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Monitoring and Securing Cargo with Electronic Padlocks

Many of us in the loss prevention world can attribute our roots to the fundamental, foundational role of store detective. As a detective, the term continuous observation was drilled into our heads as a cornerstone of basic and essential loss prevention strategies. It is critical that we maintain these continuous observation philosophies as we develop strategies to logistically secure our homeland and our retail supply chain.

Our vulnerabilities are tremendous, in particular, with the freight sectors increasing dependence on the use of containers. The U.S. freight transportation network uses freight containers to move a staggering volume of goods each year. In 2001, an estimated 19-million containers entered the United States through water and land ports. In 2002, 17-billion tons of goods, worth over $9.5 trillion, were moved into and around our country. This translates into 320 pounds of freight moved daily for each and every U.S. resident.

Coupled with this immense volume is the exposure to enormous risks. Few containers are actually tracked as they are transported to their final destinations. The transportation routes used are often in close proximity to some of Americas most populated cities. These factors, together with our countrys accessibility, present countless opportunities for terrorist attack from both inside and outside the United States.

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Given these risks, several freight security priorities have emerged. The top priority is general cargo in international commerce. Because of the potential for a bomb in a box, the priority given to container and container ship security is understandable. Prior to September 11th, these movements received only sporadic attention.

As Secretary of Transportation Norman Y. Mineta describes the situation, Protecting seaports and port facilities against the threat of terrorism is imperative. The terrorist attacks have resulted in a renewed focus on the security of our transportation systems, and we at DOT are aggressively meeting these challenges on several fronts.

Intertwined with the increased focus on freight security is the need to keepcommerce moving and further boost productivity and reliability. In recent years, freight transportation and logistics systems have become tightly connected, resulting in efficient global supply chains. In this environment, predictability and reliability are critical to shippers, carriers, and retailers.

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As reported in LossPrevention last fall in the articles The Future of Supply- Chain Management (September/October 2002) and Securing the Supply Chain Against Terrorism (November/ December 2002), there are huge voids throughout the supply chain. In some instances, days transpire with a complete loss of continuous observation.

We have been trained to outsmart the bad guys, anticipate their next moves, and proactively prevent the worst from happening. Reducing our freight vulnerabilities must be a top priority for loss prevention management.

As in any loss prevention situation, we should secure what we can immediately. Federal officials have said that presently only 20 to 30 percent of truck trailers and cargo areas are locked consistently. Container crime is on the increase. According to the International Chamber of Commerce International Maritime Bureau, the estimated annual losses from cargo theft in the U.S. are $30 to $50 billion. As if these numbers werent enough cause for discontent, consider the fact that the U.S. Customs Service inspects only 3 percent of all incoming freight containers.

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Monitoring and Securing Cargo with Electronic Padlocks

Clearly, the extensive and readily accessible U.S. freight transportation network is vulnerable to terrorism. Many efforts are needed to enhance the security of the system. Some security needs are urgent while others are longer-term goals. Thus, the challenge for loss prevention transportation decision makers is to balance security needs with freight supply-chain productivity. Neither goal is mutually exclusive. If designed and implemented well, security measures have the potential to improve efficiency and customer service, as well as reduce losses from theft.

Necessity Is Prompting New Solutions

Imagine total supply-chain visibility, where the voids and vulnerabilities within the supply chain can be minimized. This image is reality. Recent advancements in technology have brought forth products and services that produce efficiencies that are cost justifiable.

Consider the security gaps in the supply-chain transportation process from an Asian manufacturing site to an east coast port of entry: A container is transported from the manufacturer to the shipping yard, with sometimes extended delays waiting for their ship to arrive. There can be long waits on the locks in Panama, delays at the receiving port, transfers at the rail station, and switch and load onto a truck. So goes the unobserved thirty-plus day journey.

Unfortunately, it sometimes takes disasters to stimulate innovation and awareness. Such was the case of September 11th. Following such times, security and safety deficiencies, sometimes painfully obvious, are brought to the forefront. Technology can often be quickly adapted to resolve many vulnerabilities.


