[House Hearing, 118 Congress]
[From the U.S. Government Publishing Office]
THE STATE OF TRANSPORTATION INFRASTRUC-
TURE AND SUPPLY CHAIN CHALLENGES
=======================================================================
(118-1)
HEARING
BEFORE THE
COMMITTEE ON
TRANSPORTATION AND INFRASTRUCTURE
HOUSE OF REPRESENTATIVES
ONE HUNDRED EIGHTEENTH CONGRESS
FIRST SESSION
__________
FEBRUARY 1, 2023
__________
Printed for the use of the
Committee on Transportation and Infrastructure
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]
Available online at: https://www.govinfo.gov/committee/house-
transportation?path=/browsecommittee/chamber/house/committee/
transportation
__________
U.S. GOVERNMENT PUBLISHING OFFICE
60-063 PDF WASHINGTON : 2025
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COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Sam Graves, Missouri, Chairman
Rick Larsen, Washington, Eric A. ``Rick'' Crawford,
Ranking Member 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., Georgiavid 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 Troy E. Nehls, Texas
Sharice Davids, Kansas Lance Gooden, Texas
Jesus G. ``Chuy'' Garcia, Illinois Tracey Mann, Kansas
Chris Pappas, New Hampshire Burgess Owens, Utah
Seth Moulton, Massachusetts Rudy Yakym III, Indiana
Jake Auchincloss, Massachusetts Lori Chavez-DeRemer, Oregon
Marilyn Strickland, Washington Chuck Edwards, North Carolina
Troy A. Carter, Louisiana Thomas H. Kean, Jr., New Jersey
Patrick Ryan, New York Anthony D'Esposito, New York
Mary Sattler Peltola, Alaska Eric Burlison, Missouri
Robert Menendez, New Jersey John James, Michigan
Val T. Hoyle, Oregon Derrick Van Orden, Wisconsin
Emilia Strong Sykes, Ohio Brandon Williams, New York
Hillary J. Scholten, Michigan Marcus J. Molinaro, New York
Valerie P. Foushee, North Carolina Mike Collins, Georgia
Mike Ezell, Mississippi
John S. Duarte, California
Aaron Bean, Florida
CONTENTS
Page
Summary of Subject Matter........................................ vii
STATEMENTS OF MEMBERS OF THE COMMITTEE
Hon. Sam Graves, a Representative in Congress from the State of
Missouri, and Chairman, 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.............................. 2
Prepared statement........................................... 4
WITNESSES
Chris Spear, President and Chief Executive Officer, American
Trucking Associations, oral statement.......................... 6
Prepared statement........................................... 7
Ian Jefferies, President and Chief Executive Officer, Association
of American Railroads, oral statement.......................... 21
Prepared statement........................................... 22
Jeff Firth, Vice President, Hamilton Construction Company, on
behalf of the Associated General Contractors of America, oral
statement...................................................... 29
Prepared statement........................................... 30
Roger Guenther, Executive Director, Port Houston, oral statement. 40
Prepared statement........................................... 41
Greg Regan, President, Transportation Trades Department, AFL-CIO,
oral statement................................................. 42
Prepared statement........................................... 44
SUBMISSIONS FOR THE RECORD
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on Transportation
and Infrastructure, from Corey Rosenbusch, President and CEO,
The Fertilizer Institute, Submitted for the Record by Hon. Eric
A. ``Rick'' Crawford........................................... 51
Submissions for the Record by Hon. Rick Larsen:
Slide........................................................ 55
Letter of October 3, 2022, to Hon. Pete Buttigieg, Secretary
of Transportation, from the Community Transportation
Association of America et al............................... 164
Letter of January 31, 2023, 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.......................................... 58
Opinion, ``I'm a successful female minority truck driver.
California's AB5 forced me to leave the state I love,'' by Dee
Sova, Fox News, January 30, 2023, Submitted for the Record by
Hon. Doug LaMalfa.............................................. 101
Submissions for the Record by Hon. Dusty Johnson:
Letter of January 31, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Thomas Madrecki,
Vice President, Supply Chain, Consumer Brands Association.. 109
Statement of the Shippers Coalition.......................... 110
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from the American
Chemistry Council.......................................... 166
Statement of the National Mining Association, Submitted for the
Record by Hon. Bruce Westerman................................. 114
Statement of Robert W. Murray, President, National Association of
Waterfront Employers, Submitted for the Record by Hon. Mike
Ezell.......................................................... 119
Submissions for the Record by Hon. Sam Graves:
Letter of February 10, 2023, to Hon. Sam Graves, Chairman,
Committee on Transportation and Infrastructure, from
Christine M. Burgeson, Senior Vice President, Airlines for
America, and attached aviation stakeholders letter of
November 15, 2022.......................................... 133
Report, ``The Safety Impact of Technology and Crew Size: An
analysis of accident data, incorporation of technology, and
train crew staff levels on rail safety trends,'' B.
Dierker, December 2022, Alliance for Innovation and
Infrastructure............................................. 135
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Chet Thompson,
President and CEO, American Fuel & Petrochemical
Manufacturers.............................................. 136
Letter of February 15, 2023, to Hon. Sam Graves, Chairman,
and Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Chris Spear,
President and Chief Executive Officer, American Trucking
Associations............................................... 137
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Kristen Swearingen,
Vice President, Legislative and Political Affairs,
Associated Builders and Contractors........................ 142
Statement of the Association of Equipment Manufacturers...... 145
Letter of February 8, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Jeff Farrah,
Executive Director, Autonomous Vehicle Industry Association 146
Statement of the Corn Refiners Association................... 147
Statement of Joanne F. Casey, President and CEO, Intermodal
Association of North America............................... 148
Letter of February 15, 2023, and ``Competing To Win'' Report,
to Hon. Sam Graves, Chairman, and Hon. Rick Larsen, Ranking
Member, Committee on Transportation and Infrastructure,
from Ben Siegrist, Director of Infrastructure, Innovation,
and Human Resources Policy, National Association of
Manufacturers.............................................. 151
Statement of Michael C. Seyfert, President and Chief
Executive Officer, National Grain and Feed Association..... 153
Letter of January 31, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Michael W. Johnson,
President and CEO, National Stone, Sand & Gravel
Association................................................ 155
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and
Hon. Rick Larsen, Ranking Member, Committee on
Transportation and Infrastructure, from Sean O'Neill,
Senior Vice President of Government Affairs, Portland
Cement Association......................................... 158
Statement of the Wabtec Corporation.......................... 160
APPENDIX
Question from Hon. Eleanor Holmes Norton to Chris Spear,
President and Chief Executive Officer, American Trucking
Associations................................................... 169
Questions to Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads, from:
Hon. John James.............................................. 169
Hon. Eleanor Holmes Norton................................... 172
Hon. Donald M. Payne, Jr..................................... 173
Hon. Henry C. ``Hank'' Johnson, Jr........................... 175
Question from Hon. Henry C. ``Hank'' Johnson, Jr., to Jeff Firth,
Vice President, Hamilton Construction Company, on behalf of the
Associated General Contractors of America...................... 176
Question from Hon. John James to Roger Guenther, Executive
Director, Port Houston......................................... 177
Questions to Greg Regan, President, Transportation Trades
Department, AFL-CIO, from:
Hon. Eric A. ``Rick'' Crawford............................... 177
Hon. Henry C. ``Hank'' Johnson, Jr........................... 177
Hon. Donald M. Payne, Jr..................................... 178
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
January 27, 2023
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 Infrastructure and Supply Chain Challenges''
_______________________________________________________________________
I. PURPOSE
The Committee on Transportation and Infrastructure
(Committee) will meet on Wednesday, February 1, 2023, following
the Committee's Organizational Meeting, in 2167 of the Rayburn
House Office Building to receive testimony at a hearing
entitled ``The State of Transportation Infrastructure and
Supply Chain Challenges.'' The hearing will provide an
opportunity for Members of the Committee to discuss the current
state of our Nation's transportation infrastructure, the
implementation of the Infrastructure Investment and Jobs Act
(IIJA, P.L. 117-58), and receive updates on North American
supply chain challenges. Members will receive testimony from
representatives from the American Trucking Associations (ATA),
the Association of American Railroads (AAR), Associated General
Contractors of America (AGC), Port Houston, and the
Transportation Trades Department, AFL-CIO (TTD).
II. BACKGROUND
STATE OF TRANSPORTATION INFRASTRUCTURE
Infrastructure is generally acknowledged as the physical
facilities that support the transportation, energy, and
communications sectors.\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,
canals, pipelines, bike lanes, and sidewalks, as well as
terminals, 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.
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\1\ U.S. Dep't of Homeland Sec., FEMA, Infrastructure, available at
https://www.fema.gov/glossary/infrastructure.
\2\ National Geographic Resource Library, Transportation
Infrastructure, available at https://education.nationalgeographic.org/
resource/transportation-infrastructure.
\3\ See IGI Global, What is Transportation Infrastructure?,
available at https://www.igi-global.com/dictionary/infrastructure-and-
growth/59134; see also DOT, Research By Mode of Transportation,
available at https://www.transportation.gov/research-and-technology/
research-mode-transportation.
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The United States transportation system, overseen by the
United States Department of Transportation (DOT), includes 4.2
million miles of public roads, nearly 620,000 bridges as of
2020, 3.3 million miles of oil and natural gas pipelines, more
than 250,000 miles of commercially navigable waterways,
approximately 140,000 railroad route-miles, and more than 5,000
public-use airports.\4\ The transportation system also includes
more than 900 urban and 1,200 rural and Tribal public transit
operators and more than 300 ports on the coasts, Great Lakes,
and inland waterways.\5\
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\4\ See OST, Transportation Statistics Annual Report (2022)
available at https://rosap.ntl.bts.gov/view/dot/65841; see also DOT,
DOT Overview, available at https://www.transportation.gov/transition/
dot-overview.
\5\ Id.
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Although the state of infrastructure in the United States
was once unparalleled, according to statistics from 2019, our
country no longer has the best infrastructure in the world.\6\
The World Economic Forum (WEF) ranked United States physical
infrastructure as 13th in the world.\7\ Additionally, a Council
of Foreign Relations' report states that the United States'
infrastructure is dangerously overstretched and lagging behind
economic competitors, particularly China.\8\
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\6\ Declining Global Ranking for U.S. Infrastructure + Looming
Highway Trust Fund Insolvency = Need for New Investment, Am. For
Transp. Mobility (Feb. 3, 2020), available at https://
www.fasterbettersafer.org/2020/02/declining-global-ranking-for-u-s-
infrastructure-looming-highway-trust-fund-insolvency-urgent-need-for-
new-investment/.
\7\ Klaus Schwab, The World Economic Forum, The Global
Competitiveness Rep. (2019), available at https://www3.weforum.org/
docs/WEF_TheGlobalCompetitivenessReport2019.pdf.
\8\ James McBride & Anshu Siripurapu, The State of U.S.
Infrastructure, Council on Foreign Relations (Nov. 8, 2021), available
at https://www.cfr.org/backgrounder/state-us-infrastructure
[hereinafter State of U.S. Infrastructure].
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Further, the American Society of Civil Engineers' (ASCE)
2021 Report Card for American Infrastructure rated America's
overall infrastructure as a C minus.\9\ This report, issued
prior to the enactment of IIJA, recommends the following: ``To
improve our quality of life and strengthen our international
competitiveness, we need a strategic and holistic plan to
renew, modernize, and invest in our infrastructure. This plan
should make basic maintenance a centerpiece as we improve our
legacy systems.'' \10\ The report also encourages streamlining
permitting processes across infrastructure sectors.\11\
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\9\ 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.
\10\ Id.
\11\ Id.
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Ensuring the United States' transportation infrastructure
systems are equipped to handle future demand from freight and
the traveling public is also a challenge. In 2021, DOT
projected that from 2020 to 2050, freight activity would
increase by 50 percent in tonnage and double in value.\12\ This
is significant, as the $20 trillion United States economy
relies on the vast network of infrastructure, and poor
infrastructure can impose large costs on the economy and
negatively affect economic competitiveness.\13\ Additionally,
the need to update and improve America's aging infrastructure
is paramount for mobility and safety.\14\ The Biden
Administration's DOT's Strategic Plan for Fiscal Year (FY) 2022
to FY2026 identifies the following strategic goals: safety;
economic strength and global competitiveness; equity; climate
and sustainability; transformation; and organizational
excellence.\15\
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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\ State of U.S. Infrastructure, supra note 8.
\14\ Declining Global Ranking for U.S. Infrastructure + Looming
Highway Trust Fund Insolvency = Need for New Investment, Americans for
Transp. Mobility (Feb. 3, 2020), available at https://
www.fasterbettersafer.org/2020/02/declining-global-ranking-for-u-s-
infrastructure-looming-highway-trust-fund-insolvency-urgent-need-for-
new-investment/.
\15\ DOT, Strategic Plan FY 2022-2026 available at https://
www.transportation.gov/sites/dot.gov/files/2022-04/US_DOT_FY2022-
26_Strategic_Plan.pdf.
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III. The Infrastructure Investment and Jobs Act
On November 15, 2021, the President signed IIJA into law,
representing the largest Federal investment in decades in the
United States' infrastructure.\16\ This legislation provided
$1.2 trillion for infrastructure programs over five years, from
FY 2022 to FY 2026, of which $660 billion will be administered
by DOT.\17\ IIJA included provisions to sustain and modernize
the Nation's infrastructure, including roads, bridges, transit,
railroads, and airports, as well as energy and broadband.
Specifically, the law provides:
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\16\ IIJA, Pub. L. 117-58, (2021).
\17\ FHWA., Bipartisan Infrastructure Law, available at https://
www.fhwa.dot.gov/bipartisan-infrastructure-law/.
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L$365 billion for highway programs administered by
the Federal Highway Administration (FHWA); \18\
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\18\ See id. (providing further information on highway programs).
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L$108 billion for transit programs administered by
the Federal Transit Administration (FTA); \19\
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\19\ See FTA, Bipartisan Infrastructure Law, available at https://
www.transit.dot.gov/BIL (providing further information on transit
programs).
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L$102 billion for rail programs administered by
the Federal Railroad Administration (FRA); \20\
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\20\ See FRA, Bipartisan Infrastructure Law Information From FRA,
available at https://railroads.dot.gov/BIL (providing further
information on rail programs).
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L$43 billion for multimodal project, safety, and
innovation grant programs administered by the Office of the
Secretary of Transportation (OST); \21\
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\21\ Bipartisan Infrastructure Law Dashboard, DOT, https://
www.transportation.gov/mission/budget/bipartisan-infrastructure-law-
dashboard (last updated Dec. 28, 2021).
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L$25 billion for aviation programs administered by
Federal Aviation Administration (FAA); \22\
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\22\ See FAA, What the Bipartisan Infrastructure Law Means for U.S.
Aviation, available at https://www.faa.gov/bil (providing further
information on aviation programs).
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L$8 billion for safety programs administered by
National Highway Traffic Safety Administration (NHTSA); \23\
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\23\ See NHTSA, Bipartisan Infrastructure Law, available at https:/
/www.nhtsa.gov/bipartisan-infrastructure-law (providing further
information on NHTSA programs).
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L$5 billion for motor carrier safety programs
administered by Federal Motor Carrier Safety Administration
(FMSCA); \24\
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\24\ Bipartisan Infrastructure Law: Impacts for FMCSA Grant
Programs, DOT, https://www.fmcsa.dot.gov/Bipartisan-Infrastructure-Law-
Grants (last updated Jan. 6, 2022).
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L$2.3 billion for port and waterway programs
administered by the Maritime Administration (MARAD); \25\ and
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\25\ See MARAD, Bipartisan Infrastructure Law: Maritime Admin.,
available at https://www.maritime.dot.gov/about-us/bipartisan-
infrastructure-law-maritime-administration (providing further
information on MARAD grant programs).
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L$1 billion for modernization of natural gas
distribution pipelines administered by the Pipeline and
Hazardous Materials Safety Administration (PHMSA).\26\
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\26\ See Press Release, PHMSA, USDOT Begins Accepting Applications
for President Biden's Bipartisan Infrastructure Law Program Designed to
Improve Pipeline Safety, Reduce Gas Distribution Leak in Communities
Across the Country, (May 24, 2022), available at https://
www.phmsa.dot.gov/news/usdot-begins-accepting-applications-president-
bidens-bipartisan-infrastructure-law-program (providing further
information on pipeline grants).
While IIJA provided historic levels of funding to address
America's infrastructure needs, stakeholders have raised
concerns that persistently high inflation is undermining those
funding increases.\27\ The majority of funding in IIJA (under
FHWA, FTA, and OST) allows recipients up to four years to
obligate funding. If high inflation levels continue to hold,
IIJA's funding increases in the outyears also would
``erode''.\28\ However, if the higher inflation levels
experienced since early 2021 drop, IIJA's buying power may not
be affected in the outyears.
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\27\ Jenni Bergal, Inflation is Cutting Into States' Big
Infrastructure Windfall, The Pew Charitable Trusts, (Nov. 30, 2022),
https://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/
2022/11/30/inflation-is-cutting-into-states-big-infrastructure-
windfall; David A. Lieb & Michael Casey, Inflation Taking a Bite Out of
New Infrastructure Projects, Associated Press, (June 19, 2022),
available at https://apnews.com/article/inflation-us-infrastructure-
projects-e89dcd5f3e623e532353f087265f9a63.
\28\ Jeff Davis, How Much Could Inflation Erode IIJA Buying Power?,
ENO Ctr. for Transp. (Apr. 27, 2022), available at https://
www.enotrans.org/article/how-much-could-inflation-erode-iija-buying-
power/.
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Inflation began rising in January 2021, reaching a 41-year
record high of 9.1 percent in June 2022.\29\ As of December
2022, the 12-month inflation rate stood at 6.5 percent, and
slowed for the sixth month in a row.\30\ However, this marks
the 22nd consecutive month that the rate remains far above the
two percent the Federal Reserve targets for a stable
economy.\31\ Additionally, producer prices representing prices
paid by businesses producing goods, increased 6.2 percent year-
over-year.\32\
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\29\ Press Release, U.S. Bureau of Labor Statistics, 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.
\30\ Press Release, U.S. Bureau of Labor Statistics, Consumer Price
Index--Dec. 2022, (January 12, 2023), available at https://www.bls.gov/
news.release/cpi.htm.
\31\ U.S. Bureau of Labor Statistics, 12-Month Percentage Change,
Consumer Price Index, selected categories, available at https://
www.bls.gov/charts/consumer-price-index/consumer-price-index-by-
category-line-chart.htm; Board of Governors of the Fed. Reserve System,
Current FAQ's, What is an Acceptable Level of Inflation?, https://
www.federalreserve.gov/faqs/5D58E72F066A4DBDA80BBA659C55F774.htm (Last
updated July 25, 2011).
\32\ Press Release, U.S. Bureau Of Labor Statistics, Producer Price
Indexes--December 2022 (January 18, 2023), available at https://
www.bls.gov/news.release/ppi.nr0.htm.
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In early 2022, the Eno Center for Transportation warned
that if inflation for highway costs averaged higher than seven
percent through 2027, the increased funding provided for
highways under IIJA could be eliminated entirely.\33\ In June
2022, the American Association of State Highway and
Transportation Officials (AASHTO) also raised concerns about
the ability of states to capitalize on IIJA funding due to
inflation, saying ``[t]he cost of those projects is going up by
20%, by 30%, and just wiping out that increase from the federal
government that they were so excited about earlier in the
year.'' \34\ Prices for construction materials remain
particularly steep. In December 2022, the AGC cautioned that
although inflation may be moderating in some areas,
construction costs were still rising and squeezing businesses,
citing an 11.2 percent increase in non-residential construction
prices year-over-year.\35\
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\33\ Jeff Davis, How Much Could Inflation Erode IIJA Buying Power?,
ENO Ctr. for Transp. (Apr. 27, 2022), available at https://
www.enotrans.org/article/how-much-could-inflation-erode-iija-buying-
power/.
\34\ David A. Lieb & Michael Casey, Inflation Taking a Bite Out of
New Infrastructure Projects, Associated Press, (June 19, 2022),
available at https://apnews.com/article/inflation-us-infrastructure-
projects-e89dcd5f3e623e532353f087265f9a63.
\35\ 2022 Construction Inflation Alert, Associated Gen. Contractors
of Am., available at https://www.agc.org/sites/default/files/users/
user21902/Construction%20Inflation%20Alert
%20Dec%202022_V4.pdf.
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Fuel costs began increasing in 2021, and over the past
year, gasoline and diesel prices surpassed record highs.\36\
The rate at which these prices increased were also record-
breaking.\37\ These historically high prices contribute to
increased business costs at multiple points in supply chains.
After reaching a record high of $5.81 per gallon last summer,
the National average price for a gallon of diesel fuel was
$4.60 per gallon as of January 23, 2023, an increase of $1.89
per gallon or about 70 percent, from January 2021.\38\ The
average price for a gallon of regular gasoline reached an all-
time national high of $5.00 in June 2022, but as of January has
fallen to $3.41 per gallon.\39\
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\36\ See U.S. Energy Information Admin., Petroleum & Other Liquids,
Weekly U.S. No 2 Diesel Retail Prices, available at https://
www.eia.gov/dnav/pet/hist/LeafHandler.ashx?
n=PET&s=EMD_EPD2D_PTE_NUS_DPG&f=W.
\37\ Data Spotlight, Bureau Of Transp. Statistics, Record Breaking
Increases in Motor Fuel Prices in 2022, (Aug. 18, 2022), available at
https://www.bts.gov/data-spotlight/record-breaking-increases-motor-
fuel-prices-2022.
\38\ See U.S. Energy Information Admin., Petroleum & Other Liquids,
Weekly U.S. No 2 Diesel Retail Prices, available at https://
www.eia.gov/dnav/pet/hist/LeafHandler.ashx?
n=PET&s=EMD_EPD2D_PTE_NUS_DPG&f=W.
\39\ Id.
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IV. Supply Chain Challenges and Administrative Actions
THE SUPPLY CHAIN
The supply chain is defined as a network of the entire
process of making and selling commercial goods, from the supply
of materials, manufacture of the goods, through their
transportation, distribution, and sale.\40\ Moving goods is
critical to the success of this endeavor.\41\ A well-managed
supply chain results in the efficient use of resources, reduced
costs, a faster production cycle, and satisfied consumers.\42\
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\40\ 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.
\41\ The Transportation Supply Chain, Supply Chain Drive, (Jan. 17,
2021) available at https://www.supplychaindive.com/spons/the-
transportation-supply-chain/433934/.
\42\ 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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The rapid spread of COVID-19 exposed fragilities 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.\43\ Weaknesses in the global supply chain were
exacerbated by supply and demand imbalances, restrictions and
regulations, and workforce and infrastructure challenges.\44\
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\43\ 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].
\44\ 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.
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In response to the COVID-19 pandemic, factories in Asia
closed, and shipping companies cut schedules anticipating
reduced demand for consumer goods.\45\ However, the rapid
growth of e-commerce during the pandemic led to a surge in
consumer demand that inundated the system, particularly for
freight, shipped from Asia into West Coast ports and
transported through the rest of the country via truck and
rail.\46\ The lack of available space onboard vessels, trains,
and trucks; in distribution warehouses; and at ports, impacted
industries, frustrated consumers across the country and
increased prices for some goods and commodities.\47\
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\45\ See Simina Mistreanu, China's Factories Are Reeling from
Forced Coronavirus Closures, Forbes (Feb. 23, 2020), available at
https://www.forbes.com/sites/siminamistreanu/2020/02/23/chinas-
factories-are-reeling-from-forced-coronavirus-closures/
?sh=21d514eb73f2; see also COVID-19 Cuts Global Maritime Trade,
Transforms Industry, United Nations Conference on Trade and
Development, (Nov. 12, 2020), available at https://unctad.org/news/
covid-19-cuts-global-maritime-trade-transforms-industry.
\46\ Jessica Young, US E-Commerce Grows 32.4% in 2020, Digital
Commerce 360 (Feb. 18, 2022), available at https://
www.digitalcommerce360.com/article/us-ecommerce-sales/.
\47\ How the Supply Chain Broke supra note 43.
---------------------------------------------------------------------------
For example, the Ports of Los Angeles and Long Beach (San
Pedro Bay ports), the Nation's two largest container ports by
TEU (Twenty Foot Equivalent units) for calendar year 2022,
experienced significant cargo volume increases.\48\ The
inability to process incoming shipping containers resulted in
cargo logjams off-shore and within the port complex.\49\ First
reported as a five-vessel backlog, on October 15, 2020, the
number of vessels waiting to berth at the San Pedro Bay ports
steadily increased during the pandemic, consistently resetting
records before peaking at 109 vessels in January 2022.\50\ The
backlog at the Nation's two largest container ports ended in
November 2022, in part due to a new queuing system, reduced TEU
volumes, and increased investments in other ports, as shippers
and cargo carriers demanded more diversity within the
transportation supply network.\51\
---------------------------------------------------------------------------
\48\ DOT, Bureau of Transp. Statistics, 2023 Port Performance
Freight Statistics Program: Annual Rep. to Congress (Jan. 2023)
available at https://rosap.ntl.bts.gov/view/dot/65990.
\49\ Id.
\50\ Paul Berger, Southern California's Notorious Container Ship
Backup Ends: Slump in Imports, Cargo Diversions to Other Ports Help
Shrink Quote of Dozen of Vessels, Wall St. J. (Oct. 21, 2022) available
at https://www.wsj.com/articles/southern-californias-notorious-
container-ship-backup-ends-11666344603.
\51\ See Alejandra Salgado, The `Ship Backup Has Ended' at Los
Angeles, Long Beach Ports: Lower Demand as a Result of Cargo Shifting
to the East Coast has Helped Clear the 25-month Backlog, Supply Chain
Drive, (Nov. 23, 2022), available at https://www.supplychaindive.com/
news/the-ship-backup-has-ended-in-los-angeles-long-beach-ports/637250/;
see also Lori Ann LaRocco, East Coast Ports Including New York are
Winning a Domestic Trade War at the Expense of California, CNBC (Dec.
15, 2022) available at https://www.cnbc.com/2022/12/15/east-coast-
ports-like-new-york-are-winning-trade-war-over-california.html.
---------------------------------------------------------------------------
BIDEN ADMINISTRATION ACTIONS TO ADDRESS THE SUPPLY CHAIN CRISIS
The Executive branch took various actions to relieve
pressure on the supply chain, including issuing Executive Order
(EO) 14017, ``America's Supply Chain.'' \52\ Signed on February
21, 2021, the EO directed Federal agencies to conduct a 100-day
review of and report on the supply chain vulnerabilities
associated with key imports.\53\ A broader one-year review was
also required.\54\ The order prioritized reviews by the
Departments of Commerce, Energy, Defense, and Health and Human
Services, which were subsequently released on June 8, 2021.\55\
DOT's report, Supply Chain Assessment of the Transportation
Industrial Base: Freight and Logistics, was released on
February 24, 2022.\56\ On the same day, the Administration
announced additional plans to build long-term resilience in
supply chains based on findings from the reports ordered by
E.O. 14017.\57\
---------------------------------------------------------------------------
\52\ Exec. Order No. 14,017, 86 Fed. Reg. 11,849 (Feb. 24, 2021),
available at https://www.govinfo.gov/content/pkg/FR-2021-03-01/pdf/
2021-04280.pdf.
\53\ Id.
\54\ Id.
\55\ The White House, Building Resilient Supply Chains,
Revitalizing American Manufacturing, and Fostering Broad-Based Growth
(June 2021) available at https://www.whitehouse.gov/wp-content/uploads/
2021/06/100-day-supply-chain-review-report.pdf.
\56\ DOT, Supply Chain Assessment of the Transportation Industrial
Base: Freight and Logistics (Feb. 2022), available at https://
www.transportation.gov/sites/dot.gov/files/
2022-03/EO%2014017%20-
%20DOT%20Sectoral%20Supply%20Chain%20Assessment%20-
%20Freight%20and%20Logistics_FINAL_508.pdf.
\57\ Press Release, The White House, The Biden-Harris Plan to
Revitalize American Manufacturing and Secure Critical Supply Chains in
2022 (February 24, 2022) available at https://www.whitehouse.gov/
briefing-room/statements-releases/2022/02/24/the-biden-harris-plan-to-
revitalize-american-manufacturing-and-secure-critical-supply-chains-in-
2022/.
---------------------------------------------------------------------------
Additionally, on June 8, 2021, the White House announced
the establishment of a Supply Chain Disruption Task Force (Task
Force), led by the Secretaries of Commerce, Transportation, and
Agriculture. The Task Force is directed to focus on a whole-of-
government response to address short-term supply chain
bottlenecks, with an emphasis on ``homebuilding and
construction, semiconductors, transportation, and agriculture
and food.'' \58\ Coordinated by the National Economic Council,
the Task Force produced a series of blog posts highlighting the
congestion at ports, in addition to coordinating inter-agency
and stakeholder meetings.\59\ This data collection function was
transferred to the DOT in March of 2022.\60\ The Administration
also announced the Freight Logistics Optimization Works (FLOW)
initiative on March 15, 2022, which includes a pilot effort to
``develop a proof-of-concept information exchange and
operationalize it to support industry decision-making.'' \61\
Participants include private companies, warehousing and
logistics firms, ports, and others.\62\ Finally, the Task Force
led calls to implement a container dwell fee at the San Pedro
Bay ports, as an incentive to clear long-dwelling cargo off of
terminals. This fee was never implemented, and the authority to
collect phased out on January 24, 2023.\63\
---------------------------------------------------------------------------
\58\ Press Release, The White House, Fact Sheet: Biden-Harris
Administration Announces Supply Chain Disruptions Task Force to Address
Short-Term Supply Chain Discontinuities (June 8, 2021), available at
https://www.whitehouse.gov/briefing-room/statements-releases/
2021/06/08/fact-sheet-biden-harris-administration-announces-supply-
chain-disruptions-task-force-
to-address-short-term-supply-chain-discontinuities/.
\59\ Recent Progress at Our Ports: Robust Inventories and New Moves
Toward Greater Velocity, The White House (Nov. 29, 2021), available at
https://www.whitehouse.gov/nec/briefing-room/2021/11/29/recent-
progress-at-our-ports-robust-inventories-and-new-moves-toward-greater-
velocity/.
\60\ Press Release, DOT, Transportation Supply Chain Indicators
(Mar. 1, 2022), available at https://www.transportation.gov/briefing-
room/transportation-supply-chain-indicators.
\61\ Agency Information Collection Activities; New Information
Collection: Freight Logistics Optimization Works (FLOW) Initiative, 87
Fed. Reg. 42,796 (July 18, 2022), available at https://www.govinfo.gov/
content/pkg/FR-2022-07-18/pdf/2022-15247.pdf.
\62\ Id.
\63\ Ports of LA, Long Beach to End Container Dwell Fee, Safety4Sea
(Dec. 20, 2022), available at https://safety4sea.com/la-long-beach-end-
container-dwell-fee/.
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V. WITNESSES
LMr. Chris Spear, President and Chief Executive
Officer, ATA
LMr. Ian Jefferies, President and Chief Executive
Officer, AAR
LMr. Jeff Firth, Vice President, Hamilton
Construction, on behalf of AGC
LMr. Roger Guenther, Executive Director, Port
Houston
LMr. Greg Regan, President, Transportation Trades
Department, AFL-CIO (TTD)
THE STATE OF TRANSPORTATION INFRASTRUCTURE AND SUPPLY CHAIN CHALLENGES
----------
WEDNESDAY, FEBRUARY 1, 2023
House of Representatives,
Committee on Transportation and Infrastructure,
Washington, DC.
The committee met, pursuant to call, at 10:05 a.m., in room
2167 Rayburn House Office Building, Hon. Sam Graves (Chairman
of the committee) presiding.
Mr. Graves of Missouri. The committee will come to order.
I would ask unanimous consent that the chairman be
authorized to declare a recess at any time during today's
hearing.
Without objection, that is so ordered.
I now recognize myself for the purpose of an opening
statement.
OPENING STATEMENT OF HON. SAM GRAVES OF MISSOURI, CHAIRMAN,
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Mr. Graves of Missouri. I do point out that in my opening
before that I said that we will have four-person panels. I see
we have a five-person panel. My staff has just taken note of
that. That will be corrected, but I do appreciate all of our
witnesses being here.
Robust and respectful discussions are very much a part of
this process, which brings us to today's hearing, which is
entitled ``The State of Transportation Infrastructure and
Supply Chain Challenges,'' which kicks off our activity for the
118th Congress.
America has a vast transportation network that is essential
to the Nation's economic competitiveness, the movement of
people and goods, both nationwide and globally, and is integral
to obviously Americans' quality of life.
Vulnerabilities within our transportation network were laid
bare during the COVID-19 pandemic and were only made worse by
stifling our regulation.
The Infrastructure Investment and Jobs Act, IIJA, signed
into law on November 15, 2021, provided $1.2 trillion, roughly
half of which went towards programs that are under this
committee's jurisdiction. I did not support the IIJA; however,
I do accept that it is now the law of the land.
What we have to do is make sure that Congress, and in
particular, this committee, ensures that the money from the
IIJA is spent responsibly and is directed towards making our
Nation's transportation supply chain more efficient and more
resilient. We owe it to the American people to do just that.
So, with that, I recognize Ranking Member Larsen for his
opening statement.
[Mr. Graves of Missouri's prepared statement follows:]
Prepared Statement of Hon. Sam Graves of Missouri, Chairman, Committee
on Transportation and Infrastructure
America has a vast transportation network that is essential to the
nation's economic competitiveness, the movement of people and goods
both nationwide and globally, and is integral to Americans' quality of
life.
Vulnerabilities within our transportation network were laid bare
during the COVID-19 pandemic and were only made worse by stifling
regulations.
The Infrastructure Investment and Jobs Act (IIJA), signed into law
on November 15, 2021, provided $1.2 trillion, roughly half of which
went toward programs under this Committee's jurisdiction.
Although I did not support IIJA, I accept that it is the law of the
land. What we have to do is make sure Congress and this Committee
ensure the money from IIJA is spent responsibly and is directed toward
making our Nation's transportation supply chain more efficient and
resilient. We owe it to the American people to do just that.
OPENING STATEMENT OF HON. RICK LARSEN OF WASHINGTON, RANKING
MEMBER, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE
Mr. Larsen of Washington. I ask consent to have the rest of
your time as well on the opening statement.
[Laughter.]
Mr. Chair, thank you so much for holding this hearing. I
appreciate it. As committee Democrats organized this week, we
set priorities for this Congress to promote investments in a
cleaner, greener, safer, and more accessible transportation
network; to ensure these investments create jobs and
opportunities; to build capacity in our communities as they put
Federal dollars to work; to restore and protect our
environment; and to safeguard our Nation's economic
sustainability and competitiveness. I know Members on both
sides of the aisle share many of these goals, and we do stand
ready to work together in good faith where we can find common
ground.
We have come a long way in 2 years. At the start of the
117th Congress, we faced an unprecedented economic challenge as
COVID-19 placed incredible stress on American workers and
families as well as massive pressure on supply chains. These
pressures exposed the fragilities of an aging, congested, and
overburdened transportation and infrastructure network that was
dangerously overdue for an overhaul.
Last Congress, we finally responded decisively to bolster
our economy and limit the fallout from the immediate crisis
facing our Nation, while modernizing and transforming the way
people and goods move, with the passage of several landmark
bills: the American Rescue Plan, the Inflation Reduction Act,
the CHIPS and Science Act, and the Bipartisan Infrastructure
Law, or BIL. This committee had the largest role in delivering
the BIL and will continue to focus on the implementation of the
$660 billion where we have oversight.
This dollar amount and the number of grant opportunities is
significantly larger than any previous transportation or
infrastructure authorization that the DOT has administered. And
the pace at which these dollars are reaching communities is
impressive.
DOT has already made available over $150 billion in
highway, transit, and airport formula money over fiscal years
2022 and 2023. And these are not federally controlled dollars.
This funding passes through the U.S. DOT directly to States and
local governments to build projects--projects designed and
built by private sector construction and engineering firms and
workers they hire in everyone's districts. That is why you will
hear me say frequently that transportation means jobs.
States have launched 29,000 new projects with Federal
highway formula funding in fiscal year 2022, according to an
analysis from the American Road and Transportation Builders
Association. That is at least one new project underway in every
congressional district in the country. The BIL also provides
funding for competitive grant programs, and, to date, the
administration has announced funding for 6,900 projects under
competitive grants to over 4,000 communities nationwide for
roads, bridges, rail, buses, ferries, ports, safety projects,
and other infrastructure needs.
BIL grants provide strong support for projects in
geographically diverse areas. Under the RAISE grant program,
funds are awarded evenly between rural and urban areas. In the
latest round of INFRA grants totaling $1.5 billion, 15 of 26
projects selected were in rural areas. The Rural Surface
Transportation Grant Program awarded $274 million to 12
projects in its first funding round as well. And it supports
major projects that are larger than any one State or community
could advance, such as the recently announced grants for the
Hudson tunnels in New York and the Brent Spence Bridge
connecting Ohio and Kentucky.
BIL also includes grants exclusively for Tribes and local
communities, such as the Tribal Transportation Program Safety
Funds and Safe Streets and Roads for All, to ensure these
communities reap the benefits of transportation investments.
So, we have 4 more years of this bill to implement for
States and local communities and Tribes, and oversight to
continue. We need to ensure that the investments represent a
benefit for our local priorities, put people to work in our
districts, and maintain and modernize our infrastructure.
However, this won't happen if we play chicken with the U.S.
ability to invest, especially invest in our competitiveness,
and threaten the U.S. economy with a catastrophic default on
our debt. That would set back infrastructure projects
immeasurably. So, we need to ensure that we find a way to come
up with a debt ceiling deal so that infrastructure investments
and the money that comes with it are not cut or eliminated over
time. And I hope we can focus some of our work on defining what
would happen if there is a default and what would happen to
transportation investments.
I look forward to working with you. We are going to hear
today about how inflation is undercutting the purchasing power
of Federal transportation dollars. We will hear today as well
about how the BIL has invested in U.S. competitiveness in our
transportation infrastructure.
And finally, with the time I have left, I want to emphasize
human infrastructure, the need to develop today's necessary
workforce and to build a pipeline for new workers in the next
generation of infrastructure investment.
I want to thank our witnesses today.
With that, I yield back.
[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 Graves, for holding this hearing. I look
forward to partnering with you in support of our nation's
transportation and infrastructure--a bipartisan tradition of this
Committee.
As Committee Democrats organized this week, we set priorities for
this Congress:
1. Promote investments in a cleaner, greener, safer, and more
accessible transportation network;
2. Ensure these investments create jobs and opportunities for all
people;
3. Build capacity in our communities as they put federal dollars
to work;
4. Restore and protect our environment; and
5. Safeguard our nation's economic sustainability and
competitiveness.
I know Members on the other side of the aisle share many of these
goals. We stand ready to work together in good faith where we can find
common ground.
We have come a long way in two years. At the start of the 117th
Congress, America faced unprecedented economic challenges as the COVID-
19 pandemic placed incredible stress on American workers and families
as well as massive pressure on supply chains.
These pressures exposed the fragilities of an aging, congested, and
overburdened transportation and infrastructure network that was
dangerously overdue for an overhaul--cries for which echoed in the
halls of Congress for nearly a decade of Infrastructure Week after
Infrastructure Week.
Last Congress, we finally responded decisively to bolster our
economy and limit the fallout from the immediate crisis facing our
nation, while modernizing and transforming the way people and goods
move, with the passage of several landmark bills: the American Rescue
Plan, and the Inflation Reduction Act, the CHIPS and Science Act, and
the Bipartisan Infrastructure Law (BIL).
Of these, this Committee had the largest role in delivering the BIL
and will continue to focus on implementation of the $660 billion under
U.S. Department of Transportation (DOT) that we oversee.
This dollar amount, and the number of grant opportunities, is
significantly larger than any previous transportation or infrastructure
authorization administered by DOT. And the pace at which these dollars
are reaching communities is truly impressive.
DOT has already made available over $150 billion in highway,
transit, and airport formula funds for Fiscal Years 2022 and 2023.
These are not federally controlled programs. This funding passes
through U.S. DOT directly to states and local governments to build
projects--projects designed and built by private sector construction
and engineering firms and workers they hire in our districts. That is
why you will hear me say frequently: transportation means jobs.
States have launched 29,000 new projects with federal highway
formula funding in FY 2022, according to analysis by ARTBA (American
Road & Transportation Builders Association). There is at least one new
project underway in every Congressional district in the country.
The BIL also provides funding for competitive grant programs. To
date, the Administration has announced funding for 6,900 projects under
competitive grants to over 4,000 communities nationwide for roads,
bridges, rail, buses, ferries, ports, safety, and other infrastructure
needs.
BIL grants provide strong support for projects in red and blue
states, and in urban and rural areas. Under the RAISE grant program,
funds are awarded evenly between rural and urban areas. In the latest
round of INFRA grants totaling $1.5 billion, 15 of 26 projects selected
were in rural areas. The Rural Surface Transportation Grant Program
awarded $274 million to 12 projects in its first funding round.
BIL grants support major projects that are larger than any one
state or community could advance, such as the recently announced grants
for the Hudson tunnels in New York and the Brent Spence bridge
connecting Ohio and Kentucky.
BIL also includes grants exclusively for Tribes and local
communities, such as Tribal Transportation Program Safety Funds and
Safe Streets and Roads for All, to ensure that these communities reap
the benefits of transportation investments.
This is just the start. BIL will deliver benefits for communities
across the country and create good jobs for years to come, with
guaranteed funding through 2026. That's four years for the states,
local communities, and Tribes we represent to benefit from forward-
looking investments in local priorities, put people to work in each of
our districts, and maintain and modernize our infrastructure.
That won't happen if we play chicken with our competitiveness and
threaten the economy with a catastrophic default on our debt. That
would set back infrastructure projects immeasurably.
It won't happen if we play politics with this money. I caution my
colleagues to think hard before seeking to repeal or rewrite the rules
for BIL programs. Eliminating programs has an obvious effect. However,
even smaller changes to program considerations or eligibilities will
block the quick pass-through of these funds to our communities if DOT
has to go back to the drawing board.
Our transportation system's shortcomings and our planet's
challenges can't be ignored or wished away. Taking measured action--in
line with statutory authority--to evolve how we move people and goods
is responsible and appropriate, and that is what this Administration is
doing with BIL funding.
Without the investments made by the major laws enacted last
Congress, our economy would be in far worse shape today. This committee
held a hearing on industry and labor perspectives on the supply chain
crisis in November 2021--where witnesses, many of whom are here again
today, hailed the passage of the BIL and its positive impacts to
improve our freight network supply chain.
We will hear today how inflation is undercutting the purchasing
power of federal transportation dollars. To the critics who want to
brush off the impacts of the BIL, know this--funding provided by this
law was the largest increase in investment in over 50 years to roads,
bridges, transit, and safety projects. It provides the largest
investment in passenger rail service since the Amtrak was established.
As pointed out in ARTBA's recent testimony before the Senate, even
with inflation taken into account, there has been market growth over
the last year in the construction sector; whereas without the BIL, ``we
would likely be looking at a market contraction.'' Congress did its job
to give the transportation construction sector the long-term resources
to ride out tough economic times.
Physical assets and facilities are a huge part of rebuilding
America's infrastructure, but they are only one part of the equation.
Investing in human infrastructure is equally important to the long-term
success and sustainability of our transportation systems and the supply
chain network.
That's why you'll see a clear focus among committee Democrats as we
oversee implementation of BIL and other laws, and work on new
legislative initiatives to protect good wages and benefits, ensure safe
working conditions, create opportunities for underrepresented groups,
and support strong training and workforce development.
Thank you to each of our witnesses for joining us today. I look
forward to your testimony.
Mr. Graves of Missouri. Thank you.
Now I would like to welcome all of our witnesses here
today, and thank you for coming in and for your testimony.
Just to explain the light system real quick. Green means
go, yellow means you are running out of time, and red means you
are out of time.
I would ask unanimous consent that the witnesses' full
statements be included in the record.
And, without objection, that is so ordered.
As your written testimony has been made part of the record,
the committee asks that you try to limit your remarks to 5
minutes.
And, with that, we have Mr. Chris Spear, who is the
president and chief executive officer of the American Trucking
Associations. Thanks for being here.
TESTIMONY OF CHRIS SPEAR, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AMERICAN TRUCKING ASSOCIATIONS; IAN JEFFERIES,
PRESIDENT AND CHIEF EXECUTIVE OFFICER, ASSOCIATION OF AMERICAN
RAILROADS; JEFF FIRTH, VICE PRESIDENT, HAMILTON CONSTRUCTION
COMPANY, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF
AMERICA; ROGER GUENTHER, EXECUTIVE DIRECTOR, PORT HOUSTON; AND
GREG REGAN, PRESIDENT, TRANSPORTATION TRADES DEPARTMENT, AFL-
CIO
TESTIMONY OF CHRIS SPEAR, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, AMERICAN TRUCKING ASSOCIATIONS
Mr. Spear. Chairman Graves, Ranking Member Larsen, and
members of this committee, thank you for the opportunity to
testify this morning.
For 90 years, the ATA has helped Congress shape its
understanding of our Nation's infrastructure needs and supply
chain challenges, and today's oversight is both welcome and
timely. The IIJA provided a 38-percent increase in road and
bridge funding, a historic investment not witnessed since the
Eisenhower era. Prior to passage, ATA testified 25 times before
the House and Senate, sharing how the decaying state of our
Nation's infrastructure is hamstringing America's ability to
compete with rising global powers, like China. In short, a
first world economy cannot survive a developing world
infrastructure.
While the ATA strongly supported the IIJA, it was not a
perfect piece of legislation. No bill is. This hearing provides
oversight of $1.2 trillion of taxpayer-earned income. An
industry that makes up just 4 percent of the vehicles on our
Nation's highways, yet pays nearly half the tab into the
Federal Highway Trust Fund, we ask that every dollar be spent
wisely and in accordance with what Congress instructed.
To that end, ATA objects to the Federal Highway
Administration's memorandum directing the IIJA moneys be spent
on existing roads and bridges and not new construction. Not
only does this directly conflict with congressional intent, it
does nothing to address congestion, improve safety, and reduce
emissions. Our industry loses nearly $75 billion a year sitting
in congestion annually. That is 425,000 drivers sitting idle
every year. That is 6.87 billion gallons of fuel, more than $34
billion of wasted energy. That is 67.3 million metric tons of
CO2 being pumped into our environment.
Let me be clear, funding existing infrastructure alone does
nothing to fix congestion, it just makes it worse. Congress has
proven that it can do the right thing: passage of the Ocean
Shipping Reform Act, passage of the CHIPS Act. We need more of
this. We need new, secure truck parking capacities proposed by
the bipartisan Truck Parking Safety Improvement Act. We need a
greater emphasis on our workforce.
The IIJA, including elements of the bipartisan DRIVE Safe
Act, will do what none of the 49 States have done, requiring
training and technology for young talent to operate our
equipment. What the IIJA didn't do is require inward-facing
cameras, opposed by drivers young and old, union and nonunion.
Requiring a company camera be in a driver's workspace every
minute of every hour, including the sleeper berth, is
intrusive, disrespectful, and opens a prying door into the
other transportation modes. Your oversight is warranted.
Lastly, we need a realistic discussion about our Nation's
energy and environmental policies. For four decades, ATA has
worked with the EPA producing phases 1 and 2 emissions
reduction rules. To date, 98.5 percent of all emissions have
been removed from our tailpipes. In fact, 60 trucks today emit
what 1 truck emitted in 1988. This is not a matter of if we get
to zero, but when. And we will get there, just not on the
timelines being proposed in California. Their rush to zero
makes their timeline and targets unachievable, and they will
fail. The rare minerals needed for millions of 5,000-pound
truck batteries, the infrastructure needed to charge them, and
the additional electricity needed to power our trucks full
scale doesn't yet exist, and won't anytime soon.
Again, we are committed to a cleaner environment. We have
proven that. We simply ask we be realistic about the path
forward. Do that and we will have the best infrastructure and
the strongest, most sustainable economy like no other.
I thank the committee and yield.
[Mr. Spear's prepared statement follows:]
Prepared Statement of Chris Spear, President and Chief Executive
Officer, American Trucking Associations
Introduction
Chairman Graves, Ranking Member Larsen, and Members of the
Committee, I appreciate the opportunity to testify before you today on
behalf of the American Trucking Associations (ATA).\1\
---------------------------------------------------------------------------
\1\ The American Trucking Associations is the largest national
trade association for the trucking industry. Through a federation of 50
affiliated state trucking associations and industry-related conferences
and councils, ATA is the voice of the industry America depends on most
to move our nation's freight.
---------------------------------------------------------------------------
ATA is a 90-year-old federation and the largest national trade
organization representing the 7.65 million men and women working in the
trucking industry. ATA is a fifty-state federation that encompasses
34,000 motor carriers as well as their corresponding suppliers. ATA
represents every sector of the industry, from Less-than-Truckload to
Truckload, agriculture and livestock transporters to auto haulers and
movers, and large motor carriers to mom-and-pop one-truck operations.
ATA member companies have overcome tremendous challenges over the past
couple years and will continue to adjust as international and domestic
supply chains recalibrate in the wake of the COVID-19 pandemic.
The pandemic and resulting supply chain crisis shined a glaring
spotlight on the costs of inaction. Over the last few decades, federal
leadership and investment in infrastructure have decreased
significantly, and our nation's transportation networks have gradually
fallen into a state of disrepair. Years of neglect have materialized as
deteriorating roads and bridges, unreliable intermodal connectors, a
shortage of truck parking capacity, severe congestion, insufficient
space at and around ports, and paralyzing freight bottlenecks. These
inefficiencies predate the pandemic but were exacerbated by the global
supply chain disruptions, and industry is still navigating the long-
term consequences. The inescapable conclusion is that decades of
underinvestment in our nation's transportation networks have weakened
our supply chains and global economic competitiveness.
If the United States is to remain the leading economy, it must have
the best infrastructure and a resilient transportation network that can
withstand supply chain pressures. ATA applauded enactment of the
Infrastructure Investment and Jobs Act (IIJA) last Congress because the
legislation provides significant resources to remedy years of neglect,
improve the efficiency of our transportation networks, and enhance U.S.
competitiveness in the global economy. Looking forward, we hope that
Congress will resolve its differences over existential threats to our
economy--such as addressing the debt limit--so that we can continue
implementing the necessary improvements to keep freight flowing through
our supply chains.
To be clear, the degree to which investments in transportation
infrastructure improve supply chain efficiency depends largely on how
infrastructure investment strategies are defined and implemented. The
IIJA has the potential to move the needle, but funding must be
prioritized and allocated for projects that improve supply chain
inefficiencies. As evidenced by the response to the COVID-19 pandemic,
and as highlighted by the current challenges facing our supply chains,
trucking is the dynamic linchpin of the U.S. economy, but trucking can
only be as efficient as the roads and bridges upon which we operate.
Relatedly, the truck driver shortage and regulations impacting the
movement of freight also limit supply chain efficiency. In 2021, the
driver shortage reached a record high of roughly 81,000, and that
number is only expected to grow over the next decade. Despite this
significant and persistent labor constraint, some in Congress continue
to contemplate the Protecting the Right to Organize (PRO) Act and other
legislation that would decimate the independent contractor business
model and ban most independent owner-operators from working in the
trucking industry. If enacted, these legislative proposals would
destroy the livelihoods of over 350,000 small business entrepreneurs
and needlessly gut the nation's already fragile supply chain.
More than 80% of U.S. communities rely exclusively on trucking to
meet their freight transportation needs, and trucking currently moves
more than 70% of the nation's annual freight tonnage.\2\ Over the next
decade, trucks will be tasked with moving 2.4 billion more tons of
freight than they do today, and trucks will continue to deliver the
vast majority of goods to American communities.\3\ Smart, forward-
leaning investments in our nation's transportation infrastructure
coupled with concerted efforts to bolster the trucking workforce will
help the industry meet these increasing demands.
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\2\ U.S. Census Bureau Commodity Flow Survey. U.S. Census Bureau,
2017.
\3\ Freight Transportation Forecast 2020 to 2031. American Trucking
Associations, 2020.
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As the Committee examines the nation's transportation
infrastructure needs and ongoing supply chain challenges, I ask that
you please consider four key areas: 1) responsible implementation of
the IIJA, 2) workforce development for supply chain resiliency, 3)
implementation of ocean shipping reforms to ensure the efficient
movement of goods, and 4) ambitious yet achievable energy and
environmental policies. I will address each of these areas in detail in
my testimony, as they are critical to ensuring the economic vitality
and competitiveness of the American trucking industry.
Thank you for holding today's hearing to consider these critical
issues. I look forward to working with you to share information and
inform potential legislative solutions to protect the safe and
efficient movement of our nation's goods.
In Pursuit of the Best Infrastructure
Well-maintained, reliable, and efficient infrastructure is crucial
to the delivery of the nation's freight--both international and
domestic--and vital to our country's economic and social well-being.
That is why ATA applauded enactment of the historic Infrastructure
Investment and Jobs Act (IIJA) in 2021. The IIJA represents the largest
investment in our nation's infrastructure and competitiveness in nearly
a century, and we remain optimistic that the bill will create the
conditions necessary for long-term prosperity and growth.
Barriers To Supply Chain Efficiency
Enactment of the IIJA is all the more important when one digs
deeper into the entrenched problems that plague our nation's highway
infrastructure. Highway congestion, for example, adds nearly $75
billion to the cost of freight transportation each year.\4\ In 2016,
truck drivers sat in traffic for nearly 1.2 billion hours, equivalent
to more than 425,000 drivers sitting idle for a year.\5\ This caused
the trucking industry to consume an additional 6.87 billion gallons of
fuel in 2016, representing approximately 13% of the industry's total
fuel consumption, and resulting in 67.3 million metric tons of excess
carbon dioxide (CO2) emissions.\6\
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\4\ Cost of Congestion to the Trucking Industry: 2018 Update.
American Transportation Research Institute, Oct. 2018.
\5\ Ibid.
\6\ Fixing the 12% Case Study: Atlanta, GA. American Transportation
Research Institute, Feb. 2019.
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Congestion serves as a brake on economic growth and job creation
nationwide. A first-world economy cannot survive a developing-world
infrastructure system. As such, the federal government has an
obligation to ensure that necessary resources are available to address
this self-imposed and completely solvable situation. Specifically, ATA
recommends that the U.S. Department of Transportation (USDOT)
prioritize the discretionary program resources made available by the
IIJA to address major freight bottlenecks. A recent report from the
American Transportation Research Institute identified the top 100
freight bottlenecks nationwide.\7\ Furthermore, given the importance of
the National Highway System--and especially the Interstate System--to
the supply chain, a greater share of federal investment should be
directed toward the maintenance and improvement of these highways.
---------------------------------------------------------------------------
\7\ Top 100 Bottlenecks--2022. American Transportation Research
Institute, 2022.
---------------------------------------------------------------------------
Another barrier to supply chain efficiency is the poor state of
freight intermodal connectors--those roads that connect ports, rail
yards, airports and other intermodal facilities to the National Highway
System--are critical to trade. While they are an essential part of the
freight distribution system, many are neglected and denied the
attention they deserve in spite of their importance to the nation's
economy. Just 9% of connectors are in good or very good condition, 19%
are in mediocre condition, and 37% are in poor condition.\8\ Not only
do poor roads damage both vehicles and the freight they carry, but the
Federal Highway Administration (FHWA) found a correlation between poor
roads and vehicle speed. Average speed on a connector in poor condition
was 22% lower than on connectors in fair or better condition.\9\ FHWA
further found that congestion on freight intermodal connectors causes
1,059,238 hours of truck delay annually and 12,181,234 hours of
automobile delay.\10\ Congestion on freight intermodal connectors adds
nearly $71 million to freight transportation costs each year.\11\
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\8\ Freight Intermodal Connectors Study. Federal Highway
Administration, April 2017.
\9\ Ibid.
\10\ Ibid.
\11\ An Analysis of the Operational Costs of Trucking: 2018 Update.
American Transportation Research Institute, Oct. 2018. Estimates
average truck operational cost of $66.65 per hour.
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One possible reason connectors are neglected is that the vast
majority of these roads (70%) are under the jurisdiction of a local or
county government.\12\ Yet, these roads are serving critical regional,
national, and international needs well beyond the geographic boundaries
of the jurisdictions that have responsibility for them, and these
broader benefits may not be factored into the local jurisdictions'
spending decisions. While intermodal connectors are eligible for
federal funding, it is clear that this is simply not good enough. ATA
supports a set-aside of funding for freight intermodal connectors to
ensure that these critical arteries are given the attention and
resources they deserve.
---------------------------------------------------------------------------
\12\ Ibid.
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Prioritization of Projects That Improve Freight Mobility
Although the IIJA did not set aside funding for either highway
bottleneck elimination or intermodal connectors, these projects are
eligible for funding under several of the discretionary programs,
including the Nationally Significant Freight and Highway Projects
Program, the Bridge Investment Program, the National Infrastructure
Project Assistance Program, and the Local and Regional Project
Assistance Program. Congress should provide the necessary oversight to
ensure that the resources available from these important programs are
used primarily for projects that improve transportation safety and
mobility, as well as projects that address infrastructure deficiencies
that contribute to supply chain inefficiencies. These programs should
not be used to advance parochial agendas that are outside of their
Congressionally-mandated scope. Under the IIJA, States will receive
more than $50 billion per year in federal-aid highway funding, and much
of that can be used to repair and modernize existing infrastructure to
improve the performance of freight corridors.
Additionally, ATA recommends against federal policies that are
likely to prevent or hamstring State and local agencies' efforts to
expand highway capacity. This includes conditioning the expenditure of
federal funds for new capacity on a showing that alternatives, such as
operational strategies or investment in alternative transportation
modes, are definitively ruled out. The National Environmental Policy
Act (NEPA) process already requires consideration of alternatives, and
layering additional requirements onto the existing process is
redundant, costly, and cumbersome. We are also concerned about policies
that seek to eliminate or downgrade highways in the name of equity or
environmental justice without fully accounting for the impacts of these
approaches on supply chain efficiency.
Furthermore, ATA is concerned about a December 16, 2021 Federal
Highway Administration (FHWA) memorandum to its staff that outlined
Administration policies with regard to the federal-aid highway program.
The memo, in part, directed staff to ``encourage'' states and other
federal-aid recipients to prioritize roadway maintenance and non-
highway modal projects over the construction of new highway capacity.
This directly contravenes policies that Congress rejected during IIJA
debate. While USDOT claims that the memo will not have a substantial
impact on project selection, the Government Accountability Office (GAO)
disagrees. In a December 15, 2022 report, GAO stated that the memo ``.
. . sets out FHWA's preferred projects for funding under the
Infrastructure Investment and Jobs Act. When an agency rule has the
effect of inducing changes to the internal policy or operations choices
of the regulated community, that rule has a substantial impact on the
rights and obligations of non-agency parties.'' \13\ Therefore, GAO
concluded that the memo is subject to the Congressional Review Act. ATA
strongly supports current efforts by Members of Congress to pass a
resolution of disapproval that negates the effects of the FHWA memo.
---------------------------------------------------------------------------
\13\ Federal Highway Administration--Policy on Using Bipartisan
Infrastructure Law Resources to Build a Better America. U.S. Government
Accountability Office, December 15, 2022.
---------------------------------------------------------------------------
Truck Parking
Another barrier to supply chain efficiency is the shortage of truck
parking, which has been well documented for decades. In 2015, the
Federal Highway Administration's Jason's Law report acknowledged the
shortage of truck parking capacity as a serious highway safety concern.
The FHWA found that more than 75% of truck drivers and almost 66% of
logistics personnel ``regularly [experienced] problems with finding
safe parking locations when rest was needed.'' \14\ Due to inaction at
the federal, state, and local level, the truck parking shortage has
only worsened since 2016. In 2019, the FHWA found that the percentage
of drivers who regularly experienced difficulty finding truck parking
had skyrocketed from 75% to 98%.\15\
---------------------------------------------------------------------------
\14\ Jason's Law Truck Parking Survey Results and Comparative
Analysis. Federal Highway Administration, U.S. Department of
Transportation, August 2015.
\15\ Jason's Law Commercial Motor Vehicle Parking Survey and
Comparative Assessment Presentation. Federal Highway Administration,
U.S. Department of Transportation, December 2020.
---------------------------------------------------------------------------
The lack of available truck parking has a severe impact on the
health and wellbeing of truck drivers, but it also contributes to
driver utilization inefficiencies. Time spent looking for available
truck parking costs the average driver about $5,500 in direct lost
compensation--or a 12% cut in annual pay, according to a 2016
report.\16\ Truck drivers give up an average of 56 minutes of available
drive time per day parking early to avoid the risk of being unable to
find authorized parking down the road. Additionally, hours-of-service
(HOS) violations stemming from an inability to find safe, legal truck
parking can be costly as well. HOS fines range from $150 to $16,000,
and an accumulation of violations can lead to a decrease in a driver's
safety history, leading to higher insurance rates and even license
suspension. All of these factors contribute to the driver shortage and
supply chain inefficiency.
---------------------------------------------------------------------------
\16\ Managing Critical Truck Parking Case Study: Real World
Insights from Truck Parking Diaries. American Transportation Research
Institute, December 2016.
---------------------------------------------------------------------------
Federal investment in the expansion of trucking parking capacity is
key to addressing this longstanding problem. ATA supports the Truck
Parking Safety Improvement Act, which would establish a competitive
discretionary grant program and dedicate $755 million over five years
for truck parking projects across the country. Unfortunately, the IIJA
did not include dedicated funding for truck parking. We encourage
Congress to seek other opportunities to address this critical problem.
Consistent, Sustainable Funding
Underpinning all these recommendations is the need for a long-term,
stable revenue source. Without one, states will find it difficult to
commit to funding crucial and expensive projects. The fuel tax has, for
at least a century, provided that stable income. However, because
Congress has failed to increase the rate of the federal tax since 1993,
inflation has significantly reduced the value of the revenue generated
by the tax. While the fuel tax will likely have to be replaced or
supplemented at some point, it will be a viable revenue source for at
least the next decade, and the rate of tax should be raised and indexed
to inflation. In the meantime, the Administration should work with
Congress, the States, and the private sector to find a viable
replacement for the fuel tax that can provide stable highway funding
for the foreseeable future. The IIJA included funding for State,
national, and local pilot programs to explore new revenue sources. ATA
looks forward to working with the U.S. Department of Transportation and
grant recipients to implement a robust and comprehensive research and
testing program.
Emergency Weight Limits Permit System Reform
Natural disasters--hurricanes, tornados, floods, wildfires or
pandemics, to name a few--can cause serious disruption to communities
for days, weeks, or even months. In the aftermath of disasters, the
trucking industry gets to work providing life-saving supplies and
helping affected communities to recover. Relief and recovery supplies
can include water for drinking or fighting fires, food, generators,
equipment for rebuilding a decimated power grid, trailers to provide
shelter for those who are suddenly made homeless, or building supplies
to repair or replace damaged homes, buildings, roads or bridges. In
addition, trucks must often remove thousands of tons of debris in order
to allow the recovery process to begin.
Most often in these scenarios, time is of the essence. Lives are at
risk when potable water is in short supply, hospital or nursing home
patients too sick to evacuate do not have the electricity needed to
power life-saving medical equipment, or water needed to fight wildfires
is in short supply. In these cases, maximizing the trucking industry's
ability to move as much cargo as possible, as quickly as possible, is
critical. A key to expediting these loads is to maximize a truck's
cargo space by allowing the trucking company to exceed state and
federal weight limits on a temporary basis.
Federal law limits a truck's gross (total) and axle weights when
they are operating on the Interstate Highway System. States determine
weight limits on non-Interstate roads. In 2012, federal law authorized
states to issue special overweight permits for vehicles and loads that
are delivering relief supplies during a Presidentially-declared
emergency or major disaster. Both the routes that permitted trucks may
operate on and the weight limits are to be determined by each state. A
Presidential declaration expires after 120 days. Trucks operating under
special permit may only deliver to a destination in the locations
covered by the declaration, or haul debris from those locations. An
overweight vehicle must have a permit from each state in which it
operates if that vehicle exceeds the state's legal weight limits.
In practice the current system has significant flaws. Emergencies
that qualify under the Stafford Act are limited to traditional natural
disasters such as floods and hurricanes. Certain emergencies, such as
the supply chain crisis caused by the COVID-19 pandemic and the energy
shortage caused by the cybersecurity attack on the Colonial Pipeline,
do not qualify. In addition, relying on a Presidential declaration to
enable the issuance of permits is problematic. First, some situations
do not rise to the level of a national emergency. Some are more limited
in scope, but still require a significant response from the trucking
industry. Waiting for a Presidential declaration can also slow the
process or make it less effective. Finally, Stafford Act declarations
expire after 120 days. In some cases--the COVID-19 pandemic being a
good example--emergency response may need to be extended.
To address these challenges, ATA recommends the following changes
to federal law governing the issuance of emergency overweight permits:
A more expansive definition of qualifying emergencies
must be implemented to ensure that all potential situations receive an
adequate response;
Both the Secretary of Transportation (or Federal Highway
Administrator) and Governors should be given the authority to issue an
emergency declaration that enables the issuance of emergency overweight
permits. If Governors issue the declaration FHWA should have the
authority to override the order if it finds that the declaration is not
consistent with Federal law; and
The Secretary or FHWA Administrator should be given the
authority to extend the declaration beyond 120 days.
In Pursuit of a Qualified Workforce
The trucking industry, which serves as the backbone of our nation's
economy and supply chain, continues to face significant driver
shortages. In 2022, the shortage of qualified drivers reached a near-
record high of 78,000.\17\ The already substantial shortage is expected
to increase to 160,000 drivers by 2031 absent any changes to the status
quo. Furthermore, over the next decade, the industry will need to hire
roughly 1.2 million new drivers to keep pace with growing demand and an
aging workforce.\18\
---------------------------------------------------------------------------
\17\ ATA Driver Shortage Update 2022. American Trucking
Associations, October 25, 2022. Available online at: https://
ata.msgfocus.com/files/amf_highroad_solution/project_2358/
ATA_Driver_Shortage_Report_2022_Executive_Summary.October22.pdf
(accessed January 19, 2023).
\18\ Ibid.
---------------------------------------------------------------------------
The driver shortage is the result of many concurrent factors. Like
many industries, we are witnessing how the downstream impacts of the
COVID-19 pandemic continue to exacerbate the trucking industry's
already-dire labor constraints. The work to rebuild from the pandemic's
effects will certainly take some time. In the meantime, companies
working throughout the supply chain are facing higher transportation
costs, leading to increased prices for consumers on everything from
electronics to food. The driver shortage is a looming threat that, if
left unaddressed, could destabilize the continuity of trucking
operations with ripple effects across the supply chain that will be
felt by every American.
Addressing the Driver Shortage
Given these realities, ATA is vitally interested in safely
expanding the number of professional drivers to meet the demand for
freight transportation in our economy. The shortage will only continue
to grow unless Congress and regulators modernize requirements that
govern who can drive in interstate commerce and make targeted
investments in programs to attract a new, diverse generation of drivers
and supply chain workers to the transportation industry.
We need Congress and the Administration to help us grow our
workforce. The trucking industry offers fulfilling careers with family-
sustaining salaries--all without the debt that often accompanies a
college degree--but obsolete regulatory barriers prevent the trucking
industry from offering these pathways to recent high school graduates
who may otherwise want to pursue a career in trucking. Truck drivers
make good salaries, with truckload drivers earning a median amount of
$69,687 per year, not including benefits, according to the ATA industry
survey for 2021.\19\ This represents an 18% increase from 2019.\20\
Recent Bureau of Labor Statistics data on weekly earnings in the long-
haul trucking sector show that average earnings are $1,202.04 per week
or over $62,500 when annualized.\21\
---------------------------------------------------------------------------
\19\ 2022 ATA Driver Compensation Study Executive Summary. American
Trucking Associations, June 30, 2022. Available online at: https://
ata.msgfocus.com/files/amf_highroad_solution/project_2358/
ATA_2022_Driver_Compensation_Study_-_Press_Executive_Summary.pdf
(accessed January 19, 2023).
\20\ Ibid.
\21\ Employment, Hours, and Earnings from the Current Employment
Statistics survey (National), Average weekly earnings of production and
nonsupervisory employees, general freight trucking, long-distance tl,
seasonally adjusted, Bureau of Labor Statistics, U.S. Department of
Labor, November 2022. Available online at: https://beta.bls.gov/
dataViewer/view/timeseries/
CES4348412130;jsessionid=AE34706CE9F6C023880E7FE11F660D0C (accessed
January 19, 2023).
---------------------------------------------------------------------------
In addition to rising pay, many fleets offer generous signing
bonuses and other expanded benefits packages to attract and keep
drivers. We want to welcome more individuals into the trucking
industry, but we need Congress' help to open up career pathways that
are currently closed to qualified individuals due to outdated or
artificial barriers. One such outdated regulatory barrier is the
general prohibition of 18-to-20-year-old drivers from driving trucks in
interstate commerce, even though these same individuals are allowed to
obtain their CDLs and drive in 49 States and the District of Columbia.
