[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]
IMPROVING THE NATION'S HIGHWAY FREIGHT NETWORK
=======================================================================
(113-55)
HEARING
BEFORE THE
SUBCOMMITTEE ON
HIGHWAYS AND TRANSIT
OF THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED THIRTEENTH CONGRESS
SECOND SESSION
__________
FEBRUARY 27, 2014
__________
Printed for the use of the
Committee on Transportation and Infrastructure
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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
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
VACANCY
(ii)
Subcommittee on Highways and Transit
THOMAS E. PETRI, Wisconsin, Chairman
DON YOUNG, Alaska ELEANOR HOLMES NORTON, District of
HOWARD COBLE, North Carolina Columbia
JOHN J. DUNCAN, Jr., Tennessee PETER A. DeFAZIO, Oregon
JOHN L. MICA, Florida JERROLD NADLER, New York
FRANK A. LoBIONDO, New Jersey EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California MICHAEL E. CAPUANO, Massachusetts
SAM GRAVES, Missouri MICHAEL H. MICHAUD, Maine
SHELLEY MOORE CAPITO, West Virginia GRACE F. NAPOLITANO, California
DUNCAN HUNTER, California TIMOTHY J. WALZ, Minnesota
ERIC A. ``RICK'' CRAWFORD, Arkansas STEVE COHEN, Tennessee
LOU BARLETTA, Pennsylvania ALBIO SIRES, New Jersey
BLAKE FARENTHOLD, Texas DONNA F. EDWARDS, Maryland
LARRY BUCSHON, Indiana JANICE HAHN, California
BOB GIBBS, Ohio RICHARD M. NOLAN, Minnesota
RICHARD L. HANNA, New York ANN KIRKPATRICK, Arizona
STEVE SOUTHERLAND, II, Florida DINA TITUS, Nevada
REID J. RIBBLE, Wisconsin, Vice SEAN PATRICK MALONEY, New York
Chair ELIZABETH H. ESTY, Connecticut
STEVE DAINES, Montana LOIS FRANKEL, Florida
TOM RICE, South Carolina CHERI BUSTOS, Illinois
MARKWAYNE MULLIN, Oklahoma NICK J. RAHALL, II, West Virginia
ROGER WILLIAMS, Texas (Ex Officio)
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
BILL SHUSTER, Pennsylvania (Ex
Officio)
(iii)
CONTENTS
Page
Summary of Subject Matter........................................ vi
TESTIMONY
Hon. Mark Gottlieb, P.E., secretary, Wisconsin Department of
Transportation, on behalf of the American Association of State
Highway and Transportation Officials........................... 5
Hon. Gerald R. Bennett, mayor, Palos Hills, Illinois, on behalf
of the Chicago Metropolitan Agency for Planning................ 5
Henry J. Maier, president and chief executive officer, FedEx
Ground Package System, Inc..................................... 5
Susan Alt, senior vice president for public affairs, Volvo Group
North America.................................................. 5
PREPARED STATEMENTS SUBMITTED BY WITNESSES
Hon. Mark Gottlieb, P.E.......................................... 48
Hon. Gerald R. Bennett........................................... 63
Henry J. Maier................................................... 66
Susan Alt........................................................ 72
SUBMISSIONS FOR THE RECORD
Hon. Jerrold Nadler, a Representative in Congress from the State
of New York, request to submit written testimony from the
Coalition for America's Gateways and Trade Corridors........... 26
Hon. Grace F. Napolitano, a Representative in Congress from the
State of California, request to submit written testimony of
Mark Christoffels, chief executive officer, Alameda Corridor-
East Construction Authority.................................... 33
ADDITIONS TO THE RECORD
Advocates for Highway and Auto Safety, Citizens for Reliable and
Safe Highways, Truck Safety Coalition, and Parents Against
Tired Truckers, response to assertions in the written testimony
of Henry J. Maier, president and chief executive officer, FedEx
Ground Package System, Inc..................................... 79
Allen Schaeffer, executive director, Diesel Technology Forum,
letter to Hon. Thomas E. Petri, a Representative in Congress
from the State of Wisconsin, and Hon. Eleanor Holmes Norton, a
Delegate in Congress from the District of Columbia, February
27, 2014....................................................... 83
Jacqueline Gillan, president, Advocates for Highway and Auto
Safety; Joan Claybrook, chair, Citizens for Reliable and Safe
Highways; John Lannen, executive director, Truck Safety
Coalition; and Andrew McGuire, executive director, Trauma
Foundation; letter to Hon. Bill Shuster, a Representative in
Congress from the State of Pennsylvania, and Hon. Nick J.
Rahall, II, a Representative in Congress from the State of West
Virginia, February 26, 2014.................................... 86
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IMPROVING THE NATION'S HIGHWAY FREIGHT NETWORK
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THURSDAY, FEBRUARY 27, 2014
House of Representatives,
Subcommittee on Highways and Transit,
Committee on Transportation and Infrastructure,
Washington, DC.
The subcommittee met, pursuant to notice, at 10 a.m., in
Room 2167, Rayburn House Office Building, Hon. Thomas E. Petri
(Chairman of the subcommittee) presiding.
Mr. Petri. The subcommittee will come to order.
Before we begin, I would like to ask unanimous consent that
Representative Dan Lipinski be permitted to join the
subcommittee for today's hearing.
Without objection, so ordered.
Today's hearing will focus on how we can improve the
Nation's highway freight network. Current Federal surface
transportation authorization MAP-21 expires September 30th of
this year. As the subcommittee begins its work on drafting the
successor to MAP-21, we must understand how we can improve the
safety, efficiency and reliability of the Nation's highway
freight network.
Safe and efficient movement of freight throughout the
United States directly impacts the day-to-day lives of every
one of our Nation's citizens. Basic necessities, such as food
and clothing, rely on many modes of the freight transportation
system to reach consumers. American businesses rely on an
efficient, safe, reliable freight system to move their goods to
domestic and to international markets.
The Nation's highway system is an essential part of the
broader freight transportation system. Not every community is
located adjacent to a railroad, airport, waterway or port, but
consumer goods are almost invariably transported along the
Nation's 4 million miles of highways and roads for at least
part of the journey.
Furthermore, first and last mile connections to other modes
of transportation are almost always made on the highway system.
In 2011, the U.S. transportation system moved nearly 18 billion
tons of goods valued at almost $17 trillion. However, each day
traffic on approximately 12,000 miles of the highway system is
slowed below posted speed limits, and an additional 7,000 miles
experience stop-and-go conditions.
In addition, America's reliance on the highway system is
growing faster than the system is itself. The Federal Highway
Administration estimates that in the next 30 years there will
be 60 percent more freight that must be moved across the United
States.
MAP-21 laid the foundation for a significant Federal focus
on Federal mobility. Specifically MAP-21 set national freight
policy by delineating specific goals related to freight
mobility. MAP-21 also required the Secretary of Transportation
to designate a national freight network and establish a
strategic plan to meet the goals stipulated in the national
freight policy.
Finally, MAP-21 encouraged the creation of State Freight
Advisory Committees and the development of State freight plans.
MAP-21 is set to expire on September 30th. Ensuring the safe,
efficient and reliable movement of goods is a priority for this
subcommittee in the reauthorization bill.
We have an impressive group of witnesses before us today,
and I trust their testimony and experience will provide
valuable insight into this important issue, and I thank each
one of you for joining us and for the effort that you and your
staff put into your prepared statement, the entirety of which
will be made a part of the record.
The panel consists of the Honorable Mark Gottlieb,
secretary of the Wisconsin Department of Transportation, and
even more importantly, former mayor of Port Washington, the
beautiful city, the Port of Ozaukee County, north of Milwaukee,
who is testifying on behalf of the American Association of
State Highway and Transportation Officials.
The Honorable Gerald Bennett, mayor of Palos Hills,
Illinois, testifying on behalf of the Chicago Metropolitan
Agency for Planning.
Henry Maier, president and chief executive officer of FedEx
Ground.
And Susan Alt, senior vice president, public affairs for
Volvo Group North America.
And before calling on the ranking member of the
subcommittee, Ms. Norton, to make any remarks, I will be
turning to Mr. Lipinski to introduce one of the witnesses. But,
Ms. Norton, would you like to proceed first?
Ms. Norton. If he is going to introduce one of the
witnesses, maybe I should.
Mr. Petri. You should go ahead, yes.
Ms. Norton. Well, I thank you very much, Mr. Chairman.
Yesterday we had a stimulating and informative roundtable
with a number of the key stakeholders as we prepare for the
reauthorization. Today I think you have followed that
roundtable with just the right hearing to focus on how we are
going to facilitate what we, I suppose, euphemistically or
perhaps correctly call ``commerce.''
Mr. Chairman, the American people understand all too well
what we mean when we say we have got to transport people. They
think about the roads and the highways. They think about their
transit. They think about their cars, but I am not sure that
they understand what makes this country great, and it is the
transportation of goods so that those people can use the goods.
Our competitors certainly understand--not only our Western
competitors, but particularly in the developing countries, that
transportation networks are a focus for the new 21st-century
global economy.
In this very area, Mr. Chairman, we see private industry
investing in their own infrastructure. I have come to you about
some concerns my constituents have about the CSX Railroad
Virginia Avenue tunnel expansion project. During my
conversation with my constituents, I have tried to focus them
on their particular neighborhood concerns while making them
understand that CSX is engaged in a national transportation
matter. So I have tried to focus them on what we can do to make
sure this railroad, which is going to be right in their
backyard as it is expanding, does not interfere with them.
What we have occurring in the State of Virginia as a result
of the Panama Canal widening is quite extraordinary. The State
of Virginia and private industry are putting gazillions of
dollars into deepening the port and building infrastructure so
that it connects to trucks and to the railroad. They know what
they are doing.
The question is: What are we going to do? Because there are
some things that only the Federal Government can do, and that
is what has made this Nation great. Abraham Lincoln understood
in the middle of the Civil War that he, nevertheless, had to
connect the country and its goods and services, and so
railroads were built right in the middle of the Civil War.
The President, I want to note, Mr. Chairman, in his
transportation remarks yesterday and apparently in his budget
is calling for something that puts us, I think, all on the same
page. The only real program we have that is truly intermodal
are, of course, the TIGER grants, and he is calling for
increasing the funding available for TIGER grants to $1.25
billion annually as part of the administration's surface
transportation reauthorization proposal.
MAP-21 did include, frankly, justifiably included, a number
of provisions that took account of the important Federal role
in connecting parts of the country for freight and in
understanding that we need a vision. I suppose that is where we
should be going on, a true vision for freight transportation
and making the resources available.
I take note, Mr. Chairman, also I was not on the Panel on
21st-Century Freight Transportation, but I am very impressed
with the recommendations of the bipartisan freight panel and
believe that they provide a vision.
It seems pretty clear that we have got to have dedicated
investments for large multimodal freight projects. I remember
yesterday a Member raised the notion that some members of the
public, when they have to pay the user tax, either local or
Federal, do not understand where all the money went, and I
piped up then 94 percent of it goes right back to the States
via formula, and we essentially are passthroughs, collection
agents for the States.
But that money goes for individual State projects and has
nothing to do with connecting or does not necessarily have to
do with connecting the United States to one another when it
comes to freight and goods. You cannot expect the local
jurisdiction to accept the costs of doing that if the goods are
merely going through its States.
These are broadly based freight projects which provide
broadly based benefits, which impose substantial local costs if
the local jurisdiction alone is left to pick them up, and what
it means is it just will not get picked up.
Addressing the needs to invest in these Projects of
National and Regional Significance, I believe, should be a
priority in the reauthorization of MAP-21. We need first the
vision. Then we need the plan, and then, of course, we cannot
avoid our obligation to provide the means, which is to say the
resources to build the infrastructure necessary for the
movement of goods.
I thank the Panel on 21st-Century Freight Transportation
for laying the groundwork for us to develop the policies and to
make sure that we use this MAP-21 reauthorization to provide
freight intermodal transportation systems appropriate for the
21st century.
Thank you very much, Mr. Chairman.
