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OVERVIEW OF THE UNITED STATES FREIGHT 

TRANSPORTATION SYSTEM 

(113–13) 

HEARING 

BEFORE THE

PANEL ON 

21st-CENTURY FREIGHT TRANSPORTATION 

OF THE

COMMITTEE ON 

TRANSPORTATION AND 

INFRASTRUCTURE 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED THIRTEENTH CONGRESS 

FIRST SESSION 

APRIL 24, 2013 

Printed for the use of the 

Committee on Transportation and Infrastructure 

( 

Available online at: http://www.gpo.gov/fdsys/browse/ 

committee.action?chamber=house&committee=transportation 

(II) 

COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE 

BILL SHUSTER, Pennsylvania, Chairman 

DON YOUNG, Alaska 

THOMAS E. PETRI, Wisconsin 

HOWARD COBLE, North Carolina 

JOHN J. DUNCAN, JR., Tennessee, 

Vice Chair 

JOHN L. MICA, Florida 

FRANK A. LOBIONDO, New Jersey 

GARY G. MILLER, California 

SAM GRAVES, Missouri 

SHELLEY MOORE CAPITO, West Virginia 

CANDICE S. MILLER, Michigan 

DUNCAN HUNTER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

LOU BARLETTA, Pennsylvania 

BLAKE FARENTHOLD, Texas 

LARRY BUCSHON, Indiana 

BOB GIBBS, Ohio 

PATRICK MEEHAN, Pennsylvania 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

STEVE SOUTHERLAND, II, Florida 

JEFF DENHAM, California 

REID J. RIBBLE, Wisconsin 

THOMAS MASSIE, Kentucky 

STEVE DAINES, Montana 

TOM RICE, South Carolina 

MARKWAYNE MULLIN, Oklahoma 

ROGER WILLIAMS, Texas 

TREY RADEL, Florida 

MARK MEADOWS, North Carolina 

SCOTT PERRY, Pennsylvania 

RODNEY DAVIS, Illinois 

VACANCY 

NICK J. RAHALL, II, West Virginia 

PETER A. DEFAZIO, Oregon 

ELEANOR HOLMES NORTON, District of 

Columbia 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

EDDIE BERNICE JOHNSON, Texas 

ELIJAH E. CUMMINGS, Maryland 

RICK LARSEN, Washington 

MICHAEL E. CAPUANO, Massachusetts 

TIMOTHY H. BISHOP, New York 

MICHAEL H. MICHAUD, Maine 

GRACE F. NAPOLITANO, California 

DANIEL LIPINSKI, Illinois 

TIMOTHY J. WALZ, Minnesota 

STEVE COHEN, Tennessee 

ALBIO SIRES, New Jersey 

DONNA F. EDWARDS, Maryland 

JOHN GARAMENDI, California 

ANDRE ́ CARSON, Indiana 

JANICE HAHN, California 

RICHARD M. NOLAN, Minnesota 

ANN KIRKPATRICK, Arizona 

DINA TITUS, Nevada 

SEAN PATRICK MALONEY, New York 

ELIZABETH H. ESTY, Connecticut 

LOIS FRANKEL, Florida 

CHERI BUSTOS, Illinois 

PANEL ON 21ST-CENTURY FREIGHT TRANSPORTATION

JOHN J. DUNCAN, JR., Tennessee, Chairman 

GARY G. MILLER, California 

ERIC A. ‘‘RICK’’ CRAWFORD, Arkansas 

RICHARD L. HANNA, New York 

DANIEL WEBSTER, Florida 

MARKWAYNE MULLIN, Oklahoma 

JERROLD NADLER, New York 

CORRINE BROWN, Florida 

DANIEL LIPINSKI, Illinois 

ALBIO SIRES, New Jersey 

JANICE HAHN, California 

(III) 

CONTENTS Page 

Summary of Subject Matter .................................................................................... iv 

TESTIMONY 

Frederick W. Smith, Chairman, President, and Chief Executive Officer, FedEx 

Corporation ........................................................................................................... 10 

Charles W. Moorman, Chairman, President, and Chief Executive Officer, 

Norfolk Southern Corporation ............................................................................. 10 

Derek J. Leathers, President and Chief Operating Officer, Werner Enterprises, Inc. ............................................................................................................. 10 

James I. Newsome, III, President and Chief Executive Officer, South Carolina 

Ports Authority ..................................................................................................... 10 

Edward Wytkind, President, Transportation Trades Department, AFL–CIO .... 10 

PREPARED STATEMENT SUBMITTED BY MEMBER OF CONGRESS 

Hon. Janice Hahn, of California ............................................................................. 50 

PREPARED STATEMENTS SUBMITTED BY WITNESSES 

Frederick W. Smith ................................................................................................. 53 

Charles W. Moorman ............................................................................................... 59 

Derek J. Leathers .................................................................................................... 64 

James I. Newsome, III ............................................................................................ 76 

Edward Wytkind ...................................................................................................... 84 

SUBMISSION FOR THE RECORD 

Hon. John J. Duncan, Jr., a Representative in Congress from the State 

of Tennessee, request to submit the formal invitation letter sent to members of the Panel on 21st-Century Freight Transportation from Hon. Bill 

Shuster, a Representative in Congress from the State of Pennsylvania 

and Hon. Nick J. Rahall, II, a Representative in Congress from the State 

of West Virginia ................................................................................................... 46 

ADDITIONS TO THE RECORD 

A.L. Lotts, Director, RAIL Solution: 

Report entitled ‘‘The Steel Interstate System: a 21st-Century Railroad 

Network for the United States’’ ................................................................... 99 

Appendix A: Proposed Multimodal Feasibility Study of the Valley Corridor Organization and Criteria ................................................................... 155 

Hon. Judy Chu, Hon. Grace F. Napolitano, and Hon. Adam B. Schiff, Representatives in Congress from the State of California, joint written testimony ...................................................................................................................... 177 

Kurt J. Nagle, President and Chief Executive Officer, American Association 

of Port Authorities, written testimony ............................................................... 180 

iv 


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Insert offset folio 2 here 80577.002
vi 


Insert offset folio 3 here 80577.003
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Insert offset folio 4 here 80577.004
(1) 

OVERVIEW OF THE UNITED STATES 

FREIGHT TRANSPORTATION SYSTEM 

WEDNESDAY, APRIL 24, 2013 

HOUSE OF REPRESENTATIVES, PANEL ON 21ST-CENTURY FREIGHT TRANSPORTATION, COMMITTEE ON TRANSPORTATION AND INFRASTRUCTURE, Washington, DC. 

The panel met, pursuant to notice, at 10:00 a.m. in Room 2167, 

Rayburn House Office Building, Hon. John J. Duncan, Jr. (Chairman of the panel) presiding. 

Mr. DUNCAN. Good morning, and welcome to the first hearing of 

the Panel on 21st-Century Freight Transportation. 

Rule 18 of the Transportation and Infrastructure Committee 

rules allows the chairman, with the concurrence of the ranking 

member, to designate a special panel to inquire into any matter 

within the committee’s jurisdiction. Chairman Shuster and Ranking Member Rahall have designated this panel to examine the current state of freight transportation in the United States, and how 

improving freight transportation can strengthen the United States 

economy—in other words, how we move this country into the 21st 

century, transportation-wise. 

I am honored to have been selected to chair this special panel, 

and I am excited to be working with my friend Congressman Nadler from New York, as the panel’s ranking member. 

The safe and efficient movement of freight throughout the Nation 

impacts the day-to-day lives of every American, from the clothes 

you wear to the car you drive to the food you eat—the freight 

transportation system impacts all aspects of everyday life. In 2011, 

the U.S. transportation system moved 17.6 billion tons of goods valued at over $18.8 trillion. 

In the past, the conversation about freight transportation is focused on specific modes of transportation. However, given the 

multimodal nature of freight movement, it is important to examine 

the system as a whole. Goods frequently move back and forth between ocean vessels, highways, railroads, air carriers, inland waterways, ports, and pipelines. Bottlenecks arising at any point on 

the system can seriously impede freight mobility and drive up the 

cost of the goods impacted. For this reason, improving the efficient 

and safe flow of freight across all modes of transportation is critical 

to the health of the United States economy and the future of the 

Nation’s global competitiveness. 

The purpose of this panel is to provide recommendations to the 

committee on ways to modernize the freight network and make the 

United States competitive in the 21st century. I am excited about 

2 

the work we will do over the next 6 months, and I am glad that 

we have such a talented, diverse group of Members serving on the 

panel. 

I had previously chaired three of the largest subcommittees on 

this committee, and Chairman Shuster came to me and asked me 

to serve as vice chairman of the full committee, and I tried to help 

him coordinate and work to bring the work of all the specific subcommittees together, because when one subcommittee does something it affects the other subcommittees, as well. And so, that is 

what we are talking about. 

This special panel is patterned after something that Chairman 

Shuster did for the Armed Services Committee in the last Congress 

and he is very excited about this. He feels that the panel that he 

headed up for the Armed Services Committee, although a little 

smaller than our panel, achieved some very good results. 

And certainly we have an all-star panel of witnesses here today, 

and I will say more about them in a few minutes. But I am also 

very pleased that we have such an outstanding roster of Members. 

Chairman Shuster told me that he was going to give me a group 

of some of the more active members of the full committee, and that 

is what he has done. And also I think that Ranking Member Rahall 

has done the same with the Democratic members of this special 

panel. 

We are setting up an event some place in the Los Angeles area 

for the end of May, and we will be going also to Memphis and Louisville and New York and various other places because he wants us 

to take this panel around the country as much as possible. 

But before I introduce the witnesses that we have here today, I 

would like to call on the ranking member, my colleague, Mr. Nadler, for any comments that he wishes to make. 

Mr. NADLER. Thank you, Mr. Chairman. Mr. Chairman, let me 

begin by thanking Chairman Shuster and Ranking Member Rahall 

for convening this panel to examine freight transportation in the 

United States. I can think of no greater policy challenge facing this 

committee than addressing the needs of the Nation’s intermodal 

freight network. 

Mr. Chairman, we greatly look forward to working with you to 

develop freight policy and funding recommendations for consideration by the full committee. Facilitating interstate commerce is a 

fundamental role of the Federal Government, and one of the essential responsibilities of this committee. This panel will enable us to 

focus on how best to strengthen the freight network across all 

modes of transportation to meet current and future goods movement demands, whether it be grain shipments on the Mississippi, 

or 2-day Amazon.com deliveries to a New York City apartment. 

The safe and efficient movement of freight is critical to the Nation’s economy and global competitiveness. Our economic competitors are rapidly upgrading their transportation networks to meet 

the needs of the global economy. Unfortunately, we have not. And 

our transportation systems cannot efficiently meet the changing demands of the 21st-century economy. This panel has a real opportunity to address how we, as a Nation, and as a Congress, 

prioritize our efforts to strengthen our economy. 

3 

With regard to freight transportation, this requires that we look 

beyond just highways. We need to consider the critical roles that 

our ports, inland waterways, intracoastal waterways, airports, and 

freight railroads play in the movement of freight and commerce. 

Planning and prioritizing freight investments for the future requires an integrative and strategic assessment. This panel is a 

great starting point for that process. 

This panel must ensure that we have the freight policy, strategy, 

programs, and funding necessary to meet these changing demands. 

Although the committee has made some progress in freight issues 

over the years, there is much work to do. 

In 2005, the committee, with my strong support, developed the 

Projects of National and Regional Significance program, the original intent of which was to address major freight bottlenecks and 

congestion around the country. To that end, the SAFETEA–LU program provided dedicated funding and advanced critical freight 

megaprojects, including the Cross Harbor Freight Movement 

Project in New York, CREATE in Illinois, the Alameda CorridorEast in California, and the Heartland Corridor in Virginia, West 

Virginia, and Ohio. 

Although the Projects of National and Regional Significance program funded a discrete set of critical freight projects, these types 

of projects continued to face significant hurdles to funding under 

Federal-aid Highway Programs. In 2008, the Government Accountability Office, GAO, found a series of continuing barriers to funding 

freight projects, including: freight projects face competition for public funds and community support in the planning process; a lack of 

coordination among Government entities and private-sector stakeholders in advancing freight projects; and limited or restricted 

availability of public funds available for freight transportation 

projects. 

In 2012, Congress took some steps to begin addressing the needs 

of goods movement in the context of our current surface transportation programs. But many of the same barriers GAO identified in 

2008 continue to exist. 

MAP–21 authorized some incentives to encourage States to develop highway freight plans and strategies, and required the Federal Highway Administration to designate a national freight network. Although MAP–21 recognizes the important Federal role in 

creating a strategic vision for our freight system, there remains 

much work to do to expand this vision to include all modes of 

freight transportation—highway, rail, water, and air—to ensure 

that the resources are available to implement this vision. 

Unlike SAFETEA–LU, MAP–21 does not provided dedicated 

funding for national freight projects under the Projects of National 

and Regional Significance program. In addition, MAP–21 requires 

that almost all surface transportation funds be provided to States 

by formula. Although this State-based system accommodates State 

and local surface transportation projects well, it is poorly suited to 

address or to fund critical transportation infrastructure projects 

such as major freight projects which provide broadly dispersed benefits, but impose substantial localized costs. Such projects are critical to the health and welfare of the national economy, but difficult, 

if not impossible, to fund through traditional State highway forVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
4 

mula apportionments. Therefore, MAP–21 did not address what are 

arguably the most challenging aspects of implementing freight policy: what to pay for, and how to do it. 

How best to fund and advance the freight transportation system 

over the long term is an overarching and critical question facing 

this panel. We need the vision, the plans, and the means to address 

the Nation’s goods movement needs, and strengthen their economic 

competitiveness. The recommendations of this panel must lay the 

foundation for policies and resources to meet the future needs of 

our intermodal freight network. We should not be constrained by 

looking only at the transportation network we have, but rather, we 

should explore and evaluate policies that will develop the network 

we need for the future. That is our charge. And working together, 

we can meet these challenges. 

I look forward to hearing from the witnesses, and to working 

with my colleagues to develop a strategic vision for modern and 

competitive freight transportation—freight infrastructure system 

that we can recommend to the full committee. I look forward to 

working with you, Mr. Chairman, and with the Members from both 

parties, and I thank you and yield back the balance of my time. 

Mr. DUNCAN. Well, thank you. Thank you very much, Mr. Nadler. As I mentioned, this panel is patterned after one that Chairman Shuster did for the Armed Services Committee, and that 

panel was smaller and the chairman thought we should keep this 

panel small. But we had so many Members on both sides who 

wanted to serve on this panel, that we did end up expanding the 

membership. 

Ordinarily, under our rules that we are operating under this 

year, we have opening statements just from the chairman and the 

ranking member. But because this is the first meeting of this special panel, I have asked each Member to give a brief 2-minute 

opening statement. And ordinarily, we go by when they arrive at 

the hearing. But for these opening statements, I am going to go by 

seniority. So I will now call on Mr. Miller. 

Mr. MILLER. Well, thank you, Chairman Duncan. And I want to 

thank you for also coming down to my area next month, which is— 

I remember you coming there 14 years ago. Met at the Ontario Airport, which, I hate to say, is an extremely underutilized airport 

today. I know Congresswoman Hahn and I have discussed transferring authority back from LAWA to Ontario because they have just 

taken—stripped all the flights. 

But if you look at the Port of Long Beach in Los Angeles, they 

make up the largest U.S. container port complex in the United 

States. And some people think that the economy has been down. 

But if you look at the Port of Long Beach in 2010 they actually set 

a record, all-time high for movement coming through our area. And 

this panel plays an important role in safe and efficient flow of 

freight across the country. 

