INTERIM REPORT ON NAFTA CROSSBORDER TRUCKING DEMONSTRATION 

PROJECT 

Federal Motor Carrier Safety Administration 

Report Number: MH-2008-040 

Date Issued: March 10, 2008 
U.S. Department of 

Memorandum

Transportation 

Office of the Secretary 

of Transportation 

Office of Inspector General 

Subject: INFORMATION: Interim Report on NAFTA 

Cross-Border Trucking Demonstration Project 

Report Number MH-2008-040 

Date: March 10, 2008 

From: Rebecca Anne Batts 

Assistant Inspector General 

 for Highway and Transit Audits 

Reply to 

Attn. of: JA-40 

To: Federal Motor Carrier Safety Administrator 

As part of our ongoing audit of the cross-border trucking demonstration project, 

initiated by the Department on September 6, 2007, this report presents the interim 

results of our required review. Section 6901 of the U.S. Troop Readiness, 

Veterans’ Care, Katrina Recovery, and Iraq Accountability Appropriations Act, 

20071

 (the Act) requires us to provide interim and final reports on the 

demonstration project to Congress and the Secretary of Transportation. Our final 

report is due 60 days after the conclusion of the demonstration project. 

As required by the Act, our audit objectives were to determine whether: 

• the demonstration project consists of a representative and adequate sample of 

Mexico-domiciled carriers likely to engage in cross-border operations beyond 

the United States municipalities and commercial zones on the United StatesMexico border, 

• the Department has established sufficient mechanisms to determine whether 

the demonstration project is adversely affecting motor carrier safety, and 

• Federal and state monitoring and enforcement activities are sufficient to ensure 

that participants in the demonstration project are complying with all applicable 

laws and regulations. 

This audit was conducted in accordance with Generally Accepted Government 

Auditing Standards as prescribed by the Comptroller General of the United States. 

 

1

 Public Law 110-28 (2007). 
 2

We performed such tests as we considered necessary to detect fraud, waste, and 

abuse. Exhibit A contains information on our scope and methodology and 

Exhibit B is a listing of prior OIG audit reports on this subject. 

CURRENT STATUS OF THE DEMONSTRATION PROJECT 

The Department initiated the 1-year demonstration project in September 2007 to 

permit up to 100 Mexican motor carriers to operate throughout the United States. 

Following the Department’s announcement in February 2007 that a demonstration 

project would be conducted, Congress set legislative conditions for initiating the 

project, including an initial review by our office and a Departmental response to 

Congress addressing any issues identified in our review. In addition, a court case 

is currently pending regarding the question of whether a legislative provision 

enacted in December 2007 places a funding restriction on the demonstration 

project. 

Legislative Conditions for Initiating the Demonstration Project 

Before the demonstration project (also known as the pilot program) could begin, 

legislation was enacted2

 calling for us to review the Federal Motor Carrier Safety 

Administration’s (FMCSA) preparations for monitoring and enforcing safety rules 

during the demonstration project. The legislation also required the Secretary to 

take action addressing any issues we raised in our review and submit a report to 

Congress detailing such actions prior to initiating the demonstration project. 

We issued our report on September 6, 2007 detailing issues pertaining to the 

proposed demonstration project.3

 We found that although FMCSA had 

implemented significant initiatives in preparation for the demonstration project, 

the Department should, at a minimum, address three issues in its report to 

Congress including: (1) ensuring that adequate plans are in place to carry out the 

Department’s commitment to check every truck every time it crosses the border 

into the United States, including a quality control measure to ensure this system is 

effective; (2) ensuring that state enforcement officials understand how to 

implement recent guidance on the demonstration project and that training 

initiatives filter down to roadside inspectors; and (3) addressing our determination 

that FMCSA has implemented policies, rules, and regulations that differ slightly 

from the language in 3 of 34 specific congressional requirements. 

