[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
FREIGHT AND PASSENGER RAIL IN
AMERICA'S TRANSPORTATION SYSTEM
=======================================================================
(113-4)
HEARING
BEFORE THE
SUBCOMMITTEE ON
RAILROADS, PIPELINES, AND
HAZARDOUS MATERIALS
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MARCH 5, 2013
__________
Printed for the use of the
Committee on Transportation and Infrastructure
Available online at: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=transportation
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
VACANCY
------ 7
Subcommittee on Railroads, Pipelines, and Hazardous Materials
JEFF DENHAM, California, Chairman
JOHN J. DUNCAN, Jr., Tennessee CORRINE BROWN, Florida
JOHN L. MICA, Florida DANIEL LIPINSKI, Illinois
GARY G. MILLER, California JERROLD NADLER, New York
SAM GRAVES, Missouri ELIJAH E. CUMMINGS, Maryland
SHELLEY MOORE CAPITO, West Virginia MICHAEL H. MICHAUD, Maine
CANDICE S. MILLER, Michigan GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana ALBIO SIRES, New Jersey
BOB GIBBS, Ohio ELIZABETH H. ESTY, Connecticut
PATRICK MEEHAN, Pennsylvania PETER A. DeFAZIO, Oregon
RICHARD L. HANNA, New York, Vice MICHAEL E. CAPUANO, Massachusetts
Chair STEVE COHEN, Tennessee
DANIEL WEBSTER, Florida DINA TITUS, Nevada
THOMAS MASSIE, Kentucky NICK J. RAHALL, II, West Virginia
ROGER WILLIAMS, Texas (Ex Officio)
TREY RADEL, Florida
SCOTT PERRY, Pennsylvania
BILL SHUSTER, Pennsylvania (Ex
Officio)
CONTENTS
Page
Summary of Subject Matter........................................ v
TESTIMONY
Edward R. Hamberger, President and Chief Executive Officer,
Association of American Railroads.............................. 5
Hon. Paula J. Hammond, P.E., Secretary of Transportation,
Washington State; Chair, American Association of State Highway
and Transportation Officials High-Speed and Intercity Passenger
Rail Leadership Group; and Chair, States for Passenger Rail
Coalition...................................................... 5
James A. Stem, Jr., National Legislative Director of the
Transportation Division of the Sheet Metal, Air, Rail,
Transportation Union (SMART)................................... 5
Hon. Joseph H. Boardman, President and Chief Executive Officer,
Amtrak......................................................... 5
PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS
Hon. Steve Cohen, of Tennessee................................... 37
PREPARED STATEMENTS AND ANSWERS TO QUESTIONS FOR THE RECORD SUBMITTED
BY WITNESSES
Edward R. Hamberger:
Prepared statement........................................... 39
Answer to question from Hon. Lou Barletta, a Representative
in Congress from the State of Pennsylvania................. 57
Answers to questions from Hon. Michael H. Michaud, a
Representative in Congress from the State of Maine......... 57
Answers to questions from Hon. Corrine Brown, a
Representative in Congress from the State of Florida....... 58
Hon. Paula J. Hammond, P.E.:
Prepared statement........................................... 60
Answer to question from Hon. Jerrold Nadler, a Representative
in Congress from the State of New York..................... 66
Answers to questions from Hon. Corrine Brown, a
Representative in Congress from the State of Florida....... 67
James A. Stem, Jr.:
Prepared statement........................................... 72
Answers to questions from Hon. Michael H. Michaud, a
Representative in Congress from the State of Maine......... 79
Answers to questions from Hon. Corrine Brown, a
Representative in Congress from the State of Florida....... 81
Hon. Joseph H. Boardman:
Prepared statement........................................... 83
Answers to questions from Hon. Jeff Denham, a Representative
in Congress from the State of California................... 93
Answers to questions from Hon. Corrine Brown, a
Representative in Congress from the State of Florida....... 97
Answers to questions from Hon. Jerrold Nadler, a
Representative in Congress from the State of New York...... 103
SUBMISSIONS FOR THE RECORD
Edward R. Hamberger, President and Chief Executive Officer,
Association of American Railroads, inserts for the record......17, 35
Hon. Jerrold Nadler, a Representative in Congress from the State
of New York, request to submit the Northeast Corridor
Infrastructure and Operations Advisory Commission's report
entitled, ``Critical Infrastructure Needs on the Northeast
Corridor,'' (January 2013)................................ \\
ADDITION TO THE RECORD
American Chemistry Council, written statement.................... 105
----------
\\ The report entitled ``Critical Infrastructure Needs on
the Northeast Corridor'' can be found online at http://www.nec-
commission.com/wp-content/uploads/2013/01/
necc_cin_20130123.pdf.
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FREIGHT AND PASSENGER RAIL IN
AMERICA'S TRANSPORTATION SYSTEM
----------
TUESDAY, MARCH 5, 2013
House of Representatives,
Subcommittee on Railroads, Pipelines,
and Hazardous Materials,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 11:04 a.m. in
room 2167, Rayburn House Office Building, Hon. Jeff Denham
(Chairman of the subcommittee) presiding.
Mr. Denham. The subcommittee will come to order. First let
me welcome our distinguished witnesses and thank them for their
testimony today. We invited you because each of you represents
a key stakeholder group involved in our Nation's rail industry.
As you know, passenger and freight rail, coupled with
railroad suppliers and union workers play important and
dependent roles in our Nation's economy, and are vital to its
success. As you all may know, Chairman Shuster and I are
committed to rail reauthorization this year. I say again,
``this year.'' And hopefully, this hearing will be a productive
start to a bipartisan effort.
We need to be pragmatic and transparent, and we will need
all parties to participate in order to deliver the best
bipartisan product to the House floor. We want to make it a
point to welcome all ideas from many viewpoints, in order to
make the most robust and comprehensive reauthorization. We
thought an educational hearing on our Nation's rail industry
would be the best way to start and really have a very
productive conversation.
Railroads are an integral part of North America's
infrastructure network and, in turn, our economic
competitiveness. From the building of the Nation's first rail
in 1828 until now, both passenger and freight railroads have
played a central role in our Nation's development. It is
important to note that the U.S. freight rail system is the
number one in the world, with our passenger rail system also
increasing ridership yearly.
Our witnesses include representatives of freight and
passenger rail, as well as representatives of States and labor.
And they will describe their interdependent roles in this
important industry. Since I don't want to repeat their
testimony, let me very briefly describe the current Federal
role in the railroad industry.
First, the Federal Railroad Administration, a modal
administration within the U.S. Department of Transportation,
oversees railroad safety and manages rail infrastructure
programs. Independent of DOT, there are three Federal
Government boards: the Surface Transportation Board, which
administers economic regulations of the rail; the Railroad
Retirement Board, which manages rail retirement and
unemployment programs; and the National Mediation Board, which
administers the Railway Labor Act to ensure interstate commerce
is not interrupted by railroad labor disputes.
Finally, Congress also provides support by authorizing and
subsidizing Amtrak, which operates intercity passenger rail and
owns a majority of the Northeast Corridor. Our goal for this
year is to re-examine the Federal Government's role and discuss
and analyze what has worked in the past, and what needs to be
reformed.
The purpose of this is to be an educational hearing. So I
ask the witnesses and Members to try and save their policy
preferences for future hearings. Again, I thank the witnesses
for being here with us today.
I would now like to recognize Ranking Member Corrine Brown
from Florida for 5 minutes to make any opening statements she
may have.
Ms. Brown. Thank you, Mr. Chairman, and I want to thank you
for holding this hearing today. I know that you are committed
to improving our Nation's freight and passenger rail system,
and I am looking forward to working with you and this Congress
for important legislation. This hearing will be very helpful to
our new Members, and a good start in preparing to re-authorize
the Passenger Rail Investment and Improvement Act.
I truly appreciate what freight and passenger rail have
done and will continue to do for our country. And I am pleased
again to serve as ranking member of the subcommittee for the
113th Congress. My top priority for rail is to continue to
increase investment in freight and passenger rail, expand
passenger and high-speed rail throughout the country, ensure a
safe workplace, and, most important, put America and the entire
community back to work.
I will also continue to fight to ensure minority
participation in leadership and contracting throughout the
transportation industry.
The fact is that railroads are the backbone of the North
American transportation network. From the building of our
Nation's first railroad in 1828 to the creation of Amtrak in
1970, railroads have played a central role in our Nation's
economic development. Every year, American freight railroads
invest billions of dollars of their own capital, not taxpayers'
money, to maintain bridges, lay new tracks, purchase equipment,
and upgrade signal systems.
In fact, railroads spend five times more on capital
expenditures than the average U.S. manufacturer. In 2013,
railroads plan to spend $24.5 billion in maintenance, growth,
and modernization of the network.
Amtrak is also investing, thanks to an increased funding
authorization by the Passenger Rail Investment and Improvement
Act of 2008, and provisions that provided appropriations in the
American Recovery and Reinvestment Act of 2009. In 2012 Amtrak
carried a record number, 31.2 million passengers, a 55-percent
increase since 1997. Meanwhile, their request for operation
assistance has decreased.
Together, our Nation's freight and passenger rail employs
about 250,000 people. Railroad suppliers employ about 95,000
workers. Thanks to these hard-working men and women, we
literally have the greatest freight rail system in the world. I
hear this from transportation leaders across the globe. In
fact, any time you travel, they want to know about our freight
rail system.
In addition to easing highway congestion, shifting freight
from trucks and passengers from cars to rail have substantially
environmental and energy benefits. Freight trains are at least
four times more fuel-efficient than trucks, and can move 1 ton
of freight 436 miles with a single gallon of fuel.
Is my time up?
[Laughter.]
Ms. Brown. In closing, I want to welcome today's panelists,
especially Mr. Boardman--we should have a witness chair named
after him for being here so many times. I am looking forward to
hearing your testimony and your ideas for preparing our rail
system for the future.
Thank you very much, and I will yield back my time and ask
any additional questions at the proper time.
Mr. Denham. I now call on the chairman of the full
committee, Mr. Shuster.
Mr. Shuster. Thank you, Mr. Chairman. I just want to
welcome the folks here, the witnesses today. Appreciate you
being here. And I just want to echo what the ranking--
distinguished ranking member said about--we have the finest
rail freight system in the world, and we want to make sure that
it continues to be, that it continues to not have to rely on
the Federal Government for funding, and that they continue to
be prosperous and invest 18 to 20 percent of their revenues
back into the system.
But also, appreciate the help--the chairman having this
hearing to not only talk about freight rail, but passenger
rail. I think it is pretty clear--I have made it pretty clear I
really want to try to do something to reform Amtrak, to make
sure that--it may never make a profit, but we need to make it
move in that direction. I appreciate what--some of the things
Mr. Boardman has done over his tenure as CEO at Amtrak, but we
need to sit down--labor, management, Congress--and figure out
how we need to move forward, and focus on those areas that I
believe can be--or that are profitable, and build on that, and
look at other areas that aren't, and figure out ways to correct
them or spend them or reform them in such a way that we can be
moving in the right direction.
I think it is critical that we have passenger rail in this
country, some places a lot more than others. And, of course, it
is no secret the Northeast Corridor is one of those places that
should shine, even more than it does now. And just full
disclosure, I do not live along the--western Pennsylvania is
not in the Northeast Corridor. So for those folks that say that
is, you know, parochial interest, it is not. I think it is of
interest to anybody who lives in that corridor, that population
density, that we continue to see significant improvements to
Amtrak and its operations there, as we move forward.