Mr. Petri. Thank you.
And I would now like to call on Mr. Lipinski.
Mr. Lipinski. Thank you, Mr. Chairman.
I am here to introduce one of our witnesses, Gerry Bennett,
and serving as mayor of the city of Palos Hills for over three
decades, Gerry has been an outspoken advocate for uniting
cities and villages.
He found and continues to serve as president of the
Southwest Conference of Mayors and served as past chair of the
Metropolitan Mayors Caucus and is currently a member of the
Mayors Caucus Executive Committee.
He is also a past president of the Illinois Municipal
League, and as representative from southwest Cook County, Gerry
Bennett holds the position of chair of the Chicago Metropolitan
Agency for Planning and its Executive Committee. And it is his
experience at CMAP that makes him an expert on transportation,
especially the topic of freight movement in the Nation's
freight hub.
So I am very happy today to have with us Gerry Bennett to
talk to us about freight movement, especially about the CREATE
Program, a public-private partnership that has been very
successful and is moving along well in the Chicago area.
Thank you.
Mr. Petri. Thank you.
And I would ask unanimous consent that our witnesses' full
statements be included in the record.
Without objection, so ordered.
And we now look forward to your summarizing those
statements in approximately 5 minutes and then subjecting
yourself to questioning from the panel, beginning with the
Honorable Mark Gottlieb, secretary of the Wisconsin Department
of Transportation, on behalf of the American Association of
State Highway and Transportation Officials.
A warm welcome, Mark.
TESTIMONY OF HON. MARK GOTTLIEB, P.E., SECRETARY, WISCONSIN
DEPARTMENT OF TRANSPORTATION, ON BEHALF OF THE AMERICAN
ASSOCIATION OF STATE HIGHWAY AND TRANSPORTATION OFFICIALS; HON.
GERALD R. BENNETT, MAYOR, PALOS HILLS, ILLINOIS, ON BEHALF OF
THE CHICAGO METROPOLITAN AGENCY FOR PLANNING; HENRY J. MAIER,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, FEDEX GROUND PACKAGE
SYSTEM, INC.; AND SUSAN ALT, SENIOR VICE PRESIDENT FOR PUBLIC
AFFAIRS, VOLVO GROUP NORTH AMERICA
Mr. Gottlieb. Thank you. Good morning, Chairman Petri,
Ranking Member Norton, and distinguished members of the
subcommittee.
I am Mark Gottlieb, the secretary of the Wisconsin
Department of Transportation, and I want to thank you for the
opportunity to testify on behalf of AASHTO and the State DOTs
on the importance of efficient and safe freight movement to our
State's economies and to provide input on our freight
transportation challenges and recommendations for the
reauthorization of MAP-21.
Two issues I would like to address. First, because the
economies of most of our States are tied to freight intensive
industries, the States are investing their core formula Federal
aid highway and bridge funds, along with State funds, to
eliminate freight bottlenecks and improve capacity and
reliability.
Second, the State DOTs support and want to collaborate with
U.S. DOT on establishing a national multimodal freight policy,
but the freight networks should be identified through a State-
driven process. The States will continue to engage in
performance based planning at all levels, local, State and
regional, to drive investments that address freight needs.
The freight intensive sectors of our State economies,
manufacturing, agriculture, construction, energy and
merchandising, for example, account for about one-third of the
U.S. economy. Competitiveness in these sectors is directly
related to our ability to improve the safety and efficiency of
our freight transportation system.
Freight moved in the United States is forecast to double
between 2005 and 2035, from 16 billion to 31.4 billion tons,
and 80 percent of that freight by tonnage and 94 percent by
value is projected to move by truck, on the interstate, the
NHS, and the feeder routes serving the first and last miles of
the movement.
We recommend that Congress allow time for the program
consolidation and performance reforms in MAP-21 to be put into
practice, which we believe will lead to greater priority being
given to freight projects. We urge you not to establish a new
separate freight program with funding coming at the expense of
the existing core highway programs which are already being
invested in projects that benefit freight.
We support the establishment of an overall national freight
transportation policy. However, we believe that designation of
highway and freight networks cannot be accomplished through a
top-down Federal process. A one-size-fits-all set of
designation criteria fails to address unique, State-specific
freight considerations.
The methodology used to designate the 27,000-mile national
highway freight network resulted in critical gaps and omissions
and does not reflect many significant freight corridors
operating within, between and among the States.
In Wisconsin, we have designated a multimodal freight
network with significant stakeholder involvement, and we are
engaged in various regional efforts to support multistate
freight planning and operations, including the 10-State Mid-
America Freight Coalition collaborating on a research planning
operations and investment priorities for freight movement, and
the Great Lakes Regional Transportation Operations Coalition,
which includes 10 States, provinces and toll authorities. All
of us are working together to improve operations to give our
Great Lakes region a competitive edge.
We believe it is appropriate for the States to continue to
be the focal point for addressing freight needs. We recommend
that Congress replace the MAP-21 mileage caps for a primary
highway freight network with a designation process undertaken
by the State DOTs in consultation with MPOs, local governments,
stakeholders, and U.S. DOT, giving the U.S. DOT the authority
to add routes and/or corridors to ensure connectivity.
Moreover, we recommend that you give States additional
flexibility to support multimodal freight planning efforts with
expanded funding eligibility.
I would like to conclude with a comment on the status of
the Highway Trust Fund. U.S. DOT estimates that the Trust Fund
may run out of money as early as this summer. If this happens,
FHWA will delay payments to States for projects already
completed. We rely on prompt payments to pay our contractors
and any delay will have serious economic consequences.
Moreover, unless Congress acts to either increase Trust
Fund revenues or provide additional general fund support, the
States will be unable to obligate any new Federal funds
starting in fiscal year 2015. In both cases there will be
immediate and direct impacts to our States' economies. A
significant number of needed highway projects, including
freight projects that underpin economic development and
improved quality of life, will be delayed or canceled.
We look forward to working with you to address our Nation's
freight challenges and to offer our suggestions and views as
you tackle reauthorization of the Federal Aid Highway Program.
I appreciate the opportunity to testify today, and I look
forward to your questions.
Mr. Petri. Thank you.
Mayor Bennett.
Mr. Bennett. Thank you, Mr. Chairman. I want to thank you,
the committee, and Congressman Lipinski for this opportunity to
testify.
Mr. Petri. Would you put your microphone on? Yes, is the
mic on?
Mr. Bennett. How is that?
Mr. Petri. Yes.
Mr. Bennett. Thank you, Chairman--do I get those seconds
back, I guess?--for this opportunity to testify. I would like
to thank you, the committee members, Congressman Lipinski for
your efforts in support of transportation and freight, in
particular.
My agency, the Chicago Metropolitan Agency for Planning,
CMAP, elevated freight as a high priority within our region's
award winning Go to 2040 comprehensive plan. Our region is an
unparalleled hub not only of domestic but also international
freight.
Over a billion tons of freight worth more than $3 trillion
move through the Chicago region each year. A quarter of all
U.S. freight and nearly all U.S. intermodal freight originates,
terminates or passes through Metropolitan Chicago. Nearly half
of the freight in the region is through traffic, an indication
of our central role in the national freight system.
To address freight congestion, the Chicago Region
Environmental and Transportation Efficiency Program, called
CREATE, the first in this Nation, was established in 2003. This
is a public-private partnership of the U.S. Department of
Transportation, the Illinois Department of Transportation, and
the Chicago Department of Transportation, AMTRAK, the region's
Metra Transit System, and private railroads.
CREATE is dedicated to implementing specific rail
improvements in and around the Chicago area. Its 70 projects
include new fly-overs, grade separations, improved signaling,
equipment modernization, and as of November 2013, 20 projects
have been completed and 9 more are under construction.
Most of the completed projects are rail improvements, many
of which are on the belt corridor that circles Chicago to the
west and south, with connections to multiple railroads. Eight
of the eleven belt corridor projects have been completed and
another is under construction.
In contrast, relatively few projects move forward to
mitigate freight's negative impacts on local communities. Only
3 of CREATE's 25 highway rail grade separation projects have
been completed and only 3 are under construction. In fact, due
to the lack of funding, 13 grade separations have not started
at all and not one of the program's 7 passenger corridor
projects was completed in the past 10 years.
This is also highly problematic because in a truly
intermodal economy, grade separations facilitate the movement
of truck traffic through the region. We need more Federal
investments to help complete these projects.
CREATE affects the global economic competitiveness not just
of our State but the U.S. as a whole. The entire project is
estimated to cost $3.8 billion, but there is a $2.5 billion
funding gap. Through the efforts of Congressman Lipinski,
CREATE received initial Federal funding of $100 million through
the SAFETEA-LU Projects of National and Regional Significance--
PNRS Program.
About one-third of CREATE funding to date has come from
Federal sources, including PNRS, TIGER, and the ARRA High-Speed
Rail Program. These Federal investments have also been
leveraged by more than $400 million through the State of
Illinois capital programs, but without a dedicated source such
as PNRS, CREATE and other vitally important freight
partnerships cannot make adequate progress.
Due to freight's national importance, continued Federal
assistance is critical. In some respects, the 2-year MAP-21
reauthorization does more to recognize the vital role of
freight in the U.S. economy. However, CMAP's position is that
MAP-21 missed an opportunity to address freight needs
comprehensively with adequate funding that treats all modes
strategically.
Furthermore, MAP-21 should have formalized the role of
metropolitan regions in the development of recommended State
freight plans.
CMAP is not alone in this position. With some of the
largest metropolitan regions in the country, we have developed
three principles for freight in the next transportation
reauthorization bill: one, integrate metropolitan regions into
the freight investment decisionmaking process; two, dedicate a
range of funding sources and authorize a minimum of $2 billion
funding per year for freight investment, consistent with
proposals from the national freight advocacy organizations; and
three, redefine the national freight network to comprise a
multimodal transportation system.
Redefine the national freight network to comprise a
multimodal transportation system. We support a robust Federal
freight policy. It is time for the Federal Government to
provide the leadership and resources to support a resilient
national freight network.
Mr. Petri. Thank you.
Mr. Maier.
Mr. Maier. Chairman Petri, Ranking Member Norton, and
distinguished members of the subcommittee, thank you for giving
FedEx the opportunity to testify today. We commend this
subcommittee for recognizing the critical importance of our
Nation's transportation infrastructure.
This is a topic of utmost importance to millions of FedEx
customers and stakeholders and one that absolutely positively
affects our country's ability to compete in the global
marketplace.
I am president and CEO of FedEx Ground, one of the four
primary operating companies, along with FedEx Express, FedEx
Freight, and FedEx Services. Together our companies provide a
broad portfolio of transportation, e-commerce, and business
services that generate revenues of $45 billion a year.
In so doing, we deploy 300,000 team members, 643 aircraft,
and 100,000 surface vehicles to deliver more than 10 million
shipments a day.
FedEx is part of a global multimodal transportation and
logistics industry that provides millions of jobs to Americans,
enriches consumer choice, and creates new markets for U.S.
businesses.
We also understand highways are the bedrock of this system
as the vast majority of freight is and will continue to be
transported by trucks. If you've had the opportunity to review
our written testimony submitted prior to today's meeting, you
will note our three key recommendations for improving the
Nation's highway freight network.
First, we need a sound highway bill with adequate sources
of funding and one that provides opportunities for innovative
ways to enhance productivity, including the use of 33-foot
trailers.
Secondly, we need a Congress that is willing to support the
adoption of new technologies that will make our highway freight
network safer, more efficient and more sustainable.
And lastly, we need to redefine the infrastructure debate
in the U.S. so that everybody understands what's at stake. It's
not simply about longer passenger commutes and inconvenient
traffic jams, but protecting the economy, enhancing
competitiveness to create jobs in supporting a high quality of
life for all Americans today and tomorrow.
Two issues in particular threaten the safe, reliable and
efficient movement of freight on our Nation's highways: traffic
congestion and infrastructure deterioration. Research indicates
that traffic congestion in 498 U.S. cities extracted a $121
billion toll on the U.S. economy in 2011. More than 20 percent
of those costs were absorbed by the trucking industry and
passed along to consumers.
