[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
THE STATE OF TRANSPORTATION
=======================================================================
(118-42)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND
INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
SECOND SESSION
__________
JANUARY 17, 2024
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC(S) 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 OFFFICE
56-988 PDF WASHINGTON : 2024
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Sam Graves, Missouri, Chairman
Rick Larsen, Washington, Ranking Member
Eric A. ``Rick'' Crawford, Arkansas Eleanor Holmes Norton,
Daniel Webster, Florida District of Columbia
Thomas Massie, Kentucky Grace F. Napolitano, California
Scott Perry, Pennsylvania Steve Cohen, Tennessee
Brian Babin, Texas John Garamendi, California
Garret Graves, Louisiana Henry C. ``Hank'' Johnson, Jr., Georgia
David Rouzer, North Carolina Andre Carson, Indiana
Mike Bost, Illinois Dina Titus, Nevada
Doug LaMalfa, California Jared Huffman, California
Bruce Westerman, Arkansas Julia Brownley, California
Brian J. Mast, Florida Frederica S. Wilson, Florida
Jenniffer Gonzalez-Colon, Donald M. Payne, Jr., New Jersey
Puerto Rico Mark DeSaulnier, California
Pete Stauber, Minnesota Salud O. Carbajal, California
Tim Burchett, Tennessee Greg Stanton, Arizona,
Dusty Johnson, South Dakota Vice Ranking Member
Jefferson Van Drew, New Jersey, Colin Z. Allred, Texas
Vice Chairman Sharice Davids, Kansas
Troy E. Nehls, 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
Thomas H. Kean, Jr., New Jersey Troy A. Carter, Louisiana
Anthony D'Esposito, New York Patrick Ryan, New York
Eric Burlison, Missouri Mary Sattler Peltola, Alaska
John James, Michigan Robert Menendez, New Jersey
Derrick Van Orden, Wisconsin Val T. Hoyle, Oregon
Brandon Williams, New York Emilia Strong Sykes, Ohio
Marcus J. Molinaro, New York Hillary J. Scholten, Michigan
Mike Collins, Georgia Valerie P. Foushee, North Carolina
Mike Ezell, Mississippi
John S. Duarte, California
Aaron Bean, Florida
Celeste Maloy, Utah
Vacancy
CONTENTS
Page
Summary of Subject Matter........................................ v
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. David Rouzer, a Representative in Congress from the State of
North Carolina, and a Majority Member, Committee on
Transportation and Infrastructure, opening statement........... 1
Prepared statement........................................... 2
Hon. Rick Larsen, a Representative in Congress from the State of
Washington, and Ranking Member, Committee on Transportation and
Infrastructure, opening statement.............................. 3
Prepared statement........................................... 4
WITNESSES
Stephen A. Edwards, Chief Executive Officer and Executive
Director, Virginia Port Authority, oral statement.............. 8
Prepared statement........................................... 10
Roger Millar, PE, FASCE, FAICP, Secretary, Washington State
Department of Transportation, oral statement................... 14
Prepared statement........................................... 16
Jeffrey G. Tucker, Chief Executive Officer, Tucker Company
Worldwide, Inc., on behalf of the Transportation Intermediaries
Association, oral statement.................................... 19
Prepared statement........................................... 21
Lauren Benford, Controller, Reiman Corporation, on behalf of the
Associated General Contractors of America, oral statement...... 26
Prepared statement........................................... 27
SUBMISSIONS FOR THE RECORD
Statement of the American Traffic Safety Services Association,
Submitted for the Record by Hon. David Rouzer.................. 6
Op-ed entitled, ``Don't Pause the Gas Tax, Redirect It,'' by
Congressman Jake Auchincloss, Strong Towns, July 25, 2022,
Submitted for the Record by Hon. Jake Auchincloss.............. 67
Statement of the National Stone, Sand, and Gravel Association,
Submitted for the Record by Hon. Sam Graves.................... 87
Letter of January 26, 2024, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on Transportation
and Infrastructure, from Catherine Chase, President, Advocates
for Highway and Auto Safety, Submitted for the Record by Hon.
Eleanor Holmes Norton.......................................... 90
Statement of the National Association of Small Trucking
Companies, Submitted for the Record by Hon. Mike Ezell......... 93
APPENDIX
Questions to Stephen A. Edwards, Chief Executive Officer and
Executive Director, Virginia Port Authority, from Hon. Mike
Ezell.......................................................... 95
Questions to Jeffrey G. Tucker, Chief Executive Officer, Tucker
Company Worldwide, Inc., on behalf of the Transportation
Intermediaries Association, from:
Hon. Burgess Owens........................................... 95
Hon. Mike Ezell.............................................. 96
Questions to Lauren Benford, Controller, Reiman Corporation, on
behalf of the Associated General Contractors of America, from:
Hon. Eric A. ``Rick'' Crawford............................... 97
Hon. Jenniffer Gonzalez-Colon................................ 97
Hon. Tracey Mann............................................. 98
Hon. Mike Ezell.............................................. 98
Hon. Celeste Maloy........................................... 99
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
January 12, 2024
SUMMARY OF SUBJECT MATTER
TO: LMembers, Committee on Transportation and
Infrastructure
FROM: LStaff, Committee on Transportation and
Infrastructure
RE: LFull Committee Hearing on ``The State of
Transportation''
_______________________________________________________________________
I. PURPOSE
The Committee on Transportation and Infrastructure will
meet on Wednesday, January 17, 2024, at 10:00 a.m. ET in 2167
of the Rayburn House Office Building to receive testimony at a
hearing entitled, ``The State of Transportation.'' The hearing
will discuss the current state of our Nation's transportation
infrastructure and supply chain challenges. At the hearing
Members will receive testimony from the Virginia Port
Authority, the Washington State Department of Transportation,
the Transportation Intermediaries Association (TIA), and the
Associated General Contractors of America (AGC).
II. BACKGROUND
Infrastructure is generally acknowledged as the physical
facilities that support the transportation, energy, and
communications sector.\1\ Transportation infrastructure is the
underlying system of public works designed to facilitate
movement.\2\ Based on current mobility patterns and
transportation modes in the United States, this infrastructure
includes roads, railways, airways, transit systems, waterways,
and pipelines, as well as facilities such as airports, ports,
railway stations, bus stations, warehouses, and trucking
terminals.\3\ These systems are essential to the movement of
people and goods Nationwide and globally, and play an integral
role in the United States' economic competitiveness and
Americans' quality of life.\4\
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\1\ United States Dep't. of Homeland Sec., Federal Emergency
Management Agency, Infrastructure, available at https://www.fema.gov/
glossary/infrastructure.
\2\ Nat'l Geographic Resource Library, Transportation
Infrastructure, (last accessed Jan. 11, 2024), available at https://
education.nationalgeographic.org/resource/transportation-
infrastructure/.
\3\ See e.g. DOT, Bureau of Transp. Statistics, Transp. Statistics
Annual Rep. 2023 (2023), available at https://www.bts.gov/sites/
bts.dot.gov/files/2023-12/TSAR-2023_123023.pdf [hereinafter Transp.
Statistics Annual Rep. 2023].
\4\ Id.
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The United States' transportation system, overseen by the
United States Department of Transportation (DOT or Department),
includes 4.2 million miles of public roads, nearly 620,000
bridges, 3.4 million miles of hazardous liquid and natural gas
pipelines, 25,000 miles of commercially navigable waterways,
approximately 137,000 railroad route-miles, and more than 5,200
public-use airports.\5\ The transportation system also includes
970 urban and 1,270 rural and Tribal public transit operators,
and more than 300 ports on the coasts, Great Lakes, and inland
waterways.\6\ In 2022, the Nation's transportation system
served 333 million residents, and connected 8.1 million
businesses with customers, suppliers, and workers.\7\
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\5\ See id., see also Pipeline Safety: Reviewing Implementation of
the PIPES Act of 2020 and Examining Future Safety Needs: Hearing Before
the Subcomm. on Railroads, Pipelines, and Hazardous Materials of the H.
Comm. on Transp. and Infrastructure, 118th Cong. (2023) (statement of
Tristan Brown, Deputy Administrator, Pipeline and Hazardous Materials
Safety Administration) available at https://www.phmsa.dot.gov/sites/
phmsa.dot.gov/files/2023-03/Written
%20Testimony%20-%20Tristan%20Brown%20-%20House%20T%26I%20Hearing%20on
%20Pipeline%20Safety%20-%20March%208%202023.pdf.
\6\ Id.
\7\ Transp. Statistics Annual Rep. 2023, supra note 3.
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Although the state of infrastructure in the United States
was once unparalleled, more recent reports indicate that
America no longer ranked with the best infrastructure in the
world.\8\ For example, in 2019, the World Economic Forum (WEF)
ranked the United States' physical infrastructure as 13th in
the world.\9\ Additionally, a Council of Foreign Relations'
report states that the United States' infrastructure is
overstretched and lagging behind economic competitors,
particularly China.\10\ Further, the latest American Society of
Civil Engineers' (ASCE) report card for American
infrastructure, issued in 2021, rated the Nation's overall
infrastructure as a C minus.\11\
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\8\ James McBride, et. al., The State of U.S. Infrastructure,
Council of Foreign Relations, (last updated Sept. 20, 2023) available
at https://www.cfr.org/backgrounder/state-us-infrastructure
[hereinafter The State of U.S. Infrastructure].
\9\ Klaus Schwab, The World Economic Forum, The Global
Competitiveness Rep. (2019), available at https://www3.weforum.org/
docs/WEF_TheGlobalCompetitivenessReport2019.pdf.
\10\ The State of U.S. Infrastructure, supra note 8.
\11\ Am. Soc. of Civil Engineers, a Comprehensive Assessment of
America's Infrastructure: 2021 Rep. Card for America's Infrastructure
available at https://infrastructurereportcard.org/wp-content/uploads/
2020/12/National_IRC_2021-report.pdf. (Please note this report is only
issued every four years).
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Ensuring the United States' transportation systems are
equipped to handle future demand from freight is a challenge
that must be addressed. In 2021, DOT projected freight activity
would increase by 50 percent in tonnage and double in value
from 2020 to 2050.\12\ In 2022, the Nation's freight
transportation system moved nearly 20 billion tons of goods,
representing a value of approximately $19 trillion.\13\
Therefore, the significance of freight activity has far
reaching ramifications for the broader $25 trillion United
States economy, as it relies on the vast network of
infrastructure.\14\
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\12\ Press Release, Bureau of Transp. Statistics, Freight Activity
in the U.S. Expected to Grow Fifty Percent by 2050 (Nov. 22, 2021),
available at https://www.bts.gov/newsroom/freight-activity-us-expected-
grow-fifty-percent-2050.
\13\ Transp. Statistics Annual Rep. 2023, supra note 3.
\14\ The State of U.S. Infrastructure, supra note 8.
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III. SUPPLY CHAIN AND RECENT CHALLENGES
The supply chain is a network comprised of the entire
process of making and selling commercial goods, from the supply
of materials, manufacture of goods, through their
transportation, distribution, and sale.\15\ Moving goods is
critical to the success of this system.\16\ A well-managed
supply chain results in the efficient use of resources, reduced
costs, a faster production cycle, and satisfied consumers.\17\
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\15\ See Jason Fenando, 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.
\16\ The Transportation Supply Chain, Supply Chain Drive, (Jan. 17,
2021), available at https://www.supplychaindive.com/spons/the-
transportation-supply-chain/433934/.
\17\ See Sean Harapko, How COVID-19 Impacted Supply Chains and What
Comes Next, EY, (Jan. 6, 2023), available at https://www.ey.com/en_us/
supply-chain/how-covid-19-impacted-
supply-chains-and-what-comes-
next#: :text=The%20pandemic%20continues%20to,new
%20challenges%20for%20supply%20chains [hereinafter How COVID-19
Impacted Supply Chains]; 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.
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In 2022, the total value of United States' foreign trade
was about $5.31 trillion.\18\ Los Angeles, California is the
Nation's leading gateway, with the Port of Los Angeles handling
$310.7 billion in trade flows, including $282.2 billion in
imports and $28.5 billion in exports, in 2022.\19\ Indicative
of the high trade volumes between the United States and Mexico,
on the United States side of the border, Laredo, Texas, was the
number one land gateway, handling $287.3 billion in
international freight, in 2022.\20\ Houston, Texas, ranked as
the Nation's top export gateway, with an export freight value
of $133 billion.\21\ Recent supply chain shifts have occurred
and more United States' imports and exports from Middle Eastern
and Asian countries entered the Nation through east coast
ports, as a whole, rather than west coast ports in 2022.\22\
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\18\ Transp. Statistics Annual Rep. 2023, supra note 3 at 3-1.
\19\ Id.
\20\ Id. at 3-12.
\21\ Id.
\22\ Id. at 3-14.
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In 2020, COVID-19 exposed vulnerabilities in transportation
networks, with a disruption in one part of the supply chain
having a ripple effect across all parts of the supply chain,
from manufacturers to suppliers and distributors.\23\
Weaknesses in the global supply chain were exacerbated by
supply and demand imbalances, restrictions and regulations, and
workforce and infrastructure challenges.\24\ New international
issues are impacting the effectiveness and operation of the
global supply chain and have accelerated changes in domestic
and international commerce and passenger flows.\25\
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\23\ See How COVID-19 Impacted Supply Chains, supra note 27; Peter
S. Goodman, How the Supply Chain Broke, and Why it Won't Be Fixed
Anytime Soon, N.Y. Times, (Oct. 21, 2021), available at https://
www.nytimes.com/2021/10/22/business/shortages-supply-chain.html
[hereinafter How the Supply Chain Broke].
\24\ See How COVID-19 Impacted Supply Chains, supra note 27; Chuin-
Wei Yap, William Boston, & Alistair MacDonald, Global Supply-Chain
Problems Escalate, Threatening Economic Recovery, Wall St. J., (Oct. 8,
2021), available at https://www.wsj.com/articles/supply-chain-issues-
car-chip-shortage-covid-manufacturing-global-economy-11633713877.
\25\ Transp. Statistics Annual Rep. 2023, supra note 3 at v.
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For example, the Bureau of Transportation Statistics Annual
Report for 2023 noted that ``world oil markets were disrupted
by Russia's invasion of Ukraine,'' \26\ which posed a challenge
to the global supply chain as ``transportation's petroleum
dependence remained below 90 percent . . . at 89.4 percent in
2022.'' \27\ In addition, tensions in the Middle East are
impacting the global supply chain.\28\ Since the beginning of
the war in Israel, the Houthis, an Iranian backed group in
Yemen, have attacked naval and commercial shipping targets
transiting through the Red Sea and the Gulf of Aden.\29\ The
area is a critical global shipping route connecting Europe and
Asia through the Suez Canal, and the impairment of shipping
operations through the region impacts the global supply chain.
The United States Navy is leading an international coalition to
repel Houthi militant attacks through Operation Prosperity
Guardian.\30\ As threats continue against ships operating in
the region, major carriers have paused operations through the
Red Sea and the Gulf of Aden, necessitating much longer
shipping routes and increased container rates.\31\
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\26\ Id. at 6-4.
\27\ Id.
\28\ Advisory: Red Sea Disruptions Continue to Impact Global Supply
Chains, WeFreight, (Jan. 4, 2024), available at https://wefreight.com/
advisory-red-sea-disruptions-continue-to-impact-
global-supply-chains/
#: :text=The%20Red%20Sea%20disruptions%20are,their%20vessels%20in
%20this%20area.
\29\ Britney Nguyen, Maersk Extends Red Sea Shipping Pause
Indefinitely Amid Houthi Attacks, Forbes, (Jan. 2, 2024), available at
https://www.forbes.com/sites/britneynguyen/2024/01/02/maersk-extends-
red-sea-shipping-pause-indefinitely-amid-houthi-attacks/
?sh=5462f0736c66.
\30\ Release, United States Dep't of Defense, Statement of
Secretary of Defense Lloyd J. Austin III on Ensuring Freedom of
Navigation in the Red Sea, (Dec. 18, 2023), available at https://
www.defense.gov/News/Releases/Release/Article/3621110/statement-from-
secretary-of-defense-lloyd-j-austin-iii-on-ensuring-freedom-of-n/.
\31\ Lori Ann LaRocco, Maersk's Red Sea shipping pause highlights
challenges for U.S.-led efforts to protect trade, CNBC, (Jan. 2, 2024),
available at https://www.cnbc.com/2024/01/02/maersk-red-sea-pause-
shows-operation-prosperity-guardian-limits.html.
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Supply chain issues are also affected by increased migrant
traffic at the Southern border.\32\ In December 2023, United
States Customs and Border Protection (CBP) suspended rail
operations for five days in Eagle Pass and El Paso, Texas, two
of the seven freight rail ports of entry, to redirect personnel
to respond to increased levels of migrants encounters on the
Southwest border.\33\ Several organizations urged the
Administration to reopen the routes.\34\ This created concern
about its potential impact on both cross-border international
trade and American consumers.\35\
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\32\ See e.g. William C. Vantuono, Eagle Pass, El Paso Border
Crossings Reopened (Updated), Railway Age, (Sept. 26, 2023), available
at https://www.railwayage.com/freight/class-i/up-eagle-pass-border-
crossing-reopening/; Larry Avila, Rail Border Crossings Reopen at Eagle
Pass and El Paso, Texas, (Updated Dec. 22, 2023), available at https://
www.supplychaindive.com/news/railroads-urge-customs-to-reopen-eagle-
pass-el-paso-texas-railroad-cross-border-bridges/702865/.
\33\ Media Release, United States Customs and Border Protection,
Statement from CBP on Suspension of Rail Operations in Eagle Pass and
El Paso, Texas, (Dec. 17, 2023), available at https://www.cbp.gov/
newsroom/national-media-release/statement-cbp-suspension-rail-
operations-eagle-pass-and-el-paso; FRA, FRA Rep. to House and Senate
Appropriations Committees, International Border Passenger and Freight
Rail Study, (June 2017), available at https://railroads.dot.gov/sites/
fra.dot.gov/files/fra_net/17163/FRA%20-%20International%20Border
%20Passenger%20and%20Freight%20Rail%20Study%20-2017.pdf.
\34\ See e.g. Cheney Orr, Laura Gottesdiener, & Ted Hesson, Farm,
Rail companies Urge Reopening of US-Mexico Crossings Shut Over
Migrants, Reuters, (Dec. 20, 2023), available at https://
www.reuters.com/world/migrant-surge-us-mexico-border-slows-trade-
washington-seeks-
answers-2023-12-20/
#: :text=Railroad%20companies%20and%20business%20groups,
redirect%20personnel%22%20to%20process%20migrants.
\35\ Valerie Gonzalez, Two Railroad Crossings are Temporarily
Closed in Texas. Will There Be A Significant Impact on Trade?, AP,
(Dec. 21, 2023), available at https://apnews.com/article/immigration-
rail-crossings-closed-texas-d20973001fa607f228f89059b60159d9.
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IV. ADDRESSING TRANSPORTATION AND SUPPLY CHAIN CHALLENGES
Maintaining an efficient and reliable domestic supply chain
is multi-faceted; however, sustaining the Nation's
transportation infrastructure is a crucial element. While
several factors, including trade agreements, tariffs,
international conflicts, and labor fall outside of the
Committee's jurisdiction, many challenges fall under this
Committee's purview. Therefore, the Committee will assess the
implementation of laws, evaluate executive actions, and propose
solutions that alleviate challenges facing our Nation's supply
chain.
INFRASTRUCTURE INVESTMENT AND JOBS ACT (IIJA) (P.L. 117-58)
On November 15, 2021, President Biden signed IIJA into law,
representing the largest Federal investment in decades in the
United States' infrastructure.\36\ This legislation authorized
and appropriated a combined $1.2 trillion for infrastructure
programs over the five-year period from fiscal year (FY) 2022
to FY 2026, to sustain and modernize the Nation's
infrastructure, including roads, bridges, transit, railroads,
and airports, as well as energy and broadband.\37\
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\36\ IIJA, Pub. L. No. 117-58, 135 Stat. 429.
\37\ Id.
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Since IIJA's enactment, as of December 17, 2023, DOT has
indicated it has announced nearly $261.6 billion in IIJA
formula funding and grant awards to states, local governments,
transit agencies, airports, ports, and other project
sponsors.\38\ The Federal Highway Administration (FHWA) has
distributed approximately $185.5 billion under the highway
program.\39\ Analysis of FHWA data by the American Road &
Transportation Builders Association (ARTBA) indicates that
states have used these formula dollars to support more than
60,000 projects across the country, through September 30,
2023.\40\ Additionally, the Federal Transit Administration
(FTA) has distributed approximately $41 billion in transit
funding, the Federal Aviation Administration (FAA) has
announced nearly $13 billion in airport funding, and the Office
of the Secretary (OST) has announced approximately $7.5 billion
in grants for various programs.\41\
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\38\ DOT, Investment in Infrastructure and Jobs Act--Financial
Summary as of Dec. 17, 2023, (last accessed Jan. 8, 2024), available at
https://www.transportation.gov/sites/dot.gov/files/2024-01/
BIL_Status_of_Funds_Report_12-17-23.pdf [hereinafter IIJA Funding
Table].
\39\ See e.g. FHWA, Notice, Apportionment of Fed.-Aid Highway
Program (FAHP) Funds for FY 2022, (Dec. 14, 2021), available at https:/
/www.fhwa.dot.gov/legsregs/directives/notices/n4510858/; FHWA, Notice,
Apportionment of FAHP Funds for FY 2023, (Oct. 3, 2022), available at
https://www.fhwa.dot.gov/legsregs/directives/notices/n4510870/
n4510870_t1.cfm; FHWA, Notice, Apportionment of FAHP Funds for FY 2024,
(Oct. 2, 2023), available at https://www.fhwa.dot.gov/legsregs/
directives/notices/n4510880.cfm#_ftnref1; FHWA, Notice, Revised
Apportionment of FY 2022 Hwy. Infrastructure Program Funds for the
Bridge Formula Program (HIPFBFP) Pursuant to IIJA, (Apr. 8, 2022),
available at https://www.fhwa.dot.gov/legsregs/directives/notices/
n4510867.cfm; DOT, FHWA, Apportionment of FY 2023 HIPFBFP Pursuant to
IIJA, (Oct. 6, 2022), available at https://www.fhwa.dot.gov/legsregs/
directives/notices/n4510872.cfm; FHWA, Notice, Apportionment of FY 2024
HIPFBFP Pursuant to IIJA (Oct. 2, 2023), available at https://
www.fhwa.dot.gov/legsregs/directives/notices/n4510882.cfm; FHWA,
Notice, Apportionment of FY 2022 Highway Infrastructure Program Funds
for the Appalachian Development Highway System (HIPADHS) Pursuant to
IIJA, (Jan 25, 2022), available at https://www.fhwa.dot.gov/legsregs/
directives/notices/n4510862.cfm; FHWA, Notice, Apportionment of FY 2023
HIPADHS Pursuant to IIJA, (Oct. 6, 2022), available at https://
www.fhwa.dot.gov/legsregs/directives/notices/n4510874.cfm; FHWA,
Notice, Apportionment of FY 2024 HIPADHS Pursuant to IIJA, (Oct. 2,
2023), available at https://www.fhwa.dot.gov/legsregs/directives/
notices/n4510884.cfm; FHWA, Notice, Apportionment of FY 2022 Hwy.
Infrastructure Program Funds for the Nat'l Electric Vehicle
Infrastructure Formula Program (HIPFNEVI) Pursuant to IIJA, (Feb. 10,
2022), available at https://www.fhwa.dot.gov/legsregs/directives/
notices/n4510863.cfm; FHWA, Notice, Apportionment of FY 2023 HIPFNEVI
Pursuant to IIJA, (Oct. 6, 2022), available at https://
www.fhwa.dot.gov/legsregs/directives/notices/n4510873.cfm; FHWA,
Notice, Apportionment of FY 2024 HIPFNEVI Pursuant to IIJA, (Oct. 2,
2023), available at https://www.fhwa.dot.gov/legsregs/directives/
notices/n4510883.cfm; FHWA, Notice, Apportionment of Hwy.
Infrastructure Program Funds Pursuant to the DOT Appropriations Act,
2022, (May 5, 2022), available at https://www.fhwa.dot.gov/legsregs/
directives/notices/n4510866.cfm; FHWA, Notice, Apportionment of Hwy.
Infrastructure Program Funds Pursuant to the DOT Appropriations Act,
2023, (Feb. 8 2023), available at https://www.fhwa.dot.gov/legsregs/
directives/notices/n4510878.cfm; DOT, 2023 SS4A Awards, (last updated
Dec. 18, 2023), available at https://www.transportation.gov/grants/
ss4a/2023-awards.
\40\ ARTBA, Highway Dashboard, Tracking Infrastructure IIJA Highway
and Bridge Resources, (last accessed Jan. 8, 2024), available at
https://www.artba.org/economics/highway-dashboard-iija/.
\41\ See DOT, FTA, Table 1. FY 2023 FTA Appropriations and
Apportionments for Grant Programs (Full Year), (Last updated Feb. 6,
2023), available at https://www.transit.dot.gov/funding/apportionments/
table-1-fy-2023-fta-appropriations-and-apportionments-grant-programs-
full; DOT, FTA, Table 1. FY 2022 FTA Appropriations and Apportionments
for Grant Programs (Full Year), (Last updated May 4, 2022), available
at https://www.transit.dot.gov/funding/apportionments/table-1-fy-2022-
fta-appropriations-and-apportionments-grant-programs-full; DOT, FY 2022
Mega Grant Awards, (last updated Jan. 30, 2023), available at https://
www.transportation.gov/sites/dot.gov/files/2023-01/
MEGA%20FY%202023%20Combined%20Fact%20Sheet.pdf; DOT, RAISE 2022 Award
Fact Sheets, (last updated Sept. 20, 2022), available at https://
www.transportation.gov/sites/dot.gov/files/2022-09/
RAISE%202022%20Award%20Fact
%20Sheets_1.pdf; DOT, RAISE 2023 Award Fact Sheets, (last updated June
30, 2023), available at https://www.transportation.gov/sites/dot.gov/
files/2023-06/RAISE%202023%20Fact
%20Sheets_2.pdf; Press Release, DOT, Biden-Harris Administration Funds
Innovative Projects to Create Safer, More Equitable, Transportation
Systems, (Mar. 21, 2023), available at https://www.transportation.gov/
briefing-room/biden-harris-administration-funds-innovative-projects-
create-safer-more-equitable; DOT, SS4A 2022 Awards, (last updated Apr.
19, 2023), available at https://www.transportation.gov/grants/ss4a/
2022-awards; DOT, FHWA, Culvert AOP Program Grant Recipients, (last
updated Aug. 16, 2023), available at https://www.fhwa.dot.gov/
engineering/hydraulics/culverthyd/aquatic/2022recipients.cfm; FAA,
Bipartisan Infrastructure Law--FY 24 Airport Infrastructure Grant (AIG)
Program Formulation Allocations, (last accessed Jan. 8, 2024),
available at https://www.faa.gov/sites/faa.gov/files/
FY24_AIG_Allocations.pdf; DOT, 2023 SS4A Awards, (last updated Dec. 18,
2023), available at https://www.transportation.gov/grants/ss4a/2023-
awards.
---------------------------------------------------------------------------
Despite historic levels of investment some concerns exist
related to the impact of IIJA funds. Recent analysis examined
IIJA obligations to assess the rate at which the funds are
``being put to work.'' \42\ For example, the analysis showed
that while IIJA provided a 31.5 percent increase in new
contract authority for the mass transit Formula and Bus Grants
account, new obligations in 2023 for that account were only six
percent higher than 2021.\43\ The analysis explains the spend
out rate of these funds as transit agencies using supplemental
emergency funding provided by Congress, which expire in a
shorter timeframe, before obligating their regular formula
funds under IIJA.\44\ Further, the analysis noted that several
other IIJA programs were progressing slowly.\45\
---------------------------------------------------------------------------
\42\ Jeff Davis, Two Years In, How Quickly is IIJA Funding Being
Put To Work?, Eno Ctr. for Transp., (Dec. 1, 2023), available at
https://enotrans.org/article/two-years-in-how-quickly-is-iija-funding-
being-put-to-work/.
\43\ Id.
\44\ Id.
\45\ Id.
---------------------------------------------------------------------------
Additionally, while inflation has moderated overall, after
spiking in June 2022, inflation within the construction
industry remains concerning.\46\ Within the construction
industry, inflation can result in higher costs of construction
materials and other resources necessary for project completion
including higher cost of fuel, equipment, technology, labor,
and transportation.\47\ Notably, highway construction costs had
risen by 59.3 percent, when compared to the end of 2020.\48\
Recently released data indicates that the cost of building
highways rose 3.8 percent when compared to the previous
quarter.\49\
---------------------------------------------------------------------------
\46\ See Megan Henny, Inflation Rises by 3.2 Percent, Less than
Expected, But High Prices Persist, Fox Business, (Nov. 14, 2023),
available at https://www.foxbusiness.com/economy/cpi-inflation-october-
2023; United States Bureau of Labor Stat., Consumer Prices Up 9.1
Percent Over the Year ended June 2022, Largest Increase in 40 Years,
(July 18, 2022), available at https://www.bls.gov/opub/ted/2022/
consumer-prices-up-9-1-percent-over-the-year-ended-june-2022-largest-
increase-in-40-years.htm; United States Bureau of Labor Stat., Consumer
Price Index Historical Tables for U.S. City Average, (last updated July
2023), available at https://www.bls.gov/regions/mid-atlantic/data/
consumerpriceindexhistorical_us_table.htm; Jeff Davis, Highway
Construction Cost Inflation Did Not Slow in 2Q 2023--15.3% Annual Rate,
Eno Ctr. for Transp., (Dec. 21, 2023), available at https://
enotrans.org/article/highway-construction-cost-inflation-did-not-slow-
in-2q-2023-15-3-annual-rate/.
\47\ Evan McDowell, How Does Inflation Affect the Construction
Industry?, Austin Nichols Technical Search, (May 1, 2023), available at
https://www.austintec.com/
how-inflation-affect-construction-industry/
#: :text=Additionally%2C%20raw
%20materials%20such%20as,companies%20who%20order%20from%20them; How
Does Inflation Affect Construction Industry?, The Constructor,
available at https://theconstructor.org/construction/inflation-affect-
construction-industry/565090/.
\48\ Id.
\49\ Jeff Davis, Highway Construction Cost Inflation Did Not Slow
in 2Q 2023--15.3% Annual Rate, Eno Ctr. For Transp., (Dec. 21, 2023),
available at https://enotrans.org/article/highway-construction-cost-
inflation-did-not-slow-in-2q-2023-15-3-annual-rate/.
---------------------------------------------------------------------------
OFFICE OF MULTIMODAL FREIGHT INFRASTRUCTURE AND POLICY
In an effort to tackle additional factors impacting the
supply chain, Congress implemented several policies, however,
DOT has not yet executed them all. For example, IIJA directed
DOT to establish the Office of Multimodal Freight
Infrastructure and Policy. The Office was formally announced on
November 27, 2023, and while a Deputy Assistant Secretary is in
place in the office, the Department has yet to name an
Assistant Secretary to lead the office, as required by
IIJA.\50\ Although historic backlogs are no longer the Nation's
top supply chain concern, challenges remain within the network
and addressing these issues will allow America to maintain
economic competitiveness.\51\ The Office of Multimodal Freight
Infrastructure and Policy will likely play a significant role
in coordinating the Federal response to future supply chain
challenges, as well as engage industry and states in addressing
these issues.\52\
---------------------------------------------------------------------------
\50\ Press Release, DOT, Biden-Harris Administration Announces New
Freight Office and Major Progress Strengthening Supply Chains, (Nov.
27, 2023), available at https://www.transportation.gov/briefing-room/
biden-harris-administration-announces-new-freight-office-and-major-
progressIIJA; Dashboard, supra note 5.
\51\ Letter from Agriculture Transp. Coalition, et al., to the Hon.
Pete Buttigieg, Sec'y, DOT (Aug. 30, 2023) (on file with Comm.).
\52\ Id.
---------------------------------------------------------------------------
OCEAN SHIPPING REFORM ACT & OCEAN SHIPPING REFORM IMPLEMENTATION ACT
In response to supply chain challenges, in June of 2022,
the Ocean Shipping Reform Act (P.L. 117-146) was signed into
law.\53\ This legislation provided expanded authorities to the
Federal Maritime Commission (FMC), which regulates ocean
shipping, to protect and ensure fairness for United States
shippers as they engage in international trade.\54\ This
Congress, the Committee continued its work to address supply
chain challenges by favorably reporting H.R. 1836, the Ocean
Shipping Reform Implementation Act, legislation that builds
upon the authorities in the Ocean Shipping Reform Act.\55\ This
legislation would limit foreign influence over United States
supply chains and updates Federal policy governing
international ocean shipping.\56\
---------------------------------------------------------------------------
\53\ Pub. L. No. 117-146, 136 Stat. 1272.
\54\ Id.
\55\ Ocean Shipping Reform Implementation Act, H.R. 1836, 118th
Cong. (2023).
\56\ Id.
---------------------------------------------------------------------------
V. WITNESSES
LMr. Stephen A. Edwards, Chief Executive Officer
and Executive Director, Virginia Port Authority
LMr. Roger Millar, Secretary of Transportation,
Washington State Department of Transportation
LMr. Jeffrey G. Tucker, Chief Executive Officer,
Tucker Company Worldwide, on behalf of Transportation
Intermediaries Association (TIA)
LMs. Lauren Benford, Controller, Reiman
Corporation, on behalf of Associated General Contractors of
America (AGC)
THE STATE OF TRANSPORTATION
----------
WEDNESDAY, JANUARY 17, 2024
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 10 a.m., in room
2167 Rayburn House Office Building, Hon. David Rouzer (a
majority member of the committee) presiding.
Mr. Rouzer. The Committee on Transportation and
Infrastructure will come to order.
I ask unanimous consent that the chairman be authorized to
declare a recess at any time during today's hearing.
Without objection, so ordered.
As a reminder, if Members insert a document into the
record, please also email it to [email protected].
Again, that's [email protected].
Obviously, I am not Sam Graves. The chairman is tied up
trying to get to DC like so many people are, and so, I have
been asked to fill in in his stead.
I now recognize myself for the purposes of an opening
statement for 5 minutes.
OPENING STATEMENT OF HON. DAVID ROUZER OF NORTH
CAROLINA, A MAJORITY MEMBER, COMMITTEE ON TRANS-
PORTATION AND INFRASTRUCTURE
Mr. Rouzer. We are here today to discuss the state of the
transportation network and our Nation's ability to effectively
and efficiently move goods through our supply chain. To achieve
this goal, we must make targeted investments to improve the
infrastructure our shippers, truckers, and freighters rely on.
We have work to do to improve our transportation network, and
we have a responsibility to ensure that taxpayer funds are
directed to projects that strengthen this system.
Despite the clear needs of our system, the administration
continues to push its green agenda through onerous regulations
onto the American people instead of focusing its efforts on
promptly distributing funds to projects that will meaningfully
improve our roads, bridges, and ports. A recent example of
these misguided regulations is the Federal Highway
Administration's latest greenhouse gas emissions rule,
something Congress expressly left out of the Infrastructure
Investment and Jobs Act.
However, our infrastructure system is just one factor to
consider as we assess the state of transportation in the
country. We also have to examine our supply chain. The pandemic
previously exposed vulnerabilities in our supply chain, and
today's global conflicts are presenting new and complex
challenges we must address, as well. For example, the United
States Navy is currently leading the international coalition to
repel Houthi militant attacks that are threatening a critical
global shipping route in the Red Sea. These threats have forced
major carriers to opt for longer, more costly shipping routes
as they pause operations in the area.
And closer to home, the migrant crisis at our southern
border has led to repeated closures of rail border crossings.
As a result, rail operations were suspended, halting the
movement of critical goods between the United States and Mexico
in order to process the influx of migrant crossings.
I look forward to hearing from each of our witnesses today
about the realities on the ground. The committee stands ready
to provide dozens--pardon me. We will have dozens of solutions,
but the committee stands ready to provide solutions. In May of
last year, we advanced more than a dozen bills targeting supply
chain challenges. The testimony provided today will give us
greater insight into what is working and what is not.
We look forward to working with you to strengthen our
Nation's transportation network.
[Mr. Rouzer's prepared statement follows:]
----------
Prepared Statement of Hon. David Rouzer, a Representative in Congress
from the State of North Carolina, and a Majority Member, Committee on
Transportation and Infrastructure
We are here today to discuss the state of our transportation
network and our nation's ability to effectively and efficiently move
goods through our supply chain.
To achieve this goal, we must make targeted investments to improve
the infrastructure our shippers, truckers, and freighters rely on.
We have work to do to improve our transportation network, and we
have a responsibility to ensure that taxpayer funds are directed to
projects that strengthen this system.
Despite the clear needs of our system, the Administration continues
to push its green agenda through onerous regulations onto the American
people instead of focusing its efforts on promptly distributing funds
to projects that will meaningfully improve our roads, bridges, and
ports.
A recent example of these misguided regulations is the Federal
Highway Administration's latest greenhouse gas emissions rule,
something Congress expressly left out of the Infrastructure Investment
and Jobs Act (IIJA).
However, our infrastructure system is just one factor to consider
as we assess the state of transportation in the country.
We also have to examine our supply chain. The pandemic previously
exposed vulnerabilities in our supply chain, and today's global
conflicts are presenting new and complex challenges we must address.
For example, the United States Navy is currently leading the
international coalition to repel Houthi militant attacks that are
threatening a critical global shipping route in the Red Sea. These
threats have forced major carriers to opt for longer, more costly
shipping routes, as they pause operations in the area.
And closer to home, the migrant crisis at our southern border has
led to repeated closures of rail border crossings. As a result, rail
operations were suspended--halting the movement of critical goods
between the United States and Mexico in order to process the influx of
migrant crossings.
I look forward to hearing from each of our witnesses today about
the realities on the ground.
This committee stands ready to provide solutions--in May of last
year we advanced more than a dozen bills targeting supply chain
challenges. The testimony provided today will give us greater insight
into what's working and what's not.
