As organizations continue to grow their supply chains, they rely heavily on their transportation and logistics providers to protect and deliver their shipments. Transportation companies must ensure their shipments are properly monitored at all times to avoid the risk of cargo theft, hijacking, and smuggling incidents. 

One of the major challenges transportation providers face is the use of subcontractors and agents and not knowing their compliance levels and overall risk. 

This sector is also faced with the threat of natural disasters interfering with its operations, which could cause delays or damage to goods. In order to mitigate these risks, transportation providers must be able to identify and react quickly to global threats to maintain the integrity of their customer’s shipments.

Risk management standards can be adopted by all stakeholders to mitigate the threat of risks such as cargo theft through the global supply chain. 

Cargo theft in Europe case study: What’s the risk?

The lack of secure parking for cargo trucks is a major driver of cargo theft trends in Europe. All major countries of concern for cargo theft in the region, such as the United Kingdom and Germany, lack a sufficient number of secure parking locations. 

Regulations that limit the length that cargo truck drivers can operate before taking a mandatory break also exacerbate the lack of secure parking and often force drivers to stop in vulnerable locations. This issue can also be seen in both the modality and types of cargo theft that BSI recorded in Europe during the first half of 2018, with thieves targeting cargo trucks in an overwhelming 86 percent of incidents and using the slash and grab tactic in 48 percent of incidents. 

The high number of unsecured vehicles available for targeting helps explain the low number of facility thefts that BSI records in Europe. It is much easier for thieves to target an unsecured cargo truck than it is to infiltrate and steal goods from often more-secured warehouses and other types of supply chain facility locations. 

The prevalence of soft-sided trailers in Europe also promulgates this trend and primarily explains the high frequency of the slash and grab tactic, in which thieves cut into the tarpaulin covering trailers in order to quickly remove goods. 

BSI frequently records slash and grab thefts throughout Europe. Although not as common of an occurrence in Europe as in other regions in the world, namely South America, companies operating in certain countries in Europe should be aware of the potential for hijackings to occur. BSI most commonly records cargo truck hijackings in Italy and France.

To read about the importance of a road safety management system, click here.

The importance of managing transport supply chain risk

Due diligence is of utmost importance in all business undertakings. A primary objective is to protect your business from non-payment for services or to ensure that the customer you are acting on behalf of is legitimate and not partaking in fraudulent business activities. In this context, it can also assist in developing a sound understanding of the type and value of cargo your customer is shipping which will afford you the opportunity to fully assess the risk of theft. 

A perhaps less obvious objective of performing due diligence is to protect your business from falling victim to the fraudulent activity of service providers and sub-contractors, which can give rise to cargo theft. It is vital to fully understand who you are subcontracting with and that they are a viable and reputable company. If a robust selection and management process is not in place, then there is an increased risk of exposure. It is recommended that freight operators develop and implement a robust approved contractor process which should be adhered to always, regardless of time pressures and temptations that are borne out of convenience to short cut around it. Freight operators should endeavour to source a sufficient number of approved sub-contractors to cope with peak volumes. 

Due diligence should be performed prior to any appointment, no matter how time-sensitive the delivery may be. The exposure, both financially and commercially, for late delivery will almost certainly be outweighed in the event of cargo theft.

Risk management standards that support the transport supply chain

There are several key standards that transportation organizations can adopt to help mitigate supply chain risks:

BS ISO 28000 is the international standard that specifies the requirements for a security management system, including those aspects critical to the security assurance of the supply chain. It was developed in response to industry demand for a security management standard. Its ultimate objective is to improve the security of supply chains. 

It is a high-level management standard that enables an organization to establish an overall supply chain security management system. It requires the organization to assess the security environment in which it operates and to determine if adequate security measures are in place and if other regulatory requirements already exist, with which the organization complies.

BS EN ISO 22301 details the requirements of a business continuity management system (BCMS). It enables organizations to prepare for disruptive incidents that might otherwise prevent them from achieving their objectives. Users will be better prepared for disruptions and will recover more quickly, minimizing the impact on employees, customers, and suppliers.

BS ISO 44001 specifies requirements for the effective identification, development, and management of collaborative business relationships within or between organizations. It is applicable to private and public organizations of all sizes, from large multinational corporations and government organizations to non-profit organizations and micro/small businesses.

Ensure your transportation organization is minimizing risks within its supply chain by adding these risk management standards to your collection today.

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