NEW YORK – When a Mexican truck hauling 96 containers of cyanide was hijacked last May in Mexico, authorities on both sides of the border were concerned that a terrorist plot was about to unfold when they feared the truck had crossed the border into the U.S. Though all containers were found in Mexico, this story could have easily had a more disastrous ending.
To combat theft, hijackings and potential terrorist activity, Pinkerton Consulting and Investigations has teamed up with Safefreight Technology to provide transportation companies operating in Mexico a solution that offers 20/20 supply chain visibility and security.
Safefreight’s technology offers real-time theft deterrence and 24/7/365 tracking through satellite, cellular and radio frequency technologies to safeguard transportation and cargo assets. As the digital “eyes and ears” inside the trailer, this security system protects the freight trailer and its contents and immediately notifies pre-determined, key contacts should a security breach occur.
Pinkerton, a world-leading security firm, will use their security agents to provide continuous monitoring, and if necessary, respond to alarm-triggering events identified by the onboard security system. Their expertise in Mexico and in supply chain security will provide transportation operators in Mexico and authorities on both sides of the border with reassurance that reasonable steps have been taken to safeguard cargo, and perhaps more importantly, public safety.
“When I first saw a demonstration of Safefreight’s technology, I was convinced that it had considerable commercial application, and could possibly play a role in border and homeland security,” said Bonni Tischler, Pinkerton’s Vice President for Global Transportation and Supply Chain Security, and former Assistant Commissioner at U.S. Customs.
“We are thrilled that such a well-respected company like Pinkerton, with a long, successful history in a multitude of security-related enterprises, has chosen to partner with Safefreight,” said Curtis Serna, Safefreight’s founder and Chairman.
“The partnership is a win-win not only for us, but for our clients who prefer an integrated, turnkey approach to cargo security and tracking” said Barry Wilkins, Pinkerton’s Worldwide Director of Logistics Solutions. “This partnership provides state of the art cargo tracking and incident response capabilities.”
The two companies announced their partnership at the 2003 National Cargo Security Council conference in Nashville, TN.
Pinkerton is a private investigation firm, founded in 1850, and is a global leader in security consulting, investigations, and business risk services. Pinkerton Consulting and Investigations Inc. (www.ci-pinkerton.com) provides comprehensive solutions to critical business issues, including global supply chain security.
Safefreight Technology was incorporated in Nevada in 1998, and is a privately held corporation headquartered in Edmonton, Alberta, Canada. Safefreight (www.safefreight-tech.com) is an aggressive early stage company that provides fleet asset tracking and security solutions to global transportation supply chain clients and their partners.
Backgrounder: Cargo Crime and Hijacking in Mexico
According to a U.S. Department of Commerce assessment (Trucking Services, ISA ‘98/’99):“The lack of security on Mexican highways is, by far, the largest problem affecting this industry. The soaring cost of insurance is the result. Moreover, some insurance companies have refused to insure cargo. As a result, transportation companies and their customers lose business opportunities.”
Hijacking is a billion+ dollar industry in Mexico. There are no official statistics as to the actual amount of cargo loss. Various sources estimate the actual loss at a minimum of $5 billion annually.
Stolen goods are sold in the black market at discounted prices, tax-free. This unfair competition drives many retailers out of business. In short, hijacking impacts an estimated 7.5% of Mexico’s GDP.
The merchandise targeted for hijacking is based on disposability. The items hijacked most often, in order are: food, beverage, household goods and appliances; clothing; electronic equipment; auto parts and supplies; machinery; hardware and home improvement products; computers, accessories and software; music and video equipment and accessories; toys and sporting goods; novelty and gift items; office and school products. The above categories cover 80% of the stolen merchandise.
One half of all hijacking incidents in Mexico occur within a 100-mile radius of Mexico City. The majority of the others occur within a striking distance of major population centers, such as Monterrey and Guadalajara, where the black market fence network is concentrated.
Another industry has evolved and mushroomed in the fight against hijacking. There are over 9,000 firms providing ride-along escort services. These firms provide armed escorts that accompany the driver in the cab. This private police security is expensive, and often not very effective, as the hijackings continue.
Insurance sources say that since 1999, there has been an exodus of insurance companies providing cargo insurance against theft.
According to AMIS, the Mexican Association of Insurance Companies, there were approximately 5,000 hijacking claims in 2001 filed against the insurance companies. Based on Mexican Justice Department statistics (PGR) there were 11,826 such complaints in the same period. The disparity illustrates the lack of insurance availability.
When insurance is available, the premium and the deductible is so high, and the conditions for filing a claim so difficult and costly, that as a practical matter, insurance is often not purchased.
According to El Economista (issue 2/12/02) a fleet of 20 heavy cargo trucks will pay $5,000 ($50,000 pesos) quarterly for liability insurance and 3X the amount, $15,000, for open ended (negotiable deductible) cargo insurance, when available. Accordingly, the vast majority of shippers self-insure.
Insurance sources say that approximately 85% of all theft is the result of insider participation, including inside informants, drivers, escorts and highway police. The black market supply cartel is highly organized and concentrated in ‘protected’ territories.
Criminal organizations rely on tips identifying the contents of the cargo and the shipping schedule and itinerary. The organization then selects alternative isolated locations where the truck may be escorted for unloading. The selection is made primarily on the basis of co-operating (compromised) highway enforcement agencies.
Once they reach their target destination, the hijackers slow the transport and pull aside the driver, directing him at gunpoint to follow their orders. A group of small vans and trucks pull alongside the trailer, which is forced open by whatever means are necessary, including explosives. The vans are loaded, the cargo accounted for and then delivered (often within hours) to the flea market retailers, who form part of the fencing operation. The merchandise is sold in the black market in an average of three days from the date of the hijacking. Neither the drivers nor their escorts are harmed, since they always cooperate with the armed thieves. The trucking personnel, including the escorts, are released, as well as the undamaged truck and trailer.