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Border Delays and Economic Impact to the Freight Sector: an Exploration of the El Paso Ports of Entry

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Border Delays and Economic Impact to the Freight Sector: an Exploration of the El Paso Ports of Entry BORDER DELAYS AND ECONOMIC IMPACT TO THE FREIGHT SECTOR: AN EXPLORATION OF THE EL PASO PORTS OF ENTRY by Sharada R. Vadali, Ph.D. Dong Hun Kang, Ph.D. Karen Fierro Project performed by Center for International Intelligent Transportation Research Report No: 186041-00005 July 2011 Report prepared by Center for International Intelligent Transportation Research Texas Transportation Institute 4050 Rio Bravo, Suite 151 El Paso, Texas 79902 TEXAS TRANSPORTATION INSTITUTE The Texas A&M University System College Station, Texas 77843-3135 Table of Contents Page List of Figures ............................................................................................................................... iii List of Tables ................................................................................................................................ iv Disclaimer and Acknowledgments .............................................................................................. v Executive Summary ...................................................................................................................... 1 Chapter I: Texas Ports of Entry and Nature of Freight Movements in the El Paso- Juarez Bi-National Region ........................................................................................................... 3 Introduction ................................................................................................................................. 3 Texas Border Ports of Entry ................................................................................................... 3 Trading Partners and Trade through El Paso Border Ports of Entry ....................................... 4 Understanding the Nature of Freight Movements in the El Paso-Juarez Bi-National Region and Other Ports – Regional Integration Perspectives and Gateway Corridor Types .............. 9 Chapter II: El Paso Ports of Entry and Borders as Components of Transport Costs and Economic Costs .................................................................................................................... 13 Ports are not Identical ............................................................................................................... 13 Passenger Ports ..................................................................................................................... 13 Commercial and Passengers Ports ........................................................................................ 13 Ports Vary in Terms of Commodity/Trade Profiles .............................................................. 14 Ports Vary in Terms of Transport Corridors They Serve ..................................................... 17 Ports Vary in Terms of How They Move Goods .................................................................. 17 Ports Vary in Terms of final Destinations they Serve/Trading Partners (Truck Trade flow Distributions) ............................................................................................................................ 19 Borders as Components of Transport Costs and Links to Logistical Efficiency ...................... 21 Factors Causing Delays ......................................................................................................... 21 Prior Literature, Perspectives in Assessing Economic Costs of Delay ................................. 24 Types of Economic Costs ..................................................................................................... 26 Chapter III: El Paso Freight Movements ................................................................................ 27 Freight Movement Trends – El Paso Ports of Entry ................................................................. 27 Proximity of Maquilas to Border Ports of Entry ....................................................................... 37 Chapter IV: Perceptions on Border Delays: Evidence from Shippers in the El Paso Juarez Region .............................................................................................................................. 38 Shipper Surveys ........................................................................................................................ 38 Issues Identified by Shippers ................................................................................................ 38 Chapter V: Framework to Evaluate Direct Costs of Border Crossing Inefficiencies to Shippers and carriers ............................................................................................................. 44 Framework Components ........................................................................................................... 44 Commodity/Trade Profiles by Direction of Flow ................................................................. 44 Data Needs to Quantify Direct Costs and Definitions of Delay ........................................... 44 Other Critical Data Elements .................................................................................................... 54 Chapter VI: Direct Costs Categories ....................................................................................... 56 Variable Direct Cost Categories: Shipper ................................................................................. 56 Variable Direct Cost Category: Carrier .................................................................................... 56 Commodity Classifications and Ports of Entry ......................................................................... 56 Center for International Intelligent Transportation Research Texas Transportation Institute Page i Shipper Costs ............................................................................................................................ 57 Variable Carrier Costs .............................................................................................................. 60 Chapter VII: Model Structure .................................................................................................. 63 Structure of the Spreadsheet Tool ............................................................................................. 63 Schematic Data Flows ........................................................................................................... 64 Chapter VIII: Bridge of the Americas Illustration ................................................................. 68 Number of Freight Truck Crossings ......................................................................................... 68 User Input Values in the Spreadsheet Tool .............................................................................. 68 Output Results from the Simulation ......................................................................................... 70 Results ....................................................................................................................................... 71 Conclusions ............................................................................................................................... 72 References .................................................................................................................................... 74 Appendix 1: Bridge of the Americas’ Details .......................................................................... 77 Appendix 2: Commodity Profiles (Ports of Entry) (By Value [2008]) .................................. 79 Appendix 3: Interview Instrument ........................................................................................... 89 Center for International Intelligent Transportation Research Texas Transportation Institute Page ii LIST OF FIGURES Page Figure I-1. Texas-Mexico Border Ports of Entry (Commercial and Passenger) ............................ 3 Figure III-1. Trends in Import Value through El Paso Ports of Entry (with USA and with Texas Alone) ................................................................................................................................... 29 Figure III-2. Trends in Import Trade Weight through El Paso Ports of Entry (with Entire USA and with Texas Alone) (Short Tons) ..................................................................................... 29 Figure III-3. Location Distribution of Juarez Maquiladoras Relative to Border Ports of Entry (Source: http://www.pdnmapa.org/pdnmapa/index.htm) ..................................................... 37 Figure IV-1. Typical Supply Chains of Shippers of Respondents Indicating Movements of Raw Materials/Intermediate Goods and Final Goods (Number Responding) .............................. 40 Figure IV-2. Shipper Responses on Variation in Crossing Times (By Respondent Number) .... 41 Figure IV-3. Daily Peaks Identified by Respondents .................................................................. 42 Figure IV-4. Seasonal Peaks Identified by Shippers ................................................................... 42 Figure IV-5. Impacts on Delay on Supply Chains ....................................................................... 43 Figure IV-6. Shipper Responses on Ability to Pass Cost Increases ............................................ 43 Figure V-1. Map of BOTA Crossing Facilities (2009) ................................................................ 46 Figure V-2. Number of RFID Readings at El Paso BOTA Entering and Exiting Points (Weekday BOTA RFID Readings between July and December 2009) ................................
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