Our trade partners our biggest ones, canada china mexico, are spending two to five times more than that on their infrastructure. And it cant be just one mode that were focused on when we talk about funding infrastructure. We have to look at all modes and we need to make those modes work better together. Rail, truck air and water are today the key components of the Global Supply chain. The Global Situation is getting worse in a lot of respects, but we have the opportunity to take advantage of whats going on internationally in the economy. The coalition for americas gateways and trade corridors ask congress to take the following steps in the upcoming surface transportation authorization. First, we would like you to establish a Freight Program containing dedicated and flexible funding. Freight should not compete with other mobility needs. Its integral to other mobility needs. Freight movement occupies a special place in our Transportation System as the elements supporting commerce competitiveness and that allimportant word, jobs. We should have a dedicated funding such as a Freight Trust Fund that is committed to stoking our economic engine by predicting swiftness reliability and speed at which our goods are moved. Second, funding at a minimum of 2 billion a year, a Freight Program. Programs such as a Grant Program is needed to fund certain projects that need certain criteria to advance economic goals of this country. By prioritizing projects, we can identify important Public Benefits as well as nonfederal support. A 2 billion Grant Program could leverage many times that amount in private investment in infrastructure. Third, ensure robust Public Investment in all modes. Where Public Benefit is derived Public Investment must be made. Often public assistance is needed to close the funding gaps. Examples are high grade rail access existing transfer facilities, tunnel and bridges for port access and bordercrossing capacity and enhancements. Finally, modify the National Freight transportation policy to make it multimodal. Create an office of intermodalism in the d. C. Office and give it the attention it needs in this country to keep our economy healthy. Thank you. Thank you very much. We will begin with a first round of questions, five minutes. I will start. Mr. Bessac you talked about competing in a Global Market and the effect that has. Being with cargill and the emphasis you have with port can you tell me what percentage of pork in this country goes for exports . Certainly. Senator, pork is much larger than beef, about between 20, 25 depending upon the year and about 10 of pork. Im sorry; 10 of beef is export exported exported. And when you are looking at delays at our ports and you see other countries stepping forward and being able to fulfill some of those orders do you know what share of the market your company has lost and how you see that rippling effect throughout the industry . Well i guess going to cargills share gets to be a bit difficult, but if you look at the u. S. Pork industry or the u. S. Beef industry, we certainly have been the largest exporter around the globe. But as we have dealt with the congestion in the ports, also issues like currency and other forces in play in the market, weve seen a substantial increase just in the past year to countries the eu chile and certainly in the last couple months have seen a substantial decline in our volumes. Do you think that will be a permanent decline . Will we be able to get that market back once these customers are used to having new trading partners . I think any time you disappoint a customer it takes time to build trust back. As i referred to in my testimony, there is a tremendous amount of potential for both beef and pork exports on the global scale. We have a product that the world is looking for in values. I certainly believe the Growth Potential remains, but there is no doubt that weve disappointed our Customer Base primarily japan, korea, and in china, over the last couple months, and that will take some time to rebuild trust. And in disappointing our Customer Base, what has been the loss in dollars to pork producers and the economy here in this country . Well, i dont know that i would be the best one. I think north American Meat institute estimated 40 to 50 million per week. I could probably give you a better example. Just this morning we have about 15 containers of chilled pork product enroute to japan that our customers are either asking, can you guarantee us that it will arrive in a useful form with shelf life or not . And so for me thats about a Million Dollars i have to decide whether im going to put that into a port system and either slow down or potentially close closing being a complete loss. So i hope that gives you some perspective. Yes. Thank you. And miss farmer with bnsf im sure you have to look at the possibilities of a shutdown and a shutdown that would last for possibly an extended period of time. How does that affect the railroad in planning, and what impact does that have on your customers and on your thousands of employees that you have . Sure. So an example of this would be this weekend, we were notified by the pma that vessel gangs would not be working and so the effect that has on our railroad is that in an average week during this period of the year we would be moving somewhere in the neighborhood of 60 trains off of our docks in southern california. That number has been reduced to 30 trains per week. The impact that that has is that we cannot move the freight that wants to move off the west coast, so we will move a limited amount of that freight off the west coast into the interior of the u. S. It will then limit the ability for us to accept freight at our inland hubs so we will have to turn freight away at those inland hubs that wants to move back to the west