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Michelle Lu
Hutchison Port Holdings
(852) 2619-7557
Mark Nelson
Strategic Council on
Security Technology
(408) 743-8000

Smart and Secure Tradelanes ships first 100 'Smart Containers' across Pacific Ocean with real-time tracking and detection

World's Largest Public-Private Logistics Security Initiative Ships 'Smart' Ocean Containers Loaded with Tons of Consumer Goods That are Electronically Sealed and Tracked by Global Security Network Software for Real-Time, End-to-End Visibility Through Ports of Hong Kong and Seattle

Hutchison Port Holdings Deploys Software and Radio Frequency Identification Infrastructure From Savi Technology to Provide Major Retail Customer with End-to-End Visibility and Security

SEATTLE, Wash. and HONG KONG - Jan. 9, 2003 - The first wave of "smart and secure" ocean containers filled with merchandise to replenish store shelves for the New Year have been transported over the Pacific Ocean between major ports in Asia and the U.S. West Coast. These milestone shipments mark the successful operational deployment of Smart and Secure Tradelanes, the world's largest public-private initiative to improve the end-to-end security and efficiency of container transportation. This unique partnership is sponsored by the Strategic Council on Security Technology, a global advisory resource and catalyst for cargo and includes a rapidly growing list of partners, including major shippers, port and terminal operators, transportation service providers and technology solution providers.

The groundbreaking SST initiative repurposes infrastructure, processes, and technology used by the U.S. Department of Defense to deliver both productivity and security benefits to ports, terminal operators, service providers, carriers, and shippers. By leveraging existing proven methods within the context of an open system which allows for innovation and expansion, SST has created a solid baseline infrastructure that vastly improves security and productivity now and can be enhanced over time as new technologies and enhanced processes are deployed.

Over the past month, SST partners have shipped more than 100 40-foot long ocean containers, which have carried automotive parts, electronic equipment, toys and other consumer product goods, have been equipped with electronic seals that detect security breaches and instantly communicate their status and location over radio frequencies to a web-based software security network. The first 100 of these "smart and secure" containers have been shipped between the ports of Hong Kong, Singapore, Seattle and Los Angeles and Long Beach over the past six weeks.

The most recent shipment just days before the New Year included ten container loads of store merchandise that was managed successfully by Hutchison Port Holdings (HPH) - the world's largest port operator -- on behalf of a major U.S.-based retailer and that involved a number of HPH partners, including Savi Technology, Maersk Logistics and Mitsui OSK. The real-time solutions provided for the initial SST roll-outs managed by HPH came from Savi Technology, which is providing Radio Frequency Identification hardware (SmartSeals, Readers and Signposts), as well as inter-linked software, including the Savi SmartChainTM Platform and Transportation Security System software application.

"As the largest port operator in the world, we have a vested interest in making sure that ocean-going cargo operations worldwide are conducted in the safest and most efficient manner," said John Meredith, Group Managing Director of HPH, a founding member of Smart and Secure Tradelanes, which was announced last summer by Sen. Patty Murray (D-WASH) on Capitol Hill.

"We're excited about working closely with some of the world's major companies in this initiative, and we're encouraged by the progress and initial results of the first container shipments between Asia and the U.S. West Coast," Meredith added. "SST is a model we expect to continue to roll out in critical trade lanes worldwide." HPH is a wholly owned subsidiary of Hutchison-Whampoa Ltd. (SEHK: 0013), the world's largest port operating company, managing 30 ports in Asia, Middle East, Europe, Africa, and the Americas which are the leading ports of origin for the total import container traffic to U.S. ports.

"The Port of Seattle is excited to be a part of this program to safeguard our cargo, our citizens and our economy," said Port of Seattle Chief Executive Officer Mic Dinsmore. "As one of the nation's primary gateways for international trade, we think this technology represents a major step in securing the supply chain from factory door to the showroom floor."

"In just a few months, Smart and Secure Tradelanes has gone from a concept to a concrete reality using sophisticated wireless and Internet technologies in one of the world's most complex environments - the global supply chain," said Gen. John Coburn, U.S. Army (Ret.), and chairman of the Strategic Council on Security Technology.

