[House Hearing, 117 Congress]
[From the U.S. Government Publishing Office]


                      BOARD MEMBER VIEWS ON SURFACE 
                   TRANSPORTATION BOARD REAUTHORIZATION

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

                                (117-49)

                             REMOTE HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED SEVENTEENTH CONGRESS

                             SECOND SESSION

                               __________

                              MAY 12, 2022

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure
             
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                    U.S. GOVERNMENT PUBLISHING OFFICE                    
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             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

  PETER A. DeFAZIO, Oregon, Chair
SAM GRAVES, Missouri                 ELEANOR HOLMES NORTON,
ERIC A. ``RICK'' CRAWFORD, Arkansas    District of Columbia
BOB GIBBS, Ohio                      EDDIE BERNICE JOHNSON, Texas
DANIEL WEBSTER, Florida              RICK LARSEN, Washington
THOMAS MASSIE, Kentucky              GRACE F. NAPOLITANO, California
SCOTT PERRY, Pennsylvania            STEVE COHEN, Tennessee
RODNEY DAVIS, Illinois               ALBIO SIRES, New Jersey
JOHN KATKO, New York                 JOHN GARAMENDI, California
BRIAN BABIN, Texas                   HENRY C. ``HANK'' JOHNSON, Jr., 
GARRET GRAVES, Louisiana             Georgia
DAVID ROUZER, North Carolina         ANDRE CARSON, Indiana
MIKE BOST, Illinois                  DINA TITUS, Nevada
RANDY K. WEBER, Sr., Texas           SEAN PATRICK MALONEY, New York
DOUG LaMALFA, California             JARED HUFFMAN, California
BRUCE WESTERMAN, Arkansas            JULIA BROWNLEY, California
BRIAN J. MAST, Florida               FREDERICA S. WILSON, Florida
MIKE GALLAGHER, Wisconsin            DONALD M. PAYNE, Jr., New Jersey
BRIAN K. FITZPATRICK, Pennsylvania   ALAN S. LOWENTHAL, California
JENNIFFER GONZALEZ-COLON,            MARK DeSAULNIER, California
  Puerto Rico                        STEPHEN F. LYNCH, Massachusetts
TROY BALDERSON, Ohio                 SALUD O. CARBAJAL, California
PETE STAUBER, Minnesota              ANTHONY G. BROWN, Maryland
TIM BURCHETT, Tennessee              TOM MALINOWSKI, New Jersey
DUSTY JOHNSON, South Dakota          GREG STANTON, Arizona
JEFFERSON VAN DREW, New Jersey       COLIN Z. ALLRED, Texas
MICHAEL GUEST, Mississippi           SHARICE DAVIDS, Kansas, Vice Chair
TROY E. NEHLS, Texas                 JESUS G. ``CHUY'' GARCIA, Illinois
NANCY MACE, South Carolina           ANTONIO DELGADO, New York
NICOLE MALLIOTAKIS, New York         CHRIS PAPPAS, New Hampshire
BETH VAN DUYNE, Texas                CONOR LAMB, Pennsylvania
CARLOS A. GIMENEZ, Florida           SETH MOULTON, Massachusetts
MICHELLE STEEL, California           JAKE AUCHINCLOSS, Massachusetts
Vacancy                              CAROLYN BOURDEAUX, Georgia
                                     KAIALI`I KAHELE, Hawaii
                                     MARILYN STRICKLAND, Washington
                                     NIKEMA WILLIAMS, Georgia
                                     MARIE NEWMAN, Illinois
                                     TROY A. CARTER, Louisiana

     Subcommittee on Railroads, Pipelines, and Hazardous Materials

DONALD M. PAYNE, Jr., New Jersey, 
               Chair
ERIC A. ``RICK'' CRAWFORD, Arkansas  TOM MALINOWSKI, New Jersey
SCOTT PERRY, Pennsylvania            SETH MOULTON, Massachusetts
RODNEY DAVIS, Illinois               MARIE NEWMAN, Illinois
MIKE BOST, Illinois                  STEVE COHEN, Tennessee
RANDY K. WEBER, Sr., Texas           ALBIO SIRES, New Jersey
DOUG LaMALFA, California             ANDRE CARSON, Indiana
BRUCE WESTERMAN, Arkansas            FREDERICA S. WILSON, Florida
BRIAN K. FITZPATRICK, Pennsylvania   JESUS G. ``CHUY'' GARCIA, Illinois
TROY BALDERSON, Ohio                 MARILYN STRICKLAND, Washington,
PETE STAUBER, Minnesota                Vice Chair
TIM BURCHETT, Tennessee              GRACE F. NAPOLITANO, California
DUSTY JOHNSON, South Dakota          HENRY C. ``HANK'' JOHNSON, Jr., 
TROY E. NEHLS, Texas                 Georgia
MICHELLE STEEL, California           DINA TITUS, Nevada
SAM GRAVES, Missouri (Ex Officio)    JARED HUFFMAN, California
                                     STEPHEN F. LYNCH, Massachusetts
                                     JAKE AUCHINCLOSS, Massachusetts
                                     TROY A. CARTER, Louisiana
                                     PETER A. DeFAZIO, Oregon (Ex 
                                     Officio)

                                CONTENTS

                                                                   Page

Summary of Subject Matter........................................   vii

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Donald M. Payne, Jr., a Representative in Congress from the 
  State of New Jersey, and Chair, Subcommittee on Railroads, 
  Pipelines, and Hazardous Materials, opening statement..........     1
    Prepared statement...........................................     3
Hon. Eric A. ``Rick'' Crawford, a Representative in Congress from 
  the State of Arkansas, and Ranking Member, Subcommittee on 
  Railroads, Pipelines, and Hazardous Materials, opening 
  statement......................................................     4
    Prepared statement...........................................     4
Hon. Peter A. DeFazio, a Representative in Congress from the 
  State of Oregon, and Chair, Committee on Transportation and 
  Infrastructure, opening statement..............................     5
    Prepared statement...........................................     7
Hon. Sam Graves, a Representative in Congress from the State of 
  Missouri, and Ranking Member, Committee on Transportation and 
  Infrastructure, prepared statement.............................    45
Hon. Eddie Bernice Johnson, a Representative in Congress from the 
  State of Texas, prepared statement submitted for the record by 
  Hon. Donald M. Payne, Jr.......................................    45

                          WITNESSES \\

Martin J. Oberman, Chairman, Surface Transportation Board, oral 
  statement......................................................     9
    Prepared statement...........................................    10
Patrick J. Fuchs, Member, Surface Transportation Board
Robert E. Primus, Member, Surface Transportation Board
Michelle A. Schultz, Vice Chair, Surface Transportation Board
Karen J. Hedlund, Member, Surface Transportation Board

                       SUBMISSIONS FOR THE RECORD

Statement of Ian Jefferies, President and Chief Executive 
  Officer, Association of American Railroads, Submitted for the 
  Record by Hon. Donald M. Payne, Jr.............................    46
Submissions for the Record by Hon. Eric A. ``Rick'' Crawford:
    Letter of April 21, 2022, from the Agricultural 
      Transportation Working Group to the Surface Transportation 
      Board......................................................    49
    Statement of Patricia Davitt Long, President, Railway Supply 
      Institute..................................................    50
    Position Paper from the Railway Supply Institute.............    52

                                APPENDIX

Questions to Martin J. Oberman, Chairman, Surface Transportation 
  Board, from:
    Hon. Peter A. DeFazio........................................    53
    Hon. Stephen F. Lynch........................................    55
Questions from Hon. Peter A. DeFazio to Patrick J. Fuchs, Member, 
  Surface Transportation Board...................................    55
Question from Hon. Stephen F. Lynch to Robert E. Primus, Member, 
  Surface Transportation Board...................................    57

----------
\\ An oral and prepared statement were provided solely by 
Chairman Oberman. All five Surface Transportation Board members were 
available for questioning.
Question from Hon. Stephen F. Lynch to Karen J. Hedlund, Member, 
  Surface Transportation Board...................................    58
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                              May 6, 2022

    SUMMARY OF SUBJECT MATTER

    TO:       Members, Subcommittee on Railroads, Pipelines, 
and Hazardous Materials
    FROM:   Staff, Subcommittee on Railroads, Pipelines, and 
Hazardous Materials
    RE:       Board Member Views on Surface Transportation 
Board Reauthorization



                                PURPOSE

    The Subcommittee on Railroads, Pipelines, and Hazardous 
Materials will meet on Thursday, May 12, 2022, at 10:00 a.m. ET 
in 2167 Rayburn House Office Building and via Zoom to hold a 
hearing titled ``Board Member Views on Surface Transportation 
Board Reauthorization.'' The purpose of this hearing is to hear 
from members of the Surface Transportation Board on their ideas 
to improve the efficiency and authority of the Board to better 
resolve freight rail conflicts. The hearing participants will 
be the five members of the Surface Transportation Board.

                               BACKGROUND

I. THE SURFACE TRANSPORTATION BOARD

    The Surface Transportation Board (STB or Board) is the 
economic regulator of freight railroads, which carry one third 
of the nation's freight.\1\ The STB is a five-member 
independent agency whose members are appointed by the president 
with the advice and consent of the Senate, serving staggered 
five-year terms. The STB's predecessor, the Interstate Commerce 
Commission (ICC), was created in 1887 by the Interstate 
Commerce Act.\2\ The STB was created by the ICC Termination Act 
of 1995 to maintain federal economic oversight of rail 
carriers.\3\ Congress's only reauthorization of the STB came in 
the Surface Transportation Board Reauthorization Act of 2015, 
which lasted through Fiscal Year 2020.\4\
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    \1\ Congressional Research Service, ``The Surface Transportation 
Board (STB): Background and Current Issues.'' January 19, 2022 (R47013) 
and U.S. Department of Transportation, Pocket Guide to Transportation 
2019, Page 3.
    \2\ P.L. 49-41.
    \3\ P.L. 104-88.
    \4\ P.L. 114-110.
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    The STB's jurisdiction includes overseeing and monitoring 
railroad commercial practices nationally; enforcing the 
railroads' common carrier obligations; evaluating challenges to 
the reasonableness of rail rates; reviewing proposed railroad 
mergers; ensuring rail carriers provide fair employee 
protective arrangements in certain transactions; monitoring 
rail carriers to ensure they are able to earn revenues that are 
adequate for the infrastructure and investment needed to meet 
the present and future demand for rail services; investigating 
rail service matters of regional and national significance; 
authorizing construction, operation, discontinuance, and 
abandonment of rail lines and service; and more recently, 
passenger rail regulation.\5\
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    \5\ STB also has jurisdiction over certain trucking company, moving 
van, and noncontiguous ocean shipping company rate matters; certain 
intercity passenger bus company structure, financial, and operational 
matters; and rates and services of certain pipelines not regulated by 
the Federal Energy Regulatory Commission. https://www.stb.gov/about-
stb/.
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II. STAKEHOLDER REAUTHORIZATION RECOMMENDATIONS

    On March 8, 2022, the subcommittee held a hearing examining 
STB reauthorization recommendations from the following 
organizations: the American Chemistry Council, Amtrak, the 
Association of American Railroads, the Brotherhood of 
Locomotive Engineers and Trainmen, the National Industrial 
Transportation League, and the Private Railcar Food & Beverage 
Association.\6\ In addition, the National Grain and Feed 
Association, Portland Cement Association, the National Stone, 
Sand and Gravel Association, the Fertilizer Institute, the 
Freight Rail Customer Alliance, the American Fuel & 
Petrochemical Manufacturers and several rail unions including 
the Brotherhood of Maintenance of Way Employees, Brotherhood of 
Railroad Signalmen, International Association of Sheet Metal, 
Air, Rail and Transportation Workers Mechanical Division, and 
the National Conference of Firemen and Oilers, 32BJ, SEIU have 
also proposed reauthorization ideas to the Subcommittee.\7\
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    \6\ https://transportation.house.gov/committee-activity/hearings/
stakeholder-views-on-surface-transportation-board-reauthorization
    \7\ https://www.ngfa.org/newsletter/ngfa-food-and-ag-groups-
outline-transportation-priorities-to-incoming-biden-administration/ See 
section on Freight Rail. See also https://www.agri-pulse.com/articles/
17574-ag-groups-detail-priorities-ahead-of-regulatory-hearing-on-
snarled-rail-traffic.
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    Furthermore, the STB held an emergency hearing, ``Urgent 
Issues in Freight Rail Service,'' on April 26 and 27, 2022. The 
Board heard from Department of Transportation (DOT) Secretary 
Pete Buttigieg, Deputy Secretary of Agriculture Dr. Jewel H. 
Bronaugh, and Commissioner Carl W. Bentzel of the Federal 
Maritime Commission.\8\ A number of the shipper organizations 
listed above also participated in this STB hearing. More than 
25 companies and shipper organizations representing farmers and 
agri-business, consumer gas companies, petroleum and oil 
refiners, medical and municipal drinking water suppliers, 
regional and local home electricity providers, and Wall Street, 
among others, expressed concern with current rail service.\9\ 
Additional union representation at the STB hearing included the 
Transportation Trades Department of the AFL-CIO, SMART-
Transportation Division, the Transport Workers Union of 
America, and the Transportation Communications Union/IAM.\10\
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    \8\ Surface Transportation Board Press Release ``Secretary of 
Transportation Buttigieg, Deputy Secretary of Agriculture Bronaugh, FMC 
Commissioner Bentzel to Testify at Hearing on Urgent Issues in Freight 
Rail Service.'' April 22, 2022. https://www.stb.gov/news-
communications/latest-news/pr-22-24/?aiEnableCheckShortcode=true
    \9\ American Farm Bureau Federation, Archer Daniels Midland, the 
Agricultural Transportation Working Group, Cargill, USA Rice, Growth 
Energy, Loop Capital Markets, JP Morgan, Delek Companies, American 
Forest and Paper Association, Packaging Corporation of America, 
National Association of Chemical Distributors, Occidental Chemical 
Corporation, International Liquid Terminals Association, Pilot Travel 
Centers, Arizona Electric Power Cooperative, the National Mining 
Association, the Institute of Scrap Recycling Industries, the Corn 
Refiners Association, TransDistribution Brookfield Railroad and 
Sweetener Supply Company, as examples.
    \10\ Surface Transportation Board Press Release ``Secretary of 
Transportation Buttigieg, Deputy Secretary of Agriculture Bronaugh, FMC 
Commissioner Bentzel to Testify at Hearing on Urgent Issues in Freight 
Rail Service.'' April 22, 2022. https://www.stb.gov/news-
communications/latest-news/pr-22-24/?aiEnableCheckShortcode=true
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    During the STB emergency hearing, numerous shipper and 
union representatives outlined and offered recommendations for 
Congress to consider in STB reauthorization in response to the 
detrimental impacts of erratic and reduced rail service on 
their businesses and therefore increasing prices on American 
consumers at the grocery store, at the gas pump, and on their 
electric and drinking water bills.\11\
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    \11\ https://www.stb.gov/proceedings-actions/filings/
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    Each of the largest Class I railroads also participated in 
the recent STB emergency hearing--Union Pacific, Burlington 
Northern Sante Fe, CSX Transportation, Norfolk Southern, 
Canadian National, and Canadian Pacific.\12\ Kansas City 
Southern did not participate.\13\ Each railroad discussed 
negative impacts from COVID-19, global shipping delays, a tight 
labor market, and equipment shortages.\14\
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    \12\ Surface Transportation Board Press Release ``Secretary of 
Transportation Buttigieg, Deputy Secretary of Agriculture Bronaugh, FMC 
Commissioner Bentzel to Testify at Hearing on Urgent Issues in Freight 
Rail Service.'' April 22, 2022. https://www.stb.gov/news-
communications/latest-news/pr-22-24/?aiEnableCheckShortcode=true
    \13\ Id.
    \14\ https://www.youtube.com/channel/UCgd2FPpKSpQZ57p771aafNg/live. 
See STB Hearing on Urgent Issues in Freight Rail Service--April 26 and 
27.
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    Additional detail about the reauthorization suggestions 
that stakeholders and railroads provided to STB and this 
subcommittee is summarized below.

A. ADMINISTRATIVE AND PROCEDURAL RECOMMENDATIONS

    I. Adequate Funding and Staff

    The National Industrial Transportation League, the American 
Chemistry Council, and the Private Railcar Food and Beverage 
Association recommend that the reauthorization bill include 
adequate funding and staff for the broad range of STB 
responsibilities and to keep pace with changes to the rail 
network.\15\ Amtrak echoed this recommendation, particularly in 
light of Section 22309 of P.L. 117-58, the Infrastructure 
Investment and Jobs Act's (IIJA) creation of a Passenger Rail 
Program within the STB.\16\
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    \15\ Testimony of Brad Hildebrand, Member, National Industrial 
Transportation League, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Page 11. Testimony of Chris Jahn, 
President and CEO of the American Chemistry Council, March 8, 2022. 
https://transportation.house.gov/committee-activity/hearings/
stakeholder-views-on-surface-transportation-board-reauthorization. Page 
7. Testimony of Herman Haksteen, President of the Private Railcar Food 
and Beverage Association, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 16.
    \16\ Testimony of Dennis Newman, Executive Vice President, 
Strategy, Planning and Accessibility, Amtrak, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 8.

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    II. Data Collection

    The American Chemistry Council recommends that the 
reauthorization bill require the STB to commission the 
Transportation Research Board to develop an economic model to 
determine whether rates are reasonable.\17\ The National 
Industrial Transportation League recommends the reauthorization 
bill ensure data transparency for all stakeholders so the Board 
can make evidence-based decision-making.\18\ USA Rice, the 
Private Railcar Food and Beverage Association and the American 
Fuel & Petrochemical Manufacturers, among others, recommend 
that the STB require railroad reporting on first-mile/last-mile 
data so shippers have greater visibility into when shipments 
are going to be picked up or delivered, akin to the information 
that most business-consumer shipping brands offer 
customers.\19\
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    \17\ Testimony of Chris Jahn, President and CEO of the American 
Chemistry Council, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Pages 7 and 8.
    \18\ Agricultural Transportation Working Group letter to the 
Surface Transportation Board, April 21, 2022. https://www.stb.gov/
proceedings-actions/filings/ Filing ID 304349. Testimony of Brad 
Hildebrand, Member, National Transportation Industrial League, March 8, 
2022. https://transportation.house.gov/imo/media/doc/
Hildebrand%20Testimony%20-%20NITL.pdf. Page 12.
    \19\ Testimony of Herman Haksteen, President, Private Railcar Food 
and Beverage Association, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 10. And, American 
Fuel and Petrochemical Manufacturers Letter to Committee, March 8, 
2022.

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    III. Expedited STB Proceedings

    According to the Board, it has ten pending regulatory 
proceedings.\20\ One has been pending for eight years and three 
have been pending for six years. In addition, the National 
Academy of Sciences determined that the STB's rate review 
standards are outdated, burdensome, and proven to be unworkable 
for most shippers.\21\ While shippers and railroads disagree on 
how to resolve this issue, both agree on the benefit of 
expedited resolution of rate cases before the STB. The American 
Chemistry Council and the American Fuel & Petrochemical 
Manufacturers suggest that the STB adopt Final Offer Rate 
Review which requires both parties to put forward their best 
and final proposals and the STB would select one.\22\ This 
process is intended to incentivize each party to offer a 
reasonable proposal.\23\ The National Industrial Transportation 
League suggested STB reauthorization include timelines or 
deadlines for completing a formal proceeding.\24\ The 
Association of American Railroads (AAR) expressed concerns 
about Final Offer Rate Review and uncertainties with using a 
``more reasonable'' standard for determining rates, and 
requested that STB reauthorization identify solutions that 
provide a simplified, expedited dispute resolution procedure 
for rate cases less than $4 million.\25\ AAR further expressed 
support for the STB establishing a voluntary arbitration 
program for small rate cases, and asserted that ``[i]f 
structured properly, this new procedure could offer cost 
savings and flexibility to stakeholders.'' \26\
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    \20\ https://www.stb.gov/wp-content/uploads/1Q-Report-on-Pending-
STB-Regulatory-Proceedings-4.1.22.pdf and https://www.stb.gov/news-
communications/latest-news/pr-22-23/
    \21\ National Academy of Sciences, Transportation Research Board, 
``Modernizing Freight Rail Regulation'', https://onlinepubs.trb.org/
onlinepubs/sr/sr318highlights.pdf.
    \22\ Testimony of Chris Jahn, CEO, American Chemistry Council, 
March 8, 2022. https://transportation.house.gov/committee-activity/
hearings/stakeholder-views-on-surface-transportation-board-
reauthorization. Page 6. And, American Fuel and Petrochemicals March 8, 
2022 letter to the Committee.
    \23\ https://www.federalregister.gov/documents/2021/11/26/2021-
25168/final-offer-rate-review-expanding-access-to-rate-relief
    \24\ Testimony of Brad Hildebrand, Member, National Transportation 
Industrial League, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Page 11.
    \25\ Testimony of Ian Jefferies, CEO, Association of American 
Railroads, March 8, 2022. https://transportation.house.gov/committee-
activity/hearings/stakeholder-views-on-surface-transportation-board-
reauthorization. Page 6.
    \26\ Id. Page 14.
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B. FREIGHT RAIL OVERSIGHT RECOMMENDATIONS

    A common refrain from rail shippers today is summed up in 
the American Fuel & Petrochemical Manufacturers testimony to 
the STB:

        AFPM believes in free market solutions, but the free market 
        does not work when there is no competition, or even a realistic 
        threat of competition. Consolidation in the railroad industry 
        has created a system of regional duopolies and the railroads 
        understandable desire to maximize profits has come into 
        conflict with railroads' common carrier obligations. The 
        Staggers Act was not intended to make the railroads attractive 
        investment targets on Wall Street; rather it was designed to 
        `meet the demands of interstate commerce and the national 
        defense.' PSR has interfered with those goals.\27\ A healthy, 
        efficient rail system benefits all parties, and stakeholder 
        concerns are meant to improve the rail network for 
        everyone.\28\
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    \27\ American Fuel & Petrochemical Manufacturers. https://
www.stb.gov/proceedings-actions/filings/ Filing ID 304461
    \28\ Id.

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    I. Common Carrier Obligation

    Rail carriers have a statutory duty to provide 
``transportation or service on reasonable request.'' \29\ A 
rail carrier may not refuse to provide service merely because 
to do so would be inconvenient or unprofitable.\30\ Railroads, 
shippers, and rail labor can disagree on how this requirement 
is implemented in practice. Rail labor, numerous shippers 
represented by the Agricultural Transportation Working 
Group,\31\ the National Grain and Feed Association, the 
National Industrial Transportation League, the Private Railcar 
Food & Beverage Association, and the Freight Rail Customer 
Alliance recommend reauthorization include a review of this 
common carrier obligation definition.\32\ This would ensure 
that the definition applies not only to service refusals but 
also material service reductions and deficiencies, combined 
with consequences when the obligation is not met.\33\ The U.S. 
Department of Agriculture (USDA) echoes these comments.\34\
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    \29\ 49 USC 11101(a)
    \30\ Surface Transportation Board, https://www.federalregister.gov/
documents/2008/02/27/E8-3712/common-carrier-obligation-of-railroads.
    \31\ Agricultural Transportation Working Group. Letter to the 
Surface Transportation Board, April 21, 2022. The following 
organizations are part of the Agricultural Transportation Working 
Group: Agricultural Retailers Association, American Farm Bureau 
Federation, American Feed Industry Association, American Sheep Industry 
Association, American Soybean Association, American Sugar Alliance, 
Consumer Brands Association, Corn Refiners Association, Equipment 
Dealers Association, Forest Resources Association, Fresh Produce 
Association of the Americas, Growth Energy, Hardwood Federation, 
Institute of Shortening and Edible Oils, Leather and Hide Council of 
America, National Aquaculture Association, National Association of 
Wheat Growers, National Corn Growers Association, National Cotton 
Council, National Council of Farmer Cooperatives, National Farmers 
Union, National Grain and Feed Association, National Grange, National 
Milk Producers Federation, National Oilseed Processors Association, 
National Pork Producers Council, North American Meat Institute, North 
American Millers' Association, Pet Food Institute, Specialty Soya and 
Grains Alliance, The Fertilizer Institute, USA Rice, U.S. Wheat 
Associates.
    \32\ https://transportation.house.gov/committee-activity/hearings/
stakeholder-views-on-surface-transportation-board-reauthorization, 
Statement for the Record of the Brotherhood of Maintenance of Way 
Employees Division/IBT; Brotherhood of Railroad Signalmen; 
International Association of Sheet Metal, Air, Rail and Transportation 
Workers Mechanical Division; and National Conference of Firemen and 
Oilers, 32BJ/SEIU on March 8, 2022 and https://www.ngfa.org/newsletter/
ngfa-food-and-ag-groups-outline-transportation-priorities-to-incoming-
biden-administration/ See section on Freight Rail.
    \33\ Testimony of Brad Hildebrand, Member, National Industrial 
Transportation League, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Page 7. In Mr. Hildebrand's 
amended testimony, he described the experience of a recent National 
Industrial Transportation League member who has multiple locations 
served by multiple Class Is. While in each location the cost of rail 
service was increasing by approximately 5 percent in 2022, in one 
location that did not have another option for transporting their goods, 
rates went up by 25 percent in a single year. There is potential that 
the Mississippi-based plant will close due to the increase in 
transportation costs.
    \34\ U.S. Department of Agriculture Written Testimony. https://
www.stb.gov/proceedings-actions/filings/ Filing ID 304441.

