Freight Crimes Could Drain £6.1 Billion from the Industry by 2049!

In the UK, an alarming £250 million is estimated to be lost annually to freight crimes, totaling a predicted £6.1 billion by 2049, research by SNAP, the haulage industry’s digital marketplace, has revealed. With inflation rising this figure could even reach a staggering £7.9 billion. Across Europe €8.2 billion is lost to cargo theft, every year.

How Criminals Are Attacking the Logistics Industry

Criminals are using increasingly bold and sophisticated methods to exploit weaknesses in the logistics industry. Here are some specific examples of how they’re targeting businesses:

  1. Truck Hijacking: Thieves are intercepting trucks on highways or at rest stops. They use fake police checkpoints or forceful takeovers to seize high-value goods, such as electronics or pharmaceuticals, costing companies millions in losses.
  2. Warehouse Infiltration: Organized gangs are breaking into warehouses during low-security times, such as shift changes or holidays. They exploit gaps in surveillance and security to steal large quantities of goods.
  3. Cyber Manipulation: Hackers are targeting logistics companies by altering delivery routes, rerouting shipments, or stealing sensitive information from poorly protected systems. These attacks disrupt supply chains and can lead to major financial damage.
  4. Insider Fraud: Employees with inside knowledge are leaking shipping schedules or tampering with deliveries. Some insiders collaborate with external crime rings, allowing them to intercept goods more easily.
  5. Fake Orders and Fraudulent Pickups: Criminals place fake orders or use forged documents to claim shipments. By impersonating legitimate customers or delivery agents, they reroute products before they reach their intended destinations.

With the haulage industry making technological advancements in other areas, like autonomous trucks and EV vehicles, decision-makers are questioning why the industry does not leverage available technology and incorporate the latest security features to help fight freight crimes.

Based on the newest crime-fighting innovation from across the world, it is anticipated that by 2049:

  • Truck parks will have 24/7 security, including the use of robot policing, such as dogs and patrols that provide autonomous surveillance, allowing all areas of truck parks to be monitored, without a human needing to be present.
  • Secure entrances and exits will be introduced, which will only be accessed by pre-booked trucks, and monitored via license plate recognition.
  • AI criminal pattern predictions, to anticipate crime.
  • Facial recognition.
  • Thermal cameras, to detect any unusual activity.

Other predictions include using information from tachographs to monitor truck drivers, helping to predict when drivers will need to reach truck stops, and keeping drivers rest safely away from roadsides.

Matthew Bellamy, managing director at SNAP said “There is an urgent need for investments in the safety and security of truck parks across the UK and Europe, truck drivers are the lifeblood of our economies and ensure that the public gets what they need. We need to encourage more people into the industry by offering a safe and secure environment for all. This highlights the need to protect drivers’ wellbeing, keeping them physically and mentally safe, alongside the financial benefits for supply chain operators and improved services for the nation”

Recent investments include €750 million from the IRU advocacy and £16 million from the UK government to transform truck parks. £16 million is just 6.4% of the £250 million and under 0.3% of the predicted £6.1 billion lost due to freight crimes in the UK, alone. Whilst we are pleased to see investments across Europe, it will be important to start seeing changes in action.

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The Freight Crime Supply Chain

Surprisingly, this shadow supply chain uses all of the same components as the legitimate one, from route planning to warehousing, with stolen goods marketed and sold using legitimate platforms to unsuspecting buyers. Freight insurance provider TT Club is promoting awareness of this supply chain ‘Black hole’.

Much freight crime is perpetrated by organised crime with profit, similar to commercial businesses as the ultimate aim. The process of storage, transport, distribution and marketing of stolen goods often shadow those of legitimate supply chains with criminals acquiring sophisticated logistics skills. Their knowledge assists them in targeting shipments at a multitude of points; from truck hijackings to pilfering items from unsecured warehouses. Needless to say such theft not only results in significant financial losses but also disrupts the flow of goods, leading to delayed deliveries and dissatisfied customers.

“At TT we are striving to highlight the responsibility that landlords in particular have to properly vet tenants of storage facilities and how they can prevent their properties being used to warehouse stolen goods” says Josh Finch.

“In a recent operation, police in the UK discovered a warehouse, at a location in Bradford that held hundreds of pallets of stolen goods. With the assistance of the National Vehicle Crime Intelligence Service (NaVCIS) the goods found were linked to known cargo theft incidents which spanned the previous six years and amounted to several million pounds in value,” continues Finch.
“The warehouse itself was an unassuming commercial unit, which blended seamlessly with other legitimate businesses and exemplifies the duty landlords have to ensure that the sites they own and lease are not being used by their tenants for illegal purposes.”

