Experts have warned the beleaguered worldwide supply chain is being further threatened - by drug cartels and pirates.
The British Standards Institution has highlighted increased criminal activity in their annual Supply Chain Risk Insights Report, which is expected to impact on a system already plagued by Covid-related production hold-ups and driver shortages.
BSI has observed a significant number of criminal organisations masquerading as legitimate warehousing, transport or distribution companies over the past year.
In September 2021, a Costa Rican crime gang was caught attempting to smuggle cocaine from a port in the South American country into Donegal, Ireland, disguised in a container of banana pulp.
Other high-profile criminal cases include police in Ukraine detaining two criminals who posed as licensed cargo carriers and illegally took possession of goods worth over £137,000.
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Harold Pradal, Chief Commercial Officer at BSI, said: “Supply chain threats will remain one of the most serious issues global businesses will face in 2022.
“Widespread product shortages and scarcely qualified operators, including lorry-drivers, are only the tip of the iceberg when it comes to the ongoing global supply chain crisis.
“With manufacturers and freight companies already spending much effort to address these issues, organizations along the supply chain increasingly fall vulnerable to a convergence of additional threats.
“Those include more frequent and damaging natural disasters, and more opportunistic criminal cartels.
“Unless these threats are addressed holistically and quickly by supply chain leaders, consumers are likely to see current challenges continue and worsen over time.”
The report also explains how drug cartels around the world are becoming more creative.
BSI saw the numbers and quantities of cocaine seizures in Europe increase steadily in 2020 and 2021, and they are expected to continue to rise in 2022.
Another COVID-related pain point is highly inflated shipping costs from East to West, in some cases as much as 400 percent, or even 650 percent higher than pre-pandemic rates.
However, these rocketing shipping costs are spread indiscriminately across shipping routes.
With the increase in shipping prices coupled with congestion and delays surrounding ground transportation, some companies have shifted to air routes to ship consumer products.
But this shift toward air freight has led to an increase in smugglers introducing illegal drugs into air cargo shipments - up from 20 percent in February to 33.3 percent in June.
Tackling the impacts of climate change is also interfering with the world’s supply chains, as at least 18 companies spanning several industries were identified as sourcing products from companies contributing to deforestation in the Amazon.
Disruptions to the global supply chain, like Hurricane Ida in August in the US and Typhoon Chanthu in September in China, have cumulatively caused various delays of shipment.
Jim Yarbrough, BSI’s Global Intelligence Program Manager, added: “As we continue to manage a multitude of challenges, including COVID, climate change and natural disasters, we have seen the convergence of impacts on organizations and the global community.
“This illustrates the broad-brush consequences of disruptions and threats to our supply chains, and the importance of not underestimating their complexities.
“To protect the integrity of this vital part of our global way of life, business leaders must stay ahead of the latest trends that threaten to disrupt it.
“We've published a supply chain risk report every year since 2013, but there has never been a more vital time for business leaders and decision-makers to take note.”
The full Supply Chain Risk Insights Report can be viewed here.
