Archives for January 2023

The National Vehicle Crime Intelligence Service (NaVCIS) is a police unit with a freight team that collates, analyses and disseminates Road Freight Crime information across England and Wales. The unit has been recently tasked by the UK Government’s Home Office with delivering a Problem Profile on freight crime.  TT Club is supporting NaVCIS Freight and its report with the aim of obtaining increased public funding to address the situation.

The ten-thousand-word report entitled ‘Profile of HGV, Freight & Cargo crime across England & Wales 2022’ (Freight Crime) now completed, is extensive in detailing a range of aspects from types of crime to varied methodologies and from locational analysis to direct and indirect costs to cargo owners and the economy overall.  It also has an number of recommendations on how such crimes can be combatted.

The report and other NaVCIS Freight analysis estimated the value of losses across England and Wales in 2022 amounted to £66.6 million.  There were 4,995 HGV and cargo crime notifications received last year (with data on reports still coming in) and NaVCIS Freight participated in 284 arrests, supporting a further 43 crime operations involving this type of crime.  The unit’s work has in part been responsible for the reduction in the indirect cost to the national economy from an estimated £700 million in 2019 to £428 million in 2021.

“This is still an alarmingly high level of loss despite the excellent work of the NaVCIS unit,” says Mike Yarwood, Managing Director, Loss Prevention at freight transport insurance specialist TT Club.  “Recognition by the UK Government of the need for action to combat such crime is welcomed and we are hopeful that the NaVCIS Freight Crime problem profile will instil some urgency into such action and elicit financial support.   In the meantime, the unit relies entirely on funding from industry including the insurance community.  TT urges entities that don’t yet support NaVCIS Freight to proffer their support as we do ourselves.”

Key conclusions outlined in the Freight Crime report are:

• Freight crime is committed by Organised Crime Groups (OCGs), prepared to travel hundreds of miles; highly skilled, determined and mobile criminals, aware of police tactics.
• This is a low risk and high reward crime, regrettably low on police priorities due to available resources.
• Supply sector under intense pressure from effects of crime, which causes disruption and delay, impacting the viability of companies, retention of staff, and investment in the UK.
• Lack of a central crime category or tag means crime largely hidden, lenient criminal justice outcomes following prosecutions and low priority for action by government.
• Lack of investment in infrastructure, particularly in improvement of parking security standards, to be sufficient to deter criminals.
• Direct public health risk may arise from stolen medicines and food stuffs.

“Our report contains wide-ranging recommendations in order to rectify, or at least reduce the effects of what we believe is a damaging situation at all levels – to individuals, consumers, retail and manufacturing sectors, logistics and transport companies, insurers and the national economy as a whole.  We have put forward this advice to Government by way of this report,” DCI Brett Mallon, Head of unit at NaVCIS .  “Investment in, and legislation surrounding secure parking is not the least of these.  There are law enforcement and policing reforms regarding freight crime that are also urgently required and, of course through the recognition of the seriousness of the issue, a significant increase in resources as well.”

A recent example of NaVCIS’ effectiveness in combatting these crimes and bringing the perpetrators to justice is provided by Operation Luminary involving eighteen months work as a result of which three criminals were jailed for a range of offences related to the theft of lorries and trailers containing cargo to the value of over a million pounds.*  The methods used were sophisticated and included the use of advanced technology such as scanners, key cloning equipment and tracker radios to trace vehicles and block communication signals.  With NaVCIS’ help further successful prosecutions are anticipated surrounding serious freight offences across the country.

For its part TT Club will continue to support the work of NaVCIS Freight, participating in information sharing, investment and publicising the excellent work of the unit.  “Policing authorities and central Government must be brought to understand the extent of both the direct and consequential losses sustained as a result of this less recognised trend in freight crime,” concludes Yarwood.”

*https://www.west-midlands.police.uk/news/trio-jailed-after-bmws-lorries-and-trailers-stolen

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1,100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 93% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more. www.ttclub.com

Criminal fraud in its many and various manifestations within the global supply chain is seen by International freight transport insurer TT Club as a primary and growing threat.  Carrier fraud in particular is a dominant occurrence. Renewed vigilance is required and encouraged by the insurer.

