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January 20 2020

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Januar y 20 2020 | The Journal of Commerce 39 www.joc.com Surface Transportation The state of Querétaro, located in the interior of the country, in April enacted a law that prohibited trucks heavier than 3,857 kilograms (4.25 tons) from driving on state roads during the hours of 6 a.m. to 9 p.m., according to a blog post on the ANTP website. In restricting cargo movement to give more priority to private vehicles, the laws have "adverse consequences for road safety, the environment, and the mobility of people and goods," ANTP said. The laws also create more dangerous conditions for drivers by forcing them to drive at night, when drivers have reduced vision and can get tired, according to the association. Mexico City has enacted a law that from March 2020 will prohibit trucks heavier than 3.4 tons from driving on city roads from 6 a.m. to 10 a.m., according to the trucking news website Transporte.mx. The law also prohibits double tractor-trailers from driving on roads within the cap- ital at all between 5 a.m. and 10 p.m., the report said. JOC email: hugh.morley@ihsmarkit.com twitter: @HughRMorley1 Into the valley Mexican truck carriers face depressed rate market in 2020 By Hugh R. Morley behind the wheel. That exacerbated a driver shortage already in place due to a government rule requir- ing all double tractor-trailers to be certified, which took some trailers off the road while operators filed the appropriate paperwork. In recent months, the growing weakness of the Mexican economy has reduced demand for freight movement, truckers say. Mexican gross domestic product (GDP) grew just 0.14 percent in 2019, according to IHS Markit, parent company of The Journal of Commerce, which pre- dicts the country's economy will be only slightly stronger in 2020, with a GDP growth rate of 0.97 percent. The 2019 peak season was also far more muted than a year earlier. Production in the auto sector has slowed, likely reducing demand for logistics services to move parts and vehicles, while cargo volumes moving through Mexican ports have declined. Port volumes fell about 1 percent to 4.56 million TEU in the first 11 months of 2019 compared with the year before, according to the Mexican Secretariat of Commu- nications and Transport (SCT). That was a big drop from the 8.4 percent increase in port cargo volumes in the same period in 2018. Negotiating lower rates The regional manager for a global third-party logistics provider (3PL), who asked not to be identified, said Mexican contract rates have declined in the last year, perhaps by a near double-digit percentage, while spot rates have remained flat or declined slightly. "Contract rates definitely have been an opportunity to take on more volume and negotiate better rates," the regional manager said. "My customers are driving down their rates to me. And I'm able to pass that on [to truckers]. I'm able A YEAR AFTER tight truck capacity brought near double-digit hikes in contract rates, trucking operators in Mexico are now facing a far tougher market, with little rate growth — or even declines — forecast, according to several stakeholders. Shippers are finding it much easier to secure trucking services and are negotiating hard to bring rates down, according to truckers, who don't expect those realities to change much in early 2020. Diego Anchustegui, commercial director for Transportes EASO, a Mexican trucking company, said he expects contract rates to continue rising by only about 1 to 2 percent in the new year, down from the 8 to 9 percent increases of a year ago. Current spot rates are flat, compared with rates growing by "big incre- ments" a year ago, Anchustegui said. Fernando Bernal, commercial director for Grupo Transportes Monterrey, one of the largest Mexican trucking companies with 2,250 trucks, said contract rates have decreased 3 to 5 percent in the last five months of 2019 from where they were a year prior, while spot rates have fallen 7 to 12 percent. Minimal rate growth is one of sev- eral issues Mexican truckers expect to face in the coming year, along with a shortage of equipment due to the far larger volume of exports to the United States than goods moving to Mexico, an ongoing lack of security and difficulty in finding rest areas in order to comply with Mexico's new hours-of-service regulations. Changing capacity Mexican truck rates rose in 2018 and early 2019 — with some users reporting increases of 10 percent in April. Rates were up in part because of the introduction of new regula- tions in August 2018 that limited the time truck drivers could spend

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