[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]




   GETTING BACK ON TRACK: EXPLORING RAIL SUPPLY CHAIN RESILIENCE AND 
                               CHALLENGES

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

                                (118-16)

                                HEARING

                               BEFORE THE

                 SUBCOMMITTEE ON RAILROADS, PIPELINES,
                        AND HAZARDOUS MATERIALS

                                 OF THE

                              COMMITTEE ON
                   TRANSPORTATION AND INFRASTRUCTURE
                        HOUSE OF REPRESENTATIVES

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                              MAY 11, 2023

                               __________

                       Printed for the use of the
             Committee on Transportation and Infrastructure





                 [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]






     Available online at: https://www.govinfo.gov/committee/house-
     transportation?path=/browsecommittee/chamber/house/committee/
                             transportation

                               ______
                                 

                 U.S. GOVERNMENT PUBLISHING OFFICE

52-653 PDF                WASHINGTON : 2023













             COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

                   Sam Graves, Missouri, Chairman

Eric A. ``Rick'' Crawford, 			Rick Larsen, Washington,                
  Arkansas					  Ranking Member                        
Daniel Webster, Florida			        Eleanor Holmes Norton,                  
Thomas Massie, Kentucky			          District of Columbia                  
Scott Perry, Pennsylvania			Grace F. Napolitano, California         
Brian Babin, Texas				Steve Cohen, Tennessee                  
Garret Graves, Louisiana			John Garamendi, California              
David Rouzer, North Carolina			Henry C. ``Hank'' Johnson, Jr., Georgia 
Mike Bost, Illinois				Andre Carson, Indiana                   
Doug LaMalfa, California			Dina Titus, Nevada                      
Bruce Westerman, Arkansas			Jared Huffman, California               
Brian J. Mast, Florida				Julia Brownley, California              
Jenniffer Gonzalez-Colon,			Frederica S. Wilson, Florida            
  Puerto Rico					Donald M. Payne, Jr., New Jersey        
Pete Stauber, Minnesota			        Mark DeSaulnier, California             
Tim Burchett, Tennessee			        Salud O. Carbajal, California           
Dusty Johnson, South Dakota			Greg Stanton, Arizona,                  
Jefferson Van Drew, New Jersey,		          Vice Ranking Member                   
  Vice Chairman				        Colin Z. Allred, Texas                  
Troy E. Nehls, Texas				Sharice Davids, Kansas                  
Lance Gooden, Texas				Jesus G. ``Chuy'' Garcia, Illinois   	
Tracey Mann, Kansas				Chris Pappas, New Hampshire          	
Burgess Owens, Utah				Seth Moulton, Massachusetts          	
Rudy Yakym III, Indiana			        Jake Auchincloss, Massachusetts      	
Lori Chavez-DeRemer, Oregon			Marilyn Strickland, Washington       	
Chuck Edwards, North Carolina			Troy A. Carter, Louisiana            	
Thomas H. Kean, Jr., New Jersey		        Patrick Ryan, New York               	
Anthony D'Esposito, New York			Mary Sattler Peltola, Alaska         	
Eric Burlison, Missouri			        Robert Menendez, New Jersey          	
John James, Michigan				Val T. Hoyle, Oregon                 	
Derrick Van Orden, Wisconsin			Emilia Strong Sykes, Ohio            	
Brandon Williams, New York			Hillary J. Scholten, Michigan        	
Marcus J. Molinaro, New York			Valerie P. Foushee, North Carolina   	
Mike Collins, Georgia
Mike Ezell, Mississippi
John S. Duarte, California
Aaron Bean, Florida


     Subcommittee on Railroads, Pipelines, and Hazardous Materials

                 Troy E. Nehls, Texas, Chairman

Brian Babin, Texas			Donald M. Payne, Jr., New Jersey,      
David Rouzer, North Carolina		  Ranking Member                       
Mike Bost, Illinois			Frederica S. Wilson, Florida           
Doug LaMalfa, California		Seth Moulton, Massachusetts            
Bruce Westerman, Arkansas		Troy A. Carter, Louisiana              
Pete Stauber, Minnesota		        Andre Carson, Indiana                  
Tim Burchett, Tennessee		        Mark DeSaulnier, California            
Dusty Johnson, South Dakota		Marilyn Strickland, Washington         
Lance Gooden, Texas			Valerie P. Foushee, North Carolina,    
Tracey Mann, Kansas			  Vice Ranking Member                  
Rudy Yakym III, Indiana		        Grace F. Napolitano, California        
Thomas H. Kean, Jr., New Jersey	        Steve Cohen, Tennessee                 
Eric Burlison, Missouri		        Henry C. ``Hank'' Johnson, Jr., Georgia
Brandon Williams, New York,		Jared Huffman, California              
  Vice Chairman			        Jesus G. ``Chuy'' Garcia, Illinois     
Marcus J. Molinaro, New York		Robert Menendez, New Jersey            
John S. Duarte, California		Rick Larsen, Washington (Ex Officio)   
Sam Graves, Missouri (Ex Officio)










                                CONTENTS

                                                                   Page

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

                 STATEMENTS OF MEMBERS OF THE COMMITTEE

Hon. Troy E. Nehls, a Representative in Congress from the State 
  of Texas, and Chairman, Subcommittee on Railroads, Pipelines, 
  and Hazardous Materials, opening statement.....................     1
    Prepared statement...........................................     2
Hon. Donald M. Payne, Jr., a Representative in Congress from the 
  State of New Jersey, and Ranking Member, Subcommittee on 
  Railroads, Pipelines, and Hazardous Materials, opening 
  statement......................................................     3
    Prepared statement...........................................     4
Hon. Rick Larsen, a Representative in Congress from the State of 
  Washington, and Ranking Member, Committee on Transportation and 
  Infrastructure, opening statement..............................    24
    Prepared statement...........................................    25

                               WITNESSES

Ian Jefferies, President and Chief Executive Officer, Association 
  of American Railroads, oral statement..........................    27
    Prepared statement...........................................    29
Chuck Baker, President, American Short Line and Regional Railroad 
  Association, oral statement....................................    34
    Prepared statement...........................................    36
Chris Jahn, President and Chief Executive Officer, American 
  Chemistry Council, oral statement..............................    42
    Prepared statement...........................................    44
Marc Scribner, Senior Transportation Policy Analyst, Reason 
  Foundation, oral statement.....................................    47
    Prepared statement...........................................    49
Greg Regan, President, Transportation Trades Department, AFL-CIO, 
  oral statement.................................................    54
    Prepared statement...........................................    56

                       SUBMISSIONS FOR THE RECORD

Submissions for the Record by Hon. Donald M. Payne, Jr.:
    Article entitled, ``Collision Course: `They just don't care': 
      Trains blocking roads can be deadly. It's only getting 
      worse,'' by Mike Hendricks, Kansas City Star, December 13, 
      2022.......................................................     5
    Letter of May 12, 2023, to Hon. Martin Oberman, Chairman, 
      Surface Transportation Board, from Hon. Thomas J. Vilsack, 
      Secretary, U.S. Department of Agriculture..................    93
    Statement of Jennifer C. Gibson, Vice President, Regulatory 
      Affairs, National Association of Chemical Distributors.....    94
Submissions for the Record by Hon. Troy E. Nehls:
    Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and 
      Hon. Rick Larsen, Ranking Member, Committee on 
      Transportation and Infrastructure, and Hon. Troy E. Nehls, 
      Chairman, and Hon. Donald M. Payne, Jr., Ranking Member, 
      Subcommittee on Railroads, Pipelines, and Hazardous 
      Materials, from Herman Haksteen, President, Private Railcar 
      Food and Beverage Association..............................    11
    Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and 
      Hon. Rick Larsen, Ranking Member, Committee on 
      Transportation and Infrastructure, and Hon. Troy E. Nehls, 
      Chairman, and Hon. Donald M. Payne, Jr., Ranking Member, 
      Subcommittee on Railroads, Pipelines, and Hazardous 
      Materials, from Corey Rosenbusch, President and Chief 
      Executive Officer, The Fertilizer Institute................    13
    Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and 
      Hon. Rick Larsen, Ranking Member, Committee on 
      Transportation and Infrastructure, and Hon. Troy E. Nehls, 
      Chairman, and Hon. Donald M. Payne, Jr., Ranking Member, 
      Subcommittee on Railroads, Pipelines, and Hazardous 
      Materials, from E. Nancy O'Liddy, Executive Director, 
      National Industrial Transportation League..................    15
    Statement of the National Mining Association.................    17
    Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and 
      Hon. Rick Larsen, Ranking Member, Committee on 
      Transportation and Infrastructure, and Hon. Troy E. Nehls, 
      Chairman, and Hon. Donald M. Payne, Jr., Ranking Member, 
      Subcommittee on Railroads, Pipelines, and Hazardous 
      Materials, from Ann Warner, Spokesperson, Freight Rail 
      Customer Alliance..........................................    20
Article entitled, ``What's on the trains? Nevada's Cortez Masto, 
  Titus call for common-sense safety measures,'' by David Charns, 
  8NewsNow.com, May 5, 2023, Submitted for the Record by Hon. 
  Dina Titus.....................................................    84
Letter of May 11, 2023, to Hon. Troy E. Nehls, Chairman, and Hon. 
  Donald M. Payne, Jr., Ranking Member, Subcommittee on 
  Railroads, Pipelines, and Hazardous Materials, from Sean 
  O'Neill, Senior Vice President, Government Affairs, Portland 
  Cement Association, Submitted for the Record by Hon. Sam Graves    91

                                APPENDIX

Questions from Hon. Rick Larsen to Ian Jefferies, President and 
  Chief Executive Officer, Association of American Railroads.....    97
Questions from Hon. Robert Menendez to Greg Regan, President, 
  Transportation Trades Department, AFL-CIO......................    98

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


                              May 5, 2023

    SUMMARY OF SUBJECT MATTER

    TO:      LMembers, Subcommittee on Railroads, Pipelines, 
and Hazardous Materials
    FROM:  LStaff, Subcommittee on Railroads, Pipelines, and 
Hazardous Materials
    RE:      LSubcommittee Hearing on ``Getting Back on Track: 
Exploring Rail Supply Chain Resilience and Challenges.''
_______________________________________________________________________


                               I. PURPOSE

    The Subcommittee on Railroads, Pipelines, and Hazardous 
Materials will meet on Thursday, May 11, 2023, at 2:00 p.m. ET 
in 2167 of the Rayburn House Office Building to receive 
testimony on ``Getting Back on Track: Exploring Rail Supply 
Chain Resilience and Challenges.'' The Subcommittee will 
examine the freight railroad industry's role in supporting the 
supply chain. The Subcommittee will also discuss current 
challenges to the industry in meeting supply chain goals and 
future steps to address these issues. At the hearing, Members 
will receive testimony from Ian Jefferies, President and CEO of 
the Association of American Railroads (AAR); Chuck Baker, 
President and Chief Executive Officer (CEO) of the American 
Short Line and Regional Railroad Association (ASLRRA); Chris 
Jahn, President and CEO of the American Chemistry Council 
(ACC); Marc Scribner, Senior Transportation Policy Analyst of 
the Reason Foundation; and Greg Regan, President of the 
Transportation Trades Department, AFL-CIO (TTD).

                             II. BACKGROUND

    The Committee on Transportation and Infrastructure 
previously examined the impacts of COVID-19 on supply chains, 
including at a February 1, 2023, hearing entitled ``The State 
of Transportation Infrastructure and Supply Chain Challenges,'' 
and at a November 17, 2021, hearing entitled, ``Industry and 
Labor Perspectives: A Further Look at North American Supply 
Chain Challenges.'' \1\ A supply chain is defined as a network 
of making and selling commercial goods, from the supply of 
materials and manufacture of goods through their 
transportation, distribution and sale.\2\ A well-managed supply 
chain results in the efficient use of resources, reduced costs, 
and a faster production cycle.\3\ In contrast, supply chain 
disruptions cause inefficiencies that may contribute to 
economic inflation as producers experience challenges sourcing 
and obtaining necessary materials.\4\
---------------------------------------------------------------------------
    \1\ The State of Transportation Infrastructure and Supply Chain 
Challenges, Hearing Before the H. Comm. on Transp. and Infrastructure, 
118th Congress (Feb. 1. 2023); see also Industry and Labor 
Perspectives: A Further Look at North American Supply Chain Challenges, 
Hearing Before the H. Comm. on Transp. and Infrastructure, 117th 
Congress (Nov. 17, 2021).
    \2\ Jason Fernando, Supply Chain Management (SCM): How It Works and 
Why It Is Important, Investopedia, (July 7, 2022), available at https:/
/www.investopedia.com/terms/s/scm.asp.
    \3\ Jack Grimshaw, What is Supply Chain? A Definitive Guide, Supply 
Chain Digital, (May 17, 2020), available at https://
supplychaindigital.com/supply-chain-2/what-supply-chain-definitive-
guide.
    \4\ Anna Maria Santacreu and Jess LaBelle, Global Supply Chain 
Disruptions and Inflation During the COVID-19 Pandemic, Fed. Reserve 
Bank of St. Louis (Apr. 21, 2022), available at https://
research.stlouisfed.org/publications/review/2022/02/07/global-supply-
chain-disruptions-and-inflation-during-the-covid-19-pandemic.
---------------------------------------------------------------------------
    Due to the COVID-19 pandemic, businesses across the world 
scaled back or shut down operations in anticipation of reduced 
demand for goods.\5\ It was also anticipated that many 
producers would switch their manufacturing to COVID-19-related 
products, such as personal protective equipment.\6\ Congress 
and the Executive Branch took extraordinary measures to provide 
financial relief in response to the pandemic.\7\ At the same 
time, demand for goods during the pandemic was stronger than 
anticipated, as consumers altered their spending from paying 
for services to consumer goods.\8\ Despite the substantial 
progress made to return to pre-COVID-19 life, supply chain 
management and resiliency will be an ongoing challenge for 
shippers.\9\
---------------------------------------------------------------------------
    \5\ Lazaro Gamio and Peter S. Goodman, How the Supply Chain Crisis 
Unfolded, N.Y. Times, (Dec. 5, 2021), available at https://
www.nytimes.com/interactive/2021/12/05/business/economy/supply-
chain.html [hereinafter How the Supply Chain Crisis Unfolded].
    \6\ Id.
    \7\ Gabe Alber, A breakdown of the fiscal and monetary responses to 
the pandemic, Investopedia, (Feb. 28, 2023), available at https://
www.investopedia.com/government-stimulus-efforts-to-fight-the-covid-19-
crisis-4799723.
    \8\ How the Supply Chain Crisis Unfolded, supra note 5.
    \9\ Jennifer Williams-Alvarez, CFOs Focus on Building Resilient 
Supply Chains, Even as Pandemic Disruptions Fade, Wall St. J., (Apr. 
26, 2023), available at https://www.wsj.com/articles/cfos-focus-on-
building-resilient-supply-chains-even-as-pandemic-disruptions-fade-
8192831f?page=1.
---------------------------------------------------------------------------
    Over the past year, supply chain pressures have eased due 
to a reduction in overall transportation demand. For example, 
warehousing metrics are on a downward trend due to increased 
costs of wages and materials, warehouse development 
moratoriums, and customer cancellations.\10\ The Logistics 
Management Index (LMI) is a tool used to measure the 
performance of logistics and transportation supply chains. It 
is calculated based on various factors such as inventory 
levels, transportation costs, order cycle time, customer 
service, and other metrics that impact the overall efficiency 
and effectiveness of a supply chain.\11\ As of March 2023, the 
LMI was 51.1, which is the lowest level since its development 
in 2016, and far below a peak of 76.2 in March 2022.\12\ 
Several LMI sub-indexes support this decrease.\13\ For example, 
the warehouse cost subindex has been declining for most of last 
year, while the March 2023 warehouse capacity subindex was at 
its highest level since February 2020.\14\ Inventory levels are 
close to being at their lowest point since the onset of the 
pandemic.\15\
---------------------------------------------------------------------------
    \10\ Press Release, Logistics Managers' Index, March 2023 Logistics 
Manager's Index Report, (Apr. 4, 2023), available at https://www.the-
lmi.com/march-2023-logistics-managers-index.html.
    \11\ Id.
    \12\ See Trading Economics, United States LMI Logistics Managers 
Index Current (last visited May 4, 2023), available at https://
tradingeconomics.com/united-states/lmi-logistics-
managers-index-
current#::text=Lmi%20Logistics%20Managers%20Index%20Current%20in
%20the%20United%20States%20averaged,points%20in%20March%20of%202023.
    \13\ Id.
    \14\ See Trading Economics, United States LMI Warehouse Prices 
Current (last visited May 4, 2023), available at https://
tradingeconomics.com/united-states/lmi-warehouse-prices-.
    \15\ Id.
---------------------------------------------------------------------------

       III. FREIGHT RAIL INDUSTRY OVERVIEW AND CURRENT CHALLENGES

    Freight railroads carry nearly one-third of the Nation's 
freight.\16\ The rail share of the Nation's freight movements 
decreased from 2012 to 2018 according to the most recent data 
available from the Bureau of Transportation Statistics.\17\ 
While rail freight carloads have declined over the last twenty 
years, intermodal rail freight traffic has increased.\18\ Rail 
intermodal is the long-haul movement of shipping containers and 
truck trailers by rail, combined with truck or water 
movement.\19\
---------------------------------------------------------------------------
    \16\ DOT, Pocket Guide to Transp. 2022 at 19 (2022), available at 
https://rosap.ntl.bts.gov/view/dot/59823.
    \17\ Id.
    \18\ Id. at 3.
    \19\ Fed. Highway Admin., Background and Definitions--The Role of 
the National Highway System Connectors--FHWA Freight Management and 
Operations (2023), available at https://ops.fhwa.dot.gov/freight/
freight_analysis/nhs_connectors/role_nhs_conn/role_sys_conn_2.htm.
---------------------------------------------------------------------------
    Class I rail carriers have reduced their workforce. In 
2015, the Class I workforce averaged 169,478 workers.\20\ By 
2019 and pre-COVID, roughly 29,000 jobs had been eliminated--a 
17 percent decrease.\21\ By the end of 2021, the workforce had 
decreased by nearly one-third of the total workforce in 2015, 
and additional cuts continued through the COVID-19 
pandemic.\22\
---------------------------------------------------------------------------
    \20\ STB, Employment Data, available at https://www.stb.gov/
reports-data/economic-data/employment-data/ [hereinafter STB, 
Employment Data].
    \21\ Id.
    \22\ See STB, Employment Data, supra note 20; see also Union 
Pacific Corp., Form10-K Annual Report Pursuant to Sec. 13 or 15(D) of 
the Securities Exchange Act of 1934 at 55, (Feb. 7, 2020), available at 
https://www.up.com/cs/groups/public/@uprr/@investor/documents/
investordocuments/pdf_up_10k_02072020.pdf; see also Norfolk Southern, 
2019 Annual Report at 3, available at http://www.nscorp.com/content/
dam/nscorp/get-to-know-ns/investor-relations/annual-reports/annual-
report-2019.pdf.
---------------------------------------------------------------------------
    More than 40 percent of freight rail carloads and 
intermodal units involve international trade.\23\ This market 
accounts for approximately 35 percent of United States rail 
revenue and more than a quarter of United States rail 
tonnage.\24\ In late 2020 and the first half of 2021, United 
States freight railroads were handling more than 300,000 
containers and trailers per week.\25\ This was an increase from 
the first half of 2019.\26\ During this same six-month period 
in 2021, the Class I railroad workforce averaged 114,909 
workers compared to 144,346 workers during the same six-month 
period in 2019.\27\ To correct the imbalance of volumes and 
staffing levels, railroads have attempted to re-hire some 
furloughed workers and began hiring and training new 
employees.\28\ According to the Surface Transportation Board's 
(STB) employment data, Class I freight carriers have been 
increasing their employees monthly, from a low of 112,207 total 
workers in January 2022, to 120,668 persons in March 2023, 
though this growth has not been consistent across all 
crafts.\29\
---------------------------------------------------------------------------
    \23\ Docket N. DOT-OST-2021-0106, Comment letter from AAR to DOT 
(Oct. 18, 2021), available at https://www.regulations.gov/comment/DOT-
OST-2021-0106-0370 (commenting on DOT's Notice of Request for 
Information related to the Executive Order, ``America's Supply 
Chains,'' and the transportation industrial base).
    \24\ Id.
    \25\ Id.
    \26\ Id.
    \27\ STB, Employment Data, supra note 20.
    \28\ Id.
    \29\ Id.
---------------------------------------------------------------------------

RAIL INTERMODAL VOLUMES

    According to the Association of American Railroads (AAR), 
in the last year United States rail intermodal volume has 
significantly decreased. In the week ending April 22, 2023, 
freight rail traffic was down 3.5 percent compared to the same 
time one year earlier.\30\ The United States weekly intermodal 
volume was also down 10.8 percent from a year ago.\31\ 
Moreover, for the first 16 weeks for 2023, freight carriers 
reported a drop in intermodal units of 10.9 percent (3,723,234) 
from one year earlier.\32\ Total combined United States traffic 
between that period decreased by 5.6 percent.\33\ Per AAR, 
several factors contributed to intermodal downturn this year, 
including less robust consumer spending, decreased port 
activity, retailers maintaining higher inventory levels, and 
lower truck rates making all-truck moves more cost-
competitive.\34\
---------------------------------------------------------------------------
    \30\ Press Release, AAR, Weekly Rail Traffic for the Week Ending 
Apr. 22, 2023, (Apr. 26, 2023), available at https://www.aar.org/news/
weekly-rail-traffic-for-the-week-ending-april-22-2023/.
    \31\ Id.
    \32\ Id.
    \33\ Id.
    \34\ AAR: March Rail Carloads and Intermodal Decreased Year-over-
year, Calculated Risk, (Apr. 7, 2023), available at https://
www.calculatedriskblog.com/search?updated-max=2023-04-07T17:51:00-
07:00&max-results=10.
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  IV. BIDEN ADMINISTRATION ACTIONS TO ADDRESS THE SUPPLY CHAIN CRISIS

    President Biden issued Executive Order (EO) 14017, 
``America's Supply Chain.'' \35\ The EO directed Federal 
agencies to conduct a 100-day review of and report on the 
supply chain vulnerabilities associated with key imports.\36\ 
The Department of Transportation's (DOT) report, Supply Chain 
Assessment of the Transportation Industrial Base: Freight and 
Logistics, was released on February 22, 2022.\37\ On the same 
day, the Biden Administration announced additional plans to 
build long-term resilience in supply chains based on findings 
from the reviews and reports.\38\
---------------------------------------------------------------------------
    \35\ Exec. Order 14017, 86 Fed. Reg. 11849, (Feb. 24, 2021), 
available at https://www.govinfo.gov/content/pkg/FR-2021-03-01/pdf/
2021-04280.pdf [hereinafter EO 14017].
    \36\ Id.
    \37\ DOT, Supply Chain Assessment of the Transp. Industrial Base: 
Freight and Logistics (Feb. 2022), available at https://
www.transportation.gov/sites/dot.gov/files/2022-03/EO%2014017%20-
%20DOT%20Sectoral%20Supply%20Chain%20Assessment%20-
%20Freight%20and%20Logistics_FINAL_508.pdf.
    \38\ EO 14017, supra note 35.
---------------------------------------------------------------------------
    Additionally, on June 8, 2021 the White House announced the 
establishment of a Supply Chain Disruption Task Force (Task 
Force) led by the Secretaries of Commerce, Transportation, and 
Agriculture.\39\ The Task Force is directed to focus on a 
whole-of-government response to address short-term supply chain 
bottlenecks, with an emphasis on ``homebuilding and 
construction, semiconductors, transportation, and agriculture 
and food.'' \40\ Managed by the National Economic Council, the 
Task Force coordinated inter-agency and stakeholder 
meetings.\41\ The data collection function was transferred to 
the DOT in March 2022.\42\
---------------------------------------------------------------------------
    \39\ The White House, Fact Sheet: Biden-Harris Admin. Announces 
Supply Chain Disruptions Task Force to Address Short-Term Supply Chain 
Discontinuities, (June 8, 2021), available at https://
www.whitehouse.gov/briefing-room/statements-releases/2021/06/08/fact-
sheet-biden-harris-administration-announces-supply-chain-disruptions-
task-force-to-address-short-term-supply-chain-discontinuities/.
    \40\ Id.
    \41\ Id.
    \42\ Id.
---------------------------------------------------------------------------
    In April 2022, the STB held a two-day public hearing to 
discuss pressing issues in rail service.\43\ The STB heard 
testimony from several freight rail shippers, government 
officials, rail labor, and various experts on ways Class I rail 
carriers could better meet shipping needs.\44\ Following the 
hearing, the STB announced that it would require the four 
largest Class I rail carriers to submit performance data to the 
STB in an effort to promote improvements in rail service over 
six months, which was then extended another six months, and 
again for another eight months.\45\ According to the STB, data 
from recent weeks show that the Class I rail carriers are 
uneven in meeting their one-year targets for service 
improvement.\46\ Overall the data for key performance 
indicators such as velocity, terminal dwell, first-mile/last-
mile service, operating inventory and trip plan compliance show 
that railroad operations remain challenged generally.\47\
---------------------------------------------------------------------------
    \43\ Press Release, STB, STB Requires Additional Service Reporting 
From Railroads, (May 6, 2022), available at https://www.stb.gov/news-
communications/latest-news/pr-22-28/.
    \44\ Id.
    \45\ STB, Decision--Urgent Issues in Freight Rail Service--Railroad 
Reporting, (51681), (May 2, 2023), available at https://www.stb.gov/
proceedings-actions/decisions/.
    \46\ Id.
    \47\ Id.
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            V. FREIGHT RAILROADS SERVICE IMPROVEMENT EFFORTS

    According to the AAR, freight railroads have taken steps to 
improve supply chain movements, including by:
     Lincreasing coordination between railroads and 
with the trucking industry;
     Loffering incentives to customers for weekend or 
off-hour loading/unloading of containers;
     Lre-routing traffic away from busier terminals to 
less crowded ones;
     Lreopening closed terminals to add storage 
capacity;
     Lincreasing available storage capacity and staging 
space in and outside of terminals;
     Lcreating additional railroad-to-railroad 
interchanges to limit demand on trucks; and
     Lloading containers onto any chassis brought in to 
help reduce containerless/deadheading trips for truckers.\48\
---------------------------------------------------------------------------
    \48\ Industry and Labor Perspectives: A Further Look at North 
American Supply Chain Challenges; Hearing Before the H. Comm. on 
Transp. and Infrastructure, 117th Congress (Nov. 17, 2021) (statement 
of Ian Jefferies, President and CEO, AAR), available at https://
docs.house.gov/meetings/PW/PW00/20211117/114233/HHRG-117-PW00-Wstate-
JefferiesI-20211117.pdf.

    Moreover, while some carriers limited shipments through 
congestion embargoes in 2022, freight carriers invest 
approximately $25 billion per year in private capital, 
including for safety and network improvements.\49\
---------------------------------------------------------------------------
    \49\ Id.
---------------------------------------------------------------------------

                             VI. WITNESSES

     Ian Jefferies, President & CEO, AAR
     Chuck Baker, President & CEO, ASLRRA
     Chris Jahn, President & CEO, ACC
     LMarc Scribner, Senior Transportation Policy 
Analyst, Reason Foundation
     Greg Regan, President, TTD, AFL-CIO







 
   GETTING BACK ON TRACK: EXPLORING RAIL SUPPLY CHAIN RESILIENCE AND 
                               CHALLENGES

                              ----------                              


                         THURSDAY, MAY 11, 2023

                  House of Representatives,
Subcommittee on Railroads, Pipelines, and Hazardous 
                                         Materials,
            Committee on Transportation and Infrastructure,
                                                    Washington, DC.
    The subcommittee met, pursuant to call, at 2 p.m. in room 
2167 Rayburn House Office Building, Hon. Troy E. Nehls 
(Chairman of the subcommittee) presiding.
    Mr. Nehls. The Subcommittee on Railroads, Pipelines, and 
Hazardous Materials will come to order.
    I ask unanimous consent that the chair be authorized to 
declare a recess at any time during today's proceedings.
    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, if Members wish to insert a document into 
the record, please email it to us.
    I now recognize myself for the purpose of an opening 
statement for 5 minutes.

  OPENING STATEMENT OF HON. TROY E. NEHLS OF TEXAS, CHAIRMAN, 
 SUBCOMMITTEE ON RAILROADS, PIPELINES, AND HAZARDOUS MATERIALS

    Mr. Nehls. The consequences of the COVID-19 pandemic 
continue to ripple through supply chains and transportation 
modes, including freight railroads. The supply chain situation 
boiled over into a full-blown crisis last year as the Biden 
administration sat idle and helpless to fix the problem.
    This committee has closely followed the supply chain crisis 
and reviewed ways to address the problem and provide Americans 
with some much needed relief. The full committee previously 
examined the impacts of COVID-19 on supply chains, including in 
our first hearing this Congress.
    The committee also held hearings on the Surface 
Transportation Board proposals and activities aimed at 
addressing rail service challenges. In his testimony before the 
committee last year, Chair Martin Oberman advised that the 
Board has the tools and authorities necessary to address rail 
service issues, and we look forward to tracking those 
initiatives.
    I also believe it is important to highlight how some of the 
current administration's policies have contributed to ongoing 
supply chain challenges.
    Vaccine mandates, which just today the White House finally 
sunset; excessive Government transfer payments that incentivize 
people not to work--we hear it, people aren't going back to 
work--and an infrastructure law that prioritizes green projects 
over those that add real capacity to transportation modal 
networks, continue to impact the supply chain.
    Our hearing today will examine the state of freight 
railroad transportation networks and ongoing supply chain 
challenges.
    As examined in the previous supply chain hearings, freight 
rail remained comparatively resilient. However, it still 
encounters many challenges that are both unique to and common 
across all freight transportation modes.
    Our freight railroads are integral to our Nation's economy, 
carrying nearly one-third--that is right--one-third of the 
Nation's freight. Freight also makes up a significant part of 
our international trade portfolio, carrying over 40 percent of 
freight railcars and intermodal units, which accounts for more 
than one-quarter of United States rail tonnage.
    Railroads are in the process of rehiring furloughed 
employees and are actively training new employees to expand 
freight capacity.
    Today, the subcommittee will hear from our witnesses about 
the current challenges to the freight rail industry in meeting 
supply chain goals and ongoing efforts to address these issues.
    [Mr. Nehls' prepared statement follows:]

                                 
Prepared Statement of Hon. Troy E. Nehls, a Representative in Congress 
   from the State of Texas, and Chairman, Subcommittee on Railroads, 
                   Pipelines, and Hazardous Materials
    The consequences of the COVID-19 pandemic continue to ripple 
through supply chains and transportation modes, including freight 
railroads. The supply chain situation boiled over into a full-blown 
crisis last year as the Biden Administration sat idle and helpless to 
fix the problem.
    This Committee has closely followed the supply chain crisis and 
reviewed ways to address the problem and provide Americans with some 
much-needed relief. The full Committee previously examined the impacts 
of COVID-19 on supply chains, including in our first hearing this 
Congress.
    The Committee also held hearings on Surface Transportation Board 
(STB) proposals and activities aimed at addressing rail service 
challenges. In his testimony before the Committee last year, STB Chair 
Martin Oberman advised that the Board has the tools and authorities 
necessary to address rail service issues, and we look forward to 
tracking those initiatives.
    I also believe it is important to highlight how some of the current 
Administration's policies have contributed to ongoing supply chain 
challenges. Vaccine mandates, which just today the White House finally 
sunset, excessive government transfer payments that incentivized people 
not to work, and an infrastructure law that prioritizes green projects 
over those that add real capacity to transportation modal networks, 
continue to impact the supply chain.
    Our hearing today will examine the state of freight railroad 
transportation networks and ongoing supply chain challenges. As 
examined in previous supply chain hearings, freight rail remained 
comparatively resilient.
    However, it still encounters many challenges that are both unique 
to and common across all freight transportation modes. Our freight 
railroads are integral to our Nation's economy, carrying nearly one-
third of the Nation's freight.
    Freight also makes up a significant part of our international trade 
portfolio--carrying over 40 percent of freight rail carloads and 
intermodal units, which accounts for more than a quarter of United 
States rail tonnage.
    Railroads are in the process of re-hiring furloughed workers and 
are actively training new employees to expand freight capacity. Today, 
the Subcommittee will hear from our witnesses about the current 
challenges to the freight rail industry in meeting supply chain goals 
and ongoing efforts to address these issues.

    Mr. Nehls. And now I recognize my dear friend, Ranking 
Member Payne, for 5 minutes for an opening statement.

OPENING STATEMENT OF HON. DONALD M. PAYNE, JR., OF NEW JERSEY, 
   RANKING MEMBER, SUBCOMMITTEE ON RAILROADS, PIPELINES, AND 
                      HAZARDOUS MATERIALS

    Mr. Payne. I would like to thank the gentleman, Chairman 
Nehls, for calling today's hearing. I am glad that we have an 
opportunity to examine freight rail service and learn what can 
be improved.
    Of course, we can't neglect the importance of the freight 
rail workforce to the safe and reliable operation of these 
railroads. For the last decade, freight railroad workers have 
been asked to do more with less. Since 2015, the freight rail 
workforce has been cut by one-third. Despite record profits, it 
has only been in the last year that the Class I railroads have 
been willing to bargain with their workforce for paid sick 
leave.
    This morning, I introduced the Freight Rail Workforce 
Health and Safety Act to guarantee 7 paid sick days for all 
freight railroad workers. Sick leave is a right.
    We Members of Congress have paid sick leave ourselves. Our 
staff has paid sick leave. Executives at the railroads have 
paid sick leave. Freight rail workers deserve paid sick leave 
as well.
    As the workforce shrunk, trains grew in length, with some 
trains today reaching up to 3 miles long. These trains are too 
long to fit into rail yards and sidings, so, they block 
crossings and stop people from getting to school and to work. 
More worrisome, these trains can stop first responders from 
getting to people who need them.
    Mr. Chairman, I would like to ask unanimous consent to add 
the December 2022 article from The Kansas City Star into the 
record.
    Mr. Nehls. Without objection, so ordered.
    [The article immediately follows Mr. Payne's prepared 
statement.]
    Mr. Payne. It shows the human toll of blocked crossings.
    A grandfather, Gene Byrd, died while the crossing to his 
neighborhood was knowingly blocked by a BNSF train and 
emergency responders could not get to his house in Noble, 
Oklahoma. In the Houston suburbs, a tiny baby died for the same 
reason. His mom was a nurse and she performed CPR for 52 
minutes while a Union Pacific train blocked the entrance to her 
neighborhood.
    I am pleased that our Senate counterparts advanced 
bipartisan rail safety legislation yesterday which addresses 
both blocked crossings and long trains. This bill is so 
bipartisan, both Senator Schumer and former President Trump 
support it.
    I am hopeful we can move similar legislation here in the 
House, and I look forward to working with my Republican 
colleagues on this.
    We need to improve rail safety and rail service.
    Last summer's rail meltdown made it clear that this 
industry needs resiliency.
    In response to service disruptions, I introduced the 
Freight Rail Shipping Fair Market Act, which puts shippers and 
the railroads on a level playing field. It requires freight 
rail contracts to contain service delivery standards while 
allowing railroads and customers to determine what those 
standards should be. It clarifies that common carrier service 
should mean efficient, timely, and reliable rail service. It 
allows railcar owners to charge fees if railroads are slow to 
pick up or return their cars--the same way railroads are 
allowed to charge these fees to their customers.
    These ideas are supported by rail customers and rail labor. 
They will improve service for rail customers and for all who 
depend on freight railroads to bring food to the market and 
keep our country running.
    I look forward to hearing from our witnesses today about 
rail service and how the rail workforce is handling these 
recent challenges.
    And with that, Mr. Chairman, I yield back.
    [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 Ranking Member, Subcommittee 
            on Railroads, Pipelines, and Hazardous Materials
    Thank you, Chairman Nehls for calling today's hearing. I'm glad 
that we have an opportunity to examine freight rail service and learn 
what can be improved.
    Of course, we can't neglect the importance of the freight rail 
workforce to the safe and reliable operation of these railroads. For 
the last decade, freight rail workers have been asked to do more with 
less.
    Since 2015 the freight rail workforce has been cut by a third.
    Despite record profits, it has only been in the last year that the 
Class I railroads have been willing to bargain with their workforce for 
paid sick leave.
    This morning, I introduced the Freight Rail Workforce Health and 
Safety Act to guarantee seven paid sick days for all freight railroad 
workers. Sick leave is a right.
    We Members have paid sick leave.
    Our staff has paid sick leave.
    Executives at these railroads have paid sick leave.
    Freight rail workers deserve paid sick leave as well.
    As the workforce shrunk, trains grew in length, with some trains 
today reaching up to three miles long.
    These trains are too long to fit into rail yards and sidings, so 
they block crossings and stop people from getting to school and work.
    More worrisome, these trains can stop first responders from getting 
to people who need them.
    Mr. Chairman, I would like to ask unanimous consent to add this 
December 2022 article from the Kansas City Star into the record.
    It shows the human toll of blocked crossings.
    A grandfather, Mr. Gene Byrd, died while the crossing to his 
neighborhood was knowingly blocked by a BNSF train and emergency 
responders could not get to his house in Noble, Oklahoma.
    In the Houston suburbs, a tiny baby died for the same reason. His 
mom was a nurse and she performed CPR for 52 minutes while a Union 
Pacific train blocked the entrance to her neighborhood.
    I'm pleased that our Senate counterparts advanced bipartisan rail 
safety legislation yesterday, which addresses both blocked crossings 
and long trains.
    This bill is so bipartisan both Senator Schumer and former 
President Trump support it.
    I'm hopeful we can move similar legislation here in the House, and 
I look forward to working with my Republican colleagues on this.
    We need to improve rail safety and rail service.
    Last summer's rail meltdown made clear that this industry needs 
resiliency.
    In response to service disruptions, I introduced the Freight Rail 
Shipping Fair Market Act which puts shippers and the railroads on a 
level playing field.
    It requires freight rail contracts to contain service delivery 
standards, while allowing the railroads and customers to determine what 
those standards should be.
    It clarifies that common carrier service should mean efficient, 
timely, and reliable rail service.
    It allows rail car owners to charge fees if railroads are slow to 
pick up or return their cars--the same way railroads can charge these 
fees to their customers.
    These ideas are supported by rail customers and rail labor.
    They will improve service for rail customers and for all of us who 
depend on freight railroads to bring food to market and keep our 
country running.
    I look forward to hearing from our witnesses today about rail 
service and how the rail workforce is handling these recent challenges, 
and I yield back the balance of my time.

