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28–285 PDF 2006

HIGHWAY CAPACITY AND FREIGHT

MOBILITY: THE CURRENT STATUS

AND FUTURE CHALLENGES

(109–70)

HEARING

BEFORE THE

SUBCOMMITTEE ON

HIGHWAYS, TRANSIT AND PIPELINES

OF THE

COMMITTEE ON

TRANSPORTATION AND

INFRASTRUCTURE

HOUSE OF REPRESENTATIVES

ONE HUNDRED NINTH CONGRESS

SECOND SESSION

MAY 10, 2006

Printed for the use of the

Committee on Transportation and Infrastructure

(
COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE

DON YOUNG, Alaska, Chairman

THOMAS E. PETRI, Wisconsin, Vice-Chair

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

WAYNE T. GILCHREST, Maryland

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

VERNON J. EHLERS, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

JIM GERLACH, Pennsylvania

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

CHARLES W. DENT, Pennsylvania

TED POE, Texas

DAVID G. REICHERT, Washington

CONNIE MACK, Florida

JOHN R. ‘RANDY’ KUHL, JR., New York

LUIS G. FORTUN ̃ O, Puerto Rico

LYNN A. WESTMORELAND, Georgia

CHARLES W. BOUSTANY, JR., Louisiana

JEAN SCHMIDT, Ohio

JAMES L. OBERSTAR, Minnesota

NICK J. RAHALL, II, West Virginia

PETER A. DEFAZIO, Oregon

JERRY F. COSTELLO, Illinois

ELEANOR HOLMES NORTON, District of

Columbia

JERROLD NADLER, New York

CORRINE BROWN, Florida

BOB FILNER, California

EDDIE BERNICE JOHNSON, Texas

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

LEONARD L. BOSWELL, Iowa

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JOHN T. SALAZAR, Colorado

JOHN BARROW, Georgia

(II)
SUBCOMMITTEE ON HIGHWAYS, TRANSIT AND PIPELINES

THOMAS E. PETRI, Wisconsin, Chairman

SHERWOOD L. BOEHLERT, New York

HOWARD COBLE, North Carolina

JOHN J. DUNCAN, JR., Tennessee

JOHN L. MICA, Florida

PETER HOEKSTRA, Michigan

SPENCER BACHUS, Alabama

STEVEN C. LATOURETTE, Ohio

SUE W. KELLY, New York

RICHARD H. BAKER, Louisiana

ROBERT W. NEY, Ohio

FRANK A. LOBIONDO, New Jersey

JERRY MORAN, Kansas

GARY G. MILLER, California, Vice-Chair

ROBIN HAYES, North Carolina

ROB SIMMONS, Connecticut

HENRY E. BROWN, JR., South Carolina

TIMOTHY V. JOHNSON, Illinois

TODD RUSSELL PLATTS, Pennsylvania

SAM GRAVES, Missouri

MARK R. KENNEDY, Minnesota

BILL SHUSTER, Pennsylvania

JOHN BOOZMAN, Arkansas

MARIO DIAZ-BALART, Florida

JON C. PORTER, Nevada

TOM OSBORNE, Nebraska

KENNY MARCHANT, Texas

MICHAEL E. SODREL, Indiana

DAVID G. REICHERT, Washington

JEAN SCHMIDT, Ohio

DON YOUNG, Alaska

(Ex Officio)

PETER A. DEFAZIO, Oregon

NICK J. RAHALL II, West Virginia

JERROLD NADLER, New York

GENE TAYLOR, Mississippi

JUANITA MILLENDER-MCDONALD,

California

ELIJAH E. CUMMINGS, Maryland

EARL BLUMENAUER, Oregon

ELLEN O. TAUSCHER, California

BILL PASCRELL, JR., New Jersey

TIM HOLDEN, Pennsylvania

BRIAN BAIRD, Washington

SHELLEY BERKLEY, Nevada

JIM MATHESON, Utah

MICHAEL M. HONDA, California

RICK LARSEN, Washington

MICHAEL E. CAPUANO, Massachusetts

ANTHONY D. WEINER, New York

JULIA CARSON, Indiana

TIMOTHY H. BISHOP, New York

MICHAEL H. MICHAUD, Maine

LINCOLN DAVIS, Tennessee

BEN CHANDLER, Kentucky

BRIAN HIGGINS, New York

RUSS CARNAHAN, Missouri

ALLYSON Y. SCHWARTZ, Pennsylvania

JAMES L. OBERSTAR, Minnesota

(Ex Officio)

(III)

(V)

CONTENTS

TESTIMONY

Page

Grenzeback, Lance, Cambridge Systematics ......................................................... 24

Larkin, John, Managing Director, Stifel, Nicolaus and Company, Inc. .............. 24

Meyer, Michael, Professor, Georgia Technical University ................................... 24

Shane, Jeffrey, Under Secretary for Transportation Policy, U.S. Department

of Transportation ................................................................................................. 6

PREPARED STATEMENTS SUBMITTED BY MEMBERS OF CONGRESS

Carnahan, Hon. Russ, of Missouri ......................................................................... 36

Michaud, Hon. Michael H., of Maine ..................................................................... 68

Porter, Hon. Jon, of Nevada ................................................................................... 87

PREPARED STATEMENTS SUBMITTED BY WITNESSES

Grenzeback, Lance ................................................................................................... 37

Larkin, John ............................................................................................................. 49

Meyer, Michael ......................................................................................................... 58

Shane, Jeffrey .......................................................................................................... 88

SUBMISSION FOR THE RECORD

Michaud, Hon. Michael H., a Representative in Congress from Maine, executive summary, Study of Impacts Caused by Exempting Currently Nonexempt Maine Interstate Highways from Federal Truck Weight Limits,

June 2004 .............................................................................................................. 71

(1)

HIGHWAY CAPACITY AND FREIGHT MOBILITY:

THE CURRENT STATUS AND FUTURE CHALLENGES

Wednesday, May 10, 2006,

HOUSE OF REPRESENTATIVES, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE,SUBCOMMITTEE ON

HIGHWAYS, TRANSIT AND PIPELINES, WASHINGTON,

D.C.

The subcommittee met, pursuant to call, at 10:00 a.m., in room

2167, Rayburn House Office Building, Hon. Thomas E. Petri

[Chairman of the committee] presiding.

Mr. PETRI. Good morning. The Subcommittee hearing will come

to order.

I would like to welcome all of our members and witnesses to today’s hearing on Highway Capacity and Freight Mobility: The Current Status and Future Challenges.

Transport experts have expressed deep concern regarding the

freight capacity shortage on America’s highways. The last several

decades have witnessed steady growth in the demand for freight

transportation, but freight capacity, especially highway capacity, is

expanding too slowly to keep up with demand.

This hearing will be the first of a series of hearings examining

the imminent shortage of freight capacity on U.S. highways. The

first hearing will focus on the current status of the highway system

as it relates to freight mobility. Our witnesses today will present

a big-picture perspective to provide members with the understanding of the immediacy of the freight capacity shortage caused by expanding freight transportation needs versus the lack of transportation capacity. Also, the witnesses will provide a forecast of where

freight capacity is heading and what challenges are emerging.

The next hearings in this series will focus on more specific

issues, including congestion around port terminals and rail facilities, infrastructure funding challenges, and freight logistics.

The U.S. economy depends on its interconnected transportation

network to move various goods around the Country efficiently and

reliably. Over 19 billion tons of freight, valued at $13 trillion, was

carried over 4.4 trillion ton miles in our Country in 2002. Since

1980, the interstate highway lane miles have risen by 16 percent,

while vehicle miles traveled on these roads increased by 123 percent.

Trucks are more frequently used to haul virtually all commodities in the U.S. when compared to other modes of transportation.
2

About 70 percent of the total value of freight shipments in the U.S.

is hauled by trucks.

Freight congestion problems are most apparent at bottlenecks on

highways. Most bottlenecks are found on highways serving major

international freight gateways like the Ports of Los Angeles and

Long Beach, at major domestic freight hubs like Chicago, and in

major urban areas where transcontinental freight lanes intersect

congested urban freight routes. These bottlenecks accrue significant truck hours of delay totaling upward of 243 million hours annually. At a delay cost of $31.25 per hour, the direct user cost of

these bottlenecks is about $7.8 billion per year.

Last summer, our Committee passed the widely supported Safe,

Accountable, Flexible, Efficient Transportation Equity Act, a legacy

for users better known as SAFETEA-LU. In response to the freight

capacity concerns, we included in that legislation several programs

that are specifically designed to improve the movement of freight.

The bill provided $1.9 billion for the National Corridor Infrastructure Improvement Program; it provided $833 million for the

Coordinated Border Infrastructure program; it provided $1.8 billion

for a new program to fund projects of regional and national significance. The bill provided $100 million to fund the Commercial Vehicle Information Systems and Networks, pronounced CVISN, program.

SAFETEA-LU funds several research programs and studies designed to improve freight mobility, including a Freight Planning

Capacity Building Program, a National Cooperative Freight Transportation Research Program, and a Motor Carrier Efficiency Study.

We have two panels of witnesses before the Committee today.

The first panel includes Mr. Jeffrey Shane, Under Secretary of

Transportation Policy at the United States Department of Transportation. The second panel includes witnesses who are active in

transportation research and matters of freight mobility and highway capacity. That panel consists of Mr. Lance Grenzeback, Mr.

John Larkin, and Mr. Michael Meyer, Professor at the Georgia Institute of Technology.

I now yield to Mr. DeFazio’s sit-in, Mr. Pascrell, for any opening

statement he may choose to make.

Mr. PASCRELL. Thank you, Mr. Chairman. For quite a while we

have been talking about congestion on our Nation’s highways, and

we all agree something must be done and that the highways have

become our back roads. Fortunately, there is no quick fix here.

It is estimated that by 2020 New Jersey will have 1.4 million additional residents, 21 percent more jobs, and will double the

amount of freight moving into and out of the State. A total of 34

billion additional vehicle miles will be traveled.

We would like to increase highway capacity in some congested

areas. I am supportive of funding for highway construction funding;

however, increasing road capacity cannot be the only answer for

the State I live in, the State of New Jersey, or for the Nation. New

Jersey is the most densely populated State in America, approximately 1,100 people per square mile, leaving little room for physical expansion. We are in the process of even thinking about

macadaming our bathrooms pretty soon. New Jersey has more cars
3

per square mile than any other State. And it is all supposed to run

on an infrastructure conceived of over 100 years ago.

We cannot plan a strategy just to pave over what is left of New

Jersey. It is incredibly important to utilize what current roads and

transit systems we have in the most efficient manner possible. In

terms of increasing this efficiency, intelligent transportation systems are a critical part, I believe, of the equation. Improving operations and management performance for freight transportation on

our highways is critical to maintaining the health of our Nation’s

economy. The Nation’s economic engine is built on an efficient

highway system, a key component in our global competitiveness.

So I am eager, Mr. Chairman, to hear from our panel members

this morning on the ways they intend to work together to improve

our freight capacity, and look forward to a very interesting hearing.

Thank you, Mr. Chairman.

Mr. PETRI. Thank you.

Other opening statements? Mr. Duncan?

Mr. DUNCAN. Well, Mr. Chairman, very briefly, just let me thank

you calling this important hearing. And I agree with the things

that you have said and that Mr. Pascrell has said.

