Originally published 2nd Quarter 2004
On June 26, 1974, a 10-pack of Wrigley’s chewing gum crossed a scanner at a Marsh Supermarket in Troy, Ohio. It was the first item scanned at a check-out using a Uniform Product Code (UPC). The UPC system revolutionized inventory management by creating economic efficiencies previously unheard of in retail transactions. Today, another important technology revolution is underway which may supersede the impact made by the UPC system as it will transform the supply chain while also significantly strengthening homeland security. The communications technologies driving this revolution are collectively known as Radio Frequency Identification (RFID).
Radio Frequency Identification is a general term for technologies that use radio waves to automatically identify individual items, and in some cases, conduct transactions. RFID "tags" consist of tiny, but durable, computer chips attached to small, sometimes paper thin, antennas. The computer chip, depending on its designed capacity (usually no more than 2 KB), stores an identifying number and important information about the item to which it is attached. The antenna transmits the information stored on the chip to a reader which typically passes the data to computers for processing.
RFID technologies have existed for many years, and currently enable, among other things, important systems and processes such as automatic commuter toll payments, building security systems, and systems for tracking assets, such as railroad cars. Recently, however, technological advances have significantly increased the flexibility of RFID devices, by increasing chip capacity, decreasing antenna and chip size and driving down manufacturing costs. As a result, using RFID technologies to enhance homeland security is an increasingly realistic government objective.
The technological improvements which are driving the current proliferation and maturation of RFID devices, could not have come at a more important time. RFID devices are widely expected to improve homeland security by allowing Customs and law enforcement officials to track and monitor containers and cargo flowing into the United States. On average only two percent of all cargo arriving at U.S. ports is searched, leaving gaping holes in the nation’s borders. Policymakers hope RFID tags will eventually enable Customs and other homeland security officials to track nearly every container – and product – crossing our borders. Such tracking would significantly decrease the risk of allowing hidden nuclear, chemical and biological agents into the country.
Some advanced RFID technologies go well beyond simple tracking of goods. Cutting edge, "active" RFID tags, known as "motes," self-organize into micro-communications networks which automatically communicate with each other and transmit real-time information to back-office servers. These "intelligent" communications systems, consisting of thousands of tiny radios, working in conjunction with each other, can enable intermodal containers and even individual products to self report everything from their origin, quantity and current location to their intended destination and expiration date. RFID tags could also notify security officials when and where a shipping container was sealed and if it was opened en route to its final destination. Other RFID tags, utilizing sophisticated sensors, could alert authorities to the presence of radiation or dangerous substances such as chemical or biological agents.
The Department of Defense (DoD) is already using RFID tags to track military containers and large assets. DoD RFID "readers" are in place across the United States, Europe, Asia and the Middle East allowing soldiers to track some supplies and equipment from the field. The Department of Homeland Security (DHS) has discussed following DoD’s lead by incorporating RFID technology into the Department’s Container Security Initiative and border crossing cards. DHS is also planning to use RFID technology in the Free and Secure Trade (FAST) Commercial Driver program which monitors truck traffic from Canada and Mexico. DHS hopes RFID will enable comprehensive reporting and monitoring of cargo entering the country without hindering traffic flow.
Successful cargo and border security initiatives, however, will depend in part on greater, if not universal, adoption of RFID tags by retailers and manufacturers, who possess, or eventually will possess, the economic incentives needed to create international RFID networks. These networks would allow security officials to monitor nearly all cargo entering the United States. Commercial RFID implementation is already well underway led by the world’s largest retailer – Wal-Mart. Wal-Mart recently launched a pilot program requiring its nine largest suppliers to begin using RFID on all pallets and containers delivered to the company’s Dallas distribution center. In addition, Wal-Mart is requiring its top 100 suppliers to begin using RFID technology next year. Prada, Gillette and the GAP, have also started to use RFID to track and manage inventory. As these major retail RFID programs grow, the cost of manufacturing the devices should continue to drop which will enable medium and small businesses, and government officials, to begin using RFID as well.
Integrating RFID into the government’s security infrastructure, including making such systems interoperable with retail RFID systems, will create numerous business opportunities. There are a many challenges ahead that must be resolved before RFID becomes a ubiquitous commercial and homeland security technology. Advanced RFID tags are currently too expensive, costing 50 cents or more, to be widely deployed on individual items. RFID devices using sophisticated sensors are even more expensive. Costs will come down with greater adoption of the devices, but the optimal price points have not been met for many products. In addition, important communications policy and regulatory issues must be resolved. Among other things, policymakers must determine proper spectrum allocations and interference thresholds, privacy and data sharing limits, technology standards and interoperability requirements.
The content of this article does not constitute legal advice and should not be relied on in that way. Specific advice should be sought about your specific circumstances.