Border Can Drive Them Up the Wall : Transportation: Some truckers wait hours to cross into California. A free trade pact will make it worse, many fear.

OTAY MESA —  The moment of truth has arrived for trucker Abel Delgadillo and 78,500 pairs of Mexican-made latex gloves.

After driving up to this border crossing east of San Diego, Delgadillo anxiously waits on a U.S. Customs Service inspector for final approval to enter the country and drop off the glove shipment.

What will it be today? A speedy crossing or a frustrating delay at the crowded checkpoint? All it takes is a glitch in the paperwork, a zealous inspector or a curious computer in Washington, D.C., to turn a mundane process into a maddening ordeal.

“It’s never the same,” Delgadillo says.

His journey has taken him through a complicated network of middlemen and government regulations that conspires to slow the passage of the 4,000 or so trucks that cross the U.S.-Mexico border every day.

International trucking is already so beset with delay that many who ply the border worry that the system will collapse under the torrent of traffic expected from a North American free trade agreement. President Bush and Mexican President Carlos Salinas de Gortari will be discussing the proposed treaty when they meet in San Diego today.

“If not corrected, this could become . . . sort of the Achilles’ heel” of free trade, says Nancy MacRae, deputy director of the office of international transportation and trade at the U.S. Department of Transportation.

Longstanding problems--corruption and inadequate docking at Mexico’s marine ports and uneven maintenance of the rail system--have made trucks the transportation mode of choice between the United States and Mexico. Truck traffic could triple from current levels if trade between the nations continues to boom, according to transportation consultants.

But trucking at the border is merely the best of a set of troubled options.

Clogged customs checkpoints--particularly those leading into the United States--trigger hourslong backups. U.S. and Mexican restrictions on foreign truckers increase the cost and time of shipping goods. Complicated customs regulations and duties have bred a layer of influential middlemen.

“The result is a significant increase in the cost of transportation,” says Donald A. Michie, chairman of the Border Trade Alliance Transportation Committee, which has advised U.S. government officials on transportation issues involving Mexico.

Border-crossing hassles, he says, can add $60 to $200 to the cost of shipping a trailer load. Along with the impact of delayed shipments on production or sales, such expenses quickly add up for companies that send dozens of trucks across the border every day.

As delays have grown at the border, so has discontent among trucking customers. Assembly lines at Mexican maquiladoras can be shut down if a truckload of essential supplies runs late; transportation officials complain about their inability to track the progress of cross-border shipments.

Indeed, customer complaints and the doubling of Mexico-U.S. trade over the past five years already have forced changes in the way products are trucked across the border. Trucking firms such as Palo Alto-based Consolidated Freightways have teamed up with Mexican companies to offer customers a more efficient and speedy way to ship goods. U.S. and Mexican customs have moved to automate and simplify their inspection processes.

Delgadillo’s firm--Industrial Freight System de Mexico--also represents an innovation in the border trucking game.

To serve the maquiladoras-- plants in Mexico that assemble products for sale in the United States--Industrial Freight System, a Sun Valley firm, created a sister Mexican company in Tijuana. Delgadillo, a longtime employee who is a U.S. resident and Mexican citizen, is president and majority owner of the Mexican firm.

With its dual identities, Industrial Freight can operate on both sides of the border. As a Mexican company, Industrial Freight System de Mexico can skirt Mexican rules banning U.S. truck drivers and trucks from its roads.

Mexican truckers, meanwhile, are limited to certain commercial zones along the border--but that is leeway enough for Industrial Freight System de Mexico to carry goods to its U.S. sister firm’s Chula Vista terminal. Other companies, by contrast, must employ at least two sets of drivers and trucks--American and Mexican--to complete a cross-border shipment.

This weekday is a busy one for Delgadillo and his seven drivers. The firm will truck 12 trailer loads of electronic parts, tools, calendars, stuffed marlin and latex gloves over the border to the Industrial Freight truck terminal in Chula Vista. From Chula Vista, the shipments will head to points across California and the United States.

A former keyboard player with thick black hair combed back off his forehead, Delgadillo takes the wheel of a 12-year-old International Harvester rig that will haul the trailer of latex gloves. From his Tijuana terminal near the Otay Mesa crossing, Delgadillo maneuvers the truck and trailer on a rib-rattling ride through busy boulevards lined with maquiladoras, supermarkets and auto repair shops.

A few blocks from the border crossing, Delgadillo parks the rig outside the offices of Agencia Aduanal Perez Ortiz and Camacho Brokers.

Perez Ortiz, Camacho and other customs brokers are housed in rows of aging trailers and cinder block and stucco offices on each side of the border. Depending on whom you talk to, the brokers are either experts at navigating customers through the complex maze of customs regulations or costly and meddlesome middlemen.

Earlier this day, the maker of the latex gloves sent invoices with information about the day’s shipment to Perez Ortiz, a Mexican-registered broker, and to U.S. broker Camacho. Both brokerages transferred that information to customs documents for their respective governments and estimated the duties that had to be paid. For their services, Camacho received $50 and Perez Ortiz $35--the going rates for processing a maquiladora shipment.

But the brokers’ expertise goes far beyond processing customs paperwork. They lubricate the gears of a cumbersome system, their knowledge of the available truckers, customers, customs procedures--and customs officials--making them powerful middlemen.

