Mexican truckers allowed U.S. trips
Washington DC — The U.S.-Mexico trucking dispute, the oldest sore point in NAFTA, apparently came to an end recently when the U.S. Department of Transportation said Mexican truckers are now welcome to apply for long-haul trips in the United States.
U.S truckers fought hard to stop this aspect of free trade with Mexico, both in the courts and in Congress. Other opponents focused on perceived safety hazards and pollution. But the risk to some U.S. jobs seemed the point that caused the most concern in Congress.
President Barack Obama and Mexican President Enrique Pena Nieto met at the White House, where both leaders referred vaguely to improving cross-border commerce. U.S. officials said Friday's announcement should bring an end to $2 billion in trade tariffs that were imposed by Mexico because of the trucking dispute.
The tariffs started in 2009 after Congress halted funding for a pilot program allowing a limited number of Mexican trucks to enter the country. A new pilot program was announced in 2011, which led Mexico to suspend, but not eliminate, the tariffs. The pilot ended in October.
"Opening the door to a safe cross-border trucking system with Mexico is a major step forward in strengthening our relationship with the nation's third-largest trading partner, and in meeting our obligations under NAFTA," said Transportation Secretary Anthony Foxx.
"Data from the three-year pilot program, and additional analysis on almost 1,000 other Mexican long-haul trucking companies that transport goods into the United States, proved that Mexican carriers demonstrate a level of safety at least as high as their American and Canadian counterparts," Foxx said.
Calling the pilot program a failure, Teamsters President Jim Hoffa said he is "outraged" by the move.
"Allowing untested, Mexican trucks to travel our highways is a mistake of the highest order, and it's the driving public that will be put at risk by the DOT's rash decision," he said.
Because Mexican truck drivers were barred from U.S. highways, goods imported from Mexico are transferred at the border to U.S. trucks. A whole industry of trailer transfer stations and short-haul trucking rose up in cities like McAllen and Laredo to handle the restrictions.
Under the agreed terms of Friday's announcement, companies from Mexico that apply for long-haul service in the United States will be required to pass a safety audit, including systems for monitoring hours of service and to conduct drug testing. All drivers must possess a valid U.S. commercial driver's license or a Mexican licencia federal de conductor. They also must meet English language proficiency requirements.
Chinese Truckers Forced to Pick Between Profits and Law
The suicide of a truck-driving couple in Minquan County, Shangqiu, Henan province is drawing attention to the dark side of China's booming logistics industry...
The suicide of a truck-driving couple in Minquan County, Shangqiu, Henan province is drawing attention to the dark side of China's booming logistics industry.
Chinese Truckers Forced to Pick Between Profits and Law
After being driven to despair by a 30,000 yuan fine for exceeding the highway's weight limit, Zhang Gaoxing and his wife Hou Yan attempted drank pesticide on November 24. Hou survived the suicide attempt but remains in a coma.
Their attempt is similar to that of Liu Wenli, a female trucker in Yongcheng, Henan province who tried to kill herself last November after receiving simultaneous fines from the local transportation administration and the Department of Highway Management. In only a year, Liu was written 200,000 yuan in tickets.
While it's hard to sympathize with irresponsible drivers, the government and law enforcement are not without blame. The Ministry of Communications released regulations related to curb overloaded vehicles in 2000, but 14 years later they remain purposefully ignored.
Built to Break the Law
China's logistics industry not only encourages truckers to break the law: it requires it. At the National Party Congress of 2011, delegate Huang Xihua submitted a bill based on his research into the cost of freight transport. According to the bill, a lawfully loaded cargo truck carrying 16 tons from Datong, Shanxi province to Tianjin without breaking the law will not only fail to earn money – it will lose more than 3,200 yuan.
Zhang Gaoxing normally carried freights between Yongcheng and Xinmi, Henan province. The fixed route cost 3,800 yuan to complete when considering fuel expenses, driver salary and road costs. By the local rate, a 47-ton cargo load is worth only 4,700 yuan leaving Zhang with a profit of 900 yuan.
"No one can earn anything in this industry without massive overloading. Even carrying one extra ton only earns you another 50 yuan," said a friend of Zhang.
