The true cost of cargo crime in actuality is calculated to be twice the value of the stolen goods. Many businesses remain unaware of the severe consequences and fail to protect its value chain due to the immense skill and knowledge gap. To mitigate these risks and costs to businesses, supply chains in India need to close this gap by first having a deeper understanding of the types of threat affecting their businesses and adopt global security standards into their daily operations through security protocols and staff training, highlights Mr. Madu Lokan, Executive Director, Transported Asset Protection Association – Asia Pacific (TAPA APAC), through this article…
Organised thefts of commercial vehicles and their loads cost global businesses over USD 13 billion a year as per estimates. The 2021-2022 Cargo Crime Reports from British Standards Institution (BSI) have shown that incidents involving truck and facilities accounted over 96% of the total incidents in Asia Pacific and the remaining via other modalities such as sea, rail, and air. Attacks on goods are becoming more frequent, more sophisticated, and more violent, especially in growing Asian economies.
The top three commodity types affected by theft are agriculture andprepared food products (36.2%); petroleum, natural gas, and minerals (13.0%), and industrial and manufacturing materials (12.5%). More notably, 7.3% of these incidents occurred on unspecified goods due to lack of information, and research suggests that more Asia Pacific incidents remained unreported due to company policy.
TRUE COST OF CARGO CRIME IS TWICE THE VALUE OF GOODS
Often, victims of crime focus on the value of lost goods and overlook the longer term impact to businesses, sector, and industry. According to leading supply chain association, Transported Asset Protection Association in Asia Pacific (TAPA APAC), the true cost of cargo crime in actuality is calculated to be twice the value of the stolen goods. Aside from the hefty financial cost of recovery for manufacturers and their logistics partners, these crimes affect their ability to fulfil new customer orders, disrupt existing production schedules, damage their reputation and put employees to risks, leading to increased insurance premiums. Non-financial consequences affect the entire industry as criminals see greater opportunities to exploit similar businesses upon successful attacks.
Many businesses remain unaware of the severe consequences and fail to protect its value chain due to the immense skill and knowledge gap. To mitigate these risks and costs to businesses, supply chains in India need to close this gap by first having a deeper understanding of the types of threat affecting their businesses and adopt global security standards into their daily operations through security protocols and staff training.
LOWERING LOSSES BY THREE TIMES BELOW INDUSTRY AVERAGE
By adopting global standards into the business’ supply chain security programs, losses incurred are significantly reduced and reported to be 3 times lower than the industry average, as per TAPA APAC’s members feedback and statistics. The implementation of global security standards enforces the organization to operate on a set of robust security system, having underwent rigorous training and audits that help mitigate supply chain risks. Manufacturers and Brand Owners also use TAPA’s Standards as a useful barometer for an effective supply chain when choosing suppliers and logistics partners, enabling a secure upstream and downstream ecosystem.
India manufacturers and logistics firms need to be continuously updated with latest crime trends and reports from intelligence sources in order to review cargo transport routes against ‘hot spots’. As many cargo incidents in India and across APAC remains unreported, companies need to step forward to report these attacks anonymously on common industry association database to help supply chain professionals and the industry stay informed and resilient against similar attacks. In many cases, reported crime can be traced and goods are restored with the assistance of local authorities that are informed of the crime.
Complementing factual analysis, a strong support from a global community of supply chain leaders, law enforcement agencies, and government bodies will further enhance the value chain’s resiliency.
As restrictions ease and with more companies expanding into India, the need for local supply chain industry to improve their risk management strategies increases. Adopting to globally recognised and effective standards become imperative to a secure business, guarantee order fulfilment and safeguard company's reputation. With proper measures in place, long-term business performance and profitability can be significantly improved as losses are curtailed. The overall success and performance of the country’s supply chain industry which is poised to grow at a CAGR of 5% by 2027 also depends on how effective the manufacturers, logistics companies and partners in the ecosystem manage their risks, upskill their workforce and implement robust security standards as the country moves towards becoming the global manufacturing powerhouse.