U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Printing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

67–310—PDF 2010

S. HRG. 111–1042 

DOUBLING U.S. EXPORTS: ARE U.S. SEA PORTS 

READY FOR THE CHALLENGE? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON INTERNATIONAL TRADE, 

CUSTOMS, AND GLOBAL COMPETITIVENESS 

OF THE

COMMITTEE ON FINANCE 

UNITED STATES SENATE 

ONE HUNDRED ELEVENTH CONGRESS 

SECOND SESSION 

APRIL 29, 2010 

( 

Printed for the use of the Committee on Finance 

COMMITTEE ON FINANCE 

MAX BAUCUS, Montana, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

KENT CONRAD, North Dakota 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

BLANCHE L. LINCOLN, Arkansas 

RON WYDEN, Oregon 

CHARLES E. SCHUMER, New York 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

BILL NELSON, Florida 

ROBERT MENENDEZ, New Jersey 

THOMAS R. CARPER, Delaware 

CHUCK GRASSLEY, Iowa 

ORRIN G. HATCH, Utah 

OLYMPIA J. SNOWE, Maine 

JON KYL, Arizona 

JIM BUNNING, Kentucky 

MIKE CRAPO, Idaho 

PAT ROBERTS, Kansas 

JOHN ENSIGN, Nevada 

MICHAEL B. ENZI, Wyoming 

JOHN CORNYN, Texas 

RUSSELL SULLIVAN, Staff Director 

KOLAN DAVIS, Republican Staff Director and Chief Counsel 

SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS

RON WYDEN, Oregon, Chairman 

JOHN D. ROCKEFELLER IV, West Virginia 

JEFF BINGAMAN, New Mexico 

JOHN F. KERRY, Massachusetts 

DEBBIE STABENOW, Michigan 

MARIA CANTWELL, Washington 

ROBERT MENENDEZ, New Jersey 

MIKE CRAPO, Idaho 

OLYMPIA J. SNOWE, Maine 

JIM BUNNING, Kentucky 

PAT ROBERTS, Kansas 

(II) 

(III) 

C O N T E N T S 

OPENING STATEMENT 

Page 

Wyden, Hon. Ron, a U.S. Senator from Oregon, chairman, Subcommittee 

on International Trade, Customs, and Global Competitiveness, Committee 

on Finance ............................................................................................................ 1 

WITNESSES 

Lamb-Hale, Nicole, Assistant Secretary for Manufacturing and Services, Department of Commerce, Washington, DC .......................................................... 3 

Trottenberg, Polly, Assistant Secretary for Transportation Policy, Department 

of Transportation, Washington, DC .................................................................... 6 

Sundet, Leal, Coast Committeeman, International Longshore and Warehouse 

Union, Portland, OR ............................................................................................ 13 

Larson, Steve, chairman and president, Cat Logistics, and vice president, 

Caterpillar, Inc., Morton, IL ................................................................................ 16 

Rice, Errol, executive vice president, Montana Stockgrowers Association, Helena, MT ................................................................................................................. 18 

Bishop, Jeff, executive director, Oregon International Ports of Coos Bay, 

Coos Bay, OR ........................................................................................................ 23 

Wyatt, Bill, executive director, Port of Portland, Portland, OR .......................... 25 

Lutes, Phil, deputy managing director, Sea Port Division, Port of Seattle, 

Seattle, WA ........................................................................................................... 26 

Paulson, Larry, executive director, Port of Vancouver, Vancouver, WA ............. 28 

ALPHABETICAL LISTING AND APPENDIX MATERIAL 

Bishop, Jeff: 

Testimony .......................................................................................................... 23 

Prepared statement .......................................................................................... 39 

Lamb-Hale, Nicole: 

Testimony .......................................................................................................... 3 

Prepared statement .......................................................................................... 43 

Larson, Steve: 

Testimony .......................................................................................................... 16 

Prepared statement .......................................................................................... 49 

Lutes, Phil: 

Testimony .......................................................................................................... 26 

Prepared statement .......................................................................................... 58 

Paulson, Larry: 

Testimony .......................................................................................................... 28 

Prepared statement .......................................................................................... 67 

Rice, Errol: 

Testimony .......................................................................................................... 18 

Prepared statement .......................................................................................... 70 

Sundet, Leal: 

Testimony .......................................................................................................... 13 

Prepared statement .......................................................................................... 74 

Trottenberg, Polly: 

Testimony .......................................................................................................... 6 

Prepared statement .......................................................................................... 77 

Wyatt, Bill: 

Testimony .......................................................................................................... 25 

Prepared statement .......................................................................................... 83 

Wyden, Hon. Ron: 

Opening statement ........................................................................................... 1 

(1) 

DOUBLING U.S. EXPORTS: ARE U.S. SEA 

PORTS READY FOR THE CHALLENGE? 

THURSDAY, APRIL 29, 2010 

U.S. SENATE, SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS, COMMITTEE ON FINANCE, Washington, DC. 

The hearing was convened, pursuant to notice, at 1:11 p.m., in 

room SD–215, Dirksen Senate Office Building, Hon. Ron Wyden 

(chairman of the subcommittee) presiding. 

Present: Senator Cantwell. 

Also present: Democratic Staff: Jayme White, Staff Director, Subcommittee on International Trade; Rory Murphy, International 

Trade Analyst; and Hun Quach, International Trade Analyst. Republican Staff: Staci Lancaster, Staff Director, Subcommittee on 

International Trade, Customs, and Global Competitiveness. 

OPENING STATEMENT OF HON. RON WYDEN, A U.S. SENATOR 

FROM OREGON, CHAIRMAN, SUBCOMMITTEE ON INTERNATIONAL TRADE, CUSTOMS, AND GLOBAL COMPETITIVENESS, COMMITTEE ON FINANCE 

Senator WYDEN. Earlier this year, President Obama established 

the National Export Initiative and the goal of doubling exports over 

the next 5 years. I strongly support this goal, and so do members 

of this subcommittee, because our country does not export as much 

as it should or as it can. A national strategy to increase exports is 

a strategy that creates good-paying, family-wage jobs. That is what 

our country needs; that is what my home State of Oregon needs. 

I do think that it is far-fetched to believe that it is possible to 

double exports if our shipping lanes and freight lanes are as bottled 

up as they are currently. Our country needs to come up with a winning freight transportation strategy that jump-starts job creation 

and enables our producers to ramp up their exports. 

Exporters in the Pacific Northwest now find it increasingly difficult to get shipping companies to carry their goods to the markets 

that want them. Exporters in the heartland increasingly cannot use 

U.S. freight lines and sea ports to remain globally competitive. You 

cannot expect to create jobs if you cannot move freight efficiently 

in America. 

In one example, a lumber exporter in my home State was ready 

to contract with a mill in Philomath, OR in order to supply Japanese consumers with high-grade lumber, but, because of insufficient open ocean shipping capacity from Pacific Northwest ports, 

2 

the contract went to a Canadian firm. So, instead of 90 new jobs 

in Oregon, there are now 90 new jobs in Canada. That is unacceptable to me. It is going to be unacceptable to every member of the 

U.S. Senate. The point of this hearing is to develop a strategy to 

turn this around. 

In another example, Oregon onion producers are being hurt by 

ocean carriers that are reneging on their contracts by making fewer 

containers available to exporters. These unilateral actions result in 

poorer-quality onions because the cargo sits on the dock waiting for 

additional containers, and the cargo is delayed in reaching those 

crucial Asian markets. 

Oregon rice exporters are having similar problems shipping rice 

to Korea. I know that the shipping industry is a private market, 

but this market is clearly failing Pacific Northwest exporters, and 

this subcommittee is going to find out why and see what Congress 

can do to address the problem. 

The President put forward a 21st-century goal for exports, but 

producers cannot rely on an infrastructure from the last century to 

meet this challenge. According to a recent World Bank survey, the 

United States ranks as only the world’s 7th most efficient economy 

in terms of its infrastructure and 15th in the world in terms of logistics. The United States now lags behind Germany, Japan, Singapore, and a number of our principal economic rivals. I do not accept 

America being in 2nd place, let alone 15th. 

So one question before the subcommittee today is: what can be 

done to ensure that America’s sea ports and the infrastructure that 

surrounds them enable U.S. producers to compete in our markets 

and overseas markets? Sea ports, in my view, are the hub of the 

global supply chain. American sea ports serve as our exporters’ access to the global marketplace, and so they are the gateways to 

new jobs and to our country’s economic future. 

West Coast and Northwest ports especially are an essential component of our country’s ability to expand exports and strengthen 

our trading relationship across the Pacific. It is a fact that the 

economies of East and Southeast Asia are growing by leaps and 

bounds, and we must get our cargo quickly to these regions. 

Freight moves through the country in a variety of ways, over 

highways, railways, lakes, rivers, and through the air. These modes 

of transportation are interconnected and must seamlessly hand off 

freight from one mode to another, especially in the densely populated urban areas where congestion is already a problem. America’s 

freight transportation network should not be designed just to serve 

exports. 

Imports are also a vital component of the U.S. economy, because 

U.S. goods destined for export rely on imported components. Imports are important elements in U.S. manufacturing. So, for our 

producers to be globally competitive, they have to be able to reduce 

transit time, excess inventory, and they cannot address either of 

these imperatives if moving freight through our sea ports and 

intermodal transportation systems remains inefficient. 

This is the global supply chain that needs to be understood as 

transportation projects are designed and financed. As one witness 

will say today, the supply chain infrastructure of the United States 

is directly competing with the infrastructure of Germany, Canada, 

3 

and China, and we are falling behind. American producers and 

workers deserve freight infrastructure that improves their competitiveness rather than stifles it. 

The Committee on Finance spends a significant amount of energy 

working with the President to significantly negotiate reductions in 

foreign trade barriers, but these actions will not count for much if 

American producers cannot move their freight as efficiently as the 

Germans, the Canadians, or the Chinese. 

According to U.S. producers, moving goods through Canadian rail 

systems and sea ports is 2–3 days faster and more cost-effective 

than moving goods into and through the United States. This is a 

major, major barrier to the competitiveness of our producers and 

their ability to create jobs. 

Research shows that for each additional day it takes to move 

freight from the factory or farm through the port reduces exports 

by 1 percent, or by 7 percent if you are talking about a perishable 

good like fresh beef. So our aged infrastructure is costing U.S. exporters, and it is costing our country in a whole host of ways. 

One additional concern I have is, when businesses are looking for 

places to locate, they look at the state of the infrastructure that 

their business is going to rely on. The competitiveness of U.S. sea 

ports and the infrastructure that supports the supply chain is then 

a major factor in ongoing investment decisions. Why would you 

build a plant in the United States and employ American workers 

if there is an antiquated infrastructure, which I guess puts on our 

producers what I would call a slow tax? 

Today’s hearing can be seen as just one issue that this panel intends to examine in our Nation’s infrastructure and what it means 

to the competitiveness of U.S. producers. This is going to be important as members of the subcommittee seek to assist exporters in 

their home States as we try to meet the President’s challenge to 

ramp up exports. 

Senator Crapo, at the last minute—he just called me as I was 

walking in—has been called away to deal with a number of pressing matters on the financial reform bill, so I think at this point we 

will open our hearing with Nicole Lamb-Hale, who is the Assistant 

Secretary for Manufacturing and Services of the Department of 

Commerce. If you will come forward. And Polly Trottenberg, who 

is the Assistant Secretary for Transportation Policy at the Department of the Transportation. We appreciate your joining us. 

Why don’t we begin with you, Ms. Lamb-Hale? We will make 

your prepared remarks a part of the record in their entirety, and 

if you can summarize some of your principal concerns, that will be 

helpful. Welcome to both of you, and thank you for cooperating 

with the subcommittee. 

Ms. Lamb-Hale? 

STATEMENT OF NICOLE LAMB-HALE, ASSISTANT SECRETARY 

FOR MANUFACTURING AND SERVICES, DEPARTMENT OF 

COMMERCE, WASHINGTON, DC 

Ms. LAMB-HALE. Thank you, Chairman Wyden. 

Chairman Wyden, distinguished members of the subcommittee, 

thank you for giving me the opportunity to speak to you today 

4 

about national competitiveness and how it is affected by the state 

of our Nation’s transport infrastructure. 

As Assistant Secretary for Manufacturing and Services at the 

International Trade Administration, I welcome the subcommittee’s 

interest in this issue. Manufacturing and Services provides specialized industry expertise and economic analysis to foster America’s 

economic competitiveness and job growth. The Obama administration is deeply committed to expanding globally competitive manufacturing, exports, and job growth in the United States as part of 

America’s economic recovery. 

