Transport Security

The risk of theft in the supply chain

Recorded cargo crime rises to its highest-ever level in EMEA, and new technologies could make it ever easier to commit, says Thorsten Neumann, chairman of TAPA EMEA

In 2017, the Transported Asset Protection Association (TAPA) marks its 20th anniversary. Founded originally by high tech manufacturers in the U.S. to combat increasing losses from their supply chains, today cargo crime is a global phenomenon that places virtually every product at risk.

In the Europe, Middle East and Africa (EMEA) region, recorded cargo thefts reached a new record in 2016, and figures for the first half of this year put 2017 on track to set yet another new high. One of the best and most respected barometers of cargo crime in the region is the association’s Incident Information Service (IIS), which uses data from its members, insurers, media sources and law enforcement agencies to provide a tangible insight into the level and types of crimes taking place.

Last year, TAPA’s IIS recorded 2,611 new cargo crimes in EMEA, a 72.3 per cent rise year-on-year. The total loss value for the 43.5 per cent of incidents providing financial data was €77.6 million. The average loss for the 133 major freight thefts exceeded €350,000 as crimes were reported in 34 countries. IIS data for Q1 2017 rose 59.6 per cent over the same three months of last year as the association was notified of a further 709 crimes in 18 countries. In this period, 62 per cent of reported product thefts gave a value, totalling €43.4 million, and the average loss for the 40 major losses was €683,127.

The driving force behind cargo crime
When TAPA was first launched, most cargo crimes involved thefts from warehouse facilities. However, it’s a very different picture today. TAPA’s Facility Security Requirements (FSR) security standard, alongside advancements in physical security barriers and technology-based solutions that protect buildings and their perimeters, have made warehouse operations more secure than ever before. Last year, in EMEA, only 3.9 per cent of cargo thefts recorded by TAPA’s IIS involved Theft from Facility.

In recent times, cargo thefts almost all involve attacks on trucks, and often their drivers. Last year, nearly 90 per cent of recorded cargo crime incidents involved trucks, arguably the most vulnerable and isolated part of every supply chain. With drivers’ hours strictly regulated and a distinct lack of secure parking places, especially in Europe, vehicles loaded with hundreds of thousand of Euros worth of products are now regularly forced to park in unsecured lay-bys or on industrial estates while drivers take their mandatory rest breaks.

In the first three months of 2017, TAPA EMEA’s intelligence showed 78.7 per cent of crimes involved theft from vehicle and 72.4 per cent of thefts took place when trucks stopped at unsecured parking locations.

Attacks on vehicles take several forms. Without doubt, the most frequent criminal modus operandi is so-called ‘curtain cutting’ as thieves slice open the tarpaulin sides of trucks during the night and often escape with hundreds of thousands of Euros of goods. Roadblocks, sometimes involving bogus ‘police’ officers, are often seen on the continent, while countries such as South Africa, Italy and France are regularly the scenes of violent truck hijackings by armed offenders. Some truck drivers and security guards have lost their lives in these attacks. Attacks on moving trucks are also recorded every year and one of the latest concerns is the huge number of thefts from trucks stopped at UK motorway service areas.

Action is clearly urgently required to help protect trucks and drivers. The devastating use of trucks by terrorists to mow down innocent victims in Nice and Berlin in the past 12 months, as well as the weekly chaotic scenes of migrants trying to board trucks in the Calais area, are raising the issue of trucking security to a new and unprecedented level.

This summer, TAPA and the Cross-border Research Association (CBRA) will deliver a new security toolkit for the road freight transport sector within the EU that has been commissioned by the European Commission’s Directorate-General for Mobility and Transport (DG MOVE). It will contain comprehensive, consistent and good practice operational guidance to help address these risks.

