[Senate Hearing 115-41]
[From the U.S. Government Publishing Office]




                                                         S. Hrg. 115-41

      MOVING AMERICA: STAKEHOLDER PERSPECTIVES ON OUR MULTIMODAL 
                         TRANSPORTATION SYSTEM

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

                                HEARING

                               before the

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

                                 of the

                         COMMITTEE ON COMMERCE,
                      SCIENCE, AND TRANSPORTATION
                          UNITED STATES SENATE

                     ONE HUNDRED FIFTEENTH CONGRESS

                             FIRST SESSION

                               __________

                           FEBRUARY 15, 2017

                               __________

    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 FIFTEENTH CONGRESS

                             FIRST SESSION

                   JOHN THUNE, South Dakota, Chairman
ROGER F. WICKER, Mississippi         BILL NELSON, Florida, Ranking
ROY BLUNT, Missouri                  MARIA CANTWELL, Washington
TED CRUZ, Texas                      AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska                RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts
DEAN HELLER, Nevada                  CORY BOOKER, New Jersey
JAMES INHOFE, Oklahoma               TOM UDALL, New Mexico
MIKE LEE, Utah                       GARY PETERS, Michigan
RON JOHNSON, Wisconsin               TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia  TAMMY DUCKWORTH, Illinois
CORY GARDNER, Colorado               MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana                  CATHERINE CORTEZ MASTO, Nevada
                       Nick Rossi, Staff Director
                 Adrian Arnakis, Deputy Staff Director
                    Jason Van Beek, General Counsel
                 Kim Lipsky, Democratic Staff Director
              Chris Day, Democratic Deputy Staff Director
                      Renae Black, Senior Counsel
                                 ------                                

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

DEB FISCHER, Nebraska, Chairman      CORY BOOKER, New Jersey, Ranking
ROGER F. WICKER, Mississippi         MARIA CANTWELL, Washington
ROY BLUNT, Missouri                  AMY KLOBUCHAR, Minnesota
DEAN HELLER, Nevada                  RICHARD BLUMENTHAL, Connecticut
JAMES INHOFE, Oklahoma               TOM UDALL, New Mexico
RON JOHNSON, Wisconsin               TAMMY BALDWIN, Wisconsin
SHELLEY MOORE CAPITO, West Virginia  TAMMY DUCKWORTH, Illinois
CORY GARDNER, Colorado               MAGGIE HASSAN, New Hampshire
TODD YOUNG, Indiana



















                            C O N T E N T S

                              ----------                              
                                                                   Page
Hearing held on February 15, 2017................................     1
Statement of Senator Fischer.....................................     1
Statement of Senator Booker......................................     3
Statement of Senator Nelson......................................     4
Statement of Senator Cruz........................................     5
Statement of Senator Peters......................................     6
Statement of Senator Blumenthal..................................    34
Statement of Senator Inhofe......................................    36
Statement of Senator Young.......................................    38
Statement of Senator Gardner.....................................    40
Statement of Senator Hassan......................................    42
Statement of Senator Klobuchar...................................    44
Statement of Senator Udall.......................................    46
Statement of Senator Duckworth...................................    48

                               Witnesses

Matthew K. Rose, Executive Chairman, BNSF Railway Company........     7
    Prepared statement...........................................     9
Dr. Christopher B. Lofgren, President and Chief Executive 
  Officer, Schneider National, Inc...............................    22
    Prepared statement...........................................    23
Tom Gurd, Vice President, Integrated Supply Chain, The Dow 
  Chemical Company...............................................    25
    Prepared statement...........................................    27
Wick Moorman, President and Chief Executive Officer, Amtrak......    28
    Prepared statement...........................................    30

                                Appendix

Response to written questions submitted to Matthew K. Rose by:
    Hon. Deb Fischer.............................................    55
    Hon. Maria Cantwell..........................................    58
    Hon. Maggie Hassan...........................................    61
Response to written questions submitted to Dr. Christopher B. 
  Lofgren by:
    Hon. Deb Fischer.............................................    62
    Hon. Richard Blumenthal......................................    64
    Hon. Maggie Hassan...........................................    64
Response to written questions submitted to Tom Gurd by:
    Hon. Deb Fischer.............................................    65
    Hon. Maggie Hassan...........................................    67
Response to written questions submitted to Wick Moorman by:
    Hon. Deb Fischer.............................................    68

 
                      MOVING AMERICA: STAKEHOLDER
          PERSPECTIVES ON OUR MULTIMODAL TRANSPORTATION SYSTEM

                              ----------                              


                      WEDNESDAY, FEBRUARY 15, 2017

                               U.S. Senate,
         Subcommittee on Surface Transportation and
            Merchant Marine Infrastructure, Safety and Security,   
        Committee on Commerce, Science, and Transportation,
                                                    Washington, DC.
    The Subcommittee met, pursuant to notice, at 2:31 p.m. in 
room SR-253, Russell Senate Office Building, Hon. Deb Fischer, 
Chairman of the Subcommittee, presiding.
    Present: Senators Fischer [presiding], Nelson, Cantwell, 
Klobuchar, Blumenthal, Booker, Udall, Peters, Duckworth, 
Hassan, Wicker, Blunt, Cruz, Inhofe, Moore Capito, Gardner, and 
Young.

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

    The Chairman. Good afternoon, everyone. And welcome to the 
Surface Transportation Subcommittee. I thank you for being here 
today for our first hearing of the 115th Congress.
    Today's hearing, entitled, ``Moving America: Stakeholder 
Perspectives on our Multimodal Transportation System,'' brings 
together an esteemed panel of transportation leaders.
    As many of you are aware, President Trump mentioned 
strengthening and renewing our Nation's transportation 
infrastructure in his inaugural address. I'm encouraged to see 
the President making transportation infrastructure a top 
priority.
    As Congress and this new administration seek to develop 
infrastructure solutions, my hope is that we address future 
infrastructure funding challenges. Like many of my colleagues, 
I am proud of the bipartisan work Congress did to enact the 
Fixing America's Surface Transportation, or the FAST Act.
    However, our work is not done. According to the latest 
projections by the Congressional Budget Office, the Highway 
Trust Fund will face a deficit of over $100 billion in the next 
5 years, following the expiration of the FAST Act. The Highway 
Trust Fund serves as a fair and equitable source of 
transportation funding for all states.
    To address this funding shortfall, I've introduced the 
Build USA Infrastructure Act, modeled on Nebraska's successful 
transportation funding efforts. This bill would divert a 
portion of the revenues collected by the Customs and Border 
Patrol on freight and passengers at ports of entry to cover the 
projected deficit. In addition, the bill would establish 
measures to offer states greater flexibility in initiating 
critical transportation infrastructure projects.
    Certainty in Federal highway funding and project 
flexibility for states should be key elements of any major 
infrastructure package. I also suggest that Congress build off 
of the successful freight programs established in the FAST Act. 
The multimodal freight program provides dedicated formula 
funding to states for critical urban and rural corridors.
    It's important that our work to make America's 
transportation system more reliable and efficient also 
addresses the challenging regulatory environment. In 2015, I 
authored the TRUCK Safety Reform Act. This bill reformed the 
controversial and obscure regulatory process at the Federal 
Motor Carrier Safety Administration, and it was included in the 
FAST Act. Because of this measure, the FMCSA now needs to 
conduct a more transparent, inclusive, and responsive 
regulatory process with stronger cost-benefit analysis.
    The FMCSA's ``entry level driver training'' negotiated 
rulemaking is a good example of stakeholders coming together 
with the agency to produce positive outcomes and increased 
safety.
    I hope to work closely with Transportation Secretary Elaine 
Chao, my colleagues here in Congress, and stakeholders to 
address similar regulatory process challenges across agencies 
at the DOT.
    For example, in the previous administration, the Federal 
Railroad Administration's electronic braking rule represented a 
multibillion dollar mandate without clear safety benefits. In 
fact, several railroads had tested and then abandoned these 
systems, a fact effectively disregarded by the FRA. This effort 
was followed by an ideological ``government knows best'' PR 
campaign that criticized operators opposed to the mandate.
    In reviewing this rulemaking, the Government Accountability 
Office found that, ``DOT's modeling lacked transparency as the 
information published may not be sufficient for a third party 
to replicate . . .''
    With new leadership at the FRA, we hope the agency will 
improve, but we cannot rely on that alone. Congress must act to 
improve the use of data, risk-based analysis, transparency, 
collaboration, and objective-based rules at the FRA.
    As we examine how the FRA conducts its regulatory process, 
we must consider the cumulative impact of regulations across 
the government on a freight rail industry that is projected to 
infuse $22 billion in private investment in our Nation's 
transportation system. We should all applaud this tremendous 
investment in our transportation network.
    Today, I look forward to hearing how Congress can work to 
strengthen our Nation's transportation infrastructure while 
enhancing safety, reliability, innovation, and efficiency 
across the entire network.
    I would now recognize the Ranking Member of the Commerce 
Committee, Senator Nelson, for any statement he wishes to make.
    Senator Booker. No, you go ahead.
    Senator Nelson. Well, I always want the Ranking Member of 
the Subcommittee to go first. So would you, please?
    Senator Booker. Sir, your wish is my command.
    The Chairman. Ranking Member Booker, great to have you.
    Senator Booker. Thank you. Thank you very much.

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

    Senator Booker. I actually first want to give some 
acknowledgement and gratitude to the Chairperson of this 
committee. One of the things I feel most excited about in my 
time as a Senator has been the partnership I've had with the 
Chairperson of this committee. We have found a good way to work 
together in a bipartisan fashion to actually move some very 
positive things forward. When I'm talking to friends of mine, I 
often describe this relationship as a bipartisan Batman and 
Robin, and I'll say here for the record just in case you have 
heard about that, I am Robin, you are Batman.
    [Laughter.]
    Senator Cruz. Nice tie.
    Senator Booker. Thank you very much. You should see the 
full gear.
    [Laughter.]
    Senator Booker. But I do want to say that I still believe 
even with the progress that we've made, we're at a point in our 
Nation where we're in a crisis, we are in an infrastructure 
crisis. The American Society of Civil Engineers ranks American 
infrastructure now at D-plus. Literally in a generation, my 
father's generation, we had the number one ranked 
infrastructure on the planet Earth, and now our infrastructure 
in this country is not even in the top 10.
    Nothing about our country, we are a phenomenal gift to 
humanity in so many ways, nothing about our country should be a 
D-plus. We should lead the globe in infrastructure, and that's 
in particular because having a great infrastructure is a 
critical ingredient to having a great economy.
    That's why I use the word ``crisis'' very purposefully, 
because the Chinese symbol--and the Chinese obviously spending 
5 percent of their GDP on their infrastructure, us spending 1 
percent or less--the Chinese symbol for a crisis is danger and 
opportunity. There is a tremendous opportunity here to help 
infuse our economy with strength, to put people back to work--
Americans back to work--to give industries a boost through Buy 
America provisions. All of these things give us an opportunity 
that is especially important now because the cost of capital is 
so low.
    For those of us who are concerned about debt-to-GDP ratio, 
we understand that every dollar invested in infrastructure 
growth actually grows our economy by two dollars, making that 
debt-to-GDP ratio even better.
    We are a nation that can and must do better, and there is 
bipartisan space for us to work together to get it done. One of 
the areas I'm obviously most concerned about is the Northeast 
corridor in which I live and reside and represent. One of the 
worst chokepoints in the Nation in terms of the value of this 
piece of real estate, the greater--I call it the greater Newark 
metropolitan area, but some people call it the greater New York 
metropolitan area, is one of the most economically productive 
regions on the planet Earth, it has one of the most inadequate 
infrastructures there are. The chokepoint that exists there is 
literally strangling our national economy, and that's one of 
the reasons why the Gateway Project has been so important to 
me, and I value my partnerships again with Republican 
colleagues like the Ranking Member, like Senator Roger Wicker.
    I would be remiss if I don't speak finally, Chairwoman, 
about one very important thing, which is just this idea of 
safety. It doesn't have to be an either/or. We can find ways to 
control regulations. I've actually learned a lot from Senator 
Fischer's approach, but we can also do things to emphasize the 
safety and security of our highways, of our airways, and more. 
And we should have that balance.
    Right now, we're seeing a startling increase of traffic 
fatalities on our highways specifically involving large trucks. 
That does not have to be the case. We can and must do better to 
elevate human life.
    So I'm excited about this Congress. I'm excited about under 
the leadership of my Chairman that we've put forth, Democrats 
put forth, a trillion dollar proposal for improving our 
infrastructure. I think it's a solid proposal, it's a fiscally 
wise proposal, and those investments will help to really make 
our economy boom, but not just for today, for tomorrow.
    Remember, we got an inheritance from our grandparents, the 
best infrastructure on the globe, we've now trashed that 
inheritance. It's time for our generation to step up and do the 
right thing, make the investments so that our children and 
grandchildren can again be number one on the planet Earth, not 
just for the quality of our infrastructure, but because that 
infrastructure ensures we will continue to be the dominant 
economy and innovators on the globe for the future.
    Thank you very much, Chairman.
    The Chairman. Thank you, Senator Booker.
    And now I would like to recognize the Ranking Member of the 
Full Committee, Senator Nelson.

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

    Senator Nelson. Thank you. I want to point out Senator 
Peters and Senator Cantwell, along with the Ranking Member of 
this subcommittee, we really got some terrific Members assigned 
on this side, Amy Klobuchar, Richard Blumenthal, Tom Udall, 
Tammy Baldwin, Tammy Duckworth, and Maggie Hassan. So you can 
see this subcommittee has a lot of interest.
    Now, for example, you need a tunnel. There is a chokepoint. 
There are one or two tunnels there between New Jersey and New 
York. Right here, coming across the Potomac River from the 
south there's a chokepoint. We've got to shore these up.
    Dr. Lofgren is concerned with the roads and bridges. There 
are 56,000 structurally deficient bridges in this country. In 
Florida alone, there are 200 that are determined by the Florida 
Department of Transportation as structurally deficient. And, of 
course, we remember the very tragedy that we saw in Minneapolis 
with the collapse of an interstate bridge.
    I can go on and on, whether it's the bottleneck at our 
ports or the congestion on our roads, this aging infrastructure 
goes on and on. Now, there is going to be a lot of consensus 
around here for spending on infrastructure, but then you're 
going to get to the question, How are you going to pay for it?
    All of your industries--and I assume, Mr. Gurd, you are one 
of the shippers, so you've got the freight railroad, you've got 
the passenger railroad, you've got the trucks right here at the 
table. Tell us what we need to know so that we can light a fire 
under these folks that keep sticking their heads in the sand to 
not fix this national security issue of a tunnel going into New 
York, et cetera, et cetera.
    Thank you, Madam Chairman.
    The Chairman. Thank you, Senator Nelson.
    At this time, I would like to recognize Senator Cruz, from 
Texas, who will be introducing the BNSF Executive Chairman.
    Senator Cruz.

                  STATEMENT OF HON. TED CRUZ, 
                    U.S. SENATOR FROM TEXAS

    Senator Cruz. Thank you, Madam Chairman and Ranking Member 
Booker, for holding this important hearing. And it's a 
privilege to join you this afternoon and have the opportunity 
to introduce my fellow Texan, Matt Rose, who's the Executive 
Chairman of the Burlington Northern and Santa Fe Railway 
Company, otherwise known as BNSF.
    As many of you know, Matt has a long history working within 
the rail industry, which includes having served 13 years as 
Chief Executive Officer and 11 years as Chairman of BNSF. In 
this role, Matt has led one of North America's leading freight 
transportation companies, which has a rail network of 32,500 
route miles in 28 states and three Canadian provinces--you've 
always got to be careful traveling to Canada--and which 
transports millions of shipments each year, thanks to the 
dedication and commitment of 41,000 employees.
    As all of you know, this is no easy task. Over the past few 
years, the rail industry has experienced declines in 
commodities such as coal and crude oil moving across rail 
networks, has faced challenges from environmental advocacy 
groups opposing the construction of facilities, and must still 
ultimately operate within one of the most regulated industries 
in the United States.
    In addition to his leadership at BNSF, Matt and his wife, 
Lisa, are very active within the Fort Worth community in Texas, 
where they started Gatehouse, a supportive living community 
where women and their children in crisis can discover a new 
path for permanent change.
    Matt also dedicates his time to Read Fort Worth, a 
coalition of businesses, civic, education, philanthropic, 
nonprofit, and volunteer leaders working to ensure that 100 
percent of Fort Worth third graders are reading on grade level 
by 2025.
    In short, Matt brings a wealth of knowledge about the rail 
industry as well as the communities in which they serve. I look 
forward to his testimony before this subcommittee this 
afternoon as we explore both the challenges and the 
opportunities facing the rail industry, as well as the steps 
that this subcommittee can take to help ensure American 
competitiveness today and beyond, for our nation's 
transportation sector.
    The Chairman. Thank you, Senator Cruz.
    And now I would like to recognize Senator Peters, who will 
introduce Dow Chemical's Tom Gurd.

                STATEMENT OF HON. GARY PETERS, 
                   U.S. SENATOR FROM MICHIGAN

    Senator Peters. Well, thank you, Chairman Fischer and 
Ranking Member Booker, for having this very important hearing.
    And I would like to introduce Mr. Tom Gurd to the 
Subcommittee today, another fellow Michigander.
    Mr. Gurd is the Vice President of Integrated Supply Chain 
for the Dow Chemical Company and is also a member of the 
American Chemistry Council. And I am pleased that he has taken 
the time to be with us to share his thoughts on how we can 
develop policies that foster growth in the manufacturing sector 
and grow our economy.
    Our state of Michigan, which we're very proud to live in, 
has a long history of being a leader in scientific and 
engineering advancements, and Dow Chemical Company is certainly 
an excellent example of my state's talented and innovative 
companies in today's global workforce.
    Founded and headquartered in Midland, Michigan, Dow has 
grown to be one of the world's largest chemical companies, in 
part, due to its commitment to continually pushing scientific 
boundaries of plastics, chemicals, and agricultural products. 
These products reach consumers across the United States and in 
nearly 160 countries around the world, and they reach those 
locations by efficiently using our multimodal transportation 
system.
    Companies like Dow depend on a well-maintained, safe, and 
efficient transportation system to move their goods to market. 
However, our transportation infrastructure is falling behind 
the rest of the developed world. I believe that we have to 
invest in 21st century infrastructure that focuses on new and 
emerging technologies, which is one reason why I'm a huge 
proponent of connected and automated vehicles, which will 
revolutionize the way that we move people and goods in the next 
10 to 20 years.
    But I'm honored to have had the opportunity to work with 
Tom in Dow Chemical on a range of critical policy issues, and I 
believe that Tom's understanding of our nation's transportation 
needs will be of great benefit to this Subcommittee and to the 
Committee as a whole.
    Thank you for being with us.
    The Chairman. Thank you, Senator Peters.
    And it's my pleasure to introduce Dr. Christopher Lofgren, 
who has been the Chief Executive Officer and President of 
Schneider National, Incorporated, since August 2, 2002. Dr. 
Lofgren served as the Chief Operating Officer of Schneider from 
2000 to 2002, and served as its Chief Information Officer and 
Chief Technology Officer.
    He holds a Bachelor's degree--a Bachelor of Science and 
Master of Science degrees in industrial and management 
engineering from Montana State University, and a Ph.D. in 
industrial and system engineering from the Georgia Institute of 
Technology.
    We are also joined today by Wick Moorman. Welcome. The 
Amtrak Board of Directors appointed Charles W. ``Wick'' Moorman 
IV, President and Chief Executive Officer effective September 
1, 2016. Mr. Moorman is the tenth executive to lead America's 
railroads since the company began operations in 1971. Prior to 
coming to Amtrak, Mr. Moorman spent approximately 4 decades at 
Norfolk Southern Corporation and its predecessor, Southern 
Railway. He retired as Chairman and CEO of NS in 2015.
    Mr. Moorman earned a Bachelor of Science in Civil 
Engineering from the Georgia Institute of Technology in 1975 
and a Master's of Business Administration at Harvard 
University.
    So welcome to all of you gentlemen. We will now begin with 
your opening statements. And I would ask Mr. Rose if you would 
please begin with yours. Thank you.

STATEMENT OF MATTHEW K. ROSE, EXECUTIVE CHAIRMAN, BNSF RAILWAY 
                            COMPANY

    Mr. Rose. Thank you, Senator Fischer, Senator Booker, 
members of the Subcommittee, for inviting me here to appear 
before you today on our perspective as a stakeholder in the 
U.S. supply chain.
    I would like to start by thanking the Committee for its 
good work last Congress on a number of matters important to the 
rail industry.
    The U.S. supply chain is changing under our feet. The rail 
industry is going through a transition driven by shifts in the 
energy landscape, our customers' ever-changing supply chain, 
our competitors, and, yes, public policy, such as how our 
Nation's highway infrastructure is funded and whether railroads 
will be constrained from innovating.
    Rail volume in recent periods are lagging the already 
lethargic U.S. manufacturing and economic growth. Over the past 
5 years, GDP has grown about 2 percent in our United States, 
while rail volumes have declined actually by two-tenths of 1 
percent.
    So the big game changer for the industry is the loss of the 
coal business. The cumulative impact of environmental policies, 
the price of natural gas, and the incentives provided to 
renewables has resulted in about a 50 percent decline in coal's 
historic volumes. Weak consumer demand and changing consumer 
habits has also impacted our international intermodal markets. 
There is softness in other segments as well.
    We do believe that 2017 will be a better year, but we still 
will not reach historic peak volumes. We're hopeful that 
Congress will enact policies that help stimulate the economy, 
like corporate tax reform, sensible regulatory reforms, coupled 
with growth-oriented trade policies.
    We will also be focused on the rail industries national 
labor negotiations, which we are now in the final stages. A 
work stoppage would negatively impact rail volumes and the 
entire U.S. economy.
    For railroads in 2017 and beyond to remain competitive will 
require a level playing field across competing freight 
transportation modes. For our part, we will continue to focus 
on cost control in all areas of the operation and make 
significant investments in our track, equipment, and new 
technologies consistent with this evolving business 
environment.
    My written testimony discusses the many operating practices 
in technologies and use being developed which promote necessary 
efficiencies and also increase safety. By all measures, recent 
years have been the safest in rail history. In 2016, reportable 
train accidents on BNSF were at historic lows, down more than 
16 percent when compared to 2015. This reflects the increased 
leverage of data from our expansive trackside detector network 
and other technologies as well as the effectiveness of our 
annual maintenance and ongoing employee training and rules 
compliance program.
    BNSF's ability to earn adequate returns becoming 
increasingly more efficient supports these continuous safety 
improvements and our efforts to consistently meet our customer 
service needs and their expectations.
    BNSF's risk management goes beyond compliance with 
government regulations. We're already transitioning to the next 
level of safety through technology-driven data integration 
provides a comprehensive view into how various conditions on 
the railroad interact with each other, identifying issues well 
before problems can occur. We think regulations should 
incentivize these efforts in contrast to which some which we 
believe currently discourage it.
    Over the last 130 years, unique legal and regulatory 
schemes have developed that govern nearly every facet of the 
rail industry. I believe I can affirm that the railroads are 
one of the most ``command and control'' regulated industries in 
the United States. We believe that regulation can be improved 
to take into account a railroad safety record and the 
successful risk management activities. Neither the Congress nor 
the FRA has taken a comprehensive look at the cumulative impact 
and the effectiveness of the totality of railroad regulation.
    My written testimony details recommended steps for 
improving the regulatory process. They include improving 
procedures for granting waivers, ensuring rules provide 
benefits that outweigh their costs, and avoiding or removing 
potential redundancies.
    Congress should also direct the FRA to account for the rail 
industry's exceptional safety record, which would support 
movement toward a more balanced, collaborative, and transparent 
approach to performance-based regulatory policies.
    Turning to surface transportation policy, we support 
additional investments in highways. We know it's necessary. The 
General Fund's transfers to the Highway Trust Fund, now 
totaling some $140 billion since 2008, is not a sustainable 
model for the future, and unfairly tilts the playing field 
against privately funded freight railroads. Congress must find 
a new way to at least increase the commercial user's 
contribution to the infrastructure that they use through 
increased fuel taxes, a weight/distance fee, or similar proxy. 
This isn't something that must happen eventually; it's time to 
look at it now. The trucking industry, to its credit, also 
recognizes this.
    In closing, whether the issue is highway funding, truck 
weights, regulatory policy, or taxes, I would ask policymakers 
to carefully consider freight rail's public benefits, including 
environmental, supply chain efficiencies, and reduced highway 
congestion, and maintenance costs.
    Whatever policy you enact, will it result in more or less 
freight on the privately funded freight railroads? That's the 
important question. And more is better for us and the country.
    Thank you very much.
    [The prepared statement of Mr. Rose follows:]

      Prepared Statement of Matthew K. Rose, Executive Chairman, 
                          BNSF Railway Company
Introduction
    Thank you Senator Fischer, Senator Booker and Members of the 
Subcommittee for the opportunity to submit testimony and appear before 
the Subcommittee to provide our perspective as a stakeholder in the 
U.S. supply chain. It is a privilege to discuss with you the challenges 
and opportunities that may affect our outlook. As we look at 2017, we 
see a time of change and uncertainty. As a railroad, understanding the 
future is critical; we make long-term decisions and it is crucial to 
match our capacity--manpower, track, equipment and facilities--with 
demand. If we have too little capacity, then we can suffer service 
issues, like those in 2013-2014, with which the Committee is familiar. 
If we overestimate and have too many assets, our ability to continue to 
make strong investments could be jeopardized, which also negatively 
impacts our customers, and the economy.
    The U.S. supply chain is changing under our feet. The rail industry 
is going through a transition that is the largest we have seen in the 
twenty years that I have been in leadership at BNSF. It is being driven 
by shifts in the energy landscape, our customers' ever-changing supply 
chains, our competitors and, yes, public policy, such as how our 
Nation's highway infrastructure is funded, and how railroads will be 
permitted to innovate. The railroad industry must become more efficient 
in order to remain competitive, and since we pay for our own 
infrastructure, we need a level playing field as we compete with other 
modes for freight. We ask that policymakers consider the public 
benefits that freight rail transportation provides--energy and 
environmental benefits, supply chain efficiencies, reduced highway 
congestion and maintenance costs--and how they are affected by public 
policy.
    At the outset, I would like to commend this Committee on enactment 
of an extraordinary amount of good legislation related to railroads in 
the last Congress, including an extension of the Positive Train Control 
(PTC) implementation deadline, passing a range of railroad-related 
provisions in the Fixing America's Surface Transportation (FAST) Act, 
as well as reauthorizing the Surface Transportation Board (STB) for the 
first time since 1995. In this Congress, we look forward to working 
closely with the Committee on a proactive agenda that provides for 
updating and improving regulation and ensures that infrastructure 
investment and policy treats railroads equitably. BNSF and the freight 
rail industry hope to be a resource to the Committee as it addresses 
these important issues.
Economic Update and Outlook
    Over the past five years, GDP has produced more than two percent 
growth, while rail volumes have declined by two-tenths of a percent due 
to a change in consumer buying habits, the service sector attracting a 
larger portion of GDP, and the decline in the coal sector. BNSF moved 
more than 9.7 million units in 2016, half a million fewer units than in 
2015, representing five percent decline in our total business. We 
experienced declines in three important commodities that are at the 
core of the railroad's business-energy, namely coal and crude oil, and 
international intermodal containers.
    In 2016, BNSF handled about 480,000 fewer units of coal than in 
2015, and finished the year with our lowest coal volumes since the 
Powder River Basin (PRB) mine expansion in 2002-2003. Our utility 
customers are in the midst of a long-term transition of their 
generation assets, moving away from coal and toward natural gas and 
renewables due to the low price and abundant supply of natural gas, 
regulatory pressures on coal, and tax policies that incentivize 
renewables.



