How are insurers responding?
The Mexican Association of Insurance has confided that a number of insurers will no longer insure cargo providers in Mexico because of the growing rate of cargo theft. The challenges of predicting loss is particularly acute when there is so little public data available. This is where we assess particular routes in question, the type of cargo and analyze the quantitative and qualitative risks to better predict where to prioritize on security spends.
Why is the security environment deteriorating again?
While we may not be seeing the gruesome killings of 2007-2011 that made major front line news across the globe, turf wars are still being fought across the country for control of key routes for drug and people trafficking. The detention of “El Chapo” in 2016 and subsequent extradition to the US in 2017 has led to significant weakening of the once dominant Sinaloa Cartel. Chapo’s power vacuum has led to internal conflict within the cartel, as well as a fight for control over swathes of the country where the Jalisco New Generation Cartel is flexing its muscles to gain control of key plazas (corridors).
How does this affect transport operations and facilities in Mexico?
The continued fragmentation of organized crime groups has given birth to small scale armed groups that operate independently, or fluidly align themselves to organized crime groups dependent on power structures. They use violence to protect themselves from other criminal groups and state authorities and rely heavily on income from extortion, cargo theft, kidnap and fuel theft. Small local transport providers are frequently targeted by such groups and are extorted or threatened into co-option/collaboration. The local authorities are often suspected of either colluding or turning a blind eye.
What does the road ahead look like?
The threat of cargo theft is not likely to decrease in the short term and we advise Clients to monitor their operations closely, ensuring best practices and due diligence programs are implemented with local business partners. As the election campaign begins in full force later this year, there are likely to be significant protests on major thoroughfares in the capital, Mexico city and state capitals. This could also affect business continuity plans and increase the risk of cargo theft as transporters are rerouted off main highways or stuck in long delays.