We look forward to working with you to strengthen our nation's
transportation network.
Mr. Rouzer. I now recognize Ranking Member Larsen for an
opening statement for 5 minutes.
OPENING STATEMENT OF HON. RICK LARSEN OF WASH-
INGTON, RANKING MEMBER, COMMITTEE ON TRANSPOR-
TATION AND INFRASTRUCTURE
Mr. Larsen of Washington. Thank you, Chair Rouzer, for
holding this hearing on the state of transportation. And if Sam
needs to call anyone about getting into DC, I am sure he knows
someone. It has been a rough, rough time for a lot of travelers
over the last week, for sure.
This committee has a great story to tell when it comes to
transportation, and I am pleased that today's hearing gives us
a chance to do that. We will find the state of transportation
is strong, thanks to historic levels of transportation
investment. Last Congress, this committee answered the calls of
States, local and Tribal governments, transit agencies, rail,
airports, and ports to provide a much-needed boost to the
transportation network.
Investments from the Bipartisan Infrastructure Law and the
Inflation Reduction Act have helped improve the economy and the
state of transportation. By passing these bills, Congress gave
the construction industry longer term stability and certainty.
As Ms. Benford's testimony points out, if Congress had not
passed the BIL, contractors ``would likely have seen a cut of
20 to 30 percent in the work they were able to bid on.''
Congress also gave communities across the country the means
to take on game-changing projects. In the first years of the
BIL, U.S. DOT distributed over $262 billion for States,
localities, transit agencies, railroads, airports, and ports to
carry out upgrades and priorities, and more is on the way. This
includes $185 billion in highway funds, $41 billion in transit
funds, and nearly $13 billion in airport funds.
BIL funds have already supported over 40,000 projects that
the U.S. DOT administers, and in the 2 years since enactment,
States have invested Federal highway dollars into tens of
thousands of additional projects. And today, there is at least
one new project in every congressional district, thanks to the
BIL. Projects across the country mean construction jobs in
every region of the country, jobs with good wages, benefits,
and working conditions. The BIL investment also means more jobs
in transit, trucking, aviation, rail, and maritime sectors.
The challenge now is to build and maintain a sufficient
pool of skilled workers to tackle all the project opportunities
offered by the BIL, and Mr. Millar's testimony from the great
State of Washington notes that the entire transportation
industry is facing workforce challenges.
The BIL includes over $800 million in dedicated funding to
train workers for in-demand jobs in manufacturing,
semiconductors, and more. It also includes new flexibility for
State DOTs to use highway formula funds for apprenticeships,
pre-apprenticeships, and community college and vocational
school partnerships. I look forward to learning what more
Congress can do to support workforce development and training.
The state of freight transportation is also strong, thanks
to congressional and administrative actions in response to
global shocks in the aftermath of the pandemic. The chair
mentioned the work that this committee has done specifically
over the last year, and BIL funding is helping, as well,
helping ports move cargo more efficiently, reduce emissions,
and compete globally.
BIL funding is also helping to tackle the biggest surface
transportation bottlenecks. The passage and implementation of
the bipartisan Ocean Shipping Reform Act of 2022, which
originated in this committee, thanks to Mr. Johnson and Mr.
Garamendi, has also helped to support a stronger supply chain.
As we will hear in Mr. Edwards' testimony today, the
international supply chain normalized in 2023. Shipping
container rates have fallen, port congestion has eased, shipper
complaints have received quicker action and positive outcomes,
and the Federal Maritime Commission has enhanced fee fairness
and transparency. These reforms mean that when new
international challenges arise and strain the global and
domestic supply chain, the U.S. will be better prepared to
react.
So, today's hearing is a welcome review of how well
infrastructure investments are working. But keeping our
transportation systems in good repair, resilient, and ready for
the future freight and passenger demand will require an ongoing
investment. Reliable and robust investment in infrastructure is
key to the long-term success and sustainability of our
transportation systems and supply chain networks for decades to
come, and I am committed to working with the chair of the full
committee--and even his substitute here today--to ensure this
committee continues to provide the necessary resources to
support the economy, the traveling public, and America's
transportation workers.
And I want to thank the witnesses for being here today to
help us out.
[Mr. Larsen of Washington's prepared statement follows:]
----------
Prepared Statement of Hon. Rick Larsen of Washington, Ranking Member,
Committee on Transportation and Infrastructure
Thank you, Chairman Rouzer, for holding this hearing on ``The State
of Transportation.''
This Committee has a great story to tell when it comes to
transportation. I am pleased that at today's hearing, we will find that
the state of transportation is strong, thanks to historic levels of
infrastructure investment.
Last Congress, this Committee answered the call of states, local
and Tribal governments, transit agencies, railroads, airports and ports
to provide a much-needed boost to transportation networks.
Investments from the Bipartisan Infrastructure Law (BIL) and the
Inflation Reduction Act (IRA) have helped improve the economy and the
state of transportation.
By passing these bills, Congress gave the construction industry
longer-term stability and certainty. As Ms. Benford's testimony points
out, if Congress had not passed the BIL, contractors ``would likely
have seen a cut of 20-30 percent in the work they were able to bid
on.''
Congress also gave communities across the country the means to take
on game-changing projects. In the first two years of the BIL, U.S. DOT
distributed over $262 billion for states, localities, transit agencies,
railroads, airports and ports to carry out upgrades and priorities--and
more is on the way. This includes $185 billion in highway funds, $41
billion in transit funds, and nearly $13 billion in airport funds.
BIL funds have already supported over 40,000 projects administered
by U.S. DOT. In the two years since enactment, states have invested
federal highway dollars into tens of thousands of additional projects.
Today, there is at least one new project in every Congressional
district thanks to the BIL.
Projects across the country means construction jobs in every region
of the country--jobs with good wages, benefits, and working conditions.
BIL investment also means more jobs in the transit, trucking, aviation,
rail and maritime sectors.
The challenge now is to build and maintain a sufficient pool of
skilled workers to tackle all the project opportunities offered by the
BIL. Mr. Millar's testimony, from the great State of Washington, notes
that the entire transportation industry is facing workforce challenges.
The BIL includes over $800 million in dedicated funding to train
workers for in-demand jobs in manufacturing, semiconductors and more.
It also includes new flexibility for state DOTs to use highway
formula funds for apprenticeships, pre-apprenticeships, and community
college and vocational school partnerships. I look forward to learning
what more Congress can do to support workforce development and
training.
The state of freight transportation is also strong thanks to
Congressional and Administrative actions in response to global shocks
in the aftermath of the pandemic. The Chairman mentioned the work that
this Committee has done specifically over the last year and BIL funding
is helping as well.
Funding is helping ports move cargo more efficiently, reduce
emissions and better compete globally. BIL funding is also helping
tackle the biggest surface transportation bottlenecks.
The passage and implementation of the Ocean Shipping Reform Act of
2022 (OSRA), which originated in this Committee thanks to Mr. Johnson
and Mr. Garamendi, has helped support a stronger supply chain.
As we will hear in Mr. Edwards' testimony today, the international
supply chain normalized in 2023. Shipping container rates have fallen,
port congestion has eased, shipper complaints have received quicker
action and positive outcomes, and the Federal Maritime Commission has
enhanced fee fairness and transparency.
These reforms mean that when new international challenges arise and
strain the global and domestic supply chain, the U.S. will be better
prepared to react.
Today's hearing is a welcome review of how well infrastructure
investments are working.
But keeping our transportation systems in good repair, resilient,
and ready for future freight and passenger demand will require ongoing
investment.
Reliable and robust investment in infrastructure is key to the
long-term success and sustainability of our transportation systems and
supply chain networks for decades to come.
I am committed to working with Chairman Graves to ensure this
Committee continues to provide the necessary resources to support the
economy, the traveling public, and America's transportation workers.
Thank you to our witnesses for being here today to help us out.
Mr. Larsen of Washington. And, Mr. Chair, before we get
started, if I could just ask an indulgence to do a quick
introduction of Mr. Millar.
Mr. Rouzer. So ordered.
Mr. Larsen of Washington. Thank you. We are going to hear
from the secretary of transportation of the Washington State
Department of Transportation, Roger Millar, who is here today,
despite our own State legislature just having opened up their
session. So, he has probably got time to testify, answer
questions, and get the heck out of Dodge, get back home.
But he was our deputy secretary in 2015 and appointed
secretary in August of 2016. He oversees an agency that is the
steward of a complex, multimodal transportation system and
responsible for ensuring that people and goods move safely and
efficiently.
I won't go into his full biography, but he has been active
in groups that are very familiar to us, including being the
past president of AASHTO, he serves on the board of directors
there, as well as is actively involved in a variety of
engineering groups, intelligent transportation system groups,
as well as a variety of other infrastructure.
So, it is great to have Roger here in town for the few
moments he could spare with us to help us out.
So, with that, I yield back.
Mr. Rouzer. I thank the gentleman.
I ask unanimous consent to enter into the record a letter
from the American Traffic Safety Services Association dated
January 17, 2024.
Without objection, so ordered.
[The information follows:]
----------
Statement of the American Traffic Safety Services Association,
Submitted for the Record by Hon. David Rouzer
The American Traffic Safety Services Association (ATSSA)
appreciates the opportunity to submit this Statement for the Record to
the House Committee on Transportation and Infrastructure (Committee)
regarding the hearing entitled ``The State of Transportation.''
Given the important role that the Infrastructure Investment and
Jobs Act (IIJA) has in meeting this nation's transportation investment
needs, the Committee is to be commended for providing the necessary
oversight of its implementation.
Incorporated in 1970, ATSSA is an international trade association
with more than 1,500 members who are focused on advancing roadway
safety. ATSSA members manufacture, distribute, and install roadway
safety infrastructure devices such as guardrail and cable barrier,
traffic signs and signals, pavement markings and high friction surface
treatments, and work zone safety devices, among many others. As a
leader in roadway safety infrastructure, ATSSA was the first non-
governmental organization to adopt a Towards Zero Deaths vision and
ATSSA members are committed to making zero fatalities a reality
nationwide.
ATSSA members are grateful to Congress for the emphasis on safety
in the IIJA. For example, the IIJA funds the Highway Safety Improvement
Program (HSIP) at $16.8 billion over five years, which represents an
important and much-needed increase over prior authorization
legislation. The HSIP provides dedicated funding to help state DOTs and
local governments meet today's roadway infrastructure safety needs, be
proactive in preventing future roadway hazards, and reduce highway
fatalities and injuries.
But just as important as IIJA federal funding is for meeting
roadway safety needs across the country and reducing traffic
fatalities, the implementation of many IIJA policy provisions can be
just as impactful. One policy area that continues to cause great
concern to ATSSA members is the new Build America, Buy America (BABA)
requirements.
The Office of Management and Budget (OMB) has issued final guidance
related to the updated BABA provisions of the IIJA. This new guidance
went into effect on October 23rd and since that time, there has been
considerable confusion across the country on how this guidance will be
implemented by state departments of transportation (state DOTs).
After the effective date of the OMB final guidance, ATSSA has heard
from our members in various states about the lack of clarity and
consistency in how state DOTs will implement new BABA requirements. The
lack of uniformity across states is not only creating considerable
confusion but is leading to a fear that the BABA implementation will
result in different requirements and certification processes for all 50
states.
OMB clearly anticipated the possible need for further Federal
agency implementation guidance and information, stating in the August
23rd Federal Register Guidance for Grant Agreements that: ``It is not
possible for OMB to issue comprehensive guidance on every issue that
may arise for different Federal agencies in the context of directly
implementing their own unique Federal financial assistance programs . .
.''.\1\
---------------------------------------------------------------------------
\1\ Office of Management and Budget Federal Register Guidance for
Grant Agreement, August 23, 2023: https://www.govinfo.gov/content/pkg/
FR-2023-08-23/pdf/2023-17724.pdf
---------------------------------------------------------------------------
The OMB guidance goes on further to say: Federal agencies, in
directly implementing BABA, may issue further guidance and provide
further information to their recipients and other stakeholders on their
own Federal financial assistance programs for infrastructure.\2\
---------------------------------------------------------------------------
\2\ Office of Management and Budget Federal Register Guidance for
Grant Agreement, August 23, 2023: https://www.govinfo.gov/content/pkg/
FR-2023-08-23/pdf/2023-17724.pdf
---------------------------------------------------------------------------
Given the impact of this final OMB guidance on ATSSA members, we
continue to ask that the U.S. Department of Transportation (USDOT)
provide the critically necessary clarity to minimize disruptions and
address concerns being raised across the country. This additional
clarity would not only benefit ATSSA members but state DOTs and other
transportation industry stakeholders.
ATSSA members are responsible for manufacturing and installing
critical, life-saving infrastructure on our nation's roadways and they
work hard every day to improve roadway safety. By USDOT not yet
providing this additional guidance related to the implementation of the
BABA provisions, there could be unnecessary delays, cancellations, or
increased costs on roadway infrastructure projects--a result that no
one wants to see.
With the construction season fast approaching in all parts of the
country, it is important that every effort be made to assist state DOTs
and the transportation industry in meeting the compliance requirements
of the BABA provisions. We are currently at a critical time in the
manufacturing process when inventory is stockpiled in preparation for
hundreds of infrastructure projects being planned in every state.
However, the lack of consistency among state DOTs on implementation of
the BABA provisions could lead manufacturers to delay producing
critical products because of uncertainty related to product approval
and inclusion on various state Approved Products Lists. This
uncertainty for manufacturers could lead to additional product
shortages and could impact important lifesaving roadway safety
infrastructure projects.
ATSSA recognizes the importance that this Committee places on
safety--both for users of the transportation system and the
construction workers who make our roadways safer every day. As this
Committee continues its oversight of the IIJA, ATSSA members ask for
your assistance in ensuring the necessary BABA information and clarity
is made available. ATSSA stands ready to assist our partners in
Congress, USDOT and elsewhere in this important task.
Mr. Rouzer. I would like to thank our witnesses for being
here today. We are looking very much forward to your testimony.
Briefly, I would like to take a moment to explain our
lighting system to you. I think you know it pretty well, but
there are three lights, obviously. Green means go, yellow means
your time is coming to an end, and then red means wrap up just
as quickly as you possibly can.
I ask unanimous consent that the witnesses' full statements
be included in the record.
Without objection, so ordered.
I also ask unanimous consent that the record of today's
hearing remain open until such time as our witnesses have
provided answers to any questions that may be submitted to them
in writing.
Without objection, so ordered.
I also ask unanimous consent that the record remain open
for 15 days for additional comments and information submitted
by Members or witnesses to be included in the record of today's
hearing.
Without objection, so ordered.
As your written testimony has been made part of the record,
the committee asks that each of you keep your oral remarks to 5
minutes, if possible.
With that, Mr. Stephen Edwards, CEO and executive director
of the Virginia Port Authority, you are recognized for up to 5
minutes.
If you can, turn your microphone on and maybe bring it
closer to you, as well.
Mr. Edwards. Thank you so much.
TESTIMONY OF STEPHEN A. EDWARDS, CHIEF EXECUTIVE OF-
FICER AND EXECUTIVE DIRECTOR, VIRGINIA PORT AU-
THORITY; ROGER MILLAR, PE, FASCE, FAICP, SECRETARY,
WASHINGTON STATE DEPARTMENT OF TRANSPORTATION;
JEFFREY G. TUCKER, CHIEF EXECUTIVE OFFICER, TUCKER
COMPANY WORLDWIDE, INC., ON BEHALF OF THE TRANS-
PORTATION INTERMEDIARIES ASSOCIATION; AND LAUREN
BENFORD, CONTROLLER, REIMAN CORPORATION, ON BE-
HALF OF THE ASSOCIATED GENERAL CONTRACTORS OF
AMERICA
TESTIMONY OF STEPHEN A. EDWARDS, CHIEF EXECUTIVE OF-
FICER AND EXECUTIVE DIRECTOR, VIRGINIA PORT AU-
THORITY
Mr. Edwards. So, thank you, Chairman Rouzer, Ranking Member
Larsen, and distinguished members of the House Transportation
and Infrastructure Committee, for inviting me to participate in
today's hearing. My name is Stephen Edwards and, as mentioned,
I am the CEO and executive director of the Virginia Port
Authority.
The port authority operates five marine terminals and one
inland rail port. We are the third largest container port on
the east coast. As an operating port, we have the
responsibilities of a port authority and a marine terminal
operator; we manage asset procurement and maintenance and
technology systems; and we operate the Hampton Roads Intermodal
Chassis Pool.
The Port of Virginia's tagline is ``America's Most Modern
Gateway,'' and we are proud of our ranking as the highest
performing major North American container port in both 2021 and
2022, at a time of stress in supply chains. During this period,
we were the fastest growing major American port in 2021, and
over the 2-year period, second behind Houston.
Presently, I have responsibility for a $1.4 billion gateway
investment program, including deepening and widening channels
in partnership with the Army Corps, expansion of semi-automated
container capacity, berth strengthening, increased crane
capability, advanced rail, and an offshore wind hub. And this
is coupled with a State investment of circa $5 billion of
capital improvements in tunnels, roads, and private-sector
investment in logistics parks. In totality, we really take the
view of sea buoy to last-mile delivery, and from farm to ocean.
As a port, as the largest east coast rail hub, we service
all of the Ohio Valley and Midwest States and further west, and
our truck market largely services Virginia, North Carolina,
Maryland, Pennsylvania, and West Virginia. This month, we
announced that the port is powering our electricity needs with
100 percent clean power.
If I turn to the supply chain and performance, it has been
well documented that the international supply chain experienced
stress in 2021 and 2022, which impacted gateways to differing
degrees, and in certain ports, harmed exporters. The Port of
Virginia was pleased to operate to a high level in this period.
Our operating model was capable to deliver good service and
adjust to many challenges.
Overall, the international intermodal supply chain
normalized across the Nation in 2023. Dwell times for cargo
reduced, resulting in lower yard utilizations, greater chassis
availability, and now the opportunity to invest in capacity
expansion within facilities, and international freight rates
have reduced to close to pre-pandemic levels.
Over the course of the last 5 years, the higher growth
market for east coast ports have been the Indian subcontinent,
Middle East, and Southeast Asia, while Northeast Asia remains
the largest trade lane by volume. These markets are served by
the largest ships in the world, and this means improved
navigation channels required stronger berths, crane capability,
and modern operating ports. The work this committee is doing to
pass the Water Resources Development Act this year is essential
to maintaining U.S. port competitiveness, including a needed
project modification for Norfolk Harbor and channels.
If I can turn to the international challenges of today, the
Panama Canal first is experiencing a severe drought which has
restricted vessel transits. Today, the acute need for transit
means vessels must make their reserved slots, and port
operators need to ensure vessels to pass on time. The canal is
presently transiting 22 to 24 vessels per day, compared to a
normal 36 to 40. Vessel delays differ by operator. The largest
container vessel users of the canal who historically reserved
slots may not be delayed, but others are experiencing severe
delay or are paying much higher transit fees to secure their
slots. Water levels historically do not rise until June.
Fortunately, better than expected November rainfall has not
required the Panama Canal to further reduce.
If I turn to the Red Sea, the recent attacks on merchant
shipping in the Red Sea has resulted in most container vessels
diverting to routes around Africa. Initially, this has
disrupted schedules for Asia-North Europe, Asia-Mediterranean,
and Asia-east coast services. The other impact has been a delay
in return of container supply to Asia, which has in part
contributed to supply constraints and an increase in freight
rates on all trade lanes from Asia.
Fuel prices have not increased. This is important because
as the shipping lines plan for around Africa voyages, the
increased vessel and fuel costs can be offset by the decrease
in Suez Canal fees. This is particularly true for Southeast
Asia to U.S. east coast services. It is not the same for Asia
to North Europe or Asia to the Mediterranean, where deviation
and the European Union Emissions Trading System increases
voyage costs on longer voyages.
What must be remembered is that vessels need to be sourced
and positioned to fill in weekly schedules. This, along with
increased at-sea time for container box fleets, tightens the
supply side of assets. This tightening of supply may be felt
across global trade lanes as vessels and containers are
repositioned to where they are most needed.
Finally, protecting freedom of navigation in all waters is
a requirement of free and fair global trade. On behalf of the
Port of Virginia and my colleagues, I recognize the
extraordinary service of our men and women in the military who
are active in the Red Sea, many of whom are, of course,
deployed from our port.
Thank you, and I would be glad to answer questions the
committee may have.
[Mr. Edwards' prepared statement follows:]
----------
Prepared Statement of Stephen A. Edwards, Chief Executive Officer and
Executive Director, Virginia Port Authority
Background
Thank you, Chairman Graves, Ranking Member Larsen, and
distinguished members of the House Transportation and Infrastructure
Committee for inviting me to participate in today's hearing. My name is
Stephen Edwards, and I am the CEO and Executive Director of the
Virginia Port Authority.
The Virginia Port Authority (VPA) is a political subdivision of the
Commonwealth of Virginia. The VPA operates five marine terminals and
one inland rail port. We are the third largest container port on the
East Coast. As an operating port we have the responsibilities of a port
authority and a marine terminal operator; we manage asset procurement
and maintenance and technology systems; and we operate the Hampton
Roads Chassis Pool--a best in class intermodal marine chassis fleet.
The Port of Virginia's tag line is ``America's Most Modern
Gateway''. We are proud of our ranking as the highest performing major
North American container port in both 2021 and 2022 \1\ at a time of
stress in supply chains. During this period we were the fastest growing
American container port in 2021, and over the two year period, second
behind Houston.
---------------------------------------------------------------------------
\1\ World Bank: Ports greater than 1 million TEU
---------------------------------------------------------------------------
Presently we have responsibility for a $1.4 billion gateway
investment program. This program includes deepening and widening
channels (in partnership with the Army Corp of Engineers), expansion of
our semi-automated container capacity, berth strengthening, increased
crane capability, advanced rail, and an offshore wind hub. This is
coupled with a regional $5 billion capital investment in improved
tunnels and major roads and significant private sector investment in
logistics parks. In totality, these investments extend from sea buoy to
last mile delivery and from farm to ocean.
The port is the largest East Coast rail hub and serves cargoes to
and from Ohio, Illinois, Missouri, Michigan, Kentucky, Tennessee and
markets further West. Our truck market largely serves Virginia, North
Carolina, Maryland, Pennsylvania, and West Virginia.
This month we announced that the port is powering our electricity
needs with 100% clean power.
Supply Chain Performance
It has been well documented that the international supply chain
experienced stress in 2021 and 2022. There were many causes by example,
overseas zero COVID policy impacting factory production, just in case
vs just in time delivery to overcome production risk, but most notably
the surge in domestic goods consumption resulting in high import
levels, longer cargo dwell times and staging into warehousing and rail
facilities, which impacted gateways to differing degrees and in certain
ports harmed exporters.
The Port of Virginia was pleased to operate to a high level in this
period. Our operating model was capable to deliver good service metrics
and adjust to the many challenges.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Overall the international intermodal supply chain normalized across
the nation in 2023. Dwell times for cargo reduced, resulting in lower
yard utilizations, greater chassis availability, and the opportunity to
invest in capacity expansion within facilities, and international
freight rates have returned to close to pre-pandemic levels.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Over the course of the last five years the higher growth markets
for East Coast ports by trade lane are the Indian Sub-Continent/Middle
East and South East Asia while North East Asia remains the largest
trade lane by volume. These markets are served via the largest ships
presently calling the East Coast at 16,000TEU+ and reflect the need for
ultra large container vessel capability. This means improved navigation
channels, stronger berths, increased crane capability, and modern
operating terminals. The work this committee is doing to pass the Water
Resources Development Act this year is essential to maintaining US port
competitiveness, including a needed project modification for Norfolk
Harbor and Channels.
----------------------------------------------------------------------------------------------------------------
2022 vs 2023 vs
USEC Volume (Loaded TEUs, Millions) 2019 2020 2021 2022 2023 2020 2019
----------------------------------------------------------------------------------------------------------------
NORTH EAST ASIA..................................... 5.35 5.32 5.83 5.82 5.02 9.3% -6.2%
NORTH EUROPE........................................ 2.76 2.54 2.83 2.82 2.53 11.3% -8.2%
SOUTH EAST ASIA..................................... 2.07 2.29 2.52 2.69 2.58 817.9% 24.4%0
CARIBBEAN / CENTRAL AMERICA......................... 2.25 2.14 2.37 2.26 2.03 5.8% -9.8%
INDIAN SUB-CONTINENT / MIDDLE EAST.................. 1.69 1.57 2.03 2.16 1.99 837.8% 18.0%0
MEDITERRANEAN....................................... 1.65 1.65 1.93 1.93 1.65 16.9% -0.1%
SOUTH AMERICA....................................... 1.27 1.26 1.40 1.39 1.23 10.7% -3.2%
AFRICA.............................................. 0.35 0.31 0.37 0.34 0.32 9.3% -7.0%
AUSTRALIA / NEW ZEALAND............................. 0.18 0.17 0.19 0.22 0.19 30.3% 7.5%
GREENLAND........................................... 0.03 0.03 0.05 0.03 0.02 -21.9% -35.6%
-----------------------------------------------------------
Grand Total....................................... 17.6 17.3 19.5 19.7 17.6 13.8% -0.2%
----------------------------------------------------------------------------------------------------------------
Source: S&P Global, MP2 (calendar 2023 includes uncertified December exports).
Panama Canal
The Panama Canal is experiencing a severe drought which has
restricted vessel transits. Today the acute need for transit means
vessels must make their reserved slots, and port operators need to
ensure vessels depart on time.
The canal is presently transiting 22 to 24 vessels per day compared
to a normal 36 to 40. The majority of vessels diverted away from the
canal are in the bulk and commodity trades where reservations are not
possible due to the nature of the trade.
Vessel delays by operator differ, I understand the largest
container vessel users of the canal who historically reserve slots are
not significantly delayed while others are delayed or paying much
higher transit fees.
Water levels historically do not begin to rise until June, but
better than expected November rainfall and water-saving measures has
allowed the Panama Canal Authority to cancel the need to further reduce
transits.
Ocean carriers have adjusted their service patterns which has
resulted in improved global connectivity from The Port of Virginia.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Red Sea
The recent attacks on merchant shipping in the Red Sea has resulted
in most container vessels diverting to route around Africa.
Initially this has disrupted schedules for Asia-North Europe, Asia-
Mediterranean, and Asia-USEC services. This initial disruption has
included the need for fueling in South Africa, discharge of
Mediterranean cargoes in western vs eastern Mediterranean ports for
transshipment, and overall longer transits. The other impact has been a
delay in return of container supply to Asia which has in part
contributed to supply constraint and an increase in freight rates on
all trade lanes from Asia.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Fuel prices have not increased. This is important because as
shipping lines plan for around Africa voyages the increased vessel and
fuel costs can be offset by the decrease in Suez Canal fees. For a S.E.
Asia to USEC service, an extra round trip of 14 days (7 days in each
direction) at today's fuel price does not automatically mean an
increased total voyage cost.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
This is not the same for Asia to North Europe or Asia to
Mediterranean, where deviation and the European Union Emissions Trading
System increase costs on longer voyages.
It must also be remembered that vessels need to be sourced and
positioned to fill in weekly schedules. This along with increased at
sea time for container box fleets tightens the supply side of assets.
This tightening of supply may be felt across global trade lanes as
vessels and containers are repositioned to where they are most needed.
While containerized ocean carriers have seen increased freight
rates and share prices as a result of the tightened supply, my
conversations with executives and public comments all point to the
desire to return to normal transit patterns as soon as practical.
Protecting freedom of navigation in all waters is a requirement of
free and fair global trade. On behalf of The Port of Virginia and my
colleagues I recognize the extraordinary service of our men and women
in the military who are active in the Red Sea, many of whom are
deployed from our port.
Thank you. I would be glad to answer questions the Committee might
have.
Mr. Rouzer. I thank the gentleman. We will now move to Mr.
Roger Millar, secretary of transportation for the Washington
State Department of Transportation.
You are now recognized for up to 5 minutes.
TESTIMONY OF ROGER MILLAR, PE, FASCE, FAICP, SEC-
RETARY, WASHINGTON STATE DEPARTMENT OF TRANSPOR-
TATION
Mr. Millar. Thank you, Chair Rouzer and Ranking Member
Larsen, for inviting me to testify today to discuss the state
of transportation. My name is Roger Millar, and I serve as
secretary of transportation in Washington State.
My remarks today will focus on how we are implementing
funds through the Bipartisan Infrastructure Law, and summarize
a few of the challenges we are experiencing, including those
related to project cost escalation.
I want to start by thanking the Congress for passing the
Infrastructure Investment and Jobs Act, which will provide over
$5 billion in Federal funding for Washington State over the
life of the act. While the act only requires States to
suballocate portions of three of the formula programs, in
Washington, we suballocate 41 percent of all of our Federal-aid
formula funds to our local partners, and then we work closely
with them to support successful obligation of their Federal
funding.
To date, we have used funding from the act on more than 370
projects managed by WSDOT, including safety improvement
projects, stormwater and culvert replacement projects, roadway
preservation projects, and bridge preservation projects. As we
deliver projects with funding from the act, we strive to ensure
that the projects benefit all Washingtonians, including being
more inclusive in our contracting work. WSDOT is a national
model for disadvantaged business enterprise participation, and
for the Federal fiscal year 2023 our DBE participation rate was
nearly 19 percent, putting $111 million into that community.
The National Electric Vehicle Infrastructure Program and
the Electric or Low-Emitting Ferry Pilot Program are two
examples of new programs in the act that we are implementing.
We are leveraging Federal funds with State dollars for this
important work, increasing both the impact of Federal funding
and our ability to reach our decarbonization and efficiency
goals.
We also appreciate the new discretionary grant programs
that support large, transformative projects through multiyear
grant agreements, and/or funding pipelines. For example, WSDOT
was recently notified that we will receive a $600 million Mega
grant award for the Interstate Bridge Replacement Project. This
project will replace the Interstate 5 Bridge which connects
Washington and Oregon and serves as a critical connection for
regional, national, and international trade. Replacing this
aging bridge with a crossing that can meet the needs of all
travelers for generations to come is of the highest priority.
Our implementation of programs in the act is not without
its challenges. For years, infrastructure investment did not
keep pace with needs. The impacts of a lack of adequate
investment to preserve, make safe, and enhance our systems for
all users are readily apparent and will take time and hard work
to overcome.
Currently, WSDOT has less than half of the funding we need
to keep our system in a state of good repair. Like DOTs across
the country, we are experiencing cost escalation for some of
our projects. The COVID pandemic placed an unprecedented strain
on the supply chain, resulting in increased material costs.
While we are no longer experiencing the same supply chain
issues that we did in 2020 to 2022, workforce availability
remains a challenge for the entire transportation sector and
affects schedule, ultimately affecting overall project costs.
DOTs, engineering consultants, labor, contractors, and
suppliers are ramping up to deliver the programs funded through
BIL, but a massive increase in projects requires a substantial
workforce increase, as well. We hope that through future
reauthorizations, Congress will provide a robust and sustained
level of funding as our Federal partner so that everyone,
especially our private-sector partners, will invest to ramp up,
keep up, and deliver on these vital projects.
We also need to do more to encourage women, people of
color, and other underrepresented groups to study and work in
transportation engineering and the construction trades to help
build the strong, diverse workforce our programs and projects
require.
Another challenge we are having is related to the process
known as August redistribution. In the past, Washington has
been very successful in obligating all of our Federal funds and
using the additional obligation authority that has come our way
through the redistribution process. But our success means that
we are reaching our contracting authority limits under the act,
which will decrease our capacity to continue to utilize the
redistributed obligation authority. And we are not unique in
that case. Staff from AASHTO has been working with FHWA on
suggestions for solutions to maximize highway formula dollars
provided to State DOTs, and are sharing those ideas with
Congress.
Thank you again for the honor and opportunity to testify
today. We appreciate having a strong Federal partner. We are
working diligently to use our Federal funds to preserve and
modernize our multimodal transportation system for all users.
I am happy to answer any questions you might have.
[Mr. Millar's prepared statement follows:]
----------
Prepared Statement of Roger Millar, PE, FASCE, FAICP, Secretary,
Washington State Department of Transportation
Introduction
Thank you, Chairman Graves and Ranking Member Larsen for inviting
me to testify today to discuss the state of transportation.
My name is Roger Millar, and I serve as Secretary of the Washington
State Department of Transportation (WSDOT). I joined WSDOT as Deputy
Secretary in October 2015 and was appointed Secretary of Transportation
in August 2016. I've spent over 45 years working in the transportation
industry at the local and state level and in the private sector. The
prominent theme that has run through my career has been planning and
implementing transportation systems that are not ends unto themselves;
but rather the means toward economic vitality, environmental
stewardship, social equity, public health, and aesthetic quality. I
serve as a member of the Board of Directors of the American Association
of State Transportation Officials (AASHTO) and served as 2022-2023
AASHTO President. In addition, I served as 2021-2022 Board Chair for
the Intelligent Transportation Society of America (ITSA) and as 2022-
2023 President of the American Society of Civil Engineers
Transportation and Development Institute (ASCE T&DI).
I oversee an agency that is the steward of Washington state's
multimodal transportation system and responsible for ensuring that
people and goods move safely and efficiently. In addition to building,
maintaining, and operating the state highway system, WSDOT operates the
largest ferry system in the nation, sponsors the Amtrak Cascades
intercity passenger rail service, owns and operates 16 airports, and
owns a 300-mile short-line freight rail system. We work in partnership
with others to maintain and improve local roads, railroads and
airports, as well as to support mobility options such as public
transportation, bicycle, and pedestrian programs. I'm here today to
speak about the state of the nation's transportation infrastructure and
supply chain issues.
Implementation of the Infrastructure Investment and Jobs Act
I want to start by thanking Congress for passing the Infrastructure
Investment and Jobs Act (IIJA) / Bipartisan Infrastructure Law (BIL)
which will provide over $5 billion dollars in federal funding for
Washington state over the life of the bill. While the IIJA only
requires states to suballocate portions of three formula programs, in
Washington, we suballocate 41 percent of our total federal-aid formula
funds to local partners and we are working closely with them to support
successful obligation of their federal funding. Federal funding
currently comprises approximately 30 percent of the Department's total
transportation budget, a historic high, and we are working diligently
to put these funds to good use. To date we have used funding from the
IIJA on more than 370 projects managed by WSDOT including 5 safety
improvement projects, 28 environmental improvements like stormwater
retrofits and fish barrier corrections, 137 roadway preservation
projects and 93 bridge preservation projects.
In addition to increases in formula funding for longstanding
programs, we also appreciate the new programs created under IIJA. In
Washington state we are leveraging state funding to amplify the
benefits of our federal contributions to meet important state goals.
For example, the National Electric Vehicle Infrastructure program
aligns with our state's goal of decarbonizing our transportation system
and ensuring that all Washingtonians and visitors can use an Electric
Vehicle and find convenient, reliable and accessible fast-charging
stations. Our NEVI Plan Update was recently approved by the Federal
Highway Administration (FHWA) and later this year we plan to issue a
Request for Proposals for deploying fast charging stations along
nationally designated alternative fuel corridors. In addition to the
federal formula and competitive grant funding Washington will receive,
we are also distributing $30 million dollars in state funding through
our Zero-emission Vehicle Infrastructure Partnership grant to nonprofit
organizations, tribes, state and local government agencies, all of whom
then partner with private-sector organizations to develop and implement
their projects.
Another example of how we're leveraging federal funds is the
electrification of our ferry system. WSDOT operates the largest ferry
system in the United States. It is also the biggest contributor of
greenhouse gas emissions of any state agency in Washington, burning 19
million gallons of diesel fuel to transport 19 million passengers every
year. Our fleet is aging and many of our vessels are due for major
preservation work or replacement. This makes it the perfect time to
modernize the fleet as we preserve it in a state of good repair. That's
why we've embarked on an ambitious ferry electrification program to
transition to an emission-free fleet that will also cost less to
operate and maintain. New IIJA funding opportunities, including the
Electric or Low-Emitting Ferry Pilot Program, allow us to leverage
federal funds with state dollars for this important work, increasing
both the impact of federal funding and our ability to reach our
decarbonization and efficiency goals.
New IIJA discretionary grant programs that support large,
transformative projects through multiyear grant agreements and/or
funding pipelines are also appreciated. For example, WSDOT was recently
notified that we will receive a $600 million National Infrastructure
Project Assistance program or ``MEGA'' grant award for the Interstate
Bridge Replacement Project. This bi-state project will replace the I-5
bridge which connects Washington and Oregon and serves as a critical
connection for regional, national, and international trade. Replacing
this aging bridge with a crossing that can meet the needs of all
travelers for generations to come is of the highest priority. The MEGA
grant program supports large, complex projects that generate national
or regional economic, mobility or safety benefits--and the IBR program
does all three. Funding that recognizes the long lead time and
magnitude of transformational projects is key to our work and has been
helpful moving several key projects forward.
Another example is the new Corridor Identification and Development
program administered by the Federal Rail Administration. We received
entry into these programmatic ``pipelines'' for both our existing
Amtrak Cascades passenger service and our proposed Cascadia High-Speed
Rail programs. This allows us to plan for improvements for current rail
passengers as well as envisioning an even more robust system in the
future with high-speed rail between major Pacific Northwest cities,
enabling us to address transportation and other related quality of life
issues for future generations.
As we deliver projects with funding through the IIJA, we strive to
ensure the projects benefit all Washingtonians. This work also includes
continuing to be more inclusive in our contracting work. WSDOT is a
national model for Disadvantaged Business Enterprise participation as
part of our ongoing contracting journey. For federal fiscal year 2023
our DBE participation rate is nearly 19 percent or $111 million. That's
an increase from FFY 2017 with 14.6 percent in total or $77.6 million.
Our work includes several programs supporting under-represented
business efforts, including programs for small and veteran's businesses
and capacity building mentorship programs.
In addition to efficiently deploying the federal funds we've
received; we are also engaging in opportunities to comment on new
rules. FHWA's Final Rule for Assessing the Performance of the National
Highway System, Greenhouse Gas Emissions (GHG) Measure is one example.