More than two-thirds of all U.S. domestic freight tonnage
moves by truck, and the volume of freight moving by truck will
more than double by 2035. If we think traffic congestion is bad
today, imagine twice as many trucks on our highways, not to
mention more passenger vehicles.
The deterioration of our Nation's highways and bridges is
fast reaching crisis proportions. As a business whose customers
depend on us for fast and reliable service, we can attest that
impassable roads and bridges lead to increased costs, service
delays, and untold equipment damage.
Alarmingly, investment in any solution may be at risk this
year if Congress does not pass a well-funded highway bill, and
since the current bill expires in September, time is of the
essence.
It is also crucial that we stabilize the National Highway
Trust Fund which, if left unaddressed, is on the brink of
becoming insolvent this summer. Clearly there are no easy
answers, but the first step would be to establish a national
strategic plan to address infrastructure needs and to identify
sources of funding, both immediate and long term.
One sure way we can help move freight more efficiently is
by exploring innovative solutions to maximizing our existing
infrastructure by modernizing U.S. trucking equipment
standards. We and many of our industry colleagues strongly
support the proposal to increase the national standard for twin
trailers from the existing 28 feet to 33 feet. It is important
that this solution does not, and I will repeat, does not
require any change to gross vehicle weight, and in fact should
reduce the burden on our Nation's highways by significantly
slashing the number of trips and miles required to move
freight.
This innovation promises to deliver tremendous value, but
it cannot be implemented without Congress modernizing our
transportation policy.
In closing, the time is at hand to advance a national
strategic plan for prioritizing investment in the critical
projects to most effectively address our highways' freight
network. Our country's future depends on it.
Thank you, again, for the opportunity to address these
critical items, and I'm happy and looking forward to addressing
any questions you may have.
Mr. Petri. Thank you.
Ms. Alt.
Ms. Alt. Chairman Petri, Ranking Member Norton, and
distinguished members of the subcommittee, I would like to
thank you for the opportunity to testify before you today.
My name is Susan Alt. I am the senior vice president for
public affairs for Volvo Group. I have a background in
logistics, having run Volvo's North American supply chain
operations for 5 years.
In the United States Volvo Group manufactures heavy trucks
under the brand names of Mack Trucks, Volvo Trucks, Volvo
construction equipment, Volvo Penta marine engines, Prevost and
Nova transit coaches and city buses. The Volvo Group has six
manufacturing facilities in the United States, in the States of
Virginia, Tennessee, Maryland, Pennsylvania, New York and we
are headquartered in North Carolina. We employ more than 12,000
people in the U.S., and we have invested nearly $1.5 billion in
our manufacturing facilities in the last 10 years.
We rely on more than 50,000 truckloads of freight, of
material coming into our factories each year. We rely heavily
on the Ports of Norfolk and Baltimore to import 25 percent of
our production material, and those same ports plus the Port of
Charleston, South Carolina, for the export of our finished
goods.
We rely on the entire Interstate Highway System for the
movement of our material, most notably Interstate 81, as four
of our factories are located on or very near it. It is
America's infrastructure that makes all of this possible.
The health of America's freight network matters because it
is important that our American manufacturing operations remain
competitive in a global economy.
In recent years the industry has embraced ``just in time''
or lean manufacturing philosophies that reduce manufacturing
material in the production line. This new efficiency has
manifested as a substantial benefit to Volvo, our customers and
the economy as a whole.
However, to be efficient, we have to have the right
material at the right place at the right time. In modern
manufacturing, we cannot have excess inventory in our assembly
or our delivery process. We deliver parts to the production
line just as it is needed for assembly. Our ability to move
parts from our supplier to our factory and finished goods from
our factory to our end customer relies on the infrastructure of
America.
There are disturbances we can plan for, but what we cannot
control for is unexpected delays due to congestion. This is
where we get into real trouble. When, for example, a truck is
caught in a traffic jam and cannot make its delivery, the
ripple effect of that one delivery can be costly.
It means we do not build the product on time, tying up
capital. It means the product will have to be reworked, tying
up man-hours, not following manufacturing quality processes. It
means sending workers home early. It means not delivering to
the customer on time and hurting our competitiveness all
because of that one missed shipment.
This committee's own Panel on 21st-Century Freight
Transportation recognized that ``the current state of highway
infrastructure does not adequately serve the needs of those
moving goods across the Nation.'' We agree.
Volvo Group urges lawmakers to address this challenge
directly and with a clear purpose. Logistics is all about
planning. Congress needs to provide a long-term plan or the
country will suffer.
We recognize the choices are difficult, but with a 20-
percent cost disadvantage to doing business in the United
States, investment and improvements to our Nation's
transportation infrastructure are critical to manufacturers'
ability to compete and to create jobs.
Infrastructure investment must be considered as a long-term
strategic objective. Volvo believes that a fully funded 6-year
reauthorization is needed to address the already well
documented persistent challenges that are facing our
transportation system. You have heard from the gentlemen before
me. Every mode of transportation is expected to increase the
next several years.
Let me give you an example. Our largest truck factory sits
in southwest Virginia along Interstate 81. The plant employs
some 2,300 workers and is a major employer in the region. We
have a large amount of material that travels south on I-81
along a stretch of mountains near Blacksburg, Virginia. Until a
third truck lane was added, that area was the site of many
accidents resulting in frequent delivery delays and production
disruptions for our factory.
Since the opening of the third truck lane, we have seen a
marked improvement on our on-time deliveries from that route.
This is a real world example of savings that directly benefits
our customers.
Transportation moves America. A strong infrastructure has a
direct and vital impact on America's competitiveness. If
America is to continue to lead the way in high-value, state-of-
the-art manufacturing, our infrastructure can no longer get by
on the status quo.
Thank you for the opportunity. I look forward to your
questions.
Mr. Petri. Thank you. Thank you all.
Let me begin questions by asking Secretary Gottlieb. We are
experiencing the current MAP-21 legislation that was passed
about a year ago now or some time ago, and one of its goals was
to try to simplify just to consolidate and give a little more
flexibility to the States. I wonder if you could comment on
what impact this consolidation of different service
transportation programs has had on giving additional
flexibility for you and your colleagues at other State
departments of transportation.
Has it really made any difference or could you bring that
to life for us a little bit?
Mr. Gottlieb. Thank you. Sure.
I think that, yes, there were a couple of things that were
positives, obviously, that came out of MAP-21. One was program
consolidation, which gives the States greater flexibility.
Also, certainly the move towards greater user performance
measures was also a very positive, as was project streamlining.
I think what this has given us the ability to do as States
is to use those dollars in those core programs to set
priorities, to make targeted investments where we know that we
need to make them in our State. You know, those could be
targeted investments to support the more efficient movement of
freight. It could be in other areas as well, but I think the
program flexibility has been a great benefit to us.
Mr. Petri. Thank you.
I have had the chance and some others on the committee; I
know Mr. Lipinski certainly has visited what we call the
Chicago bottleneck. This is where the railroad industry came
together 150 years ago. Trains went to Chicago, and they went
west from Chicago, and you can go to the center of Chicago and
north, south, east, west tracks are the same grade level. They
have to stop and wait for each other. I understand anyone who
sees railroad cars up in my part of that area they are covered
with graffiti because these trains stopped for hours or days
negotiating their way through Chicago.
And we understand still they take freight off one railroad,
put it on trucks, drive it through Chicago to another railroad.
In this age of ``just in time'' delivery and mobility, this is
a significant burden on commerce, and certainly we are in the
``lee'' of that. Wisconsin to get to the east coast has to go
through the Chicago region. A lot of other States in the whole
area are similarly affected.
So it is a major national priority. Railroads have been
working on railroad yards outside the Chicago area in Wall
County and other areas to try to avoid that. The Canadian
National Railway controversy, they bought a bypass around the
region.
Can you discuss where we are? If you can just have reliable
delivery, not quick delivery, it makes a big difference. People
can get trucks off the road and use the rail system for
supplying factory and delivering value-added goods. Otherwise
they are stuck with bulk commodities where the timing does not
make much difference.
Can you discuss the importance of that? It is a major issue
certainly for us in our region.
Mr. Bennett. Thank you, Mr. Chairman, especially to be
familiar with the Chicago Metropolitan Agency for Planning.
Certainly the money that has been parlayed so far, almost
$1.1 billion, has made significant and addressed significant
concerns that we have with rail, the actual rail, moving it in
and around Chicago.
You know, the story was it would take 2 days to go from Los
Angeles to Chicago and 2 days through Chicago and then another
2 days to the east coast. Six of the seven major national Class
I railroads come through the Chicago metropolitan area.
So CREATE, which was innovative and unique back in 2003,
the first major comprehensive plan for moving freight, and a
comprehensive base of intermodal, and I am listening to also
the private industry here, and certainly the problems we face
in the metro area are multimodal.
We are addressing the train configurations, but more
importantly the at grade crossings. Only 3 of 25 that we have
put into our plan have been addressed, and I know that the
gentlemen in the trucking and service industry understand the
significance of delay through freight on surface roads through
the metropolitan area.
We have a plan. The problem is we need help. We need the
Federal Government to understand that every dollar that they
have invested in past capital programs for infrastructure,
highway transportation, it comes back tenfold. The investment
that is made by the Federal Government, every dollar that comes
into the Treasury and goes out, as the minority leader has
said, it is a well invested amount of money.
People understand that, and as a former mayor, now at the
State level, and as a mayor for 33 years, I clearly understand
what people appreciate in their dollars being spent. In the
area of highways, they understand it.
Recently the tollway system throughout our metro area, $12
billion in a tollway system that is being invested, and it is
going to be a world-class highway system. A little controversy
because of the tolls, but people understood to make that
investment, to bring about movement of freight and passenger,
it is well invested.
So I plead with this committee to understand the needs of
freight in our region, and certainly the public-private
partnership that we have done with the CREATE Program and
certainly with the leadership of Congressman Lipinski in
helping us do that.
Thank you, Congressman.
Mr. Petri. Thank you.
Ranking Member Norton.
Ms. Norton. Thank you, Mr. Chairman.
Now, we recognize that freight related activities are
eligible for Federal highway funds and compete apparently for
those funds with other needs. MAP-21 further incentivized
freight by raising the Federal share for such projects, but I
think these are questions really for Mr. Bennett and Mr.
Gottlieb.
Mr. Gottlieb, the so-called CREATE Project, is that funded
entirely by the State of Illinois?
Mr. Bennett. No, Congressman. There was initially $100
million that Congressman Lipinski was able to secure. We
received ARRA and TIGER grant money over the years. Of the $1.1
billion, about $400 million has been invested by the Federal
Government. The rest has been parlayed by the State of Illinois
and our railroad partners.
Ms. Norton. And yet this is a crossroads of the United
States, perhaps dramatically pointing to the need to create a
stronger focus.
We note that with the TIGER grants, which are probably the
only lump sum we have for such intermodal projects, when
freight competes with what people experience every day, which
is getting in their own cars, freight sometimes loses out.
So my question here goes to how do we get the focus on
funding freight. When you consider, for example, that MAP-21
scratches the surface, if you will forgive the pun, of just
daily transportation across the roads, of course freight uses
that, too, but do you think, for example, that there should be
a separate set-aside for freight? Do you think there should be
a freight-only fund?
Should there be a freight user fee? If we wanted to pump
some real money into this fast, I am looking for how you would
regard the best way to do that. Any of you, I would appreciate
the responses of any of you on how to do that.
Mr. Gottlieb.
Mr. Gottlieb. Thank you.
Sure, I think our answer would be that, first and foremost,
we would like to see adequate funding, adequate long-term
funding for the core programs.
Ms. Norton. For the what?
Mr. Gottlieb. For the core highway programs because we are
making----
Ms. Norton. We need more funding, yes.
Mr. Gottlieb. Right.
Ms. Norton. And you know the problems we are having on
getting an increase in the user fee.
