Freight Panel’s Kickoff Hearing Highlights Importance & Challenges of Freight Transportation

Witnesses highlighted the importance of each mode of transportation to the movement of goods and the economy, as well as the need for greater efficiency in the freight transportation network

Tuesday, April 30, 2013

The Committee on Transportation and Infrastructure’s Panel on 21st Century Freight Transportation, chaired by Rep. John J. Duncan, Jr., recently held its first hearing to highlight the importance of freight transportation to the U.S. economy and what challenges there are to improving the efficiency and safety of transporting goods throughout the country.

The Panel heard from witnesses representing the spectrum of freight transportation – aviation, maritime transportation, highways, and rail – as well as labor. The heads of FedEx, Norfolk Southern, Werner Enterprises, the South Carolina Ports Authority, and Transportation Trades Department testified.

Fred Smith, Chairman, President and CEO, FedEx Corporation: “Intermodality allows transportation services to be offered to American customers in the most efficient way, providing transport products that vary as to speed, price and mode. For intermodality to work, we need infrastructure that allows us to make the most out of the transportation options in a sustainable manner.

“Within the U.S. and around the world, air cargo moves shipments that are compact, perishable and that have a high unit value – goods that need to be there now. Today’s air cargo moves both the tablets that consumers simply want now and the vaccines that people desperately need now. International air cargo, including air express, is a $78 billion business. It transports 35% of the value of goods traded internationally, worth some $10 trillion, but only 2% of the tons moved. Air cargo is a critical part of the airline business, which is part of a value chain that globally supports 32 million jobs and $3.5 trillion of economic activity.”

Charles Moorman, President and CEO, Norfolk Southern: “For every revenue dollar, railroads return 40 cents to infrastructure. From 2010 through the end of this year, Norfolk Southern alone will have reinvested 7.5 billion dollars in private capital. Industries, jobs, and taxes want to go where the railroad is. In the last decade, 1,021 new and expanded facilities located along Norfolk Southern rail lines, representing 28.7 billion dollars in customer investment and generating 48,000 jobs. That’s just one railroad. What an incredible incentive to support railroads everywhere.

“My recommendation is find sensible ways to allow the private sector and partners to invest in and build the projects that will serve the economy of the future. The longer it takes to steer through regulatory hurdles, the longer we wait for economic growth. Fix regulations so that they enhance safety, increase productivity, and encourage investment.”

James Newsome, President and CEO, South Carolina Ports Authority: “The container shipping industry has been instrumental in the significant growth of globalization over the last 25 years. There are at least fifty ocean carriers who transport containerized cargo between U.S. ports and ports in foreign countries.

“Understanding that the U.S. port system and container shipping operations are a vital support component of our nation’s freight transportation systems and despite the investment at the federal, state, and local level, the federal harbor system has not kept pace with the dramatic increase in size of ships. I would note for the panel that foreign ports are widely recognized to have more capability in this regard than U.S. ports.

Derek Leathers, President, Werner Enterprises: [speaking in reference to the multimodal transportation logistics system]: “It is a complex array of moving parts that provides millions of jobs to Americans, broadens the choices of products on store shelves, and creates new and expanding markets for U.S. businesses. Highways are the key to this system. Trucks move 68% of our Nation’s freight tonnage and draw 81% of freight revenue. In addition, trucks move $8.3 trillion worth of freight each year, nearly 60% of the U.S. economy, and the trucking industry is expected to move an even greater share of freight in the future.”

“The highest priority should be given to bottlenecks on the Primary Freight Network. A study for FHWA (Federal Highway Administratio) identified the highway bottlenecks that cause the greatest amount of delay for trucks. Based on the agency’s estimates, ATA (American Trucking Association) calculates that these bottlenecks cost the trucking industry approximately $19 billion per year in lost fuel, wages, and equipment utilization. The study estimated that highway bottlenecks account for 40% of congestion.”

Click here for more information from today’s hearing, including testimony, video, and more background information.