WSDOT recently co-signed a letter with 14 other states, representing
over 40 percent of our nation's population and almost 50 percent of our
GDP, noting our support for the measure. Transportation is the largest
source of carbon pollution in the United States. As stewards of that
system, state DOTs can take meaningful actions to cut greenhouse gas
emissions. While state DOTs play a critical role in the transition to a
clean energy economy, they cannot do it alone. This common-sense rule
will provide important and uniform data to help state DOTs, partners,
and stakeholders work together to make progress towards a cleaner,
safer, and more equitable transportation system. Since 2018, WSDOT has
voluntarily reported GHG emission estimates and targets on the National
Highway System to FHWA as part of bi-annual performance reporting. The
process it neither difficult nor burdensome and we stand ready to
support our partners who are new to the process.
Challenges
For years, infrastructure investment did not keep pace with our
needs. The impacts of a lack of adequate investment to preserve and
enhance our systems for all users are readily apparent and will take
time and hard work to overcome. There is also the cost--both monetarily
and in human suffering--that we all pay as a society when it comes to
transportation funding and issues such as safety.
The combined budgets of all state DOTs is nearly $200 billion a
year. Yet crashes cost our national economy $1.4 trillion annually in
economic and societal impacts. Not having our system in a state of good
repair costs another $142 billion a year. Congestion's annual cost is
$110 billion; with another $107 billion for greenhouse gas emissions.
Currently, WSDOT has less than half of the funding needed to keep our
systems safe and in a state of good repair.
Like DOTs across the country, we are experiencing cost escalation
for some projects. The COVID pandemic placed an unprecedented strain on
the supply chain resulting in increased material costs. Material
pricing volatility adds risks to projects. This is especially
challenging for our largest, most complex projects because we are
asking contractors to estimate these costs years into the future.
Consequently, it's on these types of projects that we are seeing the
largest cost increases. While we are generally not experiencing the
same supply chain issues we did during and immediately following the
pandemic, other external pressures are still affecting project costs.
These include market conditions exacerbated by strong, unprecedented
competition among agencies for the same material and workforce pool.
Workforce availability is a challenge for entire transportation
sector as we work together to deliver new projects and programs funded
by IIJA and state and local governments. This involves all phases of
project work and quite simply: the current near-term demand outweighs
the supply. Many agencies and industry partners also are experiencing
employee loss due to retirement and attrition, exacerbating the hiring
challenges. Those challenges also affect schedule, ultimately affecting
overall project costs. DOTs, labor, and contractors are ramping up to
deliver the projects funded through IIJA but a massive increase in
projects also requires a workforce increase, and we hope Congress will
provide a robust and sustained level of funding as our federal partner
so that everyone, especially our private sector partners, will invest
to ramp up, keep up, and deliver on these vital projects.
We also need to do more to encourage women, people of color and
other underrepresented groups to study and work in transportation
engineering and the construction trades to help build the strong,
diverse workforce our programs and projects require. We've done that in
Washington state with several state-funded internship and Pre-
Apprenticeship Support Services programs, including training and
support for women, people of color, socially and economically
disadvantaged individuals (including in juvenile justice or foster care
systems) to learn the skills to become iron workers, maritime crews or
other trades. In the last 10 years we've served about 3,000 people
through these programs, but we need to see those numbers at 10,000 a
year or more.
Reducing Federal Highway Funding Volatility by Addressing Record-High
Levels of August Redistribution
Under the current process of providing highway formula and
discretionary grant dollars for the federal fiscal year, the Federal
Highway Administration (FHWA) has to wait until August to ask state
DOTs to obligate a significant share--$7.9 billion or 15 percent of the
$54 billion total in FY 2023--in just one month. This ``wait-and hurry
up'' approach deprives state DOTs of the full fiscal year to
strategically plan and deploy investments to best deliver on the
promise of the IIJA.
In the past, Washington has been successful in utilizing its full
amount of our Obligation Authority and therefore has been eligible to
receive redistributed funds. We've strategically overprogrammed
preservation projects to take advantage of August Redistribution
opportunities. In 2023, Washington state received a total of $116
million in redistributed obligation authority, with approximately $72
million for local agency projects. But our success means we have very
little contract authority remaining, which will decrease our capacity
to continue to utilize these redistributed funds.
AASHTO has been collaborating with the US Department of
Transportation on a possible legislative solution to maximize highway
formula dollars provided to state DOTs and are sharing these for
Congress' consideration. Legislative modernization of the August
redistribution process in Section 120 of the annual Transportation-
Housing and Urban Development appropriations is needed to mitigate the
impact of slow-spending non-formula Highway Trust Fund programs and to
ensure ample time for state DOTs to obligate additional dollars
throughout the fiscal year. This action will more quickly translate
IIJA's historic investments to tangible benefits throughout the
country.
Mr. Rouzer. Thank you very much, sir.
Mr. Tucker, Mr. Jeff Tucker, CEO of the Tucker Company
Worldwide, you are now recognized for up to 5 minutes.
TESTIMONY OF JEFFREY G. TUCKER, CHIEF EXECUTIVE OFFI-
CER, TUCKER COMPANY WORLDWIDE, INC., ON BEHALF OF
THE TRANSPORTATION INTERMEDIARIES ASSOCIATION
Mr. Tucker. Chairman Rouzer, Ranking Member Larsen, and
members of the House T&I Committee, thank you for the
opportunity to speak with you today to highlight the vital role
that logistics companies play in the supply chain and how our
industry combines with an effective infrastructure to directly
benefit the American economy.
My name is Jeff Tucker. I am the third-generation CEO of
Tucker Company Worldwide, based in Haddonfield, New Jersey, and
former board chair of the Transportation Intermediaries
Association. I have 33 years of experience in this industry,
and chair and cochair committees and other national and
international logistics associations.
Tucker is the oldest privately held freight brokerage in
the United States. We arrange some of the largest shipments
that humans can move on the road, and we also move
pharmaceuticals and other high-value goods. We have supported
numerous Presidential, military, and both the RNC and DNC
national conventions with logistics support.
I am honored to represent TIA's more than 2,000 member
firms. TIA is the professional organization of the $232 billion
third-party logistics industry, and it is an association that
my father, Bill, cofounded in 1978.
Logistics companies like mine view infrastructure as the
chessboard: the chessboard upon which we use every single mode
of transport to literally make the world go round. We are
innovators, we are huge investors in technology, we are mode
agnostic, and, like you, we are focused on ensuring goods reach
consumers quickly, safely, and efficiently. The work logistics
companies do has taken on new importance in America since the
pandemic upended global supply chains. Freight supported
rapidly shifting supply chains, unlike anything in history,
from mid-2022 to mid-2023.
We seem to have reached a new equilibrium, as the other
gentlemen have mentioned. The pandemic era, a disruption in
freight, has dissipated, and the broader economy is proving
resilient. We believe these factors combined will create
greater stability in 2024. Our industry overcame the historic
challenges to keep America's supply chain fluid.
I commend the administration and this committee for the
proactive approaches to addressing supply chain concerns,
notably through the FLOW initiative and the creation of the
Supply Chain Disruptions Task Force. Thank you for the
Bipartisan Infrastructure Law, too. Continued and robust
investment in infrastructure, combined with resourceful and
innovative logistics companies like mine, are part of America's
superpowers and directly improve our economy, jobs, and the
health and welfare of our people.
Our number-one challenge is fraud. Fraud is rampant in
trucking. It has ballooned to an $800 million problem. There is
a surge of malicious actors engaging in illegal activity,
registering with FMCSA as carriers and perpetrating fraud,
theft, and holding freight hostage in situations without any
legal consequences. While this is obviously an economic problem
hurting consumers and businesses alike, it also raises safety
and security concerns. Unfortunately, FMCSA is failing to
enforce the law, investigating tens of thousands of fraud
complaints lodged with it.
We see similar cases of fraud with dispatch services, which
are often based abroad, operating here in our country, who,
mind you, are not required by FMCSA to obtain a license or a
registration like my company has, doing essentially the same
work.
We need FMCSA to step up. FMCSA must stop dabbling in
nonsafety commercial considerations like what dollar amount a
performance bond should be, or what commercial terms included
inside a private contract between two parties exist. Instead,
focus on safety.
Other issues impacting the industry, for example, there is
a rising need for longer term investment at the Mexican border
to meet the increased truck and rail traffic crossing that
border as supply chains shift closer to home.
State regulatory issues, which may be well intentioned,
often dealing with sustainability and air quality, are causing
more challenges in the Nation's supply chains by creating more
than one standard for interstate commerce.
Finally, there is no driver shortage. I say that again.
There is no driver shortage, nor has there been one. That is a
false narrative that may lead to unintended consolidation in
the industry and a weakening of the American supply chain. A
more than doubling of the number of carriers and an increase of
1 million drivers has occurred over the last 10 years.
We must have a more nuanced conversation about this and
other policies, and I am thankful to be here, and look forward
to further discussion.
[Mr. Tucker's prepared statement follows:]
----------
Prepared Statement of Jeffrey G. Tucker, Chief Executive Officer,
Tucker Company Worldwide, Inc., on behalf of the Transportation
Intermediaries Association
Chairman Graves, Ranking Member Larsen, and members of the House
Transportation & Infrastructure Committee: Thank you for the
opportunity to speak with you today to highlight the vital role that
logistics companies play in the supply chain and how the logistics
industry combined with an effective infrastructure directly impacts the
overall American economy.
My name is Jeff Tucker; I am CEO of Tucker Company Worldwide based
in Haddonfield, New Jersey, and a former Board Chair of the
Transportation Intermediaries Association (TIA). I chair and co-chair
committees in other national and international logistics organizations,
which give me a variety of perspectives. Tucker Company Worldwide is
the oldest privately-held freight brokerage in North America,
specializing in project cargo like oversized and overweight shipments--
including some of the largest structures humans can move on the
ground--to extremely expensive and high security items like
pharmaceuticals, vaccines, and life-science goods. We provide U.S.
military logistics support and have supported countless Presidential
missions, DNC and RNC national conventions security logistics support.
In the aftermath of 9/11, our company provided trucking services at
Ground Zero; we supported FEMA during countless disasters; and moved
radioactive containment structures during the Three-Mile Island partial
meltdown. We operated during excessive regulation, and we helped lead
the industry through Presidents Carter's and Reagan's and multiple
Congress' bipartisan efforts to deregulate price controls and
contracting controls that stifled the industry. In those earliest days
of deregulation, my father Bill Tucker was a founding member of TIA,
which celebrated their 45th year as an association in 2023. Along with
my brother Jim, we are third-generation owners of the company that my
grandfather founded.
I am honored to be here today to represent TIA's more than 2,000
member companies. TIA is the professional organization of the $232
billion third-party logistics industry, representing approximately 1 in
4 freight dollars spent. With over 33 years of experience in the field
of logistics and supply chain management, I am pleased to share
insights into the intricate relationship between logistics,
infrastructure, and the overall efficiency of the supply chain. Make no
mistake--investment in American infrastructure, combined with
incredibly resilient and innovative logistics providers combine to
supercharge America's economy, its jobs and the health and welfare of
Americans. We make the world go 'round.
The word `logistics' encompasses transportation, warehousing,
distribution, and inventory management and is the foundation of every
supply chain. When done well, it involves the seamless coordination and
integration of many transactions to ensure the timely and cost-
effective movement of goods from the point of origin to the end
consumer.
Logistics companies specializing in transportation are freight
forwarders and freight brokers. I am here primarily representing
freight brokers, who focus on surface transportation within North
America. Freight brokers stand at the center of the supply chain: we
routinely solve the most difficult challenges; we facilitate and
arrange the efficient and economical movement of goods by working with
tens of thousands of shippers and carriers to help arrange the movement
of freight by truck, rail, air, and ocean carriers. Increasingly, we
are the parties with the most significant investment in freight and
logistics technology.
Every Fortune 500 company utilizes the services of at least one
freight forwarder and one broker, and often they use many brokers to
handle their freight transportation allocation. Arranging the freight
is only the tip of the iceberg, and the easiest work we do. We provide
critical data to help companies manage their businesses more
effectively; we provide technological support and innovative solutions
to strategic and tactical problems, and we help manage aspects of their
business relationships, identifying waste and opportunity for savings
and efficiencies. By helping companies understand the supply chain, and
working with them, their suppliers, and their customers to educate them
on the value of time, the value of delay, the value of useful
information versus bad, we help companies revolutionize and revitalize
their operations. All of this is possible because we move their freight
and use their own data, combined with market data and internal
learnings to help them continually evolve, and compete with domestic
and foreign competitors.
The work that logistics companies do has taken on new importance to
America since the pandemic upset global supply chains. The pandemic,
China's misguided and unsuccessful Zero-Covid policy, and the
increasing geo-political tensions around Taiwan, the Taiwan Strait and
the South China Sea, and the inordinate shipping delays that ensued at
the peak of the freight crisis, have collectively caused many American
companies to rethink China and return to the Americas, and to the
United States.
We learned of examples of healthcare manufacturers who were solely
dependent upon Chinese suppliers for lifesaving products, parts of
syringes, many types of personal protective equipment (``PPE'') and
many other critical to life products. Companies sought to mitigate
these risks by finding other manufacturing locations in--closer to home
and in the U.S. Logistics companies are critical to supporting this
effort. We are helping companies choose locations wisely and to move
new freight volumes throughout the country. These are exciting times,
especially for our company, since my grandfather founded the company
and supported rigging companies who were dismantling factories in the
Northeast and moving them South, West or overseas. Today, 60 years
later, we see America building again.
Transportation efficiency is paramount in the U.S. GDP and the
global supply chain, as it directly impacts the speed and reliability
of delivering products. The optimization of transportation routes, the
utilization of advanced technologies such as GPS tracking and the
integration of multi-modal transportation options all contribute to a
more resilient and responsive supply chain. Logistics companies view
infrastructure as the chess board, and we are adept at strategically
helping our customers and our carriers make the best moves to help
their businesses thrive.
Logistics companies are the largest investors in logistics
technologies within the industry--more than shippers and carriers. We
play a critical role in mitigating many risks within the supply chain.
Continuous investment in solution development, technology, modeling,
and piloting new methods of delivery are central to what logistics
companies do today. We help organizations respond swiftly to
disruptions, ensuring continuity of supply even in the face of
unforeseen challenges, like when natural disasters hit, when new
products launch, and of course when global supply chains are disrupted
by pandemic or war or blocked canals. The supply chain bent but never
broke during the pandemic, due to the incredible resilience of our
transportation system, and due to the risk mitigation actions and the
taken by logistics companies.
Let me repeat myself. The supply chain bent, but never broke during
the pandemic. There was never a day--ever--where we were not able to
locate a truck to move a shipment. It may have cost a lot more to lure
a carrier away from steady business, or to send an empty truck hundreds
of miles to pick up a critical shipment. But we moved it.
Today there are more than twice as many trucking companies as a
decade ago. The nation added over 1 million net, additional for-hire
drivers over that same time. I encourage you to think differently about
there being a driver shortage. There is not a driver shortage in
America. I have been reporting data on this for 13 years. However, if
you are a large carrier, you have an awful driver shortage because
technology allows smaller carriers to thrive and has encouraged
American entrepreneurship. The largest fleets today represent the
smallest market percentage in drivers and tractors than at any time
since 2011. Overall, however, the industry is thriving.
Logistics companies have never been more important to the economy
than they are today. Trucking fleets are becoming smaller and more
nimble and more specialized, catering to the specific needs of our
manufacturers and importers. Meanwhile, manufacturers are lean,
efficient and they wish to deal with fewer suppliers--thus the enormous
and ever-growing reliance on logistics companies to support their
operations.
This growth in logistics companies and the ever-increasing
decentralization of the motor carrier industry are great for America.
They fuel ownership, investment, and innovation. They keep America open
for business and maintain our position as the swiftest, most powerful
distribution system in the world.
In the earliest days of the pandemic, when Washington State nursing
homes were being ravaged, and New York City hospital morgues were
overflowing with the dead, these smaller fleets volunteered to move
loads to these troubled areas, while some larger carriers declined. As
we sought carriers to haul medicine and other relief supplies to NYC,
large corporately run carriers routinely told us they were not sending
drivers to hot spots for their safety and due to Human Resources
concerns. Understandable. I get it. But small carriers and drivers
volunteered, placed the flags on their backs like superheroes, and
helped those in need. Logistics companies, and the deep, interwoven
operational relationships we have with our customers enabled these
drivers to access this business and to perform this good work. And get
paid. And through the worst of it--those first several weeks in April
2020 when extraordinarily little freight was moving--we kept carriers
moving. None of us had the revenues that we wanted, or the orders we
needed, but we kept America fed and critical supplies flowing. We
notched huge psychological wins during a dark period that gave our work
new meaning.
The U.S. economy has become intrinsically linked with the broader
global marketplace and the worldwide supply chain can have significant
impacts. As we saw during the pandemic, the role of logistics in both
the United States and internationally remains pivotal to the broader
American economic landscape. From the standpoint of our members, the
disruptions experienced in the supply chain due to the COVID-19
pandemic are improving, yet several lingering challenges persist.
Some challenges include: (a) individual states undoing the seamless
interstate commerce system by attacking small carriers and owner
operators with regulations ostensibly geared toward clean air, but are
overreaching and overbroad, placing the fundamental strength of our
supply chain--our diverse and defragmented market--in grave jeopardy;
(b) limitations in truck capacity within specific sectors such as
liquid bulk and hazardous bulk shipments; (c) shortages of shipping
containers; (d) inflationary pressures driving up the cost of many
freight components and reducing consumption of goods, which reduces
freight volumes.
I wish to commend the Administration and this Committee for the
proactive approaches to addressing supply chain concerns, notably
through the FLOW initiative and the creation of the Supply Chain
Taskforce. The multifaceted efforts to navigate and optimize the supply
chain align with the overarching goal of fostering economic resilience
and stability. Logistics companies remain optimistic about continued
progress and look forward to ongoing collaboration to ensure the
resilience and efficiency of the U.S. supply chain.
I remain concerned about national security as it relates to the
supply chain. We were overly dependent upon China before the pandemic
and remain so today in certain products. Individual state regulations
mentioned earlier, which if left unchecked by Congress, will slow down
freight movements and harm American families. Regulations that
consolidate the industry may appeal to special interests, but these
efforts make it easier for our enemies to disable our trucking
industry. It is far more difficult to disable a growing 350,000 carrier
fleet with 3.5 million drivers, than it is to disable a consolidated
one. Remember how the Colonial Pipeline and Maersk data breaches
brought commerce to a halt?
I am genuinely concerned with the Federal Motor Carrier Safety
Administration (FMCSA) and their willingness to become involved in
commercial aspects of the transportation system. I was selected by
FMCSA Administrator Anne Ferro several years ago to serve on its Motor
Carrier Selection Advisory Committee's subcommittee. Since 2010, FMCSA
has promised to provide safety data to those of us interested in motor
carrier safety. They have failed the public miserably. This is the one
thing industry needs from them, and they are 13 years overdue and
counting. Yet, instead of focusing squarely on life saving safety
issues, they keep wasting years of funding and taxpayer support
focusing on commercial considerations like performance bonds and what
is contained in contracts regarding pricing between private parties,
neither of which have any relevance to safety. FMCSA's regulatory
mission is safety and reducing crashes, injuries and fatalities
involving large trucks and buses. Yet they persistently avoid that
responsibility every minute that they focus on commercial interests
between private entities. FMCSA must be held accountable to focus
exclusively on safety matters and stay out of regulating agreements
between companies.
On behalf of TIA, we are particularly grateful for Congress' work
to pass the Infrastructure Investment and Jobs Act, also known as the
Bipartisan Infrastructure Law. Infrastructure is the engine that powers
sustained growth and is the bedrock of our GDP. Infrastructure,
encompassing roads, bridges, airports, communication networks, and
energy systems, facilitates the smooth functioning of key sectors.
Adequate and well-maintained infrastructure not only enhances
connectivity and accessibility but also fosters economic efficiency and
creates a conducive environment for businesses to thrive, attracting
investments and generating employment opportunities. Additionally,
infrastructure investments contribute to improved sustainability by
promoting environmentally friendly practices and technological
advancements. In essence, allocating resources to infrastructure
development is an investment in the future, laying the foundation for a
resilient, competitive, and prosperous economy.
Supply Chain Disruptions
TIA publishes a 3PL Market Report that summarizes data collected
from participating TIA Members, which gives us insights into the market
and analyzes the future market. In the 3rd quarter of 2023, the U.S.
economy and the portion associated with freight transportation both
posted surpassingly strong results. The Real Gross Domestic Product
(GDP) rose 5.2% quarter over quarter on a seasonally adjusted basis--
the strongest gain since the fourth quarter of 2021. Despite this solid
performance in the third quarter, freight volumes remained sluggish
driven by increased consumer spending on travel, experiences, and
entertainment (think Taylor Swift and Beyonce), and inflationary
pressures reducing overall spending for many.
In the mid-2020s and 2021, inflation hit trucking and freight
before it hit the greater economy. Demand for trucking services and
wild changes in supply chains dramatically changed lanes and carrier
partners for shippers large and small. Carriers and logistics companies
scurried for new customers and new lanes, and shippers scurried for new
carriers, bidding up prices to steal capacity from others, since
commerce lanes changed so much. Interestingly, overall freight volumes
were not particularly abnormal. All of this ``inflation'' in freight
was caused by rapidly shifting supply chains, unlike anything in
history. This pricing strength attracted 15% more drivers into the
market in just two years from 2020 to 2022. In mid-2022, the supply
chain reached a new equilibrium, and most of that new driver capacity
that appeared, has been steadily exiting the market. Today's carrier
and driver counts are back to 2019 and 2020 levels. The inflationary
period in trucking, air and ocean seems to be over, and its short
duration provides hope that today's moderating inflation numbers may
portend a short-lived consumer inflationary period.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Looking to the future, logistics companies are paying close
attention to consumer spending, manufacturing, capacity and
utilization, and retail and wholesale inventories. According to the
recent data, the freight industry showed signs of improvement,
outpacing a trend of weak performance that began in mid 2022. However,
freight volumes and the possibility there may still be overcapacity in
the trucking industry paint an uncertain view of 2024. If the market is
in equilibrium, we feel a little more positive, as pricing is level and
predictable. We watch consumer spending as a leading indicator for the
freight economy. And stronger than expected jobs data provides some
optimism. Mortgage rates edging down and increased home ownership
trends by younger citizens are glimmers of hope for freight. Data shows
that spending has kept freight demand in good standing and could
continue; however, a sudden weakness in job growth, or a negative shock
to the economy could undermine this upswing.
Amidst the prevailing uncertainty, the 3PL (third-party logistics)
marketplace stands resilient, experiencing unprecedented strength.
Shippers increasingly rely on brokers, and this reliance has witnessed
substantial growth, with the broker freight marketplace expanding by
over 30% from 2020 to 2022. The agility of TIA members is noteworthy,
as they possess the capacity to adapt swiftly, leveraging robust
carrier relationships that shippers may not inherently possess.
In navigating the dynamic landscape, shippers consistently seek
transportation solutions to meet their evolving needs. Safety and
security rank as the top two criteria when a shipper selects a broker.
Looking ahead, projections indicate a substantial uptick in the role of
brokers, with estimates suggesting that by 2045, brokers will handle
nearly 45% of the freight in the supply chain--a significant increase
from the current approximate share of 30%. And the number of brokers
continues to grow, offering shippers and carriers more choices and a
much wider range of partners and specialties, catering better to their
needs.
This trend underscores the growing significance of brokers in the
logistics ecosystem, positioning brokers as key facilitators in meeting
the evolving demands of shippers while maintaining a steadfast
commitment to safety and security.
Fraud in the Supply Chain
One developing challenge is that the supply chain is currently
grappling with a pervasive fraud epidemic, costing upwards of $800
million for American consumers, with brokers, carriers, shippers on the
front lines. Regrettably, the industry is witnessing a surge in
malicious actors engaging in illegal activity, registering with FMCSA
as carriers using numerous motor carrier numbers, and perpetrating
fraud, theft, and freight hostage situations without facing legal
consequences.
Unfortunately, and yet again, FMCSA is falling short in enforcing
the law or investigating the tens of thousands of fraud complaints
lodged with the Agency. Although the FMCSA expressed intentions to
utilize funds from the Infrastructure Investments & Jobs Act (IIJA) for
increased enforcement, to date, progress has been slow. We do
understand the constraints and limitations that the Agency faces, and
this is an issue that we all need to tackle head on together. I
encourage this Committee, Congress, and the Administration to use every
tool at your collective disposal to refocus and reprioritize FMCSA's
attention away from commercial interference between brokers, carriers,
and shippers, and concentrate all its efforts on safety and national
security. Fraud in trucking affects critical freight like
pharmaceuticals, food, and even military freight. These are legitimate
and present threats to public safety.
Fraud not only undermines market security but also poses risks to
safety on our nation's highways, inevitably leading to additional costs
for end consumers. The situation's urgency prompted Congress to take
issue with it, as evidenced by the inclusion of language in the fiscal
year 2023 THUD Appropriations Bill, mandating the FMCSA to report back
to Congress on the issue and their actions. However, the awaited report
is yet to be issued. FMCSA has commercial interference on its mind
instead.
Another contributing factor to supply chain fraud is the
proliferation of unlicensed and unregulated ``dispatch services,''
often based outside the United States. These services, hired by owner-
operators to secure loads, including sensitive Department of Defense
freight, raise concerns about national security. FMCSA has decided to
exclude these services from obtaining a freight broker license, instead
of recognizing the pervasive nature of this issue. Making matters
worse, in some cases, foreign nationals, operating overseas for these
dispatch services have direct IT connections with U.S. carriers and/or
payment services here. This opens a Pandora's Box of IT risk that is
incomprehensible. Collaborative efforts with the Armed Services
Committees in the House and Senate occurred in 2023 and report language
was included in the NDAA to investigate this issue. One proposed
solution involves the implementation of a provision from the Moving
Ahead for Progress in the 21st Century Act of MAP-21, requiring brokers
to demonstrate industry knowledge or possess a minimum of three years'
experience for authorization, mirroring a successful regulation at the
Federal Maritime Commission (FMC).
From my perspective, the most significant challenge currently
afflicting the market is the prevalence of fraud in the supply chain.
Until there are effective measures to address and enforce solutions for
this issue, the continued dysfunctionality of the supply chain and its
adverse impact on the broader economy will persist.
Conclusion:
I appreciate the opportunity to testify before the Committee today
to provide the perspective of the 3PL industry and offer some potential
solutions. I would be happy to answer any questions.
Mr. Rouzer. Thank you very much. Next we have Ms. Lauren
Benford, controller for the Reiman Corporation.
You are recognized for 5 minutes.
TESTIMONY OF LAUREN BENFORD, CONTROLLER, REIMAN
CORPORATION, ON BEHALF OF THE ASSOCIATED GENERAL
CONTRACTORS OF AMERICA
Ms. Benford. Thank you, Chairman Rouzer, Ranking Member
Larsen, and members of the Committee on Transportation and
Infrastructure. Thank you for inviting me to testify today on
this vitally important topic. My name is Lauren Benford, and I
am the controller of Reiman Corp., an active member of AGC, and
the past president of the AGC of Wyoming.
AGC is the leading association in the construction
industry, representing more than 27,000 firms, including
America's leading general contractors and specialty contracting
firms, many of which are small businesses. Reiman Corp. is a
76-year-old family-owned company currently passing off
leadership to the third generation. We employ 150 employees and
operate in Wyoming, Nebraska, and northern Colorado. We
specialize in heavy highway, civil, and commercial
construction.
In my testimony today I will discuss the status of the
construction industry, including the challenges that lie ahead
for rebuilding our Nation's infrastructure.
For the construction industry, managing inflation defined
2023. Since February of 2020, the average cost of construction
material has increased by 37 percent, nearly twice as high as
consumer inflation, which was 19 percent during the same amount
of time. More specifically, highway construction cost has
increased 50 percent since December of 2020, according to the
Federal Highway Administration. These figures also reflect a
significant cost increase for specific construction materials
from February 2020 to November 2023, which include a 113
increase in the price of diesel; a 60-percent increase in the
price of steel mill products; a 44-percent increase in the
price of gypsum, which is used in many of building materials;
and a 31-percent increase in the price of cement.
The price of fuel, especially diesel, has driven up the
cost for the construction industry and projects nationwide.
Higher diesel costs mean construction companies must pay more
to operate equipment, deliver material to jobs, and haul away
debris, dirt, and equipment. Likewise, construction workers
themselves feel the pain of higher commuting costs,
particularly for jobs in rural areas like Wyoming, where
workers often have longer commutes.
Working in Wyoming creates many challenges being a rural
State, such as material availability, severe shortage of
skilled laborers, extreme weather, shorter building seasons,
and logistical challenges because of long distances between
communities.
The construction industry labor shortage remains severe,
with most construction firms expecting labor conditions to
remain tight. Despite firms increasing pay and benefits, the
workforce shortage continues. In 2023, an AGC survey found that
93 percent of construction firms reported they have open
positions they are trying to fill. Of those firms, 90 percent
are having trouble filling at least some of those positions,
particularly among the craft workforce that is performing the
bulk of the construction work onsite.
Nevertheless, confusion around the Buy America requirements
have added to the uncertainty. While AGC supports the effort to
enhance America's manufacturing capabilities, there remains
confusion among suppliers, contractors, and owners themselves,
including the DOTs.
It is also important that we depoliticize the Buy America
waiver process. If a waiver is granted, it does not mean that
administration, Democratic or Republican, does not care about
domestic manufacturing or American jobs. It means that they
also care about American construction jobs and want to rebuild
America's infrastructure.
Looking ahead to 2024, construction companies have a mixed
outlook as expectations for demand remain mostly positive, but
less upbeat than last year amid these new challenges.
The Infrastructure Investment and Jobs Act provided market
opportunities for all types of construction companies. From a
construction standpoint, AGC members report that most of the
IIJA funding to date has been needed to repair and repave our
roadways. While AGC members are hard at work to rebuild the
Nation's infrastructure, it is also critical to recognize that
current focus on repair and reconstruction is in its early
stages of the IIJA, partly due to project readiness.
We have not seen an increase in the large projects to bid.
As a result of the IIJA, we remain optimistic the robust
funding levels provided in the law will mean more construction
projects break ground in the next few years. If Congress did
not pass the IIJA, the impacts on transportation contractors
would have been significant, with likely a cut of 20 to 30
percent in projects by the States.
I want to thank you all for the opportunity to testify
today. I look forward to any questions.
[Ms. Benford's prepared statement follows:]
----------
Prepared Statement of Lauren Benford, Controller, Reiman Corporation,
on behalf of the Associated General Contractors of America
I. Introduction
Chairman Graves, Ranking Member Larsen, and members of the
Committee on Transportation and Infrastructure, thank you for inviting
me to testify on this vitally important topic. My name is Lauren
Benford, and I am the Controller of the Reiman Corporation, an active
member of the Associated General Contractors of America (AGC) and a
past President of the Associated General Contractors of Wyoming.
AGC is the leading association in the construction industry,
representing more than 27,000 firms, including America's leading
general contractors and specialty-contracting firms, many of which are
small businesses. Many of the nation's service providers and suppliers
are also associated with AGC through a nationwide network of chapters.
AGC contractors are both union and open shop and are engaged in the
construction of the nation's commercial buildings, shopping centers,
factories, warehouses, highways, bridges, tunnels, airports, waterworks
facilities, waste treatment facilities, levees, locks, dams, water
conservation projects, defense facilities, multi-family housing
projects, and more. In 2020, 91% of firms within the construction
industry had 20 or fewer employees.\1\
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\1\ https://data.census.gov/
table?q=CB2000CBP:+All+Sectors:+County+Business+Patterns,+
including+ZIP+Code+Business+Patterns,+by+Legal+Form+of+Organization+and+
Employment+Size+Class+for+the+U.S.,+States,+and+Selected+Geographies:+20
20
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Reiman Corp is a 76-year-old, family-owned company currently
passing off leadership to the third generation. We employ 150 employees
and operate in Wyoming, Nebraska and Northern Colorado. We specialize
in heavy highway, civil and commercial construction work.
In my testimony today, I will discuss the status of the
construction industry, including the challenges that lie ahead for
rebuilding our nation's infrastructure. Recent investments in
infrastructure, like the Infrastructure Investment and Jobs Act (IIJA),
have contributed to the most significant infusion of investment in our
infrastructure since the enactment of the Interstate Highway System in
the mid-1950's. While inflation and supply chain constraints have
created challenges over the past two years, the construction industry
would have seen a cut in projects to bid on without the IIJA,
negatively impacting my company, the industry, and our nation's
infrastructure. My testimony today will also highlight the challenges
and opportunities that exist for the construction industry.
II. The Cost of Construction Has Increased
The cost of construction materials has increased
For the construction industry, managing inflation defined 2023.
Since February 2020, the average cost of construction materials has
increased by 37%; nearly twice as high as the rate of consumer
inflation, which was 19% during that same period (See Appendix Table
1). More specifically, highway construction costs have increased 50%
since December 2020, according to the Federal Highway Administration's
(FHWA) National Highway Construction Cost Index (NHCCI).\2\ These
figures also reflect significant cost increases for specific
construction materials from February 2020 to November 2023 (See
Appendix Table 2), which include a:
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\2\ National Highway Construction Cost Index, https://
explore.dot.gov/views/NHIInflation
Dashboard/
NHCCI_1?%3Aiid=1&%3Aembed=y&%3AisGuestRedirectFromVizportal=y&%3A
display_count=n&%3AshowVizHome=n&%3Aorigin=viz_share_link
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113% increase in the price of diesel;
60% increase in the price of steel mill products;
44% increase in the price of gypsum (used in a lot of
building materials); and
31% increase in the price of cement.\3\
---------------------------------------------------------------------------
\3\ Bureau of Labor Statistics, Producer Price Indexes, https://
www.bls.gov/ppi/
The price of fuel, especially diesel, has driven up costs for the
construction industry and project costs nationwide. Higher diesel costs
mean construction companies must pay more to operate equipment, deliver
materials to jobsites, and haul away dirt, debris, and equipment.
Likewise, construction workers themselves feel the pain of higher
commuting costs--particularly for jobs in rural areas where workers
often have long commutes.
Contractors are often asked, ``what difference does it make what
the costs of materials are if you are just building the price into your
bids?'' There is often a lag between when you are quoted a price from a
supplier that is used to submit a bid and when the order is placed
ahead of construction--especially when you are doing federal-aid
transportation work. Get the estimates wrong and you either lose your
shirt (and possibly your company), or you lose the bid.
Contractors must try to predict what prices will look like when it
comes time to procure these materials, several months to even a year
later--otherwise they could be forced to absorb increases. Likewise, if
a contractor includes anticipated cost increases in their bids, they
run the risk of losing out on a project to a lower bidder.
Companies are also unable to foresee things like world events that
cause a spike in oil prices or soaring inflation and therefore, in some
instances, are forced to absorb these increases if there is no price
adjustment clause available to them.
While contractors are in the business of managing risk, the events
and circumstances of the last two years have led to such unparalleled
unpredictability in the supply chain and market that contracting firms
of all sizes are at greater risk now than in recent history of business
failure. As you can imagine, the impacts are especially devastating to
small and Disadvantaged Business Enterprise (DBE) construction firms
that lack the resources to absorb these unexpected costs.
Working in Wyoming creates many challenges being a rural state,
such as material availability, severe shortage of skilled labor,
extreme weather, shorter building seasons and logistical challenges
because of long distances between communities. Wyoming's forever west
attitude, harsh weather, and lack of amenities makes it extremely
difficult to attract talent to the state to allow our companies to
grow.
The wages of construction workers have increased
The Bureau of Labor Statistics released numbers in November 2023
that showed that there were still 390,000 job openings in construction
despite 271,000 new hires reported throughout the month. In other
words, the industry cannot find enough people to hire. This has
resulted in dramatic increases in labor costs. Between December 2022
and December 2023, the average hourly earnings for ``production and
non-supervisory employees'' in construction rose 5.1%. Meanwhile the
average for hourly workers in the private sector rose 4.3% (Appendix
Table 3).
Construction companies face difficulty hiring and maintaining workers
The construction industry's labor shortages remain severe with most
construction firms expecting labor conditions to remain tight. Despite
firms increasing pay and benefits, the workforce shortage continues.
A 2023 AGC survey found 93% of construction firms report they have
open positions they are trying to fill. Among those firms, 90% are
having trouble filling at least some of those positions--particularly
among the craft workforce that performs the bulk of onsite construction
work. While finding qualified workers remains a challenge, the survey
does show that contractors are optimistic, particularly with road,
bridge, and transportation construction.
The industry is facing the effects of decades of policies directing
students to attend four-year institutions as the only career option.
For every dollar the federal government invests in career or workforce
education, it spends five encouraging students to go to a traditional
four-year college and pursue a ``professional'' career.\4\ That is why
AGC supports increased funding for Career and Technical Education (CTE)
funding, as laid out in the Carl D. Perkins Vocational and Technical
Education (Perkins) Act. Perkins is the primary federal program for
developing and supporting CTE programs for secondary and post-secondary
students. Exposing younger individuals to construction skills and
careers is critical. However, these programs, especially construction
focused ones, are expensive to operate and administer for local
schools, as they involve purchasing construction equipment, simulators,
and tools as well as attracting and retaining instructors. And these
programs face rising inflationary pressure and lingering pandemic
impacts.
---------------------------------------------------------------------------
\4\ https://opportunityamericaonline.org/
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My local AGC chapter created a workforce development division three
years ago to combat workforce issues we have seen compound upon
themselves the past few decades. The division is led by a former
teacher who left the classroom at the opportunity to help students find
careers outside of the college track. This division has enacted
multiple initiatives to help students find a path into the skilled
trades. It starts with clarifying the pathways into the trades that was
identified as a key piece missing in attracting youth. They are made
very aware of the requirements to enter college and plenty in the
school system help students navigate the path to enroll. But this is
not done for students interested in finding jobs in the trades.
