[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
HOW FREIGHT TRANSPORTATION CHALLENGES
IN URBAN AREAS IMPACT THE NATION
=======================================================================
(113-32)
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
__________
JULY 26, 2013 (New York, New York)
__________
Printed for the use of the
Committee on Transportation and Infrastructure
Available online at: http://www.gpo.gov/fdsys/browse/
committee.action?chamber=house&committee=transportation
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina ELEANOR HOLMES NORTON, District of
JOHN J. DUNCAN, Jr., Tennessee, Columbia
Vice Chair JERROLD NADLER, New York
JOHN L. MICA, Florida CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana STEVE COHEN, Tennessee
BOB GIBBS, Ohio ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York JOHN GARAMENDI, California
DANIEL WEBSTER, Florida ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida JANICE HAHN, California
JEFF DENHAM, California RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky DINA TITUS, Nevada
STEVE DAINES, Montana SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
------ 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
Patrick J. Foye, Executive Director, Port Authority of New York
and New Jersey................................................. 4
William J. Flynn, President and Chief Executive Officer, Atlas
Air Worldwide Holdings, Inc.................................... 4
Gerard J. Coyle, Vice President for Environmental and Sustainable
Operations, Evans Delivery Company, Inc........................ 4
William G.M. Goetz, Resident Vice President for New York City,
New Jersey, and Philadelphia, CSX Transportation, Inc.......... 4
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Patrick J. Foye.................................................. 36
William J. Flynn................................................. 40
Gerard J. Coyle.................................................. 47
William G.M. Goetz............................................... 58
SUBMISSIONS FOR THE RECORD
David A. King, Ph.D. & Jonathan R. Peters, Ph.D., written
statement; David A. King, Ph.D., Jonathan R. Peters, Ph.D. &
Cameron E. Gordon, Ph.D., Does Road Pricing Affect Port Freight
Activity: Recent Evidence From the Port of New York and New
Jersey (April 26, 2013)................................... \\
----------
\\ The written statement and report entitled, ``Does Road
Pricing Affect Port Freight Activity: Recent Evidence From the
Port of New York and New Jersey'' can be found online at the
Government Printing Office's Federal Digital System (FDsys) at
http://www.gpo.gov/fdsys/pkg/CPRT-113HPRT85538/pdf/CPRT-
113HPRT85538.pdf.
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HOW FREIGHT TRANSPORTATION
CHALLENGES IN URBAN AREAS
IMPACT THE NATION
----------
FRIDAY, JULY 26, 2013
House of Representatives,
Panel on 21st-Century Freight Transportation,
Committee on Transportation and Infrastructure,
Washington, DC.
The panel met, pursuant to call, at 1:37 p.m., at Alexander
Hamilton U.S. Custom House, One Bowling Green, New York, New
York, Hon. John J. Duncan, Jr. (Chairman of the panel)
presiding.
Present: Representatives Duncan, Hanna, Webster, Mullin,
Nadler, Lipinski, Sires, and Hahn.
Also Present: Representative Grimm.
Mr. Duncan. If everyone will please take their seats, I
want to first of all welcome everyone to this hearing, this
field hearing before the Transportation and Infrastructure
Committee's Panel on 21st-Century Freight Transportation.
Before we begin, I would like to ask unanimous consent that
Representative Michael Grimm be permitted to join the panel for
today's hearing. Without objection, that will be so ordered.
This special panel, as most of you know, 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 been given special cross-panel
jurisdiction to cover all the different panels of the
committee. So we have a real opportunity to do something good
or some good things with this panel.
As I have said before, the purpose of the panel is to
provide recommendations to the committee on ways to modernize
the freight network and make the United States competitive in
the 21st century. We have been working hard towards this goal,
holding multiple hearings and roundtable discussions and
visiting critical freight facilities in southern California and
the Greater Memphis area, as well as here in New York and New
Jersey.
We have traveled here today because this region is one of
the most important trade gateways in the entire country. What
goes on here in the transportation field is important to
everyone in this Nation. There are many facilities in this area
that are very critical to the efficient movement of goods into,
out of and around the Nation.
The purpose of today's hearing is to examine freight
transportation challenges in urban areas and how those issues
resonate throughout the Nation's freight system. Freight
transportation through urban areas is a complex endeavor and
has a dramatic impact on the Nation's freight system for many
reasons: congestion; ports and large freight facilities are
often located in urban areas; the density of the population;
the number of governmental entities present in each of these
regions.
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 urban areas and
how those issues impact the rest of the Nation.
I will introduce the witnesses in just a few minutes, but I
would like to first introduce the panel. We have a good cross-
section on this panel. I have the privilege of serving as the
Republican chair. The Democratic chair of this committee, the
ranking member, is Jerrold Nadler from this city, and most of
you know him.
We have Richard Hanna, who represents a district that
covers a pretty big area in upstate New York, around Syracuse.
He represents Binghamton and many areas from upstate New York
down to the Pennsylvania line.
We have Congressman Dan Lipinski from Chicago, and we have
Daniel Webster, who represents a part of Orlando in the suburbs
of Orlando.
We have Albio Sires, also from this area, who represents a
district just across the Hudson. We have been over there some
today. He represents Bayonne and part of Jersey City and some
other places.
We have Congressman Markwayne Mullin, who is from rural
Oklahoma, representing a district that throughout history has
been referred to as Little Dixie and once was the home of
Congressman Carl Albert, who was the Speaker of the House at
one point.
I haven't done this intentionally, but we have saved the
best for last, Janice Hahn, who is from southern California,
and we visited her district. She represents the ports of Long
Beach and Los Angeles and has many issues that we deal with in
our committee.
At this time, I would like to call on Congressman Nadler
for his opening statement or any remarks he wishes to make.
Mr. Nadler. Thank you, Mr. Chairman. Let me begin by
welcoming everyone to New York, and thank you for holding this
hearing in my district, this hearing on how freight
transportation challenges in urban areas impact the Nation.
Urban areas across the country share many common challenges
such as congestion, limited space, dense population, pressure
to commercially develop industrial land, and environmental
justice concerns. But New York is unique in certain respects.
New York and New Jersey never built a rail freight connection
across the Hudson River, cutting off all of the population
centers on the east side from the mainland rail transportation
network. As a result, New York City, Long Island, Westchester,
and southern Connecticut are completely dependent on trucks.
There is an often-cited statistic that about 43 percent of
intercity freight moves by rail in the United States. In our
region, east of the Hudson, that figure is less than 1 percent.
That means about 99 percent of all goods coming into the city
come by truck, most of that, almost all of that across the
George Washington Bridge.
As we saw on our tour this morning, there is a small
percentage of rail that travels by barge where we literally
float the railcars across the harbor between New Jersey and
Brooklyn. The rail barges provide a valuable service, but they
really represent the latest and pinnacle of 19th-century
technology. The barges are subject to the tides and the weather
and are generally insufficient for moving large quantities of
freight by rail. Since this is the committee's Panel on 21st-
Century Freight Transportation, I think that my colleagues will
agree that this is an obvious place to start making
improvements.
Our region's complete dependence on trucks exacerbates all
of the normal urban challenges New York City faces such as
pollution, a disproportionate impact on low-income and minority
communities, and a loss or degradation of underutilized rail
transportation assets. But it also creates adverse impacts for
the rest of the country. This bottleneck between northern New
Jersey and New York causes congestion all along the I-95
corridor. It increases the cost of doing business throughout
the global supply chain, and it places an artificial lid on
economic growth in one of the largest economic centers and
consumer regions in the country.
New York is also somewhat unique in that most freight
movement in our region is a bi-state effort. So I am pleased
that Port Authority Executive Director Pat Foye is here today.
I want to thank him for the Port Authority's hospitality in
hosting the panel's tour this week, and I look forward to his
testimony.
The Port Authority, along with FHWA, is currently
completing the environmental impact statement for the Cross-
Harbor Freight Movement Project, which is looking at a number
of alternatives for improving goods movement across New York
Harbor. It is no secret that I believe the evidence will show
that the preferred alternative will be to finally build a rail
freight tunnel connecting Greenville Yard, New Jersey, which we
visited this morning, to the Bay Ridge line in Brooklyn, a
portal which we also visited this morning.
The Port Authority was created in 1921 specifically for
this purpose, so I look forward to Mr. Foye's update on this
centuries-old project. We are about 100 years behind schedule,
but thanks to the Port Authority's leadership and a strong
partnership with the Federal Government, we are finally making
progress.
Of course, the $1 million, or perhaps the $1 billion, or
perhaps the several hundred billion dollar question, is how do
we pay for necessary freight improvements. While there are
willing private partners, it will not be nearly enough to meet
the immense needs all around the country. State and local
governments cannot shoulder the burden alone, nor should they,
when interstate commerce is inherently a Federal
responsibility. We will have to commit Federal funding, or else
we will continue to have plans and projects remain on the shelf
while our economy sputters.
It is my hope that through this panel we can offer some
solutions to address the many freight bottlenecks across the
country such as that which exists in New York City. Thank you
again, Chairman Duncan, for holding this hearing today and for
bringing the panel to New York. I look forward to hearing from
the witnesses. Thank you.
Mr. Duncan. Well, thank you very much, Mr. Nadler.
It occurred to me that as I was telling everyone about all
the districts that are represented here today, that I forgot to
tell you that I am from Knoxville, Tennessee, a very popular,
fast-growing area in east Tennessee.
I did ask for unanimous consent, and it was granted, to
allow our friend Michael Grimm to sit as a member of the panel
today. I did not see that he had come in while I was
introducing everybody, but we are certainly honored and pleased
that Congressman Michael Grimm, who is from Staten Island, as I
remember--is that correct? Staten Island is, what, about 80
percent of your district?
Mr. Grimm. Two-thirds.
Mr. Duncan. Two-thirds, and the rest in Brooklyn.
We are certainly pleased to have Congressman Grimm here.
Does anyone else want to make an opening statement? Anyone
else at all?
All right. Well, we will move right on into the hearing.
We have a very distinguished panel here today, starting
with Mr. Patrick Foye, who is the executive director of the
Port Authority of New York and New Jersey. We certainly
appreciate the treatment that we have been given by the Port
Authority during our time here.
We have Mr. Bill Flynn, president and CEO of Atlas Air
Worldwide Holdings.
We have Gerry Coyle, who is the vice president for
environmental and sustainable operations of the Evans Delivery
Company.
And we have Mr. Bill Goetz, who is head of the operations
for CSX for New York City, New Jersey, and Philadelphia, and
points in-between.
Certainly, we are pleased to have all of you here today.
And, Mr. Foye, we will let you begin.
TESTIMONY OF PATRICK J. FOYE, EXECUTIVE DIRECTOR, PORT
AUTHORITY OF NEW YORK AND NEW JERSEY; WILLIAM J. FLYNN,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, ATLAS AIR WORLDWIDE
HOLDINGS, INC.; GERARD J. COYLE, VICE PRESIDENT FOR
ENVIRONMENTAL AND SUSTAINABLE OPERATIONS, EVANS DELIVERY
COMPANY, INC.; AND WILLIAM G.M. GOETZ, RESIDENT VICE PRESIDENT
FOR NEW YORK CITY, NEW JERSEY, AND PHILADELPHIA, CSX
TRANSPORTATION, INC.
