“Hey! That’s not your freight!” Really? It’s not yours either!

Freelance writer makes ridiculous assumptions about Mexican trucks and Cabotage rules

Mexican trucks
Safe, well maintained commercial trucks from Mexico such as this one belonging to Transportes Olympic is what OOIDA and other opponents of Mexican trucking are trying to stop, and failing miserably.

I couldn’t resist responding to this ridiculous article that appeared recently in “TANDEM THOUGHTS”, the official OODA blog.

“Hey! That’s not your freight”….. Really?

Then whose is it?

Written by John Bendel a Land Line freelancer, it makes the erroneous assumption that Mexican trucks will violate cabotage laws routinely if allowed to operate in the United States.

As usual, no mention is made of the Canadians who have had free reign to the United States for 40 years or more, and who routinely violate cabotage laws when it suits them.

He begins his article with the insinuation that ” Mexican trucks will absorb freight that legally belongs to U.S. carriers.” I love that phrasing; “legally belongs to U.S. carriers”! In my 40 plus years in the business, it has been my experience that the freight “belonged” to whomever the shipper, broker or receiver chose to tender it to. But what Bendel refers to is domestic cargo in the United States that goes point to point with the US. And he is correct. That “legally” belongs to US carriers, a fact lost on Canadian carriers when it’s convenient for them. Bendel assumes the Mexicans will routinely ignore the cabotage rule because, well, because, they’re Mexican! Bendel’s rationalization?

“Mexican trucks in the U.S. will find few legal backhauls. Even if the initial load pays enough to return empty, it will be hard for any carrier to resist pulling domestic loads on their way home.”

Hard for the Canadians possibly but not for the Mexicans who are accustomed to toeing a fine line, both in Mexico and here. Unlike the Canadians who can come and go with only a passport or enhanced drivers license, the Mexican’s must obtain a visa to enter the US, but only after an intensive background check, and an entry exit permit with work authorization to travel beyond the border commercial zone. Violation of cabotage, if caught, would result in revocation of the visa and work authorization and banishment from the United States for 10 years. Not really worth it now is it?

But then Bendel moves away from the “legality” of the freight to the same worn out bullshit OOIDA has been pushing for over a decade.

“For one thing, even if their costs were comparable to those of U.S. carriers, they would tend to underbid southbound lanes. But driver pay differentials do make their costs lower. Mexican carriers will be able to seriously underbid. Brokers, seeing a larger margin for themselves in those differentials, will be delighted to provide the freight.”

As I’ve pointed out many times over the past 10 years on this website, a result of exhaustive research, Mexican carriers costs ARE, comparable to the cost of U.S. carriers, and at times, exceeds those costs. Yes, Mexican drivers wages are slightly lower than ours, but what OOIDA and others don’t tell you is this. The Mexicans carriers must purchase an insurance policy to cover liability and cargo claims, the same as we must have on our equipment, despite the fact they have similar coverage in Mexico. But the U.S. refuses to recognize the Mexican insurance. FMCSA has no problem with Canadian insurance so this same cost is not borne by the Canadians. Sure, by our standards, Mexican drivers wage seem cheap. But what you don’t know is there are benefits mandated by law that increase the carriers labor costs. Full payment into the IMSS (Mexican Social Security) that provides the driver and his family excellent health care coverage at IMSS hospitals. Per Diem payments for each day the driver is away from home, in addition to his base pay and the aguinaldo, which is a mandated Christmas bonus paid in December equaling 2 weeks salary. Things OOIDA and Teamsters don’t want you to know when they’re pushing their lies and propaganda. This is laughable….

“But that will be difficult if shippers take some simple precautions – like fake bills of lading showing phony destinations in Mexico. Nothing would be easier to create. Checking their validity would be time consuming; it is simply not going to happen. What will the impact be? Hard to say. But it’s easy to imagine U.S. rates will fall on at least some southbound lanes.”

40 years ago we did just that. During the era of ICC regulation. Nowadays, not so easy to do. What with much of the southbound freight being tagged and bagged and movements computerized, this is simply more of OOIDA’s paranoia.

That’s the best-case scenario. Worst case? If Mexican costs are low enough, some carriers will be tempted to bring a legal load into the United States, then stay for a while working from load boards, competing with U.S. carriers for U.S. freight. That’s speculation, of course, but hardly outrageous.

That’s right John. Pure speculation and totally outrageous. You know not of what you speak

This post is part of the thread: Mexico Trucking – an ongoing story on this site. View the thread timeline for more context on this post.