[Senate Hearing 114-208]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 114-208

                           NOMINATIONS TO THE
                      SURFACE TRANSPORTATION BOARD
                  AND THE FEDERAL MARITIME COMMISSION

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

                                HEARING

                               BEFORE THE

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                    ONE HUNDRED FOURTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 6, 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
                            
                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on May 6, 2015......................................     1
Statement of Senator Thune.......................................     1
Statement of Senator Nelson......................................     2
Statement of Senator Manchin.....................................    36
Statement of Senator Klobuchar...................................    39
Statement of Senator Blumenthal..................................    41
Statement of Senator Cantwell....................................    45

                               Witnesses

Daniel R. Elliott III, Nominee to be a Member of the Surface 
  Transportation Board...........................................     3
    Prepared statement...........................................     4
    Biographical information.....................................     6
Mario Cordero, Nominee to be a Commissioner of the Federal 
  Maritime Commission............................................    12
    Prepared statement...........................................    14
    Biographical information.....................................    15

                                Appendix

Letter dated May 6, 2015 to Hon. John Thune, Hon. Bill Nelson, 
  Hon. Deb Fischer and Hon. Cory Booker from Chris Jahn, 
  President, The Fertilizer Institute............................    49
Response to written questions submitted to Mario Cordero by:
    Hon, John Thune..............................................    50
Response to written questions submitted to Daniel R. Elliott III 
  by:
    Hon. John Thune..............................................    52
    Hon. Deb Fischer.............................................    54
    Hon. Jerry Moran.............................................    55

 
                           NOMINATIONS TO THE
                      SURFACE TRANSPORTATION BOARD.
                  AND THE FEDERAL MARITIME COMMISSION

                              ----------                              


                         WEDNESDAY, MAY 6, 2015

                                       U.S. Senate,
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 10:03 a.m. in 
room SR-253, Russell Senate Office Building, Hon. John Thune, 
Chairman of the Committee, presiding.
    Present: Senators Thune [presiding], Nelson, Wicker, Blunt, 
Fischer, Gardner, Cantwell, Klobuchar, Blumenthal, Schatz, and 
Manchin.

             OPENING STATEMENT OF HON. JOHN THUNE, 
                 U.S. SENATOR FROM SOUTH DAKOTA

    The Chairman. This hearing will come to order.
    Today we are going to consider the nominations of Daniel 
Elliott to be the--to be a Member, I should say, of the Surface 
Transportation Board and Mario Cordero to be a Commissioner at 
the Federal Maritime Commission. Both nominees have either 
served or are serving their respective independent agencies as 
Chairman, and both have previously been confirmed by the Senate 
by voice vote.
    As the Committee knows well, the STB plays an important 
role as the independent Federal agency with regulatory 
authority over freight railroads. Among other things, the STB 
is charged with resolving railroad rate and service disputes 
and reviewing proposed railroad mergers.
    Mr. Elliott previously joined the STB as its Chairman in 
2009. During his tenure, he worked on important policy 
questions concerning competitive access, class exemptions from 
regulation, revenue adequacy, and rate regulation. These are 
complex and interrelated issues that this Committee and various 
stakeholders believe that the Board must confront more 
effectively. That's why I have worked with Ranking Member 
Nelson to pass a bill out of this Committee that would reform 
the STB, known as the STB Reauthorization Act of 2015, or 
Senate bill 808.
    Among other things, our bill would allow Board members to 
speak to one another, and improve the Board's ability to 
function as Congress intended since it was established in 1995 
as the successor to the Interstate Commerce Commission. Our 
bill would also allow the board to initiate some 
investigations, not just respond to complaints, and require the 
STB to establish a database of pending complaints and prepare 
quarterly reports on them.
    I'm hopeful that the Senate will be able to pass this 
bipartisan STB reform bill in the near future.
    Turning to our other nominee before us today, Mario Cordero 
joined the FMC in 2011, and has served the last two years as 
Chairman. The FMC is the regulator tasked with maintaining an 
efficient and competitive international ocean transportation 
system, protecting the public from unlawful, unfair, and 
deceptive ocean practices, and resolving shipping disputes. The 
FMC also conducts oversight of marine terminal operators, and 
the agency played a role in resolving the severe port 
congestion on the West Coast that languished for nearly 10 
months and caused billions in economic losses to businesses and 
our economy earlier this year. As Chairman, however, Mr. 
Cordero has also inherited some challenges with FMC personnel 
issues. For example, a recent Inspector General Workplace 
Evaluation Report noted that FMC employees feel legacy 
leadership challenges at the agency have left a negative 
imprint on the organization that has not been fully resolved.
    I'll be asking Mr. Cordero about these issues today and 
some of the other challenges the FMC is faced with regarding 
globalization and the increasing strain being experienced at 
our Nation's ports.
    While we must fulfill our obligation to carefully conduct 
oversight of these nominees and related independent agencies, I 
also recognize the complexities that exist when it comes to the 
challenges they face. We appreciate your willingness to serve 
in these important positions and I look forward to your 
testimony today.
    With that, I will turn to our distinguished Ranking Member, 
Senator Nelson, for any remarks you'd like to make.

                STATEMENT OF HON. BILL NELSON, 
                   U.S. SENATOR FROM FLORIDA

    Senator Nelson. Thank you, Mr. Chairman, our distinguished 
chairman.
    Railroads and ports, they're quite important to this 
country and the demand for rail service is growing by leaps and 
bounds. Rail increasingly is moving a great deal of freight and 
just maintaining the network doesn't just happen on its own, it 
takes huge investments. Railroads are investing nearly $30 
billion a year and they are hiring thousands of new employees 
to maintain this rail system.
    CSX, for example, in 2013, invested $210 million just in 
Florida alone. And while the railroads are making the big 
investments, decisions at the Surface Transportation Board are 
going to have a long-lasting impact on our railroads and 
therefore on our country's economy. And it's important that 
these decisions don't discourage private investment in rail 
infrastructure.
    Now, the other area, subject area, is the ports. My state, 
we have quite a few deep water ports. Mr. Cordero, if 
confirmed, would sit on the Federal Maritime Commission, which 
makes sure that our Nation's ports are competitive. It's 
absolutely vital to this country's economy.
    To give you an example. In a recent report, Florida ports 
generated more than 680,000 jobs; $96 billion in economic 
value; more than 3 million containers; and 14 million cruise 
passengers.
    A few months ago, I was down in Panama to see the expansion 
of the canal. They say it will be completed in April 2016. It's 
likely, I think, to slip a little further but what they will 
maintain are the locks, the existing locks, but the new and 
expanded locks so that the large ships from Asia can come 
through. And that's going to be an even more efficient way of 
shipping a lot of the containers to get to the East Coast just 
to go through the canal. But for the system to work, we need 
Federal partners that will help keep our ports safe, strong, 
and secure in working with the ports as they integrate all of 
the different modes of transportation.
    And so, I look forward to the witnesses.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Nelson.
    With that, we will turn to our witnesses and begin with Mr. 
Elliott.
    Mr. Elliott, please proceed.

   STATEMENT OF DANIEL R. ELLIOTT III, TO BE A MEMBER OF THE 
                  SURFACE TRANSPORTATION BOARD

    Mr. Elliott. Thank you, Chairman Thune. Thank you, Ranking 
Member Nelson, Members of the Committee.
    I would like to thank you for this opportunity to appear 
before you today. It is an honor to be nominated by the 
President to return to the Board for a second term.
    Chairman Thune, thank you in particular for your deep 
interest in freight rail issues both in South Dakota and 
throughout the nation, including your sponsorship of the 
Surface Transportation Board Reauthorization Act of 2015 and 
your work with the Board on rail service issues. I would also 
like to thank Ranking Member Nelson, who I know has long been 
interested and involved in transportation issues. And I would 
also like to thank my family for their support, my wife Nawara, 
and my stepson Bennett. Becker could not be here today because 
he has a choir concert.
    It was a true privilege to have been Chairman of the 
Surface Transportation Board between 2009 and 2014. I have been 
involved in the rail industry issues for more than 20 years as 
a lawyer practicing before agencies and then as STB Chairman. 
It has been remarkable to see the industry continue to grow 
from bankruptcies of the 1970s to what is a rail renaissance. 
Today, the freight rail industry carries more than 1.7 billion 
tons of freight a year, including everything from agricultural 
products, energy products, manufacturing inputs, and retail 
goods. The freight rail industry also hosts passenger carriers 
from Amtrak to local commuter railroads.
    Recent changes in the freight rail traffic mix, some 
unanticipated by railroads, along with other factors, cause 
well-documented stress on the rail network. Service quality 
suffered as a result. I led the board in both formal and 
informal actions to promptly address these issues including: 
held two major hearings in 2014 focused on service issues; 
issued orders related to fertilizer, agricultural, and coal 
traffic; required rail carriers to submit extensive data on 
service performance; regularly coordinated with Federal and 
State government officials; and I met with many carriers and 
shippers and sent Board staff to the field throughout the 
country.
    This multipronged approach focused the rail industry on 
rectifying service issues, anticipating upcoming stress on the 
network, and communicating effectively with customers and 
stakeholders. If confirmed, I will press the Board to take all 
necessary action to promote a reliable and efficient rail 
network. This is also the right time for a thorough examination 
of rail economic regulatory policy much of which was adopted 
decades ago and applied to a very different rail industry. 
Should I be confirmed, I will continue the process I initiated 
to examine its core policies as applied to a modernized 
industry to ensure that the agency continues to meet the 
regulatory policy goals laid out by Congress. That includes 
ongoing reviews of competitive access, rate regulation, revenue 
adequacy, and commodity exemptions. Board assessment of these 
issues does not necessarily mean that there should be a sea 
change in the way railroads are regulated. Rather, we must be 
confident that our methods and policies take into account both 
the changes in the industry and sound economic policies.
    I also want to continue to work to make sure the Board's 
processes are fair, efficient, and accessible. It is no secret 
that the Board's rate case process is time-consuming and 
expensive. During my tenure, the Board initiated several rate 
reforms specific to rate case processes and accessibility, and 
lowered fees for non-rate complaints as described in my written 
statement. But there is more to do. Last year, I initiated an 
examination of whether agricultural shippers have true access 
to the Board's rate process and also engaged an independent 
firm to study rate reasonableness methodologies used in other 
industries and throughout the world. This is the time to 
consider new ideas and invite our stakeholders to participate 
so that the Board has the most effective and accessible 
regulatory process we can.
    If confirmed, I also look forward to continued reforms that 
increase the Board's ability to process cases efficiently and 
effectively. I understand the concern that things take too long 
and want to continue the hard work of serving the Board's 
stakeholders as quickly and transparently as possible. I have 
implemented many new policies to improve the case process at 
the Board as set forth in my written statement, and I am 
committed to find innovative ways for the Board to improve its 
customer service and leverage the considerable staff talent 
that we have.
    Thank you, again, for the opportunity to appear before you 
and I look forward to your questions.
    [The prepared statement and biographical information of Mr. 
Elliott follow:]

Prepared Statement of Daniel R. Elliott III, Nominee to be a Member of 
                    the Surface Transportation Board
    Chairman Thune, Ranking Member Nelson, members of the Committee, I 
would like to thank you for this opportunity to appear before you 
today. I had the privilege to serve as the Surface Transportation 
Board's Chairman from 2009 to 2014, and it is an honor to be nominated 
by the President to return to the Board for a second term.
    Before I begin my remarks, I would like to thank Chairman Thune for 
your deep interest in freight rail issues both in South Dakota and 
throughout the Nation, including your sponsorship of The Surface 
Transportation Board Reauthorization Act of 2015 and your work with the 
Board on rail service issues. I would also like to thank Ranking Member 
Nelson, who I know has long been interested and involved in 
transportation issues. And I would like to thank my family for their 
support: my wife Nawara and my stepsons Bennett and Becker.
    I feel so fortunate to have been Chairman of the Surface 
Transportation Board during what has been a critical period in the rail 
industry. And I do not use the word ``critical'' lightly. On the brink 
of financial ruin in the 1970s, the freight rail industry in 2013 
originated more than 1.7 billion tons of freight. The commodities 
carried by rail are used to stock our pantries, heat our homes, supply 
our Nation's manufacturing sector and fulfill many other needs. And a 
host of passenger rail carriers--from Amtrak to local commuter 
railroads--utilize freight rail lines, thereby reducing congestion on 
the Nation's highways.
    Recent changes in the freight rail traffic mix, some unanticipated 
by the railroads, caused well-documented stress on the rail system. 
Service quality for many rail shippers suffered, especially during 
2014. The Board's role in such situations is key and, if confirmed, I 
will continue to make sure the agency keeps service quality for all 
shippers a focus. During my tenure, the agency undertook major steps to 
improve rail service. The Board held two major hearings in 2014 on 
service issues; issued orders related to fertilizer, agricultural and 
coal traffic; required rail carriers to submit extensive data on 
service performance on an interim basis; proposed rules that would 
require service performance data reporting on a permanent basis; and 
regularly coordinated with our counterparts in other parts of Federal 
and state government. I met with many carriers and shippers to resolve 
service issues, and I sent Board staff to the field in South Dakota, 
North Dakota, Minneapolis, and Montana to do the same. I firmly believe 
that the Board's even-handed efforts focused the rail industry on 
rectifying service issues, anticipating upcoming stress on the network, 
and communicating effectively with customers and stakeholders on a 
real-time basis. If confirmed, I will press the Board to take all 
necessary action to promote a reliable rail network, including ensuring 
that the Board and other agencies, as well as shippers, have the data 
needed to properly assess rail service difficulties. Ultimately, I 
think we are in the midst of a necessary assessment of infrastructure 
demands that requires coordination among our Nation's rail carriers, 
their customers, local communities and policy makers. I am proud of the 
Board's ability to bring these diverse parties to the table. That sort 
of collaboration goes a long way toward ensuring that our efficient 
freight rail network continues to be the envy of the world.
    The rail industry's growth also makes this an important period for 
a thorough examination of rail economic regulatory policy. Many of the 
agency's longstanding policies were adopted decades ago when the rail 
industry was struggling to stay alive. Now that the industry is both 
financially healthier and restructured with far fewer large railroads, 
I believe the Board should continue the process I started to examine 
its core policies to ensure that they fit today's modern rail industry 
and meet the goals that Congress laid out for the agency. Throughout 
this inquiry, the Board must fulfill the mandate we received from 
Congress--balancing the 15 Rail Transportation Policy factors in the 
Interstate Commerce Act in a manner that serves the public.
    To this end, over the last 5 years, I led the Board to an ongoing 
review of competitive access, rate regulation, revenue adequacy, 
commodity exemptions and other core policies. The Board has initiated 
proceedings to examine these important issues so that it can make a 
determination as to whether any of its processes and policies should 
change, and if so, how. Board assessment of these issues does not 
necessarily mean that there should be a sea change in the way railroads 
are regulated. Rather, it means that we have to be confident that the 
manner in which the Federal Government regulates rail rates and 
competition is the product of thoughtful decision-making that takes 
into account a modernized rail industry and sound economic policies.
    The Board also has a continuing responsibility to make sure that 
our processes are fair, efficient and accessible. The Board's rate case 
process is complicated, time consuming and expensive--a view that I 
know is shared by the agencies' stakeholders. During my tenure, the 
Board initiated several reforms, including the adoption of rules that 
(1) clarified certain revenue allocation issues in large rate cases, 
(2) raised the award caps for smaller rate cases, and (3) changed the 
interest rate for damage awards. In addition, in several recent complex 
rate cases, the Board developed a modified test for the threshold 
market dominance inquiry. I also thought that it was important to 
reduce the fees the Board charges for non-rate related complaints and 
the Board did just that in 2011, lowering fees from $20,600 to $350.
    But there is more to do to make sure that all of our stakeholders 
have a meaningful path to the Board. During my tenure, the agency 
initiated an examination of whether agricultural shippers have true 
access to the Board's rate reasonableness process and also engaged an 
independent firm to study the wide variety of rate reasonableness 
methodologies used in other industries and throughout the world. This 
is the time to consider new ideas and invite our stakeholders to 
participate in that process so that the Board has an effective 
regulatory process that makes sense today.
    If confirmed, I also look forward to continuing reforms that 
increase the Board's ability to process cases efficiently and 
effectively. I know that shippers and railroads alike believe that it 
takes too long to adjudicate cases at the Board. I understand that 
concern and want to continue the hard work of serving the Board's 
stakeholders as quickly and transparently as possible. During my 
tenure, I restructured several Board departments to increase efficiency 
and accountability. After several years of budget uncertainty that 
impacted the agency's ability to hire on a large scale, I am pleased 
that in 2014 the Board hired 15 employees. These strategic hires will 
enhance the agency's ability to move cases more expeditiously. In 2014, 
I set up a program that allows the Board to use Administrative Law 
Judges from other agencies to resolve disputes related to discovery--
thus freeing up Board staff to focus on the substantive aspects of 
cases. I was pleased to see that the first cases were assigned to an 
ALJ under that program just a few weeks ago. I also began an 
examination of how the Board processes the most complex cases--how 
teams from various offices are assigned, how they work together, how 
internal deadlines are established and monitored. The Board's FY 2016 
budget request reflected the growth in resource demands for rate cases 
in particular. If confirmed, I commit to find innovative ways for the 
Board to improve its customer service and leverage the considerable 
staff talent we have.
    Finally, I want to continue my work in turning the Board into more 
of a problem solver and not just an adjudicator. I grew the Board's 
alternative dispute resolution program, increasing the agency's use of 
mediation and broadening our arbitration rules. I bolstered the Rail 
Customer Public Assistance program, which helps many smaller shippers 
that may not be in a position to file a formal case at the Board. The 
program has resolved thousands of transportation matters since the 
beginning of my term, and is cited by rail shippers and rail carriers 
alike as a tremendous success at the agency.
    Thank you again for the opportunity to appear before you. If 
confirmed, I look forward to rejoining the Board and working with my 
fellow Board Members and Board staff to continue the progress that we 
have made.
                                 ______
                                 
                      a. biographical information
    1. Name (Include any former names or nicknames used): Daniel Robert 
Elliott III.
    2. Position to which nominated: Chairman of the Surface 
Transportation Board.
    3. Date of Nomination: November 12, 2014.
    4. Address (List current place of residence and office addresses):

        Residence: Information not released to the public.
        Office: Surface Transportation Board, 395 E Street, SW, Suite 
        1220, Washington, DC 20423.

    5. Date and Place of Birth: December 1, 1962; Ann Arbor, Michigan, 
USA.
    6. Provide the name, position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Spouse--Nawara T. Omary, Senior Technical Project Manager, 
        Sprint Corporation; children: James Bennett Spear, 16; Justin 
        Becker Spear, 11.

    7. List all college and graduate degrees. Provide year and school 
attended.

        Ohio State College of Law, J.D., 1989
        University of Michigan, B.A., 1985

    8. List all post-undergraduate employment, and highlight all 
management level jobs held and any non-managerial jobs that relate to 
the position for which you are nominated.

        Bishop, Cook, Purcell & Reynolds (now Winston & Strawn LLP), 
        Washington, D.C. 1989-1990.

        Marshman, Snyder, Berkley & Kapp, Cleveland, Ohio 1990-1991

        Chester Giltz & Associates, Cleveland, Ohio 1991-1992

        United Transportation Union, Lakewood, Ohio 1993-2009. One of 
        my responsibilities in this position was to monitor and handle 
        cases at the Surface Transportation Board.

        Surface Transportation Board, Washington, D.C. 2009 to present. 
        I am the chief executive of the agency and thus responsible for 
        its regulatory agenda and overall management.