Secondary schools often present apprenticeship programs, on-the-job-
training options, or trade schools as vague ideas. And students are not
shown the specific pathway to these alternative, but equally
worthwhile, options.
Our workforce division has read construction related books to
students in kindergarten and 1st grade. They have built mini-toolboxes
and birdhouses with students in 2nd and 3rd grades. We fund and
organize CTE career exploration days for school districts that
highlight the CTE options available in the local high school for 5th
and 6th grade, before kids even really think about their high school
schedule. We then check back in with kids in 7th and 8th grade and
start talking about specific careers rather than skillsets. In the high
schools, we are invited to give presentations showing how kids can take
what they are learning in their CTE classes and turn those into a
career.
We are involved with our community college programs that help
support construction as well as have partnered to start programs not
offered but that support careers desperately in need. Finally, our
workforce division in our local AGC chapter has a strong relationship
with the construction management and engineering programs at University
of Wyoming (UW). Our members host their students as interns in the
summer to provide real life work experience to support their classroom
learning. A few of us from AGC of Wyoming are invited to UW to give
industry insight presentations and we are represented on their advisory
boards.
All of this is to highlight that to solve this workforce problem,
the AGC of Wyoming has created a long game strategy that is only three
years old. We are already starting to see it make a difference in
recruiting high school graduates from trades programs into our industry
and hope that as these partnerships continue and we continue to support
our schools and CTE teachers, we can create the kind of pipeline that
provides well-paying careers to Wyoming citizens and helps Wyoming
contractors meet the states construction demands.
The outlook for construction in 2024 is mixed
AGC recently released the survey results from its members on the
economic outlook for construction, A Construction Market in Transition:
The 2024 Construction Hiring and Business Outlook.\5\ Demand for
different types of projects is changing. Respondents to this year's
Outlook survey are less confident about growth prospects for many
market segments than they were a year ago. They are most optimistic
about a range of public-sector market segments, including water and
sewer projects, transportation, federal, and bridge and highway work.
Conversely, they predict private sector demand will be less robust for
segments like manufacturing and multifamily residential and will
decline for lodging, retail, and private office construction.
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\5\ The 2024 Construction Hiring and Business Outlook, https://
www.agc.org/news/2024/01/04/2024-construction-hiring-and-business-
outlook
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While contractors remain mostly upbeat, their top worries for 2024
include fears about the impacts of higher interest rates on demand for
construction and the risk that the economy could enter a recession. In
addition to these new worries, contractors remain concerned about
workforce shortages and their impact on construction prices and
schedules. Contractors continue to see projects being delayed--
sometimes indefinitely--because of rising costs, slower schedules, and
shrinking demand for the finished products.
III. Regulatory Burdens Create Uncertainty and Further Increase Costs
Confusion surrounding new Build America, Buy America Act (BABAA)
requirements
As you know, the IIJA included new Buy America requirements. This
legislation significantly broadened domestic sourcing requirements for
infrastructure projects receiving federal aid. While AGC supports
efforts to enhance American manufacturing capabilities, it is
imperative that such efforts be implemented with clarity and without
imposing undue burdens on those responsible for procuring materials in
the construction of our nation's infrastructure.
Unfortunately, the Office of Management and Budget's (OMB)
implementation process, commencing with preliminary guidance on April
18, 2022, and culminating in the final guidance released on August 23,
2023, has been characterized by hasty implementation processes and
requirements that were inadequately considering existing manufacturing
capabilities, material delivery times, and the administrative changes
necessary to comply with the new mandates.\6\ \7\
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\6\ M-22-11 Memorandum for Heads of Executive Departments and
Agencies, https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-
11.pdf
\7\ Guidance for Grants and Agreements https://
www.federalregister.gov/d/2023-17724
---------------------------------------------------------------------------
The recent Requests for Information (RFI), issued by various
agencies, including the U.S. Department of Transportation (DOT),
Environmental Protection Agency (EPA), and the Department of Housing
and Urban Development (HUD), exemplifies how the Administration has
imposed requirements on states and contractors without a comprehensive
understanding of the availability of various manufactured products
essential to infrastructure construction.\8\ Although BABAA
requirements have been incorporated into contracts since May 14, 2022,
federal agencies are still in the information gathering phase, as
evidenced by activities like this RFI occurring as recently as last
month.
---------------------------------------------------------------------------
\8\ Request for Information Regarding Products and Categories of
Products Used in Water Infrastructure Programs https://www.epa.gov/
system/files/documents/2023-11/epa-hq-ow-2023-0396-0001.pdf
---------------------------------------------------------------------------
The Administration is always quick to point to the waiver process
outlined in BABAA and how it has 15 days to approve or reject waivers.
However, OMB's implementation of the waiver process and historical
precedent with waivers tells a different story. AGC is concerned that
this system will result in project delays or incentivize the use of
substandard materials.
For example, FHWA posted a waiver for comment on August 28, 2023,
that was submitted by the Illinois Department of Transportation (ILDOT)
for non-domestic pumps. However, the waiver was submitted by ILDOT to
FHWA on May 21, 2021. How are U.S. DOT and the White house supposed to
determine if there are domestic manufacturers or not if the public is
not made aware of the waiver request for nearly two and a half years?
Furthermore, a memorandum released by OMB on October 25, 2023,
mandates that federal agencies notify and consult with the Made in
America Office before posting proposed waivers for public comment.\9\
This additional requirement is poised to further extend the timeline
between a project stakeholder's waiver request and the public's
opportunity to comment on its necessity.
---------------------------------------------------------------------------
\9\ M-24-02 Memorandum for the Heads of Executive Departments and
Agencies, https://www.whitehouse.gov/wp-content/uploads/2023/10/M-24-
02-Buy-America-Implementation-Guidance-Update.pdf
---------------------------------------------------------------------------
It is important that all Buy America waivers get equal treatment
whether it is for an electric vehicle charger, a transit system, or a
roadway project. Likewise, the waiver process must be depoliticized. If
a waiver is granted, it does not mean that the Trump Administration or
Biden Administration does not care about domestic manufacturing or
American jobs; it means that they also care about American construction
jobs and want to rebuild America's infrastructure as promised under the
IIJA.
Again, AGC is supportive of efforts to expand domestic
manufacturing efforts and its members help build those manufacturing
projects. However, we are concerned that reality of the timeline
necessary to attract and build a stronger domestic manufacturing sector
will come at the expense of construction jobs because of project delays
caused by an opaque, politicized, and lengthy waiver process.
Greenhouse Gas Performance Measure
At the end of 2023, FHWA finalized a rule to establish a greenhouse
gas performance measure. During debate of the IIJA and prior surface
transportation laws, Congress considered proposals that would provide
FHWA with the authority to create a performance measure on greenhouse
gas emissions but ultimately rejected them. AGC believes \10\ that this
greenhouse gas performance measure would be a one-size-fits-all mandate
that would limit a state's ability to choose transportation projects
that fit its unique needs.
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\10\ https://www.agc.org/sites/default/files/Files/
Govt%20Regulations%20and%20Executive
%20Orders/AGC%20-%20FHWA-2021-0004-0001%20GHG%20Emissions-AGC-8G4WL63-
2.pdf
---------------------------------------------------------------------------
While FHWA keeps touting that there are no explicit penalties for
states that fail to meet their targets, the rule does state that
``State DOTs and MPOs that set a declining target but fail to achieve
their targets can satisfy regulatory requirements by documenting the
actions they will take to achieve that target in their next biennial
report.'' It goes on to say states must ``provide data-supported
explanations for not achieving significant progress, and their plan to
achieve said progress in the future.'' AGC believes that states will
have to explain to FHWA how they will reduce carbon dioxide emissions--
i.e., make climate-friendly project selections at the behest of road
and bridge projects.
This new rule will make it challenging for a state like Wyoming to
connect people to jobs, healthcare, and education. The transportation
needs faced by Americans living in urban areas are not the same as
those living in rural parts of the country. Requiring New York to
invest in the New York City subway or build more bike lanes rather than
a roadway project might work for the transportation needs of their
state. In Wyoming, these climate-friendly projects are usually
impractical and inefficient.
Disadvantaged Business Enterprise (DBE) Program
As you know, the DBE program was originally established by
regulation in 1980.\11\ It plays a pivotal role in fostering diversity
and inclusion in the construction industry by ensuring that certified
small businesses owned and controlled by socially and economically
disadvantaged individuals can compete for federally funded highway,
public transit, and airport projects. In the years since it was
established, Congress included provisions in certain transportation
laws, including most recently the IIJA, that created goals for a
certain amount of federal funding to be expended through DBEs.
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\11\ U.S. DOT Disadvantaged Business Enterprise Program, https://
www.transportation.gov/civil-rights/disadvantaged-business-enterprise
---------------------------------------------------------------------------
U.S. DOT is currently finalizing a new rule on the DBE Program. AGC
represents DBE and non-DBE firms and has identified \12\ many areas of
agreement on how to improve the DBE program. For example, we are
pleased that U.S. DOT is proposing to increase the personal net worth
cap and exclude retirement assets from the calculation. DBE firms
should be able to grow without punishing the owner of the company for
planning for retirement. Likewise, we are pleased that the U.S. DOT is
taking steps to streamline the interstate certification process. This
will enable these small companies to focus more of their time and
resources on running their construction companies and not forcing them
to spend time on a duplicative paperwork process.
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\12\ https://www.regulations.gov/comment/DOT-OST-2022-0051-0418
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AGC supports better alignment of the DBE program with the federal
small business program under the Small Business Act. However, AGC warns
U.S. DOT against a wholesale substitution of the existing rules for DBE
size determination with that of the U.S. Small Business
Administration's (SBA) without careful consideration and study.
AGC believes that U.S. DOT should ensure that DBE availability and
capacity in an area does not diminish, which would undermine efforts to
achieve programmatic goals. That is why AGC supports aligning the DBE
statutory size standard--currently capped at $28.48 million gross
annual revenue--with NAICS code 237310 (Highway, Street, and Bridge
Construction) \13\ that sets a $45 million cap and is revised for
industry trends and inflation at least every five years by the SBA.
---------------------------------------------------------------------------
\13\ Small Business Administration, Table of Small Business Size
Standards, https://www.sba.gov/sites/default/files/2023-06/
Table%20of%20Size%20Standards_Effective
%20March%2017%2C%202023%20%282%29.pdf
---------------------------------------------------------------------------
And, rather than limiting DBEs to certain sub-sizes as specialty
contractors--as NAICS codes for specialty contractors are generally
capped at a $19 million gross annual revenue threshold--AGC supports
maintaining just the one singular code and its accompanying threshold
to avoid administrative confusion that could lead to DBEs being
prematurely removed from the program. Also, DBE contractors can work as
prime contractors on some transportation construction contracts and
specialty contractors (i.e., subcontractors) on others. That
flexibility maximizes their opportunity to bid on and win federally
assisted transportation construction contracts. Such a change is not
unprecedented. In fact, Congress enacted this approach in section 150
of the Federal Aviation Administration Act of 2018 for that mode's DBE
program.
As it stands, however, NAICS codes for the specialty construction
sector were designed for vertical building construction, not
transportation construction contractors. These codes do not account for
the fact that in transportation construction, jobsites can span many
miles and require more heavy equipment than for constructing a
building. For example, to face a cap of $19 million can be especially
challenging for a structural steel contractor that specializes in
bridge work, as steel remains at elevated prices, is a ubiquitous
material in bridges and whose placement requires significant investment
in heavy equipment.
Instead of allowing room for DBE contractors to grow, the current
size requirement is handicapping their success. Instead of making it
easier for prime contractors to utilize specialty DBE firms, it is
making it more difficult. Finally, it is making it harder for states to
meet or even exceed their DBE goals by limiting the work these DBE
firms are able to perform. AGC looks forward to working with Congress
and U.S. DOT to address the unintended consequences of the current use
of NAICS codes in transportation construction.
From Reiman Corp perspective we struggle to obtain our Highway
Departments DBE goals because of the low number of DBEs who actually
bid and perform work for us in the state. Many of our DBEs are only
capable of performing a few projects a year. Another obstacle for many
of our DBEs is that they are small businesses with limited office
personnel and struggle to fill out and compile the federal paperwork
for the projects.
Implementing Environmental Review and Permitting Reforms
Infrastructure funding has historically been a major roadblock for
infrastructure projects to break ground. While recent investments in
infrastructure have largely appeased that concern, there are other
challenges that exist.
AGC believes a great way to maximize federal investment in
infrastructure would be to fully implement the environmental review and
permitting reforms that have been passed by congress in the IIJA and
the Fiscal Responsibility Act. The complicated operations of these
current laws and the intersection of their requirements can delay
projects that would improve the overall safety and efficiency of the
surface transportation system. By implementing these provisions, we
believe the time and costs associated with delivering projects will be
reduced without jeopardizing environmental protections.
The White House Council on Environmental Quality (CEQ) has
implemented a few permitting efficiencies directed by Congress in the
Fiscal Responsibility Act of 2023--like setting deadlines and page
limits for agencies' reviews and adding a process for a federal agency
to use another agency's categorical exclusion.
Unfortunately, CEQ also added new language that would undercut
important modifications made in the past specifically aimed at limiting
the endless analysis of unquantifiable environmental harms and benefits
and, conversely, introduce ``innovative approaches to NEPA'' that
direct National Environmental Policy Act (NEPA) reviews toward the
Biden Administration priorities of climate change and environmental
justice.
AGC is concerned that CEQ's changes add bureaucratic steps in an
already onerous and slow process, require more time-consuming analyses,
and increase litigation risk for project decisions. Additionally, the
association is concerned that the changes will encourage agencies to
impose requirements that go beyond CEQ regulations and would slow
agency decision-making and discourage the transformational investments
needed across the economy.
Federal agencies are not just making changes to NEPA, they are
systematically reversing all streamlining reforms from recent years as
well as introducing additional requirements that will delay projects.
This can be seen in the major permitting programs such as Clean Water
Act section 404 permitting, section 401 water quality certifications,
threatened and endangered species, and migratory birds.
The promises to deliver timely and sorely needed infrastructure
under the IIJA and the Inflation Reduction Act will be significantly
challenged if projects are delayed and, in turn, face steep cost
increases that block their construction. These delays will make it
harder to achieve climate change goals, to make infrastructure more
resilient, and to better prepare and protect communities from natural
disasters, especially disadvantaged communities.
IV. Results of Infrastructure Spending
IIJA Funds Have Been Mostly Used for Repaving and Repairs
When Congress debated and passed the IIJA, they got it right by
prioritizing long term certainty and an increase in funding. This gives
states and construction companies long-term certainty to plan for major
projects. This contrasts with the American Recovery and Reinvestment
Act of 2009 which provided a one-time infusion of funds and prioritize
projects that were ``shovel ready.'' \14\ As a result, that legislation
did not lead to major infrastructure projects being completed.
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\14\ U.S. DOT American Recovery and Reinvestment Act Final Report,
https://www.transportation.gov/sites/dot.gov/files/docs/
American%20Recovery%20and%20Reinvestment
%20Act%20Final%20Report.pdf
---------------------------------------------------------------------------
From a construction standpoint, our members report that most of the
IIJA funding to date has been for much needed repairs and repaving of
roadways. While our members are hard at work rebuilding the nation's
infrastructure, it's also crucial to recognize that the current focus
on repairs and reconstruction in the early stages of IIJA are partly
due to the intricate nature of initiating significant new projects.
Unlike repair and reconstruction efforts that can more swiftly address
existing infrastructure issues, large-scale projects often necessitate
an extended period in the design phase and working their way through
environmental reviews and permitting processes. As evidenced by AGC's
2024 Construction Outlook Survey, transportation contractors are very
optimistic that there will be a large number of construction projects
breaking ground soon.\15\
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\15\ 2024 Construction Hiring and Business Outlook https://
www.agc.org/news/2024/01/04/2024-construction-hiring-and-business-
outlook
---------------------------------------------------------------------------
While often hailed as historic, IIJA should not be viewed as a
singular achievement but rather as a model for future funding. If
Congress had not passed the IIJA, contractors engaged in civil
construction would likely have seen a cut of 20-30% in the work they
were able to bid on. The sustained commitment to long-term certainty
and increased funding provided by the IIJA sets a precedent for
proactive planning and execution of major projects. By making this
level of investment a recurring norm, Congress can ensure a continuous
pipeline of infrastructure improvements, fostering economic growth and
bolstering the resilience of the nation's vital transportation systems.
Provide Flexibility to States to Meet their Transportation Needs
Secretary Buttigieg stated,\16\ ``No one understands a community's
needs better than those who live there.'' AGC agrees that U.S. DOT must
continue to provide state and local governments with the flexibility to
address and prioritize their unique transportation needs as Congress
intends. As each area of our country is diverse and unique, so are the
transportation needs of each community. When standardized
transportation solutions do not work in a community, too often the
contractor gets blamed despite usually not being involved in project
selection or the design of a project.
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\16\ U.S. DOT, Biden-Harris Administration Launches New Program to
Help Communities Seek Infrastructure Projects, https://
content.govdelivery.com/accounts/USDOT/bulletins/330d4ed
---------------------------------------------------------------------------
Historically, the federal-aid highway program has been federally
funded and state administered with over 90 percent of the highway
funding going to states via formula.\17\ This ensures maximum
flexibility for states to address their transportation needs and allows
them to ``flex'' funding between programs when necessary. We ask that
Congress continue to prioritize formula funds and state flexibility in
future surface transportation reauthorizations.
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\17\ FHWA, Bipartisan Infrastructure Law, https://www.fhwa.dot.gov/
bipartisan-infrastructure-law/summary.cfm
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In my state of Wyoming, a total of 17% of our major roads are in
poor or mediocre condition.\18\ This ends up costing Wyoming motorists
$151 million a year or $356 per driver in the form of repairs,
accelerated vehicle depreciation, and increased fuel consumption.\19\
In addition, the federal program is essentially the state program. We
rely so heavily on the formula dollars that are provided in highway
reauthorizations to repair our roads and bridges that we are barely
able to provide the non-federal share required for use of these funds.
---------------------------------------------------------------------------
\18\ TRIP, Key facts about Wyoming's surface transportation system,
https://tripnet.org/
wp-content/uploads/2020/04/TRIP_Fact_Sheet_WY.pdf
\19\ TRIP, Key facts about Wyoming's surface transportation system,
https://tripnet.org/
wp-content/uploads/2020/04/TRIP_Fact_Sheet_WY.pdf
---------------------------------------------------------------------------
V. Conclusion
Construction companies have a mixed outlook for 2024 as
expectations for demand remain mostly positive, but less upbeat than
last year amid new challenges.
While we have not yet seen a large increase in projects to bid on
as a result of the IIJA, we remain optimistic the robust funding levels
provided in the law will mean more construction projects breaking
ground in the next few years.
The IIJA provides market opportunities for transportation
contractors, heavy contractors, building contractors and utility
contractors. And most importantly, it demonstrates to our existing and
future workforce that there is sustainable work in the years to come.
If Congress did not pass the IIJA, the impacts on transportation
contractors would have been significant with likely a cut of 20 to 30%
in projects by the states.
I thank the Committee for the opportunity to testify today and
appreciate its continued efforts to help improve our nation's
infrastructure via enacting policies that create good paying jobs in
America. I look forward to answering any questions you may have.
Appendix
Table 1
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Table 2
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Table 3
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Rouzer. Well, thank you so much, Ms. Benford, and thank
you to each for your testimony.
We now turn to questions from the panel. I will recognize
myself for 5 minutes for questions. And as usual, I have more
questions than there is time, so, I will try to shoot through
this.
For each of you, the attacks on the cargo vessels in the
Red Sea and the ripple effect on the global supply chain, what
impacts have you noted in your industry since the beginning of
these attacks?
Mr. Edwards.
Mr. Edwards. Thank you, Chairman. The initial impact is the
delay in vessels arriving, both in Asia and coming back to the
United States, and the redeployment of ships to cover those
slots elsewhere.
So, international ocean carriers are rescheduling all of
their ships and coming around Africa. There is a short-term
effect to that, as everybody replaces ships into the schedule.
It will settle into a pattern of ships being in a longer
transit. And in the case of Southeast Asia to the east coast,
that will be probably 7 days in each direction of a longer
transit. It is, of course, more acute for exporting into the
Middle East or exporting into the Indian subcontinent. And with
that scarcity of supply of assets is undoubtedly going to come
some higher prices to users of those ocean carrier services.
So, I think we should also recognize that the fastest
growth in trade in the last few years has been the Indian
subcontinent and Southeast Asia, as people have moved to an
Altasia supply base. So, it is challenging, one of the highest
growth areas within our trade.
Mr. Rouzer. So, that extra 7 days, does that equate to 20
percent in extra costs, 30 percent, 10 percent? And do you have
a roundabout figure?
Mr. Edwards. I do not. The actual time, depending on the
individual circumstances, you can take the view on current fuel
prices that the extra 7 days can be offset by the loss of the
Suez Canal fees. That is not true for Asia-Mediterranean or
Asia-North Europe.
And of course, the scarcity of assets, you would have to
ask the ocean carrier on an individual basis. Some can fill
those gaps, some cannot.
Mr. Rouzer. Mr. Millar, do you have any thoughts on this?
Mr. Millar. Mr. Chair, it is an emerging issue that has yet
to impact us, but we are certainly tracking it. And our concern
is cost escalation.
Mr. Rouzer. Mr. Tucker?
Mr. Tucker. Mr. Chair, another association that I represent
as a committee chair is the National Industrial Transportation
League. And I spoke to the league yesterday about this, and it
is a concern because of the long time it takes to move around
Africa, if that is the direction you are going.
The other concern is that there are special fees that are
being granted the ocean liners by the FMC. And there is just
some concern among shippers that maybe those fees are not
always applicable to the situation. And nothing specific that
they can necessarily point to, but there is a concern there
that they would love a little bit of oversight and explanation
around.
Mr. Rouzer. Ms. Benford?
Ms. Benford. I would echo Secretary Millar's words that
this is something that we will be watching. When the supply
chain does have disruptions, we will usually see effects of it,
but at this time, we are not.
Mr. Rouzer. So, as the committee begins to develop the next
proposal to reauthorize our Nation's surface transportation
programs, can each of you provide a few priorities--let's say
one or two--that this committee should consider to ensure
infrastructure investments contribute to the overall economic
development, safety, and prosperity of the country?
Mr. Edwards, I will start back with you.
Mr. Edwards. Certainly, Mr. Chairman. I would ask first
that you move forward on the Water Resources Development Act,
in particular, for the navigation of channels. That is critical
to most ports. I would say that there are--just about every
coastal port has some dredging requirements going forward, and
we, in particular, have some requirements within the Water
Resources Development Act for some authorizations, as well. So,
that would be the first one.
I think the second one that I would take is really--just to
allow the Bipartisan Infrastructure Law to be acted on
quickly--are areas where we need to modernize, in particular on
NEPA and in particular with the Maritime Administration, where,
by example, the Maritime Administration has not updated its
categorical exclusion since 1985. There is a need for
modernization.
Mr. Rouzer. Real quickly, Mr. Millar.
Mr. Millar. Safety, sir. Safety, safety, safety. The
combined budgets of the 52 DOTs in the United States is about
$200 billion a year. Crashes cost our economy $1.4 trillion a
year, seven times the combined budgets of all the DOTs. If you
are going to invest in something that would pay a return to the
economy in the reauthorization, I would strongly suggest
safety.
Mr. Rouzer. Mr. Tucker and Ms. Benford, I have got about 30
seconds.
Mr. Tucker. I echo the secretary's response, except with
regard to fraud. And really, this committee encouraging FMCSA
to work on safety, safety, safety, and less on commercial
terms.
Mr. Rouzer. Ms. Benford?
Ms. Benford. I would say maintain the formula funding to
sustain flexibility for our States to utilize funds in the best
way that they need.
Mr. Rouzer. Thank you very much.
Mr. Larsen, you are recognized.
Mr. Larsen of Washington. Thank you, Chair.
And sort of following on that last question from the chair,
I want to start with a kind of basic question: Is it too early
to start thinking about the next infrastructure bill?
Secretary Millar.
Mr. Millar. Mr. Larsen, I started thinking about the bill
the moment the President signed the last bill.
[Laughter.]
Mr. Larsen of Washington. Give us time, man.
Mr. Millar. It is not too late to start thinking about
authorization.
Mr. Larsen of Washington. Too early.
Mr. Millar. We are fortunate that the Congress, in its
wisdom, has a multiyear authorization in the transportation
space. But the ramping-up for a sustained level of investment
requires more than 5 years. It requires--it takes generations.
We are asking contractors to invest in equipment. We are asking
consulting firms to staff up and buy materials and the like.
Knowing that there is going to be a robust and sustained level
of Federal commitment in the transportation space enables us to
do our job better and more efficiently for the people we serve.
Mr. Larsen of Washington. We have had that issue every time
we have tried to do reauthorization. I am glad we were able to
do it, but perhaps, Ms. Benford, you can talk a little bit
about your comment with regards to--this is not a quote, but I
will just try to paraphrase--we are just now starting to be
able to invest as contractors in the longer term, in the
rebuild, as opposed to just the repair.
Ms. Benford. Right. So, currently, a lot of these projects
are in design, right? So, we haven't seen a lot of them come
out to bid. And so, we are really expecting that this will hit
us in the next year, as contractors, to bid this work. And then
it will be a 5- to 6-year process for us to complete this work.
And I think it is important. No, it is not too soon to
start thinking about another bill because, as the secretary
mentioned, we are working really hard to ramp up our workforce,
and there is a lot of excitement in our industry right now as
they see that there is a sustainable amount of work for them to
complete. And so, I think it would be beneficial to let the
workforce know that it is a long-term game, not just this next
5 to 10 years.
Mr. Larsen of Washington. Yes, I know--and this is signed--
the President said this is a once-in-a-generation opportunity.
I would like to think, like, this is a pretty boring, once
every 5- to 6-year opportunity that we just routinely do, as
opposed to every generation. So, hopefully we can get to that
point.
Mr. Tucker, from a supply chain perspective, how would you
characterize the BIL, and specific areas that are perhaps where
the TIA is looking at?
Mr. Tucker. Sure. I hesitate to sound like a broken record,
but again, some of the issues with regard to safety----
Mr. Larsen of Washington [interrupting]. Repetition is not
a bad thing.
Mr. Tucker. Yes, yes, so----
Mr. Larsen of Washington [interrupting]. It takes us a
while to absorb what you all are hearing, and hearing it over
and over again is a good thing.
Mr. Tucker. Former Administrator Anne Ferro appointed me
once to a committee helping FMCSA, so, I got to really know and
appreciate. And one of my good industry friends is a former
Administrator of FMCSA, so, I got to know and like and
appreciate the people there. But I think from time to time,
what happens in Washington, they get clouded by lots of
different ideas that may or may not be important or relevant to
safety. So, that is that is a concern.
But specific to your question, and specific to
infrastructure, I will tell you that what we are seeing is--and
I don't know how many Members here have been to the border, to
Laredo, the crossing. I have been there, I toured it, and it is
a heck of a thing.
But I am here to tell you, too, that there is a tremendous
amount of manufacturing being brought back to the Americas, in
particular to Mexico, due to all of our tensions with China,
all of the concerns around single point of failures with regard
to critical goods that we were only buying from China. So, that
crossing, all of the Mexican crossings, are going to be--that
is--talk about a generational thing, that is happening right
now. And we all know how much freight came from China and the
Far East. A lot more of it is going to be coming through the
borders. And of course, we have security concerns there, as
well.
Mr. Larsen of Washington. Thanks. I would note by
Washington you mean Washington, DC, and not the great State of
Washington.
Mr. Tucker. Not the great State, no.
Mr. Larsen of Washington. Where we have no problems.
Mr. Tucker. Thank you for the clarification.
Mr. Larsen of Washington. Sure.
[Laughter.]
Mr. Larsen of Washington. Mr. Edwards, you mentioned the
Water Resources Development Act, and we are going to be moving
on that fairly soon here. From a broader perspective, what
would you want us to know about passing WRDA 2024?
Mr. Edwards. I think we asked the question about what next
on BIL, from a funding perspective. I believe there is about
$5.2 billion for ports within the Infrastructure Investment and
Jobs Act. That is more money than has ever gone into the port
sector from the Federal Government. So, this is a generational
opportunity for ports to make their upgrades.
I do believe that certain parts of that will have to
continue over a significant amount of time, particularly as we
look at energy hubs. Energy hubs are somewhat new for a number
of port sectors, and it will require multiyear--we are going to
have to be pretty strict at sticking to the task to make those
energy hubs work.
Mr. Larsen of Washington. That's great. Thanks. Thanks so
much.
I yield back.
Mr. Rouzer. Mr. Crawford.
Mr. Crawford. Thank you, Mr. Chairman.
The Federal Highway Administration recently released a
final rule to require States and metropolitan planning
organizations to establish a new performance measure with
declining targets for carbon dioxide emissions attributed to
the National Highway System. It pursued that rule, despite the
fact that they didn't have the authority to do so. In fact,
that was considered and rejected in IIJA negotiations.
Further, the Federal Highway Administration also rejected
concerns about that issue from rural America. It seems like
rural States, where the largest cities are, by comparison,
small towns, you can't meaningfully reduce carbon emissions by
building a subway or a bus rapid transit system to attempt to
reduce commuter automobile traffic, even if it was affordable.
I live in a town, the biggest town in my district. It is almost
80,000. That is a pretty small town, by most people's
definition. Even though we have a Starbucks, we are still not a
full-fledged metropolitan area.
So, my question is to Ms. Benford: Do you feel this new
regulation will impact your ability to deliver projects?
Ms. Benford. Yes, I would agree with that. We do feel that
the Federal Highway Administration chose to treat each State as
the same.
And I will echo your words. I am from Wyoming. Emissions
are a fraction of the amount of carbon dioxide emissions
compared to more populated States that we produce, and so, we
are concerned what that impact will be on our DOT, what
projects they will have to limit to try and meet those
standards.
Same for us, we don't have subways. Bike paths between our
communities would be hundreds of miles. And with the weather,
extreme weather that we have, just an example: from Cheyenne to
Laramie, 45 miles, and you could leave Cheyenne at a 70-degree
temperature, go over the pass, and it could be 30 degrees and
snowing. So, a bike path in these types of communities would
not be relevant.
Mr. Crawford. So, I think you answered my question in your
comments there, but let me ask this. Are you concerned the
administration will actually use this rule as a roundabout way
to influence project selection?
Ms. Benford. Yes.
Mr. Crawford. Yes, that is my concern, as well. I want to
stay with you for just a second here, Ms. Benford.
The administration is requiring project labor agreements,
and we are hearing about that from contractors, the potential
for slowing down the construction process and so on. Can you
talk about how that may be impacting your ability to get things
done?
Ms. Benford. So, I am aware that PLAs are being impacted.
We do not do direct Federal contract work, so, it is not
something that is impacting us currently.
Mr. Crawford. Broadly speaking, is that an issue that
affects your membership?
Ms. Benford. Yes.
Mr. Crawford. And how so?
Ms. Benford. I think people are concerned about how it will
affect the way that they do work and limit the way they do
work.
Mr. Crawford. Not long ago, Secretary Buttigieg was
testifying before this committee. I made a point of asking him
about the glacially slow pace of awarding grants. Earlier this
month, Eno Transportation published a story highlighting that
issue. It read in part, ``While new appropriations and new
grant selection press releases have gone up, the rate at which
U.S. DOT and selectees have been able to negotiate and execute
grant agreements has actually gone down.''
One culprit seems to be the increased construction costs,
essentially because grant application processes take so much
time. A project often ends up costing more than the original
projection by the time a sponsor learns that it has actually
been selected for a grant. I think that is very concerning,
when we consider how inflation has driven up construction
costs.
In your experience, Ms. Benford, have you noticed a delay
in DOT's rollout of its grant programs?
Ms. Benford. So, Wyoming actually doesn't get to
participate in a lot of the discretionary grants because we
actually struggle to match the Federal funding. Currently, our
local AGC chapters are working with our State legislature to
increase our funding, but--so, that is not something that we
get to utilize as much as we would like.
Mr. Crawford. So, in the State of Wyoming, you are kind of
behind the eight ball simply because you don't have the
population that can fund the match required to participate in
some of those grant programs. I get that, but let me ask you
this. How has inflation impacted construction costs, generally
speaking?
Ms. Benford. I would say that it really hasn't. Right now
we haven't seen the work. Again, this is a 5-year kind of
rollout. So, inflation really hasn't impacted the IIJA. It has
impacted the work and the cost of the work, and that is just
something that you have to pay attention to, you have to be
planning, you have to schedule to make sure that your materials
are onsite, and roll out the project as bid.
Mr. Crawford. Thank you. I yield back.
Mr. Rouzer. Ms. Norton.
Ms. Norton. Thank you, Mr. Chairman. This is a question for
Ms. Benford and Secretary Millar.
A common theme of today's testimony is the need for more
workers to build and maintain the projects funded by the
Infrastructure Investment and Jobs Act. I appreciate Mr.
Millar's testimony regarding the growing participation of
disadvantaged business enterprises in Washington State, and Ms.
Benford's discussion of her efforts to teach young students
about construction sector career opportunities.
Throughout my service in Congress, I have worked to
increase workforce development opportunities for District of
Columbia residents, including helping to establish an
opportunity center at St. Elizabeths in ward 8 of the District
of Columbia, and to help residents get jobs and apprenticeships
at the development of Homeland Security headquarters
consolidation project.
The Infrastructure Investment and Jobs Act included
significant workforce policy changes, including reinstating
local hire authority, allowing highway formula funds to be used
for workforce development, and dedicating funds from every
zero-emission bus grant for worker training.
Mr. Millar and Ms. Benford, as well, beyond what we have
done in the Infrastructure Investment and Jobs Act, what else
should the committee be doing to support workforce development?
Mr. Millar. Thank you for the question, Ms. Norton. In
Washington State, we have a robust pre-apprenticeship support
services program that we are funding with State revenue today.
I would love to use Federal revenue in that space, but we have
more flexibility with our State revenue.
We are working with community colleges. We are working with
ministerial alliances. We are working with Native American
Tribes. We are working with labor unions. We are working with
contractors on getting people into the construction workforce.
And that pre-apprenticeship support services work we do,
the one I am most proud of right now is something we did called
Youth Direct, where we partnered with the Ironworkers Union. We
took young men and women who were aging out of juvenile justice
and foster care. When they turn 18, they would typically go out
on the street. When they turned 18, these men and women came
into our pre-apprenticeship support services program, and after
4 weeks, they graduated on a Friday. On Monday, they were
apprentice ironworkers, and we provided them with first and
last month's rent and a security deposit so they had a good-
paying job and a place to live. It costs us about $2,500 per
individual--$2,500 per individual--to run them through that
program, which we got a little criticism for. And I like to
point out to the critics that that is a lot less than it costs
to be a guest of our department of corrections on an annual
basis.
So, we know what we need to do. We need more and more
flexible resources to do more work in that space. It is helping
those individuals, and it is providing critical staffing for
our contractors, for our maintenance crews at our agency, and
elsewhere in the construction sector.
Ms. Norton. Ms. Benford?
Ms. Benford. As a woman in this industry, the diversity
topic is very dear to me. I can tell you that both the AGC and
local chapters have taken on different ways to take on this
challenge.
The culture of care is one that the AGC of America has
taken on, which really helps us contractors determine how to
create an environment in the construction industry that
everyone feels accepted. And I think--keep echoing that this is
something that we need to do, right, and what you can all do
for us is make sure that we have the flexibility to do what is
right in our State, because not one policy fits every single
State and our workforce.
Ms. Norton. Mr. Millar, we are in the early stages of a
transition to zero-emission vehicles. This past summer, the
national capital region's transit agency received a $104
million grant from this Infrastructure Investment and Jobs Act.
Mr. Millar, what additional actions should Congress take to
smooth the transition to zero-emission vehicles?
Mr. Millar. Ms. Norton, I think the actions you have taken
in the Bipartisan Infrastructure Law, just sustaining that, is
the important thing to do.
We are seeing more electric vehicle charging stations being
installed. We are working with the trucking industry on
electric vehicles and hydrogen fuel cell vehicles. We are
creating corridors, working with our colleagues in Oregon and
Washington. We have a zero-emission vehicle corridor on the
Interstate 5 corridor, we are putting a heavy truck corridor in
place in addition to that.
So, it is sustaining the effort over multiple acts is what
is going to do it for us.
Mr. Rouzer. The gentlelady's time has expired.
Mr. Webster.
Mr. Webster of Florida. Thank you, Mr. Chairman, for
holding this topical hearing as we head into the new year. This
is great.
Currently, most of the major infrastructure funds are
invested in projects not in the United States, outside the
United States. The largest opportunity for infrastructure
investment is in another country globally, not here. And
therefore--and that is because of--there are some regulatory
issues, but also the fact that we just don't have an
infrastructure bank. And that is a shame. Consequently, the
United States runs a risk of getting behind, if we are not
already falling, and maybe falling further behind our friends
and our foes in the area of infrastructure.
I, along with Congressman Allred, filed a bill called H.R.
490, which is the Federal Infrastructure Bank Act, and it would
establish a Federal infrastructure bank. The funds don't have
anything to do with the Federal Government, State government,
or local government. It is all private money, and it is
privately financed, nationally chartered, though.
It is a wholesale bank, and the funds could be used for
infrastructure projects with no cost to the taxpayer. It's just
an idea, it's not the solution, it's just an idea of new money.
It would fund domestic projects that would otherwise not have
been funded. We see it as a fantastic opportunity to do
something a little different, to take a lot of the money that
is spent overseas and maybe bring it back to the United States
and make it a more competitive, worldwide approach.
Let's see, Ms. Benford, could your company and others like
it benefit from enhanced private investment of our national
infrastructure dollars?
Ms. Benford. Can you restate that question? Sorry.
Mr. Webster of Florida. Could your company benefit from the
investment of new private infrastructure dollars?
Ms. Benford. So, we did benefit from the Federal dollars,
yes. We also do benefit from private, as we do a lot of
commercial work and civil work in our community.
Mr. Webster of Florida. Mr. Edwards, can you see the same
thing in ports?
