[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
HOW SOUTHERN CALIFORNIA FREIGHT TRANSPORTATION
CHALLENGES IMPACT THE NATION
=======================================================================
(113-21)
FIELD HEARING
BEFORE THE
PANEL ON
21st-CENTURY FREIGHT TRANSPORTATION
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
FIRST SESSION
__________
MAY 30, 2013 (San Bernardino, California)
__________
Printed for the use of the
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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
Panel on 21st-Century Freight Transportation
JOHN J. DUNCAN, Jr., Tennessee, Chairman
GARY G. MILLER, California JERROLD NADLER, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas CORRINE BROWN, Florida
RICHARD L. HANNA, New York DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida ALBIO SIRES, New Jersey
MARKWAYNE MULLIN, Oklahoma JANICE HAHN, California
CONTENTS
Page
Summary of Subject Matter........................................ iv
TESTIMONY
Kome Ajise, Deputy Director for Planning and Modal Programs,
California Department of Transportation........................ 5
Hasan Ikhrata, Executive Director, Southern California
Association of Governments..................................... 5
Marnie O'Brien Primmer, Executive Director, Mobility 21.......... 5
Scott Moore, Vice President for Public Affairs, Union Pacific
Railroad....................................................... 5
Michael K. Fox, Chief Executive Officer, Fox Transportation...... 5
Rick Richmond, Former Chief Executive Officer, Alameda Corridor-
East Construction Authority.................................... 5
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Kome Ajise....................................................... 37
Hasan Ikhrata.................................................... 45
Marnie O'Brien Primmer........................................... 55
Scott Moore...................................................... 58
Michael K. Fox................................................... 64
Rick Richmond.................................................... 68
SUBMISSIONS FOR THE RECORD
John S. Halikowski, Director, Arizona Department of
Transportation, written testimony.............................. 73
Anne Mayer, Executive Director, Riverside County Transportation
Commission, written testimony.................................. 85
Janice Rutherford, President, San Bernardino Associated
Governments, letter to Hon. John J. Duncan, Jr., a
Representative in Congress from the State of Tennessee, May 24,
2013........................................................... 93
Barry R. Wallerstein, D.Env., Executive Officer, South Coast Air
Quality Management District, letter to Hon. John J. Duncan,
Jr., a Representative in Congress from the State of Tennessee,
June 7, 2013................................................... 96
[GRAPHIC] [TIFF OMITTED] 81260.001
[GRAPHIC] [TIFF OMITTED] 81260.002
[GRAPHIC] [TIFF OMITTED] 81260.003
[GRAPHIC] [TIFF OMITTED] 81260.004
HOW SOUTHERN CALIFORNIA FREIGHT TRANSPORTATION CHALLENGES IMPACT THE
NATION
----------
THURSDAY, MAY 30, 2013
House of Representatives,
Panel on 21st-Century Freight Transportation,
Committee on Transportation and Infrastructure,
Washington, DC.
The panel met, pursuant to call, at 1:30 p.m., at 1170 W.
3rd Street, San Bernardino, California, Hon. John J. Duncan,
Jr. (Chairman of the panel) presiding.
Mr. Duncan. The panel will please come to order. Good
afternoon, and I want to welcome everyone to this field hearing
before the Transportation and Infrastructure Committee's Panel
on 21st-Century Freight Transportation.
Before we begin, the first order of business is to ask
unanimous consent that Representative Grace Napolitano be
permitted to join the panel for today's hearing. Hearing no
objection, that will be so ordered.
This special panel was created by Chairman Shuster and
Ranking Member Rahall of the Transportation and Infrastructure
Committee to examine the current state of freight
transportation in the United States and how improving freight
transportation can strengthen the United States economy.
We have traveled to southern California because this region
is one of the most important trade gateways in the entire
country. There are many facilities in this area, as all of you
know, that are critical to the efficient movement of goods into
and out of and around the Nation. While we have the best system
in the world, we always have to seek to try to do better, do
more, and improve it constantly.
The freight system in this region is truly multimodal,
incorporating marine ports, border crossings, interstate
highways, multiple Class I railroads, numerous State highway
routes, air cargo facilities, intermodal facilities, and
distribution and warehouse clusters. More than 43 percent of
the Nation's containerized imports enter the country through
southern California and go all over the place. We heard
yesterday that coming into the Ports of Long Beach and Los
Angeles, that 75 percent of those goods go out to all across
the Nation. They make their way to every State, every
congressional district, supporting billions of dollars of local
economic activity, and millions of jobs. The southern
California freight network tangibly impacts the lives of
customers all across this Nation.
We have an excellent panel of witnesses before us today. I
am confident that they will be able to help us understand the
unique freight transportation challenges facing southern
California and how those issues impact the rest of the Nation.
Let me just add a few things. I am in my 25th year in the
Congress. I have participated in field hearings on all sorts of
topics all across this country. Ordinarily, any committee in
the Congress is lucky to have two or three Members travel and
take time out from their districts or their family time to come
participate in extra field hearings over and above what we do
in Washington. I am amazed that 10 of the 11 Members appointed
to this panel came to participate in our activities here in
southern California.
And then we have had local representation. Congressman
Lowenthal has participated. Congresswoman Napolitano is with us
today. I know Members of Congress sometimes are criticized. But
I can tell you, to stay in office with just a 2-year term, you
have to work nights and weekends and holidays. And I can also
tell you that every Member of Congress, if they want to stay in
office, they have to spend a lot of time at home in their
districts, and all of these Members have taken time out that
they could have been or should have been in their districts, or
even perhaps on vacation. I think Congresswoman Hahn rearranged
a vacation that she had planned, and we certainly appreciate
that. These are dedicated Members.
We are trying to learn. We want to hear specific
suggestions. We hope that you will come up with some specific
ideas or suggestions for things that need to be done, ways to
make things better.
I am going to introduce the witnesses in just a few
minutes. First, before I call on the ranking member, Mr.
Nadler, yesterday we were in Congresswoman Hahn's district and
I had her welcome the group to her district, and I would like
to call on my friend, Congressman Miller, to make whatever
comments he wishes to make at this point.
Mr. Miller of California. I would like to welcome you to
the 31st Congressional District, known as the Inland Empire. As
we sat at the harbor yesterday, we looked at the containers,
where 80 percent were coming through my district, either to
stay here or just pass through, and the impact is dramatic.
I would like to thank SANBAG, Ray Wolfe and Wendy Strack
for their hospitality here. They put this event on. This is
very last moment, and we appreciate that opportunity.
I remember back in 1999, Mr. Chairman, the first field
hearing you had was in my district also, at Ontario Airport.
That was the 41st Congressional District. Now your first field
hearing again is in the 31st Congressional District. So I want
to welcome you and my colleagues.
It is important that you see the impact that we face in
southern California from the amount of cargo that is shipped
through our areas and the needs we have to deal with air
pollution and the quality of life and the freeway traffic we
have.
And I have some good friends, former manager of the L.A.
Dodgers, Fred Claire, is here.
Stand up, Fred.
This is our Dodger buddy here.
[Applause.]
Mr. Miller of California. I have some good friends,
Supervisor Ovitt here, some other Members, friends of mine, and
just welcome to the 31st Congressional District.
Mr. Duncan. Well, I can't resist telling you this. I spent
5\1/2\ years as batboy for the AA Knoxville Smokies baseball
team.
[Laughter.]
Mr. Duncan. I think I should be in Cooperstown, because I
don't think anybody was ever a batboy that long. But back in
those days, minor league baseball was really minor league, and
I did it the first season and a half for free and the next four
for $1.50 a game. They couldn't get anybody else to do it that
cheaply.
But we had a dinner in my district a year and a half ago,
and Pete Rose, the famous baseball player, sat next to me at
the head table. He was the main speaker. I told him I had been
batboy for the Knoxville Smokies when he played for the Macon
Peaches, and I was probably 12 or 13 at the time. But when he
got up to speak, he said, Congressman Duncan, he said I wish
you were a Senator. But then he said, but you were 9 years old
when I played at Macon? He said, what the hell happened to you?
He said, I thought I was sitting next to Colonel Sanders up
here.
[Laughter.]
Mr. Duncan. I still love baseball.
[Laughter.]
Mr. Duncan. Let me just say one other thing before I call
on Mr. Nadler. People get the wrong idea. They think we all
hate each other in Washington, and that is so untrue because
most of us get along really well with each other. That is
especially true on the Transportation and Infrastructure
Committee, because we frequently say that there is no such
thing as a Republican road or a Democratic road or various
things. So even though I am sometimes referred to as the
chairman of this panel, I consider myself to be the Republican
cochair, and Jerry Nadler from New York to be the Democratic
cochair. So I consider him of equal rank to me, and I would
like to call on him at this time.
[Applause.]
Mr. Nadler. I thank you for your graciousness, Mr.
Chairman. Mr. Chairman, thank you for yielding the time.
Last month, at the first hearing of the Panel on 21st-
Century Freight Transportation of the House Committee on
Transportation and Infrastructure----
Mr. Duncan. It is a New York phone.
[Laughter.]
Mr. Nadler [continuing]. I noted that we needed to examine
freight challenges across the entire supply chain and develop
multimodal freight solutions. Mr. Chairman, thank you for your
leadership in bringing the House Transportation Committee's
Panel on 21st-Century Freight Transportation to southern
California, because we have seen firsthand some of the
challenges and solutions of moving goods through the supply
chain by air, water, rail, and highway.
Yesterday, we toured the Ports of Long Beach and Los
Angeles, the eighth busiest port complex in the world, and
learned of their logistics operations in moving 14 million TEUs
from vessels that get bigger and bigger with each passing year.
Today we saw firsthand how that freight must move from the
ports to the Los Angeles Basin, through the Alameda Corridor,
the Alameda Corridor-East and Colton Crossing to the Inland
Empire and east to the rest of the Nation.
Whether at LAX, the port complex, or the Alameda Corridor
and ACE, a common thread found in each of these meetings is the
critical role that these transportation facilities play in
creating jobs and growing the economy not only in southern
California but of the entire country. Moreover, time and time
again we have heard that the Federal Government plays an
important catalytic role in helping to finance these critical
transportation investments.
Replacing the Gerald Desmond Bridge, which we are told
carries 15 percent of all the freight in the country, with its
crumbling concrete and low clearances, with a $1 billion new
span is clearly important to the Port of Long Beach in southern
California, but it is also critically important to goods
movement in the entire country.
Making the highway rail grade crossing investments of the
Alameda Corridor-East project is important to the San Gabriel
Valley, but without this investment traffic delays at crossings
could increase by 300 percent, and that is a grave concern not
only for southern California but to the manufacturers awaiting
parts in Kansas City and elsewhere.
These projects, both of which received large
congressionally directed Projects of National and Regional
Significance funding in 2005, clearly illustrate the catalytic
role that Federal investments can play in financing freight
projects.
Moreover, as we have heard throughout this visit and we
will hear again from our witnesses today, it is extremely
difficult for individual States to dedicate a significant part
of their limited infrastructure investment resources to one of
these high-cost projects because freight does not vote. We have
often said this country is governed by a one-person, one-vote
rule, but not a one-container, one-vote rule, and freight, as a
result, sometimes gets short shrift.
The cost of these projects are extremely high, often in the
billions of dollars, and the benefits are diffuse. Thus, States
are often unwilling to expend their limited Federal and State
resources on these big-ticket investments, especially when
voters are much more interested in seeing ribbon cuttings that
will benefit them directly for things like highways, mass
transit, and commuter rail.
