Delays in getting trucks carrying freight across the Otay Mesa and Tecate international border crossings cost the U.S. and Mexico binational economy to lose a staggering $3.326 billion and more than 18,536 jobs during 2005, according to study released by SANDAG.
Two-hour or longer delays in freight movement at the Otay Mesa-Mesa de Otay and Tecate-Tecate ports of entry are significantly impacting productivity, industry competitiveness, and lost business income at the regional, state, and national level, according to SANDAG officials.
The Otay Mesa-Mesa de Otay Port-of-Entry (POE) is the busiest commercial border crossing between California and Mexico. In 2004, this POE handled more than 1.4 million trucks and $22.2 billion worth of goods in both directions, which represents the third highest dollar value of trade among all land border crossings between the United States and Mexico.
Another $1 billion in merchandise and more than 139,000 trucks crossed at the Tecate-Tecate POE. In addition, the manufacturing process of some products requires that partially assembled parts go back and forth across the border sometimes three or four times.
Trade is the fastest expanding component of the San Diego regional economy. Mexico is the United States’ second largest trading partner (after Canada) and California’s number one export market. Inadequate and aging infrastructure and more stringent security requirements create congestions at these commercial border crossings.
Border delays in freight movement result in increased transportation costs and interruptions in manufacturing and delivery cycles. Added wait times also discourage personal trips across the border. “These delays cost the U.S. and Mexican economies about $6 billion and over 51,000 jobs in 2005,” said Gary Gallegos, SANDAG executive director. “The issue has become so critical that 60 percent of crossborder travelers have indicated that they would pay a $3 toll for an expedited trip.”
It is estimated that at today’s level of processing time at the border – about two hours per truck – San Diego County loses $455 million in annual revenue from reduced freight activity. This translates into more than 2,400 jobs or $131 million in lost labor income a year. Forty-five percent of labor income losses are in the machinery and equipment sector.
The overall impact at the state level, given that 30 percent of Mexican truck trips are headed outside the San Diego region, is $716 million in output losses and $204 million in labor income losses (or more than 3,600 jobs). For the United States, total output losses are estimated at $1.3 billion and employment losses at 7,646 jobs.
However, the overall economic impacts of delaying trucks at the border are substantially higher on the Mexican side of the border than the American side. For Baja California, total output losses amount to $1.317 billion and 6,929 jobs annually. Though the machinery and equipment sector is the most affected in terms of output losses (over $655 million), manufactured goods and agricultural and food products represent 74 percent of jobs lost. For Mexico, total impact is estimated at $2.069 billion in lost output and 10,889 fewer jobs.
SANDAG, in partnership with Caltrans, has developed an economic model to assess the magnitude of regional economic impacts resulting from delays at the ports of entry. This model will serve as an analysis tool that can be used to understand economic impacts as the volume of travel increases and/or as a result of security screenings.
Project Manager:
Elisa Arias
619-699-1936