Mr. Foye. Chairman Duncan, thank you. Chairman Duncan,
Ranking Member Nadler, and members of the committee, welcome to
New York and thank you for holding this critical hearing on
freight transportation challenges.
My name is Pat Foye, and I am the Executive Director of the
Port Authority of New York and New Jersey. Under the leadership
of our Governors, Andrew Cuomo and Chris Christie, the Port
Authority operates the most important and diverse multimodal
portfolio of any transportation operator in the world. I
welcome your visit to see firsthand what the Port Authority is
doing to support the Nation's economy and its global
competitiveness.
Efficient freight service in the New York City region is
critical to job creation and retention in our region, and
indeed to our country's sustainable and prosperous future.
First, permit me a quick profile of the Port Authority and our
role in the national freight network.
The Port Authority operates the Nation's busiest
metropolitan airport system. Last year, that system handled 109
million passengers, with 1.3 million tons of international air
cargo, and three-quarters of a million tons of domestic air
freight. We are the largest maritime port on the east coast,
handling over 5 million containers, which is more than a 60-
percent share of the North Atlantic market. Our six
international bridges and tunnels handled 14.8 million truck
crossings last year, and nearly half of them used the George
Washington Bridge, a critical link on the I-95 corridor.
Other Port Authority facilities include the Nation's
busiest bus terminal, the PATH Rapid Transit System, ferry and
rail freight facilities, as well as the ongoing redevelopment
of the 16-acre World Trade Center site, including One World
Trade Center.
Let me speak about ports. Our port assets and associated
freight rail movements are critical to the health of our region
and that of the Nation. Today, freight passing through our port
can reach 20 percent of the U.S. population or more than 62
million people in fewer than 8 hours, and more than 30 percent
or over 94 million people in fewer than 48 hours.
All of our facilities play a distinct role in the delivery
of goods within the region and beyond. For example, the Red
Hook container terminal in Brooklyn, in Congressman Nadler's
district, is the only international maritime terminal with a
direct land connection to Long Island and is uniquely
positioned to receive and distribute international cargo to the
approximately 11 million residents east of the Hudson River. We
work every day to meet the needs of the Nation's largest
consumer market. Any slowdown of operations can result in an
economic blow not just to the regional economy but that of the
Nation. Studies indicate that a closure of our ports for only a
day would cost the Nation $1 billion a day.
At the Port Authority, we recognize the impact our
facilities have on the efficient movement of freight throughout
the region and the country. In the past decade, we have made
major investments to maintain our global competitiveness and
ensure that we meet the demands of the region. Over the last 10
years alone, the Port Authority and our private-sector partners
have invested approximately $2.6 billion to promote efficient
movement of freight. Over the last decade, we have also
provided more than $688 million in local matching funds for the
harbor deepening project which will deepen the main harbor
channel to 50 feet to improve navigational safety and pave the
way for larger cargo vessels.
Earlier this year, we broke ground on a $1.3 billion
project to raise the roadway of the Bayonne Bridge in
Congressman Sires' district to increase the navigational
clearance above the main harbor channel to 215 feet to
accommodate the new generation of larger and cleaner cargo
vessels.
We have committed $600 million to the development of our
ExpressRail intermodal network at our port terminals to support
expanded on-dock service by long-haul railroad serving inland
markets. ExpressRail reaches up to 90 million customers within
24 hours in markets throughout the Midwest and eastern Canada.
Through this service, it takes only 10 days to move cargo from
Hamburg, Germany, to Chicago by vessel and rail combined. Today
we have the capacity to handle more than 1 million containers
at our on-dock rail facilities, and by the end of the decade we
will have increased our capacity to 1.5 million containers.
Thanks to the support of Governor Cuomo and the tireless
efforts of Congressman Nadler, the Port Authority, in
partnership with the U.S. Department of Transportation, will
expand cross-harbor railcar barge service between Jersey City
and Brooklyn. I know you have seen that on your tour.
We are modernizing float bridges and barges that will speed
the service, as well as providing new low-emission locomotives
for use in both States. But we were interrupted by damage from
Super Storm Sandy this last October. This operation continues
to grow. Sixteen-hundred rail cars were carried in the first
half of this year alone, equivalent to removing more than 6,500
trucks from the area's roads. This represents the volume equal
to all of last year.
In the coming months, the Port Authority will approve a 10-
year capital program that will invest billions of dollars in
our freight infrastructure. In addition to the capital
investment we are undertaking to improve the efficient movement
of freight, we are implementing measures to ensure that our
investments benefit truckers who use Staten Island crossings to
access the Howland Hook facility, thereby improving the
movement of freight at this facility. The Port Authority will
also invest in an expansion of ExpressRail in Staten Island to
enhance that facility's competitiveness. Since 2000, we have
made $375 million in Howland Hook alone.
The Port Authority is proud to be a leader in multimodal
freight movement, but there are opportunities at the Federal
level to address our Nation's freight needs. The Port Authority
is strongly supportive of efforts to redirect revenues from the
Harbor Maintenance Trust Fund to the harbor operations and
maintenance dredging in order to protect our investment in
deepened channels. We are also strongly supportive of
innovative Federal financing and competitive grant programs
such as TIFIA, RRIF, and TIGER, in order to leverage public and
private capital investment locally.
The Port Authority, we are proud to say, has been approved
for up to $500 million of a low-cost TIFIA loan for the
replacement of the Goethals Bridge, a $1.5 billion project
connecting Staten Island and New Jersey. The Port Authority is
utilizing an innovative public-private partnership structure
for the Goethals, the first cruise surface transportation PPP
in the northeast region to access private capital.
We are also working on goods movement improvements at our
airports. The Port Authority recently completed a joint study
of JFK cargo activity with the city of New York to zero in on
strategies to preserve and expand this globally important cargo
center. We are also working to address obstacles for efficient
truck access, as well as to modernize our facilities and better
accommodate current industry needs.
There are many additional challenges to address. As
Congressman Nadler said, urban centers like the New York City
region will be the frontline of any national campaign to
implement an effective and efficient national freight strategy.
Metropolitan areas' share of the Nation's economic activity is
only growing. Most of the Nation's gateway ports, major air
cargo centers, and other intermodal hubs are in metropolitan
areas, where the movement of freight faces obstacles such as
chronic congestion, obsolete infrastructure, and competing land
uses. Any initiative must take into account potential community
impacts.
Finally, this year the Port Authority expects to complete a
comprehensive regional goods movement plan for the greater
metropolitan region in partnership with the New Jersey and New
York State Departments of Transportation. Our aim is to
coordinate a strategic approach to improvements across the
region. As we progress on this effort, I look forward to
working with this committee on a national approach for
multimodal freight movement. Thank you.
Mr. Duncan. Thank you very much, Mr. Foye.
Mr. Flynn?
Mr. Flynn. Thank you, Mr. Chairman. Chairman Duncan,
Ranking Member Nadler, and members of the committee's Panel on
21st-Century Freight Transportation, thank you for the
opportunity to testify, and I too commend you for focusing on
freight transportation.
I am testifying today as the CEO of Atlas Air, the world's
largest operator of Boeing 747 freighter aircraft. We are a New
York-based company, and we operate aircraft for the U.S.
Department of Defense, DHL, UPS, and major international
airlines such as British Airways, Qantas and Etihad.
Holding this hearing in the Alexander Hamilton U.S. Customs
House I think is quite appropriate. The first Congress, which
established the Customs Service in 1798, also faced serious
transportation problems. An inadequate waterway system and
sectional rivalries created commercial chaos that threatened
our Nation. Fortunately, the first Congress and President
Washington provided the leadership necessary to shape an
American waterways policy into a potent force serving the
public good. We need that kind of leadership today. Our
national freight networks are not adequate to meet the
challenges nor the opportunities that we face, which is why I
believe these hearings are so important.
In conducting regular flights through major U.S. airports,
Atlas has faced a number of challenges, particularly in urban
areas. In looking at these on a systemwide basis, I have
identified a number of constraints that hinder the ability of
Atlas and other cargo providers to efficiently and effectively
transport freight, and they fall into three categories:
physical, informational, and financial.
Let's start with physical constraints. When Atlas considers
worldwide freight networks, a significant constraint is the
severe congestion that exists in urban hubs, including the New
York-New Jersey metroplex. This congestion substantially
impairs just-in-time supply chains and could cause companies to
divert their traffic flows away from New York and New Jersey.
In fact, a recent MITRE study confirms that air traffic delays
in the New York-New Jersey metroplex have a profound ripple
effect on the entire air traffic network, costing hundreds of
millions of dollars every year in lost productivity and
certainly citizen and shareholder frustration.
We must address this constraint, and that is why Atlas
strongly supports the FAA's NextGen initiative and to focus in
the near-term on improving efficiency by using existing modern
technology and controller training to reduce airport and air
space inefficiencies.
NextGen also has the added benefit of reducing the
industry's carbon footprint, thereby positively impacting the
environment. From our view, there is no reason to prolong the
implementation of NextGen. Atlas and many airlines already have
the equipment and utilize the procedures necessary for NextGen.
While Atlas fully supports the full implementation and
funding of NextGen, we hope the U.S. Government will focus in
the near-term on aspects such as performance-based navigation
which do not require the development of new technologies nor
substantial monetary investment by the Nation or its airlines
but do require the regulatory approval of new procedures. In
order to accomplish this, we need effective leadership which
this committee can help provide.
As for informational constraints, a systematic problem that
Atlas and other carriers have experienced is that of the
inefficiencies with the U.S. Customs and border protection
procedures. Although there is no doubt that this process is
necessary, Atlas' global customers depend on on-time arrivals
and departures, but they also depend on the efficient
processing of our aircraft, aircrews, and cargo. More needs to
be done to modernize and streamline Customs and border
protection facilities, particularly with the inspection and
clearing of cargo.
Atlas strongly supports the TSA's risk-based approach to
transportation security, which we view as the only effective
way to address cargo security. The TSA and U.S. Customs joint
effort to implement the Advanced Cargo Air Screening Program
enables the collection of as much shipment information as
possible for the Government to identify at-risk cargo. TSA's
approach simultaneously addresses efficiency concerns by
developing a trusted shipper mechanism to identify and allow
for expedited processing of cargo from repeat reputable
shippers who pose less of a threat than the occasional single
shipper.
Cooperation is critical to the success of the risk-based
approach. Atlas applauds TSA Administrator Pistole's commitment
to working with industry to identify security and efficiency
problems and solutions. We look forward to continued Government
and industry collaboration.
As I have already explained, our national aviation system
is in need of modernization. Such improvements are critical to
growing the U.S. economy, workforce, and global
competitiveness. It is imperative that we as a Nation ensure
stable and secure financing. In doing so, I urge policymakers
not to adopt tax policies that would contribute to industry
instability.
Thank you very much for giving me this opportunity to
present my views, and I welcome your questions. Thank you, Mr.
Chairman.
Mr. Duncan. All right. Thank you very much.
Mr. Coyle?
