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Transportation security in Mexico

Transportation security in Mexico

In this installation of Tecma Talk podcast. Erik Markeset, president of Mexico City-based Tsol Soluciones in Logisticas gives an overview of the present status of transportation security in Mexico.

In this installation of Tecma Talk podcast.  Erik Markeset, president of Mexico City-based Tsol Soluciones in Logisticas gives an overview of the present status of transportation security in Mexico.

Tecma Group of Companies:

Hello and welcome to another installation of Tecma Talk Podcasts. Today we have the privilege of speaking with Erik Markeset. Erik is a bi-natinal and bi-cultural individual who is based in Mexico City. He is the president of a company that is called Tsol: Solutiones en Logistica. The company is expert and concentrated in logistics solutions in Mexico. It is located in the Roma Norte neighborhood of Mexico City. Erik, how are you today?

Erik Markeset:

Fine. Thank you. How are you?

Tecma Group of Companies:

Fine, thanks. Erik, is there a verbal pronunciation for your company acronym Tsol, or do got by the letters “tsol?”

Erik Markeset:

Well, tsol is actually a Mayan word pronounced as “sol.” The “ts” is pronounced as one syllable. In Mayan, the word means “to organize and to fix.” The reason that I chose that name for the company is because I saw that a lot of companies in Mexico related to advisory services and technology often had names in English. I wasn’t comfortable with that. Even though I am a dual citizen, I wanted to have a name that was Mexican. Rather than choose Spanish, I chose Mayan, which is a living language in the Yucatan. I go there from time to time and found this word, which would have a double meaning of “technology solutions,” or “transportation solutions.” In English we say “tee-sol,” and in Spanish we say “tay-sole.”

Tecma Group of Companies:

That’s very interesting, and it’s an apropos choice of words from an interesting language. Could you tell us something about your background beyond your company.

Erik Mareset:

Sure. I am a dual citizen and a professional in the logistics field. I was born in the States, but was raised on both sides of the border and grew up in the States. I finished college in the US and was an Air Force officer for a while, and then went to business school and began working for an international consulting company. During the Internet bubble days, I was in San Francisco and worked for a company that was a start-up focusing on logistics and transportation management systems, which didn’t have much success back then. I then decided to come to Mexico, kind of on a whim and decided to set up shop down here. I arrived origninally to visit and ended up getting a job and starting a company. What we do at Tsol is provide services as consultants and systems integrators, we focus on supply chain, broadly speaking. We represent a couple of US and Canadian software solutions. We focus on warehouse managment systems, transportation management systems
and supply chain design. We also provide strategic services related to mergers and acquisitions in the logistics field. That’s what we do at Tsol.

Other than Tsol, I have a couple of non-profit activities. One of them happpens to be an association of which I am president. It is a chapter of the Council of Supply Chain Management Professionals, CSCMP, Roundtable Mexico. I have the priviledge of sitting on a board with logistics professionals and leaders in Mexico. Some of them are shippers and some of them are transportation logistics service providers. We have monthly events at which we discuss different topics that include everything from air cargo, to intermodal, to trucking. Through this organization and through the opportunity that it provides to interact with other logistics professionals, I have come across the issue of transportation security in Mexico, and it is an interesting and relevant topic. Another thing that is interesting is that part of what we do as a consulting firm is market research in the logistics field. We are currently working on a project That is related to crossborder transportation. I’m interviewing both Mexican and Foreign companies about what they see and what the issues are in crossborder transportation. In these interviews, the issue of transportation security in Mexico has come up several times. That is my exposure to the topic that you kindly invited me to discuss today.

Tecma Group of Companies:

That, in short, is supply chain security in Mexico. You are obviously involved and around and about a lot, and hear a lot of things from a lot of people from different places with respect to logistics topics in Mexico. We thought that the subject of transportation security in Mexico would be a good one to address because a lot of people have it on their mind when first think about going to Mexico and doing business and shipping there.

How would you classify the  security situation regarding logistics and transportation in Mexico in a general sense?

Erik Markeset:

From time to time I am invite to speak in the United States about logistics in Mexico. I was in Chicago at a couple of events recently. One was related to NAFTA and the other was related to third-party logistics. At these gatherings, one of the things that I do immediately is to address the question of transportation security in Mexico. The first slide that I present is one that shows an ugly picture from a newspaper, because it is invariably the first question that arises when people outside of Mexico want to have a discussion about the country. So, it is an issue, and it is unfortunate that we have it as an issue, but we have to address it. So what I discuss is, that from a personal perspective, there are areas of the country that are less secure than others. Mexico City is as safe a city as any large urban area, but we can’t ignore the fact that there are parts of the country that are having terrible situations.

