Using RFID, fleets can identify vehicles and capture information at critical moments in their operations, such as when a vehicle moves freight in and out of gates and docks. Shown above: SmartPass from TransCore.

As the world’s largest retailer, Wal-Mart calls the shots for thousands of suppliers and, indirectly, for other retailers. So when Wal-Mart decided to require its top suppliers to affix small microchips on products and pallets headed to its distribution centers, interest in radio frequency identification (RFID) surged.

RFID consists of an integrated circuit chip and antenna enclosed in a protective lining called a “tag.” The tag can be embedded in an object or attached with an adhesive. As products move through distribution, electronic devices blast the tags with radio frequencies, causing the tags to transmit information.

By using RFID to track pallets and cases, Wal-Mart plans to increase efficiency throughout its global supply chain by ensuring that the right amounts of the right products are in the right place at the right times. More than 137 suppliers already have begun shipping selected products at the case and pallet level to Wal-Mart distribution centers in the Dallas area.

In general, the use of RFID for product or pallet tracking hasn’t had much effect on fleets, especially for-hire carriers (see “Testing the limits” on page 60). Some for-hire carriers – particularly those in the less-than-truckload sector – have expressed interest in using RFID to track high-value and time-sensitive freight. But some users say RFID technology, based on their own internal tests, may not be ready for prime time in high-volume applications.

“Testing on pallets has shown that we have a 60 to 80 percent read on tags,” says Sherry Aaholm, vice president of technology services for FedEx Freight. And in an industry where 99.9 percent accuracy is required, the current method of using barcodes remains superior, she says.

But carriers are finding other areas in which RFID technology is useful. Tags on vehicles enable fleets to automate fee collection for toll roads, bypass weigh stations and cross international borders without delays. Some fleets also use RFID internally to track their equipment and to monitor vehicle maintenance. As the technology continues to mature, fleets are finding new ways to leverage the advantages of this low-cost form of wireless communications.