ABI: Cargo Tracking, Security Market Need Mandates, Incentives
January 15, 2008 // Published as a news service by IHS
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While there is healthy activity in cargo tracking and security, it is difficult to determine where the market is headed, according to ABI Research, as it hinges on whether or not a set of requirements and mandates is placed on shippers.
"Pilots and tests are being performed by the U.S. government and by commercial companies within the sector," said ABI Research director Michael Liard.
"The defense sector wants to secure and maintain visibility of its goods, while companies in the commercial sector invest in solutions that provide visibility, as well as decreased pilferage of those goods."
For instance, Dow Chemical's implementation with Savi demonstrates a typical expectation in the market, analysts said. Using Savi's solution on containers allows Dow Chemical to have in-transit visibility, thereby supplying great value to the company.
Other markets showing an interest in visibility and security will consist of those that ship containers with high value assets, or containers coming from suspicious origins that look to gain quicker entry into the U.S., for example.
Analysts said solutions will aim at tracking containers, as opposed to securing them.
"Closed-loop supply chains are considered potential markets, but outside of the military, few are known," said Liard. "Open-loop supply chains with many players need standards. Pilots will be announced and conducted over the next couple of years."
Until there are enforceable mandates, the market will move slowly and activity will be limited, analysts said. Although the U.S. Department of Homeland Security (DHS) mandated the use of International Organization for Standardization (ISO) 17712 - Freight containers, mechanical seals, for securing containers, there are no incentives in place.
"And despite the promise of 'green lanes' for faster customs inspections (for companies that have been certified tier three under C-TPAT [Customs Trade Partnership Against Terrorism]), these benefits have not spurred shippers into adoption," Liard said.
"Unfortunately, it may take another tragic act of terrorism or major incident before the government or the WCO [World Customs Organization] sets any mandates - particularly for electronic seals, pushing the industry toward wider implementation," he said.
Source: ABI Research.