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    The U.S. freight rail industry as a whole has experienced a similar 
trend related to coal. In 2008, the peak year for U.S. rail coal 
traffic, Class I railroads originated 7.5 million carloads of coal. In 
2016, coal carloads totaled just 4.1 million carloads, or 3.4 million 
fewer carloads than in 2008. The revenues and profits lost by railroads 
because of coal's decline will be extremely difficult to replace. Many 
of railroads' coal assets have or will become ``stranded,'' meaning 
their revenue-generating potential is lost or greatly reduced even 
though the costs of most of these assets will remain on railroads' 
balance sheets for years to come. The loss of railroads' coal traffic 
combined with the market volatility of other commodities hauled by 
railroads means that the market outlook for railroads has become 
inherently less stable. Typically, coal provided a base revenue load 
for many rail lines that helped keep costs down for other lines of 
traffic. For many rail lines, that base is gone.
    BNSF's crude oil volumes declined with domestic U.S. oil production 
due to the long-term drop in the world price of oil and increased 
pipeline competition. In 2016, we handled almost 130,000 fewer units of 
crude than in 2015, which is a decline of about 40 percent.
    International intermodal volumes from west coast ports on BNSF were 
down by more than 60,000 units in 2016 as compared to 2015, and will 
continue to face headwinds, as volumes have been flat or down the past 
several years. Domestic intermodal continues to grow, but at a slower 
pace than we would like. Trucks are our customers and our competition. 
They have benefited from consistently low fuel prices and truck over-
capacity which contributes to flat near-term forecasts for railroad 
domestic intermodal.


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    BNSF's primary area of growth was in the agricultural sector. The 
U.S. had record corn and soybean volumes in 2016 due to several 
factors, including strong harvests, but also due to Asian buyers 
purchasing more U.S. corn when Brazilian supplies were reduced by 
summer droughts. This, in tandem with a stronger Brazilian currency, 
helped enhance U.S. corn and soybean export sales and also contributed 
to all-time record volumes and shuttle sales on BNSF in the fall. 
However, agriculture represents just ten percent of our annual volumes.
    In general, rail volumes have been linked to the performance of the 
broader economy; when the economy is suffering, most rail traffic 
categories suffer too. However, it is less true now that when the 
economy does well, most segments of rail traffic do better. Rail 
volumes for commodities like grain and energy products often vary 
significantly year-to-year for reasons that have little to do with the 
state of the economy (e.g., the price of natural gas can have a big 
effect on coal volumes; droughts, exchange rates and worldwide weather 
patterns can affect grain volumes).






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    Consumers are changing their buying patterns. In recent years, 
changes in consumer spending have also reduced rail volumes as a larger 
percent of GDP moves to technology, like smart phones, and to services 
and entertainment. Consumer staples, such as clothing and household 
goods, appear to be moving down on the list of consumer spending, 
resulting in fewer containers of imported goods destined to the big box 
retailers. There will likely always be growth in freight volumes 
associated with consumer goods spending related to population growth, 
but the future may bring less of it than in previous cycles, and 
railroads must compete hard for every load. This means that the rail 
industry must continue to become ever more efficient.
    At BNSF, and throughout the industry, our focus has been on 
reducing variable costs wherever possible, including shrinking the size 
of our active equipment and locomotive fleets to match volumes. Given 
the drop in volumes and the resulting financial impact, we also need to 
address fixed costs and ensure our workforce is sized to our needs. 
Unfortunately, non-seasonal furloughs of scheduled employees peaked at 
about 5,000 early in 2016; these numbers dropped to about 2,700 by the 
end of the year. In 2016, we also reduced salaried headcount by about 
nine percent and significantly restructured our operating teams. As we 
continue into 2017, our attention to cost control and efficiency across 
our operations will continue to be intense. We need to be able to 
continue to provide excellent service and invest where demand does 
exist. BNSF's infrastructure maintenance and investment remains strong 
relative to volumes and market demand and I believe our network has 
never been in better overall condition.
    BNSF's business model is predicated on a ``virtuous cycle,'' where 
we actively grow our markets and volumes, which allows us to continue 
to invest in and expand our system, improve our service, and continue 
to grow. We believe 2017 will be a better year but we will not grow 
past peak volume levels. Volumes have the potential to grow if policy 
changes stimulate the economy through corporate tax reform and 
infrastructure investment, as long as other policies like trade--which 
impact roughly one-third of our economy's GDP--are still growth-
oriented. Additionally, the rail industry is in final stages of labor 
negotiations. If a related work stoppage occurred, rail volumes would 
be impacted.
    In sum, for railroads in 2017 and beyond, remaining competitive 
will require stringent attention to cost control in all areas of 
operation and continued significant levels of rail investment in 
infrastructure, equipment, and new technologies, consistent with the 
evolving business environment. Many of the operating practices and 
technologies being developed and used promote necessary efficiencies 
and increase safety.
Safety Overview
    The laws of physics that make railroads the most efficient mode of 
surface transportation are also unforgiving; however railroading has 
been made incredibly safe. The industry's most recent safety statistics 
demonstrate the trend of continuous safety improvement. Preliminary 
Federal Railroad Administration (FRA) data indicates that the train 
accident rate in 2016 was down 80 percent from 1980 and down 45 percent 
from 2000; the employee injury rate in 2016 was down 84 percent from 
1980 and down 49 percent from 2000; and the grade crossing collision 
rate in 2016 was down 80 percent from 1980 and down 40 percent from 
2000. By all of these measures, recent years have been the safest in 
rail history.



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    At BNSF our safety vision is a workplace free of injuries and 
incidents. We believe that we can achieve this goal, and that is the 
reason safety continuously improves. But we have not yet achieved our 
vision; incidents and accidents do occur. However, we believe that they 
are outliers; operating safely every day is our normative behavior. We 
are committed to the work of continuous safety improvement, because 
derailments and other significant safety failures, which pose risks to 
employees and communities, are not an acceptable cost of doing 
business, nor are they morally acceptable.




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    In the freight rail industry, safe operations supported by the 
industry's continuous safety improvements are not achieved through just 
compliance with FRA regulations. It requires a comprehensive risk based 
safety program, many elements of which go well beyond Federal mandates. 
And perhaps most importantly, it requires earning adequate revenues for 
the significant reinvestment necessary to safely operate the freight 
rail network and serve customers.
Railroad Technology and Operational Innovation
    Technology has been an essential element of the improvements in 
safety seen by the rail industry over the last decade. In 2015, BNSF 
testified before the Subcommittee about the technologies being applied 
to railroad operations that allow us to detect safety standard 
deviations in real time so that we can respond before something 
happens. BNSF has increased the pace with which we install and utilize 
technologies, helping to transform the railroad's efficiency, while 
making it smarter and safer.
    In 2016, reportable train incidents on BNSF were at historic lows, 
down 16.6 percent year-over-year, which reflects the increased leverage 
of data from our detector network to resolve issues before they become 
problems, as well as the effectiveness of our annual maintenance and 
on-going employee training and rules compliance programs. Derailments 
caused by human error, a significant subset of these incidents, also 
declined on BNSF in 2016. Below is a review of the technologies being 
implemented and developed on BNSF.

   Track Inspection:

     Track geometry inspections employ high-speed laser and 
            inertia test systems to collect track condition data on 
            main line routes, a minimum of three times per year. Track 
            geometry cars measure the track's surface under load for 
            gauge, cross-level, alignment and vertical acceleration; 
            data indicating any detected flaws is communicated to BNSF 
            personnel for remediation.

     BNSF utilizes a fleet of manned and unmanned track 
            geometry cars, track measurement trucks and strength 
            testing and reporting (STAR) cars to test several geometric 
            parameters of the track.

     Rail defect detection systems utilize ultrasonic 
            technology to detect internal flaws in rail. Minimum 
            intervals between inspections are determined by tonnage 
            moved; heaviest traffic routes are inspected every 18 days.

   Mechanical Wayside Detectors:

     Wheel temperature detectors, using infrared 
            technology, are used to identify braking issues. BNSF 
            currently has approximately 260 detectors located at over 
            190 sites along our network.

     Acoustic and Hot Bearing Detectors are used to 
            identify wheel bearing fatigue. On BNSF, there are over 
            1,200 hot bearing detectors and 16 permanent and 3 portable 
            acoustic bearing detectors.

     Machine Vision systems inspect freight cars for 
            defects in passing trains at track speed with over ten 
            different technologies used through 64 detectors on BNSF's 
            network.

   BNSF is using Unmanned Aircraft Systems (UAS)--or drones--
        for supplemental visual track and bridge inspections in a 
        variety of conditions. As part of the Federal Aviation 
        Administration's (FAA) Pathfinder Program, we are a partner to 
        the agency on developing rules, procedures and technology for 
        extended range (beyond visual line of sight) track integrity 
        flights. Since 2015, BNSF has expanded the use of both short 
        range and long range aircraft as well as computer vision and 
        data analytics to provide our engineering staff with bridge and 
        structure change detections, track integrity analysis and yard 
        measurement capability. In 2017, BNSF's UAS team (in 
        partnership with the FAA), will continue to expand our areas of 
        long range flight research and enhancement of detection 
        capabilities to include non-visual conditions.

   Train Operations and Control

     As you know, the industry is engaged in installing 
            PTC. BNSF will have the physical installation completed by 
            2017 and it will be operational by the 2018 deadline. We 
            are currently operating PTC on 47 of the 90 mandated 
            subdivisions and have already run PTC on over 200,000 trips 
            and have trained over 22,000 employees.

     BNSF is the largest user of energy management systems 
            (Trip Optimizer or TO) with over 3,300 locomotives 
            equipped. TO serves as an automated train operations 
            control which was designed to reduce fuel use, and our 
            carbon footprint, by requiring the most fuel-efficient 
            operation of the locomotive. It also considerably reduces 
            the potential for operating rules violations, particularly 
            in a non-PTC environment.

     Movement Planner (MP) is a tool in development that 
            plans train operations and optimizes use of the network's 
            capacity. Current computer aided dispatching is being 
            augmented with a system to auto-route a train's most 
            efficient movement, coordinate movements along a corridor, 
            and provide for better human dispatch management. PTC will 
            overlay MP, so that it can utilize real time location 
            information. Ultimately, the integration of PTC, MP, and 
            other planning tools will increase efficiency and 
            visibility into train operations by operations and 
            maintenance personnel.

    These innovations demonstrate our commitment to leveraging 
technology in the continuous pursuit of more safe and efficient 
operations for our employees and the communities we serve.
Railroad Regulation Review and Improvement
    It is well known to this Committee that, as one of the country's 
oldest industries, nearly every facet of the rail industry is governed 
by unique legal and regulatory schemes that have been developed over 
the last 130 years. Freight railroads' business interactions are 
governed by the Interstate Commerce Act. Our employees receive Railroad 
Retirement benefits instead of Social Security. Labor negotiations with 
unions representing our employees are governed by the Railway Labor 
Act. Railroads do not have insurance-based Workman's Compensation; 
instead, we operate under a nearly 110 year old statute called the 
Federal Employee Liability Act (FELA), established long before 
Workman's Compensation. FELA is a tort-based system that requires 
employees to litigate injury claims against railroads under a 
comparative fault system. Railroad operations are governed by the 
Federal Rail Safety Act and more than a century of design-based 
regulation where safety compliance can only be achieved by executing 
mandated step-by-step processes or activities against which regulators 
inspect and enforce.
    There are very few exceptions to this ``command and control'' 
regulatory paradigm. Therefore, railroads are one of the most regulated 
industrial activities in the U.S. Between 2008 and 2013, Congress 
mandated 49 percent of all prescriptive, economically significant 
regulations that were promulgated by regulatory agencies. These 
mandates have been a product of Congressional action--and in recent 
years are a common ``reaction'' to an incident.
    I attach to my testimony a 1982 Chicago Tribune article that 
demonstrates the process of regulatory change. It is about how the 
Class 1A 500 mile brake inspection standard, which was based on old 
steam engine stops was finally updated to a 1,000 mile brake 
inspection. It highlights for the Committee that the process for 
updating standards may have marginally changed, but not fundamentally. 
In 2017, notwithstanding the tremendous advances in locomotive, brake 
and detection technology, railroads have been unsuccessful in updating 
the brake inspection standard originally based on steam engine 
technology, which was last changed more than thirty years ago through 
negotiation with labor unions.
    There are a multitude of internal and external incentives for 
railroads to operate safely, in addition to regulation, which is why 
railroads have well-developed risk management plans. As the railroad 
industry develops new technologies, they are overlaid upon railroads' 
existing regulatory compliance activities. We find that these 
activities in some cases no longer fit an operating environment 
increasingly supported by technology. At BNSF, our maintenance 
standards meet and even exceed FRA regulations. For example, BNSF 
inspects our densest lines both visually and technically at a rate at 
least twice the FRA requirement, in many ways rendering the 
prescriptive inspection activity requirements moot.
    Advances in locomotives, signal systems, grade-crossing warning 
devices, and track inspection made possible by technology in some ways 
are marginalized for purposes of regulatory compliance because they 
exist outside of the current regulatory construct, which recognizes 
only the safety value of prescribed practices. Existing regulations 
which prescribe physical inspection at specific intervals for equipment 
and facilities now make less sense because of the advances in 
equipment, which is itself continuously self-diagnostic and self-
reporting in the event of defects. Technology-based inspection can also 
reduce the safety exposures related to frequently putting people in, 
under and between equipment or out on the line of road to perform 
physical inspections for the same conditions. Technology-driven 
operational advancements, like electronic delivery of mandatory train 
orders and directives in lieu of required paper versions which will 
enable other technologies, should be incentivized.
    Granting waivers is a measured approach to bridging past with 
present and help make regulatory evolution possible. The FRA's waiver 
authority is appropriately very broad. The regulations provide that, 
``the Secretary may waive compliance with any part of a regulation 
prescribed or order issued under this chapter if the waiver is in the 
public interest and consistent with railroad safety.'' Waivers 
represent industry and the regulator's best opportunity to modify FRA 
regulatory directives in light of changed circumstances, with 
appropriate regulatory oversight. However, implementation of the 
existing waiver process has been difficult and the timelines for even 
the simplest of waivers are measured in months or years, and quite 
often come with conditions that sub-optimize the value of the waiver or 
innovation being sought.
    Waivers are important to allow the industry to demonstrate new 
technologies and practices that might--or might not--work to enhance 
safety. As the regulatory mandate to implement electronically 
controlled pneumatic (ECP) brake mandate demonstrates, some 
technologies are determined by the industry after demonstration to 
simply not be ready for prime time or could be disruptive if integrated 
into operations. Mandating a demonstrated technology after it has been 
shown to not be suitable for implementation will chill this kind of 
important experimentation. Nonetheless, waivers help create common 
understanding between the regulator and the regulated about railroad 
operations, and waiver-generated data can lay the predicate for 
updating regulations.
    New rules should only be adopted when the rule's benefits clearly 
outweigh its costs. The cost-benefit analysis process for imposing 
costly new mandates will rarely work when the industry is already so 
safe. Regulators recently have resorted to tortured cost-benefit 
calculations to justify proposed mandates. One of the most glaring 
examples, which required legislation by this Committee, was the recent 
ECP brake mandate where the FRA averaged the cost-benefit analysis 
across the tank car safety rule to justify mandating ECP brakes.
    Neither Congress nor the FRA has taken a comprehensive look at the 
cumulative impact and effectiveness of the body of railroad 
regulations, or how they can be changed to reflect the current state of 
operations practices and ensure that they incentivize technology, or at 
least do not discourage it. We believe that regulation can be improved 
to take into account a railroad's safety record and their successful 
risk management activities.
    Regulatory requirements for prescriptive activities is not the best 
way to improve safety if measuring safety outcomes can provide better 
incentives and flexibility. We believe that PTC is one of the best 
examples of how a technology mandate could have been more performance-
based, which we believe could have achieved better safety outcomes 
sooner. As you may recall, the PTC regulations as originally adopted by 
the FRA had a cost of approximately $20 for every dollar of benefit. 
Had Congress and the FRA required performance standards for the types 
of incidents prevented by PTC, then railroads could have identified and 
implemented the best way to achieve those goals. This would have 
included PTC; in 2008, BNSF was in the process of implementing a 
version of PTC called Electronic Train Management System (ETMS). But 
given more flexibility to develop it, it could have been implemented in 
a more efficient and cost effective manner, possibly in tandem with 
some of the recent operationally beneficial technologies outlined, 
above.
    Going forward, Congress needs to create a process that directs the 
FRA to, in more cases, embrace collaboration and transparency toward 
identifying the optimal performance targets and more formally aligning 
regulator and the regulated entities around incentives for continuous 
safety improvement. We believe that currently deployed and in-
development safety and detector technologies combined with advanced 
data analytics has allowed us to achieve a level of safety that makes 
regulatory development and oversight of performance standards 
supportable.
    There is a pending risk reduction regulation (FRA-2009-0038), 
required by Congress in the Rail Safety Improvement Act of 2008 which 
may have been, in fact, an effort by Congress to move the FRA towards a 
more performance-based regulatory paradigm. However, when the 
Congressional directive became a proposed rule by the FRA, the rule 
moved in the direction of imposing extensive reporting requirements, 
mandating risk reduction activities and applying regulation to 
technology innovations to prescribe design and maintenance 
requirements--all layered on top of existing mandates, and not in lieu 
of them. In the FRA's approach to implementation of this rule, 
railroads see detailed requirements for reporting their risk management 
plans, accompanied by related ``paperwork violation'' enforcement 
opportunities without the tradeoff of performance based regulation. 
Furthermore, any requirement for detailed safety evaluation and risk 
management disclosures must be closely accompanied by information 
protections which railroads believe must be improved in this rule. If 
required railroad operational review and mitigation data is not 
protected, then the ``lottery''-like recoveries we increasingly see in 
courts will impede innovation and even possibly challenge compliance.
    Railroads, and the public for that matter, need forward-thinking 
Federal railroad safety regulators and appropriate regulations. In a 
technologically and operationally complex and increasingly data-driven 
railroad industry, the existing ``inspect and enforce'' paradigm may 
not allow regulators to best understand the evolving technology-based 
railroad operating environment. Regulatory ``reform'' does not happen 
overnight, and it is especially hard when there are more than 100 years 
of how ``it has always been done.'' But there is payoff, as well as a 
role, for all stakeholders involved in achieving near-, mid- and long-
term goals for the Administration, Congress and the industry. A 
framework for that is outlined below.
Near-Term Goal--Improve the Waiver Process

   The Secretary of Transportation and FRA Administrator should 
        review existing waivers, streamlining them as appropriate, and 
        making some permanent in order to provide certainty to the 
        industry and stakeholders. Typically waivers are granted for no 
        longer than five years.

   Expeditiously consider and act on pending waivers, 
        especially those that promote innovation, demonstrate 
        technology or proof of concept, or allow operating practices 
        that are more efficient and consistent with railroad safety, 
        and promptly grant them when appropriate.

   The FRA should reform the process for granting new waivers 
        with a focus on efficiency, prioritizing technology and 
        collaboration.

     Shorten the waiver review period to six months; the 
            current process requires that waiver requests be presented 
            to the FRA Safety Board which in turn has up to nine months 
            to act on the request;

     Conduct an ongoing evaluation of waivers to determine 
            whether and how they become permanent rule changes 
            consistent with their grant;

     Include a railroad/industry representative on the FRA 
            Safety Board, even as a non-voting member;

     Prioritize waivers that provide technology 
            demonstration;

     Ensure that waivers are not conditioned with 
            unreasonable or unrelated operating restrictions; and

     Ensure that waiver reporting requirements are 
            reasonable and related to helping achieve performance based 
            regulatory treatment.

    With process improvements, the FRA and railroads would be able to 
more quickly address and implement waiver applications, especially 
those demonstrating innovation and technology.
Mid-Term Objective--Regulatory Rationalization and Administrative 
        Procedures Act Reform
    Although prescriptive, activity-based regulation is likely to 
continue in certain areas, the rail industry's extraordinary safety 
record should allow for movement toward a balanced approach that also 
includes performance based regulation, with the goal of achieving 
greater safety and operational benefits. As Congress reviews how 
railroads are regulated and considers needed improvements, the 
following guidelines should be kept in mind:

   Regulations should be based on a demonstrated need, as 
        reflected in current and complete data and sound science. They 
        should have a well-defined and measurable objective, and be 
        regularly evaluated as to their effectiveness in achieving it.

   All components of an agency's decision-making should be 
        transparent to the public and subject to meaningful analysis 
        and comment before the rule is finalized.

   Non-prescriptive regulatory tools, like performance-based 
        regulations, should be deployed wherever possible to align the 
        interests of the regulator and the industry, and to foster and 
        facilitate innovation to achieve well-defined policy goals.

   Regulations should provide benefits outweighing their costs, 
        and the potential redundancies and general interplay with other 
        existing regulations should be considered in every rulemaking.

   Use of ``guidance'' should be limited to appropriate 
        situations and time periods.