I happen to have the privilege to represent one of the most popular areas in the Country as far as people moving in, so the population is growing rapidly. We have two interstates that meet in our

district and a third that comes just outside the district, so our traffic problems are in some ways just becoming horrendous. So we

need to really look into this subject, maybe encourage more reliance on rail freight and other methods.

So I just think the timing of this hearing is very appropriate and

the subject matter is very, very important, and I thank you for calling this hearing. Thank you.

Mr. PETRI. Thank you.

Mr. Michaud.

Mr. MICHAUD. Thank you very much, Mr. Chairman. Mr. Chairman, I want to thank you, first of all, for recognizing me, and Mr.

Ranking Member, and thank you for holding this very important

hearing. I will keep my statement brief and ask that I might be

allowed to submit the rest of it along with supplemental material

for the record.

I want to bring this Committee’s attention to an important aspect of today’s hearing topic that is of great importance to my home

State of Maine. You heard from two previous speakers about the

density of their district. Maine is a very rural State, and I want

to address that issue important to Maine.

This Committee should consider this problem because bottlenecks in one State affects commerce everywhere in the Nation.

Currently, most of Maine’s interstate highways are subject to federally-mandated truck weight limits of 80,000 pounds. However,

Maine’s State limit is 100,000 pounds, and it can’t be lowered due

to the demand on Maine’s major industry, especially forest products and agriculture.

As a mill worker for over 28 years, I know it is crucially important that we move these heavy loads over our State. Unfortunately,

as a result of the mismatch between the Federal and State regulation, heavier trucks must be diverted off the interstate onto State
4

roads that pass through a number of Maine communities. This has

a negative impact on safety, the economy, and the system.

By contrast, allowing an exemption for the Federal weight regulation for Maine interstate would benefit tremendously. This

change is supported by every municipality in the State of Maine,

by their chamber of commerce, by safety groups, and by the entire

Maine delegation, Republicans and Democrats. It would greatly improve safety, eliminate more than three crashes every year, fatal

crashes in Maine, according to the federally mandated study. This

safety concern is very real.

Although I have been working on this exemption since I became

a member of Congress three years ago, the risks of current rules

were made tragically clear again just last week, when a truck

killed an elderly pedestrian in Bangor, Maine. The truck would

have never been on that street if not for the weight rules. The

truck should have been on the highway, where it belonged.

Exempting Maine from regulations would also help increase commerce and capacity in the entire system, allowing 6-axle, 100,000

pound trucks on the interstate would increase payloads by up to 44

percent over 5-axle, 800,000 pound trucks. Reducing the number of

trucks on the road would cut the amount of fuel used by approximately 6 percent and it would enhance trade between Canada and

the northeastern U.S. by eliminating the 200 mile truck weight gap

that exists on Maine’s interstate system.

In conclusion, Mr. Chairman, if we want to improve safety, decrease travel time, speed commerce, increase trade among our

States, and make our system more efficient, we must consider this

issue as part of any discussion for future of our highway system in

meeting the capacity crunch that we currently have in the State of

Maine. The Maine Department of Transportation had commissioned a study about a year ago that addressed a lot of the concerns about safety, about the travel of the interstate was increased

to 100,000 pounds, and actually the cost.

I know it is unusual, Mr. Chairman, but we do have several folks

from the State of Maine who traveled to Washington today to talk

to members of both sides of the aisle about this very important

issue. It is an issue that could save lives.

And in this room we see a lot of folks from the Maine Motor

Transport who are here today, as well as the Maine commissioner

of the Department of Transportation and his staff to help work

with the Federal Highway folks, as well as members of Congress,

to deal with this issue. So if I might, Mr. Chairman, if I might recognize and ask the members of the Maine Motor Transport and

Maine commissioner and his staff to please stand in the audience.

And that is not the whole population of the State of Maine.

[Laughter.]

Mr. MICHAUD. Pretty close, though.

So with that, Mr. Chairman, I yield back the balance of my time.

Mr. PETRI. Well, thank you, and we welcome our guests from

Maine, and the rest of the audience as well.

Mr. Mica, any——

Mr. MICA. Well, thank you, Mr. Chairman. I will just remark

briefly and thank you for holding this important hearing. And

whether you are from Maine, Florida, California, the Midwest, we
5

all face the same challenge right now. And whether we are looking

at highways, ports, airports, any of the infrastructure, rail infrastructure across the Country, we are facing a crunch. One of the

questions we are going to have to answer is how we finance all of

this, particularly our highway system and transit system. And as

we look at alternative energy sources, the very core basis of our financing of our trust fund, our aviation system, we see very significant issues.

I don’t have the answers. I am anxious to hear from those that

deal with the industry to come up with some creative solutions.

And I find most of those usually come from the private sector or

from people who deal in some of these key areas that make our

economy grow, like trucking, rail, aviation. . But it is critical that

we provide the infrastructure so that we can conduct the business

of this Country, which is business.

So, again, a very critical subject today, highway capacity and

freight mobility, on which we are so dependent but also, right now,

so handicapped. So I look forward to this hearing and the comments of these witnesses. Thank you.

Mr. PETRI. Thank you.

Mr. Higgins, any comments?

Mr. HIGGINS. No, thank you, Mr. Chairman.

Mr. PETRI. Mr. Miller.

Mr. MILLER. Thank you, Mr. Chairman. This is a very important

hearing for Southern California. I represent an area that services

basically the Ports of Long Beach and Los Angeles, and if you look

at the impact not only of truck traffic with the containers that

come through our region, but the rail traffic, on the freeways of 91,

60, 10, 5, 57 are incredibly impacted.

In some degree people from our region feel like we are subsidizing the rest of the Nation because we suffer the impact from the

import and export. In fact, about 25 percent of all the imports and

exports go through my district. Yet, we don’t feel that the adequate

dollars are coming to mitigate that impact. And it is going to get

worse the next 20 years; they are projecting impact to increase by

about 70 percent. I don’t know how we are going to deal with it.

If you listen to the news on any of our local stations about the

truck accidents that occur on the freeways, especially the 91, it is

probably the most impacted bottleneck we have in that region. And

if you look at the amount of transports coming from the harbors

through that area, trucks just stop, and that is not a good thing

to happen. When you have trucks and, you know, residential traffic

that we get going on and off the freeway, that creates a huge problem for our area.

So hearings like this, Mr. Chairman, are extremely important. If

you heard the level of frustration from individuals in my district,

they are sitting at what we call Alameda Corridor East, they are

sitting at at-grade crossings, not only commuter traffic, but the

trucks trying to deliver goods, sitting there watching trains go by.

We need to deal with these at-grade crossings. We need to deal

with the capacity on some of our freeways; restricted truck lanes,

additional lanes. Specifically the 91, we have to do something about

that. That has a huge impact. In delay with commuters alone, they
6

figure the cost is about $31.25 per hour per commuter trying to sit

on those freeways and trying to get back and forth to work.

So I look in some way to partnership with the Federal Government so we can alleviate the impact on our local highways and

freeways. But it is something that I appreciate that we continue to

talk about. The more we talk about it, the more expectations we

increase, I believe, on the part of the people in our area, but in government that we have to deal with the problems we are facing. And

as Mr. Mica said, it is not just the trucks, it is not just the rail,

but it is also the airports. We have a huge issue with our airports

in our local region, trying to get people in and out. The amount of

goods UPS and FedEx have hubs in our area.

So this is a good debate and I applaud you, Mr. Chairman, for

having it today. Thank you.

Mr. PETRI. Thank you.

Mr. DeFazio.

Mr. DEFAZIO. Thank you, Mr. Chairman. Please excuse my being

tardy; I had to deliver a speech. Thank you for holding this hearing. You know, recently, in the Rail Subcommittee, we held a hearing on our congested railroads, and this is the twin to that problem, the problem with our congested highways.

It is estimated that more than two billion gallons of fuel was

wasted last year due to congestion and traffic backups. Now, that

is a lot of fuel and that is a lot of money with the increasing price

of fuel. The number of hours lost to productivity was absolutely

huge, in addition.

So this is an investment that needs to be made, an investment

in America. It is something that can’t be exported in terms of jobs

when we build infrastructure to better move our people and our

goods.

And it is something that we must get ahead of. We have got the

congestion today, it is bad, but when you look at the projected 70

percent growth over the coming decades in the movement of

freight, it is going to be horrendous in the not too distant future

if we don’t get ahead of it. And the kinds of issues that will be

raised in these hearings and the kind of solutions that hopefully we

will put forward will serve America well for the future.

So, again, thank you for holding this hearing.

Mr. PETRI. Thank you.

Are there any other opening statements? If not, we will turn to

our first panel, which consists of Mr. Jeffrey Shane, Under Secretary of Transportation Policy at the U.S. Department of Transportation.

We have your opening statement. We look forward to your summary. Thank you.

TESTIMONY OF JEFFREY SHANE, UNDER SECRETARY FOR

TRANSPORTATION POLICY, U.S. DEPARTMENT OF TRANSPORTATION

Mr. SHANE. Thank you, Mr. Chairman. And let me add my voice

to all those who have thanked you for conducting this very important hearing; indeed, the whole series of hearings that I know you

are embarking upon. There is no any more important issue to the
7

economic vitality of America than our transportation system, and

these hearings will be a very important focus on that.

We are grateful to Congress for the tools that SAFETEA-LU included, specifically with reference to freight. We look forward to

seeing more of those added.

I bring you greetings, of course, from my boss, Secretary Mineta,

a former member of this body, who sends you all his warmest regards. I am here also representing Acting Federal Highway Administrator Rick Capka, and we want to discuss issues of highway capacity and freight mobility today. And, finally, it is a special pleasure to have Maine’s commissioner here and the delegation from

Maine. That is a special treat for all of us.

I don’t have to lecture this Subcommittee on the growth of our

economy recently. GDP increased by 46 percent between 1990 and

2003. More important for today’s purposes is the fact that in the

last 15 years U.S. foreign trade more than doubled. And if you take

a look at this first slide that is going to be put up, you will see that

projected volumes will be even greater by 2020, given current

growth rates.

Now, this slide, I should point out, is simply reference to the volume of trade coming through our ports. And if there was any need

to emphasize what Congressman Miller was talking about, that

large tower on the left represents the Ports of Los Angeles and

Long Beach. All of that trade ends up you know where, on our

highways and on our rail system. So despite the fact that this slide

is all about ports, it obviously portends a huge problem for us in

the movement of freight generally.

A growing economy and population generates a lot of freight

movement. And while continued economic growth is dependent on

a number of factors, a key factor, and one that we think hasn’t received sufficient attention, is the efficient and reliable operation of

our Nation’s freight transportation systems. Trucks are the predominant mode for freight movement. Trucks now carry 60 percent

of the volume and 70 percent of the value of the freight movement

in this country. The enormous gains and efficiency that we brought

about through trucking deregulation are seriously threatened today

by road congestion, the costs of which are borne by shippers and

manufacturers and operators, and ultimately, of course, by consumers.

DOT believes the congestion is not an insurmountable problem,

but solutions are going to require a far more economic approach to

capacity expansion and improved productivity of the existing highway infrastructure.

A critical tool in assessing overall system performance and scope

of the congestion problem is improved freight data. That is really

what I want to spend most of my time talking about this morning.

It is imperative that we provide timely and reliable data to transportation planners and investors so that scarce resources are allocated efficiently.

