In 1994, the North American Free Trade Agreement (NAFTA) opened up trade across the continent, between Canada, The United States, and Mexico. Commercial trucking companies have seized growth opportunities ever since, expanding their businesses cross-border. Many motor carriers transport goods far beyond the border to their final destination. There are many differences between the United States and Mexico, including road conditions, driving laws, and insurance policies, presenting an unavoidable risk to carriers who operate across both countries. As such, commercial trucking companies should be aware of what they need and what they can do to operate safely and legally.
Requirements For American-Owned Trucking Fleets To Operate Within Mexico
The Federal Motor Carrier Safety Administration (FMCSA) states on its website: “The Secretaría de Comunicaciones y Transportes (SCT) regulates truck traffic in Mexico and it has established a program to allow U.S. motor carriers to provide long haul trucking services. The requirements for registering and contact information may be found on the SCT web site.”
Insurance policies issued in the United States are not valid in Mexico. Many American motor carriers are unaware of this and will unwittingly take full liability of the cargo upon entering Mexico.
Moreover, there is a large difference in the amount of liability coverage provided by Mexican and American insurance companies. As such, many American trucking companies will outsource the logistics of delivery from the Mexico—United States border to the final destination to a Mexico-domiciled carrier that has its own trucking insurance coverage.
Requirements For Mexico-Domiciled Trucking Fleets To Operate Within The United States
The commercial trucking zone between the United States and Mexico is only 25 miles beyond the border. To operate within the commercial zone only, Mexico-domiciled motor carriers are required to have a US DOT number, FMCSA-assigned MX number, and a valid FMCSA Certificate of Registration for commercial-zone operations.
To operate long haul trucking services, which are beyond the commercial zone within the United States, Mexico-domiciled motor carriers are required to have a US DOT number, FMCSA-assigned MX number, and valid FMCSA long-haul Provisional or Standard Operating Authority Registration.
Carriers who operate without authority are subject to fines. Mexico-domiciled motor carriers must also have insurance and proof of financial responsibility in order to operate in the United States. Long haul operators will need to pass a Pre-Authorization Safety Audit (PASA) and submit to the FMCSA evidence of insurance that meets the minimum requirements of the Code of Federal Regulations. Operating within the commercial zone requires daily trip insurance, which is less expensive than the insurance required of long-haul operators.
United States And Mexico Cross-Border Trucking Insurance
At SWAN Insurance, our experts can advise you on meeting the requirements to operate in both the commercial zone and beyond, which include passing safety audits and having operating authority and a suitable insurance policy. This article is not an exhaustive list of all cross-border operating requirements; we highly recommend speaking to our trucking insurance advisors to learn more.
Regardless of what country you are physically operating in, you need to keep your freight moving to minimize costly delays while also protecting your business from risks like damage or theft.
If you have questions about acquiring operating authority or meeting insurance requirements to transport cargo cross-border, give us a call today.
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