Mr. Coyle. Chairman Duncan, Ranking Member Nadler, and
panel members, thank you for the opportunity to testify on
behalf of Evans Delivery Company and the American Trucking
Association. Evans Delivery Company is a national provider of
trucking and transportation services, handling or transporting
about 500,000 containers, intermodal containers per year. The
New York and New Jersey metropolitan area presents some unique
challenges for both motor carriers and shippers. As Congressman
Nadler and Congressman Sires know all too well, the New York-
New Jersey metropolitan area has some of the worst traffic
congestion in the Nation. Congestion in the region increases
freight transportation costs by $2.5 billion and slows the
movement and delivery of nearly half-a-trillion dollars' worth
of goods. Congestion also imposes significant public health
costs due to air pollution caused by vehicles sitting in
gridlock.
Map-21 requires DOT to identify the most costly highway
freight bottlenecks but does not provide separate funding to
eliminate them. We urge you to support a set-aside of funds to
fix these very costly barriers to efficient freight transport.
Tolls are another significant challenge, one that threatens
the razor-thin profit margins of many trucking companies and
puts New York ports at a serious competitive disadvantage. In
2011, the toll cost for a five-axle truck crossing one of the
Port Authority bridges was $40. In December 2015, the cost will
be $105. This is a whopping 163-percent increase. A recent
study found that for short-haul trucks serving New York port
terminals, tolls may represent up to 59 percent of the total
cost of delivery. This compares with a nationwide average of
about 1 percent.
Currently, Evans Delivery Company pays $247 in tolls to
transport a container from the Port of Philadelphia to
Brooklyn. In 2015, this cost will be $277. I was pleased to
learn, however, that the New York Container Terminal has
reached an agreement with the Port Authority to reduce the
tolls at Howland Hook. However, my understanding is the tolls
will increase once volume threshold is reached. And even at the
reduced rate, Howland Hook is still at a competitive
disadvantage in the market.
One of the tolling strategies being considered by New York
City is congestion pricing where tolls will vary by time of day
or level of congestion in order to facilitate the travel mode
and time of travel. Congestion pricing will not necessarily
work or be effective for commercial traffic since shippers, not
the trucking companies, determine the pickup and delivery
schedules. In addition, many of the terminals are generally
open between Monday and Friday from 6 a.m. to 6 p.m. This means
the transit companies will not be able to take advantage of the
lower toll rates during off-peak.
Increasing toll rates are particularly troubling when
revenue is used to subsidize projects unrelated to efficient
movement of traffic on the toll facilities. It is Congress'
responsibility, therefore, to protect the public from unfair
and destructive toll-setting practices, as Congressman Grimm
has proposed.
Another key issue of concern is efforts by ports to improve
air quality by outlawing older trucks and incentivizing motor
carriers to buy newer trucks with lower emissions. In some
cases, these efforts have also included new operational
mandates. Of particular concern was the Port of Los Angeles
program which mandated only employee drivers and banned owner-
operators from the port. Responding to the ATA challenge, the
U.S. Court of Appeals ruled that these requirements are
preempted by Federal law. It is important to note, however,
that ATA litigation did not in any way challenge the ports'
ability to impose clean truck programs. In fact, ATA was a
staunch supporter of the Port of New York and New Jersey Clean
Truck Program.
We also support a new EPA Port Drayage Truck Initiative
under the SmartWay Transport Partnership that provides
technical assistance, emission assessment tools, and
partnership recognition to port drayage companies that commit
to upgrade their truck fleet.
As you can see, there are many constructive, industry
supported, clean port initiatives that will have a real impact
on the environment. Efforts to eliminate the owner-operator
model will have a decidedly negative impact on the ports and
will not necessarily result in cleaner air.
Recently, the container terminals in the Port of New York
and New Jersey have been experiencing worse than usual truck
lines and cargo delays. While these delays are somewhat
unusual, similar gate-related delays regularly plague this
region and many other ports around the country. While ports
struggle to address these problems, Congress can assist by
addressing congestion outside the gate on highway intermodal
connectors that exacerbate poor transportation flows around the
Nation's ports.
Mr. Chairman, thank you once again for the opportunity to
testify. HAA looks forward to working with the committee to
craft a transportation reauthorization bill that addresses
urban freight transportation challenges.
Mr. Duncan. Thank you very much, Mr. Coyle.
Next we will hear from Mr. William Goetz.
Mr. Goetz. Chairman Duncan, Ranking Member Nadler, and
members of the committee, thank you for this opportunity to
participate today. My name is William G.M. Goetz, and I am the
resident vice president for this area with CSX Transportation.
CSX is a common carrier freight railroad providing surface
transportation solutions for our customers. Our 21,000-mile
rail network is the largest in the eastern United States.
I am delighted that you included New York City among your
visits. The unique character of this area provides excellent
examples of 21st-century railroading, effective public-private
partnerships, and success in times of crisis. These projects
also surface some issues that suggest consideration in future
transportation legislation.
This is a region whose population is very large and
growing. New York City's population grew 4 percent in the
current century, and those people want the same standard of
living as the people who are already here. In short, they want
their stuff. But much of the region's freight transportation
activity funnels into specific locations where infrastructure
bridges water. It is no accident that the time you spent here
earlier today, you spent on a boat. These assets are heavily
used, operate at capacity for many hours each day, and in some
cases need replacement. This region simply cannot overlook any
alternative to more trucks on this infrastructure.
You have heard from other cities about freight rail's
ability to shoulder more of the burden that would otherwise be
on the Nation's interstates. You may have seen or heard that
one train can carry as many as 280 trucks, while a railroad can
carry 1 ton of freight nearly 450 miles on a single gallon of
fuel. Those are impressive statistics, but here in New York we
can animate them with actual solutions. I would like to now
share two with you.
The first involves a very basic municipal activity that
occurs in every community in the United States, trash disposal.
As environmental considerations eliminate older methods of
waste disposal in this area, such as dumping waste in the ocean
or into one big hole on Staten Island, waste found itself in
trucks using those limited crossings I just spoke of. Frankly,
some of it still does, but much less so in recent years. Today,
all of the waste collected by New York City sanitation on
Staten Island is loaded into containers that leave the region
by train rather than by truck. And rather than consume highway
capacity on the heavily used Goethals Bridge, Staten Island's
waste leaves the island on a train using an adjacent railroad
bridge that had been unused for many years. Similar solutions
are serving the Bronx and portions of Brooklyn.
A second example involves the region's seaport and the
challenge of densely developed regions. A growing trade for the
port is the movement of containers to and from the North
American interior. The challenge is that the port is separated
from interior markets by densely populated northern New Jersey.
Constrained highway capacity prompted examination of
alternatives, and freight rail provided those alternatives and
then improved them further. Today, vessels calling at New York-
New Jersey marine terminals discharge cargo for numerous
destinations in North America that are loaded on rail cars
within the marine terminal complex and leave the port on a
train. They never see a New Jersey public roadway.
In April 2013, the New York-New Jersey Port Authority's
ExpressRail terminals processed 37,631 containers in this port
rail system, and 3 years ago the system was improved by
confronting another barrier, this time a geological one. A
railroad route connecting the port to the national rail network
had tunnels passing underneath the New Jersey Palisades that
were too low to accommodate trains that stacked one container
on top of another. One tunnel, 4,200 feet long, had been dug
through solid rock when Abraham Lincoln was President. It was
enlarged as part of a Federal public-private partnership in
less than 1 year.
Using freight rail as a transportation solution has another
benefit that was tested in 2011 and again in 2012, resiliency.
In the aftermath of Hurricane Sandy, containers destined for
the New York-New Jersey Seaport were diverted to other ports
and promptly became stranded in those ports, with over 7,000
containers in Virginia and smaller numbers in Baltimore and
Philadelphia. Moving them back here became a monumental
challenge. Evacuation using special CSX trains brought
thousands of containers back into this market for distribution
here.
These local successes point to some important public policy
points. First, it is important to preserve existing freight
corridors for present and future freight use, and that seems
almost like a self-evident statement. But this can become
complicated when the proposed nonfreight uses are popular. One
example is inadequately funded passenger rail projects. Freight
railroads are not opposed to the expansion of passenger rail
provided that the new passenger services are adequately funded
and do not come at the expense of good freight service,
compromise future freight capacity, or impose new risk without
adequate economic consideration.
I have two examples where CSX has advanced initiatives
where passenger rail and freight rail both benefit, instead of
one at the other's expense. Master planning in Massachusetts,
for example, expanded commuter rail service between Worcester
and Boston and brought a modern freight terminal to the State.
In Florida, new passenger services are planned in the Orlando
market and a modern freight terminal will be developed on a
different line in Winter Haven.
The second transportation public policy point deals with
reducing the time and cost of bringing a project to a state of
shovel-readiness. Public transportation investment scrutiny
should do two things, stop poor projects from advancing and
promote good projects to completion. These two forces should
operate in tandem in an atmosphere of shared urgency. Current
processes simply take too long to weed out bad ideas and too
long to approve good ones. An approval delayed is an approval
denied.
One of the specific challenges railroads encounter in our
public-private partnerships is securing approvals from State
historic preservation offices. Disconnects can occur when
regulators begin to regard railroads as museums. While many
railroad assets were well designed, are noteworthy, and are
worthy of preservation focus, care must be taken to avoid
freezing every railroad asset into a 19th-century image.
Positive train control provides a current example. As railroads
begin the process of permitting antennas and cell towers
necessary for our PTC communication, certainly we hope the FCC
approval process, which includes consultation with State
historic preservation offices, amongst other requirements, can
be handled expeditiously.
Mr. Chairman, thank you for this opportunity to participate
today. I am happy to answer any of your questions.
Mr. Duncan. Well, thank you very much, Mr. Goetz.
I want to thank all the witnesses.
We have the greatest transportation system in the world.
But I don't care what your job is or your industry is, if you
are not always constantly trying to do more and do better, you
are going to fall behind. We have more competition from around
the world than ever before, and many countries, even several
that are much poorer than ours, seem to realize even more than
our Nation today the importance of improvements in
transportation and infrastructure. So we have got to keep
pushing. We have got to keep moving ahead.
I am going to go first to Mr. Hanna for any comments or
questions that he has because he is going to have to leave
shortly to go to the airport, and certainly he has been a very
valuable member of our panel.
Mr. Hanna, I will recognize you at this time.
Mr. Hanna. Mr. Chairman, thank you very much.
Mr. Foye, Greenville Yard, when do you expect to have an
agreement between yourself, your organization, and Conrail? And
do you think, if you have that process underway, do you believe
you will have it done under the current administration with
Mayor Bloomberg?
Mr. Foye. Congressman, we have been at work in negotiating
with the city with a private company which has been preselected
by the city of New York, and with the railroads. We made a
great deal of progress. A meeting with the railroads is
scheduled for next week. I think a great deal of progress has
been made towards that aim.
We will keep the committee briefed as to how those
discussions go. I personally am optimistic that an agreement
will be reached. The city of New York and the mayor are very
focused and committed to the project, as is the Port Authority.
I am hopeful that an agreement can be reached before the end of
the Bloomberg administration.
The other thing I would say is a great deal of work has
been completed already on a draft environmental impact
statement which will be ready for release in the fall of 2013.
We have done that in partnership and consultation with the
FHWA, which has provided valuable input into that draft EIS,
and draft chapters are available for review.
So I am hopeful that before the completion of the Bloomberg
administration on December 31st, that we will be able to have
an agreement in principle with the railroads.