As a former Governor of Washington State, Secretary Gary Locke 

knows the importance of a strong supply chain infrastructure. The 

exports and imports that flow through Washington’s supply chain 

support more than 10 percent of the State’s private sector jobs. According to a U.S. Department of Transportation study, the transportation-related sector accounted for some 13 million jobs in 2008, 

or nearly 10 percent of the U.S. workforce. A U.S. Chamber of 

Commerce study points out that some 99 million other U.S. jobs 

are economically dependent upon the transportation sector. 

America’s manufacturing and services industries depend on our 

supply chain infrastructure to be competitive at home and abroad. 

One cannot thrive without the other. This infrastructure includes 

the ports and the interconnected roads, rail, and air connections 

that make American exports and job growth possible. 

The Department of Commerce views supply chain infrastructure 

from a competitiveness perspective; thus, we need to explore some 

key questions regarding U.S. supply chain infrastructure. What enhancements to U.S. infrastructure could help manufacturers stay 

globally competitive; what are we doing to move freight, people, 

and ideas as efficiently as possible; and what is our foreign competition doing by comparison? 

To answer these questions, Commerce has already begun the important process of examining our policies and programs, and also 

of seeking industry input to ensure that our companies can compete at every step in the supply chain process. 

As sourcing and product delivery operations span larger and 

longer distances, firms are transforming the way they look at and 

manage supply chains. No longer are individual companies competing with each other; entire supply chains are. Effective supply 

chains and just-in-time delivery systems drive modern global business. Supply chain infrastructure is the glue that binds successful 

trade routes. It affects the cost of every product in the United 

States. 

Inefficient connections and capacity limitations raise the cost of 

American products and make it harder to compete globally. Supply 

chain infrastructure is an important factor in a company’s decision 

on where to invest and employ people. These decisions require substantial lead times, and the quality of the infrastructure determines the attractiveness of a particular location. 

Our national supply chain infrastructure is a global competitiveness issue. A recent World Bank study rates the United States 

15th in logistics performance behind competitors like Germany, 

Singapore, Japan, and the United Kingdom. Senior executives from 

industry tell Commerce repeatedly that what is missing is a comVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00008 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
5 

prehensive and coordinated national policy approach to moving 

product in the United States. 

According to industry, the basic elements of a national policy approach must include viewing the supply chain infrastructure as a 

whole; emphasizing the needs of the system users, the manufacturers and shippers whose products flow through the system; ensuring 

that supply chain infrastructure enhances America’s economic competitiveness and export growth; acknowledging that security of this 

critical infrastructure system is vital; and recognizing that a competitive modern supply chain infrastructure is indispensable to the 

sustained recovery of American manufacturing and exports. In 

other words, a port cannot be viewed in isolation. It is only as competitive as the road, rail, and air networks to which it is connected. 

Industry today sees infrastructure as an interconnected network 

of physical transport facilities combined with modern information 

technology systems. The efficiency of this infrastructure, and the 

industries that depend on it, is affected by environmental and sustainability considerations, new financing options, education, and 

regulatory and trade security measures. This speaks to the growing 

sophistication and complexity of modern supply chains and their 

critical reliance on the quality of America’s supply chain infrastructure to support modern, high-tech manufacturing. 

In May 2009, the Departments of Commerce and Transportation 

held a national conference where industry validated every one of 

these ideas. Commerce is working with our colleagues at Transportation to further discussions toward the development of a new 

competitiveness-driven national freight policy, coupled with an investment strategy that recognizes the interconnections between 

various transportation modes and facilities. 

This includes developing a series of regional events to seek industry perspectives on how to develop an inclusive national freight 

policy, and I am happy to report today that Secretaries Locke and 

LaHood have executed an MOU which memorializes our agreement 

to collaborate on these issues. 

In light of current economic challenges, it is imperative that we 

immediately address key game-changing issues that could hinder 

our long-term recovery and our ability to compete in the global 

economy. Industry is increasingly aware that our global trading 

competitors, including Canada, Europe, and China, ensure their 

firms enjoy an integrated freight movement system. 

The global competitive challenge facing U.S. manufacturers and 

shippers is, thus, our incomplete supply chain infrastructure. These 

issues are integral to the National Export Initiative and to America’s economic recovery. Moving forward, we must have an efficient 

and well-developed logistics and transportation system to facilitate 

our export growth and the continued growth of our economy. 

I thank you for the opportunity to testify today and look forward 

to any questions you may have. 

Senator WYDEN. Thank you. We will be working very closely with 

you. I enjoyed the breakfast that we had recently with the Secretary as well. 

Ms. LAMB-HALE. Thank you. Great. 

6 

[The prepared statement of Ms. Lamb-Hale appears in the appendix.] 

Senator WYDEN. Ms. Trottenberg, welcome. 

STATEMENT OF POLLY TROTTENBERG, ASSISTANT SECRETARY FOR TRANSPORTATION POLICY, DEPARTMENT OF 

TRANSPORTATION, WASHINGTON, DC 

Ms. TROTTENBERG. Thank you, Chairman Wyden. Thank you for 

inviting me to appear today to discuss the role of U.S. sea ports 

and promoting U.S. commerce, U.S. competitiveness in world markets, and in meeting future projected growth in exports. 

I, too, welcome the subcommittee’s interest in this topic, which 

raises many key transportation policy, financing, and governance 

issues. I am glad to be here with my colleague from the Department of Commerce and look forward to working together on our 

new MOU, particularly tightening the nexus between trade and 

transportation policy. 

As you have noted, Mr. Chairman, President Obama recently announced the goal of doubling exports within 5 years in the U.S., 

and he has created an export promotion cabinet. This growth of exports will require new investments and more efficient operations at 

U.S. ports and, just as importantly, the road, rail, water, and air 

networks that serve them. 

The 2014 completion of the new locks on the Panama Canal will 

draw increased freight traffic to the East and Gulf Coast. This will 

alter freight flows throughout the U.S. and require some thoughtful 

planning. 

Secretary LaHood was recently in Panama and subsequently announced that U.S. DOT will undertake a major new study on the 

potential impacts from the Panama Canal expansion, as well as 

changes at the Suez Canal and the opening of possible new Arctic 

routes. This study will enable us to consider how the U.S. ports 

and freight infrastructure system can be better prepared to meet 

these new trade challenges. 

To get there, we will also need to develop a new national focus 

on intermodal freight policy and investment, and we must ensure 

these policies fit within the administration’s visions for transportation. Secretary LaHood has clearly identified five key goals in 

setting national transportation policy: safety, state of good repair, 

economic competitiveness, livability, and environmental sustainability. We believe that freight transportation policy that grows out 

of these key goals will allow our domestic industries to compete 

globally, create jobs, reduce energy use, and protect the livability 

of our communities. 

Unfortunately, our national transportation policy has often failed 

to target funding towards investments that would be most effective 

in achieving these goals. We have been hampered by our Nation’s 

stove-piped approach to transportation funding and by the complex 

governance issues surrounding supply chains. 

However, our administration, with the help of Congress, has 

taken action to address some of our national freight needs. With 

the passage of the Recovery Act, Congress made $1.5 billion available for the Multi-Modal Competitive Discretionary TIGER Grant 

Program. Out of the $1.5 billion in TIGER (Transportation InvestVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00010 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
7 

ment Generating Economic Recovery) grants that DOT awarded, 

fully half the money, $765 million, went to projects that benefit 

freight movement. Including six port projects from Maine to Alaska, freight rail was the single-largest category of funding, including 

such important projects as the Crescent Corridor, CREATE (the 

Chicago Regional Environmental and Transportation Efficiency), 

National Gateway, and Colton Crossing. 

These TIGER awards represent a significant shift from the current allocation of Federal transportation dollars to freight infrastructure, which has historically not focused on rail or ports. In addition, we have just released draft guidance for the $600-million 

National Infrastructure Investments Program, funded in the fiscal 

year 2010 Appropriations Act. We expect this program to be very 

similar to TIGER and will continue the Department’s focus on 

freight movement. 

The administration has also proposed a National Infrastructure 

Innovation and Finance fund in our fiscal year 2011 budget. The 

fund will be particularly targeted to multi-modal projects that involve multiple jurisdictions and achieve a high level of economic 

benefits. Clearly, major freight projects will compete well. The fund 

will also build upon the various infrastructure and bonding proposals that many members, including you, Mr. Chairman, have 

championed. 

Secretary LaHood recently announced that DOT will be formulating its reauthorization principles in the coming months. In preparation, we have been engaging with a diverse range of stakeholders through the Department’s Surface Transportation Outreach 

Tour, which has so far held sessions in New Orleans, Minneapolis, 

and Los Angeles, and will be in Houston next week and Washington this summer. 

In addition, earlier this year the Secretary held a 2-day port 

summit in San Diego, where freight stakeholders expressed support for a more fully integrated freight transportation system in 

order to improve efficiency, economic growth, and environmental 

sustainability. 

One recurring theme of all these discussions has been that a national focus on freight is necessary at DOT, along with a strong desire for flexible funding to allow us to take action. We look forward 

to working with Congress and our stakeholders on freight policy in 

the coming months as the authorization debate develops. 

I thank the subcommittee for inviting me to testify today and 

would be happy to respond to any questions. 

[The prepared statement of Ms. Trottenberg appears in the appendix.] 

Senator WYDEN. Well, thank you both. 

Let me see if I can kind of capture the sentiment behind this 

hearing and what I see going forward. I walked you all through a 

number of specific instances—lumber, onions, rice—where people in 

Oregon are losing out on good-paying economic opportunities, jobs, 

opportunities to get ahead, and there is enormous frustration about 

this. My State has more than 10 percent unemployment. We absolutely have to turn this around. 

So you heard me walk through these several examples, Ms. 

Trottenberg. What would you say if you were standing in front of 

8 

the lumber, and onion, and rice exporters? What would you say 

when they were really angry and really frustrated, and what would 

you tell them the Obama administration is doing to turn this 

around and when it would actually get better? 

Ms. TROTTENBERG. Yes. That is a very good question, Mr. Chairman. Believe me, we hear from the shippers as well and know the 

great frustration out there, which has in part been driven by the 

larger economic downturn, which has created all kinds of hardship 

all over the country. 

Particularly, I know the frustration coastal shippers have had 

that, because we are importing fewer containers that are coming 

east from the Pacific, there are fewer containers available for us to 

export our goods going westward. The DOT has been involved in 

discussions with shippers and carriers on this. 

You know the lead entity is the Federal Maritime Commission, 

which is actually charged with looking at shipper complaints, with 

dealing with antitrust issues, and I know they have opened, in 

March, an investigation. They are looking pretty intently into what 

the shippers are doing and trying to see if the situation can be alleviated. 

Senator WYDEN. So when do you think I can tell these people 

who are very angry about what is happening now that there are 

going to be some changes? I would ask you that, and start there. 

When do you think we are going to see some relief? 

Ms. TROTTENBERG. I think there is a little bit of good news. I 

mean, the economy has picked up a little bit, and at least we are 

getting reports that there are starting to be more shipping containers available for U.S. exporters. As I mentioned in my testimony, slightly longer-term, Department of Transportation, we are 

now trying to, to the extent that Congress has given us discretionary funding, invest in more freight projects. We are doing a 

couple on the West Coast, some in the middle of the country. 

Again, I think that the Federal Maritime Commission should have, 

hopefully, some results pretty soon in terms of working with the 

carriers to get them to produce more containers for your shippers. 

Senator WYDEN. I am a markets-oriented Democrat. That is my 

guiding principle for health care, the tax reform bill with Senator 

Gregg. But I want to know whether you think this is going to resolve itself through normal market forces or whether other steps 

need to be taken to address a totally unacceptable situation. Is the 

market just going to take care of this and all the people who are 

so angry now are going to see this remedied? 

Ms. TROTTENBERG. I mean, I think the market will take care of 

some of it. Again, one thing I cannot do is, I cannot tell you for the 

FMC what their investigation will turn up. Believe me, we have 

talked to shippers and know their concerns, that the carriers out 

there, that there is some kind of, perhaps, unfair behavior going 

on. We do have a regulatory body that is investigating that. 

From DOT’s point of view, we are tracking all the data on what 

is happening and doing our own part to talk to the shippers, who 

have come in basically to tell us their concerns. We have also 

talked to a lot of the carriers and tried to parse out the economic 

situation that they find themselves in. The carriers have recently 

told us that they are trying to move more U.S. exports. They are 

9 

hearing the frustration from your constituents and from members 

of Congress, and from members of our administration. So I do 

think we are starting to see a bit of progress. 

Senator WYDEN. Do you have any evidence now that the shipping 

companies are colluding to control shipping prices? 