    9. Attach a copy of your resume. A copy is attached.
    10. List any advisory, consultative, honorary, or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years. None.
    11. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational, or other institution within the last five years.

        DRE RE, LLC, Owner

    12. Please list each membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, frate1nal, benevolent or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any 3such club or organization 
restricts 1nembership on the basis of sex, race, color, religion, 
national origin, age, or handicap.

        Cleveland Tenants Organization, Board Member, 1997-2009

        Fairmount Presbyterian Church, 1995-2009, Deacon, Trustee, 
        Elder

        Christian Legal Services, Board Member, 2006

        American Bar Association, Member, 2008-2009

        Supreme Court of Ohio Bar, 1989-2009

    13. Have you ever been a candidate for and/or held a public office 
(elected, non-elected, or appointed)? If so, indicate whether any 
campaign has any outstanding debt, the amount, and whether you are 
personally liable for that debt. No.
    14. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past ten years. Also list all offices 
you have held with, and services rendered to, a state or national 
political party or election committee during the same period.

        Barack Obama, President, 2008--$2,000

        Sherrod Brown, U.S. Senate, 2006--$1,250

        Sherrod Brown, U.S. Senate, 2012--$2,500

    15. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals, and any other special recognition 
for outstanding service or achievements. None.
    16. Please list each book, article, column, or publication you have 
authored, individually or with others. Also list any speeches that you 
have given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.

    Books/Articles:

        The Railway Labor Act, Senior Editor (BNA 2d ed. 2005 & Supps. 
        2006-2007)

        The Railway Labor Act Bargaining Dilemma, Journal of 
        Transportation Law, Logistics and Policy Volume 74 (2007)

        The Railway Labor Act Cumulative Supplement, Contributing 
        Editor (BNA 1998, 2000 & 2001)

        The Shore Line Status Quo Requirement, Cleveland State Law 
        Review Volume 46 (1998)

    Speeches:

        Surface Transportation Board Update, American Short Line and 
        Regional Railroad Association, Southern Region
        Naples, Fla. (2014)

        Surface Transportation Board Update, The Fertilizer Institute 
        North American Transportation Conference
        Tucson, Ariz. (2014)

        Surface Transportation Board Update, South Dakota Farmers' 
        Union
        Aberdeen, SD (2014)

        Rail Service Update, American Bakers' Association
        Washington, D.C. (2014)

        The Surface Transportation Board's Enforcement of PRIIA
        Chicago, Ill. (2014)

        Spring 2014 Update, North American Rail Shippers Association
        San Francisco, Calif. (2014)

        Spring 2014 Update, Industrial Minerals Association
        Washington, D.C. (2014)

        Spring 2014 Update, National Coal Transportation Association
        Hilton Head, SC (2014)

        Fall 2013 Update, Rail Trends Conference
        New York, NY (2013)

        California Short Line Railroad Association Annual Meeting
        San Diego, CA (2013)

        North American Rail Shippers Association
        Baltimore, MD (2013)

        Railtrends
        New York, NY (2012)

        Nat. Assoc. of Rail Shippers
        Chicago, IL (2012)

        Dahlman-Rose Transportation Conference
        New York, NY (2011)

        RBC Capital Markets
        Miami, FL (2010)

        Midwest Shipper's Association
        Minneapolis, MN (2010)

        A New Philosophy for the STB, Association of Transportation Law 
        Professionals
        Washington, D.C. (2010)

        American Short Line and Regional Railroad Association
        Orlando, Fla. (2010)

        National Coal Transportation Association
        San Antonio, Texas (2010)

        Freight Rail Sustainability: Opportunities and Barriers, 
        Transportation Research Board
        Washington, D.C. (2010)

        The Need for Change and Openness, Wolfe Research Transport 
        Conference
        Washington, D.C. (2009)

        Railroading in the Warren Buffett Era, Washington Chapter 
        Transportation Research Forum
        Washington, D.C. (2009)

        The Green Technologies of Rail and Steel, Steel Manufacturer's 
        Association
        Washington, D.C. (2009)

        CREATEing a New Chicago, William 0. Lipinski Symposium on 
        Transportation Policy
        Chicago, Ill. (2009)

    17. Please identify each instance in which you have testified 
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each 
testimony.

        Letter to Senator Rockefeller and Senator Thune re S. 2777, 
        Surface Transportation Board Reauthorization Act of 2014, 
        September 16, 2014

        Letter to the Record, U.S. Senate Committee on Commerce, 
        Science, and Transportation Hearing, Freight Rail Service: 
        Improving the Performance of America's Rail System, September 
        10, 2014

        Testimony Before U.S. Senate, Committee on Commerce, Science, 
        and Transportation, Hearing on Federal Role in National Rail 
        Policy, September 15, 2010

        Testimony Before U.S. Senate Committee on Commerce, Science, 
        and Transportation, Hearing on Nomination to be Chairman of the 
        Surface Transportation Board, July 29, 2009

    18. Given the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated, what in your background or employment experience do you 
believe affirmatively qualifies you for appointment to the position for 
which you have been nominated, and why do you wish to serve in that 
position?
    My experience over the last 5 years as Chairman of the Surface 
Transportation Board, as well as my prior experience as a lawyer for 
the United Transportation Union, qualify me for a reappointment to the 
chairmanship of the Board. Based on my work at the United 
Transportation Union, I came to the Board already familiar with both 
the governing statute and the top issues affecting the rail industry. 
Since joining the Board in 2009, I have led the Board to a review of 
important policy questions that must be reexamined in light of changing 
conditions, including competitive access, paper barriers, class 
exemptions from regulation, revenue adequacy and rate regulation. Many 
of these questions--which are complex and interrelated--have not been 
addressed by the Board in a comprehensive fashion for decades. I 
believe I am best suited to continue the Board's efforts so that the 
agency can complete its reviews and revise its approaches as warranted.
    19. What do you believe are your responsibilities, if confirmed, to 
ensure that the department/agency has proper management and accounting 
controls, and what experience do you have in managing a large 
organization?
    If confirmed, I will continue to have responsibility for the 
management and operation of the Surface Transportation Board. Thus, I 
will continue to ensure that the Board has the necessary tools to 
fulfill its mandate and that the Board carries out its duties with the 
highest degree of fiscal and ethical accountability. Over the last 5 
years, my management achievements include (a) developing and hiring new 
members of the Senior Executive Service, (b) restructuring Board 
departments to increase efficiency, (c) growing the Board's public 
assistance program, and (d) effectively utilizing the Board's budget to 
achieve mission-critical objectives. If confirmed, I will continue to 
ensure that the Board follows all applicable statutes and regulations.
    20. What do you believe to be the top three challenges facing the 
department/agency, and why?
    The first challenge facing the Board is the serious degradation of 
rail service levels that began this past winter. These service problems 
are the result of a combination of factors: dramatic changes in the 
rail traffic mix and volume, extre1ne winter weather conditions, and 
management and resource decisions by rail carriers. Rail carriers' 
recent difficulty in providing acceptable levels of service has 
impacted both freight rail shippers and passenger rail customers. Under 
my direction, the Board has been proactive in addressing rail service 
issues by closely monitoring rail service metrics, issuing targeted 
orders that improve service levels and increase accountability, holding 
numerous hearings/meetings to gain stakeholder input, and making Board 
staff available to resolve immediate service crises. The Board must 
continue to facilitate the resolution of service issues so that 
interstate commerce flows as smoothly and efficiently as possible in 
support of the U.S. economy.
    The second challenge facing the Board is the need to reassess long-
standing policy positions in light of a dramatically altered railroad 
industry. Due in large part to the efficiency gains that resulted from 
the Staggers Act, a rail industry that was on the brink of ruin in the 
late 1970s is now enjoying a sustained period of healthier profits and 
increased ability to attract capital. It is critical that the Board 
carefully consider whether its major policies are effective in 
fulfilling our Congressional mandate in today's environment. To this 
end, I have led the Board to review competition, rate regulation, paper 
barriers and commodity exemptions. I am also leading the Board's 
efforts to implement the Passenger Rail Investment and Improvement Act 
of 2008, the statute designed to improve Amtrak's on-time performance.
    The third challenge facing the Board is reducing the complexity, 
cost, and processing time of the cases that come before it. Rail 
shippers have long complained that the Board's rate regulation 
processes are too complicated and expensive to provide meaningful 
relief. During my tenure, I have shepherded a number of reforms 
intended to address this issue, such as completing a rulemaking that 
raised/eliminated the award caps for the simplified methods of rate 
regulation, initiating a proceeding to examine whether current rate 
methodologies are adequate for agricultural shippers, and awarding a 
contract for an independent study of alternative rate methodologies. 
The increased complexity of rate regulation also taxes the agency's 
resources. I have initiated a review of the Board's internal rate 
procedures aimed at reducing errors and increasing efficiencies in the 
Board's processing of rate cases. In FY2014, a modest increase in the 
Board's budget enabled me to increase the Board's staffing levels. The 
agency must continue to improve its ability to process all cases 
efficiently.
                   b. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing dealings with business associates, 
clients, or customers. Please include information related to retirement 
accounts: None.
    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation, or practice with any business, 
association or other organization during your appointment? If so, 
please explain: No.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    The only relationship that may present any appearance of a conflict 
of interest would be my former employer, United Transportation Union, 
which has appeared before the Board as a party in various proceedings 
both before and after I joined the Board.
    4. Describe any business relationship, dealing, or financial 
transaction which you have had during the last ten years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    See Answer 3.
    5. Describe any activity during the past ten years in which you 
have been engaged for the purpose of directly or indirectly influencing 
the passage, defeat, or modification of any legislation or affecting 
the administration and execution of law or public policy.
    I appeared before the State of Minnesota legislative committees for 
one day in March of 2005 to speak in support of a rail safety bill on 
the issue of preemption.
    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.
    My past affiliation with the United Transportation Union has never 
had any effect on my decisions at the Surface Transportation Board and, 
if confirmed, that will continue to be the case. Consistent with my 
Ethics Agreement in 2009, I have recused myself when applicable from 
any case before the Board that involves any United Transportation Union 
matter on which I worked during my employment there. Moreover, having 
been a member of the Supreme Court of Ohio, I have abided and will 
continue to abide by the Ohio Rules of Professional Conduct and Code of 
Professional Responsibility with regard to any conflicts of interest 
provisions.
                            c. legal matters
    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain: No.
    2. Have you ever been investigated, arrested, charged, or held by 
any Federal, State, or other law enforcement authority of any Federal, 
State, county, or municipal entity, other than for a minor traffic 
offense? If so, please explain.
    I was arrested once in 1986 in Columbus, Ohio for disorderly 
conduct and open container in a vehicle (not driving). I pled guilty to 
these two minor misdemeanors and paid a fine. I was also charged with 
two separate housing violation actions in 2008 in Shaker Heights, Ohio. 
Both cases were dismissed.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain.
    I was involved in two eviction cases as a plaintiff in 2006 in 
Shaker Heights, Ohio. Both cases were decided in my favor plus back 
rent.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, please explain.
    See Answer 2.
    5. Have you ever been accused, formally or informally, of sexual 
harassment or discrimination on the basis of sex, race, religion, or 
any other basis? If so, please explain: No.
    6. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination.
    Agency was voted Best Place to Work in Federal Government for Small 
Agencies by the Partnership for Public Service all four years I served 
as Chairman. Agency also received Most Innovative Agency from the 
Partnership the two years the award has existed. The agency also 
received the highest effective leadership score for all four years.
                     d. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committees? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosures? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses, including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                                 ______
                                 
                      Resume of Daniel R. Elliott
Summary
    An experienced government executive and attorney in the fields of 
transportation economic regulation and railway labor. Leading a Federal 
independent regulatory agency for the last five years to numerous 
personnel awards and innovative policy changes.
Experience

August 2009 to present--Chairman, Surface Transportation Board

   Appointed to the Board and designated Chairman by President 
        Obama. Responsibilities include management of the agency and 
        its $31 million dollar budget, creation of economic regulatory 
        policy, and issuance of administrative decisions on various 
        types of cases.

   Contact with members of U.S. Congress and state and Federal 
        Executive Branch leadership to inform them of and explain 
        activities at the Board; confer with corporate and trade 
        association heads on relevant transportation matters and the 
        state of the rail industry on a regular basis; testify at 
        congressional hearings regarding railroad issues; and give 
        speeches often at large trade association conventions as well 
        as smaller group meetings.

   Manage a staff of 140. Revitalized the agency by making 
        organizational changes and increased morale through an open 
        door policy. Agency was awarded Best Place to Work in Federal 
        Government for Small Agencies by the Partnership for Public 
        Service all four years of my tenure, Most Innovative Agency for 
        the two years the award has existed, and highest effective 
        leadership score for all four years.

   Rule on and draft case decisions that come before the Board, 
        including complex rate challenges, rail construction projects, 
        Amtrak performance, mergers and acquisitions, and a large 
        variety of other matters; create and review railroad economic 
        regulatory policies informally and formally through studies and 
        Board proceedings, such as revising rate case processes to make 
        them more accessible, devising a new arbitration and mediation 
        program, beginning proceedings on revenue adequacy, reciprocal 
        switching, grain rail rates, auditing and review of rate case 
        processes, studying new rate regulatory methods, among others.

1993-2009--Associate General Counsel, United Transportation Union

   Handled Federal agency matters in front of the Surface 
        Transportation Board, National Mediation Board, National Labor 
        Relations Board, and Department of Labor. Duties included 
        testimony, trials, and drafting pleadings.

   Labor and employment litigation on behalf of union mainly 
        involving cases in Federal district and appellate courts. 
        Served as sole counsel on United Transp. Union v. Gateway 
        Western Ry. Co., 284 F.3d 710 (7th Cir. 2002); Ryan v. Union 
        Pacific R.R. Co., 286 F.3d 456 (7th Cir. 2002); and Adirondack 
        Transit Lines, Inc. v. United Transp. Union, Local 1582, 305 
        F.3d 82 (2d Cir. 2002).

1991-1992 · Associate, Chester Giltz & Associates

   Commercial and residential real estate appraisal.

1990-1991--Associate, Marshman, Snyder, Berkley & Capp

   Research and drafting memoranda and motions for general 
        litigation practice.

1989-1990--Associate, Bishop, Cook, Purcell & Reynolds

   Research and drafting memoranda for general litigation 
        practice.
Education
        May 1989--Juris Doctor, Ohio State College of Law

        May 1985--Bachelor of Arts, Political Science, University of 
        Michigan

        Varsity track letterman 1982-1983

    The Chairman. Thank you, Mr. Elliott.
    Mr. Cordero?

STATEMENT OF MARIO CORDERO, TO BE A COMMISSIONER OF THE FEDERAL 
                      MARITIME COMMISSION

    Mr. Cordero. Chairman Thune, Ranking Member Nelson, and 
Members of the Committee, it is a pleasure and an honor to be 
here today to discuss my nomination for a second term as 
Commissioner of the Federal Maritime Commission. With me here 
today is my wife, Gloria, my wife of approximately 41 years.
    Having served nearly 4 years at the Commission, I 
appreciate the Committee considering my reappointment to 
continue leading the Federal Maritime Commission, a small 
independent agency with a large global responsibility.
    I want to acknowledge my fellow Commissioners, Rebecca Dye, 
Richard Lidinsky, Michael Khouri, and William Doyle. As 
Chairman, I have the administrative responsibility to keep our 
agency headed in the right direction, but the full Commission, 
as a collegial body, is the engine that propels the agency 
forward. In that respect, the advice, support, and committed 
participation of my fellow Commissioners has been key to the 
FMC's success. Also, let me express to the Commission staff my 
deep admiration for each of them and the work that they do day 
in and day out, despite Federal workplace challenges. 
Recognizing the importance of working in a positive atmosphere, 
facing these challenges has been my priority for the FMC since 
I joined the Commission in 2011. By taking substantive steps to 
address employee engagement, I will continue to build on the 
FMC's organizational strengths.
    I referred to the Commission as a small agency with large 
global responsibilities, and so it is. The FMC, as of today, 
has 119 employees and operates on a very lean budget. The FMC's 
work includes monitoring more than 300 active liner shipping 
agreements in the trans-Pacific, Latin American, trans-
Atlantic, and other U.S. trades; vetting and licensing 
thousands of ocean transportation intermediaries; enforcing the 
prohibited act provisions of the Shipping Act; providing 
mediation services and assistance with cargo shipment problems 
and cruise passenger issues; and overseeing the activities and 
impacts of government-controlled foreign carriers and foreign 
shipping laws and practices.
    Those activities advance two strategic goals: to maintain 
an efficient and competitive international ocean transportation 
system in the U.S. trades; and to protect the shipping public, 
the American exporter, importer, consumer, and producers from 
unfair, unlawful and deceptive ocean transportation practices. 
In effect, the FMC exercises a role similar to that of the 
Federal Trade Commission but in the international liner 
shipping arena. I am pleased to report that we have the in-
depth expertise to accomplish those goals.
    Ultimately, the Commission works to protect the American 
importer, exporter, and consumer.
    The importance of the Commission's regulatory role is 
imperfectly measured by the number of agreements we review and 
monitor, the number of transportation intermediaries we vet, 
the number of enforcement actions we take, and the number of 
American shippers we assist each day. Its impact is large but 
mainly unseen by the American consumer and shipper. The 
Commission's efforts to ensure a fair, efficient, and 
competitive liner shipping system is felt in the family budgets 
and oversea trade opportunities of all Americans and many 
American industries.
    Last week, a trade journal attributed an interesting 
comment to the Chairman of a major European shipper 
organization. In discussing changes taking place in the liner 
shipping industry, he reportedly ``expressed regret that the 
European Commission did not have the same resources as the FMC 
to devote to the oversight of the ocean shipping industry.''
    That is a sentiment I understand and appreciate. On the 
same journal's annual list of the most influential people in 
the container shipping industry, it ranked the FMC as number 
ten as we continue to keep a very close eye when considering 
the interest of the U.S. public during a period of 
consolidation in container shipping trades.
    The liner shipping industry is currently involved in a 
dynamic series of major changes, occasionally bordering, quite 
frankly, on the chaotic. As it adjusts to the financially 
challenging market situation that has existed in the past 
several years and is likely to continue for several more, the 
Commission has had and will continue to have multiple roles 
with respect to those ongoing industry changes. We evaluate the 
potential effects of the new, large, multi-carrier alliances 
and closely monitor competitive behavior once they take effect 
so that the Commission can react early to adverse changes if 
those changes are necessary.
    As you may be aware, the congestion at U.S. ports has 
increased significantly which negatively impacts our import and 
export communities. The Commission has been involved in 
proactive outreach efforts to reduce the likelihood of future 
port-related congestion. We are working with our nation's 
ports, our shippers, our trucking companies, and carriers to 
identify key problems and issues and encourage cooperative 
efforts among those stakeholders to mitigation and/or correct 
the problem. In light of the challenges related to global 
alliances, the Commission has engaged with fellow global 
international regulators, the European Union, and the Chinese 
Ministry of Transportation to exchange views on a global liner 
industry. That outreach process began with the Global 
Regulatory Summit in December 2013 here in Washington. A second 
discussion is being planned for this summer.
    If confirmed, I look forward to working with the Committee 
to ensure that our Nation benefits from fair, efficient, and 
competitive ocean transportation system.
    Thank you for your kind consideration. I will be happy to 
answer any questions you may have.
    [The prepared statement and biographical information of Mr. 
Cordero follow:]

