01/21/2015

U.S. Opens Borders to Mexican Carriers

The U.S. Department of Transportation (DOT) recently announced it will allow Mexican carriers to apply for permission to conduct long-haul, cross-border trucking services in the United States.

Currently, Mexican drivers are not permitted to haul freight across the U.S. border. Shipments coming from Mexico are transloaded at the border, and an American truck driver hauls the freight to its final destination in the U.S. Now, with approval, Mexican carriers will be able to haul the freight all the way from Mexico to its American destination.

It is the federal government’s hope that this change will expand international trading opportunities for the nation and eliminate more than $2 billion in annual retaliatory tariffs on U.S. goods.

Initial Pilot Program

In order to test out this cross-border idea, the federal government rolled out a three-year pilot program for Mexican carriers, which concluded in October 2014.

The FMCSA reported that fifteen Mexican trucking companies enrolled in the pilot program. These carriers crossed the border more than 28,000 times and drove more than 1.5 million miles in the United States. During this time, more than 5,500 safety inspections were conducted by American officials.

The DOT concluded from the pilot program that Mexican carriers are able to comply with safety regulations just as well as carriers from the U.S. and Canada; therefore, the government could safely move forward with the cross-border carrier program.

Elimination of Retaliatory Tariffs

The U.S. is hoping to eliminate the retaliatory tariffs on trades with Mexico that arose due to a 2009 U.S. appropriations bill that sabotaged any chance at opening the American border to Mexican truck drivers. Since the cross-border pilot program’s debut in 2011, the Mexican government has suspended the tariffs. With the new cross-border program being instated, this could eliminate the tariffs altogether, which total over $2 billion annually.

The Beginning

As of January 15, the FMCSA has officially begun accepting applications for Mexican truck drivers to have the authority to operate their trucks on long-hauls across the Mexican-American border. This means that drivers without American licenses will be able to haul goods into the nation.

This new international driver program has received some heavy criticism from U.S. Representatives. Some, including Rep. DeFazio of Oregon, plan to use their legislative authority to put pressure on the FMCSA to take into consideration some problems that the open-border may cause. DeFazio claimed that the pilot cross-border program did not have enough participants to make a safe and fair decision.

For some, this also leads to concern about criminal activity. This program might seem to provide a golden opportunity for transporting illegal drugs across the border. However, the DOT has declared that their safety checks and regulations will prevent the crimes.

For supporters, especially U.S. agriculture shippers, this is an opportunity to lessen the truck driver shortage. Essentially, opening the borders to Mexican carriers will add drivers and truckload capacity for Americans as well.

The Impact

With the U.S. facing a driver shortage estimated around 30,000, a new pool of drivers might not be such a bad idea. The DOT assures that Mexican drivers will not be taking American jobs; rather, they will be helping to fill the empty truck cabs that are unable to take on these long-haul moves. In turn, this frees up American carriers for in-state lanes.

This will also result in less handling of freight while it crosses the border, as a transload will no longer be required.

According to the U.S. Bureau of Transportation Statistics, trade by value shipped across the border rose 9.6 percent year over year to $34 billion in October. If the retaliatory tariffs are eliminated, this program could result in a major return for Americans and the U.S. economy.