Eric Dobson and Torry Shealy

Abstract - Supply Chain

The supply chain is a critical linkage for the globalized economy, but it remains a clear and vulnerable vector for terrorism, theft, and illegal activities into and out of the country. Many products seek to address this problem, but offer little physical security, and often only offer a false sense of security. Further, many of these products offer no commercial economic incentive for adoption in the absence of a government mandate. The GeoLokTM addresses these problems directly and optimally. The GeoLok is a reusable cargo and container security and logistics enhancement platform. It provides real physical security and global visibility to holistically address the issues of supply chain security AND efficiency.

Problem statement

The supply chain and the facilities that manage it are a loose sieve of security. The supply chain is the life-blood of the global economy. Approximately 90 percent of all cargo moves through the Marine Transportation System (MTS). Domestic shipping via the MTS totals over $850 billion in cargo annually and contributes $2 trillion to the U.S. Gross Domestic Product. The current volume of domestic maritime shipping is expected to double over the next 20 years. International maritime shipping is expected to triple over the same time period. Yet, this system is plagued with problems of security. Fear of terrorists using a container to smuggle a Weapon of Mass Destruction (WMD), coupled with the realities of rising cargo theft, the smuggling of illegal drugs and products into a country and smuggling weapons, money and stolen goods out of a country have raised concerns globally about cargo security.

Recent times have also seen a rise in the amount of thefts of or from shipping containers. Some of the main targets in cargo theft include consumer electronics, clothing, cigarettes and food. Many of these thefts are targeted, planned, and executed with efficiency. Many of these thefts have been organized sophisticated crime syndicates but sometimes the crimes are perpetrated by just a few enterprising crooks. In the US, the FBI estimates that $30 billion a year in goods are lost due to cargo theft. , , A recent report by the Chubb Group of Insurance Companies found that electronics, food and clothing to be the most stolen items occurring primarily at truck stops and rest areas. There have been major cargo thefts of millions of dollars in pharmaceutical drugs while billions are lost to counterfeit medications being smuggled inside cargoes. Among the Chubb Group's recommendations was to take advantage of security technology.

A potential threat to homeland security at our ports comes from the millions of shipping containers flowing into the country every year. These containers are the Achilles heel in our security efforts to defend against terrorism. Maritime targets are very attractive to terrorists for several reasons but first and foremost, they simply lie within the nexus of terrorist intent, capability, and opportunity. The consequences of an attack on a US port could cause a major loss of life and severe structural destruction, as well as grave economic damage to the United States. In the aftermath of September 11th, the U.S. economy was nearly brought to its knees by the sudden blockade of goods and people at its borders and ports.

In the event of a successful terrorist attack on a domestic or allied port, the U.S. economy would be devastated due to the shutdown of all U.S. ports. The consequences can be seen in the 2002 Labor Strike which cost the US economy $10 billion. In a case study done by the Brookings Institution, the estimated cost of a detonation of a WMD hidden in a shipping container would cost the US economy $1 trillion. The added costs to the global economy would be far worse. Our ports are an economic lifeline in the globalized economy of today. The results of such an event would be catastrophic on a global scale.

Security vs. Visibility

Cargo efficiency depends on the fluid movement of goods across borders. Security depends on access control, visibility, and monitoring of these same goods. Many times the word "security" is used to mean visibility, but they are not synonymous. Visibility can mean many things to many people, ranging from knowing the status and condition of an asset in pseudo real-time down to visibility only at widely spaced choke points. Visibility is important, but security is critical in the post 9-11 world. Most importantly, stopping loss in the supply chains should provide substantial additional economic incentives for implementation. The time has come for the term container security to be standardized. Security should mean secure from unauthorized access within the bounds of practicality. The goal of a security device must be to first deter, then delay and notify. Ultimately, security solutions must be designed to provide enough time for first responders to arrive.

