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IIS Cargo Theft Annual Report Now Available

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A new report offers advice to companies moving goods in Russia on how to avoid becoming a victim of the country’s notorious ‘disappearing act’ for high value cargo loads…

TAPA EMEA’s new Cargo Theft Annual Report describes Russia as one of the region’s ‘biggest success stories’ of recent years in terms of the intelligence the Association has been able to grow on the types of losses from supply chains in a country covering more than 6.6 million square miles and, most importantly, the modus operandi used by cargo thieves.

In the last two years, TAPA EMEA’s Incident Information Service (IIS) has recorded over 650 cargo thefts in Russia. Although this is likely to be only a fraction of the true level of product losses from facilities and trucks, it is more than sufficient to determine the most common risks companies need to manage, and the financial impact of cargo crime:

  • €9,361,450 – total loss recorded by TAPA’s IIS for crimes with a value in 2020
  • €187,904 – average loss for the x19 major cargo crimes involving products worth €100K or more
  • €2,529,192 – total loss for the 40 incidents within the €50K-€100K loss range, averaging €63,229 per incident

TAPA’s IIS report highlighted five main types of goods targeted by cargo thieves:

  • Food & Drink – 101 incidents (32.9% of the national total)
  • Furniture/Household Appliances – 37 (12.1%)
  • Metal – 33 (10.8%)
  • Tools/Building Materials – 22 (7.2%)
  • Car Parts – 15 (4.9%)

The best advice to Manufacturers/Shippers and Logistics Service Providers storing or transporting goods in Russia is very simple: know who you’re doing business with. In 2020, 85.4% of crimes in the EMEA region involving Fraud took place in Russia. In most cases, cargo collected from Services 3rd Party Facility sites – the type of location given for 256 or 83.4% of these incidents – did not arrive at its intended destination and all contact was lost with the driver and transport provider.

To increase its members’ understanding of these risks, and to support their loss prevention programmes, TAPA EMEA has joined forces with TT Club, the world’s leading transport and logistics insurer, and the IMPACT information exchange is Russia, to produce a new, detailed reported on cargo theft trends in Russia, and to offer advice on how to deal with these threats. The report, available in English and Russia language versions for TAPA EMEA members to download from the Association’s regional website, also includes case studies from companies which have fallen victim to fraud. In one of these cases, involving the outsourcing of transportation via an open freight exchange, the report states: “The entity awarded the freight contract was neither a carrier nor a forwarder. In business terms, it didn’t exist.”

The case studies describe, step-by-step how such diversions are arranged and how types of fraud are employed to ultimately complete the thefts. Mike Yarwood, TT Club’s Managing Director of Loss Prevention, highlights the report’s important role in mitigating these incidents. “Above all else, awareness is crucial. Everyone within transport and supply chain service companies needs a degree of knowledge of the risks and how perpetrators of theft operate. Our report is aimed at providing detailed data but also provides a wealth of guidance on creating this awareness as well as further actions to be taken by operators in avoiding loss and damage to their customers’ cargoes and their own business reputations.”

A regular feature of cargo thefts in Russia involves drivers being contacted en route by supposed employees of their customer to divert the delivery to an alternative address, from where shipments ultimately disappear. The report explains how this practice works, the preparation and research criminals carry out, how they use delay tactics to conceal the fact the cargo has been stolen, and, ultimately, cease all communication. “Criminals actively employ their risk-benefit analysis models to justify the specific way of attacking cargo. They realise that security controls in high-value sectors, such as tobacco, are much stricter, resulting in a high risk of physical engagement with a security guard or police officers who could intervene to prevent a theft. Therefore, to attempt thefts of this type of cargo, criminals need to invest significant resources like hiring (or buying) the truck, forging the driver’s ID, or acquiring the identity of a legitimate forwarder or carrier.

“For lower value cargo, organised criminals typically choose less resource and time-consuming techniques that could involve the registration of a forwarder profile in a freight exchange and employing a driver who would agree to follow the criminals’ instructions to unload goods in an unauthorised location, contrary to that specified in the shipping paperwork,” the report adds.

Thorsten Neumann, President & CEO of TAPA in the Europe, Middle East & Africa (EMEA) region, says companies can take action to increase the resilience of their supply chains in Russia. “TAPA’s Incident Information Service (IIS) has recorded hundreds of cargo thefts and millions of euros of product losses, and this increases every month. In a high number of these crimes, losses could easily have been prevented by companies carrying out simple due diligence checks on the transport partners they are working with. There is now so much evidence of Fraud and Deception impacting supply chains in Russia, businesses should be well aware of the risks. This new report will help prevent losses.”

To help supply chain security stakeholders, the report offers clear loss prevention guidance. In the key area of due diligence, it recommends: “Performing sufficient due diligence checks will assist businesses to protect themselves and the cargo that they take into their care, custody and control from this type of risk.” While not an exhaustive list, it advises operators to consider:

  • Full and legal name and registered address of the supplier
  • Details of other branches (nationally or internationally)
  • Contact details (telephone and email)
  • Web address
  • Verify ownership (taking account of regulations, such as sanctions, as appropriate)
  • Company registration number
  • Date of company registration
  • Insurance details/policies
  • Tax (e.g. VAT) registration number
  • Governmental or similar audit scheme (e.g. AEO) membership
  • Key personnel and their roles

Companies with new information to share regarding cargo thefts in Russia are asked to contact iis@tapaemea.org

The Russian Cargo Theft Trends 2020 report is available to download using the links below:

Read full report EN here

Читайте полный отчет RU здесь

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Regular insight on supply chain resilience news and trends
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