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Borderland is a weekly overview of the developments in the world of cross-border trucking and commercial traffic between the USA and Mexico. This Week: Texas Toll Road Traffic Rises Above Pre-Pandemic Levels; Texas Expands CDL Testing, Renewals Throughout November; Mexican Manufacturer Opens Global Office in Washington; and a cross-border truck insurance taken over by Marsh McLennan.
Toll road traffic in Texas is rising above pre-pandemic levels
Traffic on the Texas State Highway 130 toll road is rising to pre-pandemic levels and higher, according to the company that operates the public-private thoroughfare in the Lone Star State.
“We’ve seen pretty dramatic growth in this post-COVID period. We’re on the road way above our pre-COVID volumes, ”Doug Wilson, CEO of SH 130 Concession Co., told FreightWaves.
State Highway 130 runs 91 miles through central Texas. The SH 130 Concession operates a private toll road that runs a 41 mile stretch of the highway from southeast of Austin in the south to Seguin, a town about 30 miles east of San Antonio.
From March to October of this year, SH 130 Concession Co. recorded more than 7 million transactions, 31% more than in the pre-COVID-19 period. The road is owned by the state, which has a lease with SH 130 concession until 2062.
Wilson attributes the surge in traffic along the toll road to economic and residential growth in the area, along with the reopening of businesses and a slow return to normal.
“The traffic on all toll roads is very location specific and our location is growing dramatically. Because of this economic growth, and because this is an important freight corridor that has been very strong, we are exceeding our pre-COVID levels, ”said Wilson.
The basic toll rate for passenger vehicles is $ 7.84 with an electronic tag to travel the full length of the toll road. The base toll rate for an 18-wheeler with a trailer is $ 31.40 with an electronic toll sticker.
Earlier this year, SH 130 Concessions teamed up with the Texas Trucking Association (TXTA) to convince more hauliers to use the toll road through a program of discounts and incentives.
The FreightWaves SONAR platform includes the Outbound Bid Market Share Index, which measures the relative percentage of outbound bid volumes in each market in the United States and adds up to 100. The Austin market last represented 0.32% of total truckload outbound demand.
To learn more about FreightWaves SONAR, click here.
Tractor traffic on the toll road has increased by double digits every year since 2014 compared to the previous year. Around 1.8 million tractor-trailer transactions were carried out from March to October 2021, an increase of 37% compared to the comparable period before COVID in 2019.
James Lovett, director of public affairs for SH 130 Concession Co., said they have good relationships with both TXTA and the Laredo Motor Carriers Association.
“The program has done well and we have received good feedback,” said Lovett. “Through our partnerships with great groups like TXTA and the LMCA, we can connect directly with the freight forwarders to analyze their traffic movements through the corridor and develop a suitable program.”
Wilson said they are reviewing options to continue the freight forwarder incentive program and see if they need to tweak it to attract more freight forwarders while maximizing revenue.
“This traffic corridor is changing so quickly. One of the reasons SH 130 is here is trying to get trucks off I-35, ”said Wilson. “We would like to understand where the price sensitivities and the critical price points for these forwarding companies lie.”
The southern portion of the SH 130 toll road, which opened in 2012 at a cost of $ 1.35 billion, was originally touted as a way to alleviate the traffic collapse on Interstate 35 through Austin. It was originally built as part of a public-private partnership between Madrid, Spanish Ferrovial Construction and San Antonio-based Zachry Construction.
The I-35 freeway through Austin has some of the worst traffic jams in the country, according to a recent study by the American Transportation Research Institute. The route was ranked 15th in the nation for traffic growls.
According to a study by the Texas A&M Transportation Institute, truck drivers were more than 26 million hours late on I-35 in Austin, wasting 44 million gallons of fuel for $ 1.5 billion in 2019.
In the first few years, traffic revenues fell short of expectations. The original SH 130
Concession Co. filed for Chapter 11 bankruptcy in 2016. With the insolvency plan approved in 2017, a new holding company was created that grants bondholders ownership of the company while maintaining the existing agreement with TxDOT.
Today the toll road is finally meeting the expectations of many people.
“Our traffic is geared towards commercial traffic with more than 25% of our heavy vehicle transactions,” said Wilson. “That is not surprising, because our lane is a fast, safe and reliable alternative to the southern sections of the I-35 for truck traffic.”
The SH 130 toll road is part of a corridor that is rapidly becoming a magnet for commercial and industrial activity, including the $ 1 billion Tesla Gigafactory being built outside of Austin. The Tesla factory, which will produce electric vehicles, is slated for completion in 2022.
Last year, more than $ 400 million in corporate investments in the region created more than 1,400 direct jobs – many in transportation and logistics, according to the Greater San Marcos Partnership, an economic development organization based in San Marcos, Texas . about 12 miles from the toll road.
“The growth between Austin and San Antonio and the construction on I-35 lead to more and more traffic jams on I-35, which makes SH 130 a very attractive alternative. These factors should continue and the natural path for additional growth in the corridor is east toward SH 130, ”said Wilson. “We expect much larger commercial, commuter and local traffic where we have the lane capacity ready. We believe that this will continue our strong traffic growth for many years to come. “
Texas expands CDL testing, renewals later this November
Texas is expanding CDL testing to six days a week for the month of November in response to a truck driver shortage that has contributed to supply chain issues, according to a press release.
The Texas Department of Public Safety (DPS) has added additional Saturday appointments in select CDL offices for customers who need to apply, renew, replace, or upgrade their Texas CDLs.
Tests and other CDL services are typically only available Monday through Friday in Texas. The participating driver’s license offices offer a limited number of appointments on Saturdays in November.
“We have all seen reports of severe stress on our supply chain or felt the effects in person,” said Steven McCraw, DPS director. “By adding CDL services in select offices, we can get more skilled professional drivers on the road to move more goods.”
Mexican manufacturer opens global office in Washington
Deacero, one of Mexico’s largest steel wire manufacturers, recently opened a Washington office for global trade and corporate affairs.
“This is where decisions are made that affect our company, its employees and its customers – not just in the US, but also in Mexico and other international markets in which we operate,” said Raul Gutierrez, CEO of Deacero. “We want to stay informed about these decisions and be part of the public dialogue that shapes them. The new office will give us the direct presence we need to do this well. “
Deacero, based in Monterrey, Mexico, manufactures steel wire and reinforcing steel. The company employs 8,000 people in 20 countries, including recycling centers, steel mills, steel wire mills and a research and development center.
Marsh McLennan takes over cross-border truck insurance
Southwest Truck Insurance, based in Irving, Texas, was acquired by the Marsh McLennan Agency (MMA).
Financial terms of the acquisition were not disclosed. All Southwest Truck Insurance employees, including President John Phillips, will be moving to MMA, according to a release.
Founded in 1986, Southwest Truck Insurance specializes in commercial insurance solutions for the truck industry, including domestic and cross-border truck insurance serving customers in the United States and Mexico.
New York-based MMA is an insurance provider with more than 8,000 employees in 160 offices in North America.
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