FMCSA expects ‘relatively few’ Mexican carriers

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The federal motor carrier safety administration expects some 3,500 Mexican trucking companies to seek authority to operate in the interior of the United States when the Bush administration opens up the entire country to Mexican trucks by the end of the year, acting FMCSA chief Julie Cirillo told Congress last month.

Testifying at a House Appropriations transportation subcommittee hearing, Cirillo said that this number represents a “relatively few number of carriers,” adding that virtually all of the applications will come from carriers that have been operating in the so-called “commercial zones” in the four states abutting the Mexican border.

The fear of a flood of Mexican trucks operating throughout the country will not happen, Cirillo said, because they are at a competitive disadvantage with U.S. carriers. “They have no relationships established with suppliers and shippers that would allow them to bring goods back into Mexico,” she noted.

FMCSA has proposed three new rules (see page 16) intended to assure that Mexican carriers, trucks and drivers operating in the United States meet safety standards similar to those covering their U.S. counterparts. Earlier this year, a North American Free Trade Agreement arbitration panel ruled that the U.S. government had to grant Mexican carriers greater access to the United States.

Cirillo said that about 9,500 Mexican carriers currently operate in the border zones, which generally stretch as far as 20 miles inland from the border. Of those, the California Trucking Associations estimates that 3,000 that now operate in the California border zones likely will seek inland authority to gain access to the port of Los Angeles, Cirillo said. Another 500 operating in Texas likely will seek authority to carry steel and oil from Mexico to the port of Houston or the port of New Orleans. In most other border areas, Mexican carriers generally haul produce and likely aren’t interested in operating beyond the commercial zones, Cirillo said.

Although all carriers now operating in the commercial zones would have to reapply for authority, they would have one year after the border opening to secure new authority. The grace period will help not only the carriers themselves but also the border safety inspectors. The agency plans to hire 80 new safety personnel at the border in fiscal 2002, which begins October 1, if Congress approves the Bush budget request for that year. Even if those people are hired, it will take time to train them and get them on the job. Texas, for example, might require two to three years to hire new people and build new facilities to handle the increased load, Cirillo said.

Legislators and labor worried
Cirillo painted a picture of a relatively good Mexican truck safety system, but Rep. Frank Wolf, R-Va., expressed concern. “I think it’s a mistake to allow the trucks in,” Wolf said. “I think there will be a lot of people killed” in accidents involving Mexican trucks.
Rep. Martin Sabo, D-Minn., shared the concern. “I am very skeptical that the proposed system that is being developed (to regulate Mexican trucks) is going to ensure the safety of American travelers as many, many more trucks from Mexico come into this country,” Sabo said.
Rep. James Oberstar, D-Minn., the top Democrat on the key House Transportation & Infrastructure Committee, introduced a nonbinding resolution (H. Res. 152) urging President Bush to delay expanded access to Mexican carriers until he certifies that:


  • Those carriers are able and willing to comply with safety and environmental laws and regulations;
  • The U.S. government is able to enforce adequately those laws and regulations at the U.S.-Mexico border and in each state;
  • Granting expanded authority will not endanger the health, safety and welfare of U.S. citizens.

Key groups representing drivers, including the International Brotherhood of Teamsters and the Owner-Operator Independent Drivers Association, quickly endorsed the resolution. “The serious shortcomings of trucks from Mexico is a problem which too many lawmakers are ignoring,” said OOIDA President Jim Johnston.

For the Teamsters, blocking expansion of Mexican truck operations is a high priority. In a recent speech at the National Press Club, Teamster President James Hoffa questioned the safety of Mexican trucks. He cited a lack of driver training, faulty trucks, inadequate record-keeping, multiple driver’s licenses in Mexico and a shortage of border inspections. “It’s really easy to get a license down there – anybody can drive a truck,” Hoffa charged. “Over there, they have no computers. So if somebody gets a ticket in New Hampshire, it doesn’t mean anything – you can rip it up – and it doesn’t go on his record.”

