[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]


 
 HIGHWAY CAPACITY AND FREIGHT MOBILITY: THE CURRENT STATUS AND FUTURE 
                               CHALLENGES

=======================================================================

                                (109-70)

                                HEARING

                               BEFORE THE

                            SUBCOMMITTEE ON
                    HIGHWAYS, TRANSIT AND PIPELINES

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                       ONE HUNDRED NINTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 10, 2006

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure

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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                      DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-    JAMES L. OBERSTAR, Minnesota
Chair                                NICK J. RAHALL, II, West Virginia
SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         JERRY F. COSTELLO, Illinois
JOHN J. DUNCAN, Jr., Tennessee       ELEANOR HOLMES NORTON, District of 
WAYNE T. GILCHREST, Maryland         Columbia
JOHN L. MICA, Florida                JERROLD NADLER, New York
PETER HOEKSTRA, Michigan             CORRINE BROWN, Florida
VERNON J. EHLERS, Michigan           BOB FILNER, California
SPENCER BACHUS, Alabama              EDDIE BERNICE JOHNSON, Texas
STEVEN C. LaTOURETTE, Ohio           GENE TAYLOR, Mississippi
SUE W. KELLY, New York               JUANITA MILLENDER-McDONALD, 
RICHARD H. BAKER, Louisiana          California
ROBERT W. NEY, Ohio                  ELIJAH E. CUMMINGS, Maryland
FRANK A. LoBIONDO, New Jersey        EARL BLUMENAUER, Oregon
JERRY MORAN, Kansas                  ELLEN O. TAUSCHER, California
GARY G. MILLER, California           BILL PASCRELL, Jr., New Jersey
ROBIN HAYES, North Carolina          LEONARD L. BOSWELL, Iowa
ROB SIMMONS, Connecticut             TIM HOLDEN, Pennsylvania
HENRY E. BROWN, Jr., South Carolina  BRIAN BAIRD, Washington
TIMOTHY V. JOHNSON, Illinois         SHELLEY BERKLEY, Nevada
TODD RUSSELL PLATTS, Pennsylvania    JIM MATHESON, Utah
SAM GRAVES, Missouri                 MICHAEL M. HONDA, California
MARK R. KENNEDY, Minnesota           RICK LARSEN, Washington
BILL SHUSTER, Pennsylvania           MICHAEL E. CAPUANO, Massachusetts
JOHN BOOZMAN, Arkansas               ANTHONY D. WEINER, New York
JIM GERLACH, Pennsylvania            JULIA CARSON, Indiana
MARIO DIAZ-BALART, Florida           TIMOTHY H. BISHOP, New York
JON C. PORTER, Nevada                MICHAEL H. MICHAUD, Maine
TOM OSBORNE, Nebraska                LINCOLN DAVIS, Tennessee
KENNY MARCHANT, Texas                BEN CHANDLER, Kentucky
MICHAEL E. SODREL, Indiana           BRIAN HIGGINS, New York
CHARLES W. DENT, Pennsylvania        RUSS CARNAHAN, Missouri
TED POE, Texas                       ALLYSON Y. SCHWARTZ, Pennsylvania
DAVID G. REICHERT, Washington        JOHN T. SALAZAR, Colorado
CONNIE MACK, Florida                 JOHN BARROW, Georgia
JOHN R. `RANDY' KUHL, Jr., New York
LUIS G. FORTUNO, Puerto Rico
LYNN A. WESTMORELAND, Georgia
CHARLES W. BOUSTANY, Jr., Louisiana
JEAN SCHMIDT, Ohio

                                  (ii)



            SUBCOMMITTEE ON HIGHWAYS, TRANSIT AND PIPELINES

                  THOMAS E. PETRI, Wisconsin, Chairman

SHERWOOD L. BOEHLERT, New York       PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         NICK J. RAHALL II, West Virginia
JOHN J. DUNCAN, Jr., Tennessee       JERROLD NADLER, New York
JOHN L. MICA, Florida                GENE TAYLOR, Mississippi
PETER HOEKSTRA, Michigan             JUANITA MILLENDER-McDONALD, 
SPENCER BACHUS, Alabama              California
STEVEN C. LaTOURETTE, Ohio           ELIJAH E. CUMMINGS, Maryland
SUE W. KELLY, New York               EARL BLUMENAUER, Oregon
RICHARD H. BAKER, Louisiana          ELLEN O. TAUSCHER, California
ROBERT W. NEY, Ohio                  BILL PASCRELL, JR., New Jersey
FRANK A. LoBIONDO, New Jersey        TIM HOLDEN, Pennsylvania
JERRY MORAN, Kansas                  BRIAN BAIRD, Washington
GARY G. MILLER, California, Vice-    SHELLEY BERKLEY, Nevada
Chair                                JIM MATHESON, Utah
ROBIN HAYES, North Carolina          MICHAEL M. HONDA, California
ROB SIMMONS, Connecticut             RICK LARSEN, Washington
HENRY E. BROWN, Jr., South Carolina  MICHAEL E. CAPUANO, Massachusetts
TIMOTHY V. JOHNSON, Illinois         ANTHONY D. WEINER, New York
TODD RUSSELL PLATTS, Pennsylvania    JULIA CARSON, Indiana
SAM GRAVES, Missouri                 TIMOTHY H. BISHOP, New York
MARK R. KENNEDY, Minnesota           MICHAEL H. MICHAUD, Maine
BILL SHUSTER, Pennsylvania           LINCOLN DAVIS, Tennessee
JOHN BOOZMAN, Arkansas               BEN CHANDLER, Kentucky
MARIO DIAZ-BALART, Florida           BRIAN HIGGINS, New York
JON C. PORTER, Nevada                RUSS CARNAHAN, Missouri
TOM OSBORNE, Nebraska                ALLYSON Y. SCHWARTZ, Pennsylvania
KENNY MARCHANT, Texas                JAMES L. OBERSTAR, Minnesota
MICHAEL E. SODREL, Indiana             (Ex Officio)
DAVID G. REICHERT, Washington
JEAN SCHMIDT, Ohio
DON YOUNG, Alaska
  (Ex Officio)

                                 (iii)

                                CONTENTS

                               TESTIMONY

                                                                   Page
 Grenzeback, Lance, Cambridge Systematics........................    24
 Larkin, John, Managing Director, Stifel, Nicolaus and Company, 
  Inc............................................................    24
 Meyer, Michael, Professor, Georgia Technical University.........    24
 Shane, Jeffrey, Under Secretary for Transportation Policy, U.S. 
  Department of Transportation...................................     6

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri.................................    36
 Michaud, Hon. Michael H., of Maine..............................    68
Porter, Hon. Jon, of Nevada......................................    87

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Grenzeback, Lance...............................................    37
 Larkin, John....................................................    49
 Meyer, Michael..................................................    58
 Shane, Jeffrey..................................................    88

                       SUBMISSION FOR THE RECORD

Michaud, Hon. Michael H., a Representative in Congress from 
  Maine, executive summary, Study of Impacts Caused by Exempting 
  Currently Non-exempt Maine Interstate Highways from Federal 
  Truck Weight Limits, June 2004.................................    71


  HIGHWAY CAPACITY AND FREIGHT MOBILITY: THE CURRENT STATUS AND FUTURE 
                               CHALLENGES

                              ----------                              


                        Wednesday, May 10, 2006,

        House of Representatives, Committee on 
            Transportation and Infrastructure,Subcommittee 
            on Highways, Transit and Pipelines, Washington, 
            D.C.

