DOT approved Mexican carrier to begin long-haul trucking in U.S.
Within hours of receiving a second report from its inspector general that all safety pre-conditions had been, the Department of Transportation Thursday night officially launched its controversial one-year demonstration program allowing Mexican long-haul carriers to operate deep within the United States.
The Federal Motor Carrier Safety Administration, which will oversee the pilot project, immediately announced that Transportes Olympic, based near Monterrey, was granted authority to operate beyond the 20-mile commercial zone that has limited most Mexican motor carriers to cross-border shuttle duty for the past 25 years and that Stagecoach Cartage and Distribution of El Paso, Texas, is the first U.S. carrier ever approved by the Mexican government to operate south of the border.
The newly certified trucking companies could be conducting long-haul operations within days after first finalizing delivery routes with customers.
The two countries have agreed to grant reciprocal rights to truckers after criticism about an earlier version of the plan would have allowed Mexican carriers access to the U.S. market for several months before U.S. carriers could move into Mexico. The pilot program is capped at 100 trucking companies from each side.
In a conference call with reporters late last night, FMCSA Administrator John Hill said that 17 more Mexican highway carriers will be approved in September to operate in the interior of the country. Up to 25 trucking companies per month for the following three months will be approved until the program is full.
The FMCSA has 38 Mexican carriers in the pipeline that passed a safety audit earlier this year when FMCSA originally tried to launch the program before being blocked by legal challenges and Congress. Those carriers have a total of about 176 tractors approved for use in the United States. Based on that ratio of companies to vehicles Hill projected that from 500 to 600 Mexican trucks will eventually participate in the program. Transportes Olympic will place two trucks in the program for U.S. service.
Hill said he believes Mexican regulators are prepared to grant operating authority to 14 American motor carriers.
Carrier participation is expected to increase to 100 companies once the uncertainty about the program’s status is removed and carriers see they can make regular delivery schedules, Hill said.
The opening of the border to trucking companies was included as part of the North American Free Trade Agreement, but has continually been blocked by Congress over alleged concerns that Mexican truckers would pose a danger on U.S. highways and would have a competitive advantage over their U.S. counterparts because they don’t have to comply with same strict safety standards. Proponents of opening the border say it would increase efficiency and reduce transportation costs by doing away with an antiquated system that requires three separate handoffs to move goods across the border. Mexican carriers that pick up goods at the customer site have to transfer the shipment to a local cross-border drayage company, which in turn has to transfer the shipment to a U.S. carrier for inland distribution. A whole economy of customs brokers, freight forwarders and warehousemen has cropped up in Texas and other border states to facilitate the exchange of cargo.
Hill said a reformed system would mean less traffic and pollution, and more opportunities for U.S. carriers.
In 2002, Congress established a long list of standards that the DOT had to meet before it could begin a pilot program. On Thursday, DOT Inspector General Calvin Scovell reported to Congress that all the conditions had been met. The report identified three issues that need correction prior to start of the program, which administration officials said they have done.
Those issues involve ensuring that procedures are in place to inspect all Mexican trucks at the border, sufficient guidance has been given to state police inspectors who will implement enforcement guidelines in the interior of the country, and that application forms are complete.
Mexican carriers will be subject to three rounds of possible inspections. All carriers will undergo a safety audit of their operations, procedures and records, and vehicles designated for the test program will be inspected by FMCSA personnel before being allowed to participate. The trucks will also be visually inspected each time they cross the border. FMCSA has worked out procedures for U.S. Customs and Border Protection to provide advance notice of arriving long-haul trucks to safety inspectors stationed on or near the border crossing compound, Hill said. Under CBP procedures, all trucks must fax or electronically file their cargo manifest up to two hours prior to arrival at the border.
Finally, trucks are subject to random road-side inspections and enforcement procedures by state authorities and can be placed out of service if they fail any portion of the inspection while operating within the United States.
Hill said safety will not be compromised because the Mexican trucking companies must abide by the same or stricter safety standards that apply to U.S. carriers, must carry a U.S.-based insurance policy, comply with hours-of-service rules, meet driver qualification standards, and have drivers undergo drug and alcohol testing. In fact, Mexican domiciled carriers operating in the United States have slightly lower out-of-service rates than those of U.S. companies, he said.
Hill said his agency is well prepared to monitor the safety of the Mexican carriers. Congress has appropriated about $500 million to build inspection facilities and hire inspectors for the cross-border program, and the agency has 254 inspectors dedicated to the program, along with 500 inspectors from border states that enforce truck safety. The ratio of inspectors is quite high when compared to the overall force of 10,000 inspectors for 8 million registered commercial vehicles and 600,000 motor carriers in the United States overall, he noted.
The Mexican trucks must display a decal issued by the Commercial Vehicle Safety Alliance that is valid for three months and can only be renewed by passing another inspection.
Asked how FMCSA will be able to enforce cabotage restrictions — meaning domestic rather than international freight runs — Hill said the agency will investigate reports of such rule violations, which could lead to civil penalties and possible suspension of authority to operate in the United States. State law enforcement officers are being trained to identify domestic vs. cross-border service.
“These Mexican carriers will be getting a lot of attention when they go around the country. If they are becoming involved in any sort of domestic move it will become very apparent to the officer,” Hill said.
The demonstration program will be monitored and reviewed by three groups. A binational monitoring group will keep an eye on the operational effectiveness of the program, the DOT inspector general will report to Congress within six months about its progress and DOT Secretary Mary Peters has appointed an independent panel that includes former DOT Inspector General Kenneth Meade and Mortimer Downey, a former deputy secretary of transportation. The conclusions of these groups will determine how the program needs to be tweaked or whether it should be expanded after the demonstration period has ended, Hill said.
Last week a U.S. Court of Appeals denied a request by the International Brotherhood of Teamsters, environmental groups, safety watchdog Public Citizen and the Owner-Operator Independent Drivers Association to stay the start of the DOT’s pilot program. The groups have vowed to continue litigation to stop the program.
In early June, a bipartisan collection of more than 100 House members signed a letter delivered to the president expressing 'grave concerns' about the administration's continuing efforts to move the plan toward a launch date.
Later the same month, the DOT's plans received a more serious blow, with the U.S. House voting to limit funding to the proposed program.
“This is a sad day for America,” Rep. Peter DeFazio, D-Ore., said in a statement. “Mexican trucks pose a serious threat to the safety of our highways and the security of our country. This administration is hell-bent on opening up our borders, but has failed to require that Mexican drivers and trucks meet the same safety and security standards as US drivers and trucks. That’s simply unacceptable. The administration is essentially adopting a faith-based paper system without adequate protections for public safety.”
An often overlooked aspect of the debate on this issue is that about 800 Mexican carriers operate in the U.S. interior because of a historical anachronism. Those are the remaining carriers that were grandfathered under deregulation in 1982 to maintain their existing operating authority and continue operating.