Magazine Article | October 23, 2006

Big-Time RFID Results

Source: Field Technologies Magazine

This 3PL (third party logistics) provider is using active RFID (radio frequency  identification) to track containers in its 70-acre yard  – achieving a nine-month payback in the process.

Integrated Solutions, November 2006

Rick Crawford,  director of operations, NYK LogisticsStories of RFID providing a quick, real payback are hard to come by – unless you look to closed-loop applications. Closed-loop RFID, meaning RFID-based tracking systems where the assets are tracked and the RFID tags don’t leave the company, are RFID applications that do provide fairly quick paybacks. This application of RFID is excellent to address inventory/asset visibility, tracking work-in-progress, and other similar needs. And isn’t visibility the real snag in a streamlined operation? RFID – specifically, closed-loop RFID – can remove that snag.

NYK Logistics, part of $3.3 billion NYK Group, is a 3PL provider that is realizing the many benefits of closed-loop RFID in its 70-acre yard facility in Long Beach, CA. NYK was able to improve turn times, reduce yard inventory, and increase daily throughput – all contributing to a nine-month payback.


NYK processes more than 70,000 inbound ocean freight containers and 45,000 inbound and outbound truck trailers every year, coordinating on-time shipments to 26 different Target DCs (distribution centers) across the United States. In its yard, NYK maintains 1,200  trailer/container parking slots and 250 dock doors and processes an average of 2,000 gate transactions daily. Prior to implementing the active RFID system, the company’s yard personnel used clipboards and walkie-talkies to record trailer locations and get directives for trailer moves. As with most manual systems, this one was prone to error. “Sometimes a driver would accidentally drop a container in slot 120 instead of slot 121,” says Rick Crawford, director of operations at NYK. “It would be recorded that it was in slot 121, so when it came time to move the container, workers would have to visually locate the correct container.” The manual system was also prone to data-entry miskeys. “The inaccuracy of data was a key driving force for us, because inaccurate data has tremendous downstream consequences,” says Crawford.


The closed-loop RFID application NYK implemented involves active RFID tags (i.e. the tags are battery powered and do not require an RFID reader to activate them) and operates at a 2.4 GHz frequency. The prevalent supply chain RFID mandates that you’re probably most familiar with involve passive RFID tags that operate at a frequency of 900 MHz. These different frequencies have specific physical properties that dictate the strength of the RFID signal and how affected the signal is by metal, water, and moving parts. The 900 MHz frequency is suitable for close-range reading and can be compromised by metal or liquids. The higher 2.4 GHz frequency is commonly used where long-range reads are necessary – such as in NYK’s 70-acre terminal facility. “When we looked at available systems to track our inventory, we knew that unless we tagged the containers and trailers in some way to know exactly what we had, we wouldn’t succeed,” says Crawford. “We also realized that 900 MHz RFID wouldn’t meet our needs. The number of readers and antennas needed to do what we wanted was too many. Also, the range of 900 MHz was too low.” Even if you’re running a 900 MHz RFID system as part of a mandate, you can add a 2.4 GHz system without the two interfering.

NYK’s RFID tracking system comes from RFID solutions provider WhereNet. The tags, WhereTags, communicate via their own wireless network, WhereLAN. The network consists of WhereNet Locating Access Points (LAPs) which support both the ANSI (American National Standards Institute) Standard  real-time location system and a Wi-Fi network for other business purposes. (The LAPs consist of bundled WhereNet location sensors with a Cisco 802.11a/b/g access point.) NYK has 35 LAPs installed in its facility. The solution also includes a Visibility Software Server (VSS), which is the location-finding middleware, and a user-interface application that presents all of the location-based data.

When a truck arrives at NYK’s yard to deliver a trailer or a full container of goods that recently arrived at the nearby Port of Long Beach, a WhereTag is affixed to the storage vessel. The tags, which are approximately the size of your palm, are inserted into fiberglass mounts that easily attach to the tops of the vessels (think of how speakers attach at old drive-in movie theaters). In the case of a truck dropping off a trailer, yard personnel at the entryway take the driver’s information, including his driver’s license number, and enter it into the WhereNet application on Symbol handheld computers. Using a mobile printer, the driver is issued a receipt that includes the tag number assigned to his trailer. The LAPs are set to “listen” for transmissions from the active tags in NYK’s yard. Using the TDOA (time difference of arrival) calculations for signals received at multiple LAPs, the WhereNet application can triangulate the signals to ascertain the exact location of the tag.

The RFID system also includes short-range  “exciter” devices (i.e. they trigger the tags to transmit their information when these devices are near) called WherePorts, to alert NYK of key yard moves. The WherePorts constantly emit a magnetic field in a controlled range of 1 to 7 meters. Whenever a tag comes in contact with that field, the tag transmits a signal to the locating infrastructure (the LAPs). This functionality is ideal for noting a movement that’s essential to a business process – such as trailers or pallets being moved  or passing through a dock door. In NYK’s place, the WherePorts are mounted on the NYK-owned trucks (operated by employees called hostlers) that shuttle trailers and ocean containers to and from warehouse doors. When the container is “grabbed” by the hostler truck, the tag will blink. The VSS is programmed to recognize when a tag transmission comes from a WherePort device, thereby noting that a key move has taken place.


NYK integrated the WhereNet yard management application with its proprietary transload system, which contains a list of advanced shipping notices, the contents of the shipment, and distributor information. By integrating these systems, NYK can apply the location data to its business processes and accurately direct hostlers to move trailers as needed for shipment via LXE vehicle-mounted terminals. NYK can use the integrated systems to flag urgent shipments and send an instant notice to the hostlers. Because the system knows exactly where the container is located, the hostlers can get the shipment out within minutes.


It took NYK only 75 days to implement the RFID-enabled yard management solution, and the company realized a payback of the approximately $900,000 solution in less than nine months. The results NYK has experienced fall under one of three positive outcomes, says Crawford. These outcomes are common to any company looking to add efficiency: accuracy, accountability, and predictability. “We increased the accuracy through the entire process, we have better accountability by tracking the moves of containers and trailers, and we’ve been able to predict our staffing needs based on the visibility we have into the needs and demands of the yard,” says Crawford. Contributing to that payback are the following improvements:

  • NYK eliminated 100% of the costs associated with manual yard searches and inventory data collection.

  • The company improved gate personnel and hostler productivity by 50%.

  • NYK reduced domestic turn time by four hours and removed an average of two days from the supply chain for inbound goods from overseas to trailer deconsolidation.

  • The time drivers spent on-site was reduced from 2 hours to 20 minutes, contributing to increased throughput of the yard by 38%.

  • NYK reduced the inventory of trailers, saving 40 to 60 parking slots in the yard, enabling the company to decrease the yard tractors from 10 to 5 in peak time and from 7 to 4 in off-peak time.

They say in real estate that location is everything, but location has quite an impact on the supply chain and inventory management as well. When you have precise inventory visibility, your business processes can’t help but become streamlined. NYK’s results should become commonplace as companies look beyond RFID mandates – and consider the benefits closed-loop RFID can provide.