Roads to common ground

| July 15, 2009

Quintanilla’s company prepares loads for importation to Mexico at its Laredo, Texas, facility in the transport-centric Milo Industrial Park. They do the same for northbound goods in Nuevo Laredo on the other side of the border.

“Northbound is easier because there are no tariffs,” Quintanilla says, a situation that predates the latest round of retaliatory tariffs. “I don’t think you’ll ever really get to a truly free-trade scenario, because there’s too much to lose in terms of competition – Mexico has to protect their domestic commerce as much as their international companies.”

That so many U.S. drivers are willing to offer perspective on the cross-border issue might seem strange when you consider that very few indeed have actually driven a truck across the border. One who has is Gerard Gaona, manager of the Ragar Transportation terminal on Nafta Boulevard in Milo Industrial Park, mere blocks from Quintanilla International’s location. From here Ragar outfits 65 leased owner-operators with freight bound for the interior United States.

When Gaona was a boy growing up in Laredo, “my dad had a transfer company [called Go Trucking] here in town,” he says. When he was old enough, Gaona moved loads southbound to Mexican customs. Go was one of several U.S. firms that dominated the southbound transfer business into the 1980s. Paid on a per-trip basis, the going rate could be as high as $70 a load, Gaona says, if it was for a good customer. “You were bobtailing back,” he says. “Fuel was 22 cents a gallon, and it took an hour and a half to cross and come back” – the good old days.

Today, he says, “the rate is cheaper to move cross-border than it was in the 1970s. Now these guys get paid as little as $50, taking a load both ways.” The round-trip could be done in eight hours, Gaona says, “if they’re lucky.” The current cross-border system in Laredo is dominated by transfer companies using Mexican drivers in local tractors to shuttle freight from yard to yard across the border, Gaona says. The inefficiencies in the larger process, with three carriers and three trucks involved in most international moves, are selling points commonly referenced by the free-traders whose voices are loudest in support of opening the border to north-south long-haul traffic.

But while they pine for fast, seamless cross-border freight movement, critics see threats in cheap labor coming north: Just as Mexican drivers came to dominate the transfer business, if a border open to long-haul traffic comes to fruition might Mexican drivers come to dominate those movements as well?

In some sense, U.S. drivers already see a fair amount of competition from these drivers on their lanes.

The first driver in the pilot program to make a delivery across the border in 2007 was rolling for a base pay of only 21 cents a mile, according to our story on the subject in the December 2007 issue; with meal allowances and other perks adding to that, his employer, Fernando Paez of Transportes Olympic, told Truckers News’ sister magazine Overdrive, his pay was closer to 30 cents a mile. That’s not far off some U.S. company driver wages, nor was that driver new to U.S. lanes, as Olympic had been hauling for years via its U.S. sister company deep into the interior.

Mexican driver Javier Ocampo, resident of Nuevo Laredo, hauls for between “25 and 30 cents per mile,” he says, in the U.S. today for Quintanilla International, which subcontracts Mexican drivers for long-haul routes in the U.S. from its Mexican parent company, Transportes Quintanilla. Rolando Quintanilla describes the business situation for Mexican firms with U.S. long-haul subsidiaries along the border as one of opportunity, cross-border demonstration project or not. There’s a “loophole,” as he characterizes it, that allows those firms to use their parent company’s drivers with temporary visas (which they have for their cross-border drayage service) to run long-haul routes in the United States for the U.S. subsidiary.

“The Mexican driver can drive in the U.S. today,” Quintanilla says, if he’s in an American truck and “if he’s on a temporary visa, as long as the load is an international load – the origination or final destination is Mexico. A lot of American companies have tried to take advantage of this and buy these Mexican carriers. Obviously, they’re trying to get an advantage in the pay of the driver. But they can’t do that. Well, they can, but when they do they’ll have a discriminatory practice. They’re using a Mexican driver and paying him less than a U.S. driver – that’s discriminatory.”

Quintanilla points to lawsuits against American companies allegedly engaging in such practices, such as a 2006 suit against Celadon and its Mexican subsidiary Jaguar Transportation – the suit was reportedly led by protesting drivers. Celadon declined to comment for this story.

“Our Mexican drivers running in the states are paid by a Mexican entity,” Quintanilla says. “They are contracted by a Mexican entity and subcontracted to our U.S. entity. They still get the same benefits in Mexico as if they were driving in Mexico.” To top the government health and housing programs Mexico requires its employers to pay into on behalf of its employees, the carrier then pays these drivers like they would any other U.S. driver, in their view.

“For us,” Quintanilla says, “it’s that we would rather have a Mexican driver because he’s been with our company for many years. This is a kind of graduate program, learning to run other lanes rather than just the Mexican lanes.”

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