TAPA has also just launched new Parking Security Requirements (PSR) with the aim of identifying a network of secure parking locations across Europe. This will be supported by an online tool that enables its members to see all of the cargo crimes reported on specific transport routes across the continent and to plan their supply chains accordingly. The association has already identified some 520 sites in 35 countries and it plans to approach parking place operators to convince them of the potential new business that will result from providing the degree of on-site security TAPA’s new PSR calls for.

The Manufacturer and Logistics Service Provider members of TAPA are known to already achieve a far higher level of supply chain resilience through their own in-house security programmes as well as the security standards, intelligence, training and networking they gain from their membership of the association. The biggest threat is to companies in the wider industry that continue to ignore the risks.

Products such as laptops, smartphones, tablets and other high tech goods are still high on the target lists of cargo thieves but data shows that today they will find a ‘black market’ for just about anything they can lay their hands on. Food & Drink is now the TAPA EMEA IIS product category with the highest number of losses. Add to this Clothing & Footwear, Furniture/Household Appliances, Cosmetic & Hygiene products, Tyres, Car Parts, Tobacco, Tools/Building Materials, Metal, Pharmaceuticals, Toys/Games, Cash, Sports Equipment … the list is now seemingly endless.

Recording accurate crime data
One of the biggest challenges remains getting full and accurate cargo crime data. Even though incidents reported to TAPA’s Incident Information Service do not ask for the names of companies which are victims of attacks, there remains a clear reluctance on the part of many organisations to admit they have incurred losses.

The association has successfully nurtured strong data sharing relationships with law enforcement agencies in the UK, Netherlands and, most recently, Sweden in order to gain more intelligence. However, building a clear picture of the level of cargo crime remains extremely difficult in other parts of the EMEA region. One thing is certain, it is significantly higher than the number of recorded crimes suggests.

In 2016, the UK, Netherlands, Germany and Sweden accounted for 86.5 per cent of crimes reported to TAPA EMEA. In the first quarter of 2017, the UK and Netherlands alone represented over 85 per cent of the new crimes recorded in the association’s incident database, based on the willingness of police in those countries to collate data correctly and notify TAPA of freight thefts.

Elsewhere, countries where companies are known to regularly suffer cargo losses are lagging behind in terms of intelligence sharing, increasing the risks to transportation and logistics operations and, many would say, their local economies. Q1 2017 data reported by TAPA’s IIS showed only a total of 37 cargo crimes in Belgium, France, Germany, Italy, Poland, Russia and Spain, and just nine in South Africa. There is general agreement among supply chain security professionals that this represents a fraction of the true picture.

For companies that are victims of cargo crime – especially those that have clearly failed to take adequate precautions to protect their supply chains or their customers’ goods – the consequences can be substantial; lost business, damaged reputations, and higher insurance premiums to name but three. The impact is far greater than simply the cost of the stolen goods. One study involving the pharmaceutical industry put the true cost of loss at five-seven times the value of the goods stolen once the entire recovery process has been accounted for. And this only represents the challenges that exist today.

What of the future?
The world is changing and those changes are being driven by technology. This October in London, TAPA will host its biggest-ever conference for global supply chain security professionals to discuss the impact of developments such as driverless trucks, drones, robots in warehouses and 3D printing. They are all emerging with increasing speed and while some welcome a reduction in the ‘human’ element of supply chains, thinking it will eradicate the likelihood of ‘inside job’ crimes, others fear these technologies will play directly into the hands of cyber criminals who will be able to hack into control centres and divert deliveries to anywhere they want.

Criminals regularly demonstrate their ability to overcome the best laid plans of companies to secure their goods in transit. Simple GPS ‘jammers’ that can cost as little as €30 online, for example, are regularly used to block positioning signals from trucks to their very sophisticated security monitoring centres. They can make trucks ‘disappear’ long enough for their entire loads, and often the vehicles themselves, to be lost without trace.

Today, cargo crime is globally regarded as a multi-billion dollar ‘industry’ and the level of threat is growing. The worst thing any company can think is that it will never happen to them.