In one such example, George Rodriguez, the former director of security for Overland Park, Kansas-based Yellow Corporation, made a startling observation. After his appointment to the Transportation Security Administration (TSA) as the director of cargo security for maritime/land security, he identified a major vulnerability…a loss prevention no-brainer. He observed that most containers and trailers are simply not locked.

Rodriguez has since stated, Every truck thats on the road in the United States should be kept locked, and Im steadfast in my commitment to getting that to happen. For the next several months, TSA will be talking about proposed regulations internally and with shipping and trucking companies. They will draft the actual wording on the regulation in mid-2003, followed by a period for public comment, after which it can go into effect. The bottom line will be, lock your trailers or get fined.


Apart from simple observations like that, examples of innovative technologies have emerged and are properly positioned to provide continuous observation throughout the entire supply-chain process. Global positioning system (GPS) satellite tracking is one example of a technology that cargo carriers have been using for years to improve efficiencies. These asset-tracking systems send status messages to both the motor carriers dispatcher and to the technology providers central monitoring center whenever a commercial carrier picks up and drops off a load or performs other activities while en route.

Even though GPS is moderately accepted within the freight management community, the utilization of GPS technologies within the loss prevention community has been met with mixed reviews. Many believe, including Rodriguez, that GPS is vulnerable and prone to internal disabling. Others have questioned the viability of GPS as the sole security observation source. These might be the same people that have had the experience of being lost in a large metropolitan area where line-of-site has been impeded.


The developments within the RFID world are absolutely astonishing. The size is shrinking, the cost is lowering, and the data storage capabilities are expanding. Manufacturers are embracing source-tagging principles, while retailers are quickly adapting and integrating multiple features of this incredible product into their business practices. But, regardless of its design and technological characteristics (passive or active, read-only or read/write), all RFID technologies have distance limitations, which at this time do not exceed sixty feet.

Logistics security practitioners are confronted with a challenge: to create a medium that can successfully integrate multiple communication platforms into a single device that can secure data, secure containers, be robust enough to withstand the oceans and the roads, and is totally visible throughout the entire supply-chain process.

New technologies are currently in the works to meet this challenge. One such solution can be described as a twentyfirst century padlock that not only physically, but electronically, secures cargo while integrating into a global network that allows continuous observation.

Monitoring and Securing Cargo with Electronic Padlocks

A New Scenario for Securing Cargo

The following scenario describes how this new system would work when fully implemented.

Point of Origin.

From the conveyer system, manual labor or forklifts deliver the products to the entrance of the container or trailer. If RFID technology is available, data is compiled and merged with other data, such as bar-coded or non-electronically identifiable data, via a reader portal or a manual data input process. An electronic manifest containing the electronic product code and the actual positioning of the tote or pallet on the container or trailer is generated.

This electronic manifest is combined with a universally secure software platform, which is downloaded into the electronic padlock via a direct interface or wireless transmission. The information is protected inside the lock through various security and technological measures. Tampering in any way, either physically or electronically, will cause the system to alert the environment that a breach has occurred.

The lock then secures the container, while incorporating a comprehensive electronic database of the inventory inside. Included within the database is the sequential order of items that are stored in the container as determined by time loaded, entry times, and any special handling criteria. It may also contain the dock weight and has the ability to compute the total cargo weight for analysis without opening. Sensors can be attached that will indicate whether the container has been breached either through the doors or by destructive entry.

The lock can be read at any time during travel through multiple user predetermined triggering frequencies. These frequencies can be any UHF or VHF, but in the current embodiment utilizes standard radar and laser bands. These types of frequencies were chosen for their ability to penetrate the container structure and the mass of most cargo ships. Typical range for these types of devices is measured in miles, not feet, with some variance depending on terrain and conditions.

At each step along the route, the system is updated as to the location of the cargo, when it enters or exits an area…into port, onto ship, off ship, on train or truck…until delivered to the final distribution center.

