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


 
                              INTERMODALISM

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

                                (109-80)

                                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

                               __________

                             JUNE 15, 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
 Bray, J. Robert, Executive Director, Virginia Port Authority....    36
 Grabauskas, Daniel A., General Manager, Massachusetts Bay 
  Transportation Authority.......................................    22
 Lynch, Tim, Senior Vice President, Federation Relations and 
  Strategic Planning, American Trucking Associations.............    36
 McLaughlin, Peter, Chair of the Hennepin County Regional 
  Railroad Authority, Chair of the Metro Transitways Development 
  Board, Hennepin County, Minnesota..............................    36
 Richmond, Rick, Chief Executive Officer, Alameda Corridor-East 
  Construction Authority.........................................    36
 Roberts, Dave, Senior Vice President, Advanced Technologies 
  Group..........................................................    36
 Scheunemann, Arthur, Senior Vice President for Business 
  Development, NW Container Services, Inc........................    36
 Shane, Hon. Jeffrey, Under Secretary of Transportation for 
  Policy, U.S. Department of Transportation......................     3
 Sherry, Patrick, Professor and Director, National Center for 
  Intermodal Transportation, University of Denver................    22
 Siggerud, Katherine, Director of Physical Infrastructure Issues, 
  U.S. Government Accountability Office..........................    22

          PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Berkley, Hon. Shelley, of Nevada.................................    49
Carnahan, Hon. Riss, of Missouri.................................    54
Cummings, Hon, Elijah, of Maryland...............................    55
Porter, Hon. Jon, of Nevada......................................    90

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

 Bray, J. Robert.................................................    51
 Grabauskas, Daniel A............................................    61
 Lynch, Tim......................................................    67
 McLaughlin, Peter...............................................    78
 Richmond, Rick..................................................    91
 Roberts, Dave...................................................   113
 Scheunemann, Arthur.............................................   121
 Shane, Hon. Jeffrey.............................................   125
 Sherry, Patrick.................................................   132
 Siggerud, Katherine.............................................   167

                       SUBMISSIONS FOR THE RECORD

 Sherry, Patrick, Professor and Director, National Center for 
  Intermodal Transportation, University of Denver:

  IPRO307 Automated Shipping Containers, Interprofessional 
    Projects at the Illinois Institute of Technology, report.....   141
  Mi-Jack Products, Jack Lanigan, Sr., Chairman of the Board, 
    letter, June 28, 2006........................................   156
  The Thruport in 21st Century American Rail Freight 
    Transportation, Dr. Jean-Paul Rodrigue, Department of 
    Economics and Geography, Hofstra University, report..........   158
  ThruPorting Containers and Trailers for Enhanced Transportation 
    Capability, Laurence Rohter, P.E., Adjunct Professor, 
    Illinois Institute of Technology, letter.....................   163
  Mitra, Dr. Amlan Mitra, Ph.D, Associate Professor of Economics, 
    Purdue University, letter, June 26, 2006.....................   165

                         ADDITION TO THE RECORD

Georgia Institute of Technology, School of Civil and Engineering, 
  Randall Guensler, Professor, and Michael O. Rodgers, Professor, 
  Potential Energy and Air Quality Benefits of Freight ThruPorts, 
  statement......................................................   187


                              INTERMODALISM

                              ----------                              


                        Thursday, June 15, 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. This Subcommittee hearing will 
come to order. I would like to welcome all of our members and 
witnesses to today's hearing on Intermodalism.
    The purpose of the hearing is to provide members of the 
Committee with information regarding the concept of 
intermodalism and how intermodalism can be used to solve 
transportation problems, such as congestion and freight delay.
    The term ``intermodalism'' is generally considered to be 
the movement of a person or of freight using multiple 
transportation modes. Intermodal connections link the various 
transportation modes: highway, rail, air, and maritime 
facilities.
    Economists and transportation planners have long agreed 
that productivity and efficiency gains can be achieved by 
improving these intermodal connections.
    Our Nation's transportation system faces ever growing 
demands. About 5 trillion passenger-miles of travel occurred in 
2002. Annual vehicle-miles of travel in the United States rose 
by nearly 30 percent between 1989 and 1999 to almost 2.7 
trillion miles. More importantly, passenger travel and freight 
transportation are expected to continue to increase.
    Current Department of Transportation estimates show that 
between 2000 and 2010, passenger vehicle travel on public roads 
will grow by about 25 percent; and freight movement by truck, 
rail, and water will increase by 43 percent.
    Over the past few decades, Congress has increased the focus 
on intermodal transportation significantly through major 
Federal highway legislation, such as the recently enacted 
SAFETEA-LU, TEA-21 in 1998, and ISTEA in 1991. These laws not 
only allowed, but encouraged, States, regions, and local 
communities to consider intermodal transportation issues as 
part of their transportation planning process.
    The role of States, regions, and local communities is 
significant, as the Department of Transportation has a limited 
role in managing how funds are to be locally allocated. The 
Department's ability to set and enforce strong policies on 
intermodal transportation is also affected by the sources of 
funding involved in the project and requirements set by the 
other entities.
    We have invited three panels of witnesses to discuss their 
views on intermodalism. Our first, really, speaker, not panel, 
will be Mr. Jeffrey Shane, Under Secretary of Transportation 
for Policy, who will discuss the Department of Transportation's 
efforts to utilize intermodalism in transportation policy and 
projects. The second panel consists of witnesses who will 
address how intermodalism can improve passenger transportation. 
And the third panel will discuss how intermodalism is essential 
to freight transportation.
    Now I will yield to Mr. DeFazio for any opening statement 
he would care to make.
    Mr. DeFazio. Thank you, Mr. Chairman. Mr. Chairman, it has 
been a decade and a half since Congress passed the Intermodal 
Surface Transportation Efficiency Act. I participated in that, 
and at the time it was considered to be somewhat visionary, 
particularly for the Federal Government. You know, some States 
were ahead of us in terms of planning and looking at 
intermodalism, but this was a good and a new focus for the 
Federal Government.
    Unfortunately, I don't believe we have fully delivered on 
the promise of ISTEA, nor the mandates in the subsequent TEA 
bills, to move more toward a truly what I would describe as a 
least cost transportation system. That is, we want to look at 
the most efficient system possible which is provided at the 
least cost. Least cost not meaning just cheapest, but meaning 
that which mitigates the most congestion, that which is most 
efficient for the movement of freight. Yes, we want it to be 
cost effective also, but there are other factors that should 
come into this.
    And I am hoping that the new commission that apparently met 
a couple weeks ago, while we were meeting on another subject, 
that was mandated by SAFETEA-LU will look at a future which has 
a real focus on efficient least cost planning, because we have 
created too many artificial barriers, and part of it is the 
fault of Congress. We fund programs separately. You know, the 
Federal Highway Administration gets a pot of funds here and the 
transit folks get a pot of funds here.
    We, in part, are guilty of perpetuating this inefficiency, 
and we need to begin to break down those barriers, particularly 
in light of what I think is going to be a permanent condition 
of extraordinarily expensive fuel costs. Fuel efficiency in 
terms of meeting our goals of moving the American people and 
our commerce need to be incorporated into this least cost 
planning also.
    So I look forward to hearing from the panel today.
    Just one caveat, Mr. Chairman. I do have time to speak on 
the rule on the so-called Iraq resolution, so probably I will 
have to step out for a while to do that, and hopefully we will 
be able to get someone to fill my place, perhaps Mr. Oberstar, 
who asked for this hearing.
    Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Any other opening statements? If not, we will turn things 
over to the Under Secretary of Transportation for Policy, Mr. 
Jeffrey Shane.

