> **Trends In The Use Of**
>
> **Intermodal Freight**
>
> **Identification Technology**

**Michael Wolfe**

![](media/image1.jpeg){width="1.6736111111111112in"
height="1.5395833333333333in"}

> \(781\) 834-4169
>
> Fax (781) 837-7681 noriver@worldnet.att.net

**Revised**

**June 14, 1998**

***Prepared For***

**The Intelligent Transportation Society of America**

***And***

**The U.S. Department of Transportation**

**Federal Highway Administration**

**ITS Joint Program Office**

# Preface 

The US Department of Transportation, with support from the Intelligent
Transportation Society of America and other organizations and agencies,
is sponsoring an *Intermodal Freight Identification Technology
Workshop*. The June 1998 workshop will bring together 125 invitees in
Reston, Virginia, to explore alternatives to better harmonize approaches
to freight identification in different industry segments.

Leaders from the public and private sectors will address
interoperability issues in intermodal freight location and
identification. The goal is to engage in a collaborative dialogue that
leads attendees to:

-   Identify and articulate potential benefits of greater harmonization
    in using freight identification technologies

-   Identify candidate projects that will help to achieve the desired
    benefits

-   Draft an action agenda to achieve these benefits

-   Identify organization(s) willing to lead and actively participate in
    the resulting agenda initiatives.

The purpose of this paper is to help establish a common perspective for
workshop participants who come from very different backgrounds. The
author has had the benefit of a continuing dialog among a core group of
professionals active in planning the workshop. Several people were
especially helpful in commenting on earlier drafts and outlines: Michael
Onder of the ITS Joint Program Office (JPO), M.J. Fiocco of the DOT
Office of Intermodalism, Gordon Fink of ITS America, and Lance
Grenzeback of Cambridge Systematics. Their contributions do not,
however, absolve the author of responsibility for errors of fact and
judgment.

The sponsors of the paper are ITS America and the ITS JPO. The author
particularly appreciates the support of the responsible project
officers, Rick Schuman at ITS America and Mike Onder at the Joint
Program Office.

Please send any comments to the author at The North River Consulting
Group, Box 67, North Marshfield, MA 02059-0067. Email address is
noriver@worldnet.att.net. Telephone (781) 834-4169 or fax at 837-7681.

*The revised version of June 14, 1998 includes only minor corrections.*

\###

# Table of Contents

Preface [ii](#preface)

I. Introduction and Summary [1](#i.-introduction-and-summary)

A. The Context for this Paper [1](#a.-the-context-for-this-paper)

B. Harmonization and Interoperability
[1](#b.-harmonization-and-interoperability)

C. An Overview of the Paper [3](#c.-an-overview-of-the-paper)

II\. The Intermodal Freight Movement Process
[6](#ii.-the-intermodal-freight-movement-process)

A. Freight Terminals and Freight Identification Events
[6](#a.-freight-terminals-and-freight-identification-events)

B. Freight Identification vs. Equipment Identification
[8](#b.-freight-identification-vs.-equipment-identification)

III\. Freight Identification Trends and Strategies
[10](#iii.-freight-identification-trends-and-strategies)

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

B. Freight Identification Strategies
[11](#b.-freight-identification-strategies)

1\. Mute Freight in Deaf Networks [11](#mute-freight-in-deaf-networks)

2\. Talking Freight in Listening Networks
[12](#talking-freight-in-listening-networks)

3\. Smart Freight in Smarter Networks
[13](#smart-freight-in-smarter-networks)

IV\. Transportation Modes and Freight Communities
[15](#iv.-transportation-modes-and-freight-communities)

A. Modal Approaches [16](#a.-modal-approaches)

B. Freight Community Approaches [18](#b.-freight-community-approaches)

V. Freight Identification Technologies
[20](#v.-freight-identification-technologies)

A. Contact Methods of Freight Identification
[20](#a.-contact-methods-of-freight-identification)

B. Non-Contact Methods of Freight Identification
[20](#b.-non-contact-methods-of-freight-identification)

1\. Barcodes [21](#barcodes)

2\. Image Recognition [21](#image-recognition)

2\. RFID [21](#rfid)

3\. Long Range Communications and Location Determination
[22](#long-range-communications-and-location-determination)

C. EDI and Internet Data Links [23](#c.-edi-and-internet-data-links)

D. Decision Support Tools [24](#d.-decision-support-tools)

VI\. Looking Forward [24](#vi.-looking-forward)

A. Implications of the Current Situation
[24](#a.-implications-of-the-current-situation)

B. Key Enablers of Coming Changes
[25](#b.-key-enablers-of-coming-changes)

1\. Auto-Networking Tags [25](#auto-networking-tags)

2\. Cheaper, Smarter Real-Time Tracking
[26](#cheaper-smarter-real-time-tracking)

3\. Miniaturization and Integration
[26](#miniaturization-and-integration)

C. Impediments to and Tools for Change
[27](#c.-impediments-to-and-tools-for-change)

D. User Requirements vs. Changes in Technology
[28](#d.-user-requirements-vs.-changes-in-technology)

Endnotes [29](#endnotes)

# 

**LIST OF FIGURES AND TABLES**

**Figure 1, An Overview Of The International Freight Transportation
System 14**

**Figure 2, Freight Nesting Relationships 16**

**Table 1, Characteristics of Freight Identification Strategies 21**

# I. Introduction and Summary

## A. The Context for this Paper

Freight identification technologies are transaction-oriented tools:
their purpose is to collect, record, or deliver data about events and
process states---to perform source data automation. Over time they have
grown from stenciled labels and paper documentation; through linear and
two-dimensional barcodes; through passive license-plate-like radio
frequency tags and more capable tags capable of holding specific
shipment data; to integrated mobile location determination and two-way
digital communication capabilities. Each capability has benefits and
value in mode- and user-specific niches. However, there is also a clear
long-term trend toward more automatic process- or event-triggered tools
that do not need human intervention.

The use of freight and related identification systems is expanding in
all modes of transportation and in many logistics applications. There is
an increasing number of applications and approaches and a limited
standards regime in place. Many people share a sense that more
harmonization of approaches would make sense, yielding economies of
scale that would drive down total system costs and produce more
logistics and transportation operating efficiencies. However, to date
this philosophical tilt towards harmonization has been matched only with
limited albeit worthwhile action in communities such as ITS. Quite
understandably, most constituencies continue to act primarily in pursuit
of their own interests, adopting unharmonized, often unique approaches.

One can argue that it remains to be demonstrated that there are concrete
business benefits to be derived from further harmonization of freight
identification systems. If a broad, shared conviction existed about the
reality and significance of such benefits, then that conviction would be
reflected in greater investments of time, energy, and money by key
leaders to broaden the scope of their freight identification efforts and
harmonize their approaches with other communities. If more business and
agency leaders were convinced that the benefits were real and
significant, harmonization challenges would be further on their way to
successful resolution.

This paper does not identify potential first and second order benefits
of greater harmonization. Its goal is to facilitate a dialog about such
benefits among groups of different experience and different backgrounds.
The paper discusses trends in freight identification technologies with
the focus on the *use* of such technologies, not their technical
details. This is a paper on the business context for and logistics
implications of developments in freight identification technologies.
Given the constraints of time and space, the main focus is on US firms
and practices, even though there is a significant international
dimension to the issues.

## B. Harmonization and Interoperability

An underlying theme of the paper is about fostering greater
harmonization among freight communities in their use of freight
identification technologies. Related terms include standardization,
compatibility, and interoperability. Exploring the relationships,
nuances, and implications of these terms is worth a separate paper and
is beyond the scope of this one. However, there are several relevant
points.

The application of freight identification technologies can be considered
on three levels: physical hardware and software, operating practices,
and business processes. Standards generally address the first level,
that of fundamental device design or performance, of data definitions,
and of software or telecommunications processes. Adherence to hardware
and software standards generally assures no more than physical
compatibility---that vendor A's reader in the lab can read vendor B's
tags if both adhere to the applicable standards. This is insufficient
for interoperability.[^1]

Interoperability is the ability of different equipment and processes to
work together seamlessly in the field. Interoperability requires
consistent operating practices and effective business process
agreements.

Operating practices cover issues such as tag and reader placement. As an
illustration, U.S. and European railroads are using compatible radio
frequency tags for car identification, but the U.S. railroads place two
tags on the sides of their cars while the European railroads place one
tag underneath their cars; these systems are not interoperable.

Business practice agreements often concern policy and financial
coordination. For example, adjacent states may use the same standards
for their electronic toll payment tags, and may also require the tags to
be mounted and read in the same manner. Unless the states have agreed to
integrate their accounting and settle payments, a truck passing from one
state to the other still would require two "identical" tags.
Interoperability would mean one tag and one account per truck.

Harmonization is about moving towards interoperability. For example, in
the face of incompatible legacy systems, harmonization could mean
agreeing to develop a "super reader" capable of interrogating otherwise
incompatible tags. Harmonization could also mean establishing a new
common standard toward which both legacy systems would migrate in the
future.

Harmonization can be addressed in small bites or big ones: for example,
among regulatory clearance bodies in an interstate highway corridor; or
among all modes of transportation concerning Customs clearance; or
across electronic toll collection, regulatory clearance, railroads,
container carriers and the DOD. Choices would reflect judgments about
strategy and tactics. Ideally, one would have a long range strategic
framework for harmonization and pursue the goal with a series of more
manageable but still cumulative projects.

