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Secure Containers for $10 a Pop

By Diane Brady On Jan. 12, General Electric (GE) and China International Marine Containers (CIMC), the world's largest manufacturer of shipping containers, will announce the successful completion of a commercial test for a tamper-evident cargo-security system. With wireless technology embedded in the container walls and a low cost of $10 per container, Randy Koch ofechnology consultancy Unisys (UIS) believes it could be a groundbreaking step in the battle for safer shipments. "It's the most viable container-security device we've seen for enhancing security and facilitating trade," says Koch, Unisys' practice director of supply chain security.

Though the collective might of two industry heavyweights is sure to spark attention, the ultimate success of the so-called Tamper Evident Secure Container (TESC) will depend on a buy-in from the U.S. Homeland Security Dept. And so far, little guidance has been issued on what technology is needed to meet customs regulations.

PRIME TARGET? At the moment, experts say the lack of established standards for cargo-security devices has put a lot of companies in wait-and-see mode. Much like the old Beta vs. VHS videotape format debate, few shippers want to make any major investment without knowing it will pay off in faster transit times through customs, as well as enhanced security. GE is also competing with a number of smaller niche players clamoring to sell security products.

With more than 20,000 containers coming into the U.S. every day, cargo shipments have long seemed like a particular area that's vulnerable to terrorism. While Homeland Security officials screen select shipments and have moved to speed up cargo clearance for companies with stringent security policies, much of the battle has been centered on developing new technologies. Customs inspectors need fast, reliable tools to ensure cargo security.

The GE/CIMC system revolves around a palm-size device that can fasten to any container and, through a wireless network, detect unauthorized access to any part of the door (including hinges). Scott Brown, general manager of container security for GE Security Monitored Solutions, says the technology can also be adapted to detect holes around the perimeter as well as humans inside the containers.

PREVENTING SPOILAGE. Moreover, it can be attached to old containers, thus holding down the costs. When the container is delivered, an inspector can use a wireless reader to check and disarm the device. The wireless readers are also installed at choke points in international ports, automatically checking the container's status when it comes into range.

The device will come to market this year and is being promoted as having benefits beyond thwarting terrorists. David Wong, chief technology officer at Shenzhen-based CIMC, notes that the technology can help reduce theft, smuggling, illegal immigration, and even spoilage as future sensors may detect temperature and expiration dates on individual products. Shippers can also track the location of the container itself.

Says Wong, whose company makes about half of the world's containers: "Over time, we expect that a significant percentage of our new container sales will be TESC units as customers learn about its advanced features and how economical it will be."

Of course, even if others would prefer to make do with a cheap seal for now, GE itself can become a major user of its own technology. Brown says the company is working with U.S. Customs and Border Protection officials to test the new containers. One major goal: having enhanced security result in faster shipment and clearance times. After all, even companies that aren't terribly worried about terrorists infiltrating their shipments are eager to have smooth passage for their goods. Brady is a senior writer for BusinessWeek in New York

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