Global mail services seen as new frontier for RFID

Postal and courier mail services are expected to become the second largest market for radio frequency identification item-level tagging following the retail sector, according to a research firm.

The technology already is being deployed at carriers to secure access to vehicles, trailers, and sorting and shipping areas. “We see a strong move toward revamping total postal systems to make it much easier to send and receive the correct package more promptly with better cost and security control,” said Peter Harrop, chairman at research firm IDTechEx on Thursday. “That is why Arabia is rolling out smart post boxes, and Korea is looking to change its receiving and shipment to a holistic system with near real-time traceability.”

China, Korea, Taiwan, Saudi Arabia, Germany and the United States are moving forward with deploying RFID to track packages. RFID can facilitate product recall and postal companies are finding ways to fit the labels on cases and pallets of consumer packaged goods at the request of Wal-Mart Stores Inc. and other retailers with mandates. IDTechEx said that by 2016, the United States will contribute 25% to the total market, Europe 25% and China 50% to the $3 billion RFID market geared toward postal and courier services.

Attributing to the adoption in the sector is declining RFID label prices. Retail mandates are creating a yearly demand for billions of labels affixed to cases and pallets, reducing the cost for services and equipment from tags to readers to printers. IDTechEx said the average price for an ultra high frequency RFID label is approximately 15 cents.

Other factors contributing to adoption include increased adoption of high frequency 13.56 MHz RFID applications in libraries, laundries and ticketing agencies. IDTechEx said favorable to item-level tagging for postal and courier services is high frequency labels and systems that operate between two and ten meters and are usually more tolerant of water and metal than UHF RFID labels. This technology is available from companies such as Miyake, DAG Systems, Subtropic, Tagsense and UPM Rafsec.

IDTechEx expects that by 2020 postal and carrier services to label one trillion packages and letters annually, making this the second largest application of RFID in the world following the retail supply chain.

Saudi Post, Deutsche Post and its subsidiary DHL have done successful trials of RFID labeling individual items to improve service and reduce cost and has tested market prices against the possibility of tagging all its one billion items yearly. “In East Asia and Saudi Arabia, for example, they want to oil the wheels of industry and demonstrate technology superiority, rather than get a short payback on one narrow aspect,” Harrop said. “DHL talks of ten years to build to tagging one billion packages annually. It demonstrates all leading courier companies are interest in RFID.

Harrop said UPS has done 20 trials and invested in four RFID manufactures to keep close tabs on the industry. The purchases for major computer systems and infrastructure to redesign RFID-based postal services are likely to appear in East Asia first and “it’s no coincidence that Microsoft first offered its solution in Taiwan and then India.”