There are, of course, powerful impediments to harmonization and
interoperability, and they must be addressed in harmonization strategies
and project. The impediments include:

-   Legacy problems of an installed base

-   Problems of scale and consistency

-   Radio frequency choice

-   Lack of clearly defined benefits attributed to greater
    interoperability

-   User focus on short-term requirements

-   Concerns about government intrusion and regulation

## C. An Overview of the Paper

The principal enabler for improvements in freight identification
technologies has been and continues to be the rapid changes in
information technology---the growing capability and declining prices for
computer processing power, data storage, and telecommunications. An
important source of demand for improvements is the trend towards supply
chain integration, the weaving together of business processes and
information flows of suppliers, carriers, and customers in search of
more efficiency, faster cycle times, and greater flexibility.

**The Intermodal Freight Movement Process.** Freight terminals and
intermodal exchange locations are the most critical areas for freight
identification processes. Transactions tend to happen in terminals.
Complexity and opportunities for error concentrate in terminals.

Although shippers are concerned with their freight, many carriers spend
considerable effort on and apply technology to identifying and tracking
transportation equipment. The relationship between an item of freight
and its means of conveyance is one aspect of a more complex situation.

Freight shipments are characterized by multiple nesting relationships,
especially as small shipments are consolidated into larger units,
combined on pallets, and stuffed into containers. An important challenge
for freight identification technologies and supporting databases is to
establish and maintain accurate and transparent relationships across the
layers.

**Freight Identification Trends and Strategies.** As indicated earlier,
there is a long-term trend toward more automatic process- or
event-triggered tools that do not need human intervention. This trend is
reflected in three overarching strategies, each with a freight and a
network component.

Mute Freight in Deaf Networks. This strategy is built around manual
intervention, whether to record freight item information or to adjust
operations in the freight shipment network. Although far from finished,
its decline began partway into the information technology revolution,
perhaps in the 1970s.

Talking Freight in Listening Networks. The dominant feature of this
strategy is the use of license-plate-like technologies that can be
identified or read automatically---license plates that can "talk" to
their readers. Their unique identification numbers are the keys to
cross-referencing detailed shipment data in shipper, carrier, customer,
or regulator databases. Network nodes are equipped with readers or
interrogators that can capture transaction data or "listen" with little
or no human intervention. This strategy is the state-of-the-art of good
logistics practice today.

Smart Freight in Smarter Networks. Smart freight means smart data and
communications tags on moderate to high value shipments. The tags would
include the ability to carry shipment-specific detail data, some
processing power or decision capacity, and probably real-time location
determination capability. Smarter networks would build upon improving
decision support tools and add tighter, more transparent integration of
source data, models, analytic tools, and user interfaces. A key feature
of this strategy is the distribution of intelligence around the network,
including with items of freight. Realization of this strategy depends on
further advances that improve the capabilities and reduce the costs of
information technology.

**Transportation Modes and Freight Communities.** Developments in
freight identification technology are best addressed from two
perspectives:

Transportation modes.

Railroads. The only mode with a mandatory standard for automatic
equipment identification, major American railroads and their customers
have not realized all of the potential benefits of their system. The
principal limitations appear related to installation strategies for tag
readers and integration of data flows by some railroads.

Intermodal Container Carriers. Although there is a voluntary
international standard for container identification tags, only one
carrier implemented it on all of their containers. Another carrier is
placing tags on container chassis. A third is looking forward to
inexpensive Global Positioning System-based tags. Barring a major
surprise, the existing standard seems likely to remain of little
importance.

Air Freight and Small Package Express Carriers. Both groups depend
heavily on their own unique systems. The small package carriers do an
excellent job tracking package movement.

Motor Carriers. This is the most complex mode in terms of freight
identification and related technologies. Large long-haul truckload
carriers usually have superb fleet management capabilities drawing upon
integrated real-time location tracking and two-way mobile digital
communications. Less-than-truckload carriers, draymen, and pickup and
delivery services have different profiles.

Freight Communities

Shippers and Hubs. Shippers are the entry point through which
transportation carriers become involved in supply chain integration. The
demand for highly reliable time-certain transportation and distribution
services helps drive shippers' attention to freight identification
technologies.

Hazardous Materials Movements. Effective emergency response to hazmat
accidents and incidents depends on fast access to detailed knowledge
about the specific materiel involved in the incident. The best approach
at this time does not depend on sophisticated freight identification
technologies such as radio frequency tags.

Strategic Mobility and National Defense. DOD requires excellent access
to detailed logistics information most of all when its forces operate in
austere, chaotic, or potentially hostile environments. This translates
into the use of high capacity radio frequency data tags that can carry
up to 128 KB of shipment details. DOD is conducting parallel tests of
these non-standard tags in different functional settings, and it is
playing an important role in adapting related equipment identification
standards.

Regulatory Facilitation and Customs Clearance. This is the Commercial
Vehicle Operations segment of Intelligent Transportation Systems.
Elements include electronic clearance of trucks, exchange of safety and
fuel tax information, and relate closely to electronic toll payment.
Most successful harmonization efforts are focused on major Interstate
corridors, but a broader approach is nearing fruition to develop a
national standard for Dedicated Short Range Communications.

**Freight Identification Technologies.** Most of the discussion
concentrates on two non-contact technologies that show the most growth:
radio frequency tags (RFID) and long range communications and location
determination. Two highlights are:

Dedicated Short Range Communications (DSRC). These vehicle-to-wayside
technologies are commonly thought of in connection with ITS Commercial
Vehicle Operations, where the DSRC standards activity is focused. There
are two larger compatibility issues. The first, expansion to incorporate
the developing European and Japanese DSRC standard, is on the agenda for
the U.S. standards effort. The second, inclusion of the international
container and related standards, is not on the agenda.

Long Range Communications and Location Determination. There are about
400 positioning and navigation systems on the market and more on the
way. Telecommunications forecasters expect the penetration of these
tools in the U.S. long-haul truck market to grow from 15% this year to
40% in 2005. This forecast may understate the total growth because it
does not consider a new market for untethered trailers and containers.

**Looking Forward.** The current array of modal and freight community
approaches to freight identification technologies is high on variety and
low on harmonization and interoperability. Although progress towards
harmonization is possible, the fundamental diversity is likely to
persist for some time---diversity in tags, in information systems, and
in telecommunications.

Movement towards "smart freight in smarter networks" will tend to
encourage harmonization by reducing some of the technical barriers to
interoperability. However, even if "smart freight in smart networks"
transforms the definition of good practice, it will not eliminate the
diversity in freight identification approaches. People who support
harmonization and interoperability are assured of a long-term challenge.

Key Enablers of Coming Changes. Three developments or trends are most
likely to change the definition of good logistics practice. The first is
auto-networking tags, which would automatically handle some of the
freight nesting relationships, such as adding or removing a pallet from
a container. The second is the development of cheaper, smarter real-time
tracking tools, which would permit widespread tracking of untethered
trailers and containers. The third is the overall trend towards
miniaturization and functional integration, which promises more capable,
less expensive embedded microprocessors---which are key to implementing
a strategy of "smart freight in smarter networks."

Impediments to and Tools for Change. The June 1998 *Freight
Identification Technology Workshop* is one opportunity to overcome the
impediments to greater harmonization and interoperability of freight
identification. Some of the approaches most relevant to that forum and
beyond are:

-   Clarify user requirements and how they may change

-   Articulate potential benefits of harmonization

-   Accumulate lessons learned and success stories

-   Identify projects and activities to focus energy

-   Establish ways to follow-up and maintain communication

# II. The Intermodal Freight Movement Process

Most freight shipments are intermodal. Virtually all air, waterborne,
and non-bulk rail shipments involve more than one mode of
transportation. Motor carrier movements are apt to be part of almost all
intermodal movements, although motor carrier movements are also the most
likely to be uni-modal. Long-haul highway shipments in particular are
becoming noticeably more intermodal as trucking companies have shifted
line haul movement legs to railroad trailer- or container-on-flat-car
movements.[^2] This section of the paper relates the intermodal freight
movement process to freight identification "events."

## A. Freight Terminals and Freight Identification Events

From a freight identification perspective, the most important segment of
most transportation movements is in the terminals. Critical transactions
are concentrated in terminals, including mode shifts for intermodal
movements and changes in the relationship between a freight shipment and
its means of conveyance. (For example, in a less-than-truckload (LTL)
terminal, shipments arrive in one truck, get sorted, and leave in
another truck.) Although many documentation and identification errors
begin at the shipment origin, terminals are the focus of operational
complexity and they are the place where most problems occur.

"Terminals" covers a wide range of facilities and activities in every
mode of transportation. Figure 1, taken from an excellent overview of
intermodal freight transportation in relation to intelligent
transportation systems, summarizes the kinds of intermodal connections
and terminal operations that characterize international freight
shipments.[^3] By extension, Figure 1 can be used also to describe
domestic freight shipments.

