Radio frequency identification (RFID) is a technology trying to catch up to its potential. In fact, it could forever change the way containers, or any other item for that matter, are tracked across supply chains.

While many container companies already offer RFID chips with their returnables, the cost and reliability are still not attractive enough to penetrate the marketplace. Progress, however, is being made.

'The cost of using RFID has gone down 75% while the accuracy is twice as good as it was 5 years ago,' says Kim Jacobs of Menasha Services/Orbis. 'In another 2 or 3 years, you will see systems that nail both cost and accuracy. And when that happens, it will be the biggest quantum leap in information transfer we've seen in 20 years.'

Unlike bar codes, which are the most widely used identifying and tracking technology, RFID uses electronic chips embedded into containers or attached directly to products. The chips receive and transmit information, such as the product's stock keeping unit (SKU), current location, where it has been, and where it is going. Read-only tags accept information just once, while read/write tags can be updated. An entire truckload of tags can be read within seconds, far faster and more cost effective than scanning individual bar codes. Most tags can be reused.

Some major tests are currently underway that show the promise of RFID. One is being conducted by The Massachusetts Institute of Technology and Wal-Mart (see "Click on" below).

To gain wide acceptance, the price has to come down from the current $1-$5 per chip to units that cost pennies, say industry experts. Furthermore, reliability has to increase. Georgia Pacific, for instance, has discovered through its testing that two chips per container improve accuracy dramatically. MIT reports that the use of multiple readers also increases the ability to collect data.

'RFID is more expensive than bar codes, so the justification depends on what you are putting into the box,' says Jeff Hehir of Georgia Pacific. 'I think the first breakthrough in use will come with time-sensitive and valuable products.'

Hehir says there are several groups that will push advancement of the technology. Retailers will want to better track their supply chains. Government regulators may wish to track the full transit path of products that may be subject to recalls. Growers may also wish to use RFID to guarantee the freshness of their products. And lastly, container pooling firms will see value in ensuring that their containers remain on the move, allowing greater value of their main assets.

Standardization of RFID technology will also play an important factor in acceptance and their greater use in container tracking. New ISO standards are being discussed now that will allow chips from one manufacturer to talk to receivers from another.

'All of the major RFID manufacturers see the need for a common standard,' adds Steve Halliday of the trade association AIM. He serves on the committee drafting the standards. 'I think the future of RFID is very positive right now.'

Click here for more information on RFID testing at MIT