Freight movement is graphically displayed on the second slide, a

map that shows truck movements in 1998. The map is a product

of the Federal Highway Administration’s Freight Analysis Framework, or FAF. The FAF is the Department’s principal resource

today for understanding freight movements in the United States.
8

To run this analytic tool, commodity, origin, and destination data

are collected at the national and regional level. A key component

of data feed for the FAF maps is the Commodity Flow Survey. I

can’t emphasize enough how vital good data collection is to this analytical capability. The commodity tonnages are then converted to

truck payloads and, through modeling, are assigned to routes in

the freight transportation network. It is those truck assignments

that you see on this slide.

The FAF provides a tool not just for the Federal Highway Administration, but for the entire Department of Transportation, because it helps us predict future demand. For example, forecasting

freight flows, while taking into account economic variables, produced this year 2020 version of the map you just saw. As you can

see, the freight flows are quite considerably more voluminous.

And in this next slide, comparing freight volumes to available

highway capacity, you will see the congestion on our transportation

network as we project it in 2020, assuming, of course, that our

highway infrastructure remains static. And none of us hopes that

it will remain static.

The FAF also lets us consider ‘‘what if’’ scenarios of proposed capacity expansion, shifts in modal choice, or in the case of disasters,

an outright loss in capacity. Equally important to our national and

regional analysis, State and local transportation officials can use

FAF data with local freight data to improve project planning at

that level. The Federal Highway Administration is currently working with numerous State DOTs to refine FAF with additional data

to make it more useful to planners at all levels.

An exciting new effort within the Federal Highway Administration’s Office of Operations uses actual trucks on the road to measure the performance of the Interstate System. This effort, reflected

in the slide that is up now, provides a way to monitor the velocity

and the reliability of truck movements on the Interstate System.

Five freight-significant corridors were initially selected to prototype

this effort. Data from those five corridors are being collected from

approximately 250,000 trucks, and are used for speed and travel

time reliability measures for those corridors. Last month we expanded the program to a total of 25 corridors. The slide you see

here shows the reliability of travel times on the initial five corridors that we selected for the month of October 2005. This new

analytic tool provides views into system performance that we didn’t

have before and that help us determine where we should be targeting our investment dollars.

We have also provided each member of the Subcommittee with

copies of the most recent edition of Freight Facts and Figures,

along with a FAF profile of each member’s respective State. A

broad range of freight-related material is always available from the

Federal Highway Administration’s Office of Freight Management

and Operations on their Web site and, of course, directly.

Operational improvements, through improved system pricing and

broader technology deployment, are critical to addressing congestion as always. The Department continues to support broader State

flexibility to establish more efficient pricing mechanisms. And, in

addition, we are working with technology developers and State and

local governments to develop intelligent transportation systems for
9

both vehicles and infrastructure that help to relieve congestion and

improve system reliability.

Mr. Chairman, I see that my time is up. I know that the next

panel will be talking about a lot of other efforts of the Department

of Transportation that implicate freight policy. I am proud to say

that freight policy generally is playing a far more conspicuous and

important role in the agenda that we have at the Department of

Transportation than ever before.

Secretary Mineta attaches huge importance to it, we all do. We

are delighted that Congress is focusing on it in this way and we

look forward to working very closely with you. And I would just

pause there and welcome any questions that members may have.

Thank you very much.

Mr. PETRI. Thank you.

Mr. DeFazio?

Mr. Pascrell?

Mr. PASCRELL. My first question is this: Ultimately, solving the

freight mobility problem still boils down to money. Our highway account in the trust fund is running out of money. We all know that.

What does the Department intend to do next year when the prospects of that eventually becomes more certain? Will you recommend

to the President to cut guaranteed spending for highway programs

or will you recommend raising revenues to sustain authorized investment levels included in the SAFETEA-LU? That is my first

question,

Mr. SHANE. Thank you, Congressman.

Mr. PASCRELL. Because one year is tomorrow.

Mr. SHANE. Yes. We are painfully aware of the pending shortfall

in highway trust fund resources, and there is no question that the

Department will be focusing a lot of energy into trying to figure out

how we respond to that problem.

SAFETEA-LU, as you know, created the National Surface Transportation Policy and Revenue Study Commission, which will be

kicking off very shortly. We are looking to that Commission, in the

first instance, to provide recommendations for dealing with this

shortfall, and those recommendations will certainly inform the Department’s deliberations as we move forward. It is just impossible

for me to predict right now what the Department will propose to

the Administration and the Administration to Congress, other than

to say that none of us at DOT, least of all Secretary Mineta, thinks

that we can do with less investment into our highway system than

we have today. We need more. What the sources of that investment

will be will be an important source of a national policy debate, I

have no doubt.

Mr. PASCRELL. So the situation is no different on a Federal level

than it is on a State level in terms of the leveraging of your own

trust fund so that more dollars can come in to your particular

State. We have the same problem in New Jersey. We are struggling

for a means to bolster those numbers. We have been struggling

with that on a Federal level. We have to come to grips with this

and make a decision, because these projects need to be continued

and new projects, as you have heard, you know, need to be designed and ready to be put in place.
10

You also emphasized the role private investment plays in addressing the capacity problem. But private investment focuses on

returns to investors, as it should, and not necessarily trying to

meet the highest transportation priorities of a State or a Nation

that you and I may agree on. One of our witnesses on the second

panel—I just glanced through the testimony—points out in his testimony that most of the traffic delays on our highways occur at

interchanges, which generally are not suitable for private investment, as it is difficult to impose tolls at an interchange and to turn

a profit.

How can we address the most severe transportation congestion

problem in our Country by relying on private investment? I would

like to hear this.

Mr. SHANE. It is a great question, Congressman, and I don’t

think anybody is here to argue that the country can rely entirely

on private investment to support our transportation infrastructure.

I think our expectation is that it will always be a mix, that there

will be opportunities for private investment. There is a lot of private capital out there that is available for our transportation infrastructure, and we should try to take advantage of it where we can

and where it makes sense as a public policy proposition. There will

also be plenty of opportunities for the public sector to weigh in and

ensure that we have the transportation capacity that we need.

It will be a mix. Again, I just don’t have perfect knowledge of

what we are going to decide in the future. I do know that there

isn’t sufficient flexibility right now at the State level to take advantage of that private sector capital that is available. And one of the

things the Department and the Administration have been proposing is that we try to enhance the flexibility available to States to

facilitate decision-making at the State level consistent with the

best needs of our States. We think that Federal law presents too

many impediments today to the flexibility that the States deserve.

Mr. PASCRELL. In conclusion, Mr. Chairman, are you sending a

clear message to the States that you are in gear to assist them in

the planning for the future when so many lives are dependent upon

it and so many dollars are dependent upon it? Are you sending a

clear signal that the Federal Government is ready to implement its

responsibility, or are we going to talk about planning for the next

ten years?

Mr. SHANE. I sure hope we are sending that clear signal. Of

course, you would have to ask those who we are sending it to and

see if they have received it. But I can tell you that certainly within

the course of the next several weeks we are ramping up dramatically our outreach in terms of trying to extend resources, extend

help and consultations to all of our States in an effort to address

these vital economic questions.

Mr. PASCRELL. Thank you.

Thank you, Mr. Chairman.

Mr. PETRI. Mr. Duncan?

Mr. DUNCAN. Well, thank you, Mr. Chairman.

Very briefly, Mr. Shane, I mentioned the rapid growth in Knoxville and East Tennessee area, and the fact that we have two interstates that come into Knoxville and a third one just outside of

Knoxville. What I see happening—I mean, I remember—it has not
11

been too many years ago—when the interstate in Knoxville was

just two lanes on each side and there was really no congestion. And

now we are going to five lanes on each side all through Knoxville

and outside Knoxville; yet, we still have worse traffic, really, than

I face up here. And part of that is because of the rapid growth; part

of it is because we are within 600 miles of two-thirds of the population and we have millions of people coming to Tennessee and

through Tennessee.

But what I am getting at is I assume that the Department is

taking into consideration not only the population base that is already there, but the future growth and then, in addition, the location and the fact that you have so many people coming through

areas like that. But where are we headed? I mean, you know, are

we going to have to go to ten lanes on both sides in 20 years? And

of all these things that you have mentioned, all these analytical

tools, all these programs, what do you think is the most hopeful or

the most significant thing out of all those things you have mentioned to us and all the things the Department is considering?

Mr. SHANE. Well, assuming that we have good information about

the demand that we face, that we can plan properly based on the

facts, my own view is, for reasons that you have quite clearly explained, the addition of more and more and more lanes is not going

to provide the kind of solution that we ultimately need, and my

own expectation is that the real solutions will be found in a combination of technology and economic tools, such as pricing mechanisms calibrating the use of our existing capacity more effectively

through the use of admittedly controversial ideas like variable tolls

on our most congested highways, and freight-only lanes with a user

fee basis such that we end up using this infrastructure in the most

efficient possible way.

When the United States deregulated the providers of transportation back in the late 1970’s and early 1980’s, we found a lot of

capacity in the existing infrastructure. It gave us probably a quarter century’s reprieve in terms of the capacity of the infrastructure

that existed at that time. That particular tool has now been exhausted in terms of its value for capacity purposes. We now have

to find some new tricks in our bag. And my own—I will call it a

personal view, if I may—my own view is that technology and economics are where much of the new solutions will be found.

Mr. DUNCAN. Well, I will just close with this and say that, you

know, I talk to people from all over the Country from other States

who just can’t believe the bottleneck and the traffic that is through

the Knoxville area. It far exceeds—if you just look at our population, you just wouldn’t believe it. I mean, we do have in Knox

County a little over 400,000 people and then, of course, the surrounding counties are growing the fastest. But we need some help,

and I hope you will take a look at the whole situation there.

Mr. SHANE. Just to follow up, Congressman, those bottlenecks

are unacceptable.

The importance of these hearings, Mr. Chairman, is that we now

have an opportunity to focus national attention on problems like

that. The inability to focus enough attention on those issues I think

is what has hurt us in the past. So I am hopeful that, working together, we will really begin to address these issues. The impact on
12

national economy is not sufficiently understood. It is absolutely

vital that we solve these issues.

Mr. DUNCAN. Well, I would just like to be able to get to work

faster in Knoxville than I do up here, and right now I can’t. Thank

you.

Mr. PETRI. Thank you.

Mr. Mica?

Mr. MICA. Thank you very much, Mr. Chairman.

Thank you, Mr. Shane, for your testimony. As you heard in my

opening remarks about the truck weight and what that can do for

the bottleneck, when you look at the increase in highway traffic

that is projected in the near future, as well as the increase in trade

through Canada, do you agree that if you can take care of a bottleneck in one section of the Country, that it could help commerce

throughout the Country at the national level?

Mr. SHANE. Absolutely. There are certainly corridors and bottlenecks that have a huge national impact.

Mr. MICA. My second question, I just want to follow up on Congressman Pascrell’s remarks about in order to take care of congestion, it is going to cost money. But, actually, a study that was done

in the State of Maine—because part of the interstate system has

100,000 pounds, the other part is 80,000 pounds—actually, when

they increased the weight limit on the southern portion in the

State of Maine, it actually saved money for highway and bridge repair, and that is a recent report. And that is why I think it is very

important, when you look at congestion issues, that you also look

at the weight limit issue, which will not actually cost money in all

cases, but actually could save money, number one.

Number two, sticking with the weight limit issue, has the Department done a weight limit study on the impact to the State of

Maine? And if so, what was the outcome of that study at the Federal level?

Mr. SHANE. An impact on the State of Maine of?