coast. In addition to this, i talked about our Capital Expenditures that weve made. We are now having to store locomotives and equipment that we have added to our fleet to be able to handle this countrys supply chain growth store that across our railroad because we can no longer continue to send this volume out to the port. When we do that it sits on the main line and it causes Ripple Effects across our network which impact other customers in addition to our intermodal customers. So the impact for us, senator fischer, is we cannot move the freight through it and we are not using the valuable resources that we have. And that impact when you see the freight migrate from the west coast, what impact does that have on a local community . Absolutely. You know, i think when we look back at history and we know that during 2002 freight has permanently migrated around away from that to canada, to mexico. And we know that because of that the local freight is not ending up in those communities, and additional expenditures need to be made somewhere else when a port is there that could be used for that freight to be moved through the country. Thank you very much. Senator blumenthal. Thank you madam chair. There seems to be no doubt among any of our Panel Members that solving this threatened impasse or crisis on the west coast is necessary to americas near term and longer term competitiveness, is that correct . But moving on to the broader issue, let me go to mr. Brewings excellent testimony about our ongoing failure, and it is a kind of slow motion implosion of american competitiveness, the ongoing spending of 2 on Infrastructure Investment which is compared to 9 by china, 8 in india 5 in europe, even in mexico 4 . And it extends not only to roads and bridges which are crumbling and decaying and dekrepcrepit, but also our infrastructure as simple as railroad crossings. How in new york just days ago we saw the consequences of possibly we dont know the causes yet but possibly a rail grade crossing that could have been made safer and could have prevented the deaths and injuries that occurred there. The fact of the matter is that there are more than 2,000 crashes and collisions every year at our rail grade crossings causing more than 230 deaths and more than 700 injuries not to mention the economic costs of those collisions, which are very difficult or impossible to calculate. Thats just one example of our failure to invest in infrastructure. So let me ask you, as to the 2 billion that you recommend as a fund or investment, would it make sense to do it through a Public Financing authority or Infrastructure Bank such as has been proposed and advocated by myself, other members of this committee, a very bipartisan proposal that would make available not just 2 billion but very possibly more . I think the concept of a set aside through a public Infrastructure Bank, broader utilization of public and private activity bonds along with some other finance mechanisms, i think we need to bundle these together. I think anything that costs a lot of money these days is going to take more than one source or resource to make it happen. Back in illinois we dont like to talk about gas tax, but we think in illinois to solve some of the state road and infrastructure problems a gas tax is something we should be looking at. But i do believe that loan guarantees, broader use of some of the existing bonding programs, tifia and riff, i think both would help in meeting this demand that we have. And i do believe that the multiple solutions are going to be necessary. My understanding is that both tifia and riff are underutilized, in fact billions of dollars have been left on the table, in effect, as a result of internal problems highlighted by the Inspector General of the department of transportation very recently . Would you agree . I would agree with that. I think that the time it takes to process going through the preapplication, going through that review, the uncertainty, quite frankly that comes about when there is long delays and Public Financing tools all of a sudden the hot project becomes not so hot a project and they start looking at some other infrastructure pieces to accomplish. Expedited review, broadening of the utilization of those funds and certainly making sure that were using our full complement every year would go a long way to helping us. Creating new programs is fine, but i think better utilization of existing programs makes a lot of sense. And riff, in fact, is a multibilliondollar opportunity that is lost literally every day to american intermodal transportation. I welcome the emphasis that all of our panel have put on intermodal transportation, because as you well expressed it is the transportation Growth Opportunity of the future. Thats right. Do any of you have any differences with the points that mr. Greuling has just made . I would say from being a sets perspective, we certainly have an interest in the supply chain running smoothly. We definitely want to invest in freight. Through an Infrastructure Bank . Again, we dont necessarily want to drive that decision, but we certainly want to be part of the conversation. Thank you. My time is expired. Thank you, all. Thank you, senator blumenthal. Senator deines . Thank you madam chair. I get to represent the state of montana, and in montana our number one industry is agriculture. Its about a 5 billion industry just last year. As we know in ag, you have to be able to export. Like senator fischer, we dont have a lot of oceanfront property in montana i dont think nebraska does, either, so the supply chain becomes critically important. In fact, 80 of montanas wheat is exported. It was nearly a billion dollars in 2013 and primarily through the west coast ports. Were very proud of our ranchers and farmers who not only feed