LBC tightens cargo checks

LBC Express Inc. has intensified its cargo inspection and security protocols in the United States and locally, the latter in coordination with the Bureau of Customs (BoC), following the seizure of P476 million worth of methamphetamine hydrochloride (shabu) concealed in three balikbayan boxes linked to the courier firm last July.

Rene Fuentes, LBC Express chairman and chief operating officer, said during a roundtable with the DAILY TRIBUNE that the company has since implemented stricter inspection measures to prevent a similar smuggling of contraband.

“We take this very seriously,” Fuentes said. “We do not want this to be abused. We are policing ourselves, as any responsible business operator would.”

Fuentes said LBC is mulling the installation of X-ray machines, each costing $100,000 (P5.9 million), in its warehouses, stressing the company is prepared to comply fully should the BoC require their use by all consolidators.

“If required by Customs, we will comply,” he said, noting that the investment would include staff training and dedicated personnel to operate the scanners.

LBC said it operates 10 warehouses in California alone, a scale Fuentes said highlights the potential cost of the technology across its global network.

For his part, LBC Express president and CEO Enrique Rey said, “We have zero tolerance for any form of illegal shipment and will continue to invest in security, compliance, and collaboration with the authorities to ensure that our network remains safe, reliable and accountable.”

“As a more practical measure, the executives of the logistics firm said they continue to rely on canine inspections, a system it has used locally since before the pandemic. Following the July shabu shipment, contraband-sniffing dogs have also been deployed in its US facilities at no pass-on cost to customers,” Fuentes said.

“The dogs check every single box,” he said, even as they have asked clients to submit identification cards and signed documents stating that no illegal items are included in the boxes.

“All of these are deterrents,” he added.

Fuentes pointed out that all air cargo shipments undergo 100-percent inspection under US Transportation Security Administration regulations, while sea cargo remains more challenging due to the volume and varying procedures.

He emphasized that LBC has always worked with government agencies in the Philippines and abroad because it shares the objective of stopping illegal shipments.

Locally, LBC said it has been assisting the Philippine Drug Enforcement Agency in “controlled” delivery operations to hold traffickers accountable.

In a separate statement sent to DAILY TRIBUNE, LBC said it remains “steadfast in upholding the highest standards of compliance, integrity, and safety” in its logistics operations and maintains a “zero-tolerance policy for the transport of illegal or prohibited items.”

In an earlier roundtable with TRIBUNE editors, BoC Commissioner Ariel Nepomuceno said the incident highlights the shared duty of law enforcement and logistics firms to prevent drug trafficking through balikbayan shipments.

Aside from the LBC-linked case, authorities earlier flagged P749.63 million worth of shabu hidden in boxes consigned to XYZ Global Express, illustrating what the BoC called a growing trend of drug syndicates exploiting balikbayan boxes.

Nepomuceno said smugglers rely on the political sensitivity surrounding balikbayan cargo and the volume of shipments, particularly ahead of the holiday season. He warned that enforcement efforts will be intensified despite expected public pressure to expedite box releases.

As the Philippine Stock Exchange sought clarification from LBC, Nepomuceno welcomed the “planned or ongoing operational improvements” of the courier.

“Fighting the smuggling of illegal drugs is a joint responsibility. LBC is a huge company and I am sure that they will protect their name with these operational upgrades,” he said.

“Regarding the market values of the illegal drugs that came through XYZ and LBC, yes, that should be clarified. Through XYZ it was P749 million. But P476 million worth of shabu that came through LBC was also a huge haul. The point should not be the inaccurate figures but the fact that these happened,” Nepomuceno said.

He said the BoC has asked US Homeland Security for tighter information sharing and technology support to address the vulnerabilities in foreign consolidation hubs.

The BoC said it will continue working with logistics firms to enforce safeguards while preventing delays for legitimate balikbayan shipments that Filipino families depend on.

Likewise, LBC said the discovery of the illegal drugs concealed in balikbayan boxes shipped by individual senders had “no material impact” on its business operations and financial position.

In a stock exchange disclosure on Tuesday, the company said its logistics and delivery services “remain fully operational” and stressed that the case was isolated.

“This isolated incident has no material impact on LBC Express Inc. and LBC Express Holdings Inc.’s operations or financial standing,” it said.

It said the boxes misdeclared as household goods were found to contain “two boxes of marijuana and two boxes of shabu,” all shipped by individual senders.

The company said it “had no prior knowledge or involvement in the concealment of these illegal materials.”

“At LBC Express Inc. and LBC Express Holdings, the safety and security of our customers, employees, and the public remain our top priority. We do not condone or tolerate any form of illegal activity,” the company said.