Job No. 2326166

1 2 3 4 5 6 DEPARTMENT OF TRANSPORTATION 7 BORDER TRADE ADVISORY COMMITTEE 8 JUNE 30, 2016 9 SMU CAMPUS 10 5901 BISHOP BOULEVARD, , TX 75205 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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1 A P P E A R A N C E S 2 BOARD TRADE ADVISORY COMMITTEE 3 Carlos Cascos, Chair, Secretary of State Veronica Escobar, Judge, El Paso County 4 Ramsey Cantu, City of Eagle Pass , Mayor, City of El Paso 5 Rob Harrison, Center for Transportation Research, UT at Austin 6 Gerardo (Gerry) Schwebel, International Bank of Commerce 7 John B. Love, III, Councilman, District 2, City of Midland, Texas 8 Josue Garcia, Jr., Donna International Bridge German Rico, East Kelly Railport 9 John Esparza, Texas Trucking Association Paul A. Cristina, P.E., Texas Trucking Association 10 Andrew Cannon, Hidalgo County MPO Matthew McElroy, City of El Paso 11 Sam Vale, Starr-Camargo Bridge Company Julie Guerra Ramirez, Progreso International Bridge 12 Pete Sepulveda, International Bridge System, Cameron County 13 Rigoberto Villarreal, McAllen-Hidalgo International Bridge/Anzalduas International Bridge 14 , Mayor, City of Laredo Arturo Dominguez, Kansas City Southern Railroad 15 Robert Garza, Mayor, City of Del Rio Eduardo A. Campirano, Port of Brownsville 16 Luis Alfredo Bazan, Pharr International Bridge Tony Martinez, Mayor, City of Brownsville 17 Chris Boswell, Mayor, City of Harlingen Brenda Mainwaring, Union Pacific Railroad 18 John Hopkins, B&M Bridge Rolando Pablos, Borderplex Alliance 19 Rafael M. Aldrete, Texas Transportation Institute Jake Giesbrecht, Presidio International Port Authority 20 Ed Drusina, International Boundary and Water Commission 21 22 ***Not all Members Present 23 24 25

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1 P R O C E E D I N G S 2 SECRETARY CASCOS: Well, good morning. 3 My name is Carlos Cascos. I'm the Texas Secretary of 4 State. And it gives me great pleasure to welcome you 5 to another BTAC meeting on the beautiful SMU campus. 6 And I want to thank the SMU administration for -- you 7 know, for allowing us to use this facility. It's a 8 beautiful facility. Thank y'all very much, and thank 9 you for what y'all did to help us set this up. 10 My role here is to lead the meeting. But as 11 y'all know me, I'm going to punt it to smarter people 12 than me, like Caroline. And we will start -- and I 13 would like to start by calling the meeting to order. 14 And then I want to go around the table and just 15 everybody kind of introduce yourselves, even though 16 everybody knows who you are. But nonetheless, 17 introduce yourself, a very, very brief commentary as 18 to where you're from and, you know, what you had for 19 breakfast. And then we can just move on forward. 20 And let me start over here with Jake. I 21 will start with Jake and start off to the left and go 22 around. 23 MR. GIESBRECHT: Good morning, 24 everybody. My name is Jake GIESBRECHT. I'm from 25 Presidio, Texas. And I'm very grateful for Secretary

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1 Cascos, for TXDOT and for everything they have done 2 for us. And not only everything they have done for 3 us, but everything they're going to do for us. Thank 4 you very much. 5 MR. BIELEK: Good morning. I think that 6 was a suggestion. I'm Bob Bielek. I'm a District 7 Engineer for TXDOT in El Paso. I'm trying to build a 8 bridge there in Presidio and trying to provide some 9 roads so that your inspection facilities are not 10 simply parking lots. 11 MR. OLAGUBEL: Good morning. I'm Juan 12 Olagubel, City of McAllen, representing both 13 international bridges at -- thank you having us. 14 SECRETARY CASCOS: Thank you, Juan. 15 MR. ALDRETE: Good morning. I'm Rafael 16 Andrete with the Texas A&M Transportation Institute in 17 El Paso. And I oversee a center where we conduct a 18 lot of research on border issues and have the 19 opportunity to participate in this committee. I am 20 looking forward to today's meeting. 21 MR. BAZAN: Good morning, Secretary 22 Cascos and everybody. My name is Luis Bazan, Director 23 for the Pharr International Bridge. Happy to be here. 24 Thank you. 25 MR. CANNON: Good morning. Andrew

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1 Cannon, Transportation Director for the Hidalgo County 2 MPO, the front door of the great State of Texas. 3 MR. DRUSINA: Ed Drusina, Commissioner 4 for the International Boundary and Water Commission. 5 And we're out of El Paso, Texas. But we have offices 6 in Brownsville, . It's great to be here. 7 Good to see you again, Secretary of state. 8 SECRETARY CASCOS: Thank you, sir. 9 MR. CANTU: Good morning, Mr. Secretary 10 and ladies and gentlemen. Ramsey Cantu, Mayor for the 11 City of Eagle Pass. It's a pleasure to be here with 12 all of y'all. And we look forward to continuing 13 working together to come up with some productive 14 measures of bettering our border areas, especially now 15 that we're here in Dallas. 16 MR. RICO: Good morning, Judge. German 17 Rico, Port . 18 MR. GONZALES: Good morning, 19 Mr. Secretary. Gabriel Gonzales, City Manager of City 20 of Harlingen representing Mayor Chris Boswell. 21 MR. DOMINGUEZ: Good morning, 22 Mr. Secretary. Arturo Dominguez. I'm with the Kansas 23 City Southern Railway, Director of International Rail 24 Operations in Laredo. 25 MR. SAENZ: Good morning everyone. To

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1 the Secretary, good morning. Pete Saenz, Mayor of 2 Laredo, Texas. 3 MR. MCELROY: Good morning, Secretary. 4 Good morning everyone. Having coffee for breakfast. 5 SECRETARY CASCOS: The only one that 6 followed my instructions. Okay? 7 MR. MCELROY: I tried to. Matthew 8 McElroy with the International Bridges in the City of 9 El Paso. 10 MR. LOVE: Mr. Secretary, good morning. 11 John Love, City Councilman for the City of Midland and 12 Chairman of the Permian Basin MPO. And I had a hot, 13 humid, sweaty walk for breakfast. 14 MS. MELVIN: And I'm Tiffany Melvin. 15 I'm the President of North American Strategy for 16 Competitiveness, NASCO. And some of you around the 17 table and in the room know what that is already. And 18 for those of you that don't, I will give you a little 19 cliffhanger because you'll find out in just a bit when 20 I speak a little bit more in detail about our efforts. 21 Thanks. 22 MR. SCHWEBEL: Good morning, 23 Mr. Secretary. Good morning, friends. I'm Gerry 24 Schwebel. I'm with the International Bank of Commerce 25 in Texas. And it's great to be here in the border

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1 City of Dallas. 2 MR. CRISTINA: Secretary, good morning, 3 everyone. Paul Cristina, Director of Public Private 4 Partnerships with BNSF Railway headquartered in Fort 5 Worth. 6 MR. HIRSH: Good morning, Secretary. 7 Paul Hirsh, also from BNSF Railway. I'm AVP for the 8 Mexico Business Unit. So as you have seen, we -- glad 9 to be here. 10 MR. BOECKING: Good morning, 11 Mr. Secretary. I'm Steve Boecking. I'm Vice 12 President with Hillwood, the real estate development 13 company representing Alliance Texas, an inland port 14 here in Dallas/Fort Worth. And I manage the foreign 15 trade zone at Alliance. I do government relations and 16 supply chain and logistics infrastructure. 17 MS. MAYS: I'm Caroline Mays with 18 TXDOT. That's all I'm going to tell you. You guys 19 know me. Thank you for being here. 20 SECRETARY CASCOS: Okay. We will start 21 going back this way. Speak up, please. 22 MR. GRIMALDO: Jose Grimaldo, University 23 of North Texas. 24 MS. APPETTI: Jennifer Appetti, 25 Consulate of Mexico.

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1 MS. CONNELL: I'm Rachel Connell. I'm 2 with NASCO. 3 MS. PIFER: Sherry Pifer. SH 130. 4 MR. GARZA: Joel Garza, MPO. 5 MR. BOMBA: Michael Bomba, University of 6 North Texas. 7 MR. HUERTA: Avdiel Huerta, Secretary of 8 State's Office. 9 MR. VILLA: Good morning. Juan Carlo 10 Villa with the Texas A&M Transportation Institute. 11 MS. PROZZI: Jolanda Prozzi with the 12 Texas A&M Transportation Institute. 13 SECRETARY CASCOS: Back over there. 14 Who's next? Hey, how are you? 15 UNIDENTIFIED SPEAKER: How are you? 16 SECRETARY CASCOS: I'm good. 17 UNIDENTIFIED SPEAKER: Good morning. 18 Is this thing on? 19 SECRETARY CASCOS: Everybody can hear 20 you. 21 UNIDENTIFIED SPEAKER: You don't need me 22 to hear me. Good morning, Secretary. Good morning, 23 Caroline. I'm glad to be here. I've got some guests 24 that I brought with me today. I've got Anabel Cordona 25 that is the Chairwoman of Valley

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1 Partnership. 2 As you can see, I've got State 3 Representative Martinez -- 4 SECRETARY CASCOS: Well, you brought 5 the big guns today. 6 UNIDENTIFIED SPEAKER: I brought big 7 guns, yes. I don't like to travel alone. And then I 8 have got with me -- who else -- Mr. Ernesto Silva. So 9 I'm happy to be here, and hopefully we can make 10 some -- 11 SECRETARY CASCOS: Well, they could 12 have introduced themselves. It's okay, but -- 13 UNIDENTIFIED SPEAKER: Well, I know 14 that. But I wanted to do that. 15 SECRETARY CASCOS: It's that control, 16 that you -- 17 UNIDENTIFIED SPEAKER: It's the control 18 of the microphone. 19 SECRETARY CASCOS: Please. 20 UNIDENTIFIED SPEAKER: I'm going to 21 take the limelight away from Sam Vale today. 22 SECRETARY CASCOS: That won't be hard. 23 MR. HERNANDEZ: Good morning. I'm Frank 24 Hernandez, General Director of our U.S./Mexico 25 Operations for BNSF Railway.

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1 MS. GARZA: Good morning. My name is 2 Cindy Garza. I'm with the City of Pharr Economic 3 Development Corporation. 4 MR. RODRIGUEZ: Roberto Rodriguez. I'm 5 with TXDOT in the Laredo District. 6 MR. LEAL: Charlie Leal with TXDOT State 7 Legislative Affairs. 8 MR. GRANGER: Ryan Granger with TXDOT 9 Federal Affairs. 10 MR. SAUVIGNET: Henry Sauvignet, IBC 11 Bank. 12 MR. ARISPE: Miguel Arispe, Hidalgo 13 County MPO. 14 MR. BOCANEGRA: Jon Bocanegra, Hidalgo 15 County MPO. 16 MS. WOLF: Lindsey Wolf with Secretary 17 of State. 18 MR. DOWNEY: Alejandro Downey, and I'm 19 also with the Secretary of State's Office. 20 MR. GARZA: Rene Garza, Pharr District 21 TXDOT. 22 MR. HATHCOCK: Jeff Hathcock, North 23 Central North Texas Council of Governments. 24 MR. BROWN: Jason Brown, North Central 25 Texas Council of Governments.

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1 SECRETARY CASCOS: Did we miss anybody? 2 If we did, we will make up for it later. Who did we 3 miss? 4 MR. GARCIA: Good morning, Secretary. 5 Josue Garcia with the Donna International Bridge. I 6 apologize for being late. 7 SECRETARY CASCOS: You get to clean 8 up. 9 We got everybody? Okay. Very good. Let's 10 go ahead and get started. It's -- did we miss 11 somebody. Now, this will be going around. So y'all 12 can sign it to -- 13 Okay. With us this morning, we have a very 14 special guest who really -- now, we have almost 15 one-and-a-half good special guests, one from outside 16 of the area but more importantly, the Dallas County 17 Judge, Judge Jenkins, who I've known for several 18 years. 19 We have sat on a couple of committees 20 together. And I'll tell you his most recent claim to 21 fame was how well you handled the crisis, the -- I 22 think it was the Ebola crisis that you had. 23 JUDGE JENKINS: The Ebola. 24 SECRETARY CASCOS: Yeah. And he 25 handled it very well. I was keeping up with it from

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1 afar. 2 And I want to say, Judge, congratulations on 3 the way that you handled it. It could have gotten out 4 of control, but you did an admiral job. I'm so proud 5 to know you. 6 So with that, you know, he's here to give us 7 a few welcoming remarks and some comments. 8 So with that, Judge Jenkins. 9 JUDGE JENKINS: Thank you, Secretary. I 10 appreciate that. Thank you very much, Secretary. And 11 the Secretary is a friend of mine from when we were 12 county judges together. And if he asks me to do 13 something, I'm going to do that thing. 14 This is one of my great honors this week. I 15 will tell you my -- another great honor, a little 16 obscure fact. It's not obscure to us, but it may be 17 to you who are from out of town. You're in a 45 18 percent Hispanic county right now. Dallas County is 19 45 percent. It's probably a little higher than that 20 because it went from 43 percent in the census -- in 21 the two-year census to 45 percent. So it's growing 22 very rapidly. It will be a Hispanic majority county 23 before 2020. 24 The other great honor that I had this week 25 is a young lady I met when we had the unaccompanied

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1 minors -- when we offered to house the unaccompanied 2 minors here. Someone said, Judge you need to have a 3 town hall meeting and explain to people that these 4 children, these 2,000 children will be coming here. 5 And I said, town hall meetings are for the right and 6 the left to scream at one other. And I want to go out 7 to the neighborhoods and just talk to the people where 8 the children will be housed. 9 And so this young lady found 20 young 10 Hispanic lawyers. And we went to the neighborhoods, 11 and we calmed everyone's fears. And they were very 12 welcoming and unafraid. The honor was yesterday when 13 I swore that young lady in to the Dallas County 14 Community College District. She became the first 15 Hispanic to win in an overwhelmingly, like, 80/20 16 non-hispanic district. 17 And she really exemplifies something that we 18 believe in Dallas. You know, Dallas is big on 19 following great philosophers, so we follow the advice 20 of Bill Murray. As he espoused in Stripes, our 21 forefathers have been kicked out of every decent 22 country in the world. Right? 23 And so her parents came in from Mexico. I 24 got a chance to eat lunch with them yesterday and try 25 out my Spanish because they don't speak much English.

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1 But they did bring their family here, build a better 2 life for her children. She went to Greenhill, which 3 is one of our great schools here, and then on to some 4 Ivy League school and is a lawyer and is now on that 5 board. 6 I also want to tell you about trade and our 7 economy here very briefly in my remarks. And by the 8 way, I might even get confused. I give my personal 9 testimony in this room twice a year to seminary 10 students. I go to church across the hall, or across 11 the street there at the Methodist church and have 12 preaching in my background. But I won't preach at you 13 today. I promise I'm almost done. But I do want to 14 tell you about our local economy, about your 15 opportunities to do business here. 16 Our Commissioner's Court takes a break in 17 July. And so next -- the 5th, the day after the 18 holiday, is our last meeting for July. Just on my 19 agenda for that week, I have approved a little tax 20 break for Amazon to build another 700-job facility. 21 Secretary, Matt and Governor Abbott were together the 22 first time they opened the facility in the little town 23 of Coppell. They're opening another one. It will be 24 their third here in Dallas County in the last three 25 years.

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1 I have a free trade zone inclusion for 2 2 million square feet of spec space for something called 3 South Port down in the Dallas County Inland Port, and 4 one other business that I think is a little under 300 5 jobs that we're doing something for. So it is a 6 constant thing. 7 Those of you who are around here have 8 probably seen that I'm pushing, and now have the 9 support of the surrounding counties as well, for tax 10 relief, for lowering the taxes here. And that 11 includes business personal property tax that some of 12 you pay if it's not free trade zone, you know, 13 property. 14 And the reason for that -- because we're 15 seeing these unprecedented rises in our property 16 values because there's so many good jobs here, and 17 there's so much stuff coming here that middle class 18 homes are going up 12 percent in value this year if we 19 don't do something. 20 And so that's a good -- the tax breaks are 21 good for you, but it also tells you that Dallas County 22 and also North Texas -- I don't want to slight my 23 brothers here from Tarrant County. Although, we have 24 an inland port in Dallas County. And if you're 25 driving a truck, taxes are lower here. People are

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1 friendly here. There are great folks over there, too, 2 but -- consider us. 3 But we're open for business. We're a 4 welcoming community. We're very honored to have you 5 here. Our mayors -- Francisco is not -- the Consul 6 General is not here yet, but he will be sitting here. 7 And our mayors, Betsy Price and Mike Rawlings, just 8 went to Mexico, along with me and a delegation to make 9 sure that people know that we are here. 10 We don't want for people to think of just 11 when they get away from the border. We want 12 them to recognize North Texas as the fourth largest 13 metropolitan area in the United States. We have seven 14 million people. We're open for business, and we want 15 to do business with you. 16 Thank y'all for being here. 17 SECRETARY CASCOS: Thank you, Judge. 18 I just sent a text message to 19 Representative Martinez asking if he wanted to say a 20 few words. I don't know if I've get your right 21 number. 22 MR. MARTINEZ: You know, Secretary, if 23 you ever ask -- 24 SECRETARY CASCOS: Go ahead. 25 MR. MARTINEZ: -- if a politician wants

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1 to speak, we always say yes. So it really is a 2 pleasure to be here, especially sitting beside you. 3 And I just want to say thank you to everybody and look 4 forward to working with y'all. 5 I'm State Representative from Rio Grande 6 Valley from District 39. I'm also the Vice Chair of 7 Transportation of TXDOT. So really an honor to be 8 here. Thank you. 9 SECRETARY CASCOS: Thank you. 10 You know, I think as we went around the 11 audience and everybody identified where they were 12 from, there's a very strong delegation from South 13 Texas, more specifically Hidalgo County. So, you 14 know, we're very proud of that fact that they actually 15 made -- everybody's, you know, trek was long. But 16 coming from the Valley, it's especially long. And I 17 want to thank those of y'all that took the time, you 18 know, to come up from the Valley for this. 19 Our next meeting, just so you know so you 20 can start planning your hotel and airlines, I believe 21 is going to be El Paso September the 7th. And it's 22 ironic that it's 11 days before my birthday, so I -- 23 you know, whenever y'all decide to do -- 24 UNIDENTIFIED SPEAKER: Two days before 25 mine.

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1 SECRETARY CASCOS: There you go. We 2 can have a party when we're there. Right? 3 UNIDENTIFIED SPEAKER: Yes. 4 SECRETARY CASCOS: Okay. Let me -- 5 anybody else like to say a few words before we get 6 started? 7 Okay. Well, let's move on. You know, the 8 next item on the agenda is the approval of the 9 minutes. And I just told the staff that we can do it 10 one of two ways. One, is we can approve the minutes 11 now; or because you have not had the opportunity to 12 read them, to defer them until the next meeting. 13 I hope at the next -- before the next 14 meeting, you will get the minutes beforehand to give 15 you the opportunity to read them and review them 16 before you have to approve them. It's kind of unfair 17 to get them 30 minutes before you -- you know, and 18 then try to approve them. 19 So if it's okay with everyone, if you want 20 to approve them, we can. If you want to defer that 21 until September, we can do that as well. 22 So do I have a motion either way? 23 MR. LOVE: I ask that we move for 24 approval. 25 SECRETARY CASCOS: Okay. Move by

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1 Councilman Love. Do I have second to approve? 2 MS. RAMIREZ: I second. 3 SECRETARY CASCOS: Please, as you 4 second -- your name, please say it into the microphone 5 because they are taking -- you know, they are 6 recording this. 7 MS. RAMIREZ: Second the motion. Julie 8 Ramirez. 9 SECRETARY CASCOS: Okay. I have a 10 first and a second. All in favor signify by saying 11 aye. 12 AUDIENCE: Aye. 13 SECRETARY CASCOS: Any opposed? The 14 items carries. 15 Okay. Strategic Border Transportation 16 issues. If you read the agenda, that's me. I'm going 17 to punt now to my esteem colleague sitting to my 18 right. You got a new hairdo. How cool is that, just 19 for this meeting. Right? 20 MS. MAYS: Yes. 21 SECRETARY CASCOS: Okay. Caroline, 22 you're on. 23 MS. MAYS: Thank you very much, 24 Secretary. We have been working together for a long 25 time, so --

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1 SECRETARY CASCOS: I can kid around. 2 MS. MAYS: -- he can make fun of me. 3 But thank you again for being here. This next agenda 4 item is what the Secretary had asked the committee to 5 think about from the last meeting and bring forth a 6 couple of ideas that you have. 7 And we have taken that. A lot of you 8 provided comments and feedback. And we're taking 9 that, and we're getting that up on the screen here so 10 we can have a discussion on some of those issues as we 11 start the meeting. 12 SECRETARY CASCOS: Do we need to dim 13 the lights for this? We have our dimmers. 14 MS. MAYS: Yeah, probably a little bit. 15 Okay. While we're dealing with the technical issues, 16 I can actually start while they do that. We put this 17 in a couple of buckets. So what you will see later 18 and what I'm talking about here is -- we looked at the 19 different items you-all sent and kind of put it in 20 buckets so we could be able to have the discussion. 21 So the first one we have, you know, was 22 Interstate I-35 between Laredo and San Antonio is 23 taxed with heavy trucks moving international freight - 24 require truck only lane. So that was one of the 25 comments.

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1 And then the second one, we need truck only 2 parking and staging areas. Again, on the side it 3 shows you how many times or how many people actually 4 mentioned that idea. 5 Wider interstates. Existing infrastructure 6 in Laredo provides limited alternative routes to 7 motoring public when trains are waiting to move south 8 in Mexico. That actually was mentioned a couple of 9 times, but not just for Laredo. I think we had a 10 comment from the Valley, as well as El Paso. So I 11 just wanted to capture that here. 12 So again, look at these ideas. And I would 13 like to hear from the committee what your thoughts 14 are. Are there any things we're missing, or have we 15 articulated what you, you know, indicated correctly? 16 Does this resonate? I know a couple of you 17 submitted those. So if you want to expound on it, 18 that's fine, too. 19 UNIDENTIFIED SPEAKER: Caroline, if I 20 could. 21 MS. MAYS: Yeah. 22 UNIDENTIFIED SPEAKER: I think in 23 conjunction with not just the actual lanes, I think it 24 would be important for us to look at the border patrol 25 checkpoints, that they do not become choke points for

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1 some of these truck lines and maybe create -- like, we 2 may have in our Points Of Entry. 3 But I know that in Laredo, 35 is becoming a 4 major issue where, during peak hours of the day, 5 you've got miles now because there's only two lanes 6 going into a six-lane border patrol checkpoint area, 7 which two lanes are dedicated to trucks. Therefore, 8 they take two lanes of trucks and vehicles -- lanes 9 may be totally open. 10 So I think that's something we also should 11 review and look at, that those border patrol 12 checkpoints do not become, you know, great gridlock on 13 those major arteries like 35. 14 SECRETARY CASCOS: Okay. We have a 15 recommendation. Okay. Now tell me, how do we do 16 that? 17 UNIDENTIFIED SPEAKER: My recommendation 18 to do it is that we actually talk to BP, CBP, and say, 19 how are you managing those truck lanes at those border 20 patrol checkpoints? Because we've got them down in 21 the Valley, and I'm sure it's not just related to us. 22 I think we should look at especially those major 23 arteries, which are going to be down to the Valley and 24 to 35. 25 And I'm sure -- I don't know what El Paso

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1 has at their end as well that -- as we see the volume 2 of trucks on those highways, they all now concentrate 3 into a border patrol checkpoint, which becomes another 4 inspection point. And you don't replicate what you've 5 got at the Port Of Entry. 6 SECRETARY CASCOS: The -- does anybody 7 have any -- anybody want to chime in on that? I think 8 it's a good point. I think as far as -- the 9 recommendation would be addressing or speaking with 10 CBP border patrol to see -- and maybe even invite them 11 to one of our meetings, you know, to one of our BTAC 12 meetings, maybe somebody from there. 13 The last time we did, we talked about DPS, 14 too, and they're -- and what they're doing, you know. 15 They get checked at the Port Of Entry, and then at 16 least at Cameron they get checked at the Port Of 17 Entry. And then ten miles upstream and just before 18 they get to San Benito, they get -- the trucks get 19 pulled over again and get checked again by DPS. So 20 that's one of the things that we also may want to 21 consider discussing, the DPS check points. 22 Not that we want to circumvent anything, but 23 it's kind of -- you know, they get checked when they 24 come in. They get fully inspected. They drive ten 25 miles, and they get pulled over again. That's the

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1 biggest complaint that I got when I was county judge, 2 about that. We did talk to DPS, and they alleviated a 3 little bit of that. So maybe we can go back and then 4 talk with them about that as well, you know. So I 5 think it works both ways. 6 Steve? 7 When y'all speak, introduce yourselves. 8 Okay? 9 MR. BOECKING: I'm Steve Boecking. Is 10 this not being addressed by the new Single Window 11 Initiative? 12 MS. MAYS: No. This is actually on the 13 highway itself. It's the choke point. If you've 14 driven on 35 coming back from Laredo, there's a 15 checkpoint right there. And you have to get off the 16 interstate; everybody, trucks, passengers, and then 17 they check you. It's, what, how many miles from 18 Laredo? 19 SECRETARY CASCOS: About 90 miles. 20 MS. MAYS: North of Laredo -- 21 UNIDENTIFIED SPEAKER: It's about 30 22 miles. 23 MS. MAYS: -- yeah, about 30 miles. 24 MR. SCHWEBEL: This is the 28-mile 25 marker.

