[Senate Hearing 114-91]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 114-91

                      IMPROVING THE PERFORMANCE OF
                      OUR TRANSPORTATION NETWORKS:
                        STAKEHOLDER PERSPECTIVES

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

                                HEARING

                               before the

                 SUBCOMMITTEE ON SURFACE TRANSPORTATION
                  AND MERCHANT MARINE INFRASTRUCTURE,
                          SAFETY AND SECURITY

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                            JANUARY 29, 2015

                               __________

    Printed for the use of the Committee on Commerce, Science, and 
                             Transportation

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       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
MARCO RUBIO, Florida                 CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
TED CRUZ, Texas                      RICHARD BLUMENTHAL, Connecticut
DEB FISCHER, Nebraska                BRIAN SCHATZ, Hawaii
JERRY MORAN, Kansas                  EDWARD MARKEY, Massachusetts
DAN SULLIVAN, Alaska                 CORY BOOKER, New Jersey
RON JOHNSON, Wisconsin               TOM UDALL, New Mexico
DEAN HELLER, Nevada                  JOE MANCHIN III, West Virginia
CORY GARDNER, Colorado               GARY PETERS, Michigan
STEVE DAINES, Montana
                    David Schwietert, Staff Director
                   Nick Rossi, Deputy Staff Director
                    Rebecca Seidel, General Counsel
                 Jason Van Beek, Deputy General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
       Clint Odom, Democratic General Counsel and Policy Director
                                 ------                                

      SUBCOMMITTEE ON SURFACE TRANSPORTATION AND MERCHANT MARINE 
                INFRASTRUCTURE, SAFETY AND SECURITY \1\

DEB FISCHER, Nebraska, Chairman      CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  CLAIRE McCASKILL, Missouri
KELLY AYOTTE, New Hampshire          AMY KLOBUCHAR, Minnesota
JERRY MORAN, Kansas                  RICHARD BLUMENTHAL, Connecticut
DAN SULLIVAN, Alaska                 BRIAN SCHATZ, Hawaii
RON JOHNSON, Wisconsin               EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  TOM UDALL, New Mexico
STEVE DAINES, Montana


  

    \1\ On March 3, 2015 the Committee finalized Member assignments for 
its subcommittees. The list below reflects March 3, 2015 assignments. 
When this hearing was held, on January 29, 2015, formal assignments had 
not yet been made.































                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on January 29, 2015.................................     1
Statement of Senator Fischer.....................................     1
Statement of Senator Blumenthal..................................     2
Statement of Senator Klobuchar...................................    39
Statement of Senator Booker......................................    41
    Report entitled ``An Analysis of Truck Size and Weight Phase 
      I--Safety''................................................    43
Statement of Senator Markey......................................    48
Statement of Senator Moran.......................................    51

                               Witnesses

James Mullen, Executive Vice President and General Counsel, 
  Werner Enterprises.............................................     5
    Prepared statement...........................................     6
Lance M. Fritz, President and Chief Operating Officer, Union 
  Pacific Railroad...............................................    14
    Prepared statement...........................................    16
Douglas Means, Executive Vice President and Chief Supply Chain 
  Officer, Cabela's..............................................    27
    Prepared statement...........................................    28
Hon. Edward Rendell, Co-Chair, Building America's Future.........    30
    Prepared statement...........................................    33

                                Appendix

Commercial Vehicle Safety Alliance (CVSA), prepared statement....    59
Letter dated February 12, 2015 to the Committee on Commerce, 
  Science, and Transportation, Subcommittee on Surface 
  Transportation from the National Association of Railroad 
  Passengers (NARP)..............................................    62
Ross B. Capon, Consultant, American Association of Private 
  Railroad Car Owners, prepared statement........................    62
Response to written question submitted to Douglas Means by:
    Hon. John Thune..............................................    63
    Hon. Kelly Ayotte............................................    64

 
                      IMPROVING THE PERFORMANCE OF
                      OUR TRANSPORTATION NETWORKS:
                        STAKEHOLDER PERSPECTIVES

                              ----------                              


                       THURSDAY, JANUARY 29, 2015

                               U.S. Senate,
         Subcommittee on Surface Transportation and
           Merchant Marine Infrastructure, Safety, and Security,   
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:04 a.m. in 
room SR-253, Russell Senate Office Building, Hon. Deb Fischer, 
presiding.
    Present: Senators Fischer [presiding], Wicker, Moran, 
Johnson, Gardner, Blumenthal, Klobuchar, Markey, and Booker.

            OPENING STATEMENT OF HON. DEB FISCHER, 
                   U.S. SENATOR FROM NEBRASKA

    Senator Fischer. Good morning. The hearing will come to 
order.
    I am pleased to convene the 114th Congress's first hearing 
of the Subcommittee on Surface Transportation and Merchant 
Marine Infrastructure, Safety, and Security, which we have 
titled ``Improving the Performance of our Transportation 
Networks: Stakeholder Perspectives.''
    It is an honor to serve as Chairman of this subcommittee, 
and I want to thank Chairman Thune and my colleagues for 
entrusting me with the responsibility to do so. Transportation 
safety and infrastructure development are issues that I care 
deeply about, and I am grateful for the opportunity to further 
engage on these matters.
    I look forward to working with all members of this 
committee in the 114th Congress on issues that I see as 
bipartisan and core to the role of the Federal Government.
    I would also like to acknowledge the hard work and 
achievement of Senators Blumenthal and Blunt, who served as 
Chair and Ranking Member of this subcommittee last Congress. 
They have laid a solid foundation and worked tirelessly 
together on this subcommittee with a degree of substance and 
attention to detail that is rarely seen.
    It is my hope to carry on the standard that these two 
Senators have set, and I look forward to working with our new 
Ranking Member when that person is announced. Senator 
Blumenthal will be serving in that position today.
    The goal of today's hearing is to explore ways in which to 
expand and improve the Nation's transportation networks.
    This subcommittee's broad jurisdiction stretches from 
transportation safety regulations to incentivizing and 
regulating infrastructure development. With such expansive 
authority comes great responsibility to govern appropriately.
    For too long, Washington-centric policies have impeded 
progress and frustrated citizens across this country. 
Repeatedly, I have heard from Americans who are dismayed by the 
Federal Government's tendency to tell communities, both large 
and small alike, what they will receive without ever asking 
what is needed. Nebraskans and all Americans deserve to have 
their voices heard when Congress considers how transportation 
policies will impact their states and their local communities.
    In the Nebraska Unicameral, I served as Chairman of the 
Transportation and Telecommunications Committee. My father also 
served as the Director State Engineer of the Nebraska 
Department of Roads, so transportation is in my blood. And I 
have seen how hard work, good policies, and a good attitude can 
lead to favorable results. Unfortunately, I have also witnessed 
the waste and harm that can result when proper oversight is not 
exercised.
    Congress should develop policies that address the unique 
challenges and the opportunities that have arisen across this 
Nation. These goals cannot be satisfied by a one-size-fits-all 
approach. Rather, input and consultation from a variety of 
stakeholders will be required to develop dynamic strategies to 
respond to these diverse circumstances.
    To that end, it is important that we include stakeholders 
from across the country in our decisionmaking process. Their 
varied and extensive expertise will be invaluable to this 
subcommittee.
    The panel before us today represents just a few of the many 
stakeholders from private industries. What these individuals 
lack in shared backgrounds they make up for in common 
interests--namely, fostering sensible policies that ensure the 
highest safety standards while also promoting economic growth.
    We have asked our witnesses to share their high-level views 
on transportation--what is working, what is not working, how we 
can improve, and how we can better prioritize our resources. It 
is also a chance for members of this committee to raise the 
issues that they care about, and I hope they will continue to 
do so throughout this Congress.
    I am optimistic that cooperation and consultation between 
the Federal Government and private enterprise will result in 
more effective and efficient policies.
    I would also now invite my colleague Senator Blumenthal to 
deliver some opening remarks.

             STATEMENT OF HON. RICHARD BLUMENTHAL, 
                 U.S. SENATOR FROM CONNECTICUT

    Senator Blumenthal. Thank you very, very much, Madam 
Chairwoman. Thank you for your interest and your passion on 
this subject, which I think is well-warranted by the challenge 
that we face as a country. None of the challenges faced by our 
Nation today are more important, long term, than the need to 
rebuild our critical infrastructure, whether it is roads, 
bridges, airports, and, of course, railroads.
    And we are fortunate to have with us this morning leaders 
in this industry and one of our Nation's very distinguished 
public servants, Governor Rendell, who knows better than anyone 
about the need to rebuild the infrastructure.
    Literally just yesterday, in Grand Central Station in New 
York, a train derailed. More than a minor inconvenience, this 
incident recalled the even more serious derailments that caused 
injuries and deaths over the past 2 years and reminded us that 
safety and reliability continue to be in question on our 
Nation's railroads and in our infrastructure.
    We face enormous challenges as a country to maintain trust 
and confidence in our railroads and in our roads and bridges. 
And I am enormously excited to continue on this subcommittee, 
even though I won't be its Ranking Member, because I think that 
it offers a forum and a means of creating even more momentum 
behind this cause.
    The fact of the matter is that passenger rail is a vital 
lifeline for this country, as is freight, in delivering people 
and goods and services. We have learned that the failure of a 
single bridge or the derailment of a single line can literally 
paralyze rail transportation up and down the East Coast. The 
outage of a single bridge in Norwalk, Connecticut, the Walk 
Bridge, can cripple passenger traffic, as well as freight, on 
the busiest railroad artery in the country. And that is why 
rebuilding those bridges and our roads and other critical 
infrastructure is absolutely critical.
    Resources will have to be devoted because that 
infrastructure is a critical prop for our entire economy. It is 
the foundation for the vital lifelines, economic lifelines, 
that are critical to our Nation. And so I look forward to 
supporting investment--and it is investment--it is not 
spending. It really is investment that is vitally important to 
making sure that trust and confidence is restored and 
sustained.
    That is ultimately the lesson of a derailment like the one 
that occurred yesterday. It threatens not only the movement of 
people to their homes and businesses, it threatens trust and 
confidence in the ability of that kind of lifeline to function 
well.
    So I look forward to today's testimony and to the 
continuing oversight and scrutiny that this subcommittee will 
impose. Because, ultimately, the task is not only one of 
private industry, it also is one of our government agencies--
the Federal Railroad Administration, the National 
Transportation Safety Board, etc.
    And the failure of those agencies to properly oversee what 
is happening on the rails and roads is, itself, a jeopardy to 
safety and reliability. What we have seen is a failure to 
implement more than 100 critical recommendations from the NTSB 
on rail safety. And part of our task on this subcommittee will 
be to make sure that we oversee and scrutinize what those 
critical government agencies do to make sure that trust and 
confidence is sustained and enhanced.
    Thank you, Madam Chairwoman. And I look forward to the 
testimony today.
    Senator Fischer. Thank you, Senator Blumenthal.
    With that, I would like to introduce our witnesses today on 
the panel.
    Mr. James Mullen is the Executive Vice President and 
General Counsel for Werner Enterprises.
    Werner is a member company of the American Trucking 
Association, and it is among the five largest truckload 
carriers in the United States. Based in Omaha, Nebraska, Werner 
was founded in 1956. It is a prime transportation and logistics 
company with coverage throughout North America, Asia, Europe, 
South America, Africa, and Australia.
    Mr. Mullen joined Werner Enterprises in 2006, and he is 
ultimately responsible for the safety and risk departments 
within his company.
    Mr. Lance Fritz is the President and Chief Operating 
Officer at Union Pacific Railroad, which is a Class I freight 
railroad headquartered in Omaha, Nebraska. As many of you know, 
Union Pacific links 23 states in the western two-thirds of the 
United States, providing freight solutions and logistics 
expertise to the global supply chain.
    Mr. Fritz has been responsible for operations, marketing, 
and sales, information technology, continuous improvement, 
supply, and labor relations at Union Pacific. As someone with 
such broad experience with the rail industry, Mr. Fritz is very 
familiar with UP's capabilities, safety and capital programs, 
and network planning.
    Mr. Douglas Means has served as the Chief--or is Executive 
Vice President and Chief Supply Chain Officer for Cabela's 
since April 2010.
    Cabela's is a Nebraska success story. It was founded around 
a kitchen table in 1961. Now headquartered in Sidney, Nebraska, 
Cabela's has become a global retailer of outdoor recreation 
merchandise, shipping its catalog to all 50 states and over 120 
countries.
    Mr. Means joined Cabela's after an 18-year career with 
Jones Apparel Group, and he is now responsible for overseeing 
Cabela's global supply chain.
    We see a pattern here.
    But we are also very, very pleased to welcome the Honorable 
Ed Rendell. He is Co-Chair of Building America's Future 
educational fund, which is a bipartisan coalition working to 
enhance our Nation's prosperity and quality of life through 
investment in infrastructure.
    As everyone here knows, Mr. Rendell served two terms as 
Pennsylvania's 45th Governor, from 2003 to 2011. Governor 
Rendell also served as the Mayor of Philadelphia and as 
District Attorney of the city. He is now lending his talent and 
energy to promoting Federal infrastructure support to keep the 
United States competitive with our global partners.
    We are pleased to welcome all of you here. We look forward 
to your testimony.
    And, Mr. Mullen, if you would begin, please.

STATEMENT OF JAMES MULLEN, EXECUTIVE VICE PRESIDENT AND GENERAL 
                  COUNSEL, WERNER ENTERPRISES

    Mr. Mullen. Chairman Fischer, members of the Subcommittee, 
thank you for the opportunity to testify today about the 
performance of our transportation networks and, more 
specifically, on ways to improve commercial motor vehicle 
safety.
    I am Jim Mullen, Executive Vice President and General 
Counsel for Werner Enterprises, which is one of the five 
largest truckload carriers in the United States and 
headquartered in Omaha, Nebraska.
    The trucking industry is justifiably proud of its 
commitment to safety. Together, Werner and approximately 
500,000 other carriers invest over an estimated $7 billion in 
safety annually. At Werner alone, we spend $40 million annually 
on safety, much of it on voluntary initiatives and crash-
prevention technology.
    As the industry continues to invest time and resources into 
safety, there has been a noted drop in the large truck fatality 
rate by 37 percent over the last decade. At Werner, preventable 
reportable crashes dropped 22 percent from 2007 to 2014. 
Contributing to this accomplishment are strategies that go 
beyond minimum regulatory requirements, including the use of 
driver training simulators and the adoption of onboard safety 
technologies.
    To continue this long-term trend requires a commitment on 
the part of the government and the industry to focus on the 
primary causes of crashes and effective countermeasures. The 
vast majority of crashes, close to 90 percent, are the result 
of driver error. It is quite logical, then, for FMCSA to focus 
on driver behavior and means to impact it.
    Now I would like to discuss some of the current regulatory 
issues impacting Werner and the industry.
    Electronic logging devices. In 2012, Congress mandated that 
FMCSA require the use of electronic logging devices, ELDs, to 
monitor hours-of-service compliance. Werner is a strong 
advocate of this mandate and was an early pioneer of ELD use. 
In 1998, Werner became the first motor carrier in the country 
to implement electronic logs. Though FMCSA is making progress 
on this issue, congressional oversight is still needed to 
ensure a timely final rule that includes reasonable 
requirements.
    The hours of service and the restart rule. Last month, 
Congress temporarily suspended the restart restrictions, 
pending additional FMCSA research. The GAO is also conducting a 
review of FMCSA's previous restart field study. Congress should 
provide close oversight of these studies and, if warranted, 
permanently vacate the restart restrictions.
    Entry-level driving training requirements. Requirements 
should be based on performance, not hours-based. No responsible 
trucking company has a place for drivers who have completed a 
minimum number of hours but have failed to master the necessary 
skills to safely operate a truck.
    Compliance, safety, and accountability, CSA. Werner 
supports the objectives of FMCSA's CSA program. However, we 
have serious concerns about CSA's ability to accurately 
identify the least safe motor carriers and the impact on safe 
motor carriers who are erroneously labeled otherwise.
    Issues with CSA that are of importance to Werner include 
the disparate enforcement amongst the states, the flaws in the 
mileage utilization factor, and flaws in the unsafe driving and 
the hazmat BASICs. All of these create an uneven playing field 
for certain motor carriers under CSA.
    Inaccurate scores can have serious implications. Werner is 
deeply bothered by FMCSA's use of crash data to measure fleet 
safety performance. Specifically, the CSA Safety Measurement 
System uses all crashes, including those that truck drivers 
neither caused nor could have prevented, to assess a carrier's 
performance. A truck driver who is the victim in a crash is 
scored the same as one who causes a crash.
    This is a significant point. At Werner, the most common DOT 
reportable crash involving a Werner truck is being struck from 
behind by another vehicle, yet that is scored the same as if we 
caused the accident. FMCSA has avoided correcting this issue 
for 5 years. Hence, Werner supports the industry's call and its 
legislative efforts to remove CSA scores from public view until 
necessary improvements are made.
    Last, I would like to comment on the infrastructure 
investment. A commitment to infrastructure investment is needed 
to provide for the safe and efficient flow of commerce and the 
foundation for economic growth. Congestion on the interstate 
system alone cost the trucking industry $9.2 billion in 2013 
and wasted more than 141 million hours. Further, congestion 
wastes fuel and increases the output of emissions. And last but 
certainly not of the least importance, sitting in traffic adds 
stress to drivers, which limits their compensation and leads to 
unsafe driving conditions.
    Werner Enterprises and the trucking industry have a strong 
commitment to safety and an impressive record to show for it. 
Continued improvement will require a focus on the primary 
causes of crashes, especially driver behavior, and incentives 
for the voluntary adoption of progressive safety programs.
    Werner looks forward to continue to work jointly with you, 
policymakers, FMCSA, and stakeholders to find innovative ways 
to fund and improve our transportation networks and commercial 
motor vehicle safety.
    Thank you again for the opportunity to share our industry's 
perspective this morning, and I look forward to answering any 
of your questions. Thank you.
    [The prepared statement of Mr. Mullen follows:]

   Prepared Statement of James Mullen, Executive Vice President and 
                  General Counsel, Werner Enterprises
Introduction
    Chairwoman Fischer, Members of the Subcommittee, thank you for the 
opportunity to testify today about the performance of our 
transportation networks and, more specifically, on ways to improve 
commercial motor vehicle safety. My name is Jim Mullen, and I am the 
Executive Vice President and General Counsel for Werner Enterprises, 
headquartered in Omaha, Nebraska. Founded in 1956, Werner is now among 
the five largest truckload carriers in the United States, with a 
diversified portfolio of transportation services that includes 
dedicated; medium-to-long-haul, regional and local van; expedited; 
temperature-controlled; and flatbed services. Werner also provides 
value-added services such as freight management, truck brokerage, 
intermodal, and international logistics.
    Madam Chairwoman, today I will speak about Werner's and the 
trucking industry's commitment to safety, our safety record, and 
measures we support to continue this long-term trend. I will also talk 
about opportunities that the Federal Motor Carrier Safety 
Administration (FMCSA) has to improve safety, the need to sharpen the 
agency's focus, and the unnecessary regulatory burdens that have been 
placed on Werner and companies like ours. Finally, I will touch briefly 
on the investment our country must place in its infrastructure to 
ensure the safe and efficient flow of commerce and much needed economic 
growth.
The Industry's Commitment to Safety
    The trucking industry is justifiably proud of its commitment to 
safety. Together, Werner Enterprises and the approximately five hundred 
thousand other carriers who comprise the industry invest over an 
estimated $7 billion in safety annually. At Werner alone we spend $40 
million on safety, some of it to meet a myriad of regulatory 
requirements, but much of it on voluntary, progressive safety 
initiatives. This includes the adoption of emerging crash prevention 
technology such as forward collision warning and lane departure 
devices. During 2015, Werner will spend an approximately $6.0 million 
on these systems, and approximately half of our fleet will be equipped 
with this technology.