Aboard Ship.

As the container boards the ship, the location and integrity are maintained and positioning is recorded via triggering centers, which will monitor each addressed container in a random manner. These devices are able to pinpoint a problem container using frequency modulation and common mapping an algorithm for azimuth and elevation. The positioning is triangulated utilizing multipoint location receivers strategically located around the ship. A computer-generated graphic mapping display will designate positioning for security awareness and productivity enhancement during loading and unloading.

By utilizing these types of systems, additional safeguards and benefits can be realized. Control and actual position relationships between containers is a viable concern. Since the content of the containers is known, and instantaneously verifiable throughout the holding areas, safeguards can be implemented to prevent accidents. As a simple example, we know not to store vinegar and baking soda either side by side or in a stacked configuration. Such potential risks can be addressed through the relationship database that is designed to be aware of position, content, and container status.

An interface with the shipboard system and the ships external GPS communications is necessary in order to maintain route positioning and remote monitoring of the shipments. In addition to the GPS communications, the lock can be polled throughout the journey through multiple means, at any location or time, via a remote center, such as an air traffic controller, port authority, or Coast Guard, and can establish communications with the monitoring system to substantiate the integrity of the shipment.

Port of Entry.

After the transoceanic journey, and prior to entering within a threatening distance of the U.S. coastline, the ship can be scanned in its entirety to again ensure that the cargos integrity has been maintained.

Once the ship has arrived in port, all containers are once again interrogated and the electronic manifests are verified against initial manifests. The container transfer process is initialed and the containers are moved from the ship into customs possession. A fast pass inspection criterion is sanctioned and, with the container in compliance, allowed admittance.

In anticipation of possible random inspections, protocol from multiple governmental agencies, such as the port authority, customs, Coast Guard, and local and state law enforcement, will allow inspection of the container. The lock design allows remote data access and unlocking either by telephone or Internet access.

Multiple security measures and mechanisms have been integrated into the lock to safeguard against any tampering of the electronic manifest data and any unauthorized electronic entry. An audit trail of the governmental agency and agent responsible for the access is maintained. Various levels of data protection are incorporated and encrypted into the lock management software to ensure absolute integrity of all phases of the containers journey.


Once the container has cleared customs, the container is transferred from the ship to either a train or truck. When available, the lock will utilize and interface with the existing GPS systems on all modes of final transportation. In the event GPS interface is unavailable, connectivity is still maintained. By employing supplementary RF frequencies, uninterrupted triangulation is available throughout the United States and most European countries. Through standard geo-fencing techniques, triangulating the trucks exact location and interfacing this information with the predetermined travel itinerary can immediately identify any route deviation.

The month-long journey is over, and the container has reached the warehouse yard. As the container enters the yard, the electronic manifest is read and confirmed as a legitimate delivery. The designated agent accesses the web interface, remotely retrieves the electronic manifest, and verifies the lock serial code. The proper codes and passwords are supplied and the remote access lock is opened.

Monitoring and Securing Cargo with Electronic Padlocks

As the contents of the container are removed, they are placed onto the conveyer system and cross-referenced against the manifest in the same manner as input.

Thus, by entwining complex technological platforms and integrating them into a familiar deliverable, a multifaceted, highly vulnerable scenario can be resolved and true continuous observation can be achieved.

Public-Private Partnership

While, it is true that the federal government needs to play a role in devising a comprehensive approach to transportation security, the best route may be through a public-private partnership that can create a global infrastructure to gather data to pinpoint and correct possible security vulnerabilities. Only through private industry pushing full-speed ahead and with the retail industry taking a lead position, will these security and productivity-enhancing technologies ever be brought to the front line.

Those of us in the loss prevention community have an opportunity and a responsibility to step out of our box and give our country and the world a new method of securing one of our greatest threats. Our reward will not only be gained by assisting in protecting our homelands, our contributing companies will also receive a measurable return on their investments.

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