Court Says "US-Mexico Cross Border Trucking Program Will Live On!"

Despite appeals and lawsuits filed in June from the Owner-Operator Independent Drivers Association (OOIDA) and the Teamsters union, the U.S.-Mexico Cross Border Trucking Pilot Program will live on, says the U.S. Court of Appeals on July 26.

The long-haul trucking pilot program, overseen by the FMCSA (Federal Motor Carrier Safety Administration), was announced as part of the North American Free Trade Agreement (NAFTA) cross-border long-haul trucking provisions. Its stated aim is to test and demonstrate the ability of Mexico-based motor carriers to operate safely in the United States.

This pilot program allows Mexico-based motor carriers to operate throughout the United States for up to 3 years. Likewise, U.S.-based motor carriers receive reciprocal rights to operate in Mexico for the same period.

OOIDA's and the Teamsters' protests against the cross-border trucking program started as early as 2007 under a pilot program initiated by the Bush administration. Arguments continued in 2011 with the Obama administration's successor program. Complaints center primarily around questions of safety provisions: OOIDA and the Teamsters allege inconsistencies in requirements for physical examinations of drivers, licensing requirements, and drug testing. Specifically, protesters claim that U.S. truck drivers are held to increasingly rigorous standards for safety--standards not enforced in Mexican trucking programs. OOIDA purports that the pilot program gives Mexico's truckers an exemption from safety regulations and therefore creates a hazard on U.S. highways. Another claim rejected by the courts stated that the FMCSA program was too small to be scientifically valid.

Advocates of the program may point toward the explosion of trade between U.S. and Mexico as reason to continue. Total cross-border freight by train and truck surged almost 35 percent from 2007 to 2012, according to U.S. government data. Others, however, may cite data from the Bureau of Transportation Statistics and suggest the surge may have little to do with the pilot program. For instance, the Journal of Commerce (JOC), recently reported that of the more than 5.1 million border crossings in 2012, only 1,046 were completed under the pilot project.

The FMCSA To Cut $1.7 Billion in Costs From Paperwork Reduction

Good news for the trucking industry. U.S. Transportation Secretary Anthony Foxx announced on August 1, plans to reduce daily paperwork burdens on professional truck drivers thereby saving the industry an estimated $1.7 billion annually. Cost reductions will come after a change to requirements for daily Driver Vehicle Inspection Reports (DVIRs). Professional truck drivers will no longer be required to complete DVIRs unless a defect or deficiency is discovered.

Office of Management and Budget Director Sylvia Mathews Burwell declared this measure a significant step forward in the Obama Administration's May 2012 Executive Order to reduce regulatory burdens on the private sector. As quoted in the announcement posted by FMCSA (Federal Motor Carrier Safety Administration), Burwell applauded this change as a commonsense measure. "...the Department of Transportation is dramatically reducing paperwork burdens on the trucking industry, while continuing to protect public safety."
Currently, commercial truck drivers are required to conduct pre- and post-trip equipment inspections and file DVIRs after each inspection. Drivers must do so regardless of whether or not a problem is discovered. Internal studies indicated that only 5 percent of reports filed include issues. The DVIR process was assessed as the 19th most burdensome paperwork requirement, based on the number of hours needed to comply. The new proposal announced by Foxx will continue to require pre- and post-trip inspections. However, drivers will only be required to complete a DVIR if problems are identified.

Unchanged is the federal requirement for thorough annual safety inspections of all commercial vehicles in the U.S. Additionally, state and federal inspectors will continue to spot-check commercial vehicles randomly at terminals, weigh stations, truck stops, and at end points. Vehicles deemed problematic after inspections will continue to be removed from service until all noted safety problems are resolved.

The FMCSA Continues to Become More Efficent in Driver Compliance

Good news for the trucking industry. U.S. Transportation Secretary Anthony Foxx announced on August 1, plans to reduce daily paperwork burdens on professional truck drivers thereby saving the industry an estimated $1.7 billion annually. Cost reductions will come after a change to requirements for daily Driver Vehicle Inspection Reports (DVIRs). Professional truck drivers will no longer be required to complete DVIRs unless a defect or deficiency is discovered.

Office of Management and Budget Director Sylvia Mathews Burwell declared this measure a significant step forward in the Obama Administration's May 2012 Executive Order to reduce regulatory burdens on the private sector. As quoted in the announcement posted by FMCSA (Federal Motor Carrier Safety Administration), Burwell applauded this change as a commonsense measure. "...the Department of Transportation is dramatically reducing paperwork burdens on the trucking industry, while continuing to protect public safety." 

Currently, commercial truck drivers are required to conduct pre- and post-trip equipment inspections and file DVIRs after each inspection. Drivers must do so regardless of whether or not a problem is discovered. Internal studies indicated that only 5 percent of reports filed include issues. The DVIR process was assessed as the 19th most burdensome paperwork requirement, based on the number of hours needed to comply. The new proposal announced by Foxx will continue to require pre- and post-trip inspections. However, drivers will only be required to complete a DVIR if problems are identified.

Unchanged is the federal requirement for thorough annual safety inspections of all commercial vehicles in the U.S. Additionally, state and federal inspectors will continue to spot-check commercial vehicles randomly at terminals, weigh stations, truck stops, and at end points. Vehicles deemed problematic after inspections will continue to be removed from service until all noted safety problems are resolved. 

The MOL Comfort Ocean Calamity

The Carrier of Goods by Sea Act states that the carrier is responsible for vessel seaworthiness, the safety of goods in route, and the proper manning of the vessel. Items the carrier is not responsible for include negligence of the master navigator, fire, accidents at sea, acts of God, acts of war, seizure, mutiny, insufficiency of packing of goods, and other situations in which the ocean carrier's actual fault is in question. 

Without ocean freight insurance, a company can be held responsible and liable for such incidents. In order to protect your company and your assets, a viable and comprehensive insurance plan must be set in place.

In June of this 2013, the MOL Comfort ocean container vessel fractured in two separate sections during an incredible storm on the Indian Ocean. The vessel suffered extensive damage to the bow and stern; as a result, the ship surrendered all of its cargo to the sea. Presently, officials are still rooting for the cause to the catastrophe aboard the MOL that caused such devastating loss. 

A possibility that is currently under investigation points to structural weakness that caused the wreck of the UK container ship, the MSC Napoli, in 2007. The investigation into the UK ship's demise showed flaws which were concluded to have been caused by a change in the hull design of the ship. The MOL Comfort ship was constructed one year after the Napoli, at which time the change in design of the hull had not yet been corrected. 

Following the MOL disaster, Mitsui OSK lines pulled the six sister ships of the MOL in order to inspect their hulls. Each were designed and constructed around the same time and at the same shipyard as the MOL Comfort and the UK's MSC Napoli. It is feared investigation will show discrepancies in the hull designs. 

At this time, insurance agents in the US feel the MOL disaster will not effect current insurance rates for cargo carriers. It is certain Mitsui's MOL disaster will send shockwaves through the Japanese ocean shipping market because of he number of ships involved in the bad hull design. 

Ocean freight insurance is sometimes a company's only defense from potential disaster. It is important to have a thorough and comprehensive plan and agents that have the knowledge to protect your investment even in the most unique situations. For more information, please contact us.