Ms. TROTTENBERG. I cannot say that I do, again, because the 

FMC does the actual investigation as to whether some kind of illegal collusion is going on. 

Senator WYDEN. Should the shipping companies—this is a policy 

question—in your view, continue to enjoy an exemption from U.S. 

antitrust laws? 

Ms. TROTTENBERG. I think at the moment that is a question that 

is being discussed in the administration which I cannot give you 

an answer to, but certainly—— 

Senator WYDEN. What is your view? 

Ms. TROTTENBERG. Well, I think obviously the recent situation 

we have here where there has been such a problem for U.S. exporters has raised the question about whether the antitrust immunity 

that the shippers enjoy, what effect has that had and do we need 

to take a closer look? I cannot tell you at the moment that I could 

say yes or no as to whether they should continue to have it, but 

I certainly think it is something now that many folks are taking 

a look at. 

Senator WYDEN. And since I have you here, though, before the 

subcommittee, do you think it ought to be reexamined? 

Ms. TROTTENBERG. It is being reexamined. 

Senator WYDEN. And you think that is the correct approach? 

Ms. TROTTENBERG. Yes. I think it is certainly fair to take a look 

at it. Obviously it came out of, I guess, the Staggers Act when the 

industry was deregulated. That part of it was not deregulated, and 

circumstances are always changing. 

Senator WYDEN. Let me ask you a couple of other questions, and 

then we will move on to you, Ms. Lamb-Hale, and get you into this. 

I think a lot of my constituents also want to know about another 

matter that you are involved in, Ms. Trottenberg, and that is 

whether there are any developments on the Mexican truck issue. 

There is great concern about the prospect of various retaliatory 

measures. Can you give us an update on anything with respect to 

the Mexican truck issue? 

Ms. TROTTENBERG. Yes. I know that is an issue of burning interest all over the country, and certainly for many members of Congress. From U.S. DOT’s point of view, I mean, our sort of—and 

again, we work with several parts of the administration with that, 

our Federal Trade Representative and the State Department, sort 

of a multi-agency effort. 

Our number-one responsibility is safety, and Secretary LaHood 

has pledged to work with our Mexican counterparts—he was recently in Mexico—to see if we can come to some kind of arrangement, particularly one that would ensure safe shipping, satisfy the 

Mexicans’ concerns, satisfy our treaty obligations. He has pledged, 

working with his Mexican counterparts and other parts of the administration, to hopefully have something to bring back to Congress sometime soon. 

Senator WYDEN. What does ‘‘soon’’ mean? 

10 

Ms. TROTTENBERG. Well, that, I am not sure how soon is soon. 

Senator WYDEN. Two weeks? A month? Any idea? 

Ms. TROTTENBERG. Probably not 2 weeks. I think, again, DOT’s 

focus is particularly on the safety elements of it, but we also have 

to work with some of our other Federal agencies and some of our 

key congressional leaders who care deeply about this issue on both 

sides. So I cannot give you a deadline, but believe me, it is something that is getting—— 

Senator WYDEN. Urgent. 

Ms. TROTTENBERG. It is getting attention at the highest levels of 

the administration. 

Senator WYDEN. Urgent, urgent. 

Let me ask you about one other issue, a good news issue. I think 

you are aware that I am the principal author of the Build America 

bonds program. We had tremendous support, particularly from 

Chairman Baucus. It could not have happened without Chairman 

Baucus. We thought this might result the first year in perhaps $4 

billion worth of them being issued. We are now over $90 billion 

worth of bonds. So, they have succeeded our hopes by 20 times, 

plus. 

I am wondering if you all are looking at the question of whether 

Build America bonds could contribute to infrastructure designed to 

improve freight mobility. It is very clear that we are going to be 

continuing to look for new revenue to fund infrastructure, and I 

think it would be helpful to have on the record your thoughts about 

the possible application of Build America bonds to infrastructure 

that advances freight mobility. 

Ms. TROTTENBERG. Absolutely. Yes. They have been a fantastic 

success. Everywhere we go, we hear great raves about them. 

We are doing an analysis right now looking at the different types 

of projects that so far the Build America bonds have been used for. 

I think there has not been a lot of use thus far on freight-specific 

projects. I think it is skewed more heavily towards roadways, and 

we are still looking into exactly what all of these projects are. 

But certainly, as I mention in my testimony, the administration 

will soon be putting forward a legislative proposal for its new infrastructure fund, and I think it will dovetail in a lot of ways with 

some of what was accomplished in Build America bonds, and certainly freight infrastructure is going to be one of the key priorities. 

Senator WYDEN. So you think, as the administration lays out 

plans to advance its freight mobility agenda and improve the infrastructure, that the areas that it will focus on for funding would include Build America bonds? 

Ms. TROTTENBERG. Build America bonds, or some similar bonding-type proposal, as well as loan guarantees and grants where 

necessary. I think we are particularly interested in the whole array 

of potential tools to get infrastructure projects going. 

Senator WYDEN. All right. 

Let us move on to you, Ms. Lamb-Hale. What is striking about 

your testimony—you make a number of good points—is the idea 

that entire supply chains are competing against each other. This is 

not just individual companies competing against each other, but 

supply chains are competing against each other. And certainly you 

make note of the fact that a lot of our competitors have a much 

11 

more integrated freight movement system than we do. Without addressing the supply chain issue, what is going to happen to the 

President’s objective of doubling exports? 

Ms. LAMB-HALE. Well, I think that that objective will be compromised. I think that it is important to recognize that Canada, the 

EU, and other countries have all developed a coordinated, holistic 

approach to multi-modal freight movement, and these strategies 

are essential to the competitiveness of our manufacturers. 

I think one example that is worth noting is that Canadian port 

officials have told us that often the port officials participate in 

trade missions. It is a full package when they go overseas to promote Canadian exports. All pieces of the puzzle are represented, 

and I think that it is important for us to remain competitive, our 

industries to remain competitive. It is important for us to have a 

coordinated, holistic approach, which is why we are so happy to be 

partnering with Transportation to do just that. 

Senator WYDEN. Now, you mentioned trade missions. What specifically are these other countries doing that presently we are not 

doing? 

Ms. LAMB-HALE. Well, I think the key is that they are bringing 

along their port officials. When I talk about supply chains competing, it is not just the individual companies, but it is the whole 

infrastructure. There is coordination, for instance, in Canada, from 

a national standpoint, provincial, and local. I mean, ports cannot 

be viewed in a vacuum. You have to look at the rails, you have to 

look at air travel, the roads; all of it comes together. 

For the countries that present a coordinated approach, they really have the edge, and we can have that too if we work together to 

come up with a national freight policy. It is something that industry has been asking us. I think that the first step, I am happy to 

report, is that we have an understanding and cooperation between 

the Departments of Commerce and Transportation to work toward 

that goal. 

Senator WYDEN. So that is your cross-agency program that you 

all have been talking about? When do you expect to have that 

ready to go? 

Ms. LAMB-HALE. Well, we are starting it right away. In fact, this 

summer we are initiating regional tours where we are speaking to 

industry about the things that we should be doing to help them to 

remain competitive from a transportation standpoint. The MOU is 

the first step, but we certainly have regional tours planned, and we 

are looking to get industry input. I think that that is going to be 

critical as we design policy in this area to understand what the 

global competitiveness issues are that are faced by industry. 

Senator WYDEN. What do you want to change about your relationship with DOT from what it is today? 

Ms. LAMB-HALE. Well, I think we just want to combine our expertise. I mean, I think it is important—and I know the President 

is supportive of this, and certainly Secretaries Locke and LaHood— 

that we not operate in silos. Transportation brings its expertise 

with carriers, we bring our expertise with international trade and 

competitiveness issues. I think the combination will result in good 

news for our manufacturers as production continues to improve 

and increase, and exports increase. 

12 

Senator WYDEN. Is there anything you would like to add with respect to the agenda for financing infrastructure? You heard me ask 

Ms. Trottenberg and smile excessively when she talked about Build 

America bonds, but are there other areas that you think ought to 

be looked at for generating the revenue to improve freight transportation? 

Ms. LAMB-HALE. Well, Federal funding certainly is not the only 

answer. We have to look at all kinds of strategies. I would note— 

and Ms. Trottenberg can speak to this more specifically—under the 

Recovery Act, the TIGER grants, we saw that industry was really 

willing to contribute to the funding with respect to that program. 

So I think that we should really look at public-private partnerships. We cannot rely on Federal funding alone. 

Senator WYDEN. You would like to expand the TIGER programs? 

Ms. LAMB-HALE. Well, I really cannot speak to that. I think that 

as part of our regional tour, as we speak to industry, I think we 

should explore what their views of that are. I cannot speak to what 

Transportation may or may not be able to do in that regard. But 

I think that we really need to work together across Federal agencies and really listen to what industry has to say with respect to 

the competitiveness issues we have discussed. 

Senator WYDEN. Well, you both have been very, very helpful. I 

would only say, in wrapping this part of the program up, that I 

want to communicate the strongest possible sense of urgency about 

this because, at a time when my part of the country is just getting 

flattened economically, we cannot come back without these kinds 

of changes. 

I mean, the reason I walked you through some of these specific 

cases is this is what my constituents are asking about. This is what 

the Wall Street Journal reported on. These were sort of Oregon 

cases, large in the Wall Street Journal, and it is not going to be 

enough for us to say, well, we are working on these, and we are 

having interagency discussions, and the like. We are going to have 

to have answers for people. We are going to have to have answers 

quickly. 

So we will be back at you very soon, and we will excuse you both 

at this time. Thank you for the cooperation with the subcommittee. 

Ms. LAMB-HALE. Thank you, Chairman Wyden. 

Ms. TROTTENBERG. Thank you, Mr. Chairman. 

Senator WYDEN. Let us move on now to Mr. Leal Sundet, Coast 

Committeeman, International Longshore and Warehouse Union, 

Portland, OR; Mr. Steve Larson, chairman and president of Cat Logistics and vice president of Caterpillar, Morton, IL; and Mr. Errol 

Rice, executive vice president of the Montana Stockgrowers Association, Helena, MT. 

Welcome to all three of you. I am particularly pleased to see Mr. 

Sundet here, my constituent from beautiful Portland, OR. 

We are going to make your prepared remarks a part of the hearing record in their entirety, and, if you could take 5 minutes or so 

and summarize your major concerns, we will have some questions. 

Feel free—also, you heard the administration witnesses. Feel free 

to incorporate into your remarks anything you would like to do to 

respond to what they have said as well, because I think often that 

13 

is a very helpful way to generate discussion, to have people like 

yourselves respond to what the administration said. 

So Mr. Sundet, welcome. 

STATEMENT OF LEAL SUNDET, COAST COMMITTEEMAN, INTERNATIONAL LONGSHORE AND WAREHOUSE UNION, PORTLAND, OR 

Mr. SUNDET. I get to go first, Senator? I have not seen you in 

a long time. 

Senator WYDEN. It is only right that Oregon comes first. 

Mr. SUNDET. I want to say good morning, because for me it is 

good morning. 

Senator WYDEN. There you are. 

Mr. SUNDET. I get used to this 3-hour time span because I have 

until noon and nobody back there bothers me, and all of a sudden 

now I am getting all the e-mail messages. 

Senator WYDEN. I hear you. 

Mr. SUNDET. Because they just wake up about 9 o’clock. 

Senator WYDEN. Oregonians are in demand. 

Mr. SUNDET. Yes, they are. 

Did you want me to read this into the record or does it matter 

to you? 

Senator WYDEN. Why don’t you, if you would not mind? Oregon 

longshoremen are always pretty good in terms of keeping it simple 

and blunt. Why don’t you just summarize your big concerns? We 

will put your full remarks into the record. You heard the administration folks, and you guys are literally out there every day trying 

to move these goods and put people to work, and I would be appreciative of your just laying out your thoughts. 

Mr. SUNDET. I think the business that we are in is a very complicated business, as you well know. It is largely market-driven. I 

guess this is a hearing on efficiencies, if you will, particularly with 

respect to the ports. I represent, as an elected official, longshoremen from Canada, Washington, Oregon, and California, as well as 

longshoremen in Hawaii. 

With respect to the three western States, there are five major 

container ports, which are, as you all know, Seattle; Tacoma; Portland being the smallest of the major container ports; Los Angeles 

and Long Beach combined, which is probably the largest container 

port complex in the world; and the Bay Area, which is Oakland. 

The efficiencies on the docks themselves are very efficient. Longshoremen and the terminal operators we work with, carriers, we 

can get the can on and off the ship as efficiently as anybody in the 

world. That is not a problem. The carriers, port authorities, have 

invested a considerable amount of money in cranes and so forth, 

wheeled vehicles to move containers directly from the ship to places 

on the dock for storage. It works. It works very well. 

