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BIFAlink


Policy & Compliance


www.bifa.org


Global shipping faces troubling new questions on smuggling


As containerships become bigger, drug smugglers are growing bolder in hitching rides on commercial supply chains, writes Costas Paris


Global shipping companies are wrestling with apparent growing demand in a sector that they do not want and that has law enforcement authorities around the world on high alert. Ocean carriers saw a series of seizures of large shipments of


drugs in the US and Europe in 2019, which officials say are a sign of the growing use of commercial ships for increasingly large loads of cocaine, heroin and other drugs. Officials say the growing scale of shipping operations, with the biggest containerships doubling in size over the past decade, has made them an attractive target for drug traffickers. Ship operators are under pressure to deliver vast amounts


of cargo on time, and the rule of thumb around the world is that only one in 10 containers gets checked as boxes move quickly through ports and into sprawling, complicated logistics networks.


Cost factor Containers are also the cheapest way to ship cargo. It can cost up to $1,500, on average, to ship a box from South America to Europe or the US. “It is remarkably cheap, and economies of scale work for


both legal and illegal cargo owners,” said Andrew Kinsey, a senior marine risk consultant at Allianz Global Corporate & Specialty, the commercial-insurance arm of German insurer Allianz SE. “Giant boxships now make the movement of illegal cargoes more reliable and more difficult to detect.” Seizures of cocaine onboard commercial ships and private


Seizures of cocaine onboard commercial ships and private vessels worldwide more than tripled over the past three years


10


vessels worldwide more than tripled over the past three years, to 73.2 tonnes in 2019 from 22.4 tonnes in 2017, according to Resilience360, which monitors risk and disruptions across supply chains and is owned by German logistics company Deutsche Post DHL. For ocean carriers and their shipping customers, the moves


by drug smugglers to piggyback on their operations raises new concerns for international supply chains. The drive to stem the drug flows is raising costs and slowing shipments, while highlighting the tough security questions that are arising as operators pursue greater size and speed. An official at the port of Antwerp in Belgium said officers


there rely on cargo declarations to allow incoming boxes to move out of port. “Ships line up to dock and unload and they are all in a hurry. If you do not have information about a specific box, it is like looking for a needle in a haystack,” the officer said, asking not to be named because he is not authorised to speak to the media.


Antwerp is one of Europe’s biggest ports, handling more


than 11 million containers a year. Customs agents there seized around 50 tons of cocaine in 2018, 22% more than in 2017 and six times more than in 2013. Other ports chosen by smugglers include some of Europe’s


biggest entry hubs, such as Rotterdam and Hamburg, as well as terminals in Spain and the UK. “We see a lot of seizures all over Europe, which is an


attractive destination because the street value of drugs is higher than in the US,” said Shehrina Kamal, a risk monitoring director at Resilience360. Once the contraband containers leave port on trucks or by


rail, the chances of being discovered drop even more as there are no border checks among European Union members. Cocaine, increasingly, is also being moved by ships doing


regional South America sailings. Brazil’s Department of Federal Revenue said in November that cocaine hauls at the country’s ports jumped 50% in the first 10 months of 2019, compared with the same period the year before.


Cocaine haul The issue came to prominence last June when US Customs and Border Protection agents made their biggest-ever cocaine seizure. Agents found a 20-ton haul of the drug aboard the MSC


Gayane, a 1,031 ft containership that had started its trip in Chile and was heading into a stopover in Philadelphia before a planned sailing across the Atlantic Ocean for calls in Rotterdam and Antwerp. The ship was operated by Switzerland-based Mediterranean


Shipping Co (MSC), the world’s second-biggest liner company. The seizure proved costly to MSC, as it took a big boxship out of operation for several weeks during the investigation while customer cargoes were delayed. The probe also found deeper concerns in the trade.


Authorities said their investigation showed several crew members were involved in getting the cocaine on board, and they used the ship’s crane to bring in sacks of cocaine from smaller vessels off the Peruvian coast. Shipping and law-enforcement officials say they believe


about a third of cocaine cargoes from South America are moved around the world on commercial ships. That reflects a shift in the way drugs have long been


distributed. US Customs officials say traditional methods, like small planes operating from private airstrips, speedboats and mini-


March 2020


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