SANDAG, in cooperation with Caltrans, has completed an extensive study to gauge the economic impacts of border wait times on the binational economy. This first set of results [PDF], released in June 2005, focused on personal travel. The latest study looked at freight movement. Findings show the effects of border crossing delays on productivity, industry competitiveness, and lost business income at the regional, state, and national level for the United States and Mexico.
Reports and Presentations
With the assistance of a consultant team, SANDAG developed an economic model to assess the magnitude of regional economic impacts resulting from delays at the San Ysidro-Puerta México, Otay Mesa-Mesa de Otay, and Tecate-Tecate ports of entry (POEs). This model is a new analysis tool that can be used recurrently to understand economic impacts for different levels of wait times as the volume of travel increases and/or as a result of security screenings. The border economic impact model provides estimates related to personal crossborder travel and now has been expanded to assess impacts to goods movements.
Each day, more than 136,000 cars and 6,200 trucks, and nearly 340,000 people, travel between the United States and Mexico via the San Ysidro, Otay Mesa, and Tecate border crossings — making the San Diego-Baja California point of entry one of the busiest in the Americas.
The Otay Mesa-Mesa de Otay 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.
Crossborder Personal Travel: Economic Impact of Border Delays
Compiled from more than 3,600 surveys of border crossers at San Ysidro, Otay Mesa, and Tecate stations - at today’s average wait time of 45 minutes, more than eight million trips into the San Diego region are lost as many simply choose to avoid battling the congestion. This equates to a loss of nearly $1.3 billion in potential revenues – mostly in the retail sector; three million potential working hours; 28,000 to 35,000 jobs; and $42 million in wages annually. Excessive border waits also are affecting overall regional productivity. The total economic impact on the San Diego region is an output loss of between $2 billion and $2.5 billion per year.
In Baja California, border waits result in more than 2 million trips lost that may cause the loss of about $120 million in revenues - mostly in the food and lodging sector. The total output loss is estimated at between $100 million and $230 million per year.
Results reveal that failing to address delays at the border now will lead to greater problems in the future. If wait times were to increase by just 15 minutes, an additional $1 billion in productivity and 134,000 jobs would be lost in the binational border region.
Crossborder Freight Movements: Economic Impacts of Border Delays
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 $6 billion and more than 51,000 jobs during 2005.
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.
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.
The overall impact at the state level 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. For Mexico, total impact is estimated at $2.069 billion in lost output and 10,889 fewer jobs.
Technical Reports: Economic Impacts of Delays at the Border on Freight Movement and Trade Between the U.S. and Mexico