SUPPLY CHAIN SECURITY ADVICE TYPES OF CARGO THEFT 2019


Food & beverage Metal & cable


2019 2020


Construction materials & Industrial equipment


Household appliances & electronics Auto parts & tires Household goods Clothes, shoes & textiles Alcohol Chemicals


Others *Includes 9 categories (Tobacco, Pharma, Sporting goods)


22.1% 24.0% 11.3%


6.3% 4.8% 3.8% 3.8% 4.8% 2.5% 16.6%


2020


27.8% 12.5%


9.8%


8.0% 7.3% 6.1% 5.2% 3.6% 1.5% 18.2%


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To help supply chain security stakeholders, the report offers clear loss prevention guidance. In the key area of due diligence, it recommends: “Performing sufficient due diligence checks will assist businesses to protect themselves and the cargo that they take into their care, custody and control from this type of risk.” While not an exhaustive list, it advises operators to consider:


• Full and legal name and registered address of the supplier


• Details of other branches (nationally or internationally)


• Contact details (telephone and email) • Web address


• Verify ownership (taking account of regulations, such as sanctions, as appropriate)


language versions for TAPA EMEA members to download from the Association’s regional website, also includes case studies from companies which have fallen victim to fraud. In one of these cases, involving the outsourcing of transportation via an open freight exchange, the report states: “The entity awarded the freight contract was neither a carrier nor a forwarder. In business terms, it didn’t exist.”


The case studies describe, step-by-step how such diversions are arranged and how types of fraud are employed to ultimately complete the thefts. Mike Yarwood, TT Club’s Managing Director of Loss


Prevention, highlights the report’s important role in mitigating these incidents. “Above all else, awareness is crucial. Everyone within transport and supply chain service companies needs a degree of knowledge of the risks and how perpetrators of theft operate. Our report is aimed at providing detailed data but also provides a wealth of guidance on creating this awareness as well as further actions to be taken by operators in avoiding loss and damage to their customers’ cargoes and their own business reputations.”


A regular feature of cargo thefts in Russia involves drivers being contacted en route by supposed employees of their customer to divert the delivery to an alternative address, from where shipments ultimately disappear. The report explains how this practice works, the preparation and research criminals carry out, how they use delay tactics to conceal the fact the cargo has been stolen, and, ultimately, cease all communication. “Criminals actively employ their risk-benefit analysis models to


justify the specific way of attacking cargo. They realise that security controls in high-value sectors, such as tobacco, are much stricter, resulting in a high risk of physical engagement with a security guard or police officers who could intervene to prevent a theft. Therefore, to attempt thefts of this type of cargo, criminals need to invest significant resources like hiring (or buying) the truck, forging the driver’s ID, or acquiring the identity of a legitimate forwarder or carrier.


“For lower value cargo, organised criminals typically choose less resource and time- consuming techniques that could involve the registration of a forwarder profile in a freight exchange and employing a driver who would agree to follow the criminals’ instructions to unload goods in an unauthorised location, contrary to that specified in the shipping paperwork,” the report adds.


Thorsten Neumann, President & CEO of TAPA in the Europe, Middle East & Africa (EMEA) region, says companies can take action to increase the resilience of their supply chains in Russia. “TAPA’s Incident Information


Service (IIS) has recorded hundreds of cargo thefts and millions of euros of product losses, and this increases every month. In a high number of these crimes, losses could easily have been prevented by companies carrying out simple due diligence checks on the transport partners they are working with. There is now so much evidence of Fraud and Deception impacting supply chains in Russia, businesses should be well aware of the risks. This new report will help prevent losses.”


MODUS OPERANDI 2019


Fraud Theft Robbery Other


82.7% 16.3% N/A 1.0%


2020


83.2 15.6 0.9% 0.3%


• Company registration number • Date of company registration •


Insurance details/policies • Tax (e.g. VAT) registration number


• Governmental or similar audit scheme (e.g. AEO) membership


• Key personnel and their roles


To download the Russian Cargo Theft Trends report, click here


Companies with new information to share regarding cargo thefts in Russia are asked to contact iis@tapaemea.org


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