There has been considerable pressure during the last administration to open the Mexican-American border to trucks for transporting freight.  At present there is no open border where Mexican owned and operated trucks and American owned and operated trucks can freely go across the border and deliver products.  There was a Mexican Pilot Program initiated by the Federal Motor Carrier Safety Administration that would allow a certain number of Mexican owned and operated trucks to engage in cross border shipments.  There were some legitimate concerns among small carriers and drivers about the safety and economics of this program.  The Foundation did considerable research to weed out the facts from fiction on the two countries supposedly similar regulatory compliance issues.  Provided is an early appraisal from research on the two very different systems.  The Foundation continued to monitor the program and to review the IG reports and other GAO findings, those reviews continue.

 

Data Problems on Mexican Trucks:

 

Sept. 2003:  Methods for the Development of Binational Driver and Vehicle Databases,  Texas Transportation Institute. (Mark Ojah & Juan C. Villa).
Most trucks that haul from the interior of Mexico don’t cross the border.  So they would not have any U.S. information.  Information on drivers would only be on those that routinely provide drayage activity.  (Two different data bases and kept by different groups).

 

Confirmation of Mexican carrier registration is complicated by several factors.  Depending on where a carrier operates, its commercial vehicles may be registered and plated by an individual Mexican state (Mexican intrastate carriers) or by the Mexican federal government (Mexican interstate carriers).   Mexican carriers that operate in California must also plate in California. 

The Mexican commercial driver and vehicle system, the Infraction Information System INIS) processes and archives moving violations committed on Mexico’s federal highways only.  (So if they received violations on other roads they would not have that information).

The Accident and Reporting System (ARIS) records motor vehicle accidents that occur on Mexico’s federal highway system only. ( If accidents don’t occur on federal highways they are not recorded).

 

June 2005:  Current Practices at TxDOT/DPS Border Safety Inspection Facilities and Opportunities for Data Sharing with Federal Agencies (Michael Bomba, Juan Carlos Villa, William Stockton & Robert Harrison). Center for Transportation Research, University of Texas at Austin.

 

There is a lack of complete and reliable information in the Mexican carriers and vehicles database.  The database only has information on vehicles that have a federal license plate issued by the SCT.  Some trucks that perform drayage services have received border crossing license plates and the information on these vehicles is kept in a separate database that cannot be accessed by the current U.S. interchange software. 

 

The SCT enters the information at state offices and then that information is transmitted to Mexico City’s headquarters where SCT transmits the information to the U.S. federal authorities. It was found that in some cases the Mexican truck information was not available in the database at the border inspection facility.  The same is true of the Mexican driver’s license information.

 

The average number of overweight violations at the Columbia-Solidarity Bridge is about 300-350 citations per month.  The DOT is not allowed to issue fines so the DPS is usually there to issue fines.  The only commercial vehicles that are typically stopped by the DPS are those trucks that have been identified as having potential weight problems by the weigh-in-motion scale.  (There are so many of these they don’t have time to inspect others and they are usually just waved through).

 

Another issue facing Mexican trucking companies and drivers is the inadequate development of Mexico’s Commercial Driver’s License (CDL) System.  The Mexican government maintains the CDL system as two separate databases: one for trucks registered in the interior of Mexico and the other for trucks registered in the border zone.   (Which one is FMCSA using for vehicles?)

 

Safety Management Systems:

An issue I continue to state that I don’t feel has been addressed is that the Mexican Carriers get to choose which trucks and drivers they have inspected during the safety audit.  (385.311) The safety audit will consist of a review of the new entrant’s safety management systems ...  No U.S. carrier in a safety audit gets to pick which trucks to inspect and which records FMCSA can choose to look at.  The carrier’s entire safety management system is to be reviewed.  It certainly makes sense that if the carrier has poor safety management system over-all then they should not pass the audit.

 

Some of those chosen already:

In looking at the very first carrier on the pilot program that has been approved we have found that they have three different companies listed under one DOT number.  When Doreen called they said this was a glitch in the system!  One of the companies had been suspended but they still have 2 under one DOT number.  One had contract authority and one had common but they both had the same DOT number.  When ask about the fact there is no insurance listed she was told that Mexican carriers, involved in cross border transportation only, don’t have to show proof of insurance but must carry an insurance card or policy in the truck and produce it if ask.  When ask as to why the carrier has been shown to of been granted authority to operate beyond the border zone and they still don’t show proof of insurance the federal person couldn’t provide an answer.  

