U.S. Department of Transportation
Federal Highway Administration
1200 New Jersey Avenue, SE
Washington, DC 20590
202-366-4000
The purpose of this international scanning study was to identify the following:
Issues that relate to freight security on imports and exports to NAFTA countries.
Latin American countries' experience with such issues as interoperability, standardization, equitable taxation and pricing, and planning and financing traderelated transportation infrastructure. The scanning team was particularly interested in the Mercado Commún del Sur (Mercosur) countries of Brazil, Argentina, Uruguay, and Paraguay and the challenges they face in developing a trade market.
Panel members reflected a diverse set of interests in both national and international freight movement. The Federal Highway Administration (FHWA) and the American Association of State Highway and Transportation Officials (AASHTO) jointly sponsored the scan. In addition to FHWA and AASHTO officials, the panel included representatives of the national ministries of transportation for Canada and Mexico; the departments of transportation (DOTs) for the States of Florida, Louisiana, and Mississippi; the metropolitan planning organization for the San Diego, California, metropolitan area; the U.S. Transportation Security Agency (TSA); the Latin America Trade and Transportation (LATTS) study; and academia. Panel members represented expertise in the areas of policy, planning, security, freight logistics, and economic development.
The panel targeted government agencies, terminal operators, logistics providers, and shippers to gain a broad understanding of how selected Latin American countries have been dealing with trade issues and the provision of transportation infrastructure, and how
shippers and producers have been responding. Two pre-meetings were held in New Orleans, Louisiana, and Miami, Florida, to meet with both shippers and government officials with experience in Latin American trade. From October 30 to November 17, 2002, the panel then visited Freeport in the Bahamas, São Paulo and Santos in Brazil, Buenos Aires in Argentina, Montevideo in Uruguay, Santiago and San Antonio in Chile, and Panama City and Colón in Panama. From December 3 to 7, 2002, several panel members visited Mexico to obtain more information and participate in an implementation event.
The limited time of the scanning study necessarily constrained the number and representation of those with whom the panel met. The panel did not meet with groups that could have provided a broader perspective on the issues facing the development of the Latin American market, such as national railways, inland water and coastal shipping firms, and manufacturing and industry trade groups. In addition, the panel did not meet with non-government organizations representing environmental protection and sustainability issues. Over two-and-a-half weeks, however, the scanning panel met with more than 100 people representing a good cross section of the organizations and groups most involved in increased trade with NAFTA countries.
Lessons from this experience could be relevant to the United States, Canada, and Mexico in developing a common North American market. In addition, these lessons are important for national and regional investment decisions as they relate to enhanced freight movement within individual countries, serving primarily the domestic market. The rapid development of Panama as a logistics center, for example, and the possible expansion of the canal's capacity could have significant impacts on the competitive market for agricultural products at the global scale.
New Orleans-Although the New Orleans meeting was not part of the scan, the Port of New Orleans and the Louisiana Department of Transportation and Development organized it to provide briefings for team members by individuals and firms that have done business with Latin America. Key observations included the following: 1) Latin America has been an important market for southeastern U.S. ports for many years; 2) Brazil dominates Latin America's economic market; 3) New Orleans and other U.S. ports expect increased trade flows because of free trade agreements; 4) the economic woes of Latin American countries have affected international investment in infrastructure and economic activities; 5) political uncertainty in some countries (e.g., Brazil and Argentina) has caused some concern in the investment community; 6) the agricultural hinterland of Brazil served by the Rio Paraña and connected to the Atlantic by the Rio Plata will have a significant effect on the U.S. agricultural industry, especially in the production of soy; and 7) security measures at U.S. ports have been heightened since the events of September 11, 2001, and will continue to be for all trade, especially Latin American trade.
