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Talking Freight

Surface Freight Transportation Responsibilities: Who Does What?

January 21, 2009 Talking Freight Transcript

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Jennifer Symoun:
Good afternoon or good morning to those of you to the West. Welcome to the Talking Freight Seminar Series. My name is Jennifer Symoun and I will moderate today's seminar. Today's topic is Surface Freight Transportation Responsibilities: Who Does What? Please be advised that today's seminar is being recorded.

Today we'll have three presentations, given by John Steinhoff of the Federal Motor Carrier Safety Administration, Jim Pugh of the Maritime Administration, and Barbara Pelletier of the Federal Railroad Administration.

John Steinhoff is the Policy Advisor to the Deputy Administrator of the Federal Motor Carrier Safety Administration (FMCSA). Mr. Steinhoff has had a 33 year career with the Department of Transportation, with virtually all of it focused towards commercial motor vehicle safety issues. During his career, he has held senior leadership positions in both headquarters and the field, including 9 years as Regional Director/Field Administrator based in Baltimore, MD

Jim Pugh is the Director of the Office of Marine Highways & Passenger Services at the Maritime Administration. In that capacity he is responsible for increasing the use of America's coastal and inland waterways to relieve congestion, improve air quality and increase safety. Prior to joining the Maritime Administration, he was Deputy Division Chief of the Domestic Ports Division based at U.S. Coast Guard Headquarters. He was also the Coast Guard Program Manager for Marine Transportation System Recovery. Jim has over thirty years of broad experience in ports, shipping and international trade. This experience includes being the port director in San Diego, Houston and Indiana. He was also president of Americas Marine Express, an innovative containership service between Memphis and Central America. His professional consulting experience in transportation and logistics covers projects throughout the world. He has been an active leader in the transportation industry for many years and has served in numerous leadership positions, including Vice Chairman of the American Association of Port Authorities. He is Certified in Transportation and Logistics, and registered to practice before the Federal Maritime Commission.

Barbara Pelletier is the Director of the International Program at the Federal Railroad Administration (FRA). Barbara has been with the FRA since 1978 holding a variety of positions. Her federal career began in 1973 with the Federal Highway Administration where she was a Social Science Analyst, involved with the highway noise study. In 1975, Barbara joined the now Federal Transit Administration (FTA), formerly known as UMTA. There she held the position of Transportation Representative and was responsible for directing and managing activities related to the capital grant, loan and operating assistance programs. Barbara joined the FRA in 1978 as a Program Analyst working with the Local Rail Service Assistance Program. In 1983 Barbara transferred to the Office of Policy in the FRA. There she worked on various projects including FRA's Strategic Plan, the Customer Service Program, and Operation Respond. She was a member of the Secretary of Transportation's Y2K Team, responsible for outreach to the rail industry and she had the opportunity to plan, develop and implement a first time World Railways Congress.

I'd now like to go over a few logistical details prior to starting the seminar. Today's seminar will last 90 minutes, with 60 minutes allocated for the speakers, and the final 30 minutes for audience Question and Answer. If during the presentations you think of a question, you can type it into the smaller text box underneath the chat area on the lower right side of your screen. Please make sure you are typing in the thin text box and not the large white area. Please also make sure you send your question to "Everyone" and indicate which presenter your question is for. Presenters will be unable to answer your questions during their presentations, but I will start off the question and answer session with the questions typed into the chat box. Once we get through all of the questions that have been typed in, the Operator will give you instructions on how to ask a question over the phone. If you think of a question after the seminar, you can send it to the presenters directly, or I encourage you to use the Freight Planning LISTSERV. The LISTSERV is an email list and is a great forum for the distribution of information and a place where you can post questions to find out what other subscribers have learned in the area of Freight Planning. If you have not already joined the LISTSERV, the web address at which you can register is provided on the slide on your screen.

Finally, I would like to remind you that this session is being recorded. A file containing the audio and the visual portion of this seminar will be posted to the Talking Freight Web site within the next week. We encourage you to direct others in your office that may have not been able to attend this seminar to access the recorded seminar.

The PowerPoint presentations used during the seminar are available for download from the file download box in the lower right corner of your screen. The presentations will also be available online within the next week. I will notify all attendees of the availability of the PowerPoints, the recording, and a transcript of this seminar.

We're now going to go ahead and get started. Today's topic, for those of you who just joined us, is Surface Freight Transportation Responsibilities: Who Does What? Our first presentation will be given by John Steinhoff of the Federal Motor Carrier Safety Administration. As a reminder, if you have questions during the presentation please type them into the chat box and they will be answered in the last 30 minutes of the seminar.

John Steinhoff:
Thanks for the opportunity to provide an overview of the Federal Motor Carrier Safety Administration.

FMCSA is a safety regulatory agency who's primary mission is to reduce crashes, injuries involving large trucks and buses. Fatalities injuries and property damage from truck and bus related crashes on our highways cost this nation about $60 billion every year. FMCSA does not have a direct role in directing or implementing freight policy. FMCSA sets safety standards for the motor carrier industry covering areas such as driver qualifications, the number of hours a driver can drive and work, vehicle maintenance, driver licensing, drug and alcohol testing and minimum levels of insurance.

