Intermodal Freight Security and Technology Workshop

Long Beach, California

April 27-29, 2002

Technology to Enhance

Freight Transportation

Security and Productivity

*Appendix to:*

*"Freight Transportation*

*Security and Productivity"*

*Author:* Michael Wolfe

North River Consulting Group

*Prepared for:*

> Office of Freight Management and Operations
>
> Federal Highway Administration
>
> U.S. Department of Transportation

Preface

This overview of freight transportation security technology is the
appendix to "Freight Transportation Security and Productivity." The
Federal Highway Administration and the author welcome comments and
suggestions. The points of contact are below.

The paper is another in a series that provide analysis and discussion of
the trends and issues affecting freight transportation productivity in
the United States and North America. The working papers are circulated
to generate discussion about emerging freight issues and may be updated
in response to feedback from public and private sector stakeholders.

The opinions expressed in the working papers are those of the authors,
not the Federal Highway Administration.

The series of trends and issues papers is available at FHWA's web site:
http://www.ops.fhwa.dot.gov/freight/adfrmwrk/index.htm.

This working paper was prepared by Michael Wolfe of The North River
Consulting Group, a member of a Battelle Team providing research and
analysis support to the Federal Highway Administration, Office
of Freight Management and Operations. The papers were prepared under
contract DTFH61-97-C-00010, BAT-99-020.

Bruce Lambert of the Office of Freight Management and Operations is the
project manager for "Freight Transportation Security and Productivity."
He is the primary contact for comments about all of the trends and
issues papers and may be reached at 202-366-4241, email
<Bruce.Lambert@fhwa.dot.gov>.

Michael Onder of the Office of Freight Management and Operations is the
primary FHWA contact for the technology appendix. He may be reached at
202-366-2639, email Michael.Onder@fhwa.dot.gov.

Mr. Wolfe may be reached at 781-834-4169, email <noriver@att.net>.

**[Notes for readers]{.underline}:**

-   The report prints best from Word 2000; printing in Word 97 may
    garble some of the spacing.

-   If you are reading the appendix in MS Word on a computer, a
    navigable outline is available from anywhere in the paper. Click the
    "Document Map" icon on the Standard Toolbar to turn the map on or
    off. The map outline is live---click any topic and jump to it from
    anywhere in the paper.

Table of Contents

[ A-1. The Long Term Trend in Freight Identification Technology
1](#a-1.-the-long-term-trend-in-freight-identification-technology)

[ A-2. Event-Driven Tools 3](#a-2.-event-driven-tools)

[Electronic Cargo Seals 3](#electronic-cargo-seals)

[Security Sensors 7](#security-sensors)

[Wide Area Communications and Tracking
9](#wide-area-communications-and-tracking)

[Biometrics and SmartCards 12](#biometrics-and-smartcards)

[ A-3. Information Systems 14](#a-3.-information-systems)

[Assuring the Integrity of Container Loads
14](#assuring-the-integrity-of-container-loads)

[ A-4. Standards 15](#a-4.-standards)

["Standards Setting Needs for Freight Management"
16](#standards-setting-needs-for-freight-management)

*Appendix:*

Technology to Enhance Freight Transportation Security and Productivity

In the body of the paper, we reported that better visibility is the
single most recommended solution to improve both supply chain security
and productivity. The text described two means or methods to achieve
better visibility:

-   Information systems that manage, manipulate, or display visibility
    data.

-   Event-driven tools that convert physical activities and conditions
    into data entries for the software systems.

This appendix concentrates on the latter category. Those tools are
especially critical for collecting the accurate, timely, and complete
data needed to better manage both security and efficiency. Of five types
of technologies mentioned in the report, four are in the latter category
and the other is a hybrid.

This appendix puts the event-driven technology improvements in a broader
context, and then discusses each of the five areas and the crosscutting
issue of standards. Two areas that are most relevant to transportation
tracking---electronic seals and wide area monitoring---receive the most
attention. The appendix is an overview, not a comprehensive or complete
review of the technologies and vendors.

## A-1. The Long Term Trend in Freight Identification Technology[^1]

"Freight identification technologies" is another term for "event-driven
tools that convert physical activities and conditions into data
entries." The long-term trend in freight identification technology is
moving towards automatic dependent surveillance of materiel movements
and freight shipments. Automatic Dependent Surveillance (ADS) is a term
used in air and vessel traffic control for on-board equipment that
automatically determines location and other relevant information without
intervention from crew or network managers.

The critical feature of automatic dependent surveillance in regard to
freight shipments is that the identification and data recording
processes become fully automatic byproducts of the operation. The
movement or traffic management process itself triggers identification
and data collection. Condition changes stimulate reports in response to
sensor changes (door opened) or process measurements that move beyond a
threshold (temperature changes). Human beings are out of the loop.

For most of the century prior to World War II, freight shipment status
information was a rare exception that required the exchange of telegrams
or teletype messages, often with multiple railroads. In the decades
after the war, we moved to telephones and faxes to supplement what were
at best semi-automatic status reports. Long haul truck drivers, for
example, depended on pay phones to report their status to dispatchers.

The early 1990's were watershed years. Qualcomm pioneered in combining
satellite-based location data and two-way mobile digital satellite
communications. Schneider National was the first motor carrier to deploy
Qualcomm's OmniTRACS service to its entire fleet. Schneider received
automated real-time position reports on the location of its tractors,
and then integrated that data into its customer service, load planning,
driver assignment, and maintenance management systems. In 1991, the
Class I US railroads agreed to a mandatory Association of American
Railroads (AAR) standard for an Automatic Equipment Identification (AEI)
system based on radio frequency identification (RFID) tags. Today,
virtually all rail rolling stock in interchange service has two AAR
standard RFID tags affixed to it. The DoD, stung by intransit visibility
problems in the Gulf War, began deploying data-rich RFID tags on
containers, air pallets, and major pieces of equipment. They now have
the world's largest active RFID network, covering 350 nodes at ports,
terminals, and bases in 36 countries. Finally, two U.S. flag container
carriers decided to equip their fleets with "license plate" RFID tags;
although one backed away because of complications with its alliance
partners, the other followed through.

