HIJACKING HAVENS The Challenges of Transporting Goods in Mexico and Brazil
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1 David A. Jones, CPP, CFI VP Global Security Lead Supply Chain HIJACKING HAVENS The Challenges of Transporting Goods in Mexico and Brazil September 9, 2015
2 Agenda Hijacking Risk Levels National Statistics Brazil National Statistics Mexico Common Hijacking M.O.s Best Practice Countermeasures ISCPO Cargo Security Summit September 8,2015 DHL Page 2
3 Brazil and Mexico Have The Highest Incidents of Cargo Theft in The World Security spending by major carriers in Latin America represents an astonishing 20% of their total operating costs! Mexico 2015: 136 hijackings per day or 16,400 YTD. Increased 93% vs Risk Level Low Elevated Moderated High Severe Nearly 60% of reported incidents occur in Sao Paulo State Sources Coordinating Office of Insured Risks (OCRA) & Frieghtwatch Intl ISCPO Cargo Security Summit September 8,2015 DHL Page 3
4 Brazil Risk by State Brazil had 17,500 reported hijackings in 2014, including armed attacks on cargo terminals at Guarulhos and Viracopos International airports. Risk Level Low Elevated Moderated High Severe 2015 Hi-Jackings Country.. 10% Sao Paulo State..18% Rio State...50% Sao Paulo State and Rio De Janeiro at highest risk represents 84% of all Brazilian hi-jacking s Source: FreightWatch International Global Threat Assessment 2013 ISCPO Cargo Security Summit September 8,2015 DHL Page 4
5 Mexico Risk by State 2015 YTD Mexico State & Puebla represent highest risk areas. Hundreds of gangs are known to specialize in cargo crime. Chihuahua Risk Level Low Elevated Moderated High Severe Guanajuato Hidalgo Distrito Federal Jalisco Veracruz Estado de México Puebla ISCPO Cargo Security Summit September 8,2015 DHL Page 5
6 Agenda Hijacking Risk Levels National Statistics Brazil National Statistics Mexico Common Hijacking M.O.s Best Practice Countermeasures ISCPO Cargo Security Summit September 8,2015 DHL Page 6
7 Brazil Robbery Risk Scenario Most Stolen Commodities 2 nd 1 st 3 rd Vehicle 99% Warehouse 1% 49% 38% Urban 51% 62% Highway Evento Prejuízo $ Loss Incidents ISCPO Cargo Security Summit September 8,2015 DHL Page 7
8 Brazil Robbery Risk Scenario Road Day Time/ Week 18:00h 00:00h 35% 30% 19% 16% 06:00h Driver type 8% 15% 40% Agregado Aggregate 37% Frota Fleet Independent Autônomo Fleet 52% 48% MODUS OPERANDI Movement 51,5% 52% 48,5% 48% Stopped 12:00h Evento Prejuízo # Events $ Value 18:00h 00:00h 16% 18% 20% 46% 06:00h 4% 5% 32% 64% Agregado Aggregate Frota Fleet Independent Autônomo Fleet 44% 51% Movement 31,7% 32% 68% 68,3% Stopped Urban 12:00h # Evento Events $ Prejuízo Value ISCPO Cargo Security Summit September 8,2015 DHL Page 8
9 Agenda Hijacking Risk Levels National Statistics Brazil National Statistics Mexico Common Hijacking M.O.s Best Practice Countermeasures ISCPO Cargo Security Summit September 8,2015 DHL Page 9
10 Mexico Hijacking Risk Type of Incident 2014 Q Q2 vs 2015 Q % nd 1 st 3 rd 445% 76% 55% 36% 100% 20% Vehicle 99% Warehouse 1% Hijacking Theft from Trailer Theft of Trailer Warehouse Burglary Rail Theft Theft of Container Fake Police 2014 DHL Incident - Loads Ratio Most Stolen Commodities Total Loads 229,151 31% 26% Total Loads Stolen 85 % Theft Ratio 0.03% % Recovered 37.65% % Real Theft Ratio 0.02% 12% 7% Source: FreightWatch & DHL 5% 3% 4% 3% ISCPO Cargo Security Summit September 8,2015 2% 2% DHL Page 10 1% 2% 2%
11 Mexico Hijacking Risk Most Stolen Commodities 31% 26% 12% 7% 3% 5% 4% 3% 2% 2% 1% 2% 2% Building & Industrial Food & Drinks Miscellaneous Alcohol Auto & Parts Clothing & Shoes Electronics Pharmaceuticals Cash-In-Transit Tobaco Personal Care Fuel Chemicals Source: FreightWatch & DHL ISCPO Cargo Security Summit September 8,2015 DHL Page 11
