Gerry Reed, the owner of a small South Texas trucking company, said he’s fighting to survive against other carriers who continue to misuse Mexico-based B-1 visa drivers to deliver loads point to point within the U.S.
Reed, whose name has been changed for this story, spoke to FreightWaves on condition of anonymity out of fear of retribution.
As FreightWaves reported in March and April 2021 in several news stories, trucking and transportation operators in the U.S. and Mexico have been violating cabotage rules by misusing foreign B-1 visa drivers to deliver loads within the U.S.
Cabotage rules prevent foreign nationals in the U.S. on B-1 business-visitor visas from competing with U.S. truckers on loads moving point to point in the U.S. The regulations are meant to protect driver jobs in the U.S. trucking industry.
Reed and other trucking industry stakeholders told FreightWaves that the misuse of Mexico-based B-1 visa drivers creates unjust but significant savings to U.S. carriers that set up outsourced B-1 driver fleets at a lower cost.
The trucking company owner said the misuse of B-1 visa drivers has gotten worse since FreightWaves first wrote about it three years ago. Even more trucking companies in the U.S. are employing Mexican B-1 visa drivers to undercut trucking rates in the country, while paying Mexico-based drivers less than U.S. truck drivers, he added.
“It’s definitely evolved over the last several years; now I’m seeing more U.S. companies open a division in Mexico, then get drivers with B-1 visas and use them as drivers in the U.S.,” Reed said. “I think that is the next evolution in this. Now you see U.S. companies that have figured out how to get a paper company set up in Mexico.”
A Mexico-based driver with a B-1 visa can pick up a load in a Mexican city such as Nuevo Laredo, which sits across the border from Laredo, Texas. The B-1 driver then takes that load across the border to Laredo. That’s legal. The driver can either deadhead back to Mexico or take another load headed directly back to Nuevo Laredo.
Instead of returning to Mexico, however, B-1 drivers are then often hired by companies to pick up new loads and go farther into the U.S., often taking work for less pay, which is illegal.
Reed said carriers with divisions in Mexico sometimes put U.S. and Mexican license plates on the vehicles to allow them to put either a U.S. or Mexican driver in the truck.
“It’s just depressed rates,” Reed said. “Look on a load board, you can just punch in South Carolina to Texas, or Georgia to Texas. You’re looking at 90 cents to $1 a mile, and these are the guys that are using B-1 visa guys. They price it that way, because who else is going to do it at that rate?
“The B-1 guy goes out to Georgia and back on the cheap. But the carrier that’s in Atlanta, for example, doesn’t understand why rates are really, really low going to Texas. This is the reason why, because these trucking companies will take whatever they can to get back here because they have to. It’s artificially blowing the rate model for everyone else that maybe doesn’t really understand why.”
Related: Mexican B-1 visa truckers conducting illegal runs in US
Cabotage violations have been ongoing for years
While it is difficult to precisely assess how many carriers are involved in the practice of irregularly employing drivers with B-1 visas, a 2019 study commissioned by the Teamsters alleges the practice became widespread in Nuevo Laredo about 20 years ago.
“The first large B-1 fleets began to appear in Nuevo Laredo in the mid 2000s, and the number of B-1 fleets and outsourcing set-ups has grown since,” according to the Teamsters report by Empower LLC, a Mexico City-based research firm.
“Empower LLC has not obtained reliable data about the total size of the labor market for B-1 operators, but there are several open and closed Facebook groups that serve as job forums for B-1 drivers, with thousands of members each. The most active of these has over 11,000 members and is almost exclusively frequented by employers and drivers based in Nuevo Laredo and Laredo,” according to the report.
While the Teamsters study from Empower LLC focused on Laredo and Nuevo Laredo, the practice of misusing B-1 visa truck drivers has been alleged in many other cities along both the Mexican and Canadian borders.
Several people have contacted FreightWaves about similar misuse of B-1 visa truck drivers across Texas and New Mexico.
A longtime truck driver who worked in the oil and gas industry told FreightWaves the misuse of B-1 visa drivers was also widespread in the Permian Basin in West Texas.
Related: Misuse of B-1 visas undercuts US trucking industry
B-1 visa abuse causing shortage of truck drivers in Mexico, experts say
Cross-border trade operators said when a trucking company breaks cabotage regulations, it isn’t just hurting the U.S. trucking industry. It is also hurting the freight industry in Mexico.
In Mexico, many of the best truck drivers who have a B-1 visa get jobs in the U.S., because the U.S. companies can pay more than they make south of the border.
“Cross-border companies such as us don’t have issues with manning our trucks on the U.S. side of the border, but we do in our Mexican division,” Gerardo Alanis Barrios, CEO of Cold Chain Solutions in Laredo, told FreightWaves.
Alanis Barrios and other members of his family operate a group of companies unofficially called Grupo Alanis in Laredo and just across the border in Nuevo Laredo. The companies include transportation, cold storage, drayage, customs and logistics operations.
Grupo Alanis operates over 500 tractor-trailers in Mexico and about 25 in the United States.
“We are having lots of issues with keeping and retaining drivers, keeping our fleets on the road in Mexico,” Alanis Barrios said. “The shortages are due to the B-1 drivers. They can come into the U.S. and make 30% or 40% more, so you can’t compete with that in Mexico. The driver just has to get a B-1 visa to get authorized and they can drive in the U.S.”
In 2022, truck driver salaries in Mexico averaged around $4,400, according to figures from Data Mexico and the country’s Ministry of Economy.
Mexican truckers’ earnings varied widely by location, the type of cargo truck or van driven, the size of the company, and the sector they were employed in.
On the low end of wages were drivers of cargo cars, vans and “rabons” or short-bed trucks, while long-haul dry van and double tractor-trailer drivers can earn up to 45,000 pesos a month ($2,379.15).
In comparison, data from the American Trucking Associations found that the average U.S. truckload driver made more than $69,000 including salary and bonuses in 2021.
Alanis Barrios said it’s not just money that often attracts Mexican B-1 visa holders to the U.S., but also safety. Truck drivers in Mexico, especially long-haul drivers, often face challenging working conditions and security issues as they transport goods.
Mexico’s National Public Security System (SESNSP) said cargo theft in 2023 increased 4% year over year compared to 2022 to 9,181 incidents, including 7,862 cases that involved violence. At least 50 truck drivers have been killed on the country’s roads by cargo thieves since 2023, according to Mexico’s National Chamber of Cargo Transportation (Canacar).
During the first two months of 2024, 1,381 cargo theft incidents were recorded in the country, SESNSP reported.
“To start off, security is a big issue and one of the solutions that needs to be worked on in Mexico,” Alanis Barrios said. “No parent wants their son to become a driver anymore, because they don’t really want them to get shot at on the road in the middle of nowhere.”
Alanis Barrios said Canacar and other trucking associations can also work to “to dignify the profession.”
“The industry in Mexico needs events to show that driving can be a family business, have events where you can take somebody: Let’s say your dad is a driver and the son is going to see him in a competition,” Alanis Barrios said. “It gives them a sense of pride. That signifies it’s a professional job.”
Another issue in Mexico is lack of truck stops or places for drivers to rest and get something to eat.
“They need more infrastructure in Mexico, better restrooms,” Alanis Barrios said. “Here in the U.S., every 30 or 40 miles, you will see a Pilot Flying J or Love’s Travel Stops, with clean restrooms and warm foods. They don’t have that in Mexico for the most part.”