"I'm very proud that so much progress has occurred so quickly to implement this international security initiative, which is closely coordinated with U.S. government programs such as CSI (Container Security Initiative) and C-TPAT (Customs Trade Partnership Against Terrorism). It's gratifying to see that battle-tested technologies developed for the U.S. Department of Defense now are being leveraged to protect lives and livelihoods in the commercial world." Coburn, formerly the commanding general of the U.S. Army Materiel Command, was instrumental in building DoD's Total Asset Visibility network, the world's largest active RFID supply tracking system that manages 270,000 conveyances moving through over 40 countries.

SST is leveraging and extending the physical infrastructure, technology and experience of the TAV network that was primarily built and is operated Savi Technology. This 6th-generation technology is now being applied to SST, making SST-sponsored containers the most highly secured and efficiently managed in the world. These unique containers have been locked at their point of origin with electronic seals (E-Seals) that function like mini-computers because of integrated circuit boards in them that automatically store, process, receive and transmit information via radio antenna to a powerful software platform and robust applications. As a result, event-driven information is automatically transmitted on the location, status and security of containers, which also provides a documented audit trail of the shipments.

The initiative now involves implementation at 11 major ocean tradelanes worldwide, and has grown to about 35 partners, including the world's three largest port operators handling 70 percent of world trade - Hutchison Port Holdings (HPH), P&O Ports and PSA Corporation; major shippers such as Target Corporation (NYSE: TGT); transportation service providers; and best-of-breed technology solution providers such as QUALCOMM (Nasdaq: QCOMM), SAIC, Parsons Brinckerhoff, and Savi Technology, which serves as the primary solution provider of the hardware and software.

SST is a phased, industry-driven initiative using an open technology platform working in coordination with U.S. Customs, Transportation Security Administration, Operation Safe Commerce, C-TPAT and the Container Security Administration to improve the security and productivity of cargo shipments.

In the most recent shipment managed by HPH, about a dozen "smart and secure" containers started their journey at a consolidation center near the Port of Hong Kong, where more than 2 million containers account for over 20 per cent of imports into the United States. After authorized personnel loaded and bolt-locked these 40-foot long containers, they became "smart and secure" when electronically sealed with Savi Technology's EchoPoint 645 SmartSeals.

The sealing "event" was automatically recorded by a handheld device, which enabled authorized personnel to capture and verify key information, such as the time, date, location, container identification, booking and contents (manifest), with shipment information already keyed into the Transportation Security System developed by Savi and operated by HPH. Key data points were then electronically verified and available for Customs authorities to determine pre-loading inspections. The "smart and secure" containers were then moved to a container yard where they waited to be loaded onto the right vessels.

Throughout this pre-loading process, strategically placed RFID readers continuously monitored their location and security status (and verify information) up until the time they were scheduled for departure. With no irregularities recorded, these containers were loaded onto a vessel with some 5,000 other conventional containers that looked the same but weren't electronically secured.

After the typical 10-day journey across the Pacific Ocean, the vessel transporting these containers berthed at the Port of Seattle, where another series of strategically placed RFID readers recorded their location and security status, enabling the shipments to be verified and certified in near real-time by all relevant U.S. authorities. Once cleared to exit the Port of Seattle, the smart containers were loaded onto the chassis of a regional carrier and transported to a third-party distribution facility outside the Port of Seattle. The distribution center, which is also equipped with the same SST technology, continued to capture key events and transmit them to the Savi Transportation Security System software, where real-time information is accessed by pre-authorized parties in a secured Internet environment. Authorized personnel then unlocked the SmartSeal using an encrypted code, the event was recorded and transmitted to the Transportation Security System software, enabling complete information verification and the instant creation of a documented audit trail of the entire process.

From there, the merchandise was shipped to retail stores throughout the Northwest - safely, securely and efficiently - just in time to replenish store shelves for 2003.


About the Strategic Council on Security Technology

The Strategic Council on Security Technology is an international assembly of top executives from the world's largest port operators, major logistics technology providers, four-star generals, former public officials and prominent transportation consultancies. Acting as an international resource, the Strategic Council on Security Technology is committed to helping ensure greater supply chain security through best-of-breed practices and technologies while working with a variety of other industry associations.

About HPH

Hutchison Port Holdings (HPH) is the world's leading port investor, developer and operator with interests in 15 countries throughout Asia, Middle East, Africa, Europe and the Americas. Today, HPH operates a total of 169 berths in 30 ports together with a number of transportation related service companies. With industry recognized core competence in the effective and efficient management and operation of container ports, the HPH Group handled 27 million TEU in 2001.

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