Thursday, August 23, 2007

This playing field looks a little crooked

Land-Line: Mexican Truckers Promised Financial Help
Mexican motor carriers selected to participate in the proposed cross-border program could receive financial assistance from the Mexican government to make them more competitive.

Apparently, government financial assistance has been promised to truckers and trucking companies that participate in the cross-border program to help them carve out a competitive edge. The money would be used to develop infrastructure like loading docks, support trucks and light-service trucks – elements that would make their business operations more competitive with their U.S. counterparts, according to a translated article from the Mexican publication T21.

Tirso Martinez, president of CANACAR – a Mexican trucking association – said in the article that the funding was approved by the Mexican Secretary of Economy, but had not yet been put in place.

So, in addition to cut-rate wages, US truckers will be disadvantaged by direct subsidies to Mexican trucking firms. It's a good thing the Administration's rush to get the Mexican trucks program rammed through by January 09 is all about allowing the "free market" to work.

Mexican trucks will also not have to meet US emissions standards and can fuel up with high sulphur (ie cheap diesel) before crossing the border. The average US fleet faces over $20,000 in extra lifecycle costs per power unit due to the new emissions standards for trucks and spends and extra 5 cents a gallon for Ultra-Low Sulphur diesel (or about $5,000 over each tractor's lifespan) to keep the emissions systems working. I like clean air, but if it's important enough for American and Canadian carriers to pay for it should be important enough for Mexican carriers to pay for too.

No comments: