Trucking – the Most Important Mode of Transportation Among the NAFTA Partners
About 85 percent of merchandise value traded between the U.S. and Mexico is transported by trucks . The rest is transported by rail, ship or air. An impressive number of trucks cross the border on daily basis: in 2017, on an average day, trucks made more than 16,500 northbound crossings from Mexico to the U.S.  As only the northbound crossings are reported, the actual number of border crossings (not necessarily same as the number of trucks, as some cross multiple times) is likely to be double the reported figure.
Six of the 29 commercial land crossings between the U.S. and Mexico are in Arizona. These are, from west to east, San Luis II, Lukeville, Sasabe, Nogales-Mariposa, Naco, and Douglas. While our focus here is on the dynamics of truck crossings through Arizona’s BPOE and Arizona’s share of U.S. border states, let’s first briefly review the practical aspects of truck crossings. While these impressive figures for truck crossings mirror foremost the growing volume of traded goods within the NAFTA partners, they also reflect embedded inefficiencies due to restrictions on long-haul transportation outside national boundaries.
The Vision and the Reality of NAFTA Cross-Border Trucking
The vision of “seamless freight flow” across the U.S. - Mexico border, like that of a “borderless economy,” appears to be far from the reality of today. Both visions were laden with promises of great economic gains as a historical trade agreement between the U.S., Mexico and Canada was inaugurated in 1994. While agreements on key issues such as elimination of tariffs, rule of origin, and protection of intellectual property among others, were achieved among NAFTA partners, trucking across the U.S.-Mexico border has been a point of contention since the beginning. Specifically, restrictions on long-haul operations in the U.S. were imposed on Mexican trucks, and in retaliation, similar restrictions were imposed on U.S. trucking companies. At the core of the problem on the U.S. side was a concern about adequate safety of Mexican trucks and truckers for U.S. highway traffic, although the anticipated competition from a lower-labor-cost Mexican trucking industry played no small role. On the Mexican side, the trucking industry was concerned with increasing competition from technologically better equipped U.S. trucks and a more efficient trucking industry.
A Complex Border Crossing System
The gap between the vision and the reality of cross-border trucking was further exacerbated by higher security measures imposed by the U.S. government in the aftermath of the 9/11/2001 terrorist attacks. In spite of significant infrastructure improvements and technological innovations applied to border crossing and cargo inspection, the border crossing process for trucks crossing from Mexico into the U.S. remains complicated.
Besides filing shipment data with both Mexican and U.S. federal agencies, and facing potential physical inspections at three physical locations (Mexican Customs; U.S. Federal compound, and U.S. State safety inspection facility), Mexican truck shipments into the U.S. are required to use drayage or transfer tractor to cross the border. Typically, a shipper in Mexico uses drayage or transfer tractor to pick up a trailer on the Mexican side of the border and haul it into the U.S., where it is dropped off and picked up by a U.S. long-haul tractor that can carry the trailer further into U.S. territory . According to Texas A&M Transportation Institute’s research findings at El Paso and Laredo ports, the overwhelming majority of drayage vehicles were registered in Mexico . The data also suggested that trips from Mexican destinations were more common during morning hours, while the trips originating from the U.S. tended to occur in the afternoon. This may partially explain why drayage vehicles are predominantly registered in Mexico where they reside at warehouses or residences ready to pick up freight in morning hours.
A Slow but Gradual Progress
Early in 2015, and following a three-year pilot program that tested and validated the safety of Mexican trucking companies, the U.S. Department of Transportation announced that Mexican motor carriers would “soon” be able to apply for authority to conduct long-haul, cross-border trucking services in the U.S. . Currently, Mexican tractors are restricted in the U.S. to circulation in a narrow commercial zone extending to 25 miles from the border. On the other side of the border, a limited number of U.S. carriers provide long-haul services in Mexico. Most U.S. trucking firms offering services in Mexico do so through a partnership with a Mexican firm .
Nogales - Arizona’s Primary Truck Border Crossing
In 2017, trucks made 400,160 northbound crossings from Mexico into Arizona. Of those, more than 80 percent were facilitated through Nogales’ Mariposa border port of entry (BPOE). The number of crossings at Nogales increased from about 255,000 in the year 2000 to 334,000 in 2017 (Figure 1). Arizona’s two other commercial ports at San Luis and Douglas experienced declining numbers of truck crossings compared to early 2000, while the remaining three smallest ports - Lukeville, Naco, and Sasabe – accounted together for less than 4,000 truck crossings in 2017.
Figure 1. Border Truck Crossings from Mexico via Arizona BPOE
Source: AZMEX, Economic and Business Research Center
One of major reasons more trucks cross through Nogales than through other Arizona commercial ports has been the infrastructure improvements at the Mariposa BPOE, both in terms of the inspection procedures and number of lanes.
Nogales - Among Six Busiest Southern BPOE
Since the early 2000s, Nogales has maintained sixth place among the southern commercial BPOE between the U.S. and Mexico based on the number of northbound truck crossings. Ahead of Nogales, and with a larger number of truck crossings, are the commercial ports of Laredo, El Paso, and Hidalgo in Texas, and Otay Mesa and Calexico East in California. With more than 2.1 million crossings, Laredo is absolutely the busiest port for truck crossings from Mexico into the U.S., accounting for close to 40 percent of all northbound crossings (Figure 2). Laredo's exponential growth especially since 2010 can be credited, at least partially, to its favorable geographic location in the middle of one of the busiest trade corridors connecting northeast U.S./southeast Canada with central Mexico. The backbone of this corridor was built to facilitate advanced integration in car manufacturing among the three NAFTA partners. Known as the North American "automotive alley" it represents the largest concentration of automotive manufacturers, complex supply chains, and distributors. (For more on this topic read "Arizona and North America's "Auto Alley"" by this author.)