                                 
 Article entitled, ``Collision Course: `They just don't care': Trains 
   blocking roads can be deadly. It's only getting worse,'' by Mike 
   Hendricks, Kansas City Star, December 13, 2022, Submitted for the 
                  Record by Hon. Donald M. Payne, Jr.
Collision Course: `They just don't care': Trains blocking roads can be 
                    deadly. It's only getting worse
by Mike Hendricks

Kansas City Star, updated December 13, 2022
https://www.kansascity.com/news/business/article268879922.html

Noble, OK.--You never knew when or how long a train might block the 
Maple Street crossing, the only way in or out of the neighborhood where 
Gene and Linda Byrd lived on the edge of town.
    ``You couldn't go to the store to get a gallon of milk for dinner, 
because you didn't know when you would come back,'' Linda said. ``I 
mean, it could be 30 minutes, it could be two hours.''
    More troubling, their son Chad said in a 2015 TV news interview: 
What if a train was parked at that crossing and prevented an ambulance 
from helping someone who was gravely ill on the other side?
    Five years later, that's what happened when 66-year-old Gene Byrd 
got out of bed with chest pains and collapsed around 1 a.m. on Sept. 6, 
2020. The EMTs who responded to the 911 call were blocked by an idling 
BNSF freight train, and when a cop pleaded with the conductor to move 
the rig, he refused.
    Several minutes passed before the train finally moved and the 
ambulance arrived at the Byrds' house, Linda said recently, fighting 
back tears as she recalled the night she lost her husband of 48 years.
    ``They put him on the board,'' she said. ``I don't know if he was 
breathing at that point.''
    Medical treatment has come too late for countless others when 
parked or plodding trains blocked ambulance crews from getting people 
the help they needed in time, The Star found in a months-long 
investigation. Delayed at blocked crossings, fire trucks have arrived 
too late to save people's houses from burning to the ground.
    Much of the blame rests on congressional inaction and a series of 
court rulings over the past 20 years that have stripped from state and 
local officials the authority they once had to limit how long trains 
could block crossings. Only Congress can restrict a train's movement, 
the courts have ruled in state after state.
    Yet Congress has failed repeatedly to pass laws giving regulators 
the authority they'd need to address a problem that has only grown 
worse due to operational changes within the railroad industry.
    ``We don't have explicit authority to prohibit a train from 
occupying a crossing for any length of time,'' said Karl Alexy, chief 
safety officer for the Federal Railroad Administration.
    The U.S. Supreme Court so far also has refused to weigh in. Ohio is 
now waiting to learn whether the high court will hear the appeal it 
filed last month of a state supreme court ruling that nullified Ohio's 
blocked crossings law.
    That railroad companies can block crossings indefinitely is one of 
the more egregious examples of the wide latitude railroads have been 
given to operate as they see fit, dating all the way back to when the 
first tracks were laid in the U.S. in the early 1800s.
    And the problem has only gotten worse in recent years for many 
communities across the country as the rail industry's practices have 
made blocked crossings more common. According to one government report, 
there were nearly 1,800 reported instances in 2020 of trains blocking 
crossings for more than an hour, and sometimes for an entire day.
    Officials in the communities that are hardest hit, many of which 
are predominantly minority or economically vulnerable, have grown 
increasingly frustrated and concerned for the safety of their citizens 
and the health of their local economies.
    In 2017 in Forest Park, Georgia, outside Atlanta, Kate Brown and 
her 1-year-old son lost limbs--she a leg and he an arm--as Brown, on 
her way home from the bus stop, crawled under a train blocking a 
crossing with her baby in her arms after her two older children had 
crawled to safety.
    ``Stalled trains continue to be a tremendous burden on our 
residents, first responders and especially our local business owners,'' 
Marc-Antoine Cooper, the city manager of Forest Park, told The Star. 
``Drivers and pedestrians in the area are forced to detour their 
routes, all while a large number of trains stay idle on the railway 
track for hours at a time.''
                             Tragic Delays
    Most of the time blocked rail crossings are merely an 
inconvenience. Kids are late getting home from school because a train 
delayed their bus. Adults can't get to work on time. Appointments are 
missed, reservations canceled.
    Little recognized is that these delays can turn emergencies into 
tragedies.
    Arvid Eliason was 82 in 2017 when he hit his head and suffered a 
brain bleed. The ambulance taking him to the hospital was blocked for 
20 minutes by a train near his home in Woodhaven, Michigan. Had he 
gotten treatment sooner, his son believes he might have survived.
    Baldevbhai ``Bobby'' Patel, 46, of Wartrace, Tennessee, succumbed 
to a heart attack in May 2021 when trains at multiple crossings delayed 
an ambulance's arrival by 12 to 15 minutes, according to the deputy 
emergency medical services director in the county where Wartrace is 
located.
    Medical treatment for K'Twon Franklin of Leggett, Texas, also came 
too late when rescue workers were delayed by a train blocking a 
crossing near his home in 2021, according to the wrongful death lawsuit 
his family filed in March against Union Pacific Railroad.
    K'Twon was just 11 weeks old when his mother, a nurse, found him 
unresponsive a half hour after putting him down for a nap on Sept. 30, 
2021. Finding the crossing blocked to the dead-end road where the 
family lived, an EMT climbed through a parked train to get the child 
and carry him back to the ambulance.
    But before he could get back across the tracks to the vehicle, the 
train had begun to move. Nearly an hour passed between the 911 call and 
when the baby was finally loaded into the ambulance. K'Twon was 
pronounced dead in the hospital three days later.
    ``That train was always blocking the track for hours on end,'' 
K'Twon's mother, Monia Lee Ann Franklin, told The Star. ``That morning, 
it was on the track for an hour, 19 minutes. And I was doing CPR for 
49.''
    She called her son's death ``tragic and life changing,'' but hopes 
his passing might get someone to fix the problem so some other family 
can be spared her grief.
    How often these tragic delays occur, no one knows for sure. No 
agency--local, state or federal--keeps track. But fears that it could 
happen in their communities have some cities and counties with heavy 
train traffic mounting cameras at problem rail crossings so emergency 
responders and the public can know in advance that they need to find 
another route. If there is one.
    Also unknown is the number of pedestrians who are killed or maimed 
each year doing what that EMT in Texas did under less desperate 
circumstances. Weary of waiting for parked trains to move so they can 
get to work, school or the store, people on foot or bicycle often climb 
between rail cars or crawl under them at or near rail crossings all 
across the country.
                           Pedestrians Maimed
    Normally, no one gets hurt while putting themselves at such 
enormous risk. But sometimes, without warning, the trains lurch forward 
or backward, pinching off people's arms and legs.
    Two people were grievously injured in 2017 in Waterloo, Iowa, in 
separate, gruesome incidents at blocked crossings that often hem in one 
of the city's most disadvantaged neighborhoods. Oneida Cosby lost both 
legs, while Jovida Owens was ``degloved,'' which is as awful as it 
sounds. Nearly all of the skin, along with muscle, was ripped from her 
neck and down her back.
    ``When the train's on the tracks, it blocks the whole east side 
crossing,'' Waterloo resident Essoria Greer told The Star.
    ``When the train stops, people are walking--a lot of people don't 
have transportation. When they're walking and the train just sits there 
for 30, 45 minutes, they have to go underneath the train, or jump the 
tracks with their bikes--pushing their bikes underneath just to get 
across the street. Anything to get across the street.''
    Forty states and the District of Columbia have laws that limit how 
long trains can block public crossings, anywhere from five to 20 
minutes, according to the Congressional Research Service. But over the 
past two decades railroads have successfully challenged the 
constitutionality of those laws, rendering them unenforceable 
nationwide.
    State and federal courts have sided with the railroads, ruling that 
because Congress granted rail carriers special legal status 25 years 
ago, only the federal government has authority to set rules on a 
railroad's operations.
    Yet that same federal government has set no limits on how long a 
train can block a crossing. And whenever such a law is proposed in 
Congress, the railroad industry's lobbyists go to work and the bill is 
killed.
    That last happened in 2021. Rep. Jim Cooper, a Democrat from 
Tennessee, managed to get a blocked crossing limitation inserted into 
the infrastructure bill, arguing that his constituents ``should not 
suffer because railroads think they own the world.''
    But when it was all over, the blocked crossing rule was stripped 
from the bi-partisan infrastructure bill at the urging of the railroad 
industry.
    ``Each of the nation's 200,000 grade crossings are different,'' the 
Association of American Railroads said in arguing against a 10-minute 
limit on blocked crossings that passed the House but not the Senate. 
``This proposed one-size-fits-all solution will lead to unintended 
consequences, including network congestion and reductions in service.''
    In place of a law limiting how long a train can block a public 
crossing, proponents were forced to accept a compromise. The 
infrastructure bill created a federal grant program to eliminate 
problem railroad crossings by building viaducts over the tracks or 
tunnels under them.
    The program will cost American taxpayers hundreds of millions of 
dollars--and the railroads nothing. And when money from the competitive 
Railroad Crossing Elimination Grant Program has run out, not every 
community that needs help will have gotten it.
                             Longer Trains
    Blocked crossings are increasingly creating hardships and danger 
for communities across the United States. Much of the blame for that 
rests on changes within the railroad industry over the past decade.
    All of the nation's seven largest railroads have slashed their 
workforces, while initiating work-rule changes that have led other 
workers to quit. When train crews exceed the number of hours that by 
law they can work, a relief crew is not always immediately available.
    That means a train can sit on a siding for hours, blocking access 
to homes and businesses, until a fresh engineer and conductor show up 
for work.
    Trains also have gotten longer as the railroads have looked for 
ways to cut operating costs and please Wall Street investors. The labor 
costs to operate a two-mile train are the same as what it costs to 
operate a train that is one mile long.
    But this can lead to crossings being blocked, as the existing rail 
infrastructure isn't always sufficient to support these longer trains. 
At 10,000 feet or more, they're too long to park on a siding that is 
8,500 feet while letting other trains pass.
    So they stop on the main line, which means those other trains have 
to stop, too, sometimes blocking rail crossings.
    Likewise, many rail yards weren't built to accommodate these long 
trains. It takes more time to break trains apart when they arrive.
    ``If there is a log jam at point A coming into your yard, it 
creates a bottleneck for the whole railroad,'' said Ty Dragoo, Kansas 
legislative director for SMART Transportation Division, a union that 
represents railroad workers. ``And it's just the cascading effect where 
we see now trains are setting on top of crossings left and right.''
    While data on train length is not publicly available, two of the 
country's largest railroads told the Government Accountability Office 
that the average length of their trains had grown 25 percent between 
2008 and 2017, now averaging more than a mile long.
    But some stretch as long as two to three miles and can block 
multiple crossings at once, as Clint McBroom, mayor of Newton, Kansas, 
can attest.
    ``We have five crossing points in Newton,'' he said. ``The trains 
are so long that all five of them can be blocked at one time.''
    While Newton has alternative routes for emergency crews to get from 
one side of town to the other, people on foot or bicycle sometimes take 
the shortcut through stopped trains.
    ``We've had situations where kids (in Newton) are crawling 
underneath our trains in the morning and after school,'' Dragoo said. 
``It scares the hell out of us. Because we don't know, if we start to 
pull, if we're going to cut a kid in half.''
    Train crews can disconnect cars and break trains in two to make 
crossings passable. But often they don't because the process of 
reconnecting can take a couple of hours due to federal train brake 
safety regulations, and time is money.
    The outcry over blocked railroad crossings has grown so much in 
many communities that the federal government created an online portal 
three years ago where people can report problem crossings.
    The Federal Railroad Administration, which enforces the laws 
Congress does pass to regulate railroads, says it uses the data to 
identify problem areas and assess the causes and impact of blocked 
crossings.
    So far the FRA has issued no public report on its findings, 
although it's not clear how useful a report would be. The portal only 
measures how often people complain about a blocked crossing, not which 
crossings are blocked the most.
    After a while, people quit filing reports through the portal and 
try other tactics that they hope might produce results.
                              Held Hostage
    Allen Watts finds it more effective to make a pest of himself. He 
and his neighbors along Gander Slough Road outside Kingsbury, Texas, 
have felt like prisoners since the Union Pacific expanded a siding 
there to park trains, sometimes for hours, while letting other trains 
pass on the main line from San Antonio to Houston.
    ``Our emergency response comes from the west, and that's where 
we're blocked,'' Watts told The Star. ``I've harped on it (with 
railroad employees) and say, `Hey, we're cut off from the fire 
department and ambulance and they (the railroad) say, `Well, they can 
go around.'
    ``I said, `So are you going to take credit for someone's house 
burning? Or are you going to if someone dies, because you know that 30 
minutes could mean life or death, right?' ''
    Watts sometimes calls the railroad dozens of times in a day when 
the crossing is blocked. Not until he got the phone number of a top 
Union Pacific executive at the company's headquarters in Omaha, 
Nebraska, did relief come.
    The Gander Slough Road crossing also has its own Facebook page to 
call attention to the problem.
    Denise Wheeler-Mayo administers a similar page dedicated to a 
couple of crossings outside Birmingham, Alabama, calling attention to 
the problems the Norfolk Southern railroad causes in her neighborhood.
    ``We're held hostage by the train company, you know, over and over 
and over again,'' she told The Star. ``We've had people die from heart 
attacks. We've had people's houses burned because the fire truck 
couldn't get to us.''
    JoAnna Chamberlain of New Boston, Michigan, a suburb of Detroit, 
also has taken her campaign against blocked crossings online, where she 
promotes a change.org petition that asks that Congress step in because 
states are powerless to act on their own anymore.
    ``Michigan has legislation that says that trains can't block for 
more than 15 minutes,'' she said. ``However, I know federal courts have 
said, you can't cite trains for blocking tracks because it's interstate 
commerce. So now local law won't enforce the legislation because 
federal courts won't uphold it.''
    Congress needs to put people's rights ahead of the business needs 
of railroads, she said.
    ``There are towns just like ours all across our nation experiencing 
the same problems,'' she said. ``Something must change.''
                         `They just don't care'
    For more than a century, Kansas had a law on its books much like 
the one in Michigan. It forbade trains from blocking railroad crossings 
for more than 10 minutes, without leaving an opening at least 30 feet 
wide so vehicles can get through.
    Passed in 1897 at a time when the Populists controlled state 
government and were trying to rein in the monopoly power of the 
railroads, the blocked crossing statute was one of the few of those 
restrictions that survived. The fines for violating the law were last 
updated in 2004: $100 to $600 for the first half hour a crossing is 
blocked and $600 for each 30 minutes thereafter.
    But by then, the railroads had already begun a campaign to overturn 
blocked crossing laws nationwide. The BNSF Railway Co. was successful 
in getting the Kansas law nullified four years ago when the state court 
of appeals ruled the state's blocked crossing law unenforceable.
    That case grew out of one county sheriff's frustration with BNSF 
for habitually blocking two crossings in a sparsely populated corner of 
the Flint Hills.
    The Chase County Sheriff's Department was constantly getting calls 
from residents who felt trapped by the trains that kept them from 
getting to the nearest town--or anywhere else, for that matter. One of 
those calls came in around 6 o'clock on a cold December morning in 
2016. For what seemed like the hundredth time, a train was blocking the 
crossings at Norton Creek Road and county road T.
    Only a few people were affected by the trains there. But for the 
farmers and ranchers who lived nearby, the blocked crossings had been a 
constant hassle. The trains would sometimes sit there for days, and 
there was no alternate route, only dead ends.
    What if there was an emergency?
    ``I've got a half a dozen residences out there,'' Sheriff Richard 
Dorneker said in late August as he was about to retire after 27 years 
with the department, 17 of them in the top job. ``People are in their 
80s. Got another gal that was pregnant.''
    When her husband called the railroad a few years back to ask what 
would happen should the crossings be blocked when his wife went into 
labor, Dorneker said, ``Their answer to him was, `You'll have to leave 
a truck parked on the other side, and she'll have to either crawl over 
the top of the train or under the train.' ''
    On that December morning at the center of the appeals court ruling, 
Dorneker drove out around 8 to find the train still sitting there two 
hours after the call had come in. A conductor walking alongside it said 
he had to check the train and offered no explanation on why it was 
stopped or for how long.
    Dorneker asked someone back at his office to call BNSF and insist 
that the train be moved. When it hadn't budged after three phone calls, 
Dorneker wrote BNSF a ticket and hoped that might get someone's 
attention at the railroad's headquarters in Fort Worth, Texas.
    Yet rather than pay the $4,200 fine for trapping Chase County 
residents in their homes for much of that morning, the railroad owned 
by billionaire Warren Buffet's holding company--the BNSF would go on to 
make a $3.6 billion profit in 2016--chose to appeal its conviction at 
the district court level.
    The railroad argued that states had no power to regulate its 
operations, and the Kansas Court of Appeals agreed. That was strictly a 
federal responsibility.
    State laws restricting a railroads' practices, according to the 
2018 ruling, were ``preempted,'' a legal term that has come up again 
and again when it comes to state and local governments' attempts to 
regulate the railroads.
    So trains continue to block those crossings in Chase County for 
hours and hours, and there's nothing to be done about it.
    ``When it comes to BNSF, they're just gonna block what they need to 
block when they want to block it,'' Dorneker said. ``And they just 
don't care. I mean, they're not concerned about the common person that 
has to work or try to get to, you know, anywhere.''
                             The Byrd Case
    Two things happened that year after Gene Byrd died of a heart 
attack in Noble, Oklahoma.
    The city of Noble, with no help from the railroad, extended the 
dead-end blacktop road along which Linda Byrd and her two adult 
children live in separate houses in a sort of family compound.
    That extra half mile of asphalt now stretches to Cemetery Road, 
where there's another rail crossing providing access to the homes. The 
project had been in the planning stages for years.
    ``We were paving that thing not long after Mr. Byrd's death,'' 
assistant city manager Robert Porton said, ``so the timing was 
unfortunate.''
    The other development was that Linda Byrd filed a wrongful death 
lawsuit against BNSF.
    The railroad tried to get the case thrown out by having it moved 
from the state court where it was filed to federal district court, 
where the company felt it had better luck getting it dismissed. BNSF's 
hope was that the federal judge would rule that Linda Byrd's claims 
were preempted by a law that gives the federal government sole 
authority to regulate railroad operations.
    But Judge Stephen P. Friot did not rule on that point, but rather 
returned the case to the state court for a full hearing on the issues 
because Byrd's attorney had not argued that the BNSF had blocked the 
crossing longer than state law allowed--a law that was ruled 
unconstitutional a month after Byrd's death.
    Rather Byrd's Kansas City-based attorney, Timothy Gaarder, argued 
that the railroad was guilty of negligence for refusing to move the 
train when informed that an emergency existed. The railroad and its 
employees, he said in a court filing, ``were negligent when they 
permitted Train #5628 to block the Maple Street Crossing when 
Defendants knew, or should have known, that this could prevent a member 
of the public, specifically Mr. Byrd, from receiving emergency medical 
services.''
    That's a matter more properly heard in state court, the judge 
ruled, and so the case continues. While it might seem like a fine legal 
point, the judge's ruling could help others navigate around the 
railroad's preemption defense and successfully file negligence claims 
in civil cases involving blocked railroad crossings.
    ``There is a very real chance of having legal precedent set in this 
case that will either open the door to justice, or further close it,'' 
Gaarder said.
    Ultimately, it may be up to the U.S. Supreme Court to decide, if 
the case goes to trial, as both sides would likely appeal that initial 
verdict.
    Which means years might pass before the final outcome is known in a 
lawsuit that might never have been filed in the first place, had that 
conductor radioed his dispatcher to say he was backing up the train 150 
feet to let the ambulance pass through.
    They just might have gotten there in time to save a life, Linda 
Byrd says.
    ``I mainly feel like the conductor, engineer, whatever, didn't have 
a right to make that call whether Gene had a chance,'' she said. ``I 
mean, when you have a heart attack there's only minutes that there's a 
window there and he decided that he didn't have to give that to Gene, 
and I just don't understand.''

The Star's Eric Adler and Kevin Hardy contributed to this article.

This story was originally published December 11, 2022, 5:00 AM.

    Mr. Nehls. Thank you, Ranking Member Payne.
    I ask unanimous consent to enter into the record the 
following statements from the Private Railcar Food and Beverage 
Association, The Fertilizer Institute, the National Industrial 
Transportation League, the National Mining Association, and the 
Freight Rail Customer Alliance.
    Without objection, so ordered.
    [The information follows:]

                                 
  Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick 
Larsen, Ranking Member, Committee on Transportation and Infrastructure, 
   and Hon. Troy E. Nehls, Chairman, and Hon. Donald M. Payne, Jr., 
  Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous 
 Materials, from Herman Haksteen, President, Private Railcar Food and 
  Beverage Association, Submitted for the Record by Hon. Troy E. Nehls
                                                      May 11, 2023.
VIA EMAIL

The Honorable Sam Graves,
Chair,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Troy Nehls,
Chair,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Donald M. Payne, Jr.,
Ranking Member,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
    Dear Chairs Graves and Nehls, and Ranking Members Larsen and Payne:
    The Private Railcar Food and Beverage Association (PRFBA), thanks 
you for holding today's subcommittee hearing, ``Getting Back on Track: 
Exploring Rail Supply Chain Resilience and Challenges.''
    PRFBA, founded in 2016, is comprised of 21 global food and beverage 
companies and manufacturers headquartered in North America, who own or 
lease their own rail cars. They are all major rail shippers that rely 
on the railroads to produce and distribute their food and beverage 
products that are vital to the health and welfare of our nation.
    In debating what steps Congress needs and should take to strengthen 
our nation's freight rail network, PRFBA asks that your Committee also 
address the continued and systemic freight rail service problems that 
shippers are still experiencing, regardless of size, geographical 
location, or commodity. Rail-dependent or captive shippers are 
especially vulnerable to these problems.
    As described in further detail in Appendix 1, PRFBA's members and 
their customers continue to suffer economic harm due to unreliable rail 
service delivered at unreasonable rates.
    Thanks in large part to this Committee's past efforts, Congress 
passed the Surface Transportation Board (STB) Reauthorization Act of 
2015, P.L. 114-110, which expired on September 30, 2019. PRFBA 
recommends you build upon the basic reforms, process enhancements, and 
added transparency instilled in this law by:
      Clarifying the Common Carrier Obligation (CCO) statutory 
provision and providing the STB with both the direction and flexibility 
when determining if a railroad is meeting its CCO, especially in view 
of the industry's continued, systemic, freight rail carrier service 
failures.

      Allowing private rail car owners or lessors to obtain 
compensation from railroads for improper use or delay of their rail 
cars, such as when railroads are slow to deliver or pick up rail cars. 
The railcar ownership market has changed during the past few decades, 
and shippers own or lease two-thirds of the freight rail cars in use 
today. In addition to the costs incurred in owning or leasing the 
railcars, these shippers are also responsible for the repair and 
maintenance of these railcars.

      Increasing the STB's civil penalty authority. For the 
current 2023, the maximum amount allowed is under $10,000 for each 
knowing violation, per day. With the continued profits enjoyed by the 
rail carriers and their shareholders, this level of penalty is clearly 
insufficient to deter wrongful behavior. Furthermore, the Board has 
used this existing authority only once in the last ten years.

      Removing commodity exemptions that were established 
several decades ago, based on the economic and regulatory conditions 
that existed at the time. Those conditions no longer exist in today's 
consolidated freight rail transportation marketplace. These exemptions 
not only make it more difficult, time consuming and costly, but in 
reality, block shippers from utilizing existing regulatory procedures 
available to other shippers in seeking redress or relief from the STB, 
including from service problems.

      Prohibiting railroads from imposing increased rates 
during a STB-declared Emergency Service Order.

      Providing a five-year reauthorization for the STB, with 
an initial minimum annual authorization level of $48.184 million, along 
with annual increases commensurate with inflation, to enable the Board 
to fulfill its statutory responsibilities and to continue to meet the 
needs of stakeholders and the public.

    Thank you for your consideration.
        Sincerely,
                                           Herman Haksteen,
          President, Private Railcar Food and Beverage Association.

cc:  Members of the House Transportation and Infrastructure Committee
                               appendix 1
             Private Railcar Food and Beverage Association
      Shippers Snapshots of Poor Railroad Service and Added Costs
                          January 2023-Present
PRFBA Member A
Snapshot #1
    This PRFBA member is reliant on one Class I railroad and its yard 
operations in Minneapolis, MN.
      Over the last six months it has experienced missed 
switches and a drop off in communication, in many cases, coming close 
to shutting down its plant for lack of switching empty cars for 
loading.
         It monitors dwell time on its cars in the yard once they are 
released to the railroad. Currently there are over 10 cars over that 
are 100 hours delayed still in the yard. These delays create gaps in 
the rail pipeline for its downstream plant operations. This has 
required it to order trucks, reduce production, or eliminate production 
plans in some cases.
      One of the customers could not access its contracted 
lease track for the last 12 months because the railroad did not have 
the employment resources to make needed repairs to allow its customer 
access to the track.
      The railroad managers continue to call out lack of crews 
for normal switch jobs and ongoing maintenance.
Snapshot #2
    The PRFBA member is experiencing a service drop on the St. Paul, MN 
and Chicago, IL interchanges which involve three Class Is. Service is 
now five days vs. the initial 24-48 hours. The negative effects of this 
include:
      Created big gaps in rail pipeline--in many cases trucks 
are not an option, or, come at a huge premium because of the one way 
miles.
      Increased origin yard dwell time and destination yard 
dwell time.
      Created the need/perception that more private cars are 
needed.
      Forced it to consider what options it might have to keep 
running which all involve an expensive capital investment whether it 
be: 1) acquiring and using TrackMobile--equipment to move railcars; 2) 
leasing tracks on property to store more cars; or, 3) adding extra 
shift employees/operations to cover self-switching activities.
PRFBA Member B
Snapshot #1
    The PRFBA member is experiencing adverse impacts on delivering its 
Finished Goods to customers originating out of Muscatine, IA with one 
Class I. This railroad then ships these Finished Goods to multiple 
destinations involving three other Class Is. The adverse impacts 
include:
      Service
      +  Multiple weeks with poor service in filling our weekly system 
car order allotment from one Class I.
      Supply Chain Impact
      +  Required to change shipping modes to trucking and intermodal 
in order to get product downstream to service customers
      +  Estimated cost impact for this year has been $76k in order to 
support service.
      Waste
      +  Continue to see damage on loads outbound from Muscatine, IA 
involving one originating Class I and ending on a different Class I.
      +  Over the last six months have incurred $314,080.35 in damaged 
product.
Snapshot #2
    The PRFBA member experiencing adverse impacts related to shipments 
of its Raw Materials which are needed to process its food products.
    There is a particular problem with as supplier's product 
originating in Hastings, MN arriving in the PRFBA member's Champaign, 
IL plant involving two Class Is and one short-line railroad. The 
transit time has increased from 14 days to 18 days, which the PRFBA 
member learned only after repeated efforts in seeking an explanation--
caused by the short line limiting its train sizes into Chicago, IL.
    The PRFBA member uses three to five rail cars daily in processing 
just one of its products. The negative impacts of this longer transit 
time include:
      Higher railcar inventory in Champaign, IL rail yard which 
will increase the PRFBA member's demurrage costs.
      Reduced asset utilization for the supplier which puts 
increased pressure on the PRFBA member to turn cars faster and limits 
the supplier's shipments.
      Loss productivity among employees at the Champaign, IL 
plant. For instance, the daily monitoring of this one product has 
become necessary work for at least one full time Materials Planner when 
this same planner is responsible for 100 other products.
      Increased costs on back-up materials when the supplier's 
product does not arrive on time.

                                 
  Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick 
Larsen, Ranking Member, Committee on Transportation and Infrastructure, 
   and Hon. Troy E. Nehls, Chairman, and Hon. Donald M. Payne, Jr., 
  Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous 
    Materials, from Corey Rosenbusch, President and Chief Executive 
  Officer, The Fertilizer Institute, Submitted for the Record by Hon. 
                             Troy E. Nehls
                                                      May 11, 2023.
The Honorable Troy Nehls,
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
U.S. House of Representatives, Washington, DC 20515.
The Honorable Donald M. Payne, Jr.,
Subcommittee on Railroads, Pipelines, and Hazardous Materials,
U.S. House of Representatives, Washington, DC 20515.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, U.S. House of 
        Representatives, Washington, DC 20515.

Via Electronic Mail

Re:  Hearing on ``Getting Back on Track: Exploring Rail Supply Chain 
Resilience and Challenges''

    Dear Chairmen Graves and Nehls and Ranking Members Payne and 
Larsen:
    Thank you for holding today's hearing entitled ``Getting Back on 
Track: Exploring Rail Supply Chain Resilience and Challenges.'' The 
Fertilizer Institute (TFI) appreciates the opportunity to share 
information on what has been a challenging couple of years for 
fertilizer shippers.
    TFI represents companies that are engaged in all aspects of the 
fertilizer supply chain in the United States. The fertilizer industry 
ensures that farmers receive the nutrients they need to enrich the soil 
and, in turn, grow the crops that feed our nation and the world. 
Fertilizer is a key ingredient in feeding a growing global population, 
which is expected to surpass 9.5 billion people by 2050. Half of all 
food grown around the world is made possible through the use of 
fertilizer, hence its importance to farmers and food production. The 
U.S. fertilizer industry generates more than $130 billion in economic 
benefit each year and supports approximately 487,000 American jobs.
    On a ton-mile basis, over 60% of fertilizer moves by rail year-
round throughout the United States.
    Rail safety has understandably received a great deal of attention 
in recent months. Rail safety has long been a top priority for the 
fertilizer sector (more at https://
thefertilizerinstitute.sharepoint.com/:b:/g/EbWEtgucTqJPn1_VSLnke48BBQ
loTehyg5qA6ehCOhvJfA?e=izn9nq). Moreover, rail carriers have also done 
a lot in recent years to boost rail safety. As it pertains to rail 
safety, TFI supports any regulatory and legislative changes that boost 
freight rail safety while maintaining the viability of rail networks 
and their critical role to ensure U.S. farmers have the fertilizers 
they need.
    In addition to rail safety, the timeliness and reliability of 
fertilizer shipments is absolutely critical. Since 2017, severe rail 
carrier cost-cutting decisions have made rail service unreasonably 
poor. TFI has repeatedly urged rail carriers to hire more employees, so 
they can reasonably comply with their common carrier obligation (CCO). 
To their credit, carriers are trying to hire more employees, but they 
need to establish operational reliability and consistency throughout 
economic cycles. Rail metrics are improving, albeit during last year's 
economic slowdown and consequent declines in shipping volumes.
    Moreover, since 2000, rail carriers have been shifting costs to 
rail customers. From 2005 to 2017, rail rates for carloads of anhydrous 
ammonia, the building block of all nitrogen fertilizers and one of the 
most efficient sources of nitrogen for farmers, increased 206%, over 
three times more than the increase in the system-wide average rail rate 
per car.
    Congress should work with the Surface Transportation Board (STB) to 
clarify that reasonable rail service standards are part of the common 
carrier obligation (CCO). The STB is the primary regulatory agency 
responsible for rail rate and service matters. In addition to the CCO, 
practical regulatory reforms that improve STB oversight of the rail 
marketplace are needed. This includes reciprocal switching, final offer 
rate review, arbitration, emergency service, and enhanced first-mile 
last-mile data. STB modernization can help promote competitive freight 
rail service and this will boost our economy for all Americans.
    Thank you again for holding today's hearing and for the opportunity 
to submit this statement. TFI looks forward to continuing to work with 
you and your colleagues. Should you have any questions, please reach 
out to Justin Louchheim of my staff.
        Sincerely,
                                          Corey Rosenbusch,
                       President and CEO, The Fertilizer Institute.

                                 
  Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick 
Larsen, Ranking Member, Committee on Transportation and Infrastructure, 
   and Hon. Troy E. Nehls, Chairman, and Hon. Donald M. Payne, Jr., 
  Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous 
    Materials, from E. Nancy O'Liddy, Executive Director, National 
Industrial Transportation League, Submitted for the Record by Hon. Troy 
                                E. Nehls
                                                      May 11, 2023.
VIA EMAIL

The Honorable Sam Graves,
Chair,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Troy Nehls,
Chair,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Donald M. Payne, Jr.,
Ranking Member,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
    Dear Chairs Graves and Nehls, and Ranking Members Larsen and Payne:
    The National Industrial Transportation League (NITL), whose members 
spend billions of dollars shipping freight annually thanks, you for 
holding today's subcommittee hearing, ``Getting Back on Track: 
Exploring Rail Supply Chain Resilience and Challenges.''
    In debating what steps Congress needs and should take to strengthen 
our nation's freight rail network, NITL asks that your Committee also 
address the continued and systematic freight rail service problems that 
shippers are still experiencing, regardless of size, geographical 
location, or commodity. Rail-dependent or captive shippers are 
especially vulnerable to these problems.
    As described in further detail in Appendix 1, NITL's members and 
their customers continue to suffer economic harm due to unreliable rail 
service delivered at unreasonable rates.
    Thanks in large part to this Committee's past efforts, Congress 
passed the Surface Transportation Board (STB) Reauthorization Act of 
2015, P.L. 114-110, which expired on September 30, 2019. NITL 
recommends you build upon the basic reforms, process enhancements, and 
added transparency instilled in this law by:
      Removing commodity exemptions that were established 
several decades ago, based on the economic and regulatory conditions 
that existed at that time. Those conditions no longer exist in today's 
consolidated freight rail transportation marketplace. These exemptions 
not only make it more difficult, time consuming and costly, but in 
reality, block shippers from utilizing existing regulatory procedures 
available to other shippers in seeking redress or relief from the STB, 
including service problems.

      Clarifying the Common Carrier Obligation (CCO) statutory 
provision and providing the STB with both the direction and flexibility 
when determining if a railroad is meeting its CCO, especially in view 
of the industry's continued, systemic, freight rail carrier service 
failures.

      Increasing the STB's civil penalty authority. For the 
current 2023, the maximum amount allowed is under $10,000 for each 
knowing violation, per day. With the continued profits enjoyed by the 
rail carriers and their shareholders, this level of penalty is clearly 
insufficient to deter wrongful behavior. Furthermore, the Board has 
used this existing authority only once in the last ten years.

      Allowing private rail car owners or lessors to obtain 
compensation from railroads for improper use or delay of their rail 
cars, such as when railroads are slow to deliver or pick up rail cars. 
The railcar ownership market has changed during the past few decades, 
and shippers own or lease two-thirds of the freight rail cars in use 
today. In addition to the costs incurred in owning or leasing the 
railcars, these shippers are also responsible for the repair and 
maintenance of these railcars.

      Prohibiting railroads from imposing increased rates 
during a STB-declared Emergency Service Order.

      Providing a five-year reauthorization for the STB, with 
an initial minimum annual authorization level of $48.184 million, along 
with annual increases commensurate with inflation, to enable the Board 
to fulfill its statutory responsibilities and to continue to meet the 
needs of stakeholders and the public.

    Thank you for your consideration.
        Sincerely,
                                          E. Nancy O'Liddy,
     Executive Director, National Industrial Transportation League.

cc:  Members of the House Transportation and Infrastructure Committee
                               appendix 1
            National Industrial Transportation League Member
       Shipper Snapshot of Poor Railroad Service and Added Costs
                           April 2023-Present
    The following relays a series of bad decisions on the part of the 
railroad that not only resulted in misroutes and service delays on our 
cars, but also exacerbated the congestion:
    1.  When six private cars released empty on April 13 sat idle in 
Wisconsin for more than a week, we contacted the railroad. We were told 
the problem was congestion at the Clearing, IL yard in Chicago. When we 
talked with our railroad sales reps, we emphasized that empties are 
equally important to loaded cars, because the empties are the next 
loads, and we needed the cars to fill orders.

    2.  Three times, we were told the cars would move to Clearing that 
night, but that did not happen. In the meantime, four more cars were 
released. Finally, after about ten days, cars started to move to 
Clearing. Four of the original group moved correctly on an outbound 
train to the rail customer in the Joliet, IL area; however, six cars 
were put on an outbound train to Galesburg, IL (out-of-route). From 
what we were told, we concluded that the train to Galesburg had 
capacity to get the cars out of the way to relieve congestion at 
Clearing Yard.

    3.  Galesburg was also congested so the railroad reacted by putting 
the cars on an outbound train to Hastings, NE as part of the ``clean 
up'' efforts at Galesburg.

    4.  All the cars sent to Hastings are at various stages, enroute 
back to Galesburg. Around May 1, we were told the cars would be 
constructively placed at our plant on May 4:
        One car was just released from bad order at Lincoln, 
NE, on May 4, but there is no trip plan.
        A second car arrived at Lincoln on May 3; revised 
Estimated Time of Arrival (ETA) May 7.
        Four cars did make it to Galesburg and departed May 4: 
projected arrival, May 4.
Costs Incurred
    In addition to the service delays and potential opportunity costs 
outlined above, we, the rail shipper and rail customer, is incurring 
additional car costs.
    We alerted the railroads to mitigate any potential charges for 
mileage equalization for these excess empty miles. Below is a high-
level summary of the related cost components; of course, these costs 
are in addition to the freight rates. These estimates are based on the 
projected ETA of May 4, so there will be additional costs for the two 
lagging cars.
            1. Car Costs Total: 143 Car Days
            Two cars released on April 13, routed to Galesburg 
and Hastings, NE; return move Nebraska-Galesburg-Joliet, 22 days.
            One car released April 13, placed at Lorenzo April 
27, 8 days.
            Three cars released April 13, placed at Lorenzo 
April 25, 10 days.
            Three cars released at origin April 19, routed to 
Galesburg and Hastings, NE; return move Nebraska-Galesburg-Joliet, 
sixteen car days each.
            One car released at origin April 22, routed to 
Galesburg and Hastings, NE; return move Nebraska-Galesburg-Joliet, 
thirteen car days.
            2. Total 8,076 Excess Miles
               We are not including potential mileage equalization 
            charges in the cost calculations because we have already 
            taken action to mitigate those charges with the railroad.
               However, if included in the calculation, the cars that 
            moved to Hastings have involved:
            4,188 excess miles for the moves Milwaukee 
Galesburg-Hastings.
            3,888 excess miles for the returns Hastings-
Galesburg-Joliet.

               Not good for a railroad that is short of capacity.

                                 
Statement of the National Mining Association, Submitted for the Record 
                         by Hon. Troy E. Nehls
    The National Mining Association (NMA) appreciates the opportunity 
to provide input to the Committee on Transportation and Infrastructure 
regarding the state of freight rail transportation resilience and 
supply chains. The NMA's members support and conduct mining operations 
throughout the United States and rely on Class I rail carriers to 
transport mined products, including metallurgical coal for steelmaking 
and critical infrastructure, thermal coal for heating and energy both 
at home and to our allies abroad, and hardrock minerals such as copper 
that support renewable energy technologies, healthcare, and more.
    The NMA is the only national trade organization that serves as the 
voice of the U.S. mining industry and the hundreds of thousands of 
American workers it employs before Congress. We work to ensure America 
has secure and reliable supply chains, abundant and affordable energy, 
and the American-sourced materials necessary for U.S. manufacturing, 
national security and economic security, all delivered under world-
leading environmental, safety and labor standards. The NMA has a 
membership of more than 275 companies and organizations involved in 
every aspect of mining, from producers and equipment manufacturers to 
service providers.
                               Background
    Coal is a reliable and abundant energy resource--making up nearly 
90 percent of U.S. fossil energy reserves on a Btu basis. The demand 
for coal, especially coal exports, has remained steady and even 
increased. Russia's invasion of Ukraine has severely shaken global coal 
markets and last year triggered a spike in U.S. thermal coal exports to 
help alleviate Europe's tight energy supply and low natural gas 
reserves.
    Key infrastructure, including roads, railways, buildings, stadiums, 
bridges, airports and other structures are all supported by steel--a 
material dependent on metallurgical coal. Seventy percent of the 
world's steel requires coal for its production. The U.S. is one of the 
largest metallurgical coal exporters in the world and demand is 
expected to increase 20 percent by 2030 to keep up with the pace of 
aging infrastructure.
    American coal producers are almost entirely reliant on U.S. 
railroads to get products to market. For example, coal produced in the 
Powder River Basin can be transported over 1,000 miles, and as far away 
as Georgia, Oregon, Texas, and Canada. These operations run 24 hours a 
day, seven days a week and 365 days a year to meet the needs of 
consumers. According to the EIA, trains transport nearly 70 percent of 
coal deliveries in the United States at least part of the way from 
mines to consumers.\1\ Additionally, coal accounts for more rail 
tonnage for railroads than any other commodity.
---------------------------------------------------------------------------
    \1\ U.S. Energy Information Administration, Mining and 
Transportation of Coal, accessed Jan. 2023; https://www.eia.gov/
energyexplained/coal/mining-and-transportation.php
---------------------------------------------------------------------------
    Hardrock mined materials, including copper, nickel and lithium are 
widely recognized as commodities for which the demand will 
exponentially increase over the next several decades--in some cases 
between 500 and 1,000 percent. Key western mining states, such as 
Nevada, Arizona and Utah are all expected to play a pivotal role in 
securing our domestic supply chains for these and other minerals that 
are needed for renewable energy technologies, defense purposes and 
electric vehicles.
 Impacts to Hardrock and Coal Shippers and Energy Utilities from Rail 
           Transportation Supply Chain and Reliability Issues
    Coal and hardrock producers throughout the United States have 
experienced unpredictable and unreliable freight service for several 
years. Many coal producer operations are located in regions where the 
geography of the surrounding areas prevents expansion of storage areas 
for their product. Once coal storage areas are full, an operator must 
find alternative and costly means to move this product or stop mine 
production until rail service resumes.
    Several reliability issues with the rail transportation sector were 
raised in an oversight letter to the Surface Transportation Board 
(STB). U.S. Senators Kevin Cramer (R-N.D.) and Tammy Baldwin (D-Wis.) 
led a group of 19 bipartisan colleagues in a letter urging the STB to 
ensure reliable, consistent rail service for American industries and 
shippers.\2\ Several commodity specific issues were highlighted, 
including many specific to mining and energy utilities:
---------------------------------------------------------------------------
    \2\ Senator Kevin Cramer, Letter Presses Surface Transportation 
Board on Rail Disruptions, May 24, 2022; https://www.cramer.senate.gov/
news/press-releases/sens-cramer-baldwin-colleagues-press-surface-
transportation-board-on-rail-disruptions-urge-reliable-service-for-
american-industries-shippers

        Energy producers have had to curtail production due to 
        consistently delayed arrival of railcars, citing delays of 
        roughly two weeks or more.
          To illustrate this, a NMA member and coal producer in the 
        eastern U.S. quantified lost operational hours over the past 
        several years due to poor rail service. In 2021 the operator 
        lost over 600 hours of operating time, over 750 hours in 2022, 
        and if the trend continues in 2023, it will amount to over 370 
        hours of lost operating time by year end. These curtailed coal 
        shipments reduce weeks of local worker wages and create 
        unnecessary operating uncertainty for shippers and power 
        generating facilities.
          In Wyoming, coal mines increased production in 2022, but 
        estimates show that about 50 million tons of production failed 
        to happen because of a lack of rail service to get the coal 
        from the mines in Wyoming to power plants across the country. 
        The state of Wyoming is estimated to have lost about $100 
        million in revenues because of unrealized severance taxes from 
        that lost production in 2022.\3\
---------------------------------------------------------------------------
    \3\ Cowboy State Daily, Lack Of Trains Cost Wyoming $100 Million In 
Coal Revenue In 2022, Jan. 2023; https://cowboystatedaily.com/2023/01/
22/rail-service-cost-wyoming-100-million-in-coal-revenue-in-2022/

        Energy producers and manufacturers are facing repeated and 
        unpredictable lack of service.
          In 2022, the Navajo Transitional Energy Company (NTEC) saw 
        train performance at its Montana Spring Creek Mine fall well 
        short of required and historic levels. The rail carrier claimed 
        that the lack of service was part of the widely reported 
        service challenges all Class I rail carriers were experiencing. 
        Despite these broader challenges, rail carrier service in the 
        adjacent areas improved over prior years. Simultaneously, the 
        rail carrier significantly reduced the percentage of trains 
        available to NTEC and significantly increased the percentage of 
        train service to NTEC's competitors on this route. These supply 
        challenges and reliability issues caused NTEC to lose over $150 
        million in revenue and incur $15 million in demurrage penalties 
        for 2022.\4\
---------------------------------------------------------------------------
    \4\ NTEC, Navajo Transitional Energy Company Files Lawsuit Against 
BNSF For Breach Of Contract, Dec. 20, 2022; https://navenergy.com/
navajo-transitional-energy-company-files-lawsuit-against-bnsf-for-
breach-of-contract/

        Missed switching of railcars and reduced service days can force 
        manufacturers to use additional railcars to maintain the same 
        level of business, leading to increased cost for the shipper 
        and further strain on the rail network overall.\5\
---------------------------------------------------------------------------
    \5\ Senator Kevin Cramer, Letter Presses Surface Transportation 
Board on Rail Disruptions, May 24, 2022; https://www.cramer.senate.gov/
news/press-releases/sens-cramer-baldwin-colleagues-press-surface-
transportation-board-on-rail-disruptions-urge-reliable-service-for-
american-industries-shippers
---------------------------------------------------------------------------
          With coal consumption rebounding, energy utilities have 
        increased drawdowns of their coal stockpiles. In 2021, coal 
        inventories hit their lowest levels since the 1970s. Because of 
        these historically low inventories, some railroads like Union 
        Pacific anticipate continued demand for coal shipped by rail in 
        2023.\6\ The EIA finds that the cost of rail transport as a 
        share of the total delivered cost of coal to electric utilities 
        has increased from 36.6 percent in 2009 to 48.4 percent in 
        2020.\7\ During the same period, coal transport costs as a 
        percentage of total delivered cost by both truck and barge have 
        remained relatively stable.
---------------------------------------------------------------------------
    \6\ Argus Coal Daily, Issue 23-15, P. 2, Jan. 24, 2023.
    \7\ U.S. Energy Information Administration, Coal Transportation 
Rates to the Electric Power Sector; https://www.eia.gov/coal/
transportationrates/pdf/Table%201_Real.pdf

    Similar issues were again raised by coal shippers during an April 
2023 meeting of the Surface Transportation Board's Rail Energy 
Transportation Advisory Committee (RETAC). During the meeting, coal and 
energy shippers highlighted that while some market conditions 
fluctuate, service is not consistent and there is little recourse for 
poor rail service. In some cases, shippers can be held captive with no 
viable alternative shipping methods due to what is effectively a 
monopoly over rail transport in some regions of the U.S. The shippers 
specifically highlighted the following gaps in service reliability and 
accountability: \8\
---------------------------------------------------------------------------
    \8\ STB, RETAC Shipper Update, April 26, 2023; https://www.stb.gov/
wp-content/uploads/RETAC-Shipper-Statement-04262023-PDF.pdf

        The railroads continue to employ Precision Scheduled 
        Railroading to squeeze margins from shippers and reduce costs.
          Precision Schedule Railroading is a business model employed 
        by the Class I railroads to increase shareholder return and 
        dividends by squeezing and sometimes eliminating surge capacity 
        resources--including labor capacity and railcars--that would 
        serve to address fluctuations in demand. Whenever a weather 
        event, surge in demand, service interruption or labor issue 
        occurs, rail service is impacted. The rail carriers often blame 
        lack of service on their own labor force or events related to 
        the COVID-19 pandemic. While all industries have and are still 
        experiencing labor issues because of the pandemic, an update 
        provided to STB by the rail industry shows that total freight 
        rail employment in 2019 was near 148,000, with a majority of 
        the decline in employment occurring before 2020.\9\
---------------------------------------------------------------------------
    \9\ Association of American Railroads, ``Railroad Update,'' April 
26, 2023; https://www.stb.gov/wp-content/uploads/RETAC-April-26-2023-
Railroad-Statement-PDF.pdf

        Shippers remain exposed to demurrage and other charges for 
        issues beyond their control.
          Shippers invest millions in rail equipment and infrastructure 
        at no cost to the railroads to enable fast and efficient 
        deliveries and loading of commodities to and from their 
        facilities. However, there is no standard of reciprocity 
        between carriers and shippers when the carriers fail to provide 
        service. In one case, a NMA coal producer had to pay an extra 
        $4.1 million in demurrage fees due to a Class I railroad's 
        failure to load and transport coal to a shipping terminal for 
        nearly four months. In 2023, rail service delays almost caused 
        one hardrock mine processing plant to curtail production. To 
        avoid production curtailment, the mine had to find an offsite 
        storage solution for the ore at an added cost of $600,000. The 
        carriers remain effectively unaccountable for their service 
        problems.

        Service metrics that are being collected from the carriers do 
        not effectively illustrate the issue and therefore reporting 
        metrics should be expanded.
          The metrics do not include first and last mile data, except 
        for unit trains and intermodal movements, and such data can be 
        critical for the overall shipper experience. It does a shipper 
        little good if its cars move reasonably well from terminal to 
        terminal, but then sit at the terminal before they are 
        delivered, if local delivery switches are missed, or if a 
        shipper needs, say, five days a week service and receives only 
        three days of service. The overall volume of deliveries 
        requested by shippers can be critical.

    Additional feedback from NMA members through regular surveys to 
solicit feedback further illustrates the above findings included in the 
bipartisan congressional letter and RETAC shipper statement.
                               Conclusion
    Following an April 2022 STB hearing on ``Urgent Issues in Freight 
Rail Service,'' the STB ordered certain Class I railroads to submit 
service recovery plans and provide additional data to support 
improvement. The NMA appreciates this effort to hold Class I carriers 
accountable. However, rail service has not improved to the point where 
our members are guaranteed consistent and reliable service, as 
evidenced by STB's own data provided by the railroads, and NMA members' 
candid feedback on service issues. Further, on May 2, 2023, the STB 
ordered the extension of its temporary service metrics and employment 
reporting period for the Class I's to Dec. 31, 2023. This is a strong 
indicator of the current situation.
    The NMA urges Congress to use its authority to take additional 
action to confront these ongoing service issues that hinder U.S. energy 
and mineral supply chains. We must be able to move responsibly sourced 
domestic coal to the utilities that power communities and heat and cool 
our homes. We must be able to transport metallurgical coal to the 
industries that repair roads, bridges and buildings to keep our 
infrastructure safe. We must ensure efficient delivery of hardrock 
minerals to market that underpin nearly every U.S. industry and enable 
technological innovation.
    The NMA appreciates the committee's attention to these issues, and 
we look forward to engaging and supporting the committee in its effort 
to address these issues.

                                 
  Letter of May 11, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick 
Larsen, Ranking Member, Committee on Transportation and Infrastructure, 
   and Hon. Troy E. Nehls, Chairman, and Hon. Donald M. Payne, Jr., 
  Ranking Member, Subcommittee on Railroads, Pipelines, and Hazardous 
    Materials, from Ann Warner, Spokesperson, Freight Rail Customer 
        Alliance, Submitted for the Record by Hon. Troy E. Nehls
                                                      May 11, 2023.
VIA EMAIL

The Honorable Sam Graves,
Chair,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Troy Nehls,
Chair,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
The Honorable Donald M. Payne, Jr.,
Ranking Member,
Railroads, Pipelines, and Hazardous Materials Subcommittee, House 
        Transportation and Infrastructure Committee, U.S. House of 
        Representatives, Washington, DC 20515.
    Dear Chairs Graves and Nehls, and Ranking Members Larsen and Payne:
    The Freight Rail Customer Alliance (FRCA)--an umbrella organization 
including trade associations representing more than 3,500 
manufacturing, agriculture, chemical and alternative fuels companies, 
electric utilities, and their customers--thanks you for holding today's 
subcommittee hearing, ``Getting Back on Track: Exploring Rail Supply 
Chain Resilience and Challenges''.
    In debating what steps Congress need and should take to strengthen 
our nation's freight rail network, FRCA asks that your Committee also 
address the continued and systematic freight rail service problems that 
shippers are still experiencing, regardless of size, geographical 
location, or commodity. Rail-dependent or captive shippers are 
especially vulnerable to these problems.
    As described in further detail in the attached Utility Members' 
Statement presented at the meeting of the Surface Transportation 
Board's (STB) Rail Energy Transportation Advisory Committee held on 
April 26, 2023 (Appendix 1) and the 6th On Time Performance Utility 
Survey (Appendix 2) conducted by FRCA, National Coal Transportation 
Association, and National Rural Electric Cooperative Association, our 
nation's utilities and their ratepayers continue to suffer economic 
harm due to unreliable rail service delivered at unreasonable rates.
    Thanks in large part to this Committee's past efforts, Congress 
passed the STB Reauthorization Act of 2015, P.L. 114-110, which the 
authorization expired on September 30, 2019. FRCA recommends you build 
upon the basic reforms, process enhancements, and added transparency 
instilled in this law by:
      Clarifying the Common Carrier Obligation (CCO) statutory 
provision and providing the STB with both the direction and flexibility 
when determining if a railroad is meeting its CCO, especially in view 
of the industry's continued, systemic, freight rail carrier service 
failures.
      Allowing private rail car owners or lessors to obtain 
compensation from railroads for improper use or delay of their rail 
cars, such as when railroads are slow to deliver or pick up rail cars. 
The railcar ownership market has changed during the past few decades, 
and shippers own or lease two-thirds of the freight rail cars in use 
today. In addition to the costs incurred in owning or leasing the 
railcars, these shippers are also responsible for the repair and 
maintenance of these railcars.
      Prohibiting railroads from imposing increased rates 
during a STB-declared Emergency Service Order.
      Increasing the STB's civil penalty authority. For the 
current 2023, the maximum amount allowed is under $10,000 for each 
knowing violation, per day. With the continued profits enjoyed by the 
rail carriers and their shareholders, this level of penalty is clearly 
insufficient to deter wrongful behavior. Furthermore, the Board has 
used this existing authority only once in the last ten years.
      Removing commodity exemptions that were established 
several decades ago, based on the economic and regulatory conditions 
that existed at the time. Those conditions no longer exist in today's 
consolidated freight rail transportation marketplace. These exemptions 
block shippers from utilizing existing regulatory procedures available 
to other shippers in seeking redress or relief from the STB, including 
from service problems.
      Providing a five-year reauthorization for the STB, with 
an initial minimum annual authorization level of $48.184 million, along 
with annual increases commensurate with inflation, to enable the Board 
to fulfill its statutory responsibilities and to continue to meet the 
needs of stakeholders and the public.

    Thank you for your consideration.
        Sincerely,
                                                Ann Warner,
                      Spokesperson, Freight Rail Customer Alliance.

cc:  House Transportation and Infrastructure Committee Members

About FRCA
The Freight Rail Customer Alliance (FRCA), www.railvoices.org, is an 
umbrella membership organization that includes large trade associations 
representing more than 3,500 electric utility, agriculture, chemical, 
and alternative fuel companies, and their consumers. The mission of 
FRCA's growing coalition of industries and associations is to obtain 
changes in Federal law and policy that will provide all freight 
shippers with reliable rail service at competitive prices.
                               appendix 1
                   Utility Shipper Members' Statement
                      Surface Transportation Board
               Rail Energy Transportation Advisory Board
                             Spring Meeting
                             April 26, 2023
                  Surface Transportation Board Offices
                             Washington, DC
    Distinguished STB Board Members and RETAC members,
    The shippers on this committee appreciate the opportunity to meet 
with you to voice our concerns regarding what continues to be 
unpredictable and unreliable railroad service for utilities, biofuels 
producers, energy groups and rail car owners. We wish for this 
statement to present the Board with the perspective of these shipper 
groups of the primary issues driving the rail service problems and the 
issues we see with the railroad reporting metrics requested by the 
Board.
    While some market conditions have fluctuated in recent months, 
there are still many key service issues that more than warrant Board 
attention. We have prepared a detailed written appendix, but in the 
interest of time, we will simply identify them.
      Railroad performance should consider not only the metrics 
of trains and cars that do arrive, but also the requested and required 
volume demand that goes unmet.
      The railroads continue to employ PSR to squeeze margins 
from shippers and reduce costs, rather than meet shipper needs and 
maintain the surge capacity needed to overcome disruptions in service. 
The railroads also continue to suffer from a labor shortage.
      Shippers remain exposed to demurrage and other charges 
when things go wrong on their end, or for things beyond their control, 
while the carriers remain effectively unaccountable for their ongoing 
service problems.
      Continued lack of communication to customers from 
railroads
      Service metrics that are being collected from the 
carriers should be enhanced.
      Service metrics will not provide a complete picture when 
they omit first/last mile data.
      Shippers remain unable to obtain adequate information 
from railroads. Automated and generic chat features are no substitute 
for being able to speak to a knowledgeable and experienced railroad 
rep.

    In summary, the shippers of RETAC respectfully request the 
railroads and the Board continue to engage in real data-driven 
discussions in these committee meetings. We hope that the railroads 
will be prepared to present data that addresses the gap between volume 
nominations and actual deliveries. As we have stated before, we believe 
this committee should focus on the relationship between forecasts and 
deliveries, including how forecasts compare to volumes, the accuracy of 
the customer's forecast, railroad feedback sent back to the shipper, 
and railroads performance versus the forecast. And we look forward to 
the work done by the Board and this committee to address enhancement of 
the rail carrier and shipper forecasting communication effort.
    Thank you for your engagement and concern of rail service and 
shipper issues.
Appendix to Shipper Summary Issues:
Communication to Customers from Railroads.
    The railroads' electronic customer interfaces rely heavily on one-
size fits all on-line menus that are a poor fit for shipper needs. 
There may be an alternative ``chat'' feature for shippers to submit 
more individualized questions, but the operators are often unfamiliar 
with an individual shipper's needs, or shipper needs in general. 
Railroads use this feature to manage or track each request or issue 
characterized as ``cases.'' Too often, there are too many cases 
submitted that can be responded to in a reasonable time. And local 
railroad operating officials have verified they are not able to respond 
to every case. The railroads also point to the use of the case 
management system to deny shipper invoice claims. If you neglected to 
create a case for an issue, the claim may be treated with less 
credibility. Often the drop down menus are inadequate to cover unique 
situations that exist or simple requests that used to be handled via a 
phone call or email to an individual on the carrier's coal desk or 
dispatch center who knew the facility and its location and specific 
needs. The systems appear designed to manage shippers, not address 
shipper needs.
Service Metrics.
    The Board should continue to request key metrics from the 
railroads. Shippers believe the data could be improved to match more 
closely what shippers are experiencing in terms of service, and not 
just selective metrics such as velocity and dwell time. Shippers 
believe that reliance on averages fails to capture variations in 
service. The metrics could be broken down more by region and commodity 
type and possibly even car type. Shippers need consistency of service 
for planning and reliability purposes.
    Also, the metrics do not include first and last mile data, except 
for unit trains and intermodal movements, and such data can be critical 
for the overall shipper experience. It does a shipper little good if 
its cars move reasonably well from terminal to terminal, but then sit 
at the terminal before they are delivered, if local delivery switches 
are missed, or if a shipper needs, say, five days a week service and 
receives only three days of service. The overall volume of deliveries 
requested by shippers can be critical.
Delivery Volumes.
    The reported data focuses on trains and cars that actually arrive, 
but largely ignores the additional volumes that shippers needed and 
required, but the railroads were unable to even attempt to move. Over 
the past couple of years, energy shippers have experienced the 
railroads parking train sets or cars to relieve congestion on the 
system. No existing reporting metric attempts to address this issue. 
Parking trainsets may have some helpful impact on velocity or dwell 
time information that gets reported, but it may also reduce the volume 
of ultimate deliveries, which means that shippers are not getting the 
volume of product that they require. There are many shippers that 
require regularity in deliveries and pickups, but other shippers are 
able to stockpile deliveries. In essence, the railroads get to grade 
themselves on a curve of their own choosing in terms of the trains that 
are running, not the additional trains that may be needed. It may be 
helpful to see in the metrics how many cars or trains were parked 
against what volumes were not shipped per commodity group. A related 
problem is that much of the data is reported as averages, which 
conceals the variation inherent in the average. As noted, shippers vary 
in their ability to tolerate variations. A measure such as a standard 
deviation would help to indicate the representatives of the average.
Precision Scheduled Railroading.
    The majority of the Class 1's continue to use Precision Scheduled 
Railroading (PSR) to enhance railroad shareholder revenues at the 
expense of the customer base. The railroads have fixated on reducing 
railroad operating ratios, largely by squeezing increased operating 
margins out of shippers, rather than to improve service, pass savings 
on to shippers, strengthen resiliency, or grow volumes.
    Shippers and railroads worked together in the past to manage 
fluctuations in demand driven by forces beyond our control. However, 
with the advent of PSR, shippers have noted the railroads have 
eliminated resources to respond to surges in demand. They used to be 
able to gather forces and respond to variances in demand that occurred. 
Now, they seem to have taken all surge capacity away. Whenever there is 
any weather event, surge in demand, service interruption or labor 
issue, rail service is impacted. The carriers often point blame for 
lack of service on their own labor force, as if the railroads have no 
control over their headcounts. Shippers know from experience that rough 
weather did not used to have such an adverse effect on rail service. In 
fact, we have been told former CNW (now UP) actually used to have a 
sign that read, ``Rough winters are no excuse.'' The railroads also 
appear to have no ability to make up deficits. Shippers may try to 
shift forward missed shipments or defer nominations to future periods. 
Often these shipments must be canceled if they cannot be delivered at 
all and then the entire supply chain suffers.
Accountability for Service Failures.
    While shippers have continued to rack up additional costs for 
undelivered and delayed volumes, there appears to be no accountability 
for the railroads. Shippers invest millions in rail equipment and 
infrastructure at no cost to the railroads to enable fast and efficient 
deliveries and loading of commodities to and from their facilities. 
However, there is no standard of reciprocity between carriers and 
shippers when the carriers fail to provide service. Poor rail service 
continues to have massive cost impacts for shippers who have no means 
of penalizing the carrier for lack of or missed deliveries. Meanwhile, 
the rail carriers are able to issue demurrage and other invoices 
penalizing shippers based on some computer algorithm that requires time 
and expense for the shipper to review and dispute, and in many cases 
may be found unjustified.
                               appendix 2
                     Freight Rail Customer Alliance
                National Coal Transportation Association
            National Rural Electric Cooperative Association
             6th Utility On-Time Performance Shipper Survey
    National Coal Transportation Association (NCTA), Freight Rail 
Customer Alliance (FRCA) and National Rural Electric Cooperative 
Association (NRECA) have worked together since 2019 to collect data 
from shipper members of their perspective of railroad performance.
    The data is provided on a voluntary basis by shipper members. The 
identity of shippers is not disclosed but we do include the individual 
railroads and mine regions in the results. The data shows the different 
shipper experiences with their respective transit time service metrics. 
The data has become a useful tool in regard to logistics and planning 
for shippers, and has been used in comments submitted to the Surface 
Transportation Board and the Rail Energy Transportation Advisory 
Committee and Government Accountability Office.
    The results from the latest survey effort from July 2022-December 
2022 (and also in comparison with the first half of 2022) represents 31 
plants (45 plants from the first half of 2022), 6 coal supply regions, 
Class 1 railroads, multi-line and shortline movements, mine to plant 
transit time per serving railroad and coal mines.
    [Editor's note: The 19-slide presentation of the On-Time 
Performance Shipper Survey is retained in committee files and is 
available online at http://railvoices.org/wp-content/uploads/FRCA-
Submitted-Statement-House-Railroad-Sub-May-11-2023-SUBMITTED.pdf.]

    Mr. Nehls. It is good to see you, Mr. Larsen, the ranking 
member of this full committee. I recognize you for 5 minutes, 
sir.

 OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING 
     MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

    Mr. Larsen of Washington. Thank you, Chair, and thank you, 
Ranking Member Payne, for holding this hearing.
    Today, we will hear from witnesses about how to improve 
rail service. But it has been more than 3 months since the 
Norfolk Southern derailment in East Palestine, Ohio, which 
occurred on February 3, and this committee has yet to hold a 
hearing to examine what happened.
    While the Norfolk Southern derailment in East Palestine 
focused the Nation's attention on rail safety, it was not 
isolated or rare. Since that derailment, a Norfolk Southern 
train conductor was killed in a rail accident in Cleveland, 
Ohio; the town of Raymond, Minnesota, had to be evacuated due 
to the derailment of a BNSF train carrying highly flammable 
material; and a BNSF derailment on the Swinomish Reservation in 
Skagit County, in my district, spilled 3,500 gallons of diesel 
fuel near Padilla Bay in my district.
    Chairman Graves and Chairman Nehls, I just, again, urge you 
to hold a hearing on rail safety and to schedule consideration 
of rail safety legislation. Just yesterday, as we know, the 
Senate Commerce Committee acted on bipartisan rail safety 
legislation. This committee should do the same.
    I commend the Department of Transportation for using its 
authority to issue interim safety advisories, as I urged in a 
letter that Ranking Member Payne led and was signed by 70 of 
our House colleagues. But we can and must do more.
    Over 400 local elected officials from across the country 
sent a letter to our committee in March asking for action on 
rail safety.
    Specifically, we need to focus on long trains and the 
impacts they have on our communities. I have heard from the 
leaders of more than 12 communities in Washington State, 
including Mayor Nehring of Marysville, Mayor Boudreau of Mount 
Vernon, and Deputy Mayor May of Blaine, all in my district, 
about how first responders have difficulty reaching individuals 
in need of emergency care due to long trains blocking 
crossings.
    The trends in rail safety and rail service go hand in hand. 
While safety has been in the forefront lately, employees and 
shippers have complained of fewer resources and poor rail 
safety for many years.
    The Surface Transportation Board took the extraordinary 
step of requiring service recovery plans from the four largest 
Class I railroads--Union Pacific, BNSF, CSX, and Norfolk 
Southern--to address chronic problems last year, and just 
extended the requirement last week.
    The agriculture and energy sectors have been particularly 
hard hit with irregular rail service. This is impacting 
communities across the country and our overall economy.
    Yesterday, the STB held a hearing to determine if a Tribal 
company in New Mexico should receive an emergency rail service 
order to ensure that it is able to deliver their product to 
their customers.
    After years of letting rail workers go, including doubling 
down on furloughs during the pandemic, Class I railroads relied 
on congestion embargoes to compensate for having gutted their 
own workforce. The railroads issued over 1,000 congestion 
embargoes last year alone, and every one of those large 
railroads continue to use this practice, except Canadian 
Pacific.
    We can't expect more freight to move by rail in more 
places--which I support as part of a cleaner, greener, surface 
transportation network--if railroads continue with congestion 
embargoes, which effectively tell customers to temporarily stop 
shipping by rail.
    I urge the railroads to focus on the customers, the 
communities they pass through, and their employees. The long-
term health and resiliency of the supply chain and the economy 
depends on a stable and functioning freight rail system. As we 
have seen over and over, a stable and functioning freight rail 
system depends on hard-working railroaders. Class I railroad 
performance on both safety and service in recent years has 
shown that business as usual is not working.
    A stark example of the dysfunction occurred last year when 
after years of cutting the workforce to the bone, Class I 
railroads were unable to negotiate contracts with their own 
workers, and Congress had to step in to keep freight rail 
service running.
    Class I's have to hire and retain more workers, return 
locomotives and rail yards to service, and increase training 
for workers, especially the new, inexperienced ones, so they 
can provide more and safer service across the country.
    The Bipartisan Infrastructure Law is providing historic 
investments in our Nation's infrastructure, and much of the 
material to build that infrastructure--roads, bridges, 
airports, transit systems, and rail systems--will be 
transported by rail. The need for rail service will continue to 
grow as Bipartisan Infrastructure Law dollars flow to States, 
to cities, and to counties over the next 4 years.
    So, I look forward to hearing from all of our witnesses 
today on their suggestions to shore up our supply chain and 
improve rail service to move America forward.
    With that, I yield back.
    [Mr. Larsen of Washington's prepared statement follows:]

                                 
 Prepared Statement of Hon. Rick Larsen, a Representative in Congress 
    from the State of Washington, and Ranking Member, Committee on 
                   Transportation and Infrastructure
    Thank you, Chairman Nehls and Ranking Member Payne, for holding 
this hearing.
    Today we will hear from witnesses about how to improve rail 
service.
    It has been more than three months since the Norfolk Southern 
derailment in East Palestine, Ohio--which occurred on February 3--and 
this Committee has yet to hold a hearing to examine what happened.
    While the Norfolk Southern derailment in East Palestine focused the 
nation's attention on rail safety, it was not an isolated or rare 
incident. Since that derailment: a Norfolk Southern train conductor was 
killed in a rail accident in Cleveland, Ohio; the town of Raymond, 
Minnesota had to be evacuated due to the derailment of a BNSF train 
carrying highly flammable material; and a BNSF derailment on the 
Swinomish Reservation in Skagit County spilled 3,500 gallons of diesel 
fuel near Padilla Bay in my district.
    Chairman Graves and Chairman Nehls, I urge you to hold a hearing on 
rail safety and to schedule consideration of rail safety legislation. 
Just yesterday, the Senate Commerce Committee acted on bipartisan rail 
safety legislation, and this Committee should do the same.
    I commend the Department of Transportation for using its authority 
to issue interim safety advisories, as I urged in a letter led by 
Ranking Member Payne and signed by 70 of our House colleagues. But we 
can and must do more.
    Over 400 local elected officials from all across the country sent a 
letter to our Committee in March asking for action on rail safety.
    Specifically, we need to focus on long trains and the impacts they 
have on our communities. I have heard from leaders of more than 12 
communities in Washington, including Mayor Nehring of Marysville, Mayor 
Boudreau of Mt. Vernon, and Deputy Mayor May of Blaine in my district, 
about how first responders have difficulty reaching individuals in need 
of emergency care due to long trains blocking crossings.
    The trends in rail safety and rail service go hand in hand--while 
safety has been in the forefront lately, employees and shippers have 
complained of fewer resources and poor rail service for many years.
    The Surface Transportation Board took the extraordinary step of 
requiring service recovery plans from the four largest Class I 
railroads--Union Pacific, BNSF, CSX and Norfolk Southern to address 
chronic problems last year, and just extended the requirement last 
week. The agriculture and energy sectors have been particularly hard 
hit with irregular rail service.
    This is impacting communities across the country and our overall 
economy. Yesterday the STB held a hearing to determine if a Tribal 
company in New Mexico should receive an emergency rail service order to 
ensure it is able to deliver their product to their customers.
    After years of letting rail workers go, including doubling down on 
furloughs during the pandemic, Class I railroads relied on ``congestion 
embargoes'' to compensate for having gutted their own workforce. The 
railroads issued over 1,000 congestion embargoes last year alone, and 
every one of the large railroads continue to use this practice except 
Canadian Pacific.
    We can't expect more freight to move by rail in more places--which 
I support as part of a cleaner, greener surface transportation 
network--if railroads continue with congestion embargoes, which 
effectively tell customers to temporarily stop shipping by rail.
    I urge the railroads to focus on their customers, the communities 
they pass through, and their employees. The long-term health and 
resiliency of the supply chain and economy depends on a stable and 
functioning freight rail system. As we've seen over and over, a stable 
and functioning freight rail system depends on its hard-working 
railroaders. Class I railroad performance on both safety and service in 
recent years has shown business as usual is not working.
    A stark example of the dysfunction occurred last year when after 
years of cutting its workforce to the bone, the Class I railroads were 
unable to negotiate contracts with their own workers and Congress had 
to step in to keep freight rail service running.
    Class I railroads have to hire and retain more workers, return 
locomotives and rail yards to service, and increase training for 
workers, especially the new and inexperienced ones, so they can provide 
more and safer service across the country.
    The Bipartisan Infrastructure Law is providing historic investments 
in our nation's infrastructure and much of the material to build that 
infrastructure--roads, bridges, airports, transit systems, and rail 
systems--will be transported by rail.
    The need for rail service will continue to grow as Bipartisan 
Infrastructure Law dollars flow to states, cities, and counties over 
the next four years.
    I look forward to hearing from the witnesses today on their 
suggestions to shore up our supply chain and improve rail service to 
move America forward.

    Mr. Nehls. Thank you, Ranking Member Larsen.
    I would like to now welcome our witnesses, and thank you 
all for being here today. Briefly, I will take a moment to 
explain the lighting system in front of you. Three lights: 
Green, you are good to go, yellow means you are running out of 
time, and red means [stop gesture], yeah.
    I ask unanimous consent that the witnesses' full statements 
be included in the record.
    Without objection, so ordered.
    And as your written testimony has been made part of the 
record, the subcommittee asks that you, again, limit your oral 
remarks to 5 minutes.
    And with that, Mr. Jefferies, you are recognized for 5 
minutes for your testimony.

   TESTIMONY OF IAN JEFFERIES, PRESIDENT AND CHIEF EXECUTIVE 
   OFFICER, ASSOCIATION OF AMERICAN RAILROADS; CHUCK BAKER, 
     PRESIDENT, AMERICAN SHORT LINE AND REGIONAL RAILROAD 
ASSOCIATION; CHRIS JAHN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
       AMERICAN CHEMISTRY COUNCIL; MARC SCRIBNER, SENIOR 
  TRANSPORTATION POLICY ANALYST, REASON FOUNDATION; AND GREG 
  REGAN, PRESIDENT, TRANSPORTATION TRADES DEPARTMENT, AFL-CIO

   TESTIMONY OF IAN JEFFERIES, PRESIDENT AND CHIEF EXECUTIVE 
           OFFICER, ASSOCIATION OF AMERICAN RAILROADS

    Mr. Jefferies. Thank you.
    Good afternoon, and thank you for the opportunity to be 
here today on behalf of America's freight railroads. Railroads 
are proud to serve the Nation's economy, enabled by our 
dedicated employees, sustained investments, and an unwavering 
commitment to safety. Through economic ups and downs, our 
industry steadfastly works to deliver goods Americans rely on, 
and today we are positioned for growth.
    Taking stock of 2023 so far, volumes reflect economic 
conditions. We have seen a decrease in container traffic, 
driven by import declines and inventory gluts. However, the 
intermodal system is fluid and primed for a rebound.
    Carload traffic is mixed. Two examples: Auto volumes are up 
10 percent as chip shortages have eased, while chemical 
shipments are down 6 percent. Overall, carload traffic is 
slightly higher than it was a year ago.
    Servicewise, we do continue to see some improvements, but 
more progress is necessary to get predictability and 
reliability for all customers across the network to expected 
levels.
    Working with partners to better process cargo in and out of 
terminals, increasing shipment transparency, and reducing dwell 
time will further these gains.
    The outlook is strong for continued improvement and future 
growth, which is a consistent theme across the industry, but it 
hinges on four interrelated factors.
    First, safety, which is an overall strength, but also a 
continuous opportunity for this industry. Absolutely, accidents 
still happen, and we understand fully the impact even one 
accident can have on a community. That is why we continue to 
work to drive accident numbers lower.
    To be clear, rail is by far the safest way to move goods on 
land, especially hazardous materials. Per carload, the hazmat 
accident rate is down 78 percent since the year 2000, and 2022 
saw the lowest number of hazmat incidents in the industry's 
entire history. Additionally, FRA data show that the mainline 
accident and employee injury rates for 2022 continued an era of 
all-time lows. And still, railroads continue proactive action, 
such as installing more wayside detectors, lowering alert 
thresholds, and developing next-gen technologies to reduce risk 
in the system and drive down incidents even further.
    Our track record is undeniable. We invest in safety because 
it is the right thing to do. Because a well-maintained railroad 
is a safe railroad, the industry continues to spend heavily on 
its physical network, the Nation's highest rated infrastructure 
by the American Society of Civil Engineers.
    Capital spending, as a percent of revenue, was 18.4 percent 
in the past 10 years, six times that of the average U.S. 
manufacturer. In 2022, spending totaled $24 billion. That is $1 
billion more than the combined investments Congress made this 
year in rail and multimodal programs in the IIJA and omnibus 
combined. Ongoing permanent efforts in Congress would enable 
more efficient and effective investments, particularly to 
upgrade and expand the network.
    Next, key to all aspects of our business, but especially 
safety and service, is an appropriately staffed railroad 
comprised of our highly skilled and dedicated workforce. 
Railroad is demanding work, and it should be appropriately 
rewarded. The historical deals reached last year with 
employees, carrying the largest pay increase in 50 years, and 
provisions to address quality-of-life matters and schedule 
predictability, reflect this. Post-pandemic hiring continues 
with our employee base at the highest it has been in over 3 
years. Building workforce resiliency is a primary theme amongst 
rail leaders to more easily manage economic ups and downs.
    Class I railroads continue to strike new leave agreements 
across all crafts by sticking to the fundamentals of local 
collective bargaining.
    Finally, the last leg of the chair of ensuring rail can 
continue to thrive as a key part of the supply chain is 
sensible public policy. In short, policies emanating from 
Congress, DOT, or the Surface Transportation Board should be 
true to their stated goal.
    Perhaps overly simplistic, policies should be designed to 
meet a specific and identified problem. To that end, whether 
tackling rail safety, supply chain, or economic regulation, the 
fundamentals are the same. Policies should be evidence based 
and pressure tested to ensure it is properly supported by sound 
data. If you can't answer what problem a policy is fixing, then 
it probably shouldn't be included in a piece of legislation. 
But if we collectively follow these guidelines, there are 
countless issues we can tackle together. Let's build on that 
and not go backwards.
    And thank you for your time today.
    [Mr. Jefferies' prepared statement follows:]

                                 
  Prepared Statement of Ian Jefferies, President and Chief Executive 
               Officer, Association of American Railroads
                              Introduction
    On behalf of the members of the Association of American Railroads 
(AAR), thank you for the opportunity to testify on the supply chain 
challenges the rail industry and the nation are working diligently to 
overcome. AAR's members account for the vast majority of America's 
freight railroad mileage, employees, and traffic. Together with their 
Mexican and Canadian counterparts, U.S. freight railroads form an 
integrated, continent-wide network that provides the world's best rail 
service.
    Supply chains are complex systems driven by a variety of global and 
domestic stakeholders, including railroads. For freight to be delivered 
safely and efficiently, all participants must take timely, appropriate 
actions in a precisely coordinated sequence. Freight railroads provide 
an indispensable, 24/7 link, connecting raw material suppliers, 
manufacturers, processors, ports, retailers, wholesalers, and consumers 
across the country and with markets overseas over a network spanning 
close to 140,000 miles. The operations and capital investments of 
America's major freight railroads support a million or more jobs and 
several hundred billion dollars in nationwide economic activity, wages, 
and taxes.
    Unprecedented events in 2021 and 2022 caused major global supply 
chain dislocations that impacted every business, industry, and family 
in the United States and the rest of the world. While those pressures 
have mostly abated, U.S. freight railroads continue to face three 
primary, inextricably linked opportunities: furthering safety 
advancement, improving employee relations, and providing strong service 
to our customers. In this testimony, I will review each opportunity and 
outline proactive steps that railroads are taking to meet them. 
Finally, I will discuss the potential impact of certain policies being 
considered by Congress on railroads and overall supply chain 
performance.
   Freight Railroads' Efforts to Further Improve the Safety of Their 
                               Operations
    Let me make absolutely clear at the outset: for freight railroads, 
pursuing safe operations is not an option; it's an imperative. 
Railroads are proud of their current safety record. However, earlier 
this year, we all saw the impact a train derailment can have on a 
community, and we are committed to continuing our industry's efforts to 
prevent what happened in East Palestine from happening elsewhere. Every 
rail accident is one too many, and railroads' ultimate goal is to 
eliminate accidents altogether.
FRA Data Shows the Past Decade is the Safest in Rail History
    Newly released data from the Federal Railroad Administration (FRA) 
confirms that 2022 was the safest year ever for incidents involving 
hazardous materials and for mainline derailments:
      The overall train accident rate was 28 percent lower in 
2022 than in 2000.
      The accident rate for trains traveling on railroad 
mainlines--that is, outside of rail yards--was 44 percent lower in 2022 
than in 2000. For Class I freight railroads, the mainline accident rate 
was down 49 percent from 2000 and set a new record low in 2022.
      The overall train derailment rate fell 31 percent from 
2000 to 2022.
      The rate of train accidents caused by track defects fell 
55 percent from 2000 to 2022 and set a new record low in 2022.
      The rate of accidents caused by equipment defects (mainly 
locomotives and freight cars) fell 21 percent from 2000 to 2022.
      Based on preliminary data, the hazardous materials 
accident rate in 2022 was 78 percent lower than in 2000 and set at an 
all-time record low.
      From 2000 through 2022, the employee injury rate was down 
49 percent. For Class I railroads, the decline was 63 percent, with 
2022 setting a new record low. According to data from the Department of 
Labor, railroads have lower employee injury rates than most other major 
industries, including trucking, airlines, agriculture, mining, 
manufacturing, and construction--even lower than grocery stores.

    Railroads also acknowledge room for further improvement remains. 
Today, over 95 percent of rail-related fatalities are due to 
trespassing or occur at grade crossings. The combined total of 
trespasser and suicide fatalities for 2022 increased by 4 percent from 
2021. Grade crossing collisions were down 23 percent last year compared 
to 2000, but along with trespass incidents, these preventable accidents 
remain persistent challenges across the rail industry.
    However, FRA data makes clear that our employees' strong safety 
culture, paired with the industry's sustained, disciplined investments 
in maintenance and technologies that target the primary causes of 
accidents, deliver meaningful safety results. Every train accident is 
one too many, and the need to make progress in the march to zero 
accidents is ever present.
Railroads are Taking Proactive Steps to Further Improve Safety
    Freight railroads do not need any additional incentive to be safe--
it is core to all that we do. As such, when investigation into the 
recent derailment in East Palestine demonstrated areas where additional 
work was necessary to drive down risk and enhance safety, railroads 
took voluntary, proactive, data-driven steps to ensure a similar 
accident would never happen again.
    Railroads have already announced a set of actions they are taking 
to deploy the tools available today, with a keen focus on detectors. 
Railroads are installing approximately 1,000 additional wayside hotbox 
detectors on the national network, standardizing critical alert 
thresholds for these systems, and analyzing and adopting new industry 
standards for trending analysis protocols to preempt potential 
problems.
    Railroads will also continue to invest in modern technologies and 
equipment, such as automated track inspection, implement safety 
protocols, and prioritize safety training for their employees. The next 
great leap forward in safety will depend on the ability of railroads to 
innovate and deploy new technologies, but achieving the maximum benefit 
from these new technologies will require regulatory flexibility.
    Railroads will also train roughly 20,000 first responders this year 
in local communities across the country on accident mitigation. In 
addition, the industry will facilitate the training of 2,000 first 
responders at the Security and Emergency Response Training Center 
(SERTC) in Colorado, which offers an immersive experience with full-
scale training scenarios that prepare first responders for real-world 
surface transportation emergencies. Finally, the industry is expanding 
its efforts to get AskRail into the hands of every first responder by 
directly targeting outreach to all 50 state fire associations and 
emergency communication centers to promote broader access versus 
relying solely on individual downloads. This app provides first 
responders with immediate access to accurate, timely data about what 
type of material a railcar is carrying so they can make an informed 
decision about how to best respond to a rail emergency. Congress and 
DOT can play a key role in promoting both SERTC and AskRail, including 
through expanded outreach to states and counties.
    Freight railroads recognize they must restore confidence and 
demonstrate that nothing is more important to them than the safety of 
their employees, their customers, and the communities in which they 
operate. Railroads must keep improving in all aspects of rail safety, 
but the progress made demonstrates that the industry will do what it 
takes to meet that challenge.
   Freight Railroads' Efforts to Improve Service for their Customers
    During the pandemic, freight railroads, their freight 
transportation partners, and businesses throughout the country and 
world faced supply chain disruptions, labor challenges, extreme weather 
events, and rapidly shifting consumer demands. There are metrics 
indicating that the most severe supply chain problems are behind us. 
For example, rates to ship a container from China to Long Beach are 
back down to pre-pandemic levels. U.S. production of new cars and light 
trucks has also rebounded as supply chain constraints, including severe 
parts shortages, such as semiconductor chips, have eased.
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    Additionally, U.S. port volume at the beginning of 2023 was far 
lower than in 2021 and 2022. For example, the ports of Long Beach, Los 
Angeles, Oakland, and Seattle-Tacoma combined had 2.68 million loaded 
TEUs in the first two months of 2022.\1\ In the first two months of 
2023, that was down to 2.03 million loaded TEUs, a 24 percent decline. 
That's not to say that all elements of the supply chain are operating 
perfectly or that the work of supply chain participants is done, but 
improvements are clear and widespread.
---------------------------------------------------------------------------
    \1\ A TEU is a ``20-foot equivalent unit,'' a metric used to 
standardize a ship's capacity and container volumes.
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    Rail volumes are being impacted by these and other broader economic 
trends, including slowdowns in industrial output, high inventory levels 
at many retailers, lower port activity, and consumer spending that is 
not as robust as it was during most of the last three years. To date 
this year, while intermodal traffic is down due to depressed imports, 
carload traffic continues to show bright spots. Total U.S. carload 
traffic for the first four months of 2023 was 3,930,129 carloads, up 
0.6 percent, or 23,161 carloads, from the same period last year; and 
3,968,876 intermodal units, down 10.9 percent, or 484,228 containers 
and trailers, from last year. Total combined U.S. traffic for the first 
17 weeks of 2023 was 7,899,005 carloads and intermodal units, a 
decrease of 5.5 percent compared to last year.
Railroads' Efforts to Address Service Challenges and Work with Supply 
        Chain Partners
    Railroads are working to ensure that supply chains are fluid and 
able to meet present and future freight transportation demand. 
Railroads know their service over the past year has not been what they 
or their customers want or deserve and are fully committed to restoring 
service to a consistently high level.
            Freight Railroads are Making Massive Investments in Their 
                    Infrastructure
    Railroads continue to reinvest massive amounts back into their 
networks each year because they want to grow with their customers and 
provide a safe, fluid, and reliable network. Unlike trucks, barges, and 
airlines, America's privately-owned freight railroads operate almost 
exclusively on infrastructure they own, build, maintain, and pay for 
themselves. Rail spending in 2022 was markedly higher than in 2020 and 
2021. Over the last 15 years, freight railroads have invested, on 
average, $23.9 billion of their own capital into improving and 
maintaining their networks every year. To put this into perspective, 
that is $1 billion more than the historic investments Congress made 
this year in rail and multi-modal programs in the Infrastructure 
Investment and Jobs Act (IIJA) and the fiscal year 2023 Omnibus 
combined. For example, one railroad recently announced a $1.5 billion 
state of the art rail facility to enhance the efficient movement of 
cargo between ship and rail. A project like this will reduce truck 
traffic congestion, air pollution, and adverse quality of life 
conditions associated with goods movement, while supporting a robust, 
efficient, and resilient supply chain.
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    These investments are the reason that rail infrastructure today is 
the highest-rated infrastructure by the American Society of Civil 
Engineers. These investments improve service and help railroads and 
their customers better weather service disruptions. Furthermore, these 
record investments in infrastructure, equipment, and technology have 
made railroads much safer.
    These investments were made possible by the improvements in 
profitability that railroads have seen since passage of the Staggers 
Rail Act of 1980. Policymakers should consider the impact of proposals 
on railroads' abilities to make these investments in the future and 
weigh potential consequences to safety, capacity, efficiency, and 
service reliability.
            Freight Railroads are Working with Supply Chain Partners to 
                    Increase Fluidity
    Freight railroads continue to partner with their customers to find 
constructive ways to maintain network fluidity, especially at rail 
terminals. For railroads, their biggest supply chain challenge in 2021 
and 2022 was the inability of many rail customers to effectively 
process the flow of traffic, especially intermodal containers, into and 
out of rail terminals. This is problematic because rail terminals are 
focused on throughput; they are neither designed for, nor physically 
capable of, long-term storage of substantial amounts of freight. If 
rail terminals are not able to move freight out, trains back up on 
mainlines and soon impact rail operations hundreds (and potentially 
thousands) of miles away.
    Fortunately, these problems have been greatly reduced in recent 
months, thanks to cooperative efforts between railroads and their 
supply chain partners. Specific steps taken vary railroad to railroad 
but have included:
      Increasing coordination between railroads to better 
manage the flow of traffic and with the trucking industry to take 
shipments as soon as warehousing capacity is available.
      Offering incentives to customers for weekend or off-hour 
in-gating at facilities near ports and for out-gating a container when 
they in-gate a container at facilities.
      Re-routing traffic away from busier to less crowded 
terminals.
      Re-opening closed terminals to create additional storage 
capacity.
      Increasing available storage capacity and staging space 
in and outside of terminals.
      Creating additional railroad-to-railroad interchanges to 
limit demand on truck drayage.
      Mounting containers onto any chassis brought in to help 
reduce dead-miles for truckers.

