We are pleased to post an entry from our very first guest blogger, Mr. George Kearse. A little bit about our guest blogger:

Mr. George Kearse is an independent consultant to the logistics, express and mail industries. Mr. Kearse has twenty-two years of international experience. Mr. Kearse's most recent experience involved enhancing the visibility and effectiveness of the Postal Security Group in the Universal Postal Union. Mr. Kearse has also worked for DHL. Mr. Kearse specializes in IPR, combating counterfeiting, maintaining supply chain integrity and more.

Rise in Small Consignments of Counterfeits Poses New Challenges for Law Enforcement and Brand Owners

By: George Kearse

The Sixth Global Congress on Combating Counterfeiting & Piracy took place in France last month. In one of its many sessions George Kearse (contact at: This e-mail address is being protected from spambots. You need JavaScript enabled to view it ), an independent consultant to the mail, express and logistics industries examined some of the challenges presented by the rise in numbers of small consignments of counterfeit goods. He also suggested some measures that brand owners and others can take todetect and curb the problem effectively and in a timely manner.

With a large proportion of fake goods smuggled overseas and often passing through many different hands it can be very difficult for brand owners or law enforcement to track their source. The problem is further exacerbated by the growing trend to seek to avoid detection by parcelling the goods into small consignments that are sent through the mail or, increasingly, carried by human mules. Those that are detected may be confiscated and destroyed, but there is seemingly little appetite or incentive to invest large resources to catch the culprits and bring them to justice. Whilst this is understandable up to a point, perhaps the current situation should be the starting point to consider what else could be done?

Mules
I witnessed the human element of the small counterfeit consignment problem last year and also experienced the frustration of trying to report what I saw. Trapped in Hong Kong by the ash cloud that closed down airports across Europe, I saw some very interesting things going on at the Kenyan airlines check-in desk for a flight to Nairobi via Bangkok. For a start there were not one but two ‘pack stations’ for excess baggage. At the first ‘pack station’ an African guy was taping bright red/white/blue nylon zip bags and labelling them ‘Lagos’. There were around 20 of these bags loaded onto baggage carts with around 120-150 pieces in each bag. Meanwhile a second African guy was taking boxed WellKnownBranded cell-phones out of plain unlabelled brown cardboard cartons, removing the packaging, and then packing them into hand-carry bags. Each hand-carry bag held something like 200 pieces. A third
African guy was also there generally helping out. It was all very slick and efficient.

At the second ‘pack station’ was an African female. She had at least 12 black bags labelled ‘Maureen’ with an address in Lagos. Inside were
WellKnownBranded cell-phones. I wondered what I should do about this. There was nothing on the WellKnownBranded website to tell me, but I thought the company should be aware of this activity.

The next day, whilst searching the internet, I found two possible contacts and emailed them in an effort to locate brand protection. A day later I got a “Hi George” email from the first contact, from someone claiming to have global responsibility for brand protection. It said they had copied “our legal external council in Hong Kong who handles enforcement activities and you may provide the details of the activities by return mail.” So I did, but then nothing; no thank-you or we’ll get back to you.

Then I received an email from the second contact saying that her colleague has advised I can contact her with regards to the matter. I did, and copied in the first contact just for good measure. Almost immediately, the first contact, which I had heard nothing from for five days at this point, emailed to thank me for
my recent communications ‘to me and other members of my global team’. “We are investigating,” it said. Minutes later another email from the same person thanked me for the information, said they were aware of the activity and had ‘ongoing enforcement actions to address it’. So, were they ‘aware of’ or
‘investigating’?

In the event it didn’t seem to matter. When I was back in Hong Kong two weeks later I could see nothing had changed. The same red/white/blue zip bags and black holdall bags were piled high at the check-in queues. The incident left me wondering why I bothered and indeed increased my understanding of why others don’t report counterfeiting and smuggling. If it doesn’t make a difference, what’s the point?

Postal & Express Issues
Perhaps the same could be said about small consignments of fake goods that pass through the postal and express delivery systems. These numbers are a lot greater than you may think, and it’s not just a national postal system that has to be monitored. Today there are postal/express operators with operations in many countries. The global logistics of these operations are huge, as are the numbers of small consignments that move through them daily.

Today’s challenges are all to do with Integrated Services: move anything - anywhere - any-size - any-weight -any-distance. Ship it, receive it, break it down, warehouse it, and store it. Pick it, assemble it, pack it, label it; and air freight it, move it by road or move it by rail. Receive it again, break it down again, address it, distribute it, and then despatch it by mail, to many consumers, across many countries.

Added to this in the age of the one-stop-shop is the packaging designed to make the experience for consumers using these services as straightforward as possible. You want a Customs Declaration for a small packet? No problem! You can have small packets for packing and mailing goods prepared complete with the CN22 Customs declaration pre-printed along with the country of origin, “Electronics” as the goods description, and “$10” as the commercial value. Or you can just buy the software online and pre-print the small packets yourself!

