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Articles

Thinking inside the box

Lydia Heida

Containership
Containership

For those transporting goods by sea, ensuring containers are kept secure en route can be a problem. PE looks at ways of tracking shipments and keeping them safe, and at the advantages and obstacles to the adoption of such devices

Keeping track of a shipment en route to its destination can be problematic. Some 90% of the world’s freight goes by sea, with about 20 million shipping containers undertaking 300 million movements a year. “If you want to know where your container is, you need to call three or four different companies,” says Maxim Prilutsky, vice-president of products management at Starcom Systems, which specialises in the remote tracking and monitoring of assets.

However, using a tracking device makes it possible to see in real time where a container is, and give an accurate delivery time. Such a small change in efficiency – say 1% – can save tens of billions of dollars, because of the volume of this industry. By 2017, the number of tracking units is expected to reach more than one million, according to analyst firm Berg Insight.

At the moment, almost all containers are closed with a bolt seal, making it easy for thieves to break in. Around $50 billion in goods are stolen each year from various points along the supply chain.

To tackle this problem, several British companies have developed ‘smart locks’ that provide alerts if entry is forced, along with updates on container location using GPS and GSM systems such as Loksys and PearLoxx.

Other UK companies have developed ‘smart containers’ that take tracking and monitoring to the next level, with sensors that also register shocks, temperature, humidity, light or low-level radiation.

GuardFreight, NFC Group, Starcom, IMC Group and ISO Track have each developed their own type of smart container.

Integrating smart containers in the Internet of Things (IoT) will be a game-changer. “It gives more options for interacting. It can alert you when things are not taken onboard, or when a container has been exposed to high temperatures when you are shipping perishable goods,” says Stig Hansen, director at NFC.

“You will not be able to prevent or change it. But at least you can tell your customer that that container was unfortunately ruined, rather than discover this two weeks later when it arrives.”

For example, fluctuations in temperature mean that large quantities of pharmaceuticals, and around 25% of perishable food products, in shipping containers are damaged each year. Current tracking and monitoring devices make it possible to offer customised shipping routes for food products that need to be transported as fast as possible in a temperature-controlled environment.

Another aspect offered by tracking devices is a guarantee that the container has not been broken into during transport – which may also result in lower insurance premiums.

Shippers could also transmit details concerning individual shipments before the ship arrives at a port, enabling customs authorities to pre-approve incoming cargo. “The more information you have, the more services you can provide and be differentiated from competitors,” says Hansen.

However, the degree to which such services are used is affected by cost. High operational costs and low profitability have forced shipping companies to minimise costs, says a 2015 report by research firm Technavio. “The price for container shipping is low,” says Prilutsky. “A trip from China to the US costs $1,000. It is difficult to offer services that cost an additional $200-$300 per shipment for goods that are very cheap.”

There is also a problem with shipping firms wanting to keep information to themselves. “I don’t see shipping companies providing information voluntarily. They don’t really want their clients to know where the container is at any moment, or which shipper they use, which subcontractor,” says Prilutsky.

Hansen adds: “A lot of the industry is outsourced. Shipping lines don’t own the vessels or the containers, nor the vehicles for further transport, so nobody takes responsibility. There are many decision-makers. One of the key challenges will be for the industry to look across the whole chain.”

A recent analysis by consultancy firm Deloitte about IoT opportunities in transport and logistics concludes that “getting all links in the chain to agree on and adopt common protocols will remain a major challenge”. These links range from freight forwarders and shipping lines to ports and trucking companies.

On the other hand, declining hardware prices are making container tracking solutions affordable, and the technology to service the market – GSM for communications and GPS for positioning – has reached maturity. “It’s not just about the coverage; the cost of communication is much reduced,” says Andrew Harrison, director at GuardFreight, which last year, after two-and-a-half years of development and testing, launched its security product E-Containerlock. The lock fits on the door of a shipping container and uses a GPRS transmitter to provide regular position updates and send alerts if the container has been tampered with.

“A sensor pack can be put in the container to detect changes of pressure, light, temperature, humidity and shock ,” says Harrison. “It communicates with the lock on the outside by Bluetooth.”

The price for this lock, without a Sim card or internet platform, is $585. The firm also offers a 24-month contract for less than $2 per day, which includes communications and unlimited platform access. Using the device for a single trip from the UK to Hong Kong would cost $100-$200.

“There are devices that are less expensive, but our modem covers the whole world,” says Harrison. “It’s a 3G modem that falls back to 2G when 3G is not available. And it has six bands that can work on six different frequencies.

“There are other 3G modems that have five or three bands, or even two bands. These might work only in Europe, and not in the US. That is not something we could risk. So while hardware has become less expensive, not all devices are equal.”

Sales numbers for E-Containerlock are still in the low hundreds, but it is being trialled by companies in Africa, the US, Europe and Asia. “They are all looking at buying four-figure numbers,” says Harrison.

Another firm reducing costs is NFC. Using gateways instead of Sim cards, it claims to have reduced the operational costs for a tracking device by more than 75%. For the firm’s Orion asset-tracking device, the cost – including hardware, infrastructure and software – comes down to around £100 per unit over three years.

Orion uses radio frequency tags that report over any gateway within range and relay time, temperature, tampering, motion, speed, latitude, longitude, battery information and shock reports. “One gateway can read hundreds of tags, while you need 500 Sim cards to read 500 assets,” says Hansen. “Most clients would have hundreds of tags but they need only a few gateways. So if you have a large fleet, this means a big reduction in costs.

“The gateways can be plugged into the internet connections that you already have – into a router for satellite or a router for GSM. It is not a big deal in terms of how you connect the gateways, which gives a lot of flexibility.”

Two satellite networks can be used to provide global coverage – Globalstar and Iridium – when the device is not within range of a GSM network. “They connect back to the server or the ‘cloud’ – that gives end users the information,” he says.

The system took a long time to develop and has been on the market for a year-and-a-half, he adds. It is being used in six of the world’s seven continents – the only exception is the South Pole region.

It does seem that interest in smart containers is finally gaining momentum, with a few significant deals being made last year.

One of the largest shipping lines, Maersk, is working with US telecommunications company AT&T to track and monitor more than 280,000 refrigerated containers full of perishable goods. In addition, French shipping line CMA CGM announced that it would begin to use smart containers developed by another French firm, start-up company Traxens. And Hong Kong’s SITC Shipping Group and Shanghai Haihua Shipping announced that they would upgrade their entire container fleet to smart containers, using a product from Israeli company Loginno.

These deals are the beginning of the integration of smart containers with the IoT. However, security experts are also warning of the dangers posed by hackers – the new version of pirates on the open sea. Vulnerabilities in computer systems make it possible to hijack valuable cargo by disabling the tracking device and spoofing the coordinates, to make it appear as if a container is still travelling its intended route.

In addition, as all the main systems on a modern container ship – such as the main engine, steering and navigation systems – are controlled by software, whole ships can be hijacked. So the University of Leicester has been working on a project funded by the US Navy Office of Naval Research, looking at the use of commercial satellite systems to monitor all maritime traffic movements. “In comparison with airspace, the maritime domain is much less rigidly regulated,” says Dr Nigel Bannister, principal investigator on this project.

The ship hijacking scenario provides food for thought. After all, one can monitor the smartest container in the world but, if it is stuck on a hijacked ship, it is still not ending up in the desired timeframe at the customer’s door.

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