Cost-Benefit Analysis of Implementing RFID System in Port of Kaohsiung

Abstract

The largest port in Taiwan, Port of Kaohsiung port, has the geographic advantage in East Asia. More than one million of Transshipment containers export and import in Port of Kaohsiung each year. In order to reduce smuggling cases, Taiwan Customs requests all Transshipment containers should be escorted while transferring from carrier yard to the port terminal. Therefore, Taiwan government decides to replace manual escorts with RFID e-seal system to be more security and efficient. The new system can save the inspection time, the expenses for additional Customs, and the escort fee for liner companies. This paper presents a scenario analysis to evaluate the cost and benefit analysis (CBA) of implementing the RFID E-seal system in Port of Kaohsiung. This is the first study on Transshipment containers by implementing new technology. In order to achieve the purpose, this research establish cost-benefit model, and evaluate the CBA with proposed scenario. Finally, the cost-benefit ratio can be determined by the model and two scenarios analyses were concerned to evaluate the RFID system in the future. The result indicated that the implementation of RFID e-seal system does not significantly favor to the Customs although the overall benefits to the whole system is greater than the cost. The results of CBA can be beneficial to the different stakeholders in allocating the limited monetary resources.