Paul LindersRegional Security Manager EMEA

CEVA Freight Management / EGL Global Logistics

Board of Directors, TAPA EMEA

Transported Asset Protection Association Europe Middle East & Africa

2

Agenda

Risk and Challenges

Basics about TAPA

Standards and Services

Regulatory Influence

Summary and outlook

3

Risk and Challenges

4

Albert Einstein

„The world is a dangerousplace to live, not becauseof the people who are evil, but because of those whodon‘t do anything aboutit.“

Albert Einstein, 1879 - 1955

5

Why are we the target?

• Value of products– Technology goods, watches, MP3’s,

high value cloth and shoes

– Not just functional items anymorethey are part of our lifestyle

• Risks of the supply chain– Organized criminals and gangs

operating worldwide

– Targets: high value and luxury goods, easy to get, easy to sell

• Stolen products can be replaced –missed sales opportunities can not be recovered!

6

Supplier

Hub

Supplier

Hub

ODM

Contract

Mfg.

Supplier

Launch /

Proto Build

Product/

Process

Definition

DFx

Mfg. Cust DC,

Retail,

Consumer

AsiaFulfill.

Cust DC,

Retail,

Consumer

EMEAFulfill.

NAFulfill.

Cust DC,

Retail,

Consumer

LAFulfill.

GLOBAL

PLANNING

Parts

Returns / Service

Parts

Returns / Service

Parts

Returns / Service

Parts

Returns / Service

Suppliers

Mfg.

Mfg.

Mfg.

Mfg.

Every point of transfer, change of possession or manner of conveyance represents an opportunity for loss, damage, misdirection or theft.

The consistent application of sound security standards, the timely and accurate reporting of losses and the expeditious movement of product improve on-time delivery and customer satisfaction.

Product at Rest is Product at Risk.

Controllable Risk?

Mfg.

Cust DC,

Retail,

Consumer

7

Supply Chain Opportunities

3rd Party Baseline & Compliance Reviews

Investigative& Litigation Strategies

Software Integrity & Practical NDAs

Cyber Vigilance

OpportunitySpiral

Internal Theft

Vendor &Supplier

Dependency

Counterfeit &

Grey Market

Cargo / in TransitLosses

Contracts,Insurance

& INCO Terms

Audit Requirements

Negligence Defined

Due Diligence &Certification (ASL)

Alignment w/ KeyBusiness Initiatives

Data CollectionIIS

Physical & LogicalSecurity Upgrades

Forwarder & CarrierLiability

Packaging & LabelingMapping Supply

Lanes & ProcessesNetworking, C-TPAT,

TAPA & MIG

8

Who cares ?

• The world’s biggest manufacturers

• Law enforcement agencies

• Airport authorities

• Airlines

• Freight forwarders/integrators

• Ground handlers

• Truckers

• Underwriters

• Insurance agencies

9

Basics about TAPA

10

Basics about TAPA

• Founded in the US in 1997 – extended to EMEA and APAC in 1999

• Membership is open to manufacture companies and related logistic and freight service providers.

• The strategic intent– establish best known security practices in industry

– influence their adoption by regulatory bodies

– promote compliance with identified best practices

• Today TAPA has 600+ member Companies in EMEA, the AMERICAS and APAC

• Market cap valuation of member companies $ 1.6 trillion, annual sales = 920 billion

11

VISION &MISSION

• VisionTAPA effects the reduction of losses in the manufacture, transportation and distribution of high value products.

• Mission

To establish and maintain best practice asset protection for industry and related logistics and freight service providers.

12

• 223 Members339 Reps

• Sectors:High TechClothingJewelleryTobaccoAirportsAirlinesInsuranceIntegratorsCarriersGround HandlersService Providers

Success

8 13 15 17

19

26

50

30

68

30

89

32

118

10

42

144

13

2

0

50

100

150

200

250

1999 2000 2001 2002 2003 2004 2005 2006 2007

TAP

SSP

Assoc

Full

CountriesAE, AT, BE, BG, CH, CZ, DE, DK, ES, FI, FR, GB, GR, HU, IE, IT, JO, KE, LU, NL, QA, RO, SE, ZA

13

Members

14

Why are we the TARGET?!STANDARDS AND SERVICES

15

Freight Security Standards

• Freight Security Standards – Introduced 2001, revised 2005 & 2007

– Worldwide minimum standards for freight forwarders’facilities handling high tech / high value products.

– now covers 650 + facilities w/w

– Levels A,B,C decided in partnership between shippers and logistics service providers

– A and B certification from independent audit bodies

– Accepted by US Customs CTPAT program as BKM (Best Known Method)

– http://www.tapaemea.com/engl/fsr.html

16

TSR and CTS

• Truck Security Requirements

– Rolled out on a w/w basis in 2006

– Level 1,2,3 (1 is highest level)

– Self assessment process- required level agreed between buyer and supplier

– http://www.tapaemea.com/engl/tsr.html

• Cargo Terminal Security Standards

– Mid term project

– Evaluation / discussion with airport industries ongoing

17

IIS = Incident Information Service

• Members and Law enforcement reporting incidents to IIS

• More than 2800 supply chain incidents in Europe since 1999

» Loss value > 635 Mio € - EU = € 8 Bio annually

• Database highly protected. » Loss owner details anonym

• Added value» To identify hot spots and trends» Immediately react on warnings» Conduct risk assessments on lanes» Exchange info's w other affected companies

and Law enforcement

• IIS provides:» Flash mails / warnings for members» Monthly bulletin – summary of incidents» Special statistics and analyses

