U.S. shippers and truckers are reporting a sharp drop in traffic into Mexico, proof that the fallen peso is taking a surprisingly savage toll on U.S. exports to that country.

While a decline in southbound traffic was anticipated after the Mexican government devalued the peso in December, few expected the fall would be so dramatic. Indeed, the decrease in that traffic is so widespread that operational problems are appearing at many border truck terminals."We've had to move trucks empty from other areas into Laredo, because we needed them to haul northbound loads that we have sitting here," said Javier Proa, operations supervisor in Laredo, Texas, for M.S. Carriers Inc., the Memphis truckload carrier.

Juan Montanez, manager of the Eagle Pass, Texas, terminal for Merchants Fast Motor Lines Inc., the less-than-truckload motor carrier from Abilene, Texas, estimated that volume "is still off by 40 percent."

Eagle Pass used to dispatch 16 trailers every three days to Mexico. Now it's down to 10.

"Some maquiladoras that depended upon parts from the U.S. couldn't afford them. So their (inbound) traffic stopped," said Mr. Montanez. "They're now buying parts in Mexico."

Maquiladoras are enterprises along the border that assemble U.S. components into finished products for re-export to the United States. With the peso down 40 percent against the dollar since December, U.S. components and other goods have become much more expensive for Mexican buyers.

"The peso has just killed our business with Mexico," said Pablo Ortiz, international supervisor at the Tampa, Fla., distribution center of Ace Hardware Co., the Oak Brook, Ill., home-products retailer. "We used to do five or six containers a week to Mexico. Now we're doing nothing."

The Tampa distribution center was Ace's main launch point for shipping containers to Mexico, each holding $40,000 to $60,000 in goods.

Companywide, Ace Hardware's exports to its 70 franchised stores in Mexico are off 80 percent, said Dan Olsen, the retailer's director of international business. With U.S. goods beyond their price range, Ace stores in Mexico have resorted to stocking mainly Mexican-made merchandise.

Overall, the value of total U.S. exports to Mexico between January and May dropped 10.25 percent to $18 billion from $20.06 billion in the same period a year earlier, according to Global Trade Information Services of Columbia, S.C. During the first five months of this year, Mexico's share of U.S. exports fell to 7.57 percent from 9.80 percent in 1994.

Consumer goods carried in trailers account for much of the lost southbound traffic, said Ray Perryman, president of the Perryman Group, an economics consultancy in Waco, Texas. The goods were destined for department stores serving Mexico's middle class, which has been the hardest hit by the peso's devaluation, he said.

The decrease in U.S. truck shipments to Mexico has been so steep that many people, like Mr. Perryman, believe it has reversed the traditional imbalance of trailer traffic. Historically, southbound trailers from the United States have outnumbered their northbound counterparts by a 3-to-2 margin.

Current trends portend little change for consumer-products exporters.

Exports to Mexico from Dial Corp., the Phoenix maker of Dial soap, Brillo pads, and laundry detergents, are off 30 percent to 50 percent and likely will remain unchanged for the near term, said Rick Baer, manager of international business.

Although the amount represents just 5 percent of Dial's total sales, it's a concern since many Mexican buyers prefer the "Made in U.S.A." label, he said. The company has a plant in Mexico City that produces 80 percent of the Dial products sold in Mexico.

Before December, Wal-Mart Stores Inc., one of the biggest shippers of consumer goods to Mexico, dispatched between 90 and 100 trailers a week from its Laredo warehouse to 11 SuperCenter stores and 22 Sam's Clubs across the border.

But in the two weeks following the peso's initial fall, volume fell to just 17 to 20 trailers weekly, forcing Wal-Mart to lay off 250 warehouse workers in Laredo. Traffic has since rebounded to 35 to 40 trailers, but the Bentonville, Ark., retailer hasn't yet recalled any workers.

While U.S. truckers have lost volume, M.S. Carrier's Mexican partner, Transportes Easo CV of Mexico City, has seen its domestic truckload volume rise by two-thirds, Mr. Proa said. This is mainly because many Mexican companies cannot afford U.S. imports and have been buying domestic parts and products.

There's also been a surge in Mexican exports. U.S.-bound volume at Merchant Fast Freight's Eagle Pass terminal increased to 20 trailers every three days in July from 16 trailers every three days last December, Mr. Montanez said.