THE impending deployment of a radio frequency identification (RFID) tag system by the Royal Malaysian Customs at all its checkpoints nationwide to facilitate trade and security is a potential plus for Malaysia in giving peace of mind to investors.
Prior to the soft launch in Penang last week by its developer Smartag Solutions Sdn Bhd, the RFID-based security and trade facilitation system has been given the thumbs up by local and foreign logistics players that participated in a three-month trial-run, which ended in August.
The project, which is set to be financed by newly-listed Smartag Solutions, is one of 12 initiatives under the government's Economic Transformation Programme.
From Saturday and over the span of two years, the home-grown RFID system will be implemented in stages at more than 200 customs checkpoints and 600 high-value bonded warehouses nationwide.
Some of participants of the project, which essentially allows users to secure their containers (whether by air, land or sea) with RFID seals and track their movements electronically while entering, leaving or moving within the country, were DHL, TNT, Federal Express, Western Digital and Priority Cargo.
For these companies, whose reputation is built on speed, reliability and just-in-time delivery, the introduction of the RFID system is most welcome since it has the potential to increase customs clearance efficiency, along with paperless clearance and processes.
RFID is a generic term for technologies using radio waves to identify people or objects and has been available since the World War Two when the British army used it to recognise, among other things, friendly aircraft.
It is not every day that a logistics giant like TNT Express Worldwide NV comes forward and lends it endorsement to the Malaysian Customs for introducing this project.
The pilot run of the project was a collaboration between the Royal Malaysian Customs, industry users and Smartag, with facilitation by the Performance Management and Delivery Unit.
The company's regional network manager (Asia Road Network), Dinesh Kanapathy, said at the soft launch that his company had accrued a time-reduction savings of at least 50 per cent for customs clearance when participating in the trial run.
Other global names have also endorsed the RFID tag, as it has been proven to work in favour of safe logistics.
Penang investors remember only too well the international embarrassment caused to the country in 2006 by a RM50 million computer chip heist at the Batu Maung Free Commercial Zone, near the Penang International Airport.
The world's biggest chipmaker Intel Corp - whose investment presence in Penang spans close to four decades - said it was a victim of the microchip robbery, which left everyone in the state spooked over the lack of security measures in the movement of high-value goods.
By making available to investors, both local and foreign, the option of a cost-effective resource to save time, reduce labour requirements and afford better visibility of moving goods and services, Malaysia can only improve its position as a preferred site for doing business.
Depending on how successful efforts by Smartag Solutions are in convincing importers, exporters and their suppliers on the value of adopting RFID-based security systems, the field is wide open in Malaysia and elsewhere for other sectors - such as the judiciary and healthcare industry - to adopt this system of profiling, tracking and communicating.