            Prepared Statement of Mario Cordero, Chairman, 
                      Federal Maritime Commission
    Chairman Thune, Ranking Member Nelson, and Members of the 
Committee, it is a pleasure and an honor to be here today to discuss my 
nomination for a second term as Commissioner of the Federal Maritime 
Commission. Having served nearly four years at the Commission, I 
appreciate the Committee considering my reappointment to continue 
leading the Federal Maritime Commission--a small independent agency 
with large global responsibilities.
    I want to acknowledge my fellow Commissioners, Rebecca Dye, Richard 
Lidinsky, Michael Khouri, and William Doyle. As Chairman, I have the 
administrative responsibility to keep our agency headed in the right 
direction, but the full Commission, as a collegial body, is the engine 
that propels it forward. In that respect, the advice, support, and 
committed participation of my fellow Commissioners has been key to the 
FMC's success. Also, let me express to the Commission staff my deep 
admiration for each of them and the work they do, day in and day out. 
The FMC does excellent work and will continue to do so, despite Federal 
workplace challenges. Recognizing the importance of working in a 
positive atmosphere, facing these challenges has been my priority for 
the FMC since I joined the Commission in June 2011. By taking 
substantive steps to address employee engagement, I will continue to 
build on the FMC's organizational strengths.
    I referred to the Commission as a small agency with large global 
responsibilities, and so it is. The FMC has 119 employees and operates 
on a very lean budget. The FMC's work includes monitoring more than 300 
active liner shipping agreements in the trans-Pacific, Latin American, 
trans-Atlantic, and other U.S. trades; vetting and licensing thousands 
of ocean transportation intermediaries; enforcing the prohibited act 
provisions of the Shipping Act; providing mediation services and 
assistance with cargo shipment problems and cruise passenger issues; 
and overseeing the activities and impacts of government-controlled 
foreign carriers and foreign shipping laws and practices.
    Those activities advance two strategic goals: to maintain an 
efficient and competitive international ocean transportation system in 
U.S. trades; and to protect the U.S. shipping public--American 
exporters, importers, consumers, and producers--from unlawful, unfair, 
and deceptive ocean transportation practices. In effect, the FMC 
exercises a role similar to that of the Federal Trade Commission but in 
the international liner shipping arena, and I am pleased to report that 
we have the in-depth expertise to accomplish those goals.
    Ultimately, the Commission works to protect American importers, 
exporters, and consumers. Our Bureau of Trade Analysis is responsible 
for monitoring agreements among some of the world's largest vessel 
operators to ensure that carriers do not abuse the limited antitrust 
immunity that they receive pursuant to the Shipping Act. I will add 
that our Bureau of Enforcement does have a no-nonsense reputation in 
dealing with unlawful, unfair, and deceptive practices. Also, our 
Bureau of Certification and Licensing ensures that ocean transportation 
intermediaries have the experience needed to handle international 
shipments competently and that they maintain the required financial 
responsibility to protect U.S. consumers of their services.
    The importance of the Commission's regulatory role is imperfectly 
measured by the number of agreements we review and monitor, the number 
of transportation intermediaries we vet, the number of enforcement 
actions we take, and the number of American shippers we assist each 
day. Its impact is large but mainly unseen by the American consumer and 
shipper. Last year, roughly 11.9 million twenty-foot equivalent units 
(TEUs) of U.S. exports and 19.2 million TEUS of imports transited U.S. 
ports, a large portion going to or coming from Asia but with 
considerable volumes moving to and from Europe and Latin America as 
well. The Commission's efforts to ensure a fair, efficient, and 
competitive liner shipping system is felt in the family budgets and 
overseas trade opportunities of all Americans and many American 
industries.
    Last week, a trade journal attributed an interesting comment to the 
chairman of a major European shippers' organization. In discussing 
changes taking place in the liner shipping industry, he reportedly 
``expressed regret that the European Commission did not have the same 
resources as the FMC to devote to the oversight of the ocean shipping 
industry.'' That is a sentiment I understand and appreciate. On the 
same journal's annual list of the most influential people in container 
shipping, the Commission was ranked as number ten as we continue to 
keep a close eye when considering the interests of the U.S. public 
during a period of consolidation in the container shipping trades.
    The liner shipping industry is currently involved in a dynamic 
series of major changes--occasionally bordering on the chaotic--as it 
adjusts to the financially challenging market situation that has 
existed for the past several years and is likely to continue for 
several more. Not just in U.S. trades, but globally. Following the 
world-wide recession of late 2008 through 2009, the growth in 
international trade has been slower than the on-going expansion of 
liner fleets. Carriers' revenues have been negatively affected. To 
reduce costs and enhance efficiencies, carriers are ordering larger, 
fuel-efficient vessels that can provide economies of scale and lower 
fuel costs. The expense and risk of investing in and operating these 
huge vessels, coupled with the lines' expansive service networks, could 
easily have led to significant merger and acquisition activity--and, 
thereby, resulted in greater market concentration. That has not 
happened. Instead the lines established cost-reducing, multi-carrier, 
operational agreements, informally known as ``alliances,'' that 
preserve the member lines' independent marketing and pricing. 
Significantly, such market concentration did not occur as these 
agreements were required to be filed, reviewed, and monitored by the 
Commission in order to operate.
    In addition, many lines cut costs by exiting unprofitable, non-core 
businesses. In particular, they have largely divested their truck 
chassis assets--the trailers used to carry ocean containers between 
seaports and inland distribution centers, warehouses and rail heads. 
What chassis ownership and provisioning to its customers will 
ultimately look like is still a work-in-progress.
    Given China's slowing economic growth, the precarious financial 
situation in Europe, and the poor GDP growth forecasts for some of 
Latin America's largest economies, the lines are expected to continue 
to face market-driven revenue pressures--despite the reduction in their 
fuel costs from low oil prices. In short, incentives for alliances to 
intensify their operational cooperation--and concerns about the 
competitive consequences--are unlikely to diminish soon.
    The Commission has had, and will continue to have, multiple roles 
with respect to these on-going industry changes. We evaluate the 
potential effects of the new, large, multi-carrier alliances and 
closely monitor their competitive behavior once they take effect so 
that the Commission can react early to adverse changes if necessary.
    We also oversee agreements under which various stakeholder 
organizations work out ways to ensure that enough chassis are available 
at U.S. ports when and where they are needed, and discuss other steps 
to help reduce marine terminal congestion. FMC staff also works with 
shippers, truckers, and other affected parties to help them address 
issues related to shipment delays and associated charges which result 
in increased and/or unforeseen costs.
    As you may be aware, congestion at U.S. ports has increased 
significantly which negatively impacts our import and export 
communities. The Commission has been involved in pro-active outreach 
efforts to reduce the likelihood of future port-related congestion. We 
are working with our Nation's ports, shippers, trucking companies, and 
carriers to identify likely problem issues and encourage cooperative 
efforts among those stakeholders to mitigate or correct them. In light 
of the challenges related to alliances, the Commission has engaged with 
its fellow global regulators, the European Commission and the Chinese 
Ministry of Transportation, to exchange views on the global liner 
industry. That outreach process began with the Global Regulatory Summit 
in December 2013. A second discussion is being planned for this summer.
    If confirmed, I look forward to working with the Committee to 
ensure that our Nation benefits from a fair, efficient and competitive 
ocean transportation system.
    Thank you for your consideration. I will be happy to answer any 
questions you may have.
                                 ______
                                 
                      a. biographical information
    1. Name (Include any former names or nicknames used): Mario 
Cordero.
    2. Position to which nominated: Commissioner, Federal Maritime 
Commission.
    3. Date of appointment: Nominated January 13, 2015.
    4. Address (List current place of residence and office addresses):

        Residence: Information not released to the public.
        Office: 800 N. Capitol Street NW, Washington, DC 20573.

    5. Date and Place of Birth: August 31, 1952; Los Angeles, CA.
    6. Provide the name, position, and place of employment for your 
spouse (if married) and the names and ages of your children (including 
stepchildren and children by a previous marriage).

        Gloria Cordero, spouse--owner, Cordero & Associates

        Celine Cordero, daughter, 38 years of age

        Mario Andres Cordero, son, 35 years of age

    7. List all the college and graduate degrees. Provide year and 
school attended.

        Santa Clara University School of Law, J.D. 1975-1978

        University of Southern California 1974-1975

        California State University Long Beach, B.A. 1970-1974

    8. List all post-undergraduate employment and highlight all 
management level jobs held and any non-managerial jobs that related to 
the position for which you are nominated.

        Chairman, Federal Maritime Commission, 2013 to present
        Washington, D.C.

        Commissioner, Federal Maritime Commission, 2011-2013
        Washington, D.C.

        Commissioner, Board of Harbor Commissioners, 2003-2011
        Port of Long Beach, CA

        Senior Attorney, Law Office of Wayne Singer, 2009-2011
        Long Beach, CA

        Adjunct Instructor of Political Science (part-time), 1995-2011
        Long Beach City College

        Counsel, Safeco Insurance, 2007-2008
        Long Beach, CA

        Attorney, Adelson, Testan & Brundo, 2001-2006
        Long Beach, CA

        Attorney, Altman & Shoemaker, 1998-2001
        Encino, CA

        Attorney, Ochoa & Sillas, 1996-1998
        Los Angeles, CA

        Attorney, Robin, Carmack & Gonia, 1993-1996
        Tustin, CA

        Attorney, Nezin, Maher & Johnson, 1988-1993
        Tustin, CA

        Counsel, Industrial Indemnity Insurance 1987-1988
        Los Angeles, CA

        Attorney, State Compensation Insurance Fund 1986-1987
        Los Angeles, CA

        Sole Practitioner, 1982-1986
        Long Beach, CA

    9. Attach a copy of your resume. A copy is attached.
    10. List any advisory, consultative, honorary, or other part-time 
service or positions with Federal, State, or local governments, other 
than those listed above, within the last five years. None.
    11. List all positions held as an officer, director, trustee, 
partner, proprietor, agent, representative, or consultant of any 
corporation, company, firm, partnership, or other business, enterprise, 
educational, or other institution within the last five years.

        President, Association of Pacific Ports, 2010-2011

        Vice President, Association of Pacific Ports, 2009-2010

        Member, Board of Directors, 2008-2011
        California League of Conservation Voters

        Member, Board of Directors, 2004-2011
        Museum of Latin American Art

        Member, Board of Directors, 2005-2009
        St. John Bosco High School

    12. Please list all membership you have had during the past ten 
years or currently hold with any civic, social, charitable, 
educational, political, professional, fraternal, benevolent or 
religious organization, private club, or other membership organization. 
Include dates of membership and any positions you have held with any 
organization. Please note whether any such club or organization 
restricts membership on the basis of sex, race, color, religion, 
national origin, age or handicap.
    None of the following organizations restrict membership in any way, 
and I have not served on any of the organizations below since May 2011.

        California League of Conservation Voters, Board of Directors, 
        2008-2011

        Miller Children's Hospital, Advisory Council, 2007-2011

        Museum of Latin American Art, Board of Directors, 2004-2011

        St. John Bosco High School, Board of Directors, 2005-2009

        Long Beach Bar Association, Committee Chair, 2003-2004

        Mexican American Bar Association, Committee Chair, 2001-2003

        State Bar of California 1980 to present

        Bar of the U.S. District Court, Central District of California, 
        1980 to present

    13. Have you ever been a candidate for and/or held a public office 
(elected, non-elected, or appointed? If so, indicate whether any 
campaign has any outstanding debt, the amount, and whether you are 
personally liable for that debt.
    I was appointed to the Long Beach Harbor Commission. There was no 
campaign; therefore, no debt incurred.
    I was appointed to the Federal Maritime Commission. There was no 
campaign; therefore, no debt incurred.
    14. Itemize all political contributions to any individual, campaign 
organization, political party, political action committee, or similar 
entity of $500 or more for the past ten years. Also, list all offices 
you have held with, and services rendered to, a state or national 
political party or election committee during the same period.
    I have not held any office or provided any service to a State or 
National political party and/or election committee.
    I have made contributions to the following individuals:

        Mayor Bob Foster, Long Beach, CA--2006--$500.00; 2010--$500.00
        Mayor Beverly O'Neill, Long Beach, CA--2002--$500.00

    15. List all scholarships, fellowships, honorary degrees, honorary 
society memberships, military medals, and any other special 
recognitions for outstanding service or achievements.

        Stanley T. Olafson Award for Advancement of World Trade, 2014

        Alternative Fuel Vehicle Institute, 20/20 Vision Award, Public 
        Servant Award, 2009

        Community Hispanic Association, Community Award, 2008

        League of California Cities/Latino Caucus, Public Servant 
        Environmental Leadership Award, 2007

        Mexican American Bar Association, Attorney of the Year Award, 
        2007

    16. Please list each book, article, column, or publication you have 
authored individually or with others. Also list any speeches that you 
have given on topics relevant to the position for which you have been 
nominated. Do not attach copies of these publications unless otherwise 
instructed.
    I have authored one article, ``Port & Counter Port: Lawsuit will 
slow cleanup,'' which appeared in the Long Beach Press Telegram on 
February 17, 2008.
    As a Port of Long Beach Harbor Commissioner, I gave the following 
speeches relevant to the position to which I have been nominated:

        Latin American Delegation Port Conference
                Addressed port operations and environmental policy.
                2005, 2007, 2008

        Hemispheric Latin American Conference
                Addressed sustainable practices at ports.
                Attended two conferences hosted in Panama, Brazil.

        Mexican Pacific Port Conference
                Addressed cooperative agreements on security and 
                environmental technology.
                2007 Conference, hosted by the Ports of Long Beach and 
                Los Angeles
                2009 Conference, hosted by the Port of Manzanillo, 
                Mexico
                Addressed the subject of international trade with an 
                emphasis on western hemispheric relations on behalf of 
                the Port of Long Beach before an audience of maritime 
                legal professionals.
                2006, Buenos Aires, Argentina

        American Association of Port Authorities
                Participated in panel presentations concerning 
                environmental initiatives and sustainable policy.
                2005, 2007, Port of Long Beach, CA

        Texas Corridor Transportation Coalition Conference
                Addressed efficient transportation of goods.
                2005, 2006

        Fast Freight Clean Air Conference
                Addressed sustainable, environmental port operations.
                2007, Los Angeles, CA
                2008, New York City, NY

        Footwear Logistics Distribution Conference, Recycle Exporter 
        Association
                Addressed sustainable practices and advancement of 
                exports.
                2010

    As a Federal Maritime Commissioner, I have given the following 
speeches relevant to the position to which I have been nominated:

        The Biogas USA West Conference
                Addressed sustainable shipping practices.
                Oct. 2011, San Francisco, CA

        The Global Shippers Forum Addressed port infrastructure.
                Nov. 2011, Atlanta, GA

        World LNG Fuels Conference
                Addressed environmental maritime practices.
                Jan. 2012, Houston, TX

        Panama Week
                Addressed expansion of Panama Canal and U.S. port 
                infrastructure.
                Mar. 2012, Washington, DC

        The XXI Latin American Congress of Ports
                Addressed sustainability in Latin American port 
                development.
                Apr. 2012, Antigua, Guatemala

        Logistics Conference, Sala de Las Americas
                Addressed role of the Federal Maritime Commission.
                Aug. 2012, Bogota, Columbia

        FIATA World Congress
                Addressed port logistics and infrastructure.
                Oct. 2012, Los Angeles, CA

        Organization of American States
                Addressed sustainable port practices.
                Nov. 2012, Washington, DC

        Transportation Research Board
                Addressed maritime infrastructure and freight policy.
                Jan. 2013, Washington, DC

        Association of Pacific Ports
                Addressed sustainable port practices.
                Apr. 2013, Seattle, WA

        International Association of Ports and Harbors
                Addressed international trade.
                May 2013, Los Angeles, CA

        Los Angeles Custom Brokers Freight Forwarders Association
                Addressed port infrastructure.
                Sept. 2013, Long Beach, CA

        Port Tech Expo
                Addressed global technology and ports.
                Sept. 2013, Los Angeles, CA

        Marine Log Global Greenship Conference
                Addressed sustainable port practices.
                Sept. 2013, Washington, DC

        International Warehouse Logistics Association
                Addressed sustainable port practices.
                Sept. 2013, Los Angeles, CA

        2013 CONECT Round Table
                Participated in round table discussion on international 
                trade.
                Oct. 2013, Washington, DC

        International Propeller Club
                Addressed Federal Maritime Commission's role and 
                regulatory responsibilities.
                Oct. 2013, Washington, DC

        California Association of Port Authorities
                Addressed port infrastructure and policy.
                Oct. 2013, Seattle, WA

        Inaugural Conference on Creating an Environmentally Sustainable 
        Maritime Industry
                Addressed sustainable port and maritime practices.
                Oct. 2013, San Pedro, CA

        Western Cargo Conference
                Addressed efficiency of maritime transportation.
                Oct. 2013, Rancho Mirage, CA

        National Association of Waterfront Employers
                Addressed consolidation of vessel carrier industry.
                Oct. 2013, Washington, DC

        Sixth SeaCargo Americas Conference
                Addressed port development.
                Nov. 2013, Miami, FL

        2014 Port Productivity Conference
                Addressed challenges facing U.S. ports.
                Feb. 2014, Fort Lauderdale, FL

        Pulse of the Ports Peak Season Conference
                Addressed competitive environment of maritime industry.
                Apr. 2014, Long Beach, CA

        40th Annual NCBFAA Conference
                Addressed Commission regulations affecting ocean 
                transportation intermediaries.
                Apr. 2014, Summerlin, NV

        Valparaiso Sustainable Ports Seminar
                Addressed sustainable port practices.
                May 2014, Valparaiso, Chile

        FuturePorts
                Gave welcoming remarks.
                June 2014, San Pedro, CA

        South Carolina International Trade Conference
                Addressed port infrastructure.
                Sept. 2014, Charleston, SC

        5th Annual PortTech Los Angeles Expo
                Addressed innovative port technology.
                Sept. 2014, Los Angeles, CA

    17. Please identify each instance in which you have testified 
orally or in writing before Congress in a governmental or non-
governmental capacity and specify the date and subject matter of each 
testimony.

