[Senate Hearing 116-565]
[From the U.S. Government Publishing Office]
S. Hrg. 116-565
AMERICA'S INFRASTRUCTURE NEEDS:
KEEPING PACE WITH A GROWING ECONOMY
=======================================================================
HEARING
BEFORE THE
COMMITTEE ON COMMERCE,
SCIENCE, AND TRANSPORTATION
UNITED STATES SENATE
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 13, 2019
__________
Printed for the use of the Committee on Commerce, Science, and
Transportation
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online: http://www.govinfo.gov
__________
U.S. GOVERNMENT PUBLISHING OFFICE
52-565 PDF WASHINGTON : 2023
SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION
ONE HUNDRED SIXTEENTH CONGRESS
FIRST SESSION
ROGER WICKER, Mississippi, Chairman
JOHN THUNE, South Dakota MARIA CANTWELL, Washington,
ROY BLUNT, Missouri Ranking
TED CRUZ, Texas AMY KLOBUCHAR, Minnesota
DEB FISCHER, Nebraska RICHARD BLUMENTHAL, Connecticut
JERRY MORAN, Kansas BRIAN SCHATZ, Hawaii
DAN SULLIVAN, Alaska EDWARD MARKEY, Massachusetts
CORY GARDNER, Colorado TOM UDALL, New Mexico
MARSHA BLACKBURN, Tennessee GARY PETERS, Michigan
SHELLEY MOORE CAPITO, West Virginia TAMMY BALDWIN, Wisconsin
MIKE LEE, Utah TAMMY DUCKWORTH, Illinois
RON JOHNSON, Wisconsin JON TESTER, Montana
TODD YOUNG, Indiana KYRSTEN SINEMA, Arizona
RICK SCOTT, Florida JACKY ROSEN, Nevada
John Keast, Staff Director
Crystal Tully, Deputy Staff Director
Steven Wall, General Counsel
Kim Lipsky, Democratic Staff Director
Chris Day, Democratic Deputy Staff Director
Renae Black, Senior Counsel
C O N T E N T S
----------
Page
Hearing held on February 13, 2019................................ 1
Statement of Senator Wicker...................................... 1
Prepared statement........................................... 3
Statement of Senator Cantwell.................................... 4
Prepared statement........................................... 5
Statement of Senator Gardner..................................... 56
Statement of Senator Baldwin..................................... 58
Statement of Senator Thune....................................... 60
Statement of Senator Tester...................................... 61
Statement of Senator Blackburn................................... 64
Statement of Senator Rosen....................................... 66
Statement of Senator Blumenthal.................................. 68
Statement of Senator Lee......................................... 69
Statement of Senator Duckworth................................... 71
Link for Chicago Tribune article............................. 72
Prepared statement from GPS Innovation Alliance (GPSIA) and
the CompTIA Space Enterprise Council....................... 73
Statement of Senator Cruz........................................ 74
Statement of Senator Udall....................................... 76
Statement of Senator Markey...................................... 77
Statement of Senator Klobuchar................................... 79
Witnesses
William Friedman, Chairman, American Association of Port
Authorities, President and Chief Executive Officer, Cleveland-
Cuyahoga County Port Authority................................. 6
Prepared statement........................................... 8
Ian Jefferies, President and Chief Executive Officer, American
Cable Association.............................................. 16
Prepared statement........................................... 17
Matthew M. Polka, President and Chief Executive Officer, American
Cable Associations............................................. 24
Prepared statement........................................... 25
Chris Spear, President and Chief Executive Officer, American
Trucking Associations.......................................... 33
Prepared statement........................................... 34
Larry I. Willis, President, Transportation Trades Department,
AFL-CIO........................................................ 45
Prepared statement........................................... 46
Appendix
Letter dated January 15, 2019 to Hon. Nancy Pelosi, Hon. Kevin
McCarthy, Hon. Mitch McConnell and Hon. Charles E. Schumer from
a coaltion of energy businesses, trade associations,
researchers, energy officials and advocacy organizations....... 83
Jason Hartke, President, The Alliance to Save Energy, prepared
statement...................................................... 85
Resilient Navigation and Timing Foundation, prepared statement... 85
Response to written questions submitted to William Friedman by:
Hon. John Thune.............................................. 87
Hon. Shelley Moore Capito.................................... 88
Hon. Maria Cantwell.......................................... 89
Hon. Amy Klobuchar........................................... 90
Hon. Tom Udall............................................... 91
Response to written questions submitted to Ian Jefferies by:
John Thune................................................... 91
Hon. Maria Cantwell.......................................... 92
Hon. Tom Udall............................................... 95
Hon. Jon Tester.............................................. 95
Response to written questions submitted to Matthew M. Polka by:
Hon. Shelley Moore Capito.................................... 96
Hon. Maria Cantwell.......................................... 97
Hon. Amy Klobuchar........................................... 100
Hon. Tom Udall............................................... 100
Hon. Jon Tester.............................................. 100
Response to written questions submitted to Chris Spear by:
Hon. John Thune.............................................. 101
Hon. Shelley Moore Capito.................................... 102
Hon. Maria Cantwell.......................................... 103
Hon. Tom Udall............................................... 105
.................................................................
.................................................................
AMERICA'S INFRASTRUCTURE NEEDS: KEEPING PACE WITH A GROWING ECONOMY
----------
WEDNESDAY, FEBRUARY 13, 2019
U.S. Senate,
Committee on Commerce, Science, and Transportation,
Washington, DC.
The Committee met, pursuant to notice, at 10:15 a.m. in
room SD-G50, Dirksen Senate Office Building, Hon. Roger Wicker,
Chairman of the Committee, presiding.
Present: Senators Wicker [presiding], Thune, Cruz, Moran,
Gardner, Blackburn, Lee, Scott, Cantwell, Klobuchar,
Blumenthal, Markey, Udall, Peters, Baldwin, Duckworth, Tester,
and Rosen.
OPENING STATEMENT OF HON. ROGER WICKER,
U.S. SENATOR FROM MISSISSIPPI
The Chairman. Good morning. We may break at any moment to
conduct some business, but I want to welcome everyone here
today on behalf of my colleague, Ranking Member Cantwell, to
discuss a pressing issue facing our nation: the state of our
country's infrastructure.
As we all know, President Trump continues to call for
infrastructure revitalization. Just last week, in his State of
the Union Address, he called on Congress to work with the
Administration to pass an infrastructure bill.
Infrastructure impacts nearly every corner of our country
and economy--the corn and soybeans grown in the Midwest that
are shipped through the Port of Seattle, the $323 billion in
goods shipped each year to and from Colorado primarily by
truck, the manufactured products moving through the Port of
Anchorage, the 150 million tons of freight traveling by rail
through West Virginia each year, and the billions of dollars of
machinery shipped to and from Mississippi each year.
Unfortunately, what was once the envy of the world, our
infrastructure system has fallen behind on what is required to
maintain America's competitiveness in a global market.
The American Society of Civil Engineers Report Card gives
our infrastructure a grade of D+. Our ports are congested.
Millions continue to be without access to high-speed internet.
Americans spend eight billion hours stuck in traffic each year.
As an example, Los Angeles drivers spend 102 hours a year
in traffic during peak times while London drivers spend only 74
hours per year.
In Mississippi alone, there are thousands of structurally
deficient bridges. These statistics mean fewer jobs, less time
with family, lower economic growth or worse.
Fortunately, improving our infrastructure is an area where
bipartisan agreement and cooperation can be found. This
committee already has built upon and will continue to build on
this history of bipartisanship as it relates to transportation
and infrastructure legislation.
Just last week, we kicked off the 116th Congress with a
hearing on 5G Technology and the societal benefits of
maintaining American leadership in innovation.
5G has the ability to usher in a new era of connectivity
through facilitation of cutting-edge medical services or
autonomous and connected transportation technologies that allow
vehicles to talk to each other or to communicate with roads,
bridges or traffic signals in order to reduce accidents and
increase mobility.
Last fall, the Committee led Congress in passage of the
Federal Aviation Administration's Reauthorization Act, which
authorized the Federal Aviation Transportation Programs for 5
years, promoting airport infrastructure safety and American
leadership in aviation.
Additionally, led by our friends over at the Committee on
Environment and Public Works, where I serve with many members
of this committee, the 115th Congress authorized our Water
Resources Infrastructure Programs by passing the America's
Water Infrastructure Act.
While it is recent, the Committee played a prominent role
in fixing America's surface transportation in 2015. The FAST
Act, a 5-year bill to improve our Nation's infrastructure,
provided long-term funding certainty for transportation
infrastructure investment. It also improves surface
transportation safety, enhanced economic growth, increased
freight connectivity, and streamlined project delivery. This
important legislation expires in 2020.
Working with our colleagues on the other relevant
committees, the Commerce Committee will continue to work on the
future of our infrastructure system.
Our committee has broad jurisdiction over issues affecting
ports, rail, trucking, aviation, and telecommunications. More
specifically with respect to transportation, the Commerce
Committee has jurisdiction over the Department of
Transportation's Office of The Secretary, which includes grant
programs, like BUILD, which has never been authorized, and
important programs under the BUILD America Bureau.
Additionally, this committee oversees various Highway Trust
Fund and General Fund programs under important modal
administrations and independent agencies, including the FAA,
the Federal Railroad Administration, National Highway Traffic
Safety Administration, Federal Motor Carrier Safety
Administration, Maritime Administration, Surface Transportation
Board, and National Transportation Safety Board.
On telecommunication issues, this committee oversees the
FCC, the Corporation for Public Broadcasting, and National
Telecommunications and Information Administration of the
Department of Commerce.
Given its jurisdiction, this committee is in a unique
position to examine how technology, including advances in
automation, artificial intelligence, and connectivity, can
revolutionize transportation and mobility for the 21st Century.
During today's hearing, I look forward to hearing from our
witnesses.
Mr. William Friedman, Chairman of the American Association
of Port Authorities and also the President and Chief Executive
Officer of the Cleveland-Cuyahoga County Port Authority; Mr.
Ian Jefferies, President and Chief Executive Officer of the
Association of American Railroads; Matthew Polka, President and
Chief Executive Officer of the American Cable Association; Mr.
Chris Spear, President and Chief Executive Officer of the
American Trucking Association; and Mr. Larry Willis, President
of the Transportation Trades Department, AFL-CIO.
Their testimony will address many of the critical issues
that this committee will need to discuss.
I look forward to a thoughtful discussion of these
important topics so we can work to rebuild our Nation's
infrastructure.
I want to welcome all of our witnesses and recognize my
friend, the Ranking Member, Senator Cantwell.
[The prepared statement of Senator Wicker follows:]
Prepared Statement of Hon. Roger Wicker, U.S. Senator from Mississippi
Good morning. I am here today with my colleague, Ranking Member
Cantwell, to discuss a pressing issue facing our nation-the state of
our country's infrastructure.
As we all know, President Trump continues to call for
infrastructure revitalization. Just last week in his State of the Union
address he called on Congress to work with the Administration to pass
an infrastructure bill.
Infrastructure impacts nearly every corner of our country and
economy--the corn and soybeans grown in the Midwest that are shipped
through the Port of Seattle, the $323 billion in goods shipped each
year to and from Colorado primarily by truck, the manufactured products
moving through the port of Anchorage, the 150 million tons of freight
traveling by rail through West Virginia each year, and the billions of
dollars of machinery shipped to and from Mississippi each year.
Unfortunately, what was once the envy of the world, our
infrastructure system has fallen behind on what is required to maintain
America's competitiveness in a global market.
The American Society of Civil Engineers report card gives our
infrastructure a grade of D+. Our ports are congested. Millions
continue to be without access to high-speed internet. Americans spend
eight billion hours stuck in traffic each year. As an example, Los
Angeles drivers spend 102 hours a year in traffic during peak times,
while London drivers spend only 74 hours a year. In Mississippi alone,
there are thousands of structurally deficient bridges. These statistics
mean fewer jobs, less time with family, lower economic growth, or
worse.
Fortunately, improving our infrastructure is an area where
bipartisan agreement and cooperation can be found. This Committee
already has built upon and will continue to build on this history of
bipartisanship as it relates to transportation and infrastructure
legislation.
Just last week, we kicked off the 116th Congress with a hearing on
5G technology and the societal benefits of maintaining American
leadership in innovation. 5G has the ability to usher in a new era of
connectivity through facilitation of cutting edge medical services or
autonomous and connected transportation technologies--that allow
vehicles to talk to each other or to communicate with roads, bridges,
or traffic signals in order to reduce accidents and increase mobility.
Last fall, the Committee led Congress in passage of the Federal
Aviation Administration Reauthorization Act, which authorized the
Federal aviation transportation programs for five years, promoting
airport infrastructure, safety, and American leadership in aviation.
Additionally, led by our friends over at the Committee on
Environment and Public Works, where I serve with many members of this
committee, the 115th Congress authorized our water resources
infrastructure programs by passing the America's Water Infrastructure
Act.
While less recent, the Committee played a prominent role in the
Fixing America's Surface Transportation in 2015. The FAST Act--a five-
year bill to improve our Nation's infrastructure--provided long-term
funding certainty for transportation infrastructure investment. It also
improved surface transportation safety, enhanced economic growth,
increased freight connectivity, and streamlined project delivery. This
important legislation expires in 2020.
Working with our colleagues on the other relevant committees, the
Commerce Committee will continue to work on the future of our
infrastructure system. Our committee has broad jurisdiction over issues
affecting ports, rail, trucking, aviation, and telecommunications.
More specifically, with respect to transportation, the Commerce
Committee has jurisdiction over the Department of Transportation's
Office of the Secretary, which includes grant programs like BUILD,
which has never been authorized, and important programs under the Build
America Bureau.
Additionally, this Committee oversees various Highway Trust Fund
and General Fund programs under important modal administrations and
independent agencies, including the FAA, the Federal Railroad
Administration, National Highway Traffic Safety Administration, Federal
Motor Carrier Safety Administration, Maritime Administration, Surface
Transportation Board, and National Transportation Safety Board.
On telecommunications issues, this Committee oversees the FCC, the
Corporation for Public Broadcasting, and National Telecommunications
and Information Administration of the Department of Commerce.
Given its jurisdiction, this committee is in a unique position to
examine how technology, including advances in automation, artificial
intelligence, and connectivity, can revolutionize transportation and
mobility for the 21st Century.
During today's hearing, I look forward to hearing from our
witnesses:
Mr. William Friedman, Chairman of the American Association
of Port Authorities, and also the President and Chief Executive
Officer of the Cleveland-Cuyahoga County Port Authority;
Mr. Ian Jefferies, President and Chief Executive Officer of
the Association of American Railroads;
Matthew Polka, President and Chief Executive Officer of the
American Cable Association;
Mr. Chris Spear, President and Chief Executive Officer of
the American Trucking Association;
Mr. Larry Willis, President of the Transportation Trades
Department, AFL-CIO
Their testimony will address many of the critical issues that this
committee will need to discuss.
I look forward to a thoughtful discussion on these important topics
so we can work to rebuild our Nation's infrastructure.
STATEMENT OF HON. MARIA CANTWELL,
U.S. SENATOR FROM WASHINGTON
Senator Cantwell. Thank you, Chairman Wicker, and I, too,
welcome all the witnesses here today.
Sometimes a good message is worth repeating. So let me add
my infrastructure investment rejoinder to your comments.
We know the importance of infrastructure and we also know
what happens when we don't invest. Just this week, the Seattle
Times ran an article about how Seattle had the sixth worst
congestion in our country and that drivers lost a whopping 138
hours to traffic last year. That's almost 6 days. So that is
about productivity and about cost.
To add insult to injury, yesterday the 2019 top truck
bottlenecks reports came out and found out Washington State has
six of the top 100 bottlenecks in the country. So to my
colleague's comments about ``how freight can't wait'' and how
the competitiveness of moving our products is critical to not
just my state's products but to our entire nation's, I thank
him for mentioning those.
In Washington State, we know we have to invest in
infrastructure and we're not alone. Traffic isn't the only
problem. We know that whether that is bad roads or packed buses
or not implementing PTC that they can have tragic consequences.
So what we need to do is move forward. The bottlenecks that
were mentioned by my colleague on rail lines and our inability
to move product can lessen our Nation's competitiveness if we
don't get infrastructure right.
It's not just that people or consumers lose their products,
have to wait or that the cost is more. We lose our
competitiveness to other nations who might be able to move
those products faster.
And my colleague also mentioned the underserved, rural and
tribal communities that lack appropriate broadband access,
which is critical to competing in the 21st Century global
economy.
So we all agree that we need a heavy investment in
infrastructure. I know the President originally called for a $1
trillion investment in infrastructure, but the plan that was
put forth at $200 billion in Federal investment, relies heavily
on public-private partnerships and more tolls. I think this has
been received with a great deal of skepticism across the
country.
What I think we need to do, my colleagues on this side of
the aisle put forth an infrastructure proposal and really tried
to focus on the return on investment that we get from
infrastructure investment, whether that is aviation, maritime,
broadband, or things as basic as grid modernization, are about
transforming our community and using the resources of our
cherished infrastructure investment in the appropriate ways.
I hope our Committee will take a look at that proposal.
This past month, with the shutdown, I think we got a very
clear look at what happens when transportation doesn't work. We
know that transportation employees, like air traffic
controllers and transportation security workers, met their
challenges but faced many of them, and we don't want to see
that happen again.
The shutdown is a wake-up call for us that says that we
have to invest in these critical aspects of infrastructure to
move our economy forward.
So I look forward to working with the Chairman and the
members of this committee on our economic competitiveness as a
nation. It requires real investment in infrastructure and I
hope that we'll get a chance to talk about that.
Thank you, Mr. Chairman.
[The prepared statement of Senator Cantwell follows:]
Prepared Statement of Hon. Maria Cantwell, U.S. Senator from Washington
Thank you Chairman Wicker, and I too welcome all the witnesses here
today. Sometimes a good message is worth repeating, so let me add my
infrastructure investment rejoinder to your comments.
We know the importance of infrastructure and we also know what
happens when we don't invest. Just this week The Seattle Times ran an
article about how Seattle had the 6th worst congestion in our country
and that drivers lost a whopping 138 hours to traffic last year. That's
almost 6 days. So that is about productivity and about cost. To add
insult to injury, yesterday 2019 Top Truck Bottlenecks reports came out
and found that Washington state has six of the top 100 bottlenecks in
the country. So to my colleagues comments about how freight can't wait,
and how the competitiveness of moving our products is critical to not
just my state's products, but to our entire nation's, I thank him for
mentioning those.
In Washington state we know we have to invest in infrastructure,
and we're not alone. And traffic isn't the only problem. We know that
whether that is bad roads or packed busses or not implementing PTC,
that they can have tragic consequences. So what we need to do is move
forward. The bottlenecks that were mentioned by my colleague, on our
rail lines, and also our inability to move product, can lessen our
Nation's competitiveness if we don't get infrastructure right. It's not
that people who just are consumers lose their products or have to wait
or that the cost is more--we lose our competitiveness to other nations
who might be able to move those products faster.
And my colleague also mentioned the underserved and rural
communities and Tribal communities that lack appropriate broadband
access, which is critical to competing in the 21st century global
economy. So we all agree that we need a heavy investment in
infrastructure. I know the president initially called for a one
trillion dollar investment in infrastructure, but the plan that puts
forth the 200 billion dollars of Federal investment relies heavily on a
public-private partnership and more tolls. I think this has been
received with a great deal of skepticism across the country.
What I think we need to do--my colleagues on this side of the aisle
put forth an infrastructure proposal and really try to focus on the ROI
that we get from infrastructure investment. Whether that is aviation,
maritime, broadband, or things as basic as grid modernization, are
about transforming our community and using the resources of our
cherished infrastructure investment in the appropriate ways. I hope our
committee will take a look at that proposal.
This past month with the shutdown, I think we got a very clear look
at what happens when transportation doesn't work. We know that
transportation employees, like air traffic controllers and
transportation security workers, met their challenges but faced many of
them. And we don't want to see that happen again. The shutdown is a
wakeup call for us that says we have to invest in these critical
aspects of infrastructure to move our economy forward. So I look
forward to working with the Chairman and the members of this committee
on our economic competiveness as a nation. It requires real investment
in infrastructure, and I hope that we'll get a chance to talk about
that.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cantwell, for an excellent
opening statement.
We'll begin now with the statements of our witnesses,
limited to 5 minutes or less, and it may be that upon reaching
a quorum, we'll take care of a few items of business.
But, Mr. Friedman, we are delighted to have you here and
you're welcome to proceed.
STATEMENT OF WILLIAM FRIEDMAN, CHAIRMAN,
AMERICAN ASSOCIATION OF PORT AUTHORITIES,
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
CLEVEAND-CUYAHOGA COUNTY PORT AUTHORITY
Mr. Friedman. Chairman Wicker, Ranking Member Cantwell, and
members of the Committee, thank you for holding this important
hearing and for inviting me on behalf of the American
Association of Port Authorities.
Our nation is at a critical time for making needed Federal
investments in our port-related infrastructure. Rising freight
volumes on all three coasts and the Great Lakes means we must
upgrade our water-side and land-side infrastructure to
accommodate larger ships, more ships, and the accompanying
rising freight volumes and passenger surges.
It has been more than 60 years since President Eisenhower
proposed and began building out the interstate highway system
in 1956, but until the FAST Act, freight hadn't been fully
considered or recognized as a national policy priority.
During this time, there have been eight evolutions of the
container ship evolving to ships today with capacities of
18,000 20-foot equivalent units and beyond while our country
has relied upon essentially the same connecting infrastructure
to accommodate and facilitate this phenomenal growth in freight
volumes.
Overall maritime cargo volumes have also seen marked
increases over the past six decades which continuously impacts
our freight infrastructure. Total U.S. waterborne tonnage
roughly doubled between 1956 and 2017. Since 2000, container
volumes increased 71 percent, cruise passengers through our
port terminals went up 98 percent, and total foreign trade in
short tons rose by 37 percent.
At my port, we went from zero container service in 2014 to
an annual increase of 50 percent. Our cruise business has
increased by 27 percent since 2017, and 13.5 million tons of
cargo, foreign and domestic, moved through Cleveland Harbor
last year.
The FAST Act created two funding programs totaling 11
billion in dedicated freight funding over 5 years. However, of
that total, only 1.13 billion is multimodal-eligible, which is
to say not limited to road or highway work. This is far below
what's needed to build out a 21st Century multimodal freight
network.
Only 200 million of multimodal eligibility remain of the
roughly two billion that remains in the INFRA Program.
AAPA members, our ports, have identified more than 20
billion in multimodal funding needs for public port authorities
alone over the next decade. In my region of the country, a new
lock for cargo ships on the Great Lakes authorized in the 2018
WIA Bill is projected to cost $922 million.
At my port in Cleveland, we have capital needs exceeding 60
million, including a new main gate, a U.S. Customs facility to
process cruise ship passengers, several wharf structure
rehabilitations and capacity expansion at our bulk terminal.
Clearly, multimodal project funding levels and project
eligibility need to be improved. Therefore, AAPA recommends the
following. All freight program funding should be 100 percent
multimodal and the cap on INFRA grants and the Formula Program
should be lifted.
I want to thank Ranking Member Cantwell for your leadership
on multimodal freight programs that we have in place today and
we look forward to working with you to expand those programs in
the near future.
We also recommend including a maritime supply chain title
in the next reauthorization bill that recognizes the evolving
supply chain needs of the multimodal freight network.
AAPA strongly supports Chairman Wicker's Port Act which
improves MARAD's Port Infrastructure Development Program and
would provide resources to port terminals and access projects.
AAPA supports a gas tax increase, a VMT program, and has
endorsed the concept of a one-percent freight weigh bill fee to
support freight infrastructure improvements.
AAPA strongly supports the current multimodal U.S. DOT
grant program, such as BUILD, CRISI, and INFRA, and recommends
that any new funding be multimodal eligible.
The Rail Rehabilitation Innovation Financing Program has
been in existence since 2002 but only last year did a port, the
Port of Everett in Washington State, receive a RRIF loan. More
ports could take advantage of the program if the financing fee
were removed.
We appreciate the Committee's emphasis on infrastructure
security and you should know that our member ports recently
identified about four billion in port security funding needs
for U.S. port authorities alone over the next 10 years. We need
to invest in port infrastructure and we need to secure it.
Thank you for allowing me to testify on behalf of our
Nation's ports. AAPA looks forward to working with you
throughout the 116th Congress.
[The prepared statement of Mr. Friedman follows:]
Prepared Statement of William Friedman, Chairman, American Association
of Port Authorities; President and Chief Executive Officer,Cleveland-
Cuyahoga County Port Authority
Chairman Wicker, Ranking Member Cantwell and Members of the
Committee, thank you for holding this important hearing.
It is a critical time for making needed Federal investments in the
Nation's port-related infrastructure. Rising freight volumes on all
three coasts and the Great Lakes means we must upgrade our waterside
and landside infrastructure to accommodate larger ships and the
accompanying freight volume and passenger surges. Nowhere is there such
a stark example of our country's infrastructure needs and the failure
to keep pace with our growing economy than with freight-and port-
related infrastructure investments.
To put our national state of freight into perspective, it's been
more than 60 years since President Eisenhower proposed and began
building out the Interstate Highway System in 1956. But until the FAST
Act, freight had not been fully considered or realized as a national
policy priority.
However, during the same 60-year period, there have been eight
evolutions of the containership, starting with vessel capacities of 500
twenty-foot equivalent units (TEUs), evolving to ships with capacities
of 18,000 TEUs and beyond, which are as high as a New York skyscraper
and as wide as a 10-lane freeway. This means that that shipping
industry has reinvested in their ships eight times while our country
has relied upon essentially the same infrastructure to accommodate and
facilitate an astronomical growth in freight volumes.
Maritime cargo volumes have also seen marked increases over the
past six decades and have continuously impacted our freight
infrastructure. Total U.S. waterborne tonnage roughly doubled between
1956 and 2017, but this is due almost entirely to U.S. foreign trade
growth which has seen nearly a 500 percent increase during that time
frame, based on U.S. Army Corps of Engineers data.
In the last 17 years alone, container volumes have increased by 71
percent, passengers through our cruise port terminals increased by 98
percent, and total foreign trade in short tons increased by 37 percent.
At my port, the Port of Cleveland, our sustained growth is a
microcosm of our entire industry. We went from zero container service
in 2014 to an annual increase of 50 percent. Our cruise business has
increased by 27 percent since 2017 and 13.5 million tons of cargo moved
through the Cleveland harbor last year.
Ports are national resources and we must invest in them as a
nation. Communities adjacent to ports and inland states rely on us for
jobs and to connect them to the global economy, as well as to the
occasional vacation aboard a cruise ship.
The infrastructure investments we make at ports, be it highway
connectors or rail access projects, directly impact our partners in the
rail and trucking industry who are with us here today. Just as
important, targeted investments at maritime facilities provided a level
of certainty and efficiency to a growing and interconnected supply
chain.
Ports are the initiators and facilitators of the supply chain. Mega
shipping alliances, operating mega-large vessels, have a cascading
effect when their ships arrive at U.S. ports. This includes the need
for larger cranes to load-and off-load containers, additional port-
related labor, more chasses on which to move the containers in, out and
around the terminals, and adjusting truck gate times to address the
changing work load.
Another supply chain challenge is proper maintenance of Federal
navigation channels. AAPA has a legislative proposal to make full use
of Harbor Maintenance Tax revenues, based on a fair and equitable
funding framework that was agreed to last year by the Nation's public
ports.
In 2015, America's seaports took a big step forward after passage
of the FAST Act. With the creation of two funding programs; Projects of
Highway and Freight Significance (discretionary) and National Highway
Freight Program (formula), the FAST Act provided a total of $11 billion
in dedicated freight funding over five years. However, of that total,
only $1.13 billion is multimodal eligible, far below what is needed to
build out a 21st century multimodal freight network. Only $200 million
of multimodal eligibility remain for the INFRA program, for the roughly
$2 billion dollars that remain in the INFRA program.
Last year, in The State of Freight III report, AAPA members
identified more than $20 billion in multimodal funding needs for public
port authorities alone over the next decade. A top priority for the
port industry continues to be multimodal funding.
The immediate challenges confronting the freight programs are
funding levels and project eligibility. The current freight programs
are funded out of the Highway Trust Fund, which means that eligible
projects are primarily highway focused. Highways are important to our
freight network, but ports are multimodal facilitators, meaning trains,
trucks, ships and barges all need access to them.
To build off the work in the FAST Act, AAPA recommends that all
freight program funding should be 100 percent multimodal. A first step
in accomplishing this would be to lift the multimodal cap on the INFRA
grants and the formula program.
As Congress begins the process of reauthorizing the FAST Act, MARAD
has several freight infrastructure programs that are important tools to
be included and leveraged within the national freight portfolio.
Specifically, the America's Marine Highway and the Port Infrastructure
Development programs are currently authorized initiatives that will
need to be revised, updated and refocused to meet the evolving supply
chain needs of the multimodal freight network.
AAPA strongly supports Chairman Wicker's PORT Act, which improves
MARAD's Port Infrastructure Development program and would provide
resources to ports for first-and lastmile multimodal projects that
connect ports to the surface transportation network. We would also like
to work with the committee in updating the America's Marine Highway so
that it can meet the needs of ports and shippers and continue to be a
viable supply chain tool. AAPA recommends that Congress include these
programs as a maritime supply chain title in the next reauthorization
bill.
Having additional maritime freight supply chain resources and
updating the existing authorizations will leverage existing resources
and programs, providing a more comprehensive approach to building out a
21st century freight network.
An example of refreshing prior authorizations from the last
reauthorization bill would be the inclusion and consolidation of
Federal Railroad Administration (FRA) grant programs into the CRISI
program in the FAST Act. In this program, Multimodal and port rail
access projects are eligible projects. In AAPA's The State of Freight
III--Rail Access and Port Multimodal Funding Needs Report, a third of
ports identified pressing rail project needs that will cost more than
$50 million over the next decade. In fact, rail access is so important
to the port and supply chain industry that within this same time frame,
77 percent of ports said they are planning on-dock, near-dock or rail
access projects.
Additionally, AAPA strongly supports the multimodal USDOT grant
programs such as BUILD, CRISI and INFRA programs. But the BUILD
program, and its TIGER predecessor, has been more than just a
discretionary program to the port industry. It was the first program
that ports were eligible and is multimodal. It also brought ports into
the surface transportation fold, which meant that whether ports
received a TIGER/BUILD grant or not, they were encouraged to coordinate
a project with their state and local MPO before submitting it. That
meant ports were becoming part of the planning process and freight was
beginning to get a seat at the table.
Further, International trade through seaports accounts for over a
quarter of the U.S. GDP. At the center of trade and transportation are
America's seaports, which handle approximately $6 billion worth of
import and export goods daily, generate over 23 million jobs, and
provide more than $320 billion annually in federal, state and local tax
revenues. Seaports also are projected to handle nearly 12 million
cruise passengers from around the country and around the world. AAPA is
concerned that port states are penalized by the 10 percent maximum per
state called for in previous appropriation bills, as well as the set
sides for metropolitan and rural areas. Because seaports have such a
national and international reach, ports are national infrastructure
resources that support metropolitan and rural supply chains and that
any port project awarded should not count against a state, rural or
metropolitan cap.
Long-term, sustainable multimodal funding is critical, and we
encourage you to start looking at solutions. AAPA has endorsed the
concept of a 1 percent waybill fee as an equitable approach to provide
immediate and long-term funding for multimodal freight infrastructure
challenges. Additionally, AAPA supports a gas tax increase as well as a
VMT program. With all increased funding, AAPA recommends that any new
funding be multimodal-eligible.
Also, the Build America Transportation Investment Center, or BATIC,
which was codified in the FAST Act, can be a tool for ports to explore
ways to access private capital in publicprivate partnership. The Rail
Rehabilitation Innovation Financing (RRIF) program has been in
existence since 2002 and only late last year did a port receive a RRIF
loan. And as Ranking Member Cantwell knows, it was the Port of Everett.
One recommendation to make RRIF more accessible to ports was to provide
100 percent financing. AAPA members responded that there were
potentially 75 BUILD/TIGER projects that would become RRIF-financed
projects if the financing fee was removed.
On the operational front, the Federal Government has a vital role
to play with freight flow performance. For our ports to perform
efficiently, CBP must be adequately funded and staffed. In 2015, the
last time CBP was funded to hire additional staff only 20 of 2000 staff
were assigned to seaports. As an industry, with growing volumes in
freight and passengers, we would like to see, at a minimum, annual
hiring of CBP staff to 500 annually, over and above attrition. This may
sound like an appropriations or Homeland Security issue, but it is a
supply chain problem.
Finally, we appreciate the emphasis this committee has put on
infrastructure security in this Congress. AAPA strongly supports the
approach that, as a nation, we should protect the infrastructure and
supply chain we are investing in. AAPA members recently identified
upwards of $4 billion in port security funding needs for U.S. port
authorities alone over the next 10 years, which comes to $400 million
annually. Seaports are essential economic engines whose cargo
activities support over 23 million American jobs and account for over a
quarter of the U.S. economy.
We need to invest in port infrastructure and we need to secure it.
I look forward to answering any questions the committee members
have and AAPA looks forward to working with you throughout the 116th
Congress.
______
AAPA FAST Act Reauthorization Platform
As Congress prepares to engage on reauthorization of the Fixing
America's Surface Transportation (FAST) Act, the following platform of
recommendations was developed by the American Association of Port
Authorities (AAPA) as a blueprint for that legislation.
U.S. seaports represent a vital economic engine of our national
economy. In its 2014 report on the National Economic Impact of the U.S.
Coastal Port System, Martin Associates of Lancaster, PA, cited
America's seaports as influencing more than 23 million U.S. jobs and
generating $321 billion in federal, state and local tax revenue. Cargo
activities through these deepwater ports were also cited as being
responsible for $4.6 trillion in total economic activity, representing
a quarter of the Nation's economy. Martin Associates will unveil an
updated U.S. coastal port system economic impacts report on March 20,
2019, at the annual AAPA Spring Conference in Washington, DC.
Nations around the world have recognized the need to make
significant investments in their multimodal freight networks to
accommodate increasing trade volumes, larger vessels and dynamic shifts
in trade to be globally competitive. For example, Canada's national
gateway initiative includes a strategy to serve America's heartland. It
is imperative for the United States to develop and fund a strong
national freight strategy to remain competitive in the global economy.
To do this, the United States must make a sustained investment in its
multimodal freight network.
The following recommendations for the AAPA FAST Act Reauthorization
Platform have been collected and presented by an AAPA FAST Act working
group, the AAPA Freight Task Force and approved by AAPA's Legislative
Policy Council (LPC). Many of these proposed recommendations are broad.
AAPA looks forward to working with Congress and the Administration in
providing port and supply chain expertise and guidance as these
recommendations evolve to policy and legislative text.
Key Recommendations
Create a freight trust fund with a sustainable funding
source that can address the growing demand for multimodal
projects. The next reauthorization bill must identify
sustainable multimodal funding that can directly fund the
freight programs created by the FAST Act. AAPA is supportive of
direct funding for freight through a waybill fee concept or
vehicle miles traveled (VMT) freight pilot program.
Include a Maritime Freight Supply Chain title in the
reauthorization of the FAST Act.
Remove multimodal caps from the Infrastructure for
Rebuilding America (INFRA) grants and FAST Act formula program
within the U.S. Department of Transportation (USDOT).
Continue to fund USDOT's Better Utilizing Investments to
Leverage Development (BUILD) or a similar discretionary
transportation infrastructure grants program at $1.5 billion
annually, with a minimum of 25 percent dedicated to port-
related infrastructure, and exempt port projects from the state
cap maximum.
Establish a high-level multimodal freight office within
USDOT that coordinates policy, the national and the state
freight plans, multiagency freight grant programs and
complements the Build America Bureau within USDOT.
Provide a sustainable and dedicated funding source for the
freight network programs. AAPA endorses the concept of a
waybill fee (based on the domestic transportation cost of
goods) as an equitable approach to provide long-term multimodal
funding for freight.
Provide robust authorization levels for the Maritime
Administration's (MARAD) America's Marine Highway Program and
the proposed Protecting Orderly and Responsible Transit of
Shipments (PORTS) Act for first-and last-mile capacity
enhancements.
Encourage truck parking and staging plans be included in
every state freight plan.
Require each state to include supply chain cargo flows by
all modes of transportation and benefits within each state
freight plan and include the impacts of e-commerce on freight
infrastructure.
Require states to include their state freight plans as a
component of the state transportation plan.
Continue to fully fund the Consolidated Rail Infrastructure
and Safety Improvements (CRISI) Program, with an emphasis on
port rail access projects.
Ensure that all commercial ports be included in the national
multimodal freight map/network.
Integrate greater port eligibility and freight network
program integration with the Intelligent Transportation Systems
(ITS) programs.
Strongly encourage maritime and supply chain expertise in
each state DOT.
