Cartel violence in Mexico may translate to reduced freight, some shippers warn

Cartel violence in Mexico could result in reduced cross-border freight operations, some logistics companies are warning. 

A military operation headed by the Mexican military and aided by the United States resulted in the death of a major Cartel leader in Mexico over the weekend. Now, logistics companies that work in cross-border freight are warning that the resulting violence may have negative effects on shipping between Mexico and the US. 

“The situation is impacting our ability to deliver and pick up cargo,” said a spokesperson for logistics firm Kuehne + Nagel to CNBC. “So far, we have not observed any issues at our main gateways (Felipe Angeles Airport and Mexico City Airport) for flight operations, but the situation will raise challenges with the delivery and pickup process to/from affected states.”

CH Robinson also reported changes in port pickup and dropoff.

“Road blockades have cut off some freight corridors, initially including the routes connecting the Port of Manzanillo to Guadalajara and moving freight northeast,” said Veronica Gonzalez, CH Robinson’s North America surface transportation Mexico director. “With many carriers unwilling to send drivers into parts of western Mexico, trucking capacity in the region tightened very quickly. We are not yet aware of any impacts to air cargo.”

“Anything touching western Mexico is likely to run behind schedule,” Gonzalez added. “From our 35 years of experience in Mexico, I’d say shippers should plan for delays through at least the first half of the week.”

Jordan Dewart, President of Mexico operations for trucking company Redwood Logistics also reports truck capacity tightening in Laredo and El Paso, Texas. 

When there’s policy noise and major events of unrest like we saw yesterday it creates uncertainty, and shippers tend to pull freight forward and carriers get selective,” said Dewart. “That compresses capacity quickly at the border and in country… If uncertainty continues, capacity could tighten quickly — cross-border doesn’t have a lot of slack.”