Mr. Gottlieb. Correct. We are making, as I said, we are
making investments in freight. All the States are making
investments in freight out of their dollars in the core
program. So if there was going to be a special freight program,
our recommendation would be that it would not be a carve-out of
funds from the core programs, that it would be over on top of
that, and also that it would be----
Ms. Norton. How would that be funded do you think?
Mr. Gottlieb. As you said, it could be funded by user fees,
by freight user fees, yes.
Ms. Norton. Mr. Bennett?
Mr. Bennett. Yes, Congressman, I think you have really
answered your own question, and as I have indicated in my
testimony, the innovative ways of partnering with the private
sector and/or through the use of some type of user fee is
clearly the way to fund it going forward.
We understand. I do a municipal budget. We do a State
budget, and we understand the limitations of expenditures of
money and where new revenue must come from. Honestly, you know,
whether the MAP-21 or prior to that SAFETEA-LU and a gas tax
did not tie it to the rate of inflation, which should have been
done, over the year could have been done, but going forward,
that needs to be considered.
And certainly our private partners, we have shown in the
CREATE Program, are willing to also additionally make that type
of investment, but coming from the Government side of Federal
side, if that needs to be, I think people are openminded as to
that proposal.
Ms. Norton. Well, let me ask our two business
representatives whether their businesses and whether they think
the business community would be willing to contribute towards a
freight user fee. That would be over and above, I suppose, what
they already do on the highways. It costs them more to use the
highways, et cetera.
Ms. Alt. So I would say, in a word, no. The consumers would
not want to. The industry itself, the trucking industry itself
has not been opposed to paying higher user fees by way of
increased diesel tax. So the actual users themselves are not
opposed to it. The consumers, as it does get increased, the
consumers will ultimately pay it, but I do not think that the
consumers would accept the tax or an increase.
Ms. Norton. You do not think the consumers would what?
Ms. Alt. I do not think the consumers would accept an
increase for freight because they do not appreciate the fact
that it is the freight that brings them everything that they
have every day.
Ms. Norton. Yes, of course, the consumers. That is to say
it is in the States that we see people raising their own gas
taxes when the Federal Government refuses to do so.
Mr. Maier, finally?
Mr. Maier. Yes. FedEx supports reasonable and efficient
funding mechanisms to improve our Nation's infrastructure, and
we urge Congress to conduct a thorough review of all the
available options.
But with respect to our business, let me just say this.
Aging infrastructure has both direct and indirect costs on our
business. The first is our business relies on fast, reliable
and cost efficient transportation, and our businesses and our
customers that we serve rely on us to deliver that service as
well.
Delays caused by aging infrastructure directly affect our
ability to perform that service and, in turn, as Ms. Alt said,
have a ripple effect through the economy. When we do not
deliver on time, I mean, you know, there are consequences in
the marketplace.
And notwithstanding that, aging infrastructure has a very
deleterious effect on the wear and tear on our equipment and
vehicles.
Ms. Norton. So would you be willing to support a freight
user fee to quickly get funds into reducing the very issues
you've raised?
Mr. Maier. We will support reasonable and efficient funding
mechanisms.
Ms. Norton. Thank you, Mr. Chairman.
Mr. Petri. Thank you.
Representative Mullin.
Mr. Mullin. Thank you, Mr. Chairman.
You know, we talk about a lot of funding needs here.
Obviously, there is a tremendous amount of funding issues, but
we are talking about just putting a Band-Aid on a system that
is way behind.
You know, I have operated a business for 17 years and still
do and am proud to do so, but if I just operated on today's
needs, I would never build or prepare for the future. I would
never be able to grow and know where I am headed, and we cannot
just focus on finding enough funds today. We need to be paying
attention to where we are going 20 years from now.
You know, we look at the infrastructure we are using. The
generation behind us that built this, they had a vision. They
had a plan. They were building the infrastructure for future
growth, and, Mr. Maier, I know FedEx spends a tremendous amount
of time on looking ahead. We have had an opportunity to visit
with you all. We have had an opportunity to come see your
place. As a business guy, it makes me feel very inadequate
seeing what you guys are doing.
Where are you seeing the future growth? Where do we need to
be investing not only fix, but what are the areas we should be
investing in to be paying attention to 20 years from now,
predicting where your deliveries are going to go?
Mr. Maier. Well, that is a great question, and thanks for
it.
If you look at our business today, the fundamental change
that is occurring is e-commerce, which means that, you know, 10
or 15 years ago packages went primarily to businesses. You
know, with the growth of the World Wide Web and shopping
online, more and more of our packages are going to people's
homes. And to be frank, I mean, that has changed the business.
Package weights have come down, for instance, as shipments that
used to be destined to a manufacturing facility or a
distributor or to a retail store, those packages are now
becoming smaller because they are going directly to somebody's
home.
And in our business, our volume, and this would be LTL and
certainly parcel express or ground, our business goes to where
people are. So you have to look at population centers.
Mr. Mullin. Are you seeing that we need to build additional
needs to those or do you see an opportunity to say, ``Hey, one
area is getting too full. Let us expand it to another area''?
Mr. Maier. I think our need to invest in the infrastructure
of the country is nationwide.
Mr. Mullin. Right.
Mr. Maier. I will give you a personal example here. FedEx
Ground is headquartered just outside of Pittsburgh. Last fall
the Pennsylvania Department of Transportation imposed weight
limits on approximately 1,000 bridges in the State. Now, they
did that to slow deterioration and extend the operational life
of the bridges pending the approval of transportation funding
legislation that was subsequently signed last November.
This requires transportation companies like ours to take
alternate routes to go around those bridges and adds time and
cost. We burn more fuel. We create more carbon emission. I
mean, it requires us to engineer our network differently based
on those changes, and that creates, you know, costs that we
have to figure out how to cover somehow.
Mr. Mullin. Another quick question to you. Where did the 33
feet come from, going from 28 to 33?
Mr. Maier. As a result of the TEA-21 highway
reauthorization bill which was passed in 1998, the
Transportation Research Board was asked to make recommendations
regarding truck productivity. In the study (Special Report
267), it was recommended that the double 33-foot configuration
should be immediately authorized without the need for
additional analysis. It is roughly 18 percent more capacity. We
have been running these trailers in the State of Florida since
2010. I think we have got just short of half a million miles on
those trips, 100 percent safe.
Mr. Mullin. Any increase on accidents?
Mr. Maier. None, none. In fact, we have not had any
accidents on it.
The drivers who participate in those runs have told us they
believe that these trailers are actually safer than the 28s
because they tend to be more stable going down the road, and
they track better behind the power unit, and they would prefer
to pull these instead of the 28s.
Mr. Mullin. What kind of push-back are you getting on this?
It just takes Congress to act?
Mr. Maier. It takes Congress to act. There are only 11
States in the country that allow the use of 33 footers within
the border. We need Congress to change the policy so that we
can use them nationwide.
Mr. Mullin. Right.
Mr. Maier. The last time Congress made a change was in
1982.
Mr. Mullin. Something I am going to add to this. We just
cannot just simply be talking about a fuel tax, and we cannot
simply be talking about just a diesel tax, I mean gasoline and
diesel. It does not work that way. We have electric vehicles.
Ms. Norton and I have talked about that multiple times. She
drives an electric vehicle. She is a freeloader. I pay her way
because I drive an F-250 diesel. No offense to her, but we have
talked about it. We joke about this all the time.
Plus we have got natural gas vehicles on the road. My
company has installed hundreds, if not thousands, of these in-
home filling stations, and we have to think outside the box. We
cannot just simply be talking about paying for it at the pump.
We have got to go farther back.
We have got to eliminate the use of fraud. We have got to
eliminate the opportunity to have people that are using the
infrastructure not pay for the infrastructure. There is not one
single American that lives in this country or comes in business
with this country that does not use our infrastructure. I do
not care if you do not own a vehicle or if you do own a
vehicle. There are taxis. There are buses. There are
deliveries. There is electric. There are pipelines. That is the
infrastructure, not just our highways.
We have got to look outside the box and broaden our horizon
and pay attention to how far back down the line we need to go
to capture, to let everybody invest in our infrastructure
because it is an investment. We are successful because of the
infrastructure we have. We will fail if our infrastructure
fails.
Mr. Chairman, thank you for allowing me to go over, and I
appreciate the time.
Mr. Petri. Thank you.
Mr. Sires.
Mr. Sires. Thank you, Mr. Chairman, for putting this
hearing together and thank you for being here.
I always like to hear from the business world and certainly
from former mayors because you have your hands in there day in
and day out, and your comments are very important.
I represent a section of New Jersey, the northern part,
where the ports are key obviously to a lot of jobs. Almost a
quarter of a million jobs come from the ports. We have an issue
now with the Bayonne Bridge. We have to raise it because of the
tankers coming in. That is just going to increase freight
movement.
I also represent part of the airport. So I have a district
where moving freight is important. And talking about tolls,
every time you blink in New Jersey you have to pay a toll. So
it is unfortunate, but we have to do that to move freight
around.
I also served on the Panel on 21st-Century Freight
Transportation where we went around having hearings throughout
the State, and throughout the panel's proceeding it was made
very clear to me that freight projects face significant
barriers in securing funding under the current Federal aid
highway program.
Given the significant backlog that we have in maintenance
and reconstruction needs faced in each State, particularly in
large projects, multijurisdictional projects, in my assessment
they do not fare well in flat funded, State-based formula
program.
So I was wondering what do you think of that assessment?
Mr. Bennett. Congressman, I think in our area, the Chicago
Metropolitan Agency for Planning, which we put together almost
7 years ago, for the purpose of a comprehensive plan on
sustainability in every aspect of life and certainly in the
area of CREATE, which we took under our umbrella, it is a plan.
To answer the congressman's question, it is a 20-year plan
as to how we are going to move and invest in freight because it
is intermodal. It is not just the passenger trains. It is not
the freight trains. It is the trucking intermodal aspects of
that in our region and the impact on that is significant.
I believe that cooperation and coordination through an
agency which we have at CMAP in our region, and I think across
the Nation more and more metropolitan areas are understanding
that and the need to be comprehensive in their planning and to
bring a partnership together not just to the public sector, but
also very much the private sector in our metropolitan region.
So we are very proud of what we are doing in the Chicago
area, but we need that help. We need that Federal infusion of
additional dollars to parlay even more money.
And I agree with the congressman also. We have to think
outside the box, and we are doing that at CMAP. We are meeting
with mayors. We are meeting with our State representatives and
trying to understand creative ways of coming up with funding,
again, whether it is a partnership with the private sector or a
variation of type of user fees.
But, again, I will repeat as a former mayor, and the
Department of Highways in Wisconsin, certainly as a current
mayor, we understand there are two things in life as a mayor:
public safety and public works. And for this country certainly
national defense, and I do not want to get political here, but
certainly the investment in your public works, the
infrastructure of this country is absolutely an investment well
made that is going to parlay more money for Congress, more
money to generate overall with jobs in the country.
I do not have to relay that to you, but it certainly should
be the second most important priority in this country, is
investment in our infrastructure.
Mr. Sires. Mayor, do you agree with the flat funded
formula, a Federal flat funded formula?
Mr. Gottlieb. You know, I would say the unique thing about
freight in some respects is that it does lend itself to
projects of more regional and national significance, and so,
you know, we are pleased that things like TIGER take account
for that.
You know, there was some money authorized in MAP-21 for
freight Projects of National and Regional Significance. Again
though I think our core message is we want to make sure that we
have adequate, sustainable funding ongoing for our core
programs, but certainly over and above that there will be
projects of national significance.
As I said in my testimony, we are working very closely with
other States in our region to improve operations specifically
and to do better research into the movement of freight, to
harmonize our regulatory activities with regard to freight so
that, you know, private shippers can move more quickly and
seamlessly with less friction from State to State, and clearly
those are important issues, yes.
Mr. Sires. How involved do you think the Federal Government
should be when there are different States involved when you
have a large project?
I know we have that issue between New York and New Jersey.
It is always very contentious, you know, sometimes.
Mr. Gottlieb. Congressman, I do not know if that is half
political or part political, but certainly it has to start with
a plan and who has a plan and if that plan is long range. And I
think looking at the most----
Mr. Sires. How involved should the Federal Government be?
