[House Hearing, 113 Congress]
[From the U.S. Government Publishing Office]



 
                  HOW FREIGHT TRANSPORTATION CHALLENGES 
                    IN URBAN AREAS IMPACT THE NATION

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

                                (113-32)

                             FIELD HEARING

                               BEFORE THE

                                PANEL ON

                  21st-CENTURY FREIGHT TRANSPORTATION

                                 OF THE

                              COMMITTEE ON

                   TRANSPORTATION AND INFRASTRUCTURE

                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED THIRTEENTH CONGRESS

                             FIRST SESSION

                               __________

                   JULY 26, 2013 (New York, New York)

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure


         Available online at: http://www.gpo.gov/fdsys/browse/
        committee.action?chamber=house&committee=transportation




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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                  BILL SHUSTER, Pennsylvania, Chairman
DON YOUNG, Alaska                    NICK J. RAHALL, II, West Virginia
THOMAS E. PETRI, Wisconsin           PETER A. DeFAZIO, Oregon
HOWARD COBLE, North Carolina         ELEANOR HOLMES NORTON, District of 
JOHN J. DUNCAN, Jr., Tennessee,          Columbia
  Vice Chair                         JERROLD NADLER, New York
JOHN L. MICA, Florida                CORRINE BROWN, Florida
FRANK A. LoBIONDO, New Jersey        EDDIE BERNICE JOHNSON, Texas
GARY G. MILLER, California           ELIJAH E. CUMMINGS, Maryland
SAM GRAVES, Missouri                 RICK LARSEN, Washington
SHELLEY MOORE CAPITO, West Virginia  MICHAEL E. CAPUANO, Massachusetts
CANDICE S. MILLER, Michigan          TIMOTHY H. BISHOP, New York
DUNCAN HUNTER, California            MICHAEL H. MICHAUD, Maine
ERIC A. ``RICK'' CRAWFORD, Arkansas  GRACE F. NAPOLITANO, California
LOU BARLETTA, Pennsylvania           DANIEL LIPINSKI, Illinois
BLAKE FARENTHOLD, Texas              TIMOTHY J. WALZ, Minnesota
LARRY BUCSHON, Indiana               STEVE COHEN, Tennessee
BOB GIBBS, Ohio                      ALBIO SIRES, New Jersey
PATRICK MEEHAN, Pennsylvania         DONNA F. EDWARDS, Maryland
RICHARD L. HANNA, New York           JOHN GARAMENDI, California
DANIEL WEBSTER, Florida              ANDRE CARSON, Indiana
STEVE SOUTHERLAND, II, Florida       JANICE HAHN, California
JEFF DENHAM, California              RICHARD M. NOLAN, Minnesota
REID J. RIBBLE, Wisconsin            ANN KIRKPATRICK, Arizona
THOMAS MASSIE, Kentucky              DINA TITUS, Nevada
STEVE DAINES, Montana                SEAN PATRICK MALONEY, New York
TOM RICE, South Carolina             ELIZABETH H. ESTY, Connecticut
MARKWAYNE MULLIN, Oklahoma           LOIS FRANKEL, Florida
ROGER WILLIAMS, Texas                CHERI BUSTOS, Illinois
TREY RADEL, Florida
MARK MEADOWS, North Carolina
SCOTT PERRY, Pennsylvania
RODNEY DAVIS, Illinois
MARK SANFORD, South Carolina
                                ------                                7

              Panel on 21st-Century Freight Transportation

                JOHN J. DUNCAN, Jr., Tennessee, Chairman
GARY G. MILLER, California           JERROLD NADLER, New York
ERIC A. ``RICK'' CRAWFORD, Arkansas  CORRINE BROWN, Florida
RICHARD L. HANNA, New York           DANIEL LIPINSKI, Illinois
DANIEL WEBSTER, Florida              ALBIO SIRES, New Jersey
MARKWAYNE MULLIN, Oklahoma           JANICE HAHN, California


