINOS Consortium is made up of end-users,

service providers and technology providers, so between us there is a very good network

available to be used to get good broad dissemination to a wide section of the Market. This

would cover all options of exploitation, from total systems to Modules and devices. It was

therefore expected that interested users could be served by an individual CHINOS partner

offering the solution as a prime contractor or be able to offer it in conjunction with another

partner as a joint solution. The advantage of this last option is that it leverages the broader

skills and experience within the CHINOS group, but it also has the disadvantage of added

complexity in defining the roles and ownership within the group.

7.2 Dissemination and Exploitation Actions

Market observation had shown us that we needed more than just a conventional

marketing concept to market CHINOS. The success of this project is not primarily a

question of technical feasibility but one of overcoming system-related hurdles when

introducing the technology to the market. Marketing the technology by setting up "island

solutions" at individual customers would not be an option because it would not bring any

benefits. The CHINOS project team therefore decided that to go with a marketing concept

that would meet all the formal requirements but would not contribute much in the end

would not be worth pursuing. Instead, our goal was to develop, pursue and assess

approaches that could help us overcome the described network effect and lay the

foundation for the future marketing success of CHINOS. The marketing concept we then

decide upon would vary depending on which approach we decided to follow.

Regardless of the approach, it definitely made sense to utilize the media we had at our

disposal for public relations. It was imperative that we raise the awareness of decision-

makers. The CHINOS team found that the majority of the potential users we spoke to

were unfamiliar with the functions and possibilities presented by different technologies and

therefore had misleading associations with the term RFID as it relates to containers. The



CHINOS team used Internet presence, a film on the tests conducted, video animation

about processes at a container terminal that had been optimized by RFID, a presentation

on the topic which we gave at various events and some articles published in influential

trade journals to clarify people's associations with the topic.

Our assumptions about the effectiveness of using a concrete marketing concept have

been confirmed in several individual talks with representatives of major companies in the

industry and at panel discussions held at conferences and trade fairs. We have come to

the conclusion that introducing the CHINOS project at conferences and trade fairs and

discussing it with organizations and representatives of the political and corporate worlds

would be essential to marketing the product. Without these public relations activities and

the feedback they generated, the project would only have had academic value. By

engaging in these activities, we have made numerous decision-makers aware of the topic

and they have recognized potential for the product. The project team was able to make

some valuable contacts and avoid expensive, useless marketing campaigns by applying

what we learned about market mechanisms.

The project team analysed the following alternatives as possible approaches:

• Technology provider(s) to pre-finance, set-up and operate system.

• Leading Shipping Company to implement system in their operations

• Terminal operators and loaders to motivate shipping companies to equip their

containers

• Forming a consortium (a "commitment platform") to implement the system

• Using political influence to speed up introduction of system.

7.3 External limitations and challenges

7.3.1 Investment of IT system providers

ICT providers are placing increased emphasis on being able to present new business

models to their customers. The basis of this concept is to replace the traditional method of

selling a piece of hardware and a license for the accompanying software - resulting in high

fixed costs for the customer – with usage-based price models with a very low fixed-cost

share, thereby minimizing the risk for customers. This often simplifies marketing services

and also follows a general leasing trend in the industry.

In order to be able to introduce end-to-end information and communications technology

(ICT) in connection with CHINOS as a service offer on the market, the fist step would be

to equip all containers in the global loop with tags. Unless we do this, terminal operators

will not see any added value generated by this solution. However, this is problematic with

an open standard as is used by CHINOS. Technology providers would first need to equip

all containers with an RFID tag at their own cost but without a guarantee that the terminal

operators will use their solution to scan the tags. Any other technology provider could

jump on the bandwagon and offer their solution without having the cost of equipping the

containers in the first place. This presents an excessive investment risk. Nor would a

system that uses encrypted tags that can only be scanned by one supplier be the answer.



Users would fear a monopolistic approach and it would be unlikely that shipping

companies would allow their containers to be equipped with proprietary tags.

7.3.2 Leading Shipping Company to implement system

From the organization point of view, the easiest way to introduce RFID technology in

container transport is through a leading shipping line able to generate cost advantages

over their competitors and be able to convince their business partners of the benefits of

the technology. This would lead to increased pressure on other market participants to

introduce RFID to remain competitive.