So, I am going to be working very closely with the chairman
as we move forward to do a rail reauthorization bill this year.
So, Mr. Chairman, thank you for yielding me the time. I
yield back.
Mr. Denham. I now call on Mr. Mica, former chair of the
full committee.
Mr. Mica. Well, just a minute. First, I want to thank
Chairman Shuster, Chairman Denham, and Ranking Member Brown for
conducting this meeting, and doing an assessment from all the
stakeholders.
Just 1 second to remind folks that the last time we did a
rail reauthorization it took us 11 years. And working in a
bipartisan manner with Mr. Oberstar, we were able to pass the
current PRIIA legislation we all worked on, which had some good
elements, the high-speed rail, a whole host of improvements
that we really need to look at again.
So, I think it is very important that we work together.
This could be, I think, one of the most important things that
we do. We weren't able to get reforms like RIF in the final
MAP-21. We tried to do that rail section, we had some
disagreements. But I think that we can resolve those
differences, so I salute Chairman Denham, Chairman Shuster,
Ranking Member Brown, and look forward to working with everyone
as we move this important legislation forward. And thank you.
Mr. Denham. I would like to again welcome our witnesses
here today. Our first panel will include: Mr. Ed Hamberger,
president and CEO of the Association of American Railroads; the
Honorable Paula Hammond, who holds three titles as the
secretary of transportation of Washington State, the chair of
the States for Passenger Rail Coalition, and the chair of
AASHTO's High-Speed and Intercity Passenger Rail Leadership
Group; James Stem, national legislative director of the United
Transportation Union; and once again, our frequent visitor, the
Honorable Joseph Boardman, president and CEO of Amtrak.
I ask unanimous consent that our witnesses' full statements
be included in the record.
[No response.]
Mr. Denham. Without objection, so ordered. Since your
written testimony has been made part of the record, the
subcommittee would request that you limit your oral testimony
to 5 minutes.
Mr. Hamberger, first I would like to take the opportunity
to recognize you and the association for your participation in
the Veterans Jobs Caucus and the rail industry's commitment to
hiring our veterans. Thank you for your efforts. And with that,
please proceed.
TESTIMONY OF EDWARD R. HAMBERGER, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ASSOCIATION OF AMERICAN RAILROADS; HON. PAULA J.
HAMMOND, P.E., SECRETARY OF TRANSPORTATION, WASHINGTON STATE;
CHAIR, AMERICAN ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION
OFFICIALS HIGH-SPEED AND INTERCITY PASSENGER RAIL LEADERSHIP
GROUP; AND CHAIR, STATES FOR PASSENGER RAIL COALITION; JAMES A.
STEM, JR., NATIONAL LEGISLATIVE DIRECTOR OF THE TRANSPORTATION
DIVISION OF THE SHEET METAL, AIR, RAIL, TRANSPORTATION UNION
(SMART); AND HON. JOSEPH H. BOARDMAN, PRESIDENT AND CHIEF
EXECUTIVE OFFICER, AMTRAK
Mr. Hamberger. Thank you, Mr. Chairman. It is something
that we are focused on. One in four employees is a veteran. And
last year we hired 5,000 returning veterans. Thank you for the
opportunity to appear before you this morning. Joe Boardman is
here. Amtrak is a member of the AAR. Joe sits on our board. So
I will focus my comments on the freight side of the house this
morning, but I am ready to talk about either side during Q&A.
If I can impress upon this committee one important salient
fact about the freight railroad industry, it is this: we are
privately owned. Unlike highways, barges, and airports, we
operate on our own right-of-way, which we pay taxes on, which
we pay to maintain, and which we pay to upgrade. From 1980
through 2012 we spent $525 billion--``b,'' as in ``boy''--in
private capital to upgrade and modernize this infrastructure.
We continue that trend in 2013. Projected spending will be
$24.5 billion back into the infrastructure.
And this is the literal foundation over which passenger
rail operates. Outside of the Northeast Corridor it is the
foundation for Amtrak moving around the country. So these
investments are not only for the benefit of our freight
customers, but they have benefits for passenger movement, as
well.
What has this investment meant? Well, first of all, and
most importantly, it has dramatically improved our safety. 2012
has been the safest year on record, in terms of accident rate,
grade-crossing incidents, and, most importantly, employee
injury rate. In fact, it is safer to work on the freight
railroads and passenger railroads than in any other mode of
transportation, and many other industries, including the one
comparison that I love: It is safer to work on a railroad than
it is in a grocery store.
But there are accidents and there are fatalities. We are
focused on improving our safety, working with labor, and
working with the Federal Railroad Administration--FRA. We are
doing lots of research at the Transportation Technology Center,
where this subcommittee has held hearings in the past. I invite
you again to travel to Pueblo, Colorado, to see the new
technologies that we are working on there.
Second, our investment has paid dividends for a cleaner
environment. We can move 1 ton of freight almost 500 miles on 1
gallon of fuel. In fact, Mr. Chairman, it would take just about
6 gallons to move a ton of freight from your home district to
the U.S. Capitol. And Ranking Member Brown, it would take about
a gallon-and-a-half to get something from Jacksonville to here.
We are, therefore, 75 percent cleaner, in terms of
greenhouse gas emissions than the trucking industry. If we
could get just 10 percent of the freight off the highways onto
the railroads, we would save 1 billion gallons of fuel and 11
million tons of CO2 not emitted into the air every year. We
think that that would be a good goal. And, in fact, it is a
goal of the draft freight rail plan at the Department of
Transportation.
Third, freight rail service has never been better. We are
able to give the best service in history to our customers,
making them competitive in global markets. But in addition to
great service, rates for our customers are lower. Railroads are
moving commodities today at an average rate that is 45 percent
less than when railroads moved that commodity in 1980.
Railroads are moving twice as much today as they did in 1980
for half the cost. That is the impact of the investment our
freight railroad members have made.
And I mentioned 1980 to you because none of these successes
and none of this investment would have occurred were it not for
the Staggers Rail Act of 1980. In 1980, 25 percent of the
industry was in bankruptcy. Congress was considering whether or
not to nationalize the industry. Instead, they passed the
Staggers Rail Act, which resulted in a balanced regulatory
system, and has led to this heavy investment, increased
service, increased productivity, increased safety, and lower
rates for our customers.
As you take a look at policies going forward, we strongly
urge you to avoid enacting policies that would discourage this
necessary and critical private investment in the rail
infrastructure--investments that boost our economy and enhance
our global competitiveness.
This is my first opportunity to appear before you, Chairman
Denham. I have been here many times in the past, but I look
forward to working with you, other members of the subcommittee,
the full committee, the administration, and, of course, other
stakeholders, to address the challenges we have in the future.
Thank you.
Mr. Denham. Mr. Hamberger, thank you.
Ms. Hammond, you may proceed.
Ms. Hammond. Thank you, Chairman Denham and Ranking Member
Brown, for inviting me to participate. States have a unique
story to tell. As we sponsor intercity passenger service on
largely private freight rail networks, we work with Amtrak to
operate and deliver passenger rail service, and we work with
our freight railroads to deliver projects. And, in some States,
we own commuter rail service.
Today I will talk about Washington's freight rail network
and our Northwest Amtrak Cascade's passenger rail program. In
Washington the evolution of railroads have mirrored that of the
national trends. In 1870, the Northern Pacific began
construction on its first set of tracks in the Washington
Territory. And by the turn of the century, railroad's
connections enabled people in Washington to have rail access to
commercial centers across North America.
Today, BNSF Railroad and Union Pacific Railroads are the
main Class I railroads operating in the State, carrying freight
and passenger rail. I will talk first about our freight rail in
Washington State.
We have a robust freight rail system and a strong
partnership with Burlington Northern Santa Fe, which owns the
main line that runs north and south through our State, largely
along Interstate 5. In addition to that main line, we have 30--
excuse me, 23 short-line freight routes. Of those short-line
routes, the State owns the Palouse Coulee City Railroad, a 297-
mile short-line railroad spanning 4 counties in agricultural-
rich eastern Washington.
The combination of the short-line routes and the main-line
routes provide a very essential link for our agricultural and
manufactured goods to market. And it is one that supports not
only the economic vitality of the State, but also of our
Nation.
In 1990, a national shortage of rail hopper cars made it
difficult and costly for Washington State farmers to get grain
to market. To help alleviate the shortage of grain cars, the
State used Federal funds to purchase 29 used grain cars to
carry wheat and barley from loading facilities in eastern
Washington to export facilities in Washington and Oregon. From
that time we have grown to own 113 railcars, which have been
self-supporting, and the operating cost has developed and
enabled that program to grow. This was a kind of a partnership
with our ports in eastern Washington that has enabled us to
continue to get heavy loads on rail to market, which then
reduces the damage that is caused on our State highways.
The State Freight Rail Assistance bank is an important
program in our own State. It is a loan program that we have for
public sectors intended for small projects, or is a small
contribution towards larger projects. And we have programs
administered by WashDOT that also allows for grants and loans
through freight rail assistance. Sometimes that is the only
ability for our rail shippers and our growers to find the
ability to make improvements on short-line railroads and the
main line to enable improvements that will help goods get to
market better.
Let me talk a bit about our Amtrak Cascades service, as
well. Washington first partnered with Amtrak in 1994 in the
connection and coordination of a passenger rail program. From
that time, our vision and our goal from the Amtrak Northwest
Cascades program, which spans from Eugene, Oregon, up to
Vancouver, BC, was to grow incrementally a service of passenger
rail programs which today serves six round-trips between
Seattle and Portland, two round-trips between Seattle and
Vancouver, BC, and carries over 890,000 passengers a year. It
was the ability for us to have a program that enabled us to be
ready for the Federal rail grant when it came, which we were
able to successfully get $800 million for improvements to our
Burlington Northern Santa Fe rail line, which will add
increased trips, speeds, and reliability.
As this body considers and discusses PRIIA, the
reauthorization, I would want to make sure that we mention that
the Section 305 coordinated equipment purchase program is a
very good thing for our States. It enables us to get lower
cost, economy of scale for equipment. It enables us to have
partnerships across the United States, to deliver projects and
programs and higher speed passenger rail service, as an
opportunity for our States to continue to serve the public in a
growing population that we have.
Thank you for your time.
Mr. Denham. Thank you, Ms. Hammond.
Mr. Stem, you may proceed.
Mr. Stem. Thank you, Mr. Chairman. We appreciate the
opportunity to testify today about our views on rail
transportation policy. We want to readily acknowledge that
although I am here representing SMART transportation division
today, these remarks are intended to represent the input and
the equity that all of our railroad employees have earned in
the industry.
All of rail labor has a long history of supporting our
industry and working in partnership with the industry on a
variety of issues. We understand and readily acknowledge that
the most secure job is one in a profitable company that
provides service that America needs. We have participated in
many successful partnerships with this committee and with our
industry on equipment safety standards, hours of service
improvements, railroad retirement, pension reforms, and many
opportunities to grow our freight and passenger rail
industries.
We think one of the success stories that this committee
rarely hears about that should be acknowledged today is the
success of the Rail Safety Advisory Committee that was
sponsored by the Federal Railroad Administration during the
Clinton administration. It was the first time that rail
management, rail labor, rail suppliers, and the Federal
Railroad Administration were all gathered together in an
informal setting to participate in problem-solving exercises,
an exchange of thoughts and an opportunity for suggestions on
improved safety. RSAC continued to function well through the
Bush administration, and continues today. Our rail industry
today has improved safety processes in place and our safety
record has significantly improved because of the RSAC process.