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

    Mr. Shane. Thank you, Mr. Chairman. Thank you for holding 
this hearing. It is an opportunity for us to engage in dialog 
about some fundamental issues at the Department of 
Transportation relating to intermodal transportation.
    Mr. Chairman, I have a prepared statement that I would ask 
be admitted to the record, and what I would like to do is 
perhaps sum it up in the time that I have this morning.
    And I thought I would break my opening remarks into two 
major sections, the first being just a brief history of the 
Office of Intermodalism, and then to tell you what the Office 
of Intermodalism is doing.
    I also want to make clear that speaking about the Office of 
Intermodalism is talking about only one narrow aspect of 
intermodalism at the Department of Transportation. We will get 
into this in some greater detail, I hope, during the give and 
take, but the principal point that I want to make this morning 
is that quite apart from the specific activities of the Office 
of Intermodalism, which I am certainly prepared to discuss, 
intermodal thinking and intermodalism has embedded itself in 
the fabric and in the culture of the Department of 
Transportation over the years.
    Mr. DeFazio, I go back to the Department of Transportation 
Act of 1966--not just a decade, it has been almost 40 years. 
Well, it is 40 years, 1966, when the Congress, in creating the 
Department of Transportation, insisted, in a provision that is 
still enshrined in Title 49, that the Department ensure the 
coordinated and effective administration of the transportation 
programs of the United States Government. That is the first 
section of the Department of Transportation Act as it is 
codified, and that continues to be the lynchpin of what the 
Department of Transportation is all about.
    ISTEA, the Intermodal Surface Transportation Efficiency Act 
of 1996, was a visionary piece of legislation. Secretary 
Mineta, whom I am delighted to represent this morning, had a 
lot to do with that, as did many members of the Congress today; 
and it did put a brand new focus on the importance of 
intermodal thinking at the Department of Transportation, a 
recognition that the vision enshrined in the Department of 
Transportation Act itself, back in 1966, had not been 
sufficiently realized by successive administrations over time. 
So the Office of Intermodalism was created in the Office of the 
Secretary of Transportation by statute.
    I worked for the Department of Transportation in that 
administration and recall that we decided that the Director of 
the Office of Intermodalism would be double-hatted. Secretary 
Skinner, I believe it was, asked that the Associate Deputy 
Secretary of Transportation be double-hatted as the Director of 
the Office of Intermodalism in response to the statutory 
mandate contained in ISTEA.
    Before I get to 2002, I will say that the staff of the 
Office of Intermodalism, as it was comprised at that time, was 
drawn from different modal administrations within the 
Department of Transportation, thereby attempting to give real 
meaning to the concept of the office as it was spelled out in 
the Act, and some important strides forward, I think, were made 
over the years by the very fact of that office.
    The Marine Transportation Security Act of 2002 created the 
office that I now hold, an office of the Under Secretary of 
Transportation for Policy. That legislation abolished the 
Associate Deputy Secretary, and so abolished the office that 
had been double-hatted as the Director of the Office of 
Intermodalism. At that point it fell to us to decide what would 
happen with the office, and we decided to put it in the Office 
of Transportation Policy.
    When Congress enacted the Norman Y. Mineta Research and 
Special Programs Improvement Act, that legislation transferred 
the Office of Intermodalism to the brand new Research and 
Innovative Technology Administration. The creation of RITA, as 
we call it, including the Office of Intermodalism, is one of 
the most profound changes in the structure of the Department of 
Transportation that any of us have seen since the very 
inception of the Department. It helps to enshrine not only the 
Office of Intermodalism, but an intermodal approach to research 
and technology, and to the collection and analysis of 
transportation statistics in a far more intermodal way than we 
have ever seen before. So the Office of Intermodalism is in the 
right home today, where it is having a profound effect on the 
way we do business at DOT.
    We do everything differently as a result of the Office of 
Intermodalism and as a result of intermodalism being targeted 
by the Congress in the way it has been targeted. The way we do 
authorization proposals to the Congress is intermodal. We bring 
together different elements of the Department under the aegis 
of our Policy Office, under the aegis of the Office of 
Intermodalism to ensure that the proposals that we make to 
Congress reflect intermodal thinking in a way that has never 
been seen before. You saw that in the Administration's proposal 
on SAFETEA, you saw it in the Administration's proposal on 
aviation reauthorization a few years ago.
    We have done a freight policy framework that is intermodal 
in its very inception. The Secretary has launched a 
transformational initiative, an initiative to reduce congestion 
on America's transportation network, which is inherently 
intermodal and reflects the importance of the Office of 
Intermodalism and its impact on the way the Department thinks.
    There are any number of other activities that I could list 
at some length, but I am already out of time, and so perhaps 
the best thing for me to do would be to be quiet at this point 
and to look forward to any questions that the Subcommittee may 
have. Thank you very much for the opportunity to be here.
    Mr. Petri. Thank you.
    Mr. DeFazio, any questions?
    Mr. DeFazio. Thank you, Mr. Chairman.
    Well, I don't know, Mr. Shane, if you had a chance to 
review some of the testimony we will get today, and hopefully 
either you or--I know you are very busy--perhaps some of your 
staff can stay and listen to the subsequent panels. Because I 
think what you will hear from them is that it isn't working out 
there in America, that people who have intermodal ideas still 
have trouble dealing with conflicting bureaucracies within DOT, 
and sometimes outside of DOT. I think their testimony points to 
the need for, you know, sort of a real focus and strong 
leadership at the top, and I think what you are telling us is 
that demoting the Office of Intermodalism to this new 
bureaucracy of RITA and out of the Secretary's office is going 
to enhance its clout and authority.
    I don't know. It sounds to me kind of like when we put FEMA 
in the Department of Homeland Security bureaucracy, and, you 
know, they couldn't get their calls returned and a disaster 
resulted. So just tell me a little bit more about how putting 
the Office of Intermodalism in RITA--I don't know, I mean, I 
have never worked in the bureaucracy, but it just seems to me 
if something is in the Secretary's office, that is pretty much 
near the top; they get access to the Secretary just like FEMA 
was cabinet level and they reported to the President.
    Then, suddenly, FEMA is subsumed into a bureaucracy 
reporting to the head of the bureaucracy, who then 
theoretically communicates with the President. It seems to me 
we have done the same thing with the Office of Intermodalism. 
There they were, able to communicate with the Secretary and 
speak with the voice of the Secretary; now they are over here 
in this new bureaucracy, RITA, and they will, you know, 
communicate to whoever is the head of RITA, who will 
communicate to some junior deputy assistant secretary, who 
might communicate to the Transportation Secretary or not.
    So how is this enhancement of its role and how are we going 
to begin to meaningfully break down these bureaucratic walls to 
move toward a coordinated least-cost effective system of 
intermodal transportation?
    Mr. Shane. Well, thanks very much for the question. First 
of all, we are still a stovepiped agency, and there is no 
getting away from that, and we do not have the wherewithal at 
the Department of Transportation to change that; those are 
statutory organizations and it was ever thus. I expect that 
they will be around for a long time to come.
    Mr. DeFazio. Well, we would welcome suggestions on how to 
break down some of the statutory barriers.
    Mr. Shane. Yes. Well, that is an interesting thought, and 
we may bring you some of those. But each of the modal 
administrations does have its champions, both in the Congress 
and in the industry, and not to digress, but there are things 
that still are mode-specific that we must do. There is no 
question about that. The Federal Motor Carrier Safety 
Administration is about the safety of motor carriers, and while 
there may be some cross-fertilization, we do need specialists 
for specific modes of transportation, even though those 
specific modes are operating in an interconnected network and 
hopefully a more and more interconnected network.
    But to get to your question, I mean, it is reasonable to 
think that it is a ``demotion'' just by looking at the chart. 
What is important to understand, I think, is that when the 
Secretary decided that he would propose to the Congress the 
creation of this new research and innovative technology 
administration, it was his intention that he not merely create 
another modal administration, as we call them. It is not a 
modal administration, it is a very special intermodal 
administration which is in a very significant way--and more 
than any other of the operating administrations within the 
Department--a direct adjunct to the Office of the Secretary. I 
like to think of it as the Secretary's own operating 
administration.
    I am in charge of the policy administration within the 
Office of the Secretary, and I see RITA as being a tool that we 
use in the Policy Office in order to enhance our ability to 
address these issues in a far more coherent and comprehensive 
and intermodal way. That is why we don't treat it as a 
demotion.
    I think because--it is early days, Congressman DeFazio, to 
be sure, and RITA is still something of an embryonic 
organization. So I am not suggesting we have achieved this 
vision by any means. But the vision seems to me one that 
actually will work. It will mainstream the intermodal thinking 
of the Department in a way we have not seen before. It can't be 
predicated on anything but an intermodal approach to 
information-gathering, the analysis of actual statistics, and 
certainly an intermodal approach to technology within the 
Department. That is what RITA was created to do.
    So when I say that the Office of Intermodalism has found 
the right home, that is what I am talking about. I am talking 
about RITA being a very special animal within the complex of 
agencies that comprise the Department of Transportation.
    Mr. DeFazio. Right. And as I understand that, since its 
primary focus is research, and the way you just described it is 
that I guess what you are saying is they will propose new ways 
that someone who has the authority to act--that is, either you 
or the Secretary--will be better informed as to how you might 
coordinate across or punch holes through some of these 
stovepipes so that there is a little cross ventilation or 
something like that. I am still a bit puzzled, but perhaps in 
further questions from the Chairman and others--because my time 
has expired--we will understand.
    But I also would say I am sincerely interested. And I don't 
want to speak for the Chairman, but I think others of this 
Committee would be interested in where you see statutory 
barriers that are unnecessarily inhibiting a movement toward a 
more coordinated and more efficient intermodal system would be 
welcome. Thank you.
    Mr. Petri. Mr. Coble.
    Mr. Coble. Thank you, Mr. Chairman.
    Mr. Shane, what are the source or sources of the funds to 
facilitate intermodal transportation? Where are those monies 
coming from?
    Mr. Shane. They come from the various appropriations act 
that respond to authorization legislation coming out of this 
Committee, for the most part, and the other committees of 
jurisdiction. We have some funds that are made available--not 
very many--for specific intermodal projects, but those, by and 
large, tend to be earmarked projects specific intermodal 
facilities, as opposed to being able to fund a lot of 
intermodal activities from some of the organic programs.
    There is, predictably,--and this comes back to what 
Congressman DeFazio was saying--real jealousy about the use of 
highway trust fund monies for other than highways; real 
jealousy about the use of airport and airways trust fund monies 
for other than airports. When somebody builds a ramp off of a 
highway that is essentially to serve an airport, we get into a 
big controversy over whether that should be funded from the 
highway trust fund or from the aviation trust fund. And so 
those are struggles that continue, and perhaps it is in those 
areas that legislation is perhaps most needed.
    For the most part, specific intermodal facilities that are 
constructed pursuant to Federal grants are specifically 
earmarked in the appropriations process, Congressman.
    Mr. Coble. What, Mr. Shane, do you think are the 
impediments to improving intermodal freight transportation?
    Mr. Shane. The intermodal freight system is an interesting 
collection of both private sector and some publicly funded 
entities. The ports, for the most part, do not have Federal 
money and infrastructure. We have the Corps of Engineers 
working on the water side to dredge and ensure that we have the 
appropriate depth of the channels, but on the land side, by and 
large, the ports are not federally supported.
    The Administration has considered a number of ideas for 
priming the pump with some Federal money but, for the most 
part, particularly in the current budgetary environment, it 
hasn't been possible to come up with any bright ideas about how 
to create a new infrastructure program for ports. Ports 
generally have pretty good access to capital through the 
bonding process at the municipal level, and that is tax-exempt 
funding, for the most part.
    Similarly, the railroads do not have very much Federal 
contribution at this point; they are all private companies and 
they invest private capital in the hope of making a return on 
that capital.
    The impediments, I guess, are to see whether or not there 
are more robust legislative proposals that would facilitate the 
funding of intermodal facilities more readily, particularly 
through a discretionary funding process, as opposed to looking 
at specific intermodal facilities. This is the thing that I 
find, frankly, more frustrating than anything else in my effort 
to advise the Secretary on what we should be doing.
    We have, in this current fiscal year, zero intermodal--zero 
discretionary funding to think about intermodal facilities in 
the whole complex of offices that comprise our policy shop in 
the Office of the Secretary of Transportation. And if I were to 
make one recommendation, it would be to ensure that as the 
appropriations process goes forward, I am not asking for more 
money than the President has requested, to be sure.
    But I am saying if some of that money can be left to the 
discretion of the Department in order to respond to what it is 
that people at the State and local level are telling us they 
need, we might be in a much better position to either find ways 
of funding that at the Federal level or contributing matching 
funds at the Federal level, or, failing that, coming back to 
the Congress with some suggestions for new legislation that 
would make that funding more readily available.
    Mr. Coble. I got you. Thank you, Mr. Shane.
    I yield back, Mr. Chairman.
    Mr. Petri. Thank you.
    Let's see, Ms. Berkley or Mr. Taylor, would you like to ask 
any questions? Why don't you begin?
    Ms. Berkley. OK.
    I am sorry that I missed your presentation; I was otherwise 
occupied. But I am a great advocate of intermodality. I 
represent Las Vegas, which is the fastest growing community in 
the United States, and we are moving forward on all sorts of 
transportation systems in a community that was supposed to be 
built out for 400,000 people and now has 1.6 million residents 
and 40 million visitors a year.
    So we are working on our monorail, our bus system, 
potential light rail, improving the highway system. So this is 
important to me, and I work very closely with my local people 
on my Regional Transportation Commission, my NDOT, to make sure 
that we have adequate funding.
    Could I ask you to address the level of assistance and 
consultation that the Department makes available to local 
communities that are trying to increase intermodal options? I 
want to make sure that our local officials have as much help as 
possible from the feds. Could you give me some idea of what 
your opinion is and what the Department is doing?
    Mr. Shane. Sure. Thank you for the question. The 
Department, first of all, is trying to use a bully pulpit to 
the greatest possible extent. As I explained in my answer to 
Congressman Coble, there is not a huge pile of money available 
for intermodal facilities as such.
    On the other hand, we work very closely with State 
departments of transportation and with local departments of 
transportation in an effort to ensure that we can help instill 
intermodal thinking, help with the planning process, try to 
make sure that people are taking advantage of current thinking; 
and, by and large, I think that has been a fairly successful 
enterprise.
    Ms. Berkley. What happens if you represent a committee that 
is already thinking and needs resources?
    Mr. Shane. The resources are available, obviously, in 
formula grants under our Federal surface transportation 
programs; airport construction is supported, of course, by the 
Airport and Airways Trust Fund and our AIP Program, the Airport 
Improvement Program, which is run by the FAA within the 
Department of Transportation; and there is an increasing 
effort, as I have said, to try to do the planning of those 
grants, in concert with our local client communities, in a way 
that brings these different projects together in an 
interconnected way.
    Ms. Berkley. I came in at the tail end of your testimony. 
Did I hear you right when you said you thought that the 
Secretary should have a discretionary fund?
    Mr. Shane. By and large, the amount of discretionary funds 
available to the Secretary has been very small to zero in 
various cycles and in this cycle.
    Ms. Berkley. That is small.
    Mr. Shane. My office runs a program called the 
Transportation Research and Development Program, TPR&D. The 
funding for that, which would be available for a lot of what 
you are asking about, is entirely earmarked, there is not a 
dime available for discretionary spending in response to what 
communities want.
    So to the extent that members have identified those needs 
and responded to them through the earmarking process, that is 
fine; I am not complaining about that. I would enjoy some give 
and take, some more give and take than we currently have in 
that process to ensure that if in fact those funds are going to 
be earmarked, at least they are earmarked for things that we 
would all agree are the appropriate activities for the 
Department to be supporting. That is not happening to a 
sufficient extent today, I would say.
    Ms. Berkley. Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Mr. Mica.
    Mr. Mica. Thank you, Mr. Chairman, and thank you for 
calling this hearing in regard to our need to focus on 
intermodalism.
    Mr. Shane, you said you don't have a specific fund or a 
discretionary fund to sort of promote intermodalism, but you do 
have the ability in approving projects and also directing 
funds, even those appropriated to projects, by giving priority 
to projects that are truly intermodal. That is your policy and 
that is what you are doing now, I take it?
    Mr. Shane. Yes.
    Mr. Mica. OK. One of the things that I was asking a 
question, I saw in some testimony from one of the witnesses 
that they referred to Florida, and I guess maybe Massachusetts, 
may have a State comprehensive plan that deals with 
intermodalism. I remember talking to Governor Bush some time 
ago, when they came in asking for more money, and I said show 
me your plans, and they didn't have plans. I think they do now 
have plans.
