Electronic Cargo Seals: Context, Technologies, And Marketplace
1. The Rationale for Electronic Seals
This paper provides a concise overview of today's marketplace for electronic cargo seals. It describes the background of traditional cargo seals, then explains the rationale for electronic seals, the expectations of users, and the characteristics of such seals. Product matrices describe twenty electronic seals and locks offered by twenty-four firms. The products represent four technologies—Radio Frequency Identification (RFID), infrared, remote communications, and very short range or contact technologies. Market status ranges from active development through established use.
Manual Seals and Locks
Cargo seals are more common in international trade than for domestic shipments. This reflects the historical and continuing importance of Customs duties and cross-border smuggling. In general, locks are more common domestically, but some domestic shippers use seals.
Manual cargo seals have long been part of good security practice. Their principal purpose is to assure carriers, beneficial owners of cargo, and government officials that the integrity of a shipment is intact by acting as a 'tell-tale' for tampering. There are two major categories, indicative and barrier seals, both of which detect tampering or entry (1).
Indicative seals are usually made of plastic, wire, or strips of sheet metal marked with a unique serial number or identifier. These seals may be looped through a hasp or around locking bars and handles so that the container or trailer door cannot be opened without removing the seal. Indicative seals offer no physical protection, they simply reflect whether or not the sealed entrance has been compromised. They may be used together with locks or alone.
Barrier seals add physical protection to tamper detection and are more difficult to defeat. It usually takes bolt cutters or special tools to remove a barrier seal, not simple wire cutters or a sharp knife. Barrier seals take many forms, with the simplest using steel cable rather than wire. Bolt seals are generally more protective, using heavy-duty bolts with specialized single-use locking nuts and unique identifiers.
Barrier seals vary widely in the degree of protection they offer. Many factors affect protection, including the design, materials, and construction of the locking device, and the design and materials in the hasp, bolt, or cable. A brawny appearance does not guarantee great protection. The trade abounds with tales of popular barrier seal designs that have been copied with cheap materials.
There are no international standards for manual seals, only partial surrogates for such standards. For example, Customs agencies may approve individual products as acceptable for uses such as in-bond transits (2). The US DoD has a robust Lock and Seal program that sets standards for different types of defense shipments. The American Society of Testing and Materials (ASTM) has standards and guidelines that address lock and seal characteristics such as resistance to picking and pull strength. ASTM ratings cover a range of protection levels that, as expected, affect cost. For "ordinary" international commerce—such as shipments not affected by in-bond rules—shippers, their carriers, and perhaps their insurers define practice. For example, major container carriers largely require shippers to seal containers with "high security" bolt seals from reputable sources. These seals are often called bullet seals in the trade because of their shape.Business practices are critical to seal programs. It has been said that 'a bad seal in a good process' is better than 'a good seal in a bad process.' Good practice begins with careful loading, counting, and documentation of cargo before a seal is applied. Seals themselves should be controlled and accounted for. Seals should have unique identification numbers that are noted on the cargo documentation. The seal should be inspected and its number verified against the documentation at every hand-off in the chain of custody; initialing a bill of lading indicates taking responsibility for the condition of the cargo. Any discrepancy in the seal or seal number indicates possible tampering. It must be noted on the documentation and should cause the load to be set aside for detailed inspection and verification.
Good seal practices improve the odds but cannot guarantee shipment integrity. Clever miscreants can defeat seals in numerous ways, such as cutting holes in the side or top of a container and then repairing it. However, the effectiveness of seal programs seems more affected by poor practices than by unusually skillful criminals.
Good practice for seals is ignored to a significant degree, often for lack of discipline in the system as well as simple human error. One common issue is failure to read or note seal numbers at handoffs in the chain of custody. For example, a former container terminal manager told the author that, when he ran a terminal controlled by a container carrier, he got rid of seal checkers as an economy measure. ("Any loss was still our company's regardless of the seal.")
Good practice with manual seals can establish what entity had responsibility when a seal was compromised—it had to happen between the last time the seal was inspected and noted as intact and the time it was noted as broken, missing, or changed. However, manual seals offer no precise information as to where, when, under what circumstances, or by whom the seal was broken.
Potential Improvements from Electronic Cargo Seals
Electronics can improve the seal process in two main ways, by improving the completeness, richness, and value of information; and by improving the quality of physical protection.
