Recent industry data (taken from statistics published by the Transported Asset Protection Association Annual Report 2013) indicates that cargo theft is on the increase. Adrian Marsh considers the extent of the problem and how transport and logistics companies can protect themselves.
There has been a startling increase in recorded cargo thefts across Europe, from 689 in 2012 to 1145 in 2013. These thefts cost businesses in Europe an estimated €8.2billion a year, with Germany, Holland and the UK at the top of the list. So what kind of fraud are we looking at?
One of the ways that thefts are carried out is via fraudulent or bogus carriers, often sourced though Freight Exchange Websites. The movement of goods may be subcontracted to a carrier who disappears with the cargo. The fraudster will use the identity of either a legitimate or non-existent company and will prepare and provide false documentation, often with an anonymous email account.
Fraudulent sales transactions are another way that cargo can be stolen. A bogus buyer may enter into a contract of sale with a supplier who then appoints a carrier to deliver the goods, but the buyer then disappears without paying the supplier. In these situations, the supplier may look to the carrier for compensation.
This type of theft can occur when the carriers are commandeered. Often, vehicles are targeted during a driver’s rest break in the cab, at a layby, or when a vehicle is left temporarily at motorway services. There have even been reports of thieves cutting roof access in their own vehicles, following target vehicles and when close enough, climbing onto the target vehicle, gaining access and throwing contraband back to their accomplice.
Another way in which fraud can be perpetrated is when a supplier or carrier’s own employees are party to it. For example a driver may purposely leave the vehicle unlocked and unattended in a prearranged location for thieves to access or he may be complicit in a staged hi-jack.
With no central record of transport related crime, it is difficult to develop a coordinated approach to tackling this problem. However, in early 2015, the UK launched a full-time Association of Chief Police Officers National Vehicle Crime Intelligence Service (NaVCIS Freight) to combat road freight crime. NaVCIS Freight is a police and private sector partnership targeting crime that affects the road haulage and freight transport industry in the UK.
The key to avoid falling victim to cargo fraud is to carry out due diligence into both the carrier and the buyer, as appropriate, to determine their true identity:
- Check the transport licence of the carrier, along with the Chamber of Commerce Registration.
- Check the carrier’s insurance policy and VAT number.
- Carry out a search of Companies House to check the carrier is a valid company.
- Request details of the driver in advance and check the identity of the driver upon arrival at your premises.
- Check the VAT number provided by the buyer and obtain a credit report.
- Be aware of anonymous email addresses and mobile telephone numbers.
- Demand that references are provided, and check them.
- Check the validity of credit card payment details before dispatching the goods.
- Do not agree credit terms with a new customer.
- Check out the delivery address, even if simply by using Google Earth.
- If the delivery address looks suspicious, or if the customer requests delivery outside or near an address, or another vehicle, then do not effect delivery.
It is also important to ensure that employees receive regular and updated training on internal procedures, checks and fraud awareness.