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SAFETY4SEA

Report: Theft from warehouse facilities the main cargo crime in Middle East

by The Editorial Team
January 19, 2022
in Security
singapore fallen containers

Above image is used for illustration purposes only / Credit: Port of Rotterdam

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Crime report from TT Club and BSI finds over three-quarters of cargo theft takes place at logistics hubs and warehouses, with Free Trade Zone (FTZ) particularly vulnerable locations.

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)

The report ‘Cargo Crime in Gulf Countries and Regional Free Trade Zones’ produces the latest report on trends in the theft of goods, and aims to be a risk mitigation tool for transport operators.

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Cargo theft and smuggling

Smuggling risks are generally present in several countries in the Gulf region, and projections point to increased cargo throughput in these countries following a down year in 2020 that may provide an increase in opportunity for smugglers to target the increased number of shipments to traffic contraband.

However, since the region already hosts some of the world’s largest warehouse districts and busiest regional transshipment hubs, there is ample opportunity for criminals to introduce illicit drugs or other contraband into shipments transiting through these two countries.

As such, this region often serves as transshipment sites for illegal contraband introductions into cargo, like counterfeits and illegal drug introductions. Countries in this region have also been noted as manufacturing hubs for counterfeit pharmaceutical products and electronic devices.

What is the risk?
The risk comes from the fact that within free trade zones high volumes of cargo are unpacked, are handled, enhanced, stored, repacked and shipped under reduced Customs procedures. This provides potential opportunities
for cargo to be manipulated and illicit materials such as drugs to be introduced into the supply chain.

How Free Trade Zones facilitate illicit smuggling activity

Free Trade Zones (FTZs) in Gulf countries generally represent an area of higher vulnerability to illicit smuggling activity for supply chains because they are designed with more liberalized conditions to facilitate higher volumes of trade at a faster pace.

To attract businesses, these conditions include simplified customs procedures and reduced administrative oversight, which may create opportunities that criminals could exploit to traffic contraband via the supply chain.

These reduced customs inspection procedures and administrative oversight is what distinguishes FTZs from other logistics hubs, but it also lends itself to an environment conducive to smuggling.

The economic role of FTZs as transshipment hubs, combined with gaps in regulations and enforcement, provides criminals with ample opportunities to repackage and relabel goods, also known as round-tripping, forge documents, such as certificates of origin or destination, and introduce illicit goods into legitimate cargo

says TT Club.

Shifting to new supply lanes

Given the ongoing shipping capacity constraints and seaport congestion around the world, the issues covered at locations in the Gulf region take on a new light as organizations potentially look for alternative means of transportation for shipments.

“Signs indicate that cargo throughput in this region is recovering, if not growing, and the increasing number of FTZs in the Gulf combined with robust, pre-existing freight transportation infrastructure could be an appealing alternative for companies that are unable to timely ship goods from origin to destinations,” says the report.

However, companies should not just switch shipping routes to new lanes without conducting proper diligence to assess the level of risk that consignments may face.

If anything, the risks highlighted underscore the importance of ensuring that organizations conduct, and continue to refresh, risk assessments for both new and current shipping lanes

Risk mitigation

Effective management controls to mitigate cargo theft as well as illicit drugs and counterfeit goods being introduced into the legitimate supply chain must combine robust procedural and physical measures on the part of the logistics operator.

The following infographic highlights the key issues to consider in mitigation of these areas of risk:

Report: Theft from warehouse facilities the main cargo crime in Middle East
Credit: TT Club

EXPLORE AT THE FREIGHT CRIME IN GULF COUNTRIES REPORT

Report: Theft from warehouse facilities the main cargo crime in Middle EastReport: Theft from warehouse facilities the main cargo crime in Middle East
Report: Theft from warehouse facilities the main cargo crime in Middle EastReport: Theft from warehouse facilities the main cargo crime in Middle East
Tags: cargo theftInfographicreportsTT Club
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