will both encourage trade generally, and in particular, promote better use of complementary or

backhaul capacity. The reasoning for this assertion is discussed below.

 There can be little doubt that, as border crossing procedures are streamlined and as

Mexico's new vehicle weight restrictions come in force, it will become common for trailers, if

not entire rigs, to travel between the interiors of Mexico and the U.S., rather than having cargos

transferred to other vehicles near the border. For those instances in which cargos are still

transferred at the border, it will (and is) become increasingly common for the entire trip to be

controlled or overseen by one carrier, either through subsidiary carriers in the other country or

long-term contracts with other carriers. These changes will facilitate more direct negotiations

between producers and final buyers. For example, with through carriage, it will be easier for

a Sinaloa grower to sell products F.O.B., Culiacan to the final receiver in San Francisco, rather

than moving the product to Nogales and then the broker in Nogales selling the product to the

San Francisco buyer, as is currently the norm. In other words, there will be one longer

movement, rather than two shorter ones.

 The Sinaloa grower and the carrier which delivers product to Nogales, are aware of the

advantages of utilizing the truck's capacity as it moves back towards Sinaloa. However, it is

only natural that they approach the problem in a fairly parochial fashion --- in terms of 'what

can be hauled from the border to Sinaloa?' As both the border area and Sinaloa are sparsely

populated, it is not surprising that the alternatives are limited. Only 40 percent of the vehicles

returning from the border have paying loads, and many of these are only partial loads.

Typically, these return loads are farm inputs or groceries for local consumption. By contrast,