Once the container is sealed, the inspection process is automated. If the bolt is broken, the RFID tag alerts the closest reader, which alerts the port and ship operators, government agents, and anyone else with access to the data transmissions. The RFID tag also detects environmental changes inside a container and provides quick alerts to tampering, such as someone drilling a hole to introduce a biological contaminant.

Data generated by an RFID tag is transmitted to Savi's SmartChain Platform, which translates it into XML so it can be accessed by designated recipients' enterprise applications. Besides providing security alerts, SmartChain applications can use the data to manage shipments and analyze logistics patterns.

SST member TransOceanic Shipping Co. plans to make extensive use of the data. "We'll throw it out on the Web so our customers can check on the status of their containers," VP of IS Axel Kirchgessner says.

Phase two of SST's tests, now under way, will take advantage of Qualcomm Inc.'s Omnitracs satellite communications system, originally developed for the trucking industry, to enable continuous monitoring of cargo. A small, two-way messaging device containing an RFID reader and attached to a ship communicates information from containers' RFID tags via satellite to host software installed in ports.

Having real-time information on cargo contents and whereabouts enables port and ship operators to work more efficiently, says Gary Gilbert, corporate advisory at Hutchinson Port Holdings. Cargo that's inspected and sealed before reaching its departure port and monitored throughout transit will be subjected to fewer searches and holdups. "What you invest in safety and security should give you opportunities to advance in business," he says.

SST will help carriers comply with U.S. Customs requirements to file a list of all container contents 24 hours before leaving for the United States. That's one of the few areas where the U.S. government is monitoring ocean cargo. Some observers say the government, particularly the Transportation Security Administration, which was formed after Sept. 11 to protect the nation's borders and ports, has fallen short. The TSA faced sharp criticism at a recent House of Representatives' Appropriations Committee hearing for failing to secure the nation's ports.

"The TSA hasn't really exerted itself because it doesn't have the money or management focus to do it," says Sam Banks, senior VP at Sandler Travis Trade Advisory Services and a customs commissioner in the Clinton administration. "It hasn't been a player."

The agency has run small tests and is in the early stages of testing cargo security systems in the three largest U.S. ports. Operation Safe Commerce, launched in November, divides $28 million among the Seattle-Tacoma, Los Angeles-Long Beach, and New York-New Jersey ports to test technologies and best practices. The ports have collected bids for plans that include cargo-tracking, anti-tampering, data integrity, information-transmission protection, and near-real-time data-reporting capabilities.

But approvals on vendors' proposals won't go out until June or July. That's "close to two years after Sept. 11, and the TSA is just finishing the process of who will conduct the test," PB Ports & Marine's Sewell says. "It's a late start."

Supply-chain management vendor Innovative Logistics Techniques Inc. teamed with at least six other vendors on proposals for two of the ports that include Matrics Inc.'s passive RFID technology, SkyBitz Inc.'s sat- ellite-tracking system, NucSafe LLC's gamma-ray and neutron-detection technology, and Alion Science and Technology's global positioning system. SkyBitz, a tracking services provider, also is working with WhereNet Corp. on a proposal for a system they've jointly developed called Constant Visibility Solution. It combines WhereNet's local area tracking and telemetry application with SkyBitz's satellite system for wide area tracking.

The Port of Seattle is involved in the TSA's Operation Safe Commerce test as well as SST because it wants to move quickly on any initiative that will improve cargo security, port CEO Mac Dinsmore says. In SST's initial test, more than 600 containers moved through the port using the tracking network. Dinsmore says he's working with TSA, too, because of the added security as well as speedier cargo processing, which could improve profit margins. He wishes the government had taken a more aggressive interest in the effort more than a year ago, but he says there are signs of progress.

There could be added financial pressures and integration problems ahead for SST members if the TSA chooses vendors and practices different from SST's. The Port of Houston's Edmonds says he hopes the industry-government relationship is strong enough to work things out. "I feel good that our dialogue with Congress and the TSA is strong and that the TSA will see the technology we have in place in different ports," he says. Then, perhaps, there will be smooth sailing ahead. -With Charles Babcock and Beth Bacheldor

Photo of Edmonds by Paul S. Howell/Getty Images