Leading Third-Party Logistics Provider Shares Direct Expertise of Trade Agreement Violation – Challenges Decade of Growth, Hinders Nations’ Central Location Testing Ground for Internationally Sold Products
September 29, 2009 (Dallas, TX) – Dallas-based Transplace, a leading provider of transportation management solutions and logistics technology, experiences firsthand the city’s connection of major interstates, multiple airports, extensive rail systems and close proximity to the Gulf of Mexico freight ports.
Due to its central location, Dallas has become the fourth largest industrial market in the nation.
Strategically positioned to serve both Mexico and the rest of North America, a critical factor to Dallas’ local economy is the utilization of cross-border shipping, where trade has more than tripled in the last decade–totaling $57 billion in 2007 between Mexico and Dallas. However, this March saw the creation of a U.S. trade agreement violation that does not allow Mexican trucks on U.S. highways, and vice versa, which has created a major roadblock to this valuable cross-border trade.
Established in 1994, the North American Free Trade Agreement (NAFTA) called for the free movement of trucks between the U.S., Mexico and Canada in order to eliminate barriers and facilitate the shipment of goods. Yet Congress eliminated the funding of a pilot program that allowed a limited number of Mexican trucks to cross over into the U.S. – Mexico responded in March by imposing $2.4 billion in tariffs on U.S. exports.
“This trade barrier enforces a grave economic penalty on business in the United States, and even more specifically on Dallas,” said Tom Sanderson, chairman & CEO for Transplace. “Eighty-five percent of the 90 U.S. exports targeted by Mexico are made or grown in Texas and the tariffs hurt both international business growth as well as the Dallas economy. The city has experienced amazing growth and success under NAFTA, and violating these agreements greatly affects the local economy and the Mexican transport carriers, manufacturers and retailers that want to do business with the U.S.”
These new tariffs have negatively affected exports, which are down this year over last year. According to the Department of Transportation’s Bureau of Transportation Statistics, June 2009 U.S.-Mexico surface transportation trade was down 21.8 percent as compared to June 2008, while Texas leads all other states in surface trade with Mexico – posting $6.8 million for June 2009.
“As the U.S.’s third-largest trade partner, Mexico has the potential to open up vast opportunities for Dallas or to close those opportunities by trading with other countries,” notes Kevin Higgins, vice president of International for Transplace. “Having access to Mexican trucks and drivers and conducting more trade is critical for growing Dallas as a centralized transportation hub. Feeding freight to and receiving it from the rest of the U.S. and Mexico also represents a good testing ground for U.S. corporations thinking of selling products internationally.”
Opposition to the program cites truck safety as a key issue, but there is overwhelming evidence that Mexican drivers are just as safe as American drivers. During the cross-border trucking demonstration pilot programs' 18 months of operation, 163 trucks crossed the border more than 45,000 times without a significant incident. Additionally, the equipment used by Mexican carriers is identical to the trucks and trailers bought and used in the U.S. by domestic trucking companies.
Transplace is a non-asset based third-party logistics (3PL) provider offering manufacturers and retailers the optimal blend of logistics technology and transportation management services. From complete logistics management outsourcing to intelligent transportation management systems (TMS) to supply chain network planning and design to high-quality brokerage services, Transplace has proven the ability to deliver both rapid return on investment and consistent value to customers. The company is recognized among the elite 3PLs in North America by a customer base that includes many of the largest shippers in the world.
In 2009, Transplace was awarded with the Global Logistics and Supply Chain Strategies “100 Great Supply Chain Partners” distinction for the sixth consecutive year and by Supply & Demand Chain Executive as a “Top 100” provider in supply chain transformation for the fourth consecutive year. In addition, Transplace was recognized by Inbound Logistics as a Top 10 3PL for the seventh consecutive year. To learn more about Transplace and the people behind “I Am Transplace,” please visit www.transplace.com.