When we talk about transportation security in Mexico, we have to make the distinction between organized crime and petty crime. What gets a lot of attention is the issue related to organized crime. That’s focused in particular states. Some statistics show that the greatest problems with organized crime in Mexico exists in states like Michoacan and Tamaulipas. Whereas in the rest of the country, we’ve got issues that are related mainly to petty crime. In fact, as statistic that I saw recently showed that the eighty-five percent of the theft that occurs in Mexico in this regard is linked to petty crime, while the rest is related to organized crime. Organized crime is harder to deal with in the context of transportation security in Mexico because it is trained professionals that need to be dealt with. Petty crime is the source of the vast majority of what happens. By that I mean that it consists of one or two people that are operating on their own and are not necessarily of a vast network. Petty crime is easier to deal with than is organized theft.

Tecma Group of Companies:

Petty crime is easier to deal with, because it is on a smaller scale, of course, but it would seem to me that in some ways it is more difficult to deal with because it is more random and less predictable. Would that be something that would be safe to say?

Erik Markeset:

It is probably more random, and, as a result, probably a little harder to predict.

You asked about what problems there are with transportation security in Mexico exist? I would say that they are real, but they are manageable. I remember riding in a car about three or four years ago with a friend of mine that owns a trucking company. He received a call that was a report that one of his trucks had been stolen. They found it in a market in Mexico City. About two years ago once of my cliens that is a very large food producer that distributes product to four hundred thousand mom and pop shops throughout the country that had an issue in the State of Michoacan. A Fritos or a Pepsi facility was attacked because it was believed that they were colluding with the government in trying to spy on organized crime. The issues are real in that sense, but they are manageable in that there are ways to address and minimize risk. That is what companies need to do. In Mexico it must be recognized that the risk does exist. Even though anecdotal evidence may seem otherwise, the statistics are small. The odds are in one’s favor. Nonetheless, prepare for the worst and plan for the best is the approach that one would take when it comes to
supply chain security.

Tecma Group of Companies:

You have narrowed in on a couple of places in Mexico where transportation security in Mexico may be more of a challenge for people that are not familiar with the country’s geography. In particular you mentioned the State of Tamaulipas, which is in the Northeast section of the country located on the Gulf Coast, and in the State of Michoacan.

Erik Markeset

Michoacan is the state that, right now, represents a trouble spot for Mexico and the Mexican government, because the State government has lost some degree of control to a criminal organization called the “Templarios.” Mexico’s government has had to come to intervene. That would be from an organized crime perspective. Michoacan is a problematic state.

I have a list here of other states that have issues. In the very heart of the country the State of Mexico or the Federal District has issues, as do the states of Jalisco and San Luis Potosi. Puebla, as well, has issues with transportation security in Mexico. I think that these, however, are more affected by petty crime rather than that of the organized variety. At the end of the day, however, to the victim it probably doesn’t make a difference if theft results from petty or organized crime. If you are held up, and goods are stolen from a truck, you probably don’t care who is doing the stealing. At the end of he day it’s bad news. I think that it is easier to take actions to prevent petty crime. If the source is organized crime, it is probably a well thought out operation, and probably harder to prepare for. If you are trying to develop a strategy against crime of either type, experts in transportation security in Mexico advise that eighty percent of the strategy should be designed around the idea of prevention, fifteen percent should focus on dissuasion and five percent should be centered on reacting to the situation.

From a prevention perspective, what companies do is to take a number of measures. For example, screening drivers is an action that is commonly taken. There is a company here in Mexico that has been a successful service provider in that area. It is called Recurso Confiables. They have grown a business around driver screening. In a lot of instances, the evidence suggests that there is collusion between the driver and the thieves. The one thing that you want to do is to make sure that the drivers that you have are properly checked. They do this by performing a socio-economic study. This consists of visiting the drivers house to examine how the person lives, where the person lives, as well as if they have a criminal record. Lie detector tests are administered, and interviews are conducted. All of this is done to make sure that the driver is trustworthy. This is a good example of a preventative practice that companies that want to enhance their transportation security in Mexico employ to minimize the risk of being a victim of crime.

Tecma Group of Companies:

You mentioned that eighty percent of actions that should be taken fall into the category of preventative, fifteen percent consist of dissuasion and five percent are reactive. Of the fifteen percent that you attribute to dissuasion, what is something that you would classify as belonging in that category?

Erik Markeset:

Dissuasion would include some technology solutions. There is a wide use of GPS. What struck me, when I started workng in Mexico ten or twelve years ago, GPS technology was relatively new. In the States, the point of using GPS would be to have visibility of freight, to know if it is en route and if it is going to arrive on time, and is often used in systems to optimize routes. In Mexico, however, the value proposition around the use of GPS is not necessarily having to do with optimization or visibility, but is knowing whether or not a truck has been stolen or is off route. This was interesting to me, and I understand that now. There are sophisticated providers of GPS systems that are designed to increase transporation security in Mexico that have electronic sensors around major highways. If a truck happens to deviate from its route, then a signal is sent to the company and to the dispatcher who could then activate whatever security measures that they have
in place, whether it is local police or some kind of private security firm that tries to contact the driver.