Mr. Edwards. I believe, Congressman, both in the port
sector--the source of funds on how we bond our money or how we
leverage our opportunities, we are always welcoming another
source of money if there is a lower cost of money. So, it
really will come down to the cost of money at the end of the
day, because I wouldn't see it necessarily as a change of how
we create our revenue stream, but more a case of how do we
source money.
Mr. Webster of Florida. Mr. Millar, do you have any
comments about that?
Mr. Millar. Congressman, I do not know the specifics of
your bill. Any new tools in the toolbox are welcome.
I often look at the difference between financing and
funding. It's one thing to have a good financing tool, but I
need funding to make that financing tool work for me.
Mr. Webster of Florida. Yes, well, I guess that's the name
of the game, right, is the money, where is the money.
Mr. Millar. Yes, sir.
Mr. Webster of Florida. Yes. So, Mr. Tucker, do you have
any comments?
Mr. Tucker. Representative Webster, TIA is always looking
for and open to new ideas for increasing the spending and
investment. We feel--and while we are entirely grateful for the
Infrastructure Investment and Jobs Act, we would love to see
more, more done.
Mr. Webster of Florida. Yes.
Mr. Tucker. I don't know the specifics of your bill, like
the secretary, but we are always open for new and innovative
ideas.
Mr. Webster of Florida. Yes. Well, the biggest difference
is the infrastructure bill that we have now is our money,
Federal money, State money, and so forth. This bill would be
private money. No investment by any Government entity, and no
responsibility to finish a project that possibly couldn't be
finished. And so, it's a little bit different, but it is new
money.
Well, anyway, time has run out. I yield back.
Mr. Rouzer. The gentleman yields back. Mrs. Napolitano, you
are recognized.
Mrs. Napolitano. Thank you, Mr. Chair.
Secretary Millar, California and Washington are very
similar in dealing with impacts of cross-state rail and truck
traffic on local communities.
My district specifically has some of the largest trucking
and rail corridors in the country. Grade crossing projects and
projects that improve commuter experience with less interaction
with trucks are very important in my community.
How necessary are grade crossing safety projects and
commuter projects that address the combined truck corridors?
And can you give examples of what Washington has done to
improve the commuter experience in rail in the freight
corridors, and how effective have the Federal grade crossing
elimination and freight programs been? What can be done better?
Mr. Millar. Thank you for that question, Congresswoman.
Freight logistics is hugely important to Washington State.
We are a trade-centric economy, with the Ports of Seattle and
Tacoma and other ports, and a lot of north-south truck and rail
traffic, a lot of east-west truck and rail traffic.
The grade crossing safety funding that we receive from the
Federal Government is invested statewide in making our system
safer. We have a great partner with our Class I's with
Burlington Northern and Union Pacific. We put together a grade
crossing plan for the entire State. We identified the top 50,
and we are funding them and getting those crossings
accommodated.
We are also working on the issue of truck parking. With the
new rules, the electronic logs and the like, we have truckers
pulling over to the side of the road outside of our major urban
areas looking for a place to stop and take that mandatory
break. We don't have enough places for them to park, and local
governments are resistant to permitting additional places for
truckers to park. So, we are identifying spaces in the public
sector. We are talking with cities and counties and others--
including our ports and our shippers--about safe places to
park.
We actually had to pass a law in Washington State requiring
receivers of freight to allow the truckdrivers to use the
restrooms in their facilities because they were not being
allowed. We are entirely dependent on trucking to move goods
and services in our communities, but we are not treating the
truckers with the respect that they need to become a part of
that community.
We have worked with the University of Washington. We have
applied a little AI and the like to a predictive truck parking
model that can give a trucker the likelihood of finding a
parking space 2 to 4 hours in advance, and we are expanding
that work. We have a grant application in partnering with the
States of Oregon and California to look at a predictive truck
parking model for the I-5 corridor.
So, there is a lot going on in that space.
Mrs. Napolitano. Thank you, sir. Again, in your testimony
you discussed the importance of the Federal Government's
support to States for a national EV charging program.
Washington, Oregon, and California are working collectively on
the West Coast Electric Highway program. Can you briefly
discuss the program, how effective is the partnership, and how
important it is to our local, State, and national
transportation systems?
Mr. Millar. Thank you, Congresswoman. The west coast
electric vehicle highway partnership has been in place for more
than a decade now. It started with State investment and with
NEVI. Now we have Federal money going into that program, as
well. The three States have collaborated in that corridor on
what our standards are, what the spacing is, how we invest
public funding and leverage private funding to make that
happen. It is essentially in place along the I-5 corridor from
Baja, California, all the way to British Columbia, and we are
looking at other routes east-west off of that corridor, routes
like 99 in California and 101.
So, that work is advancing. We are working now on a heavy
freight equivalent of that, looking at both battery-electric
trucking, the Class 8 trucks and the hydrogen fuel cells, being
able to provide fueling for them. It's emerging. But the
Federal funding that has come to us has greatly enabled us to
advance all of those agendas faster than we would be otherwise.
Mrs. Napolitano. Thank you for your answer.
I yield back.
Mr. Rouzer. Mr. Bost.
Mr. Bost. Thank you, Chair.
Mr. Tucker, just for an explanation here, Mr. Collins and I
are the two people that actually come from the industry. I was
born and raised in a trucking business. I tell people I came
home from the Marine Corps, I ran it for 10 years, I loved it
for 8. And now my brother runs it.
But we have heard from all over about increasing freight
fraud. And you mentioned that in your testimony, and basically
inserted several times in your testimony. This is devastating
to small businesses and owner-operators, as well. Losing out a
few thousand dollars can actually put them out of business
because they work on such a thin margin. Now, not only is it a
huge problem for small carriers, but it also undermines trust
and stability throughout the supply chain.
Now, you mentioned multiple types of fraud, but have you
seen any action from FMCSA to deter or put a stop to the supply
chain strain and safety risk of rising freight fraud?
And when I say that, they insert themselves into the line,
and you may believe it is a decent broker that you are trying
to work with, and you may be out somewhere and you are trying
to get a back haul or whatever, and then all of a sudden you
get the load, they get the money, and you can't find them. Do
you see anything that is being done right now to try to deal
with this in the industry?
Mr. Tucker. Well, first of all, I heard your and
Representative Collins' backstory, and you are living the
dream.
[Laughter.]
Mr. Tucker. So, great question. The short answer is no. But
if I may clarify, please, I am a freight brokerage. I am not a
carrier. The fraud I see is more--if I wanted to simplify it,
oversimplify it, I would say it's carrier fraud. But it
shouldn't be carrier fraud. This is really important, I think,
for this committee to understand. It should never be seen as
carrier fraud. It should not be seen as broker fraud. These are
just criminals.
And now, I mentioned earlier in my testimony, too, that we
move pharmaceuticals. These are multimillion-dollar, one-
pallet-of-freight loads, right? We know that criminal activity
follows these trucks because they know where the drugs are
made, and they follow the trucks, and they wait for an
opportunity.
So, this is the same kind of individual. It is the same.
They are just criminals. And they are utilizing FMCSA to maybe
sign up as a brokerage. They are signing up maybe as a carrier.
So, please, when we are thinking about this, it is really
important to be thinking about it as criminals using Government
agencies to masquerade as someone else. And in some cases, they
don't even use the agency, they just use a false address. They
could use my address, and they could pretend to be someone that
they shouldn't.
One of the really important things--I go on the radio, I
talk about this on Road Dog Trucking. And one of the things
that I talk about any time I talk to an owner-operator is,
there needs to be more education.
My grandfather started his business with two retired people
in an apartment building in New Jersey, and every single person
from 1961 through today, we do credit checks on. We don't rely
on a, you know, there has got to be some bond, there has got to
be something protecting us. We do a credit check, and we turn
away business that we can't afford to take on because we can't
trust. So, it is really important that you do all of your
homework when you are in business, and that is the longer
answer.
But FMCSA, no, they need to do way more to help us.
Mr. Bost. Yes, and the only other conversation I would like
to have with you, but we don't have time here, is you say there
isn't a driver shortage. If you are out there dealing with it
every day, yes, there is.
And the question I--the only statement I would make towards
that is--and I have made it in this committee before--it
doesn't help with all the States that are legalizing marijuana,
because what happens is, we have a tremendous amount of people
who might be good drivers, but they would prefer to smoke dope
on the weekend, and they can't get clean by Monday. It's not
like having a beer on Sunday during a football game. You pop
positive for 30 days, and then you are without that driver, or
you just don't have that driver.
Mr. Tucker. Yes. I have been I have been fortunate enough
to be getting and keeping data on the active, for-hire motor
carriers for 12 years now, and I am one of the only
organizations that publishes this data on a regular basis. So,
there are over 1 million more drivers driving today than there
were in 2011. There are more than two times as many. There are
about approximately 350,000 motor carriers in business today,
148,000 in 2011.
So, generally speaking, there are wicked driver shortages
if you are a carrier of any large size. But it's because
drivers follow the American dream. J.B. Hunt was a driver, and
now it is one of the largest trucking organizations. So, there
is a spirit of innovation in truck driving, and that is where
drivers are going.
Mr. Bost. Thank you for your testimony.
I yield back.
Mr. Rouzer. Mr. Garamendi.
Mr. Garamendi. Thank you, Mr. Chairman. Listening to the
testimony and the questions, it came to my mind, oh, happy day,
oh, happy day.
Here we are, we find ourselves faced with $1.2 trillion to
invest in infrastructure. And so, the ports can't get it all
done today. So, there are some complaints, to be sure. The
States are trying to push the money out, and the contractor is
faced with a significant increase in contracts available to
them, so much so that the various materials necessary to build
the systems become expensive, demand. Oh, happy day, $1.2
trillion.
The Water Resources Development Act is moving along. Job
shortages? No. People to do the jobs? Not available. Happy day.
People have an opportunity to get a job. There are programs to
train people. Oh, happy day. It is in the legislation that has
been passed.
You think about what has happened over the last 2 years
with legislation. Yes, we have implementation problems, no
doubt about it. But those implementation problems are really
the result of an enormous amount of Federal investment that is
available for the ports, on the dock, in the water, dredging,
rail lines, crossings, States flush with money from the Federal
Government to build the systems.
But yes, there are implementation problems, and contractors
faced with significant demand for the goods and the services to
build the systems. Happy day. Yes, but there is still problems.
I want to go into one of them.
I see my colleague, Mr. Johnson, has left at a most
inopportune moment. Perhaps he will return. But 2 years ago, we
worked on the Ocean Shipping Reform Act. He's back.
Hello, Mr. Johnson, I am about to say good things about you
and the new legislation that we have.
[Laughter.]
Mr. Garamendi. And Mr. Tucker, thank you so very much for
bringing to our attention the issue of the implementation of
the Ocean Shipping Reform Act. Again, happy day. A major piece
of legislation was passed, and now we have to update it. I
would appreciate if you could comment.
Well, I guess this is really to the majority party. Mr.
Johnson, I know you are pushing hard to get this bill off the
floor so that we can put it into the Coast Guard bill. So,
let's see what we can do.
Mr. Tucker, talk to us about the implementation of the
Ocean Shipping Reform Act and the next steps that are in the
bill, and thank you very much for your organization endorsing
the bill. This is 1836.
Mr. Tucker. Thank you. Before I get too deep, I will quote
Dirty Harry in saying a man has got to know his limitations. I
am far more a trucking and surface transportation mind than
ocean.
That said, I will let you know that TIA supported the Ocean
Shipping Reform Act, but, Congressman Garamendi and Congressman
Johnson, TIA members were hesitant about more Government
regulations, but welcomed the legislation text about creating a
definition of unreasonable demurrage and detention fees, and
trying to reverse the trend of a few ocean carriers using
retaliatory practices against manufacturers and shippers. These
shipping laws have not been updated in more than 20 years.
I also echo your, oh, happy days, because I am old enough
to remember the years and years and years of continuing
resolution without vision. So, thank you.
Mr. Garamendi. Thank you, Mr. Tucker.
Mr. Edwards, our former chairman, Chairman DeFazio, after
about 20, maybe almost 30 years, was finally able to take the
Harbor Maintenance Trust Fund and apply it for more than just
the harbor itself, but also for the port and the infrastructure
associated with it.
So, I am curious about the implementation of that Harbor
Maintenance Trust Fund and the changes that occurred in WRDA
2020. The new WRDA is coming up. Do you have recommendations on
how we might better implement the existing laws and changes in
the WRDA, the new WRDA that we would be dealing with?
Mr. Edwards. Thank you, Congressman. I think firstly, we
were delighted when the changes came forward because we are an
energy port, and therefore, we can receive harbor maintenance
tax dollars for the purpose of investing in our hard
infrastructure.
Noting the time, what I would comment, I would be happy to
come back to you in writing, but also say at this time that the
distribution of those funds perhaps is something we just need
to free up a little bit so we can get that money to work, and
we are ready to put it to work.
Mr. Garamendi. I see my time has expired. I yield back.
Mr. Rouzer. Mr. Johnson.
Mr. Johnson of South Dakota. Thank you, Mr. Rouzer. I talk
a lot about ports and ocean shipping in this committee.
Sometimes my colleagues are a little confused by that.
Regrettably, South Dakota does not have any oceanfront
property.
But then, when you look at how globally connected we are,
little old South Dakota, we export more than $5 billion of
agricultural products a year. More than 60 percent of our
soybeans, for example, go overseas. Manufacturing, we export
more than $2 billion a year. That is, for a State of less than
1 million people, a lot. It is about $7,600 per person.
And so, Mr. Edwards, it is certainly the case that what you
do, what the other ports do, the whole global shipping
environment does have an impact on South Dakotans, as they do
on every American. And so, I want to pick up where Mr.
Garamendi left off.
A product of this committee, particularly of Mr. Garamendi
and myself, was the Ocean Shipping Reform Act. The Federal
Maritime Commission has a couple of very important rules,
promulgation efforts underway, one on detention and demurrage,
another on shipping exchanges. First, if you have any comments
about those proceedings, I would be happy to hear them.
But other than that, if you have any other areas where you
think some additional interest by Congress could improve ocean
shipping, we are all ears.
Mr. Edwards. Thank you, Congressman. What I would say is
soybeans, by the way, is the largest containerized export from
the Port of Virginia, as well, just not South Dakotan soybeans;
it is somebody else's soybeans.
What I will say on the Ocean Shipping Reform Act changes
that were placed, and in particular regarding the detention and
demurrage, we are an operating port, so, we are a marine
terminal operator, and we believe we operate well within the
guidelines that are laid out.
I did take time before I came here today to talk to some of
the other trade coalitions, and I think the one item that I
would ask Congress to do is hurry up the Federal Maritime
Commission. I think it is over a year--I think their guidelines
were due to come out in June of last year, and we are waiting
now on the Federal Maritime Commission, and here we are in
January. So, I think the whole industry is saying, from top to
bottom, is saying the whole industry wants to abide by what the
intent of the legislation was. Could the Federal Maritime
Commission please publish that guideline so that the whole
industry can then abide by it? I would say that is the most
important one on detention and demurrage.
I believe, on the balance of trading, and in particular on
exports, I am a true believer that the private sector normally
reacts appropriately in the marketplace. There are times when
that may not work so well, and I think because as a political
subdivision, we can take our own action to protect our
exporters if, by example, imports were overwhelming the supply
chain, which is what happened during the pandemic in 2021 and
2022, is where imports could overwhelm the pandemic and the
exporter could have been harmed.
I think it is important that ports as a whole realize that
we are, yes, a for-profit business and we reinvest our profits
back in, but we are also a public utility in the sense that we
have to provide that service to the exporter as well as the
importer. And there is, on a port-by-port basis, that need to
understand the balance of protecting capacities if one leg is
particularly clogging up the system.
Mr. Johnson of South Dakota. So, in that environment, is
there an area that is particularly weak or worrisome to you
over the course of, say, the next 10 years?
I know a lot of ports are making a tremendous investment in
additional technology to increase their capacity. I think
people have a deeper understanding of their frailties coming
out of the pandemic. What worries you now?
Mr. Edwards. I think, as we deploy technologies and we will
continue to deploy technologies, we can become smarter and
smarter as an industry.
I think the one thing the pandemic taught us is where do
you put your surge capacity, and who is reacting to that surge
capacity? And ultimately, if you are going to carry redundancy,
somebody normally pays for that redundancy. I do believe that
you are seeing the reaction to that on a port-by-port basis
across the Nation.
And I think it is fair to say that we would be foolish if
we didn't acknowledge that every port competes with every other
port. We are natural competitors. So, we are businesses, and
therefore, it is in our own interest to be able to provide
certain surge or redundant capacity as a whole. And I think my
own take on that is that in my role as a port. I am not asking
the Government to intervene and tell me how to do that.
Mr. Johnson of South Dakota. Ms. Benford, you noted your
company doesn't do direct Federal work. You did mention that
PLAs can be onerous and cumbersome. Is that type of Federal
regulation--is that what makes you, at least in part, less
likely to do direct Federal work?
Ms. Benford. We are just not really set up to do direct
Federal work. There are a lot of restrictions and a lot of
expectations that we just don't meet as a small company. And
there is not--we don't do the large jobs that would be required
by a PLA.
Mr. Johnson of South Dakota. Very good.
Thank you, Mr. Chairman. I yield back.
Mr. Rouzer. Mr. Johnson of Georgia.
Mr. Johnson of Georgia. Thank you, Mr. Chairman, and thank
you, Ranking Member, for holding this important hearing today.
And thank you to the witnesses for your testimony.
Since 2020, when Joe Biden was sworn in as President,
Democrats have been hard at work doing our job and fulfilling
our promises by successfully enacting and implementing historic
levels of infrastructure investment to jump start the Nation's
economic competitiveness, protect the traveling public, and
prioritize the creation of good-paying jobs. Unemployment is
low and wages are high. The stock market is up, and America's
economy is growing at the phenomenal rate of 4.9 percent.
While ``Individual 1'' was busy declaring every week to be
an infrastructure week, lying to the American people of an
infrastructure week that never materialized, Democrats were
hard at work putting people over politics. And in 2021, House
and Senate Democrats, along with a few Republicans, passed
President Biden's $1.1 trillion Infrastructure Investment and
Jobs Act, the $1.7 trillion American Rescue Plan, the
bipartisan Ocean Shipping Reform Act of 2022, the Inflation
Reduction Act, and other notable pieces of legislation. And
these important pieces of legislation are responsible for the
job growth, wage growth, stock market growth, and strong
economic growth that the Nation enjoys today.
Tomorrow, I will be reintroducing equally important
legislation, the Stronger Communities Through Better Transit
Act. This bill will provide greater transit equity and quality
to communities across the country, including communities in
rural areas. Also, it would create a new program to provide
transit agencies with Federal funding to increase and improve
transit service, thereby leveling the playing field for our
constituents who need transit to get to work, school, and to
the doctor's office or to the pharmacy.
It is time to invest in the thousands of transit systems
across the country to ensure that all Americans in cities,
suburbs, and rural areas have access to frequent, high-quality,
dependable transit.
Now, Ms. Benford, as you stated in your testimony,
disadvantaged business enterprises, DBEs, play a pivotal role
in fostering diversity and inclusion in the construction
industry by ensuring that certified small businesses owned and
controlled by socially and economically disadvantaged
individuals can compete for federally funded highway, public
transit, and airport projects. I was happy to hear that
Associated General Contractors of America, which you are
representing, supports aligning the DBE statutory size
standard, which is currently capped at $28.4 million gross
annual revenue, aligning that with the $45 million cap, which
is revised for industry trends and inflation at least every 5
years by the SBA.
I recently introduced H.R. 6820, which is the Small
Business Contracting Fairness Act, which would amend the IIJA
to raise the statutory size standards. Can you speak more to
the importance of increasing this standard, which would give
DBEs greater access to Department of Transportation projects?
Ms. Benford. Yes. So, we do appreciate that because I think
that is one constraint that our DBEs are limited by. We are
required to use DBEs. And just to give you a little idea of
what that looks like, when we bid a project, we have to
solicit. So, we have to reach out to 80 to 100 DBEs. And in
Wyoming, we get one to five quotes. And so, I think giving DBEs
more access--whether it's the constraints or the administrative
requirements that they are required to do--would be helpful,
yes.
Mr. Johnson of Georgia. Thank you, and I am about out of
time, so, I will yield back.
Mr. Rouzer. I thank the gentleman.
Mr. Mann.
Mr. Mann. Thank you, Mr. Chairman, and thank you all for
being here today.
I represent the Big First District of Kansas. And as a
geographic center of the country, Kansas offers excellent
transportation advantages for certain industries. Over the last
several years, there have been a number of regulatory proposals
that have threatened to disrupt the Nation's supply chains,
creating undue burdens on American businesses and causing mass
delays in the shipment of goods.
Of course, the pandemic highlighted fractures in our supply
chains. And in my view, instead of focusing on the issues, the
administration continues to focus on more regulations that will
cause further bottlenecks and uncertainty for the Nation's
supply chains.
A handful of questions. First for you, Ms. Benford, in
regards to the WOTUS, or waters of the U.S., the Biden
administration continues to ignore the clear decision by the
Supreme Court in the Sackett versus EPA case regarding the
definition of waters of the U.S. under the Clean Water Act.
What new uncertainty exists due to the administration's changes
post-Sackett?
And did the Navigable Waters Protection Rule offer more or
less clarity to you and to your members?
Ms. Benford. I am going to have to circle back with you on
that one.
Mr. Mann. Anyone else have a comment on WOTUS, the waters
of the U.S. and the impact that you are seeing that having to
your particular industry?
Mr. Millar. In Washington State, sir, 86-plus percent of
the work that we do that is federally funded is addressed
through a categorical exclusion. We are spending our money on
preservation of our existing infrastructure, and those rules
have had no impact on that work.
Mr. Mann. OK.
Mr. Millar. When we do more complex projects and we get
into a NEPA analysis, we go with the regulations that we have.
We are working on several projects in that space, and we
recognize that NEPA is a decisionmaking process, it's not a box
to check.
I am all for getting to yes really quick. I am also for
getting to know really quick when somebody has a bad idea.
Mr. Mann. Yes, yes, thank you.
And the next question is for you, Mr. Tucker. Last month,
the Customs and Border Patrol briefly suspended rail operations
through international rail crossings in Eagle Pass and El Paso.
I know you referenced earlier in a question about the
importance of these crossings. When the Customs and Border
Patrol did that, when they had to move agents to other parts to
help secure the border, Union Pacific Railroad alone noted they
had more than 60 trains, or nearly 4,500 railcars, that were
being held south of the border.
How do these type of delays and suspensions of cross-border
activity affect supply chain and logistics throughout the
country?
What are the ripple effects of that, in your view?
Mr. Tucker. The ripple effects are significant, and
especially for grains, things that have an expiration, such as
food. So, those are big ripple effects.
I am not part of national security. I understand that there
might have been an impetus to make Mexico do more, in doing
that. But I think that the challenge needs to be faced. We need
to continue moving this freight. As I said earlier, there is
way more freight moving north from Mexico, and please expect it
to continue over the next decade. And we just can't afford to
have a closure like that. From what I understand, at least from
the figures released by the Union Pacific and supported by the
AAR, is that it was about a $200 million impact.
So, I think working with industry, letting industry know of
potentials like this so that they can work around it if
possible, would help mitigate it. But there really needs to be
a better collaborative environment around stoppages such as
this.
Mr. Mann. Yes, I completely agree.
Last question, quickly, for you, Ms. Benford. In your
testimony, you detailed how the cost of construction had
increased in the first quarter of 2023--the cost of highway
construction had increased 53.8 percent over Q1 of 2020. Can
you describe the impact of these increased costs on businesses
like yours and your ability to complete projects?
Ms. Benford. Yes. So, again, going back to the bid process,
when we get quotes from our subcontractors, we're really
required to lock in immediately. And so, time is of the essence
to make sure that the owner and everyone buys into the price.
Because if we don't, that affects our risk, right? So, we take
on that inflation, our subcontractors take on our inflation.
And ultimately, I can tell you that there has been a lot of
subcontractors who struggle with this, right? If we don't tell
them, yes, you have got the job, and they don't buy materials
immediately, they are affected by it.
Mr. Mann. Yes. Thank you all for being here.
Mr. Chairman, I yield back.
Mr. Rouzer. Mr. Carbajal.
Mr. Carbajal. Thank you, Mr. Chair.
Mr. Millar, last Congress many of my colleagues and I
worked on crafting landmark legislation to invest in our
infrastructure, reduce our greenhouse gas emissions, and create
good-paying jobs. Through the Bipartisan Infrastructure Law,
the American Rescue Plan, and the Inflation Reduction Act, we
have been able to do all three.
However, I do understand that workforce availability is a
challenge for the transportation sector. As we continue to
oversee Federal dollars from the Bipartisan Infrastructure Law
and the Inflation Reduction Act hit the ground, what are some
of the considerations this committee should take into
consideration and account to ensure that we maximize our
Federal investments?
Mr. Millar. Congressman, there are a lot of things on my
list there. We are working right now in Washington State to
bring more women and people of color into the construction
trades. When we see folks aging out of industry, it is
important that we take advantage of every pool of individuals
available to us. Part of that is making the workplace a
welcoming place for everyone who is engaged. Part of that is
providing the training. Part of that, frankly, is getting
people interested in our work, and that is going to require us
to get down to, like, the elementary and middle school level on
just the whole issue of math, science, and technology.
There are lots of folks--I go and speak at the University
of Washington to graduating civil engineers, and they are not
interested in the transportation space because it's--I had a
bunch of them say, ``My focus is on the environment. Why should
I get into transportation?'' You talk to them a little bit and
they figure that out, but we are not having those
conversations.
It is incumbent on industry to be reaching out. It is
incumbent on our educational institutions to be reaching out.
We need to get young people interested in and excited about the
futures that exist in this space. Knowing that you can have a
job with good pay and benefits and retirement and the like in
the construction trades without a 4-year college degree, people
don't know that, don't get that. So, I think there is an awful
lot that we need to do in the education space.
What we are able to do at the Washington State DOT, with
funding from the Federal Government and from our State
legislature, is directly engage with community colleges in
Washington State, with church groups in Washington State, with
labor unions in Washington State, with contractors in
Washington State, with Native American Tribes on getting the
people that they care about, getting the people that they want
to see succeed into the transportation space.
So, I would encourage the Congress, as you consider
reauthorization, workforce is going to be huge. There needs to
be resources there, but the resources need to be flexible. We
don't use Federal money in our pre-apprenticeship support
services work. We are doing things like buying tools for
apprentices, buying boots, and my Office of Equity and Civil
Rights lead says when you use Federal money you can buy the
boots, but you can't buy the laces because--you know. So, the
funding is important, the flexibility is important, and just
the acknowledgment of the scale of the problem.
Mr. Carbajal. Thank you.
Mr. Tucker, as a former chair of the Coast Guard and
Maritime Transportation Subcommittee and now ranking member, I
was able to work on advancing the Ocean Shipping Reform Act of
2022, written by Representatives Garamendi and Johnson. Can you
discuss how the Ocean Shipping Reform Act of 2022 is helping to
alleviate the supply chain crisis?
Mr. Tucker. Congressman, thank you for the Ocean Shipping
Reform Act. As I said, I am not the ideal candidate to speak to
ocean issues. However, the TIA is extremely appreciative and
supportive in particular for creating definition around
unreasonable demurrage and detention fees, trying to reverse
the trend of a few ocean carriers using retaliatory practices
against manufacturers and shippers. So, thank you for your
support.
Mr. Carbajal. You did a darn good job knowing the issue,
though. Thank you.
[Laughter.]
Mr. Carbajal. Mr. Chair, I yield back.
Mr. Rouzer. The gentleman yields.
Mrs. Chavez-DeRemer.
Mrs. Chavez-DeRemer. Thank you, Mr. Chairman. Thank you for
being here today.
I am Lori Chavez-DeRemer, a new Member of Congress
representing Oregon. So, Secretary Millar, it is nice to be on
the border with you. I am appreciative that you mentioned the
I-5 Bridge, and how important that is as we move through.
But my questions today, back in December, the Biden
administration, the Council on Environmental Quality, as well
as six sovereign nations released a final package of
commitments in the ongoing Columbia River Systems Operations
litigation and mediation. In this package, a myriad of
provisions were included, and general consensus amongst Pacific
Northwest communities and stakeholders in the agreement is a de
facto breaching of the dams.
My Pacific Northwest colleagues, Congressman Newhouse,
Congresswoman McMorris Rodgers, and myself, have been staunch
supporters of the lower Snake River Dams and are deeply
concerned about its future. Breaching the dams would be a fatal
blow to the Pacific Northwest, as the lower Snake River Dams
provide immeasurable benefits to the region and the Nation. For
instance, the river system significantly decreases traffic
congestion and pollution. It would take exactly 39,204 railcars
and 150,784 semitrucks to move the cargo that is barged through
the Snake River by rail and truck.
So, Mr. Millar, you mentioned in your testimony that the
Washington State Department of Transportation works to maintain
and improve local roads, railroads, and airports, which is an
ongoing issue. Breaching the lower Snake River Dams would
exacerbate this issue, would it not?
Mr. Millar. Congresswoman, Washington State--in particular,
Governor Jay Inslee--has not taken a position on breaching the
Snake River Dams. We are engaged with the other partners in
their area on studying the potential impacts of that. We have
just begun the study of the transportation impacts and our
ability to respond to those impacts. So, having just begun the
study, I really can't speak to what those impacts might be.
Mrs. Chavez-DeRemer. By adding a substantial amount of
railcars and trucks to railroads and highways, would your
agency still be able to meet its objectives?
Mr. Millar. Yes.
Mrs. Chavez-DeRemer. The lower Snake River Dams play a
significant role in not only providing clean, renewable
hydropower energy, which provides my constituents with low-cost
electricity, but also transporting approximately 60 percent of
the Nation's wheat exports. Mr. Millar, if the lower Snake
River Dams were breached, how would this wheat alternatively be
transported?
Mr. Millar. Again, no decision has been made, and the State
of Washington has taken no position in that space. The
options----
Mrs. Chavez-DeRemer [interrupting]. If you could project--
--
Mr. Millar [continuing]. That shippers have to barging
would be by rail or by truck.
Mrs. Chavez-DeRemer. If an alternative plan could not
imminently be implemented, don't you think this would further
negatively impact supply chain issues that were already
exacerbated by COVID-19?
My guess is you are going to say the study is still out
there, so, no decision has been made, but I would like to keep
an eye on it, and work with your office, and make sure that we
are paying attention to how this happens.
Mr. Millar. The State of Washington is partnering with
other entities that are interested and involved in that
particular issue, including the State of Oregon. We welcome the
continued communication.
Mrs. Chavez-DeRemer. Well, I appreciate the support for the
Pacific Northwest, and I am glad that you are here today.
Mr. Millar. Thank you.
Mrs. Chavez-DeRemer. Thanks. I yield back.
Mr. Rouzer. Mr. Garcia.
Mr. Garcia of Illinois. Thank you, Chairman and Ranking
Member, for hosting the hearing today.
In recent years, our transportation systems have been
undergoing a transformation, from the COVID-19 pandemic, which
stunted many transportation sectors, to the historic IIJA
funding, which renewed investments in modern infrastructure. In
the Chicago area alone, we received grant funding through IIJA
to make transit more accessible, improve commuter rail
infrastructure, and deliver over 50 ``clean'' schoolbuses to
Chicago public schools.
Reimagining a modern, resilient, and sustainable
transportation sector will require us to examine our workforce.
In 2022, I introduced the Giving Disadvantaged Business
Opportunities for Success Act, which would strengthen
opportunities for minority- and women-owned businesses. I am
glad that DOT is finalizing a rule that would allow more
businesses to qualify as DBEs.
Ms. Benford, how would increasing the DBE net worth cap and
streamlining the certification process benefit the construction
industry and the larger transportation industry?
Ms. Benford. Thank you. As I mentioned before, DBEs are a
big part of our program. We are required to use them. Wyoming,
we have a lot of people registered as DBEs. But again, when we
go through the bid process, we only get one to five bidders.
So, anything that can ease the process for a DBE would be
greatly appreciated.
Mr. Garcia of Illinois. Thank you.
Mr. Millar, continuing on the topic of workforce, your
testimony mentions challenges recruiting sufficient workforce
to keep up with the demand of infrastructure projects. Has
Washington State DOT identified the factors contributing to
hiring challenges?
And how have you approached a solution to this workforce
gap?
Mr. Millar. Congressman, yes, we have identified some
issues.
Wages are an issue. Wages are going up in the private
sector. We are not seeing the comparable increases in the
public sector. They are somewhat restricted.
The availability of people. It is a competitive
environment. In my organization, I have hundreds of snowplow
operators. They are out there very busy as we speak. All of
them have a commercial driver's license, and I am competing
with the private sector. I am competing with cities and
counties and port districts. I lost a whole bunch of heavy
freight mechanics just a couple of years ago to the folks down
at Hanford, the Federal Government participating in the
cleanup. They were paying more than us. So, pay is an issue for
us.
Credentialing in the marine industry. We run the largest
ferry fleet in the United States, about 24 million passengers a
year. And we operate 21 boats up to 3 that carry 202 vehicles
and 2,500 people. The crew on those boats, to apply for a job,
you have to have a transportation worker's ID card, which
requires a background check, which takes time and money that
people don't have when they are looking for work.
So, we do a lot in that space to provide better educations.
We are, again, reaching out to high schools, maritime
academies, getting young people involved and stepping up and
getting that credential so that when a job becomes available,
we can move them to it.
We have had to move training in-house. I used to hire
people with the CDL. Now we hire people and train them on our
dime. In the marine industry, to advance in Washington State
Ferries, you used to have to take all of the training on your
own time, and you had to pay for it yourself. We have brought
that in-house as a way to bring people in.
Our pre-apprenticeship support services, we are seeing more
and more women and people of color there. We require on all of
our contracts a minimum of 15 percent of the labor hours that
are worked to be worked by apprentices. We achieved that goal.
And of those apprentice hours, 45 percent of those hours are
worked by women and people of color.
Mr. Garcia of Illinois. I thank you for that. As you have
stated in your remarks this morning, it is important that we be
inclusive and especially mindful of those who have been left
out of these job opportunities. What do you think Congress
needs to do to ensure that recruiting is inclusive and diverse?
And you have got about 5 seconds.
Mr. Millar. I believe the statute is in place. It can
always be improved. From my perspective, it is the application
of that statute by people of goodwill that makes a difference.
We in Washington State, approximately 77 percent of Washington
State, they consider themselves to be White, they identify as
White. So, about 23 percent of our community is people of
color.
At the Washington State DOT, when I came on board, 10
percent of the workforce were people of color. We have been
able to raise it in the last 3 years from 10 percent to 15
percent, and we continue to work on that. The rules, the laws
are in place. It's the application of those laws over time that
is going to make a difference.
Mr. Garcia of Illinois. Thank you.
And thank you, Mr. Chair, for your indulgence. I yield
back.
Mr. Rouzer. The gentleman's time has expired.
Mr. Collins, you are recognized.
Mr. Collins. Thank you, Mr. Chairman.
Secretary Millar, I was out in Washington. We had that
field hearing on those four dams that the Biden administration
wants to tear down with a 98.5-percent success rate on moving
fish up and down that ladder. And I can tell you, it doesn't
take a rocket scientist to understand that when you are going
to move 8 percent of the State of Washington's electric grid
off of those hydroelectric dams that operate 24/7 and put them
on some sort of Green New Deal, it's not going to work.
Also, you are just going to increase the price of the goods
that flow up and down that river by putting them on the trucks.
And I am in the trucking industry. Don't get me wrong, I love
trucking, but there are not enough trucks out there. There is a
trucking shortage. So, it is just more proof that the Biden
administration enjoys putting more inflation on the backs of
the American people without any regards to anything other than
them pushing a socialistic agenda.
That being said, I want to move--my background is trucking,
the trucking industry. I am a business owner. My wife and I are
in the trucking business. I am actually second generation in
the trucking industry. The third generation is actually running
our company now, and I started out at the age of 12, very much
like Mr. Tucker, I am sure. And I got my commercial driver's
license at the age of 18, and I still have those commercial
driver's licenses in my back pocket.
And I truly believe that the trucking industry is the most
taxed and regulated industry in this country. For far too long,
we have been the recipient of overreaching, overburdensome, and
over-out-of-control Federal agencies.
Mr. Tucker, I heard you say that you are a generational
company. And I was just curious, what generation are you?
Mr. Tucker. I am third generation.
Mr. Collins. Is the fourth generation working there?
Mr. Tucker. The fourth generation is four children between
the ages of 14 and 22 and, no, no, not as of yet, no.
Mr. Collins. I will tell you something. The trucking
industry, once it's in your blood, it's in your blood. That's
why it's generational. And like you, I was worried and am
worried that the next generation doesn't have the opportunities
to start a trucking company like I did. It's a very proud
industry. We are proud of what we do. And yes, we are an
extremely important part of the supply chain.
And, Mr. Tucker, I heard you mention J.B. Hunt. I want to
tell you something. Ninety-eight percent of the trucking
companies out there, y'all, 98 percent, are 10 trucks or less.
Ninety-five percent are five trucks or less. So, the trucking
company that you referenced, that and all the others that you
make and call to your head, they only make up 2 percent of the
trucking industry. These are mom-and-pop generational
industries.
So, right now, whether it's hours of service, minimum age
requirements, barriers to entry by making us go to school,
accessory equipment that's being mandated that isn't even
proven that it works, parking issues like the secretary
mentioned. Mr. Secretary, the reason we have parking issues is
because we didn't have that 5 to 10 years ago, but your
shippers and your receivers have been sued so many times that
they don't want anybody on their yards. We used to park
wherever we were shipping or wherever we were receiving, just
to help with the hours of service so that we didn't have to
drive there. But now, since there is such a sue-crazy
environment out there, nobody wants to take that general
liability on. So, they make us park elsewhere, which is why you
see parking up and down the road.
The question is, what do we need in the trucking industry?
