Oct 182011

First Mexican carrier approved for cross-border transportation

Posted By: Tom Sanderson
Date Posted:  Tuesday, October 18, 2011  4:04 PM

The FMCSA approved one Mexican carrier to operate into and out of the U.S. and has a second carrier is on hold for further safety investigation. The approved carrier is Monterrey-based TRANSPORTES OLYMPIC DE MEXICO S DE RL DE CV, DOT#: 555188. Before anyone gets too excited about either (a) a welcome relief to the upcoming shortage of truck capacity in the U.S. or (b) the loss of U.S. jobs to Mexican truckers and degraded safety on our highways, I point out that the carrier has a grand total of 2 tractors, 2 drivers, and 4 trailers.

The great news for the U.S. economy is that the Mexican government suspended the remainder of  its retaliatory tariffs on U.S. exports to Mexico based on the U.S. finally honoring its NAFTA commitment to open our southern border in the same fashion our northern border has been open to Canadian-based truckers for many years. On the one hand, it is truly a remarkable show of faith by the Mexican government to suspend the tariffs based on one company with 2 trucks being allowed to operate into and out of the U.S. On the other hand, one has to wonder about our self-inflicted damage associated with cancelling the pilot program and dragging our feet on sorting this issue out if this is all it took to have the tariffs suspended making our exports more competitive to Mexican consumers.

The Teamsters and OOIDA may have let one carrier slip through but they are protesting the second carrier, Tijuana-based GRUPO BEHR DE BAJA CALIFORNIA SA DE CV, DOT#: 861744 and the FMCSA has obliged by holding off approval while conducting additional reviews of inspections and vehicles. You can read the details in the Federal Register. This carrier operates 3 straight trucks and 4 tractors, so it is easy to understand the Teamsters’ concerns about job losses for U.S. drivers.


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Categories: Mexico cross border trucking
Jul 192011

Progress on U.S. and Mexico cross border trucking

Posted By: Tom Sanderson
Date Posted:  Tuesday, July 19, 2011  1:19 PM

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.


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Categories: Mexico cross border trucking
Jun 162011

Mexico’s Ferrari Says U.S. Trucking Pact Ready in ‘Weeks’

Posted By: Tom Sanderson
Date Posted:  Thursday, June 16, 2011  11:50 AM

"Mexican Economy Minister Bruno Ferrari said his country will sign a formal agreement to end a trucking dispute with the U.S. as early as this month, setting the stage for the Latin American country to remove punitive tariffs."

This was reported by Bloomberg News on June 14. It will be good news if true, but I will be surprised if things move that quickly.


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Categories: Mexico cross border trucking
Mar 042011

Compromise reached in US/Mexico cross-border trucking

Posted By: Tom Sanderson
Date Posted:  Friday, March 04, 2011  6:09 PM

U.S. President Barack Obama and Mexico President Felipe Calderon announced yesterday that they have come up with a solution that will "allow for the establishment of a reciprocal, phased-in program built on the highest safety standards that will authorize both Mexican and United States long-haul carriers to engage in cross-border operations under NAFTA." Mexico will suspend 50% of its retaliatory tariffs when the new agreement is signed (60 day estimate) and the other 50% when the first Mexican carrier is granted operating authority under the program. President Calderon is wise to make sure we hold up our end of the bargain before taking down the tariffs. Negotiators from both sides are working on a draft agreement that the DOT will review with Congress and put out for public comment. It is unlikely that we will be seeing the benefits of this new compromise any time soon.

While details are still being worked out, at least some components of the proposal are known. Mexican truckers will be required to operate with Electronic On-Board Recorders (EOBRs) that ensure compliance with U.S. hours of service regulations and to ensure that the trucks only haul freight to and from Mexico, not U.S. domestic freight.

The news has been widely reported by the mainstream press including The Wall Street Journal, and by numerous trade magazines including Logistics Management and Transport Topics. The plan is supported by the ATA and the U.S. Chamber of Commerce.