Figure 1 encompasses virtually every opportunity for and requirement to
apply freight identification technologies:

-   *Every arrowhead* in Figure 1 represents the arrival or departure of
    a shipment at an origin, destination, terminal, or junction such as
    a border crossing

-   *Every box* represents at least one internal process transactions
    that must be recorded---such as the creation of a shipment or the
    tracking of a small shipment through a container consolidation
    station

-   *Almost every connecting line* represents a linehaul ripe for
    position reports about moving transportation equipment---trucks,
    railcars, planes, ships---and, by deduction, their associated
    freight shipments.

![](media/image2.wmf)

All of these movements and transactions call for some degree of
visibility and management control. Transportation carriers are concerned
about the identification and location of their equipment and the logical
connections to customer shipments. Consignors and consignees are
concerned about the status of their materiel. The timeliness of
visibility information and the degree of management control vary with
the value of the freight, the mode of transportation, and the logistics
strategy of the customer. However, in almost all cases, technology of
some sort is applied to detect, record, or report events such as:

-   Key transactions that affect control of or responsibility for a
    shipment---for example, consolidate, load, unload, arrive, depart

-   Changes in condition that affect the integrity of the
    shipment---breaking a seal, opening a door, spiking temperature

-   Regulatory compliance---truck or container weight

-   Activity levels or status at key terminals---congestion reports

-   Actual equipment or shipment location---referenced to passing a
    milepost or on a continuous, near real-time basis

## B. Freight Identification vs. Equipment Identification

Each automated process mentioned in the preceding section identifies and
reports on the status of transportation equipment, whether railcars,
tractors, or aircraft. The traditional and logical focus of
transportation operators is on managing their own assets and
operations---focusing on trailers, containers, and railcars; and on
tractors, locomotives, aircraft, and ships. The carriers maintain a data
file with the current assignments of their equipment to customer loads,
and they highlight important shipment characteristics, such as hazardous
materials. However, the full detail on the freight itself customarily
resides with the consignors or consignees, not the carriers. The
difference is reflected in terminology, as some carriers speak of
Automatic Equipment Identification (AEI) while some shippers address
Intransit Visibility (ITV).

The relationship between transportation equipment and freight is the
first in an often complex set of relationships. Freight transportation
involves multiple nestings of materiel packages, best pictured as a set
of hollow Russian dolls, each stored inside a slightly larger version of
itself. Figure 2 illustrates a five-deep set of relationships, one of
many possible freight nesting scenarios.[^4] Relatively small piece
parts are being shipped together to a consignee. Several small shipments
are combined in a box or multi-pack. Multiple boxes are combined on a
pallet. Multiple pallets are stuffed in a container and a tractor hauls
the container. Several methods are available to identify each level of
item or consolidation, from plain text labels through simple barcodes to
more sophisticated media. In any effective and economical process, each
level and each identification serves a useful purpose.

It is important to establish correct nesting relationships as materiel
is prepared for shipment, and then to maintain correct relationships as
changes occur in the life cycle of a shipment. At a minimum, failure to
keep the relationships in order will disrupt intransit shipment
visibility and, at a maximum, result in lost or astray freight.

Building and maintaining correct database relationships between nested
items is necessary but insufficient for an effective freight
identification and status reporting process. Users and their systems
also must be able to move easily and transparently across nesting levels
and changing relationships to retrieve information as they need it. The
need for good access to the information demands effective communication
channels for detailed data and transaction confirmations, plus
well-integrated application systems and query tools.

Freight identification technologies are rarely of value in and of
themselves. Their worth is enhanced or diminished by the total
information system and business process of which they are a part. Hence,
unless one is concerned only with engineering issues, trends in freight
identification technologies must be considered in relation to broader
logistics process trends.

Figure 2

**Freight Nesting Relationships**

**Illustrating Multi-Level Freight Identification Options**

![](media/image1.wmf)

# III. Freight Identification Trends and Strategies

## A. The Long Term Trend in Freight Identification Technology

Two revolutions swept through the movement of freight in the last forty
years: the introduction of standardized intermodal containers and the
application of information technology. Those revolutions brought
dramatic changes in business practices, reductions in transit times,
lower real costs of transportation, and they contributed to the
explosion of world trade and prosperity. Although containerization is
relatively mature, information technology seems to be changing at an
accelerating rate as service alternatives multiply and the real
price/performance ratios continue to drop for computing power, data
storage, and telecommunications.

Both revolutions raised the importance of and increased the spending on
information about freight shipments, including information about their
identity, location, condition, and status. With some irony, hard-won
improvements in the information flows have often been accompanied by
great frustration as expectations move ahead more quickly than the
improvements. However, expectations notwithstanding, there is still much
to be improved in the timeliness, accuracy, completeness, and
integration of freight data.

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. ADS is a necessary kernel
for the possible development of "free flight" air traffic control, where
most flow control functionality would be distributed to individual
aircraft. Today's over-land air traffic control systems are still
somewhat short of ADS since ground-based connectivity is essential: the
air traffic control system records digital data taken from radar
readings and on-board radar transponder signals that uniquely identify
individual aircraft.[^5]

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 managing the operation.
The movement or traffic management process provides an inherent trigger
for identification data collection. Human beings are out of the loop. A
secondary, more distant feature of automatic dependent surveillance for
freight would be that a tag on or with the freight shipment would manage
the identification and reporting process on its own.

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.[^6] Long haul truck drivers, for
example, depended on pay phones to report their status to dispatchers.

The early 1990s were watershed years. Aviation implemented automated
tracking systems as described above, although the focus remains on
traffic management of the aircraft themselves, not their passengers or
cargo.[^7] For surface movements, Qualcomm pioneered in combining Global
Positioning System (GPS) 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,
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,
nearly 98% of rail equipment in interchange service has two AAR standard
RFID tags affixed to it.[^8]

These changes in aviation, trucking, and railroading represent a major
turning point. All took people out of the loop and derived status
information from other activities. This trend is far from finished.
There are at least three ways the trend towards automatic dependent
surveillance will continue to play out: greater penetration of freight
markets (especially motor carriers); tighter and more transparent
integration of freight or lading information with transportation
equipment information (especially railroads and air freight); and the
development of new capabilities and services---akin to free
flight---through information technology.

## B. Freight Identification Strategies

It is useful to think of three business process strategies or models or
architectures connected with freight identification. The first is on its
way to being history; the second represents today's best practices; and
the third holds promise for the near future. Each model draws on the
metaphor of human communication. After all have been discussed, Table 1
compares their characteristics.

### 1. Mute Freight in Deaf Networks

This is the traditional model, used prior to adoption of automated
identification techniques. Freight items might be identified with
stenciled shipment information, attached packets of paper documentation
or punch cards. Freight is mute, requiring a person to capture
information from it, usually by writing it down or pulling off a piece
of paper or a card. Networks are deaf, depending on manual or
semi-automatic data input. Deaf networks operate largely according to
pre-determined rules, and they require significant manual intervention
to adjust schedules or flows.

This model or strategy was the state of art before and through the early
stages of the information technology revolution. It persists in
surprising ways. For example, in the port of Charleston, containers are
managed effectively with chalk marks on each container showing its
voyage number and whether it is empty, light, or heavy (E, L, or H).[^9]

### 2. Talking Freight in Listening Networks

**Talking Freight.** The dominant feature of this strategy is the use of
shipment identification technologies that can be identified or read
automatically---think of them as variations of license plates that can
talk to readers. ("License plate" is used simply to convey the
one-of-a-kind nature of the freight identification technology, not any
aspect of government regulation). A unique identification number is
associated with each shipment and each conveyance and moves with it. The
license plate identifiers are the keys to building and maintaining
nesting relationships about shipments in distributed databases that
belong to the shippers, carriers, and regulatory agencies, such as
Customs.

"Talking" license plate technologies come in a range of
sophistication.[^10] The oldest and simplest are printed linear barcodes
followed by their more robust two-dimensional descendants. When
implemented well---starting, for example, with good quality
printers---barcodes are part of an effective and relatively inexpensive
system. They are the keys to what some call a barcode-and-database
strategy that will continue to be used in appropriate high quality
logistics systems even after more sophisticated tools become
cost-effective.

Intermediate license plate technologies include simple read-only
reflective RFID tags, such as those used by the railroads. These tags
are unique, permanent freight car identifiers, and all relationships to
specific shipments are established and maintained in remote databases.
When implemented correctly, reflective or passive RFID systems are
highly reliable. They can be thought of as simple talkative tags.

Data-rich read/write RFID tags are more sophisticated. These tags carry
unique identifiers and allow users to write data about details of
individual shipments. However, in transportation operations, these tags
are used primarily in license plate applications roughly comparable to
read-only tags.[^11]

The most sophisticated license-plate-like technologies in use today are
seldom thought of as such: the real-time location determination systems
used mostly in trucking. These systems contain or pass along unique unit
or tractor identifiers to permit network management systems to recognize
them and associate their location and status information with the proper
shipments, etc. At a minimum, transmissions from these systems include
time and location information in addition to the license plate
identifier.

Barcodes, image recognition, and RFID tags generally communicate over
short distances to a fixed-site signpost reader. Users and networks know
only where and when a bar-coded or tagged shipment was read; they are
limited to inferences about status changes after the last report. On the
other hand, real-time location determination systems use mobile long
range communications to provide nearly continuous status updates and
higher degrees of confidence.