However, the Federal Government can weigh the broader job
creation, economic, environmental and trade export benefits of
these projects. It is for these reasons that I strongly support
providing guaranteed Federal funding and a robust program of
guaranteed Federal funding for the Projects of National and
Regional Significance Program. In addition, we should focus
these investments on freight projects that will greatly benefit
the Nation. It is our opportunity, this special task force, to
give freight a vote. We can be the catalyst to get the economy
moving again and provide for the long-term economic growth of
the Nation.
But we must provide, in the next transportation bill, in my
opinion, and I hope the witnesses will address this, a program
for investments of national and regional significance, and a
well-funded one.
Mr. Chairman, thank you again for leading this enlightening
committee visit, and I look forward to our witnesses'
testimony.
Mr. Duncan. Well, thank you very much.
Before we get to the next person, let me just very quickly
introduce the members of this panel. Most of you or many of you
probably know Congresswoman Janice Hahn, who headed up our
program yesterday.
Congressman Albio Sires from New Jersey.
Congressman Dan Lipinski from Chicago.
Most of you know Congresswoman Grace Napolitano from
southern California.
Congresswoman Corrine Brown from Jacksonville, Florida.
You just heard from Congressman Jerry Nadler.
You know Congressman Gary Miller.
Congressman Richard Hanna from New York, just outside of
Syracuse.
Congressman Markwayne Mullin, who is a very successful
businessman, but also a former rodeo bull rider.
[Laughter.]
Mr. Duncan. So we have a wide variety on this panel.
Our witnesses today. The first witness is Mr. Kome Ajise,
the deputy director for planning and modal programs for the
California Department of Transportation.
The next witness is Mr. Hasan Ikhrata, executive director
of the Southern California Association of Governments.
Ms. Marnie O'Brien Primmer, who is the executive director
of Mobility 21.
Mr. Scott Moore, vice president for public affairs of Union
Pacific Railroad.
Mr. Mike Fox, CEO of Fox Transportation.
And finally, Mr. Rick Richmond, former chief executive
officer of Alameda Corridor-East Construction Authority.
So all of your full statements will be placed in the
record, as is traditional in all hearings. We ask that you
limit your oral presentations to 5 minutes.
And, Mr. Ajise, we will start with you, please.
TESTIMONY OF KOME AJISE, DEPUTY DIRECTOR FOR PLANNING AND MODAL
PROGRAMS, CALIFORNIA DEPARTMENT OF TRANSPORTATION; HASAN
IKHRATA, EXECUTIVE DIRECTOR, SOUTHERN CALIFORNIA ASSOCIATION OF
GOVERNMENTS; MARNIE O'BRIEN PRIMMER, EXECUTIVE DIRECTOR,
MOBILITY 21; SCOTT MOORE, VICE PRESIDENT FOR PUBLIC AFFAIRS,
UNION PACIFIC RAILROAD; MICHAEL K. FOX, CHIEF EXECUTIVE
OFFICER, FOX TRANSPORTATION; AND RICK RICHMOND, FORMER CHIEF
EXECUTIVE OFFICER, ALAMEDA CORRIDOR-EAST CONSTRUCTION AUTHORITY
Mr. Ajise. Thank you very much, Chair Duncan and Ranking
Member Nadler, for coming out here, distinguished panel
members. It is our delight to have you here in California, and
especially in southern California.
We appreciate the opportunity to testify before you. We
feel like it is a recognition of this panel's--the panel's
recognition of the critical nature of southern California's
place in the national freight system is why we are here today,
and we really appreciate that. It is our hope that such
awareness by this panel and the work of this committee will
result in a stronger Federal partnership in developing a
freight movement infrastructure, especially in southern
California.
With the Los Angeles region having the sixth largest
economy in the world, southern California's freight
transportation challenges are indeed the Nation's challenges.
Fortunately, the Nation is exceptionally well served by the
complex and continually improving southern California freight
system. The region's seaports, airports, ports of entry,
railroads, roadways, and intermodal yards, as well as trans-
loading facilities and warehouses not only support the freight
mobility that serves approximately 40 percent of the Nation's
international container shipments, but it also clearly is the
greenest and the cleanest of any part of the national system,
if not on the planet.
This unparalleled freight volume that we have coming
through southern California does indeed present challenges to
the region, but also impacts the Nation. The State of
California and the southern California region have been very
proactive in addressing many of those challenges, resulting in
reduced regional impacts and sustained benefits to the Nation.
There is also a need for a stronger Federal presence, we
believe, and a need for a greater level of Federal fiscal
involvement in addressing the southern California freight
issues as a result. We believe a dedicated source of freight
funding is needed that does not siphon funding from other
transportation funds that are also very important.
As the ninth largest economy in the world, California has
long recognized the need to support the freight industry so
that our economy will continue to be a global leader. In 2007,
the State issued a comprehensive State freight plan known as
the Goods Movement Action Plan. In many respects, we think the
GMAP, or the Goods Movement Action Plan, has been a template
for some of the policies that have come out in MAP-21, and we
are gratified by that.
California's adoption of the Goods Movement Action Plan had
a companion fiscal element that brought new State revenues
through a voter-approved bond process to the table. In 2006,
Prop 1-B bond program devoted $2 billion to the Trade Corridor
Improvement Fund. The bond funds attracted a wide range of
additional private, local, regional and Federal funds,
resulting in a current program of about 69 freight projects
valued at about $6.5 billion, with the majority of those
projects in southern California.
The Trade Corridor Improvement Funds project included seven
seaport projects to the tune of $1.3 billion; six railroad
projects, about half-a-billion of that; about 28 railroad grade
crossing projects, about $2 billion of that; and about 15
highway projects, to the tune of about $1.4 billion.
MAP-21 includes designation of a national priority freight
network that will consist of no more than 30,000 highway miles
nationwide. Our department and some of our regional partners
have analyzed California's highway system to identify which
routes carry the highest truck volumes. One of the significant
challenges we have in southern California is that some of the
most critical high-volume routes are not interstate highways.
They are State highways that may be overlooked as part of the
national freight policy consideration because the data that we
are using to determine those are not typically ones that are
collected by the Federal Highway Administration, especially
under the freight analysis framework.
Of particular concern to us in southern California are
State Routes 57, 58, 60 and 91, among many others. These are
high-volume State routes that are not interstates that do
indeed carry and shoulder a lot of the freight volume in
southern California, and most of this volume, as the chairman
has stated, are goods moving out of the State to other parts of
the country.
In a related matter, the vast majority of the containerized
cargo that comes into and leaves the ports are packed into
standard 20- or 40-foot marine containers. Many of these
containers arrive in other ports, are loaded directly onto
trains at the ports and are hauled to locations throughout the
country. Many more of these containers are transported by truck
to trans-loading facilities where they are unloaded and
repacked into 53-foot containers that are put on tractor rigs
and then trucked to distant locations. The truck trips between
the ports and these trans-loading facilities are not counted.
So these are also elements of the system that are left out.
In conclusion, based on the MAP-21 guidelines, the State
has formed a Freight Advisory Committee to assist us in
developing a freight mobility plan and to provide advice to us.
This committee cuts across a large cross-section, and we expect
that that group will have more to bring to the table in freight
conversations.
Mr. Duncan. Thank you very much.
Mr. Ikhrata?
Mr. Ikhrata. Chairman Duncan, Congressman Nadler and
Congressman Miller, distinguished members of the panel, thank
you for being here. Thank you for coming to southern
California. It is a privilege to be in front of you testifying
about an issue that is very important to 191 cities, 6
counties, and over 18 million residents that my organization
represents.
I am sure you heard a lot of the things over the past few
days about how important goods movement is to southern
California. What I am going to do today is present to you some
of the challenges and opportunities and some of the
recommendations as you work on your panel's recommendations.
Our board, which represents 191 cities--our president, Greg
Pettis, is here, and some of our board members are here today--
appreciate very much your work on MAP-21, the bipartisan manner
in which MAP-21 was enacted. We think that work set the stage
for your work now on this important issue.
Our agency, along with other agencies, has worked over the
last 20 years, as Congresswoman Hahn would know in her time at
SCAG, to highlight that goods movement is an important issue.
The issues we put on the table are issues that are national in
nature, and not only specific to southern California. You
mentioned, Chairman, 43 percent of the containers move through
our largest port complex. We have the fifth largest airport
that handles about $70 billion of high-value goods. We have
Port Hueneme in Ventura County, which handled about $7 billion
in 2012 of automobile and agricultural product. We have border
crossings with our largest trading partner, Mexico. All of this
together creates more than 60,000 jobs directly, 1.6 million
jobs related, and over $30 billion local, State, and Federal
revenues. So this is not small change when we talk about our
ports.
I just want you to know that in 2012, our ports handled
about 12 million 20-foot equivalent units--TEUs. Any forecast
you look at says that will grow--there is a national forecast
which says this number is going to go to 60 million in 2020, or
our Ports Capacity Forecast, which says we are going to have 42
million containers shipped through the ports by 2035. Add to
that the fact that southern California is the third largest
manufacturing center in the United States. It is only after the
State of California and the State of Texas. All of this says
that we are not only shipping the goods to the rest of the
Nation, but we need the infrastructure to make sure that these
goods continue to move in a very safe manner.
In the last 20 years, working with our partners,
stakeholders, public and private, we put together a regional
transportation plan, a freight regional transportation plan
that was approved by the Federal Government and the State
government, that was applauded by our partners, environmental
groups, private sector, public sector, our transportation
agencies. This plan identified $60 billion worth of investments
needed to make sure southern California will continue to be the
gateway for the rest of the Nation.
It is important for any discussion--and I am sure you hear
this, and you probably don't want to hear it anymore--but a
Federal role in this important issue for our Nation is
paramount. We cannot continue to slip. When you look at reports
that rank our Nation's infrastructure 17th, down from 7th just
5 years ago, I am sure you don't want that. We want to be
number 1. We deserve to be number 1.
Therefore, there is definitely a Federal role that our
board feels very strongly that you should play, and oftentimes
you probably think, oh, they are asking for money. We are not.
We are asking for money, yes, but this is not the Federal role
we are talking about.
Our Nation needs to continue to be competitive globally.
Our Nation's competitiveness depends on how well we do in
providing the infrastructure in this region.
I want to conclude by saying this. First, we all heard
about the Highway Trust Fund and the fact that the Highway
Trust Fund's imbalance has to be dealt with. We can't ignore
it. Very soon we are going to run out of money. Now, there are
all kinds of options--user fees, taxes, whatever options, a
combination of all those options. But as our national leaders,
you want to make sure that you balance that.
Second, a Federal funding source that does not compete with
existing sources is needed for goods movement. I know we don't
have enough money to fund everything, but we also have a role
as a national government to play in making sure we accelerate
project delivery. According to our State Department of
Transportation, a major project right now takes 17 years to
build. We hired six economists, independent economists
throughout southern California that say if we accelerate that
by 5 years, we save billions of dollars, and we create a lot of
jobs in accelerating by just 5 years.
And we appreciate the Federal agencies. We know there are
Federal staff here. We work well with them together. You need
to empower them to do more so we can accelerate the movement
that we talked about.
And lastly, the public expects us to use the dollar wisely,
and one way to use that dollar wisely is to make sure when we
move it, we move it fast, safe. I would ask you to support H.R.
974 that some of the members authored here that puts forth a
freight fund that is competitively handled, not formula driven,
based on competitive grants.
I applaud your hearing today. I appreciate being in front
of you. I am grateful for you to be here, and I will be happy
to answer the questions of this panel. Thank you, Mr. Chairman.