Mr. Hanna. Without divulging anything that might be in
negotiations you won't want to talk about, what are the
obstacles that you have up to now and that you see going
forward?
Mr. Foye. Well, Congressman, there are a couple. It is
probably not going to surprise you that one of the obstacles is
funding and financial. I have made a proposal to the city and,
through my colleagues, to the railroads, and I am hopeful that
we will be able to reach agreement on that. There are also
technical and logistical issues on the New Jersey side related
to the layout of the track in Greenville that is a very
precious and limited resource. And there is also a private
company, Tropicana, which has an interest, and we have to make
sure that their legitimate commercial interests aren't
compromised.
So it is a combination, Congressman, of financial and
funding issues and logistical and what I will call railroad
real estate issues which are in the process of being worked
out.
Mr. Hanna. And CSX has similar concerns in the same yard, I
understand.
Mr. Foye. Yes, sir.
Mr. Hanna. Thank you for that. I appreciate it very much.
Mr. Coyle, hours of service. One of the things is that you
are about to come under a new rule, right? You are aware of
that, the new hours-of-service rule?
Mr. Coyle. Yes. That started July 1st.
Mr. Hanna. Right. And one of the interesting things about
that rule, as I understand it, it was initiated or put in place
before the study was complete.
Mr. Coyle. Yes.
Mr. Hanna. Which I take tremendous exception to. But in
terms of what you spoke about earlier, with the delays at some
of these ports, which are understandable in so many ways--we
need to do what we can to change that--would you give me some
idea of how the hours-of-service rules, under the new rule,
affect your profitability and how they affect your drivers and
just generally break that down for me?
Mr. Coyle. Well, the 30-minute rule requires a driver to
take a 30-minute break. It requires him to go park the truck
somewhere. So he can't take his break while he is unloading or
while he is on duty in any way. So basically, it adds another
half-hour to their day. If they are waiting in line, they can't
take their break.
Mr. Hanna. So they can be resting, waiting in line,
watching the traffic go nowhere, and yet using up their time,
you are paying for the truck, paying for everything that goes
into that.
Mr. Coyle. Yes.
Mr. Hanna. And then the person has to pull off someplace
and rest again based on--these are mostly local deliveries. Not
all of them, of course, but a lot of them are just moving from
a very short distance.
Mr. Coyle. Yes.
Mr. Hanna. So maybe you can give me an idea what that costs
you.
Mr. Coyle. We have 2,000 drivers, so the cost could be
significant in terms of what it will cost them per day, per
driver. I don't have an estimate, but I know it would be
significant.
Mr. Hanna. Any idea, if you could do something immediately
to change that, what would you do?
Mr. Coyle. Well, I think one of the issues that we had was
the 34-hour restart after 5 days. What I have seen is that this
has affected now customers who occasionally need weekend
service. You need to keep your drivers in the cycle. So what
this does, it gets them out of cycle, and I just really had to
say to a customer if you want to do weekend service, you have
to do it every weekend. You can't do it this weekend and not
next, because the drivers get out of sync, and then they have
no available hours.
Mr. Hanna. Thank you. My time has expired.
Thank you, Chairman.
Mr. Duncan. Congressman Nadler?
Mr. Nadler. Thank you.
Mr. Coyle, you state in your testimony that, ``It is
important to note that the ATA litigation did not at any time
challenge the ports' ability to impose clean truck program
mandates.'' Yet, the Federal preemption statute is very broad,
and I believe that it could be read to tie the hands of local
jurisdictions from remedying the public health and safety
concerns created by port trucking operations.
That is why I have introduced legislation in the past, and
plan to again this Congress, to ensure that ports can adopt
clean truck programs without running afoul of Federal law. Do
you agree that without a change in Federal law, polluting truck
bans could be successfully challenged in court, although the
ATA has not yet chosen to challenge them?
Mr. Coyle. Our feeling is that the most effective programs
would be voluntary programs, that we would get stakeholders to
agree to programs, as has been done in other ports. It has been
done in Virginia; it has been done in Savannah, in Charleston,
to help clean up the drayage trucks. So we do not believe----
Mr. Nadler. You may prefer a voluntary program, but the
question is do you agree that without a change in Federal law,
polluting truck bans could be successfully challenged in court?
Mr. Coyle. They could be.
Mr. Nadler. They could be. So, you agree with that.
Mr. Coyle. Yes.
Mr. Nadler. Thank you. Now, last month the Supreme Court
ruled that certain enforcement provisions of the Port of Los
Angeles clean truck program were preempted by Federal law,
including a requirement that trucks have off-street parking.
The Court declined to comment on the authority of the ports to
use concession agreements to enforce provisions of the program
that remain in place. The ATS previously testified before the
Transportation Committee that concession agreement requirements
are unnecessary and anti-competitive.
Do you agree that without a change in Federal law,
polluting truck bans have very little teeth?
Mr. Coyle. I'm sorry, I didn't hear that last part.
Mr. Nadler. Do you agree that without a change in Federal
law, polluting truck bans have very little teeth?
Mr. Coyle. Only from an enforcement standpoint, not from a
voluntary standpoint.
Mr. Nadler. Well, very little teeth means they cannot be
enforced, and obviously you don't have to enforce them if they
are voluntary.
Mr. Coyle. Yes.
Mr. Nadler. OK. Under current law, in what ways can a port
enforce regulations to remedy public health and safety concerns
created by port trucking operations without affecting the
price, route, or service of a motor carrier, which is the
Federal standard at present?
Mr. Coyle. I don't know the answer to that.
Mr. Nadler. OK, which is consistent with what you said a
moment ago, because you said that really they probably
couldn't. So, let me ask you one final question.
Would you oppose--I know you prefer voluntary compliance,
but not everybody is--a lot of trucking companies, all kinds of
operations, sometimes voluntary isn't sufficient. Would you
oppose legislation to allow ports to impose requirements, in
effect to get the Federal Government out of the way of
preemption? To loosen the Federal preemption.
Mr. Coyle. Yes.
Mr. Nadler. You would oppose it.
Mr. Coyle. Yes.
Mr. Nadler. Why?
Mr. Coyle. The Federal laws were enacted for a reason, and
to abandon those I don't think would be productive. I think
Federal laws were enacted to create a uniform system throughout
the Nation, and I don't believe that by letting a mechanism by
which each port could decide what rules and regulations they
were going to have would be productive. I think it needs to
be--if you wanted to do something----
Mr. Nadler. It wouldn't be productive to let each port
decide that because it would interfere with something? In what
way?
Mr. Coyle. For example, we have trucks in most ports, and
we would not like to see different rules and regulations in
each one of the different ports. I think it interferes with
interstate commerce.
Mr. Nadler. Because the same trucks would have to have
different standards at the beginning and end of the trip?
Mr. Coyle. Correct.
Mr. Nadler. OK. Thank you.
Mr. Foye, what is the status of the Cross Harbor Project
EIS now?
Mr. Foye. Congressman, draft chapters have been prepared.
They are being reviewed internally by the Port Authority and
FHWA. A great deal of progress has been made. I think we have
tried our best to keep your office informed, and there should
be a draft EIS later this fall into the winter.
Mr. Nadler. I'm sorry?
Mr. Foye. Later this fall into the winter months.
Mr. Nadler. Into the winter. Thank you.
And what kind of infrastructure improvements in New York
and New Jersey would you think are needed to make the Cross
Harbor Freight Project a viable reconnection of the Southern
Rail Gateway for freight transport?
Mr. Foye. Well, I think, Congressman, many of you saw the
barge. The barge is a fairly fully depreciated piece of
property. I will say it that way. Obviously, Super Storm Sandy
exacted significant damage on the Greenville facility. So I
think that infrastructure, both in Brooklyn on the Bay Ridge
line, as well as new, more efficient, energy-efficient barges,
as well as infrastructure on the Greenville side, would be
helpful in terms of maximizing this opportunity.
As I noted, in the first 6 months of this year, we have
already carried 1,600 railcars, which is equivalent to volume
for the entire year last year, which takes into account the
period after Super Storm Sandy when, frankly, the facility was
not operating.
So there will be a significant amount of infrastructure
investment on both sides of the Hudson that will be required.
Mr. Nadler. Thank you. My last question is, if you had a
say, what are the biggest challenges and obstacles to making
the Cross Harbor Freight Project a truly successful freight
transport option in this multilayered, multi-island, multimodal
urban environment?
Mr. Foye. Well, Congressman, I think first the Port
Authority has made a significant financial investment.
Obviously, we are thankful for your efforts in terms of the
$100 million Federal commitment. We have tried to be wise
custodians of that. Getting to the volumes that we think are
possible over a period of years--and that number would be
45,000 to 55,000, years out--will require----
Mr. Nadler. 45,000 years out?
Mr. Foye. No, 45,000 to 55,000 containers, years out.
Mr. Nadler. Oh.
[Laughter.]
Mr. Foye. That is what I would expect the EIS--it is a long
time----
[Laughter.]
Mr. Foye [continuing]. What I expect the EIS, the draft EIS
will indicate. A significant amount of money is going to be
required for that. I think, frankly, this is a project that is
regional in nature. I think it should be supported by the
Federal Government. I think it is an example of the States of
New York and New Jersey, and the Governor of New York and the
Governor of New Jersey, working together on this project, and I
think that the regional focus that USDOT has taken on other
projects like the Alameda Corridor, et cetera, is being
replicated in the Cross Harbor situation, and I would hope that
USDOT would take that into account as it makes funding reviews
and funding decisions going forward.
Mr. Nadler. Thank you. I just might add that hopefully we
will have in the next bill, as we did in the last, although it
wasn't funded, I hope in the next bill we will have a funded
version of the Projects of National and Regional Significance
section that might impact that.
Thank you. My time has more than expired.
Mr. Duncan. Thank you very much.
Mr. Webster?
Mr. Webster. Thank you, Mr. Chairman.
And thank you, presenters, for giving us good insight on
what is going on here.
I had a question for Mr. Foye, because we have, as we have
gone around and had different hearings in other places, and
also in Washington, one of the things we have discussed is the
fact that we are working on sort of a national freight movement
program, and yet many of us do not want to interfere with the
fact that there are local communities and their NPOs, and they
build programs for transportation in their State, and then
their State adopts a program, and that is normally the case,
and yet freight lines go beyond that and go multistate.
You are in a particular situation which is unusual, that I
have not seen, in that not only do you do airport but seaport,
and it is multistate, and certainly multicity. When we were in
Los Angeles, there is the Los Angeles Port Authority owned by
the city, and then right next to it is the Long Beach Port
Authority, and they are both big, and they do work together,
but they are not combined.
I guess my first question is, how many NPOs do you work
with?
Mr. Foye. Congressman, basically two, one on the New York
side, one on the New Jersey side.
Mr. Webster. And you have Governors, you have
multijurisdictional areas in that seaport and airport. How does
that all work?
Mr. Foye. Sometimes, Congressman, it doesn't, but often it
does. New York, for instance, is a home rule State. The primary
jurisdiction that we deal with on the New York side is,
obviously, the city of New York, but also the port district
extends beyond the city. On the New Jersey side, obviously with
the New Jersey Governor's Office, the New Jersey Department of
Transportation, and a series of cities on the western side of
the Hudson.