We can expect the usual suspects to contemplate the end of the world as we know it, and OOIDA Executive Vice President Todd Spencer wasted no time in blasting the proposal; "Mexico's economic bullying tactics should not be tolerated. The onus is on Mexico to raise the safety, security and environmental standards for their trucking industry. We should not allow ourselves to be harassed into lowering our standards." It seems to escape Mr. Spencer that the proposal holds Mexican truckers to the same or stricter safety and environmental standards as U.S. carriers. The other half of the unholy alliance against honoring our trade deals, Teamsters' president Jim Hoffa, chimed in to claim the deal "caves in to business interests at the expense of the traveling public and American workers."

Let's hope this proposal moves ahead quickly as I am certain it will provide some productivity and cost savings to manufacturers and retailers that will at least partially offset the rising costs associated commodity inflationary pressure and with tightening capacity in the trucking industry.


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Categories: Mexico cross border trucking
Feb 102011

Cross-border trucking initiative is stalled

Posted By: Tom Sanderson
Date Posted:  Thursday, February 10, 2011  8:00 AM

On January 6, 2011, the DOT issued a "concept document" to restart Mexico-US cross border trucking operations. Mexico greeted the news by stopping the rotation of its retaliatory tariffs but is wisely leaving the tariffs in effect until real progress is made and the U.S. honors our NAFTA commitments. The program is opposed by labor unions and owner operators who want protection from competition and by some groups who falsely claim the Mexican trucking operations are not as safe as ours. The DOT said it intended to formalize the concepts through a Federal Register notice-and-comment rulemaking process after completing consultations with the Mexican government. A month has gone by since the concept document was released, but so far that is all it is – a concept.

   

CONCEPT DOCUMENT

   

PHASED U.S.-MEXICO CROSS-BORDER LONG HAUL TRUCKING PROPOSAL

   

PRE – OPERATIONS ELEMENTS

   

1.    Application: Interested Mexican Carriers apply for long-haul operating

         Passenger and hazardous materials carriers will not be included in this program.

         Subject to negotiation with Mexico, the number of carrier and truck participants in first phase of program will be managed to ensure adequate oversight.

2.    Vetting

         Applicant carriers' information is vetted by DHS and DOJ.

         Driver specific information from applicant carriers is vetted by DHS and DOJ.

3.    Pre-Authority Safety Audit (PASA)

         Review carrier's safety management programs (vehicle maintenance, drug and alcohol testing programs, driver qualification files, etc.).

         Review driving records for only those drivers who would participate in cross-border long haul operations.

         Review the combined driving record of drivers who would participate in the program (U.S. driving history, Mexican Federal license history, and Mexican State license history).

         Inspection of each vehicle to be used in the phased in program.

         Check all participating vehicles for Federal Motor Vehicle Safety Standards (FMVSS) certification.

         Check all participating vehicles for EPA emissions standards.

         Conduct an English Language Proficiency and US Traffic Laws knowledge test of each driver participating in the program, conducted in English.

         Review of all convictions, crashes and inspections in Mexico in determining carrier's safety record.

4.    Document Mexican Commercial Driver's License process to demonstrate comparability.

5.    Insurance - If PASA is successfully completed, applicant must submit evidence of financial responsibility (insurance) to FMCSA.

 

OPERATIONS ELEMENTS

   

1.    Monitoring

•       Inspections

•       For an agreed upon period of time a carrier's long-haul operations, vehicles and drivers would be inspected by FMCSA each time one of its vehicles crosses the northbound border.

•       Electronic Monitoring - The program will use available technology to provide redundant monitoring of program's trucks, drivers and carriers.

•       Initial, phased in access.

2.    Follow Up Review (1st Review) - Each Mexican trucking company would undergo a follow-up review to ensure continued safe operation. After the follow-up review, the company's trucks would be subject to border inspections at FMCSA's normal border inspection rate and subject to inspections in the interior of the U.S. at the same rate as U.S. companies. Additionally, the company must maintain a valid safety inspection sticker.

3.    Compliance Review (2nd Review) - After successful completion of a compliance review and earning a Satisfactory Safety Rating, the participating carrier will be eligible for full operating authority.