These changes represent a major turning point. All took people out of
the loop and derived status information from other activities, a trend
that is far from finished. Two ways the trend will continue to play out
are relevant to security as well as productivity: greater penetration of
freight markets, and more transparent integration of freight and
conveyance identification and status information.

The changes of the last decade cemented the shift from a situation of
"Mute Freight in Deaf Networks" to one of "Talking Freight in Listening
Networks." The latter generally reflects today's best supply chain
practices. However, as industry adds more on-board condition sensors and
monitoring systems for security and efficiency, we are crossing the
boundary to "Smart Freight in Smarter Networks."[^2]

## A-2. Event-Driven Tools

### Electronic Cargo Seals 

Electronic cargo seals are a subset of sensor technology receiving
serious attention from DOT, Customs, and others, and they receive
disproportionate attention in this appendix. Pre-September 11, many
developers and potential users of electronic seals put priority on low
cost and simple devices aimed at theft prevention. After September 11,
attention shifted to more robust seals with greater security
capabilities. Used well, these tools may help reduce congestion at
border inspection areas at the same time they increase confidence about
security.

Electronic seals must be part of a layered approach to security since
they are not sufficient on their own. It is essential to precede the
sealing process with business practices and tools that assure the
integrity of the container loading and sealing process. In addition, it
is helpful---especially for efficiency and productivity---if electronic
seals are part of a harmonized and standard international process. From
a productivity perspective, electronic seals should be viewed as part of
a management visibility and control system, not simply as a security
tool.

**Traditional Use Of Manual Seals**

Manual cargo seals are part of good security practice. There are two
major categories, indicative and barrier seals, both of which detect
tampering or entry.[^3]

Indicative seals are usually made of plastic, wire, or a combination of
both, marked with a unique serial number or identifier. The purpose is
simply to reflect whether or not the sealed entrance has been
compromised. If the seal is intact, one presumes the cargo has not been
tampered with. If the seal is compromised, one presumes the integrity of
the cargo has been compromised as well.

Barrier seals add physical protection to tamper detection and are more
difficult to defeat. It usually takes bolt cutters or special tools to
remove a barrier seal, not simple wire cutters or a sharp knife. Barrier
seals take many forms, with the simplest made of steel cable rather than
wire. The most protective barrier seals are bolt seals, which can be
similar to heavy-duty bolts with specialized single-use locking nuts and
unique identifiers.

Seals can establish a rough audit trail of responsibility for any breach
that does occur. Good practice includes inspecting the seal every time
custody of the sealed item changes\--when the next person in the chain
of custody takes responsibility for the cargo, they should inspect the
integrity of the seal before signing or initialing any release. Any
discrepancy in the seal should be noted on documentation transferred
with the change of custody.

However, manual seals offer no precise information as to where, when,
under what circumstances, or by whom the seal was broken. The best
information, assuming the chain of custody and seal inspections has been
maintained, is a time frame when and range of possible locations where
the breach may have occurred -- that is, since the last signature noting
that the seal was intact. Electronic seals can provide much richer
information.

**Types Of Electronic Seals**

Electronic seals tend to combine physical seals and RFID components.
Most of the electronics include passive or active RFID technologies.

Passive seals are short range, low cost, and disposable. They have no
inherent electric power, such as a battery. The RFID reader or
interrogator provides energy when it illuminates or scans the seal. The
passive seal uses the absorbed energy to reflect its information back to
the reader. The lack of on-board power limits the functionality. For
example, since passive seals cannot provide continuous power to measure
the condition of the seal cable, they cannot detect and record tampering
at the time of the event---they simply report whether they are intact or
not when interrogated by a reader.

Active seals are more sophisticated, have higher initial costs,
and---until prices drop significantly---demand reuse. Active seals carry
batteries and the power permits longer range and greater functionality.
To extend the previous example, they can detect tampering when it occurs
and add it to a time log of events. If equipped or interfaced with GPS,
an active seal can also log the location. Further, some seals can
provide live "mayday" tampering reports as the events happen, mostly
within specially equipped terminals.

Because of their low unit cost and operational simplicity, passive seals
were generally the preferred solution for "pre-September 11" security
requirements aimed against theft. The greater functionality of active
seals enhances their appeal for "post-September 11" security against
terrorist tampering.

Progress is being made, but several hurdles stand in the way of wide use
of electronic seals:

-   International standards. The International Standards Organization's
    (ISO) Technical Committee 104 appears to be near a decision on a
    multi-protocol standard that provides for passive and active seals.

-   Global frequencies. Although several initiatives pursue it, today
    there are no global frequencies and technical specifications (for
    power levels and duty cycles) for electronic seals or other RFID
    logistics applications. Since there appear to be valid requirements
    for both active and passive technologies, and since active and
    passive tags cannot operate at the same frequency at the same place
    and time, global use demands a coordinated set of frequencies---more
    than one.

-   Operating practices. Reusable seals pose an operational challenge
    for shippers and carriers. However, if that challenge is mastered,
    then reusable seals also offer an opportunity to lower the per-use
    cost of high security seals. Two points may mitigate the operational
    challenges. First, it appears that a significant portion of
    commercial containers operate in repetitive service that is more
    suited to recycling seals.[^4] Second, if empty container movements
    were sealed for security reasons, that should simplify the recycling
    process.

-   Field experience. Electronic seals are relatively new to the market
    and in limited use. It makes sense to conduct a vigorous pilot and
    demonstration program to accelerate the processes of accumulating
    field experience, fine-tuning products, and developing customer
    confidence---all important to support regulatory requirements for
    electronic seals.

