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© Yuri Arcurs

The ability to access and replace the seal on containers is triggering increased amounts of cargo crime – while failure to prevent it could see companies facing high costs. 

Yesterday saw eight logistics staff charged with smuggling illegal and counterfeit items through the ports of Los Angeles and Long Beach. 

The defendants, from a mix of trucking and forwarding companies, are accused of being part of a $200m operation, smuggling goods from China into the US. When the contraband containers were selected by Customs & Border Protection for inspection, the defendants hired truck drivers – at inflated rates – to transport the containers to their own warehouses instead.

Once there, the defendants broke the security seals, removed the illicit goods, restuffed the containers with “filler” cargo, and resealed them with counterfeit security seals. They were then taken to CBP locations for the ‘new’ cargo to be checked. 

US authorities have found $1.3bn-worth of contraband from this and similar schemes, raising questions over sealed containers and access to them – in what could be expensive for legitimate companies. Indeed, in a court case filed earlier this month, CMA CGM accused rail company BNSF of failing to protect containers from crime. 

The French shipping line was carrying 4,955 cartons of streaming sticks on behalf of Amazon which, claimed CMA, arrived safely, with a container seal intact, from Yantian to the port of LA. CMA contracted BNSF to move the container by rail to Chicago. 

According to CMA, the container “sat idle” at Esperanza, California, for four days, after which it reached Chicago, and was then delivered to an Apex warehouse by truck. Apex staff discovered that large numbers of the sticks were missing. 

Amazon filed a $1.18m claim against CMA, a bill the line would like to pass onto BNSF. 

CMA noted in the filing: “During the period that BNSF exercised care, custody, and control over the container, BNSF failed to safely and securely protect the container and the Goods from access by third parties, including thieves …  the container was accessed and breached by one or more unidentified third parties … one or more third parties removed the original security seal from the container, pilfered all or a portion of the goods inside the container, and affixed a replacement seal to the container.  

“BNSF failed to properly follow its own internal procedures, and industry standards, to ensure seal integrity throughout the period it exercised care, custody, and control over the container.” 

CMA maintains that in an environment currently rife with theft, BNSF should have taken greater care. 

“During the 1-3 year period preceding the subject shipment and theft, BNSF had constructive and actual notice of a dramatic increase in the rate of attempted and successful thefts of cargo from containers occurring on BNSF property, including its warehouses, railheads, tracks, and depots (including its warehouses, railheads, tracks and depots located in Los Angeles and Chicago), and yet failed to undertake reasonable efforts to prevent, deter, or mitigate future thefts.” 

Insurer TT Club this month noted on The Loadstar that the “threat landscape for businesses has evolved significantly”.   

It warned: “Organised crime networks have increasingly infiltrated the supply chain, posing significant challenges for both businesses and law enforcement. Criminal organisations exploit weaknesses in supply chain processes, which they often learn by enlisting the aid of employees within supply chain businesses. These illicit operations not only disrupt legitimate trade, but also lead to substantial financial losses and reputational damage for affected companies.” 

It said insiders were often responsible, and unveiled strategies to help companies mitigate the threat. 

“Criminal organisations may strategically infiltrate supply chain operations, particularly those involved in the storage and transportation of high-value goods,” it said. 

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