Members Spotlight
THE LOGISTICS BACKBONE OF THE PRECIOUS METALS INDUSTRY

By SBMA

The efficient and secure movement of precious metals is foundational to the industry’s operations. This intricate process relies on specialised logistics providers who navigate complex security protocols, regulatory landscapes, and global supply chains.

In this issue’s Member Spotlight, Crucible turns its attention to three titans of this crucial sector: Brink’s, Loomis and Malca-Amit, examining how their unique capabilities underpin the daily functioning of the precious metals ecosystem, from mine to market. Their insights reveal the intricate strategies employed to ensure security, facilitate global connectivity, drive efficiency, and adapt to the evolving demands of this high-stakes industry.

The Indispensable Link: Enabling the Supply Chain

The precious metals supply chain is a complex web involving extraction, refining, manufacturing, and distribution, each stage with distinct logistical needs. Specialised providers are essential to navigate these complexities. Brink’s highlighted this, stating that “valuable cargo logistics places specific requirements… demanding bespoke processes and procedures” with rigorous auditing at every touchpoint – a level of specialisation most general logistics firms cannot provide.

This necessity is echoed by Malca-Amit, who see themselves as “facilitators and enablers” for the entire ecosystem, providing the tailored infrastructure crucial for seamless cross-border operations. Loomis further emphasised the need for robust security measures and expertise in navigating stringent regulations and compliance requirements, highlighting the fundamental reasons why specialised providers are indispensable.

These services directly enable the industry’s various players. Brink’s global footprint facilitates the movement of materials from “dore from mines in Africa and Australia to finished gold from Switzerland to India, and jewellery from Mumbai to the high streets of Europe”, effectively supporting the integrated supply chain “from rock to ring”.

Similarly, Loomis International ensures the secure transit of raw ore from mining sites to processing plants, and supports manufacturers with efficient just-in-time delivery systems. Malca-Amit’s door-to-door secure logistics and vaulting services are integral across the board, ensuring the integrity of the supply chain for refineries, bullion banks, and beyond. These examples illustrate how the specialised capabilities of these providers are not merely a convenience but a fundamental requirement for the industry’s smooth operation.

Guardians of Value: The Bedrock of Security and Trust

Given the inherent value of precious metals, security is paramount, and logistics providers operate as the industry’s first line of defense against both physical and digital threats. Brink’s acknowledged the constant risk from bad actors, stressing the need for proactive countermeasures and “integrated security programs” where every link in the chain is fortified.

Malca-Amit is confronting this dual challenge by investing in both “highly trained personnel, secure transport, and state-of-the-art facilities” alongside robust advanced cybersecurity measures. Their emphasis on collaboration with industry partners and local authorities highlights a sector-wide understanding of shared responsibility in mitigating risk. Loomis reinforces this layered approach, employing a “proactive security framework that combines people, processes, and technology” to address the unique vulnerabilities associated with high-value, portable assets.

Building and maintaining client trust is inextricably linked to this security. Brink’s pointed to their core values, emphasising “integrity, transparency, and proactive communication” as key to fostering reliable partnerships. Malca-Amit emphasised the long-term nature of trust, built through “consistency, discretion, and performance,” underpinned by transparent operations and comprehensive audit trails. Loomis highlighted their “proven security track record, transparent operations, regulatory compliance and ethical standards” as crucial in assuring clients of their unwavering commitment to safeguarding assets. This focus on trust and security underscores their role not just as transporters but as custodians of value.

Staying ahead of evolving threats demands continuous adaptation. Brink’s emphasised collaboration with trusted partners and a comprehensive “global approach to risk management.” Malca-Amit prioritised ongoing investment in “state-of-the-art security technology and proactive training,” coupled with vigilant monitoring of global threat landscapes. Loomis succinctly states the necessity of “constantly adapting, learning and evolving” in the face of increasingly sophisticated challenges.

Bridging the Globe: Connectivity and Efficiency

The global nature of the precious metals trade necessitates sophisticated international logistics networks capable of ensuring both reach and efficiency. Brink’s leverages “integrated logistics systems” in its global network, optimising airline partnerships and employing “real-time tracking technology” to ensure seamless movement.

Malca-Amit’s “globally integrated network”, coordinated through a central platform, facilitates agility across diverse markets. Their efficiency stems from “meticulous planning, local expertise, and proprietary logistics technology”, alongside strong relationships with customs authorities. Loomis, with its ability to operate across over 120 countries via a multimodal approach and strategic partnerships, prioritises not just speed but “secure, compliant, and timely delivery with zero margin for error”, highlighting the critical balance between swiftness and security in this sector.

Navigating the complexities of international trade and customs regulations is a core competency for these providers. Brink’s streamlines this process through their global network and compliance expertise, often insourcing customs clearance for greater control. Malca-Amit relies on their in-house compliance and regulatory teams to stay abreast of evolving international laws, ensuring smooth clearances through meticulous documentation and close collaboration with local regulators. Loomis emphasised the need for “deep regulatory knowledge and strategic partnerships”, employing dedicated compliance teams and advanced pre-clearance protocols to navigate the intricate web of global trade requirements.

Looking to the Future: Innovation and Adaptation

The precious metals logistics sector is not static, with technological advancements and evolving industry demands driving continuous innovation. Brink’s is actively integrating technology across their operations, focusing on advancements in transportation, security, and IT infrastructure. Malca-Amit has responded to the industry’s increasing need for transparency by developing client-facing platforms like MyMalca, providing real-time visibility. Loomis has incorporated technologies like real-time GPS and various sensors for enhanced tracking and utilises integrated platforms for customs APIs and compliance automation.

Sustainability is also gaining prominence within the industry. Brink’s is focusing on fleet modernisation and engaging with airline partners committed to sustainable practices. Malca-Amit’s “Go Green campaign” demonstrates a commitment to reducing their environmental footprint through initiatives like electric vehicle adoption, while Loomis is implementing comprehensive ESG strategies encompassing carbon reduction, sustainable packaging, and green operational practices.

Looking ahead, Brink’s anticipates a sustained demand for high-quality logistics, necessitating ongoing investment in their global infrastructure. Malca-Amit sees a future characterised by even greater demands for transparency, speed, and the convergence of physical and digital asset handling, with sustainability as a fundamental expectation. In this environment, Loomis said it is taking a cautious yet progressive approach to innovation, emphasising thorough testing before widespread adoption.

The specialised expertise of logistics providers like Brink’s, Loomis and Malca-Amit forms an indispensable pillar of the precious metals industry. Their ability to ensure secure transit, navigate complex global networks, drive operational efficiencies, and adapt to future challenges is crucial for the continued success and integrity of the sector. As “Guardians of Gold,” they are not just moving precious commodities; they are safeguarding value and enabling the intricate flow of the global precious metals trade.

NICHOLAS FRAPPELL is the Global Head of Institutional Markets at ABC Refinery. He has extensive experience in precious metals trading, having worked in London, Tokyo, Singapore, Hong Kong, and Sydney. Nick holds a Masters in Finance from the University of London and is the Chair of the LBMA membership sub-committee. He also co-hosts the ABC Refinery “Pod of Gold” podcast and will speak at the 7th APPMC 2024 Conference on the Precious Metals Price Outlook Panel.