**Examples Of Electronic Seals**

**Transcore Passive Seal Technology**. Transcore, a significant firm in
the RFID field, developed passive seal technology. They designed the
technology after informal focus groups with potential users who favored
simple, disposable and inexpensive tags---as one would expect for market
research completed before September 2001.[^5]

Transcore is not a seal manufacturer and they license their technology
to others. Two leading seal firms that are building passive products
around TransCore's technology are the Danish market leader OneSeal and
joint venture TydenTek.[^6]

Since other RFID firms also license technology to multiple firms, this
is an opportunity to point out that using identical electronics in two
seals does not guarantee identical performance. For example, the final
design and installation of the antenna in the seal shell may make a
meaningful difference in range and feasible deviation in orientation
between reader and tag.

Both TydenTek and OneSeal's passive products draw power from high-gain
antennas when they are in range of a reader. Although nominal range is
ten feet, that may require optimal conditions, which are not always
present in the field. The seals appear to be usable around metal, an
important factor. TydenTek offers the option of dual-use readers, able
to read both the seal and a rail/container AEI RFID tag.

Pricing information for all electronic seals and tags can be confusing.
Conversations and promotional materials may not specify the difference
between design cost and actual pricing, between early production and
later versions with tighter chip integration, or between difference
purchase lot volumes. TydenTek officials mentioned prices between \$7.50
and \$1.50 for their passive barrier seal. OneSeal is targeting \$1.75.

**TydenTek Active Data Seal**. TydenTek/Hi-G Tek's active seal commands
the high end of the market today. It is a cable seal with limited
barrier protection but with high protection against counterfeits, swaps
with similar seals, and electronic hacks. Among its tools are the
generation of random code numbers for seal events combined with the
fixed tag ID; data storage is 2 KB. The range is variable up to 100
feet. The battery is multi-year, sufficient for 1000 sealing cycles.
This is a single frequency tag, making it most applicable within a major
trading area.

The cost per seal is \$250 according to a senior executive in the firm.
This implies the product is aimed at high-value, high-security, closed
loop applications. Examples include the Department of Energy and some
electronics shippers. TydenTek correctly points out that the fully
reusable product can amortize the cost over time. If the tag is used
1000 times as the battery rating indicates, then the cost per use falls
below disposable passive tags. Of course, any amortization must be
adjusted for expected shrinkage, loss, and damage to seals.

**eLogicity eSeal**. The eSeal is produced by the collaboration of a
Singaporean electronics firm and E.J. Brooks, a major seal manufacturer.
The disposable bolt-type seal offers medium protection against
counterfeits and swaps, less against hacks since it records only the tag
ID. Data capacity is 128 bytes. The battery has about a thirty-day life,
which means it could expire before the end of a transpacific voyage that
experienced any delays. The tag is a continuous beacon---constantly
transmitting. Observers at other firms commented that this feature and
the lack of anti-collision capability imply that multiple tags cannot
operate in the same reader's range at the same time. eLogicitiy offers
two frequencies, 315 MHz and 433 MHz, although any tag operates on a
single frequency, which may make it most applicable within a major
trading area.

The eSeal is being demonstrated as part of the DOT-sponsored pilot of
in-bond shipments between Seattle-Tacoma and the Blaine border crossing
into Canada. The firm estimates pricing at \$17 - \$25 per unit in small
numbers, falling to near \$10 in volume.

**Savi EchoPoint SmartSeal**. SmartSeal electronics are being married
with both bolt and cable barrier seals and the electronics are available
to license by others. The seal combines random codes with a unique tag
ID giving high protection against counterfeits, swaps, and hacks. Data
storage is variable, 32 to 128 KB. The battery is rated for five years.
Range is tunable up to 300 feet. The tags have multi-frequency options,
making them more amenable to use across major trading areas. They are
also compatible with DoD's 433 MHz RFID reader infrastructure, including
those in commercial sea- and airports.

An added capability is immediate seal location and status reporting in
terminals equipped with a configuration of readers and beacons---known
in the industry as Real Time Locations Systems (RTLS). Savi reports
SmartSeal can be tuned to slot-level accuracy.

Pricing of the seals is about \$50 in small numbers; large production
runs may reduce the price by over two-thirds. The bolt seals would
require a new bolt for each application, but the cable seal should be
fully reusable. SmartSeal was announced in November 2001 and initial
sales are reported to Futaba, a Taiwanese electronics firm.

**Crown Agents Electronic Seal**. Crown Agents is a trade facilitation
firm that is collaborating with Universeal, U.K. Their Eseal is a cable
barrier seal that uses a fiber optic strand in the cable and infrared
communications, not RF, which frees it from global frequency concerns.
Range, however, appears to be short and depends on handheld readers. The
battery has a shelf life up to three years and it pulses the cable every
second for tampering when locked. Data capacity is 8 KB, sufficient to
include customs declaration and manifest information as well as security
data.

The current price appears to be \$150 for hand-built units and should
drop to \$35-50 in production. Early users are DOE and the Mexican
government for in-bond container shipments between Los Angeles/Long
Beach, southwest U.S. border crossings, and destinations in Mexico.

### Security Sensors

Shippers, carriers, and firms that support them have a history of using
sensors to monitor the condition of cargoes, to support safe and
efficient operations, and to enhance security, usually against theft.

The best example for monitoring cargo condition is the temperature of
refrigerated products. Some devices are self-contained recorders that
move with the shipment and collect an audit trail of shipment
temperatures for quality assurance and assigning liability. Other
devices detect temperature threshold violations and trigger immediate
message reports calling for field inspection or automatic restarting of
the cooling or heating unit. Hazmat shippers use analogous devices to
monitor tank pressure and vapor leakage. Automotive railcars are often
equipped with impact-measuring devices including accelerometers, GPS
receivers, and recording devices to build an audit trail of rail
terminal humping impacts. The data report impacts above contract
thresholds for quality control and assigning liability.