And you are right, Mr. Tucker. We need DOT to quit being a
revenue-generating agency and be out there and be safety
driven, just like the FMCSA. You are exactly right in
brokerage. There are a lot of thieves out there. They are
thugs. That's the best word for them. They are not trucking.
But, y'all, we need tort reform in this country. Tort
reform will solve the workforce issues, the parking issues. It
will solve the workers' comp issues, the health insurance
issues. It will solve all of our issue problems.
Auto liability. They have done study after study after
study, and it has been proven that between 75 percent to 91
percent of the time when a 4-wheeler is involved in an accident
with an 18-wheeler, it's the 4-wheeler's fault, not the 18-
wheeler's.
We don't need to force larger minimums on our auto
liabilities in this country for trucking. The only thing that
does, Mr. Chairman, is gives a pay raise to these trial lawyers
out there.
And with that, I yield back.
Mr. Rouzer. The gentleman yields back.
Mr. Stanton.
Mr. Stanton. Thank you very much, Mr. Chairman, and thank
you to the witnesses for speaking on this important topic
today.
It has been a big year for transportation across the
country as we have rolled out the Bipartisan Infrastructure
Law. In my home State of Arizona, we have 609 new road and
bridge project commitments using IIJA funds, $170 million was
awarded through 12 grants to my State, and we received $466
million in Federal reimbursements for ongoing transportation
work.
But what do those funds mean? What is the actual impact?
For the Arizona Department of Transportation, who has
received more than $35 million of those discretionary funds,
they have been able to begin a huge range of projects, from a
wildlife crossing pilot to cut down on vehicle collisions to
improve habitat connectivity, safeguarding our wildlife, to
project planning for our Phoenix and Tucson passenger rail to
keep our communities connected. Our Federal work has spurred
local and State investment, as well. ADOT pushed hard to
complete 24 critical pavement preservation projects in 2023,
repaving and restoring more than 300 miles of highway.
All of this is good news and showcasing that the State
department of transportation is stronger than it was before the
historic investment of the Bipartisan Infrastructure Law.
For all the progress we have made, we still have unfinished
work to do. Arizona's top infrastructure priority, my top
infrastructure priority is the expansion of Interstate 10. I-10
connects Arizona's two largest cities, Phoenix and Tucson, and
tens of thousands of people commute along it every day. But
it's more than a commuter rail. The I-10 is a key commercial
artery for freight traffic to and from the ports in southern
California and for international commerce with our largest
trading partner, Mexico.
Despite the critical importance of I-10 in the State, for
26 miles along the Gila River Indian Community, it is only 2
lanes. Any Arizonan who has driven this stretch will tell you
that is not enough. The congestion and traffic are horrible,
and it is a safety hazard. A single crash can back up this
highway for many miles. Even standard rush-hour traffic causes
significant backups in this corridor that would be averted with
a third lane in both directions.
The State of Arizona has applied for an INFRA grant under
the Bipartisan Infrastructure Law. My team and I worked with
ADOT to make it as competitive as possible, and it is my hope
and expectation that this project will move forward very soon.
And I am glad to see the Transportation Intermediaries
Association and the AGC here today, and I would like to talk to
both of you about the importance of supply chains.
Mr. Tucker, a large focus of your testimony on behalf of
the TIA was on the supply chains and the importance of freight
as part of that equation. Can you speak about the impacts that
congestion has on supply chains and the importance of
investment in projects like the I-10 expansion?
Mr. Tucker. Thank you, Congressman. I would agree with your
assessment with regard to I-10, and I don't think that enough
Americans understand that we have ports that go through land,
right? Our land crossings, essentially. And I think that we
will begin understanding that a lot more.
As I have said numerous times and in my written and oral
testimony so far, Mexican freight traffic will continue and is
only going to grow, and we really have to tackle that, right?
So, anything that represents a bottleneck, such as what you
have described--and there are others, but clearly you have got
a key one there in Arizona--anything that slows that down, it
increases costs to consumers, it increases costs to the
retailers who pass it on to the consumers.
And especially with regard to things that may spoil, such
as food--and I think we should really appreciate it, and I
don't think we always do, because we are always talking here
about what is needed in infrastructure--we have the greatest
delivery system in the world, this country, and we just need
continued investment and continued collaboration, bipartisan
work in this committee. This is a wonderful committee, and I
thank you guys for being on it. Thanks to all of you. But we
have got work to do.
Mr. Stanton. Thank you, and I should note that Mexico is
not only the number-one trading partner of Arizona, but now is
the number-one trading partner of the entire United States of
America.
Ms. Benford, maybe the same question. How can commercial
arteries like I-10 play a role in bettering supply chain costs
if we can improve I-10?
Ms. Benford. So, in Wyoming, we have a similar artery, I-
80, that goes through our State that--I would just echo what
Mr. Tucker said. It is very vital that these supply chains are
dependable and that we can get what we need on time, so that we
don't delay our projects.
Mr. Stanton. I appreciate those great answers, and with
that I yield back.
Mr. Rouzer. Mr. LaMalfa.
Mr. LaMalfa. Thank you, Mr. Chairman. I have a quick one
for Secretary Millar.
I guess in your position up in Washington, that makes you
king of the road, huh?
[Pause.]
Mr. LaMalfa. Yes. OK, I did it, so----
Mr. Millar [interposing]. I have heard that before, sir.
Mr. LaMalfa. I know you have. Probably half the people in
here don't know what I am talking about, anyway, so, I threw it
out there.
I share I-5 with you in the northern part of my State in
California, as well. And I just wanted to ask you, what is the
price of that bridge you are talking about over the Columbia?
Is that right?
Mr. Millar. That's correct, somewhere between $6 and $7\1/
2\ billion, sir.
Mr. LaMalfa. OK, we are having a discussion on the I-5 just
north of Redding there, the Pit River Bridge, as you know,
sometime within 20 years might need a look. So, anyway, thank
you for that.
I want to come back to Mr. Tucker here on talking about the
California Air Resources Board and how individual States are
causing things to not be very seamless with interstate commerce
and the regulations. As you know, CARB and California are
always trying to push some new envelope, in this case, 100
percent of the new trucks that would be sold have to be zero
emission by 2045, and they believe that's going to be
electrification so far.
So, we are just worried about that on supply chain, as well
as California has huge ports in the bay area and southern
California. So, so much comes from Asia straight in to those
ports, and they have their own challenges with regulations, and
yet so much of the demand is right there locally in a high
population like California.
So, what I am driving at here is, we have CARB regulations
and we have other States playing ``monkey see, monkey do'' on
it, as well. I just saw a piece this morning where Virginia
might be wanting to backtrack on their idea of electrifying all
their cars by 2035 and what California is doing.
So, on top of all that, Mr. Tucker, what do you see as the
prediction on large companies or all companies in responding to
California regs? It used to be the attitude when I was in the
State legislature, some of my colleagues on the other side
would say, like, well, we are too important of a market for
them to not do what we do. When does that finally drop off and
they say, no, we are not going to play to that, we are going to
play to the other States that want to play fair ball?
Will they continue importing and exporting out of
California, or will they divert the traffic to Texas or some
other port, some other method?
Mr. Tucker. Congressman, we see these kinds of business
decisions being made by motor carriers all the time in our
industry. Again, we are dealing with thousands of motor
carriers through 63 years.
So, for example, in some--I am from New Jersey, so,
sometimes motor carriers see the Hudson River separating New
Jersey and New York as the end of the continent and will not go
there. And California has risen to that level of profile, where
the drivers and carriers oftentimes don't want to go to
California because they are afraid, right?
One of the things that I mentioned is the bipartisanship in
this committee. President Carter was a Democrat. Carter started
the deregulation in trucking. President Reagan, a Republican,
continued that on. This committee has done tremendous work.
This Congress, way back when, saw that one of the powers--
again, one of the superpowers--that this country has is how do
we make things faster, more effective, and safely get to the
consumers?
And----
Mr. LaMalfa [interrupting]. I have to ask you to be brief,
please.
Mr. Tucker. Pardon me?
Mr. LaMalfa. Be brief, please.
Mr. Tucker. OK.
Mr. LaMalfa. Thank you.
Mr. Tucker. Yes. So, I think that--and the long and the
short of it is, we have got to be thinking about these things.
We have got to keep these front of mind. Sorry.
Mr. LaMalfa. Well, I mean, one set of regulations is
becoming just a turn-off, and so, they are going to--you
squeeze the balloon, and it is going to go somewhere else, you
know?
Mr. Tucker. We saw this--we see this, the Americans, we saw
this as a way to deliver interstate commerce effectively. But
if we have a patchwork of rules in every different State that
carriers have to try to figure out how to manipulate, you are
going to take it apart.
Mr. LaMalfa. Thank you.
Mr. Edwards, can you touch on that from the Virginia
standpoint, please?
Mr. Edwards. I will be happy to touch on it from a ports
perspective.
I think the most important factor we have in the movement
of freight is that we plan freight on an international basis.
We have to recognize that trucking is an industry that can move
from State to State, just as ships can move from port to port
around the globe.
What we do know at this point in time is that it would be
simply impossible to have frontline operating capacity capable
of meeting some of the standards that are being proposed, and
that is essentially going to put costs into California.
Mr. LaMalfa. All right, thank you. The time is already up.
Thank you, Mr. Chairman, I will yield back.
Mr. Rouzer. Mr. Menendez.
Mr. Menendez. Thank you, Mr. Chairman. Thank you to the
witnesses, especially Mr. Tucker from my home State of New
Jersey.
It is good to have you. New Jersey's Eighth Congressional
District, which I have the honor of representing, has received
almost $11 billion in critical investments from the
Infrastructure Investment and Jobs Act alone. These dollars are
going towards improvements at the Bayonne drydock. They are
electrifying ferries and going towards the Gateway Program, the
largest infrastructure project in the entire country, something
that we are incredibly proud of. And we are just getting
started.
Mr. Millar, I want to talk to you because there's a series
of questions that I think your experience would lend important
insight to. You talked about the cost escalations and one of
the component pieces of it being workforce. And in your
testimony, you talked about several State-funded internships
and pre-apprenticeship support service programs that Washington
operates.
What has been the most successful program that you have
seen increases engagement in workforce development?
Mr. Millar. It's a suite of programs, Congressman. The
requirement to have apprentices work on our jobs, our pre-
apprenticeship support services program, where we are funding
community colleges, labor unions, and the like to bring people
into the construction trades, we have taken that whole suite--I
have had conversations with Secretary Buttigieg and the U.S.
DOT about what we are doing as perhaps a model for some of the
adjustments that could be made in the national space.
Mr. Menendez. I appreciate that. I was on the phone this
morning with a major labor organization out of New Jersey
having this conversation and what we can do to encourage
people. I think you said in your testimony today if that means
going into grade schools and elementary schools and high
schools and availing themselves of the opportunities that exist
in the trades and engineering, and it is going to be an
important part of our future as we continue to ensure that we
lead in infrastructure here in this country.
I have a second question for you. We have seen it in New
Jersey and the greater region in terms of changes in what work
schedules look like, and the impact that those shifts have had
on public transit agencies and the funding that they receive
from daily tolls that now people have adjusted to work from
home, and less consistent travel to and from work, which has
impacted the revenues at a lot of public agencies. I am
wondering what your experience has been in Washington in
partnering with local transit agencies?
Mr. Millar. We have partnered with local transit agencies
from the get-go. We are a major funder of our more rural,
smaller agencies, and we partner with King County Metro, Sound
Transit, the big ones in the Seattle area.
What we are seeing on our highways is the total volumes
haven't changed, but the time of day has. What we are seeing in
public transportation, what we are seeing on the Washington
State Ferries is that people who can work from home, who choose
to work from home are changing their travel patterns. And they
are not traveling during the peak hour.
So, how do we, as service providers, adjust our schedules
to meet the needs of the community as the community adjusts
theirs? That is an important thing, particularly for the large
transit.
For the smaller transits in Washington State, my experience
is 25 percent of Washingtonians don't drive. That is almost 2
million people. And as our population ages, more and more
people are hanging up their car keys for the last time. So,
whether you are in rural Washington or suburban Washington, how
do you maintain your independence, your dignity, your quality
of life without the ability to drive a car? That's public
transportation, and those are investments we are making in
very, very rural places, right up to the downtown in Seattle.
Mr. Menendez. Yes, absolutely, and continuing to ensure
that we are leading in public transit because there is a
movement to be less reliant on cars, which is something that we
all want to encourage. So, I appreciate your work there.
Just a quick question on ferry electrification. We have
seen it in New Jersey, where we are supporting several entities
in the district that are looking to move their fleet to an
electric fleet. What are some of the successes and challenges
you have seen, having one of the largest ferry operations in
the country?
Mr. Millar. The largest.
Mr. Menendez. The largest.
Mr. Millar. But yes, it has been a challenge and an
opportunity. We are currently converting one of our largest
boats to a diesel-electric hybrid. There has been a lot of
people concerned about the cost of that. That boat is 30 years
old. We launched it 30 years ago. We are trying to get 60 years
out of it. It's in for an overhaul right now, the overhaul that
was scheduled day one, when we launched it.
But rather than replacing all four of the diesel motors, we
are replacing two and we are putting batteries in. That comes
at an increased cost. But over the life of that boat, we are
going to save $60 million: the people of Washington's.
So, telling this story has been difficult. Getting power to
the dock has been difficult. With our partners and with Federal
support, we are making that happen.
Mr. Menendez. Well, no monopoly on a good idea. So, I look
forward to partnering with you.
And I yield back. Thank you so much.
Mr. Rouzer. Mr. Stauber.
Mr. Stauber. Thank you very much. I appreciate the comments
by our witnesses today. Many of you have praised IIJA, but what
I think you really are praising is the idea of IIJA.
We all want good infrastructure. We know that
infrastructure projects mean good union jobs and economic
prosperity for our communities. The idea was dangled in front
of the American people by the Biden administration as a prize
to be won, knowing full well the bill needed a lot of work.
For instance, rural roads definition in the IIJA is 200,000
or less. That means in the entire State of Minnesota, which is
rural, only Minneapolis and St. Paul wouldn't qualify for rural
roads grants. To me, that is unconscionable.
See, without meaningful change in the spending habits of
this country, inflation continues to soar higher and higher,
eating away every last dollar that was promised to our
communities. Without domestically sourced critical minerals and
metals, our infrastructure projects are endlessly delayed as
they remain at the whim of adversarial nations who control the
supply chain. Without Buy American provisions, which this
administration is actively trying to remove from the
legislation, we rely on the biggest polluters and human rights
abusers over American workers. Without meaningful permitting
reform, many of the infrastructure projects fail to even get
shovels in the ground.
I am very disappointed that my Republican colleagues and I
were not allowed to give input in the IIJA. Maybe we could have
helped make it a better piece of legislation.
Mr. Millar, you had mentioned EVs. Do you recall how much
the IIJA has invested in EV charging stations?
Mr. Millar. In our State, Congressman, $76 million in
formula funds.
Mr. Stauber. Overall?
Mr. Millar. I don't remember.
Mr. Stauber. $7.4 billion. It has been over 2 years since
the legislation has been acted. Do you know how many EV
charging stations have been placed around this country with
that investment, that money?
Mr. Millar. I know the first ones were placed in Ohio. I
know in Washington State we have yet to use Federal money to
place some chargers, but we have----
Mr. Stauber [interrupting]. You are exactly right. One in
London, Ohio. One, $7.4 billion. One in London, Ohio. And the
same administration is trying to remove the Buy American
provisions for EV chargers. You know why? Because they don't
want to domestically mine. They would rather enter into
agreements with the Congo, where 15 of the 19 industrial mines
are controlled by the Communist country of China, who use child
slave labor.
The district that I represent, northeast Minnesota, has the
biggest copper nickel find in the world. Union labor. And this
administration just pulled the leases for purely political
reasons. They want to remove Buy American provisions so that
they can get these minerals for the EV charging stations on the
backs of children. No environmental standards. Zero labor
standards.
Mr. Tucker, can you share the vulnerabilities you have seen
with our supply chain, particularly in our overreliance on
China?
Mr. Tucker. Congressman, what was the last part of that?
Mr. Stauber. Can you share vulnerabilities you have seen
with our supply chain, particularly in our overreliance on
China?
Mr. Tucker. Yes, thank you for that question. I think it is
a great question, and I have long been concerned about not
necessarily losing a war without a shot being fired, but we
realized during the pandemic and in the months and years the
pandemic was playing itself out that there were critical supply
chain items.
I have got healthcare customers who made parts of syringes
overseas only, right? Critical lifesaving devices. So, I think
it's really important, right, that we have got the flow
initiative. I think that's very important. I think the Supply
Chain Disruptions Task Force is very important. And I think
this committee's oversight and this committee's involvement is
really important.
Mr. Stauber. And I think, Mr. Tucker, you are exactly
right. I mean, we have learned a lot through COVID, right? We
can't rely on adversarial nations for our necessities, and one
of them is critical minerals.
The Assistant Secretary of the Department of Energy and
Defense both said if China stops selling us our critical
minerals, it would be dangerous to this country. And yet we
have an administration that is trying to remove the Buy
American provisions in the IIJA so they can get to their
charging stations. They are putting my union friends and
neighbors out of work in northeastern Minnesota. We have been
mining there for 145 years, cleanest water in our entire State.
It is frustrating.
And I yield back.
Mr. Rouzer. Mr. Williams.
Mr. Williams of New York. Thank you, Mr. Chairman. My
concern today is that America cannot face another supply chain
shock like we have seen over the last 3-plus years. It has
damaged our economy, it has damaged workers, and we have
invested a heck of a lot of money through the IIJA, the CHIPS
and Science Act, there are provisions in the NDAA, all of these
things that we have done to shore up our supply chain and the
infrastructure that supports it.
The supply chain shocks were caused by a number of things:
the COVID policies of the lockdowns and shutting down
businesses, and identifying which were critical businesses and
which weren't, and how that flowed through our economy. There
was a shift in demand. Suddenly we needed unusual amounts of
PPE. We had people working from home, a huge demand for yoga
pants. Not for me personally, but there was a big shift in
demand caused by COVID.
And then we had really irresponsible levels of stimulus by
the Biden administration that shifted consumer habits and
consumption patterns in ways that created an artificial
scarcity through all of that stimulus.
And there are things that we can't anticipate, like the
Ever Given ship that blocked the Suez Canal for several months
and causing this cascade. We are seeing an echo of that with
the Houthis and the Red Sea, changing supply lines, forcing
ships to take longer routes.
It's not just ships taking longer routes. All of those
ships are carrying inventory. And if the route is longer, that
means more inventory is needed and is at sea. And it has an
effect when it arrives in port, and when perhaps they all
arrive at the same time and we end up with the enormous
backlogs like we saw off of Long Beach, for example.
My hope is in a very brief conversation with you that we
can try to just get a pulse of how things are going.
The thing that I am excited about is reshoring of some of
our manufacturing, certainly shortening the supply chains. The
CHIPS Act is critical in how that flows through, particularly
for chip production in the United States and in my district for
Micron.
But if I may ask, particularly Mr. Tucker, if I can start
with you, are you seeing a shift, in a way, from just-in-time
manufacturing and maybe some of the inventories that companies
are carrying? Is there a shift in the trucking industry of what
is being moved, and where, that you think is perhaps
encouraging about the state of the supply chain? Can you give
an insight from your perspective of the trucking industry?
Mr. Tucker. Yes, sir. I think that during the worst of
COVID, during the worst, excuse me, of the pandemic, I think
companies were stocking a little extra inventory.
But the Holy Grail in retail is to throughput and not to
have an inventory. It is costs, and it adds cost to our--so, I
think that what I see today is along the lines of what has been
already said in other testimony, that the global supply chain,
including our supply chain, has normalized or--there is no such
thing as normal anymore, but it reached equilibrium, and one
that is far more predictable, at least--excepting global issues
like the Houthis in the Red Sea.
Mr. Williams of New York. Well, there are shocks that we
can't anticipate. I think that's part of what we are trying to
avoid and what a lot of this investment has gone to.
Mr. Edwards, can I actually focus the same question to you?
Are you seeing changes in what's passing through your port in
terms of where it's coming from, how long it takes to clear,
and what the throughput is? Are there encouraging signs there?
Mr. Edwards. Congressman, very encouraging signs. The
fluidity of all ports is much better than it was in the days of
the pandemic.
So, the dwell time of cargo is considerably lower, which
tells you that the supply chain beyond the ports is all working
well. And I do believe that a number of ports, ourselves
included, are making large investments to allow for surges,
shocks, et cetera. So, I think the best operating ports are
running exceptionally well.
There is undoubtedly some sourcing away from China. You can
see that, and the fastest growth, for example, would be--India
or Vietnam would be significant growth engines in international
trade that may have been sourced from China before----
Mr. Williams of New York [interrupting]. It's a shift away
from China.
Mr. Edwards. Yes.
Mr. Williams of New York. I think that's critical. I just
have a few seconds. In fact, my time is expired. So, thank you
very much.
Mr. Rouzer. I thank the gentleman.
Mr. Auchincloss.
Mr. Auchincloss. Thank you, Chairman. I want to build off
something that Ms. Benford talked about at the beginning of
this hearing regarding flexibility for States.
I would take that a step further and say that, in fact, we
need an entire overhaul of how we do transportation funding. We
have got to free our infrastructure from the grip of big oil
and car-centric planning by handing highway funding and
administration entirely over to the States, and redirecting the
Federal gas tax to support more bottom-up initiatives.
The Highway Trust Fund is running such a massive deficit
that the gas tax couldn't meet its needs even if it were five
times higher. And what is doled out is allocated without
reference to the metrics that matter most, like how well
projects connect people to jobs, services, and one another. The
driving metric is simply more vehicle-miles. And to the
detriment of State budgets, the Federal transportation system
incentivizes States to build road after road without regard to
future costs of maintenance, operation, and environmental
impact.
The solution to this is not tweaks to the gas tax or tweaks
to transportation funding. It's devolution. Congress should
leave highway taxation and spending entirely to the States, and
commensurately remove Federal redtape and regulations on
highways beyond a minimum standard of safety, so that States
and cities can use their dollars to address local mobility with
organic solutions. Federal gas tax should remain, but be used
instead to subsidize locally sponsored projects that promote
walkability, micromobility, and transit. This is going to have
three beneficial impacts.
First, it will give States and cities more latitude that
will encourage local innovation and help us find better
transportation solutions.
Second, it will compel an honest accounting of the cost of
car-centric infrastructure. I heard this during this testimony,
as well, from Secretary Millar about the safety impacts. I
would hazard that we can spend as much money as we want, we can
match the full $1.4 trillion that accidents cost us in funding
the departments of transportation. But if we continue to build
car-centric infrastructure, we are going to continue to get car
accidents. And more tragically to the point, we are going to
continue to kill pedestrians, which the United States is doing
at an alarming and increasing rate.
And finally, a transparent account of the cost of
maintenance of highways will make it more likely that States
implement strategies like congestion pricing and improved
alternative mobility options like cycling lanes, rail, and on-
demand transit. This transition will be disruptive to
politicians and bureaucrats, but the net effect will be a lower
carbon footprint, better mobility, and more walkable downtowns.
And Chairman, I would like to introduce to the record--
submit to the record, rather, the op-ed I wrote to this effect
for Strong Towns.
Mr. Rouzer. Without objection, so ordered.
[The information follows:]
----------
Op-ed entitled, ``Don't Pause the Gas Tax, Redirect It,'' by
Congressman Jake Auchincloss, Strong Towns, July 25, 2022,
Submitted for the Record by Hon. Jake Auchincloss
Don't Pause the Gas Tax, Redirect It
by Congressman Jake Auchincloss
Strong Towns, July 25, 2022
https://www.strongtowns.org/journal/2022/7/25/dont-pause-the-gas-tax-
redirect-it
Congressman Jake Auchincloss--The president recently advocated for
a gas tax holiday, which would save drivers only a few dollars over a
few months. It also does not address the core problem. We don't need a
gas tax holiday. We need a gas tax reset: an overhaul of transportation
funding. We must free our infrastructure from the grip of big oil and
car-centric planning by handing highways over to the states and
redirecting the federal gas tax to support bottom-up Strong Towns
initiatives.
The Highway Trust Fund is running such a massive deficit that the
gas tax couldn't meet its needs even if it were five times higher--and
what is doled out is allocated without reference to the metrics that
matter most, like how well projects connect people to jobs, services,
and one another. The driving metric is, simply, more vehicle miles (pun
intended). To the detriment of state budgets, the federal
transportation system incentivizes states to build road after road
without regard to future costs of maintenance, operation, and
environmental impact. This model of car-centric planning is exactly
why, when energy prices spike, even the president has few good options
to lower costs for Americans.
The solution is devolution. Congress should leave highway taxation
and spending to the states. We should commensurately remove federal red
tape and regulations on highways, beyond a minimum standard of safety,
so that states and cities can use their dollars to address local
mobility with organic solutions. The federal gas tax should remain but
be used, instead, to subsidize locally sponsored projects that promote
walkability, micromobility, and transit.
The benefits of reforming federal highway funding and changing the
way we spend the federal gas tax would be swift and tangible. First,
giving states and cities more latitude will encourage local innovation,
helping us find better transportation solutions and root out failed
practices. Second, it will compel honest accounting of the cost of car-
centric infrastructure. Right now, federal gas tax revenue incentivizes
states to build and build without thinking about the compounded costs
of maintaining an ever-expanding roadway, which are paid for by our
children in the form of federal debt. Eliminating that revenue stream
eliminates that unsustainable incentive. Third, a transparent account
of the costs of maintenance will make it more likely that states
implement strategies like congestion pricing and improved alternative
mobility options, like cycling lanes, rail, and on-demand transit. The
transition will be disruptive to politicians and bureaucrats, but the
net effect will be a lower carbon footprint, better mobility, and more
walkable downtowns.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Both parties will be reluctant to reform a system that has been in
place for 70 years and funds critical infrastructure. The federal
government, though, is not abandoning the Interstate Highway System; it
is transitioning to the tried-and-tested model of federalism, which has
mediated infrastructure governance since the time of Alexander
Hamilton. Indeed, the original highway law envisioned that transition
happening by the 1970s. Robust federal involvement was necessary at the
inception and construction of a grand enterprise. Now, though, the
highways are the laggard, not the vanguard, of mobility innovation;
federal involvement has gone from catalyzing a new endeavor, in the
1950s, to micromanagement and mission creep in the 21st century.
Washington owns less than 1% of all public roads, but has spending
jurisdiction over 85% of vehicle miles of travel. Centralized control
is suffocating the next generation of mobility innovation.
The world has changed since the 1950s. The postwar experiment of
car-centric infrastructure is not working. It has exacerbated climate
change. It has hamstrung our budgets. It has hollowed out our
downtowns. We need a new Eisenhower project dedicated to a simple
proposition: An American should not need to own a car to thrive in this
century. That requires handing the highways over to the states, and
redirecting the federal gas tax to infrastructure for walking, cycling,
transit, and other Strong Towns initiatives.
Mr. Auchincloss. Thank you.
Mr. Millar, if you were free, as secretary of
transportation, from Federal regulations and the Federal
funding umbilical cord for highways, and instead, you had to
maintain your own highways with State-generated funds, and to
think about transportation from first principles in your State,
how might things change?
Mr. Millar. Mr. Congressman, that is a great question.
Prior to COVID, Federal funding was 15 percent of the budget of
the Washington State DOT. It is currently about 30 percent of
our budget, but it is a fraction, a very important and very,
very, welcome and appreciated fraction.
But what I--there are two things I don't do as secretary of
transportation in Washington State. I don't appropriate the
money, and I don't set policy. That is done by our State
legislature. Our State legislature in the 2023-2025 biennium
has invested $406 million in public transportation, invested
$150 million in active transportation, invested substantially
in decarbonizing our fleet. We are working with transit
agencies across the State on decarbonization.
If there is one thing I could do--and I have asked the
legislature to consider this as they move forward--we have
about 1,100 miles of highway, State highway, in Washington
State that go through population centers, not the limited-
access freeways, but--you mentioned Strong Towns, the
``stroads,'' the roads----
Mr. Auchincloss [interrupting]. You are a Strong Towns
reader.
Mr. Millar. I am familiar with Strong Towns, yes.
Mr. Auchincloss. That is terrific.
Mr. Millar. We have recommended a safety program, a
competitive grant program specifically for State highways that
go through population centers because we are trying to move
people through those spaces while providing access to those
spaces at the same time. And the need for pedestrian and
bicycle and automobile safety investment is huge because the
fatality rates on those highways are twice the State average.
Mr. Auchincloss. Yes.
Mr. Millar. The serious injury rates on those highways are
three times the State's average.
Mr. Auchincloss. Yes. Unfortunately, it is going to persist
for so long as the Federal Government continues to incentivize
car-centric highway infrastructure, as opposed to empowering
States to connect people to jobs and services through the
multitude of modalities: walking, cycling, micromobility. We
need to let the States run their transportation systems and not
be subsidizing automobiles.
I yield back.
Mr. Rouzer. Ms. Maloy.
Ms. Maloy. First of all, thank you all for being here. This
has been a long hearing. I had to leave and come back, and you
have been here the whole time, so, I appreciate your stamina.
Ms. Benford, I want to build on something you talked about.
When you were talking about how the States need flexibility and
every State is not the same, you mentioned Wyoming and the long
distances people have to travel along stretches of highway. I
represent Utah, and we have similar problems. And in some parts
of my district, similar weather.
So, I am just going to put in a shameless plug here. I have
a bipartisan, bicameral bill called the MORE DOT Grants Act
that would help address some of the problems you talked about
with States being unable to meet the matching requirements for
some of these grants, particularly in rural areas and rural
areas with a lot of public land, where they don't have the tax
base to come up with the matching, but they have the same need
to maintain roads. So, for your associates who are struggling
with this in rural areas, have them look into the bill and talk
to their representatives.
But I agree that States need flexibility. Not all States
are the same. One of the things that I think applies to
everybody--and I want to hear from everyone on the panel about
this--that you talked about, Ms. Benford, is CEQ and the slow
permitting reform. Permitting reform is one of the things I
love to talk about. I think there are a lot of things we could
do that would not be environmentally harmful at all that would
save the taxpayers a lot of time and money and process.
So, I just want to go down the panel, starting at this end
and work to the other end. What permitting reforms would be
helpful to you that wouldn't harm any of our environmental
protections, but would make things move faster so that we are
keeping up with inflation and the costs of building these
projects?
Ms. Benford. Thank you for that question. I would agree
that the CEQ did have good--they implemented a few permitting
efficiencies, and I think that that is important that we take
those to heart, like setting deadlines, page limits, and making
sure that we actually answer the questions in a timely manner
so that the projects can proceed.
Again, I talk a lot about collaboration, and that is a big
piece of it, making sure that all of our partners are
collaborating and meeting their deadlines so that we can
continue forward with our work.
Ms. Maloy. Thank you.
Mr. Tucker?
Mr. Tucker. Congresswoman, if I may, can I pass my baton
here to the secretary first?
Ms. Benford. Sure.
Mr. Millar. Thank you, Congresswoman. I think what we need
first and foremost is adequate funding of Federal resource
agencies so that they are staffed appropriately to respond to
the regulations that they are charged with.
What I find quite often is it's not the regulation that's
slowing us down, it is that there is nobody there to review the
data and get the report done and get the work taken care of.
So, yes, I think the rules are the rules, but what slows me
down is when I don't--we actually, as a DOT, we provide our
funding to resource agencies so that they can staff and do the
work they need to do for us. If they were funded and staffed
appropriately, I think you would see things move a lot faster.
Ms. Maloy. I have seen the same problem in projects that I
have worked on, and I appreciate the answer. I would submit
that if the permitting regulations weren't so onerous, we
wouldn't require as much staffing time, and so we could solve
that problem on both ends. Thank you.
Mr. Edwards. Thank you, Congresswoman. I think on the
maritime space, as I mentioned earlier, not so much directly
permitting, but improving the NEPA process. Not to avoid the
NEPA process in any State, but to modernize it, and in
particular with the Maritime Administration, to modernize--
which hasn't, to my understanding, on certain exclusions,
happened since 1985.
Ms. Maloy. OK, thank you.
I yield back.
Mr. Rouzer. The gentlelady yields back.
Ms. Scholten.
Ms. Scholten. Thank you, Mr. Chair. Thank you so much to
each of our witnesses for being here today and for your
important testimony.
Well, my colleagues are rightfully concerned about the cost
and the impacts of inflation on infrastructure spending. I
believe it gives us all the more reason to utilize IIJA and IRA
dollars that have been set aside, which--the funding here
provides once-in-a-generation infrastructure investments. This
past year alone, my district has been awarded grant funding for
airport infrastructure, pipeline safety, and railroad
improvements, just to name a few.
Mr. Millar, you mentioned that workforce availability is a
huge challenge. We know it all too well in my district across
several industries. Across the country, we are facing
incredible challenges recruiting and maintaining a qualified
workforce. That's why I introduced the Honoring Vocational
Education Act, a bill that would include vocational education
under the category of post-secondary education in the United
States census.
You mentioned that Washington State has several State-
funded internships and pre-apprenticeship programs. Does the
State utilize grant funds for those programs, and do you think
those programs have scalability to the Federal level?
Mr. Millar. Thank you for the question, Congresswoman. I am
hoping that ``once-in-a-generation'' turns to ``first for this
generation,'' and that we see a continuing level of robust
funding support from the Federal Government.
The work that we do with State funding--when we look at the
Federal money that comes into our State, we apply it as
efficiently and as effectively as we can, and we find the most
efficient and effective place to spend that money is on
preservation work. So, we tend to put the Federal money into
the preservation work, and then we use State funding for the
other things that we do because, quite often, bringing Federal
funding into some of those more complex activities, there are
too many strings attached to it, it becomes awkward for us.
We do have a robust pre-apprenticeship support services
program, on-the-job training program, a welcoming workplace
program. We are working with the AGC. We have a capacity-
building mentorship program, where we are bringing
disadvantaged businesses into the transportation space.
All of those programs we have discussed with our Federal
partners, and we are in conversations right now with U.S. DOT
on how do you make those projects and programs that can be done
efficiently and effectively in the Federal space, because some
of my partners around the country--again, I was president of
AASHTO until November of last year--a lot of my partners don't
have the advantages that I have in Washington State in terms of
their robust State funding. And so, Federal funding is quite
often the only resource that is available to them.
Ms. Scholten. Thank you so much. My next question is for
anyone.
As we continue to face the very real prospect of another
continuing resolution here in Congress, one thing--certainly
budget talks divide us on opposite sides of the aisle. But one
thing that unites us around this is, I think, that we can all
agree a continuing resolution is no way to appropriate long
term.
Can you talk about the impacts of failing to pass full
appropriations on State budgets?
Mr. Millar. It impacts us when continuing resolutions--it
is not the full funding, and it provides this uncertainty. It
is very difficult to plan and program when you have uncertainty
in the mix. So, fund it, I guess, would be--the nice thing
about the transportation space is through the IIJA, you have
made the big policy call. So, it just needs to be funded, from
our perspective.
Mr. Edwards. Congresswoman, from my perspective, what I
would say is on the actual appropriation of dollars--because we
are largely working with the U.S. Army Corps of Engineers, once
they are funded, they are funded. So, they are not subject to
restriction of a continuing resolution.
Living in Hampton Roads, I am very conscious that I live
with a large military set of neighbors and a large Coast Guard,
and they clearly can have their own services impacted, as can
the CBP. And in particular, making sure that all of--if those
services are not working, ports and gateways will be
restricted.
Ms. Scholten. Exactly. Thank you.
I yield back.
Mr. Rouzer. Mr. D'Esposito.
Mr. D'Esposito. Thank you, Mr. Chairman.
Mr. Tucker, since the Biden border crisis began, it has
been true that every State is now a border State, every town a
border town, every city a border city. However, it seems that
this is becoming more true every day, and that every American,
including my constituents thousands of miles from the southern
border, are truly feeling the effects of our open, porous
borders.
Recently, the CBP briefly suspended rail operations through
international rail crossings in Eagle Pass and El Paso, Texas,
which led to delays in the movement of goods. The Union Pacific
Railroad noted that more than 60 trains, or nearly 4,500 cars,
were being held south of our border.
If I could just ask, how does this delay and suspension
affect the supply chain overall?
Mr. Tucker. Congressman, this stoppage was unannounced. It
was fairly a surprise to industry, right?
At the same time, photos and videos show a true
humanitarian crisis happening with deaths of children and
others falling from these trains, right? So, really, I am just
glad that I am not in charge at the moment, but those who are
in charge need to work more closely with industry. Those in
charge need to collaborate with industry so that we in industry
have the opportunity to circumvent an event like that, or
prevent an event like that, or find other ways to achieve the
same outcome.
Mr. D'Esposito. Well, I think lack of communication and
surprises are a highlight of this administration.
So, in addition to addressing the supply chain overall, how
do decisions, bad decisions like these and lack of
communication, how does that affect logistics industries
throughout this country and companies like your own?
Mr. Tucker. Well, I think that our industry is used to
disruptions. So, it's just another day, unfortunately. However,
that's not a good answer. That's not a good answer for our
customers or consumers or the American citizens.
So, again, I just underscore the importance of
collaborating with industry. We are here to help. I think we
have got really open minds and the ability to do just about
anything, I think, as we have proven through the pandemic. So,
communication, clarity, and collaboration are so important.
Mr. D'Esposito. Now, we have seen the negative effects of
the border crisis throughout this country, whether it is
increased crime, whether it is the inability of sanctuary
cities to make sure that they can provide to be that sanctuary,
whether it is--what we have seen--an influx of migrants into
communities that don't have the ability to care for them. What
other effects is the border crisis--have you seen negatively
impact the supply chain or businesses like yours?
Mr. Tucker. Consistent with the theme of a lot of my
written and oral communication or testimony, the border is
increasingly becoming, from a freight standpoint, the border is
increasingly becoming a bottleneck, right, to the flow of
goods.
The good news is we won't have to wait a couple of weeks
for a lot of our products to come from China. We can ship them
up by train. We can ship them up by truck, or we can create
them in our own country, which is also happening, right, which
is wonderful to see.