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    These investments in safety have yielded impressive dividends for 
the industry. Over the past decade the number of large truck-related 
fatalities has dropped 21 percent and the large truck fatality rate has 
dropped 37 percent. At Werner, we have experienced a 22 percent 
decrease in preventable Department of Transportation (DOT) reportable 
crashes from 2007 through the end of 2014. We use 2007 as the baseline 
because a change in Werner's data systems in 2007 makes previous years' 
data unreliable.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Much of this improvement is due to progressive safety initiatives 
supported by Werner and fellow industry members. For example, in 
addition to the aforementioned crash prevention technologies, Werner 
has invested in state of the art driver training simulators, critical 
event recording, predictive modeling, and other items. It is the motor 
carrier's responsibility to put the professional driver in the best 
position to be as safe as possible. Technology, training, and placing 
safety as a company core value are vital to providing the driver with 
the tools and culture to drive safely.
Necessary Steps for Continued Improvement
    To continue this long term trend requires a commitment on the part 
of the government and industry to focus on the primary causes of 
crashes and effective countermeasures. The data on these factors are 
very clear and compelling; the vast majority of crashes, close to 90 
percent, are the result of driver error. It is quite logical, then, for 
FMCSA to focus on driver behavior and means to impact it. However, the 
agency's plans and priorities suggest a much different focus.
    For example, because speeding is the greatest single contributor to 
truck crashes, the industry petitioned FMCSA and the National Highway 
Traffic Safety Administration in 2006 to establish a rule requiring the 
use of speed limiters on all trucks over 26,000 lbs. Yet, to date, 
neither agency has issued a proposed rule to this end. We understand a 
proposal is in the works, but have yet to see it. The industry and 
FMCSA must work together to focus on efforts that have a direct impact 
on driver safety, as opposed to issues that may be driven by political 
or economic issues. We owe that to the motoring public.
    FMCSA's use of enforcement funding and resulting activity 
demonstrates a similar need to redirect the agency's focus. For 
example, FMCSA's Safety Program Effectiveness Measurement Report, shows 
that on-road traffic enforcement activity is far more effective at 
preventing future crashes than standard roadside inspection activity. 
The latter typically involves a vehicle inspection to detect component 
defects and a review of the driver's paper work (e.g., hours of service 
records of duty status) and credentials (e.g., license and medical 
examiner's certificate). The former, traffic enforcement, consists of 
on-road monitoring of driver behavior (e.g., moving violations) coupled 
with some form of inspection activity (e.g., a ``walk-around'' 
inspection of vehicle components).
    FMCSA's aforementioned report reflects that for every 1,000 traffic 
enforcements 12.05 crashes are prevented compared to 2.7 crashes per 
1,000 standard roadside inspections. Similarly, .41 lives are saved per 
1,000 traffic enforcements compared with only .09 lives per 1,000 
roadside inspections. In other words, traffic enforcements are more 
than four times more effective at preventing crashes and saving 
lives.\1\
---------------------------------------------------------------------------
    \1\ FMCSA Safety Program Effectiveness Measurement: Intervention 
Model Fiscal Year 2009, FMCSA, April 2013.
---------------------------------------------------------------------------
    The table below, taken from the FMCSA effectiveness report, shows 
the breakdown of crashes and injuries avoided and lives saved by 
roadside inspections and traffic enforcements respectively.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Given this compelling data, it is logical to place more emphasis on 
traffic enforcements than on roadside inspections. However, figures 
available on FMCSA's website indicate that traffic enforcements only 
comprise a small portion of field enforcement interventions (e.g., 10 
percent) and suggest that this percentage has been dropping over the 
past seven years. The agency should find this trend both alarming and 
compelling.
    FMCSA's program effectiveness document points out that the 
``evaluation provides FMCSA and State MCSAP partners with a 
quantitative basis for optimizing the allocation of safety resources in 
the field.'' This statement is true, but it appears as though FMCSA and 
its state partners have not actually used the evaluation for this 
purpose. If the agency and states had done so, we would have observed 
an increase in traffic enforcement activity, not a decline. This 
troubling decline begs the question: ``How many lives would not have 
been lost if FMCSA had devoted greater resources to traffic enforcement 
over the past several years?''
    Faced with this data, FMCSA recently announced its plan to train 
other law enforcement officers (e.g., municipalities)--not those funded 
under its commercial motor vehicle (CMV) enforcement program--to 
conduct traffic enforcement on large trucks. While we appreciate 
FMCSA's acknowledgement and the need to focus on driver behavior, their 
actions miss the mark. The training of non-CMV enforcement personnel 
appears to be an attempt to deflect the criticism of FMCSA's management 
of its CMV enforcement program. To be clear, the agency has not 
announced any steps to ensure that the funds spent in its Motor Carrier 
Safety Assistance Program (MCSAP) are used more efficiently by devoting 
a greater percentage of these funds to traffic enforcement.
    The plan to train non-CMV enforcement officers to conduct traffic 
enforcement on CMVs is flawed for a number of reasons. First, FMCSA's 
Program Effectiveness Report points out that traffic enforcement 
coupled with some vehicle inspection activity is four times more 
effective than vehicle inspection activity alone. The non-CMV officers 
conducting traffic enforcement will not be conducting vehicle 
inspections. Second, the traffic enforcement data (e.g., violations, 
citations) will not be captured and uploaded into FMCSA's Motor Carrier 
Management Information System, which feeds the agency's safety 
monitoring and measurement system. This is a critical flaw since 
FMCSA's research shows that data on driver behavior (e.g., moving 
violations) has the strongest correlation to crash risk and provides 
the best means for identifying unsafe fleets. Finally, training non-CMV 
officers to conduct CMV enforcement activity raises the strong 
potential that some time and resources will be shifted away from 
passenger vehicle enforcement as a result.
    In addition to focusing its research, regulatory, and enforcement 
programs on the primary cause of crashes, FMCSA should consider ways to 
promote voluntary safety initiatives embraced by the industry. Werner 
and other motor carriers like us have found that several emerging, non-
mandated, safety technologies hold tremendous promise for reducing 
crashes. However, the government lacks data on their efficacy given 
their relatively limited use. By providing incentives to fleets like 
ours to use such technologies, the agency can promote broader adoption 
and, as a result, gather data to better understand their safety 
benefits. FMCSA has indicated their interest and willingness to 
consider such incentives; we look forward to collaborating with the 
agency on future efforts to this end.
Views on Current Safety Issues
    I want to take this opportunity to offer the industry's views on a 
number of current safety issues, with the hope that Congress will 
provide greater oversight of them.
Electronic Logging Devices
    The most recent highway reauthorization legislation, Moving Ahead 
for Progress in the 21st Century Act (MAP-21), mandated that FMCSA 
complete a rulemaking to require the use of electronic logging devices 
(ELDs) to monitor hours of service compliance. Such a mandate is 
logical and appropriate. Previous FMCSA research has shown a strong 
correlation between compliance with the hours of service regulations 
(in place at the time, 2010) and safety outcomes. For this reason, the 
call for a mandate had broad support from industry, law enforcement, 
and consumer advocacy groups.
    Werner is a strong advocate of an ELD mandate and was an early 
pioneer of ELD use. In 1998, Werner became the first motor carrier in 
the country to implement electronic logs for recording drivers' work 
and driving hours. Six years later, in 2004, Werner became the first 
carrier granted an exemption by DOT from the requirement to complete 
and maintain paper records of duty status.
    Werner, like much of the industry, is pleased to see that FMCSA is 
making progress on this issue and is on track to issue a final rule 
later this year. However, Congressional oversight is still needed in 
this area. First, Congress should watch carefully to ensure that the 
publication of the final rule mandating ELDs is not further delayed. 
Though the MAP-21 deadline for this final rule was October of 2013, 
FMCSA does not project publication of it until the end of September, 
2015. Second, Congress should be alert to the potential that the rule 
could include some unreasonable requirements, especially with respect 
to the grandfathering of existing devices. It is important that early 
adopters of such devices should not ultimately be penalized for the 
investments they have made in safety by having their devices declared 
obsolete by regulation.
Entry Level Driver Training
    Werner and the trucking industry believe that the current CDL 
safety training requirements can be, in some instances, insufficient to 
properly prepare new drivers for the rigors of the road. At Werner, we 
hire a large number of drivers directly out of truck driving school and 
have very close relationships with the largest schools in the Nation. 
Therefore, we have first-hand knowledge of the current system's 
limitations. Werner and the trucking industry as a whole support an 
entry-level driver training rule. Such a rule should map to the safety 
skills all drivers should possess. Its requirements should be 
performance-based rather than hours-based. Neither Werner nor any other 
responsible trucking company has a place for drivers who have completed 
a minimum number of hours, but failed to internalize the necessary 
skills to safely operate a truck.
    A previous attempt at promulgating an entry-level driver training 
rule failed cost-benefit analysis and had to be withdrawn. Werner 
supports FMCSA's current proposed negotiated rulemaking process. It is 
the industry's hope that the process reaches a consensus 
recommendation, one which has benefits that exceed its costs.
Hours of Service
    In December 2011, FMCSA issued a final rule making changes to the 
hours of service regulations for truck drivers. This action on the part 
of the agency represents government overreach of the worst kind. 
Operating under the previous hours of service regulations, the number 
and rate of truck involved crashes, injuries, and fatalities all 
declined dramatically. Nonetheless, FMCSA elected to revise them.
    The result was a set of rules that were unjustified and harmful 
both to highway safety and the economy. In the rulemaking process, 
FMCSA acknowledged that the modest safety benefits of the changes would 
come nowhere near to offsetting their huge costs to productivity. To 
justify these revisions, the agency relied on the speculative theory 
that drivers working under the new rules would use additional off-duty 
time to get rest, would then become healthier, and would live longer 
lives as a result. By monetizing this theoretical benefit, and 
understating the negative economic impacts, FMCSA was able to convince 
the White House Office of Management and Budget that the new rules met 
the required cost-benefit test.
    Subsequent experience with the new hours of service rules 
demonstrated that FMCSA's estimate of the impact to drivers, trucking 
companies, and the economy was substantially off the mark. For example, 
FMCSA predicted that new restrictions it imposed on driver use of the 
hours of service weekly ``restart'' provision would result in a net 
societal benefit of $133 million. However, a subsequent analysis 
conducted by the American Transportation Research Institute, after the 
``restart'' restrictions went into effect, found that the rules were 
resulting in a net cost to the industry of between $95 million and $376 
million annually.
    One of the restrictions FMCSA imposed in July 2011 was that driver 
weekly ``restart'' rest periods must include two consecutive nighttime 
segments of 1-5 a.m. However, the results of Congressionally-mandated 
FMCSA research released in January of last year showed that drivers 
meeting this restriction were more likely to operate in the daytime 
when the risk of crashes is greater. FMCSA later admitted that it did 
not take this safety impact into account when the agency calculated the 
net safety benefits of the new rules.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    FMCSA Large Truck and Bus Factbook 2012, page 48, June 2014.
 
 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
 
    
    Assessment of the FMCSA Naturalistic Field Study 5 on Hours-of-
Service Restart Provisions, American Transportation Research Institute, 
Page 10, April 2014.

    Given this elevated risk of increased daytime traffic and the 
disparity between the real-world impacts of the rules and FMCSA's 
projected impacts, Congress recently suspended the ``restart'' 
restrictions pending additional research. The agency quickly began this 
research to meet a 12 month deadline. At the same time, the Government 
Accountability Office (GAO) is also conducting a review of FMCSA's 
previous ``restart'' field study. The industry sincerely hopes Congress 
provides close oversight of these studies and, unless they surprisingly 
demonstrate compelling reasons to the contrary, takes action to 
permanently vacate the ``restart'' restrictions that have been 
suspended only temporarily.
Compliance, Safety, Accountability
    Werner Enterprises, like much of the industry, strongly supports 
the objectives of FMCSA's Compliance, Safety, Accountability (CSA) 
program. Such a data-driven approach to identifying the least safe 
operators and targeting them for intervention is laudable. Further, a 
prioritization approach of this type is necessary, given FMCSA's 
limited resources and ability to audit only a small percentage of the 
industry each year.
    However, we have grave concerns about CSA's ability to accurately 
identify the least safe motor carriers, and the impact on safe motor 
carriers who are erroneously labeled otherwise. Many of Werner's 
concerns were highlighted by a GAO report, Modifying the Compliance, 
Safety, Accountability Program Would Improve the Ability to Identify 
High Risk Carriers.\2\ The study confirmed many shortcomings of the 
program including: a dearth of data which results in a great majority 
of motor carriers not being scored; a lack of a statistical correlation 
between the vast majority of regulatory violations and crash risk, and 
the fact that carriers' scores are often unreliable indicators of 
future crash risk. Moreover, GAO found that CSA is an imprecise tool 
that cannot accurately identify an individual fleet's crash risk, and 
until deficiencies are addressed, it is inappropriate to pursue a 
rulemaking to tie safety fitness determinations to CSA Safety 
Measurement System (SMS) scores. Issues with CSA that are of importance 
to Werner and other industry members also include the disparate 
enforcement among the states, the flaws in the mileage utilization 
factor to the detriment of fleets with teams and high productivity, and 
flaws in the scoring system in Unsafe Driving BASIC and Hazmat BASIC. 
All of these create an uneven playing field for carriers under CSA.
---------------------------------------------------------------------------
    \2\ Modifying the Compliance, Safety, Accountability Program Would 
Improve the Ability to Identify High Risk Carriers, Government 
(Washington, D.C.: Government Accountability Office, February 2014), 
http://www.gao.gov/assets/670/660610.pdf.
---------------------------------------------------------------------------
    These limitations are of great concern to the trucking industry 
because third parties (e.g., shippers, brokers, insurers, banks, etc.) 
use publicly available CSA SMS scores to make important business 
decisions. In these cases, inaccurate scores can have serious 
implications. As such, Werner supports the industry's call to remove 
CSA scores from public view until peer reviewed research confirms a 
strong statistical correlation between individual fleets' scores in 
each measurement category and future crash risk.
    Werner is also deeply bothered by FMCSA's use of crash data to 
measure fleet safety performance. Specifically, the CSA Safety 
Measurement System (SMS) uses all crashes, including those motor 
carriers neither caused nor could have prevented, to assess their 
safety performance. As a result, a truck driver who is the victim in a 
crash (e.g., rear-ended by a drunk driver) is scored the same as one 
who causes such a crash. This is significant, since the most common DOT 
reportable crash involving a Werner driver is being struck from behind 
by another vehicle.
    The trucking industry has long held that it is patently illogical 
to use obvious not-at-fault crashes to measure fleet safety 
performance. The ill-effect of doing so is two-fold. First, carriers 
involved in such crashes are erroneously labeled as being unsafe. 
Second, these carriers are then more likely to be targeted for agency 
interventions, a waste of FMCSA's limited enforcement resources.
    FMCSA has responded to this concern not by removing such obvious 
crashes from the system, but by conducting a multiyear study of the 
efficacy of using police accident reports (PARs) to make crash 
accountability determinations. Just recently, FMCSA released this 
report and contended that PARs were not sufficiently reliable for this 
purpose and that a process to make such crash accountability 
determinations would not be cost-beneficial.
    FMCSA issued the results of this study a full five years after the 
industry urged the agency to remove crashes where it is plainly evident 
that the truck driver did not cause the crash. For example, the 
American Trucking Associations suggested that FMCSA address crashes 
such as when a motorist driving the wrong way on a divided highway 
strikes a truck head-on, or when a passenger vehicle rear-ends a truck 
stopped at an intersection. Rather than taking the appropriate action 
to address these crashes, FMCSA is obfuscating the issue by conducting 
lengthy research on the ability to make determinations on all crashes. 
In addition, now that the research is complete, the agency is still not 
proposing any specific action, but soliciting suggestions for next 
steps, instead.
    Recognizing the inequity of scoring fleets based on crashes they 
did not cause, and how targeting fleets for enforcement action based on 
such crashes wastes Federal enforcement resources, Congress should take 
action. FMCSA should be required to immediately erect a process to 
remove from consideration those crashes where it was plainly obvious 
the truck driver did not cause the crash.
Infrastructure Investment
    Much like the rest of the industry, Werner is deeply concerned 
about the state of our national infrastructure. Underinvestment in the 
highway system has caused transportation arteries to deteriorate, 
producing significant inefficiencies for the trucking industry and 
disrupting supply chains. Congestion on the Interstate System alone 
cost the trucking industry $9.2 billion in 2013 and wasted more than 
141 million hours.\3\ This was equivalent to 51,000 drivers sitting 
idle for a full working year. Furthermore, congestion wastes fuel and 
increases the output of emissions. In addition, sitting in traffic adds 
stress to drivers and may limit their compensation, exacerbating the 
challenges associated with hiring and retaining employees.
---------------------------------------------------------------------------
    \3\ American Transportation Research Institute, Cost of Congestion 
to the Trucking Industry, April 2014.
---------------------------------------------------------------------------
    Interestingly, 89 percent of Interstate System congestion occurred 
on just 12 percent of the network,\4\ suggesting that focused attention 
on the most problematic locations can resolve much of the gridlock that 
plagues trucking companies and their drivers. To address this fact, the 
trucking industry recommends dedicating Federal revenue toward 
addressing major freight bottlenecks.
---------------------------------------------------------------------------
    \4\ Ibid.
---------------------------------------------------------------------------
    It is also important to note that highway congestion does not just 
affect truck deliveries. The intermodal movement of freight by 
railroads, barges, ships and aircraft often relies on trucks for part 
of the delivery. Any disruption to truck travel can severely affect the 
efficiencies of these other freight modes. Due to these 
interdependencies, the trucking industry has joined with other 
interested parties in a Freight Stakeholders Coalition. The coalition 
has released a platform of recommendations for reauthorization,\5\ many 
of which are of interest to this Committee. The coalition recommends 
establishment of a new multimodal freight fund outside of the Highway 
Trust Fund to address the many infrastructure challenges that hamper 
delivery of goods. In addition, the coalition believes that 
establishment of a freight office within the Office of the Secretary of 
Transportation would raise the profile of goods movement within DOT and 
help to coordinate efforts across modal administrations. Finally, the 
coalition believes that Congress should continue to encourage states, 
metropolitan planning organizations, and localities to develop freight 
planning expertise to address multi-modal freight mobility as part of 
their planning processes.
---------------------------------------------------------------------------
    \5\ https://www.intermodal.org/assets/private/
2014freightstakeholderscoalitionplatform.pdf
---------------------------------------------------------------------------
Summary and Conclusion
    Chairwoman Fischer, as I have explained, the trucking industry has 
a strong commitment to safety and an impressive record to show for it. 
Continued improvement will require a focus on the primary causes of 
crashes, especially driver behavior, and incentives for the voluntary 
adoption of progressive safety programs. It will also require close 
Congressional oversight of FMCSA's current activities. For instance, 
Congress should ensure that the final rule mandating ELD use is issued 
in a timely fashion. A future entry level driver training proposal must 
be reasonable, appropriate and effective. The agency's CSA SMS must be 
improved so that motor carriers' scores reliably and accurately reflect 
their safety performance and, until then, these scores should be 
removed from public view. Congress should carefully evaluate FMCSA and 
GAO studies of the hours of service rules and, unless the studies can 
demonstrate that the true net safety benefits outweigh the real 
impacts, permanently suspend the ``restart'' restrictions implemented 
in 2011. Finally, a commitment to infrastructure investment is needed 
to provide for the safe and efficient flow of commerce and a foundation 
for economic growth.

    Senator Fischer. Thank you, Mr. Mullen.
    Mr. Fritz?

  STATEMENT OF LANCE M. FRITZ, PRESIDENT AND CHIEF OPERATING 
                OFFICER, UNION PACIFIC RAILROAD

    Mr. Fritz. Thank you. Thank you, Chairman Fischer and 
members of the Subcommittee. Thank you for the opportunity to 
testify today about how to improve the performance of the 
transportation network.
    My written testimony goes into much more detail, but in 
just a few words, the best way to improve performance in the 
rail industry is to ensure we have policies that support 
safety, service, and efficiency. These three things---- safety, 
service, and efficiency--complement and are foundational to one 
another.
    Let me give you several examples of what I am talking 
about.
    First and foremost, our industry must be able to earn 
sufficient revenues that allow us to invest in and grow our 
infrastructure. This is really the key to everything. Unlike 
other transportation modes, we must build and maintain our own 
networks. This takes huge amounts of capital and more than any 
other industry as a percentage of revenue.
    At the same time, we are publicly traded companies that 
must provide a return to our shareholders that entices them to 
invest in our companies. The ability to make these investments 
allows us to improve safety, provide the service levels our 
customers demand, and create the efficiencies we need to ensure 
our economy is competitive on the world stage.
    Unfortunately, the Surface Transportation Board is 
considering proposals that would create a new economic 
regulatory scheme that would cap our rates and limit our 
revenues to some level set by regulation as part of a revenue 
adequacy proceeding.
    Those shippers who advocate this do so even though all the 
Class I railroads' average return on invested capital is below 
the average of companies in the S&P 500. Moreover, Union 
Pacific has allocated a larger portion of cash to capital 
expenditures than the average of companies in the S&P 500, and 
we lag these same companies in returning value to shareholders 
in the form of dividends and stock buybacks. Yet we must 
compete with these same companies for investment dollars.
    Capping returns would be a terrible mistake, as it would 
prevent us from being able to grow our networks, as our 
investors would seek other more favorable returns on their 
money. This would ultimately hurt all shippers and our 
country's economic vitality.
    Second, we must ensure we have fact-based safety 
regulation. Safety is of paramount importance to our industry 
and to Union Pacific. We are absolutely dedicated to safely 
serving our customers and communities. Our goal is that each 
and every one of our employees goes home safely and secure at 
the end of their shifts.
    An example of what I mean by ``fact-based safety 
regulation'' is proposals that require two people in the cab of 
a locomotive. There is no safety data to back this up. Commuter 
railroads and Amtrak only have one person in the cab. Now, 
Union Pacific is not attempting to go to one person in the cab, 
but someday technology may allow us to get to that, and we 
believe legislation or regulations that prevent us from using 
technology to become safer and more efficient would be a 
mistake.
    Another way to address safety in the rail industry is to 
get away from the command-and-control type of regulation that 
is in place today and, instead, adopt a performance-based 
regulatory system. This would empower the FRA and the railroads 
to drive down accidents and improve safety using best practices 
rather than a cookie-cutter approach.
    In order to meet our customers' demands and changing 
markets, environmental streamlining or permitting reform is 
also important. The amount of time and energy it takes to get 
projects from the drawing board to construction and completion 
is growing longer every day. Congress should look at ways to 
make this process work more quickly, and I outline some of 
those ideas in my written testimony.
    The last thought I want to leave you with is that we are a 
network, and because we are a network, actions in one place 
create ripples in another. We have seen this in the service 
issues our industry had experienced over the past year. 
Congestion or extreme weather in one place can cause impacts 
throughout the system.
    So when contemplating laws or regulations, policymakers 
shouldn't do things that balkanize the industry--that is, 
provide service requirements to one segment of customers that 
would happen if the STB implemented some form of forced access 
proposal, or have environmental or safety regulations in one 
area but not in another, as many states and localities would 
like you to do. That would be just a prescription for 
inefficiency and poor service.
    Again, thank you for the opportunity to testify, and I 
would be happy to answer any questions.
    [The prepared statement of Mr. Fritz follows:]

  Prepared Statement of Lance M. Fritz, President and Chief Operating 
                    Officer, Union Pacific Railroad
    On behalf of Union Pacific Railroad (UP) and the Association of 
American Railroads (AAR), thank you for the opportunity to appear 
before you today to discuss ways to improve the performance of 
America's freight transportation network.
    Union Pacific, like the other Class I freight railroads that 
operate in the United States, relies on its own funds, not taxpayer 
funds,to pay for its infrastructure, and the rail industry provides a 
critical link in the global supply chain. UP's 10,000 customers depend 
on us to deliver their products in a safe, reliable, and 
environmentally responsible manner.
    Serving 23 states over 32,000 miles in the western two-thirds of 
the country, we are proud to be part of a 140,000-mile U.S. freight 
rail network that is part of an integrated North American rail network 
that provides the world's safest, most productive, and most cost-
effective freight rail service. Union Pacific and other freight 
railroads work hard every day to help keep our Nation moving on the 
right track.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    There is a tremendous amount of strength and flexibility in our 
Nation's freight transportation systems--more so, in fact, than in any 
other country. It's also clear, however, that our Nation faces 
significant challenges in maintaining the freight-moving capability we 
have today and improving it to meet the even greater needs of tomorrow. 
Indeed, as America's economy and population grow, the need to move more 
freight will grow too. Forecasts vary--for its part, the Federal 
Highway Administration recently projected that total U.S. freight 
shipments will rise from an estimated 19.7 billion tons in 2012 to 28.5 
billion tons in 2040, a 45 percent increase (see Figure 2)--but it's 
clear that, as a nation, we need to prepare now.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    Union Pacific and America's other freight railroads are trying to 
do just that. Through massive, record private investments in 
infrastructure and equipment, the development and implementation of 
innovative technologies, and operational enhancements, we are working 
to help make sure that railroad performance meets our customers' 
current and future needs.
    Policymakers, including members of this committee, can help or 
hinder railroads in this effort. I respectfully suggest that you and 
other policymakers, when thinking about freight railroads, should keep 
foremost in mind the need for railroads to be able to earn enough to 
maintain their existing networks and create the substantial new 
capacity that will be needed to transport the additional freight our 
economy will generate in the years ahead. You should ensure that rail-
related regulation and legislation do not hinder railroads' ability to 
serve their customers as efficiently as possible. And you should work 
to make sure that railroad safety oversight is fact-based, rather than 
based on perceptions that upon closer inspection may not be well 
founded.
    At Union Pacific, our goal is to provide service to our customers 
that is as safe, efficient, and cost effective as possible. I know that 
other railroads share these goals. Below I will address some of the 
actions we think policymakers should take--and, just as importantly, 
steps policymakers should refrain from taking--to help make this 
happen. Taking these steps would serve the public good by providing our 
Nation's producers and consumers with a stronger, more capable 
transportation option.
Railroads Are the Transportation Backbone of America
    The public benefits associated with freight rail suggest that it is 
in the public interest for policymakers to enact policies that result 
in as much freight as possible moving by rail:

   America's freight railroads are privately owned and operate 
        almost exclusively on infrastructure that they own, build, 
        maintain, and pay for themselves. When railroads reinvest in 
        their networks--which they've been doing in record amounts in 
        recent years--it means taxpayers don't have to.

