March 2003 | Commentary | Supply Chain Technology

Lorantec: Cargo Gets Smart

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In this era of smart machines, smart cards, smart motors, and smart sensors, it's about time we had smart cargo—specifically, smart cargo containers. The ability to know where and in what condition a shipment is becomes a major supply chain consideration and the primary goal of better process visibility.

Lorantec of Sunnyvale, Calif., is building its business around offering a solution to tackle this core supply chain consideration.Lorantec has built its solution to answer two major priorities of logistics professionals: in-transit visibility and exception reporting.

In-transit visibility. When a company cannot track shipments in its worldwide supply chain, it may experience possible stockouts that in turn could result in unhappy customers and a loss in sales.

Lack of visibility also leads to excessive inventory, which means wasted resources and increased expenses. In addition, much time and effort is lost in trying to track the shipments, leading to further waste and expense.

The Lorantec solutions focus on the part of the supply chain that exists between one shipping dock and another; an area that is the hardest to observe and control. One chief problem the company sees is that information has traditionally not been provided in real time. At best, it is provided between choke points and these can be extended anywhere from hours to weeks.

Dock-to-Dock Visibility

Lorantec also sees the need for information that gives a company key data about a container such as internal temperature, balance of the container (possible tilting beyond allowable range), dropping, contact with harmful radiation or chemical exposure, and contamination by seawater.

The company's Loran Track solution provides dock-to-dock tracking visibility for goods in transit. Lorantec offers the solution to users in real time, and tells them where a shipment is at any time and anywhere in the world.

Exception reporting. Loran Track also tells users where a shipment is supposed to be and if delivery is ahead or behind schedule. The system notifies customers when exceptions occur, such as a delay; a wrong direction; the opening of a container; a radiation, seawater, or chemical problem; or if the temperature exceeds a tolerable level, as well as other customer-specific information. Loran Track also provides an audit trail or shipping history.

To provide visibility and exception reporting information, Lorantec uses worldwide digital satellite packet technologies, advanced Location Aware Wireless Networks (LAWN), and GPS, XML, EDI and web-based interfaces. These technologies provide visibility with no line-of-sight limitations. The company's tracking device can be attached easily to a shipping container and is immediately live and traceable by the customer.

"Our long-term vision and goal is that transportation providers will handle the tracking process by delivering containers with a device pre-installed," says Lorantec CEO Vaibhav Malawade. "But this is a new and unproven concept. To overcome this problem our engineers designed a removable device that works with the participation of one party at the shipping dock and one at the receiving dock."

On Lorantec's secure customer site, users see the location of their shipments, both graphically and numerically (latitude/longitude). They also see shipment status, including the likelihood that it will reach the next hand-off point on time and vital signs such as the status of any sensors.

The device has a standard interface for sensors that allow different customers to choose different sensory options. "For example," says Malawade, "someone shipping computers might want to monitor G-force for dropped containers, infrared, and open/close for security. A food shipper, however, might only be interested in temperature."

Customers also can view a complete audit trail of where the container has traveled and when and where exceptions have been generated. Some important provisions of U.S. Customs' C-TPAT initiative, for example, require an audit trail, detection capture, and communication of breeches in real time. Finally, exceptions generate automatic notifications to customers via e-mail, pager, or XML/EDI transactions.

As for security, the device is attached in such a way that a thief cannot breach the container without generating an exception. Even if the container door is removed completely (which is a common way thieves get around current locking mechanisms), the Lorantec device relays a message regarding the breach. In addition, certain detectors, such as human IR sensors, monitor the integrity of the cargo.

"Knowing when and where breeches occur can have strong implications for retailers' insurance costs," says Malawade. "It will be much easier to point the finger at the responsible party, for example, if a container loaded with monitors is dropped by port operators."

Retailers Feel the Pain

While Lorantec is not targeting specific customers in the marketplace, it has gained the most traction with mid- to large-sized retailers.

"They feel the most pain when it comes to poor supply chain visibility and cargo security," says Malawade. "But we expect that once retailers test the concept, they will very quickly push the burden to their 3PLs and/or transport providers. We are in conversations with all parties involved in the shipping industry—shippers, 3PLs, retailers, manufacturers, and insurers."

Lorantec also is partnering with a few customer advisers who have signed up to beta test the product. In addition, "we are in discussions with several logistics software providers to become their data collection device," says Malawade.

For more information, email Lorantec at info@lorantec.com, or visit www.lorantec.com

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