Customs Update: New Nafta trucking rules
5/01
(Published in the Journal of Commerce on 5/24/01)

On May 3, after the Bush Administration's agreed to implement Nafta's trucking provisions, the Federal Motor Carrier Safety Administration (FMCSA), a division of the U.S. Dept. of Transportation (DOT), published regulations laying out the new environment in which all Mexican trucks will operate in the U.S., making them subject to the same safety regulations as U.S. operators.

The new rules will help determine the readiness of Mexican truckers to meet the U.S. requirements. The announcement included proposed new rules which implement safety oversight programs while allowing Mexican applicants to operate either in the border area (as was allowed pre-Nafta) or beyond.

Mexican truckers wishing to operate throughout the U.S. will use the new Form OP1 to register. The purpose of this new form (and the Form OP2 for those truckers continuing to limit their operations to the border area) is to provide FMCSA and DOT with information about the applicant's operations, domicile, Mexican registration, and the system currently in place by which driver qualification, hours of service, drug and alcohol testing, vehicle safety and conditions, accident monitoring and hazardous materials transportation are documented.

Arbitration of disputes is required for household goods applicants so their willingness to offer it as the means to settle claims and losses must be affirmed. Compliance with U.S. Dept. of Labor and other regulations must also be affirmed through these new forms.

The proposed regulations list the forms which must accompany the OP1, such as proof of payment of federal highway taxes. There is also a $300 filing fee. Even those few Mexican truckers currently authorized to transport goods beyond the border region will be required to file the new application form and pay the filing fee, but have a year to do so. They remain subject to a safety audit within 18 months of approval. Those truckers continuing to operate within the border zone must also file the new Form OP2 and comply with its requirements, including proof of financial responsibility.

Part of the new procedure is a Safety Monitoring System and Compliance Initiative. It includes training workshops by FMCSA that provide written materials to aid Mexican operators in becoming conversant with the applicable U.S. laws and regulations. One result of the intensified roadside inspections will be to generate data identifying those carriers with serious safety problems warranting immediate attention and then to focus on those problem carriers, if any.

Mexican truckers will be required to comply with the Federal Motor Carrier Safety Regulations, Motor Vehicle Safety Standards and Hazardous Materials Regulations. Within 18 months, the operations of every Mexican trucker will be audited for the purpose of determining a carrier's compliance with the relevant safety standards. The audits may be conducted either at the trucker's business facility (in Mexico) or at designated locations, e.g., U.S.side border area sites. Mexican truckers can also expect roadside inspections at which they will be required to provide any records needed to adequately evaluate safety compliance. Failure to comply with reasonable requests for safety documentation can lead to revocation of any certificate to operate in the U.S. (called the
Certificate of Registration).

All Mexican truckers currently authorized to transport cargo in the U.S. will retain their certification until the safety audit is completed, presuming they file the new forms. Continuance of certification is tied to the results of the audit. If the audit is not completed within 18 months (a likely result given limited staffing and the number of companies to audit), operations will be allowed to continue until a safety audit is completed. If a carrier is suspended because of failing an audit, the trucker will be given an opportunity to cure any deficiencies, and failing that will have its certification revoked.

The safety audits will also identity truckers conducting unsafe operations or whose systems lack basic management controls to ensure protection of public safety. Records subject to review include driver medical qualifications, driver hours of service, drug and alcohol testing and vehicle inspection, maintenance and repair records.

If Mexican operators are found to have committed certain violations, expedited action will result. If operators employ drivers who do not possess or operate without a valid Mexican or U.S. commercial driver's license and/or test positive for or refuse to submit to requested alcohol or drug testing; operate vehicles taken out of service for violations of the Commercial Vehicle Safety Alliance North American Standard Out-of-Service Criteria without making required repairs; fail to carry appropriate insurance; or have an out-of-service rate of 50% or more based upon three (3) inspections within a consecutive 90 day period, those operators will be subject to an expedited safety review or could be issued a deficiency letter identifying the violations and directing an immediate response to FMSCA demonstrating corrective action. Failure to respond could lead to suspension of certification. If a response remains outstanding, revocation of certification follows.

Given the tremendous volume of trucks crossing north into the U.S., there is understandable concern regarding safety and so the obvious question is, how many Mexican trucks can realistically be inspected? The FMCSA clearly hopes that the proposed system will satisfactorily answer that question.

Another key issue is the apparent lack of inspectors and inspection facilities in the border states. As part of its implementation plan, the Bush Administration announced approximately $88 million in additional federal funds to aid the four states bordering Mexico in their efforts. California announced its readiness in 1994, having built two multimillion dollar facilities, one within a half mile of the Otay Mesa crossing south of San Diego, and the other near the new border crossing station in Calexico. But given its immense volume of Mexican trade, it was surprising to learn that Texas is not ready to handle the increased inspections. A bill, which would have required the state to build eight inspection facilities, has since died, but debate over where to locate the facilities continues.  Texas has yet to make any decisions, and New Mexico and Arizona are equally lagging in their preparations.

Also weighing in was New Mexico's senior senator, Pete Domenici, on May 15 introduced a bill the Southwest Border Port of Entry Infrastructure Improvement Act authorizing expenditures of at least $585 million over the next five years to greatly improve ports of entry on the Southwest border. The bill is cosponsored by Sen. Kay Bailey Hutchison of Texas.

While the negotiations between the U.S. and Mexico continue, publicly Mexico has said it wants immediate implementation while the U.S. has counseled a phased-in approach. The safety issue has lit fires anew with the release by DOT of 2000 service figures that showed U.S. trucks were removed from service 25% of the time, with that figure having risen to 36% for Mexican trucks.

Keep in mind that many trucks operating at the border are often short haul or shuttle vehicles which neither side would use for access outside the border zone, i.e., for longer hauls. Nonetheless, such high out-of-service rates are intolerable, whether by U.S. or Mexican owned trucks.