To understand the problem, one has to approach it from the industry's perspective. Logistics is the fastest growing business in China: last year, it generated 19.78 billion yuan with an annual growth rate of 11.5 percent, China Youth Daily reported.
China has one of the most expensive supply chains in the world. Statistics from the 2014 China Procurement Development Report found that in 2013, the total logistics costs were about equal to 18 percent of the national GDP – twice as much as in most developed countries.
But even with that development, logistics costs account for 30 to 40 percent of the final cost of any product.
"With rising costs, toll charges and tickets from highway departments and traffic police, truckers barely have any room to earn money," said Wang Chuantao, a known commentator.
Of the three, road tolls have accounted for more than a third of all logistical costs every year since 2011, said the China Federation of Logistics and Purchasing.
It's not hard to understand why the truckers feel so abused. "We have no choice in the matter. The freights are overweight before we even pick them up! If I refuse to take it, someone else will," said a trucker who refused to be named.
In some cases, consignors and consignees lure more honest truckers into carrying overweight freights by claiming they will roll any fines into the shipping cost, Huashang Daily reported.
Government to Blame
In 2013, Tencent conducted a poll to ask its Web readers who should bear the blame for overloaded trucks: 95 percent of the respondents said the government.
As the nexus of the country, Henan province has been eager to fill its coffers by bleeding the logistics industry for anything it can. With the money to be made on fines, the province's law enforcement has no incentive to discourage companies from dumping their overweight freights on truckers.
Feng Qingyang, an online commentator, said regional differences play some role in the issue. "Arbitrary fines and tickets are the domain of China's less-developed central and western reasons where everyone still rushes to find a job with a government. This leads to overstaffed institutions that need to be subsidized with public money, and the easiest money comes from fines," Feng said.
There are more than 6,500 government employees in the transportation bureau of Liangyuan district in Shangqiu, Henan province alone.
"The administrators are swimming in fines. Penalizing drivers is their primary source of income," said Zhang Xiaodong, a professor of communications and transportation at Beijing Jiaotong University.
In 2011, Xuchang.net said that the local government was purposely encouraging truckers to carry heavy loads so it could prop up its budget with the fines.
It's little surprise that Henan province has become the center of trucker suicides.
The province's bureaucratic nightmare only makes it harder to find someone to blame. While law enforcement agents have authority over public safety in cases over overloading, highway authorities can also take over. But the highway itself is regulated by both the highway administration, which enforces the laws, and the transportation administration, which makes the laws.
Wang Jinwu, a civil rights activist, said it is this jumbled overlap that puts so much pressure on truckers.
"The current legal system gives five departments including traffic police departments, road administrators, highway transportation departments, toll stations and even Chengguan the right to regulate weight while specifying no standard penalty or punishment," he said.
"While toll stations charge fines according to the carrying weights of different trucks, the other four have different standards."
"For example, Chengguan have the right to write tickets according to the City Management Regulations. No matter whether you drive overloaded or not, you receive a ticket from the Chengguan as long as your truck exceeds the weight limit of a certain district. Fines are capped 16,000 yuan," Wang said.
The vicious market competition eating into the other side of truckers' profits is the result of other neglected regulation.
"The administrative loopholes lure truckers to overload their vehicles, which depresses market prices and crushes the trucking industry in other regions," Wang said.
In a recent report on China Road and Transport Online, many truckers blamed the government's carrying capacity standards for their misfortune.
"Many trucks, while built to carry 10 tons, are regulated as 5-ton vehicles by administrators. Some trucks are made and licensed even though they exceed the standard road safety length and width," the report said.
In 2011, the State Council released its Road Safety Protection Ordinance, which specifies that a driver caught driving overloaded more than three times will be barred from the business. If the ordinance were executed, it would be a strong incentive to keep overloaded trucks off the road.
"But right now, the government has no interest in putting the law into practice. The leaders aren't willing to bear the consequences of its execution, a slowdown in the logistics industry could ripple and drag down the entire Chinese economy," Zhang Xiaodong said.
Until then, China's truckers will continue to feel the squeeze.