 

Training:

There is a claim that all the FMCSA inspectors have been trained on how to detect if someone is operating beyond the bounds of their authority and they claim that every state has instituted regulations about enforcing this provision.  CVSA has admitted that there is no formal training so my question is who did the training, where was it done and who attended?  It isn’t just inspections on the border but on the roadside and these are not done for the most part by FMCSA but state enforcement. 

 

Once the truck enters the U.S. how is the roadside inspector to verify the license and medical provisions are updated and legal since there is no link to the Mexican data?  According to the Follow-up Audit, 67% of Mexican motor carriers had not submitted updated census forms as compared to 42% of U.S. carriers.  51% of Mexican carriers reported having zero power units as compared to 10.3% of U.S. carriers.  While this may all be verified and checked during a compliance review it does point out that the data that is available from a carrier safety record, which is checked at roadside, will not be available to inspectors.  In fact 52% of Mexican carriers showed zero drivers, as opposed to 14.5% for U.S. carriers.  So how can you check violations on a driver at roadside?

 

Insurance:

Motor carriers in the U.S. must have a minimum of $5,000 of cargo insurance, Mexican carriers only have to have $200.  I don’t know of an insurance company in the U.S. that insures Mexican carriers.  There are however, carriers operating beyond the commercial zone from Mexico that are 55% American owned many of which will be self-insured. (Swift, J.B. Hunt, Celadon are self-insured)  These carriers need to be 100% owned and operated Mexican carriers.

 

Economic Impact Analysis:

I think we should ask if these Mexican carriers are actually Mexican domiciled and 100% Mexican owned carriers.  If they are not; it is not a true representation of the Mexican carrier population.  If any of the carriers are 51% or more American owned then they are not truly a Mexican carrier and an economic effect study needs to be done on how an American owned carrier would be given an undue economic advantage over other carriers; propagated and encouraged by the FMCSA.   

 

Stifel Nickolaus just reviewed for their clients whether it is advisable to invest in Celadon, June 15, 2007, by noting:  If the border were to open, Celadon could benefit to the tune of $8 million per year in cost savings if it were to run its 350 trucks in service across the border.  The savings are related mostly to the lower rate per mile provided to Mexican drivers.  Currently, drivers domiciled in the U.S. average $0.40 per mile in compensation while it is envisioned that Mexican drivers would earn only $0.22 per mile while operating in the U.S.

Has there been an economic impact study as must be done before there can be a regulation change?  The Regulatory Flexibility Act requires an evaluation of the effects of an action on small entities and a determination that the action would not have a significant economic impact on a substantial number of small entities.  (I don’t think this is required for a pilot study but it should be considered)

• FYI-- In Mexico in order to cross the border a carrier must go through a broker.  Unlike the U.S. brokers, the brokers in Mexico are legally responsible for the load, therefore, they often own the trucks that do the cross-border transportation or have a deal worked out with a Mexican motor carrier.  This will greatly affect the economy of these business people and they are largely opposed to NAFTA.  This will of course affect the owner-operators who cannot compete with the poorly paid Mexican drivers.
• Another point is that if a foreign worker gets a work visa in the U.S. the person who hires the worker and sponsors them is required to pay the average wage for that position.  Is this even considered, it certainly should be if the carrier in the study is U.S., owned even partially.  In fact a quote of Celadon’s President on WISH TV Channel 8 in Indianapolis, “The move could increase Celadon Trucking’s profits by as much as 80 cents a share within the next two years”.  This was of course in reference to opening the border not the pilot study but if Celadon, or Jaguar the Mexican counterpart of Celadon, is one of the 100 carriers then it shows who is behind it.

 

Equivalency: CDL

MOU was signed on November 21, 1991.