The problem is moving the can or receiving the can to and from 

the terminal itself. That is the bottleneck. If I compare, as an example, what is going on in Canada—I just came back from a trip 

in Canada. I was at their Delta facility. As you probably also have 

heard, they have a facility at Prince Rupert, which is designed to 

have direct movement of container from ship to rail directly into, 

I think it is Chicago or Detroit, in the United States. 

14 

Some of the differences with that model are, they have brought 

rail right directly to the dock and made it a very integral component of moving that can to and from that facility. We have that in 

the United States as well. We have a nice facility in Portland, as 

an example. We have facilities in all the major ports like that, but 

not enough of it. Though we may put the rail right onto the docks, 

there are all kinds of bottlenecks throughout the rail infrastructure 

system that need to be fixed, and I do not think that the United 

States is putting the kind of money in to get that done. 

I think you mentioned it. When you have inefficiencies in the 

transportation system, it, in effect, is a tax. You are taxing the producers. It is a tax so you can spend your money—— 

Senator WYDEN. Slow tax, is what we call it. 

Mr. SUNDET. Say it again. 

Senator WYDEN. Slow tax. 

Mr. SUNDET. Slow tax. That is where we need to be putting our 

money, is in the east-west infrastructure. 

Now, one of the things we are doing—and we are doing it largely 

for political purposes because it plays well to our constituents or 

to politicians’ constituents—as an example, through TIGER funding, we spent $30 million in the Stockton-Sacramento corridor for 

so-called short sea shipping or marine highway. That is money not 

well-spent. It would be better spent in the east-west infrastructure 

side of it. There are other projects it could have been spent on. The 

concept of a marine highway is not a reality in the marketplace. 

It will not work. There are too many inefficiencies associated with 

it. 

The reality is, you are not going to displace trucks. The trucking 

industry has been deregulated to a point where it is highly efficient. It is highly efficient to the shipper. I use ‘‘shipper’’ as being 

the Costcos or the onion grower, and I use the word ‘‘carriers’’ to 

be the vessels. That is the difference in terms that we use in our 

industry. So shippers is your Costco and carriers is your people 

who own the ships and move the ships. 

That truck is still the most efficient way to move cargo, particularly in the short run. The railroads even understand that, and 

they have moved in to interstate commerce or interstate movement 

of goods. The short movement, even the movement of cargo within 

States, is owned by the trucks, and it is going to continue to be 

that way. No matter how much subsidy you are going to try to put 

in on an idea that our constituents like to hear about, which is 

short sea shipping, at the end of the day it cannot operate because 

it cannot compete with the truck. 

So along that line, we have to figure out ways to make the movement of trucking more efficient, while at the same time dealing 

with our communities that they have to run through, and so forth. 

We have to start looking at the movement of cargo, especially as 

we get in closer to ports, where neighborhoods are encroaching on 

ports. 

We have to say that, when we plan our roads and we do our 

planning at the local levels, we have to look at the movement of 

cargo, particularly by truck, as being at the same level as bicycle 

paths, pedestrians, and so forth. It makes no sense to cut off the 

left turn of a truck going into a port complex because I want to put 

15 

a green median in there, knowing that the truck then might have 

to go 3, 4, 5 more miles to get to the same spot and burn up all 

the diesel, or whatever it is burning. That is not helping the person 

who is living in the community. That person is not thinking about 

it when he looks at the median, but in reality he is breathing that 

extra pollution, if you will, or diesel. So these are all the things we 

are talking about. 

I do want to make one point, because you might not ask me. 

There was a point you asked the previous panel, whether the supply and demand will take care of the shortage of containers for exports. I think it will. I think it will. 

The reason you have a shortage of containers right now, empty 

containers, is because when we had the downturn, if you will—and 

it was the worst downturn that we have seen in our industry in 

75 years, and was almost exclusively a container downturn in the 

major container ports. We never saw anything like it. Very devastating to our members. 

The empty containers had to be stored. There is no demand for 

them. There are no imports coming in, no exports going anywhere. 

It was a worldwide dilemma. So the containers had to be stored 

someplace. Well, they are not going to store them in the United 

States. Land is too valuable. They store them in China and other 

places. 

So those empty containers are repositioned overseas, and it is 

going to take a while to get them moved back here. The only way 

they are going to come back here, they are not going to come back 

to pick up an export load. They are going to come back with something in them. So as the demand for imports increases, those 

empties will be here, and they will be available for export, with one 

caveat. 

I am going to draw an example. In 2005, the demand for imports 

was huge in this country. It was so huge, that high-value imports, 

you could get about $4,000 a can, a carrier could, for his container. 

On the other side of the coin, a low-value import load, largely an 

agricultural container, would only pay about $400. 

So that carrier, because he is looking at dwell time on the container, he is looking at the fact it has to be loaded, unloaded, 

moved, sits around, it is going to take him a while before he gets 

the container back so he can get another $4,000 for it. So that carrier was more interested in sending the container back empty so 

he could turn it into a $4,000 bill than to let it go to a $400 bill, 

and our exporters were having trouble getting people to even pick 

up their cargo as a consequence. 

Senator WYDEN. If I let you continue to make all of these logical 

points, I will be showing blatant favoritism to Oregon, which I normally show. 

Mr. SUNDET. I am done. You do not have to ask me any more 

questions. 

Senator WYDEN. You said it extremely well, and thank you very 

much also for making the long trek and for all the good work that 

the longshore folks do in Oregon and around the country. We are 

really glad you did it. Extra points for not reading testimony. It 

has been very helpful. 

[The prepared statement of Mr. Sundet appears in the appendix.] 

16 

Senator WYDEN. Let us go now to Mr. Larson, chairman and 

president of Cat Logistics, vice president of Caterpillar, Inc. 

Mr. Larson, welcome. 

STATEMENT OF STEVE LARSON, CHAIRMAN AND PRESIDENT, 

CAT LOGISTICS, AND VICE PRESIDENT, CATERPILLAR, INC., 

MORTON, IL 

Mr. LARSON. Thank you very much. Chairman Wyden, thank you 

very much for the opportunity to testify today about increasing exports and the challenges presented for U.S. sea ports. 

As one of America’s largest exporters and the world’s leading 

manufacturer of construction and mining equipment, diesel and 

natural gas engines and turbines, Caterpillar is keenly aware of 

the importance of exports for both job creation and economic expansion. We also understand how absolutely critical it is to have an 

effective and seamless supply chain if we are going to increase exports and maintain our global leadership as a U.S. manufacturer. 

Caterpillar exports to nearly 200 countries around the world. In 

2008, the average in-transit inventory of U.S. machines and engines exported on any given day was about $500 million. During 

that year, we spent more than $5 million a day on logistics to support exports of U.S.-built machines and engines and spent $2.4 billion worldwide on transportation-related expense. 

Cat Logistics has a key role in supporting Caterpillar exports by 

providing integrated logistics solutions and managing the company’s transportation spending. The competitive advantage we seek 

to deliver for Caterpillar is dependent on goods moving at a consistent high rate of velocity. While a number of factors, both internally and externally, impact velocity, the state and condition of the 

transportation infrastructure supporting our supply chain is exceptionally important. 

While our Nation’s sea ports are a critical link in our transportation infrastructure for both imports and exports, I would like to 

stress today the significance of all modes of transportation and the 

importance of their integration and connectivity. 

Whether we are importing or exporting, goods are often moved 

through different transportation modes before they ever get to a 

port. If we are going to be successful in growing our economy 

through increased exports, our entire freight movement system 

must be improved dramatically and work as an effective, modern, 

and integrated whole. 

Mr. Chairman, with over 90 percent of the world’s consumers living outside our borders, international trade and exports will play 

an increasingly crucial role in driving domestic economic growth, 

creating new jobs and ensuring continued U.S. leadership in the 

global economy. 

Free trade agreements have proven to be one of the most effective ways to open up foreign markets to U.S. exports. One of the 

most significant steps that Congress can take to spur U.S. exports, 

reenergize our economy, and bring people back to work would be 

to pass the Panama, Columbia, and Korea free trade agreements. 

But whether the export opportunities are in our own hemisphere 

or on the other side of the world, the goods we sell must travel 

17 

through a multi-modal transportation system that includes roads, 

rail, water, and air. 

The condition and integration of these various modes has a significant direct impact on our ability to move products quickly and 

efficiently and at the lowest possible cost. Our transportation system is the backbone of our economy. Economic opportunities are directly tied to the efficiency and reliability of this system. Unfortunately, our transportation network is aging and under-funded. 

Our Nation’s highways, bridges, and tunnels are deteriorating 

rapidly, while congestion is increasing. Compounding the congestion and deteriorating infrastructure are the various and often conflicting State regulations and permitting requirements with which 

we must comply when moving freight. 

Our Nation’s rail network is increasingly seen as a cost-efficient 

way to help alleviate growing freight congestion on our roads, yet 

there are serious questions about the ability of the existing system 

to handle increased volumes, and the capacity and design of the 

current railroad infrastructure limits Caterpillar’s transportation 

options. 

Like our road and rail networks, our ports are also posing significant challenges for exporters and logistics professionals. Lack of capacity at U.S. ports and inadequate mode integration are impeding 

the flow of both imports and exports through the U.S. port system. 

Capacity constraints at major ports are forcing shippers to disperse their shipments through multiple ports or divert shipments 

altogether through Canadian or Mexican ports. Caterpillar has 

come to increasingly utilize Canadian ports for both import and export containers due to improved transit times and costs. Approximately 40 percent of Caterpillar’s imports and exports now move 

through Canadian ports, with 50 percent of our European imports 

arriving at Halifax. 

Mr. Chairman, if we are going to be successful in growing our 

economy through a doubling of our exports, our entire intermodal 

transportation system must be improved dramatically and begin to 

work as an effective, modern, and integrated whole. We can no 

longer view any transportation mode in isolation, but rather must 

look at our freight movement system comprehensively and in its 

entirety. Nothing short of our global competitiveness is at stake, 

and it is clearly a time for action. 

Thank you, Mr. Chairman, for the opportunity to share with you 

the views of Caterpillar on this crucial topic. Caterpillar stands 

ready to work with you, the Congress, and the administration on 

these important issues. 

Thank you. 

Senator WYDEN. Thank you very much, Mr. Larson. We have 

worked with you often in the past on these kinds of issues and appreciate your constructive suggestions. I will have some questions 

in just a moment. 

[The prepared statement of Mr. Larson appears in the appendix.] 

Senator WYDEN. Mr. Rice, let us go with you. You have also 

made a long trek as a westerner, and we appreciate it. 

18 

STATEMENT OF ERROL RICE, EXECUTIVE VICE PRESIDENT, 

MONTANA STOCKGROWERS ASSOCIATION, HELENA, MT 

Mr. RICE. Thank you, Mr. Chairman. 

Mr. Chairman, thank you for the opportunity to speak to you on 

behalf of the members of the Montana Stockgrowers Association regarding our point of view on sea port infrastructure and beef exports. My name is Errol Rice. I currently serve as the executive 

vice president for the Montana Stockgrowers Association, one of the 

oldest cattle ranching organizations in the United States, established in 1884. 

Our mission is to protect and enhance Montana ranch families’ 

ability to grow and deliver safe, healthy, environmentally wholesome beef to the world. Our ranch families’ livelihoods depend on 

sea ports, which are our most dynamic and vibrant waterway centers of trade and commerce. 

There was a time when the largest part of ranching’s economic 

activity was domestic, but our future depends on our ability to be 

globally competitive. Ranchers must have access to the additional 

demand for beef from consumers who live outside of the U.S.; 95 

percent of the world’s population lives outside the borders of the 

United States. 

The unfolding global landscape, in its breadth and complexity, is 

creating unprecedented challenges for U.S. beef exports. High-value 

perishable products like beef need rapid connection from land to 

water and an efficient delivery to world consumers. U.S. ports’ infrastructure and their frameworks must ensure efficient and sophisticated transportation of our product to the global marketplace. 

As economies around the world begin to recover, we see global 

demand expanding for U.S. beef products. Ranchers cannot meet 

world consumer demand through inefficient, congested, and outdated sea port systems. Today, Montana beef that is finished and 

processed in the Midwest is chilled or frozen in regional processing 

facilities, moved overland to south and west coast ports, and 

shipped by sea to over 70 countries around the world. We must 

continue to make technological advances in port-to-market distribution systems for U.S. agricultural exports like beef. 

Freshness is a key ingredient to advancing distant foreign markets for beef. However, while this committee’s task may be to ensure that our sea port infrastructure meets the challenges of doubling U.S. exports, it must simultaneously and successfully resist 

protectionist impulses at home and deter impulses abroad. 

