Expect a spike in cargo theft as Covid-19 disrupts supply chains

The shipping industry can expect a spike in cargo theft thanks to disruptions in the supply chain caused by Covid-19 challenges – and this will be a particular problem at South Africa’s largest ports like Durban and Cape Town.

Pauline Kumlehn, a partner at Shepstone & Wylie’s shipping and logistics department says, “We have seen instances where high-value goods such as cigarettes and spirits have been pilfered while being conveyed from the port to their end destination. In some cases, the consignment was hijacked, in others, the driver or a contractor was found to be complicit in the incident.  Cases have also occurred where goods were stolen while en route in containers being transported by rail.”

According to Kumlehn, cargo theft challenges differ from a legal perspective as various players in the supply chain are affected and the law which applies may vary from jurisdiction to jurisdiction.

Considering that criminals are opportunists who thrive in disruptive environments, Kumlehn says there is never going to be a ‘one size fits all’ approach. “That said, parties in the supply chain should ensure not only that they are clear of all their obligations under a particular contract, but that they adopt prudent risk management practices for their particular needs.

This includes procuring the best possible insurance cover that can suitably respond to the quantum of any loss. Transporters can also seek to promote good practices, including screening of staff, as well as monitoring equipment such as cameras and tracking devices on vehicles and containers,” she says. Often, by the time lawyers get involved cargo loss has usually already occurred.

Kumlehn says when it comes to cargo and theft, prevention is better than cure. “Even at a time when businesses are streamlining costs, risk reviews are critical to ensure they are best able to minimise exposure to losses.”