   House Committee on Transportation & Infrastructure, 
        Subcommittee on Coast Guard and Maritime Transportation, 
        testimony on FMC 2014 FY Budget request--Apr. 16, 2013

   House Committee on Transportation & Infrastructure, 
        Subcommittee on Coast Guard and Maritime Transportation, 
        testimony on regulatory review--Sept. 10, 2013

   House Committee on Transportation & Infrastructure, 
        Subcommittee on Coast Guard and Maritime Transportation, 
        testimony on FMC Re-authorization--Oct. 29, 2013

   House Committee on Transportation & Infrastructure, 
        Subcommittee on Coast Guard and Maritime Transportation, 
        testimony on FMC 2015 FY Budget request--Mar. 26, 2014

   Senate Committee on Commerce, Science, and Transportation, 
        confirmation hearing--Nov. 30, 2010

    18. Given the current mission, major programs, and major 
operational objectives of the department/agency to which you have been 
nominated, what in your background or employment experiences do you 
believe affirmatively qualifies you for appointment to the position for 
which you have been nominated, and why do you wish to serve in that 
position?
    For the past three years, I have served on the Federal Maritime 
Commission (FMC) and currently serve as Chairman, effective April 1, 
2013. As Chairman, I am the chief executive and administrative officer 
of the FMC.
    In the role of Chairman, I provide management direction to relevant 
directors at the FMC, and ensure the efficient discharge of their 
statutory responsibilities.
    The FMC carries out important statutorily-mandated programs aimed 
at maintaining an efficient and competitive international ocean 
transportation system; protecting the public from unlawful, unfair, and 
deceptive ocean transportation practices; and resolving shipping 
disputes. In addition, the FMC's oversight of ocean common carriers, 
ocean transportation intermediaries, and marine terminal operators is 
an important element in the effort to protect our Nation's seaports.
    Prior to joining the FMC in June 2011, I served eight years on the 
Board of Harbor Commissioners for the Port of Long Beach (POLB), the 
second largest port in the Nation. The Board is charged with the 
exclusive control to manage and set policy in relation to the Harbor 
District. The duties include providing for the needs of commerce, 
navigation, and operations related to international trade.
    My experience as POLB Harbor Commissioner provided me with first-
hand experience on many aspects, not only with regard to port 
operations, but in addition, paramount issues faced by the maritime 
community, both in the domestic and international arenas.
    My desire to continue to serve on the Federal Maritime Commission 
as Chairman stems from the positive experiences I gained at the FMC and 
the Port of Long Beach, which specifically addressed challenging issues 
presented before an independent regulatory commission and one of the 
Nation's largest port complexes.
    I have dedicated the past 11 years to the maritime/port industry, 
an industry that not only is vital to the Nation's economy, but one for 
which I have exhibited a personal passion with regard to the relevant 
issues of international trade, goods movement, and sustainable 
development.
    19. What do you believe are your responsibilities, if confirmed, to 
ensure that the department/agency has proper management and accounting 
controls, and what experience do you have managing a large 
organization?
    First, as Chairman of the FMC I have presided over the Performance 
and Accountability Report for Fiscal Year 2013 (PAR) submitted by the 
agency. The Fiscal Year 2013 independent financial audit, performed by 
the Inspector General, resulted in an unqualified opinion. In the 
Statement of Assurance section of the PAR, I provided my assurance that 
the FMC has no material weaknesses, significant deficiencies, or 
instances of non-compliance with the laws and regulations to report.
    The goals and objective of the Commission are dependent on a keen 
partnership between the Commission and its management staff. My 
responsibility would continue to involve not only ensuring the proper 
oversight, but being proactive on the issues before the Commission by 
ensuring the staff is accountable to the policies expressed by the 
Commission and responsive to the needs of the industry and consumers.
    Second, my service at the Port of Long Beach provided valuable 
experience in oversight of management and accounting controls. The 
gross operating revenue for the Port of Long Beach in Fiscal Year 2009 
(a down year) was estimated at $311.4 million. In 2008, the revenue sum 
exceeded $360 million. Total employees at the POLB approximated 400. 
The Government Finance Officers Association of the United States and 
Canada (GFOA) awarded a Certificate of Achievement for Excellence in 
Financial Reporting to the POLB, for year ending September 30, 2008. 
This was the 26th consecutive year the POLB had received this 
prestigious award. Serving on the Board of Harbor Commissioners has 
provided relevant experience, which has recognized the POLB as a leader 
in the industry.
    20. What do you believe to be the top three challenges facing the 
department/agency and why?
    First, a paramount concern is furthering economic recovery. In this 
regard, our ability to facilitate commerce and specifically promote 
policies to advance exports, given the trade imbalance of export-import 
containerization, is essential. Promoting the Administration's National 
Export Initiative is central to the domestic economy and serves to 
provide a positive impact to the economy.
    Second, the emergence of global alliances among ocean carriers 
brings new dynamics to the Commission's oversight role. This mandates 
we balance the potential benefits of the cost savings and environmental 
efficiencies resulting from the coordinated deployment of newer, larger 
vessels with the potential harm that could come from a concentration of 
decision-making power in terms of port coverage, sailing schedules, and 
necessary capacity in the appropriate trade lanes. As part of reviewing 
the competitive impact of a global alliance, oversight of the changes 
in capacity is paramount. Specifically, realignment of previously 
independently operated service strings and how those capacity changes 
might affect shippers, given current market conditions.
    A third challenge is budgetary in nature. As noted, the FMC is an 
independent agency charged with the regulation of U.S. oceanborne 
foreign commerce valued at $930 billion annually. In its oversight 
role, the FMC's legislative mandate is not only vital to the Nation's 
economy, but ever more important given the increased immunity 
agreements filed by ocean carriers and marine terminals at our Nation's 
port authorities. For Fiscal Year 2015, the FMC submitted budget 
request totals of $25,660,000, which includes salaries and benefits for 
124 full-time equivalent employees. The requested amount represents 
minimal spending levels necessary to effectively conduct the 
Commission's basic day-to-day operations and to meet the 
responsibilities Congress has entrusted to the agency. While the agency 
will continue to use its limited resources wisely, I would be remiss 
not to raise our budgetary issue as one of the top three challenges 
facing the agency.
                   b. potential conflicts of interest
    1. Describe all financial arrangements, deferred compensation 
agreements, and other continuing financial dealings with business 
associates, clients, or customers. Please include information related 
to retirement accounts: None.
    2. Do you have any commitments or agreements, formal or informal, 
to maintain employment, affiliation, or practice with any business, 
association, or other organization during your appointment? If so, 
please explain: None.
    3. Indicate any investments, obligations, liabilities, or other 
relationships which could involve potential conflicts of interest in 
the position to which you have been nominated.
    In connection with the nomination process, I have consulted with 
the FMC's designated agency ethics official to identify potential 
conflicts of interest. Any potential conflicts of interest will be 
resolved in accordance with the terms of an ethics agreement that I 
have entered into with the FMC designated agency ethics official and 
that has been provided to this Committee. I am not aware of any other 
potential conflicts of interest.
    4. Describe any business relationship, dealing or financial 
transaction which you have had during the last ten years, whether for 
yourself, on behalf of a client, or acting as an agent, that could in 
any way constitute or result in a possible conflict of interest in the 
position to which you have been nominated.
    In connection with the nomination process, I have consulted with 
the FMC's designated agency ethics official to identify potential 
conflicts of interest. Any potential conflicts of interest will be 
resolved in accordance with the terms of an ethics agreement that I 
have entered into with the FMC designated agency ethics official and 
that has been provided to this Committee. I am not aware of any other 
potential conflicts of interest.
    5. Describe any activity during the past ten years in which you 
have been engaged for the purpose of directly, or indirectly 
influencing the passage, defeat, or modification of any legislation or 
affecting the administration and execution of law or public policy. 
None.
    6. Explain how you will resolve any potential conflict of interest, 
including any that may be disclosed by your responses to the above 
items.
    Any potential conflicts of interest will be resolved in accordance 
with the terms of an ethics agreement that I have entered into with the 
FMC's designated agency ethics official and that has been provided to 
this Committee.
                            c. legal matters
    1. Have you ever been disciplined or cited for a breach of ethics 
by, or been the subject of a complaint to any court, administrative 
agency, professional association, disciplinary committee, or other 
professional group? If so, please explain: No.
    2. Have you ever been investigated, arrested, charged, or held by 
any Federal, State, or other law enforcement authority of any Federal, 
State, county, or municipal entity, other than for a minor traffic 
offense? If so, please explain: No.
    3. Have you or any business of which you are or were an officer 
ever been involved as a party in an administrative agency proceeding or 
civil litigation? If so, please explain.
    In the fall of 2007, I appealed an unemployment benefit reduction 
that I had received from the State of California Employment Development 
Department. From December 2006 to February 2007, I had received 
unemployment from the State of California while I was between jobs. 
Months later, I received a notice of repayment because the benefit 
calculation did not account for a stipend of $100 per meeting that I 
received as a Commissioner for the Port of Long Beach. I appealed the 
notice on the issue of whether the stipend was considered income. The 
Department denied my appeal, and I promptly repaid approximately $500 
in unemployment benefits.
    In 1989, a malpractice suit filed by one of my previous firms' 
clients named every attorney at the firm. I was quickly dismissed by 
the Plaintiff because I had not had any significant involvement in the 
matter at issue.
    4. Have you ever been convicted (including pleas of guilty or nolo 
contendere) of any criminal violation other than a minor traffic 
offense? If so, please explain: No.
    5. Have you ever been accused, formally or informally sexual 
harassment, or discrimination on the basis of sex, race, religion, or 
any other basis? If so, please explain.
    A former agency employee named her then-acting supervisor in an 
informal EEO complaint filed with the FMC's EEO Director. The complaint 
is unclear as to specific allegations against me other than conclusory 
allegations, but appears to state claims relating to an application for 
the Inspector General position. I had no role in the resume screening 
process or the first round of interviews. I have a one-fifth 
representation under the IG Act; accordingly, my role was limited to 
the final round of interviews like that of every of other Commissioner.
    6. Please advise the Committee of any additional information, 
favorable or unfavorable, which you feel should be disclosed in 
connection with your nomination. None.
                     d. relationship with committee
    1. Will you ensure that your department/agency complies with 
deadlines for information set by congressional committee? Yes.
    2. Will you ensure that your department/agency does whatever it can 
to protect congressional witnesses and whistle blowers from reprisal 
for their testimony and disclosure? Yes.
    3. Will you cooperate in providing the Committee with requested 
witnesses including technical experts and career employees, with 
firsthand knowledge of matters of interest to the Committee? Yes.
    4. Are you willing to appear and testify before any duly 
constituted committee of the Congress on such occasions as you may be 
reasonably requested to do so? Yes.
                                 ______
                                 
                        Resume of Mario Cordero
Experience
Federal Maritime Commission, Washington, D.C.
Chairman, April 2013 to Present
Commissioner, June 2011 to April 2013
Nominated by President Obama and Confirmed by the United States Senate

Acts as Chief Executive and Administrative Officer of the Commission; 
administers policies and ensures the efficient discharge of the agency.

Provides management direction with respect to all matters concerning 
overall Commission workflow, resource allocation (staff and budgetary), 
work priorities, and managerial matters.

Law Office of Wayne Singer, Long Beach, CA
Senior Attorney specializing in workers' compensation defense. November 
2009 to June 2011

Safeco Insurance, Long Beach, CA
House Counsel exclusive to workers' compensation defense, February 2007 
to December 2008

Adelson, Testan & Brundo, Long Beach, CA
Attorney specializing in workers' compensation defense and related 
employment law. August 2001 to Dec. 2006

Altman & Shoemaker, Encino, CA
Attorney specializing in workers' comp defense and related employment 
law. 1998 to 2001

Ochoa & Sillas, Los Angeles, CA
Attorney specializing in workers' comp defense, civil litigation and 
political advocacy. 1996 to 1998
Educator, Long Beach, CA
Long Beach City College
Political Science and California Politics, 1996 to 2011
Education
Santa Clara University School of Law, San Jose, CA
Juris Doctor, 1978
Languages
Fluent in Spanish
Licenses

   Admitted to The State Bar of California, 1980

   Admitted to Bar of the U.S. District Court, Central District 
        of California, 1980
Affiliations
   Member, The State Bar of California

   Member, Long Beach Bar Association, Long Beach, CA Past 
        Chair, Workers' Compensation Committee

   Member, Mexican-American Bar Association, Los Angeles, CA 
        Past Chair, Workers' Compensation Committee
Awards
   Stanley T. Olafson Award 2014
        Los Angeles Chamber of Commerce ``. . .honoring ``an individual 
        who has contributed in the advancement of world trade.''

   National 20/20 Vision Award 2009
        The Alternative Fuel Vehicle Institute, Las Vegas, NV

   Attorney of the Year 2007
        Mexican American Bar Association, of Los Angeles County

   Environmental Award 2007
        League of California Cities

    References available upon request
                                 ______
                                 
                              Addendum One
Federal Maritime Commission, Washington, D.C.
    The FMC is the independent Federal agency responsible for 
regulating the U.S. international ocean transportation system for the 
benefit of U.S. exporters, importers and the U.S. consumer.

   Designated Chairman by President Obama: April 1, 1013

   Nominated Commissioner by President Obama: September 17, 
        2010

   Confirmed by U.S. Senate: April14, 2011

   Sworn into office: June 2, 2011
This FMC Chairman:

   Acts as Chief Executive and Administrative Officer of the 
        Commission: administers policies and ensures the efficient 
        discharge of the agency;

   Testifies before the U.S. Senate and U.S. House of 
        Representatives on yearly FMC budget, other appropriations, 
        ocean transportation policies and at either body's request on 
        FMC issues of concern to Congress;

   Negotiates with international counterparts on ocean 
        transportation policies and facilitates with various foreign 
        government officials the protection and promotion of U.S. 
        ocean-going interests inforeign commerce;

   Addresses audiences across the U.S. and the world as 
        necessary to advance Administration polices and, in particular, 
        receive input from all FMC stakeholders; and;

   Provides specific management direction with respect to all 
        matters concerning FMC workflow, (2) resource a/location (staff 
        and budgetary], (3) work priorities, and 4) managerial matters.
My Personal Goals as FMC Chairman include:

  (1)  To be a hands-on chairman overseeing the superb staff workings 
        of this agency;

  (2)  Work closely with fellow commissioners regardless of party to 
        (a) to protect the public from unfair and deceptive practices 
        and (b) ensure competitive and efficient ocean transportation 
        services for the shipping public is maintained;

  (3)  To promote, advance, encourage, facilitate American commerce and 
        shipping interests to all the world's hemispheres in a fair, 
        transparent manner; and

  (4)  To move the industry to conduct itself in the most 
        environmentally progressive ways possible
Congressional Testimony. Acts & Stakeholder Engagements (partial list)

   Testimony before Congress on the FMC budget--March 26, 2014,
   Testimony before Congress on FMC reauthorization 
        legislation--October 29, 2013

   Testimony before Congress regarding Regulatory Review--
        September 10, 2013

   Testimony before Congress Regarding FY 2013 FMC budget--
        April 16, 2013
Guest Speaker (partial list)
   2014 Port Productivity Conference--February 14, 2014

   Sixth SeaCargo Americas Conference--Emphasized cooperation i 
        n trade, investment and infrastructure development in the 
        western hemisphere. November 6, 2013

   Inaugural Conference on Creating an Environmentally 
        Sustainable Maritime Industry--October 17, 2013

   California Association of Port Authorities Annual Meeting--
        October 11, 2013

   International Association of Ports & Harbors (IAPH) 28th 
        World Ports Conference--May 07, 2013
   Organization of American States on sustainable port 
        management--November 13, 2012
                              Addendum Two
Commissioner, Board of Harbor Commissioners
Port of Long Beach, Long Beach, CA
America's Second Largest Port
The Environment
    Spearheaded the innovative, environmentally unprecedented Green 
Port Policy at the Port of Long Beach. Through voluntary and mandated 
efforts, it revolutionized environmental clean-up ports through the 
Clean Trucks Program, Vessel Low-Sulfur Fuel Program, Technology 
Advancement Program and others. In conjunction with the Port of Los 
Angeles, Green Port Policy is today an international model for striking 
balance among industry, labor, shippers and the health and safety of 
the people who live and work in and around the ports.
    Promoted and expanded Port Community Outreach Initiative including 
the new, Pulse of the Port, award winning cable TV program.
International Environmental Cooperation
    Served as Executive Board member on the American Association of 
Port Authorities' Latin American delegation. Instrumental in 
development of policy urging greater cooperation between North American 
and Latin American ports.
Guest Speaker (partial list)
   Application of new Environmental Port technologies, Brazil 
        2009

   First Environmental Latin American Hemispheric Conference, 
        Panama 2008

   Port of Rotterdam symposium (Europe's largest port) to speak 
        on POLB's Green Port Program. 2007

   Organized First Annual Conference between Mexican Ports of 
        the Pacific and Ports of Long Beach and Los Angeles. 2007
Appointments
   Elected Harbor Board Commission, President, July 2007-2008; 
        Vice President, July 2006 to July 2007 and July 2009 thru July 
        2010.

   President of the Association of Pacific Ports, Sept 2010-
        2011, Vice President, 2009-2010.

   First appointed to Board Commission in 2003 by then Mayor 
        Beverly O'Neill. Reappointed in July 2009 by Mayor Bob Foster. 
        Both times the City Council unanimously approved these six year 
        term appointments.

    The Chairman. Thank you, Mr. Cordero.
    We'll start with some questions and I will direct this one 
to Mr. Elliott, and it has to do with adjudication in rate 
cases. The STB's Fiscal Year 2016 budget request states that 
the Board participates in roughly 1,300 decisions in court-
related matters each year and a significant portion of the 
STB's resources are consumed by complex rate cases. This 
workload is expected to increase. Your colleague, Vice Chairman 
Ann Begeman, dissented on the proposed Fiscal Year 2016 budget 
request on the grounds that she believes the budget fails to 
dedicate enough attention and resources to improve its 
adjudication process, as well as simultaneously doubling its 
travel budget.
    So Mr. Elliott, could you share your views on the Vice 
Chairman's criticism of the 2016 budget proposal?
    Mr. Elliott. Sure.
    As far as dedicating money to the process itself, the Board 
has taken some of the money. I've commissioned a study on the 
rate case process. What has occurred since I've come to the 
Board is the cases have gone from coal cases with one or two 
routes to cases which are incredibly more complex with hundreds 
of routes. So what I have done is dedicated money, number one, 
to look at studies of alternative ways to bring rate cases in a 
simpler fashion. So I've committed money to an external 
consultant to take a look at that because I thought the Board 
needed new ways to make the Board more accessible.
    Second, I've also commissioned an internal study about 
faster ways to bring rate cases through the board and more 
efficiently and more quickly.
    As far as the travel budget itself, I don't believe that 
our budget is large in comparison to most agencies but we do 
travel very conservatively over the last several years. So I'm 
not sure exactly if that--it's not a big number. So I have 
committed and I've committed as an attorney that practiced 
before the board every possible human resource in the board to 
look at ways to improve the way we process cases.
    The Chairman. Thank you.
    I think I mentioned, and you mentioned as well, I have a 
keen interest in agriculture, as you know----
    Mr. Elliott. Yes.
    The Chairman.--and rail transportation. I had an Ag 
roundtable back in South Dakota recently. And one of the 
recurring themes that came out of that was the high shipping 
cost and its effect on farmers across South Dakota who rely on 
rail transportation to get their harvest to the market. In your 
response to the Committee's questionnaire, you mentioned that 
under your direction the Board has been proactive, I should 
say, in addressing rail service issues by closely monitoring 
rail service metrics, issuing targeted service orders that 
improve service levels and increase accountability, gain 
stakeholder input, and making more staff available to resolve 
immediate service crises. That's from your statement.
    So I question: Do you characterize your efforts as having 
been successful and what steps would the STB take to prevent 
future rail service delays?
    Mr. Elliott. As far as future rail delays, what we have 
done is, on December 31, we did issue a decision, a proposed 
rulemaking, that asked for more information from the railroads 
so that we can better understand the service issues and the 
metrics involved in the rail industry. That has never been done 
before, despite all of the service issues. So we are going to 
have a more careful examination of what is going on with 
respect to the rail industry.
    In addition, since the rail crisis that occurred, in 2014 
occurred, we have been in close contact with the railroads and 
their shippers to make sure that we understand their issues and 
we also want to make sure that the railroads are coordinating 
amongst themselves to make sure that these issues don't arise 
again, especially in Chicago.
    The Chairman. Chairman Cordero, the continuing formation of 
carrier alliances to consolidate their routes and services, I 
believe there are roughly now four major alliances, has given 
rise to reports that the operations of these alliances may be a 
contributing factor to the chronic congestion at West Coast 
ports and perhaps at other U.S. ports. There's an article, it 
appeared earlier this week in the Wall Street Journal, that 
noted that the sharp growth in container ship sizes is also a 
contributing factor to overwhelming ports at key periods and 
costing millions to importers and exporters who can't access 
their cargo on time.
    What can you tell us about the impact these alliances and 
the sharp growth in container ship capacity are having on the 
shipping community? And will you, as shippers, benefit from 
this consolidation due to a greater choice of services and 
lower freight rates in the short and in the long term?
    Mr. Cordero. Thank you for your question, Chairman.
    First of all, the assessment is correct in terms of the 
impact or the potential impact that these alliances may be 
having, not only on the domestic front, but in the 
international community. I think it's fair to say that at this 
point the FMC is monitoring what those impacts are. We are 
taking this responsibility very seriously, and I can represent 
to the Committee that the monitoring that we are addressing at 
this point is addressing that issue. In other words, what are 
these impacts and to what extent are they impacting the 
American shipper?
    I'll state two points further to that. One is the, 
preliminarily, as we saw in the West Coast experience, the 
impact is logistics in nature for sure and I'm referencing the 
Marine Terminal Operators who, in my view, were not prepared 
for the unloading and loading of thousands of containers these 
large vessels bring in. Number two, the impact on the American 
shipper. And I, and our staff here, have been very adamant with 
regard to protecting the interests of the American shipper. One 
issue with regard to that is the cost of it being incurred, 
and, as a result of congestion, some of the cost in reference 
to demurrage and detention, are of serious concern.
    The Chairman. I'm going to, just for purposes of the record 
too, ask unanimous consent to include those two Wall Street 
Journal articles, one dated May 4, 2015, the other April 28, 
2015, into the record.
    So without objection, we'll include those as part of your 
response to that particular question.
    [Below are both the web addresses and the articles 
themselves:]

