Journal

user-gravatar Headshot
Updated Apr 28, 2012

U.S., Mexico formalize cross-border program

Mexican drivers must have EOBRs, be tested for drugs

U.S. Transportation Secretary Ray LaHood and Mexican Secretary of Communications and Transportation Dionisio Arturo Pèrez-Jàcome Friscione on July 6 joined in Mexico City to sign agreements resolving the long-running dispute between the United States and Mexico over long-haul cross-border trucking services. Under the agreements, Mexican trucks will be allowed to engage in cross-border operations and will be required to have electronic onboard recorders to track hours-of-service compliance.

In addition, the U.S. Department of Transportation will review the complete driving record of each driver and require all drug testing samples to be analyzed in Department of Health and Human Services-certified laboratories located in the United States. DOT also will require Mexican drivers to undergo an assessment of their ability to understand the English language and U.S. traffic signs. The new agreement also ensures that Mexico will provide reciprocal authority for U.S. carriers to engage in cross-border long-haul operations into that country.

The new program paves the way for Mexico to lift tariffs it imposed more than two years ago.

The new program also paved the way for Mexico to lift tariffs it imposed more than two years ago. Pursuant to a separate trade agreement, Mexico was to lift retaliatory tariffs on more than $2 billion in U.S. manufactured goods and agricultural products, and was to suspend all of the tariffs within five days of the first Mexican trucking company receiving its U.S. operating authority.

“The agreements are a win for roadway safety, and they are a win for trade,” LaHood said. “By opening the door to long-haul trucking between the United States and Mexico, America’s third-largest trading partner, we will create jobs and opportunity for our people and support economic development in both nations.”

After the previous cross-border trucking program was terminated in March 2009, LaHood and other Obama administration officials met with lawmakers, safety advocates, industry representatives and others to address a broad range of concerns, which DOT took into account as it worked with Mexico to develop the new program. The final program published July 6 in the Federal Register addressed the recommendations of more than 2,000 commenters to the proposal issued by the Federal Motor Carrier Safety Administration in April. To view the notice, go to www.fmcsa.dot.gov/rules-regulations/administration/rulemakings/notices/US-MX-agreement-FR-notice.pdf.

Reactions vary

The American Trucking Associations welcomed DOT’s latest attempt to address the efficiency of trucking and trade with Mexico. “ATA is encouraged that Mexico will soon be dropping its incredibly damaging tariffs, which will also spur growth in trade between our two countries,” said Bill Graves, ATA president and chief executive officer. “We also note that Mexican fleets participating in the program will be bound by the same rules and regulations applicable to American carriers, and we are pleased that the agreement allows for U.S. carriers to compete in Mexico.”

Graves said ATA remained concerned with the expenditure of taxpayer dollars for EOBRs to monitor Mexican carriers. “However, we do appreciate the Department of Transportation’s position that this financial help will be limited to the term of the pilot program and allows the U.S. to more effectively audit participating Mexican carriers,” he said.

The U.S. Chamber of Commerce also expressed its approval. “It’s well past time that we complied with the promise we made nearly two decades ago that allow carefully inspected trucks to move across the border,” said Thomas Donohue, U.S. Chamber of Commerce president and CEO. “This is a vital step toward a more efficient U.S.-Mexico border.”

But Teamsters General President Jim Hoffa argued that opening the border endangers America’s highway safety, border security and warehouse and trucking jobs. Hoffa said the program probably is illegal because it grants permanent operating authority to Mexican trucks after 18 months, while Congress has not granted DOT the legal authority to do so. He also questioned the legality of DOT’s use of Highway Trust Fund dollars to pay for EOBRs for Mexican trucks.

“Opening the border to dangerous trucks at a time of high unemployment and rampant drug violence is a shameful abandonment of the DOT’s duty to protect American citizens from harm and to spend American tax dollars responsibly,” said Hoffa. The Teamsters had urged the administration to bring a challenge against Mexico for imposing excessive tariffs on U.S. goods after the previous cross-border pilot program was shut down. “The Bush-era pilot program was a failure that shouldn’t be repeated,” he said.

The Owner-Operator Independent Drivers Association filed a petition with the U.S. Court of Appeals for the Washington D.C. Circuit to halt the program. OOIDA also scolded LaHood for signing the agreement with Mexico without providing the public or Congress with the final details of the deal.

“If the agreement is good for the U.S., why is he sneaking down there to sign it?” said Jim Johnston, OOIDA president. “So much for their supposed transparency. Why not let the public see the details before signing the agreement? Seems like the administration is dead-set on caving to Mexico’s shakedown regardless of the costs to the American public and our tax coffers.”