We are proactive in our support for the industry, take an
active role in policy discussions supporting the expansion of
freight and passenger rail across the country. We also work
with all segments of our rail and transit industries and
legislative activities designed to highlight the advantages of
rail. Our rail employees today have earned equity in the rail
industry, and are very aggressive in long-term growth and
stability of our industry.
Passenger and freight railroads today are vital parts of
America's transportation system, which require a level of skill
and professionalism in the operation and maintenance of our
industry that translates into tens of thousands of good career
jobs for railroad employees. It takes many years to train and
qualify most of the safety-critical railroad employee class.
Our industry now focuses on hiring military veterans. We
readily acknowledge that decision not only is that a patriotic
decision, but military veterans bring something else to the
table. They understand the discipline necessary to operate in a
safety-critical environment, and they readily accept their role
in the overall safety of the operation.
The decision to focus on military veterans has proven to be
a win-win situation for all involved. Raises our hiring
standards, the railroads get a stable and mature employee that
readily accepts instructions and the safety-critical
responsibilities. Once they are trained and qualified, these
military veterans then have transferable skills that are very
much in demand.
Railroad jobs are not just a job. They are careers where a
person can earn a living wage to provide for their family and
send their kids to college. Our rail industry enjoys the lowest
turnover rate of any blue-collar industry in the country. In
spite of the 24/7 operations in all types of weather, working
on the railroad is more than a job, it is a way of life that
was chosen. We are expecting the influx of new military
veterans to even further reduce our turnover rate, and also to
contribute to improved safety performance.
We look forward to working with this committee during the
RSIA and PRIIA reauthorizations. We have a few technical
corrections to suggest for your consideration, and are working
with your staff to do that.
Mr. Hamberger mentioned the importance of coal for
generation. Twenty percent of our jobs in this industry are
directly related to the movement of coal, the use of coal. We
encourage the committee to continue to look at alternatives for
the use of coal, and the fact that the United States has 28
percent of the world coal reserves.
I need not remind this committee about the importance of
Amtrak. It is America's passenger railroad. Amtrak is a partner
with our private freight railroads.
Hazmat. Hazardous material shipments are also an integral
part of what our industry does.
I thank you for the opportunity to address the committee,
and I look forward to answering any questions the committee may
have. Thank you.
Mr. Denham. Thank you, Mr. Stem.
Mr. Boardman, you may proceed.
Mr. Boardman. Thank you, Mr. Chairman, Ranking Member
Brown. In 1966 I rode a Penn Central passenger train from Rome,
New York, to Syracuse, New York, as I volunteered to serve the
country in the Air Force. Four years later, Penn Central was
bankrupt, along with many others. And over the next 10 years,
Congress repeatedly reorganized the industry.
First came passenger rail, with the Rail Passenger Service
Act, and Amtrak was created. Then there was deregulation. The
implication was that railroads were no longer railroads, they
were freight railroads, commuter railroads, and Amtrak. I spent
the first 25 years of my career operating and managing
passenger transportation, beginning in college as a bus driver,
then a city transit manager, a public transit authority CEO, a
county transportation commissioner, and then my own business,
where I was the first employee.
We had 11 different systems in New York State and 300
employees when I left. And one of the critical pieces of what
we did was to reduce the cost for social service agencies
throughout New York State. We hired travel trainers, and we
used every source of public transportation, including Amtrak,
to move the people to reduce the cost.
Each year a new Congress, a changing administration,
freight railroads, commuters, NARP, real estate developers,
vendors, advocates, extreme critics, global management
companies, States, cities, counties, public authorities, rail
labor all exist at various intersections with Amtrak. The
result of those intersections, things like guidance and policy,
requirements, often outlive both their authors and the
circumstances that produce them.
This is the world Amtrak inhabits. Amtrak will soon
celebrate its 42nd birthday. And when that happens, I will have
been the second-longest CEO in Amtrak's history. And that is
4\1/2\ years. That is largely due to the world that Amtrak
inhabits, based on the constant change fostered by these
intersections.
Ridership is up, revenue is up, while Federal operating
subsidy is down, and so is our debt level. But the need for
capital investment underpins operating cost improvements all
along this industry. As Mr. Hamberger talked about, the private
freight railroad capital investment in the long-distance
network this year is over $24 billion.
I came here to Amtrak on November 26th in 2008. I came here
because I was committed to improving intercity passenger
service in the United States. And it is for the same reason
that I left my job as commissioner of transportation for George
Pataki in New York, and joined the George W. Bush
administration as a Federal Railroad Administrator. I love my
country, and I know that safe, reliable, connected public
transportation is a critical element of the common good needed
by our people in support of our economy and the global
competition we are in.
When I got here there was no plan for fleet replacement, no
strategic plan for the business, no vision for what could be.
Today all of those things exist. And if this Congress works
with us, I believe we can move all of those things forward for
our Nation.
Our strategic plan defines operational business lines.
First in the Northeast Corridor, which needs tremendous capital
investment today. But it is generating enough revenue above the
rail to help reduce operating subsidies. But without that
Federal capital investment, we are beginning to eat our assets
into early retirement, and may have to reduce our speeds
instead of increasing our speeds.
It is 10 miles from Newark to Penn Station, New York City,
500 trains a day on 2 tracks with 2 tunnels. In Penn Station
over 1,000 trains a day on 21 tracks, the busiest station in
North America. When one Hudson tunnel is out of service, 50
percent of our capacity is lost. When both are out, New York
and New England essentially are severed from the continental
United States.
The rural portions of our Nation are being abandoned, both
by intercity buses and by airlines today. Most rural folks are
driving today, and buses have a new business model as hub-to-
hub carriers, like Megabus. Airlines must depend on Federal
subsidies, some direct and some indirect, just like the
highways. But it is Amtrak's long-distance trains that provide
the backbone of connectivity for the people in the United
States. Serving 40 percent of the rural population, 15 percent
of our ridership comes from handling that----
Ms. Brown. Excuse me, Mr. Boardman. Mr. Chairman, I would
ask for 2 additional minutes for Mr. Boardman.
Mr. Boardman. I am going fast enough, I can----
Ms. Brown. I know it, that is why I want you to slow down.
We want to hear what you have to say.
Mr. Boardman. OK.
[Laughter.]
Ms. Brown. Thank you.
Mr. Boardman. We provide the only service available for
half of our stations in half of the States that we serve. This
is the system you see today that we operate above here, and it
is hard to pick out the colors. The long-distance are the
lighter blue, the red is the Northeast Corridor, and the darker
blue are systems like Paula operates.
This next slide identifies what we lose on each of the
long-distance trains. And if Congress were to tell us today to
get rid of any of the lines that cost $10 million or more per
year, it would be the top six routes on this chart.
This next slide would be the initial result of the Nation,
and would be divided at the Mississippi River. The common good
of our Nation, its scattered families, and our belief in the
United States of America truly demands a connected surface
transportation service. That is Amtrak. Thank you.
Mr. Denham. Thank you, Mr. Boardman. We will now commence
with 5-minute questions from each of the Members. I would ask
each Member, as we are starting this committee off, to follow
those timelines so that we do not have to handle the gavel
strongly from this end.
Let me start first with Ms. Hammond. From a national
perspective, how has the States' relationship with Amtrak
evolved over the past 5 years?
Ms. Hammond. We have, as I said, in Washington State had a
relationship with Amtrak since 1994. As the incremental service
and additional operating opportunities have come about, we have
increased our partnership with Amtrak.
It wasn't until the investment and the $800 million we
received for high-speed rail was the opportunity for us and
Amtrak and Burlington Northern Santa Fe to talk more about the
measuring performance-managed opportunity that we have, and the
commitment our State had taken on in accepting the capital
money.
With Amtrak, we now--and with Burlington Northern--have
performance measures that we expect and are working through on
service, speed, and reliability for the service. It has been
difficult a bit at times, as Joe knows, as we have been working
through a new accounting system that Amtrak has developed. But
with the States now taking on, in 2013, 100 percent of the
operating cost of our passenger service, contracting with
Amtrak, we have made sure that we are getting it right on how
our agreements between our service from Amtrak and how the
States' contribution to Amtrak for that service is right and
fair and equitable for the taxpayers of our own State.
We in Washington State have been in performance management
for many years, since 2001. And for us to see MAP-21 take on
the requirements for a closer, more heavily managed performance
for investments, as well as performance management for
decisionmaking, we think it is the right step to go.
We appreciate the partnership we have with Amtrak, we are
struggling through the details on how much of the cost of
operating that we will be taking on. But I would say it is a
strong partnership, particularly strong with the relationships
we have with the Northwest Amtrak staff and leadership, and we
appreciate the opportunity to continue to work with them.
Mr. Denham. Thank you. And certainly we recognize that it
is a big adjustment. As chair of AASHTO's High-Speed Rail and
Intercity Passenger Rail Leadership Group, are you getting the
details that you need to implement Section 209 of the Passenger
Rail Reinvestment----
Ms. Hammond. We have been working closely--and one of the
things that we did that was smart and right was, as a group of
States, we banded together to work with Amtrak as a body. So,
as we set forth the criteria and the requirements that we would
need for information for negotiating and understanding our
operating costs that we are assuming, we are doing that as a
Nation and as a group of States, which I think is the right way
to go.
We have had our moments. I wouldn't say that we haven't
always seen eye to eye. But one of the important
characteristics to work through together is that we pay for the
costs to operate the system that we are enjoying and those
benefits, and then continue to work with Amtrak as they work on
the long-range and long-distance service that also comes
through our State.
Mr. Denham. Thank you. Mr. Boardman, the Northeast Corridor
route is the most profitable--the only financially profitable
line in your business. How can you improve upon its success and
how do you use its profits?
Mr. Boardman. Right now we can call it profits if we talk
about above the rail. If you look at the infrastructure
necessary, capital investment in the infrastructure, there
would be no profits. And I know you know that, Mr. Chairman,
just to--but to be clear on the element of it.
We are clearing between $200 to $300 million above the
rail, in terms of revenue. And that revenue has gone right back
into the subsidy for reducing our debt, and also reducing the
amount of operating assistance money that the Federal
Government--that you--have chosen to give us.
We also receive a different set of dollars for investment
in the infrastructure in the Northeast Corridor. What would
help us improve the revenues is more capital infrastructure
investment for the future, to allow us to have an increased
capacity and to increase speed.
Mr. Denham. Thank you. And how do you view the relationship
between Amtrak and its State partners, especially with the
implementation of 209?
Mr. Boardman. I think that we have a very good working
relationship with our State partners. It is especially so in
the Northwest--and I think Ms. Hammond pointed it out. Kurt
Laird, for example, who is our general superintendent in the
Northwest, has a solid relationship with those States that he
is responsible for. And that exists across the country in
different locations.
We have had difficulty, as she has identified, really
identifying the charges for overhead, the necessities for us to
cover our costs, and for them to make sure that they are paying
the right costs. That has been a battle at Amtrak for probably
40 of the 42 years that it has existed, just because of the way
that railroads really account for their costs, and where we are
going. But we have had a very transparent process, and I think
we get closer and closer to the end of where we need to be to
make this happen.
Mr. Denham. Thank you. Ms. Brown.
Ms. Brown. Thank you. My first question is for Mr.
Hamberger. In 2013, American freight railroads planned to
invest $24.5 billion in rail networks. And that is to be
commended. That is a wonderful thing. But we in the Federal
Government have done well with the TIGER grants. Many Members
don't feel that it is a good investment of taxpayers' money,
and we have three major projects, and one of them Ms. Hammond
is talking about, but--one that I visited with. Can you tell us
the importance of those kinds of investments?