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1 MS. MAYS: Yeah. 2 MR. SCHWEBEL: It's the 28-mile marker 3 coming in right before you get to -- this is Gerry 4 Schwebel again. And what you've got is that -- 5 because it's a two-lane northbound highway, once you 6 get to that point, to the border patrol checkpoint, 7 those two lanes are being taken over by trucks, both 8 trucks. So what happens is when you get to 9 the actual -- to the border patrol checkpoint, they'll 10 open up into six lanes, of which two on the right side 11 are trucks. But the vehicle lanes are wide open 12 because they're standing behind trucks. So what 13 you've got is that -- if you were to make, like, it's 14 proposed there, a right lane is a truck only, you're 15 going to have a longer line. 16 Or maybe, perhaps, it requires more planning 17 on the part of border patrol to say, Hey, if you've 18 got five miles out there, somebody understand, you 19 know, why you have got long lines which are creating, 20 perhaps, new delays on 35. 21 SECRETARY CASCOS: And I'll tell you 22 when it's worse is holidays. I mean, it's -- whether 23 it's Memorial Day or spring break or July 4th coming 24 up, you will have lines. The Cerritos checkpoint is 25 about 89 miles out of Brownsville. Then you've got

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1 the Falfurrias checkpoint. Then you've got -- I mean, 2 I'm sure there's numerous, and I think the challenges 3 are all of the same. 4 MS. MAYS: Yeah. Secretary, one of -- 5 to answer Gerry's question -- this is Caroline Mays -- 6 our TXDOT Laredo District is here, and they have been 7 working with CBP. There's things in the works to 8 address that. You want to comment? Yeah, come to the 9 microphone and comment. 10 SECRETARY CASCOS: Introduce yourself. 11 MS. MAYS: Yes. 12 MR. RODRIGUEZ: This is Robert 13 Rodriguez with the Laredo District. A few weeks ago, 14 we had a meeting with border patrol regarding that 15 issue there at the Mile Marker 28 -- with border 16 patrol. They did mention now they have their tagging. 17 I believe that's what it's called in the Valley. They 18 enrolled two companies, which is the one 19 that transports, I want to say, about 80 to 120 trucks 20 a day. So they're trying to alleviate that with a new 21 tagging. 22 They also started a few weeks ago with the 23 busses, but only with Laredo-Columbia so that they 24 would reach -- they started a new program also with 25 the busses, which is called Inspect Once/Clear Twice,

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1 which now they have border patrol, too, inspecting the 2 vehicles -- I mean, the busses so they don't have to 3 stop at the checkpoint. 4 We just recently started working with TTI, 5 the Texas Transportation Institute. They're going to 6 be doing a study of that area of Mile Marker 29 -- 7 actually all the way from Loop 20 to Mile Marker 29 to 8 work on the traffic congestion. And border patrol is 9 gladly going to be working with them on this issue. 10 And they want to know their short-term solution, 11 mid-term and long-term. 12 And for that we also invited the trucking -- 13 some of the people from the trucking industry. 14 Because border patrol, as I mentioned -- 15 (unintelligible) are going to -- removed from there 16 many, many, many years. So we need to know if we need 17 to buy adjacent properties. We need to expand in five 18 years, ten years. So they also want to know some 19 numbers for the near future so they can do their 20 part. 21 MS. MAYS: Thank you. 22 SECRETARY CASCOS: Thank you. 23 Yes, Mayor Saenz. 24 MR. SAENZ: This is Pete Saenz, Mayor of 25 Laredo, Texas. Thank you, Mr. Secretary and Caroline

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1 and, of course, all to you. 2 Yeah. If I can expand on that issue, too. 3 You know, that -- you know, obviously, I would echo 4 the concerns and the sentiments by Mr. Schwebel. 5 But also, we need to be thinking if we could 6 expand that Item 2. It says, need for commercial 7 truck parking/staging areas. And that's good. But if 8 we can expand it maybe even to include the 9 pre-clearance concept that we have been talking about. 10 I know we mentioned it briefly last meeting, I 11 believe, or I guess other meetings that I've been 12 attending, and bringing in border issues that deal 13 with border issues. 14 If we can get CBP dual Customs basically in 15 some sort of a area on the Mexican side where all of 16 the inspection can be done, all of the Customs 17 inspection. Even DPS may do their inspection as well. 18 So this way it will facilitate the crossing at the 19 bridge and won't create those bottlenecks there at the 20 bridge and the long lines that extend miles into 21 Mexico and vice versa. Sometimes the miles are on our 22 side when the Mexican Customs system is down, or 23 whatever. 24 And I believe the Canadian border has been 25 successful. I think there's been studies. I have

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1 been visiting with some of the TXDOT folks as well, 2 and I think you-all are aware of that. And maybe we 3 need to focus on that process, that system that the 4 Canadians use and apply it to the Mexican border -- 5 you know Texas/Mexican border, our ports of entry. 6 Because obviously, we have a major, major 7 problem in Laredo and, of course, the border as well. 8 Since we handle so much, we need to streamline it and 9 make it more efficient. We do have a smaller version 10 at the airport. At our airport we have dual Customs 11 where we can pre-clear any air freight that lands in 12 Laredo. It can be pre-cleared by Mexican Customs. 13 And by the way, they do carry arms. 14 And the Mexican Constitution has also been 15 amended wherein U.S., the custom folks or federal 16 people can actually go into Mexico and also carry 17 guns. And that's also now being utilized at the 18 Columbian Solidarity Bridge. They're also -- they 19 said Laredo, you know, also controls and owns that 20 bridge on the U.S. side where are inspected. 21 And they feel secure because on the Mexican 22 side, they have got three or four branches of the 23 military. So the U.S. federal people go into Columbia 24 and do their thing, and it just facilitates the 25 crossing of livestock. So we can do that. We can

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1 expand it, but maybe expand it to include all types of 2 inspections. 3 And then I would suggest that whatever 4 system Canada is using and it's worked apparently, 5 that we use it. But even to avoid further 6 inspections, maybe the cargo should be taped or sealed 7 or something where they don't have to, you know, 8 reinspect that at some point north. 9 And, you know, they can inspect maybe the 10 chassis and the wheels, or wherever they think maybe 11 there's contraband or drugs or something in the cab, 12 but avoid additional time in reinspecting the cargo if 13 they suspect something. 14 So anyway, you know, things of this nature 15 need to be implemented. And I would strongly suggest 16 that maybe this committee consider at least 17 investigating and see what Canada is doing to apply 18 this. It's not a novel concept. It's out there, it's 19 my understanding. And we're using semblances of it 20 there in the -- at Columbia and also at our airport. 21 So, yeah, thank you so much. 22 MR. GARCIA: Josue Garcia with the Donna 23 International Bridge. Right now, you know, we're at 24 the stage -- and I want to speak to the one 25 inspection. Our port -- we're currently designing our

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1 port for commercial. And so this is one of the things 2 that we have been really, you know, addressing because 3 that is one of the things that will really, you know, 4 make it expedited. 5 And U.S. Customs and border protection is 6 looking at things on how to redesign or how to master 7 plan a lenient type of a port so they can expedite. 8 So they're well aware, you know, at the field 9 office in Laredo and of the inconveniences that are 10 taking place throughout the border. So, you know, 11 since we're designing our port at this point for 12 commercial, we're tapping into, you know, DOT, DPS 13 and, you know, agriculture, anybody that has to do 14 anything with the inspection. 15 So that's, you know, the approach that we're 16 taking right now. And we pretty much agree that that 17 is a real good point that we need to follow through 18 on. Thank you. 19 SECRETARY CASCOS: Thank you. 20 As we discussed, make sure that you try to 21 keep your comments to about two to three minutes so we 22 can get through all these slides. 23 Caroline. 24 MS. MAYS: Okay. The next slide is 25 primarily on rail. And as you can see here,

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1 discussions about -- or concerns about blocked 2 streets, you know, for trains. And, again, this 3 was -- it's border-wide, you know, trains stopping at 4 international boundaries. I have seen that myself in 5 Laredo and in El Paso whereby, you know, we've had 6 these complaints throughout the border region, one, 7 because the trains go through downtown, you know. 8 So, again, any discussions here anybody 9 wants to expound on this and, you know, talk about, 10 you know, the rail kind of, you know, challenges with 11 the border regions? 12 MR. DOMINGUEZ: Secretary, Arturo 13 Dominguez, Kansas City Southern Railroad. Being 14 directly responsible and working for the railroad 15 company there at Laredo, I have firsthand knowledge 16 and experience of the processes that take place in 17 order to get a train into or out of Mexico. 18 And any railroad people in this room will 19 tell you that it's not a good idea to stop a train for 20 whatever reason. And so the idea is to keep them 21 moving. What is capping the efficiency at Laredo at 22 the very least is the processes that exist, I guess, 23 at the -- right at the authority level going into and 24 out of Mexico. 25 And so it seems that the issue is more of a

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1 documentation matter and, I guess, a processing 2 matter, not the physicality of getting a train to or 3 from Mexico. 4 MR. SAENZ: Again, Pete Saenz from 5 Laredo. If I can chime also on that, too. It appears 6 that the train is stopped primarily by Mexican 7 officials there at the bridge on technicalities, and 8 that is understandable. But those could be done -- no 9 physical inspection or visible inspection is actually 10 done on the bridge. 11 It's just the paperwork -- that some way, 12 somehow at their office they see some inconsistency in 13 their paperwork. And then some way, somehow the train 14 is stopped because there's a sequence of trains or the 15 trains were not properly organized or the merchandise 16 wasn't properly organized. But, then, again the train 17 is stopped. That can be easily done, at least in my 18 humble opinion, at the yards. 19 So again, if we can -- you know, the same 20 concept, the pre-clearance, the secured corridor type 21 concept would be applied. Any issue, you know, should 22 be handled at the yards, be it on the north -- on the 23 U.S. side or on the Mexican side. But allow the 24 trains to go through and keep the fluidity of the 25 trains and, you know, obviously less traffic

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1 congestion. 2 MR. CRISTINA: Paul Cristina with BNSF. 3 The pre-clearance idea, if it worked for trucks, it 4 would work maybe even easier for trains in the yard. 5 But in terms of decongesting border 6 interchanges, we see the -- each border crossing is a 7 system of systems. You have the rail infrastructure, 8 the places where the trains actually sit. And then 9 you have the inspection process that requires 10 technology and people. And at every one of those 11 border crossings, each of those systems is at a 12 different level of capacity. 13 So it might be worthwhile for the committee 14 to consider evaluating the capacity of each of those 15 systems at each of the border crossings and then 16 figure out what investment is needed in order to level 17 the capacity across all of those systems. 18 And the second level of that would to be 19 provide some consistency, find ways to work 20 internationally to provide consistency among those 21 systems of systems at each different border crossing. 22 Because we see variations in the way things are done 23 from one place to another that gives everybody some 24 reasonable expectation about what they're going to be 25 asked to do when they get to that point in the terms

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1 of the decongesting of border interchanges at the 2 border. 3 MS. MAYS: Any other comment? 4 MR. SCHWEBEL: This is Gerry Schwebel 5 again. One of the things that we have talked with 6 Kansas City, Arturo Dominguez, is how much out of a 7 outreach are there within the border communities in 8 regards to the challenges that these railroads are 9 having in these interchanges? 10 And I say that because, you know, I have 11 a -- you know, there's a rail line right next to my 12 office. And when you talk about people that are 13 driving in the community, they're from Mexico or from 14 the U.S. And I see that there's a general lack of 15 disregard for the actual, you know -- what do you call 16 it -- the A-yards. 17 You create a culture because a train is 18 stopped and it's not moving, people will begin to 19 ignore that until, I guess, a train starts moving. 20 And I don't know. If there is something going on, is 21 it outreach informing, you know, to the communities 22 and say, Look, number one, you're not only violating 23 the law by disregarding the signs, but the dangerous 24 side that is associated once a train starts moving. 25 So in English or Spanish because of both

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1 sides of the border, is there some of that going on in 2 other communities? And if there are -- Mayor Saenz, I 3 don't know if there is anything going on like that in 4 Laredo. That's a kind of -- that would help end this 5 process. 6 MS. MAYS: And I think that goes to the 7 Secretary, one of the -- you know, probably to the 8 Secretary. You want to write down one of your other 9 recommendations is, you know, an outreach strategy, 10 developing an outreach strategy for border communities 11 to deal with some of these of issues, especially 12 train crossing issues, blocking of highways, et 13 cetera, you know, people walking across the train 14 tracks when a train is coming, et cetera. So that 15 could be, you know, another, you know, one of your 16 recommendations on the bucket list. 17 But right now I don't, you know, know of any 18 broad, you know, border-wide outreach strategy unless, 19 you know, the mayors and stakeholders hear from the 20 border regions if they have anything specific. 21 MR. SCHWEBEL: If I may be more 22 specific in asking, is it the -- you know, are people 23 just ignoring the signs basically and just dashing 24 through anyway through the -- yeah, we have plenty of 25 that in Laredo. And, of course, that's created, you

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1 know, accidents. And, of course, the railroad company 2 may or may not want to speak to that. 3 But certainly, you know, people get 4 frustrated, especially when they've had to wait 30 to 5 40 minutes sometimes, even longer sometimes, you know, 6 depending on the train situation there at the 7 bridge. 8 If I may add, too, these rail studies -- I 9 know Laredo is undergoing a grade -- you know, 10 above-grade separation study in the area. At some 11 point years ago, the railroad company -- or one of 12 them had -- was considering maybe creating another 13 bridge -- or constructing another bridge and bypassing 14 the inner city. 15 But that hasn't been -- yeah, they decided 16 against that recently. And they want to continue 17 through the inner city, so that puts the burden on us 18 to start thinking about above-grade bridges, in other 19 words, overpasses over the rail lines. 20 So any studies that we can do within the 21 very near future, you know, to accommodate the 22 lessening of traffic congestion in the inner city 23 would be ideal. And I know that Laredo is undergoing 24 some sort of studies along those lines, but it's going 25 to take some time. Thank you.

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1 MS. MAYS: Okay. We will move on to 2 the next slide. Again, this is continuing with the 3 rail theme. And as you can see here, you know, the 4 comments that were made, we need to evaluate and 5 understand the impact of trade. 6 With the Santa Teresa -- I don't know -- a 7 lot of you are not from El Paso. But recently, one of 8 the main railroads, you know, has built a railyard in 9 New Mexico out of El Paso. And so we're really 10 looking at that impact to Texas. Because now it's 11 going to take what was in Texas that was generating 12 jobs and generating, you know, economic activity in 13 Texas and El Paso -- now that has moved to Santa 14 Teresa. 15 So really to look at the impact of that and, 16 you know, look at are there alternative gateways that 17 we can -- you know, meaning Texas can, you know, look 18 at building those gateways and not lose those gateways 19 to neighboring states because that's a big issue for 20 Texas. 21 And then, you know, I think Paul mentioned 22 this, you know, maximizing efficiency at the border 23 with the rail crossing infrastructure. So again, you 24 know, any comments on that would be, you know, very 25 welcome at this point.

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1 I am going to try to move a little bit 2 faster because we're a little bit behind. But, you 3 know, any comments from committee members? I know 4 there are people from El Paso here. Don't make me 5 call you out. 6 MR. HERNANDEZ: This is Frank Hernandez 7 with BNSF. Two things real quick that are tied in. 8 One, there are numerous standardized practices that we 9 could put into effect. Because there is a disconnect, 10 even though it's CBP that handles the same operation 11 at each gateway. 12 And I won't talk about where it works badly. 13 But I have worked at all the gateways along the 14 U.S./Mexico border, except one. And I will tell you 15 that Eagle Pass has a great system, and we have just a 16 tremendous relationship with CBP. I think the mayor 17 can -- well, the mayor of Eagle Pass can attest to 18 that. Because it just works well. Even though 19 there's a lot of operational challenges, the delays 20 are minimal. 21 Secondly, with regard to Clint, Texas, one 22 of the things that I have mentioned to Mr. Hirsh and 23 Cristina with BNSF is the importance of involving the 24 Mexican authorities. Because Clint, Texas actually 25 works better for connecting from the Mexican side with

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1 less challenges than it does at Santa Teresa. And we 2 still maintain the employment figures and so forth 3 because the business would stay within Texas and not 4 go to another state. 5 MS. MAYS: Thank you. Any other 6 comments on this issue? 7 We have Jake GIESBRECHT. Go ahead. 8 MR. GIESBRECHT: This is Jake 9 GIESBRECHT from Presidio. And I am going to comment 10 on what she said on New Mexico and Texas. I think one 11 of the things that we have in Presidio -- I think the 12 relationship between the State of Texas and the state 13 of Chihuahua is very important. And I think that 14 needs to be cultivated. 15 Because I was in -- I'm with the State of 16 Chihuahua Economic Development Team, and I know how 17 hard New Mexico lobbied four or five or eight years 18 ago on this project. And that's not happening only on 19 railroads. It's happening on roads. 20 So if we don't want to lose jobs in Texas 21 and traffic, then we need to intervene a little bit in 22 the relationship with the State of Chihuahua. That's 23 my comment. Thank you. 24 MS. MAYS: Thank you. 25 Ivan.

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1 MR. JAIME: Yeah. Caroline, Ivan Jaime 2 with Union Pacific. Sorry for being late. 3 Union Pacific obviously built the Secretary's 4 terminal. And I would just caution that we're not too 5 short-term in our thinking in terms of direct impact, 6 but more of a competiveness. Ciudad Delicias, El Paso 7 and Juarez Chihuahua region, for those of us that are 8 familiar with that region, has an incredible 9 potential. 10 You know, it's -- for Union Pacific it was 11 not so much about state lines. It was -- I think 12 where the new terminal is to where our headquarters 13 are in El Paso is 13 rail miles. So it's essentially 14 right next door, and the potential of the region 15 entirely over time complements each other really well, 16 as opposed to if we get into a trap of directly 17 competing strictly on city or county limits or state 18 limits. That is just what I wanted to mention there. 19 And then, of course, I caught Mayor Saenz -- 20 my good friend Mayor Saenz's comments about great 21 separation. There was a mention of Eagle Pass. I 22 would just echo the notion of great separations. Rail 23 traffic is going to continue to grow. 24 The impact on the communities will continue 25 to be felt. And the sooner that we can start thinking

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1 about how to allow trains and people freely around 2 each other, I think the better everybody will be. 3 Thank you, Caroline. 4 MS. MAYS: Thank you. 5 Any other comments? We will move on. Okay. 6 Then the next topic is really on the actual bridge 7 crossings themselves. So you can see here a lot about 8 DPS inspection issues that was mentioned earlier. You 9 know, a lot of this is just streamline inspections. 10 So again, the group, please feel free to 11 chime in. Any thoughts to expand and expound on that? 12 Y'all are very quiet. You don't have any inspection 13 issues? 14 Yes, Matthew. Let's go with Matthew first. 15 MR. MCELROY: I guess I would start 16 with the idea of streamlining the freight inspections. 17 It's not just CBP. When we look at each segment of 18 how long it takes to cross from Juarez to El Paso with 19 the aduana inspection in queue it's probably double or 20 triple what it is at CBP. So CBP is waiting for 21 trucks to leave aduana. 22 So if you can do a joint inspection or 23 something else, that is the longer-term solution, as 24 opposed to just keeping CBP as the point for 25 streamlining inspections.

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1 The other thing that I want to talk about is 2 the better fluidity of trucks on the border. That 3 whole system of having to do another DPS inspection is 4 something that we need to take a much longer look at. 5 Because the way it's working right now, it's not 6 conducive to getting trucks across the bridge quickly. 7 And many, many times it's actually the U.S. 8 trucks that fail the inspections, not the Mexican 9 trucks. And so the reason it was put in place was to 10 catch all of these Mexican trucks that were not going 11 to meet inspections. But by far and away, it's 12 actually the U.S. trucks that don't pass that 13 inspection. 14 SECRETARY CASCOS: As follow-up to 15 that, do you have any statistical data that -- I'm not 16 disputing it, but do you have anything that basically 17 supports that so we can somehow include that in our -- 18 MR. MCELROY: Absolutely, we can get 19 that, give you field ratings. 20 SECRETARY CASCOS: Can you get that to 21 us -- 22 ` MR. MCELROY: Sure. 23 SECRETARY CASCOS: -- that there's more 24 U.S. trucks that are failing versus Mexican trucks 25 that are failing?

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1 MR. MCELROY: Yes, absolutely. 2 SECRETARY CASCOS: I've never heard 3 that. That's interesting. 4 UNIDENTIFIED SPEAKER: Very 5 interesting. 6 MS. RAMIREZ: Mr. Secretary? 7 SECRETARY CASCOS: Yes. 8 MS. RAMIREZ: We are from 9 Progressive -- Julie Ramirez from Progressive Bridge. 10 And obviously I'm a small -- we're a small port, 11 nothing like what Laredo and Eagle Pass experience. 12 But we do have an issue with the DPS, or it's not an 13 issue, but it's a problem. 14 We are privately owned, and they do come 15 into our premises to inspect the trucks, just 16 something that I understood was not supposed to 17 happen. So we would like -- or I would think that we 18 should have someone from CBP here to help us, someone 19 from DPS. I don't -- I think we had decided we were 20 going to invite somebody, and I don't see anybody here 21 that could probably explain why and how and where 22 we're going with all of this. 23 When -- a few months back when the Governor 24 sent in 1,000 agents, we were bombarded at the bridge 25 with that. Obviously, all our trucks were being

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1 stopped. They were being fined. I -- they were being 2 fined in my property. 3 And I had to go out there and say, Hey, 4 look, you're on our property. Well, who are you? And 5 what are you doing? And no disrespect to the 6 troopers, but it had to be told. 7 So we need to have people from these 8 agencies here to explain why and how and how we're 9 going to streamline all of this. I just -- and the 10 same with CBP. I had invited second in command to 11 come in to this meeting so that he could try to 12 explain, you know, all of these inspections that are 13 going on. 14 When Homeland Security became Homeland 15 Security, I thought that's what it was for, to bring 16 everybody together and just get one thing done at a 17 time. But obviously, we're not there. We're dealing 18 with Customs. We're dealing with DPS. We're dealing 19 with immigration. We're dealing with -- we're dealing 20 with everything, so -- 21 Anyway, that's all that I have to say about 22 it. 23 SECRETARY CASCOS: Yeah. I think -- 24 that was brought up, I think, at the last meeting to 25 invite somebody from the Department of Public Safety

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1 to join us. 2 AUDIENCE: Yeah. 3 SECRETARY CASCOS: And I think we need 4 to make that effort again. Maybe El Paso -- we can 5 maybe get the commander of El Paso and maybe even get 6 somebody, you know, from the Austin office of DPS, 7 whether Steve McCraw or some of the lieutenants, to go 8 and just kind of explain to us what is going on, and 9 not just what's a task force and we're doing this. 10 I think we need to look -- you know, and if 11 you could get information about the U.S. trucks more 12 so than Mexican trucks before the El Paso meeting of 13 September 7th, I think that would be great for us to 14 have, if you can do that, please. 15 MR. MCELROY: I'll get that. And then 16 the other thing I would mention here that is missing 17 is that southbound inspections are really problematic 18 that CBP does. They -- none of the bridges, at least 19 in the El Paso region, were ever constructed with the 20 idea that southbound inspections would be done. So 21 now they're doing southbound inspections, and it's 22 pushing trucks all the way back up into every road and 23 highway in our region. 24 MR. MARTINEZ: Secretary, Representative 25 Armando Martinez from District 39. When we get those

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1 numbers, if we could please have numbers sent to our 2 office as well. I'm very interested. 3 SECRETARY CASCOS: Yeah. 4 Sam, how are you doing today? 5 MR. VALE: I'm doing fine once I found 6 the college. 7 SECRETARY CASCOS: SMU is not hard to 8 find. 9 MR. VALE: It's not like Austin where 10 you're going to run into it, one way or the other. 11 In any event, Sam Vale, by the way, for the 12 record. The issues are all of the above right now. 13 Commercial traffic has not decreased, even though 14 their tourism traffic has decreased and is on a slight 15 rise. 16 If you're looking at the commercial traffic, 17 it never really went below 10 percent. And it's been 18 growing every year, more so in the bigger ports than 19 in the smaller ports, depending on how many issues you 20 have locally. 21 But you talk about Customs issues. The 22 first and biggest and most important one is there's 23 not enough of them. They're grossly understaffed. I 24 can tell you right now we have with Laredo and five 25 other communities what we call the South Texas Assets

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1 Consortium. We're certified. We can reimburse 2 Customs for their services, but you can't reimburse 3 for an officer that's not there. 4 So we have money that goes begging -- I 5 mean, isn't this kind of crazy to want to pay for 6 custom services. It's like a user fee. But we agreed 7 to do it in the hope that it would be a short-term 8 situation that we could get justification for the 9 staffing. 10 Well, they don't exist. The State of Texas 11 gave us a $650,000 grant to match 50 percent of our 12 reimbursements for ag' specialists. We have not spent 13 a penny of it because we don't have ag' specialists 14 available. So you start with that litany and go 15 across the protocols, the rules, the regulations. 16 Now, we had the problem with DPS and DOT. 17 But we just forced them to be in the same building. 18 We're a private company, Julie. We built the 19 building. We told the federal government that we're 20 there. We got our Congressman involved. And we said, 21 We want them both in the same facility. 22 And so we don't have dual inspections, but 23 that's because we proactively went in and said, one 24 building. You either want to use it; or you don't 25 want to use it; or you can get out on the highway.

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1 And that's the way it started, and we forced them. 2 They fought with each other for a while, I 3 mean, like, whose desk is in front of the bathroom and 4 stuff like that, real important issues. But they're 5 all -- all of those guys are trying to do a job, but 6 there is a lack of consistency in the way they're 7 receiving directions on what to do. 8 So you can break all of these into small 9 pieces and really get into it, which probably would be 10 beneficial. But I don't know that you can do it, 11 Mr. Secretary, in such a large forum. But you can get 12 into that, and it's important to Texas. 13 SECRETARY CASCOS: Mr. Bazan. 14 MR. BAZAN: Mr. Secretary, real quick. 15 SECRETARY CASCOS: Introduce yourself. 16 MR. BAZAN: Yes. Luis Bazan, Pharr 17 Bridge. I guess my biggest thing, I'm looking at that 18 streamlining issue there. And you're mentioning CBP 19 and border patrol. I think we're talking about two 20 different agencies here. 21 Border patrol are known as the guys in 22 green. CBP are known as the guys in blue. At least 23 that's the way I know it. In our port, for example, 24 we don't have them side-by-side inspecting cargo. 25 That's up the road. That's up where -- you know,

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1 close to Falfurrias. 2 So I think there needs to be also a fine 3 line there separating the two because, you know, I 4 don't know in what ports we actually have border 5 patrol inside the facility, inside the federal 6 facility inspecting side-by-side. So I just wanted to 7 shed some light on that. 8 SECRETARY CASCOS: All right. Thank 9 you, Luis. 10 MR. SCHWEBEL: This is Gerry Schwebel. 11 Our distinction is we -- the green shirts are at the 12 checkpoints. Okay? The blue shirts are at the Port 13 Of Entry. They're both checking, one way or the 14 other, freight, you know, if you look at it that way. 15 That's where, I think, fellows are coming from, in 16 that direction. 17 But I -- following up on your point about 18 going and getting feedback from CBP or DPS, I do think 19 that this committee needs to hear from those folks. 20 Those programs or those projects that are trying to 21 streamline or make more efficient the operation at the 22 Port Of Entry, you know, whether they're pilot 23 projects, like the one in Laredo or the one in 24 Chihuahua that impacts El Paso, they -- the more 25 knowledge we have of single-window initiatives -- you

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1 know, those are the programs that are related to trade 2 to create greater efficiency. 3 But also with that efficiency comes greater 4 volume of vehicles on our transportation system. And 5 how are we planning and coordinating that 6 transportation highway system with that increased 7 volume of trade that Sam Vale is talking about? And 8 it impacts safety inspection. 9 It impacts, you know, how many citations 10 they're going to use for that and the trends that are 11 coming down the road right now as a result of that 12 increase of trade. We have got to be a step ahead. 13 We seem to be catching up, and I think that's why I'm 14 looking forward to working with this committee to try 15 to identify those trends of the future. 16 MS. MAYS: Thank you. And let's move 17 on to the next slide. This is about funding. I have 18 a few more slides, so we're trying to wrap this up by 19 about 10:00 so we can get to the next session. 20 Funding, any comments on that? You will 21 have a lot of money. 22 SECRETARY CASCOS: Where is Jesse? 23 MR. HEREFORD: Right here. 24 SECRETARY CASCOS: Okay. Just bring 25 your checkbook.

