Borderlands is a weekly rundown of developments in the world of United States-Mexico cross-border trucking and trade. This week: Texas toll road traffic rises above pre-pandemic levels; Texas expands CDL testing, renewals throughout November; Mexican manufacturer opens global office in Washington; and cross-border trucking insurance firm acquired by Marsh McLennan.
Texas toll road traffic rises above pre-pandemic levels
Traffic levels on the Texas State Highway 130 toll road are surging to pre-pandemic levels and higher, according to the company that operates the public-private thoroughfare in the Lone Star State.
“We have experienced quite dramatic growth in this post-COVID period. We’re well over our pre-COVID volumes on the road,” Doug Wilson, CEO of SH 130 Concession Co., told FreightWaves.
State Highway 130 runs 91 miles through central Texas. SH 130 Concession operates a private toll road that runs along a 41-mile stretch of the highway from just southeast of Austin south to Seguin, a town about 30 miles east of San Antonio.
During the period from March through October of this year, the SH 130 Concession Co. roadway saw more than 7 million transactions, 31% higher than the pre-COVID period in 2019. The road is owned by the state, which has a lease agreement with SH 130 Concession until 2062.
Wilson attributes the surging traffic along the toll road to commercial and residential growth in the region, along with businesses reopening and slowly returning to normal.
“Traffic on any toll road is very location specific, and our location is seeing dramatic growth. We’re exceeding our pre-COVID levels because of this growth in economic activity, and because this is a major corridor for freight traffic which has been very strong,” Wilson said.
The base toll rate for passenger vehicles is $7.84 with an electronic tag to travel the entire length of the toll road. The base toll rate for an 18-wheeler with one trailer is $31.40 with an electronic toll tag.
Earlier this year, SH 130 Concessions teamed up with the Texas Trucking Association (TXTA) to persuade more trucking companies to use the toll road through a program of rebates and incentives.
FreightWaves SONAR platform includes the outbound tender market share index that measures the relative percentage of outbound tender volumes in each market in the U.S., adding up to 100. The Austin market accounted for .32% of the total outbound truckload demand recently.
Tractor trailer traffic on the tollway has increased annually by double digits year-over-year since 2014. There were about 1.8 million tractor-trailer transactions from March through October 2021, an increase of 37% over the comparable pre-COVID period in 2019.
James Lovett, director of public affairs for SH 130 Concession Co., said they have good relationships with both TXTA and the Laredo Motor Carriers Association.
“The program has performed well and we’re getting good feedback.” Lovett said. “Through our partnerships with great groups like TXTA and the LMCA, we’re able to connect directly with carriers to analyze their traffic movements through the corridor and develop a program that fits.”
Wilson said they are exploring options to continue the incentive program for carriers, examining whether they need to tweak it to entice more trucking companies while maximizing revenue.
“This transportation corridor is changing so fast. One of the reasons SH 130 is here is to try to get trucks off I-35,” Wilson said. “We would love to understand where the pricing sensitivities and the critical pricing points are for these trucking companies.”
The southern portion of the SH 130 toll road, which opened in 2012 at a construction cost of $1.35 billion, was initially touted as a way to alleviate gridlock on Interstate 35 through Austin. It was initially built under a public-private partnership agreement between Madrid, Spain-based Ferrovial Construction and San Antonio- based Zachry Construction.
I-35 through Austin has some of the worst congestion in the nation, according to a recent study by the American Transportation Research Institute. The stretch was ranked 15th in the nation for traffic snarls.
Truck drivers were delayed more than 26 million hours along I-35 in Austin, wasting 44 million gallons of fuel costing them $1.5 billion during 2019, according to a study from the Texas A&M Transportation Institute.
For the first several years, traffic revenues failed to live up to expectations. The original SH 130
Concession Co. filed for Chapter 11 Bankruptcy in 2016. The bankruptcy plan approved in 2017 created a new holding company granting bondholders ownership of the company while keeping its existing agreement with TxDOT in place.
Today, the toll road is finally meeting the expectations many had for it.
“Our traffic is weighted toward commercial traffic with more than 25% of our transactions in heavy vehicles,” Wilson said. “This is not surprising because our roadway is a fast, safe, and reliable alternative to the southern sections of I-35 for truck traffic.”
The SH 130 toll road is part of a corridor that is fast becoming a magnet for commercial and industrial activity, including the $1 billion Tesla Gigafactory being built just outside of Austin. The Tesla factory, which will produce electric vehicles, is scheduled to be finished in 2022.
Over the past year, more than $400 million in business investment in the region has created more than 1,400 direct jobs — many of them in transportation and logistics, according to the Greater San Marcos Partnership, an economic development organization based in San Marcos, Texas, about 12 miles from the toll road.
“Growth between Austin and San Antonio, and construction on I-35, are producing more and more congestion on I-35, making SH 130 a very attractive alternative. These factors should continue, and the natural path for additional growth in the corridor is eastward in the direction of SH 130,” Wilson said. “We expect much greater commercial, commuter, and local traffic where we have the roadway capacity ready. We believe this will keep our strong traffic growth going for many years.”
Texas expands CDL testing, renewals throughout November
Texas is expanding CDL testing to six days a week for the month of November in response to a truck driver shortage that has contributed to supply chain issues, according to a release.
The Texas Department of Public Safety (DPS) has added additional Saturday appointments at select CDL offices for customers needing to apply, renew, replace or upgrade their Texas CDLs.
Tests and other CDL services are normally only available Monday through Friday in Texas. Participating driver license offices will offer a limited number of appointments on Saturdays throughout November.
“We’ve all seen reports, or personally felt the impact, of the severe strain our supply chain is currently facing,” said Steven McCraw, DPS director. “By adding CDL services at select offices, we can get more qualified commercial drivers out on the roads to move more goods.”
Mexican manufacturer opens global office in Washington
Deacero, one of Mexico’s largest steel wire producers, recently opened a global trade and corporate affairs office in Washington.
“This is where decisions are made that affect our company, its workers and its customers — not only in the U.S, but also in Mexico, and in other international markets where we do business,” said Raul Gutierrez, CEO of Deacero. “We want to stay informed about those decisions, and be part of the public dialogue that shapes them. The new office will give us the direct presence needed to do this well.”
Monterrey, Mexico-based Deacero manufactures steel wires and reinforcing steel. The company has 8,000 employees in 20 countries, including recycling centers, steel mills, steel wire facilities and an R&D center.
Cross-border trucking insurance firm acquired by Marsh McLennan
Irving, Texas-based Southwest Truck Insurance has been acquired by the Marsh McLennan Agency (MMA).
Financial terms of the acquisition were not disclosed. All Southwest Truck Insurance’s employees, including President John Phillips, will join MMA, according to a release.
Founded in 1986, Southwest Truck Insurance specializes in business insurance solutions for the trucking industry, including domestic and cross-border trucking operations, serving clients in the U.S. and Mexico.
New York-based MMA is an insurance provider with more than 8,000 employees across 160 offices in North America.
More articles by Noi Mahoney