Sensors tuned to operating efficiency and safety are common among motor
carriers and railroads. PACCAR, for example, displayed a "truck of the
future" at an Intermodal Expo that had 57 feeds to collect operating
parameter data. While such data may be recorded on board for collection
in a terminal, the growing trend is for live delivery of the data to
dispatch centers via wide area communications---as discussed below.

Until September 2001, most interest in security sensors focused on
thwarting theft and contraband such as drugs and human smuggling.
Intrusion detection devices included mechanical, light-sensitive,
infrared motion detectors, and the development of electronic seals.
Breakwire grids can detect forcible entry through ceilings and sidewalls
as well as doors. Early offerors of trailer tracking devices included
door open/door closed sensors. Surround vehicle video systems permit
drivers to survey their entire rig without leaving the cab. There were
reports of a South African firm working on a device to monitor and repel
unauthorized intrusion with automatic and repeated releases of pepper
sprays directed towards the trailer door.[^7]

U.S. Customs has an abiding interest in Non-Intrusive Inspection (NII)
devices and technologies. They include large equipment to scan trailers,
containers, and railcars with x-rays and gamma rays, such as the Vehicle
and Cargo Inspection System (VACIS). The devices measure vehicle
densities and variances to detect hidden compartments, voids, and cargo
anomalies. There are also portable devices, some the size of pagers and
cell phones, to "detect drugs, explosives and radiological material.
These devices include particle and vapor detectors, personal radiation
detectors, and isotope identifiers."[^8] Airport security also uses
sensors that are applicable to freight, including explosive detection
scanners for baggage.

There is a sharp increase in research and innovation to improve and
deploy sensors tuned to weapons of mass destruction. Sensor technologies
were part of both the DoD and DOT Research and Special Progams
Administration's Broad Area Announcements mentioned in the main paper,
and it is fair to assume there were many sensor proposals among the over
12,600 combined responses. Customs sponsors related research too. For
example, Customs is "developing an acoustic inspection device that
ascertains the density of the fluid materials in sealed containers. That
information is compared to a database of known acoustic signatures to
provide material identification." Nanotechnologies are especially
promising to provide powerful yet inexpensive sensors with micro
electro-mechanical systems (MEMS).[^9]

### Wide Area Communications and Tracking 

Wide area communications is an ideal platform on which to marry
condition sensors, transaction confirmation tools, and geo-location
information. Dramatic improvements in components, integration, and cost
promise disruptive technologies that will change significantly today's
definition of both good business practices and good security.

Satellite-based systems are preferable to cellular for coverage
footprints and potential global applicability. Cellular-based systems
are generally less expensive and may be more suitable for some domestic
applications.

The Global Positioning System (GPS)[^10] is the most common source of
geo-location data, but other sources are available. For example,
Qualcomm's OmniTRACS can draw location data from a different satellite
configuration and SkyBitz uses proprietary location technology. Within
the U.S., the FCC's Enhanced 911 regulations require cellular system
operators to implement a capability to identify the location of most
emergency calls---a capability that will be transferable to logistics
applications.

Potential sensors and transaction confirmation tools cover a wide array,
tailorable to user needs. Examples include weapons of mass destruction
sensors, RFID transponders for precision gate arrival confirmations,
electronic seal integration, and asset management sensors such as
empty/partial/full indicators.

Electrical power is an important consideration for wide area platforms,
a consideration that grows in importance as more sensors and
capabilities are added to the communications platform. Power is rarely
an issue for conveyances that generate their own electricity, such as
tractors, ships, and aircraft. Power is a challenge for devices, such as
chassis and trailer monitors, that may be able to re-charge storage
batteries when connected to power units. However, power is most vexing
for devices with no access to external electricity, as would be the case
for any device on standard (non-reefer) cargo containers. Battery
failure troubled the Army's early experiments with RFID tags on
containers. Battery replacement in the field can be cumbersome and
expensive.

One approach to the power issue is to encourage more research into
batteries. Another approach is elegant engineering to reduce
significantly the drain on batteries. SkyBitz is an example of the
latter, cutting by a factor of 30 the power needed by GPS units.
However, elegant engineering of location determination power needs may
be insufficient if gangs of mobile sensors also draw on the same
batteries.

**Examples Of Wide Area Communications Platforms**

There are many services available; a 1998 study identified over 250 long
range positioning and navigation systems on the market.[^11]

**Qualcomm OmniTRACS**. Qualcomm dominates the market for mobile
satellite two-way data communications and tracking systems for the
transportation industry, especially trucking. Thirty-eight of the top
forty truckload carriers in the NAFTA region use the OmniTRACS system.
Qualcomm also supports maritime, fixed assets, rail, public safety, and
military applications. The unit cost for a standard installation will
hold at \$2000 per tractor at least through September 2002.

In addition to location determination and communications, the system
provides data from vehicle-mounted sensors, such as speed, fuel and
engine operations. Available security services include an emergency
notification button---essentially a pre-set macro command that sends a
digital location/"need help" message to the network center. Qualcomm
also reports they can add features such as remote locking and unlocking
of trailers; remote activating fuel/ignition cutoff switches;
geo-fencing (notice of passing set boundaries); providing out-of-route
notices; and adding live connections to cargo-related sensors and
electronic seals.

Although primarily a productivity tool, OmniTRACS is already used for
security purposes in several markets. The best known is for DoD
munitions shipments in the U.S., all of which require near-constant
monitoring with capabilities equivalent to OmniTRACS; the program is the
Defense Transportation Tracking System (DTTS). Trucking companies in
Mexico use the system primarily for security against theft, drug, and
people smuggling.