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1 MR. HEREFORD: It will bounce, but 2 we're good. 3 SECRETARY CASCOS: Sounds familiar. 4 MS. MAYS: Any comments on this? 5 MR. SAENZ: It's Pete Saenz again, Mayor 6 of Laredo, Texas. Yeah, the World Trade Bridge, as 7 you know, is really the heavy lifter for the City of 8 Laredo. You know, we do over $200 billion worth of 9 trade. 10 At the last visit that the Commissioner was 11 there, you know, he noticed, you know, the long lines 12 and suggested -- or asked specifically a CBP officer 13 what, you know, he personally would do. And he said, 14 Well, if we had another lane coming from Mexico into 15 the U.S., an expedited lane or a trusted, you know, 16 shipper lane, you know, that is what we would -- he 17 would recommend. 18 And it made a lot of sense. So the City of 19 Laredo is footing the bill and creating that lane. 20 And that's going to take care of about 30 or 40 21 percent of that traffic. Especially the empty trucks 22 that are coming south to north, you know, they could 23 segregate them and use that lane. And that obviously 24 is going to save time. 25 And then on top of that, we're doing some

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1 other exit booths with weigh motion -- 2 weighing-in-motion scales. But we're investing as 3 well with the City of Laredo. Since we do own the 4 bridges, you know, it's incumbent upon us to -- you 5 know, to invest in that. But we can't do it all, too. 6 And this is where the partnership or the partnering 7 comes in, and we expect TXDOT to help out as well. 8 So anyway, we're cognizant of that and the 9 municipalities. And they should come up to bat, so to 10 speak, and do what they need to do. Thank you, 11 Secretary. 12 SECRETARY CASCOS: Sam. 13 MR. VALE: When I see things up there 14 like system funding, I think those are probably the 15 most important things that we can deal with because it 16 has to do with access to points of entry. 17 And as some of us pointed out before, for 18 various reasons virtually all of the so-called border 19 money that was done the last -- in this first 20 go-around, I mean, not even Laredo got a penny, much 21 less anybody else. I think Eagle Pass might have 22 gotten some dollars. But of this huge $60-million pot 23 divided between three districts for basically 24 $10 million a year, well, you can't even pave a street 25 in Dallas for that.

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1 But it was supposed to be kind of a seed -- 2 it was a seed fund that you could draw from other 3 pots. And until -- you remember a month ago the 4 famous $60-million announcement. Well, after you 5 break it up, there's not much there. And you've got 6 to pull from other sources within TXDOT because the 7 off-system funds -- the off-system projects, as I 8 understand it, are those that are supported by the 9 community in order to facilitate trade and commerce. 10 The in-system are the projects that generally 11 are longer term in planning that TXDOT generated, and 12 those are going long. But these little things that 13 you're talking about, like what the City of Laredo is 14 doing, all of those are off-system. 15 But we have got to get that better 16 coordinated, and I think this committee can do a lot 17 to influence that process because it is a TXDOT group. 18 Thank you. 19 MS. MAYS: Okay. We will move on to 20 the next issue. This is a lot of information in here. 21 But again, how do -- what we at TXDOT do -- or you-all 22 do is to understand what the issues are. So this had 23 to do a lot with the data, analysis, analytical tools, 24 studies that are needed, you know. 25 So one is expand TXDOT Preliminary GPS

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1 Seven-Day -- this is the maps that I showed at the 2 last meeting showing, you know, 2,000 trucks from, you 3 know, the three border regions going throughout the 4 United States. There was a request whether we have 5 those by each POE, which we don't. So I think that 6 comment is indicating that we need to look at 7 expanding that. 8 And then there were several comments about 9 understanding cross-border freight by origin and 10 destination by each POE. Because if I asked any of 11 you right now, do you know what comes through your 12 Port Of Entry and where it goes, anybody know? And 13 probably the answer is no because everybody is quiet. 14 So those are some of the things that we need 15 to be looking at and understanding and telling the 16 border stories that what comes out of the port of -- 17 you know, the World Trade Bridge, where that should 18 go. It comes out of Pharr. It comes out of El Paso. 19 Each of those bridges, you know, to understand that -- 20 so that's one of the comments there, you know. 21 And then one was looking at the 22 infrastructure, at the POEs themselves. You know, 23 some of it is aging. How can we better address those? 24 So again, I'm going to throw it to the committee to 25 have discussions on these. No comments?

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1 MR. SCHWEBEL: This is Schwebel again. 2 My comments were in regards to -- we need to 3 understand clearly what we're up against in order to 4 plan what we need for the future. 5 And I think there's -- you know, there's a 6 general -- we don't know -- I hear Ghana and I hear El 7 Paso. We didn't talk about Laredo. You know, usually 8 the ones that speak the loudest are the ones that 9 control the mike. 10 But I would like to know what's going on in 11 Presidio. I would like to know more about what's 12 going on in El Paso and talking about Eagle Pass. And 13 I think that if we have the assessment of what 14 projects are ongoing right now and maybe innovative 15 mechanisms for financing or funding some of those 16 programs so that maybe what may be good for Laredo may 17 be good for Eagle Pass or El Paso, instead of every 18 community, you know, in Texas just working 19 independently, that's one of the things that I think 20 we can look at. 21 And then after that understanding, what is 22 going on with our Mexican counterparts. You have new 23 Governors with new initiatives, you know, as well on 24 the Mexican side. That planning -- maybe doing some 25 planning on the infrastructure for their Ports Of

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1 Entry. And are we coordinating with them those 2 initiatives as well? That's what I would like to see 3 us have more dialogue on. 4 MR. CRISTINA: And Paul Cristina with 5 BNSF. I think that as we're talking, there's a link 6 between that first bullet that says identifying most 7 effective module investments. There's a link there 8 between that and the public/private partnership 9 discussion that was had on the other side because the 10 State, you know, cannot direct how the free market 11 moves goods and services. But it does influence 12 things by making grant opportunities available for 13 different types -- for certain types of facilities or 14 generating specification for the things that the State 15 would like to see. That happens in other places as 16 well. 17 SECRETARY CASCOS: Yeah. I think Gerry 18 brought up a good point. And I think that even though 19 we're here as a committee that's identifying -- or 20 trying to identify the border as -- this is the way I 21 see it -- as a region, okay, which you're kind of 22 alluding to. Let's talk about what every -- 23 But at the end of the day when we come here, 24 we're talking about our individual communities, our 25 individual challenges, our individual bridges. And it

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1 kind of tends to take focus away from the regional 2 concept. And that's very hard because at the end of 3 the day, many of -- well, not many more, but we're 4 very parochial in what we wanted. You know, it's all 5 in Brownsville or Pharr or Laredo, or wherever it is. 6 And I think maybe for the next meeting that 7 we're going to have in El Paso, maybe dedicate a good 8 chunk of time to learning about the different points 9 of entry and what their challenges are and identifying 10 exactly what you're talking about. 11 You don't know what is impacting Presidio or 12 Eagle Pass, per se, you know, because, you know, 13 you're focusing -- I mean, with all due respect, is 14 Laredo like what Mayor Saenz -- it's Laredo. You 15 know, that's fine. We need to hear all of those. 16 But I think it would behoove all of us if we 17 heard from each Port Of Entry as to what the 18 challenges are and also -- you can also extend it to 19 the inland port of San Antonio and the port of Dallas, 20 you know, and talk about those things that we have. 21 So maybe for the next meeting, send it out. 22 After this -- it's September 7th. You've got plenty 23 of time to try to identify and maybe give that Port Of 24 Entry a good 20 minutes, 15 or 20 minutes to talk 25 about what is relevant in that Port Of Entry. So

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1 maybe we can get a little bit more global perspective. 2 I see it from the State level. But maybe 3 those of you that are not familiar with what is going 4 on in Brownsville or Pharr or in, you know, Progreso 5 or whatever it is, come up with 15, like, your 6 challenges, what they are, what you see. Okay? So 7 let's shoot for that for the September 7th meeting. 8 Okay? 9 MR. HIRSH: Paul Hirsh from BNSF. I 10 agree 100 percent with what you just said. But I 11 think that it's important to consider the short-term 12 on the promise that each Port Of Entry has at least 13 time for those to have another look, which is what 14 Caroline was saying about understanding where is the 15 origin in this nation of all the freight that goes 16 through the border. Because that is what is going to 17 determine eventually what should go and what mode of 18 transportation and what's the ultimate crossing for 19 that. 20 So, yes, you need to fix the problems that 21 all the cross towns have right now short-term. But 22 what is the best strategy long-term for the State of 23 Texas to move freight across the border. And if you 24 don't have information of the origin in this nation 25 and type of commodity and where it goes, it's very

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1 difficult to determine what the states want to be, you 2 know, in 10, 15, 20, 30 years from now. 3 SECRETARY CASCOS: Well, then, for that 4 September 7th meeting, you may want to come up with a 5 15- or 20-minute presentation, too, as to where you 6 see the long-term effect. Obviously, the rail is a 7 very significant, you know, transportation mode. 8 Maybe come up with something as to how you see it from 9 your perspective where you think those investments 10 should be, where you think we should go in the next 11 15, 20 years in terms of transportation. 12 MR. HIRSH: And we're fine doing that. 13 The pilot is missing to have -- I think, a good 14 assessment of that is that the information that she 15 was asking and nobody could respond to, we don't have 16 that information. 17 SECRETARY CASCOS: Right. 18 MR. HIRSH: That's something that we, as 19 a company, don't have. And I think that a lot of 20 people I know in the room that works on that 21 information, how can we make sure that we have that 22 information that will allow us to make the right 23 decision? 24 SECRETARY CASCOS: We will work towards 25 that as well. Keep in mind that this committee is not

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1 a short-term ad hoc committee. This is supposed to be 2 a long-term planning committee. You know, we're 3 having a lot of meetings very quickly. We have some 4 catching up to do, but we're going to do that. So 5 please, I mean, I want you to feel free to engage. 6 As the Mayor says, yesterday in Laredo, we 7 had lively discussions on it. And I think those are 8 important. So if you're not ready by September the 9 7th, whatever it is, you know what, it's not the end 10 of the world. We will follow up for the next meeting. 11 This is going to be a long-term commitment 12 from myself and hopefully most of these committee 13 members that have been here for a while. So 14 hopefully, you will get the info that you need as 15 well. Okay? 16 Go ahead. 17 MS. MAYS: Yeah. So I was going to say 18 brace yourself. Okay? We're going to be doing great 19 work, but we need a lot of your input. So we will be 20 reaching out to, you know, corresponding bridges and 21 communities. When we go to El Paso, we're definitely 22 going to be reaching out to them to make those 23 presentations. And I think that's really the key 24 here. 25 At the end of the day, we need to understand

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1 each of the issues. And then the first step is 2 understanding issues at each of the POEs and the 3 regions, you know, and then bubble that up. You know, 4 at the end of the day, we need you to think about 5 border-wide, you know, issues and how can we 6 articulate that without kind of each of the POE 7 issues. 8 But I think at the end of the day, you're 9 going to find out that a lot of issues are the same. 10 They might just be at different scales. So how do we 11 have one voice to articulate those issues as this 12 committee moves forward, you know, so that when the 13 strategies are developed, they're developed that 14 benefits everybody. 15 Whether you're down in Laredo or El Paso, 16 everybody is kind of in the same boat. The issues are 17 the same and how to address them, and that's really 18 going to be up to you-all to do that. 19 SECRETARY CASCOS: Sam, real quick. 20 MR. VALE: Mr. Secretary and members, 21 one of the things that we all talk about but that we 22 really don't do together is we try to convince CBP and 23 federal agencies and state agencies. You better start 24 looking at the Points Of Entry as a system, not Laredo 25 versus Pharr or Eagle Pass or El Paso. Because from

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1 the interest of the State of Texas, which we all fall 2 under that umbrella, we're creating -- it's a system 3 that must be functional. And it has to be functional 4 all over because you have to give industry multiple 5 choices. 6 The minute you reduce industry to one 7 choice, they feel that they -- prices are higher, 8 everything goes up. So when you -- if you want to 9 know how Delphi works, they know more about every Port 10 Of Entry's logistics than any other competitor of 11 theirs. But they go out and physically study it, but 12 they keep it to themselves. 13 But we should look at it as a system. How 14 many lanes are out there? How many are functional? 15 How many are staffed from the point of view. Then the 16 individuals within that will have to compete for their 17 resources. But the State needs to help us facilitate 18 road accesses, all of that and I still think join 19 together with us when we try to talk to the 20 congressmen and the senators for funding. 21 SECRETARY CASCOS: Thank you, Sam. And 22 just as a final point before we go to the next slide, 23 keep in mind that we have 28 Points of Entry between 24 Brownsville and El Paso. 28 Points of Entry, and 25 there are not 28 representatives here today. Okay?

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1 MS. MAYS: Okay. Yeah. We're going to 2 move to the next slide. It's kind of related to the 3 same issue, I think. Some of you have already alluded 4 to this first point here, the need to have a master 5 infrastructure plan, in this case not just for the 6 POEs. I think some of your comments really, you know, 7 resonated with this point is that we need to look at 8 it as a system. And I think this Point No. 1 misses 9 that because it's just looking at the POEs. 10 The POEs wouldn't function without the 11 transportation system and a network in place. So I 12 think I'll broaden that out to make sure that, you 13 know, we're capturing the entire system here. 14 So, again, a couple of these bullets, if 15 anybody feels inclined to discuss it, that's fine. 16 But if not, we can need move to the next one. I will 17 give you one second or two. 18 Okay. We will move to the next one. And 19 this one, I think, was alluded to earlier as really 20 communication, coordination and collaboration. I 21 think Gerry mentioned, you know, are we communicating 22 to the border communities about issues there? 23 But this goes beyond that, is collaborating 24 with our Mexican counterparts, collaborating between 25 you-all, the border communities. You know, wherever,

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1 El Paso, Laredo and the Valley region, you're all 2 communicating. This is a forum for that, but you have 3 to do it outside of this, you know, collaborating and 4 communicating on a fairly regular basis to share 5 ideas, share challenges, share how you are solving 6 those challenges. 7 So, again, don't look at this as it's 8 somebody else. It's really in this room being able to 9 talk to each other and be able to use each other as a 10 resource. So I want to hear a little bit from you-all 11 about this. 12 MR. DOMINGUEZ: Arturo Dominguez, Kansas 13 City Southern. I believe it's very important that we 14 do engage our Mexican counterparts. We're all talking 15 about working in unison together, developing a system 16 on the U.S. side of the border and on the Texas side 17 of the border. But we have no idea what is happening 18 on the Mexican side. 19 They, like us, have little kingdoms. Theirs 20 are more defined because you have -- each port has 21 different ideas about how to run their own port. They 22 don't have the same rules in one port that apply in 23 another. That is just the way the constitution is 24 written. And it's within their right to operate that 25 way.

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1 So I think we probably need to engage them 2 as a border community along the Texas/Mexico border 3 and understand what their needs are. What do they 4 need so that they can do their job better? We don't 5 want to compromise what their objectives are. Mexican 6 Custom's objectives are different than U.S. Custom's 7 objectives. So we need to ask them as well. You 8 know, what do you need to make your job better? 9 SECRETARY CASCOS: Thank you. 10 MR. HIRSH: And I think adding to that, 11 it's not only what they need in the way that Mexican 12 government needs in each of the different states. 13 But, you know, you can build a perfect infrastructure 14 in the U.S. and having, you know, ten lanes going to 15 the border. If you're going to have one that's not 16 joining the other side, it's not going to do you any 17 good. 18 So it not only has to deal with all the 19 regulations and paperwork and joint inspections like 20 what was discussed before, but also make sure that the 21 infrastructure is going to be on the other side as 22 well. 23 SECRETARY CASCOS: Well, we have talked 24 about that from my office's perspective in terms of 25 what we're talking about in -- we've talked to

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1 Chairman Luis from TXDOT when we visited Presidio and 2 El Paso. We talked about -- it's not just important 3 that we do our thing here in identifying the 4 infrastructure challenges that we have on the Texas 5 side. You're absolutely right. 6 It does no good to develop our 7 infrastructure here if our Mexican counterparts don't 8 develop their infrastructure. And he's going to say a 9 few words in a few minutes. If they don't develop in 10 coordination with our infrastructure projects, if they 11 do not coordinate and improve their infrastructure, 12 you're right. It does no good to have a 13 multi-interstate highway leaving our Texas Port Of 14 Entry five or six lanes northward if there's a 15 one-lane or two-lane coming from, you know, the Point 16 Of Entry on the Mexican side. You're absolutely 17 right. 18 And we are working with that. There's 19 another committee that we met with yesterday in 20 talking with our Mexican counterparts. But it's going 21 to be challenging because dealing with Mexico is a 22 little bit different. There's a lot more hurdles, you 23 know, to deal with. There's a lot of political 24 ramifications dealing with, you know, the local, state 25 and federal, depending on what party is what. Those

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1 are the realities of it. But, you know what? I agree 2 with you and that's something that we're working on as 3 well. 4 MS. MAYS: Okay. Thank you. 5 UNIDENTIFIED SPEAKER: One suggestion 6 that I would make, too, Mr. Secretary, is the Consul 7 in the Valley, the Consul General -- 8 SECRETARY CASCOS: We've got one here, 9 and he's going to say a few words. 10 UNIDENTIFIED SPEAKER: Oh, wonderful, 11 yeah. Because I think they have the bigger scope. 12 You know, they have the Washington/Austin versus -- 13 you know, the capitals of the states. And they can 14 kind of have a good sense of what the politics are. 15 Not that you are free to discuss that here, but -- 16 SECRETARY CASCOS: Not here. 17 UNIDENTIFIED SPEAKER: Okay. Good. 18 Thank you. 19 UNIDENTIFIED SPEAKER: Mr. Secretary, 20 if I may say something. 21 SECRETARY CASCOS: Yes. 22 UNIDENTIFIED SPEAKER: I think it would 23 be important to also have a lot of the decision makers 24 be at the next meeting. Just because, you know, for 25 years -- and I have two international bridges in my

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1 district. And that would be Donna and Progreso 2 Bridge. And for years you've heard the Progreso 3 Bridge and their import lot and the difficulties they 4 have had about opening that import lot that would be a 5 big impact not only for the Rio Grande Valley, but for 6 the State of Texas. 7 So I think that would be very important to 8 help them and find out exactly what they need to do 9 and what steps they need to do and the type of time 10 lines we have in front of us in order to make that 11 happen and come to fruition. 12 SECRETARY CASCOS: Thank you. 13 MS. MAYS: This is the last slide. 14 And, again, this is -- some of this has already been 15 talked about, you know, promoting trade and what needs 16 to be done. But we just wanted to kind of highlight 17 some of the issues here that were mentioned that, you 18 know, kind of fit within that. 19 But again, like I mentioned, a lot of this 20 has been discussed already. So unless anybody really 21 wants to talk about any of these, we can close this 22 session. Any final comments from any of the committee 23 meetings? And again, this is the first kind of -- 24 Oh, Jake. 25 MR. GIESBRECHT: Mr. Secretary, thank

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1 you. Yes, I have one -- I would like to comment on 2 what the Mayor from Laredo said earlier about the 3 Canadian northern border. I used to work at the 4 northern border and the deficiencies that they have 5 over there through . And Stan, I met him in 6 Mexico City when he was at the meeting with Sam. 7 And they just have a lot of -- I would like 8 to really emphasize that we concentrate on that a 9 little bit, if we could get that southern border more 10 efficient. Because it's all in efficiency. We used 11 to -- they can cross 12,000 trucks through the town of 12 Windsor, Ontario with 20 stoplights and not have any 13 traffic jam in one 24-hour period. And we cannot do 14 30 trucks in Presidio running through the same thing. 15 We have -- I think we're on a different playing field. 16 SECRETARY CASCOS: I was in Canada a 17 couple of weeks ago and visited a Point Of Entry in 18 Buffalo, New York because I wanted to see firsthand, 19 you know, why, you know, exactly what you're saying. 20 And that's something -- who knows, maybe we can plan a 21 trip to Canada. 22 MS. MAYS: I was going to say that. 23 I'm Canadian, so I could get you guys in Canada with 24 no problem. But to the Secretary's point, actually 25 Matthew Rooney -- that's on the agenda. We're going

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1 to be going to Detroit-Windsor next week. He, you 2 know, has a group that he oversees that looks at 3 border issues north and south. So he's going to touch 4 on that. 5 But I think, you know, the Secretary will 6 have to decide and the committee will decide if that's 7 something that the committee wants to do as a whole, 8 to really take a trip up there, you know, and look at 9 that firsthand. Because I don't know if any of you 10 have been there. You know, Jake, the Secretary and 11 others have been to the Canadian border. It's night 12 and day, you know, looking at that. 13 I was horrified when I went to the southern 14 border and I saw people walking in 110 degrees walking 15 across the border and waiting in line for hours. 16 So again, learning from the northern border 17 and seeing what the issues are -- we can look and see 18 if we can get, you know, people who know the border to 19 come and present. So that's, you know, another option 20 we can do. But I think seeing is believing. So 21 again, I will leave it to the Secretary and then 22 you-all to decide really what you want to do. We can 23 go either way, invite them here or you-all go up 24 there. 25 SECRETARY CASCOS: I think that -- and I

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1 spoke to the Canadian official about going back again. 2 It was impressive, and I think it would -- I know it 3 would be a cost issue for some folks, and maybe not 4 everybody could go. But we can discuss that at some 5 point in the future before something -- you know, 6 maybe plan a trip to Toronto or to Buffalo, New York 7 and then plan maybe a good -- I'll tell you, when I 8 went, it was four days. It was one day going up, one 9 day coming back and two days there. 10 But my issue was -- one of the stops I had 11 was at a border Port Of Entry. And they were 12 gracious. They toured us. We could probably do a 13 three-day deal, one day just to focus on that Port Of 14 Entry. And, you know, that could be a good half-day 15 deal. We might be able to get away with it maybe 16 going up for -- maybe for two-and-a-half days, or 17 something, maybe two nights, three days. But that's 18 something that we can poll everybody and maybe 19 discuss, see if that would be of an interest. 20 It just gives you a whole different 21 perspective on why is it that we have a -- your point 22 was exactly right. I mean, they were very, very 23 fluid. And what I could see was that the 24 communications between the U.S. port and the Canadian 25 port, the people was so different. They actually --

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1 they interacted very, very well. 2 And at the meeting yesterday, we talked 3 about that a little bit at our Good Neighbor Committee 4 Meeting yesterday that Mayor Saenz chairs. And I 5 think, why is the difference? Maybe the bureaucracy 6 is different. I don't know what it is, but that's 7 something we want to consider. You know, I think it 8 would be worthwhile to go look at it and see how they 9 do it on the north end and maybe learn from how they 10 do it. It may not fit, but at least it gives us an 11 idea or a perspective. 12 Are you through with that? 13 MS. MAYS: Yes. We're done with this 14 session. So Secretary -- 15 SECRETARY CASCOS: Yes. Before we go 16 on to the next session, I've got two special guests, 17 one that I just saw walk in a few minutes ago, but -- 18 and one sitting to my left. 19 I will tell you that for those of y'all that 20 have not noticed -- and I've noticed it -- there's a 21 whole different relationship now between Texas and 22 Mexico than what it was, you know, a year-and-a-half 23 or two years ago. I mean, it's totally different. 24 We've got more interaction with the Consul Generals. 25 I have got to meet most of them already, and

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1 I have met, Francisco sometime back. But there's a 2 lot more engagement. And I think that that goes to 3 the -- and there's not a political announcement, but I 4 think it really does go to the Governor's perspective 5 on the importance that the border plays. 6 And I think he has brought it to a different 7 level. I think he -- I think by the way we're meeting 8 and engaging, it's something that -- he recognizes the 9 importance of the juggernaut that the border is for 10 the state and for the country. 11 And what I tell people when I'm out selling 12 Texas -- you know, Texas is the economic juggernaut of 13 this nation. Other people may not like it, but that's 14 a fact. That's just the way it is. And the border is 15 one of those economic juggernauts of this state. And 16 so -- and I think it's important, so I will tell you. 17 With that, I'm going to introduce Francisco 18 de la Torre Galindo, who is the General Consul 19 stationed in Dallas. He's become a good friend to me 20 and to Texas. But if y'all have not seen the 21 difference, you start looking at where we were a year 22 or two years ago and where we are today. And I think 23 he can better attest to that because I think he's 24 right at the front lines. 25 So with that, let me introduce the Honorable

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1 Francisco de la Torre Galindo, the General Consul 2 stationed here in Dallas, Texas. 3 CONSUL GALINDO: Thank you, Secretary. 4 SECRETARY CASCOS: No applause yet. 5 CONSUL GALINDO: I would like to begin 6 with something. If you go to Canada, please invite 7 me. 8 SECRETARY CASCOS: Okay. You got it. 9 CONSUL GALINDO: That's the first 10 thing. 11 SECRETARY CASCOS: You know Sarah 12 Winslow? 13 CONSUL GALINDO: Yes, of course. 14 SECRETARY CASCOS: She went. 15 CONSUL GALINDO: Right. 16 I am a very lucky man. I have been 17 appointed recently, June 1st. I just arrived to 18 Texas, and I'm lucky to be in Texas. This is a great 19 state. And to be in Dallas, it's a great community. 20 The second reason I am lucky is to have the 21 opportunity to meet with the stakeholders of the 22 Border Trade just a month from arriving here. It's 23 great to be here. 24 The Mexican government is completely engaged 25 in transforming the country. It hasn't been easy.

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1 You know the structural reforms that we just 2 implemented. It has not been easy to do the things we 3 should have done 20 or 25 years ago when we're doing 4 it now. As you may know, the presidents are now 5 together. They were gathered yesterday in Canada. 6 We need -- we believe that we have to make 7 this region the most competitive region of all the 8 planet if we want to succeed in this era. And we're 9 willing to change many things that we have to do, 10 especially infrastructure and the border. So the 11 Mexican government is engaged. 12 We're taking -- this comes back to Mexico 13 City. I know something because I grew up in Mexico 14 City. The border people usually tells me -- and here 15 is Jenny from the border. She's Mexican from the 16 border. They always tells us in Mexico City, You 17 don't know the border, you don't understand. We live 18 here every day. You have to be here to understand. 19 Well, now I'm here. Such a border, Dallas. But we 20 understand what you're going through. 21 The better improvements we make in the 22 northern border of Mexico will be in the benefit of 23 our community and the community of Texas. 24 And the third point, and the last one, I am 25 lucky because I have friends like Carlos Cascos. I

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1 had the opportunity to meet him about a year ago, a 2 year-and-a-half ago. We were a little bit worried in 3 Mexico about what was happening in Texas, the truth be 4 said. And suddenly, we found that we have friends 5 here that think alike and think about the benefits of 6 trade. We have the same principles, respect and 7 tolerance. 8 So it's great to be here, and it's great to 9 work with you. We will deliver the message for the 10 Mexican authorities. And we know we have friends, 11 partners and allies in Texas. Thank you guys. 12 SECRETARY CASCOS: Thank you. 13 CONSUL GALINDO: Thank you so much. 14 SECRETARY CASCOS: You can applaud 15 him. 16 (Applause.) 17 SECRETARY CASCOS: Thank you very much. 18 My other guest, who I saw walk in and then 19 she walked out and then she walked back in, is Ana 20 Garcia. She's here with Senator Cornyn's office. 21 Ana, thank you. Would you like to say 22 anything? 23 MS. GARCIA: No, thank you. 24 SECRETARY CASCOS: Are you sure? 25 MS. GARCIA: Judge, Mr. Secretary,

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1 thank you for having us. It's a pleasure to see a lot 2 of familiar faces from the Valley. Senator sends his 3 regards, and we're here to help in any way that we 4 can. 5 I have my colleague here with me from the 6 Dallas office. 7 MR. MCLOCHLON: Collin McLochlon. I'm 8 the Regional Director, Ana's counterpart here in North 9 Texas. For the purposes of today, she's the -- 10 SECRETARY CASCOS: She's in charge. Yeah, she's 11 always in charge. 12 MS. GARCIA: Thank you for having us. 13 SECRETARY CASCOS: Thank you very much. 14 And express our appreciation to the Senator for 15 allowing you guys to show up today, and convey the 16 message that you're going to hear today, you know, 17 back to him. He's been a very, very strong advocate 18 for the border, and he's been a very good friend to 19 all of us. So thank you very much. 20 MS. GARCIA: Yes, sir. Thank you. 21 SECRETARY CASCOS: All right. Next. 22 MS. MAYS: And before Michael gets up 23 there, we have gotten -- we're working with TTI and 24 UNT to help us, you know, articulate what this 25 committee is going to be working on the next, you

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1 know, few months to come up with the strategic border 2 blueprint. 3 And to do that, you know, they're going to 4 be engaging the committee at every meeting starting to 5 put, you know, pen to paper to discuss and document 6 some of the issues you guys have discussed here, 7 including what you just finished. 8 But they're going to start putting that 9 together into a framework that at the end of the day, 10 as the Secretary already said, you need to have some 11 kind of recommendation and a road map moving forward 12 so that's what they're going to be helping the 13 committee do, and they might be talking to you 14 one-on-one to better understand what issues you have. 15 But, again, I want to emphasize a lot of work 16 you're going to be doing is going to be rolling up 17 your sleeves, work-session-type committee. It's not 18 just coming and hearing presentations. We have some 19 of that, but this session that they're going to be 20 presenting is, again, getting your feedback on a lot 21 of key issues that we need to be able to articulate in 22 about, you know, 12 months or so. Thank you. 23 Michael. 24 MR. BOMBA: Thank you, Caroline. Thank 25 you, Secretary Cascos and all the members of BTAC.