Continue to advocate for a national multimodal freight
strategic plan that would be administered out of a high-level
multimodal freight office within the USDOT
I. Building Off the FAST Act
Freight, with an emphasis on goods that move through America's
seaports, took a big step forward after passage of the FAST Act. With
the creation of two funding programs; Projects of Highway and Freight
Significance (discretionary) and National Highway Freight Program
(formula), the FAST Act provided a total of $11 billion in dedicated
freight funding over five years. However, of that total, only $1.13
billion is multimodal eligible, far below what is needed to build out a
21st century multimodal freight network.
The immediate challenges confronting the freight programs are
funding levels and project eligibility. The current freight programs
are funded out of the Highway Trust Fund, which means that eligible
projects are primarily highway focused. Highways are important to our
freight network, but ports are multimodal facilitators, meaning trains,
trucks and ships all need access to them. One could argue that as our
supply chain becomes more sophisticated and there are more inland
distribution centers with the advent of e-commerce, demand for
multimodal funding will increase. In 2018, AAPA identified more than
$20 billion in multimodal funding needs for public port authorities
alone over the next decade. A top priority for the port industry
continues to be multimodal funding.
To build off the work in the FAST Act, AAPA believes that all
freight program funding should be 100 percent multimodal. A first step
in accomplishing this would be to lift the multimodal cap on the INFRA
grants and the formula program.
Equally important from a supply chain perspective, the FAST Act
requires that states complete state freight plans to continue receiving
their freight formula funding. The results have been telling. By the
end of 2018, 95 percent of the states had submitted multimodal state
freight plans to USDOT. This is important because it signals that
states recognize the value and have the demand for multimodal projects.
States and ports will need a multimodal funding source, or an
eligibility fix, to build out their state freight plans. State freight
plans are the blueprint for multimodal state and Federal investments.
These plans are set to be revised every five years, which put them
roughly on the same track as the FAST Act. Ports and their stakeholders
must continue to engage with their Freight Advisory Committees and with
their state DOTs. Additionally, the requirements of the state freight
plans should be revisited to reflect the changing demands of the supply
chain.
The FAST Act has provided the programmatic framework for a 21st
century multimodal freight network. However, to fully leverage the
success of the legislation's freight provisions, the next
reauthorization bill will need to address increasing funding levels
while identifying a multimodal funding source.
Include a Maritime Freight Supply Chain Title in the Reauthorization of
the FAST Act
Ports are access points. Road and rail first-and last-mile projects
within the supply chain efficiently connect ports to the surface
transportation network. Ports need to be further integrated with the
surface transportation network and maritime policy needs to be
integrated within USDOT by including a maritime freight supply chain
title in the FAST Act reauthorization bill.
MARAD has several freight infrastructure programs that are
important tools to be included and leveraged within the national
freight portfolio. Specifically, the America's Marine Highway and the
Port Infrastructure Investment Programs are currently authorized
initiatives that will need to be revised, updated and refocused to meet
the evolving supply chain needs of the freight network.
An example of refreshing old authorizations from the last
reauthorization bill would be the inclusion of Federal Railroad
Administration (FRA) grant programs in the FAST Act. The FAST Act
folded FRA rail programs into the CRISI Program. Multimodal and port
rail access projects are eligible projects. In AAPA's State of Freight
III--Rail Access and Port Multimodal Funding Needs Report, a third of
ports identified pressing rail project needs that will cost more than
$50 million over the next decade. In fact, rail access is so important
to the port industry and supply chain that within this same time frame,
77 percent of ports are planning on-dock, near-dock or rail access
projects.
AAPA believes having additional maritime freight supply chain
resources and updating the existing authorizations will leverage
existing resources and programs, providing a more comprehensive
approach to building out a 21st century freight network.
Recommendations
Include a Maritime Freight Supply Chain title in the
reauthorization of the FAST Act.
Include the proposed PORTS Act, a multimodal first-and last-
mile connection program administered by MARAD that updates the
Port Infrastructure Development Program, (46USC 50302), and
include authorized funding levels and identify a multimodal
funding source or general funds.
Update the America's Marine Highway Program authorization
and include it in the Maritime Freight Supply Chain title.
Multimodal Freight Office Within USDOT
In building off the FAST Act, establishing a multimodal freight
office within the DOT would best leverage across all modes planning
tools and resources made available in the FAST Act and the proposed
maritime freight supply chain title.
A multimodal freight office is an ideal spot to administer the
soon-to-be-released multimodal freight network and the multimodal
freight plan. Both these documents are templates to work from and would
be best implemented in a mode-neutral office. Additionally, the
multimodal freight office would have oversight over the FAST Act
compliant state freight plans, which are all multimodal.
Furthermore, with multimodal funding programs in USDOT's Federal
Highway Administration, MARAD and FRA, a multimodal freight office will
coordinate and direct investment and policy.
Finally, AAPA believes that a multimodal freight office would
complement the Build America Bureau within USDOT. In the original FAST
Act, consolidating the Build America Bureau's lending and financing
programs into one allowed for better leveraging of those programs to
meet the Administration's goals. A freight office would be better
positioned to work with these new, multimodal focused programs, and to
lead the development of a multimodal network necessary to meet 21st
century supply chain and transportation needs.
Recommendation
Authorize, fund and staff a high-level multimodal freight
office within USDOT. The office will oversee the multimodal
freight network plan, as well as the multimodal FAST Act
compliant state freight plans. Multimodal discretionary grant
programs should also be coordinated out of that office.
Continue to advocate for a national multimodal freight
strategic plan that would be administered out of a high-level
multimodal freight office.
Coordinate Maritime Infrastructure Needs with Private Sector Investment
and Other Federal Resources
For the first time, the 2015 FAST Act brought ports into the
surface transportation network. Ports are now in the planning process
and ports are eligible for the formula and discretionary funding
programs, but port-related infrastructure has some catching up to do.
To put our national state of freight into perspective, it's been
more than 60 years since President Eisenhower proposed and began
building out the Interstate Highway System in 1956. Meanwhile, freight
has always been a significant component of our national infrastructure
needs. But until the FAST Act, freight had not been fully considered or
realized as a national policy priority.
However, during the same 60-year period, starting in 1956, there
have been eight evolutions of the containership, starting with vessel
capacities of 500 twenty-foot equivalent units (TEUs), and evolving to
ships with capacities of 18,000 TEUs and beyond, which are as high as a
skyscraper and as wide as a 10-lane freeway.
Ports are facilitators of the supply chain. Mega shipping
alliances, operating mega-large vessels, have a cascading effect when
their ships arrive at U.S. ports. This includes the need for larger
cranes to load and off-load containers, additional labor, more chassis
to move the containers in, out and around the terminals, and adjusting
gate times to address the changing work load.
Volumes of other cargoes, such as automobiles, have also seen
marked increases over the past six decades and have continuously
impacted our freight infrastructure. For example, total U.S. waterborne
tonnage roughly doubled between 1956 and 2017, but this is due almost
entirely to U.S. foreign trade growth which has seen nearly a 500
percent increase during that time frame, based on U.S. Army Corps of
Engineers data.
Today, our multimodal freight system and national supply chain are
in a constant state of flux, constantly reacting to the changes of a
global marketplace. If we are going to have a sustained, coordinated
and planned freight network, the shipping industry will need to be a
part of the process and the solution.
Now that freight transportation is recognized as a national
priority, the Federal Government can play a greater role investing and
coordinating the freight network to efficiently and safely handle
surging freight volumes by coordinating with states on their state
freight plans and with freight advisory committees.
The USDOT should utilize the Commerce Department and other Federal
resources for anticipating trade that feeds our supply chain to assist
in ``rightsizing'' Federal infrastructure investments in line with
pending trade agreements and trade projections.
Additionally, for U.S. ports to operate efficiently, U.S. Customs
and Border Protection (CBP) must be adequately funded and staffed. In
2015, the last time CBP was funded to hire additional staff, only 20
out of 2,000 staff were assigned to seaports. In recent testimony, CBP
stated that it needs 500 more offices in the seaport environment. This
number may even be higher, as CBP relies heavily on existing staff
working overtime. This may seem like an appropriations or homeland
security issue, but it is a supply chain problem.
Recommendations
Align Federal transportation and trade policy to properly
plan for increase cargo flows that result from U.S. trade
agreements and trade policy.
Ensure that CBP coordinates with USDOT and ports on staffing
models and needs so that freight flows and maritime business
development opportunities are not disrupted.
Taxes and Public/Private Partnerships
In many ways the modern port authority is the embodiment of a
public/private partnership. Ports and their stakeholders are often in a
unique position to leverage private sector resources to build needed
infrastructure projects.
Using the Railroad Rehabilitation & Improvement Financing (RRIF)
Program as an example, in AAPA's State of Freight III--Rail Access and
Port Multimodal Funding Needs Report, U.S. ports identified 75
potential BUILD projects that could be financed by RRIF if access to
the program and 100 percent financing were available.
Broadly, AAPA continues to be supportive of the FAST Act-mandated
Build America Transportation Investment Center (BATIC) in the USDOT.
U.S. ports have seen some increased success with the Transportation
Infrastructure Finance Innovation Act (TIFIA) and RRIF programs but
believe these programs can provide greater resources to port
infrastructure investments.
Recommendations
Provide 100 percent financing RRIF loans.
Increase consideration of port projects within the TIFIA
program.
Make the Short Line Tax Credit (45G) permanent.
Continue the tax exemption for private activity bonds.
Increase the gas tax and index it to meet the infrastructure
funding level needs of the United States and dedicate any
increase in the diesel tax to freight programs.
Conduct an audit to ensure all maritime and freight fees/
taxes are being collected and fully utilized for their intended
purposes. This includes CBP fees for freight supported services
and facilities.
Technology and Workforce Development
Placeholder for Professional Development Board recommendations that
related to the FAST Act.
II. Broader Maritime Infrastructure Investment
Energy and Air Quality
At the end of 2015, Congress lifted the Nation's 40-year-old ban on
petroleum exports. The action has prompted a surge in natural gas and
crude oil export shipments, which will help the United States achieve
the status of ``net energy exporter'' for the first time since 1953,
according to the U.S. Department of Energy (DOE).
While the increase in energy cargoes moving through our Nation's
ports is notable, it is only half the energy story confronting ports.
Energy continues to be a key port operational issue. Increasingly,
U.S. ports are moving toward the electrification of their terminal
equipment, harbor vessel and truck fleets, and staging stations
transitioning from a petroleum-based network to electric-based. Better
coordination with DOE on infrastructure would be an asset for ports,
their communities and the Nation. In many ways, ports have the capacity
to be incubators for energy policy.
In addition, smarter, more efficient energy policies and resources
can have a positive impact on regional air quality by reducing
emissions. From a USDOT jurisdiction standpoint, the Congestion
Mitigation and Air Quality Improvement (CMAQ) program has been a useful
tool for port and regional air quality management.
The U.S. Environmental Protection Agency's (EPA) Diesel Emissions
Reduction Act (DERA) grants have been a tool for ports to address air
quality and emissions issues, in many cases in cooperation with their
communities.
Recommendations
Direct and codify more CMAQ funding toward port rail and
other port projects.
Encourage Federal programs to allow grants to be used for
energy sustainability at ports.
Increase annual DERA funding.
Increase DOE funding for port-related projects. Encourage
greater Federal focus on the ability of ports to play a role in
the Nation's energy efficiency program.
Begin preparations for integrating freight transportation
into an intelligent transportation network, powered by
electricity through two studies:
Preparing to power electrical freight infrastructure
Safely integrating freight into a smart vehicle world
Resiliency
Resiliency is a key objective of the National Multimodal Freight
Policy (49 USC 70101) and the draft National Freight Strategic Plan. In
addition to adequate funding for a modern, wellmaintained 21st century
freight infrastructure system, it is in the Federal interest to ensure
this system can continue to function to the benefit of our national and
regional economies in the face of extreme weather events, earthquakes,
major accidents, and equipment or infrastructure failures.
Resiliency issues are impacting all regions of our Nation and all
transportation sectors. Ports are typically at the forefront of extreme
weather. Some regions, such as the Gulf Coast, anticipate extreme
weather events and coordinate resiliency plans prior to the hurricane
season. However, the more unpredictable the weather, the more difficult
it is to plan effectively. It is becoming increasingly important to
build infrastructure to withstand extreme weather events. Considering
the number of recent recovery packages that Congress has had to pass in
response to natural disasters, it is fast becoming a Federal
imperative. Given the traditional local, state and Federal
transportation partnerships, resiliency needs to become a key part of
the planning and building lexicon.
Examples of natural and man-made disruptions impacting the supply
chain are numerous:
Hurricanes Michael, Florence, Maria, Irma, Harvey, and Sandy
highlight the increasing force, frequency and unpredictability
with which severe weather can impact whole regions and the
functioning of the national maritime system. In addition, other
challenges such as sea-level rise can threaten maritime
infrastructure.
A Cascadia Rising scenario in the Pacific Northwest would be
the worst natural disaster in the history of the United States.
Cascadia Rising is the region's largest disasterscenario
exercise testing how local, state and Federal agencies would
respond if a 9.0 magnitude earthquake hit along the Washington
and Oregon coast. The Puget Sound area, and other West Coast
gateways, must ensure resiliency that will enable them to
operate as they would serve as the lifelines for the region, as
well as strategic capability of the military.
Critical infrastructure failures, such as a failure of the
electrical grid or compromised information technology systems
(such as recent cyber-attacks on major shipping lines), or a
terrorist attack involving a dirty bomb can shut down an entire
port complex and disrupt the flow of cargo to the entire
nation.
AAPA sees value in the establishment of a Federal critical
transportation infrastructure resiliency program. Such a program should
take an all-hazards approach, so that it can apply to both manmade
events, such as criminal or terrorist events, or an economic crisis, as
well as natural events such as severe weather, fires, earthquakes,
tsunamis, pandemics, etc. The resiliency program would complement, not
replace, the Port Security Grant Program (PSGP) and would be funded and
administered separately from the PSGP.
The nation should build on existing resiliency policy and planning
efforts. Resiliency is both prevention and recovery. This means
modernizing our aging infrastructure and designing the system to
withstand and endure disruptions. It also means ensuring affected
system components are prepared to respond and rapidly restore
operations and access following an event. Freight resiliency needs to
become part of the policy and planning discussion between the private
and public sectors (including federal, state, local governments).
Recommendations
Call for and create a national freight resilience strategy.
Establish a dedicated program, with funding, for freight
system resiliency. The program should take an all-hazards
approach so that it can apply to both man-made and natural
events.
Ensure the national freight planning effort, including state
freight plans, reflects a national freight resilience strategy.
Prioritize and encourage projects that support the national
freight resilience strategy, including projects that enhance
reliability, redundancy and incorporate the ability to rapidly
restore access and reliability.
The Chairman. Thank you very much, and thank you for
finishing precisely within 5 minutes.
If members of the Committee could only do that during our
questioning that would be great.
Mr. Jefferies, glad to have you with us.
STATEMENT OF IAN JEFFERIES,
PRESIDENT AND CHIEF EXECUTIVE OFFICER,
ASSOCIATION OF AMERICAN RAILROADS
Mr. Jefferies. Thank you. Chairman Wicker, Ranking Member
Cantwell, and members of this Committee, thank you for the
opportunity to discuss infrastructure policy and investment
with you today.
As a former staffer on this committee, I truly appreciate
your focus on the systems that are the backbone of this
Nation's economy.
The rail industry is ready to work with you and the rest of
Congress to help ensure that our Nation has the freight
capabilities to meet not only today's needs but tomorrow's.
For privately owned freight railroads, which have spent $25
billion in private capital in recent years, our path is
relatively straightforward. Continue to invest the substantial
private capital to maintain and upgrade our 140,000-mile
network.
Our industry firmly believes that the best way to equitably
and sustainably tackle infrastructure challenges of today and
tomorrow is to embrace the user-pay principle. Consider that
Class 1 railroads spent approximately $480 million per week on
their network over the last 3 years. Indeed, every week is
infrastructure week in the rail industry.
Robust investment is made possible by a balanced economic
regulatory system that relies on market-based competition while
providing a backstop for rail customers. The positive impact of
our investment is demonstrated in a number of ways.
First, railroads operate safely. While the industry
continues its dogged pursuit of zero incidents and zero
injuries, the train accident rate in 2017 was 40 percent lower
than from the year 2000 while the railroad employee injury rate
was down 43 percent.
Railroads today have lower employee injury rates than
industries such as construction, agriculture, and even grocery
stores. Railroads also alleviate highway congestion and
deterioration. Because a single train can carry the freight of
several hundred trucks, railroads cut gridlock and lower the
cost of road construction and upkeep, and we operate
efficiently.
On average, railroads move a ton of freight 479 miles per
gallon. That's equal to moving a ton of freight from Jackson,
Mississippi, to Springfield, Missouri, on one gallon of fuel or
Seattle, Washington, to Helena, Montana, on one gallon of fuel.
It's truly a fact we're proud of.
As evidenced by today's hearing, policymakers are wisely
focused on maintaining and enacting policies that drive funding
and investment across transportation modes.
For freight railroads, this again is rather simple.
Lawmakers and regulators should maintain a balanced structure
of economic regulation. After all, since established in the
1980s, this regulatory structure has allowed nearly $700
billion in private investment back into our networks with rail
customer rates 46 percent lower on average than they were in
the 1980s.
Congress can do its part to streamline the permitting
process, as well, to put dollars to work more quickly, not just
for rail projects but port projects and projects across all
modes.
More broadly, policymakers can support public-private
partnerships, such as Chicago's CREATE Program, which is truly
a joint project between the railroads, state, local
authorities, and commuter railroads and Amtrak, as well, known
as the CREATE Program.
Lawmakers can support the Section 130 Grade Crossing
Program which provides Federal funds to improve and even
separate highway grade crossings.
We recognize that the future of the Highway Trust Fund is
front of mind to lawmakers today. However, consider the
hundreds of billions in general funds required to keep the
Trust Fund solvent in recent years and it's not hard to see
that our highway funding system is broken.
Congress can take three steps to reinstill the user-pay
funding paradigm and ensure the viability of the Highway Trust
Fund.
First, Congress must reject overtures by select shippers to
allow for longer and heavier trucks. Allowing such measures
would only exacerbate any funding shortfalls and the wear and
tear on our Nation's infrastructure.
Second, lawmakers can implement a Federal gas tax increase
that covers the funding shortfall and, to their credit, our
colleagues in the truck industry support such an increase.
For a long-term solution, we join a growing chorus and urge
Congress to devise and implement a user-based system that fully
accounts for all highway users' impact on infrastructure. This
could be achieved through a vehicle miles traveled fee or a
weight distance fee.
Such bold action would go a long way in meeting the needs
of tomorrow and ensuring equality between freight
transportation modes.
In closing, privately owned railroads will continue to
invest the substantial resources necessary to meet market
demand and maintain our core role in the Nation's integrated
transportation network.
We look forward to working with members of this committee
and others in Congress to enact policies that promote
infrastructure investment.
Thank you for your time.
[The prepared statement of Mr. Jefferies follows:]
Prepared Statement of Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads
Introduction
On behalf of the members of the Association of American Railroads
(AAR), thank you for the opportunity to appear before you. AAR members
account for the vast majority of U.S. freight rail volume, employment,
mileage, and revenue. I'd like to extend a special greeting to the new
members of this committee, and offer my congratulations to Chairman
Wicker and Ranking Member Cantwell. Please know that the rail industry
stands ready to work cooperatively with you, other members of this
committee, and other policymakers to help ensure our Nation has the
freight transportation capability it needs to prosper in the future. On
a personal level, most of you probably know that not too many years ago
I was on the Commerce Committee staff. I have fond memories of that
time and I look forward to continuing to work with you to enhance the
safety, productivity, and cost-effectiveness of our Nation's railroads
in my new role as President of the AAR.
As all of you know, when it comes to transportation, we're all in
this together. It's true that the various modes of transportation
compete fiercely against each other in virtually every market they
serve. This competition is healthy and appropriate. At the same time,
though, railroads, trucks, and barges also cooperate extensively in
countless markets. Moreover, all of us involved in freight
transportation know that no country can be a first-rate economic power
without having firstrate logistics and transportation capabilities
across modes.
Today, there is a tremendous amount of strength and flexibility in
America's freight transportation systems. It's also clear, however,
that our Nation faces significant challenges in maintaining our
existing freight-moving capability and in improving it to meet the
needs of tomorrow. One of the key challenges is financial. I'm proud to
represent an industry that is overwhelmingly privately funded. That
said, railroads agree--indeed, they have a strong vested interest--that
adequate investments should be made in public infrastructure like ports
and highways, which combine with rail to make up the Nation's
integrated freight supply chain. As explained below, railroads believe
that for reasons of economic efficiency and modal equity, public
infrastructure funding should adhere as closely as possible to the
principle of ``user pays.''
A Transportation Backbone
The more than 600 freight railroads that operate in the United
States together form the best freight rail network in the world. Their
global superiority is a direct result of a balanced regulatory system
that relies on market-based competition to establish rate and service
standards, with a regulatory safety net available to rail customers
when there is an absence of effective railroad competition.
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Railroads move vast amounts of just about everything, connecting
businesses with each other across the continent and with markets
overseas over a rail network spanning nearly 140,000 miles. Railroads
carry enormous amounts of corn, wheat, soybeans, and other farm
products; fertilizers, plastic resins, and a vast array of other
chemicals; coal to generate electricity; cement, sand, and crushed
stone to build our highways; lumber and drywall to build our homes;
animal feed, canned goods, corn syrup, frozen chickens, beer, and
countless other food products; steel and other metal products;
newsprint, recycled paper and other paper products; autos and auto
parts; iron ore for steelmaking; wind turbines, airplane fuselages,
machinery and other industrial equipment; and much more.
Rail intermodal--the transport of shipping containers and truck
trailers on railroad flatcars--has grown tremendously over the past 25
years, setting a record in 2018. Today, just about everything you find
on a retailer's shelves may have traveled on an intermodal train.
Increasing amounts of industrial goods are transported by intermodal
trains as well.
Given the volume of rail freight (close to two billion tons and 30
million carloads and intermodal units in a typical year) and the long
distances that freight moves by rail (nearly 1,000 miles, on average),
freight railroads' direct role in our economy is immense, but freight
railroads contribute to our Nation in many other ways too:
America's freight railroads are overwhelmingly privately
owned and operate almost exclusively on infrastructure that
they own, build, maintain, and pay for themselves. Since 1980,
freight railroads have plowed more than $685 billion--of their
own funds, not taxpayer funds--on capital expenditures and
maintenance expenses related to locomotives, freight cars,
tracks, bridges, tunnels and other infrastructure and
equipment. That's more than 40 cents out of every revenue
dollar, invested back into a rail network that keeps our
economy moving.
An October 2018 study from Towson University's Regional
Economic Studies Institute found that, in 2017 alone, the
operations and capital investment of America's major freight
railroads supported approximately 1.1 million jobs (nearly
eight jobs for every railroad job), $219 billion in economic
output, and $71 billion in wages. Railroads also generated
nearly $26 billion in tax revenues.
Thanks to competitive rail rates--46 percent lower, on
average, in 2017 than in 1981 adjusted for inflation--freight
railroads save consumers billions of dollars every year.
Millions of Americans work in industries that are more
competitive in the tough global economy thanks to the
affordability and productivity of America's freight railroads.
In 2017, railroads moved a ton of freight an average of 479
miles per gallon of diesel fuel. That's roughly equivalent to
moving a ton from Jackson, MS to Springfield, MO, or Tacoma, WA
to Helena, MT, on a single gallon. On average, railroads are
four times more fuel efficient than trucks. That means moving
freight by rail helps our environment by reducing energy
consumption, pollution, and greenhouse gases.
Because a single train can carry the freight of several
hundred trucks, railroads cut highway gridlock and reduce the
high costs of highway construction and maintenance.
The approximately 167,000 freight railroad professionals are
among America's most highly compensated workers. In 2017, the
average U.S. Class I freight railroad employee earned total
compensation of $125,400. By contrast, the average wage per
full-time equivalent U.S. employee in domestic industries was
$76,500, just 61 percent of the rail figure. Around 80 percent
of the U.S. freight rail workforce is unionized, compared with
only around 6 percent of all private sector workers.
Railroads are safe and constantly working to get even safer.
The train accident rate in 2017 was down 40 percent from 2000;
the employee injury rate in 2017 was down 43 percent from 2000;
and the grade crossing collision rate in 2017 was down 38
percent from 2000. By all these measures, recent years have
been the safest in history. Railroads today have lower employee
injury rates than most other major industries, including
trucking, airlines, agriculture, mining, manufacturing, and
construction--even lower than food stores.
Freight railroads are committed to safely implementing
positive train control (PTC) as quickly as feasible so that
further safety gains can be achieved. The seven Class I freight
railroads all met statutory requirements by having 100 percent
of their required PTC-related hardware installed, 100 percent
of their PTC-related spectrum in place, and 100 percent of
their required employee training completed by the end of 2018.
In aggregate, Class I railroads had 83 percent of required PTC
route-miles in operation at the end of 2018, well above the 50
percent required by statute. Each Class I railroad expects to
be operating trains in PTC mode on all their PTC routes no
later than 2020, as required by statute. In the meantime,
railroads are continuing to test and validate their PTC systems
thoroughly to ensure they work as they should.
Transportation Capacity is Key
The long-term demand for freight transportation in this country
will grow. The Federal Highway Administration forecasts that U.S.
freight tonnage will rise 37 percent by 2040. For railroads, meeting
this demand is all about having adequate capacity and using it well,
and that is what they focus on.
The capital intensity of freight railroading is at or near the top
among all U.S. industries. In recent years, the average U.S.
manufacturer spent approximately three percent of revenue on capital
expenditures. The comparable figure for freight railroads is nearly 19
percent, or more than six times higher.
Thanks to their massive investments, freight railroad
infrastructure today is in its best overall condition ever. The
challenge for railroads, and for policymakers, is to ensure that the
current high quality of rail infrastructure is maintained, and that
adequate freight rail capacity exists to meet our Nation's current and
future freight transportation needs. Policymakers can help by enacting
policies that promote safety and efficiency and by avoiding policies
that discourage private rail investment.
Keep Railroad Rate and Service Regulation Balanced
The current structure of rail regulation relies on competition and
market forces to determine rail rates and service standards in most
cases, with maximum rate and other protections available to rail
customers when there is an absence of effective competition. This
deregulatory structure has benefited railroads and their customers.
However, despite the severe harm caused by excessive railroad
regulation in years past and the substantial public benefits that have
accrued since the current less regulatory regime was put in place, some
want to again give government regulators control over crucial areas of
rail operations. That would be a profound mistake. It would prevent
America's railroads from making the massive investments a best-in-the-
world freight rail system requires. Policymakers should be taking
actions that enhance, rather than impair, railroads' ability and
willingness to make those investments.
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Engage in Public-Private Partnerships Through Projects and Programs
Public-private partnerships--arrangements under which private
freight railroads and government entities both contribute resources to
a project--offer a mutually beneficial way to solve critical
transportation problems.
Without a partnership, many projects that promise substantial
public benefits (such as reduced highway congestion by taking trucks
off highways, or increased rail capacity for use by passenger trains)
in addition to private benefits (such as enabling more efficient
freight train operations) are likely to be delayed or never started at
all because neither side can justify the full investment needed to
complete them. Cooperation makes these projects feasible.
With public-private partnerships, the public entity devotes public
dollars to a project equivalent to the public benefits that will
accrue. Private railroads contribute resources commensurate with the
private gains expected to accrue. Thus, the universe of projects that
can be undertaken to the benefit of all parties is significantly
expanded.
The most well-known public-private partnership involving railroads
is the Chicago Region Environmental and Transportation Efficiency
Program (CREATE), which has been underway for a number of years. CREATE
is a multi-billion-dollar program of capital improvements aimed at
increasing the efficiency of the region's rail and roadway
infrastructure. A partnership among various railroads, the City of
Chicago, the state of Illinois, the Federal Government, and Cook
County, CREATE comprises 70 projects, including 25 new roadway
overpasses or underpasses; six new rail overpasses or underpasses to
separate passenger and freight train tracks; 35 freight rail projects
including extensive upgrades of tracks, switches and signal systems;
viaduct improvement projects; grade crossing safety enhancements; and
the integration of information from the dispatch systems of all major
railroads in the region into a single display. To date, 29 projects
have been completed, six are under construction, and 16 are in various
stages of design.
The intersection of rail tracks and roadways is an important
element of rail infrastructure that often involves a public-private
cooperative approach. Under the Federal ``Section 130'' program,
approximately $230 million in Federal funds are allocated each year to
states for installing new active warning devices, upgrading existing
devices, and improving grade crossing surfaces. The program also allows
for funding to go towards highway-rail grade separation projects.
Without a budgetary set-aside like the Section 130 program, grade
crossing needs would fare poorly in competition with more traditional
highway needs such as highway construction and maintenance. The 2015
FAST Act included continued dedicated funding for this important
program for five more years. Railroads urge Congress to continue to
support the Section 130 program. It is another example of cooperation
between private railroads and public entities to help ensure that rail
infrastructure benefits the general public.
Railroads also urge Congress to support a permanent extension of
the ``Section 45G'' short line tax credit program. Section 45G creates
a strong incentive for short line railroads to invest private sector
dollars on freight railroad track rehabilitation. Short line freight
rail connections are critical to preserving the first and last mile of
connectivity to factories, grain elevators, power plants, refineries,
and mines in rural America and elsewhere.
Address Modal Inequities
As mentioned earlier, America's freight railroads operate
overwhelmingly on infrastructure that they own, build, maintain, and
pay for themselves. By contrast, trucks, airlines, and barges operate
on highways, airways, and waterways that are largely taxpayer funded.
No one, and certainly not railroads, disputes that other
transportation modes are crucial to our nation, and the infrastructure
they use should be world-class--just like U.S. freight railroad
infrastructure is world class. That said, public policies relating to
the funding of other modes have become misaligned.
With respect to federally funded capacity investments in public
road and bridge infrastructure, the United States has historically
relied upon a ``user pays'' system. Until relatively recently, that
system worked well. Unfortunately, the user-pays model has been eroded
as Highway Trust Fund (HTF) revenues have not kept up with HTF
investment needs and so have had to be supplemented with general
taxpayer dollars. Including general fund transfers scheduled to be made
in the next few years through provisions of the FAST Act, general fund
transfers to the HTF since 2008 have totaled almost $144 billion,
according to the Congressional Budget Office (CBO). The CBO recently
estimated that between 2020 and 2029, the HTF will require $191 billion
in additional payments to keep the fund solvent.
Moving away from a user-pays system distorts the competitive
environment by making it appear that trucks are less expensive than
they really are and puts other modes, especially rail, at a
disadvantage. This is especially problematic for railroads precisely
because they own, build, maintain, and pay for their infrastructure
themselves (including paying well over a billion dollars in property
taxes each year on that infrastructure).
Congress could help ameliorate this modal inequity by reaffirming
the ``user pays'' requirement. Through application of current
technology, the current fundamental imbalance could be rectified by
ensuring that commercial users of taxpayer-financed infrastructure pay
for their use.
This could be done through several different mechanisms. To its
credit, the American Trucking Associations (ATA), through its Build
America Fund proposal, is calling for a 20 cent per-gallon increase in
the fuel tax phased in over four years, a recognition by the ATA that
the current situation regarding the HTF is not tenable. Railroads
believe that an increase in the fuel tax could be helpful as a short-
term bridge to a longer-term future that, we think, should include a
vehicle miles traveled fee or a weight-distance fee.
A handful of states already impose weight-distance taxes on heavier
trucks, and others are engaged in pilot programs to assess the
feasibility of transitioning their state highway taxes from a per
gallon-based system to a mileage-based fee. In Oregon, for example,
heavy trucks are charged a weight-mile tax that is intended to capture
the full costs incurred by trucks relating to the state highway system.
First-Mile and Last-Mile Connections
One of the main reasons why the United States has the world's most
efficient total freight transportation system is the willingness and
ability of firms associated with various modes to work together in ways
that benefit their customers and the economy. Policymakers can help
this process by implementing programs that improve ``first mile'' and
``last mile'' connections where freight is handed off from one mode to
another--for example, at ports from ships to railroads or from ships to
trucks, or from railroads to trucks at intermodal terminals. These
connections are highly vulnerable to disruptions, and improving them
would lead to especially large increases in efficiency and fluidity and
forge a stronger, more effective total transportation package.
Some multimodal connection infrastructure projects that are of
national and regional significance in terms of freight movement could
be too costly for a local government or state to fund. Consequently,
Federal funding awarded through a competitive discretionary grant
process is an appropriate approach for these needs.
The Transportation Investment Generating Economic Recovery (TIGER)
Federal grant program; its replacement, the Better Utilizing
Investments to Leverage Development (BUILD) Transportation grant
program; and the Infrastructure for Rebuilding America (INFRA) grant
program are examples of approaches to help fund crucial multimodal
projects of national and regional significance.
Together, these programs have directed billions of dollars to
critical infrastructure projects all over the country. Examples include
a 2016 TIGER award to help modernize the Port of Everett (Washington)
South Terminal. The project includes strengthening more than 500 feet
of dock, creating a modern berth capable of handling roll-on/roll-off
and intermodal cargo, and upgrading high voltage power systems. The
project will also construct rail sidings to increase on-site rail car
storage. Back in 2013, TIGER funds were also directed to improve multi-
modal connections at Mississippi's Port of Pascagoula Bayou Harbor, run
by the Jackson County Port Authority. The funding was aimed at making
the transportation of goods in and out of the Port more efficient and
to develop a modern facility for receipt, storage, and export of
renewable energy resources.
Attention to first-and last-mile connections is a critical element
of both local and state freight planning and policy as well. At the
local level, land use planning has been largely inadequate in
accommodating the needs of freight. Freight movement--whether in rail
yards, intermodal facilities, ports, or regional distribution--must be
sufficiently considered when planning land uses such as residential
developments, schools, and recreational areas.
Flexibility Through Regulatory and Permitting Reform
There is bipartisan agreement that America's regulatory processes
require reform and could more accurately reflect rapid technological
advancements. Improved regulations and regulatory processes can also
help improve U.S. infrastructure.
Federal regulations provide a critical safety net to the American
public, but rules borne from faulty processes only deter economic
growth without any corresponding public benefits. Dictating the means
to an end via overly prescriptive policy increases compliance costs,
can chill innovation and investment in new technologies. and can slow,
or defeat entirely, an outcome both industry and government would view
as a success.
There is currently a unique opportunity to not only address
specific, harmful policies, but also to improve the system that creates
rules by incorporating common sense principles. Regulations should be
based on a demonstrated need, as reflected in current and complete data
and sound science. Regulations should provide benefits outweighing
their costs and should take into consideration the big picture view for
industries and sectors--including market forces, future offerings, and
current regulations in place.
The freight rail industry believes policymakers should embrace
performance-based regulations, where appropriate, to foster and
facilitate technological advancement and achieve welldefined policy
goals. Defining the end goal, rather than narrow steps, will boost
citizen confidence in government, motivate U.S. industry to research
and innovate, and create new solutions. Outcome-based measures can
better avoid ``locking in'' existing technologies and processes so that
new innovations, including new technologies, that could improve safety
and improve efficiency, can flourish.
That's also why railroads respectfully urge policymakers to avoid
one-size-fits-all policies that hinder modernization of safety
practices and improvements to efficiency, such as policies that mandate
a specific crew size for rail operations. We all want railroad safety
and efficiency to continue to improve. Technological solutions are key
to making this happen, but that requires regulatory oversight not
prescriptive mandates.
As mentioned earlier, railroads are safe and getting safer, but
more can be done by railroads, their employees, the FRA, and others
working together to achieve the long-term goal of zero accidents.
Regulatory reform can be a key part of that effort. Railroads
respectfully urge this committee and others in Congress to encourage
the FRA to become more forward-looking in how it proposes and
promulgates new rules.
We also urge policymakers to streamline the permitting process to
spur infrastructure investment. Railroads have faced significant
permitting delays from Federal agencies, which means that the amount of
time and energy it takes to get many rail infrastructure projects from
the drawing board to construction and completion has been growing
longer every day.
In the face of local opposition, railroads try to work with the
local community to find a mutually satisfactory arrangement, and these
efforts are usually successful. When agreement is not reached, however,
projects can face lawsuits, seemingly interminable delays, and sharply
higher costs. Rail capacity, and railroads' ability to provide the
transportation service upon which our Nation depends, suffer
accordingly. Recent efforts by Congress and the Administration are
noteworthy and appreciated, but more must be done.
Support Commuter and Passenger Rail
Freight railroads agree that passenger railroads play a key role in
alleviating highway and airport congestion; decreasing dependence on
foreign oil; reducing pollution; and enhancing mobility, safety, and
economic development opportunities. In the United States, freight
railroads provide a crucial foundation for passenger rail: more than 70
percent of the miles traveled by Amtrak trains are on tracks owned by
other railroads--mainly freight railroads--and many commuter railroads
operate at least partially on freight-owned corridors.
