SECTION: CAPITOL HILL HEARING TESTIMONY

LENGTH: 3873 words

COMMITTEE: HOUSE TRANSPORTATION AND INFRASTRUCTURE

SUBCOMMITTEE: HIGHWAYS AND TRANSIT

HEADLINE: INTERMODEL TRANSPORTATION SYSTEMS

TESTIMONY-BY: DAVID MANNING, PRESIDENT

AFFILIATION: TCW/TENNESSEE EXPRESS, INC.

BODY:
STATEMENT OF DAVID MANNING, PRESIDENT TCW/TENNESSEE EXPRESS, INC.

BEFORE THE SUBCOMMITTEE ON HIGHWAYS AND TRANSIT HOUSE TRANSPORTATION AND INFRASTRUCTURE COMMITTEE

UNITED STATES HOUSE OF REPRESENTATIVES

June 18, 2002

Chairman Petri, Representative Borski, members of the Subcommittee, thank you for the opportunity to express the trucking industry's perspectives regarding intermodal freight transportation. I am David Manning, president of TCW/Tennessee Express, Inc. The company is headquartered in Nashville, TN. We have provided freight transportation services throughout the southeastern United States for more than 50 years. Tennessee Express offers an extensive array of intermodal transportation and warehousing services to customers using rail and waterborne transportation. I am appearing before the Subcommittee today on behalf of the American Trucking Associations, Inc. (ATA). ATA is the national trade association of the trucking industry. We are a federation of affiliated state trucking associations, conferences, and other organizations that together include more than 37,000 motor- carrier members, representing every type and class of motor carrier in the country. We represent an industry that employs nearly ten million people, providing one out of every fourteen civilian jobs. While we are a highly diverse industry, we all agree that a good highway system is crucial to our nation's economy, to the safety of all drivers, and to our bottom line. This includes the more than 3 million truck drivers who travel over 400 billion miles per year to deliver to Americans 87 percent of their transported food, clothing, finished products, raw materials, and other items.[1]

American industrial and commercial enterprises are able to compete more effectively in the global marketplace due to the benefits of safe and efficient trucking. Truck transportation is the most flexible mode for freight shipment, providing door-to- door service to every city, manufacturing plant, warehouse, retail store and home in the country. For many people and businesses located in towns and cities across the United States, trucking services are the only available means to ship goods. Trucks are the only providers of goods to 75 percent of American communities. Five percent of the nation's GDP is created by truck transportation. Actions that affect the trucking industry's ability to move its annual 8.9 billion tons of freight have significant consequences for the ability of every American to do their job well and to enjoy a high quality of life.

THE NATIONAL HIGHWAY SYSTEM: THE BACKBONE OF AMERICA'S FREIGHT TRANSPORTATION SYSTEM

Although the past two reauthorization acts developed and promoted by this Subcommittee have been instrumental in revitalizing federal surface transportation policy, there is still a distance to go, with some longstanding obstacles and some new challenges to face.

One of these challenges is basic highway infrastructure. At a time when many stakeholders, including those appearing at this hearing, have legitimate concerns about the future of intermodal connectivity, alternative transportation and transportation enhancements, there often is a loss of focus on the original purpose of federal involvement in surface transportation: namely, to help the States build and maintain a national system of highways. As the Subcommittee considers its reauthorization proposals, it is imperative to review whether this goal is still being met. According to the Department of Transportation's 1999 Conditions and Performance report, even with the high levels of funding authorized by the Transportation Equity Act for the 21st Century (TEA-21), there is still a shortfall in federal funding of over $25 billion each year just to maintain current conditions on our highways and bridges. While it is inconceivable under current economic conditions to consider completely eliminating the shortfall during this upcoming reauthorization cycle, serious thought must be given to reducing the shortfall.

Highway spending not only improves road conditions, it also has a significant impact on the nation's economy. For every billion dollars spent on highways, 42,100 jobs are created. Each dollar similarly spent also yields $5.70 in economic benefits due to improved safety, reduced congestion, and lower vehicle operating costs. It has been estimated that each driver pays an additional $259 per year ($49 billion total for the nation) due to the effects of roads in need of repair. Operating a truck on a poor road costs motor carriers 12 cents per mile more compared with the cost of operating on a road in good condition.

The National Highway System (NHS), which carries 75 percent of the nation's truck traffic, is the backbone of the trucking industry. Yet it is also critical to the efficient movement of rail, waterborne and air freight. No matter how efficient these other modes become on an individual basis, their speed and reliability will ultimately be limited by the efficiency of the trucks that they rely on for part of their intermodal movements.

