Will infringements by Mexican trucks complicate NAFTA plans?
Mexican trucks have been jumping the NAFTA gun, traveling deep into the U.S. in violation of a law that limits them to specified corridors within 20 miles of the border, according to the DOT's Inspector General.
Under NAFTA, borders were to have been opened with few conditions in 1995, but these plans have been held in abeyance as concerns about the safety of Mexican trucks and the competency of their drivers have grown into a contentious political issue.
The revelation in July that Mexican trucks have violated U.S. law has re-ignited the argument against NAFTA, and lawmakers from both sides of the aisle have voiced their belief that the borders should remain closed until Mexican trucks and drivers are on par with those in the U.S.
The Inspector General, in response to a congressional query in February, compared DOT identification numbers (required of all commercial trucks traveling in the United States) gathered from roadside inspection stations with a list of those numbers registered to Mexican fleets. The results showed that roadside inspections were performed on vehicles from Mexico beyond the boundaries of the so-called 'commercial zone.'
Inspections were performed on 68 motor carriers at least 100 times in 24 states not on the U. S.-Mexico border, including New York, Florida, Washington, Montana, North Dakota, Colorado, Iowa, South Dakota, and Wyoming. Inspections were also performed within the border states of Texas, Arizona, California, and New Mexico, but outside the commercial zones.
Inspector General Kenneth Mead told the Senate Subcommittee on Transportation, Committee on Appropriations: "...you asked if Mexican trucks drive beyond the commercial zone boundaries of the four border states. The answer is 'yes,' even though Mexican trucks are not authorized to go beyond the commercial zones."
What makes this issue so explosive is the allegation that Mexican trucks are not as safe as trucks from U.S. fleets. A bipartisan coalition led by Rep. Jack Quinn (R-NY) and Rep. James L. Oberstar (D-MN) has asked Mead to further research the matter and find out if this is indeed the case. Mead's office is currently boring into the data to see how many of these inspected vehicles were cited for safety shortcomings.
Until then, the coalition of 253 lawmakers has asked the administration to delay NAFTA implementation. "Extending access for Mexican trucks on U.S. roads in the near future would result in serious consequences for the traveling public and for businesses that depend on our roads to transport their goods," said Oberstar.
If past performance is any indicator, Mead's findings may bolster the coalition's case for continued border closure. At a Senate hearing in February, Mead told Congress that only California did a good job of inspecting Mexican trucks. "Because safety inspections have a deterrent effect, the out-of-service rate for trucks entering California from Mexico is 28%. By comparison, in states where inspections are less frequent or less stringent, the out-of-service rates are much higher: 37% in New Mexico, 42% in Arizona, and 50% in Texas. "This compares unfavorably to the 26% out-of-service rate for U.S. trucks, which Mead and others agree is still too high. Canadian trucks failed U.S. inspections 17% of the time.
U.S. fleets are hesitant to discuss the issue publicly for fear of embarrassing their Mexican partners or endangering current arrangements. One U.S. fleet official said flatly: "This is a sensitive issue for us. We're not willing to comment at all."
A spokesman for Roadway Express was equally diplomatic. "We support open trade; we support NAFTA. We abide by the rules and regulations, and we expect all other carriers to do the same. Beyond that, I can't comment on the Inspector General's report."
The coalition of lawmakers have vowed to keep the border closed past the scheduled January 1, 2000 opening until they're satisfied that Mexican trucks and drivers are measured against the same yardstick as U.S. and Canadian fleets - both in safety and compliance with regulations. When the border is opened, truck travel in North America will be unrestricted.
Privately, legislators are saying that if a Mexican truck is involved in a high-profile crash between now and January 1, they will have little trouble convincing the administration that their current stance is justified.
Logistics costs could drop with more productive equipment
The goal of having U.S. logistics costs come down to 10% of the nation's gross domestic product (GDP) is unlikely to be achieved, according to Robert Delaney, senior-vp of St. Louis-based Cass Information Systems.
Speaking at the National Press Club in June, Delaney noted that logistics costs as a percentage of GDP have been stalled at around 10.6% since the early 1990s. Although he had hoped it would break below the 10% mark, he's been disappointed by the lack of progress.