I have to say that between the States and the State
Departments of Transportation, there has been a great deal of
collaboration and cooperation. One of the issues that I think
frustrates many who are focused on Federal infrastructure
issues and building and replacing infrastructure--and
obviously, in this part of the country, the primary focus is on
rebuilding, maintaining, and replacing existing
infrastructure--is that the current permitting process at all
levels of Government is slower than it should be, that it is
unduly expensive and uncertain, and especially with projects
that involve, for instance, replacement of existing
infrastructure. Surely, there must be a way in which the
legitimate interests that are so important to all of us of
protecting the environment can be balanced in an appropriate
way with economic growth and job creation and retention.
Mr. Webster. Do you have any suggestions on what may be
done to streamline that?
Mr. Foye. Well, I do, Congressman. One thing I will note
that was important to the Port Authority on the Bayonne Bridge
project was President Obama's announcement of a Federal
Dashboard with respect to certain important infrastructure
projects around the country. The Port Authority, I am proud to
say, was the first agency in the country to file for treatment
under the Dashboard on the Bayonne Bridge, and we were granted
that treatment by USDOT, and I think it helped accelerate the
project.
I will also note that Governor Cuomo achieved similar
expedited treatment with respect to the Tappan Zee Bridge. I
will note that both the Tappan Zee Bridge and the Bayonne are
replacements of existing infrastructure assets, and I think
that type of expedited approach is something that, frankly,
ought to be applied to important infrastructure projects around
the country, especially given the uncertain economy that we
live in and the levels of unemployment that are unacceptable to
all of us.
Mr. Webster. Would that be for new and replacement
projects?
Mr. Foye. Congressman, I would submit yes. I think the case
is clearer on a project in Bayonne, and let me just take a
couple of seconds to tell you about the Bayonne Bridge. On the
Bayonne Bridge, we are not building a new bridge. We are not
knocking a bridge down. We are raising the roadway of the
Bayonne Bridge to allow larger container ships to access the
harbor following the completion of the Panama Canal. Given the
fact that we are not building a bridge or knocking a bridge
down, it seems to me the environmental impacts are relatively
limited. I think the President took that into account in
including the Bayonne Bridge project on the Federal Dashboard.
There is infrastructure around the country that needs to be
replaced, updated, modernized, et cetera, and I think a more
streamlined approach that took that reality into account, along
with the fact that the state of the Nation's infrastructure is
currently a drag, a burden on economic activity and job
creation, and lifting that burden would not only expedite
projects but I also believe would result in increases in
employment and economic activity.
Mr. Webster. Thank you, Mr. Chairman.
Mr. Duncan. Thank you very much.
Mr. Lipinski?
Mr. Lipinski. Thank you, Mr. Chairman. It is good to be
here in Congressman Nadler's district. I certainly look up to
Congressman Nadler, and we share maybe not the same exact types
of projects but, coming from the Chicago area, there are a lot
of things that we have in common because our areas share some
of the same issues when it comes to transportation.
I have to say also, when thinking about coming here, good
luck to the Yankees with Alfonso Soriano.
[Laughter.]
Mr. Lipinski. And please, Yankees, please send Joe Girardi
back in 2015 to Chicago so he can manage the Cubs in the World
Series.
But moving on, Chicago, about 1.5 million tons of freight
moves through Chicago annually. About 5 percent of that either
comes into or comes from this area. We certainly have great
transportation needs there to move freight. We have the Chicago
Regional Environmental Transportation Efficiency Program, or
CREATE, which is updating from the 19th century the rail lines
in the Chicago area. It is a public-private partnership, and
that is one question before I move on.
Mr. Foye, is there private investment involved with the
tunnel project?
Mr. Foye. With the tunnel project, Congressman?
Mr. Lipinski. Yes.
Mr. Foye. Let me begin----
Mr. Lipinski. Well, I was just wondering, just quickly.
Mr. Foye. Well, the tunnel project is an option that is
going to be studied in the Cross Harbor EIS. Certainly, private
capital is something that ought to be considered. As I
mentioned, we are using private capital on the Goethals Bridge,
and I think it would be premature to comment on the
availability of private capital.
Mr. Lipinski. Yes, I was just wondering. It is great to
see, after hearing Mr. Nadler talk about it for a number of
years, it is great to see where this would go. But I just
wanted to really raise what Mr. Nadler had there at the end of
his questions about the Projects of National and Regional
Significance.
In SAFETEA-LU in 2005, I was able to get $100 million for
CREATE out of that pot of money. Unfortunately, in MAP-21 it
was authorized for 1 year and not appropriated any funding. I
want to get you on record, Mr. Foye, as saying this is
something that you certainly do support for these mega-
projects.
Mr. Foye. Congressman, enthusiastically, yes.
Mr. Lipinski. Very good. It is very difficult to move
forward with any of these projects that are really of national
and regional significance without having the Federal Government
involved there, and I think that is one of the things I want to
make sure comes out of this freight panel.
I wanted to ask Mr. Goetz--actually, let me move on to Mr.
Flynn. Let me ask Mr. Flynn a question here.
Something that we have heard in a couple of these hearings
but we don't hear as much about his NextGen. I certainly think
that is critical for air transportation systems. We hear about
it mostly for passenger transportation, but it is also
significant for freight movement.
Are your aircraft equipped for NextGen?
Mr. Flynn. Thank you, Congressman. Yes, our aircraft indeed
are, and we are using performance-based navigation, a feature
of NextGen, already. Working jointly with the FAA and with UPS
and FedEx, we were able to develop the procedures to use
performance-based navigation into Anchorage. We also use it
here depending on time of day and conditions in New York into
JFK, and we think that, based on what we have seen in Los
Angeles and the successes we have had with performance-based
navigation there, that there are real successes, a real basis
to expand, and we think airports like Miami and Cincinnati and
indeed Chicago would be good candidates to move performance-
based navigation forward.
Mr. Lipinski. Do you have any studies or could you give us
any sense of the difference that it would make in terms of the
way that freight is moved, how it would ease congestion and
other modes of freight transportation?
Mr. Flynn. Sure. So, performance-based navigation, as you
pointed out earlier, or NextGen, benefits passenger and air
freight alike, and cargo alike, and I think there are three
areas of benefits.
First, it will increase capacity. So where we have limited
airspace or limited ground space, such as in JFK for landings
and takeoffs, performance-based navigation will increase
capacity without having to pour more cement and develop
infrastructure. When we think about budgetary constraints, that
should be compelling.
Performance-based navigation also limits the communication
that is required between the airplane and the tower, and that
goes to limiting what could be communication congestion.
And then finally, performance-based navigation will allow
us to reduce fuel burn. Not only does that save operating
costs, but when you think about the environmental impact of
just simply burning less fuel to arrive at the airport, it is
significant. For a smaller company like Atlas--we have 100 to
120 international arrivals a week into the United States--the
impact of PBN across the network we fly probably would save
something on the order of 10 million tons of carbon when
measured from carbon emissions. When you think of 100 or 120
arrivals for just Atlas, magnify that again by UPS and FedEx,
and then across our domestic passenger airlines, it is a very
significant environmental impact.
Mr. Lipinski. Thank you.
Mr. Flynn. Thank you, sir.
Mr. Duncan. Thank you very much.
Mr. Mullin?
Mr. Mullin. Thank you, Chairman. Thank you for allowing me
to be here. As you can tell, I am from rural Oklahoma, and I
would have put a suit on but I had a wardrobe malfunction this
morning, meaning I didn't pack a suit.
[Laughter.]
Mr. Mullin. I still think it is an honor to serve here and
an honor to have such a great opportunity to be in your city.
But as I hear people talk, coming from the business world, my
biggest headache was Federal regulation. It was the biggest
competition I had in business, period, and trying to adjust for
the new Federal regulations that were coming into our company,
it was constantly causing us challenges. I looked around one
day and I figured out, you know, the biggest threat to my
business is Federal regs and trying to compete at the same time
and trying to grow causes conflict.
Mr. Foye, you had heard the same testimony that Mr. Coyle
had mentioned about the charges for the trucks that are coming
through the tunnels going from $40 to $105. Where is that good
for the local economy? When you think about it--I have a
trucking company too, and what I basically do every time a new
reg hits me is I don't have a choice but to pass it on to my
customers. And knowing the state of the economy, knowing how
everybody is just literally scratching at the bottom of all of
our pockets trying to get by, and we are taking charges from
$40 to $105, which at least the trucking industry in a way can
pass it on to their customers, but at the same time it is the
cars that are passing through there, the commuters, how do
their costs grow?
Mr. Foye. Well, Congressman, the tolls that are generated
from the Port Authority's bridges and tunnels, primarily the
George Washington Bridge, are dedicated to the Port Authority's
Interstate Transportation Network, and the Interstate
Transportation Network is comprised of the George Washington
Bridge, the Lincoln and Holland Tunnels, and the three Staten
Island crossings that Congressman Grimm is very familiar with,
as well as PATH, which is a commuter rail system between New
York and New Jersey.
Mr. Mullin. I am well aware. The Port Authority has done
just a wonderful job taking us around and showing us, and I am
grateful for it. But I am still floored by the fact that since
2005, just trucks alone has raised from $40 to $105, and I am
still trying to figure out how that is good. I understand the
infrastructure needs. I understand the investment that is
needed, and I understand the tremendous task that you guys
have. But the end result is that it is the consumer that is
paying for that. It is everybody that goes and picks up a
bottle of water, everybody that goes to Starbucks and buys
their coffee. They are the ones that are having to pay for
this.
Mr. Foye. Well, Congressman, that is correct. The reason I
mentioned PATH, for instance, is it is part of the Interstate
Transportation Network. Like most mass transit, frankly, around
the world, but certainly mass transit in the United States,
PATH loses $300 million a year from operations because there is
a subsidy for commuter riders, just as there is at the MTA and
every mass transit system in the United States. That is one.
Two, the tolls, the revenue from bridges and tunnels is the
basis for the reinvestment. I mentioned that we are investing
$1.5 billion in the Goethals Bridge.
Mr. Mullin. I understand that. So the cost has risen that
much? I mean, it has tripled basically, to keep up with the
infrastructure needs? Because your tolls have gone up that
much. What you are charging people has gone up that much. Or is
it because of the cost of doing business, because you have to
comply with all these different Federal agencies out there?
Mr. Foye. Well, certainly, Congressman, the cost of
compliance and regulatory issues has increased.
Mr. Mullin. So what do you think you are spending on that?
In your all's budget, just roughly, what do you think you are
spending to comply with the Federal Government?
Mr. Foye. Congressman, I don't have a number. I will say
this. I think the cost of compliance with regulation at the
Federal level is a significant cost.
Mr. Mullin. Does it outweigh actually the costs you are
spending for actual infrastructure needs?
Mr. Foye. No, sir, but it is a significant amount of money.
I don't want to make a number up. I would be happy to come back
to the committee with a number.
Mr. Mullin. I would be curious to see what you are spending
to comply with Federal Government regs and local regs versus
what you are actually even spending on payroll.
Mr. Foye. Congressman, I will make a note and come back to
you and the committee with that number. It is a significant
number. I think, frankly, it is for any governmental or public
sector or private sector employer or company.
Mr. Mullin. Any business owner.
