Delta Airlines to invest $25 in luggage RFIDs

[David Farber <dave () farber net>]

Begin forwarded message:

From: Jason Schultz <jason () eff org>
Date: July 5, 2004 2:16:14 PM EDT
To: "Eff-Priv@Eff. Org" <eff-priv () eff org>
Cc: DeepLinks <deeplinks () eff org>
Subject: [E-PRV] Delta Airlines to invest $25 in luggage RFIDs

Between this and CAPPS II, we're sure gonna catch those darn terrorists  
next time!

http://slashdot.org/article.pl?sid=04/07/02/0559208
http://www.nytimes.com/2004/07/01/technology/01tags.html? 
ex=1089345600&en=9afabca9eda48507&ei=5062&partner=GOOGLE

Delta to Invest in Radio Tags for Luggage at Airports
By BARNABY J. FEDER

Delta Air Lines said yesterday that it planned to use disposable radio  
tags to track all luggage it handles at domestic airports. The airline,  
which is based in Atlanta, said it would have to invest up to $25  
million to deploy the necessary hardware and software throughout its  
operations, a process that it aimed to complete within two years.

The bet on the new technology, known as radio-frequency identification  
or RFID, comes at a time when Delta's financial condition is so  
precarious that it has warned investors it might have to enter  
bankruptcy to reorganize its debts. But Delta executives who oversaw  
tests of the technology said they wanted to adopt it as fast as  
possible because they believed the investment would quickly pay for  
itself by reducing luggage handling costs.

 Fewer than a million of the 80 million or so bags Delta handles in an  
average year fail to reach their final destination on the same flight  
as their owners, but locating and delivering misdirected luggage costs  
the airline about $100 million annually, according to Robert Maruster,  
Delta's director of airport strategy. Not only will the technology cut  
down on the number of bags that fail to get on the right flight, Mr.  
Maruster said, but once Delta develops software to provide its agents  
with data from the tracking system, the agents should be able to tell  
passengers where their luggage went and when Delta will be able to  
deliver it.

 "It will be plainly obvious to the traveling public who has this and  
who doesn't," Mr. Maruster said.

 Analysts who follow RFID technology said that Delta's move could push  
other airlines to make similar investments, just as  Wal-Mart's highly  
publicized decision last year to impose radio-tagging requirements on  
shipments of products from its largest suppliers is driving adoption of  
the technology in retailing. But analysts have said that Wal-Mart is  
running into numerous hurdles as it pushes at the edges of the  
technology's capabilities, and the same might well happen to Delta.

Last summer Wal-Mart said that it wanted its top 100 suppliers to ship  
radio-tagged items by the end of this year and for the rest of its  
suppliers to do so by the end of 2005.

 Two weeks ago, Wal-Mart said the second wave of its rollout will be  
confined to the next 200 largest suppliers. That would bring the total  
involved by the beginning of 2006 to 300 companies, or just 1 percent  
of Wal-Mart's supplier base. That group would account for roughly 70  
percent of the goods Wal-Mart receives if every case and pallet they  
sent was tagged, but Wal-Mart does not expect the entire range of  
products received from the participating companies to be included so  
soon, according to Gus Whitcomb, a company spokesman.

 Early versions of radio tags are widely used to identify and track  
valuable assets like missiles and railroad containers. The technology  
is also used in automated toll collection systems like E-ZPass. Falling  
prices for the tags and readers and the development of standards so  
that equipment from different vendors can in theory work together has  
opened the possibility of applying the tags to more types of goods.

Wal-Mart and other retailers see the technology as an improvement on  
bar codes because radio tags can store more data than bar codes. In  
addition, data can be collected from radio tags much more rapidly and  
in more varied conditions than from a bar code, which must be scanned  
by a laser beam.

That speed and improved accuracy is particularly appealing to airlines,  
because employees reading printed destination codes and optical  
scanning systems that check bar codes can become overwhelmed when  
airports are busy. Officials at McCarran International Airport in Las  
Vegas announced early this year that the airport would begin attaching  
radio tags this fall to all luggage checked there. In tests, the RFID  
system that the airport will use accurately routed 99.7 percent of  
luggage, compared with a maximum of 89 percent for optically scanned  
bar codes, according to Randall H. Walker, director of aviation for  
Clark County, Nev., which owns McCarran.

 Delta aims to use the technology in more demanding conditions than  
many RFID applications face. For example, identifying luggage as it  
comes off planes would expose the tags and readers to foul weather.

 "Luggage may be more challenging than what Wal-Mart is trying to do in  
the warehouse," said Thomas K. Ryan, an analyst who follows the  
technology for the Aberdeen Group, a research firm.

 McCarran and the Hong Kong International Airport, which recently  
announced a plan to use radio tags, are using technology supplied by  
Matrics, a start-up company based in Rockville, Md. Delta has worked  
extensively with Matrics in its testing and has tested products from  
other vendors as well, according to Mr. Maruster, but has not yet  
settled on which systems it will use.


-----------------------------------------------------------------------
Jason M. Schultz                        (415) 436-9333 x 112
Staff Attorney                          jason () eff org
Electronic Frontier Foundation  www.eff.org


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