Market leaders like Maersk Line - as the largest shipping company in the world with a fleet

capacity of around 17 million TEUs - have an influence on the market that is not to be

underestimated. Some companies also operate a large number of own container terminals

worldwide enabling them to benefit directly from automation potential within their own

transport chain.

But even the market leaders have limitations when it comes to developing its own

standards and have indicated to the CHINOS project team that the complexity of

implementing a new RFID technology standard are too great for them to risk taking on this

venture alone. Most of them are entirely open-minded with regards to RFID technology

but currently does not want to get involved as the first mover - at least in the short to

medium term - unless other shipping companies were to do the same with them.

7.3.3 Terminal operators and shippers to motivate shipping Lines

Shippers and terminal operators would particularly benefit from the introduction of RFID

technology to relieve the problems associated with manual container identification. RFID

would give them the increased efficiency and transparency needed in the transport chain

in order to plan for increasing volume of transport and would minimize the threat of

bottlenecks for cargo companies.

However, terminal operators, who would be able to gain a competitive advantage over

other cargo companies by being among the first to introduce RFID, have no direct

influence on how containers are equipped. And as previously mentioned, all containers

need to be equipped with RFID tags and e-seals for the system to be viable.

Traditionally, terminal operators tend to think locally and are not accustomed to joining

forces to put pressure on the shipping companies at a global level. In addition, some

major terminal operators have started implementing OCR technology to identify their

containers. Although this technology is inferior in many respects to RFID, it does have the

advantage that users do not have to wait for international standards. And this

unfortunately leads to reluctance toward other identification technologies.

The CHINOS project team has also made efforts to promote RFID in the shipping

industry. They met with the BDI (Federation of German Industries) who clearly recognized

the advantages of RFID and saw optimization potential for their own processes. But it

soon became clear that the task of getting agreement from all industry participants in a

single country - let alone globally - far exceeds the capabilities of the CHINOS project

group. So this approach will not be considered further.



7.3.4 Forming a consortium to implement the system

Based on our experience in this industry, establishing cooperation with leading

organizations in the logistics world with the goal of promoting comprehensive usage of

RFID technology was thought of as a likely step. For example, the cooperation could work

to eliminate reluctance to introducing the technology by actively engaging in public

relations and meeting with political representatives. However, the cooperation's main task

would be to minimize the investment risk, something that shipping companies repeatedly

use as their main argument against introducing the technology.

Several meetings were organized with well-known logistics service providers, shipping

companies, scientists and terminal operators to discuss this approach and a concept was

developed based on the commitment of the individual partners.

Some of the main assumptions made were:

• All shipping companies joining the consortium agree to fit at least 50 percent of

their containers with RFID license tags within 5 years.

• Individual companies would not be under any contractual obligation to fulfil these

requirements until all companies had committed to equipping enough containers

with tags so as to have a significant influence (approx. 50% of container market)

• A company failing to meet their obligations would pay the pool a penalty (around

$50) equivalent to the estimated cost of equipping a container for each container

they were supposed to equip

• A web service would be used to monitor the container equipping process. This

service would enable the shipping companies to register their equipped containers

on a central platform (CHINOS).

• The pool would be financed by a one-time membership fee and the involvement of

the technology providers.

However, at our meetings with our sample of shipping companies we learned that they

were unlikely to implement the technology even without the investment risk. Though they

saw the advantages of RFID they felt that there were insufficient other leading shipping

lines with similar plans to justify the investment.

7.3.5 Political influence

The events of September 11th 2001 (9/11) gave rise to an increase in security

requirements and laws, especially in the US, which caused much uncertainty in the

logistics industry. The culmination of these activities was the plan to screen the contents

of all containers heading to the US as of 2012. There are still many technical and

organizational questions that need clarification and so it is no surprise that the industry

has grown sceptical of the influence of law makers and politicians.

Nonetheless, governments can play a role in introducing open, standardized RFID

solutions. In this context, the EU has the opportunity to provide the world with a positive

example of a future-oriented, efficient and ecologically sustainable innovation approach.