There are many advantages to be gained while securing cargoes from increasing the security of the homeland to stopping loss from theft. Increases in productivity, faster transit time through ports, and reduced cargo theft all could be realized by increasing security standards in shipping. According to an A.T. Kearney report, the use of an integrated security device on shipping containers could save $1,200 per container, per transit through productivity gains. The savings that would be seen from increased efficiencies such as "reducing inventories and out-of-stocks, minimizing lead-time variance and increasing manufacturing uptime" can be achieved by automatically tracking containers.

Another benefit is improved port and terminal operations moving containers through facilities in a lean fashion. Avoidance of non-invasive inspections could have an average savings of $300 per container, per transit while not having to undergo an invasive inspection could save as much as $1000 per container, per transit. Improved security devices can foster expanded "Greenlanes" at ports for those who also uphold C-TPAT and CBP standards. The use of advanced devices to lock and track containers as a multi-layered security approach would be a major advance toward realizing these savings.

Logistics Drivers

Logistical benefits will provide the commercial economic incentives for adoption of new products and processes Assets that can't be located can't be managed or protected. Problems for companies managing containers in the supply chain include the need for:

• Asset visibility. Where is my leased or owned container now?

• Condition monitoring. How is my container now?

• Security/stop loss. What is my real inventory?

• Optimal Asset utilization. When can I return my container to duty?

• Predictive maintenance of assets. When is my next required maintenance?

Benefits Cycle

Once company's employ the GeoLok, they begin to realize many benefits including but other thatn security improvements. Benefits include:

• Improved customer service

• Stop loss

• Insurance premium reduction

• Condition and status updates anywhere anytime

• Total Asset Visibility • Load balancing

• CBP "Greenlane" Clearance

• Improved asset management

• Improved container staging

• Improved terminal operations • Seldom here in time becomes Just in Time (JIT)

• Redirection of Cargo Midstream

• Reduced inventory

• Product authenticity guarantee

Current Products

A number of companies have emerged to offer technologically advanced solutions to different problems concerning homeland security. Typical tracking and alerting systems offer little or no physical security as several studies have shown and most offer only a false sense of security. . ,

US Customs and Border Protection (CBP) mandated that all inbound containers headed for the United States must have an ISO/PAS 17712 standard container seal installed on the containers. The problem with the both mechanical and electronic "high security" bolt seals is simply that they only seal one of two doors while cable seals wrap around both doors, but both can be defeated quite easily without detection of tampering with simple tools. Also, most locks suffer from a key custody issue, and thus are not scalable. There have been modifications to some seals that include RFID packages on seals. But RFID is only provides choke-point visibility while not offering any real security.

What is needed is a "seal" that protects both doors that is not easily defeated but can also transmit information on the condition of the seal and the container in near real-time globally. The best solution is to couple the two approaches of seals and tracking by combining a truly global visibility system with a locking mechanism of sufficient resilience. The longer the device takes to defeat, the less inclined a thief is to attempt to break into a container. Time is the enemy of the thief.

GeoLok CONOPS

In response to the clear need for real physical security, TrakLok Corporation (TrakLok) is deploying the GeoLokTM, a device that quickly and easily provides for physical security for cargoes, while giving the client global asset visibility. TrakLok is commercializing this device and TrakLogTM web-portal as a complete solution to secure and globally track shipping containers for companies shipping high value, high interest, and hazardous materials. This solution provides real-time information about the condition and location of cargo and high value assets. With the GeoLok, only the right person at the right time in the right place can gain access to the container. TrakLok directly provides value to all points of pain in the global supply chain by dramatically increasing the security of containers while maximizing the efficiency of their movement and storage. By employing TrakLok's patented technology in a multi-layered security approach, cargoes can be better protected against tampering than ever before.

