The U.S. government in 2007 put in place the Cross-Border Trucking Demonstration Project. The pilot program was eventually killed this March when Congress passed — and President Barack Obama signed — the Omnibus Appropriations Act of 2009, which cut off funding for it.
The debate over Mexican trucks entering the U.S., though, has not subsided. Critics of the program, like the Teamsters, applauded the move, claiming it allowed unsafe Mexican trucks onto U.S. roads, jeopardizing the safety of Americans. Proponents called it protectionism at its worst and said that the cancellation is a direct violation of the North American Free Trade Act (NAFTA).
But is that how Mexico views the program? The Mexican government immediately slapped $2.4 billion in tariffs on imported goods from the U.S. For their part, both President Obama and Secretary of Transportation Ray LaHood have promised to come up with a new initiative.
HISTORY OF VIOLATION
Another program, however, is not what Mexican fleets are looking for, according to Pedro Ojeda Cardenas, attorney for Camara Nacional Del Autotransporte De Carga (CANACAR), the dominant Mexican trucking organization, which has filed a $6 billion lawsuit under the auspices of NAFTA charging violation of the free trade agreement. The suit, Ojeda says, is not a reaction to the cancellation of the demonstration project, but rather a reaction to years of damages suffered by the Mexican trucking industry due to a “nearly closed” border.
“The fact is we are open to the United States, but they are not open to Mexico,” Ojeda says. Mexico-domiciled carriers can now carry loads into the U.S., but their trucks must stay within a 25-mi. border zone. In contrast, Canadian-based carriers can take any load into any city in the U.S., although they cannot pick up loads inside the U.S. border for delivery elsewhere in the U.S.
According to the Bureau of Transportation Statistics, 4.8 million Mexican trucks crossed into the U.S. in 2008, up only slightly since 1999 when 4.3 million entered. A report by the W.P. Carey School at Arizona State University (ASU) described the movement of goods between the U.S. and Mexico as the “slow dance of the three trucks.” The report detailed how a Mexican carrier usually travels to the border before handing off the shipment to a cartage company, which then hauls the goods into the U.S. for transfer to a U.S. carrier.
Safety and environmental impact are the two key complaints about Mexican trucks pressed by American opponents. Indeed, according to the ASU report, “Cartage vehicles are generally older and may emit more pollutants, causing environmental problems.” But proponents would counter those are not the trucks Mexican carriers would operate were they given equal access to the U.S. freight market. An open border, some argue, would actually improve the environment as long-haul Mexican trucks are modern vehicles equivalent to their U.S. counterparts.
“Mexican companies — the ones that have [seriously] done it — all have invested in equipment. They buy from the same manufacturers,” says Troy Ryley, director of transportation and distribution for Transplace Mexico, a transportation management services and logistics technology solutions provider and a subsidiary of Transplace Inc.
EVEN PLAYING FIELD
From Transplace Mexico's perspective, Ryley says, moving freight from Mexico to the U.S. is not difficult. “The northbound process is simpler for one main reason,” he says. “You are still required to do a Mexican customs brokerage, but it's much simpler than a southbound move. We built a special integrated platform that encompasses all of the traditional handoffs for border crossings.”
In the end, Ojeda says, all that CANACAR wants is a truly open border, like it was before 1982 when Mexican carriers could haul loads anywhere into the U.S. “I see the position of the Mexican trucking industry,” he says, “we don't want to harass anyone here. If [the U.S.] government comes with a program that is good and beneficial, the Mexican trucking industry would be open to discussions.”
“Europe is the ideal model, the ability for nations to cross borders,” Ryley says. “I don't think there has ever been a true parallel playing field for Mexican fleets.”