    Railroads have also made a variety of online tools, apps, and other 
technologies available to their customers. These tools help rail 
customers trace shipments in real time, prioritize retrieval of 
containers, and minimize time spent in rail facilities. Boosting 
visibility into network shipments, while also maintaining greater 
resiliency in the system, will only help deliver the reliable and 
efficient transportation services customers expect and deserve.
    To summarize, America's freight railroads have been doing their 
part through significant investments in their private infrastructure 
and equipment, development and implementation of innovative 
technologies, cooperation with their customers and supply chain 
partners, and operational enhancements to maintain and improve supply 
chain fluidity and to ensure sufficient capacity to deliver the goods 
our economy needs. The progress railroads have made in restoring 
service is unquestionably good news and the work to build upon that 
improvement is continuing.
   Freight Railroads' Efforts to Improve Relations with Its Workforce
    Railroads have always relied on and greatly respect the skill and 
professionalism of their employees. These extremely talented men and 
women work incredibly hard every day to keep our economy going. 
Unfortunately, over the past couple of years, railroads, along with 
virtually every other industry, have faced major challenges with hiring 
and retaining a sufficient number of workers to meet the demand of 
their customers. The pandemic turned labor markets upside down. When 
rail traffic collapsed, railroads deployed a long-standing method of 
temporarily furloughing some employees. As the economy recovered faster 
than anyone expected and demand for rail service surged, far fewer 
furloughed employees chose to return than historical patterns would 
suggest, leaving railroads without a sufficient workforce. Railroads' 
single-biggest ongoing service-related challenge remains finding and 
keeping employees.
    The recent round of collective bargaining created additional 
complications for railroads. The round ended with more acrimony than 
anyone would have preferred, and rail management and unions clearly 
have work to do to restore trust. The joint goal is a more positive 
work environment, increased job satisfaction, and higher employee 
retention.
    Railroads are making real progress. Beyond pay and health care 
benefits that rank in the top 10 percent of all industries, railroads 
are working to build stronger relationships with their employees. Every 
Class I railroad, for example, has recently announced agreements with 
many of their unions on ways to improve quality of life, such as more 
predictable work schedules and additional paid sick leave. Additional 
discussions in these areas remain underway, and momentum seems to be 
compounding.
    These efforts help explain why rail employment is growing. In March 
2023, Class I freight railroad employment was up 7.5 percent (nearly 
8,500 employees) over January 2022 and is at its highest level since 
April 2020. Train and engine (T&E) employment (the locomotive engineers 
and conductors who operate trains) was 11.5 percent (nearly 5,300 
employees) higher in March 2023 than in January 2022. March 2023 was 
also the 14th straight month in which total T&E employment grew. 
Railroads are confident they will continue successfully recruiting the 
next generation of railroad workers to meet the nation's rail freight 
demand.
        Congress Can Help Ensure Well-Functioning Supply Chains
    Policymakers have key roles to play in ensuring our nation's 
railroads, and supply chains more broadly, operate safely and 
effectively. Railroads are willing to engage in good faith, cooperative 
negotiations on these matters and encourage policymakers to take an 
objective, data-driven approach that includes meaningful dialogue with 
railroads and other interested parties.
    Policymakers should be wary of proposals motivated by politics or 
uninformed by data as they are unlikely to achieve meaningful safety or 
efficiency benefits and could have a wide range of unintended economic 
and environmental consequences, such as increased costs for shippers, 
and a negative impact on the safe movement of goods, including 
hazardous materials. Policymakers should also ensure proposals do not 
``lock in'' existing technologies; encourage the use of innovative 
technologies to enhance safety and efficiency; are based on 
performance-based standards; and avoid undermining railroads' ongoing 
efforts to collaborate with stakeholders to keep the national rail 
network fluid.
Environmental Reviews and Permitting
    Congress should ensure that environmental regulations do not unduly 
inhibit the expansion, development, or construction of rail facilities 
that would meet supply chain needs and rail customers' freight 
transportation demand. Railroads appreciate that Congress included 
project permitting provisions in the IIJA. If properly implemented, 
these reforms could help ensure that federal dollars and railroads' 
investments for infrastructure projects go farther and unnecessary 
delays will be minimized. Unfortunately, railroads are finding that 
unnecessary permitting delays continue to impede rail projects. The 
industry respectfully urges Congress to continue to address this issue 
and the Biden Administration to follow Congressional intent on recent 
and future statutory streamlining efforts.
                               Conclusion
    Railroads remain confident in their ability to meet our nation's 
growing freight transportation demand. Railroads reduce emissions and 
the overall environmental impact of transportation; provide good-
paying, stable careers to millions of Americans; enable domestic 
manufacturing, agriculture, and other industries to continue expanding; 
and enhance America's competitiveness in the global economy. Railroads 
are committed to collaborating with all stakeholders--the FRA, the 
Surface Transportation Board, their customers, their employees, elected 
officials, and many others--to attain the common goal of enhancing rail 
safety and keeping the goods that power our economy moving.

    Mr. Nehls. Thank you, Mr. Jefferies.
    And now, Mr. Baker, you are recognized for 5 minutes.

 TESTIMONY OF CHUCK BAKER, PRESIDENT, AMERICAN SHORT LINE AND 
                 REGIONAL RAILROAD ASSOCIATION

    Mr. Baker. Thank you.
    Good afternoon, Chairman Nehls, Ranking Member Payne, 
Ranking Member Larsen, and members of the subcommittee. My name 
is Chuck Baker, and I am president of the American Short Line 
and Regional Railroad Association. I represent the Nation's 600 
small Class II and III freight railroads, commonly known as 
short lines.
    Short lines are essentially the first and last miles of the 
freight rail network. We play a critical connector role in the 
country's freight supply chain, moving all sorts of industrial, 
agricultural, and energy products from factories, farms, and 
mines, to and from the Class I railroads where they can bring 
the goods to and from national and global markets.
    Short lines are the retail branch of a wholesale business, 
if you will. They are largely what used to be the unloved and 
unprofitable branch lines of the larger railroads. Luckily, 
following the partial deregulation of the Staggers Act way back 
in 1980, rather than abandon those lines and rip up the track, 
the Class I's sold or leased those lines to local entrepreneurs 
who turned them into short lines.
    Typically, those lines didn't have much traffic at the time 
and weren't in great shape, but the smalltown local folks who 
took over these lines were excited to make a go of it. They 
would focus all their time and energy on getting just one more 
new customer or one more carload from an existing customer. 
They would bend over backwards to do anything and everything 
their customers needed, and they sometimes got both local and 
Federal help to invest in their infrastructure. And it worked. 
They saved those lines and maintained crucial freight rail 
service for smalltown and rural America. Over time, short lines 
have emerged as a unique American success story.
    Short lines are still pretty small. The average one employs 
about 30 people, operates about 80 route-miles, and earns about 
$8 million in annual revenue. But collectively they play an 
important role in the supply chain. They manage one-third of 
the freight rail network, touch one-fifth of all carloads, 
provide excellent service to their customers, and do it while 
still only accounting for about 6 percent of the industry's 
total revenue.
    The title of the hearing today is ``Supply Chain Resilience 
and Challenges,'' and that is what we think about every day.
    Short lines are the epitome of resilience, doing more with 
less, hustling and scrapping to serve our customers, and 
bringing more freight to rail. And we certainly face 
challenges. When the supply chain struggles, we typically act 
as shock absorbers for shippers, blunting the impact of service 
issues for our customers.
    Going forward, there are a number of ways that Congress can 
help short lines and, therefore, the supply chain, thrive. One, 
support the CRISI program which short lines depend on for major 
infrastructure upgrades. This is a win-win for both the supply 
chain and for short line safety. Congress could simply increase 
the funding provided to CRISI or direct the FRA to focus the 
program more tightly on freight rail supply chain and safety.
    Ninety-seven Members of the House, including Chairman 
Nehls, Ranking Member Payne, and Ranking Member Larsen, 
actually have already signed a letter requesting fiscal year 
2024 appropriations funding for CRISI at the fully authorized 
level. So, a huge thank you for that.
    Two, support short line disaster relief. There is currently 
no Federal program that supports short line recovery after 
natural disasters, which can hamper our ability to help 
communities recover after those disasters.
    Three, avoid any efforts to increase truck size and 
weights, which would divert more freight to our roadways, lead 
to greater wear and tear on already worn-out roads, worsen 
highway congestion, increase air pollution, and lead to a 
litany of safety problems. Congress has rejected this concept 
repeatedly over the years, but this ``zombie'' proposal keeps 
reappearing, so, Congress might need to reject it once more.
    Four, ensure that regulations allow room for innovation and 
progress. The inability of our Class I friends to get FRA 
approval to transition to primarily automated track inspection 
programs is a good example of this not working.
    Five, support railroad workers by supporting the REEF Act, 
which would remove railroad unemployment and sickness benefits 
from sequestration cuts. This would help with hiring and 
retention, which is good for the supply chain.
    I am going to skip six.
    Seven, do no harm. With all the discussion about rail 
safety, it is important to only pass new regulations that are 
narrowly targeted to fix real problems and that won't raise 
railroad costs and degrade service and end up 
counterproductively pushing freight onto the more dangerous 
highways instead.
    And finally, eight, support the Short Line Safety 
Institute, which is a voluntary program funded by the FRA to 
enhance the safety culture of short line railroads.
    In conclusion, short lines are critical pieces of the 
supply chain, particularly for shippers in small towns and 
rural America. Congress' actions can help determine whether we, 
and the small communities we serve, grow and flourish or 
stagnate and fail.
    Thank you for the opportunity today.
    [Mr. Baker's prepared statement follows:]

                                 
 Prepared Statement of Chuck Baker, President, American Short Line and 
                     Regional Railroad Association
                              Introduction
    As president of the American Short Line and Regional Railroad 
Association (ASLRRA), the trade association representing the nation's 
600 small Class II and III freight railroads (commonly known as short 
line railroads or short lines), and hundreds of their contractors and 
suppliers, I submit this testimony for inclusion in the record of this 
committee's hearing.
                  The Short Line Freight Rail Industry
    Short line railroads and the national network. Short lines have 
been in existence for well over a century and today play a critical 
role in the country's freight supply chain. Short lines provide first 
mile and last mile freight rail service, touching one in five railcars 
on the system. They ensure that businesses in small towns and rural 
communities that would otherwise be cut off from the North American 
freight rail network have the access they need to the global supply 
chain.

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    Short lines are nearly all small, entrepreneurial businesses. The 
average short line employs about 30 people, operates about 80 route 
miles, and earns about $8 million in revenue per year.
    The short line industry as we know it today is the product of the 
Staggers Act of 1980, which made the sale or long-term lease of light 
density, unprofitable lines from Class I railroads to local 
entrepreneurs possible and avoided the abandonment of those lines, 
preserving rail service for thousands of customers nationwide.
    However, those sold-off lines came with high hurdles to continuing 
business operations--decades of deferred maintenance and few remaining 
customers along the lines. These lines needed significant investment 
from the moment they became short lines, and that's still the case 
today, with these small businesses using up to a third of their 
revenues for maintenance and improvements, making short line 
railroading one of the most capital-intensive industries in our nation.
    Despite those challenges, the short line industry has emerged as 
one of the great American success stories. Short lines have not only 
kept those marginal lines they inherited viable, but have turned them 
into small thriving enterprises in many cases. The short line industry 
now manages one-third of the freight rail network and touches one-fifth 
of all carloads while still only accounting for 6% of the total 
revenue. Short lines pride themselves on doing more with less and 
making it work.
    The country's short line freight rail industry is a vital part of 
the North American supply chain. Short line railroads provide first- 
and last-mile rail service. They are the face of railroading for 
thousands of customers who need to move and receive critical goods. Our 
members provide this first and last mile connection in many key 
industries critical to our country's economic health, particularly the 
industrial, manufacturing, agricultural, energy, and chemical sectors. 
We also frequently partner with the trucking industry to offer 
transload and intermodal opportunities for bulk and heavy products 
throughout the country, everything from paper to rock, potatoes to 
lumber, metals to minerals, sand to liquids.
    As challenges to the supply chain have arisen in recent years, 
short lines have acted as critical ``shock absorbers'' for the freight 
rail network, blunting the impact of supply chain challenges on our 
customers through our flexible, friendly, responsive, and customized 
service.
    Shippers want to use rail because it is generally less expensive, 
and sometimes far less expensive, than trucking. Rail can offer 
capacity for large volumes of freight, and rail helps shippers meet 
their environmental commitments. Rail however has not always had the 
reputation of being the easiest or simplest mode to access--it is 
incumbent on us as a freight rail industry to change that perception 
and offer consistent, predictable, reliable, easy-to-access service to 
our customers, and short lines are committed to leading the way on that 
front.
    Short lines are economic engines for localities, particularly in 
small-town and rural America. Our members are critical links in the 
nation's freight supply chain and are vital engines of economic 
activity. Together, our members are tied to 478,000 jobs nationwide, 
$26.1 billion in labor income and $56.2 billion in economic value-add 
\1\--providing a service that 10,000 businesses nationwide rely upon to 
get goods and products to market.
---------------------------------------------------------------------------
    \1\ The Section 45G Tax Credit and the Economic Contribution of the 
Short Line Railroad Industry, prepared by PWC for ASLRRA (2018).
---------------------------------------------------------------------------
    At the local level, the availability of rail service provided by 
short lines is often the tipping point for manufacturers and shippers 
deciding to locate in the area, driving new, well-paying jobs 
particularly in rural and small-town America.
    We live and work in the communities we serve. Short lines are 
owned, managed and staffed by individuals who are part of the fabric of 
their local communities. Because short lines run short distances, 
employees live and work in the communities they serve. Many short lines 
are family-run businesses and safety and service is personal. When 
they're not moving goods and freight, short line personnel are mixing 
with their customers at the local grocery store, at the PTA meeting, on 
the ballfield, and in their houses of worship. Our customers rely upon 
us to keep their businesses competitive and we take that responsibility 
very seriously.
    We have an impressive safety story to tell. According to Federal 
Railroad Administration (FRA) data, train accident and hazardous 
material accident rates for short lines are down 42 percent and 71 
percent, respectively, since 2000.
    From 2019 to 2022, the overall freight rail industry experienced 
only 51 derailments with a hazardous material release, and only four of 
those occurred on a short line railroad. Of the 86 cars carrying 
hazardous materials that experienced a release in those derailments, 
only four of those cars were on a short line.
    During the same time frame, short line railroads ran an average of 
approximately 122 million train miles per year. Over that four-year 
period, derailments have declined from 298 to 254, derailments 
involving hazardous material cars have declined from 64 to 43, and as 
noted above, only four derailed cars released hazardous materials in 
those four years.
    Our industry is committed to getting these numbers--all 
derailments, especially derailments with releases of hazardous 
materials, and reportable incidents--to zero and to keeping them there, 
but this overall safety context is important to understand before 
enacting potentially counterproductive regulations or legislation in 
the name of safety, which I will discuss later in this testimony.
    One indication of short lines' safety performance and focus is 
ASLRRA's annual Jake Safety Award program honoring railroads that have 
had better than industry-average injury frequency rates per person-
hours worked. Since 2000, an increasing number of short lines have 
received the ``Jake with Distinction'' designation, indicating zero 
reportable injuries for the calendar year--a remarkable 71% of our 
members had zero reportable incidents in 2021.
    In addition to our awards program, ASLRRA provides an exhaustive 
offering of programs and training for short line railroad members. 
Training in topics ranging from regulatory compliance to best practices 
in environmental sustainability is offered throughout the year via 
webinars, our Learning Management System, and at our conferences.
    Importantly, thanks to grants provided by the U.S. Department of 
Transportation (USDOT), short lines are supported in their efforts to 
improve safety culture by the Short Line Safety Institute (SLSI). When 
looking at safety culture evaluations nationwide, FRA described SLSI's 
method as ``the most robust model for assessing safety culture in the 
U.S. railroad industry.'' \2\ SLSI also provides hazardous materials 
training for railroads and emergency responders in the communities they 
serve via grants from the Pipeline and Hazardous Materials Safety 
Administration.
---------------------------------------------------------------------------
    \2\ FRA Office of Research, Development, and Technology, RR 19-15, 
June 2019 https://railroads.dot.gov/sites/fra.dot.gov/files/fra_net/
18759/SLSI%20Model%20for%20Assessing%20Safety
%20Culture.pdf
---------------------------------------------------------------------------
    Short lines' environmental stewardship is strong. The rail industry 
is a sustainable, environmentally friendly mode of transportation. U.S. 
Environmental Protection Agency data show freight railroads account for 
only 0.6 percent of total U.S. greenhouse gas emissions and only 2.1 
percent of transportation-related sources (e.g., trucking, air, etc.). 
On average, U.S. freight railroads move one ton of freight 480 miles, 
approximately four times as far as our over-the-road competition, on a 
single gallon of diesel fuel. Short line service alone keeps 31.8 
million heavy trucks off highways and public roads, preventing costly 
wear and tear, relieving congestion, and reducing the number of deadly 
motor vehicle crashes.
    Short lines are committed to doing their part, by continuously 
seeking ways to reduce their environmental impact with the 
implementation of technology and operating practices that reduce 
emissions. For example, the ASLRRA is currently partnering with the FRA 
and short line railroads to test locomotive emissions by studying fuel 
injectors and additives. Products like these that increase fuel economy 
may also yield emissions benefits. This is a two-year project that will 
give us a better understanding of how small railroads can utilize cost 
effective methods for reducing their impact on the environment.
    Short lines are small enterprises with limited resources. The 
federal government can provide crucial and impactful help to short 
lines, but at the same time efforts to regulate problems in the rail 
space can impose outsized burdens and demands on these railroads. It is 
crucial that any new regulatory requirements be directly relevant to a 
safety benefit and realistic for a small business to implement.
    A longstanding body of law, including the Regulatory Flexibility 
Act (RFA) and the Small Business Regulatory Enforcement and Fairness 
Act (SBREFA), requires that agencies exercise utmost care and 
discretion in evaluating how regulations they promulgate affect small 
businesses. Congress should similarly heed the wisdom of these laws 
before crafting prescriptive updates to the current complex and highly 
technical regulatory framework. Many small railroads are unable to 
comply with costly ``one size fits all'' requirements that are written 
with larger entities in mind. Each small railroad has a unique 
operating environment that can differ dramatically from others related 
to drivers of risk and operating characteristics, such as train length, 
speed and distances traveled. A Congress that ignores this fact could 
inflict extreme duress and economic harm on a critical piece of the 
supply chain--without providing any attendant safety benefit.
         Short Lines and the Supply Chain: What Congress Can Do
    There are eleven areas in which Congress could act that would both 
enhance the supply chain and advance safety in our industry:
1. Support important funding opportunities that help short line freight 
        railroads invest in infrastructure.
    Rail rehabilitation and improvement is critical to both safety AND 
supply chain fluidity.
    Investment drives safety improvements. The largest cause of short 
line derailments is bad, worn-out track, and the best way to address 
that challenge is to invest in upgrading that track. Finding the 
funding is the hard part though. Short line railroading is one of the 
most capital-intensive industries in the country. As noted above, Short 
lines invest on average 25 percent to 33 percent of their annual 
revenues in maintaining and rehabilitating their infrastructure. Short 
lines are often the custodians of expensive bridges and tunnels that 
were originally built by much larger railroads years earlier and are 
now reaching the end of their useful lives.
    Federal funding opportunities like the Consolidated Rail 
Infrastructure and Safety Improvements (CRISI) grant program provide 
short lines with an opportunity to meet these challenges. As the 
Infrastructure Investment and Jobs Act (IIJA) is implemented and its 
critical resources are made available, we encourage both the Biden 
Administration and Congress to prioritize funding for the many projects 
for small freight railroads that improve safety AND reduce supply chain 
bottlenecks. These projects also have enormous environmental benefits 
and are often the biggest ``bang for the buck'' available in surface 
transportation.
    CRISI is the one grant opportunity where short lines are directly 
eligible applicants. ASLRRA appreciates the strong support of so many 
on this Committee for CRISI and the work it does. In our view, the 
program should be even more focused on freight rail safety and supply 
chain improvements than it is today. At the very least, CRISI should 
not be subject to carve outs for intercity passenger rail as it has 
been over the past few years and certainly should not be opened up to 
new entities such as commuter railroads. Commuter and passenger 
railroads have significant other federal, state, and local funding 
streams available that are closed to short lines. CRISI should be 
funded at the fully authorized appropriations levels.
    Ensuring critical resources are made available through CRISI and 
other important USDOT grant efforts (like RAISE, INFRA, the Railroad 
Crossing Elimination grant program, and the Port Infrastructure 
Development Program (PIDP)) will allow our members to make safety and 
supply chain enhancing investments in track upgrades throughout the 
country.
    Investment in infrastructure allows for a more flexible and 
efficient supply chain. For example, due to legacy track and bridge 
conditions, many short lines have stretches of track and bridges that 
cannot accommodate national-network standard 286,000-lb. railcars. 
CRISI-funded rail upgrades allow short lines to offer the most economic 
and efficient rail service to shippers from first mile to last with 
throughput on the same track standard.
    CRISI funds can also be used by short lines for network 
enhancements. Many short lines have legacy track layouts that present 
challenges in the face of current operational and customer demands. On 
a short line, relatively modest CRISI investments can add sidings, 
reconfigure railyards and improve connecting interchange points in ways 
that are transformative for the operation of the railroad and customer 
service. CRISI can also be used by short lines to upgrade or replace 
older locomotives to improve fuel efficiency, reduce maintenance costs, 
and improve reliability, which benefits operational efficiency and 
fluidity while reducing emissions.
2. Support short line disaster relief.
    As climate change continues to impact the movement of freight, we 
encourage members to consider new programs to assist in rebuilding 
after a natural disaster. In September 2022, Hurricane Ian devastated 
Florida and destroyed short line railroad infrastructure. A Class III 
railroad in Fort Meyers, Florida had estimated damages exceeding $30M. 
Current insurance policies and federal programs are not able to meet 
the needs of small railroads who experience damages of this magnitude. 
As disaster recovery begins, short lines may play a critical role in 
moving goods in and out of the affected areas, but only if they can 
themselves recover quickly.
    ASLRRA appreciates the efforts of members like Rep. Byron Donalds 
(R-FL) to advance legislation that would provide emergency assistance 
to Class II and class III railroads to rebuild critical infrastructure 
and restore the movement of freight following natural disasters. A bill 
to this effect was introduced late in 2022 (117th Congress, H.R. 9581, 
Short Line Railroad Relief Act) and we are expecting a similar bill to 
be introduced shortly in this Congress.
3. Avoid any effort to increase the size and weight of commercial 
        trucks.
    ASLRRA cautions against any action that could lead to an increase 
in truck length and weights. Heavier and longer trucks will divert more 
freight to our roadways and lead to greater wear and tear on already 
worn-out roads, worsen roadway congestion, increase air pollution and 
truck GHG emissions, and lead to a litany of hazardous conditions 
endangering all roadway users.
    Moreover, rail is a far more efficient way to move goods and 
freight. One train can take hundreds of truckloads off our nation's 
highways.
    Recently introduced proposals, however, would undermine these 
efficiencies. The SHIP IT Act (H.R. 471) proposes a 10-year pilot 
program to increase the weight of trucks from 80,000 lbs. to 91,000 
lbs. This misguided pilot program has been suggested many times over 
the years and lawmakers have rejected this concept repeatedly, 
recognizing the danger these larger trucks would cause to the motoring 
public, the environment and infrastructure. Raising weight limits would 
not improve the supply chain--studies have shown that the effect of 
this action would be more (and bigger) trucks on the roads, as freight 
was diverted from rail to road.
    A 2020 study found that 91,000-pound trucks would divert up to 20 
percent of rail carload traffic over a five-year period. The diverted 
traffic--including hazardous materials, which is particularly 
concerning--would end up on our highways, adding more trucks to the 
road, causing more pavement and bridge damage, and creating more risk 
for Americans.\3\
---------------------------------------------------------------------------
    \3\ Estimating the Rail-to-Truck Traffic Diversions Attributable to 
Increased Truck Size and Weight, Mark L. Burton, Appalachian 
Transportation Institute, Marshall University, June 2020, http://
www.cabt.org/wp-content/uploads/2020/07/DIVERSION-STUDY-FINAL.pdf
---------------------------------------------------------------------------
4. Support RailPulse and future initiatives that improve visibility and 
        management of resources.
    RailPulse is a rail industry initiative to improve fluidity and 
transparency for customers across the country. RailPulse is a coalition 
of railcar owners, railroads, rail technology providers, and the 
Pennsylvania DOT who have joined together to facilitate and accelerate 
the adoption of GPS and other railcar-level telematics across the North 
American rail network fleet. It will put short lines on a level playing 
field with other modes of transportation in their ability to locate and 
manage shipments, correspondingly enabling improved shipper visibility 
of the location and condition of their rail freight in transit. 
RailPulse technologies being explored include asset health monitoring 
of the mechanical elements of railcars which can support reliability 
and safety, and which will allow for more efficient asset management. I 
would consider RailPulse to be in the same vein as the USDOT FLOW 
initiative and the Federal Maritime Commission's Maritime 
Transportation Data Initiative.
    RailPulse is one of many examples of CRISI grant program-funded 
initiatives that holds the promise of transformational change for our 
industry. Congressional support of the CRISI grant program at the 
highest funding levels will allow for many more of these transformative 
projects to move forward.
5. Encourage regulations to keep pace with modern operational 
        practices.
    Technology development and best practice implementation have led to 
safety improvements over time, but some of those developments, such as 
Automated Track Inspection (ATI), still require permitting or waivers 
which are not always forthcoming. Congress should support the 
railroads' move towards ATI rather than letting the FRA mandate the use 
of potentially outdated manual inspections in all circumstances. This 
would free up scarce time and personnel resources and improve the 
supply chain.
    ATI technologies can dramatically improve a railroad's awareness 
and understanding of the condition of their track assets, enable 
predictive analytics to optimize preventive and proactive maintenance 
strategies, and detect flaws, such as internal rail defects, or trends 
in conditions over time, that can be missed by traditional visual 
inspections. ATI is a way to improve safety and the efficiency of the 
rail network. Congress should encourage the development and deployment 
of ATI technologies as important tools that can enhance and leverage 
the work of railroad maintenance-of-way teams.
6. Support railroad workers by providing steady federal benefits.
    The recently introduced bipartisan, bicameral Railroad Employee 
Equity and Fairness (REEF) Act would remove sequestration constraints 
on the railroad unemployment insurance program for railroad employees 
and ensure that they get the benefits they are entitled to.
    While a temporary version of the REEF Act was passed in December 
2020, that measure actually expired yesterday (May 10, 2023). Without 
the REEF Act, sequestration will likely result in a 5.7% reduction in 
railroad unemployment and sickness benefits through Fiscal Year 2030.
    Being able to attract and retain talent is critical to our 
industry; and robust unemployment and sickness benefits are critical in 
that effort. While regular unemployment compensation for other 
industries is exempt from sequestration, the Railroad Unemployment 
Insurance Act (RUIA) is not. This means that the funds railroaders and 
employers pay into the RUIA for unemployment and sickness benefits are 
used to offset federal spending instead of going back to the hard-
working individuals who pay into it. REEF would remedy this situation.
7. Allow the rail industry to hire back retirees more easily to help us 
        quickly staff to appropriate levels.
    Last year, Representative Rick Crawford (R-AR) introduced the 
Retirees to Rail Act, H.R. 8608. The bill would temporarily permit 
retired railroad employees to render compensated services to an 
employer without a suspension or deduction of the retired railroad 
employee's retirement annuity.
    Railroads sometimes need to be able to quickly add railroaders into 
the network while new employees are being trained. This legislation 
would allow railroads to rehire experienced railroad retirement 
recipients without the Railroad Retirement Board suspending the payment 
of their annuity, which the current law requires. This action would 
benefit the supply chain.
8. Maintain federal primacy and pre-emption on rail regulation.
    Whether it is a rash of state-level legislation and regulation on 
crew size mandates and blocked crossing, or the stunning overreach of 
the California Air Resource Board's recent locomotive regulation, state 
regulation of freight railroading threatens to undermine the efficiency 
of the world's premier freight rail network. The interconnected nature 
of the rail network seems to be the most clear and obvious case of 
interstate commerce that one could imagine--we urge Congress to not let 
its federal role in rail be usurped by the states, which would create 
an unworkable and inefficient patchwork of rail regulation and lead to 
more future supply chain instability.
    The California in-use locomotive rule for instance would ban any 
locomotive older than 23 years old beginning in 2030--a completely 
unworkable proposal for a short line industry that regularly relies on 
40- and 50-year old locomotives to keep sometimes barely marginal 
railroads viable.
9. Support permitting reform.
    In a concern that is far broader than just the rail industry, short 
lines believe that widespread permitting reform is important for the 
continued economic growth of the United States. It is simply too time-
consuming and burdensome to get projects done. Whether the projects are 
new renewable energy installations, major rail terminals, or sometimes 
even relatively simple track upgrades, a disjointed permitting process 
is a major hindrance.
    We support the efforts by major groups like the U.S. Chamber of 
Commerce and the National Association of Manufacturers to improve the 
nation's permitting laws and procedures.
10. Support advancing new regulations only if they are laser-focused on 
        safety problems that warrant further action.
    ASLRRA supports efforts to address recognized safety hazards. 
However, the February derailment incident in East Palestine, Ohio has 
brought forward many legislative proposals that have no relationship to 
the derailment, no relevance to safety, and are unrealistic for short 
lines to implement. One such example is the call for requiring 
railroads to hire additional personnel when no hazard has been 
identified that would be mitigated through the hiring of those 
personnel. Support for mandating crew size for the first time in the 
195-year history of railroading is untethered to any actual safety data 
that show how expanded locomotive crewing requirements improve safety, 
and it is out of step with domestic short line, passenger rail and 
commuter rail, and international freight rail, experience.
    As discussed, short line railroads are critical to supply chain 
fluidity, to local and regional economic growth, to businesses 
requiring access to markets at a competitive cost, and to reducing the 
environmental footprint of industry. Policymakers should be mindful of 
these far-reaching beneficial impacts as they consider new legislation 
that would compel additional regulations that may cause unintended and 
negative impacts on short lines' ability to be part of the supply chain 
solution.
    Legislative and regulatory responses to an accident or incident 
should be responsive to the event, relevant to safety, and provide 
reasonable and realistic requirements for small businesses to 
implement. Legislators should take care to consider that all the facts 
are in hand, including the results of National Transportation Safety 
Board (NTSB) investigations.
    If proposals that require unnecessary equipment, personnel, and 
operating practices were to be enacted, they could lead to greater 
hazards on the rail network as finite resources would be diverted from 
where they are needed (typically track) to areas where they aren't. We 
strongly caution against any measures that are unrelated to the recent 
derailment, redundant with regulatory action already underway, 
unresponsive to the preliminary NTSB report, and premature before the 
NTSB investigation concludes.
    We appreciate the leadership of many on this committee who--like 
us--would like to see the NTSB continue its important work and fact-
finding before new rules are proposed.
    The railroading industry is already one of the nation's most highly 
regulated industries, and collectively, safety is our number one 
priority. Safety is good for business, it's good for the companies we 
serve and the localities we operate in, and it's good for our railroad 
families.
11. Support the Short Line Safety Institute (SLSI).
    The Short Line Safety Institute (SLSI) is a critical resource for 
enhancing the safety culture of short line railroads. ASLRRA urges 
Congress to continue to support the FRA's efforts to provide resources 
for the SLSI to continue to improve safety culture and training for 
short line railroads, including efforts to improve the safe 
transportation of hazardous materials. New funds will also allow for 
enhanced hands-on field training through obtaining and maintaining two 
modern safety trains, which would bolster training for emergency 
responders in the event of a release of hazardous materials.
                               Conclusion
    There are many areas where Congress can act to ensure that we 
continue to offer an integrated supply chain that is the envy of the 
world.
    ASLRRA's short line members are the critical connection between 
shippers in small towns and rural areas across the country and the 
Class I railroads. Our unique and varied operating environments enable 
us to provide high-touch, personalized service in a safe and dependable 
way. Congress can help us, and the small communities we serve across 
rural and small-town America, grow and flourish, or stagnate and fail.
    We urge Congress to wield their pen with precision in order to 
avoid unintended consequences to the supply chain.
    We appreciate the committee's close attention to the items we have 
noted in our statement, and we welcome future opportunities to work 
together to craft good public policy.

    Mr. Nehls. Thank you, Mr. Baker.
    Mr. Jahn, you are recognized for 5 minutes.

TESTIMONY OF CHRIS JAHN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, 
                   AMERICAN CHEMISTRY COUNCIL

    Mr. Jahn. Thank you, Mr. Chairman, Ranking Member Payne, 
Ranking Member Larsen, and members of the subcommittee. I 
appreciate the opportunity to talk to you----
    Mr. Nehls [interrupting]. Pull the mic a little closer to 
you, buddy.
    Mr. Jahn. Closer. Sorry.
    Mr. Nehls. Thank you, sir.
    Mr. Jahn. Is that better?
    Mr. Nehls. Some of us can't hear very well up here, you 
know.
    Mr. Jahn. All right. Is that better?
    Mr. Nehls. Thank you.
    Mr. Jahn. So, I appreciate the opportunity to talk to you 
on behalf of the American Chemistry Council, our members, and 
the members of the rail shipper coalition. I also want to thank 
the members of this committee for helping prevent what would 
have been a catastrophic strike last year impacting all of our 
Nation's supply chain.
    So, I want to leave you with three key points today from my 
testimony. Number one, transporting chemistry is a crucial part 
of the Nation's supply chain; number two, structural and 
serious problems remain that undermine the utility and the 
effectiveness of our transportation network; and number three, 
Congress can help get that system back on track.
    So, our industry is one of the largest freight rail 
customers, and we are growing. We need a resilient and 
responsive freight rail network to support chemical 
manufacturing in the United States. And it is important to 
everyone in this country and everyone in this room because the 
products we make and transport by rail are essential for 
growing food, for producing energy, for delivering safe 
drinking water, and making life-saving medicines and equipment. 
None of that happens without chemistry.
    So, our industry is at the headwaters of the manufacturing 
economy. Problems that impact our industry reverberate 
throughout and cascade throughout the supply chain, which 
ultimately impacts customers in the form of shortages and 
inflation. Chemical manufacturing is also important to our 
national priorities, like energy independence, by competing 
with other countries in critical technologies such as world-
class semiconductors.
    Quite simply, if we want to make things in the United 
States of America rather than in places like China, we must 
manufacture and move more chemicals in the United States. For 
that to happen, we have to fix our Nation's transportation 
supply chain and make it stronger than ever.
    Now, railroads have made some progress and recovered from 
some of the pandemic-related issues because of eased demand, 
but many rail service problems continue to negatively impact 
our members and, thus, the country.
    So, in our most recent supply chain survey of our members, 
we found that while conditions improved in the second half of 
last year, our freight transportation problems are far from 
over. And in fact, nearly all of our members say that supply 
chain and freight transportation disruptions are impacting 
their manufacturing operations today.
    If you remember nothing else about what I say today, please 
remember this: More than 80 percent of our members report that 
despite recent improvements, conditions remain worse than prior 
to the pandemic. So, we are still having significant issues 
shipping.
    And unfortunately, the situation is even bleaker when it 
comes to freight rail. Our survey found that 30 percent of our 
member companies said rail service problems were worse in the 
second half of last year, and more than three-quarters reported 
worse service than before the pandemic. So, these are real 
problems with real consequences.
    As I detailed in my written testimony, our members continue 
to face a range of service challenges from delays and 
reductions in service days to extended service embargoes. These 
service problems disrupt the supply of raw materials and 
customer deliveries and force companies to reduce production 
here in the United States. They put producers at a disadvantage 
versus imports from China that ship from port terminals that 
are served by multiple railroads.
    The history has shown that we can't rely on the railroads 
to fix these problems on their own. In short, as someone has 
said, hope is not a strategy. Rather, policymakers need to 
adopt reforms and incentivize railroads to make their networks 
more resilient and help prevent a future crisis.
    For example, there have been reforms languishing at the 
Surface Transportation Board for 7 years, like reciprocal 
switching, which would help provide greater access to 
competitive rail service. Despite what you may hear from others 
on this panel, it isn't a radical idea. It is something that 
has been used in Canada for over 100 years, and, in fact, two 
of North America's largest railroads continue to use it to 
thrive and grow.
    So, access to competitive rail service is very important to 
chemical manufacturing. It is a key driver in determining where 
our members expand and invest. For example, we have a member 
company that recently decided to invest in the Houston area and 
picked one congressional district over another because of the 
access to competitive rail service. This project created 2,500 
construction jobs, 75 full-time jobs, and created an economic 
impact in that community of $100 million.
    So, Congress can help us address these issues, support the 
STB, and hold railroads accountable for their poor service.
    I look forward to answering your questions.
    [Mr. Jahn's prepared statement follows:]

                                 
    Prepared Statement of Chris Jahn, President and Chief Executive 
                  Officer, American Chemistry Council
    Chairman Nehls, Ranking Member Payne, Chairman Graves, Ranking 
Member Larsen and Members of the Subcommittee, I am Chris Jahn, the 
President and Chief Executive Officer of the American Chemistry Council 
(ACC). Thank you for holding this hearing and for the opportunity to 
discuss the importance of a resilient freight rail network to our 
industry and to the thousands of our downstream customers that support 
nearly every aspect of the nation's supply chain.
                               About ACC
    The American Chemistry Council is an industry trade association 
that represents more than 190 of America's leading chemical companies. 
Our members produce a wide variety of chemicals, polymers, and related 
products that make our lives and our world healthier, safer, more 
sustainable, and more productive. The business of chemistry is a $517 
billion enterprise that supports over 25% of the U.S. gross domestic 
product, generates 10% of all U.S. goods exports, and directly provides 
more than half a million good-paying American jobs.
    The products we make are essential for growing food, delivering 
safe drinking water, and making life-saving medicines and equipment. 
They also help America to become energy independent and to compete 
globally in critical technologies, for example, producing world-class 
semiconductors.
    A robust and responsive freight rail network is vital to the 
continued growth of U.S. chemical manufacturing. Our industry is one of 
the largest freight rail customers, shipping 2.3 million carloads in 
2022. And the expansion of U.S. chemical manufacturing means our 
transportation needs are growing. With announced investments of more 
than $200 billion and over 350 chemical manufacturing projects, we 
expect to add 122,000 railcar shipments per year by 2030.
                        Rail Customer Coalition
    Because of the importance of freight rail issues to chemical 
manufacturing, ACC is a member of the Rail Customer Coalition (RCC). 
Members of the coalition include trade groups representing automobile 
manufacturers, farmers, steel manufacturers, investor-owned electric 
companies, and rural electric cooperatives, among others. Collectively, 
the coalition members represent industries that provide more than 7 
million jobs and contribute $4.8 trillion in economic output.
    The members of RCC are major transportation stakeholders and the 
largest users of freight rail. They account for more than half of the 
total volume of cargo shipped by rail and generate more than three 
quarters of the revenues collected by the railroads.
    RCC members have faced unprecedented challenges over the past 
several years, including service failures, rising costs, and even the 
threat of a catastrophic shutdown of the entire rail network. Railroads 
have made progress and recovered from the worst of the crisis. But rail 
service problems continue to disrupt supply chains and inflate prices 
for consumers. These problems will not fix themselves. Policymakers 
need to adopt reforms that incentivize railroads to make their networks 
more resilient and help prevent a future supply chain crisis.
        Supply Chain Challenges Continue to Impact Our Industry
    For several years, supply chain and freight transportation problems 
have disrupted U.S. chemical and plastics manufacturing operations. ACC 
has conducted surveys of our member companies to better understand and 
detail the persistent challenges they face in moving freight in the 
U.S. by rail, truck, and water. The latest survey showed that while 
conditions improved in the second half of 2022, freight transportation 
challenges are far from resolved.
    Overall, nearly all companies (93%) say supply chain and freight 
transportation disruptions are impacting their US manufacturing 
operations. Two-thirds noted improvements in the second half of 2022. 
However, 83% of companies report that despite this recent progress, 
conditions remain worse than they were prior to the pandemic.
    Unfortunately, chemical manufacturers report that they have not 
seen the same level of improvement for rail shipping as they have for 
truck and ocean shipping. In fact, 30% of companies said rail service 
problems were worse in the second half of 2022, and more than three 
quarters reported worse service than before the pandemic.
    These findings are not surprising. Last year, in addition to facing 
delays and reductions in service days, companies were increasingly 
subjected to railroad embargoes. All but one Class I railroad 
implemented embargoes in 2022. One class I railroad increased their 
number of embargoes from 5 in 2017 to more than 1,000 in 2022. Another 
Class I announced an embargo in late June on certain shipments into 
California. It was originally announced for one month but was extended 
until Labor Day, leaving companies unable to ship more than a fraction 
of normal volumes for several months. Embargoes ration rail service, 
favoring certain customers and commodities while limiting or denying 
service to others. They impose significant burdens on shippers and 
force some sites to reduce production and shift traffic to trucks.
    While rail embargoes are necessary in some circumstances, 
particularly in response to weather emergencies, ACC is concerned that 
railroads will increasingly turn to embargoes to manage long-term 
congestion problems. This is particularly troubling when this 
congestion was at least partially created by the railroad industry's 
own decisions to cut jobs, mothball equipment, and delay infrastructure 
investments.
    Our members continue to report examples of rail service problems 
into 2023. A lack of crews leads to frequent missed switches at both 
production facilities and customer sites. One ACC member facility in 
the Mid-Atlantic was unable to make 30 shipments to close out the first 
quarter due to lack of service. Another company highlighted that a key 
production facility in Virginia has frequently received less than 2 out 
of 3 scheduled switches per week. This disrupts raw material supply and 
customer deliveries. And because the facility has no choice in its rail 
carrier, the company is disadvantaged versus imports that ship from 
port terminals that are served by multiple railroads.
    Members also report congestion at the New Orleans interchange, with 
trains being held there for up to two weeks. This impacts customers on 
multiple railroads. Furthermore, when railroads send additional crews 
and locomotives to clear up congestion in one location, it often 
creates problems in other areas.
       Promoting Competition Would Strengthen Rail Supply Chains
    Policies that promote greater competition within the rail industry 
can spur innovation, increase efficiencies, and drive healthy growth--
just as it does throughout all sectors of the U.S. economy.
    Rail competition impacts communities around the country. When ACC 
member companies evaluate where to expand and invest, one of the key 
decision criteria is competitive rail access. For example, a company 
recently decided to invest in one Houston location versus another, and 
the lack of rail competition at one of the locations was a major 
factor. This investment at the site with competitive rail access 
created 2,500 construction jobs, 75 full-time jobs, and is expected to 
create an estimated economic impact of $160 million in tax benefits for 
the local taxing district over a 10-year period.
    Unfortunately, many ACC members and other rail customers have no 
competitive transportation options. Approximately 75% of our member 
companies are captive to one Class I railroad--that means only one 
railroad services their facility. Many also do not have the ability to 
move many of our materials to other modes of transportation because 
railroads remain the safest means for moving hazardous materials over 
land and the infrastructure of many of our facilities is built around 
rail service. Therefore, shippers have no market remedies when a 
railroad fails to provide adequate service. For them, the Surface 
Transportation Board (STB) is the only recourse.
    The STB Plays a Crucial Role for ACC Members and Other Shippers
    Congress created the STB to help foster a healthy, efficient, and 
competitive freight rail system, and it gave the Board sole authority 
to resolve commercial issues between railroads and shippers. The 
Staggers Rail Act of 1980 sets a course for the STB that has helped the 
rail industry not only to recover but to thrive. This success story 
should give the Board the confidence to follow through on the other 
important objectives mandated by Staggers, including ``to ensure 
effective competition among rail carriers.'' Fulfilling this mission 
requires a balanced approach, relying on market forces and greater 
transparency wherever possible.
    In its recent quarterly report to Congress, the STB provided an 
extensive list of pending reforms that are critical to supporting a 
resilient, efficient and competitive rail sector. Some of these issues 
have languished for years without resolution.
    In particular, the Board has yet to complete work on its 2016 
proposal to modernize its overly restrictive rules on reciprocal 
switching. Reciprocal switching allows a shipper served by a single 
railroad to request to have its freight transferred to another major 
railroad at an existing interchange point, offering a market-based 
solution when a railroad fail to deliver quality service and 
competitive rates. By finalizing this reform, the STB would finally 
provide greater access to competitive rail service as envisioned by 
Congress more than 40 years ago.
    Congress must exercise its oversight and encourage the Board to 
address freight rail issues and complete proceedings in a timely 
manner.
             Congress Must Also Act on Freight Rail Reform
    Congress must also act on freight rail reform. As part of the 
Committee's role in promoting efficient and reliable rail supply 
chains, ACC urges you to act on the following recommendations:
      Establish minimum service delivery standards. Railroads 
have a statutory obligation to provide ``transportation or service on 
reasonable request.'' However, the STB has never defined how this 
common carrier obligation applies to the level and quality of service a 
railroad provides to its customers. At a hearing before this 
Subcommittee last year, STB Chairman Oberman welcomed the opportunity 
to work with Congress to further define railroad service obligations. 
To hold railroads accountable for service failures, Congress should 
either require the Board to establish minimum rail service standards or 
require railroads to allow such standards in its service contracts.