According to the Department of Transportation’s inspector general, the safety of Mexican trucks and the U.S. government’s ability to ensure safety aren’t quite as bad as the Teamsters suggest. The IG’s office found some safety improvements over the past two years, but problems remain. Mexico has made some progress in recent years, the IG notes, by issuing a rule requiring hours-of-service logbooks, setting a standard for truck inspections and automating its information systems for carriers, drivers and trucks. In addition, the IG found that:


  • The out-of-service rate for Mexican trucks in fiscal 2000 was 36 percent – higher than the 24 percent rate for U.S. trucks but below the 44 percent for Mexican trucks in fiscal 1997;
  • The number of border inspectors has increased from 13 in fiscal 1998 to 60 in fiscal 2001, and FMCSA is seeking funds for another 80 in fiscal 2002. The IG argues that that if FMCSA does not have in place the 80 additional inspectors it is seeking, inspections will continue to be inadequate;
  • Few improvements have been made to inspection facilities used by federal and state commercial vehicle inspectors at border crossings.

The DOT IG also found a direct connection between the number of border inspections and the out-of-service OOS rate, noting that in California – where inspectors are present during all commercial operating hours at its two main crossing points – the Mexican OOS rate at one crossing was 23 percent, which is lower than the average for U.S. trucks at all crossings. A copy of the IG’s report is available online at this site.

Estate taxes repealed in 2010
Congress, in late May, gave final approval to an 11-year, $1.35 trillion tax cut package that includes reductions in the estate and gift taxes through 2009 and a full repeal in 2010. Due to the asset-intensive nature of trucking, the so-called “death tax” has been a big issue for many company owners and a target of the American Trucking Associations.

Under the new tax law, the amount exempted from estate and taxes rises to $1 million in 2002, and the highest tax rate is capped at 50 percent. The exemption grows to $1.5 million in 2004, to $2 million in 2006 and to $3.5 million in 2009. At the same time, the top tax rate drops one percentage point a year until it reaches 45 percent in 2006. Beginning in 2010, the estate tax goes away altogether, and the gift tax is subject only to the top individual tax rate.

Other provisions of the tax law reduce the marginal income tax rates, gradually increase the child tax credit to $1,000 by 2010, reduce the so-called “marriage penalty” on married couples filing jointly and make various tax changes to promote saving and spending for education and saving for retirement. In addition, the new tax law provides for an immediate tax rebate of up to $600 for married couples and $300 for individuals to be paid by Oct. 1 this year.

For a summary of the new tax law, visit this site.

Vehicle use tax relief offered
Sen. James Inhofe, R-Okla., introduced legislation (S. 878) that would provide a prorated tax refund to truck owners who sell their vehicles but already have paid their annual heavy vehicle use tax. Under the bill, if an owner sells a truck in the same year that he paid the tax, he would be eligible to receive a prorated refund based on how much time was left in the tax year. The buyer would pay a prorated tax based on how much time was left in that tax year. Under current law, the seller has to pay the entire tax amount, while the buyer pays nothing. “As truck drivers continue to feel the heavy burden of rising fuel prices, I want to provide them with some form of relief,” Inhofe said.

Bill would speed up low-sulfur diesel
Reps. Ed Bryant, R-Tenn., and Bart Gordon, D-Tenn., introduced legislation (H.R. 1891) to require that all diesel manufactured or sold after Sept. 1, 2006 have a low sulfur content. The bill would overrule the Environmental Protection Agency’s plan to phase in low-sulfur diesel through 2010. The bill states that eliminating the second grade of on-road diesel would put less stress on the distribution system and eliminate misfueling. NATSO Inc., which represents the truck stop industry, objected to the phase-in and supports H.R. 1891. “With our nation’s energy challenges, it would be foolhardy to phase in the new fuel, which would only cause price spikes and supply shortages,” said NATSO President W. Dewey Clower.

Temporary fuel tax relief proposed
Rep. Nick Smith, R-Mich., introduced legislation (H.R. 1915) to suspend for six months the 4.3-cents-per gallon increase in federal gasoline and diesel taxes that adopted in 1993. In introducing the bill, Smith said that since Congress adopted the tax increase in 1993, “we’ve lost refinery capacity and increased our dependence on foreign petroleum imports by almost 20 percent.” Over the past eight years, there have been several serious efforts to repeal the 4.3-cent tax, but opposition from road construction interests has always thwarted the campaign.