Japan, for instance, was once our closest beef trading partner; 

however, they have largely closed their markets to U.S. beef after 

the discovery of one Canadian-born cow infected with BSE in the 

State of Washington in 2003. Japan’s unscientific trade restriction 

is not consistent with fair trade practices. This continues to hurt 

family ranchers by limiting us to about 25 percent of our potential 

market there, or $1 billion in lost beef exports each year. 

Thankfully, Chairman Baucus has tirelessly pursued resolving 

the unjustified prohibition of our wholesome beef products by the 

Japanese government. Most recently, Chairman Baucus strongly 

urged the Japanese government to remove their unfounded barriers to our beef in a letter sent to the Japanese ambassador on 

March 16, 2010. 

19 

But it should not stop there. Together we must finish our work 

on other markets, including Taiwan, Korea, China, and even Mexico. China is the only major market still closed to U.S. beef and 

represents one of the largest potential growth markets for ranchers. 

Passing pending free trade agreements is crucial. Passage of the U.S.-Korea FTA would mean $15 million in tariff benefits for beef 

in the first year of the agreement alone, with about $325 million 

in tariff reductions once fully implemented. We expect that Korea 

will provide full market access for U.S. beef consistent with World 

Organization for Animal Health guidelines. 

For each day the Congress does not approve the Columbia FTA, 

American exporters overall pay millions of dollars in unnecessary 

tariffs. Other countries such as Australia are already negotiating 

FTAs on their own with South Korea. If Australia successfully ratifies a similar bilateral trade agreement with Korea a year before 

we do, it could give them a 2.67-percent tariff advantage over U.S. 

beef for the next 15 years. 

Montana is hosting the 2011 Asia-Pacific Economic Cooperation 

Trade Ministers meeting. This is a tremendous opportunity for 

Chairman Baucus and our ranchers to showcase our cutting-edge 

approaches to global beef innovation that we use to deliver safe, 

healthy, and environmentally wholesome beef to many of the 21 

Asia-Pacific member economies. 

This meeting can serve as a proactive model for which greater 

information sharing and interconnectedness can be achieved to 

build more effective trade partners who are committed to a rulesbased trading system. Reaffirming our commitment to all of our 

international agreements, both ratified and pending, will lead the 

development in investment of sea port infrastructure on both ends. 

Critical challenges such as port capacity, storage space, container 

availability, ready access to rail and highway systems, Customs 

Services, inspections, and distribution systems can be better met 

following these commitments. 

Mr. Chairman, I appreciate the opportunity that we have been 

granted to present our testimony today, and we look forward to 

working with you throughout the course of the upcoming years in 

advancing all areas of U.S. exports. 

Senator WYDEN. Mr. Rice, thank you very much for that very 

helpful testimony. It is my plan to work very closely with Chairman Baucus on all these issues. As you know, he has been a leader 

on trade questions for a long, long time, and I am pleased and honored to be a subcommittee chair on these matters. 

[The prepared statement of Mr. Rice appears in the appendix.] 

Senator WYDEN. Let me start with you, Mr. Larson, if I might, 

and put it almost in the context of the global competitiveness question. That is part of our subcommittee’s obligations. I have come to 

think that there are a lot of reasons why an American company 

chooses to locate somewhere. Health care costs are even a factor. 

I mean, there have been companies that have lost out on opportunities because our health care costs are a lot higher than our competitors’. 

I think you are probably aware, Senator Gregg and I have introduced comprehensive tax reform to lower the corporate tax rate to 

20 

24 percent for companies that manufacture in the United States by 

rolling back some of the breaks that are offered for shipping jobs 

overseas. So there is labor interest in it, business interest in it, and 

something that we surely ought to debate as part of tax reform. 

So there are a variety of reasons that companies locate somewhere. You have talked about this, and I think it is important to 

put it on the record. How important is it to you, in terms of locating somewhere, that transportation and sea port infrastructure 

issues are competitive, and both efficient and priced in a fashion 

that is going to let you tap these jobs in the country, and in the 

export market in particular? 

Mr. LARSON. Well, Mr. Chairman, it is a very important issue. 

As you know, there are a lot of factors that are considered when 

you are looking to locate a manufacturing facility or warehousing 

facility, whatever it might be. One, obviously, is a good source of 

labor in the local market. The business climate, as you mentioned, 

is very important. Is there a supply chain in the area that you can 

tap into? These are all important issues, but the availability of the 

transportation infrastructure to move goods in and out of that particular location is extraordinarily important. 

At Cat Logistics, we get an opportunity to take a look at all facility site selection that is done by the company when we are determining where we might locate a manufacturing facility, or a facility 

of any kind. Of course, one thing we look at and assess is the availability of transportation infrastructure, the reliability and the stability of it, and the cost. The absence of a good transportation infrastructure can in fact be a knock-out blow for a particular site. So, 

it is extraordinarily important. It is one of the factors that gets a 

lot of attention when we look at that type of thing. 

Senator WYDEN. Now, you outlined a number of serious concerns 

about antiquated transportation infrastructure. I think it would be 

helpful to know, what kind of action is Cat taking to deal with 

these kinds of problems? I gather that there are even facilities that 

just cannot move at all what you need moved in a timely way. 

Mr. LARSON. Right. 

Senator WYDEN. So give us your action plan for how you deal 

with the antiquated bottlenecks that we have today. 

Mr. LARSON. Right. Well, the first thing we are doing at Caterpillar is, obviously, dealing with all the things that we can control 

within our four walls. That is, to increase through-put through our 

manufacturing operations. We are very focused, through our Caterpillar production system, on lean manufacturing. So we try to move 

things through our facilities as quickly as we possibly can. 

We have done a lot to drive process discipline on our shipping 

floors, making sure we have all the appropriate documentation 

lined up when a particular machine is ready to go through the 

door. We are collaborating to a lot higher degree with our suppliers 

and carriers, measuring their performance in terms of how they are 

moving our goods from the factory door to the port of exit. 

We have done a lot on the technology side, information technology. We are investing in transportation management systems, 

track and trace capability, all those kinds of things that enable us 

to actively manage our goods as they are moving through the system. 

21 

Senator WYDEN. I think I am going to move on. I just want to 

leave you with one thought, Mr. Larson. I think you are the face 

of one of the most important economic challenges of our time, and 

that is, we must get this country back into the business of American manufacturing. We do a lot of things well in this country. We 

cannot get done what we need to get done without a renewed capacity to manufacture. 

You and I, just in the last 6 or 7 minutes, have touched on a 

number of the elements. I mentioned taxes and health care before 

I got to antiquated infrastructure, and you threw in labor, which 

is absolutely pivotal as well. I want to use this subcommittee to 

outline, particularly, a competitiveness strategy that is going to get 

us back into the business of manufacturing. 

I think there are extraordinary opportunities. I think there are 

going to be great opportunities for green manufacturing. It is very 

clear that companies in our part of the world are very interested 

in it. So, we are going to count on your counsel often in the days 

ahead. Thank you for your cooperation, coming back twice. My 

thanks to all of you. I think that that is almost the Senate version 

of cruel and unusual punishment, to have to come twice, and we 

are very appreciative of your cooperation. 

Mr. LARSON. Thank you. Pleased to be here. 

Senator WYDEN. Mr. Sundet, a question for you on the Panama 

Canal. The Panama Canal has the potential to shift trade flows 

from west coast ports to ports in the Gulf and ports on the east 

coast. What is your sense of what a shift like that means for ILWU 

workers, and what kinds of steps do you think ought to be taken 

for those of us on the west coast to keep as much Pacific trade flowing through the west coast? 

Mr. SUNDET. Quite frankly, I think that the shift is overrated. I 

do not think that there is much that is going to happen as some 

of the people on the east coast would like it to happen, particularly 

the ones who own those ports. The most efficient movement of 

cargo across these United States to and from the Asian markets is 

the land bridge, and I think that is going to continue, especially 

given, like Los Angeles, where upwards of 60 to 70 percent of the 

cargo that flows into Los Angeles from Asia is consumed in the Los 

Angeles basin. 

The best thing that we can do—and also the ports in the Gulf 

and along the Florida panhandle are not equipped to handle the 

large ships. It is going to take a lot of investment to get them to 

do that. The carriers and the port authorities and the public bodies 

here on the west coast have long ago set themselves up to handle 

those kind of vessels. The trade is there. 

So the best thing that can happen and the best thing this country can do is to increase the east-west infrastructure, put money 

into the east-west infrastructure to make it efficient, look at designated cargo corridors and so forth so we can continue to use the 

land bridge. Bring cargo to the west coast, drop your cargo, consume on the west coast, and move the discretionary cargo over the 

land bridges. 

Senator WYDEN. It is a good argument. I am looking at an Oregonian article—talking about how the west coast ports are banding 

together to deal with global competition, largely out of their conVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00025 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
22 

cern about the Panama Canal and allowing the big Asian ships to 

essentially go around west coast ports to the East Coast. So, those 

are good arguments. 

We are going to continue this discussion with you because we 

have to find a way to not pit regions against each other, because 

that could reduce overall trade in our country. But for those of us 

in the Pacific northwest where we have more than 10-percent unemployment, we have to make sure that our interests are advanced 

in any kind of national solution. So, I thank you for your comments. 

Only one question for you, Mr. Rice. We have heard about shipping delays dealing with the time tables, particularly for folks in 

perishable goods. I mean, folks who have perishable goods, they 

need cold containers, they need a host of products and services to 

help them move Montana beef and other products that are perishable. What are the factors that you consider in choosing between 

which ports to export from? 

Mr. RICE. Mr. Chairman, I think it is important to note that, in 

our business, the ranchers in Montana are the first point of the 

supply chain. So, I think a number of the factors that the last 

party of the supply chain, the processors, use are many of the factors that were discussed by many of the testimonies presented here 

today. Distance to ports is obviously an important point of consideration. Our processing facility in Pasco, WA probably has a comparative advantage over our processing facility in Greeley, CO in 

terms of making that determination. 

I think also one of the things that we see specifically, when we 

talk about trucking and highway infrastructure, is consistency in 

gross vehicle weights that has created some challenges for us to 

take a very direct route to a feeding facility or a processing facility. 

The State of Montana, for example, has a different state law on 

what the gross vehicle weight can be, as, say, compared to South 

Dakota, and also some differentiation on the lengths of what these 

caravan trucks can be. 

So that inconsistency has created some challenges in routing our 

product to different areas of the country throughout the Midwest, 

and even that same issue creates challenges in determining which 

port, depending on where your location is, to get to. So, those are 

just a few. 

Senator WYDEN. Mr. Rice, thank you. I did not have any other 

questions. I want it understood, for folks moving perishable products, particularly beef and a lot of products we have in the Pacific 

northwest, we think you are an important part of a new strategy 

to deal with antiquated infrastructure, so we will be calling on you 

often. 

Mr. RICE. Thank you, Mr. Chairman. 

Senator WYDEN. We will excuse all three of you and look forward 

to working with you in the days ahead. 

Our next panel will be Mr. Bill Wyatt, executive director of the 

Port of Portland; Mr. Phil Lutes of the Sea Port Division of the 

Port of Seattle; Mr. Larry Paulson, Port of Vancouver; and Mr. Jeff 

Bishop, Oregon International Ports of Coos Bay, Coos Bay, OR. 

I think, using the powers of the subcommittee, we ought to start 

with Jeff Bishop, because he made the longest trip. All right. We 

23 

very much appreciate it, and thank all of you who have been very 

supportive of our work. It is good to see some familiar faces and 

the northwest ports’ agenda ready to make its case. 

Mr. Bishop, welcome. We will make your prepared remarks part 

of the entirety of the committee’s hearing, and I think, particularly 

since you have had a couple of panels already go, I would be especially interested in any comments you would have in response to 

what you have heard thus far. In other words, you have the advantage of kind of incorporating into what you tell the subcommittee 

your assessment of what you already heard. So, Mr. Bishop, you 

start. 

STATEMENT OF JEFF BISHOP, EXECUTIVE DIRECTOR, 

OREGON INTERNATIONAL PORTS OF COOS BAY, COOS BAY, OR 

Mr. BISHOP. Thank you, Mr. Chairman. On behalf of the commissioners for the Port of Coos Bay, I want to thank you very much 

for this opportunity to testify, and more importantly to talk about 

our port. 

