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 among those lines. what i would say is concerning to us is one of the ways that agricultural products get to the west coast as we've discussed is through the use of containers. it can move in hopper cars or containers. and what twi can say that as we limit the flow of inbound containers into the country it makes it more difficult to move the product for export. so that's certainly of concern to us. >> what i can guarantee is last summer, our montana producers were not so produced with the rail back log, it was issued going on at the west coast ports. i used to be a supply chain guy myself. i worked at proctor and gamble for 12 years. having appreciation for the

chain is only as good as its weakest link. if we can't get the harvest to market then we really can't realize the great potential our of agricultural industry. the port of vancouver, the port and labor dispute that we had going on there that now we see going on in long beach and l.a. it is having a great impact in creating dwindling confidence on our global markets, the ability of us to deliver. thinking about our global opportunity an our competitors continuing to improve in their products. the differentiator for us to win in the long term will be excellent customer service. as has been said, when we lose as senator fisher mentioned, when we lose the ability to deliver customers will look elsewhere to find the same

products. >> i just got a rather haunting e-mail from a manufacturing company in montana. they have leading market share. they are the only producer of some of these products that had produce in the united states. the rest are producing in china. so this u.s. manufacturer, the president of the company e-mailed me with regard to the concerns of the west coast slow downs and long shore unions that are putting the interests out of their customers. if something doesn't happen soon, we will have no choice but to reduce our current hiring plans and potentially lay out 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 either slow down or shut down. >> certainly we're not in neck

negotiations but it is 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 back logs that exist once some type of resolution comes to bare. we have an opportunity in front of us that is that chinese new year is in front of us that would allow us to catch-up. so i couldn't agree with you more that we -- it is very concerning. we need to find a way to be able to resolve this but we're not party to these negotiations and the urgency is really where we're focused. >> thank you. >> thank you senator danes. senator kroef. >> nshilre. thank you, i wanted to thank everyone for coming and

caringale which is a great minnesota company, biggest private company in the country and we've worked extensively with them on these transportation issues so thank you for being here. i'm very glad that we were able to pass the user fee increase from the river act and i appreciate the work that people on the transport of the river did to get the bill done as part of the able act. can you talk about what the increased revenue will mean for upgradeing locks and dams in our nation's waterway system? >> senator, i'm sorry. my area of expertise is in pork exports. i know cargale is very interested in building a strong infrastructure so that we can compete on the global scale. i'd be happy to get you a written answer from our corporate affairs staff. >> okay. but you're glad that we passed the bill so we can get more infrastructure improvements.

okay that was supposed to be an easy question. can you talk about why this works and why it is such a problem if you're able to get things out as mr. danes points out, we're not states that are on a ocean. we're on lake superior. i remember frank lottenberg giving me a note when i told him that i was the only senator who didn't have an ocean on the ocean subcommittee. he came back and said next year come back and ask for one. in any case can you talk about how inland states depend more on this river traffic? >> absolutely. as you know, the demand for safe whole wholesome products around the world continue to increase as population increases. and we need very affective reliable modes of transportation whether it be a riff railroad,

truck or ocean vessel to efficiently move these products to their best value suppliers depend upon us to be able to take those crops and move them efficiently and get the best value so we can in turn pay them strong value for the hard work they do raising those crops and life stock. >> thank you. doctor can you talk about the interrelationship with the ports. we do have the lake superior port and the rail and intermodal issue. >> over the last 15 to 20 years, the hours of unscheduled outage particularly objectn the mississippi waterway has increased substantially and agricultural shippers have been finding alternative routes and perhaps the easiest way to see this is

when you look at the port of new orleans share of u.s. agricultural exports it used to be close to 15% and now it is 45%. it is an impediment for products to get products down the river reliably and loaded onto the vessels. and this does create permanent damage. so rather looking at threats of job cuts and not making vaenlt investments, there are actual quantitative facts that can be a assessed here. if a shipment is delayed beyond the calendar year, than the quota for that year isn't made. the importer on the other side of the trade is normally allowed some small growth rate say 2 to 3% but if they don't make their quota the year before, the 2 to

