juan carlos villa texas transportation institute texas a & m university system

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


Agenda

Background

Commercial Vehicle Border Crossing Process

Agricultural Truck Movement Process

Opportunities and Recommendations

Concluding Remarks


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


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.


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


Background

Elements for a potential storm

– High growth in US/MX trade

– Infrastructure not keeping pace

– Concentration »Transportation mode»Ports of entry



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


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


Culiacan ChicagoNogales Nogales


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


Border Security Programs

Free and Secure Trade

FAST

Segregation of Vehicles based on previously obtained informationC-TPAT



Agricultural Truck Movement ProcessAgricultural exports have additional steps


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


Agricultural Truck Movement ProcessQuality Inspections

Some products require mandatory quality inspection by USDA officials – Tomatoes– Grapes– Onions– oranges


Agricultural Truck Movement Process

Cruzadores – Drivers– Require U.S.

issued visas

Truck reload to comply with US truck weight

Driver and Cross Docking


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


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



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



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



Identify low hanging fruit

Institutional framework already exists

Key stakeholders need to participate

Concluding Remarks


Gracias

Thank you

Gracias

Thank you

Juan Carlos VillaManager Economics, Trade and

Logistics Program Texas Transportation Institute

[email protected]

juan carlos villa texas transportation institute texas a & m university system

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