Mr. Hamberger. Thank you, Congresswoman Brown. To put it in
context, the TIGER grants do not go to the railroads. The TIGER
grants go to the States. And at least in the American Recovery
and Reinvestment Act--ARRA--they were general fund revenues,
not Highway Trust Fund revenues. So the argument is if there
are general fund revenues going to the State, shouldn't the
State have the right to make the determination where best to
spend that money to get the best return on that investment in
the area of transportation?
One of the things that has happened in the past decade is
the involvement of public-private partnerships. The poster
child of a successful public-private partnership is the CREATE
program in Chicago. It began about 10 years ago, when we, as a
freight rail industry, stepped forward and said that we would
put over $300 million of our own money on the barrel head.
Since then both the State and the Federal Government have come
forward with money, and some of that funding was through a
TIGER grant.
And so, what this money is is a way to enable the State to
provide the public money into the public-private partnership
project. It is important and particularly true in CREATE that
the idea is for the private sector to pay for the private
sector benefits and the public sector to pay for the public
sector benefits, such as cleaner air, less congestion, more
fluid movement through the city by building grade crossing
separations, for example, which that money is used for,
oftentimes.
So, if indeed public-private partnerships are a way to
increase investment in infrastructure--and I believe they
should be--then TIGER grants are one way to provide that public
money for public-private partnerships.
Ms. Brown. Thank you. Mr. Boardman, there has been a lot of
discussion about Hurricane Sandy and Amtrak involvement. And
what did you do to recover, and whether or not the Federal
Government provided the kind of assistance that Amtrak needed.
Mr. Boardman. Well, we found out right away, Ms. Brown,
that we were a private railroad. That is what the Corps of
Engineers told us. And, as a result of that, we began recovery
on our own, and we recovered as quickly as we could. Now,
toward the end of the process we did receive some help for
Substation 41--which is a pretty large concern--from the Corps
of Engineers.
But to get the tunnels pumped out, that was Amtrak's doing.
And then, actually, in cooperation with some of the freight
railroads and their assistance, and other commuter railroads,
we moved forward quickly, restoring service by the next night
into New York City. And within 3 days, back to Boston.
Ms. Brown. So you were able to resume operation within 2
weeks, or----
Mr. Boardman. Oh, yes. And we were, actually, in operation
within the next day or so. A limited operation, because of some
of the difficulties we were facing.
Ms. Brown. Everyone up here is talking about the sequester.
And people at home are talking about jobs. Can you tell us how
that is affecting your operation?
Mr. Boardman. We began to look several months ago at how
this might happen. Sequestration was not a new idea. It was
going to potentially happen, and Amtrak always thinks that
whatever the worst is, it probably will happen, so we need to
do something about that. And we began immediately to look at
how we would get through and what the numbers might really be
for us.
So, we looked at our capital program first. We now are
reducing the inventory that we had available of ties, for
example, and what we will do for the work this year. And as
long as this doesn't go on for a long period of time, we are
going to get through without any service cuts. It is anathema
for Amtrak to start service cuts, because it becomes a double-
edged sword. We lose the revenues that we are receiving, and we
lose the opportunity for continuing service.
Ms. Brown. Thank you. I yield back the balance of my time.
Mr. Denham. Before I recognize Mr. Duncan, while we are on
sequestration, can you just tell us what, in your opinion, a
``long period of time'' would be?
Mr. Boardman. Well, what--we thought about it this way, Mr.
Chairman, is if the--if the continuing resolution goes forward
from fiscal 2012, then we think that our hole is somewhere in
the neighborhood--and I know some new numbers have come out now
that I haven't evaluated, and Mike might even help me on this--
but we were at around the $37 million amount that we would have
to cover. Part of that was sequestration, and part of it was
the losses we had because of Sandy that weren't reimbursed, and
that may be reimbursed but may be sequestered, as well. That
would allow us to get through, basically, this year with a very
low level of cash and with a very low inventory.
If we go to a 2013-style budget, where there was a
reduction from what we received in operating assistance, which
I believe in 2012 was $466 million, and we were working toward
a $375 million level, and we don't have enough time to make
adjustments, then we are probably going to be in trouble in the
June/July timeframe. But some of those things may have to be
answered in a more complete, written response--especially if I
am seeing I might be off a little bit on numbers.
Mr. Denham. Sure. And just to be clear, to give the
committee a baseline, you know, obviously, every committee is
talking about sequestration right now. But under the Senate
budget, you would receive $400 million plus the $30.4 million,
which was authorized by FEMA. Under sequestration, you would
receive $442 million. So you would actually receive an increase
under sequestration, above what the current budget levels would
be.
Mr. Boardman. If it stays in the 2012 amount, yes.
Mr. Denham. So your bigger concern is not sequestration--I
don't want to put words in your mouth, but your concern would
be the CR, or the new appropriations bill coming out of the
Senate.
Mr. Boardman. Yes. And if that gets sequestered as well--
and I don't know the facts of how that really works--then we
saw that as the worst case.
Mr. Denham. Thank you. Mr. Duncan.
Mr. Duncan. Well, thank you, Mr. Chairman, and
congratulations on assuming the chairmanship of this very
important subcommittee. And I want to thank all of the
witnesses for their testimony.
And I will tell Mr. Boardman this past weekend was my
wife's and my 35th anniversary. And I rode the train up to New
York City and met her on Friday, and rode back on Monday. I
rode the regional train on Friday and the Acela train back on
Monday. I had a very comfortable, pleasant, on-time experience.
So I just wanted to tell you that.
[Laughter.]
Mr. Boardman. Thank you, Mr. Duncan.
Mr. Duncan. Anyway, and I wanted to welcome my long-time
friend, Mr. Hamberger. I have always said that I just don't
think the freight rail companies toot their horn nearly enough,
because they are important to everybody, even people that never
think--who never think about the rail system in this country.
You have told some interesting statistics. I never heard that
about it being safer than working in a grocery store. I have
worked in a grocery store all through high school, as a bag boy
at the A&P. But anyway, and to think that you are moving twice
as much now for half the cost as in 1980.
Many people here today don't remember Congressman Staggers,
but he was a leading Democratic chairman who led the
deregulation--or at least partial deregulation--of the rail
industry.
And--but I have always heard that railroads are leading
indicators, and I am curious as to what the next few months
look like for your industry, Mr. Hamberger. And in light of
what Mr. Stem said about how 20 percent of your business is due
to coal, if we decrease the use of coal in this country, what
happens to your industry? And if you have had any thoughts or
predictions about that.
Mr. Hamberger. Yes, sir. Let me answer those two separate
questions.
Mr. Duncan. Right.
Mr. Hamberger. We are, indeed, a leading-edge indicator.
Our weekly car loadings statistics are sought by policymakers
throughout the Government. What we are seeing right now is slow
but steady growth in the 2-percent range. We are hopeful that
that will continue.
Automobiles are growing very fast. We are looking at maybe
15.5 million automobiles this year, maybe a little bit more
than that. At the depth of the recession it was under 10
million. But we are not yet back to where we were in 2006 and
2007. Intermodal is growing at about 5 percent per year. We are
seeing some growth in the movement of lumber for housing
markets. So we are seeing--I hate to use the word ``green
shoots,'' but things are starting to come back. We are hopeful
that that will continue. Obviously, there is some connection
between what happens here and the economy, and what consumer
confidence will be. So we are keeping an eye on all of that,
meanwhile investing with the idea that the economy will come
back, so that when it does we are able to move the materials
when they need to be moved.
Coal has been an ongoing struggle. There are any number of
regulations that are making it more difficult for coal-fired
utilities to continue to burn coal or to open new coal-fired
power plants. You combine that with the operation of the
marketplace, where natural gas, because of fracking, is now in
the $3.50 to $4 MCF range. It is, therefore, cheaper, more cost
effective, for some utilities to burn natural gas. What we
don't know is will that natural gas price stay down at $3.50 or
$4. Right now I understand--I am told that the world market
price of natural gas is over $10 MCF. If that eventually
stabilizes above $5, $6, or $7, then we would see utilities
wanting to move back to using coal.
And that brings me back to the first issue. Would the
regulatory environment allow that to happen? We are down
somewhere in the 12- to 15-percent range in 2012 in carloadings
of coal as an industry. And so that did have an impact,
obviously. But we also had some sectors growing, like
intermodal traffic. One that is growing fast but is still small
in terms of the number of carloads, is moving crude oil by
rail. There have been some recent articles about that I am sure
you have read.
Mr. Duncan. Well, my time is up, but I will just say this,
that I have some concern that the improvements we have seen in
the economy over the past several months are based primarily on
pent-up demand. And so I hope we make some good decisions here
so we can help this country to boom in the years ahead. But it
is going to depend on what we do here, in large--in significant
part. Thank you, Mr. Chairman.
Mr. Denham. Thank you, Mr. Duncan. Mr. Nadler.
Mr. Nadler. Thank you, Mr. Chairman. Let me begin by
thanking all concerned for holding this hearing, and say that I
am a direct--not conflict of interest, since I ride the Acela
every single week back and forth on the Northeast Corridor.
Having said that, I want to ask Mr. Hamberger about freight
railroads.
You have testified that since the Staggers Act the
railroads have invested over $500 billion in plant and
equipment and direct capital investment, and you are planning--
you did about $24.5 billion this year, planning about $24.5
billion in direct capital investment next year. You have also
testified that we are looking at--I think your testimony was a
38--I don't remember, 38-percent increase in freight volume
over the next--or 80 percent or 78 percent, I think it was,
over the next 20 years.
Mr. Hamberger. Yes.
Mr. Nadler. Is there sufficient investment capacity to keep
up with that? Or do we--in other words, are the railroads
generating sufficient income to invest sufficiently to keep up
with the growing demand? And especially to keep up with growing
demand if we shift more from highways to railroad, as our
energy efficiency would demand that we do?
Mr. Hamberger. As always, a very penetrating question, Mr.
Nadler. The answer is I hope so. A number of years ago we had a
study done that showed that we would not be able to keep up
with the demand. That was before the recession. And it
predicted that there would be a delta of somewhere in the $48
billion range of what we needed to invest just to maintain our
current market share.
We have gone back and taken a look at that study, post-
recession. The demand level has been pushed out a number of
years, so we won't reach the same level that we thought we
would in 2035, number one.
Number two, we are investing more than we were at that
time, so we are putting more money back into it, because we are
able to.
And, number three, we have taken a look at the productivity
factor, and have adjusted that based on facts, so that the
productivity, annualized, is about three-quarters of a percent,
rather than a half-a-percent. That little change, along with
the investment and pushing out of the demand, makes me feel
that we will be able to, in fact, meet the demand. And, again,
that will depend upon whether the current balanced regulatory
system continues, so that we can continue to earn money to
reinvest. So that would certainly be the caveat there.
And just so there is no misunderstanding on economic terms,
when we say $525 billion, that covers both CAPEX and
maintenance money.
Mr. Nadler. That figure that I couldn't remember a moment
ago is an 88-percent increase in demand by 2035.
Mr. Hamberger. By 2035, yes.
Mr. Nadler. But I was intrigued by what you just said. You
said that you are looking at--you have made a minor adjustment
to the anticipated productivity increase from half-a-percent to
three-quarters of a percent, the small change. That is a 50-
percent change. That is not a small change, it is a huge
assumption. What justifies that 50 percent?
Mr. Hamberger. I have already said more than I know, Mr.
Nadler. Let me respond for the record, if I might.