    The subcommittee met, pursuant to call, at 10:00 a.m., in 
room 2167, Rayburn House Office Building, Hon. Thomas E. Petri 
[Chairman of the committee] presiding.
    Mr. Petri. Good morning. The Subcommittee hearing will come 
to order.
    I would like to welcome all of our members and witnesses to 
today's hearing on Highway Capacity and Freight Mobility: The 
Current Status and Future Challenges.
    Transport experts have expressed deep concern regarding the 
freight capacity shortage on America's highways. The last 
several decades have witnessed steady growth in the demand for 
freight transportation, but freight capacity, especially 
highway capacity, is expanding too slowly to keep up with 
demand.
    This hearing will be the first of a series of hearings 
examining the imminent shortage of freight capacity on U.S. 
highways. The first hearing will focus on the current status of 
the highway system as it relates to freight mobility. Our 
witnesses today will present a big-picture perspective to 
provide members with the understanding of the immediacy of the 
freight capacity shortage caused by expanding freight 
transportation needs versus the lack of transportation 
capacity. Also, the witnesses will provide a forecast of where 
freight capacity is heading and what challenges are emerging.
    The next hearings in this series will focus on more 
specific issues, including congestion around port terminals and 
rail facilities, infrastructure funding challenges, and freight 
logistics.
    The U.S. economy depends on its interconnected 
transportation network to move various goods around the Country 
efficiently and reliably. Over 19 billion tons of freight, 
valued at $13 trillion, was carried over 4.4 trillion ton miles 
in our Country in 2002. Since 1980, the interstate highway lane 
miles have risen by 16 percent, while vehicle miles traveled on 
these roads increased by 123 percent.
    Trucks are more frequently used to haul virtually all 
commodities in the U.S. when compared to other modes of 
transportation. About 70 percent of the total value of freight 
shipments in the U.S. is hauled by trucks.
    Freight congestion problems are most apparent at 
bottlenecks on highways. Most bottlenecks are found on highways 
serving major international freight gateways like the Ports of 
Los Angeles and Long Beach, at major domestic freight hubs like 
Chicago, and in major urban areas where transcontinental 
freight lanes intersect congested urban freight routes. These 
bottlenecks accrue significant truck hours of delay totaling 
upward of 243 million hours annually. At a delay cost of $31.25 
per hour, the direct user cost of these bottlenecks is about 
$7.8 billion per year.
    Last summer, our Committee passed the widely supported 
Safe, Accountable, Flexible, Efficient Transportation Equity 
Act, a legacy for users better known as SAFETEA-LU. In response 
to the freight capacity concerns, we included in that 
legislation several programs that are specifically designed to 
improve the movement of freight.
    The bill provided $1.9 billion for the National Corridor 
Infrastructure Improvement Program; it provided $833 million 
for the Coordinated Border Infrastructure program; it provided 
$1.8 billion for a new program to fund projects of regional and 
national significance. The bill provided $100 million to fund 
the Commercial Vehicle Information Systems and Networks, 
pronounced CVISN, program.
    SAFETEA-LU funds several research programs and studies 
designed to improve freight mobility, including a Freight 
Planning Capacity Building Program, a National Cooperative 
Freight Transportation Research Program, and a Motor Carrier 
Efficiency Study.
    We have two panels of witnesses before the Committee today. 
The first panel includes Mr. Jeffrey Shane, Under Secretary of 
Transportation Policy at the United States Department of 
Transportation. The second panel includes witnesses who are 
active in transportation research and matters of freight 
mobility and highway capacity. That panel consists of Mr. Lance 
Grenzeback, Mr. John Larkin, and Mr. Michael Meyer, Professor 
at the Georgia Institute of Technology.
    I now yield to Mr. DeFazio's sit-in, Mr. Pascrell, for any 
opening statement he may choose to make.
    Mr. Pascrell. Thank you, Mr. Chairman. For quite a while we 
have been talking about congestion on our Nation's highways, 
and we all agree something must be done and that the highways 
have become our back roads. Fortunately, there is no quick fix 
here.
    It is estimated that by 2020 New Jersey will have 1.4 
million additional residents, 21 percent more jobs, and will 
double the amount of freight moving into and out of the State. 
A total of 34 billion additional vehicle miles will be 
traveled.
    We would like to increase highway capacity in some 
congested areas. I am supportive of funding for highway 
construction funding; however, increasing road capacity cannot 
be the only answer for the State I live in, the State of New 
Jersey, or for the Nation. New Jersey is the most densely 
populated State in America, approximately 1,100 people per 
square mile, leaving little room for physical expansion. We are 
in the process of even thinking about macadaming our bathrooms 
pretty soon. New Jersey has more cars per square mile than any 
other State. And it is all supposed to run on an infrastructure 
conceived of over 100 years ago.
    We cannot plan a strategy just to pave over what is left of 
New Jersey. It is incredibly important to utilize what current 
roads and transit systems we have in the most efficient manner 
possible. In terms of increasing this efficiency, intelligent 
transportation systems are a critical part, I believe, of the 
equation. Improving operations and management performance for 
freight transportation on our highways is critical to 
maintaining the health of our Nation's economy. The Nation's 
economic engine is built on an efficient highway system, a key 
component in our global competitiveness.
    So I am eager, Mr. Chairman, to hear from our panel members 
this morning on the ways they intend to work together to 
improve our freight capacity, and look forward to a very 
interesting hearing. Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Other opening statements? Mr. Duncan?
    Mr. Duncan. Well, Mr. Chairman, very briefly, just let me 
thank you calling this important hearing. And I agree with the 
things that you have said and that Mr. Pascrell has said.
    I happen to have the privilege to represent one of the most 
popular areas in the Country as far as people moving in, so the 
population is growing rapidly. We have two interstates that 
meet in our district and a third that comes just outside the 
district, so our traffic problems are in some ways just 
becoming horrendous. So we need to really look into this 
subject, maybe encourage more reliance on rail freight and 
other methods.
    So I just think the timing of this hearing is very 
appropriate and the subject matter is very, very important, and 
I thank you for calling this hearing. Thank you.
    Mr. Petri. Thank you.
    Mr. Michaud.
    Mr. Michaud. Thank you very much, Mr. Chairman. Mr. 
Chairman, I want to thank you, first of all, for recognizing 
me, and Mr. Ranking Member, and thank you for holding this very 
important hearing. I will keep my statement brief and ask that 
I might be allowed to submit the rest of it along with 
supplemental material for the record.
    I want to bring this Committee's attention to an important 
aspect of today's hearing topic that is of great importance to 
my home State of Maine. You heard from two previous speakers 
about the density of their district. Maine is a very rural 
State, and I want to address that issue important to Maine.
    This Committee should consider this problem because 
bottlenecks in one State affects commerce everywhere in the 
Nation. Currently, most of Maine's interstate highways are 
subject to federally-mandated truck weight limits of 80,000 
pounds. However, Maine's State limit is 100,000 pounds, and it 
can't be lowered due to the demand on Maine's major industry, 
especially forest products and agriculture.
    As a mill worker for over 28 years, I know it is crucially 
important that we move these heavy loads over our State. 
Unfortunately, as a result of the mismatch between the Federal 
and State regulation, heavier trucks must be diverted off the 
interstate onto State roads that pass through a number of Maine 
communities. This has a negative impact on safety, the economy, 
and the system.
    By contrast, allowing an exemption for the Federal weight 
regulation for Maine interstate would benefit tremendously. 
This change is supported by every municipality in the State of 
Maine, by their chamber of commerce, by safety groups, and by 
the entire Maine delegation, Republicans and Democrats. It 
would greatly improve safety, eliminate more than three crashes 
every year, fatal crashes in Maine, according to the federally 
mandated study. This safety concern is very real.
    Although I have been working on this exemption since I 
became a member of Congress three years ago, the risks of 
current rules were made tragically clear again just last week, 
when a truck killed an elderly pedestrian in Bangor, Maine. The 
truck would have never been on that street if not for the 
weight rules. The truck should have been on the highway, where 
it belonged.
    Exempting Maine from regulations would also help increase 
commerce and capacity in the entire system, allowing 6-axle, 
100,000 pound trucks on the interstate would increase payloads 
by up to 44 percent over 5-axle, 800,000 pound trucks. Reducing 
the number of trucks on the road would cut the amount of fuel 
used by approximately 6 percent and it would enhance trade 
between Canada and the northeastern U.S. by eliminating the 200 
mile truck weight gap that exists on Maine's interstate system.
    In conclusion, Mr. Chairman, if we want to improve safety, 
decrease travel time, speed commerce, increase trade among our 
States, and make our system more efficient, we must consider 
this issue as part of any discussion for future of our highway 
system in meeting the capacity crunch that we currently have in 
the State of Maine. The Maine Department of Transportation had 
commissioned a study about a year ago that addressed a lot of 
the concerns about safety, about the travel of the interstate 
was increased to 100,000 pounds, and actually the cost.
    I know it is unusual, Mr. Chairman, but we do have several 
folks from the State of Maine who traveled to Washington today 
to talk to members of both sides of the aisle about this very 
important issue. It is an issue that could save lives.
    And in this room we see a lot of folks from the Maine Motor 
Transport who are here today, as well as the Maine commissioner 
of the Department of Transportation and his staff to help work 
with the Federal Highway folks, as well as members of Congress, 
to deal with this issue. So if I might, Mr. Chairman, if I 
might recognize and ask the members of the Maine Motor 
Transport and Maine commissioner and his staff to please stand 
in the audience.
    And that is not the whole population of the State of Maine.
    [Laughter.]
    Mr. Michaud. Pretty close, though.
    So with that, Mr. Chairman, I yield back the balance of my 
time.
    Mr. Petri. Well, thank you, and we welcome our guests from 
Maine, and the rest of the audience as well.
    Mr. Mica, any----
    Mr. Mica. Well, thank you, Mr. Chairman. I will just remark 
briefly and thank you for holding this important hearing. And 
whether you are from Maine, Florida, California, the Midwest, 
we all face the same challenge right now. And whether we are 
looking at highways, ports, airports, any of the 
infrastructure, rail infrastructure across the Country, we are 
facing a crunch. One of the questions we are going to have to 
answer is how we finance all of this, particularly our highway 
system and transit system. And as we look at alternative energy 
sources, the very core basis of our financing of our trust 
fund, our aviation system, we see very significant issues.
    I don't have the answers. I am anxious to hear from those 
that deal with the industry to come up with some creative 
solutions. And I find most of those usually come from the 
private sector or from people who deal in some of these key 
areas that make our economy grow, like trucking, rail, 
aviation. . But it is critical that we provide the 
infrastructure so that we can conduct the business of this 
Country, which is business.
    So, again, a very critical subject today, highway capacity 
and freight mobility, on which we are so dependent but also, 
right now, so handicapped. So I look forward to this hearing 
and the comments of these witnesses. Thank you.
    Mr. Petri. Thank you.
    Mr. Higgins, any comments?
    Mr. Higgins. No, thank you, Mr. Chairman.
    Mr. Petri. Mr. Miller.
    Mr. Miller. Thank you, Mr. Chairman. This is a very 
important hearing for Southern California. I represent an area 
that services basically the Ports of Long Beach and Los 
Angeles, and if you look at the impact not only of truck 
traffic with the containers that come through our region, but 
the rail traffic, on the freeways of 91, 60, 10, 5, 57 are 
incredibly impacted.
    In some degree people from our region feel like we are 
subsidizing the rest of the Nation because we suffer the impact 
from the import and export. In fact, about 25 percent of all 
the imports and exports go through my district. Yet, we don't 
feel that the adequate dollars are coming to mitigate that 
impact. And it is going to get worse the next 20 years; they 
are projecting impact to increase by about 70 percent. I don't 
know how we are going to deal with it.
    If you listen to the news on any of our local stations 
about the truck accidents that occur on the freeways, 
especially the 91, it is probably the most impacted bottleneck 
we have in that region. And if you look at the amount of 
transports coming from the harbors through that area, trucks 
just stop, and that is not a good thing to happen. When you 
have trucks and, you know, residential traffic that we get 
going on and off the freeway, that creates a huge problem for 
our area.
    So hearings like this, Mr. Chairman, are extremely 
important. If you heard the level of frustration from 
individuals in my district, they are sitting at what we call 
Alameda Corridor East, they are sitting at at-grade crossings, 
not only commuter traffic, but the trucks trying to deliver 
goods, sitting there watching trains go by. We need to deal 
with these at-grade crossings. We need to deal with the 
capacity on some of our freeways; restricted truck lanes, 
additional lanes. Specifically the 91, we have to do something 
about that. That has a huge impact. In delay with commuters 
alone, they figure the cost is about $31.25 per hour per 
commuter trying to sit on those freeways and trying to get back 
and forth to work.
    So I look in some way to partnership with the Federal 
Government so we can alleviate the impact on our local highways 
and freeways. But it is something that I appreciate that we 
continue to talk about. The more we talk about it, the more 
expectations we increase, I believe, on the part of the people 
in our area, but in government that we have to deal with the 
problems we are facing. And as Mr. Mica said, it is not just 
the trucks, it is not just the rail, but it is also the 
airports. We have a huge issue with our airports in our local 
region, trying to get people in and out. The amount of goods 
UPS and FedEx have hubs in our area.
    So this is a good debate and I applaud you, Mr. Chairman, 
for having it today. Thank you.
    Mr. Petri. Thank you.
    Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. Please excuse my 
being tardy; I had to deliver a speech. Thank you for holding 
this hearing. You know, recently, in the Rail Subcommittee, we 
held a hearing on our congested railroads, and this is the twin 
to that problem, the problem with our congested highways.
    It is estimated that more than two billion gallons of fuel 
was wasted last year due to congestion and traffic backups. 
Now, that is a lot of fuel and that is a lot of money with the 
increasing price of fuel. The number of hours lost to 
productivity was absolutely huge, in addition.
    So this is an investment that needs to be made, an 
investment in America. It is something that can't be exported 
in terms of jobs when we build infrastructure to better move 
our people and our goods.
    And it is something that we must get ahead of. We have got 
the congestion today, it is bad, but when you look at the 
projected 70 percent growth over the coming decades in the 
movement of freight, it is going to be horrendous in the not 
too distant future if we don't get ahead of it. And the kinds 
of issues that will be raised in these hearings and the kind of 
solutions that hopefully we will put forward will serve America 
well for the future.
    So, again, thank you for holding this hearing.
    Mr. Petri. Thank you.
    Are there any other opening statements? If not, we will 
turn to our first panel, which consists of Mr. Jeffrey Shane, 
Under Secretary of Transportation Policy at the U.S. Department 
of Transportation.
    We have your opening statement. We look forward to your 
summary. Thank you.