   Railroads are, on average, four times more fuel efficient 
        than trucks. That means that moving freight by rail helps our 
        environment by reducing energy consumption, pollution, and 
        greenhouse gases.

   Because a single train can carry the freight of several 
        hundred trucks--enough to replace a 12-mile long convoy of 
        trucks on the highways--railroads cut highway gridlock and 
        reduce the high costs of highway construction and maintenance.

   Thanks to competitive rail rates--42 percent lower, on 
        average, in 2013 than in 1980 \1\--freight railroads save 
        consumers billions of dollars every year, making U.S. goods 
        more competitive here and abroad and improving our standard of 
        living.
---------------------------------------------------------------------------
    \1\ Based on inflation-adjusted revenue per ton-mile.

   Railroads are safe and getting safer. Recent years have been 
        the safest in rail history. Preliminary data suggest that 2014 
---------------------------------------------------------------------------
        saw the lowest train accident rate in history.

   America's freight railroads sustain 1.2 million jobs, 
        including 180,000 high-paying jobs in the freight rail industry 
        itself. Millions of other Americans work in industries that are 
        more competitive in the global economy thanks to the 
        affordability and productivity of America's freight railroads.

    Of course, no one, and certainly not railroads, disputes that motor 
carriers (and other freight transportation modes, for that matter) are 
indispensable to our economy and quality of life, and will remain so 
long into the future. But because of the enormous cost involved in 
building new highways, as well as environmental and land use concerns, 
it is highly unlikely that sufficient highway capacity can be built to 
handle expected future growth in freight transportation demand.
    Fortunately, freight rail represents a viable and socially 
beneficial complement to highway freight movement. This does not mean 
we should stop building highways or that we should no longer recognize 
the importance of trucks and highways, but it does mean that 
policymakers should be doubly aware of the role railroads can play in 
providing the freight transportation our Nation needs.
Investing for the Future
    As noted above, as America's economy and population grow, the need 
to move more freight will grow too. All transportation modes have key 
roles to play. But whereas trucks, airlines, and barges operate mainly 
on highways, airways, and waterways that are publicly funded, Union 
Pacific and America's other freight railroads are privately owned and 
operate overwhelmingly on infrastructure that they own, build, 
maintain, and pay for themselves.\2\ From 1980 to 2014, U.S. freight 
railroads spent $575 billion--of their own funds, not government 
funds--on capital expenditures and maintenance expenses related to 
locomotives, freight cars, tracks, bridges, tunnels and other 
infrastructure and equipment. That's more than 40 cents out of every 
revenue dollar. In recent years, despite the recession, freight 
railroads have been spending more than ever before, an estimated $26 
billion in 2014 and, mostlikely, even more in 2015--back into a rail 
network that keeps our economy moving (see Figure 3).
---------------------------------------------------------------------------
    \2\ A few small railroads are owned by port authorities, economic 
development agencies, or other governmental entities. The Alaska 
Railroad is owned by the state of Alaska.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    One of the reasons railroads reinvest so much is that railroading 
is among the most capital-intensive of all industries. The average U.S. 
manufacturer spends about 3 percent of its dsrevenue on capital 
expenditures. The comparable figure for Union Pacific and other U.S. 
freight railroads is around 18 percent, or about six times more. As 
members of this committee are well aware, building and maintaining an 
infrastructure network is very expensive whether done with public or 
private funds.
    Because U.S. freight railroads are overwhelmingly privately owned 
and must finance the vast majority of their infrastructure spending 
themselves, these investments are accompanied by substantial financial 
risk. Back in 2006, the Government Accountability Office correctly 
noted that, ``Rail investment involves private companies taking a 
substantial risk which becomes a fixed cost on their balance sheets, 
one on which they are accountable to stockholders and for which they 
must make capital charges year in and year out for the life of the 
investment. A railroad contemplating such an investment must be 
confident that the market demand for that infrastructure will hold up 
for 30 to 50 years. This is in sharp contrast to other modes such as 
highway infrastructure, which is paid for largely by public funds.'' 
\3\
---------------------------------------------------------------------------
    \3\ Government Accountability Office, Freight Railroads: Industry 
Health Has Improved, but Concerns About Competition and Capacity Should 
Be Addressed, October 2006, p. 56.
---------------------------------------------------------------------------
    Accordingly, at Union Pacific, as at other railroads, capacity 
investments must pass appropriate internal railroad investment hurdles. 
That means that investments will be made only if they are expected to 
generate an adequate return over a long period of time. For this 
reason, adequate rail earnings--again, over the long term--are critical 
for capacity investment. As the Congressional Budget Office (CBO) 
noted, also in 2006, ``As demand increases, the railroads' ability to 
generate profits from which to finance new investments will be 
critical. Profits are key to increasing capacity because they provide 
both the incentives and the means to make new investments.'' \4\
---------------------------------------------------------------------------
    \4\ Congressional Budget Office, Freight Rail Transportation: Long-
Term Issues, January 2006, p. 11.
---------------------------------------------------------------------------
    The GAO's and CBO's comments are just as valid today as they were 
when first made. If Union Pacific or any other railroad is not 
financially sustainable over the long term, it will not be able to make 
capacity investments to maintain its existing network in a condition to 
meet reasonable transportation demand, or make additional investments 
in the replacement or expansion of infrastructure required by growing 
demand.
    Major freight railroads face additional constraints because they 
are either publicly traded or are subsidiaries of publicly traded 
companies. As such, they must provide their shareholders a return 
commensurate with what those shareholders could obtain in other markets 
with comparable risk. I spend a considerable amount of my time 
interacting with members of the investment community, and I can tell 
you that they are well aware that no law or regulation can force 
investors to provide resources to an industry whose returns are lower 
than what the investors can obtain elsewhere. If railroads are viewed 
as returning less to shareholders, for whatever reason, than comparable 
alternatives, then capital will flee the rail industry or will only be 
available at much higher costs than we see today, as evidenced by the 
cost of capital to the rail industry in the recent past when our 
financial performance was much less robust. The capital markets will 
have it no other way.
    These points--that railroads must be able to earn sufficient 
revenue that we can invest in and grow our networks, and that, as 
public companies, we must provide our shareholders with a return that 
will entice them to invest their money with us--are foundational. The 
ability to invest in our networks allows us to improve safety, provide 
the levels of service that our customers demand, and create the 
efficiencies we need to help ensure that our economy is competitive in 
global markets.
    Now, it is true that freight railroad financial performance in 
recent years has been much improved compared to earlier years. I'm 
proud that, at Union Pacific, we announced last week that 2014 saw 
record operating revenue and operating income. But statements about 
railroads' ``record profits'' often ignore the fact that, until 
recently, rail profitability was generally relatively poor. Thus, an 
improvement from earlier years may be a ``record,'' yet may still be 
only about average compared with the earnings achieved by most of the 
other industries against which railroads compete for capital.
    Just one example to illustrate this point: return on equity (ROE) 
is a well-known measure of profitability. It reveals how much profit a 
company generates with the money shareholders have invested. Figure 4 
shows that the ROE for the rail industry has much improved over the 
past few years, but is still only about average compared to the Fortune 
500.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Make no mistake, Union Pacific is encouraged by our improvements in 
our financial condition in recent years, and by the rail industry's 
overall progress. At Union Pacific, we will continue to work very hard 
every day to see that those improvements continue so that we can return 
more value to our shareholders. But it would be a tremendous mistake 
for policymakers to view these improvements as a reason to cap rail 
earnings through price controls, artificial competitive constraints, or 
by other means. This would cause capital to flee the industry and 
severely harm railroads' ability to reinvest in their networks. Figure 
5 shows that, as rail industry profitability has risen in recent years, 
so has our spending back into our networks. You can't have one without 
the other. Indeed, if the American freight railroad industry is to 
fully deliver its potential benefits to the economy, its current 
financial performance should only be regarded as one step along the 
path toward sustainability, not as a final destination.


[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    At a time when the pressure to reduce government spending on just 
about everything--including transportation infrastructure--is enormous, 
it makes no sense to enact public policies that would discourage 
private investments in rail infrastructure that would boost our economy 
and enhance our competitiveness. Improvements in rail profitability 
reflect the fact that the current system of rail regulation is working. 
After all, long-term sustainability through higher earnings is 
precisely what Congress meant for railroads to achieve when it passed 
the Staggers Act in 1980.
The Need for Efficiency
    America's freight railroads, along with their Canadian 
counterparts, are the most productive and efficient in the world, and 
their productivity has skyrocketed since the Staggers Act instituted a 
system of balanced regulation in 1980. Today, U.S. railroads generate 
approximately double the freight volume they had in 1980, but they use 
far fewer miles of track, employees, locomotives, and gallons of fuel. 
These efficiency gains have largely been passed on to rail customers in 
the form of lower average rates--as mentioned earlier, down an average 
of 42 percent from 1980 through 2013 in inflation-adjusted terms.
    Future rail efficiency gains will require continued significant 
expenditures on infrastructure and equipment (including large amounts 
of new capacity) and innovative new technologies, but they will also 
require appropriate public policies.
    For example, the need for efficiency helps explain why railroads 
strongly oppose efforts to reverse existing policy under which the STB 
must first find that a railroad serving a terminal area is engaged in 
anti-competitive conduct before the STB can order the railroad to 
``switch,'' or interchange, traffic to another railroad when such an 
interchange is not necessary for freight delivery. Adding an 
interchange to a movement that is currently handled in single-line 
service adds substantial time, complexity, and costs to that movement. 
Over the years, railroads have invested tens of billions of dollars and 
enormous effort into concentrating traffic onto routes that are the 
most efficient for rail customers as a whole; part of this effort has 
been the development of very efficient and streamlined terminal 
switching. The result? Sharply higher productivity, reliability, and 
asset utilization, and lower freight rates for most rail customers. 
Forced reciprocal switching would destroy these terminal efficiencies, 
compromise the service improvements they have created for rail 
customers, and raise rail costs. The added switching activity that 
would be required, the increased possibility of service failures caused 
by that new switching activity, and the complex operations that would 
be required to bring about the new interchanges would disrupt rail 
traffic patterns, produce congestion in rail yards, and undermine 
efficient service to customers.\5\
---------------------------------------------------------------------------
    \5\ For more on reciprocal switching, see https://www.aar.org/
BackgroundPapers/Reject%20
Calls%20For%20Mandatory%20Reciprocal%20Switching.pdf.
---------------------------------------------------------------------------
    Likewise, one of the major reasons why railroads oppose changes in 
existing ``bottleneck'' policy at the STB is the sharply negative 
effect such changes would have on the efficiency of rail operations.\6\ 
Requiring ``bottleneck'' service on demand could substantially change 
the physical routing of rail cars, forcing railroads to use routes and 
connecting points chosen by shippers, rather than by the railroads 
themselves. If bottleneck policy were reversed, efficiency and 
predictability would be lost, with potentially negative effects on rail 
safety as well. Rail traffic could by forced through little-used and 
physically inadequate connections and rail lines. Railroads would have 
to make costly new investments to support the new routings (at the 
expense of investments in more deserving areas), yet shippers could 
change their minds about those routes on a whim.
---------------------------------------------------------------------------
    \6\ In ``bottleneck'' situations, one railroad can move freight 
from an origin to an intermediate point, and from that intermediate 
point on to a final destination, and at least one other railroad can 
also move the freight from that intermediate point to the final 
destination. For a more detailed explanation of the bottleneck issue, 
see: https://www.aar.org/BackgroundPapers/Bottle
neck%20Policy%20%20Dont%20Fix%20What%20Isnt%20Broken.pdf.
---------------------------------------------------------------------------
    Changes to existing terminal switching and bottleneck policies 
would introduce an enormous amount of uncertainty into the rail system. 
Over the years, we've been working extremely hard to remove uncertainty 
from the rail system, because it detracts so much from the provision of 
reliable and cost effective service. Adding more can't possibly help 
railroads improve the performance of their networks, especially as 
railroads face increasing capacity constraints due to higher volumes 
associated with economic growth and changing shipping patterns.
    The need for efficiency also helps explain why railroads oppose a 
variety of other proposals that have been proffered in recent years, 
including (but not limited to) forcing railroads to prioritize certain 
types of traffic over other types, the imposition of speed limits on 
certain types of traffic that are not necessary from a safety 
standpoint, and local bans on the transport of certain commodities in 
certain areas. When considering these and similar proposals, 
policymakers should take great care in weighing the supposed benefits 
of the proposals with the substantial harm they would cause to railroad 
efficiency and, consequently, to our Nation's economic well-being. It's 
also crucial that policymakers remember that railroads are integrated 
and interconnected networks: what happens in one location could easily 
have ramifications in locations hundreds or even thousands of miles 
away.
Fact-Based Safety Regulation
    For our Nation's railroads, including Union Pacific, pursuing safe 
operations is not an option, it's an imperative. We have an obligation 
to operate safely for the benefit of our employees, our customers, and 
the communities we serve. The rail industry's strong and pervasive 
commitment to safety is reflected in its excellent safety record. In 
fact, as Figure 6 shows, recent years have been the safest in history 
for railroads. Preliminary data indicate that railroads had the lowest 
train accident rate in history in 2014.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    Virtually every aspect of rail operations is subject to strict 
safety oversight by the Federal Railroad Administration (FRA). Among 
many other areas, railroads are subject to FRA regulation regarding 
track and equipment inspections; employee certification; allowable 
operating speeds; and the capabilities and performance of signaling 
systems. Hundreds of FRA personnel perform regular inspections of rail 
facilities and operations throughout the country, and in many states, 
FRA safety inspectors are supplemented by state safety inspectors.
    It makes no financial sense to operate an unsafe railroad, so even 
if the FRA did not exist, I submit to you that railroads would have 
very strong incentives to operate safely. That said, railroads agree 
that some level of rail safety regulation is necessary--reasonable 
people can disagree over what that level should be--if for no other 
reason than to instill public confidence in the safety of railroads. 
But I also submit that, whatever the level, it is critical that rail 
safety oversight should be well grounded in evidence-based, scientific 
understanding, rather than in unsubstantiated claims or perceptions.
Two-Person Crews
    The current debate over the number of crew members inside a freight 
train's locomotive cab is a case in point. Legislation has been 
proposed that would mandate that all over-the-road freight trains must 
operate with a certified locomotive engineer and a certified conductor 
in the locomotive cab. Railroads respectfully, but strongly, oppose 
this legislation.
    Existing FRA regulations do not mandate minimum crew staffing 
requirements. Some non-Class I railroads have long operated with just 
one person in the locomotive cab, and thousands of Amtrak and commuter 
passenger trains, carrying hundreds of thousands of passengers, operate 
every day with just one person in the locomotive cab. On Union Pacific 
and other Class I railroads, the subject of crew size has typically 
been addressed as part of the collective bargaining process with rail 
labor. For Class I railroads, industry practice to date has been to 
have two-person crews (and in a few areas three-person crews) for over-
the-road mainline operations. That said, it is important for Class I 
railroads to retain the flexibility to seek agreement with labor, at 
the appropriate time, to operate over-the-road mainline trains with one 
crew member.
    The major reason offered by proponents of a two-person crew mandate 
is that it would enhance rail safety. Yet no one--not the FRA, not 
sponsors of the legislation in Congress, not rail labor--can point to 
hard data that support this contention. In fact, an AAR review of the 
FRA train accident database going back many years can find no evidence 
that trains with oneperson crews have accidents at a higher rate than 
trains with two-person crews. Put another way, there is no demonstrated 
correlation between the number of crew members in the cab and train 
safety. The FRA itself, after its own review, stated in 2009 that it 
found no ``factual evidence to support the prohibition against one-
person operations.'' \7\
---------------------------------------------------------------------------
    \7\ From a 2009 FRA letter rejecting a rail labor request to 
prohibit one-person crews.
---------------------------------------------------------------------------
    Railroads believe that the forthcoming implementation of positive 
train control (PTC) potentially presents an opportunity to move to one-
person crews with no degradation of safety. PTC describes technologies 
designed to automatically stop a train before certain accidents caused 
by human error occur. Specifically, the Rail Safety Improvement Act of 
2008 (RSIA) mandates that railroads' PTC systems must be designed to 
prevent train-to-train collisions, derailments caused by excessive 
speed, unauthorized incursions by trains onto sections of track where 
maintenance activities are taking place, and the movement of a train 
through a track switch left in the wrong position.\8\
---------------------------------------------------------------------------
    \8\ In this context, a switch is equipment that controls the path 
of trains where two sets of track diverge.
---------------------------------------------------------------------------
    When fully operational, railroads' PTC systems will be able to 
determine the precise location, direction, and speed of trains; warn 
train operators of certain potential problems; and take immediate 
action if the operator does not respond to the warning provided by the 
PTC system. For example, if a train operator fails to begin stopping a 
train before a stop signal or slowing down for a speed-restricted area, 
the PTC system would apply the brakes automatically before the train 
passed the stop signal or entered the speed-restricted area.\9\ As 
such, PTC advances rail safety through the use of advanced technology, 
while at the same time eliminating any need for ``a second set of 
eyes'' in locomotive cabs.
---------------------------------------------------------------------------
    \9\ For more detail on PTC, see the June 19, 2013 testimony of 
Edward Hamberger, President and CEO of the Association of American 
Railroads, to the Senate Commerce Committee.
---------------------------------------------------------------------------
    Neither Union Pacific nor other Class I railroads seek the ability 
to impose one-person crews unilaterally or haphazardly. Rather, we seek 
the flexibility to continue to work with rail labor under the existing 
collective bargaining framework to identify when the presence of PTC 
allows a reduction in the number of crewmembers in a locomotive cab 
without jeopardizing rail safety. It is very clear to me, as it is to 
my industry colleagues, that it is in no one's best interest--certainly 
not a railroad's--to take steps that degrade safety.
Safety Performance Standards
    Moving beyond one particular safety-related issue, I respectfully 
suggest that it's time to consider a change in the broad focus of rail 
safety oversight.
    There are two general approaches to workplace safety regulation. 
The first, so-called ``design-based standards,'' is the method most 
commonly used by the FRA. Design-based standards specify the precise 
characteristics of workplace facilities, equipment, and processes a 
firm must use in the manufacture and delivery of its product or 
service. For example, the FRA regulation mandating the interval between 
certain types of locomotive inspections is a designbased standard.
    ``Performance-based standards,'' on the other hand, define the 
desired result rather than mandating the precise characteristics that a 
workplace must exhibit. The point of a performancebased goal is to 
focus attention and effort on the outcome, not the method.
    Some of the old regulations would be replaced under a performance 
standard regime. That said, risk-based performance standards are a 
reform, not an abandonment, of safety regulation. Railroads would 
remain accountable. Except in emergencies or after continued failure to 
meet targets, the FRA would no longer specify how a railroad would 
achieve its safety goals. Instead, the FRA would oversee and validate 
the goal-setting process, ensure that the measures and data used are 
accurate, and impose any necessary sanctions. The use of performance 
standards would recognize that railroads and their employees are in the 
best position to know how to improve safety and reduce the costs of 
injuries and accidents.
    There is little evidence that rigid design-based standards have a 
positive impact on railroad safety. They are, however, very costly for 
both railroads and the FRA to administer and maintain. They also tend 
to impede innovation because they ``lock in'' existing designs, 
technology, and ways of thinking. Reliance on a performance-based 
approach would allow the FRA the best opportunity to ensure the 
attainment of desired safety rates at lower cost for the FRA as well as 
for railroads.
    Performance standards have been encouraged elsewhere in the U.S. 
government. For example, the 1990 Amendments to the Clean Air Act 
directed electric utilities to limit their emissions of sulfur dioxide 
and nitrogen oxide, but did not tell the utilities how to meet those 
standards. In the area of meat and poultry inspection, scientific 
practices for identifying and reducing microbial contamination have 
partly displaced strict regulations that prescribe in detail how food 
safety objectives are to be achieved. The National Highway Traffic 
Safety Administration (NHTSA) sets and enforces safety performance 
standards for motor vehicles and equipment, and the Pipeline and 
Hazardous Materials Safety Administration (PHMSA) has developed and 
issued regulations that address risk analysis and integrity management 
programs for pipeline operators that largely utilize a performance 
standard process.
Capacity Enhancement Through Permitting Reform
    Under existing law, state and local regulations (other than local 
health and safety regulations) that unreasonably interfere with freight 
rail operations are preempted by Federal regulations. These Federal 
regulations protect the public interest while recognizing that freight 
railroads form an integrated, national network that requires a uniform 
basic set of rules to operate effectively.
    Nevertheless, rail expansion projects often face vocal opposition 
from members of affected local communities or even larger, more 
sophisticated special interest groups from around the country. In many 
cases, railroads face a classic ``not-in-my-backyard'' problem, even 
for projects for which the benefits to a locality or region far 
outweigh the drawbacks. This means that the amount of time and energy 
it takes to get projects from the drawing board to construction and 
completion is growing longer every day.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