Policymakers can help here too by recognizing that Amtrak should be
adequately funded so that its infrastructure can be improved to a state
of good repair. Commuter railroads too deserve this Committee's
support.
Conclusion
Of the many different factors that affect how well a rail network
functions, the basic amount and quality of infrastructure is among the
most significant. That's why U.S. freight railroads have been
expending, and will continue to expend, enormous resources to
continuously improve safety and improve their asset base. Policymakers
too have a key role to play. Freight railroads look forward to working
with this Committee, others in Congress, and other appropriate parties
to develop and implement policies that best meet this country's
transportation needs.
The Chairman. Thank you very much, Mr. Jefferies.
And before recognizing the other three witnesses, we now
have a quorum and without further delay, I will call the
Executive Session into order.
[Recess to proceed to Executive Session.]
The Chairman. Mr. Polka, you are now recognized for 5
minutes. Thank you.
STATEMENT OF MATTHEW M. POLKA, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AMERICAN CABLE ASSOCIATION
Mr. Polka. Thank you. Chairman Wicker, Ranking Member
Cantwell, and members of the Committee, I appreciate the
opportunity to testify today on behalf of the more than 750
members of the ACA who typically serve just 1,000 customers in
small and rural communities.
I am very proud of the work that our members do to serve
their communities with essential broadband video and voice
service. The fact that they succeed as small entities that
compete in an industry of corporate giants is remarkable.
Today, I highlight for you what our members tell me are
their challenges and priorities in deploying broadband and, as
a result, what you may consider in helping to solve these
challenges.
Our members see themselves as part of the solution working
with you step by step. In short, what dominates the thinking of
ACA members is overcoming the daily challenge of finding the
capital to invest in resources to operate and upgrade services
in high-cost areas, and to do so with no benefit of scale in
any negotiation for content or technology, all while serving
cost-sensitive consumers.
Despite this daily reality for them, they want you to know
of their commitment in the private sector to continue to make
enormous investments to provide broadband and video services on
their own.
Now let me turn to the four areas of insight that they want
me to share with you and as I do so, I'm aware that some of
these points may seem mundane, but I can assure you on their
behalf that these points are critical.
First, ACA members have told us about the challenges they
face in both obtaining and maintaining access to rights-of-way
owned by local governments. Some local government entities
charge or are seeking to charge cable operators for using the
public rights-of-way to provide broadband service, even though
these operators already pay a fee for video access.
Second, ACA members tell us that private entities limit and
even prohibit access to rights-of-way. For instance, railroads
often charge unreasonably-high fees to install fiber over or
under their rights-of-way, or are slow to grant rights, and I'm
very pleased to be here today with Mr. Jefferies and I look
forward to working with him and talking with him about those
issues.
Third, ACA members also tell us we are missing too many
opportunities where their broadband distribution facilities
could be added to existing conduits and where they could share
in the cost and installation of such new facilities.
For similar facilities installed by private entities, our
members think the Government should require a sharing process
similar to Dig Once.
Finally, the Government should support private investment
where possible, and be more selective when it decides to
provide money to any entity to build new telecommunications
infrastructure.
I would urge you to make sure that any new source of funds,
whether they are USF, RUS, or some other program, are used only
to deploy in unserved areas and that the Federal Government
does not subsidize overbuilding.
For example, where you make new investments, which will be
necessary in some remote areas, we would encourage you to
replicate the FCC's Connect America Program's features that
target unserved markets and award funds via reverse auctions.
In the meantime, ACA members will continue to invest and
improve our networks and ensure that our communities are
competitive and connected, and as this committee acts to
address our Nation's critical broadband infrastructure needs,
you can count on the commitment of the innovative and
independent members of the American Cable Association.
Thank you.
[The prepared statement of Mr. Polka follows:]
Prepared Statement of Matthew M. Polka, President and CEO,
American Cable Association
Chairman Wicker, Ranking Member Cantwell, and Members of the
Committee, I am Matthew Polka, President and CEO of the American Cable
Association (ACA), and I want to thank you for inviting me to testify
today on America's Infrastructure Needs and more specifically our
broadband infrastructure needs.
I can break down ACA's overall assessment of broadband
infrastructure in the United States and our needs into three parts.
First, overall the news is good. Fixed and mobile broadband providers,
including ACA members, are investing about $75 billion annually, and
they should continue investing at approximately this same level for
years to come. As a result, the performance and reach of their
broadband networks have been greatly enhanced. Here, our top priority
should be to do everything we can to ensure providers are not
discouraged from continuing to make these investments. Second, even
though the news is good, public and private sector barriers exist that
hinder deployments. This unnecessary friction increases the costs and
slows the speed of broadband deployments. Congress and the Federal
Communications Commission (FCC) have already taken steps to address
these problems, but more can and should be done. Third, we need to
effectively and efficiently close the digital divide so that all
Americans have similar opportunities to access our broadband
information highways and fully participate in our 21st Century economy
and educational, social, and political activities. Here too, Congress,
the FCC, the Rural Utilities Service, and many States have acted, and
we have made real headway, but again, more can and should be done. Let
me first review further where our broadband infrastructure stands today
and then elaborate on each of the three points I just raised.
ACA's Assessment of the State of Broadband Infrastructure in the United
States
ACA's more than 750 broadband and video service provider members,
who pass more than 18 million homes in all areas of the country and
provide service to approximately 7 million broadband subscribers, have
great experience in deploying broadband networks. During the past six
years, ACA members have invested more than $12 billion to upgrade and
expand their networks, in both rural areas and as overbuilders bringing
competition in urban areas,\1\ and they plan to continue to spend
billions each year to meet the ever growing demands of their
subscribers for real-time, highspeed access to the Internet and other
IP services. Many ACA members have deployed Gigabit broadband service,
and many more intend to do so this year.
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\1\ This investment would be greater if not for regulatory
barriers, including those discussed herein and in ACA's 2015 study on
how rapidly rising video programming fees act as a drag on investment.
See ACA, ``High and Increasing Video Programming Fees Threatens
Broadband Deployment'' (2015), https://drive.google.com/file/d/
0BxUDdYFi5gnEa2xJdnhwSThWUUE/view?usp=sharing.
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ACA members are not alone in making such substantial investments.
As I just discussed, fixed and mobile broadband providers are investing
enormous sums annually in their networks and related businesses, with
cable operators alone investing approximately $20 billion each year.
These investments feed the two critical technologies for our broadband
future--wireless 5G and wireline 10G. These technologies will work in
tandem, with 10G not only connecting residents, business, and
institutions directly but enabling 5G connectivity as well. That said,
it is important to understand that while 5G wireless networks are
critical to our Nation's future, advanced wireline networks will
outperform wireless networks and provide the connectivity consumers and
businesses will need as more bandwidth intensive applications and
content flow over broadband pipes. That is why any broadband
infrastructure legislation needs to address both our 5G and 10G future.
The Committee also should understand that ACA members and other
broadband providers are not just upgrading and expanding their networks
in ``served'' areas, but they are using their capital to bring service
to unserved areas. To date, ACA members alone have invested private
funds to build out to more than 840,000 homes that the FCC would
otherwise consider high-cost areas eligible for Federal universal
service support.
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These investments not only reduced the areas where Federal
universal support is needed, but they ``freed-up'' Federal support
going into these areas, which could be used to bring broadband to
unserved areas that were not receiving any support.
The FCC too has taken significant steps by reforming its universal
service programs to close the digital divide. As I will detail later in
my testimony, the FCC's high-cost programs alone, which award more than
$4 billion annually, have already brought broadband service to many
millions of homes in unserved areas, and they are certain to close the
gap even further in the near future.
The Rural Utilities Service (RUS) also is providing through its
ongoing programs substantial support to build broadband networks in
high-cost areas. Appropriations for FY2019 will enable almost $30
million in broadband loans and provide for $30 million for Community
Connect grants. These amounts are in addition to appropriations for the
Telecommunications Infrastructure program, which will enable almost
$700 million in loans. Moreover, in the 2018 appropriations, Congress
provided an additional $600 million to RUS for broadband buildout in
unserved areas over the next two years.
So, in brief, because of the enormous amount of capital investment
by providers, the FCC's reforms to its universal service programs, and
the many RUS programs, over the past decade we have made tremendous
progress in bringing fixed broadband service to all Americans.
Notwithstanding the size and rural footprint of the country, more than
97 percent of American households, including about 90 percent of rural
households, have access to fixed broadband service with speeds of 10
Mbps or greater. That is a 40 percent reduction in unserved households
in just the past four years, leaving fewer than five million homes
without access to broadband service at speeds less than 10 Mbps.\2\
Further, more than 100 million homes have access to broadband speeds
greater than 100 Mbps, and that number is growing significantly each
year.
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\2\ Between 2013 and 2017, the percentage of Americans with access
to speeds greater than 25 Mbps increased from approximately 84 percent
to 94 percent and in rural areas from 48 percent to 76 percent overall.
See Federal Communications Commission, 2018 Communications Marketplace
Report at 136, Fig. G-4 (Dec. 26, 2018), https://docs.fcc.gov/public/
attachments/FCC-18181A1.pdf.
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By 2020, the FCC's current Connect America programs should reduce
these five million unserved households even further, such that only
about three million homes will be without fixed broadband service. And,
when the FCC launches the Remote Areas Fund and the new RUS program
gets underway, we should get much closer to bringing broadband to
everyone.
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Our current broadband ``success'' should be heralded, but more can,
and should, be done. We should now move forward based on all that we
have learned. We should acknowledge that in all areas, both served and
unserved, providers continue to face barriers imposed by both the
government and private entities that add cost to broadband builds,
thereby reducing their reach and capabilities. Moreover, we need to do
more to efficiently and effectively bring broadband to all Americans.
Congress should address these issues in any broadband infrastructure
legislation.
To that end, let me share with the Committee ACA's four principles
for our broadband future: (1) respect private investment; (2) remove
barriers to deployment; (3) before adopting additional programs to
close the digital divide, account for additional deployments in
unserved areas resulting from the removal of barriers, the recently
enacted tax law, and existing Federal and state support programs; and
(4) provide broadband subsidies efficiently.
Principle #1: Respect private investment. As I noted at the outset,
overall broadband providers, both fixed and mobile, are spending some
$75 billion annually on infrastructure, and there is every indication
this level of spending will continue absent actions by the government
that would discourage it. We, therefore, urge you and the Federal
agencies to refrain from imposing harmful new regulations on broadband
providers where investment and deployment could be curtailed because
the regulatory costs exceed their benefits. This is most important for
smaller providers, who have far fewer resources to deal with government
rules and regulations. In addition, the government should award any new
government support only in areas where existing providers have not
deployed infrastructure or where such deployments are unlikely in the
near future.\3\ Nothing will undermine our broadband future more than
signaling to private investors that their returns on investment are
uncertain, or, even worse, in jeopardy.
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\3\ ACA notes that smaller local telephone companies have
demonstrated, for the most part, competence in providing
telecommunications service in high-cost, rural areas. They operate in
fewer and much smaller service territories and also tend to be less
diversified than the major telephone providers. Any action by Congress
or the FCC to implement these principles should continue to account for
the value these companies deliver.
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Principle #2: Remove barriers to deployment. Building high-
performance broadband networks is costly, and ACA members tell us that
there are a series of problems they face and actions that you can take,
without spending a penny, that will ``move the deployment needle.'' The
chart on page 13 below, which breaks down the total cost of deploying
and operating fiber-to-the-home networks, indicates the greatest
deployment costs and should help you target your solutions. For
instance, network costs related to pole attachments account for
approximately 13 percent of total cost of ownership. That is a big
number. Fortunately, last summer, the FCC adopted an order that reduced
many barriers ACA members face in seeking to attach to poles owned by
investor owned utilities and incumbent telecommunications carriers.
That said, virtually every week we hear from members about problems
with pole attachments, so Congress and the FCC should be vigilant and
conduct regular oversight and then address attachment concerns that
pose real threats to deployments.
Installing conduits and ducts is another significant cost of owning
a wireline network. Congress helped address this matter with the
Broadband Infrastructure Deployment provision contained in the MOBILE
NOW Act passed last year.\4\ This provision will help lower the cost of
ownership by facilitating the installation of conduits and ducts by
states in highway rights-of-way when new construction and major
upgrades are underway, rather than having to spend large sums afterward
to tear up roadways. That said, we urge Congress to further build upon
last year's legislation to ensure that such cost saving practices are
actually implemented.
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\4\ See Consolidated Appropriations Act, 2018, Pub. L. No. 115-141,
132 Stat. 348, Division P, Title VI (MOBILE NOW Act), Sec. 607
(codified at 47 U.S.C. Sec. 1504).
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Further, Congress has recognized that broadband providers,
particularly in rural areas, require access to Federal lands on
reasonable terms to deploy their facilities. Specifically, it
understood that often Federal agencies take too long to approve access
applications, which forestalls, and drives up the cost of, deployments.
The MOBILE NOW Act addressed this problem by requiring Federal
executive agencies to be more responsive to requests from
communications providers for access to easements, rights-of-way, and
leases, and in other ways.\5\ Federal agencies are now implementing
those Congressional directives, and we urge Congress to ensure they act
consistent with the need to expedite access to Federal lands.
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\5\ See MOBILE NOW Act, Sec. 606.
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ACA members also continue to encounter other barriers to their
broadband deployments, including:
ACA members have told us about challenges they face in both
obtaining and maintaining access to rights-of-way owned by
local governments. For instance, some local government entities
charge or are seeking to charge cable operators for using the
public rights-of-way to provide broadband service even though
these operators already pay a fee for video access, and their
networks impose no additional burden on the rights-of-way. As
you well know, when you tax something, you only get less of
it--and no one wants less broadband.
ACA members also tells us that private entities limit and
even prohibit access to rights-of-way. For instance, railroads
often charge unreasonably high fees to install fiber over or
under their rights-of-way. In fact, sometimes these fees are so
unfair that they block deployments entirely.\6\ Other times,
railroads are very slow to grant rights.\7\ To date, only a few
states have stepped in to regulate these fees or establish
timelines for obtaining rights.
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\6\ See Letter From Thomas Cohen, Counsel to ACA, to Marlene H.
Dortch, Secretary, FCC (dated Apr. 23, 2017), https://ecfsapi.fcc.gov/
file/104030805116267/ACA_Summit_Infrastruc
ture_Ex_Parte_04032017.pdf.
\7\ See ACA, Comments in FCC Proceeding on Accelerating
Infrastructure Deployment, WC Docket No. 11-59 (Sept. 30, 2011),
https://ecfsapi.fcc.gov/file/7021712335.pdf.
ACA members also tell us that we are missing too many
opportunities to permit them to access existing conduit and
ducts and to share in the cost of and access to new conduit and
ducts or new opportunities to install them. For existing
conduits and ducts, our providers find that there is a lack of
information about their location and availability, and even
once they have such information, they find that installation
fees and construction costs are frequently unreasonable. For
new conduits and ducts installed by private entities, they
recommend the government require a sharing process similar to
``Dig Once.'' That is, any provider opening a new trench to
install conduit and ducts should be required to notify other
providers of the opportunity to install their own facilities
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and share in the cost.
Principle #3: Before determining unserved areas where new support
programs should be provided, account for the additional deployments in
unserved areas that will result from the removal of barriers, the
recent tax law, and existing Federal and state support programs. By
adopting this approach, we will ensure that we maximize use of limited
Federal funds. To that end, ACA has calculated that actions taken so
far by the FCC to remove barriers to deployment and potential
additional actions will lower the cost of network deployment
sufficiently such that 1.2 million unserved homes will become suitable
for broadband providers to spend private money to deploy hybrid fiber/
coax or fiber-to-the-home broadband services \8\--all without spending
additional government funds. Removal of these barriers also will
encourage providers using other technologies, including fixed wireless
and DSL, to upgrade their networks and expand them into additional
unserved areas.
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\8\ ACA estimates that such deployments will create almost 20,000
new jobs.
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In addition, further network investment is being propelled by the
recent tax statute. The law permits broadband providers to ``expense''
their network investments immediately and cuts the corporate tax rate
to 21 percent, which already has resulted in providers increasing their
capital spending. We expect this increased spending to continue. We
estimate that the new tax law will turn more than 400,000 homes in
unserved areas into economically viable areas ripe for private
investors to build high-speed broadband or fiber-to-the-home services.
We also should recognize that the FCC is providing more than $4
billion annually to bring broadband to unserved and high-cost areas.
Additionally, the broadband programs of the RUS provide tens of
millions of loans annually for rural builds, and the Re-Connect
broadband program launched by Congress last year has $600 million in
funding for loans and grants over the next two years. States also are
implementing their own support programs. By our calculations, the
current Federal Connect America programs alone, by 2020, should reduce
the number of ``unserved'' homes by 2 million, and even more by later
in the next decade, and RUS and state efforts will reduce them even
further. In fact, it would be valuable for an agency like the National
Telecommunications and Information Administration to report to Congress
each year on the effect all Federal and state programs have on reducing
the number of unserved locations. In sum, the government is already
well on its way to closing the digital divide, and it should take
account of the gains that are being achieved by removing barriers to
deployment, the recent tax cut, and existing support programs before
determining how much and where to spend additional funds to bridge the
digital divide.
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Principle #4: After removing barriers to deployment, accounting for
the tax cut and current Federal and state support programs, where
unserved locations remain, the government should provide subsidies to
bring broadband to these unserved locations and do so efficiently. The
FCC has essentially provided the roadmap for awarding support
efficiently with the Connect America programs it initiated in its major
reform in 2011. The FCC has reshaped and continues to refine these
programs so that its limited support is awarded much more efficiently.
It has sought to target support in price cap carrier territories only
to unserved areas, and last year, it awarded for the first time fixed
broadband support using a reverse auction. ACA believes you should
adhere to the following guidelines in distributing any new money to
close the remaining digital divide.
Provide subsidies for broadband only in unserved, high cost
areas. ACA supports the FCC's current definition providing that
an area is unserved if no provider offers 10/1 Mbps broadband
service. While ACA understands the urge to ``bid-up'' these
speeds, ACA cautions that we should not divert our attention
from bringing service to those areas currently deemed unserved.
In addition, any change in the definition of unserved must not
result in any overbuilding of providers that are investing
private capital. That would be especially counterproductive.
Finally, you should keep in mind that as you increase the speed
threshold for determining whether an area is unserved, because
higher speed services costs more to deploy, you lower the
number of locations that will receive service.
Limit the amount of Federal support for broadband buildout
in an area to account for subsidies provided by states, unless
any additional broadband performance is required. It would be
inefficient and a waste of scarce Federal support to enable
recipients of such support to also receive state funding if
they are only required to meet the Federal broadband public
interest requirements. This is because the Federal program
already contemplates these requirements would be met. In the
future, any Federal program that provides support for unserved
locations should account for any funding from a state program
that provides support to achieve the same result. This might be
done by requiring the recipient of funding from both programs
to provide higher speed service or meet faster deployment
deadlines. For instance, the FCC and New York State developed
(and ACA supported) an approach where providers in that state
could receive support from both the FCC's Connect America
program and New York State's Empire State Development program
to deploy broadband networks that are faster than those
available under the FCC's Connect America program alone.\9\
Such an approach is a potentially valuable model for propelling
higher performance networks sooner in unserved areas. But,
absent such enhanced obligations, a recipient of Federal
support should not receive state support to provide the same
service.
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\9\ Letter From Ross Lieberman, Senior Vice President of Government
Affairs, ACA to Marlene H. Dortch, Secretary FCC (dated Jan. 12, 2017),
https://ecfsapi.fcc.gov/file/1011376742036/
ACA_Ex_Parte_Letter_re_State_Initiatives_and_NY_State_Proposal_01132017.
pdf.
Use reverse auctions to distribute support for network
deployments to maximize cost-efficiency. Prior to 2011, the FCC
awarded high-cost universal support only to incumbent telephone
companies through a complex array of factors that were out of
sync with how modern broadband networks are built and operated.
The FCC also understood that bringing broadband to unserved
areas would be very expensive and, to maximize use of its
limited funding, it needed to award support much more
efficiently. Last year's reverse auctions demonstrated that
they award support much more efficiently than using cost
models--lowering the cost of providing support to serve an area
by approximately 70 percent.\10\ ACA thus urges that any new
funding be given out using a reverse auction approach (as
adjusted for the removal of barriers to deployment).
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\10\ See Connect America Fund Phase II Auction Results, Rural
Broadband Auctions Task Force, Federal Communications Commission, Open
Meeting, September 26, 2018, https://youtu.be/aHMVuMWtrG4 (presentation
begins at 27:45). The reserve price for the auction as established by
the cost model was $5 billion. The final awards totaled $1.49 billion.
In addition, more than 50 percent of the locations were to receive
service at speeds of at least 100/20 Mbps, which is far in excess of
the speeds required for price cap carriers electing to receive support
pursuant to the cost model.
ACA has established its principles by learning from the experiences
and expertise of its members and by seeing over the past decades
policies that have--and have not--worked. From our conversations with
Members of the Committee, you too understand what it takes to bring
broadband to all Americans. At the end of the day, ACA's principles
will maximize consumer welfare, increase economic growth, and make
communities throughout the country thrive. As for additional
legislation, we urge the Committee to examine the approach we have just
set forth. We believe it will enable you to drive broadband deployments
in all areas of the country.
In closing, I want to commend the Chairman, Ranking Members, and
other Members of the Committee for their intense and well-considered
focus on accelerating high-performance broadband deployment to all
Americans. ACA and its members stand ready to assist you in this
endeavor.
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The Chairman. Thank you very, very much, Mr. Polka.
Mr. Chris Spear of the American Trucking Association.
STATEMENT OF CHRIS SPEAR, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AMERICAN TRUCKING ASSOCIATIONS
Mr. Spear. Mr. Chairman, Ranking Member Cantwell, and
members of the Committee, thank you for the opportunity to
testify this morning on behalf of the American Trucking
Association.
The ATA's an 86-year-old federation representing 50 state
trucking associations. Our industry supports more than 7.7
million employees or one in 18 jobs in the United States where
a truck driver is the top job in 29 states.
In Mississippi, trucks haul 90 percent of the freight and
70 percent of the freight delivered from Washington State.
Nationally, trucking moves 71 percent of the domestic freight
tonnage. That's more $10 trillion worth of goods streamed
across a national network of roads and bridges that define
interstate commerce.
Without trucks, our cities, towns, and communities would
lack the key necessities, including food and drinking water.
There'd be no clothes to purchase and no parts to build
automobiles or fuel to power them.
The rail, air, and water intermodal sectors would not exist
in their current form without the trucking industry to support
them, and every time the Government makes a decision that
affects the trucking industry, those impacts are felt by
individuals and the millions of businesses that could not exist
without trucks.
Our roads and bridges are literally crumbling. Last week,
chunks of falling concrete struck cars traveling under bridges
in California and Massachusetts. We are no longer facing a
future highway maintenance crisis. We're living it. And every
day we fail to invest, we're putting more lives at risk and
truck drivers are on the front lines.
Each day they see potholes getting deeper, bridges getting
weaker, and as a result, the safety of the motoring public
increasingly compromised. In nearly 53 percent of the highway
fatalities, the condition of the roadway contributed.
Time wasted sitting in bottleneck traffic rather than at
work or with our families has skyrocketed. Motorists now pay an
average of $1,600 due to repairs and congestion each year.
Trucking now loses $74.5 billion sitting in gridlock. That
equates to 1.2 billion lost hours or 425,000 truck drivers
sitting idle for an entire year.
These are the regressive costs of doing nothing and they're
reflected in the prices we all pay. These costs to consumers
and the economy are measurable and they can and should serve as
offsets for new spending on our Nation's infrastructure.
ATA believes our Nation's roads and bridges should be paid
for by users. While trucks make up just 4 percent of the
vehicles on our Nation's highways, trucking pays for nearly
half of the Highway Trust Fund and we're willing to pay more.
ATA advocates the passage of a BUILD America Fund
consisting of a modest increase in the price of fuel. The BUILD
America Fund would increase the price of fuel 20 cents per
gallon at the fuel rack, just a nickel a year over 4 years,
generating $340 billion over 10 years.
This new revenue is real, not fake funding, like P3s or
asset recycling. The BUILD America Fund is the most
conservative proposal, costing less than one cent on the dollar
to administer versus up to 35 cents a dollar for tolling
schemes.
Last, our proposal is sustainable. It shores up the Highway
Trust Fund which will go broke in just a couple of years
without action, and it doesn't add one dime to our Nation's
debt.
In summary, our Nation's growing economy is placing
significant demands on all transportation modes. Federal
inaction has prompted cash-strapped states to adopt regressive
revenue schemes that hurt commuters, communities, and divert
funds to non-infrastructure priorities.
Look no further than the 10-mile stretch of I-66 just
minutes away from this hearing room. A year ago, this short
patch of Virginia interstate went to congestion pricing. As a
result, I-66 commuters now pay peak toll of $47.50 one way 1
day one road.
For many who can't afford peak prices, they are either
forced to drive through residential areas and school zones or
navigate a costly maze of public transportation connections
which are often delayed or down due to under-investment.
Under the BUILD America Fund, that same driver paying
$47.50 for a 10-mile stretch of I-66 would pay just $2 a week
for all roads and bridges in the United States.
President Reagan understood why our approach makes the most
sense, which is why he signed a user fee increase into law
twice during his Administration. Now is the time for the
Senate, House, and this President to come together and do
what's right for America.
Thank you, Mr. Chairman.
[The prepared statement of Mr. Spear follows:]
Prepared Statement of Chris Spear, President and Chief Executive
Officer, American Trucking Associations
Chairman Wicker, Ranking Member Cantwell, and members of the
committee, thank you for providing the American Trucking Associations
(ATA) \1\ with the opportunity to testify on our Nation's
infrastructure needs.
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\1\ American Trucking Associations is the largest national trade
association for the trucking industry. Through a federation of 50
affiliated state trucking associations and industry-related conferences
and councils, ATA is the voice of the industry America depends on most
to move our Nation's freight. Follow ATA on Twitter or on Facebook.
Trucking Moves America Forward.
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Trucking is the fulcrum point in the United States' supply chain.
This year, our industry will move 70 percent of the Nation's freight
tonnage, and over the next decade will be tasked with moving nearly
three billion more tons of freight than it does today while continuing
to deliver the vast majority of goods.\2\ Trucks haul 90 percent of the
freight originating in Mississippi and 70 percent of the freight
delivered from Washington State. In 2017, the goods moved by trucks
were worth more than $10 trillion.\3\ The trucking industry is also a
significant source of employment, with 7.7 million people working in
various occupations, accounting for every 1 in 18 jobs in the U.S.\4\
Furthermore, ``truck driver'' is the top job in 29 states.\5\
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\2\ Freight Transportation Forecast 2018 to 2029. American Trucking
Associations, 2018.
\3\ 2017 Commodity Flow Survey Preliminary Report. U.S. Census
Bureau, Dec. 7, 2018.
\4\ American Trucking Trends 2018, American Trucking Associations.
\5\ https://www.marketwatch.com/story/keep-on-truckin-in-a-
majority-of-states-its-the-most-popular-job-2015-02-09
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Without trucks, our cities, towns and communities would lack key
necessities including food and drinking water; there would be no
clothes to purchase, and no parts to build automobiles or fuel to power
them. The rail, air and water intermodal sectors would not exist in
their current form without the trucking industry to support them.
Trucks are central to our Nation's economy and our way of life, and
every time the government makes a decision that affects the trucking
industry, those impacts are also felt by individuals and by the
millions of businesses that could not exist without trucks.
Mr. Chairman, we are on the cusp of a transformation in the
movement of freight, one that you and your colleagues will greatly
influence. Radical technological change will, in the near future, allow
trucks to move more safely and efficiently, and with less impact on the
environment than we ever dared to imagine. Yet we are facing headwinds,
due almost entirely to government action or, in some cases inaction
that will slow or cancel out entirely the benefits of innovation.
Failure to maintain and improve the highway system that your
predecessors helped to create will destroy the efficiencies that have
enabled U.S. manufacturers and farmers to continue to compete with
countries that enjoy far lower labor and regulatory costs.
Mr. Chairman, we are at a critical point in our country's history,
and the decisions made by this committee over the next few months will
impact the safety and efficiency of freight transportation for
generations. ATA looks forward to working with you to develop and
implement sound policy that benefits the millions of Americans and U.S.
businesses that rely on a safe and efficient supply chain.
The Cost of Inaction
A well-maintained, reliable and efficient network of highways is
crucial to the delivery of the Nation's freight, and vital to our
country's economic and social well-being. However, the road system is
rapidly deteriorating, and costs the average motorist nearly $1,600 a
year in higher maintenance and congestion expenses.\6\ Highway
congestion also adds nearly $75 billion to the cost of freight
transportation each year.\7\ In 2016, truck drivers sat in traffic for
nearly 1.2 billion hours, equivalent to more than 425,000 drivers
sitting idle for a year.\8\
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\6\ Bumpy Road Ahead: America's Roughest Rides and Strategies to
make our Roads Smoother, The Road Information Program, Oct. 2018; 2015
Urban Mobility Scorecard. Texas Transportation Institute, Aug. 2015.
\7\ Cost of Congestion to the Trucking Industry: 2018 Update.
American Transportation Research Institute, Oct. 2018.
\8\ Ibid.
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While the cost and scale of addressing highway improvement needs is
daunting, it is important to note that much of the congestion is
focused at a relatively small number of locations. Just 17 percent of
National Highway System (NHS) miles represents 87 percent of total
truck congestion costs nationwide.\9\ Many of these locations are at
highway bottlenecks that are identified annually by the American
Transportation Research Institute. ATRI just released its latest
freight bottlenecks report, which identifies the top 100 truck
bottlenecks around the country.\10\ The worst bottleneck was Interstate
95 at State Route 4 in Fort Lee, NJ. More than half of the bottlenecks
are in states represented by Members of this committee, including
thirteen in Texas, six in Connecticut, and five in Washington State.
While most of the bottlenecks were in large metropolitan areas, the
report found trouble spots even in smaller cities like Baton Rouge, LA,
San Bernardino, CA, Birmingham, AL, Chattanooga, TN, and Greenville,
SC. ATA's highway funding proposal, described below, would adopt a
strategy for funding improvements at these costly choke points.
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\9\ Ibid.
\10\ https://truckingresearch.org/2019/02/06/atri-2019-truck-
bottlenecks/
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Most troubling is the impact of underinvestment on highway safety.
In nearly 53 percent of highway fatalities, the condition of the
roadway is a contributing factor.\11\ In 2011, nearly 17,000 people
died in roadway departure crashes, over 50 percent of the total.\12\
Many of these fatalities result from collisions with roadside objects,
such as trees or poles located close to the roadway.
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\11\ Roadway Safety Guide. Roadway Safety Foundation, 2014.
\12\ Ibid.
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The Highway Trust Fund (HTF), the primary source of Federal revenue
for highway projects, safety programs and transit investments, is
projected to run short of the funds necessary to maintain current
spending levels by FY 2021.\13\ While an average of approximately $42
billion per year is expected to be collected from highway users over
the next decade, nearly $60 billion will be required annually to
prevent significant reductions in Federal aid for critical projects and
programs.\14\ It should be noted that a $60 billion annual average
Federal investment still falls well short of the resources necessary to
provide the Federal share of the expenditure needed to address the
Nation's surface transportation safety, maintenance and capacity
needs.\15\ According to the American Society of Civil Engineers, the
U.S. spends less than half of what is necessary to address these needs.
As the investment gap continues to grow, so too will the number of
deficient bridges, miles of roads in poor condition, number of highway
bottlenecks and, most critically, the number of crashes and fatalities
attributable to inadequate roadways.
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\13\ Projections of Highway Trust Fund Accounts--CBO's January 2018
Baseline, Congressional Budget Office.
\14\ Ibid.
\15\ 2015 Status of the Nation's Highways, Bridges, and Transit:
Conditions & Performance. USDOT, Dec. 2016; see also 2017
Infrastructure Report Card. American Society of Civil Engineers, 2017.
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A recently released report \16\ by the Transportation Research
Board (TRB) requested by Congress focused specifically on the current
state and future needs of the Interstate Highway System. This critical
network binds our Nation together and reaps immeasurable economic and
national security benefits for the United States. Most importantly,
because interstates are far safer than surface roads, since 1967 it has
prevented nearly a quarter million people from losing their lives in
vehicular crashes.\17\ The Interstate Highway System accounts for about
one-quarter of all miles traveled by light-duty vehicles and 40 percent
of miles traveled by trucks.\18\ The TRB report estimates that
conservatively, the state and Federal investment necessary to address
the Interstate system's maintenance and capacity needs will need to
double or triple over today's expenditures in the next 20 years.\19\
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\16\ Renewing the National Commitment to the Interstate Highway
System: A Foundation for the Future (2018). Transportation Research
Board, National Academy of Sciences.
\17\ Ibid, p. 2-18
\18\ Ibid, p. 2-10.
\19\ Ibid, p. S-5
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Build America Fund
ATA's proposed solution to the highway funding crisis is the Build
America Fund. The BAF would be supported with a new 20 cent per gallon
fee built into the price of transportation fuels collected at the
terminal rack, to be phased in over four years. The fee will be indexed
to both inflation and improvements in fuel efficiency, with a five
percent annual cap. We estimate that the fee will generate nearly $340
billion over the first 10 years. It will cost the average passenger
vehicle driver just over $100 per year once fully phased in.\20\
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\20\ Federal Highway Administration, Highway Statistics 2016, Table
VM-1. Average light-duty vehicle consumed 522 gallons of fuel.
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We also support a new fee on hybrid and electric vehicles, which
underpay for their use of the highway system or do not contribute at
all. We look forward to working with Congress to identify the best
approach to achieve that goal. In addition, ATA supports repeal of the
Federal excise tax on trucking equipment, provided the revenue it
generates for the HTF is replaced. This antiquated 12 percent sales
tax, which was adopted during World War I, is a barrier to investment
in the cleanest, safest trucks available on the market.
Under the BAF proposal, the first tranche of revenue generated by
the new fee would be transferred to the HTF. Using a FY 2020 baseline,
existing HTF programs would be funded at authorized levels sufficient
to prevent a reduction in distributed funds, plus an annual increase to
account for inflation.
Second, a new National Priorities Program (NPP) would be funded
with an annual allocation of $5 billion, plus an annual increase
equivalent to the percentage increase in BAF revenue. Each year, the
U.S. Department of Transportation would determine the location of the
costliest highway bottlenecks in the Nation and publish the list.
Criteria could include the number of vehicles; amount of freight;
congestion levels; reliability; safety; or, air quality impacts. States
with identified bottlenecks could apply to USDOT for project funding
grants on a competitive basis. Locations could appear on the list over
multiple years until they are addressed.
The funds remaining following the transfer to the HTF and the NPP
would be placed into the Local Priorities Program (LPP). Funds would be
apportioned to the states according to the same formula established by
the Surface Transportation Block Grant Program, including suballocation
to local agencies. Project eligibility would be the same as the
eligibility for the National Highway Freight Program or National
Highway Performance Program, for highway projects only.
This approach would give state and local transportation agencies
the long-term certainty and revenue stability they need to not only
maintain, but also begin to improve their surface transportation
systems. They should not be forced to resort to costly, inefficient
practices--such as deferred maintenance--necessitated by the
unpredictable Federal revenue streams that have become all too common
since 2008. Furthermore, while transportation investment has long-term
benefits that extend beyond the initial construction phase, it is
estimated that our proposal would add nearly half a million annual jobs
related to construction nationwide, including nearly 6,000 jobs in
Mississippi and more than 8,000 jobs in Washington State (see Appendix
A for a full list of state-specific employment figures).\21\
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\21\ A Framework for Infrastructure Funding. American
Transportation Research Institute, Nov. 2017.
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The fuel tax is the most immediate, cost-efficient and conservative
mechanism currently available for funding surface transportation
projects and programs. Collection costs are less than one percent of
revenue.\22\ Our proposal will not add to the Federal debt or force
states to resort to detrimental financing options that could jeopardize
their bond ratings. Unlike other approaches that simply pass the buck
to state and local governments by giving them additional ``tools'' to
debt-finance their infrastructure funding shortfalls for the few
projects that qualify, the BAF will generate real money that can be
utilized for any federal-aid project.
---------------------------------------------------------------------------
\22\ Ibid.
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Mr. Chairman, while some have suggested that a fuel tax is
regressive, the economic harm of failing to enact our proposal will be
far more damaging to motorists. The $100 per year paid by the average
car driver under this proposal pales in comparison with the $1,600 they
are now forced to pay annually due to additional vehicle maintenance,
lost time, and wasted fuel that has resulted from underinvestment in
our infrastructure. Borrowing billions of dollars each year from China
to debt finance the HTF funding gap--a cost imposed on current and
future generations of Americans who will be forced to pay the
interest--is far more regressive than the modest fee needed to avoid
further blowing up our already massive national debt. Forcing states to
resort to tolls by starving them of Federal funds is far more
regressive than the $2.00 a week motorists would pay under our
proposal. One needs only look to I-66 in Northern Virginia, where tolls
average more than $12.00 per roundtrip and can sometimes exceed $46.00,
to understand the potential impacts on lower-or middle-income
Americans.\23\ To put this into perspective, even if motorists only
paid the average toll, the cost of a 10-mile trip over an eight day
period on I-66 would be equivalent to their cost for an entire year
under ATA's BAF proposal for all roads and bridges.