In addition to the positive effects this would have on the efficiency of some companies,

optimized organization of freight traffic would also take some of the burden off public

infrastructure.

But despite this, we came to the conclusion that trying to introduce an environmentally

friendly innovation that makes sense from an economic perspective but does not lead to

individual competitive advantage, is extremely difficult to do.

7.4 Summary on exploitation

Introducing innovations to the market is always more than just a question of technology. It

is also a question of society. The CHINOS project team was able to come up with

satisfactory solutions to the technology problems. However, despite their efforts, it was out

of the control of the team how best to introduce this technology to the market since market

factors could not be influenced. This lack of individual advantage can be traced back to

the network effect, which implies that a company will not benefit from a technology until as

many other companies as possible are also using that technology. Nonetheless, there is

no question that employing this technology would benefit both the macro economy and

the environment. This opinion is shared by those shipping companies that are currently

reluctant to introduce the technology and that place priority on maintaining a competitive

advantage over the others.

The consensus of opinion from all CHINOS Partners is that it will be nigh-on impossible to

exploit the total CHINOS concept until the RFID technology becomes widely adopted by

the main shipping lines and some of the major ports and transport operators, endorsed

and ratified by the international Standards Organization (ISO) as a standard for tracking

intermodal containers. And for this to happen will require two things to happen:

1. That the world’s leading shipping lines and operators actively lobby for and

participate in the process of establishing a new international standard

2. That one or more major industrial organization(s) invests in taking the results of

the CHINOS prototype concept and transform it into a readily available commercial

application

This is not a quick process, and is likely to take several years to materialise, but

encouragingly RFID is being seen as the leading technology to enable the optimization of

container transport so it is likely that this process will start sooner rather than later,

specially in view of the success of CHINOS which will be seen as a major endorsement

for the technology.

All partners intend to use their acquired knowledge, CHINOS prototypes, etc. for their

future business. It was decided that individual partners should explore their own

opportunities of exploiting the excellent work carried out by the CHINOS team, primarily

looking at ways of using some of the sub-systems and modules developed by the project.

This would not preclude partners seeking ways of working together to offer even more

complete sub-systems than what they may be able to do individually – indeed this will be

actively encouraged – but in reality it may be more practical to explore ways of exploiting

the individual modules and elements of the CHINOS solution.

The technology partners are enables to further develop products based on the CHINOS

prototypes,



The research partners will use their knowledge for further R&D projects in the research or

industrial field.

The users are better prepared to implement RFID and damage documentation systems

since they are now well experienced on that.

At the Modules and Sub-system level the experience gained from CHINOS is far easier to

exploit, because most of the CHINOS elements can be used as stand-alone solutions in

their own right.

Many researchers consider introducing RFID-supported identification technology for items

in the logistics process to be a fundamental prerequisite for further automation and

increased efficiency. The separation of economic growth and the consumption of scarce

resources will eventually call for this technology. The political sphere should therefore

have a vital interest in introducing RFID in container traffic. The effects of political efforts

on positive economic development, something that is being discussed repeatedly in the

current crisis, can be considered to be exceptionally high in number as well as

sustainable. The next logical step on the road to a globally optimized, more

environmentally friendly and more secure exchange of goods involves finding the right

political platform and the right legal impetus for companies to introduce this innovation.

The EU could play a pioneering role in this and benefit from the CHINOS team's

experience.

We therefore recommend that the EU look into this topic further and place it on the

international political agenda.



8 Conclusions

In conclusion, the CHINOS project has been a significant breakthrough in demonstrating

the benefits to be gained by employing an integrated Intermodal Container identification,

tracking, status monitoring and damage documentation system based on leading edge

RFID technology.

It is too soon, however, to expect the full CHINOS system to be adopted as an operational

system until the RFID system has been ratified as an ISO standard for the shipping

industry and one or more leading manufacturers invest in bringing the CHINOS prototype

system to a fully commercialised system readily available on the open market. This

market penetration is unfortunately out of the influence of the CHINOS group.

The CHINOS breakthrough will nevertheless be exploited in the form of supportive

evidence for the leading shipping lines, operators and ports to endorse the technology in

pursuance of getting it ratified as an international standard for the Intermodal container

transportation industry.