    In the face of local opposition, railroads try to work with the 
local community to find a mutually satisfactory arrangement, and these 
efforts are usually successful. When agreement is not reached, however, 
projects can face lawsuits, seemingly interminable delays, and sharply 
higher costs.
    A number of major rail intermodal terminal projects that yield 
tremendous gains for the overall logistical system, for example, have 
been and continue to be unduly delayed. Just one of the many examples 
involves the modernization and expansion of an intermodal terminal UP 
has been planning for years in San Joaquin County, California. UP 
participated in reviews of projected environmental benefits and less 
favorable impacts of the project in a process following California's 
Environmental Quality Act (CEQA) guidelines with the county. CEQA is 
the California statute that is very similar to the National 
Environmental Policy Act (NEPA), requiring transparency and public 
participation in certain projects. Unlike NEPA, CEQA requires 
mitigation of environmental impacts. UP and the county, with input from 
other agencies, identified suitable mitigation of the unfavorable 
impacts. However, even though the county has been a proponent of the 
project and UP has now obtained its permit, delays resulting from 
various agencies' lack of resources or outright challenges have stalled 
UP's progress and ultimately required UP to postpone its investment in 
this facility.
    Some of the ways that policymakers can streamline rail-related 
environmental permitting include:

   Extend environmental review provisions of MAP-21 to 
        railroads. MAP-21 contains a number of provisions to facilitate 
        the construction of transportation projects, such as timelines, 
        but the relevant statute is written in a way that excludes rail 
        projects.

   The U.S. Department of Transportation (DOT) should have a 
        single, uniform set of categorical exclusions. A uniform set of 
        categorical exclusions for all DOT agencies would lead to 
        better coordination of project review.

   Extend highway exemption in Section 106 of the National 
        Historic Preservation Act to railroads. In 2005, the DOT 
        generally exempted Federal agencies from the Section 106 
        requirement of having to take into account the effects of their 
        undertakings on the interstate highway system. This exemption 
        should be extended to rail rights-of-way.

    Railroads are not asking policymakers to allow railroads to 
wantonly harm the environment. They do want policymakers to help 
improve the movement of freight by taking steps to shorten the time it 
takes for reviews of rail expansion projects in ways that do not 
adversely affect the quality of those reviews.
Extending the Statutory Deadline for Positive Train Control
    I spoke earlier in this testimony about the potential for positive 
train control to help ensure that a train will be able to be safely 
operated with one person in the locomotive cab. Before that day comes, 
however, railroads must finish developing and installing PTC systems on 
their networks.
    Frank Lonegro from CSX provided testimony to the full Senate 
Commerce Committee yesterday on PTC. I won't repeat everything he said 
here. For the purposes of this testimony, I simply want to reiterate 
his point about the need to extend the existing December 31, 2015 
statutory deadline regarding PTC implementation.
    As Mr. Lonegro stated, freight railroads have been working 
tirelessly, and spending tremendous amounts of money, to meet the PTC 
mandate. As of the end of 2014, UP has invested more than $1.5 billion 
on PTC, and we expect to spend close to $400 million this year. Our 
current estimate for the total cost of PTC on our railroad is 
approximately $2 billion.
    Despite these huge expenditures, PTC's complexity means that more 
time is needed so that a logical plan for sequencing PTC's 
implementation can be instituted. Under the existing statute, however, 
there are no provisions that allow for a phased roll out, including 
comprehensive testing, of the technology. That's an extremely risky 
approach. In the technology world, major technology projects typically 
involve ``beta versions'' or their equivalent in which the technology 
is introduced in a deliberate fashion so that the inevitable bugs are 
identified and addressed. We need that for PTC. Adjusting the 
implementation deadline would more accurately reflect railroads' 
tremendous efforts to design, install, and properly test this 
incredibly complex technology.
    The freight railroad industry is fully committed to PTC, but it 
must be done correctly and we must make absolutely certain that the 
system will work as it should. That's simply not possible by the end of 
this year.
Conclusion
    America today is connected by the best freight rail system in the 
world. Looking ahead, our Nation cannot prosper in an increasingly 
competitive global marketplace if we do not maintain our best-in-the-
world freight rail system.
    That's why we cannot afford to be complacent. To be viable and 
effective, especially in the face of projected increases in freight 
transportation demand over the next 20 years, railroads must be able to 
both maintain their existing infrastructure and equipment and build the 
substantial new capacity required to handle the additional traffic they 
will be called upon to haul. They must be allowed to find the most 
efficient ways possible to meet their customers' needs. And they must 
use the best possible techniques and processes to ensure that rail 
safety continues to improve.
    I'm sure I speak for the other freight railroads when I say that we 
will continue to work with you, other policymakers, our employees, our 
customers, and others to ensure that America's freight railroads retain 
their best-in-world status.

    Senator Fischer. Thank you, Mr. Fritz.
    Mr. Means?

STATEMENT OF DOUGLAS MEANS, EXECUTIVE VICE PRESIDENT AND CHIEF 
                 SUPPLY CHAIN OFFICER, CABELA'S

    Mr. Means. Chairman Fischer and members of the 
Subcommittee, thank you for inviting me to testify before you 
today.
    My testimony will specifically address some of the 
challenges Cabela's experiences today in today's supply chain 
and suggests some solutions to ensure that our nation's 
transportation system remains reliable and efficient for the 
movement of goods.
    Shippers are facing a unique set of challenges in today's 
climate. Managing inventory and operating a just-in-time 
network is essential to the health of any retailer and requires 
a predictable and efficient transportation network. When the 
efficient system fails to exist, significant costs are added to 
the supply chain. These actual costs also impact the selection 
of gateways to the U.S. and decisions on the locations of 
domestic distribution centers.
    As we make significant long-term investments in our own 
facilities, there must be an assumption that the transportation 
infrastructure will support those decisions far into the 
future. Presently, Cabela's and many of our suppliers are 
experiencing a number of inefficiencies as a result of the 
infrastructure not keeping pace with demand.
    We are all aware that the current congestion at the West 
Coast ports is causing significant negative impacts to our 
supply chain. Besides the increased costs being incurred, we 
have added anywhere between 5 and 15 days of lead time to our 
supply chain. An important factor to remember is that those 
additional days of lead time are unplanned time, which in 
today's just-in-time environment will likely result in lost 
sales, increased costs, and poor customer service.
    A cohesive national freight policy that concentrates on 
improving all services in a cooperative manner must be part of 
the next transportation authorization bill. The efficiency of 
our supply chain is compromised if any of those services are 
interrupted or become unpredictable. A strong and integrated 
transportation system is vital to our industry.
    We support surface transportation reauthorization 
legislation that focuses on improving the fluidity and 
flexibility of our Nation's transportation system. Congestion 
leads to increased travel times, which increases cost and 
negates the efficiencies developed in a retailer's supply 
chain, including our sustainability initiatives.
    Along with volume, customer expectations of shorter 
delivery times, improved visibility to product, and more 
reliable service requires the transportation infrastructure to 
support these needs. Without a high level of confidence in the 
reliability of the network, we lose our ability to satisfy our 
customers.
    As the driver shortage issues continue to impact capacity, 
alternatives must continue to be assessed. First and foremost, 
a national intermodal structure is needed. We must have a 
national system that places priority on connectivity and 
accountability if we are to confront our transportation needs 
and wants, while keeping in mind that our choices affect this 
Nation's economic growth.
    It is a vital necessity that Congress take into 
consideration the impact that last-mile connectors have on the 
viability of the supply chain. It is critical to have a smooth 
transition between the highway system, freight facilities, and 
our distribution centers. Any weak link in the supply chain 
negatively impacts the entire chain, raising costs and lowering 
productivity.
    A multimodal, efficient, predictable, and fluid 
transportation network is essential to the success of 
retailers. The long-term health of the entire network is 
critical to protecting our investments and to being 
competitive. With this kind of network in place, we can utilize 
all of its assets to support the specific needs of our customer 
and our many customers.
    Senators, thank you again for the opportunity to address 
the topic of a need for a comprehensive national transportation 
policy. And I would be pleased to respond to any additional 
questions you may have.
    [The prepared statement of Mr. Means follows:]

Prepared Statement of Douglas Means, Executive Vice President and Chief 
                     Supply Chain Officer, Cabela's
    Chairman Fischer, Ranking Member and members of the Subcommittee, 
thank you for inviting Cabela's to testify before you today. Thank you 
for giving us this opportunity to provide a retailer's perspective on 
improving the performance of our Nation's transportation network. My 
name is Douglas Means, and I am responsible for overseeing Cabela's 
global supply chain. My testimony will specifically address some of the 
challenges Cabela's experiences in today's supply chain and our 
suggested solutions to ensure that our Nation's transportation system 
remains reliable and efficient for the movement of our goods.
Background
    For background, Cabela's is a leading specialty retailer and the 
world's largest direct marketer of hunting, fishing, camping, and 
related outdoor merchandise. Since our founding in 1961, Cabela's has 
grown to become one of the most well-known outdoor recreation brands in 
the world and has long been recognized as the World's Foremost 
Outfitter. Through our established direct business and our growing 
number of destination retail stores, we offer a wide and distinctive 
selection of high-quality outdoor products at competitive prices, while 
providing superior customer service. We also issue the Cabela's CLUB 
Visa credit card, which serves as our primary customer loyalty reward 
program.
    We are headquartered in Nebraska with 64 stores, 5 customer contact 
centers, 4 Distribution centers, and 1 Returns Center in 33 states and 
Canada. Our supply chain relies on a well-connected and fluid 
transportation network. As a retailer, we are a customer of the entire 
system with more than 6,500 vendors in the US. This is not limited to 
the U.S. infrastructure. To support our private labels, we import goods 
directly from 20 countries to be distributed to either stores or direct 
to customers, supporting our E-Commerce and Catalog channels. We 
utilize U.S. ports, and the surface transportation corridors, both 
truck and rail. My supply chain team works hard deliver goods to our 
customers efficiently, so that we can guarantee the lowest possible 
cost while also ensuring the best service to meet our customer 
expectations. Congestion or lack of capacity at any point in the supply 
chain greatly increases the risk of disappointing our customers by 
either not providing the merchandise our customers expect or not 
meeting our customer delivery expectations.
Current Environment
    Shippers are facing a unique set of challenges in today's climate. 
Managing inventory and operating a just in time network is essential to 
the health of any retailer and requires a predictable and efficient 
transportation network. When an efficient system fails to exist, then 
significant costs are added to the supply chain. For example, take into 
consideration the congestion and substantial slowdown issues that are 
currently taking place at the ports, driver shortages that are leading 
to trucking capacity issue, and the congestion complications at various 
intermodal yards; significant costs are being added to the supply 
chain. Besides the obvious higher transportation costs from these 
developing circumstances, delivery lead times are also being increased, 
adding to the costs of managing inventory. Actual results also impact 
the selection of gateways to the U.S. and decisions on the locations of 
domestic distribution center locations. As we make significant long 
term investments in our own facilities, there must be an assumption 
that the transportation infrastructure will support those decisions far 
in to the future. Presently, Cabela's and many of our suppliers are 
experiencing a number of inefficiencies as a result of infrastructure 
not keeping pace with demand.
    We are all aware that the current congestion at the West Coast 
Ports is causing significant negative impacts to our supply chain. 
Besides the increased costs being incurred, we have added anywhere from 
5-15 days of lead time to the supply chain. An important factor to 
remember is that these additional days of lead time are unplanned time, 
which in today's just in time environment will likely result in lost 
sales, increased costs, and poor customer service.
    Compounding the port issues are capacity issues for over the road 
drivers; capacity which is needed to make up time. Bottlenecks and 
delays at the intermodal rail yards also forces this volume onto trucks 
that should have moved on the intermodal rail network.
The Importance of a National Freight Policy
    Retailers use all modes of transportation to deliver our products 
from factory to store including planes, trains, ships, and trucks. A 
cohesive national freight policy that concentrates on improving all 
services in a cooperative manner must be part of the next 
transportation authorization bill. Retailers have maximized the 
efficiency of moving goods through the supply chain in part by ensuring 
our transportation decisions reflect the multitude of services that 
exist. The efficiency of our supply chain is compromised if any of 
those services are interrupted or become unpredictable. A strong and 
integrated transportation system is vital to our industry. We support 
surface transportation reauthorization legislation that focuses on 
improving the fluidity and flexibility of our Nation's transportation 
system.
    For the future of our economy and to maintain our global 
competitiveness, it is critical that a national freight policy be 
developed. As freight volumes increase, so will the strain on the 
transportation network. Congestion leads to increased travel times, 
which increase costs and negates the efficiencies developed in 
retailer's supply chains, including sustainability initiatives.
    Along with volume, customer expectations of shorter delivery times, 
improved visibility to product, and more reliable service requires the 
transportation infrastructure to support these needs. Without a high 
level of confidence in the reliability of the network, we lose our 
ability to satisfy our customers.
    As a comprehensive transportation policy is developed, safety must 
be a primary consideration throughout the entire system. A national 
policy that enables the free flow of commerce is essential. Investments 
in vital infrastructure are necessary to remain competitive in a global 
economy.
                            Key Initiatives
A National Intermodal Structure
    As the driver shortage issue continues to impact capacity, 
alternatives must continue to be assessed. First and foremost, a 
national intermodal structure is needed. While making decisions, the 
flow of freight across all modes needs to be taken into account. We 
must have a national system that places a priority on connectivity and 
accountability if we are to confront our transportation needs and 
wants, while keeping in mind that our choices affect our Nation's 
economic growth.
Support For Last Mile Connectors
    It is a vital necessity that Congress take into consideration the 
impact that last mile connectors have on the viability of the supply 
chain. It is critical to have a smooth transition between the highway 
system, freight facilities, and our distribution centers. Any weak link 
in the supply chain negatively impacts the entire supply chain, raising 
costs and lowering productivity.
Reduce Regulatory Burdens On Transportation
    Truck size and weight regulations should be reconsidered by 
Congress. Increasing these standards would enable fleets to be more 
efficient, moving more product with fewer trucks. This would also 
improve sustainability, using less fuel, thus reducing greenhouse gas 
emissions. Changes to current standards would allow us to deliver the 
same amount of goods by making fewer trips either between distribution 
centers or from distribution centers to the stores.
    The impact of the Hours of Service rules that were suspended in 
September for one year should be reviewed with results from more 
detailed studies. It is critical to give carriers the ability to craft 
specific solutions to support the business needs in a more efficient 
manner. Any regulations should be developed with an eye towards 
practical solutions to specific problems.
Innovative Broad Based Funding
    Cabela's is well aware that the improvement of our transportation 
system is costly and that integrating key policy decisions into the 
next surface transportation legislation requires additional revenue. 
Our transportation system is vital to our economy and must be protected 
by adequate Federal funding.
    Innovative funding methods must be considered where there are 
dedicated funding sources for transportation needs. Revenue sources 
should be fairly assessed against all users and should not single out a 
small portion of users of the system. We believe everyone benefits from 
an efficient transportation network.
Conclusion
    A multimodal, efficient, predictable, and fluid transportation 
network is essential to the success of retailers. The long term health 
of the entire network is critical to protecting our investments and to 
being competitive. With this kind of network in place, we can utilize 
all of its assets to support the specific needs of our company and our 
customers.
    Senators, thank you again for the opportunity to address the topic 
of a need for a comprehensive national transportation policy, and I 
would be pleased to respond to any additional questions you may have.

    Senator Fischer. Thank you, Mr. Means.
    Governor Rendell?

    STATEMENT OF HON. EDWARD G. RENDELL, CO-CHAIR, BUILDING 
                        AMERICA'S FUTURE

    Mr. Rendell. Madam Chairman, thanks for the opportunity to 
testify.
    I am here representing Building America's Future, which is 
a nonprofit organization dedicated to the proposition that we 
need to revitalize America's infrastructure before it is too 
late. And I am here to report to you that it is almost too 
late.
    My co-chairs in this venture were Mayor Bloomberg of New 
York and Governor Schwarzenegger from California. Governor 
Schwarzenegger has withdrawn to go back to the movie industry, 
but he left us with the most endearing description and 
definition of ``infrastructure.'' When asked by his 8-year-old 
son, ``Daddy, what's infrastructure?'', he said, ``What Daddy 
used to blow up in the movies.'' He has been replaced by Ray 
LaHood, former Secretary of Transportation, as one of our co-
chairs.
    Building America's Future wants to be clear about one 
thing: Our infrastructure is deteriorating. It is falling 
apart, and we are falling behind. Just 10 years ago, the World 
Economic Forum ranked our infrastructure best in the world. 
Last year, we were ranked 12th best in the world. We are 
falling behind. It is endangering public safety. It is ruining 
quality of life. And as these gentlemen have testified, it is 
hurting the American economy.
    One example: we have 12 major Atlantic Coast ports. As the 
Panama Canal gets dredged deeper and deeper, these supertankers 
they call Panamax tankers are coming to the East Coast. Only 2 
of the 12 Atlantic ports are dredged sufficiently to receive 
them, so they are going to go to Canada to unload their cargo, 
and Canada is going to get the longshoremen jobs and trucker 
jobs that pay $60,000, $70,000 a year.
    Congress talks about middle-class jobs; those are middle-
class jobs that pay a family-sustaining income. And because we 
don't have a sufficient infrastructure, because we have raided 
the Harbor Maintenance Trust Fund, something that WRDA finally 
corrected, we don't have the money to dredge sufficiently and 
we are losing those jobs.
    Metallurgical coal is highly in demand in China. You find 
it in Australia and the United States. Labor costs to mine it 
are about the same in both countries, but because it is four 
times as expensive to get the metallurgical coal in the U.S. to 
the ports as it is in Australia, China buys from Australia 
first and only comes to us when the Australian coalmining can't 
meet the demand.
    We are losing dollars in every way we look. We are losing 
jobs everywhere we look.
    The answer, as Ranking Member Blumenthal said, is one 
single word. And you know that to be true, Madam Chairman--it 
is ``investment''--because you invested in fixing the roads in 
Nebraska with L.B. 84, something that was highly praised and 
has spurred the Nebraska economy. We have to invest.
    There are three ways to invest: by bringing private capital 
to bear, by having the states invest, and having the Federal 
Government invest.
    I am happy, as a former Governor, to tell you that the 
states are doing their job. In 2014, red states and blue states 
alike raised their gas tax or increased their sales tax. 
Governor McConnell did it in Virginia. Governor Corbett, with a 
Republican legislature, did it in Pennsylvania. Wyoming, with 
an all-Republican cast of characters, raised their gas tax 10 
cents. Pennsylvania actually raised it 28 cents over 5 years. 
Blue states did it. This year, South Carolina, South Dakota, 
Minnesota, Michigan, and Missouri are proposing significant 
increases in gas taxes.
    But they cannot do it alone. I will give you one example. 
I-95, the Nation's busiest highway, goes through Philadelphia 
for 18 miles. There are 26 bridges that support I-95 in 
Philadelphia. Nineteen of them are structurally deficient. To 
fix those bridges alone, to make them safe--and one of them 
almost buckled in 2008. To fix those bridges alone would cost 
$3.2 billion. The city and the state alone can no way, no how 
meet that demand.
    The American infrastructure is crumbling, and the time to 
do something about it is now. When Ronald Reagan raised the gas 
tax--and, yes, for our Republican members, Ronald Reagan raised 
the gas tax--when he raised the gas tax, he said, why would we 
put off for 5 or 10 years doing something that we need to do 
today, because it is going to be twice as expensive in 10 
years. President Reagan was right. The time to act is now.
    On the private sector, BAF recommends that the Congress do 
a series of things. In MAP-21, you raised TIFIA from about--the 
limit--from $220 million to $1 billion. Still doesn't meet the 
demand for TIFIA. We propose to raise it to $2 billion.
    Lift the cap, the volume cap, on private activity bonds. 
The qualified public infrastructure bonds that the president 
recommended in his State of the Union are also a very good step 
in the right direction because it shields the PABs from the AMT 
tax, which makes it a very good investment vehicle. Let's get 
the private sector involved.
    Create a Federal infrastructure bank. Create a Federal 
infrastructure bank funded with $5 billion. You will get it 
back. The European infrastructure bank makes money every year 
because they loan the money out and the money is returned with 
interest. They make money. That $5 million would not be spent; 
it would generate a lot of activity, and you would make the 
money back.
    Remove the Federal ban on tolling interstates. That is one 
of the greatest disincentives. If we want the private sector to 
get involved, we have to give them a reasonable return on their 
investment. Tolling is one way for states to do that.
    We used to be able to toll freely. In, I think, the late 
1990s, Congress put a bar on tolling Federal interstates. It 
makes no rhyme or reason. People say, well, we don't want to 
pay for it twice. Well, when you buy a car, you pay for it 
once, and then you pay to maintain it. And we need to do the 
same thing.
    Lift the ban on tolling. If you are unwilling to do the job 
federally, give the states the power to do it. And tolling is 
an important vehicle to give a rate of return on private 
investment.
    So the states will do their part; you can do things to free 
up private capital. But, in the end, it is inescapable that the 
Federal Government must invest more in our infrastructure. You 
knew that in Nebraska. Senator Klobuchar knows it in Minnesota. 
We all know that that is the only way to do it. It costs money 
to repair roads, to build new roads. It costs money to repair 
bridges.
    The Federal Government ought to invest money. The best 
vehicle for doing it, for the time being, is the Corker-Murphy 
bill. It raises the gas tax 10 cents and then adjusts it for 
inflation going forward.
    As you all know, the last time the Federal Government 
raised the gas tax was in 1994 when President Clinton was in 
office. The Federal gas tax is now 18 cents, but if you adjust 
it for inflation, it is now worth 11 cents a gallon--11 cents a 
gallon--because it hasn't been raised in 20 years.
    We need to raise the gas tax. We need to adjust it for 
inflation on a yearly basis. It is absolutely the least you can 
do. That 10-cent increase for a driver who drives 12,000 miles 
a year, which is the average American driver, who has a vehicle 
that gets 24 miles a gallon, will cost less than $2 a week, 
less than $100.
    The Texas Transportation Institute did a study and found 
the cost of inaction. We always talk about how much it is going 
to cost if we act, but we never talk about how much it is 
costing when we don't act. The cost of inaction --and the 
gentleman from the trucking industry talked about repairs and 
accidents to the trucks that come from bad roads and inadequate 
bridges. The cost of idling in traffic because we have 
congested roads, the cost of damage to our vehicles averages 
$818 a year for every driver. Raising taxes: less than $100. 
Cost of inaction: $818.
    There is no way out. It is inescapable. Do your jobs. Raise 
the gas tax. The Chamber of Commerce and the AFL-CIO, who 
probably couldn't agree that today is Thursday, they agree that 
we need to raise the gas tax.
    We will support you. The American people will grumble for a 
little bit, but after a while they won't even have any idea 
that you raised the gas tax.
    I would like to ask----
    Senator Fischer. That is only because, Governor, you are 
saying it over and over again.
    Mr. Rendell. I would like to ask your staff a question.
    How many of you know what the Federal gas tax is per 
gallon? Raise your hand if you know exactly what the Federal 
gas tax is per gallon.
    Not the Senators, the staff.
    Senator Fischer. Oh.
    Mr. Rendell. I don't want to embarrass the Senators.
    Two out of 20 staff members.
    Senator Fischer. No, no.
    Well, if you could wrap up, Governor, please.
    Mr. Rendell. I am done. And we are done if we don't do 
something.
    [The prepared statement of Mr. Rendell follows:]

