More Mexican trucks could soon be on Texas highways
Border Crossing
By January 2000, Texas was supposed to be humming with commercial trucks from Mexico. It's not yet, but it could be soon.
The border shared by the United States and Mexico is more than 2,000 miles long, about 1,200 miles of which runs along the southern part of Texas. The North American Free Trade Agreement (NAFTA), which went into effect January 1, 1994, essentially opened that border--as well as the U.S.-Canadian boundary--to trade, creating the largest free-trade area in the world.
According to a December 2001 report from the U.S. General Accounting Office (GAO), trade more than doubled between the U.S. and Mexico in the six years following NAFTA's implementation, going from $100 billion in 1994 to $248 billion in 2000. Similarly, the number of truck crossings nearly doubled, jumping from 2.7 million in fiscal 1994 to more than 4.3 million in 2001.
The report says there are 25 commercial ports of entry along the U.S.-Mexico border. Three of the busiest are in Texas: Laredo, El Paso and Hidalgo/Pharr near McAllen. According to GAO statistics, Laredo's entry points handle about 33 percent of all truck crossings, almost 1.5 million a year.
Texas' 13 entry ports handled approximately 68 percent of all Mexican truck traffic crossing into the U.S. in fiscal 2001, almost 3 million individual loads.
Opening the roads
A NAFTA arbitration panel ruled in February 2001 that the U.S. was in violation of its NAFTA obligations because the U.S. only allowed Mexican trucks to operate within designated commercial zones in Texas, California, New Mexico and Arizona. Commercial zones are typically three to 20 miles north of border cities, according to the GAO. The commercial zones in Texas can extend up to 25 miles from the border.NAFTA provided for commercial trucks from both Mexico and the U.S. to operate in both countries' border states by December 18, 1995, and beyond the border states by January 1, 2000.
In response to the arbitration panel ruling, U.S. officials announced they would comply with NAFTA obligations and allow Mexican commercial trucks beyond commercial zones by January 2002. So far, that has not happened.
The GAO concluded in its report that the U.S. is not ready to handle the existing load of Mexican commercial traffic traveling further into the country or any increase in traffic that might result from lifting the commercial-zone limits. The GAO report did point out several factors that may keep an increase in traffic slow.
The report says a lack of established relationships with American companies may keep some Mexican trucking companies from expanding operations further into the U.S. In Texas, most Mexican carriers likely do not have a large array of business contacts beyond the commercial zone. This increases the chance they would not have cargo to take back to Mexico, making inland trips less profitable.
"It will take time to build trade relationships. To be profitable, a [Mexican] trucking company has to have cargo to take back with them after they've reached their destination. Right now that doesn't exist," says Maj. Coy Clanton of the Texas Department of Public Safety (DPS).
The GAO says congestion and delays at border crossings lead to long waits at inspection points and adding more traffic will only lengthen those stays. The office says Mexican officials report border-crossing delays have increased since the terrorist attacks of September 11, 2001, and such delays may also affect how quickly some Mexican trucking companies expand their operations into Texas and the U.S.
Operating in the U.S. could be expensive for Mexican carriers for several reasons. Carriers need insurance, and the GAO says insurance officials expect the cost to be high and the number of insurance companies willing to write policies to be low. The GAO does not know how many U.S. companies provide insurance coverage for Mexican carriers that operate within the U.S. but estimates it could be fewer than 10.
Stricter safety regulations and inspections also can cost carriers since many companies buy newer, more expensive equipment to meet standards.
Mexican trucking companies--like all other carriers--also must pay registration fees to each state in which they operate. The U.S. and Canada participate in the International Registration Plan (IRP), a plan that allows one state to collect registration fees and distribute them to all appropriate jurisdictions, but Mexico does not participate. Mexican companies must instead purchase individual permits in each state in which they operate, which can add thousands to the cost of the fees.
Time is running out
Trucks entering the U.S. from Mexico must be registered with the Federal Motor Carrier Safety Administration and be authorized to operate within the U.S. The trucks must have valid Mexican license plates, and the operator must have a valid license. Verification of these regulations requires inspectors.The GAO reported only two of 25 commercial entry points have permanent inspection facilities. The GAO identified this lack of adequate facilities as the U.S. Department of Transportation's (DOT) major hurdle in adequately preparing for increased traffic. Both existing facilities are state-owned inspection stations in California, but Texas is preparing to meet the needs on its own border.
The Texas Department of Transportation (TxDOT) and DPS are creating eight permanent inspection stations. At least five of the stations will be operating by summer 2002 using temporary facilities, and permanent facilities for all eight should be completed by fall 2004. Clanton says when that happens, Texas might extend its commercial zones but is not likely to eliminate them.
"I think what you might see," Clanton says, "is a possible expansion of it, like to San Antonio or maybe [the ports] at Houston, then later the Dallas area." Clanton says that decision lies ultimately with the DOT.
Clanton says adding facilities and responsibilities means adding personnel. He says the DPS will need to add more than 270 commissioned and non-commissioned personnel to its License and Weight Service to staff inspection stations and entry ports.
He says increasing the DPS presence at commercial ports along the border puts more available inspectors at ports of entry to handle safety inspections, and may encourage Mexican truck owners to comply with safety regulations on their own. That could help ensure trucks meet safety standards and expedite the inspection process.
"The more voluntary compliance we can get, the better off we'll be," says Clanton.
The typical Mexican cargo coming across the border is carried in at least three different trucks: the truck that brings goods to the border; the truck that crosses the border with the cargo; and an American carrier that picks up the cargo within the commercial zone to carry cargo within the U.S.
Clanton says opening or expanding the commercial zone may lead to more Mexican trucks on roads, but he adds that doing so would eliminate the need for the second and third trucks. In addition, he says, "The long-haul trucks coming from Mexico are going to be in better shape than the short-haul ones [that cross the border]."
Some American carriers worry they'll be replaced by Mexican carriers. Clanton says there should still be enough trade to go around.
The Texas Motor Transportation Association (TMTA), which represents the trucking industry in the state, endorses NAFTA as long as highway safety is not compromised, the maintenance of the Texas highway system does not suffer from any increase in truck traffic and equal opportunities exist for Texas truckers through NAFTA.
"If NAFTA allows carriers from Mexico to come in and only be required to obey safety regulations and nothing else, then it would be possible for them to not have any obligations to pay any social security taxes, school taxes or any workers' comp or any of the economic burdens that the U.S. carriers experience," says TMTA's Les Findeisen. However, he says, "Given an equal playing field and strong enforcement, TMTA believes NAFTA represents a tremendous opportunity for all parties involved."
Doing their part
Mexico is taking steps to ensure its trucking fleet is ready to travel in the U.S. The GAO reports that since 1992 Mexican officials have implemented specific guidelines dealing with the safety of commercial trucks and buses.Mexican officials also report that Mexico has trained 350 inspectors from its Secretariat for Communication and Transportation and 5,000 members of the Federal Preventive Police to inspect vehicles.
Clint Shields
