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Chapter 4: Recommendations

Based on its observations and findings, the scanning team developed a number of recommendations. The observations, conclusions, and recommendations are those of the scanning team and not of FHWA.

Recommendations for Further Studies

  1. International trade-Latin American trade in particular-has a dynamic relationship with the economic health of national economies and the global trade patterns that result. Studies of Latin American trade have usually examined the historical trends in trade by commodity and product type, but have not often reflected changing global and hemispheric market factors that will likely have significant impacts on the future volume and composition of this trade. For example, the Mexican maquiladora industries face significant competition from China and other Asian countries. In the textile industry, Mexico is losing competitive advantage (i.e., its position as a lowwage country) to Honduras, China, and India. In addition, Mexican government officials want to evolve to a higher-value manufacturing economy that will raise the living standard for its citizens. These changes will have important consequences for trade forecasts with Canada and the United States. They also could have significant impacts on the hemispheric logistics system and the need for corresponding transportation infrastructure. The scanning team recommends further study of these dynamics and the related impacts on the performance of the transportation system. This, and related information, should be incorporated into professional and organizational development activities for State DOTs.
  2. Scanning team members were impressed by the rapid change in trade flows and market presence that has occurred in several Latin American locations, perhaps represented best by the new container port in Freeport, Bahamas. The team recommends that monitoring of the Latin American market continue, given the rapid introduction into the market of new players. The team recommends that institutional mechanisms be developed to guarantee that the best available information is provided to State DOTs, which typically play a large role in domestic transportation systems development.
  3. Many forms of international trade agreements have been implemented throughout the world, ranging from strategies to simplify tariffs to efforts to develop a borderless common market. In the context of Latin America, free trade agreements have been used by many countries to establish trade advantages within the global market. The private sector and, in particular, global corporations in the transport industry drive trade patterns to a great extent. A better understanding is needed of the different types of trade agreements, the impact of these agreements on trade, and the implications for transportation infrastructure. The team recommends that a clearer picture of the players in these agreements and their roles be developed and incorporated into the efforts of transportation agencies to engage more effectively with Latin American trade.
  4. The scan did not examine in detail the trade dynamics of the Central American and Caribbean market, but this is an important market, especially for the United States. The scanning team recommends that a similar study be undertaken to understand the dynamics and potential of this market and the role the Caribbean plays and will play in filling a transfer function for freight from all quadrants.
  5. The Central American and southern and eastern Mexican markets appear to have potential for creating a sea bridge with the U.S. Gulf Coast. Some services have been tried already, some successful and others too early to say. The team recommends a feasibility study of using the Gulf of Mexico for serving NAFTA trade that explores factors that would make such services successful.
  6. Enhanced security was an issue discussed by both government and private sector officials at every site visited. Better understanding of supply chain logistics and more intense security provisions are important points of departure for understanding likely future trade flows. For example, some countries (e.g., Chile and Uruguay) view themselves as security gateways to NAFTA because of their ability to provide better levels of security for cargo heading to North America. If this turns out to be the case, it could have important implications not only for these countries, but also for the types and levels of infrastructure provided at the destination ports. The team recommends that the NAFTA countries work closely with Latin American countries, port authorities, and shippers to make sure they are aware of security requirements and to coordinate responsive strategies.
  7. Border issues were an important component of every discussion that focused on providing greater efficiency and productivity in international freight movement. This was especially true in Mexico. The United States and Canada have had a long and effective relationship in making the border safe, secure, and efficient, allowing for important inspections and security checks to occur while at the same time providing for efficient movement of vehicles and passengers. This experience of deconstructing the border with Canada should be examined for lessons learned that could be applied to the U.S.-Mexican border. The NAFTA countries clearly face institutional, financial, and technological border challenges. The team recommends that a study be undertaken on what has worked on the U.S. border and how these lessons could be applied elsewhere.
  8. The U.S.-Mexican border provides unique challenges for international trade and security. Numerous government agencies are involved in managing the border. With the creation of the U.S. Department of Homeland Security, some of these agency functions may be consolidated and thus cause fewer delays at inspections. Shippers and private providers of transportation, however, are much more in tune with planning, operations, and logistics needs of customers, and therefore of important transportation network needs. The team encourages private sector involvement in developing border strategies, including a business plan for the border. This initiative could be supplemented with best practice case studies that could be incorporated into freight professional capacity-building programs.
  9. The scanning team visited two types of ports- those that focus primarily on export and import flows and have important positive economic impacts on a national and regional economy and those that focus on transshipment of cargo. As container ships become larger, new transshipment ports (such as Freeport) will most likely gain in importance because larger ship sizes cannot be handled in existing ports without major improvements. The team recommends a study that examines the national, regional, and local economic impacts of such transshipment ports and provides observations on the benefits and costs of such facilities.
  10. The use of performance measures in transportation planning and decisionmaking is an important element of cost-effective transportation investment. The NAFTA countries have evolved over the past several years to a strategic corridorgateway concept for enhancing the productivity of NAFTA trade. The team recommends that the performance measures that can best reflect the logistics and transportation problems of such corridors and gateways be identified and incorporated into the operations of State DOTs.
  11. In every country visited, strategic data collection and analysis were lacking (the same could be said of the United States). The team recommends that the NAFTA countries provide advice and support for developing organizational capabilities in Latin American countries similar to Statistics Canada or the U.S. Bureau of Transportation Statistics.
  12. Given the importance of the Latin American market to the NAFTA countries, technical exchanges on topics such as finance, professional development, and multimodal transportation planning would be an important means of building institutional capacity with Latin American trading partners.

