Security in the Transport/Logistics Industry

pic1By Ray Mancini.

This article examines issues around security in the transport industry. It does not provide all-encompassing solutions to the problems, but it does provide what are, in the author’s opinion, simple, cost-effective and achievable solutions that focus on the five key topics. If utilised wisely, these solutions could provide companies with an opportunity to not only protect their brand, but also possibly generate increased revenues.

Organised Crime

Organised crime is increasingly found in industries where there is traditionally little awareness of, or exposure to, organised crime activities, where gaps in regulations can be exploited and/or where the penalties for crime are not sufficient to deter criminal behaviour. The transport industry presents opportunities for this exploitation by organised crime (Australian Crime Commission, 2007).

From the author’s own experience, organised crime members have been able to infiltrate companies as an owner-operator contractor or as a contract truck driver. One transport company employed a contract truck company to transport their freight locally; however, this company’s owner had strong links to an organised crime syndicate and employed members from his group.

Importantly, the fact that there is no dedicated national law enforcement unit targeting or combating organised theft of freight within Australia, especially involving organised crime gangs, has permitted these crime syndicates to flourish. Previously, a joint venture by Australian Federal Police (AFP), customs and various state law enforcement agencies created the RAFT project (Reduce Aviation Freight Theft), which introduced a multi-agency approach to investigating aviation theft. However, this project was abandoned in most states and the intelligence was handled by AFP in Canberra. (To the author’s knowledge, Queensland is the only state that still maintains the RAFT project that involves security employees from transport companies). The RAFT project was conceptually a positive move by the law enforcement agencies; however, it was hamstrung as it only targeted aviation freight and not necessarily road freight as well.

While it is acknowledged that many state’s law enforcement services do have a ‘gang crime squad’ to investigate the activities of organised crime gangs, many crimes perpetrated within the transport/logistic industries are often not reported or are overlooked by the police due to the crimes themselves being a lower priority, or there being a lack of avenues of inquiry.

The Transported Asset Protection Association (TAPA) is a unique forum that unites global manufacturers, logistics providers, freight carriers, law enforcement agencies and other stakeholders with the common aim of reducing losses from international supply chains (TAPA). According to the European Union, the theft of high-value, high-risk products moving in supply chains in Europe costs business in excess of 8.2 billion Euro a year. The threat from organised criminals is increasing and becoming more violent (TAPA).

Recommendations:

  • Re-create and implement the RAFT project, including the Joint Aviation Investigation Team (JAIT), on both a national and state level, involving both road and aviation transport companies and the respective security companies.
  • Provide continual security awareness training for employees and security personnel to reduce apathy displayed by employees and managers in the respective transport companies.
  • Provide TAPA training to staff and adopt TAPA’s minimum security standards; undertake regular auditing of security by a qualified TAPA auditor or security personnel trained in TAPA certification standards.

Terrorism

Transport companies have transformed into transnational companies, providing international freight services across the globe. As such, dramatic increases have occurred in the demand for express service delivery of international freight using aviation services, including both freighter and passenger aircraft. This increased demand increases the risks of terrorist activities within this area. For example, in 2010, two separate items of freight (printer cartridges) were determined to contain improvised explosive devices (IEDs). These items had already been loaded onto two separate freighter aircraft in the United Kingdom for flights into the United States. One can only imagine what might have happened if these two IEDs exploded over heavily populated areas; it could have replicated the disaster over Lockerbie, Scotland, in 1988. According to the Australian Government, transport systems continue to be attractive targets for terrorists seeking to inflict mass casualties, economic damage, instill fear and create spectacular media imagery.

Whilst the transport industry already has measures in place, such as screening and security checks, to reduce the risks of IEDs and other explosives or chemicals being loaded onto aircraft, criminals and terrorists continue to improvise methods to circumvent detection strategies. These incidents have caused a growing awareness in the industry for improved security. Many governments have made it mandatory for improved freight screening and security procedures to prevent breaches.

Transport security encompasses aviation, air cargo supply chains, maritime and mass passenger transport systems such as road and rail. The Office of Transport Security (OTS) is responsible for regulating and monitoring transport and air cargo security on behalf of the Australian Government and for administering an intelligence-led, risk-based preventative security regime. OTS works with the aviation and maritime industry to achieve sustainable and proportional preventative security measures that are commensurate with the nature and level of the terrorist threat.