Mr. Flynn, I know you know what I am talking about, too,
and the other companies that are here. That is a challenge we
all face. The point that I am trying to make is we are
continuously passing this on, one after the next, and we are
costing the economy money when we have true infrastructure
needs. It is not just New York. It is not just this area that
we have infrastructure issues. It is all across the United
States, and we need to start showing this, because everybody
else is having to pay for it.
But I thank you for your time.
Mr. Duncan. Thank you very much.
Some people in the audience might be interested to know
that 42 percent of the House is new, in the last 2\1/2\ years,
the last two elections. That is the greatest turnover in
history, and Mr. Mullin is a representative of the freshman
class, but he is kind enough to be joining us today on his
birthday. So, we are pleased to have him with us at any time.
Mr. Mullin. I am 25. I am finally old enough to serve, by
the way.
[Laughter.]
Mr. Mullin. I am kidding.
Mr. Duncan. Mr. Sires?
Mr. Sires. Happy birthday, Congressman. I noticed you had a
New York hotdog for your birthday.
Mr. Chairman, thank you very much for bringing us all
together to New York, and I thank all the Members for being
here.
Mr. Goetz, I know you have been very quiet there in the
corner, so I have a question for you. I know that your company,
CSX, has received a TIGER grant for your National Gateway
Project.
Mr. Goetz. That is correct, sir.
Mr. Sires. I just wonder if you can talk a little bit about
your experience with TIGER grants and the project you have
undertaken. Can you talk a little bit about what appropriate
role the Federal Government should be in the freight investment
business?
Mr. Goetz. I would be happy to. It is correct that we did
receive a TIGER grant for our National Gateway Project, which
basically replicates a couple of hundred miles south of here
what is already in place here in the New York-New Jersey area,
a full double-stack-compatible rail network into waterfront
ports. We already have that here in New York and New Jersey,
and it is running right now as we speak. But in some of the
ports south of here such as Baltimore and Hampton Roads,
shippers do not have that double-stack option. That money is
being used to bore out tunnels, build new terminals, do the
things that a 21st-century freight network requires.
To answer your question, what we find is that when Federal
money, either through TIGER or through a Project of National
and Regional Significance, is applied, it definitely ramps up
the administrative process that goes with that, and it
definitely takes a lot more time. I mentioned in my testimony
that it immediately triggers NEPA, and ultimately it triggers--
because railroad assets tend to be old, it triggers activity
from State historic preservation organizations.
Not that any of that is bad, but it is slow, and oftentimes
there isn't a specific mandated timetable for these processes
to be completed. So, Congressman, they can drag on forever, and
I can give you an example in your own district with the tunnel
that I spoke of, boring that out. That had a very thorough
review by the State historic preservation office. One aspect
that took time, which seemed rather incomprehensible to us, was
the color of the bricks inside the tunnel. This is a tunnel
that is not open to the public, is unlighted, and is pitch
dark.
Mr. Sires. It is cultural.
[Laughter.]
Mr. Goetz. So the answer to the story is we picked the
right color, and I am glad we did. But the question is, is that
really a good use of time?
Mr. Sires. I certainly agree with you. I make fun of it,
but I certainly agree with you, having served in local office
and having to deal with some of the EPA and other agencies.
Mr. Foye, let me just preface this. Sometimes in
Washington, people question the money for dredging and some of
the money that is spent in this region because they think it is
too local. And I know you talked about a little bit the impact
nationally. Can you just elaborate on the impact nationally
when we do a dredging and the Federal Government gives us $70
million or $80 million to do the dredging per year? What is the
national impact?
Mr. Foye. Well, Congressman, the dredging is something that
has been done in this harbor, frankly, going back to
revolutionary days. It is critical to maintaining the
competitive posture of this harbor. The Harbor Maintenance Tax
in 2012 in this region generated $192 million. And shockingly,
Congressman, only 6 percent of that was spent in the harbor in
2012, about $14 million.
The dredging, Congressman, is a little bit like painting
the George Washington Bridge, which is when you get to the end,
you have to start all over again because there is silt and
there is material that has accumulated over a period of years.
One of the things, Congressman, that I think is critical is
that ports around the Nation be allowed access for proper
investment and dredging, but also maintenance of wharves and
harbors, et cetera, and that more of the harbor maintenance
user fee, which is really what it is--it is paid by the
beneficial owners, beneficial freight owners--be reinvested not
only in the New York-New Jersey Harbor but harbors around the
country.
To answer your question directly about the national impact,
the Federal economy is about $16 trillion, and fully $1
trillion of that economic activity is attributable to the New
York-New Jersey region. Our ports on both sides of the Hudson
account for about 500,000 direct and indirect jobs, many of
them high-paying union jobs, the ILA, et cetera. And continued
investment in dredging and other uses of the harbor maintenance
user fee I think is critical, Congressman.
Mr. Sires. Thank you.
And for anyone who wants to answer this, do you think that
freight planning would benefit from a mandate that States
develop State freight plans, rather than the incentivized
approach taken by MAP-21? I know that New Jersey and New York,
they do a great deal of freight planning. But do you think it
should be mandated, that each State have their own freight
planning?
Mr. Foye. Congressman, I will speak to that. I think that a
national freight policy, given the importance of freight issues
to the national economy, is something that is critical.
Clearly, that policy should be developed in consultation with
States across the country; agencies, frankly, like my own,
which is a bi-state agency. But the absence of a national
freight policy I think contributes to the current burden that
inadequacies, inefficiencies and congestion, and infrastructure
of all types currently impose on the national economy.
Mr. Flynn. And if I could just build on your last theme
there, Patrick, I had the opportunity to review some of the
testimony from other folks who have testified in Los Angeles
and Memphis and DC, and I think the next step beyond the
national freight policy is that integrated look, that
intermodal look at how the modes come together and how we
remove constraints or impediments for that intermodal
connectivity. I think Mr. Abney from UPS talked to that at some
length. I think Fred Smith did as well, and certainly that was
discussed in California. Thinking about the Los Angeles
metroplex is really an example of what could be done, but also
what needs to be done. I think that is national freight policy.
Mr. Sires. Mr. Coyle?
Mr. Coyle. I think that if you look around the country,
there are many, many NPOs engaged in freight planning. There
are many State organizations. I think what is most important is
that there is coordination between them to make sure that you
are developing a uniform policy across all the States. I think
that would be important.
Mr. Sires. What is the issue with trucking that you can
drive in New Jersey during the day, you can't drive in New York
during the night, or vice versa? Are you aware of that,
something like that?
Mr. Coyle. A number of the cities, particularly New York
metro in particular, have developed congestion plans which
mandate that deliveries are conducted at night. Don't put the
trucks into traffic at rush hour. Get them in there at 1 a.m.
Get them to be out of the city by rush hour. And it is one of
the things that we were confounded with in the FMCSA hours-of-
service regulations, because what that does with the restart
provisions, it puts the trucks into rush hour. It stops fleets
from engaging in delivering during the night. So it was really
counterproductive.
Mr. Sires. Thank you very much, Chairman. Thank you.
Mr. Duncan. Thank you very much.
Ms. Hahn?
Ms. Hahn. Thank you, Mr. Chairman. I just wanted to also
add my thanks to our chairman and Ranking Member Nadler for
holding these hearings all across our country. It is really
eye-opening, I think, for all of us, and I am loving being in
New York and New Jersey. We learned a lot today.
May I say I was a big fan of the Los Angeles Dodgers.
Sorry, Brooklyn.
[Laughter.]
Ms. Hahn. We took the Dodgers 50-some years ago, but we
love them, we have loved them.
I do represent the Port of Los Angeles and have for about
12 years, first when I was a member of the City Council in Los
Angeles, and now as a congresswoman, and I am one of the new
ones. I just passed my 2-year anniversary in Congress.
And one of the first things I did was to form a bipartisan
PORTS Caucus. So it is kind of the first time in the history of
Congress that we have a caucus that is solely dedicated to our
Nation's ports, and we are about 90 Members strong, both
Republican and Democrats, and we are hoping to focus on issues
surrounding the ports, raise awareness with the rest of our
colleagues in Congress about how important our ports really are
to the Nation's economy, really to the global economy, to job
creation, security issues. I really feel like it is a great
vehicle to bring a lot of these issues forward in Congress.
I know we Democrats are considered tax and spend folks, and
I will tell you one tax I think we should spend is the Harbor
Maintenance Tax. I have been a big proponent and would like to
hear the panel's take on this. We have about an $8 billion or
$9 billion surplus in our Harbor Maintenance Trust Fund. We
have ports in this country that still haven't even been dredged
to their authorized level.
Three principles that I am pushing is, one, we should fully
utilize our Harbor Maintenance Tax; two, I think I would like
to see a guaranteed minimum of that tax going back to the ports
where it is collected; and three, if the ports have already
finished their authorized dredging levels, would you be in
favor of seeing an expanded use of that tax as it related to
goods movement, speaking to Mr. Flynn's idea that the biggest
reason for diverting cargo is landside congestion. So we are
hearing a lot about the last mile that comes into our ports,
and if the ports have used that money properly for dredging,
would there be a feeling that we could use some of that tax to,
again, just improve the infrastructure for moving these goods.
I would like to hear your feelings on if that ought to be
something that we really put forward as a part of our national
freight policy, that that fund, the tax be used for the purpose
for which it was collected.
Mr. Foye. Well, Congresswoman, let me start by saying that
I have no official position today on either the Cubs, the White
Sox, or the Dodgers.
[Laughter.]
Mr. Foye. I want to make that clear.
With respect to the harbor maintenance, I characterize it
as a user fee because it is paid by beneficial owners of
freight, and it is really a charge for their use of the harbor,
whether on the east coast or the west coast or throughout the
country, and for the vast amounts of money that governments or
agencies like the Port Authority have to invest to maintain the
safety of navigational channels working with the Coast Guard,
the Army Corps of Engineers.
As I mentioned earlier, the harbor maintenance user fee in
the New York-New Jersey port harbor raised $192 million in
2012, and only $14 million, about 6 percent of that, was
dedicated to dredging by the Army Corps. I can't speak with
respect to other ports around the country, but I know my own
port. And with respect to the port of New York and New Jersey,
there are clear, legitimate, and appropriate uses for the
entire amount of that harbor maintenance user fee in the Port
of New York-New Jersey. The amounts that are going to be
required for dredging on an annual basis, year in and year out,
are going to be substantial. Beyond that, there are investments
that have to be made on both sides of the Hudson, and I think
that on an annual basis, that user fee could be appropriately
used.
My own opinion, if this was a suggestion for other areas of
infrastructure, and given the fact that beneficial cargo owners
have paid it, I believe it would be inappropriate. But surely
we owe it to the men and women who are employed in the Port of
New York and New Jersey and to the container terminal operators
that have invested literally billions of dollars in those
operations, as well as agencies like the Port Authority, that
that user fee, which is paid, frankly, by beneficial cargo
owners throughout the entire world, ought to be dedicated to
appropriate uses in our harbor.
Mr. Flynn. If I could just add, I work in aviation now but
spent 23 years in the container shipping industry, and so I
have a background and a perspective. But I would like to come
back to something that the chairman mentioned in his opening
remarks. The lack of adequate investment in our infrastructure
from a global perspective does put us at a competitive
disadvantage.