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    II. Remedies for Rail Service Failures

    A significant number of shippers--30-40 percent according 
to Morgan Stanley--have abandoned rail service altogether in 
the last year and instead moved to truck.\35\ Truckload and air 
freight tonnage are increasing while rail freight tonnage is 
decreasing.\36\ Not all shippers have the resources to change 
shipping services.\37\ National Grain and Feed Association 
members are currently experiencing losses in the tens of 
millions of dollars and lost or reduced operating days totaling 
weeks from rail service delays.\38\ At rail origins, its 
members are unable to purchase grain from farmers because they 
are full while awaiting loaded trains to be moved out by the 
railroad.\39\ At rail destinations, its members are unable to 
deliver feed to livestock producers.\40\ The Farm Bureau 
reports a 47 percent increase in the number of grain rail cars 
that aren't delivered on time, including a 107 percent increase 
in rail cars that are 11 or more days overdue.\41\ USA Rice 
states that rail service is:
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    \35\ Testimony of Herman Haksteen, President, Private Railcar Food 
and Beverage Association, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 5.
    \36\ Id. Pages 5-6.
    \37\ Testimony of Brad Hildebrand, Member, National Industrial 
Transportation League, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Page 4.
    \38\ https://www.stb.gov/wp-content/uploads/NGFA-Letter-to-STB-
Chairman-Oberman-on-Rail-Service-and-Precision-Scheduled-Railroading-
March-24-2022.pdf and https://imis.ngfa.org/ngfa/News/Pressers/2022/
NGFA_testifies_on_rail_service_issues_at_the_STB_.aspx.
    \39\ Id.
    \40\ Id.
    \41\ Farm Bureau. https://www.fb.org/market-intel/farmers-and-
ranchers-feel-crunch-of-railway-supply-chain-shortfalls

        unreliable and inconsistent. This includes the carriers 
        offering car deliveries, only for those deliveries to be 
        cancelled hours later. The carriers are also notorious for 
        being late or early in spotting cars--often with little to no 
        advance notice. Weekly car orders are not being filled anywhere 
        close to the full orders, and replacement car arrivals are 
        unpredictable.\42\
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    \42\ USA Rice. https://www.stb.gov/proceedings-actions/filings/ 
Filing ID 304362.

    Archer Daniels Midland submitted a letter to the STB 
stating that recent Class I failures to meet acceptable service 
requirements ``result in reduced production rates at ADM 
processing plants, shut down of ADM customers' production 
facilities, and a highly underutilized private railcar fleet.'' 
\43\ National Industrial Transportation League Members 
experienced a record number of plant shutdown cases in 2021 due 
to sporadic rail service.\44\ Private Railcar Food and Beverage 
Association members are experiencing erratic railcar pick-up 
and delivery times.\45\ In a survey of its members from July 
2021-December 2021, nearly every member of the Freight Rail 
Customer Alliance (92 percent) experienced rail service issues, 
more than half (60 percent) reported service worse than 2019 or 
2020, and more than half (64 percent) had to modify 
operations.\46\ Each incurred additional costs as a result of 
between $100,000-$20 million.\47\ The National Mining 
Association testified before the STB that `` . . . the trains 
often do not show up at all.'' \48\
---------------------------------------------------------------------------
    \43\ Archer Daniels Midland. https://www.stb.gov/proceedings-
actions/filings/ Filing ID 304408.
    \44\ Attachment to Testimony of Brad Hildebrand, Member, National 
Industrial Transportation League, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Pages 2-5.
    \45\ Testimony of Herman Haksteen, President, Private Railcar Food 
and Beverage Association, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Pages 8-9.
    \46\ Submitted Statement for the Record of Ms. Emily Regis, Vice 
President, Freight Rail Customer Alliance, March 8, 2022.
    \47\ Id.
    \48\ National Mining Association. https://www.stb.gov/proceedings-
actions/filings/ Filing ID 304395.
---------------------------------------------------------------------------
    The National Grain and Feed Association and the American 
Chemistry Council recommend the STB have meaningful remedies 
for customers facing railroad service failures, including the 
authority to require a service recovery or assurance plan if a 
railroad fails to provide adequate service.\49\ The National 
Industrial Transportation League suggests expanding the STB's 
ability to assess fines or penalties to recover appropriate 
damages for shippers and increase the current penalty from an 
$8,700/violation to assess a higher amount per incident or 
assess this amount per day by carload.\50\ The Private Railcar 
Food and Beverage Association echoes the National Industrial 
Transportation League recommendation and further recommends the 
ability to charge reverse demurrage, in that the railroads will 
pay the private railcar owners a daily fee when those private 
rail assets are held up due to railroad operating issues or 
allow charge backs to the railroads for daily car hire fees to 
offset the cost of additional transit days experienced by car 
owners.\51\ In a letter to the committee, the Fertilizer 
Institute also encourages the ability for reverse demurrage to 
address the seeming lack of railroad incentive to move non-
railroad owned assets.\52\ The Agricultural Transportation 
Working Group echoed these comments.\53\ Archer Daniels Midland 
states that reciprocity is key to the prevention of future 
service failures.\54\ During the STB hearing, a Wall Street 
railroad analyst from Loop Capital Markets expressed support 
for the STB to assess fines or allow for reverse demurrage for 
rail customers after receiving poor service as a way to 
incentivize better service.\55\ Both the DOT and USDA also 
expressed support for the STB to incentivize better rail 
service.\56\
---------------------------------------------------------------------------
    \49\ https://www.stb.gov/wp-content/uploads/NGFA-Letter-to-STB-
Chairman-Oberman-on-Rail-Service-and-Precision-Scheduled-Railroading-
March-24-2022.pdf. Testimony of Chris Jahn, President and CEO of the 
American Chemistry Council, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 8. Testimony of 
Dennis R. Pierce, National President, Brotherhood of Locomotive 
Engineers and Trainmen, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 7.
    \50\ Id. Page 8.
    \51\ Id. Page 12. Railroads have statutory authority to charge 
shippers fees called ``demurrage charges'' when the shipper detains 
rail cars beyond the time permitted for loading or unloading rail cars 
at 49 USC 10746. Despite owning or leasing a majority of railcars, rail 
shippers do not currently have this statutory authority. Class I 
railroads charged $1.7 billion in demurrage fees in 2021. See March 2, 
2022 Summary of Subject Matter prepared for the Subcommittee's 
``Stakeholder Views on Surface Transportation Board Reauthorization'' 
March 8, 2022 hearing.
    \52\ Letter to the Transportation and Infrastructure Committee from 
Corey Rosenbusch, President and CEO, The Fertilizer Institute, March 8, 
2022. Letter refers to how rail shippers own or lease 73 percent of 
railcars.
    \53\ Agricultural Working Group letter to the Surface 
Transportation Board, April 21, 2022. https://www.stb.gov/proceedings-
actions/filings/ Filing ID 303439.
    \54\ Archer Daniels Midland. https://www.stb.gov/proceedings-
actions/filings/ Filing 304408.
    \55\ https://www.youtube.com/channel/UCgd2FPpKSpQZ57p771aafNg/live. 
April 26, 2022.
    \56\ Id.

---------------------------------------------------------------------------
    III. Long Train Operating Plans

    Due to Precision Scheduled Railroading (PSR), train lengths 
have been getting longer.\57\ Class I railroads are operating 
trains as long as three miles in length which means single 
track mainlines face greater congestion as fewer trains fit in 
the sidings.\58\ Shippers who own their own railcars are seeing 
increasing maintenance costs from the longer trains--one 
shipper saw a 52 percent increase in car maintenance costs and 
a 330 percent increase in cars that were completely destroyed 
over the last five years commensurate with the implementation 
of PSR.\59\ Rail union members described the length of time it 
takes to build a long train, that long trains must operate more 
slowly, and that crew members are reaching the end of their 
statutorily limited hours of service without reaching final 
destinations thereby contributing to delays.\60\ Amtrak 
recommends that the STB reauthorization bill include a 
requirement that Class I railroads develop Long Train Operating 
Plans and submit them to the STB for review and approval 
following public comment.\61\
---------------------------------------------------------------------------
    \57\ Bill Stephens, Trains Magazine, November 15, 2021. https://
www.trains.com/trn/news-reviews/news-wire/railroads-use-of-long-trains-
to-go-under-the-microscope/
    \58\ Testimony of Dennis Newman, Executive Vice President, 
Strategy, Planning and Accessibility, Amtrak, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 9.
    \59\ Testimony of Herman Haksteen, President, Private Railcar Food 
and Beverage Association, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 8.
    \60\ STB Hearing on Urgent Issues in Freight Rail Service, April 
26, 2022. Jeremy Furguson and Matthew Brukart, SMART-Transportation. 
https://www.youtube.com/channel/UCgd2FPpKSpQZ57p771aafNg/live
    \61\ Id.

---------------------------------------------------------------------------
    IV. Commodity Exemptions

    Certain commodities are exempt from the ability to seek 
redress and relief from the STB, though the STB has the ability 
to waive these exemptions.\62\ Portland Cement Association sent 
a letter to the Committee requesting the commodity exemptions 
be reviewed as their commodity was exempted more than 25 years 
ago.\63\ Within the last year, cement manufacturers have lost 
significant volume--one shipper lost between 60,000-100,000 
tons of annual volume due to poor rail service.\64\ This amount 
is enough cement to build 3,000 homes.\65\ The American Forest 
& Paper Association states that they face similar 
``unreasonable demurrage practices, poor service, car supply 
issues and rising rates as the commodities which are under the 
STB's purview'' and would like access to the STB's regulatory 
remedies.\66\ The National Industrial Transportation League 
suggests these exemptions be either entirely revoked by a date 
certain unless the railroads can show that the exemption is 
still warranted or periodically review the exemptions every 
five years.\67\
---------------------------------------------------------------------------
    \62\ 49 CFR 1039.11.
    \63\ Letter from Sean O'Neill, Senior Vice President of Government 
Affairs, Portland Cement Association. March 4, 2022.
    \64\ Id.
    \65\ Id.
    \66\ https://www.stb.gov/proceedings-actions/filings/. Filing ID 
304465 in EP_770.
    \67\ Testimony of Brad Hildebrand, National Industrial 
Transportation League, March 8, 2022. https://transportation.house.gov/
committee-activity/hearings/stakeholder-views-on-surface-
transportation-board-reauthorization. Page 9.

---------------------------------------------------------------------------
    V. Cost-Benefit Analysis

    As an independent agency, STB is not required by Executive 
Order 12866 to conduct cost-benefit analyses of regulatory 
requirements that executive agencies like the DOT are required 
to do.\68\ AAR requested that STB reauthorization include the 
requirement for STB regulations to undergo a cost-benefit 
analysis.\69\
---------------------------------------------------------------------------
    \68\ Testimony of Ian Jefferies, CEO, Association of American 
Railroads, March 8, 2022. https://transportation.house.gov/committee-
activity/hearings/stakeholder-views-on-surface-transportation-board-
reauthorization. Pages 14 and 15. And, https://www.everycrsreport.com/
reports/R42821.html.
    \69\ Id.
---------------------------------------------------------------------------

C. INTERCITY PASSENGER RAIL RESPONSIBILITIES

    With the passage of the IIJA, and its accompanying advanced 
appropriations, there will be billions of federal dollars 
invested in the freight railroad network to improve intercity 
passenger rail.\70\ And yet, Amtrak accounts for approximately 
four percent of train-miles on Class I railroads.\71\ That 
percentage will not significantly increase even if all the 
expansion contemplated in the Amtrak Connects US Plan over the 
next 15 years occurs.\72\
---------------------------------------------------------------------------
    \70\ https://railroads.dot.gov/BIL
    \71\ Testimony of Dennis Newman, Executive Vice President, 
Strategy, Planning and Accessibility, Amtrak, March 8, 2022. https://
transportation.house.gov/committee-activity/hearings/stakeholder-views-
on-surface-transportation-board-reauthorization. Page 15.
    \72\ Id.
---------------------------------------------------------------------------
    Amtrak requested the STB reauthorization bill include a 
number of provisions to assist with intercity passenger rail 
development including: allow Amtrak to seek enforcement of its 
preference rights in federal court, direct the STB to conduct 
on-time performance investigations rather than await 
complaints, allow the STB to issue injunctive orders to enforce 
on-time performance including allowing for joint dispatching by 
the host railroad and Amtrak or an independent third party, 
require all intercity passenger rail providers to be under the 
jurisdiction of the STB, require railroad mergers to consider 
passenger rail impacts, and add passenger rail to the Rail 
Transportation Policy at 49 U.S.C. 10101.\73\
---------------------------------------------------------------------------
    \73\ Id.
---------------------------------------------------------------------------

                           WITNESS LIST \74\
---------------------------------------------------------------------------

    \74\ The STB will submit only one written statement with potential 
addendums by individual members. Only the Board Chairman will present 
oral testimony. The additional four members will be available for 
questioning.
---------------------------------------------------------------------------
     LMartin Oberman, Chairman, Surface Transportation 
Board
     LPatrick Fuchs, Member, Surface Transportation 
Board
     LRobert Primus, Member, Surface Transportation 
Board
     LMichelle Schultz, Vice-Chair, Surface 
Transportation Board
     LKaren Hedlund, Member, Surface Transportation 
Board

 
   BOARD MEMBER VIEWS ON SURFACE TRANSPORTATION BOARD REAUTHORIZATION

                              ----------                              


                         THURSDAY, MAY 12, 2022

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 10:01 a.m. in 
room 2167 Rayburn House Office Building and via Zoom, Hon. 
Donald M. Payne, Jr. (Chair of the subcommittee) presiding.
    Members present: Mr. Payne, Mr. DeFazio, Mr. Cohen, Mr. 
Carson, Ms. Wilson of Florida, Mr. Garcia of Illinois, Mrs. 
Napolitano, Mr. Johnson of Georgia, Ms. Titus, Mr. Huffman, Mr. 
Lynch, Mr. Auchincloss, Mr. Crawford, Mr. Rodney Davis of 
Illinois, Mr. Bost, Mr. LaMalfa, Mr. Fitzpatrick, Mr. 
Balderson, Mr. Burchett, Mr. Johnson of South Dakota, Mr. 
Nehls, and Mrs. Steel.
    Mr. Payne. The subcommittee will come to order.
    I ask unanimous consent that the chair be authorized to 
declare a recess at any time during today's hearing.
    Without objection, so ordered.
    I also ask unanimous consent that Members not on the 
subcommittee be permitted to sit with the subcommittee at 
today's hearing and ask questions.
    Without objection, so ordered.
    As a reminder, please keep your microphone muted unless 
speaking. Should I hear any inadvertent background noise, I 
will request that the Member please mute their microphone.
    To insert a document into the record, please have your 
staff email it to [email protected].
    So, good morning. To continue this subcommittee's work 
towards reauthorization of the Surface Transportation Board, 
today we have an opportunity to hear from members of the Board 
to determine what additional authorities are needed to improve 
rail service across the country.
    The STB is a unique independent agency that is the primary 
economic regulator of freight railroads, responsible for 
ensuring that the railroads honor their common carrier 
obligations.
    Shippers play a critical role in the national supply chain 
by making the food we eat, ensuring the water that we drink is 
safe, providing electricity, and providing building materials.
    We held a hearing with stakeholders 2 months ago who 
sounded the alarm on rail service issues and to get their ideas 
for reauthorization. Recently the STB held 2 days of emergency 
public testimony on the meltdown of our Nation's freight rail 
operations. The STB heard from many shippers, labor leaders, 
and even Transportation Secretary Pete Buttigieg and the 
Agriculture Deputy Secretary Bronaugh on the significant delays 
in transporting cargo by freight rail.
    Chemical shippers are enduring 78 percent longer transit 
times, and service days have been cut nearly in half. 
Agriculture producers such as soybean and rice have seen a 
particularly sharp decline in the quality of freight rail 
service. The National Grain and Feed Association recently wrote 
to this subcommittee explaining that, and I quote, ``The 
current inability of several Class I carriers to provide 
reliable rail service to their customers is impacting farmgate 
commodity prices and elevating food prices for customers.''
    Increasing prices for our food, gas prices at the pump, 
turning on our lights, and having safe drinking water is 
crucial. These are all impacted by increasing delays in freight 
rail service. Quite frankly, this is unacceptable. The timely 
and efficient movement of goods remains of paramount importance 
to a strong economy.
    I understand that Class I freight railroads' explanation of 
the decline in service is due to several factors, including 
workforce shortages. What is maddening is that the very 
workforce shortage contributing to the decline in service is a 
result of the Class I's implementing Precision Scheduled 
Railroading, or PSR. By the end of last year, the Class I 
railroad workforce was cut by nearly one-third compared to 
2015. Those cuts began years before the pandemic hit. And 
despite knowing it takes a number of months to return qualified 
workers to the rails, the railroad doubled down by cutting 
again in 2020.
    I have been concerned to hear from workers and their unions 
about employees being overworked and rushed on the job. Now, 
the worsening working conditions, years of job insecurity, and 
the months required to properly train workers before they can 
return to service, have come home to roost in the form of 
severe hiring challenges the railroads currently face.
    All of this is why the STB held the emergency hearing.
    Last week, the STB unanimously acted to require the largest 
railroads--UP, BNSF, CSX, and NS--to develop service recovery 
plans to improve service and metrics to measure progress, 
including goals and measures for rail service performance, and 
employment training and hiring levels.
    Stakeholders have also proposed new authorities, such as 
expanding the STB's ability to assess fines or allow for 
reverse delay charges that shippers can charge carriers.
    I look forward to hearing Board member views on stakeholder 
proposals and their own proposals.
    [Mr. Payne's prepared statement follows:]

                                 
 Prepared Statement of Hon. Donald M. Payne, Jr., a Representative in 
   Congress from the State of New Jersey, and Chair, Subcommittee on 
             Railroads, Pipelines, and Hazardous Materials
    Good morning.
    To continue this subcommittee's work toward reauthorization of the 
Surface Transportation Board, today we have an opportunity to hear from 
members of the Board to determine what additional authorities are 
needed to improve rail service across the country.
    The STB is a unique independent agency that is the primary economic 
regulator of freight railroads, responsible for ensuring that the 
railroads honor their common carrier obligations.
    Shippers play a critical role in the national supply chain by 
making the food we eat, ensuring the water we drink is safe, providing 
electricity, and providing building materials.
    We held a hearing with stakeholders two months ago who sounded the 
alarm on rail service issues and to get their ideas for 
reauthorization.
    Recently, the STB held two days of emergency public testimony on 
the meltdown of our nation's freight rail operations.
    The STB heard from many shippers, labor leaders, and even 
Transportation Secretary Buttigieg and Agriculture Deputy Secretary 
Bronaugh on the significant delays in transporting cargo by freight 
rail.
    Chemical shippers are enduring 78 percent longer transit times and 
service days have been cut nearly in half.
    Agriculture producers such as soybeans and rice have seen a 
particularly sharp decline in the quality of freight rail service.
    The National Grain and Feed Association recently wrote to this 
subcommittee explaining that, and I quote, ``the current inability of 
several Class One carriers to provide reliable rail service to their 
customers is impacting farmgate commodity prices and elevating food 
prices for customers.''
    Increasing prices for our food, gas prices at the pump, turning on 
our lights, having safe drinking water--these are all impacted by 
increasing delays in freight rail service.
    Quite frankly, this is unacceptable.
    The timely and efficient movement of goods remains of paramount 
importance to a strong economy.
    I understand that the Class I freight railroads' explanation of the 
decline in service is due to several factors, including workforce 
shortage.
    What is maddening, is that the very workforce shortage contributing 
to the decline in service is a result of the Class Is implementing 
precision scheduled railroading, or PSR.
    By the end of last year, the Class I railroad workforce was cut by 
nearly a third compared to 2015.
    Those cuts began years before the pandemic hit, and--despite 
knowing it takes a number of months to return qualified workers to the 
rails--the railroads doubled down by cutting again in 2020.
    I have been concerned to hear from workers and their unions about 
employees being overworked and rushed on the job.
    Now, those worsening working conditions, years of job insecurity, 
and the months required to properly train workers before they can 
return to service, have come home to roost in the form of severe hiring 
challenges the railroads currently face.
    All of this is why the STB held the emergency hearing.
    Last week, the STB unanimously acted to require the largest 
railroads--UP, BNSF, CSX and NS--to develop service recovery plans to 
improve service and metrics to measure progress, including goals and 
measures for rail service performance and employment training and 
hiring levels.
    Stakeholders have also proposed new authorities such as expanding 
the STB's ability to assess fines or allow for reverse delay charges 
that shippers can charge carriers.
    I look forward to hearing Board member views on stakeholder 
proposals and their own proposals.

    Mr. Payne. I now recognize Mr. Crawford for an opening 
statement.
    Mr. Crawford. Thank you, Mr. Chairman, and I thank you for 
holding this hearing today.
    And for the witnesses, thank you for being here today, as 
well.
    Today's hearing will be the first time all five Surface 
Transportation Board members have appeared before the 
committee. We will hear about their work and thoughts on a 
potential STB reauthorization.
    The STB is an independent agency created in 1996. It has 
only been reauthorized one time--that was back in 2015--when 
changes were made to ensure that STB operated more effectively, 
including expanding the Board from three to five members.
    This year, the STB is busier than ever as it reviews 
several major proposed rulemakings, a major merger between two 
Class I freight railroads, and the potential expansion of 
Amtrak service.
    The STB recently held a 2-day hearing where it examined 
service issues involving freight railroad carriers and 
shippers. The STB heard testimony from several stakeholders on 
their concerns about the state of the industry and potential 
solutions.
    Some of these freight service issues have arisen in my 
district, prompting me to submit a letter to the STB expressing 
my concerns and hopes that the STB can work with shippers and 
freight carriers to resolve these problems.
    When broadly looking at a potential STB reauthorization, we 
must carefully and deliberatively examine the Board's needs; 
ensure that any proposals have a positive long-term impact on 
the STB's operations; and we must not interfere with, slow 
down, or distract from the STB's current duties and their 
abundant workload.
    I commend the chair for holding this hearing today and look 
forward to hearing from our witnesses.
    [Mr. Crawford's prepared statement follows:]

                                 
Prepared Statement of Hon. Eric A. ``Rick'' Crawford, a Representative 
      in Congress from the State of Arkansas, and Ranking Member, 
     Subcommittee on Railroads, Pipelines, and Hazardous Materials
    Thank you, Chair Payne, for holding this hearing, and thank you to 
our witnesses for participating.
    Today's hearing will be the first time all five Surface 
Transportation Board members have appeared before the Committee. We 
will hear about their work and thoughts on a potential STB 
reauthorization.
    The STB is an independent agency created in 1996. It has only been 
reauthorized once, in 2015, when changes were made to ensure the STB 
operated more effectively, including expanding the Board from three to 
five members.
    This year, the STB is busier than ever as it reviews several major 
proposed rulemakings, a major merger between two Class One freight 
railroads, and the potential expansion of Amtrak service.
    The STB recently held a two-day hearing where it examined service 
issues involving freight railroad carriers and shippers. The STB heard 
testimony from several stakeholders on their concerns about the state 
of the industry, and potential solutions.
    Some of these freight service issues have arisen in my district, 
prompting me to submit a letter to the STB expressing my concerns and 
hopes that the STB can work with shippers and freight carriers to 
resolve these problems.
    When broadly looking at a potential STB reauthorization, we must 
carefully and deliberatively examine the Board's needs, ensure that any 
proposals have a positive long-term impact on the STB's operations, and 
we must not interfere with, slow down, or distract from the STB's 
current duties and abundant workload.
    I commend the Chair for holding this hearing today and look forward 
to hearing from our witnesses.

