Logistics companies have warned that if the nationwide violent conflict in Mexico triggered by the killing of a drug lord leader continues to escalate, cross-border trade between the United States and this key trading partner will be severely impacted, and related routes and border freight operations will be at risk. Last weekend, Nemesio Oseguera Servantes (nicknamed "Mecho"), the leader of the Jalisco New Generation drug cartel, and other group members were killed in a Mexican military operation with the assistance of U.S. intelligence. The move led to violence in many places on Sunday and Monday, with public facilities being attacked.
Mexico is one of the United States' top trading partners, and trucking companies have begun reporting impacts on air and truck routes. The cancellation of flights to Mexico by major U.S. passenger airlines will also have a significant impact on freight - because by weight, approximately50% of air cargoOperated by passenger flights.
American Airlines canceled flights to and from Guadalajara, Mazatlan and Puerto Vallarta on Sunday. Southwest Airlines, Delta Air Lines (which also implemented flight diversions), United Airlines and Air Canada also canceled flights to the area.
A spokesman for the cross-border logistics company Kuehne + Nagel said that Guadalajara Airport was affected, and a large number of flight cancellations also included cargo flights in and out of the airport.
"The current situation is affecting our ability to deliver and pick up cargo." The spokesperson said, "As of now, there are no problems with flight operations at our main hubs (Felipe Angeles Airport and Mexico City Airport), but the cargo delivery and receipt processes to and from the affected states will face challenges."
In response to this violent incident, the U.S. State Department issued a shelter-in-place order for Jalisco (including Puerto Vallarta, Chapala, and Guadalajara), Tamaulipas (including Reynosa and other cities), parts of Michoacán, Guerrero, and Nuevo Leon. Violent conflicts have forced logistics companies including Kuehne + Nagel to arrange for employees in affected areas to work from home.
In addition to air freight, global logistics services provider CH Robinson said the security situation in western Mexico has affected container port pick-up and return operations.
"The road blockade has cut off some freight channels. The initial impact included the lines connecting the port of Manzanillo to Guadalajara and transportation to the northeast." Veronica Gonzalez, the company's director of land transportation for North America in Mexico, said.
The Port of Manzanillo, Mexico's busiest container port, briefly closed container incoming and outgoing operations. Despite reopening and resuming normal operations on Monday, blockades and arson continue to disrupt the flow of freight. The port is located on the Pacific coast of Mexico, with an annual throughput of more than 3.5 million TEUs, responsible for nearly half of Mexico’s container cargo transportation, and is also an important gateway for imported goods in Asia.
Gonzalez said violent conflict has also led to a decline in truck traffic on the U.S.-Mexico border. The average daily number of commercial trucks passing through the Laredo and Nuevo Laredo ports exceeds 20,000.
"Due to the reluctance of a large number of transportation companies to send drivers into parts of western Mexico, truck capacity in the region has been rapidly tightened. At present, we have no information about the impact of air cargo."
Logistics companies say they have on-the-ground crisis monitoring experience and can work with carriers and customers to adjust freight routes where possible. But logistics experts warn that even if cross-border trade continues to operate, roads at key border crossings including Laredo and El Paso will still face delays.
“All cargo involving western Mexico has a high probability of being delayed,” Gonzalez said. “With our 35 years of experience in Mexico, I recommend that cargo owners plan for delays in at least the first half of the week.”