Maritime threats to global supply chains come from both internal and external sources. Internally, theft and tampering can occur during stuffing and loading of cargo at manufacturing plants, warehouses, and ports. Externally, piracy in Southeast Asian waters has risen significantly in recent years, accounting for over 75% of global incidents. Natural disasters and climate change also threaten maritime supply chains, as storms are predicted to intensify due to rising sea temperatures. To address these challenges, governments and industry collaborate through organizations that promote information sharing and set security standards.

1. Maritime Threats to Supply Chain
By: Mar-John P Cruz, CFI, BCCP
Director – BCAPable Inc.
Agenda
1. Why Maritime? Why Ocean Freight?
2. Maritime Threats to Supply Chain
a. Internal Threats
b. External Threats
3. Maritime Security Cooperation
- Collaboration between Governments & the Private Sector

2. 1. Why Maritime? / Why Ocean Freight?
a) Lesser transportation costs - larger and heavier shipments, it is often much
cheaper to ship by sea.
b) Improving transit times - technology continuously improves in the global
maritime industry. Ships are becoming faster and more efficient. Canals
have created shorter shipping routes with shipments crossing the oceans
with shorter transit times.
c) Environmental Impact: Not everything is about the bottom line and
convenience. While the social awareness of environmental issues can
change the way the public looks at a company and affect its bottom line, we
all have a responsibility of taking care of the planet on which we live. It would
seem that ocean freight wins this category. CO2 emissions are much higher
in air freight transport than ocean freight transport. This causes cargo
shipping by air to have a much larger carbon fingerprint than cargo shipping
by sea.
However, considering oil spills and the water ecosystems affected by ocean
freight, leaves this subject to debate.
d) Today, nearly 80% of global trade is transported in ships.
e) There are currently over 17 million shipping containers in the world, and
five or six million of them are currently shipping around the world on vessels,
trucks, and trains. In total, they make around 200 million trips a year.
f) The value of the shipping industry to global economy exceeds US$ 400
Billion per year.
(Source: World Shipping Council)
2. Maritime Threats to Supply Chain
The maritime cargo industry, being a vital link in global trade is also subjected
to the shared risks and threats inherent in the supply chain. These risks and
threats come from internal and external sources which we will briefly discuss.
Please take note that the examples outlined in this discussion does not
encompass the entirety of the risks and threats in the supply chain.
a) Internal – Theft, Pilferage, Tampering, and Contamination can occur
during the stuffing process both for LCL and FCL shipments. Items,
commodities or goods can be stolen, tampered, pilfered and even
contaminated during the stuffing or loading process.

3. Organized crime syndicates prevalent in the international “Grey Market”
have reportedly been deploying or recruiting staffs in manufacturing
facilities, transportation agencies, manpower providers, 3PL
warehouses, air cargo and ocean freight cargo terminals.
In a 2014 report by the Transported Asset Protection Association (TAPA)
Asia Pacific, organized crime involved in transportation and trucking
hijackings are becoming more violent and utilize various modus operandi
to perpetrate their crime activities ranging from bribery of corrupt law
enforcement officers, collusion with internal staffs and tiger kidnapping.
In similar fashion, maritime violence has also been the tactic of choice in
piracy and crimes in the shipping industry in Asia Pacific.
Theft, Pilferage, Tampering (which can include the introduction of
narcotics and WMDs) and Contamination (which can include the
introduction of biological and / or chemical agents) can occur in the
following stages of the maritime cargo supply chain process of trucking
transport, storage and shipping:
 Manufacturing facility
 3PL Warehousing facility
 During Transport (Threat of hijacking or truck crew theft)
 Wharf premises
 Co-Loaders Premises
 Container Yards
 Ocean Freight Warehouses / Terminals
Some common observations include the following:
Inadequate Infrastructures – most ports and harbors, especially in
emerging markets in Southeast Asia have inadequate warehousing and
gated / fenced container yard facilities.
Lack of security systems and processes - Minimal, inconsistent or
non-utilization of security procedures, documentations and controls,
access control systems, electronic security systems such as intrusion
detection systems, CCTV and protective lighting, among others.
Little to Non practice of Vetting Procedures for 3rd Party Vendors,
outsourced and direct hire employees