Improving Information
The core payoff of an effective electronic seal program is increasing the probability and completeness of seal verification throughout the chain of custody. The appeal rests largely on the ability to reduce or alter the role of people in the cargo security process. In some cases, the intent is to take people out of the loop entirely, in other cases to increase the likelihood that people will do what they are supposed to do, and that they do it accurately. There are partisans for both points of view.
The basic function for electronic seals is to assure a complete and accurate audit trail for seal status through a shipment's chain of custody: to both determine the integrity of seal and record the time and place of the transaction. This may be done in close proximity to the seal or at some distance from it; regardless of the read distance, this basic function is an analog of the manual seal process.
One possible enhancement is to detect a breach or tamper attempt as it happens and record the time of occurrence for later reporting. The data set can be richer by adding the location of the tamper event with latitude and longitude from GPS or another source. The electronic seal may also be a platform to report other sensor data, such as light, barometric change, and radiation.
Another possible enhancement is to enable the immediate reporting of a breach or tamper event so that authorities may interrupt improper activity or act to foil criminal intent. Some technologies can accomplish this within a limited area, such as a terminal. Other technologies employ satellite or cellular communications for much wider reach.
Improving Physical Protection
Electronic seals can simply mirror traditional seals in terms of protection. Some approaches use electronics as intrusion sensors or indicative seals. It is also common to find electronic devices married to traditional barrier seal components such as steel bolts and cables.
More sophisticated—and expensive—approaches use electronics to control the operation of locks and seals. One approach programs a lat/long location or key code into the seal, which will not open until an internal or external device confirms the correct location or code. Another approach enables remote control of the locking mechanism via satellite or radio frequency (RF) messages.
Customer Perspectives
Users seem to have three concerns related to electronic seals: effectiveness, operating impacts, and cost—and not necessarily in that order.
Effectiveness addresses several components, starting with whether the electronic seal performs as advertised, which is necessary but not sufficient. Effectiveness requires that the electronic seal capabilities complement good operating practices. Smart potential users know the best electronic seals may provide nothing more than an illusion of security unless they are part of a thorough security regime. There is also a political facet of effectiveness for users: confidence that the electronic seals will satisfy the requirements of government agencies and security regulations so that shippers and carriers can continue to do business.
Using electronic seals means changing operating practices to accommodate and take advantage of the new tools. Many users think of potential negative impacts, such as increased maintenance and susceptibility to vandalism. The largest concern seems to be that expensive seals would require recycling, especially when cargo flows are unbalanced. Recycling would entail removing, collecting, and accounting for the devices, and shipping them to the next loading point.
Some users and seal vendors also see the potential for positive operational impacts. First, electronic seals may simplify seal checking and speed handling. Second, e-seals, acting as transponders, may simplify and automate general processes such as gate processing and equipment inventory.
Cost is a major concern to shippers, carrier, and economists. Freight industries run on thin margins. Seal manufacturers tell of carriers arguing over pennies in seal costs. All of the electronic seals cost more than traditional seals, most of them much more. Important trade-offs seem to be reflected in whether one chooses to emphasize purchase cost or amortized per shipment costs; Exhibit 1 summarizes those trade-offs (3).
There are also major concerns about the allocation of costs—whether they will be absorbed by the carriers, passed on to the shippers, or underwritten by governments—and whether carriers and shippers can offset them with operating efficiencies or insurance benefits. Many carriers emphasize the importance of applying increased costs uniformly to prevent some firms some getting economic advantage.
| Focus on Purchase Cost | Focus on Per Shipment Cost |
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1. There is further information on manual seals in section 4.2 of the "Study to Improve Efficiency, Safety, and Security for Loading and Transporting Military Containerized Munitions," HCI and others, November 1999. This author was responsible for Chapter 4, "Transportation Procedures and Technology." Another source on manual and electronic seals is "Report on Seal Technologies," Scott Smith for the Subcommittee on Border Security Technology Team, U.S. Treasury Advisory Committee on Commercial Operations of the United States Customs Service, Volume 7, March 22, 2002 (revised in June 2002).
2. An example of an in-bond transit is a container landed in Vancouver with cargo to be delivered to a customer in the US. Canadian Customs, traditionally concerned about smuggling, duty avoidance, or contraband, would require the container to be moved "in bond" from the ocean terminal to the US border with a very high degree of confidence that the container was not opened in Canada.
3. These trade-offs are not inherent in the measure, but in the way people use it.