Safe Driver Apprenticeship Pilot Program
As you know, ATA strongly supported the inclusion of the Safe
Driver Apprenticeship Pilot Program (SDAP) into the IIJA, and we are
grateful that it was included as Sec. 23022 of the Act. This program,
which was the result of a carefully crafted bipartisan compromise, will
allow 18-to-20-year-old drivers to be trained as professional truck
drivers and drive in interstate commerce, much like they are able to do
in intrastate commerce in 49 States plus the District of Columbia.
Through this program, the U.S. Department of Transportation will be
able to collect data that proves what the States and the District of
Columbia already know--that these individuals can be trained to safely
operate in interstate commerce, just like they are able to do in
intrastate commerce. ATA and its members are actively working to ensure
that the entire 3,000 available apprentice slots in the program are
filled.
We are enthusiastic about the SDAP and want it to be successful.
That said, the rollout of the program has been frustratingly slow, and
USDOT added additional requirements not found in law. These include a
requirement that participating motor carriers be part of a U.S.
Department of Labor-approved Registered Apprenticeship Program (RAP) to
be eligible, and a requirement that participating motor carriers
utilize another safety technology beyond the six safety technologies
already required. I will also note that the latter requirement was
added almost eight months after enactment of the IIJA.\22\ The last-
minute equipment addition prompted several motor carriers to decline
participation in the program. Others who do not have a RAP may have
also chosen not to participate.
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\22\ The Infrastructure Investment and Jobs Act, Public Law 117-58,
was signed into law on November 15, 2021. The additional equipment
requirement of an in-cab, inward-facing camera was first announced in a
July 2022 Federal Register notice. Agency Information Collection
Activities; Renewal of an Approved Information Collection: Safe Driver
Apprenticeship Pilot Program, Federal Motor Carrier Safety
Administration, U.S. Department of Transportation, 87 FR 41164 (July
11, 2022).
---------------------------------------------------------------------------
ATA, in conjunction with the U.S. Department of Labor (USDOL), has
done the work necessary to become a RAP sponsor and, as such, can help
our member motor carriers gain eligibility to participate in SDAP. That
said, our strong preference is for USDOT to implement the program as
Congress prescribed. The SDAP is critical to ATA's workforce
development efforts because the data it generates will bolster our
calls to eliminate the regulatory barrier preventing safe and qualified
drivers from participating in interstate commerce. Given the importance
of this program as a potential supply chain solution, we urge the
Committee to conduct rigorous oversight of its implementation.
Protect Independent Contractors
In addition to creating pathways for the next generation of
drivers, ATA is also committed to protecting the individuals who choose
to become independent contractors (ICs) in the trucking industry.
Unfortunately, the independent contractor business model is under
sustained attack from some in Congress and government regulators at
both the federal and State levels. California's AB-5 has wreaked havoc
on our independent truckers in that state, and many motor carriers have
been forced to either engage in the wholesale reorganization of their
business structures or leave California altogether. Independent
contractors are stuck in the middle and their options are limited,
expensive, and filled with unnecessary red tape. Litigation on this
awful law continues, and while we hope for a good outcome, significant
damage has already been done.
At the federal level, a whole host of agencies--including the
National Labor Relations Board, the Federal Trade Commission, the
Consumer Financial Protection Bureau, and the U.S. Department of
Labor--are engaged in activities intended to undermine the independent
contractor business model. The Wage and Hour Division of the U.S.
Department of Labor published a notice of proposed rulemaking (NPRM)
that, if finalized, would create significant safety issues for both our
truckers and the motoring public.\23\ Unlike the rule currently in
effect, the NPRM would create a morass of additional factors to be
considered when determining whether an individual is an employee or an
independent contractor. In particular, the proposed control provision--
control either exercised or unexercised, directly or indirectly, over
things like workplace health and safety--will disincentivize efforts to
improve health and safety, increase environmental protections, and
ensure compliance with other legal obligations in all industries. The
proposed control provision will have an especially harmful effect on
trucking. Indeed, virtually every motor carrier in our industry has
contractual provisions with their ICs requiring adherence to the law,
including health and safety, environmental, and taxation standards.
---------------------------------------------------------------------------
\23\ Employee or Independent Contractor Classification Under the
Fair Labor Standards Act, Wage and Hour Division, U.S. Department of
Labor, 87 FR 62218 (October 13, 2022).
---------------------------------------------------------------------------
If ICs are prohibited from operating as ICs because the motor
carriers with which they contract require ICs to follow the law and
doing so transmutes those ICs into employees, then many hard-working
entrepreneurs will suffer. The NPRM thus contains a perverse incentive
to reduce or eliminate requirements that benefit everyone. As such, the
NPRM poses a direct risk to health and safety, the environment, and tax
responsibilities, among other things, and directly or indirectly
contravenes congressional actions and several other agencies'
requirements at the federal, state, and/or local levels.
The trucking industry has been utilizing independent contractors
since the inception of interstate trucking, and court decisions over
the last 90 years have continually reaffirmed the legitimate role that
ICs play in the economy. Employers in our industry are also doing the
right thing by adhering to applicable workplace safety requirements and
including compliance monitoring--in many instances pursuant to a
mandate from USDOT--in their contractual relationships. Some even go
beyond what is required by law to make workplaces safer by providing
training or equipment as part of their subcontracting arrangements with
smaller motor carriers or independent contractors. Motor carriers often
take this approach for environmental stewardship or to comply with
other legal mandates. This is good corporate citizenship, something to
reward rather than turn into a liability by using it as evidence of
control for classification purposes.
ATA led a national coalition to convey these and other points to
USDOL during the comment period on this NPRM. Our affiliated state
organizations provided numerous examples of real-life situations that
would be negatively affected by the NPRM. We are hopeful that USDOL
will recognize the harm that its NPRM would cause if finalized, but if
they do not, then we may need to take additional actions to protect the
health and safety of our members' employees, independent contractors,
and the public. We hope Congress will echo those concerns with the
USDOL. While this matter is primarily under the jurisdiction of the
Committee on Education and the Workforce, your attention to it is
warranted as well due to the negative impacts on the trucking industry
and the supply chain it supports.
Furthermore, the USDOL proposal would revoke the freedoms of
working Americans to choose occupations and economic frameworks suited
to their needs and ambitions. Americans choose to work as ICs because
of the economic opportunity it provides and the empowerment to select
the conditions (e.g., hours and routes) that align with their
lifestyles. Many of ATA's larger member companies today began as one
independent contractor with a truck. Accordingly, the Americans who
choose to become ICs in trucking should be respected and supported in
their endeavors, not driven out of business because of the
authoritarian view that employee status is better for them.
The IC model in trucking has also been a source of empowerment for
women, minorities, and immigrants seeking to become entrepreneurs. One
of ATA's Road Team Captains \24\ put several kids through college while
working as an independent contractor for one of our motor carrier
members. At the driver level, the trucking industry is more diverse
than the vast majority of industries in terms of ethnic representation.
In many parts of the country, there are substantial concentrations of
ICs performing vital supply chain services--Sikh drivers in northern
California, Somali drivers in Minnesota, etc. They are as much a part
of the trucking industry and supply chain as every employee truck
driver, and their choices should be respected.
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\24\ America's Road Team is a national public outreach program led
by a small group of professional truck drivers who share superior
driving skills, remarkable safety records and a strong desire to spread
the word about safety on the highway.
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A Safe and Qualified Trucking Workforce
Safe and qualified are the operative words with regard to an
expanded workforce. As such, this Committee must ensure that efforts to
exempt training requirements for new drivers are rejected, and that
efforts to better ensure a safe and qualified workforce are supported.
ATA has long supported the Entry Level Driver Training (ELDT) rule,
published in 2016 and implemented in January 2022.\25\ Ensuring that
entry-level drivers receive appropriate instruction from a consistent,
industry-wide curriculum is paramount to improving safety on our
nation's highways. While most of the trucking industry has embraced
ELDT, ATA is discouraged by recent legislative efforts that attempted
to exempt certain individuals from this standardized training
curriculum. Rampant misinformation online prompted a belief that small
businesses and other entities can no longer train their employees ``in-
house,'' and that ELDT now requires individuals to pay thousands of
dollars in tuition for truck driver training schools. While truck
driver training schools are a good option for compliance with ELDT, the
regulations do not prohibit motor carriers of any size from continuing
the in-house training programs they have offered for years. Carriers
can complete the self-certification process to be listed on the FMCSA's
Training Provider Registry and continue training as they always have.
---------------------------------------------------------------------------
\25\ 81 FR 88732.
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Safe and qualified truck drivers are the trucking industry's
greatest asset. Conversely, there is no room on America's roads for
drivers operating under the influence of a controlled substance.
According to the National Highway Traffic Safety Administration
(NHTSA), drug prevalence is on the rise among all drivers, and
unfortunately truck drivers are not immune to this trend. ATA believes,
and the scientific community generally agrees, that hair testing is a
proven safety tool for detecting illegal drug use, but the U.S.
Department of Transportation does not accept hair tests as an
alternative to urinalysis. Furthermore, motor carriers are prohibited
from reporting positive hair tests to the Drug and Alcohol
Clearinghouse. Truck drivers who have tested positive on a hair test
are able to escape accountability and sidestep the rigorous corrective
actions that are otherwise required of individuals who are reported to
the Drug and Alcohol Clearinghouse. There is nothing to prevent drivers
who test positive on a hair test from operating a truck on our nation's
highways today. Federal acceptance of hair testing as an independent,
alternative testing method would allow employers to use this testing
method to identify a greater number of safety-sensitive employees who
violate federal drug testing regulations and keep these unsafe drivers
off the road, and get them help as well.
In Pursuit of Fairness and Transparency at Ports
The extraordinary volumes of freight that challenged our maritime
ports in the past three years exposed competition and infrastructure
issues that have bedeviled America's intermodal motor carriers for
years. Unfair and illegal treatment of truckers and other port users by
foreign-owned ocean carriers and marine terminal operators was
exacerbated by the historic inflow of freight. Agricultural exports
were left on docks to rot, and bottlenecks led to enormous delays in
the delivery of imported goods. Passage of the Ocean Shipping Reform
Act last year, the first major rewrite of laws governing port practices
in decades, will complement the major investments in IIJA for
intermodal port connectors and projects of national economic
significance, and ensure that American port users are treated fairly so
that import and export goods can move more efficiently through our port
facilities. With a level economic playing field in place, port
facilities can then play an important and visible role in making our
supply chains more sustainable.
Implementing Ocean Shipping Reforms
The passage of the Ocean Shipping Reform Act (OSRA) last summer
with strong bipartisan support was a major step in the right direction.
ATA thanks Rep. Garamendi, Rep. Johnson, and the other members of this
Committee for their strong leadership in drafting this legislation and
generating the widespread Congressional support that enabled such a
substantive piece of legislation to pass on the suspension calendar.
OSRA will bring greater fairness and transparency to the
relationships between ocean carriers, marine terminal operators, motor
carriers, and shippers. The legislation also equips the Federal
Maritime Commission with additional tools to ensure that ocean carriers
are meeting their obligations under the law. ATA would like to
recognize the Commission for the work they have done to meet the
implementation deadlines outlined in the legislation and for the
thoughtful approach they have taken in their regulatory proposals. The
Commission's actions thus far have focused on increasing transparency
between trading partners; for example, the Commission proposed that
ocean carriers send detention and demurrage bills only to the person
that has contracted for ocean carriage rather than to motor carriers.
This will create significant incentives for all parties to provide
accurate invoices and resolve any disputes that arise quickly and
fairly. This is the kind of transparency that has long been lacking
within the intermodal supply chain, and a final rule with these
provisions would represent a strong step toward greater cooperation and
efficiency among intermodal partners. We look forward to working with
this Committee, Congress, and the Commission as the OSRA implementation
process continues.
Addressing Chassis Supply Challenges
The last few months have seen significant reductions in freight
volume coming into the nation's ports, which has alleviated many of the
backups and bottlenecks that we saw last year. However, that does not
mean that the root causes of these issues have disappeared. The
insufficient supply of intermodal chassis needed to move containers was
one of the largest contributing factors to the bottlenecks, yet the
chassis provisioning process continues to be a source of considerable
frustration for motor carriers both at the ports and at inland
railheads. While OSRA does contain requirements to study this issue, we
believe there are additional changes in this area that would
significantly increase efficiency and reduce costs.
Motor carriers are often denied the ability to choose their chassis
provider or use their own chassis due to ocean carrier interference in
the marketplace. Provisions such as ``box rules'' permit ocean carriers
to dictate which chassis provider must be used to move their
containers. These requirements result in artificial limitations on
chassis availability, which significantly impacts efficiency and adds
unnecessary costs for motor carriers, as well as importers and
exporters. ATA is currently litigating this issue before the FMC, in an
attempt to resolve this problem without Congressional intervention.
However, we encourage the Committee to consider legislation that would
allow motor carriers to choose their chassis provider; increasing
transparency and efficiency in chassis provisioning is critical to
addressing some of the underlying supply problems that enflamed port
operations over the last few years.
Implementing Port Sustainability Initiatives
Many states with significant maritime port activity are pursuing
ambitious climate goals at those facilities. ATA and our members are
committed to sound environmental policies but would emphasize that
meeting the timeframes envisioned in many of these efforts will require
significant advancements in both technology and infrastructure. Even if
equipment with advanced environmentally friendly technologies become
commercially available at the scale these climate goals require, the
economics of acquiring and deploying that equipment need to be
considered, and reasonable timetables set, in order to avoid
destabilizing supply chains and the overall economy.
While the IIJA and Inflation Reduction Act contain considerable
federal funding to assist ports in this process, the changes that will
be required seem certain to bring with them the potential for
substantial disruption. ATA urges this Committee to use its oversight
authority to balance the focus on improving port efficiency and meeting
environmental targets with the economic realities facing trucking and
other supply chain providers who will be tasked with meeting those
ambitious goals.
In December of 2022, 99.87% of visits to the Port of New York/New
Jersey were by diesel-powered trucks,\26\ while at the Port of Los
Angeles, 93% of container moves and 95% of trucks are powered by diesel
fuel with virtually all of the remaining portion powered by natural
gas. At the beginning of this year, California prohibited the use of
truck engines manufactured prior to 2010 which accounted for 15% of all
containers moves at the Port of Los Angeles in November.\27\ (The
figure for New York/New Jersey is even higher at 30.48%.\28\) Thus far,
the reduction in freight levels has meant that this requirement has not
impacted the overall supply chain. However, the California Air
Resources Board is considering a regulation phasing out older trucks
each year and ultimately allowing only zero emission trucks at the
ports by 2035.\29\ This would mean all drayage trucking companies would
need to replace their fleets entirely. While ATA has expressed our
significant concerns regarding this potential regulation and similar
efforts in other locations, there is little question that as new
technologies become available, trucking companies will need to make
substantial upgrades in their equipment at considerable cost in the
years to come. As we look more closely at the fleets serving the
nation's ports, we see that at ports as in most of the trucking
industry, smaller companies comprise a significant portion of the
overall trucking fleet. Truck statistics from the Port of Los Angeles
show that 67% of fleets registered to work at the port have less than
20 trucks and these companies account for more than 27% of container
moves.\30\ Ensuring that trucking companies, especially smaller
businesses, can make any required technological transition is critical
to the ability of the trucking industry to meet the needs of our
customers at the ports.
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\26\ PortTruckPass Comprehensive Report. Port Authority of New York
and New Jersey, December 2022.
\27\ Clean Truck Program (CTP)--Gate Move Analysis. Port of Los
Angeles, December 2022. Available online at: https://
kentico.portoflosangeles.org/getmedia/452bad8c-4e16-490f-bab6-
155b061866bb/POLA-Monthly-Gate-Move-Analysis (accessed January 19,
2023).
\28\ PortTruckPass Comprehensive Report. Port Authority of New York
and New Jersey, December 2022.
\29\ California Air Resources Board Proposed Advanced Clean Fleets
Regulation. Available online at: https://ww2.arb.ca.gov/rulemaking/
2022/acf2022
\30\ Clean Truck Program (CTP)--Gate Move Analysis. Port of Los
Angeles, December 2022. Available online at: https://
kentico.portoflosangeles.org/getmedia/452bad8c-4e16-490f-bab6-
155b061866bb/POLA-Monthly-Gate-Move-Analysis (accessed January 19,
2023).
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There is a critical role for Congress to play in continuing to
ensure that the laws governing maritime freight ensure fairness as well
as to help increase efficiency at ports and ensure that they have the
resources they need to upgrade their facilities to meet future
technology requirements. The Ocean Shipping Reform Act brought long-
needed change, but the work is not done, and we look forward to working
with the Committee to draft and enact additional legislation to ensure
that foreign-owned ocean carriers treat all participants in the supply
chain fairly. The IIJA provides significant resources to improve port
operations and we are optimistic that this important funding will be
used to implement new technologies to streamline operations as well as
make the critical infrastructure improvements that will lead to more
efficient operations. Together, we hope these changes will help us
avoid the types of bottlenecks that we saw over the last two years when
higher volumes return to the supply chain.
In Pursuit of Achievable Energy and Emissions Policies
The trucking industry has an admirable story to tell about our
ongoing emissions reductions and sustainability initiatives and looks
forward to working with Congress and regulatory agencies to set
ambitious, achievable environmental goals. Our industry has made major
steps over the past forty years to reduce our emissions even as the
trucking industry has grown to transport more than 70% of all freight
in the United States. One of the primary ways our industry has achieved
these tremendous emission reductions is through incredible advancements
in engines and emission control systems that make today's trucks
significantly cleaner than the past. A new truck today emits 99% fewer
particulate matter emissions than one in 1985, and 99% fewer nitrogen
oxide (NOx) emissions than one in 1975. By comparison, 60 trucks today
emit the same pollution as a single truck manufactured in 1988.
Our industry is unwaveringly committed to environmental
sustainability. We have a long history of working with the U.S.
Environmental Protection Agency (EPA) to reduce emissions and improve
transportation efficiency through programs like the Cleaner Trucks
Initiative and the voluntary SmartWay program. As a result of these
efforts, participating fleets have saved billions of dollars in fuel
costs, reduced oil consumption, and eliminated millions of tons of air
pollutants. EPA SmartWay estimates that the program has helped its
partners save 357 million barrels of oil since 2004.\31\ If one barrel
of oil produces 11 to 12 gallons of diesel fuel,\32\ that means
trucking companies participating in the SmartWay program have saved
more than 4 billion gallons of fuel--over $19 billion at current
prices--in the last eighteen years.
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\31\ SmartWay Program Successes, U.S. EPA, Available online at:
https://www.epa.gov/smartway/smartway-program-successes.
\32\ Frequently Asked Questions, U.S. EIA, Available online at:
https://www.eia.gov/tools/faqs/faq.php?id=327&t=10
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In 2006, our industry began phasing out harmful sulfur in diesel
fuel, and practically eliminated sulfur oxide emissions. ATA championed
two separate EPA and NHTSA regulations in 2011 and 2016, establishing
the first-ever truck engine, vehicle, and trailer greenhouse gas (GHG)
emission and fuel consumption standards--known as Phase 1 and 2,
respectively. In total, between 2014 and 2027, the combined Phase 1 and
2 GHG standards stand to cut CO2 emissions by 1.37 billion metric tons,
saving vehicle owners and operators $220 billion in fuel costs and
reducing oil consumption by up to 2.5 billion barrels of oil over the
lifetime of the vehicles sold under the program.
The trucking industry supports cleaner transportation technologies
and fuels to protect our environment and diverse communities. As a
society, we rely on trucks in our daily lives to receive everything
from groceries, to mail, to packages--as we say in the industry, ``if
you got it, a truck brought it.'' Fleets don't make trucks--they are
consumers that buy trucks; however, it is trucking companies that buy
technologies that ultimately dictate the success or failure of any
emission regulation or policy agenda. Trucks are not restricted by
geography. They cross city, county, state, and international borders on
a routine basis. It is for this reason that ATA supports national
harmonized standards for the trucking industry.
As Congress and the Administration consider laws and regulations to
meet ambitious environmental goals, ATA will evaluate proposals to
determine whether they improve trucking's emissions profile, are
technology neutral, significantly increase the cost of maintenance, are
thoroughly tested, and are widely available to all segments of the
industry. Trucking will work with our partners in every mode of the
supply chain, the supplier community, and regulators to develop and
deploy technologies that can achieve major improvements in
sustainability. To accomplish those improvements, we need to ensure
that the fuels that currently power our nation's supply chains are
affordable for trucking fleets of all sizes, that the costs of clean
heavy-duty vehicles do not serve as financial barriers to entry, and
that national standards are put in place for key pollutants.
Powering the Future of Transportation Affordably
While diesel remains the key fuel source for our industry, new
technologies that capture pollutants from diesel fuel have enabled the
trucking industry to significantly reduce its emissions. However,
investments in these new technologies are more challenging because of
increasingly volatile fuel prices, which create existential challenges
for fleets of all sizes. According to the American Transportation
Research Institute's (ATRI) annual survey of the industry, fuel is the
second-highest operating cost for trucking and accounts for 22% of the
motor carriers' average marginal costs.\33\ The burden of high,
volatile energy costs falls hardest on small fleets. These smaller
trucking companies, which are typically family-owned, struggle to
operate in a competitive business environment when fuel prices and
regulatory demands for cleaner equipment force those operating costs
upward.
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\33\ An Analysis of the Operational Costs of Trucking: 2022 Update,
American Transportation Research Institute, August 2022.
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Surges in diesel prices hit the trucking industry hard and can cost
the industry an additional tens of billions of dollars, which increases
prices for American families and makes it more difficult for the
industry to invest in new equipment and technology. In 2019, U.S.
trucks consumed 45.6 billion gallons of distillate fuel--36.5 billion
gallons of which were diesel fuel.\34\ The trucking industry's diesel
fuel bill in 2019 was $112 billion when prices were $3.00/gallon.
However, diesel prices rose throughout 2022, reaching a high of $5.81/
gallon--90% higher than 2019 average prices. This would result in an
annual diesel fuel bill exceeding $200 billion for the American
trucking industry, nearly a $100 billion per year increase.
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\34\ ATA Economics and Industry Data. American Trucking
Associations. Available online at: https://www.trucking.org/economics-
and-industry-data
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To address these critical fuel supply issues, ATA supports
immediate action to increase domestic production of oil and gas. This
can be achieved by expediting oil and gas permitting and removing
regulatory barriers that were put in place in 2021. Additionally,
offshore oil and gas lease sales should be considered in the current
production areas of the Central and Western Gulf, as these can be
brought online in a few short years and would send a powerful signal to
world oil markets. Financial restrictions on oil and gas investments
should also be removed to encourage exploration and development in an
environmentally responsible way. Further, Congress should restore
parity in tax incentives for renewable diesel and renewable natural gas
with Sustainable Aviation Fuel, which benefitted from higher tax
incentives under the Inflation Reduction Act and put trucking at a
competitive disadvantage for renewable fuels with other modes of
transportation.
Availability of New Clean Equipment and Supporting Infrastructure
Mandates for emissions reduction and decarbonization will require
the widespread deployment of new, cleaner, or alternative fuel vehicles
that are significantly more expensive, and which are not yet widely
available. The antiquated Federal Excise Tax (FET) on heavy-duty
vehicles, created by Congress to fund America's participation in World
War I, adds an additional 12 percent to the cost of every new truck. If
Congress is serious about reducing emissions from trucking and the
supply chain, then the first step is to remove this onerous tax and
immediately make new, clean equipment more affordable.
As Congress considers a path towards transportation electrification
and conducts oversight of IIJA investments in EV charging and
alternative fuel infrastructure, it is essential that existing fuel
providers be prioritized. There is a symbiotic relationship that exists
between trucking and our fuel providers. The energy transition can only
work for trucking if it works for our fuel providers. It is essential
that these IIJA alternative fuel grant dollars are distributed to
entities that are attuned and responsive to the trucking industry's
evolving needs.
The reality for many of these new technologies is that they are not
yet commercially mature, and the deployment of equipment and supporting
infrastructure will take time and money. Unrealistic mandates that are
impossible for businesses to achieve may serve political purposes, but
not practical ones. The transition to battery electric and zero
emission vehicles can only occur after we make massive improvements to
the national energy grid, install sufficient charging and fueling
infrastructure nationwide, and increase the availability of affordable
alternative fuel power units. Without all those elements, any mandate
is destined to increase costs for supply chains, disrupt commerce, and
fail to achieve emissions reduction goals.
For example, take battery electric vehicles--mandated by California
and other states as the go-to replacement for internal combustion
engine vehicles. A recent study from the American Transportation
Research Institute (ATRI) raises significant doubts about the grid's
ability to handle a transition to battery electric trucks.
Electrification of the U.S. vehicle fleet would consume 40.3% of the
current total electricity demand when our aging grid can hardly sustain
its current energy needs.\35\ In California where rolling blackouts are
common, utilities would need to generate an additional 57% of their
current total electricity output to support an electric vehicle
fleet.\36\
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\35\ Charging Infrastructure Challenges for the U.S. Electric
Vehicle Fleet, American Transportation Research Institute, December
2022.
\36\ Ibid.
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We also know the United States' minerals supply chains are not
prepared for an abrupt transition to battery electric technology. To
produce the lithium-ion batteries that would power the hundreds of
thousands of long-haul power units needed to meet the Administration's
emissions goals, we need tens of millions of tons of cobalt, graphite,
lithium, and nickel, and that amount could take as long as 35 years to
acquire given current levels of global production.\37\ Expanding that
capacity raises enormous ethical questions and costs related to both
developing nations' exploitive child labor policies and the carbon
reduction problem that battery production intends to resolve.
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\37\ Ibid.
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To provide a proper accounting, we need a holistic view--from
``well to wheel''--that includes the total cost of carbon output
through its lifecycle, from extraction, production, and transportation
of the mined and refined product to ultimate fuel use. In the case of
lithium mining, production creates considerably more CO2 and pollution
than does the manufacturing of internal combustion engine materials
alone. In some operations, a minimum of one million gallons of water
are necessary to produce a single pound of lithium.\38\
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\38\ Ibid.
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Fleets face several practical challenges when acquiring battery
electric technology. Few public fast charging stations currently have
the space and infrastructure needed to accommodate battery electric
heavy-duty vehicles, and building more stations could exacerbate the
existing shortage of safe commercial truck parking. Battery electric
truck models currently sell for significantly higher costs than do
typical diesel trucks, and the number of models that are commercially
available is limited to a small selection. Long-haul heavy trucks with
significantly heavier batteries suffer from limited range and reduced
payload capacity. And while some of these challenges can be mitigated
with longer payback periods or the installation of private or semi-
private charging facilities, we know this technology will require
unprecedented advancements in battery range, capacity, and power grid
integration to become a truly viable option for most operators.
Interestingly, the Biden Administration's multiagency U.S. National
Blueprint for Transportation Decarbonization identifies battery
electric technology as a ``limited long-term opportunity'' in the long-
haul segment and points out better-positioned opportunities with
hydrogen and sustainable liquid fuels.\39\ These alternatives offer
advantages in energy density, comparable refueling times with diesel
fuel, and in the case of sustainable liquid fuels like biodiesel and
renewable diesel, compatibility with many current internal combustion
engine configurations. Despite the promising role of these liquid fuels
in achieving emissions goals, the last Congress failed to level the
playing field between Sustainable Aviation Fuels and other alternative
renewable fuels when it passed the Inflation Reduction Act last year.
ATA strongly encourages Congress to take action to lower the costs of
new, clean equipment for trucking and, as mentioned before, restore
parity in tax incentives for clean, renewable, alternative fuels to
power future generations of clean trucks.
---------------------------------------------------------------------------
\39\ The U.S. National Blueprint for Transportation
Decarbonization, page 50, U.S. Department of Transportation, January
2023.
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Harmonizing Federal and State Emissions Requirements
ATA supports emissions regulations that are ambitious yet
achievable. However, proposals by California and other states would
create a patchwork of truck engine and fleet sales standards that are
unworkable for trucking. National goals for emissions reductions and
environmental sustainability need to be facilitated by achievable
national standards.
The next round of GHG emission regulations will address a national
zero-emission vehicle (ZEV) pathway. The President's August 2021
Executive Order requires EPA to complete a Phase 3 Rule by the Summer
of 2024. With initial discussions already underway, new stringent
carbon metrics for new heavy-duty vehicles will take effect beginning
in 2030. The trucking industry supports the pursuit of one national ZEV
plan that is reasonable, logical, affordable, and the least-disruptive
to the nation's supply chains; establishing an unworkable piecemeal
approach to address the nationwide impacts of climate change would
impose chaos on trucking operations, supply chains, and the economy.
No single state will move the national needle on climate change,
but a 50-state approach may. All 50 states in our country together face
compelling and extraordinary conditions posed by global warming. The
country as a whole may meet CAA Section 209(b)(1)(B) compelling and
extraordinary conditions insofar as climate change is concerned, but
such waiver definition is better applied to the whole of the country.
This matter is not defined as ``global warming'' by chance, and
opportunities to address potential solutions are best championed by
national thought leaders.
As purchasers of new trucks and equipment and as an integral link
in the American supply chain, trucking is keenly aware of the costs of
new requirements and their impacts on energy supplies and supply
chains. Projecting forward, fleets are apprehensive about product
unavailability, infrastructure delays, and high upfront equipment and
supply costs that will undoubtedly eat into their narrow profit
margins. That is why our members support one national, low-NOx
standard; a patchwork of state regulations is unworkable for an
industry that crosses state lines daily.
For example, the implementation of a unique NOx program in
California (which may be expanded to some opt-in states under Section
177 of the Clean Air Act) will put at least two different regulatory
programs in play nationwide, which is unworkable and problematic for
interstate freight transportation. Truck manufacturers would not only
face the prospect of two different product lines, but also two
different sets of engine certification requirements and two different
review and approval processes for these products. This will undoubtedly
add to the already high cost of bringing new engines to market and
create duplication in the administrative approval process. Truck fleets
purchasing new equipment will be forced to make difficult decisions on
which product line and price point fits their operational needs to meet
customer demands.
ATA does not define ``harmonization'' as federal standards
mirroring those of a single state, such as California. California has
unique air quality issues given its large population and unique
geographical features. Their regulations should not automatically
become the template for establishing the next national low-NOx
standard. Our definition of ``harmonization'' is the creation of one
federal standard that reduces NOx emissions nationwide, is
technologically and economically achievable, and does not impede
trucking operations or purchase plans across the country. If one
national standard across the country is not established, fleets will
become creative with how, where, and when they purchase equipment to
remain compliant. For example, while States such as California will not
allow you to register new trucks purchased outside the State that do
not meet the California Air Resources Board's (CARB's) low-NOx and
warranty requirements, such vehicles can be purchased and operated
outside the State and then be registered in California once their
odometers hit 7,500 miles. Other states may have similar registration
provisions.
Such creativity will be continually challenged by additional
regulations, which will in turn needlessly complicate purchasing
decisions for our nation's trucking fleets. As an example, in addition
to the NOx program, California is moving forward with its Advanced
Clean Trucks (ACT) Rule. The intent of the ACT Rule is to expedite in-
state decarbonization efforts within the freight sector. This
regulation requires manufacturers who certify Class 2b-8 chassis or
complete vehicles with combustion engines to sell zero-emission trucks
as an increasing percentage of their annual California sales from 2024
to 2035 and beyond. By 2035, zero-emission truck/chassis sales would
need to be 55 percent of Class 2b-3 truck sales, 75 percent of Class 4-
8 straight truck sales, and 40 percent of truck tractor sales. CARB's
companion Advanced Clean Fleets (ACF) Rule will direct large fleets
operating in-state to purchase increasing percentages of ZEVs beginning
as early as 2024. Layering these blanket requirements on a state-by-
state basis unnecessarily complicates business decisions for every
company in the trucking industry, but especially for medium and small
family-owned fleets.
While California has its unique topography and associated air
quality issues, it is imperative that the state and EPA find common
ground in plotting a path forward. Putting differences aside, ATA
encourages EPA and CARB to ultimately unify their approaches. Fleets
have choices and if one harmonized national standard cannot be
achieved, fleets may be forced to change their business models and
purchasing decisions. As Congress considers long-term legislation to
combat climate change, and conducts oversight of federal agencies, ATA
strongly encourages the development of clear, achievable, national
goals.
In Conclusion
I am grateful for the opportunity to testify before you today on
behalf of the American Trucking Associations and the 8 million people
in trucking related jobs who power our nation's supply chains and keep
the wheels of the economy turning. For the Committee to focus its first
hearing on the status of our supply chains is encouraging; it is
imperative that we as a nation continue to be mindful of the importance
of safe and efficient freight transportation and its impact on the
wellbeing of our nation. Trucking is the dynamic linchpin of the U.S.
economy, and as I have emphasized in my testimony, the industry can
only be as efficient as the roads and bridges upon which we operate.
Looking forward, Congress should seize opportunities to enhance the
efficiency and resiliency of the supply chain, and that must involve
smart oversight of IIJA implementation, as well as efforts to empower
the next generation of safe and qualified transportation workers. By
resolving key supply chain bottlenecks, making port operations fairer
and more efficient, and taking meaningful steps towards environmental
sustainability, we can grow our economy and ensure American
competitiveness for generations to come. I look forward to working with
Chairman Graves, Ranking Member Larsen, and the other Members of the
Committee to support efforts to meet those challenges. Thank you.
Mr. Graves of Missouri. Thank you very much.
We now turn to Ian Jefferies, who is the president and
chief executive officer of the Association of American
Railroads. Thanks for being here, Ian.
TESTIMONY OF IAN JEFFERIES, PRESIDENT AND CHIEF EXECUTIVE
OFFICER, ASSOCIATION OF AMERICAN RAILROADS
Mr. Jefferies. Chairman Graves, Ranking Member Larsen,
members of the committee, thank you for the opportunity to be
here today representing America's freight railroads. And thank
you also to my colleagues and friends at the table today who
are all critical to the integrated supply chain. Collectively,
we work together to move the goods the Nation relies on to grow
and thrive.
Taking a moment to reflect, railroads were a prominent part
of the national discourse over the past year. From untangling
pandemic-related supply chain challenges to a historic
collective bargaining round that culminated at the end of the
year, railroads were in the national spotlight like never
before. Certainly, this level of exposure has its pros and
cons, but one core truth was clear: Freight rail is critical to
the economy.
To that end, while it is important to reflect on and learn
from past experiences, it is equally important to focus on the
here and now with an eye toward the future. And so, I hope you
take away four things today from my remarks.
First, safety is at the forefront of everything railroads
do. Our industry operates a 24/7, 365 outdoor assembly line
handling a mix of traffic across every terrain imaginable, and
we do it safely, every day working toward the ultimate goal of
zero injuries and zero deaths. We have more work to do, and we
have got to shoulder into it to keep driving towards that end
game.
The past decade has been the safest in history for the
railroads, and we are safer than almost every industrial sector
you can compare us to. Our employees deserve immense thanks and
appreciation for their role in safely moving America's freight
day in and day out. Their commitment is unparalleled. Yes, last
year's bargaining round was challenging, yet we are glad to see
the terms of the agreement go into effect, including historic
pay increases, the highest in five decades; maintenance of
best-in-class healthcare; and a path to further improve quality
of life and work-life balance issues that remain in our
industry.
Know this: Railroads continue to provide some of the
highest compensated jobs with the best benefits of any industry
in the country. And yet, we recognize that employee relations
is a never-ending process. We are committed to modernizing jobs
to reflect evolving employee values and priorities and, in
turn, building an appropriately staffed and more resilient
railroad to not only serve today's demand, but the demand that
will come in the future. And this is happening on-property as
we sit here today.
Hiring continues throughout our industry at a time when we
read about countless layoffs in industries every morning in the
paper. Railroads continue to hire, with train and engine
workers up nearly 10 percent in the past 12 months, and
overarching rail employment level is up just over 6 percent as
well.
Third, our investments, not only in our employees but in
our top-rated infrastructure, is creating a network built to
serve customers today and into the future. Each year, railroads
invest billions of their own funds to maintain and expand their
infrastructure. The result: The highest rated infrastructure in
the country, according to the American Society of Civil
Engineers.
For context, railroads invested an average of $24 billion
annually of their own funds over the past 15 years. That is $1
billion more than the investments Congress made in this year's
historic level of spending in rail and multimodal programs as
part of the IIJA and the omnibus combined. So, if the IIJA's
investments are historic, I guess railroads make history every
year with their investments.
Last, in no small part because of these factors I have
outlined, service is improving. Over the past year, we
certainly had service challenges, and many of our customers
didn't receive service that they deserve and expect. And so, we
have kept a shoulder into that, working hard, and the results
are coming. Velocity, terminal dwell, trip plan compliance,
other measurements, other metrics are improving across the
board, and even our regulator, the STB, recognizes that as
well. Still more work to do, and we are continuing to drive
those processes forward.
Now turning to matters of direct import today. AAR and its
members absolutely supported the infrastructure bill. Of
course, no bill is perfect, as Chris said. And certainly we had
issues with some of the pay-fors. We would like to get back to
a user pay structure with the highway system, but it had
numerous positives. Specifically, the creation of a
multibillion-dollar grade crossing elimination initiative will
pay dividends into the future, reducing accidents, limiting
motorist delay, and increasing freight fluidity.
And while we proudly fund our own infrastructure, we will
work diligently with our public partners in States and towns
across America so that they can leverage the CRISI program,
Mega program, INFRA program and other grant programs out there.
Looking at agency oversight, we continue to have concerns
about the Federal Railroad Administration's view on technology
and technological deployment. We need a champion, we need a
partner about getting new technology that is going to drive
safety to its next levels, not one that is going to hold us
back. And so, we can get into that further, but I see my time
is running out. And thank you for holding this today, and I
look forward to the discussion.
[Mr. Jefferies' prepared statement follows:]
Prepared Statement of Ian Jefferies, President and Chief Executive
Officer, Association of American Railroads
On behalf of the members of the Association of American Railroads
(AAR), thank you for the opportunity to testify today. AAR members
account for the vast majority of North America's freight rail mileage,
employees, revenue, and volumes as well as Amtrak and some passenger
rail.
U.S. freight railroads operate a network spanning more than 136,000
miles and serve every industrial, wholesale, retail, agricultural, and
mining-based sector of our economy. Together with their Canadian and
Mexican counterparts, U.S. railroads form the world's best freight rail
system (Figure 1).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
In this testimony, I will provide general background on railroads;
discuss steps railroads have taken to improve service over the past
year; provide an overview of rail labor issues; and discuss what
policymakers can do to maintain a regulatory and legislative framework
conducive to moving freight by rail.
Freight Railroads Offer Enormous Benefits to Our Nation
America's freight railroads are proud of the tremendous role they
play in the U.S. economy. The operations and capital investments of
America's major freight railroads support a million or more jobs and
several hundred billion dollars in nationwide economic activity, wages,
and taxes.
Moving freight by rail meaningfully reduces greenhouse gas
emissions. In 2021, U.S. freight railroads moved a ton of freight an
average of nearly 500 miles per gallon of fuel, making railroads three
to four times more fuel efficient than trucks. Safety is the foundation
of everything the railroads do, and the past decade has been the safest
in rail history. The train accident rate in 2021 was down 30 percent
from 2000; the employee injury rate was down 47 percent; and the grade
crossing collision rate was down 23 percent.
Railroad Accident Rates:
2000-2021
------------------------------------------------------------------------
------------------------------------------------------------------------
Total accidents -30%
Collisions -50%
Derailments -35%
Other -9%
Employee injuries -47%
Grade crossings -23%
Hazmat incidents \\ -60%
------------------------------------------------------------------------
Through 2020. Source: FRA, AAR
Figure 2
Unlike trucks, barges, and airlines, America's privately-owned
freight railroads operate almost exclusively on infrastructure they
own, build, maintain, and pay for themselves. From 1980 to 2022,
freight railroads spent more than $800 billion of their own funds, not
government funds, on capital expenditures and maintenance expenses.
That's more than 40 cents out of every revenue dollar invested right
back into a rail network that keeps America's economy moving.
The affordability of freight rail saves rail customers billions of
dollars each year; enhances the global competitiveness of U.S.
products; and helps American consumers. Average rail rates (measured by
inflation-adjusted revenue per ton-mile) were 44 percent lower in 2021
than in 1981. Changes in rail rates over time compare favorably to
changes in the prices of things we buy every day (Figure 3).
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Rail Customers Deserve Safe, Reliable Service
Railroads know rail service over the past year has not been what
their customers want or deserve and are fully committed to restoring
service to a consistently high level.
Hiring and Retaining a Robust Rail Workforce
Over the past two years, railroads, along with virtually every
other industry, have found that attracting and retaining enough
employees to meet their needs has been a major challenge. The pandemic
turned labor markets upside down. When rail traffic collapsed,
railroads deployed a long-standing method of temporarily furloughing
some employees. As the economy recovered faster than anyone expected,
and demand for rail service surged, far fewer furloughed employees
chose to return than historical patterns would suggest, leaving
railroads without sufficient workforce. We now know that furlough
policies must be carefully reviewed to build more resiliency into the
system to better ride economic ups and downs.
To this day, competition for workers remains fierce. In December
2022, the national unemployment rate was 3.5 percent, matching the
lowest it's been in 50 years. In many key railroad states, the
unemployment rate is even lower. The extremely tight labor market means
railroads' single-biggest service-related challenge is finding and
keeping employees.
I'm happy to say, though, that railroads are making progress. Total
Class I railroad employment in December 2022 was up 6.8 percent over
January 2022.\1\ Train and engine employment (mostly engineers and
conductors in locomotive cabs) was up 9.6 percent in December 2022 over
January 2022. Railroads are taking many concrete steps to recruit new
employees and continue this progress, including hiring bonuses,
relocation bonuses for current workers who move to high-need areas, and
employee referral bonuses. In fact, this month Union Pacific reported
that last year it received 12,000 employee referrals which led to 1,200
job offers. Railroads are confident they will continue successfully
recruiting the next generation of railroad workers to meet the nation's
rail freight demand.
---------------------------------------------------------------------------
\1\ Class I railroads are those with annual revenue in 2021 of at
least $944 million. The seven U.S. Class I railroads account for
approximately 95 percent of U.S. freight rail industry revenue.
---------------------------------------------------------------------------
Investing in Rail Infrastructure
America's freight railroads operate overwhelmingly on
infrastructure they own, build, maintain, and pay for themselves. In
recent years, railroads invested close to $70 million every day, on
average, back into the network, making railroads at or near the top
among all U.S. industries in terms of capital intensity (Figure 4).
Thanks to this spending, ``crumbling'' might describe some U.S.
infrastructure, but not freight rail. The American Society of Civil
Engineers has consistently awarded rail the highest grade of all
American infrastructure.\2\ U.S. freight rail infrastructure is in
better overall condition today than ever before.
---------------------------------------------------------------------------
\2\ See American Society of Engineers, 2021 Report Card for
America's Infrastructure (available at https://
infrastructurereportcard.org).
Capital Spending as % of Revenue
------------------------------------------------------------------------
------------------------------------------------------------------------
Average all manufacturing 3.0%
Petroleum & coal products 2.3%
Food 2.3%
Machinery 2.6%
Motor vehicles & parts 2.8%
Fabricated metal products 3.2%
Primary metal products 3.2%
Wood products 3.4%
Plastics & rubber products 3.8%
Chemicals 3.8%
Paper 4.3%
Nonmetallic minerals 4.4%
Computer & electr. products 5.0%
Class I Railroads 18.4%
------------------------------------------------------------------------
Avg. 2012-2021. Source: Census Bureau, AAR
Figure 4
Railroads remain firmly committed to investing in and growing their
operations to improve and expand service, as evidenced by the plans
announced by many of the railroads to expand capacity:
BNSF recently announced a 2023 capital investment plan of
$3.96 billion and will invest more than $1.5 billion in the Barstow
International Gateway, a new state-of-art integrated rail facility in
Southern California.
Union Pacific plans to spend close to $2 billion in 2023
on maintenance and capital spending and opened a new intermodal
facility in Oregon in December, which will encourage agricultural
shippers to bypass the congested I-5 corridor in the Pacific Northwest.
Norfolk Southern has announced major investments
including capacity projects in the Chicago-Cincinnati-Jacksonville and
Atlanta-Birmingham-New Orleans/Mobile corridors.
CSX began work in late 2021 on a multi-year project to
enlarge the Howard Street Tunnel that runs beneath Baltimore and clear
obstructions at 22 other locations between Baltimore and Philadelphia.
The list goes on. Kansas City Southern, CN, Canadian Pacific--even
short line systems like Genesee and Wyoming and Watco--continue to
spend massively, including on new capacity, to improve the safety,
resiliency, and reliability of their networks.
Railroads are making these investments because they want to grow
with their customers through a safe, fluid, and reliable network. These
investments will improve service now and help railroads and their
customers better weather service disruptions in the future.
Metrics Show Service is Improving
Data reported by individual railroads and compiled by the Surface
Transportation Board (STB) indicate that railroads are making progress
on a variety of key service metrics. A recent STB report stated that
railroads are meeting six-month targets for service improvement, with
key performance indicators trending in a positive direction.
For example, average train speeds have all been trending higher for
most railroads over the past nine months. The same holds true for
manifest trains \3\, coal unit trains \4\, grain unit trains, and
intermodal trains. Average terminal dwell time \5\ has been falling for
most railroads and the percentage of rail cars in manifest trains
delivered within 24 hours of their original arrival estimate has been
trending higher. Train recrew rates \6\ have been trending down for
most railroads as well. All these metrics point to a more fluid, more
efficient system.
---------------------------------------------------------------------------
\3\ Manifest trains are trains carrying a variety of different
commodities.
\4\ A unit train is a train carrying just one commodity.
\5\ Terminal dwell time is the time a railcar sits in a rail yard
before being switched into an outbound train.
\6\ Train recrew rates is the percentage of rail train crews who
had to go off duty before trains completed their runs because their
allowable on duty time expired.
---------------------------------------------------------------------------
It's not just STB data that show recent improvement in rail service
levels. A recent survey of rail shippers by Wolfe Research, a highly
respected Wall Street investment and advisory firm, found that ``Rail
service ratings . . . have reached their highest level in our survey in
the past 10 quarters.'' \7\ The pace of rail service improvement might
be slower than some rail customers and policymakers would prefer, and
not every service metric for every railroad has been improving in
recent months, but the progress railroads have made is unquestionably
good news and the work to improve service is continuing.
---------------------------------------------------------------------------
\7\ Wolfe Research, ``The State of the Freight--1Q Shipper
Survey.''
---------------------------------------------------------------------------
Rail Labor Negotiations
Railroads are pleased to have concluded the round of national
collective bargaining with the twelve major rail unions at the end of
last year. The historic agreements reached in the round were based on
the recommendations of neutral arbitrators appointed by President Biden
and were facilitated directly by senior members of his administration.
These agreements contain a 24 percent wage increase, the largest
compensation increases seen in the industry in approximately 50 years.
They also maintain the railroads' platinum-level healthcare plans,
provide additional paid time off for all represented rail workers, and
establish a process and timeline for the railroads to work directly
with the operating craft unions to make additional work rules changes
this year that will enhance predictability and quality of life for
those employees who currently have the least predictable schedules. We
would like to thank Congress for the swift, bi-partisan action to avert
a shutdown of the nation's rail system.
The industry and its employees take great pride in the work that
they do to move the nation's freight and support the U.S. economy. Rail
jobs are, and always have been, great jobs. The recent national
agreements will ensure that railroad compensation and benefit levels
remain near the very top of the American workforce. However, even
though the bargaining round is behind us, the railroads recognize that
more can be done to enhance the work-life balance traditionally
associated with certain types of rail employment. Individual carriers
are already engaging with the rail unions to discuss steps that can be
taken to modernize railroad work rules and provide greater flexibility
for rail employees to structure their personal lives. In this regard,
the railroads look forward to productive and collaborative discussions
with the rail unions.
Opportunities for the 118th Congress
The 118th Congress will play a critical role as railroads continue
to find innovative ways to improve safety, coordinate with state and
local governments to invest in infrastructure, and work with regulators
and customers to enhance service.
Supporting Innovation and Technology to Improve Safety
Safety is the foundation of everything the railroads do, and
railroads have long applied technological solutions to improve safety,
enhance performance, and create efficiencies. The industry has made
major progress in safety over the last few decades. The next great leap
forward in safety directly relies on the ability of railroads to
innovate and deploy new technology but achieving the maximum benefit
from these new technologies requires regulatory flexibility. While
other Department of Transportation modal agencies are working to
support greater automation and the safety benefits that accompany such
technology, the Federal Railroad Administration (FRA)--railroads' prime
safety regulator--stands alone in its efforts to lock in yesterday's
regulatory approaches.
Congress can support the goal of achieving better outcomes through
new technology by ensuring the FRA becomes increasingly forward-looking
in how it proposes and promulgates new rules, particularly when
innovation can improve safety. Identifying specific safety concerns a
new rule is meant to address; relying on sound science and building
robust data sets to support rules; identifying specific metrics to
measure effectiveness; adopting performance-based, rather than
prescriptive regulations; and issuing waivers that facilitate new
technology will all enhance the industry's ability to innovate and
create new ways to improve safety while still being subject to FRA
oversight.
For example, automated track inspection (ATI) is changing the
nature of track inspection by allowing railroads to gather massive
amounts of data, analyze it for patterns and warning signs, and
preventatively maintain their track. In some instances, ATI testing of
track has resulted in more than a 90 percent reduction in the rate of
unprotected main track defects found, yet the FRA is preventing
railroads from widely implementing this safety-enhancing technology.\8\
---------------------------------------------------------------------------
\8\ For additional information on ATI and other safety-enhancing
technology, please visit: https://www.aar.org/wp-content/uploads/2022/
06/AAR-Technology-Fact-Sheet.pdf
---------------------------------------------------------------------------
Another example of FRA failing to understand the importance of
technology in improving safety is the July 2022 Notice of Proposed
Rulemaking (NPRM) that, for all intents and purposes, would mandate two
crew members in a locomotive cab.\9\ Proponents of a two-person crew
mandate for railroads, including current FRA leadership, say it would
enhance rail safety. There is no data to support this claim. In fact,
many railroads--including shortline, passenger, and most European
railroads--already operate with a one-person crew in the cab. We do
know, however, that a two-person mandate could stifle the adoption of
other new technologies that would enhance railroads' safety and
efficiency. Crew size has always been, and should continue to be,
collectively bargained and the flexibility to evolve and adapt should
be maintained.
---------------------------------------------------------------------------
\9\ For additional information on the Crew Size NPRM, please visit
https://www.aar.org/wp-content/uploads/2020/08/AAR-Crew-Size-Fact-
Sheet.pdf
---------------------------------------------------------------------------
Implementing the Infrastructure Investment and Jobs Act
Railroads appreciate the work of this Committee and the 117th
Congress to pass the Infrastructure Investment and Jobs Act (IIJA) in
2021. IIJA's grant programs enable the public sector to partner with
freight railroads and others to advance projects that provide
significant public benefit. The Consolidated Rail Infrastructure and
Safety Improvements (CRISI) program appropriates $1 billion per year
for projects that improve the safety, efficiency, and reliability of
intercity passenger rail and freight rail, a dramatic increase from
past funding levels. For the first time, IIJA also provided $600
million annually in dedicated funding for the Grade Crossing
Elimination Program to help state and local communities close grade-
level crossings. These projects will dramatically improve safety,
reduce emissions, and connect communities. Other IIJA grant programs,
including Infrastructure for Rebuilding America (INFRA) and Rebuilding
American Infrastructure with Sustainability and Equity (RAISE), will
allow state and local governments working with freight railroads and
other partners to fund major projects with regional and national
impacts.
For example, last year the Illinois Department of Transportation
and the Chicago Region Environmental & Transportation Efficiency
Program (CREATE), of which AAR is a proud partner, received a $70
million INFRA grant for the Ogden Junction project in Chicago to
replace, repair, or eliminate 16, 100-year-old bridges along a two mile
stretch of freight rail lines. By modernizing these tracks, CREATE will
increase safety, reduce delays for commuter rail, enhance the local
community and businesses, and improve the flow of freight through the
vitally important Chicago rail hub.
Because of railroads' fuel efficiency, good-paying jobs, and strong
ties to the communities in which they operate, the industry is in a
unique position to achieve the broader goals of IIJA. While IIJA does
address some permitting issues to ensure the money goes as far as
possible while maintaining environmental protections, further
permitting reforms would be beneficial.\10\ We look forward to working
with Congress on its continued implementation.
---------------------------------------------------------------------------
\10\ For more information on permitting, please visit https://
www.aar.org/article/freight-rail-environmental-permitting-policies/
---------------------------------------------------------------------------
Maintaining Balanced Regulation
Throughout history, the degree of government control over rail
operations has tremendously impacted the industry's vibrancy and
effectiveness. Prior to the enactment of the Staggers Act of 1980,
excessive regulation was preventing railroads from earning adequate
revenues and competing effectively in the freight transportation
market. Congress recognized the need for a new regulatory scheme that
allowed railroads to establish their routes and tailor rates based on
market conditions and demand. Importantly, however, the Staggers Act
did not completely deregulate railroads. The STB, the federal agency
that regulates rail rates and service, retained authority to set
maximum rates if a railroad was found to have ``market dominance'' over
a particular movement and the rate was determined to be unreasonable.
The STB was also permitted to take other actions if a railroad engages
in anti-competitive behavior. Effectively, under today's balanced
regulations, the market is allowed to govern, unless and until it is
determined to have failed.
Since Staggers, rail spending has risen dramatically as well as
rail income, leading, in turn, to greater efficiency, improved safety,
better service, and sharply lower average rates (Figures 9 and 10).
These improvements are exactly what Congress hoped for when it passed
Staggers. Today, railroads' survival is not in doubt, but that doesn't
mean the need for balanced regulation has gone away. America's
railroads are healthy precisely because of the regulatory balance that
Staggers ushered in.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Unfortunately, some rail industry critics want policymakers to re-
impose excessive regulations and price controls on railroads. The STB
is currently considering several proposals that would do just that. If
this happened, the rail industry would not disappear overnight, but
over time its physical plant would deteriorate, needed new capacity
would not be added, and rail service would become slower, less
responsive, and less reliable. Of course, the STB does, and should,
play a productive role in adjudicating disputes between shippers and
railroads, but excessive government intervention into private activity
only risks sending the industry backwards.\11\
---------------------------------------------------------------------------
\11\ For additional information on the Staggers Act and the STB,
please visit https://www.aar.org/campaigns/economic-regulation-101/
---------------------------------------------------------------------------
Conclusion
Railroads are bullish on 2023 and beyond. In the long term, demand
for freight transportation will grow as our economy and population
grow, and railroads are the most efficient, cost-effective, and safest
way to meet much of this growing demand. Railroads reduce emissions and
the overall environmental impact of transportation; provide good-
paying, stable careers to millions of Americans; enable domestic
manufacturing, agriculture, and other industries to continue expanding;
and enhance America's competitiveness in the global economy. In such an
interconnected supply chain, every segment must be robust. Only through
working together can we maximize supply chain performance and keep our
economy moving.
Railroads want to build on these successes, and they remain ready
and willing partners with this Committee, the STB, and other
policymakers to achieve our shared goals of a robust, strong U.S. rail
network long into the future.
Mr. Graves of Missouri. Thank you very much. I appreciate
it, Mr. Jefferies.
And now I am going to yield to Ms. Hoyle for introduction
of our next witness.
Ms. Hoyle of Oregon. Thank you, Chairman Graves and Ranking
Member Larsen, for the opportunity to introduce Jeff Firth from
Hamilton Construction, one of Oregon's largest construction
firms. He has deep ties in southwest Oregon, and we both live
in Springfield, Oregon. He is here today on behalf of the
Associated General Contractors of America. And I am delighted
to have this opportunity to introduce him to you, Mr. Chairman,
and to the rest of my colleagues.
Mr. Graves of Missouri. Thank you.
Mr. Firth, you are recognized.
TESTIMONY OF JEFF FIRTH, VICE PRESIDENT, HAMILTON CONSTRUCTION
COMPANY, ON BEHALF OF THE ASSOCIATED GENERAL CONTRACTORS OF
AMERICA
Mr. Firth. Good morning, 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.
Again, my name is Jeff Firth, and I am the vice president
of Hamilton Construction Company, and a board member of the
Associated General Contractors of America, or AGC, where I
serve as vice chair of the Highway and Transportation Division.
AGC is a 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. AGC contractors are both
union and open shop, and are engaged in the construction of our
Nation's infrastructure, including roads, bridges, airports,
transit systems, levees and dams, and more. In 2020, 91 percent
of firms within the construction industry had 20 or fewer
employees.
Hamilton Construction Company has been building bridges and
highways as a heavy civil contractor since 1939. Hamilton has
partnered with owners to deliver numerous award-winning,
complex bridges, highways, dams, and other critical
infrastructure projects. We have four divisions that operate
throughout the West.
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.
The Infrastructure Investment and Jobs Act, or IIJA,
represents the most significant infusion of investment,
including over $350 billion dedicated to roads and bridges in
our infrastructure since the enactment of the Interstate
Highway System since 1950. However, inflation and supply chain
constraints have threatened the success of the IIJA. And in my
testimony today, I will discuss the challenges that have
emerged from the industry even as some conditions improve.
Infrastructure project costs continue to climb amid rising
construction materials prices and shortages. Material prices
have increased and doubled or even tripled in some cases. The
construction industry is facing material challenges that reach
far and wide. In fact, a recent survey of AGC members found
that 93 percent of construction companies are experiencing long
lead times and/or allocations--less-than-full shipments--for
construction materials. Supply chain disruptions from the
pandemic have inflated the cost of construction materials and
made project delivery schedules and product availability more
uncertain.
Construction firms, in situations where they are able to,
will pass along the rising materials prices in order to remain
successful. Unfortunately, the lead time in bidding these
projects is so long that they are unable to predict the
availability and price of some of these materials. We are
experiencing an unprecedented burden with bidding procurement
of new projects. As you can imagine, the impacts are especially
devastating to small and DBE construction firms that lack the
resources to absorb these unexpected costs.
The industry is also facing uncertainty around Buy America
requirements included in the IIJA, which expands domestic
sourcing requirements to all construction materials on
federally assisted projects, such as affordable housing,
drinking water, transportation projects, and more. I want to be
clear, AGC supports sensible efforts to incentivize the growth
of domestic manufacturing capacity to restore balance to the
supply chain.
There is still significant confusion among industry,
Federal, State, and local agencies regarding the difference
between a construction material and a manufactured product and
what manufacturing processes must occur domestically for
construction materials.
There is also heartburn within the construction industry
about needing a Buy America waiver in the future and the low
likelihood in it being granted based on history. To make the
waiver process even more problematic, because of an Executive
order, Federal agencies must submit waivers for items not made
in America to the Office of Management and Budget. At Hamilton
Construction, this new requirement has caused us confusion.
Owners should have a better handle on what is being specified
on their projects and ensure that these materials are available
to meet Buy America requirements. Most owners simply pass the
onus on to the contractor and stipulate that they will not pay
the contractor until they find something that works. As you can
imagine, this is hard to do if there is nothing out there that
qualifies as an equivalent.
While the IIJA provides a historic level of funding in our
infrastructure, we are still recovering from a global pandemic,
addressing a supply chain crisis, and implementing new Federal
requirements that were part of the IIJA, which has created
challenges for those of us tasked with rebuilding our
infrastructure. But let me be clear, if Congress did not pass
the IIJA, the impacts on transportation contractors would be
have been significant with likely a cut of 20 to 30 percent in
projects by the States.
I thank the committee for the opportunity to testify today.
I look forward to answering any questions that you may have.
[Mr. Firth's prepared statement follows:]
Prepared Statement of Jeff Firth, Vice President, Hamilton Construction
Company, 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 Jeff Firth,
and I am the Vice President of Hamilton Construction Company and a
board member of the Associated General Contractors of America (AGC)
where I serve as Vice Chair of the Highways and Transportation
Division.
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\
---------------------------------------------------------------------------
\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:+2020
---------------------------------------------------------------------------
Hamilton Construction Co. (Hamilton) has been building bridges and
highways as a heavy civil contractor since 1939. Hamilton has partnered
with owners to deliver numerous award-winning, complex bridges,
highways, dams, and other critical infrastructure projects. Hamilton
has four divisions and operates throughout the West. The divisional
organization allows Hamilton to better serve our clients and employees
from local offices in Oregon, Washington, and Alaska.
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. The Infrastructure Investment
and Jobs Act (IIJA) represents the most significant infusion of
investment, including over $350 billion dedicated to roads and bridges,
in our infrastructure since the enactment of the Interstate Highway
System in the mid-1950's. However, inflation and supply chain
constraints have threatened the success of the IIJA. In my testimony
today I will discuss the challenges that have emerged for the industry,
even as some conditions improve.
II. Provide Flexibility for States and Construction Companies
States Need Flexibility to Meet their Transportation Needs
AGC believes that the Federal Highway Administration (FHWA) must
continue to provide state and local governments with the flexibility to
address and prioritize their unique transportation needs as Congress
intends. Secretary Buttigieg recently \2\ stated, ``No one understands
a community's needs better than those who live there,'' and AGC could
not agree more. 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 often not being involved in project
selection or the design of a project.
---------------------------------------------------------------------------
\2\ 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. 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.
FHWA released a guidance memo highlighting, among other things,
that states should focus exclusively on maintenance and repair work on
existing roadways before building more or new roads.\3\ This memo has
caused confusion with state DOTs about the mismatch between this
guidance and the lack of corresponding requirements for such measures
by the IIJA. This policy, which was rejected by Congress in IIJA
negotiations, paints a false narrative based upon FHWA's own data which
states that 80% of roadway construction projects already repair
existing roads and bridges.\4\ States are already fixing it first,
thanks to the policies like performance management requirements--put in
place by Congress. Our nation's interstate system was built and
designed over 50 years ago, and it is past time that states modernize
them to meet the current needs of the cities and populations they
serve. Flexibility to add new capacity to meet these changed needs is
crucial.
---------------------------------------------------------------------------
\3\ https://www.fhwa.dot.gov/bipartisan-infrastructure-law/
building_a_better_america-policy_framework.cfm
\4\ See Appendix Figure 1 and Figure 2
---------------------------------------------------------------------------
AGC led a coalition \5\ effort requesting that FHWA rescind the
``Policy on Using Bipartisan Infrastructure Law Resources to Build a
Better America'' memorandum issued on December 16, 2021. The recent
December 15 U.S. Government Accountability Office determination that
this memo is a rule under the Administrative Procedures Act (APA)
further underscores two of our concerns.\6\ First, if the memo
articulated a valid rule, the regulated community--including state and
local transportation agencies--must comply with its parameters. Second,
formulation of the rule must comply with the APA, requiring public
notice and comment which did not occur in this case. If FHWA wishes to
prioritize certain types of programmatic policy changes, then the
agency should work with Congress to legislate such changes or follow
the notice and comment rulemaking process as required under the APA.
Here, FHWA did neither.
---------------------------------------------------------------------------
\5\ https://www.agc.org/sites/default/files/Files/
Govt%20Regulations%20and%20Executive
%20Orders/Coalition%20L etter%20-%20FHWA%20Memo%201.18.2023.pdf
\6\ https://www.gao.gov/products/b-334032
---------------------------------------------------------------------------
Putting policy priorities aside, AGC is also concerned about the
precedent that this policy memo sets. We fear the potential policies
that future administrations could prioritize without undertaking a
formal notice and comment rulemaking.
III. Challenges to Rebuilding the Nation's Infrastructure
Supply Chain Constraints
Infrastructure project costs continue to climb amid rising
construction materials prices and shortages. Material price increases
have doubled or even tripled in some cases \7\. The construction
industry is facing material challenges that reach far and wide. In
fact, a recent survey of AGC members found that 93 percent of
construction companies are experiencing long lead times and/or
allocations (less-than-full shipments) for construction materials.\8\
Supply chain disruptions from the pandemic have inflated the cost of
construction materials and made project delivery schedules and product
availability more uncertain.
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\7\ https://www.agc.org/sites/default/files/users/user21902/
Construction%20Inflation%20Alert
%20Cover_Jul2022_V4. pdf
\8\ https://www.agc.org/sites/default/files/users/user33405/
Buy%20America/2022%20Materials
%20Survey%20Results%20Data.pdf
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Infrastructure projects across the country have been delayed and
more could be jeopardized. Construction firms, in situations where they
are able to, will pass along the rising materials prices in order to
remain successful. Unfortunately, the lead time in bidding these
projects is so long that they are unable to predict the availability
and price of some of these materials. We are experiencing an
unprecedented burden with bidding and procurement of new projects.
Specifically, some of these challenges for Hamilton include:
Steel Pricing--We receive a price the day of bid but are
required to let the supplier know anywhere from that same day up to one
week if we will place an order. As a result, we have to decide in an
incredibly short time period whether we will buy materials for a
project that we do not know if we will be awarded, placing significant
risk on our business.
Concrete Shortages--Suppliers have been putting us on a
weekly allocation (or rationing) for concrete. This is a challenge when
you might have a 300+ cubic yard pour, can only get 50-75 cubic yards
and have a set schedule to meet.
Lattice Boom Crawler Cranes--The supplier we use only has
six available on the west coast.
Other Construction Equipment--The forecast for air
compressors, light plants, generators, manlifts, forklifts is 40-50
weeks at a minimum.
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 because there is no
price adjustment clause available to them. At Hamilton Construction we
have had experiences that vary state to state:
Some of our owners have fuel adjustment clauses but only
for certain scope of work performed on the project.
Some owners have adjustment clauses for steel and
asphalt, however, only for certain scopes of work within the project
and the adjustment clauses do not cover all materials that will be used
on a project.
Some owners that we work with do not have any type of
adjustment clauses at all.
At Hamilton Construction fuel escalations were helpful,
but not enough. Our fuel bill for the year overran close to $1 million
dollars from what was budgeted.
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 DBE construction firms that lack the resources to absorb
these unexpected costs.
Implementation of the Build America, Buy America Act (BABAA)
The industry is also facing new uncertainty around Buy America
requirements. I want to be clear, AGC supports sensible efforts to
incentivize the growth of America's domestic manufacturing capacity to
restore balance to the supply chain. As you know, the IIJA included the
Build America, Buy America Act (BABAA) which expands domestic sourcing
requirements to all construction materials on federally assisted
projects such as affordable housing, drinking water, transportation
projects and more.
The Office of Management & Budget (OMB), who oversees
implementation of BABAA, issued preliminary guidance defining
construction materials on April 18, 2022, and told agencies to include
BABAA requirements in all new contracts on May 14. OMB issued these
``rules'' before conducting significant research on the supply chain,
as it put forth a request for information within the guidance and has
yet to issue final guidance. The Department of Transportation (U.S.
DOT) initially issued a transitional waiver for six months which has
since expired. We believe that U.S. DOT should issue another
transitional waiver of six months to a year, or until the Department
can provide clarifying guidance and ensure there is adequate time for
public owners and contractors to understand these new requirements.
There is still significant confusion among industry, federal, state
and local agencies remain regarding the difference between a
construction material and a manufactured product and what manufacturing
processes must occur domestically for construction materials. For
example, there is still no guidance from OMB or U.S. DOT about asphalt
and concrete which has created confusion among industry and state DOT's
about whether they are exempt from these new requirements--even though
the statute is clear. To address this issue, U.S. DOT must identify a
specific list of which construction materials will have to be Buy
America compliant and which materials will be considered a manufactured
product. To date, they have not done this.
In addition, OMB has also added new uncertainty for the
construction industry. For example, their April 18, 2022, Memo \9\
requires the Federal Highway Administration (FHWA) to reevaluate its
existing 1983 manufactured products waiver. To date, FHWA has not
issued a request for comment on such waiver.
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\9\ https://www.whitehouse.gov/wp-content/uploads/2022/04/M-22-
11.pdf
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There is also heartburn within the construction industry about
needing a Buy America waiver in the future and the low likelihood in
being granted one based on history. To make the waiver process even
more problematic, because of an executive order, federal agencies must
submit waivers for items not made in America to OMB. They assure us
though that OMB must approve or deny the waiver within 15 days.
However, this does not detail when U.S. DOT or another agency received
the waiver request first and only starts the 15-day deadline when the
agency actually transmits the waiver request to OMB. We ask that the
Committee conduct thorough oversight to ensure that the waiver process
is transparent and does not get caught up in politics of the White
House and OMB.
At Hamilton Construction this new requirement has caused confusion.
Owners should have a better handle on what is being specified on their
projects and ensure that these materials are available to meet Buy
America requirements. Most owners simply pass the onus onto the
contractor, and then stipulate that they will not pay the contractor
until they find something that works. As you can imagine, this is hard
to do if there is nothing that qualifies as an equivalent.
We have heard that one DOT is going through and creating a product
list that meets the new Buy America requirements and distributing it
amongst their contractors. As contractors, we only bid and build what
is on the plans, meaning substitutions can also be very difficult to
obtain.