    Mr. Crawford. And with that, I yield back the balance of my 
time.
    Mr. Payne. The gentleman yields back. We will now hear from 
the chairman of the full committee, Mr. DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman. Thanks for this 
critical hearing. Thanks to members of the Surface 
Transportation Board for being here. Thanks for your service.
    We are at a point of crisis, and we have to deal with that 
crisis meaningfully. The facts are undeniable. Freight service 
in the United States of America--we used to have the best 
freight rail in the world--is abysmal. Shippers are being 
impacted by poor rail service. They are shifting to trucking. 
Of course, that is more greenhouse gas pollution. Raw material 
delays have actually shut factories, and there are extra labor 
costs to load and unload once railcars arrive. This service is 
forcing shippers to recoup their losses--or the manufacturers--
downstream, and that is the consumers. So, this is contributing 
to the inflationary spike in this country.
    The evil ghost of Hunter Harrison lives on. The legacy of 
this man is disgusting, what he did. He has addicted the CEOs 
of the rail industry to watching the ticker on Wall Street and 
using their resources to benefit their shareholders and not run 
railroads like railroads.
    This isn't the only industry that has been infected. Boeing 
killed people because of the same pressure and the same 
infection. And it has got to stop. And you are the people who 
can stop it with the freight rail industry.
    The freight railroad CEOs say poor service. It has nothing 
to do with us. Oh, no, no. It is COVID, supply chain. Oh, their 
workforce--oh, by the way, you laid off one hell of a lot of 
your workforce, and a lot of them aren't coming back to you 
because they have been disrespected, mistreated. And you have 
made it more dangerous for your workers with these cuts.
    You are not looking to change. I am talking to the CEOs 
now. You are not looking to change. You are just bringing in--
raking in record profits. Whoa, more dividends for 
shareholders. And oh, hey, by the way, my salary also goes up, 
and my stock goes up. Isn't that great? While the country 
suffers.
    I have been talking about this for a long time, and people 
say, oh, that is just DeFazio carrying on. Well, now it is 
DeFazio joined with some very unlikely allies. That would be 
the chemical industry, the energy industry, the agriculture 
industry, and a whole host of other shippers who are bemoaning 
what has been done, the destruction that has been wrought on 
freight rail in America with so-called Precision Scheduled 
Railroading.
    I don't have much in common with the oil industry. We don't 
agree on much of anything. But here is a quote from the 
American Fuel and Petrochemical Manufacturers testimony. And I 
hope the Republicans are listening, because you just listen to 
the damn freight railroads. Listen to your constituents, and 
look at what it is doing to them. ``Consolidation in the 
railroad industry has created a system of regional duopolies 
and the railroads understandable desire to maximize profits has 
come into conflict with railroads' common carrier obligation. 
The Staggers Act was not intended to make the railroads 
attractive investment targets on Wall Street; rather it was 
designed to `meet the demands of interstate commerce and 
national defense.' PSR''--Precision Scheduled Railroading--
``has interfered with those goals.''
    It is a business model, cuts expenses to the bone, slows 
customer service, volume growth, and the freight railroads only 
want to take now the most profitable freight. They are not 
going to spend anything on growing or maintaining their 
businesses, because that might hurt their stock price, if they 
actually looked to the future and made investments. ``Surplus'' 
assets are mothballed, workers furloughed. But they are getting 
short-term profits. That is great.
    You don't have to take my word for it. Again, former 
Burlington Northern Santa Fe CEO Matt Rose, he left a great 
legacy which is now being dismantled over there, too, which is 
sad that BNSF is following Hunter Harrison. This is Matt Rose, 
this is his exit op ed, essentially, from the industry. ``The 
Street--I am talking about sell-side analysts--has been 
extremely aggressive with the publicly traded railroads. 
They're saying that less is better. Less capital is better. 
Fewer market opportunities are better. Fewer unit trains are 
better. It's all about lowering the operating ratio. I disagree 
with almost all of that. I truly believe that every industry, 
every business, needs growth . . . I just don't think you can 
shrink yourself into a virtuous-cycle model that works.'' That 
is Matt Rose, former CEO of BNSF.
    Now, I am pleased that you are taking the matter seriously. 
I am pleased you held a hearing. But we have got to act more 
decisively and more quickly. And you need to do that because 
you have to protect the railroad network in this country. It is 
a vital asset. It is going to be critical, not only for supply 
chain issues, but for the future in terms of dealing with 
climate change, moving freight much more effectively and with 
much less pollution than trucks.
    And your testimony asks for virtually nothing from this 
committee, suggesting you have all the powers you need. Well, 
if that is true, and I am not sure it is, then use them. Use 
them.
    Some will argue, oh, it is a free-market problem, it will 
be resolved by the markets. But that doesn't work with 
duopolies or monopolies. It does not work. In fact, that is the 
reason you exist. That is the whole reason that you exist.
    Current law lays out your responsibilities. I am not going 
to go through all of them, but you know what they are. But they 
include maintaining reasonable rates, fair wages, prohibit 
predatory pricing, meet the needs of public and national 
defense, ensure the development and continuation of a sound 
rail transportation system. That isn't happening in America 
today. It is not happening. We are going downhill here really 
quickly.
    So, you are not there to protect the bottom line of these 
railroads and the CEO's bonuses. You are not there even for the 
shippers' bottom line. But you are there to make this system 
work better, keep the costs lower, and be competitive. There is 
very little competition. We need to re-instill competition 
here.
    So, let me be crystal clear. If you don't move decisively, 
and don't rise to this occasion, which is a looming crisis, 
this committee will legislate. I just talked to the White House 
economic adviser about this last night, they are well aware of 
it, they are extraordinarily concerned, they are looking at 
what steps they can take by Executive order to deal with this 
mess that is being created by the leeches on Wall Street in the 
obeisance of these CEOs running these companies into the 
ground.
    I want freight railroads to be successful. I do. But that 
success should be defined by the amount of freight they move 
across the Nation, the amount of greenhouse gas they prevent, 
and the safety of their employees and communities they 
traverse.
    So, I urge you to incentivize the railroads to act like 
railroads, not Wall Street cash cows, not pawns of those 
leeches on Wall Street. Stock buybacks and dividends can't be 
the measures for success of freight rail in this country. They 
are the only mode with a continued decline in volume in a time 
of shipping crisis in this Nation, and high inflation. You have 
got to do something about it.
    [Mr. DeFazio's prepared statement follows:]

                                 
   Prepared Statement of Hon. Peter A. DeFazio, a Representative in 
      Congress from the State of Oregon, and Chair, Committee on 
                   Transportation and Infrastructure
    The facts before this committee today are undeniable. Freight 
railroad service is abysmal. Shippers are being severely impacted by 
poor rail service, which forces them to shift to trucking, raw material 
delays that cause factory closures, and extra labor costs to load and 
unload once the rail cars finally arrive. This appalling service is 
forcing shippers to recoup their extra costs downstream and Americans 
are paying for it--with increased food costs and at the gas pump.
    Sadly, the freight railroad CEOs blame poor service on everyone but 
themselves. They blame COVID, supply chain disruptions, their 
workforce, and their customers. The CEOs are not looking for change. 
They are bringing in record profits for their shareholders, and they 
are not going to do anything to mess with this ``winning formula.''
    I have been beating the drums about the dangers of precision 
scheduled railroading (PSR) for years, leading some to dismiss me as a 
grumpy old man. Today, this grumpy old man has been joined by the 
agriculture industry, energy industry, chemical industry, and other 
shippers who bemoan PSR and its impacts on their businesses. In fact, 
these shippers have even joined forces with the labor movement to 
demand a free and fair freight railroad market with the capacity to 
grow and meet demand.
    I don't have a lot in common with the big oil executives, but this 
quote from the American Fuel & Petrochemical Manufacturers testimony to 
the STB is spot on:
    ``Consolidation in the railroad industry has created a system of 
regional duopolies and the railroads understandable desire to maximize 
profits has come into conflict with railroads' common carrier 
obligations. The Staggers Act was not intended to make the railroads 
attractive investment targets on Wall Street; rather it was designed to 
`meet the demands of interstate commerce and the national defense.' PSR 
has interfered with those goals.''
    PSR is a business model that cuts expenses to the bone even when 
that slows customer and volume growth. Freight railroads accept only 
the most profitable freight. They are not going to spend a dime on 
growing their companies unless the new customer is truly captured and 
highly profitable to the railroad. Any ``surplus'' asset is mothballed 
and worker furloughed, making it difficult for railroads to accommodate 
more business. PSR delivers short-term profits, while harming the long-
term success of the freight railroad industry.
    You don't have to take my word for it. Former BNSF CEO Matt Rose 
said it when he retired back in 2019:
    ``The Street--I'm talking about sell-side analysts--has been 
extremely aggressive with the publicly traded railroads. They're saying 
that less is better. Less capital is better. Fewer market opportunities 
are better. Fewer unit trains are better. It's all about lowering the 
operating ratio. I disagree with almost all of that. I truly believe 
that every industry, every business, needs growth . . . I just don't 
think you can shrink yourself into a virtuous-cycle model that works.''
    I am pleased the Surface Transportation Board is taking this matter 
seriously but let me say for the record the Board is moving too slow. 
American businesses and consumers are needlessly suffering at the hands 
of duopolies, while these duopolies extract record profits. We have 
five witnesses before us today who are the regulators and this is 
occurring on their watch. The STB needs to act quickly and decisively 
to protect the railroad network, a vital asset to the U.S. economy.
    Your testimony asks for very little from this committee, suggesting 
you have all the regulatory powers you need. If that is true, and I am 
not sure it is, how did the current freight failures get this bad under 
your watch?
    Some will argue this is a free-market problem to be resolved by the 
markets. But that doesn't work with duopolies. It is, in fact, the very 
reason the STB exists.
    Current law lays out your responsibilities in Chapter 101 of Title 
49. These responsibilities include:
      ``to ensure the development and continuation of a sound 
rail transportation system with effective competition among rail 
carriers and with other modes,''
      ``to meet the needs of the public and the national 
defense,''
      ``to maintain reasonable rates where there is an absence 
of effective competition and where rail rates provide revenues which 
exceed the amount necessary to maintain the rail system and to attract 
capital,''
      ``to encourage fair wages and safe and suitable working 
conditions in the railroad industry,'' and
      ``to prohibit predatory pricing and practices, to avoid 
undue concentrations of market power, and to prohibit unlawful 
discrimination.''

    Your mandate is not to protect the freight railroads' bottom lines 
or rail shippers' bottom lines, but to ensure the rail network is 
operating efficiently, keeping costs low for Americans, maintaining 
reasonable profits for the railroads, and giving American manufacturers 
a competitive advantage worldwide. We need the STB to do more to meet 
those mandates.
    Let me be crystal clear that if the STB doesn't move more quickly 
to rise to the occasion, this committee will legislate. I urge my 
Republican colleagues to join me and shippers from the agriculture, 
energy and chemical industries (just to name a few) to bring sanity 
back to the freight railroad business.
    My goal is simple. I want freight rail companies to be successful, 
but that success should be defined by the amount of freight they move 
across the nation, the amount of GHG emissions they prevent, the safety 
of their employees and the communities they traverse and serve, and the 
economic advantage that timely, efficient, and affordable freight rail 
provides the American economy.
    I urge the STB to incentivize the railroads to act like railroads, 
and not Wall Steet cash cows. Stock buy backs and dividends cannot be 
the sole measures of success for freight railroads. The ability for 
Wall Street to extract massive capital out of the railroads will 
undermine the U.S. freight rail network. They are the only mode with 
continued decline in freight rail volume, a sure sign that the industry 
is unhealthy.
    Congress cannot sit idle and ignore the current problems with the 
freight railroads. They are too important of an asset for our national 
economy. The rail system is broken, and it needs fixing. We need you to 
fix it, or we will.

    Mr. DeFazio. Thank you, Mr. Chairman.
    Mr. Payne. I would like to thank the chairman. I now would 
like to welcome our witnesses.
    First we have Martin Oberman, Chairman of the Surface 
Transportation Board; Michelle Schultz, Vice Chair, Surface 
Transportation Board; and Surface Transportation Board members 
Patrick Fuchs, Robert Primus, and Karen Hedlund.
    Thank you for joining us today, and I look forward to your 
testimony.
    Chairman Oberman will testify on behalf of the entire 
Surface Transportation Board, but all five members are 
available for questions.
    Without objection, our witness' full statement will be 
included in the record.
    Since your written testimony has been made a part of the 
record, the subcommittee requests that you limit your oral 
testimony to 5 minutes.
    Chairman Oberman, you may proceed.

       TESTIMONY OF MARTIN J. OBERMAN, CHAIRMAN, SURFACE 
                      TRANSPORTATION BOARD

    Mr. Oberman. Thank you and good morning, Chairman DeFazio, 
Chairman Payne, Ranking Member Crawford, and distinguished 
members of the committee and subcommittee.
    As Chairman of the STB, and on behalf of my fellow Board 
members, thank you for the opportunity to offer our views on 
agency reauthorization.
    I will say at the outset that our five-member Board has 
evolved into an extraordinarily collegial and effective group 
which strives hard to act by consensus and generally has 
succeeded in doing so.
    Rail network reliability is essential to the Nation's 
economy, and is my top priority. The industry is now facing a 
severe crisis in service, as described by one Wall Street 
analyst, a description which, in my view, is all too accurate.
    I was designated Chairman by President Biden in January 
2021. One of my first initiatives was to focus on the freight 
network, with particular attention on congestion in the 
intermodal supply chain.
    Shortly after becoming Chairman, I sent letters to the CEOs 
of all Class I's, asking them to report on their preparedness 
to meet growing demand for rail service as freight volumes 
rebounded. In response, they all provided assurances, and 
expressed confidence they could handle freight volume as the 
economy continued its recovery. They were wrong.
    Instead, the rail industry clearly is struggling to provide 
adequate and reliable rail service. Why? Over the last 6 years, 
the Class I railroads have cut their workforce by 29 percent, 
for a loss of 45,000 employees. With demand back, and against 
the backdrop of these significant cuts and other changes, they 
face major holes in their service.
    The severity of the problem has necessitated immediate 
Board action. Two weeks ago, the Board held public hearings 
which revealed beyond any debate that rail service is 
unacceptably poor, with acute issues in many regions. It is 
clear that the four largest railroads' earlier assurances about 
having sufficient employees, locomotives, and railcars were 
incorrect.
    All stakeholders agree the problem is principally caused by 
a shortage of labor. That shortage started with the huge pre-
pandemic cuts. Then, in the spring of 2020, at the onset of the 
pandemic, the same railroads cut their already-reduced labor 
forces even more, by as much as an additional 20 percent. As 
demand for freight rail service quickly rebounded, many of the 
previously laid-off workers found other careers. And as the 
railroads admit, they are now having difficulty recruiting and 
training employees.
    Rail labor reports particular difficulty directly caused by 
increased job uncertainty, worsened working conditions, and 
insufficient incentives. Given these challenges, I am not 
optimistic about significant improvement in service in the near 
term.
    What is clear is that the railroad industry cannot thrive 
without redundancy. They must maintain a workforce and 
equipment, particularly locomotives, at a level which provides 
an essential cushion to meet all the variable but not 
unforeseeable contingencies. When they fail to do so, then, 
ultimately, not only will they suffer, but, even worse, their 
customers and the public suffers more.
    What could not be more clear is that the railroads do not 
have sufficient redundancy. Two weeks ago, the Board issued a 
proposed rule to improve our process to provide relief in times 
of emergency. As a followup to our rail service hearing last 
week, we issued an order focusing the industry's attention on 
the urgent need to restore reliable service. The details of 
that order are in my written testimony.
    In addition, this past March, we held a hearing to work on 
updating the reciprocal switching rules. In my view, reciprocal 
switching can improve rail service by enhancing competition, 
and I personally hope the Board will act on it before this year 
is out.
    We have also advanced two proposed rulemakings to reform 
our rate review process: a streamlined new idea for the U.S. 
called final offer, and a rule to establish a voluntary and 
binding arbitration process. It is also my intention that we 
will act on these two rules by this fall.
    The Board has a number of tools in its existing statutory 
arsenal to enhance service. To be sure, and to be fair to some 
of my colleagues, not everyone on the Board agrees on the exact 
scope of that authority. But in my view, the Board can use its 
existing authority to mitigate these problems in a meaningful 
way.
    And because my time is about up, I do want to just jump 
quickly to point out that we are establishing a new office to 
handle our new responsibility to enforce on-time performance in 
the passenger area, which will be up and running, and we will 
be able to handle any new on-time performance cases that are 
brought to us.
    With that, I see my time is up, and I can elaborate on 
these points in answer to your questions. Thank you very much.
    [Mr. Oberman's prepared statement follows:]

                                 
      Prepared Statement of Martin J. Oberman, Chairman, Surface 
                          Transportation Board
    Good morning, Chairs DeFazio and Payne, Ranking Members Graves and 
Crawford, and distinguished Members of the Committee and Subcommittee. 
As Chairman of the Surface Transportation Board and on behalf of my 
fellow Board members with me today, thank you for the opportunity to 
offer my views on agency reauthorization and answer any questions you 
may have. I will say at the outset that our five-member Board has 
evolved into an extraordinarily collegial and effective group which 
strives hard to act by consensus and generally has succeeded in doing 
so.
    As you know, the STB is an independent federal agency charged by 
Congress with the economic oversight of the nation's interstate rail 
system. The Board was created in 1996 as the successor to the 
Interstate Commerce Commission. The Board was administratively aligned 
with the U.S. Department of Transportation (DOT) until enactment of the 
Surface Transportation Board Reauthorization Act of 2015, Pub. L. No. 
114-110, which established the Board as a fully independent agency on 
December 18, 2015. The economics of freight rail regulation affect the 
national transportation network and are vital to our nation's economy. 
For this and other reasons, Congress gave the STB sole jurisdiction 
over railroad rates, practices, and service. Congress also gave the STB 
sole jurisdiction over rail mergers and consolidations, abandonments of 
existing rail lines, and new rail line constructions, exempting them 
from federal antitrust laws and state and municipal laws.
    Rail network reliability is essential to the Nation's economy and 
is my top priority as Chairman. The rail industry is now facing a 
``severe crisis'' in service, as described by one Wall Street analyst, 
a description which in my view is all too accurate and which I will 
address momentarily.
    I was designated Chairman by President Biden in January 2021, as 
our country was beginning to emerge from the depths of the COVID-19 
pandemic. One of my first initiatives was to focus on the resilience of 
the freight railroad network with particular attention on congestion in 
the rail intermodal supply chain, which was affecting shippers not only 
at major ports, such as Los Angeles and Long Beach, CA, but also inland 
gateways such as Memphis, TN and Chicago, IL. I continued the practice 
of holding more frequent meetings of the Rail-Shipper Transportation 
Advisory Council (RSTAC)--which includes rail carriers and shippers, 
large and small, from across the country--to help inform the Board's 
intensive oversight work.
    In May 2021, I wrote letters to the CEOs of the Class I railroads 
asking them to report on their preparedness to meet growing demand for 
rail service, as freight volumes rebounded as part of the Nation's 
larger economic recovery. In July 2021, I again wrote to the Class I 
railroads about protracted intermodal network congestion, and 
significant fees that railroads were imposing on their customers, 
largely due to circumstances beyond shippers' control. In response, the 
railroads provided assurances and expressed confidence they could 
handle freight volume as the economy continued its recovery. 
Nevertheless, in the second half of 2021, rail service was erratic and 
inadequate for many rail customers, albeit with different Class I 
railroads performing better or worse at different points in time.
    Moving to the present day, the rail industry clearly is struggling 
to provide adequate and reliable rail service. Although the rail 
industry has been hit by many of the problems the pandemic has visited 
on all businesses, the railroads and their dedicated workers delivered 
for the public during the pandemic's earliest and most uncertain days. 
Yet, as the Nation's economy has recovered, recent Class I business 
practices have undermined industry preparedness and service 
reliability. In particular, over the last 6 years, the Class I 
railroads have cut their work force by 29 percent--a loss of 45,000 
employees. With demand back, and against the backdrop of these 
significant labor cuts and other changes, railroads face major holes in 
their service, with loaded trains sitting for days for lack of crews, 
factories struggling to obtain needed raw materials or deliver their 
finished products, farmers straining to obtain adequate fertilizer at 
the beginning of planting season, food producers finding it difficult 
to obtain grain and feed for their livestock, and on and on.
    The severity of the problem, and its impact on our Nation's food 
and fuel supplies, is distressing and has necessitated immediate Board 
action. Just two weeks ago, the Board held a two-day public hearing, 
Urgent Issues in Freight Rail Service, which revealed beyond any debate 
that rail service is unacceptably poor, with acute issues in many 
regions and with certain carriers. The testimony we heard was 
consistent with anecdotal reports we have steadily received in recent 
months and was further substantiated by the rail service performance 
metrics the Board collects on a weekly basis. It is clear the four 
largest U.S. Class I railroads' earlier assurances about having 
sufficient employees, locomotives, and railcars to meet service demand 
going forward were incorrect. Here, again, it is worth noting that not 
all Class I railroads have had the same problems and that rail users 
have stated that Class II and III railroads--the smaller railroads that 
typically have less market power than their larger, Class I railroad 
counterparts--have been more responsive to their customers despite 
facing many of the same external forces.
    Railroads, rail users, rail labor, and rail experts all attribute 
the current service disruptions principally to a shortage of labor. To 
understand the cause of that shortage one must first take into account 
the Class I railroads' actions in significantly cutting their labor 
forces in the years leading up to the pandemic. Then, in the spring of 
2020, in response to a precipitous decline in economic activity that 
immediately followed the onset of the pandemic, the same railroads cut 
their already reduced labor forces even more, by as much as an 
additional 20 percent. They made these cuts despite the fact that 
neither they nor anyone else could have known at that time how long 
this unprecedented pandemic would last and when the economy would begin 
to recover, requiring the railroads to again be fully staffed. Nor 
could they have been confident that the laid-off workers would promptly 
return if asked to do so.
    Keep in mind that the workers dismissed by the Class I railroads 
are highly skilled and held positions that require lengthy training. 
Replacing them is difficult and requires months of rigorous training 
before they can actually begin the work of moving trains. Since June 
2020, as the demand for freight rail service quickly rebounded, the 
railroads have not been able to achieve a commensurate and appropriate 
increase in work force levels. Many of the previously laid-off workers 
had found other careers and never returned to the railroads. And, as 
explained at our recent hearing, the Class I railroads have found it 
difficult to recruit and train new employees. The railroads have noted 
broader economic trends in the labor market, while rail labor has 
reported the particular difficulty in the rail industry directly caused 
by increased job uncertainty, worsened working conditions, and 
insufficient incentives.
    Given the challenges the railroads now recount regarding hiring and 
retaining employees, and the aforementioned difficulty in remedying the 
labor shortage problem quickly, I am not optimistic about significant 
improvement in rail service in the near term. The Board does not 
prescribe particular industry-wide labor levels, nor does it manage 
railroad labor agreements. However, I provide this information to 
explain what is driving a critical aspect of the Board's oversight 
responsibilities--service--and why the Board is taking additional steps 
that I will describe in a moment.
    What has become clear over the past few years, and more acutely 
over the past few months, is that the railroad industry cannot thrive 
and fulfill its critical role supporting the Nation's economy without 
some redundancy--that is, the railroads must maintain a workforce and 
equipment, particularly locomotives, at a level which provides an 
essential cushion to meet all the variable, but not unforeseeable, 
contingencies which have been known to afflict the rail industry since 
its inception nearly 200 years ago. Railroads must always be ready to 
nimbly respond to and work around events such as the recent spate of 
polar vortexes, forest fires, floods, international emergencies, and, 
yes, the pandemic. Railroads must maintain a buffer to protect their 
operations against external shocks, and if they fail to do so, then 
ultimately, they will suffer--but even worse, their customers and the 
public will suffer more. What could not be more clear is that, at 
present--and for the past several years--the major railroads do not 
have sufficient redundancy to keep pace with rapid shifts in demand.
    Partly in response to the growing problems with rail service 
reported to the Board, shortly before the rail service hearing two 
weeks ago, the Board issued a proposed rule to improve its process to 
provide relief in times of emergency and to ease the burden on rail 
users seeking such relief. As a follow-up to our rail service hearing, 
where we heard from Secretary of Transportation Pete Buttigieg and 
Deputy Secretary of Agriculture Jewel H. Bronaugh, in addition to 
representatives of many rail shippers and rail labor as well as the 
railroads, last week we issued an order aimed at focusing the 
industry's attention on the urgent need to restore reliable service by 
the Class I railroads as rapidly as possible. That order does the 
following, among other things:
      Requires the four largest U.S. Class I railroads to 
submit service recovery plans and bi-weekly service progress reports 
for a period of six months with detailed steps they are taking to 
restore adequate levels of service;
      Requires all Class I railroads to submit weekly 
performance data and monthly employment data for a period of six 
months; and
      Requires the four largest U.S. Class I railroads to 
participate in individual bi-weekly conference calls with Board staff 
to provide an update on progress made to improve rail service for a 
period of three months.

    Importantly, this action requires six-month service targets, more 
detailed geographic data, and new customer-centric reliability metrics 
that will give the Board and its stakeholders heightened visibility 
into the extent and location of the acute service issues and labor and 
equipment shortages that are currently negatively affecting the rail 
industry. This information, which supplements the service data all 
Class I carriers already provide, will also help drive industry-wide 
transparency, accountability, and service improvement.
    The Board is also considering several additional mechanisms that 
would help enhance rail service. While the Board's recent actions have 
included temporary reporting on first-mile / last-mile service issues 
related to the urgent service problems, and other crucial measures of 
whether shippers received their freight when expected, the Board is 
considering using its authority to permanently collect more detailed 
information on service reliability and has been considering comments 
recently filed on this topic from interested parties. In addition, this 
past March, the Board held a public hearing to consider updating its 
reciprocal switching regulations. Reciprocal switching is an 
arrangement whereby an incumbent carrier transports a shipper's traffic 
to an interchange point, where, for a fee, it switches the rail cars 
over to a competing carrier to enable the competing carrier to offer 
its own single-line service. In my view, reciprocal switching is a 
potential avenue for improving rail service by enhancing competition 
and is an area where I personally hope the Board will be able to act 
before this year is out.
    The Board has also recently advanced two proposed rulemakings to 
address the reasonableness of rates. The first, which proposes use of a 
streamlined final offer procedure, would utilize the Board's existing 
authority to create simplified and expedited methods for determining 
rate reasonableness in those cases where a more fulsome presentation is 
too costly, given the value of the case. The second, which proposes use 
of an expedited arbitration procedure, would utilize the Board's 
existing authority to establish a voluntary and binding arbitration 
process. The record in both of those proceedings closed last month and 
it is my intention that the Board will act on these two proposals by 
this fall. My hope is that adoption of either such procedure will add 
more balance to the Board's regulations, thereby helping shippers 
lacking effective competition to receive reasonable rates and negotiate 
adequate service.
    As you can see, the Board has a number of tools in its existing 
statutory arsenal to enhance rail service. To be sure, and to be fair 
to some of my colleagues on the Board, not everyone agrees on the exact 
scope of that authority or on certain proposed regulations, and at 
least some of the proposals outlined have been challenged, including by 
the rail industry. However, while the problems facing the rail industry 
today are significant, in my view, the Board can use its existing 
authority to mitigate those problems in a meaningful way.
    While much of the Board's work involves freight railroads, the 
STB's involvement with passenger rail matters is extremely important 
and continues to expand. The Board has undertaken significant steps to 
establish a passenger rail program as required in the Infrastructure 
Investment and Jobs Act, including by planning the creation of a 
passenger rail office and identifying the key personnel with the 
requisite skills and expertise needed to staff that office. In 
addition, the Board has entered into an interagency agreement with 
DOT's Volpe National Transportation Center for several data tools, 
including an analytic tool for handling the Federal Railroad 
Administration's quarterly metrics publications. I am confident in the 
Board's preparedness to meet its responsibility to enforce on-time 
passenger rail performance, and I can tell you that the agency stands 
ready to expeditiously handle any on-time performance cases that are 
filed, to fully analyze the quarterly data provided to us by FRA, and 
to determine whether any Board-initiated investigations may be 
necessary.
    In addition, the Board also has responsibility to approve 
construction of certain new passenger rail projects that provide rail 
service between two states or intrastate passenger rail service that is 
carried out as part of the interstate rail network. We have found 
jurisdiction over several projects since 2007, including high-speed 
projects. The Board also has statutory authority to order a freight 
railroad to allow the operation of additional Amtrak trains over its 
line. We are currently completing the first proceeding brought to us by 
Amtrak under this provision requesting access to freight lines along 
the Gulf Coast. Because this is a pending proceeding, I am precluded 
from commenting on this matter.
    As noted, my fellow Board members and I have found RSTAC an 
absolutely invaluable resource for information on rail and shipper 
issues, especially during periods of strained service like that being 
experienced now. Indeed, at the height of the pandemic, the Board met 
with RSTAC weekly to hear updates from the carriers and from shippers 
on how the pandemic was affecting their operations. To expand the 
voices on this vital informational resource, we recommend adding three 
additional seats to RSTAC: one each for rail car lessors, labor, and 
port representatives. We also suggest updating the RSTAC enacting 
legislation to clarify that all five Board members are members of 
RSTAC. Congress passed that legislation at a time when the Board 
consisted of three members and the statute currently refers to that 
smaller figure. Lastly, the Board has initiated efforts to create a 
committee under the Federal Advisory Committee Act (FACA) to advise it 
on passenger rail issues. I understand, however, that creating a new 
committee under FACA is not a fast-moving or easy process, so we would 
suggest amending FACA to make the process more user-friendly.
    In my view, the Board presently has sufficient appropriations to 
properly carry out its mission. For each of its work force vacancies, 
the Board either is in the process of selecting an applicant, has 
issued a hiring announcement, or has initiated internal steps to fill 
the position. I have placed a priority on the Board's office directors 
hiring the employees they need to handle all that is before the Board, 
and we are well on our way to doing that. In addition, as I mentioned 
earlier, the Board is in the process of establishing a passenger rail 
office and expects to be adding up to ten additional staff to ensure it 
successfully fulfills its important passenger rail responsibilities. 
While we can currently absorb at least some of those employees under 
our budget, with those additional employees, all of the things 
currently before the Board, and all of the items on which I would like 
to take action, it is probable that we will step up our budgetary asks 
in the coming years to meet our staffing needs.
    Thank you and I appreciate your support for the STB and the surface 
transportation network.

