Stagecoach grows business with new Mexican authority
May 1, 2008 12:00 PM, By Mary Davis
With Headquarters on the United States/Mexico border in El Paso, Texas, it's not surprising that Stagecoach Cartage & Distribution LP would be the first US carrier to receive authorization to transport product into the Mexican interior.
A Stagecoach tractor and dry bulk trailer passed through the Nogales, Arizona, commercial border crossing September 14, 2007, on its way to Obregon, Sonora, Mexico, south of Hermosillo to deliver a load of plastic resin.
“This is an incredible opportunity for US- and Mexico-domiciled carriers, and will enhance the flow of trade between the United States, Mexico, and Canada,” Scott McLaughlin, president of Stagecoach, said at the time of the historic event.
As soon as he heard about the program, McLaughlin set the gears in motion to qualify, recognizing that the opportunity would fit the company's niche. The authorization is part of a year-long cross border US/Mexico reciprocity project in which Mexico allows US trucking companies to operate in the country south of the 20-mile commercial border zone.
The project is part of the North American Free Trade Agreement cross-border trucking provisions. The project, according to the US Federal Motor Carrier Safety Administration (FMCSA) information, is designed to eliminate a cumbersome, outdated, and costly system of moving freight across the US/Mexico border, and replace it with an efficient, transparent, and safe cross-border trucking process.
The demonstration project will allow up to 100 US-domiciled carriers and the same number of Mexico-domiciled carriers to operate throughout the two countries.
About 50%-55% of Stagecoach's plastic resin transportation is conducted in Mexico and has been as high as 70% of its bulk business, says Dieter McLaughlin, vice-president of the family-owned company.
Prior to the carrier hauling product into the interior, it was delivering plastic resin into Mexico within the 20-mile limit — a distance that continues to be in effect for US carriers not authorized by Mexico for interior transportation. A majority of Stagecoach's business continues to be centered in that area of Mexico in addition to the authorization for interior transportation.
Meeting the demands from Mexican officials in order to qualify for the interior authorization required an involved process that stretched into three months before completion, says Don Anderson, Stagecoach vice-president of accounting, who oversaw the project. The procedure called for meetings with Mexican officials, requisite inspections, and documentation to demonstrate the carrier's qualifications. All the transactions were handled in both Spanish and English.
Even though permission was granted, Stagecoach units don't just pass through the border unchecked. Stagecoach drivers entering Mexico, of whom all speak Spanish, were trained specifically for the international operation. Before drivers begin the trip, commercial invoices written in Spanish must be compiled by the carrier and forwarded to a US broker, who puts them into the hands of a Mexican broker.
Until paperwork is complete, the shipment cannot cross into Mexico. Even at the border, drivers must meet Mexican and US custom requirements, and their vehicles may be subject to inspection.
The carrier's cross-border bulk business is driven by demand for plastic resin from the maquiladora sector, (manufacturing facilities in Mexico) that produce products such as small appliances, wire coatings, polyvinyl chloride (PVC) pipe, and lawn and gardening accessories.
Although Stagecoach has received considerable publicity recently for its historic routes into Mexico, the carrier isn't a new kid on the block. It has been operating in the United States since the company was founded by the McLaughlins' father, John, in 1986 after he completed a 27-year career in the Army as a member of both the Special Forces and Green Berets. His sons assumed the management at his death in 1998.
While a majority of the operation today is centered in the El Paso area, the carrier transports product into California, throughout Texas, and occasionally as far east as South Carolina and Alabama.
The bulk transportation division is small in contrast to the carrier's other businesses: less-than-truckload, warehousing, and transloading.
“We just don't say no to anything we can handle,” says Dieter. “We've always been diversified.”
The transload business works well with the bulk division as the majority of the product eventually transported by Stagecoach arrives via rail at the carrier's facilities in El Paso, Anthony and Vinton, Texas, and Vado, New Mexico. The rail sites are served by Union Pacific Railroad Corp and Burlington Northern/Santa Fe Railway.
The bulk division operates with 19 pneumatic bulk trailers and one liquid tank trailer dedicated to a customer that ships a non-hazmat oil. The bulkers are purchased from Southwestern Pneumatics and are typically built by J&L Tank with 1,600-cubic-foot capacity. ProTech supplies cabinets for storing couplings and other hardware.