        Prepared Statement of Hon. Edward G. Rendell, Co-Chair, 
                       Building America's Future
    Chairman Fischer and Members of the Subcommittee, thank you for the 
opportunity to testify before you on the need for investment in the 
Nation's transportation network. This hearing could not be more 
important as I believe this is one of the most urgent issues facing our 
country.
    I am here today as a co-chair of Building America's Future, an 
organization that I co-founded with former New York Mayor Mike 
Bloomberg and former California Governor Arnold Schwarzenegger. We have 
been pleased to have former U.S. Secretary of Transportation Ray LaHood 
join as a co-chair last year.
    Building America's Future represents a diverse and bipartisan 
coalition of state and local officials working to advance 
infrastructure investment to promote economic growth, global 
competitiveness and better quality of life for all Americans.
    America's infrastructure is falling apart and we as a nation are 
falling behind.
    For too long, Washington has ignored the warning signs. Whether it 
be the D+ grade that the American Society of Civil Engineers assigned 
to the Nation's infrastructure or the 25 percent of America's bridges 
that are in need of major repair or upgrade, policymakers have hid 
their heads in the sand and have not taken any meaningful action to 
modernize our transportation network.
    If we continue as a nation to put off critical infrastructure 
investment, we risk falling behind the rest of the world. In fact, it's 
already happening. In 2005 the World Economic Forum ranked the economic 
competitiveness of U.S. infrastructure number one in the world. Now, 10 
years later, we are ranked at number 12. We are getting beat by France, 
Iceland and Singapore.
    America's railroad network has been neglected and under financed 
for decades. Once the premier system in the world, U.S. rail 
infrastructure ranks 15th in the world behind Malaysia and Luxembourg.
    Because our rail network is riddled with choke points and outdated 
crossings and bridges that require slow speeds for safety, passenger 
trains in the U.S. run at slower speeds today than they did in the mid-
20th century.
    America's fastest train, the Acela Express running between Boston 
and Washington reaches a top speed of 150 miles per hour--most of the 
time it averages speeds closer to 70 or 80 miles per hour.
    In Chicago, the Nation's biggest rail center, congestion is so bad 
that it takes a freight train longer to get through the city's limits 
that it does to get to Los Angeles. Delays like this inhibit the 
efficient movement of people and goods and are a drag on our economic 
competitiveness.
    Other countries understand that port innovation and capacity is key 
to competitiveness in the global economy. Since 2000, China has 
invested over $3.5 trillion in its ports. Brazil has invested over $250 
billion since 2008. And as a result, China is now home to six of the 
world's ten busiest container ports while the U.S. has none in the top 
ten. Shanghai's port now moves more container traffic in a year than 
the top eight U.S. ports combined. A portion of Brazil's investment has 
gone into its Acu Superport, larger than the island of Manhattan, with 
state-of-the-art highway, pipeline and conveyor-belt capacity to ease 
the transfer of raw materials onto ships heading to China.
    Here at home, and despite a large surplus in the Harbor Maintenance 
Trust Fund, the busiest U.S. harbors are under-maintained. The U.S. 
Army Corps of Engineers estimates that full channel dimensions at the 
Nation's busiest 59 ports are available less than 35 percent of the 
time. Only two of our East Coast ports are deep enough to accommodate 
the post-Panamax ships that will become the norm when the newly widened 
Panama Canal opens.
    The situation on our roads is not much better. The Texas 
Transportation Institute's 2012 Urban Mobility Report states that 
traffic congestion had Americans wasting time and 2.9 billion gallons 
of fuel at a cost of $121 billion--that equates to $818 per commuter. 
And it's no wonder. From 2000 to 2012 the Nation's population grew by 
11.6 percent and the vehicle fleet increased by 10.7 percent but the 
road system has only grown by four percent.
    Although the Federal Government represents roughly 25 percent of 
transportation and water infrastructure spending, it has provided much 
of the funding for operating and maintaining the Nation's air traffic 
control system. Despite that, the United States is living with an 
outdated aviation system that doesn't serve the needs or expectations 
of 21st century travelers or cargo shippers. As a result, the World 
Economic Forum ranks U.S. air transportation infrastructure 9th in the 
world--behind Panama and Norway.
    All of these deficiencies have made our Nation's transportation 
network less reliable and efficient. And this means higher costs for 
businesses and consumers. Other sectors of our economy understand this 
and are eager for action.
    Building America's Future recently partnered with the National 
Association of Manufacturers to survey the NAM membership on their 
views regarding the state of America's infrastructure.
    The survey found that 65 percent of those polled believe that U.S. 
infrastructure is not positioned to respond to the competitive demands 
of a growing economy over the next 10 to 15 years.
    Additionally, 70 percent believe that America's infrastructure 
needs either ``quite a bit of improvement'' or ``a great deal of 
improvement.''
    The nation's governors have grown weary of waiting for Washington 
to act.
    Consequently, actions at the state level have been gaining momentum 
as governors from red and blue states alike have proposed or signed 
legislation to increase the gas tax, replace the gas tax with a sales 
tax on fuels, or referenda allowing voters to increase local sales 
taxes. States where this has occurred include Wyoming, Virginia, New 
Hampshire, Massachusetts, Rhode Island, Maryland, Pennsylvania, 
Delaware, Iowa, Kentucky, Utah, Washington; New Mexico, Georgia, South 
Dakota, Vermont and Minnesota.
    In 2013, Oregon Governor John Kitzhaber signed legislation to 
establish a 5,000 person pilot program to test the feasibility of 
transitioning to a system where motorists are charged by miles instead 
of paying a gas tax.
    More states are approving legislation to give them the authority to 
pursue public private partnerships. 33 states now have such authority.
    The success rate for local ballot initiatives that increase revenue 
or funding for transportation have enjoyed high success rates in recent 
years. In 2014, 72 percent of such referenda were approved by voters.
    Already in the past two months, several governors have either 
signed legislation to increase revenue or urged their legislatures to 
approve such proposals during the 2015 session.
    Michigan Governor Rick Snyder signed a bill in December that would 
authorize a ballot initiative on May 5 to allow voters to decide 
whether or not to increase the sales tax by one percent with revenue 
going towards transportation. Just last week, South Carolina Governor 
Nikki Haley said she would sign legislation to increase the gas tax by 
10 cents a gallon over three years if it was coupled with a cut in the 
state's income tax. In his State of the State Address, Missouri 
Governor Jay Nixon urged his legislature to consider raising the gas 
tax as way to generate transportation revenue.
    While it is encouraging to see such actions at the state level, we 
must not lose sight of the fact that there is a clear and abiding 
Federal role in setting the Nation's transportation policy. Without an 
overriding national vision and network, America's transportation 
infrastructure would resemble a patchwork of disconnected roads and 
rails; our aviation system would be untenable; goods movement would be 
greatly hindered. And all of this would cost businesses and consumers 
billions of dollars.
    It is vital that all modes of transportation from roads to ports to 
rail to aviation work together to strengthen and modernize America's 
transportation network.
    To regain America's economic status as a world leader, Building 
America's Future recommends:

   Creating a commission charged with producing a ten-year 
        critical infrastructure plan--covering transportation, water, 
        energy and broadband--that makes significant new investments. 
        The Congressional Budget Office has concluded that an annual 
        investment of $185 billion would be economically justified.

   Passing a long-term transportation bill.

   Identifying a long-term and sustainable source of revenue 
        for the Highway Trust Fund. BAF supports increasing the gas tax 
        by 10 cents and indexing it to inflation.

   Further increasing the authorization for TIFIA and raising 
        or lifting the cap on Private Activity Bonds.

   Eliminating the Federal restrictions on tolling interstates.

   Targeting Federal dollars to economically strategic freight 
        gateways and corridors.

   Investing more strategically in projects of national or 
        regional significance and that will deliver real economic 
        returns.

   Establishing a National Infrastructure Bank.

   Creating a new type of municipal bond called Qualified 
        Public Infrastructure Bonds as proposed by President Obama 
        earlier this month.

   Making the TIGER program permanent.

   Upgrading our airport infrastructure by modernizing the 
        Passenger Facility Charge to $8.50

   Getting NextGen up and operational as soon as possible.

    The other option is to let the status quo prevail. We can continue 
to underinvest in our critical infrastructure. We can continue to sit 
on the sidelines and watch countries like France, Brazil and Malaysia 
make the investments in 21st century transportation networks and 
infrastructure. We can continue to fall apart and fall behind.
    Infrastructure is an economic driver and has the added benefit of 
creating long-term quality jobs. It improves the quality of our lives 
and it enhances our economic competitiveness. There is no better time 
to invest in America's future. We have seen interest rates at record 
lows thereby making it more attractive to build. But as the economy 
continues to recover, those rates will begin to rise and so will the 
costs to build and repair our Nation's infrastructure. We must act now.
    I urge you to work with your colleagues in the House and with the 
President to make the hard choices that are necessary to craft a 
serious long-term infrastructure investment strategy for the future.
    Our nation's continued economic prosperity depends on it.
    Thank you Chairman Fischer. I look forward to answering the 
Subcommittee's questions.

    Senator Fischer. OK. Thank you very much, sir.
    We do have a vote. I believe it begins at 11 o'clock. And 
so we will try to get through our questions here in a fairly 
expedient manner. I will begin, and then our ranking member 
will follow me with questions. We will have a 5-minute round.
    Mr. Mullen, when you talk about Werner's commitment to 
safety and you tell us the number one thing that FMCSA could do 
to improve fact- or data-driven safety regulations, what do you 
think that would be?
    Mr. Mullen. Well, on the commitment to safety, Chairman, 
there are 5-million-plus drivers out there on the roads every 
day, and they take commitment to safety very, very seriously. 
That is their number one priority.
    When I talk inside of Werner, we kind of put it in three 
different buckets. We talk about training, we talk about 
technology, and we talk about culture.
    So if you talk about training, just to kind of give you 
some idea of where we are spending dollars and resources now, 
it is on simulation. So driver simulation is a big issue, and 
it is improving year over year.
    And so we have simulators. We work on new hires. We hire a 
lot of drivers that come in straight from CDL schools and just 
have their license, and so we train those folks with the 
simulators. And we have seen a very marked decrease in accident 
frequency from those that use the simulators.
    And technology, those onboard technology devices I talked 
about in my opening remarks, whether it is forward-collision-
warning devices or lane-departure devices, we have seen marked 
improvement in accident frequency from that, as well. And that 
is a spend that is going to be about $6 million, $7 million 
annually, just on that technology alone. So we are very 
committed, and we are putting the dollars behind that 
commitment.
    And then, most importantly, culture. The drivers need to 
know that safety is their top priority. And we talked about the 
electronic logging devices. And, again, Werner started in the 
late 1990s to make sure that we dispatched every load knowing 
that the driver could deliver that load legally and safely. And 
I think ELDs is where we ought to be going, spending time on 
ELDs, versus some of the peripheral issues that don't really 
attack the core.
    With regard to the FMCSA and data, I guess I would have two 
things to say. Look at the data without any political lens. 
Let's focus on the core factors that cause crashes, speed and 
those sorts of things, as opposed to things more on the 
periphery. That might even get into labor issues.
    And it is not so much the integrity of the data; it is just 
the manner in which we are looking at it and what data we are 
looking at to make sure we are providing the biggest bang for 
the buck on improving the highway safety.
    Senator Fischer. OK. Thank you.
    Mr. Means, we have heard a lot over the past few months 
about congestion at our Nation's ports. You alluded to that in 
your testimony, on the effect that that is having on the supply 
chain. Can you tell us how acute this problem is for Cabela's?
    Mr. Means. Sure.
    Senator Fischer. How do you manage that situation?
    Mr. Means. Sure.
    You know, we started to see the problem arise last summer. 
And, as you know, just like most retailers, the fourth quarter, 
there is a substantial amount of volume for us that comes 
through as we prepare for a very busy shopping season. You 
know, as I stated in my testimony, it is critical for us, 
because we run as just-in-time as we possibly can and we try to 
keep our investment in inventory to a minimum. So even a day or 
2 of delay can create a big problem for us, especially in those 
busy times of the year.
    We literally took people out of role from their jobs at our 
corporate headquarters and moved them to Seattle just simply to 
manage every single container that was coming out of that port. 
So we had two people there full-time for, really, the 6 weeks 
leading up to Christmas that simply their job was to manage the 
containers coming out of the port, manage equipment on our own, 
because we wanted to make sure that we could have equipment 
available when those containers came free.
    It was far, far beyond, I think, what anybody would expect 
just to get our goods and an extremely inefficient process for 
us.
    Senator Fischer. Thank you.
    Mr. Fritz, in my opening statement, I mentioned my interest 
in trying to get away from the Washington-centric prescriptions 
to various transportation challenges.
    In your testimony, you compared design-based standards with 
performance-based standards for safety. Could you share a 
little bit about that view?
    Mr. Fritz. Thank you. I would love to.
    Senator Fischer. Yes.
    Mr. Fritz. I would also like to start by saying, out of 
this conversation, it is such a pleasure to tell the Committee 
that your freight-rail network is the envy of the world and we 
are part of the solution. We are self-funding; you don't have 
to raise a tax in order to have us invest in our railroads. And 
the railroads are in the best condition they have ever been in.
    So from a standpoint of safety regulation, when we see a 
cookie-cutter approach applied to us, a prescriptive mandate, 
we tend to experience significant dislocation that creates 
service problems and sometimes even increases safety issues for 
our customers and for our employees and the communities we 
serve.
    If you think about a current mandate, PTC, PTC has a very 
specific definition and a very specific, targeted benefit. The 
PTC mandate is costing the industry $10-billion-plus. We are 
unsure as to whether or not it is going to be effective. We 
will miss the mandated date. And we are doing everything in our 
power to get it installed and working and tested, and that is 
probably going to take us till 2020.
    As an industry, we are dedicated to safety. It is in our 
DNA. If, instead, Congress had said, Industry, we want you to 
figure out how you are going to reduce the incidents and 
severity of incidents that are targeted by PTC, I guarantee you 
we would come up with a solution that would be less costly and 
would be implemented in a more timely fashion. We are doing 
that across the board in how we run our railroads today.
    So that is just a small example, Chairman, about how 
prescriptive safety can be very costly and disruptive.
    Senator Fischer. Thank you.
    Senator Blumenthal?
    Senator Blumenthal. Thank you, Madam Chair.
    Again, thank you for your testimony.
    Let me begin, Mr. Fritz, by pursuing the line of inquiry 
that Senator Fischer initiated on safety. You mentioned 
technology as a critical element of safety, and, in fact, your 
railroad has been one of the leaders in using some of that 
technology--cameras, for example.
    How important are additional measures, such as--and I have 
advocated them--methods like redundant signal protection, 
alerters, close-call reporting? Are these measures that you 
have adopted, and would you recommend them for railroads in 
general?
    Mr. Fritz. Senator, I am so thankful for you asking that 
question. We are very aggressive, both as an industry but 
specifically Union Pacific, at using technology investment and 
process improvement to improve safety, both for the communities 
that we serve and our employees.
    So you mentioned inward-facing cameras. Without any 
mandate, we have been working for about a year and a half, on 
developing a technology, a use, and an understanding with our 
labor force, our craft professionals, on how to implement 
inward-facing cameras.
    The whole intent is so that we can understand behaviors in 
the cab of a locomotive and address whatever those behaviors 
are. We have invited our labor leadership to work with us to 
try to understand what those issues are and address them.
    I view that as a cultural issue that needs to be addressed. 
That strikes me as a much better way of getting at the issue 
than some prescriptive target that really doesn't have the 
reality of the working situation in mind.
    You had asked about close-call reporting. In conjunction 
with our Federal regulator, the Federal Railroad 
Administration, and our labor again, our craft professionals, 
we entered into an agreement 6 or 7 years ago at our largest 
terminal to get into a close-call reporting system called C3RS, 
which allows employees to report into an anonymous database 
staffed by both craft professionals and management that they 
either did get into an issue or almost got into an issue, and 
they are protected from both discipline ramifications and FRA 
ramifications for that reporting. In turn, that team is 
expected to debrief completely, to investigate the issue, and 
find safety improvements through process, investment, training, 
et cetera.
    It has been a home run. It has been praised by the FRA. We 
love it, as a management team, and we are taking it across our 
system. So we are committed. We advocate everything you just 
said.
    Senator Blumenthal. I would invite you, since our time is 
limited here, to come and meet with us and share perhaps in 
greater depth that experience, which I think would be 
enormously valuable in helping to shape this committee's 
perspective on the safety issue. Because a lot of the pushback 
that we have received isn't practical, it isn't affordable, but 
I think you can really bring a story that will help us move the 
ball forward on safety.
    I want to shift to Governor Rendell.
    I detected, I think, a modicum of support for the gas tax 
increase on your part, but I would like to raise some 
alternatives. Because I agree with you, absolutely, completely, 
on the urgency and immediacy of these investment needs.
    And so there have been discussions and proposals. Senator 
Blunt and I have a proposal for a public financing authority, 
also known by some as an infrastructure bank. I have supported 
this idea. I am hoping that I can be part of its reintroduction 
in this session of Congress. Senator Bennett has been a leader, 
Senator Warner. Really, both sides of the aisle have backed 
this idea, at least in concept, and I think there is a growing 
consensus and a coalition behind it.
    So let me invite your views on that idea.
    Mr. Rendell. Well, we strongly support an infrastructure 
bank. It is the best vehicle, we think, for getting capital, 
private capital, into play for projects of regional and 
national significance.
    Interestingly, TIGER, as part of the stimulus, did just 
that. TIGER allowed states to combine and make requests for 
money for regional projects.
    I don't mean to quarrel with Mr. Fritz, but two of the 
nation's biggest eastern freight railways, CSX and Norfolk 
Southern, both came to me when I was Governor, and they had 
projects called National Gateway and Crescent Corridor; went 
through six states. They asked me to get all six states' 
Governors to agree to put money in. And we all did, all the 
states did. We went before for TIGER grants, and we got TIGER 
grants from the Federal Government.
    Those projects radically improved freight in the eastern 
half of the country. But there was private capital, state 
capital, and Federal capital. And an infrastructure bank can be 
the best vehicle for private capital.
    Senator Blumenthal. Thank you very much.
    This panel is really enormously valuable. And my time is 
over, unfortunately, and we will have votes coming up. I don't 
know whether we will be able to return for another round of 
questioning. But I want to extend the same invitation to other 
members of the panel that I did to Mr. Fritz, that, speaking 
only for myself, I would really value an opportunity to pursue 
some of these issues, and, Governor Rendell, particularly the 
infrastructure bank idea.
    Thank you, Madam Chair.
    Senator Fischer. Thank you, Senator.
    Senator Klobuchar?