    Mr. Payne. Thank you.
    We will now move on to questions. Each Member will be 
recognized for 5 minutes, and I will start by recognizing the 
chairman of the full committee, Chairman DeFazio.
    Mr. DeFazio. Thank you, Mr. Chairman.
    Rail labor and shippers really haven't agreed on many 
things, but they both recommend that we do a better job of 
defining the common carrier obligation. So, given what the 
Chair just said about the abysmal service, the fact that we are 
forcing shippers to accept less service, not showing up, is the 
common carrier language too vague to prevent these reductions 
in service? Because we can redefine what it means.
    Mr. Oberman. That is really the topic of the day, in my 
view, to some degree, Chairman.
    The common carrier language in the statute is general, but 
we have authority by rulemaking to define it more specifically. 
But I will tell you, as a lawyer who has done a lot of drafting 
in my time myself, there are so many variables in how shippers 
and customers get their service from railroads, trying to come 
up with rulemaking language that would be enforceable in court 
and covers the variety of situations has been a task I have 
been struggling with.
    Mr. DeFazio. OK, then maybe----
    Mr. Oberman [interrupting]. And I think this Congress is 
struggling----
    Mr. DeFazio. Then you think perhaps we need to specify.
    Mr. Oberman. Well, I think either you or us could--I think 
you have the authority to----
    Mr. DeFazio. OK. Well, but--I mean, when I hear, you might/
you hope to get something done by the end of the year, that 
doesn't help me much here. I feel much more of a sense of 
urgency. So, this is really pointing toward the committee in 
your reauthorization to take action.
    Mr. Oberman. I would welcome that, Mr. Chairman, and I 
would be happy to have me and our staff work with your experts 
to try to come up with those definitions. I think it is a legal 
challenge, but I think it is needed. I agree with you.
    Mr. DeFazio. Great. That is good. And I am going to ask 
Member Primus about this one.
    I mean, we all know about inflation across the economy, I 
already talked about what is happening with freight rail is 
increasing costs for manufacturers, shippers, and others, and 
they are passing it on to consumers.
    But UP just announced $25 billion in stock buybacks. I 
wonder how much that is worth to the CEO and his salary. I 
really wonder. Norfolk Southern, $10 billion; CSX, a 7-percent 
hike in its dividend; and BNSF is doing very well for Berkshire 
Hathaway. Can you suggest something we can do to deal with this 
egregious behavior by these people?
    Mr. Primus. Thank you for the question, Mr. Chairman, and 
it is good to see you again.
    Yes, I have the same concerns as you. I look at the first 
quarter of this year and the service degradation, and instead 
of immediately after that quarter talking about how they are 
going to fix the service to their customers, or how they are 
going to address the concerns of their employees, they turned 
around and gave billions of dollars in stock buybacks to 
investors who probably won't invest back into the network, 
especially when we need more investment in the network at this 
moment. Their capital expenditures or their investment in the 
network is far less than their dividends or their buybacks that 
they are giving these shareholders, and I think there has to be 
a refocus of priority.
    I think, if there is anything that we need to look at, or 
need help on, it is these activist investors, these hedge funds 
that come in only for short-term gain. You can see it clearly. 
It has played out the last several years. This is not the same 
investment group that the railroads have had in the past who 
understand that, in order to run a railroad correctly, there 
has to be long-term growth, long-term investment, long-term 
interest. And I think you see that now.
    Mr. DeFazio. OK.
    Mr. Primus. You see----
    Mr. DeFazio [interrupting]. Well, if you have any 
suggestions afterwards--I would just like to ask one more 
question of Board Member Hedlund about passenger rail service. 
There was some reference to it.
    I know the Board is looking at action. It is pretty clear 
in the law, when we took over the obligation to carry 
passengers from the railroads, that Amtrak is supposed to get 
preference. And of course, they don't. And it has been 
litigated many times by the industry. What can we do there, or 
what do you think should be done there?
    I don't think your mic is on.
    Ms. Hedlund. Thank you, Mr. Chairman. We now have authority 
to examine on-time performance, which will, of course, 
implicate the issue of whether the railroads are giving them 
preference. And we expect we are going to get a case fairly 
soon, given the on-time performance percentages that Amtrak has 
reported for the last two quarters the last year. There was 
only one long-distance line that was above 80 percent. The rest 
were well below. Some of the shorter lines are above 80 
percent, but the long-distance lines do not perform well.
    And we need to look into that to see whether--one of the 
issues that has come up is long trains, and they are running 
trains that are longer than their sidings. So, when there is a 
3-mile-long train in front of a little Amtrak train, the 3-
mile-long train may not be able to get out of the way for many, 
many, many miles. So, that is something that I look forward to 
examining.
    Mr. DeFazio. Thank you. And just one quick comment, Mr. 
Chairman, and then I will be done.
    I mean, yes, my State actually partnered with Union 
Pacific--I hope they are listening--to do more sidings between 
Eugene and Portland, where we have trains that can run faster 
than the freight track can handle, but it takes 3 hours or more 
to go 112 miles.
    Ms. Hedlund. Right.
    Mr. DeFazio. And that is because their trains are now 
longer than the sidings, which was a joint investment, which is 
pretty sad. So, thank you.
    Thank you, Mr. Chairman.
    Mr. Payne. Thank you. Now I recognize the ranking member of 
the subcommittee, Mr. Crawford.
    Mr. Crawford. Thank you, Mr. Chairman. I want to direct 
this to Chair Oberman.
    The Biden administration has advocated for many policies to 
increase competition, improve safety, reduce emissions, and the 
Board has considered those goals when moving forward with 
regulations. However, overlaid on top of those efforts have 
been significant disruptions to our Nation's supply chain. I 
think it is important to remember that the supply chain is an 
extremely complex system, and regulations can impose 
significant operational disruptions to the freight 
transportation sector.
    Mr. Chairman, would you commit today to ensuring that the 
Board fully considers the impact of any potential regulations 
or determinations on the supply chain before taking any action?
    Mr. Oberman. We, of course, do that every time we consider 
a regulation.
    But I have heard this argument made, and I want to have the 
opportunity in answering your question to tell you that the 
railroads could not possibly have screwed up the system any 
more than they are doing on their own. There is nothing we 
could do to make it worse right now. It is in terrible shape, 
as has been indicated by members of the committee, and by 
everything we heard at our hearing.
    But everything we are doing--and one reason that it takes 
some time for us to carefully enact regulations--is to do just 
what you said, to make sure that, if we are going to enact new 
regulations such as reciprocal switching, it is done with care 
to solve the problems, and not create them.
    But a lot of what we hear from the railroads, in my view, 
are just excuses for what they are doing inadequately.
    But yes, of course, we have that commitment, so, it is easy 
for me to give you that assurance.
    Mr. Crawford. All right. The STB has expressed concern with 
competition in the rail industry. However, the last update to 
the study of competition in the U.S. freight rail industry 
commissioned by the Board was completed in 2010. The dynamics 
of the industry's markets that the railroads serve have changed 
significantly over the past 12 years. Would each of you support 
the Board updating that study?
    Mr. Oberman. Well, let me address that. I always welcome 
more data, more research. It is always helpful. But I do not 
need a study to know that there is woefully lacking competition 
in the rail----
    Mr. Crawford [interrupting]. I get that, Mr. Chairman. You 
made that point abundantly clear. But I am asking the question, 
would you support updating that 12-year-old study?
    Mr. Oberman. Sure. There is no reason not to, and it will 
give us more information.
    Mr. Crawford. OK.
    Mr. Oberman. But we don't need a study----
    Mr. Crawford [interrupting]. And you have also indicated in 
your testimony that you have a spirit of collegiality among the 
Board members. And so, it is safe to say that the Board would 
agree across the Board that they would support an update to 
that study, as well?
    Mr. Oberman. One of the ways I have achieved that 
collegiality is to make sure they all get a chance to speak for 
themselves. So, I will let them address you.
    Mr. Crawford. Perfect. Thank you, sir. I appreciate it.
    Mr. Primus, do you want to go first? We will just move from 
right to left, left to right, as case may be?
    Mr. Primus. Yes. My answer is yes.
    Mr. Crawford. Thank you.
    Ms. Schultz. Yes as well.
    Mr. Crawford. Thank you.
    Mr. Fuchs. Yes, Ranking Member Crawford.
    Mr. Crawford. Thank you.
    Ms. Hedlund. Absolutely, thank you.
    Mr. Crawford. I appreciate that.
    And with that, Mr. Chairman, I will yield back.
    Mr. Payne. The gentleman yields back. I am now recognizing 
myself for questions.
    Chairman Oberman, I am deeply troubled by testimony I heard 
from both our hearing in March and the STB's recent hearing on 
freight rail service in the country.
    I am aware that the STB recently took emergency action to 
require railroads to submit plans to recover service and report 
information. Can you elaborate on what concerns you the most 
from the testimony you heard?
    Mr. Oberman. It would take a long time to tell you 
everything that concerned me the most. It was very, very 
troubling.
    But it does boil down to the pressures that the railroads--
Chairman DeFazio alluded to--to cut resources. They have cut 
labor to below the bone, really. They have thousands of 
locomotives they have mothballed, which slows down trains, 
involves less locomotives to move trains when they need to be 
moved. That is the big picture. That is the overview, and it 
concerns me the most.
    And what sort of exacerbates the problem, in my view, is 
that we have been hearing--and I have heard since I have been 
on the Board, but more intensely in the last year--reports from 
rail labor that, in order to--in my view, what is happening is, 
in order to make up for the shortage of labor, they are 
overworking and abusing the workforces they have. Not enough 
days off, sudden announcements of their assignments, and so 
forth. And so, they are forcing an unusually--a larger-than-
usual number of people--long-term employees, literally--
leaving. So, you are not only a shortage of workers, but you 
are losing a tremendous amount of institutional knowledge.
    So, I think that is the focus of it. There are lots of 
parts of it, but that is what really concerns me the most, this 
overview to--pressure that the railroads feel. And you could 
argue whether the pressure is only from outside, from Wall 
Street, or it is internal in the C-suites. I think it is joint, 
that they have realized there is a way that they can make 
short-term profits at the expense of the public.
    Mr. Payne. OK, and how did that inform the Board's 
unanimous decision to require corrective actions?
    Mr. Oberman. I am sorry, Mr. Chairman. I didn't hear the 
question.
    Mr. Payne. I said how did that inform the Board's unanimous 
decision to require corrective actions?
    Mr. Oberman. Well, it certainly eliminated any debate 
amongst us that strong corrective action was needed. And we 
acted, for the Board, with lightning speed by issuing an order 
just, I think, a week or so, 10 days after that hearing. The 
details we submitted to you in the order, but it is very far-
reaching in terms of requiring much more detailed reporting of 
on-time performance, which we have never really had. And we had 
been working on a longer term rule, which we are still working 
on, but we felt we couldn't wait.
    So, we are requiring a certain amount of first-mile/last-
mile reporting immediately, and we have ordered the four big 
U.S. railroads to give us recovery plans within, I think, 2 
weeks--I don't have the timeframe in front of me--and then 
report to our staff every 2 weeks over the next few months, so 
we can monitor their progress.
    Mr. Payne. OK. And I want to ask the question, can everyone 
quickly highlight what concerned them from the hearing? And 
let's begin with Vice Chair Schultz.
    Ms. Schultz. Thank you for the----
    Mr. Payne [interrupting]. As quickly as you can.
    Ms. Schultz. As quickly as I can. Yes, just to echo 
Chairman Oberman's comments, there were so many issues brought 
to our attention, and they were all incredibly important.
    What comes to mind immediately were the challenges that I 
believe that the agricultural products industry, as well as the 
energy industries, are experiencing at this time, and the 
impact that that is having on other areas of the supply chain.
    Mr. Payne. OK, thank you.
    Ms. Hedlund?
    Ms. Hedlund. When I joined this Board in January, I never 
thought that I would be worrying about whether we would be able 
to export enough grain to make up for the reduction to the 
world market in grain caused by the war in Ukraine. But that is 
where we are.
    Mr. Payne. Thank you.
    Mr. Fuchs?
    Mr. Fuchs. I would say, Mr. Chairman, first-/last-mile 
service failures. These are missed switches. This is just 
before a shipper or receiver is about to receive their freight. 
And so, it has a disproportionate impact on their operations. 
So, that includes first-/last-mile service failures for both 
grain and energy, but across the entire network. That is what 
concerns me most.
    Mr. Payne. Thank you.
    Mr. Primus?
    Mr. Primus. Thank you, Mr. Chairman. I would say that I 
have been alarmed at just how comprehensive the service 
failures have become. It is not limited to region, it is not 
limited to one industry or one area. It is widespread. I think 
it is a national crisis, a national emergency. I think it is a 
national security emergency.
    You look at food prices going up, you look at the cost of 
energy, even coal to our coal-fired powerplants. You are 
looking at chemicals to water treatment plants, shortages 
there. I think, across the board, we are in trouble. And I 
think that we have really got to raise this to a level to 
address that.
    Mr. Payne. Thank you. My time has expired. I will now hear 
from Mr. Burchett for 5 minutes.
    Mr. Burchett. Thank you, Mr. Chairman, and I will try to be 
brief, as well.
    Mr. Oberman, freight transportation bottlenecks, they seem 
to continue to disrupt our national supply chains. I wonder how 
have these Federal mandates improved or worsened the crisis.
    And also, do you foresee any recent regulatory changes 
negatively affecting rail freight operations in the future?
    Mr. Oberman. I am not sure which changes, Congressman, you 
are talking about in terms of bottlenecks.
    Mr. Burchett. Well, it seems that every day I pick up a 
paper, there are supply chain issues. And I know that a large 
amount of freight is traveled across our rails. And I am 
wondering, do those--are any Federal mandates--have they 
improved or have they caused problems with it?
    Mr. Oberman. Well, I am not aware of any Federal mandate 
that is causing problems. The lack of mandates, I think, over 
the last 40 years has enabled the railroads to get to the point 
they are at.
    There were great advantages to the Staggers Act when it was 
enacted and for the next 20, 25 years. But the Staggers Act--it 
eliminated a great many of what had been probably--I think we 
all agree--over-regulation. But, in my view, what has happened 
in the system is that the pendulum has swung too far. And once 
the major railroads were allowed to consolidate, which had many 
good aspects to it in the 1990s, it enabled, ultimately, a 
situation I think that Chairman DeFazio described as 
monopolistic and duopolistic.
    And so, by the early 2000s, those railroads had begun to 
exercise that monopoly power, which has really brought us to 
the place where we are today.
    Mr. Burchett. So, on that line of thinking, are you 
thinking that we need more regulations on railroads to improve 
their service?
    Mr. Oberman. The way I look at it, Congressman, is that we 
need to change the incentives. And what I have preached since I 
have been on the Board, and certainly since I have been 
Chairman, is that I would rather the railroads solve these 
problems on their own so we do not have to intervene. But 
clearly, the incentives right now are weighed much more heavily 
in incentivizing the railroads to cut resources.
    So, we need to do things--for example, if we set--if we 
could, as Chairman DeFazio was questioning, put some detailed 
service standards in the common carrier obligation, as an 
example, that is one tool to say, look, you have to meet these 
standards.
    I have said if you can do it with an OR of 50, I don't 
really care what your OR is, but you have got to have decent 
service. I don't think you can do it with an OR that low, 
because it means you don't have enough workers.
    So--but I--to me, the way to go is to change the 
incentives, and not try to micromanage how they operate the 
actual railroad, but just say meet these standards, and then 
you are fine.
    Mr. Burchett. And do you think that is possible without any 
additional regulations, or do you think that is--you think they 
are just--you are putting them on the honor system, and if they 
don't you are going to pop them, is that what I understand?
    Mr. Oberman. I have been around too long, Congressman, to 
put anybody on the honor system totally when there is that much 
money floating around on Wall Street. It is just too powerful 
for all of us humans. And I include myself in that remark. So, 
we do need to take some action.
    I think--and the Board is working mightily in this 
direction, I can't speak for what the outcome is--that a 
regulation which permits--doesn't mandate, but permits--
reciprocal switching will bring more competition, for example. 
I think, by making rate relief easier to obtain--because right 
now there basically isn't rate--even though we have the 
authority to regulate review rates, nobody brings rate cases. 
They cost millions of dollars and take years, and there are 
clearly cases where people are entitled to them. Those will 
incentivize, I think, the railroads and shippers to reach their 
own agreements, if they know we stand there, without our having 
to intervene. That is the hope.
    But I do think we need to do more. One way would be--and it 
is something that has very much been on my mind, but in all 
honesty I haven't figured out the solution; if I had, I would 
have brought it to you--is to put more specifics into the 
common carrier obligation.
    But beyond that--and I have given this a lot of thought, 
particularly getting ready for this hearing--that the broad 
economic forces that Chairman DeFazio spoke of are really 
matters of such fundamental business policy in this country, 
they are beyond what this Board was set up to do. And you 
wouldn't want, I don't think, our Board to be telling Wall 
Street how to behave. I think there is a place for the Congress 
to be reviewing that, but you wouldn't want to regulate stocks 
in just one industry.
    If there is a problem, I think we may need to rethink it 
and reexamine it as a country, and I would certainly welcome 
the chance to contribute our little corner of the world--it is 
not so little, but our corner of it. But it may require that 
because, as has been mentioned, while the railroads, because of 
their monopolistic ability, are a particularly egregious area 
right now, there are other areas of the business community 
which we may need to be thinking about.
    Mr. Burchett. I have run over my time. Thank you, Mr. 
Chairman.
    Mr. Oberman. Sorry about that, so did I.
    Mr. Burchett. Mr. Chairman, thank you.
    Mr. Payne. Next we will hear from the gentleman from 
Tennessee, Mr. Cohen, for 5 minutes.
    [Pause.]
    Mr. Cohen. I am unmuted now. Thank you, Mr. Chairman. I 
appreciate your having this hearing. And it is an honor to 
follow Mr. Burchett, and I might have some time to [inaudible] 
into my questions.
    But first, Mr. Oberman, I want to thank you for appearing 
before us.
    I really appreciated Mr. DeFazio's comments. He is 
passionate, and apparently there are problems within the 
freight industry that the employees seem to be having and that 
the industry seems to be having.
    But my concern is that I continue to hear from rail 
employees in my district, and my district has several Class I 
railroads going through it, including the BNSF. But they 
continue writing me about increasing difficulty that they have 
on the job.
    You discussed severe job-cutting on the Class I's that--
45,000 jobs, or 29 percent of the industry, in just a few short 
years. Demands on employees that remain have only increased, 
including the deployment of Hi-Viz attendance policy at the 
BNSF. This policy and others like it put incredible strain on 
employees, making it difficult, if not impossible, to take time 
off for doctor's appointments, care for sick children or loved 
ones, or even rest when an employee knows that they are too 
fatigued to work safely. These unreasonable, restrictive 
expectations are driving people out of the industry at a time 
when we are all hearing about the need to staff up the 
railroads.
    So, do you believe the imposition of conditions like Hi-Viz 
are ultimately having an impact on the ability of railroads to 
deliver good services?
    Mr. Oberman. Somebody slammed the door just as you asked 
the question, Congressman. Could you just state the last 
question again?
    Mr. Cohen. Was it somebody from BNSF?
    [Laughter.]
    Mr. Cohen. They would do that.
    Mr. Oberman. I only caught the back of their head as they 
went out of the room, so, I can't answer.
    Mr. Cohen. Thank you, sir. I was asking about the Hi-Viz 
program that they have got, and one of the employees who has 
written me, a constituent, it was a very touching letter. I 
wasn't going to ask any questions at all, but his letter was so 
touching I thought I needed to ask on his behalf. He is my--he 
is a 13-year retired vet. He has got twins. He loves working 
for BNSF. But he said he has been having trouble getting time 
off to do doctor's appointments and take care of his health.
    And I wondered if you think Hi-Viz is the problem in 
stopping railroads from delivering the good services that they 
should be doing?
    Mr. Oberman. Well, it is not the problem, but I have 
received many, many of the same kinds of letters that you just 
described. And we heard from rail labor at our hearing 2 weeks 
ago. And I don't think BNSF is unique. They all have a 
different name for how they are treating their employees. But I 
think this effort to squeeze more work out of a smaller and 
smaller number of workers has become extremely oppressive, and 
is forcing, as I mentioned earlier, a number of people to just 
leave the industry, some in mid-career, leaving their pensions 
on the table. It is really quite remarkable.
    So, I think it is a symbolic of the problem. And I--the 
RTP, the Rail Transportation Policy, says that we are generally 
to make sure that there are fair wages, a good treatment of 
labor. But we really do not have jurisdiction over rail labor. 
There are other agencies specifically set up to deal with that. 
And of course, there is a national bargaining session going on 
right now. And one would hope that rail--the Class I railroads 
are getting the message.
    I would note, Congressman, and I don't want to concede too 
much at this point because it was just the beginning, but 2 
days ago, Jim Foote, who is CEO of CSX, gave a relatively 
remarkable statement, in my view, that I read an account of in 
yesterday's press saying that it was time for the Class I's to 
completely rethink their relationships with labor, that they 
know they have problems.
    Now, that was good rhetoric. It remains to be seen if there 
is any meat behind that rhetoric. But maybe they--we are, all 
of us who are engaged in this area, including the members of 
this committee, are beginning to get their attention. I would 
hope so.
    Mr. Cohen. Well, thank you, Mr. Oberman. And I realize 
there are other agencies that deal with labor, but you are the 
closest opportunity I had to raise this issue, and the only 
thing that I really wanted to talk about. [Inaudible] really 
talk about anything, but this was just too much.
    And this--Mr. Smithers contacted us back from BNSF about 
this particular employee. It was about a month after we 
contacted him, and the letter is rather vanilla, and maybe we 
will try again, or BNSF will help me. I mean, I was just 
touched by this man's letter. He is an older man. He is working 
as an engineer. And he gave 13 years to our Government and 
defense industry. And he came home to be with his twins. And he 
has got health problems, and he wants to stay on--it seems like 
they should take--they are doing the minimum which the Federal 
Government requires on FMLA and some other things, but they 
ought to be doing more than the minimum to bolster their 
workforce, care for their employees, and to help the rail 
industry in general. So, we will try to do that.
    Do I have any time left?
    Mr. Payne. The gentleman's time has expired.
    Mr. Cohen. Well, I will lend that time to Mr. Burchett, and 
I thank you.
    [Laughter.]
    Mr. Payne. Thank you. The Chair now recognizes Mr. Bost for 
5 minutes.
    Mr. Bost. Thank you, Mr. Chairman.
    Chairman Oberman, over the last 6 months, the Board has 
held 2-day hearings on reciprocal switching, a 2-day hearing on 
rail service, and multiday hearings on restoring Amtrak service 
along the gulf coast. The Board has also issued notices of 
proposed rulemaking for a number of different issues. The Board 
has also continued to attempt to address the supply chain 
crisis, review mergers, and engage in other regulatory 
activities.
    Mr. Chairman, how does the level of activity for the 
current STB compare to the past Boards?
    Mr. Oberman. Well, thank you for that question.
    First of all, Congressman, I am really happy to see 
somebody here from Illinois. It makes me feel a little more at 
home. So--and I didn't grow up too far from you. I grew up in 
Springfield.
    Mr. Bost. Yes, you are way north in the State.
    Mr. Oberman. Well, my father used to say we grew up on the 
far South Side of Chicago.
    This has been an extraordinarily busy time at the Board, 
probably--I have only been there 3 years, but we have a lot of 
people who have been there for a while, and we probably have 
never been this busy in the last 20 years.
    A lot of it were some actions started by my predecessor, 
which we need to fulfill. And of course, there were many issues 
that were brought to us, such as the pending merger between 
Canadian Pacific and Kansas City Southern, the gulf coast case, 
which is unprecedented--it is the first time that statute has 
been tried--the whole supply chain meltdown. These all landed 
on our plate at the same time.
    And I have to say that our staff, which is relatively small 
for a Government agency--first of all, it is a highly qualified 
and dedicated staff, and we have churned out an amazing amount 
of work. So, I know people get frustrated with the fact that it 
takes us a long time. But let me just take the opportunity to 
tell you that, with only 117 FTEs on staff now--and we are in 
the process of intense hiring efforts--last year the Board 
issued 474 decisions--and these are often lengthy, lengthy 
decisions--339 of those were staff-written decisions from our 
director's office. And our OPAGAC office, which handles 
relationships with Congress, but also relationships with the 
shipping world and our stakeholders, handled almost 1,400 
matters that came in with a relatively small number of people.
    So, we have, I think, risen to the occasion. I think we are 
all working extremely hard, and I think we are meeting the 
challenge. But I appreciate the question, because it has been a 
very busy time.
    Mr. Bost. Well, my second question I was going to ask was 
asked by the ranking member before he left. And you did a--so, 
I have got that answer. But my third was this.
    Last month, the Board held a 2-day hearing to discuss 
issues in rail service. And during that hearing, railroads 
admitted that service had not been at the level the customers 
expected. These disruptions have been severely felt by my 
constituents in the agricultural industry, and I don't believe 
that we can simply regulate our way out of the problem, but we 
can find a solution.
    Will the STB commit to working with all stakeholders to 
address service issues and work to ensure that both rail 
carriers and shippers have a balance in that decision?
    Mr. Oberman. We will, because we always do, Congressman.
    And I will say it is a big step in the right direction. And 
one of the reasons to hold public hearings--and, of course, I 
don't have to tell the Congress about that--is to force these 
issues out in the open. And I think it was a big step in the 
right direction that the railroads did not come in and try to 
pretend that there was no problem.
    Mr. Bost. Right.
    Mr. Oberman. They often have in the past, but they really 