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\23\ http://www.66expresslanes.org/documents/
66_express_lanes_january_2018_performance_ereport.pdf
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Alternative Revenue Sources
The fuel tax is the most fair and efficient method for funding
highways. Just 0.2 percent of fuel tax revenue goes to collection
costs.\24\ However, we are willing to consider other funding options,
provided they meet the following criteria:
---------------------------------------------------------------------------
\24\ Ibid.
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Be easy and inexpensive to pay and collect;
Have a low evasion rate;
Be tied to highway use; and
Avoid creating impediments to interstate commerce.
While ATA is open to supporting a wide range of funding and
financing options, we will oppose expansion of Interstate highway
tolling authority and highway ``asset recycling.'' Interstate tolls are
a highly inefficient method of funding highways. Tolling also forces
traffic onto secondary roads, which are weaker and less safe. Asset
recycling involves selling or leasing public assets to the private
sector. Where asset recycling has been utilized on toll roads in the
U.S., toll payers have seen their rates increased, only to subsidize
projects with little or no benefit to them. One need only consider the
recent 35 percent increase in truck toll rates on the Indiana Toll Road
for an example of these abusive practices. The state gets a single
tranche of money for road, broadband, airport and other projects that
have no direct benefit for toll road users, while the private operator
of the highway reaps the profits for the next six decades. Please note
that our position on asset recycling pertains only to the highway
sector.
ATA is aware of proposals to create a new fee that taxes the cost
of freight transportation services. While such a proposal is attractive
in concept, we have identified several issues that have yet to be
resolved to our satisfaction, and therefore we cannot support it at
this time. Our primary (though by no means only) concerns are: high
administrative costs; significant potential for evasion; and difficulty
imposing the fee on private carriers.
Future Revenue Sources
While ATA considers an increase in the fuel tax to be the best and
most immediate means for improving our Nation's roads and bridges, we
also recognize that due to improvements in fuel efficiency and the
development of new technologies that avoid the need to purchase fossil
fuel altogether, the fuel tax is likely to be a diminishing source of
revenue for surface transportation improvements. We, therefore,
encourage Congress, in consultation with the Executive Branch, state
and local partners and the private sector, to continue to work toward
identifying future revenue sources.
The FAST Act created a new grant program designed to accomplish
this objective, and we hope that this research will continue. While
much work has already been accomplished in this regard, there is much
still to be done before these new revenue mechanisms are ready for
mainstream implementation. ATA encourages Congress to include in a
future infrastructure package or surface transportation reauthorization
bill a plan to bolster and, if necessary, ultimately replace current
highway funding mechanisms with new, more sustainable revenue sources.
We recommend a ten-year strategy that could include creation of a blue-
ribbon commission to explore the results of pilot programs already
completed or underway, with recommendations for either further research
or a proposal for Congress to adopt a new funding approach.
Freight Transportation Improvement
While trucks move the vast majority of freight, it is important to
recognize the critical nature of the multimodal supply chain. The
seamless interchange of freight between trucks, trains, aircraft, ships
and waterways operators allows shippers to minimize costs and maximize
efficiencies. While carriers do what they can to make this process as
smooth as possible, some things are largely out of their hands and
require government action.
Importance of the Federal Role
The Federal Government has a critical role to play in the supply
chain. Freight knows no borders, and the constraints of trying to
improve the movement of freight without Federal funding and
coordination will create a drag on all freight providers' ability to
serve national and international needs. As the maps in Appendix B show,
trucks move products to and from all corners of the country, and serve
international markets as well.
These maps demonstrate that parochial debates over how much funding
each state receives is ultimately destructive to shippers no matter
where they are located. The cost of congestion for a truck that moves
freight from Kansas City to Chicago is no different whether that
congestion occurs in Kansas City or in Chicago. There is little
advantage to a truck moving a load of cars from the Port of Baltimore
to a dealership in Washington, D.C. if roadway improvements are made
around the port, only to experience severe congestion in Washington.
The critical role that only the Federal Government can play is to look
at investment decisions in the context of national impacts and
determine which investments can produce the greatest economic benefits
regardless of jurisdictional considerations. Only the Federal
Government can break down the artificial constraints of geographic
boundaries that hamper sound investment in our Nation's freight
networks. Only the Federal Government can provide the resources
necessary to fund projects whose benefits extend beyond state lines,
but are too expensive for state or local governments to justify
investments at the expense of local priorities.
Freight Intermodal Connectors
Freight intermodal connectors--those roads that connect ports, rail
yards, airports and other intermodal facilities to the National Highway
System--are publicly owned. And while they are an essential part of the
freight distribution system, many are neglected and are not given the
attention they deserve given their importance to the Nation's economy.
Just nine percent of connectors are in good or very good condition, 19
percent are in mediocre condition, and 37 percent are in poor
condition.\25\ Not only do poor roads damage both vehicles and the
freight they carry, but the Federal Highway Administration (FHWA) found
a correlation between poor roads and vehicle speed. Average speed on a
connector in poor condition was 22 percent lower than on connectors in
fair or better condition.\26\ FHWA further found that congestion on
freight intermodal connectors causes 1,059,238 hours of truck delay
annually and 12,181,234 hours of automobile delay.\27\ Congestion on
freight intermodal connectors adds nearly $71 million to freight
transportation costs each year.\28\
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\25\ Freight Intermodal Connectors Study. Federal Highway
Administration, April 2017.
\26\ Ibid.
\27\ Ibid.
\28\ An Analysis of the Operational Costs of Trucking: 2018 Update.
American Transportation Research Institute, Oct. 2018. Estimates
average truck operational cost of $66.65 per hour.
---------------------------------------------------------------------------
One possible reason connectors are neglected is that the vast
majority of these roads--70 percent--are under the jurisdiction of a
local or county government.\29\ Yet, these roads are serving critical
regional or national needs well beyond the geographic boundaries of the
jurisdictions that have responsibility for them, and these broader
benefits may not be factored into the local jurisdictions' spending
decisions. While connectors are eligible for Federal funding, it is
clear that this is simply not good enough. We urge Congress to set
aside adequate funding for freight intermodal connectors to ensure that
these critical arteries are given the attention and resources they
deserve.
---------------------------------------------------------------------------
\29\ Ibid.
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Truck Driver Parking Shortage
Research and feedback from carriers and drivers suggest there is a
significant shortage of available parking for truck drivers in certain
parts of the country. Given the projected growth in demand for trucking
services, this problem will likely worsen. There are significant safety
benefits from investing in truck parking to ensure that trucks are not
parking in unsafe areas due to lack of space.
Funding for truck parking is available to states under the current
federal-aid highway program, but truck parking has not been a priority
given a shortage of funds for essential highway projects. Therefore, we
support the creation of a new discretionary grant program with
dedicated funding from the federal-aid highway program for truck
parking capital projects.
Additional Productivity Impediments
It is helpful to understand the full range of productivity
constraints we are facing in the context of addressing infrastructure-
related impediments. There are a host of actions that Congress can take
to improve freight mobility without compromising important societal
goals such as safety and air quality.
While ATA supports state flexibility on certain matters, it should
be recognized that Congress has a Constitutionally-mandated
responsibility to ensure the flow of interstate commerce. Where
appropriate, Federal preemption may be necessary. Unfortunately,
Federal avoidance of preemption in the name of states' rights or to
avoid controversy sometimes leads to a patchwork of state regulations
that creates significant inefficiencies. Where appropriate, the Federal
Government must act to protect the public interest from the parochial
demands of narrow constituencies.
Workforce Development
The trucking industry is facing a severe labor shortage that
threatens to increase the cost of moving freight and reduce supply
chain efficiencies. In 2017, for example, the industry was short 50,000
drivers, the highest level on record. If current trends hold, the
shortage could grow to more than 174,000 by 2026. Over the next decade,
the trucking industry will need to hire roughly 898,000 new drivers, or
an average of nearly 90,000 per year.
In recognition of challenges like these, at last March's
infrastructure hearing before this Committee, Labor Secretary Alex
Acosta specifically advocated for workforce development reforms to be
included in an infrastructure package. In particular, Secretary Acosta
testified in support of occupational licensing reform. As you may be
aware, reforming outdated occupational licensing requirements has been
a bipartisan priority of the past three administrations, and there is
broad bipartisan support for rolling back these unnecessary barriers
that hold back so many Americans, and which disproportionately affect
African-Americans, Hispanics, military spouses and veterans, returning
citizens, and the poor.
To help alleviate this problem in the trucking industry, ATA
supports a number of occupational licensing reforms. First, ATA
supports lowering the minimum age requirement for interstate truck
driving from 21 to 18, but only for qualified CDL-holding apprentices
that satisfy the safety, training, and technology requirements spelled
out in the DRIVE Safe Act (S. 3352 in the 115th Congress). Modern-day
vehicle safety technologies have advanced by several orders of
magnitude since the current minimum age requirement was promulgated
decades ago. Research shows that the technologies required by the DRIVE
Safe Act and endorsed by the NTSB--such as active braking, collision
avoidance, and event recorders--significantly improve safety
performance. Meanwhile, 6.4 million Opportunity Youth in this country
are neither employed, nor in school, even as the Nation is short 50,000
truck drivers. An update to the minimum age requirement is long over-
due.
Second, to better connect job-seekers to trucking careers that
offer a median salary of $54,585, health and retirement benefits, and
potentially thousands of dollars in signing bonuses, ATA supports
efforts to require states to better serve the growing number of truck
driver candidates who receive driver training outside their state of
domicile. Currently, out-of-state trainees have to travel back and
forth to their home state, every time they pass either the CDL
knowledge test or skills test, just to obtain the basic occupational
licenses necessary to launch their trucking career. This arrangement
imposes unnecessary financial burdens on those who can least afford it
and exposes them to skills degradation. This problem could be addressed
by requiring states receiving Federal funds for infrastructure projects
to allow such out-of-state trainees to (1) complete all training; (2)
take all necessary tests; and (3) obtain all necessary credentials in
the state in which they are receiving training- without having to
travel back to their home state.
As the Council of Economic Advisers has noted:
Because [occupational] licenses are largely granted by states
(rather than being nationally recognized), licensing inhibits
the free flow of licensed workers across state boundaries to
better match labor supply to labor demand. Unless the
geographic footprint and skill needs of expanded infrastructure
investments match the geographic distribution of currently
unemployed infrastructure workers, some reshuffling of workers
across state lines may be needed.\30\
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\30\ The Council of Economic Advisers, ``The Economic Benefits and
Impacts of Expanded Infrastructure Investment,'' March 2018
In the trucking industry, the geographic distribution of currently
unemployed truck driver candidates does not match the geographic
footprint of Federal workforce development investments. Accordingly,
individuals aspiring to become truck drivers are crossing state lines
to obtain state-of-the-art training from motor carriers that have the
support of Federal workforce dollars and have been hiring minorities,
veterans, apprentices, and other underrepresented populations at
industry-leading rates.
To better facilitate and scale this innovative model of workforce
development, ATA supports efforts to require states of domicile to (1)
accept the results of an applicant's CDL knowledge test administered in
another state, and to (2) electronically transmit or deliver by mail
the relevant credential--be it a CLP or a CDL--to the applicant without
requiring him or her to physically come back to the state of domicile.
Infrastructure and Trucking Technology
ATA supports the development and deployment of automated vehicle
technology and connectivity for all vehicle types. The transportation
industry is in an era of technological evolution that can deliver
increased safety and efficiency for highway vehicles and vulnerable
road users. Automated driving systems and vehicle safety communications
are peaking in research and development, and are on the brink of market
utilization. We encourage Congress to adopt legislation that
facilitates the adoption of technology that improves safety, the
environment, traffic congestion, and energy efficiency. It is important
to ensure that all vehicles that share the road together, including
commercial vehicles, are included in legislation that governs and
facilitates these improvements. Furthermore, as you consider funding
for infrastructure investment generally, keep in mind that these
improvements are vital to the successful adoption of intelligent
transportation systems.
Conclusion
Mr. Chairman, over the next decade, freight tonnage is projected to
grow by 30 percent.\31\ The trucking industry is expected to carry two-
thirds of the Nation's freight in 2029 and it will be tasked with
hauling 2.6 billion more tons of freight than it moved this year.\32\
Without Federal support and cooperation, the industry will find it
extremely difficult to meet these demands at the price and service
levels that its customers--American businesses--need to compete
globally. It is imperative to our Nation's economy and security that
Congress, working in concert with the Administration, invest in
critical highway freight infrastructure, and make the reforms necessary
to create an improved regulatory environment that fosters greater
safety and efficiency in our supply chain.
---------------------------------------------------------------------------
\31\ Freight Transportation Forecast 2018-2029. IHS Global Insight,
2018.
\32\ Ibid.
---------------------------------------------------------------------------
The trucking industry, and especially truck drivers, understands
the importance of safe and efficient highways like nobody else. Roads
and bridges are our workplace, and we cannot properly serve the needs
of the Nation if elected officials continue to allow highways to fall
into greater neglect. The trucking industry already pays nearly half
the user fees into the HTF and we are willing to invest more. To us,
and most Americans, this is not an ideological debate. It is simply a
decision about whether we make the investments necessary to remain
competitive and prevent needless injuries and deaths, or continue on
the current path.
Mr. Chairman, on January 6, 1983, President Ronald Reagan, in
signing into law legislation that increased the Federal fuel tax, said:
Today . . . America ends a period of decline in her vast and
world-famous transportation system. . . . [We] can now ensure
for our children a special part of their heritage--a network of
highways and mass transit that has enabled our commerce to
thrive, our country to grow, and our people to roam freely and
easily to every corner of our land.
That bill was supported by 261 Members of the House, including a
majority of both Republicans and Democrats. Roads and bridges know no
political party; we all benefit from them. It is time for elected
officials to put aside partisan politics and regional differences and
fulfill the promise to the American people expressed so eloquently by
President Reagan.
Mr. Chairman, we appreciate your support and the support that
Senate Leaders--Republican and Democrat--have given to passage of an
infrastructure bill this Congress. In his State of the Union speech
last week, President Trump called on Congress to work with him to pass
an infrastructure bill, and correctly stated that this is not an
option, it is a necessity. You have a willing partner in the White
House, and also in the House of Representatives where Speaker Pelosi
and T&I Chairman DeFazio have made similar commitments to pursuing a
robust, bipartisan infrastructure package. Congress has a unique
opportunity this year to show the American people that Congress is,
once more, able to work together, in partnership with the President, to
pass bipartisan legislation that will improve their daily lives, create
good jobs and grow the economy.
Thank you once again for the opportunity to testify on this
important subject. We look forward to working with the committee to
advance legislation that enables the trucking industry to continue to
provide safe and efficient freight transportation services to the
American people.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you very much, Mr. Spear.
Mr. Willis, welcome.
STATEMENT OF LARRY I. WILLIS, PRESIDENT, TRANSPORTATION TRADES
DEPARTMENT, AFL-CIO
Mr. Willis. Thank you. On behalf of the Transportation
Trades Department, our 32 affiliated unions, and the millions
of front-line transportation workers that I am proud to help
represent, I want to thank Chairman Wicker, Senator Cantwell,
for inviting me to testify this morning.
You know, in America today, it's easy to focus on what
divides us, right. Polarizing rhetoric, political labels, and
differing ideas can make us forget that at the end of the day,
we all want the same thing, a good job and peace of mind for
ourselves and for our family, and transportation and
infrastructure should be an issue that unites us.
As Chairman Wicker already noted, you've proven that it can
be with the recent passage of FAA Reauthorization, Amtrak
Reauthorization before that, and, of course, the FAST Act.
These were all good pieces of legislation that the labor
movement was proud to support, but when it comes to funding
levels, they were simply not enough. They're not enough to meet
the demands that we place on our system today. They are not
enough to meet the demands that we're going to place on our
system over the next 10 years, and they are nowhere near enough
for what we need to leave a legacy of economic stability and
world-class infrastructure for our children the way that our
parents and grandparents did for us.
Past generations, they did more than just build the
interstate highway system, rail lines that connected New York
to California and every state in between, and an aviation
system that set the global standard by ensuring that those who
built this country and contributed to its economy enjoyed the
benefits of a strong union contract. They also helped create
the middle class.
Sadly, today, we run the risk of letting these great
legacies crumble away. We know failure by the Federal
Government to invest in infrastructure hurts working families.
It hurts our economy and that's why today I want to take you
past GDP indicators, past the report card scores and past the
dizzying array of numbers and figures that we can all point to
and focus on ways that failing to invest in infrastructure
takes a toll on individuals.
I'm talking about the office worker who misses out on time
with their family because of soul-crushing commutes, truck
drivers right here in the Port of Virginia who regularly lose
out on pay because they are stuck sometimes for hours on end on
traffic jams caused by outdated infrastructure, families in
West Virginia who face uncertainty because funding for their
commuter train, their lifeline to a good job, is now being
jeopardized.
You know, we used to pride ourselves on being a nation that
dug deeper, built higher, and went faster, but now we are
holding our economy and working families hostage by failing to
invest in projects like Gateway in the Northeast and expanding
the Soo Locks in the Midwest.
Let me be clear. Our members, they stand ready, willing and
able to drive the buses, build the roads, move the freight, fly
the airplanes, and dare to dream on major projects that are
only possible with support and leadership from the Federal
Government. The policy solutions here are no great mystery.
We've already talked about them.
We need to stabilize the Highway Trust Fund through a gas
tax increase, mileage-based user fee, or some other user fee-
based approach. We must return the Harbor Maintenance Tax Fund
to its intended purpose of funding our Nation's seaports. We
must make permanent the tax credit for short-line railroads and
fund grade crossing improvements, and Federal infrastructure
investments must be paired with strong labor policies and ``Buy
America'' rules so that American tax dollars will be used to
create good middle-class jobs that we can all be proud of.
Finally, if we want to improve our transportation system,
we have got to stop shutting down the Federal Government. We
hopefully just avoided another crisis, if press reports are to
be believed, but we cannot ignore the harm caused by shutting
our government for 35 days, the longest in history.
I'm talking about Federal employees who use their
government job to lift themselves out of poverty only to find
that they couldn't pay for gas or rent or groceries, the safety
issues posed and perishable evidence lost because NTSB accident
investigators were told to stay home, the damage done to our
aviation industry by forcing TSA officers, air traffic
controllers, FAA inspectors and technicians to work without pay
for over a month, closing air traffic control training
facilities and failing to maintain the equipment needed to
operate a world-class aviation system.
We have to stop punishing Federal employees and hindering
the public service they provide over policy debates that, quite
frankly, have nothing to do with them.
Let me close with this message. By showing the courage that
this crisis, our infrastructure crisis deserves, we can leave
behind a legacy better than crumbling roads, bridges, and
struggling train systems, better than congested ports and
airports. Working families are ready. It is now your turn to
show America that you are ready to meet these challenges head
on.
Thank you.
[The prepared statement of Mr. Willis follows:]
Prepared Statement of Larry I. Willis, President,
Transportation Trades Department, AFL-CIO
On behalf of the Transportation Trades Department, AFL-CIO (TTD),
and our 32 affiliated unions, I want to first thank Chairman Wicker and
Ranking Member Cantwell for inviting me to testify before you today.
These are difficult political times in America.
Every day, we hear more and more divisive rhetoric and unwavering
points of view here in Washington, D.C., on the news, over social
media, and in our communities. The effects of digging our heels in hurt
every single American. It drives a wedge between friends and family
members. It drives a wedge between neighbors. And it makes us forget
that the people ten states or even just one county over have the same
desire we do for a good job and peace of mind for our families.
While America is both large in size and diverse in our ideas and
ways of life, I think that last point is something that really unites
us. This country works harder than any other nation on earth. We see
ourselves in our work. We take pride in it and we want to contribute.
In many ways, our shared interest in simply pitching in is our common
national identity.
And working people expect the same of Congress.
In fact, transportation investment can and should be a great
vehicle for showing folks back home that this body can still come
together and get the job done. That we can see party lines not as lines
in the sand but as a wealth of great ideas.
This committee, in particular, knows that we do not just build
ports, fly planes, or build rail and transit systems for the sake of
spending money. If we want to have a 21st century economy--if we want
to be the leaders of a global economy--we simply cannot risk falling
behind.
Your willingness to put party lines aside and get to work was
evident last year when you passed a long-term FAA reauthorization bill
that secured the broad support of transportation unions and included a
number measures to improve the safety and efficiency of this sector. It
was also evident three years ago when you passed a five-year Amtrak
bill and reauthorized our transit, highway, and hazardous materials
programs in the FAST Act.
These were not easy jobs. Nonetheless, many of you here today
worked together to get them done.
But let me be clear: while these were all good pieces of
legislation that included hard-fought provisions for America's working
families, I am sad to say, they simply are not anywhere near enough.
They are not enough to meet the demands that we place on our
transportation system today. They are certainly not enough to meet the
demands that are going to be placed on it in ten years. And they are
nowhere near what we need to leave a legacy for our children, the way
our parents and grandparents did when they had the courage to build
something as impossible-seeming as the interstate highway system and
world-class urban and rural transit systems in every part of our
country. Rail lines that connected New York to California and nearly
every state in between. A network of more than 900 ports through which
99 percent of overseas trade passes. And an aviation system that set
the global standard for moving people and goods safely and efficiently
across our skies.
Past generations did more than just build a system of
transportation infrastructure that inspired a nation. By demanding that
working people have a voice on the job and earn living wages, our
parents and grandparents helped define the American Dream. Through
strong union contracts, they helped create an economic system that
allowed a middle class to grow, and ensured those who built this
country and contributed to its economy could support their families.
Sadly, today we are well past the point where we run the risk of
letting those legacies quite literally crumble away.
We know that it hurts working families when the Federal Government
fails to invest in infrastructure. We know it hurts our economy. We
know that when the Federal Government fails to invest in infrastructure
it leaves good union jobs on the table and delays the ability of goods
and services to get to American manufacturers, business owners, and
household consumers.
Voters back home--hard working men and women--sent you here to get
this right.
That is why, today, I want to take you past GDP indicators, past
the report card scores, past the dizzying array of numbers any of us
can point to, and instead, focus on the ways failing to invest in
infrastructure takes a toll on working families. I am talking about the
young adult who is ready and willing to work, but does not have access
to reliable transportation to get to where jobs are located. The single
parent who burns the candle at both ends and is still barely able to
scrape by. The dedicated Amtrak employee who has devoted her life to
providing quality customer service to regulars and new riders alike,
who worries about her family should her job be contracted out to save a
few bucks.
The people I am describing are real people. They are the frontline
transportation workers who want to operate and build a world-class
system. They are the nurses, teachers, veterans, government employees,
and business professionals who depend on a safe, efficient
transportation network. They are your constituents back home. And the
impacts they feel today are only going to get worse if we decide that
current Federal measures are simply good enough.
Everyday Impacts on the American People
Take, for example, port truck drivers in Virginia, who come face to
face with America's lack of infrastructure investment on a regular
basis. Surges in containers from increasingly large ships regularly put
the port over capacity, creating traffic jams that can be 13-lanes
wide, 10-trucks deep, and take eight hours to clear. Port congestion
not only means truck drivers lose out on pay, lessening their
purchasing power and placing a strain on their communities, but it
means the shipment of goods and raw materials to retailers, small
businesses, and farmers is severely delayed.
For rural communities, Federal investment in transportation
infrastructure can mean the difference between isolation and having a
lifeline to nearby towns and cities, between economic decay and
economic vibrancy. Just look at what is happening in Hattiesburg,
Mississippi. By taking their neglected train depot and making it the
focus of a downtown revitalization effort, the people of Hattiesburg
have breathed new life into their once-declining community, expanded
transportation options for residents and visitors, and put the town on
stable financial footing.
By contrast, when MARC funding in West Virginia was jeopardized
last year, hundreds of Martinsburg residents, who rely on train travel
to get to their jobs here in Washington, were forced to consider
relocating. Many said they moved to the community because of the train
and the valuable service it offers. Without it, they--and their tax
dollars, civic contributions, and entrepreneurship--have no reason to
stay.
Consider also small towns like Canadian, Texas; Scottsbluff,
Nebraska; or Lima, Ohio, which have already suffered from the decline
in rural aviation and bus services that began in the 1970s. Every day
they see freight trains pass through their communities, but no
passenger trains. Think of the opportunity that passenger rail service
could provide to these otherwise isolated communities. Think of the
stability and growth passenger rail could bring to Rockwood,
Pennsylvania, which lies along the Capitol Limited line between Chicago
and Washington D.C. The community of Rockwood has been fighting for a
stop for 23 years. For far less than we handed away in the 2018 tax
bill, we could have instead extended a hand to American towns all
across the country.
Shutdowns Only Intensify the Problem
If we are serious about funding and supporting our Nation's
transportation system, we have to stop shutting down the Federal
Government. It is embarrassing, it is counterproductive and it is a
selfinflicted wound that workers and our economy simply cannot
tolerate.
When a transit agency in South Carolina, which is still recovering
from the effects of Hurricane Florence, is forced to consider
suspending service for an entire month because the Federal grants it
relies on are not coming through, local economies suffer. When the
Maritime Security Program faces uncertainty and vessel operators wonder
if it will remain economically feasible to participate, civilian
mariners, their families, and our national security are placed in
jeopardy. When critical, perishable evidence from fatal transportation
accidents is lost because NTSB investigators are forced to sit at home,
we are all less safe. And when over one million working people,
including Federal employees and government contractors, are forced to
go without pay for more than a month, the economic desperation they
feel ripples through communities.
Just look at the Federal worker in Florida who, in a frantic
attempt to not spend any more than was absolutely necessary, refused to
turn on the heat in her home, stopped driving except to go to and from
work, and spent her free time scouring her home for things she could
sell, including clothes and the camper van she had just paid off. Or
the TSA worker in Oregon whose government job allowed him to claw out
of poverty, only to find himself unable to make rent, pay bills, or buy
presents for his son's birthday. Or, the air traffic controller and
single dad who reported for duty knowing he was going to have to make a
decision between buying groceries and paying the electric bill.
Perhaps nowhere was the chaos and devastation of failing to fund
the government for 35 days more visible than in our Nation's aviation
industry. This is a sector of our transportation system that has become
a cornerstone of this county's economy--it supports nearly 12 million
jobs, more than $1.5 trillion in total economic activity, and accounts
for 5.4 percent of our GDP. And yet, we subjected critical Federal
employees, without whom this industry cannot function, including
transportation security officers, air traffic controllers, and FAA
inspectors and technicians, to the stressors and insecurities of
working without pay for more than a month. It is not a coincidence that
relatively modest delays in air traffic control are what brought the
shutdown to an end.
It is also important to note, that closing large portions of the
FAA and DOT are further delaying the implementation of important safety
rules mandated by the FAA Reauthorization Act passed last year. Minimum
rest requirements for flight attendants, mandates to install secondary
barriers in commercial passenger aircraft, requirements for airlines to
adopt assault mitigation plans to better protect customer service
agents--to name a few--have yet to be implemented. Shutting down the
government needlessly takes these tasks off course and further
frustrates clear directives from this Committee.
We cannot repeat this mistake. Our aviation industry, portions of
our broader transportation system, and too many Federal workers are
still recovering from the damaging effects of the last shutdown.
Lawmakers, including those of you here today, must be focused not only
on preventing another shutdown, but ensuring government workers and
Federal contractors are made whole. It is imperative we understand the
important work these civil servants do is vital to our country and our
economy. Too often, we demonize, laugh at, or scapegoat government
workers. That must end today. The men and women who perform safety
sensitive transportation work, keep government offices clean and
secure, perform inspections, and a myriad of other duties that keep
this country functioning are real people with families to feed, and,
like any working person, they deserve our respect.
A Nation that Used to Dream Big
We used to be a country that prided itself on digging deeper,
building higher, and going faster. But today, we have turned a blind
eye to projects that will make us better. By failing to tackle some of
our Nation's largest and most pressing needs, we are putting our
country's entire economy on the line.
Consider the Gateway Tunnel on the Northeast Corridor. The
Northeast accounts for 30 percent of all jobs in the U.S. and
contributes $3 trillion annually to the U.S. economy. It is home to 51
million people--one in seven Americans--a figure expected to hit 58
million by 2040. Yet, in the busiest rail corridor in the country, we
continue to move people and goods at maximum capacity through a hundred
year old tunnel that has been in dire need of expansion and
modernization for the past 25 years. Frontline rail workers--including
electricians, track employees and signalmen are responsible for keeping
this system running safely and efficiently under almost impossible
conditions. Our members also have to operate and dispatch trains every
day through this labyrinth of outdated infrastructure. We know it is
past time for this Administration to stop playing political chicken
with Gateway and release grant money to allow this project to move
forward.
At the Soo Locks in Sault Ste. Marie, Michigan, only one lock--the
Poe Lock, built in 1896--is capable of handling the large lake
freighters used on the upper Great Lakes. One hundred percent of the
iron ore mined in the United States comes through this one lock. If it
were to fail for six months or longer, the U.S. Department of Homeland
Security estimates that it would have a $1.1 trillion dollar economic
impact on our country and cause 1 1 million jobs to be lost. Yet this
project is still waiting on crucial Federal funding for the
construction of a second lock.
Meanwhile, America's first truly high-speed rail project, which
will lead to an estimated $7.6 billion in new business sales and $3
billion in new wages, faces continuous threats by some in Congress. By
repeatedly seeking to bring this transformative project to a grinding
halt, opponents of the project do little more than signal to China,
Europe, Japan, Russia and other parts of the world that we do not want
to be leaders--that we don't even want to be followers--in innovating
our transportation network.
That is what good enough looks like.
We Stand Ready to Help Congress Get This Right
Our members stand ready, willing, and able to operate those trains
that connect communities all across our country. To modernize and move
freight in and out of our ports. To make the most advanced aviation
system in the world even more efficient. To build the infrastructure we
need today for the electric vehicles that are coming tomorrow. And to
dare to dream big with you on projects like the Gateway Tunnel and
California High Speed Rail.
And yet we sit here today, still trying to pay for a 21st Century
transportation network on a 1993 budget. Still seemingly unwilling to
make the difficult political choices that, frankly, we do not think are
all that difficult.
The policy solutions are no great mystery.
Highways and Transit
We know that a user-fee supported system works when it generates
enough revenue to meet our needs. But that is simply no longer
happening with the Highway Trust Fund. Since 2008, Congress has
transferred $ 140 billion into the Highway Trust Fund from the general
treasury, and even then, it is just barely enough money to keep pace
with current spending levels. Spending levels that do not even begin to
address the larger investment gaps I have discussed today. Spending
levels that we know must be dramatically increased if we are to compete
in the world economy and provide mobility options that working families
are calling for.
We have long supported efforts for a modest increase in the Federal
gas tax, which remains the most efficient and reliable means to raise
revenue for our surface transportation network. Yes, an extra twenty-
five cents per gallon at the pump will increase costs for some
consumers by roughly $ 100 per year. But this calculation overlooks the
fact that investing in American infrastructure will raise household
income, by a recent estimate, to the tune of $ 1,400 per year.
We would also support any serious effort in this Congress to lay
the groundwork for a transition to a mileage based user fee. As
gasoline powered vehicles become more efficient and electric vehicles
become more prevalent, contributions to the Highway Trust Fund will
continue to dry up, leaving us back in the same position we are today.
At a minimum, Congress should spearhead an immediate effort to
dramatically expand the testing of a mileage-based fee.
Moving Goods by Land and Sea
We should take the Harbor Maintenance Trust Fund off budget and
stop raiding it to pay for other priorities. America--not one of our
competitors--should be home to the best ports the world has ever known.
What's more, when Congress cannot show responsibility with the money
they collect for our trust funds, it harms the public's faith in your
work. In a very real way, this is about the health of our democracy.
In addition to funding our port infrastructure adequately, Congress
must also do so responsibly. Last year, this Committee proposed
modifying and increasing a port grant program to improve intermodal
access, including investing in rail and highway connections. While we
support these type of investments, we are concerned that money could be
diverted to port automation projects. To date, all but one port in this
country have chosen not to automate, due largely to the fact that
automation projects are expensive and are likely not cost effective.
Ports are free, of course, to pursue automation if they so choose. But
the Federal Government should not subsidize private business decisions
that would not be appealing otherwise, particularly when those
decisions are made in an effort to cut labor costs.
Congress must also prioritize smart investments in our freight rail
sector.
The Senate should pass the Building Rail Access for Customers and
the Economy Act of 2019, or BRACE Act, to permanently extend the 45G
Short Line Tax Credit once and for all. Privately owned short line
freight railroads play a significant role in moving goods, connecting
the entire freight rail network, and alleviating the deterioration of
public roads and bridges within our transportation network. Yet, year
after year, Congress has failed to make permanent the Short Line Tax
Credit. Since it was first put to use in 2005, the tax credit has
spurred $4 billion in private infrastructure investment among short
line railroads. It ensures the short line industry's continued private
investment for the future and saves taxpayers from shouldering hefty
annual bills for the wear and tear on the roadways.
Additionally, we support increasing the funding dedicated to the
Section 130 railway-highway grade crossings program via the FAST Act.
Annually, Section 130 funds are allotted to states for the installation
of new grade crossing warning devices, the upgrade of existing devices
and surfaces, and the separation and closure of grade crossings. This
program has helped dramatically reduce grade crossing collisions over
the past few decades, but with more than 125,000 public grade crossings
in the United States and growing freight and passenger rail traffic
alongside growing truck and automobile traffic, there is much more to
be done.
Aviation
As we saw during the recent shutdown, the Federal Government and
the American people expect air travel to continue without a hitch,
regardless of the toll it takes on FAA and airline employees. However,
requiring air traffic controllers, safety inspectors and other FAA
employees to work for over a month without pay puts incredible stress
on the system--stress that seriously risks the safety and security of
our skies. These risks are unacceptable to FAA employees, airline
employees and the flying public, and they should be unacceptable to
Congress.
H.R 1108, the Aviation Funding Stability Act, which was introduced
in the House by Transportation and Infrastructure Committee Chairman
Peter DeFazio and Aviation Subcommittee Chair Rick Larsen last week is
unfortunately necessary in the current political climate. The bill
would allow the FAA to use uncommitted Airport and Airway Trust Fund
money to continue to operate fully in the event of a government
shutdown. H.R. 1108 would allow the FAA to continue to ensure safe air
operations and prevent it from being held hostage by political
squabbles. Importantly, this bill would only be in effect during a
government shutdown and would not otherwise remove the FAA from
Congress's oversight and appropriations authority. To transportation
labor, this is a no-brainer.
Unfortunately, because the funding would come through the Airport
and Airways Trust Fund, this bill does not cover TSA and the dedicated
Transportation Security Officers that were also required to work
without pay. We are working with legislators to pass similar
legislation to ensure that TSOs receive pay in the event of a shutdown.
This is simple. Air travel is going to continue. And funding the FAA
and TSA during a shutdown will ensure that air travel continues safely.
Finally, we know that jobs created by smart investments in
transportation and infrastructure are good jobs that people can raise
families on. In part, this is because of high union density in some of
these sectors and in part because of the Federal policies that have
been associated with these investments. In particular, labor standards
specific to construction and transportation have been included in past
infrastructure investment statutes and together have resulted in a
high-road labor model and ensured a skilled workforce is utilized.
These standards and other employee protections should be expanded and
applied to future investments considered by the Committee. In addition,
Buy America rules should be aggressively applied to Federal
infrastructure programs so that we can grow our manufacturing base as
we seek to reverse decades of under-investment. It would be a grave
mistake for the health of our Nation to use an infrastructure bill to
attack these important laws or to undercut collective bargaining rights
that are essential to the good jobs that can and should be created in
this space.
Leaving Behind a Legacy for our Nation
By taking these steps today, we can leave behind a legacy better
than crumbling roads and insufficient transit. Better than seaports
that no longer compete with our neighbors to the north and to the
south. Better than airports where we ask our workforce to do more with
less every single day. Better than an economy where the ultra-wealthy
only get richer at the expense of everyone else.
It is your turn in Congress, now, to show America's working
families that you are ready to meet this challenge. To show our
children the kind of courage and leadership that our parents dared to
show us. The kind of leadership that inspired a nation to invest in the
economic wellbeing of its people by building the Hoover Dam, the Panama
Canal, the Interstate Highway System, and countless other projects
named after great Americans who dared to dream bigger than we seem
capable of today.
We must not find ourselves back at this table in ten or 30 years
asking what went wrong. Why nobody rose to meet the challenge. And so I
challenge each of you and all of us to seize the opportunity before us.
With that, I am happy to answer any questions.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
The Chairman. Thank you very much, Mr. Willis, and thank
you to all of our witnesses for very thought-provoking and
substantive suggestions.
Mr. Spear, is all P3 funding fake funding or can you
differentiate between workable 3Ps and fake P3s?