               STATEMENT OF HON. AMY KLOBUCHAR, 
                  U.S. SENATOR FROM MINNESOTA

    Senator Klobuchar. Thank you very much, Madam Chair.
    Thank you to the panel.
    And thank you, especially, Governor Rendell, for coming 
back and not giving up on this cause. I think it is a cause 
whose time has come, when you look at what has been going on 
around the states and the fact that there have been changes 
made to state laws that have allowed for more investment.
    I hope that we will start to see some changes here, because 
this is one of the top areas that Democrats and Republicans 
have agreed we can make some bipartisan progress. Senator 
Boxer, in her last 2 years here, I don't think she is going to 
exactly back down; I think she is ready to work again on a 
transportation bill.
    And, as we all know, that money is running out. That needs 
to get done by, I think it is, May. And we have a shortfall in 
that even going forward beyond what I think we would like to 
see up here and on your panel, which is more investment.
    Our story from Minnesota, Governor, is interesting. It is 
true that Governor Dayton has now proposed a gas tax increase 
and some major changes. The state did increase the gas tax 
after the 35W bridge fell down in the middle of the Mississippi 
River on a summer day. It is eight blocks from my house, an 
eight-lane highway. Thirteen people died, 17 cars submerged in 
the water, 111 people injured. It was a tragedy. And it was 
because of decaying infrastructure, and we all know that.
    The interesting political side of that was that the 
legislature then went in and passed a gas tax increase. 
Governor Pawlenty vetoed it. Then the votes got there to 
override his veto, and there were five or six Republicans that 
joined the Democrats in that effort. They were pretty much--
there was actually a ``Wanted'' sign put out against them in 
their own party. One of them changed parties and is now a 
Democrat. One remained a Republican and got elected, but the 
rest were not reelected or either kicked out of their party.
    That is the true story of what happened in Minnesota. What 
do I see now? I see a change. I think you see more Republicans, 
like Senator Corker, being able to talk about this issue. And I 
just think we are going to need support from the Chamber and 
other organizations that are willing to have people's back and 
are willing to stand up for them and not run--you know, fight 
off negative ads when people are willing to talk about 
investment.
    And I think that is our real problem here. It is not really 
a policy problem, in that we all know we have to make this 
investment. It is really a political problem and having the 
political will to get this done.
    My question is just on some of these solutions. And I guess 
I would start with you, Governor Rendell, and anyone can chime 
in.
    We have obviously talked about the gas tax idea. As you 
know, Senator Murphy and Senator Corker's proposal, while it is 
not written, does take the money, I think, out of other parts 
of the budget.
    And so the second proposal that we have out there is the 
infrastructure bank, the financing authority, as we call it, 
which Senator Warner and others have put together. I am on that 
bill. And the issue still is financing it.
    One of the ideas out there is repatriation. There is some 
bipartisan support for that. Or doing some kind of 
international tax reform and then requiring that a certain 
amount of that money go into infrastructure financing to 
supplement the Highway Trust Fund. And I just wonder what 
people think of that idea.
    I guess I would start with you, Governor.
    Mr. Rendell. First of all, one of the points I want to make 
is, to finance the infrastructure bank, you have to put money 
in. It is more of a scoring problem for Washington than 
anything, because if that money gets loaned out, you are going 
to make money on it. You are not going to lose the $5 billion.
    It shouldn't be scored as money taken and increasing the 
Federal deficit, because it is essentially like a loan 
guarantee program. You only lose the money if--you have to pay 
off the guarantee. You only lose the money if the loans aren't 
repaid.
    If you look at the European infrastructure bank's history, 
they make money on the loans that they loan out, and it is a 
hugely important vehicle for improving the EU infrastructure.
    So that is number one.
    The repatriation bill for initial funding for the 
infrastructure bank, good idea. As a permanent solution, you 
can't use repatriation----
    Senator Klobuchar. Yes. It is just the one shot----
    Mr. Rendell. It is a one shot, right.
    Senator Klobuchar. Yes. Exactly. But it could be a big 
shot.
    Mr. Fritz. America's freight railroads support the user pay 
systems that are in place right now. So, a gas tax, an 
infrastructure fund, so long as it is funded by users of the 
infrastructure, we would support that for sure.
    And to the Governor's point, the freight railroads support 
public-private partnership projects where there is benefit 
across a spectrum of constituents and the project otherwise 
would not be done by any one constituent.
    Senator Klobuchar. Have you looked at what they have done 
in Canada? Senator Blunt and Senator Stabenow and I and others 
went there, and they are doing a huge amount of work there. And 
that is kind of a public-private partnership.
    Mr. Fritz. Yes. Union Pacific has enjoyed a public-private 
partnership project recently in Fort Worth, Texas, and it made 
sense. We paid about a third of the project; our counterpart, 
BNSF, paid about a third; and public moneys paid about a third. 
And the division was predicated on who gets what benefit. That 
was negotiated up front, and then funding was divvied up based 
on who got what benefit.
    Senator Klobuchar. Yes.
    Mr. Mullen. Senator, from the trucking industry, we agree 
that the user fee is the right way to go, and we think the 
cleanest and the most efficient way is to increase the gas tax. 
So we have been an advocate for that for some time.
    As far as other proposals that we have heard at Werner, you 
know, changing the structure and taxing at the barrel, and then 
you would refund the diesel tax--you would eliminate the gas 
tax, gasoline tax, and then tax at the barrel. And then on the 
diesel, you would still pay it at the barrel, but then we would 
get a refund for that.
    So the stats that I saw, it made some sense. It had some 
tail to it that could withstand things other than the 
repatriation issue.
    So something does have to be done. The Governor is 
absolutely correct that the numbers are staggering as to what 
it is costing the industry and the economy and the safety. And 
the gas tax increase, although not all that attractive, is the 
best solution, as far as we are concerned.
    Senator Klobuchar. Yes.
    Now I have a happy ending to my story, and then I will let 
someone else go. Basically, then, the Democrats who had voted 
for that, you know, did fine in the election, and we, I think, 
turned around in the next election even stronger, which I have 
heard happen in other states.
    But I do think the reality of it is that it is a difficult 
thing, and the only way to do it is bipartisan, and so people 
agree--something Senator Fischer is pretty good at doing.
    Anyway, thank you very much.
    Senator Fischer. Thank you, Senator Klobuchar.
    Senator Booker?

                STATEMENT OF HON. CORY BOOKER, 
                  U.S. SENATOR FROM NEW JERSEY

    Senator Booker. Thank you very much, Chairwoman.
    Real quick, Governor Rendell--and I want to just say for 
the record you are a phenomenal leader. When I was a young 
mayor coming up, you were one of my mentor mayors and shaped my 
early career. And I am really grateful for that, and I just 
want to be able to say that now.
    Mr. Rendell. Thank you.
    Senator Booker. Just really quickly, because you have 
already made your point, but I just want to highlight 
something. There is about a $3 trillion deficit, infrastructure 
deficit, in America. Is that true? Yes?
    Mr. Rendell. It is anywhere between $2 trillion and $3 
trillion. The American Society of Civil Engineers estimated it 
at about $2 trillion.
    Senator Booker. OK. So let's call it $2 trillion. Let's be 
conservative with our numbers.
    The president's proposal, President Obama's proposal, which 
is just about $300 billion over, I think, 4 years, if I am 
correct----
    Mr. Rendell. Right.
    Senator Booker.--that seems to be an anemic, paltry, 
inadequate sum to meet the needs. Would you agree with that 
characterization?
    Mr. Rendell. Well, remember, when we talk about 
infrastructure deficits, we are talking about more than just 
transportation. We are talking about water and sewer, we are 
talking about broadband. The President's investment is not 
sufficient, but I wouldn't call it anemic. I would call it, in 
light of what past congressional history has been, it is 
significant.
    Should it be more? Building America's Future, a bipartisan 
organization----
    Senator Booker. Sir, forgive me for interrupting one of my 
mentors. I just want to get to the point, because I have very 
little time.
    If history conspired to make you President of the United 
States right now, you would be having a much bolder proposal 
with a lot more investment in infrastructure, correct?
    Mr. Rendell. Sure. I would spend about $100 billion a year 
additional. The CBO in 2008 said we could sustain spending as a 
country $180 billion a year more than what we are doing now.
    Senator Booker. So, in other words, the number is probably 
closer to what Bernie Sanders is putting forth, when he called 
for $1 trillion over 5 years. Would that be correct?
    Mr. Rendell. No question.
    Senator Booker. No question that he is more in the right, 
as far as meeting our needs, fueling our economy, improving job 
creation, and, frankly, getting a return for taxpayers that 
more than meets that investment.
    Mr. Rendell. Right. And we all talk about creating middle-
class jobs, both parties. Well, DOT says 25,000 jobs created 
for $1 billion of infrastructure investment. And that is pretty 
close to correct; we tracked it in Pennsylvania.
    Think about what that would mean in jobs, that type of 
investment. It would mean about 4 million additional jobs that 
pay $50,000, $60,000, $70,000, $80,000.
    Senator Booker. I am happy to hear Ed Rendell and Bernie 
Sanders in agreement. That is a wonderful day.
    Real quick, to Mr. Means and Mr. Mullen, I just want you 
all to know I respect what you all do. You are phenomenal 
business leaders, producing incredible jobs. I read a little 
bit about both your companies and just have a lot of respect.
    So please understand that I am not quibbling with the kind 
of Americans you are and what you are doing for our country. I 
just have a lot of concerns. My highways are a lot more 
congested than the highways of your home state, and I have a 
lot of concerns about truck safety.
    And you taught me something today, because I didn't know--
and I agree with you. I have seen cars do very dumb, or, I 
should say, unfortunate things around trucks, causing truck 
driver accidents. And I think you are right, they shouldn't be 
scored the same way, and that is something that I agree with 
you on.
    But I have a lot of problems with the--and I do disagree 
with you, sir. The evidence from the U.S. Department of 
Transportation Federal Motor Carrier Safety Administration is 
that truck accidents are going up in a startling and 
unfortunate way between 2009 and 2012.
    And I would like to put in for the record ``An Analysis of 
Truck Size and Weight: Phase I--Safety'' summary of findings, a 
report that was done about the really--when these trucks are 
involved in accidents, the severe consequences they have.
    And so I guess the two questions----
    Senator Fischer. Without objection.
    Senator Booker. Well, thank you very much, Chairwoman and 
friend.
    [The information referred to follows:]

         An Analysis of Truck Size and Weight: Phase I--Safety
Summary of Findings
    Commercial motor vehicles carrying heavier loads or employing 
multiple trailers present significant concerns regarding the impact of 
their use in terms of increased accidents, accident severity and 
fatalities. In 2011, the most recent year for which data is available, 
3,757 people were killed in crashes involving large trucks and 88,000 
more were injured--absent any increase in truck size and weight.\1\
---------------------------------------------------------------------------
    \1\ http://www.fmcsa.dot.gov/documents/facts-research/CMV-
Facts.pdf. Retrieved May 13, 2013.
---------------------------------------------------------------------------
    Several proposals have been made in recent years to increase limits 
for truck size and weight yet significant disputes exist about the 
safety of heavier and longer truck configurations. The Multimodal 
Transportation and Infrastructure Consortium (MTIC) performed a 
critical evaluation of available crash rate data, prominent safety 
claims and operating characteristics. Our findings are presented below.
Assessment of Crash Data
    National crash rate data, though limited in several respects, show 
disturbingly higher crash rates for trucks that are longer or heavier 
than the current standard 80,000-pound, five-axle truck.
    For our analysis, we used average annual fatality data from the 
Trucks in Fatal Accidents (TIFA) dataset for 2005-2009 and vehicle 
miles traveled (VMT) estimates from the Federal Highway Administration. 
TIFA is the most accurate and complete dataset of fatal truck crashes 
available. It includes reliable information on the number of trailers 
and axles of trucks involved in fatal accidents. It does not, however, 
contain the relevant length or weight information needed to calculate 
crash rates for specific configurations. Nevertheless, existing data 
shows significantly higher crash rates for multi-trailer configurations 
and single-trailer trucks with six or more axles relative to the rate 
for all singles.
Multi-Trailer Configurations

   The raw data show a 13 percent higher fatal crash rate for 
        double-trailer configurations compared with single-trailer 
        trucks. When the data are normalized to compare similar nation-
        wide operation, the gap increases. In nation-wide operation 
        similar to single-trailer combinations, double-trailer trucks 
        are likely to have a fatal crash rate 15.5 percent higher than 
        single-trailer trucks.
        
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
        

   This finding is consistent with the results of the 2000 U.S. 
        DOT Comprehensive Truck Size and Weight Study, which found an 
        11 percent higher fatal crash involvement rate for multi-
        trailer configurations.

   The same raw data show that triple-trailer trucks have a 
        higher fatal crash involvement rate than both doubles and 
        singles. The average number of annual fatalities involving 
        triples and the percentage of VMT attributable to triples are 
        too small to yield a scientifically reliable fatal crash rate 
        finding for triples. However, the data suggest that the finding 
        for doubles is illustrative for longer combination vehicles 
        generally.
Single-Trailer Configurations with Additional Axles

   Single-trailer combination trucks with six or more axles--
        presumably the heaviest trucks--have dramatically higher crash 
        rates than five-axle singles. An analysis of TIFA data 
        indicates that single-trailer combination vehicles with six or 
        more axles have a fatal crash involvement rate 867 percent 
        higher than the rate for all single-trailer trucks.

   Here, too, the relatively small population of six or more 
        axle trucks traveling the Nation's highways precludes a 
        scientifically reliable finding. Further, we have significant 
        concerns about the quality of underlying data, especially VMT 
        estimates for sub-classes of vehicles. Many data collection 
        problems exist, and the smaller the class of vehicles 
        considered, the larger the potential sources for error.

   Even if more reliable data were to show a fatal crash rate 
        increase even a fraction of that above, the negative 
        implications for highway safety would be vast. It would seem 
        unwise to allow expanded operation of six-plus-axle trucks 
        without further serious consideration of the possible impact on 
        fatality rates.
Operating Characteristics
    Serious safety concerns about the relative operating 
characteristics of heavier and longer truck configurations have been 
documented in both government and independent studies conducted over 
the past 30 years. Our review of existing research leads us to conclude 
that in many cases, credible new research does not exist to dispel 
these concerns. In some cases, new concerns have arisen in recent 
years. Among the concerns over the operating characteristics of heavier 
and longer configurations are:

   State safety inspections suggest that brake maladjustment 
        and equipment defects continue to be widespread issues among 
        current truck operations. Heavier loads require more braking 
        capacity and can exacerbate braking issues.

   Heavier vehicles are likely to increase accident severity as 
        they have more kinetic energy at any given speed. This may be 
        exacerbated as autos become smaller and lighter to meet ever 
        more stringent fuel efficiency standards.

   Increases in allowable vehicle weight may mean higher 
        trailer loadings and a higher center of gravity thus increasing 
        the risk of rollover and cause compensatory heavy vehicle 
        operator behavior that will result in greater interference with 
        other vehicles.

   Heavier and longer configurations can cause greater 
        interference with other traffic (including longer acceleration 
        times and increases in speed for trucks traveling up and down 
        hills) that could exacerbate conflicts with other motorists.
Non-Federal Studies
    Proponents of increases in truck size or weight often cite state-
specific studies or statistics from other nations to support their 
claim. Our analysis of prominent studies leads us to conclude that 
these studies have little applicability to nationwide operation of 
heavier or longer configurations in the US. For example, the VMT and 
crash exposure findings from a recent Wisconsin study are insufficient 
for a national analysis that would require more precise truck and rail 
diversion assumptions. In Idaho, the Transportation Department was 
unable to make a statistically significant finding about the safety of 
long doubles because they represent such a small percentage of truck 
traffic in the State, preventing the application of the Idaho study 
results nationally. Also, statistics from the United Kingdom showing 
decreased truck crash rates cannot be distinguished from a decrease in 
crash rates for all vehicles, have been criticized by the UK Department 
of Transport for significant underreporting and should not be 
considered applicable to U.S. operations because of significant 
geographical, infrastructure and regulatory policy differences between 
the U.S. and the UK.

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

Professional Experience
    Concerns over the quality of available data and the lack of 
substantiated claims of safety improvements led RTI to conduct 
interviews with law enforcement officers with expertise conducting 
truck safety inspections and accident investigations and to conduct a 
survey of truck drivers themselves.

   20 of the 21 officers interviewed indicated flatly that 
        heavier and longer trucks would be ``more dangerous'' because 
        the additional weight and length would add new factors to an 
        already complicated chain of events.

   Officers offered real world observations reinforcing many of 
        the concerns about the operating characteristics of longer and 
        heavier trucks raised in the literature.

   With specific regard to crash severity, officers often noted 
        that larger trucks almost always increase the severity of the 
        crash remarking that it was a simple physical equation of 
        kinetic energy with the potential for significantly more 
        damage.

   Similarly, surveyed truck drivers are consistent in their 
        opinion that heavier and/or longer trucks raise significant 
        concerns over the impacts of these configurations on safety. 
        Full results can be seen in the charts below, but the overall 
        conclusions are that:

     90 percent of those surveyed believed that increased 
            use of 97,000-pound, six-axle trucks would negatively 
            impact highway safety, and

     88 percent believed that greater use of longer 
            combination vehicles would negatively impact highway 
            safety.
           
        [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]   
           
            
Conclusion
    The existing literature, research, interviews and statistics 
provide clear, if not conclusive, evidence. With confidence, we can say 
that additional axles, vehicle length and weight place pressure on the 
equipment, maintenance and drivers, which ultimately increases the 
potential for error, accident and fatality. Further, existing data, 
though limited, suggests that heavier and longer trucks are likely to 
have higher fatal crash rates than the most common trucks on the road 
today. To better assess the safety impacts of future proposals to 
increase truck size or weight will require information not currently 
available. To that end, we make the following recommendations.

  1.  Improve data collection efforts. Data on fatal accidents by 
        configuration and reliable VMT estimates will be required to 
        fully answer questions about the safety of specific truck 
        configurations. Federal agencies should work to require the 
        collection and reporting of more specific information 
        (including weight and configuration) for vehicles involved in 
        fatal accidents and should significantly improve the collection 
        of VMT data.

  2.  Conduct off-road operating characteristic testing. Industry 
        states that technology has enhanced the operating 
        characteristics of commercial motor vehicles yet there is no 
        research directly comparing the operating characteristics of 
        proposed vehicles. This analysis should be completed on a test 
        track to avoid experiments involving the motoring public.

    Senator Booker. So just two points I want to make in the 
remaining seconds that I have.
    If truck fatalities are increasing, why is there an attempt 
to roll back sleep regulations and increase the size of trucks? 
It seems to me counterintuitive that if the problem is getting 
worse, why would we let them push further into the endurance 
levels of human beings, when we know there is a strong 
correlation, as you admitted in your testimony that these are 
truck driver mistakes.
    And then the second point I would love for you to comment 
on, and then I am done, is that the cost of these accidents is 
being borne by my state. Because the annual costs to society 
from crashes involving commercial motor vehicles is estimated 
at $99 billion. Minimum insurance levels for trucks are just 
set at $750,000.
    And so a fatal multi-vehicle truck accident, for example, 
can cost over $20 million to compensate for injured care for 
families and, more importantly, to our infrastructure--or, not 
``more importantly,'' excuse me--also with our infrastructure, 
to pay for the destruction of the highways that incur.
    So those are the two points that I just have, that it seems 
like the truck industry is pushing for a rollback of 
commonsense sleep regulations and they have an inadequate 
investment because the cost right now of those accidents is 
being borne--it is an externality that is being borne by 
taxpayers.
    Mr. Mullen. Senator, we absolutely agree that driver error 
is the top cause of accidents. What I don't think is true is to 
contribute a percentage of that to fatigue, a large percentage 
of that to fatigue.
    So I would disagree that the industry is trying to roll 
back the sleep requirements, the restart provisions. You know, 
we had the restart pre-July of 2013 for a long period of time, 
and that is when you saw an improvement in accident frequency, 
and you have seen that improvement over the last decade.
    And you hear discussion about the 80-hour workweek. That 
only happens in a perfect, perfect freight world where the 
freight is the right freight and the driver has just the right 
timing to pick up and deliver and to take the 34-hour restart. 
So, in the real world, the 80-hour-a-week just doesn't really 
occur.
    And so it is not so much the hours of service and the 
regulations that is causing the accidents, that we should be 
focused on. It is other things, like speed, that we talked 
about. So, for instance, the industry has been asking to have 
speed limiters. I mean, again, how often do you ask for 
regulations? We have been asking for speed limiters. And most 
of the industry govern their trucks at 68 miles per hour or 
below. Werner governs their trucks at 63 miles an hour because 
that is the right things to do.
    So we just have a difference of opinion on how to go about 
attacking the safety problem and even the fatigue issue. We 
just don't believe changing the hours-of-service restart was 
the answer. We believe that took away from flexibility of the 
driver. It put more traffic in congestion times, such as 5 in 
the morning, after the restart, 1 to 5, 1 to 5.
    So we have the same goal, which is to have a less fatigued, 
safer driver, but we have a difference of opinion on how to get 
there. Our opinion is that the science that the FMCSA relied 
upon that changed the rules back in July of 2013 was flawed. We 
think that it contradicted, in fact, the science that FMCSA 
relied on when they had the previous rule. So just a difference 
of opinion on that sort of thing.
    As far as the insurance minimums, I understand where you 
are coming from. $750,000 being the minimum--has been for some 
time--is being looked at. The FMCSA has asked for opinions; we 
will weigh in on it. It is something that ought to be looked 
at, as an industry, and hopefully FMCSA will have enough data 
to make a meaningful decision.
    Senator Booker. All right.
    My time has expired because Governor Rendell gave such long 
answers.
    Senator Fischer. Because, Senator Booker, he is your 
mentor.
    Senator Booker. Yes.
    Senator Fischer. Thank you, Senator Booker.
    Senator Markey?

