The risk to your supply chain might not be what you think

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2017 is likely to see further threats of cargo theft and drug smuggling in the Americas and Europe, protests over wage and other labour issues across Asia, and persistent risks of terrorism, including terrorist targeting of the supply chain.

The prediction comes from the British Standards Institution’s annual Global Supply Chain Intelligence report, which has just been published.

Malory Davies FCILT, Editor.

Malory Davies FCILT, Editor.

The report analyses the major threats that face supply chains worldwide and it says the most notable changes in threat levels in the rise in cargo theft – particularly in the Americas.

In Europe, the report identifies shifts in cargo theft trends and tactics across Germany and Italy. “An increasingly high rate of cargo theft plagued freight shippers in Germany – it’s estimated that nearly half of all cargo truck thefts were incidents in which thieves slashed into the tarpaulins of trailers to steal cargo, a common theft type due to the widespread usage of soft-sided trailers in Europe.”

Europe also experienced significant terrorist attacks in Nice, France in July and Berlin, Germany in December, along with dozens of counterterrorism arrests across Europe in 2016. Those attacks in particular also underscored the threat that terrorists will exploit the supply chain to perpetrate attacks.

In both cases, men linked to ISIS used cargo trucks to ram into crowds of civilians. The report highlighted the fact that the Berlin attacker even perpetrated an explicit disruption of the supply chain before the attack by hijacking a Polish tractor-trailer carrying a shipment of steel beams. ISIS-linked plots involving similar timing and tactics are likely to continue challenging European security into 2017.

A main concern in the Americas is cargo theft, the report says, with the most dramatic increase in cargo theft rates in Rio de Janeiro last year.

Labour disputes in Asia have been a significant source of supply chain disruption, although the BSI report says strikes at factories in China dropped ion 2016, for the first time in recent years.

It warned though, that an emerging area of concern is the growth in strikes in the logistics sector, including trucking, shipment processing, and delivery, which rose more than fourfold from nine incidents in 2014 to 40 last year.

Asia also saw an increase in labour rights concerns in Bangladesh in both the readymade garments sector and in other industries. In particular it noted that the survey found that a significantly larger proportion of children were employed in the formal readymade garments sector than had been previously believed. The study also documented abusive practices in garment factories that employed children.

For those of an optimistic disposition, this report makes for dispiriting reading. Progress in dealing with risk in one area is often countered by an increase in risk in another area.

The clear message from all this is that the risk to your supply chain might not be what you think. It cannot be assumed that problems have been permanently solved – not only is vigilance vital, but also the ability to respond quickly to changing threats.

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