A note of caution: applying freight identification technologies adds new
risks to the shipment process. As a simple example, while barcode
systems can be very effective, illegible or damaged barcode labels will
disrupt shipment processing. For a more complex example, consider the
use of relatively sophisticated RFID tags on shipments. Automated
systems really track automated media, not the freight or conveyance
itself. As a result, the potential for error multiplies since automated
media may fall off a shipment, be attached to the wrong shipment, not be
updated when the shipment status changes, or be disrupted by battery
failure.[^12] In any of these circumstances a shipment could be handled
correctly while control systems reflect incorrect status information. In
order to manage the added risk of error, application of sophisticated
freight identification technologies increases the need for effective
system design and strict system discipline

**Listening Networks.** The minimum common denominator for the networks
within which license-plate-like technologies operate best is that the
networks can listen or read: they can automatically capture transaction
data with little or no human intervention. (Handheld barcode and RFID
readers are automated devices that still require some human action).

Another common feature of listening networks is that intelligence
resides in the network management system and with the people who operate
it. Intelligence does not travel with the unit of freight. Warehousemen,
dispatchers and operations centers often can use the automatically
collected status information to assess some or all of their operation
and initiate corrective action when necessary. In its most advanced
form, significant decision aids are built into the network control
systems to use the license-plate-related information in powerful ways.
One example is the operating efficiencies achieved by truckload carriers
such as Schneider National when they integrate their license-plate-like
location status information with other data and models.

### 3. Smart Freight in Smarter Networks

Looking ahead, one can anticipate significant changes in the nature of
freight identification technologies and important complementary
extensions to current trends in freight networks. This section sketches
these changes. Section VI outlines the key technology developments that
are likely to be the catalysts for broader adoption of smart freight and
smarter networks.

**Smart Freight.** Smart freight means smart tags attached to or built
into the freight. The tags will combine at least four elements: a
license-plate-like identifier, read/write storage capacity for
shipment-specific data, portable processing power or decision capacity,
and communications capability. A fifth element will probably be
real-time location determination for the freight or conveyance. The
license-plate-like capability would continue to be used in a default
mode as described above for today's talking freight applications. The
read/write data storage would both enable value-added activities in the
field and provide some of the grist for on-board decision support
activities. The portable processing capability would establish the
potential for the tag to initiate specific actions when status changes
trigger programmed thresholds.

These capabilities exist today, although their high cost and package
size limits them to specialized applications. One example is the Army's
combination of battery or variable-powered deployable boxes with
laptops, GPS receivers and Inmarsat transceivers, with and without RFID
tag interrogators, for tracking high priority shipments.[^13] Perhaps
the best

+-----------------+-----------------+-----------------+-----------------+
| Table 1         |                 |                 |                 |
|                 |                 |                 |                 |
| **              |                 |                 |                 |
| Characteristics |                 |                 |                 |
| of Freight      |                 |                 |                 |
| Identification  |                 |                 |                 |
| Strategies\***  |                 |                 |                 |
+-----------------+-----------------+-----------------+-----------------+
|                 | **"Mute         | **"Talking      | **"Smart        |
|                 | Freight, Deaf   | Freight,        | Freight,        |
|                 | Networks"**     | Listening       | Smarter         |
|                 |                 | Networks"**     | Networks"**     |
+-----------------+-----------------+-----------------+-----------------+
| **Freight       | -   Stencils    | -   Barcodes    | -   Barcodes on |
| Items**         |                 |                 |     low value   |
|                 | -   Paper       | -   RFID        |     goods       |
|                 |                 |     "license    |                 |
|                 | -   Punch cards |     plate" tags | -   Intelligent |
|                 |                 |                 |                 |
|                 |                 |                 | microprocessors |
|                 |                 |                 |     on higher   |
|                 |                 |                 |     value goods |
|                 |                 |                 |                 |
|                 |                 |                 | -               |
|                 |                 |                 | Auto-networking |
|                 |                 |                 |     tags        |
+-----------------+-----------------+-----------------+-----------------+
| **Trailers,     | -   Paper       | -   Barcodes    | -   Untethered  |
| Containers**    |                 |                 |     location    |
|                 |                 | -   RFID tags   |     monitors    |
|                 |                 |                 |                 |
|                 |                 | > \--AEI        | -               |
|                 |                 | > "license      | Auto-networking |
|                 |                 | > plates"       |     tags        |
|                 |                 | >               |                 |
|                 |                 | > \--content    | -   Intelligent |
|                 |                 | > data          |                 |
|                 |                 |                 | Microprocessors |
+-----------------+-----------------+-----------------+-----------------+
| **Power Units   | -   Paper       | -   AEI RFID    | -   AEI RFID    |
| (Tractors,      |                 |                 |                 |
| Trains)**       |                 | -   DSRC        | -   DSRC        |
|                 |                 |                 |                 |
|                 |                 | -   GPS + Fleet | -   GPS + Fleet |
|                 |                 |     Mgmt.       |     Mgmt.       |
|                 |                 |                 |                 |
|                 |                 |                 | -   On-board    |
|                 |                 |                 |                 |
|                 |                 |                 |    intelligence |
+-----------------+-----------------+-----------------+-----------------+
| **Networks**    | -   Manual and  | -   Automatic   | -   Automatic   |
|                 |                 |     data        |     data        |
|                 |  semi-automatic |     capture and |     capture and |
|                 |     data entry  |     entry       |     entry       |
|                 |                 |                 |                 |
|                 | -   Pre-set     | -               | -   Sentinels   |
|                 |     rules       |    Intelligence |     and agents  |
|                 |                 |     resides on  |     collect     |
|                 | -   Limited     |     the         |     status      |
|                 |                 |     network, at |     data,       |
|                 |    flexibility, |     its hubs    |     adjust      |
|                 |     slower to   |                 |     operation   |
|                 |     respond     |                 |                 |
|                 |                 |                 | -   Richer,     |
|                 |                 |                 |     more        |
|                 |                 |                 |     distributed |
|                 |                 |                 |     decision    |
|                 |                 |                 |     support     |
+-----------------+-----------------+-----------------+-----------------+

\*Each cell suggests possible combinations of items or technologies.

indication of what lies ahead is a new offering by HighwayMaster, the
number two provider of GPS-based fleet management systems. Their
"Rolling ETA" capability resides on the truck, and it seems fair to
assert that other kinds of automated on-board or "on-freight" analysis
will develop in the future.

> "With the Rolling ETA software option, the Series 5000\'s onboard
> microprocessor automatically monitors a truck\'s progress along the
> route you specify. Using the truck\'s reported speed and cost-free GPS
> satellite location reports, the system continually calculates the
> truck\'s estimated time of arrival. If a truck is running behind, the
> system immediately delivers an alert to the dispatcher so he can begin
> addressing the problem right away. If the dispatcher does not receive
> an alert, he can rest assured that his trucks are running on time. As
> a result, dispatchers can focus their time on late trucks, so they can
> manage more trucks and loads. . . . Rolling ETA helps contain
> communication costs because . . . . you only incur a charge when an
> alert is transmitted."[^14]

**Smarter Networks.** We have already discussed some contemporary
developments in adding intelligence and decision aids to freight network
management systems. This trend seems likely to accelerate. Smart
networks would take as a given the capability to gather and maintain
automated status information. They would also include much tighter and
more transparent integration of data sources, models, decision support
tools, and users. The Defense Advanced Research Projects Agency (DARPA),
in its Advanced Logistics Program, is emphasizing new capabilities such
as intelligent agents and sentinels which would add to the richness and
flexibility of logistics network management capabilities.[^15] Looked at
in terms of its analytic tools, logistics *is* rocket science and will
become even more so.

# IV. Transportation Modes and Freight Communities

Freight identification technologies are applied and standards developed
in modal and business community contexts. Having a sense of the
different contexts is necessary for any meaningful dialog about
harmonizing different approaches. This section of the paper outlines the
modal and business contexts.

"Freight community" is a useful term to describe the business
context---the combination of shippers, carriers, third parties, and
government agencies that are concerned with different slices or aspects
of freight transportation. One organization could be part of multiple
communities depending on the issue at hand. The existence of a freight
community is reflected, among other things, in its distinctive approach
to and use of freight identification technologies and systems.

The challenge of harmonizing or increasing the interoperability of
freight identification technologies is really a challenge of bridging
freight communities. Given that effective harmonization is usually
consensual, one must identify and articulate the benefits to specific
communities of moving beyond their own near-term concerns.

There are distinctive approaches to equipment and freight identification
in different modes of transportation, approaches that cut across the
freight communities. It is worthwhile to scan the approaches from both
modal and freight community perspectives.

## A. Modal Approaches

**Railroads.** The railroads are the only mode with a mandatory standard
for automatic equipment identification (AEI). A pair of passive radio
frequency license plate tags, originally designed by Amtech, is fixed
permanently to the sides of every railcar in interchange service. Fixed
wayside readers provide interrogation, collecting data that could
provide all railroads with excellent shared location information.
Individual railroads maintain the database relationships between their
rolling stock and their customers' freight shipments. The AAR standard
addresses the placement of the tags, but not the readers.

