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Cartels & Cargo: Logistics Security in Mexico
First published: January 2023
Danny Ramon
Intelligence & Response Manager
As a major base for manufacturing, Mexico is an important link in the global supply chain of many major companies. Multinationals in the automotive, textile, aerospace, medical, electronic and appliance industries in particular rely on Mexico for a significant portion of their manufacturing capacity, particularly in servicing the huge consumer market of the United States.
Due at least in part to this, Mexico is also one of the worst countries in the world when it comes to cargo theft - particularly violent hijackings - which have been increasing even further in recent years. From 2015 to mid 2022 almost 62,000 hijackings were reported, with over 3,700 in the first half of 2022 alone - a 4.9% increase on the previous year. What makes this even more concerning is that these figures are likely an underestimate of the true scale of the problem. Aside from direct cargo theft Mexico is plagued by levels of violent crime, driven by the illegal drugs trade, that can often spill over and cause additional, unforeseen challenges for supply chain security.
As a major base for manufacturing, Mexico is an important link in the global supply chain of many major companies. Multinationals in the automotive, textile, aerospace, medical, electronic and appliance industries in particular rely on Mexico for a significant portion of their manufacturing capacity, particularly in servicing the huge consumer market of the United States.
Transport Infrastructure
Cargo transportation in Mexico is dominated by road haulage, with only around 13% of freight moving by rail. Approximately 35,000 trucks are estimated to cross the US-Mexico border each day via 28 international crossings and bridges, where delays due to congestion and security checks make the average crossing time three hours. Where international rail is used, about 75% crosses into the US via the crossings of Piedras Negras or Nuevo Laredo.
Despite its importance, only around 44% of the Mexican road network consists of modern, paved roads. The rest are either of low-quality coated or unmetalled routes. Most freight however moves along the federally-administered highways, or Carreteras Federales, which link the major cities and ports.
Maritime infrastructure consists of over 30 international cargo and passenger ports on both the Pacific and Gulf coasts, with plans to expand the capacity of some of them significantly. Maritime cargo volumes grew significantly during the Nieto administration from 260 million tons in 2012 to 317 million tons in 2018. Of these ports Manzanillo is the largest, handling 3.37 million TEUs in 2021, followed by the Port of Lazao Cardenas just down the Pacific coast with 1.69 million TEUs. The Port of Veracruz, whilst the fifth largest port, handling 560,000 TEUs in 2021, is an important port given its relative proximity to Mexico City and the central manufacturing hubs.
As well as plans for port expansions there are a number of ambitious projects aimed at improving Mexico’s infrastructure, with 39 projects announced in 2020 as part of the Economic Reactivation Agreement. Most notable though is the Trans-Isthmus Interoceanic Multimodal Corridor (CIIT), which dates to 2019 and aims to create a transportation corridor between the ports of Salina Cruz and Coatzacoalcos by revitalising rail infrastructure, expanding the existing highway, expanding and modernising the port facilities and creating development zones along the route. The CIIT is expected to open by the end of President Lopéz Obrador’s term in 2024.
Approximately
35,000
trucks are estimated to cross the
US-Mexico border each day via 28
international crossings and bridges
44 percent
of the Mexican road network consists
of modern, paved roads
The most common cargos stolen in Mexico are freshfood produce and other foodstuffs, followed by construction materials, auto parts and electronics – goods that are difficult to identify or track and easy to sell on. Many of the stolen goods can easily be sold on the black market within Mexico itself, and can often be found being sold openly by street vendors with a significant reduction on retail prices.
The issue is exemplified by the fuel theft industry in Mexico; although the vast majority of thefts of petrol and LNG are by taps on pipelines rather than
hijackings, the stolen fuel is sold openly at one of the country’s many illegal Cachimbas fuel stations, which outnumber legitimate businesses by four to one.
Although the current government has cracked down and significantly reduced the levels of petroleum theft, thieves simply moved to stealing LPG which they continue to sell openly with apparent impunity.
The story appears to be similar with consumer goods. Cargo theft, particularly violent hijackings, is an issue across all of Mexico but there are a number of clearly
identifiable regions where the majority of robberies happen. While robberies in the Northern states near the US border are comparatively rare, with Nuevo Leon experiencing the most, they are nothing compared to the number of hijackings further South. The State of Mexico is by far the most dangerous state for cargo theft, followed by Puebla and Michoacan. Available data can be even more specific, showing that 75% of all hijackings occur on just ten highways and of these 18% take place on highway 150D between Veracruz port and Mexico City. A further 11% on highway 57D from Mexico City to Saltillo, and 10% on the 15D from Mexico City to Hermosillo.
Cargo thefts also occur in supposedly secure port areas, although hijackings remain the main method of robbery. A high profile incident in June of this year saw a gang of ten armed men break into the port facility at Manzanillo, where they subdued the staff and then searched for their target containers. In an operation taking hours they selected and stole 20 containers, containing partly-refined gold and silver ore and televisions. It was later reported that the containers actually held tyres and air-conditioning units. Whatever the contents, the fact that the robbers could go unchallenged for such a length of time speaks to the impunity with which they sometimes operate.
