Cargo Theft in Latin America Presentation for IUMI Jorge Pecci Saavedra AIU MLCE
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Cargo Theft in Latin America
Presentation for
IUMI
Jorge Pecci SaavedraAIU MLCE
OutlineI- EnvironmentII- Regional statistics on cargo theftIII- Hi risk Countries
• Mexico • Argentina• Brazil• Colombia
IV- Recommendations and conclusions
Cargo TheftGlobal Environment
• Epidemic problem• Cargo crime cost US Economy:
12 Billion/year • Inside jobs• 90% of cargo theft occur while “on wheels”• Criminal elements are moving toward cargo
theft to fund other illegal activities
Latin America-EnvironmentTransportation
• Recent Events affecting trade• Mercosur/Andes Treaty/NAFTA• 90% of the Inland transit goods are
transported by trucks.• Pacific/Atlantic• Port privatization. • Warehousing/Just In Time• Economic crisis affecting the region
Latin America EnvironmentThreat• “Hostile risk environment”• Criminals are organized and well-equipped• Corruption within legal establishment
Virtual impunity for offendersAlleged participation by LawEnforcement Agencies (LEAs) in criminal activityInvestigation/recovery often hampered
Latin America EnvironmentScenario• Recent Events
• High risk areas
• Weak law enforcement/corruption
• High rate of Unemployment
• Easy to sell in the black market
• Low/non-existent punishment for thieves
Latin AmericaCommon weak pointsTruck/cargo = Weak/easy prey
• Packaging • Supervision • Handling of information• Inland carrier quality• Logistics / Warehousing• Road
Container Theft without tampering with the seal
Latin AmericaTheft and robbery
70%
5%
15%
10%
Hijacking ReplacementPilferage Warehouse Pilferage Transport
Source: AIG
Santos &
Sao Paulo
Buenos Aires/Cordoba
& Santa Fe
Asunción / Ciudad del Este
Rio de Janeiro
Bogota/Santa Marta/
Barranquilla & Buenaventura
Boarder Colombia/Venezuela
Caracas/La Guaira
Quito/Guayaquil South
AmericaAreas of major exposure to hijacking
DISTRITO FEDERAL:54%
JALISCO: 9%
ESTADO DE MÉXICO: 14%
SINALOA: 2%
NUEVO LEÓN: 4%
GUANAJUATO: 4%
PUEBLA: 2%
MICHOACÁN: 1%
Mexico High Risk Areas
Area of Major Risk
Mexico
0
10
20
30
40
50
60
70
80
90
1994 1995 1996 1997 1998 1999 2000 2001
Market claims count
Source: Procuraduria General de Justica
X 100
Mexico 98-00: Claims Count
0
1 0 0 0
2 0 0 0
3 0 0 0
4 0 0 0
5 0 0 0
6 0 0 0
7 0 0 0
8 0 0 0
1998 1999 2000
Robbery Ordinary Risks Other
Mexico 98-00 Claims Paid
0
100
200
300
400
500
600
1998 1999 2000
Robbery Ordinary Risks Other
Latin AmericaAlleged Corruption and lack of professionalism
Turning a blind eye to crime
• Customs Agents• Customs Officers• Law Enforcement: Police, Coast
Guard• Border Guards • Courts System• Government
ArgentinaMajor risk areas
• U$ 300M per year on cargo theft
• Stolen cargo is typically sold before the crime
• Main routes with access to major cities
Capital Federal
34%
Prov.of Bs. As.