Mr. Gottlieb. Who has the most invested out here? And
really you could probably divide it into seven or eight or nine
major regional areas of significance of where that investment
should take place.
Mr. Petri. Thank you.
Mr. Ribble.
Mr. Ribble. Thank you, Mr. Chairman.
Thank you to the panel. This has been a really helpful
discussion, and I want to especially thank my own secretary of
transportation, Mr. Gottlieb, for coming in today.
My first question is to you, Mr. Secretary. I would like
you just to take your association hat off and put your
secretary of transportation hat back on for a minute.
In your written testimony, you talked a little bit about
Wisconsin's truck size and weight study, and you and I have had
some conversations about this in the past. As you know, like
many States in the country, Wisconsin allows heavier trucks to
travel on State roads, in many cases to transport dairy
products or timber products that often get traveled on or
transported on highways or roads in the northern tier of the
United States.
Can you talk a bit about some of the benefits of providing
States flexibility in allowing them to maybe have heavier
trucks on interstates and to provide that flexibility, not
necessarily mandating it but providing it, and what reforms to
the vehicles themselves, adding axles and things like that
would you consider?
Mr. Gottlieb. Yes. Thank you for that question.
As you said, you know, each State has a unique operational
infrastructure characteristics and so forth. AASHTO does not
really take a policy on those kind of issues, but I am happy to
answer your question from the perspective of Wisconsin DOT.
We have placed a great emphasis over the last few years. As
you said, back in 2009, we completed a very comprehensive truck
size and weight study, really looking at sort of that
relationship between increasing economic efficiency that you
can get from certain heavier and larger trucks and weighing
that off against making sure that we are protecting the safety
of the traveling public and that we are meeting our
responsibilities to protect our infrastructure.
So looking at that, we have had, I think, considerable
success in a very data driven, analytical way at making some
statutory changes that allows the operation of certain heavier
vehicles with different configurations to protect
infrastructure and to protect safety, operate those vehicles
off the interstate system, and we have seen, I think,
significant efficiencies and economic benefit, as you said,
particularly to two industries: the movement of agricultural
commodities, and our agricultural industry in Wisconsin is
really now a world industry. It is competitive on a world
basis, on a global economy. So they need to get those
efficiencies.
Also, as you said with regard to the movement of timber and
the paper industry, it is very important in the State. So
working together with our own State legislature, I think we
have had some success sort of making that balance in doing
that, which has given us, I think, some economic efficiencies
for our State and made our businesses more competitive.
If we had the flexibility to extend that to the interstate
system, we would certainly want to make those same kind of data
driven analyses that we make on our own system about safety and
about infrastructure protection, but if we had the flexibility
to do that, I think we could take some of the economic benefits
that we have realized on our own system and there would be a
force multiplier effect to that if we had that flexibility in
our State as well.
Mr. Ribble. All right. Thank you for that.
And, Ms. Alt, if I could maybe just direct a question to
you, in your testimony you mentioned, ``We employ more than
12,000 people in the United States and have invested nearly
$1.5 billion in our facilities in the last 10 years.''
Thank you for doing that, by the way, but my question goes
specifically to the Federal excise tax as it relates to truck
sales. I would like to see Volvo have 15,000 or 20,000 people
building trucks in the United States and moving goods and
services about.
I have got two questions for you. Is the 12 percent an
encumbrance? Is it too high or is it the right spot?
And I want to also ask you specifically if you have noticed
any change in behavior from consumers who buy your products as
it relates to the conversion to greener vehicles, compressed
natural gas and things like that because that 12-percent tax
also applies to the upgrades on these vehicles.
Can you talk a little bit about that? And if you feel that
that should be changed, lowered or eliminated, whatever, how
would you replace those revenues into the Highway Trust Fund?
Ms. Alt. Yes. So the Federal excise tax is 12 percent of
the purchase price of the vehicle. Taking natural gas aside for
a second, since 2010 the cost of the typical truck has gone up
from an average of around $100,000 to $125,000.
Mr. Ribble. Which you add 12 percent to.
Ms. Alt. And you add 12 percent to the purchase price, and
the $25,000 increase has come from emission reduction control
systems. So we have cleaner trucks. They are the cleanest they
ever have been, and that is a great thing, but they cost a
whole lot more to produce.
So in the last 4 years, Federal excise tax went from
$12,000 on a $100,000 truck to now another $3,000 more just to
meet emissions. So the Federal excise tax already has been
dramatically increased because the purchase price of the trucks
has gone up so dramatically because of emissions.
When we sell a truck with natural gas, primarily because
the fuel tanks themselves are very expensive, you are now
getting to sometimes as close to $200,000 for the cost of a
truck, and regardless of a cleaner truck or a lower emission
truck, you are paying 12 percent on the purchase price of that
truck.
So it is hard for the buyer to actually have to pay that
extra tax. So they are being burdened. If you took away the
Federal excise tax to offset that, again, the trucking industry
has not opposed increases to diesel tax. That is probably your
easiest and fastest way to offset that.
Mr. Ribble. Mr. Chairman, could I have another minute?
Oh, I am fine. I yield back. Thank you.
Mr. Petri. Thank you.
Ms. Hahn, if you want to yield a little time?
Ms. Hahn. I would not mind giving you an extra minute.
Mr. Ribble. I thank the gentlelady for yielding.
Along that same lines then, if the tax was reduced and we
offset it with an increase in diesel fuel tax so that the trust
fund stayed in the same place, do you think your sales would
increase? Would more customers buy the product, hence helping
you add more jobs?
Ms. Alt. Yes, and they would be buying new trucks, new
trucks with new technology like the electronic braking systems
and adaptive cruise control, all of those safety technologies
on the new trucks. It would encourage them to do that rather
than keeping their older trucks longer that do not have that
technology or are not as clean emission-wise, absolutely.
Mr. Ribble. So you would be safer, cleaner, more efficient.
Ms. Alt. Safer, cleaner and more efficient.
Mr. Ribble. And we could maybe fix a problem and you could
add jobs.
Thank you for that, and, Ms. Hahn, thank you for yielding.
Ms. Hahn. That was a well-used minute. Thank you.
Thank you, and I am glad we are having a discussion, and as
Markwayne Mullin pointed out that I always talk about, I have
driven an electric vehicle now for 2\1/2\ years. So I have not
been to a gas station in 2\1/2\ years, but I am driving the
roads, and as we move toward more fuel efficient vehicles, and
I am hoping the technology exists to build a long-haul electric
truck in our future, so we do have to think outside of the box.
Now, we in Los Angeles County have raised our sales tax
regularly over the years to pay for transportation projects
because we feel like there are a lot of people who come into
Los Angeles County for various reasons, you know, using our
roads, but may not contribute directly to the maintenance and
repair of them.
One thing I was going to touch on is congestion that many
of you have sort of touched on and sort of the last mile
delays. I represent the Port of Los Angeles. So between Los
Angeles and Long Beach Ports, about 44 percent of the trade
comes through our port complex to the rest of the country. I
have been told that cargo gets diverted sometimes from Los
Angeles and Long Beach not necessarily because of any kind of
cargo fees or environmental regulations that we may place on
the transporting of goods, it is the land-side congestion. That
is what probably determines how various companies and shippers
decide to use our ports.
And it has been alluded to that cargo leaves Los Angeles
and takes maybe 48 hours to get to Chicago and then another 30
hours to get through Chicago.
What do you think are some proposals out there? What are
the best proposals we have out there for that last mile before
it leaves or meets its destination of our cargo? And what can
we do to really ease congestion, which in my mind will
certainly help you on your own time deliveries?
It also reduces pollution. We know that when trucks line up
for that last hour queue getting in and out of ports, that is
sometimes the worst pollution in those neighboring communities.
So maybe, Mr. Maier and Ms. Alt, since you have a
background in logistics, what is a proposal out there or a
recommendation that we could make to ease congestion in the
last mile?
Ms. Alt. So one of the unique things, it would be great. We
have electric trucks, but the big, heavy ones we would not be
able to haul any load because we would have 50,000 pounds of
batteries unfortunately.
But there is kind of a hybrid to that, and that is called a
catenary system.
Ms. Hahn. Right.
Ms. Alt. Where the truck is moving along and it is picking
up electricity on the wires above it.
Ms. Hahn. We actually have a pilot program.
Ms. Alt. We are working on a program with Siemens on the I-
710 corridor.
Ms. Hahn. Right.
Ms. Alt. That would be a great way because that lets you
have the power. You know, you need the horsepower to get that
heavy freight out, but you also do not want to be emitting any
emissions, and that is a great way to do that.
Mr. Maier. Well, first of all, let me talk about FedEx and
sustainability for a minute. We are not only committed to
sustainability in the U.S. but around the world. We made
significant investments in alternate fuel sources. FedEx
Express runs a fairly sizable fleet of electric vehicles. You
know, we have made some investments in natural gas, and at
least across a ground fleet if they buy fuel at our fueling
facilities, they get a 20-percent biofuel blend.
In addition to that, we look at any number of ways to make
our network more efficient, the way we engineer runs, the way
we load trucks, and we invest a lot of money in technology to
make sure that we are the most efficient there we can be.
In our facilities, we have done a lot of work with
alternate energy. Woodbridge, New Jersey, Congressman Sires, I
think that is his district. Unless the Oakland facility that
FedEx Express has under construction now beats us, it is the
largest solar panel array in the United States.
Ms. Hahn. That is encouraging. What about congestion? How
do we----
Mr. Maier. Well, I am not sure I am a good one to ask. We
have a forwarding company called FedEx Trade Networks. They
would be the company that would be most involved in ports. In
our world, parcel, and I can speak to parcel, most of the
arrangements at the ports and drayage to a facility where FedEx
would take possession of that volume, those packages are
actually arranged by our customers, not us.
Now, FedEx Trade Networks acts in many ways as, you know,
the entity that might arrange that if it happens to be a
customer they have, but frankly, FedEx Ground does not have a
lot of experience at the ports. So I am not sure I am a good
one here to answer that for you.
Ms. Hahn. Right. You know, I was on the Panel on 21st-
Century Freight Transportation where we spent 6 months and we
came up with recommendations. One of my recommendations was
moving towards off-peak movement at our ports, and I think that
is an issue that we ought to look at nationwide.
Thank you.
Mr. Petri. Thank you.
Mr. Davis.
Mr. Davis. Thank you, Mr. Chairman.
I first want to say thank you to Mayor Bennett for being
here today. As somebody who also hails from Illinois, I am glad
you gave the recognition to my colleague and my friend,
Congressman Lipinski for the efforts that he has made in making
CREATE a reality.
I was at a rail hearing with Chairman Denham and my
colleagues, Mr. Lipinski and Mrs. Bustos not too long ago to
discuss many of the benefits of the CREATE Program and how it
just does not touch the Chicago land area. It touches America.
So thank you for your leadership.
I would like to go to Ms. Alt and ask her a couple of
questions.
First off, in your testimony you discuss how one late
delivery can have a ripple effect throughout your entire
business model. Without a safe, efficient and reliable freight
transportation system, what will be the effect on Volvo Group's
ability to keep up with your international competitors?
Ms. Alt. It is going to hurt our ability.
Mr. Davis. That was obvious. But most importantly, too, how
is any interruption going to actually impact the communities
where Volvo Group operates?
Ms. Alt. I think if you look at the ports, it is probably a
good example of that. We export for Mack Trucks, we export a
lot of our product, and frankly, if we are not competitive and
cannot export the products, we will not build as many trucks.
So I think that is really the short answer to your question.
Mr. Davis. And at this committee we like short answers. So
thank you.
To get me to my second question for you, you also mention
in your testimony that adding a third truck lane on Interstate
81 greatly improved the efficiency of your operations. Can you
describe briefly some of the benefits to consumers and the
communities where Volvo has manufacturing and distribution
facilities?
Ms. Alt. Sure. We are mostly located in areas that are low
population. So we are usually the largest employer in the
region, and we have a very good benefit package and pay very
well, and we have a great relationship with our labor
workforce.
