GE, Siemens join forces for container security solution

Siemens' Wegmann:
Wednesday, March 1, 2006

SWITZERLAND--GE Security and Siemens' Building Technology Group announced in mid-January a collaboration to expand both companies' reach into the shipping and container security market. In exchange for exclusive European marketing and distribution rights for CommerceGuard AB's container security device program, Siemens has acquired a minority stake in the GE subsidiary, which is also partly owned by the Japan-based Mistubishi.
CommerceGuard's device allows for containers to be sealed when they leave a manufacturer, with all door openings recorded. Readers then can access that data and post it to an online database that can be accessed by authorized personnel. Further, problem notices can be sent via email or text message.
"It has two major functions," noted Randy Koch, general manager of container security at GE Security, "security and the ability to track your goods. The end user of it is anyone who exports or imports goods who wants to either do security or track the location of their goods." He said there are currently about 16 million container moves a year worldwide.
"In comparison," said Koch, "what's basically used right now is a flimsy little bolt seal that's cut off by a bolt cutter."
Jens Wegmann, president of security systems at SBT, said the deal would allow Siemens to follow through on the final part of a three-stage plan to enter the port security market. First Siemens developed video surveillance systems for ports, then created a nuclear-based scanning and detection system that's recently been introduced in Rotterdam, Germany.
"The third leg," said Wegmann, "was how can we participate in making global trade more secure?" He acknowledged that Siemens and GE are usually "tough competitors," but said the motivation for collaboration "is the overall threat to this container business ... No one can do it alone on a global scale." This was echoed by Koch. Wegmann noted governments globally have been talking about securing the shipping process, but not making headway. So, "we felt if the big ones get together we have the opportunity to get something moving."
Also a plus for Siemens, said Wegmann, is that the company will become the preferred integrator for CommerceGuard AB worldwide, so while Mitsubishi and GE might market and sell the product outside of Europe, it will be Siemens who is often doing the installation and integration work with manufacturers, importers, customs officials and port authorities.
CommerceGuard will be commercially released in July, but, reported Koch, demand has been so high that a limited release will roll out in March. Reader infrastructure will be installed at GE's expense at the ports serving the shipping lanes in which those early customers do business. As for the rest of the world's ports, "some are very welcoming because they want to get out in front of security," said Koch. "Other terminals are hesitant because they're used to just waiting until the government tells them to do it." But, he said, a lot of pressure is coming from importers who want to track their goods.
"At the end of the day," said Koch, "what's also interesting about this is that we've made this whole business be able to be supported by the private sector; we're not asking any governments for any money." He said that by getting the price point "down to about $15 or $20 per shipment, we've been able to justify to everybody that there will actually be a return on the investment."