The Powers Secured® Chain-of-Custody Patent (US 7,154,390 B2) and Its International Application of the Authorize Person in Security and Trade Facilitation
Since 9/11, the movement to secure the global supply chain has been increasing, not just in the United States but also around the world. Consistent with all these international and U.S. movements in looking at security from stuffing the container at origin by verifying its contents and monitoring its environment to destination, Powers International developed a patent now issued in 36 countries that incorporates the Authorized Person and its related electronic function by embodying it into the new "chain-of-custody" process for securing the international supply chain: the Powers Secured® System (PSS)Chain- of-Custody Patent (US 7,154,390 B2).
Consistent with all these international and U.S. movements in looking at security from stuffing the container at origin by verifying its contents and monitoring its environment to destination, Powers International developed a patent now issued in 36 countries that incorporates the Authorized Person and its related electronic function by embodying it into the new "chain-of-custody" process for securing the international supply chain: the Powers Secured® System (PSS)Chain- of-Custody Patent (US 7,154,390 B2).
Significant Patent Features
Its significance is that it is a utility or process patent which incorporates the following elements as among its 35 claims.
- It Provides Unique Code Identifying Accountable Person Confirming Contents and Activating Monitoring Unit at origin, ( US 7,154,390 B2; pp. 3-4)
- Transport Container Carries Data to include Contents and Logistics and Shipping Data such as Container Number, Shipper, Consignee, Vessel (if carried by vessel), Master, Ports of Lading and Discharge, etc. and Other Analogous Data, (US 7,154,390 B2, p. 3)
- Detects Breach into Container, and Communicates Date, Time, Location and Duration of Access into Container to Interested Parties, including Owner, U.S. governmental agencies or equivalent foreign agencies, etc., (US 7,154,390 B2, p. 4.)
- Offers Various Sensors such as Infrared Motion Sensors, Pyroelectric Sensors, Sound Sensors, Locations Sensors (such as GPS), Temperature Sensors, Vibrations Sensors, Magnetic Switches, Radiation Sensors as well as Sensors that are Sensitive to Chemical, Strain, Electrical, Magnetic, Motion, etc., Changes Associated with the Transport container or with the Environment within the Interior of the Container, (US 7,154,390 B2, p. 3.)
- Offers Electronic communication without limitation to radio-frequency, low-earth orbit, geosynchronous satellite communications, mobile telephony, etc., (US 7,154,390 B2, p. 3.)
- Provides Deactivation Code to Identify Authorized Individual and Place Accountability on that Person to Confirm Contents of Transport Container at Intermediate Point within and at Final Destination of Shipping Container (US 7,154,390 B2, p. 3.)
There are other features allowing the inclusion and carriage within the container’s container security device (CSD) logistics data describing the cargo. In addition to benefit of knowing the identity of the actual person who verified the contents of the shipment, the Powers Secured® patent also provides information on the shipment, itself. The data key, whether a card, cell phone, or electronic key designed by the shipper for use in global or domestic shipping can have data corresponding to the shipment contents which are entered into the CSD within the container or trailer at the same time the identity of the authorized person enters his or her identity via the data key system used. Though this activation code the container, itself, carries these logistics data on the shipment and its intended movement. This allows the authorized person at destination to also know electronically what was actually shipped from origin regardless of any paper documentation used for Customs or other purposes.
To communicate data corresponding to the contents of the container, a configured activation/data key can show in addition to the cargo and quantity, the transport container number of the container carrying the cargo, the cargo's manifest, the name of the vessel, the nationality of the vessel, the port of loading, estimated time of departure, and even voyage number. Analogous data can be compiled for other types of transport containers, such as trailers, railcars, transport containers traveling via air, etc.
In summary, the patent through its Claims 9, 15, 16, 18, 34, 35 provides for the use of data corresponding to the contents of the container and manifest, booking, or other data connected to the shipping container's identity and voyage. The patent makes it clear that these data are able to be communicated and received at origin, destination, or during its voyage to destination.
