The Safe American Roads Act of 2007 seems to be the best the U.S. House of Representatives can do to save some face for non-compliance with NAFTA's chapter on transportation. (The Safe American Roads Act of 2007, H.R. 1773 limits the authority of the Secretary of Transportation to grant authority to motorcarriers domiciled in Mexico to operate beyond United States municipalities and commercial zones on the United States-Mexico border.) Passed by the House it must be approved U.S. Senate.
The Mexican government, through Economics Secretary Eduardo Sojo, has announced a lobbying effort aimed at the U.S. Senate. It contends that the bill approved by the House "violates NAFTA" since both the United States and Mexican governments had agreed upon a program different than that of H.R.1773 sponsored by Rep. Nancy Boyda (Dem-Kansas).
Those opposed to opening the border were overjoyed.
In the U.S., the Teamsters "saluted" the House vote as did the Mexican Carriers Chamber (CANACAR www.canacar.com.mx). That group has opposed the opening of the border as being unfair to Mexican trucking companies. CANACAR is also totally disappointed.
Those who would have participated in the proposed pilot program that would allow 1,000 U.S. and Mexican carriers to cross the border for door-to-door service are dropping out.
Reynaldo Gomez, operations manager of Transmex, a Swift Transportation (www.swifttrans.com) subsidiary established in 2004 in anticipation of the Pilot Program, notes that, "The investment undertaken to buy out the Mexican subsidiary was a way of preparing to be able to guarantee door-to-door service for both imports and exports between Mexico and the United States. Now we are out of it".
The reason is simple.
A green light for operation of 1,000 trucks is a waste since as there would only be room for 100 participants. Simple math shows that carriers on both sides of the border would have a maximum of 10 rigs each, an almost insignificant number when viewed with the perspective of the nearly $300 billion in freight now crossing the border.
CANACAR president, Tirso Martinez, just elected for a second term, claims, in a politically correct statement, that he doesn't mind if the border opens at the same time for both nations—one of the new key points in the program—as long as rules are the same for both sides.
Agreeing with this view is Leonardo Gomez (no relation to Reynaldo), general manager of the National Association of Private Transport, (ANTP), that represents carriers who broke from CANACAR in the late 1990s. He notes the ANTP never opposed opening the border since "it is good for trade and the country. But it will be good only if it is an even playing field for all participants."
ANTP's Gomez regards this is a "wait and see" situation. "When in operation, he says, "the pilot program will intrinsically demonstrate if there are problems or not; and if there are issues, ways to correct them."
"It is important to comply with established NAFTA regulations," insists Economics Secretary Sojo.
| Border Crossing Costs |
Cost effectiveness was not an issue for either the Teamsters or CANACAR as they did everything in their power to stop the border from opening to free transport. But for those in transportation cost effectiveness is a critical fact of business. Border crossing hikes the cost of merchandise as much as 35%, which of course is paid for by the owner, not the service provider.
Nevertheless, carriers in Mexico are in competition while looking to cut costs. Eduardo Martinez of Directo Transportaciones, a Monterrey based carrier, claims that in addition to the high price of diesel, the onorous cost of crossing the border at Nuevo Laredo is a real burden. At Nuevo Laredo--the largest volume crossing point along the Mexico-U.S. border-charges climb due to wait times and having to pay "burreros" or transfer trucks to move cargo to "el otro lado," the other side of the border.
According to T21 magazine, Juan Manuel Quiroga, of Comce Noreste carriers, adds that the costliest part of commerce is exchanging trailers at the border. "We need to have a more efficient way for these operations," he says, adding that the costs are levied on the end consumer just to pay for the border crossing, which can sometimes play havoc with competitive pricing.