I am excited to be on this panel. It is a huge issue in our region, 

because much of the development growth of commercial in our area 

has been because of the rail and truck transportation throughout 

southern California coming from our ports. Colton Crossing is a 

great example, if you look at Union Pacific and BNSF. That is a 

5 

major, major connection of rail throughout the United States 

from—coming in from the Long Beach and the L.A. Harbor. 

But California’s trade corridor is huge when it applies to cargo 

coming in from Asia. The freight arrives in southern California 

ports, gets transferred by rail and truck and stored in warehouse 

and distribution centers throughout southern California. And if you 

go down there, you will see when you drive on the freeway the impact of rail. You see it at grade crossings, and the impact of truck 

traffic going to those warehouses that store the goods that come to 

the United States from Asia, specifically, and are transferred 

throughout the United States. 

Ontario National Airport is a hub for UPS also, and this sequestration has had a major impact on them being able to ship goods 

back and forth. And that is something this panel, I think, needs to 

address also. 

Southern California estimates that the next 30-year freight 

movement will increase by three times throughout our region, and 

this panel needs to address that and look to that. And I thank you 

for your time and yield back. 

Mr. DUNCAN. Thank you very much. Mr. Sires. 

Mr. SIRES. Thank you, Mr. Chairman, for holding this panel, this 

meeting, and I want to thank Chairman Shuster and Nick Rahall 

for thinking forward. 

You know, I represent a district in New Jersey which has all the 

topics that we are going to talk about. We talk about rail, we talk 

about ports, we talk about shipping, we talk about highways, we 

talk about pipelines, which was the latest, going through Jersey 

City into New York, which was a big issue. 

And the concerns that I share with members of the committee is 

that the district that I represent is very congested. And we have 

an issue now where, as the Panama Canal is being finished, we 

have to raise the Bayonne Bridge so we can get the super-tankers 

in to the district and move the merchandise out. 

Eighty percent of the merchandise that comes through the Port 

of Elizabeth and Port of Newark is basically consumed in the region. So we have to move it in the region. And it seems to me that 

everything that we move is around the New Jersey Turnpike. So 

we have to make sure that moving freight is not just through 

trucks, but to use every single mode of transportation so we can 

alleviate the congestion in areas that are like mine. 

So I am really looking forward to this panel. I think we will be 

able—representing the districts that we represent, we will be able 

to make some real good suggestions. I just hope we take some of 

this up in the future. 

You know, I know I speak to the Port Authority constantly. And 

the growth that we expect in our area is immense, because of the 

new—the expansion of the canal. And obviously, our biggest trading partner, Europe. So—and obviously, also, the region that is just 

so large, in terms of consuming goods. 

So, I look forward to serving on the panel, and thank you very 

much for putting me on this panel. 

Mr. DUNCAN. Thank you very much. 

Mr. MILLER. Mr. Chairman, might I point out one thing? 

Mr. DUNCAN. Yes, Mr. Miller. 

6 

Mr. MILLER. In my opening statement I ran out of time, but I 

am glad to see FedEx is here, because they have a hub in Ontario 

Airport also, and tremendously being impacted right now by sequestration. 

Mr. DUNCAN. All right. Well, thank you very much. Next on our 

side is Mr. Crawford. 

Mr. CRAWFORD. Thank you, Mr. Chairman. I want to thank all 

the witnesses for joining us here today. And all of you represent 

critical interests throughout the freight transportation. Each of you 

can offer this panel a unique perspective into how our committee 

can encourage economic growth and job creation through improving 

our Nation’s freight transportation network. 

I represent the First Congressional District of Arkansas. And we 

are blessed with a variety of transportation modes. My district contains hundreds of miles of rail lines and highways, and the entire 

Arkansas border of the Mississippi River. Each of these modes of 

transportation offer unique benefits to the businesses that set up 

shop in my district. Farmers in the district will regularly rely on 

a combination of trucks, barges, and trains to move their crops 

throughout the country and overseas. 

Just across the river from my district is the headquarters of 

FedEx, which just celebrated its 40th anniversary—congratulations, Mr. Smith. FedEx helped pioneer intermodal transportation, 

and continues to advance the industry today, delivering packages 

through the air, by ground, and by sea. In just 40 years, FedEx has 

expanded their operation from delivering 186 packages on their 

first night to 4 million pieces of freight per day. I am glad to have 

the founder and CEO of FedEx, Fred Smith, here today, and look 

forward to his testimony. 

I will just—on a brief, personal note, I have a good friend that 

has worked for FedEx for, I guess, going on 20 years. And I texted 

her as we were coming into the hearing. I said, ‘‘I have got your 

boss in front of us,’’ and she said, ‘‘That can’t be, my boss is with 

me today.’’ And then it dawned on her who I was talking about. 

She goes, ‘‘Oh, you are talking about Fred Smith.’’ So I just got 

that text. I think the light went on, and she knew who I was talking about. Thank you for being here. 

Our Nation’s freight system attracts businesses to the United 

States, strengthens local economies, and puts Americans to work. 

However, all of these advantages will disappear if we fail to maintain and strengthen our infrastructure. I am honored that Chairman Shuster has selected me for this special panel, and I look forward to working with my colleagues on this panel over the next 6 

months to gather the best recommendations for the committee to 

improve our freight network. Yield back. 

Mr. DUNCAN. Thank you very much. Ms. Hahn. 

Ms. HAHN. Thank you, Chairman Duncan, Ranking Member 

Nadler. I am really happy to be part of this panel. And I am really 

looking forward to the work that we are going to accomplish. I also 

want to give a shout-out and congratulate FedEx on your 40th anniversary. It is a great story that Fred Smith started in 1973, with 

14 small aircraft from Memphis delivering 186 packages to 25 cities around the world. We know that you are a global company 

today. Congratulations. 

7 

For me, I live with the Port of Los Angeles in my backyard, in 

San Pedro, California. And so freight policy is always on the forefront of my mind. When I came to Congress from the Los Angeles 

City Council, I was concerned that I didn’t think there was enough 

dialogue about our Nation’s ports and our freight policy. So I cofounded, along with Congress Member Ted Poe from Texas, the 

Port Caucus. And we believe that we are going to finally bring the 

kind of attention on our Nation’s seaports that needs to happen. I 

was excited when the President, I think for the first time, mentioned ports in his State of the Union Address. 

With the Panama Canal, numerous ports across the country are 

trying to dredge to be able to take the Panamax and the New 

Panamax ships. At the Port of Los Angeles, we just completed our 

dredging project, but this isn’t true for other ports. We need to examine spending of the Harbor Maintenance Trust Fund. We collect 

these funds at our ports, but they are building up a surplus in the 

trust fund. I think we should be able to access these funds and ensure that all the ports that contribute receive an equitable share 

of those funds. 

When I discuss our Nation’s competitiveness I always say it is 

not just how deep our ports are, but it is the quality of our landside infrastructure that is going to matter. We wouldn’t be here 

today on this panel if we didn’t recognize that we all have major 

freight infrastructure needs: the quality of our highways, bridges, 

grade separations, interchanges. But we can’t just fix one region’s 

freight infrastructure and not another, because, as we know, it is 

a national system. 

For example, the goods that leave the Port of Los Angeles take 

48 hours to arrive in Chicago, and then another 30 hours to travel 

across that city. That bottleneck means that our Nation is at an 

economic disadvantage. We have higher cost for consumers, more 

congestion, more pollution, and less jobs. We need to stop this 

piecemeal system and develop and invest in a strong national 

freight system. And I know that the recommendations that this 

panel comes up with are going to be a huge step in solving that 

problem in our country. Thank you. 

Mr. DUNCAN. Thank you very much. None of the other Members 

on our side want to make an opening statement. Mr. Lipinski, do 

you have any statement you would like to make at this time? 

Mr. LIPINSKI. Thank you, Mr. Chairman. I want to thank you 

for—and Chairman—and Ranking Member Nadler for holding this 

hearing. And I am pleased that Chairman Shuster and Ranking 

Member Rahall created this panel, and honored to be a member of 

it. 

We know that all of us here in this room understand that we 

have to overcome the silos that we have here in the committee and 

develop a plan to deal with our multimodal freight network that is 

absolutely critical to our economic prosperity. 

I had the privilege of serving as Illinois’ most senior member on 

the committee, and as the sole democratic representative from the 

Midwest on this panel. Our region—in particular, northeastern Illinois, is critically important to the movement of people and freight. 

That is because from highways to aviation to railroads, pipelines, 

8 

inland waterways, to Great Lakes shipping and beyond, we are at 

the heart of our Nation’s transportation system. 

Unfortunately, we all know that northeast Illinois’ transportation 

network is antiquated and can’t meet current, much less future, 

freight growth. I know that that has already been mentioned by a 

number of the Members here, on the panel. And I am hoping that 

this panel will visit the Chicago area, northeastern Illinois, to see 

firsthand its importance in the challenges that we face. 

In order to begin meeting our needs, I secured $100 million seed 

money for the CREATE rail modernization program under 

SAFETEA–LU. It is an important public-private partnership that 

will reduce congestion of the Nation’s rail hub, and will improve 

our transportation system’s reliability, and more efficiently move 

goods to and from cities such as New York, Los Angeles, and Seattle. We have gotten off to a good start on CREATE, but we still 

have a ways to go. 

An important question for this panel is how to advance largescale projects like CREATE. I think one of the answers is to bring 

back the Projects of National and Regional Significance program, 

which I know Mr. Nadler had mentioned. 

So I am looking forward to working on this panel over the next 

6 months to develop solutions and to make our freight network 

more efficient and, today, to hear from our witnesses. Thank you. 

Mr. DUNCAN. All right. Well, thank you very much. And I want 

to introduce our panel at this time. This is my 25th year on this 

committee, and some of the veterans around here will remember 

that many years ago we had some hearings that lasted 7 or 9 or 

10 hours and nobody would be here to hear the witnesses, none of 

the Members, and the hearings would drag out. 

And so, when I started to chair the Aviation Subcommittee back 

in 1995, I said my ideal hearing was one with a panel of five witnesses, and we would not have hearings that drag out for a long, 

long time. We had many other people who wanted to testify on this 

panel today, and maybe we will be able to get to them, get to some 

of them at later hearings. But each one of our witnesses today was 

chosen for a very specific reason, because they all represent different parts of our transportation world. 

And our first witness, I am very honored to have Fred Smith 

from FedEx. Some people have already mentioned that FedEx is 

celebrating a big anniversary, and that it started with 186 packages on its first day and now delivers more than 9 million daily 

and more than 300,000 employees and connecting 220 countries. I 

would guess that Mr. Smith is probably amazed at how his company has grown over the years. But great success, and certainly 

Mr. Smith is one of the most respected men in Tennessee. He is 

almost 400 miles from me in east Tennessee, but we are proud of 

him, nonetheless. 

Next we have Wick Moorman from Norfolk Southern. Norfolk 

Southern is one of the greatest companies in this Nation with a 

long history, a Class I railroad. Railroads carry more freight than 

any other mode of surface transportation and operate on more than 

200,000 miles of tracks throughout the Nation. And last year—and 

this always has impressed me—the freight railroads spent almost 

9 

$14 billion of their own private capital to improve and expand their 

tracks. 

Next we have Derek Leathers, president of Werner Enterprises. 

Werner operates one of the largest trucking fleets in the world. 

More than 250 million trucks carry freight on our highway system 

each year. Many of the small communities don’t have a railroad or 

an airport or a waterway nearby, but people live and work and 

shop along the Nation’s 4 million miles of highways and roads. 

And, as a result, many consumer goods are often transported on 

the highway system, most of them for at least part of its journey. 

I am very pleased also to have Jim Newsome. Jim Newsome has 

had a very distinguished career. He is the president of the South 

Carolina Ports Authority, which operates the port in Charleston, 

South Carolina. But he also has extensive experience as a senior 

executive in the container shipping industry. And as such, he can 

offer a unique perspective on maritime transportation issues. 

And last, but certainly not least, we have Mr. Ed Wytkind. And 

Mr. Wytkind is joining us from the Transportation Trades Department of the AFL–CIO, where he is president. He has been before 

this committee on several occasions. 

Transportation workers play a key and very important role in 

the performance of the freight system. And I am glad that he is 

here today to discuss their role in improving our freight transportation system. 

Just before we start the testimony I would like to call on my colleague, Mr. Cohen. Mr. Cohen is not a member of the panel, but 

he has made a special effort to be here this morning to welcome 

one of our witnesses. 

Mr. COHEN. Thank you, Mr. Chairman. I appreciate the volunteer courtesy. It is indeed my honor to be here, and to congratulate 

the panel on its work and its selection of its first testifier. 

There could be nobody better in this country—and with all due 

respect to the other members of the panel, who are highly esteemed experts—to give the opening remarks on the 21st century 

than Fred Smith. Because the 21st century started in 1973, when 

he started FedEx, and that was the 21st century of transportation. 

Knowing Fred, he is already in the 22nd century. He is a forwardthinking man, and Memphis is proud to have had people that were 

innovators and shook the world, from Kemmons Wilson, who 

learned how to do the motel industry and the hotel industry, to 

Elvis Presley, to Fred Smith. 

[Laughter.] 

Mr. COHEN. There is nobody that represents their company, 

probably, as intimately and as recognized as such as Fred Smith 

and Federal Express. And what he has done for the country, in volunteering as a Marine and serving in Vietnam, in serving on the 

World War II committee to put together the funds and the planning for the memorial on the mall, and for his work on the Energy 

Security Subcommittee, which is so important to our country’s security in the future, and to my city, where anything involved with 

our city that is important, whether it is the FedEx Forum, or 

whether it is the zoo which I visited just last week with its beautiful Teton Park tribute to the grizzlies and the wolves and the 

photography of all that area which I visited and appreciated. 

10 

Fred Smith knows transportation. And my father told me that in 

his time, ‘‘What was good for General Motors was good for the 

country’’ was a credo. I think today what is good for Federal Express is good for the country. I welcome Fred Smith and I am 

proud that the committee has allowed me to introduce him. Thank 

you, sir. 

Mr. DUNCAN. Well, thank you very much. Mr. Nadler turned to 

me and he said he believes this is the first time Elvis Presley has 

been mentioned at one of our hearings, and I think that is true. 

[Laughter.] 

Mr. DUNCAN. Again, I would like to welcome our witnesses, and 

thank them for being here. And I ask unanimous consent that their 

full statements be included in the record. 

Ordinarily, we ask our witnesses to limit their testimony to 

about 5 minutes. Because of the importance of the subject matter, 

if you go 6 or 7 minutes we are not going to worry about it too 

much. 

But, Mr. Smith, you may begin. 

TESTIMONY OF FREDERICK W. SMITH, CHAIRMAN, PRESIDENT, AND CHIEF EXECUTIVE OFFICER, FEDEX CORPORATION; CHARLES W. MOORMAN, CHAIRMAN, PRESIDENT, AND 

CHIEF EXECUTIVE OFFICER, NORFOLK SOUTHERN CORPORATION; DEREK J. LEATHERS, PRESIDENT AND CHIEF 

OPERATING OFFICER, WERNER ENTERPRISES, INC.; JAMES 

I. NEWSOME, III, PRESIDENT AND CHIEF EXECUTIVE OFFICER, SOUTH CAROLINA PORTS AUTHORITY; AND EDWARD 

WYTKIND, PRESIDENT, TRANSPORTATION TRADES DEPARTMENT, AFL–CIO 

Mr. SMITH. Thank you very much, Mr. Chairman and Ranking 

Member Nadler. I appreciate being invited to appear here to represent our 300,000 team members around the world. I appreciate 

the kind remarks of our Congressman Cohen, who works very hard 

to represent our area so well. I want to apologize to the southern 

Californians for our Grizzlies who are going to finally beat the 

Clippers later this week, although we have struggled a little bit 

with that in the preceding days. 