 

Substantial changes since that time:

• I believe it wasn’t until 1992 that you had to have a CDL to drive a commercial vehicle.  However, the act that set it up was the Commercial Motor Vehicle Safety Act of 1986.
• In 1994 the agency initiated a study to evaluate the effectiveness of the CDL program.  The final report, submitted to Congress in 1999, documented vulnerabilities within the CDL program and provided recommendations to correct them. 
• Congress passed the Motor Carrier Safety Improvement Act of 1999 (MCSIA), amending numerous provisions of title 49 of the United States Code relating to the licensing and sanctioning of CMV drivers required to correct specific weaknesses in the CDL program.
• Section 383. 5 added four new definitions and changed four definitions of terms.
• Section 383.5 also amended three new   offenses to the existing list of offenses warranting disqualification of a CDL holder.
• Section 383.51 was revised to incorporate requirements of Section 201 of the MCSIA.  These revisions include: imposing a disqualification on CDL drivers who have been convicted of traffic offenses while operating a non-CMV which results in their license being canceled, revoked or suspended etc.
• “The Congress has chosen, in the interest of safety, not to distinguish between risk-taking behavior in a passenger car or a CMV.” 
• “Section 201(b) of the MCSIA specifically directed the Secretary of Transportation to issue regulations requiring the disqualifications of CDL holders convicted of serious offense while operating a non-CMV.”

Using their own words:  “interest of safety” and Directed the Secretary of Transportation.   It would seem that they should apply to Mexican and Canadian drivers as well.  They do make a comment on Mexican and Canadian drivers that states that they would also have to abide, but only those convictions while driving a non-CMV in the U.S.  They would “initiate discussions with Mexico and Canada on the issue of non-CMV offenses by these drivers while operating in their home country.”  (You can bet that never happened)  

 

In the Summary of  FMCSA-2001-9709 :

“The FMCSA revises its Commercial  Driver’s License (CDL) Program.  The Motor Carrier Safety Improvement Act of 1999 (MCSIA) mandates these revisions.  They are designed to enhance the safety of commercial motor vehicles (CMV) operations on our nation’s highways by ensuring that only safe drivers operate CMVs.”  

 

FMCSA in their study of the program in place in 1994 documented that there were indeed vulnerabilities within the CDL program and provided recommendations to correct them, then they should have documented that there are vulnerabilities in the Mexican and Canadian programs and required the new provisions on those drivers as well.  The vulnerabilities were so egregious that Congress passed the Motor Carrier Safety Improvement Act of 1999 in response to the study.  

 

Side note on Insurance:
According to a paper written by Bradly Condon of the Department of Business, Instituto Tecnologico Autonomo de mexico in the, Estey Centre Journal of International Law and Trade Policy, “[m]exican insurance law requires that the entire risk be retained in Mexico and does not permit this kind of reinsurance through a U.S. or Canadian insurer.” (In Canada and the U.S. insurers use a “Managing General Agent” whereby they handle the necessary filings in each other’s jurisdiction and provide the necessary proof of insurance.) 

 

According to the authors the U.S. could legally require all trucks operating in the U.S. to have insurance and the type and amount but, “[i]f  the U.S. were to introduce a new restriction on market access, the law would risk being challenged by Mexico under NAFTA or the WTO agreement.  FMCSA forces the Mexican domiciled carriers to carry insurance throug a U.S c insurance carrier but from what I read in NAFTA chapter 14 they can’t do that as they are suppose to allow them equal status.  Don’t even know if this is germane but it would seem FMCSA in all it’s statements about abiding by NAFTA is in violation of NAFTA but certainly gets the U.S. insurance companies off their back.  The question then becomes if there is a claim against a Mexican domiciles carrier will they be legally bound to accept the claim if Mexican law does not permit it?  Couldn’t this do harm to American truckers and the consumers (Standing)?  

 

“While the federal government of the United States has signed the NAFTA and WTO agreements, in many areas, such as insurance, state governments have the power to regulate.  This limits the ability of the federal government to ensure compliance with those aspects of international agreements that fall outside its jurisdiction under its own constitution, despite its obligations to seek such compliance.”

 

Analysis of the Independent Panel Report to the U.S. Secretary of Transportation on:

 

U.S.-Mexico Cross-Border Trucking Demonstration Project.

 

Above everything else any research that is to be considered of value must be both Reliable and Valid.

 

Research is “Reliable” when the study can be done time and time again with similar results.  It is “Valid” when the research results can state that the program tested what it was suppose to be testing for.  In order to achieve both reliability and validity there must be enough data and sample size to mathematically give a confidence level in the results.  The researchers (panel) clearly state that there is not an adequate sample size to give any degree of statistically significant results. 

 

As stated in the Letter to Mary Peters:
“We found that a larger sample of carriers is needed to make a statistically significant comparison of safety performance between the project participants and project applicants.”  This theme is reiterated throughout the study and quite frankly any good researchers would end the study there and make no inferences, however, that was not done and as a result many will point to the findings as proper research.  Every answer should be emphatic in pointing out that the researchers cannot put any credibility in any findings as the sample size was too small.