 

2

 Section 6901 of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and Iraq Accountability 

Appropriations Act, 2007 (Public Law 110-28). 3

 OIG Report Number MH-2007-065, “Issues Pertaining to the Proposed NAFTA Cross-Border Trucking 

Demonstration Project,” September 6, 2007. OIG reports and testimonies can be found on our website: 

www.oig.dot.gov. 
 3

The Department provided a letter report to Congress on September 6, 2007, 

addressing the three issues raised in our audit. The report included Commercial 

Truck Border Crossing Implementation Plans for 25 U.S.-Mexico border crossings 

designed to ensure that every participating truck is checked every time it crosses 

the border into the United States and a quality control plan to ensure this system 

operates effectively. The response also provided FMCSA’s outreach plan 

identifying past and future activities designed to ensure that state enforcement 

personnel have the information needed to oversee the safety of trucks participating 

in the demonstration project. Finally, FMCSA agreed to modify policies or take 

other actions to align with congressional requirements on issues involving 

inspection of trucks during pre-authorization safety audits, checking licenses of 

drivers of Mexican trucks at the border, and updating the definition of safety rules 

applicable to Mexican motor carriers. 

Pending Litigation Over Whether Legislation Restricts Funding for 

this Demonstration Project 

During the fourth month of the demonstration project, a legislative provision 

enacted in the fiscal year 2008 Consolidated Appropriations Act4

 stated: 

None of the funds made available under this Act may be used to 

establish a cross-border motor carrier demonstration program to 

allow Mexico-domiciled motor carriers to operate beyond the 

commercial zones along the international border between the United 

States and Mexico. 

At this time, the Department interprets this provision to restrict funding only to 

future demonstration projects, but some members of Congress and interested 

outside parties contend that the provision restricts funding for the current, ongoing 

demonstration project as well. Oral arguments on this issue, among others, have 

been made before the 9th Circuit Court of Appeals, and a decision is pending.5

INTERIM FINDINGS 

At the 6-month point in the 1 year project, we found that: (1) Fewer carriers and 

vehicles have participated than expected so far in the project. No reliable 

statistical projections regarding safety attributes can be made at this point, 

although certain characteristics of the Mexican carriers participating in the project, 

such as the number of vehicles and drivers, may be representative of a larger 

group of carriers that have previously applied for long-haul authority. (2) The 

Department has established and is supporting an independent panel to assess any 

 

4

 Consolidated Appropriations Act, 2008, Public Law 110-161, Division K, Title I, § 136 (2007). 5

 Sierra Club, et al. v. Department of Transportation, et al., No. 07-73415 (9th Circuit filed August 29, 2007). 
 4

adverse safety impacts from the project although the panel is concerned that it will 

not have sufficient data to draw meaningful conclusions when the project ends. 

(3) FMCSA has established and enhanced mechanisms for state and Federal 

monitoring and enforcement of safety rules, and FMCSA records show that about 

3,700 checks have been done at the border. However, a key quality control 

measure promised to Congress has not been implemented. This control measure is 

designed to ensure that checks of all Mexican drivers and vehicles crossing the 

border are occurring as planned. Without this quality control measure, FMCSA 

does not have assurance that it has checked every Mexican truck and driver that is 

participating in the project when they cross the border into the United States. 

Fewer Carriers and Vehicles than Anticipated Are Participating in the 

Project, Which Impacts the Ability To Make Reliable Statistical 

Projections 

Immediately after issuing the Department’s September response to Congress, 

FMCSA initiated the demonstration project by granting provisional operating 

authority to the first Mexico-domiciled carrier. However, at the 6-month point, 

fewer carriers than anticipated are participating in the demonstration project. 

Specifically, since the project’s initiation, only 19 Mexican carriers have been 

granted provisional operating authority,6

 one of which withdrew7 on February 1, 

2008. By contrast, in April 2007, FMCSA had anticipated granting provisional 

authority to 25 carriers each month, until 100 were participating. 

According to FMCSA records, an additional 28 carriers have qualified for the 

program, but they have not filed the required proof of insurance. However, even if 

those carriers were to file the required insurance proof and were granted 

provisional authority, the total number of Mexican carriers would reach only 47—

just under half the 100 carriers originally envisioned. 