    ``Growing Shipping Alliances Ares Straining Major U.S. Gateway 
Ports'' by Costas Paris, May 4, 2015 5:58 a.m. ET, Wall Street Journal

http://www.wsj.com/articles/growing-shipping-alliances-are-straining-
major-u-s-gateway-ports-1430733531?mod=e2tw

    ``U.S. Ports See Costly Delays as Cargo Ships, Volumes Grow'' by 
Adrian Campo-Flore and Cameron McWhirter, April 29, 2015, 4:41 p.m. ET

http://www.wsj.com/articles/u-s-ports-see-costly-delays-as-cargo-ships-
volumes-grow-1430340113
                                 ______
                                 

                        The Wall Street Journal

   Growing Shipping Alliances Are Straining Major U.S. Gateway Ports

Ocean carriers are cooperating on capacity on their new, larger ships, 
        adding to handling problems
        
        
                            By Costas Paris

    A sharp growth in container ship sizes and alliances among the 
world's biggest shipping operators is overwhelming U.S. major gateway 
ports during peak periods, costing millions to importers and exporters 
who can't access their cargo on time and prompting the country's marine 
watchdog to warn of legal action if the parties don't deal with the 
mess.
    Container shipping, which moves over 95 percent of the world's 
manufactured goods, is largely controlled by around 15 mostly European 
and Asian operators, which recently have accelerated the pooling of 
operations within giant alliances to cut costs. Long a feature of 
maritime shipping, the alliances have grown in recent years as carriers 
have introduced bigger vessels that are least twice the size of those 
calling on U.S. ports for years.
    The economic imperatives of carriers trying to get the most out of 
the new ships meet the cargo-handling limitations at ports such as 
those the largest U.S. gateways at Los Angeles and Long Beach. Upon 
arrival, containers often are randomly unloaded, which swamps terminal 
operators as they try to organize the metal boxes in stacks and move 
them to specific destinations by truck or rail.
    ``Existing terminals were designed two decades ago to handle ships 
half the size of today's vessels, and with the alliances, six ships 
belonging to the same alliance can show up at five different terminals 
in Los Angeles and Long Beach.'' said Gene Seroka, executive director 
at the Port of Los Angeles. ``This disperses cargo over a wider array 
of facilities making it challenging for truckers to pick the containers 
as well for western railways to amass the cargo and move it to specific 
destinations.
    ``We have 13 different terminals in Southern California. So there 
is a lot of confusion in picking up cargo,'' said Mr. Seroka.
    For years, the workhorse vessel that moved goods across the Pacific 
had a capacity to carry between 5,000 and 7,000 containers and it would 
take up to 10 hours to move a container from the port. But over the 
past couple of years, ships calling at West Coast ports have doubled in 
size. At the height of the peak period late last year the congestion 
was so severe that it would take up to eight days to move a container 
out of port and on to major importers of Asian goods such as Wal-Mart 
Inc., Home Depot Inc. and others.
    Mr. Seroka said that on average terminal operators had to pay $3 
million in added spending a week to deal with the congestion.
    California ports handle the largest share of cargo moved from and 
to Asia, everything from clothing and home appliances to toys, luxury 
goods and electronics coming in and packaged food, fresh produce and 
scrap metal going out. Peak periods include September and October when 
retailers prepare for the Christmas holidays and the first-quarter 
period before the Lunar New Year, when U.S. importers typically stock 
up for spring before Chinese factories shut down for up to two weeks.
    Jon Slangerup, chief executive at the Port of Long Beach, says that 
as ships get bigger, they call to more ports in Asia where containers 
are loaded randomly, with little attention to the ownership of the 
containers or their final destination. When docking at multiple 
terminals at the West Coast, unloading the ships is also done randomly, 
straining port operators and truckers as they try to figure out which 
box goes where.
    Historically, a single ship had its containers stocked in blocks, 
with each block destined for a particular location by a particular mode 
of transport. The process known as block stowage was for decades the 
preferred method for port operators and it worked well.
    ``In the past, we handled a container one to three times before it 
left port, Mr. Slangerup said. ``Now, at peak times, it is five to 
eight times, and when it happened last year nobody really understood 
the magnitude of the problem. It wasn't expected or planned for and so 
the physical gridlock that ensued was very serious.''
    Jonathan Gold, vice president of National Retail Federation which 
represents 18,000 U.S. retailers, says members also have been levied by 
shipping companies with congestion charges to compensate for the for 
the extra time a vessel stays at port while cargo is being shorted out.
    ``It's a very large issue that adds major costs to cargo owners,'' 
he said. ``We want to see better port operations overall that moves 
cargo quickly. We need a wider conversation with everyone involved in 
the supply chain, but it will take years to deal with the problem.''
    The impact of the alliances isn't limited to the United States. 
European and Asian ports have moved faster to adopt the infrastructure 
needed to handle the megaships. Those ports still face congestion and 
the alliances exacerbate the problem, but the loading of containers 
bound for Europe is less of an issue in part because of different port 
handling procedures.
    Last month, the Federal Maritime Commission, the U.S. marine 
watchdog, voted to call in all parties involved to discuss the issue 
and come up with proposals to address the problem. It said that in many 
cases, congestion charges are deemed unfair since importers, exporters 
and truckers aren't responsible for the delays, and the regulator 
warned it could penalize unfair practices by shipping companies and 
terminal operators.


    ``The message from cargo owners, importers and exports is loud and 
clear,'' said FMC FMC 0.30 percent Commissioner Richard Lidinsky. 
``These alliances and their big ships are causing major problems at 
U.S. ports and by our vote all parties involved will have to sit down 
over the next 90 days identify what went wrong and come up with 
solutions. After that, the FMC will have a clear picture and if needed 
get involved in specific cases with investigations, subpoenas and 
fines.''
    ``We had shippers telling us they are being regularly charged for 
the congestion by shipping companies. The operators cause the 
congestion and they want to profit on top of it. This is 
unacceptable,'' Mr. Lidinsky said.
    Maersk Line, the world's biggest container operator with 15 percent 
of global capacity, according to the Singapore-based maritime research 
group Alphaliner, says the larger vessels actually improve efficiency 
as the cost savings are largely passed on to customers.
    The FMC and the marine regulators from the European Union and China 
is set to meet in Brussels in May to discuss whether the alliances are 
in line with international competition practices and their role in 
congestion at U.S. ports.
    The big players in the business have said that pooling their 
resources and deploying bigger ships--such as the Triple-E class, which 
can carry in excess of 18,000 containers--cuts their costs and provides 
better service to cargo owners.
    The world's two biggest alliances in capacity terms are the 2M and 
Ocean Three.
    The 2M consists of A.P. Møller-Mærsk A/S's Maersk Line 
of Denmark and Swiss-based Mediterranean Shipping Co., the world's top 
2 container lines, with a combined 28.2 percent of all capacity, 
according to Alphaliner. The 2M moves around 35 percent of all goods 
between Asia and Europe and controls a market share of 15 percent and 
37 percent of goods moved on the trans-Pacific and trans-Atlantic 
routes, respectively.
    Ocean Three, consisting France's CMA CGM, China Shipping Container 
Lines Co. and Middle East shipping major United Arab Shipping Co., 
controls a 20 percent slice of all cargo between Asia and Europe and 13 
percent and 7 percent across the Pacific and Atlantic oceans, 
respectively.
                                 ______
                                 

                        The Wall Street Journal

       U.S. Ports See Costly Delays as Cargo Ships, Volumes Grow

Problem shows how global trade logistics are falling out of sync


              By Arian Campo-Flores and Cameron McWhirter

    PORTSMOUTH, Va.--The Port of Virginia, one of the Nation's largest, 
was built to handle high volumes of cargo traffic entering and exiting 
the U.S.
    But on his way recently to pick up a load of bedding, Albert 
Newcomb was stalled for two hours before his rig could make it through 
a mile-long line to one of the port's terminals. Once inside, the 43-
year-old independent truck driver hit a traffic jam 13 lanes wide and 
10 trucks deep. By the time he left with his load, he had waited for a 
total of eight hours. ``It's ridiculous,'' he said, as he sat in his 
truck idling outside the gates. ``It's almost to the point where you 
want to quit.''
    A key reason for the holdup: a surge of containers from three large 
ships at dock was straining the port's capacity and tying up 
dockworkers and cranes.
    Such congestion is becoming increasingly common at major U.S. 
ports--a problem that could have profound implications for the $900 
billion worth of goods transported to and from the U.S. each year by 
container ships.
    The slow movement of imports and exports illustrates how the 
logistics of global trade have fallen terribly out of sync. Ocean 
carriers are deploying progressively bigger vessels. Some would be 
taller than the Empire State Building if stood on end. They can carry 
more than twice as much cargo as their predecessors, and are more fuel-
efficient than smaller vessels. To ensure they travel as full as 
possible, shipping lines have formed alliances to combine their loads.
    But the floating behemoths are overwhelming many U.S. ports that 
weren't built to handle such supersize ships. Of the 10 busiest U.S. 
ports by container volume, as calculated by the American Association of 
Port Authorities, at least seven are grappling regularly with 
congestion.
    In Newark, N.J., a shortage of chassis--the undercarriages used to 
haul containers off the port by truck--is contributing to miles-long 
lines. In Los Angeles and Long Beach, the arrival of giant vessels and 
the growth of shipping alliances has caused terminal gridlock for 
months, leaving ships stuck offshore waiting to unload. That situation 
was exacerbated by a labor dispute at West Coast ports that was 
resolved in February.
    The big ships ``have stressed the infrastructure to the breaking 
point,'' says Jock O'Connell, an international trade adviser at Beacon 
Economics LLC in Sacramento, Calif. There needs to be ``a concerted 
effort to rethink and redesign the ports to accommodate these larger 
vessels and the additional cargo they're generating,'' he says.
    It is only likely to get worse. Container volume at U.S. ports has 
increased steadily since the recession, hitting all-time highs in 2014 
at many East Coast terminals. Between 2010 and 2040, the volume of the 
U.S.'s container trade with Northeast Asia--which accounts for the 
majority of the U.S.'s overall container trade--is projected to more 
than triple, according to a 2013 Department of Transportation study.
    West Coast ports already receive megaships bearing as many as 
14,000 containers traveling from Asia across the Pacific Ocean, while 
East Coast ones are receiving 10,000-container vessels from Asia 
through the Suez Canal. That volume will only grow when expansion of 
the Panama Canal is completed next year. The widened, deeper canal will 
allow ships carrying as many as 13,000 containers to travel en route to 
the East Coast, compared with ships hauling 5,000 containers today.
    The cost of port congestion to retailers, meanwhile, is expected to 
climb--and ultimately be passed along to consumers.
    Frank Layo, retail strategist at consulting firm Kurt Salmon, 
forecasts that the cumulative costs of shipping delays could reach $7 
billion this year and climb as high as $37 billion in 2016. He expects 
some retailers to divert shipments from Asia to more-expensive routes 
to avoid congested West Coast ports. Consumers could ``feel it in the 
form of mass out-of-stocks and price increases,'' Mr. Layo says.
    Lower fuel costs could help offset congestion costs, but whether 
carriers will pass along such reductions to customers is unclear, 
analysts say.
    Audax Transportation hauls goods ranging from car engines for Ford 
Motor Co. to frozen chicken parts for Perdue Farms. Bottlenecks at the 
Port of Virginia have reduced the amount of goods its truck drivers can 
move in a day by 50 percent in the past year, says Ed O'Callaghan, the 
firm's president and an agent of trucking company Century Express in 
Norfolk, Va. To make up for lost revenue, his company has raised prices 
for customers by about 35 percent.
    ``It is not enjoyable to approach shippers who have supported you 
over the years with such increases,'' Mr. O'Callaghan says. Because 
congestion has limited the number of containers the company can move, 
Mr. O'Callaghan has had to drop some 20 clients in the past year, 
including a tobacco exporter and furniture importers.
    Port congestion has also made it difficult for home-goods importer 
Hooker Furniture to gauge the staff it needs to handle the dressers, 
dining tables and sofas it imports from Asia, says logistics 
coordinator Kimberly Clark. ``One day, we could be planning for 15 
containers, and we may only get six'' because of shipping delays, she 
says. Another day, a flood of containers could arrive, forcing the 
Martinsville, Va., company to pay workers overtime or bring in temps.


    The backups have ``put a lot of pressure on everybody,'' says Port 
of Virginia spokesman Joe Harris. ``We definitely regret'' such 
situations, he adds. To alleviate congestion, the port in recent weeks 
has extended operating hours and added chassis and container-handling 
equipment.
    The problem didn't happen overnight. Investment by federal, state 
and local governments in U.S. ports and surrounding infrastructure--
such as roads and rail lines--mostly dried up during the recession. And 
declining cargo volumes squeezed ports' finances, limiting their 
ability to make significant investments in bigger cranes and other 
improvements, says John Martin, a maritime economist at Martin 
Associates in Lancaster, Pa.


    Around the time the economy began to recover, shipping lines 
started deploying more megaships to U.S. ports--years earlier than most 
port officials anticipated, Mr. Martin says. Yet government funding has 
been slow to return amid budget constraints. The result was a ``perfect 
storm,'' says Mr. Martin, as surging cargo volumes slam ports ill-
prepared to handle them.
    Now, ports are scrambling to catch up. They lag some foreign 
counterparts, which rely on unmanned cargo-handling machines to 
efficiently move, stack and retrieve containers, Mr. Martin says.
    Journal of Commerce data on port productivity in the first half of 
2014 showed that the world's most efficient port was Jebel Ali in the 
United Arab Emirates. It managed to perform an average of 138 container 
moves--loading, unloading or repositioning--per ship per hour. The Port 
of Los Angeles--the U.S.'s most efficient port at the time--had only 80 
container moves per ship. One difference between the two: Jebel Ali has 
invested heavily in automation and technology to serve megaships, 
including $850 million in a new container terminal unveiled last year.
    The White House has provided special infrastructure grants worth 
$479 million for 38 port-related projects in recent years. President 
Barack Obama has visited Miami, Wilmington, Del., and other cities to 
promote more investment in the Nation's ports. The Federal Maritime 
Commission has made resolving port congestion one of the agency's top 
priorities. But it lacks budgetary authority, which rests with 
Congress.
    In the U.S., a ``long-term lack of investment and lack of focus'' 
has inhibited modernization, says Curtis Foltz, executive director of 
the Georgia Ports Authority. ``We are woefully positioned to deal with 
continued growth in the 21st century.''
    Some ports have modernized. The Georgia Ports Authority, which owns 
and operates the Port of Savannah, is spending about $1.5 billion over 
the next decade to improve crane operations, storage facilities and 
other port infrastructure. The state of Georgia is spending another 
$120 million on road improvements near the port, to be completed in 
2016. As a result, shippers say the port, the second-busiest by 
container volume on the East Coast last year, operates smoothly for the 
most part, regularly handling big vessels stacked with cargo for 
companies such as IKEA and Target Corp. TGT 2.05 percent
    Unlike port authorities in cities such as Los Angeles and New York 
that are landlords and lease their multiple terminals to private 
companies, the Georgia Ports Authority owns and operates the sole 
terminal at the Savannah port. That gives it control over capital 
expenditures and growth plans.
    To prepare for larger ships, the Savannah port says it started 
investing a decade ago in upgrades. Recent improvements include the 
tallest available cranes and a state-of-the-art computer system that 
tracks in real time the location of containers, speeding their 
retrieval for trucks. In 2007, it helped launch the South Atlantic 
Chassis Pool, a collection of about 50,000 chassis shared by various 
Southeastern ports and rail lines. Savannah is now building out 
undeveloped property inland to store empty containers, freeing up more 
space for cargo near the dock.
    Others are following Savannah's lead. Chassis companies are trying 
to relieve congestion in New York and Los Angeles by creating pools 
similar to the one used in Savannah, says Keith Lovetro, president of 
chassis-leasing company TRAC Intermodal.
    The challenges in the U.S. are on display at the Port of Virginia, 
which has two main container terminals, in Portsmouth and Norfolk, 
bustling with activity as towering cranes unload ships and enormous 
vehicles pile containers in stacks. Infrastructure investment at the 
port suffered during the recession as well as a two-year period of 
uncertainty, ending in 2013, when the state weighed privatizing it. But 
the bigger ships began arriving in 2011--years earlier than expected, 
says Mr. Harris, the spokesman.


    Rising container volume along with backups caused by a spate of 
winter storms pushed the Portsmouth terminal, called Virginia 
International Gateway, beyond capacity for weeks in March, Mr. Harris 
says. Crews repeatedly worked late into the night to clear backlogs, 
only to have them ``gobbled up by a single ship,'' he adds.


    Nearby Norfolk International Terminal, also part of the Port of 
Virginia, is dealing with congestion problems as well, compounded by 
much older equipment prone to breakdowns. One yard at the terminal is 
packed with straddle carriers--large vehicles used to move containers--
undergoing maintenance.
    ``If you had more of those strads working, you would have lower 
turn times'' for trucks, says Bill Jackson, chairman of RJR Elite 
Trucking in Norfolk.
    The terminal also gets so crammed with containers that dockworkers 
need to move them around frequently to retrieve the right ones, leading 
some to be misplaced, he says. ``We've had drivers sitting in line five 
to six hours waiting for them to find the container they want,'' Mr. 
Jackson says.
    Every month, he says, he loses several drivers fed up with the 
congestion--a common occurrence at ports across the country. Many 
truckers are independent operators, meaning they only make money when 
they complete a delivery. These days, they're lucky to make two hauls a 
day, compared with four or five several years ago. The resulting 
shortage is contributing to increased freight costs.
    John Reinhart, chief executive of the Virginia Port Authority, 
which operates the Port of Virginia terminals, says truckers' 
complaints are justified. But ``we have limited resources,'' says Mr. 
Reinhart, who took the helm last year amid pressure from the state to 
make the port profitable.
    He says upgrades, including a new computer-operating system and 
additional cargo-handling vehicles, have improved productivity. And a 
coming GPS-like system to track individual containers will make 
retrieving them easier.
    To tackle congestion issues in New York and New Jersey, a port 
authority task force recommended several measures, such as more 
flexible hours for gate operations and building more warehouse space to 
store imports away from docks. Port operators and others are now trying 
to implement those ideas. In the last decade, the port authority has 
spent $2.7 billion in upgrades at the port. Another $1.3 billion is 
being used to raise the Bayonne Bridge so that megaships can pass 
underneath.
    Congestion relief can't come soon enough for Jonathan Gold, vice 
president of supply chain and customs policy at the National Retail 
Federation, which represents some of the Nation's largest retailers. 
``We can't have U.S. ports acting as a barrier to trade,'' he says. 
``We're shooting ourselves in the foot.''

