Want to Double Exports? Take a Hard Look at the US Side of the Truck Feud

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Over a year and a half ago we reported on a major trade dispute between the US and Mexico, specifically over a US ban on Mexican origin trucks crossing the border into the US. Mexico retaliated with US/Mexico truck dispute punitive tariffs that totaled $2.4 billion annually, according to the Wall Street Journal. The US, in disallowing Mexican trucks to cross the border, has violated the North American Free Trade Agreement. But no more — the two countries have brokered a deal in which half of the tariffs would get eliminated upon signing of the treaty (expected in 60 days, according to the story) and the other half of the tariffs would get eliminated when the first Mexican trucks pass a series of tests including drug tests, English language tests and safety tests.

Jim Hoffa, president of the International Brotherhood of Teamsters Union, had argued for the ban suggesting that, according to the WSJ, the new law “caves in to business interests at the expense of the traveling public and American workers.”

The punitive tariffs have harmed industry and stifled job growth according to US Chamber of Commerce President Tom Donohue: “This delay put more than 25,000 American jobs at risk, and retaliatory tariffs have been in place for two years on many U.S. products entering Mexico.

The argument for lifting the trucking ban, however, extends far beyond the jobs issue as well. From a US-import perspective, the existing process of essentially forcing every single inbound truck to change over to an American carrier adds nothing but hassle and extends the inbound supply chain. Crossing into the US border already creates potential excessive delays particularly due to the drug wars raging throughout Mexico (and some US cities). In a time-motion study from 2004, analyzing Northbound traffic (Mexico-US) truck re-loading times within Mexico can equate to 17 percent of the total time of moving goods from the border through to the US side.

But the biggest shocker of the time motion study involves the inherent efficiencies (or inefficiencies) of the US side of the equation (not the Mexican side). If you look at the time it takes to process the inbound or outbound truck from the US and Mexico, one might expect that to be about equal. If you made that assumption, you’d be dead wrong. Consider this:

  1. Leave out the time it takes to truck goods from Chicago to Laredo (it is what it is). The time study concluded that all of the remaining procedures (inspections, drayage, warehousing, congestion, wait time, etc.) ranged from 12 hours to 81 hours (in other words, to export US made goods, it takes 12 -81 hours at the border)
  2. On the import side of the equation it takes 1.3 to 10.5 hours

The Mexican side of the equation (e.g. the time it takes for the procedural aspects of border crossing) from Mexico to the US is 2.8 6 hours and from the US to Mexico 2.6 5.3 hours.

And here I thought the President wanted to double exports in five years!

–Lisa Reisman

Comments (4)

  1. Ben Lujin says:

    It is ignorant to only compare import/export times at our southern border, when criticizing about the desire to double exports. First of all, the mere pittance in increased Mexican exports wouldn’t scratch a dent in doubling exports. You need to tap into the India/China markets, full force, to do that!
    Second, Mexico has asked that we help in curbing the flow of guns being exported from the U.S., into Mexico.

    Near negligible import/export times on the Mexican side of the border is only indicative of how little they ACTUALLY care about what’s crossing their border!

    Third, moving forward with the Mexican trucking border-crossing program doesn’t even address export times on American products, to Mexico. It just eases their ability to import drugs and illegal immigrants!

    Finally, knowing that Mexican trucks may be heading deep into the American interior. U.S. customs and border agents just might increase scrutiny of each and every Mexican truck, desiring to cross our border. While this sounds great for the safety fanatics. What it will effectively do, is increase border import wait times. To compound the problem, this could create delays for the Mexican trucks that currently cross the border multiple times a day, on short hauls.

    Thank you for not taking a hard look at the situation yourself first!

    1. admin says:

      Ignorant? That’s a bit harsh don’t you think? The reality is we’ve spent all this time arguing over Mexican trucks but we have US goods sitting in warehouse for up to a week! All that for gun checks? Talk about process inefficiencies!
      Of course you are completely right about India and China and elsewhere. I don’t disagree with you for a moment but if this country wants to double exports, it has to look at all of the bottlenecks. Would this one fall into an 80/20 analysis? Perhaps not but the larger issue of the US and its export bureaucracy is probably fodder for more posts like this one!

      BTW, I’m all for increasing scrutiny on the import side!! LAR

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