Fewer vehicles than estimated are involved in the project and FMCSA’s records 

indicate that only 247 trips extended beyond the commercial zones. In August 

2007, FMCSA estimated that, based on the number of vehicles approved at that 

time, 540 vehicles would be participating in the project if 100 Mexican carriers 

eventually received provisional authority. By contrast, as of February 25, 2008, 

only 70 vehicles were identified by the 16 Mexican carriers that had participated 

up to that point, including the carrier that dropped out. FMCSA’s records, as of 

February 25, 2008, show 3,680 crossings into the United States by project 

 

6

 According to FMCSA data, 19 carriers had received provisional authority as of March 6, 2008. We limited our 

analyses to the 16 Mexican carriers that had received authority as of February 25, 2008, including the carrier that 

withdrew from the project on February 1, 2008. We did not include in our analysis data related to the 3 carriers 

admitted to the project after February 25, 2008. 7

 The carrier that withdrew, Trinity Industries de Mexico S de R L de CV, reported the largest fleet of vehicles of all 

demonstration project participants as of February 25, 2008—16 vehicles. 
 5

participants with 247, or 6.7 percent listing destinations beyond the commercial 

zones. About 89 percent of these appear to be to one state—California. 

The following table compares the projected number of carriers and vehicles to 

those 16 carriers that were participating in the project as of February 25, 2008. 

Our subsequent analysis is also based on the same 16 carriers. 

Table: Projected versus Actual Participation as of 

February 25, 2008

100

540

16 70

0

100

200

300

400

500

600

Carriers Vehicles

Projected

Actual

Source: OIG analysis of FMCSA data. Data are for carriers granted provisional 

operating authority as of February 25, 2008. 

Although we have not independently verified the information, according to 

FMCSA officials and press reports, factors such as the additional costs of 

insurance, the uncertainty of the project, and the burdens associated with increased 

reviews at the border may have played a role in the limited participation of 

Mexican carriers. 

Although the 16 participants appear representative of the larger group of 

723 Mexican carriers that have applied for long-haul authority, the current number 

of participants is not adequate to make statistically reliable projections or 

estimates of some important characteristics, including safety characteristics such 

as the number of crashes that could be expected from long-haul Mexican carriers. 

The 16 carriers represent about 2 percent of the 723 original applications for longhaul authority that FMCSA provided us. Our statistical analysis shows that for 

certain characteristics, such as the number of vehicles reported, the demonstration 

project participants appear to be representative of a larger group of Mexican 

carriers that have applied for long-haul authority in the United States over the past 

10 years. 

Our statistical tests on the following variables showed no statistically significant 

difference between the two groups. 
 6

♦ Form of the company’s business entity 

♦ Whether the company currently operates in the United States 

♦ U.S. affiliation reported by the company 

♦ Type of registration being sought by the company 

♦ Whether the company transports hazardous materials 

♦ Which border crossings the company intends to use 

♦ Number of vehicles reported by the company 

♦ Number of trailers reported by the company 

♦ Number of drivers reported by the company 

♦ The type of cargo the company intends to transport 

The figure below compares selected characteristics of the 16 participants and the 

universe of 723 applicants. This figure is based on answers supplied by the 723 

applicants in their application packages to FMCSA, which included the 16 

demonstration project participants. We did not independently validate the 

information. 

Figure: Comparison of Project Participants to All 

Applicants

0%

20%

40%

60%

Form of Business

UNIVERSE 37% 16% 46% 1%

PARTICIPANTS 44% 0% 56% 0%

CORPORATION PARTNERSHIP SOLE 

PROPRIETORS

OTHER
 7

0%

50%

100%

Currently Operates in U.S.

UNIVERSE 78% 21% 1%

PARTICIPANTS 81% 19% 0%

YES NO NO ANSWER

0%

20%

40%

60%

80%

Number of Vehicles Owned

UNIVERSE 72% 7% 2% 0% 2% 16%

PARTICIPANTS 63% 13% 0% 0% 13% 13%

1 TO 5 6 TO 10 11 TO 15 16 TO 20 >20 NO 

ANSWER

 Source: OIG Analysis of FMCSA Data. Totals may exceed 100 percent due to rounding. 

As these charts and our statistical analysis demonstrate, the 16 participants appear 

to have characteristics that are representative of all of the Mexican carriers that 

have applied for long-haul authority, but the number of participants in the 

demonstration project to date is not sufficient to reliably predict the safety 

behaviors of the universe of carriers that applied for authority based on the 

behaviors of the participants. 