"Our logistics costs were reduced from 16.5% to 11.6% of nominal GDP between 1981 and 1990. After taking account of interest rates, we find that logistics costs have been on a plateau of 10.6% of nominal GDP since 1991. The landing was so soft, we didn't even feel it," said Delaney.
Reiterating ten proposals that he brought forth last year, Delaney's suggestions for improving productivity included the following:
*Continue to exploit the cost and service opportunities provided by third-party logistics services. "In general, service users are experiencing reductions of 10% in their integrated logistics costs by using third-party logistics service providers," said Delaney.
*Support programs that will reduce the driver shortage. Delaney noted that shippers are willing to accept rate increases that are applied to driver wages, believing that higher wages may help relieve the driver shortage. He also mentioned that the National Industrial Transportation League has established a working group to investigate practices that will attract and maintain drivers. "They are trying to fix the problem of excessive driver waiting, loading, and unloading times."
He added: "We cannot overstate the importance of an efficient trucking industry to our business logistics system ... It's in everyone's interest to improve productivity. It all begins with the driver."
*Obtain the cost reductions that are available by operating longer, heavier vehicles. Delaney touted the efficiency of the proposed Argosy Safety Concept Vehicle calling it the "gold standard for highway vehicle safety." He also cited a National Research Council report noting that tractor-trailer productivity can be improved by 21% with six axles on the ground and by 48% with seven axles. The Argosy vehicle can carry a 90,000-lb. payload over six axles.
Delaney called on congressional lawmakers to adopt higher gross vehicle weights and noted that HR 1667, introduced by Collin Peterson (D-Minn.) and Merrill Cook (R-Utah), would allow states to authorize GVWs of 97,000 lb. on six axles. "We support HR 1667. The productivity it proposes is long overdue."
Attempting to capitalize on the growth in transcontinental traffic, Con-Way Transportation Services, a national network of regional trucking companies, has announced three-day, coast-to-coast service for businesses moving from western New York and Pennsylvania into California.
Transit Group has purchased Fox Midwest Transport and its affiliate, Shippers Distribution Services, both of Green Bay, Wis. Fox is a regional, medium-haul TL carrier.
A federal government study has concluded that enhancing the visibility of freight train cars with reflective material similar to that required for commercial vehicles could help prevent collisions involving highway vehicles. Before developing rules, however, the Federal Railroad Administration wants to study the issue further. In 1998 there were 754 collisions in which highway users struck rail equipment; 49% of these occurred during dawn, dusk, or nighttime.
The PTDI Certification Commission recently certified courses at three truck driver training schooling: Professional Truck Driver Program, Federick, Md.; Northwest Career Training Center, Spokane, Wash.; and Transport Training Group, White Pine, Tenn. Under the recently revised certification standards, 43 schools across the U.S. and Canada now offer certified courses and are turning out highly trained graduates.
Tough talk on safety Transportation Secretary Rodney Slater continues to talk tough when it comes to highway safety. "We will issue new rules to shut down unfit carriers," he told leaders of the American Trucking Assns. "In appropriate cases, we have significantly increased fines for safety violations and limited negotiated settlements. We have also doubled the number of compliance reviews each month."
Praising the truck safety initiatives already under way, Slater said, "It's time for all of us to do more. Last year, the deaths resulting from crashes involving commercial motor vehicles dropped by almost 100, which is great news because almost 100 lives were saved. But that still means that more than 5,300 people were killed in truck and bus crashes last year. That number is unacceptable."
Slater wants to cut commercial motor vehicle-related deaths by half over the next 10 years. "If we can't get the safety message through to them, we have to get them off the road," he said. To reach that goal, Slater suggested the following:
*Recorder technologies to control speeding
*Requirements that new carriers demonstrate knowledge of existing safety regulations
*Stiffer requirements for CDL applicants regarding traffic and drug-and-alcohol-related violations
*Looking at how pay affects decisions to drive too many hours or compromise on safety
The federal government is calling for new fees for carriers that choose to self-insure their bodily-injury and property-damage claims. The proposal does not apply to carriers that self-insure for cargo damage only. Carriers would be required to be able to pay twice the amount of their annual self-insured claims. The feds are also proposing an annual monitoring fee of $2,600.