A more responsible way to implement these new requirements would be
for OMB and U.S. DOT to implement them on a product-by-product basis,
after identifying manufacturing capacity. However, it appears as though
they are choosing to charge full speed ahead amidst supply chain woes--
like long lead times and material allocations.
One thing FHWA has done is a Request for Information on the
availability of Buy America compliant electric vehicle (EV) charges and
then subsequently a proposed waiver for them. AGC offered support for
such waiver.\10\ However, it is disappointing that the agency did not
undertake outreach and research to a similar degree of rigor on other
manufactured products and construction materials subject to BABAA.\11\
While this waiver will address the challenges present with EV charging
stations, the manufactured product is merely one example of a much
larger industry-wide problem when it comes to meeting these new
requirements. Put nicely, implementation of the new Buy America
requirements is off to a rocky start and the construction industry is
very concerned and confused.
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\10\ https://www.regulations.gov/comment/FHWA-2022-0023-0037
\11\ On November 24, 2021--14 days after President Biden signed the
Infrastructure Investment and Jobs Act (IIJA) into law--USDOT and the
Department of Energy published an RFI seeking comments within 47 days
to discern whether EV charging stations could meet BABAA requirements.
FHWA, on the other hand, issued an RFI to help understand the possible
impacts of BABAA requirements on the vast field of construction
materials utilized on federal-aid highway projects on July 28, 2022--
225 days after IIJA enactment--and sought comments within 21 days.
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Greenhouse Gas Performance Measure
Last summer, FHWA proposed 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 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. We believe FHWA should follow congressional
intent and refrain from reviving policy ideas that Congress considered
and ultimately rejected.
A greenhouse gas performance measure will limit a state's options
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 rather than a roadway
project might work for the transportation needs of their state.
However, factors like climate and population density may limit some
states' transportation options.
If the Administration insists on moving forward with this
rulemaking, AGC believes that they should provide an exemption for low-
population density states and focus on the states with the highest
greenhouse gas emissions. Likewise, we believe that FHWA should not
penalize states for not meeting their greenhouse gas emissions targets.
Waters of the United States (WOTUS) Rule
The Clean Water Act (CWA) grants the U.S. Army Corps of Engineers
(Corps) and the Environmental Protection Agency (EPA) jurisdiction over
``navigable waters,'' defined in the act as ``Waters of the United
States'' (WOTUS) without further clarification. Both the federal
agencies and the courts have long struggled to define WOTUS:
establishing which waters are regulated by the federal government and
which fall under the jurisdiction of state and local governments for
protection. Federal jurisdiction affects all CWA programs (not just
dredge and fill/wetlands permits) and determines when a construction
site must obtain a federal permit.
The administration released its new WOTUS rule despite the fact the
U.S. Supreme Court is currently weighing the scope of the Clear Water
Act as part of the Sackett v. EPA case. A ruling in that case could
render elements of the new rule irrelevant, adding further regulatory
confusion for a large section of the economy. AGC urged the Biden
Administration to wait for the Supreme Court to issue a ruling on the
Sackett case before proceeding. We also urged the administration to
focus its regulatory efforts on implementing the environmental
streamlining provisions that were included in the IIJA the president
signed into law over a year ago.
The construction industry invests a significant amount of time and
cost in compliance with the Clean Water Act and to avoid or reduce
potential impacts on the environment. The new rule is the sixth time
the requirements have changed in seven years, compounding the existing
uncertainty in an area of law that can not only significantly delay and
increase costs on projects but also bring criminal as well as civil
penalties. AGC would support any congressional efforts to halt
implementation of this new rule, especially given how any Supreme Court
decision could lead to the seventh change to the rule in just as many
years.
Disadvantaged Business Enterprise (DBE) Program
On July 21, 2022, the U.S. Department of Transportation announced a
notice of proposed rulemaking on the Disadvantaged Business Enterprise
(DBE) Program. AGC represents DBE and non-DBE firms and has identified
many areas of agreement on how to improve the DBE program. For example,
we are pleased that the Department 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 Department 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 company and not forcing them to spend time on a
duplicative paperwork process.
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) that sets a $45 million cap and is revised for industry
trends and inflation at least every five years by the SBA.
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 the 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 program
is further 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 use of NAICS codes in
transportation construction.
At Hamilton we have had very positive experiences in working with
DBEs. The main challenge we see is that the pool of DBE's is not
growing. As a prime contractor, we want to have options available. We
also want to ensure that when the time comes to perform the work, the
DBE has the capacity to perform the job and isn't trying to work on 10
jobs concurrently with limited resources.
We utilize DBEs for various types of jobs. For example, one good
experience with a DBE firm was on a Washington State DOT project. They
performed the traffic control for us and did a great job. It was one of
the more difficult jobsite conditions where there are 3-5 lanes of
traffic in each direction, on/off-ramps to contend with, and also
challenges with the general public--not paying attention in work zones,
driving too fast, not focusing on the road, etc.
Facilitate Efficient Project Delivery
AGC believes a great way to maximize the investment in IIJA would
be to implement the environmental review and permitting reforms that
were mandated in the bill. 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
costs associated with delivering projects will be reduced without
jeopardizing environmental protections.
Specifically, we ask that the administration implement the
provisions that would:
Codify the One Federal Decision policy;
Allow for utility relocation in the right of way prior to
the National Environmental Policy Act (NEPA) review being completed;
and
Extend the time period for a state to assume the
responsibility for small projects, that have little or no environmental
impact, from a term of not more than three years, to a term of five
years.
AGC also has concerns about recent changes to the National
Environmental Policy Act (NEPA) in the Council on Environmental
Quality's (CEQ) Phase I rulemaking. These changes add bureaucratic
steps in an already onerous and slow process, require more time-
consuming analyses, increase litigation risk for project decisions, and
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.
Buy Clean
Under Executive Order 14057 and provisions of the Inflation
Reduction Act, federal agencies are looking at ``Buy Clean'' programs
that would force material/product choices based on embodied carbon
using Environmental Product Declarations (EPD). EPDs were initiated by
industry to present general information about the environmental
attributes of a product, including the carbon emissions associated with
its development.
While EPDs are a tool for measuring embodied carbon, they can be
varied in their approach, do not provide a full life cycle assessment,
and are not universal. In addition, EPDs have limited functionality for
making or comparing important design choices (such as for safety or
performance) or calculating the embodied carbon of an entire
infrastructure project--and/or comparing it to another project.
Buy Clean programs are new and have not been fully implemented even
in the limited states--including California--that have begun to utilize
them. Their impact on the supply chain is unknown. As is whether they
will require more staff to administer and change traditional roles
within the infrastructure development team--possibly resulting in new
professional services or roles for the general contractor (e.g., a new
environmental review akin to determining how to actually build a
project) and introducing risk.
AGC asks that Congress and the Administration allow for an
appropriate transition time to these new requirements and examine the
impacts that these new requirements could have on small and DBE
contractors and suppliers. The uncertainties associated with Buy Clean
programs could have serious implications if approached in a rushed/
haphazard manner. In addition, we ask that they work with industry to
implement these requirements. Recognizing the proactive role that
industry has played in the development and adoption of EPDs, AGC
encourages market-based incentives associated with embodied carbon.
Furthermore, the government should continue to include industry in the
EPD process moving forward, reward private sector innovation, and
recognize the importance of consensus-based processes for industry
standards.
IV. Support the Construction Workforce
State of the Construction Workforce
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
2022 AGC survey found 93 percent of construction firms report they have
open positions they are trying to fill. Among those firms, 91 percent
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.
About 21 percent of all total federal education funding goes to career
or workforce education with the majority going to traditional four-year
colleges.\12\ That is why AGC supports increased funding for Career and
Technical Education funding (Perkins Act.). Perkins is the primary
federal program for developing and supporting career and technical
education 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. And these
programs face rising inflationary pressure and lingering pandemic
impacts.
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\12\ https://opportunityamericaonline.org/
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The Jumpstart Our Businesses by Supporting Students (JOBS) Act of 2021
Last Congress legislation was introduced, Jumpstart Our Businesses
by Supporting Students (JOBS) Act of 2021, which is one legislative
initiative that could help make a tangible impact on this problem. This
bill would expand Pell Grants to all individuals seeking a career.
These grants provide billions of federal aid to over seven million
students in post-secondary programs of at least a semester in length.
Currently, Pell Grant eligible programs must be a full-time semester in
length which has largely limited student's ability to use Pell Grants
to pursue short-term career education programs. Emphasizing competency
and value of a program over instruction time metrics would allow for a
host of craft worker industry-recognized certificate programs to become
eligible for federal needs-based aid. I know many of you on this
Committee have cosponsored this legislation in the past and we thank
you for your support.
V. Conclusion
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.
This historic level of funding in our infrastructure when combined with
recovering from a global pandemic, addressing a supply chain crisis,
and implementing new federal requirements that were a part of the IIJA
has created challenges for those of us tasked with rebuilding our
infrastructure. But let me be clear, if Congress did not pass the IIJA,
the impacts on transportation contractors would have been significant
with likely a cut of 20-30 percent in projects by the states. I thank
the Committee for the opportunity to testify today. I appreciate its
continued efforts to help improve our nation's infrastructure and enact
policies that create good paying jobs in America. I look forward to
answering any questions you may have.
appendix
Figure 1 \13\
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\13\ (https://www.transit.dot.gov/research-innovation/status-
nations-highways-bridges-and-transit-condition-and-performance
https://www.fhwa.dot.gov/policyinformation/statistics/2018/fa10.cfm
https://www.fhwa.dot.gov/policyinformation/statistics/2019/
fa10.cfm)
Figure 2 \14\
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\14\ https://www.fhwa.dot.gov/policyinformation/statistics/2019/
sf12.cfm
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(Spending in Thousands)
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Graves of Missouri. Thank you, Mr. Firth.
Now we will move to Mr. Roger Guenther--did I get that
right?
Mr. Guenther. Yes, Chairman, that is correct.
Mr. Graves of Missouri. The executive director of Port
Houston. So, you are recognized.
TESTIMONY OF ROGER GUENTHER, EXECUTIVE DIRECTOR, PORT HOUSTON
Mr. Guenther. Thank you.
Good morning, Chairman Graves and Ranking Member Larsen and
members of the committee, it is a pleasure to be with you
today. And thank you, Chairman, for taking the time to come and
see our port late last summer to see what it is all about.
Again, my name is Roger Guenther, and I am the executive
director of Port Houston. The Houston Ship Channel serves the
largest port in the Nation, handling more waterborne tonnage
cargo than any other port in the United States, either by
annual tonnage as well as the number of ships, by a wide
margin. Our ship channel sustains more than 3.2 million jobs
each year and more than $800 billion in annual economic impact
for the United States.
Now, I can, and I will speak to the challenges and
opportunities specifically about Port Houston. I don't speak
for other ports, but I am quite sure there are similar issues
across the Nation.
Over the past 2 years, Houston has not been immune to the
challenges of a global supply chain that has been overwhelmed.
Our strong partnerships with labor and industry played, and
continue to play, a critical role in our ability to push cargo
through our terminals and accommodate the increase in cargo
share the gulf continues to experience.
Strained by unprecedented demand, we have seen firsthand
how critical each logistical segment of the supply chain is for
the efficient movement of freight. And I can tell you, the
seaports are one of those critical links.
As demand peaked, terminals became congested as import and
export cargo were limited by many, many factors, and container
facilities maxed out the capacity because they had no place to
go and nowhere to take them, so, they sat on our terminals. To
ensure a resilient supply chain and be prepared for future
demands, investment must be made in our Nation's seaports where
cargo continues to rapidly grow, and where private investments
are being made near ports, in distribution centers for imported
consumer goods and for manufactured goods that are exported,
like petrochemical products and agricultural commodities of the
like and, again, exported globally. As Congress provides money
for infrastructure, those resources should be focused on
Federal assets--the roads, the rails, the waterways--and
perhaps even nearby inland depots that are critical to serving
the fluidity of our Nation's ports.
I can give you an example of what is going on in Houston.
In 2022, as the U.S. container imports were flat, Houston grew
by 19 percent, and our exports were up 18 percent compared to
an overall decline in exports of 5 percent. That is container
imports and exports. To put it simply, Houston is an example
that is exponentially outpacing cargo growth around the Nation,
and we have had to speed up many projects to try to accommodate
this continued growth. And we cannot wait.
Ports are responsible for capital investments of their own
terminals, such as wharf improvements and facilities to
accommodate this growth. And we are making, as ports, those
improvements. But it must be a Federal priority and a Federal
obligation to make the capital investments on the waterside and
landside in our channels and highway infrastructure that serve
our Nation's ports to maintain the resiliency and fluidity
going forward. Houston, and ports most critical to the Nation's
economy, should be prioritized for infrastructure investments.
If not, the Nation's busiest supply chains are vulnerable to
disruption.
Another example: Houston Ship Channel has been underfunded
by 50 to 60 percent for operations and maintenance dollars over
the past several years, resulting in draft restrictions
throughout our channel. We have received 18 cents per ton of
cargo compared to the national average of 60 cents per ton of
cargo. Houston serves as the gateway for the gulf for many
global trade routes. Without an adequately maintained channel,
vessels must leave cargo behind at the port of origin, which
exacerbates the chain backups.
In Houston, we have been able to speed our deepening and
widening project, Project 11, by prefunding the first segments
of the dredging, shaving off already 5 to 7 years of a
traditional timeline. Each day earlier that we deliver this
project, which serves more than 200 waterfront facilities in
our own port, it generates $366,000 a day of economic impact to
the Nation. In the past few years, the Federal Government has
funded several other ports with Federal dollars to finish their
dredging projects to completion. Adding the Port of Houston to
that list would have enormous positive impact on the Nation's
economy.
As I mentioned earlier, each segment of the supply chain,
including the highways, rails, and those trades that support
them, are necessary, as my colleagues here at the table have
mentioned. And, Mr. Chairman and committee members, I applaud
your commitment to funding solutions to ensure we learn from
the past supply chain crisis and are well prepared to minimize
the next.
Thank you for your time today, and I am happy to answer any
questions that you have later.
[Mr. Guenther's prepared statement follows:]
Prepared Statement of Roger Guenther, Executive Director, Port Houston
Good Morning Chairman Graves, Ranking Member Larsen, and members of
the Committee. It is a pleasure to be with you today. My name is Roger
Guenther and I am the Executive Director of Port Houston. The Houston
Ship Channel serves the largest Port in the nation, handling more
waterborne cargo than any other port in the United States in terms of
both annual tonnage and number of vessel calls . . . by far. Our ship
channel sustains more than 3.2 million jobs and generates more than
$800 billion in annual economic impact for the United States.
I can, and I will speak to the challenges and opportunities
specifically about Port Houston. I don't speak for other ports but I'm
quite sure there are similar issues across the nation. Over the past
two years, Houston has not been immune to the challenges of a global
supply chain that has been overwhelmed. Our strong partnerships with
labor and industry played, and continue to play, a critical role in our
ability to push cargo through our terminals and accommodate the
increase in cargo share our Gulf region continues to experience.
Strained by unprecedented demand, we have seen first-hand how critical
each logistical segment along the supply chain has been to the
efficient movement of goods. Seaports are one of those critical links.
As demand peaked, terminals became congested as import and export
cargo were limited by many factors, and container facilities maxed out
capacity because cargo had no place to go and did not move. To ensure a
resilient supply chain and be prepared for future demands, investments
must be made in our nation's seaports where cargo continues to rapidly
grow, and where private investments are being made near ports, in
distribution centers for imported consumer goods and for manufactured
products and agriculture commodities that are exported globally. As
Congress provides money for infrastructure, those resources should
focus on federal assets--roads, rails, and waterways--or perhaps,
inland depots, that are critical to serving the fluidity of our
nation's ports.
I can give you an example of what is going on in Houston. In 2022,
as the US container imports were flat, Houston grew 19%. Our exports
were up 18% compared to the US overall declined 5%. To put it simply,
Houston is an example that is exponentially outpacing the cargo growth
around the rest of the nation, and we have had to speed up many
projects to try to accommodate this continued growth. We cannot wait.
Ports are responsible for capital investments of their own terminals,
such as wharf improvements and facilities to accommodate growth. And we
are making those investments. But, it must be a federal priority and
federal obligation to make the capital investments on the waterside and
the landside in our channels and highway infrastructure that serve our
nation's ports to maintain resiliency and fluidity going forward.
Houston, and ports most critical to the nation's economy, should be
prioritized for infrastructure investments. If not, the nation's
busiest supply chains are vulnerable to future disruption.
The Houston Ship Channel has been underfunded by 50%-60% for
operations and maintenance dollars over the past several years,
resulting in draft restrictions throughout the channel. We have
received 18 cents per ton of cargo compared to the national average of
60 cents. Houston serves as the Gateway to the Gulf for many global
trade routes. Without an adequately maintained channel, vessels must
leave cargo behind at the port of origin, exacerbating supply chain
backups. Therefore, if Houston is draft restricted, many of the other
Gulf ports effectively are as well. To remain in front of fluid
commerce, our federal dollars must go to maintaining the authorized
depth at our nation's most critical ports, like Houston. Vessels
continue to get larger and carry more cargo each year. We must be able
to accommodate them.
In Houston, we have been able to speed up our deepening and
widening project (Project 11) by pre-funding the first segments of the
dredging, shaving off about 5-7 years of a traditional timeline. Each
day earlier that we deliver this project, which serves more than 200
waterfront facilities, it generates $366,000 of economic impact to the
nation. In the past few years, the federal government has funded
several other ports to finish their dredging projects to completion,
and adding the Port of Houston to that list would have enormous
positive impact on the nation's economy.
As I mentioned earlier, each segment of the supply chain including
our highways, rail, and those trades that support them, are necessary
to make goods movement run smoothly and efficiently. As I am joined
here today by experts in those fields, I am sure they can shed more
light on those specific segments. Mr. Chairman and committee members, I
applaud your commitment to funding solutions to ensure we learn from
the past supply chain crisis and are well prepared to minimize the
next.
Thank you for your time today, and I am happy to answer any
questions y'all may have.
Mr. Graves of Missouri. Thank you.
Now we turn to Mr. Greg Regan, who is the president of
Transportation Trades Department, AFL-CIO. Thanks for being
here.
TESTIMONY OF GREG REGAN, PRESIDENT, TRANSPORTATION TRADES
DEPARTMENT, AFL-CIO
Mr. Regan. Good morning. Thank you, Chairman Graves and
Ranking Member Larsen, for inviting me to testify at this
committee's first hearing of this new Congress.
Mr. Graves of Missouri. You might pull your mic a little
closer.
Mr. Regan. Little closer.
Mr. Graves of Missouri. Yes.
Mr. Regan. I am Greg Regan, president of the Transportation
Trades Department of the AFL-CIO. I am speaking today on behalf
of 37 unions who build, operate, and maintain our Nation's
transportation systems, whose members are on the front line of
our freight network.
This hearing occurs at a pivotal moment. TTD has long
advocated for making generational and much needed investments
in infrastructure and transportation services to meet our
growing freight and passenger needs. Because of the
Infrastructure Investment and Jobs Act, there are already 7,000
projects underway that are putting Americans to work, that
includes 3,800 bridge projects, improvements to nearly 70,000
miles of roads and highways, and the largest ever dedicated
investment in our ports. These projects are creating jobs,
growing the economy, and strengthening supply chains in rural
and urban communities alike.
Just yesterday, the DOT announced the first round of Mega
grant recipients. And we learned that long overdue freight
needs are being met nationwide. This includes $250 million for
improvements to the Brent Spence Bridge, which facilitates $400
billion in freight movement annually. Another $150 million will
go to replace the I-10 Calcasieu River Bridge in Louisiana. And
that will include a workforce agreement to target jobs and
training opportunities to underserved communities.
Other IIJA investments in ports and rural communities will
improve the efficiency and reliability of our supply chain not
just in major cities, but also in communities like Tell City,
Indiana; Columbus, Mississippi; Sanford, North Carolina, and
many more. Cities and towns represented by every single member
of this committee will benefit from these investments.
These projects are not only helping to meet the demand of
our freight network through more modern and efficient
transportation infrastructure, they are also ensuring that
millions of workers will have higher wages and better benefits.
This economic opportunity is possible because of the Biden
administration's whole-of-Government approach to supporting
workers and creating good union jobs.
Coupled with the CHIPS Act, the IIJA will also ensure our
domestic manufacturing capabilities are resilient to sudden
shocks or rapid changes in the global economy. Policies like
Build America, Buy America in the law will significantly
increase domestic manufacturing of iron steel and other
manufactured goods. And the CHIPS Act will serve as an historic
boost to domestic advanced manufacturing.
But these investments and policies enshrined into our law
over the past 2 years are only part of the picture. If we are
serious about strengthening our national supply chain, we must
also address the fundamental and structural problems that
caused the crisis which cannot be not be solved through
investment alone.
Since the beginning of this pandemic, the most significant
supply chain challenges we faced were not the result of
inadequate infrastructure, but were largely due to business
decisions made by employers in key freight industries that put
profits over workers and consumers. Their decisions in the
years leading up to the pandemic were not driven by better
service but, rather, by shareholder concerns. Thus, they
rendered themselves completely unprepared for the stress the
pandemic placed on our own supply chain. Even as the system
came crashing down around them, freight companies continued to
rake in record profits while your constituents paid the price.
While my written testimony goes into much greater detail, I
would like to highlight just a handful of examples for the
members of this committee. In the years leading up to the
pandemic and during its onset, the freight rail industry
furloughed 45,000 rail workers, a staggering 30 percent of its
total workforce, not because these workers weren't needed, but
simply because the railroads wanted to maximize profits. When
consumer demands spiked, the railroads simply couldn't keep up
because they had already slashed their workforce and operating
equipment to the bone.
The trucking industry has complained of so-called workforce
shortages, but the truth is, they have slashed wages and
benefits and made working conditions so bad that workers who
would otherwise be interested in driving are simply looking
elsewhere. When our ports needed trucks and trains to move
cargo so they could offload ships, the capacity just was not
there.
Elsewhere in the airline industry, some are pushing the
same false narrative about workforce shortages with the goal of
reducing pilot training requirements and boosting profits. As
we prepare for an FAA reauthorization, we must reject any
efforts to go backwards on safety for any reason, least of
which being profit margins.
And in the maritime industry, the lack of a comprehensive
national maritime strategy has left our country subject to the
whims of the largely four known shipping conglomerates, since
we do not have the sealift capacity to meet our own export and
import needs. We can loosen this choke hold and increase our
competitiveness by supporting the construction and operation of
Jones Act vessels. Enabling U.S.-built, U.S.-flagged, and U.S.-
crewed feeder vessels to carry a portion of America's trade
will ensure a more resilient supply chain
Finally, pursuing a more efficient supply chain cannot be
an excuse to eliminate or weaken longstanding labor laws, such
as collective bargaining rights, fatigue protections, training
and qualification requirements, and others. Doing so would only
harm the workers that tirelessly keep the economy and the flow
of goods moving. But it is the dedication and expertise of
these workers, in addition to the investments that are
currently being made, that give me the confidence that we will
deliver a stronger and more resilient supply chain in the years
to come.
Thank you for inviting me, and I look forward to answering
your questions.
[Mr. Regan's prepared statement follows:]
Prepared Statement of Greg Regan, President, Transportation Trades
Department, AFL-CIO
On behalf of the Transportation Trades Department, AFL-CIO (TTD),
and our 37 affiliated unions, I thank Chairman Graves and Ranking
Member Larsen for inviting me to testify before the Committee today on
the current state of our supply chain. The employees represented by
TTD-affiliated unions are on the front lines of these challenges--
including the workers directly engaged in freight transportation at
railroads and ports and who work in industries that have struggled with
the down-economy effects of chokepoints and delays.
Since the beginning of the pandemic, many of the most significant
supply chain challenges we've faced as a nation are due to harmful
employer practices driven not to increase efficiency or deliver better
service but purely out of greed. These practices have degraded the
transportation and infrastructure workforce in every possible way and
upended the reliability of our freight network. And it is your
constituents who have paid the economic price for the decisions and
practices of these companies.
From rail and aviation to maritime and trucking, employers are
simply not investing in their employees. Nor are they investing in the
critical infrastructure on which our economy and communities depend.
The lack of investment from employers in their workforce and
infrastructure lies in stark contrast to the record federal investments
resulting from the historic, bipartisan Infrastructure Investments and
Jobs Act (IIJA). Transportation Labor has been sounding the alarm about
the severe consequences of slashing workforces in the freight industry
and investments in infrastructure long before the pandemic brought
these challenges squarely into the spotlight. I'm not sure how much
louder we can be at this point. And despite the fact that
transportation unions and their members have worked tirelessly to shore
up and improve our transportation network and systems, I'm sad to say
there are those who continue to try to blame the workers for supply
chain problems.
Labor unions, the workers they represent, and even this
administration--which signed the most consequential infrastructure and
domestic manufacturing bills in generations--have all been scapegoated.
Those who blame working people or this President for our supply chain
problems do so knowing their claims are hollow but advance their
narrative anyway to score cheap political points and shield themselves
from blame. The truth is, since the start of the pandemic, corporations
have vacuumed up massive, record-setting profits.
At the same time, they've opportunistically made it harder for
American families to get by. These companies charge obscene amounts of
money for goods, gouging the public and making it harder for everyday
workers to make a fair and honest living. That blame needs to be
focused where it's due: rampant corporate greed that prioritizes
already wealthy shareholders over everyday consumers, workers, and the
economic health of this country. That is the true reason our supply
chain has suffered and it's the reason American families have suffered.
It's time to rein in these practices and refocus our national goals on
helping working people get ahead. We urge all policymakers to do the
same.
Class I Freight Railroads Have Spent Years Undermining Their Workforce
and the Quality of their Service and Their Behavior Continues To This
Day
The supply chain crisis put a spotlight on components of the
freight network that were particularly ill-prepared for the demand
shock during the pandemic. Class I freight railroads were one of the
root causes of the crisis. Railroads made deep cuts to their workforce
and capital infrastructure, which has rendered them unable to meet
freight service demand, including the pandemic-era surge. These
problems continue in the freight rail industry to this day.
Class I railroads have moved away from the traditional operating
model of a service industry that responds to variable demand of its
customers. Instead, for the last eight years, the Class I railroads
have pursued an operating model known as ``precision scheduled
railroading'', or PSR. Under PSR, railroads supposedly operate on a
more regimented schedule. Put another way, instead of providing service
to shippers in a manner that fits their business needs, trains are
supposed to arrive at a ``scheduled'' time and it is then incumbent on
the shipper to be prepared to load or unload cargo. Further, by
eliminating on-demand response and flexibility in the construction and
quantity of freight trains, railroads can reduce capital assets like
locomotives and cars, and eliminate jobs across the network.
Unfortunately, PSR fails to provide neither precise nor regularly
scheduled service. The experience with PSR over the last eight years
proves that it is a failed operating model. It does not provide the
service rail customers need, has led to the elimination of thousands of
rail workers vital to the operations of these railroads, and ultimately
threatens the long-term viability of the Class I railroads.
Freight rail is of vital importance to our country's economy. It
accounts for around 40% of long-distance ton-miles and hauls one-third
of the country's exports.\1\ The supply chain challenges that arose
from the backlog of ships and containers at ports like the Ports of Los
Angeles and Long Beach were due in large part to capacity issues in our
freight rail system. Throughout the pandemic, many railroads self-
imposed ``service embargoes'' to limit the freight they would accept
from customers.\2\ These service embargoes have led to massive backlogs
of freight waiting to move by rail, including containers at ports that
the railroads were supposed to move.\3\
---------------------------------------------------------------------------
\1\ https://www.aar.org/wp-content/uploads/2021/03/AAR-Integrated-
Rail-Network-Fact-Sheet.pdf
\2\ https://www.bnsf.com/news-media/customer-notifications/
notification.page?notId=limited-embargo-of-certain-shipments-destined-
for-california and Union Pacific asks customers to meter traffic or
face embargoes--Trains
\3\ https://www.cnbc.com/2022/07/08/railroad-bottleneck-at-west-
coast-ports-reaches-inflection-point.html
---------------------------------------------------------------------------
Members of Congress from both parties and both Chambers have
repeatedly raised how the railroads' poor service is negatively
impacting their constituents and a wide array of businesses in
practically every sector of the American economy, including
agriculture, energy, mining, and chemicals.\4\ Just last month, the
Surface Transportation Board (STB), which is the federal agency that
regulates the economic aspects of the freight rail industry, held an
emergency hearing involving Union Pacific (UP) and one of its
customers, Foster Farms, because Union Pacific is not providing
adequate rail service to deliver corn feed to Foster Farms to prevent
millions of chickens from starving to death.\5\ It has taken two
emergency service orders from the STB to improve the situation. And
it's not just Foster Farms suffering. In 2017, UP had 27 service
embargoes. In 2022, UP had over 1,000 service embargoes, a tenfold
increase.\6\ 98% of the service embargoes in 2022 were attributed to
congestion on UP's rail network, which is entirely in the railroad's
control.\7\
---------------------------------------------------------------------------
\4\ See Finstad Leads Letter Urging Action on Union Pacific Rail
Service Delay--Press Releases--United States Congressman Brad Finstad
(house.gov); https://www.cramer.senate.gov/news/press-releases/sens-
cramer-baldwin-colleagues-press-surface-transportation-board-on-rail-
disruptions-urge-reliable-service-for-american-industries-shippers;
Rep. Ralph Norman & Rep. Jim Costa Lead Bipartisan Effort Concerning
Deficient Rail Service's Role in Fertilizer, Grain and Feed Shortage
Affecting American Farmers--U.S. Representative Ralph Norman
(house.gov)
\5\ https://www.wsj.com/articles/poultry-farm-says-millions-of-
chickens-could-starve-from-rail-delays-11673054052
\6\ See the November 22nd, 2022 Notice issued by the Surface
Transportation Board entitled: ``Oversight Hearing Pertaining to Union
Pacific Railroad Company Embargoes'', Docket No. EP 772. Accessed at
https://www.stb.gov/proceedings-actions/search-stb-records/.
\7\ Ibid
---------------------------------------------------------------------------
The rise in service problems and complaints from customers are not
affecting the railroads' bottom line, though. The Class I railroads
have achieved record profits--more than over $160 billion since 2015.
In nominal terms, these profits are more than even what the railroads
made at the height of their robber baron days in the 19th century.
Last week, Union Pacific announced that despite these service
challenges, or perhaps because of them, they still managed to make a
record profit in 2022 of $7 billion, up from $6.5 billion in 2021.\8\
CSX and Norfolk Southern (NS) also announced record profits in 2022 of
$4.17 billion \9\ and $4.8 billion \10\ respectively. The current trend
in the industry is clear: rail service gets worse, capacity and
workforce gets slashed, while the railroads make record profits year
after year and the American people and businesses pay the price.
---------------------------------------------------------------------------
\8\ https://www.up.com/media/releases/4q22-yearend-earnings-nr-
230124.htm
\9\ https://www.csx.com/index.cfm/about-us/media/press-releases/
csx-corp-announces-fourth-quarter-and-full-year-2022-results/
\10\ https://nscorp.mediaroom.com/2023-01-25-Norfolk-Southern-
reports-Q4-and-full-year-2022-results
---------------------------------------------------------------------------
To achieve these profits for their shareholders' benefit, the
railroads have stripped their rail networks of their human and physical
capital. Fundamentally, that is how PSR works--it seeks to make the
railroads and their shareholders the most money possible by achieving
the lowest possible operating ratios (a railroad's expenses as a
percentage of revenue).
Since 2015, the Class I railroads have collectively laid off 45,000
workers, which is the equivalent of 30% of their total workforce.
Simultaneously, the railroads slashed their investments in physical
infrastructure like railroad tracks and sold off or sidelined essential
equipment. For example, in its latest financial disclosures, UP stated
that since 2015 it had reduced its rail locomotive fleet by 11% and the
number of freight cars by 21% and only managed to keep 62% of its
remaining locomotives and 80% of its freight cars in service in
2021.\11\ Collectively, the four largest railroads in the United States
(BNSF, UP, NS, CSX) have cut $32 billion in capital expenditures since
2015 versus their expected 2015 baseline. These decreases do not
account for the inflation that has happened since that time, which
makes the decline in investment even worse.
---------------------------------------------------------------------------
\11\ UP: Annual Reports
---------------------------------------------------------------------------
That decline in private investment from the railroads is in stark
contrast to the $66 billion in record investments in freight and
passenger rail infrastructure in the IIJA. TTD urges Members of
Congress to consider this point with the seriousness it deserves. Not
only are the railroads driving up costs for Members' constituents back
home for the benefit of their shareholders alone, but now the American
people are being asked to further pad the profits of this industry with
their tax dollar supported federal investment. There is not a single
Member of Congress or American who shouldn't be outraged by this.
The bottom line is that the freight railroads are failing their
customers by not providing the level of service their customers need.
And the railroad CEOs admit that.\12\
---------------------------------------------------------------------------
\12\ ``I was a customer for a couple decades. Our customers don't
really love us.'' New CSX CEO Joe Hinrichs, September 26th 2022. See
New CSX CEO pledges to improve service and company culture--Trains
---------------------------------------------------------------------------
Both labor unions and the railroads agree that the first stepping
stone to better freight rail service is to hire more workers. It is not
physically possible to move the same amount of volume of goods with 30%
fewer workers. The railroads claim they are trying to hire more workers
but they have not made near enough progress. Employment levels as of
December 2022 across all the Class I railroads, except Canadian Pacific
(CP), are below their pre-pandemic levels.\13\ Most rail crafts are
also below their pre-pandemic levels, with maintenance of equipment and
stores employees more than 20% below pre-pandemic levels and train and
engine transportation employment levels currently 3% below pre-pandemic
levels.\14\ The one exception is executives, which are 5% above their
pre-pandemic levels.\15\
---------------------------------------------------------------------------
\13\ 49 CFR employment data, EP 770 employment data, and EP 724
service data that the STB collects. 49 CFR and EP 770 employment data
can be found in the Urgent Issues Employment Data report found at
https://www.stb.gov/reports-data/economic-data/employment-data/
#Urgent%20Issues%20Employment%20Data. EP 724 data can be found in the
Service Issues Data report found at https://www.stb.gov/reports-data/
rail-service-data/.
\14\ Ibid
\15\ Ibid
---------------------------------------------------------------------------
Furthermore, the railroads' training programs for new workers are
falling woefully short. In order to replace employees that have been
voluntarily or involuntarily separated from the railroads, there would
need to be more employees graduating from those training programs than
there are employees being separated. The Federal Railroad
Administration (FRA) conducted an analysis of Class I training data
from the last eight months of 2022. In six of the eight months, the
number of employees graduating from training programs did not keep up
with the number of employees separated from the four largest Class I
railroads (BNSF, UP, CSX, NS).\16\
---------------------------------------------------------------------------
\16\ The Surface Transportation Board started requiring these 4
Class I railroads to report this data in April 2022
---------------------------------------------------------------------------
While the railroads' targeted hiring campaigns and incentive
programs to boost the number of new hirings are certainly welcomed, the
ongoing exodus of highly-skilled and experienced rail workers who have
decades of knowledge and the resulting consequences greatly outweighs
the limited amount of new hiring the railroads have done.
TTD and its rail unions will continue to fight to address the
horrific conditions rail workers face on a daily basis like a lack of
paid sick leave \17\, draconian attendance policies \18\, increased
safety issues \19\, and an inability to get time off for medical
appointments that risk workers' health.\20\ Rail workers deserve paid
sick leave--it is the morally right and just thing to do. TTD and our
unions are forever grateful to the 221 House members and 52 Senators
last Congress who stood with the rail workers in their fight for paid
sick leave. We are equally as disappointed in those lawmakers who stood
with wealthy railroad CEOs at the expense of working people. However,
sick leave and the other problems mentioned above are symptoms of the
underlying disease, which is PSR. Even if these issues are addressed,
they will not wholly fix the fundamentally broken freight rail system.
The underlying freight railroad operating model needs to be changed in
order to restore a healthy freight rail system.\21\
---------------------------------------------------------------------------
\17\ For Rail Workers, Anger Persists Over Sick Leave--The New York
Times (nytimes.com)
\18\ Railroads' workplace attendance policies at the heart of labor
dispute--NPR
\19\ https://www.kansascity.com/news/business/article268941917.html
\20\ In rail strike showdown, death of worker helped stoke anger--
The Washington Post
\21\ https://ttd.org/policy/getting-our-nations-freight-rail-
system-back-on-track/
---------------------------------------------------------------------------
Since the freight railroads refuse to fix the mess they've created,
it is going to take action from Congress and federal regulators such as
the STB and the FRA to solve the problems that still exist in the
freight rail industry today that threaten not only our country's supply
chain, but our economy as a whole.
The long-term health of our freight rail industry, which impacts
our entire supply chain and economy, is in peril. TTD and the whole of
rail labor stand ready to work with every member of this Committee to
fix our once great freight rail system.
To Meet Demand in the Trucking Workforce, We Must Ensure that Trucking
Jobs are Good Jobs
Participants in today's hearing are likely to point toward the
purported ``truck driver shortage'' as a contributor to last year's
supply chain challenges and as the impetus for future legislative and
regulatory action. While there are certainly instances of trucking
companies reporting difficulties in hiring and retaining drivers, we
reject the notion of a workforce shortage out of hand. As discussed in
our April 2022 policy statement on the topic, there is no shortage of
workers. There is a shortage of employers offering good jobs that offer
people who are eager to work the dignity they deserve, and they are fed
up.\22\
---------------------------------------------------------------------------
\22\ https://ttd.org/policy/policy-statements/the-shortchanging-of-
labor/
---------------------------------------------------------------------------
It is incumbent on our partners in government to conduct a more
rigorous analysis of the practices in the trucking industry that drive
workers away from their jobs and make it harder and harder to keep pace
with demand. Shockingly, in recent years, the long-haul trucking sector
has experienced approximately 90% turnover on an annual basis. Yet,
according to a recent publication by the American Trucking Association,
``high turnover is an indicator of driver empowerment'' and not a
blaring alarm necessitating self-reflection on industry practices.\23\
I cannot imagine a more flippant response to this problem of their own
making.
---------------------------------------------------------------------------
\23\ https://www.trucking.org/news-insights/truth-about-trucking-
turnover
---------------------------------------------------------------------------
While a convenient political narrative for the industry, it is a
woefully incomplete understanding of the economic and quality of life
issues facing the nation's truck drivers. Long hours, time away from
home, rampant misclassification of drivers under labor law, predatory
vehicle leasing schemes, and inadequate real wages all serve to
discourage new drivers from entering the industry and making a career
of driving.
In short--Congress should focus its efforts on fundamental changes
to the industry that improve the quality of jobs and working conditions
and promote economic fairness. The answer will not be found in reducing
licensure or training standards, including irresponsible efforts to
address ``shortages'' of unsafe teenage drivers. The answer is
similarly not found in allowing companies to overwork drivers through
hours of service expansions or encouraging and protecting predatory
employment models.
To this end, we commend the Biden administration's swift actions
last year to implement its Trucking Action Plan, including the
expansion of registered apprenticeships as a high-quality and proven
recruitment and retention strategy and allowing these programs to be
stood up rapidly.
Keys to Developing a Healthy Supply Chain in the Longshore and Maritime
Sector
Despite the pandemic's challenges, our nation's ports are clear of
supply congestion and mostly back to pre-COVID levels. At this time
last year, there were more than 100 container ships stuck waiting off
Los Angeles and Long Beach, California ports, with around 150
containers from all North American ports combined. Today, almost zero
ships are waiting off the Pacific and very few off the East and Gulf
coasts. Remember that there were never issues at our ports, but
instead, more capacity was needed on the rail and trucking side once
containers were offloaded. Longshore workers' productivity shattered
records throughout the pandemic, and rail and trucking infrastructure
couldn't keep up the same pace.
Additionally, the international ocean shipping industry is
dominated by foreign-owned companies that have greatly increased their
profits during the pandemic. The consequences of the U.S.' dependence
on foreign vessels and foreign goods greatly affect American
agricultural cargo and our manufacturing exports.
Transportation Labor believes the key to developing a healthy
supply chain is the continued application of the Jones Act to the
movement of waterborne commerce in the domestic trades and the greater
utilization of U.S.-flagged and U.S.-crewed vessels in America's
foreign trades. The United States needs greater self-reliance in ocean
shipping and must act with urgency to reverse the dangerous dependency
on foreign flag vessels to carry more than 98 percent of America's
exports and imports. Because our domestic maritime industry has
dedicated terminals, equipment, and longstanding partnerships in U.S.
ports, Jones Act vessels have been able to deliver goods without the
outsized increases in freight rates, disruptions, and service
challenges wrought by foreign cargo vessels during the pandemic.
Without the Jones Act, domestic waterborne commerce would similarly be
controlled by foreign vessels. We've seen the ramifications play out
throughout the pandemic as almost all global ocean freight shipping is
controlled by foreign companies that have raised prices for American
businesses and consumers while threatening our national security and
economic competitiveness.
TTD urges Congress and the administration to fully enforce, fund,
and enhance the policies and programs necessary to support the
operation of U.S.-flag vessels in the foreign trades. This will ensure
that a greater portion of America's trade will be controlled by
American vessels and their American crews, lessening the opportunity
for foreign flag vessels to dictate the terms and conditions governing
ocean transportation. This will also reduce the serious maritime
seagoing workforce shortage caused in large measure by the pandemic and
help guarantee that this segment of the maritime industry will remain
available to provide the commercial sealift readiness capability relied
upon by the Department of Defense. We also call on Congress and the
Administration to take the necessary steps to facilitate the
construction and operation of Jones Act vessels as part of a new,
expanded marine highway system along America's coasts. Creating a fleet
of U.S.-built, U.S.-flagged, and crewed feeder vessels to carry a
portion of America's trade along our coasts to be offloaded in
underutilized ports for transportation by truck and rail to their
ultimate inland destination will not only strengthen the maritime
industry and create jobs aboard ship and in our ports but will help
mitigate against future shipping supply chain disruptions.
The US Aviation Sector Should not be Undermined by Unfair Foreign
Practices
Often overlooked in these discussions is the amount of freight
cargo moved by aviation in America every year. Last year, it was
16,047.526 million in revenue ton-miles \24\. Therefore, we must also
work to ensure that our aviation sector remains competitive and is not
undermined by unfair foreign practices. For example, as air travel
resumes internationally, the U.S. government should consider the
substantial competitive and safety issues posed by a resumption of
flying by Chinese air carriers. China suspended its bilateral air
services agreement with the United States and has dictated the terms
for U.S. carrier operation in the region, including the draconian
treatment of U.S. flight crew. We urge the federal government to pursue
a phased approach to flight restoration, a focus on crew treatment and
ensure that the lack of U.S. airline use of Russian airspace does not
place our carriers at a disadvantage.
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\24\ https://www.transtats.bts.gov/freight.asp?20=E
---------------------------------------------------------------------------
Strengthen American Manufacturing and Supply Chain Resiliency to Boost
our Economic Competitiveness
We commend the administration and President Biden on signing an
Executive Order (EO) in January 2021 that tasked the U.S. government
with using federal financial assistance awards and procurements to
maximize production in the United States. The EO will require a new
domestic manufacturing initiative to strengthen U.S. manufacturing
exports and is essential to building long-term resilience across
critical supply chains, especially as the government implements the
IIJA, our country's most significant investment in modernizing the
transportation systems on which our supply chains depend. The IIJA
includes an expansion of Buy America rules that were supported for
years by this committee, paving the way for the inclusion of the Build
America, Buy America (BABA) Act in the IIJA. BABA enhances DOT's
existing Buy America requirements by applying domestic content
preferences for iron, steel, manufactured products, and construction
materials to all federal aid assistance infrastructure projects.
TTD has expressed concerns with DOT's pace of implementation, given
that it has been over a year since the IIJA was enacted and over eight
months since the BABA statutory implementation deadline on May 14,
2022. TTD has expressed concerns with DOT's proposed adoption of new
general waiver policies that would carve out large amounts of federal
infrastructure money from the BABA requirements. These investments have
been necessary for many years, and America's factory workers are ready,
willing, and able to meet the country's needs if given the opportunity.
Congress was clear that the era of flagrant misuse of waivers and
egregious loopholes was over. The law intended to enhance Buy America,
not weaken existing policies. We urge the committee and administration
to ensure the durability of these landmark provisions is appropriately
implemented.
In addition to the EO, the CHIPS and Science Act passage last year
was another historic win for American workers and our economy, adding
more resiliency to America's supply chain. The legislation is a
necessary long-term investment to ensure America maintains an edge
abroad and will revitalize domestic manufacturing and workforce
development at home. But unless there are strong worker protections to
ensure high-quality jobs with a free and fair choice to join a union,
the tens of billions of dollars in taxpayer investments in
semiconductor factories will amount to a blank check to Big Tech. These
federal investments need to be tied to binding and enforceable
commitments to workers and communities to make sure the economic
benefits are shared broadly and equitably and can strengthen the middle
class by creating high-quality union jobs.
Long Overdue Investments Made by Congress is Already Making a
Significant Difference
Finally, we must acknowledge the powerful impact the IIJA has
already had--and will continue to have for years to come--as we make
generational and long overdue investments across our entire
transportation network, including key bottlenecks for the movement of
goods. Already, there are 7,000 IIJA projects underway. That includes
3,800 bridge projects, improvements to nearly 70,000 miles of roads and
highways, and the largest-ever dedicated investment in our ports.
Just this week, the DOT announced $1.2 billion from the new
National Infrastructure Project Assistance (MEGA) discretionary grant
program for nine projects across the country. These projects will
create jobs, grow the economy, strengthen supply chains, improve
mobility for residents, and make our transportation systems safer for
all users. These desperately needed federal investments are not
cynically red state or blue state projects for the sake of political
expediency. They are being made wherever the need is most significant.
Consider the importance of the following projects for today's hearing:
$250 million for Brent Spence Bridge improvements
(Cincinnati, OH, and Covington, KY): This critical freight corridor
over the Ohio River sees over $400 billion in freight movement annually
and is among the worst truck bottlenecks in the nation. The MEGA award
is in addition to a $1.38 billion Large Bridge Grant that was announced
in early January. Together, this generational investment will support
critical improvements to the Brent Spence Bridge and fund construction
of a new bridge alongside the existing bridge to relieve congestion and
improve travel time reliability--supporting the regional economy.
$150 million to replace the I-10 Calcasieu River Bridge
(Calcasieu Parish, LA): The existing bridge, constructed before the
Interstate Highway System, is structurally and functionally deficient,
resulting in significant freight bottlenecks, despite its location on
one of the most important domestic freight highway corridors. The new
bridge will relieve congestion and improve regional mobility, supply
chain efficiency, and safety. What's more, a workforce agreement will
be created for the project that includes ways to target jobs and
training opportunities to underserved communities.
The IIJA is also making historic investments in our coastal
seaports, Great Lakes ports, and inland river ports, helping improve
supply chain reliability through increased port capacity and
resilience, more efficient operations, reduced port emissions, and new
workforce opportunities. Together, these investments will help get
goods to shelves faster and lower costs for American families. These
investments will benefit small and large ports alike in many of your
communities back home. Consider just one example: $1.6 million for the
Ohio River Pier Project in Tell City, Indiana. This small port provides
pig iron to the local foundry that helps sustain 1,000 jobs in a town
of around 7,000 people. The project will fund construction of a 40-foot
diameter pier for a crane that will be used for direct barge-to-truck
unloading of cargo. Currently, when the river is too high, the pier
cannot operate. The new design will allow the crane to operate
regardless of water levels. This will have a significant economic
impact for this small town and will help move goods faster and cheaper.
I also want to highlight the funding in the rural grant program,
which is just one part of the IIJA's commitments to rural America and
will play a significant role in improving our supply chain in every
corner of this country. Smaller communities have some of the greatest
needs when it comes to better roads, bridges, and other infrastructure
needs. Projects like the I-64 Widening Project in Kent County, Virginia
will add a third lane in each direction, widen shoulders, add rumble
strips, and add wider and flatter clear zones in each direction of I-
64. These investments will improve safety, efficiency, and reliability
along what is known as the I-64 Innovation Corridor, supporting access
to more than 1 million jobs in the region.
Other discretionary grant investments--like those being made in the
INFRA and RAISE grant programs--and funding through formula grants are
finally working to meet the demand that has gone unmet for far too long
in this country across our entire transportation network. While I know
some of you did not support the IIJA, I hope you will reflect on the
benefits it is delivering to your communities and that we can work
together regardless of political affiliation in the future to ensure
that we don't find ourselves once again dealing with the effects of
underinvestment in all of our communities.
Looking Ahead
As Congress and the administration continue to work to solve the
ongoing challenges and prevent future interruptions of this magnitude,
we call on you to work closely with supply chain employees and their
union representatives across the nation to develop long and short-term
solutions to the supply chain crisis.
We also call on you to reject ill-conceived efforts to hijack the
crisis to attack supply chain workers and their industries. Pursuing a
more efficient supply chain cannot be an excuse to eliminate or
deconstruct critical regulatory safeguards, such as fatigue
protections, or to water down carefully crafted training and
qualification requirements. In particular, we strenuously oppose
legislation that seeks to amend long-standing labor law to deny
collective bargaining rights. Transportation labor views any such
efforts as an unwarranted and deeply misguided assault on employees in
the supply chain who continue to work tirelessly to keep the economy
and the flow of commerce moving.
TTD thanks the Committee for the opportunity to testify today on
the state of our supply chain. We look forward to continuing to work
together to foster more resilient freight transportation industries
well into the future.
Mr. Graves of Missouri. Thank you very much.
Now we will open it up for questions from the committee. We
will start with Mr. Crawford.
Mr. Crawford. Thank you, Mr. Chairman.
I ask unanimous consent to submit a letter for the record
from The Fertilizer Institute on their concerns about supply
chain challenges.
Mr. Graves of Missouri. Without objection, so ordered.
[The information follows:]
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Corey Rosenbusch, President and CEO, The Fertilizer Institute,
Submitted for the Record by Hon. Eric A. ``Rick'' Crawford
February 1, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, 2167 Rayburn House
Office Building, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, 2164 Rayburn House
Office Building, Washington, DC 20515.
Via Electronic Mail
Re: Hearing on ``The State of Transportation Infrastructure and Supply
Chain Challenges''
Dear Chairman Graves and Ranking Member Larsen:
Thank you for holding today's hearing regarding ``The State of
Transportation Infrastructure and Supply Chain Challenges.'' The
Fertilizer Institute (TFI) appreciates the opportunity to share
information on what has been an extraordinarily challenging couple of
years for fertilizer shippers.
TFI represents companies that are engaged in all aspects of the
fertilizer supply chain in the United States. The fertilizer industry
ensures that farmers receive the nutrients they need to enrich the soil
and, in turn, grow the crops that feed our nation and the world.
Fertilizer is a key ingredient in feeding a growing global population,
which is expected to surpass 9.5 billion people by 2050. Half of all
food grown around the world is made possible through the use of
fertilizer, hence its importance to farmers and food production. The
U.S. fertilizer industry generates more than $130 billion in economic
benefit each year and supports approximately 487,000 American jobs.
In terms of logistics, virtually every mode is critical. Fertilizer
moves year-round. Although there is a two- to three-week window when
most crops are planted and fertilized, continuous production and
transportation to storage locations throughout the year is necessary to
ensure sufficient supplies during application periods. While the
timeliness of shipments is more sensitive in the Spring planting
season, the volume of shipments is virtually the same each quarter of
the year. The transportation of fertilizer from producer to storage to
farmer can involve truck, barge, pipeline, rail or some combination of
two or more modes. In terms of ton-miles, 63% moves by rail; 15% by
truck; and 17% by barge. While it moves shorter distances by truck, all
fertilizer touches a truck at least once in its journey to the farm.
For ammonia--a critical fertilizer and building block for three-fourths
of all fertilizers--60% of ton-miles move by pipeline.
There have been several bipartisan successes of recent years that
Congress should build upon. The bipartisan Infrastructure Investment
and Jobs Act provided crucial investments for roadways, inland
navigation, and rural broadband. Last year, Congress approved the Water
Resources Development Act of 2022, which among other priorities,
permanently modified a cost-share change to promote enhanced funding
for critical inland navigation projects. Congress also acted to prevent
a rail network shutdown, which would have devastated our economy.
TFI urges Congress to consider the following infrastructure
priorities.
Rail Policy: While a rail strike would have been
catastrophic, rail service was also highly problematic last year. Rail
carriers must do better, and they can start by hiring more employees so
they can reasonably comply with their common carrier obligation (CCO).
Rail shippers typically do not have any competitive options. Promoting
rail competition is a sensible market-based incentive to encourage a
more customer-focused industry that currently enjoys grossly unbalanced
market power. Congress should consider clarifying the CCO and it should
support the Surface Transportation Board as it modernizes its outdated
oversight.
Motor Carriers: The fertilizer industry relies on
commercial drivers for ``just in time'' delivery to their farmer
customers. Trucking capacity is a serious challenge. The vaccine
mandate on transporters of essential commerce should be eliminated.
Driver apprenticeship programs should be promoted. Hours of service
(HOS) regulations should be streamlined and reformed. Capacity can also
be improved through efficiency gains. For example, the current Gross
Vehicle Weight (GVW) limit for Federal Interstate Highways of 80,000
lbs. on 5 axles was established in 1982, prior to the standardization
of anti-lock brakes and other roadway safety improvements. Outdated
weight restrictions make U.S. farmers and businesses less competitive
and require MORE trucks to travel on roadways to haul the same amount
of goods, making matters worse for infrastructure wear-and-tear and
trucking capacity (driver shortage).
Waterways: One-fifth of fertilizer movements rely on
inland navigation while exports of agricultural goods comprise 20
percent of farm income and support more than 1 million jobs. Our
nation's locks and dams are in urgent need of maintenance and
modernization. Most locks and dams were built in the 1920s and 1930s
and have far exceeded their 50-year design lifespan. In the past
decade, there has been a 700 percent increase in unscheduled stoppages
for repairs.
Pipelines: The U.S. pipeline system in the United States
is critical to fertilizer manufacturers. Currently there are two
ammonia pipelines in the United States. Manufacturers utilize pipelines
to transport anhydrous ammonia from production facilities to high-
utilization regions in the corn belt and from the Port of Tampa to
phosphate production facilities in Florida. Ammonia production
facilities also utilize substantial volumes of industrial natural gas
for power and as a feedstock for ammonia production. Pipelines are also
important for sequestration of carbon dioxide, which is increasingly
being utilized to decarbonize production of ammonia.
Critical Infrastructure and Unmanned Aircraft Systems
(UAS): The Federal Aviation Administration (FAA) should promote safe
deployment of UAS, but it must also ensure our nation's critical
infrastructure facilities, including fertilizer production facilities,
are protected from unauthorized UAS activity. The federal government
should have clear guidelines to protect our nation's critical
infrastructure facilities and FAA should coordinate with the Department
of Homeland Security (DHS) to promote swift and effective responses to
unauthorized UAS activity.
Thank you again for holding today's hearing and for the opportunity
to submit this statement. TFI looks forward to working with the 118th
Congress. Should you have any questions, please reach out to Justin
Louchheim of my staff.
Sincerely,
Corey Rosenbusch,
President and CEO, The Fertilizer Institute.
Mr. Crawford. Thank you, Mr. Chairman.
I thank the panelists for being here today. I want to start
with you, Mr. Spear. Looking back at the COVID-19 pandemic, in
your estimation, what could the Federal Government have done
better to manage the public health concerns, at the same time
maintaining the continuity of our supply chain?
Mr. Spear. How much time do you have?
Mr. Crawford. Yes.
Mr. Spear. Seriously, I think--look, it is our first time
all of us together dealing with a global pandemic. I mean,
there were a lot of things thrown at our country, our economy,
our industry that we had to adjust to very quickly in order to
make certain that store shelves had milk, eggs, bread; gas
stations had fuel. It then became the rush to get PPE, test
kits, certainly the vaccine itself. That was moved largely by
truck.
And our industry stepped up to the plate when a lot of
people stayed at home not knowing what impact this would have
on their health, their family's health, real concerns. And
isolated in the cab, with those risks still in their minds,
they still got in the cab, they still drove those loads to
where they needed to be. They were the glue, certainly in the
early weeks and months of the pandemic.
And I think the inclusiveness of Government and industry to
solve problems of this magnitude is absolutely essential. I can
point to things where we had a lot of conflict between our
Government and the Government of Canada. And our inability to
match bearings with public safety and health policy to get our
trucks across the line, their largest trading partner. We are
dependent on one another. And it just took two governments
sitting down to hammer that out, and they didn't do it.
So, that is leadership. And I am not pointing fingers. It
is just a reality that has an impact, on an industry like ours,
to serve the populous, to serve society on the basic needs that
they have to have.
I think that, when we looked at the OSHA announcement to
require vaccines for employers with more than 100 employees,
and my background coming off Senate Labor Committee, OSHA at
DOL, we knew, my team and I, that they did not have the
authority to do that. We did not want to go to court. That was
something that we certainly could have sat down and worked out
but would have ended up litigating it. It went to the Supreme
Court, 6-3 decision, you know the outcome. A lot of wasted time
on issues that we really should be sitting down and working
collectively toward.
But I can also point to a lot of good that came out of it
as well. I drove many instances across the country. We have a
home in Wyoming. Seeing those billboards out in the cornfields
thanking a trucker, seeing the banners fly off the overpasses,
our drivers getting off an interstate and being met by a police
officer to escort them to where they can get a hot meal and a
shower. Girl Scouts, Boy Scouts, church groups handing out
baked goods at rest areas. Our image climbed to a level not
even known possible.
Mr. Crawford. On that note, Mr. Spear, I would say that you
did this at a time when the trucking industry was suffering and
continues to suffer through a massive driver deficit.
Mr. Spear. Yes.
Mr. Crawford. And on that note, I share your support as you
outlined in your testimony, make it easier for our constituents
to choose a career in the trucking industry, such as ensuring
that 18- to 20-year-old drivers have a CDL, can work across
State lines. I know you have been supportive of that in the 3-
year pilot program that was included in the IIJA.
How is that implementation going?
Mr. Spear. It is like everything in this town: slow, slower
than we would like. But we have grown accustomed to it. I do
think this program is going to bear fruit. We worked really
hard in this committee to create a bipartisan understanding of
this block of talent, 18 to 20. But I am also mindful, as you
understand, that 49 States already allow an 18-year-old to
drive a class 8, they just can't cross State lines. Now, that
works pretty good from Redding, California, down to San Diego.
Twenty minutes outside of Providence, Rhode Island, not so
much.
What we need to do is have good training and technology.
None of the 49 States do that. This program that was put into
the IIJA does. So, we need to teach young talent how to safely
and responsibly operate this equipment. Inserting an issue like
forward-facing cameras, that was not part of the deal. That was
not in the bill. And it is going to cause--that is a matter, by
the way, that most companies and their employees should
negotiate out. Having a camera in your face every minute of
every hour of every workday, that is not in the bill, and it is
going to limit companies from joining this program and putting
young talent in a capacity where they can replace our aging
workforce.
So, this is a concern. Oversight is needed. I applaud you
for shedding some light on this. We need to follow the law that
you handed the agency. And so, that is one area where I think
it is going to serve as a bit of a headwind in getting this
program off of the ground.
Mr. Crawford. I appreciate it. My time has expired.
Thank you, Mr. Chairman.
Mr. Graves of Missouri. Thank you.
Mr. Larsen.
Mr. Larsen of Washington. Thank you, Mr. Chair.
First question is for Mr. Spear. First, I want to recognize
on page 2 in your testimony in paragraph 3, your recognition
that this debt limit debate could have existential threats to
our economy and certainly to spending on investments on our
infrastructure, if infrastructure spending gets wrapped up in
this debate. So, I want to recognize that.
My question, though--and I am going to put up a graphic
here, if I could have the staff put up the graphic.
So, in your testimony, on page 5--it will get there--on
page 5, you note the December 16, 2021, memo from the DOT and
your concerns that the guidance will force money into fixing
infrastructure first as opposed to highway expansion. This
graphic does show in fiscal year 2021, about $8.1 billion--this
is Federal Highway Administration numbers--$8.1 billion in 2021
to highway expansion or reducing congestion.
[Slide shown.]
Slide Submitted for the Record by Hon. Rick Larsen
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Mr. Larsen of Washington. The memo comes out. The fiscal
year 2022 number is about 25 percent higher. It is not lower.
It is not an indication that the memo had much of an impact, if
any impact at all, in the State's ability--any State's ability
to invest in expansion or reducing congestion. And then we have
4 more years left on the BIL.
So, if you could help me understand the basis of your
argument when at least the early numbers show that is not the
case. Now, I will say, the jury is still out, but right now, I
think you ought to take a plea deal on your argument.
Mr. Spear. Well, I appreciate that. I am not there yet.
Candidly, I think this is trending. It is encouraging, but it
also begs the question: Why have the memo at all? Why have the
memo at all? Why do we have to draw lines between new and
existing infrastructure?
The emphasis and concern that we have is, within the top
100 bottlenecks, which we provide you every year, we track it
every year based on GPS data, shows by speed where are the
worst bottlenecks. Start with that and let's address them.
What we don't want to have is really nice roads and
bridges, and we are still sitting on them going nowhere. We
need truck lanes. We need parking. We need new bridges. We need
more capacity to move the freight. We are burning fuel, and we
are emitting CO2 just sitting there. That is the concern. If
this trends continues, I can see that being resolved, but I
don't see any need for the memo.
Mr. Larsen of Washington. And I think that is a fair
concern. When you look at the competitive grants the
administration has included with regards to highway expansion,
in 2022, $225 million through the RAISE program, $1.3 billion
through the Mega, INFRA, and Rural grant programs were awarded
that include highway expansion as well. So, it does seem to be
headed that way.
And, Mr. Firth, good friends who are members of the AGC in
Washington State, so, this is certainly not an anti-Oregon
question. I want to clarify that immediately for you.
But given these numbers and the AGC's argument on highway
expansion versus--in Washington State, we call fix it first
preservation and maintenance. I believe we actually do need to
preserve and maintain our existing infrastructure, as well as
invest in new infrastructure.
Can you address what you see in these numbers and what AGC
might respond?
Mr. Firth. Yes. This is the first time I have seen these
numbers.
Mr. Larsen of Washington. Sure, I understand.
Mr. Firth. But 80 percent of the funding is already on fix
and repair of existing infrastructure and everything. And the
way I look at it is, our infrastructure is over 50 years old
and it needs to be repaired. And I think having States having
that flexibility to decide what is best for their process or
what their needs are will be good. Having a one-size-fits-all
policy I don't think is very practical.
As I was flying yesterday from Oregon over, and I am flying
over Montana and South Dakota, and I am just thinking of what
their needs are versus Oregon or Washington's.
Mr. Larsen of Washington. Yes. Sure. Well, I appreciate
that. In Washington State, 21 percent of our transportation
package the past year was funded through the IIJA over the next
several years. And Washington State tends to use that money for
preservation and maintenance because we have the third highest
gas tax in the country. Now, we are tied for lowest income tax
in the country as well, zero. So, there is a tradeoff. That is
our particular experience. But I think the numbers are starting
to show that the memo is having no impact. So, maybe there is a
concern about why it was issued at all, but still I think the
concerns being expressed don't really seem to yet match the
reality.
With that, I yield back.
Mr. Graves of Missouri. Mr. Webster.
Mr. Webster of Florida. Thank you, Mr. Chairman.
Mr. Guenther, does the port have any problems dealing with
permitting or other forms of restraint when you are trying to
upgrade or maintain your infrastructure?
Mr. Guenther. Regarding our channels that I spoke about,
obviously those are Federal projects, and we are the non-
Federal sponsor working with the Corps of Engineers to get
those going. We need to--those are the investments that I am
talking about that we need to do.
As far as permitting for our ports, seaports that we invest
in, the ports are investing in, our dollars, permitting is not
an exorbitant amount of strain on that relationship there. But
we need to focus on the moneys that are allocated to the Corps
of Engineers from the Federal Government to make sure that we
are moving forward with these projects and so that we stay
ahead of what these needs are for serving our seaports with
deeper and wider channels, and maintain channels, the
maintenance of those channels to deliver the goods.
Mr. Webster of Florida. So, is there something Congress
could do to speed up--I know the Corps is sometimes hard to
move--but we could speed up or help with those, or is there
some funding issue or other things that need to be done in
order to get the channels open?
Mr. Guenther. Sure. And we really focus on, again, the
operation and maintenance funding. For instance, the Houston
Ship Channel hasn't been at its authorized depth and width that
it was authorized for for many years due to the lack of
operation and maintenance funding. It typically takes, in our
channel, for instance, $50 million, $60 million a year to keep
it properly maintained, and we get far less than that--the
Corps gets far less than that to put in their work plan to keep
it maintained.
And we are in that situation now that we have been
underfunded for years, and we are about to a point where we are
going to become draft restricted again, which we have been in
the past. And what that means, it puts a tremendous burden. The
vessels are light-loaded. It puts more cost on the goods that
are to be shipped, and it is passed along to the consumer
ultimately.
So, I would stress the emphasis on making sure that our
channels that are most critical in terms of tonnage in serving
the supply chain, make sure that those channels are funded for
operation and maintenance.
Mr. Webster of Florida. So, what depth are they approved
to?
Mr. Guenther. Well, our particular channel, we are
authorized to an operating depth of 45 feet. Without going into
detail, typically they will have some advanced maintenance on
that. But several times--and we are about to get to that point,
because there is not enough money in the Corps work plan right
now to maintain the channel, that we are about to be draft
restricted, probably as early as March.
Mr. Webster of Florida. So, what is the depth you are at,
then, that you get to?
Mr. Guenther. Well, it is at 45 feet, but as the channel
silts up, it is going to be restricted to maybe a foot or two.
And a foot is a tremendous amount of cost to the 9,000 ships
that come and go in the Houston Ship Channel every year that
are restricted.
Mr. Webster of Florida. So, the idea is just more dredging?
Mr. Guenther. Yes. Directing operation and maintenance
funds to our channels.
Mr. Webster of Florida. Thank you very much. I yield back.
Mr. Graves of Missouri. Eleanor.
Ms. Norton. Thank you very much, Mr. Chairman.
First, I would like to submit into the record a letter from
the Advocates for Highway and Auto Safety that outlines
important issues of trucking safety.
Mr. Graves of Missouri. Without objection.
[The information follows:]
Letter of January 31, 2023, 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 31, 2023.
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:
As you prepare for tomorrow's hearing, ``The State of
Transportation Infrastructure and Supply Chain Challenges,'' Advocates
for Highway and Auto Safety (Advocates) urges you to prioritize safety
in policies and legislation involving our nation's roadway
infrastructure, commercial motor vehicles (CMVs) and the supply chain.
We respectfully request this letter be included in the hearing record.
Fatal Truck Crashes Continue to Occur at an Alarmingly High Rate
In 2021, over 5,600 people were killed in crashes involving a large
truck.\1\ Since 2009, the number of fatalities in large truck crashes
has increased by 66 percent.\2\ Additionally, nearly 147,000 people
were injured in crashes involving a large truck in 2020.\3\ New data
finds that in the first six months of 2022, traffic fatalities in
crashes involving at least one large truck are up 10 percent; 2,811
people were killed.\4\ 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.\5\ When adjusted solely for
inflation, this figure amounts to over $156 billion.\6\
---------------------------------------------------------------------------
\1\ Traffic Safety Facts: Crash Stats; Early Estimates of Motor
Vehicle Traffic Fatalities and Fatality Rate by Sub-Categories in 2021,
NHTSA, May 2022, DOT HS 813 298.
\2\ Id. and Traffic Safety Facts 2019: A Compilations of Motor
Vehicle Crash Data, NHTSA, Aug. 2021, DOT HS 813 141. Note, the 66
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 2021, it increased by 20 percent.
\3\ Traffic Safety Facts, 2020 Data: Large Trucks, NHTSA, Apr.
2022, DOT HS 813 286.
\4\ National Center for Statistics and Analysis. (2022, December).
Early estimates of motor vehicle traffic fatalities and fatality rate
by sub-categories through June 2022 (CrashStats Brief Statistical
Summary. Report No. DOT HS 813 405). NHTSA.
\5\ 2022 Pocket Guide to Large Truck and Bus Statistics, FMCSA,
Dec. 2022, RRA-22-007.
\6\ CPI Inflation Calculator, BLS, available at https://
www.bls.gov/data/inflation_
calculator.htm.
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Weakening Essential Safety Regulations Endangers Truck Drivers and the
Public
Issues involving the nation's supply chain have highlighted
problems that members of the trucking industry have not effectively
addressed for decades including high turnover rates for drivers and
poor working conditions. 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. 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.\7\
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\7\ FMCSA Document ID: 2000-84100-0782. American Trucking
Associations, Truck Driver Shortage Analysis 2015 (Oct. 2015).
