RFID Technology in Transportation and Logistics Industry

Posted by Melda Research on February 4th, 2019


The application of Radio-frequency identification (RFID) systems in various industries proves to be an important aspect of improving efficiency and service delivery. RFID systems have wide applications in the manufacturing, supply chain, agriculture, and health sectors. The RFID technology also has significant uses in the transportation and logistics industry. In every industry that RFID applies, there are advantages and shortcomings associated with its implementation in the industry processes. However, a consideration of the benefits proves to outweigh the few concerns raised in association with the implementation of the RFID systems. The paper provides a discussion of the industry problems addressed by using RFID, an overview of RFID, and the impact of implementation. Under the overview, the research paper has a description of the basics of the components and the advances in RFID technology for the transportation and logistics Industry.


Description of the business problem addressed by the RFID system

            The incorporation of RFID systems in the transportation and the Logistics Industry helps to solve several problems experienced in the industry. In thetransportationand logistics industry, the costs due to inefficiencies as a result of lack of visibility are considerable. The major problems are shrinkage, inaccuracies, and inefficient order fulfillment that have an impact on the product costs and the overall profitability. The need for visibility in the transportation and logistics industry is an important consideration. The optimized supply chain management has a basis on getting more work completed in reduced time and with fewer resources. A majority of today’s transportation and logistics businesses struggle to control their asset management and the supply chain operations. The businesses with extensive supply chain find it challenging to optimize their processes in the supply chain since it's time-intensive, largely based on manual procedures, prone to human error and increasingly costly. A focus on the issues reveals that many businesses are working to increase their assets, inventory, and shipment visibility in the every part of the chain. However, it’s verydifficult for the business to track and manage what they cannot see. Thus, it’s essential to have the end-to-end visibility that facilitates more efficient, timely decisions, and reduced delays. It also promotes prompt detection, reporting and resolution of the operational faults thereby allowing fast movement of goods in transit (Yong-Dong, Yuan-Yuan & Wei-Min, 2009).

            Visibility remains to be the main problem that the use of RFID technology helps to address in the transportation and logistics industry. The use of RFID in the industry helps to automate the counting and tracking processes required for a fast and accurate supply chain logistics. Many of the transportation and logistics companies using RFID solutions achieve a 100 % shipping and receiving, accuracy. The companies also enjoy enhanced inventory accuracy, fast order processing, and reduction in the labor costs (Ustundag & Tanyas, 2009). The enhanced visibility across the supply chain results to bottom line benefits for the RFID systems and prove them to have significant benefits.

Overview of RFID

Basics of RFID

            Radio Frequency Identification is the use of more automated systems that help to reveal what a company has and the location of the items. The technology uses radio waves to relay information between the reader and the tags attached to the items. It is an improvement of the barcode technology that overcomes the problem of the line of sight. Barcodes are not effective for use in the companies with items in different locations and situations due to the requirement of the line of sight. RFID technology overcomes the time required to count shipments, inventory, and the assets with barcodes. RFID identifies and locates every itemrequiredfortracking from the trucks to the forklifts, to the returnable transit items and the containers. There is no line of sight requirements and hence allowing the reading of many tags simultaneously (Kaur, Sandhu, Mohan & Sandhu, 2011).

            The technology uses tags or transponders that have an antenna and a chip to hold data in the form of the product number, manufacturer, location, and other details. Readers are the parts that encode the information stored on the tags. The readers can be fixed, handheld, or mobile. The barcode technology uses a one-to-one relationship, but the RFID technology use a one-to-many relationship thereby enhancing efficiency. Radio Frequency Identification uses tags use power from the electromagnetic induction from the magnetic fields generated near the reader or collect energy from the interrogating radio waves. The use of RFID technology in the transportation and logistics industry is a major boost to the automating of the processes of identification and managing the items circulating within the supply chain.

Advances in RFID

            RFID has the potential of transforming the transportation and the logistics Industry through increased transparency and efficiency throughout the supply chain. It helps to address several problems encountered in the transportation and logistics industry. RFID systems help to optimize both the asset and inventory management using internal and external loop systems implementations. Many companies using RFID systems apply it in the shipment and asset tracking and management, warehouse, and distribution management, and yard management (Sarac, Absi & Dauzère-Pérès, 2010).

