Opinion: The Dark Side of the Supply Chain
b>By Erik Hoffer
i>President
GM Security
The same routes, modes, carriers and methods employed by legitimate businesses, transportation companies and supply chain participants are the conduit to market for these products — which can include contraband drugs, illegal weapons and laundered currency — as clever criminals move them through normal distribution channels in a seamless system that has been employed for years.
For example, a truck might be followed from its distribution center and stolen at a truck stop. The goods are rushed to a public warehouse and quickly off-loaded. A fictitious company account has been set up in advance for the arrival and short-term storage of the goods. That location is now used as the transshipping point.
In this so-called cross-dock operation, goods are never repackaged, but instead are quickly reshipped as a full truckload to a port of debarkation or another break-bulk facility. In the latter case, goods will be further broken down, and possibly blended with legitimate goods, to thwart tracing prior to reshipment. In the first instance, goods may be trucked to Miami and loaded on containers destined for South America, Russia, India or other foreign ports for further distribution.
The stolen goods have now assumed another identity and appear to belong to someone else. They are the newest link in the underground supply chain.
Meanwhile, counterfeit goods posing as legitimate products are moving from foreign ports to U.S. markets, where they will be blended with prime product and resume their travels.
At their destination, stolen or counterfeit goods are distributed by otherwise authorized resellers to retailers or manufacturers just as if they were legitimate. Those goods are then moved to their client’s locations by honest carriers, who are paid for their efforts, all the while becoming links in the underground supply chain.
Products traveling in this manner appear authentic to carriers who otherwise would not touch them. In some cases, stolen goods may have to be repackaged or unpackaged, but without an inspection template, identifying anomalies is impossible.
In the case of meats and fish, they are repacked for a quick sale and rarely spend two days in transit after the heist. These time- or temperature-sensitive goods give a new meaning to “custom critical” deliveries. Few cases are made by law enforcement after the evidence is eaten. If you cannot catch thieves in the act, or dissuade them from taking the loads in the first place, the stolen goods are long gone.
Time sensitivity is particularly important in the case of stolen pharmaceuticals. Many are perfectly ethical drugs that in the process of moving from the above-board supply chain to the underground version may have been removed from proper storage conditions for a time. These drugs are potentially useless or even dangerous, yet the packaging remains untouched and the goods move normally.
Because of the need for speed in illicit logistics, impulse planning is almost never a consideration. Thieves plan and execute these moves as well as any logistics provider ever could. Many truckers inadvertently provide this service without ever knowing their freight is suspect.
Many hands touch cargo, but most eyes look the other way. Transportation providers, eager to satisfy a client or attract new ones, will take on freight moves without ever recognizing or analyzing the facts surrounding the cargo.
Imagine, for example, that you are a New Jersey trucker. You have been asked to pick up a load of a well-known prescription drug from a public warehouse in Baltimore and move it to Miami for export. Does this ring of a possible problem, arousing your suspicions? Do you call the police, who will probably not give you the time of day? Since there has been no apparent crime, no one will listen to you anyway. So you accept the load, get paid for your services and, as the saying goes, keep on truckin’.
Even the FBI has a diminished interest in interdicting such cargo as its resources are focused on countering terrorism. True, stolen goods can and do fund terrorism, but that nexus seems invisible to our government and lawmakers.
In other cases, goods are imported and cleared at the port or border crossing and diverted back to the United States, right under the nose of our customs officials. Low-risk freight from a low-risk shipper in a busy port puts time on the side of the criminal. The risk lessens, based on his choice of ports. The more active the port, the less likely an inspection will occur. And a thief’s overall risk is diminished because even if he is caught, or one load is detained, the legal remedies are light — perhaps nothing more than a small fine and a slap on the wrist.
No one in our industry is immune, yet no one can be vigilant all the time. Freight will move through our normal logistics system and will be delivered daily to markets. The courts, the police and the government have neither facilitated a remedy nor dissuaded the criminal element from using the commercial supply chain for their illicit ends. The underground supply chain will continue to increase costs for shippers, remove profits from victims and put many innocent drivers at risk until controls are developed to reduce these incidents.
CGM Security, a cargo security devices supplier, is based in Somerset, N.J.
This opinion piece appears in the Feb. 20 print edition of Transport Topics. Subscribe today.
