New Cross-Border Plan

Jill Dunn | April 01, 2011

First Mexican trucks expected this year under plan with extra safety measures.

Mexican trucks tracked by U.S.-funded electronic onboard recorders will begin crossing the border as early as August, Mexican officials say. Federal Motor Carrier Safety Administration officials say the EOBRs and other new provisions will make this a safer program than the last one.

A Mexican embassy official forecast the first crossings for August or September, following an agreement signing in May or June, preceded by a 60-day plan consultation that includes the Teamsters, Congress and U.S. businesses.

When a final agreement is signed, Mexico will lift half of the $2.4 billion in tariffs that were imposed following the termination of the last program in 2009. It will remove the rest when the first participating Mexican carrier is granted operating authority.

On March 10, U.S. Rep. Peter DeFazio, D-Ore., asked the U.S. Department of Transportation to justify buying EOBRs with Highway Trust Fund money. He also asked for clarification of how the program will comply with federal pilot program rules and cross-border trucking appropriations provisions.

In the pre-operational phase, FMCSA officials will review applicants’ vehicles and drivers, said FMCSA Administrator Anne Ferro, addressing Truckload Carriers Association members last month. Carriers will be required to have U.S.-based insurance.

If a carrier meets U.S. safety standards, it will receive provisional authority to enter the United States, she said. The carrier will then receive 90 days of full inspections at border crossings, ending with a compliance review for full operating authority after 18 months of operation.

Mexican cabinet officials said once the DOT grants a participant operating authority, it can revoke it only for breeches of road safety or insurance requirements. However, DeFazio noted, federal pilot programs require agencies to immediately end participation of program members violating program conditions, which would be impossible if they have permanent authority after passing a compliance review, he said.

“Carriers who participated in the pilot program DOT launched in 2007 will get credit for the number of months they operated in the U.S. when they reapply under this new program,” DeFazio said. “This means that some carriers will receive permanent authority almost immediately.”

FMCSA will add databases and websites so law enforcement can verify compliance and the public can check participants’ safety data, DOT says. Granting hazmat haulers long-haul authority would require a new homeland security program, which is not expected.

Instead of using only GPS systems, as was done in the prior program, Mexican trucks will have electronic onboard recorders paid for by the U.S., at an estimated total cost of $500,000 to $700,000, Ferro said. FMCSA’s position is that EOBRs must be in place for compliance, she said. However, the agency could not demand Mexican carriers buy their own equipment because the North American Free Trade Agreement stipulates the U.S. cannot place demands on Mexican carriers that exceed those put on U.S. carriers. 

President Obama’s 2012 budget proposal has $50.4 million to “support cross-border inspections and the Mexican long-haul program,” which includes $5 million to begin a multi-year improvement of U.S.-Mexico border inspection facilities.

A June Congressional report said that in the short-term, cross-border trucking will have a gradual impact on U.S. trucking. Mexican carriers will likely face problems with insurance, state registration fees and insufficient back hauls, but may overcome this through increased U.S. market involvement, leasing services to American firms or creating interline partnerships.

Long-term, few U.S. and Mexican carriers are expected to provide direct trucking services deep into each other’s markets. Many carriers are expected to operate cross-border via a subsidiary or parent corporation or in cooperation with an affiliate carrier business in the other country.

Additional problems to be addressed in implementing a cross-border trucking program include:

WORK VISAS. NAFTA implementation ends the ban on U.S. firms leasing Mexican trucks and drivers, the congressional report stated. “If a U.S. firm also arranges for work visas for leased Mexican drivers, it could make them available for more cabotage loads and could have Mexican drivers competing more often against U.S. drivers in the United States,” the report read.  “Should this happen, Congress may want to revisit the leasing issue.”

ULTRA-LOW-SULFUR DIESEL. The June Good Neighbor Environmental Board’s report to Congress and Obama said the fuel is usually available in Mexico only at the border and in Mexico’s three largest cities. The presidential advisory group said this has prevented Mexico from significantly implementing new heavy-duty diesel emissions standards.

MEXICO’S DETERIORATING SECURITY. Trucking companies have combated thefts by teaming with security specialists. For example, Celadon has installed surveillance cameras in its Mexican terminals and anti-theft tracking devises on trailers and trucks making the company’s 150,000 annual Mexican border crossings, the U.S. agriculture department said. In seeking a congressional hearing, U.S. Rep. Bob Filner, D-Calif., quoted a homeland security report that said “in 2010, criminals hijacked more than 10,000 commercial trucks in Mexico.”


Drivers, ATA at odds over border plan

Trucking industry response to the cross-border proposal divided along the same lines as it did to the 2007 program.

Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, said it would “destroy small trucking companies and the drivers they employ.” Teamsters President Jim Hoffa questioned having the program during a period of high U.S. unemployment and an escalation in drug cartel border violence.

Conversely, Bill Graves, American Trucking Associations president, said “NAFTA’s trucking provisions should evolve to allow for a more efficient, safe and secure environment for cross-border operations.”

Numerous Congressional members and many business and agricultural groups welcome the program as relief from the tariffs Mexico imposed as retaliation for ending the last program.

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