Mr. Duncan. Thank you very much.
Ms. Primmer?
Ms. Primmer. Good afternoon, Mr. Chairman, Mr. Nadler and
Mr. Miller. Thank you and welcome to your district. My name is
Marnie Primmer. I am the executive director of Mobility 21, and
we represent 21 million Americans here in southern California,
about 7 counties, from Ventura all the way down to San Diego
and Imperial. One of our partners is SCAG, and I am very
grateful to hear them championing one of the issues that we
feel is a huge solution for freight, and that is a dedicated
source of funding that is separate and apart from the Highway
Trust Fund that would be used solely for freight purposes.
I have had the opportunity to meet with some of the panel
members on this topic, and it is near and dear to our heart. So
rather than reiterating my written testimony, which I know you
all have, I wanted to focus, as Mr. Nadler requested, on the
solutions for freight with the time that I have left.
While Congress authorized the Projects of National and
Regional Significance, the $500 million that was authorized was
not appropriated. Obviously, that is a huge concern for our
region, and we support fully appropriating the funds that would
be available for the Projects of National and Regional
Significance.
However, we do not view that as enough for the needs of
freight. As you heard Hasan mention, in this region alone we
have $60 billion worth of projects. There are billions of
dollars' worth of projects across the Nation in addition to
that that need to be funded to keep our system globally
competitive, and that is going to require an additional source
of funding beyond those that have already been identified.
Additionally, we are extremely supportive of the expansion
of the TIFIA program and the ability of freight projects to
compete for TIFIA loans. However, that is a financing
mechanism. It is not a funding mechanism, and we would like to
see an additional source of funding dedicated to freight that
would be compiled by the local agencies such as SCAG and our
transportation agencies, our ports, the Alameda Corridor-East
Authority, and others here in southern California who know
exactly what our community needs, and others throughout the
Nation that are doing similar things now.
When you identify that freight network, as Mr. Ajise
mentioned, it needs to be more than just highway lane miles. It
needs to include multimodal facilities like those you have
toured here in southern California over the last couple of
days, but also some that you have not had a chance to visit
yet, from Ventura up to our border crossings down in San Diego.
So there are many other facilities that are worthy of
investment right here in southern California that support trade
in each of your congressional districts.
In addition to that, the dedicated source of funding that
we envision would not be something that goes on ad infinitum.
Once the projects have been funded, we envision that it would
sunset. We would envision that it would be lock-boxed so that
it can only be used for freight. It can't be used for some
library in North Dakota someplace. We want to make sure that
freight gets its due, and I applaud Mr. Nadler for taking a
multimodal approach and all of you for taking time out of your
districts to be here and learn firsthand why southern
California really is the heart of our national freight network.
But there are issues here in southern California that you
have in each of your congressional districts, and that is why
there needs to be a national plan. That is why we all need to
work together to make sure that the freight that starts here
makes it to your district without impacting consumers, without
impacting taxpayers unnecessarily.
Our region has worked together, as Hasan mentioned, in a
bipartisan manner, in a public-private partnership, including
the environmental community, to develop a plan that is ready
and willing to put freight to work right here in southern
California supporting good paying jobs. But we can't do that
without a strong partnership, and I think you all being here
right now is the first step towards that.
Mobility 21, as a nonprofit, has worked with stakeholders
not only here in southern California but elsewhere throughout
the country to really rally around this idea of a separate
dedicated fund for freight, and we look forward to being a
resource to you and your committee staff as you work to do the
recommendations that this committee will be putting forward to
the panel. Thank you.
Mr. Duncan. Very good. Thank you very much.
Mr. Moore?
Mr. Moore. Chairman Duncan, Ranking Member Nadler, and
members of the panel, my name is Scott Moore, vice president,
public affairs, Union Pacific Railroad. I appreciate the
opportunity to summarize my submitted testimony and summarize
our operations in the Western U.S., as well as here in
California.
Union Pacific, 151 years old. But today's railroad operates
in 23 States and operates on just under 32,000 miles of track.
We have 45,000 employees with about a $4.3 billion payroll.
When we talk about investing in infrastructure, our railroad
across the West last year spent about $3.7 billion, this year
will spend about $3.6 billion. To give you an idea of what that
may buy, last year we installed 4.1 million new railroad ties
across our system and replaced over 1,000 miles of track, all
the while continuing to invest in terminal facilities, as well
as in new locomotives.
Here in California, we have over 3,200 miles of track,
making us the largest railroad in the Golden State. We have an
annual payroll of over $430 million, with just under 5,000
employees. In 2012, we had capital spent in the State of
California of $376 million.
Now, our business in California is varied, but certainly
intermodal is key. In our intermodal franchise, there is really
two parts to it. There is the international container traffic,
which you have been seeing out here, which passes through the
west coast ports primarily in 20-, 40-, or 45-foot containers.
The domestic business includes container and trailer traffic
traveling primarily in 53-foot containers. Additionally, less
than truckload and package carriers with time-sensitive
business requirements are also an important part of that
domestic shipment. Union Pacific overall in our system, 54
percent of that intermodal traffic is international, 46 percent
is domestic.
Now, much of this intermodal traffic, of course, flows
through, in and out of the L.A. Basin, and roughly half of
those 5,000 employees in California are based here in southern
California. In our network, we operate 10 intermodal
facilities, four of which are here in the L.A. Basin. Two of
those, our intermodal container transfer facility by the port
and our East L.A. yard, are two of our top-producing intermodal
yards. The four L.A. Basin facilities combined just do over 1
million lifts. This compares to 4 million across our system,
and compares to a second one in Chicago with 1.4 million lifts.
While we have a number of routes into and out of the L.A.
Basin, our main corridor is what we call our Sunset Corridor.
This line runs across Arizona to New Mexico to El Paso. Once in
Texas, that line branches out, where we have the ability to
serve Chicago via Kansas City, Memphis via Dallas, and New
Orleans via southern Texas. We have invested well over $1
billion in the last 10 years, double tracking this line, L.A.
to El Paso, and at the end of last year we were 70 percent
complete.
In addition to investing in track improvements in the L.A.
Basin, we are working to modernize our ICTF facility that I
mentioned. By using advanced and mechanized technology, we can
improve our throughput at that facility, decrease the
footprint, and reduce the level of noise and lighting at the
facility. We made application for this project in 2007 and are
still unclear when we may be able to move forward and modernize
the facility.
Beyond our investments in southern California, we have a
variety of public-private partnerships that also play an
important role in the Basin. Next to the CREATE project in
Chicago, probably one of the country's premier public-private
partnerships is the Alameda Corridor. Multiple railroads and
government agencies worked together on the trench that I think
many of you just went through. We also continue to work with
Alameda Corridor Transportation Authority, but also the Alameda
Corridor-East Construction Authority, which was established to
minimize the flow of goods in the San Gabriel Valley.
Most recently, we have partnered with a variety of entities
on the Colton Crossing railroad project, which consists of
TIGER funding, Prop 1B funding, BNSF private dollars, Union
Pacific private dollars, and sponsored by SANBAG, the building
we are in. Eliminating gridlock at Colton Crossing is key. It
is one of the busiest graded rail intersections in the country.
It will relieve rail congestion, reduce wait time and delays
for motorists, and improve air quality in southern California.
In the future, the L.A. Basin will continue to be a
critical point for goods movement. Even with the expansion of
the Panama Canal, we expect traffic to continue to increase
into and out of the L.A. Basin ports. The Basin is an important
part of our system, as well as the country's freight
infrastructure network.
Thank you very much.
Mr. Duncan. Thank you very much, Mr. Moore.
Mr. Fox?
Mr. Fox. Congressman Duncan, Congressman Nadler, and
members of the committee, thank you so much for traveling to
southern California. I know this is terrible weather for you,
but thank you very much for coming.
By the way, Fred, Scott has a great voice. I think he is
the next Vin Scully.
This is the right place for a meeting like this, in San
Bernardino, the heart of the Inland Empire. The 31st District
my friend Gary Miller represents is a critical district for
what happens not only in this region but for the country and
for the supply chain network.
In the Inland Empire, there is 1.7 billion square feet of
warehouse and distribution space. It is massive and it is
growing. Each day we truck 10,000 containers to the Inland
Empire, and it is not an easy task. Today we have problems, and
I am going to address those in my oral testimony.
In 2006, when the Long Beach and Los Angeles Port reached
record numbers, we did more with the same number of vehicles
and trucks than we do today. In 2006, there were five night
gates. Today we only have four night gates. In 2006, the
terminals were open during lunch and breaks. Now they close for
2 hours on those four night gates. That creates congestion in
the terminals and a lack of productivity.
In 2006, most terminals had wheeled operations where the
containers were on the wheels waiting for the drivers, and that
is what drivers do: deliver. They shouldn't be sitting in the
port terminals, and that is what they do today. Today it is a
grounded operation at all terminals. That means as the
containers come off the ships, they are placed on chassis, they
are stacked, and drivers now must enter a port terminal at all
13 terminals, get in line to find a chassis, get in line to
have a container stacked onto a chassis, get in another line to
out-gate, and this takes about 2 hours as an average today.
This is not the best utilization of the drivers' time, and it
certainly affects the supply chain.
The near-term solution to this is to implement five night
gates, Sunday through Thursday night. Sunday is when there is
the least amount of traffic on our local freeway system, so we
can deliver a lot of freight on Sunday night. Also, we have--I
won't point out the individual--we have Walmart in the
audience, and they would love to have their freight on Monday
mornings, which we could do if we had a Sunday night gate.
Today, Walmart must wait until Tuesday morning to get their
containers and work those.
If we are going to attract business to southern California
and have a positive effect to the rest of the country, we need
a Sunday night gate so that the large distribution centers,
particularly here in the Inland Empire, can have their freight
Sunday night and work their freight Monday morning when the
warehouse staff comes in.
So the near-term solutions, which are not very costly, are
five night gates, Sunday through Thursday; let the terminals
work or demand that the terminals work throughout lunch breaks,
don't shut down for 2 hours; and put the containers on wheels
so that we can expedite drivers in and out of the port
terminals. That is the only way to handle volumes as they grow.
In 2013, we are starting to approach the 2006 record year
that was set by both ports. Now, the long-term solution has
some hurdles, and Scott and I have talked about this, and there
are some hurdles, but it is something that the committee should
really look at, and that is the establishment of an inland port
here in the Inland Empire. With the massive distribution
network that we have here in the Inland Empire, we need an
inland port. And the answer, gentlemen and ladies, is not
sending more trucks into the port. That is not the answer. I am
a trucking guy who says don't send more trucks to the port. The
answer is put the containers on a train that is located within
the port complex, rail those containers to the inland port here
in the Inland Empire, reposition our trucks from our trucking
community out here and do local trucking. We can do a lot more
trucking and a lot more deliveries if we are not wasting time
on public highways and sitting in lines at the port terminals.
It also creates more space for the port terminals, which
they desperately need. I know we are talking about adding lanes
on other freeways throughout the southern California area. In
fact, the 710, we are talking about adding two lanes at the
cost of $6 billion. We probably need the lanes, but at $330
million per mile and the time it takes to build those lanes, I
think this is a much better way to use the money, and that is
let's utilize the various modes of transportation, get trucks
off the freeway, clean up the environment, and have better
utilization of our vehicles.
I have 20 seconds left. So, Chairman Duncan, I will yield
my time to Fred Claire so he can talk baseball.
[Laughter.]
Mr. Duncan. All right. Thank you very much, Mr. Fox.
Mr. Richmond?