    The Chairman. Senator Nelson?
    Senator Nelson. Let me inquire of Senator Manchin, if 
you've got a time crunch, would you like to go first?
    As a follow-up to the Chairman's question, the congestion 
at our ports, what about the role that our freight program 
funds projects both inside and outside the ports to reduce 
congestion?
    Mr. Cordero. Thank you for your question, Senator.
    Clearly that's a very important role. As you may know, the 
Federal Maritime Commission last summer, the summer of 2014, we 
undertook this endeavor to address the cost and the causes and 
effect of congestion. One of them clearly is the issue of 
infrastructure.
    And if I may add to that response, one of the trade 
journals recently quoted a very respected economist, Walt 
Kemmsies of Moffatt & Nichol, who referenced the fact that in 
his opinion the greatest danger to international global trade 
is not so much issues like terrorism but the issue of the lack 
of infrastructure. So I think that question is very much on 
point to one of the major factors that we need to address in 
this nation, this country.
    Senator Nelson. You're from Long Beach?
    Mr. Cordero. That's correct.
    Senator Nelson. What's going to be the effect on the West 
Coast ports when the big ships don't have to unload on the West 
Coast and some of them will be going through the Panama Canal 
to the East Coast?
    Mr. Cordero. Well, Senator, I think it's clear that there 
will be some impact. The question is to what extent? You 
mentioned in your opening statement the question of the Panama 
Canal, the Third Lock Project. That project is going to make it 
more beneficial to American shippers to have choices and the 
choice of direct water from Asia, direct water cargo 
transportation to the East Coast and the Gulf. So in summation, 
we don't know exactly what that impact will be but, most 
definitively, it seems that the American shipper is looking to 
some real options and choices.
    Senator Nelson. Does the Port of Long Beach think that 
there are going to be less containers coming?
    Mr. Cordero. Well, Senator, number one, there are going to 
be more containers coming and I think the question is what 
percentage of those containers are going to go, diverted to 
other gateways. I will represent that I believe despite what 
has occurred in the West Coast, I think they're going to be 
prepared to deal with the logistics going forward in 
entertaining the future cargo that's going to come. I think one 
example of that is the development of the Middle Harbor project 
at Long Beach Container Terminal. That will be the state-of-
the-art marine terminal operator in this country. Having said 
all that, I think there is going to be diversion and, again, as 
to what extent but most definitively it is important to have 
our deepwater ports in the East Coast or in the Gulf or in the 
West Coast to be ready for the oncoming cargo that's coming as 
a result of the increasing global commerce.
    Senator Nelson. Mr. Elliott, the railroads have obviously 
got to expand. They need private investment. What can you do to 
make sure that the STB's policies do everything to make this 
private investment possible?
    Mr. Elliott. We know that the railroad's ability to invest 
in its infrastructure is extremely important. Going back to the 
origination of the Staggers Act, which deregulated, for the 
most part, the railroad system. We know that that has been 
successful in bringing the railroads back, to what I mentioned 
in my comments, to a rail renaissance. So my job is to serve as 
a regulatory backstop in the situations where the market is not 
necessarily working but, at the same time, allowing giving the 
railroads the ability to make adequate revenues.
    Senator Nelson. Is the STB coordinating with the Maritime 
Commission on integrating in order to get cargo off ships and 
onto rail?
    Mr. Elliott. We don't necessarily have a lot of 
coordination, but we do have discussions. A lot of our 
coordination has been recently with the FERC and the Department 
of Agriculture because of some of the service issues, but we do 
monitor what's going on at the ports and its effects on the 
railroads.
    Senator Nelson. Well, I'm certainly just a little country 
boy and don't understand a lot of this stuff, but I think 
common sense would say that the efficiency of big container 
ships is to get those containers off fast so the ship can get 
underway again to go do whatever it's doing, whether it's 
taking a load back or go back. The efficiency of the port in 
order to unload those containers and get them either on rail or 
truck, and I assume that most of them would be carried by rail 
unless it's the immediate metropolitan area where it's being 
delivered at the port, seems like to me that your two agencies 
ought to be coordinating in order to get the efficiency of the 
ports and the rail up.
    Mr. Cordero?
    Mr. Cordero. I absolutely agree with you, Senator.
    Let me just add to that response that Mr. Elliott 
referenced.
    The FMC, in the last couple years, has reached out to other 
agencies in order to partner and coordinate on various fronts. 
One of them, as you mentioned, Senator, very important, is the 
rail industry. We have had some discussions with STB in terms 
of our mutual responsibilities. I will tell you that some of 
the stakeholders from the West Coast who have come to my 
office, I have referred them to the STB to have these type of 
discussions because, at the end of the day, what's a very 
extremely important whether it's in relation from the port or 
from the rail perspective are intermodal facilities. Now, I 
talked about congestion at the port. We have had congestion at 
intermodal facilities.
    And last, if I could say on that topic, the concept of an 
inland port whether it's in the West Coast or in the East 
Coast, and in Florida, Port Everglades is studying those 
concepts, is extremely important. Going back to the issue of 
infrastructure, how important it is to invest in 
infrastructure. I think experts in industry will tell you that 
the greatest investment is in the first mile of the movement of 
that cargo.
    And it goes to your point, Senator, getting that container 
in the terminal and getting it out of there as soon as 
possible. And that's why some of these ports, like in the West 
Coast, have invested a lot of money on on-dock rail and on-dock 
rail is a concept to get that container on a rail and out the 
terminal.
    Senator Nelson. I think, for the benefit of the Committee, 
it would be very good and helpful to us in our oversight 
capacity if both of you all would take as a homework assignment 
to think about the intermodal efficient transfer from ship to 
rail and from rail to ship and, at your convenience then send 
that back to the Committee.
    Senator Nelson [presiding]. Senator Manchin?

                STATEMENT OF HON. JOE MANCHIN, 
                U.S. SENATOR FROM WEST VIRGINIA

    Senator Manchin. Thank you, Mr. Chairman.
    And thank you all for serving and continuing to have the 
desire to serve. And I'm sure you'll be successful.
    Mr. Elliott, if I can, we've come a long way from the 1970s 
when railroads were governed by strict Federal regulations and 
struggling to stay solvent. Today, freight rail is big business 
and supports seven Class I railroads. They generate almost $70 
billion in 2012 alone, from the figures we have.
    An efficient and effective freight rail system is also 
critical to the success of our Nation's energy and agriculture 
industries who depend on timely and affordable access to 
markets both here in the U.S. and abroad. If confirmed, you 
will again have the inimitable job of mediating and 
adjudicating rate disputes between railroads and the shippers 
that depend on them.
    I remain concerned that the rate challenges processed at 
the STB is prohibitively expensive and time-consuming. So do 
you believe that the current process is fair, transparent, and 
efficient? And if confirmed, when confirmed, what do you plan 
on doing to improve your--what would you make it recommendation 
to do better?
    Mr. Elliott. In answer to your first question, whether I 
think the process itself is fair, the answer is no. It's very 
expensive. It's very time-consuming. And I think it's a 
deterrent to some shippers to bring cases to the Board.
    As far as what I've been doing and what I plan to do, as I 
mentioned earlier to Chairman Thune, I've already commissioned 
a study by an outside consulting firm to take a careful look at 
all the different ways rate cases are handled in other agencies 
and around the world for some different ideas and different 
perspectives to handle cases, and this is especially relevant 
today. As I mentioned before, most of the cases have been 
strictly coal cases with one or two routes. Now the cases have 
become much more complex recently and are hundreds of routes. 
And it just seems like it's so complex that it's very 
difficult.
    Senator Manchin. In my little state of West Virginia, as 
you know, we depend an awful lot on rail to move a lot of our 
coal and our product and our heavy manufacturing. With that 
being said, we're pretty much captive on certain lines. There's 
not much competition, as you know; the two rail lines we have 
serving West Virginia. And the rate difference doesn't make 
sense to me. I would think a rail mile is a rail mile; a rail 
mile be based on maintenance and upkeep and all the things that 
goes toward that. Why is there such a disparity in, I mean, the 
pricing? Do you have a range that they're allowed to charge in 
depending on if they can justify their cost to you?
    Mr. Elliott. I'm sorry if I----
    Senator Manchin. Go ahead. No, no.
    Mr. Elliott. The range, I mean there is a standard set 
forth in the Act, which is a reasonable rate. And in order to 
meet that reasonable rate you have to withstand the test that's 
set forth by the Board which requires these very complex cases.
    The network itself, some shippers do pay more than others 
and that's because of some of the market power and the ability 
that, as I mentioned earlier----
    Senator Manchin. But since we are held captive in certain 
parts of our state, it's unfair for our Northern coal fields to 
pay a higher price than our Southern coal fields or vice versa 
if we're both going to the same port in Norfolk or wherever. 
That's all I'm saying. It makes it very, very hard for us to 
compete on a global market with the shipping. So anything you 
can do to improve that process and to make sure there's more of 
a competitive pricing to it than just justification of cost 
would be very helpful to us.
    Mr. Elliott. I appreciate that. We are also looking at 
competition issues, which I started this year including 
competitive access. So that is another thing that as one of the 
top things on my list to do as soon as I hopefully get 
confirmed.
    Senator Manchin. Sure.
    Mr. Elliott. Thank you.
    Senator Manchin. Mr. Cordero, if I could ask you one 
question please, sir. Through your role as chair of the Federal 
Maritime Commission, you play a critical role in supporting our 
Nation's ports and the International Commerce that they 
maintain, which is so important for us. The world's container 
port volume is twice as large today as it was 10 years ago and 
it is projected to continue to grow after the Panama Canal 
expansion is completed next year.
    I agree that we need to invest more in our nation's 
infrastructure, but we also need to be more proactive about 
improving labor relations. What lessons did we learn, did you 
learn, did all of us learn through the West Coast port shutdown 
earlier this year? And, also in the same, what do you intend to 
do, or what can we do, or what would you recommend that we do 
to improve labor relations going forward knowing that it's 
going to be of more demand?
    Mr. Cordero. Well, thank you for your question, Senator.
    I think the lessons learned with regard to those issues 
are, number one, it's extremely important to have these 
stakeholders come to the table early and be part of the ongoing 
dialogue and discussion with related to port operations. More 
specific----
    Senator Manchin. Did that not happen in the West Coast?
    Mr. Cordero. It has happened but, however, I think clearly 
the message now it has to happen at a higher level, most 
definitively. And I think with the FMC, I'm glad to report to 
this Committee, the FMC's encouragement in facilitating 
discussions like those two agreements we recently have looked 
at now that have come into place.
    Number one, the agreement between the Port of Long Beach 
and in Los Angeles to meet with stakeholders and have 
discussions on those issues. And second, the Pacific Port 
Infrastructure Operational Agreement that is now in place that 
gives the marine terminal operators and carriers the 
opportunity to discuss, again, issues like operations and 
infrastructure.
    Last, I will say that I think, as regarding labor 
negotiations, I think everybody from this experience realizes 
that, going forward, it is very important to have labor 
commence these discussions early, be part of the table, and 
also for other stakeholders to come together and realize that, 
again, at the end of the day they have to act in the best 
interest not only of the region, of the state, but of the 
country.
    Senator Manchin. Do you have the power to bring them?
    Mr. Cordero. Well, I think what we have done at the FMC, 
when we commenced one of four congestion forums as I indicated, 
last summer the FMC moved forward to have these forums in four 
different regions of the country. All stakeholders were present 
at those forums, including labor. So we've had this dialogue 
and discussion with them and we're assessing right now, 
considering the input from these stakeholders, the causes and 
effects of congestions, which I'm very optimistic when we work 
together we're certain we can mitigate that.
    Senator Manchin. Thank you very much.
    Thank both of you all.
    Senator Nelson. Senator Manchin, do you have any ports in 
West Virginia?
    Senator Manchin. I'm working on them, sir.
    [Laughter.]
    Senator Manchin. We have inland ports. I was very much 
interested in your intermodal.
    Mr. Elliott. Yes.
    Senator Manchin. But we have our inland ports off the Ohio 
and Kanawha Rivers.
    Senator Nelson. Absolutely.
    Senator Manchin. So very important to us and the trade that 
we have in the trains is unbelievable. But if you can't get the 
goods to the country and we ain't getting the goods out, we're 
in trouble anyways. So we want to make sure that you're 
successful in your efforts too, sir.
    Mr. Cordero. Thank you, Senator.
    Senator Manchin. Thank you.
    Senator Nelson. Senator Klobuchar?

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

    Senator Klobuchar. Well, thank you very much, Mr. Chairman.
    Thank you to both of you.
    We do have a port. The Port of Duluth, which is quite busy 
in Minnesota. And I want to thank you and Senator Thune for 
convening this hearing, and thank both of you.
    Freight rail is really important in Minnesota. It's 
everything from iron ore going to the Port of Duluth, iron ore 
pellets to all of the agriculture goods that we ship out all 
the time. And I think you know my view that the STB has to have 
all three board members serving as soon as possible to ensure 
that progress is made on key proceedings that are significant 
concern to the shippers.
    Last year, the Surface Transportation Board directed some 
railroads to provide weekly status reports on the movement of 
commodities on their networks. The STB's directive increased 
the transparency of data and was meant to improve the 
congestion and delay on the rails.
    Mr. Elliott, how was reporting helpful to improve rail 
service? I have to tell you I'm still hearing a lot of its 
costs, from some of our commodities, provided for the called 
``captive shippers.'' Some of it has been delayed, that we've 
seen some improvements with this but it's--a lot of it is cost. 
So how has the reporting been helpful?
    Mr. Elliott. Well, we've had a certain amount of reporting 
throughout the service crisis in 2014. So, for us, it has been 
helpful especially in the Ag industry and the coal industry to 
monitor exactly how the traffic is moving, how quickly it is 
moving. With respect to the Ag industry, we issued an order 
back in 2014 with respect to grain car backlogs, which gave us 
full information on how much the grain cars were backlogged. 
And we watched those numbers come down significantly to the 
point, now, where I think most of those grain car backlogs are 
gone.
    At the same time, we are reusing the information to watch 
the coal traffic because some of the utilities were having low 
stockpiles and we wanted to make sure that the resources were 
given where necessary because we obviously didn't want any 
utilities to shut down. So it has been a very helpful tool for 
us and which is why we put out a proposed rulemaking to make 
this tool more permanent.
    Senator Klobuchar. OK.
    One of the things, as I mentioned, I continue to hear is 
about the how long with rate issues when----
    Mr. Elliott. Yes.
    Senator Klobuchar.--shippers are raising rate issues, how 
long it takes for the STB to decide a case and the significant 
cost required to bring a case before the board. It is so 
complicated, cumbersome, and expensive that, few captive rail 
customers, even seek relief, too often the cases drag on for 
years. Are you satisfied with the process and do you think it 
offers a fair recourse for shippers? What improvements can be 
made? What can we do accelerate the timetable?
    Mr. Elliott. Yes, I do think the process itself is 
cumbersome. It has become even more cumbersome with the more 
complex cases that have been coming to the board. That is why, 
as I earlier mentioned, have commissioned a study, an external 
study, to look at other ways to bring cases. I also have 
started an internal study about complex cases inside the board. 
I've tried to figure out faster ways to handle these cases.
    In addition, I raised the caps on some of the simplified 
cases right now to make them more attractive to stakeholders to 
use, to take and be used more quickly because the timelines in 
those are much shorter and the cases themselves are much 
simpler. So it is definitely one of my goals to make the rate 
case process itself more efficient and more effective.
    Senator Klobuchar. OK.
    And are there ways we can measure that? It would be, you 
know, using a benchmark and how we can make these cases go 
faster?
    Mr. Elliott. Yes. That is one of the things that we are 
doing right now. We have been looking at the benchmarks with 
respect to the complex cases and to make sure that our office 
moves as quickly as possible. But I think the best solution 
could be some alternative ways of doing things. The SAC case 
itself is so complicated because it requires the complainant to 
build a hypothetical railroad, which you can imagine is 
incredibly complex. And so, in itself it just takes so much 
time. So we need to look at alternative ways.
    Senator Klobuchar. OK.
    And then, I'm going to put this one on the record, but the 
examples of rulemakings that have languished for more than 3 
years, of course, that's a different subject than the rate 
cases but that also has been taking too long.
    And so, I think I'll just do that on the record because 
Senator Blumenthal has been waiting for a while. So I don't 
have delays in question like the rulemaking delays. And I would 
really urge you to try to speed those up as well because it is 
just getting more and more expensive for our shippers.
    Mr. Elliott. That is another goal.
    Senator Klobuchar. OK, very good.
    And then, Mr. Cordero, we do invite you to the Port of 
Duluth. We are having a big celebration there in the next few 
months over, we got a TIGER grant and some upgrades were made. 
So we hope you come and visit.
    Mr. Cordero. I accept your invitation, Senator, and I look 
forward to that.
    Senator Klobuchar. OK, very good.
    Thank you.
    The Chairman [presiding]. And I would think you would want 
to go to the Port of Duluth sometime in the summer months.
    [Laughter.]
    Senator Klobuchar. That was an unnecessary statement from 
the Senator from South Dakota where it can get really cold and 
windy across those plains.
    [Laughter.]
    The Chairman. I would encourage the same thing in my state.
    Thank you, Senator Klobuchar.
    Senator Blumenthal?

