I recently travelled to Puerto Vallarta, Mexico, where Daimler Trucks North America introduced truck journalists to some very interesting and sophisticated Mexican fleets. We had a lengthy chat about the challenges facing the trucking industry in Mexico and ongoing efforts to modernize the industry there.
Some of the challenges faced by Mexican fleets are not unlike those you are facing here. For example, the peso has lost 22% of its value relative to the US dollar, driving up the cost of new equipment. Daimler responded to this by being the first to introduce “peso pricing” – prior to that, trucks, components and services were priced in US dollars, which made it difficult to determine how much the final invoice price would be when converted to pesos.
This has helped Daimler gain share in Mexico, where it hopes to finish the year with a 30% share of the Classes 4-8 market.
The fleets we spoke to said one of the biggest issues facing the trucking industry in Mexico is the age of the fleet. Trucks here are on average 17.9 years old and there are 173,000 trucks on the road that are 21 years or older. The Mexican government has introduced scrapping programs aimed at refreshing the fleet but they’ve met with little success.
There’s talk of bringing Mexico in line with current Canada/US emissions standards but that won’t be easily achieved, since ultra low-sulfur diesel cannot currently be purchased there. So OEMs are still waiting to find out which EPA standard the country will adopt next and the timeline for implementation. It is currently on EPA04 rules.
Interestingly, the fleets we spoke to – FEMSA Logistica, Fletes Mexico and Frio Express – indicated they have little appetite to run into the US or Canada under existing cabotage rules. Ramon Medrano, president of Frio Express, said it’s easy to get a load of strawberries to New York City but getting the return load to Mexico is much tougher. Without the ability to haul point to point within the US and/or Canada, these fleets are happy with their existing trailer interchange agreements with US fleets.
The driving profession in Mexico is not desirable and, like here, attracting young drivers isn’t easy. Medrano said his company pays above-average wages, enough that drivers can send their kids to college, yet still attracting drivers is difficult. They must also compete with US companies that pay in US dollars. And then attracting the right drivers is another matter altogether.
Medrano puts prospective hires through a psychological assessment before they’re hired. Diesel theft is rampant and there is no easy way to evaluate a driver’s past.
Miguel Gomez of Fletes Mexico said there’s no government agency that tracks and makes available a driver’s past record.
All three of the fleets we spoke to employ the latest technologies, refresh their fleets regularly and restrict drivers’ hours of work. However they’re in the minority. They said they must compete against companies that buy old, imported trucks, run with no regard to hours-of-service and fuel their trucks with stolen diesel. And you thought you had it tough here!
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