There has been some push-back by the Senate regarding the Mexico Pilot Program, proposed by the Federal Motor Carrier Safety Administration ("FMCSA") . In a letter to DOT Secretary Ray LaHood, U.S. Trade Representative Ron Kirk said the administration's pilot program will endanger U.S. companies' competitiveness.
Senator Rockefeller, who chairs the Senate Commerce Committee, also said he's not convinced that the plan will ensure safety, and he objects to having the FMCSA sponsor electronic onboard recorders for Mexican carriers.
FMCSA recently spelled out the details for three-year pilot program in which Mexican and U.S. carriers could offer long-distance service into each country. The pilot sets up a vetting and enforcement program to ensure the safety of Mexican trucks, with the goal of evaluating their safety performance, based on inspections at the roadside, ports of entry and weigh stations, and on traffic enforcement. Hazardous materials and passenger carriers will not be included in the program.
The program is the result of an agreement between President Obama and President Calderon of Mexico to resolve the long-standing dispute over cross-border trucking. Once the program is in place, Mexico will start to suspend the tariffs it levied when the Congress killed an earlier version of the pilot.
FMCSA Proposes US-Mexico Pilot Program
The pilot sets up a vetting and enforcement program to ensure the safety of Mexican trucks, with the goal of evaluating their safety performance, based on inspections at the roadside, ports of entry and weigh stations, and on traffic enforcement. Hazardous materials and passenger carriers will not be included in the program.
The program is the result of an agreement between President Obama and President Calderón of Mexico to resolve the long-standing dispute over cross-border trucking. FMCSA will publish the details of the program in the Federal Register on Thursday and will take comments for 30 days.
Once the program is in place, Mexico will suspend the tariffs it levied when the Congress killed the earlier version of the pilot. In 2009 Mexico imposed import tariffs on about 89 U.S. agricultural and industrial products, and in 2010 it revised and expanded the list to 99 products.
In general, the program will set up a three-stage process for Mexican carriers that wish to participate. FMCSA said it does not know how many Mexican carriers will join. The last program attracted 775 applications, but only 29 of those carriers completed the paperwork and were vetted.
The Process
The process will start with the Mexican carrier filling out a 28-page application covering details of its operations, including affiliations, insurance, safety program and compliance with U.S. laws.
The application will be followed by a pre-authorization safety audit, in which FMCSA reviews the carrier's safety management system and inspects the specific trucks that will cross the border.
The safety management system would have to include such elements as a drug and alcohol testing program and a way to verify hours of service, insurance and driver qualifications, among numerous other requirements. Trucks that pass the inspection will get a CVSA decal.
If the carrier passes the audit, it would receive provisional operating authority and could commence cross-border operations. Provisional authority will last for 18 months. After that period, if the carrier has no pending enforcement or safety improvement actions and has cleared a compliance review, it is eligible for permanent authority in the pilot program.
Mexican carriers that have permanent authority in the pilot program would be eligible to convert that to standard permanent authority after the three-year pilot program is done.
For the first three months of the provisional authority stage, Mexican trucks and drivers will be inspected each time they enter the U.S. That period will be extended if the carrier does not get at least three inspections.
After three months and clearing the audit, the carrier will get the same inspection rate as the rest of the trucks now engaged in cross-border, commercial zone trucking. To be eligible for this status, the carrier must have an out-of-service rate at or below the U.S. average and its Safety Management System scores must be below the FMCSA threshold.
If instituted, the pilot program would run for three years from the first grant of provisional authority, unless FMCSA gathers enough data to make a decision about the program before that time. The agency said it could stop the program earlier if continuation is not consistent with the pilot's goals.
FMCSA will publish on its website and in the Federal Register comprehensive data on the Mexican carriers in the program, including their names, their audit performance, the trucks that have been cleared, the results of roadside inspections and the number of trips. The agency will track each carrier's data to gauge compliance.
The U.S. and Mexican departments of transportation will establish a monitoring group to supervise the administration of the program. In addition, FMCSA is establishing its own advisory committee, a subcommittee of the Motor Carrier Safety Advisory Committee, for suggestions. And the agency will make annual reports to Congress.
Ferro describes FMCSA position in light of renewed US-Mexico border talks
Ferro, who spoke to trucking executives gathered during the annual meeting of the Truckload Carriers Association, acknowledged that the subject has been a flashpoint among carriers who do not support the idea of the U.S. spending taxpayer money on equipment for Mexican trucks.
She explained that under the North American Free Trade Agreement ("NAFTA"), the U.S. cannot require Mexican carriers to do anything that U.S. carriers are not required to do, but the agency still must provide a way to monitor those carriers for compliance with both the hours of service rules and the cabotage rules that restrict freight hauling between points in the U.S.