    But this brings me to my question, which is should that be 
a requirement? Should all States have developed a comprehensive 
intermodal plan that we have sort of on file, that we know what 
the major projects are, the intermodal efforts are? Should that 
be a requirement?
    Mr. Shane. Yes, Congressman Mica. Our major funding 
programs do require continuous comprehensive planning. The 
surface transportation programs, for example, require, as a 
condition for receipt of any funding, that projects that are 
proposed be part of a continuous and comprehensive planning 
process. There has to be an approved plan for an airport before 
AIP funds are made available and----
    Mr. Mica. I know, but the intermodal elements that are so 
important----
    Mr. Shane. That is where the room for improvement can be 
found, I think.
    Mr. Mica. But I hate to ask a yes or no. Should we require 
that every State have a comprehensive intermodal development 
plan?
    Mr. Shane. Absolutely.
    Mr. Mica. OK. I have had some experience with some of the 
projects over the past 14 years; some successes, but some 
difficulties in getting people to either be part of it. I will 
give you a couple of examples. In the northeast corridor we 
brought intermodal the airport, Newark Airport into the 
northeast corridor, but we couldn't get Amtrak to stop. Now, 
since that they have stopped and we have service; it is a great 
success. That is a problem getting even a quasi-governmental, 
Soviet-style run Amtrak to cooperate. That is one problem I 
point out.
    I will give you another example. We are building a small 
intermodal facility in one of my smaller counties, but I 
noticed left out of the element, and this is to get around a 
region or a small area, one of the elements left out was the 
only long distance service we have, and it does make a profit 
and stay in business as profitable, is Greyhound. They move 
people; they actually get paid; they make money. But I notice 
Greyhound wasn't part of that.
    So I have folks who are trying to get around the community, 
around the region, and then long distance, and I saw that 
Greyhound is left out of the equation. Even here, I mean, 
Greyhound is down the street, but Greyhound should be 
interconnected to our rail service and a bus service and any 
other links.
    What do we do for getting the rest of the folks into the 
picture?
    Mr. Shane. Well, all I can say is it would be an eligible 
project if a community wanted a truly interconnected intermodal 
facility of that kind----
    Mr. Mica. I know, but, see, you said if a community. And I 
will tell you the first thing, when I proposed Greyhound come 
into a bus center that we are building, they said we don't want 
those kind of people around the neighborhood. So we do have 
problems in getting communities on board or States on board to 
develop a plan and truly have all of the elements of 
transportation services coming together.
    Mr. Shane. It is difficult. We don't, by and large, like to 
mandate specific solutions for our communities. The need for 
greater interconnectedness and intermodalism is palpable. I 
have seen other examples where airports don't want intercity 
buses on their property because it discourages parking revenues 
and it hurts rental concessions; and that is where a lot of 
revenue to airports comes. So it may well be that some 
additional mandate at the Federal level, as a condition for 
making Federal funds available, would enhance the intermodalism 
that we see at that level.
    Mr. Mica. My time is up, but just one quick. In an 
interesting phenomenon, I don't know if you focused on this, 
but we spent years working on developing an intermodal system 
at the San Francisco Airport, the Bay Area Transit and all 
coming together, and I thought this was an interesting 
phenomenon. I think we put $2.2 billion into that stop, 
intermodal and MIC and all of that, and then because of the 
higher rates--and they have to increase the cost for people 
using that--a lot of the service and discount service went over 
to Oakland, so they had a 30 percent drop.
    But that is just an interesting phenomenon. The cost of 
doing an intermodal, say, a MIC, like we are going to do in 
Miami, drives your cost, but it drives passengers away. Just 
something we have to think about for the future.
    Mr. Petri. Thank you.
    Mr. Mica. I yield back.
    Mr. Petri. Thank you.
    Mr. Oberstar?
    Mr. Oberstar. Would you please go to other members?
    Mr. Petri. Sure.
    Mr. Honda?
    Mr. Honda. Yes. Thank you, Mr. Chairman.
    Two quick questions. It appears that we are moving more 
into the intermodal structure, if you will. I am a school 
teacher, and I know that in instruction we have 
compartmentalized instructions in chemistry, math, social 
science, and it appears that the DOT is pretty much set up that 
way and we are looking at a new concept or a new paradigm. 
Structurally, how is DOT changing in order to address 
intermodalism?
    And then the second question I have is, I haven't seen 
anything as of yet in the written testimony addressing the 
greater need of security and how we address security in the 
context of intermodal movement of goods and services.
    Mr. Shane. Thanks, Congressman Honda.
    The first answer is that the most profound change in the 
structure of the Department of Transportation that we have seen 
since the Department's inception is the creation of the 
Research and Innovative Technology Administration. It is not a 
modal administration the way we think of the other organic 
elements of the Department of Transportation; it is an 
intermodal administration. And it is in many ways, perhaps, for 
the Secretary's purposes the most important of our operating 
administrations because it is a direct adjunct to the Office of 
the Secretary and to the Secretary's policy apparatus.
    I am in charge of the Policy Office in the Office of the 
Secretary of Transportation, and we don't have a huge research 
and technology capability within the Office of the Secretary. 
We need to have more robust coordination, and not just 
coordination, but a driving of research and technology 
throughout the Department in ways that are going to enhance 
intermodalism.
    That is what RITA was created to do. The collection and 
assembly and analysis of statistics has got to be done in a way 
that looks at the transportation system as the network that it 
is and facilitates our policy making and our planning based on 
intermodal considerations. That is what RITA does. The Office 
of Intermodalism is now part of RITA.
    So when I say that the creation of RITA is the most 
profound change to take place in the structure, I am looking at 
its impact on intermodal thinking, and I think while it is 
still essentially an embryonic organization--it has been around 
for about a year--it is beginning to have that cultural impact 
on the Department of Transportation that Secretary Mineta 
envisioned when he proposed the structure to the Congress.
    On the security front, the Office of Intermodalism is 
working on a variety of exercises in concert with the 
Department of Homeland Security. There is a national strategy 
for transportation security that is in the works, and it is our 
Office of Intermodalism that is supporting DHS, representing 
the entire Department of Transportation on that.
    There is a National Infrastructure Protection Plan which 
the Office of Intermodalism is working on. We have a 
Transportation Sector-Specific Plan which DHS and the Homeland 
Security Council have been working on. Again, the Office of 
Intermodalism is front and center in connection with that 
exercise.
    And then, finally, there is a Transportation Security 
Operation Plan. Transportation security, needless to say, has 
been the subject of an awful lot of administration attention, 
and the Office of Intermodalism is the portal for much of that 
work into the Department of Transportation, working together, 
to be sure, with our Office of Intelligence and Security, but 
it is the Office of Intermodalism that is bringing the modal 
and the intermodal themes to that discussion.
    Mr. Honda. Through the Chair, with the various players you 
have in this whole security picture, who drives the plan, who 
executes the plan, who is responsible for the ultimate--who has 
the ultimate responsibility for the implementation of the plan, 
and by when?
    Mr. Shane. The Transportation Security Administration 
within the Department of Homeland Security, of course, has the 
primary jurisdiction and the primary responsibility for 
securing the transportation network, and a lot of progress has 
been made, first in aviation and now looking more at the 
surface modes and the maritime and intermodal systems. I am not 
sure when you say ``by when'' what that question means. There 
is not a specific deadline. The mandate is to ensure the 
maximum security as quickly as possible, and enormous strides 
have been made in the securing of our transportation network by 
the work of the TSA.
    Mr. Honda. Well, I understand that, but when I say by when, 
I suspect you must have a plan with benchmarks out there so 
that you have some way of creating a pace by which you will 
attain some sense of established security process. Perhaps that 
might be a subject for the Subcommittee to address and have 
report back on, since there are so many people playing in this 
field and there are so many people out there in the community 
that expects that security is something that is paramount on 
our my minds, and I am not sure that people understand how many 
players there are in this whole intermodal security system.
    Mr. Shane. If I may, Congressman, perhaps I could take that 
question back and supply an answer for the record based on the 
National Infrastructure Protection Plan and the Transportation 
Sector-Specific Plan. There is a plan, and I will give you a 
more specific answer to the timing question than I have been 
able to do here.
    Mr. Honda. Thank you.
    Thank you, Mr. Chairman.
    Mr. Petri. Thank you.
    Mrs. Kelly, any questions?
    Mrs. Kelly. Thank you, Mr. Chairman.
    Mr. Shane, in the transportation authorization law that 
Congress passed last year, there was an authorization that is 
of particular interest to the people in the district that I 
represent, it is the authorization for the development of a 
rail link at Stewart International Airport in Orange County, 
New York. It would have tremendous benefit to the intermodal 
freight service in the Hudson Valley.
    You may not be aware of the position of Stewart Airport.
    Mr. Shane. I am, Congresswoman.
    Mrs. Kelly. It is the largest BRAC'd out former Air Force 
base in the United States. It has the heaviest heavy-duty 
runway, the longest heavy-duty runway on the eastern seaboard, 
next to Cape Canaveral. It is a landing site, an alternate 
landing site for the Space Shuttle. It has, right there, next 
to the campus, a perfect interstate and throughway cross of 
roads, both north and south and east and west.
    We are looking for the rail link. That rail link has been 
in this authorization for almost a year. The President signed 
the SAFETEA-LU into law, and we are still waiting for direction 
from Washington for the next step. We need to start planning so 
that we can get this rail link in.
    I am hopeful that you are going to proactively collaborate 
with the people that I have brought to the table on this. The 
Port Authority of New York and New Jersey is involved; the 
State Department of Transportation is involved; Metro North is 
involved; the airport's management is involved.
    What is missing is a direction and a discussion with the 
Department of Transportation here in Washington, D.C. on how we 
get going. And I want to know if you can provide today some 
assurance that the DOT is going to make the development of that 
rail link at Stewart a reality. Perhaps you would come or 
someone would come up to the district and meet with all of 
these stakeholders. They are ready to go and they are waiting 
for you.
    You said in your testimony that shippers are indifferent 
about how a product is delivered through a supply chain so long 
as there is reliability and speed. We can provide reliability 
and speed out of Stewart Airport. We need two and a half miles 
of rail, that is all. We need to have someone come. Can someone 
come and sit down with these stakeholders and work this out so 
we can get going? We need a plan.
    Mr. Shane. I commit to you, Congresswoman, that someone 
will come, and maybe that someone will be yours truly. I look 
forward to hearing a lot more about this project. I wasn't 
aware of the specific line item in the authorization, but I 
look forward to hearing a lot more about it
    Mrs. Kelly. I would hope that you would do more than hear. 
I would hope that you would help us plan.
    The other thing that I haven't mentioned is that within two 
and a half miles of Stewart also is the Hudson River, with a 
natural deepwater port and piers that can already handle cargo. 
So you have a perfect intermodal facility with water, roads, 
air, and rail right there. New York needs another major airport 
in some capacity. This is a perfect intermodal position for the 
Federal Government to be looking at. I would hope that you 
would come and help us get started on some kind of a coherent 
plan. Can I assume that you will?
    Mr. Shane. I will. And let me say, as you describe it, it 
sounds like something we should be spending a lot of time 
thinking about. The system is experiencing bottlenecks 
throughout. We need to take advantage of every opportunity that 
we have for providing relief for shippers, for transportation 
providers of all kinds. So I am anxious to hear more about this 
and to participate perhaps in some meetings with your 
constituents, and perhaps we can get something on the road.
    Mrs. Kelly. Well, New York City, the State of New York, the 
County of Orange County, and the people who manage the airport 
are all waiting anxiously to have someone talk with them. I 
hope you will make that visit soon. Thank you, sir.
    I yield back.
    Mr. Petri. Thank you.
    Let's see, Mr. Cummings? Mr. Oberstar?
    Mr. Oberstar. Do you have any others on your side?
    Mr. Petri. Sure.
    Mr. Marchant? No? Ms. Schmidt?
    Mr. Oberstar. OK, I am ready.
    Mr. Petri. You are ready. I haven't asked either, but 
should I go ahead?
    Mr. Oberstar. No, no, why don't you, please. You were here 
before me.
    Mr. Petri. Well, I was here before you, but I didn't want 
to waste time. We have another two panels. But maybe one or two 
kind of comments.
    I understand from a lot of people who are active in the 
transportation industry that we, as a Country, have had a 
generation of becoming more efficient in transportation, and 
now those trend lines are actually leveling off and dropping 
down, and transportation costs are starting to eat up a greater 
percentage of our national effort, which is a very bad thing in 
terms of our standard of living and our competitiveness if it 
were to continue.
    So while it is not immediate and short-term in the sense 
that there is a crisis staring us in the face that has to be 
dealt with tomorrow, if we don't adopt long-term programs to 
try to figure out how to keep the system operating and increase 
its efficiency, we are going to be paying a long-term cost. In 
that connection, I guess we all look to the area of 
intermodalism is one that will provide greater opportunities 
for efficiency.
    Private industry is equipped because of the way a lot of 
these people who do shipping, whether it is packages at UPS or 
FedEx, or goods over the road by Schneider or Hahn Trucking or 
these other companies. They think more and more intermodally, 
so they are tending to start driving States and the Federal 
Government in an intermodal direction.
    But is there anyone really driving us in that direction on 
the passenger side of things? I mean, I think of what is 
happening in Germany and Europe with their passenger 
intermodalism, and we see it regionally. San Francisco Bay was 
talked about and Chicago has a subway-bus-airline hub. The 
airports are the passenger hubs. The planes can't go anywhere 
but to the airport, but everything else can go to the airports.
    So maybe we should be doing more to encourage planning and 
also helping to direct more funding to making, on the passenger 
side of things, airports more efficient. It might mean people 
would not have to use the roads as much if they could use buses 
and trains and planes. Efficiency in a Country of our size, 
people are not going to just use trains to go across the 
Country, they are going to want to use planes.
    But if the trains did run to the airports, they would, on a 
regional basis, for a couple hundred miles, then switch, and 
the same thing with buses. So we could have a system that would 
perhaps be more efficient. And, you know, obviously it is 
somewhat the same thing in a little different way applies for 
water, harbor, and freight rail intermodalism.
    Do you have any comment on that?
    Mr. Shane. Yes.
    Mr. Petri. Are there some things--a number of people have 
asked about what we can be doing to encourage breakdown 
barriers or change laws, which I guess is our role, to try to 
encourage States and communities and local stakeholders to 
actually look at this and do it.
    Mr. Shane. Thank you, Mr. Chairman. Yes. I am extremely 
proud of what the Department of Transportation is doing 
currently under Secretary Mineta's leadership, particularly in 
the context of a brand new initiative that was just rolled out 
a few weeks ago that I referred to in my opening remarks, an 
initiative to reduce congestion on America's transportation 
network. I mentioned earlier that I thought it was 
transformational.
    And when I say it is transformational, I mean that, in a 
sense, the Department of Transportation should always be about 
congestion. There is nothing exciting about that, but we have 
never identified congestion in the transportation system as the 
fundamental impediment to economic growth that it represents.
    That is what this initiative is an attempt to do, it is an 
attempt to--forgive the word--market the importance of 
addressing these bottlenecks as a fundamental tool in the 
development of our economy going forward in ways that we have 
never done before. And it is not just a question of finding 
more money to throw at the system. We have to use technology 
much more intelligently. We have to use pricing strategies of 
all kinds in order to calibrate the use of the system and to 
make sure the revenues are available that respond to the actual 
demand for these facilities.
    We are developing a whole variety of ideas and programs 
through this initiative that I think will enable us to address 
these problems, first of all, in an intermodal way, to be sure, 
but hopefully in a much more effective way. Among the things I 
am proudest of is what we are doing on the aviation side. The 
Next Generation Air Transportation System Initiative, which 
Secretary Mineta launched about two and a half years ago, is 
nothing less than an effort to overhaul the way we handle air 
traffic, recognizing that we will have three times the number 
of operations in the sky in 20 years, and we simply cannot 
handle all of that traffic using the tools that we have today. 
Even if technology gets to be a little better, the model needs 
to be changed, the operations concept needs to be changed, and 
that is what the Next Generation program is doing.
    So you take that, we have a freight policy framework which 
has received enormous support from the private sector, from the 
providers of transportation and, more importantly, from the 
users of transportation, recognizing the importance of breaking 
down the bottlenecks that impede the flow of goods in our 
system.
    I have never seen quite as much attention being paid to 
some of these issues as before, and I am hopeful and even 
optimistic that by talking across the Country about these 
issues, working with communities at all levels, we are going to 
get these issues on the national policy agenda in a way that we 
have never seen before, and we are going to be addressing them 
with more effective tools than we have ever seen before.
    Mr. Petri. I think the public is clearly interested, 
concerned and looking for leadership in this area. Just one 
example, 10, 15 percent of our Country is California, and the 
Governor there has started to increase his focus on 
infrastructure and transportation issues dramatically in the 
last year or so. And, of course, California has had a lot of 
pressures and problems, but they are not unique, they are 