america, they feed the world now. For ms. Farmer i heard concerns certainly from our producers in montana about the backlog we had i think a backlog of nearly 3400 cars past due in the region. Could you tell us what the current status of the rail backlog is now in montana . As i have responsibility for intermodal, i would be happy to follow up with specific statistics around the backlogs. But what i can tell you is that by any measurement on a year over year basis, because of the capital weve invested because of the milder winter that weve had, by any metric that you look at, we are far improved where we were last year. We are making significant progress towards delivering the service that your constituents in the state of montana have come to expect from us and we will continue to make progress along those lines. What i would say is concerning to us is that one of the ways that Agricultural Products get to the west coast as weve discussed, is through the use of containers. It can move in hopper cars or containers, and what i can say is that as we limit the inbound flow of containers into the interior of the country, it makes it more difficult for me to be able to move that product for export. So thats certainly of concern to us. Well i can tell you too, last summer our montana ag producers were not so concerned about the rail backlog it was the issues going off the west coast ports. I used to be a supply chain guy myself, i worked for Procter Gamble for 12 years and was in the supply chain and have an appreciation that the chain is only as good as its weakest link. If we cant get the harvest to market thepn we really cannot realize the Great Potential of our ag industry. The port of vancouver, the port and labor dispute we had going on there that now we see going on in long beach and in l. A. , it is having a great impact in creating dwindling confidence in our Global Markets, the ability for us to deliver. In thinking about our global opportunity as our competitors continue to improve in their products the differentiator for us longterm to win will be in excellent customer service, that when we say the product is going to be there, it will be there. As has been said when we lose as senator fischer mentioned, when we lose the ability to deliver, our customers will look elsewhere to find those same products. In fact, i just got a rather haunting email from the president of an Outdoor Products company that manufactures in montana, they have leading Global Market share. In fact, theyre the only producer of some of these products that still produce in the United States. The rest is producing over in china. So this manufacturer, the president of the company e mailed me about the concern that is going on with the west coast slowdowns, the inhouse unions that are putting their interests, he said ahead of their customers. He said if something doesnt happen soon, we will have no choice but to reduce our current hiring plans and potentially lay off some of our current staff. In your view what if anything, can be done as we look at these challenges right now with these west coast ports being virtually either slowed down or shut down . You know certainly were not party to the negotiations between the pa and the iowu. But its clear to us that there needs to be some speedy resolution of this. The biggest opportunity that i think is in front of us is that it is going to take us several weeks to work off the backlogs that exist once some type of resolution comes to bear. We have an opportunity in front of us, and that is that Chinese New Year is upon us, and that will give us several weeks of reduced freight inbound to the west coast that would allow us to catch up. So i couldnt agree with you more that it is very concerning we need to find a way to be able to resolve this but again were not party to those negotiations, and as such, we just the urgency is really where were focused. Thank you. Im out of time madam chair. Thank you senator daines. Senator klobuchar . Thank you very much. Im losing my voice here, but i wanted to thank everyone from coming, especially mr. Bessac from cargill, which is a great minnesota company, biggest private company in the country. We have worked extensively with them on these transportation issues, so thank you for being here. Im very glad that we were able to pass the user fee increase from the river act, and i appreciated all the work that people who transport on the river did to get that bill done. As you know it was part of the ablec. Can you talk please, about what the increased revenue will mean for locking greats and damates and dams on the river system . Im sorry my expertise is cargo. I know cargill is interested in building a stronger infrastructure so we can compete on the global scale. I would be happy to get you a written answer from our staff. But youre happy we passed the bill to get Infrastructure Improvement . Yes, i am. That was supposed to be an easy question but thats okay. Could you talk about how this works and why its such a problem if youre able to get things out . As mr. Daines points out, we are states not on an ocean. We are on Lake Superior so the port matters a lot. I was once placed on the ocean subcommittee of this commerce committee, and i remember frank lottenberg giving me a note when i was told that i was the only one on the ocean subcommittee not given an ocean, and he said next time just ask for one. Anyway, can you tell us how the river ports depend on this traffic . Absolutely. As you know, the demand for safe, wholesome Food Products around the world continues to increase as population increases. And we need very effective, reliable modes of transportation, whether it be a river, Railroad Truck or ocean vessel to efficiently move those products to their best value consumer. And our farmer and