OmniTRACS is not appropriate for dry cargo containers because it
requires a robust power source. Qualcomm is re-engineering their
untethered trailer tracking device, transitioning from analog to digital
communications capability. That product is likely to be suitable for two
markets: domestic trailers, especially for hazmat loads, and container
chassis.

**SkyBitz Global Locating System**. Eagle Eye, Inc., generally known as
SkyBitz, is a small firm with proprietary technology that permits very
low power satellite location determination. They have prototype units in
the field, report excellent results and orders in hand. The units can
communicate through geostationary or low-earth orbit satellite
constellations, offering continental or global coverage. The expected
cost of a unit is \$300, plus about \$15 per month in communication
charges for location data.

SkyBitz becomes more attractive as a security and productivity platform
when other capabilities are added to location determination. For
example, the firm teamed with WhereNet, a Real Time Locations Systems
(RTLS) vendor that specializes in more precise monitoring within
instrumented terminals and warehouses. Packaging their technologies in a
single housing, they demonstrated in-terminal and cross-country
monitoring for a major container carrier.[^12]

For a more explicit security application, SkyBitz believes it is
feasible to integrate their tracker with prototype detectors for nuclear
materials, chemical and biological weapons, and human presence in
containers. Successful integration would offer global capability for
immediate alarm messages when contraband is being loaded into a
container. No information is available on the power consumption and
battery life implications of this package.

**PAR Cargo\*Mate.** PAR Logistics Management Systems developed a
monitoring system for container chassis. Supported by government
cooperative agreements and partnerships with carriers, terminal
operators, and a container lessor, PAR refined their design through
considerable field work and piloting. The Chassis Data Unit includes
GPS, cellular communications with satellite options, and a suite of
sensors. Versions are available that will run off a self-contained or
tractor-rechargeable battery.

The sensor options offer information relevant to operations and
security. They include covered/uncovered (container presence) and
hooked/unhooked. PAR offers geo-fencing and is working on both RFID
readers to identify unique (tagged) containers. Safety sensors, such as
tire pressure and tread wear, are also options.

Unit costs are about \$300 per chassis in small volumes. An industry
focus group worked with PAR to define an amortized cost target of \$.35
to \$.45 per chassis per day, including communications and operating
costs. As production volumes increase and the unit cost declines, PAR
expects to meet that range.[^13]

**TRI-MEX "Black Box."** Mitretek identified this European firm as one
of three with chassis tracking capabilities comparable to PAR's. Their
TX Series products appear available for vessel, chassis, and truck
monitoring. Customers are dangerous goods shippers and a large shipping
insurance consortium known as the TT Club. Options include three-way
communications with cellular, low earth orbit, and geostationary
satellite links that enable 24/7 monitoring and an Electronic Freight
Security System capable of notifying police precincts at the time of
tampering or theft.

TRI-MEX is especially interesting because they are a core member of team
commissioned by the European Commission (EC) to track end-to-end
shipments between Europe and the U.S. The "Safe InterModal Transport
Across the Globe" (SIMTAG) team, led by insurance managers Thomas Miller
& Co., is to begin their process by verifying the security of source
packing procedures. TRI-MEX is to adapt their products and build a
container-mounted "black box" for SIMTAG. TRI-MEX declined to provide
black box cost, schedule, or capability information because, as of
mid-April 2002, the team is still in negotiation with the EC. The EC has
invited the U.S. DOT to observe progress and results of SIMTAG.[^14]

### Biometrics and SmartCards 

Biometrics tools enable positive identification of authorized personnel
and there is great enthusiasm about their value. While research
continues to improve these tools, several appear ready for immediate
use, and it is possible to use more than one type at the same time for
added security. The biometrics catalog recommended by the FAA lists
seven categories:[^15]

-   Fingerprints

-   Hand geometry

-   Eye-retinal

-   Eye-Iris

-   Facial recognition

-   Speaker (voice)

-   Dynamic signature

Interest cuts across government security communities. There is a
Biometrics Working Group co-chaired by the FAA and the DoD Counterdrug
Technology Development Office, and it includes Customs, the FBI, and
DARPA among other agencies. The working group identified four biometrics
applications related to airports and several are transferable to freight
facilities and operations. Among the four applications are employee
identification, crowd surveillance, and crew identity verification en
route. International vessel crew identify verification also interests
the Coast Guard.[^16]

Biometrics pilot applications include freight and passenger operations.
One example is using fingerprint biometrics for airfreight truck driver
access to O'Hare, tested with good results as part of an ITS Field
Operational Test. Another example used iris recognition technology for
access to secure areas at Charlotte airport by employees of US Airways.

Biometrics is likely to be an important component of two major
initiatives. The first is the national Transportation Worker
Identification Card (TWIC) and the second is in expected regulations for
Commercial Driver Licenses (CDL).[^17]

Smart cards are a natural complement to biometrics. Small portable
memory and processing devices with near-contact data transmission
capability, they can carry an individual's biometric data. There appears
to be a solid foundation of international ISO standards for smart cards.
In addition, and more germane to issues such as the TWIC, there is a
federal government standard for smart card interoperability.[^18]

Smart cards have security and productivity uses beyond carrying
biometric information. The best example is the O'Hare pilot that
combined complete airfreight manifest data, driver authorization, and
fingerprint information on a smart card carried by truck drivers
delivering shipments to the airport. Preliminary findings showed the
smart card application produced faster, more accurate cargo manifests
and improved manifest data distribution "downstream" in the supply
chain.[^19]

## A-3. Information Systems

Event-driven data is necessary but not sufficient. Data-related
technologies operate "in the trenches" where they produce the critical
raw material of the information age: timely, accurate, and complete
source data. Those data feed the information systems that manage,
manipulate, and display freight-related information. The information
systems range from relatively straightforward to quite complex,
including sophisticated decision support tools.

Some in industry refer to the data tools as "below the line" and the
management systems as "above the line." The latter are beyond the scope
of this paper, but the following paragraphs put them in context to set
the stage for considering a hybrid case in the next section.