FMCSA is one of 12 agencies within the department and one of 3 agencies within the department that's focused on improving highway safety. We were formed as a modal administration within the Department of Transportation on January 1, 2000. Prior to the year 2000 our programs were part of the Federal Highway Administration. Prior to the creation of FHWA in 1967, FMCSA was part of the Interstate Commerce Commission. FMCSA has about 1100 federal employees that are supported by 600 contractors. We have 825 people in field offices in each of the states, the District of Columbia and Puerto Rico, and the remainder, approximately 275 people, work in headquarters. If you'd like to get more information about the location of our offices I suggest that you visit our website www.fmcsa.dot.gov. I wrote the website address on my very last slide of this presentation.

You'll note that we have 330 investigators deployed around the country. These investigators perform very comprehensive investigations on motor carriers, either truck or bus companies, involved in crashes or exhibiting other unsafe behavior such as having a high percentage of their vehicles declared unsafe during roadside inspections, which are often conducted at weigh stations throughout the country. These investigations can and often do result in significant penalties against the companies that we are investigating.

We also have about 150 border inspectors that are deployed along the southern border with Mexico. They ensure that commercial vehicles entering the U.S. are mechanically sound and the drivers possess required safety credentials. The border states have also deployed about 345 border inspectors at last count.

Within DOT we coordinate our truck and bus safety efforts with other modal administrations including Federal Highway, which as you know, focuses on this nation's highway infrastructure, including size and weight limitations for commercial motor vehicles. We coordinate with the National Highway Traffic Safety Administration which develops the commercial motor vehicle standards that manufacturers of the CMVs must meet. They also develop safety initiatives such as alcohol prevention and safety belt usage by drivers. We coordinate with the Pipeline and Hazardous Materials Safety Administration. They develop the hazard materials regulations which are applicable to the motor carrier industry and which we enforce to the industry. And the Federal Railroad Administration which works with FHWA on railroad grade crossing issues.

I'm not going to spend a lot of time on this Organization chart. We are organized by function which is a traditional structure for a federal agency.

People often don't appreciate the size and complexity of the industry that FMCSA regulates. Here are some basic facts about the motor carrier industry:

  1. There are approximately 715,000 interstate and foreign-based truck and bus companies registered with FMCSA.
  2. Trucking companies operate 8.8 million large trucks.
  3. Trucks carry about 80% of the value of all goods shipped in the U.S.
  4. Within the 715,000 motor carrier population there are approximately 3700 motor coach companies that operate 32,000 motor coaches and each year, motor coaches travel 2 billion-miles transporting over 600 million passengers.
  5. The motor carrier industry employs approximately 10 million people and
  6. FMCSA has jurisdiction over 7 million commercial truck and bus drivers.

There are a large number of foreign based motor carriers that operate in the United States. There are about 23,000 Canadian truck and bus companies that operate in the United States and there are about 7100 Mexican carriers with active authority to operate into the U.S. commercial zones that are along the southern border with Mexico.

Let me just say a few words about FMCSA's jurisdiction. We regulate from the safety perspective the interstate and foreign operation of commercial motor vehicles that weigh more than 10,000-pounds, are used to transport more than 15 passengers or transport hazardous materials in quantities that require the vehicle to be placarded. We generally do not regulate intrastate commerce; in other words, transportation wholly within a single state. However, our state partners apply identical or similar safety regulations to this population under the auspices of FMCSA's the Motor Carrier Safety Assistance Program (MCSAP). FMCSA also applies through the states commercial driver's license requirements for drivers of commercial vehicles with a gross vehicle rating of more than 26,000-pounds or CMVs designed to transport more than 15 passengers. These licenses are often called CDLs and these requirements also apply to purely intrastate operations. I'll say just a couple more words on our partnerships with our states in a couple of minutes.

This slide shows the growth of the motor carrier industry (the red line) and the good progress being made in reducing the rate of fatalities involving commercial rate vehicles (the blue line). In 2007 we met our goal of .175 fatalities per 100 million-miles traveled. We achieved a rate of .170 fatalities. Preliminary estimates indicate that we're going to have a further decline in the year 2008. Note the steady increase in the number of truck and bus companies since the economic deregulation of the industry in the 1980s. In the mid 1980's there were approximately 300,000 motor carriers registered with FMCSA. By 2000 that were about 600,000 motor state carriers and now there are over 700,000 interstate motor carriers registered with FMCSA. Although the world is currently going through an economic slow down, experts are projecting that freight volume will continue to increase over the next 20 years and we expect the motor carrier population to follow that upward trend as well.

In calendar year 2007, 41,059 people died in highway crashes, a drop of 1,583 deaths compared to 2006. These would be all types of crashes. From 2006 to 2007, the number of people killed in large truck crashes declined from 5027 to 4808, which is a 4.4% decrease. The number of people killed in bus crashes declined from 337 to 322, a 4.5% decrease. Since the agency's creation in 2000, the fatality rate for crashes involving large trucks has declined by 13%. While we're pleased with all of these decreases in fatalities, trucks are still over represented in fatal crashes. In 2007 large trucks represented 4% of registered vehicles. They accounted for 7 percent of the actual travel volume on the highways, but when you look at the number of people killed in motor vehicle crashes, 12% died in crashes involved with large trucks. Thus, compared to their prevalence, large trucks are over represented in fatal crashes.

Here is a quick snapshot of how FMCSA uses the funds appropriated by Congress. The key take away here is the majority , 92.5%, of the agency's budget is invested in federal and state programs to reduce large truck and bus crashes.