So whether it is the funds that exist in the Harbor
Maintenance Tax, and whether they get reinvested or not in
infrastructure, or other funds that exist for rail or truck or
aviation, the failure to have a policy and to invest does
create competitive disadvantage. In the 1990s, I was working
for Sea-Land Service. I was their head of Asia based in Hong
Kong, but worked on a number of projects in China in joint
infrastructure developments around ports and marine terminals.
That is what we did. If you look at the sheer number of
airports, with extensive freight facilities that are being
built in Asia, in China today, there is a strategic
prioritization for logistics, freight, and infrastructure, and
investments therein, and that is why the panel exists.
How do we move forward, and how do we catch up? I think all
the modes have made, I would hope, compelling arguments that
help shape the policy recommendations that you will come up
with.
Ms. Hahn. Thank you. Being in the Customs House here today,
I also, Mr. Chairman, think we ought to take a look at using a
percentage of the customs fees that are collected. I know in
Los Angeles, we collected $14 billion last year just in customs
fees. And again, that is based on commerce. But I think for
every container that comes into these ports and harbors, that
also represents risk. It represents risk to our infrastructure,
risks to our security, risks to our environment, and I think a
percentage of that could also be redirected towards investing
in our infrastructure.
I know I am over my time but, Mr. Coyle, just based on the
comments of congestion and the new rules on service hours, I
champion the off-peak movement at Long Beach and Los Angeles
called PierPASS. I wonder, if we had to look at that while we
are coming up with a national freight policy, would that be an
advantage if we had our gates opened off-peak hours for our
truckers?
Mr. Coyle. I think that if the structure made sense. And I
know there are all sorts of labor considerations and those
kinds of things. But most of the cargo owners have structured
their operations to deal with the current situation. Generally
speaking, the terminals are open about 30 percent of the time.
Ms. Hahn. Yes, it is crazy.
Mr. Coyle. So it is not good utilization of assets,
billions and billions of dollars of assets, and you are only
open 30 percent of the available time. So an approach to
looking at the traffic flow and looking at how cargo owners are
receiving that, it is not going to do any good to have a truck
leave the Port of New York at 3 a.m. and you can't deliver into
Dayton, New Jersey, until 7.
So it would make sense to get all the stakeholders involved
and look at designing a system, maybe something similar to
PierPASS in California, and look and see how that would work in
this area.
Ms. Hahn. Thank you.
Thank you, Mr. Chairman.
Mr. Duncan. All right. Thank you very much. Very good
suggestions, Ms. Hahn.
I am especially pleased that Mr. Grimm is here with us
because he is not a member of the panel and he is going above
and beyond the call of duty to be here today with all the
demands that he has on his time. So I would like to call on him
for any comments or questions that he has at this time.
Mr. Grimm. Thank you very much, and I want to thank the
chairman, Chairman Duncan, for having me, and the panel for
having me. I also want to thank those testifying today.
Mr. Foye, to follow up on my colleague, Mr. Mullin asked
you--I guess he couldn't fathom a $105 toll for a five-axle
truck, and he was saying why is it so expensive, and you
mentioned the PATH train and infrastructure and so on. But
today in the Post, there was an article that the Port
Authority, your agency, may have spent as much as $80 million
on insurance that it didn't need. The FIA recently had fined
the Port Authority and wants you to bifurcate your fire
department and your police department for failing to properly
document various things, including training. That could cost
almost $60 million. And then you have the World Trade Center
project and other real estate projects that are grossly over
budget. I think the World Trade Center at this point is almost
$9 billion over budget.
Isn't it true that all of these things, these excesses, the
mismanagement and the over budget, are major factors to raising
tolls also?
Mr. Foye. Congressman, in short, no. The insurance matter
that you referred to occurred in 2009-2010. When I learned
about it last year, I fired those involved. We did an Inspector
General review of that, and that has been discussed with our
board.
Mr. Grimm. So it won't cost the Port Authority any money?
Mr. Foye. It will cost the Port Authority money.
Mr. Grimm. But that doesn't affect, then, the revenue of
the Port Authority?
Mr. Foye. No.
Mr. Grimm. It is an expenditure.
Mr. Foye. It is an expense item, of course. The reason
tolls were raised is because, one, we have an Interstate
Transportation Network which includes the PATH and the Port
Authority Bus Terminal. We lose $300 million a year on PATH.
That is a published number. We lose $100 million on the Port
Authority Bus Terminal. Those are each critical pieces of
moving people and goods back and forth----
Mr. Grimm. I have very limited time. I have very limited
time. Let me ask you this.
Mr. Foye. Hang on, Congressman. With all due respect, there
is another item which I think is critical. As I mentioned in my
remarks, the Port Authority board is, in the next month or two,
going to approve, I expect, a 10-year capital plan which will
be pretty near $30 billion. That is going to be funded with
respect to the bridges and tunnels, $1.5 billion for the
Goethals, $1.2 billion for the Bayonne, $1 billion for the
suspender ropes on the George Washington Bridge, on and on. It
is going to be funded in large part by bridge and tunnel tolls.
The other thing I ought to say is Congressman Nadler noted
that the Port Authority was created in 1921. Many of our
facilities are 50 and 60 and 70 and 80 years old, have decades
of wear and tear; and, frankly, I will note that we do not----
Mr. Grimm. OK, I have limited time, I have limited time.
Mr. Foye [continuing]. We do not receive any Federal aid
with respect to operations----
Mr. Grimm. But there are port authorities and agencies
throughout this country----
Mr. Foye [continuing]. Or taxpayer aid----
Mr. Grimm. If I could reclaim my time.
Mr. Foye. Yes, Congressman.
Mr. Grimm. There are port authorities and other agencies
similar to yours throughout this country and they don't have
tolls that are $105. So I want to ask you a question, because
you do have significant real estate holdings, and a lot of them
do lose money.
Does any of the toll revenue go towards those real estate
holdings like construction of the World Trade Center, either
directly or indirectly through financing the debt? Yes or no?
Mr. Foye. No. Toll revenue goes----
Mr. Grimm. So when you raise money, you float bonds, you
float bonds for capital money to invest in the World Trade
Center.
Mr. Foye. Yes, sir.
Mr. Grimm. The toll revenue does not go to service that
debt at all?
Mr. Foye. Toll revenue goes to the Interstate
Transportation Network, bridges, tunnels----
Mr. Grimm. So it does not service the debt? It doesn't pay
to service the debt?
Mr. Foye. Bridge and tunnel revenue----
Mr. Grimm. It is a yes or no question. Does it service the
debt or not?
Mr. Foye. Bridge and tunnel revenue is dedicated to the
bridges and tunnels, the PATH, and the Port Authority Bus
Terminal, period, full stop.
Mr. Grimm. So the answer is it does not service--that
revenue does not go to service the debt that funds all these
other projects.
Mr. Foye. Congressman, the Interstate Transportation
Network, which is the bridges, the tunnels, the PATH, and the
Port Authority Bus Terminal, operates on a deficit. It does not
generate funds that go to other parts of the Port Authority.
Mr. Grimm. So where does the money come from to service
your debt? You have half-a-billion dollars a year in debt. I
went through your financials, your 2012 financials and your
other financials. You are running at a loss. If you take toll
revenue out, there is no money to service your debt. Where does
that half-a-billion dollars come from?
Mr. Foye. Well, Congressman, with all due respect, the Port
Authority is a AA credit. The Fitch rating agency earlier this
week reaffirmed our credit. In the world that we live in, where
so many institutions have been downgraded, we are financially
strong. We are a AA credit, without a doubt.
Mr. Grimm. That was not my question. I know you are credit
worthy. I am asking you how you actually pay the interest on
that debt if you are not using the revenue from your tolls.
Where does it come from?
Mr. Foye. Well, Congressman, as I noted, we run airports,
we run other----
Mr. Grimm. And I added them all up in your financials, and
they do not add up to enough to service your debt.
Mr. Foye. Well, Congressman, I can assure you, the AA
credit and the Fitch affirmation of our rating this week speak
to our financial stability and strength.
Mr. Grimm. OK. So you are saying that toll revenue does not
go to service any debt for the Port Authority.
Mr. Foye. Toll revenue from the bridges and tunnels and the
Interstate Transportation Network is dedicated to the operation
and maintenance and investment in those assets, period.
Mr. Grimm. And that doesn't include debt service.
Mr. Nadler. Will the gentleman yield for a moment?
Mr. Grimm. I don't have much time.
Mr. Nadler. Just to clear up a little ambiguity, because
you are talking past each other.
I think what Mr. Foye is saying is that revenue from these
tolls do go to service debt, but only debt for the
transportation facilities and not for the other things like the
World Trade Center.
Is that correct?
Mr. Foye. Yes, sir.
Mr. Nadler. OK. I just wanted to clear that up.
Mr. Grimm. OK. Moving on, because I am just about out of
time, my last part of the question is you mentioned in your
opening statement how you are very concerned, how important
your role is, the Port Authority's role with job creation and
the economy.
In Staten Island, New York, after you announced the massive
toll hike, never before seen such a massive toll hike, the New
York Container Terminal lost one of its largest customers. Then
after it was implemented, they lost two of their other
customers. Fifty-seven percent of their business was gone. They
are right now down to approximately 25 percent of the business
they once did. They are on life support, basically. They are on
life support. And they are the third largest employer in my
district.
You say you are coming out with a toll relief plan that is
the best thing since sliced bread, but it limits them at almost
half of their capacity. Why is there a cap on the toll relief
based on their capacity? Why at 350,000 lifts when they can do
almost 700,000 lifts? And it is the tolls that put them on life
support in the first place.
Mr. Foye. So, Congressman, let me do this. Let me read a
letter from Jim Devine to customers in the New York Container
Terminal.
Mr. Grimm. I am going to reclaim my time. I have read the
letter, so I am going to reclaim my time.
Mr. Foye. No, but you raised an important question, and I
think it is important. Let me just quote Jim Devine very
briefly.
Mr. Grimm. I am going to ask you not to do that because
then I am going to have to be honest and tell this panel what I
believe really happened. Would you rather me do that, Mr. Foye?
I was trying to be nice. But the truth is I have done a
thorough investigation of the involvement between the Port
Authority and the container terminal, and as a former FBI agent
I can tell you as a fact, there is no question in my mind that
the container terminal is on life support.
Mr. Foye. I don't agree.
Mr. Grimm. They are down to 25 percent of the business they
used to do. They would not get their lease extended and they
wouldn't get any help if they didn't acquiesce and button their
lips. They couldn't speak to their elected officials, and they
were told not to say anything adverse to the press or the deal
wouldn't go through. When someone is on life support, when
basically they have a gun to their head, they are going to say
whatever you need them to say. And as someone who investigated
the Gambino crime family and the Mafia, I can tell you I know
what mob tactics are, what gangster tactics are, and I don't
appreciate it, and neither did they.
Mr. Foye. Well, Congressman, if you have evidence of
wrongdoing, you should go to the D.A., please.
Mr. Grimm. No, not like that. You know what I am saying. It
is very simple. If a private company is on life support and you
say to them we are going to play hardball so that you go out of
business or you take this deal and shut your lip, that is what
they are going to do.