An Independent Evaluation Panel Is Assessing Whether the 

Demonstration Project Adversely Affected Motor Carrier Safety in the 

United States 

FMCSA has stated that it will rely on the work of the Department’s Independent 

Evaluation Panel to determine whether the demonstration project has adversely 

affected motor carrier safety in the United States. Our work has verified the 

ongoing efforts of the panel. The panel includes former U.S. Representative, Jim 

Kolbe, former Department of Transportation (DOT) Deputy Secretary, Mortimer 

Downey, and former DOT Inspector General, Kenneth Mead. As part of our 

work, we met with the panel and its staff to get an understanding of the panel’s 
 8

role and to determine whether it is receiving all it needs to carry out its mission. 

As determined in our discussion with panel members and staff, the panel is 

attempting to assess crash data, driver traffic convictions, maintenance of vehicles 

and out-of-service rates, violations of critical safety regulations and other safety 

problems identified by enforcement personnel. 

At this time, the panel reports it is receiving the data and information needed and it 

plans to deliver its report in October 2008. As the demonstration project 

continues, we will continue our open dialogue with the panel to ensure that it has 

the information and resources needed to complete its work. 

We plan to conduct an independent examination of adverse safety effects related 

to project participants.8

 Presently, we have no information that any project 

participants have been involved in a crash; but like the panel, we are concerned 

that the low number of participants will affect the panel’s ability to draw any 

meaningful conclusions from the data about the safety performance of the 

demonstration project participants. 

A Quality Control Measure To Ensure that Checks at the Border Are 

Occurring Has Not Been Implemented, Although FMCSA Has Taken 

Other Actions Intended To Ensure Compliance with Safety Rules 

As mentioned in our last report,9

 checks at the border are important because they 

review the driver’s license to ensure that the vehicle is driven by a licensed driver 

and that the truck has an inspection decal issued by the Commercial Vehicle 

Safety Alliance (CVSA). We verified that FMCSA had developed 25 site-specific 

border crossing plans in conjunction with U.S. Customs and Border Protection 

(CBP) personnel to carry out these checks at the border, and FMCSA provided us 

with records showing that about 3,700 checks were done since the demonstration 

project began in September. However, FMCSA has not implemented a quality 

control measure that is important for ensuring the reliability of this information, 

even though FMCSA committed to do so in the Department’s September 6, 2007, 

letter report to Congress. 

FMCSA Provided Evidence Checks Are Being Conducted but has No 

Assurance that all Mexican Trucks and Drivers Are Being Checked at the 

Border as Planned. FMCSA’s policy requires that each Mexican truck that 

crosses the border undergoes a safety compliance check. During the check, 

FMCSA will verify that vehicles have current CVSA decals and that drivers have 

 

8

 We will examine crash and inspection records of the participants as well as records of Mexican carriers that have 

previously operated beyond the border commercial zones. Our January 3, 2005, Report Number MH-2005-032, 

“Follow-up Audit of the Implementation of the North American Free Trade Agreement’s Cross-Border Trucking 

Provisions,” discusses 1,300 Mexican carriers previously granted authority to operate beyond the commercial zones. 9

 OIG Report Number MH-2007-065, “Issues Pertaining to the Proposed NAFTA Cross-Border Trucking 

Demonstration Project,” September 6, 2007. 
 9

valid licenses and demonstrate proficiency in the English language. To ensure that 

each truck is identified so that a check can be completed, FMCSA developed 25 

site-specific border crossing implementation plans in conjunction with CBP 

personnel that specify how this will occur at each commercial port-of-entry. 

FMCSA also developed a quality control plan to document the extent to which 

FMCSA is able to achieve its goal of checking every truck every time. However, 

FMCSA has not implemented the quality control plan as promised. 

FMCSA committed to the quality control plan in the Department’s September 6, 

2007, letter report to Congress.10 In the report, FMCSA stated that it would 

acquire crossing data from CBP and perform a monthly analysis of a random 

10 percent sample of the data to document the extent to which FMCSA was 

meeting its goal of checking every truck every time it crossed the border. 

However, this process is not now in place. According to a FMCSA official, 

FMCSA is still gathering information for this control, and is exploring other 

methods to verify that every Mexican truck and driver is checked at the border. 

Until FMCSA implements a quality control check using CBP, or another valid 

source of data, to establish a baseline for the number of crossings, like FMCSA, 

we will have no assurance that all checks are being conducted as required. 

