[241115.EN.BIZ] European Migration Crisis 'Adding US$1bn To Supply Chain Costs'

THE latest BSI Supply Chain Security Risk Index noted that essential shipments of goods and medical supplies being delayed and destroyed as a result of the European migration crisis have cost a collective US$1 billion to the UK economy in the last year alone, which indicates that the costs of such factors to shippers may increase.

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 per cent year on year, BSI warns that costs to international shippers will continue to rise, Lloyd's Loading List reported.

The index is based on data from BSI's Supply Chain Risk Exposure Evaluation Network, which provides continuous evaluation across more than 20 proprietary risk factors in 203 countries. The report highlights that closures at Calais added an estimated $1.2 million 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 also hit shipping firms.

Losses due to contamination of cargo shipments by stowaways were particularly serious for the pharmaceutical and food industries, with an entire shipment of medical supplies worth $3.9 million having to be destroyed after stowaways broke into the container, BSI noted.

Global intelligence programme manager at BSI Supply Chain Solution, Jim Yarbrough, 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."

Various sources have reported further additional border checks following the Paris terrorism incidents last week, which may add to delays and associated costs, although no one was available at BSI at the time of writing to comment on the potential effect of these measures on supply chains and their costs.

But the organisation noted that 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.

In addition, daring vehicle shipment thefts were 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", the organisation said.

Mr Yarbrough concluded: "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."

Meanwhile, the UK's Road Haulage Association (RHA) last week called for further action to help resolve the Calais situation warning that "waiting until someone gets killed is simply not an option".

Following further incidents last week involving attempts by migrants to access road freight vehicles waiting to enter the Port of Calais, the RHA said the problems for lorry drivers in Calais had not gone away and included "acts of violence towards hauliers who wish nothing more than a safe passage to the UK".

Source : HKSG.