The shipping industry can expect a spike in cargo theft thanks to disruptions in the supply chain caused by Covid-19 challenges – and this will be a particular problem at South Africa’s largest ports like Durban and Cape Town.“We have seen instances where high-value goods such as cigarettes and spirits have been pilfered while being conveyed from the port to their end destination, says Pauline Kumlehn, a partner at Shepstone & Wylie’s shipping and logistics department. “In some cases, the consignment was hijacked, in others the driver for a contractor was found to be complicit in the incident. Cases have also occurred where goods were stolen while en route in containers being transported by rail.”
According to Kumlehn cargo theft challenges differ from a legal perspective as various players in the supply chain are affected and the law which applies may vary from jurisdiction to jurisdiction.“Depending on the party represented, one may be seeking to recover from the entity in control of the goods. Matters can be further complicated, for instance, where a shipping line is facing a claim from its contractual counterparty abroad, while at the same time looking to recoup this exposure from a local contractor.”
Considering that criminals are opportunists who thrive in disruptive environments, Kumlehn says there is never going to be a ‘one size fits all’ approach. “That said, parties in the supply chain should ensure not only that they are clear of all their obligations under a particular contract, but that they adopt prudent risk management practices for their particular needs. This includes procuring the best possible insurance cover that can suitably respond to the quantum of any loss. Transporters can also seek to promote good practices, including screening of staff, as well as monitoring equipment such as cameras and tracking devices on vehicles and containers,” she says.
More often than not, by the time lawyers get involved cargo loss has usually already occurred. “It is therefore not necessarily an issue of legal protection, but rather risk mitigation. Role players in the chain should be aware of their particular risks and exposures to cargo theft and try to take measures to mitigate these risks as far as possible. Where high-value goods such as alcohol or cigarettes are involved, parties would be well advised to ensure that they have suitable insurance cover where possible, as the losses incurred are generally substantial.”Kumlehn says when it comes to cargo and theft, prevention is better than cure. “Even at a time when businesses are streamlining costs, risk reviews are critical to ensure they are best able to minimise exposure to losses.”