BIFAlink November 2021

Policy & Compliance


How prevalent is cargo crime?

Cargo crime is an issue that is frequently reported on but never seems to be resolved. Many observers feel that, due to supply chain disruption, the situation has deteriorated with increasingly sophisticated crimes being committed. Where there is freight, crime is usually associated with it – a comment that is applicable to all modes. The humble container, which can be sealed, has greatly assisted in reducing maritime crime, while tighter aviation security measures have generated similar benefits in air sector. Increasingly, the problem seems to be focused on road, which is as true in Europe as it is in the UK. From discussions with various interested parties, it is clear that there are numerous well- organised gangs who engage in a variety of crimes ranging from theft to people smuggling. Also, the nature of the crime is subtly changing to include a fraudulent procurement process. Unfortunately, too many law enforcement bodies are focusing on the theft of cargoes. The Home Office, in a recent lorry crime prevention report, estimated that roadfreight crime is costing the UK economy £250 million per annum (and this could be a considerable under-estimate). In addition to the cost of the stolen goods, the additional costs include the police investigation, non-availability of, and cost of repairs to, damaged vehicles. The most regrettable cost is the time that drivers have to take off recovering from injury if they have been attacked by thieves. Reducing your risks There is a significant amount of information in the public domain as to how to reduce the likelihood of being the victim of crime, ranging from the fitting and use of padlocks to better screening of both customers and suppliers. Companies should look at their own internal processes, including reference checks, as part of the employment process. With numerous well- organised gangs engaging in a variety of cargo crimes, the issue of due diligence is becoming increasingly important

BIFA has highlighted the need for all parties to carry out due diligence on potential suppliers and to check all documents including drivers’ identification, especially when they collect cargo. The issue of due diligence is becoming increasingly important as there has been a growth in procurement fraud, much of it facilitated via web portals and platforms. One case, which is in the public domain, involved Timocom, the largest transport web platform in Europe. A fraudster (A) succeeded in establishing a fake profile, which claimed to be a UK transport operator (B) who had actually never been involved in European transport operations. Once everything had been set up, the fraudster started accepting genuine bookings from various customers to transport loads from one destination to another across Europe. These were genuine jobs that the fraudster was paid for. The fraud was very simple. The customer would contract with the ‘fake company’ (A) to transport goods from Spain to France. The job was posted on Timocom by the fake company posing as the UK transport operator, even using the directors’ names with fake email addresses and telephone numbers. A haulier looking for a backload would quote for the job and when successful take the load from Spain to France. The customer would pay (A) for the job, which had been legitimately carried out. The defrauded haulier would then

invoice the UK transport operator (B) who had no knowledge of the job and, as has been previously explained, was not involved in EU road movements. The legitimate UK operator declined to pay the large sums invoiced, leading to threatened legal action by the hauliers who had undertaken work in good faith and for which they were never going to be paid. A specialist legal firm was appointed to handle the claims involving additional costs, but to date no litigation has been brought in the UK. Widespread scams The specialist legal firm is putting pressure on Timocom to improve its due diligence procedures. It is known that other such scams have been perpetrated and some 40 hauliers across the EU have been affected, losing approximately €50,000 in total. All supply chain participants can play their part by improving their due diligence standards. Fraud seems endemic at the moment, particularly in fast moving, difficult-to-police sectors such as transport. At the beginning of this article we have looked at the problems stemming from theft that hauliers need to address through increasing their security procedures. Governments need to assist in this area to resolve the issues by tackling the chronic lack of secure parking locations.

November 2021


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