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Worldwide unrest fuels cargo loss

Nov 18 2015

Even before the events in Paris on Friday Nov. 13, unrest in several geographic areas of the world has contributed to major disruption in the supply chain.

According to the most recent Security Risk Index from US-based supply-chain consultants BSI, the influx of refugees fleeing areas of conflict in the Middle East has caused disruption to cargo movement across Europe. Border checks have been re-imposed at previously open borders, and some borders have been closed, delaying or stopping transportation. BSI reported border closures, stoppages or slowdowns at 10 different EU borders in three weeks in September, which is unprecedented since the EU began allowing free movement between borders in 1995.

Calais in Northern France has seen some of the most serious trouble. Between migrant movement and strikes by ferry workers, cargo losses in the last year amounted to almost $1 billion for the economy of the UK, which relies on the crossing for trade to and from the continent. Losses due to contamination of cargo containing food and pharmaceuticals because of stowaways were serious, with BSI reporting one loss of a shipment of pharmaceuticals valued at $3.9 million. Delays at Calais cost UK shippers an estimated $1.2 million and Dutch shippers around $545,000 daily.

“More so than any other economic bloc, Europe relies upon free trade,” said Jim Yarbrough, global intelligence program manager, BSI Supply Chain Solutions. “Every shipment delayed, contaminated or destroyed, raises the cost to the end-consumer. For exports this hurts competitiveness, undermines productivity and risks jobs; for imports it raises the cost of living for each and every citizen.”

In China, a different set of problems for the supply chain has evolved since the beginning of 2015. “Moving truck” thefts have been occurring in several Chinese provinces, including the major production hub of Guangdong. Thieves target in-motion trucks, jumping onto them while they’re moving 30 to 40 miles-per-hour, removing goods and tossing them to their accomplices driving beside them. BSI said it has recorded the theft of high-value goods during these truck thefts, including $40,000 worth of leather clothing and $55,000 of medicines and electronics.

 In South Africa truck hijackings have increased, rising 29.1 percent last year to 1,279. Violence has also increased in these events, with 10 security escorts wounded while attempting to defend cargo trucks from the assailants. BSI noted that hijackings in South Africa tend to increase when GDP growth slows and decrease when the economy is healthier. As the South African economy is expected to improve slightly in 2015, BSI said there may be a dip in the number of hijackings.

 Malaysia has seen high-value cargo thefts decrease after a police crackdown on organized cargo theft. The median value of cargo thefts in Malaysia in 2015 dropped to $53,800 from $198,600 in 2014. The gangs were most interested in high-value goods, with several thefts of goods valued at greater than $1 million recorded in 2014, but this year. lower-value thefts have been more common.  The report attributes this to the capture or death of a number of members of the Mamak cargo theft gang. BSI said it remains to be seen whether the current decrease in high-value thefts in Malaysia can be sustained.

 By Linda Ball | November 18, 2015 | Air Cargo World
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