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Jan.26, 2015

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SURFACE & DOMESTIC TRANSPORTATION TRUCKING | RAIL | INTERMODAL | AIR & EXPEDITED | DISTRIBUTION 48 THE JOURNAL OF COMMERCE JANUARY 26.2015 By Mark Szakonyi and William B. Cassidy THE U.S. DEPARTMENT of Transportation's decision to finally open the border to Mexi- can trucking companies — a stipulation of the 1994 North American Free Trade Agreement stymied by opponents for two decades — resolves none of the political controversy over allowing Mexican trucks on U.S. highways and still faces severe political backlash from critics, including the Teamsters union. Whether those opponents can soften or reverse the decision, which enjoys the back- ing of the Obama administration, the largest U.S trucking lobby and the U.S. Chamber of Commerce, remains to be seen. In the end, however, the real question is how many Mexican truckers will actually head north, and what that means to the congestion faced by the 90 percent of U.S.-Mexico trade that moves by truck. "Once they're given the green light forward, you will start seeing more people (truckers) jumping on the ship," Nelson Balido, chairman and CEO of the Energy Council of the Americas and a former pres- ident of the Border Trade Alliance. Unless the processes used to move those truck- ers through Mexican and U.S. customs improves, however, truck lines and delays at border crossings will just get longer. "The next question is how do we move those trucks safely and securely to their destination? How do we secure the border while keeping trade f luid? Having more trucks is not going to get us across the border faster," Balido said. Those opposed to granting Mexican truckers U.S. operating authority made their outrage known hours after the DOT released its decision on Jan. 9. The Team - sters and the Owner-Operator Independent Drivers Association pointed to a recent report from the DOT Office of the Inspec- tor General that concluded a three-year U.S.-Mexico cross-border trucking pilot program didn't collect data from enough car- riers to project the "overall safety performance" of Mex- ican trucking companies. (The OIG report did con- firm that the DOT adequately monitored carriers in the pro- gram to ensure they complied with U.S. safety requirements and confirmed those Mexican participants performed no worse when it came to safety than U.S. carriers.) "This policy change by the DOT flies in the face of common sense and ignores the statutory and regulatory requirements of a pilot pro- gram," Teamsters President Jim Hoffa said in a statement. Todd Spencer, executive vice president at OOIDA, said the push to expand the pilot was "mind-boggling," consider- ing the DOT's Federal Motor Carrier Safety Administra- tion "tells us ad nauseam that their highest priority is safety. Yet this program is all about geopo- litical economics." Although opponents say Mexican drivers and their equipment are unsafe, a congres- sional report released in January 2014 found that the rate of Mexican trucking companies placed "out of service" for safety reasons in the pilot was lower than the U.S. average. U.S. Transportation Secretary Anthony Foxx said as much in a statement. "Data from the three- year pilot program, and additional analysis on almost 1,000 other Mexican long-haul truck- ing companies that transport goods into the United States, proved that Mexican carriers demonstrate a level of safety at least as high as their American and Canadian counterparts," he said. Although the DOT didn't identify those "other" carriers, as many as 1,300 Mexican companies have operated trucks in the U.S. under certificates granted by the defunct Interstate Commerce Commission and the DOT as far back as 1987. Those compa - nies are not for-hire carriers or haul exempt commodities. As recently as 2011, the FMCSA was tracking safety data from 850 of those companies. Cross-border trucking with Mexico has been the focus of two FMCSA pilot projects. Congress and the Obama administration killed the first, a Bush-era pro - gram, in 2009, spurring Mexico to impose more than $2.4 billion in punitive tariffs on a variety of U.S. goods. Mexico suspended the tariffs after the U.S. launched the second pilot in 2011. That program ended Oct. 10, 2014. "We have been, and will continue to work with Mexico to ensure that the threat of retalia- tory duties will now be brought to a swift conclusion as well," U.S. Trade Representative Michael Froman said in a statement wel- coming the news. Beyond fulfilling NAFTA commit ments, opening t he border to long-haul Mexican trucks could shift accelerating cross-border trade into an even higher gear. Trade by value hauled across the U.S.-Mexico border increased 9.6 percent year-over-year to $34 billion in October, according to the latest U.S. Bureau of Transportation Statistics. Booming Mexican manufacturing serving U.S. mar- kets is driving that trade, with the majority of the record 2.6 million vehicles exported by Mexico last year headed to the United States. Rising Asian labor costs, lower transportation and energy costs and better supply chain control also have driven white OPEN FOR BUSINESS Controversy rages on despite U.S. decision to allow in more Mexican trucks

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