Mr. MICA. Yes, on the State of Maine. Have you looked at the

whole weight limit issue and what effects it has on the State of

Maine as far as congestion, as far as cost, as far as safety?

Mr. SHANE. I don’t know the answer to that question, Congressman, I may have to supply it for the record, unless one of my colleagues happens to know. I don’t believe we have, Congressman,

but I will verify that.

Mr. MICA. My last question, Mr. Chairman, is also in the State

of Maine, in the Lewiston-Auburn area, we are working with the

private sector to look at congestion problems, and they actually

were talking about improvements in the Lewiston-Auburn area

that actually can ease the congestion in the Chicago area, Illinois

area. Is that conceivably possible that that could happen?

Mr. SHANE. We have been looking at a variety of options for Chicago and even stationed an office there in an effort to help with the

throughput on Chicago, because Chicago, like border crossings that

you are familiar with, has a disproportionate impact on the national economy, and the effort to address congestion there is obviously one of the top items on our agenda.

Mr. MICA. But are you looking at other ways to ease the burden

in Chicago’s congested area by looking at what can be done in
13

Maine, for instance, that could actually ease that type of burden?

And if you haven’t been looking in that area, is that something the

Department is willing to do?

Mr. SHANE. The Department, yes, is willing to examine any option that is likely to enhance the efficient flow of freight through

the system; it is important to the economy, being what it is. Yes,

Congressman.

Mr. MICA. Thank you very much.

I yield back, Mr. Chairman.

Mr. PETRI. Thank you, Mr. Mica.

Mr. MICA. Thank you, Mr. Shane, Mr. Chairman.

Let me take this sort of progressively. One of the problems we

have is—first of all, everybody said we are drowning in congestion,

we need more infrastructure and we are going to have to have

more infrastructure.

One of the basic problems I found is our whole setup for planning

at the very core of expanding some of the infrastructure seems

somewhat outdated. The structure of some of the metropolitan

planning organizations and our requirements there don’t mesh

with, basically, reality. Today we have jurisdictions that you can no

longer tell where they begin and end. Yet, you have a planning policy that sometimes doesn’t match those jurisdictions.

Do you have any recommendations in the planning process itself

to change, to deal with, again, what we see out there in these

areas? You put up on the chart that just sort of blended together,

but the planning process hasn’t kept up with that.

Mr. SHANE. My impression, Congressman Mica, is that there is

a variety of quality, if you like, out there among our metropolitan

planning organizations. Some actually have the jurisdiction that

you would hope; others,——

Mr. MICA. Do not

Mr. SHANE.—as you suggest, do not. And the Department, of

course, has a whole host of tools that we make available in an effort to enhance the effectiveness of the planning process. We are

talking about freight this morning, and I know the Administration

proposed, as part of what the Administration included in

SAFETEA in its bill, was the suggestion that every one of the departments of transportation at the State level include a freight coordinator, somebody that would work with MPO specifically to keep

freight very high on the agenda. The old saw is, of course, freight

doesn’t vote and, therefore, when people are trying to solve congestion problems, they don’t pay enough attention to goods movement.

We didn’t make the cut with that proposal, but I think there are

other ways we can enhance the visibility of freight within the planning process, and we are trying to do that.

Mr. MICA. Well, the next part would be actually permitting and

moving projects forward. I was involved in one interchange on the

interstate in Florida which I started when I was a staffer with Senator Hawkins in the early 1980’s. I didn’t get it done, actually,

until I was in Congress, and I have been here 14 years. It was at

least seven years into my term, so it took 20 years. I see so much

redundancy and time. I know we have put some provisions into our

new SAFETEA-LU bill on that. Are there enough tools there to
14

move this process forward, or should we come back and look at

that? Because we are going to have to build some of these.

Mr. SHANE. I agree. The President issued an executive order a

few years ago creating a process to focus on precisely those kinds

of administrative bottlenecks. I guess it is fair to say the President

likes administrative gridlock even less than he likes physical gridlock on our roads.

So we have had a process chaired by Secretary Mineta where we

identify key projects that have been stuck, where we haven’t been

able to get the Federal approvals from the variety of agencies that

have to give those approvals, and give them deadlines and force decision-making. I mean, the decision may be no, but we need to

know that in order to move to plan B, and that is what hasn’t been

happening.

I am proud to say that that process has actually delivered a lot

more efficiency in the process than we have seen before.

Mr. MICA. Another question deals with you said we need some

variable tools and just approaches maybe even with pricing. What

projects have been approved? Are there any you can cite as examples that we are looking at that may or may not be successful?

Mr. SHANE. Probably the most exciting experiment took place in

California with a State road called SR–91, which has variable tolling and which gets people home. This is in Southern California.

Mr. MICA. I think I went on that, but I heard that that was a

mixed result.

Mr. SHANE. I have heard that it is not a mixed result, that the

people that are willing to pay for a little bit of speed are very

happy with it. And, of course, by getting them off the road that is

not tolled, they end up even benefitting those that are not paying

tolls. So I can’t say that I have been there personally, and I haven’t

looked at it personally, but I have been hearing some very positive

reports about it. Obviously, it is one example and we will be looking at a variety of others. There have been other tests which have

been interesting as well.

Mr. MICA. Thank you.

Mr. PETRI. Mr. Higgins. No questions? Let us see. Mr. Bishop?

Well, Mr. Matheson. No? No one else? Oh, Mr. DeFazio.

Mr. DEFAZIO. Mr. Shane, in responding to Mr. Pascrell, you

talked about the barriers to flexibility for the States. Now, I would

kind of like you to be explicit there. I am puzzled as to what you

are talking about, since, as far as I can tell, particularly my State,

they are more innovative than the Federal Government and they

have plenty of flexibility; they do bonding, which the White House

didn’t want to do, and other things. So what are we talking about

here?

Mr. SHANE. The most conspicuous example I can think of Congressman DeFazio, is the prohibition against the tolling of an interstate highway that already exists.

Mr. DEFAZIO. Oh, so we should allow people to take taxpayers

who have paid for a highway and then charge them tolls to use the

highway that the taxpayers paid for?

Mr. SHANE. Well——

Mr. DEFAZIO. That would be a step forward?
15

Mr. SHANE. I am not sure who the ‘‘we’’ is in the sentence. The

idea is to allow people to decide what they would like to tax themselves for. I am just saying that the Federal Government is now

putting up barriers to flexibility——

Mr. DEFAZIO. OK, but is there another barrier? Since I happen

to disagree with that as a barrier, do you have any other barriers?

I just would like to hear about them.

Mr. SHANE. I can supply for the record——

Mr. DEFAZIO. OK, so the one thing we are talking about is the

Bush Administration wants to allow States——

Mr. SHANE. To decide.

Mr. DEFAZIO.—to impose tolls on the Federal interstate system

that was paid for by taxpayers. OK, so that is your big step forward. That is great. I am sure the public will be thrilled with that.

I guess, then, is that going to—we mandated a commission in

SAFETEA-LU, and I understand Secretary Mineta is going to convene the commission later, and hopefully we will get some things

other than this idea, which was rejected by the Congress, to allow

tolling on existing interstate capacity from that commission. Can

you give us any insight into the schedule or what the commission

is going to look at?

Mr. SHANE. The first kickoff meeting, I believe, is on the 24th of

this month, and I imagine they will establish a schedule once they

are all assembled for that first meeting.

Mr. DEFAZIO. OK. Well, then that was helpful.

Mr. SHANE. Congressman, Congress actually did allow some tolling of existing Interstates in a pilot program, as you know.

Mr. DEFAZIO. Right, in a very limited way, and that was opposed

by many of us.

It seems to me what we are talking about here seems to be a constant refrain from this Administration which would be a step back

from the idea of an integrated Federal transportation system. I

mean, Representative Duncan talked about the problems of Knoxville. If we are just going to say to the States, we are going to give

you tools to deal with your problems, but we are strapped for resources here at the Federal level and we just really can’t afford the

1950’s version of an integrated, efficient Federal highway system I

think that would be a tremendous step backward, and I am concerned that that does seem to be sort of implied in a lot of what

you are talking about here.

I want to be assured that the Federal Government is going to

continue to look at an integrated system that we are going to continue to try and invest, partner with States, whether or not the

States partner with the private sector, to resolve bottleneck problems. For instance, this Congress rather generously chipped in to

help Oregon in SAFETEA-LU with its cracked bridge problem,

which isn’t just an Oregon problem, it is Interstate 5. It is the third

busiest truck route in America; it carries commerce from Canada,

Mexico, and California, the fifth largest economy in the world. It

serves the entire West Coast and is a gateway for things moving

east. I think there was some recognition by the Congress that the

problems of Oregon are not just Oregon’s problems, they are national problems, and I think what Representative Duncan and oth-
16

ers are saying are many of these key choke points are national

problems. I hope there is still recognition of that.

Mr. SHANE. There is more recognition today, Congressman

DeFazio, than we have ever had in the past at the Department of

Transportation and within the Administration, and I think that is

what the importance of this hearing is. If there is one point I would

like members of the Subcommittee to take away from my testimony, it is that the Department of Transportation is more focused

now on the importance of integrating our solutions and addressing

these congestion issues effectively than ever in the past. We have

a much better sense of what the economic consequences of failing

to address those problems is and it is a national priority, and that

is why we are so enthusiastic about the series of hearings.

Mr. DEFAZIO. OK, I am pleased to hear that.

One other quick question, Mr. Chairman.

Will there be any cognizance of what we would call least-cost

planning, looking at least-cost alternatives by the commission?

That is, you know, we can focus here narrowly on freight, trucks;

we can focus in the Rail Committee narrowly on Class I railroads

and their capacity problems. But the bottom line is the solution is

some combination of those things, it is not one or the other. And

I am hoping that we will be looking at both fuel efficiency, which

would be what is more efficient in the movement of freight, and

least-cost alternatives, which cause to break down some of these

artificial barriers we have set up between funding for our highway

system and funding or working and partnering with the rail system.

Mr. SHANE. That is a superb suggestion and I think we are in

the same boat in terms of what we hope the Commission will do.

But I can’t do anything more than hope, along with you, that it will

address all of these things. Secretary Mineta will have more of an

opportunity, obviously, to suggest an agenda in his role as chair,

and we will try to make sure that nothing is left unexamined.

Mr. DEFAZIO. OK. Thank you.

Thank you, Mr. Chairman.

Mr. PETRI. Thank you.

Let us see, Mr. Hayes, any questions? Mr. Simmons.

Mr. SIMMONS. Thank you, Mr. Chairman.

Thank you, Mr. Shane. One of the other witnesses that will be

in the second panel, Mr. Larkin, has written an interesting piece

called ‘‘The World is Not Flat for the Transports,’’ and on page 4

he talks about railroads and says railroads are not the relief valve.

He talks about how truckers and the railroads are cooperating,

which is laudable. He talks about how the railroads have turned

the corner and are more involved in shipping lighter density, higher value manufactured goods, and so on and so forth.

I come from New England. We don’t have a lot of space to build

a lot of new road capacity. We do have freight rail delivery. We

think it works; it keeps the trucks off the highway. You go up to

I–95, 91, 395 at times, 84 at times, the traffic is creeping along at

30 to 35 miles an hour. On weekends I–95 is 20 miles an hour for

the better part of the day. You know, it is hard to create new lanes

when you are going through densely populated historic towns that
17

have been around for 300 years; there is just not a lot of space

there.