The value of this system has not been fully realized. Most railroads
chose to install wayside readers at the entry and exit points of their
terminals, and they achieve good results. However, at least one major
U.S. railroad chose for financial reasons to curtail installation of
wayside readers, thus undercutting its and its successor's ability to
capture accurate train consist information and manage train operations.
At least one other major railroad chose to install its readers on the
mainline, roughly fifty miles from its terminals, then use the data from
approaching trains to print a manual arrival checklist; that railroad
has had disappointing results from its AEI system.[^16]

Some railroads use separate satellite-based systems to gather and
maintain near-real-time data on the locations of their locomotives and
hence their trains. It is not clear that any railroad has yet mastered
the linkage between train location data, car location data, and train
interconnection schedules to produce good forecasts of the ability to
meet freight customer schedules and commitments.

**Intermodal Container Carriers.** There is an International Standards
Organization standard for freight container AEI tags, and the standard
is technically compatible with the AAR railroad standard. However, the
ISO standard is voluntary and little used. To the author's knowledge,
only two container carriers have chosen to adopt the technology for all
of their containers, and one of the two has retrenched. Other carriers
have judged the payback for the system to be insufficient.

American Presidents Line was the leader in adopting the ISO standard
tags but, midway through its implementation, APL entered its global
alliance with non-US flag carriers who did not agree to invest in RFID.
Since a mixed fleet of tagged and untagged containers would be unwieldy,
APL is now in the process of tagging its container chassis fleet rather
than its containers.

Matson followed APL in deciding to implement the standard tags, followed
through on their implementation, and are reported to be very pleased
with the results. Matson, as a domestic Jones Act ocean carrier,
essentially runs a closed-loop system, and that enabled them to avoid
the problems that forestalled APL's original program.

Most container carriers appear to use a mix of equipment identification
processes depending to some extent on whether they are operating out of
a terminal that they control or one shared by multiple non-allied
carriers. At least one major carrier is looking ahead to less expensive
GPS capabilities as a means to achieve AEI. An independent terminal
operator in the northeast put together a digital image recognition
system to manage gate access and internal controls. Barring a major
surprise, it seems fair to conclude that the existing ISO standard will
remain little used and of marginal importance.[^17]

**Air Freight.** While there is a sophisticated air traffic control
system in place for automated identification and tracking the movement
of aircraft, there is a much more decentralized approach to freight
identification. There is a voluntary standard---an International Air
Transport Association Recommended Practice, which is compatible with the
AAR and ISO standards. Although Japan Air Lines uses the standard, most
of the air carriers do not. Similar to most of the ocean container
carriers, individual air carriers design and manage their own freight
management practices.

**Small Package Express.** Express carriers such as FedEx, UPS, and
Emery have package identification and control processes that are
sophisticated yet unique. Each carrier's system is a self-contained
closed loop. Using their own barcode labels and systems, the carriers
track every transaction from package receipt to delivery. (United Parcel
Service, for example, has adopted a circular two-dimensional barcode.)
Customers can access Internet sites to check individual package status.
In contrast to their rich data on movement transactions, the express
carriers generally do not maintain cross-reference information to the
customer's database identification of a normal package. It is up to the
sender or receiver to maintain information on the nature or contents of
the package, and to maintain the relationship between that information
and the carrier's waybill or package number.

**Motor Carriers.** This is the most complex mode in terms of freight
identification technologies, automated equipment identification,
tagging, and tracking. Related yet different technology approaches apply
to different functions, and different segments in the motor carrier
industry have different interests and needs.

Long-haul truckload operators have arguably the best fleet management
capabilities of any surface mode, built largely around integrated
real-time location determination, communications, and software services
from firms such as Qualcomm and HighwayMaster. The American Trucking
Association has a voluntary standard for automatic equipment
identification, consistent with the AAR and ISO container AEI standards,
yet rarely used for trailer identification. States and other
jurisdictions require different and incompatible RFID tag systems are
used for regulatory clearance, border crossing facilitation, and
electronic toll payment.

LTL truckers have less interest in the real-time location tracking since
most of their line-haul runs are scheduled terminal-to-terminal trips.
However, the larger LTL carriers often use sophisticated identification
and automation tools for terminal freight sortation and cross-dock
management.

Dray operators generally make the least use of advanced technologies.
This is a segment characterized by large numbers of firms, small fleets,
and very tight finances. Some pickup and delivery services, however, may
use sophisticated vehicle location tracking and route optimization
systems.

## B. Freight Community Approaches

**Shippers and Hubs.** Shippers in general are the most diffuse freight
community. However, they are becoming more tightly coupled with their
carriers, third party service providers, and customers in ways closely
related to freight identification technologies. There is a macro
logistics trend towards supply chain integration that carries with it
initiatives such as Vendor Managed Inventory (VMI) and Make To Order
(MTO) manufacturing, all of which increase the demand for highly
reliable time-certain transportation and distribution services.
Automated freight status information feeding powerful analytic tools is
necessary to maintain the levels of service and economy. One result
seems to be an ironic combination of skepticism and openness towards new
automated tools and technologies: caution about the payoff of expensive
new capabilities matched with a tremendous zeal to implement new
technologies once the decision is made that they can pay off.

**Hazardous Materials Movements.** Many freight movements involve
commodities with the potential to cause grave harm in accidents or
incidents. Two themes stand out: accident/incident prevention and
effective response when incidents do occur. Freight community
members---or constituencies---include federal and state regulators, a
wide array of emergency response organizations, the carriers (especially
railroad and truck), and the shippers of hazardous materials.

Fast access to detailed knowledge about the specific materials involved
in a spill is critical to effective response. While there has been
discussion about the application of automated freight identification
technologies, such as RFID tags, to facilitate such access, the
practical problems are daunting. Given the unplanned and widely
distributed occurrence of incidents, these problems include how to
distribute and maintain interrogators and how to train and maintain the
skills of very occasional users in emergency response organizations.

The preferred approach seems to combine uniform placarding and labeling
of hazmat shipments with rapid remote access to detailed shipment and
countermeasure information. A report on *Operation Respond* describes
several systems or services that facilitate direct access for emergency
response dispatchers to remote databases that contain critical shipment
data. The first responder to the scene of an incident gets the trailer
or railcar identification data and calls that in to his or her 911
dispatcher, who contacts the carrier or a central data repository.[^18]
This "placard plus communication" approach does not seem to impose a
high need for harmonization with other freight identification
approaches.

**Strategic Mobility and National Defense.** The Department of Defense
and its business partners share in a requirement to deploy and sustain
military forces at great distances. Speed, efficiency, and dependable
access to accurate shipment information are critical to effective
logistics support. Because of this, DOD is a strong proponent of
automated identification technologies for freight and other
applications.

DOD logistics must be successful in two extreme environments: the
sophisticated commercial transportation and communications
infrastructure characteristic of the U.S., Western Europe, and parts of
Asia and the Middle East; and an austere, chaotic, and potentially
hostile deployed area of operations. The first environment presents an
opportunity to draw high quality data from a carrier's systems; the
second environment imposes unique demands for flexibility and
redundancy. For freight identification, the demands of an austere
environment result in the use of high-end read/write RFID tags capable
of serving as portable electronic consists for containers and pallets of
freight. The non-standard tags hold up to 128 KB of information on a
shipment. DOD is testing these tags for munitions exports, palletized
air freight, containerized resupply, and military unit movements

Within the continental U.S., DOD adds an additional level of safety and
security to its munitions movements. Commercial munitions motor carriers
receive a mileage-based payment to equip their vehicles with Qualcomm's
OmniTracs GPS and digital satellite communications. A DOD hub in
Norfolk, VA operates the Defense Transportation Tracking System (DTTS),
monitoring data feeds for all military services.

**Regulatory Facilitation.** Some safety and regulatory issues apply to
motor carriers whether or not they carry hazmat. This includes truck
size and weight limits, drivers' hours of service, fuel tax permitting,
and registration. Carriers are interested in running safely and
minimizing the inefficiencies of weigh station and document clearance
stops. Regulators are interested in assuring compliance, reducing their
costs, and facilitating commercial business. Known generally as
Commercial Vehicle Operations within ITS (ITS/CVO), these applications
are well suited to automated media such as various forms of RFID.

The most advanced ITS/CVO harmonization activities to date are oriented
around major highway corridors, such as the I-75 corridor between
Florida and Ontario, Canada, and the I-5 corridor from California to the
British Columbia border crossing. The interests of the corridor
communities cross over into separate but related activities, such as
interoperable electronic toll payment systems and integrated traveler
advisory and information services. These communities and the truckers
who operate in multiple corridors will benefit from the ITS Dedicated
Short Range Communication (DSRC) standard effort, which is concentrating
on the 915 MHz spectrum. Another activity with potential benefits is the
network integration of ITS/CVO data feeds into private fleet management
systems.

**Customs and Border Crossing Facilitation.** Logically, this is a
subset of the preceding community focused on the control functions and
delays at border crossings. Even finer cuts could distinguish between
freight communities concerned with NAFTA surface border crossing and
others concerned with ocean ports, containers, and airfreight. Border
crossing issues deserve separate attention because of the international
jurisdictional issues, the overlay of immigration controls, and the
greater levels of congestion and delay. However, the perspective on
freight identification technologies and issues is consistent with the
larger Regulatory/CVO community.[^19]

# V. Freight Identification Technologies

Sections III and IV discussed certain freight identification
technologies in reference to long term trends, freight identification
strategies, and user contexts. Section V presents information in terms
of the technologies themselves. Most attention is devoted to
technologies with the fastest change, such as RFID and transponders,
including mobile location reporting capabilities.

