Document ID: FMCSA-2007-28055-2456
Agency: fmcsa
Document Type: Rule
Title: Demonstration Project on NAFTA Trucking Provisions
Posted Date: 2008-08-06T04:00Z

[Federal Register: August 6, 2008 (Volume 73, Number 152)]
[Notices]               
[Page 45796-45797]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr06au08-119]                         

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DEPARTMENT OF TRANSPORTATION

Federal Motor Carrier Safety Administration

[Docket No. FMCSA-2007-28055]

 
Demonstration Project on NAFTA Trucking Provisions

AGENCY: Federal Motor Carrier Safety Administration (FMCSA), DOT.

ACTION: Notice of extension of demonstration project.

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SUMMARY: FMCSA announces the extension of the demonstration project 
allowing up to 100 Mexico-domiciled motor carriers to operate beyond 
the U.S. border commercial zones, and the same number of U.S. carriers 
to operate in Mexico, from one year to the full three years allowed by 
statute, 49 U.S.C. 31315. Reciprocally, Mexico has agreed to allow 
U.S.-domiciled motor carriers in the demonstration project to continue 
to operate in Mexico for up to three years.

DATES: This notice is effective upon publication.

FOR FURTHER INFORMATION CONTACT: Mr. Milt Schmidt, Division Chief, 
North American Borders Division, Federal Motor Carrier Safety 
Administration, Telephone (202) 366-4049; e-mail milt.schmidt@dot.gov.

SUPPLEMENTARY INFORMATION: Secretary of Transportation Mary E. Peters 
and Mexico's Secretary of Communications and Transportation Luis Tollez 
Kuenzler announced a demonstration project to implement certain 
trucking provisions of the North American Free Trade Agreement (NAFTA) 
in February 2007. The project was expected to last one year. FMCSA's 
notice inaugurating the project stated that ``[t]he demonstration 
project has a one-year limit'' (72 FR 23883, 23884, May 1, 2007).
    Shortly thereafter Congress required the Department of 
Transportation (DOT) to satisfy a series of new conditions before 
starting the demonstration project. See section 6901 of the ``U.S. 
Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007'' [hereafter: ``Iraq 
Supplemental''], Pub. L. 110-28, 121 Stat. 112, 183, May 25, 2007. 
Section 6901 imposed limits on DOT's use of appropriated funds to grant 
authority to Mexico-domiciled motor carriers to operate beyond the 
border commercial zones. In particular, section 6901(a) required that 
the granting of such authority be tested as part of a pilot program 
meeting the requirements of 49 U.S.C. 31315(c) and that the pilot 
program also comply with the requirements of section 350 of Public Law 
107-87 (115 Stat. 833, 864, December 18, 2001). Section 350, enacted by 
the 2002 DOT Appropriations Act and reenacted in every subsequent 
annual DOT appropriations act, set forth additional requirements FMCSA 
must meet as a condition of granting Mexico-domiciled motor carriers 
authority to operate in the United States. A pilot program under Sec.  
31315(c) must include, among other things, a ``scheduled life * * * of 
not more than 3 years.''
    As demonstrated in the Federal Register notices of June 8 and 
August 17, 2007 (72 FR 31877 and 72 FR 46263, respectively), FMCSA met 
all of the conditions established by section 6901 of the Iraq 
Supplemental, including compliance with section 350. The demonstration 
project was initiated on September 6, 2007, after Secretary Peters 
submitted to Congress the Department's response to the report by the 
DOT Office of Inspector General verifying compliance with section 350, 
as required by section 6901(b)(1) and (b)(2)(A). FMCSA issued 
provisional operating authority to the first Mexico-domiciled motor 
carrier the same day. However, uncertainties concerning the length and 
viability of the demonstration project may have deterred a significant 
number of carriers, both from Mexico and the United States, from 
seeking to participate in the project. For example, many Mexico-
domiciled motor carriers who previously expressed an interest in 
operating beyond the border commercial zones have not pursued such 
authority through the demonstration project. Additionally, we have been 
advised that other Mexico-domiciled carriers who received approval for 
project participation are not participating because they are reluctant 
to incur substantial costs related to obtaining insurance to operate in 
the United States and developing a customer base for long-haul 
operations, in the face of these uncertainties. The result is that the 
number of Mexico-domiciled carriers operating under the

[[Page 45797]]

demonstration project is smaller than expected: currently, 27 carriers 
are operating 107 trucks. Although these carriers have made 9,983 trips 
into the United States, most of these carriers had destinations in the 
commercial zones; they have performed 1,272 long-haul trips beyond the 
border zones. Concurrently, many U.S.-domiciled motor carriers have 
expressed concern at the high cost of maintaining an official legal 
representative in Mexico, especially due to their belief that a minimum 
of two years is needed to develop sustainable business relationships 
with Mexican shippers. This has resulted in a limited number of U.S. 
carriers participating in the demonstration project. At the moment, 
only 10 U.S. carriers are participating and they are operating only 55 
vehicles. They have made 2,245 trips across the Mexican border.
    In order to ensure the demonstration project can be reviewed and 
evaluated on the basis of a more comprehensive body of data, FMCSA has 
decided to extend the project from one year up to the full three years 
allowed by statute. The U.S. and Mexico will continue to limit the 
project to a maximum of 100 of each other's motor carriers and will 
provide for reciprocal authority. In addition, the U.S. will require 
participating Mexican carriers and drivers to comply with all 
applicable U.S. laws and regulations. The extension will enable FMCSA 
to collect and analyze a larger volume of safety and operational data, 
which is the fundamental goal of the demonstration project. We believe 
an extension will provide non-participating motor carriers, both in 
Mexico and the United States, added incentives to join the project, 
knowing that their investment in long-haul foreign operations will have 
more time to mature and become profitable.

    Issued on: July 31, 2008.
John H. Hill,
Administrator.
[FR Doc. E8-17946 Filed 8-4-08; 9:15 am]

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