What significant efforts are you making to try to incorporate

long-haul freight and new systems of using long-haul freight with

trucks to alleviate some of these problems? And what effort is the

Department of Transportation making to assist the railroads in

their capital needs so that they can incorporate some of these new

technologies?

Mr. SHANE. The Department has been working—and you will

hear much more about this from the members of the next panel—

on a freight policy framework for the Nation. It is not a Federal

freight policy that we are looking for; we are looking for a national

freight policy, because governments at all levels will have to necessarily participate in that, as well as the private sector, and providers of transportation as well. And I think it is out of that framework, which is a very detailed framework with specific assignments

that we are going to see some solutions emerge. I don’t have bright

ideas to propose this minute to some of the questions that you were

just asking.

In terms of rail investment, the railroads, for the most part, are

private sector. All of our freight railroads are private sector companies and they have been ramping up their capital expenditures and

capital investment rather dramatically in very recent years, after,

I think, a long period when even they would admit that there probably was insufficient investment. That is one promising development. At the Federal level, there is a program called the RRIF program. It is a loan guarantee program available to railroads. And

I know that the railroads themselves are seeking some legislative

help in finding some other resources. But, by and large, for freight

rail, we do not have a large infrastructure finance program along

the lines that we have for highways or even for airport construction.

Mr. SIMMONS. Given the current situation and the projections for

the future, is that no something that perhaps should be changed

as a matter of policy?

Mr. SHANE. The Administration has looked at it. At this point in

time, I don’t think the Administration has a recommendation in

that regard. I think there is still the expectation that the railroads

will find, in what has been a very productive revenue environment

over the last few years, the capital, without having to tap the Federal Treasury to ensure that the capacity is expanded and keeping

up with demand. But time will tell as to whether that assumption

is correct.

Mr. SIMMONS. Well, I just offer, Mr. Chairman, that we make

substantial investments in highway transportation. We make substantial investments in air transportation. Lord knows on passenger rail we are sinking a billion dollars a year into entities like

Amtrak, and it seems to me, if the private rail system needs capital

for investment to upgrade and facilitate its cooperative efforts with

the trucking industry, that that should be a point of interest for us.

And I yield back.

Mr. PETRI. Thank you.

Other questions on this side? Mr. Taylor?

Mr. TAYLOR. Thank you, Mr. Chairman.
18

I would like to follow up on Congressman Simmons’ excellent line

of questioning. We have a similar situation with a short rail line

in South Mississippi, owned by someone from out of State and who

is now looking at in the neighborhood of $60 million to repair, in

some instances, 100 year old bridges for a rail line that, in all honesty, serves about four companies at a fairly remote part of Mississippi, but a part of Mississippi, and it is the life and death of

those four companies.

So to follow up on his line of thinking, given the price of fuel,

given the cost of building roads, it really would be the lost cost alternative to continue to supply these four industries with a rail

line. And I am curious, what, if anything, is the Administration

proposing along those lines? I think $3.00 a gallon diesel fuel

should be changing the way all of us look at moving products. So

what is the Administration proposing along those lines?

Mr. SHANE. Congressman Taylor, my understanding is that Congress, I believe it was last year, enacted an investment tax credit

for the short line railroads, which is a huge assist for a railroad

like the one you are describing in taking on the investment that

it is proposing right now. The Administration honestly doesn’t have

any additional tools in the bag to suggest; that was a very big win,

I think, for the short line railroads.

Mr. TAYLOR. It doesn’t sound like a very big win at all. It sounds

like nothing has changed from when we had $0.70 a gallon diesel

fuel. And if we as a Nation and the citizens are sincerely concerned

about trying to get the price of fuel down, one of the only ways we

are ever going to do that is to get the demand for fuel down. And

one of the ways we should be doing that is to keep as much heavy

freight that is normally on the railroads traveling on the rails. And,

yet, when something like this comes along——

Look, this guy isn’t going to recover $50 million in the next 50

years on that line. But he is keeping that heavy freight off the

roads; he is doing it in a more fuel-efficient manner than if he was

trucking it. I am not trying to put the truckers out of business, but

there is a time and a place for each of them. So if we, as a Nation,

are serious about fuel efficiency, if we are serious about minimizing

unneeded traffic off our highways, this is something we absolutely

ought to be doing.

Mr. SHANE. Well, I don’t think we are disagreeing. I think Congress responded—when the short line railroads came seeking some

help in support of this sort of capital investment, Congress responded with an investment tax credit. That is a public subsidy to

investment in rail infrastructure. That is something that the Class

I railroads do not have today. In fact, I think they are probably

seeking that from Congress today. So Congress will have opportunities to look at some of these proposals and see whether or not

there are other things that can be done in support of enhancing

rail infrastructure. Right now the short lines already have some

pretty important help thanks to what Congress did last year.

Mr. TAYLOR. If I may, what kind of help do you provide to the

States? If the State of Mississippi or any State recognized a problem like this and said, yes, this is the most logical way to solve this

particular problem and that we, as a State, are willing to invest
19

in it, what programs, if any, are there for a Federal-State partnership to improve that line, or even take over that line?

Mr. SHANE. We have a program called TIFIA, which is Transportation Infrastructure Finance and Innovation Act. It was originally

part of TEA–21. And it provides low-cost financing, loan guarantees, and in some cases, direct loans from the Federal Government

that can be used for intermodal facilities, for highway facilities, for

a variety of transportation facilities.

Mr. TAYLOR. How about rail line improvement? How about replacement of bridges?

Mr. SHANE. Direct rail construction, no, but intermodal facilities

that benefit railroads, yes.

Mr. TAYLOR. OK, how about rail repair? Are you calling construction and repair two different things or the same thing?

Mr. SHANE. Well, I am distinguishing, between the rail bed itself,

the right-of-way, and the intermodal facilities where rail intersects

with other modes of transportation. We talked earlier about the

need for an integrated system. That integrated system is enhanced

by the connectivity we provide at these intermodal yards, and the

intermodal yards are eligible, including rail yards, for TIFIA help,

as well as a very new tool that is available called private activity

bonds. I am proud of this one because the Administration, through

the Treasury Department, decided to extend private activity bond

financing to intermodal facilities as well for the first time; that is

to say, tax-exempt bond financing, the proceeds of which can be

made available to a private sector development such as a railroad

for purposes of an intermodal facility. And these are important

steps forward.

Mr. TAYLOR. Who on your staff could we sit down and talk with?

I don’t think you have a program that suits our needs, but I am

willing to try. So who on your staff?

Mr. SHANE. Well, you don’t have to go to my staff, you can come

to me.

Mr. TAYLOR. OK.

Mr. SHANE. If you want to talk to any member of the staff, we

will provide a list of experts for you.

Mr. TAYLOR. If you would be kind enough to leave your phone

number.

Mr. SHANE. Thank you. Will do.

Mr. TAYLOR. Thank you, Mr. Chairman.

Mr. PETRI. Thank you.

Mrs. Schmidt.

Mrs. SCHMIDT. Thank you.

And thank you, Under Secretary Shane, for your testimony. One

particular ongoing project in my district, the Eastern Corridor

Project, would provide much needed capacity to the greater Cincinnati area. Projected travel benefits to this project will include

saving an average of 15,000 hours of congested related daily each

day, saving 50 million vehicle miles annually by providing an eastwest travel corridor, and reducing vehicle hours traveled by 21,000

hours per day. It is a project my community has been working on

for almost 15 years.

The Federal Highway Administration has been very helpful and

willing to meet my office on a monthly basis, and I appreciate that
20

very, very much, but has not been able to determine when a record

of decision will be requested. I don’t expect you to answer this right

now, but I would very much appreciate it if the Department could

follow up with me and let me know when a record of decision will

be requested so we will be able to move on to Tier 2 of this project.

And, Mr. Shane, it is something that the folks that have been

working on this project ask me continually, and this is a great public-private partnership effort and something my community really,

really wants. So if you could give me that answer, I would be greatly appreciative. And I will leave my office number with you.

Mr. SHANE. Thank you, Congresswoman Schmidt. Thank you for

not expecting an answer this morning, and I promise to provide an

answer for the record and to you directly.

Mrs. SCHMIDT. Thank you.

Mr. PETRI. Other questions on this side?

I just would like to, I guess, conclude your portion of the testimony by thanking you for being here and for the prepared statement that you submitted. I guess what you are trying to do is

using more data collection technology to determine where—scientifically, not just anecdotally, where there are choke points and

delays in particularly freight movements across the Country as an

assist in determining how we deal with that.

This is a very important effort, I think. I am told by people in

the trucking business in particular that after 20 years of paying for

a lot of improvements in our standard of living by greater efficiency

in the whole transportation sector of our economy, which I think

includes inventory costs and things, that that downward movement

has ended and, in fact, we are now seeing an increase in the cost

of transportation, not just because of fuel but because of other costs

in our economy, and that bodes very poorly, if that trend continues,

for our overall international competitiveness, particularly as some

of our emerging competitors are sure to be more efficient as time

goes on.

So we have got a major—we really do need to stand back and

analyze the problem, and then figure out if we can deal with it

through technology or through better utilization of additional capacity or a combination of things.

Are you doing any efforts or would it make any sense to try to—

experts in the field talk about congestion pricing and this kind of

thing. My trucking people say that they don’t use a lot of the tolled

highways now because they can only make a certain amount per

shipment, and the total tolls are more than what they can make,

so they go off toll road, and that causes more accidents and various

other problems, and that is not really counted for currently.

But they would think it would make sense possibly to have some

kind of a discount for tolls if they drive, when the roads are empty.

Maybe it could be balanced with higher tolls during the day and

lower tolls at night, or some sort of way of utilizing the system on

a 24-hour basis. We have huge unused capacity on a time basis,

even though we have congestion on the same roads going to and

from our ports or during commuting hours and so on, when everybody is trying to use those resources.

Is that a fruitful area to work on?
21

Mr. SHANE. Absolutely, Mr. Chairman. In fact, we have a very

successful example of precisely that technique being used at L.A.-

Long Beach with a so-called Pier Pass Program, which is through

a pricing mechanism designed to do precisely what you are suggesting, using all 24 hours of the day de-peaking the very congested port area around L.A. and Long Beach.

And it has brought enormous efficiency, at least for the time

being, to that very important area. As you heard, this is one area

that has an impact on the entire Nation. We think there are lots

of opportunities for doing precisely those kinds of experiments in

other parts of the country as well.

Mr. PETRI. Thank you.

Mr. Oberstar?

Mr. OBERSTAR. It is always good to have Secretary Shane at our

Committee. He brings a very thoughtful, constructive approach to

the policy debate in great issues in transportation. And I read with

great interest the paper that Secretary Shane submitted to the

Committee and which he summarized. I am glad to see you are

making use of the Texas Transportation Institute data, which I

think is very instructive and very frightening, frankly, on the

march of congestion across America.

But Mr. Mica raised a question earlier, posed a question about

what approaches and how to deal with this problem, but I think

the question missed the point and I think your response was not

comprehensive. Restore the ‘‘i’’—intermodalism in transportation.

Some years ago you and I had a discussion about the effects of

ISTEA, the Intermodal Surface Transportation Efficiency Act, and

you observed that at a gathering of assistant secretaries at DOT,

in the aftermath of passage of that legislation, you suddenly realized that no one had been talking, that none of the modal administrators had been talking to each other; they were all doing their

own things. The common term is stovepipes. And your observation

was that in the brief time remaining under that Act before the termination of the first Bush Administration, there was considerable

discussion, exchange of ideas among the modal administrators and

the assistant secretary policy level people.

