Offshoring US Transportation Jobs to Mexico--
The Looming Deadline
By Richard D. Vogel
Copyright © 2011 by Richard D. Vogel
Permission to copy granted
Author's note: This article is an update to The NAFTA Corridors: Offshoring US Transportation Jobs to Mexico that was originally published in Monthly Review in 2006.
The North American Free Trade Agreement is the gift that keeps on giving to transnational corporations (TNCs) and taking from US workers. Now, following the migration of countless manufacturing jobs in the 1990s and early 2000s, tens of thousands of US transportation jobs are about to move south of the border.
After a 17-year delay caused by stiff political opposition from labor unions , environmental and community groups, and dedicated individuals, the provision of NAFTA that allows trucks from the United States, Mexico, and Canada to cross the border and deliver anywhere inside the other country is about to go into effect. On April 8, 2011 the US Department of Transportation (DOT) announced a three-year probationary program that will lead to permanent operating authority for Mexican carriers inside the United States. Since the mandatory 30-day comment period on the program expired in May, provisional authorizations could be granted at any time.
The impact of cross-border trucking with Mexico will be widespread and devastating for US workers. Map 1 illustrates the infrastructure that is in place to accommodate truck traffic originating in Mexico.
There are four well-established NAFTA transportation corridors that reach the farthest corners of North America:
The Pacific corridor primarily uses highway 15 in Mexico and I-5 in the US. At the US-Mexico border it crosses through the inland ports of Otay Mesa, Calexico-East, and Mexicali. This western-most NAFTA corridor connects the maquiladoras of western Mexico and the Pacific maritime ports of Mexico where US-bound imports from the Far East are landed to avoid unionized ports in the north with US and Canadian markets.
The central western corridor connects the large concentration of maquiladoras in central Mexico with northern markets. Most of the surface traffic on this route presently follows highways 15 and 45/49 in Mexico and I-15 and I-25 in the US. The western branch of this NAFTA corridor is the proposed route of Canamex, a state-of-the-art, four-lane highway to accommodate ever-increasing NAFTA traffic that will extend from Mexico City to Edmonton, Alberta. The central western corridor crosses the US-Mexico border at the inland ports of Nogales, Santa Teresa, and El Paso.
The central eastern corridor, carrying the most traffic in the NAFTA transportation network, follows highway 57 from Mexico City to Saltillo/Monterrey, the industrial center of the nation, and then heads north on highway 85 to Laredo, the busiest port on the southwestern border. At Laredo the central eastern corridor braches out--I-35 heads due north through the center of the continent, while the I-69 corridor, which is under construction, travels northeast along various highways through the heart of the Midwest and on to the major urban centers of eastern Canada.
The Atlantic corridor which traverses the entire Atlantic seaboard via I-95 is connected to the industrial center of Mexico by I-35, US 59 (a link in the future I-69 corridor) and I-10. The Atlantic corridor, supplemented by the Appalachian corridor that runs from the Mid-south to Pennsylvania and the Champlain-Hudson corridor that spans New York on its route to Quebec, delivers NAFTA products to a population of over 55 million inhabitants spread out over 4 Canadian provinces and 188 counties in 13 US states.
The NAFTA corridor system in North America is the biggest and busiest surface transportation network in the world, and the central issue effecting American workers is the number of transportation jobs in the north that will be offshored to Mexico under the cross-border provisions of NAFTA.
Tens of thousands, plus
According to the DOT, 4,742,925 trucks crossed the US-Mexico border in 2010. That amounted to over 18,000 trucks during each working day, with 5,500 trucks crossing daily in Laredo alone. In view of the current increase of maquiladora manufacturing fueled by the tentative economic recovery in the US, the DOT predicts that cross-border truck traffic will exceed 5 million in 2011.
Under current regulations, Mexican carriers are restricted to a commercial zone along the border where US carriers, including thousands of independent owner-operators i, pick-up the loads for delivery to US and Canadian destinations. A significant number of these US transportation jobs will soon move south of the border just as millions of manufacturing jobs did after the ratification of NAFTA. Both the contract and the corporate in-house trucking/warehousing sectors of the US transportation industry will take big hits with the activation of the cross-border trucking provisions of the treaty.
An exact estimate of the job loss is difficult to make but unnecessary--the current volume of NAFTA traffic from Mexico suggests that tens of thousands of driving, warehousing, terminal, and support jobs in the US and Canada are at stake.
In addition, drivers and workers in the north who still have jobs will find themselves competing with a reserve transportation workforce from the south that is working for Mexican wages. Without a doubt, citizen transportation workers in the north will share the dismal fate that citizen manufacturing workers suffered under NAFTA.
The myth of Mexican carriers and the TNCs
The myth that Mexican carriers are going to get the transportation jobs is the smokescreen behind which the TNCs are operating. To be sure, there are some Mexican-owned carriers that will capture a small percentage of the US transportation jobs that move south of the border, but that is a sideshow to the main event. Under the new rules, the TNCs that exploit maquiladora manufacturing in Mexico and the in-house trucking/warehousing operations of the TNC-owned big box retail stores will benefit most from cross-border trucking. According to a US Congressional Research Service report, "Mexican Trucks in the United States", there were more than 1,000 US-owned trucking companies in Mexico awaiting authorization to begin cross-border operations in 2001, and there are more now.
Walmart is the leader of the pack ii. This largest of the TNCs is currently preparing to move many of its mammoth distribution centers in the American Southwest (primarily in Texas) south of the border and will discharge half of its army of drivers and warehouse workers in the US and recruit replacements in Mexico as soon as it can. Mexican carriers as the beneficiaries of NAFTA is a myth--thousands of Mexican drivers operating TNC-owned trucks and Mexican and Central American workers laboring in TNC warehouses and distribution centers will be the new reality.
An impending triumph of neoliberal labor policy
The implementation of the cross-border trucking provisions will be the greatest triumph of neoliberal labor policy in North America since the expansion of maquiladora manufacturing across Mexico under NAFTA. The central strategy of the cross-border trucking provisions is the same as that of the main treaty--to enhance the profits of the TNCs by offshoring jobs to the cheaper labor markets of Mexico.
The irony of the present case is that while the jobs will be based offshore, most of the work will be done onshore. Perhaps the prospect of an army of drivers from the global South delivering name-brand merchandise produced in maquiladoras in name-brand trucks manufactured in Mexico iii across North America will open the eyes of working people to the devastating impact of neoliberal globalization on their ranks.
The offshoring of US transportation jobs to Mexico will be another major milestone in the race to the bottom for labor in North America, and it is axiomatic that the race is far from over. Failure to challenge this current neoliberal attack on working people will embolden the TNCs to take even more.
iTrucking deregulation in the US during the 1980s and 1990s created a huge pool of contract haulers, many of whom are independent owner-operators working on thin profit margins. The Owner-Operator Independent Drivers Association which represents over 151,000 drivers does not report on how many of their members are involved in the NAFTA business, but the organization is officially opposed to cross-border trucking. A significant number of owner-operators, unable to compete with Mexican wages under NAFTA rules, will be financially ruined.
iiThe list of TNCs operating in Mexico is long. In addition to Walmart, Target, Home Depot, Costco, Lowes, Sears and 100s of smaller businesses have supply-chains south of the border, and many more will move offshore when the cross-border trucking provision of NAFTA goes into effect.