TESTIMONY OF JEFFREY SHANE, UNDER SECRETARY FOR TRANSPORTATION 
           POLICY, U.S. DEPARTMENT OF TRANSPORTATION

    Mr. Shane. Thank you, Mr. Chairman. And let me add my voice 
to all those who have thanked you for conducting this very 
important hearing; indeed, the whole series of hearings that I 
know you are embarking upon. There is no any more important 
issue to the economic vitality of America than our 
transportation system, and these hearings will be a very 
important focus on that.
    We are grateful to Congress for the tools that SAFETEA-LU 
included, specifically with reference to freight. We look 
forward to seeing more of those added.
    I bring you greetings, of course, from my boss, Secretary 
Mineta, a former member of this body, who sends you all his 
warmest regards. I am here also representing Acting Federal 
Highway Administrator Rick Capka, and we want to discuss issues 
of highway capacity and freight mobility today. And, finally, 
it is a special pleasure to have Maine's commissioner here and 
the delegation from Maine. That is a special treat for all of 
us.
    I don't have to lecture this Subcommittee on the growth of 
our economy recently. GDP increased by 46 percent between 1990 
and 2003. More important for today's purposes is the fact that 
in the last 15 years U.S. foreign trade more than doubled. And 
if you take a look at this first slide that is going to be put 
up, you will see that projected volumes will be even greater by 
2020, given current growth rates.
    Now, this slide, I should point out, is simply reference to 
the volume of trade coming through our ports. And if there was 
any need to emphasize what Congressman Miller was talking 
about, that large tower on the left represents the Ports of Los 
Angeles and Long Beach. All of that trade ends up you know 
where, on our highways and on our rail system. So despite the 
fact that this slide is all about ports, it obviously portends 
a huge problem for us in the movement of freight generally.
    A growing economy and population generates a lot of freight 
movement. And while continued economic growth is dependent on a 
number of factors, a key factor, and one that we think hasn't 
received sufficient attention, is the efficient and reliable 
operation of our Nation's freight transportation systems. 
Trucks are the predominant mode for freight movement. Trucks 
now carry 60 percent of the volume and 70 percent of the value 
of the freight movement in this country. The enormous gains and 
efficiency that we brought about through trucking deregulation 
are seriously threatened today by road congestion, the costs of 
which are borne by shippers and manufacturers and operators, 
and ultimately, of course, by consumers.
    DOT believes the congestion is not an insurmountable 
problem, but solutions are going to require a far more economic 
approach to capacity expansion and improved productivity of the 
existing highway infrastructure.
    A critical tool in assessing overall system performance and 
scope of the congestion problem is improved freight data. That 
is really what I want to spend most of my time talking about 
this morning. It is imperative that we provide timely and 
reliable data to transportation planners and investors so that 
scarce resources are allocated efficiently.
    Freight movement is graphically displayed on the second 
slide, a map that shows truck movements in 1998. The map is a 
product of the Federal Highway Administration's Freight 
Analysis Framework, or FAF. The FAF is the Department's 
principal resource today for understanding freight movements in 
the United States.
    To run this analytic tool, commodity, origin, and 
destination data are collected at the national and regional 
level. A key component of data feed for the FAF maps is the 
Commodity Flow Survey. I can't emphasize enough how vital good 
data collection is to this analytical capability. The commodity 
tonnages are then converted to truck payloads and, through 
modeling, are assigned to routes in the freight transportation 
network. It is those truck assignments that you see on this 
slide.
    The FAF provides a tool not just for the Federal Highway 
Administration, but for the entire Department of 
Transportation, because it helps us predict future demand. For 
example, forecasting freight flows, while taking into account 
economic variables, produced this year 2020 version of the map 
you just saw. As you can see, the freight flows are quite 
considerably more voluminous.
    And in this next slide, comparing freight volumes to 
available highway capacity, you will see the congestion on our 
transportation network as we project it in 2020, assuming, of 
course, that our highway infrastructure remains static. And 
none of us hopes that it will remain static.
    The FAF also lets us consider ``what if'' scenarios of 
proposed capacity expansion, shifts in modal choice, or in the 
case of disasters, an outright loss in capacity. Equally 
important to our national and regional analysis, State and 
local transportation officials can use FAF data with local 
freight data to improve project planning at that level. The 
Federal Highway Administration is currently working with 
numerous State DOTs to refine FAF with additional data to make 
it more useful to planners at all levels.
    An exciting new effort within the Federal Highway 
Administration's Office of Operations uses actual trucks on the 
road to measure the performance of the Interstate System. This 
effort, reflected in the slide that is up now, provides a way 
to monitor the velocity and the reliability of truck movements 
on the Interstate System. Five freight-significant corridors 
were initially selected to prototype this effort. Data from 
those five corridors are being collected from approximately 
250,000 trucks, and are used for speed and travel time 
reliability measures for those corridors. Last month we 
expanded the program to a total of 25 corridors. The slide you 
see here shows the reliability of travel times on the initial 
five corridors that we selected for the month of October 2005. 
This new analytic tool provides views into system performance 
that we didn't have before and that help us determine where we 
should be targeting our investment dollars.
    We have also provided each member of the Subcommittee with 
copies of the most recent edition of Freight Facts and Figures, 
along with a FAF profile of each member's respective State. A 
broad range of freight-related material is always available 
from the Federal Highway Administration's Office of Freight 
Management and Operations on their Web site and, of course, 
directly.
    Operational improvements, through improved system pricing 
and broader technology deployment, are critical to addressing 
congestion as always. The Department continues to support 
broader State flexibility to establish more efficient pricing 
mechanisms. And, in addition, we are working with technology 
developers and State and local governments to develop 
intelligent transportation systems for both vehicles and 
infrastructure that help to relieve congestion and improve 
system reliability.
    Mr. Chairman, I see that my time is up. I know that the 
next panel will be talking about a lot of other efforts of the 
Department of Transportation that implicate freight policy. I 
am proud to say that freight policy generally is playing a far 
more conspicuous and important role in the agenda that we have 
at the Department of Transportation than ever before.
    Secretary Mineta attaches huge importance to it, we all do. 
We are delighted that Congress is focusing on it in this way 
and we look forward to working very closely with you. And I 
would just pause there and welcome any questions that members 
may have. Thank you very much.
    Mr. Petri. Thank you.
    Mr. DeFazio?
    Mr. Pascrell?
    Mr. Pascrell. My first question is this: Ultimately, 
solving the freight mobility problem still boils down to money. 
Our highway account in the trust fund is running out of money. 
We all know that. What does the Department intend to do next 
year when the prospects of that eventually becomes more 
certain? Will you recommend to the President to cut guaranteed 
spending for highway programs or will you recommend raising 
revenues to sustain authorized investment levels included in 
the SAFETEA-LU? That is my first question,
    Mr. Shane. Thank you, Congressman.
    Mr. Pascrell. Because one year is tomorrow.
    Mr. Shane. Yes. We are painfully aware of the pending 
shortfall in highway trust fund resources, and there is no 
question that the Department will be focusing a lot of energy 
into trying to figure out how we respond to that problem.
    SAFETEA-LU, as you know, created the National Surface 
Transportation Policy and Revenue Study Commission, which will 
be kicking off very shortly. We are looking to that Commission, 
in the first instance, to provide recommendations for dealing 
with this shortfall, and those recommendations will certainly 
inform the Department's deliberations as we move forward. It is 
just impossible for me to predict right now what the Department 
will propose to the Administration and the Administration to 
Congress, other than to say that none of us at DOT, least of 
all Secretary Mineta, thinks that we can do with less 
investment into our highway system than we have today. We need 
more. What the sources of that investment will be will be an 
important source of a national policy debate, I have no doubt.
    Mr. Pascrell. So the situation is no different on a Federal 
level than it is on a State level in terms of the leveraging of 
your own trust fund so that more dollars can come in to your 
particular State. We have the same problem in New Jersey. We 
are struggling for a means to bolster those numbers. We have 
been struggling with that on a Federal level. We have to come 
to grips with this and make a decision, because these projects 
need to be continued and new projects, as you have heard, you 
know, need to be designed and ready to be put in place.
    You also emphasized the role private investment plays in 
addressing the capacity problem. But private investment focuses 
on returns to investors, as it should, and not necessarily 
trying to meet the highest transportation priorities of a State 
or a Nation that you and I may agree on. One of our witnesses 
on the second panel--I just glanced through the testimony--
points out in his testimony that most of the traffic delays on 
our highways occur at interchanges, which generally are not 
suitable for private investment, as it is difficult to impose 
tolls at an interchange and to turn a profit.
    How can we address the most severe transportation 
congestion problem in our Country by relying on private 
investment? I would like to hear this.
    Mr. Shane. It is a great question, Congressman, and I don't 
think anybody is here to argue that the country can rely 
entirely on private investment to support our transportation 
infrastructure. I think our expectation is that it will always 
be a mix, that there will be opportunities for private 
investment. There is a lot of private capital out there that is 
available for our transportation infrastructure, and we should 
try to take advantage of it where we can and where it makes 
sense as a public policy proposition. There will also be plenty 
of opportunities for the public sector to weigh in and ensure 
that we have the transportation capacity that we need.
    It will be a mix. Again, I just don't have perfect 
knowledge of what we are going to decide in the future. I do 
know that there isn't sufficient flexibility right now at the 
State level to take advantage of that private sector capital 
that is available. And one of the things the Department and the 
Administration have been proposing is that we try to enhance 
the flexibility available to States to facilitate decision-
making at the State level consistent with the best needs of our 
States. We think that Federal law presents too many impediments 
today to the flexibility that the States deserve.
    Mr. Pascrell. In conclusion, Mr. Chairman, are you sending 
a clear message to the States that you are in gear to assist 
them in the planning for the future when so many lives are 
dependent upon it and so many dollars are dependent upon it? 
Are you sending a clear signal that the Federal Government is 
ready to implement its responsibility, or are we going to talk 
about planning for the next ten years?
    Mr. Shane. I sure hope we are sending that clear signal. Of 
course, you would have to ask those who we are sending it to 
and see if they have received it. But I can tell you that 
certainly within the course of the next several weeks we are 
ramping up dramatically our outreach in terms of trying to 
extend resources, extend help and consultations to all of our 
States in an effort to address these vital economic questions.
    Mr. Pascrell. Thank you.
    Thank you, Mr. Chairman.
    Mr. Petri. Mr. Duncan?
    Mr. Duncan. Well, thank you, Mr. Chairman.
    Very briefly, Mr. Shane, I mentioned the rapid growth in 
Knoxville and East Tennessee area, and the fact that we have 
two interstates that come into Knoxville and a third one just 
outside of Knoxville. What I see happening--I mean, I 
remember--it has not been too many years ago--when the 
interstate in Knoxville was just two lanes on each side and 
there was really no congestion. And now we are going to five 
lanes on each side all through Knoxville and outside Knoxville; 
yet, we still have worse traffic, really, than I face up here. 
And part of that is because of the rapid growth; part of it is 
because we are within 600 miles of two-thirds of the population 