50%
Interior16%
Source: Secretaria de Seguridad del Interior
ArgentinaType of cargo stolen
Food
Electronic
s
Pharm
aceu
ticals
Auto sp
ares
Cases
Brazil Cargo Theft“Growth Industry”
0 2000 4000 6000 8000 10000 12000
1996
1997
1998
1999
2000
Market Claim Count Market Claims Paid x 40,000
BrazilCargo Theft
• 65% of GDP is moved by truck
• U$ 400M per year
• Link with the illegal drug trade
• Only 6 Insurance Companies
Interior7%
S. Paulo42%
Great S. Paulo17%
National Routes of
access to SP and RJ
34%
Source: AIG Argentina
BrazilType of cargo stolen
Food
Clothin
g
Electro
nics
Pharm
aceu
ticals
Combu
stible
s
Tobac
co
Cases
Colombia
• U$ 100M/Year in Cargo Theft
• Guerrilla involvement
• 1999- 2500 cases• 2002- 3800 cases• Food, Clothing, and
Drugs
High Risk Area
Low Risk
Mid Risk Area
Colombia: Guerrilla attacks
Guerrilla & Paramilitary
• During transit • During warehousing• Hijacking and theft• Deliberate fires• Reprisals
ColombiaGuerrilla attack
Argentina and MexicoSimilarities“Pirates of the Roads”
• 65% of hijacks are suffered by sub contracted trucks
• 100% of trucks are recovered
• 6% of cargo is recovered
Some source of security
5%
Armed custody/
STS2%
No security
93%
HijackingModus Operandi
• Where: Buenos Aires/Bogota/Mexico DF, Caracas-Valencia 60/70% of thefts.
• When: Mostly at night and at dawn.
• How: Interception of trucks with a fast car. 2/3 armed criminals
• Kidnapping of driver 2/3 hours in a separate car. No physical aggression to driver.
• Anonymous call reporting position of EMPTY truck
Argentina/Venezuela/Colombia/Mexico
Brazil
• Where: Sao Paulo 60% and Rio de Janeiro 25% of theft. Including Highways
• When: At any time
• How: High tech theft: Communications/trained resources/automatic weapons.
• More than 2 cars to intercept the truck or convoy.
• Generally more aggression toward the driver
• Truck is not always recovered
Latin AmericaHow to reduce theexposure
• Partnership between shipper and carrier
• Conscientious analysis
• Cost effective solutions
• Tailormade recommendations
• True involvement/Proactive participation
Lets review some basic guidelines
Important Note: The following are just a few basic guidelines with the sole purpose of giving you an example and should not be considered as effective generic recommendations.
Import/ExportShipments ISO Containers
On board:• Full container
vessels• FCL (full container
loads)• Stowed door to door• Under deck • Use of locking bars
Ashore:• Short periods of storage• Container stacked high
up • Stowed door to door• Next to security
control/house• Far away from fences• Use of locking bars
Locking BarsHelp but are not the solution
PackagingConsiderations
• External packaging
• Unitized
• No advertising
• Security Tapes/straps
Security tapes and straps
Activated
Handling of information80/85 percent of cargo theft involves
inside information
• Information distribution
• The chosen road
• ID Cards
• Background checks
Inland carrier
Know your transporters!
• Solvent carriers
• Create a commercial commitment
• Avoid sporadic contracting
• Demand modern units
• Communication systems
Examples
Drivers/LogisticPersonnel
Don’t hire thieves!
• Experienced drivers
• Background checks
• Routes should be altered
• Avoid subcontracting
Warehousing/Distribution Centers
The main source of information
• Specific areas for loading/discharge
• Access control.
• Waiting areas for drivers/Communication
• Background checks
Route, stops andtime schedule
• Pre-determined
• Alternative routes
• Main/Toll roads
• Safe stopping places
• Two drivers during long-haul
Armed Guards
Deterrant or attraction?• Legally licensed
• Background checks
• Weapons/Staff training
• Adequate vehicles
• Communication
Electronic TrackingDevices
Keep an eye on your cargo!• For logistical and security reasons
• Accurate position GPS
• Data communication
• Panic button and automatic systemtriggers
• Effective contingency plan!!
Conclusions• Theft losses are preventable under
dynamic approach• Inside jobs - main concern• Identification of problem and tailor-made
recommendations• Implementation of a comprehensive
program• Background checks are essential• Follow up
“To be cunning is the best line of defense”
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