According to recent research reports, the pace of electronic container tracking system installation is sluggish, largely due to a lack of widespread government mandates and standards.

“Electronic container tracking growth depends not only on mandates, standards, joint ventures and network deployment, but also on smoothing out any lingering technical issues,” said David Schrier, analyst with Oyster Bay, NY-based ABI Research. “Among the remaining technical challenges are achieving high read rates in the port environment, and routing appropriate cargo information to the customer.”

Partnerships between information technology firms and ports are the real stepping stones to widespread adoption of container tracking technology, even in the absence of government mandates, he explained.

“If the network is deployed at a vigorous pace, we could begin to see high volumes of electronic container tracking by the end of this decade,” said Schrier. “Firms that can efficiently and securely transmit cargo information to the enduser are well positioned in the container tracking market [because] streamlining accurate shipping information adds tremendous business value.”

However, the concern is that the slow adoption rate of tracking systems is going to be compounded by heavy growth in ocean container traffic in the next few years.

”The number of containers imported into the U.S. grows each year. In 2004, American businesses imported 10 million loaded cargo containers and an 11% growth rate is projected for 2005, followed by a 10% increase forecasted for 2006,” said World Shipping Council President and CEO Chris Koch in testimony before the U.S. Senate in mid May.

“Today, the only data the commercial sector is required to provide to the Customs and Border Protection (CBP) agency for screening before a vessel is loaded is the ocean carrier's bill of lading/manifest data,” said Koch. “No data is required to be filed to Customs by the U.S. importer or foreign exporter, even though these parties possess shipment information that CBP officials believe would have security risk assessment relevance beyond what is available in the carriers’ manifest filings.”

Indeed, a report by global management consulting firm A.T. Kearney conducted in collaboration with the International Cargo Security Council (ICSC) found that ocean cargo container security ranks as the No. 1 concern among executives responsible for supply chain operations at the largest global import and export companies.

Executives interviewed for the report also believe that new technology solutions, such as Radio Frequency Identification (RFID), could enhance container security as well as improve container visibility throughout the supply chain. That could also address their concerns about supply chain efficiency, said Omar Hijazi, an A.T. Kearney principal who developed the report.

“All along the supply chain economic security and physical security are directly linked,” said Hijazi. “It makes good business sense to improve security using advanced technologies such as RFID because of the associated benefits in operational and administrative efficiency.”