Has the Supply Chain Become the Weakest Link?
It takes a global pandemic to recognise the contribution of the logistics sector to everyday life, with humble lorry drivers being transported to the status of “key workers,” ensuring the essential wheels of industry keep turning. However, the global supply chain is only as strong as its weakest link, and there is growing evidence that it has become its own worst enemy in terms of vulnerability. Crime in the supply chain has always been a moving target, literally, but the accelerating growth in online retail due to the novel coronavirus pandemic has made goods in transit especially attractive to opportunistic and organised criminals who all-too-easily recognise the rich pickings to be had from the first order to final-mile delivery.
COVID-19 has created a lot of goods lost in transit (GLIT) claims. Some of them have been malicious opportunism. Others may have been stolen in transit or at the point of delivery by so-called “porch pirates” who hoover up unattended packages left by courier companies, a trend that has increased in line with the sheer volume of orders and been compounded by lighter-touch proof of delivery protocols put in place to maintain social distancing. In just one example last year, almost 7,750 parcels were stolen from Surrey doorsteps in just six months as one complaint company reported a “lockdown spike” in theft between April and September.
Martyn James of complaint-resolution service Resolver said the lockdown spike is significant as the previous six-month period incorporated Christmas, when complaints are traditionally far higher. “All in all, we received 93,380 complaints about delivery from Surrey residents in the five years Resolver has been around, yet this is the tip of the iceberg. The fact of the matter is many more complaints about delivery are registered against online retailers, so the actual figure will be a great deal higher.”
According to other research, general online purchases increased by an average of 129 per cent in the first few weeks of the pandemic, so it is therefore not hard to recognise increased opportunity for theft as a result of issues such as lone working and increased demand for delivery drivers, a sector of the community that was already under pressure with a 70,000 shortage of qualified drivers in the UK. Put simply, with more high-value items on the move than ever before—often in relatively insecure vehicles where product security is in the hands of lone-working drivers, many of whom, increasingly, have had their vehicles broken into or, worse, have brazenly been threatened, assaulted, and robbed of their precious cargoes—it is easy to see where those weak links are.
The problem is worldwide because of globalisation. Supply chains have been stretched across multiple territories with multi-faceted partners and ever-moving parts, making investigations and due diligence increasingly problematic while the world is being encouraged to stay home and buy everything digitally.
According to 2020 reports from Transported Asset Protection Association’s (TAPA), Incident Information Service (IIS), more than €85 million worth of products were stolen from air, road, sea, and rail freight supply chains in forty-six countries in the Europe, Middle East, and Africa (EMEA) region in the first half of 2020, even with national COVID-related lockdowns restricting people and vehicle movements. Overall, for the first 182 days of 2020, the IIS database recorded 3,278 cargo theft incidents with over €52 million of the €85 million being attributed to ninety-six major incidents (“major” meaning crimes with individual losses of goods worth €100,000 or more). The average value of products stolen in these cases was €542,761.
While the activities of opportunist, ad hoc cargo thieves almost certainly reduced in the first six months of the year, TAPA says its intelligence indicates the strong presence of organised crime groups (OCGs) across the EMEA region and suggests many were “stealing to order” given the number of losses of personal protective equipment (PPE) and other in-demand goods, such as food and drink, cosmetics, and hygiene products.
In the biggest single loss of PPE, 2 million face masks and other PPE equipment valued at €5 million was stolen from a warehouse in Santiago de Compostela in northwest Spain in April.
At the time, Thorsten Neumann, president and CEO of TAPA EMEA, said, “It clearly takes more than a global pandemic to stop the activities of organised crime groups. Anecdotal evidence also suggests an increase in cases of ‘stealing to order’ for goods in high demand during the early months of the pandemic. Our IIS database recorded a higher than usual number of incidents in which, for example, multiple vehicles in parking locations had their tarpaulin curtains slashed by thieves looking for products, but no goods were taken in the attacks. This indicates offenders had very specific types of products in mind and, almost certainly, black market customers already lined up to buy the goods.
“Drivers are extremely vulnerable, and sadly, we record not only many violent attacks on drivers but also several fatalities every year. Criminal groups know that, in the majority of cases, the driver is the only person standing between them and the high value of goods that can be found onboard their vehicle. This explains why virtually all cargo thefts now recorded by TAPA’s IIS—over 95 per cent—involve attacks on trucks and last-mile delivery vehicles as opposed to thefts from facilities.
“Warehouses and distribution centres tend to be more heavily populated with staff and protected by a range of sophisticated physical barriers and security technologies. Whereas, for example, the lack of secure truck parking, especially in Europe, means drivers with high-value loads are often forced to park in areas with no protection, making them a far easier target.”
