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Despite the danger, U.S. companies can't afford to ignore Mexico
Wayne Risher - commercialappeal.com
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November 9, 2011
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Tom Kaden, vice president at Mallory Alexander International Logistics, discusses logistics and transportation issues with Mexico during the Memphis World Trade Club's luncheon on Tuesday. Photo: Mark Weber.

Cautionary tales of truck hijackings and drug war crossfires left Nick Whitten more than a little uneasy about future business trips to Mexico.

The Cornerstone Systems salesman's takeaway from a Memphis World Trade Club presentation Tuesday on logistics and trucking in Mexico?

"It kind of sounded like they were trying to talk you out of doing business there," he said.

The association of transportation, warehousing, freight forwarding and other trade professionals also heard Tuesday from Tom Kaden, vice president at Mallory Alexander International Logistics, and Roy Delao, vice president international at United Warehouse and Terminal Logistics.

Cornerstone Systems executives were there because they're crafting a supply chain to furnish chemicals to a Kimberly Clark paper mill in Mexico.

Kaden's war stories included rampant truck hijackings, armed guards protecting truck convoys and proper planning of an escape route in the event of a public assassination.

"It's dire straits, quite frankly," said Kaden.

While 2 percent of truck hijackings in the United States involve armed force, Kaden estimated 65-100 percent of Mexican hijackings are conducted at the business end of a gun. He cited estimates by the Mexican trucking industry's chamber of commerce that 10,000 trucks were reported hijacked in 2010.

Mallory Alexander has had operations in Laredo, Texas, and Mexico since 1998. It maintains warehouse space in Laredo and has 800 trucks a month crossing the Mexican border.

Kaden said new Department of Transportation rules on cross-border trucking aren't likely to lead to more American truck drivers venturing into Mexico.

The first Mexican trucker with dual-country credentials crossed the border Oct. 21. "That will probably increase and continue," he said. "To me, it's kind of a one-way deal. I don't think you're going to get an American driver and you'll say, 'Here are the keys. Don't get shot.' "

Kaden recalled ducking into a women's bathroom to escape the aftermath of a drug gang assassination in a restaurant where he was dining with a customer.

He said a friend wrestled a gun out of a would-be hijacker's hand at a toll station, and credit card thieves swiped Kaden's card and tried to buy $5,000 in office furniture at an Office Depot.

Kaden and Delao agreed that intermodal transportation, a combination of train and truck, could be a safer, more cost-effective option of serving Mexico. However, Kaden said train-related security incidents occur an average of 4.5 times a day.

Despite the dangers, Delao said American companies can't ignore Mexico. "A country like Mexico presents a lot of opportunities for foreign investment. There are at least 18,000 U.S. companies doing business in Mexico."

Companies like Cornerstone have to figure out ways to ship and warehouse goods safely, securely and profitably.

"It's exciting," Whitten said.

+ Wexico http://news.wexico.com/business/09nov2011/despite-the-danger-us-companies-cant-afford-to-ignore-mexico.htm

-- Wayne Risher: (901) 529-2874


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