RFID is an enabler of these changes, making effective tracking a possibility. The drivers for tracking include the possibility to reduce mishandling, improve customer service and actively manage costs.
Andrew Price, Head of Global Baggage Operations, IATA
RFID has been around for a long time. From an early start in aviation in the 1940s through to the first uses as a bag identifier in 1991 to the Delta Air Lines roll out in 2016.
Research has shown that the technology is reliable, effective and efficient. Back in 2007 IATA issued a business case that was cash positive for RFID being used in baggage handling. This looked solely at savings based on read efficiency in sortation, and even this could save the industry $800 million a year.
That business case was, correctly, rejected by the industry as a part measure in solving mishandling. In fact, RFID in this use only addressed 20% of all mishandling. While RFID will help you perform better, real improvement comes from an efficient baggage operation with RFID providing the information to support the decisions to drive the operation.
A decade on, and our industry is near the point where all the gains without a major change in how we think about baggage have been made. The big change in thinking is that of moving to a proactive approach to baggage handling supported by accurate tracking data. This is where RFID will help you perform.
RFID is an emotional subject. The question many executives ask is: how can anything that doubles the cost of a disposable label ever have a positive return on investment? The answer is not found in the technology details of an improved read rate, but in the smart use of the technology to improve business processes.
Every airport has changed since the initial business case was released in 2007. For a start, the passenger numbers have increased considerably and along with the passengers came baggage. The IATA baggage improvement program showed that the problem of mishandling had a solution.
The factory model has gone, replaced by an event-driven model that focuses on allowing most baggage to be handled automatically with attention given to those bags that need help.
This new model is the one that will enable our industry to get mishandling down from 6/1000 today to below 4.5/1000, which is the IATA target for industry mishandling.
RFID is an enabler of these changes, making effective tracking a possibility. The drivers for tracking include the possibility to reduce mishandling, improve customer service and actively manage costs. There is one further drive, which is the introduction of Resolution 753. This resolution mandates baggage tracking at key points in the baggage journey.
Airlines that have implemented tracking have seen a minimum 30% reduction in baggage mishandling. The resolution also mandates sharing of baggage data, which is essential when partnering with other airlines to complete an interline journey. This aims to enable the pre-planning of transfer baggage into the transfer hub.
Between the benefits and needs of increased tracking, increased opportunities to make use of reusable tags, lower RFID costs and improvements in the way large data sets can be analyzed to drive business decisions there is a clear case for reevaluating RFID use in baggage.
With this in mind, IATA and SITA have released a new version of the business case. This version focuses on the RFID enabled process changes that enable a truly effective and efficient operation. RFID is not a solution looking for a problem, but the enabler to saving the industry huge sums - more than $3 billion over seven years.
29 Nov 2016