Many of the elements of the system can be used as stand-alone modules and will be

actively exploited by several CHINOS Partners. Namely the Container Identification and

E-seal modules, the Damage Documentation system and the Chain Event Manager will

be exploited independently, which in turn will give added support to the industry to speed

up the process of adopting this leading edge technology and getting it ratified as an

International Standard for the shipping Industry.

In terms of impact, the main conclusions of general use that can be drawn from the

CHINOS system are summarised below:

4. The facilitation of communication and information exchange achieved by RFID

applications lead to elimination of errors, cost reductions, and improved transparency.

This results in enhanced co-operation among different business units of the logistics

node and better cooperation between a logistics node and the freight forwarders or

shipping companies.

5. There is always a strong resistance to organisational changes both intra- and inter-

company and it is every time a very difficult to shift to a new system and abandon old

and well-trusted procedures, even when the technological advances are pressing

towards this direction. Automations are still not being considered as a strategic issue

within the Logistics business, while transport in general, and its waterborne segment

more specifically, have proved very traditional. CHINOS, however, has the potential to

be adopted by the sector, because it delivers tangible benefits.

6. CHINOS has been a technological success, its real power being the fact that it

provides tailor-made solutions to existing needs of the logistics supply chains. Its

impact, however, could be much higher, if seen as an integral part of business

processes, also contributing to process improvements.

The project’s relevance is supported by the fact all CHINOS components with are ready

to use.



The evolution of the waterborne transport industry and the responsiveness of the shipping

companies to market needs due to their relatively small size are factors supporting the

sustainability of the project, given that container transport gains further momentum from

the constantly increasing international trade and that CHINOS remains at the frontline of

business not being used as a mere tool for only specific handling activities. IT will change

business patterns at an enormous speed. CHINOS can serve as a starting point with large

potential.

CHINOS software components are practically fully developed. It is worth repeating once

again that CHINOS software applications and hardware components are already available

to enter commercial use, as long as users other than CHINOS members are willing to pay

in order to acquire the appropriate hardware, software and the right to use it. The reliability

of the system is considered very high, as none of the parties involved has recorded any

technical failure beyond the testing phase of the applications. To the extent that almost all

CHINOS users can benefit from cost savings, as documented in the previous sections,

their competitiveness could be improved to varying degrees. In their broader definition, the

objectives can be achieved in varying degrees. In the annual cash flows due to the

implementation of CHINOS system, we presented four different implementation scenarios,

where the degree of workers redundancy due to the introduced automations varies from

25% to 100% of the maximum estimated possible human wage substitution at this site. In

each of the scenarios, the number of devices employed also varies, which means that the

system could also be selectively deployed at some checking points, not the totality,

according to the decisions of the company.

In a narrower sense however, CHINOS has made no direct impact on the operations

mode of the test sites despite the fact that the relevant project results were produced. The

pilot operation of CHINOS and not a full scale installation which would necessitate the

redevelopment of all software used at CHINOS test sites can be cited as the main

contributor to this outcome.

It must be stressed here that the NPV analysis for the 4 terminals serving as test sites

gives quite different results concerning the expected annual economic benefits resulting

from the full scale installation of CHINOS. This is due to the fact that the current level of

automation, size and throughput capacity at each site is different, but also even the type

of organization for the test site plays an important role in the diversity of results. Generally,

the total result more than compensates for the initial investment, as it manages to

amortize initial investments in a relatively short time span, as it can be seen from the

payback period values under several assumptions, as basis.

In conclusion, as modern logistics companies are large in size and competitive as such,

they could be very adaptive to this new technology. Especially the liner business is more

flexible than any other segment of the transport sector. Automation technologies have the

potential to change business patterns at an enormous speed. CHINOS can serve as a

starting point with large potential towards meeting the great expected demand for higher

productivity and security at logistics centers, as long as it is adopted from all participants

of the supply chain, i.e. shipping companies, logistics nodes, freight forwarders, etc. at a

Pan-European scale.

