COVID-19 redirects cargo crime, along with demand

COVID-19 redirects cargo crime, along with demand

Cargo crime follows spikes in demand for products, especially in a pandemic. Photo credit: Shutterstock.com.

Cargo theft might not be the top concern during a pandemic, but when bad things happen, bad people can find opportunities. “We have seen shipments of medical masks go missing” amid shortages of such masks, said James Yarbrough, director of the global intelligence program at the British Standards Institution (BSI), a national standards body and provider of risk management services.

Cargo crime is occurring in places it is not typical, such as Hong Kong, he said, as supply chains are rerouted and certain products are prioritized, affecting their value. Medical masks are one example, but hand sanitizer and toilet paper — not usually high-ticket items but at the moment in short supply — are attractive products for freight thieves to steal and resell.

The “threat landscapes” BSI monitors are changing rapidly. “As we move through this pandemic, there will be a very high need for protecting pharmaceuticals and medical supplies,” Yarbrough, who is based in Atlanta, said in an interview Tuesday. “Everybody has a lot on their plate, but security has to be paramount right now. People desperately need these supplies.”

The impact of coronavirus disease 2019 (COVID-19) is one of the biggest threats BSI has seen to supply chains in years, thanks to its pervasiveness and potential duration. To gauge that impact, BSI is continually surveying about 90 of the businesses and organizations that subscribe to its Supply Chain Risk Exposure Evaluation Network, or SCREEN.

It completed its first COVID-19 survey on March 1, as the disease began to spread in the United States, and plans more surveys in coming months. “We are fielding questions from our clients constantly,” Yarbrough said. “The initial questions were about production disruption in China, but we’re seeing things change dramatically” as the global pandemic unfolds.

Regulations or orders that might unsettle delivery schedules or delay unloading of shipments, such as New Jersey’s order that retail stores shut down at 8 p.m., could create opportunities for cargo thieves, he said. “When shipments are off schedule or in the wrong place, that’s when they become more vulnerable to criminal activity,” said Yarbrough. “Bad things can happen.”

The threat to ‘business continuity’

Cargo crime is one supply chain threat BSI tracks, but the biggest right now is the threat to “business continuity” — can enterprises continue to produce goods or provide services if their supply chains fail or break down? And are businesses planning well and deep enough to combat the effects of a global pandemic? The prognosis isn’t necessarily a good one.

In its survey, released Tuesday, BSI found 54 percent of respondents had a business continuity plan that included plans for a disease outbreak. However, 67 percent said those plans differed little if at all from contingency plans for other types of disasters, such as hurricanes, earthquakes, fires, or floods. Those disasters are more localized and have a fixed duration.

Not only is the COVID-19 pandemic global, but its duration is unpredictable. That makes contingency planning more difficult. “It’s like what we call the balloon effect,” said Yarbrough. “You squeeze one part of the balloon and the air flows to another. We’ve seen a sudden, dramatic shift in demand to necessities. Where’s the demand going to go next?”

And unlike planning for a hurricane, business continuity plans during a pandemic will have to change as rapidly as conditions, and take multiple possible conditions into account. Many companies are still in the initial stages of planning their response, focused on securing and safeguarding their own personnel and businesses. The next stage is harder to define.

Businesses need to plan for several possible scenarios, including a drop in consumer demand for non-essential items and more widespread shutdown of facilities such as big box and department retail stores — a step several companies announced Tuesday — and the physical locations such as distribution centers and warehouses that support them.

Shippers need to take communication with suppliers, partners, and customers to a higher level, Yarbrough said. “This is all happening so fast, I think a lot of people are still in assessment mode,” he said. “For supply chain practitioners there are a whole lot of challenges here that we’ll have to unpack and understand quickly and adapt to on the fly.” 

Contact William B. Cassidy at bill.cassidy@ihsmarkit.com and follow him on Twitter: @willbcassidy.