The video focuses on one of the largest drug smuggling incidents in U.S. history, highlighted by a major drug bust at the port of Philadelphia in June 2019. Authorities seized 20 tons of cocaine, valued over a billion dollars, from the MSC Guyan, a massive cargo ship, revealing the cartel's infiltration of MSC's crews. The operation involved loading cocaine onto the ship while at sea and concealing it within refrigerated containers, showcasing the scale and complexity of smuggling through the global shipping industry.

This serious incident underscored the vulnerabilities and challenges within the globalized shipping framework, which is responsible for transporting 90% of the world's trade. Ports like Antwerp and Rotterdam, central to cocaine trafficking routes from South America to Europe and beyond, are particularly targeted due to their efficiency and significance in global trade. Investigations revealed the involvement of Balkan cartels and crew members recruited to aid in cocaine transit, despite efforts and limitations from shipping companies and customs authorities to mitigate such crimes.

Main takeaways from the video:

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Key Vocabularies and Common Phrases:

1. seizure [ˈsiːʒər] - (noun) - The action of capturing someone or something using force. In this context, it refers to the act of taking possession of drugs by authorities. - Synonyms: (confiscation, capture, appropriation)

In June 2019, news breaks of a massive seizure in the port of Philadelphia.

2. penetration [ˌpɛnɪˈtreɪʃən] - (noun) - The action or process of making a way into or through something. Here, it refers to the cartel's deep involvement in the crewing apparatus. - Synonyms: (infiltration, entry, permeation)

The cartel's penetration of MSC's crewing apparatus was so deep that they could run multiple crews on multiple ships.

3. apparatus [æpəˈreɪtəs] - (noun) - The technical equipment or machinery needed for a particular activity or purpose. In this context, it refers to the crew system used by MSC. - Synonyms: (equipment, structure, system)

The cartel's penetration of MSC's crewing apparatus was so deep.

4. globalization [ˌɡloʊbələˈzeɪʃən] - (noun) - The process by which businesses or other organizations develop international influence or start operating on an international scale. - Synonyms: (internationalization, expansion, development)

The shipping industry is essentially the backbone of globalization of a global economy.

5. inundated [ˈɪnʌnˌdeɪtɪd] - (verb) - To flood or overwhelm with things or people to be dealt with. Here, customs officials are overwhelmed by the problem of drug smuggling. - Synonyms: (overwhelmed, flooded, swamped)

For customs officials, they're essentially inundated with this problem.

6. collaboration [kəˌlæbəˈreɪʃən] - (noun) - The action of working with someone to produce or create something. In this context, it refers to the involvement of ship and smaller boats in drug trafficking. - Synonyms: (partnership, cooperation, teamwork)

One of their collaborators, or co conspirators, would come up in a smaller kind of fishing vessel.

7. correlates [ˈkɔrəˌleɪts] - (verb) - Have a mutual relationship or connection, where one thing affects or depends on another. Here, it refers to the relationship between the expansion of the Panama Canal and cocaine seizures. - Synonyms: (matches, corresponds, connects)

That expansion around 2016 basically correlates with a big jump in cocaine seizures.

8. infiltration [ˌɪnfɪlˈtreɪʃən] - (noun) - The action of entering or gaining access to an organization or place surreptitiously, especially to acquire secret information or cause damage. - Synonyms: (penetration, intrusion, incursion)

Investigators are also conducting investigations where they're coming across the infiltration of other parts of the shipping industry.

9. forfeiture [ˈfɔrfɪtʃər] - (noun) - The loss or giving up of something as a penalty for wrongdoing. Refers to MSC's potential loss of ships due to cocaine seizures. - Synonyms: (confiscation, loss, penalty)

There's a civil case going on right now where there's an effort by us authorities to show that that initial seizure should turn into a forfeiture.

10. culpable [ˈkʌlpəbl] - (adjective) - Deserving blame or censure as being wrong, evil, or injurious. - Synonyms: (blameworthy, guilty, responsible)

MSC is arguing that they're not culpable.