3 growth rate is a supplied to a reliable system. >> exactly. it is going to hurt us competitively internationally. >> mr. grueling, one last question. on public/private partnerships there's exporting of goods to our neighbors to the north and south and bringing in goods from mexico and canada is really important. canada is the biggest trading partner that we have. people don't seem to always realize that. we're having huge problems at the border with delays in places like international falls, minnesota, there's issues that i hope will be solved. we have winds from michigan. on the mexican border, they have decided to do a lot of public/private partnerships, do you think this is a smart way to go because i want to get it

rolled out on the northern border as well? >> we definitely think it's a smart way to go. we're looking at privately built bridges connecting highway with rail highway with water ports knowing that the user will pay their way their fair share knowing that money is gooding invested into that specific instra frurin infra infrastructure. we can't afford to build some of these bridges without private equity. we have a great example on the ohio river of a toll bridge that was built with private equity funding. so it is a good way -- a good approach to these. >> thank you. just to be clear this proj effect is more about the customs -- >> right. >> to try to speed up between

the back and forth with the countries in the new dawn of north america so thank you. >> thank you senator. >> thank you madam chair. thanks for having this important hearing on movement of freight when i think of this issue i think so much of washington state and all the product that's come through on their way to asia. and we have in a short period of time seen something like a doubling in the sides of the ships over the last five years so yes, we have a lot more capacity and we obviously have a rising middle class in asia and they want higher -- they want more u.s. products. so the question is what are we going to do to meet that demand as it relates to improving our mobility board which was chaired by mr. downey. i think somebody from the railroad association at least participated in that. the question is how do we move

forward on those recommendations and would you support a dedicating funding source to freight so that we could raise the importance of why moving this product is so fortunate our economy and infrastructure and that this alone isn't going to get it done. >> are you asking me. >> yes, mr. farmer or grueling. >> certainly we support anything that makes our ports more competitive. we're excited about the -- about the working together of these two companies so we will certainly stand together to work with them. we believe the tiger grants were a good thing that we need to make them more competitive, anything we can do for that we're certainly in favor of that as well. >> senator, our four points with the coalition number one is to eft eftstablish a fully funded

dedicated freight program. we believe that needs to be at least $2 billion a year. this is not a program that's going to pick winners and losers in the transportation field. this money should be spent on what makes the most economic sense in terms of performance for the entire system. we believe that setting priorities on a national scale for the products of national and regional significance is one of the mechanisms to do that but also the establishment of a multifreight office to focus on these multineeds nationally. >> what do you think we need to do to get people to understand this from an either economic impact or some of the things that your organization has done in studying the economic development associated with this? >> you know a lot of what we do at the center and through the coalition is education. you may have seen this brochure that we recently produced

through the coalition. follow that almond. it shows the supply chain from a california grower to germany delivering almond butter. we'll have more of those in the future. i think that helps. i also think that local jurisdictions and state jurisdictions need to look at freight in an international level and in terms of connectivity and look at the whole national system and make sure that they are aware that what we do at the national level and local level interconnect and we really need to make sense of that when it comes to funding. >> did you have something that you wanted to add to that? >> i guess more of a comment. you hear lots of numbers talked about, $2 billion for infrastructure, i go back to the numbers mentioned. if the ports were closed today

it would be $2.5 billion per day to the u.s. economy. and i would submit we're very close, although they are not officially closed. i think we're very close to that at this moment. so i we dids my dment, a wise investment, an expense that the tax payers and consumers are paying today daily because we don't have the free flow of goods. >> well, i think we learned the lesson in washington because we're at the tip of the sphere so that congregs caused so much problems but now we need improvements all along the system. not just there. i think we need to prioritize that we will not only lose the economic impact.

there's an upside but there'sed a down side as well if we don't act as well that people will start going to other ports or start buying from other people as well so we really need to make this investment. thank you. >> i believe we have some more time. i know members have more questions. so we're going to do a second round. take a big sigh here. i'm interested when we look at freight transportation systems and we look at some of the challenges than we have with containers -- where we have the lack of containers to pfmove the product. other members on the panel if you'd like to jump in as well.