Mr. Richmond. Thank you, Mr. Chairman and Ranking Member
Nadler, and members of the committee. I appreciate also your
attendance here, and certainly the turnout is really
impressive.
I am going to ask if you could follow through--I have some
slides that were distributed to you, and I am going to walk
through them quickly. I will walk through them quickly and kind
of explain what we have been up to at the ACE Construction
Authority.
My name is Rick Richmond. I am the recently retired chief
executive officer of the ACE Construction Authority. I
appreciate the opportunity to be here.
The first slide that is in your packet is a depiction of
what is called the ACE Trade Corridor, which is a four-county
area involving about 280 miles of rail lines on the two
railroads, Burlington Northern and UP. The area that I work for
is the shaded green area. That is known as the San Gabriel
Valley in Los Angeles County, but the three other counties
surrounding it are also involved in the same work that we are
doing.
Mention has been made of policy. There is clearly a policy
in southern California to shift the modes out of the ports more
in the direction of rail and away from truck, and that is a
strategy that involves congestion relief, air quality
improvements, and a whole lot of other related activities.
But for us involved in the communities out there along the
rail lines, there are some other effects that are resulting
from that. Currently on that network that you see there, there
are about 100 trains a day operating, and when we say trains,
we are talking about typically a mile to 2-mile-long trains.
These are not minor train movements. They are major. That is
projected to grow to upwards of 250 trains a day with the
increase in traffic coming through the ports.
There are 131 grade crossings in that area shown on the
map. So there are 131 places where the train basically stops
cross-traffic to get through.
The next slide, I won't spend any time on it, but this is
the program that we have adopted within our organization that
was mentioned. It is a part of the overall corridor, and what
you see on there are all the grade crossing locations.
Everywhere you see a name is a grade crossing location, 54 of
them in our jurisdiction. We have adopted a program and have
been working for a number of years on a program to eliminate 24
of the 54 crossings. We are not trying to get rid of every
crossing. That is not practical. So we are trying to deal with
the worst, and also dealing with some safety improvements.
The next four slides I will just quickly run through. They
are a status report of where we are. The next two slides are
all the projects that are either done or in construction. It
accounts for 14 of the 24 total number of crossings. Those are
projects that are, as I say, either constructed and in service
or--they are either in service or in construction.
The next slide--and I apologize for walking you through so
many slides, but the next slide is five projects that we are
all now in design, and those are projects that are fully
funded. If you add these projects to the others I mentioned,
you are up to a total of 21 crossings that we are fully funded
and either have eliminated or will be eliminating.
In the final one of these slides is all of our active
projects--sorry, projects that are not yet active because of
basically waiting for the funding needed to finish the program.
You will see on that slide that we are about $235 million short
to finish this program.
Now, the next slide, I want to get to the point of the
Federal issue for us. The next slide is a pie chart of how we
have funded the program to date. We have pieced together from
various sources over about a 10-year period the $1.5 billion.
And if you look at the different shares, what you will see is
that the local and State are substantial. In the last few years
we have gained significant support at the local and State
level. The Federal number, as you'll see, is about 16 percent
of our total.
Now, interestingly, we got started in this program as a
result of TEA-21, an earmark, frankly, that got us started in
this program. We know the discussion over earmarks. I think we
are an example of how they can work well. I don't think we
would have started the project without it. It got us going with
$135 million, which we have now pieced together and grown up to
$1.5 billion from all these various sources.
The point I would make as we go toward reauthorization, the
Federal source is going to be--to be quite honest, we are close
to tapped out from the State and local because there really
aren't any in the wings. There really probably isn't a new
funding source from the State and local sources--that we can
count on, certainly. And we are obviously therefore focused on
the reauthorization, where we think there is a good case to be
made for the kind of work that we are doing.
The last slide, which I want to spend a moment on, is what
we specifically would look for and suggest you consider as you
go forward. As mentioned, there needs to be a freight program
in the reauthorization bill. It can happen a number of ways.
Congressman Sires' bill is beneficial in our view because it
broadens out the scope of the existing MAP-21 discussion, which
really talks about highways, and it needs to be broadened out
to pick up rail, air, sea, et cetera. The freight program can
operate under that legislative vehicle, but also PNRS in the
past has been a source for us to get going on this program. We
would look for some modifications to PNRS because right now our
work is ineligible under PNRS. It is restricted to transit and
certain other activities. Freight needs to be called out and,
frankly, mitigation of freight issues needs to be called out
because we are largely a mitigation program.
So I realize I have extended past my time, but I will
conclude at that and be happy to answer any questions, and
thank you again for being here.
Mr. Duncan. Well, thank you very much.
I am going to go to Mr. Nadler and Mr. Miller for the first
questions. But let me just say, first of all, that Mr. Ikhrata
and Mr. Richmond both talked about the importance of the
Federal role, and all of us on this committee believe that
there is an important and legitimate Federal role. In fact, I
have chaired three different subcommittees on this committee
and I can tell you, people in California sometimes use the
airports in Texas, and vice versa. People in Ohio sometimes use
the roads in Tennessee, and vice versa. People in New York
sometimes use our waste water and drinking water systems in
Florida, and vice versa.
So there is a very important Federal role, but there is
also a very important State and local role, and I am very
impressed by how much your State and local governments have
come up with in this area.
But this panel was given the assignment, the charge, the
jurisdiction to look across all the panels, because our
subcommittees are limited to the jurisdiction that they are
specifically assigned to. But we have been asked to try to
bring these things all together, and so that is what we are
trying to work on.
Mr. Nadler?
Mr. Nadler. Thank you, Mr. Chairman.
Let me start by saying that every witness--I am glad to
hear almost unanimity among all the witnesses. Everyone seems
to agree that State and local funding sources are not
sufficient to do the freight projects that are necessary.
Everyone agrees the freight projects must be funded on a
multimodal basis. Everybody agrees that we need a significant
Federal source of funding to supplement State and local
efforts. Everybody agrees that that funding source should be
available for freight and separate from the Highway Trust. And
I think I heard everybody agree that it should be done on a
competitive basis and not on a State formula basis. I certainly
agree with all of that.
Let me ask you a couple of specific questions before I get
to the elephant in the room, a very specific question. Ms.
Primmer, you said that the dedicated source of freight funding
should sunset. Why should it sunset? Isn't it going to be
needed indefinitely?
Ms. Primmer. Well, in my experience, I think because we are
asking stakeholders to really step up in terms of a dedicated
source of funding, their expectation is that it is not going to
be forever, that it is going to fund a specific set of projects
that are going to have a direct return----
Mr. Nadler. But when we finish the specific set of
projects, don't you think the country will need another
specific set of projects 10 years from now? I mean, is our
freight network going to be finished forever?
Ms. Primmer. No, I do not believe our freight network will
be finished forever. However, I do think that there is
accountability on the part of the public sector that needs to
recognize the contributions by the private sector, and the
private sector is going to require a little bit of assurance
from the public sector that we have done what we said we were
going to do and that they have gotten a return on the
investment that they are making. Part of the comfort level with
the private sector in stepping up and contributing to a new
source of funding is going to be the lock box and the sunset
that come with the program.
Mr. Nadler. The lock box, yes. The sunset, I am not so
sure.
Mr. Fox, a very specific question for you. You recommended
in terms of local California, southern California issues, that
an inland terminal be established, essentially. That is very
interesting. You make an interesting case, but why are you
telling us this? Isn't that a decision for a local government
in California to make and then come to the Federal Government
and say here is what we are proposing, here is why we are
proposing it, and help us fund it?
Mr. Fox. Well, I think the answer probably is yes, but I
think the answer also is, it is not going to work unless the
Federal Government gets involved.
Mr. Nadler. Gets involved with funding it. But we should
determine the policy initially?
Mr. Fox. Well, this affects the country, and I think
because it does affect the country, it needs to be looked at by
the Federal Government.
Mr. Nadler. OK. Thank you.
Let me ask everybody here. As I said, everybody agrees, and
probably most of the people on this panel agree, not
necessarily all of them but probably most, that there ought to
be a dedicated source of Federal funding for what we call
Projects of National and Regional Significance, which is to say
freight projects that State and local governments can't handle
by themselves.
The big elephant in the room is where should that funding
come from. There is tremendous political opposition, obviously,
to increasing the gasoline tax, to making it inflation
sensitive. The Highway Trust Fund is not going to have
sufficient funding from current sources. Does anybody have any
suggestions as to where we should get a $2 billion annual--
somebody suggested that figure maybe should be $3 million, or I
don't know what the figure should be. But does anybody have a
suggestion or suggestions, plural, as to where we can get a
dedicated Federal funding source?
Mr. Ikhrata. Congressman, I would suggest that we put all
of those sources that you mentioned on the table. I don't think
one source is going to be sufficient and enough to fulfill the
needs that we have. But I think it should be for both the
public and the private sector, but all sources that we talked
about, whether it is expansion of TIFIA, which was great but
not enough. I think we need to enhance that program. H.R. 974
calls for a dedicated fund that various fees could be put on
the table. But I don't think one source is going to cut it. I
think all of these sources should be on the table for
discussion.
Mr. Nadler. Anybody else comment on where we can get the
funding for a dedicated source?
Ms. Primmer. I agree with Mr. Ikhrata. We should not be
looking for a magic bullet here. If there were one, we would
already have it. There is going to need to be multiple tools in
the toolbox.
The dedicated source of funding that I mentioned, we have
been talking to some private sector stakeholders and their
desire to participate. I think that that is one option that
should be considered. Obviously, expanding the Projects of
National and Regional Significance would also be an important
part of the funding program. The qualified transportation
improvement bonds that are being proposed by L.A. Metro have
the potential to be used for freight programs. The expanded
TIFIA program is also a way to fund freight.
So I think if you are trying to fit everything into one
little box, we are never going to get there. The beauty of the
dedicated fund that I referenced is that it would be determined
by the local communities. So our region has developed a goods
movement action plan. So in order to be eligible to be part of
that dedicated source of funding, the project is going to have
to be on that goods movement action plan. It is not just going
to be some random thing.
The private sector then knows this is a promise that you
are going to get for participation in this dedicated source of
funding. These are the projects, this is the benefit to your
bottom line in terms of the reliability, the speed to market
that you are going to receive for that investment that you are
willing to make. And I think it is a strong partnership from
the Federal Government to enable that fund to exist that is
really needed.
Mr. Nadler. I see my time has expired. Thank you.
Mr. Duncan. All right. Thank you very much.
Mr. Miller?
Mr. Miller of California. It is interesting. We have a
trucker advocating rail capacity enhancements. I think that is
the first time I have ever heard that before, industry
crossovers. But I think it is because of the complexity of the
situation that we are dealing with in southern California.
Ms. Primmer, you have talked a little bit about your
concept on the freight trust fund. I guess how would you
structure the freight trust fund in more specificity, and how
would you prioritize key freight projects that were done in a
fair fashion?
Ms. Primmer. Thank you very much, Mr. Miller. Let me first
say that there is still much work to be done on this. This is
an idea that we have been developing a policy for for the last
couple of years, but we have not come up with a specific set of
criteria. I would look forward to working with your staff and
the committee----
Mr. Miller of California. I would like to work with you
because it is something that is very interesting to me because
of the impact we face in this region and the issues we need to
deal positively with to mitigate that impact.