    While these comments are focused on the FRA, many of these 
principles can and should be adopted by all agencies with railroad 
oversight, like the STB.
Long-Term Objective--FRA Implementation of Performance Standards for 
        Compliant Railroads
    After creating a statutory framework that allows the FRA to develop 
performance based regulations, Congress should oversee FRA's progress 
in achieving it. The FRA should be empowered to set up a standard for 
identifying precursors to accidents. Specifically, the FRA could 
develop a targeted standard that is as safe, or safer, than current 
operations, and apply a different level of mandated requirements if the 
railroad met the standard. In that event, the FRA would maintain a 
broad review of a railroad's safety performance plan, including the 
railroad's track and equipment safety practices and technology, along 
with its operating practices such as training and employee engagement. 
Done correctly, regulation would incentivize railroads to achieve 
safety performance standards. Acknowledging that creating such a 
framework will be complex, we believe that it is possible and will 
benefit all stakeholders.
Infrastructure Investment and Policy
Modal Equity
    There has been a lot of discussion about additional infrastructure 
investment on both sides of the aisle, but it is important to point out 
that during the last Congress, this Committee provided opportunities to 
the transportation community by helping to enact the FAST Act. 
Railroads supported the FAST Act. Except, that it was not entirely paid 
for by users, which I will discuss further.
    While BNSF and the Nation's Class I freight railroads are almost 
entirely funded with private capital, we have a strong vested interest 
in ensuring adequate investments are made in public infrastructure like 
ports and highways, which, when combined with rail, make up the 
Nation's integrated freight supply chain. The U.S. has achieved today's 
efficient supply chain with each mode of transportation doing what it 
does best--railroads move freight long haul, often in partnership with 
trucking company customers; trucks handle the bulk of shorter haul and 
local delivery; and ocean carriers, dock workers and freight owners all 
come together to help create an efficient intermodal freight 
transportation network.
    In order to sustain a strong and efficient supply chain to handle 
future freight growth, we must all work to ensure the necessary 
capacity is in place across all modes. The investment looks a bit 
different for each stakeholder. For rail and BNSF, this means expanding 
our line haul and terminal capacity to keep trains moving and avoid 
congestion or delay. As rail volumes grew over the past 25 years, the 
industry invested a massive amount into infrastructure maintenance and 
expansion to create capacity. BNSF's recent investments are evidence of 
our commitment to increase capacity. In fact, since 2000, we have 
invested more than $55 billion in our network to ensure we are 
positioned to grow with our customers.
    With respect to federally funded capacity investments in public 
road and bridge infrastructure, the U.S. has historically relied upon a 
``user pays'' system, which until recently worked extremely well. 
However, the user pays model has experienced significant erosion as 
Highway Trust Fund (HTF) revenues, generated through fuel taxes and 
other static user fees, have failed to keep up with investment needs 
and have been supplemented with general taxpayer dollars and other non-
traditional funding sources.
    General fund transfers to the HTF, now totaling some $143 billion 
since 2008, amounts to more than three years' worth of non-user, or 
``free'' taxpayer money for those who benefit from federal-aid highway 
programs, assuming FAST Act levels of budget authority. Further, the 
Congressional Budget Office (CBO) projects that under FAST Act funding 
levels the gap between dedicated surface transportation user-based 
revenues and spending will average $21.2 billion annually from Fiscal 
Year 2021 to 2026.
    The heaviest of trucks already underpay their share of the wear and 
tear on Federal highways. According to the U.S. Department of 
Transportation's Highway Cost Allocation Study released in 2000, 
80,000-pound, five-axle combination trucks cover just 80 percent of the 
damage they cause to our highways; six-axle, 97,000-pound trucks cover 
just 50 percent of their cost responsibility; and trucks weighing more 
than 100,000 pounds cover only 40 percent. Underpayments on state taxes 
are also significant and are in addition to the Federal underpayment. 
Recent studies suggest that, adjusted for inflation, the DOT findings 
mean that 80,000-pound trucks currently underpay their Federal cost 
responsibility by around 27 cents per gallon of fuel. For some truck 
size and weight configurations, the Federal underpayment could be as 
high as $1.17 per gallon. Many states already have exemptions to allow 
heavier trucks on state roads, and in recent years, a number of Federal 
truck size and weight exemptions have passed, without any related 
increase in fees. Last Congress, the trucking industry supported an 
increase in the fuel tax.
    Some of BNSF's biggest customers and valued supply chain partners 
are trucking companies, and they are also in many cases intense 
competitors. Railroads have a significant cost advantage over all-truck 
long-haul freight moves, but this is eroded by the ongoing infusions of 
General Funds into the HTF without appropriate increases in the fees, 
taxes and other charges paid by truck users of the infrastructure. As I 
like to say, if you subsidize something, you get more of it. Moving 
away from the trucking industry paying its fair share in usage taxes 
will result in more trucks on the highway system and shifts modal 
equity from more fuel efficient and environmentally-friendly freight 
rail. Even public policy support for development and testing of truck 
automation could tilt the playing field away from intermodal freight 
rail, especially if railroads' own automation, both within facilities 
and along the line of road, is not also a public policy priority.
    Congress should strengthen the ``user pays'' requirement. It could 
be done by increasing the fuel tax and/or moving toward a weight 
distance/vehicle-miles-traveled tax system for trucks. The FAST Act 
established the Surface Transportation System Funding Alternatives 
grant program to fund projects testing the design, implementation and 
acceptance of user-based alternative revenue mechanisms. The program 
has awarded over $14 million in grants to the following state 
transportation departments: California, Delaware, Hawaii, Minnesota, 
Missouri, Oregon and Washington. Congress should be aware of these and 
other opportunities for demonstrating ways to determine and assess a 
fair fee for commercial use of highway infrastructure.
Permitting Reform
    Turning back to the FAST Act, there were many things to like, 
especially in terms of freight transportation policy. The law calls for 
development of a national freight strategy and prioritizes freight 
projects in a way no previous surface transportation authorization bill 
has. Below are highlights of the law from the railroad perspective, as 
well as additional recommendations where appropriate.
    The FAST Act continued and expanded upon project delivery and 
permitting reforms enacted as part of the reauthorization bill's 
predecessor legislation, MAP-21. For example, FAST directs the DOT to 
review all previously enacted highway permit reforms and project 
streamlining procedures and apply them to railroad projects. The bill 
also expands on the types of rail projects that can be categorically 
excluded from extensive review requirements, and further mandates that 
the DOT, in consultation with the Advisory Council on Historic 
Preservation, create a process to mirror that of the Federal highway 
system, which would exclude railroad rights-of-way from unnecessary 
historic reviews. Careful implementation of these reforms by the DOT 
and the Advisory Council on Historic Preservation will be important to 
ensuring that the intended benefits are fully realized.
    While project delivery reforms at the Federal level have been an 
important focus, improved permitting processes remain a critical need 
at all levels of government. Almost weekly, negative decisions from 
courts or permitting authorities at the local and state level 
demonstrate to BNSF and its customers that our growth, especially at 
origins and destinations, is limited by the inability to secure 
required permits. Over the past few years, facility expansion on the 
West Coast for both BNSF and our customers has been severely challenged 
by the regulatory process and environmental advocacy groups opposed to 
facility construction. These decisions effectively cut the rest of the 
U.S. off from valuable access to the Pacific Ocean.
    In some cases, local permitting processes are used as a means to 
target and prevent interstate transportation, particularly of fossil 
fuels. Under the Interstate Commerce Commission Termination Act 
(ICCTA), many state or local regulations are preempted with respect to 
rail transportation--including zoning and land use regulation, 
construction and environmental permitting of rail facilities and 
regulation of railroad operations. When it comes to interstate 
commerce, Federal agencies, including the STB, must not be reluctant to 
intervene and provide clear direction that using such regulations to 
block these projects is preempted. Strong direction is necessary to 
ensure that important rail projects are not shelved or abandoned 
altogether, and that the flow of interstate commerce is not impeded. 
Additional permitting reform recommendations include:

   Statutorily prioritize project permitting for international 
        commerce.

   Review the scope of state implementation of Federal statutes 
        to ensure consistency with Federal regulators for projects in 
        interstate commerce.

   Expand Federal Communications Commission regulatory 
        streamlining to expedite the deployment of technologies that 
        improve safety and efficiency in the railroad industry
FASTLANE and Other Grant Programs
    The FAST Act provides dedicated freight funding both by formula to 
the states as well as through a competitive FASTLANE grant program for 
addressing critical freight needs including, among other things, 
intermodal connectors, port facilities, highway-rail grade separations 
and certain rail projects. Below are several examples of FASTLANE grant 
projects which demonstrate the intermodal significance of the program.

   The CREATE Project in Chicago makes improvements including 
        grade separations along four rail corridors that handle 
        passenger and freight traffic reducing train and vehicle delays 
        throughout the Chicago area, the busiest rail hub in the 
        country. A pending $160 million FASTLANE grant for the 75th 
        Street Corridor Improvement Project will eliminate the most 
        congested chokepoint in the Chicago Terminal, Belt Junction, 
        where 30 Metra trains and 90 freight trains cross each other's 
        path each day. In total, the CREATE partnership has committed 
        $1.4 billion in funding for the Chicago Region's freight 
        network.

   The Terminal Railroad Association of St. Louis's (TRRA) 
        Merchants Bridge across the Mississippi River, which was 
        originally constructed in 1890, requires replacement of the 
        east approach and main spans, a $222 million project. The 
        Missouri DOT has applied for a $75 million FASTLANE grant to 
        help pay for an upgrade of the bridge's seismic resilience, as 
        part of the project which will be otherwise funded by the TRRA. 
        The bridge is one of the busiest rail bridges across the 
        Mississippi River, facilitating Amtrak service as well as the 
        efficient movement of freight.

   The Tennessee DOT has applied for an approximately $100 
        million FASTLANE grant as part of a more than $300 million 
        project to improve critical roadway infrastructure in a key 
        freight corridor through Memphis. Roadway capacity improvements 
        in the corridor will benefit a large number of freight 
        transportation companies and their customers, including helping 
        facilitate efficient truck flows in and out of BNSF's Memphis 
        intermodal facility, in which BNSF invested $200 million for 
        expansion in 2010. The project will have significant traffic 
        congestion and delay savings, environmental benefits from 
        improved vehicle flows and reduced idling, and improved roadway 
        safety.

    The FAST Act also importantly provided a funding increase for the 
Railway-Highway Crossings Program (``Section 130 program'') from $230 
million in 2017 to $245 million in 2020--funding that should be fully 
utilized by states but often is not. The Section 130 program provides 
apportioned funds to states for the elimination of hazards at highway 
grade crossings, with 50 percent of a state's apportionment dedicated 
to installation of protective devices at crossings and the remainder 
for any hazard elimination project. Section 130 is a critically 
important program, and while it does allow for some funding to go 
towards highway-rail grade separation projects, it does not come close 
to meeting the pressing needs that states and local governments have to 
increase funding toward projects that separate their roadways from 
railroad operations. The FAST Act prioritized grade separations in ways 
previous highway bills did not by making them eligible grade separation 
projects across multiple funding programs, but if the legislative 
opportunity to assist state and local governments with additional 
funding for this important roadway investment presents itself, 
railroads would continue to participate and support those projects.
    As Congress considers additional infrastructure-related 
legislation, we believe the project grant eligibilities developed by 
Congress in the FAST Act provide an excellent framework. However, we 
also recommend that Congress consider providing additional funding for 
commuters and Amtrak to implement PTC, and to provide funding for track 
and other improvements on the Amtrak national route system.
Conclusion
    I always like to remind Members of Congress about their important 
role in designing and paying for a transportation network to facilitate 
American competitiveness. Many of the more than 150 million Americans 
who go to work every day rely on their employers to be able to compete 
in the global competitive marketplace. Congress provides Federal 
funding for the highway network which is key to this ability for the 
American worker to compete. Our supply chain is also enormously blessed 
with the most efficient freight rail network in the world. This freight 
rail network participates in almost 40 percent of all of the intercity 
gross ton miles that move in our country. It is privately funded and 
Congress does not have to debate the funding levels for these networks 
because their maintenance, expansion and operations are fully paid for 
by the railroads. These well-maintained and efficient networks benefit 
our customers but these investments are also an important part of why 
railroads are setting new safety records. They also provide key public 
benefits by mitigating the impacts of highway congestion and wear and 
tear.
    By increasing the cost of compliance, preventing efficiency or 
adequate returns through regulation, or creating a playing field that 
is not level for railroads vis-a-vis their competitors, Congress and 
the Administration ``control the dial'' on how much of the railroad 
industry's benefits we can afford to deliver. However, we know that 
Congress and especially this Committee understand the role of railroads 
in the economy, and in each of your states, and we appreciate that we 
are heard and able to remain engaged in dialogue with you about these 
issues and others related to strengthening freight movement in our 
Nation.
                               Attachment
http://archives.chicagotribune.com/1982/01/10/page/67/article/ancient-
rail-rules-getting-an-update



[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    The Chairman. Thank you, Mr. Rose.
    And next, Dr, Lofgren. Welcome.

 STATEMENT OF DR. CHRISTOPHER B. LOFGREN, PRESIDENT AND CHIEF 
          EXECUTIVE OFFICER, SCHNEIDER NATIONAL, INC.

    Dr. Lofgren. Chairman Fischer, Ranking Member Mr. Booker, 
distinguished members of the Subcommittee, thank you for the 
opportunity to be here today.
    Schneider National was founded in 1935 by Al Schneider when 
he sold the family car and bought the truck. Since then, we've 
grown to become one of the largest truckload and intermodal 
transportation companies in North America. We employ more than 
19,000 associates across the country, with strong presence in 
many states represented on this subcommittee.
    Trucking companies like Schneider are the backbone of 
America's economy. The trucking industry transports more than 
80 percent of the Nation's freight tonnage and employs 
approximately 7 million workers in trucking-related jobs. In 
addition to moving goods into and out of the U.S. ports, we 
also provide essential lifeline to communities across the 
country, delivering supplies and essential commodities.
    In order to meet the current and projected future demand 
for freight movement, Congress and the new administration 
should promote policies and regulations that ensure safety, 
support innovation, and increase productivity.
    At Schneider, safety is our number one core value. This 
commitment stems from our founding common sense observation 
that nothing we do is worth hurting others or ourselves. We are 
constantly striving to put safety first and always, which is 
why we've established industry-leading policies, practices, and 
technologies. This includes significant investments in safety-
enhancing equipment and technology, including roll stability, 
collision avoidance, forward-facing cameras, training 
simulators, and real-time truck sensor monitoring.
    We were the first to install game-changing in-cab 
communication devices back in 1985, and have continued to adopt 
cutting edge technology since then. A more recent technological 
investment, making our trucks, our drivers, and highways safer 
every day is the OnGuard collision mitigation system. Installed 
in every new tractor, this forward-looking, radar-based system 
monitors the distance, speed, and deceleration of the vehicle 
ahead.
    Since our deployment of the collision mitigation technology 
in 2012, Schneider has experienced a 69 percent decrease in 
rear-end accidents and a 95 percent reduction in rear-end 
accident claim costs. While Schneider has excelled as an 
industry leader in safety, innovation, and technology, we still 
draw concern from a range of critical issues impacting our 
business and the future of our industry.
    As you seek input on these matters in order to shape policy 
for the 115th Congress, I would like to highlight the 
following. We operate in a highly regulated industry. While 
some regulations have merit and will successfully increase 
safety within our industry, these things, such as hours of 
service, requirements for electronic logging devices, hair 
follicle testing, and speed limiters, we've also experienced a 
general trend of restrictive and complex regulations, which 
impact the overall supply of trucks and drivers in the 
industry.
    We're also subject to regulation at the State level, where 
new laws and litigation threaten our efficiency and the ability 
to conduct business in a uniform manner. Although Congress 
provided for the express preemption of State laws related to 
the prices, routes, and services of motor carriers through 
legislation in 1994, that preemption has recently been 
challenged. State laws regarding drivers' meals and rest 
breaks, payment agreements, and more have evolved into a new 
patchwork of rules and regulations at the State level. The lack 
of consistency on this and other issues governing interstate 
trucking have created unintended consequences that actually 
decrease safety and hurt the environment.
    In the area of cybersecurity, while the application of 
innovative technologies around information, automation, and 
communication optimizes our operations and increases safety, it 
also makes our businesses more dependent upon uninterrupted and 
secure networks. Infrastructure investment is crucial, as 
you've highlighted. Underinvestment in our Nation's surface 
transportation infrastructure produces inefficiencies in ways 
that we move our goods, it wastes fuel, and increases operating 
costs.
    Chairman Fischer, Ranking Member Booker, and other 
distinguished members of the Committee, thank you for the 
opportunity to testify and provide Schneider's perspective on 
increasing safety and efficiency for the trucking industry. As 
the Committee continues to work, we stand ready to support your 
efforts and offer insights about our industry and policies that 
pertain to your jurisdiction.
    Thank you.
    [The prepared statement of Dr. Lofgren follows:]

 Prepared Statement of Dr. Christopher B. Lofgren, President and Chief 
              Executive Officer, Schneider National, Inc.
Introduction
    Chairman Fischer, Ranking Member Booker and distinguished members 
of the subcommittee, thank you for the opportunity to testify about 
``Moving America with our Multi-modal Transportation System.'' My name 
is Chris Lofgren and I am President and Chief Executive Officer of 
Schneider National, Inc., headquartered in Green Bay, Wisconsin. Today, 
I would like to offer you my insights about the trucking and 
transportation logistics industry and share with you the best practices 
that Schneider National has deployed that increase the efficiency, 
effectiveness and safety of our Nation's multimodal transportation 
system. I hope that it will inform the Committee's agenda in the 115th 
Congress.
    Schneider National was founded by Al Schneider in 1935 when he sold 
his family car to buy the company's first truck. Since that time, 
Schneider National has grown to become one of the largest truckload and 
intermodal transportation companies in North America. Our business 
consists of approximately 10,800 company and 2,800 owner-operator 
trucks, 38,400 trailers and 18,000 intermodal containers. Schneider 
National employs 19,300 associates across all 48 of the contiguous 
United States, with a strong presence in many of the states represented 
on this subcommittee such as New Jersey, Wisconsin, Washington and 
Nebraska.
    We serve a diverse customer base, which includes multiple 
industries represented by approximately 10,000 customers, including 
more than 200 Fortune 500 companies. Each day, our freight moves more 
than 8.8 million miles, equivalent to circling the globe approximately 
350 times. Our logistics business manages over 20,000 qualified carrier 
relationships and, in 2015, managed approximately $2 billion of third-
party freight. Our portfolio diversity, network density throughout 
North America, and large fleet allows us to provide an exceptional 
level of service to our customers and consistently excel as a reliable 
partner, especially at times of peak demand.
    Schneider National is driven by our uncompromising values to 
deliver the goods that enhance the lives of people everywhere. Core to 
these values is our commitment to safety, integrity, respect and 
excellence. These principles are guiding tenants of our business at 
every level of the company.
    Trucking companies like Schneider National are the backbone of 
America's economy. The trucking industry transports more than 80 
percent of our Nation's freight tonnage and employs approximately 7 
million workers in trucking-related jobs.\1\ In addition to moving 
goods into and out of U.S. ports, we also provide an essential lifeline 
to communities across the country, delivering supplies and essential 
commodities.
---------------------------------------------------------------------------
    \1\ American Trucking Associations, American Trucking Trends 2016 
(August 2016)
---------------------------------------------------------------------------
    Our nation's ability to compete in global markets, and to meet the 
needs and expectations of consumers and businesses, depends on a robust 
freight system driven by the trucking industry. In order to meet 
current and projected future demand for freight movement, Congress and 
the new Administration should promote policies and regulations that 
ensure safety, support innovation and increase productivity.
Safety, Innovation and Technology
    At Schneider National, safety is our number one core value. This 
commitment stems from our founding common sense observation that 
``nothing we do is worth hurting others or ourselves.'' Today, our 
culture of safety starts with our people and layers in training, 
processes and technology. We are constantly striving to put safety 
first and always, which is why we have established industry-leading 
policies, practices and technologies.
    Our relentless focus on safety not only enables us to better uphold 
our responsibility towards our employees, customers and the community, 
but also provides a critical competitive advantage in an industry with 
increasingly stringent safety and regulatory requirements, resulting in 
lower operating risk and insurance costs.
    I would like to share some of the policies, practices and 
technologies we at Schneider National have adopted that may serve as 
best practices in the eyes of the Committee as it seeks to increase the 
safety of our multi-modal transportation system.

   Safety through Innovative Technology: At Schneider National, 
        we have made significant investments in safety-enhancing 
        equipment and technology, including roll stability, collision 
        avoidance, forward facing cab cameras, training simulators and 
        realtime truck sensor monitoring. We were the first to install 
        game-changing in-cab communication devices back in 1985 and 
        have continued to adopt cutting edge technology since that 
        time. A more recent technological investment making our trucks, 
        drivers and highways safer every day is the 
        OnGuardTM collision mitigation system. Installed on 
        every new tractor, this forward-looking, radar-based system 
        monitors the distance, speed and deceleration of the vehicle 
        ahead. OnGuard alerts the driver to possible collision risks 
        and actively works to eliminate, or at worst mitigate the 
        severity of, any impact. Since our deployment of the collision 
        mitigation technology in 2012, Schneider National has 
        experienced a 69 percent decrease in rear-end accidents and a 
        95 percent reduction in rear-end accident claims cost. 
        Additionally, Schneider National was an early adopter of 
        Electronic Logging Devices (ELDs) and supports the Federal 
        Motor Carrier Safety Administration (FMCSA) final rule 
        requiring the installation of ELDs by December of this year. We 
        recommend the Committee continues to advance policies that 
        encourage the development and implementation of innovative 
        technologies that can improve safety.

   Practices that Promote Health and Safety: As a company that 
        is strongly committed to safety, Schneider National is 
        constantly seeking ways to protect the traveling public and the 
        communities in which we operate. This includes our investments 
        in cutting edge technology as well as our pursuit of additional 
        opportunities to enhance health and safety, such as mandatory 
        pre-employment drug tests that surpass U.S. Department of 
        Transportation standards by requiring hair samples. Under 
        current FMCSA regulations, truck drivers are required to 
        undergo mandatory pre-employment urine testing for drugs and 
        alcohol. While urine testing has been somewhat effective in 
        identifying drug use, Schneider National has recognized that 
        there are alternative routes to urinalysis, such as hair 
        follicle testing that can better identity drug users. 
        Specifically, hair testing can detect drug use for a period of 
        up to 90 days, while urine testing only detects usage over a 
        much shorter period of time (48-72 hours). At Schneider 
        National, we believe there is no place for drug use in a 
        safety-sensitive environment such as the trucking industry. 
        That is why we have voluntarily opted to utilize the more 
        reliable and comprehensive hair follicle testing, despite its 
        increased cost. We recommend the Committee encourage the 
        voluntary adoption of practices that promote health and safety 
        by allowing companies like Schneider National to substitute 
        proven practices in lieu of less stringent U.S. DOT 
        requirements.
Critical Issues and Future Challenges
    While Schneider National has excelled as an industry leader in 
safety, innovation and technology, we still draw concern from a range 
of critical issues impacting our business and the future of our 
industry. As you seek input on these matters in order to shape policy 
for the 115th Congress, I would like to highlight the following:

   Federal Regulations: We operate in a highly regulated 
        industry. While some regulations have merit and will 
        successfully increase safety within our industry and across the 
        system--like Hours of Service rules, requirements for ELDs, 
        hair follicle testing and speed limiters, we also have 
        experienced a general trend of restrictive and complex 
        regulation, which impacts the overall supply of trucks and 
        drivers in the industry. Furthermore, the use of guidance 
        rather than rulemakings creates an unintended sense of 
        uncertainty within the industry while also increasing liability 
        exposure.

   State Regulations: In addition to Federal regulations, we 
        are subject to regulation at the state level where new laws and 
        litigation threatens our efficiency and ability to conduct 
        business in a uniform manner. Although Congress provided for 
        the express preemption of state laws related to the prices, 
        routes and services of motor carriers when it passed the 
        Federal Aviation Administration Authorization Act (FAAAA) of 
        1994, that preemption has recently been challenged. State laws 
        regarding drivers' meal and rest break periods, payment 
        agreements and more has evolved into a new patchwork of rules 
        and regulations at the state level. The lack of consistency on 
        this and other issues governing interstate trucking have 
        created unintended consequences that decrease safety and hurt 
        the environment.

   Cybersecurity: While the application of innovative 
        information, automation and communications technologies 
        optimizes our operations and increases safety, it also makes 
        our business more dependent on an uninterrupted and secure 
        network. If the stability or capability our technologies is 
        compromised, it could adversely affect our revenue, customer 
        service, driver turnover rates and data preservation. 
        Additionally, if any of our critical information or 
        communications systems fail or become unavailable, we would be 
        required to perform certain functions manually, which could 
        temporarily affect the efficiency and effectiveness of the 
        supply chain.

   Infrastructure Investment: Underinvestment in our Nation's 
        surface transportation infrastructure produces inefficiencies 
        in the way we move goods, wastes fuel and increases operating 
        costs. Current freight bottlenecks and interstate congestion 
        already challenges our operations. With U.S. freight volume 
        anticipated to increase 45 percent by the year 2040 \2\, the 
        system must be updated and prepared for this surge. Otherwise, 
        our environment and economy will suffer.
---------------------------------------------------------------------------
    \2\ U.S. Department of Transportation, Beyond Traffic 2045: Trends 
and Choices
---------------------------------------------------------------------------
Conclusion
    Chairman Fischer, Ranking Member Booker and other distinguished 
members of the subcommittee, thank you again for the opportunity to 
testify and provide Schneider National's perspective on increasing 
safety and efficiency for the trucking industry. As the Committee 
continues its work in the 115th Congress, we stand ready to support 
your efforts and offer insight about our industry and policies that 
pertain to the jurisdiction of this committee.

    The Chairman. Thank you, Dr. Lofgren.
    Mr. Gurd, welcome.

