continue at the border to exchange tractors or shift cargos entirely to Mexican carriers, which

may or may not be wholly- or partially-owned subsidiaries. While not widely focused on in the

press or the industry, we believe that the criminalization of negligence in Mexico is the single

most important and intractable barrier. Without changes in Mexico's criminal code to alleviate

this problem, direct penetration into Mexico by U.S. carriers will be minimal. With such

reforms, U.S. carriers will expand into Mexico, albeit at a slower pace than will Mexican

carriers into the U.S..


 PROSPECTS FOR EXPANDED PERISHABLES MOVEMENTS BY TRUCK
BETWEEN MEXICO AND THE U.S.

 As virtually all overland perishables movements between Mexico and the U.S. already

are by motor carriage, growth of these movements depends upon: 1. not losing appreciable

traffic to the railroads and, to a lesser extent, marine transport; 2. expansion of overall trade in

perishables; 3. maintenance of the road infrastructure; and 4. avoidance of congestion and other

problems at the border.


Competition from Rail and Marine Transport

 At the current time, FNM is not in position to offer competitive services for hauling

perishables and marine movements are largely limited to tropical fruits, such as bananas.

However, trucking's monopoly on overland perishables movements cannot be assumed to be

secure. As described elsewhere in this report, several initiatives are in planning or, in some

cases, under construction to initiate rail movements of perishables to and from the U.S. border

(see Appendix II) and expanded perishables trade through Mexico's Pacific and Gulf ports (see

Appendix I). Some of these have the potential to radically change the position of motor