[The Association of American Railroads inserted the
following information for the record:]
The Federal Highway Administration in January 2013
predicted that total freight shipments will rise from
an estimated 17.6 million tons in 2011 to 28.5 billion
tons in 2040--a 62-percent increase.
Mr. Nadler. OK, but where I am really leading, obviously,
is the same question I have been asking for the last 15 years
or so, which is what can the Federal Government do to help
expand investment in rail? Because, frankly, the railroads have
made a Herculean effort and a very positive Herculean effort to
invest. I think the country could use more investment.
Mr. Hamberger. As you know, at one point in the past we
were advocating an investment tax credit focused on capital
expenditures solely for the expansion of capacity. That did not
garner majority support in the House and Senate. Given the
discussion about the need to broaden the base and lower the
corporate tax rate and not talk about adding more targeted tax
provisions, we have lowered our voice on that.
However, for the short lines, the investment tax credit
still is very important--the 45G provision, which has helped
the short lines invest. And, as you know, I believe the number
is 26 percent of all rail traffic either begins or ends on a
short line.
Mr. Nadler. Thank you. Before my time runs out let me ask
Mr. Boardman one quick question, and that is you testified
about the very large percentage of the Northeast Corridor going
through the tunnels into Penn Station. Now, if that shut down
it would sever New England and New York from the rest of the
country, basically, which it clearly would. You have only got
two tracks. Governor Christie last year, I think it was, vetoed
the new--what was proposed to be a new tunnel into Penn Station
that would more than double capacity. What do you think we
should be doing in the future to deal with that problem?
Because, clearly, we have to deal with that problem.
Mr. Boardman. Well, the--those tunnels were never planned
to go into Penn Station. They went under Macy's and----
Mr. Nadler. You mean the proposed ones.
Mr. Boardman. Yes, the proposed tunnels. The tunnels that
are part of the Gateway Project right now really would go
directly into Penn Station, and will make a big difference in
how we make connectivity, both for high-speed rail and for New
Jersey Transit and Long Island Rail Road, and all those that
need--and I know that Metro North wants to get into Penn
Station at this point in time, too. The capacity just is not
there without a couple of new tunnels and the lines all the way
from Newark in to Penn Station itself.
Mr. Nadler. Thank you.
Mr. Denham. Mr. Barletta.
Mr. Barletta. Thank you, Mr. Chairman. Mr. Hamberger, as
you know, it won't be long before the widening of the Panama
Canal is completed. What do you see as the economic
opportunities and challenges upon the completion of that?
And, two, I envision development of inland ports,
obviously, to move this freight away from the ports and inland.
Are we ready for that? And if you could, just shed some light.
Mr. Hamberger. I am going to beg off on the first question,
Mr. Barletta. In fact, the Senate Commerce Committee is
contemplating a hearing in April on that exact issue, the
Panama Canal. We are busy internally talking to our members to
try to get their projections on what that might mean for their
traffic. I suspect, from where you are headquartered, it might
affect what your projections are. So, I would have a better
ability to answer that, if I could, for the record in the next
week or so.
With respect to the ports, when you ask what can be done to
help move more freight by rail, the good news is Burlington
Northern Santa Fe just got their final environmental impact
statement issued for their new intermodal facility at the Port
of L.A.-Long Beach. The bad news is they started 8 years ago.
Those kinds of permitting and regulatory issues have taken a
lot of time. And this will be, as I understand it, a state-of-
the-art, clean, intermodal facility which is going to take
thousands of trucks a day off the local interstates. I am sure
Rep. Napolitano knows more than I do about this project. But it
is that kind of cooperation that demonstrates we are just part
of an international logistics chain. And so the investments at
the ports, both dredging and portside, landside facilities are
critical.
I don't know whether or not the ports are ready. I suspect
that my counterpart at the American Association of Port
Authorities could answer that a little bit more precisely.
Mr. Barletta. Mr. Stem, the United States Department of
Transportation is currently conducting a 2-year study, the
impact of longer and heavier trucks on the Nation's highways.
Would you agree that Congress should await the results of this
study before proceeding to consider any further legislation in
this area?
Mr. Stem. Yes, sir. We not only agree with that philosophy,
but we think that that runs counter to the stated goals of the
U.S. Department of Transportation itself. This committee, over
the last 20 years, with my experience, has debated ways to use
rail for highway congestion issues. It also runs--flies in the
face of that. We think that the study would give this committee
and this Congress the types of information that you can use in
your decisionmaking process.
Mr. Barletta. Yes. As a former mayor, I could tell you I am
sure there is municipal interest in this, as well. As these
heavier trucks get off the interstate they go on to local roads
that are not built to the same specs as the interstate system.
And that cost falls right on the local taxpayers. So I have my
mayor's hat on, looking out for mayors across the country, as
well. So I am interested in seeing what that study will show.
Mr. Stem. If there were no viable transportation
alternative for those heavy loads, then that would be one
portion of the debate about public investment and rebuilding
offramps and bridges. But there are viable options. Put the
truck itself on a rail flat car and move it to point of
destination.
And the current sizes are programmed in to this
international logistics chain that Mr. Hamberger referred to,
which is another part of that conversation.
Mr. Barletta. Yes. I agree with you, that we should wait
until this study is completed so we have the information we
need to make a good decision about the safety and end cost.
Thank you.
Thank you, Mr. Chair.
Mr. Denham. Thank you, Mr. Barletta. Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman. And on the
same vein of questioning, I--my question is for Mr. Hamberger.
Regarding the rail diversion, in 2010 the American
Association of Railroads hired MIT researcher Carl Martin to
study the effect a higher truck weight limit would have on rail
transportation. Are you familiar with that report?
Mr. Hamberger. I believe that was more the American Short
Line and Regional Railroad Association, but yes, sir.
Mr. Michaud. Yes. In that report Martin predicted that a
truck weight increase similar to the one that is before this
committee would result in diversion of freight from rail to
truck only if--and only if--rail did not respond by lowering
their rates, increasing productivity, or improving service.
Mr. Martin's report goes on to state that should rail
respond to more productive trucks by reducing the rate,
diversion would not only be minimal, but the trucking industry
would actually see a greater reduction than rail, a 7-percent
overall reduction in truck miles, and only a 5-percent
reduction in rail traffic delivering the same volume of freight
with fewer miles for both rail and trucks. That sounds like to
be more efficient use of both rail and trucks in the system.
AAR has used this study to charge that rail traffic would
suffer. By reading this on page 18, is it true that the study
also undercuts your argument that rail would suffer if you had
a higher weight limit?
Mr. Hamberger. Not in the least, sir, no. What you are not
talking about is the subsidy. If you increase the subsidy to
the truckers, then railroads are going to have to cut rates to
compete with that increased subsidy. The point is it is not in
the national best interest to increase the subsidy to heavy
trucks. Make them pay for the damage they do. That is what this
study is going to find out. Congress has already spoken and has
mandated that that is what DOT should take a look at.
Our whole argument is when we go from 263,000 pounds to
286,000-pound railcars, that allows an increase in
productivity. And this is a technical term--but those heavier
cars ``beat the hell'' out of the track.
Mr. Michaud. OK.
Mr. Hamberger. But you know who pays for that increased
maintenance? You know who has to pay for the increased----
Mr. Michaud. OK, OK----
Mr. Hamberger. We do. The railroads.
Mr. Michaud. And my second question is when you look at--
there has also been DOT studies from going to a higher weight,
that actually, with a six-axle, a higher weight, the impact on
the highway--not bridges, but highway--is minimal. The safety
issues are taken care of. The problem I see in that report and
your argument is the--it is very clear that unless you reduce
rate, increase productivity, trucks lose more by an increased
truck weight, as far as capacity.
The other concern I see when you talk about no subsidies,
when you look at short-line rail, the problem being is because
of the ineffective way that some short-line rails are running
their operation they are losing more, and it is causing States
to actually have to either abandon the rail line or purchase
it. And, actually, that happened to Maine. Get back to the
ranking member's question about the State taking over a short-
line rail, used TIGER grant funds, because the rail has not
been able to reduce rates or increase.
So, I guess my concern being is on page 18 of that report,
you know, it is very clear that rail would--if you do not
respond to rates, increased productivity, or improving
services, then yes, it would affect what you would be getting
for an increased volume. But this here says if you respond in
this area it would not affect. Trucks will be hurt more. And
why does that not undercut your argument----
Mr. Hamberger. Well, because you are not looking at both
sides of the equation, Congressman. The other side of the
equation is the subsidy. The short line in Maine, you say they
weren't running it properly. Maybe they couldn't compete with
the subsidy of the truckers. And that happened in----
Mr. Michaud. No, no. This was before the weight increase in
the subsidy--see my time is running out. But it was before the
increase in weights. And when you look at previous DOT studies,
an increase in weight actually will reduce the CO2 emissions,
would reduce the cost of fuel, would take off more trucks off
the road if you had that higher increase in rate--weight,
rather.
So I see my time has expired, but we will be hearing a lot
more about this particular issue, I am sure. Thank you.
Ms. Brown. Mr. Chairman, can Mr. Hamberger have, if not the
time to respond now, time to respond in writing? Because I
think this is an important question for this committee. Maybe
you can grant him an additional minute to respond.
Mr. Hamberger. I would just say that Mr. Michaud has made
these arguments, and Congress last year voted 33 to 22 to send
it to DOT to take a look at the various sides of this whole
issue. And, therefore, I think that Mr. Barletta has it
correct, and Mr. Stem has it correct. When that DOT study comes
back, perhaps it will be able to answer these questions once
and for all.
On the six-axle truck, you did say that it doesn't address
the safety of bridges, and that is, of course, a very important
part of the study that I hope DOT will be looking at. As the
President said in his State of the Union Address, there are
over 60,000 structurally deficient bridges around the country.
So the impact of heavier trucks on bridges that were not
designed to carry that load needs to be looked at, as well.
And, of course, the sixth axle doesn't do much to mitigate that
weight on the bridge. It is the gross weight of the truck that
affects the bridge--unless it is a really short bridge.
Mr. Denham. Thank you, Mr. Hamberger. And I would just
remind Members as well as witnesses that we will be submitting
questions at the end of this hearing, and ask witnesses to
respond to those questions forthwith.
At this time I would like to recognize Mr. Perry for 5
minutes.
Mr. Perry. Thank you, Mr. Chairman. And I appreciate all
our guests' testimony, and your passion and dedication to what
is arguably one of the foundations of the American landscape
and our economy.
With that, I am just wondering--and I think I would like to
direct--seems like Mr. Hamberger has taken an unusual amount of
the questioning, but he seems to have the overall purview. So
maybe if not, somebody else can chime in, but if you could
characterize maybe, like, what you would consider the three
largest cost drivers for the industry as you see it, whether it
is freight, whether it is passenger, whether it is both, the
three largest cost drivers for the rail industry, in
particular, whether it is regulation, whether it is labor,
whether it is fuel, whether it is O&M. Tell me what you think.
Mr. Hamberger. Well, the top two clearly are fuel. The
larger railroads burn a billion-and-a-half gallons of fuel
every year.
Number two, we have a very well-trained professional
workforce. Labor costs are, I would guess, number two.
And number three would be technology and safety
investments.
Mr. Perry. With that--and I understand the significant
investment that your industry has made to upgrades and
modernization and safety, et cetera, over the years, as
appropriate--and of course, the taxpayers--and I think they
will be willing, as a matter of fact, happy, to support the
upgrades and the foundational changes that you folks are
advocating for, but I am sure they are going to want to know
that it is being spent responsibly, and that we are getting the
most efficiency for that.