            STATEMENT OF TOM GURD, VICE PRESIDENT, 
       INTEGRATED SUPPLY CHAIN, THE DOW CHEMICAL COMPANY

    Mr. Gurd. Good afternoon. I'm Tom Gurd, Vice President of 
Integrated Supply Chain for the Dow Chemical Company. I would 
like to thank Chairman Fischer, Ranking Member Booker, and 
members of the Subcommittee for inviting Dow to testify at this 
hearing. I'm here to testify on behalf of Dow and also a member 
of the American Chemistry Council, a trade association 
representing America's leading chemical companies.
    I would like to thank the Subcommittee for recognizing that 
the chemical industry is a principal stakeholder in developing 
policies that can keep our economy moving. We welcome the 
opportunity to work closely with the Subcommittee to develop 
infrastructure and transportation policies that further drive 
investment and manufacturing growth in the U.S.
    Dow's products help address many of the world's most 
challenging problems, such as the need for fresh food, safer 
and more sustainable transportation, clean water, energy 
efficiency, more durable infrastructure, and increasing 
agricultural productivity.
    Dow is one of the largest chemical and plastic shippers in 
North America. Our operations continue to grow, most 
significantly in the U.S. Gulf Coast. In 2016, we made over 1 
million shipments from over 60 production facilities. This 
represented over 40 billion pounds of product being shipped; 
over 16 billion pounds shipped by rail, 13 billion pounds by 
road, and over 11 billion by marine.
    We contract with over 200 different third-party carriers to 
transport our products. Two of them are here with me today.
    We have over 160 third-party warehouses, terminals, and 
transloading facilities. We operate a fleet of 18,000 railcars, 
including 7,500 tank cars for the transportation of chemicals. 
Approximately 20 percent of our shipments are hazardous 
material shipments. Transportation of chemicals, including 
hazardous materials, is vital to U.S. competitiveness in the 
global marketplace as well as to the health, safety, and 
welfare of the American public.
    Safety is Dow's top priority. We strive to ensure safe 
operations at our production facilities. We collaborate with 
our logistics service providers to ensure safe, secure, and 
compliant transportation of our products. We work with our 
customers at their locations for the safe handling of our 
products.
    Dow is committed to Responsible Care, the chemical 
industry's world-class environmental, health, safety, and 
security performance initiative. Our transportation partners 
demonstrate the same safety commitment through the Responsible 
Care Partnership program.
    Dow has an extensive risk management program, but we're 
also committed to ensuring communities are aware and prepared 
if an incident does occur. We support this commitment through 
TRANSCAER and CHEMTREC, which provide the training, support, 
and information necessary for effective and timely emergency 
response.
    Dow is fully committed to transportation safety and 
security advancements and to the reduction of risk to people, 
communities, and the environment. This requires close 
collaboration with all industry stakeholders. An example of 
this is Dow's participation as the ACC member representative on 
the Advanced Tank Car Collaborative Research Program to improve 
tank car safety.
    Dow supports the Federal Government's comprehensive 
regulatory framework to mitigate safety and security risks. We 
encourage the government agencies to further collaborate with 
industry stakeholders to ensure that current and proposed 
regulations are designed to improve safety and reduce 
unnecessary burdens.
    In advance of the Commerce Committee's recent hearing on 
``Reducing Unnecessary Regulatory Burdens,'' ACC identified a 
number of regulatory actions by the DOT that impose burdens 
without advancing safety. These actions include regulatory 
provisions and interpretations that directly impact Dow. We 
welcome further discussion on these issues.
    The DOT serves a critical role in establishing uniform 
national standards for the safe transportation of hazardous 
materials. The DOT must maintain this exclusive role. Any new 
requirements imposed on the regulated community must be 
developed through an appropriate Federal rulemaking process, 
and supported by a cost-benefit analysis. If regulations are 
adopted with an unsubstantiated cost-benefit analysis, the 
regulated community will incur significant costs, yet without 
increased safety.
    I conclude my testimony by acknowledging your efforts and 
willingness to work with the chemistry industry and our 
integrated transportation partners to ensure that the U.S. has 
a safe, secure, sustainable, and competitive network to deliver 
our products when and where they're needed.
    We look forward to working closely with the Subcommittee, 
our transportation partners, and the DOT to further collaborate 
on policies and programs that will enhance our Nation's 
transportation infrastructure.
    Thank you.
    [The prepared statement of Mr. Gurd follows:]

       Prepared Statement of Tom Gurd, Corporate Vice President, 
           Integrated Supply Chain, The Dow Chemical Company
    Good afternoon. I am Tom Gurd, Vice President of Integrated Supply 
Chain for The Dow Chemical Company. I would like to thank Chairman 
Fischer, Ranking Member Booker and Members of the Subcommittee for 
inviting Dow to testify at this hearing. I am here to testify on behalf 
of Dow and also as a member of the American Chemistry Council 
(``ACC''), a trade association representing America's leading chemical 
companies.
    I would like to thank the Subcommittee for recognizing that the 
chemical industry is a principal stakeholder in developing policies 
that can keep our economy moving. We welcome the opportunity to work 
closely with the Subcommittee to develop infrastructure and 
transportation policies that further drive investment and manufacturing 
growth in the U.S.
    Dow's products help address many of the world's most challenging 
problems, such as the need for fresh food, safer and more sustainable 
transportation, clean water, energy efficiency, more durable 
infrastructure, and increasing agricultural productivity.
    Dow is one of the largest chemical and plastics shippers in North 
America. Our operations continue to grow, most significantly in the 
U.S. Gulf Coast. In 2016, we made over 1 million shipments from over 60 
production facilities. This represented over 40 billion pounds of 
product. Over 16 billion pounds shipped by rail, over 13 billion by 
road, and over 11 billion by marine. We contract with over 200 
different third party carriers to transport our products. Two of them 
are here today. We have over 160 third party warehouses, terminals and 
transloading facilities. We operate a fleet of 18,000 railcars, 
including 7,500 tank cars for the transportation of chemicals. 
Approximately 20 percent of our shipments are hazardous materials 
shipments. Transportation of chemicals, including hazardous materials, 
is vital to U.S. competitiveness in the global marketplace, as well as 
to the health, safety, and welfare of the American public.
    Safety is Dow's top priority. We strive to ensure safe operations 
at our production facilities. We collaborate with our logistics service 
providers to ensure safe, secure and compliant transportation of our 
products. We work with our customers at their locations for the safe 
handling of our products.
    Dow is committed to Responsible Care, the chemical industry's 
world-class environmental, health, safety, and security performance 
initiative. Our transportation partners demonstrate this same safety 
commitment through the Responsible Care Partnership program.
    Dow has an extensive Risk Management Program, but we are also 
committed to ensuring communities are aware and prepared if an incident 
does occur. We support this commitment through TRANSCAER and 
CHEMTREC, which provide the training, support, and information 
necessary for effective and timely emergency response.
    Dow is fully committed to transportation safety and security 
advancements and to the reduction of risk to people, communities and 
the environment. This requires close collaboration with all industry 
stakeholders. An example of this is Dow's participation as the ACC 
member representative on the Advanced Tank Car Collaborative Research 
Program to improve tank car safety.
    Dow supports the Federal Government's comprehensive regulatory 
framework to mitigate safety and security risks. We encourage the 
government agencies to further collaborate with industry stakeholders 
to ensure that current and proposed regulations are designed to improve 
safety and reduce unnecessary burdens.
    In advance of the Commerce Committee's recent hearing on ``Reducing 
Unnecessary Regulatory Burdens,'' ACC identified a number of regulatory 
actions by the DOT that impose burdens without advancing safety. These 
actions include regulatory provisions and interpretations that directly 
impact Dow. We welcome further discussion on these issues.
    The DOT serves a critical role in establishing uniform, national 
standards for the safe transportation of hazardous materials. The DOT 
must maintain this exclusive role. Any new requirements imposed on the 
regulated community must be developed through an appropriate Federal 
rulemaking process, and supported by a cost-benefit analysis. If 
regulations are adopted with an unsubstantiated cost-benefit analysis, 
the regulated community will incur significant costs, yet without 
increasing safety.
    I conclude my testimony by acknowledging your efforts and 
willingness to work with the chemical industry and our integrated 
transportation partners to ensure that the U.S. has a safe, secure, 
sustainable and competitive network to deliver our products when and 
where they are needed. We look forward to working closely with the 
Subcommittee, our transportation partners and the DOT to further 
collaborate on policies and programs that will enhance our Nation's 
transportation infrastructure.
    Thank you. I look forward to your questions.

    The Chairman. Thank you, Mr. Gurd.
    And, Mr. Moorman. Welcome.

             STATEMENT OF WICK MOORMAN, PRESIDENT 
              AND CHIEF EXECUTIVE OFFICER, AMTRAK

    Mr. Moorman. Thank you, Chairman Fischer, Ranking Member 
Booker, members of the Subcommittee, and my fellow witnesses. 
Good afternoon, everyone. I am Wick Moorman. And it's a 
privilege for me to be here today to testify on behalf of 
Amtrak.
    As you've heard, I joined Amtrak in September 2016, after a 
40-some-year career with Norfolk Southern Corporation that 
culminated in my service as President, CEO, and Chairman of the 
Board. I retired from those positions in 2015, with the idea of 
enjoying time with my family and absolutely no idea of working 
full-time again.
    However, I've followed Amtrak since its creation in 1970. I 
have a deep appreciation for its mission. And to my wife's 
dismay, I was ultimately persuaded to come on board as 
President and CEO with really two responsibilities: one is to 
build on the progress that Amtrak has seen over the past 
decade, and then to lead the search for the right long-term 
CEO.
    First, let me express my gratitude to the Committee for the 
passage of the FAST Act, which recognizes the critical role 
Amtrak plays in our Nation's transportation network. 2016 was a 
strong year for our company. We tick at revenues of $2.2 
billion in more than 31 million passengers. We set another 
record. And additionally and importantly, we reduced our need 
for Federal operating grants to cover our operating loss by 
covering 94 percent of our operating costs through ticket sales 
and other revenues, a first for us and an achievement matched 
by few, if any other, passenger railroads worldwide.
    As strong as that performance was, I know that we can get 
better first by working on our safety culture. Amtrak is a safe 
company today, but we can get better. And then modernizing and 
upgrading our products and strengthening our operational 
efficiency and our project delivery.
    We streamlined our organizational structure. We have a 
consolidated senior executive team to provide focused 
leadership. And with this change, Amtrak is organized now like 
most freight railroad companies and, in fact, most major 
corporations, which is entirely appropriate because that's what 
Amtrak is, it's a corporation.
    And while our business model is somewhat different than the 
typical publicly held for-profit company, at the end of the 
day, Amtrak is a business and will operate like a business on 
par with all of the other companies that rely largely on 
government funding as part of their business model. Our job is 
to deliver the services and run the network that you, our 
principal stakeholders, believe is in the public interest and 
warrants Federal investment.
    With our new structure in place, I think we're well 
positioned for future growth opportunities and for delivering 
more value to the American public. However, for us to truly 
seize the opportunities before us, we need to begin a new era 
of investment in the critical assets that are central to our 
operations: our infrastructure, our fleet, and our stations.
    This brings me to my core message today--now is the time to 
invest in our aging assets. The infrastructure challenges that 
plague our National Highway System, our ports, our inland 
waterways, and transit systems are in many ways similar to the 
problems facing Amtrak today. More than ever, our Nation and 
the traveling public rely on Amtrak for mobility, but our 
future depends on whether we can renew the cars, locomotives, 
bridges, tunnels, stations, and the other infrastructure that 
will allow us to meet these growing demands. Our list of needs 
are long, and several are included in my written testimony 
submitted for the record.
    We applaud the growing consensus in Congress and certainly 
the work of this committee and the administration that the time 
is right for major infrastructure investments, and we urge you 
to consider the many ways in which the Federal Government can 
help bring this to fruition, from direct funding for projects 
to the streamlining of things like the environmental review 
process and the removal of unneeded regulation and red tape.
    Additionally, public-private partnerships and innovative 
financing mechanisms should be part of this mix, and they will 
be good options for us. But if we're serious about maximizing 
the value of our investments and advancing them quickly, direct 
Federal funding to entities such as Amtrak should also play a 
major part.
    Finally, I would be remiss if I didn't emphasize the 
important nature of our relationships with the 21 states and 
the various commuter agencies that we partner with. The growth 
of our State services is a testimony to the strength of these 
routes and the demand for passenger rail traffic. They now 
account for about half of our total ridership.
    Likewise, in the Northeast Corridor and the other parts of 
the United States where Amtrak owns significant infrastructure, 
we host hundreds of millions of annual commuter trips, and now 
we're seeing significant investments from these agencies toward 
our common cause. We're very focused on identifying ways to 
work even more collaboratively with these states and agencies 
on our long list of important needs, many of which I've 
discussed today.
    I look forward to your questions. Thanks for the 
opportunity to appear before you.
    [The prepared statement of Mr. Moorman follows:]

             Prepared Statement of Wick Moorman, President 
                  and Chief Executive Officer, Amtrak
    Chairman Fischer, Ranking Member Booker, members of the 
Subcommittee, and fellow witnesses, good afternoon. My name is Wick 
Moorman, and it is my privilege to be here today on behalf of Amtrak to 
discuss our integral role in America's multimodal transportation 
system.
Introduction
    As most of you know, in September of 2016, I joined Amtrak after a 
forty-two year career with Norfolk Southern Railway that culminated in 
my service as President, CEO and Chairman of the Board. I retired from 
those positions in 2015, with the idea of enjoying time with my family 
and had absolutely no intention of working full-time again. However, I 
was then approached by the Amtrak Board about the possibility of 
leading Amtrak. Having followed Amtrak since it was created in 1970, I 
have a deep appreciation for the company's mission and ultimately was 
persuaded to serve as President and CEO, with the goal of building upon 
Amtrak's progress of the past decade and leading the search to find a 
long-term CEO that can lead the company into the future.
    I come to Amtrak at an important time in our history, as intercity 
passenger rail service has reemerged as a vital and growing part of our 
national transportation network in the new century. In recognition of 
this, Congress passed the FAST Act in December 2015, the first surface 
transportation bill to include a reauthorization of Amtrak and the 
first to bring the Federal Government's rail, highway and transit 
programs together into one legislative package. I'd like to thank the 
members of this Subcommittee for your leadership of that effort and 
applaud steps like today's hearing that look at ways to further 
integrate Federal policy and programs for the benefit of mobility, 
safety and efficiency.
    The FAST Act recognizes the critical role Amtrak plays in our 
Nation's transportation network. I am pleased to report to you that 
Fiscal Year 2016 was a strong year for the company. With ticket 
revenues of $2.2 billion and more than 31 million passengers, it was 
another record year. Additionally, we reduced the need for our Federal 
grant to fund operations, by covering 94 percent of our operating costs 
through ticket sales and other revenues--another first. This is an 
achievement matched by few, if any, other passenger railroads 
worldwide.
Corporate Reorganization
    As strong as our FY16 performance was, I'm certain that we can get 
even better by first relentlessly improving our safety culture, 
modernizing and upgrading our products, and strengthening our 
operational efficiency and project delivery. The first step we took 
towards these goals was streamlining our organizational structure, 
creating a consolidated senior executive team to provide focused 
leadership and to work with our Board of Directors to drive long-term 
value. With this change, Amtrak is now organized like most freight 
railroads and major corporations, which is entirely appropriate because 
that is just what Amtrak is--a corporation.
    Although we have a somewhat different history, in that the core of 
our business and mission was established by Congress, we are a business 
and that business is moving people by rail and serving our main 
stakeholders, the Federal Government and the American taxpayer. Our 
business model is different than that of a typical, publicly held, for-
profit company. But we have a lot in common with other businesses, from 
defense contractors to highway builders, who are in business to serve 
government and to support public purposes. Highway builders, for 
instance, design and build essential road infrastructure projects for 
our government and in support of the national economy, charging the 
public for these services at levels sufficient to generate adequate 
returns for their owners. Similarly, Amtrak receives funds from the 
Federal Government to augment the more than $2 billion in revenue we 
generate directly through ticket sales every year. In that way, we also 
provide infrastructure and services that produce public benefit and 
promote the Nation's economy.
    Federal funds are what allow us to meet the operational and capital 
needs of our 46-state national network of trains and our infrastructure 
that serve more than 500 communities, urban and rural, across America. 
We serve these communities and operate these routes because Congress, 
various Administrations, and the public generally have recognized the 
unique value that intercity passenger rail service can provide to these 
communities and the Nation. Our job is to deliver the services and run 
the network that you, our principal stakeholders, believe is in the 
public interest and that provides sufficient value to warrant the 
investment. In doing so, my pledge to you is to operate Amtrak as 
safely, efficiently, and effectively as possible. From better project 
delivery to greater operational excellence, we are working on ways to 
deliver even greater value from your investments in our mission.
    Let me also take a moment to answer a question I receive from a lot 
of people about whether the government needs to fund passenger rail 
service at all, and whether or not private entities or the freight 
railroads could just take over the operation of this network. I began 
my career with the Southern Railway, a Norfolk Southern predecessor 
that chose not to join Amtrak in 1971 and operated some of the last 
privately funded, regularly scheduled intercity service in the U.S. 
until 1979. Eventually, dwindling revenues and the cost of equipment 
improvements led the Southern to turn over operation of passenger 
service to Amtrak, just as every other private freight railroad has 
done. Having led Norfolk Southern, and as a student of the industry for 
many years, it is clear to me that the fundamentals of the rail 
passenger business remain the same today. If the Nation wants a 
passenger network of any significant size and impact, like the one we 
operate today, it will take public support to make it happen, just as 
it does everywhere across the globe.
Passenger Rail Investment Opportunities--Northeast Corridor
      and National Network
    With a new corporate structure in place and with a renewed focus on 
strengthening safety, operational excellence, and the quality of our 
product, we are well-positioned for future growth opportunities and for 
delivering more value to the American public. However, for us to truly 
seize the opportunities before us, we need to begin a new era of 
investment in the critical assets that are central to our operations--
our infrastructure, fleet, and stations.
    This brings me to the core message that I want to share with you 
today--now is the time to advance initiatives to provide funding and 
investment opportunities for our aging assets. The infrastructure 
challenges plaguing our National Highway System, ports, inland 
waterways, and transit systems are similar to some of the problems 
Amtrak is facing in these major areas:

  (1)  Northeast Corridor: Amtrak's Northeast Corridor is North 
        America's busiest railroad, with 363 miles of Amtrak-owned 
        infrastructure and 2,200 daily high-speed, commuter, and 
        freight trains operating on an underlying infrastructure built 
        between 80-110 years ago. While the track and signal systems 
        are reasonably sound, they need improvement, and many major 
        bridges, tunnels and stations must be replaced and expanded to 
        preserve current service levels and permit future growth.

  (2)  National Network: Outside of the Northeast Corridor and across 
        the National Network, Amtrak is a tenant operating over the 
        20,000 miles of freight and commuter railroads--including Mr. 
        Rose's railroad, BNSF. While the condition of the freight 
        railroad infrastructure is generally very good, we still 
        encounter capacity constraints that limit and delay both 
        passenger and freight volumes.

  (3)  Rolling Stock and Stations: Much of our current equipment has 
        reached or exceeded the end of its useful life. In order to 
        meet the current requirements and growing demands of our 
        passengers, we must replace these assets. The depots that 
        Amtrak inherited are old and in significant need of repair and 
        modernization.

    More than ever, our Nation and the traveling public rely on Amtrak 
for mobility, but the future of Amtrak depends on whether we can renew 
the cars, locomotives, bridges, tunnels, stations, and other 
infrastructure that allow us to meet these growing demands. Amtrak 
already has begun to face this challenge. Enabled by the RRIF loan 
program championed by this Committee, and using our own ticket revenue, 
we are purchasing new electric locomotives and new trainsets for our 
second generation Acela Express. But we need the help of Congress, if 
we are to make a serious dent in the massive backlog of deferred 
investment in right-of-way infrastructure and rolling stock that 
constricts growth and reliability today. As Congress and the 
Administration develop and advance a multimodal transportation 
investment program to rebuild assets and spur job growth, it is 
imperative that significant funds for Amtrak and passenger rail capital 
investments be included in that package.
    Our list of needs is long, but each item offers the country a 
chance to invest in long-term assets with big benefits to the 
travelling public and the national economy. A few specific examples 
include:

   Construction of the Portal North Bridge and new Hudson 
        Tunnels, both parts of the larger Gateway Program that will 
        ensure that 450 daily Amtrak and NJ Transit trains can continue 
        to serve New York City from the south;

   Construction of a new Baltimore & Potomac Tunnel and 
        replacement of the 110-year old Susquehanna Bridge in Maryland 
        to improve reliability, expand service, and lower trip time;

   Construction of fleet of new or rebuilt diesel locomotives 
        and passenger cars to support Amtrak's National Network;

   Construction of track, signaling, and other improvements to 
        remove chokepoints on our host railroads or restore service in 
        key underserved markets, such as along the Gulf Coast; and

   Expansion and improvement of Chicago and Washington Union 
        Stations to improve accessibility, expand capacity, spur local 
        development and enhance safety.

    We applaud the growing consensus in Congress and in the 
Administration that the time is right for major infrastructure 
investments. We urge you to consider the many ways in which the Federal 
Government can help bring this to fruition, from direct funding for 
projects to streamlining of the environmental review process and 
removal of red tape. In that regard, I want to thank this Committee for 
including the provisions in the FAST Act that help streamline 
environmental reviews and project delivery for railroad projects. I am 
also aware of the President's recent executive order directing agencies 
to streamline and expedite high priority infrastructure projects. These 
are important steps that can help reduce time and expense for both 
freight and passenger rail projects across this country, and we look 
forward to working with our partners to identify additional steps to 
further expedite these critical rail projects.
    Additionally, public-private partnerships and innovative financing 
mechanisms should be part of this mix and will be good options for some 
projects. But if we are serious about maximizing the value of these 
investments and advancing them quickly, direct Federal funding to 
entities such as Amtrak should also play a major part of a multi-
pronged investment strategy to jumpstart the American economy. Rail 
infrastructure investments stimulate job growth in construction, 
manufacturing, and professional services. Rail cars, locomotives, 
steel, concrete, machinery, signals, and track are all sourced from 
across the Nation. Investments in these sectors can help spur the 
rebirth of America's passenger rail manufacturing and supply sector 
which largely has been dormant and overtaken by international firms.
    Amtrak stands ready to work with each of you and all of Congress to 
seize this opportunity to make smart investments and help make 
America's transportation network the greatest in the world for 
generations of Americans to come.
    I look forward to your questions. Thank you.

    The Chairman. Thank you very much.
    I would like to begin by posing a question to all of our 
panelists. As we look at major infrastructure initiatives in 
this Congress and with the new administration, I think we need 
to be strategic in how we invest in our transportation system. 
For example, the multimodal freight program in the Highway Bill 
offers dedicated funding and incentivizes investment in 
critical urban and rural freight corridors.
    I would like to know if any of you believe that that 
freight program might be a model on how we move forward? Is 
that something we could build off of so that we can look 
strategically and be focused in an infrastructure proposal?
    Mr. Rose.
    Mr. Rose. So, I think the FAST Act that you all passed, is 
undoubtedly the most important freight policy structure that's 
ever been passed up here. And so I think it has great bones for 
the future.
    Whether we think about projects of national significance, 
TIGER funding, intermodal connectors, all of those things, 
they're all vitally important. And the way we think of it, from 
the railroad industry, is that every ton of freight that we can 
take off the national highway system to create more capacity 
for the passengers and the traveling public is a ton of freight 
that you don't have to maintain. And so those individual 
categories that you listed and I listed are really important to 
facilitate things like permit reform, things like investment 
reform, investments, and how we look at those things, at the 
end of the day really achieve the goal of creating the most 
efficient supply chain in our country that we can have.
    The Chairman. Thank you.
    Dr. Lofgren.
    Dr. Lofgren. Our heritage, as a company, was long-haul 
random one-way trucking. If you look at our business today, 
close to $1 billion of our revenue actually comes in 
partnership with Matt's company and our partner in the eastern 
half of the United States where for those long distances, it's 
effective and efficient for us to put our equipment onto the 
train and to take that first and last mile and run it by road.
    So clearly, we have opportunities, and, frankly, we have 
opportunities here in this country that are beyond what exists 
anywhere else to take advantage of multimodal transportation, 
and technology and appropriate structures, where they 
interface, are really critical to effectively moving the goods 
of this country.
    I think the actions that we have taken recently are 
important. I think there's more to come. And I think that the 
challenge is, is that oftentimes the infrastructure that's 
required to connect large population centers run through rural 
areas, and so we have to keep in mind what those look like and 
how they're maintained in order to keep a connected network 
together, which is really where the competitive advantage that 
allows this country in total to participate in the economy.
    The Chairman. Thank you.
    Mr. Gurd.
    Mr. Gurd. As mentioned, we continue to have growth in the 
U.S. Gulf Coast and many of our other production facilities, so 
anything that would support safe transportation of our 
materials as we grow in order to get product to our customers 
is something that's very important to us.
    Multimodal is something that we continue to look to for 
opportunities. Where we can ship rail as our safest mode of 
transportation, we'll continue to do that; where we can't, 
we'll be shipping with truck. Multimodal is something that we 
continue to support.
    So I would say anything with regards to infrastructure that 
would help with the safe transportation of those materials we 
would be supporting.
    Thank you.
    The Chairman. Thank you.
    Mr. Moorman.
    Mr. Moorman. Let me echo what Matt said in two ways. First, 
the importance of the FAST Act for the entire transportation 
network. The second thing I would say is that as you look at 
that model and you look at the impact on the freight railroads, 
the important thing for Amtrak is we're part of the railroad 
industry, and our strength--we're only as strong as the freight 
railroads. Seventy percent of our train mileage is on freight 
hosts, such as BNSF. So I think that it's an important 
framework and something that will be good not only for the 
transportation of freight, but ultimately for the 
transportation of people as well.
    The Chairman. Thank you all very much.
    Senator Booker.
    Senator Booker. Chairwoman, Senator Blumenthal has a 
pressing obligation, so I'm going to pass my time to him if 
that's okay with you.
    The Chairman. That would be fine.
    Senator Blumenthal.

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

    Senator Blumenthal. Thank you very much, Senator Booker. I 
really appreciate that courtesy.
    I have a couple of brief questions, beginning, Mr. Moorman, 
with yourself. You may recall that I wrote you just a few weeks 
ago concerning the noise generated by Amtrak trains going 
through Stonington, and, in particular, I've been in contact 
with the town, and I understand perhaps you have been as well. 
I would like your commitment that you will work with the town 
to resolve these concerns, which are extremely pressing to the 
town of Stonington and people who live in the region generally.
    Mr. Moorman. Well, you absolutely have the Amtrak 
commitment on that. And as I wrote the town, and I think you 
saw a copy of the letter, there's a process for the town to go 
through primarily driven by the Federal Railway Administration. 
And so we will assist in any way that we can in helping the 
town through that process.
    Senator Blumenthal. I hope that that process can be 
expedited and that any sort of bureaucratic delay can be 
avoided. I know you'll give it your personal attention.
    Mr. Moorman. Yes, sir.
    Senator Blumenthal. Thank you.
    All of the witnesses may be aware that there are ports in 
Connecticut: Bridgeport, New Haven, and New London. My 
colleague from New Jersey has ports as well in his state. When 
we talk about rail, we talk about delivering freight that may 
come through our ports. Would you agree with me that increasing 
the reliability and capacity of our ports is essential to 
delivering more freight, more readily, more speedily to the 
places and people who need them?
    Mr. Rose. We would agree with that totally, Senator, and go 
on to say that our ports are really national treasures. And if 
we go back 30 or 40 years ago, trade was not that big of an 
impact to our country, GDP. Today, arguably, it represents 
almost 40 percent of our GDP, inbound, outbound trade, going 
through those specific ports.
    And when we don't have the right funding for the ports, two 
bad things happen. One is I believe you have more environmental 
concerns at the ports themselves. But you also have congestion 
at those ports. And then that freight is going to come into our 
country another way versus the most efficient port. So it will 
come through Canada, it will come through Mexico, it will come 
through another port.
    And so the ports--we've got to--and part of the programs, 
the legislation you all passed, and some of the things you're 
talking about doing, is money that can go directly to ports, 
and we're very, very supportive of that.
    Senator Blumenthal. I appreciate those very well-stated 
comments. Thank you.
    I also want to ask about Positive Train Control.
    Mr. Rose, you have really done yeoman's work in this 
regard. Do you have guidance for other railroads that may be 
behind yours in implementing Positive Train Control and perhaps 
some comments about its importance to rail safety?
    Mr. Rose. So Positive Train Control will not be the be-all/
end-all for rail safety. It is a very important risk 
mitigation, and it will, without a doubt, reduce injuries, 
fatalities, and derailments. We're very excited about the 
progress that we're making and that the rail industry is 
making. Last month, for instance, we ran 35,000 Positive Train 
Control segments at 85 percent that went through the entire 
system without having a defect.
    So we've still got another year and a half on our 
implementation schedule through 2018. We feel very, very 
confident that we will have our entire network outfitted. And 
we think that all the work that we're doing at BNSF is getting 
rid of a lot of the challenges, a lot of the problems, that 
some of the other railroads maybe that are not as far along as 
we are, that they will face, and we're working with the same 
suppliers. And so we hope that our hard-knock lessons will help 
the rest of the industry.
    The final thing is there are a lot of passenger commuter 
rails that still have not had the--they just don't have the 
money to implement Positive Train Control, and it doesn't 
escape me that the main reason that Congress passed the law in 
2009 was because of a passenger/freight accident.
    And so as a freight railroad, it may sound out of line, but 
I actually urge Congress to fund passenger/commuter rail 
funding for Positive Train Control. I can't imagine a more 
difficult train wreck for us to have to go to where we have the 
Positive Train Control on the freight rail, and the passenger 
or the commuter didn't because of lack of funding. It is 
technology that will work, and we're excited to be leading the 
charge.
    Senator Blumenthal. Thank you. My time is expired, but I 
hope that railroads around the country, including commuter 
railroads, Metro-North being one of them, will take your 
guidance seriously. Some of them may have the resources or 
access to the funds to implement Positive Train Control, but 
still have not implemented this life-saving technology, which 
is hardly novel or new. It has been around for a long time, and 
I thank you for your commitment to it.
    Thank you, Mr. Chairman--Madam Chairwoman.
    The Chairman. Thank you, Senator Blumenthal.
    Senator Inhofe.