couldn't deny the facts that were in front of us.
    Mr. Bost. I agree. And I think there is a lot of work to be 
done. And I think that every answer that you have given today 
says that you are willing to do that work. And I appreciate you 
being here today.
    And with that, I yield back.
    Mr. Oberman. Thank you, Congressman.
    Mr. Payne. Thank you, the gentleman yields back. We will 
now hear from the gentleman from Indiana, Mr. Carson, for 5 
minutes.
    Mr. Carson. Thank you, Chairman.
    Thank you, Chairman.
    Thank you, Commissioner Primus, Commissioner Hedlund. I 
would like to hear from both of you on what additional 
authorities are needed to limit the time that rail crossings 
block traffic on public roads.
    And secondly, I made a request in 2018 for more data about 
this problem but haven't received details on the number of 
locations of incidents since that time. Has STB investigated 
the economic impact of stopped trains, and extremely long 
trains for that matter, that block crossings?
    And if so, we would love to be briefed on what you found so 
far. If not, would you investigate the problem?
    Mr. Primus. Thank you, Congressman. And again, it is good 
to see you.
    The problem of trains stopped at crossings actually doesn't 
really fall under our purview. It is more of an FRA-related 
issue. But it is--well, I should say the symptoms of it are 
something that is concerning to us, because we believe, because 
the railroads are building longer and longer trains, I think 
that lends itself to why you are seeing more train stoppages at 
these crossings.
    In my time at the Board, while we have heard it, I don't 
think we have had any cases come before us or any issues come 
before us to take a look at it. But I think we can--we look 
forward to working with FRA as they move forward in looking at 
the issue, and addressing the issue as well.
    Ms. Hedlund. Sometimes the issue of blocked crossings will 
come up in the context of a merger matter, and I know that that 
has happened in the past. And so, possibly, in connection with 
that kind of proceeding, we can take that into account and ask 
the railroads what they intend to do about it if there is 
additional traffic on a certain line. So, I think that is one 
place where we can look at it.
    But to the extent the blocked crossings is really a result 
of this problem that we have talked about several times this 
morning, which is long trains and inadequate sidings, that is 
certainly something that we are focused on. I don't know what 
we can do about it, but it is endemic.
    Mr. Carson. Thank you both, Commissioners.
    I yield back, Chairman.
    Mr. Payne. The gentleman yields back. We will now hear from 
the gentleman from California, Mr. LaMalfa, for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman.
    With regard to rail shipping here, we have had some great 
concerns expressed on the west coast in California for being 
able to receive corn and corn byproducts, partly for the 
ethanol industry, ethanol production, which is very important 
for the fuel mixture we have with, I think, up to 10 percent 
alcohol or whether it maybe gets into E15, even E80, E85, but 
we have issues with getting the product out there.
    And so, what do you see as--I am told there are labor 
problems, not enough labor. Is it track time? Is it--what is 
it, from the Board's perspective, do you see?
    And then also I want to touch on rail rates, too, versus 
trucking.
    Mr. Oberman. Did you say rail rates?
    Mr. LaMalfa. Yes. My understanding is that rail has always 
been extremely competitive with trucking. But I have 
information that says it is actually--trucking has a shipping 
advantage these days. And so, I don't----
    Mr. Oberman [interrupting]. You----
    Mr. LaMalfa [continuing]. Know if you can elaborate on 
that.
    Mr. Oberman. I assume you were directing that at me, 
Congressman?
    Mr. LaMalfa. Yes, sir.
    Mr. Oberman. Yes. You have covered several very crucial 
matters in one question. So, let me try to----
    Mr. LaMalfa [interrupting]. Yes, let's just do the--yes, 
the first part.
    Mr. Oberman [continuing]. Let me try to parse them out.
    Among the problems that I am aware of facing California 
businesses are--but not unique to California--are, one, ethanol 
plants having to literally shut down production, either because 
they couldn't get raw materials--and also, one of the most 
acute problems we heard was that they can't get trains of empty 
cars to unload the finished product, so, they can't manufacture 
more, so, they have to stop production. And that is a problem 
around the country. And it is, in my view, definitely adding to 
the escalation in fuel prices, because 10 percent of the 
gasoline is ethanol.
    Secondly, we had two startling reports, which I understand 
have not totally been resolved, of some major food producers, 
including poultry producers in California, who cannot get their 
usual load of feed that come in long unit trains. Those 
problems are directly the result of not enough crews.
    If you look at the statistics that we collect, one of the 
statistics is a train is holding, meaning the train has 
stopped, it is not moving, either for lack of crews or lack of 
locomotives. Both of those numbers have been going up through 
the roof, across the boards. So, that is what is happening with 
both ethanol and with the farm matters, that they are just a 
matter of shortages in both areas, locomotives and crews.
    In terms of rates, the complaints that I hear about people 
using trucks rather than trains recently are not so much rates, 
but complete lack of reliability. So, you have major shippers, 
if you just look at the port problem, the amount of containers 
that move by train--and a fair number do out of the ports--has 
been going down, despite the number of ships sitting out there 
on the ocean, because some of the major users--the Walmarts, 
the Home Depots--find it more reliable to ship cross-country by 
truck. At least the truck will get there, and it may be even 
more expensive.
    So, it is a problem of reliability, of service. I remember 
Mr. Fuchs talked about the first-mile, last-mile----
    Mr. LaMalfa [interrupting]. Could you elaborate on the 
either lack of locomotives, or what is going on with the crews?
    Mr. Oberman. Well, first of all, you need crews to drive 
the locomotive.
    Mr. LaMalfa. Yes, right, right, right.
    Mr. Oberman. But secondly--and this came out at our 
hearing--well, secondly, they mothballed thousands of 
locomotives--when I say ``they,'' all the railroads together. 
Those--you can't just--it is not like parking your car for a 
month, and you can just start it up. They all need maintenance, 
sometimes rehabilitation, before a locomotive can be returned 
to service.
    So, when we talked about cutting 45,000 workers, that 
included the electricians and mechanics who they need in the 
shops to get the locomotives fired up. So, that has been a 
problem in getting more locomotives out on the lines. And then 
they----
    Mr. LaMalfa [interrupting]. Have these workers gotten----
    Mr. Oberman [continuing]. Compounded it----
    Mr. LaMalfa [interrupting]. Have they gotten other jobs, or 
are they just not coming out of their COVID caves yet?
    Mr. Oberman. Oh, I think most of this is beyond the COVID 
problem. I think that many of these 45,000 people have found 
other careers.
    Mr. LaMalfa. Yes.
    Mr. Oberman. And they did not come back. That has really 
been across the boards.
    But the final problem with locomotives--and this is just 
shocking to me, and we have aimed our recent order at getting 
to the bottom of this--the railroads, even when they have--so, 
now these very long trains will have three or four locomotives 
on them, because you need that much to move them.
    But when they are not--many times the train will leave the 
yard, and they will instruct the engineers to turn off one or 
two of the locomotives, just to save fuel. That slows the train 
down. That congests the system. And/or they issue an order--and 
some of these were presented--Congressman Cohen may be 
interested by some of the BN workers--they presented orders to 
us from the railroad saying, don't go faster than 40 miles an 
hour, even if you are on a 70-mile-an-hour track----
    Mr. Payne [interrupting]. Thank----
    Mr. Oberman [continuing]. Because it saves fuel.
    Mr. Payne. Thank you.
    Mr. Oberman. So, it is a combination of all of those 
problems that are contributing to what you are hearing in 
California.
    Mr. Payne. The gentleman's time has expired.
    Mr. LaMalfa. It is very devastating to agriculture and our 
fuel supply.
    Thank you.
    Mr. Payne. Thank you. Now we will hear from the gentlelady 
from California, Mrs. Napolitano, for 5 minutes.
    Mrs. Napolitano. Thank you, Mr. Chair. I was glad to hear 
all the discussion of the railroads. But it seems to me that 
the railroad is not willing to do voluntarily what is necessary 
or right.
    My question is regarding the rail investment and profit. 
Can you share what is the percentage of railroad revenue being 
reinvested in workers and infrastructure versus the railroad 
revenue going to investors, and how has this changed over the 
past 30 years?
    Mr. Oberman. Congresswoman, the connection was very hard 
for me to hear the precise nature of the question. I only 
caught parts of it.
    Mrs. Napolitano. Can you share what the percentage of 
railroad revenue being invested in workers and the 
infrastructure versus railroad revenue going to investors, and 
how has this changed over the last 30 years?
    Mr. Oberman. Well, I can't speak with personal knowledge of 
how it has changed over the last 30 years.
    But certainly, in recent years, we have documented billions 
and billions of dollars. I think I gave a speech last fall 
documenting, in the last 11 years, about $200 billion in 
combined stock buybacks and dividends going to the owners at 
the same time, and that the ability for them to make those 
payments was enabled almost entirely by cutting those 45,000 
workers, as well as mothballing locomotives--in my view. There 
is some controversy about that, but I think the line is pretty 
direct.
    And I think our view is that the way to change that balance 
is to, through incentives and regulations, force the railroads 
to meet higher service standards. I don't think they can do it 
without employing more workers and locomotives, but the goal is 
to get the service back.
    I don't know if that was responsive.
    Mrs. Napolitano. What can Congress do? Do we have to issue 
more policy to enable you to be able to hold them accountable?
    Mr. Oberman. Well, it is a good question. If I had a very 
specific answer, I would have provided it to the committee 
already. I think it is a complex matter of how to consider 
reining in some of the forces of Wall Street. It is really 
beyond a railroad question. I think it is a broader economic 
question.
    Mrs. Napolitano. Well, we need to take a look at it, 
anyway.
    I have significant concerns over the train length. I have 
been caught in about a 15- to 20-minute wait over what I 
considered 1\1/2\ miles, but it was really more like 2\1/2\ 
miles. And I could see the line of cars behind me. They are all 
spewing fumes, waiting to get through. And of course, some of 
them got out of the line and went back to some other way of 
getting to their destination.
    What--is it possible to--and I know the railroad is trying 
to cut down on the number of employees by doing longer trains 
and et cetera, but how is that affecting business, in terms of 
delivery?
    And the sidings are not as prevalent as they should be, or 
they haven't gotten as many adequate sidings to be able to take 
the length of trains.
    Mr. Oberman. Well, right now we don't have the authority to 
just order--directly, to order railroads to limit the length of 
their trains, or at least I don't think we do. We do have 
authority to direct certain service--relief of service, but it 
has never been applied, nor has anybody ever asked us to apply 
it to just shorten a train.
    Railroad operations are extraordinarily complex. And if you 
just try to pick out one problem, such as long trains, you may 
well have all kinds of unintended consequences.
    The overall picture, I think, is--that you raise--is a very 
valid concern. I think that the extremely long trains have 
complicated the service problems because, as has been referred 
to, there are very few places, if any, in the country where the 
extremely long trains can fit into a siding. And in many, many 
corridors--since all of the merger mania of the 1980s and 
1990s, the railroads have stripped out the double tracking. So, 
there are many long stretches where there is only a single 
track, and when one of these long trains gets on it, they 
really block everything else.
    And I think it is up to the railroads to reorganize how 
they launch these trains in order to provide better service, 
because there are places where it definitely does impact 
service. But it is not just the simple matter of saying no 
train can be longer than X feet, because everything is involved 
in a network.
    Mrs. Napolitano. Thank you very much.
    Mr. Oberman. I think my colleague, Karen Hedlund, would 
like to add something, Congressman, if it is OK.
    Ms. Hedlund. Thank you.
    Mr. Payne. The gentleman's----
    Ms. Hedlund [interrupting]. Congresswoman, just one point. 
The irony is that, notwithstanding the fact that there are 
these long trains blocking crossings, what I have heard is that 
the Alameda Corridor is running under capacity because not 
enough--not--trains are going through it.
    Mr. Payne. OK, thank----
    Ms. Hedlund. [Inaudible.]
    Mr. Payne. The gentlelady's time has expired.
    Mrs. Napolitano. Thank you.
    Mr. Payne. We will next hear from the gentleman from Texas, 
Mr. Nehls.
    Mr. Nehls. Thank you, sir.
    Thank you, Chairman Oberman, for testifying before the 
committee, and thank you, all the witnesses, for being here 
today.
    Americans are struggling with rampant inflation. The 
Consumer Price Index is at 8.3 percent from a year ago. If you 
go to the grocery store, it is common to see empty shelves, 
rationing of goods, and out-of-control prices. For God's sake, 
you have a full-blown baby formula shortage.
    Supply chain issues and delays are plaguing almost every 
form of transportation and leading to increased costs on 
everyday goods. It doesn't matter what industry, whether it is 
aviation, trucking, rail, or shipping, they are all 
experiencing delays. All are trying their best to navigate 
higher costs, labor shortages, unprecedented regulations, 
massive uncertainty in energy prices.
    And it wasn't long ago that President Biden and the smart 
folks of his administration were calling inflation transitory. 
Yes, transitory. It seems that reality has finally sunk in when 
on Tuesday, the President announced that inflation was his 
number-one domestic issue.
    Every month there seems to be a new bogeyman for the Biden 
administration to blame what I see as a confluence of factors: 
one week it is COVID, the next it is port delays, it is the war 
in Ukraine, it is greedy big oil, it is corporate America price 
gouging. Today, the political folks in this administration want 
to direct their attention and energy toward the greedy Class I 
railroads. Never, never does this administration or this 
President look at themselves in the mirror and take any 
accountability for the problems they have largely created.
    And Mr. Chairman, I want to ask you, but you talk a lot 
about the labor shortages and the rail industry, and in your 
testimony it is the rail industry has contributed to this 
worsening working conditions and insufficient incentives. I say 
it is a sad state of affairs. It is every industry. It is sad 
that job creators in this country, no matter what industry, are 
competing with the Federal Government to get their people back 
to work.
    And when you look at salaries, I think about the salaries. 
Do you know what the average Class I rail employee makes a 
year? It is about $137,000. I know Biden's inflation is bad; 
$137,000 sounds like a pretty good salary to me.
    Do you know what percentage of the employees are unionized 
for Class I railroads? It is 84 percent. So, are you saying 
that the industry with 84 percent unionization rate, and an 
average salary of $137,000, has insufficient incentives to 
attract talent?
    Mr. Oberman. I do. I do, because those are the facts that 
are presented to us.
    And I would only comment, not to get into a broader 
political discussion, because that is beyond my role for being 
here today, and I can't comment on other industries, because 
that is not what I have been asked to work on. But I can tell 
you the problems in the railroad industry are self-inflicted.
    Unlike almost other--I am not aware of any other industries 
which have cut 30 percent of their workforce. And that began 
long before President Biden took office. It began, actually, 
when President Obama was in office, and continued all through 
the Trump administration. And I don't see any of those 
administrations had anything to do with it. It was the 
railroads themselves that made those choices.
    And I can tell you that at the hearings we had 2 weeks ago, 
the railroads came in and proudly proclaimed that they were 
trying to hire new conductors at $52,000 a year, not $137,000. 
And when I asked them how they were going to compete with 
Walmart hiring truckdrivers at $110,000, they didn't have an 
answer. So, that is all I can add to this.
    Mr. Nehls. Thank you, Mr. Chairman. You have answered my 
question.
    I yield back.
    Mr. Payne. The gentleman yields back, and we will now hear 
from the gentleman from Georgia, Mr. Johnson, for 5 minutes.
    Mr. Johnson of Georgia. Thank you, Mr. Payne.
    And Mr. Oberman, you nailed it, Representative Nehl's 
question.
    And thank you, all of the witnesses, for being here. And 
also, thank you so much for the work that you all do.
    Railroads provide efficient transportation of goods and 
people. They have one of the lowest carbon footprints among 
transportation options, and they have historically provided 
stable, well-paid union jobs. But today, cost-cutting 
strategies promoted by vulture capitalists on Wall Street have 
downsized railroad operations to the most basic options. And as 
a result, industries that depend on railroads, from agriculture 
to animal welfare to passenger rail, are less resilient and 
robust.
    What is more, the lack of reliability of railroads has led 
freight traffic to rely more on trucks than rail, exacerbating 
emissions and also our looming climate crisis. And while the 
hard-working team at the STB is taking these issues seriously, 
Congress must help to ensure that the STB has the tools that it 
needs to conduct effective oversight and to address concerns.
    Now, Mr. Oberman, animal welfare requires high-quality rail 
services. Delayed trains and scarce railcars are impeding crop 
shipments this spring. In fact, as noted in a letter from the 
USDA to STB, communications from industry suggest that some 
livestock operations face potential starvation for their 
animals. These disruptions pose critical threats to the 
American agriculture industry broadly, the livelihoods of our 
farmers and ranchers, and the lives of countless animals if the 
potential required killing of herds of animals is not 
addressed.
    Chairman Oberman, you were quoted as saying that farmers 
have been hours away from de-populating herds. Will herds of 
animals be prematurely slaughtered because of delayed grain 
shipments to producers?
    Mr. Oberman. I think we have come close to that, 
Congressman, based on reports I have heard. But so far it 
hasn't happened.
    I would say that we have one, I think, very strong tool to 
immediately deal with these problems. And we have made it even 
stronger in our proposal of a couple of weeks ago to provide 
more emergency relief. So, in just the situation that you 
referred to, where a livestock producer, a chicken farm or 
cattle farm can't get the feed train delivered, we are 
proposing to make it much easier for those customers to come in 
and get an emergency order from us within a 2--I can't remember 
the time period, but 2 or 3 days, very quickly, for us to order 
a railroad to deliver the needed feed trains that are not 
getting delivered.
    So, that is the concept behind this one rule that we have 
proposed, and we put out a very short comment period. So, 
hopefully, we can act on it within the next--I think at this 
point about 3 or 4 weeks away to being able to put that into 
place, although we have an emergency service rule now that 
shippers can use, and I have been told that there have been 
several instances in the last couple of weeks where shippers 
were on the verge of filing an emergency petition with us, and 
the threat of it resulted in the railroads saying, OK, we will 
deliver the trains.
    So, sometimes we act more effectively by just being there 
and knowing that we are not afraid to act. And this Board is 
not afraid to act.
    Mr. Johnson of Georgia. Well, thank you for that.
    Typically, the STB regulates the rail industry over long-
time horizons, but what can the STB do immediately when a true 
emergency arises, such as when huge numbers of livestock and 
livelihoods are at risk, in addition to what you just talked 
about?
    Mr. Oberman. Well, that is our primary tool for the 
immediate solution of these problems. But I think the order we 
issued last week after our hearing requiring immediate filing 
of service recovery plans and reporting on first-mile/last-mile 
service so we can publicize this, among other things, is going 
to, I think, bring the railroads, I hope, to a more accountable 
situation.
    They know the spotlight is on them. This hearing helps. Our 
hearings helped. And the message has gone out.
    It was interesting. Congressman DeFazio quoted Matt Rose's 
speech from about 4 years ago, who told the railroads that they 
really needed to shape up if they didn't want the Congress and 
the STB running their businesses. And I think it has taken them 
several years to get the message, and I am hoping they have 
finally gotten it.
    Mr. Johnson of Georgia. Thank you. My time has expired, and 
I yield back.
    Mr. Payne. The gentleman yields back. We will now hear from 
the gentleman from Ohio, Mr. Balderson, for 5 minutes.
    Mr. Balderson. Thank you, Mr. Chairman.
    And Chairman Oberman, thank you for being here today. My 
first question, Chairman, is you note that the Board has 
statutory authority to order a freight railroad to allow the 
operation of additional Amtrak trains over its line, and the 
Board is currently completing a post-proceeding [inaudible] by 
Amtrak, which is requesting access to freight lines along the 
gulf coast.
    When considering whether to order a freight railroad to 
allow the operation of Amtrak trains over its line, does the 
Board consider potential disruptions this may cause to freight 
rail networks?
    Mr. Oberman. Very good question, Congressman. And I will 
have to answer it in generalities, because, as you said, we are 
in the middle of a contested hearing on just this question. 
And, in fact, whenever we get released from here we will be 
going back into that hearing at our office down the street.
    The statute that we operate under, which has never been 
implemented in the last 50 years, but is the issue in this case 
and, I think, the issue in the situation you are referring to, 
provides that we shall order the Amtrak service onto a rail 
line. However, we must take into consideration ``unreasonable 
impairment of freight service.'' So, the Congress has mandated 
us to do exactly what you just asked, and we are doing it.
    And yes, it is very important to make sure that Amtrak and 
the freight railroads run cooperatively and fluidly, and there 
is a constant tension there, which is what we were set up to 
moderate.
    So, I think the direct answer to your question is, yes, we 
consider interference with freight.
    Mr. Balderson. OK, thank you. I had kind of a followup on 
that, but you pretty much answered that for the process.
    I would like to follow up on some questions I asked to 
representatives of the rail industry and shippers during a 
subcommittee hearing on March 8th.
    Does the Surface Transportation Board have any concerns 
that proposed changes to the reciprocal switching could impact 
future investments by the railroads into their own 
infrastructure?
    Mr. Oberman. Well, I hear that concern from the railroads. 
It is not one that, speaking for myself, I would ignore. I 
think it is vastly overstated.
    What came out at the hearing was the exploration, led 
somewhat by me, but I think all of us were interested in--is 
how to implement a loosened, somewhat loosened, reciprocal 
switching rule that would provide necessary relief and more 
competition to the industry with minimizing disruption of 
current freight.
    The railroads constantly say that STB should keep our noses 
out of it, and let the market decide. And I have many answers, 
but my usual answer is, I believe in letting the market decide. 
But for the market to decide, there has to be a market. And in 
many, many parts of this country, there simply is no market. 
Shippers are captive to one railroad, and that is what the 
reciprocal switching concept is aimed at.
    Mr. Balderson. Thank you for that answer. I appreciate your 
time.
    Mr. Chairman, I yield back my remaining time. Thank you.
    Mr. Payne. Thank you. The gentleman yields back. We will 
now hear from the gentlelady from Nevada, Ms. Titus, for 5 
minutes.
    Ms. Titus. Thank you, Mr. Chairman, and I thank the 
witnesses for being here.
    I was very interested in that last question, because we are 
trying to get Amtrak restored between Las Vegas and Los 
Angeles. And we are having trouble dealing with the private 
railroads and the use of some of the lines and things, because 
we have to import everything to Las Vegas, whether it is 
flowers, or lobsters, or whatever. We have got to have that 
freight operating effectively. So, I am curious to learn more--
and we can do this offline--about the interaction between 
Amtrak and the freight lines in that part of the country, not 
just in Florida.
    I wanted to ask you--or let me just say first, it used to 
be that the trains were the good guys, and not the truckers. 
They had less pollution, they didn't tear up the roads, they 
respected unions, they had more safety, and they were better 
for climate change.
    We see the truck industry instead--they lack drivers, but 
what they want to do is hire people who are 18 years old; not 
have rest periods; they don't recognize many unions, some of 
these trucking companies; and they tear up the roads and don't 
pay their fair share to help to fix them. Now it seems like 
railroads are trying to go in the same direction as trucking, 
and I don't think that is a very good example to follow. So, I 
am like you. I hope they are hearing this, and kind of reform 
their ways.
    I guess I would ask you if you could talk a little bit 
about what might have been available through the CARES Act, or 
some of the recovery bills, or even the bipartisan 
infrastructure bill that went to maybe help railroads. I know 
there was money there for workers who were laid off maybe to 
get unemployment. But was there anything in there that you see 
as making perhaps an improvement, or a difference in the way 
railroads operate if they can access some of this money, either 
directly or indirectly, through some of the investments in 
infrastructure?
    Mr. Oberman. Congresswoman, let me say a couple of things 
quickly in response to what you said. And if you don't mind, I 
am going to then shift over to Member Hedlund, who spent a 
number of years at the FRA, and has a lot more knowledge about 
the Government handing out money to railroads than I do. And I 
think she could give you a more fulsome answer.
    I will say that we are very conscious of our obligation 
under the statutes with regard to Amtrak and its service.
    And I am sure you know, by the way--you didn't mention it, 
and I can't much talk about it because it is pending, but there 
is a pending proceeding before us to establish a high-speed 
passenger rail line between Las Vegas and Los Angeles----
    Ms. Titus [interposing]. Yes.
    Mr. Oberman [continuing]. Which should provide, I would 
think, some great boon to the Las Vegas economy once that gets 
built, assuming it does get built.
    Ms. Titus. I want it to get built, and I want you to speed 
that up. We have been working on it 40 years. It is time to 
build that speed train.
    Mr. Oberman. You know what? We have acted on every one of 
the matters that have come before us on that thing, since I 
have been on the Board, pretty quickly. It is really the people 
who are building it who are--we are waiting for them, as well. 
I guess that is all I could say at this point.
    Let me switch it over----
    Ms. Titus [interrupting]. I will pass that word onto them. 
Thank you, sir.
    Mr. Oberman. Pardon? I didn't hear that.
    Voice. She will pass it on.
    Mr. Oberman. Oh, OK.
    Ms. Titus. I just said I will pass the word onto them.
    Mr. Oberman. Oh, yes, please do.
    Anyway, if you don't mind, I would like to switch this over 
to Member Hedlund.
    Ms. Titus. I appreciate it.
    Mr. Oberman. Thank you.
    Ms. Hedlund. Thank you, Congresswoman Titus.
    The money that has been made available in the IIJA for 
railroads, a total of $66 billion, a good share of that is 
going to go into the Northeast Corridor, which is owned by 
Amtrak, used by commuter rail and also by Conrail.
    But the majority of it will probably wind up going into 
investments in our existing freight railroads for the benefit 
of passenger rail. And that was also the case with the Recovery 
Act when I was at the Department of Transportation.
