Major corruption in China, India supply chain

Supply chain corruption is a major driver of thefts in China and India, with corrupt employees removing goods they are transporting or accessing shipments stored in warehouses or logistics facilities.

Supply chain corruption is a major element of thefts in China and India, according to the TT Club and BSI report on global cargo theft, the first to cover a full year for 2018.
Highlighted global findings include:

  • Theft from road vehicles once more accounted for the highest proportion at 84%
  • Slash and Grab was the largest type of modus operandi at 26% globally but with significant regional variations
  • Food, beverage, alcohol and tobacco making up the most common stolen commodity at 34%
  • The median value for each theft in Asia was at US$18,923
In Asia, BSI and TT Club most frequently recorded cargo thefts in India (59%) and China (24%). Cargo theft in these two countries are similar in profile and employ a wide range of tactics.  The most common stolen commodity was food and beverage (30%).
Methods included opportunistic means like pilferage and thefts by drivers, to more organized tactics like in-transit truck thefts where thieves drove a vehicle behind a moving cargo truck, boarded it and then threw goods to trailing accomplices.  A significant portion of incidents involved thieves stealing goods directly from facilities in each of these countries.
Supply chain corruption is a major element of thefts in China and India, with corrupt employees removing goods they are transporting or accessing shipments stored in warehouses or logistics facilities.  Thieves generally pilfered small numbers of items but occasionally managed to steal larger quantities of goods.
Other tactics were hijackings, slash and grab and counterweighting where thieves removed goods and then used other items like rocks, sand and water to replace the weight of the stolen goods.  In addition, poor access control protocol often contributed to the rate of cargo theft in Asia. Terminated employees often retained facility keys that were then used for illegal access at a later date to steal.
BSI assessed that more recorded hijacking incidents in Asia occurred in India.  A significant number occurred in the northern region.  Uttar Pradesh is a particularly hotspot.

Insider threat

In China, BSI analysis showed that insider risk persisted.  Interestingly, relatively simple security protocols such as parking in secure locations or ensuring proper access control procedures are being followed can likely help mitigate the risk of most theft in China.
A significant percentage of incidents involved the theft of goods from facilities, often by current or former employees.  In these incidents, BSI has noted that easily rectifiable security gaps, including ensuring doors remained secured or revoking access for terminated employees, likely could have prevented the majority of these incidents from happening.  BSI has also identified the lack of secure parking options as a factor.
The insecurity of expressway service  areas propagates the vulnerability of cargo trucks and often leads drivers to instead park at just as insecure roadsides, thus exposing cargo shipments to opportunistic thieves.  Utilizing a team drivers to avoid stopping in insecure locations is one method that can help.

TT Club’s Mike Yarwood, explains the rationale behind the initiative, “Our report brings together threat and intelligence data from BSI’s supply chain security country risk intelligence tool, SCREEN and TT Club’s insurance risk management and loss prevention insights.
“It demonstrates the shared goal we possess of educating supply chain professionals in the threat of cargo theft across the globe.
“We aim to engage in a proactive approach in preventing cargo crime and also minimising the financial loss resulting from cargo crime.”
Yarwood goes on to say “In particular we would wish to emphasise The Insider Threat.
“As security measures become more sophisticated and widespread in practice, criminal organisations are increasingly recruiting employees of targeted companies to gain data, cargo information, delivery routes and destinations and access to IT systems.
“Due diligence in recruiting and managing staff is paramount. In general, full or part-time salaried staff are less of a security risk than sub-contractors.”

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