                 STATEMENT OF HON. JIM INHOFE, 
                   U.S. SENATOR FROM OKLAHOMA

    Senator Inhofe. Thank you, Madam Chair.
    Dr. Lofgren, in your remarks, you mentioned something 
that's very obvious, and that is that a patchwork of State-
level laws negatively impacts what you're able to do, and 
that's one of the reasons way back when the National Highway 
System started, we wanted uniformity, particularly not just 
truckers, but everyone going across the country.
    Now, I was here in 1994 when we established the Federal 
standards for prices, routes, and services of motor carriers. 
Then along comes California, and they established that State 
meal and rest break requirements are in violation of this law, 
but in 2014, the Ninth Circuit said, ``no, it's not in 
violation.''
    So I would ask you, what kind of impact is this having on 
your business?
    Dr. Lofgren. Well, I think as it relates to interstate 
commerce, which we're involved in, we can have a driver who 
starts in one state, travels across multiple states, and will 
finish his day or her day in another state. And as these things 
start to creep up, with all of the best of intentions, you can 
find yourself violating one or the other because they don't 
take into account how a driver works through their day.
    And that's the challenge, and that was really what was 
driving the legislation back in 1994, was a recognition that 
interstate commerce had people moving, and it was the ability 
to freely move around this country to transport goods was 
giving us a competitive advantage.
    And so the challenge is, is that they don't recognize the 
very work that's being done and how they impact, and it 
essentially can create discontinuities in terms of doing that 
and operating consistent with the regulations.
    Senator Inhofe. Yes, and you agreed with me that you were 
probably somewhat surprised in 2014 when the Ninth Circuit came 
out with their ruling on this.
    Dr. Lofgren. Well, I think, look, when you operate within a 
state, and we have some of our drivers who operate within just 
one state or, frankly, one municipality, and in those 
circumstances, we can certainly design the work, design the pay 
programs, and ensure compliance to that and serve customers.
    And so the issue isn't one where it's operating within a 
state, it is absolutely around interstate commerce. And so 
that's the part that I guess seems strange to me.
    Senator Inhofe. It's a little strange, yes.
    And, Mr. Rose, first of all, thank you for all your help 
and cooperation in our tank car efforts. You've been a big, big 
help. The BNSF is part of the FAA's Pathfinder Program to 
perform research aimed at expanding the drone system and their 
capabilities. This is something that I successfully pushed in 
the FAA bill when we had the language--and I was actually 
aiming at pipelines, an obvious exception that should have been 
made.
    Now, do you want to share with us any kind of benefits that 
you see in that expansion?
    Mr. Rose. Sure. So we're pleased that we have a partnership 
with the FAA, and we were the first company to get non-line-of-
sight, which really opens up a whole different world for us. 
We're using it in some cases out in New Mexico to fly drones 
ahead of trains. We're using it to take videos of track 
conditions. We're using it to inspect bridges instead of having 
to hang an individual in a very precarious situation over a 
bridge to look at the structural ability of a bridge.
    So I think we're just in the first inning of seeing 
everything that is out there for us with drones. We're working 
with IBM in terms of looking at big data. We're getting just 
millions of pieces of information coming from these drones, and 
now creating the information set that will allow us, quite 
frankly, to improve our operation reliability and improve our 
safety greatly----
    Senator Inhofe. Yes, I was going to say every example you 
used, it's a matter of safety that it addresses.
    Mr. Rose. Right.
    Senator Inhofe. Not just efficiencies.
    Mr. Rose. Correct.
    Senator Inhofe. Safety. That's good. Let me--the Chair, 
when she opened up, was talking about our bill that we passed, 
the FAST Act, and the fact that we had for the first time a 
national freight program, and I was chairing that committee at 
that time. And the reason that she is bringing it up and the 
reason I want to bring it up also is because we're going to be 
starting to work right away on the next one. And since this is 
the first time we had a national freight program, I just want 
to get into the record that it's something that is really 
desired, something that's helpful.
    Any comments, Mr. Rose, or anyone else that you have on 
that program, other than what you've already responded to?
    Mr. Rose. Yes. We're very, very supportive. I served on the 
last time the surface transportation network in this country 
was studied through the SAFETEA-LU legislation back in 2009, 
and we looked at what happens. At that time, our population in 
this country, we had 312 million people. We actually modeled 
the highway network, the port network, and the railroad network 
when we get to 330 million people, when we get to 350 million 
people.
    And the only way to stay up and remain our competitiveness 
from an infrastructure supply chain as a percent of GDP is, 
quite frankly, to handle this freight. And freight is a vital 
link to our Nation's economy.
    And so I think really for the first time through the FAST 
Act, we've actually seen a freight program. It's not fully 
fleshed out. The bones, I would call it, it has good bones to 
be able to build on, like you're talking about, and we want to 
participate in terms--specifically for things like intermodal 
connection; freight collection areas; overpasses; underpasses; 
grade crossing safety, which I know Senator Gardner is very, 
very interested in; rail relocation; port enhancements; all 
these things that at the end of the day make freight move more 
efficiently because when freight doesn't move efficiently, you 
get massive congestion costs, and massive congestion of 
commuters on the Nation's highways.
    Senator Inhofe. OK. Thank you very much.
    The Chairman. Thank you, Senator Inhofe.
    Senator Young.

                 STATEMENT OF HON. TODD YOUNG, 
                   U.S. SENATOR FROM INDIANA

    Senator Young. Madam Chair, thank you for holding this 
hearing. I want to thank our Ranking Member and all our 
witnesses here today.
    Indiana is the hub for several major interstate highways. 
It's earned us the moniker ``The Crossroads of America,'' in 
addition to ``Paradise.'' You may not have heard that one, but 
it's popular back home.
    [Laughter.]
    Senator Young. Dr. Lofgren, you spoke to, in response to a 
question by my colleague from Oklahoma, the impact and 
enterprise level of this Ninth Circuit Court decision 
pertaining to the preemption of Federal law related to 
interstate commerce by state laws, and the impact it's had at a 
company level. Could you sort of translate that down to the 
worker level and the consumer level, please?
    Dr. Lofgren. Sure. So, for example, where that law really 
started was to make sure that agricultural workers were getting 
the opportunity to take their breaks and get rest. That's where 
it started, had its roots, and appropriately so.
    The challenge can be when you look at applying it the way 
that the state of California would like us to do it, and, 
frankly, the way which we do, do it now. But what it requires 
is, is that when a driver has to take a 15-minute rest break, 
our drivers are not going to pull off on the side of the road. 
It's a safety hazard. It creates issues. So they're going to 
find the best place where they can move that vehicle off, they 
can park it safely, and take their break.
    The challenge is the way that that restriction is, is that 
you have to do it like now. So it doesn't really account for 
the work. And the issue that we have is we want our drivers to 
take breaks, to do things safely, we encourage them to do that, 
and we want them to do it when it's safe, at appropriate times, 
and those regulations just put us at odds, and it frankly makes 
it difficult.
    And so just recognizing how freight moves, how the industry 
works, it's not about being safe, it's about recognizing how it 
works and making sure that the requirements align up with that.
    Senator Young. So in your estimation, this actually--this 
could decrease safety among those who work for trucking 
companies like yours, and we certainly don't want that. That's 
a correct characterization, right?
    Dr. Lofgren. That's correct.
    Senator Young. Right. Yes. Let me transition to regulatory 
reform. It's my sense, informed by conversations with people 
back home, that the need for regulatory reform, whether it's in 
the manufacturing sector or services or in the logistics 
industry, has never been greater. And in your testimony, you 
speak to the unintended sense of uncertainty within the 
trucking industry by rulemakings. I maintain concerns that in 
recent years well-intended regulations have been issued without 
a firm basis in the facts, without the supporting data.
    Some industry groups point to the inadequate data from 
Federal Highway Safety regulators when they issue proposed 
rules, such as mandatory speed limit requirements and sleep 
apnea screenings. We can all support, I know, everyone in this 
hearing and beyond, everyone throughout the country, improved 
safety standards for your industry and others, and we're 
looking for ways to remove obstacles to that happening.
    Could you speak to the need to require our Federal Highway 
Safety regulators to ground their rules in rigorously supported 
data, preventing the sort of uncertainty you spoke to?
    Dr. Lofgren. Well, certainly. And, actually, we got 
involved, were asked--I think the industry stands ready, or a 
number of people who are committed to safety, because I'll just 
give you one example. The great competitors that we have in the 
industry have said safety is not going to create competitive 
advantage, so we do benchmarking sharing best practices because 
we believe it in the industry, and therefore each of our 
company's, best interest to do that.
    I think that we recently were asked by FMCSA to help give 
real data on the day of a driver. And, I mean, we're pulling 
all of this information off the truck all of the time, and we 
said, ``Sure. Here. Here's some data.''
    I think there is a willingness, I think there is an 
awareness, and I think the way we get to the right kinds of 
answers is to engage the people doing the work with the people 
regulating the work with the people legislating the work 
because I think there are real answers.
    There is more data available today coming off of our trucks 
and interfacing with our drivers to get to the right answer, 
and I think there is a willingness and commitment that we get 
to the right answer because nothing is worth having somebody 
injured. And I think you will find my best competitors would 
line right up along with that.
    So I think there's a pathway. We just have to get on the 
pathway to do it.
    Senator Young. And I want to play a constructive role as we 
look to improve the rulemaking process, so perhaps we can work 
together in that regard.
    Mr. Rose. We would be delighted.
    Senator Young. Thank you, Madam Chair.
    The Chairman. Thank you, Senator Young.
    Senator Gardner.

                STATEMENT OF HON. CORY GARDNER, 
                   U.S. SENATOR FROM COLORADO

    Senator Gardner. Thank you, Madam Chair.
    And, Senator Young, I didn't realize that Colorado and 
Indiana shared the same slogan.
    [Laughter.]
    Senator Gardner. It's fantastic. So thanks to all the 
witnesses----
    Senator Young. Are you the crossroads, too? You're the 
crossroads, paradise part, yes.
    Senator Gardner. Right, yes.
    I want to thank you all for being here and the opportunity 
to hear what's on your mind. And just a couple quick questions 
as we've gone through and heard some of our other colleagues 
ask questions.
    Mr. Rose, 10 years or so when we saw the auto industry 
starting to see its decline, we saw a number of car carriers 
that were off the tracks and resting. And later on, we saw oil 
tankers. That was a pretty good indication of what was 
happening in the economy, so really sort of the indicator of 
what's happening, what's moving.
    Is there anything that we should be concerned about that 
you're seeing right now in business, economic leaders, 
indicators, that we ought to be aware of?
    Mr. Rose. So last year, when we ended the year, we looked 
at 22 businesses on the railroad, and only half a dozen of them 
were positive, the rest were all negative. So that's a bad 
sign. We should be at least 50-50, if not a few more being 
positive.
    I do believe there's a sense of things are getting better, 
and for us, in the railroad industry, and to some degree with 
Chris's business, it all is going to depend on consumer 
confidence and the U.S. manufacturing footprint. And the 
investments that Dow Chemical is making on the chemical coast, 
it's enormous. I mean, there are probably $150 billion being 
invested in the entire chemical coast of our country today, and 
it's due to one thing--well, several things, but one thing 
mainly, it's low natural gas prices.
    And so low-cost, affordable, reliable energy goes through a 
thread of our society, it's goes through the railroads, it goes 
through the trucking company, and it goes through the consumer.
    And so we're real bullish that with sustained domestic 
production, diversification of fuel, that the consumer is 
enjoying that and the consumer is going to keep spending money, 
because we've got a hole, as I said in my testimony, we've got 
a hole to dig out of with what has happened in the coal 
business for the railroads.
    The railroads used to account for about 20 percent of all 
their units from coal, and that's going to be somewhat less 
than 10 percent. So it's a big commodity to replace, and that's 
why we need to rely on people, partnerships we have with 
Schneider National, UPS, Federal Express, and all these 
trucking partners, to really achieve what is a great public 
policy destiny of bringing trucks, trailers, containers, to the 
railroad, taking them off the highway, preventing that highway 
damage, we have a great environmental footprint, and then 
taking them to a destination and letting them redeliver it back 
into the consumer supply chain.
    Senator Gardner. Thank you. And the issue came up in your 
testimony, or at least you answered or responded to a question, 
about the issue of crossings, the train horn rule currently 
being discussed by the Freight Rail Administration. What is the 
FRA--what is--the Federal Railroad Administration, excuse me--
what is your idea perhaps of a better balance between the 
safety of grade crossings as well as train noise?
    Mr. Rose. That's a tough situation, Senator, because in our 
country we have almost 240,000 grade crossings. On BNSF alone, 
we have almost 30,000 of them, and about half of them are non-
signalized or non-gated crossings. And I think we're early on 
to this question of quiet zones, but, unfortunately, I do think 
that we will have the unfortunate information that accidents 
per million train miles through grade crossings that do not 
sound the horn have higher incident rates of injuries and 
fatalities. And so I think we have to walk cautiously down this 
path.
    There is some new technology like directional horns that 
would be placed on the actual crossing themselves that would 
lower the decibel, instead of having a locomotive hitting the 
entire spray of the noise if you will. So those types of things 
I'm encouraged about, but we really, I think, would walk 
cautiously down before we would ask the FRA to revert the rules 
that have been in place since about 1998.
    And the challenges that communities have is that these are 
expensive technologies to put in these grade crossings. You can 
easily spend $400,000, $500,000, $600,000 per crossing to go to 
a whistle-free zone, but you've got to make a big investment to 
replace that reliability that that locomotive horn provides.
    Senator Gardner. Thanks, Mr. Rose.
    Just a couple of questions related to Mr. Moorman, I wanted 
to talk a little bit about--thank you for the Winter Park Ski 
Train and the incredible opportunities that it presents. It's 
paradise there. And if we could expand a little bit about that. 
I know we have some maintenance employees that may be moving, 
some concern was raised in Colorado about that and what that 
means for Ski Train. Obviously, Southwest Chief is very 
important to southeastern Colorado, and what that means.
    And I'm going to get one last question in here before--my 
time has already run out. Somebody mentioned the ports. I think 
Senator Nelson mentioned, or Blumenthal mentioned, the ports 
issue. In a few years, we have a situation, the East Coast and 
West Coast ports that could lead to a similar slowdown, 
shutdown, like we saw in the West Coast port just a couple of 
years ago, cost our economy dramatically.
    Maybe somebody could address the impact if that were to 
happen, what would happen to our economy if that happens again 
on the East Coast and West Coast at the same time?
    Mr. Rose. Yes, I think we saw it in 2000, we saw it again 
in 2012, where a relatively few number of ports can have an 
outsized impact to our economy, and the challenge is, is that 
those ports are not under the same labor act or same 
negotiating act like the airlines or the railroads or anything 
else are. And it's very, very unfortunate, but we literally, 
when we have a big port strike, we're changing the nature of 
supply chains in this country, and we are definitely hurting 
our commerce.
    So I would just urge that there would be a process in 
place, whether it's baseball arbitration or some sort of 
mediation, that could at least be imposed because there are a 
lot of Americans that depend on their jobs for the 
competitiveness of these ports. And these are enormously well-
paying, high-paying jobs. And when the West Coast or the East 
Coast decides to go out, the hundreds of millions and billions 
of dollars of economic impact are felt for literally weeks and 
months. And we back up trains all the way to Chicago, and it 
creates conditions that take us out of our normal pace, that we 
don't like the risk of that as well.
    The Chairman. Thank you, Senator.
    Senator Hassan.

               STATEMENT OF HON. MAGGIE HASSAN, 
                U.S. SENATOR FROM NEW HAMPSHIRE

    Senator Hassan. Thank you, Chairwoman Fischer and Ranking 
Member Booker, and thanks to all of you for being here today. 
I'm sorry I wasn't here to hear your testimony, but I will be 
well briefed on it.
    I wanted to start with a question to you, Mr. Lofgren. The 
trucking industry obviously plays a critical role in our 
country, it certainly does in New Hampshire, where we have 
about 27,000 jobs that are related to the trucking industry, 
and not only is New Hampshire paradise, we're small, so from 
1.3 million people, 27,000 jobs is quite a lot.
    We all know how hard our drivers work, often in really 
rigorous weather conditions. And some of the roads aren't very 
well kept up. You know, we've all had our infrastructure 
challenges over the last couple of decades really. The American 
Society of Civil Engineers has deemed one in nine U.S. bridges 
structurally deficient, clearly posing a risk to travelers, 
including truckers, all around our country.
    So I think we all talk about the need for more 
infrastructure investment and that it's very, very clear. It 
seems to me it's always how we do it that's the question, 
right? Some are good for tax breaks and public-private 
partnerships. Others maintain direct Federal spending will be 
needed if we're going to really develop a 21st infrastructure 
that lasts.
    As an industry expert and a business leader, do you believe 
we can reach infrastructure goals with tax cuts alone, or do 
you think we need to take an all-of-the-above approach to 
tackle this challenge?
    Dr. Lofgren. Well, you're really putting me on the spot, 
aren't you?
    Senator Hassan. I know.
    Dr. Lofgren. Well, I will tell you that the trucking 
industry recognizes that we have to pay our fair share, and we 
realize that the mechanism for doing that has to be created. 
Now, there's a lot of debate here in this city as to how that 
should happen.
    Senator Hassan. Right.
    Dr. Lofgren. I'll just go back, when Eisenhower started the 
effort that said we're going to build an interstate system that 
will connect this country, he talked about a usage fee, and it 
was really a recognition that as people gained benefits from 
this infrastructure that was put in place, they should 
contribute to both its growth and its maintenance. I would say 
our industry is more than willing to do it because it is 
fundamental to successfully and safely executing what it is 
that we do.
    So I think there is an absolute willingness for us to pay 
more. We want it to be effectively deployed to address the 
need. And I think that's why we send all of you here, is to 
figure out what's the best way for that to happen.
    [Laughter.]
    Senator Hassan. Well, thank you. Now you've put me on the 
spot, so we're even, right?
    [Laughter.]
    Senator Hassan. Well, thank you very much.
    And, Mr. Rose, I wanted to just talk a little bit about 
some of the innovations, and as I came in, you were talking 
about some of them, some of the uses of drones. As a former 
Governor, I got to appreciate the importance of technology, 
especially for particular safety functions. It is my 
understanding that BNSF has successfully been utilizing UAS or 
drone technology to assist, as you were talking about. And 
certainly the use of technology can save on your bottom line 
and increase safety.
    So I guess it's an open-ended question. What can we do here 
to make sure that companies like yours have a regulatory 
framework in place that will allow businesses to innovate and 
experiment as new technologies emerge?
    Mr. Rose. Yes, so in my statement, I talk about doing a 
full comprehensive review of the FRA, Federal Railroad 
Association, undertaking that. I could point to a lot of rules 
in the railroad industry that go back to the steam locomotive.
    Senator Hassan. Yes.
    Mr. Rose. Literally. I mean, we set up our crude districts 
on that, we set up our inspections. And so things like the 
command and control structure of railroad regulations go back 
to a time when we had steam locomotives, and here we are, fast-
forward, we've got the technology we have in these locomotives 
today now with Positive Train Control are going to totally 
change the face of that.
    So the problem is that we don't have a good process in this 
country for looking at old regulations and the cumulative 
impact on regulations. And so I think we just need to take a 
holistic view and find where technology has replaced that old 
command and control, activity-based, regulatory oversight 
structure and start peeling them off.
    Senator Hassan. OK. All right.
    Mr. Rose. And while I've got my mic open, I just want to 
comment briefly on the highway system because I've studied it a 
lot and I just--Chris is exactly right on a user-based system. 
You know, long term, the gas tax doesn't work. The hybrids, the 
alternative issues, the inflation that comes into the gas tax. 
We all have studied it, know that we've got to come up with a 
different issue.
    The ideal perfect issue is some sort of vehicle miles 
travel. We know that there are all sorts of public sensitivity 
around that. The information is already there in these cars.
    Senator Hassan. Yes.
    Mr. Rose. The information is there in our cell phones. And 
the faster we get that, I truly believe the faster we'll find a 
sustainable methodology to pay for our nation's highway, which, 
quite frankly, the railroads rely on.
    Senator Hassan. OK. Well, thank you.
    And I see that I'm over my time. I would love to follow up 
with you all separately about the issue of Twin 33s on our 
highways, and now my office will do that. Thank you very much.
    The Chairman. Thank you.
    Senator Klobuchar.

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

    Senator Klobuchar. Thank you very much, Chair Fischer and 
Senator Booker. Thank you for this important hearing. I was 
very proud of the work that was done on the FAST Act last year, 
and was one of the early Senators to support it. I think you 
know why we need it, but for me, that's a floor, and I hope we 
can do even more in the years to come.
    I did want to thank Mr. Rose. We have some rail projects in 
Minnesota in the metro area, including Southwest and Bottineau 
light rail projects. And I really appreciate the work that he 
has been doing to work with the Governor and others. So thank 
you so much.
    We had a little snow out in the western states, and I'm not 
going to get into that, but thank you for responding. I know 
it's not easy. Mr. Moorman knows that we had to stop some 
planes and some trains from running during that time.
    But I thought I would lead with just some of the issues. I 
know, Mr. Rose, that Burlington Northern makes long-term 
capacity decisions and must anticipate changes in market demand 
years in advance. This planning can be difficult. In 2016, you 
handled about 480,000 fewer units of coal than in 2015, while 
at the same time, you saw high U.S. corn and soybean export 
sales, and many from my state, contribute to an all-time record 
volume in shuttle sales and BNSF in the fall.
    How do you adjust to better accommodate these variations? 
You know, we had that one year where it was really difficult 
because of oil coming in from North Dakota and other places, 
and because of the commodities at the same time. Since then, 
things have been pretty even keeled from my perspective, and I 
want to thank you for that.
    But can you talk about how you accommodate things?
    Mr. Rose. Yes, well, it helps when you start with spending 
a lot of money. And unfortunately sometimes those massive 
investments like we made on the Northern line at $1 billion, 
sometimes markets do change, and we know that that's just the 
nature of the business that we're involved in. It wasn't 
literally 7 or 8 years ago when FERC--we were being called into 
FERC, a railroad. We were like, ``Why are we going into FERC?'' 
That's not our territory. We like FRA, NTSB, STB, you all, T&I, 
but----
    Senator Klobuchar. You're really fast with those initials. 
That's very impressive.
    [Laughter.]
    Mr. Rose. And we were being call in there because they 
thought that there was going to be a massive expansion in the 
coal business. And so, you know, that's just the nature of 
these networks.
    And I really am serious, though, we've spent enormous 
amounts of money. The industry will spend--we'll spend about 
$115 billion in this country on the highway system--that's 
Federal, State, and local--and the railroads are spending about 
$25 billion.
    So what we've got to do is to make sure that the railroads 
can continue to spend that money and then we've got to have the 
best insight by working with our customers, such as Dow and 
Schneider, to see where their needs are going to go because, as 
you know, building--once you have a market and once you have 
the money, the ability to build it out because of the 
challenges of permitting are really significant.
    And we feel like we literally, in some cases, need to be 
out 5 years, and when we think about our vision of going out 5 
years and understanding where Chris's business is going to be 
in 5 years, it's sometimes hard to see that.
    Senator Klobuchar. How about rail crossings? Any 
developments with those? I know we've worked on those together 
before.
    Mr. Rose. Yes. Again, I think that--we call it--you all 
call it section 130 money, we call it that, too. That's a good 
thing. You've increased the funding of that to I think about 
$225 million a year. Quite frankly, it probably needs to be 
closer to a billion dollars a year. That allows communities to 
draw into that, do separations, overpasses, underpasses, 
increase the level of safety, go to flashers, grade gates, 
those types of things.
    As I said earlier, we have about 250,000 grade crossings in 
this country. Probably half of them have absolutely no 
mechanized devices at all. They're traditionally out in the 
middle of the country. We call them crossbuck-protected 
crossings.
    But when you look at these metropolitan areas like 
Minnesota and Saint Paul-Minneapolis, where we start getting--
the urban sprawl is going out further and further, a great way 
to relieve congestion is to separate that crossing, but they're 
really expensive to do.
    And so I would just urge more money, more programmatic 
reform, like you all have already started to do, that will 
allow states to draw down.
    Senator Klobuchar. OK. Thank you.
    Just one quick question at the end, Mr. Moorman. I led the 
bill with Senator Cornyn on human trafficking last year, and 
then we actually, this committee, passed through a bill with 
the airlines and flight attendants to improve training of 
workers on the front end to catch human trafficking. We've been 
amazed at the cases that can come in.
    I was just wondering, I know that Amtrak is interested in 
this issue. Could you just very briefly tell me about your 
efforts? Because I've run out of time here.
    Mr. Moorman. We have done a lot of education across the 
entire company with all of our field people, exposed them to 
the issues, given them training on them. We keep a lot of 
information displayed still to make sure that information 
remains timely and that they're aware of it. I think there is 
the Blue program, which Amtrak participates in as well.
    So it's an issue that we continue to educate our people 
about and deal with, but we're very involved with that.
    Senator Klobuchar. Thank you very much. Thank you, all of 
you. Thanks.
    The Chairman. Thank you, Senator.
    Senator Udall.