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1 As Caroline told you, what we are here to do 2 is to help you write the plan. So we will be doing 3 the writing, but you're going to be telling us what to 4 write. 5 So as Caroline said, I'm Michael Bomba. I'm 6 with the University of North Texas. I'm joining my 7 colleagues Juan Villa from TTI and Jolanda Prozzi also 8 from TTI. And here is -- I want to openly talk about 9 today some of the parts of this presentation. 10 The first thing I want to talk about is the 11 vision and the mission of the blueprint. So this is 12 going to be one of the key products that the BTAC 13 produces over the next 15 months. It has three main 14 parts to the vision. 15 The first one is to develop a single vision 16 for the border, not for one part of the border, not 17 for one community, not for a county, not for a segment 18 of the border like in the Border Master Plans. We 19 want to have a single vision for the entire border 20 region. 21 And the reason for that is because that's 22 going to make the border more competitive as it 23 competes with other regions around the country for 24 federal funding. If you're trying to compete with 25 Southern California on the empire, you can't just talk

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1 about one border crossing Texas. You need to talk 2 about the importance of the entire border. So that is 3 what this plan is going to do. 4 It's going to be used to guide future, state 5 and federal investments in border infrastructure. The 6 last time that we were together, Sherman Louis talked 7 about a desire of TXDOT and the State Texas to make 8 significant investments in the border region. 9 And when he used the word, investments, he 10 wasn't using it as a code word for spending, per se. 11 He was using it as a work implying not only do we not 12 spend money, but we expect to get some sort of return. 13 And so how will we get that return, or how is that 14 return expected? 15 It will be expected as statewide economic 16 development and growth, which are actually two 17 different terms. We can grow the economy, but it 18 doesn't necessarily benefit. What we want is not only 19 growth, but we also want development within the 20 economy so that households and individuals grow in 21 their wealth. 22 We want to improve economic development not 23 only statewide but also within the border regions. 24 And then finally when we spend this money for improved 25 infrastructure in capacity and operations along the

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1 border, we want to spend it the most effective way 2 possible so that we get a good bang for our buck, in 3 simple terms. 4 The last thing, we want to position Texas' 5 economy to take advantage of all these changes that 6 are occurring in Mexico. Mexico is going through an 7 extremely rapid period of industrialization right now. 8 We need to take advantage of that. We're perfectly 9 positioned. We're close by. We have a lot of cross 10 border trade. This plan is to help us do that. 11 We also want to take advantage of the future 12 energy or the -- well, the current energy reforms but 13 as they get implemented in the future. Texas 14 companies can benefit from that greatly. But we need 15 to plan ahead. 16 So at this point I want to ask you if you 17 think we're on target with the mission and the vision 18 for this blueprint or if you think there's something 19 we need to add or something that we want to modify. 20 Just looking at these, what do y'all think? Any 21 thoughts? 22 UNIDENTIFIED SPEAKER: It's a good 23 outline. 24 MR. BOMBA: Okay. 25 MR. SAENZ: Let me ask you this. I

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1 know it may be a -- I'm sorry. Pete Saenz, Mayor of 2 Laredo, Texas. The overall perception of Mexico and 3 the U.S. -- and I know it's the political season that 4 we're in, but that goes a long way, too. 5 When I visit with people in Mexico, and 6 especially the private sector and even some government 7 high-level government officials, I mean, they -- 8 they're not happy with the rhetoric. They understand 9 it's -- you know, obviously there's political 10 motivations for that. 11 But as a border area, we need to be very 12 careful as to how we treat that. And we need to give 13 assurances to the extent that we can give that Mexico 14 is truly our partner and that we heavily depend on 15 Mexico for livelihood, especially the border area, but 16 more so Texas. You know, Texas -- you know, Mexico is 17 our number one trade partner. And we have a surplus 18 trade with Mexico. 19 So that will has to play in some way, 20 somehow into that. Maybe beyond the elections, it may 21 calm down, and things will get a little better. 22 Regardless, as public figures, personally, I think we 23 have a responsibility to speak to that when we can. 24 Thank you. 25 MR. BOMBA: Thank you. And I agree. I

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1 think you will see more of that theme going through 2 this presentation. Mexico needs to do well for 3 Texas -- do well and vice versa. I think that is 4 something that this blueprint will re-enforce. 5 MR. SCHWEBEL: Michael, if I -- this is 6 Schwebel. And I keep saying this over and over again, 7 and I said it last week at another meeting that you 8 and I were in. Somewhere along the line, we all need 9 to start talking about North America and economic 10 integration versus a border that is only a region of 11 the world, like a different planet. 12 And we can talk about -- anyone who wants to 13 talk about Mexico and the border, then they can talk 14 about the border. But we have got to talk about the 15 benefits, as the Secretary said, especially the Texas 16 border. But it's an economic region that benefits 17 North America, and we've got to put that in our 18 jargon, in our language and in discussion, instead of, 19 you know, going and talking about creating a model or 20 initiative that is just for the border and they think 21 it's just indigenous to us and unique to us. It's to 22 the whole North American continent. 23 And I don't know how we can put that into 24 your model of the discussion at the beginning or as a 25 mission statement on what we're trying to achieve and

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1 what is good for this region of North American is good 2 for the entire region of North America, not for one, 3 only one region. 4 MR. BOMBA: That's a very good point. 5 And again, I think this -- because in this 6 presentation, you will see those themes sort of 7 repeating themselves. 8 Let me go ahead and move on to the next part 9 of the discussion, unless someone else has something 10 else they want to say. Okay. So now we're going to 11 talk about the intent and the purpose of the 12 blueprint. So why are we -- well, we want to tell the 13 story. We want to tell the story of trade not only to 14 Texans, but also to the rest of the country. 15 The Free Trade Agreement between Canada and 16 Mexico, as well as the other trade that's sort of 17 happened as a response to that and also over time, as 18 we have other agreements that are probably going to 19 take effect in the future, has created a lot of 20 benefits statewide and nationally. And we want to 21 explain those to people so that they understand what 22 these benefits are. 23 We need to outline key strategic issues and 24 challenges along the Texas border, but we don't want 25 to talk about it in terms of the specific projects,

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1 per se. We want to keep this broad and sort of a 2 general theme. 3 We want to recommend solutions, again, not 4 necessarily identifying this project as a solution. 5 But how are we sort of as a community going to deal 6 with the overall problems of getting trade back and 7 forth across the border. We will outline 8 implementation and an action plan. We will work to 9 build consensus among the members of the BTAC, and 10 that's a critical step. Because whatever we come up 11 with, there needs to be a general consensus among the 12 committee that this is the best path moving forward. 13 And so that is why we're trying to have this 14 interaction with you now. And, of course, we will 15 interact with you more as the process goes on for the 16 next 15 months as we build this blueprint. 17 And we want to advance our relationship with 18 Mexico. As we have been saying, it's critical to the 19 state's growth. It's a critical part of what we are 20 right now. It's why we're the strong economy in the 21 nation. And it's going to help propel us into the 22 future and grow to be able to support all of the 23 people that are coming to Texas because that's -- as 24 the state grows in population, the economy needs to 25 grow quickly as well. And so Mexico is going to play

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1 a key role in helping us keep up with that growth. 2 What this blueprint is not going to do is 3 it's not going to identify particular projects and 4 particular communities. As Secretary Cascos said, 5 this is a grand vision for the entire border, not just 6 for one location. 7 We're not going to talk about distributing 8 funds. That will happen at some later time. That 9 won't happen as part of this particular effort. 10 We want our goals and aspirations to be, as 11 I said, for everybody, for the entire border region, 12 not for a particular location. And we want to make 13 sure that those goals and aspirations are reasonable 14 so we highlight their success. 15 And we also want to concentrate just on 16 freight transportation. Although, there are a lot of 17 other issues of what are related to the border as far 18 as movement and pedestrians and vehicles, private 19 vehicles, those are not the topics that we will be 20 talking about here. Here, we're looking at the 21 economic aspect of it. 22 As we've discussed earlier, the border 23 offers a lot of opportunities for growth. And as 24 stated, Texas -- Mexico is Texas' largest trading 25 partner. It's the third largest trading partner with

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1 the United States, so we're right in the middle of all 2 of that. 3 As cross-border trade continues and as 4 Mexico furthers its industrialization, we're going to 5 be in a very good position to take advantage of that. 6 As you can see in this figure, manufacturing is the 7 sector of the Mexican economy that's growing the most. 8 So that's -- you know, it's producing the goods going 9 back and forth across the border. 10 It's also important to our state and 11 national economy. This particular figure over here on 12 the right, what this shows are the number of jobs that 13 Texas supports related to exports -- well, exports in 14 general, so not just Mexico. This is in the entire 15 nation with all other nations in the world. 16 But what you can see is that Texas is 17 helping support over one million jobs in the U.S. 18 economy through trade with the rest of the world and 19 that is very significant. Mexico is our third largest 20 trading partner, so that's a big chunk of those jobs. 21 And it creates jobs in the particular 22 communities across from the border. The ratio from 23 the research shows about every ten jobs in Mexico 24 produces a new job in the United States, so there's a 25 very direct -- and these jobs are not just in --

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1 UNIDENTIFIED SPEAKER: Would you repeat 2 that? Every ten jobs? 3 MR. BOMBA: Every ten jobs in a 4 Mexican -- produce about one job roughly in the city 5 across the border. And that number has changed over 6 time. If you look at the earlier research, it was 7 probably about three jobs. And now over time it's 8 come down to about one or even less than one. But 9 it's -- if you were to round it, that's about the 10 range. And it's been shown in multiple studies. 11 And when we release our White Paper related 12 to this presentation, I have some studies in there 13 that you can go back and look at that actually show 14 you what these numbers are. 15 And these jobs, of course, are 16 transportation services, warehousing, things like 17 that. But they're also in professional services, so 18 these are both blue collar and white collar jobs: 19 accountants, attorneys, other types of folks who 20 have -- on the border who have to help this cargo move 21 back and forth. Those jobs are supported by trade as 22 well. 23 So, again, when we talk about the purpose 24 and the intent of blueprint, are we on track? Is 25 there something we need to add or something that we

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1 need to modify or strengthen? Give us some feedback, 2 if you don't mind. 3 MR. GIESBRECHT: I have one question. 4 This is Jake from Presidio. And we have one client 5 coming through Presidio that's -- the competitor is 6 France, and it's right here. Five miles from here 7 this is where -- and it's Holland Hitch. And that 8 particular client, I know them personally very well, 9 but they produce -- Holland Hitch produces a fifth 10 wheel for the truck. And it's a foundry in Mexico 11 that produces that, and they have maybe 200 jobs over 12 there. But at the foundry, this plant right here in 13 Wylie has at least 200 jobs. 14 So that's one example. And if we're not 15 efficient enough at the Port Of Entries and the roads 16 that we take -- we're down to the competitiveness of 17 the world that we can -- out of France they can ship 18 the fifth wheels here to Wylie for $200 more than we 19 are out Chihuahua. 20 MR. BOMBA: Okay. So. 21 MR. GIESBRECHT: So that's -- what I'm 22 saying is, are you doing a study of the world? I 23 mean, are you doing the Europe -- are you competing us 24 or benchmarking? 25 MR. BOMBA: That's a good point.

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1 MR. GIESBRECHT: You're talking about 2 the blueprint. But if there is anything missing, then 3 I would really suggest -- 4 MR. BOMBA: Blueprinting or 5 benchmarking the rest of the world? 6 MR. GIESBRECHT: Yes. 7 MR. BOMBA: Yeah, that's a good point. 8 And that's something that needs -- 9 MR. GIESBRECHT: One specific. 10 MR. BOMBA: Right. We need some 11 feedback from y'all about these White Papers and what 12 we should be doing in the White Papers. 13 One of the things we'll talk about in just a 14 second in a couple of slides is how trade is not only 15 a job producer, but it's a job saver. Because if 16 these people in Wylie can't put some of that 17 production in Mexico, then the whole process isn't -- 18 if you can ship from France for $200 more. I mean, 19 it's just a matter of time before France is more 20 competitive. 21 MR. GARCIA: Josue Garcia with Donna 22 Bridge. At some point, you know, all of us went 23 through the Border Master Plans. So how does that -- 24 does this compliment what was studied back then 25 because I know the Rio Grande Valley, Laredo, El Paso

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1 all went through the same process. And I'm seeing, 2 you know, the same things being studied over. Are we 3 reinventing the wheel here or -- 4 MR. BOMBA: Well, I would say what 5 we're doing is for sort of updating what was being 6 done. But we have more vision for the border as a 7 whole, as opposed to breaking it into these sections. 8 The other thing is a lot has changed since 9 the Border Master Plans have been completed with 10 energy reforms and with this very rapid 11 industrialization of Mexico. So we're going to be 12 able to incorporate the most up-to-date information 13 and -- some of those previous plans, which -- 14 particularly, it's the first ones that -- 15 MS. MAYS: Can I just expand on that? 16 This is not going to be replacing the Border Master 17 Plan. We're actually going to be updating the Border 18 Master Plan. We had three of them developed. We're 19 going to be doing one Border Master Plan for the 20 entire border region. This is going to feed into the 21 Border Master Plan. 22 Think about this as kind of the bigger 23 picture. What are the key strategic issues that we 24 need to address? And then the Border Master Plan will 25 drill into them and look at specific projects that

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1 need to be implemented. You know, so just think about 2 kind of -- you know, the next step done is going to be 3 the Border Master Plan. We're always going to have 4 that because that's where the rubber is going to meet 5 the road. 6 SECRETARY CASCOS: Meets the road? I 7 like that. Yeah, get Pete Saenz, steel on the rail. 8 MR. SAENZ: Thank you very much. I'm a 9 newcomer to this group and to politics in general. 10 But I think you're there. Can we tie into maybe to 11 some national standards, maybe GDP or something where, 12 you know, we can truly show and identify the value of 13 the border to not only Texas, but the U.S. economy, 14 you know, something along those lines where people can 15 say, wow, this is -- you know, they do play a big part 16 somewhere. 17 MR. BOMBA: Right. Right. No. I 18 agree. And I was looking for some statistics that 19 would show the share of trade in Texas' state in the 20 GBD. I couldn't find those, but I'm going to continue 21 looking for them. 22 I think this is a -- you know, as I showed 23 you before, this figure is very powerful. We're 24 supporting a million jobs in the United States and 25 Texas through trade. That's a lot of jobs. Not every

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1 one of those jobs are physically located in Texas 2 because of the way the data 3 is calculated and the way they calculate it. 4 But many of the jobs that are being reported 5 for other states are -- so you know, when you round it 6 all about, that million is probably pretty close. 7 SECRETARY CASCOS: Just as a follow-up, 8 Mayor, I've read a report not too long ago that talked 9 about job creation because of trade. And I think I've 10 mentioned it to a lot of people. 11 But what I -- the report said there's about 12 six million jobs that are created in the nation 13 because of trade with Mexico, and there's 500,000 that 14 are created in Texas because of trade with Mexico, to 15 put that in perspective. Okay. 16 MR. LOVE: Does the -- this is John 17 Love from the City of Midland. Does the blueprint 18 have a public information component to it? Because it 19 seems like -- I'm from a very conservative part of the 20 most conservative state in Texas. And NAFTA sometimes 21 tends to be a four-letter word. And this information 22 is really, really great. I just don't think the 23 public at large sees it and understands it, and so I 24 think by the public not being informed about it, it 25 makes everything that we do that much harder.

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1 MR. BOMBA: That's a good point. I 2 mean, I think the White Papers will be one way of 3 getting that information out. But obviously, you 4 know, a forum where people can have a discussion would 5 be helpful as well. 6 I don't know, Caroline, if there are any 7 plans to have a more public forum. 8 MS. MAYS: Well, again, that's -- you, 9 the feedback from the committee is that -- you know, 10 from what I'm hearing from you, John, is that we need 11 to include a public awareness. Public education is a 12 big component of the strategic issues that we want to 13 articulate here. And I think it was mentioned 14 earlier. 15 Gerry mentioned the fact that, how are we 16 reaching out to the stakeholders of the border 17 communities? I think now you're bringing up the other 18 component. How are you reaching the rest of, you 19 know, Texas, the rest of, you know, the U.S. and the 20 rest of North America about the strategic importance 21 of the border? So, yes, definitely that should be 22 captured in this. So, you know -- 23 MR. LOVE: And I'm only just referring 24 to what happened last week with Brexit and the fact 25 that the most Googled thing after the vote was, what

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1 is the EU? You know, people voted against it not 2 knowing what it was about. And I kind of get that we 3 have that same type of thing going on with NAFTA in 4 the United States, specifically with Texas as well. 5 Because I think most people -- and I could 6 say this about a lot of Midlanders and Odessans. They 7 think that it's just a one-way exit for jobs and that 8 Texas is not getting anything from it. So -- 9 SECRETARY CASCOS: Well, I will tell you 10 that -- and I mentioned it to Steve -- I don't know 11 where Steve went, but -- I mentioned it to Steve 12 earlier and somebody else that as I travel the 13 state -- and my role is obviously promoting Texas and 14 all the good and, you know, facing the challenges we 15 have. 16 There's a lot of Texans who don't know a 17 whole lot about Texas. And I see that, no matter 18 where I'm at, you know. And so part of my role has 19 been to inform and educate about what is going on in 20 terms of what Texas has done over the last numerous 21 years in terms of jobs and stuff. 22 But, yeah, I mean, that's a challenge we're 23 always going to have. I mean, you know, a lot of 24 people want -- you know, want to be spoon fed 25 information. And, you know, very few will take the

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1 initiative to really research and look up stuff. 2 But, yeah, I mean, that's not uncommon for 3 anywhere in Texas, whether it's Midlanders or 4 Odessans. I'm going to be there next week. But it's 5 about educating and informing folks about Texas and 6 the Mexican relation, the border, et cetera. I mean, 7 it's a challenge, but, you know -- 8 MR. LOVE: At our last meeting, we 9 talked about this. The conversation is currently 10 being dominated by Trump and the Wall. 11 SECRETARY CASCOS: Right. 12 MR. LOVE: That's all Americans tend to 13 think about when it comes to the border. 14 SECRETARY CASCOS: Right, yeah. 15 MR. JAIME: Ivan with Union Pacific. I 16 couldn't agree more about the education component. I 17 walked in a little bit after your presentation 18 started. Maybe you had already covered it. 19 But is there an effort to capture workforce 20 needs also at the border? I think that there's a 21 perception, and part of it is real, that there's a 22 very robust workforce at all of the border points with 23 people that understand logistics and trade. 24 But at least our company had founded -- 25 sometimes, especially when the oil field was really

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1 booming, it was really difficult to find labor. And 2 so we were having to bring labor in from other states: 3 managers, train conductors, train engineers. Is there 4 a component study if the workforce is ready for a lot 5 of this massive growth and trade? 6 MR. BOMBA: It hasn't -- I haven't 7 presented that yet, but that's a good point. I think 8 that is something that we should look at. Because 9 activity follows later, I mean, when it comes down to 10 it. 11 MR. JAIME: Yeah. 12 MR. BOMBA: And so if we don't have 13 labor there, that -- 14 MR. JAIME: Well, I know -- for example, 15 in the trucking industry, I know that something that's 16 been talked about a lot has been the -- if folks don't 17 want to do the long-haul truck drives. 18 You know, I know in the rail industry, 19 there's also different components. So it's something 20 that I think definitely needs to be looked at as well 21 to see if we're going to have the people we need to 22 make this work. 23 MR. BOMBA: That's a good suggestion. 24 MR. JAIME: The same thing for CBP. 25 Just the last thing that I will mention on -- I know

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1 Customs and border protection have been assigned a 2 budget or given some money to hire 2,000 agents. And 3 I know that it's been three years, and they have not 4 yet met their quota because they are having a really 5 difficult time. 6 Part of it is also their process, right. 7 But I just wanted to kind of cement that point that 8 it's going to be real important we have the people to 9 accommodate the trade that's coming. 10 MR. BOMBA: Thank you. We will 11 incorporate that into the study. 12 Let me go ahead and move on to the goals and 13 objectives of the blueprint. And these are based upon 14 the vision and the mission of it. The first thing is 15 we want to achieve a single vision. It's essential 16 that we, as I said before, have a consensus and what 17 it is that we present to the public. 18 We don't -- we won't be pursuing individual 19 projects. We won't be pursuing multiple interests, 20 per se. We're going to be pursuing it as -- the 21 border as a whole and tell that story to the public, 22 both in the State of Texas and throughout the country. 23 We want this blueprint to be comprehensive 24 and internally consistent. As I said, we don't want 25 to have portions of the blueprint that contradict each

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1 other in different portions. We want to make sure 2 that it's reasonable and logical. We want to have 3 goals that have clear methods for achieving the 4 outcome that we want. And we want to be reasonable in 5 the outcome and the goals that we have and not based 6 upon inspirational ideas or assume demand or funds 7 that may not be there. 8 And then finally, we want to talk about both 9 the risks and the opportunities. I think Secretary 10 Cascos talked to us last time about we need to talk -- 11 there's sometimes hard discussions we need to have 12 about the border situation. And we need to have those 13 frankly, as well as talk about the good things that we 14 have and to promote those. 15 The intent of the plan is to position the 16 Texas economy, as I said before. We want to tell them 17 about the story, the success that we've had not only 18 along the border, as far as economic development, but 19 in the state and the nation overall. 20 Many of you have spent your entire lives at 21 the border. You remember when it was 18 or 20 percent 22 unemployment in some of these counties, and now we're 23 looking at 6 or 8 percent. So we have had significant 24 economic development locally since NAFTA has been 25 implemented.

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1 And we have seen other economic development 2 throughout the state and throughout the nation. But 3 sometimes those stories aren't as dramatic, so maybe 4 that's, you know, part of the problem with the 5 messaging that we have had so far. 6 We are promoting economic growth with this 7 plan statewide and nationally and also retention of 8 jobs, as I just mentioned before. If that 9 cross-border trade was not happening, how effective 10 would the victory of auto makers in the United States 11 be against the job of Koreans? It would be very hard 12 to make a car that was as cheap as they're making it 13 and compete in it internationally. So it's critical 14 to saving the jobs that we have here, in addition to 15 growing the jobs to have that cross-border trade. 16 We have been able to develop these 17 manufacturing clusters, particularly in the automotive 18 industry, but not in other industries such as 19 aviation. The last meeting we had David Marquez from 20 San Antonio talk about all that stopping. And then we 21 have been -- sorry, just looking at my notes here -- 22 just promoting general economic growth throughout the 23 region of the border. And even though we have 24 accomplished a lot, there is still a lot more to do. 25 There have been shortcomings to trade. It's

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1 not to say that everything related to trade has been 2 great for workers and companies in the United States. 3 Some have not fared so well due to that competition. 4 And so when we think about what we're trying 5 to do, we need to take those folks in account because 6 we don't want to dismiss their concerns. They're very 7 real. But we want to look for ways to help them in 8 the future, take advantage of what trade is offered. 9 We want to develop and improve transportation 10 infrastructure. Historically, the way that's been 11 done is to look at border crossings and look at the 12 infrastructure that feed directly into those 13 crossings. And we will continue to talk about that in 14 this study, but we also want to look at it broader, 15 the key transportation corridors that feed into the 16 border region. 17 And not only that, but how do they connect 18 to places not only in Texas, but over the rest of the 19 United States? Because if you can't -- not all of the 20 activity is happening on the border. A lot of the 21 times, the border is just where it crosses and it 22 goes -- it may go 1,000, 1,500, 2,000 miles farther 23 before the next step in the process occurs. 24 So how do we connect those places to the 25 border efficiently so that if there are any sort of

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1 problems with goods moving back and forth, they're not 2 happening here in Texas? 3 We need to look at -- or continue looking at 4 solutions to problems, like heavy-weight corridors. 5 They've been implemented in some portions of the 6 border. Are they appropriate for others? Have they 7 done what we had hoped they would do? What are the 8 alternate types of infrastructure, like truck-only 9 lanes, which has been discussed? 10 That may be a way of increasing productivity 11 for trucking by having less congestive routes and 12 also, perhaps, they could be able to haul more than 13 one trailer. And that would increase the productivity 14 and also deal with some of these problems with driver 15 shortages. 16 We need to understand better existing 17 practices and regulations at the federal level and at 18 the state level and how that impacts trade. So we're 19 talking about congestion and about what CBP is doing 20 or what DPS is doing. 21 As a committee, we need to understand that 22 better so that when we come up with ideas or 23 suggestions about how that can be approved, it's based 24 upon factual information and it's logical and it's 25 something that we can either talk to them about or

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1 maybe even talk about at a higher level with 2 lawmakers. 3 And we need to look at best practices 4 around -- not only the U.S., but around the world. 5 You know, there are borders everywhere, and many of 6 those borders deal with the same kind of problems that 7 we have. We need to look at other examples and see 8 what we can learn from them and maybe apply some of 9 that here. 10 The work that we do will be guiding the 11 decision of policymakers, in addition to the Texas 12 Transportation Commission and Secretary Cascos. We're 13 also going to be providing information to the Texas 14 legislature and to the Governor and to local 15 communities and to the general public. And so this is 16 a very important task that we have to inform them 17 about the border. 18 MR. SAENZ: How about the Texas 19 Congressional legislature? 20 MR. BOMBA: Well, that's a good point 21 as well. 22 MR. SAENZ: You have got to talk to 23 Congressmen because they have the money. 24 MR. BOMBA: Right. Right. 25 MR. SAENZ: And most of the Senate. If

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1 they don't vote it, you don't get it. 2 MR. BOMBA: Right. Right. That's a 3 very good point. We need to be looking also at our 4 federal legislatures. 5 We want to talk about the border and explain 6 some of the impacts that occurred due to this large 7 amount of trade going back and forth. Border 8 congestion delays, how that affects economies, how 9 that affects businesses. 10 You know, the ripple effects -- the delay in 11 Laredo, for example, can have a ripple effect all the 12 way into Michigan. So we need to understand what 13 those ripple effects are and how we can mitigate them 14 or resolve them. 15 We need to talk about transportation 16 effects. These tend to be more local. But again, 17 congestion at the border can affect the entire system 18 of the local community that may have nothing to do 19 with trade. You know, they may just be people's 20 everyday activities. We need to try to mitigate that 21 and minimize those impacts. 22 And then finally, there are health impacts 23 that come primarily from air quality. The border 24 areas are -- of those impacts. We need to look at 25 ways to improve the flow of goods, reduce congestion