“We specify six-inch vacuum hoses and four-inch discharge hoses,” says Dieter. “That gives us a high-volume, low-pressure configuration.”
John Deere diesel engines are mounted on a few of the trailers to drive blowers. These specific trailers are used with tractors that lack their own blowers.
Trailers also are outfitted with cooling units from PneuTech to lower blower air temperature from 250° F to 110° F, which is often required because of the El Paso area heat.
Pressure Systems International (PSI) supplies automatic tire inflations systems mounted on the trailers. A warning light is mounted on a driver-side fender that flashes when pressure is low.
The 6,900-gallon liquid tank trailer was manufactured by Bulk Manufacturing Inc and has a Briggs Vanguard engine mounted on the trailer to drive the Ranger product pump.
International tractors are dedicated to the bulk division and are spec'd with Cummins engines rated at 370-435 horsepower and Eaton Fuller 10-speed transmissions for local hauls. Eaton UltraShift automated transmissions are specified for tractors used in over-the-road. Gardner Denver blowers are mounted on most of the tractors.
Qualcomm satellite tracking and Eaton Vorad collision avoidance and Iteris lane departure warning systems also are specified for the tractors. In addition, the carrier specifies Cat's Eye tire pressure warning systems from Link Manufacturing.
Keeping vehicles in good condition falls to the maintenance department headed by John Plote. The two-bay shop and the usually good weather for outside work combine to provide plenty of space for repairs. Preventive maintenance scheduling includes a 60-day routine service. Engines and cooling units mounted on the trailers also receive a thorough check.
McLeod Software provides a fleet management software package that handles shop procedures and accounting. It also is used for dispatching drivers.
Tank cleanliness is of the utmost importance. The carrier pays the drivers to wash out their pneumatic tanks prior to each use. After the driver has completed the wash, another driver verifies the wash, and a supervisor adds final approval.
The emphasis on vehicle appearance is just part of the driver training that includes company policies, Department of Transportation regulations, and defensive driving, says Greg Emfinger, terminal manager. “Our drivers spend about three months in training,” he adds. “We try to hire from within the company when possible. It takes a special person to handle this product.”
Training covers various performance award programs for personnel. Driver incentives include significant fuel savings bonuses of as much as $500 per month, an annual safety bonus (also for mechanics) that can add up to $1,000, and $50 extra for log accuracy and zero defects at roadside inspections.
When new hires have completed the classroom portion of the training, they begin over-the-road training that requires some time spent with every driver. “We have found that this is a good experience for our veteran drivers as well as the new hires,” Dieter notes.
The company emphasizes the importance of safety commitment from owners and managers. Monthly safety meetings always find Scott and Dieter in attendance.
One example of the owners' commitment to safety and the program's success was reflected in an award presented this year by the Truckload Carriers Association. Stagecoach was the grand prize winner of the TCA 33rd Annual National Fleet Safety Awards. The carrier won the award for truckload companies with a total annual mileage of less than 25 million miles.
TCA noted the carrier's safety program and pointed to major investments in technology as a significant contribution. Stagecoach tracks speed of the truck, idle time, hard braking, lane departures, and tire pressure. Drivers who exhibit driving habits that do not meet the carrier's standards are retrained. Speeding is something that is tracked closely. Drivers are warned twice and then terminated following a third detected speeding incident.
Taking a look at driver and other employee physical fitness, Stagecoach took a proactive stance and began with providing healthful snacks, such as fruit, at the terminals. The company also reimburses employees for membership in a fitness facility, if they choose to participate. A nurse is available weekly to check blood pressure and can provide cholesterol and diabetes tests.
Continuing with that philosophy, the company held a fitness challenge, paying $10 per pound of weight lost by everyone who participated. The carrier also provides driver fatigue (sleep apnea) and smoking cessation programs.
After drivers complete the training program, they start routine duties that begin by checking in before beginning routes. Emfinger has posted information for the drivers in his office so that he has a one-on-one daily interaction with drivers.
“I like to make myself available to them so that if they have any questions or problems, we can respond immediately,” he adds.
Emfinger coordinates fleet dispatch with Denise Gallegos who oversees customer service and coordinates warehouse/transportation/transloading logistics. She also checks vehicle wash verifications and manages requirements for transportation into Mexico.
Having gained the authority to operate south of the border, as well as enhancing its established domestic services, Stagecoach has put in place an operation that is poised to grow in the United States and Mexico.
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