                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................    iv

                               TESTIMONY

Patrick J. Foye, Executive Director, Port Authority of New York 
  and New Jersey.................................................     4
William J. Flynn, President and Chief Executive Officer, Atlas 
  Air Worldwide Holdings, Inc....................................     4
Gerard J. Coyle, Vice President for Environmental and Sustainable 
  Operations, Evans Delivery Company, Inc........................     4
William G.M. Goetz, Resident Vice President for New York City, 
  New Jersey, and Philadelphia, CSX Transportation, Inc..........     4

               PREPARED STATEMENTS SUBMITTED BY WITNESSES

Patrick J. Foye..................................................    36
William J. Flynn.................................................    40
Gerard J. Coyle..................................................    47
William G.M. Goetz...............................................    58

                       SUBMISSIONS FOR THE RECORD

David A. King, Ph.D. & Jonathan R. Peters, Ph.D., written 
  statement; David A. King, Ph.D., Jonathan R. Peters, Ph.D. & 
  Cameron E. Gordon, Ph.D., Does Road Pricing Affect Port Freight 
  Activity: Recent Evidence From the Port of New York and New 
  Jersey (April 26, 2013)................................... \\

----------
\\ The written statement and report entitled, ``Does Road 
  Pricing Affect Port Freight Activity: Recent Evidence From the 
  Port of New York and New Jersey'' can be found online at the 
  Government Printing Office's Federal Digital System (FDsys) at 
  http://www.gpo.gov/fdsys/pkg/CPRT-113HPRT85538/pdf/CPRT-
  113HPRT85538.pdf.

  [GRAPHIC] [TIFF OMITTED] 82217.001
  
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  [GRAPHIC] [TIFF OMITTED] 82217.005
  