I am going to dispense with looking at my statement since it is 

already in the record and, if I can, kind of speak from my heart 

based on some of the things that I have heard today. I have a tendency to be a very passionate person about the organization I work 

for, and, in sitting and listening to the previous speakers, it occurred to me that during my port career I have had the opportunity to work at ports that dealt with almost every one of those 

subject materials. I started off at the Port of Pasco, so I am very 

familiar with the beef situation, and progressed to the Port of Tacoma, where I had some involvement in the container industry. 

Now that I am at the Port of Coos Bay, I have had the opportunity to see what it is like to operate in a very rural area. As was 

previously mentioned, we are the furthest port westward in the 

United States served by rail. It is a very proud community, and at 

one time it described itself as the world’s largest forest products export port. That kind of peaked in 1983. Today, we do about 87 percent of the business that we once did. Over that 30-year period, it 

is pretty obvious, to walk around and look at the marine facilities 

and see where the functional obsolescence has taken hold, the 

docks are literally rotting as they sit there. 

There is a lot of capacity still left in the community, and there 

is a lot of stranded infrastructure. Our channel is still strong. We 

are still only 45 minutes from the ocean to berth. We have a remarkable rail line—currently closed but we are working on that— 

that had some very significant stranded investment in that. 

Today, from a percentage standpoint, over 70 percent of the children in the Coos Bay school system are qualified for assisted lunch 

program. The poverty that is in our community is quite amazing. 

The port traditionally has been the economic engine that sustained 

the economy there. 

Since coming on board, I was charged with trying to come up 

with a strategy for revitalizing that and finding some way to bring 

the community back to its original—I do not want to say grandeur, 

because I do not think we ever quite qualified for grandeur—but 

certainly the comfort and the family living wage jobs that were traditionally part of our community. 

24 

We have not lacked for opportunity since I have been in Coos 

Bay. I mean, at one point in time we had a very large shipping conglomerate looking at us and identified us as the most likely candidate in the United States to compete with Prince Rupert in Canada. I think one of the things that I have been surprised at—when 

I first came to Coos Bay, I thought we would have this inherent 

competition with the Port of Portland, but that has not been the 

case. We find ourselves more worried about what is going on in Canadian ports than we do any other of the ports here at this table 

today. They are our main competitors. 

We have gotten to the point where we have gotten so tied down 

in the permitting morass that it is very difficult for us to compete. 

We find ourselves with potential customers. We have one customer 

that we have been working with now for 6 years and has spent $40 

million on a permit, only to find out that it is very likely they are 

not even going to be able to complete that process due to a procedural issue. We get somewhat stigmatized by this process. 

This past summer, we had a client that we were talking to, and 

we got down to negotiations on land, and we offered to give the 

property to them. Their analysis indicated that it would take them 

too long to get permits to develop their facility. 

So while we look at financing opportunities and ways to look at 

investing in infrastructure, I think there has to be some kind of a 

balance there in the sense that, if we are going to look for creative 

ways to finance these things, we are going to have to be able to 

do it quickly. 

I spent a few weeks in China this past summer, and I learned 

a phrase that has kind of stuck and developed resonance in my 

mind. It is called Shinzen speed. We were touring the Chinese community of Shinzen, and the person who was showing us around 

coined this phrase. I thought it was kind of remarkable, but it was 

basically three floors a day on a skyscraper, and that was Shinzen 

speed. So I think there are a lot of things affecting our competitiveness, and I think there are many opportunities to bring other entities to the table to discuss the possibility of streamlining some of 

these bottlenecks. 

That would conclude my remarks. 

Senator WYDEN. Thank you. Thank you very much, Mr. Bishop. 

[The prepared statement of Mr. Bishop appears in the appendix.] 

Senator WYDEN. I am very pleased to be joined by my long-term 

friend and colleague, Senator Cantwell. We have just started this 

panel, Senator. What is your pleasure? Would you like to make a 

statement now, or wait till questions? What is your pleasure? 

Senator CANTWELL. Mr. Chairman, thank you for holding this 

important hearing. I am anxious to hear from the witnesses, and 

several of them are from the northwest. It is an important policy, 

but I will save my comments to the question period. 

Senator WYDEN. Very good. Thank you for being with us. 

Let us go to Senator Wyatt. Senator Wyatt? 

Mr. WYATT. That is quite a promotion, Mr. Chairman. 

Senator WYDEN. Take it. Mr. Bill Wyatt, executive director of the 

Port of Portland. 

25 

STATEMENT OF BILL WYATT, EXECUTIVE DIRECTOR, 

PORT OF PORTLAND, PORTLAND, OR 

Mr. WYATT. Well, Chairman Wyden, Senator Cantwell, thank 

you so much for having this hearing. I think you bring great highlight to what is obviously an important initiative of the administration, very important to us. 

The Port of Portland is celebrating its 119th year, and we were 

created way-back-when as essentially an export-oriented port. Exports have had everything to do with the development of our community of Portland, and the infrastructure that we now enjoy—two 

transcontinental railroads, two interstate freeways, an international navigation channel, and international airport—are largely 

the result of these export-oriented investments that occurred so 

many years ago. 

So I want to emphasize a few points that have been made and 

then comment on a couple of the earlier testifiers. You asked us if 

we had issues with or wanted to comment on any of the commentary made by other witnesses, and I would just say this on behalf of the port community: I do think there is some disappointment about the manner in which the TIGER grants were issued. 

The administration tends to talk about TIGER grants in terms of 

the freight system overall, and we are all for additional freight investment. 

But the port investments themselves were pretty modest. I say 

this because the American Association of Port Authorities, represented in the audience here today, has had quite a bit of conversation about this. There is a concern that ports were really not 

terribly well-represented in the award of those grants, and those 

port grants that were made were maybe not central to the track 

that your hearing represents today in terms of major gateway investments. 

The other comment I would like to make is this: in terms of infrastructure, it is an incredibly important aspect of increasing exports more so than imports, because the truth is, as a country, we 

tend to export things that are larger in volume, greater in weight, 

and lesser in value. So transportation represents an increased 

share of the cost of those products as they are being exported. 

Wheat, for example, it is said, often sees transportation representing about 40 percent of the cost of the delivered good. Gee, 

what would happen if it was 35 percent or 33 percent? Then wheat 

would become dramatically more competitive on global markets. So 

logistics is more important for U.S. exports than it is for U.S. imports, so whatever attention the committee can give to that, I think 

exporters will benefit significantly. 

Finally, just a couple of thoughts about land. Land that is adjacent to this existing infrastructure is incredibly difficult to come by, 

and if it is adjacent to this kind of infrastructure it is subject to 

extraordinary regulation, and much of that from various Federal 

agencies, State and local as well. 

Integration in approaching the regulation and management of 

this incredibly important economic resource, this land available for 

development near and around port facilities, is extremely important, and oftentimes we find ourselves confronting three or four difVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00029 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
26 

ferent layers of regulation by three or four different layers of government, which really makes it very, very challenging. 

Finally, I would just mention the Korea free trade agreement. I 

will just relate to you a story about this agreement. I was in Seoul 

a few years ago when the negotiations for the Korea free trade 

agreement were being concluded. I was on my way to visit our customer, Hanjin Shipping, very close to the Korean parliament building. We were essentially unable to get into the building because 

there were so many protestors, farmers and others, in Korea who 

had shown up to protest this agreement, because their view was 

they were giving everything up to the Americans in the course of 

this agreement. 

I have, myself, constantly emphasized with our Korean partners 

how valuable this would be in improving trade and improving 

American access to Korea, in particular. So, I would just urge the 

committee to give this agreement attention as well. 

Thank you. I look forward to your questions. 

Senator WYDEN. Thank you. Thank you very much, Mr. Wyatt, 

and to all of you who have made this trek twice. I am very appreciative. And to Mr. Wyatt, for your good work. I think I heard your 

voice. I have taken two red-eye flights from the Port of Portland 

in the last couple of weeks, and I have heard your voice giving me 

instructions in the airport in the middle of the night. So I know 

of your good work, and we are very proud that the Portland airport 

is one of the finest in the world, and we are very appreciative. 

[The prepared statement of Mr. Wyatt appears in the appendix.] 

Senator WYDEN. All right. Let us go to Mr. Phil Lutes, deputy 

managing director of Seaport Division, Port of Seattle. 

Mr. Lutes, welcome. 

STATEMENT OF PHIL LUTES, DEPUTY MANAGING DIRECTOR, 

SEAPORT DIVISION, PORT OF SEATTLE, SEATTLE, WA 

Mr. LUTES. Thank you. Good afternoon, Chairman Wyden and 

distinguished members of the committee. I am Phil Lutes, deputy 

managing director of the Sea Port of Port of Seattle. Thank you for 

the privilege of being here with you today. 

In reflecting on the topic question for this hearing, ‘‘Doubling 

U.S. Exports: Are U.S. Sea Ports Ready for the Challenge?’’, the 

short answer for the sea ports is yes. Is the overall supply chain 

ready? No. 

Limiting factors in the larger supply chain inhibit U.S. exports, 

but right now the biggest obstacles are not the sea ports themselves. Even with a strong rebound in our economy, U.S. ports have 

ample capacity. Our greatest challenges lie beyond the sea port 

gates. The real issues are enhancing efficient infrastructure 

throughout the trade corridors, dealing with current export container shortage, general promotion of products abroad, and antiquated tax policies that discriminate against certain ports and cargoes. 

I want to strongly affirm this hearing’s premise that increasing 

exports and ensuring a competitive economy are directly tied to improved infrastructure. We need a national goods movement strategy and a dedicated freight fund, especially through competitive accounts like the TIGER stimulus program. A national strategy with 

27 

meaningful goals to guide funding is critical. Without one, freight 

will continue to fall between the cracks in the State and local process. 

But with all the challenges we face as a country, why should infrastructure be a top issue? First, our initial midterm economic recovery depends upon it, as does our ability to export goods. Second, 

our competition is hungry, well-organized, and taking American 

cargo. It erodes the advantages that our exporters have traditionally enjoyed, such as lower transportation costs, shorter time to 

market, and greater container availability. The good news is that 

west coast ports are taking action to meet these challenges. Today, 

the west coast has a fast, reliable, and environmentally sound 

transportation network. 

To better compete internationally, the six major container ports, 

along with the Burlington Northern Sante Fe and the Union Pacific 

Railroads, have formed an organization known as the U.S.-West 

Coast Collaboration. If we emulate the Canadians and execute a 

national goods movement strategy, we can improve our trade infrastructure, create jobs, save billions of dollars by ensuring investments are made at the right place at the right time, and reduce 

carbon emissions. In fact, the Port of Seattle released a study 

showing that routing inbound cargo from Asia through U.S.-West 

Coast ports results in lower carbon emissions than any other route, 

sometimes 20 to 30 percent less. 

Let me turn to a near-term problem that, if resolved, could boost 

U.S. exports overnight: a shortage of empty containers for exports. 

Due to the decline in imports, carriers have anchored ships and 

dropped ports of call to offset losses. Ultimately, this translates 

into fewer opportunities for our exporters to move their products. 

It will be a challenge for the Federal Government to influence export container availability, nonetheless it is a very serious issue, 

and raising its profile is a good first step. 

Lastly, a growing factor that draws cargo away from U.S. ports 

is the Harbor Maintenance Tax, or the HMT. Increasingly, the 

HMT is an incentive for importers to route their U.S.-bound cargo 

through foreign gateways to avoid paying the tax. By coming across 

a land border, these imports exploit a loophole in the law. 

Addressing this inequity is important to counter some negative 

effects. First, it reduces revenue to the HMT trust fund, which pays 

for the needed channel dredging at American ports. Second, it exports American jobs, both in the goods movement industry and 

those that depend on a competitive export capability through U.S. 

sea ports. We estimate that the HMT fund will lose $600 million 

in revenue over the next 10 years through diversion of cargo to Canadian ports in the land border loophole. 

In conclusion, U.S. ports and a transportation network that supports trade need to be part of an overall national economic competitive strategy, just like the need to improve all levels of education 

and invest in research and development. 

We look forward to working with you to move these strategic priorities forward. We are well aware of the leadership in the Senate 

that has provided for areas of infrastructure in the trade laws of 

national significance, and we are very grateful for your support. 

28 

Mr. Chairman and members of the committee, thank you for calling this important hearing today, and thanks for allowing me to be 

here today to testify. 

Senator WYDEN. Thank you very much. We will have some questions in a moment. 

[The prepared statement of Mr. Lutes appears in the appendix.] 

Senator WYDEN. Mr. Larry Paulson? Making our way southward. 

STATEMENT OF LARRY PAULSON, EXECUTIVE DIRECTOR, 

PORT OF VANCOUVER, VANCOUVER, WA 

Mr. PAULSON. Thank you, Chairman Wyden and Senator Cantwell, for the opportunity—the second opportunity, I might add—to 

speak to you today. 

