SUPPLY CHAIN BOTTLENECKS: BORDER CROSSING INEFFICIENCIES BETWEEN MEXICO AND THE UNITED STATES * HERCULES E. HARALAMBIDES, MARIA P. LONDONO-KENT** Abstract : The North American Free Trade Agreement (nafta) assumes seamless border crossings, without detailing however how this would be achieved particularly in the case of trucking, the most important cargo transport mode. A time-motion study of what actually happens at the border reveals significant time and cost inefficiencies in the border- crossing process, thus defying the general economic interest and the spirit of the Treaty. Inefficiencies identified at the key U.S.-Mexican border crossing, Laredo, Texas, and Nuevo Laredo, Tamaulipas, generate costs for shippers and for the overall economy, in terms of congestion, pollution, and lengthy delays, favouring at the same time specific economic interests. The sources of these inefficiencies are legal and institutional barriers that impede achievement of nafta’s assumed seamless borders. Technology, along with recent devel- opments regarding security concerns, offer an opportunity for overcoming these barriers. Introduction The North America Free Trade Agreement (nafta) took effect on January 1, 1994. In a formal sense, nafta expanded trade links between Canada, Mexico, and the United States, eliminated barriers to cross-border trade in goods and services and established rules guaranteeing the permanent access of each country’s domestic products to the other North American markets. The agreement recognizes and encourages the large and growing trade among the three countries. Trade between United States and Mexico in- creased from $27 billion in 1982 to an estimated $239 billion in 2000. Truck- INTERNATIONAL JOURNAL OF TRANSPORT ECONOMICS Vol. XXXI · No 2 · June 2004 * Final version : October 2003 ** Hercules Hercules E. Haralambides, Professor of Maritime Economics and Logistics, Center for Maritime Economics and Logistics (MEL), Erasmus University Rotterdam, Burg. Oudlaan 50, 3062 PA Rotterdam NL. e-mail : Haralambides@few.eur.nl. María del Pilar Londoño-Kent Doctoral Researcher, Center for Maritime Economics and Logistics (MEL), Erasmus University Rotterdam – NL. e-mail: PilarKent@aol.com. The authors would like to thank Dr. James Giermanski, Michael Hathaway, and Robert Ehinger for providing information about the border crossing issue during field research and Dr. Charles L. Wright for his helpful comments on previous versions of this article. The usual disclaimers apply.