How a Balkan Drug Cartel Infiltrated Global Shipping

The feds are investigating one of the largest drug busts in U.S. history. In June 2019, news breaks of a massive seizure in the port of Philadelphia. 20 tons of drugs in a single seizure. Authorities say the drugs could have a street value of more than $1 billion. This was not like just any other drug trafficking case. Yes, drugs are smuggled on container ships every day, but this one was extraordinary and this one was different.

It was not only the sheer quantity of drugs, it was also the level of involvement of the crew. This wasn't just happening on one ship. The cartel's penetration of MSC's crewing apparatus was so deep that they could run multiple crews on multiple ships with these massive loads of drugs that were going to Europe. It really has created this kind of gangland feel that overlays global container shipping. The fact that there's the world's largest shipping company that's at the center of this, that makes it a very sensitive topic and also one that could have ramifications for the wider shipping industry.

There is this really interesting and problematic tension just in the nature of the globalized economy. Most people don't give a second thought to the way that their goods arrive. It all arrives on these giant, massive vessels that are sailing around the world. 90% of global trade is conducted on ships, and every year, $14 trillion of goods are moved around the world. The shipping industry is essentially the backbone of globalization of a global economy.

What that means is that there's this pressure on ports and on shipping companies and on customs authorities to ensure that global trade runs smoothly and that it runs quickly. Every time a container is opened, that slows down the trade. It also prevents a security services, customs officials and others from really digging in and examining the containers as they move through this system. The ports of northern Europe, primarily Antwerp in Belgium and Rotterdam and the Netherlands, have long been central to global trade, dating all the way back to the spice trade hundreds of years ago. As a result, the infrastructure built up around these ports has been increasingly efficient and spectacular.

As the market for cocaine has grown in Europe, it only makes sense to be shipping them through these two ports in the north. That gives the traffickers an opportunity to not necessarily service the market in the Netherlands or in Belgium, but all across Europe and even down into Africa and Asia as well. We visited one of these law enforcement customs stations, where they scan cargo that they believe contains illicit goods. On this trip, just a regular day in the port of Antwerp, customs officials had pulled aside a shipping container. It had a high risk level, and they put it through the scanner and ended up searching it. It was cocoa beans from South America. Upon searching the container, they found almost 1000 kilos of cocaine.

We have several examples of where they are using all their creativity to get things past us. I'm going to show you an image of an import of a Cadillac, a pink Cadillac. And then you see in the door of the Cadillac, kind of strange packages. So when we examined it, it was ecstasy. 50 kilos of ecstasy. As you see here, they filled, like the shells of pineapples, with cocaine. This one is an import of teak from Ecuador. The left pile of wood had darker edges. The cocaine was hidden in the wood itself and also the structure of the container and truck. Sometimes they hit stuff in the structure, like in the floor or the ceiling.

On a yearly basis, we are talking about 40 to 50,000 containers which are scanned. The number of containers entering and leaving the port are millions of millions. And today, we do not have the infrastructure to scan all the containers. We scan 1.5% of the containers entering the port of Antwerp. We stop a lot of tons. But if you look to the outcome, the effect is zero. There is still huge quantities of cocaine entering the European market. For customs officials, they're essentially inundated with this problem and really outmatched. And that's something, actually, that the traffickers know and realize and have taken advantage of. For them to lose a thousand kilos here, 1000 kilos there is not the end of the world, because they just expect that they're just going to continue shipping more.

Around 2008, 2009, there was kind of a new phenomenon that police officials, customs authorities, started noticing these large commercial ships before they entered the ports. Crew on board the ship would actually toss over bags filled with cocaine. One of their collaborators, or co-conspirators, would come up in a smaller kind of fishing vessel and pick up the cocaine. And this was known as the drop off. And that was a really big breakthrough. What this meant was that there was somebody on the ship that was in on it.

