The Impossibility of Mexican carriers causing economic harm to U.S. truckers and Carriers

MTY40908 051We’ve heard it for 20 years, how if we allow the Mexicans to operate in this country, our rates will go in the toilet, not that they already aren’t, thanks to brokers. That we’ll lose jobs, freight to the Mexicans and U.S. companies will fall by the wayside as the Mexicans takeover trucking in the United States.

Logic tells you this is nothing more than bigoted, xenophobic, protectionism. To main players, International Brotherhood of Teamsters and the Owner Operators Independent Drivers Association have their own reasons for pushing these lies. The Teamsters, because labor unions and labor law in Mexico will not permit them to organize in that country. They were opposed to Canadians coming into this country for similar reasons until Canada allowed the Teamsters to organize in that country. OOIDA though is a little different. Led by a small, irrelevant little man, Jim “I don’t want no spics in OOIDA” Johnston and his sidekick Todd Spencer, OOIDA jumped on the anti Mexican bandwagon as a means to boost their faltering membership, which at one time boasted 160,000 members, but is now thought to be as low a 60,000 according to income reported to the IRS.

The TEAMSTERS argument has been to keep those dangerous, unsafe Mexican trucks driven by drivers under the influence of drugs and alcohol out of the U.S., a claim that has been thoroughly debunked by safety statistics compiled by FMCSA and the Bureau of Transportation Statistics.

However the claims of economic damage is owned by OOIDA and OOIDA alone and is used by the association to strike terror in the hearts of their members, who chose to let the association think for them.

Here’s the facts, as presented by El Financiero, a highly respected Mexican financial newspaper akin to The Wall Street Journal.

I’m going to present it in its entirety here, machine translated but cleaned up for clarity by me personally.

In the United States there are a number of specialized companies, with more than 10 thousand units in operation each, according to data from the American Trucking Association.

In contrast, in Mexico, 82 percent of those registered with the Secretariat of Communications and Transport (SCT) consisted of companies with 1-5  trucks, called  men-truck ,

  • 15.6 percent are firms with 6-30 units;
  • 1.9 percent are companies with 31-100 vehicles; and only
  • 0.6 percent are large firms with more than 100 trucks each, but there is not a single company with more than 10 thousand units.

Before a  full opening of the border to Mexican transportation in the United States,  Jose Refugio Munoz, executive vice president, National Trucking Chamber (Canacar), considered it essential to create stronger companies, to compete in the American territory, as the current size of the Mexican carriers only allowed to participate in the market for short distance.

The cost per ton / kilometer in Mexico is 15 percent lower than in the United States, however, the structure with the  Mexican carriers  causes profits are lower, compared to a US company, said Muñoz.

“(In the US) cost less highways that here, diesel is cheaper there than here, funding is cheaper, there is only expensive labor. There operate in better conditions and margins are higher and lower risks, “said the representative of Canacar.

Among the major competitors in Mexico include  Transport  CASTORES , with 2520 vehicles; and  TOM Group , which has operations in school transportation, employee relocation and moving, along operates approximately 4000 trucks, according to figures from the companies.

Elias Dip, president of the National Confederation of Mexican Carriers (CONATRAM) indicated that the  Carriers  are large only in the country, because the United States is not “no” against local competitors; so access to the pilot program over long distances between the two countries provides virtually zero opportunities for Mexicans.

“In the US a company has 5000 trucks, has 20 thousand trailers. I go with a box or two, not even bothers to assist me, I will fall with a coyote (broker) there, because there are coyotes (brokers), I will charge 30 or 35 percent of what it’s worth my job, then we’re out of competition, “said Dip.

The numbers don’t lie, but people do! When you consider the Mexicans are hit with the cost of operation and compliance in their own countries, plus ours, it’s a no brainer.


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.