It seems to me that that has diminished in time, the ‘‘i’’ disappeared from TEA–21. And while structure was retained in TEA–

21 and some structure retained in TEA-LU legislation, the emphasis has shifted away from intermodalism.

Give me your thoughts today about how thinking intermodally,

relating modes to each other, rather than looking at market-based

solutions and finding ways to tax people on top of the tax they have

already had on the roadways, how can more fertile ideas come out

of policy discussions internally and then with us in the policy formation arena and in the market contribute to relieving congestion?

Mr. SHANE. Thank you, Congressman Oberstar, and thank you

for the kind words. I guess I can’t disagree with your perception

of what seems to be going on if you are just looking at the surface

of the Department of Transportation. We certainly haven’t changed

the structure, and it is true that intermodalism isn’t part of the

label any longer that we apply to our authorizing legislation.

But I can tell you that within the Department itself intermodalism is embedded now in a way we haven’t seen before. And this
22

is impressionistic, so I will be probably hard-pressed to give you a

lot of concrete examples, but the administrators do talk to each

other.

There are councils within the Department in which the administrators all participate. Several administrators from different modes

participate on the Intelligent Transportation Systems Management

Council, and in the Research and Development Planning Council

that we have set up. We have a variety of things which probably

don’t see the light of day because they are inside baseball, they are

the way we manage the Department of Transportation in which we

bring the modes together, ensuring that we are seeing some crossfertilization there.

There is a lot of cross-fertilizing still to be done, to be sure, and

I don’t want to suggest for a moment that we have achieved the

millennium. Far from it. We still have too much stove-piping, I

think.

But we are making important strides. And we have been assisted

in that regard with the legislation that Congress has delivered to

us. What I was talking about before, the private activity bonds for

intermodal facilities, is $15 billion of borrowing authority available

to the private sector with tax-exempt bonding for intermodal facilities. That is an important one.

We hoped to have a set-aside for intermodal connectors in what

ended up being SAFETEA-LU, and we have discussed that before.

That didn’t make the cut with Congress. I am not even sure I know

why, but the fact is the intermodal connectors are still eligible facilities, and we are putting an emphasis on trying to get that last

mile of our transport infrastructure up to par along with the rest

of the system.

Mr. OBERSTAR. That is helpful and it is encouraging to know that

there is discussion underway. It is certainly not apparent up here,

because none of those folks come and talk to me or other members

that I am aware of. But a good example—and I will conclude, Mr.

Chairman. I know other members have questions.

But we know the increasing congestion on the roadways. We

know the increasing congestion on the railways, that the Nation’s

railroads now are finally earning a return on equity, they are mobilizing capital to invest in roadbed and rolling stock, locomotives

and freight cars, but they are behind the curve because for so many

years they didn’t have that capital to invest.

The railroads want the truck sector to take more containers and

carry more on the road. The trucking sector wants the railroads to

carry more of their trailers because they don’t have—it is nearly

7 million trucks. They don’t have the drivers, they don’t have the

equipment. And with the just-in-time delivery system, where their

highways become rolling warehouses, they are all stretched.

So that is a preamble to the question does the Federal Highway

Administration administrator and his staff get together with the

Federal Railroad administrator and his staff, under your aegis or

someone else’s, or under the secretary’s? Does that happen? Do

they talk about this issue? Do they say is there some contribution

we can make to this dilemma?

Mr. SHANE. They do talk together and they talk with the Secretary, and they do that in the context of a broad initiative which
23

the Secretary is organizing to address congestion across the Country as a systemic problem.

Mr. OBERSTAR. They must be keeping it a big secret.

Mr. SHANE. Well, it won’t be a secret for long, Congressman

Oberstar; it has been in the works. And I don’t want to steal anybody’s thunder, least of all my boss’s, so I hope you will forgive me

if I just leave it there.

I wouldn’t leave out, however, the Maritime Administration. One

important component of our freight system should be our highways

on the water, something we call short sea shipping.

Mr. OBERSTAR. Short sea shipping, exactly. I was leaning

toward——

Mr. SHANE. Yes. And we have been looking very closely at that.

We don’t have the luxury today of ignoring any possible relief from

the congestion that we face, so every one of these modes of transportation has got to be integrated better.

Again, I am not pretending that we have achieved what I think

your vision and the vision of many members of Congress is in

terms of intermodal transportation planning in the country. I am

not trying to say we have done it all by any means. I am just saying that we have made progress, and we will continue to make

progress. It is not a problem that we have forgotten about or are

ignoring.

Mr. OBERSTAR. Well, that is encouraging. And I also want to further encourage the Department to look at our inland waterways,

the system of locks and dams on the Mississippi, Ohio, Illinois river

system, the St. Lawrence Seaway, which does come directly under

the Department’s authority, are underutilized and under capacity,

that is, the locks of today are—except for lock and dam 26 at Alton,

Illinois, are the size of the largest locks in the 1930’s. They need

to be upgraded. Every time you break up a tow in order to get

through those locks, you are taking time, increasing demurrage

charges, increasing other costs for the most efficient, energy-efficient, cost-efficient means of moving bulk commodities.

Mr. SHANE. I should really add in that context, Congressman

Oberstar, that the President created a new committee on the marine transportation system, an interagency committee at the cabinet level—this is an elevation of the issue from where it had been

before—to ensure that, for example, the Corps of Engineers and the

Department of Transportation and the Maritime Administration

within DOT are all talking together about precisely the importance

of ensuring that the inland waterway system continues to contribute to our transportation system, and is utilized far more effectively than it is today. So I appreciate your mentioning that.

Mr. OBERSTAR. Thank you, Mr. Chairman.

Thank you, Mr. Shane.

Mr. PETRI. Thank you, sir.

And that concludes the first panel.

The second panel consists of Mr. Lance Grenzeback from Cambridge Systematics; John Larkin, Managing Director of Stifel,

Nicolaus and Company; and Dr. Michael Meyer, Professor at Georgia Technical University.
24

Gentlemen, we welcome you and we thank you for your prepared

statements, and we look forward to your summaries of approximately five minutes. We will begin with Mr. Grenzeback.

TESTIMONY OF LANCE GRENZEBACK, CAMBRIDGE SYSTEMATICS; JOHN LARKIN, MANAGING DIRECTOR, STIFEL,

NICOLAUS AND COMPANY, INC.; MICHAEL MEYER, PROFESSOR, GEORGIA TECHNICAL UNIVERSITY

Mr. GRENZEBACK. Mr. Chairman, distinguished Committee members, my name is Lance Grenzeback. I am Senior Vice President

with Cambridge Systematics. We provide transportation policy,

planning, and managing consulting services to Federal, State, and

local transportation agencies and to public sector companies.

I am very pleased to appear before you to describe the findings

of our recent work for the Federal Highway Administration on

identifying and measuring delays to trucks caused by highway bottlenecks.

In the 1970’s, transportation planners developed methods to map

and forecast automobile flows in metropolitan areas, and as congestion increased through the 1980’s and the 1990’s, the methods were

improved to identify bottlenecks, measure their delay cost to drivers, and develop solutions. There was, however, no parallel effort

to analyze national freight flows until 1999, when the Federal

Highway launched a program to map and forecast those freight

flows.

I was one of a small team of consultants working for the Federal

Highway on this initiative. This program, called the Freight Analysis Framework, produced the first comprehensive national maps

and forecasts of freight flows. This map is one of the early products

of that program; shows the density of truck freight on the national

highway system. And when we analyzed this, what we found were

increasingly congested highway and rail freight systems.

In 2004 the FHWA asked us if we could identify major truck bottlenecks on the highway system and estimate their economic cost.

We identified 14 types of bottlenecks that caused some 240 million

hours of delay and, by our estimate, caused truckers $8 billion in

lost time in 2004. Interchange bottlenecks accounted for most of

the delay, about 124 million of those hours, at a cost to truckers

of over $4 billion.

This map shows the location of the major highway interchange

bottlenecks. You will note that most of the bottlenecks are at urban

interstate interchanges.

Next slide chart shows the distribution of truck hours of delay

for these bottlenecks. Of the 227 highway interchange bottlenecks

that we identified in our initial scan, some 35 caused more than

a million truck hours of delay each.

Working last year with the Ohio Department of Transportation,

we analyzed major highway freight bottlenecks in Ohio; we identified specific choke points within the bottlenecks, and estimated the

type, value, and the origins and destinations of the truck freight

caught up in them. The diagram shows the critical choke points

within the interchange of I–70, I–71, and State Route 315.

This interchange is one of three very closely spaced bottlenecks

along the corridor through Downtown Columbus. At bottlenecks
25

like these, we found that precisely tailored improvements, such as

redesign of a single ramp or repositioning a merge lane, coupled

with much more aggressive and better corridor traffic management,

could be quite cost-effective at reducing delays.

Now, while a few States, such as Ohio, are moving to address the

problem of freight bottlenecks, we do not have Federal policies and

programs in place that recognize bottlenecks as a national scale

problem that threatens to choke our highway freight system. Bottlenecks are a sizable problem today, and, as Mr. Shane mentioned,

they are going to become a bigger problem in the future. Over the

next 20 years, economic growth and trade will nearly double the

tonnage of freight moved in the United States, and this means

more shipments and more trucks traveling more miles.

When trucks are delayed at highway bottlenecks, shipping costs

go up, the reliability of deliveries drops across industry and retail

supply chains, and businesses react by holding more inventory and

passing the cost on to consumers eventually. The net effect is an

erosion of the competitive position in national and global markets,

slower economic growth, and fewer jobs.

We need a national programmatic approach to reducing highway

bottlenecks. A relatively small number of bottlenecks account for a

large share of the delays, and they are widely scattered across the

Nation; however, they sit squarely on the crossroads of our transcontinental and regional truck routes. The solutions are site-specific and expensive, and few cities and States can justify the cost

to fixing these bottlenecks alone, but the bottlenecks are felt nationwide.

We built the interstate system in part to gain the benefits of

interstate trade, and we have been so successful that we risk choking on the traffic congestion today and losing the benefits of both

interstate and global trade. We can now identify the critical bottlenecks, and we must implement the solutions and reduce delays,

particularly the nationally significant bottlenecks, to improve

freight productivity.

As you begin your debate about reauthorization, I would encourage you to take a close look, as you are, at the congestion on our

Nation’s highways to advance a national freight policy that recognizes bottlenecks as impediments to freight flows and trade, and

focus programs such as the Interstate Highway Program, programs

of national and regional significance on those major highway

freight bottlenecks.

Thank you for the opportunity to appear before you today, and

I would be happy to answer your questions at the appropriate time.

Mr. PETRI. Thank you.

Mr. Larkin.

Mr. LARKIN. Mr. Chairman, Ranking Member DeFazio, distinguished members of the Subcommittee, good morning, and thank

you for inviting me to address this important topic.

My name is John Larkin, and I am Managing Director of Transportation Research at Stifel, Nicolaus in Baltimore. My formal education consists of a B.S. in civil engineering from the University of

Vermont, an M.S. in civil engineering from the University of Texas

at Austin. Interestingly, my masters thesis was entitled ‘‘Modeling

Future Truck Weight Patterns as Influenced by Alternative Vehicle
26

Weight Legislation.’’ I have also earned an MBA from Harvard

University.

