Opinion: Nafta's Vitamin B1
B>By Joe Chandler
I>Glass & Associates
Despite sensationalistic reports to the contrary, Mexican truckers will not deprive Americans of safe highways or clean air. Rather, they will improve cross-border freight flows while relieving the U.S. driver shortage. Detractors charge that the North American Free Trade Agreement is overly ambitious and is being implemented with undue haste, but the reality is that Nafta does too little, too late in creating borderless free trade.
Except in a few protected jobs, foreign workers have been widely utilized to supplement the American labor force, and present rules permit distribution of 195,000 H1B visas to alien workers. Truck driving, however, has long been one of those 49 protected occupations listed on Schedule B, the Department of Labor’s directory of jobs for which foreign workers may not be hired. Schedule B purportedly lists jobs for which there “are sufficient United States workers who are able, willing, qualified and available,” and which offer America’s youth a transition from high school into the work force. Current high schoolers, however, will have to travel backward in time to find work in Schedule B occupations of streetcar conductor, keypunch operator, theater usher and elevator operator. The DOL’s archaic schedule is completely out of step with present-day life. Jobs for streetcar conductors are scarce, as are “able, willing and qualified” applicants for truck driving positions.
Schedule B prevents U.S. carriers from tapping foreign labor sources to reduce the driver shortage, but Nafta’s transportation provisions could offer partial relief to an industry needful of qualified workers. Nafta bypasses Schedule B limitations on H1B visas by classifying qualified Mexican drivers as temporary business visitors eligible for work on B1 visas.
“B1 visa” drivers are restricted to hauling goods moving in international commerce, but even this small slice of the trucking pie is large enough to significantly impact the driver shortage. In 2001, for example, 4.3 million truckloads crossed northbound into the United States — an average of nearly 12,000 truckloads a day for all 365 days of the year. Assuming that these shipments moved at least one day into the United States interior before the truck made the return trip, this traffic required at least 24,000 power units. Put another way, the import-export traffic between the United States and Mexico already takes twice as many trucks as are owned by J.B. Hunt Transport Services, one of North America’s largest fleets.
While the mainstream media have been preoccupied with issues involving Mexican carriers, the companies best poised to implement the long-awaited Nafta provisions are carriers based in the United States. Over the past decade, foresighted American truckers have invested heavily in Mexican transportation, and have already established cross-border business structures that will allow them to take quick advantage of Nafta. One such company, Celadon Group, wasted no time in projecting higher earnings based on the anticipated U.S. certification of 300 Mexican trucks — a number representing more than 10% of its current U.S. fleet.
Nafta’s rules may also benefit those U.S. carriers without Mexican affiliates, since the Immigration and Naturalization Service indicates that American carriers are also permitted to employ B1 visa drivers. Approval procedures for utilizing these drivers are unclear at present, but American carriers might be able to employ B1 visa drivers immediately — even while Mexican carriers are still awaiting Department of Transportation certification.
Language barriers and red tape barricades may inhibit companies on both sides of the border from pursuing Nafta opportunities, but the potential benefits are too significant to be overlooked. Nafta offers carriers the opportunity to fill unseated trucks — and potentially at lower wages. With net profits for U.S. truckload carriers averaging less than 5 cents a mile, the 30-cent-per-mile differential between U.S. and Mexican pay rates should provide ample incentive for carriers to vigorously recruit qualified Mexican drivers. American carriers should be able to offer substantial wage increases to qualified Mexican drivers without approaching the inflated remuneration levels necessary to attract domestic drivers.
Lower wages alone, however, will not guarantee prosperity for carriers entering the Nafta arena. The inefficiencies inherent in the restrictions on domestic carriage will quickly overshadow the labor savings unless route structures are carefully re-engineered to maximize miles on lower-cost drivers while minimizing empty miles overall. Despite the industry’s best planning and execution, B1 visa restrictions will force two trucks into a lane where only one load is available: One rig will be a Mexican unit headed home empty and the other will be a U.S. unit hauling a southbound domestic load. This bureaucratically engineered redundancy will hurt all of us because it eventually surfaces in the form of higher costs to consumers. The “quick fix” for this problem would be to abolish the work restrictions on B1 drivers. Following the quick fix, DOL should perform a comprehensive update of Schedule B to eliminate the unwarranted protection of truck driving positions.
Schedule B and the B1 visa — why can’t we fix both?
The writer is a former trucking executive, with stints at Red Arrow Express, Merchants Transportation and Logistics Co. and Frozen Food Express, who now heads the transportation group of Glass & Associates, a crisis management consulting firm, in Dallas.
This article appears in the Jan. 13 print edition of Transport Topics. Subscribe today.