What This Patent Becomes and Solves
- Transport Container Becomes Equivalent to a Registered-Certified letter with real-time monitoring
- Solves Transshipment Vulnerabilities and Risks
- Solves Outbound Vulnerabilities and Risks
- Solves In-Bond (In-Transit) Vulnerabilities and Risks
- Solves Supply Chain Counterfeit Vulnerabilities and Risks
- Intelligence Mapping
- Asset Recovery
World Wide Compliant with Regional Customs Programs such as
- C-TPAT (United States)
- AEO (European Union)
- AEO (Japan)
- AEO (Korea)
- PIP (Canada)
- GLP (Jordan)
- SES (New Zealand)
Compliant with International Standards
- World Customs Organization (WCO), (2005)
- Single Window approved in U.S. (2006)
- ISO 28000, Security Management System for the Supply Chain (2007)
- Transported Asset Protection Association (TAPA) issues Freight Security Requirements, (2001)
- Kyoto Convention ICT Guidelines , (2004)
- International Maritime Organization (IMO) Creation of International Ship and Port Facility Security Code (ISPS) (2004)
- UN’s Single Window through which “…trade-related information and/or documents need only be submitted once at a single entry point to fulfill all import, export, and transit-related regulatory requirements.” (2004)
- International Trade Data System (ITDS) establishes a single portal system: ACE and the E-Manifest
- ACE (Automated Commercial Environment) Eventually Combining:
a) Automated Manifest System (AMS)
b) Automated Broker Interface (ABI)
c) Automated Export System (AES)
d) Automated Commercial System (ACS)
PSS Legal Benefits as a Chain-of-Custody Managed Global Supply Chain
Containers equipped with the Powers Secured® System provide the electronic equivalent of a receipt showing evidence of contents and evidence of shipping. The evidence is provided through the use of any one of many specialized electronic entry techniques usable only by a designated authorized agent at the point of origin. Similar to the law enforcement officer collecting evidence, that authorized agent of the shipper who verifies cargo and quantity and arms and seals the container is electronically officially identified as the Authorized Person becoming the first link in the chain. At the time the electronic data device, with or without biometric information, is activated at stuffing, there is a data transfer of logistics and booking information agreed upon by the shipper and consignee, to include information for CBP and other authorities as necessary into the smart container's hardware. Within seconds of the insertion, the activation of the system takes place. The identity of the accountable person verifying the cargo's accuracy, and any logistical data agreed upon, will automatically be sent transferred from the container by satellite or cellular communications. From that point on, the container will be treated as evidence in a crime scene. It will be monitored as to is location throughout the voyage, its access, even its internal environment if so equipped, all the way to destination where another Authorized Person opens, verifies and removes cargo. Any deviation from any form of monitored control will be reported by the container's security device (CSD) to a control center where it will be stored and available as Electronically Stored Information (ESI), now discoverable as evidence for both civil and criminal law enforcement action. Thus, the PSS provides:
- Evidentiary Value;
- Legal Defense Value; and
- Prosecution Value.
Its Financial Benefits
Perhaps one of the most significant attributes of the Powers Secured® patent is its value in increasing the private sector's bottom line benefits. It is not an expense. It is an investment. The benefits of expedited shipments, alone, vary from $600 to $700 per container per move (Bearing Point Study, 2003); and $1150 per move (AT Kearney Report, 2006). Therefore, if a smart container costs you an additional $100 from origin to destination, and you save $1000 on the expedited treatment, what was the cost? Costs are associated with the loss or delay of cargo; diversions; increased insurance premiums; supply chain disruptions; increased labor to reship or replace the cargo; business downtime; loss of seasonal promotions; or the costs of the sale. Benefits include minimizing financial risks, reduced inventory carrying costs, protection against counterfeiting; reduced or eliminate diversion costs, reduced out of stock, and reduced insurance costs.
A Stanford University recent study revealed that quantifiable benefits of security controls and technology included:
- Improved Product safety – 38% reduction in theft/loss/pilferage, 37% reduction in tampering;
- Improved Inventory management – 14% reduction in excess inventory, 12% increase in reported on-time delivery;
- Improved Supply chain visibility – 50% increase in access to supply chain data, 30% increase in timeliness of shipping information;
- Improved Product handling – 43% increase in automated handling of goods;
- Process improvements – 30% percent reduction in process deviations;
- More efficient Customs Clearance – 49% reduction in cargo delays;
- Speed Improvements – 29 % reduction in transit times;
- More Resilience - 30% improved response time; and
- Higher Customer Satisfaction – 26% reduction in customer attrition and 20% increase in new customers.