                 STATEMENT OF HON. TOM UDALL, 
                  U.S. SENATOR FROM NEW MEXICO

    Senator Udall. Thank you very much, Chair Fischer and 
Ranking Member Booker. Welcome. Good to see all of you today. 
Had an opportunity to watch you from my office, but good to be 
here today in person with you.
    A WalletHub study recently ranked my home state number four 
on the list of states that could be hardest hit by a trade war 
with Mexico. In 2016, New Mexico exported $1.5 billion in goods 
across the southern border, significant transportation 
investments in Santa Teresa, for example, to help facilitate 
trade and increase economic opportunity in southern New Mexico.
    But President Trump seems to be leading us to a trade war 
with Mexico. He has proposed a 35 percent tariff on goods 
coming from Mexico. Mexico's economic minister has recently 
reported that if a border tax like that is put on Mexican 
goods, they would immediately seek retaliation.
    So I would ask Mr. Rose and Dr. Lofgren, is this saber-
rattling on trade good for the transportation industry? Would a 
trade war with Mexico be good for your businesses? And are 
other transportation companies concerned about this from what 
you're hearing from your colleagues in the industry?
    Mr. Rose. So I would like to just brag for a minute on my 
largest competitor, Union Pacific, who really is responsible 
for Santa Teresa.
    Senator Udall. You bet. You've got it.
    Mr. Rose. I sit on the Dallas fence, and we watch all of 
your state as well as Texas. And Santa Teresa is a great 
example of how a large rail logistics park can go in and create 
enormous economic commerce and create jobs for a community and 
facilitate the flow of goods across our country.
    Senator Udall. You're absolutely right on that.
    Mr. Rose. And I let my favorite customer and colleague, Dr. 
Lofgren, answer the question on the trade war.
    Senator Udall. You're going to punt.
    [Laughter.]
    Senator Udall. Mr. Rose, you're punting then on me. You're 
passing it off, the hot potato.
    Mr. Rose. We do not believe in trade wars.
    Senator Udall. The hot potato. OK. Good. That was good. You 
put it on the record, we don't need trade wars.
    [Comment off microphone.]
    Senator Udall. For the record.
    Dr. Lofgren. Yes, I know. This is an example--this is an 
example of Matt's great sophistication and time spent here in 
this fine city, how he handled that. He will pay for that one 
way or another.
    [Laughter.]
    Dr. Lofgren. Clearly, we have significant operations that 
move freight both into Mexico and out of Mexico, and clearly, 
these kinds of issues are not going to be helpful to our 
business in terms of reducing the flow of goods. Now, I know 
that a lot of our customers have significant manufacturing 
facilities that bring component parts or build component parts, 
which they need to finalize here in the U.S. So I'm pretty sure 
that it's not going to go to zero, but there is no doubt that 
if the path that we're on here continues, we'll see reductions 
in the amount of business that we're going to conduct between 
the United States and Mexico.
    Senator Udall. Yes, and the reduction in business means 
reduction in jobs, and that's what we're really worried about 
in New Mexico.
    Now, I very much support investing in infrastructure, but 
there is one massive infrastructure project proposed by 
President Trump I'm not very excited about, and that's a border 
wall with Mexico. This wall could cost $21.6 billion, and 
that's with a ``B,'' $21.6 billion. That's according to a news 
report quoting Department of Homeland Security cost estimates. 
And now we know that American taxpayers, not Mexico, will pay 
for the wall. Business leaders in southern New Mexico are also 
worried about the economic costs to their companies once 
Trump's taxpayer-funded wall is built.
    And Jerry Pacheco, President and CEO of the Border 
Industrial Association, explained that building a border wall 
would hamper cross-border partnerships. In my view, building 
this wall could send a message to foreign companies that the 
border is closed for business.
    Mr. Rose, how would a border wall impact our trade 
relationship with Mexico? And, specifically, how would a border 
wall impact the rail business in places like Santa Teresa along 
the southern border?
    Mr. Rose. I'm really not sure how a border wall would be 
impacted. I think, you know, right, wrong, or indifferent, 
we'll probably haul a lot of the product going into if there is 
a wall being built. But I really don't know how that wall will 
impact our business. We, quite frankly, haven't thought a lot 
about it.
    Senator Udall. Yes. One of the things that I'd want to put 
on the record, this area that I'm talking about that Jerry 
Pacheco--many people think that Albuquerque is our biggest 
economic area. It's actually the border area, where you're 
across border, have huge amounts of activity, and then in New 
Mexico, it's growing, it's booming, and they're very worried, 
they're very worried about it. So it's something that concerns 
me a lot. And the whole issue here is jobs, as you know.
    Could I ask one more question? I want to get to Amtrak, 
which we love in New Mexico. You know, all the Boy Scouts, 
whenever you run into Boy Scouts around the country, they're 
headed to New Mexico on Amtrak to go to the Philmont Ranch, 
premier area to go. So we want to make sure that Amtrak 
continues running. And, as you know, New Mexico, Kansas, and 
Colorado have worked together successfully to get TIGER grants 
that help support track safety improvements for the Southwest 
Chief line. Do you agree with me that rail projects should 
continue to be eligible for TIGER grant support?
    Mr. Moorman. Well, absolutely. And I think that the model 
you cite is a classic example of communities and states 
understanding the importance and desirability of passenger rail 
transportation. We see that in a lot of other parts of the 
country as well. So I certainly agree that the accessibility of 
TIGER grants is an important tool for them to use.
    Senator Udall. Great. Thank you very much.
    Thank you, Madam Chair, for your courtesy.
    The Chairman. Thank you.
    Senator Udall. I really appreciate it. Take care.
    The Chairman. Thank you, Senator.
    Senator Duckworth.

              STATEMENT OF HON. TAMMY DUCKWORTH, 
                   U.S. SENATOR FROM ILLINOIS

    Senator Duckworth. Thank you, Madam Chair, and thank you to 
the Ranking Member, for convening this important hearing on the 
Nation's multimodal transportation system. You know, the people 
of Illinois sent me here with a clear message: Americans are 
ready, willing, and eager to rebuild our Nation's 
infrastructure.
    Whenever I travel across Illinois, whatever else is 
happening that's dysfunctional in this country, one of the 
things that unites people, whether I go into a rural community 
or an urban center, is an agreement that we need to finally 
come together and work to modernize our country's aging roads, 
railways, and bridges.
    It doesn't matter where I go, whether I am in El Paso, 
Illinois, or whether I am in Chicago, Illinois, people are 
deeply concerned. They're ready for us to place a big bet on 
America, and they want to invest in American workers and 
American companies as part of a multiyear rebuilding effort for 
our infrastructure using American workers, using American steel 
in particular.
    Mr. Rose, as BNSF knows well, any serious efforts to 
upgrade our Nation's freight rail system must prioritize 
Illinois. Our great state is proud to be home to more than 
9,000 miles of railroad tracks and the 41 railroads that travel 
on them. Chicago is the busiest rail hub in America, and East 
St. Louis is another major rail center. Millions of tons of 
freight rail travel across Illinois every single year. And, in 
fact, we're almost like the arteries in your body when it comes 
to the railroad, and if you just have one artery that gets 
clogged, the entire Nation does suffer.
    I'll give you an example. Right now, today, a train can 
ship freight from Los Angeles to Chicago in under 48 hours, 
closer to about 35 hours, but it takes that same train 30 hours 
just to get from one side of Chicago to the other. And that 
reverberates up and down the supply chain.
    So, Mr. Rose, would you agree with me that this status quo 
must be improved and upgrades increasing rail capacity and 
reliability to combat congestion in Illinois would both improve 
supply chain efficiency and strengthen our entire economy?
    Mr. Rose. Senator, when we think about Chicago, it really 
is the textbook example of a project of national significance. 
All freight railroads, six of the seven big-class ones, touch 
Chicago, Amtrak, Metra, hundreds and hundreds of passenger 
trains. And we agree with you about Chicago really being at the 
epicenter of the entire freight railroad network. We have 
looked at it over the years. I will tell you I share many of 
your frustrations.
    There is a significant effort, as you know, CREATE. It has 
made progress for improving the connectedness of the freight 
rails. The next stage of it is additional funding. Projects 
like the 75th Street overpass we know are vitally important to 
the passenger commuter side of Chicago. We will continue to be 
supportive in those efforts. But if we were going to place one 
big bet on a project of national significance for the freight 
railroad industry, it would come back to Chicago.
    Senator Duckworth. Thank you. I thank you for highlighting 
CREATE. Could you describe a little bit, just take a moment to 
describe, how the FASTLANE grant for this vital project and--
well, FASTLANE grants for both the 75th Corridor Improvement 
Project, as well as the Merchants Bridge project, would be 
absolutely vital to the transportation of goods and services as 
you were mentioning?
    Mr. Rose. Yes. So, again, I think that the FASTLANE program 
has great bones. It's going to need more funding for the first 
time, multimodal projects, intermodal projects. The Merchants 
Bridge is a great example of where that money could be applied 
to that, lower the financing costs of that. Chicago, CREATE, a 
lot of multimodal projects in Chicago that would be eligible 
for FASTLANE.
    So we're real excited about the program. I know it's going 
to come under funding constraints, but, again, I said earlier, 
I think for the first time ever what you all have done is by 
really highlighting the necessity of a freight program and 
having those freight plans, will give people a better pathway 
to justify the funding that you all will eventually have to 
come up with.
    Senator Duckworth. Thank you.
    Mr. Moorman, do you want to talk a little bit about 
Amtrak's role in this? Because as the Merchants Bridge is 
concerned, Amtrak also goes over that bridge and I believe has 
agreed that we need to really prioritize the improvements 
there.
    Mr. Moorman. We have. We have a very strong interest 
obviously in the Merchants Bridge and in the Chicago area as 
well. Amtrak is a participant in CREATE and certainly has 
stepped up I think to support all of the freight industry in 
Metra, in the 75th Street project, the application for the 
grant there.
    Anything, as I've said before, anything that improves the 
rail infrastructure of this country in those places where 
Amtrak operates is something that we strongly support and 
believe in and want to work with you and the Congress as well 
as our partners in the freight industry to further those 
initiatives.
    Senator Duckworth. Thank you. Thank you, Mr. Rose.
    Thank you, Madam Chair.
    The Chairman. Thank you.
    Senator Booker.
    Senator Booker. Thank you very much, Chairman.
    Mr. Moorman, you heard me in my opening comments talk about 
the Gateway chokehold, and obviously we have two tunnels there, 
about 107 years old, that probably, given on whose estimates 
you look at, have 10 to 15 years left in life. The last 
Congress, the administration ranked that as like the number one 
infrastructure urgency in the United States of America. What's 
going to happen if the Federal Government doesn't continue what 
we've seen in the last Congress and really step up to partner 
on the project?
    Mr. Moorman. Well, we're already seeing increased 
reliability issues through the tunnels, primarily are driven 
largely by the recent flooding of Hurricane Sandy, which 
flooded not only the two tunnels under the Hudson, but the four 
tunnels under the East River, and they are creating lots of 
electrical problems, signal problems. Those problems will just 
continue to get worse. And at some point, if it's 10 years or 
15 years, we'll have to shut one of them down.
    Senator Booker. And what's the economic impact of shutting 
one of those tunnels?
    Mr. Moorman. Well, it's extraordinarily difficult to 
calculate. If you look at our peak service through those 
tunnels in the morning and the evening, we put about 24 trains 
an hour through them.
    Senator Booker. You're moving literally hundreds of 
thousands of people a day.
    Mr. Moorman. Absolutely. There are several hundred thousand 
people a day. Once one tunnel goes out, and it would go out for 
well over a year to rebuild, you're down to six trains an hour, 
and it would be nonfunctional.
    Senator Booker. Am I overly dramatic to say you would have 
a traffic ``Armageddon'' in that region?
    Mr. Moorman. You would. No, I don't think it's 
overdramatic. It would freeze that side of the river I think in 
terms of people getting in and out of the city.
    Senator Booker. Yes. So I'm a little frustrated because I 
think that in the beginning of your remarks, you talked about 
bringing business sense and practices, and I really just--I'm 
excited about your leadership with that.
    But one of the biggest problems it seems is that your 
funding is not in any way regular or reliable and it's not a 
part of the overall Transportation Trust Fund. Could you 
address the challenges that that brings to the way you're 
trying to run this Amtrak like a business?
    Mr. Moorman. Well, it obviously creates a lot of problems. 
Now, but one thing let me applaud the Committee for is that the 
FAST Act, under the provisions of the FAST Act, the 
authorization is at least for a known amount of money over the 
next few years, so we can make better plans as a result. The 
only issue with that is that while that's sufficient to keep 
the network certainly operating and to do some modest 
improvements, these major projects that you're describing are 
far beyond the funding that's committed to Amtrak, and that's 
where my real concern comes in about the Northeast corridor and 
about the long-term needs we have in terms of locomotives and 
rolling stock. So----
    Senator Booker. Mr. Moorman, I hate to interrupt you, but 
anytime you want to applaud this subcommittee, you should go 
right ahead and do it, literally or figuratively.
    [Laughter.]
    Senator Booker. Just for the Committee as a whole--and, Mr. 
Gurd, I really feel bad, like you have not been grilled 
sufficiently in this hearing, and so I'm going to allow you to 
answer this as well--direct government investment in 
infrastructure, a lot of talk about infrastructure by our 
President and by Congress.
    I believe that you need to have a direct investment by 
government in addition to like we did through the FAST Act, 
making the RRIF program and other loan programs.
    How do you feel about direct government investment? Is that 
necessary in terms of the economic growth strategy for our 
country?
    Mr. Gurd?
    Mr. Gurd. Thank you.
    Senator Booker. Yes, sir.
    Mr. Gurd. I would say so, yes. With regards to 
infrastructure and our ability to be able to ship products to 
our customers, every day customers are continuing to get more 
demanding in what they need, when they need it, and our ability 
to connect with our carriers. Our ability to make sure that we 
get products to get products to our customers safely and on 
time when they require them is something that is very important 
to us and our ability to be competitive. And being able to have 
the infrastructure in place in order to make sure that that 
happens as it comes outside of our fence line is extremely 
important.
    Senator Booker. So you would be in support of direct 
government spending on infrastructure?
    Mr. Gurd. Yes.
    Senator Booker. And, Dr. Lofgren, the man with more degrees 
than the month of July, sir, yes or no, when an infrastructure 
package comes down, would you like to see a big robust part of 
that being direct government spending?
    Dr. Lofgren. Yes, I would.
    Senator Booker. And, Mr. Rose, by any other name?
    [Laughter.]
    Mr. Rose. Yes, so if you think about our nation's 
infrastructure, it's really a weapon of competitiveness for the 
U.S. worker.
    Senator Booker. I love that, a weapon of competitiveness.
    Mr. Rose. Yes. And investments in this network are going to 
enable that worker to be more competitive. I'm fine with direct 
government investments with the caveat that we don't change the 
balance of modal equity. OK? What you should want--I'm sorry, I 
interrupted.
    Senator Booker. No, I was just saying modal equity meaning?
    Mr. Rose. Between the highway and the railroads. OK? We pay 
for 100--99.3 percent of our own infrastructure in the railroad 
industry, and clearly I hope I've made the point today, what 
you should want is for the next ton of freight that's moved on 
the surface of this network in this country, that somehow it 
gets off the highway and gets put to the railroad industry 
because of our efficiency, our environmental impact, and the 
fact that then you don't have to pay for that next road 
pavement on that highway system.
    And if we lose the economic tilt, if you will, of how these 
networks are funded--and I'll say Chris has been--he has 
advocated that the trucking industry needs to pay their fair 
share, and as long as we go down that pathway and that the 
trucks continue to pay for their use of the highway network, 
it's great.
    If we just move away from this user pay system and end up 
where all the money that goes into the Highway Trust Fund is 
paid through general revenues or some of the creative things 
that had to get passed in this last bill, then what will happen 
over time, because you'll be subsidizing the railroad's largest 
competitor, and our largest customer, and what will happen over 
time is that you'll get more and more trucks to the highway 
network, and I don't think that that's what anybody in this 
town wants.
    Senator Booker. No, sir. I appreciate that. And I want the 
record to show that as I looked at Dr. Lofgren's face, that he 
took no umbrage to that comment whatsoever, none.
    OK. And I am over my time. I only have one more sort of 
question for us, but I've learned to defer to my senior Senator 
and the chairperson of this committee.
    The Chairman. No, go ahead.
    Senator Booker. Go ahead. OK.
    So I just want to say first of all that, Mr. Rose and Dr. 
Lofgren, you guys are really leaders, amongst the leaders, in 
industry when it comes to safety issues, and I'm just grateful 
for the commitment you both have made, Mr. Rose, you all are 
ahead of schedule in your industry for putting in Positive 
Train Control, and I'm really grateful for the sincere effort 
you all are making to meet the Congressional mandates, but 
also, as you said in your testimony earlier, that it's not a 
be-all and end-all to train safety, and you all are innovating 
in ways to find other ways to ensure safety, and that means I 
speak at least as one Senator that really appreciates that 
work.
    Dr. Lofgren, the same thing goes for you all. You know that 
I'm a guy that has been harping on truck safety, you may have 
heard that, sir, but I just want to say that you and your 
company, really again, amongst industry leaders and what you're 
doing to try to lead in safety innovations and technology, and 
I'm one Senator, I just want to say publicly, I am deeply 
appreciative of the work that you all do. I know how seriously 
your company takes it. So I really want to have that on the 
record.
    I do, though, just have the concern, Dr. Lofgren, if I can 
focus, on what the trend is out on our highways. And, again, 
the preliminary data that's come from the National Safety 
Council released in a report found that these preliminary 
estimates, as many as 40,000 people died just last year in 
vehicle crashes, it's yet another year where we're seeing a 6 
percent increase over 2015 and a 14 percent increase over 2014. 
That's a 2-year increase, the most dramatic 2-year increase in 
50 years.
    And I say that to say--and I talk to truckers now all the 
time and they rightfully point out that cars act whacky around 
trucks and often are the ones causing the so-called truck 
accidents. So I don't want to pin this on the trucking 
industry, the level of carnage we're having on our highways, 
but, as someone who I afford a lot of respect to because I know 
how seriously you take this, could you just give me just some 
thoughts that you have about, how can we deal with what I think 
is a major crisis, one of the leading causes of death in our 
country, destroying so many families?
    I'm wondering if you have some thoughts and input and 
advice. That's really my last request, my last question here, 
if you could just sort of talk to me specifically about what 
your industry could be doing or should be doing to make us more 
safe out there, because the gravity of the carnage and injury 
and loss of life, loss of property, is just stunning.
    Dr. Lofgren. Do you want me to answer?
    Senator Booker. Yes, sir. I'm done.
    Dr. Lofgren. OK. You are right. With forward-facing 
cameras, some of the video that we can show you of behaviors of 
the motoring public, you would think we had maybe created a 
comedy. It's not comedy, but the reality is, is that if you 
look at vehicle miles traveled on the road today, the real 
growth is in passenger vehicles versus trucks. That's not to 
say that we haven't at times really messed things up and very, 
very horrific things have happened.
    What I find interesting, as we think about putting in 
regulations, the reality is, is if you look at the dramatic 
improvement in rear-end accidents that we've had at the company 
since we have put the OnGuard technology in, it speaks for 
itself. The reality is, is that there is no requirement that a 
truck coming off the manufacturing line today, Class 8 vehicle, 
have that equipment on it as standard.
    So when you look at some things where you say there are 
regulations that could have massive impact, the reality is, is 
that you cannot reverse engineer that back into a piece of 
equipment, it has to be a new vehicle.
    So I think some of the things like that, I mean, there are 
regulations that I don't think are productive that we operate 
under in the industry, that would be one that there is so much 
evidence to say this needs to be a part of what is coming on 
and hauling freight today.
    So I think there are things that are going to emerge over 
time where there ought to be incentives to get people to do 
that and to invest the incremental money because of the 
paybacks. So that would be one area where I think there is 
opportunity.
    Senator Booker. So let me just say thank you because the 
data in your testimony was stunning about the rear crash, and 
that you all are doing that, not as an industry mandate, but--
--
    Dr. Lofgren. And there are others of our competitors who 
are doing it as well, so I don't want to stand up and say we're 
the only ones.
    Senator Booker. But now at the risk of being kicked by my 
Chairperson here, I do want to note for the record that an 
industry leader just called for some more regulation. Thank you 
very much.
    [Laughter.]
    Dr. Lofgren. The right regulation.
    Senator Booker. The right.
    The Chairman. Thank you, Senator Booker.
    And I would like to thank the panel for being here today. I 
think this has been an important hearing where we talk about 
moving people and moving freight, seeing our economy grow, 
provide jobs. We move America, but as you can tell from the 
questioning, there are differing views on how we're going to do 
that. And we need, I believe, to look outside the box.
    Earlier--I'm going to go on since the Ranking Member went 
on for a while.
    [Laughter.]
    The Chairman. I think earlier we heard about the issues we 
have with the fuel tax. It is not sustainable. I would propose 
to you that it hurts lower income people. It, in many cases, 
can limit job opportunities. But as we move to new 
technologies, a fuel tax is not going to grow our 
transportation system, in my opinion.
    So I think it is important that we look outside the box. 
And I thank you, Dr. Lofgren, for being willing to step up and 
assume more of the cost of roads, but that's hard for a trucker 
who has one truck and is trying to take care of his family. I 
heard that when I was in New Hampshire. There are many small 
truckers in that state, and they were worried about it.
    I come from a state that has small truckers, but also has a 
number of very, very big companies, and I have always 
appreciated the support of truckers when I am trying to work on 
financing for infrastructure at the State level and now at the 
level here that we're looking at nationally. So I thank you as 
we move our freight.
    Mr. Gurd, I appreciate the consideration that you have to 
give for transporting materials that are needed for our economy 
but are also difficult to transport, and you do that with care 
and you do that with a sense of responsibility to your drivers, 
to the public, to our country. So I thank you.
    And, Mr. Moorman, when you are moving people in this 
country, especially in the Northeast Corridor, where my Ranking 
Member, he just wants more and more and more----
    [Laughter.]
    The Chairman--but we do appreciate the services that you 
provide as well. And I think there should be a way that we can 
provide for the needs that you face in a creative way in the 
future.
    And, Mr. Rose, I know that Ted Cruz claims you in Texas, 
but we claim Burlington in Nebraska. I have family ties to 
Burlington. As I think if you go back far enough to the people 
in Nebraska, somewhere in our history, our family history, 
there is a connection to a railroad. You folks have grown and 
built this country.
    So I thank you all for being here today. I appreciate it.
    The hearing record will remain open for 2 weeks, and during 
this time, Senators are asked to submit any questions for the 
record. Upon receipt, I would ask the witnesses to please 
submit your written answers to the Committee as soon as 
possible.
    With that, I thank you all, and the hearing is adjourned.
    [Whereupon, at 4:22 p.m., the hearing was adjourned.]

                            A P P E N D I X

    Response to Written Questions Submitted by Hon. Deb Fischer to 
                            Matthew K. Rose
    Question 1. Mr. Rose in your testimonies you each discussed reforms 
in the FAST Act that streamlined the environmental review process and 
removed some of the red tape on routine infrastructure and asset 
maintenance. Would you please elaborate on the types of challenges your 
railroads face when attempting to build or improve its infrastructure? 
Are there ways that Congress can improve on the work within the FAST 
Act?
    Answer. Congress has recognized the difficulty of project 
permitting, including projects related to railroad operations, which 
the rail industry appreciates. There are areas where additional 
Congressional action would be helpful, in both the railroad-specific 
context and in ways that benefit all permitted projects. Congressional 
oversight of the implementation of items that Congress has already 
addressed is also important.
    As noted in my testimony over the past few years, facility 
expansion on the West Coast for both BNSF and our customers has been 
severely challenged by the regulatory process and environmental 
advocacy groups opposed to facility construction. In some cases, local 
permitting processes are used as a means to target and prevent 
interstate transportation, particularly of fossil fuels. Under the 
Interstate Commerce Commission Termination Act (ICCTA), many state or 
local regulations are preempted with respect to rail transportation--
including zoning and land use regulation, construction and 
environmental permitting of rail facilities and regulation of railroad 
operations. When it comes to interstate commerce, Federal agencies, 
including the STB, must not be reluctant to intervene and provide clear 
direction that using such regulations to block these projects is 
preempted. Strong direction from Congress could ensure that important 
rail projects are not shelved or abandoned altogether, and that the 
flow of interstate commerce is not impeded.
    An area of needed reform common to many projects, including 
railroad projects, relates to reviews under the Endangered Species Act. 
In some cases both the U.S. Fish and Wildlife Service (USFWS) and the 
National Marine Fisheries Service must be consulted before a permit or 
clearance can be issued. Neither agency has a speedy consultation 
process. It is imperative that Congress consider time limits after 
which, if the Service cannot articulate an adverse impact on a species 
that is likely to occur from the project, then the project is deemed 
``not likely to have an adverse effect'' by the Service under the 
Endangered Species Act. Many times, particularly for most fish species, 
the Service knows the appropriate time windows when work should and 
should not proceed, and knows the best management practices that will 
protect the species of concern. However, instead of promulgating 
regulations or agreements that would streamline projects that agree to 
use the standard fish windows and best management practices, the 
Services go through long, laborious processes to recommend the same 
windows and practices. In some cases, we have seen the Services use 
this process to make comments regarding the lead agency's scope of 
review under NEPA.
    Lengthy consultations between Federal agencies are also a challenge 
under section 404 of the Clean Water Act. The process for the U.S. Army 
Corps of Engineers (USACE) to initiate a consultation with the USFWS to 
examine impacts to fish and wildlife needs to be streamlined and 
expedited. There should be a hard deadline for the USACE to initiate 
the consultation process.
    When it comes to mitigating environmental impacts of projects, we 
concur with the USACE that mitigation banks and in-lieu fee programs 
are usually the right answer from an environmental standpoint. However, 
the process that allows a person or group to create a mitigation bank 
is overly burdensome. There are some watersheds where no banks are 
available, and this is at least in part because of the onerous, years 
long process that must be undertaken before a bank can sell credits. 
Congress should encourage the USACE to study its process and streamline 
it to the maximum extent practicable for both public and private 
mitigation banks.
    Congress can make additional improvements to the FAST Act to ensure 
the timely delivery of much needed infrastructure projects.