experienced to one level or another in many other areas of our 
Country.
    Mr. Shane. People treat congestion, particularly as you 
were just speaking of, passengers, in the passenger are as 
though it were the weather, that congestion is just part of 
life and there is nothing we can do about it. We can do 
something about it. It is absolutely wrong not think that there 
is nothing we can do about it.
    And people do not appreciate, except as the most personal 
level, the extent to which congestion is affecting the quality 
of life in this Country. In some cases it is destroying the 
fabric of family life because so much time is spent getting to 
and from the workplace. We have a fundamental obligation to 
address these issues for the sake of our people and for the 
sake of the quality of life that they enjoy.
    Mr. Petri. Mr. Oberstar.
    Mr. Oberstar. Thank you very much, Mr. Chairman. I 
compliment you on scheduling this hearing and bringing together 
such a wide array of authorities on the subject matter at hand, 
especially our lead witness today, Jeff Shane, for whom I have 
the greatest respect. He is one of the real thinkers who served 
in not only the Department of Transportation, but also State 
Department. His career has bridged many activities in 
transportation, international trade, aviation trade 
negotiations and, most significantly, in the aftermath of 
ISTEA, being the first intermodalist.
    I recall a conversation shortly after implementation of 
ISTEA in about mid-1992, about June or so we had a conversation 
and Mr. Shane said ISTEA really forced us all to think for the 
first time about relating each of the transportation modes to 
the other. We had never done that, and he said I brought this 
group together--Federal Highway, railway, Federal Transit, FAA, 
Maritime Administration--and they had never sat in the same 
room and talked with each other before. We realized that this 
legislation was forcing us to think intermodally.
    That was a very good thing and it warmed my heart because 
in 1987, after two years of hearings that I conducted in the 
Investigations and Oversight Subcommittee with my then partner, 
Mr. Gingrich, and later Mr. Klinger, drafted and introduced a 
bill to create an assistant secretariate for intermodalism in 
the Department of Transportation, and here it was working 
itself out. We had actually included in ISTEA the authority for 
an intermodalism office, but it was to be in the Office of the 
Secretary, it was to be at a policy level.
    And so Mr. Shane, Mr. Chairman, has had a very long history 
of understanding the importance of this issue, this idea, this 
initiative of bringing the modes together to extract the best 
for the best and greatest public good.
    Unfortunately, over time,--and let me parenthetically 
observe that the principal co-author of that bill and driving 
force behind it, a gentleman who sat in the Chairman's chair, 
is now the Secretary, Mr. Mineta, who is very keen on including 
the term ``intermodalism,'' as was our then--Chairman of the 
full Committee, Mr. Roe. And Mr. Mineta has continued to be a 
strong advocate for intermodalism.
    But subsequently, over time, the intermodal idea has been 
eroded. It was sidetracked in the National Highway System 
authorization in 1995. We just took it out of, well, changed, 
it was a requirement that there be intermodal consideration of 
management plans, and that was changed to an optional role in 
the National Highway System authorization.
    And then the office was moved subsequently in TEA-21, and 
then further in the Norman Y. Mineta Research Project Act that 
created RITA. Then it sort of began slipping. It was in the 
Office of the Secretary, then we had the assistant secretary, 
then we had a requirement, and now it has been changed to this 
Office of Innovative and Technical Studies.
    How can it possibly have a policy effect, except that you 
personally, Mr. Shane, take an interest in it? And I heard--and 
I listened with great interest when Mr. Mica said, well, why 
should we not have an inter--why should we not require 
intermodal management plans, and you said yes, we should. But 
if it is buried down there in this little office of RITA--which 
was a hurricane last year, but----
    [Laughter.]
    Mr. Oberstar.--it is certainly not going to be a hurricane 
in this Department--who is going to listen except you and the 
Secretary? And if we leave it there and that Secretary is there 
and you are gone at some future time, there will be nobody 
listening and paying attention. Structure means something in 
government. So shouldn't it then, like creme, rise to the top?
    Mr. Shane. Thank you, Congressman Oberstar. First of all, 
thank you for the kind words, and let me just say that----
    Mr. Oberstar. They are not kind, they are honest.
    Mr. Shane.--our continuing dialog over these issues over 
the years has been one of the hallmarks of my professional 
career. I have enjoyed them enormously and I hope they go on 
for a long time, and I appreciate the knowledge that you bring 
to all of these issues.
    But having said that, I have to disagree with you in this 
one respect. The Department of Transportation looks and feels 
dramatically different from the way it looked when the Congress 
passed ISTEA. Intermodal thinking has embedded itself in the 
very fabric and in the culture of the Department in a way that 
would amaze you if you spent time in our inner sanctums and in 
our inner councils.
    When we prepared SAFETEA, the Administration's package, 
which eventually became SAFETEA-LU, we had people from all of 
the modal administrations sitting around the table making 
contributions to our thinking and we, as a result, served up a 
whole variety of proposals that would have been surprising a 
decade before. They were intermodal. Not all of them saw the 
light of day in the Act that finally got enacted, but I am sure 
that they will in the longer term. Many of them did. And it is 
that kind of thinking that informed our proposals on aviation 
authorization a couple of years before that.
    These are--when I said, back in a decade ago that, you 
know, these people had sat around the room for the first time, 
now they sit around the room together all the time. They talk 
to each other all the time. The kinds of tensions that 
compromised our ability to do things intermodally in the 
Department are no longer a problem. The administrators of the 
different modal administrations look forward to working 
together with each other, they seek opportunities to do that; 
they like each other.
    And the culture of the Department now--and make no mistake, 
this is thanks to the Congress of the United States and the 
underscoring of intermodalism throughout the years--they are 
working with each other more effectively than ever before. And 
sometimes it is about a facility, sometimes it is about just 
looking at an issue: human factors in the drivers of 
conveyances, medical certification for a barge operator versus 
somebody who is behind the wheel of an 18-wheeler.
    These are the kinds of things that we are doing together in 
a way that is just a fundamental part of the culture in a way 
we have never seen before. That is the number one point I 
wanted to make.
    Mr. Oberstar. That is a very encouraging development. I am 
delighted to hear you say that, because you are so right, there 
was a time 15 years ago, when these folks passed each other in 
the hallway and wouldn't recognize one another.
    Mr. Shane. The Department of Transportation Act in 1966 
called for the coordinated and effective management of the U.S. 
Government's transportation program, so the very theme of the 
Department of Transportation was supposed to be intermodalism. 
We didn't see much movement in that direction until ISTEA and 
until the Office of Intermodalism was created.
    What I guess I would like to just share with you as my 
final point is that the creation of RITA--and forgive me for 
repeating myself--is the most profound change in the structure 
of the Department that we have seen since the inception of the 
Department, more profound than the creation of the Office of 
Intermodalism itself.
    RITA is an arm of the Office of the Secretary. It is not a 
modal administration, it is an intermodal entity which the 
Office of the Secretary is treating as a special entity, 
augmenting the ability of our Policy Office in the Office of 
the Secretary to make intelligent decisions about what our 
proposals ought to be to the Congress, what we should be doing 
in the administration of our programs, and so forth.
    If you are not looking at the transportation data in an 
intermodal way, if you are not driving your research program in 
an intermodal way, then how are you going to support the 
policy-making process in an intermodal way? That is what RITA 
does.
    Mr. Oberstar. Let me interrupt you at that point. That is 
good to know, and with this under secretary and with this 
secretary will that structure survive a personnel change? That 
is, will the subsequent secretary and under secretary have the 
same relationship with RITA?
    Mr. Shane. That is an excellent question, and this 
Secretary is determined to enshrine the cultural shift that I 
am talking about that was embodied in the creation of RITA in 
the culture of the Department so that the answer to that 
question will be yes.
    Mr. Oberstar. Thank you. Let me----
    Mr. Shane. Have we achieved it yet? No. But we are striving 
for that. We have a couple of years left, and----
    Mr. Oberstar. Mr. Chairman, if I may pursue just one other 
issue here, and I will not belabor it.
    But there is the matter that Mr. Mica raised, that you 
responded to, should intermodal management plans be required of 
the States and of the departments. And there is a great 
resistance to mandates. We would all like to, in a perfect 
world, not in a supposititious world, like to believe that 
things would work as intended, without a forcing mechanism. But 
if an intermodal management approach were required, can we do 
it in such a way that it doesn't become another layer of time 
consumption in development of transportation initiatives?
    For example, an airport wants to extend a runway to 12,500 
feet to serve cargo operations. Good idea, very important. 
Cargo is the fastest growing sector of aviation, 9 percent a 
year; it is very profitable. But it also has a noise impact.
    Shouldn't FAA be required to get together with Federal 
Highway Administration and the Federal Railway Administration, 
along with the Airport Authority and State Highway Department 
and considering is this the best way to extend that runway to 
have cargo, have an increased impact on the noise footprint of 
the airport? Is there another location? Is there another city 
that could accommodate that freight operation?
    Have you looked at all the alternatives? Do we need to have 
more freight carriage out of O'Hare? Could you put it at Gary? 
Do we need to have more freight at MSP? Could you put it at St. 
Cloud? What would be the impacts of more trucks on the road 
going to St. Cloud? What would be the impact on the air quality 
of the airport at O'Hare, at MSP of more trucks, more air 
pollution, shifting it out someplace else? Would that create 
more opportunity for international service, long-haul service 
for passenger that would be more valuable?
    Shouldn't someone be at least required to think those 
things through?
    Mr. Shane. Absolutely, Congressman.
    Mr. Oberstar. Without unnecessarily extending the time 
frame within which those decisions have to be made. I think 
that can be done.
    Mr. Shane. Yes. I was not in government and I am not really 
sure what the history was of the National Highway System 
Designation Act of 1995. That is the one that repealed the 
mandatory requirement for intermodal management plans at the 
State Transportation Department level. And I don't know whether 
there was a problem with that mandate which led Congress to 
take it out.
    But there is no question that you can't do these major 
projects today without looking at the intermodal implications. 
It is not going to be very helpful to have a lot of cargo 
coming into an airport if there is no way to move it to its 
ultimate destination. Nobody wants cargo at the airport, they 
want it someplace else. So we need an intermodal system to 
get----
    Mr. Oberstar. Or shouldn't we extend the light rail into 
the airport, instead of having more cars, more parking areas, 
and more congestion?
    Mr. Shane. Again, what I am pleased to report you, without 
really fully answering the question of whether we could do with 
more Federal requirements in this regard, is that more and more 
communities are in fact bringing these very interesting, very 
intermodal concepts to us. You have just heard Congresswoman 
Kelly talking about the complex of projects they are trying to 
design for Stewart Airport. And it is those kinds of projects 
that are coming to us more and more frequently. We have 
Southern California looking at a whole complex of 
transportation facilities to continue to move freight through 
that largest of our port complexes.
    The Department of Transportation is reaching out to those 
communities, in fact, stationing our people right there at the 
site in order to become one-stop shopping offices for their 
assistance. And there is no question that this is the direction 
that we have to take in the future.
    Mr. Oberstar. Thank you very much. We are not here to shape 
legislation, but we are here to shape the ideas that will shape 
legislation.
    And let us continue the dialog, Mr. Chairman.
    And, Mr. Shane, thank you very much.
    Mr. Petri. Mr. Taylor.
    Mr. Taylor. Mr. Secretary, I do appreciate your sticking 
around this long and giving me the opportunity to ask you 
something that I know affects at least two of the federally 
funded ports in South Mississippi is something the railroads 
jokingly refer to as captive shipper.
    The Port of Gulfport, I know, and the Port of Port 
Bienville are both only served by one railroad. In the case of 
Port of Gulfport, there is a second railroad line, as the crow 
flies, less than a half mile away that is not even connected to 
the Port of Gulfport. In the case of Port Bienville, there is a 
railroad line approximately 15 miles away that is not served. 
And we call it short-term in that both of these ports had no 
rail access for approximately five months after Hurricane 
Katrina, because the one line that served both of them lost 
bridges and, therefore, you couldn't go east to west. But had 
we, again, not been victims of captive shipper, they would have 
had other opportunities.
    My question is, in your whole concept of intermodalism, 
have you looked at, as a Nation, making an investment to give 
the opportunity to some of these ports that are more or less 
the captive of one railroad the opportunity to do business with 
another? Because what I have experienced when the one in Port 
Bienville came to me and said, look, we are down for six 
months, we have heavy manufacturing that desperately needs rail 
access, and there is another line just 15 miles away all 
through government property, all we need is some money to run 
that line.
    The other railroad, you would think, would want to jump in 
there and get the business, but they didn't. And in my visit 
with their lobbyist, he actually let the words captive shipper 
slip. And I am sure he will go to his grave swearing it didn't 
happen, and I had never even heard the term before, but I know 
what it means now.
    So my hunch is, with a wink and a nod, these guys aren't 
competing. They will never say it and they are certainly not 
going to say it before a court of law. But, so, if they are not 
going to jump in and provide real competition, in our spirit of 
intermodalism, why don't we, as a Nation, look at spending a 
little money to provide real competition? Because the winners 
are going to be these publicly owned ports, in this instance. 
And I think that would be money well spent.
    The other thing is that we are encountering, again, towards 
intermodalism, a lot of the smaller communities in South 
Mississippi have been left behind as a result of NAFTA. The 
manufacturing plants that used to go to rural Mississippi, in 
truth, looking for low-cost labor, have relocated to Mexico and 
other places. The ones that stayed behind are desperately 
dependent on their rail lines. There are very few of them. They 
are usually short lines.
    And when these short lines start having major construction 
costs, I have noticed in one instance the guy is just walking 
away from it. So now we have got a couple of industries that 
need about $50 million rail improvement. The guy who owns it 
isn't getting that kind of revenue, and what happens is the few 
businesses that have remained in rural Mississippi are now 
threatening to relocate elsewhere if we can't come up with rail 
service for them.
    What, if anything, has your agency looked into doing to 
help those guys?
    Mr. Shane. I will acknowledge, Congressman, that this is a 
real conundrum. We do not have, as you know, a program for 
making major infrastructure investments into the railroad 
system in this Country, with the exception of passenger rail, 
as you know. We do have a loan guarantee program, the RRIF 
program, which is as much as we have been able to do 
legislatively. The Service Transportation Board probably treats 
the captive shipper issue as one of its most complex and 
difficult issues. There is not, quite honestly, a program for 
Federal assistance that assists shippers specifically when they 
are----
    Mr. Taylor. Well, again, my point exactly. If we are 
looking at intermodalism, which is several opportunities to 
move your product and inter-move your product, wouldn't you 
think that would be a natural, that we ought to be looking at 
this? Because the private sector is not going to step in there 
and voluntarily create more competition. That is completely 
contrary to what they want. So if they are not going to do it, 
and it benefits our ports, then maybe we, as a Nation, ought to 
be looking at it.
    In the second instance, I am very much opposed to spending 
Federal money to improve a private rail line and, in effect, 
benefit one guy, the owner of that rail line. I have absolutely 
no problem if we were to come up with a program that says this 
line serves five rural counties; they desperately need it. If 
those five rural counties want to pool together and have a rail 
authority, we will loan you some money, because then it becomes 
public money going to a public purpose. And I think it is 
really necessary.
    I think what is happening in Mississippi is not unique to 
Mississippi; I beg you, it is happening in rural America. And 
we have got to do something to keep the remaining industries 
that are still here from leaving. And that is one of the things 
that I think we ought to be doing.
    Mr. Shane. Well, I appreciate the magnitude of the problem 
and I appreciate your bringing it up. It is something that I 
think we ought to discuss more. You will appreciate that I am 
not authorized, in this budgetary environment, to advocate a 
new funding program for any mode of transportation other than 
what has already been done. But these are issues that we 
haven't addressed fully, and the private sector seems not to be 
coming up with solutions, so it may be that some further 
discussion is warranted, and maybe some other ideas can emerge.
    Mr. Taylor. Well, we just spent quite a few billion dollars 
yesterday on that transportation bill, so it is not like, as a 
Nation, we are not getting involved in transportation. Maybe we 
are just not getting involved in all of the right things. And I 
hope I have given you a couple of things that I hope you will 
look into.
    Mr. Shane. Yes. Thank you.
    Mr. Taylor. Thank you, sir.
    Mr. Shane. Thank you, Mr. Chairman.
    Mr. Petri. Thank you for your testimony.
    And we will now turn to the second panel, which consists of 
Mr. Daniel A. Grabauskas, who is the General Manager of 
Massachusetts Bay Transportation Authority; Peter McLaughlin, 
Chair of the Hennepin County Regional Rail Authority and of the 
Metro Transitways Development Board in Hennepin County, 
Minnesota; Patrick Sherry, Professor and Director, National 
Center for Intermodal Transportation at University of Denver, 
Colorado; Ms. Katherine Siggerud, Director of Physical 
Infrastructure Issues, U.S. Government Accountability Office.
    Thank you for being here today. We appreciate your prepared 
statements, and we look forward to your summary, beginning with 
Mr. Grabauskas.