      Improve data on competitive vs. non-competitive rail 
rates. Congress should commission the Transportation Research Board to 
develop a new economic model that uses real world data to compare the 
rates paid by captive shippers to the rates paid for similar shipments 
in competitive markets. This would help the STB meet its mandate to 
maintain reasonable rates in the absence of effective competition. 
Currently, the Board has no way to measure how much extra a rail 
shipper pays solely because it lacks competitive transportation 
options. Creating a new model could serve as a more accurate and 
realistic starting point for evaluating whether a rate is 
``reasonable.''

      Level the Playing Field on Demurrage Charges. Shippers 
continue to own a larger and larger percent of their fleet, currently 
approximately 73% of railcars in service today, which should result in 
an update in who can charge premiums to fulfill the national need 
related to efficient freight car use and distribution. When delays 
occur, or when the freight railroad delivers too many or too few 
railcars, there is little recourse for the railcar owner. Assessing 
demurrage and accessorial charges on freight railroads for those 
privately owned railcars would enable private railcar owners to protect 
their own investments. Railroads, private car owners and lessees should 
all report demurrage income quarterly to the STB.

      Provide better access to the STB. Congress should direct 
the STB to eliminate outdated exemptions and allow shippers to seek 
review of unreasonable rates and unreliable service for shipping of 
certain products such as automobiles, food, building materials and 
metals.

      Ensure the Board has adequate funding and staff to 
complete its work. The STB must fulfill a broad range of 
responsibilities, including review of rate and service issues, merger 
approvals and oversight of Amtrak service. Congress must provide the 
Board with the necessary resources to meet its ongoing obligations and 
to keep pace with changes to the rail network.
                               Conclusion
    A resilient and responsive freight rail network is vital to the 
continued growth of U.S. chemical manufacturing and other important 
sectors of the economy. Policymakers must address one of the central 
problems undermining the freight rail network and the nation's supply 
chain--lack of competition amongst carriers. Adopting market-based 
reforms will boost efficiency and reliability while minimizing the need 
for STB involvement.
    We appreciate the interest this Committee has shown on this 
important issue, and we look forward to working with you on legislation 
and regulatory oversight to address ongoing freight rail service 
challenges and to promote a more competitive rail industry.

    Mr. Nehls. Thank you, Mr. Jahn.
    Mr. Scribner, you are recognized for 5 minutes.

   TESTIMONY OF MARC SCRIBNER, SENIOR TRANSPORTATION POLICY 
                   ANALYST, REASON FOUNDATION

    Mr. Scribner. Good afternoon, Chairman Nehls, Ranking 
Member Payne, Ranking Member Larsen, and members of the 
subcommittee. Thank you for the opportunity to testify before 
you today.
    My name is Marc Scribner. I am a senior transportation 
policy analyst at Reason Foundation, a national nonprofit and 
nonpartisan public policy research and education organization.
    Throughout our 45-year history, transportation innovation 
has been a major area of focus. My testimony focuses on the 
growing role and benefits of automation technologies and 
surface transportation generally, and freight rail 
specifically, as well as policy barriers to the development and 
deployment of these technologies, and the potential 
consequences of failing to address these barriers.
    After decades of excessive economic regulation nearly 
destroyed the railroad industry in the United States, Congress 
responded by enacting deregulatory measures that culminated in 
the Staggers Rail Act of 1980. The Staggers Act helped reverse 
U.S. freight rail's terminal decline and has encouraged 
hundreds of billions of dollars in private investment since its 
enactment.
    The gains enjoyed by customers and carriers in the decades 
that followed are large and unambiguous. Estimated inflation 
adjusted average freight rates have declined by nearly half, 
while freight volume grew by more than 50 percent.
    Even though the Staggers Act concerned economic regulation, 
it also facilitated large safety gains. A 2016 study published 
in the Review of Industrial Organization found that, quote, 
``Staggers may be responsible for most of the reduction in the 
accident rate from its 1978 high,'' unquote, and that, quote, 
``FRA regulatory restrictions that have been adopted since the 
Staggers Act, however, are not associated with improved 
safety,'' unquote.
    Despite this impressive turnaround, near- and long-term 
threats to freight rail's ongoing success have emerged. The 
COVID-19 pandemic threw supply chains into chaos, and freight 
rail was not spared. The pandemic's impact was multifaceted 
with large shocks to both supply and demand.
    During the worst of the pandemic, total consumption 
remained on trend due in part to generous Government assistance 
that kept personal incomes high. Consumers instead shifted 
their spending from services, many of which were shuttered to 
mitigate public health risks, to durable and nondurable goods. 
Coupled with capacity constraints, this large spike in goods 
consumption quickly overwhelmed every supply chain link.
    None of these problems could be resolved quickly, absent 
perhaps a major economic recession, which most would say is 
undesirable. Only subsiding goods demand or long-term 
investment and additional logistics capacity to serve these new 
normal demand patterns could ease congestion. However, emerging 
automation technologies could have improved logistics 
efficiency and blunted some of the negative effects experienced 
over the last few years.
    In the broader transportation automation landscape, 
applications for road vehicles have received the most 
attention. Advanced driver assistance systems, such as 
automatic emergency braking and lane-keeping assistance, are 
available in cars marketed to consumers today. Extensive 
testing and limited commercial deployments of fully automated 
passenger and freight road vehicles have also occurred in 
recent years. Truck automation technologies are currently being 
developed by numerous companies.
    While achieving fully automated commercial trucking 
operations at scale is years away, the industry has good reason 
to continue these technology investments. According to the 
American Transportation Research Institute, truckdriver wages 
and benefits accounted for 44 percent of operating costs on a 
per-mile basis in 2021, roughly double the cost of fuel, the 
next highest cost category.
    The potential productivity gains from reducing labor costs 
and increasing asset utilization would have dramatic 
competitive implications for the broader surface transportation 
market.
    Freight rail automation technologies to improve safety and 
efficiency are also being pursued. Given the potential cost 
savings from trucking automation, automating rail will be 
necessary to compete in the transportation sector of the 
future, particularly for higher value traffic such as 
intermodal, for which railroads already compete intensely with 
truck carriers.
    Regulations that would reduce development and deployment of 
new rail technologies needed to compete in the freight 
transportation marketplace would have negative consequences for 
shippers and consumers. But there are also social consequences 
worth considering.
    A 2011 GAO report estimated truck accidents result in 6 
times as many fatalities per billion ton-miles as rail and 
nearly 17 times as many injuries. Thus, a shift in freight 
traffic from rail to truck can be expected to have a negative 
impact on overall transportation safety.
    Similarly, a modal shift from rail to truck is likely to 
worsen environmental outcomes. According to the EPA, when 
compared to freight rail, trucks produce approximately 10 times 
as much carbon dioxide, more than 3 times as much fine 
particulate matter, and 2\1/2\ times as much nitrogen oxides 
per ton-mile.
    Thank you for the opportunity to testify before the 
subcommittee, and I welcome your questions.
    [Mr. Scribner's prepared statement follows:]

                                 
   Prepared Statement of Marc Scribner, Senior Transportation Policy 
                       Analyst, Reason Foundation
    Chairman Nehls, Ranking Member Payne, and Members of the 
Subcommittee, thank you for the opportunity to testify before you 
today. My name is Marc Scribner. I am a senior transportation policy 
analyst at Reason Foundation, a national 501(c)(3) public policy 
research and education organization with expertise across a range of 
policy areas, including surface transportation.\1\
---------------------------------------------------------------------------
    \1\ My biography and writings are available at https://reason.org/
author/marc-scribner/.
---------------------------------------------------------------------------
    Throughout its 45-year history, Reason Foundation has conducted 
research on emerging surface transportation technologies and their 
interactions with public policy. My testimony focuses on the growing 
role and benefits of automation technologies in surface transportation 
generally and freight rail specifically, policy barriers to the 
development and deployment of these technologies, and the potential 
consequences of failing to address these barriers.
                            I. Introduction
    After decades of excessive economic regulation nearly destroyed the 
railroad industry in the United States, Congress responded by enacting 
deregulatory measures that culminated in the Staggers Rail Act of 1980. 
The Staggers Act helped reverse U.S. freight rail's decline and has 
incentivized hundreds of billions of dollars in private investment 
since its enactment.
    The gains enjoyed by customers and carriers in the decades that 
followed are large and unambiguous. Inflation-adjusted average freight 
rates (revenue per ton-mile) have declined by nearly half while freight 
volume (ton-miles) grew by more than 50%.\2\ Even though the law only 
concerned economic deregulation, the Staggers Act also enabled large 
safety gains through system investment, with a 76% decline in train 
accident rates and an 85% decline in employee injuries and occupational 
illnesses since enactment.\3\ A 2016 study published in the Review of 
Industrial Organization found that ``Staggers may be responsible for 
most of the reduction in the accident rate from its 1978 high'' and 
that ``FRA regulatory restrictions that have been adopted since the 
Staggers Act, however, are not associated with improved safety.'' \4\
---------------------------------------------------------------------------
    \2\ Association of American Railroads, Railroad Facts 2021 Edition 
(Washington: Association of American Railroads, 2021). 34. Bureau of 
Transportation Statistics, National Transportation Statistics, Table 1-
50.
    \3\ Association of American Railroads, Railroad Facts 2021 Edition. 
62-63.
    \4\ Jerry Ellig and Patrick A. McLaughlin, ``The Regulatory 
Determinants of Railroad Safety,'' Review of Industrial Organization 49 
(Sep. 2016). 371-398.
---------------------------------------------------------------------------
    Despite this impressive turnaround, near- and long-term threats to 
freight rail's success have emerged. The COVID-19 pandemic threw supply 
chains into chaos and freight rail was not spared. The pandemic's 
impact was multifaceted with large shocks to both supply and demand.
    During the worst of the pandemic, total consumption remained on-
trend due in part to generous government assistance that kept personal 
incomes high. Consumers instead shifted their spending from services--
many of which were shuttered to mitigate public health risks--to 
durable and nondurable goods. This shock was exemplified by the massive 
e-commerce boom.
    This sudden shift in consumption overwhelmed every segment of the 
logistics industry. Warehouses stocked with goods meant to cater to 
pre-pandemic consumer demand became extremely congested as businesses 
sought to reorient inventory around new demand patterns. The lack of 
warehouse capacity led to delays in unloading shipping containers, many 
of which remained full, sitting on truck chassis in parking lots and 
loading docks outside warehouses--essentially as overflow storage 
capacity.
    With warehouse parking lots and loading docks at capacity, rail and 
maritime shipping customers were not picking up their full containers 
from or returning their empty containers to ports and rail ramps on 
time. Carriers could then not return empty containers and chassis to 
repeat this transportation cycle, increasing congestion and compounding 
delays. This situation generated headline-grabbing news coverage of 
container ships floating off the California shore, waiting for days or 
even weeks to unload their cargo.
    None of these problems could be resolved quickly absent a major 
economic recession--only subsiding goods demand or long-term investment 
in additional logistics capacity to serve these ``new normal'' demand 
patterns could ease congestion. However, emerging automation 
technologies could have improved logistics efficiency and blunted some 
of the negative effects experienced over the last few years. These 
include cargo handling equipment used at ports and warehouses, as well 
as transportation automation technologies for trucks, trains, ships, 
and aircraft.
    While many are in their infancy, all of these automation 
technologies offer great promise that could benefit freight carriers, 
shippers, and consumers in the decades ahead. In addition to enhanced 
efficiency, road and rail safety would also be improved by removing the 
human factors responsible for most accidents. The main challenge for 
policymakers going forward is ensuring that the development and 
deployment of transportation and logistics automation technologies is 
not unduly encumbered by obsolete or counterproductive new policies.
                 II. Surface Transportation Automation
    In the broader transportation automation landscape, applications 
for road vehicles have received the most attention. Advanced driver 
assistance systems such as automatic emergency braking and lane-keeping 
assistance are available in cars marketed to consumers today. Extensive 
testing and limited commercial deployments of fully automated--often 
called ``driverless''--passenger and freight road vehicles have also 
occurred in recent years.
    Truck automation technologies are currently being developed by 
numerous companies. Some, such as Aurora, TuSimple, and Waymo, are 
focused on automating the long-haul Class 8 tractor-trailer market 
segment, and testing is taking place in the southwest United States. 
Others, most notably Gatik, are focused on automating short-haul, less-
complex operations with smaller trucks.\5\
---------------------------------------------------------------------------
    \5\ Marc Scribner, ``The Short and Long Views of Automated 
Trucking,'' Surface Transportation Innovations (10 Apr. 2023). https://
reason.org/transportation-news/hydrogen-fuel-cells-automated-trucking-
more/#c.
---------------------------------------------------------------------------
    While achieving fully automated commercial trucking operations at 
scale is years away, the industry has good reason to continue these 
technology investments. According to the American Transportation 
Research Institute, truck driver wages and benefits accounted for 44% 
of operating costs on a per-mile basis in 2021--roughly double the cost 
of fuel, the next highest cost category.\6\ The potential productivity 
gains from reducing labor costs and increasing asset utilization would 
have dramatic competitive implications for the broader surface 
transportation market.
---------------------------------------------------------------------------
    \6\ Alex Leslie and Dan Murray, ``An Analysis of the Operational 
Costs of Trucking: 2022 Update,'' American Transportation Research 
Institute (Aug. 2022). 17. https://truckingresearch.org/wp-content/
uploads/2022/08/ATRI-Operational-Cost-of-Trucking-2022.pdf.
---------------------------------------------------------------------------
    The freight rail industry in the U.S. is also pursuing automation 
technologies to improve safety and efficiency. Given the potential cost 
savings from trucking automation, automating rail will be necessary to 
compete in the transportation sector of the future, particularly for 
higher-value traffic such as intermodal for which railroads already 
compete intensely with truck carriers.
    One form of rail automation is occurring in infrastructure 
inspection. Manned track geometry cars have been in service for nearly 
a century after rail networks grew too large and dense for manual 
visual track inspections alone. While the parameters measured may vary, 
the general purpose of geometry cars is to examine tracks for defects 
to ensure compliance with industry and government standards, as well as 
inform and prioritize future maintenance actions. Today, automated 
track inspection vehicles may be hi-rail trucks (modified highway 
trucks with rail wheels that can be lowered to operate on tracks) or 
railcars with inspection equipment that can be added to trains in 
revenue service.
    The benefits of automated track inspection (ATI) include more 
reliable defect detection, more robust maintenance data analysis and 
planning, redeployment of visual inspectors to higher-need areas and 
for infrastructure that cannot be inspected by ATI equipment, reduced 
human exposure to safety hazards in the field, and reduced delays to 
trains in revenue service. While it has long acknowledged the benefits 
of ATI, the Federal Railroad Administration (FRA), since 2021, has 
reversed course by denying multiple ATI waiver requests. The 
Committee's ongoing investigation will hopefully yield answers as to 
what motivated FRA's reversal, but continued oversight from both 
Congress and the courts is necessary to ensure FRA has not abandoned 
its rail safety mission. Congress should also examine better ways to 
permanently integrate ATI use into the track inspection regulatory 
framework that do not require case-by-case waivers.
    A more ambitious application of rail automation is automating train 
operations. Train automation is likely to be incremental as functions 
are gradually automated and personnel are relieved from certain tasks 
as safety is assured. Energy management technologies save fuel through 
automated control of throttling and braking, much like cruise control 
in cars, and could be leveraged to automate additional tasks.\7\
---------------------------------------------------------------------------
    \7\ William C. Vantuono, ``On Board with TALOS at TTCI,'' Railway 
Age (3 Dec. 2019). https://www.railwayage.com/cs/ptc/on-board-with-
talos-at-ttci/.
---------------------------------------------------------------------------
    The gradual adoption of train automation could result in sizeable 
cost savings. For instance, an incremental automation phase-in could 
allow for reducing train crew-sizes from two to one, which consultancy 
Oliver Wyman in 2015 estimated could save U.S. railroads up to $2.5 
billion per year by 2029.\8\ That same analysis, conducted at the 
request of the Association for American Railroads, found no evidence 
that two-person train crews are safer than one-person crews by 
analyzing European rail operations where single-person crews are 
common.\9\
---------------------------------------------------------------------------
    \8\ ``Analysis of North American Freight Rail Single-Person Crews: 
Safety and Economics,'' Oliver Wyman (3 Feb. 2015). 48. https://
www.reginfo.gov/public/do/eoDownloadDocument?
pubId=&eodoc=true&documentID=1014.
    \9\ Ibid. 36.
---------------------------------------------------------------------------
    Certain lower-risk operations, such as shunting in railyards, are 
likely to see automation technology deployed sooner. But international 
experience suggests fully automating at least some long-distance 
freight trains in the U.S. may be on the horizon.
    In 2019, mining giant Rio Tinto Group successfully launched its 
AutoHaul fully automated train operations in Western Australia.\10\ 
AutoHaul involves the simultaneous operation of up to 50 unmanned 
trains, each 1.5 miles long and carrying 240 cars of iron ore from 
mines to ports on an average 500-mile, 40-hour journey. Loading and 
unloading is completely automated, although crews still get on board 
and manually operate the trains as they approach ports. Rio Tinto's 
nearly $1 billion effort took over a decade of planning, development, 
and testing, but reductions in travel time, fuel consumption, and track 
and locomotive wear-and-tear have already been realized.
---------------------------------------------------------------------------
    \10\ Kevin Smith, ``Rise of the machines: Rio Tinto breaks new 
ground with AutoHaul,'' International Railway Journal (9 Aug. 2019). 
https://www.railjournal.com/in_depth/rise-machines-rio-tinto-autohaul.
---------------------------------------------------------------------------
    While sparsely populated Western Australia is a significantly less 
challenging environment than the U.S., given fewer potential conflicts, 
train automation in more urbanized areas will soon be taking place 
internationally. For example, Belgian startup OTIV announced earlier 
this year that it had signed a multi-year contract to deploy automated 
and remote-controlled freight train technology on a rail line between 
the Netherlands and Germany.\11\
---------------------------------------------------------------------------
    \11\ Nick Augusteijn, ``OTIV announces multi-year contract for 
running remotely controlled freight trains,'' RailTech.com (13 Jan. 
2023). https://www.railtech.com/infrastructure/2023/01/13/otiv-
announces-multi-year-contract-for-running-remotely-controlled-freight-
trains/.
---------------------------------------------------------------------------
            III. Policy Barriers to Freight Rail Automation
    There are two major emerging economic and operational regulatory 
threats related to automation that would reduce the ability of 
railroads to compete in the freight transportation marketplace over 
time and likely negatively impact the economy and consumers.
    Return on Investment. Despite the success of the Staggers Act, new 
forms of direct economic regulation of freight railroads may be on the 
horizon, which could impact railroad innovation and long-run 
competitiveness.
    The Surface Transportation Board (STB) is currently considering a 
re-regulatory proposal that would make it easier to require competing 
Class I railroads to interchange each other's traffic and impose 
service mandates.\12\ Proposed regulations governing reciprocal 
switching may negatively impact railroads' return on investment, which 
would have negative long-run effects on shippers and consumers.
---------------------------------------------------------------------------
    \12\ Petition for Rulemaking To Adopt Revised Competitive Switching 
Rules; Reciprocal Switching, Notice of Proposed Rulemaking, Surface 
Transportation Board, Docket No. EP 711 (Sub-No. 1), 81 Fed. Reg. 
51,149 (3 Aug. 2016)
---------------------------------------------------------------------------
    Reciprocal switching arrangements occur voluntarily between 
carriers but can also be mandated by the STB to promote 
competition.\13\ Among other requirements, current rules stipulate that 
anticompetitive conduct on the part of a rail carrier must be 
established in order for the STB to prescribe mandatory reciprocal 
switching as a remedy.\14\
---------------------------------------------------------------------------
    \13\ 49 U.S.C. Sec.  11102(c).
    \14\ 49 C.F.R. Sec.  1144.2.
---------------------------------------------------------------------------
    In Feb. 2022, the STB held a public hearing on revisions to 
reciprocal switching regulations first proposed in 2016.\15\ Most 
significantly, the STB's proposal would eliminate the anticompetitive 
conduct requirement and allow the STB to mandate reciprocal switching 
under diminished evidentiary standards because of ``[t]he sheer dearth 
of cases brought.'' \16\ In fact, since the mid-1980s when the 
anticompetitive conduct requirement was established, the STB and the 
Interstate Commerce Commission (ICC) before it have found precisely 
zero instances of anticompetitive conduct on the part of the rail 
carriers.
---------------------------------------------------------------------------
    \15\ Reciprocal Switching, Notice of Public Hearing, Surface 
Transportation Board, Docket No. EP-711 (Sub-No. 1), 87 Fed. Reg. 62 (2 
Jan. 2022).
    \16\ Petition for Rulemaking To Adopt Revised Competitive Switching 
Rules; Reciprocal Switching. 51,152.
---------------------------------------------------------------------------
    Weakening the evidentiary standards for mandatory reciprocal 
switching has long been a priority of some industrial shippers, who 
presumably hope to enjoy below-market rates that may result. While it 
may provide temporary private benefits to select shippers in the form 
of below-market rates, the potential operational complexity and 
resulting delays (as well as reduced rail productivity) may offset 
those temporary benefits.\17\
---------------------------------------------------------------------------
    \17\ Joanna Marsh, ``No simple swap: Ins and outs of reciprocal 
switching on US railroads,'' FreightWaves (1 Oct. 2021). https://
www.freightwaves.com/news/no-simple-swap-ins-and-outs-of-reciprocal-
switching-on-us-railroads.
---------------------------------------------------------------------------
    More concerning is the long-run impact of capriciously mandated 
reciprocal switching. In response to restrictions on market pricing 
that would reduce earnings and thereby reduce shareholder willingness 
to tolerate significant reinvestment of profits, rail carriers are 
likely to adopt strategies to minimize the costs and risks associated 
with this regulation in ways that harm shippers, such as reduced 
investment in new capacity and abandonment of low-demand lines.
    Most significantly for this discussion, the STB's proposed 
reciprocal switching regulatory changes would likely reduce investment 
in new technologies that are needed for freight rail to compete with 
increasingly automated trucking in the decades ahead.\18\ A 2017 study 
published in Transportation Research Record surveying railroad managers 
and transportation engineers on freight rail automation found 
``significant concern that the industry will be unable to fund the 
development of new technology.'' \19\
---------------------------------------------------------------------------
    \18\ Ibid.
    \19\ James D. Brooks, et al., ``Survey of Future Railroad 
Operations and the Role of Automation,'' Transportation Research 
Record: Journal of the Transportation Research Board 2608 (2017). 17.
---------------------------------------------------------------------------
    Train Automation. Arbitrary labor requirements would also reduce 
the incentive of rail carriers to invest in and deploy automation 
technologies necessary to compete with increasingly automated trucking 
in the years ahead, which could produce a variety of economic, safety, 
and environmental impacts. In 2016, when the Federal Railroad 
Administration (FRA) first proposed a minimum crew-size regulation, it 
conceded that ``FRA cannot provide reliable or conclusive statistical 
data to suggest whether one-person crew operations are generally safer 
or less safe than multiple-person crew operations.'' \20\
---------------------------------------------------------------------------
    \20\ Train Crew Staffing, Notice of Proposed Rulemaking, Federal 
Railroad Administration, Docket No. FRA-2014-0033, 81 Fed. Reg. 13,917 
(15 Mar. 2016). 13,919.
---------------------------------------------------------------------------
    This admission of FRA's lack of data to support its proposed rule 
did not originate from FRA. Rather, it came from the White House Office 
of Management and Budget's Office of Information and Regulatory Affairs 
(OIRA). A review of the docket indicates that the draft notice of 
proposed rulemaking that FRA originally sent to OIRA for review instead 
incorrectly claimed, ``Studies show that one-person train operations 
pose increased risks by potentially overloading the sole crew member 
with tasks.'' \21\
---------------------------------------------------------------------------
    \21\ ``NPRM Crew Staffing OIRA Edits,'' Federal Railroad 
Administration, Docket No. FRA-2014-0033 (8 Mar. 2016). 7. https://
www.regulations.gov/document?D=FRA-2014-0033-0003.
---------------------------------------------------------------------------
    Despite the absence of evidence, FRA continued forward on the 
proposed crew-size rule until it was withdrawn in 2019. In its 
withdrawal notice, the agency concluded, ``FRA's statement in the 
[proposed rule] that it `cannot provide reliable or conclusive 
statistical data to suggest whether one-person crew operations are 
generally safer or less safe than multiple-person crew operations' 
still holds true today.'' \22\
---------------------------------------------------------------------------
    \22\ Train Crew Staffing, Notice of Proposed Rulemaking; 
Withdrawal, Federal Railroad Administration, Docket No. FRA-2014-0033, 
84 Fed. Reg. 24,735 (29 May 2019). 24,737.
---------------------------------------------------------------------------
    The 2019 withdrawal notice also contained a nationwide preemption 
order that was aimed at overriding several state crew-size laws, which 
had been enacted in recent years. This was challenged in federal court 
by two railroad unions and three states. In Feb. 2021, the U.S. Court 
of Appeals for the Ninth Circuit ruled in favor of the challengers, 
finding that FRA had failed to meet procedural requirements in issuing 
the preemption order.\23\ The court remanded the matter to FRA to 
reconsider the underlying issues and FRA has since issued a new 
proposed rule on train crew size.
---------------------------------------------------------------------------
    \23\ Transp. Div. of Int'l Ass'n-SMART v. Federal Railroad 
Administration, No. 19-71787 (9th Cir. 2021).
---------------------------------------------------------------------------
    Like the 2016 notice of proposed rulemaking (NPRM), FRA concedes in 
its latest NPRM from July 2022 that it does not possess ``any 
meaningful data'' to support the conclusion that two-person train crews 
are safer or that one-person crews are less safe.\24\ Despite the lack 
of a safety basis supporting a two-person crew-size minimum, 
legislation introduced in the U.S. Senate in response to the recent 
derailment in East Palestine, Ohio, would impose such a mandate in 
statute.\25\ Significantly, the East Palestine train had three 
crewmembers on board at the time of the derailment.\26\
---------------------------------------------------------------------------
    \24\ Train Crew Size Safety Requirements, Notice of Proposed 
Rulemaking, Federal Railroad Administration, Docket No. FRA-2021-0032, 
87 Fed. Reg. 54,564 (28 July 2022). 45,571.
    \25\ Railway Safety Act of 2023, S. 276, 118th Cong., 1st Sess. 
(2023). Sec.  6.
    \26\ Eric Boehm, ``After the East Palestine Derailment, Congress Is 
Trying To Force Unrelated, Costly Regulations on Railroads,'' Reason 
(24 Mar. 2023). https://reason.com/2023/03/24/after-the-east-palestine-
derailment-congress-is-trying-to-force-unrelated-costly-regulations-on-
railroads/.
---------------------------------------------------------------------------
    As was noted previously, truck automation may be able to reduce 
truck operating costs by nearly half. A two-person crew-size mandate 
would impose a perpetual rail labor cost floor, thereby disadvantaging 
freight rail to its increasingly automated trucking competitors and 
cause some shippers to substitute trucks for rail.
       IV. Potential Consequences of Unaddressed Policy Barriers
    Since partial deregulation of the railroad industry under the 
Staggers Act, the fastest growing traffic segment has been intermodal--
the shipping containers and trailers that can be moved between rail, 
truck, and waterborne carriers--where intermodal rail traffic increased 
by nearly 340% between 1980 and 2020.\27\ Intermodal rail traffic in 
2020 accounted for 9.4% of total tons originated and 17% of gross 
revenue, which would constitute the largest revenue share of any 
commodity group if intermodal traffic was grouped together. Much of the 
future growth of intermodal traffic on rail is likely to depend on how 
adequately rail can compete with and complement over-the-road trucking.
---------------------------------------------------------------------------
    \27\ Association of American Railroads, Railroad Facts 2021 
Edition. 29.
---------------------------------------------------------------------------
    Automated trucking would be a boon to shippers. Certain 
applications of truck automation, such as platooning formations of 
``road trains'' consisting of multiple trucks, could create new 
dimensions of surface transportation competition where rail currently 
has a strong advantage over trucks. To compete in this increasingly 
automated transportation marketplace, rail will also need to harness 
automation technologies.
    However, if the aforementioned policy barriers to rail automation 
are left unaddressed, rail will increasingly be at a competitive 
disadvantage to trucking. This would cause some rail customers to 
choose truck carriers instead and have safety and environmental 
consequences as well.
    With respect to safety, trucks are involved in far more accidents 
than rail. Rail's safety advantage becomes apparent when accounting for 
the volume of freight moved, with a 2011 Government Accountability 
Office report estimating that truck accidents produce more than six 
times as many fatalities per billion ton-miles moved than rail 
accidents and nearly 17 times as many injuries.\28\ Thus, a shift in 
freight traffic from rail to truck can be expected to have a negative 
impact on overall transportation safety.
---------------------------------------------------------------------------
    \28\ ``A Comparison of the Costs of Road, Rail, and Waterways 
Freight Shipments That Are Not Passed on to Consumers,'' Government 
Accountability Office (Jan. 2011). 27. https://www.gao.gov/assets/gao-
11-134.pdf.
---------------------------------------------------------------------------
    Similarly, a modal shift from rail to truck is likely to worsen 
environmental outcomes. According to the Environmental Protection 
Agency, when compared to freight rail, trucks produce approximately 10 
times as much carbon dioxide (CO2), more than three times as 
much fine particulate matter (PM2.5), and two-and-a-half 
times as much nitrogen oxides (NOX) per ton-mile.\29\ If 
automated trucking leads rail customers to shift their traffic to 
highways, it can be expected that the emissions intensity of the 
transportation sector will increase.
---------------------------------------------------------------------------
    \29\ ``2022 SmartWay Online Shipper Tool: Technical 
Documentation,'' U.S. Environmental Protection Agency (Oct. 2022). 28, 
Appendix A. https://www.epa.gov/system/files/documents/2022-10/
420b22046.pdf.
---------------------------------------------------------------------------
                             V. Conclusion
    The fallout from the COVID-19 pandemic raised the profile of issues 
related to freight transportation efficiency and resilience. While the 
supply chain chaos experienced during the last few years has moderated, 
Congress should continue to monitor these trends. Emerging automation 
technologies are expected to reshape the transportation sector in the 
coming decades. To encourage innovation, outdated prescriptive rules 
should be replaced with performance-based regulations.
    In the case of freight rail, Congress should ensure existing 
regulations and new policies do not unduly hamper freight rail's 
ability to adapt to the evolving competitive landscape. A failure to do 
so would not only harm America's consumers, who benefit greatly from 
robust competition between freight modes of transportation, but would 
have negative safety and environmental consequences as well.
    Thank you for the opportunity to testify before the Subcommittee, 
and I welcome your questions.

    Mr. Nehls. Thank you, Mr. Scribner.
    I now recognize Mr. Regan. You have 5 minutes, my friend.