    And without question, although these investments will be 
made for the benefit of passenger rail--and I am sure the FRA 
and the Department will require agreements between the State 
sponsors and--or grantees and the railroads, that they 
guarantee that those investments will yield whatever the 
objective of the project is, whether it is additional round 
trips or reduced travel time, that they will guarantee that.
    But those investments inevitably also benefit the railroads 
themselves. If you build additional or longer sidings, it also 
is going to benefit the freights because it means that two long 
trains can pass each other, not just that a long train can 
allow Amtrak to pass.
    Mr. Payne. Thank you----
    Ms. Hedlund [interrupting]. So, I think there is a great 
deal of money available. It is up to the Department of 
Transportation----
    Mr. Payne [interrupting]. Thank you.
    Ms. Hedlund [continuing]. To decide where that goes.
    But my observation would be that it is going to benefit 
more than just passenger rail.
    Ms. Titus. Thank you, Mr. Chairman.
    Mr. Payne. Thank you very much. The gentlelady's time has 
expired. We will now go to Mr. Johnson of South Dakota.
    Mr. Johnson of South Dakota. Thank you, Chairman Payne.
    Mr. Chairman, you noted in your testimony some concern and 
critique of the railroads' layoffs. I think you had noted that 
they had reduced their labor force by 29 percent in the 
preceding 6 years. I think some 45,000 jobs.
    When you have raised this issue with the Class I's, what 
response do they give you? I just want to put some further 
context on this issue.
    Mr. Oberman. Congressman, I have never heard a response 
that made any sense. So, it is very hard for me to articulate 
their position.
    And I have asked. And in fact, I am hoping to shed some 
light on this in our requirement that they give us recovery 
plans. I have asked repeatedly of the Class I executives when I 
have either met with them in public or at our hearings, ``Do 
you have any plans to restore any portion of those 45,000 
jobs?''
    I have never suggested they should hire all of those 
positions back, but it is quite clear to me that they don't 
have a cushion. As I have said many times, you wouldn't send a 
football team out on the field without a backup quarterback. 
But what the railroads have done is just that: they have set 
the rail crew levels at levels where they have no backup. So, 
when there was COVID, when there is a vortex, when there is any 
disruption of workers getting to the job, the trains stop 
running.
    Their attitude so far has been, well, we are just trying to 
fill the holes we have now. If you look at their employment 
levels over the last 2 years, they have barely managed to 
increase the levels they had after they made the additional 20-
percent cut in labor at the beginning of the pandemic. So, they 
don't give me an answer, at least one that I could articulate.
    Mr. Johnson of South Dakota. So--and I assume, when we are 
talking about not hiring back, I mean, I suppose we should 
probably look at these workforce adjustments in two ways.
    I mean, one would be the 45,000 you are talking about over 
6 years. Let's call those efficiency-focused reductions. And 
then you have got the furloughs that were done during COVID, 
which I think probably would have been more market conditions, 
volume-driven. I mean, I assume they have recovered the 
workforce levels coming out of COVID, by and large.
    Mr. Oberman. They have not. That is really why we are 
having the problem.
    And I wouldn't call those 45,000 efficiency reductions. 
They call them that. But it is not efficient when you get to a 
workforce that is so low without a backup that the trains stop 
running. And we were having a lot of service complaints before 
COVID. They have been greatly exacerbated since COVID.
    And I think what was a foolish business decision--and I 
have said so, and I will say it again--is that when COVID hit 
in March of 2020, no one knew how long it was going to last. 
Was it a month, a 10-year program, or somewhere in between? And 
no one knew when freight rail demand would come back.
    And remember, when you lay off an experienced engineer or 
conductor--and there is no assurance they will come back, and 
many of them did not, they went into other industries--to 
replace that person under FRA restrictions and just general 
common sense requires 6 months of training. So, you make a 
precipitous business decision that I am going to cut 20 percent 
of my workforce, which is what most of the Class I's did 
between March and June of 2020, not knowing when you are going 
to need them back, but when you do need them you are at least 6 
months away, assuming you can find them.
    So, these were really irresponsible business decisions, in 
my view, and it is why we are suffering to today, and why they 
cannot restore enough workers to even, as the other congressman 
was saying, to get feed trains to chicken farms. They just 
can't do it in every situation.
    Mr. Johnson of South Dakota. Yes. I mean, Mr. Chairman, I 
mean, it is my understanding that, in general, after furloughs, 
90 percent of those workers return in short order. Now, that 
has been my understanding; that has not been the case in this 
situation. It has been closer to 65 or 70 percent.
    Might it--I mean, you used the word ``irresponsible.'' I 
mean, given that 90 percent normally return, is that 
description a bit harsh on your part?
    I mean, were they operating under reasonable assumptions, 
given history?
    Mr. Oberman. I don't think so, because the pandemic was 
something new. No one could predict the future.
    I am not aware of that figure of 90 percent, and I don't 
know that it is 65 percent now. I know that the rail labor have 
shown me statistics where hundreds of people are leaving 
voluntarily now because of working conditions, and I think that 
was a disincentive to people coming back.
    One of the things that happened in late 2020 and 2021 is 
that they would bring workers back from furlough for a month, 
then they would furlough them again. And a number of workers 
have told me and union leaders have said that after bouncing 
back and forth once or twice, it was such a hardship on their 
families that many people just walked out the door.
    So, I think it was--I don't think it is a----
    Mr. Johnson of South Dakota [interrupting]. My time has 
expired, sir. Thank you for your comment.
    Mr. Chairman, I yield back.
    Mr. Payne. I would like to thank the gentleman for yielding 
back. We next have the gentleman from California, Mr. Huffman, 
for 5 minutes.
    Mr. Huffman. Thank you, Mr. Chairman, and let me thank 
Chair Oberman and the members of the Surface Transportation 
Board for being with us here today. This is very enlightening.
    I would like to use my time on a slightly different 
subject. I would like to ask the Board about their policies 
relating to railbanking, and specifically when there is an 
abandonment filing pre-coordination for the conversion of a 
rail line to a trail, and another entity comes along expressing 
interest in acquisition. I am curious about the factors that 
the Surface Transportation Board applies in considering those 
situations, so, let me start with the local community support.
    How much weight would the STB give to local community 
support for one of these alternatives over the other in a 
scenario like that?
    Mr. Oberman. And you are talking specifically, Congressman, 
about conversion of an unneeded rail line to a trail use?
    Mr. Huffman. Correct.
    Mr. Oberman. We always hear and listen very intently to 
communities.
    I think there is generally a lot of support on the Board. I 
certainly support the concept of being able to convert rail 
lines for trail use. It is good for the environment, it is good 
for the local population. And I think we, generally, have been 
very supportive.
    Sometimes these requests languish for years and years, and 
there is a certain point at which we have to act on them. We 
have some legal restrictions and some due process property 
rights restrictions, but generally we are very supportive of 
community input on these issues.
    Mr. Huffman. I appreciate that, Mr. Chairman.
    I wonder also about the financial viability of an entity 
that might come along and oppose railbanking, suggest that they 
have an interest in reviving a functionally abandoned rail 
line. How important to your consideration would the financial 
viability of an entity like that be?
    Mr. Oberman. You are saying of a line that has been 
discontinued, but then an entity wants to reinstate it for rail 
service?
    Mr. Huffman. Yes, and is opposing the railbanking 
alternative.
    Mr. Oberman. Well, we listen to those requests.
    We generally are mandated by statute to make it easy for 
rail lines to come into existence. That is one of our jobs. And 
there is a, I guess, a spectrum on how much we look at 
financial viability.
    Generally speaking, we take the view that the market will 
determine whether a rail line is viable. But there have been 
cases. There was one involving a proposal to build a 
multibillion-dollar railroad around Chicago, but the applicant 
only had $150 in the bank. This preceded me. That is an 
example, an extreme one, where we look at financial viability. 
But----
    Mr. Huffman [interrupting]. That is very helpful.
    Mr. Oberman [continuing]. Normally----
    Mr. Huffman [interposing]. Yes. Thank you.
    Mr. Oberman [continuing]. Normally, we don't.
    Mr. Huffman. Mr. Chair, and then finally, in a situation 
like that, would the Board require that entity to engage with 
the community and the public in an open and transparent way?
    In other words, if they are secretive about who they are, 
about where their funding comes from, is that a factor that you 
would consider?
    Mr. Oberman. Well, it is not an issue that has come before 
us, but I generally believe in full disclosure. And when we get 
those kinds of applications, we have the ability to insist on a 
more fulsome application if the facts would warrant, which 
would include revealing the basic financial structure of the 
entity and so forth.
    Mr. Huffman. All right.
    Mr. Oberman. So, I think the general answer to your 
question is yes, but I think it is very much case-specific.
    Mr. Huffman. Mr. Chairman, I really appreciate that. I do 
believe that where existing rail lines can continue to be used 
for rail they should be, and where abandoned lines can be 
brought back into rail service in a way that makes economic 
sense and has public support, that should happen, too.
    But I ask these questions because there is a railroad in my 
district that abandoned that line through the Eel River Canyon 
a long time ago. It just cost far too much to operate it. It 
has fallen into terrible disrepair. And that incumbent railroad 
and local communities have struck a deal to do something that 
does make sense, to create the 320-mile Great Redwood Trail, 
the longest continuous railbank trail in America.
    And just as the Surface Transportation Board was 
considering the application for abandonment, a very shadowy LLC 
came along to propose an interest in taking it over for a coal 
export scheme that is very unlikely to happen. It certainly is 
at odds with the climate policies expressed by the 
administration and Secretary Buttigieg.
    So, I just hope that these factors will be on your mind as 
you discharge your responsibility, and very much appreciate 
[inaudible].
    Mr. Payne. The gentleman's time has expired. We will now 
hear from Mrs. Steel from California for 5 minutes.
    [No response.]
    Mr. Payne. She is not there? OK.
    Next we will hear from the gentleman from Massachusetts, 
Mr. Lynch, for 5 minutes.
    Mr. Lynch. Why, thank you, Mr. Chairman. I want to thank 
the Board members for attending and helping the committee with 
its work.
    I do want to correct the record. So, there was an earlier 
statement by one of my colleagues that the average rail worker 
earned about $137,000 a year. I just about fell out of my 
chair. I was going to go apply. We are having trouble getting 
rail workers in Massachusetts, because we--as the Chair has 
mentioned, we lost--and one of my colleagues on the Republican 
side mentioned--we lost 45,000 rail workers over the past few 
years.
    But according to salary.com, it lists the salary as between 
$48,000 and $80,000. The average salary is about $64,000. 
Electrical engineers, obviously, get paid on the higher end. 
ZipRecruiter.com, as well, lists the salary between $24,000 and 
$60,000. And actually, it comes out to between $18 an hour and 
$28 an hour. So, that is what they are making.
    And the Bureau of Labor Statistics, which does this for a 
living, reports that the average salary is $64,150 a year. So, 
I just wanted to disabuse anyone of that notion that they are 
making more than double that.
    I met with the BLE, the Brotherhood of Locomotive 
Engineers, Teamsters, the other night. And they have told me 
that they have been 2 years without a contract, and that they 
were having trouble holding on to people because most people 
can't go a couple of years. And it may be a couple of more 
years before they ever see a raise.
    I see there is a need for workers, and $64,000 is OK. We 
should be able to attract people at that salary, I wish it was 
more. And I see the service is going down, and I am just--it is 
sort of a paradox, where we need workers at a decent salary and 
yet we can't seem to get a collective bargaining agreement for 
any of these rail unions. They have all been without a contract 
for a couple of years.
    And I am just curious if any of the members there have any 
sense of what is causing that reluctance on the part of the 
carriers, the rail companies, to come to the table and work out 
an agreeable solution.
    Mr. Oberman. Well, it is the question of the hour, I think, 
Congressman.
    And I didn't want to contradict the other congressman. 
There is a lot of overtime in the rail industry, and there are 
some workers who make----
    Mr. Lynch [interrupting]. There is not enough workers.
    Mr. Oberman [continuing]. Yes, who make $137,000. I didn't 
have the average numbers at hand. I am glad you offered them, 
but I didn't think he was on target, but I wasn't sure I was 
calculating it.
    We don't have jurisdiction over the rail labor contracting. 
And of course, there is a national bargaining session going on 
as we speak. And then there is an entire statutory provision 
that you all have created many decades ago for Presidential 
emergency boards, and so forth. And I am not enough of a labor 
expert to tell you whether that is a help or a hindrance to 
their reaching a contract.
    But I think we have seen a general trend, where the 
railroads have been--they have been not spending enough money 
on their workforces. But what I hear----
    Mr. Lynch [interrupting]. I do want to--if you don't have a 
ready answer, I would rather move on.
    Mr. Oberman. Sure.
    Mr. Lynch. Mr. Primus, it is good to see you. It has been a 
while, but it is good to see you doing well. I know you had 
comments in the press a while ago about the diminution of 
service and the extension of--the delays.
    Some companies are saying that the delays--their delivery 
times are increased by 15 to 20 percent. I am just wondering if 
you have any thoughts about the long-term impacts of that on 
the supply chain, and of cost to consumers?
    Mr. Primus. Yes, I do. And it is good to see the delegation 
represented here this morning.
    On your previous question, I will just say this also. You 
can see the attention that the railroads have given to labor 
when you look at how much they have cut the labor force, and 
how much they are not respecting and looking out for their best 
interests. You can see that. They are giving more money to 
their shareholders. There hasn't been one major bonus or pay 
raise in those years, those couple of years that they have been 
working us out of COVID and getting folks back on. No hint 
towards that.
    With respect to service, absolutely. Service degradation is 
the reason why we are paying more in food prices. It is a 
reason why we are seeing increases, even though it dropped last 
month, increases in gas prices. You are going to see problems 
in these powerplants, these coal-fired powerplants. They are 
not getting coal. You can see it in water treatment plants. 
They are not getting the chemicals to treat the water.
    So, yes, I mean, service is going directly to the 
consumers. It is affecting and hurting the consumers, not just 
in the pocketbook, but also with their health and with their 
safety.
    Mr. Lynch. Thank you.
    Thank you, Mr. Chairman. I yield back. Thank you for your 
courtesy.
    Mr. Payne. The gentleman yields back. I will now hear from 
my good friend, the gentleman from Illinois, Mr. Davis, for 5 
minutes.
    Mr. Rodney Davis of Illinois. Thank you to my good friend, 
the chairman. It is great to see you, my friend. I appreciate 
being able to walk right into the hearing and come up next in 
questions. What a coincidence, or the chairman is giving me 
some preference, but I would say it is probably more a 
coincidence, sir.
    Great to see the members here today of the Board. We 
appreciate the opportunity to hear from you. I am actually the 
lead Republication on the House Administration Committee here 
in Congress. And the issue I am going to bring up today relates 
more to some of the issues we have been facing there, but they 
impact many of the issues that we talked about today.
    I have had discussions with folks in the election space who 
have serious concerns with a paper shortage in the upcoming 
elections. Most recently, I convened a roundtable discussion on 
this topic to hear from stakeholders about the critical need to 
use paper for ballots and for other election materials. I am 
committed to helping broker a solution for these concerns to 
ensure that elections officials have the materials they need.
    As you know, several commodities are exempt from STB 
oversight, including forest products and paper. I understand 
the STB has considered revoking some or all of the commodity 
exemptions for a decade now.
    I will start with you, Mr. Oberman, home State guy. Do you 
have any updates on the STB's consideration of these 
exemptions?
    Mr. Oberman. Thank you, Congressman. I think the last time 
I was in your office I was chairman of Metra, and look what 
happened to me.
    [Laughter.]
    Mr. Oberman. The answer is that we have a pending rule 
change to lift those exemptions. And it has taken a long time 
because the industry wanted us to consider a much more sort of 
an economic analysis of how we have done it. We thought we had 
a solution, and it turned out not to be one. So, that rule is 
still pending.
    But I will say that we have the ability to lift an 
exemption for purposes of a specific case. We just did that in 
a pending matter involving a different kind of commodity. And I 
had heard, when I first joined the Board, a number of 
complaints from the forestry industry, the paper industry, 
about a lack of service and de-marketing by railroads. But I 
have to say I have not heard such a complaint recently.
    But if there are such concerns, those shippers can come to 
us right now, and ask us for relief and also to lift the 
exemption for the purpose of that proceeding. And it is 
something that we would listen to, and they won't have to wait 
for the overall rule if they have a valid complaint for lack of 
service. So, if that is going on--and I am not aware of it, but 
I hope that you will encourage those folks to come--bring it to 
our attention immediately, and we will try to deal with the 
problem.
    Mr. Rodney Davis of Illinois. Well, I certainly will. And I 
appreciate the opportunity to hear that update.
    The election and having faith in our election systems, it 
is too important to be disrupted by a product shortage that, if 
we can address together, we can make sure that that does not 
happen.
    Did anybody else up at the dais have any comments on this?
    Mr. Oberman. I would say, by the way, based on the cases we 
are hearing right now, there doesn't seem to be a shortage of 
paper. You ought to see the paper that the lawyers are filing 
with us.
    Mr. Rodney Davis of Illinois. Well, and I asked the same 
question when we had the roundtable. But it is a certain type 
of paper that is not being produced as much by producers that 
is required for election administrators and election equipment 
to operate effectively. And that is what is concerning to us.
    So, I appreciate being able to have the ability to work 
with you all to see if there is a problem remaining as we move 
closer to the elections this year that we can work in a very 
collaborative way to make sure that doesn't happen.
    I don't see your name tag on the end. I apologize.
    Ms. Hedlund. Right. I am also originally from Illinois.
    Mr. Rodney Davis of Illinois. Oh, great. Where at?
    Ms. Hedlund. The South Side of Chicago.
    Mr. Rodney Davis of Illinois. OK. Well, I am really far 
South Side of Chicago.
    Ms. Hedlund. Yes, right.
    [Laughter.]
    Ms. Hedlund. This is stunning, what you have said. As I 
expressed earlier, we are worrying about world famine, and now 
you are telling us we should be worrying about saving our 
democracy.
    Mr. Rodney Davis of Illinois. Well, and that is why we 
wanted to have the roundtable with the producers, and ensure 
that our election administrators, election equipment providers 
had a voice, and to really offer concerns.
    And my main concern in bringing this up here today is 
really to be able, again, to collaborate with the STB if we see 
that that shortage actually happens.
    Now, hopefully it won't. Hopefully, the problem, bringing 
it to the attention of producers months ago may have corrected 
it, and I certainly hope so. But it is something that I think 
the STB needs to be concerned about, and I will let you know 
what we hear, based on the feedback from Mr. Oberman.
    So, thank you. I yield back the balance of my time.
    Mr. Payne. The gentleman yields back. And we will now hear 
from the gentleman from Illinois, Mr. Garcia, for 5 minutes.
    Mr. Garcia of Illinois. Thank you, Chairman Payne and Chair 
DeFazio, for holding this hearing, and thank you to the STB 
Board for appearing today. I, of course, want to recognize my 
friend and STB Chairman, Marty Oberman, who is here today. 
Marty and I, of course, served together in the Chicago City 
Council during a very tumultuous period, but also historic.
    So, great to see you, Marty.
    Since 2015, the Class I railroads have reduced the 
workforce by 29 percent, resulting in tens of thousands of job 
losses, of course. It is clear from the recent hearings that 
the Surface Transportation Board had on freight rail service 
that these cuts have resulted in the Class I railroads being 
unable to provide the level or quality of rail service that we 
need.
    I strongly support Chair Oberman and the Surface 
Transportation Board's plans to implement regulations and 
policies that will address the negative consequences that these 
job cuts have had on railroads, its workers, Amtrak, and 
shippers.
    Chair Oberman, certain rail shippers complain of railroad 
de-marketing, meaning that railroads are refusing to serve 
them, or are placing onerous conditions on service because the 
railroads feel that these shippers cannot be served at the 
railroads' desired profit margin. Do you believe that this is 
happening?
    And if so, do you believe that such practices are 
consistent with the common carrier obligation?
    Mr. Oberman. Excellent question, Congressman. And you are 
the only congressman I can call Chuy, so, I will.
    Mr. Garcia of Illinois. Thank you.
    Mr. Oberman. We started life together, political life.
    There is little doubt in my mind, based on a large number 
of anecdotal reports and some data, that the railroads have 
been engaged in--the Class I's--in de-marketing for a number of 
years.
    And if you look at the statistics about carloads and 
growth, or lack thereof, you will see that over the last 1\1/2\ 
decades or so, as the economy has grown substantially, carloads 
on railroads have not, which means there is a negative impact 
on marketing many kinds of commodities which ought to be on 
rail, but which are not as profitable as some others, and so, 
the railroads have assiduously tried to avoid that kind of 
business because it doesn't make their numbers look as good for 
their stock prices.
    I do think a de-marketing effort by railroad, if it can be 
proven, does implicate the common carrier obligation. And it is 
something that we have the current authority to look at.
    Part of the problem is getting these affected shippers to 
bring their complaints to us on a case-by-case basis. They are 
expensive, they are time-consuming. And a lot of shippers, I 
think, who are de-marketed just find it easier to move their 
stuff on truck, rather than engage in complex litigation.
    But it is one of the areas--just thinking back to Chairman 
DeFazio's inquiry about the common carrier obligation--that I 
would love to be able to explore in more detail, and see if we 
can't come up with a way to counter the incentives for de-
marketing. But it is definitely a real phenomenon, Chuy.
    Mr. Garcia of Illinois. Yes, sir. Well, thank you, 
Chairman.
    Another question. Commuter railroads currently have very 
limited abilities to bring cases before the Surface 
Transportation Board when it comes to matters like negotiations 
with freight railroads on adding service or resolving time 
performance issues.
    As Congress considers reauthorization of the STB, do you 
believe that strengthening the ability for commuter railroads 
to bring these matters before the Surface Transportation Board 
would help resolve some of these important issues?
    Mr. Oberman. I do. I can look at this from both sides of 
that aisle, because I had the experience at a commuter railroad 
of having to interact with the Class I's. And generally, Metra 
had good relationships with Class I's, but there were points of 
contest.
    But we are well suited, I think, to manage those kinds of 
relationships because we already are assigned to manage the 
interrelationships between passenger rail on Amtrak that Amtrak 
provides and freight rail. And while commuter rail is different 
from, certainly, from long-distance or intercity Amtrak 
service, the concepts of being cognizant, of making sure that 
rail service functions fluidly while still providing passenger 
service over the same right-of-way, is one that we are very 
experienced with.
    And I have been asked about that. I don't think we need to 
lobby for more duties because we are filled up. But if the 
Congress wanted to ask this Board to be in the position to 
mediate some of those relationships, I think we would be a 
suitable place to do it.
    Mr. Garcia of Illinois. Thank you so much, Marty.
    And Mr. Chairman, I yield back.
    Mr. Payne. Thank you, the gentleman yields back. We will 
now hear from the gentlelady from California, Mrs. Steel, for 5 
minutes.
    Mrs. Steel. Thank you very much, Mr. Chairman. Thank you to 
the witness, Mr. Oberman.
    Significant disruptions to our Nation's supply chain have 
had a ripple effect, hitting American families in their wallets 
as inflation continues its grip on our Nation.
    Burdensome regulatory efforts can impose significant 
operational disruptions on the freight transportation sector. A 
recent proposal by the Board, which would require railroads to 
turn over traffic to competitors, would ultimately increase the 
complexity of moves, increase network fluidity, and exacerbate 
current difficulties with the supply chains. At a time when the 
Federal Government is investing significant resources in 
identifying and addressing issues that disrupt supply chains, 
it seems counterintuitive to pursue regulatory policies that 
could further slow down the flow of goods.
    Mr. Oberman, will you commit to ensuring that the Board 
fully considers the impact of these proposals on the 
functioning of the supply chain before taking any action?
    Mr. Oberman. Congressman, thank you for the question. We 
are in the process of doing just that, and we always consider, 
because it is our job, the impact of what we do on freight rail 
operations.
    But I will just repeat what I alluded to earlier, and that 
is for the--currently, the supply chain has been so bollocksed 
up by the railroads that anything we could do, I think, would 
only improve the situation. And that is what we are trying to 
do before we act.
    Mrs. Steel. Thank you for your commitment.
    As it relates to the supply chain crisis, can you share 
with the committee all of the data and evidence you have 
asserting that freight rail service has solely become both 
inconsistent and unreliable?
    Mr. Oberman. All the data we have is at your command, 
Congressman, and I think we do supply the committee now with 
anything that you have asked for. But we are happy to do it. 
The more sunshine we can shed on this situation, the better.
    Mrs. Steel. I really appreciate that, your answer.
    And I yield back, Mr. Chairman.
    Mr. Payne. Thank you. The gentlelady yields back.
    That concludes the questions that we have from Members at 
the hearing today.
    I would like to again thank each of the witnesses for your 
testimony today.
    And I ask unanimous consent that the record of today's 
hearing remain open until such time as our witnesses have 
provided answers to any questions that may be submitted to them 
in writing.
    I also ask unanimous consent that the record remain open 
for 15 days for any additional comments and information 
submitted by Members or witnesses to be included in the record 
of today's hearing.
    Without objection, so ordered.
    This subcommittee stands adjourned.
    [Whereupon, at 12:01 p.m., the subcommittee was adjourned.]

