As an almost literal “Mexican Standoff” continues between the Bush administration and Democratic members of Congress over controversial plans allowing Mexican trucking companies to operate in the US (see Mexican Trucking Program Promised by NAFTA Defies Efforts to Kill It, Though Pulse is Far from Strong), Arnold Maltz, a well-known supply chain academic from Arizona State University, has secured a grant to help get Mexican drivers better trained to drive on American roads.
Right now, the pilot program (originally promised in 1994 under the NAFTA accord), lets a limited number of Mexican trucks operate on US highways without the usual restrictions (a short 25-mile “commercial zone”), and the same for a similar number of US carriers in Mexico. Participation, however, has been limited on both sides, in part because of political uncertainty as to whether even the pilot would continue, let alone develop into a permanent program.
Despite some Congressional objections and attempts to cut funding for the program, the US Department of Transportation recently extended the pilot for two more years, in part to ease carriers concerns on both sides about the initiative’s longevity.
A permanent program would eliminate some significant logistics inefficiencies, as cross-border shipments require hand-offs to domestic trucking firms, and sometimes to an intermediate carrier to connect the two long-haul providers.
The opportunities for efficiency may really take off upon the ultimate completion of the CANAMEX (Canada-American-Mexico Corridor) project, which links Pacific ports in western Mexico to Canada through Arizona, Utah, Idaho, Nevada and Montana. About $4 billion worth of highway and infrastructure improvements are planned, with a number of them already completed.
Another dynamic is the increased interest in “nearshoring” by US and Canadian companies to Mexico, as manufacturing costs and risks in Asia and China continue to climb. As more companies consider or make such a move, it will put even more focus on achieving logistics efficiency gains.
There certainly are a number of potential cost savings to shippers on both sides of the border. For example, forwarding agents on the Mexican border generally charge $100-$150 per load to facilitate the hand-offs.
(Transportation Management Article - Continued Below)