12 Mexico Hijacking Risk 2015 YTD Event Loss/Week Loss Event Event Loss/Hour 10% 10% 17% 21% 29% 8% 6% 10% 12% 6% 4% 19% 01:00 HRS. 02:00 HRS. 03:00 HRS. 04:00 HRS. 05:00 HRS. M T W T F S S 18% 06:00 HRS. Event Type Event - Modus Operandi 3% 67% Hijacking Truck Theft 97% 4% 14% 15% ROAD BLOCKED TRAFFIC LIGHTS GAS STATION OTHERS Source: FreightWatch ISCPO Cargo Security Summit September 8,2015 DHL Page 12
13 Mexican Transport Structure 90% of transportation in Mexico is comprised of small, family businesses called Truck Men. On average, trucks are between 10 and 20 years old 10% 90% Truck Men Transport Fleet Operations ISCPO Cargo Security Summit September 8,2015 DHL Page 13
14 Mexico Transportation Breakout The highest percentage of product is transported by land. And most of what is carried by sea remains focused on export. Railway Air 1% 11% 34% 54% Sea Air Land Sea Railway Land ISCPO Cargo Security Summit September 8,2015 DHL Page 14
15 Mexico Thefts by Commodity Thefts by product type 27% 20% 14% 9% 7% 7% 3% 3% 2% 2% 2% 2% 1% 1% Miscellaneous Chemicals Auto/ Parts Unknown Electronics Alcohol Consumer Care Clothing/ Shoes Tabacco Home/ Garden Pharmaceuticals Cash-intransit (CIT) Food/ Drinks Building/ Industrial Source: FreightWatch ISCPO Cargo Security Summit September 8,2015 DHL Page 15
16 Mexico Where Did Thefts Occur Hijacking by location 2015 YTD 69% 11% 16% 2% 4% In-Transit Facility Interior Roadside Gas Station Facility Lot Source: FreightWatch ISCPO Cargo Security Summit September 8,2015 DHL Page 16
17 Agenda Hijacking Risk Levels National Statistics Brazil National Statistics Mexico Common Hijacking M.O.s Best Practice Countermeasures ISCPO Cargo Security Summit September 8,2015 DHL Page 17
18 Hijacking on the Road Typical Process for Cargo Robbery Original truck New truck Highway attack Move cargo to safe place Safe place Wait few days to see if police and recovery teams show up on scene Deliver cargo to end receiver Warehouse ISCPO Cargo Security Summit September 8,2015 DHL Page 18
19 Hijacking on the Road Attack Strategy Hijacker Car Transfer Truck Escort Car ISCPO Cargo Security Summit September 8,2015 DHL Page 19
20 Hijacking on the Road Attack Strategy ISCPO Cargo Security Summit September 8,2015 DHL Page 20
21 Hijacking in the Street Typical Process for Cargo Robbery Delivering cargo Armed Bandit Street attack Takes van or a few packages Flees scene Small Bodega Bad guy delivers to small shop or trades for narcotics ISCPO Cargo Security Summit September 8,2015 DHL Page 21
22 Hijacking in the Street Attack Strategy Driver and helper are surrounded while moving or parking on the street ISCPO Cargo Security Summit September 8,2015 DHL Page 22
23 Hijacking in the Street Attack Strategy Driver or helper are surrounded during a delivery on the street ISCPO Cargo Security Summit September 8,2015 DHL Page 23
24 Real World Examples ISCPO Cargo Security Summit September 8,2015 DHL Page 24
25 Real World Examples ISCPO Cargo Security Summit September 8,2015 DHL Page 25
26 Real World Examples ISCPO Cargo Security Summit September 8,2015 DHL Page 26
27 Real World Examples ISCPO Cargo Security Summit September 8,2015 DHL Page 27
28 Equipment Found with Cargo Thieves ISCPO Cargo Security Summit September 8,2015 DHL Page 28
29 High Power Jammers ISCPO Cargo Security Summit September 8,2015 DHL Page 29
30 Agenda Hijacking Risk Levels National Statistics Brazil National Statistics Mexico Common Hijacking M.O.s Best Practice Countermeasures ISCPO Cargo Security Summit September 8,2015 DHL Page 30
31 Inbound Quality Control Insure use of proper inbound quality control audits, as some losses may not be your responsibility. ISCPO Cargo Security Summit September 8,2015 DHL Page 31