In addition to ensuring that all vehicles and drivers are checked, it is also 

important that accurate information is recorded during the checks to facilitate the 

evaluation of the project. We examined FMCSA’s records for about 2,000 truck 

crossings for participants that occurred through January 5, 2008. To date, our 

analysis identified 44 of the FMCSA crossings records that had unclear or 

incomplete responses such as stating “not applicable” for recording a primary 

CVSA decal number or leaving blank the space for English language proficiency 

testing. To the degree that the Independent Evaluation Panel uses this information 

for its work, errors and omissions in crossing data would adversely affect the 

panel’s analysis. We will obtain updated data and conduct additional analysis as 

the project continues. 

To its credit, FMCSA has taken actions to help ensure that participants comply 

with safety regulations and project requirements. As the year-long demonstration 

project reaches its 6-month point, our interim observations regarding these actions 

and our plans for future work include the following. 

Insurance Requirements. FMCSA has recorded insurance information from 

project participants within an established database to record such information. 

Our independent examination of FMCSA’s Licensing and Insurance System and 

our direct contact with the insurance companies showed that all Mexican carriers 

who were issued provisional authority as of February 4, 2008, had the required 

 

10 Enclosure 4 of the Department’s September 6, 2007, letter report to Congress. 
 10

$750,000 in bodily injury and property damage liability insurance. We will 

continue to verify that insurance is maintained by the participants as the 

demonstration project continues. 

Guidance for and Training of State Enforcement Officials. FMCSA has 

provided guidance and training for state enforcement officials. We obtained 

information showing that 421 state officials have received further training on 

issues related to foreign motor carriers before and after the project initiated. To 

assess the impact of these efforts, we followed up on the results of our 

September 6, 2007, report where we noted that five state officials did not believe 

they were ready to enforce the requirements of the demonstration project. We 

have re-contacted those state officials for this review and officials now indicate 

that they are ready to enforce demonstration project requirements for Mexican 

carriers. Those officials cited completion of adequate training and receipt of 

FMCSA guidance as the primary reasons for their current readiness to enforce 

demonstration project requirements. We will continue to examine FMCSA’s 

efforts in this area as the audit continues. 

Mexican Conviction Database. FMCSA has established a Mexican Conviction 

Database to track traffic convictions of Mexican drivers occurring in the United 

States. We obtained evidence from FMCSA indicating that problems we 

identified in August 200711 with the Mexican Conviction Database (formerly 

known as the 52nd State System) have been corrected by the states. We also 

verified that a report to help identify inconsistencies in the database had been 

issued in January 2008. We will conduct further testing at the states as the audit 

continues. 

Global Positioning System (GPS). FMCSA has contracted with a company to 

place global positioning devices on all U.S. and Mexican trucks that are 

participating in the project and FMCSA demonstrated to us how the system can 

identify the position of a particular truck. Data provided by FMCSA showed that 

as of February 21, 2008, 82 GPS units had been installed (on 38 Mexican trucks 

and 44 U.S. trucks) and plans were being finalized for an additional 19 GPS units 

to be installed (on 14 Mexican trucks and 5 U.S. trucks). As the demonstration 

project continues, we plan to monitor the installation and use of GPS technology, 

particularly as it relates to cabotage and hours-of-service violations. 

Mexican Carrier Monitoring System. Our previous audit work has confirmed 

the establishment of a system for monitoring compliance of Mexican carriers 

operating in the United States. For this review, we obtained reports from this 

 

11 OIG Report Number MH-2007-062, “Follow-up Audit on the Implementation of the North American Free Trade 

Agreement’s Cross-Border Trucking Provisions,” August 6, 2007. 
 11

system for demonstration project participants and we will continue to review these 

as the audit continues. 

AGENCY COMMENTS AND OFFICE OF INSPECTOR GENERAL 

RESPONSE 

We are not making any recommendations in this interim report. At this time, the 

NAFTA Cross-Border Trucking Demonstration Project has been in operation for 

only 6 months and participation by Mexican carriers has been less than 

anticipated. Our final report on the demonstration project will be due within 60 

days of the conclusion of the project. We discussed this report with FMCSA 

officials on March 4, 2008, and their comments were considered in finalizing our 

interim report. 

We appreciate the courtesies and cooperation of the FMCSA representatives 

during this audit. If you have any questions concerning this interim report, please 

call me at (202) 366-5630 or Joe Comé, the Program Director, at (202) 366-0377. 