Other sources offer different, but compelling, benefits to using smart container technology to include the U.S. Congressional Budget Office, in March 2006. In the 2006 A.T. Kearney Report, respondents stated that “…they need real-time data for accurate visibility into their supply chains.” Since accurate data may not exist within the current logistics industry, smart boxes can provide accurate and sometimes missing data deemed important to shippers. The report further revealed that the U.S. Department of Defense is now utilizing smart, but not the smartest containers have “…reduced overall losses (military supplies) to less than 8 percent.” There is a favorable bottom line to using smart boxes based on speed alone. The A.T. Kearney, Bearing Point, Stanford, and Congressional Budget Office all, in one way or another acknowledged that control and speed through the supply chain, and especially through ports, pay off.
A Summary of Some Technical Applications, Features, Attributes and Offerings of the Powers Secured® System Depending Upon CSD Design, Capabilities, and Capacities
- Detection of breach into any location the container (not just through doors)
- Notification of that breach in real time 24/7
- Location of container at any time 24/7 at the discretion of the user
- Automatic secure transmission of trade data (for instance, the 18 elements that are contained in Customs Form CF-1302) when queried by user or by Customs and Border Protection (CBP) depending on user and CBP relationship and Container Security Device (CSD) hardware and software set-up
- Satellite/Cellular communication (secure data) from the container in all major global trade lanes where constellations exist, except in hole of ship or when stacked under container in highest row. Transmission not limited to “line of sight” required by geosynchronous satellites
- No easily visible antenna
- Active RFID breach detection with multiple sensors depending on user, i.e. temperature, radiation, explosives, etc.
- Multiple means of notification of breach and location (internet, telephone, mobile phone, or (GSM or GMSC or GPRS gateway such as GGSN)
- Estimated 5-year battery depending on message traffic and CSD hardware
- Easy plug-in and security for use with any logistics software package
- Identification of company employee verifying contents of container at origin and destination
Barchi Peleg-Gillae, Gauri Bhat, and Lesley Sept, Innovators in Supply Chain Security The Manufacturing Institute, Stanford University, July 2006, p. 4.
Smart Boxes, A.T. Kearney, July 28, 2006, p. 1.
Smart Boxes, A.T. Kearney, p. 2.
PSS Benefits to the Shipper
- Confirmation and electronic certification of proper cargo and quantity leaving facility
- Control of access and entry into the container
- World-wide tracking and location of container for security and asset management
- Identifying and placing into the supply chain the identity of the company employee who certifies contents of container at sealing at origin and opening at destination (end-to-end visibility)
- Lower insurance costs
- Knowledge of departure from foreign port to destination port
- Knowledge of carrier's sail or over-the-road or rail transport time
- Expedited entry of cargo by CBP and faster through-port time
- Data-base intelligence identifying weak points/delays/security- risk areas in supply chain
- Verification of compliance with Incoterms® 2010, and UN Convention of Contracts for the International Sale of Goods (CISG), specifically Articles mandating accurate cargo and quantities to be shipped under contract
PSS Benefits to Consignee
- Cargo identification and quantity verification and electronic certification at stuffing
- Knowledge of departure time
- Location of container throughout the supply chain
- Knowledge of opening or surreptitious access into container
- Third-party verification of all supply chain data elements and reports
- Knowledge of arrival
- Lower insurance costs
- Verifications of Compliance with CISG importer provisions
- Increased or enhanced knowledge needed for 10+2 Program Importer Security Filings
- Enhanced knowledge of shipper and carrier performance
PSS Benefits to the Carrier
- Access control into container and knowledge of container location
- Protection against claims by shippers that unauthorized contents were the results of carrier action
- Certification and Verification of identity of shipper and contents
- Marketing and sales tool to increase market share in providing secure containers to shippers
- Automatic transmission to CBP of container data, exemplified in CF-1302 or like manifest or other required electronic filings
- Data-base intelligence identifying weak points/delays/security- risk areas in supply chain
PSS Benefits to CBP
- Supporting means for Electronic filing of In-Bond applications.
- Use of trusted third-party agents of shipper or carrier
- Minimum 6-digit HTSUS identification, and safety, security identification at origin
- Knowledge of container or trailer arrival and location on 24/7 basis
- Knowledge of container/trailer diversion from approved path
- Knowledge of container opening or access into container
- Knowledge of which containers need no inspection
- Identification of suspect container
- Faster transmission of data into CBP and ACE system
- Elimination of third-party reporting of trade data (i.e. Border Customs brokers)
- Enhancement of 10+2 Importer Security Filings
- Enhanced knowledge of actual container contents from a identified supervisory employee who certifies shipment contents and quantity at stuffing.