GPS helps both in that reaction element, the five percent, and also with the fifteen percent in that it’s presence and use is dissuasive. One would be hopeful that a thief would be less likely to hold up a truck that is subject to detection using this technology.

That is one example of dissuasion. Another one is cameras that are being sold and placed inside the cabin of trucks. This solution is not inexpensive, but, although we often associate the presence of security cameras with a building or in a home, in this case the security camera could be located above the passenger window pointing at the driver. In this way it would film a thief that would come up to a driver for the purposes of committing a crime. This camera would be in constant contact with dispatch through a satellite, or through a cell phone data network, and would be continuously sending informtion. A thief that comes up to a driver who has a camera pointed at him is less likely to go through with the crime. These are two examples of how we can use technology to try to dissuade a thief from targeting an asset.

Tecma Group of Companies:

After that explanation, I am going to put a plug in for one of the Tecma Group of Companies’s members. It is called Secure Origins. They actually offer the GPS model that you spoke of. One of the things that is interesting about it is that it goes a little bit beyond the GPS. Their system actually creates some kind of records that indicate when doors have been opened and closed in the cab and in the trailer itself, so that if anything has been opened before the time that it shoud be opened there is an awareness of that. One thing that you mentioned with respect to the use of GPS technology for enhancing transportation security in Mexico is that it is a deterrent to criminals. As I see it, it also serves as a deterrent to drivers that have not been properly vetted by
a company like the one that you mentioned. The driver is dissuaded by the fact that what he is driving carries the technology. There seems to be good benefits from that GPS technology coming from a number of different angles.

At the outset of this interview you spoke about the fact that the first question that you are asked when speaking outside of Mexico has to do with transportation security in Mexico. Over the last few years, we have seen drug violence diminish in intensity in the country. Do you see that same lessening of theft of material goods in the supply chain as compared to four years ago, or so, or has this always been a steady kind of proposition?

Erik Markeset:

I wish that I had some statistics handy. I think that it is a steady proposition. When you think of how officials have addressed the crime situation as regards transporation. Certain cities have done a good job, particularly around the border. I understand that Tijuana has done a good job, and even Ciudad Juarez has made improvements and gains. Both cities were under criminal seige, it seems for a while, but bothof those places seem to be under control. This is while other hot spots have emerged link Michoacan, Tamaulipas and some states in the center of the country. The problem seems to shift to one place from another. From a transportation/supply chain perspective, I would like to think that things have gotten better. This is due to the fact that the new government appears to be approaching the situation with some innovation, but transportation security in Mexico will continue to be an issue.

I’ll give you a quick personal perspective on the situation in general. To address the problem fundamentally, Mexico needs to make some changes to the way it executes justice. The last government thought that it could address this problem by putting the army in the streets, but that did not attack the root cause. We’re starting to see a recognition of the causes of the problem which have to do with everything from corruption on the municipal level to incredibly a slow and incredibly ineffective court system for prosecuting criminals. Despite this, the country is owning up to the problem. There are some very interesting discussions and articles on this topic. It is going to take some time before these things are resolved. For the time being, we need to think about the issues with transportation security in Mexico as a chronic illness. What supply chain professionals operating in Mexico need to do is to plan accordingly, and take measures to minimize
risks.

There are a couple of good companies out there that provide technology like Secure Origins, and there are also security services. I will mention one called Protectio. The reason why I mention them is that they sponsored one of our CSCMP events, and I am always willing to put in a good word for one of our sponsors of our non-profit organization. They offer supply chain service in terms of what we call in Spanish “custodios,” which are guards. Through them you can have a truck that has a security patrol right behind it. The result is that there are companies like this in Mexico that exist because the problem is with us. Finding the right one is important, because you want to make sure that you get a good one that is not colluded. Although the problem related with transportation security in Mexico is chronic, it does not need to get in the way of doing business in the country. I’m here because it is an exciting place to be from an economic, as well as a logistics perspective. It is a problem and risk that needs to be managed intelligently.
.

Tecma Group of Companies:

I think that you have helped us to get a bit of a handle on things. You have a website. It’s URL is www.tsolco.com. For those listening, if you have questions for Erik, you can contact him though the company website, or perhaps, by dialing the phone number that is listed on it. I believe that you mentioned that you had a U.S. number. Is that something people with questions can use.

Erik Markeset:

Yes, thanks to the Internet we have a US number. It is 443-321-3622. People can also use the email address info@tsolco.com. Pleae feel free to contact us with questions about logistics in Mexico, or where to locate operations, or with questions related to transportation and warehouse management. I’m happy to be of service, and honored to be a part of your series of Tecma Talk Podcasts.

Photo Credit: Jerry Huddleston

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