Figure 2. Border Truck Crossings from Mexico via Nogales, AZ, and Other Major Southern BPOE Number of Truck Crossings
Source: AZMEX, Economic and Business Research Center
However, when trends are compared to a base year 2000, it is truck crossings through Texas port of Hidalgo that expanded most (Figure 3). The number of truck crossings from Mexico via Hidalgo increased 65.8 percent compared to 2000, ahead of 46.2 percent via Laredo. A part of Hidalgo’s increase in truck crossings is associated with the expansion of Mexican fresh produce exports to the U.S., most notably of ever popular avocados.
Figure 3. Border Truck Crossings From Mexico via Major Southern BPOE, 2000=100
Source: AZMEX, based on BTS data
The Southwest Border Region: How Does Nogales Compare?
Whereas it is always tempting to compare Arizona’s Mariposa BPOE in Nogales with the fastest, largest, and best equipped southern ports such as Laredo in order to assess Nogales’ comparative progress, it makes more sense to compare it to ports in the southwest border region which share similar geographic characteristics.
In the southwest section, California’s ports at Otay Mesa and Calexico East, together with Arizona’s Nogales-Mariposa, are three main commercial crossings for trucks from Mexico. Note that in terms of number of truck crossings and general trend lines, Nogales and Calexico East are very close; in fact, the two lines in the charts (Figure 2 and Figure 3) overlap each other. Both trail behind Otay Mesa in terms of truck volumes and growth rates. However, neither Otay Mesa nor Calexico East show a widening gap relative to Nogales.
Seasonality – a Unique Border Crossing Pattern at Nogales BPOE
Two major economic activities define the pattern of northbound truck crossings from Mexico through the southern ports of entry: the maquiladora industry (now-days extended to include other export oriented manufacturing and service industries) and the production of fresh produce for export to U.S. and Canada. While transport of maquiladora products tends to be more evenly spread throughout the year, Mexican fresh produce from Sinaloa and Sonora is predominantly concentrated in winter months. Truck crossing statistics do not differentiate between trucks carrying manufactured products and those transporting fresh produce, but the impact of winter fresh produce is obvious in charts depicting monthly data (Figure 4).
Figure 4. Nogales BPOE, Monthly Truck Crossings (Northbound)
Source: AZMEX, based on BTS data
Aside from minor fluctuations, the basic pattern of doubling the number of truck crossings in winter months has not changed over the years (Figure 5).
Figure 5. Nogales BPOE, Monthly Truck Crossings Pattern by Year (Northbound)
Source: AZMEX, based on BTS data
Not only does Nogales’ bi-seasonal pattern differ from Hidalgo and Laredo ports in Texas, it also differs from Otay Mesa and Calexico East, both in California. For example, in 2017, the number of northbound truck crossings through Nogales port fluctuated between a high volume of 38,906 in May and a low of 16,191 truck crossings in July, a drop of 58.4 percent. Meanwhile, the difference between the highest and lowest monthly volume at Otay Mesa was 25 percent, and 15.6 percent at Calexico East.
Unique Challenges to Local and Regional Economies
Obviously, the pronounced seasonal character of truck border crossings at Nogales poses a multitude of challenges from uneven demand for staffing at inspection stations to low occupancy of warehouse spaces. While shippers, transporters, and distributors tend to shift their services during Nogales’ slower season to other border ports, local labor force is less mobile. Summer months in Santa Cruz County traditionally experience high unemployment rates.
Slow Progress and Uncertainty: “Losers” and “Winners”
As the process of re-negotiating NAFTA continues, any further discussions about long-haul services are being stalled. Numerous studies have estimated that billions of dollars are lost in both Mexico and the U.S. to companies that depend on drayage system in addition to costs due to wait time at the border. Concerns have also been raised about environmental impacts of idling on border communities . Yet, the current situation, deemed inefficient despite state-of-the-art infrastructure, brings substantial benefits to a large number of stakeholders from government institutions to interest groups. Among the beneficiaries are: the drayage industry, the Mexican brokers, U.S. financial institutions that finance the construction of warehousing, as well as, state and municipal governments on both sides who receive a share of payments for permits and custom taxes. And, by no means insignificant, is the effect on the entire regional economy that provides jobs, goods, and services.
 Pillar Londoño-Kent and Alan K. Fox, “Border Crossing for Trucks Twenty Years after NAFTA,” pp. 88-92, NAFTA at 20: Effects on the North American Market, 2914. The Federal Reserve of Dallas. Dallasfed.org/-/media/Documents/reseach/pubs/nafta20/nafta20c15.pdf
 U.S. Department of Transportation, Bureau of Transportation Statistics (BTS).
 Farzaneh, Reza et al., Characterization of cross-border heavy-duty drayage activity in the Laredo-Nuevo Laredo airshed, Texas A&M Transportation Institute, 2014. docs.trb.org/prp/17-03753.pdf
 “United States to Expand Trade Opportunities with Mexico through Safe Cross-Border Trucking,” U.S. Department of Transportation, January 9, 2015. Fmsa.dot.gov/newsroom
 John Frittelli, Status of Mexican trucks in the United States: Frequently asked questions, Congressional Research Service, R41821, January 3, 2014. www.crs.gov