Sept. 27 (Bloomberg) -- Regulators determined to let Mexican trucks on U.S. roads under a trade deal have downplayed safety shortcomings with companies in a border-crossing pilot program, according to safety, trucking and labor groups.
Trucking authorities violated their own rules by letting one company keep operating over the border after its safety rating was lowered, and overlooked other carriers’ failures to disclose affiliations with unsafe operators, according to protests filed with the U.S. government by advocates, trade groups and the International Brotherhood of Teamsters union.
“They need these companies, they need the numbers,” said Fred McLuckie, director of federal legislation and regulation for the Teamsters, which unsuccessfully sued to stop regulators from allowing Mexican trucks. “They’re looking the other way.”
President Barack Obama and Mexican President Felipe Calderon signed an agreement in March 2011 to end $2.4 billion in Mexican tariffs on U.S. products, in exchange for opening the border to Mexican trucks meeting American safety and environmental regulations. The tariffs were imposed after the U.S. canceled a previous program to allow Mexican trucks.
U.S. agricultural exports to Mexico fell 26 percent to $5.55 billion in 2009 after the tariffs were imposed on products including wine, pork, apples and onions. They had increased every month in 2008 from the same period a year earlier.
Mexican companies allowed into the U.S. under the latest agreement have been cited for thousands of violations, records show.
One truck belonging to GCC Transporte SA de CV, the company that’s crossed the border most often, was stopped for violations 18 times between August 2012 and August 2013.
It was found to have defective or missing axle parts, brake defects, a cracked frame, inoperative signals, oil and grease leaks, non-working lights, windshield-wiper defects and a tire-tread separation.
Servicio de Transporte Internacional y Local SA de CV, the Mexican company that’s been inspected the most, was cited for 44 violations on a single day -- July 31, 2013. Citations included tire separations and leaks, oil and grease leaks, inoperative signals and a brake-compressor violation.
Its driver-fitness score of 99.2 percent indicates fewer than 1 percent of U.S. carriers have worse records. Almost all of the violations are for drivers who aren’t fluent in English, according to government records.
Mexican drivers must be able to read and speak English well enough to understand U.S. highway signs and signals, respond to official inquiries and fill out regulatory reports, according to an April 13, 2011, Federal Register notice. U.S. truck and bus drivers have similar requirements.
There have been no fatal crashes involving Mexican trucks in the past two years and one involving injuries, according to regulatory data compiled by Bloomberg. Servicio has been involved in three crashes that resulted in vehicles needing to be towed away, records show. The records don’t say who was at fault.
The U.S. Federal Motor Carrier Safety Administration, which regulates truck and bus safety, set up a pilot program to help determine whether Mexican companies met the agreement’s requirements. It estimated in 2011 it would need 46 participants to generate enough inspection data to show the Mexican industry was safe enough to fully open U.S. roadways.
Almost two years into the three-year border-crossing test, which stemmed from the 1994 North American Free Trade Agreement, only 13 companies are participating.
Opponents of Mexican trucks are making “a ridiculous attempt” to impede the pilot program because they don’t want the border opened, said Porter Corn, a veteran U.S. driver who lives in Mexico and publishes the website Mexico Trucker Online.
Mexican companies’ safety scores are lowered by paperwork violations that don’t relate to safety, he said in an interview. All of the companies have a clean record on the most important indicator of all -- crashes, Corn said.
Opponents “want every Mexican company to be held to a perfect standard,” Corn said. “They’re grasping at straws.”
GCC Transporte and Servicio de Transporte Internacional account for almost 80 percent of the border crossings and 82 percent of inspections under the pilot program, according to FMCSA data.
GCC accumulated 1,160 vehicle maintenance violations in a two-year period, according to Advocates for Highway and Auto Safety, a Washington consumer group connected to the insurance industry. Another applicant to the pilot program withdrew when a similar number of violations was disclosed, the group said.
GCC’s vehicle-maintenance record places it in the lower 33 percent of carriers in the U.S. While regulators don’t usually intervene at companies not in the lowest 20 percent, they flagged GCC for added attention because of violations within the past year that were enough to take its trucks out of service, the agency’s website indicates.
GCC is a subsidiary of Grupo Cementos de Chihuahua SAB de CV, a building products company with operations in Mexico, the U.S. and Bolivia. It maintains a U.S. headquarters in Denver.
Enrique Jaurrieta, GCC’s operations manager in Ciudad Juarez, Mexico, who is listed as a company contact on documents filed with FMCSA, didn’t respond to two e-mails seeking comment.
Servicio, also based in Juarez, ranks in the lowest 4 percent of trucking companies for vehicle maintenance, according to regulatory data. In 7,357 inspections, there were 11,700 violations.