---------------------------------------------------------------------------
The trucking industry continues to face a driver retention crisis,
not a driver shortage. In fact, a March 2019 U.S. Bureau of Labor
Statistics (BLS) analysis found that ``the labor market for truck
drivers works about as well as the labor markets for other blue-collar
occupations'' and ``a deeper look [at the truck industry labor market]
does not find evidence of a secular shortage.'' \8\ Rather, industry
data shows driver turnover at some carriers is near 90 percent.\9\ As
U.S. Department of Transportation (U.S. DOT) Secretary Pete Buttigieg
noted, such a high rate of turnover is indicative that there are some
real issues with the quality of the job of driving a truck.\10\ In
addition, states issue more than 450,000 new commercial driver licenses
(CDLs) each year demonstrating that there are candidates to fill
vacancies.\11\ Instead of proposing initiatives that will degrade
public safety, the industry should be focused on addressing the
retention issues through improved, safe working conditions.
---------------------------------------------------------------------------
\8\ United States Department of Labor, Bureau of Labor Statistics,
Is the U.S. labor market for truck drivers broken? (Mar. 2019).
\9\ American Trucking Associations, Fourth Quarter Truck Driver
Turnover Rate Shows Muddled Picture (Mar. 12, 2021).
\10\ See: https://www.msnbc.com/morning-joe/watch/transportation-
secretary-buttigieg-on-supply-chain-issues-worker-shortage-125851717987
(Nov. 10, 2021).
\11\ Greg Rosalsky, Is There Really A Truck Driver Shortage?,
National Public Radio (May 25, 2021).
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Younger drivers are demonstrated to be less safe. The Insurance
Institute for Highway Safety (IIHS), citing numerous studies, has
stated that ``age is a strong risk factor for truck crash
involvement.'' \12\ In fact, age is the most important factor in the
high rate of involvement of younger CMV drivers in fatal crashes. The
general pattern of over-involvement in fatal crashes for younger CMV
drivers dominates all other factors. Studies of young CMV drivers show
that as the age of the driver decreases, large truck fatal crash
involvement rates increase.\13\
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\12\ Insurance Institute for Highway Safety, Comments to the
docket, FMCSA-2000-8410-0515; citing Christie, R. and Fabre, J. 1999.
Potential for fast-tracking heavy vehicle drivers. Melbourne,
Australia: National Road Transport Commission; Blower, D. 1996. The
accident experience of younger truck drivers. Ann Arbor, MI: University
of Michigan Transportation Research Institute; Frith, W.J. 1994. A
case-control study of heavy vehicle drivers' working time and safety.
Proceedings of the 17th Australian Road Research Board Conference, 17-
30. Queensland, Australia: Australian Road Research Board; Stein, H.S.
and Jones, I.S. (1988).
\13\ Campbell, K. L., Fatal Accident Involvement Rates By Driver
Age For Large Trucks, Accid. Anal. & Prev. Vol 23, No. 4, pp. 287-295
(1991).
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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).\14\ This plain-truth reality is not surprising. Generally,
younger drivers are more likely to be involved in fatal crashes because
they lack driving experience and skills and tend to take greater risks.
Development of the brain region vital to decision making and complex
tasks, specifically the pre-frontal cortex, may not be fully reached
until one's mid-20s.\15\ While proponents of younger truck drivers have
justified this misguided policy proposal by citing state laws that
allow them to operate intrastate, expanding the operations of these
dangerous drivers extends existing safety problems while introducing
additional safety considerations such as unfamiliar terrain and weather
conditions.
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\14\ Campbell, K. L., Fatal Accident Involvement Rates By Driver
Age For Large Trucks, Accid. Anal. & Prev. Vol 23, No. 4, pp. 287-295
(1991).
\15\ Arian, M, et al., Maturation of the adolescent brain,
Neuropsychiatric Disease and Treatment (Apr. 3, 2013).
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Diverse stakeholders including safety groups, law enforcement,
public health and consumer organizations, truck drivers, labor unions,
some trucking companies, and truck crash victims and survivors have
repeatedly opposed efforts to lower the age to operate CMVs in
interstate commerce. Additionally, the public has rejected lowering the
minimum age for interstate truck and bus drivers with 62 percent of
respondents in opposition, according to a 2020 public opinion poll
conducted by Engine's Caravan Survey.\16\ Furthermore, in 2001, a
petition was filed with the Federal Motor Carrier Safety Administration
(FMCSA) to lower the age at which a person could obtain a CDL to
operate in interstate commerce from 21 to 18 as part of a pilot
program. The FMCSA declined to lower the minimum age for an
unrestricted CDL because the agency could not conclude that the safety
performance of younger drivers was on par with, or even close to, that
of older CMV drivers. In comments to the docket for the petition, the
public strongly rejected the idea with 96 percent of individuals who
responded opposing the proposal along with 88 percent of the truck
drivers and 86 percent of the motor carriers.\17\
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\16\ Engine's Caravan Survey Public Opinion Poll (2020).
\17\ Young Commercial Driver Pilot Training Program, Notice of
denial of petition to initiate a pilot program, 68 FR 34467, 34469
(June 9, 2003).
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The Infrastructure Investment and Jobs Act (IIJA) enacted in
November 2021 included a provision requiring the establishment of pilot
program to permit teen truckers to operate in interstate commerce.\18\
This imprudent initiative could have a drastic impact on public health,
even more so if not executed with needed safeguards. This program is
basically a ``science experiment'' with all road users serving
unknowingly as ``test subjects.'' If accepted research protocols are
not followed by FMCSA, it could result in preventable deaths and
injuries and will also jeopardize the legitimacy of the outcomes of the
program. Lastly, the agency's recommendations and conclusions in the
required report to Congress must be supported by sufficient evidence
and data collected during the program. We urge this Committee to
execute effective oversight of this program.
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\18\ Pub. L. 117-58, Sec. 23022 (2021).
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Allowing teenagers to drive trucks in interstate commerce will
worsen and expand the major problems with truck driver working
conditions from inside state lines to the entire nation. Improving
working conditions to ensure experienced drivers are safer, rather than
tapping into an unsafe pool of teenage drivers to fill the void, will
ideally lead to healthier and more fulfilled drivers who stay in their
jobs as well as attract new applicants. Further attempts to pull
teenagers from high school hallways onto high-speed highways, such as
the Ceasing Age-Based (CAB) Trucking Restrictions Act (H.R. 267),
should be rejected by Congress.
Driver fatigue is a well-known and documented dangerous issue that
plagues the trucking industry. The National Transportation Safety Board
(NTSB) has repeatedly cited fatigue as a major contributor to truck
crashes.\19\ Currently, truck drivers are permitted to drive up to 11
hours per day for a total of 77 hours per week. These grueling hours
can lead to cumulative fatigue and devastating safety consequences.
Self-reports of fatigue, which almost always underestimate the problem,
find that fatigue in truck operations is a significant issue. In a 2006
driver survey prepared for FMCSA, ``65 percent [of drivers] reported
that they often or sometimes felt drowsy while driving'' and almost
half (47.6 percent) of drivers said they had fallen asleep while
driving in the previous year.\20\ Expanding the hours truck drivers can
drive 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).
\20\ 75 FR 82170 (Dec. 29, 2010), citing Dinges, D.F. & Maislin,
G., ``Truck Driver Fatigue Management Survey,'' May 2006. FMCSA-2004-
19608-3968.
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One of the most effective tools to help prevent driver fatigue is
the use of Electronic Logging Devices (ELDs) to record drivers' hours
of service (HOS). Paper logs are frequently referred to as ``comic
books'' throughout the industry because of the ease in falsifying
actual driving and work time. The FMCSA estimated that requiring ELDs
will save 26 lives, prevent over 500 injuries and avoid over 1,800
crashes annually.\21\ The U.S. DOT also estimated the annualized net
benefits of adopting ELDs to be over $1 billion.\22\ Congress,
recognizing the benefits of ELDs, mandated their use as part of the
Moving Ahead for Progress in the 21st Century (MAP-21) Act.\23\ In
2015, the FMCSA delivered on this Congressional directive and issued a
rule requiring the use of ELDs which went into effect in December
2017.\24\ FMCSA reports that since the implementation of the ELD rule,
the percentage of driver inspections with an HOS violation has
decreased significantly.\25\ Despite this compelling evidence, broad
support and an established final rule, some continue to object to the
use of this technology.
---------------------------------------------------------------------------
\21\ 80 FR 78292 (Dec. 16, 2015).
\22\ Id.
\23\ Pub. L. 112-141 (2012).
\24\ 80 FR 78292 (Dec. 16, 2015).
\25\ FMCSA, Electronic Logging Devices: Improving Safety Through
Technology, See: https://eld.fmcsa.dot.gov/
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It is important to note that the ELD rule did not change the
underlying HOS rules. Yet, a barrage of legislative and regulatory
proposals continues to target these regulations. For instance, truck
drivers hauling livestock or insects are currently exempted from having
to use ELDs. In addition, the IIJA expands the HOS exemption already
provided to these carriers to include one covering a 150 air-mile
radius from the final destination (the prior exemption was for a 150
air-mile radius from the source).\26\ Allowing certain haulers to skirt
the ELD rules jeopardizes the safety of the animals in transport, truck
drivers and all who travel on the roadways.
---------------------------------------------------------------------------
\26\ H.R. 3684, 117th Congress 1st Sess, (2021).
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Additionally, in 2016, the FMCSA published an Advanced Notice of
Proposed Rulemaking (ANPRM) requesting information regarding the
potential benefits of regulatory action to address the safety risks
posed by CMV drivers who are afflicted with obstructive sleep apnea
(OSA).\27\ Compelling and consistent research has revealed that drivers
afflicted with OSA that is not properly treated are more prone to
fatigue and have a higher crash rate than the general driver
population. In fact, the Federal Aviation Administration (FAA)
considers OSA to be a disqualifying condition unless properly
treated.\28\ Yet, in August of 2017 the FMCSA withdrew the OSA
rulemaking without providing any credible analysis or reasoning for
such an ill-advised course of action.\29\ We urge the Committee to
address this critical safety issue.
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\27\ 81 FR 12642 (Mar. 10, 2016).
\28\ Id.
\29\ 82 FR 37038 (Aug. 8, 2017).
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In March 2020, FMCSA issued an Emergency Declaration exempting
drivers from critical safety regulations including those governing
hours of service for those operators providing direct assistance for
relief efforts related to the COVID-19 pandemic.\30\ The declaration
expired in October 2022. Advocates has called for the agency to be
transparent about the use of this exemption by making any related data
available to the public.\31\ To date, the agency has not responded or
posted any data on its website. Release of this information will
contribute significantly to the public's understanding of the impact to
roadway safety resulting from the exemptions to the Federal Motor
Carrier Safety Regulations granted by the Emergency Declaration, as
well as the frequency of use of the exemptions by the industry.
---------------------------------------------------------------------------
\30\ FMCSA, Extension and Amendment of Emergency Declaration 2020-
002 (Aug. 31, 2021).
\31\ Advocates for Highway and Auto Safety, Statement on Extension
of Emergency Declaration and Exemptions from Certain Truck Safety
Regulations (Sep. 2, 2021).
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Overweight trucks disproportionately damage America's crumbling
infrastructure and threaten public safety. While certain special
interests are advocating to suspend 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.
According to the 2021 Infrastructure Report Card from the American
Society of Civil Engineers, America's roads receive a grade of ``D''
and our bridges were given a ``C.'' \32\ Nearly 40 percent of our
615,000 bridges in the National Bridge Inventory are 50 years or older,
and one out of 11 is structurally deficient.\33\ The U.S. DOT
Comprehensive Truck Size and Weight Study found that introducing double
33-foot trailer trucks, known as ``Double 33s,'' would be projected to
result in 2,478 bridges requiring strengthening or replacement at an
estimated one-time cost of $1.1 billion.\34\ This figure does not even
account for the additional, subsequent maintenance costs which will
result from longer, heavier trucks. In fact, increasing the weight of a
heavy truck by only 10 percent increases bridge damage by 33
percent.\35\ The Federal Highway Administration (FHWA) estimates that
the investment backlog for bridges, to address all cost-beneficial
bridge needs, is $123.1 billion.\36\
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\32\ 2021 Infrastructure Report Card--Bridges, American Society of
Civil Engineers (ASCE); 2021 Infrastructure Report Card--Roads, ASCE.
\33\ 2021 Infrastructure Report Card--Bridges (ASCE).
\34\ Comprehensive Truck Size and Weight Limits Study: Bridge
Structure Comparative Analysis Technical Report, FHWA, June 2015.
\35\ Effect of Truck Weight on Bridge network Costs, NCHRP Report
495, National Cooperative Highway Research Program, 2003.
\36\ 2015 Status of the Nation's Highways, Bridges, and Transit:
Conditions and Performance, Chapter 7, p. 7-34, FHWA, 2016.
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Raising truck weight or size limits could result in an increased
prevalence and severity of crashes. Longer trucks come with operational
difficulties such as requiring more time to pass, having larger blind
spots, crossing into adjacent lanes, swinging into opposing lanes on
curves and turns, and taking a longer distance to adequately brake. In
fact, double trailer trucks have an 11 percent higher fatal crash rate
than single trailer trucks.\37\ Overweight trucks also pose serious
safety risk. Brake violation are a major reason for out-of-service
violations.\38\ According to a North Carolina study by IIHS, trucks
with out-of-service violations are 362 percent more likely to be
involved in a crash.\39\ This is also troubling considering that
tractor-trailers moving at 60 miles per hour are required to stop in
310 feet--the length of a football field--once the brakes are
applied.\40\ Actual stopping distances are often much longer due to
driver response time before braking and the common problem that truck
brakes are often not in adequate working condition.
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\37\ An Analysis of Truck Size and Weight: Phase I--Safety,
Multimodal Transportation & Infrastructure Consortium, November 2013;
Memorandum from J. Matthews, Rahall Appalachian Transportation
Institute, Sep. 29, 2014.
\38\ Roadside Inspections, Vehicle Violations: All Trucks Roadside
Inspections, Vehicle Violations (2019--Calendar), FMCSA.
\39\ Teoh E, Carter D, Smith S and McCartt A, Crash risk factors
for interstate large trucks in North Carolina, Journal of Safety
Research (2017).
\40\ Code of Federal Regulations (CFR) Title 49 Part 571 Section
121: Standard No. 121 Air brake systems (FMVSS 121).
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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. Also, the technical reports
released in June 2015 from the U.S. DOT Comprehensive Truck Size and
Weight Study concluded there is a ``profound'' lack of data from which
to quantify the safety impact of larger or heavier trucks and
consequently recommended that no changes in the relevant truck size and
weight laws and regulations be considered until data limitations are
overcome.\41\
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\41\ Comprehensive Truck Size and Weight Limits Study, Federal
Highway Administration (June 2015).
---------------------------------------------------------------------------
The IIJA invested billions of dollars to improve and elevate the
safety of our nation's roads and bridges. Any increase to federal truck
size and weight limits will undermine this objective, worsen safety
problems, and divert rail traffic from privately owned freight
railroads onto our already overburdened public highways. Despite claims
to the contrary, bigger trucks will not result in fewer trucks.
Following every past increase to federal truck size and weight limits,
the number of trucks on our roads has gone up. Since 1982, when
Congress last increased the gross vehicle weight limit, truck
registrations have more than doubled.\42\ The U.S. DOT study also
addressed this meritless assertion and found that any potential mileage
efficiencies from the use of heavier trucks would be offset in just one
year.\43\ We urge this Committee to oppose any increases to federal
truck size and weight limits, including mandating double 33 feet
trailers, pilot programs and state or industry specific exemptions.
This includes the Safer Highways and Increased Performance for
Interstate Trucking (SHIP IT) Act (H.R. 471) that has numerous reckless
provisions, among them, the establishment of a pilot program for
overweight trucks.
---------------------------------------------------------------------------
\42\ 2017 Annual Report.
\43\ Comprehensive Truck Size and Weight Limits Study, Federal
Highway Administration (June 2015).
---------------------------------------------------------------------------
While autonomous driving technology could offer the promise of
significantly reducing crashes involving CMVs in the future, it is far
from ready to be deployed safely on our nation's roads and therefore is
not a viable option to address the U.S.'s supply chain issues. The
advent of this technology must not be used as a pretext to eviscerate
essential safety regulations administered by the 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
autonomous driving system (ADS). In fact, additional substantial public
safety concerns are presented by autonomous commercial motor vehicles
(ACMVs).
Autonomous technology is still in its relative infancy as evidenced
by fatal and serious crashes involving passenger motor vehicles
equipped with automated driving systems of varying levels.\44\ 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.
---------------------------------------------------------------------------
\44\ NHTSA, Standing General Order 2021-01 (Aug. 2021).
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Advocates and numerous stakeholders developed the ``AV Tenets,''
policy positions which should be a foundational part of any AV
legislation.\45\ 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 February 2022, Advocates commissioned a public
opinion poll that found that 85 percent of respondents were concerned
with sharing the road with driverless trucks.\46\ Moreover, 60 percent
of respondents indicated that their concerns would be addressed if the
vehicles were required to meet minimum government standards.
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\45\ See: https://saferoads.org/autonomous-vehicle-tenets/
\46\ ENGINE'S CARAVAN SURVEY, Public Concern About Driverless Cars
and Trucks (Feb. 2022).
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Lastly, we commend Congress for the safety advances included in the
bipartisan IIJA and have been urging the U.S. DOT to implement the
directives with urgency to address the motor vehicle crash fatality and
injury toll. With 115 people being killed on our roadways every day,
time is certainly 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
Ms. Norton. Thank you, Mr. Chairman.
Mr. Jefferies, the Infrastructure Investment and Jobs Act
provides $102 billion in total rail funding. This is a historic
investment that will advance our goal of reducing carbon
emissions from transportation. In addition to mitigation,
adaptation is also an essential aspect of responding to climate
change.
Could you expand on how the industry is investing in
climate-resilient rail infrastructure?
Mr. Jefferies. Well, thank you for that question, and
certainly a very top-of-mind point. So, right now, freight rail
is the most fuel-efficient, least environmentally intensive way
of moving goods over land. One gallon of diesel can move one
ton of freight about 500 miles. And 1 intermodal train will
take about 200 trucks off the highway. What does that do? That
reduces emissions, it reduces congestion, it reduces wear and
tear on public infrastructure.
And so, as we stand here today, an immediate way to reduce
emissions is to partner with my friend at the ATA and get that
supply chain humming so you are going from truck to rail to
truck, pulling trucks off the highway. But we can't just sit
where we are right now and be happy with our environmental
performance. We have got to continue to drive that process
forward, and that includes both out on the network, but also in
the yard.
So, in the yard, we are investing in electric cranes,
emissions-reduction technology, the technology that shuts off a
locomotive so it is not idling, similar to what you have in
your car at a stoplight or stop sign. But we are also investing
in battery-electric power, hydrogen power, increased use of
biofuels, decreased friction between wheel and track to
increase glide. So, there is a vast number of tools that are
being deployed.
And certainly, the IIJA provides significant opportunities
to partner with the Federal Government, both in money coming
out of the DOT, but also money coming out of DOE as well. And
we are working with our members to leverage those opportunities
to really partner with the Federal Government and with the
suppliers and the OEMs to make sure that we are really pushing
the limits of what we can do with battery electric, what we can
do with hydrogen, what we can do with biofuels, because it is
not a just pick one path right now and go forward. We need to
be exploring all opportunities and the pros and cons of each
type of NextGen fuel and NextGen power source.
And so, that is what we are doing. And the programs that
the IIJA provided and the agencies that it did are just getting
up and humming. And so, we are looking forward to really
working with the Government to advance that R&D.
Ms. Norton. Thank you.
Mr. Spear, I was surprised--perhaps I shouldn't have been--
to note that women make up, according to the Bureau of Labor
Statistics, only 7.9 percent of truckdrivers. That was in 2021.
That was an increase of only 0.1 percent compared to the year
before.
How does the trucking industry plan to increase recruitment
and training opportunities for women?
Mr. Spear. Great question. Added emphasis across all of our
member companies has to change and shift toward different pools
of talent. We talked just recently about the 18 to 20, veteran
service members exiting. We also need to really make an
emphasis on urban hiring and gender.
And with respect to women drivers, you have got to sit down
and listen to them. You have got to begin to understand what
are the headwinds, what are the reasons and concerns that they
have about joining our industry. Talk to the ones that are out
there among the 7 percent, and what are their concerns.
You are going to find that, within training, those programs
need to improve. There needs to be more women and women
trainers. And that is essential that those programs be adjusted
and understand the concerns that women have about becoming a
truckdriver. But you also have drivers that will say, when they
are out on the road, there are concerns for getting out of the
truck at night, not having well-lit, secure parking. And it is
an inhibitor. It is a deterrent from someone entering a good-
paying job with exceptional benefits. We want to grow this
populous.
I was just in Europe and found out that their percentage is
actually 3 percent. I thought 7 percent was bad. So, we really
need to have better training. We need to look at ways that we
can improve safety and security and alleviate those concerns,
and women feel safe in this industry. And they are a major
contributor. It is a pool of talent that we believe could
really shore up our shortage. We are short 78,000 drivers. I
would love all 78,000.
Mr. Rouzer [presiding]. The gentlelady's time has expired.
I now recognize Mr. Perry for 5 minutes for questions.
Mr. Perry. Thank you, Mr. Chairman. And thank you,
gentlemen, for making the trip and being here.
Mr. Spear, since we are on the discussion, not where I
wanted to go, but I think it is important to recognize that
truckdrivers, whether you are a man or a woman, need to be able
to protect yourself in an increasingly violent society. And the
inability to carry a firearm across State lines in many cases
because of the restrictions in various States makes that an
impossibility and to stay legal. So, it is something that you
might want to consider taking up in all the things that you are
doing to protect your drivers and keep them safe.
But I would like to talk to you about the independent
contractor business model in our Nation and how important it is
to the trucking industry, the supply chain, and the people's
freedom and ability to get into a business and make good
decisions for themselves and for their family. And to note that
the administration, in particular people on the left in States,
are assaulting this model of making a living in your industry.
The front line in this war is California, of course, where AB5
effectively outlawed owner-operated models by reforming the--or
restating the term ``employee.''
I just wonder if you could characterize, with as much cargo
comes into California and has to be shipped across the country,
how AB5 has affected the industry and the supply chain, from
your viewpoint.
Mr. Spear. Well, independent contractors have--that model
has been in existence for over 90 years, and it is the spirit
of being a small business person. A lot of our largest members
started with one truck as independent contractors. Now, they
employ thousands of people. So, giving people the right to
choose that path, that is what is in question here, with AB5
and the Department of Labor NPRM that is currently pending.
And I would just say that, stop talking to the media and
start talking to the independent contractors. I can bring
scores of them up here, and they will tell you exactly why they
choose this path. They want seasonal work. They want part-time
work. They have another business on the side. Whatever the
reason may be, that is their decision. That is their choice.
And saying that an employer is forcing them into this category
because they don't want to pay them more or they don't want to
pay health benefits, the independent contractors will tell you
that that is not the case.
Now, I am not saying in any employment category there isn't
some instance out there of abuse, but to reform the entire
State law or the national law based on an anecdote--just talk
to the independent contractors. They will tell you that this is
a wonderful profession. This is a business that they want to
grow. They want to add trucks, drivers underneath them, serving
other companies. Give them that option. Don't take it away. We
are short 78,000 drivers. You take away our independent
contractors, you are going to pay more for everything we eat,
drink, and wear. Think inflation is bad now; it makes it only
worse.
Mr. Perry. Sir, so, everybody in the room knows, even
though we are not sometimes willing to talk about what this is
about. It is not about profits. It is about unionized labor and
forcing it on people. And you already mentioned the Wage and
Hour Division of the U.S. Department of Labor's notice of
proposed rulemaking in that regard.
But what I am looking for, in the last 1\1/2\ minutes or
less that we have: What has been the impact to the supply
chain, if you can contextualize that, in California and across
the country, and what will be the impact if it is allowed
through the NPRM to go across the country? What will be the
impact to consumers, to people that want to be in the business,
and to citizens across the country?
Mr. Spear. Any State like California that adopts AB5 as a
model, you are going to have an inability to move freight from
those ports to the rest of the country. I have companies that
are simply dependent on this model, cannot operate, cannot
comply with the rules of AB5. They added layers for testing who
is and isn't an independent contractor. They are going to pull
out. They are just simply not going to operate in California.
That is unacceptable, not just for the people that live in
California, but throughout the rest of the country.
We can't put everything on rail. I mean, we have to work
together, Ian is right. But that stuff is going to have to move
out of those ports by truck. By and large, those companies
aren't going to operate there. That is the impact on the supply
chain. You are going to pay more. You are going to have less
options. I think consumers, constituents are going to find that
unacceptable.
And you are right--by the way, there is no enforcement
mechanism in California for this. It is done by the plaintiff's
bar. That is by design. They are going to litigate us, and then
the unions are going to come in and try to organize them. That
is what is behind this.
Mr. Perry. I yield.
Mr. Rouzer. The gentleman's time has expired.
I now recognize the gentlelady from California, Mrs.
Napolitano.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Jefferies--it is on. Can you hear? OK.
The infrastructure law provided $3.7 billion for much
needed grade separation projects. Now, we need to construct
these projects to relieve congestion through safety, air
quality, and freight movement in the communities such as mine.
How and when will the railroads work with local communities
and State transportation agencies to ensure these projects get
built quickly? Are railroads willing to remove redtape and
invest in these projects?
Mr. Jefferies. Well, that is a great question. And we are
100 percent willing to remove redtape to get projects done. We
often need a partner in the State and Federal Government to do
that as well. But you are spot on. The $3.7 billion for grade
crossing safety, grade separations was probably the most
dynamic, exciting piece of that vast legislation for our
particular industry. And we look forward--I believe we are
expecting the first round of the NOFA to come available here in
the near future, and I know my railroads are excited about the
opportunities there.
And you are right, we have got to pick the most high-impact
projects. We have got to collaborate with communities to make
sure that we are being good partners. We do have a track record
there. We have got models around the country of working with
States and localities to get projects done. And this is a
really, really transformational opportunity for pedestrian
safety, for quality of life, for freight fluidity, for
emissions reductions. So, we are absolutely ready, willing,
able to work to put these dollars to work.
Mrs. Napolitano. We sure could have used approval of some
of those on the Alameda Corridor-East. We have some projects
that railroads gave zero on projects.
Mr. Spear, I am very concerned by the increasing number of
reports of new female truckdrivers being sexually assaulted
during training rides. Stories are often the same: New
truckdriver is required to take a training ride with an
experienced truckdriver and then is sexually harassed or
assaulted during the ride. It often occurs in isolated areas
and results in the trainee being left on the side of the road.
What is the trucking industry doing to address this
situation?
Mr. Spear. Great question, Congresswoman. Zero tolerance.
Zero. It is unacceptable to have that happen in any industry,
but specifically to trucking. Just to Congresswoman Norton, I
would love to have all 78,000 vacancies filled by women
drivers. To do that, our members, our industry have to have not
just programs that train to this of why that is unacceptable,
they actually have to enforce it to ensure that it doesn't
happen.
At ATA, we are very active with Truckers Against
Trafficking, working with our driver populous to train them to
spot the trafficking of women and children for sexual
exploitation. That there sets the bar that that behavior is
unacceptable. We train drivers to look for it. Internally
within the company, we have to go further. We just launched,
last year, the Women in Motion program, to really focus on
training programs that overcome this instance, and having women
train women drivers is certainly a good step forward. These
programs have to speak to that.
Mrs. Napolitano. Well, I certainly would like to see some
of those programs carried through, sir.
Mr. Spear. Absolutely.
Mrs. Napolitano. Mr. Regan, I recently visited busdrivers
in my district in the El Monte bus station. They were very
pleased with our work in the infrastructure law to improve
busdriver safety. They informed me of the need of more and
bigger shields to protect them. We must continue to hold FTA
and transit agencies accountable for these bus safety
improvements. Busdrivers also mentioned that many drivers are
reaching retirement. And there needs to be improved recruitment
and training on the jobs.
Can you please comment on both the needs for bus safety and
this busdriver recruitment?
Mr. Regan. Yes. Thank you for that question, Congresswoman.
And thank you for your help in getting that driver safety
provision included in the IIJA. That was a vital piece of
legislation. And to be honest with you, I am a little
frustrated by the pace with which that is being implemented. I
would like to see us moving a little bit further along, a
little bit faster in terms of protecting these workers, simply
because it is horrific what they have to deal with and the
number of stories I see of somebody being attacked.
But also, I think that is a direct impact on your second
part of the question, which is on recruitment. We do need to
recruit a whole lot more people into this industry. It starts
with making them good jobs, which I think in most systems,
these are going to be good-paying jobs with good benefits. But
if the best advertisement for your industry is the local news
story about another driver being assaulted, then that is not a
very good advertisement about bringing people into your
industry.
So, we need to address this right now, and I think shields
are a good start, but also bringing workers into the planning
and training, and the safety planning committees is a critical
part.
Mrs. Napolitano. Thank you, Mr. Chair.
Mr. Rouzer. The gentlelady's time has expired.
The gentleman from Texas, Mr. Babin, is recognized for 5
minutes.
Dr. Babin. Thank you, Mr. Chairman. I really appreciate all
these good witnesses that are here today.
I proudly represent the 36th Congressional District of the
State of Texas, and home of our great Port of Houston. Thank
you for being here, Mr. Guenther. We really appreciate it. I am
going to get to a question to you here in just a little bit.
As you all know, some of you mentioned in your testimonies,
Government investment is absolutely vital to our transportation
and infrastructure industry. And that said, we all also know
that just throwing money at a problem doesn't make it go away.
Unfortunately, the Federal Government proved that, once again,
with last session's Democratic bill, the $1.2 trillion bill
that has directly, I think without question, contributed to the
current economic crisis that we find ourselves in.
I hope that some lessons were learned. Throwing billions of
taxpayer dollars at this industry without prioritizing supply
chain solutions, pandemic recovery issues like fraud and abuse,
serious workforce issues, overly burdensome redtape, and other
underlying issues will not actually allow us to see long-term
sustainable improvement and investment in our Nation's
infrastructure. As some of you noted, it will lead to industry-
specific inflation, increasing the costs that are unique to our
sector.
On top of that, carving out political handouts for niche
green transportation and infrastructure projects and companies
is not good for the industry as a whole. In fact, it causes
delays, increases costs, and is anticompetitive and all around
counterproductive. I am very deeply concerned about the left's
rampant spending and the impact it is having on inflation and
our economic stability as we face a $31.4 trillion national
debt now.
Quickly, Mr. Firth, are AGC members hurting due to higher
costs: timber, transportation, equipment, and things like that?
Mr. Firth. I am sorry, could you repeat the question?
Dr. Babin. Yes. Are your general contractor members hurting
due to higher costs? Are higher costs hurting your members?
Mr. Firth. Yes. Absolutely. I mean, look anywhere you want.
Fuel is a big one. Just internally in our own company, this
last year, our fuel bill, we were close to over $1 million over
budget on fuel.
Dr. Babin. Absolutely.
Mr. Firth. Our workers have to drive further, as we are in
rural areas. It costs more money. So, fuel is just one that
comes to my mind.
Dr. Babin. Thank you.
Mr. Jefferies, are AAR members hurting from higher costs:
constructing new facilities, labor, maintenance, et cetera?
Mr. Jefferies. Absolutely. Inflation affects not only the
goods and materials we use to operate, it also affects the
customers whose goods we move. So, it is hit on multiple
layers. Absolutely.
Dr. Babin. Thank you.
Mr. Spear, are ATA members hurting from higher costs: fuel,
labor, sky-high new truck prices, batteries, et cetera?
Mr. Spear. All of the above.
Dr. Babin. Amen.
Mr. Spear. The price of fuel is still a huge headwind,
especially for the smaller companies, owner-operators.
Dr. Babin. Right.
Mr. Spear. It is a serious matter.
Dr. Babin. Thank you.
Now, Mr. Guenther--again, thank you all for being here. As
the proud Representative of the Port of Houston, I have a
question for you regarding the port's underfunding issue which
you mentioned in your opening statement. I am personally very
familiar with the operations and maintenance funding challenges
that our port has faced for many years.
But would you quickly elaborate on the Houston Ship
Channel's specific needs for additional investment there? You
mentioned that in your opening statement.
Mr. Guenther. Yes. Thank you, Congressman Babin. The
reality is, you mentioned throwing money at a problem. Yes, we
have got a short term. We are about to be draft restricted. A
quick fix might say throw money at the problem, but what really
needs to happen in reality is annual maintenance; deliberate,
robust in decisions to make sure that we are providing the
funding for those waterways in the United States that have the
most economic benefit, and make sure they are not deficient or
limited.
As I mentioned, we, the largest port in the country in
terms of tonnage and number of vessel calls on a per-ton basis,
are getting less of funding for operating and maintenance,
which makes our channels--our Houston Ship Channel become more
limited. And at the end, when ships are drawing less water and
able to haul less freight, it is going to cost more money. And
we have to be prepared for those ships and making future
investments--we are building our channel now, deepening and
widening our channel now, to handle those ships that can come
through the Panama Canal, the new Panama Canal.
Dr. Babin. Yes, sir. Exactly.
I see that my time is up, so, I will yield back, Mr.
Chairman. Thank you.
Mr. Rouzer. The gentleman yields back.
The gentleman from California, Mr. Garamendi, is recognized
for 5 minutes.
Mr. Garamendi. Thank you, Mr. Chairman. I want to thank
Chairman Graves for calling this hearing.
The implementation of the IIJA is of critical importance to
this Nation. The bill itself will--could, if properly
implemented, really lay the foundation for America's economic
future, all the pieces of it, whether it is dredging or
highways or railroads, also the grid system and the like.
Critically important.
I want to focus on two issues. First of all, Mr. Regan, if
you could respond to the AB5 issue quickly.
Mr. Regan. Yes. Thank you for that. First of all, the
language--what AB5 does is simply provide a clear definition
for what is an employee, what is not. It does not eliminate the
independent contractor method, because there are plenty of ways
for someone to do outside work and clearly demonstrate they are
independent contractors; nor does it require them to be in a
union. In fact, all it does is properly classify workers so
that they have the constitutionally guaranteed ability to join
a union should they choose to do so.
Mr. Garamendi. Thank you. There will be much more
discussion about this. This is an ongoing discussion in
California about the implementation and possible modification
of it along the way. Thank you.
I want to really deal with an issue that was raised by Mr.
Firth, and also you, Mr. Regan, and that deals with the $1.2
trillion. Who is it to benefit? The construction industry, the
transportation industry, or all of America's new existing and
potential industries? This is the Buy America provision.
We spent a lot of time in this committee working on that,
not only here in this House, but also in the other house, and
we have put in place the Buy America provisions that are much
more broad than they were before the IIJA and other legislation
went into effect.
So, what I want to really get to, Mr. Regan, if you could
deal with this, is how the ancient 1983 broad waiver, which
still exists in the Department of Transportation, how it
conflicts with the law that we have passed, that is the Buy
America provisions.
Mr. Regan. Yes. It addresses--the waiver is on manufactured
goods. So, it goes beyond iron and steel. And that should be
repealed, because if we truly do want to use this type of
investment to rebuild our manufacturing capability in this
country, we need to have expansive Buy America protections
across the board. But we also need to have expectations within
the industry to know what is going to be required to be made
here. And I think we need to have those definitions put in
place very soon.
So far, we are still lagging behind, and I totally
understand that it is a complicated process. It was a big
expansion of the program, but we do need to put very clear
definitions and timelines in place so the industries have an
opportunity to respond and start reshoring some of that work.
Mr. Garamendi. I want to be very, very clear here; the 1983
waiver is a broad waiver. It basically says, with very few
exceptions, everything can be waived. It is in direct conflict
with the law that we passed. And while Mr. Firth correctly
raised the issue, it is complicated. There are many different
pieces to any construction project. However, that waiver, it
should be repealed. And then we should simultaneously get about
further definitions and clarification.
And so, Mr. Firth, if you would like to deal with the
clarifications and along the line, I'll give you 30 seconds and
will come back at other issues here.
Mr. Firth. Well, thank you for the question. It is
confusing.
Mr. Garamendi. Indeed it is.
Mr. Firth. It really is. I don't know if, as a company, am
I going to have to hire somebody to really sort this out as a,
you know, what the rule really means. From a construction
standpoint, I guess we believe that when we go to build
something, Buy America should already be--or if it is a
material or some type of gadget or whatever that we are
supposed to implement into a project, it should already be
spelled out for us, very clear. And I guess that is where the
confusion is, is because we never know until it seems like at
the very end, where it isn't. And then trying to find an
equivalent to even get a waiver is very difficult.
Mr. Garamendi. Good. Department of Transportation, you must
be here in the room. Be prepared to be banged on here until you
get this squared away. Repeal the 1983 law and get about,
simultaneously, the clarification that is necessary to
implement the law that we wrote last year.
With regard to one other issue, in 18 seconds, Dusty
Johnson, Mr. Johnson has stepped out of the room, but the Ocean
Shipping Reform Act is in place. I understand he is going to
pick up this issue and ask those of you that are at the ports,
railroads about that law. And it was a nice bipartisan bill.
Thank you. I yield back.
Mr. Graves of Missouri [presiding]. Mr. Rouzer.
Mr. Rouzer. Thank you, Mr. Chairman. I thank our panelists
for being here today. I really appreciate the value of your
input.
So, we often talk about the ramifications of COVID and
mandatory shutdown of the economy and all the supply chain
disruptions, but just for the sake of educational purposes, I
want to go back pre-COVID: before COVID, when the economy was
humming along pretty good, gas prices were pretty low,
respectively.
What were your biggest supply chain challenges then? If we
could go, starting with Mr. Spear all the way down.
Mr. Spear. I think our leading headwind is the shortage of
talent. It was before COVID. We were roughly 50,000, 51,000
short on drivers; about 29,000, 30,000 short on technicians.
That inflated to 81,000. Starting to tick down a little bit. We
are at 78,000 short on drivers. I would say for all the other
sectors of employment out there that are now post-COVID facing
the same problem that we had before COVID, welcome to the show.
We really are stretched thin in terms of what we can do
without people, hard-working men and women getting behind the
wheel to move the freight. So, we are moving 72.5 percent of
the domestic freight in this country. To grow that, you are
going to have to put more people behind the wheel. So, it is
going to continue to be a real issue for us.
Mr. Rouzer. Mr. Jefferies?
Mr. Jefferies. I think it is the ability to put dollars to
work on projects and do it in a reasonable amount of time, in
order to not only maintain and replace what might be older
equipment, bridges, et cetera, or expanding into new
facilities, new yards, really just incredibly long timelines
for review, a lot of uncertainty there. So, lack of certainty
and lack of timeliness of being able to put our dollars to work
to maintain and grow capacity.
Mr. Rouzer. Mr. Firth?
Mr. Firth. For us it is probably going to be steel, whether
it be rebar for the bridges that we work on or anything like
that. Hitting rolling dates from the mills or whatnot, takes a
little bit of logistics to make sure that you get your order in
ahead of time.
Mr. Rouzer. Mr. Guenther?
Mr. Guenther. For ports, our port and most seaports I would
say it is just--the supply chain is very asset based, from
ships to ports to trucks to chassis to where they end up at a
warehouse or vice versa. And when one link in that supply chain
backs up, for us as seaports, it caused a lot of congestion on
our ports with the inability to move them out quickly. Ports
can't be storage facilities. They have to be transit
facilities. And you saw ships backing up in Houston, on the
east coast, and across the country.
So, just measures that may be more fluid to move cargo
through ports. And we will have to continue to look at that,
making investments in opportunities to get cargo out of our
ports.
Mr. Rouzer. Mr. Regan?
Mr. Regan. Thank you. Honestly, it was insufficient
workforce levels at Class I railroads. It is a problem that
continues today. And I appreciate the comments from my friend,
Ian, about what they are doing to address it. But that was a
problem before the pandemic and continued throughout.
Mr. Rouzer. Yes. Mr. Jefferies, going back to you, what are
some current or proposed regulations being discussed that could
negatively impact freight railroads' ability to respond to
significant supply chain bottlenecks? And then, follow up to
that, are there any deregulatory actions that need to be taken
to help address the matter?
Mr. Jefferies. Well, to parrot my friend, Chris, how long
do we have? I will keep it short.
So, a couple different things, and it is different parts of
Government. I talked about the ability to put dollars to work.
So, there are opportunities to build on the success of IIJA
when it came to One Federal Decision to expand that beyond DOT-
led projects. There are other opportunities to limit timelines
and scope for other reviews through different agencies.
When it comes to our regulator, the FRA, as I said,
deployment of technology is not only the next leap forward in
safety, it is also the next leap forward in efficiency and
increasing the ability to move more goods on what is a limited
fiscal infrastructure. And we need a partner there. We need a
partner that is going to work with us to build objective
datasets in order to demonstrate that a new tool is resulting
in a higher level of safety and allow that to be folded into
the regulatory structure.
So, I wouldn't even say deregulatory. I would say
regulatory modernization. Our economic regulator, the STB, is
considering some rules that would increase the amount of
touches, increase the amount of switches into the freight rail
network. And that is the last thing you want to do. You want to
go in the opposite direction for fluidity. Reducing employee
risk is getting switches out of the network and allowing goods
to move end to end with as few touches as possible. I am happy
to get into that further, but just a few quick points there.
Mr. Rouzer. Thank you very much. I yield back.
Mr. Graves of Missouri. Mr. Carson.
Mr. Carson. Thank you.
Congratulations to Chairman Graves and Ranking Member
Larsen.
For the panelists, what is the most important thing in your
mind--I know we have a committee agenda--but in your mind, that
we should work on this year, and why is that your priority? And
what specific changes should be made?
Mr. Spear. I think oversight. This being the first hearing,
to really look at a $1.2 trillion bill first year and
implementation is a really good start. I think we all have a
vested bipartisan interest in having a solid supply chain that
isn't contracting in various points, and when it does, to
collectively look at the problem and come up with real
solutions. And I think we have demonstrated an ability,
Government and private sector, to do just that.
I thought the Ocean Shipping Reform Act, the CHIPS Act,
bringing it back, those sensitive items so that we can
manufacture them here, ensures that we are going to have the
capability to serve this economy long term. If there is
anything that came out of COVID, it is really shining a
spotlight on the weaknesses. I think the IIJA does a lot of
potentially good things to solve that. Oversight of this law,
not just this year, but in the coming 4 years, is going to be
really, really important.
Mr. Jefferies. I would certainly echo that. Wherever you
are on--whether you support it or didn't support the IIJA,
there is an immense opportunity to put a lot of dollars to good
projects. And so, I would say the hard part starts now, is how
do the agencies get that money out in a merit-based,
transparent, objective manner to make sure the impact of such
projects is maximized, and how do you put that money to work as
quickly and expeditiously as possible. This committee can
really lead that charge in a bipartisan way.
I think we are all excited to hear the tone coming out of
the heads of the committee here. You look around the room, you
see all the prior leaders of this committee, all of them now.
There are a lot of folks from different walks of life,
different backgrounds, but I think getting back to the
tradition of accomplishment and getting things done together
will be key and allow this committee to be remarkably
successful in supporting the projects that I have mentioned.
Mr. Carson. No doubt.
Mr. Firth. I think for us from the contracting community,
it would be streamlining the permitting process. As we get all
the work from the designers and the owners and everything like
that, concurrent reviews, something that can speed up the
process to get the projects out the door. The projects all
start with permits and, for us, that is where our biggest
bottleneck is.
Mr. Guenther. Just further to what I have talked about
before--from the IIJA, just staying on point with the operator
maintenance. Talked a lot about channels, but also with highway
infrastructure, it is landside, waterside, efficient movement
of freight, and making those continued investments to make sure
that the infrastructure side of the supply chain stays
adequate.
Mr. Regan. I think it is pairing the investments that are
being made with really strong workforce development and
training programs as well, to ensure that not only are we
building our human infrastructure as we are building our modern
transportation infrastructure, but more importantly, that once
we are able to deliver on expanded services, new routes, things
like that, that we have the workforce there ready and able to
deliver the service that the people expect.
Mr. Carson. Thank you. I yield back, Chairman.
Mr. Graves of Missouri. Mr. Bost.
Mr. Bost. Thank you, Chairman. And I want to thank the
panel for being here.
And, Mr. Spear, the trucking industry has recognized it is
difficult finding safe parking, and you have elaborated a
little bit on that, and it is a major challenge for
professional drivers due to the lack of capacity. Your research
and the institute has established drivers spend about 56
minutes each day searching for a place to be safe and park
their vehicle. Now, this is clearly a major inefficiency in our
supply chain. However, the problems can be fixed, and I thought
we were going to get it done last year. This committee
unanimously passed a truck parking bill out of this committee.
It got to the floor, but didn't get anywhere from there.
Have you ever seen any issue, that is, such a time when we
have a fix, we know what we need to do, we pass it, we can't
get it through, and a time whenever we really need to get
something done? And I have been around Government a long time,
but watching something that is so much agreed on and then
stalled, I am just going to ask you: Have you seen anything to
that level?
Mr. Spear. I have, actually.
Mr. Bost. Yes. Me too.
Mr. Spear. But let's focus on this issue. And first of all,
thank you and to the entire committee for this support. This is
not a partisan issue.
Mr. Bost. No.
Mr. Spear. Anybody can drive out of the beltway here, and
you will see trucks on on-and-off ramps resting. Why? Because
they are required by Federal law to take breaks. And when those
breaks come up and they don't have a place to park, they are
going to look for the next best thing. So, this is a safety
issue, not just to our drivers, men and women; it is also a
safety issue for the motoring public. I am out there driving my
car, my family, my kids. I don't want to tangle with our
members. I don't think anybody else does either.
Getting them safe, secure, well-lit parking is a no-
brainer. It is why then-Chairman DeFazio had $1 billion in his
bill. It didn't go anywhere. Your bill, I hope, bipartisan,
start early, we are going to be out there pounding marble. We
are going to be knocking on doors to make certain this gets
done. This is a necessity.
And by the way, we have been really working hand and glove
with the Secretary of Transportation and his team to tap into
those discretionary moneys that he has under the IIJA to ensure
that blocks that and States have access to it for truck
parking. So, in the interim, while that legislation moves, we
are going to be working with them to ensure that we are
tackling the problem as well. I haven't confronted anybody on
this issue that disagrees.
And by the way, we sent that letter up. That is a joint
letter between ATA and OOIDA. That makes a statement. We are in
this together. This is an issue that impacts whether you are an
owner-operator, an IC, a full fleet, we all need more safe
parking.
Mr. Bost. Thank you.
And on my next question, I want to go this route. And you
know that I was born and raised in the trucking industry. I
like to tell people I came home from the Marine Corps, ran a
business for 10 years, loved it for 8. But I need you to
expand, if you can--now, this is a State issue, but I want to
bring it up here.
My brother works tirelessly to get drivers. He gets the
drivers, gets them qualified, makes sure he wants to have them,
and then because of State law now that has legalized marijuana,
they can't pass the drug tests. And it is happening all over
this Nation, and this committee needs to know exactly how much
that is affecting the trucking industry. And can you expand on
that?
Mr. Spear. Yes. The Secretary asked me what keeps me up at
night, this issue: someone who is impaired getting behind the
wheel of an 80,000-pound vehicle. You have got multiple States,
over a dozen now, plus Canada, legalizing recreational
marijuana. It is widespread. We are regulated by the Federal
Government. We cannot have anyone impaired, using marijuana or
any other narcotic, operating this equipment.
So, this channel conflict between the Federal rules and the
States allowing it, this ambiguity is creating a litigious
environment, and we are caught right in the middle of it.
Somebody has got to step up to the plate and put safety first.
You want to smoke weed at home, smoke weed at home. If it is
legal, fine. Do not get behind the wheel of an 80,000-pound
vehicle.
We need to have strong standards, and we need to enforce
the law. And it is tough to say that because we are short
78,000 drivers. I want more of them coming in, but not if they
are impaired. Can't afford that to happen. You hit a schoolbus
full of kids, and they are impaired, that is on us. We have got
to do better than that. So, this is an issue that, I pose to
you all, we have got to work on.
Mr. Bost. Thank you. My time has expired. I yield back.
Mr. Graves of Missouri. Ms. Titus.
Ms. Titus. Thank you, Mr. Chairman.
One of the things that I think is a real asset to this bill
we have been discussing this morning is that it pairs
investment in workforce development with investment in
sustainable fuels, green energy, environmental concerns. And I
see that in Nevada. We have already got almost $9 million
through our RTC to buy electric buses.
So, Mr. Regan, could you talk about how that combination of
workforce development and good energy policy through transit
could be used in other Government agencies?
Mr. Regan. Yes. Thank you so much for that question,
because I think one of the really great developments that has
come out of the implementation of this law was with the Low-
and No-Emission Bus Program, where 5 percent of that money is
required to go towards workforce development. That is critical
because, as I said before, making sure that we have the
workforce ready and trained once these buses become available,
but also we are making a pretty--it is a bigger transition than
you might expect to change from a diesel bus to an electric
bus. You do have to have specific requirements from a
maintenance side and an operations side to make sure that we
are fully prepared to deploy them into our communities.
I think that is exactly the type of model that needs to be
used in other programs in infrastructure, because for too long,
we have focused on the new shiny equipment or the new shining
bridge without focusing on the people that are going to be
critical to operating it, building it, and maintaining it.
Ms. Titus. Thank you. I agree with that.
In addition to buses, we have been hearing a lot about two-
man crews on railroads, and we hear about how the trains have--
there are so fewer now than there used to be, so many fewer
people working than there used to be, so many stock buybacks as
opposed to supporting a workforce.
Isn't that kind of part of the problem with the supply
chain, is the lack of personnel or qualified personnel or
personnel that is stoned, as we heard, in trucks, that sort of
thing? Could you describe that a little bit for us?
Mr. Regan. Yes. I think there is a direct correlation
between the workforce reductions that we saw in rail and the
disruptions in service that we saw pretty severely over the
last few years. And that has been pointed to by the customers
from the railroads as well. If you go to the Surface
Transportation Board hearings, a lot of trade associations,
from agriculture, from energy, from chemical companies, pointed
to the insufficient workforce numbers as the number one cause
for why there were delays and why they couldn't move their
goods to market. So, I do think that is a really pressing issue
that needs to be addressed.
And when it comes to two-person crew, we support the
Federal rulemaking that is underway right now. We are glad to
see that this is being treated as a safety issue, which to us,
it truly is. If you ask any one of our members who operate a
train, the crew size is a vital safety issue to making sure
that they can operate these upwards of 3-mile-long trains that
go through every community in this country in a very safe
manner.
Ms. Titus. Well, thank you. And I will yield back.
Mr. Graves of Missouri. Mr. Mast.
Mr. Mast. Thank you, Chairman.
My comments/questions today are primarily for Mr. Spear and
Mr. Guenther. Speak a little bit about trucking, some of the
issues related specifically--sorry. It is hard to see you
around Mr. Owens' head right here. He is a big guy. I can
barely see you over there.
Thanks, Burgess. I appreciate it.
So, talk about a couple of things on this. We identified as
an issue in this way, when you are looking at goods coming into
port--and by the way, I will pause and say I was glad to hear
you talk about the 80,000 driver shortage. Not that I am glad
that exists, but I was glad to hear you speak about it.
So, we look at goods coming into port and say, if those
goods were taken out of port in some of these States, they
could go from the place they were dropped off to somewhere else
in the State, and you could have a CDL driver between the ages
of 18 and 20. They, in some States, don't have to hit that 21-
year-old threshold. But you can't have somebody take the goods
out of port and then take them to somewhere else in the State
if they don't reach that 21-year-old age threshold because of
the interstate commerce that that is associated with.
So, I certainly don't look at this as an issue that solves,
by any means, everything that is going on with trucker and
driver shortage, but I would love to hear your thoughts on that
specifically as a lane, adjusting the age for bringing goods
out of port to other places in the State for CDL drivers
between the age of 18 to 21 to add a little bit to that
workforce. Would love to hear you guys comment on that.
Mr. Spear. Go ahead, please.
Mr. Guenther. So, thank you for that question, Congressman
Mast. As one of the largest container ports in the country and
one that is served primarily by truckers, we certainly--99
percent of the volume that comes to our port is by truckers,
yes. We live by the fact that we think truckers have the right
to make a good living. So, increasing the availability, that we
saw in availability, that we saw to the pandemic, I think,
certainly adds to and it is a good thing for moving cargo and
commerce. We would certainly support that.
But somebody said earlier, as long as they were certified
and trained and doing whatever, which I am sure they would be,
I think any additional trucking workforce moving goods to and
from our port would be welcome.
Mr. Mast. Thank you.
Mr. Spear?
Mr. Spear. Yes. I think the keyword there is ``training.''
From our perspective, making certain that that block of talent
can safely and responsibly operate the equipment, whether it is
across State lines or not. We would want that in any of the 49
States. That was the beauty of the DRIVE Safe Act. I think you
are working on legislation that is really intended to tap into
this talent pool.
And we have an aging workforce, higher than the national
average. As they exit, if we do not replace those drivers, that
78,000 is going to increase to 150,000 over the next 8 to 10
years. And that is unacceptable. Our ability to service this
economy is going to be inhibited if we don't bring in new
talent.
So, training them, leveraging technology, ensuring that
they have the ability to competently operate this equipment,
and grow in our industry. The pay is remarkable. It is
averaging around $70,000 with full benefits, without a college
degree and all the debt that comes with it. So, we believe that
this is a viable workforce of the future, if we can tap into
that and compete. No differently than our military. And we
train 18- to 20-year-olds to do the unthinkable. Hopefully they
don't have to. I think we can teach young people how to operate
this equipment safely.
Mr. Mast. Mr. Spear, I will make one other quick comment on
this just reflectively, and if you have a response, by all
means give it. But we are the tradesmen committee. We deal with
building things vertically, horizontally. Tradesmen of all
kinds. If somebody were to get into one of those trade programs
to be a journeyman for X, Y, Z coming right out of high school,
the fact of the matter is, it is less likely that that is going
to be their pursuit: trucking and moving our goods. But if
somebody has that same availability at the same level at that
age, then you are probably going to get to capture more
individuals, instead of them moving to one of the other
journeymen professions, hypothetically?
Mr. Spear. Yes, absolutely. And I think the apprenticeship
program, the national apprenticeship program that was put forth
by the Biden administration--we worked for 4 years with the
Trump administration to produce this product. We finally got it
done. This is the gold standard of training. Any company, any
member of ours that amplifies apprenticeship programs that are
nationally registered, that is the gold standard. It shows that
that employer really is focused on training, giving that
employee the skill sets that they are going to need to be
successful long term.
So, I think replicating that is a no-brainer, and we are
really, really pleased to have that national Registered
Apprenticeship Program up and running.
Mr. Mast. Thank you, Mr. Chairman.
Mr. Crawford [presiding]. Thank you, Mr. Mast.
Ms. Wilson, you are recognized.
Ms. Wilson of Florida. Thank you. Thank you, Chair Graves
and Ranking Member Larsen, for holding today's hearing.
As founder and chair of the Florida Ports Caucus, the state
of our Nation's infrastructure and supply chain have long been
among my top priorities because of their impact on jobs. As a
newly elected Congresswoman in 2011, I created a door sign that
read: ``Today marks''--and the number of days--``without the
passage of a jobs bill.''
It took 3,970 days, or more than 10 years, but finally,
under President Biden's leadership, Congress finally passed a
landmark, Bipartisan Infrastructure Law that supports the level
of job creation that I long sought. The Bipartisan
Infrastructure Law, along with the American Rescue Plan and
Inflation Reduction Act, delivered the resources to rebuild our
infrastructure and address the supply chain crisis.
I am especially proud to have been one of five Members
selected to cosponsor this historic infrastructure bill.
Consequently, Florida is receiving $18 billion to update our
highways, bridges, transit, seaports, and airports.
Chairman Graves and Ranking Member Larsen, I look forward
to working with you on a bipartisan infrastructure legislation.
With that, I have a few questions.
Mr. Regan, thank you for bringing attention to the bridge
improvement projects authorized by the IIJA. In my district we
have Broad Causeway Bridge, which connects mainland Miami-Dade
to various cities on the beaches. The Broad Causeway is looking
to use that funding to update the bridge and increase
accessibility.
Can you explain how discretionary grant funding has
benefited the men and women of the TTD?
Mr. Regan. Yes. Thank you for that question.
The grant programs--and we are starting to see the money
really flow now--are just critical towards advancing especially
the building and construction trades that I represent.
But the bridge programs in particular, you look at the
number of structurally deficient bridges around this country
that have been highlighted by the American Society of Civil
Engineers, I mean, we need--this is a--it is an epidemic in
this country that we have so many bridges that are not safe to
drive on right now.
And getting this money out quickly and getting it with
expert union workforce operating on these bridges is going to
be critical to making sure that we have both a more efficient,
but also a safer system in this country.
Ms. Wilson of Florida. Thank you.
Mr. Firth, you stated in your testimony that without the
IIJA, States would have to cut roughly 20 to 30 percent of
their projects.
Can you provide examples of the projects that you were able
to complete because of the IIJA grant programs?
Mr. Firth. We haven't had any IIJA projects yet. We
anticipate, though, here in 2023 that they will be coming out.
So, I don't have any examples for you.
Ms. Wilson of Florida. OK. Thank you.
Mr. Spear, in your testimony you mentioned years of
infrastructure neglect. Can you highlight how the IIJA has
improved working conditions for drivers?
Mr. Spear. Well, I think, as I mentioned, congestion is a
significant concern, not only in terms of the $75 billion that
we lose just sitting idle, but the amount of time a driver
spends sitting idle. That is a lot of time to think about maybe
doing something different with their life.
Moving goods from A to B efficiently is good. It burns less
fuel, it is less emissions, it gets the product where it needs
to be. That means we also pay less for it. So, inflation goes
down.
But the impact that it has on the driver, I can't think of
anything worse, maybe even the dentist, that I would rather not
do than sit in traffic. And 425,000 drivers sitting idle for an
entire year, that is unacceptable.
So, the IIJA has the potential to really target those top
100 bottlenecks and find ways to alleviate that, get the trucks
moving, whether there are more lanes, but get the cars and
trucks moving. That is going to be a huge factor.
Ms. Wilson of Florida. Thank you.
I yield back.
Mr. Crawford. Thank you.
Mr. Burchett, you are recognized.
Mr. Burchett. Thank you, Mr. Chairman.
I have some very hard-hitting questions on COVID, but I
realized I am not in the Oversight and Accountability Committee
right now. So, when I get to the Oversight and Accountability
Committee, I will ask some hard-hitting transportation
questions, Mr. Chairman.
And I do want to thank you all. And I always wonder why we
always thank you all for holding these meetings when it is your
dadgum job to hold these meetings. I mean, I don't understand
that. That is probably why I am not at the schmooze levels that
some of these other guys are. But, anyway, take note.
Mr. Firth, you stated that Federal agencies under the Biden
administration are systematically reversing streamlining
reforms to the National Environmental Policy Act and are
introducing additional requirements to delay infrastructure
projects.
I am wondering, do these changes by the administration
increase these project costs?
Mr. Firth. Absolutely. The longer that the permitting
process goes on, it is less projects that are getting out to be
constructed. That is where different risks as a contractor we
have to be thinking about when it comes to the permitting
process.
Projects for me, working in the Pacific Northwest, for
instance, I will give you the example, fish windows for us. So,
we have to work in the water, say, from July to October. When
those projects are being developed, they are usually having to
get out to bid, say, 2 months before right now, so, in the
fall. And if for some reason that permitting process gets
missed or whatnot, it might delay the project another year or
whatnot.
So, I don't know if that answers your question.
Mr. Burchett. It does.
Why do you think these bureaucrats are making it so
difficult for working folks to complete these infrastructure
projects, just out of meanness or justifying their job? I don't
know. You tell me, brother.
Mr. Firth. I don't have an answer, I guess.
Mr. Burchett. You're afraid to answer? Afraid to get a
project delayed?
Mr. Firth. Yes.
Mr. Burchett. See my buddy Sullivan back there, he is not
smiling. He is like, ``Oh, crap, Burchett, don't say anything
else.''
Well, could the environmental permitting reform speed
project delivery or lower project costs and still protect the
environment?
Mr. Firth. I think so. I think there is definitely an
opportunity there for concurrent reviews and having both sides
work hand in hand. I guess one thing that I always think about
is, is that we need the permits to build the projects. So, in
order to get all this done there has got to be a little bit of
give and take. So, yes.
Mr. Burchett. All right. I will let you off the hook for a
little while. How about that?
Mr. Firth. Thank you.
Mr. Burchett. You are welcome.
Mr. Spear, you like to talk. I am going to give you an
opportunity again.
I am concerned that this administration's EV charging
programs could discourage private investment and would increase
electricity prices for our ratepayers. And it would leave
drivers waiting in remote parking lots and rest areas.
What are your thoughts on that?
Mr. Spear. I think we need a realistic timeline. That
starts with an honest discussion. I really do. I think that
this rush to net zero is missing a lot of key elements that we
all need to be talking about.
Let's just say that we have all the infrastructure across
the country to charge. Let's just say right now that it is all
in place. Where is the power going to come from that goes into
the charging stations? Nobody seems to want to talk about that.
We will consume, just our 4 percent of the vehicles on the
road, will consume 40 percent of all power to charge.
Mr. Burchett. In Tennessee it comes from nukes, coal power,
and hydroelectric.
Mr. Spear. Wherever. But it has got to happen.
Mr. Burchett. Yes.
Mr. Spear. If you are going to have the power to go into
it, if you are going to make us do this, then we are going to
need the power. But also, beyond that, where do the minerals
come from for a 5,000-pound battery?
Mr. Burchett. Slave labor, mostly.
Mr. Spear. Child labor.
Mr. Burchett. I have another question along those lines. I
wonder, do you feel like when we did this rush to do this, this
Government was going to put all these charging stations. And in
my area I worry about the entrepreneurs, the mom and pops who
built these truckstops and gas stations and invested their
hard-earned dollars, and now yours and my tax dollars are going
to put something out on the interstate somewhere that is
unsafe, unregulated into--well, overregulated by the
Government, and not very well thought of.
What do you think?
Mr. Spear. Look, I think that the markets have to dictate
this. Markets reflect reality, and these timelines that we are
facing don't. And we need an honest discussion about getting
there.
Because what is going to happen when we get to these
timelines, like California, 2035, that is 12 years away? It is
going to fail. It is going to be embarrassing. They are going
to be issuing all these exemptions because they rushed to zero
and didn't take into account all these realities.
And what I am saying to you is, we are going to get there
eventually, let's just be realistic about it. And I think what
we are dealing with right now is impactful on the supply chain
and what we pay, inflation, because we are not going to be able
to deliver the goods because we don't have the equipment to do
it.
Mr. Burchett. My time is up. Mr. Chairman, I yield back no
time.
Mr. Crawford. I would love to yield you another 5 minutes
just for the entertainment value, but I need to go to Mr.
Carbajal.
Mr. Burchett. Our ratings would go way up. I understand now
two people are watching this back home.
Mr. Larsen of Washington. And I would object. And I would
object.
Mr. Burchett. I know you would, Mr. Chairman--Mr. Ranking
Member. Excuse me.
Mr. Crawford. Mr. Carbajal, you are recognized.
Mr. Carbajal. Thank you, Mr. Chair.
Mr. Crawford. Correction. I am sorry, Mr. Carbajal. Mr.
Payne is actually next.
Mr. Carbajal. I thought I was getting ahead. Thank you.
Mr. Crawford. So did Mr. Payne.
Mr. Payne. I got worried there for a minute.
But thank you, Mr. Chairman.
And I would like to thank Chairman Graves and Ranking
Member Larsen for their leadership.
And just a quick note. Mr. Spear, Mr. Jefferies, I am glad
the point that you made in reference to trucking and rail
working together. I need you to think about this as a relay
team, as opposed to an adversarial relationship. The rail has
the baton, and they pass the baton to the trucking to get to
the finish line. So, please let's look at this in that manner.
I appreciate you calling this hearing today so we can
examine the challenges facing our transportation network. Last
year, the Railroads, Pipelines, and Hazardous Materials
Subcommittee held two hearings to examine rail service delivery
problems.
The Surface Transportation Board held an emergency 2-day
hearing on freight rail shipping delays and their impact on
Americans. Rail shipping delays over the past years have
resulted in shortages in the agriculture and energy sectors.
Freight railroads have halted shipments to certain parts of the
country because they lack the capacity to provide adequate
service.
As a result of these problems, the Surface Transportation
Board has had to issue emergency service orders and service
recovery plans to ensure that freight railroads are serving
their customers.
Mr. Jefferies, a yes or no, please. Do you feel that
freight railroads have enough workers to handle the current
demand for rail shipping?
Mr. Jefferies. Well, certainly that has been front of mind
over the past year. And you are right, we certainly had
significant service challenges over portions of the last few
years.
Mr. Payne. So, is that a yes?
Mr. Jefferies. I am getting to that.
Mr. Payne. Well, that is really in the interest of time.
Mr. Jefferies. Sure thing. We have been hiring aggressively
over the past 18 months, and we continue to hire in certain
regions around the country, so, we are still leaning into that
and those efforts still continue.
Mr. Payne. Thank you.
The Surface Transportation Board says that long-haul
intermodal truck traffic has grown 20 percent more than rail.
Between April and September of 2022, the four big railroads
added just 420 total train and engine employees--420--an
increase of less than 1 percent.
Mr. Jefferies, we will try it again. Yes or no, are the
railroads scaling back hiring plans due to softening demand?
Mr. Jefferies. We continue to hire as we stand here today
and that number is actually 9 percent year over year when it
comes to employee increases of T&E.
Mr. Payne. So, you are saying it is more than 420?
Mr. Jefferies. I am sorry?
Mr. Payne. You are saying it was more than 420?
Mr. Jefferies. I am saying that.
Mr. Payne. OK. We will check that.
And with the time I have remaining, I would like to ask Mr.
Regan, who represents these workers, if his members shared the
assessment of the state of the freight railroad industry. And
if not, how do the men and women working for freight see the
state of their industry?
Mr. Regan. Thank you for the question.
I think, as we saw very clearly last year, the morale among
freight rail workers has never been lower, at least in my
experience. They are frustrated, they feel overworked. A lot of
the focus on attendance policy, and, yes, sick leave and other
issues, I think are a direct result of the insufficient
workforce levels.
I think if we are able to deal with some of those and
continue to improve on some of the gains that were made in that
contract that was resolved, I think that we will start to turn
the industry around.
And I assure you, nobody wants to see a growing, more
robust freight rail industry than the members that I represent.
They are proud to be railroaders and they want to continue to
do it, but they need to see a change in the operating
mechanisms right now, in the operating systems, so that they
can return some degree of quality of life to their work.
Mr. Payne. Thank you.
And with the few seconds that I have left, I would be
remiss if I didn't mention that I am going to continue the
effort. It is good that the salaries went up fivefold, but that
was not what the workers were asking for. They were asking for
sick time, and that is something that we need to address.
It is great that their incomes have gone up, but they were
interested in sick time, as probably all of you sitting at that
panel have in your capacities, in your positions. And they
deserve it as well. And I will continue to fight for that.
And with that, I yield back.
Mr. Crawford. Thank you.
Mr. Garret Graves, you are recognized.
Mr. Graves of Louisiana. Thank you, Mr. Chairman.
Thank you to the witnesses for being here today.
It has been interesting. Last Congress, we had the
infrastructure bill and we spent, gosh, I think 24 hours or so
in this committee marking up a bill that, with the exception of
a handful of provisions, was largely ignored and a Senate bill
became law.
There is no question we have a supply chain problem. There
is no question we have a labor shortage. There is no question
that we have inflation issues. There is no question that what
is happening with energy prices is having a profound impact on
your industry, on the ability to carry out logistics around the
United States and around the world.
But when I look at legislation like the IIJA, the
infrastructure bill that became law last Congress, I look at
things like mandates on trying to transition us to electric
vehicles. I look at simple math problems where you literally
could not produce enough minerals to develop the battery
storage or the electric engines or other things that are
required under the bill. And then I look at the problem we are
having in supply chain right now where we are not investing in
roads because funds have been diverted to EV charging stations
or other things.
And the reality is that the legislation has exacerbated the
problem that you are already experiencing in your industry:
trying to get goods around the United States and around the
world.
And so, one of the things--and I know the chairman shares
my concern--is that we are going to be looking at kind of how
to recalibrate that bill and reprioritize the dollars in places
where they are actually needed to complement your efforts to
address supply chain issues and again try to address the worker
shortage and other challenges that we have.
I want to--I am going to take the conversation a little
different. One of the things, I think, lessons we have learned
from what has happened with energy over the past couple of
years, we have moved in a direction first that made us more
dependent upon Russia for oil, and that hasn't worked out so
well. Now looking at where we are being forced into a renewable
energy direction.
And I want to be crystal clear, I support renewable energy
technologies, I support reducing emissions, but I also support
doing it in a way that makes sense. And what we are doing right
now is we are forcing greater dependence upon countries like
China.
And I am curious if any of you have thoughts on how we
should be looking at this a little bit differently. For
example, looking at NATO or NATO Plus as more than just a
military organization, looking at it like a supply chain and an
economic alliance as well.