Unfortunately, the performance of the NHS has deteriorated to the point where nearly half of urban Interstate miles are congested during peak periods. Forty percent of travel on urban NHS routes takes place under such congested conditions that even a minor incident can cause severe traffic flow disruptions and extensive queuing.[2] Average annual investment requirements just to maintain conditions on NHS highways and bridges were $26.8 billion in 1997.[3] The actual capital outlay was $22.5 billion, a $4.3 billion, or 19.1 percent shortfall. This was despite the fact that the 160,000-mile NHS carries 40 percent of all traffic and 75 percent of truck traffic.[4] Continued funding shortfalls will only harm road and bridge conditions, further exacerbating congestion levels. We urge Congress to reevaluate the current distribution of federal highway funds during the next reauthorization period and consider whether a greater emphasis should be placed on the NHS.

Perhaps nowhere are the effects of many years of neglect and under-funding of the NHS more pronounced than with the situation facing NHS intermodal connectors. In its report to Congress[5], the US Department of Transportation (DOT) stated that connectors to ports were found to have twice the percentage of mileage with pavement deficiencies when compared to non-Interstate NHS routes. Furthermore, DOT found significant physical and geometric deficiencies that made it difficult for trucks to move safely and efficiently between the NHS and intermodal terminals. DOT identified 616 intermodal freight terminals in the United States. This includes 253 truck-and-port terminals, 203 truck-and-rail terminals, and 99 truck-and-air terminals.

It is useful to understand just how important these intermodal intersections are to the U.S. economy. Any product that is produced in the United States must access the global marketplace in the most cost-efficient manner possible. The producer or manufacturer is the party that decides how to receive or ship freight. They make their decisions based on many factors, including just-in-time delivery factors, reliability of delivery times, security, freight value-to-weight ratios, and cost. Shippers also avail themselves of the inherent virtues of each mode of freight carriage. The only way they can take advantage of these efficiencies and values is if the interfacing mechanisms that join the different freight modes is adequate for the transfer. Many times, this is not the case.

Improving intermodal connections also benefits communities, surrounding ports, railheads, and other intermodal transfer facilities. In many situations, improving connectors will separate commercial vehicles from surface traffic that passes through congested neighborhoods. Often, these neighborhoods are clean-air non-attainment areas, and improved intermodal connectors would likely produce more efficient trucking operations, which will in turn result in fewer emissions.

ATA encourages Congress to set aside funding for improvement of intermodal connectors and to make innovative financing options more available for addressing connector deficiencies. This should include lowering the threshold for TIFIA funding eligibility. We further urge Congress to make changes to the state and metropolitan planning processes to ensure that projects which benefit freight on a regional and national scale receive greater consideration. Project selection should be determined by DOT in cooperation with the freight community, state DOTs, and other stakeholders.

FREIGHT STAKEHOLDERS:

WORKING TOGETHER TO ENSURE FUTURE ECONOMIC COMPETITIVENESS

ATA has joined with representatives of our modal freight partners and our customers in promoting a joint agenda designed to facilitate the efficient movement of freight. A joint statement is at Attachment 1. The proposals are largely conceptual, and more details will be available soon. The joint statement may be the most extensive united effort by the freight transportation community ever at the federal level, and this points to both the growing interdependence of freight modes and the seriousness with which we regard Congress' decisions in the next reauthorization bill. In brief, the freight community is requesting additional investment in freight projects, including intermodal connectors, and in border crossings and corridors with significant freight traffic; the creation of a national freight industry advisory group to assist in the freight planning process; additional money for freight research and professional development; creation of new or expanded innovative financing options for funding freight projects; and more emphasis on funding freight projects that reduce congestion and improve air quality under the Congestion Mitigation and Air Quality Improvement (CMAQ) program.

We have also joined with our freight partners to secure additional funding for the Borders and Corridors programs that were created in TEA 21. The Coalition for America's Gateways and Trade Corridors, of which ATA is a founding member, is calling for a significant increase in funding for these crucial programs. We are concerned about the significant earmarking that has undermined the effectiveness of these programs. However, we believe that the original intent of the programs - to ensure that the infrastructure necessary to accommodate current and future freight needs, due in part to massive trade expansion - is still valid. We strongly urge Congress to extend the Borders and Corridors programs during TEA 21 reauthorization, and to make the programmatic and financial changes that are necessary to ensure the future mobility of America's freight transportation system.

BUILDING ON SUCCESS:

MAKING OUR NATION'S HIGHWAYS SAFER FOR ALL MOTORISTS

Safety must be paramount in our consideration of future reauthorization programs and policies. ATA takes safety concerns very seriously. Our industry has strongly promoted many safety improvements that have made trucking safer today than it has ever been in the past. Between 1985 and 2000, the fatal accident rate involving trucks has fallen 44 percent. In fact, today's truck driver is the safest driver - passenger or commercial - in our 's recorded history.

