U.S. Border Now Open To Mexican Trucking……And Becomes Another Low-paying Job

Posted: January 11, 2015 in Econ 101, Free Trade

SOURCE: http://www.truckinginfo.com/news/story/2015/01/mexican-carriers-can-apply-for-cross-border-operating-authority.aspx

SOURCE: http://www.washingtonpost.com/blogs/wonkblog/wp/2014/04/28/trucking-used-to-be-a-ticket-to-the-middle-class-now-its-just-another-low-wage-job/

SEE ALSO:  Canada, Communism and Free Trade Work Against Consumers Knowing Where Thier Meat Comes From


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U.S. to Open Border to Mexican Carriers

January 9, 2015

By Oliver Patton

Mexican fleets like this one can now apply for U.S. operating authority under NAFTA. Photo by Evan Lockridge
Mexican fleets like this one can now apply for U.S. operating authority under NAFTA. Photo by Evan Lockridge

UPDATED — The United States will start accepting applications from Mexican carriers to provide long-haul cargo delivery across the border. The Department of Transportation announced the move Friday. Official notice is likely to be published in the Federal Register next week.

The announcement marks a significant and long-delayed milestone in implementation of the North American Free Trade Agreement. It follows the Federal Motor Carrier Safety Administration’s final report to Congress on the three-year border pilot program set up to test the agency’s cross-border safety regime.

The agency found that Mexican carriers can operate safely.

“FMCSA concludes that the Pilot Program successfully demonstrated that Mexican motor carriers can and do operate throughout the United States at a safety level equivalent to U.S and Canada- domiciled motor carriers and consistent with the high safety standards that FMCSA imposes on all motor carriers authorized to operate in the United States,” the agency said.

The Mexican carriers in the program had much lower driver and vehicle out-of-service rates than U.S. or Canadian carriers.

Their driver OOS rate was 0.2% compared to 5.3% for U.S. carriers and 3.7% for Canadian carriers. Their vehicle OOS rate was 8.9% compared to 22% for U.S. carriers and 12.5% for Canadian carriers.

The agency ended the pilot last October and granted either normal or provisional operating authority to the 13 Mexican carriers that participated in the program.

The agency said that Mexican carriers applying for long-haul authority will have to clear a Pre-Authorization Safety Audit and confirm that they have safety management systems in place. These systems must include hours-of-service monitoring and drug testing.

Mexican drivers must have either a U.S. commercial license or the Mexican equivalent and be proficient in English. Once a carrier is approved to operate across the border, its trucks must clear a North American Standard Level I inspection every 90 days for four years.

14-Year NAFTA Delay

The decision to accept Mexican applications closes a chapter in the 14-year U.S. effort to comply with terms of the North American Free Trade Agreement.

Under the agreement, the border should have been opened to long-distance trucking in both directions in 2000. The opening was stalled until 2007 by difficult negotiations with Mexico and opposition from U.S. labor unions and owner-operators who oppose free trade, fear the loss of jobs and argued that Mexican trucking is not safe.

In 2007 the Bush administration started a demonstration program to test a safety regime set up by FMCSA. When Congress killed this program in 2010 Mexico retaliated with $2 billion in import tariffs on agricultural and industrial products.

In 2011 the Obama administration negotiated a deal in which Mexico agreed to drop the tariffs while the U.S. put in place a revised program to vet Mexican carriers for safety. This is the three-year program that ended last 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 in a statement.

U.S. Trade Representative Michael Froman said the announcement sets the stage for Mexico to withdraw the threat of tariffs.

“We have been, and will continue to work with Mexico to ensure that the threat of retaliatory duties will now be brought to a swift conclusion,” he said in a statement.

But reaction from labor and owner-operators indicates that the issue is not closed.

When the agency granted authority to the Mexican pilot carriers in October, the Teamsters and the Owner-Operator Independent Drivers Association registered strong objections.

OOIDA Executive Director Todd Spencer indicated that court action against the border opening is an option, and that the group would seek support from members of Congress who oppose the opening.

Opponents of the opening are focusing on an audit of the pilot program by the DOT Inspector General.

The Inspector General confirmed that proper safety controls are in place but added that the program had too few participants to project the outcome of a full border opening.

This shortage of participants is evidence that the pilot program failed, said Teamsters General President Jim Hoffa.

“(The pilot program) did not provide enough data for the (Inspector General) to determine with any confidence that the trucks participating in the program were representative of those that could be permitted in the future,” Hoffa said in a statement.

The agency, on the other hand, says it in fact had plenty of data.

Because the Inspector General’s analysis was restricted to data collected on the program’s carriers, the agency said it also studied safety and inspection data for other long-haul Mexican carriers.

This analysis looked at an additional 952 international carriers that are either Mexican-owned or based in Mexico. Of these, 351 received authority during the three-year program, the agency said.

The agency told Congress that while the Inspector General could not determine if the program participants were representative of Mexican carriers that might apply for long-haul authority, Mexican officials indicated that the program will set the pattern for Mexican carriers’ response.