18

IIS Monthly Bulletin

19

LEA Partners

20

REGULATORY INFLUENCE

21

Regulatory Bodies

• TAPA EMEA is contributing to EU & w/w initiatives– FSR an integral part of Government Projects/Regulations on

Supply Chain Security

– Be a credible an authoritative ‘partner’ to Regulatory Bodies

• Levels of activities– Those which TAPA EMEA wants to influence

– Those which the Association wishes to be kept informed but does not intend to influence

• Currently working on – Supply Chain Security (DG TREN – Directorate General Transport and Energy)

– Secure Parking (DG TREN)

– Civil Aviation Security (2320) revision

– Authorized Economic Operator (DG TAXUD - Taxation and Customs Union )

22

Other Activities

• Operation GRAFTON – London Heathrow

• Fighting crime in Southafrica – JNB Airport

• Other Airport Initiatives e.g. FRA & AMS

• Secure Parking Project EU

• Alignment / cooperation with Freight Forwarder International (FFI)

• Associate Partners • GDV – Gesamtverband der Deutschen Versicherungswirtschaft e.V.

• DIPS - Drink Industry Project Scotland/ Scottish Business Crime Center

• SOCA - UK Serious Organised Crime Agency (in preparation)

• Swedish Association of Marine Underwriter (in preparation)

23

THE FUTURE

24

Outlook

• It is not sufficient • to simply agree that cargo crime is a problem

• Major buyers • of air cargo/logistic services want to work with suppliers that

can demonstrate how they are helping to tackle theft

• TAPA members • will go where they can get FSR/TSR standards and where

they can participate in active partnership with law enforcement and other stakeholders to reduce the threat.

• Security requirements • will be increasingly embedded in competitive bids and

contracts

25

Focus

• Improve security to prevent cargo crime - fight against terrorism through C-TPAT, AEO, ISO 28000

• Harden the target against organized crime in joint interest with Law Enforcement

• Harmonize procedures to one acceptable level

• Include all interest groups – have one voice

• Assist authorities on future regulations

• Open membership to more business sectors

26

The Future

• 2007 will be a record year on incidents

• Loss values will be higher

• The integration of the new EU Members will cause a change in crime and activities

• Neighbor countries will be endangered

• Crime development trends:» Simple but brutal

» No rules, no ethics

» Corrupt

» Organized

» Terrorism

27

Some incidents..

• The kidnapping of two truck drivers and theft of the freight, East England (GBR)

• Arrests after a truck break-in in Spain / Portugal (ESP / PRT)• Losses amounting to millions through trailer theft in North-Rhine

Westphalia (DEU)• Load was stolen, while driver was in the cabin, Veneto (ITA)• Driver was hijacked at parking place, Emilia Romagna (ITA) • Van forced off the road, load of mobile phones stolen, South East

England (GBR)• Load was stolen, while driver was sleeping in the cabin, Catalonia

(ESP)• Partial load was stolen, while driver was sleeping in the cabin, London

(GBR)• Forced stops and hijacking by bogus police officers, Vryberg &

Midrand (ZAF)• Truck and driver hijacked, Oxfordshire (GBR)• Truck and driver hijacked, Wolverhampton (GBR)

• Trailer was stolen by bogus collection, Rotterdam (NLD)

28

incidents registered in IIS (©TAPA) in %

Info by IIS (© TAPA Emea)

22

76

2

Suplier Facility

related

Airport related

Truck related

29

EU in generalEU in general….

30

For an economist, the map looks a bit differentFor an economist, the map looks a bit different ….

Rus

U

Germany

Fin

P

France

Italy

UK NL

B

Spain

A

Den

Sw

G

Sw

N

Ir

Pol

Tur

R

HC

31

Effects EU:

•• Schengen agreement (open borders Schengen agreement (open borders throughout Europe)throughout Europe)

•• No checks on inNo checks on in--out coming vehicles / out coming vehicles / persons within these countries (high risk persons within these countries (high risk for terrorism)for terrorism)

•• Longer border line with Russia (Baltic Longer border line with Russia (Baltic states; Hungary; Poland)states; Hungary; Poland)

•• Fast movement in place for goods in Fast movement in place for goods in transit.transit.

32

Organized Crime (OC) in Europe:

• Is problem # 1 in theft.

• Is growing rapidly within Europe and Russia.

• Is using European and international networks.

33

34

Biggest OC gangs in Russia:

• Tambov

• Kazan

• Malyshev

• Solntsevo

• Ismailov

• 21st Century

• Luchanskiy

• Podolsk

• Kurgan

• Uralmash

• Bykov

• Mikho

• kostenaya

35

Russia

• 16.600 crimes counted for in 2006 (+15%)

• 368 incidents with grand theft (+3%)

• 1974 robberies

• 40% more then 2005 were committed by OC

• Equipment used: guns, police uniforms, bogus police cars)

Info by IIS / TAPA

36

SUMMARY

37

Summary

• Thieves will always exist. Thefts will always occur.

• Security is only as strong as the weakest link.

• It is essential that senders of high value goods

and carriers/service providers have better working

relationships.

• Loss Prevention & Security is Everyone’s

responsibility!

• ASSIST TAPA – HELP US GROW

38

Any Questions? – Thank you very much!