Calendar

June 4-7: Intelligent Transportation Society of America’s 11th Annual Meeting and Exposition, Miami Beach Convention Center, Miami Beach, Fla. (202) 484-4549; www.itsa.org.

June 6-9: American Truck Historical Society Convention & Antique Truck Show, Reno Hilton Hotel, Reno, Nev. (205) 870-0566; www.aths.org

June 11-14: TMC 2001 Summer Meeting, Pointe Hilton Squaw Peak, Phoenix. (703) 838-1763; http://tmc.truckline.com.

June 26-27: National Tank Truck Carriers and FMCSA Cargo Tank Test and Inspection Workshops, Chicago. (703) 838-1960.

June 27-29: International Trucking Show, Las Vegas Convention Center, Las Vegas (800) 227-5992; www.truckshow.com>www.truckshow.com.

July 11-13: Truckload Carriers Association Refrigerated Division Annual Meeting, The Lodge at Sonoma, Renaissance Resort & Spa, Sonoma, Calif. (703) 838-1950; tcameetings@truckload.org.

July 12-13: Walcott Truckers Jamboree, Iowa 80 Truckstop, I-80 Exit 284, Walcott, Iowa. (319) 468-5519; www.iowa80truckstop.com.

Sept. 7-9: Great American Trucking Show, Dallas Convention Center, Dallas. (888) 349-4287; www.gatsonline.com.

Oct. 15-18: TMC 2001 Fall Meeting, Adams’s Mark Jacksonville, Jacksonville, Fla. (703) 838-1763; tmc.truckline.com.

Oct. 28-31: American Trucking Associations Management Conference & Exhibition, Opryland Hotel & Convention Center, Nashville. (703) 838-1755;
www.trucking.org.

Nov. 2-3: National Association of Small Trucking Companies Fall Seminar, Renaissance Hotel & Convention Center, Nashville, Tenn. (800) 264-8580; www.nastc.com.
2002

Jan. 13-17: Transportation Research Board 81st Annual Meeting, Washington, D.C. (202) 334-2934; www.national-academies.org/trb.

Jan. 20-25: National Private Truck Council Fleet and Transportation Management Institute, Austin, Texas. (703) 683-1300 (ext 206); www.nptc.org.

March 3-6: Truckload Carriers Association Annual Meeting, Bellagio Casino & Resort, Las Vegas.(703) 838-1950;tcameetings@truckload.org.

March 4-7: TMC 2002 Annual Meeting, Greater Fort Lauderdale Convention Center, Fort Lauderdale, Fla. (703) 838-1763; tmc.truckline.com.

March 21-23: Mid-America Trucking Show, Kentucky Fair & Exposition Center, Louisville, Ky. (800) 626-2370;
www.truckingshow.com.

Ensuring Mexican truck safety
The United States plans to permit authorized Mexican carriers to operate throughout the country before the end of this year. The Federal Motor Carrier Safety Administration has proposed several rules intended to ensure safe operation of those trucks and compliance with U.S. safety regulations.

If adopted, the proposed rules would:


  • Establish an application form and process for Mexican carriers seeking USDOT authority to operate only in U.S. municipalities and commercial zones adjacent to Mexico in Texas, New Mexico, Arizona and California.
  • Establish an application form and process for Mexican carriers seeking USDOT authority to operate beyond municipalities and commercial zones at the U.S.-Mexico border.
  • Establish a safety monitoring
    system and enforcement regime, the Safety Monitoring System and Compliance Initiative for Mexican Motor Carriers Operating in the United States, to help determine whether Mexican carriers conducting business anywhere in the United States comply with applicable safety regulations and conduct safe operations.

The new application procedures would require Mexican carriers to provide detailed information about their safety practices and to certify compliance with U.S. motor carrier safety regulations. As a condition of registration, all Mexican new entrant carriers would have to undergo at least one satisfactory safety audit within 18 months of receiving authority to operate in the United States.

Comments on the three notices of proposed rulemaking are due July 2. To view the documents online, visit this site and search docket numbers 3297, 3298 and 3299.