Legislation submitted shortly after DOT’s announcement would specifically prevent the use of U.S. funds to pay for EOBRs on Mexican trucks. U.S. Rep. Peter DeFazio (D-Ore.), ranking member of the House Subcommittee on Highways and Transit, says DOT’s EOBR measure is an inappropriate use of U.S. funds.

“As we debate deep and harsh cuts to programs that help middle-class families, it is outrageous that taxpayers are being told to foot the bill for the Mexican trucking industry to comply with American safety standards,” DeFazio said of the Protecting America’s Roads Act. “Let the Mexican government or the Mexican carriers pay for their equipment, and let’s use U.S. gas tax revenue for its intended purpose of putting Americans to work rebuilding our roads and bridges.” – Dean Smallwood



IN BRIEF

* A U.S. Federal District Court judge ruled that the Port of Long Beach must conduct a study to evaluate the environmental impacts of its settlement with the American Trucking Associations, which had objected to certain provisions of the Clean Trucks Programs enacted in 2008 by both the Long Beach and Los Angeles ports. ATA’s case against the Los Angeles port continues.

* The U.S. Department of Transportation made $527 million available for a third round of its TIGER competitive grant program, which funds innovative transportation projects that address job creation and make a significant impact on the nation, a region or a metropolitan area.

* Echo Global Logistics Inc., a Chicago-based transportation management company, acquired substantially all of the assets of Advantage Transport Inc., a Phoenix-based truckload transportation brokerage firm now doing business as Echo; terms were not announced.

* Danbury, Conn.-based Odyssey Logistics & Technology Corp. acquired Kennesaw, Ga.-based Capital Transportation Solutions, a nonasset-based third-party logistics provider specializing in LTL transportation spend management; terms were not released.

* Greatwide Logistics Services named John Tague chief executive officer. Tague succeeds Leo Suggs, who is retiring as CEO but will continue as chairman.

* Max Fuller, co-chairman of U.S. Xpress, and Robert Low, president and founder of Prime Inc., will share their insights during the second annual Commercial Vehicle Outlook Conference, set for Aug. 24-25 at the Dallas Convention Center. For more details and to register, go to www.cvoconline.com.



ATA applauds progress on highway authorization

The American Trucking Associations last month applauded a six-year highway authorization proposal that calls for spending $230 billion, nearly 20 percent less than the last long-term bill – SAFETEA-LU, the Safe, Accountable, Flexible, Efficient Transportation Equity Act: A Legacy of Users – that was signed into law in 2005.

Rep. John Mica (R-Fla.), chairman of the U.S. House Transportation and Infrastructure Committee, says future spending should not exceed the funding available in the Highway Trust Fund, which has been extended by Congress several times with general fund money in recent years.

“ATA appreciates the herculean effort to craft a comprehensive six-year reauthorization proposal in the face of very difficult fiscal realities,” says Bill Graves, ATA president and chief executive officer.

The trust fund has been insolvent because its main funding mechanism, the federal gas tax, has been hurt by higher-mileage and alternative-fuel vehicles that have reduced gas consumption. The spending level proposed by Mica at a July 7 Capitol Hill briefing would cut funding to states for road and bridge programs.

Graves said ATA approves of the level and type of reforms in the proposal, including prohibiting tolling of existing interstates, maintaining funding for federal highway safety programs, maintaining a policy of no earmarks, eliminating requirements on states to fund nonhighway activities and consolidating programs.



Fighting Fraud in Transportation Act introduced

The Owner-Operator Independent Drivers Association last month announced its approval of the introduction of the Fighting Fraud in Transportation Act in the U.S. House of Representatives. U.S. Rep. Frank Guinta (R-N.H.) and U.S. Rep. Russ Carnahan (D-Mo.) introduced H.R. 2357 in response to concerns about unscrupulous brokering practices that might take advantage of small-business truckers.

The congressmen worked with OOIDA, the Transportation Intermediaries Association and the American Trucking Associations to develop the legislation. The bill would:

• Increase the broker surety bond requirement from $10,000 to $100,000 and expand that bond requirement to freight forwarders;

• Increase requirements and disclosures for any person or company seeking to obtain broker or freight forwarder authority;

• Establish significant penalties for violations of broker regulations, including unlimited liability for freight charges for conducting brokerage activities without a license or bond; and

• Establish strict guidelines for companies that provide brokers with surety bonds and on how they administer bonds.



EPA SmartWay Drayage Program launched

The Coalition for Responsible Transportation, U.S. Environmental Defense Fund and U.S. Environmental Protection Agency last month launched the EPA SmartWay Drayage Program, an initiative based on the SmartWay Transport Partnership designed to build a partnership between goods movement stakeholders – including major national retailers, trucking companies, port communities, environmental groups and EPA – to reduce emissions from port drayage trucks.

