RFID in the Postal Service

[10/21/05] Dr. Peter Harrop Calculating cross charges It all started with active tags being put in a random sample of postal packages, including letters, from many countries to assess the level of service so cross charges between the postal services of different countries could be equitable. This is still done to this day. However, RFID is now used by postal and courier services for many other purposes. Postal bags Postal bags are often tagged with active or passive RFID tags to keep track of them. The Italian Postal Service has been a leader in this and other uses of RFID in the postal service. RFID recorded delivery In late 2005, Microsoft started marketing its new RFID system for postal and courier services at a stamp exhibition in Taiwan. It wishes to persuade the Taiwan government postal service with a device it claims can ensure the smooth, safe and recorded delivery of tagged packages and parcels. Microsoft marketed the new RFID package at the Taipei 2005 - 18th Asian International Stamp Exhibition. The key sponsor of the exhibition, Taiwan's Chunghwa Post company, is considering whether to use the Microsoft RFID package and a decision is expected soon. Microsoft has held talks with India's postal service about using the RFID system. Microsoft India says these talks are still in the early stages. No tender offer for the system has yet been issued. If RFID were deployed by India's postal service it would probably be used for its premium, SpeedPost service. Microsoft has developed the software for the RFID system and is working with hardware companies, such as Texas Instruments for the inlets and other components. RFID for orders online Microsoft also offers website software that allows post offices to take orders online. The RFID tag is about the size of a playing card, with a sticker on one side to hold it in the package. It contains information about the package's contents, the sender and its destination. RFID returns According to Direkk, UK, a consultancy on e-commerce, returns cost up to 2 times the outgoing cost of an item. Around 6%-9% of internet orders are returned (though this is much higher for clothing), and about 5% of these are due to incorrect picking - up to 0.5% of sales in total. Further, delays in delivery can significantly increase return costs. FedEx's NetReturn API shipping network has therefore begun a unique project with Intellareturn Corporation, USA, to reduce the cost and labour involved in handling returns. Any RFID label registered in the Intellareturn Smart Return Service database links to a website that triggers an automated FedEx pick-up. The courier knows what the item is, who owns it and where it needs to be shipped to for return. All billing, label generation, online e-mail notifications and tracking is provided through the FedEx network. The Smart Return Service integrates product identification, warranty administration and return logistics. RFID labels are used to automate identification and trigger the return of any item. See figure 3.19. Intellareturn aims to create a seamless return supply chain network, where products or product packaging carton they contain, are affixed with labels that wirelessly transmit their identification to the Internet through RFID smart labels. Real-time interaction between products and logistics networks via the Internet or local area network (LAN) help reduce expense in lost, stolen, wasted or delayed product returns, improving the efficiency of the supply chain. The smart labels have a "Return ID Stamp" which is used to track the item as it is being returned. Elliot Klein of Intellareturn told IDTechEx, "This is especially effective for lost & found systems and methods. For lost & found applications, the core benefit of our system and method serves as a registration incentive to register a new product warranty. The "finder" of a missing item with a Return ID Stamp is encouraged to contact us (or FedEx, as a potential example, for item pickup) based on the "reward" notice on the label. Intellareturn enables low-cost automated methods for returns-in essence, building the basic communications protocols of the Internet directly onto low-cost labels. Currently, we are focusing on passive tags but are in discussion with some vendors who have innovative, low-cost active tags." The Intellareturn network builds on the existing infrastructure of express parcel carrier and airline transportation networks to help provide a global, real-time product registration, payment, tracking and product return solution. Each Return ID Stamp label connects to a database with comprehensive information about the object, including owner name, address information along with other data specific to customer needs. Such additional information can include flight/travel itinerary for airline baggage tag applications, repair or service part number, product purchase date, return shipping or EDI instructions, or the serial number for a portable computing device or other product that needs return service under warranty. Klein said the service platform is fully tested and market-ready following three years of market development and testing. "At this time, we have full flexibility to establish strategic alliances and market plans with any logistics carrier(s). Our relationship with the FedEx NetReturn service serves as our proof-of-concept partner. We continue exploring opportunities with leading parcel services to integrate the Intellareturn strategy and solutions for RFID and smart labels into their business plans for new customer services and internal operational efficiencies. There are concerns about price and standards but we're confident these are being addressed with industry-wide initiatives under way. In the near future, we anticipate market opportunities for Intellareturn Smart Return Services, and RFID smart labels in general for the express parcel service couriers and other shipping networks to be significant." Deutsche Post/DHL Europe Deutsche Post of Germany has bought courier company DHL so now it ships about 27 billion items yearly, DHL being responsible for one billion yearly. DHL has carried out successful item level tagging using 13.56 MHz tags from Identec and wishes to tag everything in this way using EPC coding. In 2005 it has been assessing bids for a 1 billion requirement for HF tags and associated systems. Cost reduction and service improvement are the main objectives but crime reduction is also a possibility. DHL wish to eliminate barcodes and it may roll the scheme out fully by mid 2005. Both read only and read write tags with 96 bits of read only ID have been used so far. Speaking at Smart Labels USA 2004 Trevor Peirce at DHL said they intend to roll-out using 13.56 MHz which they are satisfied will be robust enough for their purposes. RFID electronic Time Temperature Indicators (TTIs) have also been used. UPS trucks UPS is a follower in RFID. The company began a series of pilot tests in 2004 ion both its package delivery business and its supply chain solutions business, which serve many customers who must comply with upcoming RFID mandates. In one trial passive RFID tags are replacing bar codes on reusable fibreboard tote boxes used to shuttle packages through UPS's automated facilities. The objective is to extend the life of the tote boxes and to reduce the read-failure rates of the barcodes, which tend to wear off over time. In another pilot, RFID tags have been attached to UPS trucks in an effort to monitor cost-effectively vehicle activity moving on and off the property at three different locations. UPS tote boxes Much of the work to date has involved tinkering with the details of specific applications to achieve the right costs and performance trade-offs. For example, UPS has tried to balance the longevity of the tote box with the life of the tag, or to balance distance from the reader with the speed of the truck. Another challenge has been reducing the high rate of reader failures. Integrating RFID with UPS's software systems has not been difficult because, unlike most software applications, UPS's code is already designed to identify and track individual items uniquely and capture all the data associated with them. UPS sees many opportunities to expand its use of RFID, particularly by starting to tag sensitive items. The handling of hazardous materials and high-value items, which currently require more human involvement are a priority here. Underwhelmed by RFID for item level UPS has trialled RFID for individual postal packages but has concluded that read rate is not better than its current 2D barcode system whereas, for it, RFID system costs, including tags, are higher so it is not proceeding with item level tagging of postal packages at this time. However, it is keeping a watching brief on RFID. To find out more about RFID in the Postal service, attend Smart Labels USA 2006. Being held in Westin Copley, Boston, MA on March 28-29 2006, visit www.smartlabelsusa.com for more information or ring +44 1223 813703.