Supply chain security for air cargo is regulated in Australia under the Aviation Transport Security Act 2004 and Aviation Transport Security Regulations 2005. It is administered under the Regulated Air Cargo Agent (RACA) and Accredited Air Cargo Agent (AACA) schemes. The RACA scheme regulates air cargo security for a range of industry participants through the preparation, implementation and compliance of a transport security program, compiled by the respective transport companies and the regulated shipper scheme, that includes:

  • cargo terminal operators at airports
  • express post services
  • freight forwarders (including express freight companies)
  • regular international postal services

All freight for international destinations via the aviation industry is processed according to the ‘unknown shipper process.’ However, due to time constraints, lack of knowledge or lack of communication, this process is often neglected, increasing the odds and risks that an unlawful item or substance could be loaded onto an aircraft.

It is interesting to note that, in Australia, surface (road) transport security arrangements are under state and territory jurisdiction, with OTS working to coordinate the dissemination of best practice information on security measures. Implementation of preventative security measures is the responsibility of owners and operators of the individual transport companies.

Recommendations:

  • Provide training/information for transport operators and employees in relation to RACA and security awareness for the security of their freight.
  • Provide updated and continual training for security and transport employees (company or contract) in the areas of transport/logistics and aviation security requirements, including RACA and other regulatory or convention requirements, including the ‘unknown shipper process’.
  • Use suitably trained and qualified security guards to provide professional and quality guarding services within the transport/logistics industry.

Theft of freight

Criminals use employees to gain intelligence or provide information as to which transport company is transporting the various brands or products of high-value electronic freight (for example Apple, Panasonic and JVC electronic items) and to gain information on the company’s weaknesses and areas of opportunity in order to plan and commit offences.

Offences could be committed across various states (causing jurisdictional issues with law enforcement agencies) and/or whilst the freight is in transit (difficult to track and delays the discovery of the crime). For example, high-value freight is often targeted on the Sydney to Perth tour as it is a three-day transit tour, thereby delaying the discovery of the crime and reducing the possibility of apprehending the perpetrators.

Many employees in the transport industry are low income earners, which increases the risk of these employees providing information, stealing freight or providing accessibility for criminals to access freight, in order for the employee to supplement their low wages through bribes or ‘pay offs’.

It is a fact of life that the majority of the workforce will struggle to survive with the wages that they earn. In more cases today, many people live in excess of their earnings, which is powered by their yearnings to have more. This causes frustrations with their working life and conditions, which can be reflected onto their attitude towards their employer. (Mann and Al-Khadha)

The employee’s desire to have a better life and possess more expensive items is created by what Mann and Al-Khadha suggest as marketing efforts to stimulate evermore wants for evermore consumer goods. New products can be presented as compensations for the general powerlessness, frustration, insecurity, domination and struggle of the majority of the population. Here is another major source of duress for many people – the duress of thwarted desires, along with envy and resentment of those who apparently have everything while doing nothing to deserve it.

This stress is then reflected by the employee’s attitude towards their employer or business. One of these attitudes is called rationalised action. Rationalised action can be described with the example that an employee who steals an item rationalises his actions with the fact that the company is making millions but not looking after its workers.

Additionally, many workers in the transport industry are transient, temporary labour hire employees who have no allegiance to the company and are hired because no one else has a desire to complete a four-hour split shift between 2am and 10am or 3pm and 9pm. As such, the risks of theft and damage due to poor handling skills and lack of training is increased tenfold, especially since the turnover of staff is significant and the continual training of these personnel is a large cost burden to the parent company.

Many large transport/express companies have implemented ‘up-to-date’ technology to allow customers to track their consignment over the Internet and to provide internal ‘visibility’ of a specific consignment or item. However, those companies recognise that many employees do not scan the freight for a variety of reasons, including laziness, lack of time or so that the item itself can be stolen. Even those companies that conform to the TAPA convention security standards still suffer losses through theft or compliance failures when employees do not comply with policies or procedures.