One of the goodies tucked into Ways and Means Chairman Bill Archer's massive tax-cut bill is a provision increasing the meal deduction from 50% to 80%, the pre-1994 level. Under present law, the deduction has begun a slow climb back to 80% for workers covered by hours-of-service regulations. Archer would raise the deduction for all other workers in 5% increments starting in 2005, finally reaching 80% in 2010. The provision is a long way from becoming law, however.
*John P. Kinsella has been named president of Thermo King.
*Jon Wyman becomes vp-sales for Sterling Truck.
*Tenneco Automotive has promoted Joseph Pomaranski vp-sales for the company's North American aftermarket business unit.
*Doug Stotlar has been promoted exec. vp-operations for Con-Way Transportation Services.
*Christopher M. Bates has been named exec. vp of the Motor & Equipment Manufacturers Assn.
*East Manufacturing named David J. Tate president and chief operating officer; Ted Hutchison, director of aftermarket sales and operations; and Charles D. Wells, director of dealer development and dump trailers.
*Mack Trucks has named Gordon Hellowell managing director and CEO of Mack Trucks Australia.
*Ken Matlock becomes national chairman of the National Tank Truck Carriers Safety Council.
*Bering Truck has promoted David C. Dare to the position of national service manager and Paul Bien to eastern regional manager.
*Barry L. Shellenhamer is appointed vp-product and program development for East Penn Manufacturing.
*Menlo Logistics has appointed Gert Askes general manager of its European operations.
*Ron Bredemeyer, former vp of the Merchants group of transportation companies, has opened Bredemeyer & Associates, a consulting firm based in Abilene, Tex. Consulting services such as real estate acquisition, property development, environmental compliance and disposal of properties commonly used for trucking operations will be provided to companies operating trucks, trailers, forklifts and auto fleets .
*Penske Truck Leasing has named Paul Prang managing director for European operations.
Charles Holden, Alma, Ark., qualifies as a Highway Angel for his quick thinking while driving on I-80 in Wyoming. Holden steered his rig into the left lane to let a Honda enter the highway. At the same time, he noticed a car traveling at about 100 mph. When the speeding vehicle hit the Honda and sent it into his lane, Holden went full throttle to avoid the out-of-control car. His actions probably saved both drivers' lives.
Another Highway Angel is Chad Walworth, Springfield, Mo., who helped a mother and child stranded on I-24 in Kentucky after their rental van caught fire.
Two of the country's top aftermarket parts distributors are planning to merge. Deerfield, Ill.-based HDA Parts System Inc. (HDAPS) and Quality Distribution Service Partners Inc. (QDSP) of Itasca, Ill., have signed a letter of intent to form what they say will be the largest independent parts distributor in the heavy-duty aftermarket. The new firm will be named FleetPride.
John Greisch, president & CEO of HDAPS, will become president, CEO, and a director of FleetPride when the merger is completed. "With the merger, we are able to accelerate our mission to create the first nationally integrated distributor in the heavy-duty aftermarket," he said.
Bill Wade, president & CEO of QDSP, will serve as chairman and a director of FleetPride until January 1st, when Greisch will assume the chairman's position. Wade will then continue as a FleetPride director.
The 1999-2000 edition of The Private Fleet Directory, published by Transportation Technical Services (TTS), provides profiles of the transportation arms of over 24,000 companies.
Information such as fleet type, location, number of vehicles, equipment breakdown by GVW class, and name and number of fleet manager, has been compiled for all fleets in the directory. E-mail and Web site addresses, as well as SIC codes are also included.
The entire directory is available for $295; individual state editions can also be purchased. A complete or customized database (by fleet size, GVW, or geographic location, for example) is available on CD-ROM or disk.
For more information, contact TTS in Fredericksburg, Va. - 888-ONLY-TTS or www. ttstrucks.com.