32 Central Monitoring Tracking Cells /7 Drivers not allowed to use shortcuts or low density side roads Drivers must travel on main highways or toll roads, whenever possible. If he must leave route, he must first notify tracking cell If hauling international shipments, the driver cannot make stops before 300 kms and 100 kms for local shipments The operator must follow the route that tracking cell sets ISCPO Cargo Security Summit September 8,2015 DHL Page 32
33 Geofencing with Central Monitoring ISCPO Cargo Security Summit September 8,2015 DHL Page 33
34 Geofencing with Central Monitoring ISCPO Cargo Security Summit September 8,2015 DHL Page 34
35 Automated Tracking Device System A B N The tracking operator is the weak link in the chain because defensive actions depend on his alertness. If the operator fails to follow the standard protocol, protection procedures fail. An automatic program takes action as soon as any alert is received, regardless of operator actions. ISCPO Cargo Security Summit September 8,2015 DHL Page 35
36 Tracking Devices Tracking Cell When a vehicle must be tracked, the tracking cell should be a reputable and vetted company. Professional tracking operators can make a huge difference, and performance should be monitored regularly. Minimum Tracking Cell Infrastructure Internet connection in large band Dedicated computer UPS (Unit Power Supplier) Software compatible with tracking technology Insure that all Tracking Device Accessories are clearly defined in the Formal Security Agreement (FSA) with carrier. ISCPO Cargo Security Summit September 8,2015 DHL Page 36
37 Tracking Equipment Used by DHL ISCPO Cargo Security Summit September 8,2015 DHL Page 37
38 Geo Route and Geofence Creation Origin and final destination with client is recorded before route initiation, and is being tracking by Protekto and continuous communication with driver and security. ISCPO Cargo Security Summit September 8,2015 DHL Page 38
39 Padlocks Placing ISCPO Cargo Security Summit September 8,2015 DHL Page 39
40 Tracking and Monitoring. Along the route, we can detect the exact location of gas stations and schedules / timings of allowed stops or when truck was parked in public places ISCPO Cargo Security Summit September 8,2015 DHL Page 40
41 Tracking and Monitoring. Detailed reports of the truck progress are received, also if arrival to destination with client and confirmation from geofence. ISCPO Cargo Security Summit September 8,2015 DHL Page 41
42 Escort Practices GPS 2 1 x 2 x 1 X 1, X 2 : Escort positioning must guarantee the widest cone of observance ISCPO Cargo Security Summit September 8,2015 DHL Page 42
43 Success Story While delivering cargo for a high-end fashion retailer, a truck was approached by two armed bandits at a red traffic light. He immediately pressed the panic button to reach the central monitoring center. Monitoring center personnel activated the reaction protocol disengaging the engine of the truck and requesting police support. The would-be thieves left the truck and fled leaving the cargo, with a value of USD 81K intact, but taking the keys! The quick reaction of the operator and central monitoring station personnel, prevented the hi-jack attempt and the merchandise was delivered safely, albeit un-conventionally, to the customer. ISCPO Cargo Security Summit September 8,2015 DHL Page 43
44 Success Story Truck loaded onto tow flatbed Truck arriving at Destination Off-load of the product Final Delivery ISCPO Cargo Security Summit September 8,2015 DHL Page 44
