range from $1.00 to $1.50 per mile. with higher rates for shorter hauls and loads requiring

specialized equipment. For example during the week ending September 28, 1993, freight rates

to various destinations for produce loads from southern California ranged from $1.28-to-$1.39

per mile and from Georgia ranged from $1.27-$1.39 per mile (Agricultural Marketing Service).

 There are several reasons for the higher freight rates in Mexico.

 1. The poor roads impose costs on carriers in terms of longer trip times and
 increased repair and breakdown frequencies. For example, a carrier indicated
 that it took 38-to-40 hours from Tabasco State to Reynosa, about 858 miles. In
 the U.S. this distance would normally be transited in 24-to-30 hours. Many of
 the higher speed roadways, when available, have prohibitively high tolls. For
 example, the same carrier noted that they can use toll roads to reduce the Tabasco
 State to Reynosa trip time, but at a cost of nearly $1,000 per round trip.

 2. Equipment utilization rates appear to be low. One reason for this is that vehicles
 frequently are held by shippers and receivers for extended periods. For example,
 at wholesale produce markets, trucks are held typically for an entire day, due
 both to insufficient storage and to the commonly held belief that product bought
 off the truck is fresher than that in a storage facility.

 Despite the practice of holding vehicles, most carriers interviewed had close to
 a 1-to-1 ratio of trailers and power units. [Having more trailers allows a carrier
 to utilize a power unit while a trailer is being loaded or off-loaded.]

 Marked directional imbalances in freight flows, increase the ratio of empty to full
 mileage and/or increases time waiting for loads. This problem exists in virtually
 all nations, to a greater or lesser degree. In Mexico the problem is particularly
 severe due to the extreme concentration of population and manufacturing in the
 Mexico City-Guadalajara region. With the exception of Monterrey, there are no
 other concentrated population centers. Therefore, it is frequently difficult to find
 complementary outbound hauls for vehicles bringing goods and raw materials to
 Mexico City.

 3. Due to the need for very heavy duty equipment and prohibitions and tariffs on
 imports, equipment costs in Mexico have been high. For example, one carrier
 noted that a tractor costing $50,000 in the United States, sells for $80,000 in
 Mexico. High interest rates also contribute to these costs. Recent changes in
 Mexican law regarding importation of used equipment may somewhat alleviate
 this situation.