Train robberies in Mexico hark back to days of Jesse James – but with contemporary losses

By ANDREA NAVARRO AND NACHA CATTAN | Bloomberg | Published: July 28, 2018

Head southeast from Mexico City for about four hours and you will come upon Acultzingo, an impoverished, dusty town nestled against the rugged peaks of the Sierra Madre. Most inhabitants work the land for a living, growing corn and avocados and raising cattle and pigs.

They also rob trains. Lots of trains. So many, in fact, that Acultzingo is the train robbery capital of not only Mexico but arguably the world.

Over the past year alone, 521 crimes were committed against cargo trains in the town. And a chunk of those incidents bore no resemblance to the run-of-the-mill petty crime seen in the bigger cities of northern Mexico – vandalizing a train car or stealing railway signs. These were massive, choreographed affairs that often started with a low-tech trick that dates to the days of the Wild West – piling rocks up high on the tracks – and involved small armies of thieves who descended on the derailed cars in waves to cart off the loot.

They've swiped tequila, shoes, toilet paper, tires, whatever they could get their hands on. One particularly violent incident alone, which derailed dozens of train cars a few miles east of Acultzingo, saddled the railroad giant GMexico Transportes with more than $15 million in losses. And at Mazda Motor's offices in Mexico City, executives got so sick of hearing about how parts were being stripped from their vehicles that they started shipping some of them through the region by highway. Analysts estimate this tacks 30 percent on their transportation costs. (Mazda declined to provide figures.)

Security forces are so overwhelmed by the sheer number of attackers that a sense of impunity prevails in the area, said political-risk analyst Alejandro Schtulmann, who heads Mexico City-based consultancy EMPRA: "The problem is getting worse all the time."

The extreme lawlessness has led some Mexico observers to wonder whether the country is something of a failed state struggling to rule over the entirety of its territory. Homicides are at a record high, and kidnappings are on the rise. Reining this crime in, at least somewhat, will soon be the task of Andres Manuel Lopez Obrador, the populist leader who rolled to a landslide election victory this month in part on his pledge to restore law and order.

But the train-heist boom underscores just how tricky this assignment will be. The phenomenon really took off only recently, after federal authorities managed to crack down on another crime wave – in the fuel market – in the same area. As soon as some of the huachicoleros, as the gangs are known, were driven out of the stolen-fuel business, they shifted into train robbery, giving the whole thing a certain whack-a-mole feel.

"We saw a mutation in organized crime," says Benjamin Aleman, head of the country's railway regulator.

It can be a bit surprising to hear that professional train robbers still roam the Earth. Their heyday, of course, was the 19th century, when the likes of Jesse James and Butch Cassidy were marauding their way across the American West. A few decades later, the young caudillo Doroteo Arango – better known as Pancho Villa – terrorized railroad engineers on the other side of the Rio Grande.

The robberies largely faded into lore as trains got faster and harder to raid. Nowadays it's difficult to even track down the heist data in much of the world. But of those countries where it's available, Mexico reports the most, according to Sensitech, a subsidiary of United Technologies that monitors supply-chain logistics.

The outbreak is concentrated in southeastern Mexico – in Veracruz, where Acultzingo is located, and in the neighboring state of Puebla. All the ingredients are there: Poverty is rampant, the mountains provide natural cover, and a steady supply of cargo earmarked for export rumbles right through the heart of the region en route to the nearby port in Veracruz.

When gangs aren't stacking up rocks on the tracks, they're derailing the trains by sabotaging the brakes – a technique that can cause even more grisly car pileups and injuries. They've also started inviting the townspeople to partake in the spoils. This both earns their loyalty, experts say, and gains the bandits an added layer of protection against police officers and soldiers tempted to open fire.

Grainy video images taken by local media depict the same scene playing out over and over again: dozens of people storming a derailed train like a colony of ants while outnumbered officers look on helplessly.

It's easy to persuade locals to join in, Schtulmann said. Like the people who took up arms against the military in neighboring Chiapas state two decades earlier, many of them feel neglected by the politicians back in Mexico City. "Communities argue that the rich are getting richer and poor poorer," Schtulmann said, "so it's social justice."

For corporate Mexico, it's a growing headache. Eduardo Solis, head of the country's auto industry association, called the situation "simply unacceptable" at a press conference last month. Audi, which ships as many as 3,300 cars a day to the Veracruz port from its plant in Puebla, said the thefts have had a "big impact" on its distribution operations: "Every car we make has a client waiting for it."

No official estimates of economic losses have been roughed out yet, but Schtulmann said the costs can be seen in things like rising freight and insurance rates and the way that the government and railroad operators must spend more on security in the area.

Mazda's solution, shipping some cars by highway, may not prove a long-term fix. Enrique Gonzalez, head of Mexico's trucking association, was granted a July sit-down with Lopez Obrador in which he pressed the president-elect to appoint a special prosecutor to fight highway theft. The nation's fleet of trucks, Gonzalez said, is under attack day and night.

--With assistance from Bloomberg's Caleb Mutua and Rafael Gayol .

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