Mr. Spear. I would argue that from the context of roads and
bridges and from a trucking perspective, P3s are code for
tolling.
Tolling is only profitable when you have a high throughput
and to have the level of throughput that would make it
profitable on a road or bridge, it's only applicable to less
than 1 percent of the roads and bridges in the United States,
so which is why it's really difficult to attract private
investment on tolling schemes and make them profitable.
P3s, however, could be profitable in other venues, other,
you know, modes of transportation, airports, seaports perhaps,
you know, could be beneficial. That's been proven in other
countries. But as we see it from roads and bridges, a P3 is a
tolling scheme that time and time again has proven to be very
regressive, high administrative costs, up to 35 percent to
administer a toll on the dollar versus less than one penny on
the dollar for the user fee. So we look at the user fee as a
much more viable solution, Mr. Chairman.
The Chairman. Mr. Willis, do you agree that P3 is fake
funding?
Mr. Willis. Excuse me. We agree that direct funding through
user fee or, you know, some other mechanism is the right
approach.
P3s do have a role. Mr. Jefferies mentioned them in the
context of the CREATE Project. I think that's something that we
have traditionally supported there, but I think it has to be
part of a--it's going to always be a minority of our
infrastructure needs and when you do deploy them, you have to
make sure that the public is protected.
You have to make sure that ``Buy America'' rules, labor
policies apply, just like they would in other projects, and
recognizing that most projects aren't a for-profit model. So
really you aren't going to work in the P3 component. So part of
the solution but a small part.
The Chairman. You want to weigh in, Mr. Willis, on the
congestion pricing that Mr. Spear mentioned and particularly
the I-66 example that he used?
Mr. Willis. Yes. We have not gotten involved in those type
of issues, but again I think when you look at that type of a P3
model, making sure that you have the public interest protected
and at the table, I think is important, not just on highways
but in other deployments of P3s.
The Chairman. And, Mr. Polka, you are concerned that we not
use scarce funds to build over where we already have coverage.
We've had concerns on both sides of the aisle up and down
this dais about the map that the FCC has. Are you satisfied
that we know enough about where the coverage deficits are?
Mr. Polka. It's better, but we need to do more. The fact
that we have started to look on a more granular basis at what
homes are served is good. Certainly as we have in our mapping
processes looked down to the census track level, we have
incorporated things, such as what the FCC has done to institute
a challenge process in its Connect America Fund, programs which
help to more singularly focus where homes are, where they're
not.
The Chairman. Do you think----
Mr. Polka. But the truth is we don't know what homes are
served and what homes aren't served. So if there's a need from
a mapping perspective, I think ultimately we need a map that
would be part of an infrastructure program to help us determine
what homes are served and what homes aren't and then we'll know
where the funds need to go.
The Chairman. OK. So you might want to get back to us then
on some specific legislation to make sure we get it right where
the coverage is and where it is now currently?
Mr. Polka. Yes, this is something where a map of this
nature would need to focus really in on the specifics of where
homes are located, to geo-code specific homes where we can then
overlay whether or not there is service and that whether those
homes are served or not, and we'll be glad to do that with you.
The Chairman. OK. Well, we're getting ready to spend a ton
of money on these reverse auctions and it just seems to me that
we don't quite have the correct information.
Thank you very, very much.
Senator Cantwell.
Senator Cantwell. Thank you, Mr. Chairman.
I mentioned in my opening statement this article that
Seattle Times reporter Mike Lindblom reported on but what
triggered his analysis of traffic challenges and investment was
an INRIX report, which is a worldwide data and traffic
analysis. The American Transportation Research Group in their
Annual Congestion Report said that truck delays cost over $66
billion.
So many of you mentioned the economic impact of congestion
on to the economy and to consumers. So if we know we're losing
$66 billion then at least these levels of investment should be
considered.
In your statement--I'm sorry. In, Mr. Friedman, your
statement, you were commenting about various ways in which
freight--thank you for mentioning The Freight Act and the
passage of that. That truly was about us losing our competitive
advantage.
One of the largest grain elevators in the entire world is
in Vancouver, Washington. I said why do we have the largest
grain elevator in Vancouver, Washington, and they said, well,
if the Asians want to eat beef, we have to have grain and if we
have grain, we're going to ship it through this port and that's
where you're going to have the largest grain terminal.
So the world is changing. It's growing and that's good news
because Americans know how to grow things and we know how to
build things and the question then becomes how do we get them
to the market?
So how do you think we should look at this as it relates to
particularly the freight proposal, the freight way fee? How do
we contrast the costs we know we're losing with the economic
competitiveness of moving forward on more investment at our
ports?
Mr. Friedman. Thank you, Ranking Member Cantwell, for that
question.
Yes, as I highlighted in my prepared statement, our ports
are struggling with the so-called last and first mile
connectedness and with those freight bottlenecks and so AAPA
would support increasing the fuel tax, gas tax, looking at a
VMT program, and looking at a freight waybill program in
concept in order to fund more programs, more funding, and
greater eligibility for our ports through multimodal programs,
like INFRA, so that we could work in partnership with the
Federal Government, with local and state government, and with
our private sector partners to really aggressively attack those
bottlenecks so we can move grain through our system to export
ports, like the Port of Vancouver, and, as you pointed out in
your opening remarks, make us more competitive.
So, you know, we look forward to seeing those sorts of
proposals emerge in the next reauthorization of the FAST Act or
whatever the surface transportation bill will be called.
Senator Cantwell. But this INRIX report on movement and
freight and congestion, these are--now we can analyze by data,
what we're losing in competitiveness or in delays and so this
modernization of our ports, we should be able to come to terms
with how we save investment as opposed to lose it, right?
So somebody's ignoring the problem is costing us and do you
think the freight waybill issue is the right way to go? Is
that----
Mr. Friedman. Yes. Our port association does support
exploring that concept, probably not in and of itself going to
solve our funding gap, but we do think it is worth exploring,
and I think, you know, we would agree that we can zero in in
terms of sort of cost-benefit the cost to our Nation versus the
cost of fixing these problems and, yes, we are in favor of
looking at that concept.
Senator Cantwell. Mr. Spear, do you have a comment about
that since a lot of the bottlenecks for your associations do
happen at that last mile?
Mr. Spear. Yes. We share that concern and recognize that
the problem--we do take a different approach and we oppose
lifting the current 10-percent cap on revenue use for non-
highway projects in the two freight programs. One's a formula,
one's a grant program.
As I read AAPA's testimony, if I read it correctly, lifting
that to a hundred percent, trucks and what we fund into the
freight programs would then be used to pay for more efficient
ports, and I think the argument is clear that more efficient
ports benefit trucking. That is true.
But you could also argue that more efficient highways,
roads, and bridges benefit the ports. The difference is we're
paying half the tab into the Trust Fund. We're willing to pay
more.
Mr. Jefferies testified they're paying for rail. We think,
you know, everybody should be contributing to their own
bottleneck areas. So I think if everybody's contributing to the
cause and funding a robust infrastructure bill, you'll see
efficiencies across the board, but I think changing the
formulas and taking money from one program to pay for another,
I would caution against that.
Senator Cantwell. Thank you, Madam Chair.
Senator Blackburn. Mr. Gardner.
STATEMENT OF HON. CORY GARDNER,
U.S. SENATOR FROM COLORADO
Senator Gardner. Thank you, Madam Chair. Thank you, and
thank you to the witnesses for your time and testimony today.
I will agree on the incredibly urgent need to fix, repair,
and grow our Nation's infrastructure. In my home state of
Colorado, we have some of the fastest-growing cities in the
country, fastest-growing counties in the country. According to
the Bureau of Labor Statistics, in terms of metropolitan job
growth, Colorado Springs was the fourth fastest for most jobs
created in the Nation last year. Ft. Collins, Colorado, was the
ninth highest metro area in terms of job creation. The
population in Colorado over the last decade has grown between
2010 and 2018 nearly 14 percent.
At the same time we've seen this population growth, that
we've seen these cities explode, the American Society of Civil
Engineers has talked about the fact that Colorado
infrastructure is costing drivers an estimated $580 each
annually. Furthermore, the American Society of Civil Engineers
estimates that of Colorado's more than 88,000 miles of public
roads, approximately 21 percent are in poor condition, and
nearly everywhere I travel along Colorado's Front Range, I hear
from people about fixing the traffic, fixing the roads, fixing
the potholes.
I'm reminded regularly that there are no Democrat or
Republican potholes, they're potholes, and according to this
report that came out, the Trip Report, in June 2018 by the
National Transportation Research Organization, the
transportation infrastructure in Colorado is costing, just
Colorado alone, $7.1 billion a year. That's what the cost of
our aging infrastructure has meant to--an inadequate
infrastructure has meant.
The report estimates that the average driver in Denver sits
through an average of 52 hours worth of delays per year as a
result of congestion. That's an entire work week that is lost
in a car. That's an entire vacation with the family that is
lost. That's a soccer game that's lost. That's a lacrosse game
that's lost in Colorado. More importantly, that's a Broncos
game that is lost in Colorado.
[Laughter.]
Senator Gardner. It's past time for us to come together and
address our infrastructure needs.
We've had several communities in Colorado who've done an
incredible job putting up their dollars, putting up their own
local funding to match dollars for Federal projects, including
for projects in North and South I-25 where we've seen such
incredible growth.
Communities along our Front Range Corridor continue to grow
and thrive. Those numbers prove it. But we get off of I-25 and
we have problems, too, because in the rural areas of Western
Colorado and Eastern Colorado, the Eastern Plains, the Western
Slope, we see rural areas that are being left behind because
what works in Denver or Boulder may not work in Durango or
Lyman, and so how do we make sure that we have the flexibility
to determine what fits best in those communities?
And so I think this body, as we have this split bi-camera
opportunity to come up with an infrastructure bill, I hope that
we can work together to consider what measures will work to
adequately fund transportation, to adequately fund our traffic
problem, to make solutions go further, but we also have to look
at permitting issues and regulatory reforms, how we compare
those with a funding mechanism or funding legislation,
considering the impact of regulations on infrastructure and our
economy.
I talked to county commissioners in Colorado who turned
down Federal dollars because they can do a road, the same
section of road for magnitudes less than the Federal Government
would require you to fix the same portion of road. So why is it
that the same portion of road costs three times more money for
the Federal Government to do it than it does for the county
commissioners to do it?
So I look forward to working with members on both sides of
the aisle to address this problem, to get through the red tape,
to have the regulatory reforms that we need.
All of you brought up great points in your opening. Mr.
Polka, I'm reminded about the Eagle Net fiasco in Colorado
which a $100 million, over a $100 million of taxpayer money
went to a state to duplicate existing facilities and broadband
Internet infrastructure investments. A $100 million without the
oversight, that's money that was just gone, bankrupt, and
unfortunately didn't have the oversight that you rightfully say
we need.
Mr. Spear, Mr. Jefferies, curious about other solutions for
transportation funding and, Mr. Friedman, Mr. Willis, thank you
for being here today.
So I guess a final question is this. Beyond a gas tax, if I
could just quickly go through each one of you, what other
sources of revenue should we look at beyond a gas tax for
highway funding? Maybe perhaps not everybody's involved in this
but whoever wants to take a crack at it.
Mr. Willis. Well, I'll briefly start. I think we're going
to give similar answers.
I do think looking at a VMT, as some members have, is the
right sort of next step. You know, the gas tax is great because
that's in place today. We know how it works. It can immediately
raise revenues.
As we move to more fuel-efficient vehicles and that hasn't
kept up in any event with what our needs are, looking at
something else over the long term is the right approach, and I
think a VMT can do that.
Senator Gardner. Thanks. I'm over time already, so very
quickly.
Mr. Spear. I would just say I think, as I testified in my
opening, that, you know, user fee is the most immediately
conservative way to shore up the Trust Fund and provide
immediate funding for roads and bridges.
Privacy aside, on VMT, you'd have to register 270 million
vehicles. That is a tremendous undertaking. The administrative
apparatus to do that is going to----
Senator Gardner. You could probably do that while every
building in America gets remodeled and rebuilt.
Mr. Spear. True. It's going to be very costly and, you
know, I think, you know, the privacy aside, the administrative
costs associated with that, but it's not a proposal that's
ready for prime time. If you ask anybody in Oregon that's doing
the major pilot on VMT, they would tell you it's about eight to
10 years out.
However, we would argue that technology could provide a lot
of solutions in the future for revenue streams beyond the user
fee. We need to be having that discussion now. That should be
part of this bill. Build it into a blue ribbon commission, have
something reported out to this committee that you can use and
shape over the next 10 years, so when we get to that juncture,
you've got something to turn to that's viable long term,
perhaps technology-driven.
Senator Gardner. I'm out of time. So hopefully the three of
us can get together and finish the answer.
Thank you, Madam Chair.
The Chairman. The gentleman yields back.
Ms. Baldwin, five minutes.
STATEMENT OF HON. TAMMY BALDWIN,
U.S. SENATOR FROM WISCONSIN
Senator Baldwin. Thank you.
President Trump came to Kenosha, Wisconsin, in April 2017
to announce an Executive Order on Buy American, Hire American.
The Order required a report to recommend ways to improve ``Buy
American'' laws and to provide guidance to agency heads to
ensure that they maximize their use of American-made materials
under current law.
The report was due in November 2017. No one has seen it yet
and no guidance has been issued as the Executive Order stated.
President Trump recently issued a second Executive Order on
buying American in Infrastructure. The second Order directs
agency heads to encourage the use of American-made materials
and report back to the President if they believe that their
infrastructure programs would support a requirement to buy
American.
Simply put, the President has not delivered on his ``Buy
America'' promises.
I've introduced legislation, the Made in America Act, to
require all Federal infrastructure programs to use American-
made construction materials subject to the same waivers that
exist in current law.
Mr. Willis, how do you think that the President could
engage with Congress to actually strengthen Buy America
requirements for Federal infrastructure projects?
Mr. Willis. Well, Senator, thank you for that question, and
thank you for your leadership on this issue.
You mentioned the first Executive Order on Buy America that
this administration put out in 2017. We said good things about
that because we were hopeful that that would lead to a real
robust framework in Buy America and obviously this
administration and particularly this President has talked a lot
about that.
You know, the second Executive Order that was put out a
couple of days ago, we think could have gone significantly, you
know, further. You know, encouraging compliance, encouraging
the application of Buy America is a little weak from our
perspective, and we would have liked to have seen a little bit
more of a direct framework for how Federal agencies can do a
better job both on the enforcement and cutting down on the
number of waivers that might exist.
As far as what the Administration can do with Congress,
obviously if you consider an infrastructure bill, I think
extending and raising up the percentage of Buy America
requirements in existing programs is important and making sure
that you extend it whether to new grant programs or those that
are financed through sort of different ways.
So there's a lot to do here. Again, we appreciate, you
know, the President's support for Buy America. We just have to
make sure that the rhetoric sort of catches up with the deeds.
Senator Baldwin. How would the Buy America requirements in
the Made in America Act help in this situation?
Mr. Willis. Well, as you noted, you know, I'll just speak
from a transportation perspective, the statutes in
transportation are good. There are sort of different levels and
I think one of the goals to harmonize them is a good one, but
we need to harmonize them in the right way, which is up, and
there are also places where we know we are spending Federal
dollars outside of transportation where Buy America should be
applied.
We know that, you know, when you do Buy America right,
you're not only sort of buying good infrastructure but you're
stabilizing a manufacturing base that is so critical to this
country.
So if you're going to spend the dollars, you should do it
in a way that maximizes job creation, extending Buy America
more broadly as your legislation does is definitely the right
approach.
Senator Baldwin. Thank you.
Mr. Polka, I want to follow up on the back and forth that
you already engaged in about the accuracy of the data and maps.
You were talking about pinpointing homes. There have been a
number of suggestions about trying to either crowd source the
data or use, let's say, the U.S. Postal Service as the delivery
trucks and vehicles travel throughout the country to supplement
the data.
Do you think those are helpful ideas to get an accurate
picture that would help prioritize the funding?
Mr. Polka. I think we have to use whatever means are
possible because it is a hard project and a hard task to solve
if we want to identify all homes in America and determine
whether or not they're receiving broadband or not.
This could be a critical portion of any infrastructure bill
that this committee would consider going forward because I
think it would take a significant amount of money to
accomplish, but also your idea about using other sources in the
meantime to try to get better data before we get to that
ultimate solution of a project, using those other sources,
whether through the Postal Service or otherwise, I don't see
why we're not.
Senator Baldwin. And I would note that modern farm
equipment often requires a good broadband signal in the field
as well as, you know, beyond the home.
One other thing we can follow up for the record because I
see I've run out of time, but your comments about the
relationship to the railroads or municipalities in terms of
fees charged. Certainly I hear other sides of that argument and
I just wonder if you could provide examples to the Committee
that would guide us in looking at the situation more clearly.
Mr. Polka. We would be happy to, yes.
STATEMENT OF HON. JOHN THUNE,
U.S. SENATOR FROM SOUTH DAKOTA
Senator Thune. Thank you, Senator Baldwin.
Let me just start by saying that I think transportation
infrastructure investment has always been an area for
bipartisan cooperation. I think it was evidenced by the passage
of the FAST Act, which enjoyed wide popularity in Congress and
among states and ensured, I think, both rural and urban
participation in Federal surface transportation programs, which
is always important.
States are partners in all this, and rural states, like
mine in South Dakota, rely on Federal investment infrastructure
to keep roads, bridges, and railways well maintained so that
the freight can continue to flow, critical to our economy.
Mr. Spear, your testimony highlighted that 40 percent of
truck miles traveled are on the interstate highway system. The
same data indicates that more than 25 percent of truck miles
traveled are on rural non-interstate roads, which communities
depend on to transport their goods to the marketplace.
So could you maybe speak to the importance of the rural
road network to your industry and outline where you see
opportunities to strengthen Federal investment in rural
infrastructure?
Mr. Spear. Absolutely, Senator. I think rural development
is essential for connectivity, interstate commerce. A lot of
the roads that connect states, like South Dakota, are
interstates but U.S. highways and county and local roads and a
lot of that is moving agricultural products, livestock, wheat,
corn.
This is very essential. It generally goes to rail, rail
goes to ports. So the connectivity is extraordinarily
important, not to be dismissive of rural state development, and
there is a shared relationship between Federal funding and
states that have low populace, inability, low tax base to fund
major construction projects, and that connectivity is
absolutely essential.
So we strongly believe in a strong Federal role in
continuing that program that benefits rural states. I think
that's essential devolution. Handing states, particularly rural
states, like South Dakota, the keys to raise the revenue, it's
simply not possible when they don't have the revenue stream to
do it, and they don't have the administrative capacity to
oversee it.
The partnership has to exist between rural and Federal
Government to make interstate commerce possible and all the
modes represented at this table successful in serving the
American economy.
Senator Thune. Great. I want to switch gears for just a
minute but reliable access directed you to, Mr. Polka, to high-
speed Internet in rural areas provides new opportunities and
efficiencies in a variety of sectors, including health care,
education, and agriculture.
Federal broadband programs, whether that be the FCC's High-
Cost Program or the Rural Utility Service at USDA, play an
essential role in stimulating rural broadband infrastructure
deployment.
In order to close that digital divide, it's important that
these programs complement each other, not conflict with ongoing
efforts.
So if infrastructure legislation were to be passed with
additional funding for rural broadband, how much more important
will coordination be to prevent overbuilding?
Mr. Polka. Well, Senator, first, let me say how privileged
I am to be here at this table with my colleagues, just that
broadband is here in the room, because broadband is essential
to everything that we do today. We cannot survive without
robust broadband throughout America to every home and in each
one of these industries, as well, which rely on it.
To your point about how we can ensure that homes are served
without misappropriating Federal funds, I think we have to
first look back at the successes that have already been
achieved through various programs at the FCC, at the RUS, here
in Congress, even in the most recent bill that Congress passed
where funds were directed to unserved areas primarily that
didn't have a 10:1 ratio of service.
That was important because Congress said let's focus funds
where they're needed most and I think that's a good template to
do going forward.
We can also look at other programs that have been
successfully implemented at the FCC and even at the RUS, as
well, where there has been more disclosure, more information,
and even introducing a challenge process, so when applications
are made for funding, the providers that are actually out there
in the field can say, well, that place is unserved but that
place is served and maybe shouldn't receive more funds.
So it all comes down to oversight and accountability, but
building on the successes that I think have already been
achieved.
Senator Thune. Good. I just think it's important from the
resource allocation standpoint here that we get the dollars on
the targets and those are underserved areas that don't have--
have not had access to some of the build-out that's occurred in
other areas and that's going to take a level of coordination.
So my time has expired. Senator Tester is up next, and I
have a question I'll submit for the record having to do with
rail, but thank you all for being here.
Senator Tester.
STATEMENT OF HON. JON TESTER,
U.S. SENATOR FROM MONTANA
Senator Tester. Thank you, Senator Thune, and I want to
thank everybody who's testified today, appreciate your
testimony.
I want to start with you, Mr. Jefferies. You talked about
the amount of money that the rails are pumping into
infrastructure every week.
Has your industry projected what kind of investment needs
to be made over the next 10 years?
Mr. Jefferies. Thank you, Senator Tester. Great question.
Certainly robust investments are going to continue to be made.
We've talked historically about upwards of $700 billion since
the mid eighties.
When we look outwards toward 2040, freight movements and
freight needs are only going to continue to increase
dramatically. I can tell you that railroads have a demonstrated
track record of sustained investment and so we have plans to
continue that level and we will make the long-term investments
needed overall.
Senator Tester. Are there particular programs as we look at
an infrastructure bill that are particular and necessary for
the rails from a dollar investment?
Mr. Jefferies. So you certainly heard us, you know, the
pride we have in our private investment, but we also see----
Senator Tester. And I appreciate that, too,----
Mr. Jefferies. Thank you.
Senator Tester.--by the way.
Mr. Jefferies. The transportation network's an integrated
network. So it needs to work across the board and programs,
like the INFRA Grant Program that this committee did work on
last Congress, are critically important, especially to those
first-mile/last-mile connectors, be it at ports or other
intermodal facilities. So across the board that's one that
comes to mind, absolutely.
Senator Tester. OK. Let's jump over to Mr. Spear with the
Trucking Association.
Has the Trucking Association talked about what kind of
investments are needed in roads and bridges in this country
over the next 10 years?
Mr. Spear. Yes. We do. We looked at American Society of
Civil Engineers, which estimates the U.S. spends less than half
of what is necessary to address those needs.
The Transportation Research Board, its most recent report
estimated conservatively that state and Federal investment
necessary to address the interstate system's maintenance and
capacity needs will need to double or triple.
Senator Tester. What kind of dollars are we talking about?
Mr. Spear. Oh, goodness. That would probably be upwards of
120-150 billion a year.
Senator Tester. Over the next 10?
Mr. Spear. It's $60 billion currently.
Senator Tester. OK. All right. What about the build-out for
cable, Mr. Polka? What kind of dollars are we talking about
there? Let's just for a minute, we can dream that we're talking
5G. What kind of dollars are we talking about, you know, for
all of that, 5G and cable?
Mr. Polka. Well, 5G and fiber are the two most important--
--
Senator Tester. Right.
Mr. Polka.--broadband technologies that we need to
implement today and they complement each other.
The amount of money is vast. I don't have a number that I
can put on it for you right now to say from our membership's
perspective, but I know that our members have been investing
roughly $10 billion through the course of their deployment in
smaller markets and rural areas.
Senator Tester. $10 billion per year?
Mr. Polka. Yes.
Senator Tester. OK.
Mr. Polka. Yes.
Senator Tester. And how much of that has been Federal or
state dollars?
Mr. Polka. I don't know specifically the breakdown of that,
sir, and I'd be happy to get back to you on that.
Senator Tester. OK. All right. I want to talk about a
different kind of infrastructure.
By the way, those numbers are pretty important, I think, if
we're going to move forward in these particular areas and ports
need to be thrown in there, too, and I apologize because
Montana doesn't have any seaports with climate change that's
coming, I'm sure.
[Laughter.]
Senator Tester. But the truth is, is that in order to
really sit down and do a good honest evaluation of where we
need to be from a dollar standpoint, those figures are going to
be really critically important.
Let's talk about a different kind of infrastructure. Let's
talk about work force, and I want to talk about trucking for a
second. In a few years, everybody says in 20 years, we're going
to have self-driving trucks and all that. I look forward to
seeing that, but I don't believe it.
So the question is, is what are the workforce needs in the
trucking industry right now, and what are we doing about it?
Mr. Spear. Well, I appreciate that question, Senator,
especially coming from you with a CDL holder. So I know you
understand this issue firsthand.
Our industry has to hire a million people over the next 10
years just to meet current economic demand. Right now, we're
short 50,000 drivers. That's a number that will double in the
next 5 years if we don't take action.
ATA is very focused on this issue for the long-term growth
of the industry and we believe that there are several ways to
address it, urban hiring being one of them, certainly
minorities, women.
We need to go about attracting talent into the industry
differently. Hiring veterans or ex-service members from the
military that have that skill set is another avenue. Certainly
dealing with our aging work force, we average about 50 years
old for our driver force, health problems, wellness programs,
keeping them in the trucks longer, as long as they want to
drive, and then 18- to 21-year-olds.
A lot of people don't realize that 48 states allow an 18-
to 21-year-old to drive a Class 8. They just can't cross state
lines. That works pretty great in Montana, maybe not so much in
Rhode Island. If we can send 18- to 21-year-olds off to protect
our freedom and fight our wars, I'm pretty certain we can train
them to cross state lines.
Senator Tester. Yes. And look, I think Senator Young and
myself have a bill that, with proper training, allows exactly
that.
Mr. Spear. We thank you for that.
Senator Tester. Yes. And my time's up, but I would ask the
same question of the rails.
What's the manpower needs that are going for you? You don't
have to answer now because I'm out of time, but if you could
get back to me on that, and for the cable industry to actually
lay the cable or the fiber, I should say, what's the workforce
there, and what should we be doing, and if you have any
recommendations on what we should be doing to make sure you
have the workforce that you need because we can pump all the
money in but if we don't have the work force, we're not going
to get things done.
Thank you, Mr. Chairman.
STATEMENT OF HON. MARSHA BLACKBURN,
U.S. SENATOR FROM TENNESSEE
Senator Blackburn. Well, it looks like I can yield myself
five minutes and ask my questions.
Mr. Polka, I want to start with you and I appreciate that
you mentioned the Dig One----
Mr. Polka. Yes.
Senator Blackburn.--provisions that we have passed out of
the House and the good work that we did there and also that you
mentioned keeping the focus on unserved areas----
Mr. Polka. Yes.
Senator Blackburn.--as we look at grants and as we look at
loans and the build-out that is there and Ray Bombs' Act, which
I shepherded through the House and am grateful that this
committee and the Senate pushed it forward to finish the FCC
Reauthorization that had not been done since 1990 and Mr. Thune
had his MOBILE NOW Bill; we put that in there, which will help
facilitate 5G and that expansion.
So we're a year in on Ray Bombs and we're looking at the
RUS grants that are there, the FCC money that has been placed
for rural health. If you will talk for just a second about what
the obstacles are for our small and mid-size cable providers
that are seeking to serve their footprint because as we push
this money forward, we want to make certain that we are using
it well and that we're getting the result which is closing the
digital divide.
Mr. Polka. I couldn't agree with you more. Our members are
committed in small communities and rural areas to delivering
broadband. We consider ourselves broadband forward.
I've been in the industry for a long time and I still sort
of call myself a cable guy, but let me be honest, we're
broadband guys. We're broadband everything in all that we do,
and serving our homes with high-speed broadband across the
country is our commitment.
Now to your specific question, there are barriers. When we
look at things that I mentioned in my opening statement,
whether it's the processes that we have to work through with
investor-owned utilities for the right to attach to poles, the
process, the cost, the implementation through an application
process which sometimes creates time toward deployment and adds
more time to the clock so we don't get broadband out there, but
we are focused on working with you as well as with other
agencies, such as the FCC, which has helped to streamline that
process, to eliminate those barriers and to build on other
successes that we've already achieved here in Congress and in
the other agencies.
Senator Blackburn. What about siting?
Mr. Spear. Siting, you mean for mapping and----
Senator Blackburn. For the towers, yes, and then I will
come to that, but talk to me a little bit about siting for the
towers, especially as we look at how that applies to the new
towers for wireless and fixed wireless, the 5G components that
are coming online.
Mr. Polka. Our members are primarily wireline broadband
providers, but I can say that we recognize how important 5G is
to our country and the need to facilitate the deployment of 5G
and to ensure that we have sites that are available to help
implement it as well as to complement what happens with 5G
networks with fiber, because every 5G network is going to have
a fiber component where----
Senator Blackburn. Especially the fixed wireless.
Mr. Polka. Exactly.
Senator Blackburn. Let me move on for just a moment.
Several of you have mentioned the VMT and, of course, we all
know that you have to find a way to fund our transportation
system.
I think as we look at the possibility of a VMT, we realize
something's got to be done. Cars are more fuel efficient,
electric cars are coming, and going back to when I was in the
State Senate in Tennessee, we were beginning to look at this. I
know there were some in the trucking industry and different
things that are not in favor of that.
But I want to just, Mr. Friedman, start with you, go down
the line, Mr. Polka, we'll skip you, and as we talk about
funding and looking at a VMT, the one thing you think is
important that we consider because we have to find a fairness
component as we fund this infrastructure. So you're on and
right down the line.
Mr. Friedman. OK. Thank you for that question, Senator.
I'm certainly no expert in that topic specifically. As I
mentioned in my testimony, AAPA, the U.S. ports support looking
broadly at both fuel tax increase and VMT. We understand there
will be some hurdles----
Senator Blackburn. Well, then let's move on to Mr.
Jefferies.
Mr. Jefferies. We support an immediate gas tax increase and
long term, a transition to a VMT or similar program that fully
accounts for all users' infrastructure use that could also
include a weight component, as well.
Senator Blackburn. Mr. Spear.
Mr. Spear. Yes, thank you, Senator. We, too, support an
immediate increase in the user fee at the rack to help
administer robust immediate funding for infrastructure.
We would be very open to having a dialogue over the next 10
years during this bill in place to have a technology solution
put in place that's a viable revenue source that captures
alternative fuel vehicles, both trucks and cars. That's coming.
Technology is going to pose new solutions that are viable. They
may not be ready right now but in 10-15 years, they could be.
We will be at the table having that dialogue. We're very open
to that discussion.
Senator Blackburn. Mr. Willis.
Mr. Willis. Well, I would only add I think your point on
fairness is key and making sure that again we're doing this
increase in revenues for, you know, infrastructure investment.
So, you know, making sure that we do it in a way that
actually increases the deposits going in and just isn't
transferring from a gas tax to a VMT I think is critical.
Senator Blackburn. My time has expired. I yield back.
The Chairman. Thank you very much.
Mr. Jefferies and Mr. Spear, would you index that increased
gas tax?
Mr. Spear. Yes, Mr. Chairman.
Mr. Jefferies. I think that makes sense as you transition
into a mileage-based system.
The Chairman. Had we done that in years past, we'd be in
better shape.
Mr. Spear. We wouldn?t be having this discussion right now
if it had been done in 1993.
The Chairman. Senator Rosen is next.
STATEMENT OF HON. JACKY ROSEN,
U.S. SENATOR FROM NEVADA
Senator Rosen. Thank you, Mr. Chairman, Ranking Member
Cantwell, and all the witnesses for being here today.
You know, as my home state of Nevada continues to grow, our
infrastructure needs to grow with it. Along with Idaho,
Nevada's one of the two fastest-growing states in the Nation
and today, our population is above three million, but we
actually have nearly 50 million tourists a year.
So our relatively recent growth puts us in a different
category versus some of the infrastructure that needs to be
repaired or updated, we need new growth, like I-11. Finally a
freeway that would connect Phoenix, Las Vegas, and Reno, and
there hasn't been enough conversation about how we balance new
growth in some of the Western states versus repair and
maintenance.
And so in the House, I was part of the Problem Solvers
Caucus Infrastructure Task Force. We talked about this
blueprint to produce potential solutions for our Nation's
infrastructure problems and/or challenges, I'll say that.
So what I want to task you with is thinking about what we
haven't traditionally thought about in infrastructure. We have
our electric grid. We have cybersecurity. You talk about smart
trucks, driverless trucks. I'm sure railroad, all these things.
We're going to have smart highways, transportation.
So as we improve the workforce, as you change your work
model, what stakeholders do you need to have us engage with,
bring to the table, and possibly fund so that we can grow not
just your industry but your workforce into these 21st Century--
deal with these 21st Century issues? Anyone can take that.
Mr. Jefferies. I'm certainly happy to start and take a
stab.
You're absolutely right that the rail industry is one in
transformation. Certainly we like to say we're not your
grandfather's railroad anymore. We're deploying new types of
sensors and detectors throughout our system, deploying drones
to help with inspections, developing various capabilities that
not only enhance capacity but also improve safety, and with
that comes changing work roles and changing responsibilities.
So we are looking to partner not only with our 13 unions we
work with but also with universities, with other outlets to
identify those skills early and make it clear to potential
candidates that the rail sector is an opportunity for
innovation and technology for those interested, and we
certainly would be happy to come in and talk with you and your
staff more about that.
Senator Rosen. Well, I think it would behoove us to be
partnering in all these industries with cyber technology and
the added value that it creates for data analytics and our ways
to do things better, smarter, and smoother, but that the
challenges or obstacles, privacy issues, and all those things
that it also creates for our cities, our end users, and all of
us.
Anyone else want to talk about the challenges at the table
here that we need to bring for another hearing?
Mr. Polka. Yes, Senator. I would say it is so important in
your state and in every state just to build networks.
We talk of these other industries that are networks in and
of themselves, but when we think of broadband today and how
that improves communities, the lives of individuals, helps to
connect rural areas, which many exist in your state, to the
world,----
Senator Rosen. Right.
Mr. Polka.--and in building those networks, but then
protecting them.
I think you mentioned in terms of cybersecurity,
resiliency, these are very, very important issues that I know
our members are very concerned about because we want to make
sure we get the broadband connectivity out there, which is
essential to life today, but we also want to make sure that we
protect it and that's where our commitment lies regarding
building those networks.
Mr. Spear. Senator, I would not be dismissive of the
military. I think a lot of technologies that are developed by
DARPA and other branches of the military, they're tested and
tried, they're later commercialized, and there's a lot of
technology that flows into the commercial sector that we adopt
as an industry. Other modes adopt and utilize and leverage.
So as we look to that, I think that's another stakeholder
that we need to bring into the fold and understand what they're
doing, what are the emerging technologies that we're going to
see 10-15-20 years from now that have already begun in the
military testing field.
Senator Rosen. Thank you.
Mr. Willis. Yes. I would add that, you know, as we talk
about technology and sort of the changing nature of work in a
lot of these areas of transportation, I mean, we're obviously
watching that very carefully and, you know, as we have said
before, I think thinking about the right labor policies and how
you, you know, deal with automation issues, how you deal with
technology in these sectors of transportation, making sure that
you have a trained workforce that is able to transition into
whatever's coming and to make sure that you have, again, labor
policies in place that can bridge that, sort of recognizing
that, you know, the impact of technology can be pretty
significant here for our members.
So it's definitely something that we're watching. We want
to make sure we get the policies right on the front end.
Senator Rosen. Thank you. I would just hope that in our
connectivity, we would realize that each industry shouldn't
stay siloed, that sharing of information and data can make each
avenue stronger.
Thank you.
The Chairman. Thank you, Senator Rosen.
Senator Blumenthal.
STATEMENT OF HON. RICHARD BLUMENTHAL,
U.S. SENATOR FROM CONNECTICUT
Senator Blumenthal. Thank you, Mr. Chairman.
We're here to discuss the importance of investments in our
Nation's infrastructure generally, but I'm very interested in
railroads and, Mr. Jefferies, you just mentioned technology.
Last week, the National Transportation Safety Board, NTSB,
released its most wanted list. I know you're probably familiar
with it. There are a number of recommendations that are
critical to the future of our railroads. Would you agree?
Mr. Jefferies. Absolutely.
Senator Blumenthal. And one of them is positive train
control. The deadline has been extended a number of times.
Would you agree that the final deadline must be met?
Mr. Jefferies. I would agree that all Class 1 railroads
will be fully installed and implemented, the plan is, by 2020.
Senator Blumenthal. Would there be any reason or excuse to
fail to meet that deadline?
Mr. Jefferies. I can tell you right now there are no plans
in place to extend beyond that. As of the end of December 2018,
all equipment was installed, all employees were trained, all
Spectrum was acquired, and 83 percent of route miles required
were PTC operational.
Senator Blumenthal. And that's important to safety, isn't
it?
Mr. Jefferies. Absolutely.
Senator Blumenthal. What other recommendations of the NTSB
would you say are priority recommendations?
Mr. Jefferies. You know, I think the NTSB in its
recommendations takes a very holistic approach across the
transportation network and we should take all of them to heart.
