Attacks on global supply chains by terrorist groups have hit the highest rate ever as have associated costs, according to a report released by BSI. The type of attack can vary from targeting the oil infrastructure, hijacking and cargo theft through to contraband smuggling, extortion and kidnapping schemes. This causes considerable direct and indirect economic costs, disrupts the international movement of freight and creates reputational risks to organizations.
Analysis conducted by BSI's SCREEN Intelligence program found that, over the past 10 years, an average of 3.1 attacks have occurred each week. In 2016 a total of 346 attacks took place. With terrorist attacks on the rise, and the causes of disruption also rising, BSI warns that the costs to international trade and commerce will continue to increase.
In the last decade terrorists have attacked the supply chain in 58 countries, indicating the global nature of the problem. However, there are particular routes and countries that have been hit harder by these kinds of attacks. Supply chain terror attacks occur at alarming rates in various countries, including Colombia, India, and Turkey.
Costs to the supply chain as a result of attacks are both direct and indirect. Physical attacks against the supply chain, such as arsons, bombings, or armed assaults create direct disruption and often result in the destruction or loss of transported cargo.
Additionally, attempts to tamper with international cargo shipments can compromise the integrity of the load or result in the seizure or destruction of goods by customs authorities.
When companies have to unexpectedly divert or reroute shipments the costs can reach massive figures. For example, the terrorism related to the Syrian conflict forced Lebanese officials to reroute $1 billion worth of exports and resulted in the loss of $754 million in revenue for the Jordanian trucking industry.
BSI's analysis indicates that terrorism also imposes significant indirect costs on international trade and supply chains. Increased security measures, while intended to mitigate the risk of additional attacks, have disrupted the typical flow of cargo, especially for cross-border shipments. These additional procedures have often slowed the movement of freight and increased shipping costs, and companies have frequently responded by rerouting cargo or modifying shipping arrangements, further driving up costs.
The report also found that in 2016 terrorists targeted a wider range of industries and modes of transport than in any other year. In particular, terrorists increasingly targeted industries generally associated with private or corporate supply chains rather than state-owned supply chain infrastructure. Over three years of data, terrorist attacks against the agriculture and food and beverage sectors more than tripled, attacks on the industrial and manufacturing materials and pharmaceuticals sectors more than doubled, and attacks against the metals industry nearly doubled.
Worryingly, despite the upward trend of attacks, BSI's report found that there is still inadequate spending on supply chain security.
www.bsi-supplychain.com