>> i will start. i think we've proven that in normal times we have had sufficient containers to move the product that wants to move export. last year we moved 236,000 units of grain in a box back to the west coast. and they are able to scale relatively quickly to meet the demands. what we've been focused on is improving our developvelocity. when we look at the speed with he can create more supply chain in the market if we invest in our infrastructure and have expansion in our infrastructure so we have of a very thoughtful approach to investing so is that we can get the velocity that we need which will generate the capacity for the midwest to be able to have the containers that they need. >> anyone else? >> there was a structural deficiency for the exports which tend to be agriculture large

scale capital goods and energy products. these come from places that not a lot of people live and therefore not a lot of containers arrive full of imported goods. so there's a structural gap that has to be addressed. what i see in the data, i don't think it will be addressed very simply by trying to match or reposition containers. every time you have these conguest shun issues things tend to get paralyzed. we may need to use 53 foot domestic containers and do cross stock like we do with the imports but so that we can press these on with the containers. >> senators the demand is clearly there. empty containers are at a premium in certain locations. in our case we're receiving grain and corn and soy bean mill

from 16 states. so when you think about the cost of that transportation just to get to an empty container shows clearly that we've got this very high demand. really, we can't afford to build more ports. we just need to use the existing ports as efficiently as we can. i think that applies to both solutions and tie it all together with highways and railroads and we have a winning situation. >> that ties in to what i want to ask the doctor with, with maybing our ports efficient. what role do you see for automation. will that make them more efficient and competitive? what success do you see us having in that regard? >> well, i don't think it's possible to operate with the larger vessels coming without

some degree of automation if not eventually full automation. these ships as i had mentioned earlier earlier, they have to be on the water as much as possible not sitting at ports. if you look at an 18,000 tu vessel which is the largest size currently operating, it takes 4.5 days if you can do 35 gross moves an hour on a 24/7 basis. maintain productivity like that without some form of automation i think is impossible. i are yet to see it demonstrated. so we seem to have to move in that direction if we do that, then i do see u.s. ports being able to maintain an ability to compete with foreign ports particularly these to our north and to the south.

>> what is the cause for the shortage of container cars in this country? i will ask this question to whomever or all of you if you want to answer it. >> senator, i think from our perspective perspective, i'm not sure there's a net shortage, i think the real issue is where the empty containers are versus where the demand for the containers is. >> and what accounts for that imbalance? >> well, a lot of it has to do with the system the intermodal system today. we can handle over three million containers at our yard. 1.5 coming in and out. places this down state illinois or minnesota or indiana don't have that kind of inbound capacity therefore, they don't have the available containers to ship out. it's a market balance to some degree. i'm not sure that's fixable in the short term. building more containers is not necessarily the answer and i

would defer to my rail colleague to maybe respond to that. >> senator, what i would say is i don't believe there's a net shortage of containers but how do we efficiently get them into the interior of the country? so with that what the western roads have done is we have found ways to find the ability to load those containers consolidate grain loading around our intermodal hubs around the interior the country. so where there's a surplus of goods naturally made, the majority of dwran thatgrain that gets loaded out or a very large percentage that gets loaded out comes from the state of kansas. so as we draw it to our lodgestics parks we have the empty containers so we have to continue to invest so the velocity is good. so i don't think there's a net shortage. the issue is how do we stay

competitive in order owe get those to the right places in the interior of the country. >> but the ports are just one key to a multimodal -- >> absolutely. >> where rail is absolutely very important and moving a lot of those containers so the right places so we can be here at right time. >> absolutely. >> let me ask you, going back to the infrastructure investment issue, he mentioned this figure of $2 billion, the possible loss of $2 billion if this impasse or crisis continues which would be very, very very unfortunate. but it strikes me as an example of how possibly there are costs to lack of recognizing the importance of investment and smart policy. so what somewhat perplexes me is

why the folks who run our transportation system, including your railroad and others who are here have not been vie hem ent ad voek vie hement advocates of these decisions which will move policy makers including folks who are sitting on this panel to take some action? >> in other words, we would welcome you to be more vigorous advocates for the system that's your responsibility and your shareholders have significant investments in. >> absolutely. we afwraegree from the standpoint that we absolutely have to continue to manage our network, invest in capital expenditures

that make sense going forward. we also want to -- we have a invested interest in remaining engaged in that decision. we believe a national security policy is important in terms of freight so we've been active in terms of policy planning. >> thank you all for being here today. this is a follow-up question regarding infrastructure investment. senator, i completely agree that we need to continue investing if we're going to maintain our global competitiveness. i think did you mentioned some of the roadblocks of proposed export facilities. i was out at one last summer. the gate way specific terminal.