So, I think making sure that we invest in those
thoroughfares and that they keep moving is important.
Mr. D'Esposito. And I know that you mentioned in your
testimony--we briefly touched on fraud, and you mentioned that
these were bad people. And you said that fraud is a growing
problem in the supply chain costing nearly $1 billion for
American consumers.
You also mentioned how the Federal Motor Carrier Safety
Administration has fallen short on enforcing laws or
investigation complaints, often leading to malicious actors not
facing consequences. What are the most common types of fraud
that you are seeing in your industry?
Mr. Tucker. We see bad actors, just flat-out criminals
masquerading as a trucking company, accepting loads as a
trucking company, pretending with the same address, same area
code--because you can buy them for cheap--and making it look
almost like you are the motor carrier. We see that. We see bad
actors pretending to be brokers, offering loads. We see part of
two different freight crime organizations, and we see lots of
criminal organizations surveilling shippers with valuable goods
and trying to steal the trailers and/or tractors.
Mr. D'Esposito. I think this is another example in our
country where those need to be held accountable that are
violating the trust of the people. So, hold the faith, keep the
faith.
And I yield back.
Mr. Rouzer. Mr. DeSaulnier.
Mr. DeSaulnier. Thank you, Mr. Chairman.
Secretary, I wanted to ask you a couple of questions. And
being from the East Bay of the San Francisco Bay area, very
directed at your earlier comments about Highway 5 and putting
the infrastructure on renewables and matching it up to
alternative fuel fleets, both heavy-duty and cars and trucks.
So, you mentioned we work on the spine, Highway 5, up and
down the west coast. But then for people like me to get to the
Port of Oakland or to get to the urban areas, getting through
restricted geography, which is not dissimilar, to some degree,
from Puget Sound, not just Highway 9, but how you envision
connecting Highway 5 to the urban areas, particularly, well,
Seattle, Portland, San Francisco Bay area, and Los Angeles, San
Diego.
Mr. Millar. In the context of alternative----
Mr. DeSaulnier [interposing]. Alternative fuels.
Mr. Millar. Yes.
Mr. DeSaulnier. So, that new generation of energy. How do
we make sure it's connected, including with the public sector?
One of my admonitions in this committee to the Secretary
and others is: Let's put it where the market is.
Mr. Millar. Yes, we are working on charging stations along
the I-5 corridor, along the I-90 corridor--I am sure down in
California, you are on the I-80 corridor, as well--for light
trucks and passenger vehicles and building that system out as
we go, working with the metropolitan planning organization on a
regional plan for the central Puget Sound.
In the freight space, we are working with industry and with
our partners in Oregon and California. We have the privilege
of--PACCAR is headquartered in Washington State, and I have had
the opportunity to drive their new fuel cell trucks and the
like. The technology is there.
We have a cost problem right now. So, one of the things we
are doing is, we are working on where can we intercede and make
those trucks more affordable for drayage companies and the
like.
And the other is putting the fueling in place. We are
blessed with abundant hydropower in Washington State, which
gives us a great opportunity to produce hydrogen at low cost at
the dams.
So, all of that work is going on, and we are again
collaborating with Oregon and Washington. We have the west
coast electric vehicle highway in place. We have the west coast
heavy vehicle highway in place. With the IIJA, we are getting
Federal dollars into the vehicle charging and into research and
the like. So, a lot of progress in that space. These things
take time, though.
Mr. DeSaulnier. And secondarily, the workforce that does
this, our renewable portfolio standard in California when I was
in the legislature, the IBEW benefited from that greatly. Not
all unions or nonunion people did, just because of the nature
of that.
The nature of deepwater ports on the west coast and the
Pacific rim and energy. I have four fossil fuel refineries in
my district. Transitioning that workforce with the same map
that we look at financing for transportation and regulatory
efforts for air quality, and the $380 billion in the Inflation
Reduction Act, the Davis-Bacon provisions in the infrastructure
bill. Just looking at--between your labor department and your
transportation people and your resource people, California--we
struggle with this because we are a big State--is getting
everybody to coordinate because there are plenty of jobs, as I
look at it, when we transition the workforce, and it is not
just the IBEW.
Could you speak to efforts that you are doing, either in
Washington State or in collaboration with your partners, to
make sure that the workforce--there is a clear transition that
is healthy for the economy, not shutting off fossil fuels, but
that transition and that partnership.
Mr. Millar. Transitions are important, Congressman. If
there is anything I have learned over the last 45 years is if
you don't do things with people, they assume you are doing it
to them, and you kind of deserve what you get.
So, when we are looking at these transitions--like, I was
the board chair of the Intelligent Transportation Society of
America for a while, and we were talking about mobility on
demand, and automated vehicles, and the rest. I said, ``You
need to have labor at the table when those conversations are
going on.'' As we decarbonized our fleet, like our Washington
State Ferries fleet, going to a hybrid electric ferry means we
are going to need more electrical skills, maybe less diesel
mechanic skills. Diesel mechanics are concerned. Bring them to
the table, have those conversations together. There are plenty
of opportunities if we work as a team.
Mr. DeSaulnier. Well, and you talk to a steelworker or UA
member or a boilermaker, it is even more of a transition, and
they are concerned, as they should be, but their jobs are still
valuable in doing the transition right.
Mr. Millar. Sure.
Mr. DeSaulnier. You have got a lot of experience at it, so,
the modeling you have done is valuable to us. And the degree
that you can inform us on how we can make that more effective,
that would be appreciated.
I yield back.
Mr. Rouzer. Mr. Owens.
Mr. Owens. Thank you, Mr. Chair and Ranking Member. First
of all, thank you for your insight. It has been very
informative so far and, obviously, we have a lot of work to do.
The Biden administration has failed to address, let alone
acknowledge, the crisis at our border, our southern border, as
has been spoken today and talked about. It has led to shutdowns
of essential rail crossings, threatening billions in cross-
border rail traffic commerce that fuels our economy.
As President Biden continues the record spending of our
taxpayer dollars on woke policies, our critical infrastructure
remains compromised. We see bike lanes being prioritized over
building and shoring up our bridges. We see chargers for EVs
that only a minority of Americans can use, prioritized over a
robust, consistent electric grid that every American needs. We
see the Biden administration's Department of Transportation
clearly picking favorites by allocating funding for deep blue
intercity rail projects, while at the heart of our Nation, our
rural communities are increasingly falling behind.
Across my district, small businesses and corporations
depend on a state-of-the-art infrastructure that supports the
easy, convenient, and consistent movement of goods, services,
and people. This ensures successful businesses and the growth
of a robust, successful middle class. Instead, the Biden
administration is giving us a crushing woke regulatory agenda.
This is for everyone, and I am going to start with Mr.
Edwards.
Each year, 32,000 CBP officers provide trade enforcement at
328 ports of entry, processing more than 24 million containers
by sea, truck, and rail. In Utah, we are innovating to execute
a bold vision of an inland port authority. As this committee
and the transportation industry looks at modernizing the way we
trade, how do inland ports fit the objective to improve trade,
minimize the supply chain bottlenecks, and hold China
accountable?
Mr. Edwards, would you start off?
Mr. Edwards. To be clear, Congressman, your question was:
How do inland ports assist in the process?
Mr. Owens. Yes.
Mr. Edwards. So, at the Port of Virginia, we operate two
inland ports, one in Richmond and one in Front Royal in
northern Washington. And we are looking at a third in southwest
Virginia. The way it helps with supply chain is the speed with
which we move the goods through the seaport. So, we are taking
them away from the largest nodal point. The cargo is moving
through the largest nodal point as fast as we can, and then it
can move in-bond, and that allows for CBP to do their work at a
further inland location.
That still requires that cargo to go through screening
because it is coming into the United States at first port of
entry, so, it will be screened at the first location from a
safety perspective. But it is--the fluidity that it provides
into the supply chain is where the benefit is.
Mr. Owens. OK, thank you.
Mr. Millar?
Mr. Millar. Yes. On the intermodal ports issue, there are a
lot of small, inland ports in Washington State that very much
want to be that facility. But we have to understand the market
for that, and how that works in terms of moving freight
nationally.
Mr. Owens. And is----
Mr. Millar [interrupting]. And that moving freight
nationally may mean that the appropriate place for an
intermodal port isn't in Washington State, it's in Utah, it's
in Wyoming, it is somewhere else. And so, having those
conversations at a regional or corridor scale is important.
We are working right now as a part of the AASHTO team.
There is an Interstate 80 corridor that is looking from the
west coast to the east coast, what do we do as a team to make
that corridor smarter and more efficient?
We have the same thing on the I-90 corridor on the northern
side, and then I-10, as well. It's more than the----
Mr. Owens [interrupting]. I want to make sure we get some
feedback also, so, thank you so much. Just real quickly, and
then I have a question for you at the very end.
Mr. Tucker. Congressman, I would say that I agree with what
has been said thus far. And if it is OK with you, I could
respond later in writing.
Mr. Owens. OK, thank you so much.
Ms. Benford, as you know, last month, the Federal Highway
Administration released a final ruling requiring States to set
new standards of acceptable greenhouse gas emissions for the
National Highway System. Aside from the fact that this
administration does not have the legal authority to implement a
greenhouse gas performance measure, rural communities in my
district have raised concerns that small municipalities cannot
replace commuter traffic, auto traffic, and reduce carbon
emissions with new subways or rapid transit bus systems.
Do you share any of these concerns about the demands made
on these communities?
Ms. Benford. Yes, I think I would share all the concerns
that you just said. Being a rural community, again, I mentioned
earlier that we emit less carbon dioxide emissions than many
other States. And so, for us to follow those rules and decrease
our emissions would--we are afraid what that would look like to
our transportation system, and what kind of projects may not
come out because of that.
Mr. Owens. Well, I look forward to working with you on
that, because we have the very same concerns. And across the
country, rural communities are doing the same. So, thank you so
much. I appreciate it.
Mr. Rouzer. The gentleman yields back.
Ms. Titus.
Ms. Titus. Thank you Mr. Chairman, thank the witnesses for
being here.
I don't see how we can talk about the state of
transportation without acknowledging the just historic
investments that were made by the bipartisan infrastructure
bill and the work that Secretary Buttigieg and Mitch Landrieu
have done identifying good projects, involving governments at
all levels, emphasizing equity, and getting the money out the
door as soon as possible.
I represent southern Nevada, Las Vegas primarily, and I
have been working for many years, since 2001, to get a speed
train between Las Vegas and southern Nevada. And now that has
become a reality. We had $3 billion appropriated out of this
bill to start this speed train. They expect that it will be
done in time for the Olympics in Los Angeles. We have labor
agreements in place, we also have done the environmental
studies. It's about ready to break ground.
And listen to how it will be such a game changer. It's
going to generate over $10 billion in economic activity, reduce
carbon monoxide emissions by 400,000 tons, create more than
35,000 construction jobs, most of which are labor jobs, good-
paying, good-benefit jobs. So, that is certainly a benefit that
we have as we talk about the state of transportation.
Also, though, we are seeing a record amount of funding from
the Bipartisan Infrastructure Law and the IRA about water
quality, preventing erosion, keeping more water in Lake Mead.
This helps to preserve the viability of natural resources in
the West, and certainly ties to transportation.
So, I would ask you, Secretary Millar, looking at the fact
that Nevada has received over $6.2 billion from these laws,
with many of the investments focused on underserved groups or
underrepresented groups, and that includes $580 million to
ensure greater access to broadband, including in these rural
areas that some have suggested aren't getting their share, and
also millions in funding to improve the interconnectedness of
public transit that so many people use to get to school, get to
work, get to the doctor.
So, I would say, what are some of the ways that you are
using it in Washington to expand access for these populations,
and in keeping with one of the goals of the administration for
equity in transportation?
Mr. Millar. Well, thank you for that question. We are
spending formula dollars, and we are encouraging our local
governments to apply for the discretionary grant dollars in a
number of areas.
One program, the PROTECT program, for example, we elected
to suballocate all of the money that Washington State got to
local governments. And we are working with two Native American
Tribes, their towns, their villages that--the headquarters of
their Tribal units are on the Washington coast, and they are
subject to sea level rise. And so, we are using the PROTECT
money to move those communities back and up so that they are
safe.
We are also making a point of investing in the overburdened
communities of Washington State. We have the Justice40 stuff
that we talk about at a national level. In Washington State, we
call it the Healthy Environment for All Act, or the HEAL Act,
that requires us to put an equity lens on every expenditure
that we make. So, the money we are receiving for bicycle and
pedestrian infrastructure is going into overburdened
communities. The money we see for public transportation
infrastructure is going into overburdened communities. The
money we receive for preservation work is going into
overburdened communities.
We put together a bridge program, a competitive bridge
program for bridge rehabilitation and replacement for local
governments up to $25 million a project, no local match
requirement at all. In 2023, we did 50 local bridges with that
money.
Ms. Titus. Well, I am glad to hear that. Those are the kind
of things we should be doing, and those are the goals of the
administration, not only to have policy cross all levels of
Government, but to go into all parts of the community.
Something that we are working on, too--I suspect it's kind
of like your HEAL Act--are the Safe Streets, to be sure the
streets are safe for all kinds of transportation, whether
somebody is walking, or riding a bicycle, taking the bus, on
one of the little scooters if you are disabled, and that's
another way we can spread this money to all communities. So, I
appreciate hearing from you about that.
I yield back.
Mr. Rouzer. The gentlelady yields back. Now to the man with
the brightest tie I have ever seen in my life, Mr. Van Drew.
Dr. Van Drew. Thank you, Chairman. It was a dark, cold
morning, and I was up very early, and I just wanted to brighten
my day. I am getting ready for St. Paddy's Day, too.
Mr. Tucker, you are from New Jersey. What part of New
Jersey?
Mr. Tucker. From Haddonfield, New Jersey.
Dr. Van Drew. OK, so--well, I am almost in your district,
but not quite. As you know, I have six counties in south
Jersey, about 40 percent of the State, geographically. So, I
bet that you come down in my district and vacation once in a
while.
Mr. Tucker. I own a place in--yes, at the beach, Ocean
City.
Dr. Van Drew. Which town? Ocean City. Beautiful. Good, glad
to hear it. Spend a lot of money when you're there.
[Laughter.]
Dr. Van Drew. Anyhow, thank you, Mr. Chair.
Joe Biden, which is going to be an unusual tack I'm taking,
but you've got to follow me with this--he has let the southern
border crisis get so bad that it is even affecting our Nation's
supply chain. This past September and December, there were two
separate shutdowns of international freight rail crossings at
El Paso and Eagle Pass, Texas, and there was no indication of
when they would even reopen. These closures were due to an
historic influx of illegal immigration. We all know it. We see
it.
There are over 8 million illegal immigrants in a few more
months have entered the country, 300,000 illegal entries just
in the month of December, 300,000. At the current rate, the
number of illegal immigrants in our country will exceed the
population of our home State, the State of New Jersey, in as
little as 5 more months. The administration is literally
creating the 51st State and the 10th most populous, fully
comprised of illegal aliens.
These realities are contributing to the issues our supply
chain faces even thousands of miles away from the southern
border. It affects the entire country. In total, these rail
border crossings account for roughly $34 billion in commerce.
This is just one facet of our supply chain. How much more money
does our country need to lose due to the effects of these
illegal crossings? How much more evidence does this
administration need before it will finally take action? Enough
is enough.
Mr. Tucker, my friend from New Jersey, this question is for
you. How do these closures impact both security and our supply
chain relating to the southern border?
Mr. Tucker. Congressman, the unexpected nature of the
closures for freight is harmful. It's harmful for the
railroads, it's harmful for the truckdrivers, it's harmful for
the shippers, it's harmful for the receivers, it's harmful for
the processors who are expecting to receive those goods, it's
harmful for the retailers, it's harmful for the consumers.
There is a humanitarian crisis associated with what is
happening down there with individuals jumping onto the train,
children and women and men and people of all ages. So, as I
said earlier, I am glad that I am not the one in charge having
to deal with this mess. But what I can encourage our leaders to
do is to work more closely, collaborate more, and communicate
more with industry to engage industry's help, and give industry
time to figure alternative routes if a crisis occurs.
And so, that's the main message, is: We are here. We are
very involved every single day in the supply chain, and we are
really smart people. But when we are surprised, and we don't
have any opportunities to divert in enough time, that is very
painful.
Dr. Van Drew. I appreciate your candid answer. I have one
more question. I know we only have a few seconds, but there is
a lot of new technology out there, and this new technology
enables us to have autonomous trucking, which concerns me a
great deal. If you could, briefly comment on that.
And also what concerns me is the new technology. I bought a
new vehicle, a GMC--I guess not politically correct, a Yukon
Denali, but I have a lot of people that sometimes travel with
me, and it's very safe and good. But the interesting thing,
when I was updating the computer on that, when they wanted to
update it, they said they would have to disable it for 15
minutes.
Is there actually the ability now--whoever knows the best
on this can answer it--the ability to have a kill switch on a
vehicle, and couldn't that expose us because of some of the
cyber piracy that goes on?
Who wants to answer that real quick?
Mr. Tucker. I can't answer that question about is there
that ability and does it relate to trucking. I can't, that's
not my specialty. I will say that I, too, am concerned about
the security and the nature of security when you have an
80,000-pound vehicle on the road one day and perhaps it could
be hacked into. I think a lot of work needs to be----
Dr. Van Drew [interrupting]. And I know my time is up, but
if they can turn it off to update it, they can turn it off just
to turn it off. And somebody else might be able to hack into
that. I appreciate your time.
Thank you, Mr. Chairman. I yield back.
Mr. Rouzer. Mr. Graves.
Mr. Graves of Louisiana. Thank you, Mr. Chairman. I want to
thank you all for being here today.
Before I get started, Ms. Benford, Ms. Maloy asked you
about some of the regulatory, and I want to clarify one thing.
In fact, I will tell you a quick story.
When Mitch Landrieu called and was talking to me about
being named the infrastructure czar, potentially taking that
position, he asked me what I thought. And I told him, I said,
``Here is your problem. Your problem is that this
administration's regulatory agenda is entirely incompatible
with the infrastructure agenda,'' meaning your regulatory
agenda, it just continues becoming more and more bureaucratic,
more and more redtape, more and more steps until you can't
build things.
And we have seen that. As a matter of fact, taking
Brookings Institute data from November of last year, time-wise,
we were about 40 percent through the implementation of the
IIJA. However, dollar-wise, we still have 80 percent of the
discretionary money in the bank. And on top of it, when you
start looking at the discretionary dollars--and I think this is
a compounding problem--I think it's 50 percent, 50 percent of
the discretionary funds are actually being spent on projects of
$1 million or less.
And so, look, everybody in this room supports
infrastructure. We wouldn't be on this committee if we didn't.
But our problem, I think, at least on this side of the dais, is
that the infrastructure bill is not focused upon true Federal
obligations or true Federal needs.
Mr. Edwards, you have the gateway project, this massive
$1.4 billion project. It is under your jurisdiction. If we are
going to go out there and we are going to sprinkle these little
$200,000, $300,000 grants all over, it's not advancing large-
scale projects that I think really include not just the
interest of the Federal Government, but the obligation and
responsibility.
Lastly, Ms. Benford, coming back to my point here, those
changes that you cited on dates and on pages, it's not because
the administration or CEQ wanted to do it. It's because we
mandated they do. We worked on legislation that was implemented
that I will tell you the White House did not want to sign. They
were forced to do it. It was one of, I think, the crown
accomplishments of this Congress of folks, and it's not just
about a 75-page limit on an EA, a 150-page limit on an EIS.
It's not about a 1-year limit on the EA, a 2-year limit on an
EIS. It raises the threshold. And when NEPA applies, it limits
the scope to only reasonably foreseeable impacts. It ensures
one Federal decision, not having this committee of folks out
there trying to make decisions on natural resources. It really
is crazy, what is going on right now.
Secretary Millar, you noted the improper, perhaps,
resourcing of agencies. I think we need to ask a different
question. You were saying that's why it takes so long to get
these things done. I think we need to ask a different question.
Are we appropriately scoping the projects from a NEPA or an
environmental review or a regulatory perspective? That's the
first question. We don't need to go out there and go do all
these useless steps, and I will give you an example.
When the Deepwater Horizon oilspill happened in the Gulf of
Mexico, we are looking through the oilspill plans. They are
talking about walruses and polar bears--not kidding--in the
Gulf of Mexico. And so, we can't go out there and go waste
money on things that simply don't make sense.
So, Mr. Edwards, I want to ask you a question about your
participation in projects, and if you have ideas or thoughts on
how we could further streamline the implementation of projects
and stop all of this regulatory redtape, and just get wrapped
around the axle.
Mr. Edwards. All right, Congressman, thank you. What I
would say is actually from a--taking a slightly different tack
is that the Virginia Port Authority, we are a political
subdivision, we stand alone. But we have an excellent working
relationship with the Commonwealth of Virginia as a whole. And
what we found on an integrated approach is we have been able to
succeed. So, we have been able to get done the dollars we take
to work.
Now, it may be unique in our space. I have mentioned prior
to two of your colleagues that we do believe there is some
modernization needed within places like the Maritime
Administration on their NEPA approach. But as a general point
of order, whether it is I have either got a great team who know
how to do this or we have managed to work our way through
bureaucracies, but we are actually managing to get to work, and
we are not holding up our gateway project.
Mr. Graves of Louisiana. Thank you.
Secretary Millar, I want to ask you a quick question. Half
of my family lives and have lived in the Whidbey, Port Angeles,
Suquamish, Vashon areas, and I have spent plenty of time on
your ferries. Do you have any feedback on how the Federal
Government could do a better job scoping where its focus is, as
opposed to trying to throw a nickel at every $10 problem across
the country?
Mr. Millar. I think focusing strategically on projects like
the Interstate 5 Bridge over the Columbia River or the Puget
Sound Gateway--lots of people are doing gateways, we are doing
a $2 billion one--but identifying the programs and projects
that are truly of national significance, and putting programs
like the Mega grant program, for example, together to address
them, while at the same time addressing the rural communities
and small towns who want a piece of the pie, as well.
Mr. Graves of Louisiana. Thank you, Mr. Secretary.
Mr. Chairman, we have a $2 billion bridge in my hometown
that should have been done 40 years ago. There is an I-10
Bridge in Lake Charles that's on I-10 that is dilapidated. It
is incredible, watching dollars being thrown at inappropriate
priorities. And I really think we need to help the Federal
Government focus.
I yield back.
Mr. Rouzer. Mrs. Gonzalez-Colon.
Mrs. Gonzalez-Colon. Thank you, Mr. Chair, and thank you to
the witnesses for coming here today.
I want to try to be brief, but Puerto Rico cannot be an
exception on what is happening in terms of the Nation. Actually
the Associated General Contractors and American Society of
Civil Engineers rank infrastructure on the island with a D-
when the average overall score for the U.S. was C-.
So, in that sense, as you may know, Puerto Rico relies
heavily on the maritime and shipping industry, and any delays
or restrictions on maritime routes can potentially impact our
island during regular operations, and more dramatically during
emergency operations.
Having said that, I do have a question for Ms. Benford. In
that sense, Puerto Rico remains on the path towards recovery in
the aftermath of Hurricanes Irma and Maria back in 2017. And
since then, we have received historic allocations of emergency
funds, some of which are meant to address our transportation
infrastructure, including bridges, ports, roads, and our power
grid. Time is of the essence of all these funds, and are
available for a limited amount of time, and they are
desperately needed by the residents of the island.
And contractors are the key stakeholders. Could you please
share some of your setbacks or challenges, if any, that have
been identified by the AGC as a hindrance for contractors to
bid or partake in disaster recovery projects financed by
emergency Federal funds?
Ms. Benford. Yes. So, what I would say is, as a contractor,
there are three keys to us being successful: problem solving,
collaboration, and schedule, right? And so, I will go back to--
and workforce is also an issue, and we have talked a lot about
that today.
But for us to be successful as a team and make sure that we
actually get this money implemented on the ground for the
public, it means that all parties have to work together. So, we
have talked about permitting. All these things have been talked
about today. And I think just to kind of sum it up, it requires
everybody to be at the table and willing to take the necessary
steps to make sure that we can get this in place for the
public.
Mrs. Gonzalez-Colon. You talked about permitting, we talk
about workforce, and I do agree with that, and my office views
the Associated General Contractors, especially the Puerto Rico
chapter, as a key stakeholder in assessing the State and the
rate of construction through Federal funds and State
investment.
But we do experience the same thing, like many of the
States in the Nation, the rising costs on construction, and
that is a big concern. We still have a lot of money that is not
being used because we don't have the workforce to actually use
it. And the same thing happened across the country.
But in your views, are there any flexibilities that we can
identify or put in place as regulations, as amendments to laws,
whether those be regulatory or in statute, that could support
contractors or contracting companies operating in areas with
increased or fluctuating construction costs that we can help?
I have heard ideas related to potential increase in
flexibilities for--escalation cost is one of those. Would that
be a helpful alternative?
Another issue is, of course, the lack of workforce. And can
you share some of the best practices by States the AGC adopted
that lead to larger workforce numbers?
Ms. Benford. So, I will start with price escalation. Our
State does have price escalation. I would say that, as COVID
hit and some other supply chains occurred, we did meet with our
DOTs to try and get other supplies on those lists. And I think
one thing that would be helpful is the 1980 Federal Highway's
memo could be updated. A lot of people were confused as to
whether they could utilize that memo when we were trying to get
some other supplies on that list.
And workforce, it has been talked about a lot, but as a
contractor, workforce is our number-one resource. And so, we
have to do what is best for them to retain and recruit them.
And the best option for us is flexibility. Not one size fits
all of us contractors in every State, even in the same State.
We all have a different way to operate, we all have a different
expectation of what our products look like.
So, it's really flexibility. Giving us the ability--tools,
but not mandating that those tools have to be utilized.
Mrs. Gonzalez-Colon. Thank you. I know I am running out of
time, but I just want to say to Mr. Edwards that Puerto Rico is
heavily reliant on commercial maritime industry, so, that means
that things like WRDA are most expected to work with ports and
bays on the island, and the Army Corps of Engineers for port
maintenance and improvements. And I know this committee is
working to that end, as well.
So, thank you, Mr. Chairman. I yield back.
Mr. Rouzer. Mr. Burlison.
Mr. Burlison. Ms. Benford, in light of the trillions of
dollars that have been spent on our transportation
infrastructure, we still have a C- rating, which has been
mentioned earlier in this hearing, according to the American
Society of Civil Engineers.
And when it comes to that infrastructure, some people might
be asking, ``Why?'' How did we get to the point where we have a
C- rating, despite how much money is being spent?
Ms. Benford. So, I would say that our company really hasn't
seen the dollars yet, and even in our State. So, as I mentioned
in my testimony, there is a lag between the dollars that
actually got sent to the States, the design of those projects,
and then us as contractors actually seeing the work.
So, I would say the bulk of the work actually hasn't hit us
yet. And we are hoping--for Wyoming, we have been told that the
end of 2024 into 2025 will be when we see that work hit.
Mr. Burlison. I know this place likes to think that dollars
are unlimited, but the fact is, they're not. I am looking at
one of the appropriations that I consider wasteful, a wasteful
program, and that's the nearly $8 billion that is sent to
create electric vehicle charging stations, which, in my
opinion, is a method of robbing Peter to pay Paul. It's robbing
individuals from one sector of the economy or individuals who
decide not to use an electric vehicle, to subsidize and pay for
the infrastructure for the private-sector entity and/or
individuals that are using electric vehicles. I don't think
it's fair.
But when I reflect on the fact that nearly $8 billion--how
much is that? In this place, that's not a lot of money. But you
know, where I come from, that's a hell of a lot of money, $8
billion. In Missouri, we weren't able to expand--we had a
dramatic need to expand I-70. And we still have a need to
expand I-44 because of the amount of traffic. It's going to--
Missouri--because of that, the bill that did pass is going to
spend $2.8 billion to expand I-70 all the way from St. Louis to
Kansas City. That's a long way. And yet, when I think about the
impact $8 billion could have if it's spent appropriately, it
could really impact a lot of people. Correct?
Ms. Benford. Yes, I would agree. I think it goes back to
the flexibility of each State. I know that every State has
different needs, and so, we just have to have that in mind.
Mr. Burlison. Is it fair to say that it may not be that we
have a spending problem, it's how we are prioritizing those
dollars?
Ms. Benford. Yes. Again, back to flexibility to give
everyone--for us in Wyoming, I know we struggle with the EV
stations in general. We travel hundreds of miles between
cities. And so, we would be putting two or three between each
city, and then how do you power those?
So, there are challenges that come with designating money
on its own. And we could, like you said, we could be using
those dollars in different ways in our infrastructure.
Mr. Burlison. Mr. Tucker, another reason why we have
transportation issues and infrastructure issues is we place, in
my opinion, a heavy regulatory burden on the industry. For
example, trucking is not provided the flexibility that they
need for their hours of service. FMCSA is close to finalizing a
rule that would mandate the installation of speed limiters in
trucks. Freight rail must give passenger rail, like Amtrak, the
preference over the use of their rails, even though they don't
even own the rail. Aviation is stifled by regulations requiring
a shortage of pilots because we require a certain number of
hours.
With these examples, do you believe that strict regulations
are a big reason why our transportation infrastructure is
lacking?
Mr. Tucker. I think there are a lot of different reasons.
Certainly, regulation is one of them.
I think, again, I have spoken frequently today about fraud
in our industry, and that really does begin to slow things
down. It causes a lot of pain, a lot of loss of cargo.
And I want to reiterate the importance of FMCSA to focus on
safety and a little bit less on obscure regulations that are 50
years old or so and have no bearing today. We are still dealing
with this as a trucking industry.
Mr. Burlison. Thank you.
Mr. Rouzer. The gentleman's time has expired.
Mr. Burlison. I yield back.
Mr. Rouzer. Well, thank you very much. Looking around, I
don't see any other Members who have questions. I would like to
thank our witnesses for their endurance today. It has been
about 3 hours 15 minutes, and I appreciate the opportunity to
have the back-and-forth. It was very informative.
Seeing no other Members with questions, this concludes our
hearing for today. I would like to thank each of our witnesses
again for being here and their time.
The committee stands adjourned.
[Whereupon, at 1:14 p.m., the committee was adjourned.]
Submissions for the Record
----------
Statement of the National Stone, Sand, and Gravel Association,
Submitted for the Record by Hon. Sam Graves
On behalf of the 450 members of the National Stone, Sand, & Gravel
Association I am writing to thank the Committee on Transportation and
Infrastructure for holding today's hearing on ``The State of
Transportation''.
NSSGA members consist of stone, sand and gravel producers;
industrial sand suppliers; and the equipment manufacturers and service
providers who support them. With upwards of 9,000 locations, the
aggregates industry produces 2.5 billion tons of materials used
annually in the United States. Aggregates are the building blocks of
our modern society and are needed to construct and maintain roads,
railways, bridges, tunnels, water supply, sewers, electrical grids and
telecommunications. The aggregates industry is working to deliver the
billions of tons of construction materials needed to build the roads,
bridges, tunnels, rail, transit, ports, energy facilities (including
solar and wind), water conveyance systems, broadband capacity, and
public works project funded through Congress' 2021 adoption of the
largest infrastructure investment in our nation's history--the
Infrastructure Investment and Jobs Act (IIJA). The State of
Transportation is good but could be much better. For the past two
years, we have supported rapid and efficient implementation of the IIJA
and encouraged avoidance of policies not included in the IIJA being
added to IIJA implementation. We are concerned that the historic
investments included in the IIJA may not achieve the intended historic
improvements to our transportation systems because of increased
regulations and other Administration actions that advance policies not
included in the IIJA. These additional regulatory burdens occur on top
of workforce shortage challenges, increased inputs costs, including
fuel, and wage increases.
Regulations
Federal Highway Administration Greenhouse Gas Performance Measure
On December 7, 2023, the Federal Highway Administration (FHWA)
filed the final rule establishing national performance measures for
reducing greenhouse gas emissions (GHG) associated with transportation.
The rule amends 23 CFR Part 490 to add requirements for State DOTs and
metropolitan planning organizations (MPOs) to establish declining
carbon dioxide (CO2) targets and methods for measurement. The rule adds
GHG measures to the National Highway Performance Program (NHPP)
performance measures that FHWA established in 23 CFR part 490 through
prior rulemakings.
The FHWA's final rule relies upon ``reinterpreted'' legal authority
in 150 U.S.C. 23 and 119 U.S.C. 23. The NSSGA filed comments in the
FHWA docket for the rule arguing that no legal authority existed for
the promulgation of the GHG Performance Measurement rule. We noted that
Congress during the development of the IIJA, considered the issue of
GHG measurement authority and rejected their inclusion.
The NSSGA supports the reduction of global GHG emissions and
strongly believes the establishment of authority to reduce GHG within
Title 23 must occur through an act of Congress, not a rulemaking. It is
only through an enactment that the authority claimed in the proposed
rulemaking can be established. Just as importantly, the Congressional
legislative process provides critical benefits to the proposed
authority, including bi-partisan political benefits, improved policy
structure and program design.
Project Labor Agreements
On Dec. 22, 2023, the Biden administration published a final rule
Federal Acquisition Regulation: Use of Project Labor Agreements for
Federal Construction Projects. This rule implemented Executive Order
14063, which subjected federal construction contracts of $35 million or
more to anti-competitive and inflationary project labor agreements.
The NSSGA joined a diverse group of construction and business
associations opposing the new rule and other policies pushing
controversial PLAs on federal and federally assisted construction
projects funded by taxpayers. In comments filed in opposition to the
rule, we pointed out that PLA mandates artificially exacerbate a
shortage of construction industry skilled labor; discourage competition
from quality large, small, and disadvantaged construction businesses;
and needlessly increase construction costs at the expense of
significant recent taxpayer investments in infrastructure, clean energy
and domestic manufacturing construction.
A PLA is a job site-specific collective bargaining agreement unique
to the construction industry that typically requires companies to agree
to recognize unions as the representatives of their employees on that
job, use the union hiring hall to obtain most or all construction
labor, hire apprentices from union-affiliated apprenticeship programs,
follow union work rules and pay into union benefit and multiemployer
pension plans that nonunion employees cannot access. This forces
employers to pay ``double benefits'' into their existing plans and
union plans, puts them at a significant competitive disadvantage and
exposes them to unfunded multiemployer pension plan liabilities. In
addition, PLAs typically require construction workers to pay union dues
and/or join a union if they want to receive union benefits and work on
a PLA project. If they do not satisfy these stipulations, nonunion
workers lose an estimated 34% of their wages and benefits to union
coffers and benefits plans--making them the victims of wage theft.
Particulate matter
On January 6, 2023, the EPA announced a proposal to amend the
National Ambient Air Quality Standard (NAAQS) for fine particle matter
(PM). The NSSGA joined with the National Ready Mixed Concrete
Association (NRMCA) and the Portland Cement Association (PCA),
expressing deep concern over the proposed EPA PM standard that would
lower the NAAQS particulate matter standard (PM 2.5) from 12.0
micrograms per cubic meter of air ( g/m3) to within the range of 8.0 to
11.0 g/m3. Reducing the proposed PM levels from 12 g/m3 to the
proposed 8-11 g/m3 might appear small in theory, but its
implementation would result in a significant shift, hindering the
achievement of the Biden administration's core Infrastructure
Investment and Jobs Act (IIJA) objectives. Complying with the lower
standard would force U.S. manufacturers to reduce operational hours,
decreasing construction material output and potentially leading to
layoffs. This shortage could cause construction delays, impeding the
administration's $550 billion infrastructure overhaul. Furthermore,
this move could shift opportunities for supplying building materials to
overseas competitors due to stringent U.S. emissions regulations,
potentially disadvantaging American manufacturers.
CEQ NEPA Phase 2
The White House Council on Environmental Quality (CEQ) has issued
several actions that complicate the permitting process for large
infrastructure projects under the National Environmental Permitting Act
(NEPA). By broadening definitions, adding more criteria, and
duplicative federal agency reviews, are hindering the development of
infrastructure projects that seek to improve environmental outcomes.
What is more frustrating is that these new actions run counter to the
bipartisan NEPA reforms that were included in the Infrastructure
Investment and Jobs Act (IIJA). Aggregates suppliers across the country
crave certainty, as we work to supply the billions of tons of essential
materials needed to improve roads; upgrade bridges; advance
transportation systems and ports; and advance our modern energy
infrastructure that will be funded by the investments provided by the
bipartisan IIJA. This is especially important in the current economic
environment where needless red tape will delay project implementation
and drive-up costs of construction materials. On July 21, 2023, the
Council on Environmental Quality (CEQ) proposed a ``Bipartisan
Permitting Reform Implementation Rule'' revising its implementing
regulations for the procedural provisions of the National Environmental
Policy Act (NEPA), including amendments to NEPA contained in the Fiscal
Responsibility Act.
The NSSGA supports the goals of NEPA to inform federal decision-
making and the public's understanding of the potential environmental
impacts of federal actions to foster effective engagement in the
federal decision-making process. A fair and efficient federal
permitting system is essential for timely investment to meet a wide
array of critical needs and is consistent with NEPA.
Recognizing that an overly complex federal permitting process often
impedes critical projects, Congress included in the Fiscal
Responsibility Act of 2023 (``FRA''), which significant amendments to
NEPA to simplify NEPA's overcomplicated, needlessly burdensome and
often endless review process. The NSSGA joined coalition comments to
CEQ's Regulations Revisions Phase 2 (``Proposed Rule'') pointing out
provisions of the proposed rule that were contrary to the clear
congressional intent and explicit direction on the FRA NEPA amendments.
The Proposed Rule fails to respect the strong bipartisan spirit
that drove the FRA's NEPA amendments and fails to effectively improve
and further reform the permitting process. While it adopts, as it must,
elements of the FRA, many of its provisions contradict the FRA's
intent: to create a more efficient, predictable, and straightforward
federal review process.
