The three-year pilot program to allow Mexican trucking companies to fully enter the U.S. market has ended with a "quejido," a rough Spanish translation for "whimper."
The program, which permitted qualified U.S. and Mexican carriers to serve each other's markets beyond a 25-mile commercial zone along the border, expired yesterday with only 13 Mexican carriers participating. This fell short of the 46 Mexican trucker participants the Federal Motor Carrier Safety Administration (FMCSA) believed was the minimum needed to statistically determine the success of the controversial initiative. At the start of the program, FMCSA had set an upper-end goal of 316 carrier participants.
Through mid-July, FMCSA had conducted 5,175 inspections, more than the 4,100 inspections the subagency of the Department of Transportation said would be required to validate the program's performance. The Owner-Operators Independent Drivers Association (OOIDA), which represents owner-operators and which has opposed the program, said in an Oct. 1 letter to Acting FMCSA Administrator T.F. Scott Darling III that two Mexican carriers accounted for more than 81 percent of all inspections and 90 percent of all border crossings. Because two truckers consumed such a large proportion of the crossing and inspection activity, it became virtually impossible under the pilot to judge the fitness of the broader Mexican truck fleet, according to the OOIDA letter.
In the letter, OOIDA asked Darling how the agency plans to proceed beyond the pilot phase and what authority it has to extend the program or to make it permanent. Marissa Padilla, an FMCSA spokeswoman, issued a statement saying the agency is reviewing the inspection data to develop "a path forward" to protect the nation's highways while complying with language in the 1994 North American Free Trade Agreement (NAFTA) allowing Mexican trucks and drivers into U.S. commerce starting in January 2000.
The American Trucking Associations, which represents large carriers, said it supports the program's continuation as long as cross-border operations are conducted safely. The Teamsters union, which has fought the plan on grounds that it would undermine the jobs of American drivers, was unavailable to comment.
The NAFTA provision spent most of the last decade in diplomatic limbo, as the United States blocked its implementation on environmental and safety grounds. A two-year pilot program was launched in 2007 to allow 100 Mexican truckers to operate beyond the 25-mile commercial zone. In March 2009, Congress and the Obama Administration ended the program's funding. The move sparked a two-year trade war that resulted in Mexico slapping billions of dollars of punitive tariffs on numerous U.S. imports, including products like apples, which counted Mexico as its biggest foreign market. The 2011 pilot program was tentatively agreed to that March, effectively winding down the trade dispute.
Virtually no one in the private sector involved in the U.S.-Mexican truck market had high expectations for Mexican involvement. They cited Mexican carriers' concerns about liability exposure in the U.S. and the exorbitant cost of obtaining insurance. Mexican drivers would not be guaranteed a southbound load once they dropped off their northbound cargo. In addition, Mexican carriers are barred from accepting loads moving between U.S. points, thus keeping a very large market off-limits to them.
Troy Ryley, managing director of Mexico for Transplace, a Dallas-based third-party logistics provider with substantial cross-border truck exposure, said his business and the market have been unaffected by the program's progress or lack of it. "I have heard very little from the Mexican carriers on this," Ryley said in an email.
A meeting of the Motor Carrier Safety Advisory Committee, a group of 20 experts who advise the administrator on safety issues, is scheduled to meet Oct. 27-28 in Alexandria, Va., to discuss the issue.