4. b) External: Piracy and Terrorism
 As of January 2015, Asia maritime piracy attacks rise to 75% of global
total (source: Reuters)
 Time Magazine featured that Asia’s seas offer rich pickings for
marauding pirates who steal oil and supplies worth billions of dollars
every year. “Asia – The World’s Most Dangerous Waters”. (Source:
Adam McCauley, 15 August 2014)
 According to the Singapore-based Regional Cooperation Agreement on
Combating Piracy and Armed Robbery against Ships in Asia (ReCAAP),
183 actual or attempted attacks took place in Southeast Asian waters
during 2014. This figure represents a marked increase from 150 in 2013
and 133 in 2012, and is the highest since 2006.
 The International Maritime Bureau’s (IMB) Piracy Reporting Center
corroborate ReCAAP’s findings and show a similar increase in attacks
in 2013 and 2014. Since a total of 245 attacks took place worldwide in
2014, Asia now accounts for up to 75 percent of all piracy and armed
robbery (PAR) incidents in the world, up from 60 percent in 2013.
 Over one third of all shipping traverses the Strait of Malacca each year,
with an estimated 15.2 million barrels of crude oil transported through
this strategic chokepoint every day.
 Pirates in Southeast Asia use violence as a tool less frequently, and
there are fewer instances of boarding with firearms.
 The majority of attacks are directed against small local ships that are
easily boarded, rather than major oil tankers or cargo vessels.
 A large proportion of all attacks consist of petty thefts and crimes of
opportunity against ships in ports. Major (and violent) hijackings are a
much rarer occurrence than in the Gulf of Aden or the Gulf of Guinea.
 Given the breadth of Asian waters and sea lanes, some areas are bound
to be more at risk than others as the share of violent incidents rose
substantially in 2014. (Source: The Diplomat)
 The continent’s share in global PAR statistics is rapidly increasing as the
number of attacks in other parts of the world – most notably the Gulf of
Aden – continues to decline due to the efforts of allied naval forces.
 World Bank estimates the global economic impact of piracy at US$18
billion a year
 In Southeast Asia, as fish stocks decline, coastal dwellers are turning to
piracy to supplement their incomes (source: Lily Kuo, qz.com)
Maritime Security Challenges in Asia-Pacific region
1. National Stability Concerns
2. Piracy and maritime terrorism
3. Territorial claims and maritime boundaries delimitation, particularly in the West
Philippine Sea / South China Sea, East China Sea, Sea of Japan, and others

5. 4. Major/Non-regional powers interests, particularly the problem of navigation
through semi-enclosed seas, archipelagic waters, the straits of Malacca and
Singapore and others
5. The problems of implementing UNCLOS provisions, particularly maritime space
and resources management and;
6. Foreign military intelligence activities in the EEZ of other countries.
(Source: Prof. Dr. Hasjim Djalal,
An ASEAN Perspective on Maritime Cooperation)
Terrorism in the Southeast Asian Maritime Industry
Southeast Asia Terror Groups with Maritime Capability
 Al Qaeda
 Jemaah Islamiyah
 Abu Sayyaf Group
 Liberation Tigers of Tamil Eelam – partnering with ISIS?
(Sources: Institute of Defence & Strategic Studies Singapore;
Prof. Hudson McLean, Lankaweb 16 March 2015)
Piracy versus Terrorism
 Maritime “Common Piracy” - attacks which have been carried out with
an economical objective and by perpetrators who are driven by greed
rather than political motivations.
 Political piracy - the attacks in which politically oriented groups use
piratical tactics to finance their activities.
 Maritime terrorism and maritime insurgency - attacks which clearly
have a political motivation and are carried out by organizations with
political objectives. While international maritime terrorism has the aim
and potential to harm international security as well as international trade,
maritime insurgency has mostly local geographical repercussions.
 While some actors such as Al Qaeda and its affiliates aim at harming the
‘Western’ civilization as such, local insurgencies such as the Abu Sayyaf
Group (ASG) in the Philippines or the LTTE in Sri Lanka use or have
used terrorist attacks at sea in order to fight their local government.
 Economically oriented terrorism - politically motivated attacks
conducted by organizations primarily interested in financial benefits with
only a marginal part of attacks amounting to maritime violence.
(Source: Mr. Andreas Graf, PiraT-Working Papers on Maritime Security
Nr. 5, April 2011)

6. c) External: Natural Disasters & Climate Change
 Climate change will cause storms, hurricanes and tropical storms to become
more intense.
 Scientific research indicates that climate change will cause hurricanes and
tropical storms to become more intense — lasting longer, unleashing
stronger winds, and causing more damage to coastal ecosystems and
communities.
 Scientists point to higher ocean temperatures as the main culprit, since
hurricanes and tropical storms get their energy from warm water. As sea
surface temperatures rise, developing storms will contain more energy.
 Other factors such as rising sea levels, disappearing wetlands, and
increased coastal development threaten to intensify the damage caused by
hurricanes and tropical storms.
 More than 2.7 Billion people around the world were affected with US$ 1.3
Trillion lost to disasters from year 2000 to 2011.
(Source: United Nations Office for Disaster Risk Reduction)
3. Maritime Security Cooperation
 Council for Security Cooperation in the Asia Pacific (www.cscap.org)
 ASEAN Plan of Action to Combat Transnational Crimes. Covers 8 areas: (a)
trafficking of persons, (b) illicit drugs trafficking, (c) money laundering, (d) sea
piracy, (e) terrorism, (f) smuggling of small arms, (g) cyber-crime, and (h)
commercial crime.
 Regional Cooperation Agreement on Combating Piracy and Armed Robbery
against Ships in Asia (www.recaap.org)
 International Ship & Port Facility Security Code (ISPS)
(www.imo.org/ourwork/security/instruments/pages/ispscode.aspx)
 US CBP Customs Trade Partnership Against Terrorism (US C-TPAT)
(http://www.cbp.gov/border-security/ports-entry/cargo-security/c-tpat-customs-
trade-partnership-against-terrorism)
 Transported Asset Protection Association (TAPA) Security Standards
(www.tapa-apac.org)
 ISO 28000 – Supply Chain Security Management
(http://www.iso.org/iso/catalogue_detail?csnumber=44641)