   Statutorily prioritize project permitting for international 
        commerce.

   Review the scope of state implementation of Federal statutes 
        to ensure consistency with Federal regulators for projects in 
        interstate commerce.

   Expand Federal Communications Commission regulatory 
        streamlining to expedite the deployment of technologies that 
        improve safety and efficiency in the railroad industry.

   Expand FAST-41 to railroad projects.

     The FAST Act (under Title 41 or ``FAST-41'') creates a 
            new initiative to expedite permitting and environmental 
            review for complex infrastructure projects. The FAST-41 
            provisions make fundamental changes in project delivery by 
            setting timetables for review which can be modified under 
            limited circumstances, creating accountability through 
            performance metrics, and limiting judicial review. 
            Unfortunately there are a number of limitations on projects 
            that are covered under FAST-41, including rail projects. 
            Rail projects are increasingly complex, with multiple 
            agency reviews and uncertain timelines. The benefits of 
            this new permitting structure should also include large 
            rail projects.

   Require that permitting authorities at all levels of 
        government use technology for streamlining.

   Public and Private Geographic Information System tools are 
        widely available and make relevant, scientific, environmental, 
        cultural and other data easily accessible to facilitate project 
        siting. Congress should statutorily prioritize the use of GIS 
        tools for NEPA analysis instead of costly on-the-ground studies 
        to help reach conclusions in a timely manner.

    Congress should exercise careful oversight of the FAST Act rail 
project delivery/permit reform provisions to ensure they are 
implemented in a fashion to deliver their intended efficiency benefits. 
As I covered in my testimony, the FAST Act directs the U.S. DOT to 
apply, to the extent feasible, previously enacted highway-related 
environmental streamlining to railroad projects. The rail industry 
stands ready to work with the Department to determine how best to apply 
these roadway project efficiencies to railroad and intermodal projects. 
The FAST Act also mandates that the DOT, in consultation with the 
Advisory Council on Historic Preservation (ACHP), establish a Section 
106 exemption for railroads rights-of-way consistent with the exemption 
currently in place for the Nation's Interstate system. At the time of 
transition to the new Administration, the Department had not completed 
action on a draft proposal for submittal to the ACHP. The Department 
had also began but did not conclude the process called for in the FAST 
Act to survey the Federal Railroad Administration's use of NEPA 
categorical exclusions and a rulemaking for new exclusions to 
facilitate rail projects. Finally, the Act exempts from Section 4(f) 
review the use of railroad and rail transit lines that are in use or 
that were historically used for the transportation of goods or 
passengers.

    Question 2. Mr. Rose, in your written testimony, you mentioned that 
FRA data indicates a drop in employee injuries by a remarkable 80 
percent from 1980. At BNSF, what would you say are the major elements 
of this drastic increase in safety on our Nation's railroads? And, as a 
follow up, how is technology and innovation enhancing safety on our 
Nation's railroads?
    Answer. Government data shows that for the freight rail industry, 
the train accident rate has fallen 43 percent since 2000 and 79 percent 
since 1980, and the rail employee injury rate has fallen 46 percent 
since 2000 and 83 percent since 1980. Continued robust investment in 
infrastructure has played a direct role in this success, along with the 
deployment of technology and safe operating practices, which involve 
rules compliance and a commitment to safety by our employees. According 
to the Association of American Railroads (AAR), the industry has spent 
on average close to $25 billion annually over the last five years and a 
total of $600 billion since 1980. Since 2000, BNSF has invested more 
than $55 billion in its network, and our infrastructure is in the best 
shape it has ever been to meet customer needs and operate safely.
    While railroading has become extremely safe, it remains a very 
unforgiving environment. The scope and complexity of the Nation's rail 
operations, operating over a 140,000 mile outdoor production line, 
means that infrastructure and equipment will sometimes fail or that 
human error can occur. In response, BNSF employs a broad-based risk 
reduction framework to reduce risk in all aspects of our operations. 
Infrastructure investment, intense focus on fostering a safety 
``Culture of Commitment'', along with risk countermeasures including a 
combination of critical safety processes and technology, have produced 
tremendous safety results. Our vision and ultimate goal is to operate 
completely accident and injury free and so we recognize and are 
committed to the fact that there is more work to be done.
    BNSF recognizes that effective safety programs include the 
engagement of every employee. BNSF's employee safety training 
initiative, ``Approaching Others About Safety,'' (AOAS) is a training 
program for all BNSF employees that focuses on confident and effective 
peer interaction. AOAS launched in 2013 and is the single largest 
training program BNSF has ever undertaken. The idea is simple: If you 
care about someone, you'll approach them when you see them working 
safely and let them know. At the same time, if you see them putting 
themselves at risk, you will approach them and recommend a safer way. 
AOAS was created with the involvement of many BNSF employees, including 
focus groups with union employees within our Transportation, 
Mechanical, Engineering, Intermodal and Telecom groups. The program 
encourages attention to behaviors that, when done safely, reduce the 
level of risk. Training focuses on the exposures that result in 97 
percent of injuries, specifically the critical or primary exposure 
areas, including: line of fire/release of energy, pinch points, 
ascending/descending, walking/path of travel, and life-saving 
processes. We believe Approaching Others has fundamentally changed our 
safety culture.
    Technology continues to play an important and growing role in 
improving safety. BNSF and the freight rail industry deploy a range of 
safety technologies and operational innovations across the North 
American rail network, a considerable amount of which was developed in 
cooperation with the Transportation Technology Center, Inc. (TTCI) in 
Pueblo CO, and in coordination with the FRA and backed by support from 
the U.S. Congress. These technologies include:

   Wayside detectors that identify defects on passing rail cars

   Wheel profile monitors which use lasers and optics to 
        capture images of wheels

   Wheel Impact Load Detectors (WILD), which measure vertical 
        wheel forces on the rail. Algorithms help identify wheels that 
        have experienced a recent traumatic event and wheels with low-
        level long-term defects that could negatively affect the 
        bearing or wheel life and rail health over time.

   Trackside detector systems that use ``acoustic signatures'' 
        to evaluate the sound of internal wheel bearings

   Wheel temperature detectors, using infrared technology, to 
        identify wheel bearing fatigue

   Rail inspection systems using induction or ultrasonic 
        technology to detect internal flaws in the rail

   Track geometry vehicles that use sophisticated electronic 
        and optical instruments and ground-penetrating radar to monitor 
        all aspects of our track infrastructure

   Machine Visioning systems which use camera-based technology 
        to identify defects like worn truck components, worn brake 
        shoes and missing bolts in the coupler carrier plate. These 
        systems can identify defects of equipment in motion at over 70 
        mph, day or night, rain or shine.

   BNSF is also now in its third year of piloting Unmanned 
        Aircraft Systems (UAS)--drones--for visual right of way and 
        supplemental track inspections in a variety of conditions. We 
        are one of three companies partnering in the FAA Pathfinder 
        Program which will allow BNSF to perform extended track 
        integrity flights.

   Positive Train Control (PTC) is an unprecedented ``system of 
        systems,'' bringing together advanced analytics, wireless 
        communications networks, GPS, trackside and locomotive hardware 
        and software and a back office computer system. BNSF is 
        committed to the technology and will ultimately invest more 
        than $2 billion to deploy it, which will be important to help 
        prevent the extremely rare but potentially catastrophic human 
        error-caused accidents, like head-on collisions.

    The future potential for technology's role in improving safety 
remains tremendous provided we have a regulatory environment that 
encourages innovation. Policy makers and the FRA should support 
movement toward a more balanced, collaborative and transparent approach 
to a performance-based regulatory paradigm, one that focuses on safety 
outcomes and not necessarily the specific means by which to achieve 
them. The old ``command and control'' paradigm simply cannot keep up 
and doesn't make sense in the modern and rapidly evolving world of 
technology and data analytics. The rail industry will continue to 
innovate to support our culture of safety and sound operating 
practices--ensuring railroads can continue to earn the revenues 
necessary to invest adequately in infrastructure, maintenance and 
technology will be one of the most significant things that Congress can 
do.

    Question 3. As we enter into a new administration and a new 
Congress, how can we improve the regulatory process at agencies to move 
towards outcome, or performance-based regulations with better data? As 
you are aware, in the FAST Act, I authored measures to reform the 
Federal Motor Carrier Safety Administration to ensure more 
participation and a stronger cost-benefit analysis. Are there specific 
changes you would hope to see across the DOT to improve the regulatory 
process?
    Answer. My written testimony outlined near-, mid- and long-term 
improvements that Congress, the Administrator and railroad safety 
stakeholders should consider. While the underlying framework of 
regulations between the FMCSA and the FRA are different, the regulatory 
process improvements in the FAST Act informed aspects of those 
recommendations.
    Neither Congress nor the FRA has taken a comprehensive look at the 
cumulative impact and effectiveness of the body of railroad safety 
regulation, or how safety and operating technology can be incentivized 
by regulatory processes. In particular, moving towards measuring 
outcomes, rather than activities, guided by better data would represent 
a change not only for railroads, but for regulators. Moving to more 
data driven oversight of outcomes does present certain risks for rail 
carriers, if not implemented cooperatively and if data is not 
adequately protected.
    Many other industries in this country and across the globe now 
participate in the performance based regulatory model. The foundation 
of this model is a mature industry with a good safety record and 
appropriate incentives to be safe, like adequate returns and the 
ability to easily implement technologies. There are a multitude of 
internal and external incentives for railroads to operate safely.
    We believe that the cost and efficiency of regulatory compliance 
can be improved, and that the safety gains we have achieved can be 
enhanced. That is always our goal; it is part of our corporate vision 
and drives how we operate. We look forward to working with the 
Committee on the details of its proposals, and thank you for opening 
the discussion.
                                 ______
                                 
   Response to Written Questions Submitted by Hon. Maria Cantwell to 
                            Matthew K. Rose
    Question 1. Support for Freight Funding

   Should there be robust Federal freight investment in a 
        future infrastructure package?

   Do you support lifting the current $500 million cap on 
        multimodal projects in the FASTLANE program?

   How have state freight plans and the National Freight Plan 
        guided BSNF's capital investment decisions?

    Answer. The Fixing America's Surface Transportation (FAST) Act is 
an important step in developing a national freight policy structure, 
and can serve as a good template to build upon for any additional 
infrastructure legislation that Congress might consider in the future. 
With one exception--it continues the regular and sizable infusion of 
General Funds into the Highway Trust Fund (HTF). This cannot continue 
in the future because it not only puts necessary transportation 
investments in budget competition with many other Federal funding 
priorities, it represents a national freight policy of subsidizing one 
mode over another and incentivizing the very road and bridge damage 
that Congress struggles to find the funding to mitigate.
    Job one of a Federal highway program is to reinvest in the 
maintenance of the existing system and bring it to a state of good 
repair. Basic maintenance and operations of key infrastructure are 
critical to capacity and fluidity. Congress, the Administration and the 
users of the highway network need to be working aggressively now to 
strengthen the user based foundation of the HTF. This key principle has 
experienced significant erosion as HTF revenues have failed to keep up 
with investment needs and have been supplemented with general taxpayer 
dollars and other non-traditional funding sources.
    Fortunately, the FAST Act contained provisions for demonstrating 
alternatives to the gas tax in a number of states and there are pilot 
programs underway. However, as the U.S. Department of Transportation 
(DOT) and states oversee how the private sector develops automated 
vehicle development and testing, driver assisted trucks and platooning, 
and even the requirement to maintain electronic logs for trucking 
fleets, they should explore how these technologies will contribute to a 
future with sustainable, user derived fees for maintaining the 
highways.
    One of the most notable elements of the FAST Act is the ``Fostering 
Advancements in Shipping and Transportation for the Long-term 
Achievement of National Efficiencies'' (FASTLANE) grant program. This 
program is intended to help states, localities, and other entities 
overcome funding barriers to complete projects of national or regional 
significance. The program is funded at $800 million annually, 
increasing to $1 billion annually by 2020. Eligible projects must be 
highway freight projects on the National Highway Freight Network, 
highway or bridge projects on the National Highway System (NHS), 
intermodal facilities or railroad grade crossings, although intermodal 
projects are capped at a total of $500 million over the life of the 
bill. It would be beneficial to the national freight system to lift the 
$500 million cap on multimodal projects in the FASTLANE program, given 
that a significant amount of funding is generated by the General Fund. 
The competitive FASTLANE grant program should be just that, 
competitive. While there are a finite number of public-private 
partnerships in the freight rail segment, the demand for grants is 
strong as many communities seek to work with railroads to realign 
tracks through or around urban areas to change development patterns, 
want to separate more highways from rail rights-of-way or improve 
terminal railroads that serve key industrial areas. These multimodal 
projects could help ease congestion across the U.S. and improve the 
efficiency of our national highways. In addition, port projects are 
excellent candidates for FASTLANE grants.
    As Congress considers additional infrastructure-related 
legislation, there should be continued eligibility and funding for the 
Railway-Highway Crossings Program (``Section 130 program'')--funding 
that should be fully utilized by states but often is not. Section 130 
is a critically important program, and while it allows for some funding 
to go towards highway-rail grade separation projects, it does not come 
close to meeting the pressing needs that states and local governments 
have to increase funding toward projects that separate their roadways 
from railroad operations. The FAST Act prioritized grade separations in 
ways previous highway bills did not by making them eligible projects 
across multiple funding programs. If the legislative opportunity to 
assist state and local governments with additional funding for these 
critical roadway investments presents itself, railroads would continue 
to participate and support those projects.
    Regarding state and national freight plans, BNSF believes they have 
been useful in identifying, prioritizing, and positioning important 
freight projects that provide substantial public and private benefits 
but have not traditionally fit within past transportation funding 
mechanisms. These plans are critical to securing the necessary public 
funding and benefits in cases where these important projects align with 
BNSF's interest in providing a safe, reliable, and efficient U.S. 
supply chain. This influences BNSF private funding decisions in three 
primary ways:

   Allows BNSF to plan and commit its private funding 
        commensurate with its benefit in projects that also have public 
        benefits and public funding (PPPs), such as Tower 55 in Fort 
        Worth, Texas, the Willmar Wye project in Willmar, Minnesota, or 
        Sound Transit projects in Washington State.

   Provides funding for public infrastructure which enables 
        BNSF to unlock latent capacity or justify investment in 
        parallel projects, such as intermodal connectors and 
        collectors. This also encourages BNSF (and our customers) to 
        make investments in intermodal facilities or warehouses 
        dependent on those roadways, such as the investments in the 
        roadways and highways around BNSF's Logistics Park, Kansas City 
        in Edgerton, Kansas.

   Providing funding for ports, industrial parks, and other 
        major freight demand generators drives BNSF's investment 
        decisions which support network capacity and performance to 
        serve those facilities.

    Question 2. Port of Quincy

   Why has BNSF not renewed service at the Port of Quincy for 
        refrigerated cars?

   Will you commit to working with the Port of Quincy to 
        restore cold train service?

    Answer. BNSF is always looking for ways to be responsive to market 
demands and bring innovative rail solutions to our customers that make 
economic sense for us and our customers. We are always open to working 
with the Port of Quincy or any other port or customer to explore new 
market opportunities and provide service products that are in demand in 
the marketplace.

    Question 3. Port of Bingen

   Why does BNSF believe that these grade crossings need to be 
        closed?

   Has BNSF worked to understand the Port of Klickitat?

   Will you commit to ongoing discussion with Bingen to resolve 
        this issue?

    Answer. BNSF is engaged with Washington's Department of 
Transportation (WSDOT) as it looks to provide a grade separation to 
support access to the Port of Klickitat and Bingen Point. WSDOT 
believes an improved rail crossing will reduce potential backups on SR 
14 while increasing mobility and safety in order to support future 
economic growth in the area. BNSF remains engaged with stakeholders 
including the Port of Klickitat and the City of Bingen at regular 
project development meetings and has offered to meet separately with 
the Port.

    Question 4. Short-Line Railroads

   How will investment in last-mile projects benefit short-line 
        railroads?

   How can freight investment be combined with the short-line 
        tax credit to better improve freight infrastructure?

    Answer. BNSF connects with approximately 200 shortlines who perform 
local and gathering activities (first-mile/last mile) for BNSF. In 
2016, shortlines originated or terminated about one third of BNSF's 
agriculture and industrial products traffic. Shortline investments 
improve safety and service to our mutual customers and supports growth 
with existing and new customers.
    The Shortline Tax Credit leverages private sector investment in 
rail infrastructure by providing a tax credit of 50 cents for every 
dollar spent on track improvements. The tax credits help shortlines 
make necessary investments in their infrastructure, ensuring these 
lines will continue to provide service to our shared customers.

    Question 5. Viability of West Coast Ports. According to a recent 
article in the Journal of Commerce, West Coast ports' market share of 
Asian import cargo has declined from 78.3 percent in 2005 to a new low 
of 67 percent last year, a reduction of 12 percent. Additionally, the 
article goes on to say that the increasing intermodal rail rates we are 
seeing are the single biggest reason for this decline in market share.
    As a stakeholder and an important service provider for the Pacific 
Northwest trade gateway--and one that has the ability and flexibility 
to set prices--what are your plans for ensuring its viability as far as 
the cost of your product is concerned?
    Answer. A fair and comprehensive review of what considerations 
determine shippers' corridor and gateway utilization would include 
multiple factors such as commodity, time and distance to port and 
inland markets, capacity, port capabilities and perceived reliability. 
Rail cost is merely one component of the total cost of doing business 
through a particular port. Some perceived advantages in the Canadian 
supply chain include greater labor stability, strategic terminal 
expansions, a robust defense of industrial land to serve the global 
market, no Harbor Maintenance Taxes and alignment in support of serving 
Canada's product and commodity spectrum at the Federal, Provincial, and 
Local levels.
    2015 was a pivotal year for U.S. Cargo diversions due to the 
cumulative effect of U.S. West Coast port congestion resulting in 
severe disruption and financial harm to shippers' supply chains. All 
major U.S. West Coast container ports contributed to the disruption. At 
one point in 2015, there were forty one ships anchored off the coast of 
Los Angeles, Long Beach, Oakland and the ports of Seattle and Tacoma. 
Although the congestion has improved, the long-term effect to the 
supply chain--and shippers' diversions to mitigate risk--is still being 
felt today. Canadian ports in particular have benefited by ensuring 
stakeholders that they can be a reliable routing alternative.
    As the largest rail intermodal provider in North America, BNSF 
continues to invest to ensure that it offers needed capacity, service 
and value to its customers. BNSF has committed to transforming and 
enhancing our Northern Corridor between the Pacific Northwest and 
Chicago into a rail superhighway, just as we have with our Southern 
Transcon route between Southern California and Chicago. Since 2013, 
BNSF has invested more than $5 billion to maintain and expand the 
Northern Corridor. We have added more than 135 miles of double track to 
our network with over 1,000 miles of centralized traffic control 
technology and 32 new or extended sidings. With this investment, we 
have permanently expanded the capacity of our network, which we believe 
will contribute to maintaining the U.S. supply chain advantage and 
supporting the Pacific Gateway Ports competitiveness.
    The West Coast ports' market share is extremely important to BNSF. 
We offer our customers optionality by serving a broad Pacific gateway 
with multiple origin/destination options, thus giving customers the 
power and flexibility to decide where best to direct their freight 
movements. We will continue to work closely with our customers, 
understanding their proprietary needs and preserving their 
confidentiality as we offer the value needed to win their business. 
There is robust competition in the marketplace--at each port, and 
between ports--and a wide range of factors driving customer decisions.
    There are also challenges at West Coast Ports that must be 
addressed if they are to maintain their current market share, much less 
grow it. A recent study entitled ``Unleashing Washington's Maritime 
Potential: Identifying challenges to Port Competitiveness and 
Recommending Solutions'' released in October 2016 highlighted the need 
to invest in maritime facilities in the state and the difficulty in 
doing so related to local land use decisions on waterfront property, 
related funding decisions and difficulty in permitting port and trade 
related projects for which funding and public and private support does 
exist. This includes local waterfront development in the Puget Sound 
area which must consider potential long-term conflicts with freight 
movement in the region.
    We have and will continue to make investments in service innovation 
through line and facility capacity expansion, technology 
implementation, improved service design and by focusing on operating 
efficiency. Continued growth on BNSF's Northern Tier is essential and 
we have been fully committed to helping grow imports and exports of all 
kinds through Washington state, but achieving growth has been 
difficult. We will continue to work closely with the Washington ports, 
Washington DOT and other stakeholders to understand and support how to 
fully utilize Washington's gateways.

    Question 6. Competition from Canadian Ports. The Canadian 
Government, ports and railroads appear to be doubling down on the 
strategy of increasing their share of U.S. cargo. Where before Canadian 
ports handled mostly Canadian cargo, today 24 percent of Vancouver's 
cargo and fully two-thirds of Prince Rupert's is bound for or 
originates from the US. In recent years the ports of Seattle and Tacoma 
have lost market share, associated jobs and export capacity to these 
Canadian ports.

   What is your perspective on the cost advantage by Canadian 
        railroads in terms of why they can offer lower rates and how it 
        will affect your business strategy?

   Are you aware of incentives from the Canadian government 
        that allows them to charge lower rates than those in the 
        Pacific Northwest?

    Answer. The Canadian Federal and provincial governments, ports and 
key stakeholders have developed an effective long-term collaboration 
focused on growth and reliability, especially in advancing 
infrastructure and adding capacity to meet the changing needs of the 
ocean container industry. For example, all three major Canadian ports 
have extensive and expanding on-dock rail facilities. Ongoing support 
and effective policies by government have made the Port of Prince 
Rupert and the Port of Vancouver attractive routing alternatives to 
U.S. West Coast ports. There is also alignment between interior and 
coastal Provinces on projects that benefit the Port of Vancouver and 
Rupert as both recognize the importance of exports to the viability of 
their local and national economies. This collaborative and aligned 
effort extends to permitting and approvals for key projects. In Canada, 
the combination of a strong effort to ensure port competitiveness 
between governments at all levels and key stakeholders has created a 
largely stable, cost efficient and achievable environment to attract 
growth. In contrast, U.S. West Coast ports have lagged in developing a 
comprehensive approach that results in long-term infrastructure 
investments to attract more volumes.
    For West Coast container ports competing with Canada, the U.S. 
Harbor Maintenance Tax creates a competitive disadvantage. Not only are 
ports disadvantaged because of the added cost of the tax, they receive 
little or no benefit from the authorized use of the tax. In addition, 
Canada has a long-standing successful national port infrastructure and 
corridor program that not only assists with port development but finds 
projects in the corridors connecting the ports. At BNSF, we stand ready 
to work with Federal, State and local public policy makers to similarly 
support our port partners.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                            Matthew K. Rose
    Question. One area that I know has repeatedly come before this 
Committee and the full Senate is the issue of increasing the size of 
trucks by allowing for a massive tractor-trailers, known as Twin 33s. 
While these larger trucks may drive decently on long stretches of 
highway in sparsely populated swaths of our country, I worry about how 
they would fare travelling through busy small and medium-sized towns 
and on winding mountainous roads like the ones in New Hampshire. I want 
to keep our truck drivers and travelers on the roads with them safe. Do 
you agree that the industry, state, and Federal governments must 
meticulously study the potential impacts of these larger trucks--
specifically on the types of communities I've described--before making 
decisions that could harm people in our communities?
    Answer. BNSF agrees that the impacts of any change in truck 
configuration must be studied carefully, and that direct consequences, 
such as pavement and bridge damage, must be remediated as part of any 
such change. In addition, the longstanding underpayment of heavier 
trucks must be taken into account when any configuration change is 
considered. Regarding the safety consequences of proposed changes to 
existing truck configurations, we leave that to public safety experts, 
Members of Congress and the Administration to carefully consider.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                       Dr. Christopher B. Lofgren
    Question 1. As we enter into a new administration and a new 
Congress, how can we improve the regulatory process at agencies to move 
towards outcome, or performance-based regulations with better data? As 
you are aware, in the FAST Act, I authored measures to reform the 
Federal Motor Carrier Safety Administration to ensure more 
participation and a stronger cost-benefit analysis. Are there specific 
changes you would hope to see across the DOT to improve the regulatory 
process?
    Answer. I would like to thank you for your leadership and 
dedication to ensuring that the regulatory process engages stakeholders 
and relies on quality data. At Schneider National, Inc. we depend on 
data every day to navigate a host of complex logistic, strategic and 
tactical challenges, make business decisions, and more importantly, 
ensure safety in our operations.
    From our experience I can confidently say that decisions (or 
regulations) rooted in data, are only as good as the data upon which 
they rely. Therefore, I would like to offer four key themes for you and 
the Committee to consider in your pursuit of better data to guide the 
regulatory process.

   First, there should be increased transparency when data is 
        presented to ensure it is clearly understood by stakeholders, 
        lawmakers and regulators;

   Second, stakeholders should be engaged earlier in the 
        regulatory process since they have the best understanding of 
        what data is available and what assumptions and behaviors need 
        to be understood when using specific data elements;

   Third, any data, research or cost-benefit analysis used by 
        regulators should include an adequate (not selective) 
        representation of the industry; and

   Fourth, data consistency is critical. For example, using a 
        standard crash report form that can be completed e by all 
        states would allow for the gathering of critical data elements 
        and provide for a better understanding of a rule's impact and 
        benefit.

    As for improving the overall regulatory process, I would like to 
emphasize my earlier point about the importance of early engagement of 
stakeholders either through advanced notice of proposed rulemakings or 
more use of the negotiated rulemaking process.
    Finally, I would like to encourage the Committee, Congress and 
regulators to explore opportunities to improve safety outside of the 
regulatory rulemaking process. For example, the U.S. Department of 
Transportation should work with the U.S. Treasury Department to reduce 
or eliminate the Federal excise tax on new tractor and trailer 
equipment, such as collision mitigation technology. I believe this 
effort could be accomplished within the regulatory process through 
administrative guidance and would incent carriers to invest in the 
newest equipment with the most advanced safety technologies, best fuel 
efficiency, and most up-to-date emissions systems.