Freight-related visibility and management systems traditionally were the
province of transportation and logistics service providers---carriers,
warehousemen, terminal operators, and forwarders. Those operating firms,
often augmented by third party logistics providers (3PLs), still run the
core information systems.

A new class of firms appeared in the last several years, mostly offering
web-native systems and services to provide better visibility and supply
chain coordination. An expert in the field estimates there are nearly 50
private vendors in the visibility market, plus a smaller number of
publicly traded firms. Their names virtually cover the alphabet, from
Apexon, BizGenics, and ClearOrbit to Viewlocity, Vigilance, and
WorldChain. The expert, Bruce Richardson of AMR, sees two common
characteristics among these firms: "All are developing applications
designed to improve visibility of in-transit shipments, supplier
inventories, current demand, returns and/or reverse logistics, spare
parts, inventory deployed across the supply chain in distribution
centers, warehouses, retail shelves, and the like. The other common
trait is that the information is shared between two or more trading
partners."[^20]

It would be worthwhile to better understand the trends, nuances, and
distinctions within this market, but that must be the subject of another
paper. One subset or feature of information systems appears particularly
relevant to intermodal freight security. It is a hybrid, a "below the
line" capability that gathers and manages data related to loading and
documenting freight shipments.

### Assuring the Integrity of Container Loads 

It is almost commonplace in discussions about container security to
state that the first step is to assure the integrity of the loading
process and the load itself. There are references to secure facilities,
controlled access, background checks for staff, and good supply chain
practices. However, there is remarkably little attention to the supply
chain-related software that might enhance security as well as
efficiency.

The focus here is on software and processes used at warehouse and
factory loading areas and at container freight stations to plan, manage,
and document the container loading process. These tools may be able to
build audit trails of each person involved in loading, checking, and
sealing conveyances; require positive identification of authorized
people for each process and lock-out others; integrate security sensor
data; and contain logic to immediately call attention to sensor
violations. It is possible that some of these security-related features
reside in many load management and documentation applications, but if
they do neither the vendors nor the trade press called much attention to
it over the past six months.

Horizon Services Group markets two products aimed at the container
loading process. (Horizon is a CSX subsidiary that is further developing
and marketing proprietary Sea-Land software that was not transferred to
Maersk). While neither product is tuned for security applications, they
are examples of tools that are capable of such a transition. LOADcaptain
develops 3-D loading plans for containers, trailers, railcars, pallets,
and air-cargo containers. HAZcaptain checks the hazmat compatibility of
up to twenty different pieces of cargo being loaded into the same
container. Based on the IMO International Maritime Dangerous Goods Code,
HAZcaptain identifies, tracks, and calls attention to potential
conflicts.

Another product, also designed for other purposes, has been tailored to
provide security options such as audit trails and authorization
lockouts. Savi Technology added those features to its Asset Management
System (AMS), which was designed to support terminal managers of
reusable containers, such as airfreight containers and pallets. AMS can
be paired with the Supply Chain Logistics Portal to add transparency for
off-site container loading.

## A-4. Standards

The main paper offered a template for solutions that simultaneously
enhance freight system security and supply chain efficiency. One
characteristic was harmonized processes, and international standards are
crucial ingredients for harmonization.

Three domains of technology-related standards are especially
important:[^21]

-   Electronic seals, tags, and transponders. We already mentioned the
    need to address the tag technologies and the frequency regimes
    within which they operate. It would be far from optimal for either
    security or efficiency to require international carriers to use
    different tools, for example, for shipments between Asia and Europe
    than for shipments between Asia and North America.

-   Interfaces between data collection devices and information systems.
    Even with standards, there will be a wide array of devices in use to
    collect supply chain information, including bar code readers and
    passive and active RFID readers. Data must move from those readers
    to information systems. A standard interface protocol would avoid
    the cost and delay of building customized interfaces between each
    vendor's device and all systems or sets of systems. A *de facto*
    commercial standard may be developing around the Universal Data
    Appliance Protocol (UDAP), available on a no-cost license.

-   Data exchange standards. There is no complete set of international
    freight data definitions and exchange standards. Both security risk
    management systems and supply chain management systems would benefit
    from---may, indeed, be hostage to---the seamless flow of data among
    information systems. Intermodal process flow maps show at least 63
    data handoff points and most still include paper. There are two
    widely used EDI standards, but they are not fully interoperable.
    There are partially coordinated ISO and industry-based data
    standards activities, some reflecting new awareness of the need for
    security-related data elements.

The U.S. DOT drafted a working paper to outline the standards issues,
discuss strategies, and describe on-going pilot tests and demonstrations
that relate to those issues. In its current form it concentrates on the
first and third bullets, but is clearly open to comments from others,
corrections, and modifications. As a convenience to readers, the April
10, 2002 version of that paper concludes this appendix.

### "Standards Setting Needs for Freight Management" 

> *Begins on the next page*.

**Standards Setting Needs for Freight Management**

**Working Paper Prepared for the US/EU Forum in Jacksonville, Florida**

April 11-13, 2002

Prepared by: Michael P. Onder, FHWA/USDOT

The purpose of this paper is three-fold: to provide information about
standards and pilot activities related to freight security and
productivity; to stimulate discussion; and to suggest that Forum members
encourage appropriate colleagues to participate in the standards and
pilot activities. This is certainly not the last word on the subject,
but a step to improve our understanding and generate effective action.