London 12^th January, 2023

The almost exclusive use of online facilities to process business transactions allows a myriad of fraudulent pursuits to find opportunities within the complexities of the global supply chain. These have many manifestations; from payment fraud that involves existing mandates and impersonation of executives to procurement fraud featuring false invoicing.

Carrier fraud, in which criminals imitate hauliers and other sub-contractors, including drivers with falsified documents, accounted for 84% of TT claims involving fraud or deception in 2022. TT is eager to pinpoint these risks and offer advice to industry on how to not just identify potential fraud but to minimise and avoid losses through them. 

“No one – from freight forwarders, shippers, and carriers to container owners and logistics, ports, warehouse and depot operators – should underestimate how lucrative an industry fraud is. Using sophisticated, low-risk tactics, fraudsters can easily steal large amounts of money or consignments of cargo,” says Mike Yarwood, Managing Director, Loss Prevention at TT.

“Incidents of fraud that target international supply chains across the globe are not perpetrated by opportunistic criminals working in isolation but in the majority of cases the work of sophisticated organised crime gangs. They have well-honed methodologies that are adaptable in the face of detection devices and changes in operating procedures, as the experience of recent disruption to the freight transport system has proved. Our awareness and readiness to protect our businesses must be stepped-up.”

TT has produced significant resources* to assist operators to shield themselves from fraudulent activities as it sees 15% of its cargo theft claims arise from fraud or deception.  Specific examples include the intentional submission of false invoices purportedly from an established supplier but actually generated by a fraudster infiltrating the online payment system and duplicated or inflated invoices. Other cases, falling into the category of mandate fraud, experience criminal deception by manipulation of bank transfer details by a fraudster pretending to be an organisation paid regularly by the operator by hacking into the victim’s email traffic and imitating a genuine supplier alter bank transfer details for payment of a legitimate invoice. 

TT found however that carrier fraud dominated its claims of this type last year.  There are instances of fake carriers intercepting haulage instructions from forwarders or shippers and posing as the authentic carrier; also falsifying cargo pick-up or delivery documentation to steal loads.

One common tactic is where fraudsters pose as a forwarders using a freight exchange site and provide false instructions to a driver. They match a legitimate haulier to a shipper, facilitating the movement of goods. The fraudster then acts as a ‘middle man’ between these two legitimate companies, arranging the collection and directing the driver. Once the trucker has collected the goods, the fraudster provides new instructions to deliver to an alternative address where the cargo is stolen.

“A key aspect of this scenario is that the driver and the shipper are not in direct contact with one another,” explains Yarwood. “To avoid incidents such as this and other frauds it is crucial to make employees aware of the possibilities, to take extra care to verify documentation and instructions directly with customers and/or trusted partners, especially in pressure situations where carrier options might be in short supply or when there are particular time constraints.” He advises. 

These are but samples of the various modus operandi employed by those intent of defrauding supply chain businesses. TT is determined to maintain a flow of information designed to help the industry combat such practices and to underline both their extent and devious nature in order to reduce financial losses and further disruption to fragile supply chains.

* TT Talk | Be alert to ‘carrier fraud’ (ttclub.com)

   TT Talk | Procurement fraud (ttclub.com)

  TT Talk | Mandate fraud and CEO fraud: do not be a victim (ttclub.com)

  TT Talk | Identifying & avoiding fraud (ttclub.com)

ENDS

About TT Club

TT Club is the established market-leading independent provider of mutual insurance and related risk management services to the international transport and logistics industry. TT Club’s primary objective is to help make the industry safer and more secure. Founded in 1968, the Club has more than 1,100 Members, spanning container owners and operators, ports and terminals, and logistics companies, working across maritime, road, rail, and air. TT Club is renowned for its high-quality service, in-depth industry knowledge and enduring Member loyalty. It retains more than 93% of its Members with a third of its entire membership having chosen to insure with the Club for 20 years or more. www.ttclub.com