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1 so that the air quality in those regions are better. 2 The plan or the blueprint will be 3 multi-mobile in nature. Although, highways are mostly 4 what TXDOT works with and is mostly how the cargo 5 moves. We still need to look at rail, maritime, 6 airports and pipelines. All of those are important. 7 And I think among those, rail and pipelines 8 are probably going to see an increase over time since 9 Mexico is concentrating much more on its rail 10 transportation infrastructure within the country. And 11 as we start exporting more natural gas into Mexico, 12 which it needs to fire -- no pun intended -- its 13 energy production for all of this industrialization. 14 Electricity is very expensive in Mexico, or 15 it tends to be very expensive in Mexico. Natural gas 16 has been what it's used to bring those costs down. 17 Many of these manufacturers are energy intensive with 18 electricity. So for Mexico to be competitive, it 19 needs to have cheap electricity. 20 We have an overabundance of natural gas, so 21 it's a perfect market coming together. But it has to 22 be able to get from one place to another and pipeline 23 is the most efficient way to do that. 24 We need to, as I said before, make sure that 25 the border links to our Texas communities so that they

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1 can get goods back and forth and we can have these 2 origins and destinations connected efficiently. We 3 have our existing infrastructure. But the other 4 corridors that we have been looking at over time -- 5 I-69, which is sort of in the process of being 6 developed, as well as others like La Entrada al 7 Pacifico, and all of these things that we have talked 8 about in the past. 9 And then finally, we need to look at how 10 we're going to fund all of this because everything 11 cost money. The new FAST Act that Congress approved 12 has a portion of it -- or has a component within in 13 that allows a portion of funds that are already 14 allocated to the states to be dedicated to border 15 projects. So this would be a good tool for helping us 16 think about how that money could be used. 17 We need to think about how different levels 18 of government can partner into the local governments 19 with state or federal government. And then we need to 20 look at, of course, the innovative funding sources, 21 such as Public Private Partnerships or user fees, 22 things that people don't always like to talk about, 23 but are going to probably be the quickest way to get 24 things done. 25 MR. SAENZ: The State of Texas also has

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1 a line item within the TXDOT budget border -- 2 MR. BOMBA: Okay. 3 MR. SAENZ: -- separate funding. And 4 the one that's in the federal legislation -- Jessie 5 was one of the architects of it -- went hand-in-hand. 6 So you had to get the state line item available. The 7 federal government had to agree. The Governor has to 8 assign a certain amount. 9 But the worst part of it is for people to 10 think that that's the end gain. It is like seed 11 money. It has to be supported by other TXDOT line 12 items. 13 MR. BOMBA: So those are the types of 14 things that we want to incorporate into this 15 blueprint. 16 And I think at this point I'm ready to take 17 any other feedback that you have. 18 MR. SAENZ: Yes. Can I get one 19 comment? 20 MR. BOMBA: Sure, Mr. Saenz. 21 MR. SAENZ: Here again Pete Saenz. Just 22 so we can attract possibly more funds toward the trade 23 transportation industry, so to speak, can we establish 24 or show how much the federal government and the State 25 of Texas collects into their general fund, so to

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1 speak, from this industry and how much money is going 2 out and see there if is an imbalance of some sort? 3 MR. BOMBA: I think that would be good 4 to show, as well as how much of the nation's economic 5 activity we're producing by managing the border with 6 all of this trade is going back and forth. So that 7 helps make the case, so we can certainly put those 8 types of statistics into the report. 9 Anything else? 10 MR. SCHWEBEL: Michael -- this is 11 Schwebel -- one of the things -- and I don't know if 12 this is something that's more of a vision-type of 13 deal, but Texas is an energy state. I know you did a 14 deal about the energy sector. And it has so much to 15 contribute. 16 But if we look at the future of 17 transportation in the trucking side, such as CNG 18 Fleets, Canada is probably doing a lot more work than 19 some of us realize is going on. Can we plan on making 20 some recommendations at, like, the State of Texas 21 where there is so much truck -- so many trucks coming 22 in, that we look at, perhaps, more CNG stations to 23 provide some natural gas to those fleets? 24 And if there is a growing trend in the 25 trucking industry or there's a growing trend or

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1 innovation in the rail industry, it's one of those new 2 trends that we need to, you know, be planning for and 3 having more of those types of energy or green industry 4 in the State of Texas versus other states on the 5 border. 6 If we're innovators and we have the supply, 7 then why shouldn't we have the first ones to have and 8 allow to support that transportation sector? 9 MR. BOMBA: I think that's a good point. 10 We can work on that, and we can work on other, like, 11 hybrid -- electrical hybrid and other types of 12 technologies. Again, in places like El Paso when 13 you're struggling with air quality to try to stay 14 within the standards, these can be very beneficial. 15 You know, a lot of challenges, of course, is 16 that with some trucks, they tend to be the older 17 vehicles and it's hard to get them to adopt this new 18 technology. But there may be some advances out there 19 that could help them retrofit more easily, so I think 20 that is something that we should look at. 21 Anything else? Okay. I'm going to turn 22 this over to Juan. Thank you very much. 23 MR. VILLA: Thank you, Michael. My name 24 is Juan Villa with the Texas A&M Transportation 25 Institute. I am going to move pretty fast on my

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1 slides. We're going to provide you with a copy of 2 this presentation, so that way you can provide us with 3 feedback. 4 As Michael mentioned, our main goal at UNT 5 and TTI is to come up with a plan. We're going to 6 help TXDOT produce the plan. The plan is going to 7 come from you. So, you know, the topics that I would 8 like to discuss are four. 9 The first one is we need to define what the 10 border is. I think we have -- as was mentioned 11 earlier, you know, the Border Master Plans have a very 12 specific definition of what the border is. There's a 13 commercial zone and so on. 14 So basically, we would like to hear from 15 you. But I think the key point here is not just on 16 the border, but the whole state. You know, the whole 17 corridors that lead from the border are the important 18 parts that we need take into account. 19 The next item that we would like to get 20 feedback from you is the strategic issues. We have 21 identified these four categories of strategic issues. 22 But again, you know, these are the ones that we have 23 come up with. We just heard earlier this morning some 24 other ones that are included in these four categories 25 that we cannot -- such as workforce, that we didn't

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1 take into account in the initial assessment. And, you 2 know, Tiffany is going to talk later about this, so 3 that will be a helpful idea. 4 One point I want to make again is what 5 Michael was referring to with these White Papers. Our 6 idea we were discussing with Caroline how to come up 7 with a plan this year compared to previous versions of 8 the BTAC is to develop some White Papers on the topics 9 that we hear back from you that we can develop further 10 and we can make a presentation during the coming 11 meetings. And that way we can get some feedback to 12 see how relevant those topics are. For example, we 13 have heard workforce. We have heard the employment 14 not only in Texas, but throughout the U.S. 15 So again, I won't go through the details. 16 But again, this one is -- the first one is 17 coordination. We already heard this morning not only 18 coordination within Texas, but, you know, federal, 19 state agencies, Mexico as well. So those are 20 important issues that we need to take into account. 21 The next one is the infrastructure. Here, I 22 will just classify it as hardware and software. You 23 know, the hardware infrastructure, whatever we do in 24 terms of not only at the POE itself but also, again, 25 the corridors leading to and from and not only

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1 highways. You know, we heard already from the 2 railroad and others about some issues with rail and 3 also that Michael mentioned earlier. 4 Under operations again, it's multiple 5 inspections. We know that that's an issue. There's 6 three potential inspections going northbound and now 7 with these outgoing inspections, that also creates an 8 issue. So again, we need to identify what can the 9 State do in terms of recommendations and moving 10 forward. 11 And the other one is the capacity 12 constraints. Again, we have rail. We have highway 13 and other modes of transportation. 14 And finally, the funding. You know, Jessie 15 is still here. So, you know, we can probably move 16 into -- again, he knows the ways of funding, again, 17 not only border projects but also the actual corridors 18 that lead to and from the border. 19 So, again, we heard about the program that 20 CBP has already, you know, been implemented. But 21 probably, we can come up with ways of identifying not 22 only pilot projects, but these to become the way to 23 move forward and also other -- more projects like the 24 one -- where there's a new POE being built with some 25 public projects that, again, could be implemented.

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1 So, again, I will stop here because we're 2 running late. But, again, once you receive this 3 presentation, please get back to us with comments. 4 Are we missing something? Have we captured all the 5 strategic issues? And hopefully we can, again, get a 6 list of issues. And then probably in the next meeting 7 in September, we can come up with priorities and where 8 do we start analyzing these. So that's the next one. 9 The key point here is to reach a consensus. 10 Where do we go from here on the strategies, on the 11 initiatives and most important, the last bullet, the 12 action plan? At the end of these processes, we need 13 to come up with a plan that we can recommend to 14 different stakeholders and then the implementation of 15 these, again, recommendations to different levels of 16 government, the legislature all the way to the general 17 public. 18 As we heard just right now, there is some -- 19 you know, here we are preaching to the choir. But 20 eventually, we need to tell the world about Texas and 21 to tell them the story about why this is important and 22 why we need to continue working on this. 23 So with that -- again, these are the final 24 questions that we have for you. And are we on target? 25 Are we missing something? That is a key point because

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1 again, we live -- you know, Michael, Jolanda, myself, 2 Caroline, we do this for a living. So we are involved 3 in this, so we might be missing something that is 4 completely other that we have not seen. 5 Are the key strategic issues there, or are 6 there some other ones, again, that we need to add? 7 Are there some of them that are no longer an issue, 8 but, you know, we have been -- 9 And I think the main message here is what 10 Sam mentioned earlier. You know, this is a system. 11 It's not only one POE and another one. It's a whole 12 system, and the system includes not only the border, 13 but all the corridors. I think that's why we're here 14 in Dallas today and not at the border region. 15 We heard from Judge Jenkins earlier. You 16 know, Amazon is moving here, Toyota is moving here. 17 So it's a whole state and the whole region that is 18 going to benefit from a much better border plan. 19 So thank you again, and I will leave open 20 the floor. I think you might need some coffee. But, 21 you know, we can have further discussions. Thanks 22 again. 23 MS. MAYS: I was just going to say any 24 comments because I know Juan went through a lot of 25 that very quickly. But I think one of the things I

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1 really want to at least hear from the group is -- can 2 you go back to the slide on strategic issues and to 3 mention -- because some of you discussed -- there's a 4 slide that talks about the strategic issues. And next 5 to that, that's captured. 6 Because this is going to give, you know, TTI 7 and UNT a framework to work on so that when we come 8 back at the September meeting, we can start reporting 9 on that. And also the White Paper is kind of digging 10 deep into the issues. Those White Papers that you 11 will be seeing will help us so that we're capturing 12 the right things. Go back one more, I think. Yeah, 13 here. So just this slide here quickly. 14 MR. CRISTINA: Paul Cristina with BNSF. 15 Isn't this going to be filled by all of those things 16 that we talked about this morning, all of the 17 strategic objectives that we've already offered? 18 MS. MAYS: Yes. 19 MR. CRISTINA: So at some point we're 20 going to come to terms as a group on prioritizing 21 those and the best ones that go to the -- 22 MS. MAYS: Yeah. Yes. 23 SECRETARY CASCOS: We're a ways from 24 that, but we're working towards that. 25 Sam.

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1 MR. VALE: I also think that we need to 2 educate all of our border communities on what the 3 requirements of TXDOT are to work with off-system 4 projects and in-system projects. There's a process. 5 You have to have a certain amount of environmentals 6 done. 7 They're not going to go out and say we're 8 going to build a road tomorrow if they haven't gotten 9 the environmentals. It's got to meet the FEMA 10 regulations. It's got to have some sort of 11 right-of-way taken care of by preferably the local 12 community. And then you get -- some preliminary 13 design work has to be done. 14 And we can sit here and talk about all of 15 the projects that we want. But unless we -- that's 16 where we participate is local communities, and that's 17 how we can get TXDOT into being able to move on the -- 18 what we look at is the things that are important to 19 us, connecting to the ports and to the communities and 20 getting in and out. Then they can tie us into their 21 system. That is an important education process. 22 90 percent of our communities, when I talk 23 to the mayor, city council members, county judges, et 24 cetera, don't understand that. They think it's just a 25 request to TXDOT.

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1 SECRETARY CASCOS: You know, I think 2 that who is challenged even more are those privately 3 owned bridges. Those are the ones that don't have 4 that connectivity, you know, to let's say, you know, 5 to TXDOT and knows what the, you know, I guess dealing 6 through a gauntlet. 7 For those of us that have built bridges in 8 different counties and cities, you know what the -- I 9 mean, we know what it is. We know the environmentals. 10 We know what TXDOT needs. We know what parks of 11 wildlife -- you know, we know all that stuff. 12 But it is -- I wish it was a one-stop shop 13 where somebody could just click a button, and this is 14 all that we need. Also, presidential permits take a 15 long time to get. 16 You know, I know that we're working on some 17 other, you know, factors along the borders. We're 18 going to build. Well, where is your permit? Well, 19 we're going to do that later. No. You've got to do 20 that first. You do that first, and then you do 21 everything else later. But okay. 22 I think -- is there anything else? John, do 23 you want to say something? 24 MR. LOVE: I was just going to say -- 25 I'm dubbing off of what Sam was saying -- is I think

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1 that that would be a great thing for MPOs to do, is to 2 communicate that information to the public. I know my 3 MPO currently is trying -- well, looking for ways to 4 engage the public and reach out to the public. I 5 think that would be a great thing for MPOs to do. 6 SECRETARY CASCOS: Let me say -- now is 7 a good time for me to say something. You know, if you 8 miss something where, you know what, I should have 9 said something, feel free please to e-mail, send that 10 commentary, that question, that inquiry to Caroline so 11 hopefully we can address it either through that mode 12 or at the next meeting. 13 UNIDENTIFIED SPEAKER: And Juan, you 14 said you were going to get your presentation to us. 15 Do you have it here, or are you going to e-mail that 16 to us or -- 17 MS. MAYS: Yeah. I will, you know, 18 e-mail that. Sorry. We were working the last minute. 19 Juan, did you send me the presentation? But we will 20 get that presentation to the committee, and then we're 21 going to be posting that on the website as well. I 22 remember sending you all of that, the website with all 23 of your beautiful, nice profiles. Thank you very 24 much. 25 But, yeah, we will put all of that on there.

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1 But again, like the Secretary said, this is a working 2 committee. If ideas come up, please send those to us 3 so we could capture it, so we can bring it to the 4 table, forward it to the consulting team so that it 5 could help us, you know, make that into what you 6 ultimately will be responsible for producing. 7 SECRETARY CASCOS: Yeah. We're going 8 to go ahead and take about a ten-minute break. So 9 let's reconvene at 11:20. So you're free to do what 10 you need to do: phone calls, bathroom, treats, 11 whatever it is. 12 (Recess taken at 11:15 to 11:32.) 13 MS. MELVIN: I actually gave a 14 presentation to a women's leadership group in Kansas 15 City the other day. So I have crazy notes I've been 16 taking throughout the day. Anyway, forget it. It's 17 lost its moments, my story about my name and being in 18 the freight industry. 19 And I was telling these women that clearly, 20 you can see my mother wanting me to be, like, a 21 powerhouse in the North American Freight industry by 22 calling me Tiffany. So here we go. But it's 23 something like, well, maybe you stick out a little 24 bit. I was, like, yeah, maybe I do. That could be 25 good. I was saying that Tiffany can go two ways. It

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1 can go princess, or it can go stripper. There's not a 2 whole lot in between there. But here I am. Anyway -- 3 SECRETARY CASCOS: Are you the 4 princess, or are you the stripper? 5 MS. MELVIN: I'm neither. I'm just 6 trying to maneuver my way through life with this name. 7 It's very, very frou-frou, I think, and not quite 8 fitting of my personality. But I'm taking up my time, 9 and I know we're running late. So -- 10 MS. MAYS: It's going to be in the 11 minutes. You know that. 12 MS. MELVIN: As long as my mom doesn't 13 read them, I'm sure it will be fine. And there's no 14 risk of that happening either. So okay. 15 All right. So I know that a lot of you know 16 NASCO, but there's some in here that I don't think 17 know NASCO. So I'm very honored to be here. Thank 18 you, Secretary Cascos and Caroline for inviting me to 19 speak. We are running late. I talk fast, as it is. 20 But I am going to try to even get more information 21 into a smaller amount of time. 22 NASCO stands for North American Strategy for 23 Competitiveness. We have been around for 22 years. 24 We started out as the I-35 Corridor Coalition, so 25 there are some people in the room that might still

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1 think that we're entirely focused on the I-35 2 mid-continent corridor. But I want to spend most of 3 my time today talking about where we are now. 4 So over those 22 years, we have grown into an 5 entirely continental organization. We have members 6 from all over Canada, the United States and Mexico 7 from government. So we have provinces all over the 8 Canadian border, cities, counties, states. We have 9 industry that covers every level of supply chain. We 10 have all the modes of transportation, waterboards, 11 inland ports, logistics hubs, real estate companies, 12 insurance, banks, I mean, universities, community 13 colleges. 14 So we have this amazing, very vibrant 15 energetic group of members that stand ready to assist 16 in all things North American. And really, not all 17 things; in three things. Supply chain and logistics, 18 energy in the environment and closing the skilled 19 workforce gap and manufacturing and logistics jobs. 20 So there's been a lot of discussion today 21 about wanting to maybe visit the Canadian border, 22 getting in touch with Canadian border crossing 23 representatives. NASCO stands ready to assist in 24 anything, any way that we can help, be supportive of 25 your objectives, of your initiatives, of events you

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1 would like to have, meetings, that kind of a thing. 2 We have a great network that is very excited about 3 meeting people on the southern border. 4 That's what NASCO does best. We connect 5 people to one another. I know your theme is 6 connecting the Tex/Mex border with North Texas and 7 beyond. That "and beyond" we cover in spades. 8 So I know each of our focus areas, we have 9 advocacy efforts and then we have action items and 10 things that we try to roll up our sleeves and do and 11 get dirty and try things out and test concepts. 12 So I know there was earlier a mention of, 13 you know, the -- to help with the trade growth, 14 technologies, innovative technologies, to help with 15 trade growth. So obviously, we're very supportive of 16 the Single Window. 17 At NASCO we believe there should be a North 18 American Single Window that when you talk about inner 19 operability with other governments and countries 20 around the world, that you must be inner operable with 21 Canada and Mexico first as a North American continent. 22 There's so many ways that our North American 23 continent can be self-sustaining. So through supply 24 chains, we're focused on the Single Window. We have 25 done quite a few different pilot projects, testing

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1 out, technology-based solutions for improving freight 2 flows in major metropolitan areas, along major freight 3 corridors. We're promoting more cross-border efforts 4 along those lines to test technologies as you move 5 across international borders. 6 So separate and apart from the Single Window 7 Initiative, but actually through optimization where 8 containers need to be picked up and dropped off, 9 appointment times, appointment windows, factoring in 10 border wait time, things like that. So we have got a 11 lot of really cool pilot projects that we've been 12 involved in in engaging stakeholders. 13 There's one that we're doing now that I have 14 to put a plug in for. If any of you have contacts 15 with trucking companies that are moving freight in 16 between or along the I-35 corridor, there's a TXDOT 17 project that is trying to coordinate communication 18 platforms between trucking companies and their 19 destinations, like deliveries, local deliveries, major 20 freight movement but also factoring in TTI's system 21 for information on construction zones so that the U.S. 22 DOT and TXDOT are looking at, can you help move 23 freight more effectively and securely through major, 24 major construction on major freight networks. 25 And so there's a nasty construction zone

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1 between Waco and Austin going on right now. It used 2 to be 100 miles between Dallas and Austin. Now it's 3 43. But if any of you have trucking companies or 4 people that you know that might be moving some freight 5 in that major zone, there's a real opportunity there 6 to help us test out some cool technologies to improve 7 efficiencies there. So that's my plug for that. 8 You guys were mentioning corridors and the 9 effect of -- you know, the corridors might be local 10 here in Texas, but they connect to all over the USA 11 and the continent. So NASCO is really involved in 12 publicizing local projects of continental 13 significance, which I think almost all of you are, if 14 you're at a border crossing in Texas, are a local 15 project with continental significance. 16 So again, we stand ready to help publicize 17 your efforts, your needs, your requirements, your 18 strategies, all that kind of a thing. 19 Under workforce -- I know that someone was 20 bringing up workforce. Ivan brought up workforce. 21 That's one of our major focus areas, recognizing that 22 you can have these great efficient transportation 23 networks. But if you don't have the workers that are 24 manufacturing the goods and moving the goods, you have 25 nothing.

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1 So NASCO has played a very large role in 2 being vocal about the need to raise awareness of 3 pipelines for manufacturing and logistics jobs, 4 getting people interested in those types of jobs, 5 recognizing there's a huge skilled worker gap of what 6 we need over the next several years and what there 7 exists in these industries. 8 We have worked with -- the Manufacturing 9 Skills Standards Council has been one of our key 10 partners, and they are the nationally accredited U.S. 11 nationally accredited body on developing entry level 12 and mid-level logistics and manufacturing 13 certification programs. They're part of the U.S.'s 14 staffable credentialing program that incorporates 15 other organization's programs as well. 16 But MSSC is that first step. And we're in 17 the process of working with the Bush Institute and 18 several other organizations on a tri-national 19 workforce pilot. NASCO has done a small scale 20 tri-national workforce pilot with their credentials by 21 introducing those programs to Mexico and Canadian 22 companies that have trained, like, at least 50 23 employees total and trying to show that the ones that 24 come out of that training are better at their jobs 25 than the ones that have not had training to show the

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1 benchmark of how this program can be successful. 2 What we're recognizing, though, through that 3 small workforce pilot is that the way people respect 4 and value training versus a certification or 5 on-the-job work versus knowledge in Mexico and Canada 6 is slightly different than we value it here. 7 So what we're now doing is switching that to 8 a larger scale pilot to work on creating the pipelines 9 in Mexico and in Canada at the high school and 10 technological school level to get students to take the 11 courses while they're in high school. When they 12 graduate, they will already have the certification and 13 getting the industry to commit to offering them an 14 interview or, in fact, going on and hiring them and 15 then being able to gauge the success of those students 16 in the industry. 17 You come out with the training. You come 18 out with the knowledge. And then your on-the-job 19 performance is better than those that have not taken 20 it. So that is what we're now shifting our efforts 21 to. So I just think for some of you that might be 22 interested in workforce, that is something that we're 23 working on at a tri-national level. 24 Energy -- Gerry has mentioned the CNG at the 25 borders. We've been working a lot on alternative

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1 fuels, renewable energies, following the Mexico 2 energy reforms, connecting our Canadians and U.S. to 3 opportunities in Mexico. 4 They were slightly ill-timed with the drop in 5 oil prices, but we do believe, you know, that will fix 6 itself eventually. So there's a lot of stuff we have 7 going on there as well. 8 What I want to focus the rest of my time 9 on -- I am sorry. I'm going really fast here. Does 10 anyone have any questions? You can hit -- Rachel 11 Connell is with me as well. She's our director of 12 membership and events. But you can hit us up after 13 the talk. 14 But trade is under attack. So, again, there 15 were some comments on the PowerPoints before us about 16 what to do about people that think NAFTA has been a 17 huge failure and what to do about people that are 18 racists and bigots as it pertains to Mexico and trade 19 with Mexico. 20 Our organization has come up with two 21 different campaigns over the past couple of years. 22 One is called Think North American. It is designed to 23 go into -- I don't even know if I said this. We are 24 the only tri-national grassroots membership 25 organization that exists that works on supply chain

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1 logistics energy and workforce. 2 So we have got a great network at the 3 grassroots level. The people -- someone asked me how 4 we're funded. People pay -- entities pay membership 5 dues on an annual basis. But it's not like we're 6 beholden to two or three different states or one 7 federal government agency. 8 Like, what we do is truly a democracy led by 9 the voting rights of our members. And so we have a 10 great ability to go into those grassroots areas and 11 communicate to the local population and key 12 stakeholders the importance of trade on their daily 13 lives, the importance of North America, the importance 14 of thinking North American, voting North American, 15 that our continent has a great opportunity for energy 16 independence and security and to be self-sustaining. 17 So we're hard at work in trying to help send those 18 messages about the power of North America in the 19 global marketplace. 20 And then we also just came up with our All 21 Trade Is Personal campaign last year. We're working 22 with several different like-minded organizations that 23 are binational organizations or organizations that are 24 caring about trade and even this committee as well to 25 try to help get people to recognize the importance in

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1 their daily life, the positive impact trade plays in 2 your daily life, that everything you touch, see, 3 smell, eat all day long got there on a truck, train, a 4 ship or a plane. 5 The cost of goods in the marketplace is 6 based on transportation, logistics costs and fuel 7 costs and the value of trade and keeping those costs 8 low. 9 So we're out there mostly trying to educate 10 and show the general population -- but that's a big 11 "ask" -- the elected officials that vote on this stuff 12 and the elected officials that all too often cower to 13 the lowest common denominator in their communities 14 that like to complain about this stuff. 15 And so -- I'm sorry -- so we're trying to 16 get to the elected officials to give them talking 17 points about how to address constituents that may be 18 these types of people. And so we are working very 19 hard on that. And we would welcome any of your 20 participation, your good stories that you have to 21 tell, particularly about Mexico companies or Mexicans 22 that have come to the Unites States and are huge 23 contributors to their community and, you know, that 24 have the positive Mexico stories to tell. We're 25 looking for those.

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1 And we're going to be kicking off a 2 campaign. This is not just for future trade 3 agreements, which is critical, but just for the 4 general kind of welfare of our entire continent. 5 So that is a slight -- oh, we have -- Rachel 6 would kill me -- we have events that we do around the 7 continent. We have regional competitiveness summits 8 that are small events, like a day long where we bring 9 in Canada, U.S., Mexico perspectives for two or three 10 issues that are critical to that region. We do them 11 all over the continent all year long. 12 And then we have annual events that rotate 13 between the three countries. It's in Dallas and Fort 14 Worth in November, November 14 and 15 this year. One 15 day is in Fort Worth, and one day is in Dallas at the 16 Bush Center. And then our next one in 2017 will be in 17 Monterey, and then it goes up to Canada. 18 So that's a great way if you're interested 19 in learning more about our organization or meeting our 20 North American network. It's when our family comes 21 together, which is why we call it the Continental 22 Reunion. 23 Oh, and harmonization and regulation of 24 policies, like between provinces and states and across 25 international voters, that's a key element of ours as

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1 well. 2 So I wanted to kind of boil this down. I 3 know I went very fast, but I really appreciate being 4 here. I hope to meet all of you. Thank you to all of 5 our NASCO members that are already existing. And I 6 guess that's it. 7 I can take questions or if you want to skip 8 them, that's fine, too. 9 UNIDENTIFIED SPEAKER: That deserves an 10 applause. 11 (Applause.) 12 MS. MAYS: Thank, you Tiffany. I 13 appreciate it. 14 MS. MELVIN: Thank you. 15 SECRETARY CASCOS: You realize that 16 they will never look at you the same now. 17 MS. MAYS: Okay. Can we have our next 18 panelists -- Terry, can you have the panelists come 19 up? 20 MR. POLAND: Yes. If I can have the 21 gentlemen join me. For those of you who don't know 22 me, I'm Terry Poland. I'm a logistics professor at 23 the University of North Texas. And I direct the Jim 24 McNabb Institute. 25 And Caroline asked if we could have a panel

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1 discussion where we could really learn from the 2 shippers that are moving that freight over the 3 highways or in those railcars or by air cargo into and 4 from Mexico, as well as some of the carriers that are 5 moving some of that freight. I know we have several 6 railroads represented here, but in this group we will 7 also be looking at those companies that are moving the 8 freight on the highways. 9 So who we have here today is Luis Leal, who 10 is the CEO from the Marquis group, a heavy hauler. We 11 have Tom McCoy, who is Director of Global 12 Transportation for Sanmina SCI. We have David Faraby, 13 Vice President of Sales from Lone Star Transportation 14 and then Jim Corrigan, President, Trinity Logistics 15 Group. So we have both shippers and carriers 16 represented here today. 17 So what I would like to do is just let each 18 of them briefly talk about what their company does in 19 terms of movement and also maybe in terms of freight 20 and how they relate to some of the things happening in 21 Mexico. 22 So Luis, we will start off with you. 23 MR. LEAL: Sure. Good morning. I'm 24 Luis Leal. I'm with Marquis Trans Logistics. We're 25 actually a Fort-Worth-based company. We have a

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1 terminal in Laredo, Texas. We have a terminal in 2 Monterey, Mexico. We actually have a group of 3 companies, trucking companies based out of this area. 4 We also have a Mexican carrier side. 5 We concentrate doing dry bed, flat bed and 6 specialized trade. One of our new divisions, Project 7 Logistics, which is a growing trend in Mexico. A lot 8 of the manufacturing plants in Mexico are bringing a 9 lot of equipment from the United States into Mexico. 10 So, you know, we do -- manage anything that's 11 from a FedEx box to giant boilers coming in and 12 weighing about 300,000 pounds. So that's what we do. 13 MR. MCCOY: Thank you. My name is Tom 14 McCoy. I'm with Sanmina Corporation. We're a 15 San-Jose-based company, and we're about $6.3 billion. 16 We're a contract manufacturer primarily in the 17 electronics industry and the mechanical industry. You 18 don't see our products because it's always branded 19 under other OEM names. 20 We have about 120 facilities around the 21 world, 26 plants here in the United States. We've got 22 13 plants or more in Mexico. We have seven in 23 Guadalajara, two in Monterey, one in Reynosa. We have 24 three large repair facilities. One is in Juarez, 25 Guadalajara and in Mexico City.

