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Are You Evaluating Nearshoring for your Supply Chain

Published on
April 12, 2024 at 2:30:31 PM PDT April 12, 2024 at 2:30:31 PM PDTth, April 12, 2024 at 2:30:31 PM PDT

Nearshoring is a business tactic where a company relocates some of its operations to a neighboring country. This decision is often driven by factors like lower labor expenses, simplified logistics, and closer proximity. Nearshoring offers advantages over offshoring, such as easier communication, similar time zones, cultural similarities, and reduced travel costs.

Moving production from the U.S. to Mexico has emerged as an appealing cost-saving strategy for several U.S. organizations, but transporting goods across the border can bring additional theft risk and the need for extra security measures. According to Overhaul’s Mexico Annual Cargo Theft Report 2023, “During 2023, Mexico experienced 20,746 cargo theft events, representing an increase of 3.1% compared to 2022 and 4.4% over 2021.” Organized crime is responsible for stealing hundreds of millions of dollars of cargo in Mexico each year. It is important to note that these criminals often resort to violence in their operations.  Forbes reported, “The highest risk municipalities within Mexico State are Ecatepec (which reported 521 cargo robberies), Tlalnepantla (326), Naucalpan (323), Cuautitlan Izcalli (308) and Chimalhuacan (271.) The highest risk routes are the Mexico City-Queretaro highway, the Mexiquense Exterior Circuit, the Mexico City-Pachuca highway, the Mexico City-Puebla highway, and the Mexico City-Tulacingo highway.

In contrast to the region of central Mexico surrounding Mexico City, the border region reports considerably fewer truck hijacking incidents.

Together, the six border states of Baja California, Sonora, Chihuahua, Coahuila, Nuevo Leon, and Tamaulipas recorded just 108 incidents of violent truck cargo robbery during 2022, or 1.4% of the total number of incidents. Coahuila recorded zero hijackings in 2022.”

If your company is considering nearshoring in Mexico, consider the following strategies for mitigating cargo theft risks: 

Conduct Comprehensive Risk Assessments:

Conduct risk assessments before initiating any cross-border freight shipments. Identify high-risk areas along the route, such as known theft hotspots or regions with inadequate security infrastructure. By understanding the specific risks associated with each shipment, businesses can tailor their security measures accordingly. Confirm any carriers moving your freight within Mexico are utilizing high security locks such as the ENFORCER® and ABLOY®. Additionally, safeguard cargo at shipping facilities. Verify physical security is in place for dropped trailers such as heavy duty king pin locks and/or landing gear locks. These locations can be targets along with warehouses and distribution centers. 

Utilize Advanced Tracking and Monitoring Technology:

Investing in advanced tracking and monitoring technology is essential for enhancing cargo security during cross-border shipping. GPS tracking devices, RFID tags, and real-time monitoring systems can provide valuable insights into the location and condition of shipments throughout the transportation process. Maintaining real-time visibility into your shipments' location and control over that technology enables businesses to promptly identify and address security threats or irregularities. Consider implementing covert security measures, such as hidden tracking devices. Select providers who offer support after regular business hours.

Implement Door Security Best Practices:

Utilize heavy duty door locks and/or tamper-evident seals with seal locks. These can deter theft and unauthorized access to shipments. Criminals typically target trailers with insufficient or no visible security measures, making trailers with locks less attractive targets.

Establish Clear Security Guidelines:

When evaluating risk-mitigation in Mexico, it's crucial to choose a shipping partner that places a high priority on security. Many manufacturers commonly mandate specific security measures for their shipments. These standards may include the use of high-security padlocks and additional trailer door protection. Establish clear communication channels and protocols for reporting security incidents and coordinating response efforts in cases of theft or suspicious activities. 

Thoroughly Vet New Partners:

Effective collaboration with trusted logistics partners is essential for mitigating cargo theft risks in Mexico. Conduct thorough research and validate the experience of potential partners operating within Mexico. By fostering strong partnerships with reliable stakeholders, businesses can leverage their collective resources and expertise to enhance cargo security. Given the increased threat of hijacking in Mexico, your company may also consider working with companies that provide security escorts for critical shipments. Make sure to properly vet these organizations as well.

As businesses increasingly turn to nearshoring in Mexico to capitalize on cost-saving opportunities, it's important to recognize and address the risks associated with cargo theft. The prevalence of organized crime and the escalating levels of violence underscore the critical importance of implementing robust security measures throughout the supply chain. By prioritizing risk mitigation strategies, fostering collaboration with trusted partners, and leveraging advanced technologies, businesses can navigate the challenges of cargo theft in nearshoring environments more effectively. Ultimately, proactive efforts to protect valuable shipments not only safeguard business interests but also contribute to the long-term sustainability and success of cross-border operations.