Pirates on the highways

Shreya Pattnaik, an avid online shopper, opens a box she had ordered — only to find, to her shock, a Vim bar instead of a slick Chinese smartphone. Another shopper receives an ancient second-hand phone and laments about the con-job on an online message-board.

Pattnaik is part of the burgeoning Indian consumer base that global e-commerce giants — Amazon, Flipkart (in the process of being acquired by Walmart) and Alibaba — are trying to woo. Along with their swelling appetite for buying discounted goodies online, consumers also get a taste these days of disappearing products — a result of pilferage or robbery.

These thefts could happen during various stages as a product is shipped from its point of origin to consumption. “This includes stages of transportation and warehousing, although pilferage during transportation is higher than during warehousing,” explains R Shankar, CEO-India, TVS Logistics.

Logistics players have had to deal with vanishing goods ranging from a petty theft to a heist on the highways for ages now. While petty thefts are more likely to occur during last-mile product delivery, robberies are common on the highways. There are particular highway stretches where robbers are likely to strike, reveals Vineet Kanaujia, Vice-President, Marketing, Safexpress.

Good roads, bad roads

NECC, a logistics firm with presence across India, feels such risk in Rajasthan and Maharashtra is “controlled”, implying that two or three of 500 vehicles travelling in these States are likely to be hit. But in parts of Bihar, Uttar Pradesh and Madhya Pradesh, 10-20 or more trucks out of 500 could get hit, making those routes “uncontrolled and not predictive”, says NECC’s Director, Utkarsh Jain.

A senior executive from GoBOLT, a firm that moves a range of goods from breakfast cereals, electronics to liquor, concurs: “Most thefts tend to take place in specific places in UP and Rajasthan.” Routes in Madhya Pradesh and Chhattisgarh record a higher number of cases every year than parts of the country, reckons a Safexpress executive.

Organised gangs

Such highway heists are carried out by highly organised gangs with informers who have a network in the grey markets to sell their loot.

“Highway robbers tend to have specific intelligence inputs on the kind of cargo that is moved in trucks as they target trucks carrying high-value cargo — specifically electronic items such as phones and tablets,” Sumit Sharma, Co-founder, GoBOLT, explains.

That 35 per cent of pilferages is accounted for by high-value electronic goods suggests these are large-scale crimes, involving organised syndicates and not petty thieves, says Kanaujia. NECC buttresses the point by stating that dacoits who strike at remote locations usually wipe off 50-60 per cent of the trucks’ belongings.

Such attacks put drivers’ safety at risk. In isolated cases, however, products are stolen in connivance with drivers. NECC has lost its drivers several times in its 50-year history, of which about three lives were lost in the last five years. “Drivers are attacked and even killed at times. All of these are hijack cases. Drivers’ involvement is negligible,” says Jain.

Thefts often occur during stoppages. So, when a large truck with valuable products makes an inter-State journey, it usually has two drivers to guard when the stoppages occur for fuel, food, toilet breaks, or other contingencies.

Dhabas and fuel outlets are also places where mukhbirs or local spies hang around to assess cargo belongings, says SP Singh, Senior Fellow, Indian Foundation of Transport Research and Training (IFTRT).

Thieves are knowledgeable, trained in accessing the truck and manipulating the ignition system. “They drive off with the stolen truck, and at times, break into the truck and offload the cargo into an empty truck, further limiting the ability of law-enforcement agencies to recover the stolen goods,” Kanaujia says.

“There are also times when criminals pay drivers of long-haul trucks at their rest stops or fuelling stations in exchange for leaving their trucks for some time,” Kanaujia adds.

What stealers love

Thieves prefer products that are easier to dispose of — phones, tablets, electronics, branded clothes, liquor, bullion or cash. Satyam Chaudhary, Senior Director, Supply Chain, Flipkart, says that a branded T-shirt is unlikely to be stolen, but electronics goods and devices are more likely to be on the lust-list of thieves.

NECC, which moves several fast-moving consumer goods, says that food items such as chips, toffees, juices, electronic items, textile items or clothes, and other expensive branded goods are usually the first target as they command a “better price” in the black market.

“Due to smaller shipping volume and higher value of electronics and pharma products, they are prime targets for criminals who sell the goods in the black market for a quick profit. Tobacco, desktops, computer parts, cash, bullion, clothing and footwear usually face maximum risk,” says Kanaujia.

Dacoity tends to vary based on the type of trucks — with open-body trucks being more prone to robbery than the closed-body or containerised trucks. “But theft could happen even during containerised movement — particularly from highway biker gangs, who get onto trucks, and don’t just break the locks but even the bolts,” says GoBOLT’s Sharma, adding that liquor, which is moved in open trucks, is highly prone to theft.

