Why did the Utah Inland Port give this California company a no-bid $2M contract?

University computer professor says the technology being offered is “something that literally could be a senior thesis or master’s project for a student in my lab.”

(Chris Samuels | The Salt Lake Tribune) A QuayChain observation trailer stands outside the Union Pacific Intermodal hub in Salt Lake City, Thursday, June 2, 2022.

The Utah Inland Port Authority has touted its Intelligent Crossroads Network as the “foundation” of Utah’s future supply chain.

Port officials also gifted the contract to build it, without soliciting competitors, to an obscure and apparently little tested California-based company.

They first began promoting Intelligent Crossroads in August 2021 but provided little information about it other than it involved a private 5G network, artificial intelligence and a partnership with QuayChain (pronounced “keychain”) Technologies.

More details emerged during an informal meeting between port opponents and port staffers, during which the port authority’s director of technology explained the network would include about 250 cameras across Salt Lake City’s northwest quadrant. Those cameras would capture and process identifying information about trucks and cargo.

A recently released video describes what QuayChain is building for the inland port in a nutshell.

“The first deployment for us is a mobile trailer,” QuayChain CEO Andrew Scott says in the video, “which contains Intel compute cameras and sensors.”

Cameras eventually will be located throughout the port and connect to a private 5G network. Then, rather than go to a central server for processing, the large volumes of video data collected will be computed at the cameras themselves, or what Scott calls the “edge.”

What the contract says

(Chris Samuels | The Salt Lake Tribune) A QuayChain observation trailer stands outside the Union Pacific Intermodal hub in Salt Lake City, Thursday, June 2, 2022.

After a public records request, The Salt Lake Tribune learned the port authority issued a $2 million contract to QuayChain on Aug. 23, and the contract was not put out for bid.

“As we were trying to decide how to go forward, we talked with a number of port authorities around the world,” Jack Hedge, the inland port’s executive director, said in an interview. “No one was aware of anyone doing anything like this.”

The contract funds an initial two-year pilot program with about two-dozen cameras to determine whether QuayChain’s AI will work, Hedge said. Once the full network of hundreds of cameras is built, QuayChain will have an ongoing contract to manage and anonymize the data. The company stands to profit further by selling subscriptions for the data to freight companies and cargo handlers.

Hedge confirmed that the port authority did not issue a request for proposals when it hired QuayChain to build the Intelligent Crossroads Network.

“State procurement allows for sole-source procurement,” Hedge said, “when it is a unique service offering.”

(The Utah Division of Purchasing and General Services declined to comment for this story, noting the inland port has its own procurement authority.)

“We looked at the marketplace … pretty rigorously,” Hedge added, “and nobody else was doing what we’re talking about here.”

That may not be the case. QuayChain appears to be assembling off-the-shelf products, including existing AI technology on Intel devices, to process images and beam the results through a wireless network. QuayChain does not appear to hold any patents. And several ports around the world appear to be building comparable computer vision and data networks.

“The techniques they’re using, maybe they have their own implementation,” said Tucker Hermans, an associate professor at the University of Utah’s School of Computing, who reviewed the QuayChain contract. “But it’s something that literally could be a senior thesis or master’s project for a student in my lab.”

Hermans noted that a cursory Google search of “computer vision,” “AI” and “port” reveals several news articles about similar technologies.

A startup called AllRead successfully tested a similar system at the Port of Barcelona. A company called Nanonets built a parallel machine learning system for a large cargo handler in India. Likewise, business consulting firm Deloitte is building an AI system to track freight for the Vancouver Fraser Port Authority. It even trumpets its ability to process data at “the edge,” just like QuayChain’s promotional video.

The only thing the Utah Inland Port Authority appears to plug about the Intelligent Crossroads Network that these other systems do not is its private 5G network, but building out 5G connectivity isn’t exactly new or novel.

“The question of why [the contract] didn’t go out to bid,” Hermans said, “is a relevant one.”

What QuayChain has to say

(Chris Samuels | The Salt Lake Tribune) A QuayChain observation trailer stands outside the Union Pacific Intermodal hub in Salt Lake City, Thursday, June 2, 2022.

Little information is readily available about QuayChain and any work it has done for ports in the past. Its website has a roster of “customers” and “partners,” but the list references only vague industries like “airports,” “utilities,” “public safety,” “landlords” and “intermediaries.” The only actual client or partner QuayChain names specifically is the Utah Inland Port Authority.

QuayChain is based in San Pedro, Calif., according to its contract with the inland port. It filed for business in September 2018.

Scott, the company’s founder and CEO, declined an interview request. After The Tribune emailed a list of questions, he replied with a statement.

“The QuayChain system will enable [the Utah Inland Port Authority] to achieve sustainability objectives with a connectivity that provides visibility of environmental data,” it said. “This is unique as ports have traditionally been ‘data black holes.’ QuayChain combines private LTE/5G with edge AI solutions to support the supply chain with the data to make investments in zero emissions infrastructure and other decisions to improve sustainability and efficiency. Globally, QuayChain is the first company to provide this service.”

Scott did not respond to questions about whether he or his company holds patents, or confirm whether he planned to sell subscriptions to QuayChain’s data. He also did not provide information about any previous clients.

Scott and Hedge, however, appear to have overlapping experience working for the Port of Los Angeles, according to their LinkedIn profiles. Hedge directed that port’s real estate and cargo from 2012 to 2019 before he became executive director of Utah’s inland port. Scott worked as an “adviser to the executive director” at the Port of Los Angeles for about a year before founding QuayChain in 2018.

Hedge confirmed he knew about Scott and QuayChain from his “work in Southern California.”

He added that he was aware of at least two clients QuayChain previously worked for: APM Terminals, a European-based port operator with a pier in Los Angeles, and Yusen Terminals, an international company that also handles cargo in Los Angeles.

A spokesperson for APM Terminals said in an email it had reached out to QuayChain as a “potential provider” of a wireless network solution for the company. After reviewing a “proof of concept,” APM opted to go with Nokia instead.

“Proof of Concept was discarded,” the spokesperson wrote, “and we never got to engage [in] any business with QuayChain.”

Reached by phone, a spokesperson for Yusen Terminals confirmed it had used QuayChain as a vendor about three years ago, but the relationship apparently did not last long.

“They didn’t have the skill set we were looking for in particular,” the spokesperson said.

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