So what we are able to provide is a community within a
community, frankly, because our manufacturing plants tend to be
very large, and we employ thousands of employees at each of
them, not a few or a hundred, and then, of course, that spawns
the indirect benefits, the suppliers that locate around us, the
restaurants, the dry cleaner, everything that goes around it as
well. So we create a community and then grow that community.
Mr. Davis. Great. I would encourage you to create that
community and grow that community at Illinois' 13th
Congressional District any time you would like, too.
I have no further questions, but I would like to offer the
minute back to my colleague, Ms. Hahn, that she gave to Mr.
Ribble if she so chooses.
Ms. Hahn. I love this committee. We are just so bipartisan
and so friendly. Thank you. I will take it.
Mr. Davis. I knew she would.
[Laughter.]
Ms. Hahn. I never met a minute I would not take.
Mr. Davis. How is that electric car tearing up the roads in
California?
Ms. Hahn. Well, I know especially because they do not go
very far, but I read in the paper today that Elon Musk and
Tesla are building a better battery.
You know, I was going to touch on Mayor Bennett. You talked
about there are two things, public safety, public works. I
agree. One of the things we have not talked about today is the
safety of our freight network. I have worked with Chairman
Shuster to insert some language in our reauthorization bill,
the Coast Guard reauthorization bill, that will allow ports or
require ports to submit their cyber security plan when they
submit their homeland security plan to the Coast Guard.
We have not talked about that. How important is it that we
secure our freight network, particularly cyber security? If
something were to go down at one of our ports in this country,
it would wreak havoc, I believe, on our freight network, and I
would like to hear some of your responses.
Is that something we ought to be paying attention to?
Mr. Bennett. I think in your public safety, what I talked
about, one of the deficiencies in our own local CREATE Program
has been the movement of rail through communities, through
neighborhoods and at grade crossings is a huge consideration of
safety and delay, and certainly in our private sector, those
trucks leaving a rail yard, but just sitting on a local road or
a State road or even a Federal road waiting for a train to move
through before he moves on.
So that safety from a pedestrian and even local community
aspect is also important, and as far as safety in general, we
have a couple of mayors from our region who I do not know if
they testified at the committee on the movement of freight from
a safety standpoint of a hazardous material type, but that is,
I think, the second primary concern about safety.
Cyber, you know, for our great Chicagoland region, I think
we feel pretty comfortable, and unless obviously it involves
national significance of tying in with the safety aspect of
moving chemicals and/or nuclear materials in and through
metropolitan areas.
Mr. Petri. Thank you.
Mr. Nadler.
Mr. Nadler. Thank you, Mr. Chairman.
Mr. Chairman, Chairman Duncan and I just served on the
committee's Panel on 21st-Century Freight Transportation. The
panel examined how best to strengthen the freight network
across all modes of transportation, not just highways, to meet
current and future goods movement demands. The panel issued a
bipartisan report that made a series of key recommendations to
be taken into consideration as the committee prepares to
reauthorize MAP-21.
I want to highlight a couple of those recommendations for
the purpose of this hearing. First, the panel directed DOT to
establish a comprehensive national freight policy and to
designate a multimodal national freight network. The primary
freight network currently designated by DOT includes only
highways. That must be fixed.
Second, the freight panel recommended authorizing
dedicated, sustainable funding for Projects of National and
Regional Significance, PNRS. In 2005, the committee with my
strong support developed the PNRS Program, the original intent
of which was to address major freight bottlenecks and
congestion around the country.
I am pleased the panel recognized the specific need to
authorize guaranteed funding for these critical freight
projects which often face significant hurdles securing funding
under current Federal aid highway programs.
I am currently drafting legislation that would implement
the freight panel's recommendation to reauthorize the PNRS
program with dedicated guaranteed funding to once and for all
complete the major freight projects necessary to protect
America's economic competitiveness.
One thing that became clear during the freight panel's
activities is that there is strong support for a PNRS program
both among the Members and within the goods movement industry.
We are still in discussions. There are still several details to
resolve, but I look forward to continuing this conversation
with my colleagues over the coming days, and I am confident we
can develop a PNRS reauthorization bill that will have broad
support.
I want to ask unanimous consent to submit into the record a
letter from the Coalition for America's Gateways and Trade
Corridors in support of implementing the freight panel's PNRS
recommendations as part of MAP-21 reauthorization.
Mr. Petri. Without objection, so ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Nadler. Thank you.
Just yesterday the President proposed a 4-year
transportation bill that includes $10 billion for a new
multimodal freight grant program. This proposal is very
encouraging and indicates the growing recognition of the need
for dedicated funding for freight projects, including rail and
port projects.
I look forward to working with the administration to enact
such a program.
Now, Mayor Bennett, you mentioned that CREATE, which is
clearly a major national priority, has a $2.5 billion funding
gap. This gap has nearly doubled Illinois' annual Federal aid
highway supplement. What options are Illinois and CMAP looking
at to address the $2.5 billion funding gap?
Do you think the State can fill that gap without additional
Federal support and resources?
And would the State have invested $400 million in this
project without the commitment of Federal and private funds and
if the gap is not filled, what types of projects will not be
completed?
Mr. Bennett. I think the answer is yes, yes, no.
No, certainly CREATE could not have come about without a
guaranteed commitment by all partners involved: the private
sector, the railroad, our railroad partners, the State of
Illinois, and also the initial securing of $1 million by the
Federal Government.
I do not think, in talking to this congressional committee,
no, we cannot go on. In fact, we have struggled. The problem is
that there has not been a continuous stream of guaranteed
resources for us to match. We have taken approximately $400
million and parlayed that into $1.1 billion and it has shown
already a 30-percent reduction in freight congestion in our
region, along with another 30 percent passenger.
So the investments we have made have proven to be
effective, but to go forward, no, sir. We could not do it on
our own, and why I am here and I am sure the other members of
this panel are here to ask the Federal Government to give us a
program, and your remarks in the record are right on, spot on
as to my testimony also.
Mr. Nadler. Thank you.
Let me ask one further question in the 53 seconds I have
left.
A number of the witnesses mentioned MAP-21's national
freight transportation policy. Under MAP-21 that policy is
limited to just highway facilities. Do you support expanding
the policy to make it multimodal? And if not, why not? Or if
yes, why do you think it is important?
I would ask Mayor Bennett and then Secretary Gottlieb.
Mr. Bennett. Absolutely, it has to be. It has to be in
addition to the program going forward. The investment in
freight and movement of freight in this country is absolutely
critical to commerce. It is also critical to the movement of
people in and around those metropolitan----
Mr. Nadler. And multimodal, not just highway.
Mr. Bennett. Multimodal. I am sorry. Yes.
Mr. Nadler. Thank you.
Secretary Gottlieb, you seemed to imply before that you
were opposed to this. Why?
Mr. Gottlieb. No, I would certainly agree with the mayor
that one of the drawbacks of the primary freight network
designation was that it did not take adequate account for, you
know, the multimodal connections that need to take place in
order for the efficient movement of freight.
I think that my comment that you may have perceived to be
negative would be that, again, I think the State's position is
that we are investing a lot of our core highway program dollars
into freight critical projects, both individually as States and
cooperatively as States, and that we would be hesitant to see a
dedicated freight program that was essentially carving funds
out of the core highway program for freight. We would prefer, I
think, to keep State flexibility, and I think we have
demonstrated that the States can----
Mr. Nadler. Well, without dealing with the State
flexibility issue, which is local, your comment just now about
funding or not funding a freight program out of the Highway
Trust Fund, which is a national question, why would you not do
that given the fact that a freight program is absolutely
necessary to reduce the congestion on the highways, which
obviously benefits the highways, too, for the truckers?
Mr. Gottlieb. As I said, if the funding were ideally
outside of the Highway Trust Fund and was supported by shipper
fees, we would definitely be support of that, but we would not
want to see something that was basically carving dollars out of
the core highway programs.
Mr. Nadler. You would not want to see one common source of
funds for transportation?
Mr. Gottlieb. Well, I think as Ms. Alt testified, you know,
there seems to be perhaps a greater openness to strict user
funding for freight related things as opposed to maybe a
broader base of funding for them.
Mr. Nadler. Hopefully that will change.
Thank you.
Mr. Petri. Thank you, Mr. Nadler.
Mr. Williams.
Mr. Williams. Yes, thank you, Mr. Chairman.
I first would like to say to you, Mr. Chairman, I would
like to thank you for organizing the codel last week at the
great State of Texas. I especially want to thank your
subcommittee staff and the staff of TxDOT for working so well
with our local communities to put all of this together, and it
was a great trip. You and other members of this committee were
able to see such important projects as the LBJ Express, the
North Tarrant Express and the new DART Connector at the Dallas-
Fort Worth Airport.
Mr. Chairman, I am proud of the work being done by TxDOT
and the various stakeholders in these projects. It truly
highlights the benefits of the various provisions included in
MAP-21 like TIFIA Program and the use of public-private
financing.
I look forward to working together with you and the other
members of this subcommittee as we reauthorize the next surface
transportation bill and continue these important financing
provisions in the future.
With that being said, I want to thank all of you for being
here today. There has been some great, great testimony, and in
full disclosure, I must tell you I am from Texas, and I am a
private sector guy. I have been in business for 44 years, and
that is the business of selling diesel trucks. I sell thousands
of diesel trucks every year in Texas that pull a lot of
trailers. So I appreciate your comments today.
My first question briefly would be to you, Mr. Maier. Aside
from improvements, and we have talked a lot about this today,
but aside from improvements on the Nation's physical
infrastructure, what else can be done to increase the mobility
and cut down on congestion? I mean, that is the biggest problem
we have got.
Mr. Maier. Well, in our view, the biggest thing we can do
is approve 33-foot trailers. You can absorb 18 percent more
volume without putting another truck on the road. I mean, all
of the benefits are positive. You reduce congestion. You get
more trucks off the road. Less trucks on the road mean less
impact on the infrastructure and, you know, the benefit to the
environment is that you save roughly 300 million gallons of
fuel a year.
And in the interest of full disclosure, I should tell you I
was born in Texas.
Mr. Williams. Well, you are a good man then.
[Laughter.]
Mr. Williams. Ms. Alt, also I appreciate your conversation
on ``just in time'' inventory. Being in the retail side of it,
we appreciate that greatly, but I would ask you also: what
recommendations would you have for how we can best address the
vast increase in freight tonnage that we have got that
everybody talks about and the projection we have got of this
increase over the next 20 years?
Ms. Alt. Well, I think to agree, we can move more freight
with less fuel, emitting fewer emissions and with fewer
drivers. We can do that today with some policy changes by
allowing more freight to be hauled.
The double 33-foot is a great example. We build trucks.
Maybe there is an underestimation of the new technology in
trucks that has been going on for the last several years. The
trucks are safer. Throughout the rest of the world, the Volvo
Group provides trucks that haul longer freight, heavier freight
safely. So we can move in the existing infrastructure today
more freight with less fuel safely.
Mr. Williams. Well, I appreciate that, and I would just say
that I am one of those that thinks the Government should do
three things, and one of which is help us with infrastructure.
It is a tough job for all of us. We appreciate all that you are
doing and appreciate what you do and we appreciate the people
you employ.
Ms. Alt. Thank you.
Mr. Williams. We need to find a way so you can employ more
people, but anyway, thank you for that.
And, Mr. Chairman, I yield back.
Mr. Petri. Thank you.
Mrs. Napolitano.
Mrs. Napolitano. Thank you, Chairman Petri and Ranking
Member Norton, for the meeting. It is informative and helpful.
My district is home to the Alameda Corridor-East. That is
the gateway where you get your trains in Chicago. We handle
about 40 to 45 percent of the Nation's traffic out of Ms.
Hahn's area into and through my area.
In just my area, we have 54 crossings, and there are only
probably 22 grade separations. The rest are going to be safety
improvements. Alameda Corridor-East is a joint power authority.
It is funded with State bonds, county Measure R and Federal
bonds. So it has been moving greatly.
However, it was designated as a Project of National and
Regional Significance in the SAFETEA-LU bill. It was not
subsequently provided with proper and adequate funds for
completing all of the separations.
