Thread: Mexican trucks to haul freight on U.S. roads

Mexican trucks to haul freight on U.S. roads

By Larry Copeland, USA TODAY
Posted 32m ago

The ambitious but controversial North American Free Trade Agreement between the United States, Canada and Mexico from the 1990s is back, this time as the backdrop to a contentious new cross-border deal allowing Mexican freight trucks onto U.S. highways.

The agreement, announced last month by the Department of Transportation, is being assailed by critics as a possibly illegal undertaking that will take jobs from U.S. truckers and money from U.S. taxpayers. It is opposed by the USA's largest transportation union, the Teamsters, by a national association of independent truckers and by some federal lawmakers from both parties.

"We think it's unsafe, unfair and wrong for America," says Teamsters General President Jim Hoffa. "It's a danger to highway safety. … It will cost thousands of trucking and warehouse jobs."

He says the agreement is "probably illegal" because it goes beyond the scope of an earlier cross-border trucking pilot program that Congress killed in 2009.

Critics such as Reps. Peter DeFazio, D-Ore., and Duncan Hunter, R-Calif., argue that Mexico's trucking industry is far less regulated and monitored than the USA's and that the deal opens the way for Mexican narco-traffickers to gain a foothold on U.S. roads. They're not convinced by assurances that Mexican trucks and drivers will be carefully inspected and monitored by U.S. authorities.

"It takes $50 and a fake gold watch to get out of a speeding ticket in Tijuana," says Hunter. "This is a place where, if you think slapping a sticker on a windshield is going to stop the narco-traffickers down there from using that truck, I would say the (federal transportation) guys are extremely naïve."

Supporters hail the agreement as an end to tariffs that have cost U.S. companies more than $2 billion. They say it will create thousands of jobs and spur trade between the two nations. Supporters include top U.S. transportation officials, the nation's largest trucking industry trade association, businesses that export to Mexico and the U.S. Chamber of Commerce.

"If we're going to boost U.S. exports and create jobs here at home, we must hold on to our major export markets, such as Mexico, where American companies are already doing well," says Chamber President Thomas Donohue.

Patrick Kilbride, the Chamber's senior director for the Americas, could not provide specifics on how jobs will be created. But he says that in many cases, as U.S. companies cut back on trade with Mexico because of the tariffs, Canadian companies filled the void. "Twenty-two states count Mexico as their No. 1 or No. 2 export market," he says.

Several trucking officials say there won't be any immediate impact from the agreement. "Even if you implemented NAFTA trucking tomorrow, nothing's going to change (immediately)," says Martin Rojas, vice president for security and operations at the American Trucking Associations, which represents more than 37,000 members, including other trucking groups, industry-related associations and 50 affiliated state trucking associations.

Dave Akers, vice president of C.R. England, a Salt Lake City-based transporter and the world's largest refrigerated carrier, agrees: "This isn't a scenario of 'The Mexicans are coming, the Mexicans are coming,'" he says.

Mexican carriers wishing to participate in the program must apply to the Federal Motor Carrier Safety Administration, which will approve each driver and vehicle used, says FMCSA administrator Anne Ferro.

The agency will rigorously review each participating driver's record, including all violations cited in the USA or Mexico, and thoroughly inspect each participating truck for safety, she says.

Ferro says Mexican truckers will have to comply with U.S. restrictions that limit how many hours drivers can spend behind the wheel daily, including hours driven before they reach the border. "The United States is obligated under NAFTA to lift geographic limitations on trucking. We fully comply with every aspect of the law," she says.

But many U.S. truckers, especially small independent ones, see the agreement as a David-vs.-Goliath battle that gives Mexican truckers a huge edge. "It's the race to the bottom," says trucker Scott Grenerth of Arlington, Ohio. "Shippers will say, 'Oh, you'll do it for less? Well, we're going to hire you.' That happens all the time in this industry."

Data recorders on board

One aspect of the new program that has come under particularly sharp attack is a plan to install electronic on-board recorders — similar to a commercial passenger jet's black box or flight-data recorder — on each Mexican truck that participates.

The recorders will track truckers' movements within the USA, preventing them from illegally shipping freight from one U.S. city to another. NAFTA rules allow Mexican truckers to deliver only to one U.S. destination, then pick up a load from that destination or return to Mexico without a load.

The recorders also will detect Mexican truckers who drive more hours in one day than U.S. rules allow.

The recorders are being purchased by the Department of Transportation, a fact opponents criticize. "It is outrageous that U.S. truckers, through the federal fuel tax, will subsidize the cost of doing business for these Mexican carriers," DeFazio wrote to Transportation Secretary Ray LaHood. In an interview, he questions the wisdom of spending "thousands of dollars" for the recorders in difficult economic times.

Ferro says federal authorities can't require Mexican carriers to buy the recorders because they don't require them for U.S. truckers. She also says that by controlling the recorders, transportation officials will have access to the data they collect.