When fuel and high-end chemicals are stolen, there is every chance that it would be adulterated before getting sold, points out Shankar.

Moreover, more pilferage happens in movements where a truck is shared by several traders — termed part truck loads — than in cases where full trucks are booked. “Large companies like Dabur, ITC, can have full truck load movement. But small traders sitting in Bihar, Assam or Delhi do not have enough volumes to book a full truck,” says Jain.

Technology solutions

To deal with such thefts, companies use technology such as track and trace and undertake route analysis. They deploy anonymous drivers, preferring daylight hours and even designing special locks. GoBOLT, for instance, uses special locks in its container trucks which only the driver knows how to unlock. “The company piloted these locks for transportation during Amazon’s sale last year. Opening these locks involves a special kind of keys that have to be screwed in from different angles for unlocking,” Sharma reveals.

Most companies do a route analysis on maps and opt for safer routes although there are limited routes to choose from between specific destinations. “Between Chennai and Delhi, there could be five different routes. We look at seven or eight criteria, including distance, condition of the road, accident-prone zone and safety to goods, truck and driver, to analyse best routes. The route chosen by our team is shared with the customer, and finally a route is selected.” explains Shankar.

Safexpress also believes that historical cargo theft data can help a company determine the best routes to take, cities to travel through, and truck stoppages to use. This cuts theft risks significantly, as thieves tend to be somewhat territorial. “Bunching three-four lorries cuts chances of attacks as well,” adds Jain. Lorries on certain routes, such as Indore to Patna, are dispatched in groups.

Many bank on technology but adding security layers increases the cost, and customers have to be willing to pay more. Safexpress has a fleet of over 5,000 GPS-enabled vehicles and if a vehicle travels outside a prescribed route, the company immediately gets a signal/alert.

“People have started putting in door sensors. If somebody opens doors in transit, then there would be an electronic alert,” adds Shankar.

NECC, meanwhile, has GPS-enabled tracking for its own 150-odd vehicles, which account for only 15-20 per cent of the total fleet in use. “They are used based on customer demand,” says Jain.

“Many mobile phone makers, including Xiaomi and Samsung, are adopting cautious methods such as having anonymous drivers, tracking and tracing, sealed doors, as safe as they can be with cash transportation,” says Flipkart’s Chaudhary.

Data on petty thefts is hard to come by but warehouses are relatively easy to secure. “In the storage areas or warehouses, there could be security sensors, 24x7 CCTV cameras. For expensive assets, RFID tags are there so that if something is amiss, corrective action can be taken,” says Shankar, adding that they also have regular audits in warehouse space where they know the system stock position.

Unforced errors

At times, there are handling errors, where one component is picked up instead of another.

“Flipkart has a robust system of checks to ensure that any instances of fake or spurious products are detected quickly and de-listed. Flipkart observes a zero tolerance policy on incidents where sellers are found violating customer trust and quality guidelines,” says a company spokesperson.

Success in recovering goods is elusive but not impossible. “In 10-15 per cent of the cases, we are able to recover the goods,” reveals Jain.

Whether a logistic firm has seen an increase or decrease in pilferage largely depends on the sort of goods moved and the routes travelled. “We have seen a drop in pilferage in both transportation and storage in the last few years. It has also gone lower over time — for instance, it was 2-3 per cent of total value around 2012-13, now it is down to 1-1.5 per cent. Similar numbers are there for warehousing — where it used to be 1.5-2 per cent, now down to 0.5 to 1 per cent,” says Shankar of TVS Logistics, a company that largely moves auto components.

But NECC, which operates in the long-distance routes only and moves a range of goods, has seen an uptick in pilferage, much more in some States. Companies involved in last-mile logistics say petty thefts or pilferage are more likely when products move from warehouses to smaller vans for delivery to shops or households. A last-mile delivery van may take eight stops, translating into eight opportunities for criminals to palm off products, says Kanaujia.

But like most blockbuster suspense crime thrillers, at times the culprit stands where the needle of suspicion hasn’t been pointed even once — the consumer.

E-commerce firms point out instances where consumers receive products on time and then cry hoarse about getting duped, demanding that the products be re-sent.

Flipkart says it follows a stringent on-boarding process that includes background and reference checks. If a customer is found to be engaged in fraudulent activities, the customer is barred from transacting on Flipkart in future and necessary action initiated as per law. But how many permutations and combinations of fraud can be covered?

With inputs from Sangeetha Chengappa