As has been mentioned, FedEx covers an awful lot of the transportation spectrum. And I want to commend you, Mr. Chairman 

and Chairman Shuster and Ranking Member Rahall of the full 

committee for setting up this panel. It is very important. Having 

had a career in transportation that spans now 40 years, I have 

watched the important effect that the leadership in the Congress 

in both Democratic and Republican administrations have had on 

the well-being of this country through far-sighted transportation 

policy. 

When I first began in transportation, logistics measured as the 

cost of transportation, inventory, carrying cost, and warehousing 

were about $.15 out of every dollar in the economy. And because 

of the substantial improvements in the Nation’s infrastructure, and 

the deregulation that took place beginning in the early seventies 

through 1994, logistics costs were reduced to about 9 percent. And 

that is a huge increase in national wealth and productivity and 

well-being. 

11 

It is essential, however, for the Congress to recognize that those 

productivity increases will begin to go the other way, unless we can 

modernize a lot of our transportation infrastructure. 

As has been noted, FedEx Corp. has four operating divisions: 

one, the original Federal Express, which is a worldwide operation 

of 660 aircraft, 47,000 trucks serving 220 countries, and moves 

about 4 million shipments a day. In addition, we have FedEx 

Ground headquartered in Pittsburgh, which is the second-largest 

ground parcel company, and FedEx Freight, which is located in 

Memphis, and its operating headquarters is in Arkansas, which is 

the largest less-than-truckload operation. Plus we have our trade 

networks unit which moves intermodal goods by rail and sea. And, 

all told, the FedEx systems move, as you noted, Mr. Chairman, 

about 9 million pieces a day. 

In the air side of the business, the fundamental issues are twofold. Number one, we have to move forward and get a Next Generation air transportation, air traffic control system. We waste millions and millions of gallons of fuel a day, impede the productivity 

of our Nation’s commerce and the traveling public by not modernizing our air traffic control system to a satellite-based system that 

allows much more flexibility and efficiency. 

The second key element in improving our air transportation system are more runways. We built one in Memphis in 2000, a worldwide-capable runway that now allows the FedEx Express 777’s to 

fly nonstop from Memphis to points in Europe and Asia and the reciprocal. 

In the ground transportation business I think the issues are 

equally as straightforward. Number one, we need a funding mechanism in the form of a revised fuel tax, or a vehicle mileage tax, 

which the user community almost universally supports in order to 

fund additional infrastructure, particularly in the congested areas 

of the country like D.C., the Northeast Corridor, as been mentioned, and New Jersey, and southern California. 

The second thing which we feel very strongly about and is a very 

easy and quick solution, is to permit the use of longer vehicles in 

the sectors of the industry that use twin trailers. Today those are 

limited to 28 feet each. And the reality is, in the ground parcel 

business, the vehicles are significantly underutilized because the 

traffic being generated by the e-commerce world, the direct shipping, and the lighter weight, smaller packages, the vehicles are not 

very well utilized. They pull approximately 22,000 to 24,000 

pounds in the two 28-foot trailers. 

In the less-than-truckload industry the same thing applies. On 

there the cube weight ratio will get between 26,000 and 28,000, 

generally. So, if the Congress permitted the use of somewhat longer 

vehicles, our recommendation is 33-foot vehicles. You would have 

very quickly vast improvement in national efficiency because you 

would burn hundreds of millions of gallons of fuel less, with the attendant reduction in emissions. You would increase the productivity of the national transportation system, making it more efficient and less costly to the consumers. And the third thing that 

would happen is that you would have significantly enhanced safety 

because fewer vehicles on the road at the end of the day is the 

most important element in reducing the number of accidents. 

12 

So, we feel that, as I mentioned in the air transport sector, the 

Next Generation air transport—air traffic control system is essential. Continue building more runways. A new funding mechanism 

for our infrastructure. And the permission to use longer twin vehicles, not—it does not require any weight increase, which puts more 

pressure on our infrastructure, in terms of repairs and things of 

that nature. 

I would also note that FedEx, as I mentioned, is a very heavy 

user of intermodal services, including the excellent services of Norfolk Southern, who just built a big intermodal yard just east of 

Memphis. And we move a significant amount of goods through the 

ports of the United States. So, clearly, the efficiency of our rail and 

our port system is equally important to the other sectors that I just 

mentioned. But I think the solutions there are very specific, very 

straightforward, and really not subject to a lot of debate, since the 

effect of these measures would be so profound. 

Thank you very much, Mr. Chairman. 

Mr. DUNCAN. Well, thank you, Mr. Smith. 

Next we have Mr. Moorman. 

Mr. MOORMAN. Thank you, Chairman Duncan, Ranking Member 

Nadler, panel members. I certainly appreciate the opportunity to 

discuss America’s freight rail system. And I want to say it is my 

honor to do so on behalf of our 30,000 customers, our 32,000 shareholders, our 39,000 suppliers, and our 8,700 customers, which include FedEx, Werner Enterprises, and the South Carolina Port. So, 

gentlemen, I thank all of you, as well. 

I will be using a few images today, so if you would take a look 

at the screens, first is our tribute to FedEx. 

[Laughter.] 

Mr. MOORMAN. I thought I would tell you a little bit about our 

business. Norfolk Southern is the fourth largest privately owned 

U.S. railroad. We transport about 7 million shipments a year. Our 

tracks primarily serve the eastern U.S., but with our connections 

to ports and other modes we effectively access the world. And while 

my comments today highlight Norfolk Southern, I do want to say 

that America’s 7 Class I railroads and 550 short lines do operate 

as a network, and we share the opportunities ahead. 

Last week the Wall Street Journal happened to say that railroads—and I quote—‘‘make headlines only when calamity strikes.’’ 

Well, that may be true, but because of our tremendous safety 

records, calamity strikes very rarely in our business. And we generally work in the background, safely and economically moving this 

Nation’s raw materials, intermediate products and finished goods 

wherever they need to go. 

In our company’s case, we have been doing that for 186 years— 

not 186 packages, I noticed—and we are planning at least for that 

many more. And because we think like that, it is important to understand that in railroading we have to make very expensive, longterm bets, and then hope to make adequate returns on them, even 

though our crystal ball is often cloudy. 

Our locomotives last for more than 20 years. Freight cars last a 

lot longer than that. New tracks can carry traffic for decades. And 

big terminals—we are expanding one in Bellevue, Ohio, now— 

serve, literally, generations of customers. We had a bridge over the 

13 

Ohio River that just turned 100, and our chief engineer promises 

me faithfully that if we continue to invest, it will be there another 

100 years. 

One example that we have a slide of is what we call the Crescent 

Corridor. It is an example of strategic investment that will improve 

infrastructure, reduce transit times, increase capacity, and provide 

a much better transportation alternative for the enormous amount 

of freight that currently moves by highway from New Jersey to 

Louisiana. And we had a slide up, I think, that showed the new 

terminal that Mr. Smith just mentioned outside of Memphis. The Crescent Corridor is a 10-year project, $2.5 billion cost 

shared by NS and partners, and we have a screen that shows just 

the benefits for a single State. Messrs. Duncan, Hanna, Nadler, 

and Sires are familiar with the corridor’s importance, because your 

district includes many of its components. And also—and Mr. Lipinski pointed this out—Ms. Brown and Mr. Lipinski have been leaders for years on the CREATE project and the high-speed rail 

projects that will serve Chicago. They are massive projects and 

your efforts are appreciated. They are not small, they are not inexpensive, but they will serve generations to come. 

We are getting ready for traffic from the Panama Canal expansion. We are moving crude oil today. We are serving the domestic 

natural gas industry. We are hiring a lot of military veterans and 

Reservists. And with leaders from labor organizations like Mr. 

Wytkind, we are training tomorrow’s workforce, we are reducing 

our carbon footprint, and improving technology to use fuel. We are 

contributing to the goal of increasing exports. In fact, we are 

partnering with Mr. Newsome and his team, developing the South 

Carolina Inland Port. It is a great opportunity. 

I will show you another slide here of what we have done with 

a similar project in Virginia at Front Royal, and you can see all of 

the industry that flocks to these locations when we build these facilities. 

So, what can Government do? First, support and then ardently 

resist any attempt to alter freight rail’s continuing ability to earn 

adequate returns and invest in our companies. For every revenue 

dollar we earn, we return $.40 to infrastructure and equipment. 

Just through—from 2010 through the end of 2013, we, Norfolk 

Southern alone, will invest $7.5 billion in private capital. That sustains jobs. In the last 3 years we have hired more than 9,000 people, and will hire 1,200 this year. 

And this is critically important because industry’s jobs and taxes 

want to go where the railroad is. Last decade, we have located 

1,021 new and expanded facilities along our lines, which represent 

almost $30 billion in customer investment, and about 50,000 jobs. 

And that is just one railroad. 

The second thing, if you can do it, put the economy on a sound 

footing, because we are all creatures of the economy. To the extent 

that we have a stable economic environment for long-term growth, 

and can see a clear path forward, it helps all of us. 

And then, finally, find sensible ways to allow the private sector 

and our partners to invest in projects that will serve the economy 

of tomorrow. And in the regulatory arena I will say that the longer 

it takes us to steer through regulatory hurdles, the longer we all 

14 

wait for economic growth. Promote regulations that reflect today’s 

conditions and today’s technology, so that they enhance, rather 

than deter, safety, productivity, and investment. 

Private-owned railroads are not only a barometer of the economy, 

but they are an essential element in solving this country’s freight 

transportation problems. We are planning on growing, and we are 

investing for the future. And we hope that, working with you, we 

can all look ahead and do everything possible to make that happen. 

Thank you. 

Mr. DUNCAN. Thank you very much, Mr. Moorman. 

Mr. Leathers. 

Mr. LEATHERS. Chairman Duncan, Ranking Member Nadler, and 

members of the panel, thank you for the opportunity to testify. My 

name is Derek Leathers, and I am the president and chief operating officer of Werner Enterprises. We are a diversified logistics 

company with nationwide and global services, providing truckload 

freight management and intermodal services to our customers. I 

point out the multimodal nature of our business, because I think 

it is that kind of collaboration that we do every day with gentlemen 

on this panel, as well as others across the Nation, that help deliver 

Americans goods. 

Mr. Chairman, we look forward to working with this panel to 

craft a reauthorization bill that makes the necessary spending decisions, and puts into place the reforms which will allow the trucking 

industry to move the Nation’s freight more safely, more cleanly, 

and at a lower cost to our customers and, ultimately, to the end 

consumer. While I am testifying on behalf of Werner, my statement 

is consistent with the position of the American Trucking Association, of which we are a member. 

Unlike other modes which control their capital investment decisions, the trucking industry is wholly dependant on Federal and 

State and public agencies to spend the $33 billion in highway user 

fees the trucking industry contributes annually in a way that provides the industry with good return on our investment through the 

improvements and highways and infrastructure on which we operate. 

With MAP–21’s addition of performance measures, and the creation of a new freight program which includes identification of a 

highway freight network, Congress took significant steps toward 

improving the Federal-aid Highway Program. We encourage the 

committee to build on this progress by dedicating resources to 

projects that address major freight network bottlenecks. 

Highway bottlenecks cost the trucking industry $19 billion each 

year in lost fuel, wages, and equipment utilization. We also recommend a much greater investment in the National Highway System, which comprises just 5 percent of highway miles, yet carries 

97 percent of truck freight and 55 percent of all traffic. The ATA 

supports dedicated Federal spending for last-mile highway intermodal connectors whose generally poor condition affects the efficiencies of all our modes. 

It will be difficult, however, to make these strategic infrastructure investments without more revenue. As the committee is well 

aware, the Highway Trust Fund will be in serious financial straits 

in 18 months from now. We cannot continue to rely on the general 

15 

fund to bail out the program year after year. And reducing the size 

of the program to match current user fee receipts is simply untenable, in our view. 

It is time for Congress to make the difficult but vital decision to 

raise and/or index the fuel tax, or do both, to ensure stable funding 

is available to address the costly deficiencies facing our highway 

network. Alternative funding and financing arrangements such as 

tolls, vehicle miles taxes, in our view, are of limited utility and are 

a far-less efficient source of project funding than fuel tax and other 

traditional revenue sources. 

Mr. Chairman, it is critical that we make the most of our limited 

highway capacity. The growth in an automobile and truck travel 

continues to greatly outpace new lane miles of highway, and that 

trend will continue. Current Federal policies prevent the trucking 

industry from operating its cleanest, safest, and most efficient 

equipment. The United States has the lowest weight limits in the 

industrialized world. This makes our domestic industries less competitive, and acts as an artificial tax on the American people, by 

unnecessarily raising the price of consumer goods. 

More importantly, these regulations force the trucking industry 

to operate more trucks than are necessary, increasing crash exposure and causing trucks to burn more fuel, which increases emissions. There are hundreds of studies and decades of actual experience with these higher productivity to support giving States greater authority to increase their limits and to modernize Federal 

length standards without a detrimental impact on safety or the 

condition of the highway infrastructure. 

Finally, while we are bullish on the future of intermodal, and actively work with our customers on modal conversion, claims that 

these changes will have significant impact on modal share, in my 

view, are overstated. Seventy percent of all freight moves by truck 

today. And although intermodal volumes are growing rapidly, 

intermodal’s 1.8 to 2.2 percent share is unlikely to change, even in 

the most bullish projections. 

We will continue to do our part working with the rail industry 

and our partners at NS to find opportunities for intermodal conversion. But that will not change the capital investments still necessary to maintain and improve the Nation’s highways that are 

still required to support the remaining 70 percent of freight movement. Thank you for the opportunity to testify, and I look forward 

to your questions. 

Mr. DUNCAN. Thank you very much, Mr. Leathers. 

Mr. Newsome. 

Mr. NEWSOME. Chairman Duncan, Ranking Member Nadler, and 

members of the panel, I am honored to have the opportunity to testify here today. 

The container shipping industry has been instrumental in the 

significant growth of globalization over the last 50 years. U.S. shippers enjoy a very competitive market for ocean transportation services. The service provided for containerized cargo is remarkably reliable, and has supported the establishment of complex import and 

export supply chains routinely utilized by major U.S. corporations 

in their global transactions. 

16 

It also should be noted that ports face significant competition. 

Ocean carriers have a choice of where to call and when. If a port 

is unable to provide an efficient and cost-effective option, its customers will go elsewhere. The prospect of heightened competition 

has been mentioned here this morning between east and west coast 

ports as a result of the Panama Canal expansion, and it is wellchronicled in industry dialogue. 

Globalization and the offshoring of significant amounts of manufacturing have led to significant trade growth, a lot of which was 

import-related. In the last 5 years, however, the prevailing trend 

has been an exporting and manufacturing renaissance from the 

United States. We have some commentary on this on some slides 

that we are showing while I am giving this testimony. 

The idea of doubling exports, as articulated by the Obama administration, seems to have been a worthy and timely goal. A German company which manufactures in South Carolina, BMW, is 

now the largest single exporter of automobiles from the United 

States. The global shipping industry, especially the container carriers, has responded with significant investment in new vessels. 

This year we will see the largest injection of new container capacity 

into the global container fleet in the history of containerization. 

Eighty percent of the container ship capacity on order is bigger 

than can go through the Panama Canal today. And by the time the 

Panama Canal is expanded in 2015, 50 percent of the container 

ship capacity and operation will be post-Panamax in size. 

These large ships bring dramatic improvements in both economic 

and environmental efficiency. They require reliable ports at origin 

and destination to realize these benefits capable of handling such 

ships productively, and with minimal waiting due to depth or 

height restrictions. 