i was standing there from a member of the rail union from montana and a tribal member from montana that would benefit from expanded exports. we see both jobs as well as tax revenues that would be created yet it is delay after delay after delay in trying to get this port built. it is sitting in between two ports. it is zoned properly. it is environmentally sound. how are we going to everinfrastructure investment with these endless delays but i am looking for help here here. >> well, i would say senator we certainly agree. we're working very closely as you know with the state of

montana to put together our export platform. we like you are anxious to have the ability to continue to grow, to be sfr whether it's around reform, we have talked about that multiple times. and further, skped iegtexpediteing the process, looking at these things concurrently but in general what i would say is we completely agree that we are anxious to export product to continue to grow to improve the competitiveness of the u.s. supply chain both through exports and what we have talked about here as well as imports. >> we talked about the need for the state of art product of it and automation so forth, this proposed port would bely exactly

that. ms. grueling what are your thoughts. >> senator i think like we suffer from multiple jurisdictionitis with five or six governmental units controlling roads and infrastructure, the federal government has the same issues the number of agencies that these projects have to touch. the time it takes to go through environmental review in fact i would comment that we've actually seen some improvement on that under leadership from congress and the administration. it shouldn't take ten to 12 years to do an eis stateand multiple agencies working together on collaboration. we think a national freight office could quarterback these issues especially with the

important freight proj effects. >> i think what's happened with these choke points allowing more option ality to resolve these issues and to ensure that we protect our economic interests and continue to compete globally. thank you, that's all the questions that i have. >> thank you. we've been joined. >> thank you madam chair, thanks for holding this hearing. i appreciate the fact that your subcommittee is focused on this. a reliable and ethe ports are a vital link in that chain. sometimes there are things you can't control but these are sort of self-imposed problems.

really unforced errorsment if you try to quantify this it's having a profound impact on the economy. i know some of you have. i have talked to tysons in my state and south dakota and they shared that they have beef and pork sitting snmtthere. tyson's employs 41,000 people. usda estimates there are 1 million jobs associated with a agriculture in this country. so it has a profound impact all across the country and places like south dakota and places that are dependent on like i said a reliable supply chain. >> outdoor inc., family owned business, receives 95% of its

inventory from west coast ports has been forced to miss deadlines, pay late penalties and sales opportunities, including december which is the holiday peesk season. so now it is a huge drain on the economy and i just urge all sides to come to a resolution in this commute to find a solution as soon as possible. we can't afford to have this drag on and have our economy pay this kind of price. if we can he get this behind and focus our economy and creativity on long term infrastructure and other challenges that all of you have attempted to quantify what some of the financial and economic impacts of this have been but the question is once

this is resolved, how long will it take to unwind this and to get those networks working in an efficient way again where things are sort of normalized? what are we talking about when we get a resolution to this issue. >> i think it's an excellent question. our best estimate is on chilled shipments, it will take at least a month to get back in to a normal flow when we can get those products moving through to the high value markets in japan and korea. at least a month. if you move over to the frozen side, the products that we would east that normal flow and

number continues to increase everyday. >> senator from our perspective at the railroad we certainly stand ready to be able to be help the back log but what i would say is some of the challenges that we have faced with not being able to move straight we have to load to be able owe get the assets. reposition them to the port. be in position to handle that. what i would tell you is we are anxiously awaiting the ability to do that. we will be able to do that. we have a unique opportunity that when chinese new year is coming we will see less vessels headed to the west coast. it would give us an opportunity if there's a speedy resolution to these negotiations that we could use the same to work off

the back log that exists at the ports. >> well, i guess i would just reiterate that this is not something confined to the west coast. having an efficient transportation system is really one of the keys to our advantage, our competitive advantage in the global economy. so when you see this kind of thing happen. we just can't continue to keep this going on and not expect that it's going to have some very detrimental and adverse impacts on a whole range of sectors of our economy and all the jobs that go with it. so madam chair and thank the panel for the great testimony today. >> thank you chairman thune.