Freight identification technologies perform source data automation for
individual transactions. They are often paired with data communication
technologies, such as Electronic Data Interchange or Internet-based data
exchange, to feed relational data bases and decision support tools.

## A. Contact Methods of Freight Identification 

Contact technologies are useful means of carrying automated source data
from, for example, a shipper's computer to a consignee's receipt and
inventory system. Contact media generally require manual intervention to
remove them from a shipment to be read.

**Floppy Diskettes and Memory Cards.** These are classic examples of
this kind of application, sort of 'freight-mounted' sneaker nets. They
illustrate the point that contact technologies are best used as tools to
pass detail data in special circumstances, not as a classic freight
identification tool.

**Optical Memory Cards.** These are write once/read many media, akin to
a CD-ROM in credit card form. DOD's Automated Manifest System (AMS) is a
prominent example, using 4 megabyte-capacity cards. AMS is an effective
tool given some of the limitations in DOD's logistics data systems, but
it is not suited for intransit visibility since the AMS card can only be
read if it is removed from the freight and taken to a reader-equipped
computer.

**Smart Cards.** Combining data storage and processing power, smart
cards are potent tools in the correct applications. Smart cards include
PC cards, stand-alone battery-powered units, and usually simple passive
or inductively powered cards. Most require direct contact or near
contact to receive and transmit data. Although there are probably
exceptions, freight identification is not the best use of these cards.

## B. Non-Contact Methods of Freight Identification 

Non-contact technologies range from very simple to very sophisticated.

### 1. Barcodes

The classic passive freight identification media is the printed linear
barcode. Barcodes have been updated in data richness and data redundancy
in so-called two-dimensional form, best represented by the PDF 417
standard. Linear barcodes serve as simple identifiers (hence are
"license-plate-like"), while 2D tags can carry some detailed shipment
data. These inexpensive technologies should continue in use for a long
time to come. However, there are more dynamic non-contact methods.

### 2. Image Recognition

Image recognition is a high tech adaptation of an old technique. At its
best, digital cameras record freight-related data, such as a painted
container number, chassis number, or actual license plate. An excellent
example is in place at Maher container terminal in New Jersey. Maher,
working as its own systems integrator, adapted Northrop Grumman's
Perceptics digital toll booth and parking lot license plate cameras, and
uses them to collect data and manage its terminal operation. In addition
to identification numbers, the cameras capture and the system stores
visual images of drivers and of container and freight condition. Based
on about ten months of experience, processing about 4000 container per
day, Maher's system has had a reliability rate of about 93% for
containers and 87% for chassis. As one indication of Maher's
satisfaction, they are now turning the system into a product to sell to
others.[^20]

### 2. RFID

Radio frequency identification technologies cover a wide range of
capabilities. There are short, intermediate, and long range systems,
although only the first two are generally considered as RFID tools.
(Long range capabilities will be discussed together with location
determination systems.) Knowledgeable forecasters anticipate more than a
six-fold increase in total RFID revenues from \$188 million in 1996 to
\$1.2 billion in 2002, much of it from smaller, cheaper products.[^21]
The market may be constrained in some niches by safety concerns about
electromagnetic energy from some designs that might imperil certain
shipments of explosives.

**Dedicated Short Range Communications**. DSRC technologies are often
used for vehicle-to-wayside applications, although simpler tags can be
used to identify items of freight. Typical uses include Automatic
Equipment Identification (AEI), the transmission of ITS/CVO regulatory
and clearance information, and payment of tolls.

The Amtech-based standards for the U.S. railroads and the intermodal
container operators cover DSRC applications. The tags cost about \$25
apiece each in small volumes and as little as \$20 each in large
volumes. Recently Unova acquired Intermec, Amtech's Transportation
Division, and some related IBM technologies. Using the IBM technology,
Unova expects to be able to drop comparable tag costs to about \$5,
which could expand the market for such tags, perhaps extending it to
individual pallets.[^22]

DSRC tags support ITS/CVO applications---including state and Customs
electronic clearances, safety data, and toll collection. There are
roughly 350 CVO tag readers in place in the U.S. and 40,000 trucks carry
transponder tags. While some tag systems are compatible and fewer are
interoperable, the ITS/CVO and electronic toll communities are
progressing towards a coherent set of DSRC standards. Those standards
will accommodate both passive read-only and active read/write tags.
However, the developing DSRC standards will not accommodate the existing
ISO AEI tags for intermodal containers. Nor, without future
modification, will the DSRC standards be consistent with the higher
frequency standard under development in Europe and Japan.[^23]

Small, inexpensive RFID tags could fill a number of freight-related
functions. When prices drop much below a dollar, RFID tags should begin
to displace barcodes in niche applications.[^24]

**Intermediate Range RFID.** Intermediate range RFID may cover up to
300-foot ranges. The largest freight-related user of such tags today is
the DOD, building on Army initiatives. Savi Technology manufactures the
DOD tags and, as described above, they are read/write tags that hold up
to 128 KB of data. The latest version of these tags cost \$159 each and
have omni-directional antennas, which makes them well suited for area
coverage, as in marshalling areas or warehouses. They are used to carry
complete shipment details on three kinds of shipments: surface container
loads, airfreight pallets, and major items of unit equipment such as
trucks and howitzers. The Army has put roughly 47,000 full capability
tags in use, plus about 75,000 lesser capability tags, 1,500 fixed
interrogators, and 500 handheld interrogators.[^25]

Readiness and sustainability concerns drive DOD's use of data rich RFID
tags, and the application would not be cost-effective for industry.
However, it makes sense for industry leaders to follow DOD's experience
closely: it is the most extensive high-end use of RFID and, as tag
prices and performance improve, there may be important lessons for
commercial innovators.

The Savi tags operate on 433 MHz, compatible with neither the AEI
standards nor the developing DSRC and European/Japanese standards.
However, DOD plays a leading role in the relevant ANSI standards
committee, which has been working from a 2.45 GHz base. That committee
is considering a multiple-frequency standard and hopes to complete work
by the end of 1998.[^26]

### 3. Long Range Communications and Location Determination

This is the area of most rapid development and change. The central
attraction is the availability of inexpensive real-time location data
from the Global Positioning System (GPS) satellites, although there are
also non-satellite-based approaches to location determination. A new
book reports counting over 400 positioning systems on the market for ITS
and navigation: about 250 long range systems, such as GPS; about 120
inertial dead reckoning map-based systems that are totally
self-contained in a vehicle; and about 30 short-range signpost-based
systems.[^27]

GPS is a one-way system, strictly a source of location data. As a
result, mobile systems need another channel to communicate with
dispatchers or control centers. Options include relatively expensive
direct satellite communication links from geosynchronous satellites,
with Inmarsat available worldwide and other service footprints in
limited but commercially important parts of the earth. Several consortia
are putting up Low Earth Orbit Satellites (LEOS) that promise less
expensive communications. And many vendors are fielding or experimenting
with still less expensive terrestrial communication including cellular,
AM radio, and proprietary networks such as ARDIS.

The high-end application for these technologies is fleet management as
provided by vendors such as Qualcomm and HighwayMaster for long-haul
truckers. A Qualcomm installation was estimated to cost \$3,500 per
tractor in some volume. Qualcomm has installed 230,000 OmniTracs units
worldwide and HighwayMaster has installed about 35,000 of its comparable
units. A newly released market forecast by Ovum, an international
telecommunications research firm, estimates the demand for tracking
services in small trucks, transit vehicles, and long-haul trucks. Ovum
believes 15% of the U.S. long haul truck market will be using tracking
systems this year and that penetration will grow to 40% in 2005.[^28]

By focusing on integrated (high-end) tracking systems, Ovum may be
underestimating the market growth for freight-related mobile
telecommunications. Significantly lower costs would open the door to new
applications, such as tracking untethered (disconnected) trailers and
containers. Acquisition and operating costs are falling for simpler
location tracking applications and a wave of untethered tracking
services are emerging from beta tests and approaching the market. A
partial list includes Orbital's GemTrac system, Raytheon's Remote Asset
Visibility, and Noram Telematics GlobalTrax Series 2000 Trailer Package.
Market leader Qualcomm and HighwayMaster plan to release their entries
in late 1998 or early 1999. Initial hardware prices range between \$600
and \$1000, plus monthly costs between \$20 and \$30. These prices seem
high enough to limit market penetration, but they are only the starting
points---prices will drop.

## C. EDI and Internet Data Links

Many forms of freight identification technology use telecommunications
as an integral part of their process---from DSRC through GPS. Those can
be thought of as retail or tactical uses of telecommunications.
Electronic Data Interchange and its telecommunication cousins such as
Internet data transmission serve a different role, enabling separated
parts of a network to share and coordinate transaction and backup detail
data. Applying the same metaphors, EDI and its relatives are wholesale
or strategic uses of telecommunication, and they are important
complements to freight identification technologies. Two issues merit
mention in this paper.

**EDI vs. edi.** There are many forms of **e**lectronic **d**ata
**i**nterchange between computers, including unique and proprietary
schemes. A subset of such generic "edi" is exchanges that use
industry-established definitions and protocols\--that follow
**E**lectronic **D**ata **I**nterchange standards. The potential power
of EDI for streamlining transaction processing is in the widespread
adoption of standards, not in a series of idiosyncratic interfaces.