Ports across the country have made and continued to make significant investment in order to satisfy such requirements. For example, the South Carolina Ports Authority is investing $1.3 billion 

in the next 10 years in existing and new facilities to handle mainly 

cargo growth. 

The State of South Carolina is additionally investing $700 million in port-related infrastructure. In view of the uncertainty with 

regard to the availability of Federal harbor deepening appropriations, the State of South Carolina has set aside the entire $300 million cost of our deepening project, both the State and the Federal 

share. Our deepening project is designed to provide a 50-foot harbor comparable to others already authorized on the east coast, allowing the handling of ships at 48 feet of draft without title restriction, and at half the cost of other comparable deepening projects in 

our region. These investments are indicative of the strategic role 

that ports play in the economic development of the southeast region and our country. 

Going forward, it is vital that a viable strategy and process is established at the Federal level to bring the port capability in line 

with the handling requirements for such large ships. This is a 

prime responsibility of the Federal Government, as these are Federal harbors. 

The process for studying and funding harbor improvements and 

other restrictive infrastructure issues such as low bridges has neiVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00024 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
17 

ther been timely, predictable, nor well funded. These issues should 

be addressed in a water resources development act, such as the legislation being contemplated this year by this committee. However, 

there have been only two WRDA bills signed into law since the 

year 2000, one in the year 2000 and one in 2007. 

The legislative process for approval and funding of major port 

projects has been—also been made more difficult by the demise of 

the Federal earmark, which is a traditional source of funding such 

projects. Accordingly, the funding is woefully short of the requirement and commitment needed to modernize the U.S. port network, 

and is an impediment to future freight mobility. 

The good news is that the shortcomings of the harbor freight improvement process seem to be well-recognized and some improvements are at hand. The U.S. Army Corps of Engineers has 

proactively developed new process guidance to speed up the study 

of such port infrastructure projects. They have issued a first paper 

relative to formulating a cogent strategy for prioritizing harbor improvements. 

But sustainable improvement will only be realized when a private sector-type capital budgeting approach is taken to such port 

improvement projects entailing the following major components: 

the establishment of a significant and predictable capital budget to 

address U.S. harbor shortcomings over multiple years; the development of a clear system of prioritization for such projects relative to 

cost benefits and the capability they provide; a rule-based authorization system for ports, which takes the place of individual authorizations when a cost benefit hurdle is met; the recognition, potentially painful, that all ports cannot be deepened with the current 

Federal resource constraints, and that there will be winners and 

losers in the prioritization scenario; and longer term, the need to 

potentially find a user fee system to cover harbor improvements 

does not exist for harbor maintenance. 

I earnestly commend the attention of this panel and the full committee to this important infrastructure priority, without which the 

benefits of exporting and manufacturing growth cannot possibly be 

realized. Thank you. 

Mr. DUNCAN. Thank you very much, Mr. Newsome. 

Mr. Wytkind. 

Mr. WYTKIND. Thank you, Mr. Duncan and Mr. Nadler. And I 

want to thank Mr. Shuster and Mr. Rahall for not only forming 

this panel, but for giving transportation labor the opportunity to 

help you launch the work of this panel. I commend the committee. 

It has always been a leader in trying to advance national debates 

on these important issues, and I am honored to be a part of this 

process. 

I am also honored to offer the perspective of transportation workers. Whether they work in the freight rail, port, maritime, aviation, 

highway, or trucking sectors, they together make up a transportation system for America that works and that delivers for the 

American people and American businesses. They are also members 

of the 33-member unions of the Transportation Trades Department, 

AFL–CIO, that I am the head of. 

This is an industry that has always supported middle-class careers. In no small measure, these good jobs have been the result 

18 

of the collective bargaining rights that many transportation employees have secured. These are the types of jobs that support our 

communities and, in turn, drive our economy but, unfortunately, 

continue to allude too many Americans that are still out of work. 

We appear today to urge the committee to make more strategic 

investments in freight transportation. They are a way to boost our 

economy and our shrinking middle class. 

Our freight rail members operate and maintain a powerful and 

efficient network that has become an important driver of our economy. For every freight rail employee hired, another five Americans 

are gainfully employed. Our maritime, longshore, and warehouse 

members are employed on vessels and at docks along the east, 

west, and gulf coast, Hawaii, Alaska, the Great Lakes, and major 

U.S. rivers. Their work enables the U.S. to export and import goods 

and fuel the world’s most powerful economy. 

Our transportation construction unions represent workers who 

build much of the infrastructure that lies at the center of the 

freight transportation debate. Boosting investments in freight 

transportation will create thousands of construction jobs at a time 

when unemployment in that sector is still stubbornly high. 

Our aviation members operate, maintain, and support air carrier 

operations, both all-cargo carriers and commercial passenger carriers that, combined, carry millions of tons of freight, domestically 

and across the globe. The Nation’s aviation employees, both air carrier employees and those who work in and maintain our air traffic 

control system, who we also represent, play a pivotal role in our 

freight transportation network. 

Our members combined help to move what this panel has identified as over 17 billion tons of goods valued at over $18 trillion. The 

DOT, for its part, says that freight tonnage nationally will grow by 

70 percent by 2020, with some freight gateways experiencing a tripling of volumes. That single—and, we believe, daunting—fact 

alone should inspire Congress to make the case for new investments in freight. 

We all know the facts. No matter which analysis you read, the 

conclusion is the same. Our infrastructure is falling apart, and the 

world’s strongest economy is forced to function with an infrastructure that barely cracks the world’s top 25. When channels are too 

shallow to receive large vessels, or railroads are located miles from 

ports or the aviation system’s technology improvements are stalled, 

unnecessary delays and congestions slow our commerce. Those inefficiencies, in turn, choke the economy and impose costs on businesses that, in turn, undermine our competitiveness and job creation efforts. 

There are solutions, plenty of good ideas, that, if implemented, 

give us a chance to turn this around and to keep pace with an expanding economy. What is missing is the political will in Washington to invest in such a system. Misplaced obsessions, in our 

view, with austerity crowd out investments in long-term infrastructure and transportation. And we know that those investments are 

urgently needed. And while the private sector always plays a large 

role in investing in freight transportation, the Government cannot 

abdicate its responsibility to provide public funding. 

19 

Here are some concrete steps. We agree that the Harbor Maintenance Fund needs to be reformed. We support bipartisan legislation to unlock the funds in the account, and to finally invest in our 

Nation’s ports and channels. We are a big endorser of that legislation and hope it gets completed by this committee. 

The surface transportation funding crisis needs to be solved. The 

Highway Trust Fund is broken, it is facing insolvency by 2015. For 

20 years it hasn’t seen its buying power go up, and it is now down 

33 percent. There is a straightforward way to do this. It requires 

the political leaders in Washington to tell the truth to the American people and to businesses. Unless we increase revenues flowing 

into this collapsing fund—yes, by raising the gas tax, I said it, I 

will say it five more times—our highways, bridges, and public transit systems will fail us and our economy will crater. 

In aviation, the FAA is in the midst of transitioning to a satellite-based air traffic control system that will increase efficiency, 

expand capacity, reduce congestion, and, yes, enhance safety. But 

Congress must appropriate the funds and stop subjecting the FAA 

to the fits and starts of funding that we have seen over many 

years, the most recent one being the sequester nightmare that is 

canceling thousands of flights, that is idling thousands of FAA 

workers and subjecting them to furloughs, and yes, is having a rippling effect in the air cargo industry. 

Finally, public-private partnerships and the role of innovative finance will continue to be debated. We understand the role of the 

private sector needs to be robust; we have always supported that. 

But I hear from the private investment world that without a robust 

role of the public sector there is no private capital out there to tap 

into. So, without the right reforms, without a long-term plan to 

fund these needs, the private capital that is out there, waiting to 

invest, will not come to the table as robustly as I think this committee would like to see. 

We are pleased to join my colleagues here on this panel for this 

first panel meeting; it is an honor to help you try to develop a policy on freight transportation. We look forward to playing our role 

in making the process a success and in bringing forward very 

strong and robust proposals. Thank you. 

Mr. DUNCAN. Well, thank you very much, Mr. Wytkind. Great 

testimony from all of the witnesses. I am going to yield my time 

first to my Members and start with Mr. Miller. 

Mr. MILLER. Thank you, Mr. Chairman. I really appreciate all of 

your testimony. 

Mr. Wytkind, you talked about the impact on FAA workers, and 

I absolutely agree. I am looking at Mr. Smith, and how your hub 

facility in Ontario is being impacted by that right now. And I am 

concerned—the DOT’s—considering national freight corridors. 

And I guess my first question is going to be to Mr. Leathers and 

Mr. Smith. And I have a concern because when you consider highways that are impacted, that possibly works in some regions because you might only have one major highway or two, but it doesn’t 

work in southern California. 

If you look from the Long Beach and L.A. Harbors, all the—it is 

like a corridor. It is not a system, it is an actual corridor that is 

impacted. If you look coming from the harbor, you might impact 

20 

the 5, 105, and then it expands dramatically past that to the 91, 

the 60, the 10, the 210 that have huge impacts on Ontario Airport. 

And, Mr. Leathers, you see that with your drivers right now in the 

same way. 

And my concern—and I am going to introduce legislation I know 

the chairman will agree with me on—that we need to look at 

freight corridors because if you look at just a highway system of 

27,000 center line miles, and you don’t take into consideration the 

corridor that is really being impacted, I think we are going to make 

a huge mistake. And if the DOT were to account for only one pathway for goods movement on a national freight network, and failed 

to adequately address the complex highway system we have in 

southern California, I think it is going to have a major impact on 

our supply chain. 

Mr. Smith, do you have any comments on that? 

Mr. SMITH. Well, I concur with what you said. I mean, you have 

to look at these things, particularly in major metropolitan areas, as 

a holistic region, as opposed to just an individual project. And that 

has been one of the issues in the past, when you would have a particular project here without regard to the consequences in the entire system. So, all I can do is to concur wholeheartedly with what 

you said. 

Mr. MILLER. Yes, I have got a hub on the rail system in Colton, 

but I have also got—it is like a warehouse hub for the region. And 

Mr. Leathers, can you address how it would impact your drivers? 

And Mr. Wytkind, the same way. You know what your drivers are 

facing from the harbor going out. You see all the problems we are 

facing with intermodal systems, especially on our highway systems, 

trying to get to these warehouse hubs. How would that impact you, 

if we weren’t considering a corridor, rather than just a highway 

system? 

Mr. LEATHERS. Well, I would concur with the general statement 

that there will be points of greater bottlenecks or points of greater 

tension in the network. And so, as we talk about investing in the 

highway system, obviously we have an eye towards all of the tonmiles that we traveling with our trucks. Clearly, however, there 

are smaller, more—or not smaller, but there are more congestion 

points of pain in some of these corridors, as you mentioned, that 

I think we would have to have an eye towards, and we would have 

to make certain that we had the sufficient funding where the pain 

was at its greatest extent. 

And so, for our drivers, clearly there are areas, and I mentioned 

intermodal-connected final-mile issues, where we might find ourself 

more congested than not, that we would certainly expect and hope 

that we could put attention where the pain is, and you have indicated such in your comments. 

Mr. MILLER. Mr. Wytkind, do you have a comment on that? 

Mr. WYTKIND. Yes, thank you. Mr. Miller, look, I view this as a 

simple proposition. We have a freight network that is complicated. 

There are some metropolitan areas, like yours, that are incredibly 

congested. 

My concern is that if we just have a policy discussion that, say, 

dedicates new policy initiatives to push for sort of an intermodal 

21 

freight strategy, if we don’t get new resources directed at those 

projects—— 

Mr. MILLER. That is what we are talking about. 

Mr. WYTKIND [continuing]. Then we are just going to get into a 

policy exercise—my problem is that no one has yet put a proposal 

on the table that is actually going to expand the pie, as opposed 

to divvying up the pie differently, which, as we know, is collapsing. 

Mr. MILLER. We are talking about—DOT is talking about focusing dollars—— 

Mr. WYTKIND. Right. 

Mr. MILLER [continuing]. On these—which is similar to what you 

are saying. But my concern is we don’t focus in on corridors and, 

appropriately, we are going to have a problem. 

And I know—Mr. Wytkind and Mr. Leathers, I got involved in 

a situation that made some of you happy, some of you unhappy. 

Some people think because of the issue that rose at the Port of Los 

Angeles, where Antonio Villaraigosa, mayor of L.A., who is a friend 

of mine, wanted to make it where you can only have employee drivers use the facility, rather than independent owner-operators. And 

for some reason, Mr. Wytkind, many of your friends think I am 

anti-union, but every member of my family is a union except me. 

I just think everybody should be treated equally. 

And the problem I had on that decision made by, say, Los Angeles, was we eliminated 90 percent of the truckers that were hauling 

goods from that port to other groups out there. And, Mr. Leathers, 

can you—would you like to comment on that? 

Mr. LEATHERS. Our primary—— 

Mr. MILLER. I know I make some people mad in this, but I have 

got two guys here that this country needs. I have got union operators and nonunion operators. And one thinks I am their enemy, 

which I am not, but I am looking at how do you protect 90 percent 

of the people who use that port. 

Mr. LEATHERS. Well, I mean, obviously, we think that, as it relates to the port and some of the rules that were coming out relative to clean air in the ports, we are fully in support of that. And 

I think our industry has proven our ability and our willingness to 

invest in equipment that would have and can continue to support 

those initiatives. I think that is separate from the labor implications and changing people’s labor classification in an effort to clean 

air, because I don’t believe those two are linked. 

Mr. MILLER. I don’t, either. And I think we all—everybody at this 

group, we need to work as a group here on transportation. Mr. 

Wytkind, yes. 

Mr. WYTKIND. I would just add that, first of all, I would love to 

offer the opportunity for Mr. Leathers’ employees to be members of 

a union. 

[Laughter.] 

Mr. WYTKIND. So maybe you can bridge those issues for us. 

Mr. MILLER. But many people want to own their own truck and 

be—— 

Mr. WYTKIND. Right. I don’t want to get into a long debate about 

it, either. But the issue involving that particular area, there are a 

lot of working condition issues that involve those drivers. There is 

a lot of misuse of how we classify a lot of workers in our economy. 

22 

It is not unique to the trucking industry, it has been all over the 

place. 

Mr. MILLER. My comment was—— 

Mr. WYTKIND. So my point is it is a longer discussion, but—— 

Mr. MILLER. I am—— 

Mr. WYTKIND [continuing]. There is a lot of problems that these 

drivers have experienced over their careers. 

Mr. MILLER. I am not anti-one against another, I am saying we 

need to work as a—— 

Mr. WYTKIND. Understood. 

Mr. MILLER [continuing]. Unity in this country to move goods 

and services, and that is our focus. Thank you. I yield back. 

Mr. DUNCAN. All right. Thank you very much. Mr. Nadler. 

Mr. NADLER. Thank you, Mr. Chairman. As I said in the opening 

statement, freight projects face significant barriers in securing 

funding under Federal-aid Highway Programs, and the State-based 

system is poorly suited to fund large, critical freight transportation 

projects, because the benefits extend far beyond the borders of a 

single State, while the cost may be focused in a single area. 

Moreover, given the significant backlog of maintenance and reconstruction needs facing States, freight investments, particularly 

large, multijurisdictional projects, are not likely to fare well in a 

flat-funded, State-based formula system. 

So, my question is, is there a need for a strong, Federal role in 

advancing intermodal freight projects? And do you agree that the 

Federal Government is better suited for setting a strategic freight 

vision for the Nation, and, in some circumstances, partnering to 

fund intermodal freight transportation projects? Mr. Smith, Mr. 

Moorman? 

Mr. MOORMAN. Well, we do believe, in the railroad industry, that 

there is a role—— 

Mr. NADLER. Talk into the mic, please. Yes. 