Ms. Primmer. I would greatly appreciate the opportunity to
work with you, Mr. Miller, and any others of the panel that
would be interested. You have been a great champion for freight
in this region. Obviously, the Devore Interchange right here in
San Bernardino is in need of funding. The ACE Corridor is in
need of funding. There are port projects that are in need of
funding. So there is no shortage here in southern California of
what projects would be eligible for it. It is what would be
palatable to the private sector, what would be palatable to the
port community, what would be palatable to the inland
communities that are bearing the necessary mitigations, and
what type of agreement can we come up with. All of this
involves stakeholders.
Like I mentioned, we have started those discussions, but we
need to move forward with those. And with your support, I would
like to do that.
Mr. Miller of California. I would love to work with you.
Mr. Fox, you were very specific on certain situations that
industries are facing at the ports. Congressman Hahn is very
involved with that because she lives above it and has to look
down on it every day in her life.
So what can Congress do to mitigate some of the impacts you
are facing there? What do you believe we can do?
Mr. Fox. Well, that is a tough one. I am not sure in terms
of Congress legislating something to make the ports more
efficient, but that is really the center issue, that they are
not efficient.
In 2006, we did more business with the same number of
trucks than we do today. For example, in 2006, one truck could
deliver four to five loads to greater Los Angeles. It could
deliver three loads here to the Inland Empire. Today, volumes
are approaching 2006 levels. That is the good news. The bad
news is that that same truck can only do two loads to L.A.; it
used to do five. It can only do one or two to the Inland
Empire; it used to do three. And again, that is all because of
decisions made by terminal operators.
I know you know the subject very well, Ms. Hahn, but it is
not about labor, because it is the same labor force we had in
2006. It is about terminal operators making decisions to have
less labor, close down for lunch, put containers on a grounded
operation rather than wheeled, and only have four nights. All
three of those areas can be changed immediately, and we can be
more efficient as these volumes grow for the next few years. We
can handle the volumes with the 9,000 trucks that are servicing
the ports today.
We don't even really need 9,000 trucks. We need 7,000
trucks for today's volume. As it grows, we will need the 9,000.
But 5 years from now, that will not be enough trucks. Sending
another 3,000 or 4,000 or 5,000 trucks to the port creates more
congestion not only in the port terminal but on the freeways.
I think there is money that is being spent State and
federally on our highway system. As a trucker, I am saying
let's stop spending money on the highway system. Let's get the
UP or the BN involved and have a daily shuttle train and take
500 to 1,000 trucks off the road going between the port and the
Inland Empire daily.
Mr. Miller of California. Mr. Moore, how do you see that
working in your position at the Colton Crossing here?
Mr. Moore. Well, we are always looking for more business,
Congressman.
[Laughter.]
Mr. Moore. But we have studied this in the past. In 2005,
we worked with the Alameda Corridor Transportation Authority to
develop a pilot here in Colton. It ultimately did not work.
There wasn't a business model to make it work. More recently,
Mr. Ikhrata and SCAG did a study on that as well, and once
again the economics don't work. That sort of movement, because
of the additional lifts, additional labor, consuming rail
capacity, it cannot be price competitive today with a truck
move. Now, that may change in the future, but not today and
probably not yet, unfortunately.
Mr. Miller of California. I see my time has expired. Thank
you, Mr. Chairman.
Mr. Duncan. All right. Ms. Brown is next.
Ms. Brown. Thank you. And I think I had better start out by
saying, first of all, I am a rail supporter. After I say that,
there are some things I need to clear up.
First of all, Ms. Primmer, in looking at this chart that
was passed out, ``Funds Committed to Date,'' we have the number
one rail, freight rail in the world. Everywhere I go people ask
me about freight rail, and I am asking them about passenger
rail. If you see the Federal Government share, the local share,
the State share, we have to get our partners that are making
money, those stakeholders, to invest in the system.
And to think that we are going to come up with some
national funding for freight, and only freight will be able to
participate, and we are going to have a lock box for freight,
that is not going to happen. Maybe they will tell you it is
going to happen, but I will tell you it is not going to happen.
You have to have a system that is multimodal, maybe a
system like with the TIGGER grants that will open it up to
other forms of transportation. But to say we are just going to
do freight, I mean, that is just not going to happen.
And, Mr. Fox, we were at the port, and it was very
interesting, and we were trying to get a water bill, and if so,
I think they said $2 billion a year would fund the problems
that we are having in all of the ports. I see the Jacksonville
Port didn't even make it to this chart. So we really are having
a problem. However, the issues that you are talking about are
issues that you can negotiate tomorrow with the port.
Mr. Fox. No. No, we can't.
Ms. Brown. It is not a Federal issue.
Mr. Fox. We cannot negotiate with the port. We have
nothing--we have no involvement with setting terminal
operations.
Ms. Brown. I know, but we don't either, to my knowledge.
Mr. Fox. Well, it is interstate freight.
Ms. Brown. No, sir.
Mr. Fox. Yes, it is. It comes from other countries.
Ms. Brown. You are talking about whether we do 7 days or
whether we do 5 days, whether they are open 24 hours. We
discussed that, how much time they take for lunch. That is not
international negotiations. Maybe the staff can clear it up for
me. I don't think we have anything to do with it.
Mr. Fox. Well, there are always incentives.
Ms. Brown. I am just telling you, in talking to the port,
that is not what they told us yesterday.
Mr. Fox. Well, I can tell you as a trucker, I have nothing
to do with setting port policy.
Ms. Brown. And we don't, either. I mean, we don't either,
and we are trying to get them additional funds. But even if we
do the things that we need to do at the port, if you have the
congestion on the highway, it doesn't work. It is intermodal.
Mr. Fox. That is what I am saying, take trucks off the
freeway system.
Ms. Brown. In some countries, trucks can't go. You have to
put them on the train and send them. So, yes, there are some
things that we could do. But did you want to respond to my
comments?
Ms. Primmer. I would, please. I didn't mean to imply that
the mitigations that are involved with freight would not be
eligible as projects. Certainly, there are air quality issues,
there are impacts to the communities that support the freight.
Ms. Napolitano's district is a prime example of the impact that
freight has on local communities.
What I intended to imply was that it should only be
available to use immediately adjacent to freight facilities,
and I am sorry I relied on my written testimony to flesh some
of that out. But the facilities that would be eligible would be
part of the multicounty Goods Movement Action Plan in our case.
In other States, it might come from the State DOT or come from
another NPO plan, but they would be identified by the
communities that are most impacted, such as the communities
like Ms. Napolitano's and Ms. Hahn's that are bearing the brunt
of the commerce that goes out to the rest of the Nation.
Ms. Brown. Well, there are many areas. For example,
Chicago. We are going to visit that in the New York area. I
mean, so there are many areas that would be eligible as we
develop a policy and try to come up with funding to finance
these policies.
Ms. Primmer. Absolutely. But there needs to be a freight
nexus in order for a project to be included.
Ms. Brown. Freight, port, multimodal.
Ms. Primmer. Absolutely.
Ms. Brown. All right. Thank you.
Mr. Duncan. Thank you very much.
Mr. Hanna?
Mr. Hanna. Mr. Fox, the things that you talk about seem to
be absolutely in line with what I would consider to be common
sense. What is wrong, really? I mean, you are asking this
committee to consider somehow as if it has the authority to
deal with it. Clearly, the State has some authority to deal
with it. There must be something going on that you are not
talking about. It is too obvious.
Mr. Fox. Well, sometimes the most critical things are the
most obvious things. There are two issues, near-term and long-
term. Look, the ports were never more efficient than they were
in 2006 when business was good. So that is part of the obvious
answer to this, is that there was more volume that justified
more labor. It justified having wheedled operations. The
terminals are getting away from providing chassis. It is a very
complex issue, and I don't mean to oversimplify it. It is a
very complex issue, no doubt about it.
The bottom line here is there are so many stakeholders
involved, the steamship lines, the terminal operators. I don't
think labor is even part of the issue at all. I think it is the
people paying the bills. And if we don't get the people paying
the bills to correct the situation, as volumes grow we are
going to have more congestion and the Panama Canal is going to
start looking a lot better.
Mr. Hanna. So implicit in what you are saying is that there
is enough money to go around to allow this inefficiency to
continue, and there is nobody invested in stopping it?
Mr. Fox. The different stakeholders are so focused on their
own budgets that they are not looking long term at the big
picture.
Mr. Hanna. There is no central authority to discuss this
that you can go to?
Mr. Fox. I would like to know who it is.
Mr. Hanna. Mr. Ikhrata?
Mr. Ikhrata. Yes, thank you.
Ms. Hanna. Would you like to take a shot at that?
Mr. Ikhrata. Sure. I think what Mr. Fox is saying, and not
to disagree with some of the things he said about maybe the
Federal Government or the local government or the State
government shouldn't invest in the highway, I have a different
opinion about that. But this points to how complex the issues
are. I mean, if it is simply by just putting a short-haul
trailer, like Mr. Scott mentioned, to solve the problem, we
will. But it is more complex than that. Study after study said
that economically it doesn't pan out. Therefore, the short
haul, which is a component to what Mr. Fox is talking about, is
not going to work.
But this points to an important thing. I can tell you this,
we have been discussing this issue for over 20 years now
because it is important not only to this region but to the
Nation. And this issue is very complex, no question about it.
It needs to involve all stakeholders, private, public, Mr. Fox,
Mr. Scott, everybody.
I will point to the fact that in our region, we actually
are well organized. Our State in 2006, put a bond out, $2
billion of which is specific to goods movement, because of the
importance of goods movement. So there is more than a
discussion. There is part of Government, a debate about what is
the best solution. But one solution you should never doubt,
that this region and this Nation need to maintain its existing
infrastructure and need to build additional infrastructure. And
I believe, Congresswoman Brown, that multimodal infrastructure
investment in this Nation is warranted.
The sad accident in Seattle a couple of days ago taught us
something. In this region, there are 2,300 bridges that are
classified obsolete or structurally deficient. That doesn't
mean they are going to fall down tomorrow, but they need
attention.
So the thing I want you to remember is the investment in
infrastructure and maintaining the infrastructure is a key,
regardless of these local issues----
Mr. Hanna. Well, we all agree with you.
Ms. O'Brien, who would you like us to tax? I mean, that is
a fair question, right? You must have something in your mind.
You are a big organization.
Ms. Primmer. That is absolutely a fair question, and the
answer is no one that doesn't agree to it.
[Laughter.]
Mr. Hanna. Well, that is not going to be a whole lot of
people.
Ms. Primmer. No. And what I mean by that is I work with
stakeholders every day, and what I am hearing from them is if
there is a return on that investment, if there is a bottom-line
benefit to my business, I am in. So the people that are going
to benefit from----
Mr. Hanna. But the degree to which they are in may be the
question.
Ms. Primmer. The people that are going to benefit from the
system need to be partners in developing the plan, and that is
exactly what Mobility 21 does.
Mr. Hanna. I am almost out of time. But we need to know
what that ratio is, what that looks like in reality so that we
know if anything is done at all towards that end, we have
willing partners that have an idea that it is not going to be a
nickel or a dime, it could be a lot more.
I yield back.
Ms. Primmer. Thank you. That is a possibility, and we would
be more than happy to work with the committee on that.
Mr. Duncan. Thank you very much.
Ms. Hahn?
Ms. Hahn. Thank you, Mr. Chairman.
And thank you to the panelists who are here today
testifying before the Panel on 21st-Century Freight
Transportation. Isn't it great that we have all these Congress
Members from across this country spending 3 days here to really
see for themselves how important our ports and our
transportation system is to the entire country? I feel very
hopeful that we will come up with some good recommendations as
we create the first-ever national freight policy in this
country.
