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Satellite Tracking on the Cheap.

Orbcomm is offering a more cost-effective way to keep up with cargo in Latin America.

TRACKING SHIPMENTS VIA SATELLITE IS nothing new in Latin America. For years, companies have been able to use global positioning systems (GPS) to gather information about everything from their cargoes' location to whether their containers have been opened. But the cost has been prohibitive: US $2,000 to $3,000, and that's just for the tracking unit itself, not for the satellite time.

Orbcomm, a Herndon, Virginia-based partnership between Orbital Sciences Corp. and Teleglobe, is offering what it thinks is a more cost-effective way to track cargo in Latin America. By placing a device about the size of a videocassette tape in a truck, ship or cargo container, Orbcomm can tell shippers where their cargo is and whether it's open or closed. The cost of the unit is between $150 and $500, and the cost of the satellite time just a few cents per message.

The company's system costs less because its satellites, at 820 kilometers, are much closer to the ground than traditional geostationary satellites, which fly at higher altitudes. As a result, the devices stuck to the trucks and cargo require less battery power to transmit packets of information, reducing the cost of providing the service.

The size and efficiency of these devices--which are not actually made by Orbcomm but other companies such as Panasonic, Stellar, Magellan and Scientific Atlanta--can also come in handy. "For example, you can leave a trailer or a container standing at a customer site alone, and it can have a small battery feeding this unit to transmit maybe a message a day," says Eduardo Lentz, Orbcomm's Argentina-born regional director for Latin America "You couldn't do that with another system because you'd need a generator to power it."

The company began offering the service shortly after it launched the first of 35 satellites in 1995. The next year, the company hired Lentz--a telecommunications sales veteran--to develop the business in Latin America. That entailed finding licensees to not only sell the service, but to provide ground sup. port as well. "Ifs been challenging to find suitable partners that have cash and the commitment," says Lentz, who eventually found four companies to handle different areas of Latin America and the Caribbean and started service in the region at the end of 1998.

Galactic meter reading. While Lentz won't reveal sales in the region, he does say Orbcomm has 50 customers using the service and 100 more are testing it. "It's really quite an achievement for such a short period of time, because the lead time for selling the service is very long," Lentz says.

The traditional application of Orbcomm's system is for companies that are moving things from here to there. Transportes de Nuevo Laredo is using it to track its 100 trucks hauling cargo across Mexico. Several oil companies are also using it, from Petr[acute{o}]leos de Venezuela, tracking boats going from one oil well to another on Lake Maracaibo, to YPF, which is using it to secure pipelines in Argentina. (YPF is looking at it for distribution as well.) Fishermen in Chile are using it to monitor their fleets and Procter & Gamble employs it for delivery trucks in Argentina.

But there are non-transportation uses as well. Eight large utilities in Brazil, including Cemig in Minas Gerais state and Elektro in S[tilde{a}]o Paulo state, are currently testing it to read electricity meters, send on- and off-alerts and automatically cut off consumers who don't pay their bills. "It's working really well here," says Mauro Lambert, director of telecom services for Sistron, a Belo Horizonte-based company that supplies utilities with computer systems. "It collects data and gives automation capability to customers' systems."

Orbcomm's system isn't perfect. Omnidata, a S[tilde{a}]o Paulo-based company that outfits transportation companies with automatic vehicle locators, has been testing it in its own sales and technicians' vehicles and found it somewhat unreliable when it comes to security applications. "In Brazil, it's not used for logistics or dispatching, like it is in the U.S., [but for] security to protect cargo," says Cileneu Nunes, the company's director. "We cannot have black holes, shadows or periods of time when you can't send or receive a message from the vehicle. They are making some adjustments."

Lentz admits that some systems, like the ones offered by Ing Marsat and Qualcomm, are more sophisticated than Orbcomm's. But for passing simple data back and forth, he says, no one can beat Orbcomm on price. "Somebody might buy a racing car for going to work, but really he wants to use it for racing," he says. "We are the day-to-day system that can churn data in an inexpensive way."
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Publication:Latin Trade
Date:May 1, 2000
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