Moreover, a ‘small consignment’ can now be a carton of many small consignments, and a pallet can be any number of cartons each containing ‘many small packets’. Add “Consolidators” “Co-loaders” “Expeditors” and “Resellers” into the equation and look at what you get? You can have a “number of small packets” from a “number of addresses” in Yemen, addressed to a “number of addresses” across the USA. These are placed inside a carton which is then labelled “Shipper: Dubai,” “Consignee: New York.” In terms of detection and enforcement, what all this means is that we too have to be integrated in
our approach and our thinking. We can’t look at “small consignments” in isolation. We are required to improve our agility, speed, assurance and openness to manage this constant change.

What to do
With the huge challenges facing effective enforcement of small consignments, the obvious next question is what to do to improve the situation.

Some brands have a ‘can-do’ attitude. They fully cooperate and support enforcement; are realistic with their demands of the supply-chain, and are out there delivering the message to the public. And then there are those that lack vision, who operate in automation mode, fearful of damage to their reputation and unwilling to tell the consumer how things really are. The same can be said for some in the supply chain too. But if industry really wants to make a difference it would ensure consumers are fully aware of the dangers and be prepared to put its ‘reputation damage’ arguments to one side to achieve that.

A first measure could be to focus on rigorous, effective due diligence of not just the customer but also a company’s management. This requires rigorous effective intelligence gathering and intelligence sharing in a sensible, structured way that is on a real time basis using real time communication. How many small consignments of fakes are out there and where are they? What can we do to get them now?

Another involves the transparency and security of the legitimate product. This means brand rights-holders checking, validating, verifying, and supporting
enforcement, with enforcement targeting prior to build, prior to loading, prior to uplift, prior to sailing, and prior to import. It also means enforcement targeting Free Trade Zones, Transit, Trans-Shipment and any other ‘stopover points’ along the line.

Yet another measure is to get out the message that “we will not accept counterfeit pirated product in our supply chains.” None of this is rocket science. We’ve been talking about it for years. But now it’s time for a new-age approach to it all.

Public awareness
With so much choice on the internet, it’s not surprising the poor consumer can’t see the wood for the trees. And the same is often true when it comes to reporting scams and reporting complaints. For example, one consumer fraud reporting website lists 72 scam buttons down the left-hand-side of its website. Have you ever tried to find out who to report all this stuff to?

We must recruit the consumer if we are ever going to start winning this war, but the consumer isn’t going to bother unless we make it really easy for them to help us fight counterfeiting. Where are the awareness raising campaigns?

We have the power of the internet, of video and YouTube. We should use these tools effectively to get the public involved. IT may be really smart, but I still don’t see a “hot-button” in the browser toolbar that links directly to a one-stop country-portal to report my complaint. There is no warning message “BEWARE FAKES” “REPORT FAKES” with the reporting website at the top of the search results. I don’t see a message “Watch this clip before you buy.” When I search for “blood pressure pills” I want the INTERPOL YouTube clip “Chad’s story - fake blood pressure pills” embedded alongside my results.

You may have heard of WHO IMPACT (International Medical Products Anti-Counterfeiting Taskforce) and INTERPOL’s MPCPC (Medical Product Counterfeiting and Pharmaceutical Crime Unit). Aline Plançon and her team have an excellent record and I’m very impressed with Operation Pangea, the international week of action each year targeting the online sale of counterfeit and illicit medicines. If you’ve not come across the full set of Interpol’s Operation Pangea videos, please do check them out and pass them on to others.

We have the power of the internet, so let’s use it. Sure, we could be overloaded with reports and snowed under with too many leads to follow-up timely. But isn’t it better to have too much intelligence to work with than too little or nothing at all?

A solution
My suggestion is a one-stop-shop, a government-backed business-supported gateway-portal in the country for the reporting of scams in general, and counterfeiting and piracy in particular. It would facilitate the gathering of intelligence for sharing throughout enforcement; coordinated and in cooperation with brands, rights-holders and industry. The owners of the gateway-portal in the country would work with the browsers, search engines and auction websites to ensure an add-in is made available for that hot-button in the browser toolbar, and for the gateway-portal to be listed at the top of the keyword search engine and the auction website results.

Also, the power of video and YouTube should be used to deliver the message embedded alongside the search engine results and the auction website results.  And the possibilities for growing this infrastructure from stand-alone country portals into integrated enforcement hubs feeding and consolidating intelligence to those that need it on a need-to-know basis should be investigated.

There are many ways of building capacity to deliver efficient effective enforcement that can help meet the challenges of dealing with small consignments. It’s time to start developing and using them.

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