Freight crimes on the rise in Europe

There was an average of three major cargo crimes a day targeting high value, attractive products in the supply chain in Europe in 2014 with an average loss of €205,000 according to the Transported Asset Protection Association’s (TAPA) 2014 Incident Information Service (IIS) Annual Report.

For the year as a whole, TAPA EMEA recorded 1,102 incidents of cargo crimes in the region. For the 33% of crimes reporting a value, total losses for the year were more than €74 million. In addition to concerns over the number of crimes and the value of losses, TAPA EMEA says the use of violence by organised criminal gangs continued to grow last year with a 4.5% year-on-year increase, driven largely by 102 violent hijackings of trucks, notably in France, Italy and South Africa.

The figures show the top 10 cargo crimes in 2014 involved a combined loss of €32,471,000. Overall, there were 15 thefts from facilities and vehicles during the year with losses exceeding €1 million as criminal gangs targeted everything from scratch-cards, cosmetics, consumer electronics and clothing and footwear to tobacco products, pharmaceuticals, food and beverage, car parts and tyres and cash. TAPA’s IIS received information on 157 major incidents in 2014, classified as thefts involving a loss in excess of €100,000.

Germany and the United Kingdom stood out as reporting the largest year-on-year increases. Germany recorded the highest number of freight crimes in 2014 with a 42.5% growth over 2013’s figures to 285 cargo thefts. With 175 cargo crimes, the UK saw the highest percentage growth among the top countries suffering incidents, climbing 98.8% on the previous year to 175 crimes. The Netherlands, the main location for reported cargo crimes in 2013, saw a 9.7% drop over 2013 but still recorded 258 incidents overall. 

Thefts from vehicles continued to account for the biggest proportion of freight thefts with over 500 crimes representing more than 45% of all incidents recorded in 2014. Over the course of the year, there were also 193 Theft from Facility crimes and 185 Theft of Vehicle incidents. Food and beverage products were the most targeted cargo across the region as a whole, closely followed by consumer electronics. TAPA’s analysis shows that 92.8% of the 1,102 cargo crimes in 2014 in the EMEA region took place in just 10 countries, Germany, the Netherlands, United Kingdom, France, Italy, Russia, Spain Austria, Sweden and South Africa.

Ship design for 22,400 TEU vessels

Through the relatively simple expedients of a) raising the wheelhouse b) increasing the beam by as little as 2.5 metres and c) lengthening a ship to fit an extra 40’ bay, existing designs of the largest containerships could actually accommodate up to 22,400 TEU, classification society DNV-GL Maritime confirmed to Lloyds List. The present new record holder, the 19,200 TEU MSC Oscar, is said to have added around 1,200 TEU by the first method, which itself is not new having been utilised by Maersk Line (S-Class and SamMax) and Hamburg Sud (Santa Class), amongst others, in the recent past. 

To go beyond this capacity to the 24,000 TEU size DNC-GL believes is feasible would require a new structural design. In addition to Evergreen, MOL and OOCL, South Korean carrier Hanjin is also interested in 18,000 TEU to 20,000 TEU monsters. Although there is nothing concrete yet, operating vessels of this size would be logical considering CKHYE Alliance partner Evergreen is already close to ordering. Hanjin’s current largest ships are 13,100 TEU (nine units). 

Despite its financial worries, finding new funds for big new ships is apparently no problem. It is understood that MSC will pay between USD 46,000 and USD 46,500 per day for the 15 year bare-boat charter of the 19,200 TEU MSC Oscar and its sister vessels.

 

New ship building, a cause for concern

As assumed already and reported, the eleven ULCS with a stated capacity of 18,000 TEU as recently ordered by Evergreen from Imabari through Shoei Kisen Kaisha for 2018/19 delivery in reality will have nominal space for 20,400 TEU. The current fleet of ULCS (Ships larger than 10,000 TEU) operating and confirmed on order stands at 454 units with a total capacity for 6.3 million TEU/13,900 TEU average. 