                       HOW FREIGHT TRANSPORTATION



                       CHALLENGES IN URBAN AREAS



                           IMPACT THE NATION

                              ----------                              


                         FRIDAY, JULY 26, 2013

                  House of Representatives,
      Panel on 21st-Century Freight Transportation,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The panel met, pursuant to call, at 1:37 p.m., at Alexander 
Hamilton U.S. Custom House, One Bowling Green, New York, New 
York, Hon. John J. Duncan, Jr. (Chairman of the panel) 
presiding.
    Present: Representatives Duncan, Hanna, Webster, Mullin, 
Nadler, Lipinski, Sires, and Hahn.
    Also Present: Representative Grimm.
    Mr. Duncan. If everyone will please take their seats, I 
want to first of all welcome everyone to this hearing, this 
field hearing before the Transportation and Infrastructure 
Committee's Panel on 21st-Century Freight Transportation.
    Before we begin, I would like to ask unanimous consent that 
Representative Michael Grimm be permitted to join the panel for 
today's hearing. Without objection, that will be so ordered.
    This special panel, as most of you know, was created by 
Chairman Shuster and Ranking Member Rahall of the 
Transportation and Infrastructure Committee to examine the 
current state of freight transportation in the United States 
and how improving freight transportation can strengthen the 
United States economy. We have been given special cross-panel 
jurisdiction to cover all the different panels of the 
committee. So we have a real opportunity to do something good 
or some good things with this panel.
    As I have said before, the purpose of the panel is to 
provide recommendations to the committee on ways to modernize 
the freight network and make the United States competitive in 
the 21st century. We have been working hard towards this goal, 
holding multiple hearings and roundtable discussions and 
visiting critical freight facilities in southern California and 
the Greater Memphis area, as well as here in New York and New 
Jersey.
    We have traveled here today because this region is one of 
the most important trade gateways in the entire country. What 
goes on here in the transportation field is important to 
everyone in this Nation. There are many facilities in this area 
that are very critical to the efficient movement of goods into, 
out of and around the Nation.
    The purpose of today's hearing is to examine freight 
transportation challenges in urban areas and how those issues 
resonate throughout the Nation's freight system. Freight 
transportation through urban areas is a complex endeavor and 
has a dramatic impact on the Nation's freight system for many 
reasons: congestion; ports and large freight facilities are 
often located in urban areas; the density of the population; 
the number of governmental entities present in each of these 
regions.
    We have an excellent panel of witnesses before us today. I 
am confident that they will be able to help us understand the 
unique freight transportation challenges facing urban areas and 
how those issues impact the rest of the Nation.
    I will introduce the witnesses in just a few minutes, but I 
would like to first introduce the panel. We have a good cross-
section on this panel. I have the privilege of serving as the 
Republican chair. The Democratic chair of this committee, the 
ranking member, is Jerrold Nadler from this city, and most of 
you know him.
    We have Richard Hanna, who represents a district that 
covers a pretty big area in upstate New York, around Syracuse. 
He represents Binghamton and many areas from upstate New York 
down to the Pennsylvania line.
    We have Congressman Dan Lipinski from Chicago, and we have 
Daniel Webster, who represents a part of Orlando in the suburbs 
of Orlando.
    We have Albio Sires, also from this area, who represents a 
district just across the Hudson. We have been over there some 
today. He represents Bayonne and part of Jersey City and some 
other places.
    We have Congressman Markwayne Mullin, who is from rural 
Oklahoma, representing a district that throughout history has 
been referred to as Little Dixie and once was the home of 
Congressman Carl Albert, who was the Speaker of the House at 
one point.
    I haven't done this intentionally, but we have saved the 
best for last, Janice Hahn, who is from southern California, 
and we visited her district. She represents the ports of Long 
Beach and Los Angeles and has many issues that we deal with in 
our committee.
    At this time, I would like to call on Congressman Nadler 
for his opening statement or any remarks he wishes to make.
    Mr. Nadler. Thank you, Mr. Chairman. Let me begin by 
welcoming everyone to New York, and thank you for holding this 
hearing in my district, this hearing on how freight 
transportation challenges in urban areas impact the Nation.
    Urban areas across the country share many common challenges 
such as congestion, limited space, dense population, pressure 
to commercially develop industrial land, and environmental 
justice concerns. But New York is unique in certain respects. 
New York and New Jersey never built a rail freight connection 
across the Hudson River, cutting off all of the population 
centers on the east side from the mainland rail transportation 
network. As a result, New York City, Long Island, Westchester, 
and southern Connecticut are completely dependent on trucks.
    There is an often-cited statistic that about 43 percent of 
intercity freight moves by rail in the United States. In our 
region, east of the Hudson, that figure is less than 1 percent. 
