The United States and Mexico signed an agreement on July 5 to allow cross-border trucking and to eliminate the retaliatory tariffs Mexico placed on U.S. goods after we violated our NAFTA agreement to implement a trucking program. The Mexican side of the agreement is straightforward. Fifty percent of the tariffs are to be eliminated 10 days after signing the agreement and the remainder within 5 days of the first Mexican trucking company receiving its U.S. operating authority.

The Department of Transportation has specified strict but reasonable requirements on Mexican truckers wishing to operate north of the border. Among the requirements are complying with all Federal Motor Vehicle Safety Standards and using electronic monitoring systems to track hours-of-service compliance (EOBRs to be paid for by the FMCSA). All participating Mexican drivers will be required to demonstrate an ability to understand English and U.S. traffic signs. The U.S. Department of Transportation will review the complete driving record of each driver and require all drug testing samples to be analyzed in Department of Health and Human Services-certified laboratories located in the United States.

Mexican fleets passing the initial test will be granted provisional authority and will be inspected each time of entry in United States. After 18 months of safe performance (determined by a DOT performance evaluation and comprehensive review), a Mexican carrier can be granted permanent operating authority. Mexican motor carriers with provisional authority that participated in the 2007 pilot project and with safe operations will receive credit for the months operated and will be exempt from stage 1 inspection.

The agreement also requires that Mexico provide reciprocal authority for U.S. carriers to engage in cross-border trucking, but there is little likelihood of any U.S. carriers pursuing that authority.

This is a very positive outcome and a surprising resolution to an issue that was and still is adamantly opposed by organized labor and owner operators. From a practical standpoint, Mexican carriers are not likely to be overly aggressive in moving products into the interior of the U.S. because once here, they can only haul freight back to Mexico. (Note that this is the same requirement for U.S. or Canadian truckers moving freight across our northern border.) It will be challenging for Mexican carriers to gain access to the southbound freight unless they have relationships with U.S.-based 3PLs, truck brokers, or directly with shippers. At Transplace, we think the best opportunities will be to use Mexican carriers to bring freight further inland, such as to Dallas, where there is a greater likelihood of getting return loads to Mexico. We welcome the opportunity to work with many of the excellent Mexican trucking companies we work with inside of Mexico to take advantage of this new cross-border agreement. With the looming capacity shortage in the TL sector, we are pleased to finally see a government program that may actually increase trucking capacity.

Numerous groups have spoken out in support of the deal including the American Trucking Association, the U.S. Chamber of Commerce, and the National Association of Manufacturers.