and we have millions of people coming to Tennessee and through 
Tennessee.
    But what I am getting at is I assume that the Department is 
taking into consideration not only the population base that is 
already there, but the future growth and then, in addition, the 
location and the fact that you have so many people coming 
through areas like that. But where are we headed? I mean, you 
know, are we going to have to go to ten lanes on both sides in 
20 years? And of all these things that you have mentioned, all 
these analytical tools, all these programs, what do you think 
is the most hopeful or the most significant thing out of all 
those things you have mentioned to us and all the things the 
Department is considering?
    Mr. Shane. Well, assuming that we have good information 
about the demand that we face, that we can plan properly based 
on the facts, my own view is, for reasons that you have quite 
clearly explained, the addition of more and more and more lanes 
is not going to provide the kind of solution that we ultimately 
need, and my own expectation is that the real solutions will be 
found in a combination of technology and economic tools, such 
as pricing mechanisms calibrating the use of our existing 
capacity more effectively through the use of admittedly 
controversial ideas like variable tolls on our most congested 
highways, and freight-only lanes with a user fee basis such 
that we end up using this infrastructure in the most efficient 
possible way.
    When the United States deregulated the providers of 
transportation back in the late 1970's and early 1980's, we 
found a lot of capacity in the existing infrastructure. It gave 
us probably a quarter century's reprieve in terms of the 
capacity of the infrastructure that existed at that time. That 
particular tool has now been exhausted in terms of its value 
for capacity purposes. We now have to find some new tricks in 
our bag. And my own--I will call it a personal view, if I may--
my own view is that technology and economics are where much of 
the new solutions will be found.
    Mr. Duncan. Well, I will just close with this and say that, 
you know, I talk to people from all over the Country from other 
States who just can't believe the bottleneck and the traffic 
that is through the Knoxville area. It far exceeds--if you just 
look at our population, you just wouldn't believe it. I mean, 
we do have in Knox County a little over 400,000 people and 
then, of course, the surrounding counties are growing the 
fastest. But we need some help, and I hope you will take a look 
at the whole situation there.
    Mr. Shane. Just to follow up, Congressman, those 
bottlenecks are unacceptable.
    The importance of these hearings, Mr. Chairman, is that we 
now have an opportunity to focus national attention on problems 
like that. The inability to focus enough attention on those 
issues I think is what has hurt us in the past. So I am hopeful 
that, working together, we will really begin to address these 
issues. The impact on national economy is not sufficiently 
understood. It is absolutely vital that we solve these issues.
    Mr. Duncan. Well, I would just like to be able to get to 
work faster in Knoxville than I do up here, and right now I 
can't. Thank you.
    Mr. Petri. Thank you.
    Mr. Mica?
    Mr. Mica. Thank you very much, Mr. Chairman.
    Thank you, Mr. Shane, for your testimony. As you heard in 
my opening remarks about the truck weight and what that can do 
for the bottleneck, when you look at the increase in highway 
traffic that is projected in the near future, as well as the 
increase in trade through Canada, do you agree that if you can 
take care of a bottleneck in one section of the Country, that 
it could help commerce throughout the Country at the national 
level?
    Mr. Shane. Absolutely. There are certainly corridors and 
bottlenecks that have a huge national impact.
    Mr. Mica. My second question, I just want to follow up on 
Congressman Pascrell's remarks about in order to take care of 
congestion, it is going to cost money. But, actually, a study 
that was done in the State of Maine--because part of the 
interstate system has 100,000 pounds, the other part is 80,000 
pounds--actually, when they increased the weight limit on the 
southern portion in the State of Maine, it actually saved money 
for highway and bridge repair, and that is a recent report. And 
that is why I think it is very important, when you look at 
congestion issues, that you also look at the weight limit 
issue, which will not actually cost money in all cases, but 
actually could save money, number one.
    Number two, sticking with the weight limit issue, has the 
Department done a weight limit study on the impact to the State 
of Maine? And if so, what was the outcome of that study at the 
Federal level?
    Mr. Shane. An impact on the State of Maine of?
    Mr. Mica. Yes, on the State of Maine. Have you looked at 
the whole weight limit issue and what effects it has on the 
State of Maine as far as congestion, as far as cost, as far as 
safety?
    Mr. Shane. I don't know the answer to that question, 
Congressman, I may have to supply it for the record, unless one 
of my colleagues happens to know. I don't believe we have, 
Congressman, but I will verify that.
    Mr. Mica. My last question, Mr. Chairman, is also in the 
State of Maine, in the Lewiston-Auburn area, we are working 
with the private sector to look at congestion problems, and 
they actually were talking about improvements in the Lewiston-
Auburn area that actually can ease the congestion in the 
Chicago area, Illinois area. Is that conceivably possible that 
that could happen?
    Mr. Shane. We have been looking at a variety of options for 
Chicago and even stationed an office there in an effort to help 
with the throughput on Chicago, because Chicago, like border 
crossings that you are familiar with, has a disproportionate 
impact on the national economy, and the effort to address 
congestion there is obviously one of the top items on our 
agenda.
    Mr. Mica. But are you looking at other ways to ease the 
burden in Chicago's congested area by looking at what can be 
done in Maine, for instance, that could actually ease that type 
of burden? And if you haven't been looking in that area, is 
that something the Department is willing to do?
    Mr. Shane. The Department, yes, is willing to examine any 
option that is likely to enhance the efficient flow of freight 
through the system; it is important to the economy, being what 
it is. Yes, Congressman.
    Mr. Mica. Thank you very much.
    I yield back, Mr. Chairman.
    Mr. Petri. Thank you, Mr. Mica.
    Mr. Mica. Thank you, Mr. Shane, Mr. Chairman.
    Let me take this sort of progressively. One of the problems 
we have is--first of all, everybody said we are drowning in 
congestion, we need more infrastructure and we are going to 
have to have more infrastructure.
    One of the basic problems I found is our whole setup for 
planning at the very core of expanding some of the 
infrastructure seems somewhat outdated. The structure of some 
of the metropolitan planning organizations and our requirements 
there don't mesh with, basically, reality. Today we have 
jurisdictions that you can no longer tell where they begin and 
end. Yet, you have a planning policy that sometimes doesn't 
match those jurisdictions.
    Do you have any recommendations in the planning process 
itself to change, to deal with, again, what we see out there in 
these areas? You put up on the chart that just sort of blended 
together, but the planning process hasn't kept up with that.
    Mr. Shane. My impression, Congressman Mica, is that there 
is a variety of quality, if you like, out there among our 
metropolitan planning organizations. Some actually have the 
jurisdiction that you would hope; others,----
    Mr. Mica. Do not
    Mr. Shane.--as you suggest, do not. And the Department, of 
course, has a whole host of tools that we make available in an 
effort to enhance the effectiveness of the planning process. We 
are talking about freight this morning, and I know the 
Administration proposed, as part of what the Administration 
included in SAFETEA in its bill, was the suggestion that every 
one of the departments of transportation at the State level 
include a freight coordinator, somebody that would work with 
MPO specifically to keep freight very high on the agenda. The 
old saw is, of course, freight doesn't vote and, therefore, 
when people are trying to solve congestion problems, they don't 
pay enough attention to goods movement. We didn't make the cut 
with that proposal, but I think there are other ways we can 
enhance the visibility of freight within the planning process, 
and we are trying to do that.
    Mr. Mica. Well, the next part would be actually permitting 
and moving projects forward. I was involved in one interchange 
on the interstate in Florida which I started when I was a 
staffer with Senator Hawkins in the early 1980's. I didn't get 
it done, actually, until I was in Congress, and I have been 
here 14 years. It was at least seven years into my term, so it 
took 20 years. I see so much redundancy and time. I know we 
have put some provisions into our new SAFETEA-LU bill on that. 
Are there enough tools there to move this process forward, or 
should we come back and look at that? Because we are going to 
have to build some of these.
    Mr. Shane. I agree. The President issued an executive order 
a few years ago creating a process to focus on precisely those 
kinds of administrative bottlenecks. I guess it is fair to say 
the President likes administrative gridlock even less than he 
likes physical gridlock on our roads.
    So we have had a process chaired by Secretary Mineta where 
we identify key projects that have been stuck, where we haven't 
been able to get the Federal approvals from the variety of 
agencies that have to give those approvals, and give them 
deadlines and force decision-making. I mean, the decision may 
be no, but we need to know that in order to move to plan B, and 
that is what hasn't been happening.
    I am proud to say that that process has actually delivered 
a lot more efficiency in the process than we have seen before.
    Mr. Mica. Another question deals with you said we need some 
variable tools and just approaches maybe even with pricing. 
What projects have been approved? Are there any you can cite as 
examples that we are looking at that may or may not be 
successful?
    Mr. Shane. Probably the most exciting experiment took place 
in California with a State road called SR-91, which has 
variable tolling and which gets people home. This is in 
Southern California.
    Mr. Mica. I think I went on that, but I heard that that was 
a mixed result.
    Mr. Shane. I have heard that it is not a mixed result, that 
the people that are willing to pay for a little bit of speed 
are very happy with it. And, of course, by getting them off the 
road that is not tolled, they end up even benefitting those 
that are not paying tolls. So I can't say that I have been 
there personally, and I haven't looked at it personally, but I 
have been hearing some very positive reports about it. 
Obviously, it is one example and we will be looking at a 
variety of others. There have been other tests which have been 
interesting as well.
    Mr. Mica. Thank you.
    Mr. Petri. Mr. Higgins. No questions? Let us see. Mr. 
Bishop? Well, Mr. Matheson. No? No one else? Oh, Mr. DeFazio.
    Mr. DeFazio. Mr. Shane, in responding to Mr. Pascrell, you 
talked about the barriers to flexibility for the States. Now, I 
would kind of like you to be explicit there. I am puzzled as to 
what you are talking about, since, as far as I can tell, 
particularly my State, they are more innovative than the 
Federal Government and they have plenty of flexibility; they do 
bonding, which the White House didn't want to do, and other 
things. So what are we talking about here?
    Mr. Shane. The most conspicuous example I can think of 
Congressman DeFazio, is the prohibition against the tolling of 
an interstate highway that already exists.
    Mr. DeFazio. Oh, so we should allow people to take 
taxpayers who have paid for a highway and then charge them 
tolls to use the highway that the taxpayers paid for?
    Mr. Shane. Well----
    Mr. DeFazio. That would be a step forward?
    Mr. Shane. I am not sure who the ``we'' is in the sentence. 
The idea is to allow people to decide what they would like to 
tax themselves for. I am just saying that the Federal 
Government is now putting up barriers to flexibility----
    Mr. DeFazio. OK, but is there another barrier? Since I 
happen to disagree with that as a barrier, do you have any 
other barriers? I just would like to hear about them.
    Mr. Shane. I can supply for the record----
    Mr. DeFazio. OK, so the one thing we are talking about is 
the Bush Administration wants to allow States----
    Mr. Shane. To decide.
    Mr. DeFazio.--to impose tolls on the Federal interstate 
system that was paid for by taxpayers. OK, so that is your big 
step forward. That is great. I am sure the public will be 
thrilled with that. I guess, then, is that going to--we 
mandated a commission in SAFETEA-LU, and I understand Secretary 
Mineta is going to convene the commission later, and hopefully 
we will get some things other than this idea, which was 
rejected by the Congress, to allow tolling on existing 
interstate capacity from that commission. Can you give us any 
insight into the schedule or what the commission is going to 
look at?
    Mr. Shane. The first kickoff meeting, I believe, is on the 
24th of this month, and I imagine they will establish a 
schedule once they are all assembled for that first meeting.
    Mr. DeFazio. OK. Well, then that was helpful.