That program cost about $250,000 and the budget for the EOBR program is between $500,000 and $700,000, she said.
FMCSA's decision to install the electronic monitors is in light of the agreement to reopen the border to long-distance trucking is key to getting Mexico withdraw the more than $1 billion in tariffs it has levied on U.S. producers in retaliation for shutting down the prior program.
Ferro said the agency will publish its proposal for the border opening in a matter of weeks. At that point the public will have a chance to comment, before the deal is made final.
Border Program Concept
The concept for the border opening envisions a reciprocal, phased-in program, in which Mexico initially will reduces its tariffs by half. The rest of the tariffs would be suspended when the first Mexican carrier is granted operating authority.
The concept contains three elements: pre-operations vetting, monitoring of operations and communications to the public and Congress. Neither hazmat carriers nor buses would be permitted.
Pre-operations vetting would include an application process in which the number of participants in the first phase of the program would be limited to ensure oversight, subject to agreement with Mexico.
Included in the vetting would be are a pre-authority safety audit in which the agency would review the Mexican carrier's safety management program and the records of drivers who would be crossing the border, including their Mexican federal and state records. The drivers would be tested for English proficiency and knowledge of U.S. traffic laws. Mexican carriers' safety performance in Mexico would be reviewed, and the audit would include inspections of the trucks for U.S. safety and emissions compliance.
The "operations" component of the Border Program Concept provides for inspections - including inspections every time a truck crosses the border, for a period of time to be negotiated - and reviews to follow up on the initial screening review. A Mexican carrier would need to clear a Compliance Review and earn a Satisfactory Safety Rating in order to get full operating authority. Also, the FMCSA could conduct compliance reviews of Mexican drug and alcohol testing facilities.
Obama and Calderon agree to reviving border trucking agreement
Yesterday President Obama and President Calderon of Mexico made official their commitment to resolve the cross-border long-haul trucking dispute between the two countries.
The plan calls for a program similar to the pilot project proposed to Congress in 2009. The cut-off of that project led to a series of tariff actions by Mexico in retaliation for alleged U.S. violation of the North American Free Trade Agreement ("NAFTA"), under which the U.S. is supposed to permit long-distance trucking.
According to a White House announcement, countries' presidents agreed in concept to establish "a reciprocal, phased-in program built on the highest safety standards that will authorize both Mexican and United States long-haul carriers to engage in cross-border operations under NAFTA."
When a final agreement is reached, possibly this spring, Mexico will suspend its retaliatory tariffs in stages. It will start reducing tariffs by 50 percent at the signing of an agreement and will suspend the remaining 50 percent when the first Mexican carrier is granted operating authority under the program.
A background document on the concept outlines three elements: pre-operations vetting, monitoring of operations and communications to the public and Congress. Neither hazmat carriers nor buses would be permitted.
FMC Lifting Rate-Tariff Publication Requirements for Non-Vessel-Operating Common Carriers
Carmack Limitation of Liability Upheld
A motor carrier's tariff limitation of liability was recently upheld in a cargo loss and damage suit. The plaintiff/claimant sought to avoid the limitation based on the admiralty doctrine of material deviation. Under that doctrine, a plaintiff typically claims that the carrier failed to comply with a contractual promise to provide security services and that its failure to do so should result in the limitation of liability being voided. In the case of Platinum Cargo Logistics, the court refused to adopt the material deviation doctrine, noting that it is an admiralty doctrine that had not been applied in these circumstances by the 9th Circuit. Thus, the carrier was only liable for its limited liability of $245,000, as opposed to the full unlimited value of the shipments at issue, which exceeded $7,000,000.
Rate Filing Requirements for NVOCCs to be Repealed
Port truckers can drive old trucks while waiting
To be consistent with a new California Air Resources Board ruling, the Port of Los Angeles has made another amendment to its tariff to allow certain truck drivers to continue operating their old trucks beyond the Jan. 1, 2010 ban date. The CARB rule, issued last week, will allow truck drivers that have purchased a new truck or retrofit with private funds to use their existing trucks through April 30, 2010.
The Port's announcement will allow the same extension to drivers who are waiting for their new truck to be delivered or for the retrofit to be installed. To qualify for the extension, the truck must be a Level 3 retrofit and also have a 25 percent NOx reduction capability.
The Port of Long Beach made similar changes to its tariff. However, if the retrofit on order does not have this additional NOx reduction capability, it will not meet the San Pedro Bay Ports environmental requirements so the extension will not be allowed in either port.
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