Opponents of a new cross-border trucking program with Mexico fear it will draw thousands of Mexican truckers into the U.S., threatening American jobs.
The pilot project’s backers, however, are concerned the program won’t attract enough Mexican carriers to make it viable or statistically valid as a study.
“Probably the largest challenge is participation,” said William Quade, an associate administrator at the Federal Motor Carrier Safety Administration.
“Only about 30 carriers participated in the last pilot project,” Quade said at a Washington International Trade Association panel discussion June 29.
Federal Motor Carrier Safety Administrator Anne S. Ferro recently said she expects about the same number of Mexican carriers to apply for U.S. authority this time.
The pilot project is scheduled to last for three years, after which conditional operating authorities granted under the program would become permanent.
Ferro expects the first Mexican carrier in the program to start rolling into the U.S. by the end of August, triggering the suspension of punitive Mexican tariffs.
The agency is working on several fronts to meet that date, said Quade, preparing a Federal Register notice, reports to Congress, Web sites and responses to comments.
But drumming up interest among carriers south of the border will be key.
“We’re looking for a statistically valid number of carriers to participate,” Quade said, adding the DOT needs 4,100 “safety snapshots” from the three-year pilot project.
But the type of long-haul Mexican truck operators that FMCSA wants to participate in the new pilot project aren’t necessarily lining up at the border.
“There are significant costs for operating within the U.S. for a Mexican carrier,” Quade said, including insurance costs, regulatory costs and congestion-related costs.
The long-haul carriers targeted by the pilot project aren’t the drayage operators currently sending thousands of trucks each day to the U.S. border commercial zone.
Speakers at the WITA event said the long-haul Mexican carriers operate newer, more expensive equipment they don’t want held up for hours in lines at the border.
It would be more profitable for those carriers to keep those trucks rolling in Mexico, rather than stuck at crossings for hours behind much older drayage equipment.
The economics of Mexican trucking is different, too, said Martin Rojas, vice president of security and operations for the American Trucking Associations.
“When we tell our Mexican counterparts the average profit margin for a U.S. trucking company in a good year is 3 percent, they say, ‘How can you be in business with that?’” Rojas said. Trucking profit margins are usually higher in Mexico, he said.
Mexican truckers still feel “burned” by the cancellation of the Bush-era pilot project in 2009, said Karen Antebi, economic counselor at the Mexican Embassy.
As a new program is implemented, stakeholders need to “ensure its viability,” she said, “so our carriers have the confidence that it won’t be shut down.”