It was cited for 1,372 driver-fitness safety violations in the two years ending Aug. 23, according to the trucking regulator’s website.
“Advocates cannot fathom why the FMCSA is not extremely concerned with the ability of STIL to adhere to U.S. safety regulations, and why the agency is not more skeptical regarding STIL’s failure to voluntary disclose its affiliates,” the consumer highway safety group said in its public comments when Servicio’s application to the pilot was pending.
Hector Mendoza, Servicio’s president, didn’t respond to two e-mails seeking comment.
Maria Garcia, who is listed as an agent for both GCC and Servicio in FMCSA records, didn’t respond to two phone calls and an e-mail seeking comment.
Advocates has filed comments with the FMCSA protesting its approvals of seven Mexican companies for the pilot program.
One, Tristan Transfer, is part of a brother-sister combination with another company, Trujillo Transfer. Trujillo uses trucks owned by Transportes Cel, which had the worst record for repairs of any U.S. carrier tracked by the FMCSA, Advocates said in its public comments. None of these ties were disclosed in Tristan Transfer’s application, the group said.
Tristan trucks have operated in the U.S. 18 times, agency records show.
Ruben Martinez Cruz, listed as the company contact on Tristan Transfer’s application, didn’t return a phone call seeking comment. Trujillo Transfer and Transportes Cel didn’t respond to e-mails seeking comment.
Ram Trucking SA de CV of Laredo, Texas, shares a website, a physical address and a manager with Zaro Transportation LLC, a company that has more driver violations than 99.1 percent of the U.S. trucking industry and more maintenance violations than 94.4 percent, according to regulatory data. Ram has crossed the border once during the pilot program.
Jorge Gutierrez, who identified himself as Ram’s safety manager, said in an interview that Zaro set up Ram as a separate company with a new truck and separate drivers. The company has a good track record, he said.
“They are doing all of the compliance,” Gutierrez said. “They don’t want to miss anything with the U.S. DOT.”
Seven of the 13 Mexican companies failed to disclose ties to U.S.-registered companies, and five of those seven have ties to carriers with bad safety records, said Shaun Kildare, research director at Advocates.
The regulator’s application for the pilot program states, in English and Spanish, that companies must disclose any relationship they’ve had with another trucking company, broker or freight forwarder in the last three years.
Applicants undergo a rigorous clearance process, and those selected to participate are monitored to ensure they operate safely, said Marissa Padilla, a FMCSA spokeswoman.
Mexican companies in the pilot are subject to the same regulatory standards used to determine whether affiliated U.S. carriers are legally tied, Padilla said.
“In every case raised, FMCSA thoroughly vetted the ties of the Mexican carrier applying to participate and determined it to be a separate legal entity,” Padilla said. “The agency cannot discriminate against one company based on the record of another.”
The trucking regulator’s second-highest official, Bill Bronrott, said in an Aug. 14 letter to Advocates President Jacqueline Gillan that companies in the pilot program have passed exhaustive safety reviews and are operating safely.
“To date, the safety record of the participating carriers demonstrates that the protocols built into the pilot program are a success,” Bronrott said. “FMCSA is confident that the program is working as designed.”
Bronrott defended the agency’s decision to allow Transportes Monteblanco SA de CV to remain in the pilot program after having its safety rating lowered from “satisfactory” to a temporary “conditional” after an audit. The rating was returned to “satisfactory” 30 days later. Transportes Monteblanco has crossed the U.S. border 192 times, according to regulatory data.
The agency provides all carriers the opportunity to improve their safety ratings by correcting deficiencies, he said in the Aug. 14 letter.
Transportes Monteblanco was audited, made changes and is now rated “satisfactory,” Juan Carlos Fuentes, a company manager, said in an e-mail.
“We made the corrective actions for the items identified on the period requested for any transport company,” Fuentes said.
The performance of an affiliated carrier, by itself, is not generally grounds to deny a Mexican company’s application, Bronrott said in his letter.
Opponents say that counters the agency’s position behind its crackdown in the U.S. on “reincarnated” carriers.
Mexican carriers can’t be allowed to use the pilot program “as an opportunity to reincarnate,” said Todd Spencer, executive vice president of the Owner-Operator Independent Drivers Association, based in Grain Valley, Missouri, which joined the protests and lawsuit.
“It not only goes against Congress’s intent for the pilot program, but is opposite to the very foundation of our highway safety laws,” Spencer said.
The owner-operators and Teamsters lost legal challenges to the program in April. The U.S. Court of Appeals in Washington ruled Congress decided Mexican truckers with valid commercial licenses were qualified to drive on U.S. roads, the court ruled.
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