Journal

U.S., Mexico reach new trucking agreement

Ferro defends taxpayers buying EOBRs for Mexican carriers

The U.S. and Mexican governments on March 3 announced an agreement in principle to implement the long-delayed cross-border trucking provisions of the North American Free Trade Agreement. The agreement upholds previous requirements for Mexican trucks operating on U.S. highways, notably that Mexican fleets apply for and receive authority from the Federal Motor Carrier Safety Administration; demonstrate they meet the same safety standards as U.S. fleets; and are prohibited from hauling freight between U.S. destinations.

Mexican Carriers Untitled 1Mexico is the second-largest export market for the United States, and the American Trucking Associations says it is hopeful that the lifting of the retaliatory tariffs that were imposed after a previous cross-border trucking pilot program was abolished by Congress in 2009 will help the two countries resume more normal trading patterns and increase the flow of commerce between the two countries.

“When properly implemented, NAFTA’s trucking provisions should evolve to allow for a more efficient, safe and secure environment for cross-border operations between the U.S. and Mexico,” says Bill Graves, ATA president and chief executive officer. “Ensuring a level playing field requires that both countries establish permitting and regulatory processes that are clear and transparent to ensure that carriers from both countries are treated equitably.”

However, Teamsters union president Jim Hoffa says the agreement “caves in to business interests” and that “Mexican trucks simply don’t meet the same standards as U.S. trucks.” Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, says the agreement will chip away at his group’s members’ freight opportunities in a struggling economy.

FMCSA Administrator Anne Ferro told Truckload Carriers Association members last month at TCA’s annual meeting in San Diego that the newly revamped program has stronger safety standards than the prior pilot program and is “an opportunity for Mexico to lift the tariffs that have done so much harm to farmers and other industries in the U.S.”

Instead of using only GPS systems, as was done in the prior program, Mexican trucks will have electronic onboard recorders paid for by the United States at an estimated cost of $500,000 to $700,000, a plan that drew heat from some U.S. legislators and the Teamsters. Ferro said FMCSA feels it necessary to have EOBRs in place for compliance, yet it could not demand Mexican carriers buy their own equipment because NAFTA stipulates that the United States cannot place demands on Mexican carriers that exceed those put on U.S. carriers. – Max Heine contributed to this story.


IN BRIEF

* The Truckload Carriers Association voted to support legislation and regulations that would mandate the use of electronic logging devices. TCA says the new policy is consistent with the industry’s commitment to cooperative measures for ensuring compliance with hours-of-service regulations.

* Congress on March 3 passed a long-term extension of the surface transportation authorization to fund infrastructure and safety programs through the end of September. President Obama in February proposed a $129 billion budget for the U.S. Department of Transportation, the first year of a six-year transportation plan that would provide $336 billion, a 48 percent increase over the previous authorization.

* Analysis of traffic on major highways in the nation’s 100 largest metropolitan areas shows that population growth and increases in interstate commerce spurred by economic recovery are fueling increases in traffic congestion and travel times nationwide, according to the INRIX National Traffic Scorecard 2010 Annual Report. To download the report, go to http://scorecard.inrix.com/scorecard.

* The Truckload Carriers Association elected Gary Salisbury, president and CEO of Fikes Truck Line Inc. of Hope, Ark., as 2011-2012 chairman. Salisbury previously was chairman of TCA’s Open Deck Division, where he is succeeded by Rick Miller, senior vice president of operations for MacKinnon Transport Inc. of Guelph, Ontario.

*Frozen Food Express announced that Stoney M. “Mit” Stubbs Jr. is retiring as CEO after 27 years and will remain on the company’s board, continuing his role as chairman. His replacement as CEO is S. Russell Stubbs, who also remains president of the Dallas-based company.



Driver Shortage Looms Large

Robert Low, president and founder of Prime Inc., told attendees during a panel discussion at the Truckload Carriers Association’s annual meeting in San Diego last month that a looming driver shortage will keep capacity tight and force rates up. “But what is a higher rate going to do for you if you can’t get a driver?” he asked.

Low and panelists Richard Stocking, president and chief operating officer of Swift Transportation, and Kevin Knight, president and chief executive officer of Knight Transportation, agreed that the ability to hire qualified drivers is the biggest challenge carriers face. The panel was moderated by Todd Amen, president of financial services firm ATBS.

Factors such as the Federal Motor Carrier Safety Administration’s Compliance Safety Accountability (CSA) program and the possibility of mandatory electronic onboard recorders will shrink the pool of drivers further, panelists said. They also agreed that drivers don’t earn enough to compensate them for the difficulties of life on the road. “Drivers need predictability in their lives, in their home time and their paycheck,” Stocking said.

The industry has “really taken a step back” from progress it had made on rates and driver compensation during the years leading up to 2005-2006, Knight said. Carriers were getting paid to sit and passed rate increases on to drivers.

“If we aren’t able to make investments in our driver force and our equipment, we quickly won’t have the leading transportation system in the world,” he said. “Everything that got delayed is going to have to get caught up.”

Low and Stocking spoke positively about the long-term viability of using leased owner-operators to meet their capacity needs. “They have a business-owner mentality, so they run more miles,” said Stocking. Swift runs about 4,000 owner-operators, and he said they not only work harder, but they watch costs more closely.

If finding drivers is the biggest challenge for carriers, the biggest opportunity for the industry “is to not be asleep,” Stocking said. “When times are good, you have a responsibility to continue to refine and align and not get fat and sassy, but to really buckle down. This is a cycle, and it will turn down again,” he said.

But until then: “Now is a great time to be a trucker,” Low said.

– Linda Longton



Groups speak out against hours proposal

The public comment period ended March 4 for the Federal Motor Carrier Safety Administration’s proposed rulemaking on hours-of-service requirements for commercial vehicle drivers. A number of industry groups voiced concern over the proposed rule and called on FMCSA to stick with the current hours-of-service regulations. During her remarks at the Truckload Carriers Association’s 2011 annual convention, FMCSA Administrator Anne Ferro said the agency received more than 25,000 comments on the proposed rule.

The National Private Truck Council called on FMCSA to keep the current rules with the exception of the sleeper berth provision. “FMCSA has assumed that the proposed changes will improve motor carrier safety despite contrary evidence, the existing safety record and the agency’s prior policy statements,” said the NPTC. “The current hours-of-service regulations have not harmed motor carrier safety as many opponents predicted. In fact, these regulations have contributed to a remarkable and unprecedented improvement in crash and fatality rates involving heavy trucks.”

The American Trucking Associations deemed the proposed changes as politically motivated and said the current rules are based on science and have been proven to function safely. “In its current hours-of-service proposal, the agency has abandoned years of objective analysis in favor of speculation and internal ‘judgments’ of critical areas,” ATA said in its comments. “In short, the agency is far from making any sort of case that the hours-of-service rules should be changed, and the obvious strains in its attempt to justify those changes illustrate how ill-considered they are.”

The Commercial Vehicle Safety Alliance said that the proposed rules could make roadside enforcement more complex and open the door toward more drivers falsifying their records. “The consensus from our state and jurisdictional enforcement members regarding these proposed rules is that they are confusing and not easily understood,” said Stephen Keppler, CVSA executive director. “The proposed rules, in our view, will be more difficult to enforce roadside than the rules in place today.”

In late February, a bipartisan group of congressmen and senators called on the Obama administration to abandon the hours-of-service proposal. “The rules currently in place are working well and do not need to be changed,” 122 representatives wrote to U.S. Transportation Secretary Ray LaHood. “Since the current rules were implemented seven years ago, the trucking industry’s safety performance has improved at an unprecedented rate.” – Jeff Crissey