As European law enforcement investigators started kind of honing in on this problem of commercial shipping companies being at the center of the global cocaine trade, they started finding patterns, putting together pieces, and they realized that there was one shipping company that seemed to be at the center of a lot of these drop offs, and that was MSC. Mediterranean Shipping Company is known by its initials, MSC. They are today the world's largest shipping company. MSC is a really interesting company. Over a period of five or six decades, they go from one ship to a fleet now of 650, surpassing everybody. It's a private company in Switzerland, so its finances in particular are pretty opaque.

It does sort of make the miracle that MSC is, in terms of the empire that they built over a short period of time, all the more intriguing and all the more mysterious. Starting in the early 2000s, MSC became a major player in the sea lanes from South America to Europe. They started investing heavily in what are called reefers, or refrigerated containers, to move refrigerated goods. That turned out to be a golden opportunity for the traffickers because you basically could put the coke inside containers of blueberries or strawberries or bananas, and it would move quickly through the system, and they don't want to, like, slow those down because the fruit is a perishable commodity into Europe.

The cooling compartment is a very popular place to hide cocaine because that compartment can be opened and closed without breaking the seal of the container. One of the key moments in the build out of this infrastructure was the expansion of the Panama Canal in 2016. So you've got much bigger ships, much greater amounts of cargo, again, much of fruit and vegetables, meats, other kinds of commodities. But that expansion around 2016 basically correlates with a big jump in cocaine seizures in the ports of Antwerp and Rotterdam. Because MSC dominated this particular route, they became an easy target by traffickers.

Law enforcement investigators started seeing that cocaine that had made its way to Europe had actually stopped through a U.S. port. So they started kind of working backwards at first, thinking, if all of this cocaine is ending up in Europe, but it's stopping in the US, how did we not detect? At the same time, European authorities are also conducting investigations where they're coming across the infiltration of other parts of the shipping industry generally, but especially MSC. So over the course of two to three years, they started following about four ships, and that was the MSC desiree, the MSC Carlotta, the MSC Avni, and the MSC Guyanne.

The MSC Guyan is a monstrous ship. This is a ship that is the length of three football fields. It's one of the biggest ships sailing the oceans today. MSC Guyan was following a particular route from the west coast of South America, through the Panama Canal up to Philadelphia, and from there from the east coast of the United States over to Rotterdam and Antwerp. Guyanne set sail in the spring of 2019. In mid June, after the Guyanne had been at sea for many weeks, it pulled into the mouth of the Delaware Bay. This day, instead of the Guyan being met by a riverboat pilot, they were met by the coast guard, Philadelphia police, homeland security officials, customs and border protection officials.

There were over 100 law enforcement agents waiting. They corralled the crew, start questioning them, swabbing their hands for any traces of cocaine. Those came back positive. They started doing a deeper inspection on the containers and eventually found kind of their first hit of cocaine. And then they found more, and they found more and eventually came up with the 20 tons. Initially, law enforcement investigators were stumped. How did they get so much cocaine on this ship? So what they came to find out, through interviewing the crews and through other kind of physical evidence that they were able to obtain, was that the cocaine was actually loaded onto the ship while it was in the open ocean of South America.

As the Guyan was powering through the open ocean in the middle of the night, small boats pulled up alongside and essentially loaded the cocaine that way. The crew members used the crane of the Guyan and basically hoisted up large nets filled with the bales of cocaine onto the cargo ship. Then they would take that cocaine, and then they pushed it into some of the containers and basically stashed it on the ship. So it was an extremely brazen operation. They do this loading at sea, not just once, but multiple times. They load it as it's going down the west coast of South America. It turns around at a port in Chile and then goes back up, and they do it several times on the way back up.

There are eight crew members in all on the Guyana that was involved in the smuggling operation, included the chief mate. And the chief mate plays a really key role on the ship. He puts together the schedules, for example, of crewmen, so he can get the crew that he knows are in on this operation working, for example, all at night when he needs them to be there to load the cocaine. He also has a lot of information about the stowage plans. So which containers are going where?