 

Summary:

• Question we might ask is why the review was asked not to examine security matters, environmental concerns or customs and immigrations issues?  Supposedly they were going to ask other agencies to look into these matters, has this been done? (Could it be that FMCSA does not consider these to be safety concerns?  I would think that security issues would be of grave concern along with environmental concerns)
• Of the 12,000 OP-1 crossings only 180 trips in a year’s time were actually outside the commercial zone and could of have been remotely considered long-haul operations.  Certainly not a large enough number for any kind of statistical analysis of value.
• Study points out again that since only 27 carriers and eventually only 25 carriers applied, “the sample size was too small for making statistical projections from the participant Mexican carriers to the carriers who applied for the project and are likely to seek such long-haul operating authority in the future.
• They mention that less than 1% of safety inspections resulted in OOS violations.  What they fail to mention is the reality that few Mexican carriers that operate strictly in the commercial zone are ever put OOS as witnessed by Trinity the carrier that we brought to their attention.  Interesting also is the fact that Trinity is mentioned as dropping out of the program but no mention as to why. 
• They also mention that the OOS rates on the pilot carriers were half the rate for the “grandfathered carriers” from Mexico.  This should have thrown up a red flag that something was wrong since both are Mexican carriers.

 

Two interpretation issues by FMCSA: (Just like calling it a demonstration project rather than a pilot program and interpreting the congressional stoppage of the program only for new programs).

• Footnote on xiv that mentions that FMCSA uses the terms “checking a truck” interchangeably with “inspecting a truck”.  At the border every truck was “checked” but if you listen to FMCSA they say every truck was “inspected” or at least imply they are inspected every time.
• Another interpretation problem from FMCSA is where they were going to deny authority to any Mexican carrier that failed in one of the 11 critical regulations would be denied into the project.

• There is a claim that every truck was checked every time but there were no Quality-Control Plan in place to ensure this was happening until March of 2008.  So only 5-6 months of data can actually be pointed to with any accuracy.
• On English-language proficiency they did check each driver by asking questions and they had to respond in English, however later in the report they note that California, New Mexico, Arizona and Texas instruct their regulators to not enforce the English proficiency regulations.  This completely negates any OOS statistics for Mexican carriers in the U.S.
• Insurance problems with one of the 25 carriers where the insurance lapsed yet the carrier operated in the U.S. for a month.  This would certainly beg the question as to how thorough the “check every truck every time occurred”!
• FMCSA has repeatedly stated that they have educated the state enforcement people on putting Mexican trucks OOS if operating without authority or beyond their authority.  This is obviously false as the report clearly states that 8 states expressed concern about how to deal with non-demonstration project Mexican trucks that leave the commercial zone and operate illegally in their states.
• Safety databases in Mexico according to the SCT has improved over the last five years.  Improved does not signify good only better than before.  The report fails to mention that the SCT only records data of convictions; crashes etc that occur on Federal roads any other accidents are not recorded or available. 
• A huge problem developed when any interviews with anyone not directly connected to the government project, non-federal officials, was stopped because the OMB had not given permission, and as a result, [t]he consequences were severe.  It delayed our ability to independently verify the safety data the states provided to the Department, insurance coverage of the participating carriers, quality of the border inspections, and drug-and alcohol-compliance procedures”.  
• Interesting point as to why so few Mexican carriers participated was because they were not willing to have all their fleet inspected for long-haul operations in the U.S.  They only wanted those inspected that were in better condition.  They are admitting that their commercial zone trucks probably would not pass an inspection.
• They point out another common reality in the Southern border- states in that looking at the data many carriers did not list going to Fort Worth from Mexico as being out of the commercial zone.  (Anyone who has done any trucking in the Sothern states knows that the so-called commercial zone stretches far beyond the 25 mile limit)
• During the PASA the on-site FMCSA did not have access to information on Mexican truck inspection reports, crash reports and driver’s violations not provided by the applicant carriers.  (This is not comparable to U.S. on-site reviews).
• The GPS system installed on the trucks was virtually worthless for tracking location of trucks or routes as only Texas even knew that the data was available.  When checked by the panel they were not able to track specific trucks to the specific trip destinations provided in the CVSA decal check dataset.

 

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