Shipper | Market updates 1 min. read
Mexico cargo theft is a pain point for shippers – what can you do to mitigate your risk?
Trailer Theft and Cargo Disappearance in Mexico has historically been one of the biggest pain points for U.S. shippers and their cross-border logistics service providers who are receiving international raw materials through Mexico and/or manufacturing in Mexico.
Nearshoring continues to amplify and trade between the United States and Mexico increasing at record rates.
In more detail, growth in trade between the U.S. and China was only at 2.5% in 2022 – while growth in trade between the U.S. and Mexico was at 17% in 2022 – resulting in over 35,000 shipments that are now moving across the U.S./Mexico border every day. As a result, cross-border risk management has gone from an afterthought in international distribution network optimization models, to the very heart and soul of every CEO and Risk Manager that participates in trade with Mexico.
Over 17,000 incidents of cargo theft are “reported” in Mexico each year. The word “reported” is emphasized because most thefts and cargo claims go unreported in Mexico due to the low liability limitation law.
Liability Law is SIGNIFICANTLY different between the United States and Mexico. In Mexico, liability is limited to an amount equivalent to 15 days of the minimum daily wage then current in the Federal District per ton. That translates to only about $1,250 in coverage for an average 40,000-pound trailer, when in the U.S., coverage is typically for at least $100,000.
The Hot Spots for cargo thefts in Mexico are the Non-Toll highways in Puebla, Tlaxcala, Jalisco, Veracruz, Guanajuato, Michoacan, Guerrero, and Nuevo Leon.
The state of Mexico led the list for most stolen tractor-trailer units with 1,945 cases. It was followed by Puebla with 757, Veracruz with 624, Guanajuato with 583, and Jalisco with 438 stolen tractor trailers.
The most common stolen commodities are fuel, auto parts (tires top the list), electronics, liquor, consumer Goods, and metals (steel tops this list).
What can shippers do to mitigate the risks of cargo theft in Mexico?
As one of the largest cross-border transportation providers, in Mexico for more than 30 years, Schneider works with Reliance Partners, the largest transportation and logistics specific insurance agency in the United States to help shippers mitigate the risks of cargo theft in the United States.
Reliance Partners’ Borderless Coverage program provides insurance and risk management solutions specifically for top cross-border motor carriers, logistics service providers, and shippers. Schneider partners with Reliance Partners in these areas to tackle cross border risk management pain points.
Hijackings and cargo disappearance can completely shut down supply chains, so shippers have come to Schneider and Reliance Partners for collaborative solutions. Woven into Schneider’s asset offering are key cross-border risk management tools that shippers need, which are difficult to get from even the most reliable logistics service providers. These items stand out most in Schneider’s cross-border offerings:
- When requested, Schneider through Reliance Partners can provide an All Risk Shipper’s Interest Cross Border Cargo Insurance INCLUSIVE of theft from the moment of pickup in Mexico until delivery in the U.S. (and vice versa and for Mexico only). This becomes your primary policy. It has low deductibles and provides you the coverage you need in Mexico as opposed to you relying on your global or self-insured policy that will have a high deductible.
- Schneider has the ability to offer real-time shipment tracking across all modes, which can include in cab, on-trailer, and in-cargo tracking options on all its shipments and recommends that all shippers opt in for this in Mexico.
- Dedicated capacity solutions allow you to contract Schneider’s equipment and drivers for your consistent, long-term routes.
- Intermodal capacity solutions are offered throughout the manufacturing belt of Mexico, which are more secure than truckload as the freight moves long distances without stopping and is often composed of two stacked containers on the railroad.
Schneider’s Mexico Risk Management team works closely with your risk management to define challenges, implement solutions, and adapt as supply chains adjust. If you’d like to learn more, start the conversation with us below.
Written in collaboration between Schneider and Reliance Partners.
Mark Vickers is the EVP and Head of International Logistics at Reliance Partners.
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