    Question 2. As we enter into a new administration and a new 
Congress, how can we improve the regulatory process at agencies to move 
towards outcome, or performance-based regulations with better data? As 
you are aware, in the FAST Act, I authored measures to reform the 
Federal Motor Carrier Safety Administration to ensure more 
participation and a stronger cost-benefit analysis. Are there specific 
changes you would hope to see across the DOT to improve the regulatory 
process?
    Answer. Please see my response to Question 1.

    Question 3. Many stakeholders in the trucking industry have 
applauded the FMCSA's entry-level driver training rule, which is based 
on consensus recommendations from stakeholders and will increase 
safety. Would you please talk about the positive aspects of this 
rulemaking process and how this process could be replicated in the 
future at FMCSA?
    Answer. While Schneider was not a member of the Committee that 
participated in the entry-level driver training rulemaking process, we 
did follow the rule closely and would recommend the process be 
replicated in the future by the Federal Motor Carrier Safety 
Administration and other regulatory agencies.
    Because of the benefits I noted in my response to Question 1, we 
support any rulemaking process in which input from the major 
stakeholders is gathered as early in the process as possible. While the 
use of a notice of proposed rulemaking also seeks early input from 
stakeholders, we believe the negotiated rulemaking process used in the 
entry-level driver training rulemaking allows for a greater level of 
dialogue and idea generation between stakeholders and regulators.
    Specifically, the face to face meetings allow for the feedback loop 
to be expedited to real-time, which is beneficial since the rulemaking 
process tends to be lengthy by nature. Additionally, we appreciate that 
the structure guiding the process ensures the negotiated rulemaking 
committee is fair and balanced in points of view, and that all parties 
are willing to negotiate in good faith to reach consensus.
    Finally, the process also allows for relationships to be formed 
between stakeholders and regulators, and for education to occur for all 
parties. Even if consensus is not reached through the process, value is 
still gained by the experience.
    As you look to expand the use of negotiated rulemaking, I would 
suggest considering the application of the process for pending 
rulemakings such as the Speed Limiter, Obstructive Sleep Apnea and 
Safety Fitness Determination rules. Although these rules are already 
occurring under the standard rulemaking process, we believe the 
industry and regulators would benefit greatly from applying the guiding 
structure and principles of the negotiated process.

    Question 4. One issue we have heard a lot about in the trucking 
industry is the driver shortage. In your opinion, what do you believe 
are the major contributing factors that have led to this shortage? How 
is your company seeking to address this challenge?
    Answer. A key contributing factor to the driver shortage is the 
aging nature of the industry's workforce, which has resulted in more 
drivers retiring and leaving the industry. Additionally, we have 
identified a change in workforce demographics that also contributes to 
driver supply. Specifically, driving candidates now prefer to be home 
weekly, or even nightly, and are willing to work jobs that provide them 
with that opportunity even if it pays less. As a result, fewer driving 
candidates are willing to accept jobs that require them to be away for 
long periods of time.
    While some trucking companies may choose to combat the driver 
shortage by lowering their hiring standards, Schneider and other 
quality carriers are unwilling to compromise our commitment to 
protecting the motoring public and remain steadfast in our mission to 
find qualified drivers that meet training, safety and drug testing 
standards. This makes the driver shortage more challenging for 
companies like ours but we continue to be dedicated to our safety 
practices, such as Schneider's hair follicle drug testing program, and 
pursue other options for recruiting drivers that meet our standards.
    At Schneider, we are addressing the driver shortage in numerous 
ways, including through the use of technology. Automated manual 
transmissions and safety technology, such as collision mitigation 
systems, make the truck easier and safer to drive. This makes our 
positions more attractive to the top flight professionals who 
understand that our investments make them safer. We are also continuing 
to improve our value proposition to existing and candidate drivers by 
increasing pay, changing the way we move freight to allow for more 
regional movements (which allows drivers to be home more frequently) 
and enhancing our overall benefits package. Finally, we offer tuition 
assistance to truck driving schools for new candidates entering the 
industry.
    Schneider also recognizes the value of separated military personnel 
and the trouble many of them have in finding good paying jobs when 
adjusting to civilian life. We have a Military Apprenticeship program 
through the U.S. Department of Veterans Affairs (VA), in which new 
Schneider drivers can earn a monthly educational benefit from the VA in 
addition to their Schneider paycheck during their first year--up to 
$1,266 per month. Schneider further recognizes military experience and 
credits it toward Schneider driving experience to increase starting 
pay. Extended benefits and differential pay is also provided if Guard 
or Reserve personnel are deployed for up to 18 months and we offer 
guaranteed home time for weekend drill and annual military training--no 
time off is required.
                                 ______
                                 
 Response to Written Questions Submitted by Hon. Richard Blumenthal to 
                       Dr. Christopher B. Lofgren
    Question 1. Issue: Trucking industry support for a rule mandating 
speed limiters--The faster large vehicles travel, the deadlier they can 
become. Large vehicles already take longer to stop than smaller 
passenger vehicles. And just a small increase in speed leads to an 
exponentially large increase in kinetic energy, which can cause far 
greater damage and destruction in a crash--especially to those 
traveling nearby in much smaller, lighter passenger vehicles.
    Crashes involving large vehicles kill around 4,000 people each year 
and injure more than 100,000. Speeding has been identified as a 
possible factor in as many as 23 percent of these crashes. A vehicle 
with a functioning speed limiter is only half as likely to be involved 
in a crash as a vehicle without an operating device.
    Mr. Lofgren, your testimony notes the importance and potential of 
speed limiters. I have been very supportive of the use of speed 
limiters and want to see the finalization of a rule begun by President 
Obama to require these devices.
    What safety benefits can be realized through their use? At what 
speed do you set the devices your company uses?
    Answer. Schneider National Inc. has supported the use of speed 
limiting devices for decades and has utilized these devices within its 
fleet since they were first made available by manufacturers. It is well 
documented that there is a strict correlation between the speed of a 
truck and the severity of the injuries in a trucking accident; 
accordingly, the higher the speed of the truck, the more severe the 
injuries. Additionally, trucks traveling at a lower speed incur less in 
heavy vehicle fuel. These factors contributed greatly in Schneider's 
decision to implement speed limiting devices and why our company 
continues to utilize this equipment. These devices currently have our 
trucks governed at 63 mph for solo drivers and 65 mph for team drivers 
(meaning that there is more than one driver present in the vehicle).

    Question 2. Should all trucks operating in the U.S. be equipped 
with this type of technology?
    Answer. Schneider supports speed limiters on those vehicles with a 
gross vehicle weight rating (GVWR) of more than 26,000 lbs. Schneider 
recommends not only requiring speed limiting devices for newly 
manufactured equipment but also requiring the technology for any 
vehicle currently in-use with a GVWR of more than 26,000 lbs that is 
equipped with an electronically controlled engine.

    Question 3. You also have installed collision avoidance technology. 
Can you explain the importance of this technology?
    Answer. A collision mitigation system (CMS) is an active technology 
that uses a front bumper-mounted radar to detect slower moving or 
stopped vehicles ahead. These systems can determine when a potential 
crash may occur and assist the driver in quickly slowing down the 
truck. In some instances, the system works faster than the driver is 
able to recognize the situation and react. This is especially important 
because many motorists do not understand the size and weight of a 
tractor trailer and ``cut in front'' and slow down without an 
appreciation for the true stopping distance of a vehicle that is of 
much greater size than their own. Since beginning our initial 
deployment of CMS on newly purchased trucks in 2012, we have 
experienced a 69 percent reduction in rear-end accidents and a 95 
percent reduction in the claims costs (proxy for accident severity) 
associated with these accidents.
    We believe the industry should be provided with an incentive to 
purchase this type of technology and suggest that Congress, the Federal 
Motor Carrier Safety Administration, and National Highway Traffic 
Safety Administration work with the U.S. Treasury Department to reduce 
or eliminate the Federal excise tax on new tractor and trailer 
equipment. Doing so would incent carriers to invest in the newest 
equipment with the most advanced safety technologies, best fuel 
efficiency, and most up-to-date emissions systems.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                       Dr. Christopher B. Lofgren
    Question. One area that I know has repeatedly come before this 
Committee and the full Senate is the issue of increasing the size of 
trucks by allowing for a massive tractor-trailers, known as Twin 33s. 
While these larger trucks may drive decently on long stretches of 
highway in sparsely populated swaths of our country, I worry about how 
they would fare travelling through busy small and medium-sized towns 
and on winding mountainous roads like the ones in New Hampshire. I want 
to keep our truck drivers and travelers on the roads with them safe. Do 
you agree that the industry, state, and Federal governments must 
meticulously study the potential impacts of these larger trucks--
specifically on the types of communities I've described--before making 
decisions that could harm people in our communities?
    Answer. Schneider is familiar with the Twin 33 equipment, however 
it would not be part of our freight hauling model. For Schneider, 
safety is always our top priority. With any new endeavor Schneider 
pursues, we believe it is prudent to evaluate and ensure that allowable 
equipment (including size and length) is safe and compatible with 
existing infrastructure. We encourage Congress to make the same sort of 
evaluation for new types of equipment it considers allowing on our 
Nation's infrastructure.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                                Tom Gurd
    Question 1. As we enter into a new administration and a new 
Congress, how can we improve the regulatory process at agencies to move 
towards outcome, or performance-based regulations with better data? As 
you are aware, in the FAST Act, I authored measures to reform the 
Federal Motor Carrier Safety Administration to ensure more 
participation and a stronger cost-benefit analysis. Are there specific 
changes you would hope to see across the DOT to improve the regulatory 
process?
    Answer. Safety is Dow's top priority. Dow is one of the largest 
chemical shippers in North America. Our business model is based on the 
ability to ship large volumes, long distances over land by rail. Rail 
is the safest, most efficient way to transport our high volume raw 
materials and products.
    Dow supports continuous improvement in rail safety and security 
within a holistic risk management framework. This includes full 
consideration of operational and infrastructure improvements to prevent 
train accidents, along with tank car design. Advancements can only be 
achieved with further close collaboration amongst all industry 
stakeholders. Continuous improvement under this framework must improve 
safety to further mitigate risk to the public and the environment, 
without placing unnecessarily economic and operational burdens upon 
industry stakeholders.
    The DOT alone, not any other entity, is authorized to establish 
uniform national standards for the transportation of hazardous 
materials, including standards for tank cars. To this extent, Dow 
supports the joint shipper petition submitted to the DOT on August 12, 
2016 (Petition Number P-1678). The petition asks DOT to clarify that 
while stakeholders may recommend changes to tank car standards for DOT 
consideration, no other entity should be permitted to impose its own de 
facto regulations on shippers and tank car owners. Any new regulations 
imposed on industry stakeholders can and must be developed through an 
appropriate Federal rulemaking process, and supported by a sound cost-
benefit analysis.
    Dow supports improving the Federal Government's use of risk 
assessment to prioritize actions with the greatest potential to advance 
safety, and ensuring that regulations are based on sound cost-benefit 
analysis. We call on DOT to implement Office of Management and Budget 
guidance in these areas, and specific directions in Executive Orders 
12866 Regulatory Planning and Review and 13563 Improving Regulation and 
Regulatory Review.
    At the Surface Transportation Board (``STB''), it is necessary to 
improve the timeliness and the effectiveness of large rail rate case 
review procedures. Last year, the National Academy of Sciences' 
Transportation Research Board (``TRB'') issued a report, Modernizing 
Freight Rail Regulation, developed by an independent panel of 
transportation experts and economists with input from a broad range of 
stakeholders. The TRB report concluded that the STB's rate review 
procedures ``lack a sound economic rationale and are unusable by most 
shippers.'' The STB should fully consider TRB's recommendations and 
work on the methods to resolve large rate case disputes.

    Question 2. Mr. Gurd, in your written testimony you mentioned the 
advanced security and safety initiatives that Dow is undertaking. Would 
you further elaborate on these emergency response programs and Dow's 
coordination with DOT and local emergency responders? How can Congress 
and the administration help support these partnerships, particularly as 
it relates to relaying information and data and on the ground 
coordination with responders?
    Answer. As stated in my testimony, Dow has an extensive Risk 
Management Program, but we are also committed to ensuring communities 
are aware and prepared if an incident does occur. We support this 
commitment through TRANSCAER and CHEMTREC.
    TRANSCAER (Transportation Community Awareness and Emergency 
Response) is a voluntary national outreach effort that focuses on 
assisting communities prepare for and respond to a possible hazardous 
material transportation incident. Since its inception in1986, 
TRANSCAER has trained hundreds of thousands of participants, free of 
charge. Hundreds of training events are offered annually. In 2015, over 
50,000 participants were trained. Dow alone has trained almost 11,000 
participants since 2007. We have received the TRANSCAER National 
Achievement award in the last 8 consecutive years, which is given in 
recognition of extraordinary achievement by an individual person, 
individual company, individual organization, or a team (of individuals, 
companies, or organizations) in support of the initiative. TRANSCAER 
fosters collaboration and partnerships between shippers, carriers, 
communities, emergency responders, and the DOT for effective, 
coordinated and timely emergency response.
    In addition to the DOT partnering with TRANSCAER, it also develops 
the Emergency Response Guide (``ERG'') for publication every four 
years. The ERG is critical for emergency responders to initiate 
emergency response in the event of a hazardous material incident.
    Emergency responders also have access to a wide variety of experts 
through CHEMTREC (Chemical Transportation Emergency Center) service. 
When an incident does take place, responders can contact CHEMTREC's 
state-of-the-art, 24/7 emergency center to determine the best way to 
handle a wide range of chemicals and other hazardous materials.
    Dow, and on behalf of the American Chemistry Council (``ACC''), 
appreciates your interest in further strengthening partnerships to 
support emergency response capabilities. While training programs such 
as TRANSCAER are available, local emergency responders face a number 
of challenges that limit their ability to utilize these programs. 
Congress and the administration should look for ways to provide further 
support to communities, including:

   Resources for travel, time away and backfilling positions to 
        attend training;

   Addressing technology constraints, such as computer 
        equipment and high-speed Internet access, to facilitate more 
        robust, interactive remote online training; and

   Increased recognition and incentives for responders who 
        attend the industry-sponsored training.

    In addition, DOT could help facilitate the development of more 
robust standards for Emergency Response Information Providers 
(``ERIPs'') such as CHEMTREC. We believe that elevating the 
expectations on ERIPs would help ensure that emergency responders 
receive reliable, accurate, timely information.

    Question 3. You mentioned Dow's massive supply chain with hundreds 
of third party operators and providers. Would you elaborate about the 
impact or burden regulations can have on your supply chains?
    Answer. Dow shares the DOT mission ``to protect people and the 
environment by advancing the safe transportation of energy and other 
hazardous materials that are essential to our daily lives.'' However, 
unnecessary regulatory burdens can have a significant impact on our 
global supply chain.
    Dow supports the ACC submission to the Commerce Committee for its 
February 1 hearing, ``A Growth Agenda: Reducing Unnecessary Regulatory 
Burdens.'' ACC identified a number of regulatory actions by the DOT 
that add unnecessary regulatory burdens without advancing safety. We 
would like to take this opportunity to provide two additional 
significant actions that have arisen since that submission.
    Harmonization with the international regulatory bodies and Canada 
for cross-border shipments is vital to the U.S. economy and Dow's 
position in the global marketplace. Dow applauds and supports the work 
underway under the U.S.-Canada Regulatory Cooperation Council. Some of 
this work has been completed specific to the safe transportation of 
hazardous materials, and is included in DOT's rulemaking entitled 
Harmonization with International Standards (HM-215N). The final rule 
pre-publication was published in the Federal Register on January 18, 
2017, but then a week later it was withdrawn for review by the new 
administration. As of this response, it is still not published in the 
Federal Register. This rulemaking is critical for the uninterrupted, 
harmonized transportation of hazardous materials not only across the 
border, but by water and air around the world.
    In the rulemaking, DOT is introducing new regulations for 
polymerizing substances. These are materials which, without 
stabilization, are liable to undergo an exothermic reaction resulting 
in the formation of larger molecules or resulting in the formation of 
polymers under conditions normally encountered in transport. Dow ships 
a number of these materials, primarily Monomers. Monomers are vital to 
the American public, for applications such as water treatment, 
adhesives, paints, caulks and sealants, and paper coatings. While Dow 
supports the need for further regulation of these materials in the U.S. 
and around the world, in viewing the pre-publication of the final rule, 
there are two specific regulations DOT is not harmonizing with the 
international regulatory bodies that will result in undue economic 
impact on U.S. shippers while not improving safety, as follows:

        Sec. 172.102(c)(1), Special Provision 387

        DOT will require a different temperature (50+C versus 
        internationally required 45+C) for these materials that when 
        transported in a portable tank, such as an ISO container, and 
        when chemical stabilization is employed, the level of 
        stabilization is sufficient to prevent a dangerous 
        polymerization.

        Sec. 173.124(a)(4)(i)

        DOT will require a UN Test Series E, or equivalent test method 
        with the approval of the Associate Administrator, be performed 
        on these materials when transported in certain packaging types, 
        whereas the international bodies do not require such a test.

    Dow urges DOT to publish the HM-215N final rule as soon as 
possible, including fully harmonizing the aforementioned regulations to 
avert undue burden on U.S. shippers.
    Another rulemaking published by the DOT since December is an 
Advance Notice of Proposed Rulemaking entitled Volatility of Unrefined 
Petroleum Products and Class 3 Materials (HM-251D). DOT is considering 
establishing vapor pressure limits for unrefined petroleum-based 
products and potentially all Class 3 flammable liquid hazardous 
materials for transportation by all modes. The comment period was 
extended until May 19, 2017. For the reasons to be outlined in our 
comment submission, as well as our industry member association 
submissions, namely the ACC and the Dangerous Goods Advisory Council, 
Dow believes establishing a vapor pressure limit to encompass all Class 
3 flammable liquids by any mode of transportation would not improve the 
safe transportation of our chemicals and would cause undue economic and 
operational burdens.
    In closing, the U.S. needs sound policies and a comprehensive 
strategy for a robust transportation sector and investment in its 
infrastructure if we are to improve the global competitiveness of the 
U.S. manufacturing sector. These policies must keep upstream and 
downstream manufacturing businesses competitive to create the kind of 
long term job growth our company needs. For example, significant 
railroad consolidation has been allowed since Congress passed the 
Staggers Rail Act of 1980, achieving a desired result of well-
capitalized, revenue adequate railroads. It is now time to establish a 
greater balance between competition and revenue adequacy in our 
Nation's rail regulatory policy. A competitive transportation system is 
vital to American manufacturing growth that creates new investment and 
job opportunities. Competitive switching is one step that will help 
bring us closer to promoting competition for shippers in rail 
transportation, and promises to improve rail service, provide better 
routing options, and establish competitive rates, all of which are 
important for American manufacturers to be competitive in a global 
marketplace.
    Thank you once again for recognizing the chemical industry as a 
principal stakeholder in developing policies that can keep our economy 
moving. We welcome the opportunity to further collaborate with the 
Subcommittee, the DOT and all industry stakeholders to develop 
infrastructure and transportation policies that further drive 
investment and manufacturing growth in the U.S. We must ensure our 
Nation has a safe, secure, sustainable, and competitive network to 
deliver our products when and where they are needed not only within our 
borders but around the world. Please let me know if you should have any 
additional questions.
                                 ______
                                 
    Response to Written Question Submitted by Hon. Maggie Hassan to 
                                Tom Gurd
    Question. One area that I know has repeatedly come before this 
Committee and the full Senate is the issue of increasing the size of 
trucks by allowing for a massive tractor-trailers, known as Twin 33s. 
While these larger trucks may drive decently on long stretches of 
highway in sparsely populated swaths of our country, I worry about how 
they would fare travelling through busy small and medium-sized towns 
and on winding mountainous roads like the ones in New Hampshire. I want 
to keep our truck drivers and travelers on the roads with them safe. Do 
you agree that the industry, state, and Federal governments must 
meticulously study the potential impacts of these larger trucks--
specifically on the types of communities I've described--before making 
decisions that could harm people in our communities?
    Answer. Safety is Dow's top priority. Dow is one of the largest 
chemical shippers in North America. We support continuous improvement 
in transportation safety and security to protect the American public 
and the environment. This includes full consideration of operational, 
infrastructure, technological, and sustainable advancements. Dow is 
committed to Responsible Care, the chemical industry's world-class 
environmental, health, safety, and security performance initiative. Our 
carriers, including our road carriers, demonstrate this same safety 
commitment through the Responsible Care Partnership program.
    With any legislative or regulatory actions, Dow believes they must 
be data-driven and supported by a sound cost-benefit analysis. There 
appears to be data available in support of a safe and sustainable shift 
to the Twin 33. We referenced a study commissioned by Americans for 
Modern Transportation entitled ``Twin 33 Foot Truck Trailers: Making 
U.S. Freight Transport Safer and More Efficient'', which cites data 
published in the Federal Highway Administration's 2015 study entitled a 
``Comprehensive Truck Size and Weight Limits Study''.
    Based on the Americans for Modern Transportation study, it appears 
there would be benefits to the U.S. freight system, economy and the 
American public. Dow understands a Twin 33 would supplant a Twin 28 
currently utilized on our Nation's highways, and would not supplant 
trucks currently traveling though busy small and medium-sized towns and 
winding mountainous roads like the ones in New Hampshire.
    Safety benefits include fewer trucks, fewer trips, better 
enforcement to ensure the safety of other trucks, improved high-speed 
dynamics compared to a Twin 28, and leading safety technology. Dow 
understands that mileage exposure is the single biggest factor driving 
year-to-year changes in crashes, injuries and fatalities associated 
with motor vehicle travel, including truck travel. Fewer trucks on our 
roads could also reduce effects on our transportation infrastructure.
    In 2016, Dow launched our 2025 Sustainability Goals. Sustainability 
benefits of the Twin 33 include better fuel efficiency and 
environmental benefits, saving 255.2 million gallons of fuel, and 
reducing carbon and nitrous oxide emissions by nearly three million 
tons and one billions grams, respectively. These emissions reductions 
would be equivalent to taking 551,000 cars off our Nation's roads.
    Operational and societal benefits include increasing volume 
capacity by 18.6 percent without a maximum weight increase, reduced 
traffic congestion, and alleviating the driver shortage while providing 
higher-quality and more stable jobs for drivers. These benefits would 
allow Dow to make our supply chain more efficient, while making 
transportation safer and more sustainable.
    Thank you once again for recognizing the chemical industry as a 
principal stakeholder in developing policies that can keep our economy 
moving. We must ensure our Nation has a safe, secure, and sustainable 
network to deliver our products when and where they are needed. Please 
let me know if you should have any additional questions.
                                 ______
                                 
    Response to Written Questions Submitted by Hon. Deb Fischer to 
                              Wick Moorman
    Question 1. Mr. Moorman, in your testimonies you each discussed 
reforms in the FAST Act that streamlined the environmental review 
process and removed some of the red tape on routine infrastructure and 
asset maintenance. Would you please elaborate on the types of 
challenges your railroads face when attempting to build or improve its 
infrastructure? Are there ways that Congress can improve on the work 
within the FAST Act?
    Answer. We appreciate the efforts of Congress, and specifically 
this Committee, to streamline the environmental review process, 
providing rail parity with other modes of transportation. While we have 
a multi-step process for building and improving infrastructure, our 
greatest challenge remains our access to direct Federal funding for 
critical infrastructure projects throughout our system that require 
dedicated funding to help move these processes along. In some cases, 
even with a streamlined process for environmental review, the long 
absence of Federal support for a project will allow the assessment to 
lapse and require us to restart permitting and reviews that expire. We 
continue to request additional predictable and dedicated funding for 
our critical infrastructure investments as I outlined in my testimony.

    Question 2. As we enter into a new administration and a new 
Congress, how can we improve the regulatory process at agencies to move 
towards outcome, or performance-based regulations with better data? As 
you are aware, in the FAST Act, I authored measures to reform the 
Federal Motor Carrier Safety Administration to ensure more 
participation and a stronger cost-benefit analysis. Are there specific 
changes you would hope to see across the DOT to improve the regulatory 
process?
    Answer. In general, we support improved regulatory processes and 
better data. However, each proposal much be carefully weighed for its 
potential benefit to improved safety of the passengers and workers in 
our rail system, based on new and proven technologies available to the 
rail industry, and the funding to support such changes to the 
regulations that guide our daily action. We are happy to work with 
Congress and FRA to identify potential improvements. Better data will 
always be a welcome addition and criteria for our decision making in 
identifying these improvements.

    Question 3. Mr. Moorman, I greatly appreciate the depth of private 
sector railroad experience you bring to Amtrak. Would you please talk 
about some of the positive reforms you are making at Amtrak's corporate 
structure, operations, and business objectives? For example, in early 
January you took efforts to consolidate the leadership structure at 
Amtrak.
    Answer. It is vital for us to capitalize on the success of Amtrak 
over the past 10 years. We have an opportunity to build an even more 
efficient and effective company that can facilitate, organize and 
operate best-in-class passenger rail services throughout the United 
States. To do so, we needed to be structured properly and I streamlined 
and improved our reporting structure to reflect that desired outcome.
    We have a new organizational structure for Amtrak that will enable 
us to create greater product and customer focus, along with 
strengthening accountability and decision making throughout our 
company. This new structure aligns with our focus to improve the way we 
do business, modernize and enhance the customer experience, and invest 
in our future. These changes are a necessary first step to driving the 
five key objectives that we believe are critical to our long-term 
success:

   Building a world-class safety culture with a relentless 
        focus on training, risk-reduction, positive reinforcement and 
        personal accountability;

   Developing and consistently providing competitive products 
        and services;

   Creating the teams and processes necessary to serve and grow 
        our customers across all business segments;

   Gaining support for and delivering on investments that 
        sustain, improve and grow our business; and

   Harnessing innovation, technology and partnerships to 
        enhance and accelerate our business.

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