Mr. MOORMAN. We do believe, in the railroad industry, that there 

is such a role. And you have mentioned the Corridors of Regional 

and National Significance program before. Our company worked 

with the Federal Government and the State governments on such 

a program, the Heartland Corridor, which will greatly reduce transit times out of the Port of Hampton Roads into the center of the 

country. 

And I think that what needs to be done is to have these corridors 

identified, and they are—the corridors are all out there, clearly, to 

be worked on, and then to have a process in which there is public 

investment and private investment—and we have made significant 

private investment—to further those corridors. Because, as you 

say, they cross State lines, but they are important to the Nation. 

We have other examples of that. Certainly in terms of project regional significance, I will go back to the CREATE project, which is 

absolutely important to the transportation of goods in this country, 

but really only is Chicago-centric. It just so happens a third of all 

rail freight passes through the city of Chicago. Our Crescent Corridor, which I mentioned, is another great example where there 

was, in addition to an enormous amount of Norfolk Southern 

money, TIGER grant money, and which helped, amongst other 

things, fund a terminal Memphis. 

23 

So, we very firmly believe that, as the public—as the private sector thinks about freight flows, which we think about on more than 

a State-by-State basis, we need to partner with the public interest 

to make sure that we are investing appropriately for the future. 

Mr. NADLER. I will come back to that in a moment. But let me 

just ask now. How do we ensure that we have a well-articulated 

national vision for freight policy, and a program of projects underway to support and work toward a national vision? 

Mr. SMITH. Well, I think it can only come from one place. It has 

got to come from the Secretary of Transportation. I mean that is 

the reason we have a Secretary of Transportation. 

Mr. NADLER. Or Congress? 

Mr. SMITH. Well, of course, Congress is the boss of the Secretary 

of Transportation, per se, along with the administration. So Congress can certainly provide an enormous amount of leadership. I 

mention in my remarks what I witnessed up here over a period of 

time when the Congress took the leadership in terms of deregulating the transportation sector, and it was hugely important. Absent that, there would not be a large amount of the economic activity that we have in the United States. 

But when you start talking about the specifics of how to deal 

with the Southern California Corridor, or how do you deal with the 

area in the Metropolitan New York/New Jersey area, it requires a 

lot of staff expertise, a lot of particular knowledge that is resident 

in the Department of Transportation. 

So, the Secretary of Transportation, with the Congress, it seems 

to me, has to develop the national policy. 

Mr. NADLER. Thank you. Before my time runs out, let me ask 

Mr. Moorman a question. Following up what we were talking about 

a moment ago, freight railroads this year are planning to invest 

$24.5 billion in the rail networks throughout the country. 

Those investments are commendable, but the Federal Government also plays a role in funding some critical freight rail projects, 

primarily through Projects of National and Regional Significance 

grant programs, and the TIGER grant program. These projects include CREATE, which we have mentioned, Alameda Corridor-East, 

the National Gateway Corridor, Heartland, and the Crescent Corridor. Several of these, as you well know—of these critical investments involve Norfolk Southern. 

Some Members of Congress believe Federal funding should not 

be provided for such projects. Not an appropriate Federal role. My 

question is, what role has the Federal investment played in moving 

these projects forward, and what are the benefits of these projects 

that would be realized from the Federal investments, and what 

would happen to these projects if we weren’t doing them? If—not 

if we weren’t doing them. If the Federal Government weren’t involved in them. 

Mr. MOORMAN. Well, I think it is important, first of all, to say, 

as I said before, that in all of these projects, certainly those that 

our company has participated in, we understand that, as we receive 

benefit from these projects, it is incumbent upon us to make the 

investment appropriately, and that is what we do. We invest significant amounts of money, recognizing that that is appropriate 

when we are going to receive benefit. 

24 

But I think the more important thing, from the public’s standpoint, to recognize is there are huge public benefits, as well. The 

Crescent Corridor, which I mentioned, is a poster child for a Project 

of National and Regional Significance, in that it will take a lot of 

truck traffic, over a million trucks a year, eventually, off some very 

overburdened interstates between the South and Northeast, Interstate 81 and the like. 

So, I think as we move together in partnership, if we have a 

process, which we have had with some of the programs you mention, in which it is appropriate that there is a partnership in which 

the public invest, public investment is made with clearly defined 

and articulated public benefits, as well as private investment with 

those benefits to the private sector defined, and investments made 

proportionately, that is good transportation policy, in our view. 

Mr. NADLER. Thank you. My time has expired. 

Mr. DUNCAN. Thank you very much. Mr. Crawford? 

Mr. CRAWFORD. Thank you, Mr. Chairman. Mr. Smith, again, 

congratulations on 40 years. In your testimony, you mention how 

critical air traffic control systems are, the safety and efficiency of 

your operation. How has the recent decision by the FAA to furlough 

air traffic controllers impacted FedEx? 

Mr. SMITH. Well, the decision that was made to furlough the air 

traffic controllers has had a well-documented deleterious effect on 

air transportation in general, more the passenger carriers than us. 

But even so, it is adversely affecting our operations. 

And, as I think probably most of the people on this panel know, 

the Airlines for America, which is the industry trade association 

which represents all of the passenger carriers as well as FedEx and 

UPS, the two largest cargo carriers, has filed suit to make the Department of Transportation and the FAA allocate its resources differently than has been the case or the position taken by the Department of Transportation. 

And so, we will see what happens on that, but obviously, it is an 

enormous impediment to commerce to have these delays. Very significant. 

Mr. CRAWFORD. Let me shift gears on you. Memphis has embraced their airport, and they have adopted the label of America’s 

Aerotropolis. Can you provide some more details on how placing 

this emphasis on their infrastructure has affected the city? And 

could you see possibly the aerotropolis model being an effective 

plan for other cities to adopt? 

Mr. SMITH. Well, the aerotropolis model was developed by a very 

well-known academician, Professor John Kasarda from the University of North Carolina in Chapel Hill. And Professor Kasarda studied the effects of aviation hubs on economies. And I think, in reality, it is a back-to-the-future observation. I mean Liverpool was 

the aerotropolis of its days in an era of sailing ships. 

So, if you go to Memphis, there are thousands and thousands of 

employees that are employed by companies that are there to avail 

themselves of the FedEx Express hub, of the Norfolk Southern 

intermodal hub, the intersection of all of the interstate highways 

that connect there in Memphis. And so it is an initiative to try to 

look—not dissimilar to the southern California issue—at the region 

holistically. What are the infrastructure projects that need to be 

25 

done? What areas need to be revamped and reclaimed that might 

have gone to seed to promote the location of these businesses and 

jobs next to our distribution centers? And, specifically, our airport. 

The Memphis Airport provides about 25 to 30 percent of all the 

jobs in the Memphis area. If you look in Atlanta with Delta’s hub 

there, it is a huge economic engine. United in Chicago and Newark. 

So that is what it is all about. 

Mr. CRAWFORD. Sir, thank you. Mr. Leathers, your testimony you 

raise some concerns over tolling existing interstate highway capacity. Could you talk about what some of the negative effects might 

be on your industry, and what companies like yours do to handle 

tolling? 

Mr. LEATHERS. Sure. I mean I guess it starts with this. I mean 

you are here today, and I am here today, essentially in approval 

of raising our fuel tax and saying we believe that is the most efficient, most effective way to raise funds for the highway system. 

Simply stated, when you use the existing fuel tax network, the 

infrastructure that already exists, the mechanics of collecting the 

money that already exists, about 1 cent on every dollar goes to the 

administration of that program. If we were to convert that, by contrast, to tolling efforts or vehicle mile traveled technologies, it is 

our estimation—and most studies have concurred—that it is somewhere in the neighborhood of $.23, all the way up to $.50 on the 

dollar goes to the administration of those efforts. 

So, simply stated, as a businessperson trying to operate and invest in our own infrastructure in this country, I would like to invest in the way that is most efficient. So we are here before you 

saying that we are open to increased fuel taxes, which means that 

we are open to paying an increased tax rate, as long as those dollars, then, are turned around and invested into the very highway 

system that they are being raised for. 

The collaboration across our different modes is, I think, much 

more significant than people realize already. So when we talk 

about congested corridors, or we talk about geographic-specific 

issues, I can assure you that our collective business teams work 

constantly to find modal conversion opportunities to, surprisingly, 

take trucks off the road, even though I am in the trucking business. Because the fact of the matter is there is going to be 65 percent freight growth over the next 10 years. And the only way the 

existing infrastructure will support it is if we work together. And 

if you look at our business, the three fastest growing portions of 

our business in our case at Werner Enterprises are our cross-border business, our port business, and our intermodal business. 

And so, we are on board with it, we just would like to not see 

tolls as the mechanism to raise the money to invest back in the infrastructure because, frankly, folks, one thing to keep in mind is 

trucks have wheels, and that means they drive alternate routes. 

They will take alternate roads. And I don’t want to see that. I don’t 

think that is what is best for this country, I don’t think it is what 

is best for safety. And I don’t think it is what is best for the American truck driver. And we have to keep that in mind for all times. 

Mr. CRAWFORD. Thank you. Yield back. 

Mr. DUNCAN. Thank you very much. Ms. Brown. 

26 

Ms. BROWN. Thank you, Mr. Duncan. And before I begin, I hope 

that you give me my 2 minutes back. I want to reclaim them for 

my opening statement and my questions. So I need a total of 7 

minutes, I think. 

Mr. DUNCAN. You go right ahead. 

Ms. BROWN. Thank you, sir. 

[Laughter.] 

Ms. BROWN. And let me just say I want to thank Chairmen Shuster and Rahall for putting together this task force, and I want to 

thank you for your leadership, Mr. Nadler. Because I think, really—and I guess I am biased, since I am the ranking member on 

rail—is that rail is the engine that put America to work. And I 

want to thank all of you all for the work that you do. 

I have a lot of quick questions, and I guess I will start with Mr. 

Newsome. We have not passed a WRDA bill in 7 years. That is a 

major problem throughout. And, you know, the port, and we are 

getting ready for the Panamax ships, and it is a major problem. 

Look, it is not just the earmark part of it. The fact that we haven’t 

passed a bill, we can’t get the Army Corps to do what we need to 

do in just small technical things. 

What is it, do you think, we need to do to move a WRDA bill? 

And keeping in mind when we set up that agency it was a memo 

directive. We tell them what projects, and we can call in the different committees and tell them what we want to see happen. Can 

you give me some insight as to the—what we can do, as a Member 

of Congress, to get out the way and move us forward? 

Mr. NEWSOME. That is a good question, Congresswoman Brown. 

I mean we—the first 8,000 TEU container ship was built in 1999. 

And we sit here in 2013 looking at feasibility studies taking over 

15 years for deepening projects. And I think to do this effectively, 

we need a strategy and a network thinking for our port system, in 

terms of deepening. 

We have traditionally looked at harbors as individual projects 

without relationship to each other, and that is really a flawed way 

of viewing things. And perhaps the best example of that is the east 

coast of the United States. There is no port on the east coast of the 

United States that cannot succeed without the raising of the Bayonne Bridge in New Jersey, because 40 percent—40 million people 

live in New Jersey, and the east coast service has to go to New Jersey or New York to be successful. 

So, we have got to really develop a strategic plan for our port 

system, network thinking. Put a capital budget aside, identify the 

size of the problem, and then really rack and stack with some 

prioritization harbor projects. We will not deepen all the harbors 

in this country today at Federal Government expense. And I think 

that is the important component in what would be different in a 

water resources development act this time, as opposed to one in the 

past. 

Ms. BROWN. Just about the trust fund that is just sitting there. 

Can you talk about that? 

Mr. NEWSOME. Well, I don’t know if it is sitting there or not. I 

mean it is—— 

Ms. BROWN. Well, we use it at, like, the deficit—— 

Mr. NEWSOME. Well, it is—— 

27 

Ms. BROWN [continuing]. So we are not using it where it needs 

to be. 

Mr. NEWSOME. Yes, ma’am. So I think we have to make some 

definition of terminology here. There is harbor maintenance, which 

is funded by the Harbor Maintenance Trust Fund, and there is a 

plan behind that. The unfortunate part of that story is that only 

half the Harbor Maintenance Trust Fund collections are spent on 

harbor maintenance. The rest of the fund vaporizes into other uses. 

On the other hand, we have the need to deepen harbors, certain 

harbors. Not all harbors, but some harbors need to be deepened. 

There is infrastructure in other harbors: Gerald Desmond Bridge 

in California, the Bayonne Bridge, needs to be addressed. So they 

have to be addressed differently. 

I think the operating maintenance of harbors has done pretty 

well. There is a plan behind it, more money needs to be spent on 

it, because there is a deficit everywhere. 

On the deepening side, there is really no strategic plan, there is 

no allocation of a capital budget, what I would call a capital budget, in the private sector. Maybe that is $10 billion, $20 billion, 

whatever. So this is the amount of money, these are the meritorious projects. We are going to rank them, in terms of cost and 

benefit, and in terms of providing the requisite capability. There is 

no sense to deepening a harbor that is not going to be able to handle an 8,000 TEU container ship. It doesn’t make sense. 

Ms. BROWN. That is right, absolutely. 

Mr. Moorman, let me ask you a question. The RIF loan program. 

We have been—Mr. Shuster and I and many of the Members would 

like to not fix it, but make it more useable. You know how long it 

takes to apply for it. And how do you think improving that program would help the infrastructure and the localities working together to improve the infrastructure? Because we do need additional revenue coming into the system. 

Mr. MOORMAN. The RIF loan program, as you say, has not been 

used extensively for any number of reasons. I would say that from 

the perspective of the Class I railroads, we always have availability 

of funding, and we are able to borrow, we all are very solid credit 

metrics. So it is less of an issue to us. 

And, of course, as you know, we have been spending an enormous amount of money on infrastructure enhancement and infrastructure maintenance. And one thing I would tell the panel is that 

you hear a lot about America’s crumbling transportation infrastructure sometimes, and a lot of it is hyperbole. I will tell you that the 

rail freight network, physically, is in the best condition it has been 

in—certainly in the last 50 years. And that is because of the money 

we have spent. 

I think that in terms of the RIF program and its usability, there 

are clearly cases where, if those funds are available, there will be 

railroads that will want to use them. Probably not so much the big 

Class I’s, but then the smaller railroads. If there is a way to make 

it more usable, it might even ultimately be attracted to us. But, as 

you say, it is going to have to be changed in some ways to make 

it more user-friendly before we would have any interest at all. 

Ms. BROWN. I guess my last question, this committee used to be 

one of the most bipartisan committees in the House of RepresentaVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
28 

tives the entire time I have been here. We have a major shortfall 

with revenue. And what would you all, each one of you, do to recommend what we can do to get the—you said it is not a major 

issue, but the Association of Engineers give the United States a Dminus as far as bridges and infrastructure and the things that we 

need to do and the investments we need to make to put America 

back to being number one, as far as, you know, our competitors and 

moving forward. And I start with Mr. Smith. 

Mr. SMITH. Well, the most important thing is, as Mr. Leathers 

said, is to increase the fuel tax back up to an appropriate level. It 

has been allowed to—— 

Ms. BROWN. Is that a tax you are talking about, or just revenue 

enhancement? What would you call it? 

Mr. SMITH. Tax. 

[Laughter.] 

Ms. BROWN. See, my colleagues, they are—you know, they can’t 

stand that word, tax. 

Mr. SMITH. Well, I—the—as I mentioned in my remarks, the 

combination of the leadership of the Congress in deregulating 

transportation and the funding mechanism that was put in place 

to build our transportation infrastructure was very important to 

the economic prosperity of this country. 

Beginning in the middle part of the 1990s, the primary funding 

mechanism for the highway system has been allowed to atrophy. 

