In its Global Supply Chain Intelligence Report, BSI Supply Chain Solutions put the cost of global cargo theft in 2014 at $23 billion having measured 20 risk factors in 203 countries. The Transported Asset Protection Association (TAPA) EMEA’s own Incident Information Service (IIS) Report for Q1 2015 shows an average loss value for cargo crime of (Euro)210,365, while in the Americas one report shows a 25 per cent year-on-year increase with an average Q1 loss of $256,966.
It’s not a new phenomenon. Cargo crime has been around for as long as people have traded goods. 20 or so years ago, it was regarded as petty, small-time opportunist crime by individuals most likely working in a warehouse packed with desirable products. Today it is a very different story. Cargo crime involves gangs of organised criminals using increasingly violent, daring and sophisticated tactics. In some parts of the world, truck drivers have even been killed by criminal gangs intent on stealing their cargoes.
Crime on the increase In the Europe, Middle East and Africa (EMEA) region, the majority of cargo crime is in Europe and South Africa. The problem for industry is that we just don’t know the full scale of the problem. We still quote the European Parliament study from 2007 that estimated the annual cost of organised theft of commercial vehicles and their loads in the EU to be (Euro)8.2 billion a year. In the eight years since that report, all the anecdotal evidence would suggest cargo crime has increased still further.
If you go online and search, nearly every day there is a new report on a cargo crime from somewhere in the world. In the past few days, for example, one media report quoted one of the world’s major tobacco companies as saying it had suffered over 1,400 truck hijackings in South Africa in the space of 12 months. That’s just one company in one country.
The challenge for industry is to get governments and law enforcement agencies to allocate sufficient focus and resources to the problem when they believe they have far greater public safety and other issues to address. I think most of us would be sympathetic to that view but cargo crime isn’t a ‘victimless’ crime as it is sometimes described, and neither is it just about losing boxes of protects that are insured and deemed easy to replace.
Earlier this year in a report looking at serious organised crime in Europe, Europol estimated that there are now 3,600 organised crime groups active in the EU. It is highly likely that many of the groups involved in gun and drug crime and people trafficking are also involved in cargo crime. One crime tends to fund another and organised criminals don’t tend to be too fussy about how they generate their income.
Theft attractive I want to also correct two other misconceptions about cargo crime. It is not just about the theft of high value goods, certainly not anymore. A more appropriate term is ‘theft attractive’ because often high volumes of low value goods are often quicker and easier to dispose of, and cargo criminals tend to know the ‘market’ to go to. We are seeing more incidents involving thefts of food and beverage, clothing and footwear, and cosmetics and hygiene products alongside what might be classed as the once more obvious targets of high-tech consumer products and luxury goods.
Another trade association recently likened hijacking a truckload of tobacco products to cargo thieves ‘striking gold’ while another often-quoted incident in Europe involved the theft of a vehicle carrying over (Euro)700,000 of cheese. These are just examples of a growing trend. One of the industry sectors most concerned about the threat of cargo crime is the pharmaceutical industry. Theft or contamination of pharma products put lives at stake.
This leads me on to the other misconception about cargo crime that the cost impact is based solely on the value of the stolen goods. Not so. TAPA EMEA supported a recent study conducted by the University of Texas’ College of Pharmacy to identify the true cost of loss when cargo is stolen. It found the actual cost can be up to five times the value of the stolen product, taking into account all of the events that follow a theft. Notably, this includes: Replacement Product Costs; Loss of Sales; Public Relations Costs; Investigational Costs; Drug Inspection and Testing; Product Disposal; Communication with Providers; Added Security Costs; Outreach to Client Costs; Quarantine Costs; Added Transportation Costs; Increase in Insurance Cost and Recall Process Costs.
Despite all of this intelligence, however, many companies only start to take the issue of cargo crime seriously once they become a victim. For some, by then it’s already too late, such as in the case of a transport or logistics provider that loses a contract with a major customer because the client just cannot trust them to keep their goods secure anymore.
The race you never win Globally, TAPA has over 800 member companies that are the exception to this rule. Our membership includes leading global manufacturers across a wide range of industry sectors as well as logistics service providers and transport companies whose job it is to physically move products. These companies all share one aim; to manage risk to achieve supply chain resilience.
TAPA members already have their own advanced, in-house security systems and processes but as part of the Association they gain the additional benefits of being able to adopt our industry-leading security standards. They also have access to our Incident Intelligence Service (IIS) that captures information on cargo crimes and the chance to network with like-minded professionals at our regional events.
These companies recognise that cargo crime is a race you never win because the race never ends. All you can do is stay in front of the people chasing you. Intelligence is vital in this to understand where cargo thieves are operating and the tactics they are using to target goods in the supply chain.
In the latest issue of our monthly magazine Vigilant, we include an interview with a police officer who gives his views on cargo crime. His concluding comment, advice to businesses, perfectly sums up why TAPA members are three times less likely to be victims of cargo crime. He stated: “If you make yourself less vulnerable, you are a less likely target. In a target-rich environment, there is no sense chasing the fastest. You chase the slowest. The cheetah always goes for the one at the back of the pack. That’s no different here. It’s easier to steal your money from a bank than to go to Fort Knox to get it.”
When TAPA was first created by high-tech companies in the United States in 1997, cargo crime was predominantly about thefts from facilities. We helped companies to safeguard against this with our Facility Security Requirements (FSR). Later, it was obvious that it wasn’t only high-tech goods that were at risk and, as facilities became more secure, criminals turned their attention to products being carried onboard trucks. TAPA’s Trucking Security Requirements (TSR) now help our certified members to make their transport operations more resilient but for the industry as a whole, this is now the greatest threat.
High demand In Europe, the lack of secured parking locations means trucks are regularly targeted when drivers take rest breaks on industrial estates and at service stations. We are seeing the increased used of ‘jamming’ devices that interrupt GPS systems and impair the ability for security monitoring centres to locate vehicles, as well as cases of ‘Theft from a Moving Vehicle’ where some gangs have perfected the ability to steal large quantities of products from trucks that can be travelling at 70-80kms an hour. We have evidence of fake ‘police’ stops and, in the last year or so, we have also seen a growing number of thefts of vehicles and loads from companies that have contracted with what turn out to be fake or fraudulent companies using online freight exchange portals.
One of the initiatives we have launched to encourage more companies to reduce the risk of cargo crime is to launch entry level self-certification for our FSR and TSR security standards. Having earlier recognised the high demands on government budgets and police resources, I am pleased to say that we are seeing a very positive shift in the approach being taken by some countries and their law enforcement agencies. There is a growing realisation in countries such as the Netherlands, UK and Germany that cargo crime is a serious and growing problem with potentially heavy economic consequences. Moreover, there is an understanding that the best way forward is to embrace public-private partnerships, and TAPA is totally supportive of this approach.
We are working increasingly closely at the EU level and with government ministries. We liaise with INTERPOL, Europol and TISPOL and are exchanging more information with law enforcement agencies at a national level. This is very encouraging and it is something TAPA is keep to promote globally because amidst all of the uncertainty and under-reporting of cargo crime around the world, the one thing we all seem to agree on is that the threat is going to increase.