The Port of Vancouver is the third-largest port, we believe, in the 

State of Washington. But unlike the other two ports ahead of us, 

we are a niche port. We do not handle containers. We are primarily 

a bulk, break bulk, auto, and project cargo port, and it gives us 

some unique flavor. 

For instance, of the 4.8 million metric tons we handled last year, 

4.1 million metric tons, or 85 percent, was export cargo of all kinds. 

In addition, we are the import facility for Subaru, and we were 

number-one in wind cargo tonnage last year, at about 2,700 pieces 

of wind cargo. We, like the Port of Portland, are located about 105 

miles up the river from the mouth of the Columbia River. 

We are dependent, of course, upon that deep-water channel, 

which thank goodness is being done. It will be done this year. But 

river, road, and rail, and as Mr. Wyatt would say, runways, are the 

arteries that allow us to operate and continue to develop the companies we have, and the companies we hope to have. 

The Port of Vancouver is fortunate in that we have quite a bit 

of land available. We have 750 acres of developable land, including 

200-plus brownfield acres that would include a significant potential 

marine and industrial expansion in our future. In addition, we are 

about 70 percent rail-dependent, so the issue of rail is of particular 

importance to us. 

There are four particular points I would like to make with you 

this morning—or afternoon. I think it is morning, too—that may be 

of interest. First, I think we do need to implement a national strategic freight policy and plan. We are seeing that in other countries. 

You mentioned it earlier in your remarks, Senator Wyden. Other 

countries, Canada and other countries in Europe and Asia, are 

doing just that. 

Second, the priority of funding for freight transportation, freight 

rail, and port freight and intermodal projects is essential. I would 

have to concur with Mr. Wyatt and his comments that the recent 

funding availability, whether it be stimulus or ARRA money, or 

high-speed rail for that matter, did not seem to favor ports. It 

seemed to me that the ports were falling through the cracks. 

I know that the Port of Vancouver, and I believe the Port of Portland—and we have a good working relationship, so I have some 

sense of that—had projects shovel-ready, ready to go, ready to 

produce jobs. And while we did receive some ARRA funds through 

some of the processes, and primarily appropriations, it seemed to 

be short in what could have been provided. 

29 

Third, promote Federal policies and streamline coordinated permitting processes that recognize the role of ports. That has been 

talked about quite a bit today, and I will not belabor it, but there 

are issues out there that continue to concern us in terms of the permitting process. Heaven knows, the channel-deepening project, in 

and of itself, 21 years to accomplish, may be Exhibit A of that. 

And lastly, to strengthen foreign trade agreements with our global partners and advance an environmental opportunity supportive 

of global trade. I concur with what has been said regarding free 

trade agreements. Korea, Columbia, Panama, Costa Rica, Oman, 

and Peru come to mind. We think these are important things to 

promote the give and take, the import and the export, that we are 

working at. We think if we work together with the local, regional, 

and national partners we can make our ports more efficient and 

more effective in the long run. 

Thank you again for the opportunity to provide comment, and I 

welcome your questions. 

Senator WYDEN. Mr. Paulson, thank you. Thank you to all of 

you, again, for coming back a second time, being willing to make 

that flight. 

[The prepared statement of Mr. Paulson appears in the appendix.] 

Senator WYDEN. We are going to start the questions with my colleague. 

Senator CANTWELL. Is Mr. Bishop next? 

Senator WYDEN. No. Mr. Bishop got to talk first. We decided he 

had come the furthest. He came the furthest, Mr. Wyatt got promoted to a Senator. I mean, it has been a rollicking afternoon here 

for the northwest. [Laughter.] 

So let us begin with Senator Cantwell. 

Senator CANTWELL. Well, thank you, Mr. Chairman. Thank you 

again for holding this hearing. It is important. I look at this witness panel here, and obviously see the northwest represented, but 

I almost think of it from an economic development strategy and 

how much product is moved for our country as it relates to exports. 

I just think of the economic strategy of ‘‘Ports R Us.’’ I mean, that 

is exactly what the northwest is, and that is exactly why we have 

been so successful in contributing to our Nation’s export business. 

But I wanted to start with you, Mr. Paulson, if I could. I obviously recently visited the Port of Vancouver to look at some of the 

specific issues of job creation opportunities there, and I am struck 

also by what Mr. Lutes was saying, or similar to what I saw on 

the ground, that time to market and cost of getting product to market when you have delays are big economic issues. 

So I wanted to start with what you have been able to tap as far 

as funding in your comments about making multi-modal and funding for freight and rail transportation more of a priority. What 

have you been able to access so far as far as ARRA funding or 

other economic opportunities for that enhanced infrastructure? 

Mr. PAULSON. We are currently—and I will step back from that 

just a little bit to say we are currently doing a significant rail improvement, which I know you are familiar with, to the tune of 

about $140 million-plus over a number of years. So far we have 

been able to, through ARRA funds through our local regional transVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00033 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
30 

portation council or MPO, receive $2.5 million. In addition, we have 

received some appropriations which you have been most gracious 

in supporting, as has Senator Murray and others, in the range of 

about $4 or $5 million. So it has been participation, I think there 

is an awareness of what we are trying to do, but it seems that in 

the area of TIGER grants and others, ports have fallen short. 

Senator CANTWELL. And what do you think we need to do at a 

Federal level to increase that ability to be more competitive? I 

mean, if the President’s strategy is for us to increase this, how can 

we integrate more on our transportation strategy to improve the 

bottlenecks in the supply chain and everything that we are facing? 

Mr. PAULSON. I applaud Secretary LaHood, who seems to have 

stepped forward in efforts to reach out to ports. Secretary Locke 

knows our situation quite well. I think there are some efforts being 

made at the Federal level to do that. I think if those kinds of funds 

were more specifically aimed at port and freight transportation 

rather than perhaps more generally, as I have seen them come to 

some States where the States then allocate funds, I think that 

might be more effective. In other words, provide some more guidelines and rules specifically aimed at ports and freight mobility, including them in the availability for those funds. 

Senator CANTWELL. Thank you. 

Mr. Lutes, you obviously have a different mix of customers than 

the Port of Vancouver, but yet you mentioned a lack of containers 

and vessel capacity and other constraints. What can be done to alleviate those problems? 

Mr. LUTES. Senator Cantwell, those are definitely major issues 

right now. Part of those are a result of the economic situation we 

find ourselves in. The container business itself—as you know, carriers are losing billions of dollars, and the capacity has been taken 

out of the system as a result of that. That, as a result, takes containers away that would be coming in that would be available for 

exports. 

Also, as normal, the exports usually originate in places where it 

is hard to get containers anyway, so they have to be repositioned 

at a cost, and exports are usually the lower-value cargos to begin 

with. So there are some inherent problems that have been compounded by the economic situation that we have, and I think some 

of those will again start to work out as the economy starts to improve, as consumers start to have confidence and start spending 

more. 

In the meantime, I do not have any magic answers for the committee here about what exactly could be done, but I know that the 

Port of Seattle and Port of Tacoma, last month, wrote a letter to 

Commerce Secretary Locke and raised this issue up and asked for 

the new committee that has been formed for exports, cabinet committee, to look into this issue because it is a very difficult one. It 

is not an easy one, because traditionally imports have supported 

the ability for exports to be more viable. 

Senator CANTWELL. And we obviously face competition to the 

north, correct? 

Mr. LUTES. Very definitely. That is another issue I touched on in 

my testimony about HMT. That is a piece of it, but it is not the 

total. As you well know, the Canadian government has put toVerDate Nov 24 2008 20:26 Aug 10, 2011 Jkt 000000 PO 00000 Frm 00034 Fmt 6633 Sfmt 6633 R:\DOCS\67310.000 TIMD
31 

gether, with all the stakeholders across Canada, this Asian-Pacific 

Gateway Corridor Initiative, which is basically all the stakeholders 

banding together to work on providing infrastructure improvements, providing cost benefits across the system to be able to, bottom line, target U.S. cargo in the Midwest and beyond to compete 

with the U.S. They are doing a very effective job at it. They also 

are strongly marketing that across the board from all the stakeholders’ standpoints. 

So I think, as we have talked a little bit—various people here 

today talked about trying to have some kind of a national program. 

This is what Canada has done totally, and we are starting to see 

the effects of that certainly in the northwest, and in Seattle in particular. We have lost cargo to Prince Rupert, which is the major 

terminal on the west side, that has started a big part of this initiative. There is going to be a Prince Rupert on the east side of the 

country in the near future as plans go. So, they are attacking us 

from both sides of the country. 

Senator CANTWELL. You mean, they have a plan to more integrate the movement of goods and services through their ports to expedite delivery? 

Mr. LUTES. Through their ports and all the way through the system to the final customer, yes. 

Senator CANTWELL. And so Mr. Paulson may look at that HMT 

a little differently than you do. But how do you make it more flexible but help us maintain our competitiveness? 

Mr. LUTES. Well, I think the way we look at HMT right now is, 

again, it is one element, because it is part of the total delivery cost 

system. I mean, when a shipper is looking at moving their cargo, 

they want a safe, reliable, and cost-effective way of doing it. Especially now when the economics are so severe out there, people are 

looking at every piece of their cost to deliver their cargo. Having 

this disadvantage because of this loophole in the HMT, it is another way of promoting that you can get a lower cost—at least 

there is a major piece of it that could be a lower cost—if you route 

your cargo through Canada. 

Senator CANTWELL. And, Mr. Paulson, back to this issue of trying to prioritize a strategy and then putting resources behind it. I 

should say, when I say ‘‘Ports R Us’’ is the economic strategy for 

the northwest, a lot of the product is Midwest product, is that not 

correct? Are you not moving soybeans or other product from the 

Midwest? 

Mr. PAULSON. Yes. We move a lot of grain in particular from as 

far away as Oregon, Washington, Idaho, Montana, the Dakotas, 

Nebraska, Kansas. We have moved it from Minnesota. We move 

copper concentrate from Nevada, Montana, and Utah. Bentonite 

clay comes out of Wyoming. We move barley from Washington, 

Idaho, California, and Montana. Those are some of the things that 

we move, particularly on the agricultural side, from quite a distance. 

Senator CANTWELL. And so how would you best characterize the 

return on economic investment? I kind of look at it and say, we 

know we want to increase exports. I almost feel like we are treading water where we are now with the economic resources for infrastructure. Is that an accurate assessment, in the sense of, if we 

32 

made more investment, we would be able to not only gain from an 

economic development perspective, but maintain our competitiveness with what both Canada and Asia are doing to improve their 

infrastructure? 

Mr. PAULSON. Well, let me give you a couple of examples, if I 

may. With the rail improvements that we are putting in now, we 

believe that we can go from 1.5 units or shuttle trains per day at 

our grain facility to 2.5 to 3, nearly double. At the same time, you 

are aware of the former Alcoa site that we are developing that we 

call Terminal 5, about 200-plus acres. We are putting in a rail loop 

track there. 

We believe that we can put in an export facility that will, in the 

next few years—and we are in discussions with a few people now— 

at least double, if not quadruple, the exports that the Port of Vancouver can put through on an annual basis. So those are the areas 

that we think, and particularly the rail side for us, are critical. I 

would also add that we could not do those improvements without 

the additional 3 feet in the Columbia River channel. 

Senator CANTWELL. Thank you. 

Thank you, Mr. Chairman. Again, I appreciate you holding this 

important hearing about infrastructure. I take the President’s goal, 

because we are such leaders in exports, as wanting to lead the way 

on that strategy, but certainly I think the infrastructure investment side of it from transportation and multi-modal has to be a 

part of that. 

Senator WYDEN. Thank you all. Let me have a couple of questions, if I might, and start with the competitiveness side of it. We 

have been talking all afternoon about all of the elements that go 

into a competitiveness strategy. I have brought up how health costs 

are a factor in companies locating somewhere. Senator Gregg and 

I have introduced a bill to lower the corporate tax rate. Labor costs 

were brought up. 

You all have touched on another competitiveness issue—Mr. 

Bishop started the panel, and I know Mr. Wyatt has strong views 

on this—and that is how incredibly long it takes to get these 

projects off the ground and to get them in place. I want to start 

with you, Mr. Bishop, but you can warm up on this, Mr. Wyatt. I 

have heard you talk in the past about how China gets projects off 

the ground in a third of the time that are actually bigger than 

what we have done, for example, in the Columbia deepening 

project. 

So, why don’t we start with you on this question of why it takes 

so long, Mr. Bishop, and particularly go to this question of the permits. Are these problems you have with State permits or Federal 

permits, or the lack of coordination? I am going to ask you to give 

your assessment of it, Mr. Wyatt, because that way we can have 

a smaller port and a bigger port both helping to highlight the situation. 