    Mr. Shane. Congressman, Congress actually did allow some 
tolling of existing Interstates in a pilot program, as you 
know.
    Mr. DeFazio. Right, in a very limited way, and that was 
opposed by many of us.
    It seems to me what we are talking about here seems to be a 
constant refrain from this Administration which would be a step 
back from the idea of an integrated Federal transportation 
system. I mean, Representative Duncan talked about the problems 
of Knoxville. If we are just going to say to the States, we are 
going to give you tools to deal with your problems, but we are 
strapped for resources here at the Federal level and we just 
really can't afford the 1950's version of an integrated, 
efficient Federal highway system I think that would be a 
tremendous step backward, and I am concerned that that does 
seem to be sort of implied in a lot of what you are talking 
about here.
    I want to be assured that the Federal Government is going 
to continue to look at an integrated system that we are going 
to continue to try and invest, partner with States, whether or 
not the States partner with the private sector, to resolve 
bottleneck problems. For instance, this Congress rather 
generously chipped in to help Oregon in SAFETEA-LU with its 
cracked bridge problem, which isn't just an Oregon problem, it 
is Interstate 5. It is the third busiest truck route in 
America; it carries commerce from Canada, Mexico, and 
California, the fifth largest economy in the world. It serves 
the entire West Coast and is a gateway for things moving east. 
I think there was some recognition by the Congress that the 
problems of Oregon are not just Oregon's problems, they are 
national problems, and I think what Representative Duncan and 
others are saying are many of these key choke points are 
national problems. I hope there is still recognition of that.
    Mr. Shane. There is more recognition today, Congressman 
DeFazio, than we have ever had in the past at the Department of 
Transportation and within the Administration, and I think that 
is what the importance of this hearing is. If there is one 
point I would like members of the Subcommittee to take away 
from my testimony, it is that the Department of Transportation 
is more focused now on the importance of integrating our 
solutions and addressing these congestion issues effectively 
than ever in the past. We have a much better sense of what the 
economic consequences of failing to address those problems is 
and it is a national priority, and that is why we are so 
enthusiastic about the series of hearings.
    Mr. DeFazio. OK, I am pleased to hear that.
    One other quick question, Mr. Chairman.
    Will there be any cognizance of what we would call least-
cost planning, looking at least-cost alternatives by the 
commission? That is, you know, we can focus here narrowly on 
freight, trucks; we can focus in the Rail Committee narrowly on 
Class I railroads and their capacity problems. But the bottom 
line is the solution is some combination of those things, it is 
not one or the other. And I am hoping that we will be looking 
at both fuel efficiency, which would be what is more efficient 
in the movement of freight, and least-cost alternatives, which 
cause to break down some of these artificial barriers we have 
set up between funding for our highway system and funding or 
working and partnering with the rail system.
    Mr. Shane. That is a superb suggestion and I think we are 
in the same boat in terms of what we hope the Commission will 
do. But I can't do anything more than hope, along with you, 
that it will address all of these things. Secretary Mineta will 
have more of an opportunity, obviously, to suggest an agenda in 
his role as chair, and we will try to make sure that nothing is 
left unexamined.
    Mr. DeFazio. OK. Thank you.
    Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Let us see, Mr. Hayes, any questions? Mr. Simmons.
    Mr. Simmons. Thank you, Mr. Chairman.
    Thank you, Mr. Shane. One of the other witnesses that will 
be in the second panel, Mr. Larkin, has written an interesting 
piece called ``The World is Not Flat for the Transports,'' and 
on page 4 he talks about railroads and says railroads are not 
the relief valve. He talks about how truckers and the railroads 
are cooperating, which is laudable. He talks about how the 
railroads have turned the corner and are more involved in 
shipping lighter density, higher value manufactured goods, and 
so on and so forth.
    I come from New England. We don't have a lot of space to 
build a lot of new road capacity. We do have freight rail 
delivery. We think it works; it keeps the trucks off the 
highway. You go up to I-95, 91, 395 at times, 84 at times, the 
traffic is creeping along at 30 to 35 miles an hour. On 
weekends I-95 is 20 miles an hour for the better part of the 
day. You know, it is hard to create new lanes when you are 
going through densely populated historic towns that have been 
around for 300 years; there is just not a lot of space there.
    What significant efforts are you making to try to 
incorporate long-haul freight and new systems of using long-
haul freight with trucks to alleviate some of these problems? 
And what effort is the Department of Transportation making to 
assist the railroads in their capital needs so that they can 
incorporate some of these new technologies?
    Mr. Shane. The Department has been working--and you will 
hear much more about this from the members of the next panel--
on a freight policy framework for the Nation. It is not a 
Federal freight policy that we are looking for; we are looking 
for a national freight policy, because governments at all 
levels will have to necessarily participate in that, as well as 
the private sector, and providers of transportation as well. 
And I think it is out of that framework, which is a very 
detailed framework with specific assignments that we are going 
to see some solutions emerge. I don't have bright ideas to 
propose this minute to some of the questions that you were just 
asking.
    In terms of rail investment, the railroads, for the most 
part, are private sector. All of our freight railroads are 
private sector companies and they have been ramping up their 
capital expenditures and capital investment rather dramatically 
in very recent years, after, I think, a long period when even 
they would admit that there probably was insufficient 
investment. That is one promising development. At the Federal 
level, there is a program called the RRIF program. It is a loan 
guarantee program available to railroads. And I know that the 
railroads themselves are seeking some legislative help in 
finding some other resources. But, by and large, for freight 
rail, we do not have a large infrastructure finance program 
along the lines that we have for highways or even for airport 
construction.
    Mr. Simmons. Given the current situation and the 
projections for the future, is that no something that perhaps 
should be changed as a matter of policy?
    Mr. Shane. The Administration has looked at it. At this 
point in time, I don't think the Administration has a 
recommendation in that regard. I think there is still the 
expectation that the railroads will find, in what has been a 
very productive revenue environment over the last few years, 
the capital, without having to tap the Federal Treasury to 
ensure that the capacity is expanded and keeping up with 
demand. But time will tell as to whether that assumption is 
correct.
    Mr. Simmons. Well, I just offer, Mr. Chairman, that we make 
substantial investments in highway transportation. We make 
substantial investments in air transportation. Lord knows on 
passenger rail we are sinking a billion dollars a year into 
entities like Amtrak, and it seems to me, if the private rail 
system needs capital for investment to upgrade and facilitate 
its cooperative efforts with the trucking industry, that that 
should be a point of interest for us.
    And I yield back.
    Mr. Petri. Thank you.
    Other questions on this side? Mr. Taylor?
    Mr. Taylor. Thank you, Mr. Chairman.
    I would like to follow up on Congressman Simmons' excellent 
line of questioning. We have a similar situation with a short 
rail line in South Mississippi, owned by someone from out of 
State and who is now looking at in the neighborhood of $60 
million to repair, in some instances, 100 year old bridges for 
a rail line that, in all honesty, serves about four companies 
at a fairly remote part of Mississippi, but a part of 
Mississippi, and it is the life and death of those four 
companies.
    So to follow up on his line of thinking, given the price of 
fuel, given the cost of building roads, it really would be the 
lost cost alternative to continue to supply these four 
industries with a rail line. And I am curious, what, if 
anything, is the Administration proposing along those lines? I 
think $3.00 a gallon diesel fuel should be changing the way all 
of us look at moving products. So what is the Administration 
proposing along those lines?
    Mr. Shane. Congressman Taylor, my understanding is that 
Congress, I believe it was last year, enacted an investment tax 
credit for the short line railroads, which is a huge assist for 
a railroad like the one you are describing in taking on the 
investment that it is proposing right now. The Administration 
honestly doesn't have any additional tools in the bag to 
suggest; that was a very big win, I think, for the short line 
railroads.
    Mr. Taylor. It doesn't sound like a very big win at all. It 
sounds like nothing has changed from when we had $0.70 a gallon 
diesel fuel. And if we as a Nation and the citizens are 
sincerely concerned about trying to get the price of fuel down, 
one of the only ways we are ever going to do that is to get the 
demand for fuel down. And one of the ways we should be doing 
that is to keep as much heavy freight that is normally on the 
railroads traveling on the rails. And, yet, when something like 
this comes along----
    Look, this guy isn't going to recover $50 million in the 
next 50 years on that line. But he is keeping that heavy 
freight off the roads; he is doing it in a more fuel-efficient 
manner than if he was trucking it. I am not trying to put the 
truckers out of business, but there is a time and a place for 
each of them. So if we, as a Nation, are serious about fuel 
efficiency, if we are serious about minimizing unneeded traffic 
off our highways, this is something we absolutely ought to be 
doing.
    Mr. Shane. Well, I don't think we are disagreeing. I think 
Congress responded--when the short line railroads came seeking 
some help in support of this sort of capital investment, 
Congress responded with an investment tax credit. That is a 
public subsidy to investment in rail infrastructure. That is 
something that the Class I railroads do not have today. In 
fact, I think they are probably seeking that from Congress 
today. So Congress will have opportunities to look at some of 
these proposals and see whether or not there are other things 
that can be done in support of enhancing rail infrastructure. 
Right now the short lines already have some pretty important 
help thanks to what Congress did last year.
    Mr. Taylor. If I may, what kind of help do you provide to 
the States? If the State of Mississippi or any State recognized 
a problem like this and said, yes, this is the most logical way 
to solve this particular problem and that we, as a State, are 
willing to invest in it, what programs, if any, are there for a 
Federal-State partnership to improve that line, or even take 
over that line?
    Mr. Shane. We have a program called TIFIA, which is 
Transportation Infrastructure Finance and Innovation Act. It 
was originally part of TEA-21. And it provides low-cost 
financing, loan guarantees, and in some cases, direct loans 
from the Federal Government that can be used for intermodal 
facilities, for highway facilities, for a variety of 
transportation facilities.
    Mr. Taylor. How about rail line improvement? How about 
replacement of bridges?
    Mr. Shane. Direct rail construction, no, but intermodal 
facilities that benefit railroads, yes.
    Mr. Taylor. OK, how about rail repair? Are you calling 
construction and repair two different things or the same thing?
    Mr. Shane. Well, I am distinguishing, between the rail bed 
itself, the right-of-way, and the intermodal facilities where 
rail intersects with other modes of transportation. We talked 
earlier about the need for an integrated system. That 
integrated system is enhanced by the connectivity we provide at 
these intermodal yards, and the intermodal yards are eligible, 
including rail yards, for TIFIA help, as well as a very new 
tool that is available called private activity bonds. I am 
proud of this one because the Administration, through the 
Treasury Department, decided to extend private activity bond 
financing to intermodal facilities as well for the first time; 
that is to say, tax-exempt bond financing, the proceeds of 
which can be made available to a private sector development 
such as a railroad for purposes of an intermodal facility. And 
these are important steps forward.
    Mr. Taylor. Who on your staff could we sit down and talk 
with? I don't think you have a program that suits our needs, 
but I am willing to try. So who on your staff?
    Mr. Shane. Well, you don't have to go to my staff, you can 
come to me.
    Mr. Taylor. OK.
    Mr. Shane. If you want to talk to any member of the staff, 
we will provide a list of experts for you.
    Mr. Taylor. If you would be kind enough to leave your phone 
number.
    Mr. Shane. Thank you. Will do.
    Mr. Taylor. Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Mrs. Schmidt.