      TESTIMONY OF DANIEL A. GRABAUSKAS, GENERAL MANAGER, 
 MASSACHUSETTS BAY TRANSPORTATION AUTHORITY; PETER MCLAUGHLIN, 
CHAIR OF THE HENNEPIN COUNTY REGIONAL RAILROAD AUTHORITY, CHAIR 
 OF THE METRO TRANSITWAYS DEVELOPMENT BOARD, HENNEPIN COUNTY, 
  MINNESOTA; PATRICK SHERRY, PROFESSOR AND DIRECTOR, NATIONAL 
  CENTER FOR INTERMODAL TRANSPORTATION, UNIVERSITY OF DENVER; 
KATHERINE SIGGERUD, DIRECTOR OF PHYSICAL INFRASTRUCTURE ISSUES, 
         UNITED STATES GOVERNMENT ACCOUNTABILITY OFFICE

    Mr. Grabauskas. Thank you, Chairman Petri, Ranking Member 
Oberstar, and members of the Committee, for the opportunity to 
appear before you today to talk about our South Station 
Intermodal Transportation Center in Boston, Massachusetts. I 
would also like to thank the Committee for your interest in 
this important area.
    At the Massachusetts Bay Transportation Authority, or MBTA, 
where I serve as General Manager, we appreciate the value of a 
strong intermodal network. Intermodalism means providing more 
connections to transit riders to get where they want to go, 
thereby delivering more choices and hopefully increasing 
ridership as a result.
    South Station has a rich history in Boston. It opened 
January 1st of 1899 as the largest train station in the world. 
By 1913, more passengers were using South Station annually than 
New York's Grand Central. And by 1945 South Station made 
history when 135,000 visitors passed through it each day, 
probably driven by returning GIS.
    However, by 1970 the Boston Redevelopment Authority was 
planning to demolish the building and remove the tracks. A 
group of concerned citizens succeeded in having it placed on 
the National Register of Historic Places and the catalyst was 
therefore put in place for the renewal of this intermodal 
facility. And in 1978 the Boston Redevelopment Authority sold 
the facility to the MBTA, and we embarked on a project to 
restore the former glory of South Station at a cost of about 
$195 million.
    The rehabilitation of the station included restoration of 
the headhouse, reconstruction of 11 tracks to accommodate the 
growing commuter rail service, and the construction of a new 
bus terminal and parking garage over the tracks. And that 
project was completed in 1996.
    South Station for us is now, once again, the hub of 
transportation activity in Boston and serves, we believe, as a 
real model for intermodalism. Today, more than 152,000 
passengers pass through South Station daily and six different 
transit modes of transportation interconnect there. You will 
find our subway, the Red Line; you will find the MBTA public 
bus service, multi-carrier private bus service; it is the 
terminus for 10 commuter rail lines; Amtrak and the Acela high-
speed trains terminate there at the end of the northeast 
corridor; and the newest service for the MBTA, the Silver Line 
Phase II, which is Boston's first rapid transit system, opened 
in December of 2004. The facility is also easily accessible by 
automobile and, lastly, we have a multitude of bike racks and 
work very hard to make it pedestrian friendly.
    The new Silver Line Phase II service means that for the 
first time transit riders in Boston actually have direct 
service and a one-seat ride to Logan's International Airport 
terminals. As you mentioned earlier, this is the first time in 
Boston we had had direct connection, Mr. Chairman, between 
Logan Airport and the main core of our subway system. We expect 
about 14,000 riders to hit that number in about three years; in 
18 months we have actually exceeded 15,100 daily riders.
    And I would like to take the opportunity to recognize and 
thank Congressman Capuano, this Committee, the Federal Transit 
Administration for all of your support through the New Starts 
funding, which allowed this project to take place.
    Further, the Silver Line now connects the financial 
district of Boston to the South Boston waterfront, and the 
connection into South Boston opens up a potential 30 million 
square feet of development that has traditionally been 
restricted by State and Federal permitting authorities due to 
parking limitations.
    Also, the intercity bus terminal has been a major success. 
Private bus carriers indicate that their ridership is up 
significantly; furthermore, that those riders make a 
significant contribution to Boston's economy. For instance, in 
2000, Greyhound Lines did a survey of just 3 of the 11 carriers 
serving that terminal, and it was determined that the direct 
annual spending values were over $132 million a year.
    Now, despite the activity at South Station, there are 
certain limitations that we are currently working to address. 
The new intercity bus terminal that we built is not directly 
connected to South Station, and the platforms for the commuter 
rail lines leave our commuters out in the elements. We need to 
make further improvements, but as is the case with most transit 
agencies across the Country, financial constraints are a 
reality. But I am happy to report that, like Rumpelstiltskin 
was able to spin straw into gold, the MBTA is turning air into 
cash.
    Recently, we struck a deal at South Station with Hines 
Development Corporation, who is interested in utilizing air 
rights over the station to build a major development downtown. 
In exchange for the $26 million in development rights, Hines 
Development Corporation, as a part of their overall development 
project, are going to build a new weather-protected bus 
terminal connection, design and build a bus terminal expansion 
which will nearly double the number of bus gates provided for 
intercity private carrier service, provide new ventilation, new 
track and signal modifications, upgrades to our power system, 
as well as improvements to our bus rotunda. And in addition, as 
part of the deal, Hines will make a number of payments that 
will increase the total value to the MBTA to about $45 million 
in exchange for the $26 million estimated value to upgrade the 
facility.
    South Station air rights project is a perfect example also 
of transit-oriented development. The benefits, which I will 
mention briefly, are a direct result of our rich intermodal mix 
at South Station. We are soon to embark on an $800 million 
mixed use project over those air rights; $1.8 million square 
feet of office, residential and hotel space, which is expected 
to generate about 2500 construction jobs, 5,000 permanent jobs, 
$12 million in new property taxes to the City of Boston, and 
$10 million in linkage payments to the city as well.
    So I am happy to report that intermodalism is alive and 
well in Boston, as it has been for about the last 150 years, 
the Nation's oldest subway authority. We have been moving with 
bus, subway, commuter boats since 1897. And I would just like 
to thank the Committee for their attention to this matter, and 
I invite members of the Committee to come to South Station at 
any time to show it off. Thank you.
    Mr. Petri. So when Charlie gets off the MTA, it will be at 
South Station.
    [Laughter.]
    Mr. Petri. Mr. McLaughlin.
    Mr. McLaughlin. Thank you, Mr. Chairman and members. Let me 
first begin by thanking the House Transportation Infrastructure 
Committee, with special thanks to Mr. Oberstar, for your faith 
in our vision for our twenty-first century transit system in 
the Twin Cities. We thank you very much.
    We are a Nation of people on the move, and intermodalism is 
one of those things that often goes unnoticed, like our shoes 
being tied, and that should be our goal: easy, seamless, 
connectivity in movement. I am happy to report that the 
Hiawatha LRT line has been a tremendous success. It opened 
early and on budget. It has exceeded forecast ridership since 
the full line opened in December 2004. In 2005 ridership was 58 
percent above preconstruction estimates, and success continues 
in 2006. Weekdays we are averaging more riders than projected 
for the year 2020.
    In a recent survey, 93 percent of LRT riders agreed or 
strongly agreed with the statement: ``I am satisfied with Metro 
Transit Service.'' People are riding and they like it. In fact, 
my wife and I took the LRT to the hospital when we had our baby 
in January, and it was terrific; it was perfect. I could pay 
more attention to her in the train than I could have in the 
car.
    Now, the role of intermodalism in this line was important. 
Years ago, faced with a traditional single-mode freeway 
proposal, residents of the Highway 55 corridor offered a multi-
modal alternative before the term had even been invented. In 
the end, the Hiawatha corridor incorporated many intermodal 
features, including bus connections with free transfers; 
bicycle amenities, including bike racks on every LRT vehicle, 
bike lockers and bike racks at most stations, and multiple 
bicycle trail connections, including a major link to the 
Midtown Greenway, which this Committee has supported; luggage 
racks; full ADA accessibility to major park-and-rides with over 
1,600 spaces and plans for 900 more because of the heavy 
usages; seamless transfer from the Hiawatha Line to the planned 
Northstar Commuter Rail Line and the Cedar Avenue busway; 
recently an HOURCAR proposal similar to the Zip Car operation 
here in Washington, D.C. was installed at one of the stations; 
and, finally, strong integration of the LRT line at the 
airport.
    There are several lessons of intermodalism which we are 
inventing locally:
    One is connectivity is at the heart of successful 
intermodalism. It allows us all to take maximum advantage of 
our infrastructure investments and it is the answer to the 
charge that LRT can't get you everywhere you want to go.
    Two, it takes hard work, hard work at both the local and 
Federal levels to achieve effective intermodalism. Locally, we 
generated a spirit of teamwork and cooperation among MnDOT, 
Metropolitan Council, Hennepin County, and the Airport 
Commission, as well as the Cities of Minneapolis and 
Bloomington.
    federally, while the Federal Transit Administration and FAA 
are both in the Transportation Department, they often speak a 
different language, from our experience, they have different 
cultures and procedures and their own lawyers to enforce them. 
The addition of heightened security concerns and another 
Federal bureaucracy only added to the complexity and of costs. 
Strong, consistent leadership across agencies, both local and 
Federal, is essential if we are to achieve effective 
intermodalism.
    Number three, integration of rail design into the airport 
master plan is critically important. My suggestion would be 
that all airport renovation plans fully incorporate robust 
intermodal transit connections even if no major investments are 
anticipated in the next few years. It is essential to keep open 
the possibility for these critical connections.
    And, finally, intermodalism is part of a broader set of 
policies affecting the pace and placement and type of 
development that occur in our region. A robust intermodalism 
can reinforce the economic goals of the community and allow for 
more intense and a more efficient use of existing 
infrastructure. Transportation and growth strategies must be 
tied together.
    We learned a few lessons out of the Hiawatha Line:
    One, organizationally, control of LRT construction by the 
Airport Commission--that construction on airport property--gave 
MAC sufficient confidence to proceed. It assured the MAC of no 
downtime on any of its operations and control of the details of 
a complex construction project on its grounds.
    The MAC's financial contribution to the Line produced real 
benefits for the airport. Over $1 million annually in savings 
on internal airport travel alone. It also avoided the twin 
threats of a non-airport agency under-designing elements 
critical to the success of the airport or, conversely, of the 
MAC gold-plating its request because it had no financial 
responsibility for the request.
    Just as the FTA's firm budgetary number for the overall 
project imposed needed discipline, so too did the MAC's 
financial contribution to the LRT project. Splitting of 
construction contracts is not without its problems, but, on 
balance, this arrangement proved effective on the Hiawatha 
Line.
    Security was yet another issue where control by the MAC 
created significant advantages because of the fuller 
integration with its other security responsibilities.
    In summary, the key lesson for us is that effective 
intermodalism will require seamless transition among agencies, 
local and Federal, to the same degree that the physical systems 
provide seamless transitions among the modes.
    Mr. Chairman, I would be happy to answer questions later, 
and we appreciate the opportunity to be here today.
    Mr. Petri. Thank you.
    Mr. Sherry.
    Mr. Sherry. Good morning, Chairman Petri, Congressman 
Oberstar. Thank you for the opportunity to address the 
Committee on this very important topic relevant to the health 
of our Nation's transportation system.
    Congestion, competition, capacity, and conservation are the 
major challenges facing the U.S. transportation system today. 
These can only be met by adopting a serious commitment to 
connectivity through intermodalism. Increased congestion on our 
highways, railways, and ports, coupled with increasing fuel 
costs, security threats, and competition in the global 
marketplace will seriously test our ingenuity and creativity. 
However, I believe that the best hope for the future of the 
transportation in this Country will come from the adoption of a 
truly intermodal system that ensures the seamless and cost-
effective transport of people and goods.
    I think we should take a minute to talk about what 
intermodal transportation truly is. Many people first think of 
the freight industry, with containers on flat cars and water-
to-land transfer materials. The definition that we use at the 
University of Denver is ``the seamless interconnection of two 
or more modes of transportation to create an efficient and 
ethical system of transportation.''
    As I recently explained to a student of mine, intermodalism 
is about connectivity. The only way to get to Denver 
International Airport, for example, is to take a car or a taxi. 
You can take a bus from the park-and-ride.
    DIA could have been a truly intermodal airport as a rail 
line runs right through the middle of the airport terminal and 
connects all of the concourses. However, rail access from the 
city to the airport is missing. The rail right-of-way runs 
right along the airport, but there is no connecting service. A 
truly intermodal system would have provided a seamless 
interconnection between the two modes, with resulting capital 
and operating efficiencies.
    Faced with these challenges, faculty and researchers at the 
University surveyed the extent to which State DOTs engaged in 
intermodalism and intermodal planning. We surveyed several 
States and over 325 respondents. Here are a few of our key 
results:
    In reviewing comprehensive State transportation plans, we 
found that there was an increase in attention to intermodal 
issues. In terms of looking at organizational structures, DOT 
organizational structures have changed to change expanding 
roles, with about 60 percent of them having a State office 
devoted specifically to intermodal planning. DOT staffs are 
primarily made up of highway engineers and many State agencies 
are still primarily highway focused. We found little support 
for an interest in providing training to develop an intermodal 
perspective.
    As a side note, other nations have begun to look more 
seriously at intermodal transportation systems. We were asked 
by the Asian Pacific Economic Cooperation, APEC, to help 
determine whether their 21-member nation economies had the 
needed skills and available training programs to support an 
intermodal transportation system. We identified significant 
gaps between training and education opportunities, and were 
subsequently asked by APEC to help them develop curriculum that 
could be used throughout the region.
    In general, our study found few examples of intermodal best 
practices. When we did, most of them involved highway 
construction. In terms of funding, our study showed that there 
was a lack of funding for intermodal projects. Most funding and 
financing decisions, including prioritization, are based on 
local communities' needs and are largely mode-specific.
    Traffic congestion, however, in places like L.A. and 
Chicago may be the result of influx of vehicles from other 
areas of the Country. Thus, intermodal projects should be 
supported by a national transportation policy, and the funding 
may need to come from national sources, as well. Currently, 
much funding is tied to specific modes, which perpetuates a 
narrow modal approach to investment. Financing of projects 
should not be mode-based but, instead, based on prioritization 
of traffic volume, congestion, and economic impact.
    Summarizing the results, we identified capacity and 
congestion as key components, as well as conservation of 
limited resources. As one of the Congressmen mentioned earlier, 
rising fuel costs are anticipated to increase in their 
magnitude. And while the intermodal systems demand the most 
cost-effective and fuel-efficient mode be selected, it became 
painfully aware that during 9/11 all modes of transportation 
were not interconnected. And even if you could book a ticket or 
a train or a bus, you had few options because the train was 
probably 30 miles away.
    All of this will require a significant paradigm shift away 
from a multi-modal approach to the development of a customer-
driven and user-focused approach in which the best or most 
efficient mode is selected. By focusing on the performance of 
the mode, customers obtain the most cost-effective choices.
    The other focus of our study was on competition. We found 
that the transportation infrastructure has significantly 
contributed to our national economic competitiveness. I 
recently attended a meeting of the Asia Pacific Economic 
Cooperation Working Group in Hanoi, Viet Name, a country that 
has seen steady growth to almost 8 percent GDP in the last 10 
years. Government officials at that meeting were very 
interested in gaining skills in intermodal planning and 
transportation.
    In conclusion, I would recommend that we increase 
connectivity solutions be adopted. We recommend also that there 
be research on additional funding mechanisms and establishment 
of an under secretary for intermodal policy and reformation of 
the Federal role on a more user-focused service, and the 
creation of improved incentives for collaboration and 
coordination at the local, regional, and State levels; finally, 
the development of a more effective workforce through education 
and training programs focusing on intermodal solutions and 
thinking.
    Thank you very much. I would be happy to answer any 
additional questions.
    Mr. Petri. Thank you.
    Ms. Siggerud.
    Ms. Siggerud. Mr. Chairman and Ranking Member Oberstar, 
thank you for the invitation to testify today about intermodal 
solutions to the Nation's mobility and congestion challenges. 
We are all aware that anticipated increases in passenger and 
freight travel have challenged the capacity on all modes of our 
Nation's already strained transportation system.
    My testimony today draws on a series of reports GAO has 
issued about intermodalism, by which we mean both facilities 
that efficiently move passengers and freight from one mode to 
another, and the ability for State and local planners to select 
projects and modes that are the most appropriate mobility 
solutions.
    I will discuss, first, the challenges associated with 
developing and using intermodal capabilities and, second, 
strategies for enhancing these capabilities. I will be drawing 
on examples from our July 2005 report on intermodal projects 
for ground access at airports.
    In looking at these and other projects, our work has shown 
that the development of intermodal capabilities can provide a 
range of benefits. These include: potentially reducing travel 
times and cost for travelers and freight by making alternative 
transportation options available, reducing road congestion and 
a potentially associated vehicle emissions, and eliminating 
freight bottlenecks.
    We found that most U.S. airports have some kind of 
intermodal ground connections to either local transportation 
systems or nationwide bus and rail networks. Sixty-four of the 
72 airports that we surveyed reported having connections to one 
or more local transportation systems and 27 airports had a 
connection to a local rail system such as the light rail, 
commuter rail, or subway.
    With regard to intercity travel, 20 airports reported 
having connections to a nationwide bus service or a nationwide 