And it is particularly unfortunate, because we have had enormous 

improvements in efficiency, in terms of both miles per gallon of 

both private automobiles and the equipment that we all operate. 

So, the net effect on the traveling public, or the shipping public, is 

not unmanageable. 

So that is the easiest, quickest, most effective way to solve the 

problem, is to put in a fuel tax to fund improvements. And then, 

on the aviation side of the house, there are already mechanisms 

there to do the same thing. But you can’t wish these things will 

happen; they have got to have the money to fund them. 

Ms. BROWN. Thank you. Mr.—— 

Mr. MOORMAN. I agree with everything that has been said by the 

panel, in terms of you are going to have to have more revenue. This 

is no longer a question of when people can just say, well, the Government is somehow inefficient in maintaining the highway system. We are at the point where we are approaching a crisis. The 

Interstate Highway System was designed with a 50-year life, and 

it was built about 50 years ago. 

So, unless something is done to bring in more revenue, we are 

going to continue to go downhill. And I think the panel is quite 

right in saying the most effective and efficient and quickest way to 

do that is through the current mechanism, which is user fees in the 

form of gasoline and fuel tax. 

Mr. LEATHERS. We think fuel taxes are the quickest, most readily 

available way to raise revenues and provide revenues. And the only 

caveat would be with the specific and intended use for the infrastructure of the United States; for the highway system and the 

freight system of the United States. Not for alternative uses, not 

for diversions to other projects, but for the intended use. We, as an 

industry, are willing and able to subject ourself to a higher tax 

29 

with that private-public partnership and agreement that that is 

where the money goes. 

Ms. BROWN. OK. 

Mr. NEWSOME. I may have covered a—I mean we have to recognize that maintenance and deepening are different, and we have to 

look at them accordingly. And I think we have to see that the Army 

Corps of Engineers has made a lot of progress recently in terms of 

shortening the timeframe to do projects, and going down the road 

to making some or identifying some priorities. And we have to be 

comfortable with that. I think they are very effective in doing so, 

and we have to move the projects faster. 

Mr. WYTKIND. Thank you, Ms. Brown. I agree with what has 

been said. The Harbor Maintenance Tax funds have to be reformed 

with a bipartisan bill. I agree with Mr. Newsome, that we need to 

get the deepening of our channels funds into the system, and get 

the process streamlined so it doesn’t take half-a-generation to get 

it done. 

We think the fuel tax needs to be raised. We have had that position for many years. It is the purest form of a user-fee-based system. If you use the system, you pay a fair share, and it is the way 

to do it. 

And I think we can’t lose sight of the fact that our aviation system continues to operate under fits and starts of funding. And 

those trust funds are in trouble, too. And we subject the agency to 

these Washington-like fights that you only see in Washington that 

makes them start, stop, start, and stop. And then things that Mr. 

Smith and others care about, and flying airplanes in the sky, they 

don’t get done. And when they do, they get done too slowly. 

Ms. BROWN. Thank you, Mr. Duncan. Thank you. 

Mr. DUNCAN. Well, thank you, Ms. Brown. I let your part go 111⁄2

minutes. 

[Laughter.] 

Mr. DUNCAN. Corrine and I are long-time friends. I have seen her 

get mad in here before, but she has never gotten mad at me, I don’t 

think. I hope to keep it that way. 

[Laughter.] 

Mr. DUNCAN. Mr. Hanna? 

Mr. HANNA. Thank you, Chairman. Thank you all for being here. 

The elephant in the room that people just spoke about is how do 

we pay for all this? I come from New York, one of the highest gastax States in the country. We pay sales tax on every gallon. And 

it is a real issue, with all the economic issues that New York has, 

otherwise, and, of course, the country at large. But yet the ATA, 

I think to their credit, has been consistent in their desire to have 

their own taxes raised. 

However, Mr. Moorman from the railroad side may say that they don’t want their taxes raised enough. I believe you are about $.15, 

Mr. Leathers, is that correct? That is roughly what you would like 

to see the diesel tax raised? 

Mr. LEATHERS. Yes, roughly. 

Mr. HANNA. Roughly $.15? 

Mr. LEATHERS. Indexed to something. 

Mr. HANNA. So, we all want our taxes raised. Mr. Wytkind is 

comfortable having taxes raised on your very, very large member, 

30 

taxes which will affect each and every one of those members, and 

I understand that. 

Mr. Smith is comfortable having taxes raised on every gallon of 

gasoline that he buys. And I mean we have unanimity there. 

Yet in Congress, we seem to have a real problem even breaching 

the subject. We have an efficient system that has worked in the 

past that—and to be honest, we have had a Democratic administration where all three branches were held by a Democratic side, and 

yet we were unable to raise taxes. And, of course, you know the dynamics now in Congress are so much different it is even—it seems 

more difficult now than ever to do that. 

So, do you think a—vehicle mileage use traveled is a particularly 

onerous thing. We don’t have a way—a mechanism to do it right 

now. So in the short run—and I will get to a question—is there a 

way for—that any of you think about that could allow us to include 

CPI and CAFE standards, in terms of raising the gas tax, if that 

is where we wind up? And apparently we have unanimity on that. 

And for Mr. Moorman, specifically, to level what you would call 

the playing field, how much would you like Mr. Leathers’ taxes 

raised? 

[Laughter.] 

Mr. MOORMAN. I love Mr. Leathers, but substantially. 

[Laughter.] 

Mr. MOORMAN. Let me address that point specifically, though. As 

I think most of you on the panel know, there have been any number of studies in the past that show that in terms of the amount 

of wear and tear that large trucks cause to our highways, they 

pay—while they certainly pay fuel taxes, the amount they pay is 

disproportionately low, compared to the damage they do to their 

highways. And we certainly strongly advocate that there should be 

a level playing field. 

And so, in that regard, the committee—the T&I Committee has 

now commissioned another study to look at the impact of not only 

current truck size and weights, but the proposals that have been 

made for even more significant truck size and weights. That report 

is due out, I believe, next year. And if it shows what, as I say, most 

studies have shown before, it would indicate that diesel highway 

fuel taxes should certainly be higher. And in the case of heavier 

trucks, substantially higher. We will see where that study goes. 

And I am not coming in here to advocate that you should raise 

Mr. Leathers’ taxes today. We work in partnership, as he has said, 

with a lot of trucking companies, and—because rail and highway 

together make a better solution in many situations. But in the future, all we advocate is a level playing field. 

Mr. HANNA. So it is safe to say we have unanimity on raising 

taxes for gas, largely because it is a system we have, it costs 1 percent to raise, and everyone here understands—and, Mr. Newsome, 

you mentioned you would like to have a tax raised user fee on harbor fees, and I understand that. So I just wanted to get everybody—have everybody a chance—get a chance to say that. 

Mr. Leathers, maybe you would like to respond, though. Because I have heard $.95, Mr. Moorman. 

Mr. MOORMAN. It is probably a little low, but go ahead. 

[Laughter.] 

31 

Mr. LEATHERS. A couple of things. I think the issue of indexing 

is going to be important, and something we will have to study to 

come up with the right index over time. What we don’t want to do 

is have an index as it relates to fuel tax that is volatile, which 

causes volatility, ultimately, in the economy. Because as we fuel 

our trucks and have those costs, if that index is moving violently, 

it has downstream unintended consequences. But we do think it 

should be indexed. 

So, whether that is a CPI Index or, as you mentioned, a CAFE 

Index—the CAFE one concerns us a little, just in terms of the fact 

that there are jump moments in that index that would then translate to sudden and abrupt changes in the tax. 

As for whether we do or don’t pay our fair share, I think that 

will be much to be debated. In the meantime, what I do know is 

that over 70 percent of everything delivered to every American in 

this country is delivered by truck. So whatever wear and tear we 

may cause is probably wear and tear that people are proud to have 

us do so they can have the goods and services they enjoy every day. 

So we will continue to work with the rail, and we will continue 

to work within our modal solutions on longer length of hauls. But 

at the end of the day, unless we are going to put rail tracks behind 

our homes and businesses or dig canals for barges, I suggest that 

we continue to focus at the task at hand, which is how do we invest 

in the American infrastructure so we can deliver the goods and 

services to its people. 

Mr. HANNA. Thank you. I yield back. 

Mr. DUNCAN. You wanted to add something, Mr. Newsome? 

Mr. NEWSOME. I was just going to say the port situation maybe 

is a bit different. On the one hand we have got a significant bucket 

of money, all of which is not spent on maintenance of harbors. On 

the other hand, we have got this need to deepen harbors, and there 

is no predictable way to determine how that is going to be funded. 

So we have got, really, two different issues, and they are separate 

and distinct. 

I think the good news is that ports are now visible. The Obama 

administration has moved that forward with the ‘‘We Can’t Wait’’ 

initiative. But now we have got to find out how to authorize deepening, and how and what money is going to be appropriated for it. 

Mr. WYTKIND. Mr. Duncan, if I could add one point? 

Mr. DUNCAN. Yes, sir. 

Mr. WYTKIND. I think, Mr. Hanna, you make a lot of very important points. But one of the things that is lost is at the State level, 

in the absence of Federal leadership, these initiatives to raise 

transportation revenues are passing. The vast majority are passing. 

The voters are voting for them, which is the purest form of democracy. You put a proposal on the table, you put it on a ballot, and 

you vote for it. 

And so I think the voters are actually further along than I think 

a lot of Members of Congress realize. It is just not translating into 

action in Washington, and I think that is one of the big problems 

we have. 

Mr. DUNCAN. All right. Thank you very much. Mr. Lipinski. 

32 

Mr. LIPINSKI. Thank you, Mr. Chairman. Mr. Wytkind, if—I 

think there is a lot of things we can look at and say that it is not 

translating to action in Washington that we should be doing. 

I want to apologizing having to jump in and out of this hearing— 

I am the ranking member on a subcommittee that was having a 

hearing—because I want to emphasize that I think that this is a 

very important panel, it is a very smart thing that has been done 

to—the chairman and ranking member did to put together this 

panel, because we really need to examine freight across all modes, 

since we all know that freight is multimodal. And having Chairman Duncan to lead us, and Ranking Member Nadler also, is—I 

think we are going to have a very successful panel here. And I 

thank all of our witnesses for your input today. 

I am glad that Mr. Smith and Mr. Wytkind mentioned NextGen. 

I think that is critically important. And hopefully we won’t lose 

that in—on this panel here, to mention NextGen and how we can 

more efficiently get NextGen moving along, because it has been fits 

and starts with NextGen. 

Also, something else I want to mention is our inland waterways. 

I want to make sure that those are not forgotten and lost on this 

panel. 

I want to ask Mr. Moorman a couple of questions. I would—I was 

trying to figure out some way that we can work our love of cycling 

into this, but I don’t think we move much freight on bikes here in 

this country, fortunately. 

But I want to look at talking again about CREATE. I mentioned 

how important it is to northeast Illinois and to the entire country. 

I enjoyed working with you over the years to advance the program, 

where there is about $1.3 billion in Federal, State, local, and private dollars that have been invested so far into projects in CREATE. As you know, we still have a long way to go to see the program through to its completion. 

I would like to ask Mr. Moorman if you could describe what 

northeast Illinois means for Norfolk Southern, specifically, and why 

you believe CREATE is important, from a national perspective? 

Mr. MOORMAN. Thank you, Congressman. And I will say that we 

don’t haul a lot by cycle, either, but we still enjoy it. 

As I mentioned earlier, approximately a third of all rail freight 

that moves in this Nation moves through Chicago. And that is because, historically, the infrastructure was routed that way. So it is 

absolutely critically important. It is the single most important 

point in the North American rail network. And I can tell you that 

when things don’t go well in Chicago—an example being the blizzard that we experienced up there, all of the freight rail networks 

start to slow down. It is just that simple. 

If you look at our operations into Chicago, it is our single most 

important link. We run about 100 freight trains a day in and out 

of Chicago. And once you get into Chicago, because it is infrastructure that was built over a long period of time accretively, the 

routes are not particularly efficient. And there is a lot of work that 

needs to be done. 

Now, at the same time, that inefficiency of moving traffic 

through Chicago results in significant delays to the community because of grade crossing congestion. And it presents serious probVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
33 

lems for Metro. So it is, of all of the things that—and all the locations that matter not only to Norfolk Southern, but to the North 

American rail network, Chicago is always number one. And that is 

the significance of CREATE. 

And you mentioned that you were talking to this subcommittee 

about going to look at Chicago. It is something I would encourage 

at some point, just to get an idea of the scale and the scope, and 

how complex the rail network is there. 

Mr. LIPINSKI. Thank you. It is something that I think people 

need to see in order to understand, the issues there. I mean we are 

looking at at least $1.9 billion, maybe more, to complete CREATE 

right now. I think that it is not just CREATE, there are a lot of 

choke points in Chicago no matter what mode that we are talking 

about. We talk about choking in Chicago, it’s not just the Cubs. 

[Laughter.] 

Mr. LIPINSKI. It is rail—I am a Cubs fan, I can say that, even 

though I am a Southsider—rail, freight, the roads, road network, 

we talk about aviation. So that is very important. And I think the 

project, as—Mr. Nadler has been a champion of this—I think the 

Projects of National and Regional Significance, having that funding 

mechanism available is critical for these problems across the country, so that we can look comprehensively and act comprehensively 

on some of these choke points that occur across the country. 

But my time is up. There is a lot more I could go into here, but 

I am going to yield back. 

Mr. DUNCAN. Thank you very much. Mr. Webster. 

Mr. WEBSTER. Thank you, Mr. Chairman. Thanks for doing this 

panel. And it is a very important thing to our economy and to our 

growth of this economy, is infrastructure. And we certainly appreciate all of you coming today. 

I had a question about something that—it is not to Mr. Leathers, 

but he said that—which I think he said correctly—that the trucking industry doesn’t have the ability to determine their right of 

ways or access. They basically are determined by the building of 

roads, and then they run on those roads. But I heard you mention 

a couple of times, Mr. Moorman, about the—I think it is the Crescent Corridor. Could you tell me—because I am not familiar with 

how this takes place—how did you determine the—how was that 

determined, as far as developing that corridor? Is it a partnership 

with Government, or can you do it on your own? 

Mr. MOORMAN. Thank you, Mr. Webster. I noticed, by the way. 

Are you a Georgia Tech graduate? 

Mr. WEBSTER. I am. I am an engineer. 

Mr. MOORMAN. Good. I love the Yellow Jackets, how about you? 

So the Crescent Corridor was identified primarily as we started 

to look across our network and started to see on the highway system an enormous amount of freight flow traffic, 5 to 6 million 

trucks a year, which essentially move from the South and the 

Southwest, up into New York, New Jersey, New England. And it 

was the largest such freight corridor which has never really had effective rail intermodal service. But it matches up very well to our 

routes. 

So, we started to develop a plan to start to add terminals, such 

as the one at Memphis, one at Birmingham, several in PennsylVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00041 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
34 

vania, to add infrastructure, in terms of capacity, and to enable us 

to run higher speeds, to be able to provide service to folks like Mr. 

Leathers and his customers that would be competitive with the 

truck and offer a better economic solution. 

Our—it took us a lot of planning. And where the Federal dollars 

made a lot of difference for us—although most of the investment 

is ours—is it allowed us to accelerate a lot of projects that we 

might have done over a 10- or 12-year period, but instead we could 

do them in 3 or 4 and realize those public benefits, as well as the 

private benefits, much faster. The Crescent Corridor has about $2 

billion in public benefit built in, which has been very carefully analyzed by outside agencies. 

So it was the culmination of a big project on our part. But as we 

approached both Federal officials and State officials and told them 

what we were doing, and told them the impact it would have on 

highways like Interstate 81, it was enthusiastically embraced by a 

lot of people. 