Freeport, Bahamas-This visit focused on the new Hutchinson Container terminal that began operation in 1997 and primarily handles transshipments (99 percent of the containers moved). The growth in the number of containers transshipped is impressive. The terminal handles 800,000 20-foot equivalent units (TEUs) a year, with an expected increase to 1 million in 2003 and 2.5 million in 2004. The port is positioned to handle east-west traffic as well as feeder services into the United States. No conflict appears to exist between southeastern U.S. ports and the Freeport operations (although Freeport officials believe that Kingston, Jamaica, and Cuba could be their major competitors in the future). Indeed, Florida port officials view Freeport as an asset. In addition, the container port is part of a much larger economic development strategy that includes an airport, free trade zone, and tourist sites. The Freeport container port also illustrates the rapid introduction into the market and subsequent impact that private operators can have under a concession arrangement with Latin American governments.
Miami-Much of the freight movement through Florida ports originates in or is destined for Latin America (65 percent of the movement through the Port of Miami, for example). An economic study for Florida ports suggests that trade will double in five years, and that passenger cruises will increase between 8 and 12 percent a year over a similar time frame.
Most of the increase in trade and passenger cruises will be in the Caribbean basin. A key challenge for Florida ports is rail and highway access, an issue pointed to by many port officials as a leading constraint to increased freight movement through Florida ports. In response to these and other needs, Florida has created a Transportation Finance Commission that provides funding for port improvements with a local match provision. Representatives at this meeting strongly recommended development of an international trade policy for the United States that ties trade flows into market and transportation investments.
São Paulo and Santos, Brazil-Brazil faces significant economic and political uncertainty with an ongoing economic recession and the election of a new president. Even with such uncertainties, Brazil will continue to be a major player in hemispheric trade, if for no other reason than the size of its market. Like other Latin American countries, Brazil has used different privatization strategies to provide additional transportation infrastructure, including highways, railroads, and port facilities. With the economic problems the country faces, however, the highway and railroad concessions face significant difficulties getting a return on their investment. North America is viewed as an important growth market for Brazilian goods. The agricultural industry in Brazil is looking to Asia as a major market for its products, especially if the Panama Canal is widened to allow larger ships. Participants did point out that significant vehicle delays occur at the borders because of the numerous agencies involved in customs, health, and safety inspections. Not much integration is apparent among different modes of transportation, although corridor studies have been undertaken, primarily to determine the feasibility of toll roads. Although the national government provides funds to build roads, much of this investment goes to rural states, so more urban states like São Paulo provide their own funding for road investments.
The Port of Santos is the largest port in Brazil and handles the majority of international cargo. Port terminals, which have been privatized, have seen substantial investments from terminal operators. Access and distribution within the port are two important issues. The port operates 24 hours a day because of congestion, and is considering an internal truck-only road to provide more efficient movement of trucks. A strategic plan for the port includes channel deepening, application of intelligent transportation systems (ITS) technologies, truck storage facilities, and creation of a free trade zone. Port officials are concerned about new security clearance requirements that might entail increased investment in new equipment, although some expect that terminal operators would shoulder the burden of increased costs. Privatization of port activities has had a significant impact on productivity, resulting in a loss of jobs in the port itself.
Buenos Aires, Argentina-A weak economy and a continuing fiscal crisis have led to great uncertainty in Argentina about future trade. Unlike Brazil and Uruguay, Argentina is focusing on regional trade, and not as much on global or even hemispheric trade. As one of the leaders in privatization in South America, it is not surprising that Argentina's transportation system relies heavily on concessions. Given the economic downturn, however, many of these concessions are having a difficult time recouping their investment. Without a stable transportation funding source from the government, little investment in transportation for either expansion or maintenance appears to be occurring. It is not clear during this time of uncertainty about who will become president (Argentina faces national elections) what national policies will be developed on such investment. As a Mercosur member, Argentina has experienced the problems at border crossings mentioned by others. In addition, rail gauges are different in many international corridors, further exacerbating the cross-boundary movement of trade. A corridor perspective is being considered for investment purposes once funding becomes available. Because of the location of the Port of Buenos Aires on the Rio Plata, dredging is a key issue, as is port access. Port officials also expressed concern about increased security costs for container movements.