Even though the trucking industry is taking proactive steps to better improve our safety record, ATA is very concerned about America's overall highway safety experience. Each year, more than 40,000 people lose their lives as a result of a traffic accident. This is an unacceptable loss of life and an economic tragedy. As Secretary of Transportation Norman Mineta announced last April, the economic impacts of motor vehicle crashes is over $230 billion per year. This represents an annual economic loss of $820 for every American. Investing additional resources in projects and programs that improve highway safety produces more than human benefits; it has positive economic consequences as well. However, we should also spend our money wisely, directing precious resources toward those activities that will produce the greatest safety benefit, based on sound scientific evaluation of the causes of crashes and appropriate remedies.

IMPROVING THE SAFETY AND EFFICIENCY OF INTERMODAL EQUIPMENT

Mr. Chairman, while we try to cooperate with our intermodal partners in many areas, and will do so during this reauthorization cycle, there is one area on which we disagree, and I am afraid that the footdragging by federal agencies and by many in the rail and ocean carrier industries to work with us to resolve the "roadability" issue is having serious safety and economic impacts. Since the advent of containerized shipping in the 1970s, a serious safety loophole has crept into the Federal Motor Carrier Safety Regulations (FMCSRs). This loophole is commonly referred to as "roadability."

As containerized intermodal freight has evolved over the decades, the federal safety regulations have not kept pace. As a result, 750,000 intermodal chassis are operating in a safety loophole. These frame-like trailers are used exclusively to haul intermodal containers, and are interchanged between steamship lines, railroads and motor carriers. The chassis are also classified as commercial motor vehicles by the DOT. However, they evade DOT safety oversight.

The FMCSRs fundamentally assume that motor carriers have daily management control over all commercial motor vehicles they take onto public roadways. Based on that assumption, the regulations read, "Every motor carrier shall systematically inspect, repair, and maintain. . . all motor vehicles subject to its control."[6]

DOT's interpretation of systematic maintenance is, ". . . a regular or scheduled program to keep vehicles in a safeoperating condition." [7] It explains that the agency does not specify maintenance intervals, leaving that decision to motor carriers, based on fleet and vehicle considerations. So how does DOT know if a motor carrier is failing to "keep vehicles in a safe operating condition?" When roadside safety inspections, typically conducted by state police, drive a motor carrier's SAFESTAT (violation) numbers above a certain threshold, the agency and state police send an envoy to the motor carrier's place of business to audit the maintenance and employee training records, inspect the carrier's equipment, etc.

While railroads and foreign-owned steamship lines (collectively called "providers") own or lease the intermodal chassis, and control its daily disposition, they claim not to be motor carriers, thus not technically responsible for the condition of their equipment under federal safety regulations. However, they do affix the annual inspection sticker on their equipment, which constitutes an act of certification that the equipment was inspected in detail at least once a year. Providers conduct the annual inspection pursuant to the FMCSRs, but many do not conduct systematic maintenance on the same equipment, which is likewise mandated by the FMCSRs. In fact, providers are generally unaware of the existence of the federal systematic maintenance requirement. This explains the poor condition of intermodal chassis and points to DOT's failure to close their own regulatory loophole to hold the controlling party accountable for the safety compliance of their own chassis.

SAFESTAT is the DOT's computer analysis of their database containing motor-carriers' accumulated violations. They use it to judge how safely a motor carrier maintains the commercial vehicles under its control. By contrast, it is impossible to assess providers' adequacy in performing systematic maintenance because DOT resists including them in the SAFESTAT program. Ironically, DOT says the reason it has not moved forward to close the intermodal equipment safety loophole is because they do not have the data to indicate a problem with the providers' chassis! However, DOT has new data indicating intermodal equipment is a safety concern. A recent study[8] conducted jointly by the DOT's Federal Motor Carrier Safety Administration (FMCSA) and the University of Maryland at College Park provides support to ATA's position on the roadability issue. This study looked at 11 sectors of the trucking industry, one of which was intermodal operations. Researchers used nine safety performance measurements and other data managed by the FMCSA to analyze the safety performance of each sector. One significant finding is that intermodal trucking operations were found to be average or better- than-average in six of the nine measurements. However, in the two measurements relating to vehicle condition, the intermodal sector ranked poorly. Specifically, among the 11 sectors, intermodal operations ranked last for vehicle safety condition and second-to- last (tenth) for accumulating vehicle out-of-service violations. Thus, the latest research findings from FMCSA confirm what intermodal trucking executives have been saying for years - that the equipment controlled by steamship lines and railroads, and subsequently provided to motor carriers for brief periods of time, are potentially unsafe because they are not maintained by those controlling parties as required by the Federal Motor Carrier Safety Regulations. In summarizing the roadability issue, providers claim they are not motor carriers, thus they are not responsible for maintenance of their chassis. Providers say the motor carriers are responsible. The motor carriers point out that they do not control the providers' equipment; they neither own it, lease it, control its maintenance treatment, conduct annual or periodic inspections on it, nor do they control its daily disposition. The regulations reasonably require truckers to maintain only the equipment they actually control. In the meantime, DOT has acknowledged that it has jurisdiction over the issue, but has failed to place safety responsibility on the proper party. That places the 750,000 chassis squarely in a safety loophole. Enforcement needs to be redirected from the motor carriers, who are powerless to include interchanged intermodal equipment in their periodic maintenance programs, and placed on the parties who decide every day whether to repair a chassis, or hand it off to a motor carrier without the benefit of this DOT-mandated maintenance. Therefore, ATA is recommending that Congress pass legislation which directs DOT to equitably apply and enforce laws designed to ensure the safe condition of all regulated equipment, including intermodal chassis.