Violent Hijackings
Estimates vary, but between 87% and 96% of hijackings in Mexico are violent. They are also well planned and executed. Robbery gangs are known to carefully surveill targets, routes and market demands, often following a truck for many miles from its departure point or even using drones to identify targets at choke points like toll stations on major highways. These teams are aided in their targeting by what is thought to be a high degree of insider threat from dispatchers or warehouse workers alerting them to the contents of departing trucks. The robbery itself may be carried out by an assault team separate from the surveillance team and is more often than not violent. A team usually consists of 6 – 8 well- armed men equipped with signal jammers to prevent distress calls or vehicle tracking signals. They bring the target to a halt by firing shots at the cab or blockading the route. The drivers are then often assaulted and sometimes killed, implying that the insider threat does not generally extend to them. The cargo is then either transferred to a waiting vehicle, the trailer reattached to a waiting truck, or the entire rig stolen and unloaded later in another location.
Thousands of trucks are stolen each year in Mexico – more than 7,000 in the year before March 2022. While around 60% are recovered, the rest are either torched or taken directly to underground scrap yards, often located close to major transport routes, where they are quickly stripped for parts.
Cartel Involvement
Cargo hijackings in Mexico take place against a backdrop of extreme criminal violence, with well over 30,000 murders being reported annually. Much of this violence is due to Mexico’s status as a drug producing nation and a major conduit for South American drugs into the United States. This drug trade is controlled by the cartels, which are constantly splintering apart and reforming, changing
alliances and warring with each other for control of territory. Broadly speaking this violence can affect logistics in two ways – as spill over from cartel conflicts affecting national transport routes with so-called narco-blockades or as the cartels diversify
their operations into other forms of crime such as cargo theft.
Wars between cartels have reached new heights of violence and technological sophistication in recent years. In the state of Michoacán an alliance of smaller local cartels – paradoxically supported by state police – are at war with the powerful and
ubiquitous Jalisco New Generation Cartel (CJNG) for control of territory, business interests in the mining and agricultural industries, and control of the port of Lázaro Cárdenas. The war is being waged not just with firearms but suicide drones and homemade armoured vehicles of increasing sophistication known as “monsters”. The violence reached a point that in 2021 the government was forced to intervene, sending 17,000 troops to the region to combat the CJNG. This is an example of the cartel tactic of calentando la plaza or “heating up the plaza”, where one cartel engineers the intervention of state forces against their enemies by exercising a scorched-earth policy as they lose territory by destroying property and displacing the population. Another cartel tactic that can impact logistics is the so-called narco-blockade. These blockades involve the blocking of transport routes, often by torching stolen vehicles, and sometimes ambushes on government forces, arson attacks on businesses and random killings. These blockades often erupt as a form of protest after the arrest or killing of senior cartel figures by the authorities. In March of 2022 the CJNG blocked roads around the city of Cuauhtémoc in Colima with burning vehicles in response to the arrest of a local commander, causing business and school closures. The police maintained that the road closures were due to accidents.
Direct cartel involvement in cargo crime itself appears to have been confirmed in September 2020, when members of the CJNG accused the Sinaloa Cartel of being involved in the theft of a load of cigarettes. Cartel involvement makes sense for a number of reasons. Most compelling is the fact that the cartels also rely on the road transportation network to move their own cargoes of illegal drugs and precursor chemicals. Interference with these shipments by robbers would not be tolerated, and even if the cartels do not themselves engage in a theft they are in a good position to regulate the activity of smaller criminal groups. Indeed, many of the routes where hijackings occur run through the various cartels’ territories and strongholds. It also helps to explain why comparatively so few robberies occur in the Northern states approaching the US border. Where they are directly involved, cargo theft and the sale of stolen goods would fit with the broader movement by cartels to diversify their operations away from just the drug trade and capitalise on other sources of criminal revenues.
As well as being an important part of logistics in Mexico, ports are also vital to the criminal infrastructure. Control of a port needed for both moving drugs including cocaine and fentanyl, and importing large quantities of precursor chemicals from Asia for the production of methamphetamine. As a result, a port has been a major objective in some of the cartel conflicts we have seen in recent years, and cartels have a presence in every Mexican port. Control of Lázaro Cárdenas is a factor behind the violence in Michoacán, while in Colima the CJNG took control of the port of Manzanillo following a bloody battle with Sinaloa Cartel and elements of Los Zetas in 2016 that saw the local murder rate rocket upwards in from 2015.
Security Measures
Despite such a challenging security landscape, Mexico will remain a vital link in countless supply chains. Unfortunately, the levels of violent crime, corruption and hijackings in the country will also remain despite the efforts of the often-overmatched government. As such private companies must take all reasonable measures to ensure their own security and that of their cargo. Practical cargo security measures like a resilient tracking capability, staff background checks and effective response needs to be combined with an awareness of local security dynamics, from ongoing criminal conflicts and their potential impact to tactical level information of incidents that can affect transportation routes and infrastructure. Driver awareness and constant communication with dispatch or a remote monitoring center allow for a quick reaction in the event of a theft, and a network of capable responders is essential to enact a successful recovery.