Specifically on the rail front, transporting hazmat as
safely as possible is absolutely a key priority and addressing
such issues as sleep apnea are also things that are on our
members' radars, as well.
Senator Blumenthal. Sleep apnea, as a matter of fact, has
been a cause of at least one fatal accident.
I want to shift to ports. Connecticut is one of just 12
states with three or more deepwater ports. Over 11.4 million
tons of freight go through Connecticut's ports every year. Each
of Connecticut's ports handles tens of millions of dollars in
trade and over 90 percent of shipping entering Long Island
Sound uses a Connecticut port as opposed to a New York port.
But these Connecticut ports have not grown as much as their
potential would allow, meaning that a lot of freight remains on
our roads or goes elsewhere. I think that's unfortunate because
anyone who's driven I-95 knows that congestion needs to be
addressed and ports offer a means to do it.
Let me ask, Mr. Friedman. How can Congress help improve the
opportunities for states that rely on these small ports?
Mr. Friedman. Thank you, Senator, and that's a question
that's actually near and dear to me being from the Port of
Cleveland and a relatively smaller, more of a niche port, more
similar to your ports in Connecticut. So I'm keenly interested
in just that topic and certainly would encourage Congress to
look at greater use of our waterways and some of our ports that
are less utilized and I would agree completely that it's an
opportunity to relieve congestion and improve safety on other
modes of transportation, as well.
So, you know, how would we do that? I would love to follow
up with you and your staff on ideas we have. I think there are
certain policy impediments today that should be considered as
we look at fully utilizing our water infrastructure.
Senator Blumenthal. Would dredging be one of the----
Mr. Friedman. Dredging is certainly one and, as you know,
we----
Senator Blumenthal. What else would you suggest?
Mr. Friedman. I think we need to look at fees that are
imposed on the water side and water transportation that aren't
necessarily imposed on other modes of transportation. I think
we need to look at ease of use on the maritime side. I think we
need to look at, you know, are we adequately funding
infrastructure at these smaller ports, these emerging ports, so
that they can compete effectively. Those would be some of my
suggestions.
Senator Blumenthal. And what kinds of infrastructure at the
ports would you suggest ought to be expanded?
Mr. Friedman. Well, I think again, as I mentioned earlier,
it's these first and last mile land-side connections which
often can become impediments. You've mentioned dredging already
on the water side. It's not only dredging but it's other types
of public works that these harbors rely on, jetties and
breakwaters, etcetera, which are funded, of course, through the
Army Corps of Engineers. Those are some of the things that we
need to address. Real connections in particular into these
ports, so that they can access the rail networks and can
compete in that manner.
Senator Blumenthal. I appreciate your answers and like
Cleveland, New London, Bridgeport, New Haven are ports that are
underutilized and we need to make use of them much more
expansively not only for the sake of interstate commerce, but
also our environment. So I appreciate your responses.
Mr. Friedman. Thank you.
Senator Blumenthal. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Blumenthal.
Senator Lee.
STATEMENT OF HON. MIKE LEE,
U.S. SENATOR FROM UTAH
Senator Lee. Thank you, Mr. Chairman.
Utah's seaports are also vastly underutilized and I'm
trying to change that.
[Laughter.]
Senator Lee. As we talk about our infrastructure, there are
a lot of people who point out that our gasoline tax hasn't been
enough and that we've run a shortfall. There are a lot of
people who are responding to that concern by suggesting that we
raise the gas tax by 20 cents, perhaps 25 cents per gallon, and
there are a lot of people who are very enthusiastic about that
and I understand their enthusiasm, and yet I also think it's
important that we take into account what impact this will have
on many Americans, particularly poor and middle-class Americans
who are less able than others to go out and buy new technology,
new cars that are more fuel efficient, or perhaps hybrid or
electric vehicles.
It may well also have a bigger impact on rural Americans
than Americans living in or closer to big cities. Rural
Americans very often tend to have to travel farther as they go
about their day-to-day business and this might have an impact
on them.
In any event, those who are not wealthy in this country are
perhaps hit hardest by such a tax increase because unlike
Federal income tax, for example, which is progressive, which is
not only based on a percentage of income but is also a
graduated progressive tax system, the gas tax is not
progressive and it's not fixed as a percentage of your income.
Many people describe it as regressive but, regardless of
whether you describe it that way or not, it does have an impact
that is felt more by poor and middle-class Americans.
So let's start with you, Mr. Willis. Don't you think we
ought to be concerned about this, that we ought to be concerned
about how this might affect poor and middle-class Americans,
and do you think I'm fair to raise that concern, that it might
hurt them more?
Mr. Willis. Well, as an organization that does represent
front-line workers, we are obviously sympathetic to that
position and, you know, it would have--you're right. Some have
described the tax as regressive. I'm not sure I would in this
case.
I would say a couple of things. One is that, you know, a
modest increase in the gas tax, you know, for example, I think
there has been a study, 25 cents, would cost an average family
maybe a $100 a year, maybe more. That's not insignificant, but
you balance that out with the improvements that you could see
in roads and transit systems, you have less wear and tear on
your vehicle. People are getting to work faster, more
efficiently, and, you know, the nice thing about this user fee
is that we know what it goes for and, you know, people get a
return on that investment.
So we've heard those concerns, we're sympathetic to it, but
I think on balance, it is something we think is good for
working families and it's why we've endorsed it for decades.
Senator Lee. I understand your desire to use the word
``modest'' there, but to be clear, we're talking about, what,
18 and a half cents per gallon that is collected currently. So
this would amount to a more than doubling of that and again
because it's not a fixed percentage of income for a poor
family, that's going to be a much bigger cost than it is for a
wealthy family. For a family that lives in a rural area, it's
going to be a lot bigger hit than the one that you described.
Mr. Spear, the gas tax debate is certainly an important one
to have. I think we have to keep in mind that when it was
created back in the 1950s, it was created for the purpose of
establishing an interstate highway system. There was no
effective way to do that with each state operating in isolation
and the benefits to the country as a whole and to interstate
commerce as a whole made a difference. So we put in place the
Federal gasoline tax.
As I understand it, you can now maintain the entire Federal
interstate highway system for somewhere between four and five
cents per gallon.
What has changed that has been so significant is that we're
now using that Trust Fund with those revenues to pay for a lot
of other projects that are not part of the interstate highway
system; things like surface streets that start and end in one
state and even bike paths and trails, which, while laudable
objectives and while public goods, worthy of government
attention, are not necessarily inexorably linked with the
Federal Government.
So in light of those considerations, as long as we're
talking about a gasoline tax increase, shouldn't we also look
at the expenditure side from the Federal Government's
perspective?
Mr. Spear. Absolutely. I couldn't agree more with you,
diversion of funding from the Highway Trust Fund is a problem.
We need to shore it up and the best way to do it is make
certain that the monies coming into it are dedicated to
highways and bridges and that the repairs be made but also for
new construction to alleviate congestion.
Going back to your earlier comment about regressive, I
think you've got to look through a different lens when you're
looking at 20-cent-per-gallon increase. That would raise $340
billion in new revenue for all roads and bridges.
The average motorist, those folks that you're talking
about, spends $1,600 a year on repairs to the vehicles and
sitting in traffic. There's a report that came out yesterday
that was just previously cited and D.C. ranked Number 2 in the
country, a 155 hours spent a year sitting in traffic. That's an
entire month, an entire month sitting in traffic.
Now if you're low-income, now that's regressive. I mean,
that's a whole month. Think of the productivity losses to the
economy just sitting in traffic. So I think a 20-cent increase,
$100 a year for all roads and bridges will lower, dramatically
lower that $1,600 that motorists are paying on average for
traffic and repairs. There's your offset in spades.
Senator Lee. I see my time has expired. I would add here
only that no one here is in favor of people sitting in roads.
What I'm saying is we ought to look for ways that don't involve
raising taxes on poor families.
Thank you.
The Chairman. Thank you, Senator Lee.
Senator Duckworth is next.
STATEMENT OF HON. TAMMY DUCKWORTH,
U.S. SENATOR FROM ILLINOIS
Senator Duckworth. Thank you, Mr. Chairman, and thank you
for convening today's hearing. I'd like to thank our witnesses
for your participation.
Mr. Jefferies, I'd like to talk about PTC. You know,
America's rail operators started this journey more than 10
years ago with the enactment of the Rail Safety Improvement Act
and even though it's taken much longer than what any one of us
would have liked, we see the light at the end of the tunnel and
when it comes to fully implementing PTC and according to the
FRA, it appears that all of the Class 1 railroads have finished
or are very nearly finished with their PTC systems.
But I want to sort of get a little deeper into this issue
and really talk about one component that is still a challenge
to both freight and passenger operators, especially in high-
density areas, like the Northeastern part of Illinois, like
Chicago land area, and that's specifically interoperability.
Can you update us on the Class 1's efforts to ensure
individual PTC systems are able to communicate effectively,
especially in dynamic areas, like the Chicago land area? Do you
expect this challenge to be successfully added prior to the
December 2020 deadline?
Mr. Jefferies. Thank you, Senator. That's a great question
and you hit the issue spot on. You're right, railroads have
been working a long time to get PTC into place and at the end
of 2018 had all equipment installed, all Spectrum in place, all
employees trained, 83 percent of the route miles operational.
The last major challenge is getting the various company's
systems to work together and talk together seamlessly. As you
know, one railroad is often on another railroad's tracks and in
urban corridors perhaps talking to another railroad's back
office system. So making sure those different tenets of PTC
operate in a seamless manner between the railroads is
absolutely critical.
Chicago, no better case than that, where you have nearly
every Class 1 railroad; Amtrak, Metra, all working together,
all communicating, and that issue is an area we prioritized and
really that's a key focus over the next upwards of 2 years. We
have established a specific PTC Working Group out of Chicago
that is meeting on a regular basis. We have a plan in place and
we are working through that process to ensure that
interoperability is achieved by the deadline. So absolutely
that's something we're prioritizing.
Senator Duckworth. Thank you. Thank you.
Mr. Spear, I want to follow up on your conversation you
just had with my colleague, Senator Lee. As a member of both
the Commerce Committee and the EPW, I'm interested in your
perspective regarding the impacts of our Nation's
infrastructure on the trucking industry.
For instance, while there are no Illinois bridges in danger
of imminent collapse, my state ranked fifth in the Nation for
the number of structurally deficient bridges in 2017 with an
astounding 2,303 bridges falling into this category.
Yesterday, the Chicago Tribune reported that an Annual
Report on Traffic Congestion found that Chicago now ranks third
worst in the Nation for congestion, which translates into my
constituents losing an average of 138 hours each year sitting
in traffic.
Mr. Chairman, I ask unanimous consent to include this
Tribune article into the record.
The Chairman. Without objection.
Senator Duckworth. Thank you.
[The Chicago Tribune article follows:]
The article can be found at: https://www.chicagotribune.com/news/
breaking/ct-biz-traffic-chicago-20190211-story.html
Senator Duckworth. You've already talked about the loss of
productivity from hours spent sitting in traffic. I would like
to hear your view on what the long-term costs would be of
Congress failing to act. What harm will result if we fail to
invest now in better roads, more efficient rail, and safer
bridges?
Mr. Spear. Yes, I appreciate the question. You know, 68
percent of the freight moved in Illinois is moved by truck. You
actually have four of the top 100 bottlenecks in the United
States, all in Chicago, not something we're proud of. We
obviously have to find remedies for this and the costs go up
exponentially.
The American Transportation Research Institute report just
last year had trucks losing $64 billion a year sitting in
traffic. That's 360 million drivers--excuse me--363,000
drivers, truck drivers sitting idle for an entire year.
The recent report that just came out has it at $74.5
billion lost by our industry sitting in traffic, 425,000
drivers sitting idle. So you can see just in 1 year time, the
exponential impact that this is having just on the commercial
sector. We're only 4 percent of the vehicles on the roads, so
that is a huge number.
If you roll in passenger vehicles just in your state alone,
that is a very, very measurable number that's very impactful on
the economy.
Senator Duckworth. Thank you.
Mr. Chairman, as the co-chair of the bipartisan GPS Caucus,
I'd like to ask unanimous consent to enter into the record
testimony for today's hearing from the GPSIA and the Comp-TIA
Space Enterprise Council.
The Chairman. Without objection.
Senator Duckworth. Thank you.
[The information referred to follows:]
Prepared Statement of the GPS Innovation Alliance
and CompTIA Space Enterprise Council
The GPS Innovation Alliance (GPSIA) and the CompTIA Space
Enterprise Council jointly submit this statement in support of the
Committee's examination of our Nation's infrastructure.
America has a history of creating infrastructure milestones that
have led to significant prosperity and national advantages. During the
1950s and 1960s, our Nation was transformed by explosive growth in its
public infrastructure ecosystem. That ecosystem allowed America to
prosper by bridging communities and creating regional pockets of
innovation. Coupled with the Space Race with the Soviet Union, the 20th
century infrastructure ecosystem helped make America a technological
superpower.
Now we have the opportunity to create a 21st century national
infrastructure that will benefit all Americans. In almost every aspect
of our infrastructure ecosystem, the Global Positioning System (GPS), a
constellation of satellites located 12,500 miles above the earth, has
played an integral role. The three capabilities derived from the
constellation are Positioning, Navigation, and Timing. All three play
key roles in the infrastructure ecosystem. According to the Department
of Transportation, Positioning is the ability to accurately and
precisely determine one's location and orientation two-dimensionally
(or three-dimensionally when required), Navigation is the ability to
determine current and desired position (relative or absolute) and apply
corrections to course, orientation, and speed to attain a desired
position anywhere around the world, from sub-surface to surface and
from surface to space. Timing is the ability to acquire and maintain
accurate and precise time from a standard (Coordinated Universal Time,
or UTC), anywhere in the world and within user-defined timeliness
parameters. Similarly, communication satellites provide voice, video,
and data supporting aviation, defense, banking, and agriculture.
A 21st century infrastructure ecosystem includes transportation
(roads, bridges, ports, and airports), water (public utilities) and
energy (electric grid) that is layered by cross-cutting smart
technology and enabled by ubiquitous broadband connectivity and
sensors. Our infrastructure is urban, suburban, and rural, impacting
every single American.
As we invest in our infrastructure, we must take into account
emerging technologies for both the physical infrastructure (new durable
materials) and the digital tier that makes the physical infrastructure
smart. These technologies range from commercial earthmoving and grading
equipment that use GPS to digital 3D models that can help streamline
the construction process. When we utilize commercially-proven and
competitively acquired technologies, we can improve efficiency,
productivity and reduce delays associated with the engineering,
construction and operation of infrastructure projects. All of this
translates into substantial savings, both in terms of new and existing
spending.
Whether in the air or on the ground, it is imperative that we
invest the resources needed to build a 21st century infrastructure. The
status quo of aging bridges and not yet universal broadband
connectivity is simply unacceptable. We must aim for American
exceptionalism. Our GPS constellation will play a leading role in that
exceptionalism. GPSIA and the CompTIA Space Enterprise Council
appreciate the opportunity to share this perspective with the Committee
and stand ready to work with you on efforts to advance our Nation's
infrastructure while promoting, protecting, and enhancing GPS and other
communication satellites.
Senator Duckworth. Mr. Jefferies, could you very briefly
just touch on the CREATE Project and as Congress begins
developing the next reauthorization bill, could you describe
how dramatically increasing Federal investments in freight
projects, like the CREATE Program, would benefit our Nation's
economy and improve supply chain efficiency?
The Chairman. Briefly.
Mr. Jefferies. Sure. Very quickly, the CREATE Program, in
our minds, is a model public/private partnership because you
have the state, the city, the county, Amtrak, Metra, and the
freight railroads, all invested into a series of 70 projects.
We're thrilled that one of our biggest projects, the 75th
Street Corridor, received a $130 million Federal grant last
year to partner with nearly $380 million in private investment
and other public investments, and so you see the impact that
these programs can have and it's certainly something that
should be prioritized moving into reauthorization.
The Chairman. Thank you very much. Thank you, Senator
Duckworth.
Senator Cruz.
STATEMENT OF HON. TED CRUZ,
U.S. SENATOR FROM TEXAS
Senator Cruz. Thank you, Mr. Chairman. Welcome to all the
witnesses. Thank you for your testimony.
Mr. Friedman, we're witnessing right now an energy
renaissance in the United States and I'm proud to say my home
state of Texas is leading the way. The shale revolution has led
not only to increased production of oil and natural gas, but
also to record levels of crude oil, refined products, natural
gas liquids, and other petroleum product exports from the
United States.
Some reports indicate that these exports are expected to
double from a $141 billion to $330 billion in the next 6 years.
What this translates to is incredible economic growth and high-
paying jobs throughout Texas and across the country.
Last year, the Department of Energy announced that the
Houston-Galveston Port District, which includes the Port of
Houston as well as several other ports along the Texas Gulf
Coast, from Galveston to Corpus Christi, began exporting more
crude oil than it imported for the first time on record.
In fact, right now, 70 percent of the crude oil exported
from the United States is coming from Texas ports. Another way
of saying this is three out of every four barrels of oil being
exported move through Texas Gulf Coast ports.
We see a similar story with LNG, liquid natural gas, as
more LNG export facilities are built at ports all along the
Texas coast, from Port Arthur to Brownsville. All together,
these ports in Texas are the driving engine to our state and
national economy.
And my question to you, Mr. Friedman, is, as this record-
breaking growth continues and as traffic increases at our ports
and on our waterways and as ships get bigger, what can we do to
ensure that our ports and waterways in Texas and across the
country keep up with this economic growth?
Mr. Friedman. Thank you, Senator Cruz, for that question.
Yes, you're describing something that is critically
important as the country moves toward a net exporter of
petroleum products and other energy products, and I would
answer it in much the same fashion as I've, you know, answered
the general questions posed earlier.
You know, we need to work together in a partnership with
you, with the Federal Government, to make sure we can solve
those first and last mile problems at our ports. We need to
make sure that our ports have eligibility under the law to
apply for the competitive grants as they're reauthorized.
We're going to work effectively with our rail and with our
trucking partners and with others in the supply chain to make
sure we're zeroing in on the right projects so we can move
those projects efficiently through the system.
We have shale gas coming out of my state in Ohio that's
going to want to move down to your state and we want to make
sure that that can occur. So again, we would emphasize
increased funding and we would emphasize eligibility,
multimodal eligibility being broadened so that we can make
those investments and be able to move exports.
We tend to focus sometimes on the inbound movements of
containers but there are a lot of products that move through my
port and the ports in your state of Texas that are not in a
container and they need to get to those ports so they can be
exported.
Senator Cruz. And in your judgment, what are some of the
regulatory impediments at the Army Corps or other Federal
agencies that can delay the completion of a channel improvement
project or even delay a project from beginning?
Mr. Friedman. Well, looking at the Army Corps and deepening
projects and maintenance projects, they're too slow. I mean, I
think you've certainly talked to your port directors in your
state and I think what you'll hear universally is that we need
to somehow cause the Army Corps to move faster on these
projects.
I know there has been in some legislation recently, there
have been some provisions which are aimed at just that. So I
would encourage you to continue to look at mandating that the
Army Corps move through their process faster.
As you know, their process can take in some cases decades
to get a deepening project completed and as a nation, we just
don't have time to wait for those exceedingly long processes.
I think looking for ways that local sponsors can work more
efficiently upfront with the Army Corps, in some cases maybe
even fund planning work so that we can then move toward
construction faster. We'd be looking for more flexibility on
that end, as well.
Senator Cruz. Thank you. Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Cruz.
We now have Senator Udall.
STATEMENT OF HON. TOM UDALL,
U.S. SENATOR FROM NEW MEXICO
Senator Udall. Thank you, Chairman Wicker, and appreciate
the witnesses being here today.
Mr. Jefferies and Mr. Spear, New Mexico's border region,
including the Santa Teresa port of entry, is a bright spot in
New Mexico's economy. The economic development in this area is
due mostly to trade from Mexico and a 2010 expansion of the
port of entry.
Now Customs and Border Patrol seek funding to increase
capacity for inspectors and for infrastructure because of the
increased traffic.
Additionally, railroads say increased Customs and Border
Patrol resources would help with faster and more thorough
inspections of goods crossing the border.
In your opinion, should Congress include ports of entry in
any upcoming infrastructure legislation? Would increased
funding for Customs and infrastructure in areas, such as the
Santa Teresa facility, facilitate economic development while
providing greater security for the border and for the country?
Mr. Jefferies. Thank you, Senator Udall. Cross-border
traffic is immensely important to the rail industry. We've
learned through analysis that 42 percent of our revenues and 37
percent of traffic is due to cross-border movement, supporting
50,000 rail jobs specifically. That's not only north and south
but also in and out of our ports, as well. But our largest
cross-border movement is grain exports to Mexico.
So free flow and efficient flow of goods across borders,
Mexico included, is critical to the success not only of the
economy but the rail industry and anything that can be done to
make that flow more efficient, to keep goods moving back and
forth I think is a good idea worth considering.
Senator Udall. And including it in an infrastructure-type
package for improvement?
Mr. Jefferies. I think that absolutely merits
consideration.
Senator Udall. Mr. Spear, do you have any thoughts on that?
Mr. Spear. I would wholly agree with Mr. Jefferies on that
point.
From a trucking perspective, we move 76 percent of the
NAFTA surface freight. Eighty-two percent of the border
crossings with Mexico are moved by truck and I've been down to
the border. Laredo's a good example. I know it's not in your
home state, but 14,000 trucks a day, it is unbelievable, and
the amount of emphasis that you can put on funding
infrastructure, CBP, FMCSA with safety, U.S. AG with
agricultural concerns that they have to inspect for, good trade
policy, good tax policies. It's a culmination of a lot of
things that makes the efficiency work.
I think an infrastructure bill certainly could look at that
and be part of that equation. We would strongly favor that,
Senator.
Senator Udall. Thank you very much.
Mr. Willis, are you familiar with the Amtrak proposal to
turn around trains in Albuquerque, New Mexico; and Dodge City,
Kansas, and bus passengers across Kansas, Colorado, and into
New Mexico?
One reason that Amtrak gives for this dramatic shift in
routes is safety. Do you believe that it would actually be
safer for trains to stop in these cities, customers to be
offloaded on to buses, and then driven over high mountain
passes, especially in the winter?
Mr. Willis. Well, I would defer to Amtrak on that specific
route. What we have been seeing with Amtrak with the Southwest
Chief and some of the other long-distance routes is a little
bit of walking away from them on their commitment to a national
railroad and national service.
We think Amtrak is an important component of our multimodal
transportation system, but for that to be a part of that, they
have to be a national system. They have to provide the long-
distance routes. They may not always be profitable but they
provide a public service and they provide transportation
options in places, like in your state, where there may not be
enough.
So we want to make sure that Amtrak, you know, continues to
be in the business of providing those type of routes and we've
been, you know, pretty vocal about it with Amtrak, both
publicly and privately.
Senator Udall. Great. Well, thank you for that, and I think
it's really clear if you look at the routes and look at where
they're talking about offloading and doing buses, that there's
a very serious safety issue there. So I'm urging Amtrak to take
a look at that.
I know the Chairman has an Amtrak issue with the Gulf Coast
from Katrina. I think there are a lot of Amtrak issues where we
need to really make some investments.
Thank you very much, Mr. Chairman.
The Chairman. Thank you, Senator Udall.
Senator Markey.
STATEMENT OF HON. EDWARD MARKEY,
U.S. SENATOR FROM MASSACHUSETTS
Senator Markey. Thank you, Mr. Chairman, very much. Thank
you all for being here.
Climate change is a real threat to our planet, to our own
country. Senator Schumer wrote an op-ed in December saying that
any infrastructure bill has to have a climate change component
to it; that we're realistic in terms of how we're going to deal
with this issue, especially since in 2018, we lost $300 billion
in the United States to the flooding and to the fires in
California. $300 billion over 10 years, that's $3 trillion
that?s lost, and we know it's climate-related.
So as we look at this legislation that's moving forward, as
we talk about infrastructure, the question's really going to
be, you know, how can we use this as an opportunity to invest
in new technologies, new infrastructure that helps to curb
greenhouse gas emissions where applicable.
So in the transportation sector, Mr. Spear, would you
support a program to invest in electrification of the trucking
fleets throughout this country?
Mr. Spear. I think its market forces are already at play on
that. Whether they need included in the bill or not is open for
debate. I think it is a technology that is emerging. It is
certainly viable. I think it's only relevant currently, or at
least for the near future, for certain segments of the trucking
industry, those that are regional, where the equipment returns
to the terminal every night, where there's infrastructure to
recharge it. If you're going long haul, you're going to need
the infrastructure across the country to charge that. It's not
as efficient or useful.
So certain segments, yes, I think it could be very viable.
Other alternative fuels, like compressed natural gas and
hydrogen, certainly viable. Those are being looked at in terms
of hybrid technology as well as full alternative fuel powered
equipment, so certainly in the future.
Senator Markey. Great. Mr. Friedman, do you think it should
be the policy of the United States as we're looking at an
infrastructure bill to help curb greenhouse gas emissions
wherever possible, that we're putting in place policies that
could accomplish that goal?
Mr. Friedman. Thank you, Senator. Well, I'm here
representing AAPA, which doesn't have a position yet
specifically on that question, but I can say that AAPA is
focused on the resiliency component of climate change and the
challenges that will be posed by climate change.
We're particularly concerned with rising sea levels and
more extreme weather events. So we are working as an industry
to try to get ahead of that future.
I would say on the whole, if you look at what our ports do
individually, they're very, very focused on decarbonization.
They're very focused on keeping up with the changes that the
market is going to bring to us in terms of our alternative
fuels, and I would say, again without having a policy in place
yet, that generally, yes, our industry very much agrees with
the Federal Government leading the way on that issue.
Senator Markey. OK. Great. Thank you. Very much appreciate
it.
On September 13, 2018, last year, the gas distribution
system in Lawrence, Andover, and North Andover, Massachusetts,
experienced a pressure surge and the resulting fires and
explosions killed a young man, damaged hundreds of buildings,
and left thousands of homes and businesses without gas service
for months. We're still working to dig out in Massachusetts and
recover from this disaster and have a long way to go.
At the Commerce Committee hearing, which we had up in
Lawrence, thanks to the Majority on the Committee allowed us to
have a hearing up there, we discussed some of the failings of
the pipeline safety regulations, failings that we must address
during the next PHMSA reauthorization by tuning into the
lessons of the Merrimack Valley.
Mr. Willis, do you agree that regulations that require
stronger safety standards and the use of installation of modern
technology can promote pipeline integrity and protect both
workers and American communities and create jobs in this
country?
Mr. Willis. Senator, there's no question that we need to do
more on pipeline safety. We have specific unions that can come
in and talk to you in more detail about, you know, those
workers who handle that type of work, but I think your efforts
in relation to what happened in your state, and obviously we've
seen it elsewhere, are excellent.
We do agree that we need to improve safety there, improve
monitoring and use technology in the right way. So we're
looking forward to working with you on that for sure.
Senator Markey. Thank you. I think that should be a way in
which we view infrastructure, too, because those pipes were
right around the house that my father grew up in, born in 1911,
in Lawrence. So there's a real opportunity here for
infrastructure upgrades that make the whole system a lot safer
while we're creating jobs for the country.
Thank you, Mr. Chairman.
The Chairman. Thank you, Senator Markey.
Senator Klobuchar.
STATEMENT OF HON. AMY KLOBUCHAR,
U.S. SENATOR FROM MINNESOTA
Senator Klobuchar. Thank you very much, Mr. Chairman. It's
good to be here.
We had a Rules Committee meeting, that's why I was a little
tardy.
I want to start with you, Mr. Spear. In your testimony, you
talked about the fact that the U.S. spends less than half of
what's necessary to address the Nation's surface transportation
policy. We saw this loud and clear with the I-35W Bridge in
Minnesota which, as you know, tragically crashed into the
river, killing 13 people and injuring many more.
Could you explain why this is so important to upgrade our
existing transportation infrastructure? Often you can't have a
glamorous ribbon-cutting when you're just upgrading and that's
one of the problems. Mr. Spear.
Mr. Spear. We would certainly celebrate with an upgrade. I
think 67,000 bridges in the United States are deemed deficient,
certainly a safety hazard, this one included. So it's tragic
when this happens and I think we're only going to see more of
it if we do not take immediate steps to pass a robust
infrastructure bill that focuses on repairing our ailing roads
and bridges, and, you know, I think congestion is also playing
a part of that.
Minnesota has five of the top 100 bottlenecks in the United
States. The amount of time we sit in traffic, including in
Minnesota, is very measurable and so, you know, the impact that
the growth, the surge in the economy, we have to meet that
demand. All of our modes work together to ensure that we're
meeting economic growth, but our infrastructure is lagging and
it has to be done and done right, not just for the economy, but
for safety. It's imperative.
Fifty-three percent of the fatalities the roadway
contributed to the fatalities on the highway. This is a
national tragedy.
Senator Klobuchar. Thank you. Mr. Polka, love your name.
We're a big polka state. It's very festive.
[Laughter.]
Senator Klobuchar. Dig Once, I know you recognized it in
your opening statement, and this was a provision. We got a
provision in the MOBILE Now Act, which was signed into law last
Congress.
How do Dig Once's policies help to improve broadband access
specifically in rural areas?
Mr. Polka. First off, I think Dig Once is vitally
important. It's a great idea. When you think of Federal highway
projects and long-haul fiber that can be installed as those
highways are built, I think they're a great idea and we look
forward to working with you and the committee on furthering,
you know, that concept.
In smaller markets, rural areas, it's a little bit of a
different challenge. We're not necessarily using highways but
streets and roads, sometimes maybe not necessarily paved, and
we're not necessarily working with Federal projects.
So there where you have situations, such as utilities or
others that may be installing such facilities, we need to have
a similar concept, I think, and as the Committee thinks about
infrastructure legislation, this may be something to consider
where we think of something that could be more of a sharing
process, where when a utility might be opening up a conduit,
there's notification and coordination, so that fiber can be
also installed.
So it's a little bit of a different issue, but I think the
concept of Dig Once could be used ultimately in rural areas, as
well.
Senator Klobuchar. And then Senator Capito and I have a
bill about measuring the economic impact of broadband. I think
it will be helpful. We got stalled out in the House, is that
right--there you go--last time, and we couldn't get it done at
the end of the year but I think we have a good opportunity, but
the reason I think it's so important is just to get that data
because we can get to connecting all our households but it's
just been--we need the will, and could you talk about the
importance of getting the economic data?
Mr. Polka. We have members today that are building
broadband into communities that haven't had it yet and in those
local situations, we're discussing how we can actually measure
that economic impact.
We don't have the answer yet but I know the answer's going
to be a good one, once you can show a community that didn't
have broadband before that has it tomorrow and what difference
it makes in the lives of every citizen.
Senator Klobuchar. OK. One last question, then I'll put
some more on the record.
Mr. Jefferies, Port of Duluth supports industries from
agriculture to manufacturing. It's the largest and busiest port
on the Great Lakes, 900 vessels, an average of 35 million short
tons of cargo per year. We, with the help of a TIGER Grant and
other things, have been able to enhance that port, new
intermodal terminal open for Canadian National Railway and
Duluth Cargo Connect.
As you see this port traffic increase, as we see the future
of some of our economic growth, getting goods to market and
exporting, what kind of investments are needed to support the
flow of these intermodal cargo shipments?
Mr. Jefferies. Absolutely. Thank you, Senator. That's a
great question.
For railroad's part, we are investing $25 billion a year
back into our network. So once it hits the railroad, we have
the capacity to move the product. On the intermodal connector,
first-mile/last-mile port infrastructure, we think there's an
absolute need for robust Federal role, be it through a public/
private partnership or direct funding to the port to ensure
that again once we get to that first-mile/last-mile, we often
run into congestion. So let's smooth that out and really
provide a streamlined process because it is an integrative
network.
Senator Klobuchar. All right. Thank you very much. Thank
you, Mr. Chairman.
The Chairman. Thank you, Senator Klobuchar, and thank you
to all of our witnesses.
It is clear that we have been treated to a great amount of
brainpower today and also thought put into this. So we do
appreciate it.
There being no further questions, the Chair will announce
that the hearing record will remain open for two weeks. During
this time, Senators are asked to submit any questions for the
record. Upon receipt, our witnesses are requested to submit
their written answers to the Committee as soon as possible but
by no later than Wednesday, February 27, 2019, by close of
business.
So thank you again, and this hearing is now adjourned.
[Whereupon, at 12:18 p.m., the hearing was adjourned.]
A P P E N D I X
January 15, 2019
Hon. Nancy Pelosi,
Speaker,
U.S. House of Representatives.
Hon. Mitch McConnell,
Majority Leader,
U.S. Senate.
Hon. Kevin McCarthy,
Republican Leader,
U.S. House of Representatives.
Hon. Charles E. Schumer,
Democratic Leader,
U.S. Senate.
Re: Benefits of Embedding Energy Efficiency in Infrastructure
Investments
Dear Speaker Pelosi, Leader McConnell, Senator Schumer, and Leader
McCarthy:
We the undersigned, on behalf of a coalition of energy businesses,
trade associations, researchers, energy officials, and advocacy
organizations, respectfully urge you to ensure that any infrastructure
proposals considered by the 116th Congress include energy efficiency
provisions that will maximize the investments made by taxpayers, reduce
long-term operations and maintenance costs, and improve overall U.S.
energy productivity.
Energy efficiency is our Nation's most abundant energy resource.
Without the gains in energy efficiency made since 1973, the U.S.
economy would today require at least 70 percent more energy than we
currently consume. Between then and today, U.S. gross domestic product
has tripled while energy consumption has only risen by about 30
percent. Improving energy efficiency is one of the most effective
policy strategies for addressing the threat of climate change--both in
terms of reducing emissions and enhancing the resilience of buildings,
the industrial sector, transportation, and energy systems--while also
representing an extraordinary bipartisan opportunity to boost economic
growth, add to the 2.25 million jobs in the energy efficiency sector,
and improve U.S. energy security and global competitiveness. These
benefits would align with many of your stated goals for an
infrastructure package in the 116th Congress.
The American Society of Civil Engineers gave our Nation's aged and
increasingly failing infrastructure a grade of D+ in its most recent
Infrastructure Report Card and identified a funding shortfall of more
than $1.4 trillion by 2025. Energy efficiency would improve the
costeffectiveness and sustainability of any investments in
infrastructure, including critical improvements across the entire
buildings sector, water and wastewater treatment facilities and
distribution systems, the power grid, and our increasingly-connected
transportation systems. We therefore encourage you to incorporate
energy efficiency in any infrastructure proposals from the start.
Otherwise, Congress runs the risk of locking in decades of high costs
and unnecessary energy waste for the duration of the physical
infrastructure our economy needs to remain prosperous in the 21st
Century.
In order to make the best, most-efficient use of taxpayer
investments in infrastructure, we ask that you first consider these
tenets:
Promote adoption of updated building energy codes, high-
performance buildings, and high-efficiency equipment. Buildings
account for roughly 40 percent of U.S. primary energy use and
76 percent of the electricity we use, and recent climate
assessments and reports consistently point to reducing building
energy consumption as a top solution to reduce greenhouse gas
emissions. As we invest in building and rebuilding the very
places where people and commerce meet, we should ensure these
structures meet the highest standards for efficiency. The
latest model building energy codes deliver 30 percent more
efficiency than codes of just a decade ago, which will result
in more than $5 billion in annual savings for U.S. homes and
businesses from, for example, improved thermal envelopes and
high-efficiency heating and cooling equipment and lighting
fixtures. Just as important, the experiences of states and
communities demonstrate that more efficient buildings are key
to enhancing energy system resilience in the face of extreme
weather events. Congress should ensure that any infrastructure
proposals encourage states and local governments to adopt and
enforce updated building energy codes and promote energy
efficiency retrofits of existing buildings that will deliver
long-term savings to homeowners, renters, and commercial
building owners and tenants and improve the health and
resilience of communities. Energy efficiency delivers savings
to all households and consumers, including those with limited
incomes, and would ensure that the benefits of an
infrastructure package will help the Nation as a whole.
Expand opportunities for public-private partnerships to
finance projects. The burden of paying for infrastructure does
not need to fall solely upon the shoulders of taxpayers through
direct appropriations. The Federal Government should show
leadership by addressing critical buildings and energy
infrastructure upgrades through public-private partnerships
that leverage private funds to implement resilience-enhancing
energy-and water-conservation measures. To address the backlog
of $165 billion in deferred maintenance projects in Federal
facilities, any infrastructure package should encourage
performance contracting and other financing mechanisms at all
levels of government to install high-efficiency equipment and
systems in individual buildings and across campuses with little
to zero upfront cost to taxpayers and tremendous resilience
benefits for mission-critical public facilities.
Apply life-cycle cost-effectiveness analysis to all
appropriate projects. To deliver the best long-term return-on-
investment to taxpayers, Congress should avoid short-sighted
decisions based on incremental first-costs and instead take
into account costs and benefits over the expected lifetime of
physical infrastructure. This focus on lower up-front costs
rather than lower operations and maintenance costs tends to
encourage an under-investment in energy-and water-saving
technologies that then saddle unsuspecting homeowners,
consumers, and businesses with an unpredictable burden of
higher utility bills. A missed opportunity now means future
generations of taxpayers will be paying for our mistake for
decades to come.