passenger rail. Fourteen of these have access to airport, but 
13 rely on shuttles to transport passengers to the stations, 
which may not be convenient. One airport, Newark International, 
provides access to Amtrak by an automated people mover. As a 
result, Continental Airlines established a code share agreement 
with Amtrak whereby passengers can purchase one ticket for a 
journey that includes travel by both air and rail.
    Development of intermodal capabilities in our 
transportation system faces challenges that stem from the lack 
of a specific national goal or funding program devoted to that 
purpose. In addition, Federal funding is often tied to a single 
transportation mode. As a result, it may be difficult to 
finance projects, such as intermodal projects, that do not have 
a source of dedicated funding. Similarly, restrictions on the 
use of Federal funds at airport revenues and charges to 
passengers challenge the development of alternative 
transportation projects to improve airport access.
    Nevertheless, turning now to projects to provide transit 
access to airports, we found that some local planners were able 
to put together projects for a variety of Federal sources. For 
example, the Hiawatha Line, which we have just discussed, used 
the Federal New Starts program that funds skyway transit. The 
rail extension to Portland, Oregon's airport was financed in 
part through passenger facility charges. The Amtrak station at 
Milwaukee's airport received direct Federal appropriations. 
Finally, we also saw projects that used the TIFIA program and 
two Federal aid highway categories: the Congestion Mitigation 
Air Quality Program and the Surface Transportation Program.
    State and local planners interested in developing such 
projects face other challenges that include:
    First, the rigorous process established for airport and 
surface transportation planning that yields publicly acceptable 
projects but at some cost in terms of complexity and time.
    Second, the physical constraints near an airport or other 
major transportation hub offer few alternatives for expansion 
or new project development, particularly in densely populated 
urban areas. But it is these same areas where such facilities 
are likely to generate benefits that will justify the costs.
    Third, multi-jurisdictional transportation corridors 
present special challenges in coordinating investment 
decisions.
    And, finally, the success of facilities such as transit 
connections to airports depends on providing a service that is 
convenient, cost-effective, and reliable enough to overcome 
preferences for private vehicles.
    In looking at such challenges to intermodal solutions, we 
have identified a framework that could guide Congress in 
developing strategies to encourage these types of projects and 
capabilities. These include, first, setting national goals that 
define the key Federal interests in improving transportation; 
second, clearly defining the Federal role relative to the roles 
of State and local agencies and to the private sector to ensure 
the appropriate balance of public investment when the benefits 
flow in part to the private sector; third, determining which 
funding approaches and incentives will maximize the impact of 
any Federal investment and achieve the goals I just mentioned; 
and, finally, evaluating performance periodically to determine 
if the anticipated benefits from federally funded projects are 
accruing as expected.
    In implementing this framework, Congress will need to 
decide whether to retain the role of the Federal Government in 
a funding and oversight role, but with increased flexibility 
for the use of Federal funds. This strategy would preserve the 
current practice that transportation projects are largely 
determined at the State and local level. Or, if there are 
transportation problems and goals that are so pressing that 
they need an increased Federal role to assure they are 
accomplished, the Federal Government may need to take a more 
active role to achieve that vision.
    Mr. Chairman, that concludes my statement. I would be happy 
to take any questions.
    Mr. Petri. Thank you.
    We have a few minutes. Those bells mean that there is a 
vote on the rule, I think just one vote, so we will have to 
recess shortly, but, Mr. Oberstar.
    Mr. Oberstar. Thank you, Mr. Chairman. Again, this panel is 
very instructive and very thoughtful.
    Ms. Siggerud, that has got to be a good Norwegian name, no?
    Ms. Siggerud. Absolutely.
    [Laughter.]
    Mr. Oberstar. Must be an escapee from Northern Minnesota.
    Ms. Siggerud. Yes. I grew up there.
    Mr. Oberstar. You did? Oh, all right.
    [Laughter.]
    Ms. Siggerud. How did you guess?
    Mr. Oberstar. All right. Very, very thorough, in GAO's 
typical fashion of examining the issues in-depth and making 
very constructive suggestions. I like your flowchart of 
movement of persons from home to destination and back. I think 
that is exactly the kind of thinking we need to have.
    And Peter McLaughlin, Mr. Chairman, I have known for 25 
years. He was in the vanguard of proposing light rail at a time 
when folks could hardly think past the ox cart. And, 
unfortunately, he was ahead of his time and people weren't 
ready for Peter McLaughlin except for me. I was. We couldn't 
get enough others to do the right thing. But now that dream of 
light rail is in place, and you have rightly outlined how it 
should work.
    The airport at Minneapolis-St. Paul should not be the 
largest parking facility in the State of Minnesota. There is 
parking for nearly 16,000 vehicles. Why do we need that? Why 
can't we have effective light rail with bus connections and 
others to get people off the roadways and arriving in a 
sensible fashion, with a good frame of mind to fly to their 
next destination?
    Mr. McLaughlin. Mr. Chairman, Mr. Oberstar, I am afraid 
that cow got out of the barn during that period when we 
couldn't get enough other people to support the plan. But the 
airport is now facing real restrictions on space, additional 
space that they have available. They have embraced the presence 
of rail in the airport and with the help of the Northstar 
corridor, which will connect directly to Hiawatha, the central 
corridor, which we are hoping to be in preliminary engineering 
this year, which will connect St. Paul and take people right to 
the airport. We think that a mode change is in the works.
    Mr. Oberstar. And the Rush Line corridor, which will go up 
north----
    Mr. McLaughlin. Yes, sir.
    Mr. Oberstar.--into Wabasha County, the fastest population 
growth corridor in the Midwest, and get more people off the 
roadways, instead of having that traffic jam that extends 50 
miles from downtown Minneapolis.
    I have one question, Mr. Chairman, for the panel.
    You listened to the exchanges we had with Mr. Shane. You 
heard him say that RITA, organizationally, is the best place 
for the intermodal activity. Do you agree with that? And let me 
put the question another way. Wouldn't it be more effective if 
policy were directed from the Office of the Secretary, the 
premier policy formation center of power in the Department?
    Ms. Siggerud. Mr. Oberstar, I will take a crack at that. In 
our view, attention to intermodalism at the Secretary's level 
is in fact appropriate. We have not looked at the effect of the 
movement of the Office of Intermodalism into RITA. I do want to 
mention we have some ongoing work looking at the RITA 
organization to be reporting out this August that I hope will 
maybe shed some light on this issue.
    Mr. Oberstar. Thank you.
    Mr. Sherry?
    Mr. Sherry. I agree. I am confused about what is going on 
with the Office of Intermodalism. Even over the last year or so 
their budget is sort of nonexistent. If intermodalism is so 
important to RITA, why isn't the Department head of RITA here 
at the hearing, I guess would be one question. There seems to 
be some concern there. I am concerned that intermodal is not 
even mentioned in the new framework that is being put out as 
the freight policy. So I would like to see it at a much higher 
level directing and coordinating policy. Thank you.
    Mr. Oberstar. Mr. McLaughlin, you talk about different 
culture, different language, different time lines. And when the 
agencies get together, they don't even understand each other. 
What do you think?
    Mr. McLaughlin. Mr. Chairman and Mr. Oberstar, it takes an 
enormous amount of energy to get the Federal agencies to work 
together. And while there may be agreement at the upper levels, 
as the earlier witness from the Department of Transportation 
indicated, when it gets out to the people with whom we are 
really dealing on a day-to-day basis, it takes enormous energy 
on our part, on the part of our congressional allies, others in 
State government to make these things come together.
    So we do need a better emphasis. I don't know what the 
particular blueprint ought to be at the Federal level, but it 
needs to be at the highest levels of the organization that 
intermodalism is embraced, and then it can be carried out so 
that the energy that we have to put in to get people to 
cooperate at the local level doesn't have to be so great. I 
mean, that is their problem.
    Mr. Oberstar. Thank you.
    Mr. Grabauskas. I can actually perhaps address it with the 
same challenge we had in Massachusetts. Two years ago our 
legislature and Governor Romney worked together partly out of 
the same kind of frustration, for the lack of communication 
amongst agencies, authorities, and the alphabet soup of 
transportation players, and passing pretty significant 
legislation which gave directly to the Secretary or 
Transportation in Massachusetts greater coordinating powers, 
including positions or seats on various authority boards, in 
some cases as chairs of those boards, and knit together, for 
the first time really in Massachusetts, we are modeling as a 
true DOT.
    And I can tell you that even over the last couple of years 
intermodalism, multimodal thinking, whether from bike-ped 
through transit, water transportation, and obviously--as we 
will discuss, I guess, at the next panel--freight, and so on, 
is, I think for the first time in Massachusetts actively being 
discussed, and there is no question that the fact that it is 
operated directly out of the Office of the Secretary and a new 
Office of Transportation Planning, which is spoken to in the 
legislation as it must be multimodal in its thinking, has been 
a great benefit for us.
    Mr. Oberstar. So the higher the level of policy involvement 
and oversight, the better the outcome.
    Mr. McLaughlin?
    Mr. McLaughlin. Mr. Chairman, Mr. Oberstar, I just wanted 
to add the military presence at airports, at many airports, 
adds a whole additional level of complexity. That should be 
noted in our testimony today.
    Mr. Oberstar. Thank you.
    Mr. Petri. Well, we have about a minute and 29 seconds to 
get over and vote, so we will recess. But let me just leave you 
with a question to think about for the panel, and we will get 
back. And I know you probably have lunch plans, but we will try 
to recommence right at noon.
    And that is that we are talking about trying to change the 
infrastructure to promote intermodalism in the bureaucracy, to 
promote intermodalism. What about channels of communication so 
the public can demand intermodalism more easily? I can't buy a 
ticket very easily on the Web or from a travel agent on an 
airline and on a bus and on a train. There are a lot of 
structural barriers in terms of communication and linkups. When 
you go to Europe, it is all one ticket, it goes to Frankfurt 
and then it goes to Cologne or whatever.
    Should we be thinking about the barriers that exist beyond 
our little envelope and out in the real world? If those were 
broken down, wouldn't the public demand a lot more 
intermodalism?
    We will recess and come back if you have any thoughts in 
that regard.
    [Recess.]
    Mr. Petri. Several of my colleagues are on their way, but 
they have agreed, since it was my question and I am here, that 
you can answer it, if you would care to respond. Who would like 
to start?
    Mr. Grabauskas. You mentioned Charlie on the MTA, Mr. 
Chairman. Our new automatic fare collection system, which is a 
smart card technology that we are introducing in Boston, by 
next January we will eliminate the token as a currency of the 
system. We are not only utilizing this new smart card 
technology within the MBTA, but have actively reached out to 
other regional transit authorities throughout Massachusetts in 
sort of a co-branding.
    So an individual in a city that is not served in one of the 
175 communities that the MBTA serves, but one of the dozen or 
so regional transit authorities that serves the rest of the 
Commonwealth of Massachusetts, we would actually have a Charlie 
card be a one passport item to allow for travel by bus, 
typically from one of the other regional transit authorities 
into the MBTA system and vice versa, and it would be utilized 
and recognized by both.
    In addition, we have had conversations with some of the 
private bus carriers in the State who are also interested in 
having the Charlie card be an additional passport, if you will, 
or ability to pay. So we are looking for that. But I think 
several of us were talking about during the break there are a 
number of hurdles that, when you get beyond other modes and, 
,for instance, the airports and things, that it is a challenge, 
and I don't think we have certainly come up with that answer 
yet in Boston.
    Mr. McLaughlin. Mr. Chairman, I am happy to say I was the 
author of the provision and State law, when I was a legislator, 
that said that we would have the bus--if there were a train 
system, an LRT system created, it would be run by the same 
people who ran the bus station. So that creates the integration 
there. And we have got the total interoperability between those 
two operations. So I think that is a fundamental building 
block.
    Number two, I have been promoting, trying to get 
cooperation between the airlines and the people who run the 
transit system to promote the train on the planes. People who 
are coming in, find a way to get a dollar off or a half price 
ticket into their hands as people are coming in or as they are 
leaving through the travel agents. We are trying to promote 
that. It has taken a little bit of work because, again, we have 
multiple agencies. And I am still fighting with the Airport 
Commission to get more signs, frankly, at the airport to direct 
people down to the train. So those are the sort of detail level 
things.
    Structurally, I think you have got to create it and invent 
it right there at that level right now. There is not some sort 
of grand fix for it.
    Mr. Sherry. Thank you, Chairman Petri. I think being able 
to buy a ticket to go through multiple modes is a great idea. I 
don't have any specific suggestions about how to do that. I 
think the other piece of the equation, short of the buying of 
the ticket--and I am understanding that there are some 
impediments to being able to do that in terms of the cost-
sharing between the different agencies.
    Short of that, I think being able to go and get information 
and plan a trip would be an important intermediate step. I was 
just in New York, and I was able to log on to HopStop and plan 
a trip to Secaucus using a bus and a train and the Metro all on 
one Web site. And that, to me, is something that could be 
further encouraged and incentives could be created for agencies 
and public organizations to provide that information more 
specifically.
    And the final point I would make is I think we should not 
stop at just buying tickets for people. But what about our 
baggage? I was saying at the break that I was in Vienna 
recently, and I walked out of the hotel room, across the 
street, I checked in for my flight to Dubai at the counter in 
Vienna and was able to check my bag all the way through and get 
on the train all in one place. So I would like to encourage us 
to think even broader still, to be able to take care of bags 
and people and get them to where we are going. Thank you.
    Ms. Siggerud. Mr. Petri, you asked about a comparison with 
Europe and the ability to move freely and purchase tickets in 
comparison with the United States, and I would point out that 
we know of only one instance in the United States where it is 
possible to code share, and that is at Newark Airport, between 
Amtrak and Continental Airlines.
    We did look at the European example in our work, and I 
think there are two differences that are important to point 
out.
    First is that the intermodal capability at airports and 
other facilities has come as a result of a conscious EU and 
government investment in those capabilities in Europe, as well 
as the capital support to build those facilities from EU and 
from the member governments.
    The second is that the EU did put together a EU-wide task 
force to look at connectivity issues at airports and rail, and 
it made a number of recommendations, including in the area of 
ticketing, which you mentioned, trying to make it easier to do 
either code shares or simply movement from one mode to another. 
It also made recommendations with regard to some of the 
security challenges in having these intermodal connections. 
And, finally, it made some recommendations with regard to 
handling baggage more effectively to make it more convenient 
for passengers. That may be something we want to look at here.
    Mr. Petri. Thank you. I have flown to O'Hare and gotten to 
it on the subway and taken a bus from O'Hare up to Mitchell 
Field in Milwaukee or over to Madison. They have a wonderful 
intermodal center, but I don't think the average passenger on 
an airplane is even aware of it; it is sort of hidden away and 
there are not many signs directing you to it, and it seems to 
be more for people who don't have cars and lower-income people. 
At least that is who I have observed as I have used it, even 
though it is a wonderful facility.
    So somehow we need to figure out how we can increase 
consciousness throughout the traveling public of the options 
that even already do exist, because if they are more widely 
used, that will foster interconnective thinking. If people say, 
well, we do it and no one uses it, then why should we bother 
doing it?
    I think there are various people like Greyhound stopping at 
train stations and airports, and even if it is just for a few 
minutes, there are a lot of restrictions on what kind of 
vehicles are able to achieve access to these facilities. So we 
talk intermodalism and we plan intermodalism, but people who 
want to be intermodal are prohibited from providing these 
services in many instances. So I think we probably should be a 
little more aware of that and figure out ways of at least 
removing barriers to existing intermodal opportunities that 
don't cost any Federal money.
    Mr. McLaughlin. Mr. Chairman, I think your comments are 
right on point. I think the citizenry is ahead of us in some 
measure. In our example, it was the citizen advisory committee 
that said we want bike racks on the train. Now, the train 
professionals, the engineers, they weren't really--they knew 
all the problems that come along with bike racks on trains and 
they are thinking Minnesota. You are from Wisconsin, you know 
how cold it is.
    But I will tell you virtually every time I am on the train, 
even in the winter, there is somebody with a bicycle on there, 
and it has really increased the reach that the train can have, 
because people can ride from their home to the train and then 
off to where they go.
    So I think we need to be listening to people, because if 
they get--there is an excitement about this and we are creating 
a new way of moving about after a period where the car was the 
only way. We are creating the new way of thinking and moving in 
this Country, and we need to be listening to people who are 
there on the ground, because they have got some great ideas.
    Mr. Petri. Very good. We thank you very much. We appreciate 
your written statements.
    And we will now turn to the third panel, which has been 
very patient. We apologize for the delay. It consists of Mr. J. 
Robert Bray, Executive Director of Virginia Port Authority; Tim 
Lynch, Senior Vice President, Federation Relations and 
Strategic Planning of the ATA, American Trucking Association; 
David Roberts, Senior Vice President, Advanced Technologies 
Group; Rick Richmond, Chief Executive Officer, Alameda 
Corridor-East Construction Authority; and Mr. Arthur 
Scheunemann, who is Senior Vice President for Business 
Development of NW Container Services, Inc.
    As with the previous panel, we thank you for your prepared 
statements, and we invite you to summarize those comments in 
about five minutes, beginning with Mr. Bray.