And that way we have more secure, more allied resources
that we are dependent upon, and we are not subjecting ourselves
to the volatility of some of these countries that we are not
friends with, that are simply going to use their resources as
leverage, as we have seen China do with some of the critical
mineral markets they have cornered around the world, including
processing and refining of those minerals.
Anyone?
Mr. Spear. I think sourcing is key. If you are going to
build out a transition to an alternative source of energy, say
electric, those batteries are going to have to have the
minerals. And it is not coming from China, it is not going to
come from Congo. So, where are we going to get them? It is
going to have to come from here in North America.
So, these are key questions, and they take time to develop,
not just 12 years, but beyond. And we are fine in transitioning
to that as the market dictates. I think there has to be some
give and take with that. Rushing to zero is going to cause
havoc within the supply chain and economy if we are not careful
about it.
But I hear what you are saying about friends. You are
creating good trade relationships. We haven't seen too many
trade agreements come down the pipe lately. And I think we
really need to focus on shoring that up.
If we are going to transition away from China, we are going
to have issues with Europe, certainly about sourcing in Africa,
then we need to have better, stronger trade agreements that
allow us access to these minerals and can manufacture sensitive
things here at home. That is going to be very key.
Mr. Graves of Louisiana. Thank you. And I want to make note
that you said transitioning to zero is effectively going to be
painful. And I want to make note that the United States has led
the world in reducing emissions. For every ton of emissions we
have reduced, China has gone up by four. We are not headed in
the right direction. All we are doing is penalizing the U.S.
economy at the same time.
Anyone else?
Mr. Jefferies. I would align my comments with Mr. Spear's
that energy security is all about working with trusted allies,
stable allies, and identifying trusted sources for the
materials we need.
We all, I think, are headed in the same direction when it
comes to reducing emissions and alternative forms of energy.
But while we work on that path, we have got to maintain stable,
trusted resources for the fuels that supply us today.
Mr. Graves of Louisiana. Thank you.
And I know Mr. Stauber is probably chomping at the bit
looking at this forced direction into renewable energy
technologies, while at the same time shutting down two mining
operations in Minnesota, one in Arizona. It seems entirely
incompatible or even contradictory with the objectives of the
legislation and some of the stated commitments in terms of
targets and reductions. So, we certainly need to be thinking
about this a little bit differently.
I yield back.
Mr. Crawford. Thank you, Mr. Graves.
Mr. DeSaulnier, you are recognized.
Mr. DeSaulnier. Thank you. And I will say thank you to the
chair and the vice chair for having this hearing.
The context of my comments, I want the panel to realize and
my colleagues, it is in getting this investment right, who
benefits from it. I am not against private equity getting a
reasonable rate of return. It is an important partnership. But
I would argue that right now we are at the most historical
divergence between capital as a percentage of GDP and wages.
So, we have got to reduce that and create a new middle class
that President Eisenhower championed.
So, that context, on the air quality side. Sorry my
colleague left. As a former air regulator in California, I am
one of those bureaucrats. I think we were motivated--and I was
a Republican at the time--by doing what the Clean Air Act said,
which was signed by a Republican California President, Richard
Nixon, and updated by a Republican California President that
created the waiver, the California waiver.
So, this isn't 12 years in the future, as I look at it.
George Deukmejian, who was Governor in the 1980s, a Republican
conservative, he introduced a zero-emission vehicle.
So, Mr. Spear, you know that we have been working at this
for a long time. The challenges are not unknown to California.
Most of the reductions that my colleague just referred to came
because of the California waiver and the 12 or so States who
join us under that waiver.
So, in that context, Mr. Spear, you mentioned President
Eisenhower. One of my favorite quotes by President Eisenhower,
he said: ``Only a fool would try to deprive working men and
women of the right to join the union of their choice.'' And
President Eisenhower said that when GDP was at historic records
because we were building an amazing middle class.
So, President Reagan--another President Reagan--started
cash buybacks or started the acceleration on open-market
buybacks.
So, what is the right rate of return for an investor and a
taxpayer and an employee, a worker, a union worker under Davis-
Bacon, for Congress to be looking at? And this is in the
context of--and I am not specifically saying rate of return, I
would just like you to talk about your members and the
multiplier.
As a former small business owner, the multiplier for every
one of your jobs, if memory serves me, is about 13, 14, which
all goes out to small businesses in rural and urban areas.
So, it is really important that your investors get a
reasonable rate of return, but that Main Street gets a
reasonable rate of return, if we are going to rebuild that
middle class.
So, just for instance, the rail industry has had more open-
market cash buybacks in 2021 than ever before, you are more
profitable than ever before. Granted, you are a semi-utility,
so, the profit margin is smaller. But there is historically
supposed to be low-risk, reasonable return, not low-risk, high
return, from my perspective.
Chevron, which is headquartered, back to the environmental
question, in my district, has a lot of employees. They just did
$75 billion in cash buybacks on the back of inflated gas prices
during COVID. That is not going back in the refinery in the
county I represent. That is going off.
UP did $4.6 billion in cash buybacks in 1 year--no, wait,
$4.6 billion in payroll and benefits, but they did $6.3 billion
in cash buybacks.
So, Mr. Regan, could you talk a little more about what you
said in your introduction about the balance between returning
that investment to the workforce and capital investment in the
infrastructure versus it going back to the shareholder at
obscene rates of return?
Mr. Regan. Yes, thank you for that question.
I think that as we are looking at investing, especially the
sums of money we are talking about right now with the
Infrastructure Investment and Jobs Act, we should be using it
as an opportunity to rebuild the middle class and ultimately to
invest in the people in this country.
And to your point, when people have a stable wage, when
they have a middle-class wage and good benefits, they are
returning that money into their local economy. They are
spending it at their local stores, at the local small
businesses. They are sending their kids to college. They are
doing all these things because they have the opportunity, they
have a wage that allows them do that.
And when you look at certainly a lot of the industries that
I represent, even the private sector, we are the antidote to
this idea that unions kill businesses.
Look at the airline industry where they were at the highest
profitability they had been in their history before the
pandemic, and that is 85, 90 percent unionized right now.
Railroads are at the highest profitability they have been in
the history of railroading. They are wall-to-wall unionized.
We can be really good partners in advancing a better
system, but we also are going to expect that our members are
paid fairly.
Mr. DeSaulnier. Thank you, Mr. Chairman. I yield back.
Mr. Crawford. Thank you.
Mr. Stauber, you are recognized.
Mr. Stauber. Well, thank you. Thank you very much. Great
conversation.
I know the supply chains have been really a big issue, in
particular under this administration, and the decisions
thereof.
And I want to say great work to all of you for doing what
you need to do, making the decisions that you need to make to
overcome this.
Mr. Graves was talking about supply chains and with respect
to critical minerals. But before I get into that, Mr. Spear, I
just have to make a comment.
I appreciate what you said. Three weeks ago, a friend of
mine took his brandnew electric pickup truck down to the
Vikings game, U.S. Bank Stadium in Minneapolis. Plugged it in
on a charger during the game. Unfortunately, we lost. He lives
164 miles north of Minneapolis. He had to stop twice for 45
minutes each to charge his vehicle. So, it took him 2\1/2\
times the travel time to get home.
To your point, we have to link that conversation. And in
linking the conversation, we have to talk about critical
minerals and supply chains.
The Duluth Complex, located in northern Minnesota, has 95
percent of our Nation's nickel reserves, 88 percent of our
Nation's cobalt reserves, over one-third of the copper and
other platinum group metals. This administration just banned
mining in northern Minnesota for 20 years.
Mr. Regan, they are my friends, they are union jobs,
project labor agreements. Where are we going to get these? And
I am telling you what right now, I think you all know this, our
adversaries that control the critical minerals, it is going to
dry up for us. They are not going to sell. They are going to
pinch the United States, and we cannot get these mines up
overnight.
So, I am asking your industry to push back against this
anti-mining stance from this administration.
And it is not only in northern Minnesota--where, by the
way, we have mined taconite, that makes over 80 percent of the
iron ore--or 80 percent of the steel in this country, which is
a national security and a strategic national security interest
to build our roads and bridges.
We have to bring that sourcing back. I hear everyone during
their testimony and reading their testimony. We have to control
the destiny of this country in the palm of our own hands with
the natural resources that we are blessed with.
We have an administration, in October of 2020, then-
candidate Joe Biden said we are going to mine these critical
minerals domestically. What? We thought that was awesome for
northern Minnesota, awesome for our miners across this country.
What did he just do? He took out the opportunity to mine
these minerals here under the best environmental standards and
the best labor standards.
Just over a month ago, he signed a memorandum of
understanding with the Congo, which has 15 of the 19 mines
owned by the Chinese Government. This is where we are supposed
to get our critical minerals? Give me a break.
This is a dangerous administration to our country when it
comes to supply chain and critical minerals and mining. The
anti-jobs and anti-mining stance has to stop. And you, I am
asking you and your associations to help. As an association,
push back on this anti-mining stance, push back on us relying
on adversarial nations for our critical minerals and their
processing.
And we talked about reforms. Should it take 10 years to
build a bridge? Should it take 10 years to build a bridge in
California, Minnesota? Should it take 20 years to open up a
mine in northern Minnesota? In the same watershed the country
of Canada, our friend, opened up a gold mine, same watershed,
in 3 years.
Please do your part and push back. I will help you advocate
for that.
We lost multigenerational union jobs because of that
political decision. Didn't even let an environmental impact
statement move forward--that is the process--for political
reasons. Killed great-paying jobs for my constituents.
So, I am asking on behalf of the mining community, on
behalf of our strategic national security, you have a voice in
this, and join me.
And I yield back.
Mr. Crawford. Thank you.
Mr. Carbajal, you are recognized.
Mr. Carbajal. Thank you, Mr. Chair.
Mr. Regan, we know that to maintain a healthy supply chain
we need to continue to support the Jones Act, cargo preference,
and Maritime Security Program. The pandemic was a perfect
example of the need to move away from relying on foreign
carriers and mariners.
As chair and now ranking member of the Coast Guard and
Maritime Transportation Subcommittee, I have been a supporter
of bolstering our U.S. maritime sector.
Can you expand on the benefits of enforcing and expanding
the programs that bolster the U.S. maritime industry, including
the Jones Act, cargo preference, and Maritime Security Program?
Mr. Regan. Thank you so much for the question.
You just named the three-legged stool that keeps our
maritime system afloat as it is. But even with that, we have
over 98 percent of all goods that go into and out of U.S. ports
are shipped on foreign-flagged vessels. We have simply ceded
away any sort of sealift capacity to our competitors.
And we see, frankly, the consequences of that when, for
example, we are trying to get goods out, there is a shortage of
containers, there is a shortage of space on board ships, and
they are not taking our goods.
What we need to be doing is instead of trying to whittle
away at these programs like cargo preference, we need to be
fully enforcing them. We need to be advocating for more U.S.-
built vessels. We need to be advocating to ensure that every
time we are shipping goods overseas on the Government dime that
we are doing it on a U.S.-flagged vessel with U.S. mariners.
Because once we do that and we start expanding their
capacity, we are going to generate more business and we are
going to grow the mariner population, and we will be more
competitive and less reliant on foreign shipping conglomerates.
Mr. Carbajal. Thank you.
Mr. Regan, I continue to read industry reports about the
ongoing mariner shortage and the lack of new mariners entering
the industry. This is obviously an issue of deep concern.
Simply put, the current mariner shortage is a national
security issue, as you pointed out as well, and that the
Department of Defense cannot do its job if the maritime
industry cannot supply enough mariners to support the DoD
sealift readiness capacity for contingencies such as global
conflicts.
While I understand that the core of this issue has to deal
with recruitment and retention, what can Congress do in the
short and long term to shore up the pool of qualified mariners
working in the industry?
Mr. Regan. Thank you.
In the short term obviously we need to invest in the
training schools that are out there. It does take 10 years for
an entry-level mariner to become a chief engineer or a captain.
So, there is a growth period there.
But one thing we can do to attract more people into the
industry certainly is to improve the onboard experience for
mariners, so that we have to have better connectivity so people
can speak with their family, better access to internet.
We also need to make sure that it is a safer environment. I
think there was a lot of publicity about some really horrific
sexual assault allegations that happened on board ships, and
that has absolutely no place in the U.S. maritime industry.
And if we don't address some of those problems, and I know
the unions I represent are focused on making sure that that
never happens again, we are basically casting aside half of our
population who would be potential mariners for what is a very
good job, one you can go see the world with.
And so, we need to make sure it is a safer, better
workplace for everybody.
And then, finally, I think we need to invest in more
opportunities so that there are options for shoreside work for
employees so that we can have a continued pool of mariners that
are available to operate on ships but continue to do that work
if there are not opportunities at that very moment.
Mr. Carbajal. Thank you. I was going to ask you to say
shoreside 10 times, but I won't.
Mr. Regan, while the Bipartisan Infrastructure Law provides
over $60 billion in Federal dollars for rail infrastructure, I
know we need to do more to improve passenger rail and freight
rail services.
In your testimony, I know you highlighted the need to
invest in workers. Can you delve into what that means, what you
mean by that?
Mr. Regan. Yes. I think, again, going back to what I said
earlier about making sure that we are investing in the
workforce while we invest in expanded services. And I certainly
believe that the money that was invested into Amtrak through
the infrastructure law is going to be the catapult to get us
towards a true national passenger rail system and one that is
more efficient and a better option for people in communities
large and small. But we do need to have a workforce to be able
to do that.
I am very happy to see that Amtrak is aggressively hiring.
They had a goal of 4,000 people in fiscal year 2023 in order to
hire that many new people into Amtrak. They hired over 3,000
people last year.
When I talk to Stephen Gardner, the CEO of Amtrak, that is
the number one thing on his mind, is how do we hire more people
into the railroad.
And so, I think that as we start doing that and
demonstrating this is another really good middle-class job, we
will have the workforce to make a passenger rail system that we
can be proud of in this country.
Mr. Carbajal. Thank you, Mr. Chairman. I am out of time. I
yield back.
Mr. Crawford. Thank you, sir.
Mr. Nehls, you are recognized.
Mr. Nehls. Thank you, Mr. Chairman.
I would like to thank the witnesses for being here today. I
think this is wonderful. We are all together, meeting in
person. Just what a treat that is.
And it is no secret that the transportation sector has
experienced a series of supply chain issues, some resulting
from the pandemic and others obviously resulting from the
policies of this administration.
And so, Mr. Guenther, certainly good to see you, sir. Good
to see you this morning.
My question to you is from a port perspective. What is the
best investment we can make today to minimize another supply
chain crisis in the future?
Mr. Guenther. Thank you for your question, Congressman.
Talked about it a little bit today, making those investments in
the channel again and the operation and maintenance, but also
making the investments of future development of our ports and
waterways.
So, we talk about seaports are a critical link, they are
served by the waterside with our channels but also on the
landside. And looking for those opportunities to continue to
grow to efficiently handle our cargo is very important.
And it was mentioned earlier about the IIJA and the amount
of funding that has been made available in the last $2 billion,
I believe, in fiscal year 2022 and $1 billion in fiscal year
2023. But to maintain our channel, for instance, we have got
$12 million for the Houston Ship Channel.
So, we have to emphasize, if I answer your question, we
have to emphasize the important things, whether it is on the
waterside, whether it is on the landside, to make sure that we
keep freight moving.
Mr. Nehls. Yes. And in your testimony it says that the
Houston Ship Channel has been underfunded by 50 to 60 percent
as it relates to O&M dollars. Is that correct?
Mr. Guenther. That is correct.
Mr. Nehls. All right.
It is my understanding also that draft restrictions are
going to occur in March. What changes do I and others of the
Houston delegation, Houston Members, need to be aware of to
prevent this from happening again? In other words, what is the
long-term fix for this issue?
Mr. Guenther. Well, the short-term fix is inevitable. We
talked about it, hey, do we throw money at it to fix this? But
the long-term solution is looking at the need based upon the
tonnage that is served by these waterways, like the Houston
Ship Channel, and making sure that those dollars are invested
to keep the channel maintained to its authorized depth and
width, and we have to do that.
Mr. Nehls. Thank you, sir. I can assure you that you have
my attention.
Mr. Jefferies, I would like to zero in on regulations
affecting the rail industry. Often we hear about automated
technologies in the transportation sector with media coverage
and attention given to the other industries, like the autos and
drones.
In your testimony you mentioned ATI, which is automated
track inspection, has resulted in some instances more than a
90-percent reduction in the rate of unprotected main track
defects found.
So, my question is, how is FRA preventing railroads from
implementing these kinds of safety-enhancing technologies? And
can you provide some examples, sir, how this sort of technology
reduces supply chain issues?
Mr. Jefferies. Sure, that is a great question.
The role of a safety regulator should be pretty simple: to
advance safety, to advance safety in an objective, data-driven,
transparent way, not to call in political favors, not to play
politics, not to seek other outcomes.
And we are running into roadblocks in deploying
technologies and advancing innovation in this industry that has
undeniable safety benefits.
Automated track inspection allows a railroad to inspect
vastly more track, with a vastly higher level of frequency,
with a vastly more sensitive technology that allows for
detecting potential defects before they become issues at
upwards of a 90-percent higher rate.
Undeniable safety benefits. So, you would think the
regulator would welcome that. Well, why are we in litigation to
be able to expand that test program--test program--to continue
to build out the data set, to eventually roll it into the
regulatory requirements, again modernizing the regulatory
process?
Two, the crew size NPRM has come up. Again, the role of a
safety regulator should be to advance safety. There is
absolutely no data in that NPRM to support the rule moving
forward, there is no safety outcome. And if it is a safety
issue, why doesn't it apply to passenger railroads?
Mr. Nehls. And I am looking forward to hearing more.
I am going to end with this. It doesn't get much attention,
but I think it is relevant since we are discussing supply chain
issues.
Bathroom access for truckers. I said, what the hell do you
mean, bathroom access for truckers?
Folks in the room, imagine you went to the office and you
are there after a long commute. And you said, I would like to
use the bathroom. And they say, sorry, it is not available, you
are going to have to hold it for a couple of hours. It makes no
sense to me. I thought it was ridiculous.
So, we partnered with Representative Houlahan and OOIDA and
Women In Trucking on the Trucker Bathroom Access Act to get
this figured out. I encourage my colleagues to support this
bipartisan legislation that ensures our truckers have access to
a business' restroom when they are making a pickup or delivery.
I am kind of smiling here. I said, I can't believe Congress
has to address this issue.
Again, it is bipartisan, just plain common sense. I will do
everything I can to ensure this bathroom bill becomes law.
Thank you. And I yield back.
Mr. Crawford. Thank you.
Mr. Stanton, you are recognized.
Mr. Stanton. Thank you very much, Mr. Chairman.
As we continue to implement the Bipartisan Infrastructure
Law, few States stand to benefit more than my home State of
Arizona.
For the communities I represent, one of the top
infrastructure priorities for years has been 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 more than that, it is also 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.
But despite being such a vital connection for freight and
commuter traffic, there is still a large section, 26 miles,
that is only two lanes.
Every Arizonan who has taken I-10, myself included, will
tell you that these two lanes are not enough. It causes heavy
congestion and daily bottlenecks, and a single crash or
disabled vehicle can back up traffic for many, many miles.
Not only is that inefficient and costly for people doing
business, it is a serious public safety concern.
The need for expansion is clear, but despite a substantial
non-Federal investment by the State and support from the local
Tribal and business stakeholders from across the region, we
were disappointed and, quite frankly, very frustrated not to
receive Federal funding under the Bipartisan Infrastructure
Law's Mega grant program to finally complete this critical
project. And when 90 percent of the Mega grant funds were
directed to projects east of the Mississippi, I can tell you,
Arizonans and our regional partners feel left behind.
Like many States, Arizona cannot meet its growing needs,
including on projects of regional significance, like the I-10
expansion, on its own. We need Federal support. We need a
Federal partnership.
It is clear to me that the allocation for Mega grants is
not enough to advance many projects like an I-10 that must get
done. It is my hope and expectation that I-10 will receive
Federal support necessary to get its expansion across the
finish line.
My question is for Mr. Spear from the American Trucking
Associations.
Mr. Spear, good to see you.
Mr. Spear. You too.
Mr. Stanton. I understand the ATA strongly supported the
IIJA and that the American Transportation Research Institute
works with the Department of Transportation both to identify
key points of congestion along our Nation's highway system and
to quantify the impact of that congestion.
Given the enormous amount of commerce that moves along I-10
in Arizona, the expansion project the State has advanced has
enormous national significance for our supply chains and for
trucking in particular.
Can you speak to the impacts that congestion has on supply
chains and the importance of investment in projects like the I-
10 expansion?
Mr. Spear. I can. Thank you.
And I am well aware of that stretch. I have driven it. My
wife just drove it last weekend. And it is a problem. It is one
of the choke holds in the country that needs to be addressed.
And it is not just safety, albeit that is the top priority.
It is fuel burn. Fuel burn creates emissions when we are
sitting in congestion, as I have talked about earlier. This is
a key point the IIJA can alleviate.
And we come out every year with the top 100 bottlenecks.
Your State has one, as you just stated. And they are not
difficult to track. We do this with DOT initiatives. We have
GPS that tracks them. We can see the speeds. It is a heat map,
shows every red spot around the country where we have
congestion.
If you are looking for the top 100 priorities to go after,
alleviating the supply chain contraction, creating better
safety, better environmental controls, go after the top 100
bottlenecks.
It is an easy list. It just so happens it comes out next
week, so, stay tuned. We do this every year. We will be
shipping it up to all of you. You can see if your districts or
States are among them.
There shouldn't really be any surprises in there, and that
should be the roadmap for DOT and States to target. It will
have such great gains for the economy, lowering inflation by
getting goods to where they need to be faster. We are all going
to be paying less as a result.
So, I could not agree more that that is a good way to
prioritize.
Mr. Stanton. That's right. It is also an important equity
project because much of that land where the expansion would be
is on the Tribal community of the Gila River Indian Community
as well.
Thank you for that answer.
I yield back.
Mr. Crawford. Thank you.
Mr. Owens, you are recognized.
Mr. Owens. Thank you so much.
I want to also add my thanks to the witnesses here. What a
remarkable insight and education we are getting here.
I am excited about being part of this committee or this
team and adding some of the innovation and collaboration and
the entrepreneurial spirit that Utah has to this conversation.
A couple comments and then a question that I want to follow
up with that Mr. Mast asked you, Mr. Spear.
Well before coming to this industry, I had a passion to end
and deal with sex trafficking of women and children. It is a
passion. It is a big mission for a lot of us in Utah.
And I will say this. Well before hearing it today, being in
front of you guys, I have heard about how the stakeholders all
are thankful for the trucking industry for the awareness that
has come about throughout the years.
Many people won't talk about it. They don't see it. But the
industry saw it. And I have had an opportunity to meet a victim
that was rescued through this process. So, I want to thank you
guys for being aware and working on that.
The other thing is, I was in the software industry for 30
years, and I was also an independent contractor on the side.
Why? Because it was not my goal to have another employer. I
wanted to have my own business to one day be free of someone
else having on their own whim drive my career.
The greatest sector in our country is the middle class, and
it is powered by business owners. So, let's never forget that.
And any time we take this option away from business owners we
are going to hurt our culture, our future, and the idea to
dream past somebody else's whims. So, I just wanted to make
that point.
Mr. Mast was asking you about the workforce supply chain.
And obviously we are talking about 18 to 21. Is there anything
else that Congress can do or not do? As we understand, we have
to mitigate the fact that we are graying out in all these
industries, some kind of way we have to bring these young
people in, knowing there is income to be made, and they can
pursue their dream at a much lower cost getting into the
process.
Is there anything else we can start looking at--and I want
to start off with you, Mr. Spear--that can help us to either
get out of the way or to allow this process to move and get the
supply chain moving a little bit faster with the workforce?
Mr. Spear. I think it starts with training. Greg and I are
actually friends. We have some differences obviously, but I
don't think you will ever hear either one of us talk or devalue
training, the importance of it, especially with entering
talent.
Whether it be 18 to 20 or anyone coming into our industry,
we want to make certain first and foremost that they can safely
and responsibly do their job. We want them to get home to their
families at night safely. That is something we should all want.
So, training is absolutely paramount and ensuring that they
have the right standards in place across the board. Entry-level
driver training comes to mind. This is a rulemaking that we do
support.
I think exemptions for certain folks to not comply with
that, based on what segments of our industry they are in,
create inconsistencies in that. I think we all need training. I
go through it myself at work. We are aware of a lot of things
in our work environment that are reoccurring every year and we
remind ourselves of that.
So, I can't emphasize that enough, the importance of it.
Developing a good workforce to replace those that retire and
exit is absolutely critical on training.
Mr. Owens. Mr. Jefferies, would you like to add to that?
Mr. Jefferies. Absolutely.
The training piece is critical. We are immensely proud of
our workforce who does a remarkable job moving America's
freight day in and day out, doing it safely.
And these are strong, middle-class jobs. We have 12 unions
on our properties. Average wages and benefits of $160,000 with
some of the best healthcare, some of the lowest employee cost
shares of any industry out there. And that is something you can
do on a GED. That doesn't happen a lot in this country anymore.
And so, Greg and I are aligned on those goals. We can
debate about a lot of things, but I think that strong, well-
compensated workforce is key.
Chris mentioned the drug testing issue earlier. That is
something that affects our industry equally as much. We bring
in classes of prospective recruits. We wash out upwards of half
of them on day 2, once they realize there are drug testing
requirements, Federal drug regulations. We have got to continue
to work on that front.
And then really just at a broader level, it is all about a
pro-innovation, regulatory modernization push, encouragement
from this committee about really pushing technology, all in the
advancement of safety and efficiency. It has got to be
supported by data. If the data doesn't support it, it doesn't
make sense.
But really a push that looks toward the future versus
looking backwards. We still have regulations from the steam
engine era on our regulatory books. So, there is a lot of
opportunity for wins.
Mr. Owens. Well, thank you. And again, I think we realized
over COVID that this is truly the backbone of our country,
moving product and building the business of the middle class.
So, thank you so much for that, and I look forward to working
with you for sure.
Mr. Crawford. Thank you, sir.
Mr. Allred, you are recognized.
Mr. Allred. Well, thank you, Mr. Chairman.
And I want to thank our witnesses for their testimony. I
think this is an important hearing. And I look forward to
continuing our committee's focus on alleviating supply chain
disruptions and making sure that consumers and businesses can
get the goods that they need.
I am a cochair of the Supply Chain Caucus here in the
House, and I am pleased at some of the progress that we have
made. And I know that we have a lot more work to do.
Mr. Guenther, I want to begin with you, because obviously
as a Texan, not from Houston, but from Dallas, the story of the
Port of Houston is informative, because in your testimony, as
Mr. Nehls mentioned, you noted that the Houston Ship Channel
has been underfunded by 50 to 60 percent, resulting in draft
restrictions throughout the channel.
And when we talk about important investments, like we are
making in the IIJA, this is why we want to make these
investments, so that we don't then, when a crisis comes along,
have to come in here and ask you, why is the Houston Port
Channel not operating to max efficiency?
What does a draft restriction mean for you, just for my
constituents back home, what does that mean for them?
Mr. Guenther. It is pretty simple. We have a 45-foot
operating draft and we have a 45-foot channel that goes through
a bay that naturally wants to be 7 or 8 feet. It is continuing
to silt in. So, if it silts in without regular funding and gets
to 43, 42 feet or whatever, it restricts the amount of cargo
that the ship can carry, costing more money.
Mr. Allred. So, you have ships sitting out in deeper water
oftentimes, right? And you will have to have----
Mr. Guenther [interrupting]. They actually don't load
because they know how deep the channel is before they leave
their origin.
Mr. Allred [interrupting]. Well, because they know they
can't----
Mr. Guenther [continuing]. So, that limits what they can
put on from the beginning.
Mr. Allred. And so, it has a cost to our overall economy.
Obviously, as the biggest regional port, it has huge costs to
our region. That is why these investments are so important.
That is why I find it a little bit frustrating when people
will say they didn't support the IIJA. This is historic
investment. It might not be everything that you wanted. It is
not everything that I wanted. But for the first time in
decades, we finally said we are going to make a serious
investment in American infrastructure, and we are going to try
and address some of these issues.
As you know, I have supported full Federal funding for the
Houston Ship Channel, and I want to make sure we do that.
And I know that there are ripple effects from your port
that we feel all the way in Dallas. You mentioned the need for
investments to plan for future demand to ensure incoming cargo
has a place to go instead of sitting at the port. I know many
of the cargo distribution centers are in my district in Dallas.
And so, I am wondering how ports can work with other
sectors of the supply chain to manage demand and move cargo
more efficiently.
Mr. Guenther. Well, thank you for that question. And we
know Dallas is a big hub for distribution centers, and a lot of
that cargo comes through the port.
An example of what we have looked at is things that maybe
we wish we would have had during the supply chain, like either
nearby inland depots or further away to be able to move freight
through, to move ships faster, and we didn't have that
capability.
We applied for a Mega grant, too, because we thought that
that kind of met the needs of what was necessary for the supply
chain to remain fluid in the future. We weren't selected for
this grant cycle, but we certainly have a plan of fine-tuning
that or whatever.
But those types of investments, I keep talking about the
waterside, but also it is very important on the landside, the
opportunities to perhaps move freight more efficiently, nights,
weekends, and utilization of off-hours and during those times.
And that infrastructure investment is very important in making
that happen. So, thank you for your interest in that.
Mr. Allred. Well, thank you. I appreciate it.
Mr. Regan, as we talk about workforce issues, I am a former
union member myself in the NFL Players Association. To me, we
make jobs more attractive until you get young people to go into
them. So, it is a career that they can make a good wage in,
they can be treated right, and they can retire with dignity.
What do you see in the implementation of the IIJA that we
need to be doing better by our union workforce?
Mr. Regan. Yes. Thank you for that. And I couldn't agree
more. I think if you look at one of best ways to have job
retention in any industry is have a union, because we are there
fighting for you, someone has got your back.
And for us, you look at the way we are investing, and we
are lucky enough in transportation to have one of the highest
union densities of any sector in this country. And that is, in
my view, why transportation has been for so long an oasis of
middle-class jobs, an area where too often we have seen wage
suppression in this country.
Transportation has high union density, and because of that
we have a lot of people who are able to deliver for their
families and have good wages and benefits.
Mr. Allred. Well, thank you, Mr. Chairman. I know I went
over. I yield back.
Mr. Crawford. Thank you, sir.
Mr. Yakym, you are recognized.
Mr. Yakym. Thank you, Mr. Chairman.
It is clear that reckless spending from the last 2 years
has stoked runaway inflation. From the food on the table to the
table itself, to the trucks and trains transporting the food
and tables, Americans were hit hard in the last 2 years with
inflation.
I am looking forward to working with my colleagues to get
inflation under control and put our fiscal house in order.
By definition, inflation causes your dollar to go less far
than it once did. I had one of my constituents in my office
talking about a massive infrastructure project within my
district that because of inflation is now going to cost a
projected $10 million more, and it is an important
infrastructure project that we need.
Mr. Spear, can you talk about how inflation has impacted
your industry, whether it is CapEx, delays, foregone projects,
labor rates, and how those increased costs have impacted our
supply chain?
Mr. Spear. Certainly. I think that inflation, as we look at
the impact it has had on fuel pricing, it is our second biggest
cost burn right under what we pay our employees. And when you
are seeing it more than double, even triple in certain parts of
the country, that is a major headwind in terms of operations
and our ability to get goods to where they need to be with a
shortage that we are experiencing in driver force.
The cost of fuel is really impactful. So, we have seen that
spike considerably, and diesel is still rising, riding higher
than petrol.
So, it is a major concern. A lot of those costs we try to
pass on. If you are in contract fleets, you can do some of
that. For a good number of companies and owner-operators, that
is not the case. So, it is even more impactful on them.
So, we would love to see the fuel prices get back to where
they were pre-COVID.
Mr. Yakym. Thank you.
Mr. Jefferies, same question.
Mr. Jefferies. Yes. It has an impact across the board. So,
whether it is the cost of goods of doing business, that
increases the cost of goods sold, or the cost of services you
are providing, which at the end of the day makes its way to the
consumer, which reduces buying power, which has an overarching
economic impact.
I would pair--we have talked a lot about permitting,
permitting reform, delays, and getting projects to work. That
is only exacerbated by inflation.
You get delayed by 1, 2 years, my colleague mentioned this
earlier, and you are in a high-inflation environment, well,
that jacks up the price of the overarching project
dramatically. So, the funds, the CapEx funds you had put aside
for that project, may not cover that, and maybe you are not
doing that project anymore.
So, it is not just that things cost more. It is impacting
investment. It is impacting project delivery, project
development as well.
Mr. Yakym. And, Mr. Jefferies, you mentioned earlier that
the amount of dollars that the railroad industry is putting
into CapEx for rail improvements around the country, can you
tell us--and maybe you have data on this, maybe you don't--but
what is the scope of projects that have gone up in price? And
in totality, how many projects have you not done because of
inflation?
Mr. Jefferies. So, I don't know if I can put a number on
there.
I will say this. There is a vast number of projects that we
do every year regardless of the cost because they have to be
done to maintain a safe railroad; a well-maintained railroad is
a safe railroad.
So, when it comes to that maintenance, that keeping the
existing infrastructure where it needs to be, that is happening
one way or another because it has to be done.
But where I think you see the hits are on potential
capacity expansions, et cetera, that a railroad of any size is
going to take another look at. If suddenly it is 10, 15, 20
percent more to do that, maybe you are not doing that in that
year.
But, admittedly, I can't point to--those are individual
business decisions that railroads are going to make on their
own.
Mr. Yakym. And so, you are still making those investments.
And it is probably fair to say that the increased cost is being
passed on to the consumer. Is that a fair assessment?
Mr. Jefferies. Well, it is certainly having an impact, I
will say that, at the end of the day.
Mr. Yakym. Thank you.
And, Mr. Firth, same question.
Mr. Firth. I would say that for us, after we get a project,
it could be a couple years long, could be 6 months or whatever,
it is the supplies. It is the wood that we have to buy that
spikes up and down, for instance, to form the bridge decks,
form the piers, form the columns, hammer heads, et cetera. It
is those incidentals that we have no control over or we can't
lock in pricing ahead of time.
So, I would say that would be the biggest hit that we take
usually, and we can't pass that along to owners ahead of time,
because we don't know--we can't buy it right then and there, if
we can even get it, and everything.
Mr. Yakym. Thank you.
Mr. Chairman, I yield back.
Mr. Crawford. Thank you, sir.
Mr. Auchincloss, you are recognized.
Mr. Auchincloss. Thank you, Chairman.
Last Congress, we were able to pass historic legislation to
meet our ambitious climate goals. But until clean energy
projects are up and running, these investments will not realize
their full potential.
Massachusetts is working on this implementation at every
level. Our new Governor, Maura Healey, made tackling climate
change a central part of her work as attorney general and is
now working with offshore wind developers to ensure the
Commonwealth is able to reach its 2030 emissions target.
A failure to make this transition has implications beyond
climate change. It also threatens jobs guaranteed by the first
project labor agreement for an industrial-scale offshore wind
project in the United States.
In my district, Bristol Community College's National
Offshore Wind Institute offers basic and advanced safety and
technical training programs to prepare workers for jobs in
construction, deployment, operations, and maintenance of
offshore wind farms.
Unfortunately, inflation and supply chain issues have
threatened to derail the Bay State's goals and delay our
transition to a green energy economy.
Mr. Firth, in that vein, my first question is for you.
You noted in your testimony the difficulty the construction
industry is facing in purchasing materials like steel. It
creates a significant risk to businesses.
How can Congress create additional market certainty for
these manufacturers? And for multiyear contracts, what steps
should contractors be taking to incorporate market rates'
uncertainty in the future?
Mr. Firth. It is a great question.
When we get at bid time our estimators are pulling their
hairs out because, let's say, at 9 o'clock you have got to turn
in the bid. And when I say a bid, it is low-bid pricing. We
might be getting quotes at 8:55, and we are sitting there
trying to figure out, OK, how low are they, are they cheap, are
they more expensive?
And also, then they say, by the way, you need to let us
know by the end of the day whether or not you can lock in our
price. We might not even know if we got the job because maybe
the job is over budget from the owner's perspective. They have
an engineer's estimate and everything.
So, if all of a sudden for us we are taking huge risks on,
OK, well, maybe we were low bidder, but we were over the
engineer's estimate, will it be awarded? And then, by the way,
we have got to lock into a price to where we might not even
know if we get the project or not.
So, something along those lines to where I think some of
the owners are starting to look at separate contracts ahead of
time that they know as they talk to industry about what can we
do to help. Maybe it is procuring those permanent materials,
such as steel girders for bridges or whatnot.
So, I think more of that and getting more industry feedback
would be helpful.
Mr. Auchincloss. Thank you.
Mr. Spear, I have a separate question for you. But first I
do need to respond to your points in your testimony about the
Federal Highway Administration's 2021 memo, I think it was,
that you referred to.
Just to be clear, first of all, over the last three
decades, Congress has made highway program funding more and
more flexible. And that is partly in response to the fact that
the public is deeply concerned about deferred maintenance and
repairs. They expect us to be a good steward of their tax
dollars. And States are still free to make their own investment
choices.
But being a good steward of those dollars would suggest
that we should fix the 4-million-mile road system that we have
already built first.
And I would also take some issue with your point that
highway widening is going to be the answer to congestion. I
think we have seen that widening roads induces demand. We need
to manage more intelligently the roadways that we have, whether
it is HOV lanes, whether it is congestion pricing.
We have got to think beyond simply the physical
infrastructure and instead the pricing mechanics that we use
and the management mechanics that we use.
My question for you, though, is about the reauthorization
of the NTSB. And one issue I want to explore is truck safety
data ownership. Cars and commercial trucks continue to become
more advanced, and as a result they will produce more data that
we can utilize to make our roads safer if drivers and mechanics
and regulators and insurance companies can access it.
Do commercial trucking companies have access to and sole
authority over their truck data to your knowledge?
Mr. Spear. They do. Telematics is our property.
Mr. Auchincloss. And what are your thoughts on the
increasing push by OEMs to own that data or to lay claim to it
in some manner?
Mr. Spear. I think it is probably better answered by the
OEMs. But it belongs to them. They produce the product. They
sell the product. They maintain the product to sell it off to
somebody else to service it, have access to it, including the
Government.
That is a big debate. And we are not the only ones facing
that question that you pose. The autos are too.
So, telematics is a very sticky issue and it has been
litigated heavily in States, also legislated in States. So, it
is an issue that we are not foreign to.
Mr. Auchincloss. I look forward to working with you on it.
Mr. Spear. Absolutely.
Mr. Auchincloss. I yield back, Chairman.
Mr. Crawford. Thank you.
Mr. LaMalfa, you are recognized.
Mr. LaMalfa. Thank you, Mr. Chairman.
My apologies to the rest of the committee and others for
dueling committees going on. So, if anything I ask is
redundant, please forgive me on that today.
Let me jump right into an interesting piece on a California
driver, truckdriver, a woman, who had really sought and kind of
met her dream. Let me just read a little excerpt of what she
had commented on, a news piece, just a couple days ago. Jumping
in here. Her name is Dee Sova.
``I often reflect on where my dream started and what could
have been. As a Black woman, I had built a successful business
and created a profitable path in an industry that had once
belonged almost exclusively to men. Then the California
legislature stepped in and took that all away from me. They
forced me to say goodbye to the place I once called home for
decades.
``I'm blessed to have successfully moved to a more
business-friendly State''--Missouri, it turns out--``but not
everyone has the resources to do so. Since AB5''--which has
been talked about a lot--``has gone into effect, thousands of
more independent truckers in California have been thrust into
legal limbo. Lawmakers have given other industries a carveout
from AB5, but they continue to deny truckdrivers that same
opportunity.''
You can ask Dee Sova, who gave up, filled her truck, and
left California for greener pastures in Missouri.
So, the bill, AB5, was pitched as a bill to protect workers
from having their benefits cut and being forced instead--they
allege they were being forced to be independent contractors.
The super majority in Sacramento created exemptions for their
favorite industries, not truckers.
So, what we know is that the vast majority of trucking
companies are small and they are mom and pop, but all are
welcome. But it sets a terrible precedent that a State is being
allowed to interfere with the trucking employment requirements,
which indeed have ramifications in the whole country and across
many industries.
So, one of the feelings of being a trucker is to be able to
have freedom and flexibility for contracted employment. Now
every driver will have to charge more, things will become even
more expensive. Every piece of cargo, every box of cereal on
the shelf, et cetera, will have to cost more, and further delay
an already bogged down supply chain.
So, Mr. Chairman, I would like to enter this article into
the record, if I may.
Mr. Crawford. Without objection. So ordered.
[The information follows:]
Opinion, ``I'm a successful female minority truck driver. California's
AB5 forced me to leave the state I love,'' by Dee Sova, Fox News,
January 30, 2023, Submitted for the Record by Hon. Doug LaMalfa
I'm a successful female minority truck driver. California's AB5 forced
me to leave the state I love
I was living my version of the American Dream, but California lawmakers
had a very different plan for me
by Dee Sova
Fox News, January 30, 2023, 2 a.m. EST
https://www.foxnews.com/opinion/female-minority-truck-driver-
california-ab5-forced-me-leave-state
To most people, owning your own business is a way to become
successful. For me, it was a mission--a lifeline to a brighter future
for myself and my daughters.
That journey began in California more than three decades ago, when
I dropped my nursing studies to get a commercial driver's license. As a
woman, the thought of working in a male-dominated field was
intimidating at first. But those initial fears soon gave way to the
rewarding opportunities that a career in trucking offers.
The change was unexpected. As a single parent raising four
daughters, I needed both flexibility and the opportunity to provide for
them. Which is why, in 2015, I partnered with Prime Inc. to become an
independent contractor.
Independent contractor Dee Sova moved her trucking business to Missouri
after California passed its AB5 law. (American Trucking Associations)
Being an independent truck driver empowered me to run my truck as
my own small business. I loved traveling on the job, the freedom to be
my own boss, and the option to take my children with me on long hauls
when I could.
Making good money while seeing the country, I built a wonderful
life back in California--a place I was proud to call home. I was living
my version of the American Dream. But lawmakers in Sacramento soon had
a very different plan for me.
When the state legislature began debating Assembly Bill 5--a law
effectively banning independent contractors in trucking--my dream was
put in jeopardy. AB5 would have demoted me from small business owner to
company employee--affecting my hours, benefits, flexibility and overall
ability to earn on my own terms. It would effectively kill the dream I
worked so hard to build over so many years.
So, for the second time in my professional life, I knew it was time
to change gears. I packed up and left California. I could not afford to
lose my business and the livelihood it provided my family. In 2020, I
moved to Springfield, Missouri, where I continued as an independent
contractor with Prime Inc.
I often reflect on where my dream started and what could have been.
As a Black woman, I built a successful business and created a
profitable path in an industry that had once belonged almost
exclusively to men. Then the California legislature stepped in and took
that all away from me. They forced me to say goodbye to the place I
once called home for decades.
I'm blessed to have successfully moved to a more business-friendly
state, but not everyone has the resources to do so. Since AB5 has gone
into effect, thousands of more independent truckers in California have
been thrust into legal limbo. Lawmakers have given other industries a
carveout from AB5, but they continue to deny truck drivers that same
opportunity.
Over my 31 years in trucking, I've driven more than 2.1 million
accident-free miles, delivering the goods that Americans depend on
every day. I'm proud to serve as an industry ambassador, working in my
free time mentoring women truck drivers and supporting this vibrant,
growing community.
Those like us who choose to own our business should be supported as
we pursue our dreams. It's unfortunate California lawmakers see fit to
tell us we only belong as company employees. Despite those obstacles, I
can still take to the road and pursue my dreams elsewhere.
Dee Sova is an owner operator truck driver for Prime Inc. in
Springfield, Missouri.
Mr. LaMalfa. Thank you, sir.
Let me ask Mr. Spear from ATA this.
Now, I probably won't have to really ask it, but have you
seen motor carriers leaving the State of California? We kind of
know the answer to that question. Are more planning to do so?
Mr. Spear. Yes, I do.
Mr. LaMalfa. What kind of numbers, I guess, are we losing?
I think I saw where 70,000 as of January 1 would be completely
ineligible, if I am thinking correctly.
Mr. Spear. It is a significant number. And Ms. Sova's story
is one of many. And I know her well. I am very, very, very
proud to have her as an ATA America's Road Team captain. She is
an outstanding driver. And when she speaks, I think people do
listen.
It is what I said earlier. I think we need to talk more to
the independent contractors. Did somebody force you to do this,
some heavy-handed employer push you into this category so they
didn't have to pay you as much or give you benefits? You will
find that the answer you get is just the opposite of what you
think.
Listen to what she has to say. She chose this for a reason.
She wants to grow her own business. She wants to employ other
drivers. Most of our big members started with one truck as ICs.
It has been around for 90 years. I am not saying any
category is perfect. It is not. Let's don't make this into a
national crisis. This is a sound, contributing workforce to the
trucking industry, and it is under assault in California. So,
yes, we are a bit bullish about that.
And by the way, a lot of employers have to have contractual
provisions in their IC contracts that adhere to health, safety,
environment, and taxation standards. That is part of the deal.
And when they don't, there are consequences for that.
Mr. LaMalfa. Yes. Yes. There are consequences.
Is ATA, other members, other contractors, receiving some
type of guidance that is helpful from either the State or the
Federal Government on how to deal with these regulations? Is it
clear how they should be complying or is it murky?
Mr. Spear. Get a lawyer.
Mr. LaMalfa. Get a lawyer. Great. I would just like to be a
trucker, out on the open road and haul things, and unload, and
get in my sleeper when I need to. Getting a lawyer isn't really
part of that.
Mr. Spear. Nope. It is not a good answer. I apologize. It
is the truth.
Mr. LaMalfa. No. You gave a real answer.
Let me jump over to Mr. Guenther from Port of Houston here.
I could go into it bigger. But some of our supply chain issues
seem to be subsiding somewhat. I don't think they are over by
any means.
What should we be doing for our ports and import-export
system to improve on efficiency? And I come from the ag sector,
who we have just been brutalized in California getting the ag
products back on the boats.
Mr. Crawford. Quick answer, Mr. Guenther.
Mr. LaMalfa. Thank you, sir. Thank you, Mr. Chairman.
Mr. Guenther. Yes. Thank you. Great question.
Yes, it is tapering off in the U.S. I can speak for
Houston. We are still at a pretty high level, but regardless.
To your point, a lot of import cargo dwelling on the
terminals impacted the export cargo on the terminals. I think a
short answer that we have talked about is the ability to have
more visibility and information about the cargo coming and
going and also having more access to infrastructure, whether it
is inland depots, moving cargo off the terminal, or storing
more excessively.
Mr. LaMalfa. Thank you, Mr. Chairman.
Everybody buy more walnuts. That will help a lot. Thank
you.
Mr. Crawford. Just to remind Members that we are up against
a floor vote schedule. So, move as expeditiously as we can.
Ms. Hoyle, you are recognized.
Ms. Hoyle of Oregon. Thank you. And I want to thank all the
witnesses for coming here to testify.
The weakness in our supply chain became very clear at the
west coast ports during the recent crisis, and one vital way to
minimize future supply chain backups in our ports is to expand
capacity.
The workers at the Ports of Seattle and Long Beach move
almost 20 million TEUs per year. But as we have seen, the
corporate focus of achieving low prices and profit by
offshoring U.S. manufacturing jobs, combined with the longtime
lack in Federal investment in our transportation
infrastructure, has left the United States vulnerable. The
pandemic created a perfect storm, resulting in critical
shortages of necessary goods and a massive supply chain
congestion on the west coast ports.
So, as we move to bring manufacturing back to the U.S., we
are going to need to make sure our port infrastructure can keep
up so U.S. firms can get their products to international
markets.
We have an opportunity, and Mr. Firth knows all about it,
in building a new deepwater container terminal port at the
International Port of Coos Bay, which is in my district in
southwest Oregon and is a public-private partnership with
NorthPoint, a company based in the district of Chairman Graves.
Unfortunately, this project was recently denied a DOT Mega
grant in the first round of grant funds, even though it is
exactly the type of new investment that we need to address our
supply chain issues and the inflation that is exacerbated by
it. So, we will be applying in the next round, and I will work
with anyone to help make that happen.
Before I ask questions of the panel, I want to provide more
background about the project. It would create the only west
coast ship-to-rail container port where maritime shipping
crates can be loaded directly onto railcars and shipped
directly to the rest of the country.
Bringing this kind of infrastructure online could increase
west coast port capacity by up to 10 to 12 percent. No place
along the west coast has that ability.
The port, which is the largest deepwater port between Puget
Sound and San Francisco, has hundreds of acres of undeveloped
industrial land and quick access to the open ocean.
And the west coast lacks any sort of resiliency. If we lose
one port due to a man-made or natural disaster, that problem
will be significantly worse.
Seventy percent of the containers that move through ports
on the west coast of Canada are destined for the United States.
Meanwhile, the Canadian Federal Government is investing in
their ports. I can't understand why we would choose not to
invest in our own ports and forfeit all that ship traffic and
all the American jobs that go with it.
So, with that, first, Mr. Regan, and if there is time, Mr.
Firth.
As Oregon's labor commissioner, I saw too often that people
in the trades and transportation jobs were recruited by what we
would call the FBI model of recruitment: father, brother, in-
law. If your father, brother, or in-law were in the trades,
then you get into the trades.
We worked very hard with business, with labor, to change
how we did outreach and retention because diversity and
recruitment means nothing if you can't create an environment
for that diverse workforce to feel safe and supported to stay
in those jobs. We addressed some of those issues earlier.
Mr. Regan, can you expand on how investing in the
transportation workforce, workforce development, and
recruitment to the many high-quality Registered Apprenticeship
Programs that will arise through the record investment of the
IIJA can help address some of these supply chain problems?
Mr. Regan. Yes. And thank you so much for that question.
The workforce is what is driving these supply chains. They
are the backbone, they are the ones performing the work,
whether they be the longshoremen in the ports, whether they be
operating the trains, whether they be driving the trucks. They
are the core of this.
And I think having more money available--and critically
having money available for workforce training in the very
beginning of these grant programs--means that we are going to
be able to build the workforce of the future that can actually
deliver as demand is going to continue to increase.
We are not going to see a decrease in cargo anytime soon.
So, we want to be able to make sure that we have the workforce
ready to meet those needs.
And we also have had an increased focus on diversifying the
workforce in transportation, making sure that we recruit more
women, more people of color, to make sure that we have a
workforce that is representative of the country and that
opportunities are available for everyone in this country to
have a good-paying, middle-class job.
Ms. Hoyle of Oregon. Thank you.
Very briefly.
Mr. Firth. I think that if we could increase the money into
the career and technical education programs, I think that would
be fabulous. I personally think that we try to tell younger
kids that you have to go to college. You can really make a
great career in any of our trades. It is just great.
Ms. Hoyle of Oregon. Thank you.
Mr. Crawford. The gentlelady's time has expired.
Mr. D'Esposito, you are recognized.
Mr. D'Esposito. Well, thank you.
And to the panel, thank you for your time today.
As a native Long Islander, I firsthand know the value the
supply chain industry brings to our economy. My district
heavily relies on the trucking for freight needs in its
vicinity to both JFK Airport and the ports in New Jersey.
Companies like Canaan Xpress from Valley Stream and K-1
Logistics, whose owners live in Long Beach and East Rockaway,
have suffered economic burdens as a result of the freight
container backlog and strained resources.
From prolonged stalling at port to congestion, incurring
additional fees, and at times not able to receive their cargo,
Long Island truckers, our small businesses and consumers, are
having to foot the ramifications of supply chain inadequacies.
Mr. Spear, as our local ports and truckers work overtime to
meet the market's demands, do you feel that the current
administration has made it a priority to implement ocean
shipping reforms that ensure supply chain efficiency?
Mr. Spear. I have seen good dialogue led by the White House
National Economic Council on supply chain, particularly ports.
I think passage by this body of the Ocean Shipping Reform Act
is a significant step forward. I think there needs to be some
continued discussions with this administration about what more
we can do to ensure that our supply chain is streamlined and
resilient to these pressures.
I think box rules--we are currently litigating chassis
choice, availability of chassis. We are being told by ocean
shippers that these are the chassis you have to use. That
creates a backlog. It creates contractions within our ability
to move those boxes faster. We need chassis choice. And that is
something, whether this body chooses to legislate, we are
litigating, as I said. But it is a racket. It is just pure and
simple. It is more of the same.
And I think looking for ways that we can get more
efficiencies within the port, within drayage, to ensure that we
can stack higher, move off site, push to rail, push to chassis
faster, these are all things that are going to make
improvements going forward, but we need to continue the
dialogue.
Mr. D'Esposito. Thank you.
And, again, I have two manufacturers on Long Island that
closed in the last 6 months citing the inability to keep up
with their inflated supply chain costs.
Do you believe that the current administration's lack of
prioritization for shipping reform and cutting through the
redtape is preventing small businesses like these on Long
Island and in Nassau County from operating and thus forcing
some to close?
Mr. Spear. I think a lot of communities around the country
are entirely dependent on trucks. It was just cited. Ian
mentioned earlier first mile on, last mile off. You are going
to have to involve a truck and a driver to get it where it
needs to be.
So, small businesses generally serve those communities.
They are there at night when they go home to their families.
So, making certain that they remain capable in delivering those
goods is instrumental. It is not just large cities. It is the
communities around the country that deserve attention to that.
So, yes, we are very mindful of it. It is something that we
are going to continue to represent at the table when we are
talking about these efficiencies. It is not lost on us.
Mr. D'Esposito. Thank you.
Thank you all for your time.
Chairman, I yield back.
Mr. Crawford. Thank you, sir.
I now recognize Mrs. Foushee for 5 minutes.
Mrs. Foushee. Thank you, Mr. Chairman.
And thank all of you for being here today.
My district in North Carolina is home to world-class
research universities and community colleges, vibrant small
businesses, community-oriented nonprofits, and Research
Triangle Park, a premier global innovation center and the
Nation's largest research park.
My district also is one of the fastest growing areas in the
entire country, and we are, of course, feeling the effects of
growing pains. We are struggling to keep up with the demands
that come with the rapid growth of an area, and this is,
unfortunately, reflected in our transportation infrastructure.
I know how critical it is for our communities to have
robust and resilient infrastructure and accessible and reliable
transportation systems. I look forward to tackling some of
these problems and issues as a member of this committee.
As we work to improve and modernize our transportation
systems, we must also talk about the implementation of clean
transportation and how this affects our current workforce.
So, my first question today is for Mr. Jefferies.
Mr. Jefferies, one of the benefits--well, you have
indicated that one of the benefits of a functioning freight
rail network is the ability of the freight railroads to move a
ton of freight nearly 500 miles on just 1 gallon of fuel. And I
understand that some of the Class I railroads are exploring
battery-electric locomotives to further reduce their emissions.
So, if you could please tell me how railroads are preparing
their workers to ensure that their skills grow with these
changes.
Mr. Jefferies. Well, that is a great question and a broad
question, because the challenge of further reducing emissions
is an immense one.
But to your point, as we stand here today, freight rail is
the most environmentally friendly way of moving goods across
land. But we have got a lot more work to do.
We are investing in battery electric. We are investing in
hydrogen. We are investing in additional biofuels. And all of
the Class I's have signed up and agreed to science-based
targets initiatives when it comes to targeted emissions
reductions in the next 10 years, in line with the Paris treaty.
And that is going to take an all-hands-on-deck approach, an
all-options approach. So, that is investment in our yards, that
is investment to reduce emissions with our propulsion, anti-
idling, reducing friction between wheel and track.
And that is why we are exploring every opportunity. That is
why we have test locomotives, test battery-electric locomotives
out in revenue service. That is why we are deploying battery
switcher locomotives in yards. It is all about reducing that
top-line emissions level. And, quite frankly, our customers
expect that from us.
We can become a tool to help them reduce their overarching
tooth-to-tail emissions because they are focused on their
supply chain. So, the better value proposition we have on that
front, the more attractive we are to a customer.
And I will just add, in your area of North Carolina, one,
we have a wholly owned subsidiary IT company located in Cary, I
know nearby, not directly right there. But there is also an
immense amount of rail investment going on in North Carolina,
both on the passenger front and the freight front.
Mrs. Foushee. Thank you for that.
Mr. Regan, how can we ensure that we are still prioritizing
workers as we incorporate these new technologies into
transportation like zero-emission technology?
Mr. Regan. Thank you.
I think that is a really important question in all areas of
technology as we start to see it be deployed in transportation.
We view, in the labor community, we are not opposed to
technology. We embrace it. We have generations of embracing
technological change throughout transportation.
What we ask for, though, is that we want to make sure that
as we are advancing our technological capabilities, we are also
advancing our workforce, making sure that there are training
opportunities so that the existing workforce has the ability to
advance their careers as the technology changes.
Likewise, we want to make sure that any introduction of new
technology is done so in a way that improves safety across the
board. It should never be used as an opportunity simply to
remove a worker. It should be done in concert with the experts
who are doing the jobs so that they can actually enhance safety
and combine that with the human expertise that has been doing
it for a very long time.
Mrs. Foushee. Thank you.
Mr. Chairman, I yield back.
Mr. Crawford. Thank you.
Mr. Johnson, you are recognized.
Mr. Johnson of South Dakota. Thank you, Mr. Chairman.
And, obviously, I am pleased that the committee is making
the supply chain such a high priority this year. I think it
builds on the success that Mr. Garamendi, my friend from
California, and I had last year with the Ocean Shipping Reform
Act. It is already having an impact on helping to heal some of
the supply chain issues.
But obviously nobody is alleging the supply chain is as
healthy as we want it to be yet. That is why I am working with
Mr. Costa on the SHIP IT Act, which attempts to address a
number of different issues or deficiencies within the trucking
arena.
And without objection, Mr. Chairman, I would ask for
statements in support for the SHIP IT Act to be entered into
the record from the Consumer Brands Association and from the
Shippers Coalition.
Mr. Crawford. Without objection, so ordered.
[The information follows:]
Letter of January 31, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Thomas Madrecki, Vice President, Supply Chain, Consumer Brands
Association, Submitted for the Record by Hon. Dusty Johnson
January 31, 2023.
The Honorable Sam Graves,
Chairman,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 2167 Rayburn House Office Building,
Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Transportation and Infrastructure Committee, U.S. House of
Representatives, 2163 Rayburn House Office Building,
Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
Thank you for convening today's hearing on supply chain and
transportation challenges, recognizing the considerable impact of
recent supply chain problems on manufacturers, shippers, and consumers
across America.
But recognizing past impacts is, of course, not enough. Pandemic
disruption, port congestion and an averted freight rail strike may no
longer be front page news, but supply chain concerns seem likely to
persist through 2023 and beyond, absent proactive action and policy
intervention to strengthen competitiveness and resilience. Long lead
times for manufacturing components, soaring production costs, out-of-
stock products and inflation are leading indicators that we can and
should be doing more to protect American consumers, including through
efforts to improve supply chain fluidity.
Acting now to improve supply chain fluidity can help reduce the
chances of high-profile problems later on and provide economic and
quality of life benefits today.
Supply chains are the backbone of economic growth, national
security and consumers' quality of life. But even before the COVID-19
pandemic, America's food, beverage, household and personal care
manufacturers expressed growing concern over the state of U.S. supply
chains.
And the Members of the Consumer Brands Association have direct
knowledge. Our membership includes many Fortune 500 companies and other
important companies well known to the public. Collectively the annual
gross revenue is in the hundreds of billions of dollars as part of the
work product of millions of employees and contractors. We have to make
and move and receive the products. We are taking an increasingly
intense interest in improving transportation, logistics and supply
chain performance. We work with carriers but they need our products to
carry and we increasingly have our own views on how to improve movement
of the products that make up the economy.
In recent years we have seen cracks in the system--issues as far-
ranging as the truck driver shortage, truck parking, freight capacity,
rail performance, maritime shipping challenges, port congestion,
inadequate data sharing and the untapped opportunity of emerging
technologies--imperil business operations, slow manufacturing lines,
foster inefficiencies and add to consumer costs.
These challenges and others like them offer a roadmap for steps the
Congress may take to strengthen supply chains. For all of the talk
about supply chains and the importance of them, there remain many
avenues for members of Congress to enhance resiliency through strategic
policymaking.
One of the most encouraging signs of potential progress on supply
chain issues is the introduction of legislation like the SHIP IT Act,
offered by Reps. Dusty Johnson (R-SD) and Jim Costa (D-CA). The SHIP IT
Act serves as a template for proactive, practical legislation
addressing specific supply chain challenges, like the lack of truck
parking on highways across America, much-needed incentives for truck
driver recruitment and training, and the assurance of regulatory
flexibility during emergencies to ensure safety and business
continuity. The SHIP IT Act, and any complementary proposals developed
this year by Committee members, offer opportunities to enhance
efficiency, safety, sustainability and performance--all to the benefit
of U.S. manufacturers, consumers and transportation providers.
From agriculture, to manufacturing, to the technology start-ups of
tomorrow, all American industries and consumers rely on the strength of
our national supply chain. It is imperative that we strengthen, protect
and modernize this delivery system, which can be harmed not just by
geopolitical events like the pandemic and war in Ukraine, but also by
failure to invest in and improve how freight flows across America now,
to reduce the chances of the problems we have seen arising again.
Government policy should help--not hinder--private sector efforts
to deliver for consumers, working in parallel to ensure the
availability, affordability, and accessibility of everyday essential
products.
Thank you for your interest in strengthening American supply
chains, and for convening today's hearing. This is a first step that
must be followed by common sense actions to improve policies and
approaches so that we can all deliver for America for decades to come.
Sincerely,
Thomas Madrecki,
Vice President, Supply Chain, Consumer Brands Association.
Statement of the Shippers Coalition, Submitted for the Record by
Hon. Dusty Johnson
While many of us have known this for a while, the last couple of
years brought to the forefront of everyday American's mind how fragile
our supply chain is. Backups at the ports, a truck driver shortage,
several potential railroad strikes, and others events have proven that
steps need to be taken to strengthen our supply chain to mitigate any
future disruptions. A strong supply chain ensures that shippers are
able to get critical goods and products to consumers in a timely and
cost-efficient manner.
The trucking industry has experienced a significant driver
shortage, which is only expected to worsen. In order to solve this
problem, the industry will need to recruit nearly one million new
drivers in the next decade to replace the retiring workforce. It is
critical to recruit new drivers to the industry, but it can't end
there. Changes must be made to retain drivers by improving their
quality of life while on the job. This can be done by implementing the
following: allowing drivers under 21 to cross states lines, offering
incentives for veteran, women, and minority drivers, providing tax
incentives to current and newly eligible truck drivers, reducing
barriers for entry to truck driving school, improving safety by
increasing the availability of truck parking, and streamlining the CDL
process.
The Shippers Coalition implores Congress to work in a bipartisan
fashion to ensure that it is easier to recruit and retain qualified
drivers. The industry needs to alleviate the nationwide truck driver
shortage, ensure a high quality of life for drivers while on the job,
and take pressure off the system.
One way to address supply chain issues is to advance the Safer
Highways and Increased Performance for Interstate Trucking Act (SHIP IT
Act), introduced by Congressman Dusty Johnson (R-SD) and Congressman
Jim Costa (D-CA). This bill provides common-sense solutions by taking a
holistic view of pressure points in the supply chain by increasing
shipping capacity, lessening burdens on current and future truck
drivers, providing incentives to recruit and retain drivers, and
allowing additional flexibilities during times of emergency. These
solutions will help ensure consumers have access to critical goods and
bring much-needed reform to a system that has been long neglected.
Commendably, this legislation would take action immediately, working
towards solutions to positively help the economy and safety, and
prevent high-profile supply chain concerns, rather than waiting to act
until another supply chain crisis. The Shippers Coalition supports this
bill and encourages the committee to move this forward.
In our global economy, efficient ocean transportation is essential
to a well-functioning supply chain. We are confident that the Ocean
Shipping Reform Act will help ease or prevent shipping backlogs and
help prevent future spikes in international ocean shipping costs like
we have seen in the past. Importantly, the bill provides the Federal
Maritime Commission (FMC) with new tools to help level the playing
field for American exporters and limit anticompetitive behavior. While
the passage of this bill was monumental, it was only the first step in
alleviating the issues seen at ports across the United States. The
Shippers Coalition is closely following the implementation of these
provisions to ensure the voice of the shipper is heard. These
provisions are critical essential in lowering shipping costs and
strengthening all aspects of the supply chain.
The Shippers Coalition is the leading safety voice in building a
more modern, safe, and environmentally friendly trucking system. The
Coalition is a joint effort of more than 80 of the nation's most
prominent manufacturers, agribusinesses, and trade associations,
including Anheuser-Busch, PepsiCo, Coca-Cola, the American Chemistry
Council, the Consumer Brands Association, Niagara Bottling, Tyson
Foods, Procter & Gamble, and the National Cattlemen's Beef Association,
among others. The Shippers Coalition seeks to improve supply chains and
freight transportation, all while advancing safety and reducing
emissions, vehicle miles traveled, fuel consumption, and congestion.
The Coalition is sharing the story of shippers across the country and
proposing solutions that increase fluidity in the supply chain.
Mr. Johnson of South Dakota. Very good. Thank you.
Mr. Spear, I was grateful to see in your testimony and hear
in your testimony a reference to the Ocean Shipping Reform Act,
holding that up as a success of the last Congress.
I think today, gentlemen, you have got a sense of the
hunger and the appetite that this committee has to continue to
build on those successes.
So, the question to you, Mr. Spear, what top three pressing
issues or ideas do we need to pursue in this committee to
continue to build on OSRA's success?
Mr. Spear. I think transparency is really good, the
accurate invoices, resolving disputes. These are all good
things that will come from this law that we strongly supported.
So, well done.
I think looking ahead, as I just spoke earlier about the
box rules, We are litigating chassis choice, and being able to
pick, we talk about choice a lot, but being able to pick which
chassis you can use.
These are ocean shippers that are applying a lot of
leverage on us, acting like cartels; this is exactly what OSRA
was meant to defuse.
So, going forward, I think ensuring that we have choice. We
can move those boxes much faster. This is something we are
litigating.
But that is an area certainly to provide oversight at a
minimum, because it really is a racket.
We are looking also at instances where ports, particularly
in California, are electrifying much more rapidly than other
parts of the country. And I just have to say that about 60
percent of those that are operating in drayage are less than 20
trucks.
So, the affordability of that equipment in that amount of
time, assuming it is available, assuming it can be charged--
that is a good environment certainly to incubate this sort of
thing--but the ratio, the cost ratio between an electric truck
and a diesel power truck is like 5 to 1. They are not going to
be able to afford this.
So, that is literally nearly 30 percent of the boxes being
moved. If those less than 20 go, you are going to have a real
issue on your hands.
So, I think we need to look, again, about the timelines.
Let's incubate alternative energy into the workplace, but let's
do it in a responsible way that doesn't put people out of
business, doesn't cause more bottlenecks within the supply
chain.
Mr. Johnson of South Dakota. And certainly the
conversations continue, and Mr. Garamendi and I are working on
an OSRA 2.0 to try to address some of the outstanding issues.
Mr. Guenther, for you, I want to pick your brain a little
bit about LOGINK. You probably know more about it than I do,
but I believe this is a Chinese-developed logistics software
system, a platform that they are attempting to foist upon ports
and other stakeholders.
Now, they are giving it away free. It collects a tremendous
amount of data, which can then be centralized inside China to
provide, no doubt, competitive advantage.
I have grave concerns about the LOGINK system. I wonder
whether or not it should be used by anybody in America. Are my
concerns misplaced?
Mr. Guenther. Well, if you could--I am not aware of that.
What was the name of that?
Mr. Johnson of South Dakota. LOGINK. So, it is capital L-O-
G-I-N-K.
Mr. Guenther. OK.
Mr. Johnson of South Dakota. And it is a data management
logistical tracking software that tells about what cargo is
there, where it is headed, where it is coming from, just a
tremendous amount of information.
Mr. Guenther. I am not aware of that software, but
obviously it is a concern, cybersecurity. The fluidity and
efficiency of container terminals in the U.S. rely on robust
and very smart operating systems. So, we have to make sure that
those are protected from a cybersecurity standpoint or
whatever.
So, I am not aware of that, unfortunately. However, we do
know that we continue to--most of the equipment--a lot of the
equipment that we do use at our ports, ship-to-shore cranes and
those type things, are made in the Republic of China.
So, we are aware of any system, no matter where it is from,
to make sure that it is not infiltrated and data breached or
whatever, because we all know that we are attacked each and
every day at every port in the Nation. So, we have got to make
sure that we are diligent and vigilant about that.
Mr. Crawford. The gentleman's time has expired.
Mr. Johnson of South Dakota. Thank you, Mr. Chairman. My
has time expired.
Mr. Crawford. Yes, sir. Thank you.
Mr. Westerman, you are recognized.
Mr. Westerman. Thank you, Chairman.
And thank you to the witnesses for being here today. We
have a lot going on in other committees, so, I missed a lot of
your testimony. But I do appreciate you coming here and
visiting with the committee.