Under the SmartWay Drayage Program, port trucking companies and owner-operators will sign a partnership agreement and commit to track diesel emissions, replace older trucks with newer ones and achieve at least a 50 percent reduction in particulate matter and 25 percent reduction in nitrous oxide, below the national industry average, within three years.

Similarly, SmartWay retailers sign a partnership agreement where they commit to ship at least 75 percent of their port cargo with SmartWay trucking carriers within three years. By giving business priority to SmartWay drayage carriers, the program creates a market-driven approach to incentivize emissions reductions at port communities across the country.



FUEL SAVVY

Clean energy strategies target trucking industry

Two separate but related announcements last month intend to help steer the trucking industry toward a more sustainable energy future. Chesapeake Energy Corp. announced a $150 million investment to accelerate the buildout of a liquefied natural gas fueling infrastructure for heavy-duty trucks at truckstops across the United States. Meanwhile, the U.S. Environmental Protection Agency is proposing to mandate the blending of 15.2 billion gallons of renewable fuel into the U.S. fuel supply and increase the proposed mandate for advanced biofuels by 48 percent to 2 billion gallons as part of the agency’s Renewable Fuel Standard program.

Aubrey McClendon, Chesapeake’s chief executive officer, says his company’s investment in Seal Beach, Calif.-based Clean Energy Fuels Corp. will help underwrite about 150 LNG truck fueling stations, creating the foundation for what Chesapeake calls “America’s Natural Gas Highway System,” increasing by more than tenfold the number of publicly accessible LNG fueling stations and providing a foundational grid for heavy-duty trucks to have ready access to cleaner and more affordable American NG fuel along major interstate highway corridors. “As confidence grows in the buildout of a national grid of a CNG and LNG fueling infrastructure, we are confident that OEMs of all vehicular classes will vastly increase their production of CNG and LNG vehicles,” McClendon says.

McClendon says both businesses and consumers will be able to acquire NG vehicles on a large scale and embrace a cleaner American fuel that costs about $1.50-$2 per gallon less than gasoline and diesel, and that the conversion of the heavy-duty truck market to NG also would provide significant environmental benefits.

EPA’s proposed increases in the 2012 percentage standards for advanced biofuels and renewable diesel fuel is another important step in helping the United States achieve a sustainable energy future, says Allen Schaeffer, Diesel Technology Forum executive director. “The proposed increase to 1 billion gallons of biomass-based diesel and 2 billion gallons of advanced biofuels will play a significant role in reducing emissions and our dependence on foreign oil production.”

Schaeffer says today’s diesel engine and equipment makers increasingly are welcoming high-quality bio-based fuels into most diesel engines in blends of 5 percent to 20 percent. “Thanks to advanced refining and fuel processing technologies, the next generation of renewable diesel fuels produced with these technologies further enhances the benefits of clean diesel technology.”



Navistar sues EPA again over ‘irrelevant’ SCR rule

Navistar last month filed another suit against the U.S. Environmental Protection Agency, signaling the latest round in the ongoing battle between the exhaust gas recirculation-only engine manufacturer and its competitors, all of which are using selective catalytic reduction technology to meet 2010 diesel exhaust emissions regulations.

EPA in June updated its guidance for certification of truck engines using SCR, calling on SCR engine makers to continue developing warning systems that alert drivers when the truck’s diesel exhaust fluid tank is nearly empty or filled with a liquid other than DEF. The new guidance, mostly in response to previous claims made by Navistar that SCR technology can be circumvented, also urged OEMs using SCR to research methods that would inhibit tampering with SCR system operation and incorporate further inducements for drivers to comply.

Navistar alleges in the suit filed July 5 with the U.S. District Court for the District of Columbia that the truck maker, a contractor it hired and the California Air Resources Board all say nitrogen oxide emissions skyrocket when drivers don’t keep DEF topped off, rendering EPA’s rule “irrelevant” altogether. Furthermore, Navistar accuses EPA Director Lisa Jackson of not doing her duty to uphold the Clean Air Act and her agency of not doing its part to protect public health.

Navistar Public Relations Manager Stephen Schrier says the lawsuit is about ensuring a level playing field in the heavy-duty truck market, noting that testing done by Navistar shows that operators can “defeat” SCR systems by adding water or other substances to the system instead of DEF, allowing the trucks to operate indefinitely in violation of 2010 emissions regulations.

SCR engine manufacturers, however, say the new lawsuit is nothing new and are planning to file motions to intervene. “We think the complaint is frivolous, and that it won’t go anywhere,” says Brandon Borgna, media relations manager for Volvo Trucks.

– Jack Roberts