The Smart Box: SCSS

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The Smart Box SCSS

• Dr. Jim Giermanski, Chairman
• Powers International, Inc.
• www.powersintlinc.com

2
Container Security Market

• SCSS security is a new application of
  technology to a developing market
• Market definition is only now being realized
• Real cost savings are only now being verified
• Multinational players (Maersk/IBM, SAVI,
  Siemens/GE, Motorola, Powers, etc.) in this
  global market are still determining how they will
  package security with data management and
  logistical management

3
Container Security Diagram of Concept
US CUSTOMS

• Voyage history data
• Authorization ID
• Logistical data

• Authorization ID
• Activation
• Logistical data

Internet
Virtual Network
Receives
Box Energized at Origin
Container Loaded
Optional) (Vessel Satellite Tracking
Containers loaded by Gantry Onto Vessel
Gantry
U.S. PORT OF DESTINATION
PORT OF ORIGIN
__________________________________________________
__________________________________________________
___

• Device Capabilities
• Detects
• Records
• Transmits

4
Global Issues

• Terrorism One container of RDX explosives could
  level any port in the United States. If
  radioactive matter were included, it would render
  the port unusable for years
• Theft The US Department of Transportation
  stated that carriers lose 20 to 60 billion
  dollars in container cargo theft annually
• Contamination Pharmaceuticals, food products,
  and sensitive materials
• Speed The competitive edge
• Control Equipment usage and access

5
Government Programs Driving the Technology

• WCO
• New standards in 2005 (to which CBP is a
  signatory)
• Control at stuffing
• Electronic data transmission
• End-to-end supply chain control
• C-TPAT
• New rules Importers in March 2005 Foreign
  manufacturers, August 2005, Highway and Vessel
  Carriers, March 2006
• Control at stuffing
• 7-sided container inspection
• CSI (50 operational ports)
• U.S. Law (SAFE Port Act, Oct. 2006 HR-1 passed
  House, now in conf.
• EU movementsE.U Regulations 178/2002 and
  1935/2004(EU report 40008032-6-2 - Oct. 2005,
  and EADS/Powers Bremen Project, September 2006)

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Smart-Box Defined

• The answer is not just a locked door. Its a
  System!
• Coordination, Visibility, Security
• A Smart-Box System Must
• Electronically identify the authorized personnel
  stuffing and securing the container, and accept
  and report information like container/trailer ,
  booking data, and more
• Detect the breach in any part of the
  container--and more
• Report the breach in real time (or close to real
  time)
• Track the container through the supply chain
• Identify authorized personnel unsealing container
  
• Software-friendly to accommodate disparate
  logistics programs in communicating critical data

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Areas of Detection and ControlAvailable

• Geo-fencing and reporting path diversions
• Remote Locking and Unlocking
• Radiation Detection (including shielded enriched
  uranium)
• Temperature (remote sensing and adjustments)
• Vibration (vibration differentiation, e.g. from
  gantry, drayage, drilling, etc.)
• Light
• Drugs/Chemicals
• Humans

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Data Sources Handling

• From Shipper at Origin
• 1. Identity of Person supervising stuffing
• 2. Identity of Person arming the system if
  different

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Data Sources Handling

• From Bill of Lading and/or Booking
  confirmation/Dray Order
• 1. Document Number
• 2. Container ID number
• 3. Booking Number
• 4. Shipper/Exporter
• 5. Forwarding Agent and License Number (e.g. FMC
  No.)
• 6. City or Point of Origin (Stuffing)
• 7. Date of Departure from Origin if Known
• 8. Consignee

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Data Sources Handling

• From Bill of Lading and/or Booking
  confirmation/Dray Order
• continued
• 9. Notify Party
• 10. Place of receipt by land carrier
• 11. Exporting Carrier (vessel line)
• 12. Sea Port of Loading (Origin Sea Port)
• 13. Loading Pier or Terminal if known
• 14. Sea Port of Discharge (Destination Sea Port)
• 15. Declared Value
• 16. Gross Weights in Lbs. or Kgs or measurements
• 17. Description of Goods (6 digit tariff number)