The recorders cost about $2,500 each, plus operating costs, Ferro says. "Overall, we've budgeted $2.4 million, $750,000 per year for three years, to cover the cost of on-board recorders."

Key parts never implemented

The North American Free Trade Agreement, which the U.S. Senate ratified on Nov. 20, 1993, took effect on Jan. 1, 1994. It was designed to remove tariffs between the USA, Canada and Mexico in the following 15 years.

NAFTA allowed Mexican trucks full access to highways in border states by 1995 and to all highways in the USA by 2000, with similar provisions for U.S. trucks in Mexico.

However, largely because of political resistance rooted in concerns such as the current ones, those provisions were never implemented. Mexican trucks have mostly been confined to a 25-mile commercial zone on the USA side of the border. Canadian trucks have no such restrictions.

Under then-President George W. Bush, a pilot program similar to the current agreement was begun in 2007. Each nation allowed up to 100 trucking firms to transport international cargo beyond the commercial zone on either side of the border.

The Obama administration cut funding for the program in March 2009. Mexico responded immediately, levying retaliatory tariffs against U.S. imports. Nearly 100 products were covered — items as wide-ranging as pork, Christmas trees, frozen French fries, fruits, nuts, tomato ketchup and pet food.

The tariffs have cost U.S. businesses "over $2 billion in tangible costs," Ferro says. A 2009 report by the U.S. Chamber found that failure to implement NAFTA's trucking provisions coupled with the tariffs had cost the USA 25,600 jobs.

One U.S. trucking company stung by the tariffs is C.R. England, which has operations throughout the USA, in Mexico and China. "We're very excited (about the new agreement)," says Akers, vice president for Mexico. "The potential for upside positive impact to the U.S. economy is great."

Akers says he can't point to any job losses at his company as a direct result of the tariffs. But, he says, "As U.S. exporters are able to more robustly grow their business via the facilitation of export growth, that could imply a more positive employment situation."

Trucking vital to Mexico

Bruno Ferrari, the Mexican Secretary of the Economy, says the agreement will help make his country more competitive in the global economy. "For us, it's quite important," he says. "More than 70% of our bilateral trade, which is over $400 billion, moves across the border by truck."

He says the deal "will represent a 15% savings in transportation costs" for Mexican shippers by eventually eliminating what's known as the drayage system: A Mexican trucker with freight bound for the USA brings it to the border and unhooks his trailer; a drayage shipper hooks up to the trailer and hauls it across the border, where a U.S. trucker hooks it up and takes it to its final destination. Canadian drivers face no such barriers.

Opponents of the cross-border agreement who fear job losses don't offer any specifics. DeFazio says there's a "potential for very substantial job loss."

Hoffa says the agreement was sought by U.S. companies that have relocated to Mexico and now seek cheaper ways to ship goods north, He says it could cost "thousands and thousands of jobs."

Norita Taylor, a spokeswoman for the Owner Operator Independent Drivers Association, a Grain Valley, Mo.-based organization that represents more than 150,000 independent drivers and small trucking firms, says there is a potential for "substantial" job loss. She says U.S. companies would hire Mexican drivers because they could pay them far less than U.S. drivers.

U.S. transportation officials dismiss the job loss projections. They say NAFTA rules prohibiting Mexican truckers from shipping goods from city to city in the USA will prevent U.S. companies from hiring them. "It's a false argument," Ferro says.

However, Herb Schmidt, president of Con-way Truckload, which has 3,700 employees, including 3,000 drivers, says U.S. trucking companies — which face a driver shortage here — could poach Mexican drivers who have already been properly screened and passed background checks. "Absolutely," he says.

But Schmidt says his conversations with more than 60 Mexican companies lead him to believe that Mexican trucking firms don't want to compete with U.S. shippers. Schmidt, who opposes the agreement, doesn't expect Mexican carriers to ship deeply into the USA. "I think we're going to see a few Mexican carriers have small little regional operations serving towns close to the border," he says. "Other than that, things won't really change."

U.S. truckers must operate within a restrictive network of regulations that cover everything from the air in their tires to the fitness of their vehicle and their bodies — "a Bible-sized" book of regulations, as trucker Grenerth puts it.

A trucker for more than 10 years who hauls steel and aluminum in the Midwest, Grenerth believes that Mexican truckers, who earn less than half as much per mile as U.S. truckers, will have a competitive advantage.

"If the Mexican truckers' standards are on a par with our standards, where we can compete in a fair and honest and just way, then I don't mind whom we trade with," says Grenerth, 41. "But you cannot regulate the regulatory environment in another country."

http://www.usatoday.com/money/economy/2 ... ways_n.htm

Lets see how long this goes before we start hearing of bad thins happening.

A trucker for more than 10 years who hauls steel and aluminum in the Midwest, Grenerth believes that Mexican truckers, who earn less than half as much per mile as U.S. truckers, will have a competitive advantage.

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Of course they will have an advantage.

WalMart and Tyson will pocket the difference.

Who can't figure this out?