Global logistics/trucking news: Report states Mexican concern to sue U.S. over U.S.-Mexico cross-border trucking issue
Jeff Berman, Group News Editor and John D. Schulz, Contributing Editor -- Logistics Management, 6/2/2009
MEXICO CITY—A Reuters report published yesterday stated that a group of roughly 4,500 Mexican truckers plan to sue the United States for $6 billion, due to the United States Congress’s decision to shut down the cross-border trucking pilot program between the U.S. and Mexico.
The Mexican trucking companies, said Reuters, are represented by Mexico’s National Cargo Transportation Association, also known as Canacar.
This news comes on the heels of action taken by the Mexican government in March toplace tariffs on roughly 90 American agricultural and manufactured exports as payback for the U.S. decision to cease the cross-border trucking pilot program.
The tariffs amount to $2.4 billion of American goods, ranging from fruit juices to pet food to deodorant, among others, and range from 10 percent to 45 percent, with affected products coming from 40 states, according to a Los Angeles Times report. The report added that these products represent less than two percent of U.S. exports to Mexico.
It is clear the tariffs are having an impact already, as evidenced by a recently-formed coalition of 140 business, food, and manufacturing organizations that has called on President Barack Obama to quickly settle this dispute so that U.S. trading partners have assurance that the U.S. will live up to its trade obligations. The coalition added that until this issue is resolved, “Mexico’s retaliation will continue to economically harm U.S. farmers, manufacturers, and service providers…[and] is something our country cannot afford.”
Despite these issues, there is a possibility that Mexican truck drivers being able to cruise American highways is on again. American shippers and logistics experts might have the option of using Mexican carriers for their freight solutions in this country soon, according to Transportation Secretary Ray LaHood.
At a recent National Press Club gathering, LaHood said he has been actively lobbying up to 30 former colleagues in the House of Representatives to craft a U.S.-Mexico cross-border trucking program that satisfies this country’s commitment to the North American Free Trade Act (NAFTA) as well as highway safety.
“I hope we can have a Mexican program reinstated,” LaHood said. “This is part of NAFTA; this is part of something we need to do. “We’ve put together a very good proposal. It’s being vetted by Congress.”
Under NAFTA passed in 1993, the U.S. is required to open its border to both Canadian and Mexican carriers who meet this country’s trucking standards. The Canadian border is open; the Mexican border is not.
Yielding to pressure from the Teamsters union (who fear loss of jobs) and safety advocates (who fear unsafe Mexican trucks), the pilot program allowing Mexican-domiciled trucks to deliver freight in this country was yanked last year in an overwhelming vote by the House, who gave a resounding “no” to Mexican trucks.
LaHood says he is optimistic the House could agree to a modified Mexican truck proposal by summer. The trucking industry is taking a wait-and-see approach.
“The Secretary is saying he will make the new cross-border trucking plan public soon, and that Congress will approve it relatively quickly,’’ American Trucking Associations spokesman Clayton Boyce says. “It remains to be seen how he will reverse the opposition of Congress to cross-border trucking, but he hinted that the Mexican government’s punitive tariffs on U.S. agriculture are doing the job.”
Michael A. Regan, CEO of transportation rate analysis firm TranzAct Technologies, told LM this situation centers around the need for government to make a firm decision one way or the other.
“That is the main issue,” said Regan. “Also, the unions have fought this because of the perception that it is going to impinge on their ability to employ their members. There is also the alliance between the unions and OOIDA (Owner-Operator Independent Driver’s Association) that don’t want the competition…so they go in with the guise of potential safety issues.”
And making matters worse is that there is more truck capacity at the moment than there has ever been before, noted Regan. With tonnage and demand levels far below previous levels, the situation is exacerbated.
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