Mr. Fox, I, of course, am very sympathetic to what you are
saying. It was I, under my brother's leadership when he was
mayor of Los Angeles, that actually created the off-peak cargo
movement system which we call PierPASS. I was charged with the
task of bringing together all the stakeholders, both ports,
labor, warehouse distribution centers, the Walmarts, the Sears,
the Targets, and we came up with what we now call PierPASS,
which was intended to move cargo off-peak hours. I understand
we are up to about 50 percent cargo that is moved off-peak.
But I am with you. I always wanted it to be five nights a
week, on the weekends. I think that makes sense. I think it
will give us more use of our current infrastructure. I think we
have to use our infrastructure smarter before we can expect to
build out some of our infrastructure. And I think the truckers,
they don't want to be on the road with us either. They don't
think we know how to drive. So they are happy not to be
fighting with commuters.
So even though it is not our jurisdiction, which has never
stopped me before from doing anything, I would be happy to
facilitate a working group at the ports, and I know Alan
Lowenthal will work with me because he was also instrumental in
having legislation ready to mandate off-peak cargo movement. We
didn't have to do that because we came up with a plan that
worked before that.
So we will get together with both ports. We will put a
group of stakeholders together and see how we can move forward
in moving more of this cargo off-peak. I think that makes sense
for the entire region. So I will work with you on that.
Mr. Richmond, I was interested in your idea of mitigation
and wondering if we create a national freight policy, do you
think a part of that policy should be some sense of mitigation?
I think we are going to have to be real with building projects
and how that impacts our communities, and I think we do have to
have mitigation. I am curious to know whether that should be
part of our national freight policy.
Mr. Richmond. Absolutely, and it is right now a little bit
silent. Some of the existing legislation is silent, at best, on
that subject. And you know from your experience with the
Alameda Corridor, while it is a fantastic facility and it does
a great job to move freight, most of what went into that
project was mitigation.
Ms. Hahn. Right.
Mr. Richmond. I mean, it is primarily a mitigation project
when you scratch away all of the components. So, absolutely, it
has to be part of any authorizing program, it seems to me,
because otherwise you are really stuck with the issue of
investing taxpayer money, presumably, into what is essentially
a private enterprise. I mean, the beneficiaries of much of the
activity here is private enterprise. And as you have heard from
this discussion today, when you scratch below the surface and
people talk about doing things more efficiently, you
immediately run into the multiple handoffs involved in this
business and the fact that any particular approach to make
things work better usually lands in one place, and that is when
it starts to sort of fall apart if you don't force the issue.
So I think the mitigation has got to be part of what is
addressed in any project.
Ms. Hahn. Well, I appreciate you saying that because I
don't think we expand our ports or build more projects without
making sure that we mitigate the impacts on the surrounding
communities. I will say I am encouraged by this panel that one
of the sources of revenue that we are exploring is the harbor
maintenance tax, which is a tax that is collected but it is not
used for the purpose of maintaining our ports and harbors in
this country.
The other thing that I would like us to look at is I have
always felt like a percentage of the customs district revenue
ought to be spent where it is collected for improving the
infrastructure. The L.A. district takes in a whopping amount.
It is--how much is it, Lori? Let's see, $14 billion annually
just in the L.A. customs district, and it is based on
containers, because containers represent commerce, and it has
always been a value of commerce.
But my feeling is that every container, and I think we have
seen this, that comes into the ports also represents risk. It
represents risk to our infrastructure, to our security, to our
environment, and I think that money we should look at as a
possible fund, not the whole thing, maybe just a percentage of
where it is collected across this country, and use it to put
back into our infrastructure needs in this country. It might be
something that we could look at.
Mr. Duncan. All right. Thank you very much.
Mr. Lipinski?
Mr. Lipinski. Thank you, Mr. Chairman.
Ms. Brown said we are going to be in Chicago looking at
some of these things. I hope we are in Chicago looking at some
of these things. I know that I have heard many times in the
last 2 days how, even though we are 2,000 miles away, how
important what is going on in Chicago and finishing up the
CREATE program is to even out here, because that is so
important to moving freight in the country.
But if we are looking at one thing that was mentioned, Ms.
Napolitano, we could probably compare the need for grade
separations in our districts. I am glad we had this opportunity
to get out of Washington and come to California because it
seems like there is so much greater concern that I have heard
in the last 2 days about the impacts on local communities than
I usually hear in Washington. Grade separations, I know there
are issues, numerous issues, but grade separations with
railroads is one of the big ones, and I am very impressed at
how much has been put into that, how much funding out here has
been put into that by the State and the MTA.
I see 2 percent from the railroads, and that is a big
question: Do railroads have a responsibility? How much
responsibility do they have? Because railroads can say these
are our lines, we run our trains, and that is it. There is a
regulation that says if there is any Federal money spent on a
grade separation, railroads have to put at least 5 percent
towards that, and I think that is important. I would like to
see more money coming from the railroads on that, but these are
difficult things to work out.
One thing that we are sort of dancing around here and not
really addressing is that in the freight system, as Ms. Primmer
said, we should tax, we should get the funding from those who
benefit. Well, who benefits? Everyone is going to point to
somebody else in terms of who benefits off of any type of
improvements. And in the end, everyone might point to, well, it
is the American consumer that benefits, so they should pay for
it.
I am not saying I have an answer to who exactly benefits
and who should pay how much in this, but everyone can point to
each other in terms of who benefits. If you are moving the
product you can say, well, it is the retailers that are
benefiting because they are getting cheaper rates for getting
the product, or you can say that producers are benefiting.
Everyone can point somewhere else and say where is the benefit.
I think that has been one of the problems with coming up with
how we are going to do this.
On top of that, you have the fact that the railroads are
private. So where does that come in? Where does that come into
the picture? The railroads are private; our roads are public
for the most part. How does this all come together?
So, does anyone have an answer? I don't expect an answer.
Does anyone have anything they have to say about these
complicated questions of where is the money coming from, and
then where is the money going to go to? How much do the
railroads--helping the railroads--yes, it helps freight
movement. It helps the railroads also because they are private
entities. I am not saying we shouldn't do it. I certainly
support that. I supported that with CREATE. But how do we draw
those lines?
Mr. Ikhrata. Well, Congressman, we have examples in this
region where partnerships, public and private, worked. The
Alameda Corridor. At the time, it was the biggest public works
project, $1.4 billion, where you had public and private money,
and she will tell you the amount of stakeholders and the amount
of meetings it took, but it did happen at the time, in 1985. It
took us from 1985 to 2005 to open. At the time, it was the
biggest public works project and it involved many stakeholders.
So I think it is possible to be able to say not only who
benefits and who pays, but how do we work together to make sure
we all benefit.
Mr. Lipinski. How does the Federal Government get involved
in helping to promote this kind of----
Mr. Ikhrata. The Federal Government was at the table with
Alameda Corridor, and it should be at the table on all these
projects because, as I stated earlier, if there is a national
policy that is needed, this is it. Freight movement is it, in
my view. This is one of those few examples where, whether you
are in Chicago--and I talk to my colleagues in Chicago almost
every week--I think we all agree on the national importance of
this issue to all of the Nation, not just to southern
California. Sometimes we are selfish. We say southern
California, we handle 43 percent. But we believe it is
important to Chicago and New York and Florida, every place in
the Nation. When the ports have a strike, by district, you can
see the economic disadvantage, the economic hardship in every
district around the country.
So, yes, it works everywhere, and I think partnerships with
other States, partnership with the private sector is needed,
not only to build the infrastructure but also to mitigate the
impacts to the communities.
Mr. Ajise. Congressman, real quickly, I think your
statement basically elucidates how complex the issue is in
trying to bring everybody together and decide on one funding
source, and we are not going to do that. But it requires a
multiple stakeholdership conversation.
The importance of the Federal role is it is very difficult
for us to take any action in one region that may disincentivize
activities at that port to the benefit of other ports. So the
Federal role comes in where we all get together and then decide
on what a national policy is going to be that incentivizes the
sourcing of funds to do the activities we are talking about. I
think trying to assess benefits is a good start. That brings
everybody to the table.
An example that we had was with the Trade Corridor
Improvement Program. We had $2 billion, and the money was
basically spent in four different regions of the State, but the
stakeholdership in each of those regions came together and
added to what was coming to them to increase and leverage $6.9
billion as a result of that conversation. All of those monies
came from other sources that benefitted from those projects
that we put together.
Mr. Lipinski. Thank you.
Mr. Duncan. All right. Thank you very much.
Mr. Mullin?
Mr. Mullin. Thank you, Chairman. Thank you for the
opportunity to be on this panel.
I find it pretty interesting that the gentleman who is
thinking out of the box gets hit on the most.
[Laughter.]
Mr. Mullin. Mr. Fox, I don't mean that in a lovely way. But
I am intrigued because what you are saying makes sense, but as
I have pointed out multiple times, in politics that doesn't
always play any role.
How much thought have you really put into it, though? I
mean, have you looked at the logistics behind it? Have you
looked at where this inland port would be? The funding, would
the private sector be willing to put money into it? I mean, the
role that I feel like the Federal Government could play is
bringing everybody to the table and then try to help speeding
up all these studies that we have to do, studies to make sure
the environment and this bird and this crab and all this stuff
is protected. I would think that we would be maybe to
facilitate a little bit in that way?
Mr. Fox. Well, OK. It sounds like a couple of questions
there.
Mr. Mullin. I know there was. I have a lot more, too.
Mr. Fox. OK.
[Laughter.]
Mr. Fox. Thanks for recognizing that I am getting beat up
here. Appreciate that.
You know, this is not a new idea. It has been discussed and
looked at and studied. I think one study by the Tioga Group
that was done in 2005 was, in my view, somewhat of a negative
report, but it was also done at a time when the economy was
kind of changing and so forth. I think the time is right now,
more than ever before, for a couple of reasons.
Port volumes are getting back to where they used to be.
That is a good thing. Congestion is worse than it has ever been
on our freeway system and in the port terminals. We have a
State that is looking at environmental issues and providing
funding.
One thing that Ms. Hahn knows better than anybody is that
we have 9,000 new trucks working the port. Well, that is good
and bad. It is great because the environment has been cleaned
up, and Ms. Hahn deserves a lot of credit for that. I think we
are at 72 or 85 percent--the numbers have changed recently--in
terms of less pollutants in the local community. That is
fantastic. But it also means that we have less truck drivers
available.
I am telling the panel, in 5 years from now, we are going
to have a problem having enough port drivers to do the work as
volumes increase. And if we don't fix the productivity issue,
we are not going to have enough port drivers to do the work. So
I am getting to your answer.
The inland port has to happen for the next 10 years or 20
or 30 years down the road. If we don't start talking about it
now, bring the stakeholders together and plan for it, and
implement it in 5 or 10 years from now, or sooner, we are going
to have major, major issues.
Mr. Mullin. And I understand what you are saying, take the
focus a little bit off the roads for now, because we can add
the third lane, the fourth lane, the fifth lane if we want to.
But if we can't get in and out of the port, the congestion at
the port, it doesn't make any difference how much we expand the
roads. So that makes perfect sense to me.
But is the private sector, is Union Pacific, are the
different railroads willing to invest in something like that? I
understand the touching of the containers. The more times you
touch something, the more it costs. But will it offset the
amount of time that we are waiting? Ultimately, we are the ones
who pay for it, the consumers. The longer Mr. Fox's trucks have
to sit at the port, he has to pass that on to us. So where is
the offset and where is the balance?
At what point, Mr. Moore, have you guys looked at that,
where the balance is tipped enough to where it would make you
want to invest in it?