   TESTIMONY OF GREG REGAN, PRESIDENT, TRANSPORTATION TRADES 
                      DEPARTMENT, AFL-CIO

    Mr. Regan. Thank you, Chairman Nehls, Ranking Member Payne, 
Chairman Graves, and Ranking Member Larsen, for having me 
today. I am Greg Regan, president of the Transportation Trades 
Department, AFL-CIO. TTD is a federation of 37 unions whose 
members design, build, operate, and maintain America's 
transportation network. We proudly represent the totality of 
rail labor whose members work on those front lines across the 
entire passenger and freight rail industry. These workers see 
firsthand the service, safety, and staffing challenges in 
freight rail, and we know the negative consequences for 
workers, customers, and communities when the system is not 
operating properly.
    Today, I am reminded of the last time I testified before 
this committee, just 2 days before the derailment in East 
Palestine, Ohio. This derailment traumatized a community and 
drew national attention to safety deficiencies in the freight 
rail network.
    The East Palestine derailment is the embodiment of the fact 
that rail workers have warned about for years: that safety, 
customer service, and workforce morale at the Class I freight 
railroads have been subverted by a business model that 
prioritizes profits and shareholder returns above all.
    I want to emphasize two points today. First, that safety 
and service issues are directly connected and are the result of 
management decisions. Second, the only way this industry will 
improve is through intervention by Congress. The industry will 
not meaningfully reform itself, and core safety and service 
improvements should not be left for the bargaining table.
    Any service industry should be responsive to the demands 
and needs of its consumers. Instead, the Class I railroads 
adopted an operating model known as Precision Scheduled 
Railroading, which fundamentally seeks to generate the highest 
possible profits to the lowest possible operating ratios.
    A key element of this business model is stripping rail 
networks of their physical and human capital. Since 2015, Class 
I railroads reduced their total workforce by 30 percent. They 
slashed their private investments in physical infrastructure 
and sold off or sidelined essential equipment. In making these 
cuts, the railroads have made a choice to simply not provide 
adequate rail service.
    The actions of the Class I's came to a head during the 
pandemic when freight rail service issues marred the supply 
chain. Throughout the pandemic, the railroads imposed service 
embargoes, limiting the amount of freight a railroad accepts 
from a customer. The embargoes led to massive backlogs of 
freight, including ships and containers at the Port of L.A. and 
Long Beach, among others.
    The Surface Transportation Board has taken unprecedented 
steps in recent years to monitor and direct the Class I 
railroads to improve their service. One year after the STB held 
watershed hearings on rail service issues, the Board found 
earlier this month that rail service had not meaningfully 
improved and that at least three of the big four freight 
railroads failed to meet their own self-improvement benchmarks.
    The railroads' issues also extend to safety. Unfortunately, 
East Palestine was not an anomaly. The industry averages over 
1,000 derailments a year. That is nearly three a day. Contrary 
to the railroads' rhetoric, the industry's safety record is 
getting worse, not improving. According to Federal data, the 
accident and incident rate has actually increased over the last 
decade at the four biggest Class I railroads.
    Labor unions, shippers, and the Class I's all agree that 
the first step to a better freight rail service is to hire more 
workers. Yet the railroads have made little progress in 
increasing their workforce numbers as well. As of March 2023, 
the total Class I employment level remained below pre-pandemic 
levels. It also is still significantly lower than the pre-PSR 
high watermark.
    On an individual Class I railroad basis, only Canadian 
Pacific and CSX have gotten back to their pre-pandemic 
employment levels.
    It is no surprise that Class I railroads have struggled to 
retain and hire the workforce they need to meet demand. While 
they talk about the importance of rebuilding their workforce, 
they still have not resolved the quality-of-life issues, like 
draconian attendance policies and lack of access to leave, that 
are driving workers out of the industry. Until they do so, 
employee hiring and retention rates will be insufficient, and 
rail service will suffer.
    It will take action from Congress, Federal regulators, and 
the railroads themselves to resolve the core staffing, service, 
and safety issues that threaten not only our country's freight 
rail supply chain but our overall economy. Rail labor and 
shippers are united around many of the proposed solutions, 
which doesn't actually happen very often.
    Congress should further strengthen and define the existing 
Federal common carrier obligation that rail carriers serve a 
shipper on a reasonable request. That reasonable request 
language is not defined in Federal statute, making it difficult 
to enforce.
    The Surface Transportation Board has made admirable efforts 
to get the railroads to improve service, but they need more 
enforcement tools to ensure that the railroads are meeting 
their common carrier obligations.
    Rail can be the greenest and most effective way to move 
cargo over land, but only if we have a well-kept infrastructure 
and well-trained workers in place to meet the existing demands 
and future demands of our shipping communities, and expand the 
market share of goods safely shipped by rail.
    We have a unique opportunity to get freight rail back on 
track by passing meaningful rail safety and service improvement 
legislation and harnessing the investments of the 
infrastructure law in concert with greater investments from the 
railroads themselves. It is time for everyone to act.
    Thank you for the opportunity. I look forward to your 
questions.
    [Mr. Regan's prepared statement follows:]

                                 
  Prepared Statement of Greg Regan, President, Transportation Trades 
                          Department, AFL-CIO
                              Introduction
    On behalf of the Transportation Trades Department, AFL-CIO (TTD), 
and our 37 affiliated unions, I thank Chairman Nehls and Ranking Member 
Payne for inviting me to testify before the Committee today on the 
current state of our rail supply chain. By way of background, among the 
many unions who affiliate with TTD, we proudly represent the totality 
of rail labor, whose members work on the front lines across the entire 
passenger and freight rail industry. That includes the rail workers 
directly engaged in freight transportation at railroads and ports who 
see first-hand the effects of a broken freight rail industry mired by 
self-inflicted service, safety, and staffing issues.
    Freight rail is of vital importance to the U.S. economy, accounting 
for around 40 percent of long-distance ton-miles and hauling one-third 
of U.S. exports.\1\ When freight shipping demand soared during the 
pandemic, the freight rail network's service, staffing, and safety 
issues severely hamstrung the supply chain. The Class I railroads 
missed a massive economic opportunity to grow the system and become 
more competitive with other freight industries. By working 
collaboratively with government--and yes, the unions that represent 
their workers--to reform their current operating model, Class I 
railroads can improve service and safety; move more freight in a 
greener, more efficient way; and improve U.S. economic competitiveness. 
The status quo, however, is unsustainable.
---------------------------------------------------------------------------
    \1\ https://www.aar.org/wp-content/uploads/2021/03/AAR-Integrated-
Rail-Network-Fact-Sheet.pdf
---------------------------------------------------------------------------
Class I Freight Railroads Have Spent Years Undermining the Supply Chain
    The Class I railroads have strayed from the traditional operating 
model of a service industry that responds to the demands and needs of 
its customers. Instead, the Class I railroads began pursuing an 
operating model known as Precision Scheduled Railroading (PSR) in 2015. 
Fundamentally, PSR seeks to generate the highest possible profits 
through the lowest possible operating ratios. To achieve these profits, 
railroads have stripped rail networks of their physical and human 
capital.
    Since 2015, the Class I railroads have reduced their total 
workforce by 30 percent and slashed their private investments in 
physical infrastructure, like rail yards, and sold off or sidelined 
essential equipment such as rail cars and locomotives. Collectively, 
the four largest freight railroads in the United States--BNSF, Union 
Pacific (UP), Norfolk Southern (NS), and CSX--have slashed $32 billion 
in private capital expenditures since 2015, not accounting for 
inflation.
    Due to these cuts, the railroads do not have the necessary 
equipment to provide adequate rail service. For example, since 2015, UP 
has reduced its rail locomotive fleet by 11% and the number of freight 
cars by 21%; it only managed to keep 62% of its remaining locomotives 
and 80% of its freight cars in service in 2021.\2\
---------------------------------------------------------------------------
    \2\ UP: Annual Reports
---------------------------------------------------------------------------
    In January 2023, BNSF had 1,000 locomotives that were sidelined 
waiting for full inspections and BNSF stated that they ``do not have 
the necessary manpower and shop capacity available on the property to 
address the unusually high out of service count and backlog of 
scheduled maintenance events.'' \3\ After they closed maintenance shops 
and decreased or furloughed the maintenance workforce. There are now 
much fewer locomotives to serve shippers and the remaining locomotives 
wear down more quickly. That has led to equipment availability problems 
for BNSF and its shippers.
---------------------------------------------------------------------------
    \3\ February 2023 Rail Unions Lawsuit against BNSF. Accessed at 
https://www.businesswire.com/news/home/20230307005934/en/IBEW-IAM-
SMART-MD-Unions-File-Outsourcing-Suit-Against-BNSF-Railway (see items 
49 and 54 on pages 11 and 12 respectively)
---------------------------------------------------------------------------
    The rail industry's decline in their private capital investment is 
in stark contrast to the record $66 billion federal investment the 
Infrastructure Investment and Jobs Act (IIJA) provides for passenger 
and freight rail. In addition, the bill invests $2.2 billion in the 
Port Infrastructure Development Program, offering a lifeline to the 
nearly half of U.S. ports that state that better rail access could 
increase throughput capacity by more than 25 percent.\4\
---------------------------------------------------------------------------
    \4\ https://aapa.files.cms-plus.com/PDFs/
State%20of%20Freight%20III.pdf
---------------------------------------------------------------------------
    As policymakers and the private sector consider strategies to 
expedite the flow of goods at major ports, it is essential that federal 
funds are maximized to become an economic force multiplier throughout 
the supply chain.
    These federal investments are essentially designed to increase 
economic opportunities for the railroads; however, the railroads must 
also do their part to seize these opportunities for their own good and 
the good of the country by making an equal investment in their own 
infrastructure, safety operations, and service levels.
            Freight Rail Service is a Supply Chain Challenge
    Freight rail service issues severely hamstrung the supply chain 
during the pandemic. Throughout the pandemic, the railroads imposed 
service embargoes, limiting the freight a railroad accepts from a 
customer.\5\ These service embargoes led to massive backlogs of freight 
waiting to move by rail, including ships and containers at the Ports of 
Los Angeles and Long Beach, among others.
---------------------------------------------------------------------------
    \5\ https://www.bnsf.com/news-media/customer-notifications/
notification.page?notId=limited-embargo-of-certain-shipments-destined-
for-california and https://www.trains.com/trn/news-reviews/news-wire/
union-pacific-asks-customers-to-meter-traffic-or-face-embargoes/
---------------------------------------------------------------------------
    The Surface Transportation Board (STB), the independent federal 
agency that serves as the economic regulator of the freight rail 
industry, has taken unprecedented steps in recent years to monitor and 
direct the Class I railroads to improve their service. Last year, the 
STB held a series of watershed hearings on the rail industry's service 
issues. On May 1, 2022, the STB ordered the four biggest Class I 
railroads--BNSF Railway, Union Pacific, CSX, and Norfolk Southern--to 
submit service recovery plans. One year later, rail service has not 
meaningfully improved. In fact, on the anniversary of its May 1st 
order, the Board unanimously issued a decision finding that at least 
three of the four railroads (BNSF, Norfolk Southern, Union Pacific) 
were not complying with the service plans and targets that the 
railroads themselves submitted to the STB detailing how they were going 
to improve service.
    The STB's May 1 decision was bipartisan, with all three Democratic 
members and two Republican members unanimously agreeing that freight 
railroads are not providing adequate service. With a few exceptions, 
the STB's actions over the last year have been supported by all five 
members, demonstrating that the state of rail service is not a partisan 
debate. Democrats and Republicans both believe the Class I railroads 
are performing quite poorly.
    Likewise, members of Congress from both parties and both Chambers 
have repeatedly raised how the railroads' poor service is negatively 
impacting their constituents and a wide array of businesses in 
practically every sector of the American economy, including 
agriculture, energy, mining, and chemicals.\6\
---------------------------------------------------------------------------
    \6\ See Finstad Leads Letter Urging Action on Union Pacific Rail 
Service Delay--Press Releases--United States Congressman Brad Finstad 
(house.gov); https://www.cramer.senate.gov/news/press-releases/sens-
cramer-baldwin-colleagues-press-surface-transportation-board-on-rail-
disruptions-urge-reliable-service-for-american-industries-shippers; 
Rep. Ralph Norman & Rep. Jim Costa Lead Bipartisan Effort Concerning 
Deficient Rail Service's Role in Fertilizer, Grain and Feed Shortage 
Affecting American Farmers--U.S. Representative Ralph Norman 
(house.gov)
---------------------------------------------------------------------------
    Labor unions, federal regulators, and Members of Congress are not 
alone in calling attention to poor rail service. The shippers who rely 
on freight rail service are also sounding the alarm. In fact, rail 
customers have sought ``emergency service orders'' from the STB to 
address immediate and acute service problems. The threshold to obtain 
an emergency service order is quite high:

        ``Emergency service orders are designed to preserve rail 
        service where there has been a substantial rail service issue 
        or failure that requires immediate relief. Under 49 U.S.C. 
        11123(a), the Board may issue an emergency service order where 
        there exists `an emergency situation of such magnitude as to 
        have substantial adverse effects on shippers, or on rail 
        service in a region of the United States, or that a rail 
        carrier . . . cannot transport the traffic offered to it in a 
        manner that properly serves the public' ''.\7\
---------------------------------------------------------------------------
    \7\ https://www.federalregister.gov/documents/2022/05/02/2022-
09005/regulations-for-expedited-relief-for-service-emergencies (page 
25609, quoting 49 U.S.C. 11123(a))

    In December 2022, the STB held an emergency hearing involving Union 
Pacific and one of its customers, Foster Farms, because Union Pacific 
was not providing adequate rail service to deliver the corn feed Foster 
Farms needs to feed its chickens and prevent millions of them from 
dying.\8\ It took two emergency service orders from the STB to improve 
the situation. Foster Farms was not the only rail customer who suffered 
from poor rail service.
---------------------------------------------------------------------------
    \8\ https://www.wsj.com/articles/poultry-farm-says-millions-of-
chickens-could-starve-from-rail-delays-11673054052
---------------------------------------------------------------------------
    In 2022, UP had more than 1,000 service embargoes, a ten-fold 
increase from the 27 service embargoes it had in 2017.\9\ 98 percent of 
the service embargoes in 2022 were attributed to congestion on UP's 
rail network, which is something entirely within the railroad's 
control.\10\
---------------------------------------------------------------------------
    \9\ See the November 22nd, 2022 Notice issued by the Surface 
Transportation Board entitled: ``Oversight Hearing Pertaining to Union 
Pacific Railroad Company Embargoes'', Docket No. EP 772. Accessed at 
https://www.stb.gov/proceedings-actions/search-stb-records/.
    \10\ Ibid 9
---------------------------------------------------------------------------
    Similar to Foster Farms, Navajo Transitional Energy Company (NTEC), 
which is part of the Navajo Nation, on April 14th of this year filed 
for an emergency service order from the STB alleging that BNSF was not 
providing adequate service to NTEC's coal mine in Wyoming and BNSF's 
lack of service is putting NTEC's business at risk.\11\ The STB heard 
oral arguments in the case on May 10th and should issue a decision 
soon.\12\
---------------------------------------------------------------------------
    \11\ https://www.railwayage.com/regulatory/stbs-latest-service-
case-ntec-v-bnsf/
    \12\ Surface Transportation Board May 5th Decision, Docket No. NOR 
42178: Navajo Transitional Energy Company, LLC--Ex Parte Petition for 
Emergency Service Order. Accessible at https://www.stb.gov/proceedings-
actions/decisions/
---------------------------------------------------------------------------
    The bottom line is that railroads are failing their customers by 
not providing the level of service their customers need and that is 
required by the federal ``common carrier'' law. And the railroad CEOs 
admit that.\13\
---------------------------------------------------------------------------
    \13\ ``I was a customer for a couple decades. Our customers don't 
really love us.'' New CSX CEO Joe Hinrichs, September 26th 2022. See 
https://www.trains.com/trn/news-reviews/news-wire/new-csx-ceo-pledges-
to-improve-service-and-company-culture/
---------------------------------------------------------------------------
            Freight Rail Safety is a Supply Chain Challenge
    This hearing is not the first venue where freight rail's 
intertwined service and safety problems are being examined. On February 
1 of this year, I testified before the full Committee about supply 
chain challenges--a mere two days before the Norfolk Southern 
derailment in East Palestine, Ohio that traumatized a community and 
drew national attention to safety deficiencies in the freight rail 
network. The February 3rd East Palestine derailment tragically 
demonstrated a truth that rail labor unions have been vocal about for 
years: the freight rail industry has a fundamental disregard for the 
safety of workers and the general public.
    Unfortunately, the East Palestine derailment is not an anomaly. The 
wide-reaching breadth of safety failures in the freight rail industry 
contributes to more than 1,000 freight rail derailments a year--nearly 
three a day. And contrary to the railroads' rhetoric, the industry's 
safety record is worsening, not improving. In fact, according to data 
from the Federal Railroad Administration, the accident and incident 
rate has gotten worse over the last decade at the four biggest Class I 
railroads: BNSF Railway, Union Pacific, CSX, and Norfolk Southern.\14\ 
In rail yards, the accident and incident rate almost tripled for 
Norfolk Southern.\15\
---------------------------------------------------------------------------
    \14\ Data accessible here: https://safetydata.fra.dot.gov/
officeofsafety/publicsite/query/TenYearAccidentIncidentOverview.aspx
    \15\ Ibid 14
---------------------------------------------------------------------------
    Safety failures are pushing the system to the breaking point and 
this breakdown is negatively affecting shippers. For example, the 
railroads have cut back on capital investments in their infrastructure. 
That means they haven't lengthened rail sidings to accommodate the 
length of trains that they are running. The Association of American 
Railroads' (AAR) own fact sheet on train length notes that the 
railroads are running trains up to 14,000 feet, a 40 percent increase 
from 2010.\16\ As a result, when trains break down, they get stuck on 
the main line. That causes congestion and backups throughout the entire 
system. So even if a shipper doesn't have products on the train that 
broke down, they are affected.
---------------------------------------------------------------------------
    \16\ https://www.aar.org/wp-content/uploads/2023/03/AAR-Train-
Length-Fact-Sheet.pdf
---------------------------------------------------------------------------
    Despite dismal rail service and safety, rail corporations are 
financially rewarding their shareholders. The Class I railroads have 
achieved record profits--more than $146 billion in the last decade. 
Since 2015, the Class I railroads have collectively spent more than 
$165 billion to buy back their own stock, which is at least $46 billion 
more than they invested in safety. The priority of the rail companies 
is clear: returning as much money to their shareholders as possible, 
not running a safe rail system. That's why TTD launched a public safety 
campaign demanding that rail corporations halt all stock buybacks until 
they properly invest in safety.
           Freight Rail Staffing is a Supply Chain Challenge
    Between 2015 and 2021, the Class I railroads collectively laid off 
45,000 workers, which is the equivalent of 30% of their total 
workforce. Those layoffs affected every rail craft, from train 
engineers and conductors, to maintenance of way of employees and 
signalmen, to the shop-craft employees that inspect, repair, and 
maintain rail cars.
    Labor unions, shippers, and the Class I railroads all agree that 
the first step to better freight rail service is to hire more workers. 
It is not physically possible to move the same or greater volume of 
goods with 30% fewer workers. Unfortunately, contrary to their 
rhetoric, the railroads have not made much progress in increasing their 
workforce numbers.
    As of March 2023, which is the latest data available from the STB, 
the total Class I employment level was 120,668 employees.\17\ That 
still remains below pre-pandemic levels and it's also still 
significantly lower than the pre-PSR high watermark of 174,122 
employees in April 2015.\18\ Most rail crafts are also below their pre-
pandemic levels, with maintenance of equipment and stores employees 
more than 18% below pre-pandemic levels and train and engine 
transportation employment levels currently 1.5% below pre-pandemic 
levels. The one exception is executives and staff assistants, which are 
5% above their pre-pandemic levels.\19\
---------------------------------------------------------------------------
    \17\ Data accessible at https://www.stb.gov/reports-data/economic-
data/employment-data/
    \18\ Ibid 17
    \19\ Ibid 17
---------------------------------------------------------------------------
    On an individual Class I railroad basis, only Canadian Pacific and 
CSX have gotten back to their pre-pandemic employment levels in March 
2020.
    Insufficient workforce training also has ramifications for rail 
safety and service. Over the last several years, NS has reduced the 
amount of training for new train conductors from 16 weeks to 6 weeks 
before putting these workers into service because they desperately need 
more conductors.\20\ That means these conductors don't have the proper 
training to do their jobs, which includes identifying and potentially 
fixing mechanical problems when a train breaks down. The lack of 
training puts these conductors at risk of death or severe injury, 
increasing the likelihood of safety incidents. Shippers served by NS 
are harmed because the increase in safety incidents can lead to further 
delays in shipments.
---------------------------------------------------------------------------
    \20\ https://www.trains.com/trn/news-reviews/news-wire/fra-letter-
warns-norfolk-southern-about-conductor-training-safety-deficiencies/
---------------------------------------------------------------------------
                               Solutions
    It is going to take action from Congress and federal regulators 
such as the STB and the Federal Railroad Administration (FRA) to 
resolve the core staffing, service, and safety issues that threaten not 
only our country's freight rail supply chain, but our economy as a 
whole.
    Rail labor and shippers are united around many of the solutions 
here, which has not always been the case.
Strengthen the Common Carrier Obligation
    The ``common carrier obligation'' is a requirement that rail 
carriers serve a shipper ``on reasonable request''. It was put into 
federal law to ensure that the railroads didn't discriminate and refuse 
service to shippers they didn't want to serve. Right now, the term 
``reasonable request'' is not defined in federal statute and so it is 
hard to enforce. The Surface Transportation Board has been doing an 
admirable job trying to get the railroads to improve rail service, but 
they need more tools to do their job and ensure that the railroads are 
living up to their common carrier obligation.
    Congress should strengthen and better define the existing federal 
common carrier obligation the railroads have to serve their 
customers.\21\ Senator Tammy Baldwin introduced legislation last 
Congress that all rail labor unions and shipper groups from a wide 
array of industries, including the American Chemistry Council (ACC) 
endorsed.\22\ Senator Baldwin's legislation would strengthen and better 
define the common carrier obligation of the railroads by spelling out 
what ``reasonable request'' means and allow the STB to take into 
consideration items like workforce levels and the availability of 
equipment when determining whether the railroads are living up to their 
common carrier obligation.
---------------------------------------------------------------------------
    \21\ Codified in Section 11101(a) of title 49, United States Code
    \22\ https://www.baldwin.senate.gov/news/press-releases/baldwin-
introduces-legislation-to-improve-freight-rail-service-for-american-
businesses
---------------------------------------------------------------------------
    Similarly, then House T&I Railroad Subcommittee Chairman Donald 
Payne and House T&I Chairman Peter DeFazio introduced legislation last 
Congress to reauthorize the STB that would also strengthen and better 
define the common carrier obligation along with several other important 
provisions.\23\ We urge this Congress to pass similar legislation.
---------------------------------------------------------------------------
    \23\ https://www.congress.gov/bill/117th-congress/house-bill/8649/
text?s=4&r=1
---------------------------------------------------------------------------
Hire More Workers
    The poor working conditions on Class I railroads today are some of 
the biggest challenges in hiring and keeping workers. TTD's rail unions 
have reported on the phenomenon of rail employees with upwards of ten 
or fifteen years of experience resigning from well-paying jobs and 
giving up stable retirements. Workers face a lack of paid sick leave 
\24\, draconian attendance policies \25\, increased safety issues \26\, 
and an inability to get time off for medical appointments that risks 
workers' health.\27\
---------------------------------------------------------------------------
    \24\ For Rail Workers, Anger Persists Over Sick Leave--The New York 
Times (nytimes.com)
    \25\ Railroads' workplace attendance policies at the heart of labor 
dispute: NPR
    \26\ https://www.kansascity.com/news/business/article268941917.html
    \27\ In rail strike showdown, death of worker helped stoke anger--
The Washington Post
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    The ongoing exodus of highly-skilled and experienced rail workers 
who have decades of knowledge and the resulting consequences greatly 
outweighs the limited amount of new hiring the railroads have done.
    The Federal Railroad Administration (FRA) did an analysis in 
December 2022 of the Class I's training data for the last eight months 
of 2022, and found for the four largest Class I railroads (BNSF, UP, 
CSX, NS), they only had more new employees graduate training than 
existing employees leave the railroads in November and December of 
2022.\28\ In the other six months, the number of employees graduating 
from training programs did not keep up with the number of employees 
separated from the railroads. Additionally, a large percentage of those 
employees separating from the railroads in the last eight months of 
2022 did so on their accord. On BNSF, at least 50% of the employees 
that separated from the railroad in those eight months did so 
voluntarily. On UP and CSX, at least 25% of the workers that separated 
left voluntarily. On NS, it was at least 20%.
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    \28\ The Surface Transportation Board started requiring these 4 
Class I railroads to report this data in April 2022
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    We have proof that railroads can hire workers if they create a good 
working environment. Amtrak, which is trying to hire many of the same 
type of workers that the Class I's are claiming they are trying to 
hire, has hired over 2,300 employees since the beginning of the fiscal 
year with a net attrition of 1,400 employees. Those additions include 
significant numbers of track, signal, and mechanical employees.
    Class I railroads must address quality of life issues in order to 
hire and retain the sufficient number of employees necessary to 
sustain, and hopefully one day grow, the system.
Provide Paid Sick Leave
    Perhaps realizing the box they had put themselves in amid the 
nation's outcry over the treatment of rail workers and the anger and 
low morale among their workforce, the Class I railroads at the 
beginning of this year started to negotiate on paid sick leave. Many of 
TTD's rail unions have reached agreements with the Class I railroads 
providing four days of sick leave and the ability to convert up to 
three personal days (if workers have that many) to paid sick days.
    TTD and its rail unions will continue to fight to address the 
horrific conditions for rail workers, including fighting for paid sick 
leave for all rail workers. Rail workers deserve paid sick leave--that 
is the morally right and just thing to do. TTD and our unions are 
forever grateful to the 221 House members and 52 Senators last Congress 
who stood with the rail workers in their fight for paid sick leave. We 
are especially grateful to Ranking Member Payne for his legislation 
providing 7 days of paid sick leave to all Class I rail workers and to 
Senator Sanders and Congresswoman DeLauro for their upcoming 
introduction of the Healthy Families Act, which would give all workers, 
including rail workers, paid sick leave. We urge Congress to pass this 
legislation.
                               Conclusion
    Rail can be the greenest and most effective way to move cargo on 
land, but only if we have well-kept infrastructure and well-trained 
workers in place to meet the existing demands of our shipping 
communities and expand the market share of goods safely shipped by 
rail.
    We have a unique opportunity to get freight rail back on track by 
passing meaningful rail safety and service improvement legislation and 
harnessing the IIJA's historic funding in concert with greater 
investment from the railroads; we must achieve a combination of good 
government, good management, and good investment from the railroads to 
successfully grow the system.
    It is time for Congress and the railroads to act.