I'd like to talk just a bit about FMCSA's compliance and enforcement programs. Start at the bottom of this pyramid and work my way up. Given the fact that we have a regulated motor carrier population of over 700,000 companies and keeping in mind that we only have 330 investigators, visiting each company to ensure compliance with the safety regulations is not practical. So, we focus our enforcement resources on the carriers with the greatest risk of a crash. One of our top priorities are new truck and bus companies entering the industry because data show that their crash rates are higher than those of companies that have been in the industry and operating for a long period of time. We are currently conducting approximate 40,000 audits each year and these audits occur within the first 18 months that a company is in operation. We use the data from 3 million roadside inspections conducted annually. Most of those inspections are done by state partners. We combine this information with crash data to identify high risk carriers and we prioritize those carriers for compliance reviews. During a compliance review a federal or state official meets on site with the company's management. We review records and files and other documentation to determine the effectiveness of the company's safety management controls. In 2007, FMCSA and it's state partners we conducted over 16,000 compliance reviews. The compliance reviews may result in penalties for violations. May result in a follow up review on a company; particularly those that received a less than a satisfactory rating. Then potentially, if the violations are severe enough and there's a severe lack of safety management controls, we can issue an out service order which basically shuts down the company.

Technology is an effective tool for improving CMV safety. We are working with the trucking industry to test and evaluate and encourage the use of safety technology such as lane departure warning systems, electronic stability control systems, and adaptive cruise control. Many of the U.S. fleets that have invested in these technologies have experienced great success, with significant reductions in the number of crashes and significant reductions in the costs associated with these crashes.

FMCSA presently is changing the way it does its business. Comprehensive Safety Analysis 2010 or CSA 2010 is a major initiative to improve the effectiveness of our compliance and enforcement programs. When fully implemented, CSA 2010 will allow us to assess the safety performance of many more truck and bus companies, and will also allow us to intervene to address safety problems as soon as they become apparent. We're going to be applying a wide range of interventions from a warning letter to the assessment of penalties. If you'd like more information about this program or FMCSA in general, visit our website.

Over half of all FMCSA funding is provided to our state partners in the form of grants. FMCSA recognizes that it cannot achieve it's safety goals without a successful partnership with each of the states in the area of truck and bus safety initiatives, particularly since a significant number of trucks and buses operate only in a single state. This slide shows the array of grants available to our state partners and these grants total approximately $300 million.

I recognize that I shot through these slides real quick. Should you have any questions I recommend that you visit our website shown on the screen. After all the presentations have been done, if you have any questions I'll be happy to answer them. Thank you.

J. Symoun:
Thank you John. We'll get to the questions after all three presentations. We're now going to move onto Jim Pugh of the Maritime Administration:

Jim Pugh:
I'm going to tell you a part of what the Maritime Administration does in surface freight transportation. The reason I'm going to limit this is because this is a new program that should be of interest to state DOTs and MPOs and other people. It's called the immediate solution and America's Marine Highways. It's the immediate solution to growing congestion and deteriorating air quality in our urban corridors and capacity constraints. The DOT estimates that congestion is now costing the country about $2 billion a year in lost productivity and I'm sure that those of you who live in the major cities experience that on a daily basis when you are going to and from work.

This slide illustrates some of the major rail congestion and bottleneck areas that we're faced with that delay and increase the cost of movement of rail freight around the country. We have a similar situation with truck bottlenecks. What the Marine Highways program is trying to do is offer some alternatives for addressing congestion in these areas by substituting a marine transportation system as an extension of the highway and railway network. This is just showing the annual cost of congestion in the various metropolitan areas by size. One of the benefits is the reduction in pollutants, because of the operating efficiency of marine transportation. I have a couple of slides here to show you how inland towing with barge and tugboat compares to railroads and truck. In particular nitrogen oxide and carbon monoxide. In addition to the reduced congestion, there is an improvement potential for the movement of hazardous materials. Many of these hazardous materials are moving through the urban corridors by truck or railroad, where the risk is substantially higher for some kind of accident that will affect the population than moving it by marine transportation. Another benefit of the Marine Highways program! This slide is a little bit dated, as you can tell the crude oil prices have come down to around $80 a barrel. Marine transportation is more fuel efficient and thereby reduces some of our reliance on foreign sources of crude oil and petroleum products. This slide shows you the relative efficiency of water transport compared to rail and truck. In capacity terms, there is a similar situation in that one barge tow could handle 456, 40 foot trailers or 40 foot containers - that would take 228 rail cars or 456 trucks. Where there are opportunities to move a portion of the distance by water, substantial economies can be achieved.

This particular slide is showing you the relationship between our trade and prosperity. The reason this is important is because we -- although we are in a recession right now, we are going to come out of it at some point, and our foreign trade will resume at levels similar to what they were prior to 2007. As trade increases, GDP increases, and they are talking about forecasts that our foreign trade may double by the year 2020. Given the recession causes that to slip for two or three years, it's still significant upward trend. It's putting more and more pressure on our infrastructure, both highway and railway infrastructure, as well as our port system. Water way transportation offers a way to take some of that pressure off by having an alternative mode of movement of the freight cargo, at least deferring some of those infrastructure expansions that are quite costly and sometimes politically not feasible.