Important Aspects of the GeoLok include:

• Removable/reusable security and tracking device;

• Installation and removal in 60 seconds with no modification to the container;

• Ruggedized, armored, and environmentally sealed;

• GPS and dead reckoning for precise location even in absence or spoofing of GPS;

• Real-time logistics support;

• Keyless entry/denial anywhere in the world based on combination of geography (3D location), time, and authorization;

• Customizable sensor package with automatic sensing and reporting of attack, unauthorized entry, or removal;

• In CONEX visibility to sensors and real-time inventory;

• Satellite, cellular, and RFID wireless communications;

• Client configurable web-based access;

• Current location, distance, speed, ETA, movement history, and geofence alarms; and,

• Up to three years of continuous operations based on the client's desired duty cycle.

The GeoLok device provides information such as idle containers that can put into use, if a shipment is ahead or behind schedule, if a driver has deviated from course or if a shipment needs to be triaged and unloaded quickly. It also can give information on the condition of the shipment itself by communicating with sensors that detect temperature, humidity, light, even spoilage inside the container. This service includes real-time container inventory to the pallet level anywhere in the world.

TrakLog can uniquely fuse information from specific assets with transportation routes, political boundaries, census information, topography, population density, traffic, threat, and advisory warnings, etc. which allows for route optimization, predictive delivery, predictive maintenance, and other advanced logistics applications. The unique innovations of the TrakLok system are expected to initiate a paradigm shift in how intermodal shipping containers are tracked, monitored, utilized, and secured. Benefits of the system include:

1. "Greenlane" validation with confidence;

2. Forward staging of container assets with security and visibility;

3. Improved security;

a. Access control;

b. Deterrence, delay, notification ;

c. Long-term trend analysis of container behavior for advanced security applications;

d. Identifying vulnerabilities in the supply chain;

e. Multilayer security with sensors inside the box for CBRNE;

f. Providing advanced risk and threat profiling utilities to augment supply chain security;

4. Improved visibility;

a. Anywhere, anytime communications/reporting

b. Notifications, alerts, alarms;

c. Absolute position under all circumstances to support advanced logistics applications;

d. Resource allocation optimization;

5. Peer to peer networking;

a. Authenticate/validate integrity of neighbors;

b. Reduce data transmissions without reduced data granularity;

c. Mesh through a stack intelligently to reach a reader, tower, or sky access;

6. Verify authenticity, status, and condition of product;

7. Real-time inventory anywhere in the world with an audit trail;

In addition to numerous legislative actions, the Department of Homeland Security (DHS) has supported the development of tracking and security systems through its Marine Asset Tag Tracking Systems (MATTS) and Advanced Container Security Device (ACSD) programs. The GeoLok combines important aspects of several of these DHS programs in a commercially viable solution.

GeoLok Product Deployment

TrakLok has completed many rounds of field testing of the GeoLok solution. The tracking and security solution performed a series of field tests to demonstrate the ability of the product set to secure, locate, track, and report the condition of ISO compliant standard shipping containers.

TrakLok performed a controlled container test with a local company, AllState Containers, a Wal-Mart vendor. The test was configured to communicate via all three wireless mediums: RFID, GSM, Satellite links. And was placed on an ISO compliant container with a remote RFID driven temperature sensor inside the container. The GeoLok sampled the temperature sensor via the RFID link every three minutes and transmitted this information, including location, via both satellite and cellular links to the TrakLog. The test was successful and all signals were received, processed, and reported on schedule, including the temperature of the interior of the container. The Company will be performed intermodal, international tests with Kansas City Southern, Inc., EDS, Inc., and the KCSmartPort program in Quarter 2, 2009. TrakLok's products will be integrated into the Trade Data Exchange, a revolutionary development for cargo logistics information, visibility, and efficiency, equivalent to the Air Traffic Control System for cargo.

Summary

The intermodal supply chain and the facilities that support it are a critical economic link. Neither security nor efficiency can be sacrificed. Current products provide insufficient security, and often worse, a false sense of security. There is a pronounced need for a cargo and container security device to enhance both security and efficiency in the supply chain. Real physical security stands to substantially reduce commercial losses and alter the playing field for homeland security by feeding the engines that warn of threats to the homeland. In addition, total asset visibility in all modes of transportation and storage will provide the economic incentives for the commercial adoption and evolution of such products.