Mr. WEBSTER. Well, I guess, then, was there a necessity to acquire new right-of-way? 

Mr. MOORMAN. Only in very limited instances where we might 

have to expand from one track to two. It was essentially our existing infrastructure, but a lot of money spent to enhance it. 

Mr. WEBSTER. Do you—is there condemnation rights that are 

vested in someone, maybe even the Government? Or how does that 

work? 

Mr. MOORMAN. The railroads do have—historically, have always 

had condemnation rights for rights of way. But it is something we 

employ very, very rarely. And to my knowledge, did not ever employ in this corridor. 

Mr. WEBSTER. So this basically followed an existing corridor, except it was just expansion or rail improvements, or—— 

Mr. MOORMAN. Exactly, exactly. And the good thing, from the 

Norfolk Southern standpoint, is our route structure really matched 

the freight flows. 

Mr. WEBSTER. Great. Mr. Chairman, I would like to at least 

make one comment about Florida. We very strategically use tolls 

to produce an expanded, limited-access highway system. And we 

have chosen to do that, and it has been very effective. As far as 

the cost, I don’t think it gets into the $.20 to $.50 for every dollar. 

It doesn’t. It is—and I know this, that every dime that is collected 

goes back into transportation projects. We have a long turnpike enterprise system, which is over 600 miles. We have another 150 

miles in a local—in several areas, including Tampa, Orlando, 

Miami-Dade County have toll systems. 

And we have just recently, in the last several years—I think they 

started off as Lexus Lanes then they were called Taurus Lanes, 

and now they are Price Management Lanes to make the—maybe 

mitigate the fact that everybody can use them. But they are used— 

they are basically a—we use them from Miami up to Fort Lauderdale on I–95 for—in a sense they are price management, in that 

the tolls collected are varying tolls, depending on how much better 

the traffic is flowing on those lanes, versus the other. 

I could contend that that, more than anything, is a user-pay system that works. I understand gas tax. We have a supercharged— 

35 

maybe it is a turbo tax—turbo tax system in Florida, where our gas 

tax is indexed. But for the most part, most of our new roads have 

been built by toll. And I would commend that to this committee. 

Mr. DUNCAN. Well, thank you very much, Mr. Webster. I remember when you were speaker of the house in Florida, and you certainly saw things from a statewide basis. But while you were making those comments, I remembered the comment from my friend, 

Joe Scarborough, when we were doing the highway bill. He told 

Bud Shuster that he wouldn’t want any highway money, even if 

they built the Joe Scarborough Memorial Highway clear from Pensacola to Miami. And I told Chairman Shuster that, ‘‘You give me 

his money, then.’’ I would take it. 

[Laughter.] 

Mr. DUNCAN. Mr. Sires. 

Mr. SIRES. Thank you again to the panelists. This has been very 

informative. 

I was just wondering. For those people that move freight internationally, do you and your customers see a large difference between the U.S. infrastructure and that of the—of your international trading partners? And where are the gaps, if there are 

gaps? 

Mr. SMITH. Well, I think it varies around the world. If you go to 

China, they have a fantastic infrastructure of airports and ports 

and rail that have been put in place in the last 30 years. In Europe, it varies from country to country. I think the European subsidization of passenger rail systems and all makes it so it is hard 

to compare with the United States. 

But our transportation system, up until the last decade or so, I 

think, was a model for the world. The problem is it has been allowed to atrophy. We were spending, in the 1960s, about 4 percent 

of GDP on infrastructure. We are down to 1 percent now, and as 

been mentioned several times during this hearing, it is very difficult to simply raise the fuel tax on an inflation-adjusted basis, 

back to where it was in 1994, despite the fact that the fuel efficiency of personal automobiles and over-the-road vehicles and all is 

significantly greater. And I think the reason for that, quite frankly, 

is that we have had a vast increase in fuel taxes that have been 

imposed by OPEC, by the price of fuel. So people are very sensitive 

to the fact that today they are paying, you know, close to $4 a gallon, $3.50, and when we started this decade they were paying less 

than a fifth of that. 

FedEx Express, I remember in the spring of 2001, was paying 

$.67 for a gallon of jet fuel. And today it is $3.30, $3.40, something. 

You know, it is not a little bit. It is five times. So the average family in the United States is now paying between $2,500 and $3,000 

more for gasoline per year than they were 10 years ago. That is 

why you have had such a hard time, it seems to me, increasing the 

gasoline tax, because it just adds to that. 

But it still doesn’t mitigate the fact that our infrastructure is 

aging, and our entire economy, as Chairman Duncan said in his 

opening remarks, you know, depends on this transportation and logistics infrastructure. And we either fix it, improve it, modernize 

it, and expand it, or we will have a lower standard of living and 

36 

a lower national income. That is just absolutely 100 percent predictable. 

Mr. SIRES. Well, thank you very much. I am glad—I have a few 

minutes, so I just want to talk a little about your comments. You 

know, I know that you mentioned that you spent $300 million, your 

authority, to deepen in the ports. Was that the right amount? 

Mr. NEWSOME. We haven’t spent it yet, Congressman, we put it 

aside in an account with the anticipation of spending it on our 

deepening project. 

Mr. SIRES. But, obviously, there is no help. And you have to put 

the money aside and the people of South Carolina have to pay for 

that. 

Mr. NEWSOME. That is correct. I would say we are probably the 

only port and State that has done that. And we do that simply out 

of the uncertainty of funding for a very strategic project for our 

State. 

Mr. SIRES. OK. What I am getting at is that I do believe the Government has to—you know, has a role to participate in some of 

these areas, because some of the best jobs that we have in this 

country comes from the ports. And I think the freight is going to 

grow enough where it is not just the Port of Newark or the Port 

of Elizabeth, but all the ports on the east coast are going to be able 

to take advantage of the growth that is coming in the future. 

Unfortunately, we don’t participate, as a Government. So, therefore, it is the people who eventually wind up paying for it. The reason I say that is because in New Jersey, you know, you talk about 

the Bayonne Bridge. Surely we were able to get the Port Authority 

to put the $1 billion that is needed to raise the port, the bridge, 

which impacts about 250,000 jobs in the region, all jobs related to 

the port. But, again, at a cost. 

You know, you try to go through the Lincoln Tunnel today into 

New York, it is like $13, and it is going to go into, I think, $14 or 

$15, because somebody has to pay for the ports—for the ships to 

be able to go through the ports to keep those good-paying jobs in 

New Jersey. And I always—I remind you there was a gray billboard going into the Lincoln Tunnel and it was put together by the 

people who do park-and-ride. And the billboard read, ‘‘President 

Lincoln. Great President, Lousy Tunnel.’’ 

[Laughter.] 

Mr. SIRES. OK? The reason being is that, you know, you go into 

New York City, and you have to pay this expense. And we are now 

working on another tunnel, supposedly the Allied Tunnel, to move 

freight. But all that stuff, if we don’t participate as a Government, 

all those good jobs are going to be impacted because, you know, it 

has got to come from someplace. 

Mr. NEWSOME. Well, Mr. Sires, they are Federal harbors. And it 

is not correct that the people of the State of South Carolina have 

to pay the entire cost for deepening. And we hope that is not the 

case. We are optimistic with what we see happening in the activities of this committee, that it will somehow not be the case. 

Mr. SIRES. How many jobs, good-paying jobs, are related to the 

ports? 

Mr. NEWSOME. In South Carolina, direct and indirect jobs, about 

1 out of every 10 jobs in the State are related to—— 

37 

Mr. SIRES. Incredible. And if you don’t deepen, you know, these 

big ships coming through the canal now are not going to be able 

to dock in South Carolina. 

Mr. NEWSOME. We have to deepen. And it is not—it is a regional 

priority. There are four ports within 400 nautical miles. We are not 

in big cities like Los Angeles or New York. And they serve an entire region, the fastest-growing region in this country, the Southeast, and we need a 50-foot harbor. It is a priority, because four 

other harbors are already authorized to be at that depth today. 

Mr. SIRES. Thank you, Mr. Chairman. 

Mr. DUNCAN. Well, thank you, Mr. Sires. I think it is—I have 

been told that 42 percent of the House, I think it is, is new, just 

in the last 2 elections. But the only representative we have of this 

year’s freshman class, a large freshman class, is Mr. Mullin. Mr. 

Mullin, you may begin. 

Mr. MULLIN. Thank you, Chairman. And I do like the opportunity to speak to everyone and tell you thank you. 

It is a frustrating thing, as a business owner. We have not near 

the size of fleets that you have, but in Oklahoma we run about 80- 

plus trucks every day on the road, my company, which is my wife 

and I’s. And the frustration, the lack of common sense that we see 

that comes out of this place all the time is literally what drove me 

here. 

And so, for this panel to be put together—when Chairman Shuster said that he was putting this panel together, we jumped at the 

opportunity, knowing that we were still a little wet behind the 

ears. But we were welcomed by the chairman to join the panel. And 

to see that we are bringing in the industry leaders and actually listening—what I hope we do is actually take your advice, too. Because for politicians to think that we are going to fix the infrastructure is an absolute joke. We have to take the suggestions of those 

that are sitting in front of us. 

And so, thank you for taking your time. And I do want you to 

know it is not a waste of your time, that you are sitting in front 

of us today. I truly believe this panel of 11 has the interest. You 

can tell that most of us all agree that we have got to do something 

with our infrastructure. The infrastructure is the backbone of our 

economy. It is how we get around. At the same time, it is one of 

our biggest expenses, too. When we drive on roads that beat our 

trucks up, we have got to repair them. It slows us down, and it 

slows our production down, too. So, with that being said, thank 

you. Thank you so much. 

Seventy percent of Oklahoma’s freight actually travels through 

the State, 70 percent of it. We are the center of the country. And 

it is vitally important that we invest in the infrastructure getting 

around it. So at the same time we have one of the largest, if not 

the largest, inland water ports in Catoosa, which is in our district. 

The chairman had the opportunity to come—Chairman Shuster 

had the opportunity to come visit it Friday. And he literally made 

a comment of, ‘‘This is in Oklahoma?’’ 

And I said, ‘‘Yes, it is right here,’’ because it doesn’t look like it 

belongs in Oklahoma. But we have invested in the infrastructure, 

or the generations ahead of us saw the future. And what you guys 

are suggesting is part of the future, too. 

38 

And I have a couple questions for Mr. Smith, first of all. In your 

statement you said you was wanting to increase your tandem 

trucks from 28 to 33 feet. Is that correct? What type of increase 

would you see, as far as the number of trucks you would see coming off the road in your production that you would build, the efficiency that you would build to deliver the products? 

Mr. SMITH. Well, as I mentioned, Congressman, the parcel and 

the LTL business, the less-than-truckload business, which are both 

network businesses, as opposed to the truckload business, which is 

more point-to-point, pick up in one—— 

Mr. MULLIN. Right. 

Mr. SMITH [continuing]. Location and deliver it to another location. The problem in the less-than-truckload and the ground parcel 

business, where we are represented with FedEx Ground and FedEx 

Freight, is that you cube out long before you weight out. 

In the truckload business, depending on the type of commodity 

that you are carrying, you may well have a truck that is very 

heavy. 

Mr. MULLIN. Right. 

Mr. SMITH. But in the parcel business, and in the LTL business, 

you are way underutilizing the pulling power of the vehicle. So it 

is about an 18-percent pickup in productivity. 

And over time, you would have roughly 18 percent fewer vehicles 

that are involved in LTL and ground parcel in over-the-road transportation by making that one change. They are safer. We have tested them in Florida and so forth. We have had, I think it was, the 

University of Michigan look at it. They are more stable. And so, 

with fewer vehicles on the road you burn less fuel, fewer emissions, 

and you have a safer operation. 

Now, the reality, the way the transportation system is evolving, 

is truckload transportation built around the 53-foot unit is the 

standard unit, as well, for intermodal. And Mr. Moorman was kind 

enough to put that picture of the FedEx PUPs up there, the 28- 

footers. But in reality, the majority of our rail transport are 53-foot 

trailer-on-flat-cars. And over a period of time, I am very confident 

they will transition to containers, because they are more efficient 

for the rail transportation. 

So, we would say that one of the simplest ways to improve the 

Nation’s productivity is simply go to a 33-foot PUP standard and 

keep the 53-foot truckload intermodal standard. 

Mr. MULLIN. That is a commonsense approach, and I do appreciate it. And Chairman Shuster pointed out to me one time, 

though, that common sense is a rarity and doesn’t belong in D.C. 

But hopefully we can bring that on. 

Mr. Leathers, you had made mention about the weight increase. 

What is it that you would like to see the weight increase to from 

where it is at to where you would like to go? And is there a stopping concern? 

Mr. LEATHERS. Well, first off, let me state that at our organization we may be unique in the sense that we are a truckload carrier 

that goes from A to B, as Mr. Smith just indicated, but we also 

cube out before we weigh out about 80 percent of the time. So one 

in five of my customers would have a benefit for a heavier weight. 

39 

My position on it, though, is that we ought to allow, as technology has continued to advance—and, for instance, our current 

truck spec has the same stopping distance—the trucks we were 

bringing into our fleet today has the exact same stopping distance 

at 88,000 pounds on five axles that it did in the past, or historically, with 80,000 pounds over five axles. 

So, when I made the comment that I think there ought to be exceptions and States should be given the authority for longer dimensional vehicles as Mr. Smith has requested, or where appropriate, 

heavier weight vehicles, where the application is designed appropriately, that is really what we are speaking to. 

I will tell you in my own network, in my own organization, it 

would not be something that would benefit us. But I think the purpose of the panel is to talk about it in broader terms than that. 

Mr. MULLIN. Mr. Chairman, if I could quickly say just one more 

thing to the panel—and I am sorry about taking time here—but 

would you prefer to see a flat tax increase, or a percentage increase? And just quickly, you guys can either—I don’t really care 

who starts with that. 

Mr. WYTKIND. I might. We have taken the position that both options would be fine, although we have said straight flat-tax increase. But I do think indexing is important. I agree with my fellow 

panel members, getting it indexed, so we don’t have to keep falling 

behind, the way we are. We are now at our 1993 budget in 2013. 

Mr. MULLIN. Right. Everybody agree with that? Thank you. Appreciate your time, thank you. 

Mr. DUNCAN. Thank you very much, Mr. Mullin. 

Mr. SMITH. Mr. Chairman, could I? 

Mr. DUNCAN. Yes, sir. 

Mr. SMITH. Congressman Mullin, I just had a note here that the 

effect of going to 33 foot, in our ground and freight operations, 

would take 600,000 truck trips per year off the road. 

Mr. MULLIN. Wow. 

Mr. DUNCAN. All right. 

Mr. MULLIN. Thank you. 

Mr. DUNCAN. Thank you very much. We always try to save the 

best for last, Ms. Hahn. 

Ms. HAHN. Thank you, Mr. Chairman. Thank you for hanging 

around, you and Ranking Member Nadler, with me. 

This has been, really, a fascinating discussion. I am again so 

pleased that I am able to be on this panel, as I do think we are 

going to be able to create a national freight policy that is common 

sense, but really begins to address this issue like we never have 

before. 

Being the last person, obviously most of my questions were already asked and answered. I do just want to say again how pleased 

I am that we are talking about the Harbor Maintenance Trust 

Fund. I just think that is a problem in search of a solution. There 

is $9 billion that is surplus that is not being used for the intended 

purposes. 

And again, I think when we collect a tax, as was said, I think 

people—and the industry is OK with that, as long as we continue 

to use the tax for the purpose it was intended for. And I think we 

40 

really lose the public’s trust when we continue to ask for taxes, 

raise taxes, and don’t use them for the intended purpose. 