To the best of our knowledge, there is no similar to CHINOS finished R&D project. The

same holds true for commercial projects and other studies. In this respect, there is no

evidence for duplication of efforts. More importantly, CHINOS potential contribution can be



considered original. CHINOS differentiates itself as it aims to provide ready-to-the-market

RFID-enabled solutions enhancing both the security and the executional status. This two-

directional objective (v., commercial and security/legal) renders CHINOS quite unique.

Moreover, another innovative point of CHINOS is that it does not merely aim to substitute

current practices as they are. Conversely, the new business processes are getting re-

engineered in order to match the particularities of RFID technology. Furthermore, the

CHINOS includes RFID-enabled port-rail applications something that is rarely identified in

the literature.



9 Acknowledgements

The authors acknowledge the significant input of GAC, ThPA, CCG, NTB, and Polzug

employees. Input from GAC was given by Capt. Apostolos Demertzis, Ms. Marilena

Papadopoulou, and Ms. Sylvia Argiropoulou. Input from ThPA was given by Dr. Dimitrios

Makris, Mr. Dimitrios Tsitsamis, and, especially, Dr. Christos Papadopoulos. Sincere

thanks also to Ms. Andrea Bosnar of CCG. At NTB, we would like to thank Mr. Andreas

Russler and his colleagues for their profound input. Last but not least many thanks to the

persons involved in the Polzug analysis: Mr. Jens Pillkahn, Mr. André Lingemann, and the

employees of the Pruszkow Terminal at Warsaw.



10 References

Bacheldor, B. (2006): “Georgia Cargo Terminals becoming RFID-enabled,” The RFID

Journal, http://www.rfidjournal.com/article/articleview/2493/ (accessed 21-7-2007).

Bizjournal (2006): “Mitsui subsidiary to offer RFID services at a port,” Jacksonville

Business Journal,

http://www.bizjournals.com/jacksonville/stories/2006/01/09/daily28.html?from_rss=1

(accessed 4-3-2007)

BRS-Alphaliner (2005) TOP 100 of Liner Operators as of 1/1/2005.

CargoSecurityInternational (2005): “New Zealand: Customs conduct e-seal pilot

programme,”

http://www.cargosecurityinternational.com/channeldetail.asp?cid=15&caid=5858

(accessed 20-5-2007)

CargoSecurityInternational (2006): “Virginia Port Authority teams with GE security to

create first CommenceGuard Secure Cargo Corridor in the US,”

http://www.cargosecurityinternational.com/channeldetail.asp?cid=4&caid=7267

(accessed 20-5-2007)

Chen, T. (2005): “RFID and sensor-based container content visibility and seaport security

monitoring system,” Proceedings of the International Society for Optical Engineering

(SPIE).

Chin, L.-P. and Wu C.-L. (2004): “The Role of Electronic Container Seal (E-Seal) with

RFID Technology in the Container Security Initiatives,” Proceedings of International

Conference on MEMS, NANO and Smart Systems.

Collins, J. (2005a): “Korean seaport tests RFID tracking,” The RFID Journal,

http://www.rfidjournal.com/article/articleview/1438/1/12/ (accessed 21-2-2007).

Collins, J. (2005b): “GE uses RFID to secure cargo,” The RFID Journal,

http://www.rfidjournal.com/article/articleview/1317/1/1/ (accessed 28-2-2007).

Cordeau, J.-F., Laporte, G., Legato, P. and Moccia, L. (2005) Models and Tabu search

algorithms for the Berth allocation Problem, Transportation Science, 39(4), pp. 526-538.

Fassa et al (2006). Container terminal information management system at the port of

Thesaloniki. IT&T solutions in Logistics and Maritime Applications, eLOGMAR-M

proceedings.

Friess, P. (2006): “European Perspective on RFID,” RFID Acedemic Convocation, Boston

(USA), January 23-24, 2006

Hulme, G. V. (2005): “RFID helps to track cargo containers,” Information Week,

http://informationweek.com/story/showArticle.jhtml?articleID=160501261 (accessed 21-1-

2007).

IBM Business Consulting Services (2005a) Setting a new course in the container

shipping industry.



IBM Business Consulting Services (2005b) Healthy ocean carrier: surviving and thriving

in competitive times.

ICC (2005) Policy statement of the ICC Committee on Maritime Transport, International

Chamber of Commerce, Paris.

