Cross Border Proposal could be signed as soon as this week!

Ann Ferro, FMCSA Administrator told a group of SMC3 executives that the Cross Border Pilot Program will be happening "soon" with the first trucks crossing in August.
Ann Ferro, FMCSA Administrator told a group of SMC3 executives that the Cross Border Pilot Program will be happening "soon" with the first trucks crossing in August.
Speaking to a group of trucking, logistics and technology industry executives at SMC3’s annual summer conference last Thursday in Coeur d’Alene, Idaho, Federal Motor Carrier Safety Administrator Anne S. Ferro said that new cross-border trucking program with Mexico could be in place within two months although she added she doesn’t expect a wave of Mexican trucks heading for the U.S. border.

The FMCSA and it’s Mexican counterpart SCT, expects the U.S. and Mexico to agree on a final program “quite soon” and to grant authority to the first Mexican carrier in the program “sometime in August.” Sources suggest the agreement could be signed sometime this week, with 50% of the legal retaliatory tariff’s being lifted immediately and the remainder when the first Mexican truck is granted authority under the proposed Mexican Cross Border Pilot Proposal.

As you may recall last week we reported that Mexican Economy Minister Bruno Ferrari had suggested the agreement could be signed “soon”. This got OOIDA all stirred up with them sending their allies “Chicken Little” emails suggesting that the agreement would be signed as soon as the next day and exhorting people to “Call their Representatives”, for all the good that will do.

Speaking of OOIDA and their concentrated interest in getting a Highway Bill passed, we ran across the reason in the form of a letter sent to the chairmen’s of the “Committee on Transportation and Infrastructure” and the “Subcommittee on Highways and Transit”, John Mica and John J. Duncan Jr.

The letter, co-signed by who else, but the corrupt little Congress critter, Peter DeFazio (D-OR) who is also a member of the subcommittee, lays out some of the things they want to see in the 2011 Highway Authorization Bill.

Of specific interest to this debate is the following passage:

We also support inclusion of a provision to block attempts to open the US-Mexico border to cross border truck traffic until the safety, security and job concerns raised by Congress are addressed.

Problem with this is, safety, security and job concerns are a red herring, formed on baseless assumptions not backed by facts. Mexican politicians could take lessons on corruption from Peter DeFazio and his handlers at OOIDA and the TEAMSTERS.

Status of Mexican Trucks in the United States

The Congressional Research service recently prepared for Members and Committees of Congress a report titled
“Status of Mexican Trucks in the United States” which pretty much debunks what Defazio, Teamsters, OOIDA and others have been saying about Mexican trucks. The report can be read or downloaded HERE.

Here’s some excerpts of the report:

Are Mexican Trucks Less Safe Than U.S. Trucks?
Currently, there are about 4,600 Mexican carriers operating within the commercial zones andabout 1,000 Mexico-based but U.S.-owned carriers that have limited operating authority beyondthe commercial zones.

Based on the results of roadside truck inspections in the United Statesover the last five years, Mexican trucks and drivers have a comparable, if not slightly better, safety record than U.S. trucks and drivers.

The long-haul Mexican trucks participating in theBush pilot program also demonstrated a superior safety record compared to U.S. trucks, althoughthe sample size was too small to be statistically significant.

The safety of trucks may have less to do with whether they are of U.S. or Mexican origin andmore to do with the type of truck. Drayage carriers, trucks that make short-haul movements and spend much time idling while awaiting customs processing, tend to use older equipment. Long-haul trucks tend to carry relatively high-value goods or temperature-controlled cargo, because lower-value goods and less time-sensitive goods can be carried over long distances much more economically by rail or water. If shippers are willing to pay a substantial premium over rail or water transport to truck their product long distances, it seems plausible that they would choose a reliable trucker with modern equipment to avoid risk of delay or spoilage. For instance, since refrigeration technology is continually improving, shippers expect carriers to have the latest equipment for temperature and atmospheric control. The difference in economic incentives for short-haul versus long-haul trucking raises an important policy issue. If safety is more important to long-haul trucking than it is to short-haul trucking, limits on cross-border travel by long-haul trucks may increase the presence of older,less safe trucking equipment in the border zones.

A congressionally mandated study of the causation of accidents in the United States involving large trucks that resulted in at least one fatality or injury found that the driver is a more critical factor than the vehicle.

The study reported that in 87% of those incidents in which a truck was determined to be primarily responsible for a crash, the driver was the critical factor, while a problem with the truck was the critical factor in only about 10% of the cases. FMCSA has determined that a Mexican commercial driver’s license is equivalent to a U.S.commercial driver’s license, and that the knowledge and skills testing for obtaining a Mexican commercial driver’s license is similar to that in the United States. It also found that, unlike the United States, Mexico requires pre-test training for all new truck drivers, with additional training prior to each license renewal. FMCSA has access to traffic violation data for violations that occur in Mexico.

What About Hauling Domestic Freight in the United States?

NAFTA does not require that Mexican trucks be allowed to carry U.S. domestic cargo, and theObama Administration pilot plan would not allow them to do so.

As is already the case with Canadian trucks, Mexican trucks would be allowed to operate in the United States only if they are carrying cross-border cargo or if they are running empty for the purpose of picking up cross-border cargo. Mexican trucks would be allowed to pick up a load in the United States and deliver it to either Mexico or Canada, but they would not be permitted to carry freight from one U.S.point to another. A corresponding restriction applies to U.S. trucks operating in Canada or Mexico. However, an inconsistency in trucking regulations may cause some confusion with respect to Mexican trucks. In 1999, the U.S. Customs Service (now U.S. Customs and Border Protection) amended its regulations to allow a foreign motor carrier to make a domestic delivery as long as that movement is “incidental” to the international delivery. Under this exception, a Mexican or Canadian truck could carry U.S. domestic freight along the route it would follow to return to its home country. This change was made purposely to increase the efficiency and utilization of trucks.

However, immigration regulations require a foreign national driving a foreign-based truck to obtain a B-1 visitor visa, which prohibits the holder from engaging in such incidental domestic movements.

Thus, it is immigration regulations, rather than trucking regulations, that require Canadian or Mexican truck drivers to carry only cross-border cargo when operating in the United States

Are U.S. Truckers Interested in Operating in Mexico?

Before the Bush pilot program, Mexico did not allow U.S. trucks anywhere in Mexico. Under the Bush pilot program, 10 U.S. carriers participated in Mexico’s reciprocal pilot project. These carriers operated 55 trucks on 2,245 trips into Mexico.

Mexico continued to allow these U.S.trucking firms to operate in Mexico after the United States terminated its pilot program in 2009. As of April 2011, four of the 10 U.S. carriers were continuing to operate in Mexico.

Most U.S.trucking firms offering services in Mexico do so through a partnership with a Mexican trucking firm

Where Would Mexican Trucks Travel and How Many Would There Be?

Relative to rail and coastal shipping, trucking is more costly for long-distance shipments, even with a driver paid according to Mexican wage scales. Therefore, it is likely that most Mexican trucks in the pilot program will not travel beyond the border states. The results of the 2007-2009 Bush pilot program bears this out. Under that program, Mexican participants made 12,516 trips into the United States. Of these, 1,439, or 11.5%, were to destinations beyond the commercial zone. Only 4% of these long-haul trips (a total of 80 trips) were to destinations beyond a border state. Almost all of the trips beyond the border commercial zone were to destinations within Texas andCalifornia. In more than 30 states no Mexican project participant was identified at roadside inspections during the 18 months of the program.

Guess DeFazio missed that memo.