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

    Senator Blumenthal. Thank you, Mr. Chairman.
    Mr. Cordero, I was very interested in your testimony about 
the threat of concentration among some of the liners as a 
result of this situation that you characterized in your 
testimony as ``chaotic,'' your word, in the wake of some of the 
recent economic developments and your highlighting the 
challenges of ``congestion'', again your word, in various ports 
around the United States. And I assume from your testimony that 
the danger of concentration from alliances and other 
combinations continues to exist?
    Mr. Cordero. Well, Senator, my response is twofold. Number 
one, the sharing of vessel agreements in the alliances came 
about among the major carriers for reasons of the economies of 
scale. So the $64,000 question that's out there, if they're 
going to save cost, is this going to trickle down to the 
American consumer, the American shipper? And that's exactly 
what we are monitoring. I believe that it should.
    Senator Blumenthal. It should, but is it?
    Mr. Cordero. Well, the jury is still out. I mean, you know, 
there's a light----
    Senator Blumenthal. The jury is still out and what can you 
do to make it happen?
    Mr. Cordero. Well, what we are doing now is, as I've noted, 
we are monitoring those agreements and, in fact, we are meeting 
with our global regulators, as I expressed, a second meeting 
here coming in the summer to address some of these issues. What 
we are doing now is, in relation to making sure that we discuss 
and make clear to these carriers, the expectations.
    Now, as it relates to congestion, one of the unintended 
consequences that has occurred was, because of these big 
carriers coming together with these alliances, you have 
thousands of containers arriving at some of our deepwater 
ports. I will represent to this Committee that when, in 
reference to the word chaotic, I believe the marine terminal 
operators were not prepared with the adequate logistics to 
address that kind of cargo or that amount of cargo. Having said 
that, I'm very optimistic that I think the industry now is 
aggressively looking to address and mitigate those issues so 
that, going forward, I think you will see that some of these 
issues like equipment, availability, and chassis, will not be 
an issue going forward.
    Senator Blumenthal. To what extent can that congestion be 
relieved by directing some of those cargo to other ports? I'm 
thinking just to give an example, New London, New Haven, ports 
in parts of the country where right now they might not be 
categorized as deepwater but could be adapted. Is that a 
possibility?
    Mr. Cordero. Absolutely, that's a possibility. I think the 
experts in industry are now saying the possibility of, what we 
call, transshipment, so to speak, that some of these cargo are 
arriving at some of these ports and then being shipped to the 
smaller ports for distribution. So that is something that I 
believe may be occurring and we will see in the coming years in 
terms of how this exactly plays out.
    Senator Blumenthal. And is there a role for your agency in 
encouraging the use of those ports like New London and New 
Haven?
    Mr. Cordero. Absolutely.
    From the agency's perspective, our role is to foster fair, 
efficient, and reliable international ocean transportation 
system. Using that objective in our goal, that would include 
that the cargo that's coming to this country, in both imports 
and exports, is distribute it in a way that relieves congestion 
at our major gateways and takes advantage of some of the other 
inland gateways that we have; and in particular the smaller 
ports up and down the coast.
    So I do see that coming in the future years.
    Senator Blumenthal. And what can you do to encourage the 
investment that is necessary? I'm assuming some investment 
would be necessary and also changes in practices. What 
specifically could your agency do?
    Mr. Cordero. Well, let me give you one example of that, 
Senator. Within our regulatory purview, what we are advocating 
are agreements; such as I mentioned the ones that occurred 
between Long Beach and Los Angeles. Another one that has 
occurred in the Northwest between Seattle and Tacoma. For these 
ports to come together and think about what is in the best 
interest of their region, in terms of some of these port 
operations, I think in those discussions, I think what we have 
done is basically tell the--or indicate to the port industry 
the need to have this dialogue so that we act in the best 
interest of the particular regions in country but obviously in 
the best interest of moving cargo and in an efficient manner 
throughout the country.
    Senator Blumenthal. I'd like to pursue that issue with you.
    Mr. Cordero. Absolutely.
    Senator Blumenthal. My staff, if we can contact you, to try 
to expand on the very helpful testimony that you've given this 
morning.
    And Mr. Elliott, let me just ask you briefly, what can your 
agency do to encourage the kind of investment in infrastructure 
that, I think we all agree, has been lacking; particularly in 
rail? And what priorities would you determine?
    Mr. Elliott. Excuse me.
    As I mentioned earlier, our role is to regulate the 
industry we serve as a backstop in the event the market is not 
working but, at the same time, we're here to ensure that we 
have a healthy rail industry. And in doing so, we try to 
attempt not to over-regulate which occurred in the past and 
permit the railroads to earn their cost to capital as they go 
forward.
    Senator Blumenthal. But regulation doesn't translate into 
investment.
    Mr. Elliott. Well, my point, I guess, is that we have to do 
a balancing act between allowing the shippers to have 
reasonable rates and service versus the railroads ability to 
earn enough money to invest in their infrastructure. So by 
doing that balancing act appropriately, which I believe that we 
have done in the past, the private money that comes out of the 
railroads, has been used to invest considerably in the industry 
as much as, I believe, $25 billion anticipated for this year.
    So it is our goal to not regulate so much that we cut their 
money down that they can't invest properly and have a solid 
railroad industry that we need for our country.
    Senator Blumenthal. Maybe I might just suggest, because my 
time has expired, that there is a great deal of feeling that 
the Federal Government needs to invest more, needs to be a more 
active partner, and much more aggressive investor itself, and 
that the regulation that is your responsibility should result 
in greater investment as well on the private side. And maybe 
there's a role for a partnership in a national infrastructure 
bank or public financing authority. But at the same time, there 
is more proactive and aggressive role for the Surface 
Transportation Board to take.
    So I appreciate both of your service and look forward to 
working with you.
    Thank you.
    Mr. Elliott. Thank you.
    The Chairman. Thank you, Senator Blumenthal.
    I want to ask a question to this and get both of you to 
respond. The Office of Personnel Management conducts an annual 
Federal employee viewpoint survey, which gathers information 
about workplace culture and employee satisfaction. STB has 
consistently been ranked among the top Federal work places and 
the top small agencies in the rankings. FMC has, let's say, 
more work to do.
    I'd like to hear from both of you about your goals for 
maintaining and improving workplace efficiencies in morale. I 
understand both agencies are working on or have recently 
completed management studies. So could you talk maybe about 
what lessons you have learned there that you can share?
    Mr. Cordero. I go first?
    Mr. Elliott. You go first.
    Mr. Cordero. Thank you for your question, Senator.
    With due respect to Mr. Elliott, my goal is to have the FMC 
replace the STB as the best place to work in small agencies and 
I stated so.
    But on a more serious note to your question, Senator, let 
me represent to the Committee here with me this morning is the 
SES, senior executive staff, and they know the direct orders in 
terms of what we need to do proactively on this question of the 
workplace. I will represent that, since I've become Chair in 
April 2013, there are three very important documents that have 
been put in place: Our statement of principles; our plan to 
improve the workplace and employee morale; and last, our 
strategic plan. The combinations of those documents give us a 
definitive plan of action in terms of what we need to do; much 
of this is employee engagement and make sure that we address 
the concerns that have been raised by that service.
    So, in summation, I'm taking this mandate very seriously 
and I think my SES staff at the FMC and my fellow 
commissioners, who are supporting this, they know that those 
directives are very serious, and we're moving forward. And I'd 
like to say, in the last couple of years, there has been 
improvement.
    The Chairman. OK. All right.
    Go ahead.
    Mr. Elliott. As you mentioned, the STB for the last five 
years has won the award for the best place to work, small 
agency, pursuant to the partnership survey. Also, the last 3 
years, has won the most innovative agency. In fact, this year I 
believe that, as far as the scores were concerned for best 
agency to work for, we had the highest score of any agency in 
the government.
    So my goal is to continue to keep the morale at a high 
level but, at the same time, work to make the agency more 
effective as far as its casework flow, while at the same time 
keeping people content with their positions. I find that if 
people become dissatisfied with their work, they become 
ineffective. So I think morale is just as important but, in 
addition, we have to address new processes to make ourselves 
even more effective.
    The Chairman. In this sort of same vein, Chairman Cordero, 
a couple of months ago the FMC IG released a report on 
workplace evaluation and examined why the agency is ranked in 
the bottom 25 percent since 2011. In terms of employee 
satisfaction commitment in the report states: ``Challenges with 
previous leaders remain top-of-mind at the agency and continue 
to impact morale and the leadership legacy issues remain top-
of-mind at FMC.''
    So you mentioned a little bit and maybe if you could just 
drill down a little bit more on that and what you've been doing 
to try and deal with some of these concerns. And it goes on to 
recommend that you select an executive champion to lead 
improvement efforts and calls on the FMC management team to 
write up a corrective action plan within 30 calendar days. And 
I'm wondering maybe if you have done anything with those 
recommendations yet?
    Mr. Cordero. No, absolutely.
    I mentioned the three documents in reference to what we've 
done as a plan of action. The corrective action has been 
responded to as part of a living document of our workplace 
evaluation and there have been amendments to that.
    And as I indicated, I think one of the things that I have 
done specifically as Chairman, I have worked lockstep with the 
senior executive management at the Commission to pursue this 
endeavor. So I believe that most definitively what the two 
things that I have done is: number one, improve transparency 
and that, with regard to the management model; and second, move 
forward with ideas and plans of action of employee engagement.
    I will add to that that I think, as Chairman, I will say 
that I've continued the practice of meeting with all the 
employees in the Commission, having casual conversations in 
order to give them opportunity to have input, and I have a 
number of all hands meetings that have occurred in the last two 
years, which I will continue to do. So suffice it to say that 
this is a challenge that is welcomed, so to speak, and that I 
believe that we'll be, going forward, continuing to increase 
the numbers and the percentile that we've seen in the last 
couple years at the agency.
    The Chairman. OK.
    All right. Well, I guess that's it.
    Do we have--OK.
    Do you want to ask questions?
    No, I'm kidding.
    [Laughter.]
    The Chairman. OK.
    Do you want us to or not?
    No?
    OK. All right.
    Well, we will keep the hearing record open for two weeks. 
During which time, Senators are asked to submit any questions 
for the record. Upon receipt, the witnesses are requested to 
submit those written answers to the Committee as soon as 
possible.
    Again, we thank you for being here, for your willingness to 
serve----
    She's here. OK, all right.
    [Laughter.]
    The Chairman. Well, I got that part in.
    Senator Cantwell has arrived. All right.

               STATEMENT OF HON. MARIA CANTWELL, 
                  U.S. SENATOR FROM WASHINGTON

    Senator Cantwell. So sorry, Mr. Chairman.
    The Chairman. I was going to have to tell jokes here for a 
minute.
    Senator Cantwell. I so appreciate it.
    The Chairman. It's a good thing I'm here.
    Senator Cantwell recognized for questions.
    Senator Cantwell. Thank you.
    I want to say, Mr. Chairman, I don't know if you have heard 
but we've had another rail explosion this morning and certainly 
want to encourage our Committee to look at legislation in this 
matter. It's something I think is critically important for us 
to do.
    So I wanted to ask Mr. Elliott about surface transportation 
and safety in general, and in moving freight. And there are 
many troubling things about, you know, where we are in 
improving movement of goods and services but, at the same time, 
getting the safety right.
    And so, I don't know if you have comments on that.
    Mr. Elliott. As far as the safety aspects, it's not in our 
jurisdiction necessarily. The FRA and PHMSA handle most of 
those issues. Although, we do take a look at safety issues in 
construction matters, mergers and acquisitions, and 
abandonments. So when the issue of safety, like you mentioned 
an explosion, is raised in those proceedings, we do take a 
careful look at how that impacts a community. It is very 
important to us. We do a full environmental evaluation which 
includes a full safety evaluation in those situations.
    Senator Cantwell. OK.
    And Mr. Cordero, in your time at the Maritime Commission, 
what have you learned about the Federal Government, you know, 
to take action to make our ports competitive?
    Mr. Cordero. Well, from the FMC perspective, Senator, I 
earlier testified that--give you an example of the action we 
have taken. Last summer, we identified congestion as a major 
issue for us to address in the interest of fostering fair and 
efficient ocean transportation systems and thus we conducted 
four forums in four different regions of the country. I think, 
as I've indicated, congestion in my mind is of a serious issue 
that needs to be addressed, factors related to infrastructure 
and funding.
    So I think the lessons learned, and added to the fact that 
I was a port commissioner for 8 years at the Port of Long 
Beach, it is the importance of having our ports to be well-
funded with infrastructure, which includes issues related to 
dredging, and infrastructure related to the first mile of 
operation of the movement of that cargo.
    Senator Cantwell. Do you think implementing the new freight 
recommendations by the Freight Advisory Board will help on that 
competitiveness?
    Mr. Cordero. Absolutely, Senator.
    And, as you know, the FMC back in 2012 released a report on 
the Diversion of Cargo; specifically in relation to how the 
Northwest was being impacted. But one of the lessons learned 
about that particular study that when you look to our 
competitors to the North, Canada, and to the South, Mexico, 
both those countries have a common denominator that they have a 
national freight policy. So I'm glad to see that both Congress 
and the Administration and DOT and MARAD are very active on 
this and hopefully we will reach that point. Because I think 
it's tremendously important for us to, in order to be 
competitive and as our nation's ports, to have a national 
freight policy that moves forward to identify the funding 
that's so necessary for our gateways.
    Senator Cantwell. Well, thank you.
    And I think this is also, Mr. Chairman, so important. You 
and I have had a chance to talk about this in general but this 
is, you mentioned the Northwest, but this is really about 
getting products to their destination; a lot of it through the 
Northwest. So the Midwest is impacted, everybody is impacted. 
And so, we have to do a better job of both improving our 
infrastructure to moving goods and services. And then on the 
other side, make sure we have safe transportation for these 
products.
    So the accident that happened today is the fifth in recent 
months of an oil train explosion. We have a new rule that came 
out that I think is insufficient. In fact, it has a new 
disclosure requirement that rolls back, I think, where I think 
many of my colleagues want to go in making sure that state's 
emergency managers know what is happening. So we'll be sending 
a letter to Secretary Foxx later today urging him to 
immediately correct that on emergency orders so that first 
responders and communities can be well-prepared too; like the 
incident that happened today.
    So I know it is complex and I know we are going to be 
discussing TPA on the floor soon. And so, to me, this is all 
about getting our economic future right. We got to make sure 
that we have good transportation quarters that can maximize 
capacity but we also have to have safe rules for the transport 
of product, and we have to make sure that products can get on 
the rails and are not crowded out particularly by this kind of 
product that is, in my opinion, too volatile.
    So anyway, I look forward to working with both of you. And 
thank you, Mr. Chairman, for the indulgence in getting my 
questions in at this hearing.
    The Chairman. Thank you, Senator Cantwell.
    Senator Cantwell, of course, representing a state in the 
Northwest that relies heavily not only on the ports but on 
railroads. And of course, we rely heavily on railroads to get 
our products to your ports so they can hit the export market 
that the supply chain is critically important to our economy 
and to the jobs that go with it. And so, you know, the people I 
represent, about one out of every three rows of soy beans that 
is planted gets exported.
    So it's a big deal in all of our states, and we want to 
make sure that we get these issues right. So you and your 
organizations and agencies are critical to that and we will 
look forward to working with you. And obviously, we will have 
along the way, I'm sure, questions and suggestions and thoughts 
for you, but we appreciate your attendance here today and, 
again, your willingness to serve.
    And we will keep the record open, as I mentioned earlier, 
for a couple of weeks for Senators who have additional 
questions. And we would ask that you get those responses back 
as quickly as possibly so that we can process things and keep 
your nominations moving forward.
    With that, this hearing is adjourned. Thanks.
    [Whereupon, at 11:12 a.m., the hearing was adjourned.]

                            A P P E N D I X

                                   The Fertilizer Institute
                                        Washington, DC, May 6, 2015

Hon. John Thune,
Chairman,
Committee on Commerce, Science, and Transportation,
Washington, DC.

Hon. Deb Fischer,
Chair,
Subcommittee on Surface Transportation,
Washington, DC.
Hon. Bill Nelson,
Ranking Member,
Committee on Commerce, Science, and Transportation,
Washington, DC.

Hon. Cory Booker,
Ranking Member,
Subcommittee on Surface Transportation,
Washington, DC.

Dear Chairman Thune, Ranking Member Nelson, Subcommittee Chair Fischer, 
and Ranking Member Booker:

    Thank you for holding today's ``Nominations Hearing'' at which the 
pending nominations of The Honorable Daniel Elliott and The Honorable 
Mario Cordero will be considered. On behalf of The Fertilizer Institute 
(TFI), I wish to share the views of America's fertilizer industry, 
specifically as it relates to former Surface Transportation Board (STB) 
Chairman Elliott. TFI supports former STB Chairman Elliott's 
reappointment, and encourages Committee members to vote in favor of it.
    TFI represents a variety of agricultural organizations, 
particularly as it relates to crop nutrients, which are essential to 
U.S. food production. Research confirms that 40-60 percent of crop 
yields are attributable to the nutrient inputs of fertilizers. This 
also means that substantially less land is needed tofeed the world's 
7.2 billion--and growing--people.
    Fertilizer production facilities operate every day of the year, 
and, in terms of distribution, the industry depends year round on safe, 
reliable, and cost-effective rail transportation. The application of 
fertilizer by the farmer is typically a narrow window of opportunity. 
An effective rail transportation system is critical each and every day 
to ensure farmers have what they need when they need it.
    Given the reliance of TFI members on rail transportation and a 
recent history of significant service issues, TFI fully supports 
policies that will promote greater competition between railroads and 
improve the efficiency and effectiveness of the STB. Likewise, the rail 
transportation marketplace, which has changed dramatically over the 
past 30 years, requires strong leadership at the STB to promote safety, 
reliability, and fairness. The fertilizer industry believes that former 
Chairman Elliott's experience and the attention, particularly by this 
Committee, to modernizing the STB will reenergize efforts to improve 
the rail transportation marketplace for both shippers and railroads.
    TFI is also hopeful that former Chairman Elliott will expand the 
STB's proposed rulemaking--Docket No. EP 724 (Sub-No. 4)--related to 
service reporting requirements for certain commodities to include 
fertilizer. The proposal requires reports on certain commodities, but 
excludes fertilizer, which is vital to all crops. The exclusion of 
fertilizer may have the unintended consequence of incentivizing rail 
carriers to prioritize other commodities over fertilizer shipments. As 
a recent U.S. Department of Agriculture report states, fertilizer 
``must be moved year round in order to work within the capacity 
constraints ofthe transportation network.'' As farmers at the April 10, 
2014, STB hearing on rail service testified, timely fertilizer 
shipments are
a very serious concern. TFI has asked the STB to include fertilizer 
among the reportable commodities in Docket No. EP 724 (Sub-No. 4).
    Thank you again for holding today's hearing.
            Sincerely,
                                                Chris Jahn,
                                                         President,
                                              The Fertilizer Institute.

Cc: Members of the Committee on Commerce, Science, and Transportation
                                 ______
                                 
     Response to Written Questions Submitted by Hon, John Thune to 
                             Mario Cordero
    Dear Senator Thune and Committee Members:

    Thank you for the opportunity to appear before you on May 6, 2015, 
and for this opportunity to address the Committee's questions on the 
FMC's regulations and the impact of service contracts on the ocean 
transportation community. I recognize the importance of these questions 
to the Committee, and to the public. These questions address issues 
currently being reviewed by the FMC staff. The results of that staff 
effort will be delivered to the Commission, and my fellow Commissioners 
and I will thoroughly review the regulations and consider potential 
changes and reforms to the existing regulations. The Commission's 
deliberative process with respect to the service contracts and non-
vessel-operating common carrier service arrangements (NSAs) is likely 
to begin by the end of the summer, and should be concluded this 
calendar year. To better address your specific questions, I will 
respond to each question in turn.