Put off by U.S. and Mexican customs procedures, many customers let the brokers handle the entire border-crossing process, gladly paying fees for storage, truck shipment and even use of fork lifts. Such fees can quickly add up to $200 to the cost of getting goods through the border area.

The brokers say their business is largely limited to processing customs paperwork and advising customers on the complexities of international trade. Although many truckers would like to see the brokers fade away, customs officials rely on the middlemen to educate shippers about the ins and outs of border trade.

If the brokers were eliminated, “we would be instructing every new entrant to the international business community,” says Rudy M. Camacho, director of the San Diego customs district. As trade has grown, the brokers’ “role has become even more important,” he says.

Truckers say that if things were simpler, they could move goods more quickly and cheaply across the border than the brokers.

“If we try at this point to try to cut them out of the equation, they have enough economic clout to set us back,” says Frits Kromhout, director of marketing for Consolidated Freightways. “They still have a tremendous amount of influence as to how freight moves trans-border.”

With U.S. and Mexican customs documents tucked in his back pocket, Delgadillo drives past street vendors selling food and drink and through a barbed-wire-topped gate that marks the entrance to the Mexican customs yard.

Brokerage employees--identified by their dark blue polo shirts and the walkie-talkies and portable phones strapped to their belts--dash between idling trucks and the customs office, shuttling paperwork and messages.

Delgadillo clears Mexican customs in about 20 minutes, then lines up behind other trucks waiting to enter the adjoining U.S. Customs Service yard. With bald Otay Mountain in the distance, the Industrial Freight truck lurches past the gate into a holding yard, where about 500 trucks will have entered by day’s end.

These customs checkpoints, according to many transportation and trade experts, may become choke points if--as expected--trade between the United States and Mexico continues to grow. Truckers and brokers already complain about a shortage of customs inspectors and inadequate facilities that lead to costly delays.

“Customs is not ready to handle the increased amount of freight as a result of a free trade agreement,” says Linda Bauer Darr, director of international affairs for the American Trucking Assn. “It’s just going to be a huge bottleneck.”

Located about five miles east of the main border crossing at San Ysidro, Otay Mesa was built in 1985 to handle a surge in trucks ferrying supplies and finished products to and from the maquiladoras. But the volume of traffic has surpassed expectations, growing from 166,000 to more than 310,000 loaded and empty trucks annually.

“My greatest enemy is gridlock,” says port director James S. Purser II. “The growth is not going to stop. There’s going to be increases whether or not there is an agreement.”

While truck traffic at Otay Mesa has nearly doubled, the Customs Service staff responsible for enforcing 1,600 statutes actually has shrunk, Purser noted.

Still, top customs officials say they are prepared to meet any future increase in truck traffic.

To make up for a smaller pool of employees, the Customs Service is relying on high technology. As Delgadillo waits for his truck to be inspected, customs officials on a loading and inspection dock use hand-held lasers to search another truck for hidden compartments.

In a nearby warehouse, Purser shows off a new X-ray machine that will scan entire pallets of goods, cutting down inspection time and damage. In a few months, an even larger X-ray machine will scan whole truckloads.

“Automation is going to be the key to success,” says Camacho, the San Diego customs director.

Already, many truck shipments--including Delgadillo’s gloves this day--are cleared to enter the United States, uninspected, before they reach the border. Indeed, about 40% of the trucks entering at Otay Mesa--shipments from established, reputable companies--get computer clearance after a check to make sure that neither trucker, shipper nor broker has a history of undercounting its shipments.

“I’ve never heard of a drug bust inside an RCA or Zenith van,” explains a government transportation expert.

After parking the big rig in the customs yard, Delgadillo, clutching a sheaf of manifests, walks past piles of fragrant papayas and pineapples that are being scrutinized on the loading dock. Once, the 39-year-old trucker was stuck here for five hours because of incomplete paperwork; one driver, he recalls, lost an entire day at the check point.

But not him, not today.

Inside the customs office, a uniformed inspector reviews the glove shipment documents before rendering a quick verdict. “This is your ticket out of here,” the inspector tells Delgadillo, stamping the documents.

Only 10 minutes after crossing the border, Delgadillo and the gloves have been granted permission to enter the United States.

Sanchez reported from Otay Mesa and Darling reported from Mexico City.

The Goods on U.S.-Mexico Trade Trade between the United States and Mexico has doubled to $65 billion annually in the last five years, as Mexico has dropped many of its protectionist commercial barriers and American companies have relocated plants south of the border. Autos and auto parts, heavy equipment and petroleum dominate the bilateral exchange. The following chart shows leading exports in 1991: U.S. Exports to Mexico (in millions of dollars) Auto parts: $3,237 Telecommunications equipment: $1,275 Electric distribution equipment: $1,033 Electrical machinery: $928 Circuit breakers/switching equipment: $853 Measuring equipment: $750 Cathodes, photocathodes: $681 Goods from base metals: $680 Refined oil products: $664 Internal combustion engines: $652 Mexican Exports to U.S. (in millions of dollars) Crude oil: $4,345 Cars and trucks: $2,578 Electric distribution equipment: $1,690 Auto parts: $1,442 Telecommunications equipment: $1,156 Circuit breakers/switching equipment: $982 Televisions: $967 Electrical machinery: $809 Frozen vegetables: $804 Internal combustion engines: $696 SOURCE: U.S. Department of Commerce