# 
 12

EXHIBIT A. SCOPE AND METHODOLOGY

This performance audit was conducted from December 2007 through February 

2008 in accordance with Generally Accepted Government Auditing Standards as 

prescribed by the Comptroller General of the United States. We performed such 

tests as we considered necessary to detect fraud, waste, and abuse. 

Our work included a review of documentation from various sources and 

interviews with Federal and state personnel, International Association of Chiefs of 

Police (IACP), and U.S. Customs and Border Protection (CBP). We also met 

frequently with members of the Department’s Independent Evaluation Panel. 

To determine whether sufficient mechanisms are established to report on whether 

the demonstration project has had any adverse effects on motor carrier safety, we 

assessed requirements identified in the memorandum of understanding between 

the Department and the Independent Evaluation Panel to determine whether these 

requirements appear sufficient to measure adverse effects. As the audit continues, 

we will continue to meet with the evaluation panel members to ensure they are 

receiving adequate support and information from the Department; and we will 

independently analyze safety data generated by the demonstration project 

participants as well as data generated by comparable groups. 

To get an understanding of the monitoring and enforcement mechanisms within 

the United States, we spoke with state officials in five states who had previously 

reported that they were not ready to enforce requirements of the demonstration 

project. Further, we contacted General Services Administration personnel 

regarding border crossing layouts, and CBP personnel to verify site-specific plans 

at 25 U.S.-Mexico commercial border crossings. Finally, we obtained data from 

FMCSA regarding the Mexican Conviction Database, a list maintained by 

FMCSA that records details about each participating driver and vehicle that has 

crossed into the U.S. from Mexico, and data on the status of Mexican applications 

for long-haul authority. Further work for the final report will concentrate on 

verifying whether these mechanisms have been put into place and are operating as 

planned. 

When we issued our September 2007 report, FMCSA had begun to provide 

enforcement training opportunities to its state partners to ensure that all motor 

carrier enforcement personnel understand requirements specific to the 

demonstration project. We examined new guidance issued by FMCSA since that 

report, as well as training and communication strategies FMCSA has planned, 

performed, and scheduled for state enforcement officials. We obtained data on the 

train-the-trainer courses they presented and the resulting training conducted by the 

states. As our audit continues, we will obtain additional data on training and 

Exhibit A. Scope and Methodology 
 13

determine whether the information has filtered down to the lowest levels of motor 

carrier safety enforcement. 

We analyzed the 25 site-specific implementation plans that FMCSA developed to 

assess FMCSA and CBP’s responsibility for identifying and inspecting the trucks 

and drivers of demonstration project participants each time they enter the United 

States. Further work will include site visits to a select number of border crossings 

to determine whether the site specific plans were implemented and are operating 

as planned. 

We requested from FMCSA records of border crossings by demonstration project 

participants. FMCSA responded by providing a spreadsheet of CVSA Inspection 

Decal Compliance Records. Initially, we reviewed the data by sorting for different 

attributes, such as border crossings by participating carriers and border crossings 

by port-of-entry. Our secondary review consisted of narrowing data searches to 

identify specific anomalies in FMCSA’s data collection and reporting procedures. 

In addition, we obtained Company Safety Profiles for Mexican carriers that were 

participating in the project during that time period, and compared records of 

inspections to the spreadsheet of CVSA Inspection Decal Compliance Records. 

In examining whether the Mexican carriers participating in the demonstration 

project are representative of those likely to participate in long-haul operations, we 

chose as our universe all Mexican carriers who had submitted applications for 

long-haul authority in the United States in the past 10 years. We requested from 

FMCSA copies of all application packages submitted by Mexican carriers. The 

application packages included both the application and the MCS-150 forms. 

