Amidst the hysteria of OOIDA, in reality, it’s much ado about nothing

Nuevo Laredo to Monterrey Highway
Trucks traveling the highway between Nuevo Laredo and Monterrey
As resolution to the longstanding stalemate over allowing Mexican trucks access to our highways, as we agreed to do almost 20 years ago, is weeks, if not days away, OOIDA has issued another of their silly little “Calls to Action” exhorting it’s diminishing membership to call and annoy their Representatives about this inconsequential issue. The continued opposition by Teamsters, OOIDA and their allies continues to cost tens of thousands of American jobs and tremendous loss of market share in the agribusiness sector. Not that it matters to either of these organizations if they can keep a handful of Mexicans out of the country.

At issue this time, is a letter that well-known Mexico basher Duncan Hunter of California wrote to Secretary Ray LaHood urging him to cancel the upcoming program. And, as usual, Hunter is long on rhetoric and short on facts.

However, a competing letter has been issued by freshman congressman Francisco Canseco, urging other freshman congressman to do just the opposite. It’s concise and on point without the union talking points seen in Hunters letter.

Anyone care to guess which one will be most effective?

WHAT IF THEY OPENED THE BORDER AND NOBODY CAME?

Intriguing question and entirely possible as Mark B. Solomon, senior editor at DC VELOCITY suggest in an article titled “MUCH ADO ABOUT NADA”

Coincidentally, Mark’s article confirms and affirms what we’ve been preaching and teaching on Mexico Trucker Online for almost 5 years. It’s what has made this site well-regarded and used extensively throughout the transportation industry and by government agencies to learn the real truth about Mexican trucking.

The lead off question he asks is

What if they threw open the U.S.-Mexican border to all qualified trucking companies, but no Mexican truckers showed up?

Here’s some excerpts from Marks article.

It would indeed be an ironic outcome of a battle that has dragged on for more than 11 years, culminating in March 2009 in a mini-trade war that has cost U.S. exporters billions of dollars in lost revenue and, according to U.S. Chamber of Commerce estimates, led to the loss of more than 25,000 American jobs.

Yet it is entirely plausible, according to various experts. For all the publicity surrounding the March 3 announcement by President Barack Obama and Mexican President Felipe Calderón of a tentative resolution to the cross-border dispute, few expect the status quo to change for years to come. The agreement would allow carriers on both sides of the border to operate beyond a 25-mile “commercial zone,” but that doesn’t necessarily mean they’ll take advantage of that freedom. In fact, Mexican truckers will have little, if any, desire to operate deeper into U.S. commerce than they already do, these experts say.

So much for the claim by Teamsters and as recently as today, that tens of thousand of Mexican trucks are waiting to access American highways. We’ve been saying that for years.

Con-Way Truckload CEO Herb Schmidt had this to say about the situation;

“The majority of Mexican truckers don’t want any part of it. We estimates that only 5 percent of the 80 Mexican truckers that have cross-border interline relationships with Con-way Truckload have even considered serving the U.S. market beyond the commercial zone.”

CEO Derek J. Leathers of Warner Inc. added;

“There’s less interest on the part of Mexican truckers than many people think”

According to the article, Werner generates about 10% of its revenue from its Mexican operations.

The article also points out who would be the winners and losers when the border is opened. Obviously, US producers and manufacturers who have been hit hard by the tariffs would be the immediate winners.

According to Solomon, the losers could be Mexican customs brokers, about half of whom own drayage companies that move freight between Mexican and U.S. trucks for line-haul service into either country. Because the agreement allows Mexican truckers to operate beyond the commercial zone and haul freight directly to U.S. destinations, the need for those drayage services would diminish, if not disappear, experts say.

However, with the volume of freight moving between the countries, both way, losses would be minimal for decades, we believe.

Some other points made in the article that bear consideration.

  • It’s likely to be business as usual along the border. U.S. carriers operating southbound to Mexico will continue to drive to the commercial zone and tender their trailers to their Mexican interline partners for the line-haul. The same  is likely to prevail on the northbound routes, with Mexican truckers turning over trailers to their U.S. counterparts for movement into the U.S. interior
  • Mexican truckers would be loath to enter the U.S. market because the liability exposure in the United States would be too great for many Mexican truckers to tolerate, Herb Schmidt pointed out.

And finally, the point we’ve been hammering on every time we hear someone erroneously claim that the disparity in drivers wages between Mexico and the United State will drive down our wages and give the Mexicans and unfair competitive advantage is further debunked.

Mexican carriers looking to expand into the United States would face significant upfront costs for labor, maintenance, facilities, and equipment. The typical Mexican trucker has a fleet of six trucks, hardly enough to justify the kind of capital investment needed to play in the world’s biggest economy, experts say. In addition, the agreement bars Mexican carriers from accepting loads moving between U.S. points, thus keeping the intra-U.S. market off-limits to competition with U.S. carriers.

THE DEBATE GOES ON

Further debunking the campaigns of misinformation and fear put forth by OOIDA and the TEAMSTERS, the article points out more of what we’ve been saying over the years.

In the meantime, the debate over easing restrictions on Mexican truckers continues. The agreement’s opponents—chief among them the Teamsters union and Owner-Operator Independent Drivers Association, the trade group representing the nation’s independent drivers—have warned that cheaper Mexican labor will undercut U.S. driver wages and siphon off jobs. Leathers of Werner says the argument is a red herring, contending that any labor cost advantage enjoyed by Mexican drivers will be more than offset by their companies’ higher costs of capital and equipment, as well as the increased liability exposure.

Schmidt of Con-way Truckload adds that should Mexican drivers enter the United States with more frequency, they will, over time, demand wages that are comparable to U.S. drivers’. Schmidt compares that possible scenario to what has occurred over the years at Mexican “maquiladoras,” plants in Mexico where raw materials imported on a duty-free basis are assembled into goods, which are re-exported back to the United States or another destination market. At Mexican “maquilas,” Schmidt says, rising labor costs have forced businesses to relocate deeper into Mexico to procure inexpensive labor.

Lana R. Batts, a partner in transport advisory firm Transport Capital Partners and vice president of government affairs for the American Trucking Associations in the 1980s and early 1990s, says the Teamsters have little to fear from Mexican drivers jeopardizing their livelihood. Batts adds that union concerns that the agreement will give Mexican drug lords and other unsavory characters an open supply chain into the United States are unfounded, noting that border security is not disappearing and that the situation will be no worse than if there were no agreement.

An apt title, “much ado about nothing”. Take out the overt racism of the issue, the lies and spin being pushed by opponents of the US finally complying with our obligations and especially, take the word “Mexican” out of the equation, and as Mark Solomon points out..

“The dispute over Mexican truckers’ access to U.S. markets is close to resolution. The industry’s response: A collective shrug”

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