ONE of the much-heralded advantages of the container revolution four or five decades ago was that putting cargo into securely locked steel boxes would make theft a thing of the past.

Certainly, anyone who has worked on general cargo ships will tell you just how commonplace casual theft was. I cannot count the number of times I saw cartons of whisky “accidentally” dropped from a pallet, and the contents of the broken bottles filtered through the cardboard – into conveniently-available tin mugs.

Intervening was not a sensible option. A significant level of cargo loss was generally accepted as inevitable.

So can we now assume that cargo theft on any significant has been eliminated? Sadly, the answer is no, and a recent statement from international freight transport insurer TT Club has reminded us of this.

The insurer said it views criminal fraud “in its many and various manifestations” within the global supply chain as a primary and growing threat. It added that the almost-exclusive use of online facilities to process business transactions enables opportunities for fraud within the complexities of the global supply chain. These range from payment fraud involving existing mandates and impersonation of executives to procurement fraud through false invoicing.

TT Club said carrier fraud, in which criminals impersonate hauliers and other sub-contractors (including drivers with falsified documents) accounted for 84 per cent of TT claims involving fraud or deception in 2022.

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Understandably, TT Club wants to flag these risks and advise the industry on identifying potential fraud and minimising (or even avoiding) losses.

Mike Yarwood, TT Club’s managing director for loss prevention, said: “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.”

He added: “Incidents of fraud that target international supply chains across the globe are not perpetrated by opportunistic criminals working in isolation. In the majority of cases, it is 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 the recent disruption to the freight transport system has proved. Our awareness and readiness to protect our businesses must be stepped up.”

TT Club pointed out that it has produced “significant resources” to help operators shield themselves from fraudulent activities, given that 15 per cent of its cargo theft claims arise from fraud or deception.

The insurer said, for example, that fake invoices, purportedly from an established supplier, have been submitted by fraudsters who infiltrate the online payment system and duplicate or inflate invoices.

Other cases, falling into the category of mandate fraud, entail manipulation of bank transfer details by the fraudster, pretending to be an organisation paid regularly by the operator. This is done by hacking into the victim’s e-mail traffic and impersonating a genuine supplier; bank transfer details for payment of a legitimate invoice are then altered, and the money routed elsewhere.

But TT Club noted that it was carrier fraud that dominated claims last year. Criminals create fake carriers, who intercept haulage instructions from forwarders or shippers, posing as the authentic carrier. They then falsify cargo pick-up or delivery documentation to steal loads.

In one common tactic, fraudsters pose as a forwarder, use 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 the loot to an alternative address.

Yarwood said: “A key aspect of this scenario is that the driver and the shipper are not in direct contact with one another. To avoid incidents such as this and other forms of fraud, 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. This is especially the case in pressure situations, where carrier options might be in short supply, or when there are particular time constraints.”

So, as it stands now, the shipping line carries valuable cargo halfway around the world and delivers it safely in port – only for somebody to drive in with a truck, pick up the ever-so-safe steel box and disappear.

That is a long way from cartons of whisky being “accidentally” bounced onto the deck. The current situation is very much in the realm of criminal gangs.

Tracking devices are available, but Yarwood said criminals can overcome detection devices. Perhaps, though, developing that technology further is part of way forward in suppressing cargo theft.