Airfreight forwarders plan boycott over RFID impasse

Airfreight forwarders are planning to boycott the so-called secured trade system using radio frequency identification (RFID) seals, which was supposed to go live on Saturday, as they felt that the revised agreement drafted by its promoter was lopsided.

The new system, undertaken by the Royal Malaysian Customs and Malaysian Communications and Multimedia Commission (MCMC) to enhance container security, has hit a snag with association Airfreight Forwarders of Malaysia (AFAM) calling upon its members not to sign up for the new system until negotiations with project vendor Smartag Solutions Bhd are resolved.

“You may proceed with the rollout of the RFID tags but without the signing of the ‘new’ version of the agreement,” according to a letter from AFAM to Smartag, obtained by The Malaysian Reserve.

It is understood that AFAM decided on the boycott as Smartag had allegedly ignored feedback the airfreight forwarders made through the industry body.

“Smartag is high-handed and arrogant. In the agreement, they can do whatever they want, and terminate an agreement whenever they want,” said AFAM chairman Walter Cullas.

AFAM had also questioned the need for the RM2,000 deposit to Smartag. With some 3,000 members, this would come up to RM6 million.

In his response to The Malaysian Reserve, Smartag chief executive officer Lim Peong Keong said the company was fully aware of the “teething problems” of the system’s implementation.

“The user agreement was drafted taking into consideration the terms and conditions of the main agreement with Customs and the need to protect some of the costly hardware against willful damage by users,” he said.

Lim added that the company is gathering feedback from users and plans to engage all related parties to resolve the matter.

“Objections on the terms and conditions of user agreement are understandable and there're still room for further discussion,” he said.

Smartag is a track and trace solution provider that utilises RFID and other wireless technologies.

Smartag’s RFID logistics and transportation solutions is able to be deployed in warehouses, ports, airports, dist ribut ion cent res and stores, according to the company's website.

Smartag’s RFID solutions utilise RFID technologies to increase the quality, speed, and accuracy of data that accompanies each package, pallet or container, it added.

On the potential impact with the delay, Lim said that while "Smartag would like to see revenue flowing in from the RFID system", it would not disrupt its cashflow as it has other usage for the system.

“Smartag is positive that the issues can be resolved in due course and that all related parties are working hard to ensure successful implementation of the system, which is part of the government's Economic Transformation Programme,” he said.