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1 So we transfer a lot of product not only 2 across the border. We have -- we operate with three 3 PPLS, two in McAllen and Hidalgo, one in Laredo. And 4 then we operate our own facility in El Paso where we 5 bring in a lot of material that we take across to 6 Juarez, as well as we use it as an export or really a 7 distribution for northbound product that our customers 8 want brought over the border. Once it's over the 9 border, then we hold it there. And then we distribute 10 it to their end customers. 11 So we utilize a lot of air freight, a 12 tremendous amount of air freight. We bring in air 13 freight through DFW, through LAX. And then we will 14 truck it to El Paso and then down to Guadalajara. And 15 we're using -- primarily, our cross-border points are 16 McAllen to service our Reynosa facility. Laredo 17 services Guadalajara and Monterey. And El Paso 18 services Guadalajara, as well as Juarez. 19 So we have been in Mexico for 25 years or 20 more, and that's one of our largest growing areas. 21 And, you know, one of the things you were talking 22 about today is -- that's where growth can really -- 23 can really happen. 24 And it can happen not necessarily just 25 through organic growth, but it can happen at the

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1 expense of some of your competitors called China and 2 Europe and other places as well. Thank you. 3 MR. FARABY: Good morning. My name is 4 David Faraby with Lone Star Transportation. We're one 5 of the largest movers of open bed freight throughout 6 the U.S. Together with our sister companies in the 7 Daske Group, we are the largest flatbed organization 8 in North America. 9 Particularly to this group, Lone Star does a 10 lot of work in and out of Mexico, not only regular 11 flatbed work, but we are a big supplier of 12 over-dimensional cargo. We have substantial 13 investments and facilities in Laredo and in Pharr. 14 We cross lots of loads every day, do a lot 15 in the over-dimensional market. And that's one of the 16 things we will talk about here in a few minutes, I 17 think. 18 MR. CORRIGAN: I'm Jim Corrigan from 19 Trinity Logistics Group. And we're also an open bed 20 and flatbed trucking company. And when we grow up, we 21 want to be like Lone Star. But yeah, that's part of 22 the story. 23 The truth is Trinity Logistics Group is a 24 wholly-owed subsidiary of Trinity Industries, which is 25 a heavy manufacturing company. You know, we built

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1 about 35,000 railcars last year. But we build wind 2 towers, utility poles, inland barges, guardrails, a 3 lot of other products as well. 4 But like all of our Trinity businesses, we 5 strive to be premiere, and the folks in the Daske 6 group certainly are -- in that company there's -- we 7 do work with them a lot, but -- so we're a trucking 8 company, but we're also the shipper of most of 9 Trinity's freight. And we move that by truck and by 10 rail primarily. 11 Trinity has plants throughout the United 12 States, especially the southeast up through the 13 Midwest and in Texas. But we also have a significant 14 platform in Mexico as well, including plants in 15 Sabinas, Monclova, Huehuetoca and Monterey. So we do 16 a thriving business. Our primarily border crossing 17 location is Eagle Pass, so that's a smaller 18 destination than Laredo down Highway 57 southwest of 19 San Antonio there. 20 But about this time last year, we were 21 crossing around 1,800 loads a month southbound into 22 Mexico. And we kind of pride ourselves on being a 23 flexible manufacturer. So as capacity and demand 24 needs change, we shift. 25 And we can build just anything anywhere, so

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1 we will see different products made in the U.S. and in 2 Mexico and a lot of trade, a lot of freight going back 3 and forth between those areas. 4 MR. POLAND: Okay. Go ahead. I will 5 just let you guys pass it along. I am going to go 6 ahead and get some of the questions started, and then 7 I will start taking questions from the floor. 8 Well, we have got a question right away. So 9 we will just start with it. 10 MR. DOMINGUEZ: Arturo Dominguez. For 11 the record, has NAFTA hurt you or anybody? 12 MR. CORRIGAN: Not in my experience, 13 which is relatively short with the company. But, you 14 know, I think Trinity Industries, as a whole, is 15 probably an example of a company that greatly benefits 16 from that cross-border trade. It's vital to our 17 business model as a company to be able to have that 18 flexibility to change our manufacturing locations and 19 freely move freight back and forth across the border, 20 both inbound and then finished products across. 21 MR. POLAND: The rest of the panel. 22 MR. FARABY: From Lone Star's 23 perspective, there's two sides to the coin. It's 24 certainly been beneficial to us as Mexico is a huge 25 market for us, and we see more manufacturing going

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1 down there. So both in and out, it's a very good 2 thing. 3 We have our challenges from a compliance 4 standpoint with some of the carriers that we compete 5 with coming out of Mexico, particularly when it comes 6 to safety requirements and hours of service and stuff. 7 And I heard the gentleman earlier make a 8 comment about the inspections, that more Mexico trucks 9 were favorably inspected than U.S. trucks. And that 10 comment surprised me, but I think it would be 11 interesting to see what those violations were. 12 Because it's certainly a requirement here in 13 the U.S. for all carriers, your first -- your first 14 commitment is to the highway public and that you run a 15 safe operation. So both sides of the coin, but 16 overall, I would say favorable, yeah. 17 UNIDENTIFIED SPEAKER: From our 18 standpoint absolutely beneficial. 19 UNIDENTIFIED SPEAKER: Yes. It's been 20 great for our business. So, you know, a lot of 21 manufacturing has started going through -- comes from 22 the United States into Mexico. Instead of buying 23 equipment from Italy or France or Europe, we prefer to 24 buy it from the United States. So all the buyers that 25 I deal with prefer to buy from United States.

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1 MR. POLAND: Thank you. Yes, sir. 2 UNIDENTIFIED SPEAKER: Yeah. 3 Especially since we have shippers, I was wondering if 4 you could talk a little bit or if you can give us an 5 insight about how you choose what mode of carrier you 6 use, whether you're going to use air, rail, truck or 7 other and how you also select your Port Of Entry? 8 I mean, I think a lot of it has to do with 9 geographic location. But also, I know that a lot of 10 the ports are always thinking about how can they make 11 their ports more competitive. So if you could 12 maybe -- you guys are actually the ones making those 13 decisions, so if you could give us some insight on 14 both of those. 15 MR. POLAND: Tom, that would probably 16 be a good one for you. 17 MR. MCCOY: Basically, ours is speed, 18 okay, in the sense that it's the velocity of the 19 shipment that we have, how fast we have to move it. 20 Primarily, we're servicing -- we're crossing 21 the border with product that we're bringing in from 22 the U.S., a little bit of Canada. And it's primarily 23 LTL cargo and small package. In that case it's 24 really -- the mode -- you know, small package guys, we 25 really don't have a lot of choice. Right? There's

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1 two companies. That's it. So that really boils down 2 to the type of service they're willing to offer and 3 the price. 4 From an LTL standpoint, we look very much 5 at -- the market that we're pursuing right now is 6 we're accumulating cargo in about five different 7 locations in the U.S., and then we're trying to move 8 full truckloads either down to Laredo or right across 9 the border. But in most cases, all the LTL cargo 10 still stops in Laredo. And we cross the border at 11 that point. 12 The other locations are chosen really 13 because of geography purely. You know, why do we 14 cross -- if the plant is in Reynosa, you're going to 15 go across in McAllen. Okay? If -- Laredo makes the 16 best sense just from geography, as well as quite 17 honestly, the infrastructure on the Mexico side. 18 Okay? 19 Because we -- one of the things that you 20 have got to think about is as you build your 21 infrastructure here in the U.S., you're really 22 building the bigger part of the funnel. Right? So 23 you can build a really good, big, top funnel. But 24 it's still going to be limited by the amount of 25 capacity for the Mexican highways to handle it as it

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1 goes in. 2 And we move probably, I don't know, eight to 3 nine truckloads a night out of Laredo and down into 4 the Guadalajara area. And those trucks are absolutely 5 limited to -- they have to stay on the national 6 highway. They are on GPS. They cannot go off on the 7 track. And so we're going to go through Laredo, no 8 matter what, or we're going to come down through El 9 Paso. 10 The next geography and most of what is 11 coming out of El Paso is product that it's more 12 economical for us to fly into and truck it 13 down. Okay? I'm getting to a whole other story as to 14 why DFW doesn't play into that. But that's for maybe 15 a different conversation. 16 But really, it's velocity of the supply 17 chain and geography. 18 UNIDENTIFIED SPEAKER: Let me just kind 19 of piggyback off that question. How does the 20 infrastructure in Texas also affect your decisions as 21 carriers as to what routes, what Ports Of Entries 22 you're going to be selecting? So -- 23 MR. FARABY: From my perspective, and I 24 said earlier, that Lone Star does a lot of work in the 25 over-dimensional overloads. And we counsel with

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1 shippers sometimes on what the best options are. 2 One thing our state has -- when you get 3 over-dimensional permits, the State of Texas, by far, 4 has the most functional and knowledgeable permit 5 department of any state in the union. So that's huge 6 not only in getting your loads moved, but the time to 7 get the permits done. 8 Secondly, the infrastructure here is very 9 favorable generally. And I agree with Tom's comment 10 about looking at the logistics of where it's actually 11 going and getting it out, getting it in there. 12 And Texas is a very freight-friendly state 13 when it comes to weight requirements for 14 over-dimensional loads and the size you can move 15 compared to some of the other border states, like 16 Arizona and California. So it's one of the 17 intangibles that our state has working for us a whole 18 lot. 19 MR. CORRIGAN: I would say from 20 Trinity's perspective, the choice is very simple for 21 us. Mode selection is based on cost. And, you know, 22 we're primarily looking at a choice between moving 23 freight by rail and moving it by flatbed. A lot of, 24 you know, plated steel and things like that, so air 25 hasn't been an option really for us.

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1 But, you know, we will make choices to ship 2 via rail over truck for the overall cost savings to 3 the company. And then geography is the primarily -- 4 you know, our plants are 80 miles, 150 miles straight 5 down 57 from Eagle Pass. The Monterey addition is 6 relatively recent, so we see that -- you know, we see 7 probably two crossings merging here for us in the near 8 future. 9 But as far as Highway 57 goes, unlike, you 10 know, maybe what you see on 35, the infrastructure in 11 Mexico is at least equal to, if not better than that 12 from going from San Antonio down to Eagle Pass where 13 it's primarily a, you know, two-lane highway. And if 14 you get stuck behind one of the trucks that's marked 15 TLG, you will be cursing it for about two-and-a-half 16 hours as you're going 64 miles an hour. But -- 17 So, you know, I would love to see that 18 highway expanded and the crossing expanded there. You 19 know, I think it would promote some additional growth. 20 UNIDENTIFIED SPEAKER: When we were 21 preparing, Luis, we were talking about a specific 22 issue that you were facing. And it's come up during 23 the discussion today, and that's some of the 24 coordination between local, state, federal. But you 25 have also run into one, especially with the locals,

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1 like on permitting for oversized, overweight 2 shipments. So I was wondering if you could just talk 3 about that. 4 MR. LEAL: Yes. Especially, on the 5 oversize in the City of Laredo -- so there's a process 6 of getting the permits, so it's pretty much you go to 7 TXDOT. And you can get a permit through TXDOT. And 8 then from there, we have to go get a permit through 9 the City of Laredo and get actually escorts approved 10 by the City of Laredo. 11 So sometimes our facilities, they're really 12 close to the Columbia bridge. And I know where Lone 13 Star's is. They're a little more on the inside. 14 We're more on the outside. We run into problems like 15 Customs delays one or two days because we don't have a 16 permit on the city-approved escorts for us to ensure a 17 three-mile run or a four-mile run so we don't run the 18 other way. 19 So my perspective, you know, has always 20 been, you know, first of all, to do super loads. When 21 we're doing super loads, we're actually doing -- it 22 takes about 10 to 12 weeks to get a full permit load 23 versus -- you know, of course, TXDOT is really great 24 with over-dimensional or oversized loans. 25 But when it becomes super loads, we're

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1 looking at 10 to 12 weeks versus Nebraska, versus 2 Kansas, versus Oklahoma that have an easier process, 3 which it takes about a month, anywhere from two to six 4 weeks. So that's one challenge that I run into. 5 And sometimes customers don't understand 6 that. So I have to explain to them. So, you know, I 7 sit in a lot of meetings with the CEOs and -- and 8 we're actually talking about multinational companies 9 that are buying a $10 million boiler or certain 10 specific equipment. And they don't understand why 11 Texas takes so long to do it. 12 They offer to pay for, you know, air 13 freight, and sometimes we're -- you know they offer to 14 do that. They want us to go around Texas. So that's 15 one of the issues that I run into, the process -- the 16 permitting process for super loads, the time frame. 17 Two is the process for that permit for the 18 City of Laredo, which is -- no one really has it 19 anywhere that I've gone, but in Nebraska or Kansas. 20 They don't -- there's no locals. And it's, every once 21 in a while, an easy process. But it's only bad for 24 22 hours. 23 So if I pull the permit right now, go down 24 and get the permit, I have got 24 hours. And there is 25 that coordination between everybody. There's a whole

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1 team of people that have to advise the Mexican Customs 2 that I'm coming through. 3 So if somebody is coming late or if I've got 4 my permits and the city-approved escorts don't come 5 across, they don't come on time, I lose my whole day. 6 I lose my whole crew. I am billing my customer for 7 thousands of dollars. And then I lose my permit to -- 8 it's a notice. It's not a permit. It's just you need 9 to notify 24 hours in advance to the Mexican Customs. 10 So that just causes two or 3 days of delays, and 11 customers are not happy about that. 12 So another thing to add on to the other 13 gentleman's question, how do they -- how do we pick 14 the shipper? But we deal with a lot of the shippers 15 and buyers and actually the buyers from the Mexican 16 companies. Because they have to have a -- they have 17 to be the import of record. 18 So, you know, a U.S. Customs agent is 19 allowed to import from any port. A Mexican Customs 20 agent can only import from four ports, if I'm not 21 mistaken, maybe three. So they pick Laredo. They 22 have a main office in Laredo. They have a office in 23 Veracruz, Mexico City for the airport and that's it. 24 So big customers like him, he probably has 25 three or four Customs agents when importing from this

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1 point to this point, so that's very key. So how do we 2 pick ports? Because of the Customs agents. And a lot 3 of companies would -- they push everything to Laredo 4 or to McAllen, depending on that. 5 Two is the safety. I tell my customers, you 6 know what, I don't mind going through McAllen, but I 7 prefer to go through Laredo. Even though we're 8 actually -- you know, we're probably closer to 9 McAllen, crossing to McAllen. But I would go through 10 Laredo, come back around due to safety. 11 And I will tell you this. I'm on the 12 ground. I'm not in the office. I'm on the ground all 13 the time, and I can tell you there's areas that I will 14 not go. And I'm a former Marine. I spent four years 15 in the Marine Corps. I am not afraid of any bullets 16 or anything like that. But there's certain areas that 17 you don't go. We actually tell the customers do not 18 go through Alameda. Just try to avoid that area 19 because of safety. 20 So how do we choose ports? For me my job is 21 to advise the customer, to make sure they know that 22 we -- that for the safety of my employees, the safety 23 of their own involved, it is preferred to avoid 24 certain areas. That's the way we choose ports, too. 25 Thank you.

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1 MR. POLAND: Any questions? One of the 2 things that we were talking about, of course, was all 3 of the inspections with CBP and border patrol and, you 4 know, some of the other things happening at the 5 crossings. 6 But I would be interested in hearing some of 7 the panel members' points on what they view as some of 8 the most significant challenges in trying to move 9 freight back and forth across the border. 10 If I could start with you, Tom, on that one. 11 MR. MCCOY: Well, really, the most 12 significant challenge is just making sure that your 13 paperwork is right. I mean, that's the bottom line is 14 that as long as your paperwork is right, as long as 15 you have good Customs welfare on both sides of the 16 border, we usually don't have problems. 17 I mean, we were -- you know, we're a Tier 18 III C-TPAT certified company. So we really don't 19 have -- we have fast lane privileges. So unless 20 there's really a major security issue or something at 21 the border, we don't have the problems that a lot of 22 other companies that maybe don't necessarily ship 23 across at all times. 24 We, in fact, get across the border, let's 25 say, in McAllen so fast that in our SOP for the plan,

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1 we still time our truckers down to the minute as to 2 when they leave our McAllen cross-dock until they can 3 arrive at the plant. 4 Now, that has some things to do with 5 security as well. Because if they're not there within 6 that hour-and-30-minute time frame, we start being a 7 bit concerned and start wondering what's happening, 8 you know, is there a problem at the bridge. 9 But in all honesty, in the last couple of 10 years, we have seen a huge increase in the 11 efficiencies of being able to get -- of consistently 12 being able to get it across. You always have the 13 delays, you know, in Juarez at the bridge. But it's 14 nothing to what we saw two to three to four years ago. 15 UNIDENTIFIED SPEAKER: I want to echo 16 what Tom said. The paperwork is the key. If your 17 shipper is well-qualified and understands how to 18 process his paperwork, it makes things very simple. 19 Also, I want to go back just a minute. I'm 20 not sure that everybody understands about -- the 21 comment about a super load. If you see a truck and 22 trailer going down the highway today, a 23 truck-trailered load can gross 80,000 pounds. 24 And particularly, in Texas a super load is 25 anything that is truck, trailer and load over 254,000.

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1 In those situations, yeah, the State of Texas does do 2 bridge analysis, as they should, and does their due 3 diligence. That can take a little longer to get a 4 permit. 5 But I reiterate the fact that our 6 over-dimensional permit at TXDOT, it's just one of the 7 best in the country. And shippers recognize that, and 8 they know they can get loads through here. 9 MR. CORRIGAN: Yeah. From our 10 standpoint -- what was the question again, what are -- 11 MR. POLAND: What are the major 12 challenges that you face? Yes. 13 MR. CORRIGAN: Yeah. Well, challenges, 14 you know, some of the ones as far as dealing with 15 compliance of the Mexican carriers, that is an issue 16 that we have had a different experience with because 17 our partner Mexican carrier is my counterpart with 18 Trinity de Mexico. So, you know, ultimately, we're 19 reporting to the same business. 20 So we've worked closely with them to ensure 21 that their compliance is up to our standards and vice 22 versa and, you know, helping them with training, 23 regulation, compliance or maintenance. We do that. 24 Now, when we do occasionally deal with 25 outside non-Trinity Mexican carriers, yeah, we had

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1 some of those same struggles as has been outlined by 2 David before. At Eagle Pass specifically, it kind of 3 goes back to an infrastructure problem again. You 4 know, you have the volume going through there that you 5 do in Laredo or El Paso, so the resources are not 6 dedicated to that. 7 And currently, there's three lanes on the 8 commercial bridge. And that commercial bridge is 9 opened 9:00 a.m. to 10:00 p.m. Monday through Friday. 10 And I think it's 9:00 to 2:00 on Saturdays and closed 11 on Sundays. So that causes a -- you know, meanwhile 12 freight is flowing all of the time into and out of our 13 Eagle Pass yard. 14 But you get a system that shuts down and has 15 to restart again every Monday morning, so you get that 16 ebb and flow and that backlog versus if it was open 17 24/7 and you would have that consistent day's flow 18 through there. 19 Also, just with some of the dimensions 20 there, we have struggled with the oversized loads, 21 especially, you know, super loads coming through there 22 just because of the turning radiuses on the bridge. 23 And, you know, you have to do a lot of coordination 24 ahead of time because they will ultimately have to 25 shut down multiple lanes just to get that one load

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1 through there. And then if your timing is off, then 2 it's reset and try it again, you know, maybe tomorrow, 3 maybe next week kind of thing. 4 But yeah, that -- we have -- you know, we 5 have had a really good relationship with an in-house 6 Customs broker down there. So I think kind of 7 investing in the expertise to ensure that your 8 paperwork is always up to par really helps. 9 MR. SAENZ: I was just curious -- Pete 10 Saenz -- when you deliver to Mexico, do your trucks 11 come back empty, or do you bring back materials or 12 goods? 13 MR. CORRIGAN: We do our best to do 14 round trips, but our -- we control everything 15 southbound. In a lot of cases, we sell to our 16 customer, and the customer is responsible for the 17 product coming northbound. 18 And so there's some cases we have to, you 19 know, empty out a trick and turn it away. But we work 20 with our carriers down there, as well as the carriers 21 here in North America or in the United States to try 22 and make sure that we can get as many back-to-backs as 23 we possibly can. It just works out much better that 24 way than waiting for, you know, another -- you know, 25 getting in other trucks.

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1 Once it's on our campus -- in Guadalajara we 2 have -- we essentially have seven plants on one large 3 campus. And so we, in fact, will -- we may be 4 unloading a truck at our -- we have a general 5 distribution center on the campus. So we will unload 6 that truck there and then send it over to pick up a 7 full load and then take it back out. 8 MR. SAENZ: Thank you. 9 UNIDENTIFIED SPEAKER: Luis, what is 10 your experience on balance between front hauls and 11 back hauls going to and from the border? 12 MR. LEAL: I mean, we are loading going 13 back and forth. I mean, we're just, you know -- we 14 have a layover again there one day, but we're -- you 15 know, there's plenty of freight. You know, the 16 American side is pretty easy. There's a lot of just 17 little boards and a lot of big network of freight 18 brokers and PPLs and Mexican sides. 19 There's no freight -- there's no -- it's all 20 connections, you know. And it's building 21 relationships. We come back and forth all the time 22 loaded, so -- 23 MR. POLAND: David? 24 MR. SCHWEBEL: Can I ask a question? 25 MR. POLAND: If I can just get their --

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1 the other two gentlemen's perspectives and what their 2 balance is. And then we'll -- 3 MR. FARABY: From Lone Star's 4 perspective, we load down and back. And I assure you 5 if it's not that way, they call the sales department 6 and they want to know why. 7 MR. CORRIGAN: And for Trinity it's 8 really based on Trinity's product and on what we're 9 producing down there. So in the last three years, 10 it's been about a three-to-one ratio of southbound 11 Mexican bound freight versus what is coming out. 12 So building all of those railcars, that 13 finished product is coming out on the rail. But, 14 yeah, we have got about three empty trucks coming out 15 of Eagle Pass for every one going in. We try and go 16 down to Laredo, and we have had a little bit of 17 success with some cheap freight. But Lone Star has 18 got all of the good customers down there. 19 MR. POLAND: Yes, sir, your question? 20 MR. SCHWEBEL: This is Schwebel. I 21 have a question in regards to -- I drive every weekend 22 from Laredo to San Antonio. And this is a question 23 related more on the safety, as well as the 24 availability of adequate equipment. 25 It seems to me that I see more trailers with

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1 Mexican plates. I'm seeing more trailers with Mexican 2 plates. So the question is -- you may have a tractor 3 hauling a tractor, you know, and maybe a -- or 4 whatever, when you look at it. But are these 5 independents -- just for clarification, are these 6 independents, or are these -- you know, what is the 7 difference between a for-hire independent hauling a 8 Mexican trailer versus you-all as carriers? 9 MR. FARABY: So at Lone Star and at 10 Daske group, we're what's referred to as asset-based. 11 We own trucks and trailers. Okay? And I think the 12 same is true with Trinity. Yeah, we're asset-based. 13 So our trucks will pull our trailers. And 14 in our instance we wouldn't -- it would be a very 15 unusual circumstance for us to be pulling a trailer 16 with a Mexico plate or anything like that. Now, the 17 flipside of that is our trailers in Mexico, many times 18 a Mexico carrier will come up to our yard and pick up 19 one of our trailers and move it into Mexico for us. 20 My understanding is that the Mexico carriers 21 that come into the United States, and not all of them 22 do, are held to the same DOT safety standards as U.S. 23 carriers. The big difference is that those standards 24 don't start until they enter the U.S. 25 So, for instance, where I am governed by

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1 hours of service rules here -- I'm not saying they do 2 this -- but a Mexico carrier could drive from Monterey 3 to Laredo and not have to log or do his hours of 4 service and picks that up at the U.S. So he can have 5 more operating time door-to-door than I could. So 6 there's some things like that that still need to be 7 addressed, I think. 8 UNIDENTIFIED SPEAKER: My question at 9 this point -- and I would like each one of you to 10 address this -- what are you seeing in terms of trends 11 and in terms of the volume of freight you're moving, 12 as well as maybe the mix of shippers or the mix of 13 freight itself? What are you seeing in terms of 14 trends occurring? 15 MR. LEAL: Can I answer his question 16 real quick? 17 UNIDENTIFIED SPEAKER: Yes. 18 MR. LEAL: There is not a truck that 19 really crosses the border door-to-door. Especially, a 20 Mexican carrier that goes to the border drops at a 21 yard. A transfer carrier does that. 22 Now, because the transfer carrier, which is 23 maybe a Mexican national who has a visa, will cross 24 the border. Just, all he does is cross the border 25 back and forth with one tractor, and that's all he

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1 does. He takes it to the border location. Then the 2 American carrier will pick it up. 3 My situation -- our transload -- I try to 4 transload most of my freight. If I don't pick it up 5 in Mexico -- so we have an asset-based company. But 6 at the same time we are -- so whatever I can't pick up 7 in one day, I hire somebody else to pick it up for me. 8 So when we cross the border, we transload at 9 our facility. And it comes -- you know, we transload 10 it and put it on a American trailer. I don't see -- I 11 hardly see Mexican trailers on the road, the people I 12 deal with. You see them here and there, but we try to 13 stay away from that because they don't have the same 14 qualifications, or they're not maintained properly. 15 We know that, and then -- I know that for a fact. 16 So once we cross over, we switch everything 17 to American trailers. Unless our American trailer 18 went south and is coming back, then we don't do that, 19 switch American trailers. 20 You say what is the difference between a 21 hired, an independent and -- they're all private 22 companies. It's just all in one. So it's one 23 carrier. It's not for hire. It's probably like -- 24 sometimes like Trinity, all they do is just their own 25 stuff. But they actually -- I am pretty sure they