We are prepared to work with you and your colleagues to provide
more assistance as requested to identify specific programs, activities,
and projects that may warrant specific attention as Congress turns its
focus to infrastructure. And we pledge to assist your staff by
identifying existing and developing new energy efficiency proposals
that would maximize taxpayer investment in infrastructure that delivers
benefits today, lowers costs over time, and provides our children and
grandchildren with a more sustainable future.
Thank you for your consideration.
Sincerely,
Advanced Energy Economy National Association for State
Alliance for Industrial Efficiency Community Services Programs
Alliance to Save Energy National Association of Energy
American Council for an Energy- Service Companies
Efficient Economy National Association of State
American Institute of Architects Energy Officials
ASHRAE National Electrical Manufacturers
Business Council for Sustainable Association
Energy Natural Resources Defense Council
Chelan County Public Utility New Dominion Group, LLC
District North American Insulation
Copper Development Association, Manufacturers Association
Inc. Polyisocyanurate Insulation
Covestro Manufacturers Association
E4TheFuture Sheet Metal and Air Conditioning
Environmental and Energy Study Contractors National Association
Institute Signify (formerly Philips Lighting)
Federal Performance Contracting The Stella Group, Ltd.
Coalition U.S. Green Building Council
Hannon Armstrong Vermont Energy Investment
Heat is Power Association Corporation
Home Performance Coalition
Ingersoll Rand
Knauf Insulation
Cc: Members, U.S. House of Representatives Committee on Energy and
Commerce
Members, U.S. House of Representatives Committee on Transportation and
Infrastructure
Members, U.S. House of Representatives Committee on Ways and Means
Members, U.S. Senate Committee on Energy and Natural Resources
Members, U.S. Senate Committee on Environment and Public Works
Members, U.S. Senate Committee on Finance
______
Prepared Statement of Resilient Navigation and Timing Foundation
When GPS signals are not available because of natural, accidental
or malicious interference, every mode of transportation slows down,
carries less capacity, and becomes more expensive and dangerous. First
responder communications and coordination systems are degraded. If the
disruption lasts long enough, networks of all kinds begin to fail.
For this reason, officials at the Department of Homeland Security
have called our Nation's overreliance on GPS ``a single point of
failure for critical infrastructure.'' This sentiment and concern has
been echoed by a wide range of engineers and technologists including
the National SpaceBased Positioning, Navigation and Timing Advisory
Board, and the ``father of GPS,'' Dr. Bradford Parkinson.
The lack of a difficult to disrupt, terrestrial backup system for
GPS is a significant gap in our Nation's infrastructure. It must be
filled to protect and enable current applications and allow development
of future transportation and IT systems.
Validating this shortfall, the National Institutes of Standards and
Technology has twice warned that our Nation's wireless precise timing
architecture (almost entirely based on GPS signals) is insufficient to
support development of the Internet of things (IOT). As another
example, further development of safe automated vehicles and intelligent
transportation systems of all kinds will be unwise without difficult-
to-disrupt, wide area location and timing signals to pair with the much
weaker signals from space (see our comment to the Department of
Transportation here: https://www.regulations.gov/document?D=DOT-OST-
2018-0149-0022).
Congress began to address this shortfall by passing the National
Timing Resilience and Security Act of 2018 which became law in
December. This act requires the Secretary of Transportation to
establish a terrestrial timing system as a backup for GPS by the end of
2020. Also, that this timing system be expandable to provide a backup
for GPS navigation. Separate legislation last year provided $15M for a
technology demonstration of GPS backup technology.
These initial steps are important but will not by themselves make
our Nation safer. Sufficient funds must be made available to establish
the timing system, and the administration must be held accountable for
progress on all fronts.
The last two administrations promised to establish backup systems
for GPS, but never followedthrough. And we have seen little action from
the current administration. For example, funds for the GPS backup
technology demonstration Congress mandated have been available for
almost a year. Yet we have seen no public evidence that the project has
even begun. This, despite Congress' mandate the demonstration be
complete by June 2019.
Our nation's infrastructure is much more than just roads and
waterworks. Our dependence upon wireless precise time and navigation
continues to increase. We must focus on ensuring America has the
positioning, navigation, and timing infrastructure it needs to be
secure today, and to prosper in the future.
We urge you to:
Support funding for the timing system mandated by the
National Timing Resilience and Security Act of 2018,
Encourage the Department of Transportation to actively
pursue its role as the Federal lead for civil positioning,
navigation, and timing issues,
Hold the administration accountable for complying with
Congressional direction and intent, and
Identify a terrestrial, difficult-to-disrupt, terrestrial
navigation and timing system as an essential part of our
Nation's infrastructure.
Respectfully submitted,
Dana A. Goward,
President,
Resilient Navigation and Timing Foundation.
______
Prepared Statement of Jason Hartke, President,
The Alliance to Save Energy
Thank you for the opportunity to submit a written statement
regarding the Committee's hearing titled, ``America's Infrastructure
Needs: Keeping Pace with a Growing Economy.''
We look forward to working with you in the 116th Congress to
develop bipartisan policies for rebuilding American infrastructure, and
we submit this statement to highlight the role that energy efficiency
can play in sharply reducing both the costs and carbon footprint of
infrastructure projects.
Infrastructure, of course, is more than roads and bridges. It's the
foundation that determines where and how we fuel our vehicles, deliver
electricity and natural gas, and treat and distribute water. It's our
airports, seaports, transit hubs and other critical public buildings.
These facilities have an enormous impact on U.S. energy consumption,
and a nationwide infrastructure initiative presents an opportunity to
``get it right'' and save consumers and taxpayers decades of wasted
energy costs.
Transportation is now the greatest source of greenhouse gas
emissions in the United States and the second highest expense for
households. Exciting breakthroughs in electrified transit, efficient
alternative fuel vehicles, ridesharing, and other tools have the
potential to enhance travel experiences while reducing energy waste,
congestion and emissions.
Similar energy-saving opportunities exist across other
infrastructure sectors. Water treatment and distribution facilities,
for example, are typically the largest energy users in their local
communities, often accounting for a third or more of a municipality's
total energy consumption. Cutting their energy use by a modest 10
percent could save $400 million a year, according to the EPA. And,
there are enormous opportunities for savings in modernizing public
buildings. The Federal Government alone spends $6 billion annually on
energy for its buildings.
We must avoid the temptation to look only at short-term costs and
build a truly modern infrastructure network that locks in savings over
decades and lays the foundation for a more competitive and productive
economy. In some cases, infrastructure projects can pay for themselves
through public-private partnerships and innovative financing around
energy savings investments. Incorporating energy efficiency can also
provide a host of additional benefits, such as reducing harmful
emissions and improving power grid reliability and resilience--all
while creating good-paying jobs.
Already, energy efficiency supports more than 2.2 million U.S.
jobs, with an employment growth rate double the national average. Seven
in 10 of energy efficiency jobs are in construction and manufacturing.
We encourage you to incorporate energy efficiency in any
infrastructure proposals from the start to make the best, most-
efficient use of taxpayer investments. The Alliance to Save Energy's
infrastructure priorities include:
Laying the foundation for an efficient transportation
sector. The transportation sector is undergoing rapid
transformation due to innovation in new technologies, business
models and connectivity. These new tools could enable a more
efficient, effective, clean, and affordable transportation
system, but their success depends heavily on effective
infrastructure development. For example, for emerging
alternative vehicle markets, especially electric vehicles,
hydrogen fuel cell and renewable natural gas vehicles, the lack
of such infrastructure presents a market barrier to deployment
for highly-efficient vehicles that have great potential to
reduce energy waste and climate emissions in light-, medium-and
heavyduty sectors. Stronger transit systems have an outsized
positive impact on the lives of lowincome, elderly, and
disabled communities, which rely on these services for
mobility. Smarter traffic systems and system optimization at
ports and distribution centers can enhance the longevity of
infrastructure by controlling traffic congestion and optimizing
the vehicles used, reducing maintenance costs while enhancing
safety. And autonomous vehicles and ridesharing could change
the shape of urban mobility. Congress should pursue
opportunities to support these emerging trends to ensure that
the infrastructure built today will be ready for tomorrow's
needs.
Promoting adoption of updated building energy codes, high-
performance buildings, and high-efficiency equipment. Buildings
account for roughly 40 percent of U.S. primary energy use and
76 percent of the electricity we use, and recent climate
assessments and reports consistently point to reducing building
energy consumption as a top solution to reduce greenhouse gas
emissions. As we invest in building and rebuilding the very
places where people and commerce meet, we should ensure these
structures meet the highest standards for efficiency. The
latest model building energy codes deliver 30 percent more
efficiency than codes of just a decade ago, which will result
in more than $5 billion in annual savings for U.S. homes and
businesses from, for example, improved thermal envelopes and
high-efficiency heating and cooling equipment and lighting
fixtures. Just as important, the experiences of states and
communities demonstrate that more efficient buildings are key
to enhancing energy system resilience in the face of extreme
weather events. Congress should ensure that any infrastructure
proposals encourage states and local governments to adopt and
enforce updated building energy codes and promote energy
efficiency retrofits of existing buildings that will deliver
long-term savings to homeowners, renters, and commercial
building owners and tenants and improve the health and
resilience of communities. Energy efficiency delivers savings
to all households and consumers, including those with limited
incomes, and would ensure that the benefits of an
infrastructure package will help the Nation as a whole.
Expanding opportunities for public-private partnerships to
finance projects. The burden of paying for infrastructure does
not need to fall solely upon the shoulders of taxpayers through
direct appropriations. The Federal Government should show
leadership by addressing critical buildings and energy
infrastructure upgrades through public-private partnerships
that leverage private funds to implement resilience-enhancing
energy-and water-conservation measures. To address the backlog
of $165 billion in deferred maintenance projects in Federal
facilities, any infrastructure package should encourage
performance contracting and other financing mechanisms at all
levels of government to install high-efficiency equipment and
systems in individual buildings and across campuses with little
to zero upfront cost to taxpayers and tremendous resilience
benefits for missioncritical public facilities.
Applying life-cycle cost-effectiveness analysis to all
appropriate projects. To deliver the best long-term return-on-
investment to taxpayers, Congress should avoid short-sighted
decisions based on incremental first-costs and instead take
into account costs and benefits over the expected lifetime of
physical infrastructure. This focus on lower up-front costs
rather than lower operations and maintenance costs tends to
encourage an under-investment in energy-and water-saving
technologies that then saddle unsuspecting homeowners,
consumers, and businesses with an unpredictable burden of
higher utility bills. A missed opportunity now means future
generations of taxpayers will be paying for our mistake for
decades to come.
We are eager to work with you and your colleagues to identify
specific programs, activities, and projects that can help achieve our
mutual goals and build a smarter, less expensive and more sustainable
infrastructure system. Please also find attached a letter from the
Alliance and 30 other companies and organizations urging Congress to
embed energy efficiency into infrastructure legislation.
About the Alliance to Save Energy
Founded in 1977, the Alliance to Save Energy is a nonprofit,
bipartisan alliance of business, government, environmental and consumer
leaders working to expand the economy while using less energy. Our
mission is to promote energy productivity worldwide--including through
energy efficiency--to achieve a stronger economy, a cleaner environment
and greater energy security, affordability and reliability.
Sincerely,
Jason Hartke,
President,
The Alliance to Save Energy.
______
Response to Written Question Submitted by Hon. John Thune to
William Friedman
Question. Mr. Friedman, as you know, in addition to establishing a
National Multimodal Freight Policy, the FAST Act created the Build
America Bureau to strengthen coordination between modes on multimodal
infrastructure planning and investment in the United States. While
there certainly are no seaports in South Dakota, they play a critical
role in connecting my home state to markets around the world. Do you
believe the Build America Bureau has improved project delivery for port
infrastructure improvements, and do you see opportunities for
improvements to multimodal planning and investment?
Answer. Senator Thune. Thank you for this question. The short
answer is I believe the Build America Bureau is getting better at
delivering port infrastructure improvement opportunities. As an
example, can be a tool for ports to explore ways to access private
capital in public-private partnership. The Rail Rehabilitation
Innovation Financing (RRIF) program has been in existence since 2002,
and only late last year did a port (Port of Everett) receive a RRIF
loan. One recommendation to make RRIF more accessible to ports is to
provide 100 percent financing. AAPA members responded that there were
potentially 75 BUILD/TIGER projects that would become RRIF-financed
projects if the financing fee was removed.
I will add that in building off the FAST Act, establishing a
multimodal freight office within the DOT would best leverage across all
modes planning tools and resources made available in the FAST Act an
AAPA proposed maritime freight supply chain title.
A multimodal freight office is an ideal spot to administer the
soon-to-be-released multimodal freight network and the multimodal
freight plan. Both these documents are templates to work from and would
be best implemented in a mode-neutral office. Additionally, the
multimodal freight office would have oversight over the FAST Act
compliant state freight plans, which are all multimodal.
Furthermore, with multimodal funding programs in USDOT's Federal
Highway Administration, MARAD and FRA, a multimodal freight office will
coordinate and direct investment and policy.
Finally, AAPA believes that a multimodal freight office would
complement the Build America Bureau within USDOT. In the original FAST
Act, consolidating the Build America Bureau's lending and financing
programs into one allowed for better leveraging of those programs to
meet the Administration's goals. A freight office would be better
positioned to work with these new, multimodal focused programs, and to
lead the development of a multimodal network necessary to meet 21st
century supply chain and transportation needs.
This type of policy and organization within USDOT would not only
leverage resources but allow for a more comprehensive approach to
freight planning that integrates port states with non-port states such
as South Dakota.
Please feel free to follow up with me or AAPA if we can answer any
additional questions. I look forward to working with you during the
reauthorization process.
______
Response to Written Questions Submitted by Hon. Shelley Moore Capito to
William Friedman
Question. The Heartland Intermodal Gateway (HIG) in Prichard, West
Virginia, sits on 100 acres of land donated by Norfolk Southern
Railway, and various private property owners, along the Big Sandy
River. This facility provides businesses with a truck-to-rail transfer
facility along the Heartland Corridor running form the Port of Virginia
through West Virginia to Chicago.
Intermodal facilities such as the HIG decrease handling, improves
security, reduces damage and loss, and allows freight to be transported
faster. According to the West Virginia Public Port Authority, the HIG
has filled a major hole in the country's intermodal network. The Port
Authority has also identified close to 1,500 jobs being created as a
result of the HIG.
Before its construction, an economic study indicated that
the $30 million investment in the Prichard Intermodal Terminal
would generate a net increase of between 700 and 1000 jobs, and
a statewide benefit of $47-69 million by 2025. Intermodal
facilities, like the HIG, have significant benefits for our
economy. Can you speak to the economic benefits of such
intermodal facilities?
Answer. Intermodal facilities that bring cargo to and from a
maritime port help improve the efficiency of cargo movement through
ports. Rail connections from ports to intermodal transfer facilities
can:
significantly decrease the amount of truck traffic coming
into a port,
decrease truck traffic on interstate roads and subsequent
wear and tear,
lessen pollution as rail movement is more environmentally
friendly, and
improve delivery times.
Ports are often located in coastal cities, where road congestion
can impact a port's ability to move cargo efficiently. Intermodal
transfer facilities can quickly move cargo from congested urban areas
to less congested areas, especially those that utilize rail. Depending
on the location, intermodal transfer facilities also can offer the
added benefit of creating jobs and economic development in more rural
areas. These intermodal transfer facilities often attract distributions
centers, which also create local jobs.
The Department of Transportation programs are very helpful in
establishing and improving these facilities. The BUILD/INFRA/Fast Act
grants provide an important incentive to get these projects built more
quickly. Most multimodal transfer facilities are public-private
partnerships and these Federal grants leverage private sector
improvements. The American Association of Port Authorities (AAPA) has
recommended that the multimodal caps on FAST Act funds be removed in
the next reauthorization bill so there are not limitations on the
amount of funds available for multimodal projects including intermodal
transfer facilities. Other helpful Federal programs in funding the
establishment of these facilities include the Transportation
Infrastructure Finance Innovation Act (TIFIA) and the Railroad
Rehabilitation and Improvement Financing (RRIF) program.
The AAPA's State of Freight III report on Rail Access and Port
Multimodal Funding Needs Report noted that 66.67 percent of ports
reported that funding and financing options are the greatest barriers
to have improved rail access. AAPA port members identified more than
$20 billion in projected multimodal port and rail access needs in the
next decade.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
William Friedman
Freight Investment. I have long been a champion of Federal funds
for freight projects, which for the first time received dedicated
funding in the FAST Act when I authored what became the INFRA program.
Trade and the movement of goods is the backbone of our economy. In
Washington state, we know this all too well as forty percent of our
jobs are tied to trade.
Question 1. Where do you see the main chokepoints that require
multi-modal investments to keep freight moving? How can increased
investments in the freight program better address these challenges?
Answer. Increased interconnectedness and trade have increased the
demands placed on our ports and on our infrastructure more broadly.
While the commerce and travel that flows through our ports has been a
boon to Americans and to our Nation's economy, it has also contributed
to stressed capacity at our ports. Ports have plans to address
increased wait times and other capacity issues with expansion and
investment, but without Federal backing, there is a `chokepoint' in a)
the literally accumulated cargo, and b) the figurative chokepoint on
investment ports are able to undertake. Such a growing issue in the
context of increasing ecommerce and consumer and business expectations
about delivery speed are barreling towards a looming storm.
Increased multimodal investments evidence Congress's attention to a
dynamic and growing economy. As transport, distribution, and logistics
companies innovate and create newer, faster systems, Congress should
modernize its smart investments by doing away with artificial caps on
investment in multimodal projects in order to continue encouraging
innovation.
President's Proposal. During his state of the union speech,
President Trump continued his push for an infrastructure bill. This
echoes his previous calls for a $1 trillion infrastructure investment.
However, instead of Federal investment, his plan relied heavily on
public-private partnerships, which would likely lead to more tolling.
To pay for it, his budget also proposed cuts to current infrastructure
programs.
Question 2. What concerns do you have with the Administration's
proposal to cut Federal funds for current infrastructure programs?
Answer. Through member data, the American Association of Port
Authorities finds that U.S. ports plan investment of $31 billion per
year on average. AAPA is currently conducting its questionnaires for
planned port investment for 2021-2025 and expects to find comparable
numbers.
Only with the help of the Federal Government's fulfilling its
explicit Constitutional role for maintaining the national waterways,
inter alia, can American ports have requisite resources to finance
badly-needed investments. AAPA's data-backed survey of the investment
landscape suggests ports continue to need the government as a partner,
and, in fact, would benefit from government playing an increased role
in infrastructure investment in order to meet growing demand and to
leverage private capital.
Question 3. One of the President's proposed cuts was to the BUILD
grant program, how would that impact ports?
Answer. In FY19, U.S. Department of Transportation (USDOT) awarded
seven marine-related projects, including five seaport projects, among
the 55 selected for funding in the 11th round of BUILD. AAPA applauds
these important projects around the country, but there's always more to
be done. Moreover, though maritime represents one quarter of the
intermodal mix, it only received 14 percent of BUILD grants this Fiscal
Year. AAPA hopes to help Congress and the Department of Transportation
boost that number--both in gross and percentage terms--in order to
reflect the important role played by maritime transport.
Paying for Infrastructure. We can all agree that we need a robust
infrastructure investment, but when it comes time to pay for it the
conversation dies down pretty quickly. Without significant leadership
on how to pay for this much needed investment, I'm concerned that all
we will have is conversation.
Question 4. Why is it so important that we heed these calls for
action now? What will happen if we continue to punt this conversation
down the road?
Answer. To reiterate the above, AAPA's last investment
questionnaire showed that ports plan for about $31 billion per year in
infrastructure investment. Ports with growing volumes must invest
continuously to meet demand, and in some cases, U.S. ports that don't
offer the best possible service may lose business to ports in Canada or
Mexico. In all cases, ports must offer a safe and reliable place for
travelers and shippers to operate.
Long-term, sustainable multimodal funding is critical, and we
encourage you to start looking at solutions. AAPA has endorsed the
concept of a 1 percent waybill fee as an equitable approach to provide
immediate and long-term funding for multimodal freight infrastructure
challenges. Additionally, AAPA supports a gas tax increase as well as a
VMT program. With all increased funding, AAPA recommends that any new
funding be multimodal-eligible.
National Cyber Strategy. Modern infrastructure relies on
interconnected broadband communication networks that optimize
performance and efficiency. This applies to everything from intelligent
transportation to smart grid, and smart cities systems.
It's not just new personal devices--all of our infrastructure is
becoming digital infrastructure.
This increased connectivity comes with new threats--we have to get
serious about cybersecurity in this country. This Administration's
failure to implement a real, consistent and robust cyber strategy puts
our national security and everything that uses our communication
networks at risk.
Question 5. Do you agree that it is time for the Federal Government
to craft and implement a comprehensive national cyber strategy? What
are the risks to our national and economic security without such a
strategy?
Answer. While AAPA currently does not take a position on a national
strategy, cyber incidents have had an impact on the shipping industry.
Moreover, because of the global nature of shipping, it is easy for
malware to spread rapidly and without regard for borders. In that vein,
international and private-public cooperation is just as important a
national plan, especially in the ways an attack might occur, spread,
and damage a global supply chain.
Most ports are targets ripe for cyber attacks given the second-
order effects of disrupted supply chains and affected travelers. Ports
are critical infrastructure as designated by DHS, so they will always
be on the proverbial front lines of cyber security and are always ready
to play their part.
Question 6. What cyber security threats are you seeing to the
infrastructure you rely on and what tools do you have to combat these
cyber threats?
Answer. An attack that takes down a port's connectivity and/or
communications can freeze movement of all freight and bring operations
to a standstill. Such an incident can cost millions of dollars just to
get business back up and running to say nothing of the almost-
incalculable economic costs of halted goods--including perishables--not
getting to where they need to go, along with stranded travelers.
Supply chain partners must have top-notch firewalls and
authentication between and among themselves because of their continuous
communications about freight location, customer data, and more.
Blockchain increases the level of interconnection almost infinitely.
All partners in the supply chain should have redundant systems in case
one is attacked by ransomware, for example.
Not all of these issues face ports per se but rather their
customers, tenants, and partners. Nevertheless, ports work hard to
understand their industry issues and the growing interconnected between
and among port users.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
William Friedman
The efficient flow of freight across America's transit systems is
crucial to the competitiveness of our economy. When shippers are
delayed by major congestion and outdated infrastructure, products don't
arrive on time, businesses suffer and costs for consumers go up.
Question. In addition to addressing major freight bottlenecks, what
investments should we be making to improve supply chains and the flow
of freight?
Answer. Decades of growth in global trade have seen more people and
businesses trading in America. In the last decade, the growth in the
volume and market share of ecommerce has put more demands on
infrastructure and supply chains, which do their best to keep up but
which, as you note, need better, smarter investments.
Increased multimodal investments evidence Congress's attention to a
dynamic and growing economy. As transport, distribution, and logistics
companies innovate and create newer, faster systems, Congress should
modernize its smart investments by doing away with artificial caps on
investment in multimodal projects in order to continue encouraging
innovation.
An overriding economic lodestar should be a welcoming business and
investment environment. When businesses believe trade policy is
predictable and welcoming, they are more likely to make the investments
needed to meet the increased--and hopefully continuing--decades of
increased demand in trade.
______
Response to Written Question Submitted by Hon. Tom Udall to
William Friedman
Question. Mr. Friedman, it's not just physical infrastructure that
can cause bottlenecks at our ports of entry. Technology also limits how
fast we are able to process and inspect the increasing volume of trade
at our borders. Innovations like non-intrusive inspection systems have
helped alleviate some of these challenges. What technologies should we
be thinking about right now to integrate infrastructure improvements
that will improve security while also reducing friction at our ports of
entry?
Answer. For all its laudable work, Customs and Border Protection
(CBP) admits it is in desperate need of capital investment. Upgrades to
its tools and technology will help the United States keep pace with the
rest of the world in scanning and clearing goods; this is an issue so
immediate that our government is consulting with other governments to
learn how fast it is falling behind. Two immediate infrastructure
investments--needed no matter how fast non-intrusive inspection grows--
are long-lasting conveyer belts and container straddle carriers.
Scanning technology is still only as good as its users, and the
Federal Government has a vital role to play with freight flow
performance. For our ports to perform efficiently, CBP must be
adequately funded and staffed. As an industry, with growing volumes in
freight and passengers, we would like to see, at a minimum, annual
hiring of CBP staff to 500 annually, over and above attrition. This may
sound like an appropriations or Homeland Security issue, but it is a
supply chain problem.
______
Response to Written Questions Submitted by John Thune to
Ian Jefferies
Question 1. Mr. Jefferies, you mentioned in your testimony the
importance of innovative technologies to the freight rail industry.
Could you elaborate on how the railroads are utilizing emerging
technologies to improve safety and enhance rail service?
Answer. According to Federal Railroad Administration (FRA) data,
recent years have been the safest on record for the rail sector. This
achievement is due in large part to the industry's strong safety
culture, visible in everything from training to operational protocols.
Even so, accidents sometimes occur. Railroads prioritize
investments to address and eliminate the causes of these accidents,
knowing they will have a significant impact on the long-term safety of
the freight rail network.
Technology plays a crucial role in achieving that goal. Today's
rail technology enables railroads to inspect their track and equipment
with greater efficiency and reliability: Railroads are using ultrasound
technology to see inside steel rail; ground-penetrating electromagnetic
radar to assess the condition of ballast and detect abnormalities;
wayside detectors using infrared and lasers to assess bearings, axles,
wheels and springs as trains pass by at up to 60MPH; and machine
visioning that capture 50,000 images per second of service and safety
critical components on a passing train. Railroads use these insights to
improve safety by identifying potential problems and proactively
scheduling maintenance, helping to keep small issues from becoming big
problems.
In addition to these important safety benefits, emerging
technologies are also helping the railroads improve operations that
allow railroads to maintain their competitive edge. By applying
advanced software and technologies to operations, including advanced
dispatch-planning to optimize train movements, railroads move freight
more efficiently and cost-effectively than ever before--to the benefit
of both the railroads and rail shippers. Efficiency and productivity
improvements help railroads keep prices low. In fact, rail shippers
today can move roughly twice the amount of freight for nearly the same
price paid in 1980, giving them an edge in an increasingly globalized
economy.
As a follow-up, could you provide an example of where you
believe advancements in technology have outpaced the current
regulatory framework, and offer suggestions for how these
advancements could be better incorporated into regulation?
Answer. The freight railroads have made significant advances in
continuous rail inspection, currently deployed extensively in Europe,
China and Japan, that makes it possible to use non-stop inspection
vehicles to locate and repair potential rail defects much earlier than
previous inspection methods. However, FRA regulations require that when
such technology is used, potential defects must be verified within four
hours. As a practical matter, this means the employees testing the
track must stop and verify before the inspection vehicle can proceed--a
tremendously inefficient use of expensive innovative technology. Stop
and verify should be the rule only for significant defects. Although
the FRA has granted waivers that allow certain railroads to deploy
continuous rail testing, the uncertainty associated with temporary
waivers is an impediment to long-term investment and innovation. AAR
members believe regulations should allow for the use of such technology
that results in equivalent or higher levels of safety.
In addition, FRA should be encouraged to expand the use of test
programs to more nimbly respond to rapid advances in technology. For
example, new and alternative automated track inspection technologies
provide an objective method to evaluate track conditions and to
identify track defects. In contrast to visual inspections by track
inspectors, as currently required by FRA regulations, automated
inspections can take key measurements continuously and at track speed,
allowing the inspection of more track in any given time period. Onboard
computers process the enormous amount of raw data in real time and
produce concise track condition reports, noting indications of track
deficiencies so that track owners can take prompt remedial action.
These technologies are making the railroad safer, but have also
outpaced the current regulatory framework. Test programs are one way to
provide the safety regulator with an efficient and effective way to
authorize the demonstration of new technology or processes.
Lastly, substantial data has conclusively established that reduced
air brake testing, which would allow rail cars to be off-air for
extended periods of time (well beyond the required four hours and as
currently permitted in Canada) could be permitted without any safety
degradation. In most situations, harmonizing FRA air brake testing
regulations with Canadian regulations would better facilitate
operational efficiencies across the North American rail network without
jeopardizing safety.
Question 2. Mr. Jefferies, as you know, the FAST Act made important
strides to streamline the project permitting process for railroads.
Building on these changes, does your industry see additional
opportunities to improve project delivery and better enable investment
in safe and efficient freight rail infrastructure?
Answer. The freight railroads applaud Congress for their work in
both MAP-21 and the FAST Act to streamline the Federal permitting
process and speed project delivery through significant reforms, such as
expanding categorical exclusions and allowing for concurrent reviews.
Delays in permitting slow down the modernization of rail infrastructure
and cost the rail industry billions of dollars each year, which could
otherwise be invested back in the network. The freight railroads
encourage the Committee to build upon the successful streamlining
provisions from previous reauthorization bills to provide further
relief.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Ian Jeffries
Freight Investment. I have long been a champion of Federal funds
for freight projects, which for the first time received dedicated
funding in the FAST Act when I authored what became the INFRA program.
Trade and the movement of goods is the backbone of our economy. In
Washington state, we know this all too well as forty percent of our
jobs are tied to trade.
Question 1. Where do you see the main chokepoints that require
multi-modal investments to keep freight moving? How can increased
investments in the freight program better address these challenges?
Answer. Within the interconnected freight network, the ``first
mile'' and ``last mile'' connections, where freight is handed off from
one mode to another, are highly vulnerable to disruptions and improving
them would lead to especially large increases in network efficiency and
fluidity. Policymakers can target multimodal investments by
implementing or increasing funding for programs that improve these
first and last mile connections.
The Transportation Investment Generating Economic Recovery (TIGER)
Federal grant program, its replacement, the Better Utilizing
Investments to Leverage Development (BUILD) Transportation grant
program, and the Infrastructure for Rebuilding America (INFRA) grant
program are examples of approaches to help fund crucial multimodal
projects of national and regional significance that can bring
significant improvements to the flow of freight throughout the country.
Together, these programs have directed billions of dollars to
critical infrastructure projects all over the country. As an example,
the 2016 TIGER award is helping to modernize the Port of Everett
(Washington) South Terminal. The project includes strengthening more
than 500 feet of dock, creating a modern berth capable of handling
roll-on/roll-off and intermodal cargo, and upgrading high voltage power
systems. The project will also construct rail sidings to increase on-
site rail car storage. The entire freight network will benefit from the
efficiencies achieved by this project and those like it.
Paying for Infrastructure. We can all agree that we need a robust
infrastructure investment, but when it comes time to pay for it the
conversation dies down pretty quickly. Without significant leadership
on how to pay for this much needed investment, I'm concerned that all
we will have is conversation.
Question 2. Why is it so important that we heed these calls for
action now? What will happen if we continue to punt this conversation
down the road?
Answer. According to the most recent Budget and Economic Outlook
from the Congressional Budget Office, the Highway Trust Fund is
projected to run a deficit of $191 billion for the 10-year period
beginning in 2020, when the FACT Act is due to expire. Already,
Congress has had to transfer $144 billion from the General Fund to keep
the Highway Trust Fund solvent since 2008. The status quo of funding
public infrastructure--one in which the users of the system are not
covering their full costs--is not sustainable.
The movement away from the user-pays principle also puts the
freight railroads at a distinct competitive disadvantage because they
own, build, maintain, and pay for their infrastructure themselves--
spending $1 billion every other week to maintain their infrastructure.
Each day that passes without action, the problem becomes more
difficult and expensive to fix. The freight railroads believe a long-
term, two-part solution is required. First, the gas tax needs to be
increased to bring revenues in line with expenditures. Second, freight
railroads urge Congress to move to a vehicle miles traveled or weight-
distance tax as soon as practicable. Addressing the solvency of the
Highway Trust Fund and restoring the user-pays requirement should be
among the Congress' top priorities, and the freight railroads stand
ready to support you in these efforts.
Rail Safety. Rail safety continues to be a challenge. In December
2017, Amtrak Train 501 derailed in DuPont, Washington resulting in 3
fatalities and more than 60 injuries. In May 2016, a freight train
hauling crude oil derailed and caught fired in the Columbia River
Gorge.
Rail safety, including the need to fully implement positive train
control, will continue to be a focus this Congress as we work on the
next surface transportation reauthorization.
Question 3. What rail safety actions should Congress consider as we
work on reauthorization?
Answer. Railroads are safe and constantly working to get even
safer. The train accident rate in 2017 was down 40 percent from 2000;
the employee injury rate in 2017 was down 43 percent from 2000; and the
grade crossing collision rate in 2017 was down 38 percent from 2000. By
all these measures, recent years have been the safest in history.
Of course, Positive Train Control (PTC) is an important technology
to reduce accidents attributable to operator error. As noted in my
testimony, Class I railroads had 83 percent of required PTC route-miles
in operation at the end of 2018, well above the 50 percent required by
statute, and each Class I railroad expects to be operating trains in
PTC mode on all their PTC routes no later than 2020, as required by
statute.
Railroads believe that technology is the key to future significant
improvements in rail safety. The industry has been actively looking at
technology to improve the detection of defects before accidents occur,
whether the defects be in track or rolling stock.
Congress should work to ensure safety regulations provide an
incentive to utilize technology that would improve safety, not a
disincentive which is oftentimes the case today. One example is the use
of continuous rail inspection, an area in which the freight railroads
have made significant advances. Currently deployed extensively in
Europe, China and Japan, continuous rail inspection makes it possible
to use non-stop inspection vehicles to locate and repair potential rail
defects much earlier than previous inspection methods. However, FRA
regulations require that when such technology is used, potential
defects must be verified within four hours. As a practical matter, this
means the employees testing the track must stop and verify before the
inspection vehicle can proceed--a tremendously inefficient use of
expensive innovative technology. Stop and verify should be the rule
only for significant defects. Although the FRA has granted waivers that
allow certain railroads to deploy continuous rail testing, the
uncertainty associated with temporary waivers is an impediment to long-
term investment and innovation. AAR members believe regulations should
allow for the use of such technology that results in equivalent or
higher levels of safety and, in the case of continuous rail inspection,
can detect internal rail defects more widely than today.
National Cyber Strategy. Modern infrastructure relies on
interconnected broadband communication networks that optimize
performance and efficiency. This applies to everything from intelligent
transportation to smart grid, and smart cities systems.
It's not just new personal devices--all of our infrastructure is
becoming digital infrastructure.
This increased connectivity comes with new threats--we have to get
serious about cybersecurity in this country. This Administration's
failure to implement a real, consistent and robust cyber strategy puts
our national security and everything that uses our communication
networks at risk.
Question 4. Do you agree that it is time for the Federal Government
to craft and implement a comprehensive national cyber strategy? What
are the risks to our national and economic security without such a
strategy?
Answer. While the Federal Government and the private sector have
worked to implement cybersecurity strategies in a number of key areas--
from the National Cyber Strategy of the United States of America to the
2018 Department of Homeland Security 2018 Cybersecurity Strategy, as
well as a strategy developed by the TSA's interagency and public-
private Transportation Systems Sector Cybersecurity Working Group (TSS-
CWG)--inconsistencies and omissions in implementation of the priorities
defined in the respective strategies have resulted in missed
opportunities to enhance their collective effectiveness. It is clear a
comprehensive approach could provide real benefits to harden both the
public and private sectors from cyber-attacks. Cyber threats pose a
risk to both our national and economic security, which is why the
railroads employ robust cybersecurity efforts, as described in detail
below.
Question 5. What cyber security threats are you seeing to the
infrastructure you rely on and what tools do you have to combat these
cyber threats?
Answer. The types of illicit cyber activity railroads and industry
organizations have encountered include phishing e-mails, attempts to
commit fraud by impersonating corporate personnel, scans for
information on corporate leadership, and occasional high volume or
otherwise suspect activity from foreign Internet protocol (IP)
addresses. The railroads typically report these incidents to government
security and law enforcement agencies and industry partners.
Railroads and industry organizations work continuously to protect
against cyber threats. Perhaps most notable, the industry established
the Rail Information Security Committee (RISC) in 1999 as the focal
point of the its unified, coordinated cybersecurity efforts. The RISC
is comprised of railroads' chief information security officers and
information assurance leads, and is augmented by AAR staff and
representatives of other industry groups.
Also key to our cybersecurity efforts, the railroads work with
public sector partners to share information on cyber threats and
continually work to develop effective countermeasures. The industry's
cyber threat intelligence priorities emphasize tactical analysis of
successful cyber intrusions and blocked attempts that have targeted
private sector and governmental entities. In addition, the railroads
employ a host of other tools to combat cyber threats, including:
Maintaining cybersecurity incident response plans that are
tested regularly in drills and exercises;
Conducting regular comprehensive vulnerability assessments,
including ``penetration testing'' that simulates an attack from
malicious outsiders;
Directing an annual comprehensive industry-wide security
exercise that integrates cyber and physical threats and
incidents; and
Employing effective systems, software, and other
technologies to detect and quarantine cybersecurity threats.
