Rampant theft of cargo in Asia puts global firms in a tight spot
Risky business: Containers being loaded from trucks onto a cargo ship at the Northport Container Terminal in Port Klang, Malaysia.Full Story
#1 Jul 7, 2011
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#2 Jul 7, 2011
Rampant theft of cargo in Asia puts global firms in a tight spot
The New York Times News Service
Wed Jul 06 2011 08:54:14 GMT+0400 (Arabian Standard Time) Oman Time
KUALA LUMPUR (Malaysia): It was mid-afternoon one day at the start of this year when workers at a factory in the Malaysian state of Perak finished loading more than 700,000 condoms into a shipping container. The container was then driven to Port Klang, the busiest port in the country, and loaded onto a ship bound for Japan.
It was a routine procedure for Sagami Rubber Industries, a Japanese company, but by the time the ship docked in the port of Yokohama at the end of January, the condoms had vanished.“The container was empty,” said K.K. Leung, the administration manager at Sagami’s Malaysian factory, whose Japanese colleagues had alerted him to the theft.
The case of the missing condoms made headlines in Malaysia, but it was not an isolated case, according to industry groups. Sagami, they say, was yet another victim of cargo theft, an underreported crime that sometimes includes violent hijackings in this Southeast Asian country.
#3 Jul 7, 2011
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The transporting of goods through countries in the Asia-Pacific region is generally safer than in other parts of the world — like the Americas, Africa and Europe — according to data collected by FreightWatch International, an organisation in the United States that collates information on cargo theft from around the world.
But the organisation’s global threat assessment report published in February said that “there’s little question that cargo theft and supply-chain risk have increased throughout Asia”— a worry for international companies as economic momentum shifts eastward.
Malaysia, which lies along a number of important trading routes, is a particular concern. The country is increasingly becoming a major thoroughfare as more companies ship their goods to and from neighboring Singapore, one of the world’s busiest ports, which is connected to much of the rest of Southeast Asia by a road through Malaysia.
Syndicate in Malaysia
Industry groups say the number of companies taking preventive measures like hiring armed guards to protect their trucks in Malaysia has increased in recent years, amid growing awareness of the threat of cargo theft.
“There’s a syndicate in Malaysia, which is quite rampant,” said Alvin Chua, president of the Federation of Malaysian Freight Forwarders. He added that this group of bandits had focused on trucks carrying electronics in recent years.
The freight federation holds regular information sessions for its 1,200 members in which they discuss how they can better protect their cargo with measures like installing GPS devices and attaching electronic seals to containers to track their location around the globe.
“There’s a lot of things we tell our members to do, but it’s still happening,” Chua said. The measures to increase security appear to be having an effect, though. Figures provided by the Malaysian police show that cargo crime has declined in recent years, from 357 reported incidents in 2006 to 60 last year. In the first four months of this year, 21 incidents were reported.
The police figures list the number of incidents, but not the value of the goods stolen.
Fadil Marsus, superintendent of the criminal investigation department of the Malaysian police, said a number of operations conducted by the police and cooperation with the industry had helped reduce freight crime. But the precise level of cargo theft in Malaysia has proved hard to pin down.
Companies are reluctant to report thefts because they are afraid the information may damage their reputations and increase their insurance premiums, said Tony Lugg, the Asia representative of the Transported Asset Protection Association, a non-profit organisation that provides security advice to technology and logistics companies.
The association estimates that more than $22.7 million worth of goods was reported stolen from Malaysian ports, airports, warehouses and trucks from 2007 to 2010.
#4 Jul 7, 2011
Those figures give Malaysia the dubious distinction of having the second-highest level of cargo theft in the Asia-Pacific region after Hong Kong in terms of the value of goods stolen, according to the association’s calculations.
Unlike the Hong Kong authorities, the Malaysian police have not shared data with the association, which compiles its figures on the basis of reports from companies and the news media.
Because of companies’ uneasiness about reporting thefts, the actual amount of cargo stolen in Malaysia is probably higher than figures from the association or the police indicate, Lugg said. The thefts also tend to have an aggressive nature.
“The crimes are more serious in Malaysia compared to Hong Kong, in the sense that there’s hijacks or some form of robbery with violence,” Lugg said. Weapons, including guns and knives, have been used to hold up trucks, he added. FreightWatch International, the US organisation, cites Malaysia and the Philippines as countries that report frequent occurrences of in-transit cargo hijackings with violence or the threat of violence.
In the US, which has been experiencing a surge in cargo theft, bandits rarely use violence.
Regardless of their locations, most hijackings are inside jobs in which someone involved in transporting the goods leaks information to the thieves, Lugg said.
He said cargo theft was often carried out by organised crime groups and could result in multimillion-dollar losses for companies, both in terms of the loss of merchandise and in production delays.“If component parts are stolen on the way to the manufacturing plant, that plant may not be able to operate,” he said.
That is why companies are spending more and more money to try to prevent such costly thefts.
An executive at a company that manufactures semiconductors in Malaysia, who spoke on the condition of anonymity, said his company had increased security measures after one of its trucks was hijacked eight years ago.
The company now requires all of its freight carriers to meet increased security measures, he said, including criminal background checks on drivers, installation of GPS tracking devices, having two people on board and minimising night trips.
TNT Express, the multinational logistics company, increased its ability to keep track of its fleet in 2005 when it introduced its Asia Road Network, which spans Singapore, Malaysia, Thailand, Cambodia, Vietnam, Laos and China.
Using GPS devices installed on all trucks, and closed-circuit TV cameras on vehicles carrying more valuable cargo, the company monitors the location of its trucks traversing these countries from a security control centre in Kuala Lumpur.
“We can track the vehicles 24/7,” said David Stenberg, the Singapore-based general manager of the TNT Asia Road Network. In Malaysia, the police confirmed that six people were arrested in the Malaysian condom theft, and 90 percent of the stolen condoms were recovered.
Leung, the administration manager at Sagami Rubber Industries, said that no company employees were among those arrested. He said he believed it was most likely that the culprits had links to workers in the freight company that transported the condoms, which he declined to name.“I doubt we will continue to use them,” he said.
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