So the capacity solution is the marine highways. When there is a waterway adjacent to one of these major interstate corridors or rail corridors, services can be developed that will move cargo from the rail or highway onto water for a portion of that movement and substantially reduce congestion in that corridor, improve the air quality and move it more efficiently that it can by other modes. We are moving only 2% of our domestic freight by highway. Europeans are moving 44% and China 61%. Their highway system is even more constrained than ours. The European community is developing a program now where they're going to actually provide a rebate of 100 Euros to truckers if they use ferries for all or a portion of their trip in the European community. This is just a map that illustrates America's Marine Highways. It's all our coastal waters, the inland waterways, the intracostal canals and the Great Lakes. Services are operating and more are being developed all the time, but we need to work closely with the state DOTs and MPOs so that they recognize that this is an immediate solution to some of their problems. In fact, just recently a couple of new container on barge services from Norfolk to Richmond, Virginia and Brownsville to Manatee started. Both of those services are taking a significant amount of truck traffic off of the interstates in those traffic lanes. The Marine Highways program is a new program. It is the result of the Energy Independence & Security Act of 2007. The program currently has an interim rule out for a comment period that ends on February 6th. We're also seeking recommendations from public entities, either state DOTs, MPOs or municipal governments for corridor designation. The Secretary of Transportation will make those designations. Once the corridors are designated, we'll put a call out for Marine Highway projects to be applied for. When those are approved, the Maritime Administration will work closely with the project proponents to make sure that we can support them through all the federal efforts, whether that be trying to develop funding for them or working with them to expedite permits or develop a market. Our program is also responsible to identify impediments and solutions to marine transport. We are in the process right now of establishing Marine Highways Advisory Board, which will be a committee that will look at what impediments there are, such as the harbor maintenance tax on domestic water transport, and what the potential solutions to remove those impediments are so that we can work with Congress and the Administration to see if we can provide a level playing field and maybe some incentives to help induce some of the cargo that's moving domestically to move on the Marine Highways system. That's pretty much an outline of the program. The interim final rule comments are due by the 6th of February. We will then review those comments, make whatever changes we need to the final rule and hopefully publish that some time in April. Following that, we'll issue a call for project applications in the Federal Register. As we seek ways to address congestion and air quality and infrastructure capacity in our urban areas, we think Marine Highways can offer, in some circumstances, an immediate solution to congestion, improve air quality, and reduce the cost of maintenance on some of the highway infrastructure. It could also defer some of the capacity that needs to be added if we're successful in substituting water transport in some of the major corridors. That is my presentation. I will be available at the end of the presentation to answer any questions.

J. Symoun:
Thank you Jim. We'll get to questions at the end. We're going to move onto our final presentation given by Barbara Pelletier of the Federal Railroad Administration.

Barbara Pelletier:
Good afternoon everyone. It is a pleasure to be here. My presentation will focus on a general overview of the U.S. railroad industry and the Federal Railroad Administration, what we do and who we are.

Federal Railroad Administration organization. We are headed by an administrator, who is appointed by the President with confirmation. We have five offices under there. The largest of which is our office of safety. The office of safety employs 458 rail safety inspectors throughout the United States. I'm a member of our office of policy and communications. These are the regions throughout the United States as I mentioned earlier. There are 8 regions, each with a regional administrator and deputy administrator. FRA's mission is to promulgate and enforce real safety regulations. We administer railroad financial assistance programs. We conduct research and development in support of improved rail safety. We develop the national rail transportation policy. We administer grant agreements to Amtrak. As such, the Department of Transportation has a seat on Amtrak's Board of Directors that is generally designated to the administrator of the federal railroad administrations. Just some general logistics about the railroad industry. Give you a seasons of it's -- sense of it's magnitude. The U.S. railroad industry has 140,000 plus miles of track. They own 23,732 locomotives. 1.3 million rail freight cars, with a 99 average tons per carload. There are over 186,000 railroad workers, of those 168,000 work for the class I railroad. 2 million-tons of freight carried each year. 32.1 million freight cars are originated. 52.2 million in annual operating revenue with 11. 3% of shareholders return equity that generally has the railroads from around the world very fascinated and interested in how the U.S. industry works. They've not seen such rate of returns on their equity.

This is a map indicating rail density throughout the United States. As you can see coal is our number one commodity and the bulk of our coal originated in Wyoming at the power River coal basin. You can see the heavy flows going both east and west. There's significant traffic moving from the west coast to the east coast.

Okay. In comparison to the rest of the world, the United States carries far more freight than any other railroad, however in contrast, we carry next to no passengers. As you know Europe and Asia, the passenger rail service is very significant. You can see kind of leading the world followed very closely by India and Japan. If you think of the land mass in Japan and the passengers carried versus the United States, you can see where we are not ranking very high in comparison to railroads around the world.

Railroads carry 42% of the market share. Again, this is a break down of commodities carried by the railroad with coal being the number one commodity. The fastest growing sector of carloads in the United States are the container traffic and just this year, I believe the intermodal traffic did out pass coal in terms of volume carried. So intermodal traffic is really the number one commodity as you would have it in the U.S. followed by coal.

This is an indication of the net investment made by the railroads. As you can see the passage is staggered [ Indiscernible: Speaker/Audio faint and unclear] railroad city was privatized to treat only of the regulations -- that commission was also done away with and you've got the railroad. Because of their profitability have been able to invest very well in their own infrastructure.

