A NEW Obama Administration proposal to allow Mexican trucks to operate throughout the United States would exclude hazardous materials carriers no matter how safe they are. Overall, the proposal drew a lukewarm response from many in the trucking industry.
A concept document outlining a framework for the new program was released January 6. Transportation Secretary Ray LaHood said the document will serve as a starting point to renew the cross-border program for Mexican truckers that was canceled in March 2009. Negotiations with the Mexico government are still to come, and no target date for implementation has been suggested at this point.
The initial cross-border trucking program was launched in 2007 by the Bush Administration to comply with requirements under the North American Free Trade Agreement (NAFTA). Under that pilot program, Mexican carriers had to register their vehicles with the US government and up to 100 Mexican fleets could operate at any given time inside the United States. Mexico's government reciprocated by allowing a small number of US carriers to operate inside Mexico.
After the Obama Administration ended the initial cross-border trucking program, Mexico's government retaliated by imposing more than $2.4 billion worth of job-killing tariffs on US products being exported to Mexico. More pressure on the United States was brought to bear in August 2010 when Mexico added another $2.5 billion in punitive tariffs on 99 additional products, most of them agricultural.
Five steps
DOT proposes a five-step process for selecting Mexican trucking companies to operate in the United States. The concept plan specifically excludes Mexican hazardous materials carriers from the program. However, carriers of non-hazardous liquid and dry bulk cargoes reportedly would be able to apply.
Initially, a limited number of Mexican carriers will be allowed into the program to ensure adequate oversight, according to DOT officials. Carrier applicants and their drivers would have to be vetted by the Department of Homeland Security and Department of Justice.
Each carrier would go through a pre-authority safety audit (PASA) that would include a thorough review of safety management programs and driver records for the drivers who would be assigned to longhaul operations in the United States. Vehicle compliance with US regulations must be verified. Drivers must show English language proficiency and an understanding of US traffic laws.
Mexican carriers must show that they comply with the Federal Motor Carrier Safety Administration's (FMCSA's) insurance requirements. When first accepted into the program, Mexican carriers would face rigorous oversight, including FMCSA inspections everytime a participating carrier vehicle crosses from Mexico into the United States. Electronic onboard recorders also may be required.
Mexican fleets that meet US requirements for a certain period of time would qualify for border inspections at a normal rate and would face roadside inspections across the United States at the same rate as a US carrier. After successful completion of a compliance review and after earning a satisfactory safety rating, the carrier would be eligible for full US operating authority.
Industry reaction
Groups such as the US Chamber of Commerce immediately embraced the proposal. “There is no more critical time for the relationship between the United States and Mexico,” says Myron Brilliant, senior vice-president of International Affairs for the Chamber of Commerce. “We welcome the news that the administration is taking a first step toward resolving the long-running US-Mexico trucking dispute. The Chamber will work with the administration, Congress, and the Mexican government to implement a modern cross-border transportation system that provides certainty for trucking companies and shippers throughout North America.”
Brilliant added that Mexico is second only to Canada as a market for US exports. A recent Chamber of Commerce study found that more than six million US jobs depend on trade with Mexico and 1.7 of these jobs are directly tied to NAFTA.
Support also came from legislators representing states that were directly impacted by the punitive tariffs imposed by Mexico. For instance, Sen Patty Murray (D-WA) said she was glad that the Obama Administration is moving forward with a plan to finally end the devastating Mexican tariffs on Washington State agricultural products.
Comments against the proposal came from a variety of sources. Teamsters opposition was predictably strident. “I am deeply disappointed by this proposal,” Teamsters General President Jim Hoffa says. “Why would DOT propose to threaten US truck drivers' and warehouse workers' jobs when unemployment is so high? And why would we want to do it when drug cartel violence along the border is just getting worse? We continue to have serious reservations about DOT's ability to guarantee the safety of Mexican trucks. Mexican trucks simply don't meet the same standards as US trucks — they don't even have antilock brakes. Medical and physical standards for Mexican trucking firms are lower than for US companies. And how can Mexico enforce highway safety laws when it can't even control drug cartels?”
Roberto Otanez with Superior International LLC, a firm that coordinates chemical shipments between the United States and Mexico, says this may be the first time he has ever agreed with the Teamsters. He calls the DOT proposal a bad idea for several reasons:
”This is not the right time for Mexican carriers to begin operating throughout the United States or for US carriers to send their tractor-trailer rigs into Mexico,” he said. “Homeland security is far more important today in the United States than it was when NAFTA was ratified. Interline agreements are working well between US and Mexican carriers. If it's not broken why change it?
“Mexican carriers pay their drivers significantly less than US drivers earn, and that will drive down freight rates in the United States by perhaps 30%. There is a war going on along the border in Mexico and it would be foolhardy for US carriers to put the lives of their drivers at risk.”
”Reciprocity between the United States and Mexico would be a must, and I don't think we would ever achieve true reciprocity. If DOT insists on moving ahead with this proposal, federal officials should at least involve the stakeholders. Let the trucking industry — including the Teamsters — design the program and sign off on it.”