The Department of Transportation (DOT) said late Friday it will give qualified Mexican truckers permanent authority to serve the U.S. market after a three-year pilot program that expired in October showed Mexican carriers' safety records are comparable to those of U.S. drivers.
In return, the Mexican government agreed to permanently terminate more than $2 billion in tariffs on U.S. goods imposed in 2009 after the U.S. ended a two-year pilot program allowing up to 100 Mexican carriers access to U.S. markets beyond a 25-mile "commercial zone" on the border. The retaliatory Mexican tariffs were phased out after both countries agreed in October 2011 to the new three-year pilot. However, Mexico had not agreed to permanently shelve them.
In a statement Friday, DOT Secretary Anthony Foxx said that data from the pilot program, combined with an analysis of 952 Mexican truckers that operated during the three-year period under pre-existing authority, "proved that Mexican carriers demonstrate a level of safety as high as their American and Canadian counterparts."
Fifteen Mexican truckers had enrolled in the pilot program, DOT said. During the three-year period, they crossed the border more than 28,000 times, travelled more than 1.5 million miles within the U.S., and underwent more than 5,500 inspections by U.S. truck safety officials, DOT said.
DOT is expected to announce Thursday that it is ready to accept applications from Mexican carriers to conduct long-haul operations into U.S. commerce.*
The pilot program generated what could best be considered lukewarm interest from the Mexican trucking community. During the three-year period, 19 carriers received a DOT safety audit. Of the 16 that passed the audit, 15 operated during the pilot period. The Federal Motor Carrier Safety Administration (FMCSA), a DOT subagency that managed the program, had said at least 46 Mexican truckers would be needed for the data to be considered statistically valid. FMCSA had set a top-end goal of 316 Mexican carrier participants.
The Teamsters union, which has opposed the program from the start, was sharply critical of Friday's announcement. General President James P. Hoffa said the agency chose to ignore its own internal findings that the pilot did not provide enough data to either gauge the safety performance of Mexican carriers or to determine if the carriers participating in the pilot would be representative of those that would actually serve the market.
"This policy change by the DOT flies in the face of common sense and ignores the statutory and regulatory requirements of a pilot program," said Hoffa. "Allowing untested, Mexican trucks to travel our highways is a mistake of the highest order, and it's the driving public that will be put at risk by the DOT's rash decision."
The two main U.S. trucking groups, the American Trucking Associations and the Owner-Operator Independent Drivers Association (OOIDA), held divergent views on the program. ATA, which represents large carriers, supports the program's continuation as long as cross-border operations are conducted safely. OOIDA, which represents owner-operators and truckers with small fleets, opposed the program on safety grounds. It has been perceived that U.S.-based owner-operators would be those most vulnerable to any competitive threat posed by Mexican truckers. The Teamsters, for their part, have made clear they believe the provision would undermine the jobs of American drivers.
Throughout the three-year process, most private-sector observers believed the program, for all the collateral damage it caused due to the trade dispute that cost U.S. exporters billions of dollars in business, would generate little interest from Mexican truckers. They cited Mexican carriers' concerns about liability exposure in the U.S. and the exorbitant cost of obtaining insurance. Mexican drivers also would not be guaranteed a southbound load once they dropped off their northbound cargo. In addition, Mexican carriers would continue to be barred from accepting loads moving between U.S. points, thus closing off a very large market to them.
The truck access dispute dates back to the 1994 implementation of the North American Free Trade Agreement. Language in the agreement mandated that U.S. markets be open to Mexican carriers by Jan. 1, 2000. However, safety and environmental concerns kept the provision in legal limbo until 2007, when the first of the two pilot programs was launched.
Editor's note: An earlier version of this article said that the Department of Transportation will begin accepting applications on Jan. 22. It actually will begin accepting applications on Jan. 15.