So I agree with Mayor Bennett that Federal involvement to
help move goods is critical.
Mr. Chairman, I ask unanimous consent to include in the
record testimony from Alameda Corridor-East Construction
Authority regarding steps that can be taken to improve our
national freight network.
Mr. Petri. Without objection, so ordered.
[The information follows:]
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mrs. Napolitano. Thank you, sir.
ACE recommends establishing a national freight
infrastructure grant program reauthorizing the Projects of
National and Regional Significance, including nationally
significant trade corridors in the primary freight network and
providing, of course, more authority to expedite delivery.
Of course, we are not even considering that we are looking
to increase more international trade by Buy America, by
increasing the effort to bring manufacturing back to the U.S.
That will help in bringing more jobs and more economy to our
areas.
Of course, in my area they expect 250 trains to go through
the Alameda Corridor by 2025 daily. So it would be a negative
impact in many areas, as has been discussed.
I guess one of the question should be should the next
transportation bill continue to fund a highway-rail grade
crossing program. How important do you feel this grade crossing
safety is to transportation system and what role should the
railroad play in this?
Mr. Bennett. Thank you, Congressman.
Certainly with CREATE, as I have indicated in my testimony,
the large gap that is left in our 20-year plan is at grade
separations. Only 3 out of 25 have been completed, and more
needs to take place.
The great question about railroads and whether or not their
commitment or support of funding, assisting funding, at grade
crossings has certainly been a conversation in the Chicago
area. You can imagine outside the metro area how many grade
separations that we have to deal with.
We have worked in the past. The addition of the CN buyout
of a bypass around the Chicago area involved closing a many
grade separations, but they also made a commitment to assist in
the funding of those grade crossings. They are very expensive,
around $50 million per grade crossing, and again, as the
congressman indicated, we need to be more creative. We are
doing that at CMAP on trying to look at ways of funding those
kinds of things without possibly waiting for or assisting on
Federal funding.
Mrs. Napolitano. Well, our railroads benefit greatly
because they can increase their transportation, being able to
load more on their rail rather than on truck.
We, of course, have daily currently in my area 100 actual
trains going through my area daily, and that is combined with
railroad and some Metrolink, but generally mostly Union
Pacific.
Now, to the question one of my colleagues or one of the
statements about the truck sales, I did visit one of my
companies, Freightliner, and they were hitting the same point
about the excise tax, that they feel that there should be
either a reduction or at least consideration of something to
help people purchase so the owners of the rigs are able to pick
up, not only from the standpoint of economy, but also because
it is environmentally better. People cannot afford $125,000
with the new equipment for environmental purposes. So they buy
used ones and so we continue to pollute.
There are all kinds of other issues that we need to be able
to address, and I would hope that we continue to take into
consideration areas where we have major traffic problems, train
derailments and safety issues.
So with that, Mr. Chairman, I thank you, and I will have
something for the record.
Mr. Petri. Thank you.
Mr. Barletta.
Mr. Barletta. Thank you, Mr. Chairman.
I am enjoying the conversation. Being a mayor for 11 years
and also having worked in a family construction company that
built roads and bridges, it is pretty interesting for me. So I
am going to put both my mayor's hat back on for a minute and my
hard hat back on.
Mr. Gottlieb, you called the first and last mile the
capillaries of the system. When I was mayor of Hazleton, my
city sat at the intersections of Interstate 80 and 81. So I
understand completely the impact that freight has on our local
roads. And my question to you would be: how can we better
assist the States as they support these critical roads and
bridges, especially in light of Mr. Maier's observation that
the volume of freight moving by truck is expected to more than
double by 2035?
And then putting hard hat and mayor's hat back on, being in
a construction industry, I also know the difference between an
interstate highway and a local road. I know there is up to 12
inches of concrete on an interstate, and I also know there is
only a few inches of asphalt on the local road.
My question to Mayor Bennett is: can you discuss the impact
of freight on the first and last mile? And how do localities
bear this burden?
Mr. Bennett. It is obviously a lot of money, and as far as
the situation in our community, and I think it was mentioned in
California also, is that the last mile literally is most of
these grade separations need to be fixed around the intermodal
system of trains and freight or transport of freight from those
trains to the highways, and it is in and around those rail
yards. So it is all tied together.
The cost of doing that for a local community is unbearable.
It is a $50 million cost. It is not so much the roadway itself.
It is the overpass or underpass that costs the huge amounts of
money for the local government.
However, in CREATE we, again, parlayed money from the city
of Chicago, from the State of Illinois, from our private
partners to help offset some single person having the whole
burden of that cost.
So, yes, it is not sustainable from a local community, and
that why partnerships need to be built to offset those costs.
Mr. Barletta. Mr. Gottlieb, how can we help the States?
Mr. Gottlieb. Thank you.
The first and last mile connections are critical and vital
to have an effective network, and one of the things we have had
happen in our State is we have become a leader in the
production of frack sand for hydraulic fracturing, and we are
sort of a hub for it in the western part of the State.
And one of the things we have found as we have looked at
the increasing demand for the transportation of frack sand both
by rail and on the highway system is that we do not really have
a big problem on our system, but when you get off of the State
system and you get close to these facilities, then there can be
problems.
We have had to work with our local units of government to
try to address those. I would say you asked, you know, what can
the Federal Government do. I would say the first thing I would
say is to, as I said, play a role in allowing the States to
participate to a greater degree in the development of a
national primary freight network because I think the States
have the best understanding about the type of materials that
are moving on their system, where those freight generators are.
We have spent a lot of resources in our State putting
together a primary freight network and looking at actually
where goods are originating and where they are terminating, if
they are coming into or out of the State or through the State,
and I think we can apply a lot of that data to assist in making
sure that the investments are made in a prioritized way.
So I would say, you know, again, it is about having a
cooperative process between U.S. DOT, the State DOTs, and the
local governments and metropolitan planning organizations to
identify that network.
And if I could just, Mr. Chairman, real quickly just back
up a second to Representative Napolitano's question about the
grade crossing program, that has been a great transportation
safety success story, and we certainly would be supportive of
its continuation.
Mr. Barletta. Thank you.
Ms. Alt, I have toured the Volvo Mack facility in
Shippensburg, which is just outside of my district in
Pennsylvania, and I see what goes on in making some of your
heavy duty trucks. I work in the construction industry. I can
tell you we ran nothing but Mack trucks, which I know you will
be happy to hear.
I know how hard it is to invest a half a million dollars in
a piece of equipment if you do not know how long the company is
going to have work. Could you explain a little bit how
important it is that we invest in a long-term highway bill and
how Volvo is impacted by short-term extensions?
Ms. Alt. It is simple business. Building a new road or
building a new bridge does not take 2 years. It takes longer
than that, and you cannot ask local business people, which are
your primary contractors. There may be a large company that is
the major prime, but he is subcontracting that to the guy that
owns a dump truck, to the mom-and-pop that owns five dump
trucks and a wheel loader.
They cannot do business on 1 and 2 years. They need 4 and 5
years. They need stability. It is just simple business. This is
not small. We are not buying a car. We are buying a $500,000
piece of capital equipment. You have got to have at least some
ability to know that you are going to be able to recover that
investment.
Mr. Barletta. And when there is a lot of construction work,
I can tell you there is a lot more people, men and women,
working in the manufacturing plants. So this is much more than
just road construction signs and people on the highways, and
that money, when there is a lot of construction work, that
money goes back into the local economy because when
construction workers make a lot of money, they take their
families out to eat. They buy local products, and it goes right
back in the local economy.
So I just wanted that on the record. Thank you, all.
Mr. Petri. Thank you.
Ms. Titus.
Ms. Titus. Thank you, Mr. Chairman.
Thank you for being here.
I would like to go back to the national freight network
that was established by the Secretary of Transportation under
MAP-21. This focus and new emphasis on freight mobility is very
important for communities in the West, including Las Vegas that
represent, because we import everything from people to
lobsters. We have got to bring it in efficiently, effectively,
and in expensively, hopefully.
Also in MAP-21 there is a designation of I-11, which an
interstate highway between Las Vegas and Phoenix, and we are
the 2 only metropolitan areas left in the country that do not
have an interstate connecting us, and so that is going to be
very important for the 8 million people who live between the 2
cities and the 40 million tourists who visit the area.
I am concerned though about the parameters of the
Department of Transportation's primary freight network because
if you look at that, as I understand it, it caps the number of
miles at 27,000, and it just looks at current infrastructure,
not future infrastructure.
Now, in the West there is only one north-south corridor,
which is I-5, and I realize that I-11 cannot be considered now
because it is a future project, not one that exists, but I
would like you all to talk about the possibility or the need
for us to look long term, look at future highways, additional
things that can be added to that network as we look at renewing
the transportation bill.
And I might start with you, Mr. Gottlieb, and then anybody
else that would want to comment.
Mr. Gottlieb. Thank you.
I think the 27,000-mile basic criteria or basic limit
really placed a lot of constraint on U.S. DOT in terms of how
they were able to put the network together, and as you properly
pointed out, you know, lack of ability to really provide
connectivity, to really provide the access to multimodal
connector points, the ability to allow for the fact that as
things change that network could grow I think, were all
shortcomings of that designation.
I think it has it has just been a challenge for everybody,
for the States as well as U.S. DOT as the States have commented
on the designation. It has just been a big challenge to try and
figure out how do you put a meaningful multimodal network
together to fit within that 27,000-mile limit.
So we think that is something that definitely needs to be
taken a look at in the future.
Ms. Titus. Mr. Bennett.
Mr. Bennett. Just a couple of quick comments. I would think
if I go back to as a young person back in the mid-1950s, what
President Eisenhower did for this Nation in creating a highway
system is just absolutely for us now, the beneficiaries of
that, has been incredible. And I wish I could believe that
Congress could be that bold with a highway program that can
reincorporate that vision of a Nation growing and a Nation
moving goods and services. So in general, be bold.
As far as the alternative, as we have seen in the State of
Illinois, it may get down to toll roads. It may get actually
down to ``pay as you go'' type of roadways to have that type of
interstate or large highways built to connect major and sub-
major cities within a State, if not through State to State.
So, again, I ask that we all be bold here.
Ms. Titus. Well, I would ask are there any specific
recommendations that you have about that cap or how to lift
that cap or any other suggestions that we need to put into our
deliberations as we look at the new transportation bill?
Mr. Gottlieb. Thank you.
I think as you look at reauthorization, we really need to
seriously consider, number one, lifting the gap and rather than
having artificial limits on the size of the network, allowing
the States to engage in a process of identifying what their
critical freight corridors are, knowing all that they know
about the movement of goods in their State, and then, you know,
overlaying that with obviously U.S. DOT's involvement in terms
of putting together a comprehensive and cohesive national
network. But that will require, I think, lifting the cap to do
that.
Ms. Titus. Well, thank you.
I think so, too, because that stretch from Las Vegas to
Phoenix is just part of what is planned hopefully all the way
from Canada to Mexico. It will be a while in coming, but if we
do not plan for the future then we will be caught short.
Thank you. I am going to yield back.
Mr. Petri. Thank you.
Mrs. Capito.
Mrs. Capito. Thank you, Mr. Chairman. I thank the panel.
I had a couple comments. First of all, Ms. Alt, I am from
West Virginia, and we have many folks who work in your
Hagerstown, Maryland plant, great West Virginians, and they are
very, very happy to be there. We are happy that you are there,
too, employing so many folks.
I wanted to ask Secretary Gottlieb what approximately
percentage of truck traffic on your State highways you consider
to be a large amount. Twenty-five percent, forty percent?
Mr. Gottlieb. What do I consider to be a large amount? I
will give you an example. We have a corridor, major corridor,
between Madison and Rockford, Illinois, I-39/90 corridor that
we are in the process of doing a capacity expansion on. That
corridor extends all the way up into the central and northern
part of the State. It brings a lot of tourists and a lot of
goods into and through the State.
That corridor carries about 30 to 35 percent heavy trucks.