The Proposed Rule revises the existing NEPA regulations to drive
substantive outcomes favored by this Administration's policy
priorities. This approach contravenes decades of case law, agency
practice, and consistent government interpretation that achieved the
fulfillment of NEPA's intent through a rigorous process to enable
informed and transparent decisions, all without tipping the scales in
favor of particular substantive outcomes. Favoring such particular
outcomes is short-sighted and re-orients the application of a landmark
statute in a fashion that ultimately is destabilizing and self-
defeating. If finalized in its current form, the Proposed Rule would
portend a never-ending cycle of regulatory reversals between
Administrations, eroding public confidence and depriving the business
community and the public of the predictability needed for substantial
investment in long-term projects.
Supply Chain
Improvements to the reliability of rail service is an essential
step towards improving the reliability of supply chains for aggregates.
The NSSGA has supported actions by the Surface Transportation Board
(STB) to improve service reliability, service consistency, and adequate
local service. The NSSAG supports the STB's proposed rule on
``Reciprocal Switching for Inadequate Service''. This rule will hold
rail carriers accountable, provide rail shippers some measure of relief
from poorly performing incumbent rail carriers, and enforce, in the
Board's own words, ``unambiguous, uniform standards . . . consistently
applied across Class I rail carriers and their affiliated companies.''
NSSGA continues to support this critical action and the NPRM as a
whole, subject to the modifications NSSGA advanced in its comments. By
providing reciprocal switching rules, aggregate shippers will be
provided additional remedies for poor rail service. Further
improvements to the efficiency and predictability of aggregate
shipments are expected through soon to be announced amendments to STB's
Emergency Service Regulations. These amendments are expected to provide
shippers with an accelerated process for remedies in urgent situations
of service impedance.
Build America, Buy American Act
On August 23, 2023, the Office of Management and Budget (OMB)
released the final guidance implementing the Build American, Buy
America Act (BABAA) contained in the IIJA. The NSSGA led efforts to
ensure the final guidance accurately reflected Congressional intent
with regard to the limitation of domestic content procurement
preferences for materials listed in section 70917(c).
While the guidance did accurately reflect congressional intent for
section 70917(c), challenges remain in the consistent implementation of
BABAA at the state level. State DOTs are employing varying BABAA
compliance certifications which are inconsistent from one state to
another. States continue to vary in their classification analysis for
manufactured products versus construction materials leading to
procurement confusion and slowed contract lettings. Further guidance
from FHWA with more granular direction to the State should be provided
to improve consistent implementation and reduce confusion and delay.
Conclusion
In conclusion, the National Stone, Sand, & Gravel Association
(NSSGA) extends its heartfelt gratitude to the Committee for the
opportunity to testify and share insights on the current state of
transportation. This hearing has been instrumental in highlighting the
pivotal role of the aggregates industry in the development of our
nation's infrastructure. As a key contributor to essential construction
projects, our members face numerous challenges, including regulatory
burdens, workforce shortages, and the complexities of implementing the
Infrastructure Investment and Jobs Act (IIJA). The Association's
concerns regarding the Federal Highway Administration's greenhouse gas
performance measures, the enforcement of Project Labor Agreements, and
the amendments to particulate matter standards in the National Ambient
Air Quality Standards are intended to underline our commitment to
environmental stewardship balanced with practical regulation. As an
industry, we are appreciative of the committee's willingness to
consider these important perspectives, which are vital for navigating
the intricate intersection of regulatory, environmental, and
legislative frameworks in advancing the nation's infrastructure goals.
----------
Letter of January 26, 2024, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Catherine Chase, President, Advocates for Highway and Auto Safety,
Submitted for the Record by Hon. Eleanor Holmes Norton
January 26, 2024.
The Honorable Sam Graves, Chair,
The Honorable Rick Larsen, Ranking Member,
Committee on Transportation and Infrastructure,
United States House of Representatives, Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
Thank you for convening the January 17, 2024, hearing, ``The State
of Transportation.'' Ensuring the safety of the public on our nation's
roadways is fundamental to a successful transportation system.
Advocates for Highway and Auto Safety (Advocates) respectfully requests
this letter be included in the hearing record.
Roadway Safety Requires Swift Intervention
On average, 118 people were killed every day on roads in the U.S.
in 2021,\1\ totaling nearly 43,000 fatalities. An additional 2.5
million people were injured.\2\ This represents a 27 percent increase
in deaths in just a decade.\3\ Early projections for 2022 traffic
fatalities remain high,\4\ as do estimates for the first six months of
2023.\5\ In addition to vehicle occupants, other road users experienced
upturns in deaths. Pedestrian fatalities grew by 13 percent, and
bicyclist deaths were up two percent from 2020 to 2021.\6\ While
pedestrian fatalities are estimated to have decreased one percent in
2022, bicyclist fatalities spiked by 11 percent.\7\ We urge you to
prioritize safety in policies and legislation involving roadway
infrastructure, commercial motor vehicles (CMVs) and the supply chain.
---------------------------------------------------------------------------
\1\ Overview of Motor Vehicle Traffic Crashes in 2021, NHTSA, Apr.
2023, DOT HS 813 435. (Overview 2021).
\2\ Overview 2021.
\3\ Traffic Safety Facts 2020: A Compilation of Motor Vehicle Crash
Data, NHTSA, Oct. 2022, DOT HS 813 375, (Annual Report 2020); and
Overview 2021; [comparing 2012 to 2021].
\4\ Traffic Safety Facts: Crash Stats, Early Estimate of Motor
Vehicle Traffic Fatalities in 2022, NHTSA, Apr. 2023, DOT HS 813 428.
(Early Estimates 2022).
\5\ National Center for Statistics and Analysis. (2023, September).
Early estimate of motor vehicle traffic fatalities for the first half
of 2023 (CrashStats Brief Statistical Summary. Report No. DOT
HS 813 514). NHTSA.
\6\ Overview 2021.
\7\ Traffic Safety Facts: Crash Stats, Early Estimates of Motor
Vehicle Traffic Fatalities And Fatality Rate by Sub-Categories in 2022,
NHTSA, Apr. 2023, DOT HS 813 448.
---------------------------------------------------------------------------
Truck Crash Fatalities and Injuries are Alarmingly High and Extremely
Costly
In 2021, 5,788 people were killed and nearly 155,000 people were
injured in crashes involving large trucks.\8\ Since 2009, the number of
fatalities in large truck crashes has increased by 71 percent.\9\ In
that same timespan, the number of people injured in crashes involving
large trucks increased by 109 percent.\10\ Early estimates indicate
that in 2022, traffic fatalities in crashes involving at least one
large truck were up another two percent; 5,887 people were killed.\11\
In fatal two-vehicle crashes between a large truck and a passenger
motor vehicle, 97 percent of the fatalities were occupants of the
passenger vehicle.\12\ The cost to society from crashes involving large
trucks and buses was estimated to be $143 billion in 2019, the latest
year for which data is available.\13\ When adjusted solely for
inflation, this figure amounts to over $156 billion.\14\
---------------------------------------------------------------------------
\8\ Overview of Motor Vehicle Traffic Crashes in 2021, NHTSA, Apr.
2023, DOT HS 813 435.
\9\ Id. and Traffic Safety Facts 2020: A Compilations of Motor
Vehicle Crash Data, NHTSA, Oct. 2022, DOT HS 813 375. Note, the 71
percent figure represents the overall change in the number of
fatalities in large truck involved crashes from 2009 to 2021. However,
between 2015 and 2016 there was a change in data collection at U.S. DOT
that could affect this calculation. From 2009 to 2015 the number of
fatalities in truck-involved crashes increased by 21 percent, and
between 2016 to 2019, it increased by 7.6 percent, and between 2020 and
2021, it increased by 17 percent.
\10\ Traffic Safety Facts 2021 Data: large Trucks, NHTSA, June 2023
(Revised), DOT HS 813 452; Traffic Safety Facts 2020, NHTSA, Oct. 2022,
DOT HS 813 375. Note, the 109 percent figure represents the overall
change in the number of people injured in large truck involved crashes
from 2009 to 2021. However, between 2015 and 2016 there was a change in
data collection at U.S. DOT that could affect this calculation. From
2009 to 2015 the number of people injured in truck-involved crashes
increased by 59 percent, and between 2016 to 2019, it increased by 18
percent, and between 2020 and 2021, it increased by 5 percent.
\11\ Traffic Safety Facts: Crash Stats; Early Estimates of Motor
Vehicle Traffic Fatalities and Fatality Rate by Sub-Categories in 2022,
NHTSA, Apr. 2023, DOT HS 813 448.
\12\ Insurance Institute for Highway Safety (IIHS), Large Trucks.
See: https://www.iihs.org/topics/fatalitystatistics/detail/large-
trucks.
\13\ 2022 Pocket Guide to Large Truck and Bus Statistics, FMCSA,
Dec. 2022, RRA-22-007.
\14\ CPI Inflation Calculator, BLS, available at https://
www.bls.gov/data/inflation_calculator.htm.
---------------------------------------------------------------------------
Prompt Implementation of The Infrastructure Investment and Jobs Act
(IIJA) is Critical
Commonsense solutions were advanced by the Committee during the
consideration of the IIJA.\15\ The Safe System Approach is incorporated
in the IIJA and undertakes a holistic method to improve safety in the
roadway environment. In addition, the IIJA authorizes safety upgrades
to the Highway Safety Improvement Program (HSIP) that will help to
protect all road users and prevent crashes. The ripple effect of these
crash reductions is wide-ranging and includes less damage to
infrastructure, less congestion caused by crashes, and less expenditure
of first responder resources, among others. The Committee advanced
additional vital provisions to improve safety on our nation's roads
including those to address impaired driving, improve the safety of
vulnerable road users, expand the Safe Routes to School program and
mitigate underride crashes.
---------------------------------------------------------------------------
\15\ Pub. L. 117-58 (2021).
---------------------------------------------------------------------------
Opposition to Weakening Essential Safety Regulations Must be Resolute
Issues involving the nation's supply chain have not been properly
addressed for decades and should not be worsened. We urge the Committee
to reject the following proposals that fail to address the root of
these issues and will jeopardize all road users.
``Teen Truckers'' are a substantial threat to public safety. CMV
drivers under the age of 19 are four times more likely to be involved
in fatal crashes, as compared to CMV drivers who are 21 years of age
and older, and CMV drivers ages 19-20 are six times more likely to be
involved in fatal crashes (compared to CMV drivers 21 years and
older).\16\ Yet, some segments of the trucking industry have been
pushing to allow teenagers to operate CMVs in interstate commerce for
at least 20 years, often relying on their own forecasts for the number
of drivers needed as a rationale. These projections have consistently
failed to materialize.\17\ The trucking industry continues to face a
driver retention crisis, not a driver shortage. In fact, Mr. Jeffrey
Tucker, Chief Executive Officer, Tucker Company Worldwide, testified
during the hearing that there is not a driver shortage and perpetuating
this falsehood could negatively affect the supply chain.\18\
---------------------------------------------------------------------------
\16\ Campbell, K. L., Fatal Accident Involvement Rates By Driver
Age For Large Trucks, Accid. Anal. & Prev. Vol 23, No. 4, pp. 287-295
(1991).
\17\ FMCSA Document ID: 2000-84100-0782. American Trucking
Associations, Truck Driver Shortage Analysis 2015 (Oct. 2015).
\18\ ``The State of Transportation'' Hearing, U.S. House of
Representatives Transportation and Infrastructure Committee, January
17, 2024. Video available at: https://transportation.house.gov/
calendar/eventsingle.aspx?EventID=407090
---------------------------------------------------------------------------
Driver fatigue plagues the trucking industry. The National
Transportation Safety Board (NTSB) has repeatedly cited fatigue as a
major contributor to truck crashes.\19\ Self-reports of fatigue, which
almost always underestimate the problem, find that fatigue in truck
operations is a significant issue. Expanding the hours truck drivers
can drive or undermining use of Electronic Logging Devices (ELDs) to
track driving hours in an attempt to move more goods puts truck
drivers, their loads and everyone on the roads with them at risk.
---------------------------------------------------------------------------
\19\ NTSB, Highway, Multivehicle Work Zone Crash on Interstate 95
Cranbury, New Jersey, June 7, 2014, Accident Report NTSB/HAR-15/02
(Aug. 11, 2015).
---------------------------------------------------------------------------
America's crumbling infrastructure needs improvements not
disproportionate damage from overweight trucks that threaten public
safety. While certain special interests advocate suspending federal
limits on the weight and size of CMVs in response to purported supply
chain issues, these laws are essential to protecting truck drivers, the
traveling public, and our nation's roads and bridges. Raising truck
weight or size limits could result in an increased prevalence and
severity of crashes and cause increased wear and damage to our roadway
infrastructure and bridges. Given the negative impacts, there is
overwhelming opposition to any increases to truck size and weight
limits. The public, local government officials, safety, consumer and
public health groups, law enforcement, first responders, truck drivers
and labor representatives, families of truck crash victims and
survivors, and even Congress on a bipartisan level have all rejected
attempts to increase truck size and weight. The IIJA is investing
billions of dollars across every state in our nation to improve and
elevate the safety of our roads and bridges. These improvements should
not be undercut by allowing bigger or heavier trucks.
Autonomous driving system (ADS) technology may reduce crashes
involving CMVs in the future, but safe deployment on our nation's roads
now is not a viable option and should not be proposed as a solution to
the current supply chain issues. The advent of this technology must not
be used as a pretext to eviscerate essential safety regulations
administered by the Federal Motor Carrier Safety Administration
(FMCSA), and particularly in the absence of new standards to ensure the
technology performs safely and as needed. The public safety protections
provided by the Federal Motor Carrier Safety Regulations (FMCSRs)
become no less important or applicable simply because a CMV has been
equipped with an ADS. In fact, additional substantial public safety
concerns are presented by autonomous commercial motor vehicles (ACMVs).
Autonomous driving technology is still in its relative infancy as
evidenced by fatal and serious crashes involving passenger motor
vehicles equipped with ADS of varying levels.\20\ If those incidents
had involved ACMVs, the results could have been even more catastrophic,
and the death and injury toll could have been much worse. Some of the
most pressing safety shortcomings associated with autonomous vehicle
(AV) technology, which include the ADS properly detecting and reacting
to all other road users, driver engagement and cybersecurity, are
exponentially amplified by the greater mass and force of an ACMV. As
such, it is imperative that ACMVs be subject to comprehensive
regulations, including having a licensed driver behind the wheel for
the foreseeable future.
---------------------------------------------------------------------------
\20\ NHTSA, Standing General Order 2021-01 (Aug. 2021).
---------------------------------------------------------------------------
Advocates and numerous stakeholders developed the ``AV Tenets,''
policy positions which should be a foundational part of any AV
legislation.\21\ The AV Tenets have four main, commonsense categories
including: 1) prioritizing safety of all road users; 2) guaranteeing
accessibility and equity; 3) preserving consumer and worker rights;
and, 4) ensuring local control and sustainable transportation. While
the AV Tenets were developed for application to vehicles under 10,000
pounds, many of the principles also could apply to larger commercial
vehicles. At a minimum, ACMVs must meet safety standards for the ADS
and related systems, including for cybersecurity, and operations must
be subject to adequate oversight as a starting point for their
potential deployment. In March 2023, Advocates released a public
opinion poll that found that 86 percent of respondents were concerned
with sharing the road with driverless trucks.\22\ Moreover, 64 percent
of respondents indicated that their concerns would be addressed if the
vehicles were required to meet minimum government standards.
---------------------------------------------------------------------------
\21\ See: https://saferoads.org/autonomous-vehicle-tenets/.
\22\ Big Village Caravan Survey, Public Concern About Driverless
Cars and Trucks (Feb. 2023).
---------------------------------------------------------------------------
We commend Congress for the safety advances included in the
bipartisan IIJA and have been urging the U.S. Department of
Transportation (DOT) to implement the directives with urgency to
address the motor vehicle crash fatality and injury toll. With roadway
fatalities remaining at a historically high level, expediency is of the
essence.
Thank you for your consideration of these issues. We look forward
to working with you to improve safety on our nation's roadways.
Sincerely,
Catherine Chase,
President, Advocates for Highway and Auto Safety.
cc: Members of the U.S. House of Representatives Committee on
Transportation and Infrastructure
----------
Statement of the National Association of Small Trucking Companies,
Submitted for the Record by Hon. Mike Ezell
The National Association of Small Trucking Companies (NASTC)
commends the committee for holding this hearing on the present state of
U.S. transportation. While transportation faces a range of challenges,
NASTC underscores a major challenge and cause of supply-chain
disruption domestically: fraud and theft of trucked and brokered
freight.\1\
NASTC is a member-based organization whose 15,000 member companies
range from a significant segment that operates on the single-power-
unit, owner-operator model to carriers having more than 100 power
units; NASTC members average 12 power units. These companies mostly
operate in the long-haul, over-the-road, full-truckload, for-hire,
irregular-route sector of interstate trucking. NASTC's members come
from the largest segment of America's long-haul trucking: small motor
carrier businesses. They are representative of the vast majority of our
nation's commercial motor carriers, those having fewer than 100 power
units, which the Transportation Intermediaries Association's (TIA)
witness Mr. Jeffrey Tucker mentioned in his written testimony.
---------------------------------------------------------------------------
\1\ Todd Dills, ``FMCSA needs a `cop on the block' fighting
brokered-freight fraud,'' Overdrive (Nov. 29, 2022) (https://
www.overdriveonline.com/regulations/article/15303681/meaningful-
enforcement-needed-to-fight-freight-fraud).
---------------------------------------------------------------------------
Fraud perpetrators and criminal enterprises plaguing trucking and
brokerage account for a conservatively estimated 3,500 instances
annually. Mr. Tucker testified that freight fraud is an $800 million
problem.\2\ The estimated number of fraud crimes understates the actual
amount of occurrences because many crimes go unreported. The
underwhelming level of law enforcement against these crimes discourages
many motor carriers and truck drivers from spending the time and effort
filing reports with federal transportation authorities.
---------------------------------------------------------------------------
\2\ Testimony of Jeffrey Tucker (https://transportation.house.gov/
uploadedfiles/2024-1-17_fc_hearing_-_jeff_tucker_-_testimony.pdf).
---------------------------------------------------------------------------
In fact, the level of such criminality is extensive and entails
such crimes as double brokering, identity theft, bait-and-switch, and
embezzlement of the funds that intermediaries are required to receive
in trust and pay to the carrier.\3\ These crimes fall especially hard
on small trucking companies, as more than 400 NASTC members have
attested. New entrant owner-operators and small carriers increasingly
face skeptical shippers and brokers, who hesitate to place freight
loads with new entrants who have been in business for only a few
months.
---------------------------------------------------------------------------
\3\ See Liz Young, ``Growing Freight Fraud is Peeling Millions From
the U.S. Shipping Market,'' Wall Street Journal, April 26, 2023; Todd
Dills, ``Growing broker/carrier identity theft schemes reaping
million,'' Overdrive, March 9, 2020; and ``Cyber Scams and High-Tech
Heists: Securing Freight in the Age of Strategic Cargo Theft,'' Supply
Chain Brain, Nov. 7, 2023.
---------------------------------------------------------------------------
NASTC and allied stakeholders have illuminated ``the severity of
the problem and its effect on interstate commerce'' in public comments.
The real-life ``instances of theft of cargo, double brokerage and
misappropriation of funds'' illustrate the ``systemic problems of
supply chain fraud involving organized crime and broker related
fraud.'' \4\ Fraudsters that pose as legitimate entities prey upon
commercial motor carriers and freight brokers, who suffer great harm
(financial, operational, reputational), while the harmful effects
spread much wider. These crimes impose a heavy cost on the innocent
parties involved, including manufacturers, shippers, wholesalers,
retailers, and consumers, not to mention the efficiency and reliability
of our supply chain.
---------------------------------------------------------------------------
\4\ Air & Expedited Motor Carriers Assn., et al., comments on
``Notification of Interim Guidance: Definitions of Broker and Bona Fide
Agents'' (FMCSA-2022-24923), Jan. 17, 2023 (https://
www.regulations.gov/comment/FMCSA-2022-0134-0103). Appendices include
examples of transportation-related crimes, a list of existing statutes
and rules under which transportation and brokerage crimes are
enforceable, and an example of DOT OIG's successful prosecution of such
crime.
---------------------------------------------------------------------------
These frauds and thefts are enabled by two things: high-tech tools
and relative nonenforcement of applicable criminal laws. These
criminals can expand at scale because of their ability to exploit
technology. They are easily able to open under one company name,
operate for a short while, close soon thereafter, and quickly reopen
under a different name. It becomes a whack-a-mole exercise for law
enforcement. Thus, these criminals presently face little risk of law
enforcement investigation and much less risk of being caught and
prosecuted.
Truck transportation and other stakeholders including NASTC have
called to the Federal Motor Carrier Safety Administration's (FMCSA)
attention ``the importance of vigorous retention and enforcement of
these [interstate transportation] rules by not only FMCSA but the
United States Department of Transportation.'' We point out ``FMCSA's
primary charter is to address highway safety . . . [and] assigning
safety ratings to all carriers'' and its lack of authority in criminal
enforcement matters. While the DOT Office of Inspector General has
investigated, developed, and won cases against freight fraudsters under
current law,\5\ what exists today ``is a piecemeal approach to
addressing a major issue of general transportation importance.'' \6\
That is, the problem is scale; OIG has the authority, the expertise,
and the ability, but the level of pursuit of these criminals is
lacking.
---------------------------------------------------------------------------
\5\ For example, see ``Tijuana Man Pleads Guilty to `Double-Broker'
Scheme Targeting San Diego Truckers'' (https://www.justice.gov/usao-
sdca/pr/tijuana-man-pleads-guilty-double-broker-scheme-targeting-san-
diego-truckers).
\6\ Air & Expedited Motor Carriers Assn., et al., comments.
---------------------------------------------------------------------------
The consensus solution NASTC and other stakeholders have proposed
is that the ``Office of the Inspector General (`OIG') at the U.S. DOT
level establish a permanent task force to monitor supply-chain fraud
complaints with the Secretary, and to investigate and prosecute
fraudulent activity consistent with existing civil and criminal
penalties.'' \7\
The key to reducing freight fraud in its many forms is sustained,
focused enforcement against this class of criminality. The
Transportation OIG is the appropriate agency for this task. It will
take vigilance to hold these criminals accountable as well as
congressional support for this solution in order to make a dent. NASTC
and other transportation and intermediary stakeholders, including TIA
and the Owner-Operator Independent Drivers Association (OOIDA), have
noted that OIG's successes, such as prevailing in the Padilla double
brokerage case, show OIG's statutory authority, capability, and
institutional effectiveness for combatting these crimes.
---------------------------------------------------------------------------
\7\ Air & Expedited Motor Carriers Assn., et al., comments.
---------------------------------------------------------------------------
NASTC appreciates the initiative Sen. Mike Braun and Rep. Mike Bost
took in 2023 in contacting OIG about forming an antifreight fraud task
force. We also thank Rep. Bost for continually raising this issue in
this and other committee hearings. We ask the committee to lend its
support to this remedy. Freight fraud is a nonpartisan problem that
requires a bipartisan solution. An OIG task force would put a cop on
the block where today criminals operate with virtual impunity.
Appendix
----------
Questions to Stephen A. Edwards, Chief Executive Officer
and Executive Director, Virginia Port Authority, from
Hon. Mike Ezell
Question 1. Several large shipping firms have imposed fees to
reroute ships to avoid the ongoing attacks in the Red Sea. This is yet
another untimely disruption to an already suffering supply chain. As we
all know, the COVID-19 pandemic highlighted the need to be able to
transport necessary equipment swiftly during emergencies. We also know
these shipping delays trigger a chain of events. To minimize these
impacts there must be a system in place at Ports and a method of
prioritization to ensure urgent supplies are delivered in a timely
fashion. That is why I, along with my colleague, Representative
Garamendi, introduced the FAST PASS Act. This legislation directs the
Secretary of Transportation to study the most efficient way to get
critical supplies into our Ports in critical situations.
Mr. Edwards, in the fall of 2022 when the West Coast ports were
horribly delayed, the Port of Virginia partnered with ocean carriers
and freight rail to re-route critical cargo across the country. Don't
you think the federal government has something to learn from these
kinds of public-private partnerships? Should DOT study the best ways to
fast pass critical cargo for future publicly declared emergencies?
Answer. During the initial months of the COVID-19 pandemic probably
without exception marine terminal operators and ports were able to
expedite emergency supplies for delivery when these cargoes were
identified to them. Our industry has a history of ensuring priority of
response to both domestic and international emergencies. The nature of
supply chain is a co-dependency, as a result each operator knows and
has a business relationship with each other that can be leveraged best
by the industry players when emergencies require this.
I do believe the federal government can learn from best practices.
While each port and marine terminal complex is different, they perform
the same functions as a node. Clearly during the fall of 2022, ports
across the nation performed at markedly different operating levels and
the federal government naturally concentrated on where the problem was.
A review of best practices and why ports operated to vastly different
standards at that time could be useful for the federal government to
mitigate future disruption.
Question to Jeffrey G. Tucker, Chief Executive Officer,
Tucker Company Worldwide, Inc., on behalf of the Trans-
portation Intermediaries Association, from Hon. Burgess
Owens
Question 1. Mr. Tucker, during the hearing, we had a discussion
about ways that we can modernize trade, particularly on how inland
ports can minimize supply chain bottlenecks and hold China accountable.
Can you please further share your thoughts with the committee?
Answer. Relative to China and holding them accountable, if I may,
I'd like to take that in a different direction and urge the
Administration and this committee, and others with jurisdiction to find
ways to encourage or even demand that U.S. companies who provide
critical infrastructure and life-saving and life-sustaining products
have multiple suppliers and not be entirely dependent upon China. The
FLOW Initiative and the President's Council on Supply Chain Resiliency
are on the right track. And while this is not a free market
recommendation, it carefully considers the ramifications to national
security.
Question to Jeffrey G. Tucker, Chief Executive Officer,
Tucker Company Worldwide, Inc., on behalf of the Trans-
portation Intermediaries Association, from Hon. Mike
Ezell
Question 1. I heard from our constituents and members of TIA, KLLM
Transport Services, who are struggling with fraud and the lack of
reporting avenues available. You also mentioned in your testimony how
fraud continues to be a growing problem in the trucking industry.
In your opinion, what are the most effective ways to prevent fraud
and how can Congress better address this issue?
Answer. Congressman Ezell, thank you for the question on fraud in
the supply chain. This is a major issue in the transportation industry
that affects shippers, brokers, carriers, and eventually consumers who
bear the brunt of this with the inflationary impacts. The criminals
that are perpetrating the fraud in the marketplace use many different
tactics and types of fraud. In response to these activities industry
stakeholders, Congress and the federal agencies tasked with motor
carrier and broker registration have a role and responsibility to play
in combating this.
Within our trade association, TIA we have stood up internal
taskforce to information share and best practices to help alleviate
problems. Additionally, we are working in coalition with other industry
stakeholders to educate and inform the transportation community of the
problems and potential solutions that exist.
Congress has done an admirable job at trying to keep the Federal
Motor Carrier Safety Administration (FMCSA) honest in their efforts to
enforce and head off fraud as well. We will ask Congress to continue to
do that.
The FMCSA, to their credit, have begun looking into these issues,
but are woefully behind in addressing this major concern. Because of
the lack of enforcement from the agency over the past 3 years has
essentially told these criminal elements, can you commit fraud with no
repercussions. At one point in time a couple of years ago, FMCSA
informed us that over 10,000 complaints existed in the National
Consumer Complaint Database related to fraud with no activity.
We have established a wish list of ideas that we think the FMCSA
could take fairly quickly to address these concerns and would not
constrain them in terms of resources. The wish list includes, the
following items:
1. Verify the identity of the entity. Verify the business license
with the state they are domiciled in. Place motor carriers out of
service who cannot be verified.
2. Require the FMCSA to post the sale of a motor carrier or broker
business on the Federal Register, so that stakeholders know that the
company has changed hands, and the USDOT/MC number may not be a
representation of the current ownership.
3. Enforce the Principal Place of Business requirements for
registration and shut down licensed entities operating out of P.O.
boxes, UPS and FedEx boxes and entities that operate at the same
address.
4. Do not allow electronic changes to an entity's record without a
pin that must be validated through dual factor authentication.
5. Amend the FMCSA registration system to update registration
updates in real-time. The current model of 30 days allows scamsters to
make changes with no legitimate updates until 30 days later.
6. Implement and enforce the provisions of MAP-21 that require a
licensed broker or forwarder to have three years of relevant experience
or demonstrate sufficient knowledge of the industry to the Secretary.
7. Establish an internal Fraud Task Force within the Department of
Transportation and the Inspector General's office.
8. Require dispatch services to register with the FMCSA as such
and enforce the guidance released by the Agency and the CFR that
dispatch services cannot be a bona fide agent of more than one motor
carrier.
9. Greater coordination and integration between all three
different data sets that the Agency utilizes (Volpe, MCMIS and DataQs).
I truly appreciate your interest in addressing fraud in the supply
chain and look forward to working with you further to combat this
issue.
Question to Lauren Benford, Controller, Reiman Corpora-
tion, on behalf of the Associated General Contractors of
America, from Hon. Eric A. ``Rick'' Crawford
Question 1. Ms. Benford, your written testimony states: ``For the
construction industry, managing inflation defined 2023. Since February
2020, the average cost of construction materials has increased by 37%;
nearly twice as high was the rate of consumer inflation, which was 19%
during that same period . . . More specifically, highway construction
costs have increased 50% since December 2020, according to the Federal
Highway Administration's National Highway Construction Cost Index
(NHCCI).'' \1\
---------------------------------------------------------------------------
\1\ The State of Transportation: Hearing Before the H. Comm. on
Transp. and Infrastructure, 118th Cong., (2024) (written testimony of
Lauren Benford, Controller of Reiman Corporation).
---------------------------------------------------------------------------
Can you please detail how you anticipate inflation remaining a
challenge for the construction industry in 2024?
Answer. Inflation and the high cost of construction materials
continues to be one of the biggest challenges that construction
companies face. As a result, it is driving up the costs of
infrastructure projects nationwide. I would highlight diesel costs as
one of the biggest challenges. High diesel costs mean construction
companies must pay more to operate equipment, deliver materials to
jobsites, and haul away dirt, debris, and equipment. Likewise,
construction workers themselves feel the pain of higher commuting
costs--particularly for jobs in rural areas where workers often have
long commutes. While inflation has slowed, prices have not returned to
normal and are still elevated.
However, contractors remain mostly upbeat. AGC's economic outlook
survey [https://www.agc.org/news/2024/01/04/2024-construction-hiring-
and-business-outlook] also highlights fears about the impacts of higher
interest rates on demand for construction and the risk that the economy
could enter a recession. In addition to these new worries, contractors
remain concerned about workforce shortages and their impact on
construction prices and schedules. Contractors continue to see projects
being delayed--sometimes indefinitely--because of rising costs, slower
schedules, and shrinking demand for the finished products.
Questions to Lauren Benford, Controller, Reiman Corpora-
tion, on behalf of the Associated General Contractors of
America, from Hon. Jenniffer Gonzalez-Colon
Question 1. Ms. Benford, in response to my question about
flexibilities that could be examined to help address cost escalations
for contractors in areas with notably increased construction costs,
like Puerto Rico, you responded that it would be helpful for the 1980
Federal Highway memo to be updated.
Could you please clarify if you were referring to the memo titled
``Development and Use of Price Adjustment Contract Provisions,'' dated
December 10, 1980, with classification code T 5080.3? If so, can you
please explain how an update to this memo would be helpful?
Answer. Correct, I was referring to the ``Development and Use of
Price Adjustment Contract Provisions'' technical advisory [https://
www.fhwa.dot.gov/programadmin/contracts/ta50803.cfm] with
classification code T 5080.3. While the document gives clear guidance
and best practices for price adjustment clauses it is over forty years
old. These price adjustment clauses are not needed during
``noninflationary'' times. As a result, state department of
transportation offices are less familiar. For example, prior to 2022,
most construction companies hadn't utilized one of these provisions on
a highway project since the housing crisis in 2008. As you can imagine
there is a lot of staff turnover at a state DOT in those 14 years. In
early 2022 we had state DOTs telling AGC chapters that FHWA did not
allow for the use of price adjustment clauses. Often, by the time it
was clarified, it was too late for such clauses to be included in
contracts.
Making it clear that these price adjustment clauses are allowed by
FHWA would provide clarity for state DOTs. Likewise, most states
require approval from their state legislature to utilize these
provisions. By ensuring states have the most up to date information in
an updated advisory, we can ensure that we will be ready for the next
time they are needed.
Questions to Lauren Benford, Controller, Reiman Corpora-
tion, on behalf of the Associated General Contractors of
America, from Hon. Tracey Mann
Question 1. Ms. Benford, in regards to the WOTUS, or Waters of the
U.S., the Biden Administration continues to ignore the clear decision
by the Supreme Court in the Sackett vs. EPA case regarding the
definition of Waters of the U.S. under the Clean Water Act. What new
uncertainties exist due to the Administration's changes post-Sackett?
Did the Navigable Waters Protection Rule offer more or less clarity to
you and to your members?
Answer. In response to the Sackett case, the agencies made only
slight edits to their earlier 2023 WOTUS definition when they released
the amended rule in September of that year. Namely, they removed
reference to the ``significant nexus'' test and revised their
definition of adjacency in relation to federally jurisdictional
wetlands. The agencies retained all the ambiguity of their earlier
attempt.
The resultant rule uses vague terms, such as with the application
of the ``relatively permanent'' standard, heavily relies on case-by-
case analysis, and leaves the regulated community guessing what the law
is on many projects. This is especially true with their handling of
ephemeral waterways, in direct contrast to Sackett, where the agencies
now refuse to define ephemeral and instead default to individual
analysis.
``Surgically'' amending portions of their 2023 rule did not fix the
legal issues with their approach, which is why AGC is challenging the
amended rule in court. The Association's legal concerns include the
agencies' handling of interstate waters, their application of the
relatively permanent test, the overly broad coverage of impoundments,
and the vague approach to tributaries that ignores Sackett.
The Navigable Waters Protection Rule offered the regulated
community significant improvements in clarity in contrast to previous
decades' worth of regulatory uncertainty. That clarity increased
confidence in their ability to understand and comply with legal
requirements without hiring an army of consultants and attorneys.
However, that rule would need to be updated to reflect the Sackett
ruling.
Questions to Lauren Benford, Controller, Reiman Corpora-
tion, on behalf of the Associated General Contractors of
America, from Hon. Mike Ezell
Question 1. We talked a lot in this committee over the past year
about the implementation of IIJA. Two of the primary concerns we
explored were inflation and the supply chain. Still, this continues to
be an issue. Just last month I heard from Mississippi stakeholders with
concerns over meeting upcoming ARPA deadlines. The state of Mississippi
chose to invest most of the ARPA funds in improving water
infrastructure. Unfortunately, the number of contractors and
individuals available to complete this work is limited. This,
compounded with several states competing for the same contracts and
supply chain issues, several fear these lifesaving projects will not be
completed in time.
Ms. Benford, do you have suggestions to maximize the use of these
funds--the way Congress intended? Do you believe it is possible to meet
the current ARPA deadlines?
Answer. I think the period of availability for funding in the
American Rescue Plan Act (ARPA) is going to be problematic for a lot of
states. Among other things, supply chain constraints, inflation, and
work force shortages have made doing construction challenging the past
few years.
I cannot speak to the specifics of the projects in Mississippi, but
I can tell you it is why we ask Congress for flexibility when they
authorize funding for construction. There are a multitude of factors--
cold climate, rugged terrain, a work force shortage, project readiness,
permit delays--that can slow down construction. These are also things
that are largely out of control of a construction company but forced to
mitigate. I would encourage you to explore legislation to extend the
ARPA funding deadline for an additional two years to ensure these
projects can be completed.
Question to Lauren Benford, Controller, Reiman Corpora-
tion, on behalf of the Associated General Contractors of
America, from Hon. Celeste Maloy
Question 1. Ms. Benford, when discussing permitting reforms in your
written testimony, you stated that ``AGC is concerned that the White
House Council on Environmental Quality (CEQ)'s changes add bureaucratic
steps in an already onerous and slow process, require more time-
consuming analyses, and increase litigation risk for project decisions.
Additionally, the association is concerned that the changes will
encourage agencies to impose requirements that go beyond CEQ
regulations and would slow agency decision-making and discourage the
transformational investments needed across the economy. Federal
agencies are not just making changes to NEPA, they are systematically
reversing all streamlining reforms from recent years as well as
introducing additional requirements that will delay projects.''
Can you please expand further on this for the committee?
Answer. Two areas where the Administration is adding requirements
to the beleaguered NEPA process are related to climate change and
environmental justice. The Administration's approach has been to add
new layers of costly and time-consuming analysis and outreach on top of
a process that already takes a deep dive into environmental, cultural,
and community impacts and already provides multiple opportunities for
public engagement. For now, NEPA is not a substantive environmental
regulation: It outlines a process to ensure that federal actions have
not skipped over any of their obligations presented in the substantive
environmental regulations. The Administration wants to change the
intent of NEPA to influence environmental outcomes of federal actions.
But to respond to the question, it's important to understand that each
of the substantive environmental regulations requires an often lengthy
and expensive permitting process that also includes public engagement.
The prior Administration had sought to streamline the permitting
processes within the Clean Water Act and the Endangered Species Act,
among others. Most of those advancements have been or are in the
process of being reversed by the current Administration: CWA definition
of Waters of the United States (see response above to question from the
Honorable Tracey Mann) as well as Section 404 Nationwide Permits; CWA
Section 401 Water Quality Certifications; ESA interagency cooperation,
consultation, designation of critical habitat, and protections for
threatened species. In some cases, the agencies are making the
requirements more stringent than before, for example, proposed changes
to the ESA regulations would newly require mitigation where
longstanding practice was to implement reasonable and prudent measures.
The new National Ambient Air Quality Standards for Fine Particular
Matter is another example where the agency voluntarily reviewed the
standard ahead of schedule and tightened it by 25 percent. The change
in NAAQS will have reverberations on permitting for several years down
the road, even though about 86 percent of emissions come from nonpoint
sources such as unpaved roads and wildfires.
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