OOIDA's Spencer cautions Trade Commission about Mexican border

| 7/21/2006

“The net effect of admission of Mexican trucks into the U.S. marketplace would undoubtedly be negative.”

That’s the message OOIDA Executive Vice President Todd Spencer delivered in testimony he submitted to the U.S. International Trade Commission July 13.

The ITC is an independent, nonpartisan, quasi-judicial federal agency that provides trade expertise to both the legislative and executive branches of government.

In his written testimony, Spencer ran down the list of numerous concerns of Owner-Operator Independent Drivers Association members. The concerns include the negative impact on driver pay, highway safety and lack of enforcement of existing regulations.

Right now, there are four different regulations governing the trucking industry that, if enforced fully, restrict trucks and drivers from Mexico and Canada to carrying international shipments to or from those countries to an individual point in the U.S.

Those regulations prevent foreign trucks and drivers from moving loads from point to point in the U.S.

But, Spencer pointed out to the members of the ITC, if those regulations and immigration rules are not enforced, the competition from foreign trucks and drivers would overwhelm the U.S. trucking industry.

The main reason that will happen is simply because Mexican drivers will be paid much less than U.S. drivers, Spencer testified. He cited a couple of studies that estimate the pay of Mexican truckers only 25 to 50 percent of the amount that U.S. drivers receive.

The prospect of having access to drivers who would accept lower pay will be an enticement to brokers and motor carriers to hire and utilize Mexican truckers rather than U.S. truckers.

Spencer said that even if only a minimal number of companies cash in on the cheap labor that drivers will see pay reduced and motor carriers will see revenue decrease. He said this would be a result of competitors in the industry using the cheap Mexican labor pool and charging cheaper rates to shippers.

And to further complicate the entire driver pay problem, Spencer informed the International Trade Commission members on the current “driver shortage” in the industry.

“U.S. motor carriers maintain that there is currently a shortage of skilled truck drivers in the United States,” Spencer wrote in his testimony. “The principal reason for this shortage is the difficult working conditions and the low driver pay.

“Allowing Mexican trucks and drivers into the United States will only worsen the problem of low pay and the ability of the U.S. industry to keep and attract qualified drivers.”

If Mexican trucks and drivers are allowed to operate in the U.S. in spite of the pay and competitive concerns, Spencer urged committee members to understand there would be an enormous impact on highway safety.

If U.S.-based trucking companies have less revenue because of the Mexican competition they will have less money for maintaining fleets. That would ultimately show up as a decrease in the quality of fleets.

He also pointed out the Mexican government’s resistance to proper regulatory oversight of the Mexican motor-carrier industry.

Aside from the equipment, Spencer highlighted the differences in requirements for U.S. drivers and Mexican drivers.

“U.S. drivers are required to pass regular medical tests in order to maintain their commercial drivers licenses,” he wrote. “There is no similar requirement imposed on Mexican drivers who drive in the U.S.”

Spencer concluded his arguments by highlighting the general negative impact on the economy that opening the border could have.

“The displacement of U.S. drivers would put pressure on wages in other semi-skilled occupations in the United States. The loss of income by truckers would effect the state and local tax bases and would likely place additional burden on social services that states and localities provide,” he concluded.

– By Jami Jones, senior editor