Mr. Moore. Well, I mentioned the growth in our domestic
freight movement, which is inside the U.S., so to speak. But
the answer to the question historically is when does it make
sense to do rail, when does it make sense to do truck? That
business is shrinking by 400 miles. I mean, today it doesn't
work. It is easier to truck to Phoenix. There are 10 million
trucks going to San Francisco, zero going on rail, because it
is cheaper to do it that way.
Mr. Mullin. Sure.
Mr. Moore. Until those dynamics change, and someday they
will as that continues to shrink, at that point in time is
probably when a purely private model could work. But that is
probably premature today without some sort of public subsidy.
Mr. Mullin. Real quick, my next question is to you. You had
said in your testimony that your company is investing and has a
clear plan to invest in the future. How much hindrance through
regulatory studies and different EPA studies and everything
does that have in your consideration of where to invest and how
to invest?
Mr. Moore. I----
Mr. Mullin. What kind of impact does it have when you are
talking about dealing with the Federal Government?
Mr. Moore. Well, I was going to say California is a special
place to invest and build because of the State laws there. But
that has an impact--I mean, the Federal issues are not as
great, quite frankly, in this area as the State issues are.
Mr. Mullin. Good enough. Well, I can't help you with the
State side of things.
[Laughter.]
Mr. Mullin. I thank God every day I live in Oklahoma, so I
am good.
[Laughter.]
Mr. Duncan. Thank you. Thank you very much.
Mr. Sires?
Mr. Sires. Thank you, Mr. Chairman. Thank you for being
here and all the people that are sitting here listening to us.
Like I mentioned yesterday, I come from the other side, New
Jersey. I represent the Port of Newark, the Port of Elizabeth.
When you talk about congestion, where there is water, air,
highway, roads, we have it.
I am glad I came on this trip because one of the
differences that I have been able to observe is that the
concern here is how to get the trucks and move the merchandise,
which is about 75, 80 percent, into the interior of the
country. In my district, 80 percent of the merchandise that
comes in through the port is consumed within the region.
So one of the reasons--and I thank you for bringing up the
bill, the legislation that I put together--is because for many
years I have been very concerned about moving the freight
within the region. That is why I think we have to do
multimodal. Every single way that you can move freight has to
be looked at and intelligently worked on so we can move that
freight, because you are going to get as crowded as I am.
Sooner or later, it is coming.
What concerned me, Mr. Fox--I know you are getting beat up,
but one more is not going to do anything. One of the things we
talk about is putting together competitive grants to build
whatever infrastructure you need. If you have all those issues
that you are talking about, why should I put together a program
of competitive grants when you are so inefficient? Why should I
give you money if this port is so inefficient? Why don't I take
that money and put it someplace where it is more efficient?
So when we talk about competitive grants, that is taken
into consideration. We would be happy to have it in New Jersey,
by the way.
[Laughter.]
Mr. Fox. Well, you know, the local ports--let me just say,
because I know there is some port representatives here--there
are issues, but it is still a very effective port when you look
at the volumes compared to any other port in the country. It is
a very efficient port complex, L.A. and Long Beach. There are
issues, but there are issues everywhere.
There also is the deep channel ``depth'' where the larger
ships can come in, and that is very unique for this country,
and that is a competitive advantage for Long Beach and L.A. I
think there are 50- and 53-foot depths, and that is where the
steamship lines went. They went to larger cargo vessels with
many more containers, up to 18,000 TEUs, with less sailings.
That is cost competitive. That creates immediate congestion
when you dump 18,000 containers into a terminal.
I think the congestion that I am talking about, these are
simple fixes. For the long term, yes, it is complicated for the
UP or the BN to provide a shuttle train to an inland port. But
let me also say that based on the trucking rates, where they
are today versus when the studies were done 10 or 15 years ago,
that gap has come down quite a bit. There is not a big gap
between trucking a container from the Long Beach Port or L.A.
Port to the Inland Empire versus putting 250 containers on a
train and amortizing that cost over 250 containers. That gap is
shrinking. It is much smaller.
I think it takes Federal subsidy for it to work, or a
combination of State and Federal subsidy. But I think a program
can be put together, and I think over the next 5 or 10 years
when it is implemented, we can have daily shuttle trains to the
Inland Empire, create jobs, get rid of congestion on the
freeways.
Mr. Sires. You know, I certainly agree with you. I
certainly agree that the Federal Government has a role to play
in this big infrastructure project, because I saw what happened
in my district. We have a bridge in Bayonne, New Jersey, that
needs to be raised 65 feet. What happened was the Port
Authority of New York and New Jersey put together $1 billion,
along with the other projects. But what happened is now to go
through the tunnel from New Jersey to New York, by the year
2015 I think it is going to be $15 because that money was just
passed on to everybody that uses those tunnels that the port
authority is involved with.
So if you don't get the Federal Government involved
somewhere in assisting--I am not saying that they should pay
for the entire thing--the public is just going to be stuck,
just like you are going to have here. The people in this area
are going to have these big bills to deal with in order to
alleviate the situation that you are going to confront here in
the near future.
So I am a big believer that there is a role, smartly. I
mean, I don't believe in just doling out money, but this is for
the betterment of the country. At the end of the process, this
country is going to be better off if we can make the changes
that move the freight throughout the country.
I am sorry. You have a----
Mr. Ikhrata. Just to tell you how complex this is, I mean,
the inland port issue was looked at several times. Mr. Fox
mentioned the Tioga Group study that SCAG funded. But remember
that 80 percent of the truck traffic is not port related. It is
due to manufacturing that ends up on the highway but goes to
the warehousing. So that makes the concept much more
challenging. I mean, if every truck that we are talking about
is coming from the port, going in one route and going to the
warehousing, that is one thing. But a lot of it is related to
manufacturing along the freight corridors, so that makes the
concept harder. It doesn't mean that it is a bad concept. It
could be worth it.
But, Congressman, I want to take one thing you said about
why should you fund us if we are not competitive, and we say
don't fund us if we are not competitive. I think this program
should be funded based on what is the best for the Nation, the
best projects for the Nation to be funded, and I believe we
have many, many areas where we could point to the best projects
that will benefit the rest of the Nation. So I think we should
be competitive. I can tell you that this region has done enough
to tell you we can compete with other regions, and there are
good projects in other regions that should be funded also.
Mr. Sires. Thank you very much. Thank you, Mr. Fox.
Mr. Duncan. Thank you. Before we go to Ms. Napolitano, Ms.
Brown told me that she needed 10 seconds. I told her if she did
something in 10 seconds, I would be shocked.
[Laughter.]
Mr. Duncan. So she said she could do it in 30 seconds.
Ms. Brown. Mr. Fox, I think we are calling on you because
we like Fox News.
[Laughter.]
Ms. Brown. But seriously, one of the things from the port
that they told us yesterday, besides the depth, 76 and over 53
feet, one of the things they talked about, the new technology
is coming online and that they would need a couple of thousand
less truck drivers because of the new technology that is coming
online. So keep that in mind as we move forward, that there is
new technology that says it is going to expedite the processing
at the port. I don't know, but this is what I was told.
In addition to that, all of you can think about it and give
it to us later. We talked for 17 years about getting a super
project online. What are some of the one-stop permitting things
that we can do so that we can expedite those times? California
is an example. You have all these different committees and
groups on super projects. We need to be able to get everybody
in the room and expedite those projects.
Thank you very much.
Mr. Duncan. All right. Thank you.
Ms. Napolitano?
Ms. Napolitano. Thank you, Mr. Chairman. And being the last
one, I think everything else has been asked except one area.
But I want to make a couple of comments with Mobility 21. You
haven't been in my area in over 4 years, so I have no idea what
the heck is going on. That is mostly L.A., so I take exception
to some of the things that are being planned without the San
Gabriel Valley being involved.
As far as the funding, the trust funds, I haven't seen a
fund that hasn't been utilized for something other than. I
mean, it may be related, but not necessarily totally dedicated.
So lock boxes may be well and good, except we need to be sure
that that money is going to the proposed projects only. If that
is where the money is going to come from, the dedicated, and
then the shippers can understand that this is money that is
going to benefit their on-time delivery or being able to do
things that are specific to including that money in the trust
fund.
One of the areas that we have not talked about, Mr. Moore,
is the impact of the widening of the Panama Canal. How is that
going to affect the railroads and the jobs and the cargo
movement, especially of Mexico and Canada, or also preparing
for that? And some of the other ports in other parts of the
Nation are also deepening their channels.
Mr. Moore. Well, Congresswoman, we need specifics. We say
we don't have a favorite port, but there is really only one
port area where we are spending $1 billion building a double
track two and trying to spend a half a billion dollars to
improve our facilities.
Ms. Napolitano. That is my point.
Mr. Moore. So we are going to believe what we think, and
our thought is that certainly after the lockout and other
issues here in 2002 to 2003, many companies went to a four
corners strategy, and a diversion primarily has already
occurred, is what our opinion is. So that is why we are
continuing that investment and continuing to move forward,
because we think the overall value of the deep water ports that
you have here, the infrastructure you have in the L.A. Basin,
including the warehouses, that rail-land bridge to points east
is what is going to have the most value to the customer. As
long as that is still true, business is still going to come
through here, as well as on our railroad.
So that is why we think we will see what the charges for
that Panama Canal item, and certainly there is a gulf port
coast that could have some of that traffic. But as I said,
there is only one place to invest the kind of money we are
building in L.A., and we still think it is coming here.
Ms. Napolitano. That is commendable. I know the Canadians
are building a lot of infrastructure to try to compete. So that
brings up the question about our shippers who have an option to
deliver and divert cargo through these foreign ports into our
markets to avoid the harbor maintenance tax in our ports. But
what should Congress, what should we do to tax trans-ship cargo
coming from Canada or Mexico in order to level the playing
field? Anybody?
Ms. Primmer. Ms. Napolitano, thank you for the opportunity
to answer, and I will be sure and meet with your staff after
the hearing today to go over how we can be more involved with
your district.
Ms. Napolitano. You are using my time, ma'am. To the
question.
Ms. Primmer. The Federal Government needs to take the
growth of Canadian and Mexican ports very seriously. They pose
a competitive threat to the U.S. west coast ports and the
millions of jobs they support. However, the most effective
response to this competition is for the U.S. to develop a
national freight strategy with clear alignment at the State,
local, and Federal levels. A national strategy was developed in
Canada, and that is a big part of the reason why they have been
so effective.
With respect to a cross-border fee, I think the question
comes back to this: Can we use HMT in a way that returns a
benefit to those who pay it? Can we use it in a way to enhance
the competitiveness of our national freight system? If we can
fix this, then the competitive impact has been negated.
Ms. Napolitano. So what would be the suggestion to be able
to level that playing field?
Ms. Primmer. I would propose that it is more than a simple
matter of fairness with regards to the HMT. It is and must
continue to be viewed as a scarce source of funding that is
dedicated to our national freight system. If shippers pay money
into the fund and don't see a direct and commensurate benefit
in return, then we are losing an opportunity----
Ms. Napolitano. I am talking about the freight from Canada
and Mexico coming into the United States to avoid paying the
tax.
Ms. Primmer. I am sorry. I didn't understand that last
part.
Ms. Napolitano. Canada is building a lot of infrastructure
to be able to go through the northern part of the United States
and trans-ship into the U.S., and so is Mexico. How are we
going to be able to tax that to be able to level the playing
field for the harbor maintenance tax that is payable at our
ports?
Ms. Primmer. I don't have an answer for that.