IndustryWeek (2006): “Savi networks extends RFID to largest container port in UK,”

IndustryWeek, http://www.industryweek.com/ReadArticle.aspx?ArticleID=12746

(accessed 4-3-2007).

LaudisSystems (2006): “Passive RFID Improves Operation Efficiency in Container Yard,”

http://www.laudissystems.com/whitepaper/Laudis_CaseStudy_CIMC.pdf (accessed 25-5-

2007)

Mueller, R. (2007): “Developing a Security Event Management System for intermodal

transport,” abstract submitted to the International Symposium on Maritime Safety,

Security and Environmental Protection to be held on 20-21/9/2007 in Athens, Greece.

Mullen, D. (2005): “The application of RFID Technology in a Port,” Port Technology

International.

Muprhy-Hoye, M., Lee, H. L. and Rice, J. B. (2005): “A real-world look at RFID,” Supply

Chain Management Review.

Park, D.-J., Choi, Y.-B. and Nam, K.-C. (2006): “RFID-Based RTLS for Improvement of

Operation System in Container Terminals,” Asia-Pacific Conference on Communications.

RFIDJ (2003): “Port turns to RFID for security,” The RFID Journal,

http://www.rfidjournal.com/article/view/367/1/1/ (accessed 21-7-2007).

Robert, M. (2005): “RFID container seals deliver security, value,” The RFID Journal,

http://www.rfidjournal.com/article/articleview/1965/ (accessed 21-2-2007).

SAP (2005) General on RFID, Presentation at the Zaragoza Logistics Center, Spain.

Sheffi, Y. (2004): “RFID and the innovation cycle,” The international journal of logistics

management, 15(1).

Swedberg, C. (2006a): “RFID adds to security at Virginia Port Authority,” The RFID

Journal, http://www.rfidjournal.com/article/articleview/2748/ (accessed 21-7-2007).

Swedberg, C. (2006b): “Colombian Shipper to use RFID,” The RFID Journal,


Swedberg, C. (2006c): “APM terminals readies its RFID system,” The RFID Journal,


TelematicsUpdate (2006a): “CHEP evelops global track & trace system,”

TelematicsUpdate, http://www.telematicsupdate.com/subpages.asp?news=53035

(accessed 18-3-2007).

TelematicsUpdate (2006b): “EPCglobal initiates RFID container tracking pilot between

Hong Kong and Japan,” TelematicsUpdate,

http://www.telematicsupdate.com/subpages.asp?news=53311 (accessed 18-3-2007)



TelematicsUpdate (2007a): “Asia News: WhereNet establishes Asia-Pacific HQ in

Shanghai,” TelematicsUpdate,

http://www.telematicsupdate.com/subpages.asp?news=54518 (accessed 20-3-2007).

TelematicsUpdate (2007b): “Europe News: Savi extends SaviTrak to Port of Rotterdam,”

TelematicsUpdate, http://www.telematicsupdate.com/subpages.asp?news=54464,

accesses 20-3-2007).

The Economist (2007) “Containerships: Maxing out, The Economist, 382(8518), p. 66.

Tsilingiris, P. S. (2006). Investigation of dry port opportunities via intermodal operations

mapping. M.Eng. Thesis. Massachusetts Institute of Technology-Zaragoza International

Logistics Program.

UNCTAD (2004) Review of Maritime Transport, United Nations, New York and Geneva.

Violino, B. (2006): “APL Reaps Double Benefits from Real-Time Visibility,” The RFID

Journal, http://www.rfidjournal.com/article/articleview/2375/1/352/ (accessed 19-11-

2006).

Vis, I. and De Koster, R. (2003) Transshipment of containers at a container terminal: an

overview, European Journal of Operational Research, 147(1), pp. 1-16.

Wessel, R. (2006): “Bremen researchers developing intelligent containers,” The RFID

Journal, http://www.rfidjournal.com/article/articleview/2774/1/1/ (accessed 21-1-2007).

Date post:	25-Jun-2020
Category:	Documents
Upload:	others
View:	1 times
Download:	0 times

CHINOS Final Report final draft - TRIMIS · 2015-07-03 · Project no.TST5-CT-2006-031418 CHINOS...

Documents