4.    FMCSA Reviews

•       Insurance Monitoring – FMCSA monitors the participating carriers' insurance filings to ensure there are no lapses in coverage.

•       FMCSA conducts compliance reviews of drug and alcohol collection and testing facilities used by participating carriers.

 

TRANSPARENCY ELEMENTS

   

1.    Federal Register Notices – FMCSA publishes a Federal Register notice describing the proposed program and docket appropriate analyses and seeks comment on the program.

2.    Publically Accessible Web Site – FMCSA develops and maintains a public web site that provides information on participating carriers.

3.    Federal Advisory Committee – DOT establishes a Federal Advisory Committee Act group with representation from a diverse group of stakeholders.

5.    Periodic Reports to Congress – DOT is required by statute to submit annual reports to Congress.

6.    Office of the Inspector General – DOT OIG is required by statute to submit reports to Congress.


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Categories: Mexico cross border trucking
Aug 242010

Mexico ratchets up trade war over cross-border trucking

Posted By: Tom Sanderson
Date Posted:  Tuesday, August 24, 2010  12:29 PM

Once again, a critical issue in our industry is making headlines in the mainstream press. Last week Mexico expanded its retaliatory tariffs on U.S. products in protest of the on-going failure of the U.S. to honor our NAFTA commitments by allowing cross-border trucking with Mexico. There is an excellent editorial in the Wall Street Journal's August 21 issue that can be read on-line by subscribers at WSJ Teamster Tariffs. The editorial is appropriately titled "The Teamster Tariff" in reference to the pressure that the union has successfully applied to thus far stop cross-border trucking. Mexico removed 16 items from the tariff list but added 26 new items, bringing the total list to 99 agricultural and industrial products affecting about $2.5 billion in trade with 43 states. Referring to truck safety concerns, Economy Secretary Gerardo Ruiz Mateos said "The argument was that the trucks did not comply with their safety rules, despite the fact that during the pilot program there were more than 46,000 crossings without any significant incidents." Mexico is targeting products that can easily be imported from other trading partners and targeting states where Senators and Representatives oppose cross-border trucking.


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Categories: Mexico cross border trucking
Aug 192010

Mexico to Expand Tariffs in Unresolved Cross-Border Trucking Dispute with U.S.

Posted By: Tom Sanderson
Date Posted:  Thursday, August 19, 2010  12:04 PM

Transport Topics; By Sean McNally Senior Reporter; Updated: 8/17/2010 3:30:00 PM

The Mexican government plans to expand its list of U.S. goods targeted for higher tariffs, as part of its retaliation for the U.S. government's refusal to reopen the border to long-haul cross-border trucking.

"The government of Mexico has renewed the list of U.S. goods subject to increased tariffs," according to a statement posted on the embassy's website. "The revised list will involve 99 U.S. products with a similar total export value to Mexico as the previous list."

The Mexican government "has yet to receive a formal proposal for resolution of this dispute and an unequivocal signal that the U.S. government is working to eliminate the barriers that Mexican long haul carriers face to access the U.S. market," the statement said.

The announcement did not specify which new products would be on the list.

Last year, after the Obama administration and Congress shut down a pilot project to allow a limited number of Mexican carriers to access U.S. highways beyond the border commercial zone, Mexico set tariffs on a number of goods ranging from Christmas trees to frozen potatoes, with a value of $2.5 billion.

Since then, U.S. officials have said repeatedly that they were working on a plan to revive the program, required under provisions of the North American Free Trade Agreement.

U.S. Trade Representative Ron Kirk said Monday that the U.S. government was continuing to work with Congress to resolve the dispute, and that he was "disappointed" with Mexico's move to expand tariffs, Bloomberg reported.

The Department of Transportation, for its part, "remains committed to working with Congress and Mexican officials to identify a mutually agreeable path forward," DOT spokeswoman Olivia Alair said Monday.

"We believe we can find a solution that both addresses the concerns voiced by some in the U.S. Congress, and keeps us compliant with our international trade obligations," she said, adding that DOT "is developing a new proposal that will meet congressional concerns as well as our NAFTA commitments."

 

 

 


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Categories: Mexico cross border trucking