Many incidents lack the appropriate security investigation to uncover the root cause so that procedures or strategies can be implemented to reduce the incident or risk of the specific failure occurring in the future.

Recommendations:

  • Provide training on a continual basis for all employees and contractors to maintain their knowledge of scanners, scanning disciplines and scanning compliance requirements.
  • Provide adequate and frequent training of freight handlers to handle the freight in a correct manner to reduce the risks of damage or injury to the freight handler.
  • Provide adequate training of security personnel who are involved in the handling, securing, sorting, scanning and loading of high-risk freight or freight classed under an ‘enhanced security program’ requirement.
  • Provide appropriate training to security personnel/transport staff to enable the thorough conduct of factual investigations and subsequent root cause analysis.
  • Ensure security personnel/transport employees have the knowledge to conduct security audits and risk analyses so as to reduce the risks of theft or shrinkage.

Transport Companies

Transport companies operate under increasing financial challenges caused by the world’s markets, including fuel prices. Various natural disasters, such as the Iceland volcano eruptions, can bring air traffic to a standstill and cost companies millions of dollars.

The profit margins for transport companies are not large. Therefore, freight is moved as rapidly as possible to ensure the highest level of profit and, more importantly, repeat business from a satisfied customer. However, it is this rapid handling of freight that causes process failures to occur. Efficiency versus expedience is always an issue with the movement of freight and a headache to security personnel tasked to investigate missing freight, as expedience will always be put first. Further, the lack of customer service units and/or appropriate security personnel, coupled with the lack of appropriate training, can delay the early detection of lost or stolen freight, which in turn increases the time taken to locate the freight.

Recommendations:

  • Provide appropriate training to employees to equip them with the knowledge and tools needed to conduct inquiries to locate freight or to report freight missing as soon as possible.
  • Provide accessible training tools and workshops, which are cost-effective and do not waste either the employee’s or employer’s time.

Security Companies

With the various security issues experienced across the world and with new challenges being faced every day, numerous security firms have been formed to meet the growing demand for private security as law enforcement agencies are battling to cope with increases in demand for their services.

Many security companies offer security guarding services within Australia and, in a competitive market, attempt to underquote their competitors to win the contract. As a result, these security companies have to reduce their costs, which may include staff wages/conditions and training. This results in the supply of undertrained and unwilling security guards.

The supply of a security guard who is tasked to watch a CCTV system and sit at a guard hut to provide access control to a depot is no longer acceptable or viable. Security personnel now and in the future need to be fully trained in a variety of areas (for example, to investigate losses, understand and use complex electronic surveillance equipment, have knowledge of the transport/logistics industry), be able to multi-task and have a willingness to conduct other transport-related duties such as pallet counts, refuelling vehicles, audits and so on to assist in providing cost effectiveness to the transport industry.

A cheaper service does not always equate to a cost-effective solution. There are security companies that attempt to run with small margins and supply a blanket of security guards at a cheaper rate. Many of these security employees are not paid according to the specific awards and are not trained to an appropriate level. There are, however, competent security companies in the market who are passionate about the security industry and maintain their longevity within the security industry through the provision of a quality security service, which is reflected by their employees.

Recommendations:

  • Source security companies who provide the appropriate level of security services associated or aligned with a registered training organisation and who have transport industry trained/experienced guards to provide the requisite guarding requirements for transport companies.
  • In any hire or tender process, transport companies are encouraged to request references from other transport companies and investigate the incumbent security company to ascertain other evidence of what specialist transport/logistics security services they have provided in the past.

Conclusion

The transport/logistics industry is rapidly evolving and transforming due to many factors, including costs, increasing demand for movement of high-value freight and global security risks. With these changes, the industry must embrace the appropriate high level of security to ensure that their assets, employees and customers’ freight are protected to minimise risks from theft and losses.

The old cliché that security is a cost that cannot be retrieved is a thing of the past. The more savvy transport companies now utilise security services and protection of freight as a selling tool to customers in order to win their business or to increase their bottom line.

Ray Mancini is an internationally known trainer and professional security consultant. He is the CEO of SIG GROUP International Limited, which has been providing security services to the transport industry for the past nine years, with clients such as Star Track, Toll Group, Australian Air Express, Centurion Transport, TNT and the US Navy.

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