FAA Approves RFID Use for Planes on Ground

According to May 2005 memo from the Federal Aviation Administration, radio frequency identification has been granted for use with planes on the ground. The signed announcement states: "The use of passive-only devices is restricted to ground operations only, i.e., aircraft not in motion."

While RFID for in-flight applications have not been approved yet, this significant government support complements the many airports and airlines now experimenting with RFID pilots. In addition, the impending efforts with RFID mandates and passports will make this industry a leading player in RFID technology.

For now, RFID for planes on the ground will ensure efficiency and safety, providing airlines with better tools for quicker maintenance with repair parts and tracking cargo using passive tags -- areas that Intellareturn focuses on. FAA officials also don't anticipate any safety or privacy issues with this approval and utilization, just potential hardware or software malfunctions that any technological solution can be exposed to.

RFID and Merchandise Returns at Sears

According to a recent InformationWeek article, SEARS is using RFID to improve shipping accuracy and productivity at a merchandise-returns center in Atlanta. The retailer is one of the first to experiment with RFID for returns process.

William Littlejohn, manager of project operations at Sears, says: "We're still in the process of doing the analysis and gathering the data, but we can see a distinct difference between facilities that don't have RFID-enabled shipping processes with those that do."

Intellareturn Perspective: Intellareturn believes this early testing will generate big rewards for return cost reduction and better vendor relations at Sears. We look forward to seeing how this develops and actually expands the use of RFID throughout the operations and customer services at the company.

Bill Razzouk Joins SmartLabel(r) Firm as CEO

Bill Razzouk was the former Chief Operating Officer and Executive Vice President at Federal Express, spending thirteen years at the company. He was integral in building the sales and marketing organizations that transformed Federal Express from a $700 million dollar company to an $11 billion dollar industry giant. Now, with the help of mega-search firm Heidrick & Struggles, he's been hand-picked to lead Newgistics in their next phase of expansion.

Newgistics offers a great barcoded return solution for returns processing that has snared many new clients. The company is growing rapidly but lacks an RFID solution to ensure long-term
growth. Similarly, it is having difficulties with receiving approvals on U.S. filed patents that can impact it's long-term competitive advantage and attracting new investors (i.e. one of its most recent patent applications received a Final Rejection in June 2005).

Intellareturn Perspective: We believe that Newgistics' hiring of Bill is a great move to make an IPO happen within 18-months. Alternatively, Bill may use his strong connections with UPS and FedEx to explore a a strategic sale to one of them or, more likely, DHL -- which already has established a returns service co-marketing partnership with Newgistics under its former CEO's leadership.

RFID Patent Facts

In perusing the United States Patent and Trademark Office site we learned that UPS has 15 pending U.S. patent filings incorporating Radio Frequency Identification, while FedEx and DHL have no active ones we could find or identify. The UPS intellectual property leadership combined with the UPS Strategic Enterprise Fund investments in Savi Technology and Impinj demonstrate their committment to RFID and new related business models.

UPS: Solutions and Initiatives (Industry Presentation)

Following DHL's announcement to RFID-enable it's supply chain, Bob Nonneman, Industrial Engineering Manager at United Parcel Services (UPS), continues to lead the company's RFID packaging initiatives. You can follow the progress of Bob/UPS and their pilot tests whenever he speaks at industry conferences.

Next up: June 28, 2005 at the IDTechEx Smart Labels Conference
Visit http://www.idtechex.com/products/en/presentation.asp?presentationid=242 for more information.