                      Submissions for the Record

                              ----------                              

  Prepared Statement of Hon. Sam Graves, a Representative in Congress 
     from the State of Missouri, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chair Payne, and thank you to our witnesses for being 
here today.
    In follow-up to the March 8th hearing, which examined stakeholder 
perspectives on the Surface Transportation Board's reauthorization, we 
will hear testimony today from the Board itself.
    This year alone, the STB has multiple important issues before it, 
including several large rulemakings, the review of a significant merger 
proposal, and the potential resumption of Amtrak service on the Gulf 
Coast.
    The Surface Transportation Board Reauthorization Act of 2015 was 
the STB's first reauthorization since 1996, which occurred after a 
thorough and deliberative analysis of ways the Board could better 
function based on a review of its operations in the roughly 20 years 
prior.
    Recently, the STB has received funding through continuing 
resolutions. The Fiscal Year 2022 appropriations bill passed last year 
would provide a full year of funding for the agency.
    It is important to hear from the Board on its current workload, its 
needs, and how Congress can potentially support its important mission 
without negatively impacting the STB's ample workload.
    I look forward to hearing more from the STB members on these 
issues.
    Thank you, Chair Payne. I yield back.

                                 
 Prepared Statement of Hon. Eddie Bernice Johnson, a Representative in 
  Congress from the State of Texas, Submitted for the Record by Hon. 
                          Donald M. Payne, Jr.
    Thank you, Chairman Payne and Ranking Member Crawford for holding 
today's hearing. I would also like to thank our outstanding witnesses 
for testifying before us today.
    I want to use my time to educate the members of the Surface 
Transportation Board (STB) on the proposed I-20 Corridor passenger rail 
project. This critically important passenger rail service will provide 
new transportation options for our Southern region, generate economic 
development and good-paying jobs, reduce highway congestion, and 
promote energy efficiency.
    As the STB reviews the merger application filed by Canadian Pacific 
Railway Limited (CP) and Kansas City Southern Railway Company (KCS), I 
strongly encourage the STB to include the use of passenger rail on this 
line as a condition when deciding this case.
    The I-20 Corridor Council, a multi-state coalition of mayors and 
other elected officials, councils of governments, business and economic 
development leaders, chamber and tourism representatives, college and 
university presidents along the route have been vocal in strong support 
for this passenger rail connections for many years. In fact, Members of 
Congress, I-20 Corridor Coalition members, and other interested parties 
have contacted the Surface Transportation Board (STB) to express their 
support for making the use of passenger rail a condition in the sale of 
this rail property to Canadian Pacific.
    The proposed I-20 Corridor passenger rail project would not only 
provide an East-West connection between two of our nation's fastest-
growing urban mega-regions (greater Dallas/Fort Worth, with 7.5 million 
in population, and greater Atlanta with 6 million), but would also 
connect the rural communities and smaller cities along the route to 
these new areas and beyond. The railroad tracks for this 815-mile route 
between Fort Worth and Atlanta are already in place, with Amtrak 
service currently operating on much of the line.
    There is a 345-mile portion between Marshall, Texas and Meridian, 
Mississippi which, like the rest of the route, already has existing 
right of way but does not currently have passenger rail service. All 
that would be needed is relatively modest funding for rail sidings and 
an agreement with the host railroads in coordinating freight and 
passenger rail service.
    Two comprehensive studies have already been completed on the I-20 
Corridor rail route. The first study, completed by Amtrak, determined 
that the proposed route would have strong ridership numbers and be 
economically viable. The second study, completed by the Texas 
Department of Transportation and the I-20 Corridor Council, 
demonstrates that the capacity could be increased to allow new 
passenger service and improved freight along the route for a cost of 
less than some $100 million. The study also found that freight traffic 
would not be adversely affected by this expanded passenger service.
    This project has the potential to provide new tourism dollars to 
the region, a link to other local and regional rail and transit hubs, a 
new emergency evacuation route, and access to numerous superb 
institutions of higher learning on or near the route, including more 
than twenty Historically Black Colleges and Universities.
    In a recent meeting that I and members of the I-20 Corridor Council 
had with Amtrak President Stephen Garner, he expressed that this 
project was a good opportunity to create synergies with other long-
distance routes and agreed to update the analysis done in 2015.
    At the request of the freight railroads, Congress enacted the Rail 
Passenger Service Act of 1970 creating Amtrak, which allowed freight 
railroads to concentrate on their profitable freight business in return 
for agreeing to accommodate and facilitate Amtrak operations. 
Unfortunately, some freight railroads continue to thwart passenger 
rail's access to their lines and fail to make them a priority during 
operations.
    Knowing how important the I-20 Amtrak project is to the Southern 
region of our country and knowing that freight railroads continue to 
violate the Rail Passenger Service Act, I strongly encourage the board 
to make the use of passenger rail a condition in the Canadian Pacific 
and Kansas City Southern merger, and advocate for passenger rail 
whenever possible.

                                 
  Statement of Ian Jefferies, President and Chief Executive Officer, 
  Association of American Railroads, Submitted for the Record by Hon. 
                          Donald M. Payne, Jr.
    On behalf of the freight railroad members of the Association of 
American Railroads (AAR), thank you for the opportunity to submit this 
statement for the record. AAR's members include the seven Class I 
freight railroads and many other railroads that together account for 
the vast majority of U.S. freight railroad mileage, revenue, employees, 
and traffic. Amtrak is also a member of AAR, as are various commuter 
railroads that, in aggregate, account for more than 80 percent of U.S. 
commuter railroad trips. I was pleased to testify before this 
Subcommittee on March 8, 2022, with other Surface Transportation Board 
(STB) stakeholders, and I appreciate the opportunity to update the 
Subcommittee on several new issues that have since arisen.
    Railroads are proud to play a major role in extremely complex 
global supply chains, working in coordination with steamship lines, 
truckers, ports, drayage providers, and owners of chassis, shipping 
containers, and warehouses, as well as manufacturers, wholesalers, and 
retailers of goods. To ensure freight is delivered safely, efficiently, 
and when expected, every stakeholder must do their part to maintain a 
consistent flow of freight and avoid bottlenecks, and under normal 
circumstances, railroads do just that. That said, current circumstances 
are not normal, and, for many of our customers, rail service in recent 
months has not been of the quality they have come to expect. Railroads 
recognize that poor service is not a recipe for growth and know 
improvement is necessary.
    The causes of recent rail service issues are numerous, often 
overlapping, and sometimes beyond the control of any single railroad. 
Railroads are working tirelessly to tackle these service challenges and 
remain fully committed to restoring service to the high levels their 
customers deserve and railroads themselves expect.
    It is important to note that even with these service constraints, 
railroads today are moving a tremendous amount of freight safely and 
effectively. In the first quarter of 2022, railroads moved more 
chemicals than in any other quarter in history, the second most grain 
for a first quarter since 2011, and the fourth most intermodal units 
for a first quarter in history. In the first 16 weeks of 2022, rail 
coal volumes were up 7.8 percent, food carloads were up 8.1 percent, 
and carloads of crushed stone, sand, and gravel were up 11.9 percent 
over the same period in 2021.
    In this statement, I will more thoroughly discuss a few specific 
factors that have contributed to recent rail service challenges and 
steps railroads are taking to overcome them.
                         The COVID-19 Pandemic
    Over the past two years, supply chain disruptions stemming from the 
COVID-19 pandemic have been non-stop and cascading, with significant 
impacts to global manufacturing capability, demand, employment, and 
consumption patterns. Around the world, global trade has been disrupted 
as COVID-19 cases impeded vessel operations, caused slowdowns or near-
complete cessation of port activities, and impacted operations at far-
flung manufacturers and raw material providers. Meanwhile, variations 
in state and local stay-at-home orders caused further unpredictability 
in production and volumes for certain industries.
    A rapid, unexpected shift in consumer spending patterns compounded 
these problems. Retailers assumed the sudden drop in consumer spending 
at the start of the pandemic would persist and were unprepared when the 
economy quickly recovered and demand for all kinds of goods rose 
sharply. Retailers have been playing catch-up ever since.
    Like consumer spending, rail traffic fell sharply when the pandemic 
began but rebounded quickly thereafter; most notably rail intermodal 
traffic rose sharply despite predictions that such volumes would stay 
weak for months to come. Some weeks in late 2020 and the first half of 
2021, U.S. railroads were handling more than 300,000 containers and 
trailers per week, levels no one expected when the pandemic began. 
These significant gains in rail intermodal volumes paralleled gains in 
activity at our nation's ports. Eventually ports, railroads, and other 
supply chain participants became bogged down, resulting in the current 
supply chain challenges our nation is facing.
    For railroads, the single most problematic supply chain development 
over the past year has been the unwillingness or inability of many rail 
customers to effectively manage their flow of traffic, especially 
intermodal containers, into and out of rail terminals. Freight must be 
cleared out to make room for new freight moving in, and rail terminals 
were not designed for, and cannot physically accommodate, long-term 
storage of significant amounts of freight. Further, when rail terminals 
become congested, trains will back up on the mainlines serving those 
terminals, causing further delays that cascade across rail's highly 
interconnected network and that negatively impact railroads' ability to 
serve all their customers.
    Railroads have been using various operational levers at their 
disposal to ameliorate congestion on their networks and enhance system 
fluidity, including providing financial incentives to customers to 
encourage weekend in-gating at certain facilities or to take a 
container out when containers are brought in to expedite freight flows. 
Railroads are working with their customers to better understand their 
needs and adjusting equipment use to improve their operations, 
including pulling equipment out of storage, prepositioning resources 
where needed regionally to meet customer demand, maximizing the 
effective utilization of truck chassis, and even re-routing traffic 
from one terminal to another or reopening shuttered terminals to 
minimize congestion.
    The pandemic's ongoing impacts on commerce will require dedication 
and hard work to overcome. For their part, railroads will continue to 
work with their customers and supply chain partners and use all the 
tools at their disposal to ensure they continue to meet the nation's 
current and future freight transportation demand. This is an evolving 
process, but railroads know how important it is and will continue to 
strive for further improvements.
                            Workforce Needs
    Railroads greatly appreciate the skill and professionalism of their 
employees. But, like firms in virtually every industry today and 
despite offering very competitive pay and benefits, railroads face 
significant difficulty in attracting and retaining enough qualified 
employees. In 2020, the average U.S. Class I freight rail employee 
earned total compensation of $135,700. By contrast, the average 
compensation of a U.S. employee in 2020 was $87,000, just 64 percent of 
the rail industry's compensation.
    The labor market today is as tight as it has ever been, and 
railroads face intense competition for potential employees. According 
to the Bureau of Labor Statistics, the overall national unemployment 
rate in March 2022 was 3.6 percent, barely above its 40-year low of 3.5 
percent immediately prior to the pandemic. There were approximately 
11.3 million job openings as of February 2022, more than 60 percent 
higher than in a typical month before the pandemic. In recent months, 
there have been an unprecedented 1.8 job openings for every unemployed 
person. The transportation, warehousing, and utilities industries had 
489,000 job openings in February 2022. Manufacturing had another 
808,000 job openings, and construction 381,000. Men and women drawn to 
these industries are often the same ones who might be interested in 
railroad operating jobs.
    Railroads are working extremely hard to fill available openings 
through hiring bonuses, refer-a-friend payments, and other incentives. 
Railroads are also encouraging their current employees to help meet 
demand, including through vacation buybacks and incentive payments to 
move to high-demand regions of the network.
    Railroads are making progress. The number of ``train and engine'' 
employees on Class I railroads--the men and women in the locomotive 
cabs operating trains--was higher in March 2022 than in nearly two 
years. Individual railroads have hundreds of people in their training 
pipelines and are confident that workforce issues will become 
increasingly less vexing in the months ahead.
    Some have suggested that if railroads had employed extra workers 
pre-pandemic, they would not be facing labor shortages now. However, it 
is important to remember that the number of workers employed by 
railroads pre-pandemic would not have changed the number of workers 
needed for railroads to operate during the pandemic. Additional workers 
pre-pandemic would simply have increased the number of workers who were 
furloughed during the pandemic and would likely have little impact on 
current labor shortages.
    Finally, the particularities of the railroad operating and 
regulatory environment present unique hiring, training, and retention 
challenges not faced by many other industries when addressing the 
current labor shortage. Hiring and training new railroad operating 
employees is a time- and resource-intensive process that is heavily 
regulated by the Federal Railroad Administration (FRA). Before 
performing duties as a qualified train crew member, prospective 
employees must undergo rigorous classroom, field, and on-the-job 
training and be able to pass applicable railroad operating and safety 
rules exams. They must also demonstrate to railroad managers that they 
can perform their real-world duties in a safe, regulatory-compliant 
manner and show that they are qualified on the physical characteristics 
of the territories over which they operate. All told, this process 
takes a minimum of several months, and the overall path to becoming a 
conductor and eventually a certified locomotive engineer could take 
years. Railroads need a constructive partner at the FRA in approving 
innovative, efficient ways to train and certify new employees without 
impacting safety.
                          Role for Regulators
    Railroads understand the legitimate interest of the STB and other 
policymakers in current rail service issues. In fact, just two weeks 
ago railroads participated in the STB's two-day hearing that examined 
this matter, along with a broad group of stakeholders, including rail 
customers, rail labor, policymakers, and financial analysts. During 
that hearing, railroads respectfully suggested that members of the STB 
and other policymakers should exercise caution and refrain from taking 
actions in haste that could inadvertently impede the ability of 
railroads to be responsive to customer needs.
    For example, some have claimed that implementing a ``forced 
switching'' rule would improve rail service. As I testified before this 
Subcommittee earlier this year, that is incorrect. There is no reason 
to believe forced switching would improve the service challenges 
railroads are facing today. Instead, forced switching would add 
tremendous operational complexity, negatively impact rail operations, 
and undermine the incentives for private infrastructure investment.
                               Conclusion
    The most immediate task of our nation's railroads is to help our 
economy recover and reach its full potential. Railroads are well aware 
that their service levels are not currently what they, their customers, 
or policymakers want them to be. And as I just noted, the STB has been 
very engaged on service issues: in addition to the two-day rail service 
hearing, in the last several months, the Board proposed a revised 
emergency service rule and invited comments from stakeholders on first-
mile/last-mile data issues, all while considering other non-service-
related issues. We hope that the STB will continue to engage with the 
railroads in a constructive and thoughtful way as we work through this 
phase of recovery. Resolving these challenges will require flexibility, 
innovation, and determination--characteristics the rail industry and 
its employees have demonstrated many times in the past.

                                 
Letter of April 21, 2022, from the Agricultural Transportation Working 
Group to the Surface Transportation Board, Submitted for the Record by 
                     Hon. Eric A. ``Rick'' Crawford
                                                    April 21, 2022.
Surface Transportation Board,
395 E St., S.W.,
Washington, DC 20423.
    Dear Surface Transportation Board Members:
    The undersigned members of the Agricultural Transportation Working 
Group (ATWG) strongly urge the Surface Transportation Board (Board) to 
immediately seek resolution of the current nationwide freight rail 
service challenges and take appropriate measures to deter, and 
hopefully prevent future service failures of the magnitude currently 
being experienced.
    The farmers, ranchers, food and beverage manufacturers, processors, 
package suppliers, farm supply dealers and agricultural product 
marketers that comprise our collective memberships support and sustain 
millions of American jobs. Our members provide safe, abundant, 
affordable, and sustainably produced human and animal food, fiber and 
agricultural products that are essential to the health and well-being 
of tens of millions of U.S. and global consumers. Competitive and 
reliable railroad freight transportation is essential to meet these 
objectives.
    Reliable and cost-competitive railroad freight service is essential 
because U.S. agricultural producers and agribusinesses compete in the 
global market for agricultural products ranging from raw commodities to 
value-added products, such as meat, poultry, dairy, cotton and 
biofuels. Economic multipliers associated with the U.S. food and 
agricultural sector accrue to the broader U.S. economy, particularly in 
terms of job creation and economic growth. According to data from the 
U.S. Department of Commerce, as well as analysis conducted by the U.S. 
Department of Agriculture, the food and agricultural sector contributes 
$1.1 trillion to the U.S. gross domestic product--a 5 percent share--
and supports more than twenty-two million full- and part-time U.S. 
jobs--constituting 11 percent of total U.S. employment.
    The current inability of several Class I carriers to provide 
reliable rail service to their customers is impacting farmgate 
commodity prices and elevating food prices for consumers. Neither of 
these outcomes is beneficial for individual Americans and the U.S. 
economy. While several factors contribute to these carriers' rail 
service challenges, we consistently hear that significant reductions in 
train crew numbers and other personnel have severely hamstrung the rail 
carriers' ability to maintain their prior levels of service, to 
overcome the typical day-to-day issues that affect railroad service 
plans, and to respond to changes in rail freight demand. Moreover, the 
mismatch between the importance of reliable and cost-effective freight 
rail transportation to our nation's economy and the lack of effective 
competition between the Class I railroads remains of great concern to 
the ATWG members.
    The ATWG believes future service challenges can be deterred, or 
even prevented, through increased competition, and by implementing 
financial incentives for railroads to perform more efficiently 
utilizing the same concepts that railroads use to incentivize their 
customers to be more efficient. For this reason, the ATWG applauds the 
Board's recent decision to accept public comments on the Petition for 
Rulemaking in Docket No. EP 768 filed by the North America Freight Car 
Association, the National Grain and Feed Association, the Chlorine 
Institute, and the National Oilseed Processors Association. The 
petition asks the Board to adopt rules that will permit rail customers 
to levy financial penalties on railroads for their inefficient use of 
private railcars, which make up many of the cars that haul processed 
agricultural commodities. The ATWG believes the Board should also 
explore other ways to utilize these principles to incentivize the Class 
I railroads to provide more reliable service for rail carrier provided 
railcars that haul most of the raw agricultural commodities.
    We urge the Board to expeditiously conclude its work in Docket No. 
EP 711 (Sub-No. 1) for the purpose of establishing reciprocal switching 
rules that enable the creation of rail-to-rail competition at 
qualifying interchanges between carriers. We also believe rail service 
will improve through additional data reporting, such as first-mile, 
last-mile rail service reporting, and by the Board developing guidance 
on the Board's expectations for rail carriers in meeting their 
statutory obligation to provide service upon reasonable request 
pursuant to 49 U.S.C. Sec. 11101. Lastly, we believe some rail service 
challenges can be forestalled by requiring all the Class I railroads to 
develop annual rail service assurance plans, which will provide a basis 
for the Board and industry stakeholders to conduct annual assessments 
of intended service versus actual service, and to identify and address 
potential issues that otherwise may result in future service 
deficiencies.
    The ATWG urges the Board to quickly adopt these proposals to 
encourage better freight rail service now and in the future.
        Sincerely,

               Agricultural Transportation Working Group

Agricultural Retailers Association.
American Farm Bureau Federation.
American Feed Industry Association.
American Sheep Industry Association.
American Soybean Association.
American Sugar Alliance.
Consumer Brands Association.
Corn Refiners Association.
Equipment Dealers Association.
Forest Resources Association.
Fresh Produce Association of the Americas.
Growth Energy.
Hardwood Federation.
Institute of Shortening and Edible Oils.
Leather and Hide Council of America.
National Aquaculture Association.
National Association of Wheat Growers.
National Corn Growers Association.
National Cotton Council.
National Council of Farmer Cooperatives.
National Farmers Union.
National Grain and Feed Association.
National Grange.
National Milk Producers Federation.
National Oilseed Processors Association.
National Pork Producers Council.
North American Meat Institute.
North American Millers' Association.
Pet Food Institute.
Specialty Soya and Grains Alliance.
The Fertilizer Institute.
USA Rice.
U.S. Wheat Associates.

CC:  President Joseph R. Biden
     Tom Vilsack, Secretary of U.S. Department of Agriculture
     Pete Buttigieg, Secretary of U.S. Department of Transportation
     Debbie Stabenow, Chair, Senate Agriculture Committee
     John Boozman, Ranking Member, Senate Agriculture Committee
     David Scott, Chair, House Agriculture Committee
     Glenn ``GT'' Thompson, Ranking Member, House Agriculture Committee
     Maria Cantwell, Chair, Senate Commerce Committee
     Roger Wicker, Ranking Member, Senate Commerce Committee
     Peter DeFazio, Chair, House Transportation and Infrastructure 
Committee
     Sam Graves, Ranking Member, Transportation and Infrastructure 
Committee

                                 
Statement of Patricia Davitt Long, President, Railway Supply Institute, 
       Submitted for the Record by Hon. Eric A. ``Rick'' Crawford
    Chairman Payne, Ranking Member Crawford, and Members of the 
Subcommittee:
    Thank you for convening this hearing to focus on the Board Member 
views on Surface Transportation Board Reauthorization and for the 
opportunity to submit comments for the record.
    As way of background, the Railway Supply Institute (RSI) is an 
international trade association representing more than 160 companies 
involved in the manufacture of goods and services in the locomotive, 
freight car, maintenance of way, communications and signaling, and 
passenger rail industries. RSI members provide critical products to 
Class I and short line freight railroads, shippers, Amtrak, and transit 
authorities nationwide and work with these customers to create new 
products or services that drive enhancements in safety and efficiency 
across their networks.
    These systems are supported by an extensive, domestic railway 
supply industry that has been a dynamic and vital part of the U.S. 
economy for more than 200 years, encompassing 125,000 jobs across all 
50 states and paying an average wage 40 percent higher than the 
national average.\1\ This industry also contributes billions of dollars 
to the national economy every year, producing $10.7 billion in federal 
taxes and over $6 billion in state and local taxes every year.\2\ 
Without this robust domestic rail supply industry, our nation's 
passenger and freight railroads simply could not meet their customers' 
needs.
---------------------------------------------------------------------------
    \1\ Tracking the Power of Rail Supply, The Economic Impact of 
Railway Suppliers in the U.S. https://www.rsiweb.org/Files/EIS%202018/
RSI-Infographic%20FINAL.pdf
    \2\ Id.
---------------------------------------------------------------------------
    As you may know, the Railroad-Shipper Transportation Advisory 
Council (RSTAC) is a stakeholder committee of the Surface 
Transportation Board (the Board) which was established pursuant to the 
ICC Termination Act of 1995 (Public Law 104-88, 109 Stat. 803). The 
Council consists of senior officials representing large and small 
shippers, and large and small railroads as well as ex-officio members 
including the Secretary of the Department of Transportation as well as 
the members of the Board.
    The RSTAC also provides advice on regulatory and legislative policy 
matters to the Board, the Secretary of Transportation, the Senate 
Committee on Commerce, Science and Transportation, and the House 
Transportation and Infrastructure Committee.
    The significant transportation policy matters upon which the RSTAC 
advises are focused, with particular attention, to issues of importance 
to small shippers and small railroads including, pursuant to the 
statute; car supply, rates, competition, and effective procedures for 
addressing legitimate shipper and other claims.
    However, for nearly three decades since the forming of the RSTAC, 
freight railcar ownership has shifted away from railroads, with non-
railroad entities now owning 74% of the entire freight railcar fleet. 
From time to time the RSTAC has invited freight railcar lessors to make 
presentations at its meetings, however discussions about car 
availability and other similar matters regularly take place without any 
representation from lessors, who as owners of 57% of the North American 
fleet are best informed about fleet composition. Only an Act of 
Congress can provide freight railcar lessors, and the RSTAC, with any 
regular representation.
                  About Independent Leasing Companies
      57% of the 1.6 million freight railcars in North America 
are owned by non-railroad, independent leasing companies. Of the 
remainder, 17% are owned by shippers, 16% by railroads, and 10% by TTX 
Company.
      Today, the replacement value of the non-railroad-owned 
railcar fleet is estimated to be in excess of $100 billion.
                       Proposed Technical Change
      The RSTAC was created by statute and as such is not 
subject to the Federal Advisory Committee Act. Thus, the only way for 
lessors to be regular participants in RSTAC meetings is to amend the 
statute to provide for such representation. RSI is proposing a 
technical change to 49 U.S. Code Sec.  1325. Railroad-Shipper 
Transportation Advisory Council which would add two non-voting seats to 
the RSTAC that shall be comprised of representatives of freight railcar 
lessors.

    This proposed change would ensure that the RSTAC's advice to the 
Secretary, the Board, and to Congress, consists of first-hand knowledge 
and input from the constituency which owns the majority of freight 
railcars in North America.
                               Conclusion
    RSI members will continue investing and doing all we can to support 
our railroad and shipper customers in serving the mobility and economic 
development needs of communities across the country. We appreciate the 
opportunity to provide these recommendations on critical issues 
affecting our industry and will continue working with Members of 
Congress to formulate policies that enhance rail safety, security, and 
efficiency.
                                                         Appendix A
                    Proposed changes to 49 USC 1325.
            Railroad-Shipper Transportation Advisory Council
SEC. Railroad-Shipper Transportation Advisory Council amendments.
    (a)  Subsection (a) of section 1325 of title 49, United States 
Code, is amended by striking ``19'' and inserting in lieu thereof 
``21'',
    (b)  Paragraph (1) of such subsection 1325 (a) of title 49, United 
States Code is amended by inserting ``the railcar leasing,'' 
immediately before ``and rail shipper industries.'',
    (c)  Paragraph (3) of such subsection 1325 (a) of title 49 United 
States Code, is amended by;
      (1)  striking ``6'' and inserting in lieu thereof ``8'',
      (2)  striking ``Chairman).'' and inserting in lieu thereof 
``Chairman) and''
      (3)  adding at the end thereof the following new subparagraph,
        ``(C)  two shall be representatives of rail car lessors.'',
    (d)  renumbering paragraphs ``(4)'' and ``(5)'' as paragraphs 
``(5)'' and ``(6)'' respectively, and--
    (e)  inserting the following new paragraph (4)--
      ``(4)  For purposes of this section the terms ``rail car 
leasing'' and ``rail car lessors'' shall mean entities--
        ``(A)  that own a variety of different types of rail cars and 
lease such rail cars to railroads or shippers under contracts that 
require the lessor to provide maintenance and administrative services, 
and
        ``(B)  that are not owned or controlled by an entity or 
entities which are rail carriers or shippers.''