TT Club is endeavouring to pinpoint the warning signs, and the nature of due diligence that is essential in preventing such properties from being exploited by criminals. Such measures include:

• Background checks to scrutinize the business operations, financial stability, and track record of potential tenants
• Inspection of premises regularly to ensure they are being used for legitimate purposes
• Monitoring tenant activity, employing modern monitoring technologies, such as security cameras and access control systems
• Collaborating with law enforcement at a local level to share information and report any suspicious activity promptly
• Review lease agreements to include clauses specifying the permissible uses of the property and outline the consequences for illegal activities
• Engagement of professional services such as security experts with experience in identifying and preventing criminal activities

Increasing evidence from law enforcement agencies is confirming that a shadow supply chain operates alongside the legitimate transport of goods, using all of the same components from route planning to warehousing, with stolen goods marketed and sold using legitimate platforms to unsuspecting buyers.

“As TT helps operators to navigate the complex world of cargo theft and freight crime, it becomes increasingly clear that shedding light on this black hole requires a collective effort from all stakeholders in the supply chain, from law enforcement agencies to warehouse landlords. Only through such collaboration can we hope to mitigate this ongoing threat and safeguard the integrity of the supply chain,” concludes Finch.

Report: warehouse theft is primary cargo crime

The well-established collaboration between international freight transport insurer, TT Club and the supply chain services and solutions team at BSI, the business improvement and standards company has produced the latest report on trends in the theft of goods entitled, ‘Cargo Crime in Gulf Countries and Regional Free Trade Zones’.

Intended as a risk mitigation tool for transport operators, its timing might be more relevant given the spike in cargo movements running-up to the seasonal festivities.

Key findings include:

  • 76% of cargo theft is from warehouse and storage facilities
  • Crime hot-spots in UAE & Saudi Arabia
  • High-value goods such as electronics targeted
  • Insider assistance and corruption plays a prominent role
  • Smuggling of illicit contraband prevalent in Free trade Zones (FTZ)

TT Club’s Mike Yarwood commented: “Our reports are intended to alert those in the supply chain to the variable and developing trends in the risk of cargo theft during intermodal transportation. The unique combination of BSI sourced data on criminal activity and TT Club’s insurance claims records provides valuable intelligence to operators.

“Regular updates of this nature are essential as criminal gangs are constantly altering their points of attack. The current prevalence of supply chain congestion, delays, disruption, and in the Middle East region in particular packed warehouses, makes such information critical.”

The report highlights that warehouse thefts and supply chain corruption are the stand-outs, with a concentration on higher risk areas across the United Arab Emirates (UAE) and in the Kingdom of Saudi Arabia (KSA). The role special economic zones play in the Middle East also effects regional disparities in cargo theft.

Free Trade Zones (FTZ) are a significant feature of the regional economy and represent potential vulnerabilities for supply chains by virtue of facilitating high volumes of trade under simplified customs procedures that can provide opportunities for criminals to act. Furthermore, as Gulf Cooperation Council (GCC) economies return to pre-pandemic levels, and data provided by the International Road Transport Union (IRU) is projecting growth in trade, it is possible that criminals will also seek to exploit these higher volumes of cargo throughput to introduce illicit drugs and counterfeited products into shipments.

Umberto de Pretto, Secretary General, International Road Transport Union commented: “The IRU, together with its members and partners, continues to strengthen global transport supply chains, notably through the implementation of international standards such as TIR for compliance management and security, and through innovative training to help road transport professionals identify risks and adapt operations to avoid security threats.”

There is also valuable guidance on mitigating the risk contained in the report. These guidelines cover avoiding the introduction of drugs into shipments; reducing theft from facilities and combating counterfeit smuggling, all of which are of particular concern in the Middle East region.

“Operators should be consistent in their vigilance, especially in the current season of festivities when the movement of gifts is at a peak,” recommended Yarwood. “TT’s intention is to help reduce theft related loss and to that end these reports offer loss prevention advice to complement the joint analysis of current trends. As well as financial damage these incidents can cause severe operational disruption and unquantifiable reputational damage to supply chain service providers. As a consequence, it remains of key importance to the transport industry to identify, prevent and report any criminal activity.”

CLICK HERE to download a copy of the report.

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