I have got some grave concerns about our Federal permitting
process. I remember in the last Congress we had the largest
infrastructure bill in the history of the world that never even
came through this committee. But we did do some--we worked on
some other bills that, unfortunately, never got any kind of
traction in the last Congress.
And I remember talking with my Democratic colleagues about
they are focusing on the wrong issues. They are trying to put a
lot of money out there, but they are not going to be able to do
their projects any more than anybody else will be able to do
them because of permitting issues.
And if we take a quick look at DOT's Federal Environmental
Review and Authorization Inventory, that identifies the most
commonly used redtape laws and regulations, it outlines a
massive list of 64 separate permits and reviews, and that is
just the list of the most common hurdles.
With the constant need to improve our infrastructure--and
we will just go down the table there--can you speak to me about
what issues you and your colleagues are facing that are
delaying your ability to improve that infrastructure, and what
are the most egregious permitting roadblocks?
Mr. Spear, we will start with you.
Mr. Spear. Thank you, Congressman.
I think we work very closely with our State associations,
with State DOTs, to really identify the projects that need to
be shovel ready, and really moving them forward through the
environmental impact process to ensure that they are teed up
and have access to the funding, shared funding, that could
hopefully come through the IIJA. And we focus on the top
projects. We would deem those as being the ones that have the
most congestion in the country.
There are a number of ways that you can deal with
congestion. But we need to prioritize. Those should be projects
that we are looking at well ahead. Because we report on them
every year. We know what they are. So, it shouldn't come as any
shock that these things get through the process much quicker,
get more attention, and speed up that permit process that these
projects are underway and done.
Mr. Jefferies. Yes. I think we see it across the board,
whether it is investing in new yards, yard expansion, whether
it is adding second lines of rail, whether it is bridge
replacement.
And there are commonsense solutions. We saw some progress
over the past few years with One Federal Decision, but that is
limited to certain agencies.
Really, it is just all about predictability in the process.
Put some timelines on it, identify what the criteria are that
are going to be evaluated, and take this just open-ended
guessing game out of it, and folks can work around it.
Predictability and certainty are all the community wants so
it can make its investments and decisions with some level of
confidence of when they are going to be able to put dollars to
work.
Mr. Westerman. As an engineer who did a lot of projects
before I came to Congress, I can certainly agree about
predictability and removing uncertainly. Engineers like those
sorts of things, for good reason.
Mr. Firth?
Mr. Firth. Yes. Thank you for the question.
Going back, I think it is having that flexibility and
expediency in the review process. Not all contractors look at a
job at the same line of construction, you might say. We all
have different means and methods on how we attack something.
And so, when you are kind of pigeonholed into a permit, and
sometimes the owners need to, I think, engage industry a little
bit more on how to get something permitted, having that
communication open, so then that way the projects can get
through the first time and not hit a hurdle or a roadblock
later down the road.
Mr. Guenther. And just to add to that, the permitting
process is certainly--it was asked earlier about any delays.
And on the waterside, talk about the opportunities, some of the
issues that the Corps has and the time it takes to review and
approve just a standard project.
We just need to make sure that there is not a lack of
funding for regulatory staff and making sure that there are no
delays going through the environmental process, and maybe look
at some type of time limits that we need to have on these so we
can have some certainty for the projects.
I know I hear from our dredging industry that it is
dependent upon these and there is a finite amount of dredges.
There needs to be some consistency and reliability as well.
Mr. Westerman. Mr. Regan, I apologize. I am out of time.
I ask to submit this letter from the National Mining
Association.
Mr. Crawford. Without objection, so ordered.
[The information follows:]
Statement of the National Mining Association, Submitted for the Record
by Hon. Bruce Westerman
The National Mining Association (NMA) appreciates the opportunity
to provide input to the Committee on Transportation and Infrastructure
regarding the state of transportation supply chains and infrastructure,
specifically regarding rail transportation. The NMA's members conduct
mining operations throughout the United States and rely on Class I rail
carriers to transport mined products, including coal.
The NMA is the voice of the American mining industry in Washington,
D.C. Membership includes more than 275 corporations involved in all
aspects of mining including mineral and coal producers, mineral
processors, equipment manufacturers, state mining associations, bulk
transporters, engineering firms, consultants, financial institutions
and other companies that supply goods and services to the mining
industry.
Background
Coal is a reliable and abundant energy resource--making up nearly
90 percent of U.S. fossil energy reserves on a Btu basis. The demand
for coal, especially coal exports, is on the rise. Russia's invasion of
Ukraine has severely shaken global coal markets and triggered a spike
in U.S. thermal coal exports to help alleviate Europe's tight energy
supply and low natural gas reserves. The U.S. Energy Information
Administration (EIA) predicts U.S. exports to increase up to 92.6
million short tons in 2024.\1\
---------------------------------------------------------------------------
\1\ Energy Information Administration, Short-Term Energy Outlook,
Jan. 10, 2023; https://www.eia.gov/outlooks/steo/report/coal.php
---------------------------------------------------------------------------
Roads, railways, appliances, buildings, stadiums, bridges, airports
and other structures are all supported by steel--a material dependent
on metallurgical coal. Seventy percent of the world's steel requires
coal for its production. The U.S. is one of the largest metallurgical
coal exporters in the world and demand is expected to increase 20
percent by 2030 to keep up with the pace of aging infrastructure.
American coal producers are almost entirely reliant on U.S.
railroads to get products to market. For example, coal produced in the
Powder River Basin can be transported over 1,000 miles, and as far away
as Georgia, Oregon and Texas. These operations run 24 hours a day, 7
days a week and 365 days a year to meet the needs of consumers.
According to the EIA, trains transport nearly 70 percent of coal
deliveries in the United States for at least part of the way from mines
to consumers.\2\ Additionally, coal accounts for more rail tonnage for
railroads than any other commodity.
---------------------------------------------------------------------------
\2\ U.S. Energy Information Administration, Mining and
Transportation of Coal, accessed Jan. 2023; https://www.eia.gov/
energyexplained/coal/mining-and-transportation.php
---------------------------------------------------------------------------
Impacts to Coal Shippers and Energy Utilities from Rail Transportation
Supply Chain and Reliability Issues
Mining companies continue to encounter difficulties getting coal to
the consumer. While mines are producing, the same cannot be said for
rail, and our members desperately need relief.
Currently, there is very little recourse for poor rail service, and
in some cases, shippers are sometimes held captive with no viable
alternative shipping methods due to what is effectively a monopoly over
rail transport in some regions of the U.S. Several reliability issues
with the rail transportation sector were raised in an oversight letter
to the Surface Transportation Board (STB). U.S. Senators Kevin Cramer
(R-N.D.) and Tammy Baldwin (D-Wis.) led a group of 19 bipartisan
colleagues in a letter urging the STB to ensure reliable, consistent
rail service for American industries and shippers.\3\ Several commodity
specific issues were highlighted, including several specific to mining
and energy utilities:
---------------------------------------------------------------------------
\3\ Senator Kevin Cramer, Letter Presses Surface Transportation
Board on Rail Disruptions, May 24, 2022; https://www.cramer.senate.gov/
news/press-releases/sens-cramer-baldwin-colleagues-press-surface-
transportation-board-on-rail-disruptions-urge-reliable-service-for-
american-industries-shippers
Energy producers have needed to curtail production due to
consistently delayed arrival of railcars, citing delays of
roughly two weeks.
For example, Wyoming experienced an increase in coal production
in 2022, but due to a lack of rail service to deliver coal to
power utilities, coal producers were unable to produce an
estimated 50 million additional tons of coal. This loss of
production could have brought an estimated $100 million in
additional revenue to the state in the from severance taxes.\4\
---------------------------------------------------------------------------
\4\ Cowboy State Daily, Lack Of Trains Cost Wyoming $100 Million In
Coal Revenue In 2022, Jan. 22, 2023; https://cowboystatedaily.com/2023/
01/22/rail-service-cost-wyoming-100-million-in-coal-revenue-in-2022/
Energy producers and manufacturers are facing lack of service.
In 2022, the Navajo Transitional Energy Company (NTEC) saw
train performance at its Montana Spring Creek Mine fall well
short of required and historic levels. The rail carrier claimed
that the lack of service was part of the widely reported
service challenges all Class I rail carriers were experiencing.
Despite these broader challenges, rail carrier service in the
adjacent areas improved over prior years. Simultaneously, the
rail carrier significantly reduced the percentage of trains
available to NTEC and significantly increased the percentage of
train service to NTEC's competitors on this route. These supply
challenges and reliability issues caused NTEC to lose over $150
million in revenue and incur $15 million in demurrage penalties
for 2022.\5\
---------------------------------------------------------------------------
\5\ NTEC, Navajo Transitional Energy Company Files Lawsuit Against
BNSF For Breach Of Contract, Dec. 20, 2022; https://navenergy.com/
navajo-transitional-energy-company-files-lawsuit-against-bnsf-for-
breach-of-contract/
Missing switching of railcars and reduced service days can
force manufacturers to use additional railcars to maintain the
same level of business, leading to increased cost for the
shipper and further strain on the rail network overall.\6\
---------------------------------------------------------------------------
\6\ Senator Kevin Cramer, Letter Presses Surface Transportation
Board on Rail Disruptions, May 24, 2022; https://www.cramer.senate.gov/
news/press-releases/sens-cramer-baldwin-colleagues-press-surface-
transportation-board-on-rail-disruptions-urge-reliable-service-for-
american-industries-shippers
---------------------------------------------------------------------------
With coal consumption rebounding, energy utilities have
increased drawdowns of their coal stockpiles. In 2021, coal
inventories hit their lowest levels since the 1970s. Because of
these historically low inventories, some railroads like Union
Pacific anticipate continued demand for coal shipped by rail in
2023.\7\ The EIA finds that the cost of rail transport as a
share of the total delivered cost of coal to electric utilities
has increased from 36.6 percent in 2009 to 48.4 percent in
2020.\8\ During the same period, coal transport costs as a
percentage of total delivered cost by both truck and barge have
remained relatively stable.
---------------------------------------------------------------------------
\7\ Argus Coal Daily, Issue 23-15, P. 2, Jan. 24, 2023;
\8\ U.S. Energy Information Administration, Coal Transportation
Rates to the Electric Power Sector; https://www.eia.gov/coal/
transportationrates/pdf/Table%201_Real.pdf
Feedback from NMA members further illustrates the above findings
included in the bipartisan congressional letter.
Conclusion
Following an April 2022 STB hearing on ``Urgent Issues in Freight
Rail Service,'' the STB ordered certain Class I railroads to submit
service recovery plans and provide additional data to support
improvement. The NMA appreciates this initial step in holding Class I
carriers accountable. However, rail service has not consistently
improved, as evidenced by the STB's own data provided by the railroads,
and NMA members' candid feedback on service issues. It is critical for
Congress and the STB to hold Class I railroads accountable and to
provide relief.
The NMA urges Congress to use its authority to take additional
action to confront these ongoing service problems that cripple the U.S.
supply chains. We must be able to move responsibly sourced domestic
coal to the utilities that power communities and heat and cool our
homes. We must be able to transport metallurgical coal to the
industries that repair roads, bridges and buildings to keep our
infrastructure safe. We need to move coal, and that starts with
efficient rail.
The NMA appreciates the committee's attention to this subject and
we look forward to engaging and supporting the committee in its effort
to address these longstanding issues.
Mr. Crawford. The gentleman's time has expired.
Mr. Kean, you are recognized.
Mr. Kean of New Jersey. Thank you, Mr. Chairman.
First, I would like to thank the chairman for holding this
important hearing today on the state of our Nation's
transportation infrastructure and supply chain challenges.
I also want to thank all of our witnesses for being here
today.
The Seventh Congressional District in New Jersey is home to
some of the most significant transportation challenges and
opportunities in the country. It actually stretches all the way
across the State, from Kill Van Kull all the way to the
Delaware River. We face congestion on our roadways and our
highways, strained commuter rail and transit systems, and local
roads and bridges that are in desperate need of repair.
My constituents, like others around the country, were
impacted by the supply chain crises that every family in the
country experienced. And so, each of the urban, suburban, and
rural sections and infrastructures all need to be considered,
and interoperability, as we are addressing our Nation's
priority transportation goals so we can make sure we have both
safety and economic competitiveness.
Mr. Jefferies, as you stated in your testimony--I am going
to use this as a model for every one of the witnesses here
today--you said that you know rail is a vital part in the New
Jersey economy. And as you said in your written testimony,
``The next great leap forward in safety directly relies on the
ability of railroads to innovate and deploy new technology.''
This is a question for every single one of the panelists.
How can Congress support the railroads and the other
individuals testifying here today to achieve their greatest
potential in deploying technology that both improves safety and
efficiency, as we started to hear today, but also is safe from
a homeland security perspective so we know we have an entire
grid that is safe?
Mr. Jefferies. Well, that is a great question and one we
could talk a lot about on. I will just break it down into two
factors.
One, effective oversight of the agencies responsible for
regulating safety to ensure that their regulatory efforts are
focused on objective, data-driven safety improvements.
Two, really on the legislative side, looking at ways to
champion innovation, to expand the ability to use pilot
programs, to expand the ability to use waivers to demonstrate
new ways and explore new ways of doing things, to build that
safety data set that can allow for an informed, educated debate
about whether or not you should move forward with it.
This is not anti-worker. This is about creating a
regulatory framework that keeps up with evolution of technology
and innovation, and then adjusting worker roles and
responsibilities to take advantage of that, so that they are
able to be most effective. And there is a training component to
that as well.
Mr. Kean of New Jersey. Anybody else on the panel have
additional--from the port, for example, or Greg?
Mr. Regan. Yes. Look, as I said earlier, I believe that
technology is important. Technological advancements are
important and they are something that we, as a labor movement,
embrace.
Where I get really tired of it is when it is used purely as
an excuse to lower head count, and we see that in industries
across the board.
Our number one priority is to make sure that as we get new
technology, it is done to enhance our ability to do our jobs,
to make it safer, so that we know that it is another tool that
can be at the disposal of the people who are experts in these
fields and are able to do the job to the best of their ability.
So, we are all about trying to figure out a way to
incorporate this and deploy it into the industries where our
workers are. But we want to make sure it is done in a
responsible way, and too often it is viewed as an excuse to get
rid of another worker.
Mr. Kean of New Jersey. Thank you.
Mr. Guenther. I can just add, not about the railroads, but
certainly----
Mr. Kean of New Jersey [interrupting]. Well, I was using it
as a basis for every single one of the issue areas you are here
to speak about.
Mr. Guenther. Yes. So, similarly, technology is very
important. We wouldn't be able to do the things that we do and
be as efficient as we are as a port and terminal operators
without the technologies that we have.
But again, I agree, they have to be a tool for the worker.
We have been successful on that in creating better processes.
But at the same time, it creates jobs. The more containers that
you can handle through a terminal, for instance, the more
longshoremen that are going to be employed.
So, technology is a good thing, and we need to embrace it
and use it correctly.
Mr. Kean of New Jersey. It needs to work with a partnership
with the individual as well.
Thank you, Mr. Chairman. I yield back the remainder of my
time.
Mr. Crawford. I thank the gentleman.
Mr. Van Orden, you are recognized.
Just a reminder, we are up against a floor vote. So,
Members are reminded to keep your comments brief and tight,
please. Thank you.
Mr. Van Orden. Mr. Chairman, thank you very much.
Witnesses, I appreciate you coming here today.
I represent Wisconsin's Third Congressional District. It is
comprised of 19 whole and partial counties, approximately
13,000 square miles. We have locks and dams running from Pierce
County, which is almost directly across from Minneapolis-St.
Paul, down to the Iowa-Illinois border, across from Dubuque.
That is lock 3 to lock 11.
We also are an agrarian district, and we understand that it
doesn't matter how much grain you are able to produce in a
field if it can't get to a processing facility and then get to
a market. It might as well rot there.
So, the trucking industry is incredibly important to my
district. So, thank you very much. I have got long-haul, over-
the-road truckers in my family. And so, I appreciate the work
you have done.
Being the most junior member of this committee, all of the
questions I was going to ask you have been asked. So, you're
out.
So, Mr. Jefferies, I want to thank you very much. We have
the BNSF Railway that runs nearly the entire length of my
district from north to south. And so, it is incredibly
important to our economy also. Again, all of my questions have
been asked, so, you are out of luck.
However, Mr. Firth--hey, listen, we can spend all this
monopoly money that this administration has been throwing at
infrastructure, but if we don't have somebody to actually
complete the work, it is not going to happen. And I am not a
fan of the Federal Government imposing restrictions and
regulations on States. However, I would like to ask you this
question.
In the State of Wisconsin, they have established some
artificial limits on the amount of apprentices that a single
master, a tradesman, can have. So, for instance, a single
plumber, master plumber, can only have two apprentices that can
work underneath him simultaneously.
So, in your professional opinion, if we were to standardize
the ability for our masters to have more apprentices underneath
him, what type of effect would that have on your workforce?
Mr. Firth. Well, I can't speak--I am not a plumber. I don't
have any experience in that. I usually sub that out.
Mr. Van Orden. I understand.
Mr. Firth. But as far as workforce goes, though, I don't
think it would be a bad thing. It is going to probably cost
more, it is going to have to be accumulated into the bids that
we would turn in or whatnot, if you add more people. I think
there are other avenues for training that we could have through
apprenticeship programs. I think the trades right now do a
pretty good job of having those ratios or whatever. I am an
open shop contractor, so, I can't really speak for how the
unions work. But, I think it would probably cost more.
Mr. Van Orden. OK.
Mr. Guenther, if you could briefly--and maybe we should
take this later because I am limited on time. Can you speak
about the effects of the lack of maintenance on our locks and
dams and the potentiality for the effect on commerce?
Mr. Guenther. I am sorry. The lack of?
Mr. Van Orden. The maintenance on our locks and dams.
Mr. Guenther. Well, similarly, I think it is a big issue,
similarly to what we have been talking about today, the O&M
funding. Locks on the inland waterways are very important. I
know that we handle--we are the largest ship channel in the
country, but we know there are 200,000 barge movements in and
around our facility. So, making sure that we are maintaining
all waterways, not only deepwater, but shallow water. Barge
canals are extremely important and should be included in the
funding process.
Mr. Van Orden. Very well. Thank you very much.
And, Mr. Regan, reading your written testimony, I can only
assume that you are not related to Ronald Reagan. Is that
correct?
Mr. Regan. No. He fired the air traffic controllers. I am
lucky enough to represent them.
Mr. Van Orden. That is correct.
Hey, so, listen, man, I got to tell you something. I did
read your testimony, and I am going to strongly encourage you
to do something: Change your tone.
So, I am a retired senior enlisted Navy Seal who dropped
out of high school and got a GED. I have been supporting myself
financially since I was 16 years old. So, I consider myself a
tradesman. And we have to work together collectively. But the
tone of your written testimony is not conducive to that.
So, I will reach across the aisle to my colleagues. I am
more than happy to work with union labor, absolutely. But we
have to start addressing each other in a more respectful
manner, and I would just encourage you to do that. And I am
more than happy work with you.
With that, I yield back.
Mr. Crawford. Thank you to the gentleman.
Mr. Ezell, you are recognized.
Mr. Ezell. Thank you, Mr. Chairman.
In accordance with the committee rules, I ask for unanimous
consent to submit a statement from the National Association of
Waterfront Employers for the record.
Mr. Crawford. Without objection, so ordered.
[The information follows:]
Statement of Robert W. Murray, President, National Association of
Waterfront Employers, Submitted for the Record by Hon. Mike Ezell
Chairman Graves, Ranking Member Larsen, and the Members of the
Transportation and Infrastructure Committee, the National Association
of Waterfront Employers (``NAWE'') appreciates the opportunity to
submit its views on the current state of U.S. transportation
infrastructure and present and future challenges throughout the
international supply chain. As the voice for U.S. marine terminal
operators (``MTOs'') in Washington, DC, NAWE witnessed first-hand the
resiliency of America's transportation stakeholders and their labor
partners in overcoming the unprecedented supply challenges of the last
three years. Moreover, NAWE is acutely aware of the need for further
infrastructure investment by private MTOs--with support from the
Federal government--to meet the challenges of the future.
Current State of Supply Chain Challenge at Marine Terminals
As the Members of this Committee know, unprecedented consumer
demand for durable goods started in April 2020, created congestion
throughout the entire international supply chain, leading to space
shortages at domestic warehouses, marine terminals, and rail yards.
These congestion issues were further exacerbated by critical shortages
in transportation personnel and equipment, including motor carrier
drivers, chassis, and containers. As the critical hub in U.S.
international trade, marine ports were often the focus, both publicly
and politically, of these supply chain congestion challenges. Indeed,
photos of fully-laden vessels anchored outside of U.S. ports became the
symbol of supply chain congestion.
However, as they have always done, U.S. MTOs and longshoremen
responded with unwavering resiliency. When other industries were
shutting down in the face of the pandemic, U.S. MTOs remained open,
without disruption, to ensure that consumer goods would be delivered in
a timely manner. When demand for the use of marine terminals exceeded
capacity, our industry worked with Congress and the Administration to
find new ways to meet those challenges, including operating marine
terminals 24 hours a day, seven days week, despite such operations
creating financial challenges for MTOs.
Two critical ``tools'' assisted MTOs in meeting these challenges
and ensuring that operations returned to their current steady state.
The first was the imposition of terminal demurrage, which created an
appropriate incentive for shippers to remove containers from marine
terminals in a timely manner. The second was the ability to rely upon
MTO agreements filed with the Federal Maritime Commission (``FMC'' or
the ``Commission'') which, under the protection of antitrust immunity,
allowed MTOs to coordinate efficiently and effectively to promote cargo
fluidity.
Terminal Demurrage
In its simplest terms, terminal demurrage is a storage fee that is
charged when a shipper improperly seeks to use a marine terminal as a
warehouse. A critical element to ensuring a steady flow of cargo
throughout the supply is the timely removal of containers from marine
terminals by shippers. Marine terminals operate in a finite, zero-sum
environment. Each container that is sitting at a marine terminal is
taking up space that a container on the next incoming vessel cannot
occupy. Unfortunately, throughout the recent supply chain congestion
challenges, MTOs repeatedly witnessed shippers improperly treating
marine terminals as long-term storage facilities, particularly when
shippers' inland warehouses ran out of capacity. Accordingly, terminal
demurrage served, and continues to serve, as an invaluable incentive to
ensure that shippers removed their containers swiftly to allow space
from the next round of import--and export--containers. In addition,
terminal demurrage ensures that MTOs are appropriately compensated for
their overhead costs associated with storing containers at the costly,
waterfront property that marine terminals occupy.
In midst these supply chain congestion challenges, Congress passed
the Ocean Shipping Reform Act of 2022, Pub. L. No. 117-146 (``OSRA
2022''). NAWE is extremely grateful that Congress ultimately recognized
the importance of terminal demurrage in ensuring the fluid transfer of
cargo through U.S. ports by removing MTOs from the substantive
demurrage billing requirements of OSRA 2022. Such action was a further
recognition of Congress that MTOs lack any contractual privity with
shippers and therefore:
1. MTOs have no control over the ``free time'' (i.e., ``rent
free'' storage time at the marine terminal) agreed to between the ocean
carrier and the shipper; and
2. MTOs have no information as to why the shipper is delayed in
removing their container from the marine terminal.
The FMC is currently engaged in a rulemaking process to implement
OSRA 2022's detention and demurrage billing requirements, having
published its Notice of Proposed Rulemaking (``NPRM'') on October 14,
2022. Unfortunately, the FMC's NPRM ignored the clear Congressional
intent and has proposed to include MTOs in OSRA 2022's demurrage
billing requirements, which would potentially impede the flow of cargo
and places untenable burdens on MTOs that lack means to obtain the
information required by OSRA 2022. NAWE looks forward to the Commission
correcting this error in its final rule. In the interim, NAWE wishes to
thank Congress for its support regarding the importance of terminal
demurrage in ensuring the flow cargo and asks this Committee to allow
the rulemaking process to be completed, consistent with the
Congressional intention underlying OSRA 2022.
MTO Agreements
In addition to terminal demurrage, MTOs were able to overcome
recent supply chain challenges by coordinating efforts under agreements
filed with the FMC, which are granted antitrust immunity by the
Shipping Act. MTOs generally operate on leased property within a larger
public port complex. Accordingly, some level of cooperation between
competing MTOs is necessary when operating on common port property.
Congress recognized this unique operational environment, and the
corresponding need for cooperation between MTO competitors, by granting
agreements filed with the FMC antitrust immunity (generally after a
statutorily mandated 45-day waiting period). NAWE's members are
extremely grateful for this authority, because it allowed MTOs to
coordinate responses to supply congestion, including extending gate
hours to 24 hours a day, seven days week. Accordingly, MTOs have used
their antitrust immunity to support the flow of cargo, often at a
financial loss and to the benefit of shipper interests, rather than to
seek self-enrichment.
Under the FMC's current Shipping Act authority, if the Commission
believes that a filed MTO agreement, by a reduction in competition,
would produce an unreasonable reduction in transportation service or an
unreasonable increase in transportation cost, it can go to district
court to seek injunctive relief. The FMC has never exercised this
authority with regard to a filed MTO agreement because, quite simply,
MTO agreements do not reduce competition, they increase port
efficiency. Accordingly, NAWE urges Congress to maintain the current
Shipping Act antitrust immunity and enforcement regime with regard to
filed MTO agreements, which are invaluable for meeting present and
future supply chain challenges.
Marine Terminal Infrastructure Needs
NAWE's members face additional challenges when preparing to meet
supply chain challenges in the future. Foremost of these challenges is
the requirement to meet decarbonization goals under the Inflation
Reduction Act's Clean Ports program. Key to achieving these goals is
the purchase of zero- or near-zero emissions port equipment to replace
existing cargo handling equipment. Support from this Committee for
funding opportunities, including through the Port Infrastructure
Development Program, will be crucial to support these costly next-
generation equipment upgrades. For example, a single diesel tractor
used at a marine terminal can cost around $150,000, while an electric
tractor and its charging infrastructure could cost close to $600,000.
Moreover, the utility infrastructure at ports will need to be adapted
to allow MTOs to charge their cargo handling equipment and draw more
electricity from the grid. Accordingly, additional support from this
Committee will be necessary to allow ports to rapidly develop and
restructure their infrastructure master plan and implement capital
improvements.
In addition to the overwhelming costs, there are significant
challenges in sourcing American-made zero- or near-zero emissions port
equipment. Domestic manufacturers are currently partnering with battery
suppliers to build specialized electric port equipment, however, here
are still a number of types of cargo handling equipment that are not
available in the United States. Accordingly, NAWE encourages this
Committee to adopt a measure of flexibility to allow the use of Federal
funding to purchase domestically unavailable equipment.
* * *
NAWE appreciates this Committee's leadership in addressing the
supply chain and infrastructure challenges that U.S. marine terminal
operators face currently and in the future. We are also thankful that
the Committee has invited Roger Guenther, Executive Director of the
Port Houston, to testify at this hearing. Mr. Guenther is a tremendous
leader in the marine terminal industry and is an invaluable resource
for this Committee to better understand the challenges and
opportunities inherent in the operation of U.S. ports.
We look forward to continuing to work with this Committee to
further develop a resilient and competitive U.S. supply chain.
Mr. Ezell. I will try to talk fast.
Thank you, Mr. Chairman.
I am grateful to have the chance to discuss the many social
and economic benefits provided by a well-maintained
transportation system. People want to feel comfortable that
they can travel safely through our local communities and
industries and need to know that their goods are delivered
efficiently and safely at a reasonable cost.
Mr. Spear, I am going to start with you.
It is clear from today's discussion there is a need to
improve the Nation's physical infrastructure to keep pace with
our global competitors and address inflation.
In your testimony, Mr. Spear, you mentioned how Federal
policies affect a State's ability to begin critical
infrastructure improvements.
Mr. Spear, how does biased, left-leaning administrative
guidance cause uncertainty for the projects in our States back
home?
Mr. Spear. I think I would dial back to the Federal Highway
Administration memo that we have been referencing throughout
this hearing. If everything is going so swimmingly well with
handing States the moneys they need to do these projects that
they deem priority, then why have the memo?
Mr. Ezell. Exactly.
Mr. Spear. Why have it? You are just breeding confusion,
including in my industry, but certainly in States like yours.
So, get rid of the memo. Stop playing games. I know why it is
there. The environmental lobby doesn't want any more cars and
trucks on the roads. That is why. So, it is to appease them.
This is a lot of money. It is a law handed to them to
administer. There is plenty there to go around even with
inflation. This is a lot of money. And I think States need to
be hand and glove working with the Federal Highway
Administration to get these projects funded and underway.
So, that eliminates a lot of confusion, just get rid of the
memo.
I think as far as emergency response--I understand you have
a lot of wisdom in this department--making certain that the
Secretary of Transportation and Governors like that in
Mississippi have strong lines of authority and communication to
ensure that we can respond to instances like hurricanes, but
also things that aren't covered in emergency declarations, like
the Colonial Pipeline, COVID-19.
These are things where we really need to break down
barriers and work together. And I know you have a lot of
experience in that, and I look forward to working with you on
it.
Mr. Ezell. Thank you.
Mr. Guenther, now, the ports of the Mississippi gulf coast
are unique in terms of types of services, but they are
similarly dependent upon regular maintenance of their
navigation channels and approaches.
In your testimony, you touched on this briefly, but can you
talk more about the importance of channel deepening and
widening projects and the maintenance dredging performed by the
Army Corps of Engineers?
Also, what are some specific challenges you have faced with
these projects, and how can Congress help?
Mr. Guenther. Thank you for the question. Certainly,
Houston and the rest of the ports in the Mississippi gulf coast
have similar issues with maintaining the dredging. I think
there is a lot of certainly togetherness in that.
And as we move forward, we just need to make sure, like I
had mentioned before, that we are getting O&M funding to do
that, to keep them. All these channels, they are authorized to
be at a certain depth and a certain width for a reason, to
serve the economy of the United States of America, and we ought
to spend the money to make sure that we keep those at their
authorized depths so that we can have the efficient flow and
competitive commerce in this country.
Mr. Ezell. Thank you.
And with that, Mr. Chairman, I yield back.
Mr. Crawford. Thank you.
The chair has been notified there will be a series of votes
occurring on the House floor. The committee shall stand in
recess subject to the call of the chair.
[Recess.]
Dr. Van Drew [presiding]. The Committee on Transportation
and Infrastructure will reconvene, and I recognize myself for 5
minutes.
Crazy day, isn't it?
My questions are going to be a little bit different, and I
just wanted your thoughts in general. You are in different
areas of industry and business and transportation. And I want
to say from the get-go that I certainly am supportive of
renewable energies and of a cleaner planet and trying to do
everything that we could do.
I am also supportive of the idea that I want America always
to be number one, and we should never be ashamed of it. We have
to be the best.
And I have a little bit of concern because of that, and you
deal with all this, that some of the requirements that do exist
or may exist in the future are going to make it a little bit
more difficult for you at times. It is going to be hard to do.
I was here earlier on in the day, some of the discussions
of all the things that are required. So, making sure that
everything is running the way that Government sees it isn't
always necessarily best for business or the easiest for
business.
So, when it comes to the supply chain, I believe that part
of it exists, the problems that we have with it, to some degree
exist because of some of the changes that we may be trying to
make, quite frankly and candidly, a little bit too quickly. I
believe that it can be good. We have more to learn.
So, with that, I would ask you, just each one of you,
quickly to say what you think the greatest challenge is. And
without getting nervous, I promise nobody will yell at you, if
in some ways you are being pushed too hard, or we could just
slow it down a little bit and make sure that we are competing.
Because, last thing I will leave with you, again, not
necessarily in what you are all involved in, but in many forms
of business, industry, energy particularly, we are putting all
these requirements upon ourselves, for example, in energy, but
we are not really the problem, whether people want to admit it
or not. And India is not, China is not, Russia is not, and many
other countries are not putting these requirements upon
themselves.
So, it is sort of like saying, well, we are going to be
perfect. It is going to cost us more. It is going to be harder.
We are going to create issues. We are going to have to buy more
stuff from other people because of all these requirements. That
is not necessarily a good thing.
I just wanted some general thoughts on that. And I know
everybody was touching on you about, well, what are you doing
about this and how are you going to make sure everything is
exactly perfect in the brave new world? I would like to see the
other viewpoint.
So, Chris, I will start you, we'll just go right down the
line.
Mr. Spear. Sure. Listen, as I said in my opening statement
and hopefully conveyed throughout the hearing, let's just be
realistic. That is all. Just put all the headwinds that we are
going to face as a country to get to zero. It will come. It
will happen eventually.
But this rush that we are seeing, this timeline, is simply
unachievable. It is going to be embarrassing, because we are
not going to hit it. We are not going to have the
infrastructure in place. Let's just say we did, we are not
going to have the power to put into it because we haven't
invested and opened that up. And we are not going to have
access to the minerals needed to create the batteries that go
into these trucks.
I had an instance in Joliet, Illinois, a member built a 30-
stall, not a big facility, but a 30-stall distribution center
there. ``Well, let's just electrify it.'' And they submitted
the plans.
The city of Joliet shows up a few days later and says,
``What are you building here?''
``What do you mean? It is a truck terminal.''
They said, ``You are asking for more power for this 30-
stall facility than the entire city of Joliet.''
That is the disconnect, and that is not solved overnight.
Dr. Van Drew. Exactly.
Mr. Spear. So, let's be realistic about it. Let's put all
the headwind on the table, and let's come up with a timeline
that works. And we are all in on that. But that has to be
transparent.
Mr. Jefferies. Yes. Government can obviously--policy can
help drive the process forward, but the market has got to be
able to react and innovate in order to meet those top-line
goals.
And you can facilitate, you can support, you can take a
carrot approach. But, to Chris' point, you have to look at
things holistically, and just demanding one thing in one area
here without considering the consequences or the inputs
required from another part of the process, you just end up in a
backwards situation where you are being jerked back and forth
and trying to figure out just what the path forward is.
So, it just requires a holistic, clear-eyed approach.
Mr. Firth. Yes. For me, I think it is the administrative
burdens that are going to be coming down the pipeline, I think,
to comply with all these Federal requirements, as it gets more
complicated.
We have 215 employees that we look after. We have an office
full of maybe 15 people. And I kind of think if all of a sudden
Buy America, do I have to hire somebody just to be an expert in
Buy America, for instance?
And then I also kind of think about, OK, what about some of
these smaller firms that don't have those resources, those
capabilities to be an expert in Buy America?
So, somehow or another we have got to be a little simpler.
And simple is better.
Dr. Van Drew. I agree with you.
Mr. Guenther. Just a thought about the supply chain from a
port perspective.
Supply chain disruption was really due to one thing, and
that was just the historic demand on the system that wasn't
able to absorb it. There hadn't been a single thing really that
has fixed it so far, except for that the demand has gone down.
We have learned a lot. We need to continue to look at more
cushion in the movement of freight, of goods, with lower
emissions, that achieve the goals that we need to. And I would
just cite, let's don't get overly aggressive with the rules
that fix it going forward.
Dr. Van Drew. Thank you.
Mr. Regan. Well, I am used to getting yelled at.
Dr. Van Drew. Time has expired, but go ahead, you finish
up.
Mr. Regan. I would just say we need to have the workforce
in place to be able to meet the consumer demand that we are
going to have, both from a passenger and freight perspective,
and we also need to rebuild our manufacturing capacity so that
we are not completely reliant on foreign countries for the
critical materials that we need to rebuild in a greener and a
better way.
Dr. Van Drew. My time has expired. I appreciate you guys.
I am going to recognize now Mr. Williams, Representative
Williams, for a statement.
Mr. Williams of New York. Thank you, Mr. Chairman.
Thank you to the witnesses for being here. We certainly
cover a broad swath of transportation here. So, thank you for
your time.
I had the benefit of attending the Wharton School and
studying operations under Patrick Harker and Professor Marshall
Fisher, if you have ever come across either of them. So, I have
a slight understanding of queueing theory and OR models and
some of the things I think--the tools that you use.
But more importantly, I played the beer game. And before
you or other of my colleagues here think it is that beer game,
it is actually the supply chain beer game, which I think
perhaps many of you have played or members of your team have.
And the idea is that in any kind of supply chain across
multiple distribution points, if you don't have visibility and
transparency in data, that you make some very egregious
decisions and assumptions about supply and demand and capacity
and utilization and all those things.
And I notice in the petroleum industry they have the Energy
Information Administration. A little bit different function. I
know it is a commodity. It is much simpler. But the industry
cooperates in ways that share data and visibility around
supplies, storage, transport, all of these kinds of things that
seem to make things move a little bit simpler.
And it is really an open-ended question. Are you aware of
any industry or federally sponsored clearinghouses or
brokerages of real-time or time-relevant data--whatever that
is, if it is daily, or weekly, or hourly, whatever it is that
is giving visibility of supply chain information--that makes
your jobs easier, that makes you more efficient?
Is there a role to be played by the Federal Government to
broker this kind of exchange of information that helps you do
your job better? Is that something you have considered? Or is
there something I should be aware of and I could look into?
Mr. Jefferies. I am happy to take the first crack at that.
In the rail industry, actually, my organization is a primary
clearinghouse for data along those lines. We have a wholly
owned subsidiary called Railinc in Cary, North Carolina, that
is kind of the IT backbone of information sharing and
information transfer, because we are an interconnected network
and exchange traffic, exchange business across lines so much
that tracking that is critically important. Also, we are
required to submit a vast amount of reporting data to our
economic regulator, the Surface Transportation Board. And all
of that data is generated in-house in my shop.
I will also say there is a pretty significant push,
recognizing that the Amazonification of the world has occurred.
And when I order a pizza, I want to know when the pepperoni is
going on it before it goes in the oven. And so, there is a lot
of work in telematics and real-time sensor tracking, et cetera,
in the industry. There is a joint company that has been stood
up with railroads--short lines, Class I's, carowners, car
leasers--really working to make headway there. So, there are a
lot of efforts afoot.
Mr. Williams of New York. I understand that with rolling
stock and maybe to manage capacity across a rail line, again,
not my area of expertise, but what about, like, bill of lading?
What about the actual flow of materials that allows companies
to communicate better? And again, if you have played the beer
game, you know what I am talking about, is that if you have
better data transparency, it really makes a huge difference in
how things flow. And again, if this doesn't exist, if it is
something we should look at or that you think has obvious
barriers like no one would do that, then let me know.
Mr. Jefferies. At the risk of dominating the conversation,
that is an issue we ran into during some of the container
supply chain challenges from port to truck or port to rail to
inland yard and to final destination warehouses. A lot of times
your contract is with the ocean carrier, and you don't know who
the beneficial cargo owner is or what is in the box, and so,
you are kind of playing a guessing game about where you are
positioning your boxes in the yard, and just some simple
knowledge transfer I know our folks have said would allow for
an easier transition of product.
Mr. Guenther. Yes, I agree. There is information there. It
has just become the sharing of that information, for
competitive reasons or whatever it is, is that likely to occur?
And it is not occurring today, but there is a lot of data out
there, it is just not being exchanged.
Mr. Williams of New York. Thank you. And maybe the
Government could be a good-faith broker, in some way, of data.
But thank you.
Dr. Van Drew. Thank you. The gentleman's time has expired.
I now recognize Mr. Molinaro for 5 minutes.
Mr. Molinaro. Thank you, Mr. Chairman. Thank all of you. I
know it has been a long day.
I was here earlier during some of the conversation
regarding the pandemic. I spent the last 12 years as a county
executive in New York local government. I just want to
acknowledge, first and foremost, that you and the folks you
represent really during a time of great challenge rose to the
occasion and, frankly, we ought not forget that. The challenge
that we all faced and the determination in many ways, although
I didn't agree with the language of the essential work, that
the folks that you represent here really offered American
people over those 2 years.
Having listened to a conversation about beer and pizza, I
am suddenly very hungry. But that said, I want to return to my
experience during those 12 years in local government.
And, Jeff, if I could, rural communities in particular are
underrepresented in inflation calculations. The miles they have
to travel to move projects, the lack of workforce, the supply
chain issues really are exacerbated in rural communities. Can
you talk for a moment, in particular, if you can localize it
for me, meaning New York--and to the extent you can, I will
accept it, to the extent you can't, I will accept it--but can
you talk to the real life burden and the challenge we now have
in more rural communities to move infrastructure project in
particular?
Mr. Firth. Absolutely. I can't speak to New York. But, for
instance, we have a project out at Yellowstone National Park
where we are replacing a bridge. And you wouldn't really think
about the logistics that need to go into getting materials in
and out of the park, but also, too, from our workforce on if
you are working 6 days a week, they have got to go to the store
and get groceries, they have got to get laundry done, they have
got to drive back and forth. These rural areas, it is very
difficult sometimes to get the infrastructure in place to
support call it the project that is actually happening.
So, I would say that it is not insurmountable, but you have
just got to think kind of outside the box and be proactive.
Mr. Molinaro. And that is why I took a little issue with a
slide we saw earlier during the hearing. I would offer $10
billion in 2022 doesn't go as far as $8 billion did in 2021.
And that has a lot do with both inflation, the supply chain
issues, and the challenges that we have in rural America to
move projects.
I appreciated your reference in your testimony to Secretary
Buttigieg's comment, no one understands a community's need
better than those who live there. I wonder, Jeff, and maybe
Chris, if you could, in the few moments I have left, my concern
is that the infrastructure dollars flow to State governments
and don't often make it to the ground. I know that I look very
young, but I am old enough to remember the last infrastructure
bill in 2008. And in the State of New York, very few dollars
found their way to actual projects. Could you perhaps just
reflect on that?
I am concerned in particular that State government, at
least, again, localizing it in New York, consumes too much of
those dollars and that we didn't build in enough of a drive to
localize it. And I would say, I do not take a plea agreement on
that Federal Highway Administration memo. I think it does send
a message that there is a priority and it isn't necessarily
what those in the local communities feel is necessary.
Mr. Firth. Yes, I think having the State governments have
their own decisionmaking on what is best for what their
communities are, right? They are living and breathing it. They
understand what their needs are better than, I think, than,
say, a one-size-fits-all policy coming from Washington. So,
that is how I would answer that.
Mr. Molinaro. And maybe to Chris, same question, but is
there a concern that the States gobble up those dollars before
they get to local communities, cities, counties, et cetera?
Mr. Spear. That has been the trend, but I think also we
have lacked the kind of spending that you witness in the IIJA.
You love it or hate it, that is a lot of money. That is a lot
of money. Even with inflation, there is a lot of money going
out the door. And that is why we have oversight, to make
certain that it is being spent correctly.
I do think smaller communities that are generally 80
percent if not more dependent on trucks to deliver their daily
goods do get generally less of a voice on such matters. But
their infrastructure in most instances is a lot less expensive
than, say, around very heavily urban populated areas.
So, I do think it is important for hearings like this,
groups like ours, to make certain that they are not lost, that
they are getting the dollars, because those roads still need to
be maintained. We still need to make certain that we are
delivering just in time. So, people want it faster today than
they used to. COVID we saw us move more to, I want it in 2 days
or less. That has shifted our entire industry radically to
warehousing things regionally to get things to people's door,
but it takes more drivers, it takes more equipment to do that.
And we need infrastructure to get it on. So, a lot of that is
in rural communities and they can't be lost.
Dr. Van Drew. The gentleman's time has expired. Thank you.
And I now recognize Mr. James for 5 minutes of questions.
Mr. James. Thank you, Mr. Chairman.
I also would like to take another moment to thank you and
applaud you for your stamina, your patience in the work that
you put in not just today, but each and every single day.
I ran a supply chain logistics company, automotive, in
Detroit. I deal with trucking and rail each and every single
day to satisfy our customers and to help grow our economy. I
was asked recently by a reporter in reference to what you are
hearing about the debt ceiling in this meeting that is going on
with the President and the Speaker today. And they asked me
specifically, well, what are you going to cut? And I responded,
we are going to cut harmful regulations that make it more
difficult to bring jobs back from Mexico and China. We are
going to cut taxes to make it more easy to get folks the money
that they have earned and so that they can take care of
themselves and their families.
So, to those ends, what we are going to cut to make things
easier to do business, to make it more hospitable to do
business in America, I need you to inform us how we can keep
our promises to the taxpayers, to our constituents, to our
customers, to lower prices, bring back jobs, and keep our
communities safer.
By expounding a little bit, this is to no one in
particular, because you all have expertise here and I only have
3 minutes, but how do we help remove unnecessary bottlenecks?
What are the onerous regulations that we can get out of your
way so you can be more successful? And what technological
improvements can we assist with helping you move forward?
Mr. Jefferies. I am not shy. So, one, I think as an
industry that spends average $24 billion of our own capital
every year putting it back into our network and also partners
with States, localities on public grant programs for projects
of big significance throughout the country, it is, how do we
put that money to work more quickly? How do we get through
reviews, permitting, et cetera, in a much more predictable,
rational way that provides certainty to our folks who are
making investment decisions? Again, all folks need a certainty
about what to expect, and they can manage that process.
Two, it is really looking at the regulatory framework, and
how do we make sure it is focused on the future, how do we make
sure it is focused on innovation, how does it champion
technological deployment? How do we modernize the regulatory
structure? And that doesn't mean always just getting rid of
regulations, it is adjusting for the present day and for the
future so that we can be more nimble and we can evolve as
required.
We can go on and on, but I don't want to take----
Mr. James [interrupting]. You have 2 minutes.
Mr. Spear. That is fine. I was told I talk too much, so--
not you, me.
But I would just say, listen, really quick, I think the
bottlenecks have been very much covered. I think they are going
to be released next week. We will certainly send it up to you.
You can prioritize and see where everybody ranks around the
country. That is a roadmap. That is where DOT should be
centering its gravity. Alleviating congestion brings down
inflation. It improves safety, it lowers fuel burn, it lowers
emissions. These are all good things. There is something in
that for everybody. And it is such an easy list to look at. You
can see where it is happening.
On a more regulatory front, we talked earlier about our
workforce. Listen, with all these States, Canada included,
legalizing recreational marijuana, we need tools to deal with
this. We need hair testing, OK, beyond urinalysis. We need to
make certain that people getting behind the wheel of an 80,000-
pound vehicle are not impaired. And we want to work with you.
And that channel conflict on the regulatory front between
HHS and DOT is real. They do not communicate. They are not
willing to cut a deal on this thing. We have told them to do
this, legislated this, and now we are back before you again to
deal with it. This is going to create a very litigious
environment if we do not deal with the regulatory framework
that oversees an interstate commerce industry like ours. So,
hair testing would be very appreciated, and we look forward to
working with you on it.
Mr. James. Thank you, Mr. Chair. I yield back.
Dr. Van Drew. I now recognize Mr. Duarte for 5 minutes of
questioning.
Mr. Duarte. Well, thank you, gentlemen. Thank you,
Chairman. I appreciate being here today.
I represent a rural district in California that sits right
outside of San Francisco. We ship a lot of almonds out of our
district. We ship a tremendous amount of ag commodities to west
coast ports. And we also have a large commuter pool that
travels or tries to travel daily from Lathrop, northern and
southern parts of my district, into the bay area, one of the
most dynamic job markets in the world. And I am very concerned
about two things. And I will welcome answers from any of you. I
have read all of your comments that were submitted, so, thank
you for that.
One is, are my constituents getting their best bang for
their buck out of the Infrastructure Investment and Jobs Act,
or is America hamstringing our ability to add the lanes that
working families need to get to work with carbon, Buy American?
Do we have the power grid to support a long-term production of
domestic building supplies, rebar? Does anybody want to build a
steel plant in America today with the carbon policies hanging
over us? I would like some very candid answers to that.
And then, we have also understood that on the port side, a
great deal of our backlogging at the ports--there have been
some bank reports. Rabobank did a very extensive report on nut
supply chain issues--peanuts, walnuts, almonds, pistachios--and
really pointed out shipping company consolidation in the last
decade as being a major culprit of, I would call, a planned
scarcity of shipping capacity that spiked revenues and
increased shipping company profits extraordinarily.
So, please, any of you that would like to address any of
those issues I'll welcome.
Mr. Regan. To answer your first question about whether or
not people want to make steel plants in this country, I have
spoken to iron, steel, aluminum manufacturers, they want to
expand their capacity, they are ready to do that. And we want
to help them do that. And if we wanted to find how are we are
getting the best bang for our buck, if you want to be able to
have the cheapest stuff, that is one way to define it. In my
view, making sure that we are using this massive expenditure to
also invest in our communities, that means investing in our
manufacturing capacity as a country so we are not relying on
overseas for manufactured goods. I think that is a really good
bang for our buck long term for our country. I also think
investing in good jobs, making sure that there are decent wages
and decent benefits so that people have disposable income to
reinvest in their communities. That is a pretty darn good bang
for your buck.
In addition to delivering really high-quality
transportation systems in this country, I think doing it the
right way has monumental benefits outside of just the new roads
or the new train route. I think that we can actually invest in
our communities and our people in a way that we haven't always
done in the past.
Mr. Duarte. Excellent. Thank you.
Mr. Guenther. I would just add that, are they getting the
bang for their buck, you made some comments earlier about your
agricultural constituents field growing walnuts, shipping them
around the country. The assets in an efficient supply chain,
whether that is in the waterways or the highways or the
infrastructure, getting it to and from the port efficiently
should be first and foremost. The more we can put on the ship
and the quicker we can get it through our ports, the better off
for your constituents.
Mr. Duarte. I agree. In summary, my platform is abundance.
We need abundant food, abundant energy. And logistics are a
major factor in abundance. And abundance to working families is
affordability, and my district is entirely working families.
Mr. Guenther. Yes. No doubt. And an efficient terminal, the
trucker deserves a clean run through there. They need to be
serving the rail, all of the modes of the supply chain need to
be efficient or it is passed onto the consumer, whether it is
an import or an export of those goods.
Mr. Firth. Yes. I think the best bang for the buck, the
American people are going to see it maybe not right now, but
later. I think back to when the highway system was built back
in, what, the fifties and the sixties, it probably wasn't
recognized right at that moment, but it catapulted America
later on down the road. I think that is where something today
is that with the IIJA money, we are going to be able to see
that that is going to take America further down the road and
be----
Mr. Duarte [interrupting]. Is it going to manifest itself
in markedly better freeways, easier commutes to work, better
logistics in our products and goods getting to markets and
getting to consumers in ways that improve their lives?
Mr. Firth. I think so.
Mr. Duarte. Are there ways to make that even better?
Mr. Firth. Well, you have kind of heard me talking about
permitting. That is kind of one of my hot buttons, is that
streamlining permitting, we have got to get it built first. And
so, if we want greener and faster and everything better, it
starts with permitting, we have got to figure that out.
Mr. Duarte. Thank you.
Dr. Van Drew. Thank you. The gentleman's time has expired.
And the gentleman yields back.
Are there further questions from any member of the
committee who has not been previously recognized?
Seeing none, that concludes our hearing for today. I would
like to thank each of the witnesses for your testimony.
I ask unanimous consent that the record of today's hearing
remains 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 any additional comments and information
submitted by Members or witnesses to be included in the record
of today's hearing.
Without objection, so ordered.
The committee stands adjourned.
[Whereupon, at 2:37 p.m., the committee was adjourned.]
Submissions for the Record
----------
Letter of February 10, 2023, to Hon. Sam Graves, Chairman, Committee on
Transportation and Infrastructure, from Christine M. Burgeson, Senior
Vice President, Airlines for America, and attached aviation
stakeholders letter of November 15, 2022, Submitted for the Record by
Hon. Sam Graves
February 10, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, 2165 Rayburn House Office Building,
Washington, DC 20515.
Dear Chairman Graves and Members of the Committee:
Thank you for holding the hearing entitled ``The State of
Transportation Infrastructure and Supply Chain Challenges'' earlier
this month. Like many on the official witness panel, aviation too faces
supply chain challenges.
While there are certainly many supply chain challenges across the
aviation sector, we would like to draw your attention to one key supply
chain breakdown that is of particular and timely concern. On November
15, 2022, a broad group of aviation stakeholders wrote the
Administration regarding their commitment to finding reasonable
solutions that allow implementation of 5G while addressing safety and
operational disruptions in the National Airspace System. One component
of those reasonable solutions is the ongoing effort to retrofit
impacted aircraft with radio altimeters (RAs) that are not susceptible
to interference from 5G signals. The aviation community has been
actively and aggressively engaged in meeting retrofit deadlines,
however, supply chain challenges and certification solutions are making
deadlines difficult, if not impossible, to meet. In particular, the
letter stated:
``Unfortunately, due to global supply chain issues, lack of a
certified solution for one key RA, and the FAA only recently
identifying the criteria for RAs that would not need to be changed, RA
manufacturers and air carriers will likely be unable to fully meet
either the December 2022 deadlines for smaller regional aircraft and
many large transports nor the July 2023 retrofit deadline, though we
continue to do everything within our power to do so. Further, all this
investment will be wasted if a long-term mitigation plan is not put in
place and codified in regulation, as additional wireless providers that
have not been part of these interim voluntary efforts begin to provide
services.''
We respectively request the Committee consider including the
attached aviation stakeholder letter in the hearing record to make sure
the Committee is aware of these acute supply chain challenges and the
mitigations necessary to address them.
Thank you for your consideration,
Christine M. Burgeson,
Senior Vice President, Airlines for America.
attachment
November 15, 2022.
The Honorable Brian Deese,
National Economic Council Director,
Executive Office of the President, 1600 Pennsylvania Avenue, NW,
Washington, DC 20500.
The Honorable Gina M. Raimondo,
Secretary of Commerce,
U.S. Department of Commerce, 1401 Constitution Avenue, NW, Washington,
DC 20230.
The Honorable Pete Buttigieg,
Secretary of Transportation,
U.S. Department of Transportation, 1200 New Jersey Avenue, SE,
Washington, DC 20590.
The Honorable Alan Davidson,
Assistant Secretary of Commerce for Communications and Information,
National Telecommunications and Information Administration, U.S.
Department of Commerce, 1401 Constitution Avenue, NW,
Washington, DC 20230.
Mr. Billy Nolen,
Acting Administrator,
Federal Aviation Administration, 800 Independence Avenue, SW,
Washington, DC 20591.
Dear Director Deese, Secretary Raimondo, Secretary Buttigieg,
Assistant Secretary Davidson and Acting Administrator Nolen:
It has been more than a year since a coalition of aviation
stakeholders met with the National Economic Council (NEC) to discuss
the need for C-Band 5G implementation to occur without sacrificing
aviation safety. This meeting came after years of meetings and letters
to the Federal Communications Commission (FCC), the National
Telecommunications and Information Agency (NTIA) and the Federal
Aviation Administration (FAA) raising significant concerns over the
FCC's auction of the 3700-3980 MHz spectrum (C-Band) and how it will
impact radar altimeters (RAs) and the continued safe operation of
commercial aircraft within the National Airspace System (NAS).
Those meetings, and the last-minute intervention of the Secretary
of Transportation prevented the grounding of a significant portion of
the US commercial aviation fleet. This marked the beginning of a
collaborative and fruitful discussion between the telecommunication
industry, specifically Verizon and AT&T, and the aviation industry.
However, after a year of discussions and despite accommodations made by
all parties, we are now seven months away from the next deadline, with
significant risks still unresolved. We believe that by finding
accommodations now, we can prevent another last-minute herculean
intervention by the Administration and major disruption to our air
transport system.
The baseline situation remains unchanged. Our industry is strongly
supportive of the deployment and implementation of 5G services
nationwide, but we will not compromise aviation safety. Since our
conversations last winter, the FAA has verified that certain aircraft
RAs are susceptible to interference from 5G signals with a subsequent
degradation of safety. Since January 2022 the FAA has documented over
100 FAA incidents of potential 5G interference, the majority of which
were found to have a direct RA impact resulting in safety alerts by
systems such as the Terrain Avoidance Warning System. Unfortunately,
the US government agencies do not appear to be on the same page with
respect to these safety issues. As a result, aviation stakeholders are
caught in the middle and ultimately passengers and shippers will be the
ones who will bear the brunt of any operational disruption caused if
this issue is not resolved.
Inter-agency government progress appears to be at a stalemate,
while stakeholders are doing their part to address these issues.
Aviation stakeholders, the FAA, and AT&T and Verizon have spent much of
the last year trying to understand and implement what is required to
continue safely operating aircraft in a 5G environment. This has
required compromise, understanding, and investment by all parties. AT&T
and Verizon implemented various mitigations, such as taking a phased
approach to maintain lower power levels near airports and tilting
antennas downward and have agreed to continue those mitigations through
July 2023. The aviation industry is taking on the burden of designing
and implementing a fleet retrofit to ensure that RAs are not
compromised and retrofitting the entire fleet in less than two years is
unprecedented.
Unfortunately, due to global supply chain issues, lack of a
certified solution for one key RA, and the FAA only recently
identifying the criteria for RAs that would not need to be changed, RA
manufacturers and air carriers will likely be unable to fully meet
either the December 2022 deadlines for smaller regional aircraft and
many large transports nor the July 2023 retrofit deadline, though we
continue to do everything within our power to do so. Further, all this
investment will be wasted if a long-term mitigation plan is not put in
place and codified in regulation, as additional wireless providers that
have not been part of these interim voluntary efforts begin to provide
services.
Our aviation coalition strongly believes that instead of once again
waiting until the eleventh hour, now is the time for the leadership at
federal agencies and the White House to implement a solution that
allows 5G to move forward and avoid further flight delays and
cancellations. The FAA recently sent a petition to the NTIA and FCC
requesting a codification of reasonable mitigations. While we have not
seen the FAA's official petition to the NTIA and FCC, the FAA has
informed stakeholders that to continue the operational safety of the
NAS, the FCC rules and applicable Report and Order FCC-20-22 should be
modified to address safety issues raised by the FAA. Furthermore, as
the FCC, NTIA and FAA work to codify these requirements, it is critical
to extend these mitigations through the end of 2023 to allow airlines
time to complete the retrofit. We respectfully request that the US
government share with stakeholders and the public the entire content of
the petition by Friday November 18, 2022. The public has a strong
interest in having access to the basis for concerns about aviation
safety.
We will continue to be committed to finding reasonable solutions
that allow implementation of 5G while addressing safety and operational
disruptions in the NAS. Stakeholders cannot do this alone and we need
the federal government to codify mitigations for all airports and
extend the July 2023 and ``Power Up'' retrofit deadlines. The entire
government must work together to ensure future 5G deployment is
unencumbered and our aviation system remains the safest in the world.
Aviation stakeholders call on the Administration to meet with us to
discuss a way forward that will achieve the goal of moving 5G forward,
while ensuring passengers and cargo reach their destinations safely and
on time.
Sincerely,
Aerospace Industries Association.
Aerospace Vehicle Systems Institute.
Air Line Pilots Association, International.
Airborne Public Safety Association.
Airbus.
Aircraft Electronics Association.
Aircraft Owners and Pilots Association.
Airlines for America.
Allied Pilots Association.
Boeing.
Cargo Airline Association.
Collins Aerospace.
Embraer.
Experimental Aircraft Association, Inc.
Garmin.
General Aviation Manufacturers Association.
Helicopter Association International.
International Air Transport Association.
National Air Carrier Association.
National Business Aviation Association.
Regional Air Cargo Carriers Association.
Regional Airline Association.
RTCA.
Thales.
cc: Jessica Rosenworcel, Chairwoman, Federal Communications Commission
Report, ``The Safety Impact of Technology and Crew Size: An analysis of
accident data, incorporation of technology, and train crew staff levels
on rail safety trends,'' B. Dierker, December 2022, Alliance for
Innovation and Infrastructure, Submitted for the Record by Hon. Sam
Graves
The 73-page report is retained in committee files and is available
online at https://www.aii.org/wp-content/uploads/2022/12/The-Safety-
Impact-of-Technology-and-Crew-Size.pdf.
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Chet Thompson, President and CEO, American Fuel & Petrochemical
Manufacturers, Submitted for the Record by Hon. Sam Graves
February 1, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, 2165 Rayburn HOB,
Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, 2164 Rayburn HOB,
Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen,
The United States' integrated network of pipelines, ports,
waterways, roadways, and railroads is critical to supply chains and
hence the nation's economy. Midstream infrastructure delivers oil and
gas from upstream production fields to refineries and petrochemical
manufacturing facilities, and essential products from those facilities
to consumers across the country. Without this critical infrastructure,
energy and chemical supply chains would grind to a halt.
American Fuel & Petrochemical Manufacturers (``AFPM'') is the
leading trade association representing U.S. refiners and petrochemical
manufacturers, whose products make modern life and transportation
possible. We greatly appreciate your committee's attention to important
supply chain issues. While the February 1st hearing will be an
important forum to discuss these issues, it is missing a key voice: the
shipper community.
As one of the largest groups of shippers in the nation,\1\ AFPM
submits this statement for the record sharing our members' perspective
on the current state of the United States supply chain. While AFPM
members utilize all aspects of midstream infrastructure, this statement
focuses on freight rail, as it poses the most significant challenges to
our operations and supply chains. Indeed, reduced rail competition and
the resulting deterioration in service have greatly hindered our
members' ability to move feedstocks to their facilities and products to
consumers.
---------------------------------------------------------------------------
\1\ Our members rely on the rail network to get feedstocks to our
facilities and products to market. Annually in the United States, over
2 million carloads of our members' feedstocks and products, including
crude oil, natural gas liquids, refined products, petrochemicals, and
plastics are transported by rail. See ``Freight Rail Facts and
Figures'' February 2022, see https://www.aar.org/facts-figures
---------------------------------------------------------------------------
A healthy, efficient rail system helps the United States economy
thrive and benefits all parties, including railroads, rail shippers,
and ultimately consumers. Unfortunately, over the past few decades,
through consolidation the number of major United States railroads has
drastically contracted, resulting in decreased rail competition,
degraded rail service, exponential rate increases, and higher prices
for consumers.\2\ The negative impacts of this consolidation have been
exacerbated more recently by widespread adoption of cost-cutting
operating models and myopic focus on short-term profits, which, in
turn, have led railroads to slash their workforce, shelve equipment,
and close railyards across the country.\3\ The result of these measures
has been widespread delays and embargoes and increased costs for
consumers.\4\ \5\
---------------------------------------------------------------------------
\2\ See https://www.afpm.org/newsroom/blog/freight-rail-america-
can-market-be-free-if-theres-almost-no-competition
\3\ Class I railroads cut 45,000 jobs from 2016 to 2021--nearly 30%
of their workforce according to STB data.
\4\ Last spring and summer, two Class I railroads announced
temporary embargos of shipments that impacted the refining and
petrochemical industry. In addition, the use of embargoes related to
general network congestion has exponentially increased with one
railroad increasing embargoes by 2,000% since 2017. See Docket EP 772
https://dcms-external.s3.amazonaws.com/DCMS_External_PROD/
1669134260584/51506.pdf
\5\ Transportation and distribution costs account for between 5-17
percent of the price a consumer pays for a gallon of gasoline or
diesel. See Gasoline and Diesel Fuel Update--U.S. Energy Information
Administration (EIA).
---------------------------------------------------------------------------
The Surface Transportation Board (STB) is the sole federal agency
charged with resolving commercial freight rail issues, including
service, competition, and rates. We applaud STB's recent efforts to
improve rail service and address freight rail challenges. But, with
Congress's help, more can be done.
AFPM supports bipartisan legislation to reauthorize the STB and to
provide it with the resources and authorities it needs to quickly
address rail service issues. More specifically, AFPM encourages
Congress to:
Update the Common Carrier Obligation: As defined in the
Staggers Act, the ``common carrier obligation'' requires that
rail carriers serve the wider shipping public ``on reasonable
request.'' Recent railroads actions (e.g., drastic reduced
service schedules and exponentially increased usage of
embargoes) highlight the need to address what a reasonable
level of service is under the common carrier obligation. Rail
carriers are extremely averse to including even the most basic
service delivery standards in contracts, particularly for
captive rail shippers. Such standards would improve service
reliability and allow manufacturers and refiners to plan
accordingly and avoid facility slowdowns or unexpected outages.
Congress should clarify service obligations and hold railroads
accountable to those standards.
Foster Increased Competition in Freight Rail: AFPM believes in
free market solutions, but the free market does not work when
there is no competition, or even a realistic threat of
competition. Congress can help support STB by allocating it
additional resources to address open rulemaking dockets,
including Reciprocal Switching (Docket EP 711). With well-
designed reciprocal switching provisions in place, railroads
would be faced with a simple decision, provide better service
to rail shippers or risk losing business to a competitor.
Enhance the STB's ability to address critical service issues:
In the past two years, rail service delivery issues have caused
facilities in critical industries to slow or temporarily cease
operations and to seek costly shipping alternatives, all at the
expense of the American consumer. Congress should grant STB
additional emergency authorities to quickly address service
disruptions in critical industries such as refining and
petrochemical manufacturing.
Recognize current state of rail car ownership: Current law
allows railroads to charge shippers fees (demurrage) when
shippers are slow to load or unload rail cars. Rail car
ownership has shifted such that rail customers now own
approximately 75 percent of freight rail cars. Despite this
shift in ownership and maintenance responsibility, rail car
owners do not have the ability to charge fees when the
railroads are slow to deliver or pick up cars. Congress should
recognize that both shippers and railroads have a
responsibility to keep rail cars moving and allow shippers who
own or lease their own rail cars to assess a fee on railroads
when railroads delay moving rail cars efficiently.
Congress passed the Ocean Shipping Reform Act of 2022 to address
the negative impacts of consolidation in the shipping industry and to
alleviate supply chain issues in ocean freight shipping. This
bipartisan action was roundly applauded and is helping United States
consumers and businesses. Port congestion has improved, and ocean
shipping rates have steadily declined since the passage of this act. We
urge Congress to replicate this success with freight rail by adopting
the above recommendations and reauthorizing the STB.
Thank you again for your attention to this critical issue.
Chet Thompson,
President and CEO, American Fuel & Petrochemical Manufacturers.
Letter of February 15, 2023, to Hon. Sam Graves, Chairman, and Hon.
Rick Larsen, Ranking Member, Committee on Transportation and
Infrastructure, from Chris Spear, President and Chief Executive
Officer, American Trucking Associations, Submitted for the Record by
Hon. Sam Graves
February 15, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, United States House of
Representatives, 2164 Rayburn House Office Building,
Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, United States House of
Representatives, 2165 Rayburn House Office Building,
Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
On behalf of the American Trucking Associations (ATA), I would like
to thank you for the opportunity to testify before the House
Transportation and Infrastructure Committee at the hearing titled,
``The State of Transportation Infrastructure and Supply Chain
Challenges.'' During the hearing, Delegate Eleanor Holmes Norton (D-DC)
submitted a letter for the record on behalf of the Advocates for
Highway & Auto Safety (AHAS) that disparages the trucking industry and
casts doubt upon the industry's commitment to highway safety.
Interestingly, although the letter was written by an organization that
claims to prioritize and champion the safety of our nation's roadways,
the letter fails to mention one of the leading causes of highway
fatalities--impaired driving--and instead regurgitates a litany of
misrepresentations about the trucking industry's safety record. In
light of the shortcomings of the letter submitted for the record, and
as a testament to ATA's commitment to achieving zero highway
fatalities, I will correct the inaccuracies in the letter, as well as
provide recommendations for how this Committee can take steps to
protect the safe and efficient movement of our nation's goods.
The Trucking Industry's Investment in Highway Safety
To paint the trucking industry as an industry that is unsafe and
willing to cut corners at all costs is both misleading and patently
false. Safety is, and always will be, the foundation of the trucking
industry, shaping our core values and decision making. We are so
confident in these efforts that ATA is currently undertaking a ``safety
investment study'' with our members to highlight the investments the
industry is making annually. The last version of this study, which was
conducted nearly 7 years ago, found that the industry invests nearly
$9.5 billion annually in safety initiatives, including onboard
technologies such as electronic logging devices, collision avoidance
systems, and brake-activated pulsating warning lamps. Our investments
also included driver safety training, driver safety incentive pay, and
mechanisms to ensure compliance with safety regulations. While
misinformed individuals claim that the trucking industry spends this
money because it is required to do so by law, the simple fact is that
many of these investments go above and beyond the requirements
established in state and federal regulations. These investments also go
towards addressing issues of highway safety that are not necessarily
specific to trucking. Unlike some so-called safety organizations, the
trucking industry does not sit idly by and say, ``It's not our
problem'' and point the finger elsewhere. We choose to work
collaboratively with all stakeholders--whether we agree or not--to
advance our common goal of improving highway safety. This is evidenced
by our recent commitment to the U.S. Department of Transportation's
(USDOT) newly established National Roadway Safety Strategy (NRSS). ATA
was one of 49 ``first movers'' that committed to specific actions to
address highway safety.\1\ These actions will not only focus on
trucking, but on all highway users.
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\1\ https://www.transportation.gov/nrss/allies-in-action.
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Impaired Driving and Need for Improved Testing
It is baffling that the topic of impaired driving was not included
in the AHAS letter. This was especially surprising considering the
organization claims to be dedicated to identifying drug use in the
trucking industry. ATA is happy to fill this glaring information void
and help move the needle on this critical issue because we prioritize
action to advance highway safety.