                                 
  Position Paper from the Railway Supply Institute, Submitted for the 
                Record by Hon. Eric A. ``Rick'' Crawford
     Support Railcar Lessor Representation on the Railroad-Shipper 
                Transportation Advisory Council (RSTAC)
    ISSUE: The RSTAC currently lacks representation from independent 
freight railcar lessors. RSI supports the addition of two non-voting 
seats to the RSTAC to provide representation for freight railcar 
lessors. This would ensure the Council's advice to USDOT, the STB, and 
Congress has the first-hand knowledge and input from the constituency 
that owns the majority of freight railcars in North America.
    BACKGROUND: The Railroad-Shipper Transportation Advisory Council 
(RSTAC) is a statutory Council that provides advice on regulatory, 
policy, and legislative matters to the Surface Transportation Board 
(STB), the Secretary of Transportation, the Senate Committee on 
Commerce, Science and Transportation, and the House Transportation and 
Infrastructure Committee. The Council consists of senior officials 
representing large and small shippers and railroads, as well as ex-
officio members including the Secretary of the Department of 
Transportation and the five Surface Transportation Board members.
    For nearly three decades since the forming of the RSTAC, freight 
railcar ownership has shifted away from railroads, with non-railroad 
entities now owning 74% of the entire freight railcar fleet. However, 
leasing companies still lack any form of representation on the Council. 
Only an Act of Congress can provide freight railcar lessors with 
nonvoting representation on the RSTAC.
About the RSTAC
      The Railroad-Shipper Transportation Advisory Council 
(RSTAC) was established pursuant to the ICC Termination Act of 1995 
(Public Law 104-88, 109 Stat. 803) to advise the STB, USDOT, and 
relevant congressional committees on key policy issues affecting the 
industry.
      The RSTAC is directed by statute to provide input on 
``rail transportation policy issues it considers significant, with 
particular attention to issues of importance to small shippers and 
small railroads including car supply [emphasis added], rates, 
competition, and effective procedures for addressing legitimate shipper 
and other claims.''
      The RSTAC is currently comprised of a mix of 19 voting 
and non-voting members. 9 voting seats are split evenly between small 
shippers and Class II or III railroads, while the remaining non-voting 
seats are currently split between the ex officio members, 
representatives of the Class I railroads, and representatives of large 
shipper organizations.
About Independent Leasing Companies
      57% of the 1.6 million freight railcars in North America 
are owned by non-railroad, independent leasing companies. Of the 
remainder, 17% are owned by shippers, 16% by railroads, and 10% by TTX 
Company.
      Today, the replacement value of the non-railroad-owned 
railcar fleet is estimated to be in excess of $100 billion.
Proposed Amendment
      A proposed amendment to 49 U.S. Code Sec.  1325. 
Railroad-Shipper Transportation Advisory Council would add two non-
voting seats to the RSTAC that shall be comprised of representatives of 
freight railcar lessors.

                                Appendix

                              ----------                              


 Questions from Hon. Peter A. DeFazio to Martin J. Oberman, Chairman, 
                      Surface Transportation Board

    Question 1. The Class Is finally acknowledge they have a service 
problem, but in statements made before us three months ago and your 
Board a month ago, they don't acknowledge that there is a fundamental 
problem with the industry as a result of Wall Street's influence. Your 
testimony states that the STB has sole authority over railroad mergers 
and acquisitions.
    Question 1.a. Do you have the authority to review the acquisition 
if a non-railroad carrier seeks to purchase a Class I, or the ever-
consolidating short-line railroad industry?
    Answer. We do not presently have the authority to review the 
acquisition of a Class I carrier by a non-railroad carrier where the 
non-railroad carrier does not otherwise control another rail carrier. 
See 49 U.S.C. Sec.  11323(a). Where the non-railroad carrier already 
controls another railroad carrier, the Board has authority to review 
the acquisition of other railroads by the non-railroad carrier. 
Accordingly, the Board has authority to review the acquisition of a 
short-line railroad carrier by a non-railroad carrier holding company 
if the holding company already controls another railroad carrier.

    Question 1.b. Based on what has happened with Wall Street's focus 
on operating ratios and its subsequent disastrous impact to rail 
service, do you think that is good for railroad shippers or American 
consumers for the STB to not have this authority?
    Answer. In my view, the Board should have such authority so that 
the Board can consider whether any such acquiror of a Class I railroad 
will prioritize things like shareholder returns over service when 
determining whether the merger is consistent with the public interest 
under 49 U.S.C. Sec.  11324.

    Question 2. We are now a month out from your emergency orders to 
require service recovery plans and additional reporting information. 
You stated at the time that the action to require this additional 
information ``may not be the final result'' and that the Board's 
decision was ``an immediate step.'' You also highlighted the rail 
service problems causing inflationary pressures on both food and fuel. 
These are emergencies.
    Question 2.a. Is the Board preparing to take additional corrective 
action?
    Answer. Yes, on June 13 the Board entered a follow up order to its 
May 6 order critiquing the carriers ``service recovery plans'' and 
ordering corrections to the initial filings by the Class Is and 
additional information. We will carefully monitor the carriers' actual 
conduct in attempting to recover for their service deficiencies. I 
would like the Board to take action soon on the proposal in Revisions 
to Regulations for Expedited Relief for Service Emergencies, EP 762, 
which, if adopted, would make changes to the Board's processes for 
providing relief in times of emergency. In addition, the Board is 
advancing several rulemakings that could have the effect of increasing 
the leverage of rail users to secure better rail service: Final Offer 
Rate Review, EP 755, a rulemaking that would establish a final offer 
procedure for challenging railroad rates in small rate disputes; Joint 
Petition for Rulemaking to Establish a Voluntary Arbitration Program 
for Small Rate Disputes, EP 765, a rulemaking that would establish an 
arbitration procedure for challenging railroad rates in small rate 
disputes; and Reciprocal Switching, EP 711, a rulemaking that would 
amend the Board's regulations concerning reciprocal switching. These 
proposed rules, if adopted, could provide additional tools to 
ameliorate the recent service problems. The Board is also considering 
using its authority to permanently collect more detailed information on 
service reliability and has been considering comments recently filed on 
this topic from interested parties.

    Question 2.b. Will you seek to use your directed service authority 
at 49 USC 11123?
    Answer. As of this writing, the Board has received a petition for a 
directed service order under 49 U.S.C. Sec.  11123, and on June 17 
issued an order granting that petition in part. I will not hesitate to 
encourage the Board to utilize its authority under this statute when 
appropriate to remedy serious service deficiencies.

    Question 2.c. Why has the Board not issued civil penalties 
authorized at 49 USC 11901?
    Answer. In its June 13 order issued in Docket EP 770 (Sub-No. 1), 
the Board threatened civil penalties against certain carriers who 
violated the Board's prior order requiring the production of service 
recovery plans. The Board has indicated its willingness to issue 
penalties under 49 U.S.C. Sec.  11901 in situations where rail carriers 
have violated a Board statute, regulation, or a Board order and when it 
determines that penalties will provide the correct incentive. Another 
incentive would be for rail users to seek monetary damages for 
violation of the common carrier obligation, unreasonable practices, or 
breach of contract.

    Question 3. Rail labor and rail shippers have rarely agreed on 
things, but they both recommend that we do a better job of defining the 
common carrier obligation. It is my understanding that railroad tariffs 
and contracts do not include agreed upon service delivery metrics or 
remedies that can be pursued when those service delivery metrics are 
not met.
    Question 3.a. Does erratic service constitute meeting the common 
carrier obligation?
    Answer. Depending on the specific circumstances of the particular 
shipper and the reported service failures, in my view, erratic service 
over a period of time could rise to the level of violating the common 
carrier obligation.

    Question 3.b. What about forcing shippers to accept less frequent 
service?
    Answer. Similarly, in my view, this is a very fact specific inquiry 
and under appropriate circumstances, less frequent service forced upon 
a shipper could constitute a common carrier violation.

    Question 3.c. How about not showing up at all?
    Answer. Again, depending on the circumstances, a carrier's failure 
to provide service upon request may result in violation of the common 
carrier obligation.

    Question 3.d. Should tariffs or contracts with railroads include 
service delivery requirements and agreed upon remedies when the service 
delivery requirements are not met?
    Answer. Yes, provided the service delivery requirements are 
sufficiently detailed to meaningfully stipulate the service that must 
be performed. To be clear, while I support the inclusion of service 
requirements in rail transportation contracts, review and enforcement 
of those agreements is generally within the jurisdiction of the courts, 
not the Board.

    Question 4. Both the USDOT and the USDA, along with a Wall Street 
analyst who testified at your emergency rail service hearing, suggested 
that financial incentives should be part of the solution to our current 
rail service problems.
    Question 4.a. How often has the STB assessed fines for poor 
service?
    Answer. The STB has exercised its authority to impose penalties 
only once since it was created in 1996. In that instance, the STB 
imposed a $250,000 penalty on a railroad carrier for knowingly 
violating Board orders requiring that the carrier provide certain 
information on blocked crossings. The Board imposed this penalty under 
49 U.S.C. Sec.  11901(a). The total amount of the penalty reflected the 
fact that the Board had imposed a penalty for multiple days during 
which the violation remained unabated.

    Question 4.b. Why aren't you assessing these fines more often?
    Answer. The Board can issue fines and penalties when a rail carrier 
has violated a Board statute, regulation, or a Board order. In some 
instances, which are infrequent, a carrier subject to our jurisdiction 
will fail to fully adhere to our licensing authority, for example, and 
we have used the threat of fines to help bring that carrier into 
compliance. Shippers and rail users, whether in service or rate 
complaints, are generally more interested in seeking redress through 
monetary damages as compensation for their injuries, not the imposition 
of monetary penalties, which are paid to the U.S. Treasury.

    Question 4.c. Are there other financial incentives we should be 
considering in reauthorization, such as increasing fines or something 
else?
    Answer. I would support Congress increasing the dollar amount of 
fines authorized under 49 U.S.C. Sec.  11901, and providing that the 
Board can impose those fines for violation of the common carrier 
obligation without, under the appropriate circumstances, requiring a 
showing of intent.

    Question 4.d. Railroads have the ability to assess demurrage and 
accessorial fines and yet two-thirds of the nation's railcars are 
privately-owned or leased. There does not seem to be any financial 
incentive for railroads to provide good service. Should railcar owners 
have the ability to assess damages when the railroads do not provide 
promised service in a timely way?
    Answer. This very issue--whether private car owners and lessors 
should be entitled to compensation from railroads for delay in 
returning private cars--is pending before the Board. The Board issued a 
decision on April 1, 2022 and sought public and stakeholder comment. 
The comment period closes on August 1, 2022. I look forward to 
reviewing the comments and moving forward with this proceeding informed 
by the views we receive.

 Questions from Hon. Stephen F. Lynch to Martin J. Oberman, Chairman, 
                      Surface Transportation Board

    Question 1. I want to know more about the environmental impacts of 
rail and how the board can impact climate change. Rail is three to four 
times more fuel efficient than trucks, on average, meaning moving 
freight by rail rather than truck reduces greenhouse gas emissions by 
up to 75 percent. I understand several companies would like to ship by 
rail as a way of meeting their own environmental goals. I believe we 
need policies that encourage more freight to move by rail because what 
we hear is happening is that Wall Street is pushing the railroads to 
only carry the most profitable freight leaving companies scrambling to 
move their freight by truck.
    Question 1.a. Mr. Oberman, how do we make sure we're moving more 
freight by rail if the freight railroads themselves aren't aggressively 
seeking to grow?
    Answer. The Board can encourage moving freight by rail by providing 
counter incentives to the Wall Street pressures you identified in your 
question. While I understand the railroad carriers' efforts to provide 
a return to their shareholders, the carriers are nonetheless part of a 
regulated industry which requires that they also conduct their 
businesses in the public interest. They have market power with respect 
to certain geographies and commodities, and with that power comes 
important public responsibilities. There is a point where the drive for 
ever greater shareholder profits cannot be permitted to corrode the 
public interest. In my view, the carriers have gone beyond that point 
in recent years, and I have been encouraging the Board and its staff to 
explore mechanisms which will create a better balance within the 
railroad carriers' incentive structure so that they more appropriately 
consider the needs of present and potential rail customers in order to 
move more freight from highways to rail.

    Question 1.b. What is the STB's role in that?
    Answer. The Board's broad responsibility is to protect the public 
interest in having a reliable, safe, efficient, and accessible 
interstate rail network. The Board does so by, among other things, 
enforcing the carriers' common carrier obligation, by providing a forum 
for captive shippers to challenge unreasonable rates, by closely 
scrutinizing the potential competitive effects and other impacts to the 
public of railroad combinations, and by providing transparency where 
appropriate.

    Question 1.c. Is it enforcing their common carrier obligation?
    Answer. Yes, but we can and should do more and, as I stated at the 
hearing, I am actively exploring ways to put more teeth in the common 
carrier obligation through regulations and case decisions.

   Questions from Hon. Peter A. DeFazio to Patrick J. Fuchs, Member, 
                      Surface Transportation Board

    Question 1. If Amazon, UPS, FedEx, and even the USPS can track a 
package, why can't the Class I railroads spend a little bit of their 
record profits and provide customers accurate tracking and arrival 
estimates? The technology exists, so why hasn't STB mandated that?
    Answer. Current rail service problems are exacerbated by imprecise 
tracking data and inaccurate arrival estimates. Many rail customers 
need greater supply chain visibility to better plan their operations 
and mitigate the effects of delays.
    I am aware of several rail carrier initiatives to improve 
customers' visibility. First, some carriers and suppliers have created 
a coalition,\1\ called RailPulse, to create a neutral telematics 
platform with car-based GPS and other sensor-derived data. With 
assistance from the Federal Railroad Administration and the 
Commonwealth of Pennsylvania, RailPulse has recently partnered with 
RailInc to operate the platform and started work on its pilot 
iteration. Second, certain Class I rail carriers are linking 
locomotive-based GPS data to specific cars in the train consist. Third, 
some carriers, and independent companies, are building new application 
programming interfaces to integrate different data sources and provide 
an improved user experience. Finally, on a longer-term basis, some 
companies, in collaboration with rail carriers, are working to develop 
battery-electric rail cars that would provide real-time tracking data. 
In short, rail carriers are deploying capital and pursuing 
opportunities to upgrade their tracking technology.
---------------------------------------------------------------------------
    \1\ The coalition now includes: one of the two largest carriers 
both in the East (Norfolk Southern) and in the West (Union Pacific); 
two of the largest holders of short line rail carriers (Genesee & 
Wyoming and Watco); and three major suppliers (GATX Corporation, 
TrinityRail, and The Greenbrier Companies).
---------------------------------------------------------------------------
    When I have questioned carriers, suppliers, and customers as to why 
progress has not happened sooner, most state that carriers' automatic 
equipment identification (AEI) system, which uses radio frequency tags 
to track rolling stock as it passes trackside readers installed in many 
areas, reduces the marginal benefit of GPS or similar changes. To be 
clear, because the AEI system has gaps in coverage and therefore in the 
provision of real-time data, rail customers would still benefit from 
more comprehensive car tracking. Beyond the existence of the AEI 
system, many state that characteristics of the rail industry create 
complications for visibility enhancements, such as the frequency by 
which cars traverse on multiple carriers (potentially implicating 
separate carrier platforms), the different ownership structures of 
cars, and the security requirements of a mode that uses fixed guideways 
to transport a significant amount of hazardous chemicals. However, 
while these challenges may have slowed the deployment of visibility 
improvements, the aforementioned initiatives suggest the industry is 
now making progress in the absence of a mandate.
    That is not to say the Board does not have an important role in 
overseeing rail service and practices. The Board has taken action to 
increase information available to customers. In response to current 
service problems, the Board's order on service recovery plans included 
a requirement that certain carriers report, for the first time, service 
reliability indicators--and six-month performance targets \2\--on trip 
plan compliance \3\ and first-mile / last-mile service.\4\ Separately, 
after considering rail customers' concerns about carriers' demurrage 
charges, which are affected by rail service, the Board issued a final 
rule requiring rail carriers to include on or with their demurrage 
invoices the original estimated time of arrival of each car, as well as 
other car information.\5\ The Board is also continually examining ways 
to improve our data collection, and it recently requested comment on 
increasing the transparency of first-mile / last-mile service data.\6\
---------------------------------------------------------------------------
    \2\ Urgent Issues in Freight Rail Serv.--R.R. Reporting (May 6 
Order), EP 770 (Sub-No. 1), slip op. at 4 (STB served May 6, 2022) 
(requiring ``BNSF, CSXT, NSR, and UP to file service recovery plans 
explaining the specific actions that each carrier will take to improve 
service and the specific metrics by which it will evaluate its progress 
toward such improvements . . . [and including], at a minimum, a time 
series of key service performance indicators for the past 36 months 
and, for each indicator, a target that the carrier expects to hit at 
the end of the six-month reporting period'' (citations omitted)).
    \3\ The May 6 Order requires all Class I carriers to submit on a 
weekly basis for six months beginning May 18, 2022: ``(i) For rail cars 
moving in manifest service, the percentage of cars constructively or 
actually placed at destination within 24 hours of the original 
estimated time of arrival. (ii) For the following types of unit trains 
(grain unit, coal unit, automotive unit, crude oil unit, and ethanol 
unit), the percentage of trains constructively or actually placed at 
destination within 24 hours of the original estimated time of arrival. 
(iii) For intermodal traffic, the percentage of trains that arrive at 
destination within 24 hours of the original estimated time of arrival. 
For movements involving more than one rail carrier in each of the 
specified categories, the destination for the upstream carrier shall be 
treated as the interchange location with the subsequent railroad.'' May 
6 Order, EP 770 (Sub-No. 1), slip op. at 6 (footnote omitted).
    \4\ The May 6 Order requires all Class I carriers to submit on a 
weekly basis for six months beginning May 18, 2022: ``For each 
operating division and for the system, the percentage of scheduled 
spots and pulls that were fulfilled.'' May 6 Order, EP 770 (Sub-No. 1), 
slip op. at 6.
    \5\ Demurrage Billing Requirements, EP 759 (STB served April 6, 
2021).
    \6\ First-Mile / Last-Mile Service, EP 767 (STB served Sept. 2, 
2021) (seeking information on potential first-mile / last-mile (FMLM) 
service issues and the design of potential metrics to measure such 
service).
---------------------------------------------------------------------------
    The regulatory process for an industry-wide tracking technology 
mandate, which would involve operational, economic, and legal 
considerations, would take a significant amount of time and staff 
resources during a period of accelerating technological progress in the 
industry as well as urgent on-going proceedings at the Board. As such, 
I think the Board's focus and resources are best directed at continuing 
to further immediate public accountability for service reliability and 
expeditiously and fairly adjudicating the proceedings before it, rather 
than mandating industry-wide tracking technology. However, I expect the 
Board would consider the accuracy of tracking and arrival estimates if 
presented in case-specific service and practice proceedings.

    Question 2. A number of shippers whose commodities are currently 
exempt from the STB's purview would like to be able to file a complaint 
with the STB.
    Do you think it makes sense to review the list of commodity 
exemptions every five years?
    Answer. The Board is currently conducting a review of its commodity 
exemptions, and I have carefully considered rail customer comments on 
that pending proceeding.\7\ As a general matter, the Board should 
continually evaluate market conditions and other industry changes, 
particularly as they relate to underlying policy rationales for 
existing regulations. The Board should also expeditiously and fairly 
consider requests for regulatory changes.
---------------------------------------------------------------------------
    \7\ See generally, Docket No. EP 704 (Sub-No. 1), Review of 
Commodity, Boxcar, & TOFC/COFC Exemptions.
---------------------------------------------------------------------------
    Beyond our on-going review, the Board has acted on both class and 
individual exemptions. For example, the Board issued a final rule that 
revoked, in part, the class exemption that covered rail transportation 
of certain agricultural commodities so that the exemption would not 
apply to the regulation of demurrage, thereby making the agricultural 
commodities exemption consistent with similar class exemptions covering 
non-intermodal rail transportation.\8\ In response to individual rail 
customer requests, the Board also has enabled further consideration of 
complaints by finding partial revocation of certain exemptions, 
applicable to particular customers, necessary to carry out the rail 
transportation policy at 49 U.S.C. 10101.
---------------------------------------------------------------------------
    \8\ Exclusion of Demurrage Regulation from Certain Class 
Exemptions, EP 760 (STB served Feb. 28, 2020).
---------------------------------------------------------------------------
    I expect our on-going exemption review will address current 
circumstances, and the Board can address changing circumstances on its 
own initiative (based on continuous market and industry evaluation) or 
in response to petitions for rulemaking or individual petitions for 
exemption revocation. Through these available processes, the Board can 
ensure its effectiveness by continuing to improve its data analytics 
capability, transportation industry expertise, and data collection, so 
that the Board can respond nimbly--on a continuous basis--to changing 
circumstances and individual petitions. In addition, when its review is 
not cabined to a particular set of regulations, the Board might be more 
open to considering the effects of a changed circumstance on its 
regulations more broadly. As a result, the Board's focus and resources 
should be directed toward increased effectiveness in continuous market 
and industry evaluation, which would render unnecessary a fixed 
interval review on a specific set of regulations.

   Question from Hon. Stephen F. Lynch to Robert E. Primus, Member, 
                      Surface Transportation Board

    Question 1. For intercity rail, I want to be certain we are 
ensuring that intercity rail is safe and that we can expand services. 
Since the STB has economic and certain approval authorities for 
intercity passenger rail, I want to make sure that areas that the 
average rider would consider important are deemed important by the STB.
    Will the STB conduct on-time performance investigations even 
without being petitioned? Which routes do you anticipate investigating?
    Answer. As a strong supporter of passenger rail, I share both your 
interest in the expansion of intercity passenger rail service and 
concerns related to its often poor On-Time Performance (OTP) metrics. 
Across the country, there is a real desire to expand intercity 
passenger rail service, for it holds the promise of not just connecting 
communities, but potentially generating growth opportunities for areas 
that today are cut off from economic centers in their respective state 
and/or region. From the very beginning of his Administration, President 
Biden aptly prioritized the need to build a more robust national 
intercity passenger rail network and Congress, in a bipartisan and 
bicameral manner, subsequently provided the necessary funding in the 
Infrastructure Investment and Jobs Act, to bring this vision into 
reality.
    However, the ultimate success of this effort will not be predicated 
on the President's vision, or the infusion of capital provided by 
Congress. Rather, it will be determined by the cooperation of the 
freight railroads who control most of the rail network in the country 
and who, by and large, have not been amicable partners when it comes to 
allowing intercity passenger rail service to operate efficiently along 
its lines. At issue is preference. Though the Rail Passenger Service 
Act of 1970, which created Amtrak, specifically called for intercity 
and commuter rail service provided for or by Amtrak to be given 
preference over that of freight trains, to date, that has not been the 
case. In fact, freight train interference is the leading cause of rail 
passenger delays and has been so since Amtrak was brought into 
existence.
    In the Passenger Rail Investment and Improvement Act of 2008, 
Congress authorized the Board to investigate and adjudicate issues as 
they relate to the on-time performance of Amtrak's intercity passenger 
rail service. Following the Federal Railroad Administration's adoption 
of a final rule establishing metrics and standards for measuring the 
performance and service quality of Amtrak's intercity passenger trains, 
the Board has worked to establish a new Passenger Rail Unit to better 
address the concerns of intercity passenger rail OTP. This Unit and the 
Board as a whole will use its investigatory powers in addition to 
responding to formal complaints brought forward by concerned parties. 
Certainly, there are intercity passenger routes today that have 
historically operated on the poorer side of the OTP spectrum, and the 
Board is actively addressing passenger rail OTP issues on our Nation's 
most troublesome routes.

   Question from Hon. Stephen F. Lynch to Karen J. Hedlund, Member, 
                      Surface Transportation Board

    Question 1. For intercity rail, I want to be certain we are 
ensuring that intercity rail is safe and that we can expand services. 
Since the STB has economic and certain approval authorities for 
intercity passenger rail, I want to make sure that areas that the 
average rider would consider important are deemed important by the STB.
    Will the STB conduct on-time performance investigations even 
without being petitioned? Which routes do you anticipate investigating?
    Answer. The Board is closely monitoring Amtrak's customer on-time 
performance (OTP) statistics, with particular attention to long-
distance, Northeast Corridor, and state-supported routes. The Board is 
well aware that Amtrak's OTP is often poor, particularly with respect 
to long-distance trains, which comprise nine of the ten worst-
performing routes (all below 55%). (OTP by route appears in data 
published by the Federal Railroad Administration (FRA) under Section 
207 of the Passenger Rail Investment and Improvement Act of 2008 
(PRIIA), and can be found online at https://railroads.dot.gov/elibrary/
fy22-q1-customer-otp.)
    Section 213 of PRIIA directs the STB ``to determine whether and to 
what extent delays or failure to achieve minimum standards are due to 
causes that could reasonably be addressed by a rail carrier over whose 
tracks the intercity passenger train operates or reasonably addressed 
by Amtrak or other intercity passenger rail operators.'' In preparation 
for undertaking these responsibilities, the Board has appointed a 
Passenger Rail Unit (PRU) Development Team to determine and fill 
staffing \1\ and contracting needs, develop database capabilities, and 
craft strategies for addressing potential OTP investigations.
---------------------------------------------------------------------------
    \1\ Section 22309 of the bipartisan Infrastructure Investment and 
Jobs Act authorized up to ten new positions to staff the PRU.
---------------------------------------------------------------------------
    While no complaint has yet been filed, the Board is analyzing the 
FRA data and evaluating options for investigation including actively 
working to develop appropriate investigative procedures ``to review the 
accuracy of the train performance data and the extent to which 
scheduling and congestion contribute to delays.''
    Some of the issues I expect will be examined are:
    (1)  To what extent do the current procedures of Amtrak and the 
host railroads for reporting, describing, and adjudicating train delays 
fairly portray the predominant cause of, and entity responsible for, 
each such delay.
    (2)  With respect to freight-train interference, to what degree is 
the host railroad simply ignoring Amtrak's right of ``preference'' 
under 49 U.S.C. 24308(c) in dispatching trains.
    (3)  Is the host railroad giving Amtrak advance notice of 
circumstances that will result in delays to Amtrak trains.
    (4)  For routes on which the FRA and/or states have made 
investments in new infrastructure to reduce delays and/or increase 
frequencies, is the host railroad living up to its commitments set 
forth in any ``Service Outcomes Agreement'' entered into by the 
relevant parties.
    (5)  Why state-supported routes generally perform better than long-
distance routes.

    Finally, we are aware that adoption by the Class I carriers of 
``Precision Scheduled Railroading'' and similar operating approaches, 
in addition to recent labor reductions, has created challenges for both 
Amtrak and shippers. See, e.g., Urgent Issues in Freight Rail Service, 
EP 770 (STB served May 5, 2022) (describing the various potential 
causes of the current service crisis and shipper testimony received at 
the Board's April 2022 rail service hearing). We endeavor to have the 
carriers remedy the current freight service crisis while successfully 
addressing the OTP requirements of intercity passenger service.

                             [all]