Borders are open, but inspection protocols still up in the air

The Bush Administration has made it clear that it will allow Mexican trucks to deliver goods to U.S. destinations in compliance with the North American Free Trade Agreement (NAFTA), which had been in limbo for five years. Some key issues remain unresolved, however.

The agreement says that Mexican trucks will be subject to the same safety regulations imposed on U.S. and Canadian carriers, which presents a major hurdle for U.S. inspectors. According to DOT, about 36% of the Mexican vehicles inspected were put out of service for failing to meet safety standards, compared to less than 25% of U.S. trucks. Since only about 1% of all Mexican trucks were actually inspected, DOT recommended increasing the number of federal inspectors at U.S./Mexico border checkpoints from 60 to at least 120.

The Bush Administration could help alleviate safety fears by beefing up the ranks of federal inspectors. However, it might instead try to defuse the situation by citing a DOT report noting that many of these safety-deficient, so-called ‘drayage’ trucks were designed for short hauls to stay within the interim NAFTA compromise of 20 miles from the Mexican border. It was presumed that longhaul trucks pressing deeper into the U.S. would be newer and better maintained.

Mexican trucking firms claim that if they were allowed to run according to NAFTA rules, they would see increased profits and would be better able to invest in newer equipment. But they have a way to go; the average age of vehicles in Mexican fleets is 16 years, compared to 5 years for U.S. carriers.

“Safety enforcement must be level,” says Pat Quinn, first vice-chairman of the Truckload Carriers Assn. and president of U.S. Xpress Enterprises. Like many other carrier executives, Quinn believes that change resulting from NAFTA will occur slowly because most U.S. carriers have built comfortable relationships with Mexican trucking companies, which serve them well.

“I don't see a big flood immediately,” adds Herb Schmidt, president of Contract Freighters. “We've got the legal aspects, which will work out, as well as the practical aspects such as language and cultural barriers.” He believes that Mexican drivers who don't speak English and aren't used to U.S.-style roads, signs and regulations may be too intimidated to make deliveries to states far from the border.

Another contentious issue is whether Mexican carriers will abide by cabotage rules. According to current NAFTA regs, which should also apply to Mexican trucks, Canadian carriers are not permitted to haul goods between U.S. cities. After dropping off their foreign loads, they're only allowed to deliver goods back to Canada; exceptions are made for loads that are incidental to the return trip.

A Canadian carrier, for example, that delivers a load from Toronto to Miami can make a delivery in St. Louis if it picks up a new load there that is destined for Canada. The load from Miami to St. Louis is considered incidental to the overall trip.

NAFTA opponents say Mexican carriers have a history of skirting U.S. rules and may try to stretch this one, too. They point to a DOT report that found Mexican carriers routinely traveling outside the border states, disregarding U.S. regulations. “It would be easy for them to pick up a load in New York, drop it in Los Angeles, and find a load home because of all the traffic between L.A. and Mexico,” says one opponent. “It would be within the letter of the law, but would undercut our labor force and compromise the public's safety.”

Despite these challenges, the dream of a seamless North American trade economy is finally on its way to becoming a reality. “It will be tough for the next several years, maybe even the next decade,” says Schmidt. “But when the dust settles, it will be better for everyone.”