Savi, Hutchison port group enter “smart container” fray
Savi, Hutchison port group enter “smart container” fray
Information technology firm Savi Technology Inc. and Hutchison Port Holdings, the Hong Kong-based international port group, will enter the so-called “smart container” business with a joint venture that will build and operate an active radio frequency identification (RFID)-based information network to track and manage containerized ocean cargo.
The American-Hong Kong joint venture, Savi Networks LLC, aims to improve both the security and the efficiency of international supply chains. It will compete against General Electric’s proposed tamper-alert security device and associated tracking service for maritime containers, due to be launched later this year.
Developing smart containers has been a priority of U.S. Customs and Border Protection commissioner Robert Bonner for more than a year, but the industry has been skeptical about the reliability of available technology until now.
The Savi Networks venture follows the two companies’ cooperation within the “safe and secure tradelanes” initiative, a program that allowed port operators, shippers and others to track containers and detect tampering of containers by placing electronic seals on the boxes. Hutchison has cooperated with Savi on several government and industry initiatives and the companies say they now want to use their collective experience to deploy a shared network.
Their joint venture company will build a network by installing active RFID equipment and software in participating ports around the world. This will provide users with “information on the identity, location and status of their ocean cargo containers as they pass through such ports,” Sunnyvale, Calif.-based Savi said in a statement.
Shippers, logistics service providers and transportation companies will be able to connect to the network by installing compatible equipment at their own locations.
The venture will function “much like a telecommunications network service provider,” owning and operating the network’s core infrastructure and providing information services, to be called SaviTrakT, on a per-container trip basis. The venture company will also sell RFID tags and services.
The venture company will be initially capitalized with an investment of $50 million, with Savi holding a 51 percent equity share and Hutchison the remaining 49 percent.
“Savi will take the lead in operating the joint venture and contribute a license to the software to operate the network, and Hutchison Port Holdings will provide access to its port facilities,” the IT firm said.
The joint venture will seek to establish relationships with additional port partners to further extend the network, as well as with providers of complementary technologies and services to the global supply chain.
“Global concerns about supply chain efficiency, effectiveness and security continue to grow, and must be addressed with new and better ways to manage cargo,” said John Meredith, Hutchison Port Holdings group managing director.
Active RFID tags will be affixed to containers, transforming them into “smart containers” able to communicate with the network information on location, security and environmental conditions, such as temperature, humidity and light, as well as the container’s contents.
The Savi network will be built on an interoperable architecture designed to accommodate automatic identification data collection technologies such as barcodes, passive RFID technologies and global positioning systems.
Concurrent with the formation of Savi Networks, Hutchison also bought about 10 percent of Infolink Systems Inc., the parent of Savi Technology, for $50 million. Other strategic Infolink shareholders include shipping heavyweights such Temasek Holdings, a major shareholder in PSA International, Neptune Orient Lines and Singapore Airlines; UPS; SembCorp Logistics; Mitsui and Co. Ltd.; and IT group Oracle.