We analyzed the application packages to eliminate duplicates, leaving 723 distinct 

applicants. We selected and recorded the following application characteristics as 

identified: the name of the carrier (to be used as the identifier), the date the 

application was received, the Mexican state in which the carrier is located, the 

carrier’s U.S. DOT number, the carrier's form of business, (corporation, sole 

proprietorship, or partnership), whether the carrier operates in the United States, 

the carrier’s MC/MX number, the carrier’s U.S. tax ID number, the name of the 

carrier’s U.S. affiliate, the type of carrier registration being requested, whether the 

carrier is certified to carry hazardous materials, and the border crossings the 

carrier plans to use. From the MCS-150 form, we selected and recorded the 

number of vehicles, trailers, and drivers and the type of cargo the carrier intended 

to haul. We conducted statistical tests on 10 of these characteristics to determine 

whether there was any statistically significant difference between the universe of 

723 applicants and the 16 Mexican carriers that had participated in the 

demonstration project as of February 25, 2008. We will continue these 

comparisons as more Mexican carriers are added to the demonstration project. 

Exhibit A. Scope and Methodology 
 14

Section 6901 of the U.S. Troop Readiness, Veterans’ Care, Katrina Recovery, and 

Iraq Accountability Appropriations Act, 2007 did not require us to monitor and 

review the U.S. motor carriers participating in the demonstration project and 

operating in Mexico. Therefore, the interim and final reports will not address 

these participants. 

Exhibit A. Scope and Methodology 
 15

EXHIBIT B. PRIOR AUDIT COVERAGE 

Prior OIG Audits 

Our most recent report, issued in September 2007, identified three issues that 

FMCSA should address with Congress. 

First, FMCSA had not developed and implemented complete, coordinated plans 

for checking trucks and drivers participating in the demonstration project as they 

cross the border. Without having site-specific border crossing plans in place and 

fully coordinated with CBP and the state, the Department’s commitment to check 

every demonstration project truck every time it crosses the border into the United 

States is at risk. Our report also stated that these plans should include quality 

control measures to ensure that FMCSA’s system for checking each demonstration 

project truck is effective. These checks are important because they will review the 

driver’s license to ensure that the vehicle is driven by a licensed driver and that the 

truck has a current inspection decal issued by the CVSA. This decal shows that a 

vehicle received a safety inspection in the previous 3 months. 

Second, we reported that a considerable number (26 of 50) of state officials 

responsible for coordinating motor carrier safety programs expressed one or more 

concerns about the demonstration project and 5 states indicated they were not 

ready to enforce demonstration project requirements. Despite issuing guidance 

and brochures on assessing English language proficiency and detailing cabotage 

rules, regulations, and procedures and initiating a train-the-trainer program, state 

concerns indicated that FMCSA should develop a feedback mechanism to ensure 

that critical information reaches roadside inspectors who enforce Federal safety 

rules. 

Third, we found that FMCSA implemented 3 of 34 provisions in Section 350(a) of 

the fiscal year 2002 Appropriations Act using language that differed slightly from 

what Congress had specified. The differences related to which trucks should be 

inspected during pre-authorization safety audits, which drivers should undergo 

electronic license checks at border crossings, and the inclusion of newer safety 

rules applicable to Mexican motor carriers. 

In its letter report to Congress, the Department addressed all of these issues. It 

provided Congress with site-specific plans to ensure that every truck participating 

in the demonstration project is checked at every border crossing; a quality control 

plan to document the extent to which FMCSA is able to achieve its goal of 

checking every vehicle at every border crossing; a Demonstration Project State 

Outreach Plan; and plans to address slight language differences between FMCSA 

implementation and legislative provisions. Enclosure 4 of the Department’s letter 

Exhibit B. Prior Audit Coverage 
 16

report to Congress addressed quality control measures to be used based on data 

acquired from CBP. 

OIG reports issued on this subject area are listed below. 

• OIG Report Number MH-2007-065, “Issues Pertaining to the Proposed 

NAFTA Cross-Border Trucking Demonstration Project,” September 6, 2007. 

• OIG Report Number MH-2007-062, “Follow-up Audit on the Implementation 

of the North American Free Trade Agreement’s Cross-Border Trucking 

Provisions,” August 6, 2007. 

• OIG Report Number MH-2005-032, “Follow-Up Audit of the Implementation 

of the North American Free Trade Agreement’s Cross-Border Trucking 

Provisions,” January 3, 2005. 

• OIG Report Number MH-2003-041, “Follow-Up Audit on the Implementation 

of Commercial Vehicle Safety Requirements at the U.S.-Mexico Border,” 

May 16, 2003. 

• OIG Report Number MH-2002-094, “Implementation of Commercial Vehicle 

Safety Requirements at the U.S.-Mexico Border,” June 25, 2002.