Montevideo, Uruguay-Uruguay is fully aware of its location between two much larger countries, Argentina and Brazil, and that its economic success depends to a large extent on what happens in these countries. The Port of Montevideo views itself as an emerging logistics center in South America, with private terminal operators providing much of the investment in port facilities. Like Freeport, many port terminals have been able to put significant capabilities in place in a short time to take advantage of the competitive market. Uruguay has a good road system that connects to the borders, but border-crossing delays were mentioned as a significant problem. Mercosur has had problems getting member countries to develop consistent procedures that will foster more efficient cross-border movements. In addition to the port, a major free-trade zone in the Montevideo suburbs called Zonamerica is becoming an important distribution center for the Southern Cone countries. Uruguay-Montevideo in particular-wants to expand its market influence, and is looking to Asia, Europe, and North America for market opportunities. Officials
suggested that increased security requirements could be viewed as a niche market for the Port of Montevideo, with high security levels making it a desirable gateway into the NAFTA market.
Santiago and San Antonio, Chile-Because of its location at the tip of South America, Chile has had to adopt an aggressive strategy for being part of global trade. With a heavy reliance on mining, Chile has developed a strong export business in raw materials. Now, however, Chile is trying to become a logistics service center for the Southern Cone countries. Major highways (about 2,500 kilometers out of 16,000 kilometers of paved road), airports, and ports have been privatized through concessions. A national restructuring of ports several years ago resulted in the nation's ports being run in a semiautonomous fashion, with port terminal operations under private management. Chile-along with Argentina-has been trying to provide investment in cross-Andes travel corridors, especially rail, but the investment climate has been weak. Border crossings were mentioned in Chile as being a serious constraint to trade. National officials look to the NAFTA, European, and Asian markets as key trading partners, and are anxious to have a free trade agreement with the United States and become a NAFTA member.
The Port of San Antonio is one of newest and most modern in Chile. It handles all forms of freight and has become a leading Chilean container port. From 1990 to 2001, the number of TEUs handled rose from 50,000 to 420,000. The primary markets for the port are Asia, North America, and Europe. The port has expansion plans that will allow it to handle bigger container ships and to provide more of a distribution service to the Southern Cone countries. Port officials expressed concern about new security procedures, but, as in Uruguay, suggested that high-quality security at the port could make it a desired gateway to the NAFTA market. The rapid expansion of this port and the proposed plans indicate the short timeframe that many Latin American port terminal operators can operate under to make an impact in a market.
Panama City and Colón, Panama-Panama, one of the most important crossroads of global trade, has taken steps over the past five years taken to become an even bigger player in international commerce. The most important asset in this strategy is the Panama Canal. When the United States turned the canal over to Panama in 1999, the economic strategy changed as well. While the United States viewed the canal primarily as a strategic defense facility, Panama considered it an important economic resource that could be used to attract development. As a result, since 1999 major new container ports have been built on both coasts, free trade zones have been created, and the combination of being a nexus of fiber-optic cables and a center of commerce has created a service-oriented perspective in the government and private sector. The significant passage of the world's commerce through the canal (close to 15,000 ships, of which about 9,000 are going to or from a U.S. seaport) has also raised security issues. As one U.S. official noted, Panama is the most important security challenge for the United States after Canada and Mexico.
The Canal Authority is planning enhancements to the canal that would allow the passage of post-Panamax ships. Providing for larger ships would have a significant impact on the global market. For example, several officials mentioned that larger ships passing through the Panama Canal would allow Brazil to better compete in the Asian market with its growing agricultural industry (at the likely expense of the United States).
Other observations from the visit to Panama include the importance of free trade zones as centers of hemispheric logistics, the need for improved road infrastructure to complement an effective sea-based transportation system (including improvements to the Pan American Highway), the extent of cross-border delays and barriers because of inefficient customs and security strategies, the role of Mexico as a leader in developing a Central America-focused investment program, and the use of port terminal concessions that allow private operators to develop infrastructure quickly and efficiently.
