9 November 2015
European migration crisis costs at least $1 billion in shipping disruption
BSI Supply Chain Security Risk Index reveals European trade slowed by most serious border delays in 20 years
Essential shipments of goods and medical supplies are being delayed and destroyed as a result of the European migration crisis, costing a collective $1Bn to the UK economy in the last year alone. The latest BSI Supply Chain Security Risk Index shows that, in September, Europe saw the highest number of border closures since the signing of the Schengen Agreement in 1995. With the number of families and individuals displaced by war across Africa and the Middle East growing 50% year on year, BSI warns that costs to international shippers will continue to rise.
The BSI Supply Chain Security Risk Index is based on data from BSI’s Supply Chain Risk Exposure Evaluation Network (SCREEN) which provides continuous evaluation across more than 20 proprietary risk factors in 203 countries. The report highlights that closures at Calais added an estimated $1.2M each day to the cost of those transporting goods to the UK with delays of nine hours or longer, while border closures in Southern Germany, Serbia, Croatia and Hungary have hit shipping firms hard. Food and pharmaceutical shipments are worst affected, with an entire shipment of medical supplies worth $3.9 million having to be destroyed after stowaways broke into the container.
Jim Yarbrough, Global Intelligence Program Manager, Supply Chain Solution at BSI commented:
“More so than any other economic bloc, Europe relies upon free trade. Every shipment delayed, contaminated or destroyed, raises the cost to the end-consumer. For exports this hurts competitiveness, undermines productivity and risks jobs; for imports it raises the cost of living for each and every citizen.”
Supply chain disruption, delays, theft and loss of goods in transit are global problems, and are not just restricted to Europe. According to the BSI Supply Chain Security Risk Index, South Africa has seen a 30 per cent increase in violent hijackings over the last year, with thieves switching from targeting only high-value goods such as cigarettes to lower-value items such as clothing as well.
Daring vehicle shipment thefts are becoming increasingly commonplace in China, with a recent spate of moving vehicle thefts. Here criminals are deploying tactics straight out of Hollywood movies, as they board speeding trucks and pass down stolen goods to their accomplices. $55,000 of pharmaceuticals were stolen in this fashion in July, with a further $40,000 worth of leather goods stolen the following month. BSI’s Supply Chain Security Risk Index provides a risk map with some of the most dangerous areas for such thefts.
“Economic volatility and uncertainty in markets such as South Africa and China is creating an ever more serious criminal threat to goods shipments. Highways such as the G45 north of Guangzhou are becoming notorious for ‘kaitianchuang’ thefts, where criminals leap aboard speeding lorries in scenes reminiscent of action movies. Even more violent tactics are seen in South Africa. While it is most often high value pharmaceuticals or electronics targeted in these well-planned raids, the trend is moving toward lower value goods. Effective supply chain planning can help firms route around such dangers, and make sure back-up supplies can be swiftly located if the originals are looted.”
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