Drug gangs have infiltrated shipping supply chains, warns Maersk executive
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Drug gangs have infiltrated shipping supply chains to an “extreme” degree, a leading industry executive has warned, as the European Commission unveiled plans to crack down on illegal drugs flooding into Europe’s ports.
Cocaine shipments to the EU have surged in recent years, with criminal gangs directing the flow of drugs via global shipping routes. A record 303 tonnes were seized in 2021, according to the latest continent-wide figures from the EU’s drugs monitoring agency, EMCDDA.
As a result, shipping companies are dealing with “some of the most dangerous people in the world. The way that these people are infiltrating the whole supply chain, not only the shipping side or the port side, is rather extreme,” said Keith Svendsen, chief executive of APM Terminals, a division of Danish shipping group Maersk.
The warning comes as the European Commission will on Wednesday propose more co-ordination among European ports, governments and private companies by setting up a “European Ports Alliance”, according to a draft of the communication seen by the Financial Times.
One proposal involves setting up common risk criteria and priorities for customs controls at EU level. €200mn will be allocated to fund equipment to scan containers from 2024.
The commission will also urge member states to implement existing security rules for ports, including providing ports and shipping companies with the means to “screen and vet their employees to avoid corruption by criminal networks”.
Belgium’s port city of Antwerp is the largest cocaine trafficking hub in Europe, with a record of 110 tonnes seized in 2022, according to customs authorities.
Antwerp scans only about 2 per cent of the goods that pass through the port but plans to scan all containers coming from Latin America and considered “high-risk” by 2028. Of those, about 5 per cent are checked at present.
For the shipping industry, the increasing pressure to clamp down on the drug trade risks disrupting the commercial operations of container carriers, which transport millions of steel boxes every week.
Claudio Bozzo, chief operating officer of MSC, told the FT in August that it “suffers consequences when it comes to costs” to make containers available for customs inspections. Svendsen declined to provide details on the costs of increased checks on Maersk but said the “impact on the supply chain is the same across the companies”.
He said “more problem solving needs to be done” before Antwerp’s 100 per cent target can be reached. Instead, he said, checks should be reinforced on exports in Latin America, pointing to a €1bn investment APM Terminals has made in a container terminal it operates in Moín, Costa Rica.
However, Svendsen said his bigger concern was a “duty of care” towards his staff, rather than costs. “There have been incidents where there is infiltration where employees are being coerced into helping” drugs gangs, Svendsen said.
Rotterdam port authorities detected eight tonnes of cocaine on a Maersk ship in July at a street value of €600mn, the largest seizure of cocaine in the Netherlands.
Svendsen said Maersk was not responsible for the drugs in its containers. “What has gone wrong is that we have international drug trafficking using legitimate infrastructure to move that product by infiltrating supply chains.”
The commission declined to comment on the leaked document, which is still subject to change until its publication.
Despite growing political consensus to tackle the problem, there are knock-on effects for the global shipping industry from stricter customs controls, experts said.
Richard Neylon, a shipping lawyer at HFW, said it was sometimes “not within the shipowners’ power to open and inspect” containers. “[Shipping is essential] for international trade. The risk of drug [smuggling] is a very difficult reason to turn down international trade.”
Additional reporting by Oliver Telling in London
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