Mexico Still Allows Deliveries by U.S. Fleets in Pilot Program

This story appears in the Sept. 13 print edition of Transport Topics.

Mexico has continued its side of the cross-border trucking pilot program begun in 2007, although the United States ended its participation and has denied Mexican trucks authority to deliver to U.S. destinations, a Mexican official said.

Mexico has given operating authority to about 10 U.S. trucking firms, allowing them to deliver to destinations in the country.

“The United States revoked the authority of Mexican carriers to operate in the U.S., but Mexico is living up to the treaty,” Ricardo Alday, Mexican Embassy spokesman in Washington, D.C., told Transport Topics.

The North American Free Trade Agreement requires each country to allow the other’s trucks, but opposition by the Teamsters union and other groups in the United States blocked implementation until the pilot program began in September 2007.

In 2009, President Obama signed legislation that killed U.S. participation (click here for previous story). In retaliation, Mexico has imposed tariffs on $2.4 billion in U.S. goods (click here for previous story).

Because of the embargo, most shipments into the United States are hauled by a Mexican trucking firm to the border, where drayage carriers haul it across, and then a U.S. company takes the freight to its final destination.

“Our company probably makes 20 runs a week into Mexico,” Scott McLaughlin, president of Stagecoach Cartage and Distribution LP, El Paso, Texas, told TT. “We currently do all of our crossings at the El Paso and Nogales border crossings. We move mostly dry goods into Mexico and come back empty.”

McLaughlin’s company was one of the first U.S. firms to operate in Mexico.

McLaughlin added that Mexican officials always have been prompt to renew his company’s authority in Mexico and his drivers never experienced any bureaucratic delays or other problems on their trips.

His trucks go to the northern cities of Chihuahua and Ciudad Obregon to deliver freight, though he said his company has the authority to go as far into Mexico as it wants.

George Long, president of Truss World Inc., Harlingen, Texas, said that he has Mexican authority to “operate our U.S. trucks anywhere in Mexico.” He said he frequently picks up cargo in Mexico and takes it in the same truck with the same drivers all the way to Canada.

Long, operating in Mexico since April 2008, said that he thought the cross-border program would halt once the United States shut out Mexican truckers.

“To their credit, Mexicans did not retaliate by stopping their part of the program,” Long told TT. “From living on the border so long, I know that Mexicans are very offended. . . because the U.S. has broken a treaty.”

Both executives said that they pay close attention to the drug wars that have erupted in northern Mexico in the past few years.

“We are very aware of the situation in Mexico, and we monitor it and we make decisions on what is happening currently,” McLaughlin said.

He said that Stagecoach sends its trucks into Mexico in the early morning and they return by the early afternoon, never spending the night in Mexico.

“We’re not pursuing more business in Mexico, but . . . the reasons why we’re not expanding has more to do with the uncertainty of whether the U.S. will live up to its obligations, rather than with the problems of security and stability in Mexico,” McLaughlin said.

”Our problems have nothing to do with drug wars,” Long said. “The drug fighting is just an uncomfortable sidelight of what is going on, and it has not directly impacted our business.”

Long said that Americans would not accept a Mexican violation of a treaty with the United States.

“If you ever want to know if something is ‘fair,’ just turn the situation around,” Long said. “Can you imagine what would happen if Mexico denied its treaty obligations toward the U.S., but the U.S. continued to honor its commitments to Mexico? There would be a huge outcry from U.S. citizens and voters for the U.S. to stop such behavior.”

“Mexico has given me another six-month extension, hoping, I think, that the United States is going to honor its obligations under NAFTA,” McLaughlin said Sept. 3. “I have a feeling that Mexican patience is wearing thin.”

Mexico’s Alday said that about 10 U.S. trucking companies in the pilot program have continued to operate in Mexico, though he did not have all of their names.

Mexico is pursuing two separate actions to enforce the NAFTA truck provisions. In addition to the tariffs, Mexico’s largest trucking group, Camara Nacional del Autotransporte de Carga, has filed a notice of intent to seek through arbitration more than $2 billion a year from the U.S. government that Canacart said its members have lost because the United States doesn’t permit Mexican trucks to enter the United States (click here for previous story).