So I am wondering what kind of programs the industry is
instituting to reform the cost drivers, the major cost drivers
like fuel, like labor, like technology, if any?
For instance, I am from Pennsylvania. The district I
represent drills for Marcellus shale gas. We might have some
Utica underneath or something like that. But are--seems to me
that the locomotives are more simple conversion to natural gas
than your passenger vehicle, because you can pull the tanks
right behind you, but I don't know. So I am looking for some
answers to those questions about gaining those efficiencies, to
make sure that we are getting the most bang for the buck for
our tax dollars.
Mr. Hamberger. There is a test going on that Canadian
National is running up in Canada. Liquified natural gas has
been something that the industry has looked at on and off over
the years. One of the concerns is, as you project, the cost of
LNG. Will it stay where it is today or will it go down? Where
will it end up?
One of the challenges is, of course, that it requires a
whole new network of distribution for liquified natural gas,
and who bears the cost of making that conversion? But it is
something that the industry is looking at.
And I don't know, Joe, maybe you have something--but we
have gone from 4,000 horsepower to 6,000 horsepower,
distributed power. We have done a number of things to improve
productivity. We have doubled our fuel mileage in the last 20
years, so it is something that we are focused on.
Mr. Boardman. Happy to help you out.
Mr. Hamberger. Thanks, Joe.
Mr. Boardman. You know, you have really been on the hook
here for quite a while.
It really drives the equation here that Ed is talking
about. If you really put natural gas, you have got a lot less--
at least in my experience--a lot less BTUs, so you do have a
considerable difference in what you are going to have to have
for a locomotive.
Of course in the passenger side of things--and those that
are in the Northeast sometimes understand and sometimes they
don't--is that everything between Boston and Washington that is
passenger-related operates on electricity. Or most everything.
There are a few others, some of the commuter lines that come
in, that are diesel-operated, and there is some freight along
the corridor that is diesel-operated.
But even electric power begins to bring up questions. Is it
electric that is generated by coal fire? Is it electric that is
generated by natural gas? Or, in some cases, we are able to
generate it in the Northeast by water power so that there is a
hydro component to it, as well. But hydro and compressed
natural gas today--which is growing, of course--is a small part
of what we really need to do.
One of the things that prevented us from getting back into
operation as quickly as we needed to into New York City was
that there was not sufficient power at the right cycles per
second that really delivered the number of volts that we needed
to operate more trains into New York City. And that is becoming
a limiting factor for us on the Northeast Corridor, as well.
So, we are using almost all the technology today with
freight and with passenger, looking for these solutions that we
can find. Such as the green diesels, where we are using
electric locomotives in some of the yards, and some of the
improvements that we are finding are the right things for us to
do. But something beyond where the diesel really provides
today, I think, is a major change in the infrastructure.
Mr. Perry. OK. Thank you, Mr. Chairman. I see my time has
expired. If I could get maybe written comments on the labor
component from Mr. Stem, that would be great. And I appreciate
your input. Thank you.
Mr. Stem. I would welcome that opportunity, and I would
just comment, as a perspective for you, that in 2013 we have
half as many employees today moving more than twice the number
of railcars around the country that were in existence in 1980.
So we have been engaged in a long-term productivity improvement
since 1980, and that continues. And Mr. Hamberger is correct,
we do have a very professional workforce working on the
railroads today.
Mr. Denham. Thank you. Mr. Walz.
Mr. Walz. Thank you, Mr. Chairman. And I would like to
thank all of you with your participation in Mr. Denham's I Hire
Veterans initiative. We know your commitment to that is strong,
always been there. This isn't something new for any of you, and
we understand that. And I am grateful for that. I also am
appreciative of the work you do, the careers you create, and
the way you move America.
And I say this not in classic Minnesota passive-
aggressiveness, but in honesty amongst friends, that we need
you out there, but I also have concerns in farm country and
rural America. And I would be remiss not to bring them up. And,
as you know, I have a long history with this, from the 2008
Farm Bill, asking. I want the facts on this. And in classic
Washington fashion it is either/or. We need rail and we need
highways. We need multimodal and we need ports.
What my concern is--and I understand clearly that you want
as much traffic as you can get and as many customers as you can
get, but I want to make sure the competition is there.
And so, Mr. Hamberger, what do you say--and I know you hear
this--you have been great in working with me on this issue of
trying to figure this out. What about captive shipping? What
about bottlenecks? What about paper barriers?
And then, add into that, I would have to say I am a
supporter of Mr. Michaud's position on truck weights. I too
want to see what the studies are. But we have had them, we are
out there. I really don't believe, no matter what that study
says, that all of a sudden you are going to say, ``Well, the
study is with us, go for that, raise those rates.'' I just
don't see that.
And I want to know if you can help me understand. How do we
reach a compromise on this? You need the truckers, they need
you. My consumers need both of you in a--in the best possible
way. And we need the market to work. How do we do that?
And anyone, if you want to. I don't want to put you on the
spot, because I truly am--and not passive-aggressively--I am
appreciative of what you have done, and the work you have done.
Mr. Hamberger. And I appreciate that, and we have indeed
had these conversations over the years. And thank you for the
opportunity, again.
You know, the classic issue is that our average rail rates
have gone down 44 percent, and that has allowed us and allowed
our customers to compete. Obviously, an individual captive
shipper who may not have as many options may say, ``Well, that
is nice, but my rates haven't gone down.'' That is why we
continue to be regulated by the Surface Transportation Board,
which we believe has a balanced regulatory approach. If there
is not effective competition, then the Board can step in and
cap those rates. And, as you know, they have instituted several
layers of ratemaking, not just one that takes a year or two,
but they have----
Mr. Walz. Do you know if anybody has ever won an appeal,
any of our shippers out there?
Mr. Hamberger. Oh, absolutely.
Mr. Walz. Have they ever won?
Mr. Hamberger. Sure, yes. In fact, the scorecard that the
STB publishes for the stand-alone cost is about 50/50. I
believe several of our chemical customers have just settled a
number of cases. My own view is that if there is a settlement,
then somehow there has been some accommodation. And so I would
consider that to be a process that, in fact, has worked, in my
opinion.
Your point about the cooperation between trucking and rail
is actually going on out there, as you point out. J.B. Hunt
Trucking, which is publicly traded--I may not have this number
exactly right, but for the third quarter of 2012, over 60
percent of their revenues came from intermodal. J.B. Hunt
Trucking. No, it is not called J.B. Hunt Trucking anymore, it
is J.B. Hunt Transportation. And so those are the kinds of
partnerships that we are trying to build.
With respect to the issue that I just discussed with Mr.
Michaud on truck size and weight, again it is a matter of who
is bearing the price of that increased productivity. If it is
an increased subsidy from the general traveler, the general
Highway Trust Fund, we think that that is unfair to us, since,
as I tried to point out, we are entirely responsible for paying
for the increased productivity on our own right of way.
Mr. Walz. I want a----
Mr. Hamberger. And I agree with you----
Mr. Walz. I want a solution that works for you and works
for our shippers. These are big folks, too. I mean these are
major motor companies----
Mr. Hamberger. Yes.
Mr. Walz [continuing]. Chemical companies, rural electrics,
and all of that. Do you have any objection to the Secretary of
Ag sitting on that decision with STB as it impacts agriculture?
I had an amendment in this year's languishing farm bill to add
that, of just trying to make sure they have a say.
Mr. Hamberger. Well, I think the question where we had some
concern was, as I understand your language, right now the
Secretary of Agriculture can participate in any proceeding that
he wants. And I believe, in fact, he just filed comments on
Friday. So a statutory requirement that he or she participate
just seems to be a little too much. But we certainly have no
objection to the Secretaries of Agriculture or Commerce or
Defense or anybody weighing in as they see fit.
Mr. Walz. Again, I appreciate all you do out there. It is
important to rural America.
Mr. Hamberger. Thank you.
Mr. Massie [presiding]. Having assumed the chair, I will
now yield myself 5 minutes. It is amazing what a freshman has
got to do to ask a question around here.
[Laughter.]
Mr. Massie. My name is Thomas Massie. But Mr. Boardman, my
question is for you. The Northeast Corridor, according to the
information that I have, it is the only profitable route right
now for Amtrak. And I would just like to ask you. What could
you do on the other routes, how can you capitalize on that
model of success there, if there is one, and--in order to
improve the profitability of the other routes?
And could you also just talk a little bit about ridership
and general trends there, and what some of the weaker routes
are? Thank you.
Mr. Boardman. Sure, Chairman Massie. Did I pronounce that
right? Massie.
The first thing I think that I would like to engage you on
is that it depends on defining profitability. And other people
would engage me on this if I said the Northeast Corridor was
profitable. And it is covering its costs above the rail and
then beyond that, between $200 to $300 million above direct
operating costs.
But there is a report, and I gave all the committee a
three-ring binder, which was basically a kind of primer of all
the different kinds of things we thought might be helpful for
the committee to understand. And one of the items in there was
the critical infrastructure needs on the Northeast Corridor.
This was just recently published. It is one of the best
documents that provides an understanding of the projects that
need to get done along the Northeast Corridor, and what the
magnitude of cost is, and where we are in the process of doing
that.
This report probably documents in the neighborhood of $52
billion worth of work. All the States of the Northeast, the
Federal Government, and Amtrak are on this commission
together--and really the report says this is how we could
maximize the use of the corridor. So, for the Northeast
Corridor--and I said it a little bit earlier--it is about the
capital investment that improves the ability for us to raise
revenues.
When you begin to look at the rest of the system, there are
some specific ones that are close to covering our operating
costs. For example, the Auto Train. And then what is next up
the list--and one of the slides that I had on there--you bring
up, if you would, the slide on the most costly services, the
second-to-the-last one, if you can, Rip. And what you will see
there is when you really begin to look at all the services that
we operate, the longer the trip, the longer the mileage, the
lower the ability for us to make that a lower cost because of
the labor cost, because of the time it takes--2 or 3 days, for
example, to get across the country. Those become real
impediments to being able to make an improvement.
I think what we see there is we see a huge investment that
is being made by the freight rail industry to really allow us
to operate at a speed up to 79 miles an hour. But it doesn't
give us the ability to have a business model that makes money.
Mr. Massie. Given the infrastructure you have--I know we
would all rather have some improvements--but focusing above the
rails, I know you have said you would like to run Amtrak more
like a business. And recognizing that it is not a business, it
is actually a Government, you know, subsidized organization,
what are some of the things you would do if you were running it
like a business that you can't do right now? And please focus
above the rails. Thank you.
Mr. Boardman. Stop coming to hearings.
[Laughter.]
Mr. Massie. That is not an option.
Mr. Boardman. I understand. What we really do, I think,
is--and I think the reality here today is that Amtrak has been
given many paths to go down over the years, whether it is from
one Congress after another, or one administration and where
they want us to go, all those different intersections.
And I know you came in a little bit late, I don't know if
you were here for my full presentation or not, but what I
really tried to talk about is the place that Amtrak inhabits is
the intersection of all those Congresses, the administrations,
the DOTs, the labor unions, the freight railroads, all the
supporters. And what you really find is that Amtrak never can
be a private industry in the way that some private industry is,
although I don't think Mr. Hamberger really has the opportunity
to be that way today, either.
But what we really have is an inability for us to grow
anything because of a starvation of capital. For example, on
any of our routes that you see out there, we can't replace
equipment because there is not sufficient income to replace
that equipment.
Mr. Massie. Thank you. My time is expired. Yes?
Mr. Nadler. What was the name of that document that Mr.
Boardman referred to?
