Monday, May 23, 2005

Logistics giants voice concern over expense and accuracy

Industry giants such as FedEx, UPS and DHL do not expect to offer a full RFID service to customers for at least two to three years and will only be supporting limited roll-outs to comply with the RFID policies of retailers such as Tesco, Metro in Germany and Wal-Mart in the US. UPS has no short-term plans to deploy RFID for shipping small packages, which account for 90% of its business, said Graham Nugent, UPS strategic IS manager for Europe. However, the firm has established a group of specialists to experiment with RFID. FedEx cited the cost of RFID and its existing investment in barcode technology as the biggest challenge to adoption. "RFID is just not ready to implement," a company spokeswoman said.

In an internal paper discussing the company's RFID strategy, Sherry Aaholm, senior vice-president of international and freight solutions, said, "It would be monumental for us to replace barcode technology, so we will start off with RFID acting as a supplemental offering with some suppliers." DHL believes common technology standards will be crucial to the uptake of RFID. "We are looking to achieve an ISO standard across all industries," said Trevor Peirce, leader of RFID at DHL. To facilitate this, DHL has become a board member of RFID standards group EPCGlobal. Peirce plans to have a common RFID standard across DHL in 2006, ahead of a wider roll-out in 2007.

TNT, another global logistics company, was reluctant to talk about its RFID strategy. See all comments in the full article from ComputerWeekly.

Intellareturn comment: The first of either DHL, UPS or FedEx to integrate RFID into their shipping networks will see competitive advantage and new business. Imagine just the business to Wal-Mart or DoD as RFID easily integrates and becomes supported across their networks. Further, new appplications (temperature sensing, track and trace, warranty and returns solutions) will add value.


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