Border closures may impact global freight flows Photo courtesy of the U.S. CBP

Border closures may impact global freight flows

Prepare for freight delays as borders get further tightened or closed due to the ongoing Syrian migrant crisis and the Paris terrorist attacks.

When border crossing points are tightened or closed, freight movements suffer – and that’s becoming particularly acute in the wake of Europe’s Syrian migrant crisis and in the aftermath of the Paris terrorist attacks.

BSI Supply Chain Solutions noted earlier this month that eessential shipments of goods and medical supplies are being delayed and destroyed as a result of the European migration crisis, costing a collective $1 billion to the U.K. economy in the last year alone – and the firm warns that costs to international shippers from such closures will continue to rise. 

Yet Jim Yarbrough, BSI’s global intelligence program manager, noted that supply chain disruption, delays, theft and loss of goods in transit are global problems and are not just restricted to Europe.

For example, according to the BSI Supply Chain Security Risk Index, South Africa has seen a 30% 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.

Yet it is in Europe where border closures due to the migration crisis and now the Paris terror attacks are causing major freight transport issues, Yarbrough said.

“More so than any other economic bloc, Europe relies upon free trade,” he explained. “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.”

Based on data from BSI’s Supply Chain Risk Exposure Evaluation Network or “SCREEN,” the firm estimates that border closures at the French port of Calais add an estimated $1.2 million each day to the cost of those transporting goods to the U.K. with delays of nine hours or longer, while border closures in Southern Germany, Serbia, Croatia and Hungary have hit shipping firms hard.

Yarbrough told Fleet Owner that the recent Paris terrorist attacks will only aggravate those issues further.

“What we expect to see is a heightening of security across the board, both by government authorities and private companies,” he said. “There needs to be a security push like what occurred after 9/11 and [transportation] companies need to plan for that; not just in terms of spending more money on security and conducting more due diligence, but preparing for higher inspection rates for freight and subsequent delays.”

Yarbrough also expects to see a greater “public opinion push” for tighter border security measures in the wake of the Paris attacks.

“We’re seeing that right now in Poland, where in the short term there are proposing significant border closures, particularly focused on the migrant issue,” he said.

He added that anti-Western terrorists – what BSI calls a “classifiable ideology” for those terrorist organizations (almost half of the world’s 250 known groups) that are formed to combat against or deter the spread of Western ideals, values or capitalism – are now often targeting the supply chains of multi-national, Western companies.

“Typically, anti-Western terrorist organizations are more dangerous than traditional terrorists because of the severity and frequency of the attacks, which are often more catastrophic in nature,” BSI noted, adding countries with a high or severe threat of anti-Western terrorism exported $1.74 trillion of goods in 2014.

An example where both a supply chain and anti-Western terrorist attack occurred is the 2010 Yemen bomb plot, in which the terrorists used the supply chain to try and ship explosive devices by air to two synagogues in Chicago.

Robert Moseley Jr. head of the transportation practice for the Smith Moor Leatherwood LLP law firm, added that terror attacks like what occurred in Paris this weekend should also remind motor carriers to review their security plans in detail.

“Everybody thinks about security when an event like this happens; it becomes a big deal to review your security plan, to make sure you are identifying specific threats and vulnerabilities that may exist within your organization,” he told Fleet Owner.

Moseley stressed that there must be an “ongoing commitment” on the part of carriers to continually review and update their security plans, plus to keep training their people and most importantly to look for potential “gaps” that may be developing.

“Right now, for example, one of the biggest issues in motor carrier security we see is the ‘imposter’ issue; a group claiming to be a legitimate company but that in reality has no relation to that company,” he said. “You as a carrier need to know what [criminal] strategies may be deployed against you.”

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