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1 have got some back hauls. 2 But, you know, I can assure you that that 3 driver that is coming from Mexico doesn't drive over 4 here. You know, Mexican drivers will stay in Mexico. 5 The transfer drivers will cross the border, and the 6 American drivers will pick it here. 7 There are entities, Mexican companies, 8 like -- that have their own -- are actually, a Mexican 9 company. But they have their own facility here, and 10 they have their own carrier here, which is a little 11 different. But they're actually not Mexican carriers. 12 They're more like American carriers. They're people 13 based out of Dallas and out of Laredo and with 14 experience and safety. 15 I assure you most of the carriers that 16 come -- that actually operate here, most of them 17 are -- there's no Mexican drivers really driving here. 18 Very few have the special visas that they can drive 19 here and there. But, you know, it's pointless. 20 Because as a Mexican driver coming here, you 21 can deliver in Detroit, but you cannot bring anything 22 back. So all of that profit goes out the door. So 23 they prefer to get it to the border, get an American 24 carrier with an American driver to go back and forth. 25 Because they will deliver in Detroit, and they will

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1 come back -- they will reload somewhere nearby and 2 then come back south. So they're making money. It's 3 just they're not making money if they just get more 4 Mexican drivers to do that. 5 So when people say NAFTA has ruined the 6 truck driver's jobs, I don't think that's true. 7 Because there's no way that a Mexican company can be 8 profitable by driving over to Detroit and coming back 9 empty. It will kill your profits. 10 So I think -- just to answer your question. 11 MR. SCHWEBEL: Okay. Thank you. 12 UNIDENTIFIED SPEAKER: What was your 13 question? 14 UNIDENTIFIED SPEAKER: So your question 15 basically is, what do we see as far as volume and 16 growth? 17 UNIDENTIFIED SPEAKER: What you see in 18 terms of transit and mix of freight and volume. 19 UNIDENTIFIED SPEAKER: Well, for us, 20 you know, our business is increasing into Mexico. We 21 have bought some additional plants. So, you know, the 22 volume itself is increasing. I think that there is 23 some impact, you know, the way we operated ten years 24 ago versus the way we operate it today. 25 Because of some of the Customs regulations

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1 that existed, you know, five or ten years ago in 2 Mexico, it made -- there was a lot of tariffs on 3 bringing in, let's say, product out of China or into 4 Asia directly into Mexico, very high tariffs. 5 So the way the whole system was set up was 6 that you brought everything into the United States, 7 you cleared it in the United States. And then it 8 shipped over as a domestic shipment out the U.S. into 9 Mexico. 10 That changed here in the last few years, so 11 there's more cargo that's flowing, let's say, directly 12 from Asia into the Port of Manzanillo that is then 13 taken up, you know, via rail or via truck in 14 containers directly to the plant. So there's some 15 volume that's being greatly impacted by that. 16 So whereas, ten years ago, five years ago, 17 we used to literally bring -- everything that we 18 brought in from Asia would come into the U.S. We 19 would collect it in Laredo and then ship it down. A 20 large amount of the ocean freight is especially going 21 directly into Mexico. 22 Also, one of the things that you're seeing 23 now is that -- especially out of Asia, the large 24 airlines are shipping cargo directly into Guadalajara, 25 directly into Mexico City on large freighters. That

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1 is relatively new to the market here in the last two 2 to three years, whereas, every -- the route was LAX, 3 DFW, IAH and then move it down. 4 Now, as an example, Cathay Pacific is flying 5 a flight every night from Hong Kong to Guadalajara. 6 And it's full. Okay? So that's one 747/800 that is 7 not coming in to Dallas and not coming in to LAX 8 that's going directly into Guadalajara. It's also 9 leaving full. Okay? 10 So there's product that -- before the system 11 was you bring into the United States, and then you 12 send it out. Now it's going back out. You have the 13 same thing. Korea Airlines has a cargo aircraft going 14 in two to three times a week into Guadalajara. 15 Panalpina does the same with their 747. 16 So the trade has changed a bit, in that 17 Mexico is very dependent on especially air freight and 18 some of the ocean freight to bring it in through the 19 U.S. And because of trade laws and the fact that they 20 have increased some of their capacity to be able to 21 handle air freight in these markets, you know, that 22 whole strategy is changing a bit. So that's one of 23 the things to think about. 24 UNIDENTIFIED SPEAKER: I think from our 25 perspective with due respect to look at the downturn

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1 economy that we had, we see an increase in freight in 2 not only the number of loads, but the variety of 3 things we're moving in and out. It can be, you know, 4 Caterpillar equipment or wind blades or Sheetrock, air 5 conditioners, a wide variety of products, a broader 6 perspective than we have ever seen before. 7 And we have also found that -- at one time 8 our imbalance was there was more out movement in. And 9 now that balance is more equalized, surprisingly, 10 particularly, the building materials areas. So it's a 11 very favorable market for us. 12 UNIDENTIFIED SPEAKER: And for us, you 13 know, if you just go back to the fact that we've been 14 building so many railcars recently and the production 15 goes way down. So for us freight is down, but some of 16 our business units are seeing an uptake this year, 17 especially in the construction areas. 18 So, yeah, just some shifting markets there. 19 But I think overall, and probably reflected in railcar 20 loadings, too, among the different classes, they're 21 all down, except for a few categories. So I think 22 those are pretty much the same kind of categories that 23 you will see, you know, ups and downs in the trucking 24 freight market as well. 25 MR. POLAND: Okay. Any final questions

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1 with that? 2 Yes, sir. 3 MR. SCHWEBEL: Just one quick question. 4 TPP, is that going to hurt y'all or help y'all or, you 5 know, what's -- do y'all have any thoughts on that, 6 the Transpacific? 7 UNIDENTIFIED SPEAKER: I have just a 8 real quick cute story, but -- I was in Malaysia a 9 couple of weeks ago at our plant. And I -- the plant 10 manager and the vice president of the division came 11 and said, hey, we want to talk to you. And it quickly 12 turned out that they wanted to talk to me because I 13 was the only American, you know, anywhere nearby. 14 And they have a customer that is desperately 15 wanting to know when TPP is going to pass. Okay? 16 Because obviously, Malaysia doesn't enjoy the same -- 17 you know, the same trade privileges as, you know, 18 Mexico and the Caribbean Basin and all that. 19 And so I basically gave them a, you know, 20 Session 101 of the fact that we have a presidential 21 election, so you can forget anything to do with TPP. 22 But they really look at it -- their standpoint was, we 23 would prefer -- they're going to end up putting the 24 product -- the manufacturing is going to go to Mexico. 25 Okay?

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1 But it was like, well, we would prefer to 2 put it in Malaysia because of the labor issues and 3 other things. But TPP is the only thing that would 4 allow it. Right now the numbers just are not there. 5 So, you know, beware if it ever does come 6 about, it will have some impact, especially in the 7 fact that it will impact, you know, Singapore and 8 Indonesia and Malaysia. And these countries are kind 9 of standing on the sidelines waiting to, you know, go 10 after some of that business. 11 MR. POLAND: With that, thank you, 12 gentlemen. Really appreciate all your time. And I 13 tapped several of you quite often for different 14 things, so thank you very much for being here today. 15 (Applause.) 16 SECRETARY CASCOS: Anybody have any 17 brief questions? Because we're going to break for 18 lunch. We're all hungry. 19 MS. MAYS: So the logistics for lunch 20 is, lunch is in the room next door. And you're going 21 to bring your lunch and come back and eat here because 22 we're going to have a lunch meeting. So pick your 23 lunch, come back. We have, you know, two 24 distinguished guests who are going to be with us 25 during the lunch hour.

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1 So appreciate it. Thank you again for your 2 patience this morning. But I think we're at a good 3 place right here. We should be back on track for the 4 rest of the afternoon. Thank you. 5 (Lunch Recess at 12:35 to 1:00.) 6 SECRETARY CASCOS: Let's move on. 7 We're 50 minutes ahead of schedule, which is great. 8 Let's go. 9 MS. MAYS: Where is Steve? We have a 10 speaker MIA. 11 SECRETARY CASCOS: We're about to get 12 behind again. 13 MS. MAYS: Paul might have to go if we 14 can't find Steve. 15 SECRETARY CASCOS: Why don't we do 16 this? Let's go on to the 2:00 one. 17 MS. MAYS: Yeah, BNSF. 18 SECRETARY CASCOS: Then we can come 19 back to Steve. He may be on a phone call or 20 something, so let's do that. 21 Paul Hirsh, you're on, man. And, Paul, 22 thank you very much for joining us today and 23 participating in this. We appreciate it. So you're 24 on. 25 MR. HIRSH: Thank you very much for the

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1 opportunity to be here. My name is Paul Hirsh. I'm 2 here for the BNSF Railway. I've been involved with 3 transportation in and out of Mexico for the last 15 4 years. 5 I'm only six months with BNSF, but I've been 6 involved in all of these from the different modes of 7 transportation and working with the rail, working with 8 trucks and sometimes dealing with barges. And I 9 really appreciate everybody being here. I think this 10 is a good effort to make sure we can improve that. 11 To summarize what I'm actually going to be 12 talking about -- but I tend to deal with a lot of 13 shipments in and out of Mexico now (unintelligible). 14 They were CEO's in companies and we asked 15 them, okay, what keeps you awake at night? And they 16 always said, well, we know technology, and we can -- 17 and, you know, they decided to go into Mexico because 18 they know the benefits of being close to the big 19 markets. They know that they can get enough engineers 20 and people in IT over there. 21 So the only thing that they were really 22 scared of is -- they would say, we're not sure how 23 we're going to be moving everything that we need to 24 move by year 2020 when they're going to go from -- to 25 five million cars a year. So as far as the

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1 transportation business, that's great. 2 But there's all of these challenges that has 3 to do with infrastructure, and it has to do with 4 processing systems that, you know, most of those 5 issues were discussed here today. So I'm not going to 6 bring anything new that you don't know on those 7 issues. But, you know, I'll probably give the 8 perspective now that we can give from the railroad. 9 So with that said, this is the outline that I 10 have. We're going to talk about who we are and the 11 major gateways that we interact with Mexico and then 12 some of the investments that we have down in what are 13 the areas of opportunities that we see. As we said 14 before, they've already been discussed in the room. 15 So BNSF, we are headquartered in Fort Worth. 16 We are one of the railroads on the western part of the 17 U.S. We're the largest by volume. You can see our 18 network there in orange. We have 32,500 miles of 19 track. We cover 28 states in the U.S., three in 20 Canada. And we work with the two railroads in Canada, 21 the other ones in the U.S., a lot of small, short 22 railroads. And we work also with the two Mexican 23 railroads, BNSF and FXE. 24 We are connected to Mexico directly with two 25 gateways. They are El Paso and Eagle Pass, and then

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1 we also have other connections that we can do, like 2 Brownsville and also in the northern part of -- 3 So going to out gateways, this is, you know, 4 El Paso. We connect directly there. We have rail 5 lines to the gateway in El Paso. We interchange there 6 with FXE, along with the Union Pacific that also 7 interchanges with FXE there. 8 We have restrictions as far as the amount of 9 hours that we can work at the gateway. And obviously, 10 it diminishes our ability to move freight across the 11 border. Those are things that we're working on. 12 There's some great separations on where we started and 13 where we're working trying to see if we can eventually 14 improve, you know, and have more hours of operations. 15 But, you know, being that moving freight on 16 the train has a lot of benefits for a lot of different 17 companies, depending on the commodities and where 18 they're going and having the ability with the growing 19 trade between Mexico and the U.S. To have, you know, 20 the facility to go through the borders, that's very 21 important. 22 On the right side, you can see the -- what we 23 are moving in and out. Where it says AG, 59 percent, 24 that is agricultural products. IP is industrial 25 products. That is the oil, that's the energy

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1 products, construction products. And then where it 2 says CP, that's what goes into a container. 3 And you're going to see on there where that 4 changes. And obviously, that has to do with, you 5 know, what others we serve from the different 6 gateways. 7 On the right side, you have several of the 8 origins and destinations. And obviously, we couldn't 9 put all the commodities in here. But they're the 10 assets we discussed earlier this morning that -- we 11 believe that it's very important to have a pretty good 12 understanding of everything that moves in and out of 13 Mexico by origin, by destination, by commodity so that 14 the State of Texas can decide what is the best way of 15 moving those freights through the States and in and 16 out of Mexico. And that impacts obviously in the 17 different gateways and the different investments that 18 need to be done. 19 You can see the volumes over there on the 20 bottom right. El Paso is a big gateway for us, so 21 there's a lot of freight that's moving there. There's 22 some of the limitations that we have to grow the 23 business over in El Paso and some of the challenges 24 that we have over here, the hours of operation, the 25 infrastructure on the border. As we know, we go

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1 through the middle of the city, and we go through the 2 middle of -- 3 The other issue that's important, and I know 4 was also discussed, is the problem that we have when 5 you have the same two countries, the same two 6 commodities and then different Ports Of Entry and you 7 have different regulations and you have different 8 requirements and you have different ways of moving 9 freight. That is very complicated for our customers, 10 and that makes it a bit harder for freight to move 11 across the border. And there's a lot of examples with 12 that that we can discuss. 13 Probably a simple one is, we get to the 14 border and there's all this information that we could 15 have provided ahead of time that we didn't provide. 16 And when there's more than one entity involved, that 17 information is not shared among everybody. 18 And then as we also discussed this morning, 19 there's multiple points of contact that need to 20 happen. And there's different people assigned to do 21 different inspections, and the same information needs 22 to be provided to different people. Some differences, 23 in Santos we're still using paper. 24 So when you have an entire train that is held 25 because someone needs a physical piece of paper,

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1 that's a problem. And I think that that's something 2 that -- you know, that needs to be solved and we'll 3 improve a lot of the efficiency of the border. 4 So the opportunities that we're going to talk 5 about again -- look at what can be done to improve 6 that. It was discussed -- the Santa Teresa with a new 7 border crossing point. And we're going to be talking 8 about that in a further slide. 9 And then the other gateway that we actually 10 see to Mexico is Eagle Pass. You see the change of 11 the pattern of the products that we move, so this is 12 where we cross most of our IP products into Mexico. 13 And you can see that it has the significant portion of 14 our pie going into Mexico versus agricultural 15 products. 16 The same way, you can see the origins and 17 destination. And this is the gateway that you see, 18 and over the years we are growing our volume over 19 there. 20 We operate on trackage rights over there. 21 That means that we are not the owners of the rail that 22 gets through the border. We operate over Union 23 Pacific with trackage rights. We interchange at -- I 24 think that's also with FXE. And then we have a much 25 better operation, as Frank alluded to this morning.

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1 But we have a very good relationship over 2 there with all the authorities at the border. It 3 works very efficiently, and we can work 24/7. So 4 that's where we cross in a more efficient way through 5 the border. 6 Challenges, obviously, you know, we share 7 that, as I said, with the UP. And so we need to make 8 sure that similar trains cross through the border so 9 it's not just one rail operation. Two different 10 railroads are going through another one, so there's a 11 lot of information and coordination that need to 12 happen. And, you know, we need to work with our 13 partners to make sure that that happens. 14 The other gateway that we use is Brownsville. 15 You can see that's where mostly we cross your IP 16 products and agriculture products. We don't have any 17 containers moving in that gateway. 18 On the right side, you will see origins and 19 destinations. And you can see the diminishing volume 20 that we cross through Brownsville. And that has to do 21 with market changes and the relationship we have with 22 different railroads that -- you know, in terms of what 23 are the most convenient gateways for us to move in and 24 out of Mexico. 25 It's -- we get over there from the U.S. with

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1 haulage agreements. The difference with trackage and 2 haulage for those who don't know is if we are using 3 our own locomotive or if we are using other railroad's 4 locomotive to move our cars. And that's what happens 5 on this access to Brownsville. So UP moves that for 6 us. 7 We have good exchange at the border, but 8 we're limited also for the hours of operations in the 9 different windows, north and southbound. Again, we 10 are required to work with other railroads to go 11 through the border. And obviously, the issues that 12 was discussed on the Mexican side of our security 13 going through that gateway and the fact that there is 14 some portions of the access to the border where we're 15 limited on the amount of weight that we have in our 16 cars going through the border. 17 This is some of the improvements that we're 18 doing. If you notice, another railyard is on our 19 other rail partners. But we are trying to put all of 20 the investments that are required to make sure that 21 our trains, you know, have a fluid movement in and out 22 of Mexico and that gives us, you know, the ability to 23 serve our customers better. 24 An example, at El Paso we're putting in a 25 facility to check containers when we're required or

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1 the cars when they're required by CBP or the border 2 authorities when we need to make an inspection. So 3 instead of having to take it outside to another place, 4 we can just do it directly in our facility. That also 5 reduces the time for the containers and the cars to 6 move, and also it releases the cars for the customers. 7 We just finished and we're about to start a 8 new yard in San Antonio that will help us on the 9 sorting of the cars that go in and out of Mexico so 10 that, again, we can have a better product to offer 11 and, you know, the railroad becomes a better solution 12 for moving in and out of Mexico. 13 On the line going into New Mexico, you can 14 see there are certain extensions, the CBP facilities. 15 So that, again, this is investments that we are doing 16 to make sure that the product that we offer in and out 17 of Mexico, it's improving. 18 As an example of this, we started late last 19 year to start moving containers -- refrigerated 20 containers in and out of Mexico. So it's something 21 that years back, no one will say, okay, I'm going to 22 be putting temperature-controlled equipment on a train 23 going in and out of Mexico because of all the delays 24 and all this stuff. So now we're doing that, so we're 25 moving temperature-controlled equipment. So we're

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1 moving frozen products from the interior of Mexico 2 into the U.S. 3 And we're now working on moving southbound. 4 And that, you know, lies a lot of work working with 5 the Mexican authorities not only for the inspections 6 at the border, but also trying to work with them to 7 allow us to do the inspections at the interior of 8 Mexico and not directly at the border so that if we 9 have some stuff there, we can go all the way through. 10 We came out with three opportunities where 11 we thought that could be something to recommend to the 12 company that I think we already discussed earlier 13 today. And this was one of the questions that came up 14 on the Santa Teresa. 15 That's the BNSF line going to El Paso. Here 16 you have Union Pacific, and there is the -- today 17 obviously, we're connecting through here. One 18 purposed option is moving here, which it would go 19 through Santa Teresa on to Mexico. We're more of the 20 idea that something could be done that's much simpler 21 for -- which is going through Clint or any other place 22 on the border. 23 And obviously, from the Texas point of view, 24 that will keep all the crossing on the Texas side. We 25 also think that there's a lot of investments

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1 associated and you see the difference on one side than 2 the other side. And then, you know, for BNSF and 3 understanding, you know, the cause of doing this is 4 like, you know, any other new line. 5 If it's built over here, that requires 6 eventually not only the cost of construction, but the 7 cost of maintenance. And we still need this one over 8 here, so for us it would double because of maintenance 9 on the lines in El Paso. 10 So, yes, there's a lot of issues for the 11 people in El Paso and parties that need to be probably 12 resolved on how and where to cross. But I think 13 there's other options to consider, especially looking 14 at it from the point of view of Texas and crossing in 15 a different place than Santa Teresa. 16 And then we already discussed, you know, at 17 length earlier today is the issue of, you know, where 18 is the freight coming to and from and in what type of 19 commodities. And then if Texas is going to be 20 investing money on infrastructure, where to do it, 21 where it makes more sense to do that and invest on 22 rail, invest on trucks, what are the most convenient 23 investments and where you're going to get the ROI 24 based on the different commodities and where they're 25 going, you know, if you're going close to the border

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1 or you're going to the interior of Mexico or you're 2 going west, you're going right, what type of 3 commodity, where the new plants are going to be. 4 And I think having a good study and all 5 that, which is the information that we try to use, 6 it's not ready available. I think that would be 7 adding a lot of value to that decision-making process. 8 And as we saw also, you know, when you have 9 two commodities, two countries -- I mean, the same 10 commodity, two countries and you have different 11 processes at different borders, it really makes it 12 very complicated to cross. As we heard before today, 13 you know, in one place you're required to do one thing 14 and the other one, you're required to do another. 15 Customers are looking for alternatives in 16 transportation, so it's very difficult when you are 17 asked for one paperwork when you're going through one 18 border and then you're asking for a different one when 19 you're going through another. And that's something 20 that -- on the U.S. side, something is on the Mexican 21 side. 22 I mean, Customs administrators on the 23 Mexican side have the ability to decide, and that has 24 created a lot of problems for the customers and for us 25 to offer, you know, alternatives when a customer can

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1 operate in one place and not in another. 2 So I think that it is -- based on the 3 freight that is moving today and what is coming in the 4 future, we think that there's a lot of opportunity to 5 work not only on the United States side, but also with 6 Mexican authorities to make sure that the border 7 crossings are something easy, seamless and probably 8 the Canadian entity for -- will be something that 9 probably makes sense to include with that. 10 So do you have any questions? That's all I 11 have. 12 MR. SCHWEBEL: This is Gerry Schwebel. 13 We tend to measure trade in our part of the world by 14 trucks and by railcars. What about containers or all 15 these trades -- how do you -- do you track those? How 16 do you track those numbers, or do you show those 17 numbers as well, containers that are, like, double 18 stacking? 19 MR. HIRSH: Yeah. We look at all of 20 that. We count the units that goes with -- 21 MR. SCHWEBEL: But how do you report 22 those units? Because, you know, we track it by 23 railcars. And we say we have an increase in railcars, 24 we have an increase in trucks. But we don't tend to 25 track the containers or the double stack of

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1 containers. 2 MR. HIRSH: You bring a good point with 3 containers and double stack. For those that don't 4 know double stack, it's when you have those trains 5 that you have two containers, one on top of the other. 6 So when -- even between the railroads and 7 when we're talking about units, you can compare a 8 boxcar to a platform that takes containers. And 9 sometimes, you know, that's what we do. When you're 10 talking about units, you're talking about each 11 individual container. 12 So in a flat car that moves two containers, 13 we consider that two. But sometimes when you -- you 14 know, other railroads, sometimes you may get that, you 15 know, talking about units. And they're talking about 16 the number of cars. So it is an issue sometimes, 17 yes. 18 MR. SCHWEBEL: And is the trend to 19 keep -- are they really 20-footers, or are they -- 20 MR. HIRSH: No. Everything -- most of 21 what goes on trains today, you know, in the freight 22 across the border is 53 for containers. 23 MR. SCHWEBEL: Oh, really? 24 MR. HIRSH: That's what it is, yeah. 25 MR. SCHWEBEL: What makes it -- the size

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1 of the trailer? 2 MR. HIRSH: Exactly the same as the size 3 of the trailer. Now, there is some 20s and 40s that 4 eventually cross the border. But most of the freight 5 today that goes to Mexico is on 53s. 6 MS. MAYS: I have a question. You 7 probably covered this. But from a rail perspective, 8 what would you say are kind of your two key issues and 9 challenges of the border? I know I know some of them. 10 You know, like, railroad crossings being one of them. 11 But what are kind of your three major issues 12 impacting, you know, doing cross-border movement but 13 also going outside of the border once you get past the 14 crossings? 15 MR. HIRSH: Yeah. At the crossing 16 points, you have infrastructure, and you have 17 paperwork. I would say those are the two major issues 18 affecting. And then on the interior of Mexico, 19 probably the most important issue that we have right 20 now is security. 21 Unfortunately, in several parts of Mexico, 22 you know, the train is much more secure than the 23 truck. I mean, you can stop a train, but how do you 24 take everything out of the train? Right? So you can 25 stop a truck, and then you just change your driver.

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1 And you drive it to your home. 2 So railroad is much more secure than a 3 truck. The problem is that we're having more people 4 that jump on these trains and have the ability to 5 break a seal and eventually, you know, break things 6 and take a little -- you know, even if it's a few 7 cases of whatever commodity we're moving. And 8 obviously, that creates a lot of issues. 9 And for certain customers that's a problem. 10 Of course, if you're moving, you know, food products, 11 obviously, you know, you're compromising the product. 12 And then, you know, we're having some issues, 13 especially like in French vehicles where, you know, 14 they steal the keys or they steal the batteries or 15 they steal the tires. And that creates not only 16 problems because -- you know, that's a problem. It's 17 not going to be where it's supposed to be and in the 18 right conditions. 19 But, you know, loading and unloading and, 20 you know, issues with border authorities. So security 21 is one issue that today really, it's causing problems 22 for the rail industry. 23 MS. MAYS: How about on the U.S. side? 24 You said on the Mexican side is primarily security. 25 How about the U.S. side?

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1 MR. HIRSH: No. We don't have any 2 security issues in Mexico. 3 MS. MAYS: No, not security. But what 4 kind of issues you have on the U.S. side? 5 MR. HIRSH: For the Mexico freight that 6 we move is that we are dependent on working with our 7 partners. And obviously, you know, different 8 gateways, we can access ourselves or, you know, we 9 need to go through other rail carriers. And I will 10 say, you know, we could have, you know, better 11 agreements over there probably that will help us have 12 a better solution for customers shipping in and out of 13 Mexico. 14 MS. MAYS: No infrastructure issues on 15 the U.S. side? 16 UNIDENTIFIED SPEAKER: Are you talking 17 about the border, you mean? 18 MS. MAYS: Yeah. Once you get -- let's 19 say, you know, you guys cross at Eagle Pass. Once you 20 get to Eagle Pass, the actual border crossing itself 21 and you're moving north, you know, you don't have no 22 issues there? 23 UNIDENTIFIED SPEAKER: We add capacity 24 to our network as demanded by the volumes that we 25 move. And so we would say -- we would answer that

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1 question as, no. But the point that we made about 2 leveling the systems' capacity at the border is 3 probably the most important point. 4 MS. MAYS: Okay. 5 UNIDENTIFIED SPEAKER: But you can have 6 capacity on the rails for five trains a day. But if 7 you only have capacity to process trains at one train 8 per day, especially when windows are limited, then the 9 extra rail capacity doesn't do you any good. 10 So that's why we're so focused on 11 understanding and leveling between those differences. 12 MR. JAIME: You know, Caroline, if I 13 may -- and I'll support what Paul is saying. From an 14 industry standpoint, I think what you'll find from the 15 rail. 16 SECRETARY CASCOS: State your name. 17 MR. JAIME: Oh, I'm sorry. Ivan Jaime 18 with Union Pacific. I think what you'll find from the 19 rail companies is just a very, very heavy investment. 20 I know BNSF has invested heavily, as have we. 21 But what really restricts us is -- as Paul 22 was mentioning, is the Customs component, the 23 manifestation. And I was talking to my colleague here 24 next to me, and I think we share something in common 25 with the private vehicle or bridge owners; that when

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1 you're a private entity, perhaps, the attention that's 2 given to you by Customs is a little different, as 3 opposed to maybe the public entities. 4 Number one and the number two is just for, 5 example, in Eagle Pass, as the Mayor knows, we're not 6 really restricted in how much track we can build. 7 We're more restricted in to where you can place your 8 trains because there's crossings, there's, you know, 9 different areas. 10 So that's where I think really -- that's why 11 you hear the rail companies so consistently harping on 12 grade separations and on ensuring that the public can 13 stay off of the railroad right away so that we can 14 keep adding track and keeping that going. 15 MS. MAYS: That's exactly what I was 16 trying to get at. You know, if you have those choke 17 points, you know, those conflict points where you 18 have -- with a lot of -- at railroad crossings because 19 that seems to be, kind of like I said, a consistent 20 issue in the border region. 21 And I am sure that impacts, you know, the 22 rail fluidity, the efficiency to how you guys can move 23 in and out of the border regions. So that's kind of 24 where I was getting at, not necessarily capacity 25 aspect from the railroad point of view, but where you

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1 intersect with highway, with roadways within, you 2 know, the border communities. And I just want that to 3 come out, and I'm glad you brought it up. 4 UNIDENTIFIED SPEAKER: Cameron County 5 is a perfect example, if I may very quickly -- we had 6 eight miles of track where the BNSF also -- we hauled 7 our trains. And we could not utilize it because if 8 you staged trains there, you would be blocking half of 9 the town. So you're losing capacity. 10 Whereas, now with the new west rail bridge, 11 you have one crossing and you have six miles of track. 12 You have six miles worth of trains that you can put in 13 there without impacting. 14 And so you're automatically creating 15 capacity. If we could close -- or if we could have 16 nothing but overpasses in Laredo -- we've talked to 17 the Mayor -- we could have a 10,000-foot slot where we 18 could fit in six trains. And the same thing with 19 Eagle Pass. 20 So a lot of this is with the right grade 21 separations, you could create incredible, incredible 22 capacity for trains at least. 23 MR. JAIME: And then there's another 24 issue that's important to notice that we're saying. 25 Sometimes the fact that Customs acts in different ways

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1 at different borders. You know, for example, we get a 2 higher percent of inspections crossing with Eagle Pass 3 than other border crossing points. 4 What that does is that then you need to stop 5 that train. So now the need to have sightings and 6 places to stop that train increases now because, you 7 know, you need new infrastructure just because 8 authorities have decided to make higher inspections 9 over there. 10 By the way, we just, you know -- and we're 11 not going to tell CBP how they need to conduct their 12 business. But, you know, why is it different in 13 different border crossing points, especially when -- 14 you know, of 100 percent of everything that was 15 inspected on BNSF shippers this year, there was 16 several incidents in everything they inspected. All 17 right. 18 So sometimes those are things that are not 19 infrastructure on the rail. But depending on the 20 decisions that are made by the authorities at 21 different, you know, Ports of Entry, it affects our 22 infrastructure. 23 MR. HERNANDEZ: I would like to add one 24 other thing. Frank Hernandez with BNSF. I talked 25 earlier about how Eagle Pass, to me, is kind of a

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1 model, if we could have that kind of cooperation with 2 all the authorities. 3 But I will give you a prime example to your 4 question a moment ago on what we have on the U.S. 5 side. When we arrive with trains, for example, at El 6 Paso, then it can take hours before Mexico finally 7 gives us the clearance, even though we sent the 8 paperwork a day in advance. We have addressed those 9 issues at Eagle Pass, and they adjusted it 10 immediately. 11 CBP, I saw in one of the presentations where 12 they talked about delays because of locomotive 13 inspections. We addressed that with CBP at all the 14 gateways, and the only gateway that immediately 15 changed was Eagle Pass. 16 So even with additional infrastructure, if 17 everything stops because of the regulatory agencies, 18 it's kind of an inefficient use of your 19 infrastructure. At Eagle Pass -- and I know Yvonne 20 can speak to this -- that gateway continues to improve 21 on a daily basis. But a lot of it has to do with the 22 city and with the regulatory agencies at that 23 location. 24 MS. MAYS: Any other cities want to 25 comment? Mayor, I know you're looking at me.

