Security procedures promoted in new cargo claim analysis

Malcolm Latarche
Malcolm Latarche
ShipInsight

10 July 2019


UK-based transport and logistics insurance provider TT Club and BSI Supply Chain Services & Solutions have teamed again to produce a full year analysis of cargo theft, together with some further loss prevention commentary to assist those considering how to combat this on-going threat.

The perils of cargo theft continue to plague stakeholders throughout the global supply chain. There are many resultant facets of this phenomenon; in addition to the direct financial cost there are hidden and often more significant consequences connected to loss of market and brand reputation, which leave no stakeholder unaffected. There are additionally incalculable societal costs when considering that the proceeds of cargo theft will frequently finance other illicit trades.

This second study highlights prevailing trends on both a regional and global basis. In terms of the commodities being targeted – whilst no cargo is without risk – overall, food and beverages, alcohol and tobacco and consumer products account for 49% of all cargo stolen globally. Electronics and clothing account for another 12% respectively and together make up the top 5 targeted commodities.

As noted in the previous report, the modus operandi of the criminal fraternity by region is well-established, with some intra-regional spikes in activity. In Europe, over 75% of cargo theft occurs whilst in transit; with ‘slash and grab’ tactics accounting for 50% of all reported losses. This reflects a combination of the very low number of secure parking locations and the lack of enforcement resource to target this type of crime across Europe. Given the high number of unsecured vehicles parked across the region there is little need for criminals to take greater risk in targeting warehouse facilities. The United Kingdom accounts for an overwhelming 86% of reported incidents with thefts performed predominantly on a Tuesdays, Wednesdays and Thursdays.

Across Asia, China and India are the countries where cargo theft is most frequently recorded. The most commonly targeted commodities in the region are food and beverages, metals and electronics, most likely influenced by local market conditions. Whilst theft of cargo in transit is prevalent, the insider threat is more pronounced, as is the risk of theft from warehouse facilities.

The Middle East and Africa region continues to be blighted by less sophisticated but more violent hijackings. Cargo in transit is heavily targeted with tactics such as the impersonation of enforcement personnel often being selected as an effective means of compelling drivers to stop at the road side. Corruption in the region also plays a significant role in cargo theft incidents. Food and beverage cargoes are the most commonly targeted across the region.

In North America there are two distinct intra-regional trends. The first, concerning the United States and Canada, evidencing similar experience to Europe, with the perpetrators focusing on unattended and unsecured vehicles. The second trend is the much more aggressive and violent tactics employed by criminals in Mexico and the Central American countries. Food and beverages and consumer products top the list of commodities targeted in North America. No other region suffers from a higher rate of truck hijackings than South America. Hijacking incidents have been recorded in almost every country in the region in 2018, while Brazil accounts for 68% of all recorded incidents. Theft in transit accounts for over 75% of all incidents, with Tuesdays, Wednesdays and Thursdays being the most frequently targeted. Similar to elsewhere globally, the favourite commodities for criminals are food and beverages and consumer products.

One vulnerability identified by BSI and TT Club through data analysis was the seemingly growing risk presented by the “insider”. People prove to be an organisation’s greatest asset, but also, on occasion, a substantial vulnerability risk. As organisations implement increasingly sophisticated physical and procedural measures to protect their assets from external threats, the recruitment of insiders becomes a more attractive proposition for those attempting to gain access.

The report considers this risk exposure in detail and provides a series of practical considerations and mitigation strategies. The report highlights the importance of due diligence through recruitment and maintaining sound management controls. It is recommended that organisations implement layers of defence, starting with physical aspects, followed by clear management level procedures and policies. Consideration should be given to operating on a least privileged principle, where information and access are limited to a ‘need to know’ basis.

Having a sound communication policy both internally and externally, supported by frequent awareness briefings and training programmes for employees, are considered key strategies to protect businesses. Conducting comprehensive risk assessments to determine the threat landscape and understand the potential exposures will allow businesses the opportunity to prioritise and implement risk treatment options as necessary.

It is clear from the report that the perpetrators of cargo theft are sophisticated and determined. Whilst numerous organisations are making good progress in fighting this type of crime, the criminals are able to adapt and implement new tactics to realise their goals. By sharing the knowledge and advice in this report it is hoped that direct stakeholders in the supply chain will be better positioned to protect their assets, mitigating the potential risks associated with cargo theft. Furthermore, it becomes recommended reading for the broader enforcement community to recognise the connections to other crimes, such as trafficking, counterfeiting and terrorism.