U.S. rail staffing again, as a result of the staggers act has dropped phenomenally through the past few decades. Productivity per rail employee has increased phenomenally. This is a tribute to new technology and actually here is a graph of that. I jumped ahead of myself a little bit. Again, a lot of this is as a result of new technology. Also, the unions are cooperating more with the railroads. Fewer employees are required per train as negotiations pursue, the staggers act freed the railroads far more to compete in the marketplace. Set their rates, work with the unions directly without the government intervention. Rail rates again as a result of staggers, lack of intervention real rates have reduced over the last deck aid.

Intermodalism. This is a little bit older slide. Is second only to coal. Can't say that any more. It has now surpassed coal. Comparison is in 1980, 3 million trailers were originated. Now in 2005, 11 million trailers originated. Of course the advantage of double stacking is you've got one train with a crew of two hauling 200 containers versus the 100 truck drivers hauling 100 double trailers.

This is just a graph indicating the growth in intermodal traffic over the past two decades.

It's a phenomenon we're dealing with in the U.S. is the rapid growth of freight volume. Freight is growing faster than passengers. What issues are we facing in the railroad industry?

Generally a question of congestion and capacity. The diagram on the left shows the -- indicates the truck freight flows, the commodities. The one on the right indicates the rail freight load commodities.

What are we looking at in the future? Freight traffic is expected to double by 2020. The population growth and economic growth mean that domestic transportation system will be everyone further strained. Funding for expansion is not identified. Environmental issues will slow increases in capacity. Something we need to keep in mind when we talk about railroads. Railroads really receive no federal government support, unlike the highway system and the air system.

What are we looking at in terms of freight growth? The rail on the miles have been growing at 3% per year. Intermodal units are grows at almost 5% per year. The tons carried have increased over 2% a year and carloading is also at about 2% per year of an increase.

Railroads are expanding work forces and infrastructure. The rate of expansion is determined by profit. Again, if the railroads are going to expand, they are doing any kind of improvements either through technology, through infrastructure out of their own pocket. The demand for intermodal and coal are key factors. Railroads are reluctant to invest speculatively. Will the demand be there in the future and railroad profits do not justify rapid increases in capacity.

In closing economic strength and trade relationships will increasingly define global influence in the 21st century. And influence can help guide change. The 16th to the 19th century can be considered an age of locational advantage. The 20th century we encountered competitive advantage. The 21st century I believe we're looking at advantage of competitive and collaborative advantage. That concludes my presentation and I'm open for any questions. Thank you.

Questions and Answers

J. Symoun:
Thank you Barbara. We're now going to start off the question and answer session with the questions that have been posted online. Once we get through those questions if time allows we'll open up the phone lines for questions.

You noted that containers have now surpassed coal on the railroads. What measure is used to define that?

B. Pelletier:
I would say it would be probably gross tons. I would have to check that statistic. I'd have to go back and double check that. It's probably tons originated.

J. Symoun:
The next question we have for you is, considering the expected population growth, what is the FRA doing to increase capacity for passengers, i.e. Commuter Rail?

B. Pelletier:
FRA is really not in a position to do very much. Again the railroads are privately owned. Many of the computer rails if they are publicly owned they are generally owned by local communities. We did pass most recently, I guess it was back in November, the new rail safety act was passed. That is a more forward looking act and there is some funding in there to take a look at high speed rails. There are some grant programs, new grant programs for again, local communities. So computer rail is really more a local issue and we look to the locals to propose to us or take on those programs themselves.

J. Symoun:
Okay. Thank you. We're now going to move onto questions for Jim. If you think of additional questions for Barbara, we can always come back to them. Is there any indication how the new Administration views the Marine Highways Program?

J. Pugh:
We see marine transportation as part of that green solution. But until the new secretary gets on board and a new maritime administrator is appointed, we don't know of any change in policy. Basically, this is a win/win policy for everyone because it does address problems that we all share. Congress and air quality. We don't anticipate any change. We won't know that until the new administrator is named.

J. Symoun:
Another question here for you. Could you please elaborate a little more on the European initiative regarding paying trucks $100 euros?

J. Pugh:
The new head of the program for the EEC is the former Transport Minister from Portugal and he feels that the regulatory structure has not resulted in enough use of the water ways and they continue to have increasing congestion problems on their highways, so he' trying to provide -- he's trying to provide a tangible incentive to all the truckers in the EC to use ferries and they have several services available over there. In fact, a little bit more than we have in the U.S. because they've been at it for several years. But their ability to expand their highways is more constrained than ours. They can't physically expand them in a lot of areas because they end up having to take whole towns out to do it. Although it's becoming more and more difficult for us to expand our highways in urban areas and it take as long time and a lot of money to do that. We're currently talking anywhere from between 5 to $30 a mile. There's a lot of dollars involved. A lot of time involved and what we're trying to do is say by using where it's available, the marine transportation, we can defer some of that expansion and do it very efficiently.

J. Symoun:
Another question for you. Is short sea shipping a serious alternative for goods traffic along much of the I-95 corridor?

J. Pugh:
We think it's very, very feasible and very cost effective. In fact, short sea services or marine highway services as we're now calling them, probably has a bigger market for domestic trailer transportation than the international container transport. The I-95 corridor and the I-5 corridor are corridors of the future that have been designated by the Secretary of Transportation, and are looking for innovative solutions. We think that short sea shipping, or marine highways, is one of those solutions that could be implemented immediately and have a drastic impact on reducing congestion on all of those corridors.

J. Symoun:
More questions for you. Let's see here. Given the high cargo carrying efficiency of maritime transportation, what are the causes for such low marine domestic freight market share -- i.e., only 2%? Are there important causes that the Marine Highways Program will not be able to address?