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Trucking used to be a ticket to the middle class. Now it’s just another low-wage job.
April 28, 2014
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ELIZABETH, N.J. — It’s a few minutes into a run carrying a load of scrap copper from the Port of New Jersey to a waste transfer station outside Philadelphia, and Miguel Tigre reaches over the dash of his maroon-and-yellow cab to grab a folder stuffed with the receipts squeezing him dry. He reels off calculations: He gets paid $400. It’s about 150 miles round-trip, and his truck gets 5.2 miles per gallon, so that’s $180 in fuel. Tolls are $20. Taxes take about a quarter off the top — but then there’s insurance for the truck, and any repairs, which came to $22,000 last year.

All told, that amounts to $32,000 in take-home pay per year, which is barely enough to cover rent and food for him and his wife, who doesn’t work. Then there’s child support and car insurance. Tigre, a stocky 56-year-old with the paunch that comes from sitting for 12 hours a day, says he can’t afford health insurance — he’s diabetic, and pays $100 a pop out of pocket for regular doctor’s visits, plus $300 a month for insulin. And retirement? Tigre laughs, harshly.

“The way things are going, I’m going to die before that,” he says.

It’s the skewed economics of Tigre’s trade that prompted port truckers to go on strike in Los Angeles on Monday as part of a union-backed campaign to regain some of the pay, benefits and respect they say they’ve lost after three decades of decline.

Owning his own rig was supposed to be a crack at something better. Tigre came to America from Ecuador 30 years ago, started driving for one of the hundreds of small trucking companies that serve the port and, by 1993, had saved enough to buy a truck. It seemed like a fair trade: As an owner-operator working on contract, he gave up some stability in exchange for the freedom of working whenever he wanted.

But then, the bargain broke down. Prices started rising, and Tigre’s pay rate didn’t keep up. Diesel used to be 87 cents a gallon; now it’s $3.99. Tolls on some roads are now more than $100 for truckers. There are anti-terrorism identity cards and stricter emissions requirements, and any traffic infraction could send his insurance through the roof.

That’s a great deal for the trucking companies. Unlike employees, owner-operators aren’t entitled to benefits like workers compensation, Social Security contributions, unemployment insurance or the same level of protection by safety and health regulation. And it’s not just the trucking industry: Contractors have emerged all over the economy, from cheerleaders to construction workers. Personnel not covered by unemployment insurance made up 23.5 percent of the workforce in 2010, up from 19 percent in 2001. Companies often try to classify their workers as independent, even if they’re not, to avoid taxes and weaken unions.

But the pendulum has swung perhaps farthest, and fastest, in the ports. Since Congress deregulated the industry in the 1980s — when a unionized truck driver made today’s equivalent of $44.83 an hour — about two-thirds of the nation’s 75,000-odd port truck drivers have become independent operators. And now, “independence” has become shorthand for earning less: Owner-operators make an average of $28,000 a year. That’s $7,000 less than employee drivers, who are paid by the hour and typically receive more comprehensive benefits.

For Tigre, the history of the trucking industry is written in red ink. The long hours tanked his marriage. He stopped being able to make mortgage payments on top of truck payments, and he lost his house. He declared bankruptcy. Now, he owes $30,000 to the IRS, and another $10,000 to credit card companies. As he speeds along the New Jersey Turnpike, those circumstances well up like a confession.

“I wish I could say I don’t owe it, but I’d be a liar,” says Tigre, eyes full of guilt. “I can go to my bank and say how much money I have, and I’m broke. But I don’t cry, I got to keep doing what I’m doing.”

Tigre may soon have to sell his truck to raise money. With a million miles on it, it would barely fetch enough to cover the credit card bills. Then, with no assets and ruined credit, he’d have to find a trucking company to work for. But the signs all around the port are for owner-operators, not simple employees; trucking companies don’t want to pour money into equipment, either.

Tigre’s is an extreme case, but that experience — losing control of a relationship where one hand now holds all the cards — is more the norm than the exception.

If the last 30 years have been a gradual downward slide for port truck drivers, in the last six months, the bottom has fallen out from under them.

At around 6 p.m. one recent spring evening, at a corner gas station on the hard, dusty moonscape in between terminals at the Port of New Jersey, Joey Centeno and his boss stand with the guts of a freight truck open to the air, waiting for a part to get the rig back on the road. The delay is just one more thing keeping Centeno from his family, after a shift that had started before dawn. But it is nothing compared to the day before.

“Nine hours. Nine hours!” exclaims Joey, eyes wide with disbelief. That was the amount of time he’d spent waiting to drop off one container, in a line of trucks he couldn’t escape. “And guess who made money. Not me and him! F— am I doing, I’m sitting here!”

At most of the port’s five terminals, there are about a dozen lines next to each other, which stretch out across a vast tarmac and almost spill out onto the turnpike in the mornings. To pass the time, Centeno jumps rope, or reads books on anger management and the rise of Hitler. He says he’s already on Depakote to deal with the rising rage; his forearm is tattooed with the phrase “Sometimes it takes more strength to make peace than to fight.”

“This is Hell on earth,” he says. “But I do it because I can’t sing or dance.”