>> thank you senator fisher for holding this hearing. and you for drawing attention to this issue. i know a lot of questions have already been passed. the investment on the inland ports, indicates that we've been more import oriented than export oriented: oriented:. would you expand on the significance of the ports in terms of manufacturing. >> most of the growth in trade was on the import side. when we look at the various segments in the u.s. the larger products that were done by rail by highway and at the port level, we were focused on being

able to handle the imports more efficiently. a lot of the dredging was not done because we were having to skprmt see this when you read the cost/benefit analysis was essentially focused on the import side. maybe you can look at it from that side to say well this is an import bias in our investments. if you look at the products where we haven't had funding for infrastructure, you get the same message. that's what i finance in the mississippi waterway. we have seen chronic under funding and a deterioration of the infrastructure there. >> well, i think from the locks to the ports themselves and, you know obviously i would be very focused on the mississippi river because of where i live and

where i have grown up and where we are today but the inland ports also serve a geographic area twice as big as the coastal ports because you serve a geographic area both ways. i hope we can begin to focus more on those ports. the other question i had for ms. farmer i think you all have been trying for a long time to do a california project the california international gateway permitting delays have been a big problem there. iex i'm working on legislation to try to stream line permitting for railroad projects. do you want to talk about the kind of problems you have had trying to serve that market in a better way. >> absolutely. so southern california and international gate way would be the greenest intermodal facility when built. we've been working for a decade when trying to do this.

we face i would say that is indicative of what we see across the country. we really are in favor of permitting reform. i appreciate your leadership this area and extending the environmental view of map 21 would be a great first step and important to shorten the time frames. we're not trying to eliminate the review process but we're asking asking to look at things concurrently as opposed to essentially so it is important for us to move forward the project that's will add capacity to the supply chain. >> may i make a comment on that. >> we're the program managers for the terminal on the savannah river, the report that we gave the board last year.

we started at politicsation process, it would be 13 years before the port could be turn and key operational. and then we have to justify this on the basis of analysis. so i vmd the unfortunate and what volumes will go in to a report that doesn't exist in 13 years. so i think this is an example of how far the process has gotten off kilter. >> either one of you want to comment on that particular topic? >> i would, senator. thank you. what's interesting about this discussion about freight movement and the problems we have in this country, it's all about choke points whether it be a problem at the ports. congestion on the highways or rail way crossing or extended periods of time for a permitted project. those are all choke points.

what's unfortunate is america has a very distinct and unique advantage in this global marketplace and to think that our transportation system is one of the reasons we're being held back on imports and exports is almost criminal is almost insane. there's a lot that we can do better to help with that situation. >> thank you chairman. >> any other questions from the senator? well that this record will remain open for two weeks. during that time senators are asked to submit their questions and answers as soon as possible. with that i thank the witnesses for just a great response here and information that you provided us today. thank you so much. the hearing is closed.

on the next washington journal, representative martha mcsally of arizona, a member of the armed services and homeland security committees will discuss the president's use of force in

the military isis and conflict in ukraine. >> she will talk about her group's call for military assistance in ukraine. >> and john wilson, president of moorehouse college in atlanta. washington journal is live every morning at 7:00 eastern on cspan. you can join the conversation with your phone calls and comments on facebook and twitter. >> here is some of the our featured programs for this president's day weekend. saturday morning at 9:00, live coverage of the savannah book festival with nonfiction authors and books on topics like the disappearance of michael rockefeller, a british company of elephants during world war ii

and former women spies and former senior advisor for president obama, david axle rod on his 40 years in politics and saturday morning, beginning at 8:30. the 100th anniversary of the release of the film of the the birth of a nation, the showing of the entire film filed by a live call in program. sunday at 8:00 on the presidency, george washington portraits, focusing on how they captured the spirit of him. find the complete schedule at cspan.org and call us at 202-626-3400. join the cspan conversation. like us on facebook, follow us on twitter. >> next, a look at some of the challenges facing the nation's

freight rail transportation system. this senate commerce science and transportation committee is cheered by john thune of south dakota. the panel is here to talk about railroad issues as 2013/2014 services are highlighted. rail service is critical to our nation's economy. south dakota farmers scrambled creating grain shortages for the