Mr. Bishop? 

Mr. BISHOP. Thank you, Mr. Chairman. I think, from our perspective, the issue that we seem to deal with the most boils down 

to a chicken versus the egg-type debate as to whether you wait 

until you have a customer available or whether or not you are 

33 

going to spend time being proactive and working on some of these 

issues in advance. 

Having come from Washington State, the State Environmental 

Policy Act there provides for a thing called ‘‘planned action,’’ whereby an entity can take time and effort into pre-permitting a development and then move forward. Once those permits are obtained, 

then you can go out and literally market the facility as shovelready. 

Some of the problem that we have in our small market is that, 

when we do get a customer that is ready to talk to us about developing a facility, the time lines for getting from that point to the finish line outlast the business cycle, and often we will find that the 

commodity or the opportunity was tied to some characteristic in the 

economy at that given moment that led to its need for expansion. 

We have tried to do some proactive work with some of the regulatory agencies about doing some pre-permitting up front, but most 

of the regulations say, when they come back to us on that, that 

they have to be for a specific customer. 

Senator WYDEN. Are you saying that Oregon does not have a prepermitting feature at the State level that Washington State does 

have? 

Mr. BISHOP. At the State level, that is correct. Now, the Federal 

level, there is not an opportunity in either State. 

Senator WYDEN. Is there any effort for any of you to coordinate 

between the State and the Federal permits? Because what is striking on transportation projects, and this continues to be a problem, 

is that we have tried to connect the two. In other words, you go 

all the way down the line with the development side, and then all 

of a sudden at the end somebody files a National Environmental 

Policy Act action, and all of a sudden you have to figure out how 

to incorporate all those concerns and the effort to coordinate that. 

Is there any effort to coordinate port permits to try to save some 

time and hassle? 

Mr. BISHOP. Well, Mr. Wyatt probably has had a lot more experience with this than we have had in Coos Bay, but I do know that 

there have been a number of efforts made to streamline and dialogues that are supposedly taking place at the Federal level, particularly with ocean—— 

Senator WYDEN. They do not strike you as spectacular successes 

as of today? 

Mr. BISHOP. No, sir. Unfortunately I cannot say they are. 

Senator WYDEN. All right. 

Mr. Wyatt, do you want to add anything on this, both in terms 

of how long it takes to get a project off the ground and your 

thoughts about why competitors like China seem to be doing it so 

much faster than we are? 

Mr. WYATT. Yes, Mr. Chairman. I think the Columbia River 

channel deepening project is a pretty good example. The project 

really began back in 1989, when Mr. Paulson and my predecessors 

and the other ports petitioned the U.S. Army Corps of Engineers 

to begin evaluating the potential for this deepening of 3 feet for 107 

miles. I can talk later if you wish about the value, the economic 

value, that that represents to shippers, but it is significant. 

34 

So, 1989, 21 years. I think it is useful to try to wind the clock 

back and think about what was happening in this part of the 

world, the trade world, in 1989. Shinzen was a fishing village. 

China had not entered the WTO. The Shipping Act of 1994 had not 

been enacted. So the world that the channel was being deepened 

for has been turned on its head over the course of its 21-year development, and this year—and I am immensely grateful for this—we 

will complete this project. It will deliver great value. 

But I use as a reference point all of these things that have occurred because any one of them might have suggested approaching 

this project in a different way, going deeper, for example, which 

would have been terrifically helpful for us, certainly, as we look at 

the future. So there is an enormous cost to time, a transaction cost. 

Now, I contrast that with the new deep water port in Yangshan, 

which is near Shanghai. It is at the mouth of the Yangtze River. 

So the Chinese were concerned because the Shanghai International Terminal’s port at the mouth of the Yangtze was silting 

significantly. It is a very fast-moving river, lots of silt, and they 

just cannot really maintain it at a depth greater than about 28 

feet, which is not adequate really for global standards. 

So, 30 kilometers out into the Yellow Sea they took a pair of islands, took the top off, filled in the blanks, and built a bridge 30 

kilometers out into the Yellow Sea. From start, gleam in the Chairman’s eye to opening of operations, 7 years. Now, they obviously 

have shortcuts available to them that we do not, and probably 

should not have in terms of review and concern for impact on the 

environment. By the same token, so much of this review—there 

just has to be a way to consolidate and integrate the environmental 

processes which caused this delay. 

Another example. Our Terminal 5 on the Willamette River exports potash, and will do maybe 4 million tons of potash. It is a 

poster child for the kind of development that you are talking about 

here. In order to take advantage of the additional 3 feet in the 

channel, we have to deepen the berth to 43 feet. 

So we just let a contract for $3.5 million, $400,000 for dredging, 

$3.1 million for staff time to do the permitting, and we still do not 

have the permit in hand. We are hoping that we will be able to acquire that by the time the very narrow window is available for 

dredging. My guess is that all of my colleagues have stories like 

this. So, you are spending 5 or 6 times the amount of money for 

permitting as the actual work. 

Senator WYDEN. Well, let me know what I can do to make sure 

you get that permit you need in your hands promptly. 

Mr. WYATT. Will do. All right. Thank you. 

Senator WYDEN. That will be important northwest business for 

today. 

Let me ask all of you, because you are the northwest ports and 

there has been considerable discussion about the effect of the expanded Panama Canal and these efforts that you are making as 

ports together to try to strengthen our hand vis-a`-vis these regional, and really international, challenges. Why don’t we let you 

start with this, Mr. Lutes, Mr. Paulson, and then we will wend our 

way around to the Oregon witnesses. 

35 

Mr. LUTES. I guess my comment would be that, first of all, I 

think the major change is that it is going to change the economy 

of scale, and the ability for larger ships to go through will definitely change the economics of being able to move boxes that way 

versus coming through the west coast. It will be a bigger competitive challenge for us. I think we welcome the challenge of that. We 

do not shy away from that. I think we have realized that as a 

group of ports, and we are working together to meet that challenge. 

Senator WYDEN. What projects have you agreed on so far to try 

to address this? 

Mr. LUTES. I think that we have had an early start here with 

the west coast collaboration I mentioned earlier. That just kicked 

off a few months ago in China at the World Summit over there. 

But right now it has been working together to meet with groups 

here within Congress, also to get out and meet customers and talk 

about the advantages that exist in the west coast ports, which are 

related to our deep-water ports, as mentioned earlier, I think, in 

some testimony. 

We have the berths, deep berths, available. We have the infrastructure already. We have the equipment to handle the big ships 

that are out there and being built and delivered today. What we 

need and what we hope, as this Panama Canal lock opening proceeds in 2014, is support from the national side to have an opportunity to keep our corridor infrastructure updated and efficient to 

move cargo to its final destination, to the customers, so that we are 

competing on an equal basis with the other corridors of significance 

bringing cargo into the U.S. 

We need multiple corridors, gateways to bring cargo into the U.S. 

That is good for the country; it is good for the shippers to have options. But what we want—we will compete against our competitors—but we want to have an equal playing field relative to opportunities from a national standpoint to make sure that we have infrastructure issues addressed. Those can be through private/public 

partnerships, and a lot of that has been happening on the east 

coast, I think, in preparation of the Panama Canal opening. As I 

mentioned earlier about the HMT, again, just having a level playing field so that we can compete. 

Senator WYDEN. Any others on the Panama Canal? Mr. Wyatt? 

Mr. WYATT. So, Mr. Chairman, I would just say this: the west 

coast collaboration is the collaboration of the container ports, but 

also the ILWU and the two west coast railroads, both Union Pacific 

and the Burlington Northern. Our very first act, actually, was a 

trip to China together to go to the World Shipping Summit and 

meet with many of the large carriers who serve the west coast. 

I think there are two distinct features of the collaboration. Part 

of it is commercial and part of it is policy. The commercial aspect 

of this is being addressed very uniquely by the ports, by the railroads, and by the ILWU, which is on the subject that Mr. Lutes 

mentioned earlier, and that is that the west coast offers the 

greenest route between the United States and Asia and back again. 

Now, again, using the earlier metaphor, in 1989 this was not a 

topic on anyone’s mind when we were thinking about deepening 

the Columbia River navigation channel. But today, companies like 

Wal-Mart, like Nike, for example, are intensely focused on reducing 

36 

their carbon footprint, and even putting product labels on there 

identifying their carbon footprint. I hear about this now from customers of ours and from shippers who use port facilities. 

So as a group, we are attempting to identify the green advantages, the carbon advantages in using the west coast, and we believe this is going to represent a significant advantage, because the 

reality is, to get a container from Shanghai to Chicago, the west 

coast offers a dramatic improvement on carbon than going through 

the canal, even on one of these enormous vessels dropping it off on 

the very few ports on the east coast that can handle these large 

vessels, and then trucking it, probably, or potentially railing it to 

Chicago. So that is one really big step. 

Then supporting the rail infrastructure, which is the basis, really, for the advantages offered on the west coast. We are working 

collectively on trying to identify the really key significant largescale opportunities that exist to improve the velocity, to improve 

speed, because speed is so important to everybody who is depending on the supply chain. 

Senator WYDEN. Mr. Paulson and Mr. Bishop, anything else you 

would like to add? 

Mr. PAULSON. I would only add that this has primarily been an 

effort, and we support it, by the container ports on the west coast. 

We are not, Coos Bay or us, container ports, but we think that it 

will serve to benefit us all. 

I will add one other observation for the ‘‘whatever it may be 

worth’’ category. It takes about 14 days-plus to make a ship sail 

from Asia—North Asia in particular—to call at the Columbia 

River, either Portland or Vancouver. It takes 28-plus days to go to 

the Gulf or east coast, including the cost of going through the Panama Canal. So there are some efficiencies not only related to the 

charter or daily cost of that vessel but, as has been noted, the savings in terms of green gateways that will still continue to facilitate 

calling on the west coast. 

Senator WYDEN. You all have been a very patient panel and a 

very good panel, and one that I think really highlights the economic challenge for our region. I know the subject is always a part 

of a passionate debate about how many jobs we get actually in the 

Pacific northwest out of international trade. I am going to just 

weigh in by way of saying that I think it is consistently 1 out of 

5 or 1 out of 6 jobs in the Pacific north that depend on international trade. They pay better than do the non-trade jobs. 

What we ought to be doing, first and foremost, in our part of the 

world is growing things, making things, and then shipping them 

somewhere. Because of the relationship between imports and exports, when we ship them somewhere, we want to make sure the 

people we are shipping them to can send us stuff back. So, this has 

been very, very helpful, and I want to express my appreciation to 

all of you. 

We are going to make sure that the northwest voice is heard loud 

and clear on these issues relating to a freight strategy, as we have 

been discussing this afternoon. If the country is going to accomplish the President’s goal of doubling exports in the next 5 years, 

the Pacific northwest has to make a very substantial contribution 

to it. 

37 

I happen to think Mr. Wyatt’s last point about our greening up 

the trade debate is very, very correct in lots of respects, the wind 

turbines, the solar panels that we make in the Pacific northwest 

that would be ideal for shipping to growing markets around the 

world, the transportation advantage we have to save fuel and have 

a greener transportation policy is something that is quite obvious, 

and we are going to be consulting with you often. 

I wanted this subcommittee by choice. This is not one that someone stuck me with. A big part of it was, this is where we in the 

Pacific northwest can tap an extraordinary array of economic opportunities in the days ahead. With your good counsel, we are 

going to do it. 

So with that, we will excuse you, and thank you all for making 

the long trip. 

[Whereupon, at 3:11 p.m., the hearing was concluded.] 

(39) 

A P P E N D I X 

ADDITIONAL MATERIAL SUBMITTED FOR THE RECORD


67310001.eps
40 


67310.002
41 


67310.003
42 


67310.004
43 


67310.005
44 


67310.006
45 


67310.007
46 


67310.008
47 


67310.009
48 


67310.010
49 


67310.011
50 


67310.012
51 


67310.013
52 


67310.014
53 


67310.015
54 


67310.016
55 


67310.017
56 


67310.018
57 


67310.019
58 


67310.020
59 


67310.021
60 


67310.022
61 


67310.023
62 


67310.024
63 


67310.025
64 


67310.026
65 


67310.027
66 


67310.028
67 


67310.029
68 


67310.030
69 


67310.031
70 


67310.032
71 


67310.033
72 


67310.034
73 


67310.035
74 


67310.036
75 


67310.037
76 


67310.038
77 


67310.039
78 


67310.040
79 


67310.041
80 


67310.042
81 


67310.043
82 


67310.044
83 


67310.045
84 


67310.046
85 


67310.047
86 

Æ 


67310048.eps