            RFID solutions are currently solving the internal asset management and tracking problems for several logistics companies and departments. Tracking management helps to overcome efficiency problems, asset utilization shrinkage, increased labor costs, and lessening of asset productivity and value. Warehouse management is a major advancement due to RFID solutions. The use of RFID technology in warehouse management helps to deliver process improvements that impact customer satisfaction. It improves efficiency in the overall processes of receiving, sorting, routing, locating, and shipping. Yard management is also an important advance due to the use of RFID. Many transportation and logistics companies face several challenges in yard management due to the use of manual processes. Employees traverse the vast yard counting the number of pieces of equipment, containers, and vehicles in the yard entering the details on paper. The process is time-consuming and error-prone leading to many visibility-related problems. Thus, as a solution to the problem, RFID comes to reduce human intervention by automating asset tracking and location. It enables machine-to-machine information sharing that boosts the accuracy.

            The many applications of RFID in the transportation and logistics industry improve performance and lower the price points. RFID technology continues to evolve for use in a variety of other transportation and logistics applications. The application of RFID technology in the transportation and the logistics industry reduces theft and diversion. The high-value products circulated in the transportation and logistics industry face a significant risk of theft and diversion. However, the use of RFID identifies the points in the supply chain (Yong-Dong, Yuan-Yuan & Wei-Min, 2009).

Benefits of the RFID system

            RFID and asset tracking afford the transportation and logistics industry several advantages. The major benefits are automating yard management, optimizing container storage, optimizing ground support equipment operations, streamlining general cargo operations, and vehicle tracking. RFID helps to automate the workflows and processes and capture data on the tracked assets simultaneously. It also helps to identify the shipping bottlenecks and adjust the delivery schedule within the supply chain. The automating of the yard management helps to achieve increased visibility to the supply chain (Brown, 2011).

            RFID helps to optimize container storage that maximizes asset utilization, improves customer service, and reduces the operating costs. The strategy helps to increase production without the addition of resources. Another benefit is in the optimization of the ground support equipment operations that has several applications. It aids in status and location monitoring of all the items within the supply chain. The optimization also applies to the forecasting of maintenance and monitoring the condition of the items. Other benefits are access control, geo-fencing, safety and security auditing, battery and fluid monitoring, and reporting the key performance indicators (Oliveira, Cardoso, Barbosa, da Costa & Prado, 2015).

            The use of RFID in the transportation and the logistics industry is essential for streamlining the general cargo operations. The major benefits are in improving the control of the container freight station, supporting all the types of roll-on and roll-off vehicle operations. The technology assists in simplifying the billing systems and also enhancing the customization capabilities.

            Vehicle tracking is a major benefit associated with the use of RFID technology. The tracking capability helps to reduce the labor costs for vehicle processing, decreasing the time taken to the site and enables the yard throughput. The ability to track vehicles in real time enhances the responsiveness to the dealer and customers queries. It also enhances quality by ensuring that there are no missed steps in the processing of vehicle details and that each depart having the correct dealer specifications (Brown, 2011).

            The use of RFID in the transportation and logistics industry ensures that many different products are registered simultaneously without the need of a direct visual contact with the reader. The range of working environment for the tags is long unlike barcodes that operate within a range of 50 centimeters.

Disadvantages of the RFID system

            RFID technology is relatively expensive. The tags unit costs are cost-intensive to acquire, and considerable investments must be made in setting up the system. The application of RFID technology in the transportation and logistics industry is capital intensive, and many middle size companies may not realize its impact in the short term. Another issue is the lack of a global standard similar to that of the barcodes. RFID technology is under development, and the introduction of the global standard is far from realization. Some different specifications exist for various frequency areas thereby posing a challenge in standardization. The electronic product code (EPC) standard is under establishment though in its initial standards. The establishment of the standards will lead to the use of hybrid tags and broadband tags within the transportation and the logistics industry (Bolic, Simplot-Ryl & Stojmenovic, 2010).

            Problems may occasionally arise due to the bulk reading of a variety of chips. The use of various types of chips results to overlapping and interruption in the identification of items. Some metals and liquids also create reading problems when using the RFID tags.
Security concerns or practices associated with the RFID system

            Radio frequency identification technology is a reliable application in the supply chains and has tremendous benefits. However, its implementation in various industries faces significant setbacks due the security concerns raised. The automated supply chains mandate the necessity for data privacy, identity, and non-refutability. Thus, organizations require to ensure that the RFID technology they adopt supports the security requirements. Companies require being aware of the security risks like profiling, eavesdropping, denial of service and inventory jamming associated with the use of RFID systems. There is a push for consolidation of the RFID technology. Many standards and developers seek to gain the upper hand in own intellectual property and also business adopt the technology during its ripening period. Thus, there are severalissuessurrounding the security of the RFID technology. Companies require querying tags securely without the trace of the unauthorized parties (Suprina, 2015).