Mexico City and Querétaro, Mexico-Mexico is a critically important trading partner for the United States and Canada. Not only does the Mexican market represent a significant portion of the imports and exports for both countries, but the Mexican transportation system also is becoming an important means of shipping international (non-Mexican) goods into the United States. Efficient logistics and integrated intermodal transportation corridors receive the attention of many Mexican government officials and private shippers. The Mexican economy faces serious challenges from other countries, primarily in Asia and Central America, for goods that are competitive primarily because of low wages. It is now cheaper to produce and transport some goods from China to the United States than it is from Mexico. Mexican officials believe that to remain competitive in the global market, they must take advantage of their proximity to the world's largest consumer market, and compete with more efficient transportation and logistics services. Improved logistics, along with enhanced security procedures, would maintain or even enlarge Mexico's trading partnership with the United States. An example of the possibilities in enhanced, security-conscious logistics is the TransPacific Multimodal Security System (TPMSS). Originally created as a showcase for the Asian-Pacific Economic Cooperation Forum meeting held in Mexico, TPMSS demonstrated the feasibility of making significant improvements in transport time from Asia to internal U.S. markets by transporting goods to Pacific Mexican ports and then moving the goods by rail to the U.S border. Advanced monitoring systems, security measures, streamlined customs procedures, and transportation service improvements were made to illustrate the economic potential of such movements.
The border (broadly defined to include customs, immigration, safety inspections, and infrastructure) with the United States is viewed as a significant logistics barrier. Mexican officials welcome recent U.S. decisions to open the border to Mexican trucks, but they are concerned about how this is being accomplished (e.g., state inspections of Mexican trucks seem, in some cases, to be overly rigorous). Much of the trade moving across the U.S. border is in trucks. Mexican railroads have begun to make infrastructure improvements and are participating in interservice agreements with U.S. railroads. Intermodal service is in its infancy in Mexico, however, and will likely take some time to expand. Coastal and Gulf maritime shipping have important potential, especially from the southern Mexico and Central American markets into the Gulf ports. Significant improvements are being planned and implemented in Mexican ports on both the Gulf and Pacific coasts.
Other key issues discussed in Mexico include the following: 1) developing a strategic perspective on logistics and transportation in the context of the North American market; 2) harmonizing equipment standards; 3) analyzing the concept of deconstructing the border as has been done on the U.S.-Canadian border; 4) providing improved logistics with enhanced security; 5) developing trinational data collection and analysis capability for system, corridor, and modal transport activity; 6) developing system or corridor performancebased analysis and decisionmaking; and 7) possibly engaging the private sector in pushing for border improvements.
The following lessons result from this scan:
1. The global market and logistics chain respond to many influences, only some of which relate to infrastructure owned and operated by public agencies. Understanding the motivation of logistics decisions and their local implications is a critical point of departure for a national or multinational effort to foster and prepare for trade. Panel members heard from both shippers and government officials about the need for a broad or global systems perspective in understanding trade flows. The countries that adopt this vision-places like Chile, Panama, Brazil, and, to a lesser degree, Uruguay-will be more successful than those that do not.
2. Perhaps the most significant observation from this scan is the changing nature of Panama as an emerging hemispheric logistics center, based on its location as a major maritime crossroads. In a relatively short time, since the transfer of canal ownership to the Panamanians in 1997, Panama has become the location of new major container terminals, and has created new free trade zones as major inducements to foreign investors. From information gathered during this scan, it seems likely that Panama will be even more influential in global trade flows serving the NAFTA countries. It is unclear what impact proposed improvements to the canal that would allow bigger ships to pass would have on the NAFTA countries, the United States in particular. Such a development might create the demand for more transshipment ports outside U.S. territory to provide feeder services to the United States, or a demand for increased capacity at U.S. ports. It might mean a shift in market characteristics that hurt NAFTA interests (e.g., making Brazilian agricultural products more competitive with NAFTA products in the Asian market). This issue should get more attention.
3. Within the context of global east-west container movements in the western hemisphere and the need for transshipment locations in the Caribbean or along the GulfAtlantic Coast, the major players in the transshipment business consider Cuba as a potential threat or opportunity. Havana and other Cuban ports are ideally located to provide such service and have excellent port potential. Although it is unclear what will happen with an administration change, it is likely that Cuba will be a major gateway to the Caribbean in several decades.