45 Due Diligence Limiting Liability and Establishing Protocols in the Formal Security Agreement (FSA) Maximum Value Define security protocols and include them in the contract The FSA should define the maximum value the client will allow in one shipment Shipments over the value agreed should only be shipped after formal communication from client or insurance owner Escort Protection FSA should also specify the minimum escort value that triggers escort use The radius where escorts are to be used (distance from origin) Door to door escorts are not usual due to the cost. The efficiency is questionable FSA and Operational Protocol Escort Protocol ISCPO Cargo Security Summit September 8,2015 DHL Page 45
46 Due Diligence Security Agreement with Carrier Carrier Contract Agreement Clear definition of insurance responsibility during cargo transportation (hijacking, truck theft and accident). Formal and part of commercial contract Any new carrier should be contracted only after a formal security agreement is signed Subrogation Formal Security Agreement (FSA) with carriers Formal Security Agreement ISCPO Cargo Security Summit September 8,2015 DHL Page 46
47 Due Diligence Driver Background Checks Driver and Helper There are many companies that can conduct these kind of checks, but country privacy laws often limit how deep the search can go. Base criteria Criminal Financial Driving record ISCPO Cargo Security Summit September 8,2015 DHL Page 47
48 Due Diligence Security Carrier Hub Audit ISCPO Cargo Security Summit September 8,2015 DHL Page 48
49 When You Fail to Audit Carrier Location ISCPO Cargo Security Summit September 8,2015 DHL Page 49
50 Due Diligence Training Associates & Transportation Partners We work with over 1,000 transportation companies and thousands of drivers in Latin America. Ensuring that these teams understand and follow our transportation procedures and protocols, is essential to the success of our security program. Trust, but verify! Ronald Reagan ISCPO Cargo Security Summit September 8,2015 DHL Page 50
51 Truck Protection Capabilities Trailer back door sensor Trailer back door lock Extra devices Armored capsule 3 tracking device with prompt answer Extra devices truck stairs protection windows sensor web sunglass 2 tracking device in the cabin Disengage sensor On-board computer GPS Satelital or GPRS communication Cell or radio communication Panic button Sound and light alerts Left- and right-door sensors Damage sensor Motor sensor Speed sensor Fuel block ISCPO Cargo Security Summit September 8,2015 DHL Page 51
52 Best Practices Harden the Target Additional and optional equipment added in the truck or trailer to improve security Cargo portable tracker Cabin windows mesh Truck stair protection Disposable portable trackers Uses GPRS and RF and is placed inside the product box Expensive but efficient ISCPO Cargo Security Summit September 8,2015 DHL Page 52
53 Best Practices Harden the Target Armored Trailer & Vans Protects the trailer using steel mesh and steel plates (2 mm); coffer door with electronic lock with random access. Cheaper than an armored cabin Short payback if it is possible to change the escort protection Efficient in short distance in use second tracking device. ISCPO Cargo Security Summit September 8,2015 DHL Page 53
54 Portable Tracking Devices Hidden Inside Product ISCPO Cargo Security Summit September 8,2015 DHL Page 54
55 Ongoing Challenges We Face Poor reporting standards by victim companies Government involvement to aggressively address issue Improving infrastructures - roads, highways, bridges Police corruption on local level Criminal infiltration of shipping companies and tracking centers Finding solutions to defeat Jamming technology Brazil Upcoming Olympics (2016) Lack of law enforcement personnel with cargo crime specialization training ISCPO Cargo Security Summit September 8,2015 DHL Page 55
56 Thank You! Questions?? ISCPO Cargo Security Summit September 8,2015 DHL Page 56
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