Theft of personal protective equipment (PPE), ventilators and test kits have shot up across Latin America amid the coronavirus pandemic.
The most striking case came on April 8 when 15,000 diagnostic tests and more than two million PPE including goggles, gloves, and face masks along with hand sanitizer were stolen from a cargo terminal at São Paulo’s Guarulhos International Airport in Brazil.
In Mexico, thieves made off with a truck carrying 200 kilograms of antibacterial gel in 12 plastic tanks. On the same day, Mexican authorities also reported the theft of ventilators from facilities belonging to the Mexican Institute of Social Security Institute in the southern state of Oaxaca.
That same week, Peru’s Health Minister Víctor Zamora denounced the “systematic theft” of personal protective equipment and rapid testing supplies from hospitals across Peru to be sold on the black market. Similar cases have also been reported in Cuba, Venezuela and Chile.
These types of incidents are not isolated in Latin America. Over the past 6 weeks there have been loads of essential goods stolen in the United States. Examples of the cargo run the gamut from surgical masks, medical grade examination gloves, disinfectant and paper products especially toilet paper. Thieves are taking advantage of the rising value and thus attractiveness of these goods and the issues facing law enforcement such as the health of police officers (New York City recently reported that 20% of the workforce was out sick) and the reduction of pro-active policing including random drives through truck stops and rest areas and other known cargo theft hot spots.
The U.S. Federal Motor Carrier Safety Administration (FMCSA) recently added additional easing of restriction on trucking companies. In a notice posted on April 17 the FMCSA informed state driver licensing agencies (SDLAs) that they will not be penalized if they are not able to notify the government of driver violations, convictions and disqualifications within 10 days, as required by law. Instead, they will have three months beyond June 30 to do so. The change resulted from higher than normal employee absences or closed state offices in response to COVID-19.
For carriers, however, the lack of posting or lack of reporting of a driver’s conviction could mean that a company could unknowingly (or knowingly if they withhold that information) use a disqualified driver, if the driver doesn’t self-report the violation or conviction. Without access to more up-to-date data from the motor vehicle record during the screening process, hiring companies will have to rely even more on the honesty of the driver.
Among other restrictions recently eased by the FMCSA, in its first emergency declaration, one relates to the Hours of Service allowing driver to be behind the wheel beyond the legal requirement if they are transporting essential goods. Also, trucking companies can haul larger loads with weights up to 100,000 pounds now. Finally, individuals with Commercial Driver’s License permits can operate vehicles if a duly licensed driver is also in the cab effectively offering team drivers without diminishing their normal pool of candidates.
The latest issue of Inbound Logistics offers tips for preparing for global trade disruption. Here are just a few:
This is certainly a tad late but could serve as a template in preparing for the next supply chain disruption; hopefully not one with the same scope as COVID-19. Frankly starting to plan for these types of events should take place well before they emerge.
The TT Club estimates that the international maritime industry incurs losses of about $6 billion each year because of incorrectly packed or documented cargo including damage to the cargo and delays, environmental cleanup, injuries and ship damage. It has been working with the Global Shippers Forum, International Cargo Handling Coordination Association (ICHCA), World Shipping Council and Container Owners Association to push for thorough adoption of the Code of Practice for Packing of Cargo Transport Units (CTU Code), issued in 2014.
This work continues because in the 5+ years since the CTU Code was adopted there has not been a significant improvement in either the frequency or severity of incidents.
It also asserts that two-thirds of cargo damage-related claims are due to some sort of poor practice in terms of packing, load distribution or securing of the cargo — but also documentary functions relating to correct classification and declaration of cargo.
People within the maritime and logistics industries are aware of the best practices but still fail to adopt them throughout the supply chain. These include:
Selection of a transport conveyance suitable for the commodity and intended journey.
Ensure the transport conveyance is in good structural condition, clean and dry.
Proper packing of cargo within the transport conveyance, including load distribution, and effective blocking, bracing and securement.
Effective methods and materials for the effective stowing and security of cargo in all transport modes.
Correct classification, packaging, marking/placarding, documentation and declaration of packed cargo, particularly those that are regulated such as Dangerous Goods/Hazardous Materials.
Complete transmittal of all data regarding contents, enabling appropriate safe handling.
Albeit containing sound advice, we can understand while the CTU Code has not gotten much traction. We find them to be quite Euro-centric, highly technical and voluminous. Chubb Marine Risk Management have developed a series of Tip Sheets that are far more succinct focusing on individual perils- water damage, rough handling, theft etc.
You can view the complete document at: https://www.unece.org/fileadmin/DAM/trans/doc/2014/wp24/CTU_Code_January_2014.pdf
WABCO, a global supplier of technologies and services designed to improve the safety, efficiency and connectivity of commercial vehicles, is combining with Belgium-based Sioen Industries to combat the rising issue of trailer cargo theft incidents with its new “Detector” device.
Sioen has produced a smart, multi-layered tarpaulin with conductive layers that can be fitted to trailer doors and sides. WABCO will power this technology via its Fleet Management Solution (FMS), TX-TRAILERGUARD™. An alarm will be automatically triggered should the tarpaulin be tampered with. Drivers are alerted through an audible warning or an in-cab notification. An alarm is also sent to the fleet back office in real time.
Detector has been field tested by several leading fleets. This includes Soncotra, which manages over 15,000 Full Truck and Less than Truckload (“groupage) loads annually across Central and Eastern Europe, the Balkans, the CIS countries and the Middle East.
Cargo theft is an increasing issue with a report by BSI Supply Chain Services and Solutions, revealing that 86% of Europe truck theft incidents relate to cargo. Many of these incidents involve pilferage facilitated by slashing the curtains of the soft-sided trailer the mainstay of European trucking.
Not surprisingly the coronavirus pandemic delivered a heavy hit to U.S. port volumes in March with total container volumes down approximately 21% compared to the same month in 2019 and 15.4% year-to-date. The unknown is how long the container drought will continue but some industry insiders expect second-quarter volumes will be soft as the unprecedented disruption to the global supply chain continues and container shipping lines cancel (“blanked”) more sailings
Here are statistics from several individual ports:
The situation is quite fluid but we are experiencing a short but intense surge of containers as Chinese plants are up and running added to the annual backlog created by the Chinese New Year to be followed by a sharp dip in May likely lasting through at least mid-June with more blanked sailings planned.
Here are three sites that may provide some useful data:
With the dire need for Personal Protective Equipment (PPE), diagnostic test kits and other essential goods, several U.S. airlines are busy converting passenger aircraft into freighters. These reconfigurations are irreversible so that may portend the lean years ago for standard air traffic.
United, Delta and America are also chartering wide-body planes like 777,787 and A350 and scheduling flights between their hubs and Asia and Europe.
Cargo capacity of lift is constrained, and airfreight rates have skyrocketed. Additionally, the steps American Airlines are taking seem to fall in line
It announced it will be implementing a “fair-booking policy” to address late changes or cancellations and to optimize space at a time when demand is critical, including late-cancellation fees that are currently seldom imposed.
The policy set to effective on May 1 represents American’s plan to mitigate unused space, especially when demand is critical. It is worth watching to see if other carriers follow suit.
The information for much of the content was taken from a number of public sources that, to the best of the undersigned’s knowledge, is accurate. The views expressed in this document should be regarded as the personal opinion of the undersigned and not necessarily of the Chubb.
If anyone wants additional information on any of the topics covered contact the authors.