L.A./Long Beach, of course, is the donor port in that Harbor 

Maintenance Tax. We only get .1 percent back of what we give. 

And maybe for another topic I would really like to do a deep dive 

into the Harbor Maintenance Trust Fund, and talk about are we 

willing—are we ready to achieve some sort of equity? I would like 

to see that money go back to the ports where it was collected. I 

know, though, the smaller ports in the country are nervous about 

that solution, because many of them are on the receiving end of 

that tax. So I really don’t feel like we have the time here to deep 

dive into that. 

One of the things I have not heard us talk about today, which 

I do think is a—is going to be a problem that we need to address, 

and that is the environmental impacts of our expanded transportation projects and initiatives. And wondering if that is something 

that we need to actually look at and address in a commonsense 

way when we come up with a national freight policy. 

I know in Los Angeles, in Long Beach, we have had to address 

environmental mitigation as we have grown our ports. We do have 

the Clean Truck program. We are now expanding the ships’ ability 

to plug into shoreside power in our port. We have an intermodal 

project, BNSF, that I fear is—will be held up because of the environmental impacts of that project, even though it is a good project, 

it makes sense, it is going to help our transportation system. You 

know, unless we address the impact that we are going to have on 

neighborhoods, I think many of our projects that we are going to 

talk about may be stalled until they are better. 

Curious to know. Are we moving towards cleaner, greener fleets 

with FedEx or rail? Are we closer to any kind of real cleaning or 

electrifying of our trains, our trucks? I know we are not close to 

having an electric drive system that actually can work for a long 

haul. But where are we, and should we, as we talk about a national freight policy, should we address this in a proactive way so 

that any kind of expansions or, you know, more investment in infrastructure projects, we address this at the same time so as not 

to have a conflict with environmental mitigation? I would like to 

hear all of your comments on that. 

Mr. SMITH. Well, I will start and simply say that the easiest and 

best way to reduce emissions and pollutions is through, one, making our transportation infrastructure more efficient. Everything 

that we have talked about today, Next Generation air transportation, corridor improvements, infrastructure funding by increased 

fuel taxes, as long as that money is spent on infrastructure, it will 

reduce the number of vehicles or activities, and there will be a commensurate reduction in emissions. It just follows one to the other. 

As I mentioned, in FedEx Ground and FedEx Freight, just by 

making the change in the twins to a 33-foot limit takes in our company alone 600,000 trips. So it is a fantastic improvement. 

The second is technology is allowing us to do what we do more 

efficiently. We are buying new 777 airplanes, 18 percent more efficient than the airplanes that they replace. Our new lighter pickup 

and delivery vans for FedEx Express are almost 40 percent more 

efficient. The quickest way for the Congress to reduce emissions in 

41 

the transportation sector is to change the corporate tax rate and 

make it more advantageous to invest in capital assets in the 

United States and modernize them. 

Those two things, you don’t have to worry about efficiency and 

emissions, you know, getting better. They will happen as a natural 

coefficient of what you have done. 

Ms. HAHN. Well, we found that to be true in the Alameda Corridor. We got rid of 200 grade—at-grade crossings. And what started out to be just an efficient way to move cargo turned into being 

an incredibly environmentally sound project that reduced emissions 

with cars, of course, waiting for—at the at-grade separations. So 

thank you for that. 

Yes, I would like to hear from the rest of you. 

Mr. MOORMAN. Let me go very quickly. There is an enormous 

amount—and I concur with everything Mr. Smith said. There is an 

enormous amount the rail industry is doing, in terms of reducing 

emissions. We already have a approximately threefold advantage, 

in terms of fuel efficiency versus the long-distance highway transportation. So we are generally viewed as the cleaner form of transportation. But we have—in addition to that, we have got lots of 

programs to reduce emissions and increase fuel efficiency all over. 

The other point I would build on, though, in terms of what you 

can do, and what the Congress can do, is that all of us at this 

panel, I know, believe in being good corporate citizens and good environmental stewards. But one of the things that happens—and 

you pointed out a great example of it—is that quite often there are 

very good projects out there with significant environmental, as well 

as economic, benefits that just get snarled up in layers and layers 

of not only Federal regulation, but State and local regulation, and 

can add years and years to the time when we can accomplish these 

projects and realize the benefits. 

And to the extent that this panel thinks about that, and thinks 

about how we can streamline processes to get a lot of this important work done, I think that is an important thing to keep under 

consideration. 

Mr. LEATHERS. I also will try to be brief. I echo the sentiments. 

The single biggest thing I think we can do to positive impact the 

environment is to take away the congestion that otherwise results 

from inaction. 

There was an A&M study in 2011 that said the cost of congestion on our Nation’s highways was $121 billion. Trucks bore the brunt 

of that in the term of $29 billion. But the real issue is as those 

trucks are—and cars and other vehicles are congested, is the emissions and pollutants and environmental impact that may happen. 

As for our industry, we have invested heavily. We have reduced 

the particulate as well as NOx emissions of the Next Generation 

trucks that we now run by 90 percent over the last 5 years. And 

so, one of the untold stories is that the average truck going down 

the road today, you would need 60 of them to have the same emissions as one truck would have had in 1985. So tremendous progress 

has been made, and we are going to continue to go down that path. 

But eliminating congestion and allowing us an environment whereby we can invest with a better tax structure, so that we can invest 

in alternative technologies as they come available, would be huge. 

42 

We are experimenting with natural gas, both compressed natural 

gas and L&G liquified natural gas. But in both cases it is a very 

expensive technology. And so, having appropriate tax environment 

that allows us to take those risks would be beneficial, as well. And 

we will continue our part, you know, in our organization. You 

know, we have eliminated 860,000 tons of carbon emissions, just in 

the last 5 years, through some of these techniques, and we are 

going to continue to do so. But it is really an industrywide effort 

to try to run cleaner and safer at all times. 

Mr. NEWSOME. The international and domestic container shipping industry, I think, has been on the forefront of environmental 

efficiency. The very building of large ships is environmentally efficient. We are going to carry more cargo on the same number of 

ships, accommodating our growth in much more fuel and environmentally efficient ships. 

You mentioned shore power. I think the main benefit in harbors 

is going to be from the North American Emission Control Area, 

which was implemented in the U.S. in August, and will ultimately 

reduce sulphur content and maritime diesel fuel from about 4 percent to .1 percent by 2015. So it is a dramatic reduction across all 

ships in the harbor. 

We have a Puerto Rico carrier that is building L&G ships today. 

And I think the ports have stepped up to the plate, in terms of retrofitting engines, more efficient diesel engines, electrifying cranes, 

and, in our case, even funding a truck replacement for the oldest 

of diesel trucks. 

Mr. WYTKIND. If I might add one small comment, first of all, 

NextGen in the aviation system has proven to cut fuel consumption, and will reduce the footprint of the airline industry. Reducing 

congestion is good environmental policy. I think there is too much 

saber rattling that goes on in some of these development projects 

that gets in the way of some environmental progress. Letting the 

freight rail industry innovate and expand, and making policies in 

our Government reflect that ability to expand is good environmental policy. 

And let’s not forget. I know no one has mentioned the word ‘‘public transit’’ in this hearing. If you boost public transit in this country, and you boost it in some of these large, metropolitan areas like 

Mr. Nadler’s and others, and give them more resources so they can 

expand, not have to cut service, like we are seeing around the 

country, that relieves congestion, that makes more room for freight, 

and that is good environmental policy, as well. 

Ms. HAHN. Thank you. 

Mr. DUNCAN. Thank you very much, Ms. Hahn. Before I make 

my closing comments, I believe Ms. Brown wants to ask some more 

questions. 

Ms. BROWN. Mr. Chairman, this has been very educational. I just 

want to say that the Chamber from Miami was here and they was 

watching. And so I think, keeping in mind that we have the support of the business community, their interest in us working together to move a transportation bill that will give us the revenue 

enhancements, taxes, or whatever you want to call it, and making 

sure that we reinstate, let’s say, the earmarks, Members’ priorities, 

43 

so that the communities can work together to get the immediate 

resources. 

Yesterday the Department of Transportation released the TIGER 

grants. We will have billions of dollars requested, just millions to 

fund, because of the pent up demands in the community, and those 

choke points that you all have talked about. 

So, I want to thank you very much, and thank you, the chairman 

and the ranking member, for convening this committee. And thank 

you all for your testimony. It would be—it has been very helpful. 

Thank you. 

Mr. DUNCAN. Well, thank you. Mr. Lipinski, anything else? 

Mr. LIPINSKI. You really don’t want to take any more time here, 

Mr. Chairman, do you? I was going to say I just talked to Illinois 

Council of Engineering Companies, and they also were excited that 

this is going on, that we are talking about this. They understand 

the need to get this done. But thank you, Mr. Chairman. 

Mr. DUNCAN. Thank you very much. You know, I was a judge for 

71⁄2 years before I came to Congress. And I always tried to get to 

court right on time. And then I came here, and it seemed that 

every hearing started 15 or 20 minutes late. So when I started 

chairing subcommittees, I tried to start right on the minute every 

time. And my goal was always to hold these hearings to a couple 

of hours. I am fascinated with these topics, but I found that you 

had better participation by Members if you started these hearings 

on time and kept them running, and I have always tried to do that. 

We have run a little bit over today, but the testimony has been fascinating. 

I just want to say just a few things. You know, there are many 

challenges within transportation, but we are all in this together. 

There is an important local role, there is an important State role. 

But I have always thought there was a very important Federal role 

in all of these topics, because people in California sometimes use 

the airports in Texas, and vice versa. People in Ohio sometimes 

drive on the roads in Tennessee and vice versa. People in New 

York sometimes drink the water in Florida, and vice versa. And so 

we are all in this together. 

But it seems to me that there are many challenges. But number 

one, of course, is funding. And most of you have said some things 

about that, and that is a problem for all of us. But I have said in 

here for many years that we need to stop spending trillions of dollars on unnecessary wars and things in other countries and start 

taking care of our own country for a while. 

The second biggest thing, it seems to me, is to speed up project 

delivery. I remember when I chaired the Aviation Subcommittee, 

they testified that the newest runway at the Atlanta Airport, which 

is now several years old, took 14 years from conception to completion. It took only 99 construction days. And they were so relieved 

to get all the final approvals, that they did that in thirty-three 24- 

hour days. Then, when I chaired the Highways and Transit Subcommittee, the Federal highway people told us that their last two 

studies, one said 13 years, one said 15 years from conception to 

completion on all the highway projects. 

And, Mr. Newsome, I remember meeting with Maersk one time 

and they told us about the Norfolk Port project that they just basiVerDate Aug 31 2005 14:20 Jul 24, 2013 Jkt 000000 PO 00000 Frm 00051 Fmt 6633 Sfmt 6633 P:\HEARINGS\113\PANELO~1\4-24-1~1\80577.TXT JEAN
44 

cally did on their own. They did everything for the Government to 

try to speed things up. Hopefully MAP–21 will have some effect on 

that. It seems to me that when we are forced into it we can move 

pretty quickly, like on the Interstate 35 bridge project, when we all 

got together on that. 

And then the third thing, the third big area to me seems to be 

how do we balance our resources. Because what you have got, you 

have got people moving all over the country, from the high-tax 

States to the low-tax States. You have got people all over the country still moving out of the small towns and rural areas to the popular urban areas. And I see that in Tennessee, for instance, because, Mr. Smith, you know the fast growth in Tennessee is in the 

circle around Nashville and the circle around Knoxville. Half the 

people I represent have moved from someplace else. It is phenomenal. 

These big cities, primarily in the Northeast, have such an aging 

infrastructure, they need a lot of work. But then you have got the 

fast-growth areas like the Knoxville area, Nashville, and a lot of 

other areas around the country. They have to have a lot of work 

done because of all the growth. And then, all of us have a soft spot 

in our heart for the small towns and rural areas, and you don’t 

want to force people to keep moving out of those areas, and those 

are poor economic areas. So they need a lot of help. 

But, Mr. Wytkind, these jobs are jobs that can’t be outsourced, 

for the most part. And that is important to me, because, you know, 

I represent the University of Tennessee and a lot of other small colleges. And I see we are ending up with the best-educated waiters 

and waitresses in the world. And there is nothing wrong with that, 

that is honorable employment, but you hate to see people, even 

with advanced degrees sometimes, who can’t find the good jobs that 

they used to be able to find. 

Mr. Newsome, the most fascinating slide I think you showed was 

that one showing that the Panama Canal was moving to allow 

ships with—was it 12,600 TEUs? 

Mr. NEWSOME. 12,500. 

Mr. DUNCAN. 12,500? That amazes me, because I have seen all 

those—I have seen presentations—I remember when they thought 

8,000 TEUs was just almost unbelievable. And then you go back 

into the fifties and sixties and they were really small. But we have 

got to keep improving these ports. I had the opportunity to open 

and close the Panama Canal at one point. I have been there and 

been to most of the ports. And I am glad to see you doing what you 

are doing. 

Let me just add this. We need specifics, as many specifics as we 

can. And, Mr. Moorman, I was glad to see you mention the Crescent Corridor project, because at the request of my good friend and 

yours, John Corcoran, I put in the first money to do the first Federal study of that project. And, boy, that is sure something that 

would—as you said, would be good for my area, but many other 

parts of the country as well. 

At any rate, we have been asked to go around the country, we 

have been asked to make recommendations to all the different subcommittees. And if there is any specifics that you think of after you 

leave here or that you didn’t really have an opportunity to get into 

45 

in your testimony or your responses today, please submit them to 

us, because we want everybody to do well. We have got a great 

transportation system. As an individual or as a company or whatever, you lose the desire to improve. It is sad for you and it is sad 

for the people you work for. I hope I am a better congressman now 

than I was 5 years ago. I hope, if I am here a while longer, that 

I am a better congressman in the future. 

So, we got to keep trying to do more. We got to keep trying to 

do better. And that is what this panel is all about. So as many specifics as you can give us for our final report 6 months from now, 

we would certainly appreciate. And we appreciate the work that 

you have put into your testimony and your responses here today. 

And I would like to call on Mr. Nadler to close out the hearing. 

Mr. NADLER. Well, thank you very much, Mr. Chairman. I want 

to thank you for convening the hearing. I want to thank the witnesses and the Members. 

This is the beginning of what will hopefully be a very fruitful investigation into a—that may result in a unified, intelligent, comprehensive freight policy for this country, something we haven’t 

had in a long time, an intermodal freight policy that will look at 

all the different modes, it will figure out how to finance them. 

Obviously, the elephant in the room is how to finance all of this. 

The gas tax, the gasoline tax, which has been the—or the diesel 

fuel tax, which has been the primary source of financing for infrastructure, has been—is a wasting asset, both because of not adjusted for inflation, and we are becoming more fuel-efficient, which 

we want to be. Both of those reduce the revenues from the tax, and 

we have got to do something to replace it, obviously. It is something that we can pass politically, which may be more difficult than 

intellectually. 

We have to figure out how to cut down on the red tape and on 

the delays in implementing projects. And how to make sure that, 

from a national point of view, we have those projects, Projects of 

National and Regional Significance and others, that will make the 

freight system, as much as possible, seamless and efficient. It is a 

tall order for 6 months, but I assume we will come up with some 

decent answers. 

And I want to thank everybody involved in this, and in particular, the witnesses today. 

Mr. DUNCAN. All right. Thank you very much. I have to ask 

unanimous consent that the formal invitation letter sent by Chairman Shuster and Ranking Member Rahall to the members on this 

panel be entered into the record of today’s hearing. 

[The information follows:] 

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We thank you all very much for being here, and your work and 

that will conclude this hearing. 

[Whereupon, at 12:28 p.m., the panel was adjourned.] 

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