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Data Sources Handling

• Examples of Customs Forms Data
• IMO number
• Nationality of Ship
• First Port or place where carrier takes
  possession
• Name of vessel
• Name of Master
• Last foreign port before U.S.
• Marks and Nos. (container numbers)
• Bill of Lading number
• Drivers identification and more

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Data Sources Handling

• System Unit ID
• Serial Number of Unit
• Location Presentation Options
• Digital Mapping
• Longitude - Latitude

13
The Market
14
Stanford University Study

• Product safety 38 reduction in
  theft/loss/pilferage, 37 reduction in tampering
• Inventory management 14 reduction in excess
  inventory, 12 increase in reported
  on-time delivery
• Supply chain visibility 50 increase in access
  to supply chain data, 30 increase in timeliness
  of shipping information
• Product handling 43 increase in automated
  handling of goods
• Process improvements 30 percent reduction in
  process deviations
• World Trade Interactive, Vol. 13, Issue 158,
  Wednesday August 9, 2006

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Pricing

• Estimated Market Pricing for Smart-Box Security
• 50 to 100 per move, depending on number of
  moves per month and level of tracking required

16
Cost vs Savings

• Savings
• Estimates range from 600 to 700 per container
  per move (Bearing Point Study, 2003)
• 1150 per move (AT Kearney Report, 2005)
• 0.8 of one percent of value of contents of
  container (Congressional Budget Off., March 2006)

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• So Whats Out there??

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Current Smart-Box Devices and Systems

• Radio Frequency Identification (RFID)
• Active
• Passive
• Cellular
• Wi-Fi
• Wi-Max
• Satellite
• Encrypted data transmission
• LEO and geosynchronous coverage

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RFID Problem Issues

• Frequencies, Protocols, and Power Standards
• No applicable ISO standards for frequencies (ISO
  18185)
• Passive-only (ISO 10374)
• No applicable global standards for protocols
• Varying power limits

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RFID Weaknesses

• Land-based Character
• Land-based antennas and readers require
  acquisition, maintenance, and security
• Reports only at choke points
• Reports only historical data (never current)
• Footprint interference
• Limited coverage
• Detonation risks

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Cellular Weaknesses

• Network Interference/Performance
• Costs
• Limited Footprint
• Regulatory Spectrums
• Wi-Max in infancy
• Four world wide regions (Developing, Africa
  Semi-Developed, China India Developed, U.S.
  most of EU Super Developed, Japan South Korea)

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The Satellite Advantage

• Provides real time coordination
• Provides end-to-end visibility
• Offers security by reporting breaches as they
  happen
• Geo-fences (self-reports its own hijacking)
• Provides law enforcement intelligence mapping

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• Current Satellite Systems

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Iridium Constellation and Gateway

• Satellite constellation
• Low Earth Orbit
• 66 fully operational satellites
• 14 in-orbit spares
• Constellation life to 2013/2014

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INMARSAT D
Satellite Constellation Consists of 3
geostationary satellites

Gateway Earth Station Locations England
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Gateway Earth Station Locations
Current Planned New York Kazakhstan Washington
South Africa Georgia Ghana Arizona Australia
Malaysia Turkey Curacao Brazil Argentina Italy
Morocco Korea Japan
Orbcom 35 Satellites (Low Earth Orbit)
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Technology

• Improvements
• Iridium
• Antenna
• Battery
• Sensors
• 20.5 x 21

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• Global Call Centers

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Platform Alarm Handling Example
Normal screen, No alarms waiting to be handled
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European Platform Alarm Handling Example
Operator has to take OWNERSHIP of the incident,
to be able to handle it
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Platform Alarm Handling Example
The operator selects the appropriate procedure to
follow
Breach, Radiological. Chemcal or Temperature
sensor alarm
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Summary

• While this new industry is being created
  because of a heightened awareness of terrorism,
  the real impact is in the development of new
  technological applications which offer greatly
  improved supply chain efficiencies, greater
  security, and ROI.

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• Dr. Jim Giermanski, Chairman
• Powers International, Inc.
• www.powersintlinc.com
• jgiermanski_at_powersintlinc.com