The Impact of Cargo Crime on the UK Manufacturing Sector

In 2023 alone, the National Vehicle Crime Intelligence Service recorded 5,373 cargo theft cases, amounting to an estimated £68 million in stolen goods¹. Common criminal tactics include hijacking, warehouse break-ins and fraud.

Rising economic pressures, such as inflation and escalating material costs, have amplified these risks. Additionally, the complexity of global supply chains has heightened manufacturers' exposure to cargo crime. The UK recorded 620 cargo theft instances in July, an increase of 58% over its previous peak month of February 2024². This growing threat emphasises the need for enhanced security measures to protect businesses from financial losses, operational disruptions and reputational damage³.

Key risk factors for the manufacturing sector

• The geographic vulnerabilities of ports, distribution hubs and transit routes, turning them into prime targets for cargo theft due to the high volume of goods passing through these areas.
• Lack of investment in security measures, such as robust physical, digital and operational protection measures increasing the risk of theft.
• The presence of insider threats and organised crime networks that can exploit employees for access to sensitive information.
• The intricate nature of supply chains and reliance on third-party logistics providers, making manufacturers more susceptible to cargo theft.

Impact on the manufacturing sector

• Financial losses, such as the cost of stolen goods, increased insurance premiums and recovery expenses, can be substantial.
• Operational disruptions due to theft-related delays can severely impact production schedules and hinder business operations.
• Customer dissatisfaction and potential loss of trust due to delays in deliveries and compromised product quality.

Risk management strategies for manufacturers

Effective risk management is crucial for manufacturers to protect their operations, assets and supply chains from cyber-attacks, which can disrupt operations and lead to significant financial losses. Implementing robust risk management strategies and preventative measures are essential to safeguard assets, ensure operational continuity and maintain a competitive edge. Below are some key strategies and measures that manufacturers can adopt:

Preventative measures

• Upgrading physical security: Manufacturers can reduce theft risks by investing in GPS tracking, tamper-proof locks and secure vehicle parking. Surveillance systems at warehouses and distribution hubs also help deter criminal activity⁴.
• Conducting supply chain audits: Regular audits help identify vulnerabilities in the supply chain, enabling businesses to implement targeted improvements and mitigate risks before they occur.
• Emphasising employee training: Raising awareness through training programmes can guide workers in recognising and reporting suspicious activity. This proactive approach ensures that internal threats can be spotted early.

Technology solutions

• Leveraging AI and IoT: Artificial Intelligence (AI) and the Internet of Things (IoT) allow for real-time monitoring and predictive risk management. AI systems can analyse data from various sources to detect patterns and potential threats, providing early warnings before an incident occurs.
• Enhancing cybersecurity measures: As logistics systems become more digitised, manufacturers must prioritise cybersecurity to protect against hacking, ransomware and other cyber threats. With threat actors always scanning for points of entry, stringent cybersecurity protocols should be in place to safeguard the supply chain.

Collaboration and partnerships

• Working with logistics providers: Manufacturers should collaborate closely with logistics providers to ensure security protocols are consistently followed throughout the supply chain. Sharing risk management strategies can also help reduce vulnerabilities.
• Teaming up with industry groups and law enforcement: Engaging with industry groups and law enforcement agencies can help manufacturers stay ahead of emerging crime trends. Collaborative efforts lead to more effective prevention and response strategies.

Regulatory and policy considerations

Manufacturers also play a key role in advocating for stronger cargo security regulations. By supporting tighter regulations and better enforcement, the industry can collectively address the growing threat of cargo crime.

One such example is the Aviation Security (Air Cargo Agents) Regulations 2024, which came into force on 21 March 2024, to enhance the security of air cargo in the UK by maintaining a list of security-approved air cargo agents, such as known consignors, regulated agents and regulated suppliers⁵. This way, only vetted and compliant entities will handle air cargo, reducing the risk of tampering or theft.

Insurance and financial protection

Having comprehensive cargo insurance can go a long way in mitigating the financial impact of theft. Manufacturers should work with risk advisors to ensure their policies cover potential losses, including exclusions, coverage limits and recovery costs.

How Gallagher can help

Mitigating cargo crime is a matter of protecting assets and a vital step in maintaining operational efficiency and business continuity. In a world where cargo crime is an increasing threat, partnering with a risk management specialist like Gallagher can provide the expertise and tailored solutions needed to reduce exposure to such risks. We work with businesses to prioritise security, enhance collaboration and implement proactive strategies, helping safeguard physical and financial assets.

Contact us today to discover how Gallagher can help you safeguard your operations against cargo crime.