Intelligent Protection - The next generation of Intermodal security

Intelligent Protection

The next generation of intermodal security

Intelligent ProtectionCargo theft is the costliest crime in America, reporting an estimated $25 billion in merchandise stolen, with incidents on the rise, according to the International Cargo Security Council. Moreover, the American Association of Ports Authorities cites that there is $60 billion in indirect costs associated with cargo theft.

Insurance prices for shipping high-value loads are on the rise. In many cases, 10 percent of the value of the cargo is paid to insurance companies; this figure may equate to millions of dollars. Why is it so high? Because most shipping containers are handled by up to five different intermodal freight transportation methods from origin to destination. This makes it very difficult for insurance companies to discern when and where a theft or damage incident took place and therefore, it is difficult to hold a particular transportation entity liable for the loss.

The Costly Issue of Cargo

Founded in 1995, Charleston, S.C.-based UEC Electronics, LLC (UEC) is one of more than 250 defense contractors providing next-generation technology for both the private and public sectors. A female-owned, small business, UEC specializes in a variety of engineering expertise, including security; electronics; hybrid power generation; smart power distribution; and automated systems for military, aerospace and industrial customers. Currently, UEC is working toward a solution for one of the security industry’s most pressing problems—intelligent asset protection.

When a container arrives at its final destination and the purchaser discovers pilferage, they file a claim. Insurance companies respond the only way they can— they pass the costs of losses on to their customers through increased premiums, who in turn, pass it on to consumers.

Not only is unsecure cargo costly, it also is dangerous. Terrorist activity resulted in the creation of the Department of Homeland Security, which clearly recognizes the vulnerability of our seaports. A decade ago, approximately 2 percent of the estimated 252 million container shipments worldwide were inspected, with approximately 17 million containers entering the United States on an annual basis. The United States has 360 commercial ports and 3,200 cargo and passenger handling facilities, according the U.S. Coast Guard. This provided terrorists a 98 percent probability of success to use a container as a potential bomb or for carrying nefarious supplies into the country.

As a result, custom authorities expressed the need for a means to implement Electronics Declaration and Electronics Acquittals for inbound freight to enable a streamlined process to ensure that the contents of freight containers correspond with manifest changes. In addition, the physical status of container sealing mechanisms can be automatically detected before goods are cleared. Goods destined for export will be detected at border posts and sealing mechanisms verified against inbound status enabling identification of discrepancies.

Traditional bolt seals and padlocks for shipping containers and cargo trailers are a mere bolt-cutter away from easy access and do not address today’s security challenges, which include uncontrolled or poorly controlled access to cargo (assets), unclear responsibility for shortage and damage; cargo access required by multiple disparate parties; poor or non-existent tracking of goods; lack of cargo access traceability; expensive key management and lock replacement; secure oncontainer manifest storage and the high cost of frequent customs inspections.

With a combination of innovation and current technologies, this vicious cycle can now be managed more effectively.

A ‘Core’ Solution

Philip Ufkes, principal of Security Enhancement Systems (SES), worked with UEC Electronics to develop a patent-pending, keyless, electronic-locking device called the Core Defender. This newcomer in the market is the product the cargo, transportation and storage markets have been longing for. The device combines a rugged, stainless-steel, dual-ratcheting lock mechanism that fixes easily to and secures the keeper bars on any standard shipping container or cargo trailer with intelligent keyless access control, providing a real-time log of container lock, unlock, or tamper events, including the date, time and operator.

The base Core Defender incorporates two levels of intrusion and tamper detection. The novel, secure, keyless access ensures that when international shipment is required, the load is accessible by customs and border authorities, and a record of that inspection is maintained digitally along with the electronic manifest. The incorporation of an intelligent security device is a means to not only discourage theft but also determine a geographical location where a theft occurred and specifically identify anyone who had access to the cargo.

Why is this product and technology a significant game changer? Theft has been an unresolvable, uncontrollable and an extremely costly occurrence in the asset transportation and storage industry. Disgruntled drivers, unappreciated dispatchers, and current and former employees who are supplementing their incomes are most often to blame. Electronic access traceability combined with dynamic access codes provide leadership with the tools to quickly identify and proactively prevent problems before they impact their customer, insurance premiums or the bottom line.

How does this technology work? A Dynamic Access Code (DAC) is transmitted to the device via secure encrypted Bluetooth technology. Once authenticated, the operator may lock or unlock the device or download the electronic manifest. Keys and combinations are ancient technology. Smartphones have become a ubiquitous do-all computing device for various applications and are an essential part of our daily lives. Core Defender uses the operator’s cell phone or any smart device as a highly secure access channel—no cellular signal required.

The DAC is provided automatically by a resident software app that accesses the central system via a secure internet connection. Optionally, when no internet access is available, the company dispatcher can provide the required code. A record of the code acquisition is maintained for traceability. The DAC is only valid for a predetermined period of time and is unique to that particular device; optionally, the device may be configured with a static access code. A simple system entry removes the operator from the list of authorized users; no keys to collect, locks to re-core or replace. Expensive and burdensome key-management logistics are a thing of the past.

In addition to the features above, lock, unlock and tamper events are logged throughout transit and are available for review at any time by authorized staff. The manifest is safely and securely stored electronically within the lock—no more lost or damaged paperwork. The security products provide real-time visibility of the chain of custody and provides a comprehensive audit trail. This is useful for the DoD and other government entities where asset security is a significant issue and challenge. It also provides a cost-effective, secure, auditable, easily managed, enhanced security system—an unseen product eagerly needed by the market.

Beyond the Product

UEC seeks to combine its engineering and manufacturing expertise to provide its customers with a unique opportunity to realize the full potential of their intellectual property, minimize schedule and development risk, and improve product quality.

Entrepreneurial product development, such as the Core Defender, provides a creative departure from EIC’s primary DoD and aerospace engineering and manufacturing activities. We continue to diversify our work to include private sector projects. Key to UEC’s success is using our in-house engineering talent and sourcing from Charleston’s growing pool of engineers, which ranks among the nation’s fastest growing. UEC’s cargo theft protection is an example of how the same workforce that produces technology for the military also is providing innovation for private industry.

This article originally appeared in the July 2013 issue of Security Today.

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