Transportation Operations Group
Juan Carlos Villa Texas Transportation InstituteTexas A & M University System
OPTIONS FOR REDUCING CONGESTION AT THE MEXICAN BORDER
Fifth Annual North American Agrifood Market Integration Consortium Workshop
New Generation of NAFTA Standards
Transportation Operations Group
Agenda
Background
Commercial Vehicle Border Crossing Process
Agricultural Truck Movement Process
Opportunities and Recommendations
Concluding Remarks
Transportation Operations Group
Background Land Trade between U.S. and Mexico has tripled
from $86 billion in 1994 to $262 billion in 2006
Two very different phases
0
50
100
150
200
250
300
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
US
$ B
illio
ns
Mexican Exports U.S. Exports
Source: Bureau of Transportation Statistics, Transborder Surface Freight Data
Transportation Operations Group
Background Mexican exports
of agricultural products -10% AAGR
Seasonality
Tomatoes - largest horticultural export
0
2
4
6
8
10
12
1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
US
$ B
illio
ns
Source: USDA, Foreign Agricultural Trade of the United States Database.
Source: Servicio de Información Agroalimentaria y Pesquera-SAGARPA, Mexico.
Transportation Operations Group
42%
38%
12%4% 2% 2%
NOGALES TEXAS OTAY MESA
CALEXICO SAN LUIS NEW MEXICO
38%
12%5%
45%
Sinaloa Baja California Baja California Sur Other
Background
Source: USDA, Foreign Agricultural Trade of the United States Database.
Source: Servicio de Información Agroalimentaria y Pesquera-SAGARPA, Mexico.
Mexican vegetable exports are primarily done by truck
Concentration – Production– Ports of entry
Transportation Operations Group
Background
Elements for a potential storm
– High growth in US/MX trade
– Infrastructure not keeping pace
– Concentration »Transportation mode»Ports of entry
Transportation Operations Group
Commercial Vehicle Border Crossing Process
ORIGINAL
Movement throughout U.S. and Mexican
border states was to be allowed
U.S. upholds the moratorium on direct long-haul trucking from
Mexico
The panel rules that U.S. could not under the NAFTA impose a blanket ban on the operation of trucks beyond the commercial
zones
Unions, non-profit organizations and trucking associations. challenge legally the lift of the
moratorium because of environmental reasons. Court of Appeals halts operations
Movement throughout the United States was
to be allowed
U.S. Administration vows to comply with the arbitration’s panel
conclusion, and includes 22 safety requirements in the Transportation
Appropriations Act
The Mexican government
contests the U.S. action before an
international arbitration panel
Demonstration
Program
USDOT and Mexico
announce one-year Pilot Program
E
V
E
N
T
SSupreme Court
overturns Court of Appeals decision,
Mexican carriers to apply for operating
authority
1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
PLAN
US/Mexico NAFTA Trucking Provisions
Transportation Operations Group
Mexico CityNuevo Laredo
Laredo, Tx Detroit
Mexican export
Mexico CityNuevo Laredo
Laredo, Tx Detroit
Mexican export
Drayage
U.S. exportCustoms Broker
U.S. exportCustoms Broker
Customs Broker
NAFTA’s plan
Customs Broker
NAFTA’s plan
Commercial Vehicle Border Crossing Process
Culiacan ChicagoNogales Nogales
Transportation Operations Group
Warehouse Warehouse Warehouse
Mexican export
documentation
verification and
cargo inspection
selection
Mexican
export
cargo
inspection
/ Yard
CBP primary
inspection
(document
inspection)
Secondary
inspection
VACIS, X -
Ray, FMCSA
Others
Visual vehicle
safety
inspection
Detailed state
truck safety
inspection
2. U.S. Federal
Compound
Mexico U.S.A.
3. State Safety
Inspection Facility
1. Mexican Export Lot
/ Yard
Mexican export
documentation
verification and
cargo inspection
selection
Mexican
export
cargo
inspection
/ YardCBP primary
inspection
Secondary
inspection
VACIS, X -
Ray, Others
Visual vehicle
safety
inspection
Detailed state
truck safety
inspection
2. U.S. Federal
Compound
Mexico U.S.A.
3. State Safety
Inspection Facility
1. Mexican Export Lot
/ Yard
Commercial Vehicle Border Crossing Process At least 3 potential inspections
Transportation Operations Group
Border Security Programs
Free and Secure Trade
FAST
Segregation of Vehicles based on previously obtained informationC-TPAT
Commercial Vehicle Border Crossing Process
Transportation Operations Group
Agricultural Truck Movement ProcessAgricultural exports have additional steps
Transportation Operations Group
Agricultural Truck Movement ProcessMilitary Roadside Inspections
At least in 3 inspection points before reaching Nogales
Delays could double the transit time
Inspections performed by military personnel – Contamination– Seal breaking
Transportation Operations Group
Agricultural Truck Movement ProcessQuality Inspections
Some products require mandatory quality inspection by USDA officials – Tomatoes– Grapes– Onions– oranges
Transportation Operations Group
Agricultural Truck Movement Process
Cruzadores – Drivers– Require U.S.
issued visas
Truck reload to comply with US truck weight
Driver and Cross Docking
Transportation Operations Group
Opportunities and Recommendations Number of Inspections
– “Stops” delay shipments, increase chances for contamination and hamper security programs
Recommendations– Increase coordination
» U.S.-Mexico» Fed-State» Public-Private
– Coordination Areas» Procedures» Hours of operation» Sharing data
Transportation Operations Group
FAST/C-TPAT Participation – Low participation– Underutilized infrastructure– Increase delays
Recommendation– Modify FAST to accommodate particular requirements of
the agricultural products supply chain– Work with CBP/Aduanas/SAGARPA developing a pilot
project
Opportunities and Recommendations
Transportation Operations Group
Lack of Capacity– Physical Capacity– Human Capacity
Recommendations– Promote development of compliant carriers (truckers)– Sufficient drivers that can cross into the U.S.– Training programs (vehicle safety, security requirements)– Increase throughput modifying hours of operation during
peak seasons, smoothing demand curve – Add FAST traffic lanes at crossings all the way to Mexico
Opportunities and Recommendations
Transportation Operations Group
Inefficient Procedures within Mexico– Military inspections– Security procedures at origin
Recommendations– SENASICA to define non-intrusive
inspection protocols and train inspectors
– Work with CBP to C-TPAT certify producers
– Create a “seal” protocol from origin
Opportunities and Recommendations
Transportation Operations Group
Identify low hanging fruit
Institutional framework already exists
Key stakeholders need to participate
Concluding Remarks
Transportation Operations Group
Gracias
Thank you
Gracias
Thank you
Juan Carlos VillaManager Economics, Trade and
Logistics Program Texas Transportation Institute