Typically, the high-demand theft items include computers, laptops, smartphones, tobacco, clothing and footwear, cosmetics, hygiene products, and pharmaceuticals, and TAPA echoes the warnings from Interpol about the risk to the vaccine supply chain as millions of doses travel across the globe in the next few weeks and months. The United Kingdom recorded the highest number of major cargo losses in the TAPA IIS database in the first quarter of 2020, with 56 or 63.6 per cent of all crimes having a value of €100,000 or more. These produced a total loss of €27,658,653 or an average of €493,905 per incident. This was largely due to the high level of support and intelligence TAPA receives from UK law enforcement agencies, as opposed to an indication that the UK crime rate is significantly higher than in other countries in EMEA.
These big-ticket organised heists included an €8 million violent theft of computers and laptops in Nuneaton and €1,098,500 worth of clothing and footwear stolen from a facility in Lincolnshire, both of which happened in March. Thefts that made headlines include a €1,144,805 theft of sporting goods stolen from a warehouse in Grimsby on 2 April and a €3,295,500 theft of an HGV semi-trailer and its load of tobacco from a location in Daventry in the UK East Midlands on 27 May.
Just five of the forty-six countries recording cargo theft incidents in 2020 accounted for 87 per cent of losses reported to TAPA’s IIS. In addition to the UK, Germany reported 827 or 25.2 per cent of the total, the Netherlands accounted for 170 or 5.1 per cent, while Spain saw 129 or 3.9 per cent of incidents. TAPA also continued to see more reporting of cargo crimes in Africa, with incidents recorded in nineteen nations: Angola, Benin, Burkina Faso, Congo, Côte d’lvoire, Equatorial Guinea, Gabon, Ghana, Kenya, Malawi, Morocco, Mozambique, Namibia, Nigeria, South Africa, Togo, Tunisia, Zambia, and Zimbabwe.
The figures can be confusing, however. According to experts, countries and regions with the highest levels of recorded cargo crime do not necessarily present a greater risk than geographies with far lower rates of recorded incidents. Often, forecasters claim, higher numbers are simply the result of greater intelligence reporting by law enforcement bodies. It could even be argued that it is easier to manage supply chain risks in countries with higher incident rates because we have far more intelligence of when and where thieves are operating, the methods they are using, and the products they are targeting. It is much easier to plan security protocols when you have this type of intelligence available.
The rise in figures squares with evidence of a wide range of retailers and logistics companies, many of whom are talking to each other through organisations such as the Logistics and Supply Chain Forum facilitated by ORIS Forums. ORIS is a not-for-profit organisation that also lobbies for assistance from the wider law enforcement community, Government, and other trade bodies such as the Road Haulage Association (RHA) and Logistics UK, the body replacing the Freight Transport Association in the UK.
Many organisations report vulnerable hot spots and specific modus operandi of home-grown and international criminals, an increasing number of whom are using violence as a calling card. Many organisations have also invested heavily in security technology, including lone-working alarm devices and driver training as well as tracking devices on high-value stock and vehicles.
Businesses are also heavily engaged in compliance training to ensure safe practices are adopted but, where evidence exists, also focusing on potential collusion investigations, especially where coercion or threats of violence may have been brought to bear. Although there is certainly evidence of what is classically referred to as an “inside job,” this only relates to a small percentage of the crimes reported to TAPA’s IIS database. The organisation argues that companies that use a wide range of vetting, monitoring, and security technologies discourage these types of incidents despite the temptation of being surrounded by desirable products.
Many UK-based supply chain companies also call for greater Police intervention, particularly in the final-mile deliveries, through the intelligence gathered from the industry and passed on to law enforcement. At a strategic level, many have been working with the National Business Crime Centre (NBCC), which leverages the intelligence gathered from groups such as ORIS Forums and the new security forum of the Institute of Couriers, which has recently been established to focus upon final-mile delivery vulnerabilities.
International brands also work with bodies such as TAPA and Europol because of experience of supply chain vulnerabilities further downstream where organised gangs also operate in Europe and Asia. Europol’s Serious and Organised Crime Threat Assessment (SOCTA) has previously stated that over 5,000 organised crime groups of 180 nationalities are under investigation in the EU. It also found that 45 per cent of the OCGs identified are involved in more than one criminal activity to mitigate risks, reduce operational costs, and increase profit margins. Furthermore, they are highly flexible and able to shift from one criminal activity to another as new profit opportunities occur. Cargo theft is one of these activities for OCGs involved in a variety of different criminal activities.
Thorsten Neumann said, “There is a strong representation of organised crime groups involved in cargo crime, and there is plenty of intelligence to show their engagement in cross-border thefts from supply chains. We have seen many incidents involving criminal groups from eastern Europe, for example, which are operating in western Europe. Moving stolen goods quickly across borders makes the subsequent investigation work by law enforcement agencies more complex and time-consuming, and crime groups know this.