    Mrs. Schmidt. Thank you.
    And thank you, Under Secretary Shane, for your testimony. 
One particular ongoing project in my district, the Eastern 
Corridor Project, would provide much needed capacity to the 
greater Cincinnati area. Projected travel benefits to this 
project will include saving an average of 15,000 hours of 
congested related daily each day, saving 50 million vehicle 
miles annually by providing an east-west travel corridor, and 
reducing vehicle hours traveled by 21,000 hours per day. It is 
a project my community has been working on for almost 15 years.
    The Federal Highway Administration has been very helpful 
and willing to meet my office on a monthly basis, and I 
appreciate that very, very much, but has not been able to 
determine when a record of decision will be requested. I don't 
expect you to answer this right now, but I would very much 
appreciate it if the Department could follow up with me and let 
me know when a record of decision will be requested so we will 
be able to move on to Tier 2 of this project.
    And, Mr. Shane, it is something that the folks that have 
been working on this project ask me continually, and this is a 
great public-private partnership effort and something my 
community really, really wants. So if you could give me that 
answer, I would be greatly appreciative. And I will leave my 
office number with you.
    Mr. Shane. Thank you, Congresswoman Schmidt. Thank you for 
not expecting an answer this morning, and I promise to provide 
an answer for the record and to you directly.
    Mrs. Schmidt. Thank you.
    Mr. Petri. Other questions on this side?
    I just would like to, I guess, conclude your portion of the 
testimony by thanking you for being here and for the prepared 
statement that you submitted. I guess what you are trying to do 
is using more data collection technology to determine where--
scientifically, not just anecdotally, where there are choke 
points and delays in particularly freight movements across the 
Country as an assist in determining how we deal with that.
    This is a very important effort, I think. I am told by 
people in the trucking business in particular that after 20 
years of paying for a lot of improvements in our standard of 
living by greater efficiency in the whole transportation sector 
of our economy, which I think includes inventory costs and 
things, that that downward movement has ended and, in fact, we 
are now seeing an increase in the cost of transportation, not 
just because of fuel but because of other costs in our economy, 
and that bodes very poorly, if that trend continues, for our 
overall international competitiveness, particularly as some of 
our emerging competitors are sure to be more efficient as time 
goes on.
    So we have got a major--we really do need to stand back and 
analyze the problem, and then figure out if we can deal with it 
through technology or through better utilization of additional 
capacity or a combination of things.
    Are you doing any efforts or would it make any sense to try 
to--experts in the field talk about congestion pricing and this 
kind of thing. My trucking people say that they don't use a lot 
of the tolled highways now because they can only make a certain 
amount per shipment, and the total tolls are more than what 
they can make, so they go off toll road, and that causes more 
accidents and various other problems, and that is not really 
counted for currently.
    But they would think it would make sense possibly to have 
some kind of a discount for tolls if they drive, when the roads 
are empty. Maybe it could be balanced with higher tolls during 
the day and lower tolls at night, or some sort of way of 
utilizing the system on a 24-hour basis. We have huge unused 
capacity on a time basis, even though we have congestion on the 
same roads going to and from our ports or during commuting 
hours and so on, when everybody is trying to use those 
resources.
    Is that a fruitful area to work on?
    Mr. Shane. Absolutely, Mr. Chairman. In fact, we have a 
very successful example of precisely that technique being used 
at L.A.-Long Beach with a so-called Pier Pass Program, which is 
through a pricing mechanism designed to do precisely what you 
are suggesting, using all 24 hours of the day de-peaking the 
very congested port area around L.A. and Long Beach.
    And it has brought enormous efficiency, at least for the 
time being, to that very important area. As you heard, this is 
one area that has an impact on the entire Nation. We think 
there are lots of opportunities for doing precisely those kinds 
of experiments in other parts of the country as well.
    Mr. Petri. Thank you.
    Mr. Oberstar?
    Mr. Oberstar. It is always good to have Secretary Shane at 
our Committee. He brings a very thoughtful, constructive 
approach to the policy debate in great issues in 
transportation. And I read with great interest the paper that 
Secretary Shane submitted to the Committee and which he 
summarized. I am glad to see you are making use of the Texas 
Transportation Institute data, which I think is very 
instructive and very frightening, frankly, on the march of 
congestion across America.
    But Mr. Mica raised a question earlier, posed a question 
about what approaches and how to deal with this problem, but I 
think the question missed the point and I think your response 
was not comprehensive. Restore the ``i''--intermodalism in 
transportation.
    Some years ago you and I had a discussion about the effects 
of ISTEA, the Intermodal Surface Transportation Efficiency Act, 
and you observed that at a gathering of assistant secretaries 
at DOT, in the aftermath of passage of that legislation, you 
suddenly realized that no one had been talking, that none of 
the modal administrators had been talking to each other; they 
were all doing their own things. The common term is stovepipes. 
And your observation was that in the brief time remaining under 
that Act before the termination of the first Bush 
Administration, there was considerable discussion, exchange of 
ideas among the modal administrators and the assistant 
secretary policy level people.
    It seems to me that that has diminished in time, the ``i'' 
disappeared from TEA-21. And while structure was retained in 
TEA-21 and some structure retained in TEA-LU legislation, the 
emphasis has shifted away from intermodalism.
    Give me your thoughts today about how thinking 
intermodally, relating modes to each other, rather than looking 
at market-based solutions and finding ways to tax people on top 
of the tax they have already had on the roadways, how can more 
fertile ideas come out of policy discussions internally and 
then with us in the policy formation arena and in the market 
contribute to relieving congestion?
    Mr. Shane. Thank you, Congressman Oberstar, and thank you 
for the kind words. I guess I can't disagree with your 
perception of what seems to be going on if you are just looking 
at the surface of the Department of Transportation. We 
certainly haven't changed the structure, and it is true that 
intermodalism isn't part of the label any longer that we apply 
to our authorizing legislation.
    But I can tell you that within the Department itself 
intermodalism is embedded now in a way we haven't seen before. 
And this is impressionistic, so I will be probably hard-pressed 
to give you a lot of concrete examples, but the administrators 
do talk to each other.
    There are councils within the Department in which the 
administrators all participate. Several administrators from 
different modes participate on the Intelligent Transportation 
Systems Management Council, and in the Research and Development 
Planning Council that we have set up. We have a variety of 
things which probably don't see the light of day because they 
are inside baseball, they are the way we manage the Department 
of Transportation in which we bring the modes together, 
ensuring that we are seeing some cross-fertilization there.
    There is a lot of cross-fertilizing still to be done, to be 
sure, and I don't want to suggest for a moment that we have 
achieved the millennium. Far from it. We still have too much 
stove-piping, I think.
    But we are making important strides. And we have been 
assisted in that regard with the legislation that Congress has 
delivered to us. What I was talking about before, the private 
activity bonds for intermodal facilities, is $15 billion of 
borrowing authority available to the private sector with tax-
exempt bonding for intermodal facilities. That is an important 
one.
    We hoped to have a set-aside for intermodal connectors in 
what ended up being SAFETEA-LU, and we have discussed that 
before. That didn't make the cut with Congress. I am not even 
sure I know why, but the fact is the intermodal connectors are 
still eligible facilities, and we are putting an emphasis on 
trying to get that last mile of our transport infrastructure up 
to par along with the rest of the system.
    Mr. Oberstar. That is helpful and it is encouraging to know 
that there is discussion underway. It is certainly not apparent 
up here, because none of those folks come and talk to me or 
other members that I am aware of. But a good example--and I 
will conclude, Mr. Chairman. I know other members have 
questions.
    But we know the increasing congestion on the roadways. We 
know the increasing congestion on the railways, that the 
Nation's railroads now are finally earning a return on equity, 
they are mobilizing capital to invest in roadbed and rolling 
stock, locomotives and freight cars, but they are behind the 
curve because for so many years they didn't have that capital 
to invest.
    The railroads want the truck sector to take more containers 
and carry more on the road. The trucking sector wants the 
railroads to carry more of their trailers because they don't 
have--it is nearly 7 million trucks. They don't have the 
drivers, they don't have the equipment. And with the just-in-
time delivery system, where their highways become rolling 
warehouses, they are all stretched.
    So that is a preamble to the question does the Federal 
Highway Administration administrator and his staff get together 
with the Federal Railroad administrator and his staff, under 
your aegis or someone else's, or under the secretary's? Does 
that happen? Do they talk about this issue? Do they say is 
there some contribution we can make to this dilemma?
    Mr. Shane. They do talk together and they talk with the 
Secretary, and they do that in the context of a broad 
initiative which the Secretary is organizing to address 
congestion across the Country as a systemic problem.
    Mr. Oberstar. They must be keeping it a big secret.
    Mr. Shane. Well, it won't be a secret for long, Congressman 
Oberstar; it has been in the works. And I don't want to steal 
anybody's thunder, least of all my boss's, so I hope you will 
forgive me if I just leave it there.
    I wouldn't leave out, however, the Maritime Administration. 
One important component of our freight system should be our 
highways on the water, something we call short sea shipping.
    Mr. Oberstar. Short sea shipping, exactly. I was leaning 
toward----
    Mr. Shane. Yes. And we have been looking very closely at 
that. We don't have the luxury today of ignoring any possible 
relief from the congestion that we face, so every one of these 
modes of transportation has got to be integrated better.
    Again, I am not pretending that we have achieved what I 
think your vision and the vision of many members of Congress is 
in terms of intermodal transportation planning in the country. 
I am not trying to say we have done it all by any means. I am 
just saying that we have made progress, and we will continue to 
make progress. It is not a problem that we have forgotten about 
or are ignoring.
    Mr. Oberstar. Well, that is encouraging. And I also want to 
further encourage the Department to look at our inland 
waterways, the system of locks and dams on the Mississippi, 
Ohio, Illinois river system, the St. Lawrence Seaway, which 
does come directly under the Department's authority, are 
underutilized and under capacity, that is, the locks of today 
are--except for lock and dam 26 at Alton, Illinois, are the 
size of the largest locks in the 1930's. They need to be 
upgraded. Every time you break up a tow in order to get through 
those locks, you are taking time, increasing demurrage charges, 
increasing other costs for the most efficient, energy-
efficient, cost-efficient means of moving bulk commodities.
    Mr. Shane. I should really add in that context, Congressman 
Oberstar, that the President created a new committee on the 
marine transportation system, an interagency committee at the 
cabinet level--this is an elevation of the issue from where it 
had been before--to ensure that, for example, the Corps of 
Engineers and the Department of Transportation and the Maritime 
Administration within DOT are all talking together about 
precisely the importance of ensuring that the inland waterway 
system continues to contribute to our transportation system, 
and is utilized far more effectively than it is today. So I 
appreciate your mentioning that.
    Mr. Oberstar. Thank you, Mr. Chairman.
    Thank you, Mr. Shane.
    Mr. Petri. Thank you, sir.
    And that concludes the first panel.
    The second panel consists of Mr. Lance Grenzeback from 
Cambridge Systematics; John Larkin, Managing Director of 
Stifel, Nicolaus and Company; and Dr. Michael Meyer, Professor 
at Georgia Technical University.
    Gentlemen, we welcome you and we thank you for your 
prepared statements, and we look forward to your summaries of 
approximately five minutes. We will begin with Mr. Grenzeback.