            The privacy debate is also a majorfactor of consideration in the usage of RFID. The likelihood of a business losing control of theprivacy of its information is a major risk associated with RFID. The risks exist in the form of tag sniffing of a running production line its parking lot. The wireless tag communications are subject to capture and analysis just like the Ethernet networks. The tags are subject to successful brute-force cracking using the networked computing resources thereby posing a security threat. The information kept in the RFID tags is vulnerable to alteration, corruption, and deletion. The determination of tag security lies in its processing speed and the amount of time taken to identify a secure channel of communication with the tag. The developers compromise the security techniques used to reduce tag complexity and the cost (Suprina, 2015).

            In the RFID systems, tag readers are the communications crossroads and communicate in two directions including back-end, and front end communication. The front end RFID security threats include unauthorized access to the tags, rogue, and clone tags, as well as side channel attacks. Several of the front-end threats to RFID security entail deception, manipulation, or misuse of the RF communication between tag and readers. All types of tags share a critical vulnerability to the rogue RFID readers. The rogue reader can read a tag, and record the confidential information. It can write new and damaging information to the tag. The rogue reader behaves like the authorized reader and hence the tags tend to respond to it normally. Other threats occur in the form of side channel attacks in which the rogue devices listens and get the password or data across the RF communications between the authorized tags and readers.

Impact of implementation of the RFID systems

            RFID technology and the related systems is a major boost to the transportation and the logistics industry due to its effect of improving efficiency. The technology is an effective approach to replacing the conventional barcodes that have several limitations. The implementation of the technology in the transportation and the logistics industry leads to several changes and also impacts the business operations. The implementation of the technology leads to increased visibility of the supply chain (Sarac, Absi & Dauzère-Pérès, 2010). Thus, the company can easily manage and adjust the supply chain accordingly. It also results in a reduction in the time required to process orders for the delivery of vehicles to the clients and customers. The overall work throughput is high, and the company can plan for its operations with reduced chances of losses. The cost of operation reduces due to automation in yard management and vehicle tracking. As such, the implementation of the RFID technology results in enhanced customer satisfaction.

Description of administrative procedures, human and process changes

            The process of implementing the RFID technology in the transportation and logistics industry is involving and cost-intensive. The administration team requires conducting a feasibility study of the impact of the technology in the industry. It involves a consideration of the business processes and the return on investment. The administration should get the go ahead after satisfaction that the technology will benefit the industry accordingly. Other procedures involve the preparation of the support infrastructure for the systems and acquiring as well as installing the technology.

            The automation of many of the processes in the transportation and logistics industry has an impact on the human processes. The manual activities turn to automated in which the personnel working on them tend to change roles or exempted from service. There are reduced tasks for the human effort since identification and monitoring of process is automatic by use of the RFID tags. Most of the tasks involved in the supply chain are real-time and requires less human intervention.

Changes in Organization policies or enhancements

            Every industry has a set of policies that act as the blueprints for all the operations. The implementation of the RFID technologies changes many of the processes hence requiring a change of policies. Some policies may hold, but have modifications to suit the nature of the business operations. The policy making the team for the industry has to establish new policies on the mode of operations, safety, security, accessibility, and maintenance of the system. Besides the change of policies, staff training on the mode of operations and usage of the technology is also a requirement. The staff requires an insight on the effective use of the technology to improve efficiency in the general industry processes.


            RFID is an essential technology for use in the transportation and logistics industry. At present, RFID is a proven technology that provides far-reaching benefits for the transportation and logistics organizations. Many of such businesses used RFID for asset management, warehouse, and yard management. However, the potential of RFID goes beyond the internal processes. The future of RFID in the transportation and logistics industry will involve the use of RFID tags in every link in the supply chain. The implementation of the technology faces a challenge of high cost and security issues. However, the benefits of increased efficiency due to visibility in the supply chain and the tracking of items make it a viable technology to use in the transportation and logistics industry.


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Sherry Roberts is the author of this paper. A senior editor at MeldaResearch.Com in College Essay Writing Service if you need a similar paper you can place your order from cheap essay help online.

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