4. Levels and patterns of trade are directly related to patterns of economic growth, production, and consumption. The recent economic downturn has affected global trade, and it is unclear what the immediate future holds. Over the long term, the LATTS forecasts, which indicate a tripling of trade from Latin America, should be reexamined at a commodity-specific level, particularly because of changes under way in the Mexican economy (e.g., losing maquiladora plants to Asia). In addition, real potential appears to exist for enhanced Gulf of Mexico and Pacific Coast maritime services into the United States for certain commodity types.
5. Given governmental policies on planning, environmental, and investment requirements that differ from those in NAFTA countries, private entrepreneurs in most of the countries visited have been able to quickly establish a substantial market presence in hemispheric trade. NAFTA countries need to understand that the time needed to respond to market opportunities will most likely be much less than that allowed by governmental rules and regulations. As the global market expands and becomes more dynamic (i.e., more time-sensitive to changing market demands), the response time for providing needed infrastructure could become a serious constraint to NAFTA countries. This suggests a need for better, continual, and more strategic efforts to understand global trade patterns and the shifting context of economic centers for producing, consuming, and handling commodities. This need exists at the NAFTA, national, State and metropolitan levels (where trade movement is an important part of transportation system performance).
6. One of the most important concerns identified by freight shippers, port operators, and national transport officials during this scan was the level of effort and funding required to provide security for maritime freight movement that will satisfy international mandates. Specific mandates have yet to be determined, so much of this concern relates to worst-case scenarios, assuming the most extensive and intrusive types of security procedures. The panel's perception is that many of the ports visited do not have the level of security that would likely satisfy new requirements. Working with Latin American countries and ports to develop acceptable procedures and approaches for secure freight movement could be an important task for NAFTA countries. Of some interest was the suggestion by several port and country officials that private terminal operators most likely will be responsible for providing the required security, and that having an approved security gateway into the NAFTA market could become a major competitive advantage to some countries.
7. The Latin American experience illustrates the importance of having a national transportation policy that reflects the needs of trade flows and the global positioning of the NAFTA market. None of the countries visited has a comprehensive and systems-oriented national transportation policy. Little integration or coordination is evident among investment programs for different modal systems. Accordingly, the response to increased trade volumes with the NAFTA market most likely would be in the hands of private shippers and port terminal operators.
8. Public budget and financing mechanisms for funding freight projects were not found in many of the countries visited. Latin American countries have relied on concessions to private companies for providing the necessary port access and port terminal infrastructure. In several countries, the national government has no dedicated transportation funding source for public investment. In the case of port terminal operations, concessions have been used to turn over to private operation those aspects of logistics services that a private business is best able to provide. Private concessions for port terminal operations have largely been successful in the countries visited. The necessary provision and maintenance of other infrastructure (such as roads and railroads) are not occurring, however, because of the economic challenges the region faces and the heavy reliance on investment returns for privately funded infrastructure. This model of finance holds important lessons for investment strategies that rely too heavily on private provision of transportation.
9. Increasing NAFTA connections to Latin America will likely focus a great deal of attention on alternative financing schemes for providing the infrastructure necessary to handle increasing trade volumes. Providing hemispheric exchanges and consensus-building activities on innovative financing strategies could be an important part of a NAFTA-driven effort to develop necessary trade-related infrastructure. It is interesting to note that European and Asian investment has occurred at significant levels in the past five years in Latin America, much of it focused on transportation infrastructure.
10. Mercosur faces significant challenges in providing a stable trade market. Considerable economic challenges in Mercosur countries, uncertainty about a new government in Brazil, and important problems with standardizing border procedures have slowed progress on achieving major productivity gains that should occur with a trading block. The Mercosur countries are focusing much of their attention internally, with an emphasis on protecting production and commodity groups, rather than growing trade through an open boundaries strategy as found in the European Union. One major development worth watching is the prospective alliance between Mercosur and the Andean Pact countries. If Mercosur can find a way to make internal transportation more efficient and to promote trade growth, it may become a much larger player in global trade. Many significant issues must be resolved for this to happen in the short term.
