Shippers like RFID

The latest survey of shippers by analysts Bear, Stearns and Co. found that 45% have already begun looking at RFID (radio frequency identification) technology as a way to increase automation for their supply chain efforts. The survey, which looked at second quarter 2003 plans, found that shippers have also significantly increased both budgets and spending for investments in supply-chain technology

The latest survey of shippers by analysts Bear, Stearns and Co. found that 45% have already begun looking at RFID (radio frequency identification) technology as a way to increase automation for their supply chain efforts. The survey, which looked at second quarter 2003 plans, found that shippers have also significantly increased both budgets and spending for investments in supply-chain technology of all kinds. Both findings have major ramifications for private and for-hire fleets competing to capture market share based on value-added services.

RFID technology automates inventory and shipment tracking using inexpensive radio “tags” that broadcast ID information to special readers. Trucking's PrePass system and the EZPass toll system are two examples of the technology's early use. The survey, which is conducted quarterly by Bear, Stearns, reveals that 33% of the shippers not currently investigation RFID for supply-chain automation plan to do so within the next two years. Only 22% of those surveyed said they had no plans to invest in the new technology.

In June, Wal-Mart announced that it expected its top 100 suppliers to move to RFID at the case and pallet level by January 2005. Nearly one-quarter of the surveyed shippers said their RFID plans were influenced by that announcement.

Shippers contacted for the 2Q survey indicated that they increased spending on supply-chain software 47% compared to the analyst's 1Q survey. Shipper expectations on new software investments over the next 12 months also grew by 25%.

And for the third quarter in a row, shippers said they plan to budget more of their overall transportation spending for the next year on supply-chain technology. On average, the shippers have earmarked 6.1% of that transportation budget for technology investments, compared to the 5.3% reported in the 1Q study.

The Bear, Stearns 2Q survey sent questionnaires to over 1,000 shippers representing most important vertical markets, including both manufacturers and retail suppliers. Of those responding, over half had annual transportation budgets over $50 million.

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