That means about 99 percent of all goods coming into the city 
come by truck, most of that, almost all of that across the 
George Washington Bridge.
    As we saw on our tour this morning, there is a small 
percentage of rail that travels by barge where we literally 
float the railcars across the harbor between New Jersey and 
Brooklyn. The rail barges provide a valuable service, but they 
really represent the latest and pinnacle of 19th-century 
technology. The barges are subject to the tides and the weather 
and are generally insufficient for moving large quantities of 
freight by rail. Since this is the committee's Panel on 21st-
Century Freight Transportation, I think that my colleagues will 
agree that this is an obvious place to start making 
improvements.
    Our region's complete dependence on trucks exacerbates all 
of the normal urban challenges New York City faces such as 
pollution, a disproportionate impact on low-income and minority 
communities, and a loss or degradation of underutilized rail 
transportation assets. But it also creates adverse impacts for 
the rest of the country. This bottleneck between northern New 
Jersey and New York causes congestion all along the I-95 
corridor. It increases the cost of doing business throughout 
the global supply chain, and it places an artificial lid on 
economic growth in one of the largest economic centers and 
consumer regions in the country.
    New York is also somewhat unique in that most freight 
movement in our region is a bi-state effort. So I am pleased 
that Port Authority Executive Director Pat Foye is here today. 
I want to thank him for the Port Authority's hospitality in 
hosting the panel's tour this week, and I look forward to his 
testimony.
    The Port Authority, along with FHWA, is currently 
completing the environmental impact statement for the Cross-
Harbor Freight Movement Project, which is looking at a number 
of alternatives for improving goods movement across New York 
Harbor. It is no secret that I believe the evidence will show 
that the preferred alternative will be to finally build a rail 
freight tunnel connecting Greenville Yard, New Jersey, which we 
visited this morning, to the Bay Ridge line in Brooklyn, a 
portal which we also visited this morning.
    The Port Authority was created in 1921 specifically for 
this purpose, so I look forward to Mr. Foye's update on this 
centuries-old project. We are about 100 years behind schedule, 
but thanks to the Port Authority's leadership and a strong 
partnership with the Federal Government, we are finally making 
progress.
    Of course, the $1 million, or perhaps the $1 billion, or 
perhaps the several hundred billion dollar question, is how do 
we pay for necessary freight improvements. While there are 
willing private partners, it will not be nearly enough to meet 
the immense needs all around the country. State and local 
governments cannot shoulder the burden alone, nor should they, 
when interstate commerce is inherently a Federal 
responsibility. We will have to commit Federal funding, or else 
we will continue to have plans and projects remain on the shelf 
while our economy sputters.
    It is my hope that through this panel we can offer some 
solutions to address the many freight bottlenecks across the 
country such as that which exists in New York City. Thank you 
again, Chairman Duncan, for holding this hearing today and for 
bringing the panel to New York. I look forward to hearing from 
the witnesses. Thank you.
    Mr. Duncan. Well, thank you very much, Mr. Nadler.
    It occurred to me that as I was telling everyone about all 
the districts that are represented here today, that I forgot to 
tell you that I am from Knoxville, Tennessee, a very popular, 
fast-growing area in east Tennessee.
    I did ask for unanimous consent, and it was granted, to 
allow our friend Michael Grimm to sit as a member of the panel 
today. I did not see that he had come in while I was 
introducing everybody, but we are certainly honored and pleased 
that Congressman Michael Grimm, who is from Staten Island, as I 
remember--is that correct? Staten Island is, what, about 80 
percent of your district?
    Mr. Grimm. Two-thirds.
    Mr. Duncan. Two-thirds, and the rest in Brooklyn.
    We are certainly pleased to have Congressman Grimm here.
    Does anyone else want to make an opening statement? Anyone 
else at all?
    All right. Well, we will move right on into the hearing.
    We have a very distinguished panel here today, starting 
with Mr. Patrick Foye, who is the executive director of the 
Port Authority of New York and New Jersey. We certainly 
appreciate the treatment that we have been given by the Port 
Authority during our time here.
    We have Mr. Bill Flynn, president and CEO of Atlas Air 
Worldwide Holdings.
    We have Gerry Coyle, who is the vice president for 
environmental and sustainable operations of the Evans Delivery 
Company.
    And we have Mr. Bill Goetz, who is head of the operations 
for CSX for New York City, New Jersey, and Philadelphia, and 
points in-between.
    Certainly, we are pleased to have all of you here today.
    And, Mr. Foye, we will let you begin.

    TESTIMONY OF PATRICK J. FOYE, EXECUTIVE DIRECTOR, PORT 
    AUTHORITY OF NEW YORK AND NEW JERSEY; WILLIAM J. FLYNN, 
  PRESIDENT AND CHIEF EXECUTIVE OFFICER, ATLAS AIR WORLDWIDE 
      HOLDINGS, INC.; GERARD J. COYLE, VICE PRESIDENT FOR 
   ENVIRONMENTAL AND SUSTAINABLE OPERATIONS, EVANS DELIVERY 
COMPANY, INC.; AND WILLIAM G.M. GOETZ, RESIDENT VICE PRESIDENT 
     FOR NEW YORK CITY, NEW JERSEY, AND PHILADELPHIA, CSX 
                      TRANSPORTATION, INC.

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