My professional career began in 1979, after working in transportation consulting at Dan Zimmerman and in strategic planning at

CSX, I became a member of the Alex Brown Transportation Research Team in 1987, where I worked for 11 years. While at Alex

Brown, I was involved in dozens of investment banking transactions involving the Nation’s largest trucking companies. Later,

from 1988 to 2001, I served as CEO of Railworks Corporation, a

publicly traded company that sold products and services to the Nation’s railroads and public transit authorities.

More recently, I formed the Transportation Research Team at

what became Stifel, Nicolaus and Company on December 1st of last

year. At Stifel, Nicolaus, we provide research to institutional investors regarding 27 public companies that operate within the freight

transportation industry.

It is hoped that my 29 years of relevant experience will help you

craft the legislation that will shape the future of our freight transportation industry in order to promote continued economic growth.

That future growth is becoming progressively more reliant on the

trucking industry and, in turn, our Nation’s highway system for

the efficient movement of freight throughout our Country.

The freight transportation system in the United States is the

backbone of our growing economy. As our rate of consumption increases, industries consolidate, and supply chains lengthen, the

freight transportation industry is being asked to move considerably

more freight over longer distances.

However, it is simultaneously constrained by a set of scarce resources that have not been able to expand sufficiently to satisfy the

growth and demand. Without carefully developed plans that permit

industry capacity to grow in line with demand for freight transportation, the current capacity shortage could become a significant

drag on the rate of domestic economic growth.

Eighty-one percent of the Nation’s freight bill is generated by the

trucking industry, according to our estimates. While railroads,

pipelines, and barges play major roles in the transportation of bulk

commodities such as coal, natural gas, and grain, most manufactured goods, food, and consumer products are moved by truckers

over our highway system, the primary component of which is the

interstate system.

The interstate system was developed conceptually in the 1950’s

and built out throughout the 1960’s, 1970, and 1980’s. As segments

of the interstate system near the end of their 30 year design life,

pavement and bridges need to be overhauled. The highway bill

passed in 2005 is mostly focused on the rehabilitation of those 30

year old assets, included relatively few provisions for meaningful

incremental capacity additions that would have positioned our

highways to handle the anticipated growth and demand. A progressively less productive trucking industry has to cope with a highway

system that is becoming increasingly congested not just in urban

area during rush hour, but on links between big cities during traditionally non-peak periods.

In addition, truckers are already unable to add capacity due to

a chronic shortage of drivers. Global Insight, a well known consult-
27

ing firm, has projected that the driver shortage will increase sixfold over the next eight years. If this scenario plays out, significantly fewer drivers than we would require will be attempting to

haul more freight over longer distances on highways that are becoming increasingly congested.

Furthermore, recent changes in the Federal Hours of Service

Rules have imposed additional constraints on driver productivity.

Highway safety lobbyists are pressuring the Federal Motor Carrier

Safety Administration to enforce the new Hours of Service Rules

more rigorously and to further tighten down on the current rules.

Finally, Federal size and weight loss have not changed appreciably since 1982 and, as a result, it has been virtually impossible

to improve the productivity of the relatively few good drivers which

exist. The ongoing capacity crisis in the trucking industry is placing significant constraints on trucking companies’ ability to meet

the growing demands of their increasingly global customers. We

need a plan to expand capacity, ideally through significant infrastructure additions and alterations to existing regulations in order

to enhance truck drivers’ productivity.

The bottom line is that the economic vitality of the United States

truck industry and the highway industry system are inextricably

linked. In order to support sustained economic growth, we need a

healthy trucking industry, and in order to support a healthy trucking industry, we need a fluid highway system that allows scarce

drivers to be as productive as possible.

Again, thank you for inviting me to testify on this important

topic.

Mr. PETRI. Thank you.

Mr. Meyer. Dr. Meyer.

Mr. MEYER. Thank you, Mr. Chairman. My name is Michael

Meyer. I am a Professor of Civil Engineering and Director of the

Georgia Transportation Institute at the Georgia Institute of Technology. And this year I have the pleasure of serving as the Chairman of the Executive Committee of the Transportation Research

Board and also chaired the TRB Freight Roundtable that Secretary

Shane mentioned earlier.

A truly national strategy intending to provide greater efficiency

in the transportation component of the freight supply chain should

examine a broad range of bottlenecks and opportunities in terms

of port capacity; limitations in terms of availability access to ports;

looking at line haul routes, both rail and highways; pricing incentives, disincentives, et cetera. Today, however, I am going to talk

specifically about the road network and road congestion.

Now, you have seen two speakers already use the Freight Analysis Framework and pictures of the national road system in terms

of the flows. It is a very important and interesting perspective.

However, I am going to take a slightly different one because, as

has been suggested already in Knoxville, Southern California, Portland, Maine, Portland, Oregon, and other metropolitan areas, many

of these bottlenecks are occurring in metropolitan areas.

So this first slide shows you some analysis that has been done

in Atlanta. This is the projected congestion on the Atlanta Freeway

system in the year 2030. Let me note that red is not good. The red

color indicates serious congestion. I would also note that this is
28

congestion after the metropolitan area has spent $54 billion to improve the road system and the transportation system.

The next slide shows Dallas-Fort Worth. The table suggests that,

in fact, in the year 2025, in Dallas-Fort Worth they are expecting

42 percent more roads congested in their road system, as well as

120 percent increase in total delay.

The next slide shows Seattle. Again, red is not good, projected

congestion in the Seattle network in the year 2030.

The next slide is Miami, another port city, similar to Seattle,

which again suggests that future congestion in that city’s road system is going to be rather severe.

And then the final slide shows Denver, which there, as well, suggests that the number of lane miles of three hours or more of severe congestion will increase by 91 percent in the year 2025, and

the number of lane miles of severe congestion will increase by 88

percent.

I could have shown similar slides for Knoxville and for any other

urban area in this Country, large and small. This is what the metropolitan planning organizations do with regard to their modeling,

and I think it provides a very interesting perspective at a much

more site level, at the interchange level in some cases, as Lance

mentioned, about some of the problems and challenges that we are

facing.

Well, what can we do about it? The next slide suggests that in

fact there are some things that I talk about in a little bit more detail in my written testimony. Number one, we do need to elevate

freight mobility as part of the national transportation policy. Secretary Shane already talked about the national freight policy

framework, again, that came out of the roundtable that I chaired.

It is absolutely essential that that framework be implemented.

That framework recognizes that enhancing freight mobility requires progress on many fronts, ranging from institutional regulatory changes to adding capacity to multi-modal transportation

networks where it makes economic sense. And I believe that that

framework can be used to identify strategies and institutional responsibilities for adopting a national freight policy.

Next, the bottlenecks. And Mr. Grenzeback has already talked

about bottlenecks, freight bottlenecks in particular. Congress did,

in SAFETEA-LU, provide for authorization of targeting intermodal

freight transportation initiatives. I think that is a project and a

program—a program, I should say, that in fact is very, very important for the Nation and needs to be expanded.

Third, funding. Encourage public-private partnerships. Certainly,

that is something that we have seen a great deal about in this

Country, although as Congressman Pascrell mentioned earlier and

as I say in my written testimony, it is not a panacea for funding

the transportation system in this Country. Somebody has got to

step up to figure out how we are going to provide that funding base

for roads that in fact the private sector will not be interested in because the volumes do not justify private investment.

Implementing system operation strategies. Much of what we talk

about has to do with geometric design capacity increases. We can

get more efficiency out of our system through the applications of

ITS, Intelligent Transportation System technologies, scheduling, et
29

cetera. That is something that the Federal Government has provided some leadership in and should continue.

Next is focusing on freight mobility corridors. This is something

that I, along with others, many years ago suggested would be an

appropriate focus for both planning, as well as policy and investment.

Next, I am convinced looking at transportation—where we have

been, where we are, and where we are heading—that we are going

to see more interest in what I call freight-only facilities. We just

completed a study in Atlanta looking at truck-only lanes and saw

that, in fact, they would have a significant improvement in terms

of the productivity of both trucks, as well as reducing congestion

on the freeway system in the region.

Next, incorporating freight considerations into the transportation

planning process. This is not obviously a public sector issue, it certainly is private sector, but the transportation sector has a lot to

offer through the planning process.

And then, finally, I can’t help but mention research, given that

is what I do. Congress was kind enough to provide dollars in

SAFETEA-LU to focus on transportation research. I think more

needs to be done. That, of all the research initiatives, probably has

the greatest return for the dollar of the research programs authorized by Congress.

Mr. Chairman, thank you very much. I do provide more information in my written testimony. Thank you.

Mr. PETRI. Thank you.

Mr. DeFazio?

Mr. DEFAZIO. Thank you, Mr. Chairman.

Mr. Larkin, when you talked about the return on capital for the

railroads, I think we are all kind of familiar with that, but it seems

to me that I don’t know if the economics are going to change because of high fuel costs and whether rail—of course, they are having capacity problems and I think they have been pretty woefully,

for the most part, and Union Pacific, incredibly mismanaged.

What potential do you see there? I see we need to better utilize

that. I think if we look at a least-cost model, rail for movement

most of the length of the West Coast is going to far outstrip truck

if you don’t have the disadvantage of problems with delivery time

and all that. I mean, do you have any idea? Should the Federal

Government be——

I have one mill owner, crusty old guy, big picture of Ronald

Reagan behind him on the wall, but he waxes poetic about how

well the Government ran the railroads in World War II, and maybe

we should just nationalize them. I don’t know if I would quite go

as far as this very conservative right-wing Republican to nationalize the railroads, but, short of that, what do you see as the solution? How are we going to better utilize and integrate rail? I think

we need to.

Mr. LARKIN. The first point I would make is that I don’t believe

that the railroad managements are necessarily making decisions

that are in the best interest of an integrated national transportation system. What they are trying to do is, for the first time in

many years, consistently earn a return that is in excess of their

weighted average cost of capital, and the easiest way for them to
30

do that is to actually be very selective with respect to what freight

they decide to haul and to very aggressively put in place price adjustments on the freight that they are currently hauling. That has

really been driving the margin expansion we have seen over the

last couple of years, primarily in the carload area.

Interestingly, year-to-date, rail carload volumes are up less than

one percent year over year, which doesn’t exactly give you a warm

and fuzzy feeling that the railroads are really bailing out the transportation capacity problem.

Intermodal is a bit of a different story here. That rate of growth

has been about five or six percent this year, some railroads are

growing a little faster than others, many working closely with

international steamship lines to move the containers inland, which

reduces the amount of highway congestion that we currently are

experiencing.

And, most interestingly, I think the trucking companies have finally come to the conclusion that the railroads are really not competitors, but partners, and you are seeing very strong relationships

developing between the top 10 or 15 truckload carriers and the railroads to try and take as much of the long haul truckload freight

off the highway and put it onto the highways. I think at some

point, here, within the next couple of years, though, we are going

to run into capacity constraints more so in the form of terminal capacities in urban areas, where real estate is very expensive and

where society in general does not like these facilities located close

to their places of business or close to their residences.

So I think it is in those intermodal facilities where the Federal

Government can probably play the most productive role in terms

of assisting the conversion of market share in long-haul high-density lanes, like Chicago to Los Angeles, from the highway onto the

railroads.

Mr. DEFAZIO. OK, so you are thinking the most appropriate place

for the partnerships or the Federal investment is in those nodes,

essentially, the intermodal.

Mr. LARKIN. I think the intermodal facilities is where you can get

the most traction and the most bang for your buck, as it were. The

railroads are doing a pretty good job of addressing the bottlenecks

in their line haul networks through specific investments in passing

sightings, double track mainline, triple track mainline, things of

that nature.

