There’s one thing about illicit trade that hasn’t changed much over the ages: consumers must still physically receive the products for makers and traffickers to collect revenue. Sometimes this is harder than making or stealing the product in the first place.
Our world is bigger and smaller than it’s ever been.There are a lot more people, and there is a lot more going on. Legitimate transportation and logistical systems reach almost every corner of the globe, and a tremendous volume of international trade now delivers products from anywhere to everywhere. Interdiction systems employ armies of screeners, profilers, surveillance staff, inspectors, and investigators to discover the contraband lurking just under the surface of modern travel and commerce.
They use sophisticated scanners, surveillance systems, K-9s, CCTV, drones, biometric systems, databases, physical barriers, spyware and cyber-intelligence resources, RFID, radar, sonar, magnetometers, X-Rays, thermal imaging, chemical sniffing devices, radiation detectors, profiling, predictive software, internal security procedures to reduce corruption, and any number of other assets to separate the wheat from the chaff. But there’s a lot of wheat and a lot of chaff. This stuff gets expensive quick, and it doesn’t catch everything. Usually, it doesn’t catch more than a minority of the contraband. Law enforcers soldier on, and so do the traffickers.
Delivering illicit products often involves at least as much creativity as making the products in the first place. Professional traffickers have elevated illicit logistics to a science. Let’s say a country’s customs services start using advanced X-ray machines to screen for illegal weapons and parts coming in through the mail and in maritime shipping containers. Let’s say each of these machines costs about a million dollars per-unit, plus regular training, maintenance, and software licensing costs, and we’re going to need at least 20 of the scanners to cover the ports of entry, and the scanners are pretty slow so we can only inspect the 5% of cargo we think is most suspicious. Let’s say the new technology increases interdiction numbers by 30%. Sounds pretty good, but this 30% increase is from an estimated baseline interdiction rate of 10%, meaning we’re really catching 3% more of the total estimated contraband.
Now let’s say traffickers learn techniques to better conceal the contraband from these fancy new scanners. For example, they can drill hollow spaces in legitimate items (like power tools, engines, vehicle parts, or industrial and medical equipment) that have similar materials and densities to the weapon parts, and then artfully pack the contraband inside these legitimate items. Using these techniques, they cut the benefits of the new X-ray equipment by half. Now, we’ve got some expensive equipment that only increases interdiction rates by 1-2% over baseline. So we ramp up our other techniques to improve the numbers, running more K-9 units and buying chemical detection devices to screen for propellant residue and gun oils. This stuff costs a lot too, and slows down legitimate traffic.
Let’s say these ramped-up techniques increase interdiction by a whopping 30% from the new 12% baseline. Now we’re catching 15% of estimated contraband, but it cost us tens of millions of dollars to catch one more illegal shipment out of every 20. Then the traffickers spend a few bucks on solvents and start scrubbing the parts clean before shipment, decreasing chemical detection rates by 50%. Now we’re back to 12-13% interdiction.
Now, let’s say the cumulative 2-3% improvement in interdiction rates leads to a slight increase in black market pricing, incentivizing traffickers to send 10% greater volume. Screeners were catching 5,000 illegal weapons and parts per year (or, 10% of the estimated total of 50,000 units shipped) before the improved screening techniques raised that to 7,500 (or 13% of the estimated total). If traffickers respond by sending only 10% greater volume, now they might be getting 4,000-5,000 more weapons through the net even as the net is catching 1,500 more per year. We’re catching more, but we’re missing more, and it only cost us tens of millions of dollars for the privilege, and the smugglers make more money. Enforcers don’t just need to combat smuggling as-is, they need to overcome the incentives that cause smuggling to cost-effectively adapt to every improvement in security. This requires greater trade-offs than most countries are willing or able to make.
Traffickers simply diversify smuggling techniques, or ship in greater volume to meet demand. There are more ways to detect contraband, but also more ways to hide it among a massive and growing volume of legitimate trade. Or, traffickers can avoid piggybacking on the formal trade systems entirely. The 4th Industrial Revolution is making all of this easier even as interdiction techniques improve. In the immortal words of Hannibal Barca, they’ll “find a way, or make one.”
False compartments in vehicles and cargo containers are getting better. Drug cartels are using aircraft and drones to fly contraband over borders. They’re building tunnels to sneak under them. They’re constructing portable ramps to drive vehicles right over the walls. They’re implanting drugs inside humans and animals. They’re constructing their own encrypted cellular and radio networks for command and control. They’re customizing “fast boats.” They’re making ever more advanced narco-submarines, buoys, and “torpedoes” that can carry tons of contraband at a time and are difficult to detect. They’re using divers with wetsuits and rebreathers. They’re even flinging packages of contraband over borders with DIY cannons and catapults. Small-timers now use drones to drop contraband into prisons. It’s mostly bad, but not entirely: human rights campaigners use balloons to float flash drives full of uncensored media into North Korea. Cuban “data mules” smuggle storage devices and jerry rig satellite connections to access the free world.
Traffickers move their products by land, sea, and air, and the costs of securing all possible vectors is almost always greater than the cost of improving and developing new ones. They don’t just make the contraband, they use an endless variety of modern DIY techniques to transport and distribute the contraband wherever it’s profitable to do so. This modern post-industrial DIY is an inevitable result of enforcement techniques and profit incentives, and it’s really hard to stop without shutting down the borders, searching everyone and everything, and costing more money than anyone wants to spend. In other words, smuggling and illicit trade are embedded within post-industrial society. It’s a parasitic twin to the wonders of modernity, and fully removing it would kill the host. Some banks quietly rely on the liquidity provided by illicit traffickers laundering their cash. Most of this illicit trade is bad for societies, economies, and legitimate business, and it allows criminals to make a lot more money than you do. It’s only natural to try to fight it, but what does this involve in a post-industrial world?