11. Increasing port effectiveness is an important issue in the ports visited. The use of port terminal concessions has been successful in providing needed investment in dockside operations. For historical reasons, though, many ports are located in central areas of large cities, and face significant congestion in port access. With limited investment resources available, governments have used concessions for access projects as well, with limited success. Most ports visited operate 24 hours a day, seven days a week. This is done in response to rising congestion levels and to provide customer-oriented service. The Port of Santos is considering a truck-only road that would provide better internal circulation to this largest port in Latin America. Both concepts are worthy of investigation in NAFTA countries.
12. The Mexico-U.S. border still remains a critical barrier to improving NAFTA trade. Delays are caused by the inspection procedures used by numerous government agencies, inadequate physical infrastructure at border crossings, lack of data sharing among governmental agencies, and incompatible vehicle technology. Enhanced logistics, which Mexican government and private sector officials view as key to economic prosperity in the global economy, will depend on fixing border problems. Improvements are being made at Mexican ports and in inland transportation corridors to provide better service to the U.S. border. Such improvements need to be augmented with new ways of expediting trade across the border in an efficient, security-conscious manner. Improving gateways, borders, and international trade corridors through coordinated planning, investment, and technology deployment can improve trade transport efficiency and security.
13. Although not the focus of this scan, it is important to note that every port visited had plans for, was constructing, or had just opened cruise ship terminals. The cruise ship business is something that every port expects to benefit from. This raises interesting questions about the economics of such a large and expensive investment in this industry. In addition, if the level of maritime tourism reaches desired levels, security of onboard passengers and entrance into U.S. waters will become a concern.
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.
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 usually have examined 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 on the overall level of 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 their related impacts on the performance of the transportation system. The team recommends that this, and related information, 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 scanning team recommends that monitoring of the Latin American market continue, given the rapid introduction into the market of new players. Institutional mechanisms should be developed to guarantee that the best available information is provided to State DOTs.
3. Many types of international trade agreements have been implemented throughout the world, ranging from strategies to simplify tariffs to development of a borderless common market. In the context of Latin America, many countries have used free-trade agreements to establish trade advantages within the global market. As noted above, the private sector and, in particular, global corporations in the transport industry drive trade patterns to a great extent. We need to better understand the different types of trade agreements and their impact on trade and transportation infrastructure. The team recommends that a clearer picture of the players and their roles should 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. This is an important market, especially for the United States. The scanning team recommends that a scan be undertaken to understand the dynamics and potential of this important 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 already been tried, some successful and others too early to say. Given changing market conditions, the team recommends a feasibility study of using the Gulf of Mexico for serving NAFTA trade to determine factors that would make such services successful.
6. Both government and private sector officials discussed enhanced security 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 proves 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 for discussions in Mexico. The United States and Canada have had a long and effective relationship in deconstructing the border, 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. NAFTA countries face institutional, financial, and technological border challenges. The team recommends a study on what has worked on U.S. borders and how these lessons could be applied elsewhere.
8. The U.S.-Mexican border provides unique challenges in international trade and security. Numerous government agencies are involved with managing trade at the border. With the creation of the U.S. Department of Homeland Security, some agency functions may be consolidated, resulting in fewer delays at inspections. Shippers and private transportation providers, however, are more in tune with customers' planning, operations, and logistics needs, and thus of important transportation network needs. The team recommends 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 scan team visited two types of ports-those that focus primarily on export and import flows and have important positive economic impacts on national and regional economies, 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, given that larger ship sizes cannot be handled in existing ports without major i 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 corridor-gateway concept for enhancing the productivity of NAFTA trade. The team recommends that the performance measures that 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 NAFTA countries provide advice on 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, the team recommends technical exchanges on topics such as finance, professional development, and multimodal transportation planning as important means of building institutional capacity with Latin American trading partners.
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