And perhaps the one area of focus that is not talked about much

is that they are beginning to try and mimic the operations of the

Canadian National, which is running a very efficient scheduled operation that has probably generated somewhere in the order of 50

percent incremental capacity just by running the railroad more efficiently.

Mr. DEFAZIO. OK.

Mr. LARKIN. So there is really not a whole lot, I don’t think, that

Federal policy can do there; that is a question of good management,

as you alluded to earlier.

Mr. DEFAZIO. Right.

Mr. LARKIN. But when it comes to putting in place the facilities

that allow for the efficient transference of boxes, be they trailers
31

or containers, from the highway to the rail, that is where I think

you can be helpful.

Mr. DEFAZIO. Mr. Meyer, did you have any thoughts on that?

Mr. MEYER. Well, Congressman, I was nodding my head because

a couple years ago I had the opportunity to participate in an international scanning program by the U.S. Department of Transportation, and we went to Europe and we were looking at what the

Germans and the Dutch were doing in terms of their governments,

and they were focusing on the intermodal terminals in terms of

public dollars because that is where they felt they could get the

most efficiency to influence the market as much as possible to get

freight onto rail versus trucks. So I completely agree with Mr.

Larkin that that really is a target of opportunity for Federal interest, as well as possible investment.

Mr. DEFAZIO. OK. Thank you.

Thank you, Mr. Chairman.

Mr. PETRI. Thank you.

Mr. Hayes, any questions?

[No response.]

Mr. PETRI. I wonder just maybe—well, first of all, thank you very

much for your testimony. I was taken by your analysis of choke

points and trying to look at the cost of those choke points and figure out some way of encouraging people to deal with them. Of

course, the costs aren’t concentrated right where the choke points

are, so we have got a public policy challenge in terms of marshaling

the resources to deal with them and make the system more efficient overall.

And that seemed to me to be kind of an example of a greater

problem, and that is that a lot of this congestion, you reach a point

where suddenly things clog up and then efficiency drops real fast.

So we have tried on the margins to meter traffic in and get people

on a quasi-voluntary basis to withholding entering the system to

keep the overall efficiency up, and that pays off in terms of greater

throughput from the existing capacity.

If you agree that, as a Country, we have got kind of a growing

problem, and I think you do, in terms of figuring out policies that

will maintain and increase the efficiency of our system rather than

seeing things freeze up more and more, do you have any—and you

made a few suggestions in your testimony, I think. But if you were

in charge of things, what sort of policy process would you put in

place, or what could we do to work on incentives, besides just

throwing money at the problem, to, as a Country, figure out how

to efficiently—how to increase efficiency in this area?

Clearly, it will pay off and, clearly, if we don’t do it, we are going

to have all kinds of problems and we will wonder why we have

those problems, and it will be because, 30 years before, people did

not get us moving in the right direction in terms of making the

Country more efficient in the movement of goods, people, and that

kind of thing.

Do any of you have any comments or things you would like to

talk about? You know, and I am not saying a lot of specifics, but

also standing back and figuring out some mechanism or way we

can do it to move forward. My concept was that we try to figure

out some advisory body through the National Science Foundation
32

or through the Transportation Research Report or something that

uses the resources of the private sector—because FedEx and

Schneider Trucking, all kinds of people now are investing huge

amounts and they are logistics companies.

But we are not a logistics government, we are a highway or this

or this, and we aren’t using that data or that approach adequately

to figure out how to make our system work and get a maximum

return for the huge investments that people are making in communications technology and all the rest of it.

Mr. Grenzeback?

Mr. GRENZEBACK. Yes. I certainly recognize the problem you

have described. The approach that we have been using in work in

Oregon and in Washington State now and on the I–95 Corridor Coalition has been to sort of trace the supply chain to begin to break

down the freight that is flowing through a region and begin to look

at it sort of industry-by-industry and begin to follow the freight as

it comes in through the ports and moves onto rail and truck, and

begin to identify how that flow works and look at the bottlenecks

that are there. It works very well at the metropolitan scale and at

the State scale if the State DOT is organized to deal with it at that

level and can bring in the shippers and the carriers who work

there.

Where it begins to break down and I think we have a national

problem is looking at the freight flow across States, where it goes

across jurisdictions. And we do not have in place really the mechanisms to do that. We are going to begin to do that for the I–95 Corridor Coalition, looking at freight flows across portions of the East

Coast; however, when you come to the question of how do I then

allocate priorities and monies to fix those bottlenecks, we fall between the stools of either the Federal system or the State funding,

and I think that would be something to look very closely at. We

have begun to look at ideas like a multi-State or regional infrastructure bank in which we could pool monies from several States,

have them matched by the private sector.

A good example, in looking some years ago at the mid-Atlantic

rail operations in the kind of New Jersey to Virginia area, one of

the hugest bottlenecks turns out to be in Baltimore, Howard Street

Tunnel, and how you go through that area. It was never designed

for the volume of north-south traffic that we would like to carry

through there, and it can’t relieve highway traffic unless you get

through.

But that is an immense bottleneck on the rail side. And if Maryland has to bear all of the costs of dealing with that, it is going

to be impossible to fix. So the question is can we provide a structure of some sort less than purely Federal but is regional that allows us to both pool funds and also distribute the benefits back on

there.

So there is an approach to begin to look at the kind of freight

that flows through those bottlenecks, look at the origins and destinations of that, begin to figure out which industries and which

States and which communities are affected by that, and begin to

parse that back and say, you know, who ought to bear some of the

costs, as well as the benefits and the risks of that.
33

Mr. LARKIN. I would suggest that when this commission that is

going to look at this problem convenes, that they may want to consider a hierarchy of modes that is a little bit more expanded than

we have now. Right now we have single-unit trucks running 3,000

miles in fairly high density lanes. That doesn’t make a lot of sense

from an energy efficiency point of view, from a labor efficiency

point of view, from an infrastructure efficiency point of view.

We ought to be using single-unit trucks, truck trailer combinations to deliver freight locally and to operate in light-density shorter haul lanes. We should really give a serious look at heavier, more

of a combination of vehicles to run on your medium-density routes,

you know, for example, maybe from New York City to Buffalo, New

York. That is not a good intermodal market; the economics don’t

make sense, but it makes a whole lot of sense to run double trailer

combinations behind a single power unit with a single driver there.

We may want to expand that system behind a very limited system

which exists today and is only really operational on a selected

number of toll roads.

Beyond that, I think there are other lanes where some lighter

density intermodal, rail intermodal alternatives may make some

sense. Quite a number of years ago someone invented an intermodal product called the Road Railer, and only one company has

been able to make that successful, that is Norfolk Southern with

their Triple Crown operation.

But as many of the other railroads have shut down their intermodal operations and tried to funnel all the traffic through the

highest density lanes, connecting only the biggest cities, many of

the smaller cities that used to have intermodal service simply don’t

have it anymore, and all of the burden for hauling the freight to

and from those cities has fallen on the trucking industry. So something that would perhaps incentivize the use of a lighter-density

intermodal product like Road Railer might be worth thinking

about.

And then the double-stack technology that we have already is

awfully efficient and really does make a lot of sense to try and

channel as much of the freight into those double-stack lanes as possible between the big cities like Dallas and L.A., Seattle and Chicago, Chicago and New York, perhaps even Chicago and Atlanta.

But double-stack is not going to work in 95 percent of the markets;

that is where we need to look at some of these other alternatives.

And then, as a last comment, I think somebody mentioned the

concept of using the inland waterway system or short sea shipping

to try and provide a bit of a relief valve. It is worth looking at. It

is probably not going to solve the problem broadly, but it may get

us around one of the bottlenecks like the Howard Street Tunnel,

which I suspect would probably cost something on the order of a

quarter of a billion dollars to rebuild so that you could run doublestacks through it.

Mr. MEYER. Mr. Chairman, if I might make a couple comments

as well.

I think, in response to your question, in some sense the answer

is it all depends on what you are focusing on. You have a spectrum

of where you have transportation infrastructure that is clearly the

responsibility of government today—roads, that type of thing. The
34

other end is infrastructure that is clearly the responsibility of providers such as railroads. Then you have the in-betweens, where you

have kind of got public-private activities going on.

In the area where you have public sector responsibility in terms

of infrastructure, State Highway Departments, that type of thing,

I think a lot can be done to look at different ways of examining

what the needs are with regard to freight movement. I mentioned

to you already the truck-only lane study that was done in Georgia.

Prior to that study, the State DOT really had not thought much

about it. Now they have jumped with both feet into that concept

and we have two corridors now under design to do those kinds of

truck-only lanes.

On the private side, in terms of how do you influence or try to

influence what happens with regard to transportation infrastructure there, I think you are really talking about taxing and other

types of incentives to get that to happen, I don’t think you are necessarily talking about direct Federal investment. And then there

are those in-between like the intermodal terminals where in fact

you do have issues with regard to what is the role of the Federal

and State government along with the private sector.

Going back to your question about process, I would just simply

note that, as I said earlier, I do chair this freight roundtable, which

includes Secretary Shane and members of his staff, along with representatives from APL, the president of APL, shippers, Dell, Johnson and Johnson. That roundtable was supposed to have ended

about a year or so ago, and the process, the dynamic of having the

public and the private people together to talk about these issues

that actually came up with this so-called framework has been so

good that people don’t want to end it.

And there are a lot of States, such as Minnesota and Washington

State, Oregon and others, that have actually formed freight advisory committees to help advise governments at the State and metropolitan levels what needs to happen with regard to incorporating

freight more into the investment strategies of those things.

I would love to see more of that happen because when I have

been involved in those types of activities, when I was with the

State DOT myself or now with the TRB and the freight roundtable,

a lot of really good things come out the other side that really do

make a difference. So a process—I don’t know if it is a TRB group,

if it is an advisory committee, or whatever the case is, but anything

that can be done to encourage that fertilization, cross-fertilization

at the Federal, State, and local levels I think would be well worth

it for the Nation.

Mr. PETRI. Well, within companies and within factories, they

have all these different techniques for improving the flow of material and continuous improvement, identifying bottlenecks, all of

that. And it is not that different in concept in terms of sitting back

and looking at North America or whatever and moving people and

goods within our larger circumstances.

Clearly, railroads and feeder things is sort of just a basic thing,

that is not really too applicable, but when you start getting into

huge volumes moving through congested areas, we are going to

have to come up with some better mechanism, whether it is public

or private or advisory, to help direct the larger community to mar-
35

shal resources and do continuous improvement or move things

away from those areas, whatever seems appropriate, or else we are

going to be wasting a lot of resources and be very inefficient, and

it could costs us long-term as an entity trying to survive in a bigger

world.

So I just appreciate your contribution here today. I hope you are

probably working with and advising the commissions that we have

asked to address some of these issues. We are eager to put in whatever time we can do to help contribute to this. It is not a silver bullet or a short-term solution; it is trying to come up with some overall approach.

And more resources may be one component, but until we spend

the time and effort to try to sort of think through how we are going

to solve problems, coming up with more resources, they won’t be

used as efficiently as they could be. And it is clear people will support more resources if they feel they are getting a return on them,

but we have got to come up with ways of giving people that assurance, and your testimony is helping us in that regard, so I thank

you very much for being here today.

The hearing is adjourned.

[Whereupon, at 12:00 p.m., the subcommittee was adjourned.]
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