Delta Air Lines Inc. last week said it plans to test the use of radio-frequency identification (RFID) tags on passenger luggage in the fall, making it the second major company to give the emerging technology a boost this month.
Delta will give RFID devices a trial run on selected flights from Jacksonville, Fla., to its headquarters hub in Atlanta. It said the 30-day test will involve the use of more than 40,000 disposable RFID tags that operate at 900 MHz and are being made by two vendors: Matrics Inc. in Columbia, Md., and SCS Corp. in San Diego.
Delta's announcement came just one week after Wal-Mart Stores Inc. said it plans to require its top 100 suppliers to use RFID tags on shipping pallets by January 2005 . Wal-Mart's stamp of approval is expected to spur broader adoption of RFID technology in the retail industry, and analysts said Delta's move could have a similar effect on other airlines.
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Delta hopes smart tags will help it track baggage and cut costs. Credit: The Associated Press | |
RFID has to wait for "some killer apps" to become a reality before it can be widely used, said Deepak Shetty, an analyst at Frost & Sullivan Inc. in San Jose. Delta's test and Wal-Mart's embrace of the technology may be the catalysts it needs, he added.
Rob Maruster, director of airport customer service strategy, planning and development at Delta, said the airline's requirements differ markedly from those of Wal-Mart. "We operate in a very industrial environment," Maruster said, noting that the RFID tags will have to be readable while bags are being loaded and unloaded on airport tarmacs.
Airports also have other wireless systems that could cause interference with the passive tags Delta plans to test, Maruster said. A passive tag has no power connection or transmitter and is "read" by an RFID scanner equipped with a transmitter.
Maruster said Delta plans to use the test to determine RFID's ability to function at a range of up to 10 feet, which would let the airline track bags more precisely than it can with existing bar-code systems.
He added that although Delta delivers 99% of the 100 million or so bags it handles each year, it spends "a lot of money" trying to find missing bags. "This is a cost-reduction opportunity," Maruster said.
But Delta wants to pay 5 cents or less for each RFID bag tag before it puts the technology into widespread use -- the same price Wal-Mart is seeking from vendors. RFID tags currently sell for between 30 and 50 cents apiece. John Shoemaker, vice president of business development at Matrics, said that at high volume levels, the cost of an RFID bag tag could drop to 20 cents within a year.
SCS President Barry Cropper agreed that increased volumes will drive down prices, but he added that a tag redesign may be required to meet Delta's cost goal. SCS is working on a new form factor that integrates the RFID transmitter onto the tag, he said.
Pat Rary, Delta's manager of baggage planning and development, said Matrics and SCS will produce the RFID tags in a substrate material that will be combined with rolls of bar-code tags. Modified printers at airport ticket counters will be able to print the bar-code tags and simultaneously write the same information to the RFID tags electronically, Rary said.
American Airlines Inc., Northwest Airlines Inc. and United Air Lines Inc. didn't return calls seeking comments on whether they plan to conduct similar RFID tests.