TESTIMONY OF J. ROBERT BRAY, EXECUTIVE DIRECTOR, VIRGINIA PORT 
    AUTHORITY; TIM LYNCH, SENIOR VICE PRESIDENT, FEDERATION 
      RELATIONS AND STRATEGIC PLANNING, AMERICAN TRUCKING 
  ASSOCIATIONS; DAVE ROBERTS, SENIOR VICE PRESIDENT, ADVANCED 
  TECHNOLOGIES GROUP; RICK RICHMOND, CHIEF EXECUTIVE OFFICER, 
     ALAMEDA CORRIDOR-EAST CONSTRUCTION AUTHORITY; ARTHUR 
SCHEUNEMANN, SENIOR VICE PRESIDENT FOR BUSINESS DEVELOPMENT, NW 
                    CONTAINER SERVICES, INC.

    Mr. Bray. Thank you very much, Mr. Chairman. We are honored 
to be here today and think this is a very important time for 
America.
    Let me talk a little bit about what is going on in the 
containerized shipping world.
    If you look at what has happened in America over the last 
10 years, it has been absolutely phenomenal. We in Virginia 
have seen air cargo double in that period of time. The West 
Coast, the cargo moving through there, of course, is legendary.
    Now, what happened somewhat recently was that in 2002 there 
was a work stoppage on the West Coast. A lot of the Wal-Marts 
and Home Depots of the world said they were going to wait it 
out. Some other ship lines began to come through the all water 
Panama Canal to the East Coast, and when they adjusted their 
schedules by a couple of days, they found it was just as 
efficient and just as cost-effective as it was shipping through 
the West Coast.
    Now, that shifted a lot of Far East cargo to the East 
Coast, and about 80 percent of that cargo has stayed. That has, 
of course, exacerbated the problems we have with the intermodal 
part of the transportation chain.
    Congress did something most recently with the SAFETEA-LU 
legislation that created corridors of national significance, 
one of which is the Heartland Corridor, which will serve Ohio, 
West Virginia, and Virginia. Congress appropriated nearly half 
of the funding for that corridor, and together with Norfolk 
Southern, the States of Virginia, West Virginia, and Ohio have 
found the rest of the money. Construction will start 
momentarily on that corridor, and, when it is completed, it 
cuts the transit time from the Port of Virginia into the 
Midwest by a day and a half and saves some 230 miles. That will 
help us move more cargo by rail, which obviously has got to be 
some part of what we are going to do to mitigate the congestion 
that containerized cargo brings.
    But let me say this. One of the major factors in our growth 
in Virginia has been the location of distribution centers. We 
have distribution centers, some 72 in number, and some of the 
major companies are Wal-Mart, Home Depot, Target, Cost Plus, 
Dollar Tree, and others. Those facilities, in general, are 
located within 30 miles of the port. That means that all of 
that cargo will move by truck.
    One of the things that the Heartland Corridor will do is 
Norfolk Southern has worked with the States--again, Ohio, West 
Virginia, and Virginia-to locate intermodal yards within those 
States but, generally speaking, in areas close enough to the 
port that they have not in the past been served by rail. 
Because, as most of you know, rail only is probably effective 
if the cargo is moving about 500 miles. Norfolk Southern has a 
new slant on this, and we hope they are successful, because it 
will help the Commonwealth greatly.
    The last thing I want to say to you is that we in Virginia 
have interstate connections at all of our ports save one, and, 
unfortunately, that is the largest. That facility has a dual 
access road that was built by the State that connects the 
Interstate 64 system, but they are the kinds of connections 
that we need to look at nationwide when it comes to servicing 
ports. We are a Nation of consumers, unfortunately at the 
moment. About 90 percent of what we handle in this Country 
moved through 10 major maritime gateways, and we begin to need 
to look at this thing as a piece of a puzzle that serves the 
entire Country.
    Thank you very much, Mr. Chairman. I would be glad to 
answer any questions you all might have.
    Mr. Petri. Thank you very much for a very good summary.
    Mr. Lynch.
    Mr. Lynch. Thank you. Good afternoon, Mr. Chairman, 
Congressman Higgins, Congressman Carnahan, and the other 
members of the Subcommittee. My name is Tim Lynch, and I am a 
Senior Vice President with the American Trucking Associations.
    ATA is the national trade association for the trucking 
industry, representing more than 37,000 motor carriers through 
our federation of State associations and industry segment 
conferences. In that regard, I am also appearing today on 
behalf of one of those organizations, the Intermodal Motor 
Carriers Conference, which represents companies that are 
specifically engaged in intermodal transportation or related 
motor carrier support services.
    We appreciate the opportunity to present our views on this 
very important subject. Congestion throughout our Nation's 
infrastructure is quickly becoming one of the most important 
public policy issues facing Federal, State, and local 
governments. This hearing on intermodalism is one of a series 
of hearings held by the Subcommittee to address those concerns. 
We commend you for focusing attention on these issues and 
certainly the subject of today's hearing, the role that 
intermodalism can serve in relieving congestion and 
contributing to an efficient freight delivery system.
    The trucking industry supports intermodalism and encourages 
policies that promote increased movement of containers and 
trailers by rail. In fact, trucking companies were among the 
early innovators and users of intermodalism in this Country. 
Package companies like UPS, less than truckload companies like 
Yellow, and truckload companies like J.B. Hunt were pioneers in 
seeing the value of partnering with the Nation's railroads to 
efficiently and productively move freight.
    In 2005, 11.7 million trailers and containers moved in rail 
intermodal service. The Association of American Railroads 
recently reported that intermodal traffic is now the industry's 
highest revenue business segment, surpassing coal for the first 
time in 2003. And while that is certainly a positive 
development for our transportation network, it is important to 
understand both the potential for and limitations of intermodal 
growth going forward.
    Today, rail intermodal comprises just 1.3 percent of the 
total freight market. This compares to a 68 percent market 
share for truck-only services. Global Insight, an economic 
consulting firm, projects that rail intermodal tonnage will 
increase nearly 80 percent from 2004 through 2016.
    Yet, even with that impressive growth number, rail 
intermodal will only account for under 2 percent of the 
domestic freight market at the end of that period. Why? Part of 
the answer is the very nature of our transportation and supply 
chain system. A large percentage of freight is simply not 
transferrable to the rail network. To be profitable, rail 
intermodal requires large volumes of freight and a 
significantly long length of haul. Those types of markets are 
limited. Only 8.6 percent of freight tonnage moves more than 
750 miles in this Country, and even freight movements over 500 
miles comprise less than 14 percent of the freight market.
    Another factor is the split of intermodal freight between 
domestic trailers and international containers. The rail 
industry has put a significant portion of their investment eggs 
in the international container business basket. That means port 
facilities. At the same time, the rails have reduced the number 
of interchange points for trailer transfer. Take, for example, 
freight that might be moving from Chicago to the East Coast. It 
makes little sense for a customer in Western Pennsylvania to 
ship their trailers east to the Port of Philadelphia to get on 
a rail to go to Chicago and then come back east another 150 
miles to a customer in Indiana.
    I won't belabor the well documented service challenges 
faced by the rail network. Suffice to say the trucking 
companies operate on a very tight service deadline with their 
customers and, thus, cannot wholly rely on a transportation 
partner that does not. Many trucking companies today are 
offering guaranteed service to their customers and cannot 
afford, literally cannot afford no payment on a trailer or a 
loss of a customer.
    I would now like to move and address the issue of freight 
corridors, and specifically the portion of SAFETEA-LU dealing 
with projects of national and regional significance. We 
strongly support a focus on freight corridors and a PNRS 
framework.
    While some of the projects funded under the PNRS program 
are meritorious, the most critical needs have not been 
addressed. A 2004 analysis by Cambridge Systematics for the 
American Highway Users Alliance identified the top highway 
bottlenecks in the Country. A similar report was prepared by 
FHWA. None of the bottlenecks on either of those lists received 
funding under the PNRS program.
    Going forward, we would suggest that a greater share of 
Federal funds be dedicated to these freight corridor projects 
and that more planning be undertaken on the needs of freight 
movements. In order for this program to be as effective as we 
think it can be, we also would suggest a more rigorous 
selection process.
    The explosive growth in global container trade moving 
through our maritime port system comprises the largest growth 
component in domestic intermodal transportation. Unfortunately, 
in addition to the almost universal challenges of limited 
funding, land resources, and environmental impacts that 
confront most transportation expansion and improvement 
projects, systemwide institutional operational inefficiencies 
affect port continue to restrain much needed cost-effective 
freight capacity improvements.
    Having said that, we want to thank the members of this 
Subcommittee for their efforts in addressing many of those 
problems in their consideration of SAFETEA-LU. Establishing 
clear Federal requirements regarding the overall safety, the 
Roadability issue of the 750,000-plus container carrying 
chassis that move on America's highways has long been a 
critical concern of the intermodal motor carrier industry. Much 
progress has been made, but we would ask that the Congress 
continue to prod FMCSA to move the internal development and 
improvement process.
    Finally, ATA and its intermodal conference would like to 
publicly thank officials at the Port of Virginia, Virginia Port 
Authority for their leadership role in establishing port-wide 
efficiency movements which have greatly streamlined and 
improved container intermodal interchange operations. Virginia 
Port officials included the motor carrier community in their 
planning and, as a result, this all-inclusive approach to port 
management changes implemented by Virginia now serve as an 
industry benchmark.
    And I would have said that even if Mr. Bray was not sitting 
directly next to me.
    [Laughter.]
    Mr. Chairman, that concludes my statement, and thank you 
very much for giving us the opportunity to present our 
testimony.
    Mr. Petri. Thank you.
    Mr. Roberts.
    Mr. Roberts. Mr. Chairman, members, thank you for inviting 
me. I am Dave Roberts, Senior Vice President of General 
Atomics, a San Diego company.
    We are leading a team that, under contract to the Port of 
Los Angeles, is exploring the benefits that magnetically 
levitated, or Maglev, transportation systems might bring to 
easing congestion and reducing pollution in the movement of 
freight shipping containers from the port to intermodal 
transfer stations.
    Maglev, which this Committee has supported for many years, 
as you know, utilizes vehicles that are both levitated and 
propelled by the use of electromagnetic forces. As a result, 
they are very quiet, but, most importantly, they emit no local 
pollution. Systems of this type are in operation in both China 
and Japan, and are being developed worldwide.
    As the members of this Committee are well aware, some 43 
percent of the goods entering the United States pass through 
the Ports of Los Angeles and Long Beach. This is a freight 
container equivalent throughput of more than 8 million 
containers, technically known as 14 million TEU per year. The 
port exports this to double by the year 2020.
    The port obviously has an important national function, but 
it is also a vitally important part of the economy of Southern 
California. However, the movement of this growing number of 
containers through the dense urban areas that surround the Los 
Angeles Basin impose serious burdens of congestion and air 
pollution. Diesel particulate emissions in particular are 
viewed as an increasingly serious threat. The challenge for the 
port, therefore, is to handle this increasing throughput 
without adversely affecting surrounding communities.
    One major facility to accomplish this is, of course, the 
Alameda Rail Corridor, with which this Committee is well 
familiar. And the port has created and is planning to create 
more intermodal transfer facilities to allow transfer to trains 
using the corridor, as well as to long-distance trucks. 
However, the intermodal facilities are about five miles away 
from the port itself. To move containers from the port to these 
facilities by road would involve more than one million truck 
trips per year in this very small area, a major added burden to 
both highway congestion and air pollution, and a source of 
great concern to local residents.
    Because of this, the port is exploring alternative systems 
for the container transfer. One of those is what we might 
consider a magnetically levitated conveyor belt, which is what 
we are examining.
    Our system has been under development for several years, 
and a full-scale test track is in operation at our San Diego 
facility. In fact, Congressman Oberstar had the opportunity to 
see it some time ago. The program is funded by the Federal 
Transit Administration, the Pennsylvania Department of 
Transportation, and industry. The levitation system we use is 
unique and uses permanent magnets, which makes it a much 
simpler system. It is a technology that was originally 
developed at the Department of Energy's Lawrence Livermore Labs 
and has been licensed by GA. And, as I noted earlier, the use 
of magnetic levitation makes systems quiet and non-polluting. 
The system also embodies a number of engineering features that 
create great safety.
    The port asked us to study the feasibility of using a 
Maglev system of this kind to transport 5,000 containers a day 
between the port and the intermodal facilities at the Alameda 
Corridor. We have recently completed the study and have 
concluded that our system can transport containers at the 
required rate safely, quietly, efficiently, and, very 
importantly, with no emissions, and what appear to be 
attractive operating economics. The automated system will 
feature two parallel guideways, would transport containers, 
each on an individual carriage, at speeds up to 90 miles an 
hour at 20-second headways. The onloading and offloading would 
be accomplished by bridge cranes.
    While more engineering is needed to flesh out the details 
of this system, we are encouraged that a system of this kind 
will be able to make important contributions to overcoming some 
of the barriers that occur, in this case, to the efficient 
utilization of the intermodal facilities.
    Mr. Chairman, that concludes my testimony. And because it 
is magnetically levitated, it is 30 seconds early.
    [Laughter.]
    Mr. Petri. Thank you.
    Mr. Richmond.
    Mr. Richmond. First, I want to add our thanks to everyone 
else for the Committee's work on SAFETEA-LU bill and 
specifically inclusion of our ACE Project as one of the 
projects of national-regional significance. And I particularly 
want to thank you, Chairman Petri, and also Ranking Member 
Oberstar for taking the time to visit our area and seeing 
firsthand the problems that we have to deal with, as Mr. 
Roberts has given good introduction to, with the movement of 
freight in and around the L.A.-Long Beach ports. I also want to 
thank Mr. Oberstar for inviting us to testify and present some 
material today.
    Next slide.
    Obviously, our freight problems start and finish at the 
Ports of L.A. and Long Beach. They are number one and number 
two in the Nation for containerized traffic combined; they are 
number five in the world.
    Next slide, please.
    As has been mentioned, they account for about 40 percent of 
all containerized traffic coming in or leaving the United 
States. As has also been mentioned, if the system were allowed 
to work on its own, about half these containers would leave the 
ports on truck and half would leave on rail, as determined by 
the distance that they would need to travel.
    Next slide.
    On the rail side, we have a 300-mile mainline railroad 
network saved by two Class I railroads. This area, the rail 
network in the metropolitan area covers a four-county area in 
the Los Angeles Metro area. You see the Alameda Corridor coming 
up from the ports, and then to the east is the two mainline 
distribution systems to the east. The area that I work and 
represent is actually the area shaded in the green portion in 
Los Angeles County.
    Next slide.
    While 50 percent of the traffic should end up on trains, 
frankly, it doesn't, and one of the reasons, as shown here, as 
you can see, operating a rail terminal at ports is very land-
intensive and, frankly, the land just isn't available for the 
volume of traffic that needs to be handled at the location on 
rail. So, as a result, about 10 to 20 percent of these 
containers have to move out of the ports on truck.
    Next slide.
    And this is what we get. This is the southern end of the 
Long Beach Freeway. It is, as you can see, heavily, congested; 
37,000 truck trips a day on this section of freeway. We have 
had, in addition to, obviously, the congestion problems, the 
mix of automobile and truck traffic creates safety problems, 
and we have had about a 17 percent increase in truck-related 
accidents over the last three years.
    Next slide.
    Rail is an obvious answer, and that was the impetus behind 
the investment in the Alameda Corridor. The good news for us 
today is that over 30 percent of the containers moving in and 
out of the ports are carried on the Alameda Corridor. That is 
actually an increase in the number of trains in the last year 
of 17 percent and an increase in the number of containers on 
those trains by 34 percent. We are getting more trains and 
longer trains on the Corridor. The Corridor represents about 
7,000 container moves a day, which basically translates into 
7,000 truck trips that don't have to go onto the Freeway.
    Next slide.
    Unfortunately, the problem doesn't stop with the Alameda 
Corridor. As you probably know, not much was done at the 
outpoint of the Alameda Corridor's inception to deal with the 
network east of its terminus. Ninety percent of the trains that 
operate on the Alameda Corridor come from or end up on the rail 
lines heading east, because those are the connections to the 
national system.
    We, in our area, started about five or six years ago to try 
to deal with it and we have adopted a program that is described 
on this slide, which basically is a combination of grade 
separations, trying to apply advanced technology to the 
movement of traffic, where we are not going to be separating 
roads, and also safety improvements. It is budgeted at about 
$950 million, the first half of which was funded. Forty percent 
of that funding came from the T-21 program, which got us 
started.
    Next slide.
    The first thing we did was to get to the safety problems. 
We have completed, a couple years ago, safety improvements at 
39 crossings.
    Next slide.
    I mentioned the traffic diversion program. This is a 
combination of traffic signal and train prediction technologies 
which will hopefully give us the ability to move traffic around 
blocked crossings whenever it makes sense. It is a fairly 
sophisticated application. We are doing a test application 
right now in the City of Pomona, and we hope by this summer to 
be able to expand the use of this to other locations in our 
area.
    Next slide.
    A significant part of the program is grade separations. As 
I mentioned, we have 21 in the program, 11 in the first half of 
