The challenge for Logistics in 2023 – how to protect an uncertain future
If 2020 and 2021 challenged us to manage a pandemic on a worldwide scale, an unexpected and unknown risk with consequences for both individuals and companies, 2022 represented a time with new and continuous obstacles, which remain.
The current year will certainly be a period in which uncertainty will increasingly come to dominate our vocabulary. A scenario which does not inhibit confidence and trust, but which demands a rapid response and greater scope for prevention in the face of the most recent forms and dimensions of the crossroads of today. Demanding, in particular, for the Transport & Logistics sector, which I believe is going through an unprecedented phase. In addition to the daily challenges inherent to the activity – from the logistic chain disruption, the human resources shortage or the adaptation to the environmental demands of the market -, the sector is faced with worrying numbers regarding cargo thefts, a growing practice that has continued, both in number and severity, in the second year of the decade.
The small town of Vojvodinci, in Serbia, tells us this. On 5 December 2022, a road transport driver was involved in a robbery of unspecified goods valued at more than 5 million euros. This is the most serious case, during that month, according to data gathered by the intelligence system of TAPA (Transported Asset Protection Association), which indicates that 2022 ended with an average of almost 20 cargo thefts per day, in December, across 28 geographies of the EMEA (Europe, Middle East and Africa) market.
Spain has been one of the most affected countries by this issue, with more than a thousand incidents recorded last year, with losses exceeding 11 million euros. As this is one of the main areas where Portuguese transporters rest and sleep, particularly at service stations, which do not offer the necessary safety conditions to prevent these occurrences, this scenario raises serious concerns as to the safety of goods and drivers, requiring careful consideration of possible mitigating measures.
At global level, in the last 31 days of the year alone, product losses were equivalent to a total amount of 17 million euros. TAPA, an association that aims to support logistics service providers in minimising losses resulting from these episodes, believes that unreported cases would catapult the figures to baffling proportions. The picture of hazards faced by the industry manifests itself as a clear constraint to the operations of supply chain companies and can invariably influence the fluctuations in prices and availability of stocks that affect end consumers.
When looking at the opposite side of the coin, it is possible to understand that this is a paradox – the downtime of transport operators for rest, in safe locations, implies constant detours, increased costs and an extension of transit times that undermine the competitiveness of companies and do not meet the delivery times required by a market in which digitalisation and customer expectations grow, side by side, by leaps and bounds.
This is a threat that, precisely in view of the digitalisation of systems, has extrapolated the boundaries of creativity and placed the impact of wounds on operators in another dimension. In the scope of organised crime, the modus operandi relies more and more frequently on online freight exchanges, digital platforms that, by facilitating the commercial relationship between exporters/importers, freight forwarders and carriers, with clear economic benefits for all parties involved, have also become the target of criminal groups, in order to exploit the vulnerabilities of this system, in terms of security.
After successfully carrying out smaller transport operations and gaining the trust of the customer, these organisations attack when transporting more valuable cargo, at which point the entire cargo, truck, driver and company disappear, whose data uploaded to the said portals is totally false and developed with the specific purpose of swindling the shipper or forwarder in question. This is a reality that we have already been confronted with in the past, with clients losing several hundred thousand euros as a result of the operations of an international organised crime group.
From industrial equipment, tyres, perfumes or fuel, there is no type of goods that escapes this sphere of danger, with equally damaging consequences for vehicles and for the well-being of drivers. What is the necessary response? When any product, company or transporter is at risk, adaptation and prevention are decisive, requiring constant updating regarding the tactics used by criminal networks and careful transport planning, bearing in mind that, nowadays, practically any merchandise may be the target of theft.
With the complexity of logistics chains, transport and logistics insurance, multi-risk or third-party liability insurance, by covering the most diverse risks that can affect the freight forwarding activity, play an indispensable role for the sector, which finds in the alliance with the insurance industry one of the golden rules for minimising the security gaps to which it is exposed.
Through a complete understanding and assessment of the risks of each transport, in which there is an increasingly advanced capacity for data analysis using digital solutions, this presents itself as a critical tool for protecting the assets of Organisations, as well as when damages or losses to third parties are at stake.
Due to the particularity of each business and the characteristics of each geography, customisation is one of the key factors in building a complete solution for the needs of each agent, facing a supply chain with increasingly long and multimodal chains.
A new future is defined right before our eyes. A complex equation to solve. Allied to adequate coverage, logistics companies will not only be mitigating risks, but also incorporating a competitive advantage that will enable them to strengthen business and face any storm that may come their way.
Opinion article by David Sousa, Director of SEMPER, published in the ECO newspaper.