ATA is troubled by the correlation between marijuana legalization
efforts at the State level and the increase in the number of positive
marijuana tests reported to USDOT's Drug and Alcohol Clearinghouse. The
impacts of marijuana legalization affect all highway users, and I want
to note for the record that ATA has pleaded loudly for better
controlled substance testing methods within our own industry. ATA
strongly supports the use of hair testing as an independent,
alternative drug testing method for commercial motor carriers to meet
federal drug testing requirements. Private industry and governments
worldwide have embraced hair testing due to its efficacy as a critical
safety tool, but the U.S. trucking industry remains limited in its
ability to fully utilize this proven drug testing method because it
does not meet federal requirements. Hair testing is a proven and
effective method for detecting illegal drug use. Federal acceptance of
hair testing as an independent, alternative testing method would allow
employers to use this testing method to identify a greater number of
safety-sensitive employees who violate federal drug testing regulations
and keep these unsafe drivers off the road. Critically, federal
adoption of hair testing would allow motor carriers to report positive
hair test results to USDOT's Drug and Alcohol Clearinghouse. Closing
this glaring loophole will create a safer, drug-free workforce and
prevent drivers with unresolved drug violations from driving alongside
the motoring public. Despite the absence of any meaningful advocacy
from so-called safety groups to address the rise in impaired driving,
ATA remains steadfast in its support of hair testing as a way to curb
this dangerous trend.
Truck Driver Shortage and Younger Professional Drivers
Denying the existence of the driver shortage is absurd. The
trucking industry has been dealing with a pervasive driver shortage for
years, and if conclusive data from the U.S. Bureau of Labor Statistics
(BLS) is not convincing enough, one can simply drive down the highway
and witness the ample evidence in the form of ``CDL Drivers Needed''
signs. The characterization of the shortage as a driver turnover issue
demonstrates an alarming ignorance of the driver labor force. Safe,
drug free drivers can leave a job for any reason at any time and easily
get another driver job because the demand for such qualified drivers is
so high. If a driver wants to go to another motor carrier for better
pay, more time at home, or different routes, he or she can do so
easily. In fact, the vast majority of turnover is churn in the
industry, not drivers leaving the industry. It is the ultimate worker
empowerment.
The AHAS letter that Delegate Holmes Norton submitted for the
hearing record points to an analysis by the BLS that found ``the labor
market for truck drivers works about as well as the labor market for
other blue-collar occupations'' and ``a deeper look [at the truck
industry labor market] does not find evidence of a secular shortage.''
In the spirit of transparency, it is important to note that the
analysis was not conducted by or for the BLS. The BLS Director made a
point to clarify this fact explicitly. Additionally, the analysis has
been debunked on multiple fronts. For example, the authors overlook
barriers to entry that are unique to truck drivers, such as an age
requirement to obtain a commercial driver's license (CDL) and strict
drug testing in the industry. Indeed, this is a labor quality issue
that the authors didn't mention or account for, and they incorrectly
assume all drivers (and would-be drivers) can enter and exit the
industry as they please. We in the industry know that is untrue. Motor
carriers frequently state that they get many applicants for driving
jobs, but due to a host of reasons, like past convictions, driving
records, age requirements, the inability to pass a drug test, and other
issues, they cannot hire the vast majority of applicants.
Furthermore, the authors of the analysis failed to control for
other factors impacting occupational changes, such as time away from
home. This is particularly true in the over-the-road for-hire truckload
segment, which is where the driver shortage is most acute. Most other
blue-collar jobs do not require workers to go on the road for weeks at
a time before returning home. For these and other reasons, the BLS
analysis referenced in the letter should be significantly discounted by
the Committee, or at the very least scrutinized for its obfuscation of
fact.\2\
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\2\ https://www.trucking.org/news-insights/ata-statement-flaws-
bureau-labor-statistics-driver-shortage-article.
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Finally, the driver shortage is not unique to the United States.
According to the International Road Transport Union (IRU) in Geneva,
Switzerland, many countries are similarly challenged by persistent
driver shortages. For example, in September 2022, France had 23,548
unfilled truck driver jobs, and Germany had another 20,113 vacancies.
Both Canada and Mexico have a driver shortage as well.\3\ Furthermore,
industry and governments in Europe are looking to lower the driver age
requirement to help alleviate the shortage.\4\
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\3\ https://www.iru.org/news-resources/newsroom/global-driver-
shortages-2022-year-review.
\4\ https://www.iru.org/news-resources/newsroom/tackle-driver-
shortages-eu-must-remove-age-barrier-bus-drivers.
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Members of this Committee frequently ask what can be done to
address the driver shortage in the U.S. While there is no silver bullet
solution to address this multifaceted problem, ATA believes that
allowing younger, qualified individuals to operate a CMV in interstate
commerce is the best and most consequential action that Congress can
take right now. Accordingly, ATA continues to pursue legislative and
regulatory efforts to allow well-trained drivers under the age of 21 to
operate a CMV in interstate commerce. While anti-truck groups continue
to mischaracterize ``teen truckers'' as a threat to highway safety, the
flippant mischaracterization of younger driver belies the facts: 18,
19, and 20 year olds with requisite skills and credentials are already
allowed to drive commercial trucks and buses within state lines in 49
states and the District of Columbia. As part of President Biden's
historic Infrastructure Investment and Jobs Act (IIJA), the USDOT
established the Safe Driver Apprenticeship Pilot Program which will
allow an individual between the ages of 18 and 21 to operate a CMV in
interstate commerce under strict training benchmarks and performance
requirements.\5\ One submission to the hearing record refers to this
program as ``basically a science experiment,'' but yet again, the
snarky rhetoric ignores the simple fact that 18-, 19-, and 20-year-olds
can already operate a CMV on our roadways today.
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\5\ https://www.federalregister.gov/documents/2022/01/14/2022-
00733/safe-driver-apprenticeship-pilot-program-to-allow-persons-ages-
18-19-and-20-to-operate-commercial.
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Perhaps the most provocative and baseless claim argued in the AHAS
letter and parroted by so-called safety organizations is the purported
fatal accident involvement rates of CMV drivers under 19 and CMV
drivers aged 19 and 20. These claims appear to have been cherry-picked
from a single, non-governmental study \6\ published 32 years ago in
1991. Curiously, the author of the study provided a caveat to his
findings, warning that his estimates of accident rates were informed by
dividing accident data from 1980-1984 (which was obtained, in part, by
a telephone survey) by an admittedly incomplete, non-matching batch of
travel statistics from 1986 (which was itself of insufficient sample
size and also obtained via a survey).
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\6\ Campbell, Kenneth L. The University of Michigan, Transportation
Research Institute, Fatal Accident Involvement Rates By Driver Age For
Large Trucks, September 1991, https://deepblue.lib.umich.edu/bitstream/
handle/2027.42/29197/0000251.pdf?sequence=1&isAllowed=y.
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The Safe Driver Apprenticeship Pilot Program is not about turning
over the keys of the truck to any ``teen driver.'' Rather, it's about
providing qualified men and women with demonstrated aptitude the
opportunity to master interstate CMV driving through a rigorous
apprenticeship program. The apprenticeship program would require
apprentices to complete a minimum of 400 hours of training under the
supervision of an experienced professional driver and achieve 11
performance benchmarks--all on trucks equipped with state-of-the-art,
National Transportation Safety Board-recommended vehicle safety
technologies.
Truck Size and Weight
The AHAS letter promotes misinformation about proposals to increase
the size and weight of commercial vehicles. We often hear claims that
introducing double 33-foot trailer trucks, known as ``Twin 33s,'' would
require an estimated one-time cost of $1.1 billion to strengthen and/or
replace 2,478 bridges. These figures should be approached with
skepticism because USDOT itself acknowledged severe data limitations
that prevented it from conducting a more robust analysis. One such
deficiency is USDOT's analysis of the impact of twin 33s on pavement
and bridges. USDOT's conclusions stem from an erroneous assumption that
the companies that operate twin trailer trucks (i.e. less-than-
truckload carriers) also have extensive single-trailer truck
operations, and that nearly all of their single-trailer shipments would
shift to twin 33, trailers. We estimate that USDOT overstated these
carriers' single trailer miles by approximately 1,400%. Additionally,
we estimate that total miles traveled by less-than-truckload (LTL)
carriers are overstated by nearly 400%. These errors inaccurately
increased total gross weight for LTL traffic, which resulted in
inaccurate estimates for additional bridge costs.
Likewise, the safety impacts of larger trucks continue to be
misconstrued and overinflated. While some contend that double trailer
trucks have an 11 percent higher fatal crash rate than single trailer
trucks and point to a USDOT study to support their claim, the reality
is that the USDOT study actually found that multi-trailer trucks had a
three percent lower crash rate than single trailer trucks. The only way
that USDOT could reasonably produce a theoretical assumption that
multi-trailer crash rates might be higher than single-trailer rates is
by assuming that multi-trailer trucks would operate more frequently on
lower-order roads than they actually do. Similarly, claims that
overweight trucks pose a heightened safety risk are simply false. The
favored argument against heavier trucks is that legally overweight
trucks have longer stopping distances and are therefore more likely to
be involved in a crash. This is only true if the weight exceeds the
vehicle manufacturer's rating. Adding axles or upgrading brakes would
mitigate this concern and prevent heavier trucks from exceeding federal
stopping distance standards. There is no reason to believe that a
legally overweight truck has more overweight violations than standard
trucks. If legally overweight trucks are so unsafe, why do 41 States
allow maximum gross vehicle weights exceeding 86,000 pounds? Finally,
drivers of longer trucks are required by law to undergo supplemental
training and obtain license endorsements to ensure that these vehicles
are operated responsibly and safely. There is no evidence to suggest
that longer vehicles have a higher crash rate than more common trucks.
Automated Vehicle Deployment
The AHAS letter fails to adequately acknowledge that highly
automated vehicles have the opportunity to increase highway safety. The
USDOT has been reviewing their regulations to better understand and
identify barriers to the safe deployment of automated vehicles. The
Department's efforts have focused on where regulatory language assumes
a human driver might be present. The DOT's focus is to broaden language
so that a highly automated commercial motor vehicle (CMV) without a
driver could be operated within the same set of requirements as human
driven CMV. Additionally, FMCSA has released a Supplemental Advanced
Notice of Proposed Rulemaking (SANPRM) entitled: Safe Integration of
Automated Driving Systems (ADS)-Equipped Commercial Motor Vehicles
(CMVs).\7\ This SANPRM looks to gather information from industry on
what additional considerations need to be made for a highly automated
CMV in order to operate them safely on the nation's roadways. In short,
the DOT is taking a prudent approach to both adapting existing
regulations and exploring additional considerations to ensure highly
automated CMVs are held to an equal or higher standard as human-driven
CMVs.
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\7\ https://www.federalregister.gov/documents/2023/02/01/2023-
02073/safe-integration-of-automated-driving-systems-ads-equipped-
commercial-motor-vehicles-cmvs.
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While deployment is still in early stages, the DOT has already
taken steps to monitor the complex landscape of commercial automated
vehicles. The Standing General Order (SGO) issued by the National
Highway Traffic Safety Administration (NHTSA) has given the DOT broad
visibility into on-road incidents and a foundation for more focused
efforts in the future. The DOT is also exploring the broader impacts of
automation deployment and how ensure system-level safety of other road
users sharing the road with automation. These are challenging topics
that will require a collaborative approach with industry. Developers of
highly automated CMV have consistently been working with industry, law
enforcement, and the DOT to develop standards and best practices that
would facilitate safe operation through inspection, wireless vehicle
communication, visual signaling, and many other topics. The DOT and
industry will continue to learn as technology matures and deployments
expand, but the DOT's collaborative approach will ensure that highly
automated CMV are operating in a safe manner.
Hours of Service and Fatigue
Contrary to insinuations in the AHAS letter, ATA is unwavering in
its support of the use of Electronic Logging Devices (ELDs) and
recognizes them as an effective tool in combatting driver fatigue. ATA
members have long used ELDs, with many carriers installing this
critical safety technology long before the Congressional mandate went
into effect in December 2017. Accordingly, we whole-heartedly support
the industry-wide adoption of ELDs and oppose efforts to further exempt
their use.
While ELDs play a critical role in ensuring the accuracy of a
driver's Hours of Service (HOS), we continue to see debate about the
merits of the underlying HOS rules. ATA supported FMCSA's proposal to
add flexibilities to the HOS rules in 2018, and we supported FMCAS's
final rulemaking in June of 2020.\8\ This final rule did not increase
the time a driver could drive or be on duty, yet opposition groups
immediately filed petitions for reconsideration to the rulemaking,
which were ultimately denied by the Agency.\9\ Despite this outcome,
the same groups then proceeded to file a lawsuit against the Agency,
claiming the final rule was ``arbitrary and capricious for failing to
grapple with the safety and driver health consequences of changes to
recordkeeping rules for short-haul commercial vehicle drivers and break
requirements for long-haul drivers.'' Despite their recycled claims,
the United States Court of Appeals denied the petition, stating ``the
modification to the hours-of-service rules were sufficiently explained
and grounded in the administrative record.'' \10\
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\8\ https://www.federalregister.gov/documents/2020/06/01/2020-
11469/hours-of-service-of-drivers.
\9\ https://www.regulations.gov/document/FMCSA-2018-0248-8268.
\10\ https://www.documentcloud.org/documents/22125483-advocates-
for-highway-and-auto-safety-et-al-vs-fmcsa-
appeal?responsive=1&title=1&onlyshoworg=1.
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ATA appreciates the opportunity to address and correct the
inaccuracies and misrepresentations included in the AHAS letter that
was submitted for the hearing record. Moreover, we appreciate the
efforts of Members of this Committee to advance highway safety. ATA and
the trucking industry remain unwavering in our commitment to improving
the safety of our nation's roads and bridges, and working towards the
ultimate goal of zero highway fatalities We look forward to our
continued work with your Committee, Congress, and the Administration.
Thank you for your leadership on these critical issues.
Sincerely,
Chris Spear,
President and CEO, American Trucking Associations.
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Kristen Swearingen, Vice President, Legislative and Political
Affairs, Associated Builders and Contractors, Submitted for the Record
by Hon. Sam Graves
February 1, 2023.
The Honorable Sam Graves,
Chairman,
U.S. House Committee on Transportation and Infrastructure.
The Honorable Rick Larsen,
Ranking Member,
U.S. House Committee on Transportation and Infrastructure.
Dear Chairman Graves and Ranking Member Larsen:
On behalf of Associated Builders and Contractors, a national
construction industry trade association with 68 chapters representing
more than 22,000 members, I write to comment on the U.S. House
Committee on Transportation and Infrastructure's hearing titled ``The
State of Transportation Infrastructure and Supply Chain Challenges.''
ABC urges the committee to deliver relief for construction
businesses faced with complex supply chain and labor market challenges,
and ensure that the more than 88% of America's construction workers who
choose not to belong to a labor union are provided the opportunity to
participate in critical construction projects funded and authorized by
the federal government.
Snapshot of the Construction Industry Supply Chain & Input Prices:
According to ABC analysis of U.S. Bureau of Labor Statistics'
Producer Price Index data, while construction input prices fell 2.7% in
December 2022 compared to the previous month, overall construction
input prices are 7.9% higher than a year ago and have increased by
36.1% since February 2020.
Construction has seen welcome declines in virtually all non-energy
related construction input commodities, with crude petroleum prices
falling sharply by 14.9%. However, with natural gas prices surging
45.3% in December and more than 315% since February 2020, costs are
still high across the board for contractors.
Producer Price Index, December 2022
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
Source: U.S. Bureau of Labor Statistics
Contractors are also currently maintaining their longest backlog
since 2019. According to ABC's Construction Backlog Indicator, backlog
remains high thanks in part to an increase in infrastructure work--
jumping from 6.7 months to 10.0 months. However, it is clear that small
construction businesses continue to not only have the lowest average
backlog (7.9 months), but that their amount of work contracted to
perform but have not yet completed has fallen while the expected work
grew for all of the other larger categories.
Contractors enter the new year hopeful, and remain focused on
growth, with expectations for rising sales and staffing levels over the
next half year. ABC's Construction Confidence Index's reading for
expected profit margins and sales increased in December, while the
reading for staffing levels moved lower. All three readings remain
above the threshold of 50, indicating expectations of growth over the
next six months.
However, evidence suggests that financing commercial real estate
projects faces growing difficulty, due in part to predictions of a
looming recession. The general increase in the cost of capital has also
jeopardized many projects, with certain contractors noticing an
increase in postponements.
For Congress, this uncertain moment is an opportunity to ensure
that our nation's contractors and construction workers are not
contending with overly burdensome regulations s along with rising
material costs, skilled labor shortages and supply chain disruptions.
Snapshot of the Construction Industry Labor Market:
Construction is poised to power America's recovery and economic
engine, as the industry offers competitive wages and many opportunities
to both begin and advance. However, despite adding 28,000 jobs on net
in December, according to ABC's analysis of data released by the U.S.
Bureau of Labor Statistics, severe labor market conditions persist.
On a year-over-year basis, industry employment has risen by 231,000
jobs or 3.1%. Nonresidential construction employment increased by
17,900 positions on net, with growth in all three subcategories.
Nonresidential specialty trade contractors added 10,200 net new jobs,
while nonresidential building and heavy and civil engineering added
5,800 and 1,900 jobs, respectively. However, the construction
unemployment rate rose to 4.4% in December while unemployment across
all industries declined from 3.6% in November to 3.5% last month.
To help meet the demand for a skilled construction workforce, ABC
member contractors use flexible, competency-based and market-driven
education methodologies to build a construction workforce that is safe,
skilled and productive. This all-of-the-above approach to workforce
development has produced a network of ABC chapters and affiliates
across the country that offer more than 800 apprenticeship, craft,
safety and management education programs--including more than 300
government-registered apprenticeship programs across 20 different
occupations--to develop the people who build America.
In the coming years, the federal government will pump hundreds of
billions in new spending into our nation's most critical
infrastructure, However, ABC remains concerned with provisions in
recent legislation and regulations from the Biden administration that
will take away worker freedom, making it harder to fill potential jobs
and fully take advantage of much-needed investments in critical
infrastructure across the country. ABC urges the committee to consider
ways in which they can promote an all-of-the-above workforce
development strategy--and not limit the benefits of federal legislation
from reaching the vast majority of construction workers due to their
labor affiliation.
Project Labor Agreements
ABC vehemently opposes several discriminatory policies the Biden
administration is pursuing through executive orders, the regulatory
process and the implementation of recently passed legislation, which
will prevent many opportunities for the entire construction industry,
particularly small businesses, to participate in infrastructure
projects funded by this legislation.
Among these key concerns are President Biden's Executive Order
14063 and proposed rule implementing government-mandated project labor
agreements on federal construction contracts of $35 million or more,
which will effectively prevent the vast majority of contractors from
having a fair chance at competing on federal construction contracts.
ABC estimates this proposal, once finalized, could affect 120 federal
contracts valued at $10 billion annually, which is roughly 40% of the
value of federal construction put in place in 2021.
PLA mandates discourage the 88.3% of the private construction
workforce that have already made the choice not to belong to a union
and experienced nonunion contractors from competing to win taxpayer-
funded contracts to rebuild their communities. By mandating PLAs, this
EO will significantly exacerbate the ongoing construction workforce
shortage, limit potential infrastructure investment by raising costs by
12 to 20% per project and discriminate against nearly the nearly nine
out of 10 construction workers who choose not to join a union.
For the rare nonunion construction workers permitted to work on a
PLA project, provisions in PLAs result in the confiscation of 34% of a
nonunion construction worker's compensation package unless they join a
union and become vested in union plans.
ABC members are also concerned with language contained in federal
agency grant opportunities that encourages state and local government
grant applicants, to support PLA requirements in their application for
federal grant funds. ABC has identified almost $100 billion in federal
grant programs that include the promotion of PLA mandates or union-only
preference language in federal agency grant applications. This PLA
``encouragement'' language could have a chilling effect on otherwise
qualified contractors bidding on projects in their communities,
limiting competition and increasing costs.
ABC believes that taxpayer-funded construction contracts should be
awarded through fair and open competition--guaranteeing the best value
for hardworking taxpayers while prohibiting a rigged federal
procurement process that discriminates against many small construction
businesses. This is critically important as federal agencies begin to
implement hundreds of billions in federal dollars for infrastructure
construction projects authorized through the IIJA and ARP, which
notably did not have any mention of PLAs, let alone mandate them on
federal projects.
Further, ABC urges members of the committee to support the Fair and
Open Competition Act, which would prevent federal agencies and
recipients of federal assistance from requiring contractors to sign
controversial project labor agreements as a condition of winning a
federal or federally assisted construction contract. This bill would
ensure that taxpayer-funded construction contracts are awarded through
fair and open competition--guaranteeing the best value for hardworking
taxpayers while prohibiting a rigged federal procurement process.
Buy America Requirements
On Nov. 10, the U.S. Department of Transportation announced the
expiration of a general waiver to Buy America requirements imposed by
the IIJA. With this expiration, the IIJA's expanded Buy America
requirements are now in effect for most federally funded infrastructure
projects. The DOT proposed two narrower waivers that will exempt a
limited number of projects from these requirements.
While ABC supports strategies to expand domestic jobs and
manufacturing to avoid global supply chain disruptions and capture
economic benefits within America, Buy America policies need to be
balanced with safeguards against increased costs and/or delays of
infrastructure projects funded by the federal government and ultimately
taxpayers. ABC commented on the proposed waivers and urges the
committee to ensure that the DOT carefully consider our recommendations
to ensure Buy America requirements can be implemented with minimal
disruptions to these critical infrastructure projects.
Federal Contractor Greenhouse Gas Disclosure & Reduction Requirements
On Nov. 14, the Federal Acquisition Regulatory Council issued a
proposed rule to amend the Federal Acquisition Regulation to require
certain federal contractors to disclose their greenhouse gas emissions
and set GHG emission reduction targets. Under the proposed rule,
federal contractors who qualify as significant contractors, (those
receiving between $7.5 million and $50 million in federal contracting
obligations in the prior fiscal year) would be required to inventory
their annual GHG emissions and disclose this information to the federal
government.
ABC understands the need for assessment of greenhouse gas emissions
by federal contractors but has concerns that the proposed rule will
unnecessarily increase costs for federal contractors by imposing
substantial new regulatory burdens. Requiring major contractors to set
GHG reduction targets or forfeit the ability to win federal contracts
is a significant and concerning expansion of executive power not
authorized by Congress and may be subject to legal challenge, further
creating additional risk and uncertainty for construction federal
contractors and government stakeholders. Small business federal
contractors will be especially harmed by the uncertainty and increased
costs these requirements would impose, leading to decreased small
business participation in federal contracting, which has already seen a
60% decline in the number of construction industry small businesses
awarded a federal contract from 2010 to 2020.
Conclusion:
ABC encourages the committee to promote inclusive, win-win policies
that welcome all of America's construction industry to compete to
rebuild our nation's crumbling infrastructure, increase accountability
and competition and reduce waste and favoritism in the procurement of
public works projects to better ensure the stewardship of taxpayer
dollars.
Ultimately, in order to successfully implement this investment of
taxpayer funds into high-quality infrastructure at the best price
possible for Americans, Congress must ensure the door is open to all
qualified contractors, including those composing more than 8.6 million
workers (88.3% of the industry), and provide them with a fair chance at
competing on government funded projects.
ABC and our members are committed to building taxpayer-funded
projects with the highest standards of safety and quality. ABC members
stand ready for the opportunity to build and maintain America's
infrastructure to the benefit of the communities it serves. ABC
appreciates the opportunity to comment on the committee's important
work to improve our nation's infrastructure.
Sincerely,
Kristen Swearingen,
Vice President, Legislative and Political Affairs,
Associated Builders and Contractors.
Statement of the Association of Equipment Manufacturers, Submitted for
the Record by Hon. Sam Graves
The Association of Equipment Manufacturers appreciates the
opportunity to submit this statement for the record as the U.S. House
Committee on Transportation and Infrastructure examines supply chain
challenges and the state of U.S. transportation infrastructure.
The Association of Equipment Manufacturers (AEM) represents more
than 1,000-member companies manufacturing equipment and providing
services for the agriculture, construction, utility, mining, and
forestry sectors worldwide. Our industry supports approximately 2.8
million jobs across all 50 states, represents 12 percent of the
manufacturing sector in America, and contributes $288 billion a year to
the U.S. economy.
Safe and reliable infrastructure is dependent on equipment
manufacturers to connect our nation. While the average person may not
notice the construction crane in use to repair a bridge, or the paver
in use to repair or expand a highway, they also may not realize what
that equipment means to the efficient completion of a new road or
upgrades to public transit systems.
Over the last decade, demand for heavy equipment has increased.
However, the challenges confronting our national supply chains have
already severely impacted the equipment manufacturing industry's
ability to respond to this increase in demand for product. Average lead
times for road construction equipment are projected to increase from
6.4 months in 2022 to 7.6 months in 2023. Similarly, average lead times
for aggregate equipment such as crushers are expected to increase to
6.3 months in 2023, up from 5.6 months in 2022. This is especially
critical given that many equipment manufacturers are already fully sold
out for 2023. The current supply chain situation could mean that a
contractor in need of a new excavator might not be able to bid on a new
IIJA-supported project.
The COVID-19 pandemic highlighted numerous issues with global
supply chains and logistics. The equipment manufacturing industry had
to adapt and find a way to move forward. Manufacturers improved
communication lines with suppliers, increased safety stock, and
expanded their supplier base. This proactive approach helped some
alleviate supply chain constraints, but the industry still faces
challenges in the acquisition of specialized parts and components.
Each piece of equipment utilizes thousands of specialized parts and
components unique to the functionality of the equipment. Often, there
are limited suppliers of specialized parts, forcing U.S. manufacturers
and their global competitors to source their inputs from the same
suppliers in the international marketplace. In a recent AEM survey of
179 equipment manufacturing companies, nearly all respondents (98
percent) continue to face supply chain issues with more than half of
respondents (58 percent) experiencing continuously worsening supply
chain conditions. Year to date, equipment manufacturers are seeing an
average of 12 percent production loss, and are forecasting a slightly
lower, but still significant production loss of 8.2 percent in 2023.
Thank you again for the opportunity to express the views of the
U.S. equipment manufacturing industry on the state of transportation
infrastructure and supply chain challenges. The effort to upgrade and
modernize our infrastructure is just beginning. The 2.8 million men and
women of the equipment manufacturing industry are ready to get to work
and ensure that this investment ushers in a new era of economic
prosperity for all Americans. We look forward to working with all
members of the Committee to advance policies and agreements that
strengthen American manufacturing and secure our nation's long-term
prosperity.
Letter of February 8, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Jeff Farrah, Executive Director, Autonomous Vehicle Industry
Association, Submitted for the Record by Hon. Sam Graves
February 8, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20510.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20510.
Dear Chairman Graves and Ranking Member Larsen,
The Autonomous Vehicle Industry Association (``AVIA'') writes to
thank you for holding the recent hearing on The State of Transportation
Infrastructure and Supply Chain Challenges. AVIA looks forward to
working with you to increase long term supply chain resiliency by
encouraging the safe and swift deployment of autonomous vehicles (AVs)
in the United States.
By way of background, AVIA is comprised of companies with technical
expertise and experience in the technology, automobile, trucking and
transportation network sectors. Bringing together their varied
backgrounds, these companies formed AVIA to advance the tremendous
safety, mobility and economic benefits of AVs to consumers in the
safest and swiftest manner possible. Our members include Aurora,
Cavnue, Cruise, Embark, Ford, Gatik, Kodiak, Lyft, May Mobility,
Motional, Navya, Nuro, TuSimple, Uber, Volkswagen Group of America,
Volvo Cars, Waabi, Waymo and Zoox.
Currently, companies, ports, and policymakers are working to
accelerate short-term solutions to improve the supply chain. Few
proposed solutions have addressed a significant supply chain
challenge--the long-term truck driver shortage. The American Trucking
Associations estimated in 2021 that the country is short 80,000
drivers. Without innovative solutions, this shortage is expected to
double to 160,000 by 2030. The industry also faces extremely high
turnover rates. For both new entrants and those considering retirement,
the burden of long and stressful hours drivers spent away from their
families outweighs the allure of a decent-paying long-haul job. Truck
drivers face higher-than-average rates of smoking, high blood pressure,
and diabetes.
Autonomous trucks can help make up the driver shortfall and serve
as partners with drivers in the trucking ecosystem by backfilling the
need for long-haul drivers while fostering short-haul jobs that
alleviate the heavy physical and mental toll of long-haul driving.
Autonomous trucks are not restricted to a human driver schedule, do not
need to stop, and can unlock new agricultural markets by reducing
spoilage. Policymakers should understand that truck drivers and
autonomous trucks can co-exist together, while supporting the entire
supply chain and U.S. economy.
Autonomous trucking has also already created thousands of high-
paying jobs--vehicle operators, maintenance workers, technicians,
engineers and more--and the sector's growth will require more new
hires. The successful partnership of human-driven and autonomous trucks
was confirmed by a study from the U.S. Department of Transportation
projecting that autonomous long-haul trucks will create up to 35,100
jobs per year across the economy, raise wages for all American workers
and spur $111 billion in investment across the nation's economy.
Truck drivers are working hard, but the shortage is simply
unsustainable. Already frustrated with rising prices and product
shortages, U.S. consumers cannot afford to rely solely on stopgap,
short-term measures to reinforce our supply chain in the long term. The
U.S. needs to move forward on autonomous trucks so goods can keep
moving.
Sincerely,
Jeff Farrah,
Executive Director, Autonomous Vehicle Industry Association.
Statement of the Corn Refiners Association, Submitted for the Record by
Hon. Sam Graves
The Corn Refiners Association (CRA) appreciates the opportunity to
provide the following statement for the record to the House Committee
on Transportation and Infrastructure for its hearing examining
transportation infrastructure and supply chain challenges.
CRA is the national trade association representing the corn
refining industry of the United States. Corn refiners produce essential
inputs for the American economy, including food, feed, pharmaceuticals,
medical devices, personal care products, and a wide assortment of
industrials ranging from construction adhesives to compostable
plastics. Corn refiners produce hundreds of products with thousands of
uses. CRA members process approximately 13% of the United States' corn
supply, resulting in $9.33 billion in value-added revenue. This
accounts for 7,200 jobs and impacts an additional 160,000 jobs, with an
annual economic impact of $47.5 billion. Corn refining is today's
leading example of value-added agriculture.
To serve this essential role in our food system and consumer
products economy, CRA members depend heavily on an efficient, reliable,
and affordable rail transportation network to transport product.
Agricultural products contribute nearly 7.4%, or $6.3
billion, of total rail revenue, with an additional 13%, or $11 billion,
from the transportation of food and wood products.
Railroads originate 24% of U.S. grain shipments.
Corn accounted for 691,000 carloads in 2020--
approximately half of all grain carloads.
Rail also dominates transport of corn gluten meal and
corn gluten feed, essential animal feed products produced by corn
refiners. 70-90% of CGM and CGF are transported by rail.
While railroad revenue and profits have been strong in recent
years, rail service has deteriorated to such a degree that our industry
is struggling to play its essential role in the food and agriculture
system. The following is a summary of some of the impacts rail service
failures had on our industry in 2022, and that continue into 2023:
One corn refiner lost at least $10 million in revenue due
to delays.
One CRA member endured losses of over $11 million in lost
bushels and grind over 2022 because they were unable to ship their
products.
On multiple occasions, corn refining plants were forced
to temporarily cease operation because there were simply no cars
available to deliver inputs or ship finished product. Our plants are
complex industrial facilities intended to run 24 hours a day, 361 days
a year, so these shutdowns and startups came at significant cost.
Likewise, our members' customers had to shut down or slow
down temporarily to accommodate the missing inputs.
In other cases, our members had to buy product from one
of their competitors to make up the difference.
Because cycle times were up on average five days, members
increased their leased car position by an additional 500 cars at a cost
of at least $6 million over 2022.
CRA also wishes to highlight the following concerns:
Issues with switching in the first mile/last mile leaves
inputs and finished product stranded at serving yards, often for days
at a time.
In an effort to fill gaps in rail service, members have
used trucks where possible, but at substantial additional costs and
strain on a fractured trucking market.
Precision scheduled railroading (PSR), far from its
intended result of increasing efficiency, has created total
communication breakdowns. Facilities are not told when the daily switch
will not happen as planned until a customer calls to report that a car
did not arrive. There are often no responses from railroads to these
delays.
Actual and threatened embargoes at customer destinations
routinely hinder shipping cars.
Alongside other shipper associations, CRA has participated in
hearings and ex parte meetings before the Surface Transportation Board
on proceedings that addressed some of the above. Regulatory relief on
issues such as reciprocal switching are a key part of the long-term
solution to increase competition and efficiency.
However, much more urgent action is needed.
Railroads must be held publicly accountable for fulfilling their
duty to provide reliable service. Currently, railroads accept very
little accountability for the repeated adverse consequences of their
business decisions on customers. Absent such accountability, there is
greater incentive for railroads to be responsive to Wall Street than to
their customers and the overall public interest that is part of their
common carrier obligation.
Further, Congress should consider what other tools it has at its
disposal to increase competition, combat unfair business practices in
the rail industry, and increase accountability for service failures.
Specifically, we recommend Congress clarify the common carrier
obligations, which require railroads to provide service ``upon
reasonable request.'' A better definition of the common carrier
obligations would provide clarity on the extent of STB's authority to
conduct oversight of the market.
CRA appreciates this opportunity to comment on these urgent issues.
Statement of Joanne F. Casey, President and CEO, Intermodal Association
of North America, Submitted for the Record by Hon. Sam Graves
On behalf of the Intermodal Association of North America (IANA),
thank you Chair Graves, Ranking Member Larsen, and Committee Members
for convening this hearing to discuss our nation's critical supply
chains. IANA applauds your leadership on this important issue and
appreciates the opportunity to share our views. As you begin your work
in the 118th Congress, IANA would be pleased to serve as a resource and
looks forward to working with you toward our shared goal of enhancing
intermodal supply chain fluidity, efficiency, and safety.
As the only transportation trade association that represents the
combined interests of intermodal freight providers and customers, IANA
represents more than 1,000 corporate members, including railroads,
ocean carriers, ports, intermodal truckers and over-the-road highway
carriers, intermodal marketing and logistic companies, and suppliers to
the industry. IANA's associate (non-voting) members include shippers
(defined as the beneficial owners of the freight to be shipped),
academic institutions, government entities, and non-profit trade
associations.
IANA is pleased to offer the industry various technology tools and
resources through its Information Services. These programs, which are
designed to facilitate business processes and enable transactions,
focus on information needs in the areas of environmental initiatives,
risk management, safety, and security. Regulatory compliance and
registration tools include the Driver Vehicle Inspection Reporting
Service, the Global Intermodal Equipment Registry, and the Uniform
Intermodal Interchange and Facilities Access Agreement. IANA also
collects and maintains a range of data on the performance of the North
American intermodal freight network. These databases provide critical
tools for the effective management of business assets across the
intermodal supply chain.
Intermodal freight transportation is the movement of cargo in
shipping containers or trailers by more than one mode of transport--
ship, rail, and/or truck. Globally, 95 percent of all manufactured
goods are transported in a container at one point in their journey,
generating over $51 billion in intermodal revenues annually in the
North American market.
Unlike single transportation modes, global and domestic intermodal
freight supply chains are comprised of separate entities that work in
concert to complete each intermodal movement. Together, third-party
logistics providers, trucking companies, railroads, ports, and
steamship lines provide a cost-effective, reliable, safe, and
environmentally favorable way to move freight from origin to
destination. Each link is a vital component of the overall intermodal
supply chain and must operate seamlessly and efficiently to uphold
systemwide performance and productivity levels.
The COVID-19 pandemic spurred rapid and unprecedented demand for
freight services and supply chain capacity, demonstrating the critical
importance of intermodal supply chains to transport and distribute
essential goods. When much of the nation was asked to stay home, the
intermodal industry continued working to deliver desperately needed
medical supplies and equipment, food, as well as everyday items
previously taken for granted. Despite labor and capacity shortages,
intermodal supply chains remained flexible and quickly adapted to
accommodate shifting consumer patterns and demands.
IANA has supported the Biden-Harris Administration's ongoing work
to address supply chain disruptions and develop holistic, systemwide,
and industry-based solutions to advance our national goods movement
network. Among other efforts, IANA has engaged with and served as a
resource to the White House Supply Chain Disruption Task Force and the
White House Port Envoy, the Federal Maritime Commission, and the U.S.
Department of Transportation (USDOT).
IANA commends this Committee for its contributions to and enactment
of the 2021 Bipartisan Infrastructure Law (BIL). In addition to the
significant increase in funding available to freight infrastructure
needs, we strongly support the BIL's establishment of the Office of
Multimodal Freight Infrastructure and Policy within USDOT. Given the
unique nature of intermodal transportation, a dedicated Freight Office
stands to improve federal coordination and strategically address the
diverse operational and economic needs of our interconnected intermodal
freight system. It is IANA's hope that this newly formed office will
serve an essential role in overseeing national freight system
investments, guiding multimodal freight policy and planning,
facilitating information sharing, and maximizing BIL resources. IANA
and its diverse membership of supply chain participants are eager to
work with the Freight Office and serve as industry partners.
Recognizing the broad array of issues the Committee on
Transportation and Infrastructure is tasked with examining, IANA looks
forward to working with the Committee on issues related to the long-
term health of the United States supply chain. In particular, IANA's
membership is eager to address:
Supply Chain Data Collection & Standardization: The
supply chain is a complex network of systems, each with unique
stakeholders, standards, and requirements. Pandemic-related shipping
challenges highlighted the supply chain's complexity and opaqueness,
spurring discussion about the appropriate level of data sharing and
standardization. Solutions must strike a delicate balance. While some
level of data sharing and standardization is likely necessary to
increase supply chain efficiency and visibility, viable solutions must
recognize that 1) many supply chain stakeholders operate and/or are
headquartered internationally, meaning consideration should be given to
global solutions and the most appropriate facilitator(s); 2) some data
is proprietary and serves as a competitive edge to private companies;
3) data must be sanitized such that its dissemination does not cause
safety or security concerns; and 4) the process for collecting and
disseminating such data must not be overly burdensome.
Project Permitting: Although the BIL provided for some
changes to the permitting process, IANA continues to advocate for the
need to address inefficiencies and delays in the federal project
approval process while upholding environmental protections. Existing
permitting regulations can cause significant delays and associated cost
increases in the construction of transportation projects, which hinder
improvements that improve system fluidity. Reforms are needed to
increase transparency and predictability by streamlining reviews and
facilitating more effective coordination between federal agencies,
particularly for large, intermodal projects that traditionally require
the approval of multiple agencies or USDOT modal administrations.
Intermodal Infrastructure Funding: Freight infrastructure
investment contributes to economic growth and global competitiveness as
well as job creation and improved quality of life. IANA strongly
supports the funding increases provided by the BIL for various new and
existing grant and formula programs with intermodal freight project
eligibility. We recommend the Committee continue to support programs
that not only address funding for and improvements to the nation's
roadway, rail and bridge infrastructure system, but also allow for
significant investment in non-highway intermodal projects as well as
intermodal connectors, which are the links that facilitate the transfer
of freight between modes. Currently, non-highway/ intermodal freight
projects are eligible for a maximum of 30 percent of available funding
annually under the Infrastructure for Rebuilding America (INFRA) grant
program and National Highway Freight (freight formula) Program. Such a
cap limits the ability to fund critical intermodal projects at the
levels that are needed.
Truck Driver Shortage: According to data produced in 2022
by the American Trucking Associations (ATA), the trucking industry is
shy nearly 80,000 drivers relative to demand. The number is expected to
rise as more drivers retire from the field and recruitment and
retention fall short. Presently, drivers must be at least 21 years old
to operate a commercial motor vehicle (CMV) in interstate commerce.
This age barrier serves as a deterrent for 18- to 21-year-olds who are
interested in entering the workforce. Frequently these individuals
undergo training and apprenticeship in other fields before their age
qualifies them to operate a CMV in interstate commerce. IANA supports
federal efforts that would allow for drivers between the ages of 18 and
21 to enter the interstate workforce, while maintaining safety
objectives.
Worker Classification: Motor carriers are crucial
participants in the nation's intermodal network, particularly under the
current conditions of workforce shortages, as evidenced in the previous
comment re: driver issues. For over 35 years, the prevailing business
model for motor carriers supporting intermodal freight movements by
water and rail has involved the use of independent contractors as
drivers. With an estimated 80 percent of intermodal truck drivers
classified as independent contractors--many of which are small,
minority-owned businesses--this business model is indispensable to the
intermodal transportation and drayage industry. By offering operational
and financial flexibility to intermodal motor carriers, this model
allows drivers to adapt and respond to natural volatility in the
intermodal transportation market. Each owner-operator makes a conscious
decision to remain an independent contractor, but also has the freedom
to choose to seek full-time employment in the trucking industry at any
time. IANA strongly opposes any efforts to limit or eliminate owner-
operators as independent contractor drivers for the intermodal
industry. Such changes are currently under consideration by the
Department of Labor (DOL) as outlined in its October 2022 Notice of
Proposed Rulemaking. Several states have also sought to implement
restrictive worker classification laws. In California, the issue has
been the subject of an ongoing legal challenge in California Trucking
Association v. Bonta. IANA has voiced its concerns to the DOL and other
relevant entities, including states with similar initiatives as the
DOL. We raise this issue in an effort to increase awareness of its
potential adverse impacts to the health of the intermodal industry and
its customers.
Train Crew Size: Safety on our nation's railroads is, and
always will be, a priority for the intermodal transportation industry.
Current regulations, which do not mandate minimum crew size
requirements or regulate the number of crew members located in the cab,
have served the railroad industry well for many years. Without such
burdensome requirements, railroads have upheld stringent safety
standards and maintained strong safety records. Despite lengthy
evaluations by the Federal Railroad Administration (FRA) and other
regulators, some of which have spanned over 15 years, there remains a
lack of data or safety justification to support the FRA's July 2022
Notice of Proposed Rulemaking, which would impose a minimum two-person
crew mandate for most trains. In fact, many railroads--including short
line, passenger, and most European railroads--already safely operate
with a one-person crew in the cab. Crew size mandates would impose new
burdens on the railroad industry, impacting its ability to make
critical investments in safety technologies as well as other
innovations to remain competitive and address customer needs. IANA has
shared these concerns with the FRA and would appreciate Congress'
support and oversight as the proposal moves forward.
Thank you for your time and your leadership in support of
intermodal goods movement and its related issues. IANA looks forward to
working with you and would welcome the opportunity to further engage
with your offices. If you or your staff have any questions, please do
not hesitate to contact me.
Letter of February 15, 2023, and ``Competing To Win'' Report, to Hon.
Sam Graves, Chairman, and Hon. Rick Larsen, Ranking Member, Committee
on Transportation and Infrastructure, from Ben Siegrist, Director of
Infrastructure, Innovation, and Human Resources Policy, National
Association of Manufacturers, Submitted for the Record by Hon. Sam
Graves
February 15, 2023.
The Honorable Sam Graves,
Chairman,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Committee on Transportation and Infrastructure, U.S. House of
Representatives, Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen,
Congratulations on the recent and well-deserved honor of your
selection to lead the House Transportation and Infrastructure Committee
for the 118th Congress. Manufacturers are proud to support the T&I
Committee's mission as a sector that depends on safe personal and
commercial travel, advanced technology and transportation equipment as
well as strong and resilient infrastructure to support those systems.
The National Association of Manufacturers (NAM) is the largest
manufacturing association in the United States, representing small and
large manufacturers in every industrial sector and in all 50 states.
Manufacturing employs nearly 13 million Americans, contributes $2.81
trillion to the U.S. economy annually, pays workers over 18% more than
the average for all businesses and has one of the largest sectoral
multipliers in the economy. Taken alone, manufacturing in the United
States would be the eighth-largest economy in the world.
As the committee embarks on the work outlined during your recent
hearing titled The State of Transportation Infrastructure and Supply
Chain Challenges, manufacturers look forward to working with you, your
staff and all members of the committee to achieve sensible policies
that will ensure American transportation networks are safe and secure
and that the American economy remains competitive in a global
marketplace.
In recent years, the NAM has worked closely with committee members
to tackle issues of great national significance, from averting a
potentially devastating strike on our nation's freight rail networks to
supporting passage of legislation authorizing generational investment
into America's infrastructure network. Additionally, this committee was
instrumental in advancing legislation that provided much-needed relief
to manufacturers reliant upon ocean shipping services at American
ports.
More broadly, the NAM has produced a blueprint of the most critical
actions policymakers can take that will strengthen American economic
interests while focusing on improvements to global supply chains and
domestic infrastructure: Competing to Win, which is attached to this
submission.\1\ The challenges faced by manufacturers are complex,
varied and will require a concerted effort that is strategic and
intentional to advance national interests. The range of actions the NAM
recommends that Congress take are designed to achieve critical economic
and strategic goals. The NAM respectfully encourages you to consider
the following items, among others in Competing to Win, in order to
immediately support manufacturers' competitiveness and improve
operational efficiencies across national industries and supply chains.
---------------------------------------------------------------------------
\1\ National Association of Manufacturers, Competing to Win (Sept.
2022) available at https://documents.nam.org/COMM/
Competing_to_Win_2022.pdf.
---------------------------------------------------------------------------
Reform the federal permitting system
Too often, manufacturers seeking to make significant investments in
the United States face years-long delays in obtaining the permits
needed to break ground on a project. Speeding the permitting process
and establishing permit certainty will support industrial growth.
Efforts to expand domestic energy production, upgrade our nation's
infrastructure, increase critical mineral extraction and processing and
expand facilities are all dependent upon the success of advancing
permitting reform. To that end, ensuring the Administration is
following congressional intent regarding One Federal Decision from the
bipartisan Infrastructure Investment and Jobs Act (IIJA) is key, as
that mandate establishes strict permit review timelines and eliminates
duplicitous efforts across various federal agencies. Moreover, key
permitting authorities are rife with ambiguity and inconsistent
terminology and need Congressional intervention in order to facilitate
manufacturing expansion while achieving environmental stewardship.
Grow the manufacturing workforce
Manufacturers in the transportation sector and across all
industries are facing a workforce crisis. Over the next decade, 4
million manufacturing jobs will likely be needed, and 2.1 million are
expected to go unfilled because there are not enough potential workers
with the skills needed in today's modern manufacturing sector. The
effects of this shortfall will be felt across all industries and in all
modes of transportation from trucking to rail to aviation and maritime
shipping. According to a recent report by the NAM's workforce and
education partner, the Manufacturing Institute, and Deloitte, the U.S.
economy will be $1 trillion smaller in 2030 if those positions are not
filled.\2\
---------------------------------------------------------------------------
\2\ The Manufacturing Institute and Deloitte, Creating Pathways for
Tomorrow's Workforce Today: Beyond Reskilling in Manufacturing (2022)
available at https://www.themanufacturinginstitute.org/wpcontent/
uploads/2021/05/DI_ER-I-Beyond-reskilling-in-manufacturing-1.pdf.
---------------------------------------------------------------------------
In order to fully address this challenge, the perception of
manufacturing and industrial careers must be changed and there must be
an effort to broaden recruitment pipelines to engage underrepresented
populations and--with only 58 people actively looking for work for
every 100 job openings--the potential workforce must grow. Reforming
our nation's broken immigration system is a critical step to address
some workforce needs. Manufacturers support securing our borders and
reforming the immigration system to reflect the needs of the modern
workforce, including addressing the existing backlog of immigration
cases, providing certainty for individuals who are already in this
country and updating our nation's approach to asylum seekers and
refugees.
Support investment in America
Manufacturing is a capital-intensive industry. Facilities,
equipment and machinery have long productive lives but require
significant up-front capital investments. Reducing barriers to these
investments will help grow the manufacturing base. In this regard,
manufacturers urge lawmakers to take two actions.
First, funds that have been authorized to support the manufacturing
economy should be disbursed quickly and equitably. Portions of the
CHIPS and Science Act, the Infrastructure Investment and Jobs Act and
the Inflation Reduction Act authorize investments in key parts of the
transportation and manufacturing economy. Congress should work with the
Administration to ensure that these funds reach manufacturers
expeditiously and abide by the strictures of their legislative
direction. NAM members proudly supported legislative efforts to proffer
historic and much-needed investment into the nation's infrastructure
systems to enhance economic competitiveness and improve business
operations. As this committee reviews federal outlays and the enactment
of laws authorized to upgrade and improve critical infrastructure, the
NAM looks forward to providing industry perspectives on the progress of
funding expenditures and related programs.
Second, lawmakers must ensure that the tax code supports private
investment in manufacturing activities. Specifically, making the 2017
Tax Cuts and Jobs Act permanent would support small businesses, and
reversing harmful changes to the tax treatment of research expenses,
business loans and equipment purchases would benefit all manufacturers
in America.
* * * *
As described during your recent hearing, the Transportation and
Infrastructure Committee has laid out a vigorous agenda for the 118th
Congress. As you seek to address issues affecting our national shipping
supply chain, various modes of transportation and goods movement,
oversight of federal programs authorized to improve infrastructure
networks and continued regulatory review to keep American industries
competitive, the NAM looks forward to continued engagement and
providing ample industry input.
Thank you again for your continued focus on these important issues
and working to enhance manufacturers' ability to compete.
Respectfully,
Ben Siegrist,
Director, Infrastructure, Innovation & Human Resources Policy,
National Association of Manufacturers.
attachment
Report, ``Competing To Win,'' National Association of Manufacturers,
September 2022
The 36-page report is retained in committee files and is available
online at https://documents.nam.org/COMM/Competing_to_Win_2022.pdf.
Statement of Michael C. Seyfert, President and Chief Executive Officer,
National Grain and Feed Association, Submitted for the Record by Hon.
Sam Graves
NGFA commends Chairmen Graves and Ranking Member Larsen for holding
this hearing to learn about the state of transportation infrastructure
and supply chain challenges.
The NGFA consists of more than 1,000 grain, feed, processing,
exporting and other grain-related companies and cooperatives operating
more than 8,000 facilities. Our membership includes grain elevators;
feed and feed ingredient manufacturers; biofuels companies; grain and
oilseed processors and millers; exporters; livestock and poultry
integrators; transportation companies and associated firms that provide
goods and services to the nation's grain, oilseed, feed, and processing
industry.
Efficient, reliable truck, waterborne and rail transportation are
important to the grain and feed industry. For trucking, the challenge
is simple. Additional freight capacity is needed; and the two largest
constraints are available drivers and federal truck weight limits. NGFA
supports efforts to add truck drivers and urges Congress to add
capacity and efficiency by increasing truck weights limits.
For waterborne commerce, oversight of the Water Resources
Development Act (WRDA) investments to modernize locks and dams on the
inland waterways is critical to keep U.S. agriculture competitive in
the global market. The Mississippi River and Columbia-Snake River
Systems can impact trade because barges move about half of all grains
to export grain elevators, including 48 percent of corn, 62 percent of
soybeans and 47 percent of wheat. Critical farm inputs like fertilizer,
feed, and fuel are transported via the inland waterways systems.
Importantly, navigational access must be maintained to the Lower
Snake River Dams. The Columbia-Snake River System is the third-largest
grain export corridor in the world, transporting nearly 30 percent of
U.S. grain and oilseed exports through a sophisticated navigation
system to deliver high value farm products safely and efficiently to
West Coast ports and consumers worldwide. Barging is the most fuel-
efficient way to ship goods and failure to maintain access to this
system would dramatically increase carbon emissions.
Nearly 15 percent of rail volume is agricultural products and the
agricultural industry desires to ship more products by rail, but
inconsistent rail service has contributed to truck freight capturing
most of the growth in agricultural and other freight over the last 40
years. See the charts below showing the growth in truck freight.
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]
Rail has inherent transportation advantages over trucking with
respect to shipping larger volumes with less manpower and fuel.
However, rail service reliability challenges in 2022 ate away at those
advantages and caused other supply chain issues.
For example, feed mills and integrated livestock and poultry
operations have experienced instances in which trains have not arrived
and they have been unable to make scheduled feed deliveries to
producers. At grain export destinations, vessels have waited to be
loaded due to delayed train deliveries while grain exporters pay
demurrage charges to the shipping company.
Grain processors, such as flour mills, crushing and biofuels
facilities, have experienced rail challenges on the inbound and
outbound. On inbound, they have been run short on raw agricultural
commodities and have slowed or shutdown operations. Outbound, their
sidings have become full of loaded railcars and they have been forced
to slow or shutdown operations due to having no place to load empty
railcars. Where able, less efficient truck freight is used to help
offset gaps in rail service.
The impact of unreliable rail service is felt across the NGFA
membership, lowering production and increasing the cost of
transportation of ethanol, biodiesel, soybean oil, soybean meal, flour,
animal feed, meat and other products derived from grain and feed.
The bottom line is that too much of the cost of unreliable and
unchallengeable rail service is borne by rail customers, agricultural
producers and the general public. NGFA appreciates the communication
and openness of rail carriers about the services challenges and current
rail service is improved from where it had been for most of 2022.
However, the rail service pain of 2022 is still fresh in the minds of
NGFA members. NGFA strongly urges Congress and the Surface
Transportation Board (STB) to take appropriate action to provide
clearer rules to incentivise better rail service and prevent a repeat
of 2022.
The Solutions:
The most recent STB reauthorization expired on Sept. 30,
2020. Congress should pass another STB reauthorization with an eye
toward fostering competition in the freight rail system.
The NGFA supports Sen. Tammy Baldwin's Reliable Rail
Service Act from the last Congress that would better define rail
carriers' common carrier obligation.
+ By existing statute, rail customers (shippers and receivers)
have a right to receive reasonable service upon reasonable request, but
the law/rules are vague and therefore unchallengeable.
+ If the railroads do not provide such service, there should be
an easy, quick, and effective challenge process.
+ A better-defined common carrier obligation may help reverse
the 40-year trend of trucks capturing most new ag freight demand.
The NGFA urges STB to conclude its work on Docket No. EP
711 that would establish reciprocal switching rules to enable the
creation of rail-to-rail competition at qualifying interchanges.
The NGFA supports STB's efforts to require additional
data reporting, particularly for first mile/last-mile rail service.
The NGFA urges STB to expeditiously work on Docket No. EP
768 to incentivize rail carriers to more efficiently use rail customer-
owned railcars. Much of the cost of railcar ownership has been
transferred onto rail customers, yet they have little control over the
railcars.
The NGFA supports removing constraints to STB's
investigative authority that currently are limited to issues of
national or regional significance and prospective application of
remedies.
Lastly, NGFA supports expanding STB's enforcement ability
for when rail carriers do not comply with STB orders.
As an association representing a segment of the agricultural supply
chain that relies heavily on efficient, reliable transportation, we
believe sensible policy measures are needed to increase trucking
capacity, preserve/enhance the competitiveness of inland waterways, and
to deter future rail service challenges. Thank you for holding this
important hearing on these critical issues.
Letter of January 31, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Michael W. Johnson, President and CEO, National Stone, Sand &
Gravel Association, Submitted for the Record by Hon. Sam Graves
January 31, 2023.
Honorable Sam Graves,
Chairman,
House Committee on Transportation and Infrastructure, Washington, DC
20515.
Honorable Rick Larsen,
Ranking Member,
House Committee on Transportation and Infrastructure, Washington, DC
20515.
Dear Chairman Graves, Ranking Member Larsen:
On behalf of the 400 members of the National Stone, Sand & Gravel
Association (NSSGA), I am writing to share the aggregates industry's
views, as the Committee holds its first hearing of the 118th Congress,
entitled: ``The State of Transportation Infrastructure and Supply Chain
Challenges.''
NSSGA is the voice of our nation's aggregates industry, which
operates over 9,000 operations and employs over 100,000 people in high-
paying jobs to source 2.6 billion tons of aggregates each year that are
used to sustain our modern way of life and build our nation's
communities and infrastructure. Our industry is the beginning of the
building supply chain, as the products we source are the essential
components needed to build roads, airports, transit, rail, ports clean
water and energy networks.
First, as our country faces economic headwinds and an uncertain
future, the historic Infrastructure Investment and Jobs Act (IIJA) is
laying the groundwork to keep the aggregates and materials industry
moving forward to build more resilient communities and stronger
transportation networks that carry American goods and people. The
certainty provided by IIJA, through the five-year reauthorization of
our surface transportation programs allows companies in the aggregates
industry to better plan and make robust investments in our people,
plants and equipment.
We would like to provide the following policy recommendations, as
the committee kicks off its critical work in the 118th Congress to
ensure transportation and infrastructure policies are best delivering
results in every American community.
Oppose Partisan Policies That Were Not Included in IIJA
Whether investing in a new road in a rural community or a new
transit system in an urban city, infrastructure investment should
benefit all Americans--a mantra well-known to members of this
committee.
That is why we are concerned with proposed policies that insert new
criteria into the planning process, such as suggesting disapproval of
new highway capacity projects in Dec. 2021 FHWA Memorandum that
encourages limiting investment in new capacity projects, or new
selection criteria included in federal grant applications that are
discouraging some communities from participating. These policies were
considered and rejected by Congress and not carried in IIJA.
Limiting new transportation capacity projects and curtailing
flexibility does nothing to ease congestion, reduce air emissions and
improve the flow of goods, which helps address inflation. Further,
roads are still an important aspect of achieving an electric vehicle
future. For example, in California the stated goal is to move away from
fossil-fueled passenger vehicles in the next decade. If this occurs,
then new road capacity will not add increased emissions, but it will
make the movement of goods and people cheaper and quicker. Lack of
capacity has many negative impacts including increased inflation.
Flexibility from Washington is critical, as states work to modernize
our transportation networks, and we should not limit our ability to
address increasing vehicular capacity to our systems.
It is critical for the administration to follow the will of
Congress of providing maximum flexibility to state and local partners
deploying infrastructure. Partisan mandates attached to federal
infrastructure opportunities that discourage investment in new capacity
projects, create more bureaucratic delays, or provide new workforce
hurdles should be rejected.
Buy America Build America and the Aggregates Products Exclusion
One of the key policy changes made under the IIJA was the creation
of new federal Build America Buy America (BABA) sourcing requirements,
which include the addition of ``construction materials'' to Buy America
preferences for federal infrastructure programs.
The aggregates, cement, concrete, and asphalt paving industry
worked with Congress, to craft the new statuary requirements to exclude
aggregates, cement, asphalt additives and paving binders as a
construction material. Further, products that are made by combining
these items, like concrete and asphalt, are also excluded from the new
BABA requirements and subsequent Buy America sourcing rules.
Unfortunately, one critical roadblock has been the lack of clear
and conscious communication over the new Build America, Buy America
regulations, including the exclusion for aggregates-based products.
Multiple state departments of transportation, in addition to federal
agencies, have started issuing guidance and information requests to
begin complying with BABA. Each state and federal agency has issued
different, often inconsistent and sometimes conflicting guidance. Many
times, the guidance fails to recognize the aggregates materials
exclusion leading to confusion across our industries.
Keep in mind that certain geographic areas of the county do not
have the geologic deposits that allow local sourcing of stone, sand and
gravel to make concrete and asphalt and to be used in construction.
These materials must be imported from nearby countries and often it is
less costly and produces less air emissions than trucking long
distances across U.S. regions.
Likewise, a lack of cement capacity in some states means cement
must be imported. The lack of asphalt oil production and refineries,
especially on the east coast, requires agencies and contractors to
import from Canada to meet demand for basic street paving materials.
The aggregates industry strongly supports the goals of Congress and the
administration to expeditiously improve our outdated infrastructure. It
is imperative that federal and state partners responsible for
distributing federal investments follow the BABA law and subsequent Buy
America requirements, as written by Congress, and not impose any
sourcing requirements or paperwork burdens on concrete, asphalt,
cement, cementitious material, aggregates, additives, and binder. This
will ensure maximum project delivery and American job creation.
Permitting Reform Is Needed to Build
Last year, the White House Council on Environmental Quality issued
a new regulation that complicates the permitting process for large
infrastructure projects under the National Environmental Permitting Act
(NEPA). This bureaucratic action broadens definitions and adds
duplicative federal agency reviews that will do nothing to improve
environmental outcomes. What is more frustrating is that these new
rules run counter to the bipartisan NEPA reforms that were included in
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.
In one example, the fixed cost investments for aggregates reserves,
plants and rolling stock to produce this material runs from $3 to $4
per ton of material produced, which requires tremendous replacement
capital each year from companies. This requires a huge commitment of
capital which can be exacerbated by the high inflation we now
experience. America uses over 2.6 billion tons of aggregate a year.
This means an annual commitment by private companies of up to $10
billion per year for new reserves, plants, and equipment to keep
producing the materials needed to meet the demand.
Instead of proceeding with new NEPA guidance that complicates the
procedures, we urge rapid enactment of policies included in IIJA like
``one federal decision'' that will streamline bureaucratic review and
reduce infrastructure permitting timelines from seven to two years.
NEPA is just one part of the permitting problem. Aggregate
producers must often wait years for federal agencies such as the Army
Corps of Engineers and the U.S. Fish & Wildlife Service, amongst others
to issue decisions. Often, the federal regulations conflict with
similar state regulations adding complexity and red tape in the
permitting process. Our operations need clear rules and accountable
federal agencies to produce materials to meet the goals of the IIJA.
Reject the new Waters of the United States (WOTUS) rulemaking until the
Supreme Court rules in the Sackett vs. EPA case.
It is anticipated that the Supreme Court could change how the EPA
and Army Corps of Engineers define a Waters of the United States
(WOTUS). On Oct. 3, the Supreme Court heard oral arguments examining
the Sackett vs. EPA case and questioned the significant nexus analysis.
All the while, EPA and the Army Corps finalized a new rule on Dec.
30, which makes substantive and new changes to the definition of WOTUS,
under the guise of withdrawing the 2020 Navigable Waters Protection
Rule. In fact, in Feb., the Small Business Administration found that
the agencies have improperly certified the proposed rule, determined
the proposed rule expands the definition of WOTUS and impacts small
businesses requiring a small business regulatory review.
With the flawed rulemaking now final, material producers will be
forced to comply with multiple complex changes, resulting in the fifth
change in a decade. Because of the uncertainty, aggregates producers
are unsure of when and how new operations and expansions can be
permitted. With EPA finalizing yet another rule while SCOTUS stands
poised to alter the rule's underpinning only adds to an already time
consuming and uncertain permitting process. The current regulatory
ambiguity is impacting industry ability to obtain CWA permits to
establish new domestic manufacturing facilities and build
infrastructure projects that are critical to addressing our supply
chain crisis.
Unfortunately, despite hearing from impacted stakeholders, 201
House members and 50 Senators, the agencies still proceeded with a
final rule that is likely to conflict with the Supreme Court action. To
provide our industry with certainty needed to produce construction
materials that supply the projects funded under IIJA, it is critical
for the administration to halt this doomed rulemaking process and await
the SCOTUS decision before proceeding with a new rulemaking process.
Rail Service Reform is Needed
It is no secret that rail service conditions are failing for the
aggregates and industrial sand industry. Deteriorating rail service
conditions have a direct impact on our ability to supply millions of
tons of aggregates and industrial sand, which are used to improve
outdated infrastructure, build resilient communities, and drive
America's energy production.
In detailed comments to the Surface Transportation Board (STB),
NSSGA shared how service disruptions and unwarranted price increases
are severely impacting our industry. If action is not taken to improve
service, the constant delays, and the inability to move product to
market will continue to have a direct impact on supplying key
infrastructure projects across the country. This will ultimately plague
the implementation of the bipartisan IIJA.
NSSGA calls on Congress and the STB to enact meaningful rail reform
that levels the playing field between shippers and carriers. One such
proposal is the pending rulemaking at STB related to reciprocal
switching. If enacted, this would drive greater competition, especially
for facilities captive to one carrier.
Workforce Development
A skilled and highly trained inclusive and diverse workforce is
paramount to safely operating quarries that produce the critical
materials found in infrastructure projects. Unfortunately, many
aggregate producers are unable to hire and retain a full workforce in
today's labor market.
The aggregates industry takes pride in investing in its employees
by providing attractive salaries, competitive benefits, robust
training, support and career development. Our industry's average annual
salary is over $75,000, and most employees spend their entire careers
in the industry.
NSSGA supports policies and funding from the federal government to
train workers, increase the diversity of our workforce and ensure
aggregate producers can access the skilled employees needed to continue
producing the building blocks of America. We also encourage Congress
and the administration to continue its bipartisan support for programs
that work with America's veterans, active and reserve service members,
and their spouses to find meaningful careers and employment
opportunities.
Thank you for providing the opportunity for our members to share
their views as you examine the critical issues impacting our
transportation network and supply chains.
Do not hesitate to contact NSSGA should we be able to provide any
assistance, as the Committee works through this Congress.
Sincerely,
Michael W. Johnson,
President and CEO, National Stone, Sand & Gravel Association.
CC: Members of the House Committee on Transportation and
Infrastructure
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from Sean O'Neill, Senior Vice President of Government Affairs,
Portland Cement Association, Submitted for the Record by Hon. Sam
Graves
February 1, 2023.
The Honorable Sam Graves,
Chairman,
Transportation and Infrastructure Committee, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
Transportation and Infrastructure Committee, Washington, DC 20515.
Dear Chairman Graves and Ranking Member Larsen:
The Portland Cement Association (PCA), which represents the
majority of U.S. cement manufacturers, appreciates the opportunity to
submit a statement for today's committee hearing entitled ``The State
of Transportation Infrastructure and Supply Chain Challenges.'' We
welcome the opportunity to share the perspective of our members on the
role of cement to building infrastructure and the supply chain
challenges cement manufacturers are facing.
Portland cement is a manufactured powder that is the primary
ingredient in concrete. Portland cement acts as the bonding agent in
concrete, similar to the role of flour in cake mix. As an essential
construction material and a basic component of our nation's
infrastructure, portland cement is utilized in virtually all
construction applications, including highways, bridges, mass transit,
airports and runways, offices, dams, and water resource systems and
facilities. The continued use portland cement ensures concrete remains
one of the nation's most essential and widely used construction
materials. Virtually nothing in the modern world can be constructed
without it.
Across the country, there are approximately 100 cement
manufacturing plants in 34 states, including five in Missouri and one
in Washington. The cement and concrete industry prides itself in
employing approximately 600,000 people nationwide.
Implementation of the Infrastructure and Investment Act
The cement industry appreciates the work of the Transportation and
Infrastructure Committee and the 117th Congress to pass the
Infrastructure Investment and Jobs Act (IIJA) in 2021. After years of
deferring investing in our nation's infrastructure, the funding
provided by the IIJA will address years of underinvestment.
Additionally, this will spur economic growth, create jobs, and improve
our nation's global competitiveness.
The cement industry commends the attention the reauthorization of
the transportation program places on improving the resilience of
transportation investments making much needed investments in our
nation's roads, highways, bridges and transit systems, and addressing
challenges caused by a changing climate. In each of these, there is a
role for cement to advance these objectives. PCA also supports the
steps taken by the IIJA to make sensible reforms to the federal
permitting and environmental review process. Additionally, PCA supports
the reauthorization of several Environmental Protection Agency (EPA)
water infrastructure programs, including both the Drinking and Clean
Water State Revolving Funds (SRFs) and the Water Infrastructure Finance
and Innovation Act (WIFIA). The EPA's drinking and wastewater
infrastructure programs provide critical assistance to communities to
advance much needed water infrastructure projects. In recognition of
the increase of extreme weather events that are increasingly disrupting
and damaging water infrastructure in communities across the country,
PCA supports the attention the IIJA places in improving the resilience
of this critical infrastructure.
We expect the demand for cement to increase as states and
municipalities implement the infrastructure projects funded in large
part by IIJA. For example, based on PCA's Market Intelligence
forecasts, the investments made by the IIJA will result in 46 million
metric tons of cement \1\, which is a significant increase in
consumption. Not only will these projects use cement to build critical
infrastructure, but they will also help improve the efficient and cost-
effective movement of cement to market.
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\1\ https://www.cement.org/docs/default-source/cement-concrete-
applications/ed-sullivan's-fall-forecast-2021.pdf?sfvrsn=cbe0fcbf_2
---------------------------------------------------------------------------
Build America, Buy America
The IIJA included the Build America, Buy America Act (BABA) which
extends domestic content procurement preferences to certain
construction materials for all infrastructure projects funded in part
with federal funding. The BABA established an important limitation on
the term construction materials. Specifically, the BABA limited the
term from including ``cement and cementitious materials, aggregates
such as stone, sand, or gravel, of aggregate binding additives.'' This
limitation makes clear no construction material domestic content
procurement preference from these construction materials is established
under the BABA. Additionally, the BABA prohibits the same construction
materials from being subject to Buy America as inputs in all
manufacturing processes that produce construction materials.
The BABA directs the Office of Management and Budget (OMB) to issue
standards that define all manufacturing processes for construction
materials for which BABA does apply a domestic content procurement
preference. The legislative intent of this provision of the BABA is for
the combination of the listed items as concrete from being exempt from
the domestic content procurement references included in BABA.
