LETTERS TO THE EDITOR

LETTERS TO THE EDITOR

RFID tags on containers should be required

With reference to your article regarding radio-frequency identification - global positioning of containers - you may be surprised to learn that there was an RFID system developed more than 20 years ago by a company named Amtech, today known as Transcore, and which was approved by the ISO TC 104 committee on an informational basis. The container industry at the time was convinced that this system would be adopted, and even went so far as to build all flat-skinned reefer containers with a "dimple" to accommodate the tag.

But because the TC 104 committee never mandated its use, the entire initiative unfortunately died as being too expensive and of little benefit. No container owner, whether liner operator or leasing company, was prepared to spend the then-$33-per-programmed tag if no requirement existed and if no equipment was installed at the major terminals to read the tags, although they were all ready to "bite the bullet" had the ISO forced the issue.

This system is still relevant today and would be a slam dunk if the Department of Homeland Security would mandate an RFID tag on each container. Forget about RFID-security seals - this system will not solve the global positioning problem. Each port should install one or two "reader lanes" and force the installation of the tags. Then, overnight, you would have your GPS system in place at very reasonable cost.

Shame on Transcore for not shouting louder to the Homeland Security boys. This should have been adopted years ago yet we are still "exploring" this issue when a solution is available. Did the Department of Transportation have any problem enforcing the conspicuity strips for all trailers and chassis? No. The DOT simply mandated it, and it happened. Did the Occupational Safety and Health Administration have a problem enforcing the use of semi-automatic twist-locks on board container ships? No. It simply mandated it. So what's the big problem mandating an RFID tag for each container?

Thomas A. Ewig

Chairman, chief executive

Martec International

South Plainfield, N.J.

Industry needs financing magic

Joseph Bonney's column in the July 26 issue highlighted the problems of U.S. shipbuilders and the dilemma facing Kvaerner Philadelphia, which has two ships under construction with no apparent buyers.

There are, of course, some obvious potential buyers for those ships, Horizon Lines being one. Horizon's Chuck Raymond has said what any intelligent chief executive would say about ships, knowing the Kvaerner situation. But Raymond is no ordinary chief executive. His background - as a Kings Point graduate, a merchant ship deck officer and a highly successful executive with Sea-Land, CSX Lines and Horizon - provides him with unique insight into how to operate ships profitably.

He was instrumental in Sea-Land's profitability when other carriers were fighting for survival in the 1990s. His leadership enabled CSX Lines to thrive after Sea-Land's international services were sold to A.P. Moller. And it was no coincidence that he was chief executive of Horizon when Carlyle was able to make a staggering profit by selling Horizon just weeks ago. (One must wonder what CSX management people were looking at when they sold CSX Lines.)

Raymond knows full well that newer, more-efficient vessels are needed in his fleet for the long term. But as a seasoned and knowledgeable "sailor," he also knows how to keep the older, less-efficient fleet operating. His services are relatively competitive, but could be better. His operating costs are relatively competitive, but could be better. But look at the cost of those ships - $110 million for a 2,600-TEU ship (the price Matson Navigation Co. paid for the first two ships built by Kvaerner Philadelphia) - and the debt service they would incur.

Somehow, those involved have to find a way to make the numbers make sense. With his track record, I have no doubt that Chuck Raymond has plans for how to make it happen.

As for Kvaerner and its situation, if it is going to depend on building liner trade vessels in the U.S. to earn income and stay in business, it needs the type of magic that even David Copperfield can't provide. The current costs and returns just don't justify someone going out and "mass-producing" as suggested by Kvaerner executives. The U.S. domestic offshore trades don't need massive numbers of vessels. They have to figure a way to creatively finance the transactions. Maybe Raymond has an idea or two on that.

Gary Ferrulli

Global Transport Consulting

Las Vegas