• OIG Report Number MH-2001-096, “Motor Carrier Safety at the U.S.-Mexico 

Border,” September 21, 2001.

• OIG Report Number MH-2001-059, “Interim Report on Status of 

Implementing the North American Free Trade Agreement’s Cross-Border 

Trucking Provisions,” May 8, 2001. 

• OIG Report Number TR-2000-013, “Mexico-Domiciled Motor Carriers,” 

November 4, 1999. 

• OIG Report Number TR-1999-034, “Motor Carrier Safety Program for 

Commercial Trucks at U.S. Borders,” December 28, 1998. 

Exhibit B. Prior Audit Coverage 
 17

EXHIBIT C. MAJOR CONTRIBUTORS TO THIS REPORT 

THE FOLLOWING INDIVIDUALS CONTRIBUTED TO THIS REPORT. 

Name Title 

Joe Comé Program Director 

Joan Becker Project Manager 

Chris Brothers Project Manager 

David Pouliott Project Manager 

Kimberley Bolding Senior Auditor 

Pat Conley Senior Auditor 

Tony Saraco Senior Auditor 

Gerry Sheeran Senior Auditor 

Maurice Toval Senior Auditor 

Kate Conway Analyst 

Constance Hardy Analyst 

Michael Masoudian Analyst 

Calvin Moore Analyst 

Anette Soto Analyst 

Scott Williams Analyst 

Tom Lehrich Chief Counsel 

Seth Kaufman Associate Counsel 

Petra Swartzlander Statistician 

Harriet Lambert Writer-Editor

Exhibit C. Major Contributors to This Report 
 

The following pages contain textual versions of the charts and figures found in this 

document. These pages were not in the original document but have been added 

here to accommodate assistive technology. 
 

Interim Report on NAFTA Cross-Border 

Trucking Demonstration Project 

Table: Projected versus Actual Participation as of February 25, 2008 

The table is a 2-column chart that compares the projected number of carriers and 

vehicles to those actually participating in the demonstration project as of 

February 25, 2008. The first comparison shows that 100 carriers were projected to 

participate in the demonstration project but 16 carriers had actually participated as 

of February 25, 2008. The second comparison shows that 540 vehicles were 

projected to participate in the project but 70 vehicles had actually participated as 

of February 25, 2008. 

Source: OIG analysis of FMCSA data. Data are for carriers granted provisional 

operating authority as of February 25, 2008. 

Figure: Comparison of Project Participants to All Applicants 

The figure includes three charts that compare the responses provided by the 

universe of all 723 applicants for long-haul authority to responses provided by the 

16 demonstration project participants that had participated in the demonstration 

project as of February 25, 2008. The comparisons are presented as percentages of 

all responses within each respective group, and total percentages for a group may 

exceed 100 percent due to rounding. The universe of 723 applicants includes the 

16 participants. 

The first chart compares responses of the two groups on their form of business 

entity. 

Corporation 37 percent of universe 44 percent of 16 participants 

Partnership 16 percent of universe 0 percent of 16 participants 

Sole Proprietorship 46 percent of universe 56 percent of 16 participants 

Other response 1 percent of universe 0 percent of 16 participants 

The second chart compares responses of the two groups on whether they currently 

operate in the United States. 

Yes 78 percent of universe 81 percent of 16 participants 

No 21 percent of universe 19 percent of 16 participants 

No answer 1 percent of universe 0 percent of 16 participants 
 

The third chart compares responses of the two groups on the number of vehicles 

they owned. The number of vehicles is presented in categories of from 1 to 5 

vehicles, 6 to 10 vehicles, 11 to 15 vehicles, 16 to 20 vehicles, more than 20 

vehicles, and no answer provided. 

1 to 5 vehicles 72 percent of universe 63 percent of 16 participants 

6 to 10 vehicles 7 percent of universe 13 percent of 16 participants 

11 to 15 vehicles 2 percent of universe 0 percent of 16 participants 

16 to 20 vehicles 0 percent of universe 0 percent of 16 participants 

More than 20 vehicles 2 percent of universe 13 percent of 16 participants 

No answer 16 percent of universe 13 percent of 16 participants 

Source: OIG Analysis of FMCSA data. Totals may exceed 100 percent due to 

rounding.