the program, which is funded; 10 in the second. One is 
completed.
    Next slide.
    Five more are in construction, and they will be completed 
in the next 12 to 18 months.
    Next slide.
    Two more are out to bid and two more are designed and ready 
to go to construction with additional funding.
    Next slide.
    Just to briefly conclude, as I mentioned, we still are 
deficient in the second half funding for the project. Our goal, 
frankly, is to work at both the Federal and State level. We 
think very strongly that some form of a permanent and dedicated 
funding program to the issues of goods movement infrastructure, 
particularly in major ports areas, is not only needed, but well 
justified.
    And the reason we feel that way is that it is an activity 
that, frankly, generates a tremendous amount of revenue; it 
generates revenue on both the public and the private side. It 
generates revenue at all three levels of the public side: it 
generates Federal revenue through customs, it generates State 
revenue through income tax and business taxes, and it generates 
income, as mentioned, at the ports areas.
    So we believe this endeavor lends itself to a better way of 
funding it, which would have the side benefit of removing these 
rather massive requirements for funding from the general 
competition and presumably free up the general revenues for 
transportation to other less specific transportation 
investments.
    With that, I would conclude and thank you very much.
    Mr. Petri. Thank you.
    Mr. Scheunemann.
    Mr. Scheunemann. Chairman Petri, I am Art Scheunemann, NW 
Container Services, Seattle, Washington, Portland, Oregon. 
Members of the Subcommittee, I want to thank you for the 
opportunity to be here today to share a little bit of our 
insights on improving freight and goods movement through 
intermodalism.
    I would also like to recognize and thank Mr. DeFazio for 
his tireless efforts and support in improving freight and goods 
movement in the Pacific Northwest, and also Mr. Oberstar for 
taking time last year to come to the PNW and tour our 
facilities and see firsthand how short-haul intermodal rail 
operations actually can improve freight and goods movement.
    NW Container has been in business since 1985, providing 
containerized short-haul intermodal rail logistics services. 
Our mission is to improve freight mobility in the Pacific 
Northwest, California, other parts of the Country a our 
business grows, by providing intermodal or multimodal 
transportation solutions to customers utilizing rail, truck, 
and barge. The business model is built on a network of 
privately owned intermodal facilities capable of building and 
deploying unit trains for short-haul rail service, typically 
300 miles or less.
    We have also entered into some public-private partnerships 
with ports and public entities that share this mission and 
embrace this type of operation. We currently operate five 
intermodal facilities in Washington State and Oregon, ,linking 
the major West Coast ports of Seattle, Tacoma, and Portland to 
ports and cities and facilities in the east and Washington and 
Oregon.
    Next year we plan on opening a facility in Eugene, Oregon 
to connect that important agricultural and wood products export 
area with the ports that I mentioned above, and we are in 
discussions with the Port of Oakland at this time to establish 
an intermodal short-haul rail corridor that would service the 
San Joaquin Valley of California.
    We are primarily a hook-and-haul intermodal rail operation, 
but we are not a railroad. We contract for dedicated line haul 
capacity and engine power with the Union Pacific Railroad or 
the Burlington Northern Santa Fe Railroad. We own our own 
equipment and facility assets, including a fleet of 40 custom-
built double-stack container cars, a fleet of 100 Drey trucks 
capable of moving 250 containers each direction on the trains 
daily between our facilities.
    In 2005, we moved 85,000 intermodal loaded containers via 
our system. That figure represents about 6.2 percent of the 
total volume that moved through the ports of Seattle and 
Tacoma, and the majority of the cargo moved on the Seattle-
Tacoma-Portland I-5 corridor. Viewed another way, it represents 
85,000 truck trips that were shifted to rail, freeing up 
valuable highway capacity for people movement and other freight 
and goods movement.
    NW Container believes that there is great opportunity to 
take this business model and expand the footprint into other 
regions of the Country. As I mentioned, we are working with the 
Port of Oakland to develop a service between Oakland and the 
lower San Joaquin Valley. This is a perfect area because of the 
tremendous volumes of food and agricultural exports, and, at 
the same time, major U.S. import retailers have located mega-
distribution centers in those areas to service their retail 
trade or reposition containers for movement on long-haul 
eastbound trains.
    Unfortunately, the majority of the San Joaquin agricultural 
exports are trucked in and out of Los Angeles, the Ports of 
L.A. and Long Beach. A better model would be for retail 
shippers to move loaded containers from steamship carriers, 
calling on the Port of Oakland as an alternative, to their 
distribution centers in the San Joaquin Valley via short-haul 
rail. There, agricultural shippers could utilize the equipment 
to move loaded export containers back out. In this case, the 
Port of Oakland provides a competitive alternative because it 
is not faced with the capacity and the congestion issues 
experienced at the Ports of L.A. and Long Beach.
    This is just one example of how the model can work in other 
parts of the Country. However, a critical element is the future 
viability and the willingness of the major railroads to provide 
short-haul service and short line service at reasonable rates. 
We think that we share the same concerns that many in the 
intermodal transportation industry have expressed in recent 
months. Real questions continue to be raised about the major 
railroads industry's obligation to serve its customers and the 
Nation's transportation needs. NW Container and our short-haul 
intermodal rail service, like many short lines around the 
Country, is completely dependent upon Class I railroad service 
and capacity.
    We recognize that the Class I railroads represent a private 
sector network and, therefore, need to be profitable to their 
shareholders. However, we also suggest that there needs to be 
viable inter-state and inter-region infrastructure and service 
to meet the needs of shippers where the only alternative is to 
truck cargo or close business.
    We believe that serious attention needs to be focused on 
how inter-state and inter-region service can be maintained and 
enhanced. The significant investment that States and other 
public entities make in improving infrastructure--overpasses, 
grade separations, port infrastructure, etc.--which contribute 
to the railroads' increased efficiency and velocity must have a 
measure of inter-state and inter-regional return.
    As noted above, we believe our intermodal model has great 
hope for the future and can be duplicated nationally, and we 
believe the future of inter-state and inter-region 
transportation efficiency is dependent on competitive 
innovation such as short-haul rail service. Thank you.
    Mr. Petri. Thank you.
    Mr. Carnahan, any questions?
    Mr. Carnahan. Thank you, Mr. Chairman.
    I appreciate your remarks, all of you. In particular, I 
wanted to get your reaction to the GAO recent report on 
intermodal transportation, and there are two summary findings, 
I guess, that came out of that. One was that we really needed 
to increase flexibility to develop intermodal funding, and also 
to shift the Federal transportation policy maybe away from the 
emphasis on State and local planning and involve the Federal 
Government more in planning and funding. And those are some 
substantial changes in the way we have gone about 
transportation policy in the past, and wanted to get your 
thoughts about that in general, but also how it may affect your 
particular industries.
    Mr. Lynch. I will take a shot at that one.
    Congressman, I think the issue of the Federal-State-local 
relationship is one that is probably undergoing a lot of 
analysis right now and review. You look at my office is on the 
Beltway, and I look out my window and I see the Woodrow Wilson 
Bridge coming to at least part completion. The funding for that 
was forever looked at as basically a localized project. The 
delegations in Virginia, Maryland, and D.C. were the ones 
principally involved in pushing for it, and yet it carries a 
tremendous volume of traffic up and down the East Coast on I-
95.
    We sort of have to get away, and to the extent that the GAO 
report gets into this, we have to get away from this kind of 
mentality of just localized congestion points and understand 
that those congestion points, those bottlenecks, are typically 
part of a corridor that runs through many States. So whether 
that should be a more regional approach, you know,--I mean, I 
think it sort of has to be looked at almost by project by 
project, corridor by corridor. But clearly I think we have to 
start looking at that in a much, much different light than we 
have in the past.
    Mr. Richmond. I can just add a little bit. Again, our focus 
is not on intermodalism across the board, but we are primarily 
concerned with the issues of freight movement. And I can say 
that there would be real benefits from more flexibility in the 
funding. We are really locked into trying to compete basically, 
under the highway program, for the work that we do, which has 
huge demands and tends to largely be directed jurisdictionally. 
State highway departments are often typically responsible for 
certain elements of the system and the funding usually ends up 
in those elements, and if you don't happen to be in that group, 
that club, sometimes you don't get as much attention as I think 
maybe you would deserve on a pure basis of the degree of 
problem and the value of the solution type thing.
    So increased flexibility in funding and a focus on 
intermodal, particularly as it pertains to freight, would be 
valuable to us.
    Mr. Bray. I would like to echo that. If you look at what we 
have accomplished with the Congress in the Heartland Corridor, 
that is a great start. It involved three States. But if you 
come back to just the Port of Virginia by itself, 55 percent of 
what we handle ends up in the Midwest. So it is truly regional. 
And I would encourage you to think about this in terms of a 
nationwide issue, and not strictly a regional issue, because 
these ports move cargo for all Americans. And if somehow or 
another the bureaucracy focuses on just what is good for 
Virginia, that misses the point entirely.
    So based on what Congress has started to do with the 
SAFETEA-LU legislation, I think it probably is a good thing, 
but we need to be very careful how we approach it.
    Mr. Scheunemann. Mr. Chairman, I would like to expand on 
that. And I think this Committee should be commended, as well, 
for taking a long view on this last year, when you developed 
and passed and put forth the short-haul intermodal pilot 
program that Mr. DeFazio and Mr. Oberstar supported as well.
    I think, from our perspective, there has to be a national 
foundation. I spend as much of my time on the road consulting 
other parts of the Country, private sector entities, public 
entities, ports, local jurisdictions on how an intermodal 
short-haul rail system can work, when typically it is not a 
business model that is duplicated in many places. It is a 
region-by-region effort, but it has to be, I think, supported 
by a national policy that, as the gentleman to my right said, 
the goods that move in this Country move everywhere, not just 
east and west, not just north and south; it is a complete 
system. And I think we have to have a national intermodal 
policy that supports that.
    Mr. Roberts. Congressman Carnahan, I am not an expert in 
the matter, so I would just make a very brief remark. It is my 
observation, my impression that in the case of the ports, for 
example, they have considerable ability to self-fund certain 
things, rebonding mechanisms, as was discussed earlier. But as 
was noted, they are performing a function on behalf of the 
whole Nation, and I am sure there are many circumstances in 
which Federal supplementation of what they can do is highly 
desirable.
    Mr. Petri. Mr. Miller, any questions?
    Mr. Miller. Thank you, Mr. Chairman.
    I represent part of Southern California. I was at the 
harbors two weeks ago and reviewing how that process occurs and 
facing the reality that within the next 14 years the traffic is 
going to double or triple from the harbors. As Mr. Petri is 
aware, we had, we thought, fought very successfully to bring 
about $900 million home for Alameda Corridor, which would 
include four counties--L.A., San Bernardino, Riverside, and 
Orange County--and a dispute with the Senate, as Mr. Petri is 
well aware of, in the last few days of that bill being passed, 
eliminated that $900 million down to $135 million.
    Mr. Richmond, I know you are really, really acutely aware 
of the situation we face. For those of you who haven't been in 
California, in that area, it is not only train, it is truck. I 
mean, it is very, very obvious that we are the center for 
imports and exports for most of this Nation. When you drive on 
either the 91 Freeway, the 5 Freeway, the 60, the 10, 
especially the 210. When you get to 210 down near the harbor, 
it is just--it is stopped all the time with just trucks going 
in.
    And they have changed that even to go 24 hours a day to 
allow trucks to come in and out to try to minimize some of the 
impacts that our freeways are facing and the at-grade 
crossings, the amount of time that individuals and commuters 
and the concept of being able to haul goods via truck spend 
sitting at these at-grade crossings is costing a tremendous 
amount of money and a tremendous amount of time. I know there 
is one at-grade crossing in Riverside that, in recent weeks, 
has been averaging stops up to two hours. People wait just to 
get through this one intersection because train traffic is so 
bad.
    Rick, what do you think it is going to take in the 
immediate future to try to mitigate some of our problems that 
we face there? And by mitigating our problems, we help move 
goods to the rest of this Nation, so there is more of a benefit 
than just helping the people who are impacted by the trucks and 
by the trains, it is a matter of getting those trucks and 
trains to their destination on time, and the cost associated 
with delays that they face in that process. What do you think 
it is going to cost in our region to resolve this problem?
    Mr. Richmond. There has been working going on in the last 
six to twelve months to put a number around what we call a 
medium term program, which is sort of a ten-year time frame, 
and it ranges in the neighborhood of $10 billion to $15 
billion. Now, a portion of that, probably a significant 
portion, has a potential for revenue financing. Some of it are 
improvements that can be made within the ports. And, as has 
been mentioned, they do have some capacity for raising revenue.
    But a large portion of that is probably outside the current 
revenue-raising possibilities. Just the grade separation 
mitigation program alone, which, in our case, doesn't eliminate 
grade crossings, it just takes about half the worse and takes 
care of half, and, similarly, in the outlying areas. That is 
about a $2.5 billion program unto itself, and right now there 
is no provision for revenue financing.
    I mentioned earlier that I think there is a compelling case 
that can be made for setting up some form of a program that is 
keyed to this problem, and it is not just in Los Angeles, 
obviously, it exists in other port of entry cities. And I think 
there are opportunities to provide incentives potentially from 
the Federal level to make a voluntary program that locales 
could opt in or opt out of if they were willing to come to the 
table with resources themselves.
    We in California, as you know, have on the ballot for 
November a bond issue. It includes $2 billion specifically for 
goods movement and another $250 million for grade separations. 
We hope it passed, and we are going to work hard to see that. 
But I think there is a recognition that the State and the 
locals have a part to play in this, and my hope is that there 
is a partnership with the amount of commerce involved in this, 
the revenue that is generated, that there is a way to get it 
done and take it out of, again, the sort of crushing 
competition that goes on with all the other needs for general 
transportation investment, which are overwhelming, as you well 
know from your activity on the Committee.
    Mr. Miller. When people go to Wal-Mart to buy a TV or they 
buy a new refrigerator, or you go to the store to buy a new 
pair of tennis shoes, as that continues to grow from a consumer 
perspective, those goods are going to come in from the Pacific 
Rim, they are going to come in from the L.A.-Long Beach Harbor. 
And California realizes that is happening, and this Country 
faces many types of disasters. We faced Katrina; we continue to 
look at the hurricanes and wonder how that is going to impact 
our Country. California, in a fashion, is facing a 
transportation disaster in the next three to eight years, I 
would imagine, by the way the harbors are expanding.
    You would have to be there, Chairman Petri, to realize. I 
know you have been there before, we have had you down. But when 
you sit on those freeways--I drive from LAX from Diamond Bar 
every week, and rarely--and I have to get up about 4:00 in the 
morning to do it to get here in time to vote--rarely do I not 
listen to the news and they talk about a truck accident on the 
91 Freeway, or the 710 or the 5. And those truck accidents, 90 
percent of the time or greater, are associated with hauling 
goods from those harbors.
    Like I said, I went down there the week before last. I was 
out at the Long Beach Harbor, and it took me from the 105 going 
down the 710, it took me 35 minutes on that one short stint, 
just to get down to the harbor, because trucks were backed up 
because they could not get in. And then it took me a good 20 
minutes to get out because they were trying to get back out of 
the harbor. And that doesn't include the trains that are loaded 
and moved out.
    And I think it is incumbent upon Congress, Chairman, that 
we really look at the impact that States like California and 
others with major harbors are going to face, realizing that we 
cannot afford to allow a transportation disaster to occur, 
because it is a tremendous hit on our economy. Consumers, when 
they want to go to the store and buy something, they expect it 
to be in the store. The only way that is ever going to happen 
is if we make sure that those goods are on trucks and delivered 
to their site, or on a train and delivered to their site.
    So I thank you for having this hearing today. It is 
something that, whenever we do, I try to spend time here. Today 
has been a very bad day and it has been a bad week for all of 
us, but this is, in my opinion, in our region, probably the 
most significant issue that we are facing and going to have to 
face and deal with in the near future.
    And, Mr. Richmond, I look forward to continue working with 
you in the future and trying to mitigate, as best we can, with 
a cooperative fashion from the Federal, State, and local 
government to mitigate the problems that we face in moving 
goods and the problems that our commuters face trying to just 
go about their daily lives.
    I yield back. Thank you.
    Mr. Petri. Thank you. And it may be a regional problem, but 
it is a national problem as well, because the delays and the 
resultant inefficiencies in the movement of 40 percent of the 
Nation's goods, at least in that category, through that port 
result in higher costs for all Americans, and there is no 
getting around it.
    We thank you all very much for your contribution, and we 
look forward to working with you not to lament the problems, 
but to solve them.
    This hearing is adjourned.
    [Whereupon, at 12:57 p.m., the subcommittee was adjourned.]

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