Mexican Fleets Face Barriers to Operating in United States
This story appears in the Feb. 2 print edition of Transport Topics.
Cabotage rules, hours-of-service regulations and emissions standards are among the barriers likely to discourage Mexican carriers from applying in large numbers to run longhaul in the United States, trade experts said.
In addition, cross-border supply chains, especially in the automotive and electronics industries, have become fixed, and whether Mexican carriers apply to run here may depend on whether those sectors grow, the experts said.
“If you’ve got more trade on each side of the border, does it become a bigger pie? That’s the question,” said Thomas O’Brien, director of the Center for International Trade and Transportation at California State University, Long Beach.
The United States announced Jan. 9 that Mexican carriers would be allowed to run longhaul here provided they meet the same financial and operating standards as U.S. carriers.
Dante DiGregorio, associate professor and trade expert at the University of New Mexico’s Anderson School of Management, also said he didn’t see the opening of the border greatly increasing the number of Mexican trucks that want operating authority here.
“You see how long it takes trucks to line up [to cross the border], and even after Mexican trucks are allowed inside, there are still going to be a lot that [are] just drayage. And those . . . aren’t all going to go deeply into the U.S. because mostly they have to return home empty,” DiGregorio said.
PHOTO GALLERY: A visit to the Mexico-U.S. border.
Cabotage rules prevent foreign carriers from delivering a load in the United States and then picking up another load to deliver to a second U.S. location, making it unprofitable for most Mexican carriers to operate longhaul here, Texas A&M Transportation Institute researcher Juan Carlos Villa told Transport Topics.
Mexican carriers must obey U.S. hours-of-service rules, and once the rule is finalized that all trucks have electronic logging devices to monitor driver hours, Mexican trucks must have the devices, the Federal Motor Carrier Safety Administration said.
“It’s much different, more strict enforcement in the U.S. than in Mexico, so, I think it would also not be very efficient for Mexican carriers,” Villa said.
Emissions rules are another barrier to Mexican carriers running here, Villa said. Besides tough U.S. standards, California requires newer vehicles to comply with its own emissions regulations, he said.
The border opening makes the United States compliant with the North American Free Trade Agreement that was approved in 1993 and stipulated longhaul Mexican carriers could run here. The opening was delayed due to opposition from Teamsters and some in Congress who said Mexican carriers are not safe and will take jobs from U.S. drivers.
Since the application process for operating authority was opened, one Mexican carrier has begun the process, FMCSA spokeswoman Marissa Padilla said.
Micheal Jimenez, president of J&L Transportation in Phoenix, said, “This opening of the border is not going to show us anything different in the first several years until everybody understands how they’re going to operate in the other country.”
Jimenez was referring to the “cultural difference” between the United States and Mexican trucking industries, citing
language barriers, differing weight limits, insurance requirements and hours-of-service logging requirements.
“Until that cultural difference is overcome, the Mexican drivers don’t feel comfortable in the U.S. with our logs and regulations, and the American drivers don’t feel comfortable in Mexico with their logs and regulations,” said Jimenez.
Twenty-six of J&L’s 46 trucks run between Phoenix and the border crossing at Nogales, he said. The cargo J&L hauls to the border is transferred to a Mexican drayage trucker who is allowed under a U.S. “commercial zone” permit to run the cargo across the border, where it’s then transferred to a truck owned by a Mexican carrier.
When J&L picks up freight coming in from Mexico, the same operation has been run in reverse, he said.
There are about 4,200 of the drayage or “commercial zone” Mexican carriers operating in the border states of Arizona, California, Texas and New Mexico, said an FMCSA report released with the announcement on the border opening.
However, these Mexican-owned carriers haul only international freight and can operate only in commercial centers not more than 20 miles from the border.
A second category of Mexican-owned carriers is known as “enterprise.” There are about 700 of them that have been allowed to run longhaul in the United States, FMCSA said. Enterprise carriers must be headquartered in America and can carry only international cargo. Jimenez said he expects the enterprise model will expand here in the coming years rather than Mexican-domiciled carriers running longhaul here.
“The Mexican carriers have a U.S. division, and they have a Mexican division,” he said, explaining that they transfer their cargo, using the commercial zone carriers, to their Mexican-division trucks once in that country and vice versa when running cargo north.
“We go back to the cultural division,” Jimenez said. “It’s hard for them to staff drivers that go to both countries.”
Michael DeMers, a planning program manager who handles multimodal commerce issues for the Arizona Department of Transportation, predicted that the opening of the border will play out differently in coming years, depending on the border state being examined.
“We’re really not going to see much of an impact in terms of commodities, things like grapes and stuff that are grown in Mexico,” DeMers said of Arizona. “The supply chains are different than the manufacturing supply chains,” he said.
Texas is another issue, however, he said, explaining that any growth in Mexican carriers coming to the United States is more likely to occur there.
If such growth occurs, it will “make more of a difference on the really long supply chain side with the automotive and [other such industries],” he said.
“It’s a high-value supply chain that goes between the Midwest of the United States and central Mexico,” he said, “so you have one [business] that’s in charge of the entire supply chain
and the entire performance of the trip.”
