SPECIAL REPORT: NAFTA's Mexican truck rules: The devil is in the details

Mexican motor carriers can only bring international goods into the United States from outside the country under a ruling by President Bush Nov. 27. After the truck makes the delivery, its options are to return to Mexico empty or to load a product bound for Mexico.

Under these "cabotage" laws, the Mexican carrier cannot pick up a domestic load and deliver to another point in the United States before returning to Mexico.

In a Nov. 27 memo to Secretary of Transportation Norman Mineta, President Bush authorized the Department of Transportation to act on applications from Mexican-domiciled motor carriers requesting permission to do business beyond U.S. border commercial zones.

Those who know the trucking industry in Mexico do not see Mexican carriers flocking to the U.S. DOT with applications. So far, only 135 trucking companies - of the thousands operating in Mexico - have applied to U.S. authorities for permits to truck beyond the commercial zones.

"I don't see in the near future Mexican carriers going into the United States," Felix Canales, a representative of the customs brokers' association of Nuevo Laredo, Tamaulipas, recently told Reuters. Canales said there's not much profit in taking a load of glass to Detroit and going back empty.

"The change will be evolutionary rather than revolutionary," OOIDA Executive Vice President Todd Spencer said. "Over time, you can be sure there will be more trucks doing business here as Mexican motor carriers develop business contacts, or, as the case may be, businesses here develop them."

U.S. Customs and the Immigration and Naturalization Service (INS) are responsible for the development and enforcement of cabotage restrictions as they relate to U.S. surface transportation. However, Spencer says OOIDA has concerns regarding the government's ability to make sure Mexican trucks are not violating those rules.

"While the Federal Motor Carrier Safety Administration has directed all states to adopt laws that would give their enforcement officials the authority to place a truck from Mexico out of service for not being properly registered," he says, "it's unlikely that more than one or two states have actually done that."

Meanwhile, motor carriers domiciled in Mexico operating in the United States will be subject to the same federal and state laws, regulations and procedures that apply to carriers domiciled in the United States. These include safety regulations, such as drug and alcohol testing requirements; insurance requirements; taxes and fees; and other applicable laws and regulations, including those administered by the U.S. Customs Service, the Immigration and Naturalization Service, the Department of Labor, and federal and state environmental agencies.

Mexican motor carriers are also subject to the same insurance requirements, another issue that raises concerns with OOIDA. Mexican carriers must be insured by a U.S.-approved company. But this amounts to untested waters for insurance companies, since there is no prior experience assessing risks associated with Mexican long haulers operating on U.S. roads.

"At this time, we don't know of any dependable companies that are writing insurance beyond the commercial zone," Spencer said. "Say a Mexican truck has an accident in the U.S. While it may have obtained insurance somewhere, how reputable is the company? Will the policy pay off?"

David Longo, a spokesman with the FMCSA, told Land Line he's unaware of any company currently operating with U.S. approval to offer insurance to Mexican drivers.

Meanwhile, Spencer says, the big issue is security.

"Call this free trade or whatever," he said. "The reality is, given the events of 9/11, it is more than a little troubling that our southern border, long the preferred path for illegal drug trade, could now be a path for much more."

Bush is calling for the DOT to work closely with the Department of Justice, the Office of Homeland Security and other relevant federal departments, agencies and offices to help ensure the security of the border and to prevent potential threats to national security.
--By Sandi Soendker, managing editor