I think that would be one of the highest that we would have in
the State, and it is one of the reasons why we have really
prioritized it for improvement and for congestion relief, but I
would say that for us that is kind of getting up there.
Mrs. Capito. Well, the reason I asked the question is I
mentioned I am from West Virginia, and there is a corridor that
comes down through Ohio, through West Virginia on and connects
up to 64, and, Mr. Maier, I am sure your trucks are on there
all the time. It is Route 35. It still has 14 miles of two-lane
highway, has over 30 percent truck traffic on it, and it is
very dangerous.
And so when I hear about, you know, the freight corridors
in the larger cities and problems with congestion, I guess I
want to re-emphasize that rural America still has a great deal
of challenges in order to satisfy the demands of safe freight
travel through our communities.
I do not know if you have a comment on that that would help
us realize that that should be part of the priority as well as
the high urban areas and the interstates and the corridors and
everything else. There is still a lot of Route 35s which we are
hoping to get completed remaining in this country which would
really help, I think, your business and help our safety and the
movement of goods.
Do you have a comment on rural America? You have certainly
got this same situation in your State. Yes, Mr. Gottlieb.
Mr. Gottlieb. Yes, thank you.
Absolutely, and we constantly are facing that, you know,
sort of struggle as, again, I think the bottom line here I
think that you are hearing from everyone is that we just do not
have the resources to meet all of the needs that we have.
So we do have this friction that exists between, you know,
the urban areas and the more rural areas of our State, and the
rural areas generate a lot of economic activity, and they
generate a lot of freight movement.
I mentioned frack sand. I could also mention timber. I
could mention agricultural commodities, and trying to make sure
that we have a system that can accommodate that movement safely
and efficiently, again, it creates an environment where we just
have to be right now really prioritizing our investments and
trying to make sure that we are paying attention to needs in
both of those areas.
But, again, it comes down to, you know, we have got a
commission that met in our State over a period of about 15
months and identified about $6.8 billion in multimodal needs.
So you are correct.
Mrs. Capito. Mr. Mayor, did you have a comment on that?
Mr. Bennett. Well, at the risk of sounding like a broken
record, I would say, again, in our view the biggest way to
reduce the congestion, particularly even on rural highways, is
to allow longer trailers, 33-foot trailers.
Mrs. Capito. So just to clarify, you do not think a 33-foot
trailer would pose any more safety risk in a two-lane 55-mile-
per-hour highway than a 70-mile-per-hour interstate?
Mr. Bennett. Our experience is that, like I said before, we
have been running them in the State of Florida since 2010. We
have run roughly half a million miles without an accident.
Mrs. Capito. Good to know.
Mr. Bennett. The drivers that pull these trailers think
they track better behind the power unit and they are more
stable than 28s.
Mrs. Capito. OK. That is great information. Thank you.
My final comment would be the safety of your containers or
not containers, but of the vessel. We just had the chemical
spill into our water resource in West Virginia from a tank that
was right next to the water, holding a supposedly nontoxic
substance which caused all of us to cease to be able to use our
water for any purpose for weeks.
What kind of inspection regimes do you have? Is it
individualized by the State? I am sure you inspect. As they go
out of the factory, do you re-inspect on certain times?
It is probably less for you, Mr. Maier, because you are
probably mostly carrying packages, but what about you, Mr.
Secretary, in your State?
Mr. Gottlieb. With regard to?
Mrs. Capito. Safety of the truck itself in terms of
leakage, preventative leaks if you're carrying hazardous
materials.
Mr. Gottlieb. We are fortunate to have a consolidated
agency where the enforcement of truck safety is part of our
agency. So we are able to take a more comprehensive approach to
that. I think we work closely with Federal Motor Carrier Safety
Administration.
But again, I will tell you I find it to be a resource
challenge to be able to have enough inspectors out on the
highway to make sure that equipment is being operated safely
and it is being operated within existing----
Mrs. Capito. Do you have a regular inspection routine that
like you have to have your truck inspected once a year, like we
have to have our cars inspected once a year?
Mr. Gottlieb. I know for certain types of commercial
vehicles we have. I cannot answer the question about all of
them.
Mrs. Capito. OK. Thank you.
Thank you, Mr. Chair.
Mr. Petri. Thank you.
Mr. Michaud.
Mr. Michaud. Thank you very much, Mr. Chairman and Madam
Ranking Member, for having this very important hearing, as well
as for our panelists for your testimony this morning. It has
been really enlightening.
And actually I want to follow up actually, Mr. Secretary,
with an answer you gave to Mr. Ribble about the State of
Wisconsin.
As you know, Maine is currently in the midst of a 20-year
pilot program that allows heavier six-axle trucks on the
interstate. Those more productive vehicles allow us to move
more freight with fewer trucks. The extra axle maintains the
stopping distance to ensure safety, and actually in the pilot
program we have seen a decrease in fatal accidents that
actually go down because of that pilot program, and with the
improved distribution of the weight on each axle, it actually
reduces the weight per axle, per tire, which is a lot different
than the five-axle trucks.
The result, what we have seen so far is lower shipping
costs, improved safety without damaging our actually road
system, and actually it has saved the Department of
Transportation money by allowing them to go on the interstate.
The pilot program actually has the support of the Maine
Department of Transportation, the Maine State troopers, Maine
truckers and Maine shippers.
In fact, yesterday I met with the Commissioner of the
Department of Transportation from Maine who was down there, and
he confirms that the continuation of this pilot program is an
unequivocal success for the State.
And as you know, Mr. Ribble and I have legislation to allow
other States that flexibility, that management tool if they so
choose to go that route, which I think is very important,
having served both in the House of Representatives and the
State senate, to give the State those flexibility and those
tools to do what is best for their individual State.
So I want to thank you very much for your testimony, and I
guess my question is: have you seen that same type of success
in Wisconsin, number one?
And number two is as we deal with the reauthorization what
are other States doing creatively as far as trying to fund the
States', you know, infrastructure needs within the respective
States other than bonding and the usual fee for service?
Mr. Gottlieb. Thank you for those questions.
With regard to the truck size weight issue again, speaking
for Wisconsin DOT and not necessarily for AASHTO, the changes
that we have made really stemmed from this study that I
mentioned that we had done in 2009, the comprehensive truck
size and weight study, and to your point.
And I would reinforce the things that you said, that we
looked at six different configurations in addition to the
standard 80,000-pound, five-axle truck-trailer combination, and
in each of those six alternative configurations that we looked
at, we had net safety benefits for the reasons that you
mentioned. We had net productivity benefits, and we had net
benefits to pavement conditions.
So it is a tradeoff there, but certainly I believe that
there are configurations that can enhance productivity, protect
traffic safety, and also protect our infrastructure, which is
our primary mission as an agency.
To your funding question, I think as many States have, I
think we have started to make a pretty comprehensive study of
what other States are doing to try and address other revenue
issues. The Governor has asked our department to take a look at
this as we go into the next State budget next January. So we
are taking a keen interest in what some other States have been
successfully able to do and some of the things that have not
been successful.
I would say I think it splits along a couple different
lines. One is, you know, do we continue along this path that we
have historically had of primarily a user fee funded
transportation system or do we recognize that the
transportation system as a whole benefits our economy. It
contributes to competitiveness for our country, and that
therefore, the funding of it ought to be more broadly based.
Some States are looking at, you know, sales taxes and
things of this nature. So I think that is one of the splits
that exists between continuing that user fee funded system
versus going to something that is a little bit more broadly.
The other comment I would make is that there is a lot of
discussion about, you know, alternative methods of financing,
and it is something that, frankly, I am not an expert on
because we have not done a lot of it in Wisconsin with regard
to P3s or alternative financing, but I would just caution and
draw the distinction that there is a difference between
financing and funding, and at the end of the day, you know,
everything has to be paid for.
So I believe our fundamental national problem is a funding
problem rather than a financing problem.
Mr. Petri. Mr. Lipinski.
Mr. Lipinski. Thank you, Mr. Chairman, and thank you for
holding this hearing.
Mr. Maier, I want to say it is good to see you here, and
everywhere I go I tell people about the flight simulator down
there at FedEx and how impressed I was by that. Lewis
University actually where Mr. Bennett went to school has a
great aviation program there, and they said, oh, yeah, they are
very familiar with that.
I wanted to thank Mr. Bennett for coming here and talking
about the importance of CREATE. Certainly everyone on this
committee knows that I have been beating that drum since I have
gotten here, and the chairman certainly knows that, as he
mentioned in his question in the beginning talking about CREATE
and the importance of it.
One thing that, Mr. Bennett, you had mentioned and it is a
concern of mine also with the CREATE Program is the fact that
only 3 of the 25 highway-rail grade separation projects have
been completed. The other three are under construction. There
are 13 that do not have any funding at all, and this is
certainly something I hear a lot about from my constituents.
It affects not only individuals, but also the freight
network having the blocked crossings. Is there anything else
that you wanted to add about that, about the impact that you
see from these block crossings or ideas about how to move
forward to get these done?
One big part of the issue is it is more difficult to do the
bigger project, and that has been one of the issues with
CREATE, is it is easier to do the smaller projects rather than
sink a lot of money into the bigger projects, but is there
anything else you want to add about the grade separation issue?
Mr. Bennett. Thank you, Congressman.
And by the way, the congressman and I both grew up on the
Southwest Side of Chicago in the same neighborhood and faced,
as the congressman has indicated, the problem of at grade
separations certainly in his district and that region of
Chicagoland area.
I think a couple of panelists or a couple of congressmen
had indicated local economies, and certainly grade separation
in and around these major freight intermodal areas is very
critical as is the survival of the local economy of not only
the Southwest Side of Chicago, but throughout the metropolitan
region in dealing with grade separations.
It is a critical component that has really lacked not
necessarily attention, but lacked the priority of funding for
that aspect of it, and we hope, again, with this new bill that
we will be able to re-prioritize at grade separations and
complete or begin to complete the long list of at grade
separations.
Mr. Lipinski. And you had mentioned the Projects of
National and Regional Significance. I missed some of it, and I
am not sure if Mr. Nadler raised that or not, but that is
certainly critically important, I think, as we move with
forward MAP-21 to not only include that, but also to fund them,
which was an issue with the last bill.
One other question I wanted to ask is you had talked about
the national freight policy, and one of the suggestions that
you had was to integrate metropolitan regions into the freight
investment decisionmaking process. Could you expand on that and
why you think that's important?
Mr. Bennett. I think before any money is spent you want to
have a plan and I think not only a plan in your own
metropolitan area, but throughout the entire country. It is a
national freight plan. We have had congressmen speak from their
metropolitan areas about connecting the dots, so to speak, from
California to Chicago and then onward to the eastern seaboard,
that by a coordinated effort of these metropolitan regions in a
national freight plan, which MAP-21 called for in its
authorization to be established, we did it with CREATE and
there are now since then other metropolitan regions who have
come up with a plan, again, to connect all the dots together.
So we think it's significant in the priority of spending of
freight monies going forward, and we strongly believe in
cooperating with our partners.
Mr. Lipinski. And I know the last thing I just want to
mention on another point that you had made in the
recommendation is to redefine the national freight network to
comprise the multimodal transportation system, and it was
brought up a number of times here. We had the Panel on 21st-
Century Freight Transportation last year, and I think we had a
majority of the Members who were on the freight panel who are
here today, and I am very hopeful that we can move forward
because that was certainly something that we had talked about.
It has been a difficulty because to some extent our
committee is separated into subcommittees that look at single
modes, that we have not done enough to really look at it
comprehensively, and I think the freight panel did that, and
hopefully we can include some of those recommendations in the
reauthorization of MAP-21.
Thank you.
Mr. Petri. Thank you.
And I would ask unanimous consent that the record of
today's hearing remain open until such time as our witnesses
have provided answers to any questions that may be submitted to
them in writing and unanimous consent that the record main open
for 15 days for additional comments and information submitted
by Members or witnesses to be included in the record of today's
hearing.
Without objection, so ordered.
And if there is no other comment, this hearing is
adjourned.
[Whereupon, at 11:58 a.m., the subcommittee was adjourned.]
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