TT Talk - Cargo theft analysis


TT Talk - Cargo theft analysis

Cargo theft remains one of the most significant causes of disruption in the supply chain and claims cost to the Club, accounting for around 10% by volume and cost of all reported claims in the last ten years.

For any stakeholder operating in the international logistics sector, it will come as no surprise that incidents of cargo theft continue to be one of the primary disruptors through the supply chain. These incidents not only result in direct financial loss, but also have severe impacts on brand reputation and the capability to manage the availability of stock through to retail customers. 

TT Club experience

Whilst there are inevitably geographical “hot spots”, this is a global phenomenon and one which has yet to be overcome in any part of the world. It is notable that theft “hot spots” are not restricted to areas suffering economic down turn; affluent regions where high value consumer goods are destined are equally susceptible to theft.

TT Club data analysis additionally identified that there are discernible patterns concerning the days of the week and months of the year in which cargo is stolen. Perhaps unsurprisingly, theft incidents are more frequent between Monday and Friday, with Thursday showing as the most vulnerable day of the week. Naturally, the exact patterns will vary from region to region and through the period. Furthermore, the occurrence of theft will be influenced by factors such as peaks and troughs in freight movement, including ship calls in certain ports. In terms of average value, it is interesting that Sunday indicates a more targeted approach, while Friday thefts are the most lucrative.

 
Similarly, considering the theft data by month of loss, further patterns are revealed. The number of notified thefts through the first and second quarters appears reasonably stable, with a peak in March, but the incident rate climbs through the third and fourth quarters, peaking in October. While again there are regional variations, the patterns are heavily influenced by peak freight movements associated with annual holidays. Valuation averages similarly reflect the commodities commonly associated with consumer holidays.

"the patterns are heavily influenced by peak freight movements associated with annual holidays"

When the data are further interrogated to understand the most theft attractive cargoes, TT Club’s experience is representative of the industry wide results, with Electronics, Food & Drink, and Clothing comprising over 40% of cargo theft incidents. Just eight commodity groups account for 60% of cargo thefts, as in the following table.

  • Electronics 17.00%

  • Food & Drink 14.81%

  • Clothing 10.13%

  • Metals 5.59%

  • Machinery & Vehicles 5.26%

  • Cosmetics 4.18%

  • Chemicals/ Oils 1.59%

  • Minerals 1.17%

  • Medicine/ Pharma 0.99%

Bottleneck risk

Research suggests that there are elevated volumes of cargo thefts on key traffic routes from the major import ports and terminals. It is perhaps inevitable that a disproportionate amount of cargo will be transported along a limited range of routes from port facilities into the hinterland. The road infrastructure that is developed to support this flow of traffic through to main cities and motorway networks often serves as a bottle neck and there is rarely sufficient availability of secure parking to satisfy demand. For the criminal organisations this provides an obvious feeding ground. While rail and inland waterway movements are less prone to theft, they are not exempt.

The ingenuity of organisations involved in cargo theft cannot be underestimated. A report from the Dutch authorities in July noted the arrest of a Romanian group suspected of stealing cargo from moving trucks by matching the trucks speed and positioning their vehicle in the trucks’ blind spot before gaining access to the cargo through the back doors of the trailer whilst still in motion.

Apprehension & recovery

Regardless of the geographic location or the method of the theft, the subsequent recovery of stolen cargo continues to be challenging, especially in regions where the resources of the relevant authorities are stretched and have priorities which lie outside of the sphere of cargo crime.

Considering the volume of cargo often stolen, one question which plagues operators and insurers alike is; where does the stolen cargo actually go? There are many stories of the ‘Dark Web’, social media and auction websites through which volumes of cargo are laundered. Frequently such cargo is understood to be re-exported and shipped to various regional markets in reduced quantities to lower suspicions and avoid detection. Whichever method is selected, it is evident that criminal organisations are adept at moving stolen cargo through the supply chain almost as efficiently as professional logisticians are able to move legitimate goods.

"criminal organisations are adept at moving stolen cargo through the supply chain"

Security devices to combat such thefts are constantly being developed; technology is advancing rapidly and each emerging product serves to close out another loop in the security of the supply chain. Where such devices are a visible deterrent to the would-be thief, their effectiveness is determined only by the resolve of the thief. If the thief is sufficiently motivated it seems that the cargo will in any event be stolen. The device may dutifully record the exact time, date and location of the crime, but the cargo may nevertheless be stolen and not recovered.

There are, however, an increasing number of providers developing covert tracking devices which are small enough to fit within the carton or cargo itself. Where undetected by the thief, this technology may in time serve to provide the authorities with invaluable information about temporary storage of stolen cargo and also reveal typical routes to market, which may support more complete and rapid recovery, as well as apprehension of criminals. 

We hope that you have found the above interesting. If you would like further information, or have any comments, please email us, or take this opportunity to forward to any colleagues who you may feel would be interested.

 
We look forward to hearing from you.


Michael Yarwood
Senior Loss Prevention Executive, TT Club

24 Hour Claims Hotline
+44 7000 882582

Through Transport Mutual Insurance Association Limited and TT Club Mutual Insurance Limited, trading as the TT Club. TT Club Mutual Insurance Limited, registered in the UK (Company number: 02657093) is authorised by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority. In Hong Kong, TT Club Mutual Insurance Limited is authorised and regulated by the Hong Kong Insurance Authority, in Singapore by the Monetary Authority of Singapore and in Australia by the Australian Prudential Regulation Authority. In the United States, TT Club Mutual Insurance Limited is approved as a surplus lines insurer in all states and is accessible through properly licensed surplus lines brokers. The registered offices are: 90 Fenchurch Street, London, EC3M 4ST.

Through Transport Mutual Insurance Association Limited, registered in Bermuda (Company number: 1750) is authorised and regulated in Bermuda by the Bermuda Monetary Authority and is authorised in the UK by the Prudential Regulation Authority and regulated in the UK by the Financial Conduct Authority and Prudential Regulation Authority.

The UK VAT Identification number for Through Transport Mutual Insurance Association Limited is: GB 564 5244 35 and for TT Club Mutual Insurance Limited is: GB 564 3375 30. The Italian VAT Identification number for TT Club Mutual Ltd is: 03627210101.