Cargo theft does not just involve stealing at trade gateways such as ports and airports, and hijacking of trucks carrying containers and various products in transit. Cargo can also be lost to theft onboard ships; siphoning of liquid cargos such as petrol and palm oil; financial and documentation fraud; and robbery of warehouses. Moreover, it is not the work of small-time opportunists.
In certain regions, this crime involves a complex web of parties across the supply chain pulling off well-orchestrated schemes to steal, transport, distribute and sell cargos from gateways and profit from them. In addition to the slick scheming of the perpetrators, the involvement of enforcement agencies in facilitating cargo theft also makes catching the crooks difficult.
According to a recent report released by US-based watchdog Transported Assets Protection Association (TAPA), most of the stolen goods in the South-East Asia region end up in the Asian black markets. TAPA also stated that most of the cargo theft in several countries was masterminded by the same syndicates.
In a report on cargo vulnerability, Lloyds Register Quality Assurance listed several high-profile industrial sectors that are most at risk of cargo theft. They include the manufacturing sector; oil and gas; food and beverages; chemical and pharmaceutical; and logistics and freight forwarders. To some countries, these sectors contribute significantly to their trade and economic growth. Stakeholders must take the issue of supply-chain security seriously.
Take a country like Malaysia, whose economic growth depends on its trade, the issue of stolen cargos is a serious one. While strong measures and various efforts have been out in place to ensure safety of the nation's trade gateways, cargo theft still dogs the nation. It is rather unfortunate that despite its overall image as a safe place to do business, Malaysia holds the dubious tag as one of the world's hotspots of cargo thefts. TAPA put Malaysia in the company of countries like Mexico, Brazil and several European nations where cargo thefts are common.
It can be argued that, given the huge amount of trade conducted by Malaysia, the amounts involved in cargo theft are negligible, and cargo owners are covered by insurance. However, one must take into account there could be other cases of cargo theft that were not reported in the media. A few cases should not be seen as an endemic problem, but with the extent of media coverage these days, one high-profile case may be one too many.
No country would like to be included in such a ranking, notwithstanding the fact that all rankings have got to be taken with a pinch of salt. When it comes to cargo theft, which can damage the reputations of parties all along the trade supply chain, including the nation itself, one case of cargo theft is one case too many.
The TAPA categorisation brought back memories of the daring theft of computer microchips and motherboards worth US$12.7 million at Bax Global Logistics warehouse in the Batu Maung Free Commercial Zone in Penang, Malaysia's electronics hub, in 2006. That was not the first time a daring, well-planned heist of cargo was pulled off in Malaysia. Judging from the report highlighting the persistence of the problem, it is feared that the kind of heist seen in the Bax Global robbery, and the theft of a consignment of condoms in Malaysia that was widely reported by the international media last year, would not be the last.
Although cargo thieves are at times aided by insiders, there is no denying the 'professionalism' and capabilities of the thieves involved in some of the major heists seen in the country. In the case of the Bax Global heist, the perpetrators were dressed as security guards and their calculated approach showed meticulous planning and a level of boldness that suggested that they were no weekend robbers. In response to the robbery, the American-Malaysian Chamber of Commerce warned that US electronics companies were feeling uneasy because of a lack of security along the nation's trade transport network. The goods stolen belonged to giant US chip manufacturer Intel.
Malaysia is well aware that resolute measures need to be taken to address the problem of cargo theft. It has already put in place initiatives to curb cargo thefts by strengthening co-operation among enforcement agencies such as the police and customs to ensure that the nation's trade gateways and supply chains are secure. The last thing it needs at a time of growing competition for FDI amid tentative global economic recovery is to generate bad publicity for itself with news of cargo theft that may scare off potential businesses, traders and investors.
Judging by the small amount of stolen goods recovered and the number of unsolved cases of cargo thefts and unsuccessful prosecution of suspects, Malaysia has its work cut out to be dropped off TAPA's list. However, it is determined to prove the naysayers wrong and improve its image as a safe place to trade and do business.
The long and complex trade supply chain is only as strong as its weakest link. Hence, the onus is on all parties to shoulder the responsibility to secure the perimeters of their area of operations and develop domain awareness of the security situation in the supply chain in which they are operating. The buck should stop at the doorstep of every single player along the chain, each of whom must assume responsibility for securing their part of the chain to ensure the entire network is safe and secure.
To this end, it would help to establish a nationwide database for all players along the trade supply chain to track the whereabouts and movements of consignments at any given time. By having access to and exchanging such information, suppliers, shippers, freight forwarders and other parties along the chain can plan and adjust routes and resources to ensure maximum security. Technology must be harnessed to its fullest to enhance surveillance, tracking, risk assessment and response time to thwart cargo thefts.
Amid a challenging business environment and sluggish world economic recovery, players along the trade supply chain may find increased spending on beefing up security of their operating environment a hard sell. This perception that security spending is a mere cost is not useful in promoting a more secure trade supply chain. The attitude that 'thefts only happen to other people' does not help either. Stakeholders should realise that without security, trade and business cannot be conducted smoothly and the country's socio-economic growth cannot flourish. What is needed is for them to change their perception and start viewing spending on securing the supply chain as an investment.
For trade-dependent countries, it is paramount that they provide a safe, secure environment to attract investors and facilitate business and trade. To this end, governments must work together with players along the trade transport network such as shippers, port/airport operators, shipping lines, warehouse owners and logistics services providers to ensure that the long line of the trade supply chains are secure, weak links are identified and loopholes plugged. Parties along the trade supply chain must invest in equipment, systems and personnel to intensify security within their immediate domain of operations to prevent cargo thefts from proliferating.
Ensuring a secure trade supply chain requires unstinting, sustained efforts from all parties along the chain to ensure that their own operations and surroundings are optimally secured, if not foolproof from theft. Only by inculcating a culture of 'security first' and a high level of awareness and vigilance among all the trade stakeholders can cargo thefts be prevented. Trade supply chain security begins with the security of the immediate operating domain from every party along the chain.
Nazery Khalid