               STATEMENT OF HON. EDWARD MARKEY, 
                U.S. SENATOR FROM MASSACHUSETTS

    Senator Markey. Thank you, Madam Chair.
    And this panel is very good. I mean, it is an A list panel. 
They did a fantastic job here today.
    Governor, you said that passenger trains today are slower 
than they were 50 years ago.
    Mr. Rendell. Yes.
    Senator Markey. Which is just a stunning statement. What is 
slower today than it was 50 years ago, except for passenger 
trains, huh? Everything else is faster.
    Mr. Rendell. Nothing I can think of.
    Senator Markey. Just amazing. And even in Massachusetts, in 
Boston, the trains can average 150 miles per hour going into 
the Boston terminal, but they average only half of that.
    Mr. Rendell. Right.
    Senator Markey. OK? So that is just a statement of how much 
we have gone backward over the last 50 years.
    Mr. Rendell. No question.
    Senator Markey. Can you talk a little bit about that and 
what you believe to be kind of the two-point program to get us 
out of that----
    Mr. Rendell. Myself, Governor Pataki, former Secretary of 
Transportation Mary Peters, we rode a train in Japan, a maglev 
train, 47 miles. It went 314 miles an hour. It levitated 6 
inches above the ground. Governor Pataki, who is a very tall 
man, stood up, took a pad and a pen and wrote, and his hand 
didn't move. You ride the Acela when it goes 150 miles an hour, 
and you take your life in your own hands if you stand up.
    Our rail system, passenger rail system, in the United 
States is a joke. It is a joke compared to European and Asian 
rail systems. We can build it in California and the Northeast 
Corridor, where I think there is enough quantity of potential 
riders to make it feasible, we can build high-speed rail.
    We should build it with a combination of private and public 
funding. The Japanese government is so interested in 
introducing maglev technology, they are willing to put up $5 
billion to build a first leg between Washington and Baltimore. 
And, by the way, if they build it, you will get to BWI from 
Washington, D.C., in 6 minutes.
    Senator Markey. And that is not a fantasy; it is possible.
    Mr. Rendell. It exists in Japan.
    Senator Markey. For anyone that has ridden a train in Japan 
or China or, you know, France, it is possible.
    But you have to basically get out of this old mentality 
that we have in the United States and realize that, in a lot of 
ways, there was greater dedication to rail back 50 years ago 
and 100 years ago than there has been today. But if we upgraded 
it at the same rate that we have other technologies--for 
example, when the president says that fuel-economy standards 
can go to 54.5 miles per gallon by 2025, make that the law, 
which it is now, all of a sudden we are not averaging 25 miles 
per gallon anymore. Now we have hybrids and all-electric cars, 
and we are about a third of the way through the whole process, 
but America is ready to go. They love this new technology that 
is available to them in the showrooms. And we have to have the 
same attitude about rail.
    So let me turn to you, Mr. Fritz, and ask you about the 
Federal Communications Commission and the 20,000 towers that 
they have to work through in order to put them along the tracks 
of the rail system in America to make sure that this new safety 
system can be implemented in a timely, telescoped time-frame 
process.
    Can you talk a little bit about that and what your 
commentary is on the FCC process?
    Mr. Fritz. Sure.
    About a year ago, year and a half ago, we ran--as part of 
implementing PTC, we have to install radio towers on our right-
of-way. We ran into a problem where one set of Federal 
regulations administered through the FCC created a bottleneck 
for us being able to actually install those towers, to the 
extent that towers were not installed for about a year until 
that bottleneck could be resolved.
    The FCC worked diligently on trying to find a solution. 
They have found a solution, and we are back installing towers. 
But that is just a great example of how disjointed regulation 
can take a project that has been mandated to us through 
Congress, PTC, and make it an impossibility to actually fulfill 
that mandate.
    So a little bit more diligent coordination and 
thoughtfulness would be of value.
    Senator Markey. So back when we passed the 1996 
Telecommunications Act, for example, we had to put together a 
whole system of towers across the country so that people could 
talk to each other.
    And it was interesting, because the people in wealthier 
communities did not want cell phone towers in their 
communities, although when they went to work in the blue collar 
parts of town, the downtown areas, they wanted their cell 
phones to work.
    But we needed a law, we needed a way of getting that done. 
And, all of a sudden, everyone could talk on their cell phones, 
no matter where they were. There are some exceptions, but it is 
pretty good.
    So what would you say today has to happen in order to move 
at the same pace here along an already-established route in 
order to accomplish that goal?
    Mr. Fritz. In terms of----
    Senator Markey. Yes.
    Mr. Fritz.--radio towers?
    Senator Markey. Getting the cell towers up, making it 
possible to make rail more safe. What do we have to do? I mean, 
we did it before, 20 years ago. Why can't we do it right now?
    Mr. Fritz. So I think there is a solution in place now and 
we are back up to speed in terms of installing radio towers.
    Right now, the heavy lift on PTC is the fact that it is 
unproven technology; we are installing it as we invent it. 
Union Pacific is going to be largely installed and starting to 
test, let's say, sometime in 2017; the industry, to varying 
degrees because of the availability of product and expertise.
    What needs to be appreciated from a PTC perspective is it 
is not an off-the-shelf technology. We have invented a radio, 
we have built a radio company, we have built a spectrum 
company--this is as an industry--and we have invented this 
back-office system that will be able to, on anyone's railroad, 
anyone's equipment, stop any train prior to one of four 
different catalysts. That is a hell of a lift, and I am very 
proud of our industry for having done as good as it has.
    It is still unknown as to whether or not it is going to 
work and what kind of impact it will have on service for our 
customers, on safety for our communities----
    Senator Markey. Mr. Fritz, my time has expired. Can you 
tell the Committee maybe in writing what you need in order to 
telescope the time-frame to determine whether or not it is 
going to work?
    Because I think we have to put----
    Mr. Fritz. Sure.
    Senator Markey.--this under a microscope, because it just 
can't go on and on and on and on. We need a system in place 
that has all parties accountable, to bring everyone to the 
table, to say: What is the problem? Why can't we invent this? 
Or can we bring in new people? You know, maybe we have to bring 
in Silicon Valley just to say, let's just get this done fast, 
get the----
    Mr. Fritz. Senator, I----
    Senator Markey.--smartest people in order to get it done 
and save money. The longer it goes is the more it is going to 
cost us.
    Mr. Fritz. Senator, I think at this point the freight rail 
industry is implementing PTC as quickly as it can possibly be 
implemented. We support Senator Thune's bill and the concept of 
giving us an extension, to recognize both our effort and the 
fact that it is an extremely heavy lift.
    And I think that is enough said on that.
    Senator Markey. OK. Good.
    Thank you, Madam Chair.
    Senator Fischer. Thank you, Senator Markey. The record will 
be open for 2 weeks, Senator, if you want to submit questions, 
and then the witnesses can respond.
    Senator Markey. That would be great.
    Senator Fischer. Thank you.
    Senator Moran?

                STATEMENT OF HON. JERRY MORAN, 
                    U.S. SENATOR FROM KANSAS

    Senator Moran. Madam Chairman, thank you. And 
congratulations on chairing the Subcommittee, and I look 
forward to working with you. Perhaps once in a while we will 
have some Kansas witnesses as well as Nebraskans.
    Mr. Mullen, let me start with you.
    And thank you all for being here.
    On trucking, I was interested in your testimony in regard 
to Senator Booker's questions. And what I take from that is 
that it may be that the regulators are focused on perhaps the 
things that are slightly less important than things that are 
more important, that they are not finding necessarily the 
solutions to the problems that are out there.
    And so my question is, what is it that this committee, this 
subcommittee can do to make certain that FMCSA is focused on 
the things that would have the most consequence for improving 
safety, better protecting the public, better protecting your 
drivers and your trucks, and still being able to operate an 
efficient trucking system that allows us to be competitive in a 
global economy? What is missing? Why do we not have the things 
focused the way they should be?
    Mr. Mullen. Well, I think first they need to prioritize 
what it is that has the greatest impact on safety. And our 
position is the hours-of-service restart was not the way to go 
about doing it. They spend a lot of time and money and 
resources in the industry quarrelling over whether it was the 
right thing to do or the wrong thing to do. When they----
    Senator Moran. So how does the agency get headed down the 
path of that issue as compared to--is there just disagreement 
as to what is the most important?
    Mr. Mullen. So they haven't told me why they went down that 
path. My suspicion is that perhaps it was more politically 
motivated than it was otherwise. So I think it was just 
misguided to spend that much time on that thing.
    First is, for instance, mandating compliance with the 
existing rules, buy the electronic logging devices, right? So, 
again, Werner has been on ELDs for over a decade. You have 
absolute 24/7 view into what your driver is doing; you know 
when he is complying with the lie, and, in the event he tries 
not to, you can prevent that from happening.
    So it just doesn't seem to be a good use of time to quarrel 
on the fringe of the restart.
    And, by the way, for instance, on the restart, since July 
2013, the 12 months rolling preceding July 1, 2013 versus the 
next 12 months, there has been no improvement in accident 
frequency. So the data would suggest that that was a misguided 
effort. Again, put the science aside; just the data after the 
fact would suggest that was misguided.
    Things you could perhaps do is incentives. Perhaps have FMC 
having incentives for folks that will do nonregulated measures 
such as onboard recorders--little too late for the LDs--things 
of that nature, to have incentives for trucking companies to go 
above and beyond the regulations to make sure that the roads 
are safe. That is where we would like to see them go.
    And, to some extent, level that playing field. You know, 
CSA has done some good things for the industry, and certainly 
anytime you talk about the issue of safety more than you did 
before, that in itself has some benefit. But let's make it 
fair.
    The stated purpose was to have focused audits. Well, it has 
gone well, well beyond that. They are now trying to regulate 
things that have nothing to do accident frequency or accident 
severity. The hazmat BASIC is a perfect example. You can get a 
violation because your placard is off-kilter on your truck. 
Let's not spend time on things like that.
    Let's spend time on things like traffic enforcement versus 
inspections. The data suggests that money spent on traffic 
enforcement versus roadside inspections has a four-to-one rate 
of return better than a roadside.
    So, again, just focusing on those types of things--
enforcement versus inspection, root cause like speed versus 
peripheral things like the restart--and I think you are going 
to have time that is better spent and your results are going to 
be better.
    Senator Moran. Again, Mr. Mullen, tell me about--in a time 
in our country in which employment is such an important issue 
and jobs matter, there is a tremendous need for drivers. What 
is the industry able to accomplish? What are the impediments 
that we might look at that prevent those who need a job who 
have the capabilities of driving a truck from finding a job?
    Mr. Mullen. Yes. So it is a tremendous need. That is 
probably the strongest headwind for trucking right now, is the 
driver shortage, and there doesn't seem to be any relief in the 
near future.
    And so folks in our industry are doing what they can to 
make it a more attractive job, whether it is a better way of 
life, you are getting home more frequently, better amenities 
and technology in their truck. You know, we work all the time 
with truck stops to make sure they are adding amenities at a 
good clip. And, of course, compensation. Compensation has been 
going up in the industry lately. At Werner alone, the last 12 
months, we have had over a 10 percent pay raise across our 
fleet.
    So those are the types of things we need to do to make it 
attractive. We need to stop calling them bad people. We need to 
stop picking on them as if they are the root cause of 
everything that happens bad on the roadway and just need to 
have a more positive image of a truck driver. You know, folks 
that used to want to get into the industry and be a truck 
driver, they are not interested anymore because it has that 
black eye. And a lot of it is our own doing.
    So it is going to be a problem for some time. And we do all 
that we can. We are hiring more veterans. We hire about 168 
veterans on a weekly basis to drive our----
    Senator Moran. Is there a program by which somebody who is 
licensed within the military has the capability of easily 
transitioning to the private sector?
    Mr. Mullen. There is. There is. Some states will allow, 
whether the transition--if you operated a heavy vehicle in the 
military, you can get a CDL virtually automatically. Candidly, 
we are a little skeptical of that, and so that is why we put 
those types of folks in our finishing school the minute they 
get to our company.
    So, yes, there are programs out there to alleviate the 
transition from military life into private sector and in 
trucking specifically.
    Senator Moran. Madam Chairwoman, thank you very much.
    Incidentally, we do see the Werner trucks in Kansas, and, 
certainly, Union Pacific is prevalent in our state, as well. So 
there is a sense of Kansas to those couple of Nebraskans here.
    Thank you.
    Mr. Mullen. Thank you, Senator.
    Senator Fischer. Thank you, Senator Moran.
    There is just a few of us here yet, and the votes have not 
been called, so I would suggest we can each ask one question.
    Senator Moran won't be able to do that, but, Senator 
Booker, would you be interested in doing that?
    Senator Booker. Yes. Since Senator Moran is leaving, can we 
ask one and a half questions?
    Senator Fischer. You may. You may. Thank you.
    Governor, you had talked about the harbor imports and the 
fund there and money being stolen from that in the past.
    Mr. Rendell. I don't think I said ``stolen.''
    Senator Fischer. Well, that is why you are a Governor. But 
the diversion of funding at the Federal level I think has been 
a great cause of concern.
    Mr. Rendell. Huge problem.
    Senator Fischer. I personally would like to see the Highway 
Trust Fund used for roads and bridges. There is much in there 
that is taken out for other areas that I think needs to be put 
back in to meet our responsibilities. It is a priority.
    I would just be interested in your thoughts on that and if 
you think that is an area that we can look at to see if we 
would be able to, I guess, recoup some of that funding so we 
can meet our obligations.
    Mr. Rendell. So I think, in theory, I would support the 
idea of making the Highway Trust Fund just limited to roads and 
bridges. But I think the effort to expand other modes of 
transportation are very, very important because they take cars 
off the road.
    One of the questions--I am sorry Senator Markey isn't here. 
The Northeast Corridor by 2030 will increase our population by 
40 percent, and there is not enough I-95 to support that. We 
have to get people riding trains.
    So we have to find alternate modes. In urban centers, bike 
paths, green paths, walking trails, those things are valuable 
in getting people out of their cars and off the roads and 
helping with congestion. So maybe----
    Senator Fischer. Is it fair to be able to increase the gas 
tax that you promote, a user fee of people who are on highways, 
and divert that money for mass transit, beautification, trails? 
Should we be looking at another funding source for those?
    Mr. Rendell. Well, first of all, for transit itself, we 
need to continue to support that out of the gas tax, because 
transit is crucial to keeping our highways in some noncongested 
condition. And ``noncongested'' is probably an oxymoron these 
days. So we ought to be doing more for transit.
    For other forms, these alternative forms that have cropped 
up, I would agree with you, but I would urge Congress to find 
an alternative source of money, because they are valuable. They 
are valuable.
    One of the things we have seen in American cities--and now 
I am putting my mayor hat on--is young people coming back to 
live in cities. And one of the reasons they come back to live 
in the cities is because they are bicycle-friendly, because 
there are trail paths, because you can ride along the river. 
Senator Booker knows what I am talking about because Newark is 
experiencing that to some degree. And that is a great thing for 
cities, to have young people. They add vitality.
    So, yes, if you want to make the Highway Trust Fund for 
transit, roads, and bridges exclusively, that is OK and it 
makes sense, but we should find an alternate vehicle for other 
modes of transportation. Because they all help us do it. And 
urban needs are different than rural needs, and I think we have 
to consider that.
    Senator Fischer. Thank you very much.
    Senator Booker?
    Senator Booker. Thank you very much.
    I will not be asking any questions to Governor Rendell. But 
when I was mayor, I had--and this is why I love talking to 
businesspeople. When I was mayor, I had a saying that in God we 
trust, but, everybody else, bring me data. And if you get away 
from the politics, as you were saying, and just focus on the 
data, they should educate your decisions.
    And so I just want to go back, because I think you were 
giving me some insights that have been valuable about where to 
focus regulation to get the best in highway safety. But I just 
want to stick for a second with the fatigue-to-driver issues. 
And let's put aside the restart rule, which you said might be 
forcing--that was the argument that was made --might be forcing 
more traffic on the road at 5 a.m. or other odd hours and just 
stick to the idea that, should truckers be driving 82-hour 
weeks versus driving what the rollback was until this temporary 
halt, just to 70 hours a week?
    Now, I don't have the exact data that I quoted in a floor 
speech that I gave about the large percentage of our accidents 
that are specifically linked to fatigued drivers. It is a 
significant percentage. And I can get that for you from the 
research.
    And the data, this wasn't just something thrown together. 
The research was--and I am not exaggerating the number--
hundreds and hundreds of independent studies that showed about 
what the human limits are before you start going into a very 
dangerous fatigue in which you are more susceptible to your 
reaction time being slowed down, toward your focus and 
concentration being slowed on the roads.
    And so, when we see consistently in New Jersey a raising of 
truck driver accidents, some very high-profile accidents in 
which people have pushed past that 70 hours a week and were now 
upwards of 80 and more, whether this is the most bang for your 
buck on the regulations you need, don't you think it is just 
common sense that we study and know that there are limits, 
indeed, for any of us towards human endurance?
    And why should we allow people on the roads driving these 
large vehicles that become like guided missiles should a person 
lose control? Shouldn't we limit those in a common sense way so 
that human beings don't push into that danger zone in which 
their reaction time and their focus makes them more prone to 
accidents?
    Mr. Mullen. Yes. So there is a lot to cover there.
    On the rollback, as you described, so what happened in 2013 
was we changed the restart, that 34-hour restart. You could 
take it whenever you wanted it, as long as you took the 34-hour 
restart and you reset your clock. In 2013, we changed that, 
that you had to have a 1-to-5, 1-to-5.
    We didn't change the 11-hour driving, 14-hour on-duty 
driving a day, 70-hour and 8 days--none of that was changed. So 
all we really changed was the restart.
    And it is our position and we believe the data supports 
that the change wasn't warranted as it relates to safety. In 
fact, we believe it is not possible that there could be more 
traffic on that 5 o'clock to 7 o'clock a.m. time period. That 
is a fact. As an industry member, we have seen that. We had to 
accommodate, and so more of our trucks were coming out 5 
o'clock a.m. to 7 o'clock a.m. on a Monday morning. That is a 
fact. And we believe that had, actually, a detrimental impact 
on safety versus a beneficial impact on safety from the other 
aspects of the change.
    So, again, we are talking about the same thing, Senator. We 
absolutely want a less fatigued driver. Just a different way of 
going about it.
    Senator Booker. So let's put, again, the restart rule aside 
for a second. You and I, then, both agree that a driver who is 
driving 80-plus hours a week--I am sure all of us are working 
80-hour workweeks, but at that amount of time behind a wheel, 
you would agree, then, that the reams of studies--and I can 
present them to you if you want--that show that, at that point, 
a driver has lower focus, a slower reaction time, and is more 
prone to accidents.
    Mr. Mullen. So my suspicion is the data would support that 
80 hours a week on a regular basis does have a detrimental 
impact on fatigue and your ability to keep watch. But, in 
practice, Senator, that just doesn't happen with any 
regularity. Talking about just getting----
    Senator Booker. And so, then, why would the trucking 
industry--if it doesn't happen with regularity, why doesn't the 
trucking industry just concede to that 70 hours a week then, 72 
hours a week?
    Mr. Mullen. Because we are talking about different things. 
The 70-hour was never changed. What changed was the restart.
    So, under the old restart, if, again, in that perfect 
freight atmosphere that I tried to describe to you earlier 
where you have the right loads at the right time, the traffic 
doesn't impede you and you get the restart at the exact right 
time, you can get over that 70 hours. But it is in a perfect 
world.
    And so when the whole idea of changing the restart came 
about, we did our own study internally. We did not have drivers 
getting past 70 hours. It just doesn't happen. It might happen 
in some small areas, but it just doesn't happen as a routine 
matter or even a prevalent matter.
    So that 80 hours that you keep referring to, that is a 
perfect world. The rules don't say you can drive 80 hours in 8 
days. The rules say 70 hours in 8 days, but the restart can 
allow you to get over that 70.
    So I hear you. And the 80 sounds very compelling when you 
talk about it, but it just doesn't happen. And what we would 
prefer is you talk about circumstances that actually are more 
common and you can actually drive down the frequency at a 
greater rate than quarrelling about all these other issues.
    Senator Booker. Right. And I will conclude just by saying 
that, A, it does happen where drivers--we had a very--you know 
the accident in New Jersey that got a lot of national 
headlines. That was somebody that was past 80 hours. So it 
factually does happen that somebody drives more than 80 hours a 
week. That is an incontrovertible fact.
    You and I can argue about different ways of getting there, 
but if you and I are in agreement with the fact that in one 
workweek to get 80 hours endangers people on highways, we 
should find a way to prevent that. Both industry should want 
that as well as those who are in charge of trying to keep our 
highways safe.
    Mr. Mullen. Senator, if we could talk later, that would be 
fantastic, because I think we have the same passion, just going 
about it in different ways.
    And the tragedy you referred to--again, tragedy. He was 
within his hours of service. Bad decisions--you can't regulate 
bad decisions out of the marketplace. He was within his hours 
of service, but he made personal decisions on his personal time 
that contributed to the fatigue, unfortunately, which led to 
that accident.
    Thank you for your questions.
    Senator Booker. No, sir, thank you. And, again, I 
appreciate the business you do for our country.
    Mr. Mullen. Thank you. I appreciate that.
    Senator Fischer. Thank you, Senator.
    The hearing record will remain open for 2 weeks, and during 
this time Senators may submit any questions for the record. 
Upon receipt, the witnesses are requested to submit their 
written answers to the Committee as soon as possible.
    With that, I will conclude the hearing. I thank the 
witnesses for being here. I think we had a great panel today. 
Thank you so much.
    We are adjourned.
    [Whereupon, at 11:32 a.m., the hearing was adjourned.]