Mr. Foye. So, Congressman----
Mr. Grimm. So the letter doesn't mean much to me. And
lastly, let me say this. That is why they are not here today,
Mr. Foye. They are not here to testify today when they
originally were going to come because they didn't want to have
to lie to Congress or have to sit there and say no comment.
That is why they are not here.
Mr. Foye. Well, Congressman, that company is controlled by
a $130 billion Canadian pension plan, which is the largest
single professional pension plan in Canada. That company paid
$2.6 billion in 2006 for the New York Container Terminal, for
Global on the Jersey side, and for a facility in Vancouver,
near Vancouver. That company cannot be pushed around. That $130
billion pension plan cannot be pushed around. And Jim Devine
and the people at New York Container Terminal have told their
customers that they are extremely pleased by the deal that has
been made.
We think it is a fair deal. I believe it is a literal
lifeline for the survival of New York Container Terminal.
Mr. Grimm. Why do they need the lifeline in the first
place? And again, I am going to yield back my time. I totally
disagree. They made millions of dollars of investments, and if
they couldn't recoup those investments, the people who own that
container terminal had to answer to those pension funds, and
that is why they had no choice but to acquiesce, and they were
put in a position where they had a gun to their head, and it is
a despicable act, in my opinion.
I yield back.
Mr. Duncan. All right, and thank you very much, Mr. Grimm.
Thank you for being here.
Let me get back to some questions that may not be quite as
exciting.
[Laughter.]
Mr. Duncan. Mr. Foye, let me ask you this. The most recent
study by the Texas Transportation Institute of congestion of
498 cities around the country said that congestion is costing
this Nation six times more than it did 30 years ago, and that
is an inflation-adjusted figure. What is the Port Authority
doing to prepare, since you operate in one of the most
congested areas in the country, what are you doing or what do
you need to do to keep that from getting worse in the future?
Mr. Foye. Chairman, that is an important issue. Let me also
note that that same study said that the economic cost of
congestion in this region is $12 billion a year. About $2.5
billion of that is related to truck congestion issues alone.
Here is a short answer, Chairman. We are working with the
States of New York and New Jersey, the Departments of
Transportation in both States, as well as the New York City
DOT, to come up with a regional freight plan. As I mentioned
briefly in my testimony, that is going to include issues like
access to the Van Wyck, which I know is important to Mr.
Flynn's business because Atlas operates at JFK. The congestion
on the Van Wyck is a current burden on the economy.
We believe that there are a number of regulatory steps that
can be taken without significant amounts of capital that can,
in the short term, in the relatively short term, address this.
Beyond that, Chairman, there is going to be a need for
infrastructure at JFK, at Newark Airport, at the ports on both
sides of the Hudson. Part of it is going to be continued
investments like the Port Authority has made in ExpressRail.
As I noted in my testimony, the Port Authority over the
last decade has spent $600 million on ExpressRail both in
Staten Island and New Jersey. Each container that is carried by
ExpressRail is a container that doesn't have to transit the
highways of New York or New Jersey.
I think that the Cross Harbor Project that you saw in the
last day or two will provide an answer. The draft environmental
impact statement--I am going to be very careful to make sure I
state this right this time. The draft environmental impact
statement will suggest that over a period of 10 or 20 years
out, that between 45,000 to 55,000 containers could be carried
by the Cross Harbor Project.
So, Chairman, it is a combination of raising awareness on
the issue, taking administrative and other steps, and also
investments, hopefully by Federal partners as well as State and
private partners on both sides of the Hudson.
Mr. Duncan. All right. Thank you very much. I want to get
to some other topics as well.
Mr. Flynn, we have 6-year limits on the Republican side on
chairmanships. I chaired the Aviation Subcommittee for 6 years,
from January of 1995 to January of 2001, and fortunately I got
out 9 months before 9/11. But back then, there was talk--the
Clinton administration had put forth a proposal on an air
traffic control corporation, a Government corporation, and then
we even had some discussions about totally privatizing the air
traffic control system such as in New Zealand and a few other
places. And, of course, now we have been working on the so-
called NextGen, which seems to have some promise.
But what do you see for the future of aviation, let's say
over these next 5 or 10 years? Where do you see us going, and
what do you see as the main problems or challenges?
Mr. Flynn. Thank you, Mr. Chairman. I would like to, in
fact, go back to the discussion we had been having about
NextGen and how do we take NextGen forward, because at one
level NextGen requires a very substantial investment by all
parties, by the Government, by the airlines themselves in new
equipment and new technology, as well as fairly substantial
process changes both in the tower and potentially in the
cockpit.
We have been talking about NextGen for some time, and when
looking at the magnitude of what may ultimately be required, I
think we are not moving forward because they are developing a
cost-benefit analysis and developing a clear line of sight of
what the outcomes are going to be. It is challenging.
The Inspector General of the DOT testified at Mr.
LoBiondo's committee just, I think, last week or the week
before and talked about NextGen, and the recommendations that
he was holding forth are the same recommendations that Atlas
endorses, and I would believe that my colleagues in cargo and
freight, as well as the passenger airlines, would endorse as
well.
There are things we can do now. There are things we can do
now in performance-based navigation that have real bottom-line
benefits in terms of cost, have real benefits in increasing
capacity where we are congested, have environmental benefits by
reducing the amount of fuel that is consumed. For the flying
public, to step away from cargo, for the flying public it
should result in more on-time arrivals and more on-time
departures.
To implement performance-based navigation in most airports,
not all but in most, it is really about changing processes and
procedures and doesn't require substantial dollar investments
to go forward. If we can act on those regulatory processes and
move forward on that, I think then we have real tangible,
bottom-line dollar benefits that all stakeholders--the
policymakers, the FAA and DOT, the airlines themselves, and the
communities and airports themselves--can see, which would
create, I believe, the momentum and a bias for action for the
larger investments that are going to be required moving
downstream.
We are working today with air traffic control from the
1960s. We have more technology in the GPS in your car than we
are effectively using today. And as we fast-forward, using what
we have today, I think we really create bias for action, Mr.
Chairman.
Mr. Duncan. All of these things, unfortunately, take much
more time for discussion than we have. I want to get to the
other two witnesses as well in a little different areas.
Mr. Coyle, Fred Smith from FedEx earlier testified in front
of our panel early on, and they have made a request--you know,
one of the most controversial issues that we deal with in our
committee is the issue of truck weights and sizes. He has
requested on behalf of FedEx Ground that we don't increase the
weight limits but at least let them increase--I am sure he
would like an increase in weight limits, but he has requested
that we at least allow an increase in the links without
increasing the weights. What do you think about that? Would
that help your company in any way? What would be your position
on that?
Mr. Coyle. It would not do anything with respect to the
intermodal containers. They are 20 foot, 40 foot. There are
some exceptions to that. You may see some 45-footers. But
generally speaking, the vast majority come in those two
increments. So basically, that wouldn't really have any impact.
Where it may have some impact is in the rail trailers,
which generally are 53-foot rail trailers. I don't know if,
with regard to the railroad--Bill might be able to answer
that--if you increase the length of the trailer, will that
still work on current railroad equipment. So it is difficult to
say until you have looked at that piece. But generally
speaking, for what we do, I don't see it as having a big
impact.
Mr. Duncan. What is the average load or the average weight
limit, the weight in your trucking company on the things that
you carry?
Mr. Coyle. The 40-foot container, the maximum that I think
we can do is about is 42,000, maybe 43,000.
Mr. Duncan. I am not talking about what is the maximum you
do. I am talking about in your trucks, I am sure some trucks
are filled to the limit with very heavy material, but probably
other trucks don't carry materials that are quite as heavy as
some trucks. Do you have an average weight? Are 90 percent of
your trucks under such and such a weight? What would be the
information on that?
Mr. Coyle. I would say that with respect to our particular
business, the ocean containers tend to be a little on the
heavier side, where you may look at a domestic carrier, over-
the-road trucks, their average weight might be 25,000 pounds.
But on the container side, particularly when containers are
being loaded in other countries, they will load them up as much
as they can. So you do see those weights.
On average, if I had to sort of pick a number, I would say
probably 40-foot containers are in the upper 30s.
Mr. Duncan. How many trucks do you have?
Mr. Coyle. We operate about 2,000 tractors.
Mr. Duncan. 2,000 tractors?
Mr. Goetz, I have heard a lot about this positive train
control, and I have heard that the cost-benefit is probably 20,
maybe as high as 25 to 1. How much has CSX spent on that thus
far, and what do you think about that? Do you think the costs
far outweigh the potential benefits?
Mr. Goetz. Well, it is a mandate, so we have to do it, and
it has a very firm deadline. I can tell you that for our
company and for this industry, this represents probably one of
the largest technology and economic challenges that we have,
for a couple of reasons.
This technology for us is brand new. So we are faced with a
situation where we have to invent something, test it, install
it and make it work, in a very time-definite period. It also
means that these components, these electronic components need
to be manufactured, and there needs to be manufacturing
capability to create all these units, and we need to buy them
and get them installed.
We need to train and hire installers to do this work.
Again, we are layering on technology onto various levels of
signaling systems and train control systems that vary
throughout our network.
Mr. Duncan. Let me ask you something else. Freight rail is
already a heavily regulated industry. Are there any other
regulations that you feel are particularly burdensome? And
also, in MAP-21 we tried to emphasize environmental
streamlining because we had such long delays on these projects
in all the areas that we deal with in our committee. Do you
think it would be helpful if we could have more environmental
streamlining on rail projects as well?
Mr. Goetz. Yes, I do, sir. Again, for example, with
positive train control, that is a cellular-based technology.
That means cell towers. People don't like cell towers.
Communities can voice strong opinions about that. And that is
an example where, again, put into the actual devil in the
details of permitting these out, we are very concerned that we
may get held up with environmental concerns with the basic
installation of new technology.
Mr. Duncan. We all have some planes to catch, so we have to
bring this hearing to a close. But I wanted to call on Mr.
Nadler for any closing comments you wish to make at this time.
Mr. Nadler. Well, thank you, Mr. Chairman. I will simply
say that it has been a very informative hearing, a very
informative tour, and I want to thank the chairman for bringing
this hearing here, and I want to thank the Port Authority for
hosting us, and all the witnesses for participating.
I would invite the witnesses, if they have any further
suggestions for us, to let us know. We are going to be
preparing, as I think the chairman mentioned in the beginning,
preparing a report to the Judiciary--excuse me--to the
Transportation Committee.
Maybe to them, too.
[Laughter.]
Mr. Nadler. To the Transportation Committee in a few months
as the freight recommendations. If anyone has some brilliant
ideas as to funding what we have come up with or anything else,
please let us hear from you, and thank you all for
participating.
Mr. Duncan. We had Wick Moorman, the CEO of Norfolk
Southern, and many of his top officers on the train with us on
the way up yesterday. We appreciated that. That was sort of a
combination of a briefing and an enjoyable ride as well. And
then, of course, we met with several officials last night and
today, too, as well, in addition, of course, to the very
informative testimony that all of you have given.
So, as Mr. Nadler has said, we appreciate everyone being
here today, especially the witnesses. We are looking for very
specific suggestions, and that means that suggestions can come
even from people who are in the audience, as well as what we
have heard from the witnesses today.
We thank you very much, and that will conclude this
hearing.
[Whereupon, at 3:29 p.m., the panel was adjourned.]