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Posted on May 3, 2007 by  & 

The myth and reality of baggage tagging

Airports and airlines have been trialling RFID baggage tagging for at least fifteen years - the first trial was by Lufthansa in 1991. There has been significant delay while they kept trialling incompatible solutions that are not even at the same frequency. However, this changed in 2005 when the International Air Transport Association (IATA) - a trade association representing and serving the airline industry world-wide - settled on UHF frequencies to be used for baggage tagging. IATA regulate air transport safety and aim to simplify air transportation, such as introducing etickets (which will replace printed tickets by the end of 2007), efreight tracking and RFID.
About two billion bags are shipped each year by airlines. Baggage errors include mislaid baggage (occurring to approximately 40,000,000 bags each year), lost baggage (only about 50,000 a year) and damaged baggage. Airlines benefit from RFID tagging baggage because they can reduce costs by reducing some of these errors. Airports win through greater baggage throughput without massive infrastructure investments such as more floor space. The problem with baggage is that they look a like and the labels on bags often obscure the barcodes. Some airlines manually put markers on the barcode label so they know it has been x-rayed. The other problem is that the labels are logically put on handles, but when carriers handle the bag by the handle they can damage the barcode.
In a comprehensive survey across the world, IATA asked the airlines why bags went missing, how many and where the problems were. They asked the airports similar questions - such as how many bags do they handle and how many bags do they have to do something to so they arrive on time - one airport had to manually handle 65% of bags to ensure they reach the correct airplane. IATA also interviewed the suppliers of RFID to find out the actual costs of tags, readers and infrastructure.

Understanding the Problem

IATA learnt about the actual costs of mislaid baggage for airlines. The costs of mishandling vary greatly, not only from airline to airline but from passenger to passenger. Airlines often pay First Needs costs to outbound passengers, but not to those returning home who are assumed to have spare clothes. These first need costs are at the airlines discretion and are typically $200. The the airline needs to undertake the process of returning the bag to the passenger, and meet the costs of labour and transport involved. Despite all of these elements the average cost per bag is still only $90. From its survey IATA found the reasons why baggage is mislaid as follows, listed in order of problems having the greatest impact:
1. 60% of bags are mislaid because the airplane connection times are too short or an aircraft is delayed reducing the connection time . ATC delays are often a contributing factor.
2. The second biggest problem is a delay between the aircraft arriving and the aircraft being unloaded.
3. Passengers are always through checked to their final destination, and this causes problems for baggage handling.
4. "Other" reasons which are numerous and very varied but not always clear
5. Missing messages - when a bag is checked in a message is sent to each destination that the bag is going to. However, if the bag is mishandled and goes off-route then no message is available when the bag is located.
6. The barcodes on the baggage have not been read properly
The problem that has least effected mislaid bags (non-reads or misreads of barcodes) has in the past been used as the primary reason for using RFID to tag baggage. The primary reason for mislaid baggage cannot be solved by RFID tagged baggage. Of the 2% of baggage that are mislaid, RFID can help to tackle only 20% of that problem - overcoming the barcode read rate and missing messages (BSM).
Therefore RFID for baggage tagging initially may look a hard sell, but nevertheless the potential amount that RFID baggage tagging can save amounts to $760million a year and is therefore worthwhile tackling. In some cases the saving has been very high - in Hong Kong airport, for example, the average cost of handling bags has gone from $7 per bag to $4 - a huge saving. In early 2007, 24 airports are using/trialing RFID for baggage handling.
IATA see a payback period of just 1.1 years. Read this months RFID Analyst to see the cost of implementing an RFID system by an airline and airport and how the payback is achieved.

Rapid adoption in 2007

Andrew Price says adoption of RFID for baggage is not "if" but "when". IATA will work with airports and airlines to promote best practice, including RFID. Watch this space. For more information read the new IDTechEx report RFID in Airlines and Airports 2007-2017.
Andrew Andrew Price of IATA, Fai Wong of Hong Kong Airport and Yemmi Agbebi of Manchester Airports Group will be presenting at the IDTechEx RFID Europe 2007 conference and exhibition in Cambridge, UK on September 18-19.

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Posted on: May 3, 2007

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