record breaking wheat, corn and soy bean crops that we've had in our state. they were not limited to the north/central united states, they also extended across the country. thankfully this winter's weather has provided improvements but there's still work to be done. i was pleased that they have joined us for today's hearing. i look forward to hearing from dave john, the chief operating officer, which is the largest class two railroad in the country with over 100 region railroads about the problems and opportunities that they face. from ethanol to coal to agriculture agriculture. the u.s. department of transportation notes that freight rail moves roughly 40 tons per person each year. as a nation we rely on cost-efficient service to move

food and products on a daily basis. it is costly. old tracks and equipment require ongoing main enance and investment. we continue to investment in new sightings and resources with the goal of serving customers. class one railroads face increasing demands for prompt reliable and safe service. 2014 freight traffic increased 5% over 2013 level. we should seek solutions to meet this increasing demand. the federal railroad administration has finalized over 15 new rules since the passage of the rail safety improvement act in 2008. many of the regulations will take affect in 2015. not only is the ptc mandate looming but dot has announced it expects a crude by rail regulation to be published by may of this year.

through the end of 2014, railroads have invested over $5 billion in ptc and they expect to spend billions more in the coming years. they began with other ptc infrastructure but fullchieved by the end of this year. the government accountability office have documented the immense challenges with implementing ptc. the deadline will not be met and is offering a proposeal to insure the benefits are realized. i look forward to working with my colleagues to make sure question set a more realistic implementation time line for this important safety improve improvement improvement. i'm also closely monitoring the crude by rail requirements. i have express mid concerns about the unintended harms that could result from the proposed rule. the tot estimates its proposed

cruel by rail rule could cost nearly $6 billion and acknowledges the rule would increase delays. without question we must improve our nation's rail system but i am concerned about the unattainable deadlines. there are very real impacts when federal agencies set unreasonable deadlines replace over 100,000 111 tank cars. shippers have raised cars about a shortage with the disruption of energy supply transportation if dot finalizes this rule with an unattainable deadline. i look forward to working with my colleagues stakeholders and the secretary of transportation on a realistic time line. while safety k becan be improved we

do not need to have delays like we haved the year t last year and a half. delays burdensome regulations disruption our nation's economy and cost jobs so we must work together to find workable solutions. in addition, we must insure that the service transportation board which is tasked with resolving railroad rate and service disputes and reviewing proposed mergers can provide affective and efficient oversight to the rail industry. this committee has a great amount of work to do in passing re-authorizations. i hope members will bring forward thoughtful solutions as we address these challenges. i'd like to turn now to my distinguished ranking member from florida, senator nelson. >> thank you mr. chairman. and did you know that most of the witnesses are from florida? >> i did not. >> there's one from missouri. >> three of the five and just

like your state is so dependent upon railroads so is so many of our states and my state of florida actually developed around a railroad. it was henry who brought it down south. back in the old days when henry flagler would bring it as far south as a place like saint augustin he would build a hotel which is now the flagler hotel it's part of flagler college in saint augustin, the oldest continued settlement in the united states by the way. we're celebrating 450 continuous years. and then he would move it further south and he'd build another hotel.

the place that the two gentlemen to my right have been many times. >> i would say to senator from missouri how does he know that. >> because i know the pattern of senators who used to come to florida. >> it used to be said back in the early part of the last century, we'd say that all the natives which are called florida crackers of which i am one, they would live off of fish and a alligators during the summer and tourists during the winter as flagler would bring them further south. i will submit my statement for the record. you've covered most of it mr.

chairman. i would say that the u.s. department of transportation estimates that the tonnage of freight moving by rail is going to increase by 88% through 2035 and if we're going to handle this future growth we have to prepare and improve starting today. some recent events highlight the challenge that's we will have to overcome. harsh winters and demands have resulted in delays across the country. rail ways have responded by investing record amounts to expand capacity to expand equipment and to hire more crew. and so i want to hear from our witnesses. do you think the situation is

improving? i want to hear it and i want to hear about the industry's opinion on safety. rail is already one of the safest ways of moving people and goods but there are challenges, positive train control to prevent collisions and enforce speed restrictions first recommended by the ntsb way back in 1969 -- well, this will make short circuit my comments so we can get right into the witnesses. >> thank you senator nelson. i appreciate the role that rail way played.