J. Pugh:
Well, I think the traditional problem for marine transportation, if you are talking about high value goods where the inventory costs are substantial they may not be susceptible to taking a form of transport that could be a day or two longer in terms of total transit time. But I think with the problems that we're facing in the urban areas with congestion and capacity of our infrastructure, the average speeds of highway transportation are being reduced every year because of the delays that are incurring. The time differential between water transport and other forms of surface transport are not as great anymore. I still think in particular very high value cargoes, inventory carrying costs is going to drive their supply chain design. But for medium and low value cargoes, the inventory carrying cost would be $20 a day. It's not significant enough to cause people not to look at transport as an alternative.

J. Symoun:
Okay. Another question. Was Hawaii a candidate for the Marine Highways program? They seem to recall the criteria to be excluded.

J. Pugh:
Alaska is not excluded. It's been very successful and in fact, provides about the only way to get to some of the islands that they serve. But all of the states in the United States and the U.S. territories, including Puerto Rico and Guam and American Samoa and the Virgin Islands are eligible for the Marine Highways program support.

J. Symoun:
Just to clarify you said Alaska now, but were you referring to Hawaii?

J. Pugh:
Both.

J. Symoun:
Would there be any initiative to revive some of the unused canals in the US or are we strictly developing the major river systems to handle traffic more effectively?

J. Pugh:
It actually has been significant effort to rejuvenate the Erie Canal for commercial traffic in the last year, and they're making substantial progress. I don't think they'll be physically expanding the canal, but it now viewed as an alternative way to move cargo across New York state. Most of our effort is focused on the inland water ways, the intracoastal canals that we have, as well as the coastal waters that offer the ability for trailerships and high speed ferries to offer competitive service to highway and rail on those corridors.

J. Symoun:
We're going to move onto questions for John now. John do you have truck or bus crash data broken down by state?

J. Steinhoff:
Crash data comes in from the states. I don't know to what extent it's broken down to crash location in our data systems. Perhaps the questioner could shoot me an email with their name and an email address and I will have one of our data experts who work with the crash data information get back in touch with them and let them know what is available. I'm sure it's available at the state level but when it's accumulated at the federal level I'm not sure if we're getting the crash location information as well.

J. Symoun:
We have a second similar question asking about the crash location. Please email John for further information. That's all we have for John right now. If you can think of anything else for him please type them in.

We have a few questions that can go for more than one presenter. It looks like it will be for both Barbara and Jim. How do you integrate and plan for current and future conflicts in rail bridge openings for higher rail usage for both passenger and freight and increase usage of marine corridors by marine freight and recreational boating? I'll let either of you jump in on that one.

B. Pelletier:
I'll defer on that one.

J. Pugh:
I'll attempt to answer it. Basically, marine highways as an extension of the highway and railroad networks only works where there's an adjacent water way. Certainly when we are doing our planning for development of the domestic transportation system, we need to think about the marine alternative, particularly in high volume corridors where a substitute service could come in using existing or potentially new facilities to transfer cargo to either a ship or ferry or barge and tug combinations. One of the things that we've tried to encourage the MPOs to do is to look at what the volume of traffic -- truck traffic in particular is in major corridors that run adjacent to either the waterways or the coastal waters. See if there might be enough volume there to support trailership or container on barge services that would allow them to have some breathing room before they have to expand the highway system through some of the urban corridors. The other part of it is it's a pretty substantial decrease in maintenance costs if you can remove some of the truck traffic from both the U.S. and interstate highway systems in these urban areas. That is a calculation that has to be done locally by the state DOTs or the MPOs based on their topography and cost of maintaining the highways, but it is a pretty substantial reduction if you are reduce the volume of truck traffic.

J. Symoun:
Thank you. The next question is for Barbara. I understand rail is nearing capacity. Do you have to reduce freight capacity in order to increase passenger rail availability?

B. Pelletier:
That's a good question. We're really not at that point yet. The railroads -- first of all we're not particularly looking to increase passenger rail availability at this point in time. There is a proposal out -- actually it came from congress man might go looking for basically an idea of concept -- concept ideas for high speed rail projects in the United States. These again, this is just a request for concept papers, but I don't know if there is any plan directly underway to increase passenger service at this point in time. Now, again, the bigger question is the capacity for the freight railroads and they are looking at technological innovation to help improve capacity from that perspective. One at the department of FRA has really encouraged is with ECP breaks which are the electronically controlled pneumatic breaks. The -- brakes. BNS is operating these brakes coming out of the powder River coal basin. That reduces stopping distance and more accurate operation of the trains. So at this point in time, I don't see where we're looking into the impact of increased passenger rail on the freight systems. That's really not an issue yet. But we are looking at this point in time at technological innovations for solving some of the more immediate problems.

J. Symoun:
The next one is for Jim and Barbara. Given the environmental benefits of water and rail transport of freight, is there much being done connecting inland waterway service in the east with western rail service?

J. Pugh:
Currently there is not a direct service but there are some people that are looking at what might be considered a reverse land bridge. As people probably know, the first double stack container service in the U.S. was from Houston to southern California. Because of the movement of import containers from ports of LA and Long Beach to the Midwest and east coast, there is an opportunity to look at moving those by rail to Texas and putting them on a ship to go to various east coast ports. But these are all niche markets and a lot depends on the volume and type of commodities that are being moved and what type of vessel is employed so that the overall transit time can be competitive with a land bridge rail movement or a combination truck/rail movement.

