ABI: Active RFID Leads Technology in Cargo Container Security...For Now

November 16, 2007 // Published as a news service by IHS

Analysts said in the absence of a mandate from the U.S. government and amid continuing questions about the costs and benefits of installing container security and tracking devices, the market for these systems remains largely undeveloped as forces driving and inhibiting its growth seek a balance.

"The cargo tracking and security market is not immune from the active versus passive cost benefit performance debate," said Michael Liard, research director at ABI Research.

"The ISO standards committee has been deliberating for years, and this year, amid industry rumors suggesting that the U.S. government would mandate inspection of container seals on all incoming containers, it decided in favor of active technology."

However, the U.S. Department of Homeland Security (DHS) did not issue any mandate, analysts said. So end-users have stepped back, maintaining a "wait and see" position.

Meanwhile, analysts said a number of passive RFID technology vendors have started working with other standards bodies to formulate a standard for less expensive passive RFID technology which, they believe, would be used for container tracking. There is interest in tracking on the part of shippers and port operators, because they see it as an investment which, unlike security solutions investments, would offer them a clear financial return.

"So far, the U.S. government has wielded the carrot of expedited processing of sealed containers, rather than the stick of a legal mandate," said Mike Ippoliti, research director at ABI Research. "That carrot has not been tasty enough to tempt any of the interested parties. While nobody wants a container-related breach of security, only if there is a major incident will the government try to impose its will on this industry. If and when that happens, we expect the container security market to explode."

Source: ABI Research.