The paper discusses the need to establish more coherent and effective
global standards to facilitate the secure and efficient movement of
freight and its associated information worldwide, between many diverse
interests that are responsible for freight along the supply chain, as
goods make their way from origin to destination. Productivity associated
with freight management is, in many instances, a hostage to the
intensity and speed at which paper flows through the process. Shipping
papers, and their associated complexities, may be as big a problem in
moving freight expeditiously as the physical hurdles in the
transportation network. Electronic Data Interchange (EDI) standards have
made a huge contribution, but more is needed to bridge inconsistent EDI
standards, to fill in gaps related to security information, and to build
universal message standards to improve productivity and to provide
consistent oversight tools for security interests in government and
industry. In addition to data-related standards, the electronic tools
used in the movement of data, such as electronic seals and transponders,
are critical to the overall security and productivity of freight
processes. To be most useful in a global environment, those tools should
operate in a standard manner at every point where data transfers occur.

**1. Current Issues**

a.  [Role of the FHWA and USDOT in freight technology operational tests
    and standards development]{.underline}

As part of the Federal Highway Administration (FHWA) reorganization in
February 1999 the Office of Freight Management and Operations (HOFM) was
created and given responsibility to focus attention on freight\'s impact
on the nation's transportation system and to find tools that could be
used to alleviate the strain on the system. This has required isolating
out freight travel data from general population travel data, and
analyzing current impacts on the system as well as those forecasted
within the next 20 years. The data analysis has included all
transportation modes including cargo movements through airports,
seaports and land border crossings. Analysis of the results has shown
that freight volumes could nearly double by 2020 and the solutions to
the expected increase in congestion are likely to involve both
infrastructure improvements and technology innovations. Included in this
will be a need for a backbone information system that will provide all
transportation entities the oversight they need to track and trace their
shipments. Bold steps between government and industry need to be taken
to realize the potential of technology to advance productivity and
security through the intermodal freight system.

USDOT's Office of Intermodalism (S-3) and HOFM have developed a working
relationship with the freight industry through the Intermodal Freight
Technology Working Group (IFTWG) under Intelligent Transportation
Society of America (ITSA). The IFTWG and USDOT have been working
together to determine where and how technology may be applied to improve
origin-to-destination freight movement. The collaboration between IFTWG
and USDOT has included mapping freight processes from
origin-to-destination, design and implementation of several operational
tests, and developing strategies for a freight architecture and freight
data exchange standards.

Events of September 11, 2001 have greatly heightened security concerns
in freight transportation. International container movement has been
particularly highlighted as a concern. The USDOT, in cooperation with US
Customs set up a Container Security Group under the new National
Infrastructure Security Committee (NISC) with subgroups, including one
on security technology. Technology innovations are expected to play a
significant role in improved container and intermodal freight security.

If technology innovations are to be a large part of the roadmap to
future productivity gains and reduced security risks in the
transportation system, then the emphasis for the backbone information
systems will be on product interoperability and on data exchange
standards. HOFM's role is being shaped to include standards development
as part of its overall responsibility, and to focus on the emphasis
areas.

b.  [Product and Data Exchange Standards]{.underline}

To facilitate the electronic movement of data requires product standards
for wireless devices, as well as standards for the "shipping paper"
messages that need to move across the freight information highway. For
the wireless products to communicate most effectively with the freight
information highway requires a universal protocol to handle data from
all types of devices.

######### Seal and Transponder Products

Currently there is one international standard for electronic products to
facilitate wireless movement of freight-specific data; that standard is
voluntary, and we know of only one container carrier that uses it
throughout its operations. (That standard, approved by the International
Organization for Standardization (ISO), is for intermodal container
transponders). Although further standards development activity is
underway, there is none other in place for freight-related radio
frequency ID (RFID) products and cellular products. There may also be
issues associated with global positioning satellite information and
latitude-longitude GIS maps.

There are draft proposals within the ISO Technical Committee (TC)
structure to create a worldwide standard for electronic seals and work
is anticipated to update the voluntary standard

for RFID transponders for containers. ISO TC 104, Freight Containers, is
working on both standards.

The electronic seal secures the hasp and rod bolts of the container
doors. If the seal has been tampered with, it will communicate such upon
interrogation by an electronic reader. The draft standard includes both
low cost, low security capability seals (using passive RF technologies)
and moderate cost, moderate security capability seals (using active RF
technologies). It is hoped the standard will facilitate growth to
accommodate higher security capability seals as technology improves and
costs come down. The standard would facilitate interoperable exchange of
information, not identical products. The seal standard has promise of
being approved as a global standard within a year or so. Before and
after approval of a standard, it makes sense to conduct diverse pilots,
using different scenarios and different products, to determine the mix
of product and operating practices that best supports security and
productivity.

The ISO container transponder is a device that is installed on both
sides of the container and, if a reader infrastructure is installed
appropriately, they could read the transponders in the port, on the
highway and on the rail system. Compatible transponders are used on a
modest fleet of domestic containers in the U.S., readable when carried
by railroads. Use in other modes is rare, although some seaport
terminals have used them for yard management purposes. There is limited
use of the container transponders outside the US.

ISO TC 104 is beginning the process of reconsidering the voluntary
container tagging standard. It is based upon the Amtech passive
technology and is not battery powered. It derives its power from the
interrogation device signal beam, and therefore does not have long-range
capability. Some industry members have requested USDOT's assistance in
developing a container transponder standard. DOT may have a role,
especially in the security arena, to help identify containers that are
off-route or being tampered with. HOFM is also conducting a
chassis-tracking test in which the chassis-tracking device is expected
to be capable of reading container transponders. This will help link the
load with the chassis on the freight information highway, and have the
chassis become the communications platform for the assets and cargo;
i.e., dray tractor, container and chassis.

Radio frequency issues are closely related to the standards issues.
Global supply chain security and efficiency are best served with
consistent global frequencies. However, there is no single frequency
available for logistics applications across the major trading theaters
(Asia, Europe, and North America). An added complexity is that two
frequencies may be needed, one for passive RFID applications and another
for active applications. Both passive and active have valid roles, but
cannot operate on the same frequency in the same place and time without
interference.