    Mr. Nehls. Thank you, Mr. Regan.
    And I thank you all for your testimony.
    We will now turn to questions from the panel, and I will 
recognize myself for 5 minutes.
    Like every mode of transportation, the pandemic took a toll 
on the efficiency of the freight system. Mistakes were made by 
Government and businesses, and I think that is beyond dispute. 
However, having traveled extensively to some of our largest 
railroads, the short lines, the shippers, the manufacturing 
facilities, I am happy to say that the men and women I engaged 
with were hard-working, patriotic, and laser-focused on 
improving safety and efficiency.
    We have assembled a diverse set of experts to testify here 
today. They are some of the brightest in their respective 
fields, and it is my hope that we can educate ourselves on the 
problems facing the industry and discuss solutions that are 
proven to increase safety.
    And I would be remiss if I didn't mention the tragic 
derailment that occurred in East Palestine to everybody in the 
room. Everybody in the room understands that Norfolk Southern 
must stay as long as needed to make that community whole, and 
then some.
    From my perspective, it seems clear that our major 
railroads are taking safety seriously. I welcome the proactive 
steps undertaken by Class I's to make additional investments in 
wayside hot box detectors, standardizing alert thresholds for 
stopping trains and inspecting bearings, adopting new industry 
standards for analysis protocols, and increasing awareness 
about AskRail. AskRail. I don't know how many of you heard of 
it. We are going to hear about it today.
    The NTSB investigation of the Norfolk Southern train 
derailment in East Palestine is ongoing, and I look forward to 
their final report to offer more guidance and facts.
    Got a question, Mr. Jefferies, Mr. Baker, either one, pipe 
in. There has been some criticism of freight railroads' service 
quality and ability to accommodate shippers. The Surface 
Transportation Board recently extended the reporting period for 
Class I railroads to provide service metrics through December 
31st of this year.
    So, why has the service suffered, what are the freight 
rails doing to fix the problem, and when do you feel it can be 
resolved?
    Mr. Jefferies?
    Mr. Jefferies. Well, thank you, Mr. Chairman. Service, 
absolutely, in certain areas of the country is not where it 
needs to be and not where it historically has been. Certain 
areas are showing demonstrable improvement, and I am confident 
that will continue to be the case.
    But your question is, how did we get here, how did these 
challenges emerge. The pandemic flipped the supply chain, the 
workforce not only of the Nation, but of the globe, on its 
head. And when we saw traffic drop upwards of 30 percent in the 
depths of the pandemic, railroads employed what was a time-
tested practice of about probably 100 years or more of when the 
traffic is not there, temporarily furloughing employees and 
bringing them back when the traffic comes back. And 
historically the return rate has been 90-plus percent.
    We had a pretty dramatic snapback on consumer goods, 
container goods. My colleague mentioned the shift in consumer 
spending away from services to products, and we started calling 
folks back, didn't have that return rate.
    Mr. Nehls. Mr. Baker, what do you feel, how do you feel?
    Mr. Baker. There is no question that it has been 4 or 5 
years of struggling service. I do think that we can say today, 
I am hearing from my short lines that they are seeing green 
shoots of improvements. I certainly wouldn't dispute what Mr. 
Jahn is saying that some customers remain frustrated, but short 
lines view the rail network largely from a shipper's 
perspective also, and I think we are seeing improvements.
    I have no doubt that our Class I friends would do the last 
few years differently if they could, but I think it is starting 
to get better.
    Mr. Nehls. Sure. Mr. Jefferies, can you explain, in laymen 
terms, the AskRail--I bring up this AskRail--what it is, and 
will AAR commit to expanding the program to allow the short 
lines and the commuter rail to participate if they aren't 
already? AskRail.
    Mr. Jefferies. Absolutely. So, to answer the second portion 
of your question first, we absolutely want to include the short 
lines, and I believe we are in process with bringing our 
largest short line on board.
    So, AskRail is a mobile app for first responders that 
allows, as the train goes by or in the unlikelihood of a 
derailment, a first responder can enter a car number from any 
car on the train. It will give the entire consist of the train, 
whether there is hazmat located on the train. If there is, how 
to respond and who to contact. And so, it is a very helpful 
tool for first responders to know what is in their community 
and how to respond and who to contact.
    Our biggest challenge is, how do we get it out to broader 
folks. We have been going individual by individual case, but we 
have shifted to an emergency operations center-based process to 
cover more ground, and certainly would love to work with anyone 
on this committee to spread its use.
    Mr. Nehls. I am certainly more interested in the AskRail, 
and I hope that this committee will take some time, and we 
should look into this app and see how this could help our first 
responders, because we have heard from both sides that they are 
concerned about, when you have a derailment, can first 
responders respond accordingly, things of that nature. So, I 
think that is great.
    And the IIJA roughly provided $500 million a year for the 
Railroad Crossing Elimination Program, and I am very supportive 
of the policy. The FRA Administrator is supportive of the 
program. I am interested in it.
    I mean, when these trains--I think Ranking Member Larsen 
was talking about trains covering intersections, blocking 
intersections. You mentioned a story [to Mr. Payne]. I think we 
should provide a lot more funding and support to try to think 
about how we can support this program, and it is going to 
require more resources than just $500 million. So, I want to 
learn more about that program and how we can expand to increase 
safety.
    So, I will now recognize the ranking member of the full 
committee, Mr. Larsen, for 5 minutes.
    Mr. Larsen of Washington. Thank you. And I want to thank 
the chair and the ranking member for accommodating my schedule. 
I appreciate that. I have got some other meetings I have got to 
get to, but I will jump to questions.
    Mr. Regan, trains have been getting longer and longer, some 
as long as 5 miles out West, which is, in my view, anywhere 
west of the DC line. But I mean farther out, I'm sure.
    Two weeks ago, the Federal Railroad Administration issued a 
safety advisory on how long trains block crossings and create 
braking challenges. How do employees handle longer trains? Are 
rail workers told to consider the impact of blocked crossings 
when building trains?
    Mr. Regan. Thank you for the question, Ranking Member. The 
long trains are increasingly a problem, from our members' 
perspective, that we have seen, as these trains have doubled or 
tripled in size over time. If there is a problem on board a 
train--and you have two people working there, one engineer, one 
conductor--to identify the problem on a 3-, 4-mile-long train, 
you have to have someone walk the entire length to identify 
what that problem is, radio it back up, then figure out a way 
to deal with the issue.
    And currently we do not have sidings that can accommodate 
most of these large trains. So, if there is a problem, it is 
going to create a backlog on the system. And if that happens to 
be in the middle of a community, then they are kind of out of 
luck here, and they are going to have to deal with some blocked 
crossings.
    So, it creates real headaches in a community, but certainly 
our ability as workers to deal with the problems in quicker, 
more effective time is much hampered by the fact that these 
trains are getting so long.
    Mr. Larsen of Washington. Thanks.
    Mr. Jahn, you talked about the impact of the rail 
congestion embargo on shippers, but I wanted to ask you if it 
is feasible to ship your goods another way if rail service is 
unreliable from--maybe just from ACC, and maybe just speak to 
the broader shipper coalition on that, too.
    Mr. Jahn. Sure, happy to do that. So, in regards to what 
our members--how they ship and how their infrastructure is set 
up, so, we are talking about bulk shipments of chemistry that--
so, for example, four tank cars is the same as one railcar. And 
so, when you are shipping things like chlorine that provides 
for clean drinking water that we need all across this country, 
those facilities are set up specifically for rail. And so, they 
are not easily able to switch to truck to ship those products 
as an alternative.
    That is just not structurally how both our facilities are 
set up, as well as the facilities that receive those inbound 
shipments. So, we are not able to pivot in the way that maybe 
some other products would be able to do.
    Mr. Larsen of Washington. Any other examples? You mentioned 
chlorine. Any other examples of bulk cargo that are not easily 
transferable?
    Mr. Jahn. So, it is--again, we are one of the very largest 
shippers of commodities on the rail system. So, almost 
everything that our members make at petrochemical facilities go 
into the rail system. So, it is everything from the products 
that go into electric vehicle batteries or solar panels or 
semiconductors. They are very small piece of chemistry that 
goes into a semiconductor. But our members predominantly move 
product through the rail system.
    Mr. Larsen of Washington. Yes, sure. Thanks.
    Mr. Regan, you and others have discussed how rail safety 
and rail service are related. Do you have any suggestions for 
legislation that we should pursue that help us get a twofer on 
that deal?
    Mr. Regan. Yes. I think the Railway Safety Act is certainly 
an important piece of legislation. They just moved out of the 
Senate Commerce Committee yesterday. But also, the Surface 
Transportation Board reauthorization language that I know was 
introduced last year and that has been discussed by this 
committee would both address the economic concerns as well as 
the safety concerns that we are seeing on the railroads.
    Mr. Larsen of Washington. OK. Mr. Jefferies, we have talked 
in the past about first responders, and you mentioned the 
program there. Does that program allow for notifying responders 
before the train gets to the community or is this just one 
where you are looking at the train as it is going by and then 
checking the app?
    Mr. Jefferies. So, the app is real time. On the 
notification in advance, that is something generally we work 
more through State fusion centers and State security apparatus 
to let them know, in general, these are the types of things 
moving through your community. But the app is real time itself.
    Mr. Larsen of Washington. The app is real time, but not 
in--thanks. That is good to know. I think that is good.
    I appreciate the time, and I will yield back, Mr. Chair.
    Mr. Nehls. Thank you, Mr. Larsen.
    I will now yield 5 minutes to my great colleague out of the 
great State of Texas, Mr. Babin.
    Dr. Babin. Thank you very much, Mr. Chairman.
    And I want to thank all the witnesses, all of you, for 
being here today and giving your testimony.
    I represent Texas' 36th Congressional District, which 
stretches basically from southeast Houston all the way over to 
the Louisiana border. The region is home to the largest 
concentration of refineries and petrochemical plants in the 
entire country, as well as contains the Port of Houston, which 
in terms of tonnage moved, is the busiest port in the country.
    Rail is far and away the most efficient, cost effective, 
and safest way to move these critical products over long 
distances. It is this combination, great manufacturing plus the 
safe and efficient movement of goods utilizing ports and rails, 
that made southeast Texas and the Greater Houston region a 
national economic engine. So, I want to thank all of you for 
your part of work that you and your members represent.
    This question is for Mr. Jahn. Thank you for your remarks 
and your presence today on this critical topic.
    Ninety-six percent of manufactured products rely on the 
business of chemistry, and with a large industry presence in my 
district, this topic really hits home. For many of these 
companies in Texas 36, rail is the only cost-efficient, safe 
way to move these products over long distances.
    I want to ask you if you could dive deeper and talk about a 
few supply chain disruptions that the industry has faced since 
the beginning of the pandemic, and the impact on not only 
Texas, but on the entire U.S. economy, and how might future 
supply chain disruptions impact consumers across the country, 
and how it would impact your industry as well.
    Mr. Jahn. Thank you. I appreciate that, Congressman.
    Dr. Babin. Yes, sir.
    Mr. Jahn. Our industry supports 25 percent of U.S. GDP. 
Again, the manufacturing supply chain starts with us. As you 
said, 96 percent of all finished products have a component of 
chemistry in them.
    So, when we are looking at things like rail service 
embargoes that we have had, 1 railroad had 5 in 2017, and they 
had over 1,000 last year.
    But it is not just the number of embargoes. They are using 
embargoes to manage congestion on their network. It is also 
looking at the impact of those embargoes. So, for example, one 
railroad had one embargo on all the traffic going into 
California. The impact of that was massive. California, by 
itself, is the fifth largest economy in the world, right? It 
also is home to our Nation's largest ports.
    So, that is an example of how railroads are using that, 
embargoes, which are intended to be for crisis events like a 
weather event. We would argue that that is an appropriate thing 
to do. But they have used this to manage their congestion on 
the network.
    And I will give you some other examples that are not in 
California. For example, we have got a company who is only 
getting about two-thirds of its shipments--or less than two-
thirds of its shipments. It is competing against companies in 
China bringing in product to a port that has multiple railroads 
that goes out from there.
    So, when I talk about how important this supply chain 
crisis that we have is, that is what I am talking about. It is 
hard for our members to compete globally against competition in 
China that does not, frankly, face the same transportation 
challenges that we have here domestically.
    Dr. Babin. Absolutely. Well, my next question is for Mr. 
Jefferies and Mr. Baker. Late last year, the threat of a labor 
strike had much of the country prepared for a complete 
standstill. Unfortunately--fortunately, I should say, that 
crisis was averted when Congress intervened to prevent what 
appeared to be a total shutdown of our rail network.
    Chemical companies in my district were particularly 
concerned about a potential strike given safety concerns unique 
to some of their products that are moved via rail.
    Can you explain the impact of a rail labor strike, that it 
would have had on our supply chain, and are there any 
suggestions for avoiding that situation in the future and a 
repeat of it?
    Thank you.
    Mr. Jefferies. Well, certainly it would have been a 
devastating impact to the economy and one that, I think, 
frankly, every--well, we may--as evidenced today, we may not 
see eye to eye on every issue. Certainly, it was one where most 
of our customer groups were fully aligned with the need to 
ensure that there was no work stoppage. And I certainly 
appreciate the hard work of not only the administration, the 
Congress, and the 12 labor unions, the majority of which we got 
voluntary agreements with, 9 out of 13 contracts. Majority of 
employees voted yes. We fell short on a few. And fortunately, 
Congress chose to follow the pattern and avoid that.
    Dr. Babin. Thank you.
    Mr. Baker?
    Mr. Baker. I appreciate the question. Short lines are 
typically not part of the national labor bargaining, but I 
think it is probably the understatement of the year to say that 
a national rail strike would be completely catastrophic to the 
economy. I think Congress did the country a great service by 
stepping in.
    And you did also ask a question about what can be done 
going forward to avoid it, and I think sort of at the risk of 
stating the obvious, there is a lot of work to do in the rail 
industry on repairing relationships with employees.
    It can be hard work. It is challenging, but they have been 
making that work for 195 years now, and I have a lot of 
confidence that it will be OK going forward.
    Dr. Babin. Thank you. And I yield back, Mr. Chairman.
    Mr. Nehls. Thank you, Mr. Babin.
    I now yield 5 minutes to the ranking member, Mr. Payne.
    Mr. Payne. Thank you, Mr. Chairman.
    Mr. Regan, we have heard for years that railroading is a 
well-paying job, but despite the good pay, the Class I's are 
finding it harder to attract and retain workers. Can you please 
share with us some additional details about the low morale 
among freight rail workers, and what are the leading causes of 
the morale issues?
    Mr. Regan. Thank you for the question. I think we can go--
the cause of all the morale issues boil down to the reduction 
of workforce levels. And thank you for your introduction of the 
sick leave legislation this morning. But that also, I agree, 
is--I believe is a symptom of sort of the impact on individual 
workers of those drastic reductions in workforce.
    We have people who are required to be on-call constantly 
that may not have access to their granted leave that was agreed 
to in the contract. We got rid of overboards, which are 
basically redundancy within the system that allowed the 
railroads to continue to operate when people do need to take 
time off, for whatever reason it may be.
    And then, of course, the attendance policies that were put 
in place to essentially discourage anyone from actually taking 
the leave that is available to them. These are all issues that 
contributed to the fight that we had last year, where, let's be 
honest, despite the largest wage increase in 45 years, that was 
agreed to in that Presidential Emergency Board and that was 
agreed to by the unions and the carriers, I think it goes to 
show you how bad the morale is when so many of the workers 
voted against that, despite the economic benefits of that 
agreement.
    Mr. Payne. Yes, I was amazed by it. Thank you for your 
answer.
    Now, as your testimony mentioned, paid sick leave is a top 
priority for your members. Can you please share more about 
railroad attendance policies that make it so important to 
guarantee and protect paid sick time?
    Mr. Regan. Yes. I mean, a lot of times what had been agreed 
to traditionally was a bank of personal leave days that could 
be used for any number of purposes. During the pandemic when 
people were expected to go to work, again, in a public health 
emergency, and they were not able to get access to those leave 
days, it really put a premium on the sick leave policy and why 
that is so important moving forward.
    And I think the idea that we should have Congress sort of 
establishing a bare minimum of what should be expected for this 
vital workforce, a workforce that is so critical to our 
economy, is an important step that should be taken.
    I do appreciate the efforts that have been taken so far by 
the Class I's to negotiate proactively with my unions, and we 
have a number of agreements that are in place, but I do think 
that this is something that the Federal Government is 
rightfully interested in when it comes to making sure these 
workers are safe and able to do their job effectively.
    Mr. Payne. Absolutely. As I stated in my testimony, I mean, 
we Members have sick days, our staffs have sick days, the 
gentleman has sick days. What is it about this workforce that 
they shouldn't be allowed to benefit what most Americans in the 
workforce do? Just kind of baffling to me.
    Mr. Jefferies, could you please direct your attention to 
the video screen.
    What we are seeing here is footage from a recent ProPublica 
investigation. Children have to crawl underneath parked freight 
trains just to get to school.
    [Video shown.]
    Mr. Payne. Mr. Jefferies, a simple yes or no question. Are 
images like these, or the stories of the grandfather and the 
baby unable to get emergency care, necessary for freight rail 
to function? Yes or no.
    Mr. Jefferies. I am sorry?
    Mr. Payne. Are images like these, or the stories of the 
grandfather and the baby that died, unable to get emergency 
care, necessary for freight rail to run, to function?
    Mr. Jefferies. Absolutely not. Those are unacceptable 
images.
    Mr. Payne. Well, as has been stated, this is quite a 
problem across the country, and it is our obligation to try to 
have you and your colleagues visualize what we are talking 
about. I know we have been talking about rail crossings being 
blocked, and it seems people kind of get it, but nothing 
changes. So, we figured we would give a visual.
    The word that best comes to me after looking at these 
images, after ``worry,'' is ``arrogance.'' Freight railroads 
think that there won't be any consequences for blocking towns 
for hours or for offering increasingly poor service to their 
customers.
    It is past time for some accountability.
    But it looks like I won't have time to ask my question, so, 
I will yield back. But I think we all need to keep this image 
in our minds as we have these discussions. And I yield back.
    Mr. Nehls. Thank you, Mr. Payne. And earlier in my 
testimony, I talked about the IIJA in my opening statement 
about the Railroad Crossing Elimination Program, $500 million 
going to this. I don't think that is enough. I think if you 
look at some of this--the bill that the Senate come by, they 
are talking about $4 million for 10 States to look at some of 
the worst crossings. We don't need to spend that $4 million. 
States have identified where the problems are. We need to go 
out there and fix the problems, and I am with you, and I would 
like to work with you on that, Mr. Payne, but thank you.
    I now yield 5 minutes to Mr. Rouzer.
    Mr. Rouzer. Thank you, Mr. Chairman.
    And thank you, gentlemen, for being before the subcommittee 
today.
    Supply chain issues are a big, big topic. Supply chain 
challenges were with us before the pandemic, but certainly 
magnified and, of course, created a lot more disruption post-
pandemic.
    North Carolina, we are a grain-deficit State. We have a lot 
of animal agriculture. And I have heard more than once from 
some of my integrator friends who have had a difficult time 
getting the grain that they need in a timely manner.
    So, Mr. Jefferies or Mr. Baker, I am just curious if that 
has risen to your level and attention and things that can be 
done to help alleviate that.
    In North Carolina, you have about 2 days' worth of feed, 
so, it really is a just-in-time situation. And, of course, 
these animals don't get fed, that creates other issues. And 
talk about a domino effect. And, of course, we see domino 
effects with these supply chain issues across the board. But it 
could get quite dire there.
    So, I am just curious if this is something that has been 
discussed and what remedies we have available to us.
    Mr. Jefferies. Well, thank you for that, Congressman. And 
certainly the poultry industry is one, and livestock more 
generally is one that is of critical importance to North 
Carolina, and we want to make sure we are serving that and 
supporting that appropriately.
    Certainly it is on my radar. It has been brought to my 
level and to the executives in your State of the railroads. And 
I know steps have been taken adding more high-capacity hopper 
cars. We are seeing some quicker turn times, are seeing a 
higher import of corn to the State. But certainly it is 
something we need to stay in close contact on.
    To your point, a couple days' supply isn't very much, and 
so, we need to make sure that pipeline is continuing to run 
strong, so, we want to work with you on that.
    Mr. Rouzer. How much of the issue is lack of labor, or are 
there other key components to that that are creating that 
problem?
    Mr. Jefferies. So, I can't speak to whether or not we are 
adequately sourcing that particular region, but hiring 
continues across the network. We are up over 10 percent year 
over year, but something that we want to keep working with you 
on to make sure we are addressing it.
    Mr. Rouzer. Sure. Mr. Baker, do you have any comment on 
that?
    Mr. Baker. Yes. It would be fair to say that the problems 
in North Carolina and elsewhere are at our level literally 
every day. It is the dominant topic of conversation over the 
last few years. I think the entire industry is, frankly, 
probably a little embarrassed about bad service over the last 
few years. I do think that there are real green shoots looking 
forward, and it is starting to get better.
    As far as to what can be done to help, without boring 
people and repeating my whole testimony, at least for short 
lines, for what Congress can do, the CRISI grant program is 
critically important. There are quite a few short lines in 
North Carolina that have used that program very successfully.
    And I would also say regulationwise, whether it is track 
inspection or broader rail safety regulation, it is important 
that regulation not be too burdensome and not harm our ability 
to serve customers.
    Mr. Rouzer. Yes. As some of you may know, Angie Craig, 
Colin Allred, myself, Dusty Johnson, we formed the Supply Chain 
Caucus. At an event a few weeks ago, the short line rail was 
part of the discussion there.
    For each one of you, is there a particular topic or a 
particular focus you would like that Supply Chain Caucus to 
have, if you had to pick one?
    I will just go down the line. Mr. Jefferies?
    Mr. Jefferies. Well, if I had to pick one, it would be 
permitting reform, which I know you are very focused on when it 
comes to both Clean Water Act issues, One Federal Decision 
issues, those things. I know you are a leader on legislation 
that was included in stuff moved by the House recently, so that 
is spot on.
    Mr. Rouzer. Mr. Baker?
    Mr. Baker. You identified employment as a huge challenge, 
and I think there are opportunities, whether it is the REEF 
Act, which we actually are in strong agreement with Mr. Regan 
on, or whether it is the ability to hire back retirees without 
them losing their railroad retirement benefits. There are quite 
a few policies that could help railroads hire people.
    Mr. Rouzer. Mr. Jahn?
    Mr. Jahn. We would support the call for permitting reform, 
but also it is for the STB moving forward on reciprocal 
switching, as well as establishing minimum service delivery 
standards in the contracts we have with rail.
    Mr. Scribner. I would say technology and innovation, 
particularly automation, which, over the coming decades, it is 
going to dramatically reshape every mode of transportation.
    Mr. Regan. I think you should rightfully be focused on 
freight rail in the supply chain as overall, and, from my view, 
it is boosting workforce levels and improving the quality of 
life for workers.
    Mr. Rouzer. Thank you much.
    Mr. Nehls. Thank you, Mr. Rouzer.
    I now recognize Mr. Moulton for 5 minutes.
    Mr. Moulton. Great. Thank you very much.
    And thank you, gentlemen, for being here.
    There is a lot of interest in rail safety right now because 
of some of the high-profile derailments. We don't need to 
belabor that point. But I think it is important to keep this in 
context. To begin with, there are a lot of achievements that 
the railroads have made, which should be noted by the public 
and by this committee as we make policy and contemplate 
additional regulations.
    In 2021, there were 22,831 hazardous material incidents on 
highways, compared to 391 freight railway hazmat incidents. 
Railroads have approximately 10 percent of the hazmat accidents 
that trucks have, despite approximately equal tonnage. And from 
2012 to 2022--so, basically over the last decade--there have 
been 71 fatalities on the highways with hazmat, zero on the 
railways.
    So, I think it is really important as we contemplate 
regulations and think about what the second- and third-order 
effects are going to be of those regulations, that we keep in 
mind that we want materials, including hazmat, to be carried by 
the railroads.
    Having said that, we don't want any accidents on the rails. 
And, frankly, if you can make the case that you are improving 
safety, then that is all the more reason for shippers to choose 
rail, especially for these kinds of sensitive shipments.
    Now, in early March, I wrote a letter on rail safety 
recommendations to this committee, the Senate Commerce 
Committee, and Secretary Buttigieg. And I was pleased to see 
that the Senate rail safety bill included provisions on defect 
attention and length of trains were two topics that were in my 
letter, although I think there is some work that could be done 
on the details of how those are implemented.
    Trains have gotten longer and longer in the last decade, 
increasing roughly 25 percent since 2008 on average. Some of 
the longest trains have gotten particularly long. And one of 
the things that we learned in doing research on this issue is 
that, in the past, many railroads followed an informal 
operating practice of limiting the length of a train carrying 
hazardous materials to about 100 cars or fewer.
    We haven't found any evidence that this was sort of put on 
the books, but we have talked to numerous railroad officials 
who said that this was common operating practice. And the 
reason is just basic physics. Longer trains experience greater 
forces on their cars, making them more likely to derail and 
making the derailments more disastrous if they occur.
    So, one of the things we want to investigate is whether or 
not we should regulate train length when it comes to hazardous 
materials. Obviously when a car derails, the cars behind it are 
connected. And I was wondering if, Mr. Jefferies, you could 
speak to the basic physics here, why derailments of longer 
trains are harder to contain and tend to be more disastrous 
than having shorter derailments with shorter trains.
    Mr. Jefferies. Well, I can make a couple comments. One, 
median train length right now is about 5,400, 5,700 feet. About 
90 percent of trains that start every day are under 10,000 
feet. I know there was a reference to 5-mile-long trains. I am 
not familiar with any 5-mile-long trains, but not that----
    Mr. Moulton [interrupting]. Nor am I. Well, what about for 
trains that include hazmat, though, do you know what the 
average length of trains that include hazmat is?
    Mr. Jefferies. So, I will say our longest trains are 
typically intermodal and auto trains, average merchandise train 
that is mixed merchandise. That is probably more towards the 
7,500 to 10,000 feet. I will say 30, 35 percent of our traffic 
used to be coal cars----
    Mr. Moulton [interposing]. Right.
    Mr. Jefferies [continuing]. Fifty feet long; intermodal 
cars, 150 feet long. So, 100-car coal train is a lot shorter 
than a 100-car intermodal train, but----
    Mr. Moulton [interposing]. Right.
    Mr. Jefferies [continuing]. I am just observing there. But 
I know the National Academies of Sciences is doing a train 
length study as a requirement of the IIJA. Very engaged with 
the railroads, with other stakeholders. And they will make 
recommendations on their views coming out of that, and 
certainly we are attuned to that. And I know the FRA is 
following the NAS lead there.
    Mr. Moulton. I mean, it is interesting when you say--you 
bring up 5,400 feet. I mean, what we have been advocating for 
in our proposal here is capping the length of trains carrying 
hazmat to 7,500 feet, so, 1.42 miles, which is significantly 
longer. It makes me think maybe that might be too long. But how 
difficult would it be for the railroads to comply with a 
regulation like this?
    Mr. Jefferies. Well, we want to make sure regulations are 
going to be data driven and result in a demonstrable safety 
benefit. And so, I would be happy to continue the conversation 
or work with you on this. I can't say if there is a right 
length and what that is, but I can say we are wide open to 
following the data. And that is something NAS is looking at.
    If there is some sort of safety conduit to a certain 
length, we have not seen it in our operations. When you look at 
our mainline derailments, while they are the best they have 
ever been, to your opening point, derailments still happen. So, 
that is too frequent. So, we need to be looking at ways to 
drive that number down.
    Wayside detection is a big way of doing that, something we 
are doing voluntarily. I know we get criticized for doing it 
because there aren't regulations, but, we are voluntarily doing 
things for safety. But it is something we should keep working 
on together, I would ask, and let the data drive us to the 
right outcome. And whether that is some sort of impact on train 
lengths, I would let the data play that out. It is not what we 
are seeing, but I don't want to put the cart before the horse 
and end up with unintended consequences----
    Mr. Moulton [interposing]. Right.
    Mr. Jefferies [continuing]. That gum up the network.
    Mr. Moulton. Mr. Chairman, thank you for your indulgence. 
We are also very interested in following the data here, so, 
thank you, Mr. Jefferies, very much.
    Mr. Nehls. Thank you, Mr. Moulton.
    I yield 5 minutes to Mr. Stauber.
    Mr. Stauber. Thank you, Mr. Chair.
    Mr. Jefferies and Mr. Baker, you both mentioned in your 
testimony that permitting delays can unduly inhibit the 
expansion and development of rail facilities that could help 
with supply chains.
    Mr. Jefferies, first, can you describe in more detail and 
perhaps give us an example of the permitting delays that are 
holding the rail industry back?
    Mr. Jefferies. Sure. So, as you have probably heard me say 
before, we are proud of the fact that we are almost entirely 
privately owned and maintained. We do most of our own 
investment. We do certainly take advantage of some multimodal 
programs. But what we run into, we do have challenges on the 
local and State levels, which we deal with accordingly.
    But even with the good work that has been done at the 
Federal level, whether it is One Federal Decision, for example, 
that only applies to DOT-sponsored projects. We do a lot of 
work with the Army Corps. We do a lot of work with the Coast 
Guard. And so, those are still stuck in the old process where 
it is just a--kind of a never-ending, no shot clock situation.
    Local decisions, when it comes to Clean Water Act 
decisions, again, what we are looking for is just certainty and 
timelines and sensibility when it comes to putting our dollars 
to work, because a key part of the supply chain is making the 
investments necessary to keep goods moving. And so, we know 
that is an interest. Of course it has to be balanced against 
sensible environmental reviews. We just want to be predictable 
and--so, we know what we are dealing with.
    Mr. Stauber. Mr. Baker, same question.
    Mr. Baker. Short lines don't do a lot of big, massive 
terminal projects. But, nonetheless, we find ourselves with 
permitting problems all of the time, even on----
    Mr. Stauber [interrupting]. Give us a couple examples.
    Mr. Baker [continuing]. Even on small CRISI projects, which 
might be a $10 million track upgrade over 8 miles just to get 
something that is called a FONSI, the Finding of No Significant 
Impact, that can be months and months, sometimes years of 
delay.
    And then, of course, because we move the whole economy, we 
are not just interested in our own permitting problems. If our 
energy and manufacturing customers have problems building----
    Mr. Stauber [interposing]. Right.
    Mr. Baker [continuing]. Giant new facilities, that is a 
huge problem obviously for short lines, but for the entire 
economy. So, we strongly support all sorts of permitting 
reform.
    One Federal Decision is a great example. Section 106, 
historical preservation, is a big challenge. Also, I think 
there is a lot of room there for Congress to make improvements.
    Mr. Stauber. So, both of you testified you need permitting 
reforms. So, do both of you support H.R. 1?
    Mr. Jefferies. I certainly support the permitting efforts 
in there.
    Mr. Stauber. Mr. Baker?
    Mr. Baker. I would--I agree with that. I am not--I can't 
speak to the entire----
    Mr. Stauber [interrupting]. Because that is--that 
permitting is--and you had mentioned, Mr. Jefferies, you had 
mentioned certainty and timeliness. That is exactly what it 
does, exactly what it does. And that is going to help with the 
supply chain. And you look at the opportunity to help with the 
supply chain, the permitting, the timeliness and certainty. 
That is what all industries have asked. And that is exactly 
what H.R. 1 does.
    And so, I look forward to having your industry and your 
folks work on our Senators on the other side of the House, so 
to speak, to get that across the finish line, to get it past 60 
votes in the Senate. And then it may have to come back to 
conference, but it is a good piece of legislation. In fact, 
probably the best piece of permitting legislation in a 
generation. It would forward our economy and certainly forward 
your endeavors as well.
    So, with that, Mr. Chair, I yield back.
    Mr. Nehls. Thank you, sir.
    I would now recognize Mrs. Foushee for 5 minutes.
    Mrs. Foushee. Thank you, Mr. Chairman, and thank you to the 
witnesses for being here today.
    The topic of today's hearing is exploring rail supply chain 
resilience, and I don't believe that we can truly discuss this 
issue without first addressing our rail workforce.
    Railroad jobs are challenging. Employees are outside in all 
kinds of weather; on call 24 hours a day, 365 days a year; on 
uneven surfaces and lifting heavy items. We know that railroads 
have been cutting staff, starting before the pandemic, and 
doubling down during the pandemic. Since 2015, railroads have 
cut nearly one-third of their workforce.
    Mr. Regan, you noted earlier that the lack of sufficient 
employees has led to strict attendance policies and little 
flexibility on sick leave. Employees have been made to feel 
that they would lose their jobs if they took leave, even at the 
height of the COVID-19 pandemic.
    So, if you could, please, Mr. Regan, could you share more 
of some of what the scheduling practices that freight workers 
have had to deal with?
    Mr. Regan. Sure. Thank you. And I do think that there are 
ways that we have seen some progress on scheduling recently. I 
think when you look at the attendance policy aspect, that was 
the one that really got the greatest ire out of the members 
that I represent, where, instead of taking the time off that 
you want or need or have earned, there are point values 
assigned to certain days.
    So, for example, if you are at a high-impact day, it could 
take away one-third of your bank, and that is for your entire 
year's worth of leave. And, if you go underneath that bank, you 
are going to get disciplined. And those high-impact days, by 
the way, were not days with necessarily more freight. There are 
things like Mother's Day, Father's Day, Christmas Eve, Super 
Bowl Sunday.
    So, in other words, ``high impact for your family'' days. 
And that is designed to keep people working even when there may 
be personal things happening in their lives. That wasn't the 
case when there was a workforce that was ample enough to be 
able to allow for people to take the time they needed when they 
wanted, and there were still going to be people there to do the 
work for them.
    Mrs. Foushee. Are these practices leading some workers to 
leave the industry, and can you discuss some of the other 
reasons that we are seeing mid-career employees leaving the 
rail industry?
    Mr. Regan. Yes. We are seeing an alarming number of people 
leave the industry, and this is a industry where--I know a lot 
of people that are third-, fourth-, fifth-generation railroad 
workers. They are proud to be railroad workers. We want to see 
this industry grow.
    But at a certain point, that cost benefit of a good wage 
and benefits was outweighed by the demands on their quality of 
life, the work-life balance, and people are saying it is not 
worth it anymore. I am going to go work in another industry.
    And that has become really alarming for us, because it used 
to be one that people, when you got that job, you were going to 
stick with it. You have good retirement. You've got good 
benefits. And at this point, we are seeing a trend away from 
what has traditionally been a very stable workforce.
    Mrs. Foushee. Thank you for that response.
    Mr. Jahn, turning to you, the Fourth Congressional District 
of North Carolina has over 800 chemistry jobs, so, it is 
imperative to my district that you all have the resources 
necessary to succeed.
    Can you discuss the economic cost of your companies for 
rail service delivery problems?
    Mr. Jahn. Absolutely. And I appreciate that question. So, 
as I had said in my written testimony, the economic cost is the 
opportunity cost of lost manufacturing jobs here in this 
country. So, for example, we have a member that in the first 
quarter of this year lost 30 shipments--business that we would 
like to give to the railroads. We would like to do more with 
the railroads. These are manufacturing jobs and manufacturing 
opportunities that, if we do not produce here, it does not 
happen. And we bring that in from overseas, most often from 
China, which is the dominant player on the global level.
    So, this has a significant impact not only for the economy 
and jobs in the United States. We employ in our industry alone 
over 500,000 people. On behalf of the rail shipper coalition, 
we employ 7 million people all across the country who rely on 
rail. And, again, we would like to be giving more business to 
the railroads so we can produce more in this country.
    Mrs. Foushee. Thank you. Mr. Chair, I yield back.
    Mr. Nehls. Thank you. Just to let the panel know that we 
will most likely have votes here in the next few minutes. So, 
before calling my next witness, we will have votes. At that 
point in time, we will have to recess temporarily, I am 
thinking maybe for about an hour--we have got five votes, very 
important votes--and then we will come back. So, don't go too 
far.
    But I will now introduce Mr. LaMalfa for 5 minutes.
    Mr. LaMalfa. Thank you, Mr. Chairman. I appreciate it. 
Sorry. Back and forth between committees here.
    But let me go to Mr. Baker. Your testimony earlier on said 
most short line railroads are family-run businesses. I know one 
of those families in northern California, and there are others 
that run that Sacramento Valley as well, so, we appreciate it.
    So, in the infrastructure world, trucking is also another 
mode that has a lot of mom-and-pop small businesses. Yesterday, 
we heard from the Owner-Operator Independent Drivers 
Association about how regulations can drive them right out of 
business.
    So, how about as far as railroads, especially short line, 
what can you say about how the broad one-size-fits-all regs out 
of DC or our mighty State of California might hit you 
differently for short line than for maybe the bigger outfits?
    Mr. Baker. Thank you for the question. I do remember the 
family you knew up there quite well, Jalene Forbis. I spent a 
lot of time on the Hill with her. She was one of my favorites.
    Mr. LaMalfa. Enjoyed a lot of time on that railroad too 
there, so----
    Mr. Baker [interposing]. Right.
    Mr. LaMalfa. Yep.
    Mr. Baker. We are obviously extraordinarily concerned about 
regulation that we simply can't afford and that doesn't fix an 
actual problem.
    It is not really on Congress' plate at the moment, but 
since you brought it up, the CARB--the CARB locomotive 
regulation is--in my 19-year career, it is the most stunning 
piece of regulation I have ever looked at. For one of the 
things it does, starting in 2030, it simply says, no locomotive 
older than 23 years old can be used in California, period.
    I have short lines that only have locomotives that are 
older than about 40 years old. I mean, it is--and they write in 
their own regulation that some short lines might not be able to 
comply and might go out of business. And they don't actually 
include the shrug emoji, but that is essentially the point. It 
is--I thought it was really wild.
    Mr. LaMalfa. I agree. A bunch of my tractors, combines--I 
just had to buy another truck here recently to have something 
that was 2011 or newer so I would have at least two trucks to 
cover the amount of miles, which isn't a lot for what my 
farming operation needs.
    I have a beautiful 2003 model Peterbilt, the square nose, 
nice red fenders, all that. I can't use that but 1,000 miles 
per year, and just to run maybe 7,000 miles at most. It is 
completely unreasonable, and I hear what you are dealing with.
    So, are there Federal regs that are holding you back on 
efficiency or things that are--maybe you are not being able to 
take advantage of technology because there is a Federal 
intervention that is stopping that?
    Mr. Baker. At the Federal level, the biggest regulation 
that we are--well, there is a whole set of them in the Senate 
rail safety bill that we are worried are too prescriptive and 
burdensome, but there is also an existing regulation in the 
works at the FRA mandating two-person crews on trains. And that 
sweeps up hundreds of short line railroads in that that today 
have one person in the cab and then largely a second person on 
the ground, generally in a following pickup truck, which short 
lines find to be a more efficient and safer way to do it and 
better service for our customers.
    Mr. LaMalfa. You might like to see a carveout for short 
lines in their route for that one-on-one deal instead of two in 
the cab?
    Mr. Baker. That would make sense to us.
    Mr. LaMalfa. Yes. Yes. OK. And you did touch on the 
California situation. I mean, I just--unbelievable to me that 
we think we are going to electrify everything and do it 
economically.
    And I remind everybody, our previous panel, I asked them 
how much of the atmosphere is CO2. And nobody was even close. 
It is 0.04 percent. So, we are going to be moved into caves to 
eat crickets and berries in the dark because CO2 has moved from 
0.03 to 0.04 percent since 1960, OK? And I am not popular 
making this assertion a lot, but I am going to keep making it.
    So, these regulations coming down the pike are not even 
realistic as they pull hydroelectric dams out of my district, 
and we barely got our nuclear powerplant for an additional 5--
only 5 more years in California, which is 9 percent of our 
California grid.
    We are going to run out of electricity. And the people that 
love to put in new windmills and solar panels have a different 
group of people that sues to stop you from building the array, 
OK? It is ridiculous.
    So, I don't see how they are going to reach it. I don't see 
how you get the efficiency. So, I am going to run out of time 
here.
    But one thing. We don't have to bag on the truckers, you 
know? They've got their piece, all right? They are not zombies. 
If they need to raise their weight limit on there because they 
have to now run electric trucks, which weigh 8,000 to 10,000. 
So, we have all got to work together, because they are after 
all of us, OK? They are after the trucks, the trains, the 
ships, the planes, with all this ridiculousness. So, let's all 
work together.
    Thank you. I will yield back.
    Mr. Baker. Yes, sir.
    Mr. Nehls. Yes, sir.
    I now recognize Mrs. Napolitano for 5 minutes.
    Mrs. Napolitano. Thank you, Mr. Chairman.
    Mr. Jefferies and Mr. Regan, for three decades I have heard 
from railroads, railroad workers, and railroad customers on the 
shortage of railroad workers having a negative impact on 
railroad efficiency, on-time scheduling, safety, and the 
fatigue of current workers being overworked.
    What is the current status of the railroad workforce? Have 
these issues been resolved? Are there enough workers and 
trainees in the pipeline? And how about women?
    Mr. Regan. Thank you for the question, Congresswoman. The 
current state is not really much improved than it was last year 
when there was the threat of a work stoppage. I think there are 
some improvements being made. I think that we will start to see 
some quality-of-life improvements in the railroads.
    But I do think that, at its core, we need to start hiring 
with a much greater frequency. Not only that, but retain 
workers. So, the net gain of workers on the railroads has 
really not increased much, because we are seeing so many people 
leave the industry. And many of them are mid-career. It is not 
retirements. And for us, again, that is an alarming trend.
    Mr. Jefferies. So, a couple different points there.
    One, hiring efforts continue. We have increased workforce 
by over 10 percent in just the last year.
    And, two, I think we all recognize that railroading is a 
very challenging job. That is why it is compensated, it is 
compensated at the level it is. But it is not all about--and my 
colleague and friend, Greg, has made this point. It is not all 
about the money. And that is why it is important that we have 
made progress on creating a more scheduled work environment for 
some of our employees. And those agreements are starting to 
happen.
    On the sick leave front, every single Class I railroad now 
has a sick leave agreement in place with the majority of the 
unions that it operates. Not all of them. I am counting 37 
different agreements so far. And so, there is progress being 
made on that front. And that is being done through local 
bargaining, just as we committed to doing so at the end of the 
round last year.
    And so, I just want to make clear that the committee 
understands that we are making progress on these issues. We are 
not there yet, got more work to do, but we are seeing results. 
And that is the important thing. And I think, quite frankly, 
that Greg and I could be working together a lot more to promote 
the benefits of this industry----
    Mrs. Napolitano [interrupting]. So, why don't you?
    Mr. Jefferies. Well, I would love to, and I think we do in 
certain areas. For example, the REEF Act, we both worked 
together. We are support. We come in fully bipartisan, and that 
is a good opportunity for expanded joint work.
    Mrs. Napolitano. Thank you, sir.
    Mr. Jefferies. Thank you.
    Mrs. Napolitano. Mr. Jahn, there is concern from a business 
in my district being charged demurrage fees due to 
circumstances outside their control, such as delayed pickups or 
deliveries from railroads; however, railcar owners do not have 
the ability to charge the same fees when railroads are slow to 
deliver or pick up.
    If you had the ability to add this fee to your service 
contract, would it improve your rail service?
    Mr. Jahn. We do believe that if we had those in minimum 
service delivery standards that would address that. So, you are 
right that in terms of demurrage fees, unfortunately they 
become a source of revenue for railroads rather than an 
incentive for our members to have their part ready to ship. And 
we are glad that the STB has stepped in to partially help 
address that. But we need more fundamental, broader reaching 
reforms to address this long term.
    For example, somebody mentioned the Staggers Act that 
passed in 1980. A lot has changed since then. Back in the day, 
the railroads owned all the railcars. Now, our members own--
three-quarters of the railcars are now owned by the shippers. 
And so, this is a situation that needs to go both ways. And so, 
if the railroad is late, then we should have the ability to act 
in kind. And I think we think that that would clean up a lot of 
the problems that we are having right now.
    So, we would look forward to working with Congress and the 
STB to address this going forward.
    Mrs. Napolitano. Thank you for the answer.
    The last is just a statement for Mr. Payne.
    Ranking Member Payne, I want to associate myself with your 
comments regarding long trains, which I have been working on 
for a long time, and the challenges our communities face with 
blocked crossings. My constituents experience this challenge 
every day on their walk to school, drive to work, and local 
businesses trying to get their goods to market. They wait too 
long at blocked crossings, which cause safety problems, 
congestion, and health risks.
    Thank you, Ranking Member Payne, for your continued work on 
this issue, and I yield back.
    Mr. Nehls. Mrs. Napolitano yields.
    I now will call upon Mr. Kean. You have 5 minutes.
    Mr. Kean of New Jersey. Thank you, Mr. Chairman. Thank you 
to all of our witnesses.
    Mr. Baker, I understand that the CRISI grant program is 
essential to helping short line railroads update their 
infrastructure, which I think ought to help with both sides--
both the supply chain and any safety concerns at the same time.
    Is that correct, and can you elaborate how CRISI is 
essential to short line railroads?
    Mr. Baker. Yes, sir. Thank you for the question. CRISI is a 
hugely successful grant program run out of the FRA. I think 
maybe unlike all Federal spending, it seems to have widespread 
bipartisan and bicameral support. Short lines use it 
extensively to simply help us afford infrastructure investments 
that you otherwise couldn't justify on a short line. It helps 
us maintain service to small towns in rural America and kind of 
do what we do best to help serve our shippers. We very much 
appreciate your support, this committee's support.
    And I think there is more Congress could do, too. I think 
it could, again, simply increase the funding, but could also 
ask or direct the FRA to focus particularly on freight rail 
safety and freight rail supply chain. FRA has a lot of options 
with CRISI, but we think a little more focus could be a huge 
improvement without spending any more pennies.
    Mr. Kean of New Jersey. OK. Thank you.
    Mr. Jefferies, the main rail lines are critical for the 
ability to move products to market. This is especially true for 
construction material industries whose products are needed to 
build infrastructure and to improve communities. Service 
disruptions and delays may hamper construction of critical 
projects.
    What is your industry doing to address these challenges and 
to work with industries to ensure that materials get to market 
on time so that we can build?
    Mr. Jefferies. Well, first, it starts with investment, 
making sure we have a network that is ready to move goods and 
keep that volume moving timely.
    Second, equally as important, adequately sourced workforce. 
Hiring efforts continue. I don't think there is any secret, and 
I won't shy behind the fact that we got caught short coming out 
of the depths of the pandemic, calling in furloughed employees 
back. We have been digging out from that. A lot of progress has 
been made, more progress to go.
    But really third is making sure that the regulatory 
structure that surrounds us encourages innovation, encourages 
use of technology, discourages unintended consequences that 
would unknowingly or knowingly provide more complexity, more 
touches, gum up the network, and increase friction in goods 
movement where it otherwise wouldn't occur.
    Mr. Kean of New Jersey. Thank you.
    Mr. Regan, in your written testimony, you mentioned the 
issue of staffing. You talk about the need for conductors to 
have the ability to fix mechanical problems when a train breaks 
down. How can TTD partner with the freight carriers to attract 
workers?
    Mr. Regan. Thank you. And I think this is a good followup 
to the point that the Congresswoman made earlier.
    I think there are a lot of ways where we can work with the 
freight railroads to actually deliver on better service and, I 
think, the responsible deployment of technology. I think that 
there is this perception that we are opposed to technology. In 
fact, that is not true. Our workers want those tools to help 
them do their jobs. We want to actually deploy more automated 
track inspection technology, but not at the expense of their 
own jobs.
    We think that is an important tool that helps them do the 
job more effectively and more safely. They both have different 
things they offer to track inspections. If there is a way that 
we can do it together, then I think there is a really important 
pathway forward that will improve service for everybody.
    Mr. Kean of New Jersey. In your testimony, you mention that 
the Nation's freight rail system is fundamentally broken. What 
are some specific recommendations that we can do together to 
restore a healthy freight rail system that will promote safety, 
innovation, and continue competitiveness with other 
transportation modes? What do you recommend?
    Mr. Regan. As I mentioned earlier, I think we do need to 
pass a rail safety legislation. The Senate made the first step 
this week over in Senate Commerce. I think we do need to see 
strong standardized safety across all of the freight rail 
systems; that we are not relying on happenstance, different 
models for different railroads and different technology uses in 
different areas. I think we do have to have a Federal standard 
for that regard.
    And from economic regulation, we are dealing with--and I 
think my friends in the shipping community would tell you that 
there is real ambiguity about what does the common carrier 
obligation mean? It is in law, but what does it mean? And, 
also, how do we make sure that the regulator, the Surface 
Transportation Board, has the tools it needs to actually 
enforce that definition?
    So, I think those are two important policy areas where 
Congress can be very helpful here.
    Mr. Kean of New Jersey. OK. Great. Thank you.
    Mr. Chairman, I yield back.
    Mr. Nehls. Thank you.
    I now recognize Mr. Cohen for 5 minutes.
    Mr. Cohen. Thank you, Mr. Chair.
    We are looking at rail supply issues, supply chain issues, 
and that is important to get the goods to market. If they don't 
go by Federal Express, there is no better way to do it. Still 
can go through Memphis as well.
    The train derailment in East Palestine, Ohio, in February, 
followed closely by another derailment and toxic spill in 
Raymond, Minnesota, stark reminders of the importance of proper 
regulation and enforcement for railroad safety.
    Just this morning, there was another train derailment in 
Mason, Tennessee, right near Memphis. No reported injuries or 
hazardous material involved, but the train car in the water and 
damaged bridge to contend with.
    I support the important work that must be done to repair 
and support supply chains, but this work cannot come at the 
expense of health and safety of rail workers and vulnerable 
communities across the country.
    I voted for giving rail workers paid sick leave in 
December, and I am proud to again support 7 days of paid leave 
in the Freight Rail Workforce Health and Safety Act introduced 
today by Ranking Members Larsen and Payne.
    If the U.S. guaranteed paid sick leave to all workers like 
every other industrialized nation, American rail workers 
wouldn't even have to be in this situation. But they are, and 
we were in the problem we were in last year, but we kind of got 
it done with the President, at least got us away from having a 
strike.
    We must correct this injustice. Rail workers doing 
essential work to keep our economy running should not be forced 
to choose between their health and a paycheck. The consequences 
of an understaffed and overworked rail industry will not just 
be carried by the workers, and this committee should be 
proactive in reducing the chances of accidents through work-
centered solutions.
    Mr. Jefferies, your name was rather anodyne to me before 
yesterday. And yesterday I ran into Jerry Costello, and he had 
some very nice things to say about you. I am not quite sure 
where that comes from, but all of a sudden, your name came up. 
Then I come here, and I look down, and I went, wow, where did I 
see that name? And I thought, it was Costello.
    In your written testimony, you mentioned the challenges 
that rail companies are currently facing in finding and keeping 
employees. You wrote that Class I railroads have announced 
agreements with many of their unions on ways to improve quality 
of life, such as more predictable work schedules and additional 
paid sick leave.
    Do you think that 7 days of paid sick leave for rail 
workers is a good industry standard?
    Mr. Jefferies. Well, when the bargaining agreement was 
reached last fall and the sick leave discussion was left 
unresolved, at that time, I said that sick leave matters were 
best left between railroads and their unions. And I was 
confident that the matter would be taken up locally between 
each railroad and their unions.
    I am very pleased to announce that every Class I has 
reached a sick leave agreement with the majority of its unions, 
and those are not all a monolith. Different agreements have 
different shapes and sizes. But I am pleased that we have 
followed through on that commitment.
    Related to that, there were provisions in the agreement 
that would require the operating crafts, the folks out on the 
rail line, to work with the railroads to develop a model that 
creates a more scheduled work environment. It is not 
unreasonable for an engineer to want to have a better 
understanding of when they are going to work, when they are 
going to be home.
    And I am very pleased that, while those are more complex 
negotiations, one of our railroads just announced an agreement 
with SMART-TD just about a week ago that they had reached just 
such an agreement, and that should be a model moving forward. 
There is a lot of progress being made there. I am sure folks 
would like to see it moving more quickly, but I am personally 
very pleased and gratified that we are seeing this progress 
done in the bargaining process.
    Mr. Cohen. So, most of the angst that we had last fall has 
been relieved, I presume, now. Everybody has kind of agreed to 
7 days?
    Mr. Jefferies. I am sorry?
    Mr. Cohen. Everyone has agreed to 7 days, all the railroads 
and their unions?
    Mr. Jefferies. I don't have--in some way, shape, or form, 
everybody has gotten an agreement. So, every union has at least 
an agreement with one Class I, except one union, which there 
hasn't been any progress yet, but hopefully we will get there.
    Mr. Cohen. Thank you, sir.
    Mr. Jefferies. Absolutely.
    Mr. Cohen. Mr. Reagan--is it Reagan or Regan?
    Mr. Regan. It is Regan.
    Mr. Cohen. Regan. I am sorry.
    We have heard from freight railroads they are committed to 
growing their workforce. Norfolk Southern's CEO said in a 
recent interview that his company is on a hiring spree. What 
are some of the ways railroads can improve their recruitment, 
training, and retention of workers?
    Mr. Regan. Well, I thank you for the question. I think the 
retainment is another key factor here, because if you look at 
the actual active employment levels, they haven't increased the 
way that we would like to see. And I think Ian and I agree that 
we want to see the workforce growing. We want to see the 
industry growing. And so, I think these local agreements that 
are being made are important steps to ensuring that, when 
people get on the job, when they are hired on, that they are 
going to want to stick with it and make this their career. So, 
I do applaud them for proactively reaching out to unions and 
trying to find agreements on these.
    Mr. Cohen. And this last union that hadn't agreed yet, is--
--
    Mr. Regan [interrupting]. I know that they are talking. I 
would like to see an agreement there. I would like to see some 
of their specific needs met by the railroads. Again, I 
represent 13 different unions, and that is all different crafts 
and classes on the railroads, and they do different jobs and 
have different responsibilities. So, I recognize that a lot of 
these things, when it comes to attendance or sick leave or 
other policies, are indeed best left to local bargaining so we 
can address the needs of that workforce.
    I think where there was a lot of frustration in the last 
national round was that those specific work-life balance 
complaints weren't being addressed at that level, and it has 
kind of forced all of those questions to the national 
bargaining, so that when we should be talking about wages and 
benefits and economics on national bargaining, instead we had a 
lot of other stuff that was being thrown in there and actually 
made their negotiations quite difficult.
    Mr. Cohen. Thank you, sir.
    And I yield back the balance of my time.
    Mr. Nehls. Thank you, sir.
    I am going to Mr. Burlison, you have 5 minutes.
    Mr. Burlison. Thank you, Mr. Chairman.
    Mr. Scribner, most industries are benefiting because of 
automation and finding ways to cut costs, improve efficiency, 
and reduce time through automation.
    How could this possibly benefit the freight system, the 
rail system?
    Mr. Scribner. Well, thank you for the question. I think 
with railroads of the United States--I mean, it is different 
abroad because we have vertically integrated railroads that own 
the infrastructure and operate over those lines. It is not 
separate, and that is sort of the truck comparison that I made 
in my opening statement. They are not also covering 
infrastructure there, whereas in the U.S., the freight 
railroads are. That is infrastructure and operations over the 
infrastructure.
    So, I think you could see benefits on both the 
infrastructure side, but also--so, with automated track 
inspection, but also, further in the future, automation of 
train operations as well.
    So, automation technology can benefit inspection. ATI is 
one example. But the use of emerging aviation technologies--
drones in bridge inspections and things like that, keeping 
people out of harm's way, reducing costs, all the benefits of 
automation that we see in other domains, in other industries.
    Mr. Burlison. So, do you see that if--with the advent of 
automation, the advent of more things that are available, some 
of the proposals that are being suggested are requiring more 
people to be on the train. Is that counter to where technology 
is advancing?
    Mr. Scribner. Yes. Mandating a permanent labor floor is not 
a good way to encourage investment in automation or deployment 
of automation. It destroys the business case, or at least 
certainly substantially weakens it.
    So, policies that would discourage it, they will discourage 
automation, and that has broader competitive implication and 
the implications to the long-term health of the industry and 
perhaps the existence of the industry.
    Mr. Burlison. Yes. Whenever I ran for office, what I heard 
from the community was supply chain, supply chain, what are you 
going to do to fix the supply chain?
    Some of these proposals I am hearing are--you can correct 
me if I am wrong, but I think that anything that we do that 
would actually make it more difficult to operate and move 
product, this is not going to benefit the supply chain.
    Mr. Scribner. Yes. I absolutely agree. I think, first, if 
we are talking about regulation, identify a market failure, and 
then show that the remedy for that--the benefits outweigh the 
costs.
    We have seen many examples where that is not happening, and 
that is where I think we can go back in history and look at the 
pre-Staggers environment, and that was a story of decades and 
decades of well-meaning but counterproductive policy 
accumulating until we almost had the collapse of the industry 
in the 1970s. I hope we don't repeat that again.
    Mr. Burlison. We don't go back to being overly regulatory 
and end up harming the industry.
    Thank you, Mr. Scribner.
    Mr. Jefferies, to that end, we are hearing a lot of 
proposals about--where we are going to try to tell your 
industry how to be safer, what you ought to be doing.
    I have got to think, don't you already have an--your 
clients, the people you represent, don't they have an inherent 
desire to not have accidents?
    Mr. Jefferies. Absolutely. There is no benefit to anybody 
to have a derailment.
    Mr. Burlison. Right.
    Mr. Jefferies. And so, any notion that railroads aren't 
laser-focused on operating safely is completely off base.
    Mr. Burlison. Yes.
    Mr. Jefferies. And I know there is some chatter about a 
lack of regulatory overstructure of this industry. All I would 
say to that is ask your staff to get the Code of Federal 
Regulations for the rail industry, and it is about this tall. 
So, there is ample opportunity there.
    Mr. Burlison. Now, you guys, if you have a derailment, you 
face litigation, right, cleanup? Just all of the costs are a 
punishment in and of itself or an incentive to not have that 
happen.
    Mr. Jefferies. Well, absolutely. And to be clear, when an 
incident does occur, a railroad is going to take full 
accountability, full responsibility for the cost of cleanup, et 
cetera, but the incentive is there to operate safely and to 
operate seamlessly and to be good partners.
    All the example you need, there is discussion about a need 
for regulations around our network of wayside detectors. Well, 
the only reason those are there is because of voluntary 
investment that has occurred over decades. We could have sat 
and not done anything. We are being criticized because there 
aren't regulations over wayside detectors now.
    But, again, those were steps and those were significant 
investments that were made to make a safer railroad, without 
waiting for a Federal bureaucrat to tell us it needed to be 
done. And so, absolutely, there is a laser focus and a top-line 
priority to run a safe railroad.
    Mr. Burlison. Thank you. Thank you, Mr. Chairman.
    Mr. Nehls. Thank you.
    I have been notified there will be a series of votes 
occurring on the House floor, and the committee will stand in 
recess subject to the call of the chair.
    [Recess.]
    Mr. Nehls. The Committee on Transportation and 
Infrastructure will reconvene the previously recessed hearing.
    I now yield 5 minutes to Ms. Titus for questioning.
    Ms. Titus. Well, thank you very much, Mr. Chairman, and 
thank you for letting me sit in on this hearing. I was on the 
Railroads, Pipelines, and Hazardous Materials Subcommittee, so, 
I have a real interest in this.
    Before I begin, I would like to ask unanimous consent to 
enter this into the record. It is a story from Las Vegas CBS on 
the hazmat trains.
    Mr. Nehls. No objection. So ordered.
    [The information follows:]

                                 
Article entitled, ``What's on the trains? Nevada's Cortez Masto, Titus 
call for common-sense safety measures,'' by David Charns, 8NewsNow.com, 
        May 5, 2023, Submitted for the Record by Hon. Dina Titus
  What's on the trains? Nevada's Cortez Masto, Titus call for common-
                         sense safety measures
by David Charns

8NewsNow.com, posted May 5, 2023, 5:16 p.m. PDT; updated May 5, 2023, 
6:09 p.m. PDT

    This article is copyrighted and may not be published, broadcast, 
rewritten, or redistributed. It is available online at https://
www.8newsnow.com/investigators/whats-on-the-trains-nevadas-cortez-
masto-titus-call-for-common-sense-safety-measures/