Mr. Boardman. It is called the ``Critical Infrastructure
Needs on the Northeast Corridor,'' Jerry, and it was published
in January of 2013. And this committee, subcommittee, should
have in your office a copy of this, along with our strategic
plan, the vision for the high-speed rail, and the history of
1971 to 1979's long distance system.
Mr. Nadler. Thank you, thank you.
Mr. Massie. Would you like to enter that as part of the
record, or----
Mrs. Napolitano. Request for the copy to----
Mr. Nadler. Sure, why not?
Mr. Massie. Without objection?
[No response.]
Mr. Massie. So ordered.
[The report entitled ``Critical Infrastructure Needs on the
Northeast Corridor'' can be found online at http://www.nec-
commission.com/wp-content/uploads/2013/01/
necc_cin_20130123.pdf.]
Mr. Massie. I now yield 5 minutes to Mrs. Napolitano of
California. Thank you.
Mrs. Napolitano. Thank you, Mr. Chair. And this question is
for all witnesses. This has to do with the quiet zones,
something that is very key to my district, having--in my prior
district, having most of the Alameda Corridor going through it,
so 54 grade crossings and all that good stuff. And I am still
hoping that maybe the railroads will increase their funding
assistance to those grade separations, because it is the
national corridor--the corridor of national significance for
rail delivery of goods to the rest of the Nation.
They are expensive. One of my cities had it installed
several years ago, Pomona. And the train traffic and noise has
abated in that area. Now I have two other cities who are
looking at it. There is two trains of thoughts in the
community. One, constituents say, ``Well, it is the constant
noise of horns,'' especially if it is in the middle of a
business district, or even a city compound. And they want maybe
additional signs, gates, infrastructure to create those quiet
areas.
But then there is the other component of the family saying,
``Well, it is a safety issue,'' with children that have to
cross. As you well know, in California streets divide cities.
It isn't the long stretches of emptiness.
So, part of what I would like to ask is, what is your
opinion of those zones? And how can we bring the cost of those
zones down so that cities may be able to access? And are there
programs that you know of? What about the safety issues? And to
that I will also add you have a volunteer group in the railroad
of information to schools by volunteers. And I would like to
know eventually in writing to this committee of where are we at
with that. OK? Anybody.
Mr. Boardman. You guys want to go first? Well, I will go,
then, because I was the FRA Administrator that was in place
when we put the horn rule back in, if you remember that. Now I
am volunteering that for the lightening rod that it takes.
But what has happened to us since is we have had a great
growth in the number of, even now, the number of trespass
deaths, crossing deaths. And we are very concerned, as an
industry today, about those growing deaths.
Mrs. Napolitano. Are you talking about the right-of-way?
Mr. Boardman. Yes.
Mrs. Napolitano. Which is where the volunteer group would
come in and teach those in the area to be able to be careful,
and instruct the locals about it. But that is where we don't
know where you are at with that volunteer group.
Mr. Boardman. We have--that is the Operation Lifesaver
group. And I just put our chief of police on that Lifesaver
group with the specific request and direction to look for ways
to reduce these trespass incidents and also the crossing
incidents. And I am beginning to work right now with North
Carolina, because they have been a leader in sealed corridors
that make improvements for this, for safety across the country,
to adapt the kinds of things that you are looking at today in
California to try to prevent the incursion into the crossings.
But part of the problem today is the same thing we are
having in every mode and in every place, and that is the
distractions that occur by listening to your iPod, being on the
tracks, walking. We had a recent CNN clip----
Mrs. Napolitano. Which, again, sir, going back to the
original intent, is to be able to educate the public and the
children in the schools and the families about what causes
accidents.
Mr. Boardman. That is correct. But you also need to let
people know that you are there with the train. And that was
where the horn rule came in. It took 11 years to get it done.
Mrs. Napolitano. Right.
Mr. Boardman. It was the first thing that came out when I
was the FRA Administrator. They were ready to go forward with
it, and there was a lobbying effort to stop me from doing that.
Mrs. Napolitano. Right. It is only in certain areas, sir,
not just--and I am talking about downtown areas, where there is
a need to be able to protect the community, protect the
business, protect City Hall. I have been here at meetings with
City Hall, and there is a train going by, honking, while they
are trying to talk openly. So there are things we need to
mitigate.
Mr. Boardman. I usually find that CSX, whenever I am trying
to give a speech along the CSX, they come along and blow the
horn. But, yes, I understand that. But clearly, today there is
an ability for the quiet zone to exist, but it does cost money
for the community to make that happen.
Mrs. Napolitano. Amount? Do you have an amount, sir, any
more? Is the cost coming down?
Mr. Boardman. It really depends on the specific crossing
that we are talking about.
Mrs. Napolitano. Anybody else?
Mr. Hamberger. If I could just clarify for the record, the
grade crossing accidents and incidents continue to decline. In
fact, I have the preliminary statistics here. For 2012, highway
rail incidents are down 8 percent. The problem is primarily
trespassers or pedestrians in the right of way.
Mrs. Napolitano. Understood. My time is up, Mr. Hamberger.
May I ask that you reply in writing on that issue?
Mr. Hamberger. Yes ma'am.
Mrs. Napolitano. And also on the issue of you have created
a senior executive level position. When, where, and how? We
haven't heard any more information on that. And with that,
please would like to have a response on that.
Mr. Hamberger. Yes ma'am.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Denham [presiding]. Thank you. And we will be having a
second round of questions. I will lead that off. I would like
to switch a little bit to labor, starting with Mr. Hamberger.
How important is labor to your industry? And what are some
of the ways you believe the industry can grow jobs over the
next decade?
Mr. Hamberger. Well, as I mentioned earlier, we have and
are blessed with a very professional, very well-trained labor
force. The last number I saw was that the average tenure of our
employee base is 13 years. We are faced with a major
generational shift, however. Last year it was 15,000 new
employees needed to be hired, to a great extent because of
retirements. We are projecting hiring 11,000 new employees this
year. But in 2011 we thought it would be 15,000 and it turned
out to be 20,000.
So, what we are hoping is that we can continue to recruit
based on the same level of commitment. Once people join our
industry, they do stay with it. As James Stem said in his
opening statement, it is a career choice, not just a job. We
are doing everything we can through job fairs to let people
know that those jobs are out there. We hope to grow, obviously,
the size of the employee base by growing the industry itself.
Mr. Denham. Thank you. And, Mr. Stem, have members of the
UTU been generally satisfied with their association with
Amtrak?
Mr. Stem. Yes, sir. We not only support Amtrak--that is a
historic statement--I can say--and this is not a promotion of
him, personally--Mr. Boardman and his staff have brought a new
level of credibility and stability to Amtrak. And the
relationship that Mr. Boardman has established with this
committee, including the former chairman, is a direct
relationship--a direct indication that Mr. Boardman has been
good for Amtrak, has been good for our employees.
Mr. Denham. Thank you. That is good to hear. How about
freight rail? How about Mr. Hamberger?
[Pause.]
[Laughter.]
Mr. Hamberger. You had to go there.
Mr. Denham. This is--again, we are trying to get everything
out this first hearing. We figure we would----
Mr. Stem. Well, I hate not to give you the controversy that
you are seeking, Mr. Denham, but labor has an agreement with
our freight railroads. It lasts through the mid-2016 range. We
have invested in many different types of partnerships with the
freight industry. Mr. Hamberger has helped with that
cooperation and that relationship himself, personally.
And the way that we think we are going to increase
employment in the industry is to utilize the industry as this
committed intends. We grow the industry, we grow the
opportunity.
If we had a national transportation policy, there is no
doubt in my mind, there are many people in this room that have
been promoting a national transportation policy for decades.
And if we had a national transportation policy, the utilization
of our fuel resources would be given much more credibility than
it is today. We would not be having the debate about highway
congestion and truck size and truck weights and the size of
intermodal containers if we had that national transportation
policy.
So, I personally believe and agree with many people on this
committee, that we are on the verge of a rail renaissance. And
that is good public policy for this Nation.
Mr. Denham. Absolutely. Thank you. Mr. Michaud?
Mr. Michaud. Thank you very much, Mr. Chairman, and thank
you for allowing for questions to be submitted for the record,
because I think that is very important. As we heard Mr.
Hamberger actually talk to--respond to Mr. Walz's question when
you were not in the room, I never talked about truck size and
weight. It was just truck weight. There are two different
issues.
You also had mentioned the fact that you are being
subsidized. Actually, in the bill that is being--bipartisan
bill that is being supported, it actually increases the fee
because of damage for the bridges. So there are two different
issues here, Mr. Chairman. And I think it is important that we
do not try to mix those questions, issues, because it is being
paid for and it allows the States to decide, because every
State is different. It is not mandating that the States have to
go with that higher weight. Because each State is different.
Because in Maine we do have a pilot program for 20 years
because of the problem of trucks going down into cities. That
was a huge safety issue, a huge problem. So I think States
should have the flexibility to decide, and the option to
decide.
My question, actually, is for Mr. Stem. In your prepared
testimony you indicated that all transportation, particularly
the Bakken fields in North Dakota, has been a boon for the
freight rail. At the same time you indicated your concerns that
possible adjustment in truck weight laws would somehow result
in more trucks on the road. Is that correct?
Mr. Stem. Yes, sir. Both of those statements are included
in my testimony that I submitted.
Mr. Michaud. OK. So let me ask you this question. Are you
aware what the truck weight limits hauling oil to your railroad
terminals near the field is? Do you know what the truck weight
limit is?
Mr. Stem. No, sir. I can honestly say I am not aware of
that.
Mr. Michaud. OK. Well, it is over 105,000 pounds. So, under
your scenario, if you go to the 80,000 limit, then actually you
would be forcing more trucks onto the roads. And that is a
concern that I have, is when I hear the discussion about safety
issues, about who is subsidizing who, it depends on what State
you are in. So under that very scenario, we would actually be
increasing more trucks in that particular State. And that is a
big concern that I have. And I believe strongly in freight. I
come from the manufacturing sector, in a paper mill. So I know
how important freight is. But I also know how important it is
to have different options available. And what I have seen,
quite frankly, in Maine, is because of the unreliability of
freight rail, manufacturers are having to go to trucks. They
don't want to, but they have to go there because of the
unreliability of freight. And that is very concerning. And I do
believe that we have to have the options.
And on the rail, I believe one of the reasons why they are
so opposed to increasing the weight limit is because they do
not want to have that additional pressure to offer more
competitive rates, or have to focus on reliability. And not all
rail lines are at fault, but there are some that are terrible
in that regards. And I think it is important that we focus on
those particular issues.
And if you go right back to the report that I was
questioning Mr. Hamberger earlier that was done in 2010, it is
contradictory, when you look at his statements, as far as it is
very clear in this report that if rail has more competitive
rates, they are more reliable, then actually, the trucking
industry will lose, as far as overall customers. So I think
that is very important. And I will be submitting questions, Mr.
Chairman, for the record.
And hopefully we can get answers to those specific
questions, rather than trying to lump everything together,
because there is a different issue with truck weight and size.
I am not talking about the size. Mine is primarily the rates,
allowing the States the option to deal with that on their own,
if they would like. And I think it is also disconcerting when I
hear people say, ``Well, you can't do it because it is going to
allow more trucks on the road,'' when actually those who are
speaking the loudest, they already have a much higher weight.
This is a safety issue, it is an environmental issue, it is an
economic issue. And I think it is very important that we look
at it as that, and not be afraid to work out on compromises
which are extremely important.
And I see my time has run out, Mr. Chairman, so I want to
thank you for allowing us to submit questions for the record,
because I will have plenty of questions to actually get at the
very issue of weight. Not the size issue, but the weight issue.
