Cargo crime on the rise in Mexico

Late last month, the Department of Homeland Security issued an alert to all C-TPAT (Customs-Trade Partnership Against Terrorism) members about growing numbers of drug seizures at the U.S.-Mexico border. What is troubling about the drug seizures to C-TPAT members, however, is that the narcotics were found hidden in shipments of commercial goods.

According to Sam Logan, regional manager of Latin America for risk management services firm iJET, issues pertaining to cargo theft and cargo contamination have been on the rise in Mexico since 2005 when the government decided to crackdown on drug cartels in the country.

"Since President (Felipe) Calderon has promoted a bull-by-the-horns approach to taking out Mexican drug traffickers, the profits that (the drug cartels) saw from drug trafficking have gone down," Logan said. "As that has happened, we have seen groups, specifically the Zetas and the Sinaloa Federation, look for other ways to make money and one of the ways to do that is by simply stealing these cargo containers."

Logan says the types of shipments most often targeted are those that can be fenced easily on the black market, such as cigarettes, DVDs and video games. Mexican cargo thieves have also been known to target pharmaceutical shipments and other large, high-value electronics like televisions.

With regards to cargo contamination and the stashing of drugs in consumer goods, Logan said that plant workers usually have a hand in hiding the drugs. In one incident, Logan says workers at a television manufacturing site hid bricks of marijuana inside the TV sets and then placed them inside a specific container where they could be shipped across the border and disassembled at a later time.

Despite the DHS' warning about these types of incidents, however, Logan said that he hasn't seen as many cases of contamination occurring as he has cargo theft. The FBI estimates that U.S. businesses lose more than $10 billion in merchandise a year to cargo theft. According to a recent report from FreightWatch International, Mexico along with the U.S., Brazil, South Africa, Russia and the UK are the most at risk countries for cargo thefts.

The report further states that Mexico has seen an average of 1,500 hijackings per year for the last five years. It's estimated that 90 percent of cargo crime committed in Mexico is aided by driver or employee collusion.

"Generally speaking, there is someone on the inside who tells the (cargo thieves) the route of the truck, what's going to be inside of it and so on," said Logan. "The intelligence that these guys gather before they hit a truck is often times surprising in terms of how much they know, such as the routes of the driver and areas they can go to avoid GPS detection to offload the truck."

Despite a rise in drug violence, Logan says that the northern part of Mexico tends to be a little bit safer than the south in terms of cargo theft. In addition to areas along the Mexico City-Laredo, Texas corridor that have been targeted by cargo thieves, Logan says that Michoacan, Sinaloa, Durango, Veracruz and Tamaulipas have also been hotbeds for cargo theft.

Though the task may seem daunting, the fact remains that business have to still make and ship their goods through Mexico. While traditional security methods, such as installing GPS in the cabs of trucks and employing private security companies to watch over shipments remain popular, Logan and other experts say one of the most effective ways to mitigate risks is to join the DHS' C-TPAT program.

Led by the U.S. Customs and Border Patrol, C-TPAT is partnership between the government and private sector to ensure the safety of global supply chains. C-TPAT requires that companies protect cargo containers as they are loaded on foreign soil using a variety of security methods. Though the process to become a C-TPAT member may be rigorous, the benefits, which include less wait times at border entries and increased security, are well worth it, according to Logan.

In addition to joining C-TPAT, Luke Ritter, principal, global trade security for security consulting firm Ridge Global and author of the book "Securing Global Transportation Networks," says that companies need to make sure who they are doing business with.

"Make sure you are not injecting risk into your own processes by doing business with entities that are either unknown to you or one that is known to be risky, but you have made a decision for whatever reason and continue to do business with them anyway," he said.

Ritter added that technology can also be useful in warding off cargo theft and cargo contamination.

"There are always advancements being made in tracing and tracking technology, as well as cargo scanning technology," he said. "I think investigating and pursuing technology tools that can help mitigate risk would be very effective if properly implemented."

The Mexican government is also taking steps to help improve security for shipments in the country. In the state of Chihuahua, Logan says that the state police have established industry cops that focus on protecting workers and securing transportation routes in the area. Though the program is only currently in Chihuahua, Logan says that he could see it expanding to other areas in the country.

Many companies have also established close relationships with state police in the areas where their goods are made and shipped.

"These are the guys that are not only going to help with information in terms of knowing the paths where cargo has been hit and what people can do about it, but they are the ones that are going to help you find your (goods)," Logan said.

Ray Fernandez, vice president of Sealock Security Systems, which manufacturers security devices for cargo containers, says that it's time for companies to backup their rhetoric when it come to securing cargo.

"My advice to (shipping companies) is to take these matters very seriously," he said. "Following the letter of the law is not quite the same as following the intent of the law. A lot of companies like to talk the talk, but when it comes to walking the walk, they try to get the most benefit from the least expenditure and that is not always the best way of approaching (the problem)."