Target Considers RFID Tags On Imported Goods

The retailer is testing a combination of bar codes and RFID tags on containers of products it sources from companies around the world.
Target Corp. has committed to using radio-frequency identification tags to improve its supply chain, and now the retailer is looking at using the technology on goods it imports from overseas.

Target operates 22 distribution centers, three import warehouses, and 1,313 stores, and it buys products from 82 countries. "Many of those countries we source product from are high risk," said Caroline Landwehr, Target's global security strategies manager, at the National Cargo Security Council RFID Seminar in Long Beach, Calif., last week.

Target just completed a yearlong test using RFID on imported goods as part of the Smart and Secure Tradelanes program, an industry initiative founded in 2002 by commercial and government agencies. The aim is to develop an automatic identification and data-collection system that integrates with other networks, such as EDI, to secure cargo in the supply chain and provide real-time visibility across international shippers.

The Smart and Secure Tradelanes program, installed at more than 15 ports in Asia, Europe, Latin America, and the United States, along with Customs-Trade Partnership Against Terrorism, a U.S. Customs and Border Protection program launched post-9/11, is meant to speed cargo through customs more securely. Landwehr, who once worked for U.S. Customs, said more than 90% of imports arrive via oceanliners. Some 9 million containers arrive at U.S. ports annually. Between 15% and 25% of those containers are inspected, many because they come from non-C-TPAT members, up from 3% since 9/11.

It costs Target approximately $300 in additional labor for every cargo container that must undergo a "nonintrusive" inspection and approximately $1,000 if the merchandise is unloaded from the container for a complete inspection, Landwehr said. To prevent unexpected costs, Target "proactively alerts U.S. Customs when we recognize an anomaly in the supply chain," she said.

Midyear, Target began testing bar-code and RFID technology on shipments traveling between Manila, Philippines, and ports either at Long Beach/Los Angeles or Seattle/Tacoma, Wash. As part of that effort, the retailer worked with ADT Security Services to tag cartons of merchandise at a Manila manufacturing facility.

The goal was to identify RFID as a possible technology to reduce theft and create an electronic manifest that's now required by U.S. Customs 24 hours before a U.S.-bound ship leaves a foreign port. RFID technology is expected to bring visibility into the supply chain. Said Landwehr, "It won't come tomorrow, but eventually we will go from smart containers to smart cargo."

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