The long lines aren’t just terrible for drivers. They’re also a mortal danger for the rest of the jobs the port supports, as importers are already starting to send their goods through other ports — even if it means putting the goods on a train right back up to New York. So, why have the delays gotten so bad lately?

Well, it depends on who you ask. Truck drivers blame the unionized longshoremen for slowing down their work in protest, since their jobs are so secure. The longshoremen blame the Waterfront Commission, which has delayed approving hundreds of workers whom the terminal operators say they need to run the port. And everybody blames New Jersey Gov. Chris Christie, for a scandal over the winter that has distracted the Port Authority from actually fixing the problem.

But the Teamsters, who represented nearly all port truck drivers before deregulation destroyed their membership, have another theory: The dysfunction is being involuntarily subsidized by a workforce that isn’t paid for its time.

“One of the reasons the ports are so inefficient is that there’s no cost to delaying these employees,” says Fred Potter, who runs the Teamsters’ ports division. “When they sit out for two, three, four hours, and it doesn’t cost the shipper, what’s their incentive to do anything?”

The Teamsters argue that many of these “independent contractors” shouldn’t qualify as such at all for the purposes of the Internal Revenue Service. Because most trucking companies don’t allow their drivers to work for other companies at the same time, and largely dictate how the job is done, state courts and labor departments have found scores of cases in recent years where drivers were misclassified as contractors when they really should qualify as employees.

“The conditions that these guys work under is like sharecropping,” says Potter. “The trucking company tells them what crops they can plant, what fertilizer they can use, makes them pay for all their equipment, and then tells them, you’re independent.”

To start moving the pendulum back in the other direction, the Teamsters have been pushing state legislation that would create a presumption that drivers are employees unless trucking companies prove otherwise. Still, the measure has run into fierce resistance — not just from the trucking industry and the governor’s office, but also from some of the drivers themselves.

Edisson Villacis, a 42-year-old Ecuadorian driver who wears a Che Guevara-style backwards beret and one earring, is a unionist to the core. He used to work for the Teamsters under Gilberto Soto, the legendary Teamsters organizer who was mysteriously killed in 2005 while running an intercontinental campaign against the shipping company Maersk. Villacis left the union after that, and when the Teamsters ramped up their campaign against worker misclassification, he felt the need to defend his independence.

“For some reason, I like this,” he says affectionately, looking around at the cozy cab of his sky-blue truck, kitted out with a little television, microwave, a neatly-made bed and a picture of his daughter. “What’s not to like?”

Working with the New Jersey Motor Truck Association, Villacis has become the leader of the opposition to the Teamsters’ misclassification bill, which was reintroduced after Christie vetoed it last summer. He gets the message out through talking to people — he’s known at the port as “Principe” — and through his stewardship of a popular Facebook page that’s become a water cooler for chatter among drivers increasingly stuck on their smartphones for hours on end.

“This is my choice. Nobody’s forcing me to do this job. Nobody’s putting a gun to my head,” says Villacis. He worries that companies that are forced to treat their drivers like employees — with all the attendant costs — wouldn’t be able to compete. “If they continue with this situation of forcing the drivers, they’re not just going to destroy the industry, they’re going to destroy a good way of living for a whole lot of people.” (The Teamsters argue their bill wouldn’t force truly independent drivers to change their lifestyles, but the union also maintains that almost nobody fits that description of independent.)

Villacis isn’t just talking about the drivers. He also means all of the informal, Latino-owned businesses in the immigrant communities that serve them. Driving through a Colombian neighborhood of Elizabeth, N.J., Villacis points to big rigs parked behind homes parked in side yards, as if they were pots of gold. They’re often serviced by one- or two-person auto shops and fueling stations; he pays to park his truck in a lot behind a church that needs the income. If everyone were absorbed within company walls, he thinks that diffusion of revenue would dry up.

Still, he admits, the many costs for which independent drivers are responsible mean they could take home nothing one week, if gas spikes or the lines get too long. “We are achieving the middle class, the edge,” he says, poking at the dangling line of his radio cord, as if it were the boundary between making it and not. “But we are on the poor side, because of the variables.”

In other hard-to-unionize sectors, employees are figuring out alternative models of organizing — such as the fast-food worker strikes for a higher minimum wage,  OUR Walmart’s campaigns for better working conditions and the New York Taxi Workers Alliance’s fund to supplement drivers’ health insurance.

There’s potential for that in trucking, too. Edisson would like to see more comprehensive training for owner-operators, for example, to help them manage their money as well as navigate the ins and outs of the port. Better enforcement of truth-in-leasing laws would go a long way, as well. And, long term, he dreams of creating a driver-owned corporation that would trade equity for trucks, pay by the hour and share in the profits.

At the moment, though, nobody seems interested in helping realize that future. Not the longshoremen, not the Democrats, not the trucking companies and not even the Teamsters, who are supposed to be their one champion in an otherwise unfriendly world.

“We are surrounded by enemies, and we are an army of rebels,” Villacis says. “But we have no weapons.” He looks at his phone, mounted on the dash, where messages from frustrated truckers have kept piling up.

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