  TESTIMONY OF LANCE GRENZEBACK, CAMBRIDGE SYSTEMATICS; JOHN 
LARKIN, MANAGING DIRECTOR, STIFEL, NICOLAUS AND COMPANY, INC.; 
     MICHAEL MEYER, PROFESSOR, GEORGIA TECHNICAL UNIVERSITY

    Mr. Grenzeback. Mr. Chairman, distinguished Committee 
members, my name is Lance Grenzeback. I am Senior Vice 
President with Cambridge Systematics. We provide transportation 
policy, planning, and managing consulting services to Federal, 
State, and local transportation agencies and to public sector 
companies.
    I am very pleased to appear before you to describe the 
findings of our recent work for the Federal Highway 
Administration on identifying and measuring delays to trucks 
caused by highway bottlenecks.
    In the 1970's, transportation planners developed methods to 
map and forecast automobile flows in metropolitan areas, and as 
congestion increased through the 1980's and the 1990's, the 
methods were improved to identify bottlenecks, measure their 
delay cost to drivers, and develop solutions. There was, 
however, no parallel effort to analyze national freight flows 
until 1999, when the Federal Highway launched a program to map 
and forecast those freight flows.
    I was one of a small team of consultants working for the 
Federal Highway on this initiative. This program, called the 
Freight Analysis Framework, produced the first comprehensive 
national maps and forecasts of freight flows. This map is one 
of the early products of that program; shows the density of 
truck freight on the national highway system. And when we 
analyzed this, what we found were increasingly congested 
highway and rail freight systems.
    In 2004 the FHWA asked us if we could identify major truck 
bottlenecks on the highway system and estimate their economic 
cost. We identified 14 types of bottlenecks that caused some 
240 million hours of delay and, by our estimate, caused 
truckers $8 billion in lost time in 2004. Interchange 
bottlenecks accounted for most of the delay, about 124 million 
of those hours, at a cost to truckers of over $4 billion.
    This map shows the location of the major highway 
interchange bottlenecks. You will note that most of the 
bottlenecks are at urban interstate interchanges.
    Next slide chart shows the distribution of truck hours of 
delay for these bottlenecks. Of the 227 highway interchange 
bottlenecks that we identified in our initial scan, some 35 
caused more than a million truck hours of delay each.
    Working last year with the Ohio Department of 
Transportation, we analyzed major highway freight bottlenecks 
in Ohio; we identified specific choke points within the 
bottlenecks, and estimated the type, value, and the origins and 
destinations of the truck freight caught up in them. The 
diagram shows the critical choke points within the interchange 
of I-70, I-71, and State Route 315.
    This interchange is one of three very closely spaced 
bottlenecks along the corridor through Downtown Columbus. At 
bottlenecks like these, we found that precisely tailored 
improvements, such as redesign of a single ramp or 
repositioning a merge lane, coupled with much more aggressive 
and better corridor traffic management, could be quite cost-
effective at reducing delays.
    Now, while a few States, such as Ohio, are moving to 
address the problem of freight bottlenecks, we do not have 
Federal policies and programs in place that recognize 
bottlenecks as a national scale problem that threatens to choke 
our highway freight system. Bottlenecks are a sizable problem 
today, and, as Mr. Shane mentioned, they are going to become a 
bigger problem in the future. Over the next 20 years, economic 
growth and trade will nearly double the tonnage of freight 
moved in the United States, and this means more shipments and 
more trucks traveling more miles.
    When trucks are delayed at highway bottlenecks, shipping 
costs go up, the reliability of deliveries drops across 
industry and retail supply chains, and businesses react by 
holding more inventory and passing the cost on to consumers 
eventually. The net effect is an erosion of the competitive 
position in national and global markets, slower economic 
growth, and fewer jobs.
    We need a national programmatic approach to reducing 
highway bottlenecks. A relatively small number of bottlenecks 
account for a large share of the delays, and they are widely 
scattered across the Nation; however, they sit squarely on the 
crossroads of our transcontinental and regional truck routes. 
The solutions are site-specific and expensive, and few cities 
and States can justify the cost to fixing these bottlenecks 
alone, but the bottlenecks are felt nationwide.
    We built the interstate system in part to gain the benefits 
of interstate trade, and we have been so successful that we 
risk choking on the traffic congestion today and losing the 
benefits of both interstate and global trade. We can now 
identify the critical bottlenecks, and we must implement the 
solutions and reduce delays, particularly the nationally 
significant bottlenecks, to improve freight productivity.
    As you begin your debate about reauthorization, I would 
encourage you to take a close look, as you are, at the 
congestion on our Nation's highways to advance a national 
freight policy that recognizes bottlenecks as impediments to 
freight flows and trade, and focus programs such as the 
Interstate Highway Program, programs of national and regional 
significance on those major highway freight bottlenecks.
    Thank you for the opportunity to appear before you today, 
and I would be happy to answer your questions at the 
appropriate time.
    Mr. Petri. Thank you.
    Mr. Larkin.
    Mr. Larkin. Mr. Chairman, Ranking Member DeFazio, 
distinguished members of the Subcommittee, good morning, and 
thank you for inviting me to address this important topic.
    My name is John Larkin, and I am Managing Director of 
Transportation Research at Stifel, Nicolaus in Baltimore. My 
formal education consists of a B.S. in civil engineering from 
the University of Vermont, an M.S. in civil engineering from 
the University of Texas at Austin. Interestingly, my masters 
thesis was entitled ``Modeling Future Truck Weight Patterns as 
Influenced by Alternative Vehicle Weight Legislation.'' I have 
also earned an MBA from Harvard University.
    My professional career began in 1979, after working in 
transportation consulting at Dan Zimmerman and in strategic 
planning at CSX, I became a member of the Alex Brown 
Transportation Research Team in 1987, where I worked for 11 
years. While at Alex Brown, I was involved in dozens of 
investment banking transactions involving the Nation's largest 
trucking companies. Later, from 1988 to 2001, I served as CEO 
of Railworks Corporation, a publicly traded company that sold 
products and services to the Nation's railroads and public 
transit authorities.
    More recently, I formed the Transportation Research Team at 
what became Stifel, Nicolaus and Company on December 1st of 
last year. At Stifel, Nicolaus, we provide research to 
institutional investors regarding 27 public companies that 
operate within the freight transportation industry.
    It is hoped that my 29 years of relevant experience will 
help you craft the legislation that will shape the future of 
our freight transportation industry in order to promote 
continued economic growth. That future growth is becoming 
progressively more reliant on the trucking industry and, in 
turn, our Nation's highway system for the efficient movement of 
freight throughout our Country.
    The freight transportation system in the United States is 
the backbone of our growing economy. As our rate of consumption 
increases, industries consolidate, and supply chains lengthen, 
the freight transportation industry is being asked to move 
considerably more freight over longer distances.
    However, it is simultaneously constrained by a set of 
scarce resources that have not been able to expand sufficiently 
to satisfy the growth and demand. Without carefully developed 
plans that permit industry capacity to grow in line with demand 
for freight transportation, the current capacity shortage could 
become a significant drag on the rate of domestic economic 
growth.
    Eighty-one percent of the Nation's freight bill is 
generated by the trucking industry, according to our estimates. 
While railroads, pipelines, and barges play major roles in the 
transportation of bulk commodities such as coal, natural gas, 
and grain, most manufactured goods, food, and consumer products 
are moved by truckers over our highway system, the primary 
component of which is the interstate system.
    The interstate system was developed conceptually in the 
1950's and built out throughout the 1960's, 1970, and 1980's. 
As segments of the interstate system near the end of their 30 
year design life, pavement and bridges need to be overhauled. 
The highway bill passed in 2005 is mostly focused on the 
rehabilitation of those 30 year old assets, included relatively 
few provisions for meaningful incremental capacity additions 
that would have positioned our highways to handle the 
anticipated growth and demand. A progressively less productive 
trucking industry has to cope with a highway system that is 
becoming increasingly congested not just in urban area during 
rush hour, but on links between big cities during traditionally 
non-peak periods.
    In addition, truckers are already unable to add capacity 
due to a chronic shortage of drivers. Global Insight, a well 
known consulting firm, has projected that the driver shortage 
will increase six-fold over the next eight years. If this 
scenario plays out, significantly fewer drivers than we would 
require will be attempting to haul more freight over longer 
distances on highways that are becoming increasingly congested.
    Furthermore, recent changes in the Federal Hours of Service 
Rules have imposed additional constraints on driver 
productivity. Highway safety lobbyists are pressuring the 
Federal Motor Carrier Safety Administration to enforce the new 
Hours of Service Rules more rigorously and to further tighten 
down on the current rules.
    Finally, Federal size and weight loss have not changed 
appreciably since 1982 and, as a result, it has been virtually 
impossible to improve the productivity of the relatively few 
good drivers which exist. The ongoing capacity crisis in the 
trucking industry is placing significant constraints on 
trucking companies' ability to meet the growing demands of 
their increasingly global customers. We need a plan to expand 
capacity, ideally through significant infrastructure additions 
and alterations to existing regulations in order to enhance 
truck drivers' productivity.
    The bottom line is that the economic vitality of the United 
States truck industry and the highway industry system are 
inextricably linked. In order to support sustained economic 
growth, we need a healthy trucking industry, and in order to 
support a healthy trucking industry, we need a fluid highway 
system that allows scarce drivers to be as productive as 
possible.
    Again, thank you for inviting me to testify on this 
important topic.
    Mr. Petri. Thank you.
    Mr. Meyer. Dr. Meyer.
    Mr. Meyer. Thank you, Mr. Chairman. My name is Michael 
Meyer. I am a Professor of Civil Engineering and Director of 
the Georgia Transportation Institute at the Georgia Institute 
of Technology. And this year I have the pleasure of serving as 
the Chairman of the Executive Committee of the Transportation 
Research Board and also chaired the TRB Freight Roundtable that 
Secretary Shane mentioned earlier.
    A truly national strategy intending to provide greater 
efficiency in the transportation component of the freight 
supply chain should examine a broad range of bottlenecks and 
opportunities in terms of port capacity; limitations in terms 
of availability access to ports; looking at line haul routes, 
both rail and highways; pricing incentives, disincentives, et 
cetera. Today, however, I am going to talk specifically about 
the road network and road congestion.
    Now, you have seen two speakers already use the Freight 
Analysis Framework and pictures of the national road system in 
terms of the flows. It is a very important and interesting 
perspective. However, I am going to take a slightly different 
one because, as has been suggested already in Knoxville, 
Southern California, Portland, Maine, Portland, Oregon, and 
other metropolitan areas, many of these bottlenecks are 
occurring in metropolitan areas.
    So this first slide shows you some analysis that has been 
done in Atlanta. This is the projected congestion on the 
Atlanta Freeway system in the year 2030. Let me note that red 
is not good. The red color indicates serious congestion. I 
would also note that this is congestion after the metropolitan 
area has spent $54 billion to improve the road system and the 
transportation system.
    The next slide shows Dallas-Fort Worth. The table suggests 
that, in fact, in the year 2025, in Dallas-Fort Worth they are 
expecting 42 percent more roads congested in their road system, 
as well as 120 percent increase in total delay.
    The next slide shows Seattle. Again, red is not good, 
projected congestion in the Seattle network in the year 2030.
    The next slide is Miami, another port city, similar to 
Seattle, which again suggests that future congestion in that 
city's road system is going to be rather severe.
    And then the final slide shows Denver, which there, as 
well, suggests that the number of lane miles of three hours or 
more of severe congestion will increase by 91 percent in the 
year 2025, and the number of lane miles of severe congestion 
will increase by 88 percent.
    I could have shown similar slides for Knoxville and for any 
other urban area in this Country, large and small. This is what 
the metropolitan planning organizations do with regard to their 
modeling, and I think it provides a very interesting 
perspective at a much more site level, at the interchange level 
in some cases, as Lance mentioned, about some of the problems 
and challenges that we are facing.
    Well, what can we do about it? The next slide suggests that 
in fact there are some things that I talk about in a little bit 
more detail in my written testimony. Number one, we do need to 
elevate freight mobility as part of the national transportation 
policy. Secretary Shane already talked about the national 
freight policy framework, again, that came out of the 
roundtable that I chaired.
    It is absolutely essential that that framework be 
implemented. That framework recognizes that enhancing freight 
mobility requires progress on many fronts, ranging from 
institutional regulatory changes to adding capacity to multi-
modal transportation networks where it makes economic sense. 
And I believe that that framework can be used to identify 
strategies and institutional responsibilities for adopting a 
national freight policy.
    Next, the bottlenecks. And Mr. Grenzeback has already 
talked about bottlenecks, freight bottlenecks in particular. 
Congress did, in SAFETEA-LU, provide for authorization of 
targeting intermodal freight transportation initiatives. I 
think that is a project and a program--a program, I should say, 
that in fact is very, very important for the Nation and needs 
to be expanded.
    Third, funding. Encourage public-private partnerships. 
Certainly, that is something that we have seen a great deal 
about in this Country, although as Congressman Pascrell 
mentioned earlier and as I say in my written testimony, it is 
not a panacea for funding the transportation system in this 
Country. Somebody has got to step up to figure out how we are 
going to provide that funding base for roads that in fact the 
private sector will not be interested in because the volumes do 
not justify private investment.
    Implementing system operation strategies. Much of what we 
talk about has to do with geometric design capacity increases. 
We can get more efficiency out of our system through the 
applications of ITS, Intelligent Transportation System 
technologies, scheduling, et cetera. That is something that the 
Federal Government has provided some leadership in and should 
continue.
    Next is focusing on freight mobility corridors. This is 
something that I, along with others, many years ago suggested 
would be an appropriate focus for both planning, as well as 
policy and investment.
    Next, I am convinced looking at transportation--where we 
have been, where we are, and where we are heading--that we are 
going to see more interest in what I call freight-only 
facilities. We just completed a study in Atlanta looking at 
truck-only lanes and saw that, in fact, they would have a 
significant improvement in terms of the productivity of both 
trucks, as well as reducing congestion on the freeway system in 
the region.
    Next, incorporating freight considerations into the 
transportation planning process. This is not obviously a public 
sector issue, it certainly is private sector, but the 
transportation sector has a lot to offer through the planning 
process.
    And then, finally, I can't help but mention research, given 
that is what I do. Congress was kind enough to provide dollars 
in SAFETEA-LU to focus on transportation research. I think more 
needs to be done. That, of all the research initiatives, 
probably has the greatest return for the dollar of the research 
programs authorized by Congress.
    Mr. Chairman, thank you very much. I do provide more 
information in my written testimony. Thank you.
    Mr. Petri. Thank you.
    Mr. DeFazio?
    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Larkin, when you talked about the return on capital for 
the railroads, I think we are all kind of familiar with that, 
but it seems to me that I don't know if the economics are going 
to change because of high fuel costs and whether rail--of 
course, they are having capacity problems and I think they have 
been pretty woefully, for the most part, and Union Pacific, 
incredibly mismanaged.
    What potential do you see there? I see we need to better 
utilize that. I think if we look at a least-cost model, rail 
for movement most of the length of the West Coast is going to 
far outstrip truck if you don't have the disadvantage of 
problems with delivery time and all that. I mean, do you have 