i have got deep ties as rail ways made their way across the country and in our state of south dakota. we've got a great panel to talk about some of these issued today. thank you all for being here. i have the vice president of the services at csx transportation. mr. dave brown the chief operating officer of wyoming services which serves our state of south dakota. mr. bill johnson the former director of port of miami and former chair of the florida ports council. mr. teal, the multimodal director of the missouri department of transportation and we have mr. chris john who's here on behalf of the fertilizer institute where he serves as president. thank you so much for being here. i look forward to hearing from you. we will start to my left mr. lonegro. >> good morning mr. chairman.

mr. ranking member and members of the committee. i am frank vice president. thank you for the opportunity to appear here. i am here to represent csx and our current view of the state of tran train control in preserving the safe tif of our workers the safety of our communities and operating capacities in the thousands of decisions that we make everyday. since the year 2000 the freight train accident rate has fallen to 42%. through the consistent investment in infrastructure and new technologies. america's railroads invest more than $25 billion annually. for the last six years we've also been investing in a key safety technology known as positive train control or ptc.

ptc is not a single system but rather a large number of subsystems linked together designed to stop a train before certain accidents occur. the act of 2008 requires rail ways to install them by the end of 2015 on main lines transporting passengers or toxic materials. trains traveling beyond the reliable speed, authority trains traversing a misaligned switch or entering a work zone and must be able to determine the precise location, direction and speed of trains, warn train operators of potential problems and stop the train if the operator does not respond. this is not an easy task. such a system requires the creation and i do emphasize creation of highly complex technology that's are able to analyze the many variables that affect train operations. as you can imagine the length of time depends on the train's

speed, terrain weight and length of the train number and distribution of locomotives and number of empty freight cars on the train. we must take all of these factors in to account reliableably in order to safety stop the train. the task of deploying ptc in the united states includes equipping 23,000 locomotives with onboard computers designed to know exactly when to take control of a train and bring it safely to a stop. completely rebuilding 10s of thousands of miles of rail way signaling systems to be able to interact with the ultramodern system. deploying 35,000 sensors to communicate the status of signals to the system. completing a geospatial survey of 60,000 miles of infrastructure and building a system designed for the massive requirements of ptc and back office systems to feed the precise data requirements of ptc. in each railroads system must be

inter interoperable with each of the 40 railroad that's are developing it on their main lines since locomotives frequently operate on the main lines of another. in all of these areas, railroads have made significant progress and overcome significant regulatory challenges for example in 2013 the fcc required all new ptc towers undergo statutory review. this required significant engagement with the state historical preservation sow sites, the native-american tribes and others. resolving this issue delayed the installation of these towers by more than a year. thanks to the efforts of all involved and the efforts of this committee, we believe this issue is now behind us. as of the end of 2014 csx has invested $1.2 billion on ptc and we expect to spend another $300 million this year. the freight railroads together have spent $5 billion to date and expect to spend $9 billion

before ptc is fully operational. it is important to ptc deliver the mandates functionality while also insuring the safety and efficiency of rail transportation. two principal risks illustrate where it is so important that we take the time necessary to do this job right. an immature system could actually create safety hazards. candidly we are still finding critically defects in the software we're receiving from our suppliers. second, an immature system could interrupt the free flow of rail cargo and rail passengers across the united states which would impact our recovering economy. the rail ways remain committed to implementing it as quickly as possible and in a matter that insures both the safety and efficiency of the rail way network. despite our best efforts, p it, c will not be completed this year. thank you mr. chairman for calling this hearing and for your support of a ptc extension.

thank you. >> thank you mr. lonegro. mr. brown. >> good morning mr. chairman. ranking member nelson and members of the committee. my name is david brown. i am pointed chief operating officer in 2012 and oversea the management and operations of the 116 rail ways owned by g and w. this is a company that holds freights in the u.s., australia the netherlands and bellingium. we own two class two regional railroads and three others located throughout the united states. based on the diversity of the holdings, we believe we're able to offer a relevant perspective on the safety and efficiency of the rail way industry. first, short line and regional rail way safety, second, the infrastructure challenges facing railroads, third, the uncertainty created by railroads

associated with the ptc mandate and fourth the importance of this as part of the national freight network. like the industry as a whole g and w have dramatically improved their safety performance over the past decade. we've become an industry leader in safety through an approach that focuses on building a culture of safety.