What induces carriers to build ever-larger ships at a time of seemingly persistent excess-capacity? As reported by Dynaliner’s, greed definitely is a consideration, but assuming that the (port-to-port) economy of scale of these vessels is a proven fact, then it somewhere makes sense. 

Every new ship is too large for the trade when she is ordered as they are built to stay around for some 25 years. New-buildings were never as cheap as they are today and there we go. Carriers should be wise enough to cap the capacity of new-buildings, but they are/do not. 

 

Big ship gamble backfires

Container lines are losing the very expensive bet they made by ordering ultra large container vessels for use on the Asia-Europe trade lane, as spot market rates remain stubbornly low and demand fails to materialise. Previous years had seen a rapid erosion of prices after an early spike after the application of GRIs. With further GRIs announced for June, Drewry expects rates to fall back before then. That could see rates once again heading back below last year’s averages. 

While rates have been volatile, they have provided a good forward indicator of demand, Drewry said. In the case of the Asia-Europe trade, the WCI benchmark foretold the weakening volumes that have recently been published. Drewry’s research showed while there were still some growth areas, demand was falling in three of the four major deep sea lanes, with only Asia-US East Coast showing a marked increase in the 1st quarter as lines re-routed cargo from congested US West Coast ports. This slowdown in demand was being exacerbated by the large number of box ships being deployed to the Asia-Europe trade. 

Ordering ships that take years to build is always something of a gamble, Drewry said. As things stand, the roulette wheel has landed on red when all the carriers had put their ships on black. According to data from Lloyd’s List Intelligence, another 740,000 TEU of capacity on vessels of 10,000 TEU or greater is due to be delivered by year-end. The combined capacity of these larger vessels is set to double in these classes when all the ships recorded as being on order are delivered. 

The majority of these vessels, particularly those over 14,000 TEU, will be used on the Asia-Europe trade lane, posing a huge risk to carriers in a slowing market, Drewry said. This was also likely to start causing problems on other trades, as the extra vessels joining the fleet in the 10,000 and 14,000 TEU size range will make it harder to cascade smaller ships deployed on Asia-Europe services on to other lanes. At present, that gamble has backfired and carriers are faced with overcapacity in Asia-Europe, making it very difficult to see how rates will become sustainable profitable.

 

Container shipping at risk of cyber-jacking

Most container lines are vulnerable to cyberattacks, as are their customers, new research shows. Cyber Keel, which provides advice on how to protect against a cyberattack, estimates that 18 of the world’s top 20 carriers could be at risk of cling-jacking. Furthermore, all 11 of the maritime news sites screened by Cyber Keel are also insufficiently protected. 

In a click-jacking, the attacker tricks the shipper onto a fake website, wherein they simply host a perfect copy of the carrier’s genuine website, according to Cyber Keel. When the shipper then proceeds to enter sensitive information, such as username and password, the attacker can steal this information and subsequently act in the name of the shipper. However, Cyber Keel found that all 18 carriers currently vulnerable could reduce the risk to both themselves and their customers by using slight technical changes in their website setup. The recommendation comes amid growing evidence that cyber criminals are active in the shipping sector. 

This was recently documented by Cyber Keels’s intelligence partners in Clearsky Cyber Security, which have just uncovered a large-scale campaign to impersonate websites mainly in the fields of banking and shipping. A shipping company from New Zealand had experienced cyber criminals who had posted a fake website containing a copy of its own genuine website. Container carriers typically spend significant resources verifying the identity of a shipper before they are allowed to use the full suite of e-Commerce tools, says Cyber Keel Chief Executive Lars Jensen. 

[The writer, a Maritime Economist, is a Chartered Fellow (Logistics Transport), Chartered Shipbroker (UK), Chartered Marketer (UK) and a University of Oxford Business Alumni. He is also a Fellow of NORAD/JICA and Harvard Business School (EEP).]