J. Symoun:
Barbara do you have anything to add to that?

B. Pelletier:
No. I really don't. Again, the railroads are not looking to develop new routes or lines at this point in time. So if you're looking to connect the railroads better to the inland waterways, that really has not been studied yet. Not to say that it's not an absolutely good option and the way to go, but to my knowledge nothing is underway at this time.

J. Symoun:
We have another question for Jim. Do you have any comments on the impact of the Harbor Maintenance Tax on the increased use of the Great Lakes for NAFTA movements?

J. Pugh:
The Harbor Maintenance Tax is an issue we face. Not just the tax itself but the mechanism by which it's levied on domestic cargo. There are several efforts underway in Congress to provide an exemption for domestic cargoes or cargoes that move on our marine highways system. It's difficult for me to forecast whether those will be successful or not, but it certainly is an issue that we face on further development of the marine highways. As I mentioned, it's not just the amount of the tax, but it is the mechanism by with the tax is billed to the beneficial owner of the cargo. In domestic movements, those carriers currently don't have a system by which they can do that, where on the international cargoes is done in the custom brokerage process. It's an issue we're aware of. I'm sure the new Advisory Board will be looking at that and recommending some solutions. Separately, it's been recognized as an issue by several members in both the House and Senate. I expect that there will be a few legislative initiatives in this Congress to try to address that.

J. Symoun:
I don't see anything else typed in at this moment so we'll go ahead and open the phone line for questions. Please give instructions on how to do that.

Operator:
Thank you. At this time if you would like to ask a question from the phone press star one. You will be prompted to record your first and last name. To withdrawal press star two. One moment please.

At this time I'm showing no question from the phone.

J. Symoun:
John, Jim or Barbara, are there any questions that were sent directly to you that I might have missed?

J. Steinhoff:
I had one question here, does FMCSA have a position on the issue of increasing CMV maximum gross weight, i.e., 80000-pounds to 97,000-pounds? I would say that we approach this issue from the safety side of it. A vehicle with a 80,000-pound gross vehicle weighted rating has certain components in the braking systems and the structural capacity to allow it to transport safely that amount of weight. We rely on the manufacturing standards that the National Highway Traffic Safety Administration has developed for the manufacturer. From our standpoint, if you are dealing with a heavier vehicle, we would then expect to see that the vehicle has been designed and manufactured by the manufacturer with sufficient braking and control capacity that's equal to the braking and control capacity of a vehicle with the gross vehicle weight rating of 80,000 or 70,000 or 40,000-pounds. We approach these issues purely from the safe operations standpoint, not the capacity standpoint.

J. Pugh:
There was a question on the chat board there directed to me, asking how a state such as Wyoming could benefit from the marine highway program. Those states and there's six or seven of them that don't currently have waterways or coastal waters adjacent to them, don't have a direct opportunity to develop marine highways. But they still could benefit by adjacent states having a marine highways program that might divert some of the truck or rail traffic from a corridor that would then go into those states that don't have a marine system. That's the only potential benefit I could see.

J. Symoun:
We did have another question come in for Barbara. Can you briefly describe what the Surface Transportation Board does and how it relates to FRA and its programs?

B. Pelletier:
I'm not the absolute expert on the Board and there are others who are. I can answer that question generally and if I response is not satisfactory who's asking the question if you shoot me an email I can get you more details on that. With the surface transportation board does is it does hear cases presented to it from the railroad sector. For instance, right now, there's a case to acquire a line that runs around Chicago by Canadian railroad or the EJ and E, I believe, to acquire this line. What FRA does is we absolutely do review the case and we provide input or comments to the surface transportation board. We do not have a say in what they do. We merely provide to them an analysis of the project from our perspective. I don't know if that answered your question appropriately. If not, I'd be more than happy to take an email and get some further details on that for you.

J. Symoun:
Did I miss anything for you Barbara?

P. Pelletier:
There was one also very similar type issue -- well -- not similar, but let me get up to it. This came from a gentlemen in Indiana DOT. His question is rail congestion is prominent in Chicago provide incentive for the class one railroads to define or develop routes to by pass Chicago? Again, if you would send me an email I will get you details on that. There is a case before surface transportation board right from for exactly that. I believe it's the EJ and E but I don't want to say for certain. I'm really not involved in this case. I should know more about it is doing the analysis on it but I don't know off the top of my head an I don't want to give any incorrect information. If you would shoot an email to me, I will get you some of the particulars of that case currently before the FCB. Which is exactly supposed to do that, relieve some of the congestion going through Chicago. Talking about developing a loop, a bypass route. There are a lot of issues regarding an environmental study. I do believe it's very close to a decision by the FCB and get more details on that and share those with you.

Operator:
We do have one question on the phone. Dave your line is open.

Question:
Hi. This is Dave. I'm with the Surface Transportation Board and I did want to respond to the question about interface between rail and water. Between the western rail carriers and the water carriers. I think the answer was kind of given from the perspective perhaps of contained and the marine highway. There is a whole other aspect here. There is considerable goods movement moving by rail and transferring to water and vice versa all up and down the inland water ways. Primarily it's coal coming out of the powder driver pay -- powder River pay sin and there's also grain which is going all up and down the River. Fertilizer and chemicals and other bulk commodities. There is a lot of interface between the two but no there's not a lot of container movement.

