So far Radio Frequency Identification (RFID) tags have been fairly typical of so much Information Technology - much hyped but slow to deliver. DHL, however, has begun to bring to market a stream of new applications and services that appear to realise some of the potential benefits of the technology.

DPWN/DHL has invested massively in RFID technology. The company has created a major R&D facility at Magdeburg in Germany which in part is focused on producing practical applications out of the science. Two recent offerings from this establishment illustrate the direction and magnitude of RFID’s potential.

At the end of December 2006 DHL announced the use of RFID tags in the monitoring of environmental conditions for pharmaceutical consignments. By ‘hooking-up’ a RFID tag to an electronic thermometer, DHL can monitor the conditions of the consignment in real-time whilst passing through its facilities. DHL is also collaborating with software companies such as SAP and IBM to create IT/IS architecture capable of exploiting this hardware giving pharmaceutical companies the ability to monitor the integrity of a product type that is crucially dependent on temperature. Although useful, this type of offering is fairly typical of RFID applications coming onto the market.

More ambitious and potentially more important is the capability that DHL has just announced for monitoring container contents. In collaboration with the neighbouring Fraunhofer Institute in Magdeburg, DHL has created a small box container, called ‘SMARTBOX’ that can interrogate passive tags on SKUs and then broadcast their status and location using GSM mobile phone technology. This means that any tampering with the items inside the container can be detected in real-time.

Crucial to the success of such a product will be price and reliability. Although using GSM technology means that the box can communicate with its DHL base station almost anywhere in the world as any mobile phone user will know, GSM reception can be patchy. Another question is cost. At present DHL seems to be concentrating on offering the service to shippers of higher value items and this suggests the price could well be high. But the economics of such a product are generous as the problem it is designed to tackle is enormous.

The security of shipping containers in particular has been a major problem for shippers for many years. Theft out of containers is substantial as they are very difficult to lock securely. This problem has been amplified hugely over the past five years by the issue of counter-terrorism. The value of creating real-time visibility for containers and their contents is vast and if DHL were able to translate this technology into market leadership in this area, it would achieve a vital competitive advantage.

Source: Transport Intelligence

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