“OCGs are also active nationally, particularly in countries such as the UK and Italy. Europol and other national law enforcement agencies have enjoyed a lot of success in targeting and breaking up OCGs and prosecuting members of these groups, but it remains a major concern. They tend to be well organised, well equipped, and increasingly sophisticated in their planning and implementation of attacks. Another significant factor here is that the significant revenues generated from cargo thefts can be used to fund other serious OCG crimes.”
The Potential Impact of Secure Parking
Thorsten continued, “Home-grown opportunists also remain a threat, and this often includes employees of companies who either steal goods themselves or provide information that helps others commit crimes against their employers. A high percentage of crimes involving thieves targeting trucks parked in unsecured parking locations, such as motorway service areas, industrial estates, and in laybys close to major highways, involve these types of criminals. In most cases, they simply cut the tarpaulin curtain of a vehicle to access the goods inside.”
One asset protection specialist working for an international lifestyle brand said, “We’ve seen a massive spike in our cargo thefts, particular in Germany and the Nordics. There are also major concerns around port operations in Duisburg suggesting collusion with ORC gangs to target and steal our stock. There is also concern around new EU law changes that may mandate EU drivers to take sleep breaks away from their cabs in a hotel. Again, how do we prepare for this eventuality as we’ve seen thefts from containers at rest locations and theft of entire containers from ports and distribution centres?”
Such events highlight the systemic nature of the problem. In the UK, secure parking for truck stops and service areas has always presented security problems. In the RHA’s 2020 budget submission to Government, it highlights that according to the Department for Transport’s own figures, there was a shortage of 3,000 safe and secure parking spaces in the UK in 2013. Last year, the figure had almost quadrupled to 11,000. This is a result of more goods being transferred by road and more long-haul drivers, who having completed their legal hours for the day, resting at the side of roads, an issue that creates criminal hot spots along major A and B roads across the UK.
According to TAPA’s Thorsten Neumann, unsecured truck parking areas present the greatest risk, wherever they may be. “Obviously, trucks parked in laybys on open roads are a significant target, especially overnight. But these types of quieter locations are not the only focus for criminals. We record a substantial number of high-value losses from trucks parked in motorway service areas, for example, which are extremely busy environments day and night. Airports and ports, however, see a significantly lower number of cargo thefts because of their security perimeters and more advanced security systems. It makes little sense for cargo thieves to target goods in these locations, where they face a much higher risk of being caught, when they can simply follow trucks from such locations and wait until they stop en route before committing thefts.”
The problem, according to the RHA, is caused by a lack of direction in national planning guidelines, which means local authorities are not mandated to build more safe and secure lorry parking. It therefore calls upon Government to change the regulations and make it easier for councils to build more lorry parks, particularly along strategic transport corridors. It is a proposition that makes sense in the current climate where lorry drivers are hailed as key workers, yet they are denied safe places to stay overnight while they are still at work.
Many of the motorway service areas (MSA) where there have been major incidents, including unattended vehicle break-ins, are now working with the heavy goods vehicle (HGV) community and law enforcement in the form of the National Vehicle Crime Intelligence Service (NaVCIS) to make MSAs safer.
Leading motorway service operator Roadchef started the security initiative in 2016, investing in high-quality CCTV, including live monitoring. In addition, the business has recently seen increased communications from the drivers themselves reporting issues, working closely with the Police, the RHA, and other MSAs. This is helping to prevent and detect crime to make lorry parks safer and more secure. The project also involves MSA providers Welcome Break and Moto, to better protect the broader HGV community.
Andy Green, Roadchef’s head of loss prevention, spent seventeen years with Greater Manchester Police (GMP) before moving into a private-sector risk role. He said, “We started the initiative talking to the RHA and NaVCIS during one of our regular meetings to discuss ideas and share information. It’s great that alongside Roadchef, the major motorway services area providers are working together on campaigns to help protect the HGV community. These essential workers rely on our facilities as they move up and down the country, so it’s vital that we keep them safe. We use the intelligence that we share between the providers and the Police to target-harden security measures where there is a problem and where there may next be a similar issue.”
Thorsten Neumann added, “IIS also aligns with our Secure Parking Online Tool, which shows the locations of secure truck parking sites participating in TAPA’s parking security requirements (PSR) standard. This is also vital information because goods at rest are goods at risk. Ensuring a secure parking environment for when drivers must take mandatory rest breaks is a critical factor in cargo security. In addition, TAPA uses cargo theft data to provide our members with regular incident alerts of cargo thefts or new crime trends as well as sharing monthly, half-yearly, and annual cargo theft data and analysis reports.”
COVID-19 accelerated the growth in online shopping as it became the go-to service while physical stores remained closed. Porch pirates and organised criminal gangs have been among the main beneficiaries of this seismic shift. The retail community has responded by actively collaborating with its own competitors, as well as law enforcement and expert organisations, to better share intelligence and best practice to keep the delivery wheels moving while thwarting the activities of those supply chain bandits who target the weakest links.