    Question 1. Chairman Cordero, do you believe that the FMC's 
regulations surrounding service contract filings are in keeping with 
the flexibility envisioned by the Ocean Shipping Reform Act of 1998 
(OSRA). Some have expressed concern that the requirements are more 
burdensome and extensive than necessary, and have hampered the ability 
of shippers and carriers to react to the market as quickly as possible. 
Specifically, 1) the regulations surrounding contract filings make 
agreed-upon contracts and amendments effective only upon their date of 
filing with FMC, not upon the date on which the agreement is reached 
between the parties, and 2) regulations mandate that cargo cannot be 
moved under a contract or amendment until the contract or amendment is 
filed with the FMC. Both of these regulations appear to erect 
unnecessary roadblocks to carriers' ability to react quickly to market 
changes, and consequently, are often costly barriers to successful 
commerce. What in fact does the FMC do with these extensive filings, 
and what actions do you think the agency should take to improve and 
facilitate the filing process in order to avoid undue delays?
    Answer. The Ocean Shipping Reform Act of 1998 expanded individual 
pricing options for shippers and common carriers by, in part, allowing 
for electronic filing of service contracts, and providing for 
confidentiality for contractual arrangements filed with the FMC--all in 
lieu of tariff pricing. Current statutory law provides that an ocean 
common carrier must provide all of its rates and charges either in a 
published tariff or in a confidentially filed service contract, with 
the publication of certain essential terms. 46 U.S.C. Sec. Sec. 40501-
40502. The FMC's regulations enable the Commission to accomplish its 
Congressional mandate for receipt of service contracts to ensure 
compliance with the Shipping Act, while allowing the industry to make 
the business arrangements and transactions that best respond to the 
needs of the shipping public. Regulations, however, can and should be 
reviewed to ensure that they accomplish their purposes without unduly 
hampering those regulated. I fully support the FMC's review of its 
regulations on service contract filing and plan on carefully 
considering recommendations made as a result of that review.
    The FMC receives filed service contracts and amendments as part of 
its critical mission to protect the U.S. shipping public. The FMC uses 
filed service contracts and amendments to: (1) provide assistance when 
appropriate should disputes arise between a shipper and carrier; (2) 
monitor activities of carriers by reviewing General Rate Increases 
(GRIs), Peak Season Surcharges and other surcharges or assessorial 
charges that are filed in vessel-operating common carriers' (VOCCs) 
tariffs and determining whether or not such charges are implemented 
through service contracts; (3) determine if the industry is dealing 
with rate volatility by agreeing to index-linked contracts (ILCs); (4) 
monitor contracts to determine how bunker costs, one of the carriers' 
highest, are being recovered; (5) follow contracting practices between 
VOCCs and beneficial cargo owners (BCOs) that have a long standing 
relationships; (6) review for compliance regarding such items as the 
essential terms contained in contracts and the effective date in the 
actual contract or amendment; (7) review the activities of BCOs and 
non-vessel-operating common carriers (NVOCCs), including oversight of 
their Minimum Quantity Commitments; (8) follow certain export rates, 
such as, for agricultural goods; (9) address inquiries from BCOs and 
NVOCCs on questions they have pertaining to their contracts; (10) 
follow up with VOCCs on questionable shipper status in service 
contracts; and (11) assist in the FMC's mandated enforcement of the 
Shipping Act. In addition to FMC review, other Federal agencies access 
and utilize the FMC's service contracts and amendment filings. 46 CFR 
Sec. 530.4. Currently, the U.S. Agency for International Development 
(USAID), the Department of Agriculture, and the U.S. Transportation 
Command (TRANSCOM) access SERVCON to accomplish their missions.
    Carriers have indicated that the requirement to file service 
contracts and amendments prior to moving the cargo may limit their 
flexibility in reacting to market factors. Through electronic filing of 
service contracts and amendments, the Commission has made efforts to 
reduce the filing burden. Through its web services program, the FMC is 
already taking steps to improve the filing process. Ocean carriers' 
process thousands of shipments through ``auto-rating systems'' tied 
into their contract managements systems. Carriers can minimize their 
burden by filing amendments directly from their contract management 
systems through the FMC's automated web services into the Commission's 
service contract system (SERVCON) without requiring any manual input. A 
number of carriers are already using this option and have reported that 
web services have reduced their burden and reduced manual input errors 
significantly, thereby cutting costs.
    Further improvements, such as revising FMC regulations, are done 
through rulemaking at the Commission level. I am committed to examining 
at the existing regulations and participating with the full Commission 
in the deliberation process to fully accomplish the purposes of the 
Shipping Act and OSRA.

    Question 2. In what way, if any, do you believe the efforts of the 
FMC would be hampered if contracts and amendments became effective when 
the agreement is reached between the parties, and if carriers were 
allowed to file these contracts and amendments within some reasonable 
time after an agreement is reached?
    Answer. The Shipping Act requires the publication of certain 
service contract terms. 46 U.S.C. Sec. 40502. The FMC's current 
regulations require that the terms included in a service contract must 
not be uncertain, vague, or ambiguous. 46 CFR Sec. 530.8(c). In my 
opinion, certainty of terms is crucial to a valid, enforceable 
contract. It is not clear whether a delay in filing service contracts 
and amendments with the FMC will increase misunderstandings or create a 
lack of certainty as to what a shipper's total charges and terms would 
be as its cargo is transported. As identified above, other Federal 
agencies and parties in labor disputes accessing the FMC's service 
contract information may also have questions as to whether a service 
contract or amendment exists, and its applicable terms. It is my hope 
that the public will file comments during the rulemaking process that 
will fully address the issue of certainty of terms. Accordingly, I 
would consider public comments and staff recommendations on this matter 
in determining whether to adopt any changes to the current regulations 
in this area.

    Question 3. In 2011 the FMC set a schedule for reviewing its 
regulations. However, perhaps in recognition of the shipping industry's 
growing concern with the burden imposed by excessive service contract 
filing regulations, in early 2013 and under your leadership the FMC 
prioritized the review of service contract regulations, putting them 
under immediate review, and asked for the shipping industry's input on 
the reform process?
    What is the status of the review of service contract filing 
regulations? If you are reconfirmed, can we expect definitive 
regulatory reform with respect to carriers filing service contracts? If 
so, when?
    Answer. The Commission is currently reviewing its major regulations 
pursuant to Executive Orders 13563 (applicable to executive agencies) 
and 13579 (issued to encourage independent regulatory agencies to 
pursue the goals stated in Executive Order 13563). The Working Group 
for the Retrospective Review of Service Contracts and NSAs (Service 
Contract/NSA Working Group) convened in the fall of 2013 to begin a 
comprehensive review of FMC regulations in 46 CFR Part 530, Service 
Contracts, and Part 531, NVOCC Service Arrangements. These two Parts 
are being reviewed together because Service Contracts and NSAs share 
many of the same contracting attributes, and both must be filed into 
the Commission's SERVCON system by the VOCCs and NVOCCs. In addition, 
VOCCs and NVOCCs are also required to publish the essential terms for 
each of their contracts in a tariff format.
    The Commission prioritized the retrospective review with regard for 
the concerns of the industry and the importance service contracts to 
oceanborne commerce. In 2014, not long after the immediate review of 
service contracts and NSAs was announced, the FMC completed its 2014-
2018 Information Resources Management Strategic Plan. A major component 
of that plan will significantly upgrade our internal IT systems to 
improve data support for all Commission programs and research projects, 
as well as providing the technical foundation to simplify stakeholder 
filing processes.
    The Service Contract/NSA Working Group has not submitted its 
recommendations to the Commission. I have been advised that the group 
met with numerous stakeholders to receive their views on changes to the 
Commission's regulations. In the course of those meetings, the Service 
Contract/NSA Working Group received numerous suggestions, for example, 
one suggestion is delayed batch filings as to contract amendments 
albeit on a monthly, rather than a quarterly basis. The Service 
Contract/NSA Working Group is reviewing the feasibility of such a 
change from the standpoint of our information technology infrastructure 
and from a staff resources standpoint. The Service Contract/NSA Working 
Group has also received, and is assessing, suggestions from some 
stakeholders that the contract correction process be modified, 
including the question of changes related to the supporting affidavit 
required for each service contract or NSA correction.
    I have been informed that the staff recommendations of the Service 
Contract/NSA Working Group will be finalized in the coming months. The 
staff review will be transmitted to the Commission for potential action 
through rulemaking. If reconfirmed, I resolve to carefully weigh the 
input from the Service Contract/NSA Working Group, the industry, and 
the public, and consider all potential reforms to service contract 
filing in conjunction with my fellow Commissioners. I remain committed 
to lessening unnecessary regulatory burdens on regulated entities while 
allowing the Commission to fulfill its oversight role effectively under 
the Shipping Act. The Commission will likely issue either an Advanced 
Notice of Proposed Rulemaking or a Notice of Proposed Rulemaking in 
order to obtain comments from all interested stakeholders that would be 
affected by recommended rules changes. The notice seeking comments 
should be issued this year.

    Question 4. Please provide an update on the status of your review 
of congestion in U.S. ports, and any planned future action relating to 
your report on this issue.
    Answer. Modern ports that move the Nation's goods are vital to 
economic growth, increasing jobs, and enhancing the country's ability 
to compete globally. At the same time, U.S. ports have faced increased 
congestion and delays that deeply impact both the import and export 
markets in the United States. The FMC undertook a number of regional 
Port Forums in 2014 to provide an opportunity for public comment and 
industry stakeholders to share their views on the causes and challenges 
surrounding port congestion. After the Forums, the FMC resolved to take 
the shared information and provide a detailed, organized overview of 
the comments made at the Port Forums, and ultimately synthesize the 
main issues, ideas, and potential lessons learned and provide it to the 
public with a goal to shed light on those root causes that can be 
identified, and potential solutions.
    The FMC also determined that detention and demurrage issues 
surrounding port congestion should be separately reviewed. Staff 
completed a report on entitled Report: Rules, Rates, and Practices 
Relating to Detention, Demurrage, and Free Time for Containerized 
Imports and Exports Moving through Selected United States Ports, which 
was issued by the Commission and is available on the FMC's website, 
www.fmc.gov. Later this summer a further report aimed at promoting 
further dialogue on and discussion of unsettled port congestion issues 
will be completed. This will be an issues-based, in-depth synopsis of 
the comments and arguments provided at the Port Forums. Lastly, there 
will be a research synthesis of U.S. port congestion causes, 
consequences, and challenges that will be released prior to the end of 
the Fiscal Year. There has been no decision on a set course for 
Commission action at this time--all options remain on the table.
    Thank you again for the opportunity to address your questions and 
provide the Committee with information relating to the FMC's treatment 
of these matters.
                                 ______
                                 
     Response to Written Questions Submitted by Hon. John Thune to 
                         Daniel R. Elliott III
    Question 1. Mr. Elliot, the STB Reauthorization Act of 2015, a 
bipartisan bill that I have worked on with Ranking Member Nelson, and 
which passed out of this Committee in March, includes a provision that 
would allow Board members to speak to one another as well as increase 
the size of the Surface Transportation Board from three to five 
members, primarily to address inefficient quorum requirements. What are 
your thoughts on both of these provisions?
    Answer. I support the goal of increasing communication among Board 
Members. I understand that appointees to other multi-member agencies 
with more than 3 members may engage in one-on-one discussions and 
remain in compliance with Government in the Sunshine Act. If confirmed, 
I stand ready to ensure that the Board takes advantage of any new 
procedures that increase the opportunity for more efficient 
communication.

    Question 2. Mr. Elliot, the Surface Transportation Board 
Reauthorization Act of 2015 also includes a provision addressing the 
current inability of the STB to initiate investigations on matters 
other than rate cases. How would expanding the investigative 
responsibility of the STB enhance your ability to carry out the mission 
of the STB? What past experience would you draw on to implement the 
potentially expanded investigative responsibility of the STB?
    Answer. I believe that the investigatory authority provided in 
S.808 will give the Board an effective tool to respond quickly and 
nimbly to issues that arise. For example, during last year's rail 
service crisis, the Board relied on its general powers provisions in 49 
U.S.C. 721 to request reporting from the railroads regarding service 
performance. The ability to rely on a more specific investigatory 
provision would give the Board greater flexibility to address 
significant issues in the industry.

    Question 3. Mr. Elliot, you commissioned a Price Waterhouse Coopers 
management study during your previous tenure as Chairman. What were you 
hoping to learn from the study? What did it show? Will you provide a 
copy of the study to the Committee?
    Answer. I approved a contract solicitation in 2014 for a study of 
the Board's internal processing of rate cases and how we might improve 
from an organizational management perspective. While the Board staff is 
comprised of subject matter experts in fields related to economic 
regulation, the agency does not possess an in-house team/process 
expert. As cases get more complex and rate case teams necessarily grow 
in size and tasks, we need to look for ways to improve how the agency 
structures its internal process, which already includes multiple Board 
offices, dozens of agency employees and multiple levels of review. 
After completing a process pursuant to federal acquisition 
requirements, the agency engaged Price Waterhouse Coopers to complete 
this process study.
    I understand that the study is not yet complete. Should I be 
confirmed, I look forward to reviewing its recommendations and 
receiving input from my Board colleagues as well as senior management 
regarding its recommendations. If confirmed, I will provide a copy of 
the study to the Committee.

    Question 4. Mr. Elliot, you have stated that your top two goals as 
Chairman of the STB was to increase the transparency of the agency and 
create better harmony between shippers and railroads throughout the 
United States. What improvements were made under your leadership to 
increase the transparency of the STB and to create better harmony 
between shippers and railroads?
    Answer. I pursued several initiatives at the Board that increased 
transparency and improved the communication between shippers and 
carriers. First, it was my practice to hold oral arguments and hearings 
in proceedings where the Board and our stakeholders would benefit from 
an open dialogue. During my tenure, the full Board held 28 hearings/
arguments and the agency also held numerous public meetings conducted 
by Board staff throughout the country. Second, I worked to strengthen 
the Board's alternative dispute resolution program so that carriers and 
shippers could avail themselves of techniques like mediation, and I 
grew the Board's Rail Customer and Public Assistance Program (RCPA) by 
increasing its profile and adding experienced staff to the office. 
Indeed, in 2014, RCPA handled over 1,300 inquiries, approximately 160 
of which were informal complaints between shippers and railroads. Many 
of these informal complaints were successfully resolved, obviating the 
need for a formal proceeding. Third, I traveled to visit the Board's 
stakeholders at their facilities and plants--a key component to 
understanding both the rail industry and the customers it serves.

    Question 5. Mr. Elliot, as Chairman, I understand that one of the 
areas you focused on was technology improvement. Can you speak to the 
need for improved technology at the STB as well as what initiatives you 
advanced in the past or would advance in the future?
    Answer. The Board has taken a number of steps in the last several 
years to improve its information technology capabilities. However, the 
infrastructure that would support the systems for an improved agency 
website or more automated reporting tools is badly in need of updating. 
The challenge for an agency the size of the Board is to find sufficient 
resources to completely overhaul its infrastructure, without 
sacrificing mission-critical functions. In 2014, for example, the Board 
solicited bids to move to a cloud computing solution. The bid came in 
well above the Board's available funds for such a project. When I 
departed the agency in December 2014, Board staff was developing 
options for breaking the IT modernization project into smaller phases 
that the Board could accomplish over a number of years with smaller 
budget outlays. It is my expectation that work on that project has 
continued since my departure.

    Question 6. Mr. Elliot, I am regularly hearing from constituents 
about the length of time it takes the STB to finalize rules and have 
been given numerous examples of rules that have languished for years. 
What steps would you take to improve the Surface Transportation Board's 
rulemakings process?
    Answer. The Board completed several important rulemaking 
proceedings in the last few years involving matters such as: mediation 
and arbitration; procedures for assessing demurrage charges; increased 
damage award caps for smaller rate cases; and increased disclosure of 
information whenever a rail line is sold or leased subject to a ``paper 
barrier.''
    But the Board has not yet completed certain proceedings related to 
competition issues, including competitive access, revenue adequacy, and 
grain rates. These proceedings, which raise issues at the core of the 
Board's regulatory policy, have been a source of significant contention 
among agency stakeholders for many years. If confirmed, I intend to 
resolve all of these open rulemaking proceedings within a year. My goal 
will be to address these interrelated issues consistently in a way that 
reasonably balances the goals of competition for shippers, adequate 
revenues for rail carriers, and a safe and efficient rail network. The 
Board hearings scheduled for June and July, which I will attend 
regardless of whether the confirmation process is completed, will 
facilitate resolution of these matters.

    Question 7. Mr. Elliot, in your responses to the Committee 
Questionnaire, you mention that you are leading the Board's efforts to 
implement the Passenger Rail Investment and Improvement Act of 2008, a 
law designed to improve Amtrak's on-time performance. What steps have 
you taken in order to improve performance, and what steps would you 
take as Chairman to ensure this goal is accomplished?
    Answer. The Board's PRIIA implementation has been a multi-pronged 
approach. First, the agency has set up a passenger task force that 
focuses on PRIIA issues, which includes staff from the Office of Public 
Assistance, Government Affairs and Compliance; the Office of 
Proceedings; and the Office of Economics. Second, in 2014, the agency 
entered into an agreement with DOT's Volpe Center for on-time 
performance data analysis. The Volpe arrangement will assist the Board 
in the development and analysis of large amounts of data that will be 
useful in passenger-freight rail oversight matters pursuant to the 
Board's responsibilities under PRIIA. Third, the Board sponsored 
mediation between Amtrak and those states with state-supported routes 
in an effort to resolve areas of concern.
    Outside of these initiatives, the Board was active in ensuring that 
the railroads pushed to improve Amtrak's service during the service 
issues in 2013-2014. I met with the leadership of multiple railroads 
regarding Amtrak OTP issues and directed Board staff to monitor Amtrak 
issues during their regular conference calls with railroad operations 
personnel. I sought and received information from railroads regarding 
anticipated Amtrak performance issues in the annual ``Fall Peak'' 
submissions. In addition, the Board is adjudicating several PRIIA-based 
complaints that have been filed by Amtrak against individual railroads.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                         Daniel R. Elliott III
    Question 1. During your confirmation hearing, you answered a 
question regarding differences in rates between northern West Virginia 
and southern West Virginia as follows:
    Answer. We are also looking at competition issues, which I started 
this year, including competitive access. So that is another thing, one 
of the top things, on my list to do as soon as, if I hopefully get 
confirmed.

    Question 2. One could read a number of things into your answer, 
specifically that you have already made a decision on this proceeding. 
Would you please clarify whether or not you have already pre-determined 
the outcome of this proceeding and support competitive access?
    Answer. My answer to Senator Manchin's question was intended to 
convey that my one of my top priorities, should I be confirmed, will be 
to resolve the competitive access proceeding. I believe that our 
stakeholders are entitled to certainty on the direction that the Board 
will take with regard to competitive access, revenue adequacy and other 
significant issues that the Board is considering. The fact that the 
Board is examining these issues does not mean that there is any pre-
determined outcome. Rather, in light of a changing rail industry, we 
must ensure that the policies we have today are as effective as they 
can be.
                                 ______
                                 
     Response to Written Question Submitted by Hon. Jerry Moran to 
                         Daniel R. Elliott III
    Question. Mr. Elliott, my understanding is there is a current 
proceeding before the STB, Ex Parte 724, to require Class I railroads 
to submit weekly service metrics reports, but only for certain 
commodities, such as grain and ethanol. Why is fertilizer not included 
as a reported commodity?
    While fertilizer distribution may be primarily an issue during the 
Spring and Fall, the peak seasons for its use, logistically fertilizer 
must still move year round to ensure its timely availability during 
periods of peak usage. For environmental and practical purposes, the 
window for fertilizer application is often narrow, requiring all pieces 
to be in place for the final distributions to farms. This issue is 
examined in far greater detail in a January 2015 report by the U.S. 
Department of Agriculture, entitled ``Rail Service Challenges in the 
Upper Midwest,'' which states:

        ``Although current rail metrics are showing improvement, 
        concerns of timely fertilizer deliveries can arise in advance 
        of 2015 spring planting. Roughly 60 percent of fertilizer is 
        applied in the spring, and 40 percent is applied in the fall. 
        Even though the demand for fertilizer is seasonal, it must be 
        moved year round in order to work within the capacity 
        constraints of the transportation network''(page 25).

    I would be happy to provide the full text of this report if 
necessary. Thank you in advance for your attention to this matter, any 
insight you have would be greatly appreciated.
    Answer. As your question indicates, the Board has proposed a rule 
that would require the railroads, on a permanent basis, to report 
service performance data on a variety of commodities, including grain, 
coal, automotive, crude oil and ethanol. While the initial list of 
specific commodities did not include fertilizer, The Fertilizer 
Institute has submitted comments requesting that the Board add 
fertilizer to the reporting requirements. Because the rulemaking 
proceeding is currently pending before the Board and, should I be 
confirmed, I would be voting on this very issue, I must refrain from 
directly commenting on that request at this time. As a general matter, 
however, I certainly agree that the timely distribution of fertilizer 
is absolutely critical to the Nation's agricultural sector. For that 
reason, fertilizer movements were the subject of the Board's very first 
reporting order in the recent service crisis.

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