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David Fairnie

Worldwide, cargo shipping faces a myriad of threats whether in transit, when stored in warehouses, and even when it reaches its final location. This risk of theft applies for cargo regardless of the modality used for transportation, whether via air, sea, land, or all three, and threatens Organisational Resilience if the threats are not recognised and appropriate loss prevention mitigation techniques applied.

David Fairnie, guest contributor

Identifying the Threat
of Cargo Theft
Cargo crime continues to rise as strategies employed by thieves diversify and evolve, challenging organisations that must also be agile and adapt to these new threats. Thieves use a multitude of tactics to steal cargo. Often, the particular theft modus operandi is regionally specific. For example, in Latin America and South Africa, cargo hijacking while trucks are in-transit to seaports is a popular tactic. In Europe, thieves predominantly use a “slash-and-grab” tactic, slashing through a soft-sided trailer to steal cargo. Additionally, thieves may steal cargo by breaking into warehouses and facilities, posing as a legitimate carrier to fictitiously pick up cargo or trucks, or outright steal entire trailers or trucks from port facilities. One of the more prominent examples of this type of theft occurred in Canada in 2015 when thieves stole a shipping container loaded with $10 million of silver from Montreal’s port.
Looking at the highest areas of concern for cargo theft globally, Brazil, Mexico, India, the United States, and Germany are the top-ranking countries. Tactics used by thieves in these countries can vary, but in general cargo thefts tend to involve a higher proportion of truck shipments over any other transportation modality. This is not to say that freight carried or intended to be taken by ship is excluded from the risk of cargo theft, as the incident in Canada demonstrates that the threat extends to these points in the supply chain, albeit at a lower rate. Often, cargo thefts that occur at port facilities, involve some element of corruption, with supply chain actors either participating directly or providing critical inside information to thieves.
This past year, as a result of COVID-19 lockdowns and consumer demand for certain products, we witnessed strategies employed by thieves shifting. Specifically, BSI intelligence data identified increased targeting of food and beverage commodities and alcohol and tobacco, likely due to the increased value resulting from panic-buying, stockpiling, and shortages. Consumer products, such as hand sanitizer and cleaning supplies, and medical devices and supplies, including PPE, were targeted at elevated rates in many regions due to their high demand and subsequent shortages. As lockdowns continue into 2021, warehouse facilities where these items are stockpiled may continue to face an increased risk of theft.

Top Countries compared for theft

The Bigger Picture
A resilient supply chain, effective in mitigating loss is often measured in loss ratios, compliance scores, on-time deliveries, and bottom-line cost savings. However, a truly resilient supply chain arguably means that an organisation’s logistics infrastructure and operations are not used as a conduit for criminal and corrupt activity and that shipping is done in a responsible manner, minimising risk to the business, operations, and employees.
The issue of cargo crime is just one challenge an organisation must face in any typical year. 2020 was far from a typical year. Due to COVID-19, supply chain resilience was pulled into the public eye to an unprecedented degree. Supply chain disruptions, including large cargo theft rates and added exposure for goods stockpiled in warehouses, were a chief concern for companies and consumers alike. With massive supply chain shortages around the globe for items critical to combatting the early spread of the virus, including medical masks, hand sanitizer and other essentials, the threat of cargo theft was at the forefront of concerns for organisations even more. Particularly those not used to experiencing as high of a risk – in comparison to industries like electronics, which due to the inherently high value, tend to be stolen frequently.
Early in 2020, the BSI SCREEN Intelligence team began noting cargo thefts of daily necessities in locations, like China and Hong Kong, where these types of crimes occur at a relatively lower rate compared to other cargo theft hotspots around the world. Organisations that moved swiftly to track the situation beginning to unfold were at a much more significant advantage to mitigate losses. While the events of 2020 were unprecedented in the way that they impacted supply chains on a global level, the vital take-away is that the changing tactics, trends, and wilfulness of cargo thieves can have a significant rippling effect on supply chain resilience. Not only can there be a sizeable financial downside to theft, but the security of personnel, product, and reputation are all at risk when supply chains are exposed to vulnerabilities.

In 2020, the countries with the largest amount of reported theft incidents were Brazil, Mexico, India and Germany; however, types of cargo stolen vary.

Mitigating the Risk
Organisations looking to reduce the risk of cargo crime in their supply chain need to primarily understand the varying type of risk common to each country of operation. To build a supply chain that is ahead of the criminal tactics and trends, organisations should secure their supply chain by implementing specific security procedures dependent on the identified level of risk exposure, while concurrently providing appropriate awareness and training for staff. Organisations must also remain current on the primary trends in cargo theft risk and be aware of their evolving nature these take over time.

BSI’s risk assessment mapping

Looking at prevention, organisations needed to consider risk mitigation to cargo as it moved through the supply chain. Protecting cargo in transit can involve adding locks and seals to trailers, route risk analysis and training drivers to be aware of problematic routes. While at rest stops and parking locations, drivers should maintain strict protocols with monitoring their vehicles. To prevent occurrences of theft, organisations should invest in and deploy a combination of driver training and technology for monitoring cargo status. Warehouses and facilities storing and distributing high-value products should be more vigilant than ever with security protocols, as criminals are increasingly targeting these locations due to the lull in the flow of goods during the COVID-19 outbreak and lockdown cycles.
Overall, with cargo theft on the rise and a rapidly changing market for criminals, securing an organisation’s supply chain against cargo theft is of the utmost importance. Identifying the threat of cargo theft globally and for an individual organisation, understanding the overall impact and significance of the risk, and taking appropriate and proactive measures to decrease these risks is the best way to ensure Organisational Resilience and combat cargo crime.