Ms. Napolitano. Anybody?
Mr. Ikhrata. I think, Congresswoman, one way to do it is to
make sure we build and invest in our infrastructure as they do,
so we can compete with these things. I would say that sometimes
implementing the new taxes, it might be more costly and less
effective than it is for us to improve our infrastructure to
make sure we can compete with these ports.
Mr. Ajise. I just want to add that I think, Mr. Moore
mentioned it, the efficiency of being able to get goods from
the ports of Long Beach/L.A. across country I think is a
competitive advantage we have. To the extent that we continue
to improve that infrastructure to be more competitive, I think
it is a moot point that they would go to those other ports.
Ms. Napolitano. I have a little bit of a difference of
opinion. It is my own opinion, and yes, the harbors have done a
tremendous amount of work and have changed in the last decade,
that I know of, since I sat on transportation at the State
level. So we hope that this will be enough to be able to keep
our ports competitive.
Thank you, Mr. Chair.
Mr. Duncan. Thank you.
Mr. Moore, we have talked for a long time in our committee
about environmental streamlining. We are tried to do more of it
in MAP-21, but we still run into delays and problems. All of
these transportation and infrastructure projects in our
country, most of them have been taking two or three times
longer than most other developed nations, and I understand that
with your intermodal container transfer facility, is it correct
that you first applied or started in 2007 and the environmental
review process is still going on?
Mr. Moore. Yes. We put our application in for our facility
in 2007 and still haven't got a draft environmental statement.
Our competitor, Burlington Northern Santa Fe, I believe,
started theirs in 2005 and just had EIR clearance in the last
month.
But those issues are really more about State issues. The
California Environmental Quality Act, CEQA, is what the issue
is there, and there has been a lot of talk in the last 12
months, from the Governor on down, about changing that. I don't
know how optimistic I am that that is really going to happen,
but----
Mr. Duncan. That is going to be what I was going to ask.
You said this State was a special place, implying that it is
more difficult to meet the State requirements than the Federal
requirements. Of course, these projects not only take two or
three times longer, they end up costing two or three times
more, and we are going to have to probably give more of the
Federal funding to the States that are getting things done, I
would think. So are you seeing any efforts to speed these
things up here in the State?
Mr. Moore. Seeing conversations about that.
Mr. Duncan. Conversations. OK.
Mr. Richmond, we were just with Matt Rose all morning with
the BNSF, and he talked about your Alameda Corridor project,
and he said it began in 1987 and was completed in 2002. I just
wonder what mistakes were made or what could we learn from that
15 or 16 years? Could we do a project of that scope someplace
else in California or in the country now in less time, or could
we do that type of project again? Tell us what lessons you
learned from that. I am sure you have thought about that.
Mr. Richmond. I will try to briefly respond. Actually, Ms.
Hahn could give you even better firsthand knowledge. But this
also predates my involvement out here. But I know that for an
extended early period of time, there was controversy over many
of the issues that you are hearing about today, over exactly
how the project was going to get done, whether there was really
a buy-in, enough consensus about being happy with the way the
project was proposed. That took up a lot of time, I think. Once
they got past that, it moved relatively quickly.
In our work, and we are an extension beyond the existing
Alameda Corridor that you traveled on, we haven't had that kind
of a problem because what we are doing basically is well
received in the communities because we are basically trying to
clean up a problem that if we don't do it, it is going to be a
problem. It has not been an environmental--everyone has got
problems with CEQA. We don't have to do anything under CEQA if
we are doing a grade separation. So there is an example in CEQA
where it is positive. We are basically exempt from the process.
So it really depends, I guess, on what you are proposing
and to what degree you are really impinging on people. Ms. Hahn
could give you much more of a firsthand view of exactly what
went into the Alameda Corridor.
Mr. Duncan. All right. Thank you.
Ms. Primmer, you--oh, yes, Mr. Ikhrata.
Mr. Ikhrata. Yes. I think, to add to what Rick said,
parallel reviews help. There are multiple agencies, Federal and
State, that have to review a project, and one agency works for
the other. So if you somehow figure out a way to review them at
the same time, then that saves a lot of time.
Mr. Duncan. That is what we have tried to do in MAP-21.
Mr. Ikhrata. That is correct, and we appreciate that, and
we hope we expand on that. So empowering the Federal
departments to do that saves a lot of time for sure.
I want to say, and my good friend Scott here mentioned
CEQA, and we believe there is a lot of room to fix some of the
aspects of CEQA at the State level, and there is actually a
bill going through Sacramento right now trying to do just that.
But the whole issue of making a project that takes 17 to 20
years has huge benefits economically speaking and otherwise,
and I think we have specific recommendations that would love to
work with the committee on them, on how to do that and save
many, many years on every major project.
Mr. Duncan. Well, we have got to speed these things up. The
last two major studies by the Federal Highway Administration,
one study said 13 years, one study said 15 years from
conception to completion. Many years ago when I chaired the
Aviation Subcommittee, the Atlanta airport people came to us
and they said that it took 14 years from conception to
completion for their newest runway, which is now several years
old, and it took only 99 construction days. It took them that
long to get all the approvals, and they were so relieved to get
all the final approvals and permits and so forth that they did
that in 33 24-hour construction days. I mean, it is crazy.
But, Ms. Primmer, you mentioned this dedicated source of
funding. Do you primarily envision that as a user fee type of
funding, or what?
Ms. Primmer. Yes. I do believe that a user fee would be an
acceptable way to have a dedicated source of funding. I
envision it as being something that can be used around the
seaport communities within a certain radius of the seaports in
order to support the connection points between the ports and
the inland distribution and warehousing here in our region, and
certainly in other parts of the country as well.
I would just like to take a moment to thank Mr. Miller for
his work on breaking down barriers in MAP-21 and taking a
leadership role there.
Mr. Duncan. He sure did, yes.
All right. Mr. Ajise, in 2007, California came up with this
Goods Movement Action Plan, and basically that is, in a way,
what we are trying to come up with. Tell us what lessons you
have learned that could help us in our efforts now. We are
trying to do that, of course, nationwide. But you have had 6
years', 7 years' experience with that. Has it worked? Has it
done some good, or has it fallen short?
Mr. Ajise. It has actually worked. We learned some lessons
about how it could work better, and we are in the process of
crafting a new goods movement plan as we speak and expect to
transfer some of those lessons from the GMAP process. I think
the GMAP was able to set us up for setting up a goods movement-
specific program which became the TCIF, the bond program for
the Trade Corridor Improvement Program. So we were able to go
from a plan to a funding element because we had consensus
around the GMAP as to what were true goods movement type
projects.
But I think what was key, though, what we learned most
importantly in the process is the value of bringing all the
stakeholders to the table, and the ones that were not at the
table, either through just omission or just not knowing that
they were key stakeholders, I think that is where the problem
was. That is who caused the most problem, because they were not
at the table at the time.
But what we are learning now is understanding and defining
what stakeholdership is around freight movement, and it is not
your typical run-of-the-mill of everybody that you think should
be around the table, because actually what we have today is
more inclusive. So we expect to use that lesson well to bring
others to the table that are not typically at the table when
you are talking about projects.
But I think the focus on understanding that freight
movement is a business, and having that as a core element of
the discussion, understanding that it is a business that also
wants to be responsible to the community, and bringing that
together ultimately I think is the lesson learned.
Mr. Duncan. We have 10 minutes before we have to leave to
stay on our schedule. Before Mr. Nadler and I close it out, I
want to ask Mr. Miller and Ms. Hahn if they have anything else
they would like to say.
Mr. Miller of California. Well, I feel for the process of
CEQA because I authored language to say you didn't have to go
through NEPA if you met or exceeded those standards, so that
helped a lot. But we need to drop a bomb on the State or
something to get them to do something more realistic because,
honestly, approving these projects----
Voice. You really don't mean that.
Mr. Miller of California. No, I don't mean it. But
approving these projects is so time-consuming, expensive,
cumbersome, and the delays you face cost just millions and
millions of dollars in the process of waiting for the project
to come to fruition. I thank you.
Ms. Hahn?
Ms. Hahn. Thank you. I heard that was Jesse's voice from
the back, and actually that is what I was going to say, is I
think we should all just come to the realization that these
great transportation projects are necessary for this country to
remain competitive globally. This is about creating jobs. This
is about easing congestion. This is about moving goods. But I
think we have to come to the realization that there has to be
mitigation for these projects. The health of my constituents in
Wilmington and San Pedro shouldn't be compromised just so goods
can arrive in Oklahoma on time. While the ports are a huge
economic engine, they are actually the largest polluters in
this region.
So, I agree. I mean, I think the EIRs need to be accurate
so that we don't have appeals and we don't have lawsuits, and
let's get the stakeholders in the front, work with the
Coalition for Clean Air, the NRDC, the AQMD. Get them to the
table in the beginning and find out how we can mitigate these
projects. That is the reality going forward, and I think we all
agree to that. These projects will be done quicker, and at the
end of the day they will be better projects.
Mr. Duncan. All right.
Mr. Nadler?
Mr. Nadler. Well, thank you, Mr. Chairman. I want to thank
everybody for participating in this. I think, at least around
this roundtable, I suppose, there is wide agreement, not on
everything, but wide agreement.
But one question we really didn't get an answer to, and I
am not sure if we are capable of getting an answer now, we
agree that there ought to be a trust fund, we agree X dollars
ought to be spent, but where the money comes into that trust
fund from no one has really been willing to say, and that is
the biggest problem we are going to have to face in Washington,
obviously, because everything else we talk about is pretty
meaningless if there is no source of those funds.
We can talk about a trust fund and how we allocate the
funds from that trust fund, but how the money gets into the
trust fund is crucial. There is a--some would call it a
problem, some wouldn't, but there is clearly an unwillingness
among many in Washington to increase the gasoline tax, to index
it to inflation, or to bring in other revenue sources. So we
are going to have to figure that one out. Otherwise, we are not
going to have a revenue source or sources from which to fund
what we want to fund, although everyone agrees, or at least
everyone in this room agrees that we need a robust freight
policy and a robust freight fund from the Federal Government to
supplement State and local efforts.
But we are going to have to face that key question, period.
I hope we can get some guidance on that because that is--I
mean, we are going to come back in this committee and the task
force is going to recommend a unified freight policy. I am sure
we are going to recommend some sort of trust fund. We are going
to recommend Federal participation. We are going to recommend
standards. But how to fund it, I don't know if we are going to
be able to recommend, but someone is going to have to figure
that out.
Thank you.
Mr. Duncan. All right. Thank you very much.
Let me just close by saying a couple of things. In addition
to our briefings at the airport and at the ports and with the
railroad people and all, we had a very good roundtable
yesterday with eight witnesses, eight experts, and then, of
course, culminating with this hearing here this afternoon. We
appreciate the hard work that all of our witnesses have put
into this, and the time.
But we had quite a few other people or groups that wanted
to testify. Now, we couldn't accommodate everybody, but we can
accommodate everybody in this way. If any of you on the panel
have any additional ideas that you have thought of or think of
later, or if anybody in the audience wishes to submit some
suggestions, we are open to that. The only thing I would ask,
we don't need a lot of flowery generalities. What we need, we
need specific, detailed suggestions, and that is what we want.
And so with that, I thank all of you--OK, you can.
All right.
Voice. Because none of these speakers----
Mr. Duncan. All right. Let me tell you, sir, I have tried
to be very fair to everybody in this, but we are not going to
do this.
This hearing is now concluded.
[Whereupon, at 3:26 p.m., the panel was adjourned.]