There are other activities in ISO, which may have applicability but need
to be further researched. The first is Joint Technical Committee 1
(JTC-1), Subcommittee (SC) 31, which is a primary developer of RFID
standards. Both the ISO and the International Electrotechnical
Commission (IEC) charter JTC-1. The second is ISO TC 154 (Processes,
data elements, and documents in commerce, industry, and administration),
which produced the EDIFACT standard. (EDIFACT is EDI for Administration,
Commerce, and Transport).

### 

######## Data Exchange Standards

Mapping the intermodal freight process from origin to destination, under
the umbrella of the Intermodal Freight Technology Working Group, showed
at least 63 hand-off points for freight where either paper had to change
hands or an Electronic Data Interchange (EDI) message set was exchanged.
Most of the exchanges still include paper. The EDI transactions largely
follow the American National Standards Institute (ANSI) EDI X12
standards, which are used by ocean carriers bringing goods to the US.

The two widely used EDI standards\--ANSI X12 and EDIFACT\--do not
correlate seamlessly and there are unreconciled differences. In effect,
there is no single and complete set of international freight data
exchange standards. More research needs to be done in this area.

**Strategy**: To establish near-optimal international data exchange
standards for freight and security will require both participation in
the ISO process and coordination with on-going commercial activities.

One strategy is to begin a coordinated process through ISO TC 204, the
Transportation Information and Control Systems committee that is
responsible for fleet and freight management. This strategy begins by
proposing a data dictionary for intermodal freight. Establishment of a
data dictionary standard will facilitate the desired results of standard
data exchange messages. Since there are other technical committees
working on these issues, the strategy also calls for exchanging liaisons
with other relevant technical committees and global standards
organizations. There are at least two other ISO committees with which to
exchange liaison. One is TC 8, Ships and Marine Technology and the other
is TC 104, Freight Containers. TC 204 and TC 8 have already made
proposals to work together on this issue. There still needs to be a
formal discussion between TC204 and TC104.

Activities at two other international standards organizations merit
further research and potential coordination. One is the IEC. The scope
of its TC 9, Electric Railway Equipment to prepare international
standards for the railway field, which includes rolling stock, fixed
installations and their interfaces. The second group is the Institute of
Electrical and Electronic Engineers (IEEE). One of its technical
committees, while considering emergency response for dangerous goods
incidents, developed a draft data dictionary that includes
transportation items.

There is also a significant commercial activity underway to improve
standards for supply chain operations. The EAN International[^22] and
Uniform Code Council, two non-profit standards and education
organizations that work together, are investing significant resources in
a Global Standards Management Process (GSMP). There is significant
industry participation in Europe and the U.S. as well as elsewhere.
Although shippers are the driving force behind GSMP, there are important
transportation activities and implications. A major focus is assembling
a Global Data Dictionary (GDD). It is important to learn more about this
process and establish liaison.

**Current Activity.** FHWA/USDOT drafted a preliminary work item (PWI)
for an intermodal freight data dictionary. It was approved by the US
Technical Advisory Group (TAG) to ISO TC 204 in early winter 2001 and it
will be presented to the TC 204 plenary next month. The PWI is on the
agenda for potential adoption as a formal work item at TC204\'s
semi-annual meeting in London May 13-17. Approval requires an
affirmative ballot by a majority of permanent member nations plus
agreement by five member countries to work on it. There is interest from
the US, Canada and the UK to work on it. Other members expected to sign
up are Japan, China, and Korea. It would be good to get more active EU
participation as well.

c.  [Intermodal Freight Operational Tests]{.underline}

FHWA/USDOT intermodal freight operational tests that are currently
underway will help to shed more light on best practices to be adopted,
i.e. the best ways to share information between users, and the best ways
that technology products can be used in the process. Three tests that
are expected to provide the most insights are the Air Cargo Security
test in Chicago, the Washington State electronic seal test, and the
chassis tracking and information highway test.

The Air Cargo security test includes the development of a smart card to
be used to ID the custodian of cargo as it moves from origin to
destination. The card includes a biometric identifier, an electronic
manifest and an electronic copy of a commercial driver license. The
electronic manifest has proven beneficial in the process will be very
helpful as a baseline in creating a worldwide standard for such a
manifest.

The Washington State electronic seal test will provide lessons learned
and best practices to employ for using an electronic seal to identify
the cargo as it moves through Customs checkpoints in any country.

The chassis tracking and information highway test will provide lessons
learned and best practices on gathering data from different sources and
packaging it so that it can be understood and utilized by all users in
the test.

d.  [Future Field Operational Tests (FOT's)]{.underline}

The USDOT is planning on conducting a container security test in
partnership with industry and other governmental agencies. In addition
to testing the utilization of electronic seals for secure end to end
movement of containers and cargo, the FOT would include the wireless
movement of data and electronic data exchange as a replacement for the
paper intensive process. This will probably require some ad hoc
modification to EDI standards for the purpose of the test. Another
possibility is to use the ISO\'s ad hoc standards process, referred to
as the Publicly Available Specifications (PAS) process. The PAS process
is similar to the International Standards process; however, it has fewer
steps and less stringent approval requirements. It is nominally viewed
as an interim measure, which would ultimately lead to a full standard.

2\. Future Activities

Meaningful success for improving freight security and efficiency
requires active international collaboration, especially concerning
standards. The USDOT proposes ongoing dialogue with the European Union
on this topic as part of the EU thematic network project. In addition,
we ask the EU members present to consider encouraging their colleagues
involved in ISO TC 204 to participate in the new work item. Copies of
the PWI and the European members of TC 204 are available for those who
wish them.

Work may also need to be done to coordinate with other world bodies such
as APEC and perhaps the International Maritime Organization (IMO), which
could contribute to getting the standards implemented once they are
developed. The USDOT looks forward to partnering with the EU to help get
critical standards issues through these world bodies, as well as through
the International Standards Organization (ISO).

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