Home > Shop Talk for Truckers > Trucking In Mexican Commerce > Trucking In Mexican Commerce
Become the page sponsor for Trucking In Mexican Commerce!
Trucking In Mexican Commerce
sponsored by Transglobal ATTM Card
While most of the current thinking about trucking in Mexican commerce springs from the North American Free Trade Agreement (NAFTA), which was born in the last decade, there are a significant number of American and Canadian carriers that began their experience in dealing with Mexican commerce some twenty years ago.
As trade between the United States and Mexico has grown, so has the logistical problems associated with getting the goods to the marketplace. While rail traffic has always had a place in moving those goods from north to south and vice-versa, the rail infrastructure never adapted to the requirements for heavy traffic. For one thing, at all seven of the major border crossings with Mexico, there is generally only one railroad trestle. That within itself limits rail traffic. Some border crossings tried to innovative with their rail system by moving traffic north to south for twelve hours, and then moving traffic south to north for twelve hours. The problem with that scheme is that the administrative support associated with the movements was generally available only in day time hours, Monday through Friday. While after hours service could be arranged, it was costly, and most shippers did not want to pay the premium prices for getting the freight moved.
So trucking came to play a dominate role in moving freight between the two borders and is certainly the dominate force working today. Over the past twenty years, participation in Mexican commerce grew from a handful of US carriers to literally hundreds today. As the US government takes more steps to open the border in NAFTA commerce, there will be an explosion of carriers seeking to establish a niche in the transportation market place. That explosion will include numerous Mexican carriers seeking to begin continuous movements from Mexico to the US and Canada. There are some 190 Mexican carriers with operating authority applications pending with the Department of Transportation. Just recently, the Bush administration ordered the Secretary of Transportation to clear the way for Mexican ownership of US carriers. So the trucking industry in America (and Canada) are on the brink of a new era in highway transportation.
The provisions of NAFTA originally called for the reciprocal flow of truck traffic across the border in the mid-90’s, but it was continously postponed year after year as various segments of the US trucking industry raised questions about the viability of Mexican trucking companies operating in the US. Labor groups raised some legitimate questions about safety and compliance causing federal agencies to take a different approach to the problem, and resulting in a significant number of additional employees being hired to assist in maintaining better compliance with safety requirements at the border. Critics of the Mexican trucking companies operating in the US simply pointed to the experience of the border communities such as Brownsville, Laredo, and El Paso, Texas where hundreds of Mexican carriers have operated for years with overweight units that would never have passed a DOT roadside inspection.
But things have changed in Mexico. The Mexicans are now able to purchase new trucks at a more reasonable price. The management of the companies are younger, having taken over the operations from their parents. In many cases, these Mexican trucking managers are US educated, speak English, and are forward-thinking in their approach to running their companies. Most legitimate Mexican carriers have a keen sense of appreciation for doing those things that will insure their success and keep them profitable. Most Mexican carriers have a desire to become compliant with US regulations. They just don’t know how. It can be said that there is a huge market awaiting the US companies who offer support services in the area of authority applications, permits, driver training, hazardous materials training, and other such areas where the Mexican carriers will need to avail themselves of such services. It should also be said that those companies that are successful in providing those services will be those who have bothered to learn and understand the Mexican culture and the Spanish language. Difficulties in the past have often centered around the problem of an American company trying to force the American way down the throat of the Mexicans.
While the Mexican government has been reciprocal in removing the barriers to foreign ownership of Mexican trucking companies (previously limited to 49%), there remain obstacles to US carriers operating in Mexico. First and foremost, not being able to speak Spanish is just going to be so prohibitive and will make for slow progress. Secondly, some US equipment is just not suitable for Mexican commerce. For example, the Mexican government has long banned the use of 53 foot trailers, although there may be a change forthcoming.
Additionally, the US carrier must be prepared to obtain a secure terminal yard facility at the border crossing. Rarely does a shipment arrive at the border and cross the same day. Even if it does, there will have to be a terminal yard facility secured on the Mexican side because even though the trailer has crossed over, it probably will not clear Mexican customs on the same day. The real estate market has become tight on the US side and is even tighter on the Mexican side.
The carriers who have operated successfully in Mexican commerce over the past twenty years have been those who developed interline partnerships with a reputable Mexican carrier. This partnership succeeded because it was the Mexican carrier who made all of the logistical support arrangements at the border crossing. All the US carrier had to do was take the loaded trailer to the border, deliver it to the designated terminal yard, hand over paperwork, and then get a dispatch which consisted of hooking up to an empty trailer or taking a loaded trailer from the yard back north. While this process may sound simple, it requires a lot of communication and coordination with the Mexican carrier. In the past, the US shippers paid the American portion of the freight bill while the Mexican customer paid the Mexican leg of the freight bill. Today, arrangements are made fairly easily for portal-to-portal freight bills. The costs associated with the border crossings is generally assumed by the Mexican carrier who passes them on to the Mexican customer, or sometimes they are negotiated between the American and Mexican parties.
The worse thing that can happen to an American carrier is to jump off into Mexican commerce leaving the trailer in the hands of the freight forwarder who may hand it off to just any old carrier. The US carrier will be much better served by finding a reliable, legitimate Mexican carrier and developing a written partnership agreement between the two carriers outling the responsibilities of each carrier. This provides for much better accountability and the US carrier will never have to wonder who has the trailer or where it is. Security of the equipment will be much better and the border operation will be much smoother.
Trucking in Mexican commerce is not for the faint-hearted, and no carrier should enter the marketplace without having done due diligence in research. Finally, the US carrier that is contemplating Mexican commerce cannot just dabble in it to see how it goes. It requires a firm commitment to the same principles for successful business in the US.
Mucha Suerte! (Good Luck!)
|