**EDI and the Internet.** EDI traditionally has been passed through
Value Added Networks (VANs), which charge for their services. One of the
great attractions of the Internet is its inexpensive, if not free
communication. Web-based data transmissions via the Internet are an
attractive alternative, and new services advertise significant user
savings over VAN alternatives. Some observers believe that the Internet
will eclipse EDI, with much of the credit given to the higher costs of
VAN-based EDI.[^29] Even if VAN-based EDI shrinks, a critical feature of
EDI is likely to persist over the Internet: the use of industry standard
data definitions and formats---they will persist because they are the
real advantage of EDI.

## D. Decision Support Tools

Freight identification technologies gather source data and
telecommunications technologies can move the source data around the
world. However, tools to analyze and display information are necessary
to transform high quality data into critical information for the design,
adaptation, and control of exceptional logistics operations. While this
paper is not the place to discuss those tools, it is worth noting that
advances in computer processing power continue to expand the range and
sophistication of analytic tools and display capabilities available to
logistics practitioners. Warehouse location and truck route optimization
equations that consumed hours of computer time a few years ago can now
be run in minutes. Trucks equipped with HighwayMaster's on-board Rolling
ETA can measure schedule adherence and contact dispatchers on their own.
Modeling and simulation capabilities are more robust. Data visualization
and display capabilities are much improved. All of these developments
will continue and will become better integrated.

# VI. Looking Forward

## A. Implications of the Current Situation

The current array of modal and freight community approaches to freight
identification technologies is high on variety and low on harmonization
and interoperability. Although progress towards harmonization is
possible, the fundamental diversity is likely to persist for some
time---diversity in tags, in information systems, and in
telecommunications.

Barcodes are the most common form of identification for freight items
themselves, with specific standards and format chosen by the shipper or
their customer. Barcodes serve as retail point-of-sale labels on
merchandise and as shipping labels, such as the Military Shipping Label
or a FedEx package label. It is rare when a shipper chooses to apply a
more sophisticated identification or tracking device directly to the
freight. Package express carriers tend to add their own barcode labels
to customer packages in order to control movement through their closed
loop operations.

The diversity is most evident in the identification of transportation
conveyances. There is sporadic and uneven use of standard RFID tags to
manage fleet assets. Railroads must use the AAR standard RFID tag on
their rolling stock. Two ocean container carriers use the ISO standard
RFID tag to track chassis or containers in order to improve the
efficiency of their ocean terminals. At least one airline uses the IATA
recommended RFID tag to manage its air containers, but most carriers do
not.

Motor carriers have more variety than other modes. Although there is
growing use of DSRC tags for electronic clearance and of electronic toll
payment tags, many systems are neither interoperable nor compatible.
Long-haul truckload carriers control their tractors with Qualcomm
OmniTracs and comparable alternatives, then track their trailers and
customer loads through association with a tractor. One venue for
harmonization is linking their fleet management systems with ITS/CVO
systems.

A large portion of transportation equipment has no identifier beyond its
serial number and, in some cases, a barcode label inside the trailer or
container door to scan when loading or unloading freight. While image
recognition can transform painted serial numbers into digital data, this
is still uncommon.

Movement towards "smart freight in smarter networks" will tend to
encourage harmonization by reducing some of the technical barriers to
interoperability. However, "smart freight in smart networks" will not
eliminate the diversity in freight identification approaches. People who
support harmonization and interoperability are assured of a long-term
challenge.

## B. Key Enablers of Coming Changes

Section III described the barcode-and-database model or architecture
("talking freight in listening networks") as encompassing today's best
commercial practices. Two application developments and one general trend
may combine to move the definition of best practice beyond the current
model and towards "smart freight in smarter networks." This section
discusses those developments.

### 1. Auto-Networking Tags

Figure 2 illustrated the nesting or Russian Doll relationships inherent
in the most freight shipments: small shipments can combined in larger
packages, mixed together on pallets, which are loaded in trailers that
may move both on a flatcar and behind a tractor. Each layer has a unique
identifier and related documentation and the relationships must be
maintained correctly. Auto-networking tags are tags capable of providing
or receiving and managing hierarchical independent reports, as in a
pallet's tag reporting its arrival on board to a container's more
capable tag. Reliable, inexpensive auto-networking would, among other
things, permit the creation and updating of portable inventories. These
tags would be well suited to dynamic shipments such as multiple
stop-offs and to a need for field-accessible temporary storage. At least
two firms have done or are working to develop this capability. Savi
Technology pursued the concept several years ago and PAR Technology is
working on it now.

### 2. Cheaper, Smarter Real-Time Tracking

Mobile location tracking will benefit directly from the expanding array
and falling cost of telecommunications and from the development of
smaller, cheaper microprocessors. The price/performance ratio for
real-time location tracking will continue to fall. Location
determination technologies, predominantly GPS and later a new generation
of Inmarsat, will be combined with more distributed intelligence and
multiple modes of communications. We are already seeing the first wave
of untethered trailer tracking equipment and services approach the
market. As their prices fall and their value is proven, larger markets
will open for mobile location tracking beyond the fleet management and
tracking forecasts discussed above. Another indicator of things to come
is this material taken from the web on Eagle Eye Technologies, Inc.:

> "Tracking People and Objects World Wide
>
> Eagle Eye is the developer of a wristwatch sized mobile satellite
> terminal and service. Our SpaceTRAC tracking service will be
> compatible with the emerging low Earth orbiting mobile satellite
> communication systems.
>
> The Eagle Eye system is designed to allow a previously tagged person
> or object to be located via satellite anywhere in the world.
> Applications include tracking Alzheimer\'s patients, children,
> executives, probationers and parolees, military personnel, shipping
> containers, and vehicles."

### 3. Miniaturization and Integration

The major trend in information technology has been the delivery of more
and denser processing power and data storage---more power in less
space---at less cost per unit. There is no reason to expect a
significant near-term break in that trend or in the concomitant ability
of vendors to design and deliver smaller, better integrated, more robust
and less expensive packages. This trend enables the development of more
powerful decision support and display capabilities.

Even more intriguing, specialized analytic horsepower can be packaged on
smaller chips. Embedded microprocessors or chips---from automobile
engines and traffic signals to restroom faucets---reportedly outnumber
personal computers by 30:1, and the ratio will increase.[^30] Embedded
chips, useful to capture data and control processes, are essential for
distributed freight-related processes.

The power of embedded microprocessors multiplies when they are
connected. Davis and Meyer describe interactive systemwide control as
the "ultimate killer app for embedded processors." Systems rich in
connected embedded processors will be more transparent and more
adaptable.[^31]

Smaller, more capable, less expensive microprocessors are the drivers
behind this paper's forecast of cost-effective smart freight. Connected
microprocessors combined with more powerful decision support tools are
the drivers behind smarter logistics networks.

## C. Impediments to and Tools for Change

**Impediments.** What little standardization and interoperability there
is in regard to freight identification technologies is scattered in
separate niches, and many factors impede efforts to bridge those niches.
This is not uncommon in implementing new technologies, nor is the fact
that the impediments are more institutional than technical. Some of the
key impediments to address are:

-   Legacy problems of an installed base---as in ITS/CVO and DOD RFID
    applications

-   Problems of scale and consistency---as in APL's decision to back off
    from putting AEI tags on all containers when it joined the
    capacity-sharing alliance

-   RF frequency choice and its trade-offs---among ITS/CVO communities
    (915 MHz and 5.8 GHz), commercial AEI (915 MHz and 2.45 GHz), and
    DOD RFID (433 MHz)

-   Fuzzy benefits attributed to greater interoperability---first order
    user benefits and second order system benefits tend to be glib and
    general

-   User focus on capabilities tied to short-term requirements

-   Concerns about government intrusion and regulation

**Tools for Change.** There are opportunities and approaches to overcome
these impediments to greater harmonization and interoperability. The
June 1998 *Freight Identification Technology Workshop* is one
opportunity and some of the approaches most relevant to it are outlined
below:

Clarify User Requirements and How They May Change. Harmonization across
communities requires shared understanding of the interests and needs of
your potential partners. To be productive, discuss requirements in an
open frame of mind, not as a tightly defended turf.

Articulate Potential Benefits of Harmonization. It is critical to
transform fuzzy benefits into clear, concrete first order benefits for
users and second order benefits for the broader system. Done well, this
will be the catalyst that energizes harmonization and greater
interoperability. Done poorly, it will largely guarantee slow, tepid,
and ineffective progress. Of course, it is also possible that a good
assessment will indicate there are few concrete benefits and little need
to invest time and effort in harmonization.

Accumulate Lessons Learned and Success Stories. One useful focal point
is what did and did not work in identifying and overcoming barriers.

Identify Projects and Activities to Focus Energy. Identify projects as
part of an overall strategy and agenda for action. Agree to roles and a
timeline.

Establish Ways to Follow-up and Maintain Communication.

## D. User Requirements vs. Changes in Technology

The most fundamental engine for implementing technologies such as
freight identification tools may be user requirements as defined by the
users. It seems fitting to conclude with an observation about the
interplay between requirements and technology.