______
Response to Written Question Submitted by Hon. Tom Udall to
Ian Jeffries
Question. Mr. Jefferies, providing Customs and Border Patrol with
additional funding and resources that aid in the inspection of goods
being shipped from Mexico in a timely, efficient, and comprehensive
manner is vital. How would increased investment in technology impact
the railroad industry?
Answer. A train at rest is a train at risk. Implementing innovative
technologies that allow for faster speeds through the border will
reduce risk and increase much needed capacity. Currently, 100 percent
of railcars that enter the United States at the southern border are
examined using outdated Non-Intrusive Inspection (NII) technology that
restricts train speed to 3-5 mph. This speed restriction creates risk
for intrusion to the railcars before they enter the United States.
Improved technology is available that would allow trains to move
through the inspection point faster and yield clearer images for
Customs and Border Protection (CBP) examination. New technologies like
Common Viewer and Machine Learning Algorithms would allow the images to
be adjudicated automatically and viewed from almost any location. These
capabilities would improve the process for both the railroads and CBP
and enhance trade.
Moving trains through the inspection points faster would add
capacity to the rail network and mitigate potential risk. What might
appear to be relatively small gains can result in significant increases
in cargo throughput. Clearly, the railroads, CBP, and the U.S. economy
would benefit from the addition of the enhanced technology.
The rail industry supports investment in additional technological
capabilities for CBP.
______
Response to Written Questions Submitted by Hon. Jon Tester to
Ian Jeffries
Workforce Needs
Question 1. What are the workforce needs in the railroad industry
over the next ten years--especially in rural areas?
Answer. Today, freight railroads employ approximately 165,000
employees, from high school graduates to those holding graduate
degrees, with average wages and benefits totaling $120,000.
The number and geographic location of rail industry workers over
the next ten years will depend on many factors, including, of course,
the state of the economy, since demand for rail service is largely a
function of how well the economy is doing.
That said, America's freight railroads connect markets across the
country and the world, operating on a network of nearly 140,000 miles
in 49 states and the District of Columbia. A huge number of these miles
are in rural areas. That won't change, so by necessity a large share of
rail jobs will be focused in rural areas too.
The specific requirements for jobs in the rail industry vary by
position, but in general they require an unwavering commitment to
safety, an ability to work well in teams, a can-do attitude, and,
frankly, a willingness to work hard. These qualities are not exclusive
to rural America, but they certainly are abundant there, which is why
railroads will continue to rely heavily on rural Americans for the
workers they need to meet our Nation's transportation demand.
Question 2. What actions are being taken to provide training and/or
job opportunities in the railroad industry aimed at hiring of veterans
into positions where they could utilize their skills and develop
professionally?
Answer. The freight railroads depend on veterans as a vital part of
their workforce. In fact, nearly one in five railroaders are military
veterans, and the railroads aim to hire many new employees with
military backgrounds.
The skills developed and valued in the military--a sense of
dedication, discipline, teamwork and adherence to safety--are the same
skills that keep the backbone of the Nation's economy running
efficiently. Veterans are particularly well-suited for railroad careers
because of their experience working with machinery, focus on
operational safety, adaptability to changing conditions and their other
abundant, diverse skills.
Railroads, unlike many other private industries, understand the
technical aspects and demands of an armed forces job. That is why they
work directly with the military to help talented service men and women
transition from military service to private sector railroad employment.
______
Response to Written Questions Submitted by Hon. Shelley Moore Capito to
Matthew M. Polka
Question 1. Last Congress, I introduced the Gigabit Opportunity
(GO) Act and I plan to reintroduce it this Congress. This legislation
would seek expedited deployment of broadband services in low-income
rural and urban communities. The GO Act gives states flexibility,
streamlines existing regulations, and eliminates barriers to investment
so we can connect our low-income and rural communities.
In your testimony, you acknowledge the importance of
maximizing our use of limited Federal funds. As an example,
despite significant Federal and private investment, West
Virginia remains 48th nationally in broadband accessibility.
Encouraging broadband adoptability has been hamstrung by little
competition between service providers, burdensome regulation on
deployment, and unleveraged assets from Federal investments.
Do you have suggestions on best practices for future Federal
investment in this area?
Answer. ACA Connects views Federal Government investments
expansively, including both direct investments and policies that drive
investments, and we believe there are numerous actions by which the
Federal Government can accelerate broadband deployments. First, the
Federal Government can remove barriers to investment by private
broadband providers. This includes facilitating access to poles/ducts/
conduits and public and private rights-of-way. Because access to this
infrastructure is so essential and often costly, actions that remove
barriers to such access would drive increased investment and
deployments. Second, the Federal Government can educate communities
about steps that can be taken to obtain access to high performance
broadband networks for their residences and commercial establishments,
thereby encouraging investments. NTIA's Broadband Now program is an
example of this type of educational outreach, which can be readily
expanded. Third, the Federal Government can directly subsidize
broadband deployments in unserved areas. The evolution of the FCC's
Connect America Fund (CAF) programs show how the Federal Government can
award subsidies efficiently to accelerate the deployment of high
performance broadband networks. For example, in 2015, the CAF Phase II
cost-model program relied on an FCC-developed cost model to award
support to price cap carriers to deploy 25/3 Mbps service in their
service territories. By contrast, several years later, the CAF Phase II
used a reverse auction that awarded far less support per location to
winning bidders than the cost-model predicted to provide much higher
performance broadband service--often 100 Mbps or even 1 Gbps service.
That is a win for unserved communities and for the Federal Government
as it allows existing funds to be used more effectively. Because of
this success, FCC Chairman Pai has announced the FCC will use similar
reverse auction process to award support for the new Rural Digital
Opportunities Fund. Finally, the FCC can partner with states that have
programs that support deployments in unserved areas to drive much
higher performance broadband service in those states. As an example of
such a partnership, two years ago, the FCC leveraged its CAF Phase II
funding by joining with New York and its State Broadband Program to
provide much more robust broadband service to unserved consumers in the
state.
Question 2. Congress has made several steps towards improving the
deployment and accessibility of broadband to rural and tribal
communities. For example, the AIRWAVES Act introduced in the last
Congress by my Senate colleagues--Senator Gardner and Senator Hassan--
included a ``rural dividend'' that would have dedicated 10 percent of
any future spectrum auction funds to support the deployment of wireless
infrastructure in unserved and underserved communities.
How will rural set asides like this be used differently than
Federal support already being distributed through programs like
USF and RUS?
Answer. ACA Connects supports fully funding Federal efforts to
bring high performance broadband service to unserved areas. Today, the
FCC provides annually about $4.5 billion through its high cost fund
programs (Connect America Fund). These programs have helped carriers
afford the significant capital expense involved in the deployment of
broadband service to many millions of unserved locations, reducing the
number of households without access to high-speed Internet access each
year. These programs also offset some operating costs in these areas.
Over the past five years, the FCC, through its Connect America Fund
programs, has found that the most efficient and effective way to award
support is first to ensure that areas receiving support are truly
unserved, so that private investment is not undermined, and second to
use reverse auctions to award support. Additional support, such as a
rural set aside, first should be awarded for both wireline and wireless
services, since support for both is required to close the digital
divide. Second, it would be most efficient to distribute any set aside
funding through existing rules and mechanisms, which Congress and the
FCC or RUS have refined and which are well-known to potential bidders.
______
Response to Written Questions Submitted by Hon. Maria Cantwell to
Matthew M. Polka
Paying for Infrastructure. We can all agree that we need a robust
infrastructure investment, but when it comes time to pay for it the
conversation dies down pretty quickly. Without significant leadership
on how to pay for this much needed investment, I'm concerned that all
we will have is conversation.
Question 1. Why is it so important that we heed these calls for
action now? What will happen if we continue to punt this conversation
down the road?
Answer. The great news about our broadband infrastructure is that
the private sector is continually responding to the demands of
consumers for faster and more reliable services by investing tens of
billions of dollars annually in their networks and is expected to do so
for many years. The government can accelerate deployments by private
providers by eliminating public and private barriers that raise the
costs of broadband builds, which does not cost the government anything.
By removing these barriers, broadband providers will extend their
networks to many locations that are currently uneconomic to reach and,
thus, remain unserved, saving the government from having to subsidize
service to them. In addition, without spending additional funds, the
government can reach more unserved areas by making existing broadband
deployment programs more efficient, as the FCC has been doing with the
Connect America programs. That said, there will still be some unserved
locations in very remote areas that will not be served without the
government providing additional support. It is important to serve these
areas because without access to broadband, people in these areas are
bound to be left behind, economically, socially, and politically, and
we cannot let that happen. In sum, we have an obligation to make sure
all Americans have access to broadband service and with focused
policies we can make that happen within budgetary constraints.
Federal Broadband Investments. The Federal Communications
Commission estimates that 32 million Americans lack access to robust
broadband. That is completely unacceptable in a world where the
Internet is a key driver of economic growth and innovation. Rural
America is being shut out of the emerging opportunities for prosperity
and growth created in our modern economy. We are contemplating
investing a lot of money to solve the rural broadband problem, but we
don't have good information about broadband and that's partly because
the national broadband map hasn't been thoroughly updated in years.
Last year GAO called out inaccurate data and mapping as key to why the
FCC has been unable to help close the digital divide on Tribal lands. I
don't see how we solve these problems with incomplete data. And that is
why this Committee must explore ways to direct the government to
collect adequate, verifiable data about those locations that currently
lack service.
Question 2. Mr. Polka, do we have an accurate picture of how much
money would be needed to get high speed broadband to all the unserved
areas of America? How do you come up with your estimate?
Answer. It is important for Congress to have an accurate picture on
the amount of money needed to get high speed broadband to all
Americans. In deriving ACA Connects' estimates about the cost to bring
current generation broadband service to unserved areas, we used a
combination of public sources and work by a business consulting firm.
The public sources are from the FCC and its Connect America Fund
programs. Data from these programs give us reasonable numbers about
unserved locations that have already been served and the number that
are expected to be served. These programs also tell us the amount of
support the FCC provides, and the FCC's Cost Model provides useful
information about the cost to serve locations, although as we just
learned from the Connect America Phase II auction, these costs are
inflated. ACA Connects relied upon the deployment data available from
Form 477, and we believe this information was sufficient to come up
with a reasonable estimate.
Let me add some final points about broadband mapping. First, we
need to identify the purpose for which we are collecting the data
because that will help establish an efficient collection process. ACA
Connects believes the main purpose for a collection is to more
precisely determine unserved locations in large, rural census blocks
and that by focusing just on this problem, we can expeditiously find
which locations still require service. Second, the perfect should not
be the enemy of the good. With millions of households without broadband
today, we cannot afford to delay implementation of the Remote Areas
Fund (RAF) and the next Connect America auction in price cap carrier
areas because we lack knowledge of broadband availability on a
location-by-location basis. There are immediate, incremental steps that
can and should be made to improve the broadband map, and that
information can be used to better target support to unserved areas.
Third, because information about both locations and service areas is
not static, we will not obtain truly accurate information unless we
have some sort of challenge process.
And finally, I would add that there is often confusion between
wireline and wireless services when there are discussions about
providing service to everyone who needs it. ACA Connects believes that
every household and business needs the kinds of high speed, reliable
broadband that only wired services can provide. So as discussions are
had about compiling useful data to determine served and unserved areas,
we must keep in mind that there is not a one-size-fits-all solution.
Question 3. Without additional direct investment in broadband, do
you believe we will be able to finally close the digital divide?
Answer. Because some remote locations are too costly for private
sector providers to serve, we will continue to need government support
in some form to reach them. That said, we urge Congress to consider
innovative ways to provide this support. Certainly, using reverse
auctions is a step in the right direction to ensuring each dollar is
used as efficiently as possible. But, Congress should consider using
auctions to award funding for one-time capital expenditures in robust
wired networks to reach these unserved locations. After this support is
awarded, there should be no or little need to provide additional
funding. We also believe Congress should consider for ``in-fill''
unserved locations in price cap carrier areas, that is unserved
locations that are within reasonable reach of current providers,
providing vouchers for consumers to use to obtain broadband service
from any provider.
Question 4. Would you be supportive of spending some infrastructure
funds on maintaining an updated map?
Answer. Yes, we would support Congress appropriating new funding,
including as a part of an infrastructure bill, to develop and maintain
an accurate broadband map.
Question 5. Will you and your member companies commit to work with
this Committee on broadband mapping reform efforts?
Answer. Yes, we commit to working with this Committee on broadband
mapping reform efforts.
National Cyber Strategy. Modern infrastructure relies on
interconnected broadband communication networks that optimize
performance and efficiency. This applies to everything from intelligent
transportation to smart grid, and smart cities systems.
It's not just new personal devices--all of our infrastructure is
becoming digital infrastructure.
This increased connectivity comes with new threats--we have to get
serious about cybersecurity in this country. This Administration's
failure to implement a real, consistent and robust cyber strategy puts
our national security and everything that uses our communication
networks at risk.
Question 6. Do you agree that it is time for the Federal Government
to craft and implement a comprehensive national cyber strategy? What
are the risks to our national and economic security without such a
strategy?
Answer. A comprehensive strategy that marries the efforts of
federal, state, local, other public entities and the private sector is
essential, especially when confronting nation-state level threats. No
one company in ACA Connects has the ability to fight the ever-evolving
set of threats without the benefits of that kind of cooperation
(information sharing, best practices, etc.). The Congress and the
Administration have offered numerous ideas about how to make that
partnership a reality.
Many good ideas are common in various proposals that seek to secure
Federal networks and information, secure critical infrastructure, and
combat cybercrime and improve incident reporting. Many proposals
specifically contemplate that the Federal Government will work with the
private sector to manage risks to critical infrastructure, including
communications networks, and maturing existing cybersecurity offerings
and engagements to better manage those risks. We support that approach,
and urge the Federal Government to build on initiatives that already
exist rather than attempt to reinvent the wheel.
We would caution against adopting prescriptive cybersecurity
mandates for the private sector. No mandates of any kind can reflect
the realities of the risk-based nature of the networks, systems and
data involved and the challenge that small, capital constrained,
entities have to deal with such new costs. There is no such thing as a
``one-size-fits-all'' approach to cybersecurity, and the threats to the
ecosystem grow and evolve far too quickly for mandates to prove
effective. Private industry, and the communications sector in
particular, must have the continued flexibility to adapt quickly to new
threats. The government has an important role in promoting efforts to
identify and mitigate risks, but should be wary of taking any actions
that may interfere with private industry's efforts to evolve in
response to an ever-changing threat environment.
Question 7. What cyber security threats are you seeing to the
infrastructure you rely on and what tools do you have to combat these
cyber threats?
Answer. While ACA Connects is a member of several information
sharing organizations, including DHS's National Coordinating Center for
Communications, we do not collect information about specific threats to
our members, or their cybersecurity practices. Companies generally view
that kind of granular information as sensitive and confidential. That
said, there is publicly available information on broader industry
trends, including the CSRIC report mentioned above.
Innovative Partnerships to Advance Broadband. In Washington we have
a robust system of public utility districts and port districts--many of
them have unused fiber capacity. We have seen some successful cases
where public entities team-up with private companies and get service to
unserved areas using extra fiber capacity. It saves money and gets
communities connected faster than laying new fiber.
Question 8. Have you seen successful use cases in which existing
infrastructure like dark fiber is leveraged to extend broadband
coverage and if so what are the features of those projects?
Answer. We do not have information from our members that they are
leveraging existing public entities' unused or underutilized
infrastructure to extend broadband coverage to reach unserved
locations.
Question 9. What can we do to support the replication of these
successful partnerships?
Answer. ACA Connects has long supported policies such as Dig Once
where public conduit and rights of way are accessed more efficiently
and would encourage implementation of similar opportunities in any new
infrastructure package. Where we have good models about how providers
leverage existing infrastructure to extend broadband coverage to reach
unserved locations, we suggest having NTIA incorporate them into its
Broadband USA program.
Innovative Last-Mile Technologies. Technologies that connect cities
and urban centers are not a one-size-fits-all solution to bringing
broadband to every American in underserved regions. Approaches that
work in urban environments often are cost prohibitive or impractical in
sprawling rural areas. We need innovation to solve the current rural
broadband divide.
Question 10. What novel technologies are in development or being
deployed to solve the last-mile broadband problem?
Answer. ACA Connects' members today are bringing sophisticated
DOCSIS 3.0/3.1 and all-fiber technologies to rural areas. These
technologies provide the highest performance broadband capabilities and
help ensure that rural residents, businesses, and institutions have the
same type of connectivity found in urban areas. ACA Connects believes
we should endeavor to supply all Americans with these superior
broadband technologies. In much more remote areas where it would be
cost prohibitive to deploy all-wireline plant, some ACA Connects
members are using a combination of fiber backbones with fixed wireless
tails to deliver broadband service. While the performance for such
networks are not as great as an all-wireline network, these members
find it provides good service and can be an interim step before an all-
wireline deployment is economically justified.
______
Response to Written Question Submitted by Hon. Amy Klobuchar to
Matthew M. Polka
As co-chair of the Next Generation 9-1-1 Caucus, I recognize that
our Nation's 9-1-1 system is in urgent need of an upgrade--and that
infrastructure is a key aspect of addressing public safety issues.
Question. Why should upgrading our Nation's 9-1-1 systems be an
infrastructure priority?
Answer. For decades, 9-1-1 has been the critical lifeline that
Americans rely on to obtain help in times of emergency or distress. As
technology continues to evolve and Americans migrate to more advanced
communications infrastructure, it is essential that the Nation's 9-1-1
system evolve with them, so that they can continue to get the help they
need when they need it. Today, ACA Connects' members and their industry
peers are working in close partnership with the public sector to
facilitate the transition to Next Generation 9-1-1 (NG 9-1-1),
replacing the copper-line technologies of yesterday with the feature-
rich, advanced Internet Protocol networks of today and tomorrow. ACA
Connects has contributed to these efforts in part through its
participation on the FCC's Communications Security Reliability and
Interoperability Council (CSRIC), a diverse, multi-stakeholder body
that has developed recommendations and voluntary best practices aimed
at promoting a smooth and swift NG 9-1-1 transition. Through
cooperative efforts such as these, the communications industry,
emergency authorities, and other stakeholders are working to deliver to
the American people the next-generation 9-1-1 system they deserve.
______
Response to Written Question Submitted by Hon. Tom Udall to
Matthew M. Polka
Question. Your testimony spoke to the importance of ``dig once''
legislation. Can you outline specific ways that ``dig once'' principles
can benefit rural buildout?
Answer. Deploying new fiber is expensive, and most of the cost
involves construction, that is, digging to bury fiber or stringing
fiber on poles. Therefore, if you can lower the cost of construction,
you can ``move the needle'' to accelerate fiber deployments. ``Dig
once'' policies are one way to lower the cost of construction because
they enable multiple providers to share the cost. For example, in a
rural area, if there is new road construction or if a gas or water
provider is opening a trench, it would be more cost effective for a
broadband provider to install fiber at the same time.
______
Response to Written Questions Submitted by Hon. Jon Tester to
Matthew M. Polka
Needed Level of Infrastructure Investment
Question 1. How much money would it take to build out 5G and Cable?
Can you break it down between private and public dollars (including an
additional breakdown between Federal and state funds?
Answer. ACA Connects members are in the process of upgrading their
wireline networks to deliver DOCSIS 3.0/3.1 and all-fiber technologies
to the rural areas they serve. They also are expanding their networks
where economically justified. We estimate they are spending
approximately $1 billion dollars annually and that they will continue
these expenditures at least over the next decade. Private investments
by ACA Connects members and other providers will bring high performance
broadband service to most rural areas, but many areas are too costly to
serve with private investment alone. In these areas, public
expenditures are required, and the FCC spends approximately $4 billion
annually on its Connect America programs, although this funding is both
for capital and operating costs. The FCC also is providing billions of
dollars annually for E-rate and Rural Telehealth support. As for the
RUS, it provides support for capital investments through grants, loans,
and loan guarantees. FY 2018 RUS appropriations provided $5 million for
broadband loans, $30 million for Community Connect grants, about $1
billion for loan subsidies for the Telecommunications Infrastructure
program, and $600 million for the new Reconnect pilot program. We do
not know the amounts that states are spending to support broadband
deployments in unserved areas. We also do not know the cost of 5G
deployments.
Question 2. You mentioned your members are investing $10 billion
per year. At that rate, how long will it take to completely buildout
rural areas?
Answer. ACA Connects' members have invested approximately $10
billion over to the past decade in their broadband networks, and we
estimate they are spending about $1 billion annually to upgrade and
extend these networks. We further estimate they will continue this
expenditures for the next decade.
Workforce Needs
Question 3. Do you have adequate workforce to continue broadband
buildout? If we need workers, what types of training programs can be
established in rural areas?
Answer. ACA Connects' members have not reported they are
encountering any issues in getting enough workers to upgrade and expand
their networks.
Question 4. What do you see for our Nation's veterans who have come
home with a variety of skills that might be useful in deploying
broadband and cable across the nation?
Answer. Given that cable and other broadband providers are making
enormous investments in their networks and will continue to do so, we
expect there will be substantial opportunities for veterans to be hired
by broadband construction firms.
______
Response to Written Question Submitted by Hon. John Thune to
Chris Spear
Question. Mr. Spear, as you know the booming economy has led to the
lowest unemployment rate since 1969, which means that many industries,
including yours, are looking to expand their workforce. As we move
toward consideration of infrastructure issues this Congress, workforce
development is sure to be a part of that conversation. Does ATA have
any recommendations for policies which encourage hiring and connect
people to well-paying jobs?
Answer. Thank you for this question, Senator. As you may be aware,
according to a March 2018 report by the Council of Economic Advisers,
truck drivers are among the top ``infrastructure occupations'' that
will be needed and in increased demand with expanded investments in
infrastructure.\1\ However, the trucking industry is already facing a
severe labor shortage that threatens to increase the cost of moving
freight and reduce supply chain efficiencies. In 2017, for example, the
industry was short 50,000 drivers, the highest level on record. If
current trends hold, the shortage could grow to more than 174,000 by
2026. Over the next decade, the trucking industry will need to hire
roughly 898,000 new drivers, or an average of nearly 90,000 per year.
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\1\ The Council of Economic Advisers, ``The Economic Benefits and
Impacts of Expanded Infrastructure Investment,'' March 2018, at 26.
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In recognition of challenges like these, at last March's
infrastructure hearing before this Committee, Labor Secretary Alex
Acosta specifically advocated for workforce development reforms to be
included in an infrastructure package. In particular, Secretary Acosta
testified in support of occupational licensing reform. As you may be
aware, reforming outdated occupational licensing requirements has been
a bipartisan priority of the past three administrations, and there is
broad bipartisan support for rolling back these unnecessary barriers
that hold back so many Americans, which disproportionately affect
African-Americans, Hispanics, military spouses and veterans, returning
citizens, and the poor.
To help alleviate this problem in the trucking industry, ATA
supports a number of occupational licensing reforms.
First, ATA supports lowering the minimum age requirement for
interstate truck driving from 21 to 18--but only for qualified
apprentices that satisfy the safety, training, and technology
requirements spelled out in the DRIVE Safe Act (S. 3352 in the 115th
Congress). Modern-day vehicle safety technologies have advanced by
several orders of magnitude since the current minimum age requirement
was promulgated decades ago before the advent of the internet. And
research has shown that the technologies that would be required by the
DRIVE Safe Act and endorsed by the NTSB--technologies such as active
braking, collision avoidance, and event recorders--significantly
improve safety performance. Meanwhile, 6.4 million Opportunity Youth in
this country are neither employed nor in school, even as the Nation is
short 50,000 truck drivers. An update to the minimum age requirement is
well over-due.
Second, to better connect job-seekers to trucking careers that
offer a median salary of $54,585, health and retirement benefits, in
addition to potentially thousands of dollars in signing bonuses, ATA
supports efforts to require states to better serve the growing number
of truck driver candidates who receive driver training outside their
state of domicile. Currently, out-of-state trainees have to travel back
and forth to their home state, every time they pass either the CDL
knowledge test or skills test--just to obtain the basic occupational
licenses necessary to launch their trucking career. This arrangement
imposes unnecessary financial burdens on those who can least afford it
and exposes them to skill degradation. This problem could be addressed
by requiring states receiving Federal funds for infrastructure projects
to allow such out-of-state trainees to (1) complete all training, (2)
take all necessary tests, and (3) obtain all necessary credentials in
the state in which they are receiving training- without having to
travel back to their home state.
As the Council of Economic Advisers has noted:
Because [occupational] licenses are largely granted by states
(rather than being nationally recognized), licensing inhibits
the free flow of licensed workers across state boundaries to
better match labor supply to labor demand. Unless the
geographic footprint and skill needs of expanded infrastructure
investments match the geographic distribution of currently
unemployed infrastructure workers, some reshuffling of workers
across state lines may be needed. \2\
---------------------------------------------------------------------------
\2\ Id. at 33 (emphasis added).
In the trucking industry, the geographic distribution of currently
unemployed truck driver candidates does not match the geographic
footprint of Federal workforce development investments. Accordingly,
individuals aspiring to become truck drivers are crossing state lines
to obtain state-of-the-art training from motor carriers that have the
support of Federal workforce dollars and have been hiring minorities,
veterans, apprentices, and other underrepresented populations at
industry-leading rates.
To better facilitate and scale this innovative model of workforce
development, ATA supports efforts to require states of domicile to (1)
accept the results of an applicant's CDL knowledge test administered in
another state, and to (2) electronically transmit or deliver by mail
the relevant credential--be it a CLP or a CDL--to the applicant without
requiring him or her to physically come back to the state of domicile.
______
Response to Written Question Submitted by Hon. Shelley Moore Capito to
Chris Spear
Question. Thanks to a recent approval of $1.6 billion dollar road
bond referendum by West Virginia voters, my state has already begun to
move forward on numerous infrastructure projects. This has been a huge
investment. Despite my state's relatively small population we have been
able to step up.
For example, as part of the referendum our state is upgrading U.S.
Route 52 (King Coal Highway) into a high-speed four-lane divided
highway. This road links an intermodal facility in Prichard, West
Virginia with I-64, and its expansion will facilitate the movement of
freight and increase safety for truck drivers who currently have to
navigate a two-lane road almost 15 miles.
Have you seen other examples of states who have taken it
upon themselves to improve their surface transportation
systems?
How can we continue to promote such initiatives as Congress
continues to work towards a highway bill?
Answer. Over the past 5 years more than half the states increased
their fuel taxes. In addition, during the 2018 election voters in 31
states approved 79 percent of 352 state and local ballot measures.
These measures are expected to generate an estimated $30 billion in
one-time and recurring revenue for transportation infrastructure
investments. While many states and their citizens have shown a
willingness to invest in transportation, without additional Federal
investment our highways will continue to fall into disrepair. On
average, the federal-aid highway program covers about half of states'
highway capital budgets. Despite increased revenue generation, West
Virginia continues to rely heavily on Federal aid to maintain and
improve its highways, with $371 million in Federal funds supplementing
the State Road Fund in FY2018. Furthermore, the state issued $500
million in GARVEE bonds, which are backed by anticipated future
federal-aid funds.
ATA hopes that more states will follow West Virginia's example by
raising additional money for local investments. Generally speaking, the
public will support these initiatives if they perceive that the money
is likely to be used productively. Congress can assist in this regard
by ensuring that Federal funds are used on the most cost-beneficial
projects and by further streamlining the project approval process.
Response to Written Questions Submitted by Hon. Maria Cantwell to
Chris Spear
Freight Investment. I have long been a champion of Federal funds
for freight projects, which for the first time received dedicated
funding in the FAST Act when I authored what became the INFRA program.
Trade and the movement of goods is the backbone of our economy. In
Washington state, we know this all too well as forty percent of our
jobs are tied to trade.
Questions 1. Where do you see the main chokepoints that require
multi-modal investments to keep freight moving? How can increased
investments in the freight program better address these challenges?
Answer. The American Transportation Research Institute (ATRI)
releases an annual report on the worst highway freight bottlenecks.
These chokepoints cause a disproportionately high share of the $75
billion congestion cost borne by the trucking industry, which moves 70
percent of the Nation's freight. As part of our $340 billion renewed
commitment to surface transportation infrastructure, funded by an
indexed 20 cent per gallon increase in the fuel tax, ATA has proposed a
$5 billion set-aside of funding for highway bottlenecks. Furthermore,
Congress should dedicate funds to highway intermodal connectors, which
connect the National Highway System with seaports, airports, rail
terminals, pipeline terminals and other intermodal facilities. A 2017
Federal Highway Administration report found that many of these crucial
roadways are poorly maintained and highly congested.
President's Proposal. During his state of the union speech,
President Trump continued his push for an infrastructure bill. This
echoes his previous calls for a $1 trillion infrastructure investment.
However, instead of Federal investment, his plan relied heavily on
public-private partnerships, which would likely lead to more tolling.
To pay for it, his budget also proposed cuts to current infrastructure
programs.
Question 2. What concerns do you have with the Administration's
proposal to cut Federal funds for current infrastructure programs?
Answer. The President's recently released budget proposal calls for
a $1 trillion infrastructure investment, including $200 billion in new
revenue over the next decade. Thus far the White House has not released
details about how the additional revenue should be invested or where
the money is to come from. The budget proposal also calls on Congress
to provide long-term funding for the Highway Trust Fund, but once more
does not identify a funding source. The traditional user fee model that
has served our Nation well since 1956 should continue, with a greater
Federal commitment through an increase in the Federal fuel tax and more
strategic investment of resources. While state and local governments
should also do their part to increase transportation investment, this
cannot supplant the Federal role in improving the safety and mobility
of America's surface transportation system, a role that is explicitly
delineated by the U.S. Constitution. Furthermore, public-private
partnerships are viable only in very limited circumstances on
facilities with significant traffic volumes. The vast majority of
projects will not qualify for a P3.
Question 3. How would incentivizing tolling impact trucking
companies?
Answer. Tolling is among the least efficient revenue generating
mechanisms and should be avoided whenever possible. While the cost of
collecting the fuel tax is less than one cent on the dollar, even the
most advanced electronic tolling systems waste 10 percent to 12 percent
of their revenue on capital and administrative costs. On some toll
roads the cost of collection exceeds one-third of revenue. These costs
are passed on to the trucking industry, and carriers are, in turn,
forced to increase their freight rates in order to survive. This raises
the cost of manufactured products, food, housing, and everything else
that Americans purchase. It also makes U.S. businesses less competitive
in global markets. Furthermore, tolls provide an incentive for
vehicles, including trucks, to take alternate routes which are likely
less safe and not as well constructed, increasing crash risk,
maintenance costs, congestion and emissions.
Paying for Infrastructure. We can all agree that we need a robust
infrastructure investment, but when it comes time to pay for it the
conversation dies down pretty quickly. Without significant leadership
on how to pay for this much needed investment, I'm concerned that all
we will have is conversation.
Question 4. Your organization has spent a lot of time thinking
about how to pay for infrastructure and meeting with members to find a
path forward. Given your conversations, where have you found any
consensus on paying for infrastructure?
Answer. There is near universal agreement among surface
transportation stakeholder groups that increasing the fuel tax
represents the best solution for surface transportation infrastructure
funding for the foreseeable future. In addition to ATA, groups that
have endorsed a fuel tax increase include the U.S. Chamber of Commerce,
National Association of Manufacturers, AAA, American Society of Civil
Engineers, Associated General Contractors, and many more. Furthermore,
voters have not penalized elected officials who have supported state
fuel tax increases. Virtually all politicians who have voted for a fuel
tax increase have been reelected. ATA believes that a bipartisan
agreement among Members of Congress to increase the fuel tax, along
with White House support, would produce a successful vote.
Question 5. Why is it so important that we heed these calls for
action now? What will happen if we continue to punt this conversation
down the road?
Answer. In the short term, the Highway Trust Fund is projected to
collapse beginning in FY 2021. Should this happen, approximately
200,000 jobs will be eliminated and vital projects will be canceled
nationwide. Over the long term, the failure to invest in surface
transportation will drive up freight transportation costs, increasing
the price of every product; U.S. businesses will be less competitive,
leading to lost jobs and lower salaries; and congestion will worsen,
and with it more emissions will pollute the air and accelerate climate
change impacts. Most importantly, critical highway safety improvements
will not be made, resulting in more deaths and injuries on our
highways.
National Cyber Strategy. Modern infrastructure relies on
interconnected broadband communication networks that optimize
performance and efficiency. This applies to everything from intelligent
transportation to smart grid, and smart cities systems.
It's not just new personal devices--all of our infrastructure is
becoming digital infrastructure.
This increased connectivity comes with new threats--we have to get
serious about cybersecurity in this country. This Administration's
failure to implement a real, consistent and robust cyber strategy puts
our national security and everything that uses our communication
networks at risk.
Question 6. Do you agree that it is time for the Federal Government
to craft and implement a comprehensive national cyber strategy? What
are the risks to our national and economic security without such a
strategy?
Answer. ATA supports industry specific standards and best practices
for trucking cybersecurity issues and concerns. There are as many
computers, communications, and code in a modern commercial vehicle as
there are in the office buildings that increase business through order
tracking, vehicle monitoring, and logistically maneuvering freight to
those vehicles. ATA has been equally heavily involved with
cybersecurity as with onboard electronic systems that communicate or
automate safety technologies and views security best in industry
vertical integration.
The Federal Government has addressed cybersecurity through the
Department of Transportation National Highway Traffic Safety
Administration's 2016 Cybersecurity Best Practices for Modern Vehicles
and the Department of Commerce National Institute of Standards and
Technology's 2018 version Cybersecurity Framework, to name a few. ATA
has supported these guides, and continues to implement their
recommended actions by way of ATA's many events and meetings.
Additionally, ATA supports the Department of Homeland Security's
recently established Cybersecurity and Infrastructure Security Agency
in protecting critical infrastructure from physical and cyber threats.
We also continue to work with stakeholder coalitions supporting the
Cyber SAFETY Act.
Of these working strategies, and others that ATA would be glad to
share with the committee, we feel that the ATA has been committed to
working collaboratively with the Federal Government efforts to address
cybersecurity risks, and will continue to do so.
Question 7. What cyber security threats are you seeing to the
infrastructure you rely on and what tools do you have to combat these
cyber threats?
Answer. In February 2018, ATA launched the Fleet CyWatch program
for trucking cybersecurity, national security information sharing and
cybercrime reporting. Through our Fleet CyWatch program, ATA is working
with the Federal Bureau of Investigation, the Department of Homeland
Security, and other regulating agencies to assist industry in reporting
cybercrime. Since Fleet CyWatch has been active, there have been no
reported threats on commercial vehicle equipment or infrastructure
connected devices.
______
Response to Written Questions Submitted by Hon. Tom Udall to
Chris Spear
Question 1. Mr. Spear, to follow up to the question that I asked
Mr. Willis, how does the lack of funding for infrastructure projects
affect our workers--particularly long-haul truckers that are in such
short supply?
Answer. The trucking industry was short 50,000 drivers at the end
of 2017, and--due to its aging workforce (average age of 49, which is 7
years older than the average American worker)--needs to hire 890,000
new workers over the next decade to keep up with demand. According to a
report by the American Transportation Research Institute, in 2016 truck
drivers sat in traffic for 1.2 billion hours, equivalent to more than
425,000 drivers sitting idle for a year. Without congestion there would
be no truck driver shortage. If Congress continues to fail to provide
the resources necessary to address our traffic challenges, congestion,
along with the driver shortage, will continue to worsen. This will
increase the cost of freight transportation, along with the price of
every product Americans buy.
Question 2. Mr. Spear, Intel Corporation is a leader of the
Internet of Things in my home state of New Mexico. It estimates the
U.S. freight transportation industry alone could save $168 billion
dollars per year in fuel reduction by implementing I-O-T solutions in
the industry. How can new freight tracking technology help us create a
more efficient supply chain? What efficiencies do you expect to gain
through new Internet of Things solutions?
Answer. Freight tracking technology has been developing a new
generation of services for some time. This type of IoT solution for the
trucking industry allows visibility to the supply chain via real-time
cargo tracking and monitoring. New freight tracking technology
increases visibility, for example, locational scanning (tracking
freight between locations with the knowledge of arrival and delay
times), driver tracking (apps or devices tied to an ELD for HOS, GPS
and GIS updates), and transportation management systems (shipment
pattern analyses, connecting and integrating loads simultaneously).
Advancing IoT solutions is very important to the trucking industry
as it further develops safety technologies, such as vehicle-to-
everything (V2X) connectivity for surface transportation safety
communications. Developed V2X has been shown to greatly reduce
automobile accidents with trucks. In addition, IoT currently has a
large impact on fleet management software systems that manage,
organize, and coordinate vehicles from a central data platform. IoT has
allowed motor carriers manage their fleet operations more smoothly,
thereby reducing costs, improving performance, and ensuring compliance
with government regulations.
[all]