                            A P P E N D I X

  Prepared Statement of the Commercial Vehicle Safety Alliance (CVSA)
    The Commercial Vehicle Safety Alliance (CVSA) submits Comments for 
the Record regarding the hearing held on January 29, 2015 by the Senate 
Committee on Commerce, Science, and Transportation's Subcommittee on 
Surface Transportation and Merchant Marine Infrastructure, Safety, and 
Security, entitled: ``Improving the Performance of our Transportation 
Networks: Stakeholder Perspectives.'' In these comments, CVSA will 
address a number of issues raised during the hearing related to 
commercial motor vehicle (CMV) enforcement and the States' CMV safety 
programs, which receive funding through the Motor Carrier Safety 
Assistance Program (MCSAP), as well as remarks related to the Federal 
Motor Carrier Administration's (FMCSA) pending Safety Fitness 
Determination (SFD) rulemaking.
Traffic Enforcement
    A portion of the remarks made by Mr. Jim Mullen, Executive Vice 
President and General Counsel, Werner Enterprises, focused on the 
concept of improving efficiency from State safety programs by focusing 
efforts on inspection activities coupled with traffic enforcement. In 
his remarks, Mr. Mullen cites data that indicates a decline in the 
number of traffic enforcement activities associated with an inspection 
and expresses concern on behalf of the trucking industry that this is 
negatively impacting roadway safety.
    There are two issues that need to be addressed. First, the 
perceived decrease in traffic enforcement through the MCSAP and second, 
whether or not requiring States to focus their efforts on increased 
traffic enforcement will provide an overall safety benefit. Before 
examining these issues, however, it is important to clarify that the 
``traffic enforcement'' activity referred to in Mr. Mullen's testimony 
includes a North American Standard Inspection in the numbers, and not a 
simple ``walk-around'' inspection as suggested. This means that the 
traffic enforcement data being cited includes both the traffic 
enforcement activity AND all the aspects that occur with a ``standard 
roadside inspection''--``a vehicle inspection to detect component 
defects and a review of the driver's paper work (e.g., hours of service 
records of duty status) and credentials (e.g., license and medical 
examiner's certificate).''
    Therefore, the benefits accrued from the traffic enforcement 
activity included in the data being referenced also include benefits 
resulting from roadside inspections. Essentially, we are comparing the 
effectiveness of traffic enforcement coupled with an inspection versus 
an inspection only. It's not surprising, then, that the more rigorous 
activity, traffic enforcement and an inspection, delivers more safety 
benefits.
    However, there is a lot of traffic enforcement activity on both 
CMVs and non-commercial motor vehicles (non-CMVs) operating in the 
vicinity of CMVs that is not being reported to FMCSA. States are not 
required to report this information under the MCSAP. The fact is the 
data being reported is incomplete, and so we are not able to quantify 
the totality of the MCSAP and non-MCSAP funded traffic enforcement 
activities being conducted, or the associated benefits, while NOT 
coupled with a roadside inspection. The dataset required for this 
proper evaluation and analysis just doesn't exist.
    It should also be noted that, according to ATA's own analysis of 
Federal crash data,\1\ the large truck fatality crash rate has fallen 
significantly over the last decade. This decrease coincides with the 
reported decrease in MCSAP-funded traffic enforcement, indicating that 
States have, in fact, been successful in delivering comprehensive 
programs that help reduce crashes and fatalities associated with 
commercial motor vehicles. These fatality reductions have also came at 
a time when Federal and State resources for CMV safety and enforcement 
have been essentially flat-lined, while truck registrations and traffic 
increased by about 30 percent.\2\
---------------------------------------------------------------------------
    \1\ ``ATA Pleased with Improvement in Truck Crash Rate,'' American 
Trucking Associations (ATA) press release, February 2, 2015, on ATA 
website, http://www.trucking.org, accessed February 4, 2015.
    \2\ Budget Estimates, Fiscal Year 2016, Federal Motor Carrier 
Safety Administration, U.S. Department of Transportation.
---------------------------------------------------------------------------
    There are a number of reasons why traffic enforcement coupled with 
an inspection has reportedly decreased. First, recently FMCSA stopped 
requiring that a traffic enforcement violation documented by a MCSAP-
funded inspector be accompanied by a roadside inspection report in 
order for the State to receive MCSAP reimbursement for the activity. 
Because MCSAP inspectors can now conduct traffic enforcement on CMVs 
without also completing an inspection, traffic enforcement coupled with 
an inspection has declined. However, that does not mean that traffic 
enforcement on CMVs is no longer occurring. Unfortunately, because that 
activity is not associated with an inspection report, the traffic 
enforcement dataset is incomplete. In addition, and perhaps most 
significantly, many State MCSAP agencies have made an effort to share 
their responsibilities for CMV traffic enforcement activities with non-
MCSAP law enforcement officers, asking those officers to increase their 
traffic enforcement on CMVs. This is not, as Mr. Mullen's testimony 
suggests ``an attempt to deflect the criticism of FMCSA's management of 
its CMV enforcement program'' but rather an effort by States and FMCSA 
to manage resources and responsibilities as efficiently and effectively 
as possible. In addition, some State agencies have focused on 
enforcement of non-CMVs operating around CMVs, as the enforcement 
community, like industry, understands that not all CMV crashes are the 
fault of the CMV driver.
    Furthermore, as resources at the State level continue to shrink, 
many sworn law enforcement officers who several years ago were 
conducting traffic enforcement coupled with inspections (under the 
MCSAP) have been pulled off of those activities for other law 
enforcement duties, including strictly traffic enforcement.
    Because traffic enforcement is no longer required to be conducted 
along with an inspection, and because in all States non-MCSAP officers 
are conducting traffic enforcement, the dataset is incomplete. We 
currently cannot capture traffic enforcement conducted by non-MCSAP 
officers on CMVs, traffic enforcement conducted by a MCSAP inspector 
that is not coupled with an inspection, or traffic enforcement on 
private vehicles operating around CMVs. Because the dataset is 
incomplete, it is difficult to quantify the benefits of each individual 
activity. The combined result of these efforts is that we know the 
States are doing more traffic enforcement, focusing on driver behavior, 
while continuing to conduct the necessary vehicle inspections. And, as 
recent data from DOT indicates, crash rates and fatalities are 
declining.
    We agree that traffic enforcement is a critical piece of each 
State's commercial vehicle safety program. However, it is just that, a 
piece of their program. Under the MCSAP, States are tasked with meeting 
the requirements of a comprehensive commercial motor vehicle safety 
program. FMCSA has established five national program elements, of which 
traffic enforcement is one. In addition, the requirement to enforce 
traffic laws is only one of more than twenty specific components 
established for the MCSAP program under 49 U.S. Code Sec. 31102(b)(2) 
and promulgated by regulation in 49 CFR Part 350. As an example, in 
addition to enforcing traffic laws, States are required to ensure 
registrants of commercial motor vehicles ``demonstrate knowledge of 
applicable safety regulations, standards, and orders of the Government 
and the State.'' \3\
---------------------------------------------------------------------------
    \3\ 49 U.S. Code Sec. 31102(b)(2)(l)
---------------------------------------------------------------------------
    To meet the goals established under MCSAP, a State's commercial 
vehicle safety program is comprised of a number of aspects, including 
roadside inspections, traffic enforcement on commercial vehicles, 
compliance reviews, safety audits, targeted strike forces, educational 
activities and even traffic enforcement on non-commercial vehicles--the 
private citizens operating dangerously around commercial vehicles. The 
appropriate level for each activity varies from State to State and will 
change over time within any given State. We firmly believe that the 
Commercial Vehicle Safety Plan (CVSP) is the appropriate place to 
evaluate programmatic effectiveness and effect change, not through 
statute. The CVSP is a living document that dynamically changes from 
year to year based on a variety of factors. The CVSP is submitted to 
and approved by FMCSA each year prior to funding being appropriated to 
the States, so there are checks and balances in place to ensure crash 
reduction targets and goals are being met.
    When developing a CVSP, States must look at all the 
responsibilities required of them under MCSAP and align those 
activities with the personnel and funding made available to them under 
MCSAP. The fact is that MCSAP inspectors and investigators are 
specially trained to enforce the Federal Motor Carrier Safety and 
Hazardous Materials Regulations. They've been trained to evaluate 
regulatory compliance, such as reviewing log books, inspecting 
vehicles, and interacting with motor carriers, vehicles and drivers, 
all with the goal of identifying and removing dangerous motor carriers, 
drivers, and vehicles from the road.
    The volume of regulations, exemptions, and exceptions is only 
getting increasingly complicated and complex, which is demanding more 
of the personnel conducting these activities. Meanwhile, any law 
enforcement officer can conduct traffic enforcement, and those assigned 
traffic enforcement duties do so each day. In addition, the states 
continue to get inundated with unfunded mandates either through 
Congressional direction or through policy changes by FMCSA. These 
unfunded mandates have hampered the ability of the states to do the 
work that has been asked of them, and take time and energy away from 
program delivery.
    Forcing states to focus more of their efforts on traffic 
enforcement coupled with an inspection could negatively impact safety. 
For example, Mr. Mullen notes in his testimony that research indicates 
a strong correlation between compliance with hours of service 
regulations and safety. Traffic enforcement coupled with an inspection 
takes more time, and requires the presence of a traffic violation, 
reducing the number of inspections a MCSAP-trained inspector can 
conduct. This means fewer log books will be reviewed. It also means 
fewer traffic enforcement activities, as the officer has to then 
conduct an inspection along with issuing the traffic citation. In order 
to be the most effective and interact with the highest number of motor 
carriers, vehicles, and drivers it makes sense to allow the specially-
trained MCSAP inspectors and investigators to focus on their area of 
expertise and allow non-CMV trained officers to focus on traffic 
enforcement, reaping the benefits of both activities. There are grant 
programs to help facilitate this activity available through the 
National Highway Traffic Safety Administration (NHTSA), in which many 
States participate to varying degrees. And while it's true that MCSAP 
and non-MCSAP traffic enforcement NOT coupled with an inspection does 
not currently make its way into the Motor Carrier Management and 
Information System and thus not accounted for in the CSA algorithm, 
that does not mean that the activity is not happening and that safety 
benefits are not accruing. They are simply not being captured in the 
CSA model. However, we strongly agree that this is a hole in the 
dataset and we look forward to working with industry and FMCSA on 
finding a way to collect this data, so a motor carrier's CSA scores can 
more accurately reflect their drivers' behaviors.
    States need more flexibility in how they spend their resources, not 
more restrictive parameters. Rather than prescribing a ``one size fits 
all'' format for State programs, Congress and FMCSA should focus on 
setting broad parameters, program elements, goals, and expected 
outcomes for a program. This will allow each State to develop their own 
CVSP, tailored to the state's needs, with the goal of ensuring that 
crash reduction targets are being met. Simply saying states should 
focus more on traffic enforcement ignores the complexity and diversity 
of each state's CMV safety and enforcement program.
Safety Fitness Determination
    Mr. Mullen's written testimony also addresses FMCSA's forthcoming 
rulemaking on the agency's Safety Fitness Determination, arguing that 
FMCSA should not move forward with the rulemaking until issues with CSA 
have been addressed. CVSA strongly disagrees with this argument.
    We agree that improvements to the CSA program are necessary. 
However, the underlying issue is that the CSA program is not being used 
as it was originally designed or intended and the program is still 
incomplete. It is our understanding that the CSA program as it has been 
designed by FMCSA was intended to be a screening tool for enforcement, 
helping inspectors and investigators to identify the carriers most in 
need of an intervention and to identify the ``bad actors'' in industry, 
NOT to tell shippers which motor carriers are ``safe''. Further, the 
BASIC SMS scores as we understand them were not meant to serve as an 
absolute assessment of a motor carrier's safety culture. The 
forthcoming SFD rule will help to define what that assessment will look 
like.
    Because CSA is not being used as it was intended, issues like crash 
accountability, the relative nature of the SMS, and lack of full 
implementation present real challenges and inequities that need to be 
addressed. The best way to address these issues is to complete the CSA 
program, and by moving forward with the SFD rulemaking. When complete, 
the SFD, which will have undergone a public notice and comment process, 
will provide for a more complete picture of a motor carrier's safety 
fitness.
                                 ______
                                 
                National Association of Railroad Passengers
                                  Washington, DC, February 12, 2015

Committee on Commerce, Science, and Transportation,
Subcommittee on Surface Transportation,
Washington, DC.

    Following upon the January 29 hearing on improving the performance 
of U.S. transportation networks, please consider the following policy 
recommendations from the National Association of Railroad Passengers 
regarding the implementation of Positive Train Control.
    Accepting that compliance with the December 31, 2015, statutory 
deadline is not feasible, NARP recommends that any new law which 
changes that deadline should:

  (1)  Grant authority to the Secretary of Transportation, on an 
        individual company basis, to give up to three, consecutive 18-
        month extensions, bringing the latest possible date of 
        compliance 4-1/2 years after the current deadline, or June 30, 
        2020.

  (2)  Change the law so that heavily traveled mainlines are not exempt 
        because they happen to be owned by other than a Class 1;

  (3)  Explicitly require the prevention of low-speed, rear-end 
        collisions--of which there have been fatal ones within the past 
        four years [see below]. The system as currently being installed 
        does not know the length of trains and therefore cannot prevent 
        low-speed, rear-end collisions.

    Point #1 would be preferable to legislatively forcing the gift to 
the entire industry of a blanket 5-year extension. It would enable the 
Secretary to treat with appropriate differences railroads which have 
worked hard on PTC vs. those who have not.

    Point #2 would protect the railroads from a tragic accident that 
also would be a public relations disaster for the industry--how to 
explain having installed PTC all across rural America but having taken 
advantage of a legal loophole either to avoid installation in populated 
areas like the cities of Kansas City and St. Louis. [Some states may 
come up with the money to save their passenger trains; other states 
already choking on the big run-up in Amtrak-related costs under Section 
209 of the 2008 law may let the service die and leave PTC absent where 
most needed.]

    Point #3 would make explicit what most people thought the law 
already meant--train-to-train collisions must be prevented; there is no 
exception for low-speed, rear-end collisions. The NTSB April 24, 2012, 
report on the April 17, 2011, fatal collision at Red Oak, Iowa, stated 
that ``the PTC designs that are being deployed and the FRA's final rule 
on the application of PTC are unlikely to prevent future restricted 
speed restricted speed rear-end collisions similar to the 58 rear-end 
collisions reported to the Federal Railroad Administration over the 
last 10 years or the collision at Red Oak because train speeds at the 
upper limit of restricted speed are allowed.''
    FRA's April 25, 2012, advisory in response to the NTSB's report 
detailed six rear-end collisions over the past year that caused four 
employee fatalities (the other two were at Mineral Springs, NC, on CSX 
on May 24, 2011, and DeWitt, NY, on CSX on July 6, 2011), six employee 
injuries and property damage exceeding $6 million. Thankfully, no 
passenger trains were involved.
                                 ______
                                 
 Prepared Statement of Ross B. Capon, Consultant, American Association 
           of Private Railroad Car Owners http://aaprco.com/
    Thank you for holding the hearing on this important subject and for 
the opportunity to submit these comments.
    Clearly, the U.S. has under-invested in intercity passenger rail. 
However, the appropriate steps forward should be based on a firm 
understanding of the current facts and not on criticism of Amtrak's 
service. The top priority for investment in the Northeast Corridor must 
be rehabilitation and expansion of the existing railroad, not 
development of a new mode of transportation (maglev) that cannot use 
existing infrastructure. It is vital to avoid the economic disruption 
that would result from failure of one or more key elements of the 
commuter rail network or Amtrak service. Such failure, besides 
reflecting bad policy and threatening the economy, would exact a heavy 
political price from officials who appeared neglected the existing 
railroad due to the distraction of creating a brand new infrastructure.
    A major strength of the French TGV service is that trains can use 
existing tracks where needed--whether in the approach to the heart of a 
congested city or in serving a remote, singletrack branch line such as 
that to Annecy. A maglev train could only use brand-new, purposebuilt 
infrastructure.
    Similarly, it is important to be able to utilize key elements of 
the new railroad Amtrak has proposed as soon as meaningful segments 
have been completed, rather than be forced to wait until an entire new 
technology has been extended from Washington to New York or New York to 
Boston.
    The investment needs of course are not confined to the Northeast, 
as illustrated by the passenger train TIGER grant applications which 
U.S. DOT has received. Much criticism directed at the Administration's 
high speed rail program results from the fact that there is no 
conventional rail program. Less ambitious projects are what many states 
want and can support. Federal grants which have extended service to 
Freeport and Brunswick, Maine, improved service within North Carolina, 
the Midwest, the Pacific Northwest and elsewhere have met important 
needs.
    As Congress grapples with transportation funding issues, it is 
important to bear in mind that changing demographics are associated 
with changing demands for transportation. As Secretary Foxx said in a 
February 11 House hearing, millennials and following generations are 
moving closer to cities and ``we should not plan to return to 1956''
    [in terms of near-exclusive focus on automobiles]. He also noted 
that getting people out of cars produces a major benefit for highway 
users.
    Thank you for considering our views.

    The mission of the American Association of Private Railroad Car 
Owners ``is to promote the operation, ownership and enjoyment of the 
private passenger railcar.'' Amtrak's Federal operating grant 
requirement is reduced because of the profit that Amtrak makes from 
handling private cars. We have a special interest in the viability and 
development of Amtrak's longdistance train network. Our cars also 
operate on several of Amtrak's state-supported routes. We have about 
600 dues-paying members, including 75 members who own cars which have 
passed Amtrak's stringent safety certification process for operation on 
Amtrak trains. These members own about 200 Amtrak-certified cars, as 
some members own more than one car.
                                 ______
                                 
     Response to Written Question Submitted by Hon. John Thune to 
                             Douglas Means
    Question. West Coast port delays. You stated that the West Coast 
port labor disputes have caused Cabela's to incur significant costs, 
and your company has added five to 15 days of lead time to its supply 
chain as a result of the increased port congestion.

  a.  Considering the continued failure to reach a much-needed and 
        urgent long-term solution, what are the potential effects--for 
        Cabela's and other retailers--of a complete work stoppage 
        within the affected West Coast ports?

  b.  Once the dispute is resolved, how long will it take to unwind the 
        congestion and to alleviate the lingering effects of this 
        unnecessary situation for Cabela's and other retailers?

    Answer. Although a tentative agreement has been reached, this does 
not resolve the long term issues associated with the West Coast Ports. 
Cabela's like many other retailers will continue to develop options to 
reduce the amount of import freight destined to the west coast.
    Long term we cannot be in a position of our entire supply chain 
being threatened due to a work slow down at either the west coast or 
the east coast. The current tentative agreement does not bring 
resolution to the larger long-term issues at the West Coast ports. Port 
productivity is lower there than either at the East Coast or at other 
ports around the world. The overall congestion issues and productivity 
issues were not addressed.
    As such we will review options to shift a certain portion to either 
East Coast, Canadian or Mexican ports. Sourcing locations will also be 
reviewed to look at near sourcing locations where we can rely on 
consistent supply chain predictability.
    Regarding the current situation, we anticipate that it will take 6-
8 weeks for the ports to work through the current backlogs. 
Furthermore, the industry is guessing it will take 3-6 months until the 
backlogs in the entire supply chain are resolved and normal sailing 
schedules and unloading cadences are back to normal. This timeline 
includes the railroads clearing up their backlogs and correcting their 
imbalance situation that this work disruption has caused.
    Long term, the framework for resolving disputes such as these, need 
to be reviewed. The port slowdown cost the economy and retailers a 
significant amount of money. The ability of the congress or the 
administration to intercede sooner in a dispute that has such a dire 
consequence to the entire economy must be enabled.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Kelly Ayotte to 
                             Douglas Means
    Question. In your written testimony you describe the regulatory 
burdens on the transportation industry, specifically the Federal Motor 
Carrier Safety Administration's Hours of Service regulations. I have 
heard concerns regarding these regulations from not only truckers but 
also numerous industries along the supply chain where commerce has 
slowed. C&S Wholesale Grocers, the largest food wholesaler in the 
United States, has expressed to me serious concerns regarding the 
negative impact these regulations have had on the productivity and 
efficiency of their operations. In what ways have these regulations 
impacted Cabela's business? In your experience, how have these 
regulations impacted consumers?
    Answer. There are many challenges within the transportation 
industry. One of the largest has been the issue of driver shortages, 
which has led to capacity issues. This has been a concern for a number 
of years and only continues to worsen.
    When regulations are implemented such as new hours of service 
regulations which reduces the number of hours that drivers can be on 
the road only tends to worsen the driver shortage and capacity issue. 
Trucking rates have increased and predictability of shipping has been 
challenged as a result of lack of capacity. These ultimately impact our 
customers either in unreliable service or higher costs.
    Safety on the roads is a high priority for us. However, when 
regulations are implemented in the name of safety without supporting 
studies to validate these rules, this has a negative impact to the 
shipping community. Capacity issues adds costs to all segments of the 
supply chain and ultimately the consumer.
    The Hours of Service bill was suspended for one year as part of the 
Cromnibus Appropriations Bill. We ask that this suspension be made 
permanent. In addition, increases to size and weight of trailers should 
be considered nationwide as long as the safety concerns are addressed.
    A comprehensive National Freight Policy, which addresses these 
subjects and the overall infrastructure issues, should be a priority 
for this congress.
    Thank you for the opportunity to address you regarding these 
important concerns.

                                  [all]