Other Issues

Although the purpose of this scan was to examine the characteristics of trade flows between NAFTA and Latin American countries, the scanning team identified many other transportation-related issues of interest to the North American transportation community. In some cases, these issues relate to freight and trade movement, but they go beyond this topic. Issues of interest include the following:

Truck size, weight, and safety characteristics- Several countries are struggling with providing consistent regulations on truck size, weight, and safety characteristics. This is especially true in the Mercosur countries, where the member nations have attempted to provide such consistency. This has been a challenge because the national trucking firms have resisted any attempts to require, in their opinion, more costly equipment for cross-border transport.

Highway safety-The scanning team heard a great deal about the high accident levels on highway networks. This was attributed to limited highway designs through difficult terrain; poor drivers' license requirements, education, and enforcement; and inadequate traffic control strategies and devices.

Intelligent transportation systems-Almost every transportation official the scanning team met with mentioned the potential application of ITS technologies to improving transportation system performance. Little application has occurred, however, except in the limited case of several ports and in the use of electronic fare collection on toll roads.

Data collection and analysis-Only a small number of the government agencies the team met with had national data on trade flows. In fact, several commented that insufficient data collection and analysis are hindrances in their attempts to develop a more rational transportation policy that reflects market conditions.

Urban congestion-Because many Latin American cities evolved around their seaports, much of the distribution of international freight must occur in highly congested urban conditions. Many Latin American cities are large and have inadequate road and public transport systems. Although these cities have done an admirable job of providing public transport services to handle huge passenger flows, there is likely a fruitful market for better transportation planning and engineering in these locations.

International Customs Cooperation: Toward Secure Trade
  • Harmonization of hours of operation
  • Information exchange
  • Industry initiatives
  • Exchange of low-risk importer lists
  • Electronic exchange of information
  • Electronic locks
  • Rail imaging
  • Electronic tracking devices

Finance-Transportation finance is a critical concern to Latin American officials. Unlike the United States,
many countries do not have a dedicated funding source for roads or other transportation modes. Transportation investment must compete with the many other formidable needs facing these countries. In most cases, transportation investment does not come out on top in this competition. A much broader perspective is needed on the different types of strategies that can be considered for transportation finance.

Professionalism-The scanning team met with talented and knowledgeable representatives of both private operators and the government. In many cases, however, these officials lamented the lack of professionalism in the transportation industry and in public service. This had a lot to do with the low level of importance attached to transport in Latin American government circles and, to some extent, the lack of training opportunities and transportation-related educational programs.

Human resources-Many participants in the scanning team's meetings commented on the need for better-trained transportation professionals, especially younger engineers and managers. Although it reflects the region's culture and protocol, it was striking that most government officials the team met were over 50 years old, and most port and terminal operators were in their 30s and 40s. Human resource development is an important need.

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Page last modified on November 7, 2014
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