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1 MR. SAENZ: No. As a matter of fact, I 2 need to call you-all to go visit us and see how best 3 we can, you know, make our rail port more efficient 4 and Frank, in particular. 5 SECRETARY CASCOS: Anything else? Are 6 we good? 7 Yes, sir. State your name. 8 MR. ANDRETE: Rafael Andrete with the 9 Texas A&M Transportation Institute. I wanted to ask 10 the railways if they would be willing to share 11 their -- all the destination data so it can be 12 incorporated with other data that we may find for 13 the -- 14 UNIDENTIFIED SPEAKER: I don't know how 15 much of that that we already have as public 16 information and everything. 17 UNIDENTIFIED SPEAKER: That's probably 18 something we can talk about offline. 19 SECRETARY CASCOS: Can you have that 20 ready for the next meeting, and just let him know? 21 UNIDENTIFIED SPEAKER: Mr. Secretary, 22 we will talk about that offline. 23 SECRETARY CASCOS: Well, think hard. 24 Rose, tell him that our meeting is -- tell him our 25 meeting is in Midland, but we will meet in El Paso.

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1 Okay? 2 Thank you very much. Anything else? All 3 right. We're good. Thank you. 4 (Applause.) 5 All right. Who's next? Oh, yeah, Steve. 6 You're next, man. And you're the last one. I saved 7 the best for the last. 8 MR. BOECKING: Thank you very much, 9 Secretary Cascos and to the committee. 10 SECRETARY CASCOS: Good to see you 11 again, Steve. 12 MR. BOECKING: It's a pleasure and an 13 honor to talk to you-all today. It seems like 14 everything we have been talking about today -- and I'm 15 sure in your past meetings -- has been focused on 16 border issues on either side of the border, which is 17 kind of what the title of the committee is. 18 What I would like to do this afternoon is to 19 put a little perspective on the border issues and how 20 they affect the global supply chain and the rest of 21 the supply chain. In the -- these are the major 22 populations in the United States that are pretty much 23 today and are forecasted for the next 20 or 30 years. 24 And here are the major inland ports that are being 25 developed -- or are developed in the United States.

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1 No real big surprises here. But each of 2 every one of these ports is either shipping product 3 across the Mexican border or receiving product from 4 the Mexican border. So what you-all figure out here 5 in this community, in this committee really affects 6 the entire supply chain of the United States. 7 The Texas/Mexico border is a huge piece of 8 the global supply chain. These are the -- but there's 9 other pieces of it that are integrated. It's not just 10 the Mexico border. It's not just ocean freight. It's 11 not just air freight. The whole thing has to work for 12 us as a system, and I will show you a little bit more 13 about that today. 14 Once that product from the seaports hits the 15 seaports, then it needs to get into the interior of 16 the United States where -- most of the consumption is 17 happening west of the Rocky Mountains. Probably 70 18 percent of that consumption is happening west of the 19 Rocky Mountains. 20 And the customers that are importing and 21 exporting need multi-modal transportation. In Texas, 22 for example, coming up to Dallas/Fort Worth where we 23 are today, we have got the major highway 24 transportation. And from Dallas/Fort Worth to Laredo, 25 for example, is about 450 miles, 500 miles, which is a

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1 good solid truck day, which can take seven-and-a-half 2 hours. 3 Now, if you're smart enough to take the new 4 state highway 130, Sherry, you can cut about an hour, 5 45 minutes or an hour off of the trip. 6 So I'm going to talk about how Alliance 7 Texas fits into this global supply chain with the 8 Mexico border, but entirely all modes of 9 transportation. We're located -- today we're here in 10 the center of Dallas. Alliance Texas is located on 11 the northwest corner of the Dallas/Fort Worth 12 Metroplex, which is about 6.5 million people. 13 And drilling in, Alliance Texas is about 14 18,000 acres, and one of the keys is the multi-modal 15 transportation that I'm talking about. On the west we 16 have the BNSF intermodal rail hub. This is the fourth 17 largest hub in their system, which provides 18 connectivity from LA/Long Beach to Alliance and then 19 to the east coast ports and then also northbound and 20 southbound, , Kansas City, Alliance, Houston, 21 and El Paso. 22 In the middle of Alliance is Alliance 23 Airport, which is a cargo-only airport. We don't do 24 commercial passengers. No American Airlines or Delta 25 or anything like that. It's strictly cargo and

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1 general aviation. So it's an international airport. 2 We have Customs on-site. So it handles any airplane 3 made today. 4 Coming down the middle is I-35. NAFTA 5 Highway obviously goes right to Laredo and then up 6 into the -- anywhere in the United States. And on the 7 eastern boundary of Alliance, we have the Union 8 Pacific rail line, which provides direct rail service 9 to our customers. So you have got railcar service, 10 and you have intermodal rail service. 11 The BNSF Intermodal facility is a huge 12 driver business primarily from Asia, LA, Long Beach or 13 Oakland into Alliance. And then Fort Worth Alliance 14 Airport gives us air cargo to and from Asia. FedEx 15 has a huge sorting hub here, which gives us 16 connectivity throughout the United States. And 17 they're flying daily flights to Asia, servicing ten 18 cities in Asia out of here. 19 This airport will handle any airplane made 20 today, fully loaded 747s. And with Customs on-site, 21 what I would really like to see is some of that 22 Guadalajara and Mexico air freight coming through 23 here, as in the Sanmina example that we heard. 24 Some of the basic numbers about Alliance, in 25 the 18,000 acres, we have -- over $8.4 billion has

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1 been invested there. In 2014 we celebrated 2 our-billionth tax dollar generated. The taxes are 3 very low, but our taxing entities -- it's a 4 public/private partnership between the FAA, the City 5 and federal and private. 6 So we have developed over 40 million square 7 feet. And 25 years ago, it was all farmland. Now 8 there's 45,000, 44,000 people that work there every 9 day. And it's only about 50 percent developed. You 10 put all of that together, and we call it the Alliance 11 Global Logistics Hub. 12 And I'm going to show you some of this and 13 talk about how it connects with Mexico. On the 14 eastern part of Alliance is what we call the gateway. 15 And these are some of the companies that are located 16 in the gateway, many logos that you recognize. I 17 think we have about 60, 65 global 500 -- Fortune 500 18 companies here. And these are the ones that I am sure 19 are doing business with -- crossing the border with 20 Mexico. 21 All of the Lego Toys are manufactured in 22 Monterey. Who else is here? Wal-Mart, Grainger, 23 Cardinal Health, Callaway Golf -- any golfers in the 24 crowd -- the Callaway Golf Clubs. They make their 25 golf clubs and golf clubs in Mexico. And a lot of

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1 auto parts distribution here. 2 All of this is dependent on that 3 cross-border trade and the efficiencies of that. 4 Coming to the airport, Alliance Center, we have got 5 the FedEx hub and -- I missed my next companies there, 6 but I'll proceed. 7 The West -- Alliance Westport is the western 8 section. These are the companies that used more 9 intermodal next to the -- this is the BNSF Intermodal 10 Rail Hub and the Alliance Airport. And a lot more 11 logos that you will recognize, but a lot of companies 12 that are doing business with Mexico. But they're also 13 doing business in Asia and Europe and Canada. So it's 14 not just a Single Window. We need to be thinking 15 about the global supply chain. 16 Our -- one of our newest developments is 17 Alliance Center North that we just opened up a couple 18 of years ago. We built two million-square-feet 19 facilities. This is a million square feet for LG, and 20 this is another million square feet for Wal-Mart.com. 21 They have another 800,000 square feet on the other 22 side of the park. 23 But I think LG is one of the great 24 examples. They're bringing -- all of the LG 25 televisions in the United States are coming from

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1 Mexico, across the border and through this facility. 2 Also, they're doing white goods, refrigerators, 3 washers, dryers, those types of things coming up from 4 Mexico. 5 But they're bringing -- from Asia they're 6 bringing in the home consumer electronics, like DVRs 7 or whatever they have there. And then they're doing 8 some of that by ocean and some of that by air cargo. 9 So they're using all modes of transportation, all 10 directions. And it's really a good example of the 11 system that I'm talking about and how the Texas/Mexico 12 border fits into that system. 13 We're expanding -- we continue to expand, 14 and we've purchased another about 300, 250 acres up 15 here next to the Texas Motor Speedway. This is the 16 Wal-Mart and LG building. This continues on to the 17 north here. Alliance Airport is here, so -- and we 18 will be developing that. 19 I think I already said Alliance is only 20 about 50 percent developed, so there's a lot left to 21 do. So we need to clean up these border crossings 22 because we need to get the product in and out of 23 Mexico. 24 And I get the question quite a bit -- 80 25 percent of the AT&T cell phones are processed through

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1 Alliance -- are you a cell phone part? No. Are you 2 an automotive part? No. This is a global supply 3 chain part. It doesn't matter what is inside the box. 4 Like, you know, all the product that's crossing in 5 Eagle Pass or in Laredo, does it really matter to 6 y'all what is inside the box? No. 7 It's the cargo going through and its 8 efficiencies for the supply chain that people are 9 looking for. And it all works -- to make the whole 10 transportation system work, you have to have the soft 11 amenities like the foreign trade zone. 12 Alliance is one of the top foreign trade 13 zones in the United States. And you don't think you 14 would find that in little old Fort Worth, Texas. But 15 we process -- let's see -- for about three of the last 16 five years, we have processed more foreign trade zone 17 product than any other FTZ in the country. 18 And then you have to file in the workforce. 19 Like I said, we have 44,000 people that work at 20 Alliance. So our new prospects that want to do their 21 supply chain there and they say, well, yeah, this is 22 all really cool, but you have already hired the best 23 44,000 people. What's left for me? 24 So that's very important in the 25 transportation industry, the warehousing industry, the

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1 manufacturing industry. Those are keys. So we work 2 very hard on workforce development, and we work very 3 closely with all of our educational partners, like UNT 4 and TCU and Tarrant County College and North Central 5 Texas College and the Dallas County Community College 6 and the high schools. 7 Earlier this week I had four high schools in 8 talking about workforce development and certification. 9 So those things are very critical to this whole supply 10 chain system. 11 And then a sense of community, it can't just 12 be a place to where you go work and go home. So we do 13 a lot of things to get everybody together and have fun 14 and do some of the social things: a great air show 15 and races and water parks and those types of things. 16 And to do that, Hillwood has several 17 different companies, landscape company, construction 18 company, property management company, companies that 19 run the airport and all different types of companies 20 that run and manage this project. 21 And that's our system. I tried to talk as 22 fast as Tiffany. How did I do? I'm glad there's no 23 Customs people here. I'm the one person that's glad 24 there's no Customs people here. They don't like this 25 picture.

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1 I will open it up to any questions. 2 SECRETARY CASCOS: Any questions for 3 Steve? Hearing none and sensing none. Thank you, 4 Steve. We're good. Thank you. 5 MR. BOECKING: Let's go home. 6 (Applause.) 7 SECRETARY CASCOS: All right. Open 8 discussion. Anybody want to comment on anything that 9 you've heard today, unless you want to save it for 10 El Paso. 11 Yes, sir. 12 UNIDENTIFIED SPEAKER: Well, I do have 13 an observation. If you looked at every photograph 14 that was put up on this wall here today -- we saw the 15 bridges specifically -- there is always a line of 16 trucks or trailers or people waiting to go from one 17 end to the other. 18 I think one of the things that we need to 19 look at as we continue with the objectives here as a 20 group is to try to understand or define what is 21 acceptable. Like, going to the airport on the TSA 22 line, we have heard and seen on the news recently that 23 there's thousands of people waiting to get a ticket. 24 Is that acceptable? Nobody seems to think it is. 25 And we here in the international trade

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1 business have grown -- have been densensitized by 2 lines. I mean, ever since I can remember, there's 3 always been a line waiting to go somewhere. So we've 4 got to maybe define that. What is acceptable? What 5 isn't acceptable? 6 SECRETARY CASCOS: I can tell you, go 7 to Franklin's BBQ, and there is a line just to get BBQ 8 at 8:00 in the morning. His BBQ can't be that good to 9 stand in line for three hours to get a chunk of beef. 10 It's crazy. I don't know. That's a good point. 11 We want to show you something real quick 12 that I think -- I showed it to -- I gave it to some 13 Canadian folks that I met with. I think it's a 14 visual. Some of y'all have probably already seen 15 this. 16 MS. MAYS: Yeah. 17 SECRETARY CASCOS: Explain that, what 18 that is. 19 MS. MAYS: Yeah. You guys have seen 20 this from the last meeting, but some of you were not 21 here. So essentially, this is tracking about 2,000 22 trucks for over three of the POE regions, El Paso, 23 Brownsville and Laredo. And this is not POE-specific. 24 And these are U.S. trucks. 25 If you remember, the gentlemen that were on

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1 the panel indicated that the dray just moves from 2 Mexico to the border. And then the United States 3 trucks take it from the border and take it wherever it 4 goes. So this is what that movement is when the 5 18-wheeler, a U.S. carrier picks it up from the border 6 and now takes it to whatever destination it goes. 7 So -- 8 And if you follow that for seven days, you 9 will see -- 10 SECRETARY CASCOS: Can we zoom in a 11 little bit? Is that just one map or -- 12 MS. MAYS: Yeah. That's just one map, 13 yeah. So you see that's Day 1. This is Brownsville. 14 So that's Day 2. 15 SECRETARY CASCOS: That's just from the 16 Brownsville Port Of Entry. Okay? 17 MS. MAYS: And then, you know, it keeps 18 going Day 3. So you see, I'm almost close to Canada 19 and all the way to the west coast. By Day 7 we are 20 in -- Day 7 we are literally everywhere in the United 21 States, including the west coast. 22 So you look at this. Look at your sphere of 23 influence if you're in the Valley. If you're in on 24 the Valley border Port Of Entry, that is your sphere 25 of influence. Your influence is not the Valley. And

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1 that's the point we're trying to get here. Your 2 influence is beyond the Valley. 3 SECRETARY CASCOS: Beyond the State. 4 MS. MAYS: Yeah, beyond the State of 5 Texas, you know. And that's the message that you-all, 6 as part of this group, need to really wrap your head 7 around it. You, the border regions, are just the 8 cross-through over a lot of the trade activities we're 9 talking about, the economic -- you know, the North 10 American concept that Matt talked about earlier. All 11 of this, you guys are influencing that and really need 12 to think about that. 13 So then the next one we go to, this is 14 Laredo. Again, you see Laredo. A lot is more east 15 coast, but also you see a lot of west coast 16 connectivity here. 17 So Day 1, you know, this is how far a truck 18 goes. Steve just mentioned that, you know, you're 19 about, what, an hour -- a day's, you know, truck 20 drive. But it's actually farther. A truck can go 21 farther than Dallas. And that could be, you know, the 22 team drivers doing more than that. Yeah, team 23 driving, they can do more than, you know, 11 hours a 24 day. So that's Day 1 from Laredo. 25 Day 2, you can see again, we're almost to

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1 the west coast. Canada, Day 5. Almost the entire 2 U.S. and Canada, Day 7. So, again, Laredo is much 3 more spread out compared to what you saw with 4 Brownsville. So it's a little bit different between 5 the three Port Of Entries, kind of where the 6 concentrations are. Laredo, a lot of east and, you 7 know -- spread a lot more than, let's say, 8 Brownsville. 9 SECRETARY CASCOS: I mean, they're all 10 the way up to Canada. 11 MS. MAYS: All the way up to Canada, 12 west coast, you know. So again, you know, the point 13 the Secretary wants to make here is you guys think 14 about this. When you're thinking about your Point Of 15 Entry, this is where your customers are located all 16 over U.S. and Canada. 17 MR. SAENZ: I also want to make a 18 comment. If you go back to the last slide, from 19 Laredo we also are going still farther south. 20 Correct? 21 MS. MAYS: Yes. Because you're 22 connecting with other Point Of Entries, believe it or 23 not. Remember, one of the gentlemen said they take 24 and then they move and go the other way because that 25 truck is taking stuff probably to the other port. If

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1 it's less than a truckload, it has to go to a place 2 whereby it's being put in another truck, consolidating 3 so they can take it to the final destination. So you 4 have port-to-port movements in here as well. 5 So, again, you also see a lot of -- one of 6 the gentlemen talked about that they bring stuff from 7 the west coast, and they truck it in. So you see a 8 lot of that red line going to the west coast, going 9 past El Paso into the west coast. 10 So, again, a lot of things are moving 11 between the different -- because if stuff is coming 12 from, let's say, the Port of Massillon, or one of 13 those Mexican ports and is coming through Laredo, 14 guess what? It might be going to another port to be, 15 you know, transloaded to another ship to go somewhere 16 else. So, you know, there's a lot of things that's 17 going on here. 18 MR. SAENZ: Yeah. But, say, from Laredo 19 back to Brownsville, it would appear that maybe that 20 you go through Brownsville and then farther north? 21 MS. MAYS: Well, but it also depends on 22 the commodity. 23 MR. SAENZ: There's the 24 interaction. 25 MS. MAYS: Yeah. It depends on the

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1 commodity. A lot of commodities are crossing through 2 Laredo, but then they have to go back down to the 3 Valley to be -- the carrier -- the United States 4 carrier might be, you know, on this side where they 5 consolidate. 6 So if it's, let's say, an ag' product, maybe 7 their major warehouse is in the Valley. So they're 8 going to move that to the Valley and then put it in a 9 full truckload so they can move it up north. 10 MR. HIRSH: And if you think about it, 11 on the Mexican side, the strategic decision of Texas 12 is that there's a triangle that goes from, you know, 13 the Monterey/Laredo border to Mexico City to 14 Guadalajara where you have about 70 or 80 percent of 15 all the production and consumption in Mexico. 16 So then finally it goes through the border 17 in Texas and then back into Mexico. There's products 18 that are produced or consumed on the western part of 19 the States and goes through the borders in Texas and 20 back west. 21 MS. MAYS: Okay. 22 MR. HIRSH: How do you maintain that 23 freight there in the future? That's something that, 24 you know, from Texas' point of view, you need to think 25 about. So if you make -- and that's what is happening

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1 today, that the borders are more efficient crossing 2 and border transportation going through Texas. And 3 that freight is still going to be there. If some 4 other state makes it easier to go the other way, 5 that's where the freight is going to be. 6 SECRETARY CASCOS: Right. 7 MS. MAYS: Oh, yeah. And no question 8 about it, you know. You're going to see that. We've 9 seen that with Mexicans making the improved -- 10 building the Super Highway. And that's changed the 11 produce where it crosses at. You know, it used to 12 cross in -- now we're seeing a lot of that come into 13 Texas. 14 Because any investments you make in the 15 infrastructure, whether it's highway primarily, you 16 know, or rail is going to change, you know, how 17 freight moves. So we're going to see that. And, you 18 know, let's not be mistaken. Other states are looking 19 at ways to improve their border crossings so that they 20 could -- you know, when I go to other states, they 21 want to compete with Texas. 22 So, you know, they're going -- they're 23 looking at ways to make their border crossings more 24 efficient, improve their infrastructure so they can 25 get some of the trade that we have crossing through

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1 Texas. 2 But Laredo -- like you said, geography is in 3 favor of Laredo. And then some of the things Laredo 4 has done in terms of, you know, really holistically 5 look at how you move trade. The process is in place, 6 and other things make it much more conducive to move 7 and to cross through Laredo. So, again, you know, 8 some of it is that. But some of it is just, you know, 9 the way it's been done. 10 So then now we go to our friends in El Paso. 11 Look at El Paso. A lot going on in El Paso with the 12 west coast but also, you know, the center part of the 13 U.S. You talked about the Asia trade. A lot of that 14 is Asia trade, you know, from there going to the DFW 15 region. 16 But then you have a lot of connection with 17 San Antonio, so that tells you a lot of things right 18 there. So a lot of that coming in and going to the 19 west coast for Asia markets, as mentioned earlier. So 20 they -- 21 For Day 2 -- 22 MR. SAENZ: Let me ask you this, if I 23 may. Pete Saenz again. Were those studies done at 24 the same time period, more or less, or over -- 25 MS. MAYS: Yes. They took 2,000 trucks

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1 each. In Laredo in the same time period -- yeah, 2 2,000 in the Laredo region, 2,000 here, 2,000 in the 3 Valley. 4 Yes. 5 UNIDENTIFIED SPEAKER: Another reason 6 for the efficiency is not just competing with other 7 States. It's because the efficiency generates more 8 investment in Mexico coming back through Texas. Even 9 on the produce side, you have produce operators from 10 the State of Texas that have gone from seasonal work 11 to year-round work basically by putting additional 12 farms in Mexico and then shipping that up by truck 13 because they can hit the east coast within a day. 14 MS. MAYS: Yeah, absolutely. You know, 15 I wish I had invited him. There's a gentleman that 16 owns a couple of grocery stores here in the Dallas 17 region called Hong Kong Market. I met him last year. 18 And what he told me is that there are fruits that they 19 used to import from other parts of the world, and it 20 used to cost about 16 or $20. 21 They can now plant those same foods in 22 Mexico, and the price has dropped to, like, 2 to $3. 23 Because they can plant it in Mexico. They will cut 24 the cost of transportation. The labor cost in Mexico 25 is fairly cheap. So, yes -- so you see that. You

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1 hear somebody like that telling you their story about 2 Mexico and how it's changed the game. It's huge. 3 So El Paso, Day 5 and Day 7. So again, this 4 is just kind of giving you guys the story and, you 5 know, what we've talked about all day today without 6 telling the story and then really seeing what the 7 border means to the entire North America and not just 8 the Texas border/Mexico border region. 9 Secretary, that's it. 10 SECRETARY CASCOS: Okay. Just a few 11 closing comments. One thing before I forget, when we 12 go to El Paso, it's a little bit -- you know, it's 13 hot. It's the only place that I know that they water 14 their dirt. But anyway, I love El Paso. 15 It's casual. Okay? I want you to know that 16 it's casual. You can come as casual as Sam or if you 17 want to wear a sports coat -- you don't have to wear a 18 coat. I'm not very dressy all the time -- never 19 really. But anyway, so keep that in mind, that it's a 20 very casual -- I want you to be comfortable. 21 For the ladies -- well, y'all look nice all 22 the time -- wear whatever you want, you know. At 23 least for the guys, you don't have to wear a tie. If 24 you want to, if you want to impress people, that's 25 fine. If you don't that's fine as well.

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1 I think the reason I wanted Caroline to 2 bring that up is because we take a lot for granted in 3 this state. We really do. And when we're here by -- 4 you know, when I travel, I mean, I talk about Texas 5 and, you know, the pride that we have. And there are 6 a lot of states that are trying to emulate what we do. 7 Either it's in infrastructure. Either it's in job 8 creation. Either it's entrepreneurship. There's a 9 lot of states that are trying to emulate what Texas 10 has done. 11 And I know that y'all have heard about the 12 Texas Miracle and how everything happened because of 13 the Texas Miracle. It was no miracle. It was a 14 deliberate action. It was something that was 15 deliberately done, either through investment or 16 entrepreneurship. 17 So, you know, miracles come from above. And 18 trust me, I don't know of anybody in Texas that has 19 that direct connection with above yet. But I'm 20 telling you, it was a deliberate action by the 21 legislation, by the leadership of this state that has 22 made Texas what it is. 23 So keep in mind as we go out and you help me 24 promote the state and people ask you the impact of the 25 border, you have a visual now of the three Ports Of

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1 Entry from beginning to the middle to the end as to 2 what these trucks -- where they go. That's a great 3 selling point. 4 I know everyone says, you know what, what if 5 we do this in CBP and DPS? You know, those are fine. 6 Those are things that we have to address to make our 7 system better. But I still believe that we have the 8 best system in the nation to do this, and we just want 9 to make it even that much better. So hopefully with 10 that, we're going to continue with that dialogue. 11 But anyway, I want to thank y'all very much. 12 I think we got done a little bit early, so if anyone 13 wants to catch an earlier flight. I don't know if I 14 can make an earlier flight or not. Probably not. But 15 if not, then we shall see you September the 6th or 16 7th. The 7th is the meeting. Right? 17 MS. MAYS: September 7th. 18 SECRETARY CASCOS: So go up the day 19 before. We will try to coordinate something with some 20 El Paso folks. But thank you again for participating. 21 It's great to see you-all again. Again, feel free to 22 communicate any commentary that you forgot to say over 23 to Caroline so we can incorporate it at the next 24 meeting. All right? Thank you very much. This 25 meeting is adjourned.

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1 (End of proceedings at 2:30 p.m.) 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

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1 STATE OF TEXAS * 2 COUNTY OF DENTON * 3 4 I, Kendra L. Rowland-Finch, a Certified Shorthand 5 Reporter in and for the State of Texas, certify that 6 the foregoing Record of Proceedings was reported 7 stenographically by me at the time and place 8 indicated, and that the Record of Proceedings is a 9 true record of the proceedings. 10 Given under my hand of office on this the 26th 11 day of July, 2016. 12 13 <%Signature%> 14 KENDRA L. ROWLAND-FINCH, CSR Certificate No. 5500 15 Certified Shorthand Reporter in and for the State of Texas 16 Expires December 31, 2017 17 VERITEXT LEGAL SOLUTIONS 300 Throckmorton Street 18 Suite 1600 Fort Worth, Texas 76102 19 Firm Registration No.: 571 817-336-3042 20 21 22 23 24 25

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