any idea? Should the Federal Government be----
    I have one mill owner, crusty old guy, big picture of 
Ronald Reagan behind him on the wall, but he waxes poetic about 
how well the Government ran the railroads in World War II, and 
maybe we should just nationalize them. I don't know if I would 
quite go as far as this very conservative right-wing Republican 
to nationalize the railroads, but, short of that, what do you 
see as the solution? How are we going to better utilize and 
integrate rail? I think we need to.
    Mr. Larkin. The first point I would make is that I don't 
believe that the railroad managements are necessarily making 
decisions that are in the best interest of an integrated 
national transportation system. What they are trying to do is, 
for the first time in many years, consistently earn a return 
that is in excess of their weighted average cost of capital, 
and the easiest way for them to do that is to actually be very 
selective with respect to what freight they decide to haul and 
to very aggressively put in place price adjustments on the 
freight that they are currently hauling. That has really been 
driving the margin expansion we have seen over the last couple 
of years, primarily in the carload area.
    Interestingly, year-to-date, rail carload volumes are up 
less than one percent year over year, which doesn't exactly 
give you a warm and fuzzy feeling that the railroads are really 
bailing out the transportation capacity problem.
    Intermodal is a bit of a different story here. That rate of 
growth has been about five or six percent this year, some 
railroads are growing a little faster than others, many working 
closely with international steamship lines to move the 
containers inland, which reduces the amount of highway 
congestion that we currently are experiencing.
    And, most interestingly, I think the trucking companies 
have finally come to the conclusion that the railroads are 
really not competitors, but partners, and you are seeing very 
strong relationships developing between the top 10 or 15 
truckload carriers and the railroads to try and take as much of 
the long haul truckload freight off the highway and put it onto 
the highways. I think at some point, here, within the next 
couple of years, though, we are going to run into capacity 
constraints more so in the form of terminal capacities in urban 
areas, where real estate is very expensive and where society in 
general does not like these facilities located close to their 
places of business or close to their residences.
    So I think it is in those intermodal facilities where the 
Federal Government can probably play the most productive role 
in terms of assisting the conversion of market share in long-
haul high-density lanes, like Chicago to Los Angeles, from the 
highway onto the railroads.
    Mr. DeFazio. OK, so you are thinking the most appropriate 
place for the partnerships or the Federal investment is in 
those nodes, essentially, the intermodal.
    Mr. Larkin. I think the intermodal facilities is where you 
can get the most traction and the most bang for your buck, as 
it were. The railroads are doing a pretty good job of 
addressing the bottlenecks in their line haul networks through 
specific investments in passing sightings, double track 
mainline, triple track mainline, things of that nature.
    And perhaps the one area of focus that is not talked about 
much is that they are beginning to try and mimic the operations 
of the Canadian National, which is running a very efficient 
scheduled operation that has probably generated somewhere in 
the order of 50 percent incremental capacity just by running 
the railroad more efficiently.
    Mr. DeFazio. OK.
    Mr. Larkin. So there is really not a whole lot, I don't 
think, that Federal policy can do there; that is a question of 
good management, as you alluded to earlier.
    Mr. DeFazio. Right.
    Mr. Larkin. But when it comes to putting in place the 
facilities that allow for the efficient transference of boxes, 
be they trailers or containers, from the highway to the rail, 
that is where I think you can be helpful.
    Mr. DeFazio. Mr. Meyer, did you have any thoughts on that?
    Mr. Meyer. Well, Congressman, I was nodding my head because 
a couple years ago I had the opportunity to participate in an 
international scanning program by the U.S. Department of 
Transportation, and we went to Europe and we were looking at 
what the Germans and the Dutch were doing in terms of their 
governments, and they were focusing on the intermodal terminals 
in terms of public dollars because that is where they felt they 
could get the most efficiency to influence the market as much 
as possible to get freight onto rail versus trucks. So I 
completely agree with Mr. Larkin that that really is a target 
of opportunity for Federal interest, as well as possible 
investment.
    Mr. DeFazio. OK. Thank you.
    Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Mr. Hayes, any questions?
    [No response.]
    Mr. Petri. I wonder just maybe--well, first of all, thank 
you very much for your testimony. I was taken by your analysis 
of choke points and trying to look at the cost of those choke 
points and figure out some way of encouraging people to deal 
with them. Of course, the costs aren't concentrated right where 
the choke points are, so we have got a public policy challenge 
in terms of marshaling the resources to deal with them and make 
the system more efficient overall.
    And that seemed to me to be kind of an example of a greater 
problem, and that is that a lot of this congestion, you reach a 
point where suddenly things clog up and then efficiency drops 
real fast. So we have tried on the margins to meter traffic in 
and get people on a quasi-voluntary basis to withholding 
entering the system to keep the overall efficiency up, and that 
pays off in terms of greater throughput from the existing 
capacity.
    If you agree that, as a Country, we have got kind of a 
growing problem, and I think you do, in terms of figuring out 
policies that will maintain and increase the efficiency of our 
system rather than seeing things freeze up more and more, do 
you have any--and you made a few suggestions in your testimony, 
I think. But if you were in charge of things, what sort of 
policy process would you put in place, or what could we do to 
work on incentives, besides just throwing money at the problem, 
to, as a Country, figure out how to efficiently--how to 
increase efficiency in this area?
    Clearly, it will pay off and, clearly, if we don't do it, 
we are going to have all kinds of problems and we will wonder 
why we have those problems, and it will be because, 30 years 
before, people did not get us moving in the right direction in 
terms of making the Country more efficient in the movement of 
goods, people, and that kind of thing.
    Do any of you have any comments or things you would like to 
talk about? You know, and I am not saying a lot of specifics, 
but also standing back and figuring out some mechanism or way 
we can do it to move forward. My concept was that we try to 
figure out some advisory body through the National Science 
Foundation or through the Transportation Research Report or 
something that uses the resources of the private sector--
because FedEx and Schneider Trucking, all kinds of people now 
are investing huge amounts and they are logistics companies.
    But we are not a logistics government, we are a highway or 
this or this, and we aren't using that data or that approach 
adequately to figure out how to make our system work and get a 
maximum return for the huge investments that people are making 
in communications technology and all the rest of it.
    Mr. Grenzeback?
    Mr. Grenzeback. Yes. I certainly recognize the problem you 
have described. The approach that we have been using in work in 
Oregon and in Washington State now and on the I-95 Corridor 
Coalition has been to sort of trace the supply chain to begin 
to break down the freight that is flowing through a region and 
begin to look at it sort of industry-by-industry and begin to 
follow the freight as it comes in through the ports and moves 
onto rail and truck, and begin to identify how that flow works 
and look at the bottlenecks that are there. It works very well 
at the metropolitan scale and at the State scale if the State 
DOT is organized to deal with it at that level and can bring in 
the shippers and the carriers who work there.
    Where it begins to break down and I think we have a 
national problem is looking at the freight flow across States, 
where it goes across jurisdictions. And we do not have in place 
really the mechanisms to do that. We are going to begin to do 
that for the I-95 Corridor Coalition, looking at freight flows 
across portions of the East Coast; however, when you come to 
the question of how do I then allocate priorities and monies to 
fix those bottlenecks, we fall between the stools of either the 
Federal system or the State funding, and I think that would be 
something to look very closely at. We have begun to look at 
ideas like a multi-State or regional infrastructure bank in 
which we could pool monies from several States, have them 
matched by the private sector.
    A good example, in looking some years ago at the mid-
Atlantic rail operations in the kind of New Jersey to Virginia 
area, one of the hugest bottlenecks turns out to be in 
Baltimore, Howard Street Tunnel, and how you go through that 
area. It was never designed for the volume of north-south 
traffic that we would like to carry through there, and it can't 
relieve highway traffic unless you get through.
    But that is an immense bottleneck on the rail side. And if 
Maryland has to bear all of the costs of dealing with that, it 
is going to be impossible to fix. So the question is can we 
provide a structure of some sort less than purely Federal but 
is regional that allows us to both pool funds and also 
distribute the benefits back on there.
    So there is an approach to begin to look at the kind of 
freight that flows through those bottlenecks, look at the 
origins and destinations of that, begin to figure out which 
industries and which States and which communities are affected 
by that, and begin to parse that back and say, you know, who 
ought to bear some of the costs, as well as the benefits and 
the risks of that.
    Mr. Larkin. I would suggest that when this commission that 
is going to look at this problem convenes, that they may want 
to consider a hierarchy of modes that is a little bit more 
expanded than we have now. Right now we have single-unit trucks 
running 3,000 miles in fairly high density lanes. That doesn't 
make a lot of sense from an energy efficiency point of view, 
from a labor efficiency point of view, from an infrastructure 
efficiency point of view.
    We ought to be using single-unit trucks, truck trailer 
combinations to deliver freight locally and to operate in 
light-density shorter haul lanes. We should really give a 
serious look at heavier, more of a combination of vehicles to 
run on your medium-density routes, you know, for example, maybe 
from New York City to Buffalo, New York. That is not a good 
intermodal market; the economics don't make sense, but it makes 
a whole lot of sense to run double trailer combinations behind 
a single power unit with a single driver there. We may want to 
expand that system behind a very limited system which exists 
today and is only really operational on a selected number of 
toll roads.
    Beyond that, I think there are other lanes where some 
lighter density intermodal, rail intermodal alternatives may 
make some sense. Quite a number of years ago someone invented 
an intermodal product called the Road Railer, and only one 
company has been able to make that successful, that is Norfolk 
Southern with their Triple Crown operation.
    But as many of the other railroads have shut down their 
intermodal operations and tried to funnel all the traffic 
through the highest density lanes, connecting only the biggest 
cities, many of the smaller cities that used to have intermodal 
service simply don't have it anymore, and all of the burden for 
hauling the freight to and from those cities has fallen on the 
trucking industry. So something that would perhaps incentivize 
the use of a lighter-density intermodal product like Road 
Railer might be worth thinking about.
    And then the double-stack technology that we have already 
is awfully efficient and really does make a lot of sense to try 
and channel as much of the freight into those double-stack 
lanes as possible between the big cities like Dallas and L.A., 
Seattle and Chicago, Chicago and New York, perhaps even Chicago 
and Atlanta. But double-stack is not going to work in 95 
percent of the markets; that is where we need to look at some 
of these other alternatives.
    And then, as a last comment, I think somebody mentioned the 
concept of using the inland waterway system or short sea 
shipping to try and provide a bit of a relief valve. It is 
worth looking at. It is probably not going to solve the problem 
broadly, but it may get us around one of the bottlenecks like 
the Howard Street Tunnel, which I suspect would probably cost 
something on the order of a quarter of a billion dollars to 
rebuild so that you could run double-stacks through it.
    Mr. Meyer. Mr. Chairman, if I might make a couple comments 
as well.
    I think, in response to your question, in some sense the 
answer is it all depends on what you are focusing on. You have 
a spectrum of where you have transportation infrastructure that 
is clearly the responsibility of government today--roads, that 
type of thing. The other end is infrastructure that is clearly 
the responsibility of providers such as railroads. Then you 
have the in-betweens, where you have kind of got public-private 
activities going on.
    In the area where you have public sector responsibility in 
terms of infrastructure, State Highway Departments, that type 
of thing, I think a lot can be done to look at different ways 
of examining what the needs are with regard to freight 
movement. I mentioned to you already the truck-only lane study 
that was done in Georgia. Prior to that study, the State DOT 
really had not thought much about it. Now they have jumped with 
both feet into that concept and we have two corridors now under 
design to do those kinds of truck-only lanes.
    On the private side, in terms of how do you influence or 
try to influence what happens with regard to transportation 
infrastructure there, I think you are really talking about 
taxing and other types of incentives to get that to happen, I 
don't think you are necessarily talking about direct Federal 
investment. And then there are those in-between like the 
intermodal terminals where in fact you do have issues with 
regard to what is the role of the Federal and State government 
along with the private sector.
    Going back to your question about process, I would just 
simply note that, as I said earlier, I do chair this freight 
roundtable, which includes Secretary Shane and members of his 
staff, along with representatives from APL, the president of 
APL, shippers, Dell, Johnson and Johnson. That roundtable was 
supposed to have ended about a year or so ago, and the process, 
the dynamic of having the public and the private people 
together to talk about these issues that actually came up with 
this so-called framework has been so good that people don't 
want to end it.
    And there are a lot of States, such as Minnesota and 
Washington State, Oregon and others, that have actually formed 
freight advisory committees to help advise governments at the 
State and metropolitan levels what needs to happen with regard 
to incorporating freight more into the investment strategies of 
those things.
    I would love to see more of that happen because when I have 
been involved in those types of activities, when I was with the 
State DOT myself or now with the TRB and the freight 
roundtable, a lot of really good things come out the other side 
that really do make a difference. So a process--I don't know if 
it is a TRB group, if it is an advisory committee, or whatever 
the case is, but anything that can be done to encourage that 
fertilization, cross-fertilization at the Federal, State, and 
local levels I think would be well worth it for the Nation.
    Mr. Petri. Well, within companies and within factories, 
they have all these different techniques for improving the flow 
of material and continuous improvement, identifying 
bottlenecks, all of that. And it is not that different in 
concept in terms of sitting back and looking at North America 
or whatever and moving people and goods within our larger 
circumstances.
    Clearly, railroads and feeder things is sort of just a 
basic thing, that is not really too applicable, but when you 
start getting into huge volumes moving through congested areas, 
we are going to have to come up with some better mechanism, 
whether it is public or private or advisory, to help direct the 
larger community to marshal resources and do continuous 
improvement or move things away from those areas, whatever 
seems appropriate, or else we are going to be wasting a lot of 
resources and be very inefficient, and it could costs us long-
term as an entity trying to survive in a bigger world.
    So I just appreciate your contribution here today. I hope 
you are probably working with and advising the commissions that 
we have asked to address some of these issues. We are eager to 
put in whatever time we can do to help contribute to this. It 
is not a silver bullet or a short-term solution; it is trying 
to come up with some overall approach.
    And more resources may be one component, but until we spend 
the time and effort to try to sort of think through how we are 
going to solve problems, coming up with more resources, they 
won't be used as efficiently as they could be. And it is clear 
people will support more resources if they feel they are 
getting a return on them, but we have got to come up with ways 
of giving people that assurance, and your testimony is helping 
us in that regard, so I thank you very much for being here 
today.
    The hearing is adjourned.
    [Whereupon, at 12:00 p.m., the subcommittee was adjourned.]

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