Us authorities did not arrest the captain of the ship, but you don't need the captain. But for an operation like this, you do need a very senior officer who can control the movement of the crew, the ships, and all sorts of things. And keep in mind that this wasn't just happening on one ship. Us authorities had also made seizures on the Carlota and the Desiree, which they believed operate in exactly the same way. This is something that was by 2019, June of 2019, it was a pretty well-oiled system, so that's why they were confident they can move that many drugs, that tonnage of cocaine, on a single load.

In total, there were about eight crew members that were implicated in the Guyan smuggling. And of those eight, four of them had, in fact, been recruited before ever stepping foot on the Guyan. On that particular voyage. At least one of them had been recruited in their home country of Montenegro. Montenegro has a long history of seafarers. The country's right on the Adriatic produces a lot of sailors and crewmen and officers who are very skilled at what they do, and they've been plying the oceans for centuries. MSC taps into that in a way that's bigger than any other shipping company.

They employ basically a third or more than a third of all Montenegrin sailors. Organized criminal groups are particularly strong in the Balkans. There's a large network of individuals and groups that have been operating there for years, really in the wake of the breakup of Yugoslavia and the Balkan wars. As the economy there collapsed, it beget a lot of crime. If you're a cartel, if you're trafficking drugs, it only made sense, and it was easy for them to target not only sailors, but to target sailors on MSC ships.

Senior law enforcement officials from at least three countries approached MSc management and said, look, this is what the problem is. They had been told that their crew were being recruited by the Balkan cartel. And so from the point of view of law enforcement in Europe and ultimately law enforcement in the US, MSc had multiple opportunities to try and fix this problem before 2019 and didn't do enough to do that. MSC's view is that they did try and do things that would help curve this problem. In some cases, they put guards on some ships going from the east coast of South America to Europe.

They tried to find other ways which they could secure those logistical lines from traffickers. But their point mainly is that we were doing everything that every other shipping company was doing. There's an ongoing investigation based out of New York into the Balkan cartel and key individuals in the cartel. Recently, there was a breakthrough arrest in Miami. This individual was a former heavyweight boxer from the Balkans, and according to the indictment, he played a major coordinating role, helping to recruit sailors aboard MSC ships.

There are eight crewmen who were charged and ultimately pled guilty and are in federal prisons now. After the crew members were sentenced, it turned out the case wasn't entirely over. There was still the lingering question of, what responsibility does MSc have in any of this? And it turns out that there's a statute that says essentially, that if you're caught with any illicit cargo, in particular, if you're caught with cocaine, you will be fined $1,000 per ounce. Customs and Border Protection authorities added up all the cocaine, the 20 tons of cocaine, multiplied it by the $1,000 per kilo and came up with what their fine would be. It was over $600 million, the largest fine ever assessed against a commercial carrier.

The Guyanne was seized by U.S. officials during the course of the search and was detained for over a month. The Guyana is worth at least $100 million. But it's also, once you seize it, you take one of these massive assets out of the lineup of cargo ships that the company is using to move goods around the world. So it was a pretty shocking event for MSC. They reached an agreement with U.S. authorities to pay $50 million, which is essentially putting the ship out on bail. There's a civil case going on right now where there's an effort by U.S. authorities to show that that initial seizure should turn into a forfeiture.

In other words, MSC should lose the ship. MSC is arguing that they're not culpable. The U.S. government is arguing that, in fact, they are. And that case has the potential to really change the map for shipping companies. U.S. authorities really want to make an example of this case for not just MSC, but the shipping industry generally.

It's absolutely clear MSC wasn't itself as a company smuggling the drugs. The Balkan cartel was smuggling the drugs. But there is a question about how the company behaves as its infrastructure is being used and misused by drug trafficking. Even the most amount of money that a shipping company can spend on this, on guards and on cameras and on other technology like smart containers that can detect when a container is open, even throwing money at that, it's going to be very difficult to make a dent in this problem because you still have an enormous trade in cocaine.

Even though there were 20 tons of cocaine on that ship, it was just a fraction of the overall cargo. The cocaine was found in seven different containers. But that's seven containers out of 4000. It's a really, really, really hard problem to solve.

Drug Trafficking, Global Trade, Security Challenges, Business, Globalization, Technology, Bloomberg Originals