Although business imperatives properly drive technology choices,
technology options can change perceptions of business possibilities and
then of business imperatives. Technologies and services that seem absurd
and unnecessary today can turn into competitive advantages tomorrow and
essentials for survival soon after.

This may happen when accurate, current status and location information
can be derived from small, cheap processors and communications options.
Functional user requirements are relative, not fixed: any definition of
requirements inherently reflects its author's often implicit assumptions
about the context in which she or he operates. Those assumptions include
issues of technical possibilities, costs, and values. For example, given
today's information technology capabilities and costs, most thoughtful
industry logisticians see no requirement for data-rich RFID tags in
normal commerce, nor any requirement for distributed intelligence on
normal shipments. However, dramatic changes in technical capabilities or
their costs could change one's view of what is required for good
business practice.

This kind of combination of changing technology and changing perceptions
could move us from "talking freight in listening networks" to "smart
freight in smarter networks."

\###

# Endnotes

[^1]:
    # One reflection of the complexity inherent in this topic is the "Comparison of ITS/CVO Interoperability Guiding Principles," ITS America CVO Policy Subcommittee (PSC Draft), October 2, 1997. The document examines the guiding principles of one professional organization and three CVO consortia. Another source with a helpful perspective is a March 4, 1998 presentation to the ITS America CVO Policy Subcommittee Interoperability Task Force (provided by Lance Grenzeback of Cambridge Systematics). 

[^2]: Truckers were long considered the primary competitor to the
    railroads for general freight, but they are now the railroads'
    largest customers in this line of business. In effect, truckers
    provide retail transportation while the railroads provide a
    wholesale service. Steven Ditmeyer, Intermodal Task Force Meeting at
    the ITS America Annual Meeting, May 5, 1998.

[^3]: Aylward, Anne D., "Intelligent Transportation Systems and
    Intermodal Freight Transportation," Volpe National Transportation
    Systems Center, December 1996. Figure 1 has been adapted with minor
    changes from page 11.

[^4]: The core of Figure 2 was developed several years ago by the
    author's team at the Volpe Center, where he served as chief of the
    Intermodal and Logistics Systems Division.

[^5]: For example, see Mitre Corp, Center for Advanced Aviation System
    Development,

    [www.caasd.org/Research/AMSS/ads.html](http://www.caasd.org/Research/AMSS/ads.html),
    on Automatic Dependent Surveillance. The US Coast Guard employs
    analogous capabilities as part of its Vessel Traffic Management
    System. See, for example, LT Gregory Johnson, "Communications
    Technologies for Automated Dependent Surveillance," MILCOM '95, San
    Diego, CA, 6 Nov 95, Conference Record pp. 40-44. Note the
    difference in terminology between the FAA and the Coast Guard.

[^6]: One example of a semi-automatic system was CARDPAC, an ocean
    terminal management system developed by the Military Traffic
    Management and Terminal Service in the early 1970s. Packages of
    prepared 80-column punch cards were attached to freight shipments.
    Each time the shipment was relocated or accountability changed, a
    punch card was supposed to be pulled from the packet to be processed
    in the terminal's computer system.

[^7]: The US Postal Service is, to the author's knowledge, the first
    shipper to tap the air traffic flow control data stream, tie
    specific flights to specific shipments, and use the information in
    its national operations center to manage its materiel movements.
    Visit to USPS headquarters, September 1997.

[^8]: Signal Computer Consultants,
    [www.usaor.net/signal/aei](http://www.usaor.net/signal/aei),
    5/23/1998. The effectiveness of the railroad tracking system is
    discussed below.

[^9]: Presentation at the ITS America Annual Meeting, May 4, 1998, by
    Alan Meyers, TranSystems.

[^10]: Technology can transform older "mute" identifiers into "talking"
    identifiers. For example, digital cameras and computer character
    recognition can automate the processing of serial numbers painted on
    containers.

[^11]: The DOD is the principal user of data-rich read/write RFID tags
    in transportation applications. Although the tags carry considerable
    detail about each shipment, the information is rarely accessed
    directly from the tags in the course of a shipment. The exceptions
    tend to occur when handheld interrogators are used to manage tagged
    containers or pallets in military marshalling areas.

[^12]: Each of these problems occurred in DOD's pilot projects with
    "data-rich" RFID tags that carry complete shipment details. Boxes of
    tags that had fallen off containers were carried past RFID
    interrogators that recorded the tags as freight movements. Tags were
    "burned" with correct contents information, then mixed up before
    they were attached to containers. Container contents information was
    not removed from tags when the containers were stripped, so
    interrogators read empty containers as if they were full. Active tag
    batteries were depleted very quickly by continuous overinterrogation
    in poorly instrumented marshalling areas.

[^13]: Groundbreaking work to package these technologies for the Army
    and other agencies was done by DOT's Volpe National Transportation
    Systems Center in Cambridge, MA.

[^14]: The HighwayMaster on-board unit is equivalent to a 486-class
    microcomputer. See
    [www.highwaymaster.com](http://www.highwaymaster.com/) and *Private
    Carrier,* September 1997.

[^15]: INFORMATION PAPER, SUBJECT: Defense Advanced Research Project
    Agency's Advanced Logistics Project, 7 April 1998.

[^16]: Drawn from informal discussions with a keen observer of railroad
    operating practices.

[^17]: One example of the kind of surprise that might change this
    conclusion: a decision by US Customs to grant expedited clearance to
    any shipment arriving at a US port of entry in a conveyance
    identified with an ISO standard or compatible RFID tag.

[^18]: *Operation Respond* was a joint project of FHWA, FRA, and RSPA.
    *www.avalon-ais.com/itscvo/opresp.htm.*

[^19]: For example, see N. Ericson and N.S. Johnson, "Getting the Green
    Light at U.S. Border Crossings," *ITS World,* September/October
    1996, p. 38.

[^20]: Gaps in the identification data are due to problems such as
    repainted containers that have been stenciled over the container
    corrugations and the susceptibility of the standard container number
    location to rust and damage. The reliability of chassis reads is
    lower because there is no standard location for the chassis
    identification number. Phone conversation with Henry Kanarek, Maher
    Terminal Systems Milburn Office, May 11, 1998.

[^21]: This forecast is for all uses of RFID, presumably in the U.S.,
    including package ID tags and manufacturing processing tags. Frost &
    Sullivan press release, November 4, 1997 (PRNewswire).

[^22]: *Logistic Technology News,* April 24, 1998, p. 6 ff. ISO tags
    cost slightly more than AAR tags because the ISO tags have a
    long-life battery to boost the passive backscatter signal, while the
    AAR tags do not have batteries. Conversation with Richard Schnacke,
    Amtech, May 6, 1998.

[^23]: The population of ITS/CVO readers was in a Mitretech report
    prepared for the FHWA ITS Joint Program Office, per Michael Onder,
    JPO, on a DSRC panel at the ITS America Annual Meeting, May 5, 1998.
    The number of trucks with tags is from Chris Brandt, "The Trouble
    With Transponders," *Transport Topics*, March 30, 1998. The ASTM,
    the IEEE, and the SAE are developing the DSRC standards as
    appropriate. The European compatibility issue is from a phone
    conversation with James Carnes, DOD, on May 18, 1998.

[^24]: Bert Moore, "Radio frequency identification: Where's the
    revolution?" *Automatic ID News,* January 1998, p. 43.

[^25]: Material on the DOD Concept of Operations for Automatic
    Identification Technology (AIT) is at
    <http://gcss.jsj4.com/projects/ait/ait.html>. Price and volume
    information is from personal communications with an Army leader in
    the use of RFID tags and from a representative of Savi Technology.

[^26]: Carnes conversation, as above.

[^27]: Chris Drane and Chris Rizos, *Positioning Systems in ITS,*
    Boston: Artech House, 1998, pp 237-239.

[^28]: The OmniTracs volume is from *Global Positioning & Navigation
    News,* April 22, 1998, p. 4. The Ovum material is from a press
    release, \"Mobile Location Services Mean Increased Business
    Opportunities for Network Operators,\" Burlington, MA\--(BUSINESS
    WIRE)\--May 14, 1998, and from personal correspondence, May 18,
    1998.

[^29]: For example, System Architects of Chattanooga expects to roll out
    its TranSend V.net system for truckers before autumn. This offering
    will use push technologies to get status information to the shipper
    or consignee's server. It will avoids VAN costs and the need to log
    in. According to the vendor, even with a \$1200 per month fee, the
    new service "represents less than 20% of VAN charges." "System
    Architects to Rollout Replacement of EDI Services with US and
    Foreign Carriers, " *Logistics Technology News*, April 24, 1998 p 6.
    Several speakers at the ITS America Annual Meeting, May 4-6, 1998,
    spoke of the Internet eclipsing EDI. Cost notwithstanding, EDI never
    fulfilled the high hopes held out for it because of the drag imposed
    by non-technical implementation issues.

[^30]: Stan Davis and Christopher Meyer, "Looking to a Future of
    Networked Embedded Processors," *Forbes ASAP,* June 1, 1998, p. 75
    ff.

[^31]: Interactive systemwide control is "the extension of control
    applications . . . instead of just being purely local and
    self-contained, networked processors will be capable of collective
    systemwide control." *Ibid*., p. 80.