    Ms. Titus. Thank you.
    Mr. Jefferies, when we were together last time--I think it 
was during a hearing last year--I expressed some concerns for 
the potential for environmental catastrophe over long trains. 
And in response, you said, ``I think, when you look at train 
length versus incident, there has not been any correlation 
there. . . . [O]ver 90 percent of trains operating on any given 
day are under 7,500 feet long.''
    Well, considering the length of the East Palestine train 
was 151 cars, or 9,300 feet long, which is over that 7,500 
threshold, have your opinions changed or attitudes changed or 
any evidence changed of that effect?
    Mr. Jefferies. Well, thank you for that question, 
Congresswoman.
    When you look at mainline derailments, we actually are at 
an all-time low for 2022. And I know that the NTSB has 
indicated that train length was not a factor in that incident. 
That doesn't mean that there aren't other factors at play, and 
that is why the investigation is occurring.
    And while we are proud of our safety record, we still have 
accidents, and accidents can have major impacts on communities. 
And we have got to further improve, because even one accident 
can have a devastating impact. And so, we have got to learn, 
apply lessons learned, and continue to improve.
    Ms. Titus. OK. Well, I appreciate that, because, like you 
say, even one accident is too many. And if 10 percent of the 
trains are over that length, it could lead to potentially more 
accidents. So, thank you for that.
    But speaking of accidents and environmental concerns and 
lack of transparency, I wanted to ask you about how you notify 
State and local governments if a train is carrying some 
considered hazardous material.
    Mr. Jefferies. So, there are really two different methods 
that we employ. One is a notification coordination with State 
fusion centers, so, the State security organizations that 
really gives a forecast of ``these are the types of products 
that are moving through your State, here is who to contact.''
    We also, at the responder level, have developed a mobile 
application that allows a first responder to put in a car 
number for a car on any train that will provide the entire 
consist of the train; if hazmat is on the train; if there is 
hazmat, how to respond to it and who to contact. And so, we 
have taken a multipronged approach there, and we are always 
looking to maximize availability.
    We want to make sure first responders are prepared and have 
the information they need and the equipment they need, because 
as rare as an incident is, they do occur, and we want to make 
sure folks are prepared to mitigate the impacts.
    Ms. Titus. Well, thank you.
    The fusion center in Las Vegas is in my district. Those 
train lines go right down the strip, right behind the strip, 
right through the heart of town.
    But I hear from Las Vegas that maybe you are notifying the 
State, and they have a person at the fusion center, but they 
don't seem to be getting that information.
    How can we improve that?
    Mr. Jefferies. Well, that is something that I would love to 
sit down and talk more with your office about, because we want 
to make sure the right people are getting it. And while there 
are certain limitations, those involved in emergency response 
and security, those are the right folks, and they need to have 
that information, because they are going to be in the middle of 
any sort of response. So, we want to make sure the right people 
have that. And if they are not getting it, let's work and make 
sure that is going to occur.
    Ms. Titus. Thank you.
    One more question along those lines. Do you give that 
information to them if it is just 1 car, or does it have to 
have the 20 cars to qualify for the hazardous train status?
    Mr. Jefferies. Well, on the real-time information, that's 
the consist and contents of any cars moving through. On the 
prenotification, it is more of a ``these are the types of 
products that move through and here are the general volumes of 
such that are moving through.''
    And I would, again, be happy to sit down and make sure that 
the right folks in your State are getting that info, because 
they need it. It is important if anything ever happens. We 
don't want it to, and we certainly work to make sure it 
doesn't, but if something did happen, we want to make sure that 
the right folks are ready and prepared.
    Ms. Titus. I appreciate that, because, like I said, it does 
go right through town.
    And I know this isn't directly related, and when you talk 
about transporting nuclear waste, a whole bunch of other 
agencies are engaged in that. But I have concerns about this, 
because we have been fighting Yucca Mountain for decades, and 
it is never over till it is over. If that should be transported 
by rail as well as by truck, that is going right through Las 
Vegas, right through the heart of Congressional District One. 
And we just want to be sure everything is being done to keep 
that transport as safe as possible with whatever kind of 
hazardous material.
    Mr. Jefferies. One hundred percent agree with you on that. 
And rail is by far the safest way to move that, and so, we want 
to maximize all safety precautions regarding things along those 
lines. One hundred percent agree.
    Ms. Titus. Well, let's work together on that to be sure our 
folks are notified. Thank you so much.
    And thank you, Mr. Chairman.
    Mr. Nehls. Yes. Ms. Titus yields.
    I now recognize Mr. Molinaro for 5 minutes.
    Mr. Molinaro. Thank you, Mr. Chairman.
    And thank you all for your testimony today.
    I know that some of this has been covered, and I want to 
just return to a couple items.
    I come from a part of New York where rail has been 
significantly important to the conversation Mr. Jefferies was 
having. I would say that our emergency responders coordinate 
response pretty well, and the communication is good. Certainly 
always opportunity to build on that.
    But, in particular, in my corner of New York, short line 
railroads are really vital and have a very significant 
presence.
    Mr. Baker, in your testimony, you speak a little bit about 
the cause of short line derailments having more to do with bad, 
worn out, or insufficient infrastructure tracks in particular. 
I know that we have discussed the CRISI grant program. I want 
to just return there.
    I certainly support making investments in our 
infrastructure and understanding the importance of 
strengthening our supply chain. And that is one of the reasons 
I join others in prioritizing an appropriations request for the 
full funding of the CRISI grant program to improve rail safety 
and infrastructure.
    Mr. Baker, can you just speak a bit more with some detail 
about how the short line rail industry utilizes these 
particular grants?
    Mr. Baker. Yes, sir. And thank you for the question. One of 
the interesting things with short lines and Class I's, short 
lines have plenty of derailments, far more than we would like 
and, actually, at a slightly higher rate than the Class I's, 
but they tend to be very different. They have different causes. 
Typically, we run our trains much slower, so, there is also 
sort of--they tend to make the news less.
    But as you noted, the cause tends to be track, right? And 
it is basically because it is extraordinarily expensive to 
maintain and upgrade rail track, and short lines don't have 
enough money all the time.
    And so, the CRISI grant program has been extraordinarily 
useful in doing that. And a lot of what we do with CRISI is 
very basic blocking and tackling, kind of rail 101, right? 
Upgrade the ties, upgrade the track, invest in the track, 
inspect it, invest in it. CRISI helps us do that with bridges, 
too. And we have used that to great effect in New York. And we 
are really excited for the first round of CRISI grants that are 
going to be funded by the new infrastructure bill coming out in 
a few months, and very much appreciate your support on CRISI 
going forward.
    Mr. Molinaro. Well, I appreciate that. And certainly the 
folks, in particular Binghamton in Broome County, New York, are 
particularly interested in that ongoing investment. We look 
forward to partnering.
    Yesterday, rail workers' unemployment and sickness benefits 
were cut. I am a cosponsor of the REEF Act, which will protect 
rail employees and mandated cuts to benefits. Of course, we all 
understand that benefit cuts deter employees to continue work 
and seek out work in the first place. So, we want to confront 
obviously the workforce issues.
    The REEF Act will improve workforce and supply chain 
constraints. The best part of these benefits is that these 
benefits are funded solely by the railroads, so, it doesn't 
cost taxpayers, which we like, of course.
    Mr. Regan, I am glad to see you again, and I would love you 
just to speak a little bit about the value of the REEF Act, and 
be as specific as you like.
    Mr. Regan. Thank you, Congressman. And thank you for your 
support of this legislation.
    In my view, this should be a commonsense, bipartisan win to 
make sure that workers who have paid into this program--that it 
does not receive any Federal subsidies. It does not come out of 
the general fund. It has been unfairly subjected to sequester. 
And we temporarily got relief from that during the national 
health emergency, but now these people are having their 
benefits reduced by nearly 6 percent.
    This has the support not only of the unions, but of also 
the railroads, both short lines and Class I's. This is a win to 
give people their earned benefits, and we hope that this 
Congress will pass it as soon as possible.
    Mr. Molinaro. Well, universal support around here generally 
leads to continued delay, so, we are hopeful that--Mr. 
Jefferies, if you would like, go ahead.
    Mr. Jefferies. Sure. I just want to reiterate everything my 
colleague said and be on the record saying railroads, both--I 
will speak for Chuck--well, short lines, Class I's support the 
effort as well. It is something that we all think makes sense, 
and look forward to getting it done.
    Mr. Molinaro. Well, we certainly do as well. And, if 
anything, during the pandemic, what we said when we compelled 
the President to roll back those emergency orders was, frankly, 
what we should have been doing is identifying what worked 
during the pandemic and what didn't. Never return to that which 
didn't work. But those things that did, we ought to consider 
enacting as either law or policy.
    So, thank you very much. I look forward to working with all 
of you.
    Mr. Chairman, I yield back.
    Mr. Nehls. The gentleman yields.
    Five minutes for Mr. Van Orden from the great State of 
Wisconsin.
    Mr. Van Orden. Thank you, Mr. Chairman, I appreciate it 
greatly.
    Hey, just some general comments about rail. It is one of 
the key components of the intermodal movement of goods, and I 
understand that perfectly. I live in a town called Prairie du 
Chien. It is along the Mississippi River. If you do not like 
trains, you don't live there. We have got probably 60 trains 
going through every day.
    You are well aware that we recently had a derailment from 
the BNSF railroad a little farther north, about 45 minutes up 
from that, from where I live. We immediately coordinated with 
the BNSF railroad, FEMA, NTSB, the FRA, our local county 
officials, Crawford County officials, Congresswoman Ashley 
Hinson from across the river, but more importantly with 
Chairman Nehls--and I really appreciate your support. He also 
made several members of his staff available to us.
    Here is part of the issue. Leading up to this derailment, 
we had record flooding on the Mississippi River, and I called 
the BNSF railroad and told them that I was distinctly 
uncomfortable with the conditions of the track.
    BNSF railroad told me, in a rather condescending manner, 
that, don't worry, Congressman, we have been working on these 
railroads for over 100 years, everything is fine.
    Six days later, there was a railroad car floating down the 
Mississippi River containing paint, towards a dam. If that dam 
had been collapsed, or if it had been damaged and it collapsed, 
that could lead to a catastrophic cascading failure of the 
locks and dams along the Mississippi River. So, needless to 
say, I was uncomfortable with their approach to this.
    One of the immediate things that I want to tell you about, 
Mr. Jefferies, is that I understand that you have AskRail, and 
I think that that is a fantastic, long-term, digital solution. 
I would like you to think about using a short-term analog 
solution. Because one of the problems was, when our guys on the 
ground, these train cars were ripped apart. They don't have 
AskRail, or they had AskRail, but they didn't quite know how to 
use it yet because they weren't fully trained, and they 
couldn't tell what was in the carts because the placards I 
don't think are spaced enough on the side.
    So, if you only have four placards per car, whatever the 
minimum requirement is, if you just doubled those placards, it 
would have granted a lot of relief to our emergency workers on 
the ground. So, if you could maybe take a note of that, that 
would be great.
    Mr. Jefferies. Absolutely.
    Mr. Van Orden. So, one of my concerns is this, is that the 
general public is losing confidence in the railroad. And I 
think that that is a terrible thing to do, because if the 
railroads stop, the country stops, and that is just clear. If 
our trucks stop, the country stops also.
    And I think part of the problem is that we are not able to 
turn around these investigations fast enough, and there are 
several different Government agencies that should be able to 
message this better.
    I understand, I have read all of your detailed testimony 
from everybody on the panel, I appreciate it greatly, and I 
know that the rail safety is actually increasing. But the 
public confidence in the rail is decreasing at a reciprocal 
rate.
    So, what I think one of the things is--and I spoke to NTSB 
again yesterday, and I am going to introduce some legislation 
to increase the amount of rail inspectors that we have--and, 
Mr. Chairman, I would like your support on this.
    Mr. Nehls. Certainly.
    Mr. Van Orden. OK. So, we will be introducing some 
legislation to increase our rail inspectors to make sure that 
we can turn around these investigations faster and that we can 
do some better messaging, both from Congress and then from the 
private industries and also the Government agencies. And I just 
want to know, is that something that you would support?
    Mr. Jefferies. I think the sooner we can get the results of 
investigations, the better, and if this helps, which it sounds 
like it would, turn investigations around more quickly, 
absolutely.
    Mr. Van Orden. And then do you have confidence in these 
private companies to conduct the types of inspections, even 
when they have some external stimulus from maybe, I don't know, 
like a Member of Congress who lives right next to the railroad 
tracks and whose grandchildren are three blocks away from 
that--do you have confidence that maybe in the future these 
folks will start listening to outside sources?
    Mr. Jefferies. Well, I think it is in railroads' best 
interest to operate as safely as possible and that we are 
taking steps every day to do that. And if an incident occurs, 
we have got to take lessons learned from that incident and 
apply them so it doesn't happen again.
    Mr. Van Orden. OK. Well, your industry across the board, 
and I know Mr. Regan and I have talked to each other before--
but you are probably not related to Ronald Reagan, let's just 
say that--but you guys have my support. And so, if there is 
anything we can do from my office, please reach out.
    And with that, I yield back, sir.
    Mr. Nehls. I thank you. The gentleman yields back.
    Are there any further questions from any members of the 
subcommittee who have not been recognized?
    I see none.
    Seeing none, that concludes our hearing for today.
    Listen, I would like to thank all of you for being here. I 
know that we had to take that break. I appreciate your 
patience, but I believe that this is a step in the right 
direction. I thought this was a very fruitful, beneficial 
hearing, and hopefully we will have another one, one day again 
soon.
    With that, we are adjourned.
    [Whereupon, at 5:10 p.m., the subcommittee was adjourned.]



                       Submissions for the Record

                              ----------                              


   Letter of May 11, 2023, to Hon. Troy E. Nehls, Chairman, and Hon. 
   Donald M. Payne, Jr., Ranking Member, Subcommittee on Railroads, 
  Pipelines, and Hazardous Materials, from Sean O'Neill, Senior Vice 
 President, Government Affairs, Portland Cement Association, Submitted 
                   for the Record by Hon. Sam Graves
                                                      May 11, 2023.
The Honorable Troy Nehls,
Subcommittee Chair,
Railroads, Pipelines, and Hazardous Materials Subcommittee, Washington, 
        DC 20515.
The Honorable Donald Payne,
Subcommittee Ranking Member,
Railroads, Pipelines, and Hazardous Materials Subcommittee, Washington, 
        DC 20515.
    Dear Subcommittee Chair Nehls and Subcommittee Ranking Member 
Payne:
    The Portland Cement Association (PCA), which represents the 
majority of U.S. cement manufacturers, appreciates the opportunity to 
submit a statement for today's subcommittee hearing entitled ``Getting 
Back on Track: Exploring Rail Supply Chain Resilience and Challenges.'' 
We welcome the opportunity to share the perspective of the cement 
industry on the rail shipping challenges and how these are impacting 
the cement industry efficiently getting our product to market.
    Portland cement is a manufactured powder that is the primary 
ingredient in concrete. Portland cement acts as the bonding agent in 
concrete, similar to the role of flour in cake mix. As an essential 
construction material and a basic component of our nation's 
infrastructure, portland cement is utilized in virtually all 
construction applications, including highways, bridges, sidewalks, 
transit, airports and runways, water and sewer infrastructure, dams, 
high-rise buildings, homes, floors, and driveways. The durability and 
resilience of portland cement ensures concrete remains one of the 
nation's most essential and widely used construction materials.
    In 2021, 92 million metric tons of cement were produced in the 
United States and 109 million metric tons were consumed.\1\ The top two 
cement producing states in the United States in 2021 were Texas and 
Missouri.\2\ In Texas, there are 11 plants and 33 terminals. In 
Missouri, there are five plants and eight terminals. In Washington, 
there are two plants and six terminals. In New Jersey, there is one 
plant and three terminals. Last year, cement consumption in the United 
States increased 2.9 percent over 2021 levels, which was also a strong 
year. We anticipate continued demand for cement to increase with the 
implementation of infrastructure projects funded in part by the 
Infrastructure Investment and Jobs Act. The cement and concrete 
industry prides itself on employing approximately 600,000 people 
nationwide.
---------------------------------------------------------------------------
    \1\ https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-cement.pdf
    \2\ https://pubs.usgs.gov/periodicals/mcs2022/mcs2022-cement.pdf
---------------------------------------------------------------------------
    The majority of bulk cement shipments are from manufacturing plants 
to the more than 300 regional distribution terminals. More than half of 
the bulk cement shipped in the United States is shipped by Class I 
railroads. Therefore, it is critically important to our members that 
the railroads provide reliable, efficient, and cost-effective service 
to meet the widespread and growing demand for our product.
    The average cement shipments range between 250 and 300 miles. Truck 
transportation is not economically viable beyond 100 to 125 miles. As 
such, the cement industry relies on the railroads to deliver our 
product to the marketplace beyond the economical range of trucks. The 
cement plants that have access to water transportation for domestic 
shipments look to a combination to barge and rail to transport their 
product. In summary, domestic cement manufacturers have historically 
relied heavily on rail transportation to move the majority of shipments 
between cement plants and distribution terminals, and that reliance has 
only grown in recent years.
    When the Class I railroads started using precision scheduled 
railroading (PSR), our members experienced a decline in rail service. 
Specifically, with cement producers already experiencing logistics 
challenges related to consistent rail service, the shift to PSR caused 
a significant increase in missed switches and increased demurrage 
billings. This led to increased costs to cement producers not only 
through increasing demurrage, but also producers have been forced to 
hold rail cars ready for shipment longer. All of this has led to 
increased costs to cement manufacturers not only through increased 
demurrage but lost sales. Our members experienced a further decline in 
rail service when the Class I railroads reduced service at the 
beginning of the COVID pandemic. This came at the same time as cement 
manufacturing was deemed an essential industry and our members 
continued to produce cement as market demand continued.
    Critical to meeting that market demand is timely and dependable 
rail service both for the shipment of cement as well as the receipt of 
shipments of energy sources to power the kilns needed to produce cement 
and the chemicals used to maintain environmental compliance. Any 
legislation seeking to address transportation supply chain challenges 
must address what needs to be done to improve rail service of the wide 
range of commodities that rely on the Class I railroads to ship their 
products.
    Cement is also exempt from Surface Transportation Board (Board) 
oversight, preventing cement producers direct access to the Board to 
address poor rail service, unreasonably high rates, and unfair business 
practices. Our members cannot work with the Board directly to address 
their concerns related to the decline in rail service they are 
experiencing. We appreciate that the Board, over the past year, has 
sought to bring attention to the challenges facing commodities shipped 
by the Class I railroads and have asked each of the Class I railroads 
to develop Service Recovery Plans. With the attention the Board has 
given to improving the rail service, unfortunately, our members have 
not seen a dramatic improvement. Additionally, actions taken by the 
Board have not helped our members in their interactions with the 
railroads due to the lack of Board oversight.
    In the 28 years since cement was exempted from Board oversight, 
much has changed as it relates to the shipment of cement and the 
railroads. At the time the Board exempted cement from Board oversight, 
the Board indicated that there was sufficient intra- and intermodal 
transportation, including numerous Class I freight railroads and 
sufficient competition between a range of transportation modes to ship 
cement efficiently to market. Since that time there has been 
significant consolidation in railroads with just five Class I railroads 
serving rail customers across the country. Nearly all cement producers 
are now captive to one Class I railroad.
    Since 2011, PCA has been part of a case before the Board 
considering revocation of the exemption of cement from Board oversight. 
As we have previously highlighted since the Board case started the rail 
service for cement producers has further declined. In the case of 
cement, since the exemption of Board oversight of cement is being 
shipped longer distances making truck transportation a less competitive 
mode of transportation. This comes at the same time as there has been a 
consolidation in the number of Class I railroads servicing cement 
producers. As a result, almost all cement shipped by rail is captive. 
Additionally, most cement shipped by rail is shipped manifest. We would 
not be surprised if what we have described about the shipment of cement 
is similar to other exempt commodities since their exemption was first 
put in case.
    We believe this example demonstrates the need for legislation 
addressing transportation supply chain challenges must review the 
policy enabling specific commodities to be exempt from Board oversight 
by eliminating the ability to exempt commodities from Board oversight 
or establishing a mechanism by which the Board must review these 
exemptions on a cyclical basis to determine if there is still 
sufficient intra- and intermodal competition among different modes of 
transportation.
    Additionally, as we have highlighted, the decline in rail service 
has impacted our members ability to efficiently move our product to 
market as well as the shipment of products needed to produce cement. As 
a result, it is important that transportation supply chain legislation 
ensure railroads are meeting their common carrier obligation. This is 
critical to ensuring shippers receive their products in a timely and 
cost-effective basis. As part of this it is important to provide 
clarity on whether a Class I railroad has provided reasonable 
transportation service. As part of this, it is important that steps 
taken to address common carrier obligation extend to all commodities 
shipped by rail in the same way the Board did with the guidelines for 
demurrage billings.
    In conclusion, PCA and our members are committed to working with 
this committee to ensure our transportation network and the supply 
chains that are so critical to our nation's infrastructure are 
operating in a manner that grows our economy and meets future demands. 
If you have any questions, please do not hesitate to reach out to Sean 
O'Neill.
        Sincerely,
                                              Sean O'Neill,
        Senior Vice President, Government Affairs, Portland Cement 
                                                       Association.

                                 
   Letter of May 12, 2023, to Hon. Martin Oberman, Chairman, Surface 
  Transportation Board, from Hon. Thomas J. Vilsack, Secretary, U.S. 
 Department of Agriculture, Submitted for the Record by Hon. Donald M. 
                               Payne, Jr.
                                                      May 12, 2023.
The Honorable Martin Oberman,
Chairman,
Surface Transportation Board, 395 E Street, SW, Washington, DC 20423.
    Dear Chairman Oberman:
    Following up on my letter from a year ago, I would like to express 
my sincere appreciation for the Surface Transportation Board's (STB or 
Board) efforts over the past year and share my continued encouragement 
for immediate and continued action.
    When I wrote the Board about rail service issues in March 2022, 
rail service was, in many ways, as poor as it had ever been. I was 
pleased to see the Board act swiftly by hosting our Deputy Secretary at 
a hearing on rail service deterioration, opening a proceeding to revise 
its procedures for expedited relief for service emergencies, and 
considering rules around railroads' use of private cars. I was also 
encouraged by the Board's collection of more service data, your 
December hearing on Union Pacific Railroad's (UP) increased use of 
embargoes, and especially the Board's final rules to streamline rate 
review in small cases. I know this work was done under your existing 
limited resources and I commend the Board and its staff for this 
incredible volume of work.
    Unfortunately, while rail service has improved from its worst 
levels last year, it remains inadequate and unreliable for many 
agricultural shippers. There is more work to be done.
    The delays and unpredictability seen in rail service are partly the 
result of the railroads' embrace of precision-scheduled railroading 
(PSR) and its drastic reductions in workforce and assets to reduce 
operating ratios at the expense of service. As USDA has long expressed, 
the PSR operating model does not leave sufficient buffer in labor and 
assets for railroads to be able to handle unexpected spikes in demand, 
such as those seen over the past few years. And, as we've seen 
recently, this way of operating leaves the door open to unsafe working 
conditions which are harmful to workers themselves, and further 
increase the likelihood of catastrophic events like derailments when 
the skeleton staff has as little as a few minutes to inspect each rail 
car.
    It is of utmost importance that the STB moves quickly to strengthen 
our rail system overall and specifically to improve service to 
agricultural shippers before railroad capacity again becomes an urgent, 
national issue. This work must also ensure the safety of rail workers 
and communities.
    Specifically, I encourage the board to urgently and expeditiously:
      Move forward on the open proceedings on private railcar 
use and emergency service orders. The shipper petition on private rail 
car use would improve incentives and restore balance around the 
railroads' use of private cars and demurrage. The Board's proposed 
changes to the emergency service rules will help provide relief in 
times of severe disruptions, which have become more frequent.

      Move forward on reciprocal switching. Following the 
Board's approval of the merger between Canadian Pacific Railway and 
Kansas City Southern Railway, ensuring adequate industry competition is 
more important than ever. The Board's ongoing oversight of the highly 
consolidated rail industry is key to this objective.

      Provide clarity on the railroads' common carrier 
obligation. The railroads must provide reasonable service upon 
reasonable request. However, without clarity on what these terms mean 
and how the policy will be enforced, railroads are able to make 
unilateral decisions, with little regard for shipper needs. For 
example, a few observations raise important questions about whether 
railroads are meeting their obligation: first, UP's use of embargoes to 
manage congestion and, also, the multiple cases brought to the Board 
where a shipper's service was cut from 5 to 3 days per week.

      Collect additional first-mile/last-mile (FMLM) service 
data. USDA appreciates the additional data the Board has been 
collecting as part of its monitoring. However, USDA encourages STB to 
significantly expand that data collection to cover additional 
commodities and provide more granular geographic data. Agricultural 
shippers have continually reported, to USDA, distinct service issues 
affecting specific regions of the country. More granular commodity and 
geospatial FMLM data will significantly improve visibility into those 
issues.

    More broadly, the railroads should not be able to continue to 
operate without buffer for unexpected demand, make historic profits, 
and engage in enormous stock buybacks, all while providing subpar 
service to agricultural shippers and disregarding safety. STB can and 
should counteract these negative trends in rail transportation by 
increasing competition and improving oversight with enhanced data. The 
Board should also ensure the railroads balance their focus on 
shareholders with their duty to provide high-quality common carrier 
rail service to the Nation.
        Sincerely,
                                         Thomas J. Vilsack,
                         Secretary, U.S. Department of Agriculture.

                                 
 Statement of Jennifer C. Gibson, Vice President, Regulatory Affairs, 
National Association of Chemical Distributors, Submitted for the Record 
                      by Hon. Donald M. Payne, Jr.
    The National Association of Chemical Distributors (NACD) 
respectfully submits these comments in response to the U.S. House of 
Representatives Committee on Transportation and Infrastructure's 
Subcommittee on Railroads, Pipelines, and Hazardous Materials public 
hearing ``Getting Back on Track: Exploring Rail Supply Chain Resilience 
and Challenges.'' NACD appreciates this subcommittee's leadership 
regarding the issue of rail supply chain issues. While problems within 
the country's supply chains have received increased attention since the 
COVID-19 pandemic and the tragic East Palestine, Ohio, derailment, 
these issues have existed for over a decade. In particular, freight 
rail service has declined considerably, disrupting efficient deliveries 
of raw materials and finished goods, especially after the adoption of 
precision scheduled railroading (PSR). Numerous NACD members have 
experienced unreliable rail service for years, and these issues have no 
sign of ceasing. Indeed, for many members the situation continues to 
worsen. NACD urges Congress to work with freight rail regulators and 
the freight rail industry to establish standards to improve service and 
safety.
    NACD, established in 1971, is an international association of 
chemical distributors and their supply-chain partners. Member companies 
process, formulate, blend, re-package, warehouse, market, and transport 
chemical products for over 750,000 customers across the U.S. The 
industry that NACD represents is a major economic engine that generates 
$7.5 billion in tax revenue. NACD's members range from small family-
owned businesses to large national and international organizations. 
They meet the highest standards in safety and performance through 
mandatory participation in NACD Responsible Distribution, the 
association's third-party-verified environmental, health, safety, and 
security program. Through Responsible Distribution, NACD members 
demonstrate their commitment to continuous improvement in every phase 
of chemical storage, handling, transportation, and disposal operations.
    Transportation is critical to the chemical distribution industry. 
NACD members make millions of shipments, moving tens of millions of 
tons of product each year. In 2020, NACD members delivered product 
safely every 13.2 seconds. The chemical industry is one of the largest 
customers of freight rail in both volume and revenue, and many NACD 
members rely heavily on rail to ensure the timely shipment of product 
used in nearly every industry in the U.S. Unfortunately, railroads' 
implementation of PSR resulted in substantial workforce reductions and 
a significant decline in service. This has resulted in delayed 
shipments, supply chain disruptions, and unnecessary costs which are 
borne not exclusively by shippers but also by the American public.
    The U.S. Government Accountability Office (GAO) released a report 
in December investigating the impacts of PSR, confirming some of the 
practice's disastrous impacts on the rail supply chain that our members 
have been experiencing for years. The report's primary findings were a 
reduction in staff, an increase in train length, and a reduction in 
assets resulting from the implementation of PSR.
    Specifically, the report found that the number of extremely long 
freight rail trains have increased substantially. Of the Class I 
railroads surveyed in the report, one reported a more than eight times 
increase (three percent to 25 percent) in the percentage of trains over 
10,000 feet long and another Class I reported a more than 20 times 
increase (0.2 percent to about five percent).\1\ These trains are 
nearly two miles in length, making it exceedingly difficult for 
crewmembers to identify problems that may arise while trains are in 
service. These longer trains also experience a variety of additional 
issues related to reduced breaking performance, difficulties in 
communication between crewmembers, and more. The Federal Railroad 
Administration recently acknowledged the dangers of these extremely 
long trains in a safety advisory released just last month, urging 
railroads with these longer trains to take extra precautions and revise 
various operations related to these trains.
---------------------------------------------------------------------------
    \1\ Government Accountability Office, ``Freight Rail: Information 
on Precision-Scheduled Railroading,'' https://www.gao.gov, GAO, https:/
/www.gao.gov/products/gao-23-105420
---------------------------------------------------------------------------
    An additional concern confirmed by the GAO report is a significant 
reduction in railroad staff members. The report found at least a 20 
percent decrease in staff in every employment classification 
category.\2\ Moreover, when examining the classifications that include 
those responsible for train maintenance, transportation related to the 
train and engine, and transportation not related to the train and 
engine, this decrease is even more alarming, being 39.8 percent, 26.7 
percent, and 29.6 percent, respectively. This not only creates service 
concerns, as there are fewer employees to oversee the fluid transport 
of trains, but there are also significant safety concerns, as there are 
fewer crewmembers to notice issues while the train is in transit and to 
conduct inspections before trains leave the yard. Freight rail 
employees have reported that inspections that used to take roughly five 
to eight minutes have been cut to a fraction of that, now only lasting 
30 seconds to one minute, with employees fearing retaliation if they 
take too long during inspections.\3\ This is both a safety and 
logistical concern as reducing the quality of these inspections 
increases the risk of derailments, endangering the surrounding 
communities and preventing goods from getting to their destinations on 
time.
---------------------------------------------------------------------------
    \2\ Ibid
    \3\ Wall Street Journal, `` `Hurry Up and Get It Done': Norfolk 
Southern Set Railcar Safety Checks at One Minute,'' https://
www.wsj.com, WSJ, https://www.wsj.com/articles/railroads-are-a-lot-
more-efficient-are-they-also-less-safe-7c5d2a60
---------------------------------------------------------------------------
    Moreover, NACD's concerns with the employee exodus at Class I 
railroads is compounded by the railroads' efforts to lobby against 
regulations that would require at least two crewmembers for the 
majority of train operations. Allowing single member crews during 
freight rail operations is dangerous and could result in additional 
derailments, supply chain disruptions, and employee turnover.
    Due to the rail supply chain disruptions and safety concerns 
created by the implementation of PSR, NACD urges this committee to 
support freight rail regulators, such as the Surface Transportation 
Board (STB), in their efforts to improve transparency, oversight, and 
fluidity of freight rail. The STB, in particular, has led important 
initiatives, investigating the use of unnecessary embargoes, 
considering the adoption of reciprocal switching, and requiring four 
Class I railroads to provide information to the board describing their 
efforts to improve rail service. The work being done by the STB must 
continue and be fully supported in order to strengthen the rail supply 
chain.
    NACD also strongly supports several legislative efforts to improve 
freight rail service and safety. The bipartisan Reducing Accidents In 
Locomotives (RAIL) Act (H.R. 1633) would create various new 
requirements for railroads to improve safety and freight rail service. 
NACD supports this bill, particularly its provisions that would update 
regulations for train inspections, update regulations for wayside 
detectors, and require two-person crews in almost all circumstances. 
NACD has also supported the Reliable Rail Service Act, which has been 
introduced by Senator Baldwin in previous Congresses. This bill would 
define the common carrier obligation that freight railroads are 
expected to fulfill. The definition as it stands is ambiguous, allowing 
freight railroads to charge higher costs and provide inadequate service 
without necessary accountability.
    While recent years have been extremely good for railroad profits, 
rail customers have greatly suffered. Currently there are about three 
freight rail derailments each day, creating supply chain and safety 
issues. While railroads have continued to operate under the status quo, 
accepting these incidents as a cost of doing business, NACD urges 
Congress to act and make the freight rail industry safer and more 
efficient. Poor rail service has been a significant contributor to the 
severe supply chain problems that have plagued American businesses and 
consumers in recent months and years. NACD members, their customers, 
and our entire nation depend on the freight railroads to deliver 
essential products in a timely, efficient, and cost-effective manner. 
These include chemicals needed for water treatment, food production, 
pharmaceuticals, energy, and numerous other materials essential to 
public health and well-being. Disruptions in the rail supply chain 
caused by unreliable rail service have caused delayed shipments of 
these products, which can have severe consequences, such as a lack of 
chlorine that municipalities need to treat water for their communities.
    NACD commends the Railroads, Pipelines, and Hazardous Materials 
Subcommittee for investigating these critical issues. In order to 
develop a well-functioning freight rail network that meets the public's 
needs for clean water and other critical products for modern life, the 
rail supply chain needs to be improved and the underlying reasons for 
poor service must be addressed.
    NACD members need reliable, efficient, and affordable rail service 
to run their businesses successfully and serve their customers. NACD 
looks forward to the work being done by the Railroads, Pipelines, and 
Hazardous Materials Subcommittee to investigate rail supply chain 
issues. The problems referenced above must be addressed to create a 
more favorable rail service environment for the thousands of customers 
who depend on this critical transportation mode to move products and 
our economy forward.



                               Appendix

                              ----------                              


 Questions from Hon. Rick Larsen to Ian Jefferies, President and Chief 
          Executive Officer, Association of American Railroads

    Question 1. What is the longest train each of the Class I 
railroads, by railroad, operated in each of the last five years, 2018-
2022?
    Question 2. What percentage of trains were longer than 7,500 feet 
for each of the last five years, 2018-2022? Please answer this question 
for each of the Class I railroads.
    Answers to questions 1 & 2. The Association of American Railroads 
(AAR) does not receive data that identifies trains by individual 
railroad, but the chart (below) summarizes the requested information on 
an industry-wide basis. In 2022:
      50 percent of all trains were less than 5,350 feet.
      75 percent of all trains were less than 7,590 feet.
      90 percent of all trains were less than 9,710 feet.
      Fewer than 1 percent of all trains were longer than 
13,820 feet. Effectively, this was the maximum train length for 2022.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]


    AAR continues to participate in the Transportation Research Board's 
ongoing study of the ``Impacts of Trains Longer than 7,500 Feet,'' 
which is being conducted pursuant to section 22422 of the 
Infrastructure Investment and Jobs Act (P.L. 117-58). This study is 
expected to be completed in June 2024.
    For additional information on issues related to train length, 
please visit: https://www.aar.org/issue/freight-train-length/.

     Questions from Hon. Robert Menendez to Greg Regan, President, 
               Transportation Trades Department, AFL-CIO

    Question 1. Your testimony shed light on some of the issues 
impacting rail service. One of the biggest takeaways from your 
testimony is that adequate training and safe working conditions can 
begin to improve the service railroads provide to consumers and 
ultimately strengthen our supply chain. We know that railroading is not 
an easy job. I want to shed some light on the experiences these 
critical workers face.
    Can you describe some of the challenges and working conditions rail 
workers face in their day to day, and how they are compounded by 
inadequate labor policies?
    Answer. Railroading jobs have always been tough, physical jobs that 
take a toll on one's health while also requiring many workers to spend 
days away from home and family at a given time. In the past, the wages 
and compensation were high enough to make those sacrifices worth it.
    However, working conditions have deteriorated significantly in the 
last decade as a result of the industry's Precision Scheduled 
Railroading (PRS) operating model, which decreased the workforce by 30% 
and increased burdens on the remaining workers. Rail workers lacked 
paid sick leave during the pandemic despite decades-long pleas for sick 
time consistent with what is granted to railroad managers. Workers face 
draconian attendance policies where they are disciplined or fired for 
missing work, even if they are using leave they have collectively 
bargained for.\1\ Workers have also been unable to get time off for 
medical appointments, jeopardizing their health and even leading to 
deaths in some cases.\2\
---------------------------------------------------------------------------
    \1\ https://www.vice.com/en/article/5dgezn/the-worst-and-most-
egregious-attendance-policy-is-pushing-railroad-workers-to-the-brink
    \2\ https://www.washingtonpost.com/business/2022/09/17/railroad-
strike-attendance-workers/
---------------------------------------------------------------------------
    The rail industry's refusal to address these quality of life, 
health, and safety issues created a phenomenon of senior rail 
employees, some with upwards of ten to fifteen years of experience, 
resigning from well-paying jobs and foregoing stable retirements. This 
exodus from the rail industry is a direct consequence of unsafe working 
conditions, including the lack of sick leave and the perpetual threat 
of furlough or termination. These issues have severely hindered the 
rail industry's ability to attract new workers, many of whom are 
quitting even before their first training classes are complete once 
they learn how bad the working conditions are.
    Labor unions, shippers, and the Class I railroads all agree that 
the first step to better freight rail service is to hire more workers. 
It is not physically possible to move the same volume of goods with 30% 
fewer workers. Until these long-standing quality of life issues are 
addressed the railroads will not be able to maintain their current 
workforce or hire the workers needed, which will only exacerbate the 
existing problems within the industry.

    Question 2. It's important to note that these conditions don't just 
impact individual workers--they have a broader impact on our supply 
chain.
    Question 2.a. How do these conditions effect our supply chain in 
the long run?
    Question 2.b. What can Congress do to support these workers and 
stabilize our supply chain?
    Answers to questions 2.a. & 2.b. The supply chain crisis 
spotlighted components of the freight network that were particularly 
ill-prepared for the demand shock during the pandemic. The leading 
causes of the supply chain crisis were poor rail service and an 
inability to meet demand. These problems continue in the freight rail 
industry today because of the inherent flaws in the industry's 
Precision Scheduled Railroading (PSR) operating model, which 
prioritizes railroad profits over any other goal, including reliable 
rail service.
    The supply chain challenges that arose from the backlog of ships 
and containers at ports like the Ports of Los Angeles and Long Beach or 
the Port of New York and New Jersey were largely due to capacity issues 
in the freight rail system. Throughout the pandemic, many railroads 
self-imposed ``service embargoes'' to limit the freight they would 
accept from customers. These service embargoes led to massive backlogs 
of freight waiting to move by rail, including containers that the 
railroads were supposed to move at ports.\3\
---------------------------------------------------------------------------
    \3\ https://theloadstar.com/now-us-intermodal-rail-yards-clog-up-
as-port-congestion-and-delays-continue/
---------------------------------------------------------------------------
    The end result is that businesses across every sector of the 
economy, including agriculture, energy, mining, and chemicals, were 
unable to get the goods or inputs they needed to function. That backlog 
contributed to inflation, which hurt every single American as 
businesses raised their prices because of the disparity between supply 
and demand.
    To address these issues, Congress should pass legislation to give 
additional tools to the Surface Transportation Board, the federal 
economic regulator of the rail industry, so they can obligate the 
railroads to provide reasonable service. This legislation should 
strengthen the definition of the rail industry's existing common 
carrier obligation to provide ``reasonable service'' at ``reasonable 
rates'' so those terms are better defined in law as proposed in the 
Freight Rail Shipping Fair Market Act (H.R. 8649) from the last 
Congress.

    Question 3. Mr. Regan, your testimony also highlighted that during 
the pandemic, ports suffered huge backlogs because of the freight rail 
service issues.
    Question 3.a. Can you further explain how the ongoing issues in the 
freight rail industry negatively affect ports like the Port of New York 
and New Jersey and undermine the record federal investment from the 
IIJA into ports?
    Question 3.b. Can you further expound on how the freight rail 
safety issues and service issues are linked together back to the Class 
I railroads' core operating model? How would passing a rail safety bill 
improve rail service?
    Answers to questions 3.a. & 3.b. The historic Infrastructure 
Investment and Jobs Act (IIJA) provides record public investment into 
our country's infrastructure system. This investment includes a $17 
billion investment in ports such as the Port of New York and New Jersey 
(PANYNJ), through programs such as the Port Infrastructure Development 
Program.\4\
---------------------------------------------------------------------------
    \4\ https://www.maritime.dot.gov/about-us/bipartisan-
infrastructure-law-maritime-administration
---------------------------------------------------------------------------
    Ports like PANYNJ are also making investments in freight rail 
service through comprehensive programs like ExpressRail and projects 
like the Waverly Loop and Southbound Connector rail project. They want 
to move more goods from their port facilities by rail and less by 
truck. However, these port infrastructure investments cannot be 
effective without equal investments from the Class I railroads. Today, 
that is not happening. Instead, Class I railroads are slashing their 
capital investments and providing poor service, driving shippers to 
switch their shipments to trucks instead of rail.\5\ Collectively, the 
four largest railroads in the United States (BNSF, UP, NS, CSX) have 
cut $32 billion in capital expenditures since 2015 versus their 
expected 2015 baseline. These decreases do not account for the 
inflation that has happened since that time, which makes the decline in 
investment even worse. With respect to rail service, the Surface 
Transportation Board recently found that the service issues with three 
of the four largest Class I railroads had not gotten any better despite 
the Board's unprecedented hearings and attempts over the last year to 
get the railroads to improve their service.
---------------------------------------------------------------------------
    \5\ https://www.joc.com/article/ny-nj-rail-lifts-fall-low-rates-
entice-shippers-truck_20220805.html
---------------------------------------------------------------------------
    Current-day issues in the freight rail industry undermine the 
economic competitiveness of ports, which are significant economic 
drivers for regions like the New York Metropolitan Area.
    Additionally, the horrific Norfolk Southern train derailment in 
East Palestine, Ohio on the evening of February 3, 2023, highlighted a 
truth that rail labor unions were vocal about for years: the freight 
rail industry has a fundamental disregard for safety. These safety 
issues also have a direct negative effect on rail service, since a less 
safe system means more problems for rail shippers.
    Unfortunately, the East Palestine derailment is not an anomaly. The 
wide-reaching breadth of safety failures in the freight rail industry 
contributes to more than 1,000 derailments a year--nearly three a day. 
And contrary to the railroads' rhetoric, the industry's safety record 
is getting worse, not better. In fact, according to data from the 
Federal Railroad Administration, the accident and incident rate has 
increased over the last decade at the biggest Class I railroads. The 
rate notably increased in rail yards, where the accident and incident 
rate almost tripled for Norfolk Southern.
    The railroads' safety deficiencies are pushing the system to its 
breaking point, driving up accident and incident rates and negatively 
affecting the supply chain. As noted above, the railroads have 
decreased capital investments in their infrastructure. For example, 
they haven't lengthened rail sidings to accommodate longer and longer 
trains. The American Association of Railroads' own fact sheet on train 
length notes that railroads are running trains up to 14,000 feet, which 
is a 40% increase from 2010. As a result, the trains get stuck on the 
main line when they break down, which is happening more frequently 
because of the cuts in maintenance and inspections. This, in turn, 
causes congestion and backups throughout the entire system. So even if 
shippers don't have products on the train that broke down, they are 
impacted.
    The bottom line is that the rail industry's service and safety 
problems are not two separate issues. They are both connected to the 
same fundamental problem: Precision Scheduled Railroading (PSR). If we 
fix the problems with PSR, we can fix both the service and safety 
issues plaguing the railroads.
    Congress has the power to help solve the problems caused by PSR by 
passing a comprehensive rail safety bill that directly addresses the 
issues that rail workers have warned about for years. Congress must act 
because the railroads have repeatedly demonstrated that they refuse to 
do it themselves.

                                    
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