Surety Bonds Help Drive U.S.-Mexico Trucking Agreement

Trucking various goods between the U.S. and Mexico will become much cheaper and easier in the very near future. A cross-border trucking agreement between the U.S. and Mexican governments has been negotiated allowing truckers to venture deeper in to both countries making the requirement of a freight broker surety bond inevitable.

The U.S.-Mexico three-year trucking agreement will finally allow trucking companies from both countries to enter their neighboring nation beyond the 25 mile limit that’s currently in place. Before this agreement, Mexican trucks were rarely authorized to enter farther than the established limit on the U.S. side of the border. As a result, Mexico had applied higher tariffs on a variety of U.S. products. With this new agreement in place, the Mexican government has agreed to revoke the tariffs saving the U.S. hundreds of millions of dollars.

Though it’ll still be months until truckers start using the new routes, measures are being taken to ensure the necessary requirements will be in place to support the success of the agreement. The requirements will include a surety bond that is written by an American surety company. The freight brokers will also have to keep aboard electronic-monitoring systems and will be subject to various tests and inspections done by the Federal Motor Carrier Safety Administration.

The trucking agreement will open up opportunities for both Mexican and U.S. freight brokers, but there are also concerns; there to remedy any concerns are some essential requirements. The surety bond that will be required of the truckers crossing borders guarantees the payment of freight carrier charges to the truckers hauling the goods and the payment of the goods themselves. If a claim goes out on the bond for not following the rules, the surety will pay the claim initially but then will go to the freight broker who must reimburse the surety. The surety bond amount is yet to be determined. The FMCSA will also regulate the drivers using, as stated above, electronic monitoring systems and must participate in English/Spanish language tests and narcotics screenings.

“By opening the door to long-haul trucking between the United States and Mexico, America’s third largest trading partner, we will create jobs and opportunity for our people and support economic development in both nations,” said Ray LaHood, the United States Secretary of Transportation.

U.S.-Mexico cross border freight hauling has been an issue for years despite the associated benefits. Now that an agreement has finally been signed, new paths will open up for freight brokers in Mexico and the U.S. which will produce jobs and promote overall growth for both countries.