And there have been plenty of studies done in the past from
Department of Transportation, not only at the Federal level but
also at the State level, that--but would be interested in
making those public, as well. So thank you very much, and yield
back.
Mr. Stem. May I offer a brief response to the question?
Mr. Denham. I will allow it, Mr. Stem.
Mr. Stem. Mr. Michaud, thank you for the question. The--my
inclusion of the mention of the Bakken oil field mobile
pipeline was an indication of the flexibility of the industry
dealing with the current needs of our industrial movement
around the country. I was not aware that an oil tanker could
leave Williston, North Dakota, weighing 105,000 pounds and
deliver that oil to a refinery in Philadelphia, Los Angeles, or
in Houston. I was not aware of that. That was never the point
of that comment.
My comment about truck size and truck weights also included
a concern that the size of the truck would soon surpass the
allowable international interchange, so that if the truck gets
so large you can no longer load it on a ship to go overseas. So
then you would start another problem of having multisized
containers available. But I will be glad to provide written
response to that.
Mr. Denham. Mr. Massie?
Mr. Massie. Mr. Stem, what role can the United
Transportation Union play in reducing costs at Amtrak and at
freight rail?
Mr. Stem. Mr. Massie, thank you for the opportunity. We are
participating in that now. Cost reductions and being cost
effective are part of what we do. Our agreements that we have,
both with Amtrak and with the freight railroads, provide
economic viability for them.
If you will check the freight railroad stock reports--and I
am a stockowner--you will find that our freight railroads are
doing very well, largely because of the workforce that they
have that is very professional that is actually working for a
mere pittance.
Mr. Massie. What else can you do, though? Are there any
plans for helping these gentlemen reduce costs?
Mr. Stem. Well, increased productivity constantly is on the
table any time you talk about career opportunities. That would
include pay and benefits. We are always open to productivity
improvements.
Technology, along with downsizing of the industry, has
significantly reduced employees. As I mentioned before, we have
fewer than 50 percent of the employees moving--compared to
1980, moving twice as many railcars around the country today.
By any measure, freight and passenger rail employees--and that
includes the maintenance employees--are the most productive
members of the workforce that we have in this country.
Mr. Hamberger. If I might add, Mr. Massie?
Mr. Massie. Please.
Mr. Hamberger. It is not my role, thank goodness, to
negotiate the national handling contracts with the unions. But
in this past round, as has been, I think, the historical norm,
UTU reached a voluntary agreement. They were the first to reach
a voluntary agreement with the freight railroads addressing
pay, health care, and work rules. And so have most of the other
unions all come forward with an air of trying to reach an
agreement. So just like that to be on the record for Mr. Stem.
Mr. Stem. Thank you, Mr. Hamberger. And, Mr. Massie, to
translate that into a direct response to your question, Mr.
Hamberger is correct. We did reach a voluntary agreement, which
means that the railroads and the employees agreed on a long-
term package of continued employment, continuation of progress
for the industry. That included many productivity improvements.
Mr. Massie. Thank you very much. Next question is for Mr.
Boardman. How does and can Amtrak maximize its real estate
assets around the train stations and development to create
additional revenue streams for Amtrak? Are there any creative
ways to create more revenue so you don't have to come here and
testify?
Mr. Boardman. We are actually doing that now, especially
along the Northeast Corridor. We have a plan for the Washington
Union Station, an unfunded plan. We have a plan for Moynihan
Station in New York City. It is a partly funded plan. We have a
lot of real estate developers that are looking at and pushing
us, especially in New York City, for access to the folks that
we have, so they can build their real estate development. We
have an interest by the 30th Street Station in Philadelphia, on
a regular basis, for increases in real estate development and
other activity. And we have it at Baltimore, and any station
that we really own--Chicago being another one.
We actually--when we look at what we cover, in terms of our
cost, we cover about 79 or 80 percent of our operating costs
through the fare box. And yet we cover about 88 percent of our
costs with all of our revenue. Most of that additional revenue
is real estate. We have done--and we did for the last
chairman--we looked at all of the real estate available along
the Northeast Corridor. And most of it is not developable real
estate, from the standpoint of creating revenues for us. Most
of it has to do with supporting the operations, whether it be
some of the freight operations that operate along the Northeast
Corridor, or our own operation.
Mr. Massie. But is it safe to say you are maximizing
opportunities for things in those locations? For instance, for
cell tower leases and what not?
Mr. Boardman. Yes. We have--when we find a place that we
can do that safely, and it is a benefit for Amtrak, we
oftentimes have to put it out for competition for others that
might be interested for it. But yes, we are doing that.
Mr. Massie. Thank you very much. My time has expired.
Mr. Denham. Thank you. Mrs. Napolitano.
Mrs. Napolitano. Thank you, Mr. Chair. I am sorry, I may
not have made myself clear on the senior executive level
position for Amtrak that was in the recent reorganization. I
would like to know in writing, and will share it with the
committee. Is it in place?
And, of course, can Amtrak make sure that the State-
supported services program will continue to thrive? OK?
Mr. Boardman. You want that back in writing?
Mrs. Napolitano. Yes, please.
Mr. Boardman. Yes, ma'am.
Mrs. Napolitano. Because that is going to take a little
more time, and I don't want to spend that much time on it.
In California you have three of the most used services,
ridership records. And the nine records--Amtrak has set nine
ridership records in the past 10 years. You have done
magnificent. You have decreased your operating needs in half
since 2004 and cut your debt in half since 2002. But what other
improvements do you have in mind, and how can we help you get
there, to be able to increase and get people off the road?
And talking about the impact on roads, the weight damages
the infrastructure of the roads. And then the citizens have to
end up paying for that, the States. So, if you would, please.
Mr. Boardman. Thank you, Congresswoman. First of all, the
investment in the Northeast Corridor infrastructure--and we
have already got this in the record, so I won't bring it back
again right this minute--but if those investments are made, our
revenues will go up substantially, because we will have a
greater capacity.
The PRIIA legislation also has required not just the State-
supported services, which I will get back to you in writing,
but we also have an obligation to begin to look at what the
commuter operators along the Northeast Corridor really provide
in covering some of the cost of the capital on the corridor and
the capacity that they take. And that is ongoing right now. We
are making those kinds of improvements.
We work pretty solidly with operating agreements with all
of the freight railroads. That is also coming due, and we are
in the middle of talking and listening, quite frankly, to the
freight railroads today about what they see for reauthorization
for the future. So we are identifying the kinds of things that
we think are necessary for us to make the kinds of improvements
that are being looked for, for on-time performance and
improvement for the investment and our fleet that is going to
be necessary for the future.
Mrs. Napolitano. And also the investment in the
infrastructure, ensuring that it is going to be able to handle
the additional capacity. Am I correct?
Mr. Boardman. Yes, that is correct. That is one of the
things that the freight railroads are particularly interested
in. With the investments they are making in capacity, they want
to know what that means in terms of what Amtrak might want for
the future. And that becomes a rub, just kind of like the truck
weight issue for the freight railroads.
Mrs. Napolitano. Well, I would like to hear Mr. Hamberger's
side of being able to allow some of the transit, Amtrak
transit, on rail lines. I know that it doesn't pay off as well.
Mr. Hamberger. Well, as you know, under the statute, Amtrak
has a right of access for avoidable cost. And your point is
exactly right on. Avoidable cost is not fully allocated cost.
But that is the deal that was struck back in 1970 and 1972, so
that we are good partners, I think, with Amtrak.
And, of course, part of that deal also is preferential
dispatching, which is also part of the way we operate the
railroad.
Mr. Boardman. And we fight about that regularly.
Mr. Hamberger. Yes, yes.
Mrs. Napolitano. Well, with the new technology, will it
make it easier to be able to align both?
Mr. Boardman. Absolutely. As a matter of fact, part of the
discussion we really have today with the new technology we are
using--and we have a much better idea today with WiFi and
eTicketing where we are in terms of the schedule itself. And so
do the dispatchers.
And part of the discussions we have begun to have with the
freight railroads is they want to simplify that, as well. They
want to find a way to get us on their railroad and off their
railroad as quickly as they can. Because in some ways, some of
them really believe that Amtrak has kind of become the canary
in the coal mine. If they can't move us, then they have a
problem with their railroad.
Mrs. Napolitano. Well, there had been at one point several
derailments in my area, or at least close to my area, and I got
into that very heavily several years ago. And I am hoping that
the new technology has been able to allow the railroads, as
well as Amtrak, to understand how critical the replacement of--
or actually, the identification of rail that may have hairline
cracks or anything that is really critical to public safety,
both on the rail and in Amtrak.
So, with that, I thank you, Mr. Chair----
Mr. Hamberger. As I recall, it is a broken angle bar that--
--
Mrs. Napolitano. I still haven't seen that, sir.
Mr. Hamberger. Yes, many years ago. Actually using laser
and sonar, we now have reduced to a great extent the number of
accidents caused by broken rail, as well as broken wheels and
broken axles. So----
Mrs. Napolitano. We would love to have a report on that,
Mr. Hamberger.
Mr. Hamberger. I would be delighted to do that. Thank you.
[The Association of American Railroads inserted the
following information for the record:]
The railroad industry has made dramatic progress in
reducing the number of broken rail derailments. In
fact, broken rail train accidents on Class I main line
track have declined 62 percent since 2004.
This progress begins with improved manufacturing
processes. The manufacturers of steel rails have
continued to improve the overall quality of the rails
to reduce the potential of internal rail defects.
Next, in addition to improved rail quality, railroads
have contributed significantly to reducing the
potential for defective rails by increasing the amount
of continuous welded rail (CWR) installed throughout
the North American railroad network. Most main line
trackage and a significant percentage of secondary and
yard trackage is composed of welded rail rather than
jointed rail. This has led to a dramatic reduction in
the number of rail joints which could in turn result in
rail defects.
Additionally, railroads attempt to mitigate rail
defects and service failures through regular rail
inspections. A general visual inspection of the rail is
usually performed several times per week over most main
line trackage; however, a visual inspection by a highly
qualified track inspector cannot detect all of the
internal and external rail defects. Thus, ultrasonic
testing is performed by railroads on a routine basis.
The ultrasonic method of testing rails in service
attempts to target a wide variety of internal and
external rail defects, including at least:
LTransverse defects
LDetail fractures
LEngine burn fractures
LCompound fissures
LDefective rail end welding
LBolt hole cracks
LVertical split heads
LHorizontal split heads
LHead and web separations
LPiped rail
The industry will continue to do all it can to improve
safety by reducing rail defect accidents even further.
Mrs. Napolitano. Thank you, sir. Thank you, Mr. Chair.
Mr. Denham. I would like the committee to notice that we
are going to finish exactly right on time today. It is a good
way to start our first hearing. And certainly want to thank,
once again, all of our witnesses here today. Certainly been
informative for a lot of new Members. Appreciate all of the
supplemental material that each of you has provided. And, as
well, we are looking forward to having more questions answered
in writing.
At this time I would like to ask unanimous consent that the
record of today's hearing remain open until such time as our
witnesses have provided answers to all of the questions that
may be submitted to them in writing, and unanimous consent that
the record remain open for 15 days for any additional comments
and information submitted by Members or witnesses to be
included in the record of today's hearing.
[No response.]
Mr. Denham. Without objection, so ordered.
I would like to thank again each of our witnesses, again,
for their testimony.
And if no other Members have anything to add, the
subcommittee stands adjourned.
[Whereupon, at 12:59 p.m., the subcommittee was adjourned.]