RELIEVING HIGHWAY CONGESTION:

THE KEY TO AN EFFICIENT FREIGHT TRANSPORTATION SYSTEM Mr. Chairman, there are few problems currently facing America's transportation system as challenging as that of traffic congestion. It is directly experienced on a daily basis by a majority of Americans. Increasingly, congestion is an all- pervasive phenomenon, not limited to large cities, rush hours, or holidays. Its devastating effects are felt throughout society, the economy, and the environment.

For businesses whose livelihoods depend on road transportation, these costs are particularly heavy. No industry is as negatively affected by congestion as trucking. It used to be possible for truckers to schedule their deliveries through congested urban areas at off-peak times. However, increasingly, such times do not exist. Current congestion levels are now compelling revisions to the language of congestion itself. It is no longer proper to discuss the "rush hour," when it lasts for three hours, twice a day. On the Interstate System, for example, more than half of peak-hour travel on urban Interstates occurs under congested conditions.[9] Under such circumstances, it is becoming almost nonsensical to employ terms such as "peak" and "non-peak."

Our highway capacity was perhaps adequate for our nation's economic and social functioning a generation ago, but today it is increasingly stressed. Over the past thirty years, the nation's population has risen by 32 percent, truck registrations have risen by 45 percent, truck vehicle-miles traveled (VMT) has risen by 145 percent, but road mileage has only increased by 6 percent.[10] This has led to unprecedented levels of congestion across the country.

Truck freight is a vital component of America's economy. For every $20 spent on freight transportation, $17 will accrue to trucks.[11] This pre-eminence is likely to increase. Over the next seven to ten years, freight demand is anticipated to increase by 20 to 25 percent.[12] This is a conservative figure. Some research has shown much higher estimates. FHWA, for example, expects truck freight to almost double by 2020.[13] To accommodate this higher demand level, the number of trucks will increase over that same period by 500,000, or some 50,000 trucks per year.

Through innovations such as just-in-time delivery, the trucking industry has played a vital role in improving US productivity. This would have been difficult, if not impossible, to achieve without an efficient network of good roads that connects markets, centers of industry, and multi-modal transportation facilities. Congestion decreases the effectiveness of our ability to serve our customers' just-in-time delivery needs and threatens to reverse the gains that have been realized since construction of the Interstate Highway System. We urge Congress to renew its commitment to highway mobility by directing additional funds toward highways of national significance. ENSURING NATIONAL SECURITY THROUGH THE EFFICIENT MOVEMENT OF MILITARY TRAFFIC

America's free enterprise participants are not the only beneficiaries of an efficient intermodal freight transportation system. The US Department of Defense (DOD), mostly through the Military Traffic Management Command, relies heavily on each mode to assist in the forward deployment of materiel in times of peace. A reliable freight transportation system is particularly important during times of war, such as the battle against terrorism that is currently underway. ATA's members haul freight for every branch of the military. We are the nexus between manufacturing plants, suppliers and every military installation throughout the nation. We haul everything from boots and MREs (meals ready to eat) to arms, ammunition and explosives in support of the nation's defense mission.

It is the objective of DOD to have sufficient motor carrier capacity to support significantly greater deployment capabilities than are currently available. In order for trucks to meet DOD's current and future goals, the roads that connect the NHS with rail, water and air freight transfer facilities must be given the long-overdue attention that they need.

Mr. Chairman and Members of the Subcommittee, thank you for the opportunity to offer our thoughts regarding intermodalism and the upcoming reauthorization of the federal surface transportation legislation. We look forward to working with the Subcommittee to improve the safety and mobility of our nation's freight transportation system.



LOAD-DATE: June 18, 2002