The OMB has issued initial guidance on BABA implementation related
to construction materials. However, the OMB has not taken steps to
issue the standards related to all manufacturing processes. This has
resulted in inconsistencies in the way BABA is being implemented across
different federal agencies, and PCA members are receiving questions
about whether their product is Buy America compliant even though the
legislative intent of exempting cement and cementitious materials and
their combination with aggregates to form concrete from the new BABA
provisions related to construction materials and manufactured product.
PCA would support efforts on the part of the OMB to clarify to agencies
that cement and concrete do not have to be BABA compliant.
Supply Chains and the Efficient Movement of Cement
Last year, cement consumption in the United States increased 2.9
percent over 2021 levels, which was also a strong year. Annually, the
majority of the cement consumed in the United States is manufactured
domestically. To meet market demand, a portion of the cement consumed
in the United States is imported. The top five countries where cement
is imported from are Turkey, Canada, Mexico, Greece, and Vietnam. As we
have noted we expect demand for cement to increase as more
infrastructure projects funded by the IIJA.
Over the past couple of years, cement manufacturers have
experienced logistics hinderances that have impacted their ability to
ship cement to market as well as receive shipments to produce the
energy needed to manufacture cement and the chemicals to maintain
environmental compliance. In recognition of the regional nature of the
cement industry, it is critical to have reliable and cost-effective
transportation options.
The average cement shipments range between 250 and 300 miles. Truck
transportation is not economically viable beyond 100 to 125 miles. As
such, the cement industry relies on railroads to deliver our product to
the marketplace beyond the economical range of trucks. Several cement
plants also have access to water transportation for domestic shipments.
These plants look to barge, rail, and trucks to transport their
product. In summary, domestic cement manufacturers have historically
relied heavily on rail transportation to move the majority of shipments
between cement plants and distribution terminals, and that reliance has
only grown in the recent years.
Most bulk cement shipments are from the manufacturing plants to the
more than 300 regional distribution terminals, where the cement is then
delivered by truck to the distribution network consisting primarily of
local contractors and ready mixed concrete producers. It is critically
important to PCA members that the railroads provide reliable,
efficient, and cost-effective service to meet the widespread and
growing demand for our product.
PCA members have almost universally experienced a decline in rail
service when Class I railroads moved to precision scheduled railroading
(PSR). With challenges already facing the logistics of consistent
service, this shift has resulted in a significant increase in missed
switches and increased demurrage billings. This has led to increased
costs to cement manufacturers not only through increased demurrage but
lost sales. One single anecdotal example represents the potential
magnitude of this difficult situation. Due to poor rail service to one
terminal location, a specific shipper lost between 60,000 to 100,000
tons of annual volume. This amount would be enough to build as many as
3,000 standard-sized homes. Many of our members have seen their rail
service further decline over the last two years with staffing cuts and
challenges associated with the COVID-19 pandemic. Cement is also exempt
from Surface Transportation Board (Board) oversight. We appreciate the
steps the Board is taking to not only draw attention poor rail service
but also improve rail service, but not all actions taken by the Board
help our members in their interactions with the railroads due to the
lack of Board oversight.
In conclusion, PCA and our members are committed to working with
this committee to ensure that our transportation network and the supply
chains that are so critical to our nation's infrastructure are
operating in a manner that grows our economy and meets future demands.
If you have any questions, please do not hesitate to reach out to Sean
O'Neill.
Sincerely,
Sean O'Neill,
Senior Vice President, Government Affairs, Portland Cement
Association.
Statement of the Wabtec Corporation, Submitted for the Record by Hon.
Sam Graves
Westinghouse Air Brake Technologies Corporation (``Wabtec'')
submits the below testimony in response to the House Transportation and
Infrastructure Committee's February 1, 2023 hearing titled, ``The State
of Transportation Infrastructure and Supply Chain Challenges.'' As a
leading global provider of equipment, systems, digital solutions, and
value-added services for the freight and transit rail industries,
Wabtec is uniquely qualified to comment on the country's transportation
and supply chain challenges and opportunities.
Wabtec Corporation
As a global technology leader in transportation, Wabtec designs,
manufactures, and services freight rail and marine transportation
products, logistics, and digital solutions that move people and goods
across the U.S., North America, and the globe. Headquartered in
Pittsburgh, PA, Wabtec operates in over 50 countries with 27,000
employees worldwide, including over 10,000 in the U.S. With more than
23,000 locomotives in its global installed base, Wabtec moves more than
20% of the world's freight in over 100 countries.
Today, rail represents the cleanest, most energy efficient, and
safest mode of moving freight and people on land. As global demands for
growth increase, current trends indicate that freight and passenger
rail activity will more than double by 2050, leading to an increased
demand for sustainable transportation of people and goods. At Wabtec,
we are helping our freight and passenger transit customers reduce their
overall carbon footprint through the development of low-emitting
locomotives like our Tier 4 diesel-electric locomotives, and battery-
electric locomotives, energy management systems like Trip Optimizer, as
well as next generation transit products, Green Air and Green Friction.
Wabtec's Freight Locomotive Technologies
Despite the low carbon footprint rail brings to freight movement,
Wabtec is committed to developing technologies to further enhance the
safety, efficiency, and sustainability of the U.S. freight rail
network. Wabtec has been leading the industry in cleaner, more energy-
efficient freight rail solutions. Wabtec's Tier 4 locomotive, designed
to meet the U.S. Environmental Protection Agency's most stringent
emission standards, was the first-of-its-kind. Today, there are more
than 1,000 Tier 4 locomotives in service delivering a 70% reduction in
emissions. In 2019, this fleet of Tier 4 locomotives completed more
than 100 million miles of revenue service, the equivalent of hauling
freight to the surface of Mars.
To further reduce the freight rail industry's carbon footprint,
Wabtec developed the world's first 100-percent heavy-haul battery-
electric locomotive called the FLXdrive. The FLXdrive was designed at
Wabtec's Campus in Erie, a 111-year-old site considered the backbone of
innovation for the rail industry. With haulage capabilities comparable
to its diesel equivalent, the FLXdrive locomotive is designed to
replace a diesel locomotive within a train consist, unlocking new
levels of operational flexibility for the freight rail industry.
The FLXdrive 1.0 demonstration ran over 13,000 miles and delivered
an average of 11% reduction in fuel consumption across the train. This
is the equivalent of 6,200 gallons of diesel fuel saved and
approximately 65 metric tons of carbon dioxide (``CO2'') emissions
reduced. At an 8 MWhr battery capacity, we have an opportunity to
further reduce fuel consumption and emissions by up to 30%.
Wabtec also has made significant investments in the existing
locomotive fleet through its remanufacturing and modernization
programs. These programs lead to up to 15 percent improved fuel
efficiency, greater than 40 percent increase in reliability,
approximately 50 percent increase in haulage ability, and a reduction
in maintenance and repair expenses. In addition, these programs support
a circular economy by extending the useful life of our products and
reducing waste in our operations. In 2021, Wabtec remanufactured its
1000th locomotive, and we continue to expand this capability to
customers around the globe.
In addition to modernizing the existing locomotive fleet, Wabtec is
researching alternative fuels to reduce the emissions impact of the
existing fleet. In 2022, Wabtec partnered with Oak Ridge National
Laboratory and Argonne National Laboratory to test and develop a
locomotive engine capable of running on both hydrogen and diesel. This
project seeks to displace diesel fuel by 50% or more with hydrogen in
order to create a lower carbon retrofit option for existing locomotives
\1\. Additionally, Wabtec partnered with BNSF Railway and Union Pacific
Railroad to test and validate alternative fuel blends to measure the
impact on emissions, durability and performance of Wabtec locomotives
\2\. Technology adoption across the freight rail industry will be a
driver for the modernization of the entire freight and supply chain
ecosystem, making it cleaner and more efficient.
---------------------------------------------------------------------------
\1\ National labs, Wabtec partner to develop next-gen locomotive
engine. https://www.freightwaves.com/news/national-labs-wabtec-partner-
to-develop-next-gen-locomotive-engine
\2\ Wabtec and BNSF Railway Biofuels Pilot to Advance
Sustainability. https://www.wabteccorp.com/newsroom/press-releases/
wabtec-and-bnsf-railway-biofuels-pilot-to-advance-sustainability; UP,
Wabtec, REG Launch Renewable Fuels Testing. https://www.railwayage.com/
mechanical/locomotives/up-wabtec-reg-launch-renewable-fuels-testing/
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Positive Train Control
Wabtec also leads the way in rail utilization, safety, and
logistics optimization technology. In 2008, Congress passed the Rail
Safety Improvement Act, which mandated the implementation of Positive
Train Control (``PTC'') systems on most of America's railroads. Since
2008, Wabtec has supplied over 24,000 locomotives with its
Interoperable Electronic Train Management System (``I-ETMS''), a
safety-critical overlay system that provides means to enforce movement
authorities, speed restrictions, work zones and switch positioning to
help reduce the potential for train accidents. I-ETMS integrates new
technology with existing train control and operating systems to enhance
train-operation safety.
With I-ETMS, the crew remains in control of the train, while the
system monitors and ensures the crew's compliance with all operating
instructions. The on-board computer, with the aid of an on-board
geographic track database and GPS system, constantly calculates warning
and braking curves based on all relevant train and track information
including speed, location, movement authority, speed restrictions, work
zones, and consist restrictions. All information is combined and
analyzed in real time to provide a ``safety-net'' for improved train
operations.
Wabtec continues to accelerate innovation with development funding
to create new products and capabilities to increase customer
productivity, efficiency, capacity, utilization, and safety. Wabtec is
working to increase rail utilization through advanced PTC systems by
developing new technologies to utilize ``moving blocks'' instead of the
traditional fixed blocks used by most railroads today. Currently, PTC
uses ``fixed block'' technology that uses wayside signaling systems,
built into the railroad's infrastructure, to transmit a train's
location. These fixed locations only allow for one train in a ``block''
at any given time. ``Moving block'' would use onboard transponders to
transmit a train's location to other trains behind or ahead. This
allows trains to maintain a safe distance between each other and
eliminates inefficiencies of the fixed block system. Moving block
reduces headways between trains and increases rail capacity, while
maintaining stringent safety standards.\3\
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\3\ https://www.aar.org/campaigns/ptc/
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Freight Rail Utilization
A functioning and resilient supply chain is not possible without a
robust freight rail industry. The United States has the most extensive
rail network on the planet, and in 2020, railroads accounted for 40% of
long-distance freight by volume.\4\ Freight rail is the cleanest,
safest, and most efficient way to move goods over land.\5\ Even with
its clear advantages, roughly 85% of America's primary corridor rail
mileage is currently underutilized.\6\ The United States must find ways
to increase utilization of its freight railways if we want to move
goods and materials more efficiently, effectively, and sustainably.
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\4\ https://www.aar.org/facts-
figures#: :text=Freight%20railroads%20account%20for%20roughly,
transportation%2Drelated%20greenhouse%20gas%20emissions.
\5\ https://www.aar.org/wp-content/uploads/2020/08/AAR-Safety-Fact-
Sheet.pdf
\6\ https://www.wabteccorp.com/Freight2030-white-paper?inline
---------------------------------------------------------------------------
Wabtec is developing next-generation technologies, such as dynamic
network planning artificial intelligence, and on-demand logistics
planning to optimize heavy haul operations, increase yard capacity and
cargo visibility, and grow ``first & last'' mile operations. Our
Movement Planner system optimizes the mainline network by providing
real-time rail traffic planning and optimization, enabling freight to
move more efficiently using existing rail networks, thereby reducing
energy use, emissions, and waste.
Movement Planner is currently being used by two of the most complex
railroads in North America, Norfolk Southern and the BNSF along with
two Australian natural resources railroads. This technology has
resulted in a 15% reduction in dwell time compared to the prior year.
With advancements to current signaling systems, network efficiency
solutions, and freight rail utilization technologies, the rail industry
could increase the freight rail network capacity by roughly 50% without
adding a single piece of track.\7\
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\7\ https://www.wabteccorp.com/Freight2030-white-paper?inline
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Freight Yards
America's freight railroads remain a critical part of our nation's
supply chain with a proven record of navigating disruptions, such as
the COVID-19 pandemic to deliver goods reliably and bolster the U.S.
economy. In a typical year, U.S. freight railroads move 1.7 billion
tons across nearly 140,000-miles of privately owned infrastructure that
runs through 49 states.
With rail accounting for such a large percentage of freight
movements, separating and sorting railcars and building new outbound
trains within freight yards are central to freight delivery
performance. Yet, today, most yards have minimal real-time asset
tracking capabilities, so shippers cannot track their shipments across
the supply chain network.
RailConnect Transportation Management System is a Wabtec software
solution that enables companies to increase efficiency and
productivity, improve revenue recognition, and optimize service levels.
To date, more than 600 short line customers are using RailConnect to
control and manage yard, inventory, waybills, train movements,
switching, demurrage, and even miscellaneous billing.
Building on the benefits of greater supply chain visibility,
Wabtec's Yard of the Future initiative looks to modernize rail yard
operations and develop advanced solutions to reduce emissions and
improve overall logistics efficiency in rail yards. Yard of the Future
will use planning tools and remote-control capabilities to improve yard
capacity and efficiency. Coupled with increased usage of zero-emission,
battery-powered yard equipment, Yard of the Future will accelerate yard
throughput, better integrate yard operations, and improve the
environmental footprint of railyard operations.
One of the tools being utilized within the Yard of the Future
initiative is Wabtec's unique digital solution called the
Classification Yard Planner. This platform combines dynamic planning
tools, increased visibility, and decision support systems to unlock
productivity and network efficiency. It is designed to help railroads
make the best decisions around asset use and resource allocation so
they can get cars connected and out of the yard faster. Based on
initial pilot implementations at a Class I railroad, Wabtec's
Classification Yard Planner is estimated to improve car connections by
10%, decrease car dwell time by 5%, and reduce administrative and
planning efforts by 44%.
Ports and Marine
Over the last two years, the COVID-19 pandemic strained America's
ports and supply chains. As demand for goods sharply increased, supply
bottlenecks manifested across the globe, including at our nation's
ports. At the nation's busiest port, the Port of Los Angeles
(``POLA''), hundreds of ships laid at anchor off the Southern
California coast waiting to be unloaded. While POLA worked diligently
to alleviate these pressures, including moving to 24/7 operation, the
supply chain crisis persisted for months.
To keep cargo flowing efficiently and increase throughput at
America's ports, Wabtec has developed part of the solution, the Port
Optimizer, an unparalleled cloud-based information portal designed to
digitize maritime shipping data for cargo owners and supply chain
stakeholders through secure, channeled access. Port Optimizer can
collect data from dozens of different sources and use machine-learning
algorithms to standardize the incoming data into one platform. The
platform contains data sourced from direct connects with 9 of the top
10 global shipping lines and all marine terminals within POLA. POLA
uses Port Optimizer to enhance supply chain performance through real-
time data, which helps relieve bottlenecks at the port. Port Optimizer
also contains data from selected third-party providers, including
United States Customs and Border Protection, The Marine Exchange of
Southern California, GeoStamp, and others.
Port Optimizer's Track and Trace application provides visibility of
containers and other port assets to drayage companies and beneficial
cargo owners. The Control Tower application provides port-wide
historical and future forecasted container volumes for Port Authorities
to analyze trends. By enabling these features, the Port of Los Angeles
increased its throughput, improved efficiency with digital
infrastructure, and created an on-time, accurate, and reliable source
of data for port stakeholders to better plan operations.
Wabtec is also an integral partner within the marine industry. As
marine fleets connect to ports, Wabtec's breakthrough Tier 4 engine
technology has been adapted for marine use to provide one of the
cleanest, most efficient movement of goods and people on water.
Wabtec's marine diesel engines are used on ships, ferries, dredgers,
and other marine applications. These engines are less complex to
install, easy to operate, and allows customers to save up to 75 percent
of valuable cargo, fuel, and accommodation space due to their smaller
size.
At the nation's ports, Wabtec's ShoreCONNECT solution is designed
to help create a safer and more efficient supply chain for goods
movement by reducing emissions and increasing logistical flexibility.
ShoreCONNECT consists of movable power connectors that power ships with
clean electricity as they berth without the need of a diesel generator.
At the Port of Keil in Germany, ShoreCONNECT has the potential to
reduce 12,000 tons of carbon emissions annually from cruise ships by
providing shore power, while also reducing operating costs, emissions,
and noise.
Conclusion
For over 150 years, Wabtec has been at the forefront of freight,
rail yards, and ports technology advancement. Wabtec is proud to
partner with Class 1 railroads, short lines, ports, and yards
operators, and shippers to develop solutions to improve the safety,
reliability, efficiency, and sustainability of today's freight and
logistics networks. We thank the Committee for holding this important
hearing and look forward to working with Congress to accelerate
critical investments and partnerships to ensure a resilient and
efficient national supply chain and transportation network.
Letter of October 3, 2022, to Hon. Pete Buttigieg, Secretary of
Transportation, from the Community Transportation Association of
America et al., Submitted for the Record by Hon. Rick Larsen
October 3, 2022.
The Honorable Pete Buttigieg,
Secretary of Transportation,
1200 New Jersey Ave SE, Washington, DC 20590.
Dear Mr. Secretary,
Thank you for your leadership in implementing the historic
Bipartisan Infrastructure Law. This investment in our infrastructure
comes as a critical time as the nation emerges from the COVID-19
pandemic and navigates ongoing supply chain and inflation issues.
The undersigned organizations, led by the Community Transportation
Association of America's (CTAA), write today to bring awareness to a
burgeoning crisis in the small bus industry that threatens the ongoing
operations of rural, small-city, paratransit and non-emergency medical
transportation providers across the nation. Today, the demand for small
buses, particularly body-on-chassis vehicles, far outstrips supply with
estimates of 20,000 small bus purchases currently backlogged.
We need your assistance in securing more chassis for the small bus
marketplace so the trips to vital health care appointments (like
dialysis); to congregate meal sites and grocery stores; to work and
education; and to other social services that these types of buses
typically serve can safely continue. In addition, the current
environment creates an opportunity to promote flexibility, competition,
and innovation by streamlining the procurement regulations for small
buses.
Recent dialogue among transit agencies, state departments of
transportation, bus dealers and bus manufacturers highlight the current
state of the small bus marketplace:
A survey of State Departments of Transportation (State
DOTs) last month revealed that three quarters of State DOTs are feeling
an unprecedented level of concern regarding standard vehicle
replacements and maintaining a state of good repair, with more than
one-half of agencies having had a small bus purchasing contract or
agreement terminated in 2022;
Bus dealers predict the small bus backlog, nationally, to
eclipse 20,000 in 2023, and expect full recovery of the market to take
five to seven years;
The largest small bus manufacturer currently has one of
seven manufacturing facilities up-and-running, and can only meet 25
percent of demand; and
Prices for these vehicles are running 30 percent to 70
percent above pre-pandemic levels.
With the Biden Administration's leadership in enacting the
Infrastructure Investment and Jobs Act (IIJA), public transit providers
have record levels of federal capital investment. However, the small
bus manufacturing backlog and price inflation threaten to stifle the
IIJA's impact on transit service delivery in communities across the
country. The positive impact of the IIJA's generational infrastructure
investment is surely threatened by this situation.
The undersigned transit industry partners are actively working
together to collaborate and support each other throughout this
challenging time. Working together, we have developed a number of
potential solutions for your consideration, including:
Encourage chassis manufacturers, particularly Ford, to
set aside units for vital public transportation and for small buses.
Streamline current procurement regulations, with an
emphasis on flexibility, because of the unprecedented nature of current
small bus crisis. Use the vehicle backlog, nationally, to determine the
timeframe for these procurement process changes.
Expand the Federal Transit Administration's (FTA)
proposed Buy America general nonavailability waiver for passenger vans
(87 Fed. Reg. 43101) to include waiving Buy America requirements for
small buses and vans when manufacturers are not able to guarantee
delivery within 12 months or less of an order. Use this temporary
waiver to incent manufacturers to locate production facilities in the
United States.
Offer clear guidance to FTA grantees on whether, when,
and how to amend bus procurements or reprogram funds when vehicles as
specified cannot be delivered under the terms of a procurement
agreement.
In summary, we strongly encourage the U.S. Department of
Transportation to help the public transit industry secure additional
chassis for the small bus market. It is critical to our shared goal of
ensuring that the Bipartisan Infrastructure Law provides unparalleled
opportunities to all Americans. We would surely welcome any opportunity
to discuss this critical subject further.
Sincerely,
Scott Bogren,
Executive Director, Community Transportation Association of America.
Paul P. Skoutelas,
President and CEO, American Public Transportation Association.
Jim Tymon,
Executive Director, American Association of State Highway and
Transportation Officials.
Vermont Agency of Transportation,
Barre, VT.
Nebraska Association of Transportation Providers,
Milford, NE.
Tennessee Public Transportation Association,
Nashville, TN.
Georgia Transit Association,
Marietta, GA.
Transportation Association of Maryland,
Linthicum, MD.
Prairie Hills Transit,
Spearfish, SD.
TransAction Corporate Shuttles, Inc.,
Woburn, MA.
New Mexico Department of Transportation,
Santa Fe, NM.
Call a Ride Service, Inc.,
Lewistown, PA.
Utah State University Aggie Shuttle,
Logan, Utah.
Southern Georgia Regional Commission,
Georgia.
Starkville Mississippi State Area Rapid Transit,
Mississippi State, MS.
Rogue Valley Transportation District,
Medford, OR.
Ohio Department of Transportation,
Ohio.
Washington State Transit Association,
Washington.
River Bend Transit,
Davenport, IA.
Arkansas Transit Association,
Arkansas.
Mercer County Trade,
Trenton, NJ.
Oklahoma Transit Association,
Oklahoma.
Coordinated Transportation Solutions,
Trumbull, CT.
Alabama DOT,
Alabama.
Special Services Transportation Agency,
Colchester, VT.
Tri-Valley Transit,
Middlebury, VT.
Claiborne County Human Resource Agency,
Port Gibson, MS.
Alaska Mobility Coalition,
Anchorage, AL.
Oklahoma Department of Transportation,
Oklahoma City, OK.
California Association for Coordinated Transportation (CALACT),
Sacramento, CA.
Fairmont-Marion County Transit Authority,
Fairmont, WV.
North Carolina Public Transit Association,
North Carolina.
Kentucky Public Transit Association,
Kentucky.
Illinois Public Transit Association,
Illinois.
Minnesota Department of Transportation,
St. Paul, Minnesota.
TPRG,
Cocoa Beach, FL.
Community Transportation Association of the Northwest,
Oregon and Washington.
Community Transportation Association of Virginia,
Radford, Virginia.
Missouri Public Transit Association,
Missouri.
Florida Public Transportation Association,
Tallahassee, FL.
The Bus Coalition,
Nationwide.
Michigan Public Transit Association,
Lansing, Michigan.
Michigan Transportation Connection, Inc.,
East Lansing.
Upper Cumberland Human Resource Agency,
Cookeville, Tennessee.
California Department of Transportation,
California.
River Cities Public Transit,
Pierre, South Dakota.
Michigan Department of Transportation,
Michigan.
SporTran,
Shreveport, LA.
Maricopa Association of Governments,
Phoenix, Arizona.
NJ Transit Corp.,
Newark, NJ.
MDOT MTA,
Maryland.
Siouxland Regional Transit System,
Sioux City, Iowa.
South Dakota Department of Transportation,
Pierre, SD.
Ionia Dial-A-Ride,
Ionia, Michigan.
Virginia Department of Rail and Public Transportation,
Richmond, Virginia.
MIDAS Council of Governments,
Fort Dodge, IA.
Vermont Clean Cities Coalition,
Burlington, VT.
Division of Multimodal Transportation Facilities, Division of Public
Transit, West Virginia Department of Transportation,
Charleston, WV.
South West Transit Association,
Fort Worth, Texas.
Texas Transit Association--TTA,
Austin, Texas.
MS Department of Transportation,
Mississippi.
Southeast Vermont Transit,
Vermont.
Gifford Health Care,
Randolph, Vermont.
Community Transit of Watertown/ Sisseton, Inc.,
Watertown, SD.
Two Rivers-Ottauquechee Regional Commission,
Woodstock, Vermont.
Senior Solutions Council on Aging,
Southeastern, VT.
Age Well, Inc.,
Vermont.
Upper Valley Services,
Bradford, VT.
Senior Solutions,
Springfield, VT.
Mississippi Public Transit Association,
Natchez, Mississippi.
Natchez Transit Regional Center,
Natchez, Mississippi.
Natchez Senior Citizen's Multipurpose Center,
Natchez, Mississippi.
Letter of February 1, 2023, to Hon. Sam Graves, Chairman, and Hon. Rick
Larsen, Ranking Member, Committee on Transportation and Infrastructure,
from the American Chemistry Council, Submitted for the Record by Hon.
Dusty Johnson
February 1, 2023.
The Honorable Sam Graves,
Chairman,
House Committee on Transportation and Infrastructure, United States
House of Representatives, Washington, DC 20515.
The Honorable Rick Larsen,
Ranking Member,
House Committee on Transportation and Infrastructure, United States
House of Representatives, Washington, DC 20515.
Re: Hearing on ``The State of Transportation Infrastructure and Supply
Chain Challenges''
Dear Chairman Graves and Ranking Member Larsen:
The American Chemistry Council (ACC) appreciates the Committee
holding this hearing to examine transportation and supply chain
challenges and to learn how carriers will address them. Just like the
carriers testifying at the hearing, shippers continue to face
unprecedented transportation problems that adversely impact their
operations, which in turn impacts the broader economy by fueling
inflation and the shortage of products and materials.
ACC represents more than 150 of America's leading chemical
companies. Our members manufacture a wide variety of chemicals,
polymers, and related products that help make our lives and our world
healthier, safer, more sustainable, and more productive. The business
of chemistry is also essential to building and construction,
electronics, farming, food production, vaccines, medicine, automobiles,
aerospace and much more.
The chemical sector is one of the largest shippers by volume across
all modes of transportation--for marine, rail and truck. Our
transportation needs are growing as the result of the resurgence of
U.S. chemical manufacturing. ACC's Economics and Statistics department
found that investments in chemical manufacturing in the U.S. will drive
tremendous new transportation demand with more than 830 thousand
additional chemical shipments per year by 2032:
337K additional marine container shipments
122K additional rail shipments
370K additional truck shipments
Supply chain and freight transportation disruptions have caused
considerable problems for chemical producers. In fact, a survey of ACC
members found that 97 percent of companies reported that they had been
forced to modify or curtail operations because of transportation. And
our members tell us that significant supply chain and freight
transportation challenges persist.
ACC recognizes and applauds the important steps that Congress and
the Administration have taken to help address transportation
challenges, including the passage of the bipartisan Ocean Shipping
Reform Act (OSRA). We also thank Congress for the swift, bi-partisan
action to avert a shutdown of the nation's rail network. However, more
needs to be done to improve the efficiency, capacity, and resiliency of
America's freight transportation system.
Trucking Policy
Chemical manufacturers are concerned that constraints in the
trucking industry could hinder future growth and investments. We urge
Congress to pass the Safer Highways and Increased Performance for
Interstate Trucking (SHIP IT) Act to help the trucking industry deliver
for businesses and consumers. The bill contains key reforms that will
help recruit and retain drivers, while maximizing the efficiency of the
country's trucking network and without creating new regulations.
Freight Rail Reform
Freight rail is critical to ACC's members and chemical
manufacturing. Our industry is one of the largest freight rail
customers, shipping over two million carloads annually.
ACC appreciates the testimony from Ian Jefferies of the Association
of American Railroads acknowledging that rail service has not been what
customers deserve and stating that railroads are ``fully committed to
restoring service to a consistently high level.'' However, rail service
failures cannot be blamed solely on the pandemic, and rail customers
deserve more than promises that railroads will do better in the future.
Railroads cut tens of thousands of jobs before the pandemic
started. In addition, railroads have dramatically changed their
operations and the level of service they provide to shippers as they
implemented Precision Scheduled Railroading (PSR). These changes have
harmed many rail customers through additional costs and service
failures.
Given the massive changes within the freight rail industry and
their ramifications for the economy, the Surface Transportation Board
(STB) cannot afford to stand still. The STB should adopt new approaches
that are better equipped to address the current environment.
Competition and market forces provide the best means to balance the
needs of railroads and their customers. Policies that promote greater
competition within the rail industry help make it an attractive and
viable option to move freight, and competition will incentivize
railroads to attract and retain the skilled workforce needed to meet
this demand.
We urge Congress to provide the Surface Transportation Board with
the resources it needs to finalize long overdue regulatory reforms that
will provide greater access to competitive and reliable freight rail
service.
Specifically, ACC supports the STB's proposal to change its
restrictive rules on reciprocal switching. This key reform would
finally provide greater access to competitive rail service as
envisioned by the Staggers Rail Act more than 40 years ago. Reciprocal
switching will help provide competitive transportation rates, open up
more service options, and ease congested routes.
In addition, we support the Board's efforts to collect and report
more meaningful data on service performance to rail customers known as
``first mile/last mile service.'' Collecting this critical data would
provide the STB and rail customers with better insight into some of the
most disruptive service problems so they can be effectively addressed.
Finally, we urge Congress and the STB to further define and clarify
the service performance levels that railroads are required to meet as
part of their Common Carrier Obligation. This will provide greater
accountability and help prevent future service failures.
ACC would like to work with the Committee to deliver solutions that
will help improve the transportation network and strengthen the
nation's supply chains.
Sincerely,
American Chemistry Council.
Appendix
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Question from Hon. Eleanor Holmes Norton to Chris Spear, President and
Chief Executive Officer, American Trucking Associations
Question 1. One of the best ways to improve roadway safety for
truckers is to better train drivers and prepare them for the
profession. A well-trained driver will be better able to handle the
challenging situations they will inevitably face, and by making sure
they are prepared for the career, they are more likely to stay in the
industry, gain experience, and drive more safely.
The Entry Level Driver Training standards, or ELDT rule, went into
effect in February 2022 after a delay. Before this ELDT rule there were
no national training standards for truckers getting their Commercial
Driver's License.
Congress has now seen requests from some carriers and segments of
the industry to be exempted from the requirements, while others call
for the ELDT standards to be repealed entirely. At a time when the
number of crashes involving large trucks remains unacceptably high,
such actions would further jeopardize roadway safety.
Mr. Spear, does the American Trucking Associations oppose
exemptions to the ELDT rule?
Answer. Thank you for the question. ATA is generally opposed to
additional legislative ELDT exemptions. As I note on page 10 of my
written testimony, ``ATA has long supported the Entry Level Driver
Training (ELDT) rule,'' and ``ATA is discouraged by recent legislative
efforts that attempted to exempt certain individuals from this
standardized training curriculum.''
Questions from Hon. John James to Ian Jefferies, President and Chief
Executive Officer, Association of American Railroads
Question 1. Michigan is home to 3,600 miles of rail corridors. In
my district, the #1 manufacturing district in America, rail helps auto
plants move new automobiles across the country. I understand that a
strong rail network is critical for a strong manufacturing sector, my
district, the state of Michigan and our nation. Can you touch on what
Congress could--or should--be doing to further build upon the country's
rail network?
Answer. Safety is always first, but focusing on legislative and
regulatory changes that are carefully constructed, supported by
evidence, and performance-based will ensure the policymakers avoid
unintended negative consequences and help the rail network, and our
economy as a whole, remain strong.
First, policymakers should focus on performance-based, rather than
prescriptive regulations, to avoid inadvertently locking-in existing
technologies and processes and blocking innovations that could improve
safety and performance. Railroads have long invested in innovative
technological solutions to meet safety goals, but achieving maximum
benefit from that innovation, and thereby encouraging railroads to keep
investing in those technologies, requires railroads and policymakers to
work together.
The importance of allowing innovation to improve safety is
exemplified by hot bearing detectors, which monitor changes in the
temperature of wheel bearings. Currently, railroads use heat-sensing
wayside detectors at specific intervals along the track to identify
when a bearing is overheating, but through innovation, railroads have
developed onboard detectors that continually monitor wheel bearings in
real time. Regulations to lock in or mandate wayside detectors when a
safer, more-effective onboard detector is being developed and deployed
could actually impede safety improvements and not achieve railroads'
and policymakers' shared safety goals. In addition, basing policies on
science-based data and demonstrated safety improvements will ensure
that regulations achieve the highest safety standards.
Second, continuing to implement and oversee the Infrastructure
Investment and Jobs Act (IIJA) and improve permitting will ensure that
critical investments in the nation's infrastructure continue. Many of
the intermodal projects of national and regional significance funded
through IIJA could not possibly be carried out by state or local
governments alone. Moreover, new programs like the Grade Crossing
Elimination Program, are critical to improve safety for all communities
where railroads operate. Efforts to streamline the grant application
process and oversee program implementation will ensure that IIJA
resources have the largest possible impact on our national
infrastructure. In addition, efforts to improve the permitting process
should speed project delivery without short-changing important
environmental reviews. For example, Congress should focus on efforts to
set timelines and clarify the scope of state reviews under the Clean
Water Act and to extend One Federal Decision to cover National
Environmental Policy Act (NEPA) reviews done by all federal agencies.
These reforms will ensure that the significant investments made by
Congress through the IIJA will be as impactful as possible while
maintaining high environmental standards.
Third, policymakers should restore the Highway Trust Fund (HTF) to
a user-pays system, which historically funded investments in public
road and bridge infrastructure. Revenues into the HTF have failed to
keep pace with investment needs, requiring general fund transfers to
cover the shortfall. As a result, policymakers have been forced to
transfer a total of $275 billion of general taxpayer funds to repair
roads and bridges since 2008, including $118 billion in IIJA, which
will only cover the HTF shortfall through 2026. General fund transfers
to the HTF distort the freight transportation market in favor of the
commercial trucking industry and put other modes, including railroads,
at an unfair competitive disadvantage. This is especially true for the
railroad industry, as freight railroads invest well over $20 billion of
their own revenue every year to build, maintain, and pay for the
140,000-mile rail network. The lack of adequate revenue raised for the
HTF is partly the result of trucks weighing 80,000 pounds, which do not
come close to paying for the damage they cause to our public highway
system. Policymakers should also reject calls to increase federal truck
size and weight limits. Trucks' multi-billion-dollar annual
underpayment would become even greater if truck length and weight
limits were increased.
Finally, the rates and service offerings of freight railroads are
subject to the regulatory jurisdiction of the Surface Transportation
Board (STB) and maintaining the balanced regulatory framework created
by The Staggers Act is essential to supporting a strong rail network. A
return to unbalanced regulation would result in a sharp decline in the
efficiency and quality of rail service, leaving the entire supply chain
worse off.
Question 2. Mr. Jefferies, can you elaborate on new technologies
that have been implemented in the rail industry?--as it relates to
safety, communications, new locomotives.
Answer. Railroads have long applied technological solutions to
improve safety and enhance performance. Many of these technologies were
developed and/or tested at MxV Rail (formerly Transportation Technology
Center, Inc.), the world's premier railroad research and testing
facility in Pueblo, CO. Railroads often develop and deploy these
technologies across the industry without any government mandate or
beyond government mandates to continually improve safety. A few
examples of safety-enhancing technology include:
AskRail. Technology has made it easier than ever to share
information and resources in the rare event of a rail accident. AskRail
allows emergency responders to input the identification number of a
particular rail car and immediately determine the commodity contained
in that car, its hazard class, emergency response information
associated with the commodity, and other information. Emergency
responders in the East Palestine, OH, derailment properly used AskRail
to quickly obtain information on the railcars involved in that
accident. The rail industry recently announced an initiative to double
the number of first responders who have access to the tool by the end
of 2023.
Hot bearing detectors (HBDs). Railroads monitor wheel
bearing temperatures using heat-sensing detectors placed at intervals
along railroad tracks. These detectors notify the locomotive engineer
if it is necessary to stop a train due to an overheated bearing.
Following the derailment in East Palestine, OH, Class I railroads
recently announced plans to install approximately 1,000 new HBDs so
that HBD spacing on most key routes will be reduced to no more than 15
miles, down from the current average of 20 miles. Railroads also
recently agreed to a new industry standard that calls for stopping
trains and inspecting bearings whenever the temperature reading from an
HBD exceeds 170 degrees above ambient temperature. In addition,
railroads are continuing to invest in on-board detector technology,
which provides continuous, real-time monitoring as the train moves
rather than waiting to pass a wayside detector.
Locomotive sensors. Today's locomotives are outfitted
with hundreds of sensors that generate thousands of performance
readings per minute to maximize efficiency. These sensors allow
analysts to identify equipment needing maintenance. In addition,
advanced locomotive fuel management systems provide engineers with
real-time recommendations on how to maximize fuel efficiency and sense
when an engine is getting too hot or when oil is contaminated.
Positive train control (PTC). PTC has been fully deployed
on rail lines that carry passengers and high volumes of hazardous
materials. PTC monitors train location, speed, track signals, and many
other inputs to prevent certain train-to-train collisions and
derailments caused by human error. Beyond safety, PTC systems and their
foundational components have the potential to drive further
efficiencies and innovation.
Machine vision. Machine vision technology uses cameras
that collect thousands of images of trains per second as they pass by.
A series of algorithms then analyze the images to identify anomalies,
allowing railroads to resolve issues much more quickly and effectively
than they could with manual inspections alone.
Wheel impact load detectors. These detectors identify
wheels that are heavily pounding on the tracks and pull them from
service if they are reaching the end of their useful life.
Training simulators. Railroads use a combination of field
training, on-the-job training, and distance learning to create their
professional workforce, with some railroads owning dedicated technical
training centers. Simulators range from locomotive and power-operated
switches to grade crossing simulators and virtual welding. For example,
engineers can virtually learn train handling procedures on different
parts of track.
Ultrasound. As a train travels over track segments,
energy is transmitted through the track and into the ground below. This
energy can be measured as a series of sound waves, collectively called
an acoustic signature that differs depending on the health of the
track. Going farther down, ground-penetrating radar looks inside track
foundation to identify water damage or deterioration.
Drones and sonar. Railroads use drones to inspect bridges
and to take video and pictures of hard-to-reach areas that could not
easily be manually inspected. Railroads also frequently use drones
after weather events to look for washouts, downed trees, misaligned
track, and other conditions without risking the health and safety of
employees. Sonar sends sound waves that bounce off the bridge piers and
the ground surface below the water. Then, based on the nature of the
echo, railroads determine whether there are any concerns with the
stability of the bridge piers.
Some of these new technologies work together under the ``automated
track inspection'' (ATI) rubric to improve track inspection and allow
railroads to gather massive amounts of data, analyze it for patterns
and warning signs, and preventatively maintain their track. In some
instances, ATI testing of track has resulted in more than a 90 percent
reduction in the rate of unprotected main track defects found.
Unfortunately, the FRA is preventing railroads from making the best use
of this safety-enhancing technology.
Question 3. Given the recent East Palestine toxic fire situation,
Michigan's waters and Great Lakes are top of mind. Can you speak to the
safety and environmental protocols you have worked to put in place near
waterways, especially in the Great Lakes region to prevent a similar
situation from occurring in Michigan.
Answer. Safety is the foundation of everything the railroads do.
Families deserve to feel safe within their communities, and railroads
are steadfastly committed to taking solutions-oriented steps to prevent
accidents from occurring. While 99.9% of all hazardous materials
shipments reach their destination without incident, the less than .1%
have the potential to dramatically impact communities, as highlighted
by recent events in East Palestine, OH.
On Wednesday, March, 8, AAR announced initials steps the industry
was taking to reach zero accidents:
Installing 1,000 new wayside detectors with an average
spacing of 15 miles along most routes.
Setting a new action threshold to stop trains and inspect
bearings when temperatures exceed 170 degrees above ambient
temperature.
Expanding the use of trending analysis to reveal bearing
problems before a temperature threshold is reached.
Joining FRA's voluntary Close Call Reporting System
(C3RS) to supplement Class I's own programs for confidential reporting
of safety issues.
Training 20,000 first responders in local communities
across the country on accident prevention, response, and mitigation,
and training 2,000 first responders at the Security & Emergency
Response Training Center (SERTC) in Colorado.
Expanding the use of AskRail by first responders through
targeted outreach to emergency communication centers and state fire
associations.
Accelerating the work of the Tank Car Committee to
investigate the use of heat-resistant gaskets for tanks transporting
flammable liquid.
These are just the first steps that railroads will take to improve
the safety of the entire network and restore confidence that nothing is
more important to the railroads than the safety of their employees,
their customers, and the communities in which they operate.
Data from the Federal Railroad Administration confirm that rail
safety has improved substantially over the years. Much of this
improvement has been achieved through significant and consistent
investments back into the rail networks. From 1980 to 2022, freight
railroads spent more than $780 billion of their own funds--more than 40
cents out of every revenue dollar--on capital expenditures and
maintenance expenses related to locomotives, freight cars, tracks,
bridges, tunnels and other infrastructure and equipment to improve
safety. Railroads will continue to make these investments going
forward.
Railroads want all their shipments to travel safely, and the vast
majority do, but they have consistently taken concrete steps dedicated
specifically to making hazmat transportation safer and hazmat accident
response and mitigation more effective.
For example, when an accident involving hazmat occurs, railroads
follow strict protocols to protect nearby communities and waterways.
They work closely with the Environmental Protection Agency (EPA), the
National Transportation Safety Board (NTSB), relevant state and local
authorities, and outside experts to contain the situation as quickly as
possible; protect the health and safety of nearby residents and the
environment; and remediate impacts. A variety of laws and their
accompanying regulations give the EPA and other agencies a
comprehensive framework to ensure that railroad hazmat spills are
properly addressed.
Railroads provide hazmat training to thousands of emergency
responders each year to ensure local agencies have the information and
training to prevent, respond to, and mitigate any rail accident.
Railroads also provide thorough information to emergency response
agencies on hazardous materials moving through their communities and
equip train dispatchers and crews with information about hazmat on
individual trains as well as contact lists for local emergency
responders along a train's route. Railroads also provide hazmat
awareness training to all employees who are involved in hazmat
transportation. Rail employees responsible for emergency hazmat
response efforts receive far more in-depth training. Railroads also
have hazmat response contractors and environmental consultants on call
24/7.
As seen in East Palestine, railroads provide services like lodging,
food, and environmental testing to those displaced by rail hazmat
accidents and establish assistance centers and claims teams to assess
and meet the needs of displaced community members. Railroads also
reimburse local, state, and federal authorities for the costs
associated with their response and cleanup efforts and will stay until
the job is done.
Question from Hon. Eleanor Holmes Norton to Ian Jefferies, President
and Chief Executive Officer, Association of American Railroads
Question 1. It is important to ensure that residential communities
are not negatively impacted by train noise and vibrations. Last
Congress, I introduced the Train Noise and Vibrations Reduction Act of
2022 (H.R. 8338), which would direct the Department of Transportation
to submit a report containing recommendations to reduce train noise and
vibrations near homes.
What additional steps does the industry plan to take to reduce or
mitigate train noise and vibrations near homes?
Answer. Railroads know that noise and vibrations can raise concerns
in impacted communities. Railroads try to be good neighbors at all
times, seek to minimize negative community impacts in all aspects of
their operations, and maintain open communication with the communities
in which they operate. However, as communities near rail lines and rail
facilities expand, and as rail traffic patterns change, new challenges
related to noise and other community impacts arise. Railroads are
committed to working cooperatively with local officials and other
stakeholders to address these challenges as effectively as possible.
Questions from Hon. Donald M. Payne, Jr., to Ian Jefferies, President
and Chief Executive Officer, Association of American Railroads
Question 1. Your testimony states that you've increased employment
by nearly 10 percent and Mr. Regan's testimony states that the
railroads cut employment by nearly one-third. The Surface
Transportation Board Chair recently said that between April and
September of 2022, the four big railroads added 420 total train and
engine employees--an increase of less than 1 percent. While the
railroads hired many more, almost the same number quit the railroad out
of frustration.
So, are you increasing the number of employees or are there less
employees? Taking attrition into consideration, will you be increasing
the number of railroad workers?
Answer. The Surface Transportation Board collects a variety of data
from Class I freight railroads, including the number of all rail
employees in six job classification groups: executive, officials and
staff assistants, professional and administrative, maintenance of way
and structures, maintenance of equipment and stores, transportation
other than train and engine, and transportation train and engine. These
filings are prepared in accordance with STB regulations to ensure
consistency among railroads, and data are based on actual payroll data.
They are intended to include every person in the service of the
reporting carrier and subject to its continuing authority. As such,
they are net of attrition. The rail figures capture employment by job
classification rather than union membership or benefit eligibility to
ensure that those in unique circumstances are accurately counted.
Based on the most recent of this STB data, Class I train and engine
(T&E) employment in January 2023 was 50,313, up 9.9 percent (4,546
employees) over January 2022. Total Class I employment in January 2023
was 119,245, up 6.7 percent (7,491 employees) over January 2022.
The number of rail employees tends to ebb and flow based on current
and expected future rail traffic levels and other factors. Railroads
are confident they will continue successfully recruiting the next
generation of railroad workers to meet the nation's rail freight
demand. Our employees deserve our thanks and appreciation for their
sustained commitment to moving America's freight 24 hours a day, 365
days a year and doing so at the highest level of safety. Without them,
our industry would not exist.
Question 2. Some have expressed concern that the Class I railroads'
debt and associated annual interest costs have been increasing. Is this
true and are you concerned that these increasing debt costs could
impact the railroads' long-term viability?
Answer. An in-depth examination of the financial condition of
individual railroads (including the characteristics of their debt,
associated interest costs, and related financial indicators) is beyond
the scope of this response. However, for the Class I freight rail
industry, debt currently does not appear to be a major concern.
The table below shows inflation-adjusted annual interest charges,
debt, operating revenue, and net income for Class I railroads combined
from 2001 to 2021 (the most recent year for which data are available).
Debt has been somewhat higher in recent years compared to the past, but
annual interest charges have been comparable to what they've been for a
decade and materially lower than historical levels.
Interest charges as a percentage of debt in 2021 was 3.9 percent,
the lowest it's been in the period studied. Interest charges as a
percentage of operating revenue in 2021 was 1.5 percent, equal to its
annual average from 2010-2021. Interest charges as a percentage of net
income in 2021 was just 5.0 percent, easily the lowest for any year in
the period studied.
U.S. Class I Freight Railroad Interest and Debt
--------------------------------------------------------------------------------------------------------------------------------------------------------
(millions of 2021 dollars) Interest Charges as % of
------------------------------------------------------------------------------------
Year Interest Operating Operating Net
Charges Debt Revenue Net Income Debt Revenue Income
--------------------------------------------------------------------------------------------------------------------------------------------------------
2001............................................................... $1,709 $22,311 $51,526 $4,083 7.7% 3.3% 41.9%
2002............................................................... $1,672 $20,842 $51,838 $4,698 8.0% 3.2% 35.6%
2003............................................................... $1,479 $20,873 $52,722 $3,866 7.1% 2.8% 38.2%
2004............................................................... $1,545 $22,386 $56,779 $4,018 6.9% 2.7% 38.5%
2005............................................................... $1,643 $21,508 $62,662 $6,680 7.6% 2.6% 24.6%
2006............................................................... $1,516 $21,483 $68,739 $8,544 7.1% 2.2% 17.7%
2007............................................................... $1,509 $21,527 $70,072 $8,723 7.0% 2.2% 17.3%
2008............................................................... $1,393 $21,254 $77,118 $10,202 6.6% 1.8% 13.7%
2009............................................................... $1,442 $22,122 $59,869 $8,036 6.5% 2.4% 17.9%
2010............................................................... $1,538 $21,173 $71,913 $11,254 7.3% 2.1% 13.7%
2011............................................................... $1,358 $19,496 $81,336 $13,178 7.0% 1.7% 10.3%
2012............................................................... $1,175 $20,205 $83,092 $14,130 5.8% 1.4% 8.3%
2013............................................................... $1,140 $20,987 $85,152 $15,654 5.4% 1.3% 7.3%
2014............................................................... $939 $20,914 $89,078 $16,521 4.5% 1.1% 5.7%
2015............................................................... $1,056 $23,468 $81,438 $16,434 4.5% 1.3% 6.4%
2016............................................................... $1,121 $23,720 $73,943 $14,845 4.7% 1.5% 7.6%
2017............................................................... $1,140 $23,117 $77,238 $15,882 4.9% 1.5% 7.2%
2018............................................................... $1,185 $30,026 $82,084 $22,138 3.9% 1.4% 5.4%
2019............................................................... $1,329 $31,170 $78,651 $21,799 4.3% 1.7% 6.1%
2020............................................................... $1,214 $29,729 $69,016 $19,070 4.1% 1.8% 6.4%
2021............................................................... $1,124 $28,786 $74,331 $22,492 3.9% 1.5% 5.0%
--------------------------------------------------------------------------------------------------------------------------------------------------------
Interest charges include interest on funded and unfunded debt, plus contingent interest. Debt includes funded unmatured, equipment obligations,
capitalized leases, accounts payable to affiliates, and long-term debt due within one year. Figures are for Class I railroads. Source: AAR compilation
from railroad R-1 reports to STB.
Question 3. According to the Bureau of Transportation Statistics,
freight volumes are going up but freight railroad volumes are declining
as a percentage of overall freight. Do the Class I railroads have plans
to increase their market share?
Answer. Freight railroads are invested in continuing to grow, help
their customers prosper, and make our economy flourish. Today's U.S.
freight transportation market is intensely competitive. Railroads are
consistently working to increase productivity, keep customer rates low,
invest in their networks, and improve service for their customers.
Furthering the industry's competitiveness takes many forms, including:
Keeping a focus on safety. The past decade has been the
safest in rail history, and railroads continue to work diligently, in
cooperation with policymakers, their employees, suppliers, and
customers, to identify new technologies, operational enhancements,
trainings, and other ways to further improve their safety record.
Recognizing that capacity is key. Railroads have invested
more than $780 billion on capital expenditures and maintenance on their
networks since 1980 and well over $20 billion annually in recent years.
These extensive investments will ensure our nation's freight rail
infrastructure remains world-class and that adequate freight rail
capacity exists to meet America's current and future freight
transportation needs.
Focusing on customer service. Railroads know their
customers face intensely competitive global markets that increasingly
demand faster, more reliable, and more cost-effective service. In
response, railroads are continually launching new customer service
initiatives and working together with rail suppliers, trucking
companies, and other businesses to improve their service offerings.
Enhancing sustainability. Freight rail is well ahead of
other modes of transportation when it comes to limiting greenhouse gas
emissions, increasing fuel efficiency, and reducing its carbon
footprint. Today's railroads continue to leverage technology and
modernize their operations to meet tomorrow's challenges, including
improvements that increase efficiency and benefit the environment.
Advocating for sound public policy. The rail industry has
identified several key policies that are essential for maintaining and
enhancing the safe, reliable service they provide to their customers,
including maintaining the existing balanced regulatory structure
covering rail rates and service; replacing the outdated regulatory
framework for the development and incorporation of emerging
technologies with one that fosters innovation while continuing to
protect the public; maintaining regulatory modal equity; ameliorating
other modal inequities related to infrastructure financing; and
undertaking more rail-related public-private partnerships to help
unlock key public benefits.
Question 4. After the severe service problems of 2022, most of the
railroads publicly stated plans to hire additional people but lately
there have been reports that the railroads are scaling back plans to
increase workforce. What are the freight railroads' plans to hire
additional people in 2023? Will the overall number of employees
increase, taking attrition into account?
Answer. Individual railroads differ in terms of their hiring needs
and intentions. It is clear, though, that a shortage of workers has, in
some cases, hampered railroads' ability to provide the level of service
they expect and that their customers deserve. Railroads are committed
to continuing to recruit and retain the next generation of railroad
workers to meet the nation's freight rail demand.
It is also important to note that railroads are not immune to
economic forces. As railroads strive to meet the transportation needs
of our nation in the years ahead, they will continue to invest,
innovate, and evolve. They will also continue to review employment
policies to build more resilience into the system to better ride
economic ups and downs. Railroad employees deserve thanks and
appreciation for their sustained commitment to moving America's freight
24/365 and doing so at the highest level of safety. Without them, the
railroad industry would not exist or be able to meet the demands of the
nation's economy.
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Ian Jefferies,
President and Chief Executive Officer, Association of American
Railroads
Question 1. Today, products are reaching American shores on time
more often. However, companies are having trouble moving goods due to
limited freight rail capacity. We just witnessed a showdown between
rail workers and their employers at the beginning of December. It is
safe to say we still have a lot of work to do in ensuring workers are
adequately taken care of. Mid-career employees in the railroad industry
have walked away from formerly good jobs and secure retirement due to
deteriorating work conditions.
Question 1.a. Do you believe that a lack of workers is one of the
key factors in the supply chain issue we see before us today?
Answer. Railroads play a major role in extremely complex global
supply chains, working in coordination with steamship lines, truckers,
ports, drayage providers, and owners of chassis, shipping containers,
and warehouses, as well as manufacturers, wholesalers, and retailers of
goods. To ensure freight is delivered safely, efficiently, and when
expected, every stakeholder must do their part to maintain a consistent
flow of freight and avoid bottlenecks. The vast majority of the time,
railroads and other supply chain participants do just that.
In addition, railroad employees tend to stay in railroad jobs far
longer than other industries. In 2022, the average tenure at a railroad
ranged from 19 to 13 years depending on the carrier. By comparison, the
average tenure in most other industries is just 3.7 years, and the
average tenure in transportation and warehousing industry alone is
under four years. The idea that railroaders are leaving the industry en
masse mid-career is simply not true.
Over the past two years, railroads, along with virtually every
other industry, have found that attracting and retaining enough
employees to meet their needs has been a major challenge. The pandemic
turned labor markets upside down, and railroads were not immune. When
demand for rail service collapsed, railroads temporarily furloughed
workers, a common method of managing changes in demand in the past.
However, as demand surged faster than predicted fewer furloughed
workers than anticipated chose to return to the industry for a variety
of reasons. We now know that furlough policies must be carefully
reviewed to build more resiliency into the system to better ride
economic ups and downs.
To this day, competition for workers remains fierce. Even as
interest rates continue to rise, labor participation is high and hiring
remains resilient. In February 2023, the national unemployment rate was
3.6 percent, just above the historic lows seen in January 2023. In many
key railroad states, the unemployment rate is even lower. The extremely
tight labor market means railroads' single-biggest service-related
challenge is finding and keeping employees. The good news is railroads
are continuing to hire and train new employees and seeing our
employment numbers grow. Railroads are working extremely hard to fill
available openings through hiring bonuses, refer-a-friend payments, and
other incentives for current employees like vacation buybacks and
incentive payments to move to high-demand regions of the network
Railroads are making substantial progress. The number of ``train
and engine'' employees on Class I railroads--the men and women in the
locomotive cabs operating trains--was the highest in January 2023 since
March 2020. Individual railroads have hundreds of people in their
training pipelines and are confident that workforce issues will become
increasingly less troublesome in the months ahead. Moving forward from
service-related concerns will depend in part on the industry
appropriately staffing railroads with a well-trained and motivated
workforce.
Question 1.b. Seeing that railroads slashed roughly 30% of the
workforce prior to Covid, it's clear that this lack of personnel is one
of the key reasons why we are where we are today. Is there a plan in
place that would revive the workforce and effectively improve working
conditions for workers? How quickly can we expect to see results?
Answer. The industry and its employees take great pride in the work
that they do to move the nation's freight and support the U.S. economy.
Rail jobs are, and always have been, good jobs. The historic agreements
reached in the last bargaining round will make railroad jobs even more
competitive. These agreements contain a 24 percent wage increase, the
largest compensation increase seen in the industry in approximately 50
years. They also maintain the railroads' platinum-level healthcare
plans and provide additional paid time off for all represented rail
workers. Separately, agreements with maintenance-of-way employees
settle longstanding union concerns regarding travel expenses--their
stated top priority from the onset of the round. Equally important are
provisions in the agreement to create a more predictable work cadence
for T&E employees. In fact, by the BLET's estimation, these provisions
could result in up to 90 additional scheduled days off per year.
The agreements also established a process and timeline for the
railroads to work directly with the operating craft unions to make
additional work rules changes this year that will enhance
predictability and quality of life for those employees who currently
have the least predictable schedules. Those negotiations are actively
underway at the local level. To date, each of the Class I railroads has
reached agreements for paid sick leave with several of their individual
unions. The Class I railroads have committed to seeing these
negotiations through and look forward to working with the operating
craft unions to finish the job.
Question from Hon. Henry C. ``Hank'' Johnson, Jr., to Jeff Firth, Vice
President, Hamilton Construction Company, on behalf of the Associated
General Contractors of America
Question 1. We have seen extreme weather events--including
wildfires, hurricanes, and severe flooding and storms--that have
exacerbated pandemic-related challenges and the functioning of the
supply chain. In Georgia heat waves hit relentlessly; the city of Macon
reached 105 degrees in June of 2022, which is the highest temperature
ever observed that early in the year.
As a leader of a major construction company, how has climate change
aggravated the current supply chain in relation to how your company
operates, and how have you seen it affect other companies in your
sector?
Answer. There are a lot of factors and events--whether it is a
cargo ship stuck in the Suez Canal, increasing fuel prices due to world
events, or extreme weather events like you mention--that can cause
unexpected supply chain disruptions and lead to material price
volatility.
For example, the extreme freeze that hit Texas in mid-February of
2021 damaged or completely shut down all of the plants that supply the
raw materials for all construction plastics. In addition, the freeze
burst thousands of polyvinyl chloride (PVC) water pipes, thereby adding
to demand.
As a result of the supply chain disruptions, like the one in Texas,
many infrastructure projects across the country have either been
delayed or face the risk of significant delay or a reduction in scope.
State DOTs have reported higher than expected bids on projects and as a
result have scaled back on the number of projects which is why we have
not been seeing an increase in projects as was expected.
AGC believes that a coordinated, national strategy is necessary to
build a more resilient future for the nation. That is why at AGC, we
have undertaken several initiatives identified by various member-led
task forces to identify the immediate and direct impacts of government
climate policy on construction markets and other opportunities for
construction firms.
The task forces shared their findings and identified ways to
partner with the government on this important issue in the future
including preparations for electric vehicles, efficiency/traffic flow
retrofits, and addition of climate resilience work as part of projects
under consideration.
We believe that we need to rebuild the nation's transportation
system to be resilient to extreme weather events--however, in doing so,
we must ensure that well-intentioned policies do not unnecessarily
challenge our meeting that objective. At the end of the day, if we want
a greener future, we have to build it.
Question from Hon. John James to Roger Guenther, Executive Director,
Port Houston
Question 1. Mr. Guenther, I commend you for what you do. Our ports
are so important and touch every facet of our way of life. Post COVID,
what vulnerabilities remain in our supply chain and what strategy
should our nation take to address these issues?
Answer. A response was not received at the time of publication.
Questions from Hon. Eric A. ``Rick'' Crawford to Greg Regan, President,
Transportation Trades Department, AFL-CIO
Question 1. Mr. Regan: During the hearing, you said, ``The trucking
industry has complained about so-called workforce shortages, but the
truth is they have slashed wages and benefits and made working
conditions so bad that workers who would otherwise be interested in
driving are simply looking elsewhere.''
Question 1.a. Please provide the data supporting your position that
the trucking industry has ``slashed wages''
Answer. A response was not received at the time of publication.
Question 1.b. Please provide the data that the trucking industry
has done the same for benefits
Answer. A response was not received at the time of publication.
Question 1.c. Please provide the data supporting your assertion
that ``workers who would otherwise be interested in driving are simply
looking elsewhere''
Answer. A response was not received at the time of publication.
Question 2. Truck drivers make good salaries, with truckload
drivers earning a median amount of $69,687 per year plus benefits,
according to the American Trucking Associations industry survey for
2021.\1\ This is an 18 percent increase from 2019.\2\
---------------------------------------------------------------------------
\1\ 2022 ATA Driver Compensation Study Executive Summary, June 30,
2022. Available online at: https://ata.msgfocus.com/files/
amf_highroad_solution/project_2358/ATA_2022_Driver_
Compensation_Study_-_Press_Executive_Summary.pdf (accessed February 7,
2023).
\2\ Id.
---------------------------------------------------------------------------
Question 2.a. Do you disagree with these data?
Answer. A response was not received at the time of publication.
Question 2.b. Additionally, recent data from the Bureau of Labor
Statistics on weekly earnings in the long-haul trucking sector show
that average earnings are almost $1,200 per week or over $62,000 when
annualized.\3\ The trend line from January 2020 shows significant
increases. How do you square these data with your assertion that the
trucking industry has slashed wages?
---------------------------------------------------------------------------
\3\ Employment, Hours, and Earnings from the Current Employment
Statistics survey (National), Average weekly earnings of production and
nonsupervisory employees, general freight trucking, long-distance tl,
seasonally adjusted, U.S. Department of Labor, Bureau of Labor
Statistics, September 2022.
---------------------------------------------------------------------------
Answer. A response was not received at the time of publication.
Questions from Hon. Henry C. ``Hank'' Johnson, Jr., to Greg Regan,
President, Transportation Trades Department, AFL-CIO
Question 1. We hear my friends on the other side of the aisle say
they are committed to remedying the supply chain crisis. However, upon
President Biden's inauguration, we saw Republicans on the Senate side
hold up key nominations to the President's administration. Nominations
that, if not for partisan games, could have been helping with the
supply chain issues.
Question 1.a. What effect would you say that holds on DOT nominees
had and continue to have on the supply chain?
Answer. Partisan obstruction of DOT nominees isn't just political
gamesmanship--it has crippled our ability to fix the broken supply
chain. While railroads, trucking firms, and ports struggled with
backlogs, delays, and worker shortages, Republicans in Congress stalled
leadership confirmations for an average of 121 days--twice the
historical norm. This wasn't an accident; it was a deliberate effort to
undermine the administration's ability to enforce accountability and
implement solutions.
Leadership Vacuums Meant Delayed Action: Without
confirmed DOT leaders, federal agencies couldn't move swiftly to cut
red tape, distribute funds, and hold bad actors accountable.
Corporate Profiteering Thrived in Chaos: Railroads and
shipping companies used this dysfunction as cover to hike fees,
shortchange workers, and push reckless cost-cutting policies like
Precision Scheduled Railroading (PSR).
Question 1.b. In your testimony, you stated ``Many of the supply
chain challenges are due to harmful employer practices driven not to
increase efficiency or deliver better service but purely out of
greed.'' Can you speak further into these practices?
Answer. America's rail system is a case study in what happens when
Wall Street greed is allowed to run unchecked. Class I railroads have
gutted their workforce, slashed maintenance time, and squeezed workers
all in the name of shareholder profits. They cut 41% of their
mechanical workforce since 2015, stretched trains to 2-3 miles long,
and forced inspectors to rush safety checks down to just one minute per
railcar.
Safety Is an Afterthought to Profits: These reckless
cost-cutting measures led directly to the East Palestine disaster--a
preventable catastrophe caused by deferred maintenance and impossible
workloads.
Rail Workers Are Speaking Out, But CEOs Aren't Listening:
Trained carmen are being replaced by underqualified workers, and
inspectors who flag unsafe conditions are pressured to stay silent or
face retaliation.
PSR Is a Scam, Not Efficiency: PSR was sold as a way to
``streamline'' operations, but in reality, it's a Wall Street scheme
that gutted the workforce, overburdened remaining employees, and led to
more breakdowns, delays, and derailments.
Question 1.c. We see a lack of minorities, including women and
people of color in the commercial trucking industry. Could these
harmful employer practices you speak of be what's keeping so many
minorities out? How can working conditions be strengthened to improve
the workforce moving forward?
Answer. The trucking industry doesn't have a driver shortage--it
has a shortage of good jobs. Instead of offering decent wages,
predictable schedules, and basic benefits, major carriers rely on a
churn-and-burn model that exploits workers and repels women and people
of color.
Systemic Discrimination in Pay & Treatment: Black and
Latino drivers are routinely pushed into lower-paying jobs, like port
drayage, while white drivers dominate the highest-earning long-haul
routes.
The Solution Is Simple-Treat Drivers Like the Essential
Workers They Are: We don't need gimmicks. We need policies that
guarantee fair pay, real benefits, and enforceable labor protections.
Questions from Hon. Donald M. Payne, Jr., to Greg Regan, President,
Transportation Trades Department, AFL-CIO
Question 1. After years of cutting their workforce, the Class I
railroads say they plan to hire additional frontline workers. At the
same time, some Class I railroads have reduced the duration of
conductor training, including one Class I railroad that, according to
FRA data, had three conductors with less than a year of service (newly
trained conductors) suffer amputations in separate occurrences in 2021.
Do your members feel they are being sufficiently trained? Do you think
this will have a safety impact?
Answer. Recent deaths and serious injuries prove that railroads are
cutting corners on training to save money. New conductors are thrown
into the field with almost no real instruction, and some are even being
``trained'' by workers who themselves have less than a year of
experience. This is dangerous, reckless, and entirely avoidable.
Three Preventable Amputations in 2021: These weren't
accidents--they were the direct result of railroads pushing
inexperienced workers into high-risk roles without proper training.
FRA's 2023 Safety Bulletin Is a Wake-Up Call: The FRA
explicitly warned railroads in August 2023 that rushed, low-quality
training programs are endangering lives--but so far, rail CEOs have
done nothing to change course.
Question 2. On February 3, 2023, a Norfolk Southern train measuring
9,309 feet, and 17,977 tons derailed in East Palestine, Ohio. The
train, carrying vinyl chloride and other hazardous materials, derailed
50 cars resulting in fire and smoke that persisted for days, evacuation
of nearby communities in Ohio and Pennsylvania, and air and water
quality monitoring. To prevent catastrophic failure and rupture,
Norfolk Southern manually released product from several cars carrying
vinyl chloride on February 6.
National Transportation Safety Board Member Graham stated at a
press conference that investigators obtained two videos that
preliminarily show indications of mechanical issues on one of the rail
car axles. He also stated that the train's three-person operating crew
received an alarm from a wayside defect detector indicating a
mechanical issue shortly before derailment, followed by initiation of
an emergency brake application.
TTD's affiliate unions have told this committee that the Class I
railroads have cut their mechanical workforces sharply, reduced the
amount of time mechanics inspect cars, pressured workers not to remove
cars from service for repairs, and replaced qualified inspectors with
workers without specialized training. Are you concerned that such
actions may have contributed to an accident such as the February 3
derailment in East Palestine, Ohio?
Answer. This disaster wasn't an anomaly--it was the inevitable
outcome of railroads prioritizing Wall Street over public safety. Class
I railroads have cut 28% of staff (2011-2021) while stretching train
lengths to three miles or more. Mechanical workforce cuts left 1,000
non-compliant locomotives at BNSF alone, and untrained contractors were
used instead of skilled inspectors. Railroad executives knew the risks,
but they gambled with public safety anyway.
They Cut Safety First, and the Public Paid the Price:
Railroads eliminated crucial inspection jobs, forcing remaining workers
to rush through safety checks--or risk being fired.
FRA & DOT Have the Evidence--Now Congress Must Act:
Investigations confirm that railroad executives systematically delayed
repairs, ignored maintenance warnings, and pressured inspectors to cut
corners.
Question 3. According to the Surface Transportation Board, during
the last two and a half years, the Class Is have returned nearly $60
billion to shareholders in stock buy backs and dividends. That is more
than 12 times what they saved in payroll by cutting 13,000 employees
over the same time period. How would having additional employees help
the railroads address supply chain demands?
Answer. Class I railroads funneled $60 billion to shareholders in
just two years while cutting 13,000 workers. Let's be clear--this money
could have gone toward safety improvements, better wages, and
infrastructure upgrades. Instead, it was pocketed by executives and
hedge funds.
Stock Buybacks Instead of Brake Upgrades: Instead of
investing in safer braking technology or fixing aging infrastructure,
railroads prioritized inflating their stock prices.
CEO Pay Skyrocketed While Rail Workers Were Laid Off:
Between 2015 and 2022, railroad CEO compensation rose by 150%, while
frontline workers' pay remained stagnant.
Question 4. Do Federal Railroad Administration regulations
governing track inspection prohibit the simultaneous use of autonomous
track inspection technology and visual track inspections?
Answer. Rail CEOs want autonomous inspection technology to replace
human inspectors--not to improve safety, but to cut jobs and maximize
profits. The FRA allows automated track inspections, but it still
requires qualified human inspectors to verify and act on the data. Yet,
railroads are lobbying to weaken even this basic requirement.
Loopholes Are Already Being Exploited: Some Class I
railroads are seeking waivers to reduce the frequency of human
inspections, despite clear evidence that automation alone is not
sufficient.
Deregulation Here Is a Death Sentence: Cutting human
oversight means more derailments, more deaths, and more public
disasters like East Palestine. Congress must act before it's too late.
* * *
Key Recommendations
Ban Precision Scheduled Railroading (PSR) metrics that
force safety compromises.
Mandate minimum staffing levels for mechanical and
training roles.
Expand whistleblower protections so workers can report
safety violations without retaliation.
Cap train lengths at safe, manageable limits--before the
next East Palestine happens.
Mandate real-time transparency on rail safety data--
because right now, railroads are hiding the truth.
The bottom line is simple: Wall Street shouldn't run our railroads.
We need real safety reforms now.
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