Disruptions throughout the global supply chain continue to create opportunities for criminals to infiltrate and access cargo, with Russia’s war with Ukraine adding further challenges to global freight movements already profoundly altered by the ongoing impacts of the Covid pandemic, highlights TT Club’s Mike Yarwood

Disruptions through the global supply chain continue to create opportunities for criminals to infiltrate and access cargo. The ongoing impacts of the Covid-pandemic blight economies and have profoundly altered supply chains such as just in time models. The tragic situation in Ukraine will undoubtedly further challenge global freight movement.

Recent analysis of claims and industry data from TT Club and BSI connected to freight crime, specifically cargo theft, highlight a series of risk trends against which actors in the supply chain should remain vigilant to mitigate losses.

Fraud threat continues

Fraud continues to be a significant threat in the context of freight crime. Digital solutions, however well designed, give rise to internet-enabled fraud, allowing bad actors opportunities to access and steal cargo, through seemingly legitimate transactions.

A lesson learned throughout the COVID-19 pandemic has been that, sadly, in times of chaos and uncertainty criminals are quick to seize opportunities presented by such events, no matter how distressing they may be. Looking back to the height of the pandemic, many individually received false invitations to receive vaccinations, fake delivery text messages and other phishing attempts looking to capitalise on public panic.

Criminal opportunists

In times of chaos and uncertainty criminals are quick to seize opportunities

With this in mind, it is an appropriate moment to highlight again the dangers of fraud. At this time, it would be prudent for all actors through the international supply chain to practise heightened levels of awareness and vigilance in financial transactions and in all aspects of general online security.

Cyber criminals, whether they be state actors, organised crime groups or individuals, are likely to use the current events and rising tensions to instigate attacks such as payment diversion frauds and other interventions.

Accumulation of cargo

As highlighted previously, accumulation of cargo as a result of supply chain disruptions and changes in the political landscape present a further risk in this context. Cargo at rest typically provides a rich feeding ground for criminals motivated to steal cargo. The current political landscape, where restrictions and sanctions are rapidly changing, has already started to impact the smooth operation of the supply chain and will likely lead to further delays and accumulation of cargo in certain locations.

Where operations are changing frequently to adapt to disruption, security managers need to assess risk regularly, particularly around temporary locations designed to cope with short-term peak or disrupted volumes. Because of the potential for delays at borders affected by the war in Ukraine, it would also be prudent to assess whether alternative transport routes should be considered

Rail incidents mount

While remaining a small portion of cargo theft statistics, the start of 2022 saw an uptick in cargo theft incidents on the rail mode, evidencing the agility and ingenuity of the criminal fraternity. High profile incidents were picked up by mainstream media in Los Angeles earlier in the year, but incidents have also been reported in other locations around the US and Europe.

A combination of increased volumes as shippers seek greater value and accumulation of cargo due to congestion gives rise to a host of opportunities for organised criminal gangs and opportunistic individuals to access cargo, particularly where trains are held awaiting access to terminals, yards or mainline services.

While rail infrastructure may often be perceived to present dangers (such as electrified lines), boundaries to lines and facilities will not always be secure – another example of criminals rapidly identifying and exploiting vulnerabilities in the supply chain.

Cross continental freight volumes by rail from China to Europe have increased in recent years; as shipping rates soared many shippers viewed rail as a viable alternative. The current events in Ukraine will almost certainly have a serious impact on availability because a large portion of Europe destined trains from China are transiting Russia and/or Belarus. Inevitably, some cargo will become stationary as a result.

Insider threat

The threat posed by the insider continues to present challenges. TT Club claims analysis for 2021 suggests that around 15% of reported crime incidents likely involved insider activity, whether it facilitated intricate knowledge of systems and security provisions or simply allowed access to criminals.

The insider threat posed by employees, contractors and temporary personnel needs to be managed. Security strategies should include control over identification badges/passes and restricting full site access where applicable. Protecting operationally sensitive information about security, cargoes and trailers on site and control of company-branded uniform is of great importance.

Evolving risk landscape

The risk landscape for those managing security through the global freight supply chain has always been evolving. The various measures set in place recently against Russia and Russian entities will impact many areas of the supply chain resulting in considerable disruption. For all actors in the supply chain, heightened awareness is required to ensure that where reasonably practicable cargo is not allowed to stagnate or become abandoned and that security is maintained. Cargo at rest is cargo at risk.

Cargo at rest is cargo at risk

In recognition of the threat landscape, TT will soon launch an inaugural edition of a new supply chain security bulletin. The bulletin will focus on all aspects of supply chain security and will draw data, expertise and opinion from a host of organisations across the globe.

TT Club has also created a resource page (https://www.ttclub.com/loss-prevention/russia-ukraine-crisis/) that collates updates, publications and other material relevant to the current crisis in Ukraine and its implications for freight and cargo risk and security. The resource page will be updated with additional material as the situation changes.

Mike Yarwood is Managing Director for Loss Prevention at freight insurance and risk management specialist TT Club