Follow the Freight, Find the ROI
While the threat of cargo terrorism steals headlines (Dubai Ports World debacle anyone?), U.S. shippers are equally challenged by more common cargo perils such as vandalism, breakage, spoilage, transport accidents, and theft.
In fact, the FBI estimates losses from cargo theft at $50 billion in the United States alone, according to Denis duNann, CEO of Bothell, Wash.-based SC-integrity.
It's a wonder supply chain managers sleep at night.
Increasingly, companies are finding cargo safety peace of mind in one of the numerous asset-tracking technology solutions flooding the market.
While their capabilities, price structure, delivery platform, and IT functionality all vary, at their core, asset-tracking systems perform the same functions: they attach to products (at both case and pallet levels) or transport containers; provide real-time tracking information via satellite, GPS, or RFID technology; and offer an interface for shippers to monitor and utilize tracking data. Data for data's sake, after all, doesn't solve any supply chain problems.
Asset-tracking technology vendors are betting their startup capital and future profit potential on the fact that supply chain security threats will not likely dissipate any time soon. Increasing federal regulations are also helping to drive adoption of this technology.
Pharmaceutical companies, for example, will soon need to comply with ePedigree laws in several states requiring electronic tracking of drugs as they move through the supply chain, while crime remains a continual threat.
The hot asset-tracking technology market is changing its focus from tracking the vehicle to tracking the freight contained within.
"Fleet management with conventional GPS or other location technology has been available for many years," says duNann. "Although effective fleet management solutions, they are not effective security solutions because thieves know where they are installed and can easily disable them."
The new technology consists of portable, rechargeable GPS systems that can be covertly hidden in cargo and monitored through the Internet, allowing shippers, carriers, retailers, and consignees to track and monitor cargo throughout the supply chain independent of the vehicle or trailer.
One new company entering the asset-tracking fray offers a unique level of customization that sets it apart from other available solutions. Tucson-based ARGO Tracker, a spinoff from Cleveland aerospace and defense supplier Argo Tech Corporation, recently debuted its new solution, a combination of in-field data collection units and web-based applications that provide real-time global visibility regardless of mode.
ARGO Tracker CEO Mike Hammonds recently briefed Inbound Logistics on the new offering, hardware transmitter in tow.
The plain white tracking device, not much bigger than a removable zip drive, looks decidedly low-tech, but hides within it numerous capabilities—including plug-and-play availability of global RFID and video functionality, as well as environmental sensors monitoring temperature, shock, and vibration, as well as open-door detection to guard against security breeches.
ARGO Tracker offers users two ways to accept the data interface: through a USB port, or via the wireless protocol known as Zigbee. It also provides longer-than-average power management—ARGO Tracker's devices last up to six months before needing a recharge.
In addition, the company's polygon geo-fencing technology lets users restrict the movement of a vehicle within a specified area of their choice. Shippers are notified via a customized alarm—text message, e-mail, phone call—if the freight moves outside that area.
But it is ARGO Tracker's broad range of customized service options that piques our interest. "Competitive products are aimed primarily at the fleet management market, and don't offer custom configurable solutions," Hammonds says.
A small, regional distributor of temperature-controlled products, for example, has vastly different tracking needs—and budget dollars—than a worldwide consumer electronics chain. In addition, transportation carriers and third-party logistics providers partnering with ARGO Tracker to offer tracking services to their customers have yet another set of service and technology needs.
It's an ambitious goal, but ARGO Tracker aims to serve all those markets by providing multiple solution sets designed to meet the financial and infrastructure requirements of both large and small companies.
ARGO Tracker's basic service package, called Sentinel, runs on a subscription-based business/information technology model. ARGO Tracker provides data capture and collection on its servers; users access the data via a password-protected web site.
Companies with greater IT resources can host ARGO's mid-tier bundled hardware/software package, Enterprise, on their own servers, which allows them to maintain control of their IT functions. Fusion, a third hybrid offering, utilizes features of both packages.
Monitoring services start at $18 per month for Fusion with a $1,000-per-device fee for each in-field data collection unit. Sentinel begins at $75 a month for hardware and software. Users can also decide between utilizing a "thin" client application, which runs within a standard browser, or a "thick" client application, which downloads to the desktop.
Regardless of the program shippers choose, ARGO Tracker interfaces with legacy systems, meaning companies can skip purchasing middleware or building a custom interface in order to use tracking data in conjunction with data from other systems.
"We didn't want to be just a hardware player," says Hammonds, noting that such a plan might commoditize the application. "We realized there were no applications on the market that support what the hardware can do; they all depend on someone else coming up with business solutions."
ARGO Tracker's flexible approach to asset-tracking represents a good business model for the company, and a user-friendly solution for shippers.
Interestingly, many companies still view security technology investments as a burden on the bottom line. After being burned by previous "of the moment" technology implementations, many transportation managers are hesitant to embrace new technology spending, says Hammonds.
"But by monitoring and tracking assets anywhere in the world via the Internet, companies gain the visibility required to cut logistics cycle time and costs by reducing inventory and stock-outs, and improving factory utilization," he says.
Combining security concerns with technology that boosts visibility and transport efficiencies, asset-tracking vendors such as SC-integrity and ARGO Tracker present a strong value proposition.
The thing to track now is how shippers respond to their offerings.