From SCDigest's On-Target E-Magazine
April 11, 2011
Logistics News: Controversial Mexican Trucking Program to move Forward with Expanded, Three Year Pilot Program
Obama Administration Proposes New Plan after Shutting Down Bush Era Pilot in 2009; This Time, No Limit on Number of Trucks; Tracking them with GPS
SCDigest Editorial Staff
Two years after a then new Obama administration stopped a controversial pilot program aimed at meeting the long delayed requirements for cross border trucking with Mexico required under the North American Free Trade Agreement (NAFTA), the Department of Transportation on Friday unveiled its proposal for a new, significantly expanded pilot that would allow trucks from both countries to freely operate in each other's markets for three years.
The DOT said the program was designed to "to test and demonstrate the ability of Mexico-based motor carriers to operate safely in the United States beyond the municipalities and commercial zones along the United States-Mexico border."
SCDigest Says: |
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| While larger trucking companies have been relatively supportive of the Mexican programs, there is strong resistance from smaller firms towards the deal. |
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What Do You Say?
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Currently, trucks from Mexico can only operate inside the US within a narrow band of space inside the border, and the same is largely true for US trucks going in to Mexico. This means for many of the millions of shipments going in each direction every year, costly hand-offs must be made to trucking firms of the other country after cross the border.
A more open flow of trucks was one of the many components of the NAFTA agreement between the US, Canada and Mexico in 1994. However, concerns about the safety of Mexican trucking operations and drivers, as well as opposition from many US trucking interests and members of Congress, stalled efforts to implement the requirements for years.
Under pressure from Mexico to live up to the NAFTA accord, the Bush administration launched a pilot program in 2007, despite much resistance from Congressional Democrats, who had taken both houses of Congress in the 2006 election. That pilot allowed a total of 100 firms and 500 trucks to operate in the US. However, uncertainty about whether the program would survive meant very few Mexican truckers participated in the pilot, which proved little in the end.
After Obama's election, the DOT cancelled the pilot after it was defunded by Congress, causing Mexico to retaliate with tariffs on a number of US agricultural products that put a big dent in exports to Mexico in some product areas. Somewhat surprisingly, that ultimately led to the latest move by the Obama DOT to not only restart a pilot effort, but to expand it.
Trucking companies on both sides would be allowed to cross the border and deliver goods for at least three years, according to the plan, a full copy of which can be found here: Pilot Program on NAFTA Long-Haul Trucking Provisions. Upon this release, there will be a 30-day comment period, followed by issuance of the final new rules.
Participating Mexican carriers and drivers would be required to comply with all applicable U.S. laws and regulations, including those concerned with motor carrier safety, customs, immigration, vehicle registration and taxation, and fuel taxation. Each carrier will be assigned an identification number, and each driver from Mexico must have a valid commercial driver's license from the country, which would be regularly inspected.
The program is designed to be implemented in phases. For example, Mexican trucks from a given carrier would be inspected each time they enter the US for a period of three months. Assuming satisfactory results, the carrier would have its vehicles inspected at the same rate as existing trucks that operate today in the 25-mile commercial zone where Mexican truckers can currently travel. After a series of performance gates, the trucking company would receive permanent authority to operate within the US.
The program applies only to "international cargo," meaning the Mexican truckers cannot provide point-to-point domestic service within the US.
Interestingly, the US government will equip each vehicle with an electronic monitoring device such as a global positioning system and/or electronic on board recording device, which will be used to track Mexican truckers operating in the country.
(Transportation Management Article Continued Below)
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Said Bill Graves, CEO of the American Trucking Associations: "ATA expressed concerns to DOT about the U.S. government’s earlier proposal to pay for and provide electronic onboard recorders to Mexican trucks participating in a proposed pilot program. DOT has changed this specific requirement to allow for GPS systems to also be used for tracking purposes to ensure compliance with U.S. cabotage and hours of service regulations. We believe this is a sound change by the administration."
