Josh Treviño regarding the Mexican cartels:
“It is evil Amazon, really. They’re logistic firms with small armies attached that will profit from whatever they can and increasingly take on the characteristics of insurgency.”
I think the Amazon comparison is apt, but Treviño pulls up a bit short because it’s more than just logistics. Amazon has proven to be a master of leveraging existing capabilities in order to exploit new markets. There is of course its e-commerce transformation from an online bookstore to selling just about everything under the sun. Then there was its leveraging the last-mile delivery and now using its expertise in data centers to develop AWS and enter the AI market.
The same with the Mexican cartels. What started as smuggling routes for Colombian cartels needing to send product into the US has now evolved as the Mexican cartels leveraged that capability into a wide array of international supply chain services from drugs to people and avocados. In addition, the cartels have used the cash flow from those endeavors to prevent the local government from exerting sovereign control over both vast swaths of Mexico and the country’s northern border. This “liberated” geographic area then becomes the new base for launching additional products and services with foreign partners such as the Chinese and drug labs.
The focus on the Biden Administration’s refusal to defend the southern border has been on the impact of illegal immigration. However there is an economic dimension in that with the cartels taking over the Mexican-side of the border, the Biden Administration has allowed a parallel free-trade zone of the black market type to emerge along side the traditional USMCA. Just as CEMEX and Alfa leverages the USMCA and ts proximity to the US market, so do the cartels take advantage of the free trade zone offered by the Biden Administration to enter the US as well. The wealth of the US market and easy entry into it spurs their growth.
The problem is what new markets the cartels will seek to enter next given both its cash flow and competencies in supply chain, violence, and political subversion. Note these competencies are synergistic. By controlling the Mexican side of the border and the trade in human trafficking, the cartels can dictate where and when to surge “traditional migrants” in order to overwhelm the Border Patrol, forcing American law enforcement to pull resources from other border sectors. These now lightly guarded of the border sectors become prime avenues for the “gotaways” or those illegals that cannot risk contact with the Border Patrol.
New areas for growth aren’t limited to Mexico. In an ironic twist, Mexican cartels have entered the country of their former partners, Colombia, in order to largely seize control of the cocaine industry there financed by their existing operations.