Mexican invasion?

by James Menzies

OTTAWA, Ont. – On Sept. 8, a Mexican truck crossed into the US to deliver a load of steel to North Carolina. It was the first time since 1982 that a Mexican-domiciled trucking company was allowed beyond a 25-mile commercial zone that runs along the US/Mexico border.

Canadian officials say they are watching with interest as a controversial demonstration project allowing up to 100 Mexican carriers to operate in the US plays out. Critics of the program (which also allows select US carriers to deliver into Mexico) were still trying to have the program derailed as Truck News went to press.

At press time, the US Senate had voted 74-24 in favour of a movement that would cease funding for the program. However, it was not yet clear whether the vote would be enough to put the program on ice, since it was widely reported that US President George W. Bush would veto the decision.

The Teamsters, the Owner-Operators Independent Drivers’ Association (OOIDA), the Sierra Club and a handful of US Senators were among the program’s biggest critics.

Here at home, Canadian trucking industry officials seem poised to take a wait-and-see approach. But Ron Lennox, vice-president of trade and security with the Canadian Trucking Alliance (CTA) says there now appears to be nothing preventing Mexican trucks from crossing into Canada.

And he hopes the same privileges are extended to Canadian carriers that want to haul south into Mexico.

“I don’t see any justification for a province to keep those drivers and those vehicles from coming into Canada if they choose to do so,” Lennox told Truck News. “I’m not expecting there would be a large number of Mexican carriers that would come through the US into Canada. But it does raise an issue – if they’re able to come into Canada, why are our carriers not able to get into Mexico right now?”

To this point, Canadian trucking companies that have filed the appropriate paperwork seeking permission to haul into Mexico have been stymied.

“A few carriers have expressed interest,” pointed out Lennox. “Not a groundswell, but a few.”

Now with some Mexican carriers seemingly able to haul into Canada at will, the CTA is hoping any Canuck carriers wanting to cross into Mexico will be allowed to do so.

In a letter to Minister of International Trade, David Emerson, CTA president David Bradley wrote that: “The dispute has little, if anything, to do with Canada, yet as long as the US and Mexico keep each others’ carriers out, Canadian carriers with designs on Mexico are prevented from crossing the border as well. It will come as no surprise to you that when the US-Mexico pilot was announced, it was not greeted with great enthusiasm on this side of the border. It could be argued that the pilot is a stepping stone towards full realization of the NAFTA trucking provisions. However, from the Canadian industry’s perspective, the US and Mexico have made a bilateral side deal that once again leaves Canadian carriers on the sidelines…what CTA seeks is that the Government of Canada bring pressure to bear on Mexico to honour its longstanding NAFTA commitments to this country and to the Canadian trucking industry. Once US trucks begin to cross the Mexican border – with full territorial access – ours should be permitted to do so as well.”

However, even as the first Mexican truck crossed into the US, it seemed there were still more questions than answers about how Canada would fit into the program.

“There’s been a certain degree of skepticism that this was ever going to happen,” admitted Lennox. “The US border was supposed to open to Mexican trucks in 1995 but it’s been one step forward and two steps back. I don’t think in the short-term we can expect Mexican carriers to operate into Canada – let’s face it, the world’s largest market is right on their doorstep.”

Joanne Ritchie, executive director of the Owner/Operators’ Business Association of Canada (OBAC) has joined with her American counterparts at OOIDA in questioning the program’s merits. She feels Canadian officials may be overly nonchalant concerning the events that are unfolding.

Ritchie said there are still too many questions remaining, even after the first deliveries into the US have already been made. Theoretically, Canada’s borders have been open to Mexican trucks since NAFTA was inked in 1995, she pointed out.

“We didn’t have the same restrictions as the Americans did; our borders were open, they just couldn’t get through the US to Canada,” Ritchie explained.

Now with that obstacle removed, it may only be a matter of time before the first trucks involved in the program show up at Canada Customs booths.

“What happens when their trucks get to the Canadian border? What do we do?” Ritchie asked. “The Transport Canada party line is that we do like we do with any other truck, they have to meet the same rules.”

Transport Canada officials did not return calls from Truck News. However, Ritchie said she’s been in discussions with officials in Ottawa and they are “watching it very closely” while trying not to meddle in US/Mexico affairs.

South of the border, the demonstration program continues to come under fire from a variety of special interest groups.

The Teamsters and OOIDA have been among the most vocal critics, claiming there’s no assurance that Mexican trucks will meet the same safety standards as American trucks.

They also have raised a number of concerns involving competitive issues – for instance, how will US-based carriers compete with their Mexican counterparts which will have access to cheaper labour?

“It may be called a pilot program, but anyone who understands the full scope knows it’s a pre-ordained plan to fully open our borders, all in the name of economics and cheap labour,” said Todd Spencer, executive vice-president of OOIDA.

OBAC’s Ritchie said she shares many of the same concerns.

“OOIDA is asking very legitimate and intelligent questions – some of their safety questions are very real,” she said. “And then there’s the economic issues, people are afraid – and rightly so – that Mexican drivers will work for a lot less. We don’t have to go to Mexico to find drivers who will haul cheap freight. I think they have the responsibility to look at the big picture and the economics of it.”

Her worries don’t end there. She also asked about the potential for Canadian carriers to acquire Mexican trucking firms, thus providing them with a supply of cheap labour; the ability or willingness of Mexican-based trucking companies to comply with IFTA fuel tax requirements; as well as the whole issue of cabotage.

She’s concerned that Transport Canada is not getting involved in the process and appears not to have a contingency plan in place for when the first Mexican truck shows up at the border.

“They don’t expect Mexican trucks to come to Canada and they don’t understand why Mexicans would want to come here, but I think that’s a bit naive,” she said. “They’re taking this wait-and-see attitude and depending a little bit too much on the Americans to get it right.”

The US agency responsible for implementing the program, the Federal Motor Carrier Safety Administration (FMCSA), has defended its actions by insisting Mexican-based trucking companies will have to comply with the same stringent safety standards as US and Canadian fleets.

“This long-awaited project will protect public safety on American highways as we work to both save consumers money and help our economy,” John Hill, FMCSA administrator said in a release. The agency vowed it would inspect every truck that crosses the border as part of the program.

The Border Trade Alliance (BTA), a grassroots organization that promotes trade between Canada, the US and Mexico, also supports the program.

“Last year, over US$330 billion in goods were traded between the US and Mexico using surface transportation,” pointed out BTA president Maria Luisa O’Connell. “DoT’s pilot program is another step toward increasing economic activity on both sides of ou
r border with Mexico.”

Since 1982, Canadian and US-based trucking companies have had to drop their loads off within the commercial border zone and then have them shuttled across the Mexican border to trucking companies on the other side, which then completed the delivery. There’s no denying trucking companies stand to gain efficiencies by eliminating that costly and time-consuming process.

Within the first 30 days of the program’s launch, up to 17 trucking companies were expected to be approved. Additional companies, up to a total of 100, would be granted permission to haul across the border in subsequent months, the FMCSA reported.

Conversely, the same number of US trucking companies would be permitted to haul into Mexico.

The very first Mexican carrier to receive approval to haul into the US was Transportes Olympic. Stagecoach Cartage of El Paso, Texas was the first US fleet granted access to Mexico under the program. Cognizant of the public outcry occurring in the US, Transportes Olympic promised to use only trucks built within the last three years on runs into the States.

If the demonstration program clears all the hurdles still being erected in its path (including a lawsuit led by the Teamsters), it will last for at least one year.

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