J. Symoun:
Thank you for clarifying that.

Operator:
One moment. We have one more.

Question:
Hello. I have two questions actually. I have one for Mr. Steinhoff. Could you give a description of the programs on the second to the last page of your presentation?

J. Steinhoff:
The MCSAP program provides reimbursements to the state for personnel and equipment costs associated with roadside inspections, compliance reviews, new entrant safety audits, public education, data improvements, and traffic law enforcement related to commercial motor vehicles. We are in a continuing resolution right now, but the '09 request before Congress is $209 million. This is an 80/20 matching grant.

The next one is border enforcement grants. These are to the border states to help ensure that the motor carriers operating into the United States from either Canada or Mexico are in compliance with the safety regulations. The requests in '09 is 32 million. FMCSA may reimburse States for up to 100% of approved eligible costs.

Commercial driver license improvement grants. Earlier, I spoke briefly about the commercial driver license program. This is a grant that's available to improve state CDL programs. The request for '09 was $25 million and that's also 100% money for eligible state costs.

Commercial Vehicle Information Systems and Networks (CVISN) is basically a mechanism to encourage the states and motor carrier industry to develop and deploy electronic information systems and communication networks, with an overall goal to improve the quality, timeliness, and access of motor carrier safety and credentials data alongside the roadway. It's real-time. The '09 request is for 209 million and it's a 50/50 matching grant.

Performance and Registration Information System Management (PRISM). PRISM links Federal motor carrier safety information systems with State commercial vehicle registration and licensing systems. Basically it's a system to ensure that companies that have been declared unsafe and placed out of service by FMCSA lose the ability to license their CMVs through a state licensing agency. The request for '09 was $5 million and that's 100% money for eligible state costs.

Safety Data Improvement grants. Helps improve the accuracy and completeness and timeliness of commercial data. Obviously the more information that's available on a company's actual on highway performance and the quicker that information is brought together in a single database, it allows us to direct our limited resources more effectively to the companies that need the attention. The request for '09 is for $3 million. This is an 80/20 grant.

Commercial Drivers License Information System (CDLIS) Modernization Grants: CDLIS is a network through which the various State licensing agencies communicate information regarding CDL driver violations and driver status. This is a modernization program that's been authorized by SAFETEA-LU. The request for '09 is for $8 million. This is an 80/20 matching grant.

Question:
What I wanted to know was at one point Wyoming had Amtrak that went across the south earn part of the state. We have been told that that particular rail line since they took Amtrak off and now it's been that particular line would be no longer suitable for passenger rail traffic. I was just wondering if you have any information on that throughout the nation and if that sounds like a reasonable statement? Also, if you could repeat again the type of braking system that's used in the Powder River basin area?

B. Pelletier:
I'll answer the easy question first. The new braking system, it's ECP, electronically controlled pneumatic brakes. Those are being used elsewhere. I believe CSX has them in use. I think CSX and BNSF are the two utilizing those at this point in time. Now with regard to the rail line in Wyoming and it's conversion or remove sounds like of passenger service to freight, exclusively and then you're saying the line is no longer fit for passenger service, If he's still on, there's gentlemen by the name of Joe Connelly from the FRA. He's one of our safety inspectors. I am not as familiar with the intricacies of classifications and what a line really needs to qualify for certain operating speeds and like. It is a very detailed question. I'm wondering if Joe is interest in responding. I know this is not his expertise area but he may have a better response for you in regards to the actual differences in safety requirements passenger versus freight operations. If Joe is not there, email me and I'll get an answer to your question. But maybe Joe can pop in at this point and shed a little more slight on that question for you.

Joe Connelly:
A lot may have to do with train control. Speeds are regulated by the engineering standards for the track. Also by the signaling systems an by the train control systems in use on the passenger trains, which limit speed on some of the leans. Now I -- lines. I have no idea what happened on this particular line. I guess we could find out why that is. If you really want me to, I will call a couple of people that I know and find out exactly what happened out there. But there literally could be myriad of reasons. A lot has to do with capacity. One of the things FRA has set up a pilot project for is re30s sit train control. You probably read about it since the accident in California. Positive train separation which will also increase capacity safety and speeds of trains because we'll be able to know exactly where they are instead of just being able to roughly locate where some of these trans are. I honestly don't know the answer to your question. I can tell you that there could be a ton of reasons for that. I can give you my email address, joe.connelly@dot.gov. If you write to me about that particular circumstance, I promise I'll find you an answer.

J. Symoun:
Thank you Joe. We are almost out of time. We're going to close out for today. I want to thank all three presenters and thank you for all the questions we had there. As I mentioned before the recording and the presentations and transcript will be available online in the next few weeks and I'll send an email when those become available.

I want to bring up the slide on the Freight Peer-to-Peer Program. The Freight Peer-to-Peer Program (P2P) puts public sector freight transportation professionals in touch with experts in the field and provides technical assistance in order to enhance overall freight skills and knowledge. The program is available to public entities, including State departments of transportation (DOTs) and metropolitan planning organizations (MPOs). To learn more about the program or to arrange a peer exchange, or to discuss participating as a peer/expert please visit the Freight Peer to Peer web site.

The next seminar is going to be held on February 18th. We're still in the process of working on that seminar. More information will be sent through the LISTSERV soon.

So with that we will close out for today. Thank you everyone and enjoy the rest of your day.

Updated: 03/28/2011
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