American Moving & Storage - Orlando, FL
Remarks for James S. Simpson, Administrator, Federal Transit Administration
April 4, 2008
On behalf of President Bush and Transportation Secretary Mary Peters, I am so delighted to be here with you today, to share some perspective on my experiences in both the private and public sector worlds of transportation.
I particularly want to thank Linda Daar for the outstanding leadership she has provided to the American Moving & Storage Association.
And I want to comment Administrator John Hill, of the Federal Motor Carrier Safety Administration, for the tremendous progress he and his staff have made to make trucking safer for everyone. Under John’s able leadership, fatalities involving large commercial trucks are at their lowest level. A record number of roadside safety inspections and compliance reviews have been conducted. Safety belt usage by truckers is up. And more enforcement cases brought against rogue movers.
You know, shortly after joining the FTA about two years ago, I came up with two goals I wanted to accomplish during my tenure:
First, to leave the FTA in better shape than I found it – with forward-looking policies, best practices, and a dedicated, motivated workforce.
Second, I wanted to bring entrepreneurial leadership to the agency – to help make it as efficient and nimble as possible. . . I learned a lot running my own company, and I wanted to bring the best of what I’ve learned into government.
Without question, working here has been the most challenging experience of my life.
As the writer E.B. White said, “I get up every morning determined to both change the world and have one hell of a good time. . . Sometimes this makes planning my day difficult.”
I wouldn’t trade my time at FTA for anything. . .
And if I have learned anything thus far, it is that transportation truly matters to Americans -- regardless of where they live or work, or whether they’re wealthy or less well off.
Whether we’re talking about public rail, highways, aviation, shipping, or even pipelines . . . our transportation infrastructure is arguably the most important set of assets in America today. . .
Just like your own warehouses and truck fleets. . . We’ve got to be good caretakers of these assets. . . To keep them in a state of good repair. . . invest and re-invest in them wisely. . . and find sustainable sources of revenue. . . .
Because whether you look at this as a professional mover -- trying to get your trucks from point A to point B as efficiently as possible -- or as someone who’s just trying to commute to the office or the warehouse every day . . . viable transportation options should be there for you.
But as we all know by now, our transportation infrastructure can’t always live up to this promise. . . And it’s up to all of us to work together to change that.
Just last week, Atlanta’s major newspaper quoted business relocation consultants, who warned that transportation is quickly turning into a regional weakness.
Ironically, way back in 1955, as the government was preparing to build the Interstate Highway System, someone noted in a report to President Eisenhower that. . .
“We are indeed a nation on wheels and we cannot permit these wheels to slow down...”
Well, the wheels have slowed down, in more ways than one.
Let’s begin with infrastructure.
We know the challenge is enormous. Most interstate roadbeds, tunnels, interchanges, and rail stations are 50 to 100 years old. Repairs and upgrades are needed everywhere.
Right now, we’re getting the infrastructure we’re paying for . . . when we should be investing in the infrastructure our country needs and deserves, not just today, but for generations to come.
But this is far easier said than done.
Our asset base is massive, and aging rapidly, while the cost of materials needed to build and repair it has been soaring. . . .
Consider, for instance, that between 2003 and 2007, the price of steel mill products rose about 160%. . .copper and brass,
270%. . .and aluminum and concrete, 125%. . . .
By the end of 2008, construction input costs -- including labor -- are projected to rise 6-to-8 percent annually.
These price fluctuations tend to make big, complex infrastructure projects especially prone to price and performance risks. . .
But we must face these challenges head-on. . . because the price we pay for falling behind on infrastructure needs is too great. . .
The tragic collapse of the I-35W bridge in Minneapolis last year was a grim reminder of just how important it is to keep these assets in a state of good repair. . . The DOT has in fact called on states to pay closer attention to changes in bridge conditions, to avoid terrible accidents like this in the future.
Another challenge – as you well know – is that traffic congestion is growing worse. . . costing us upwards of $80 billion a year in the form of lost hours and wasted fuel.
I know first-hand how painful this is…..
When I was running Victory Van Lines, at my Staten Island facility – a mere 15 miles from mid-town Manhattan -- my vehicles and employees wasted over 4 hours a day traveling from the depot to their job site during morning and evening rush hour . . . a trip that is normally only 30 minutes each way, off-peak.
Who wants to put up with this?
I sure didn’t. . . and I know you don’t.
So what are we going to do about it?
One thing is clear: The old ways of thinking about financing, building, and protecting our transportation infrastructure don’t really work anymore.
For half a century, we’ve relied on the Highway Trust Fund to generate cash for highway construction and other needs. . . .
You all contribute to this fund, professionally and personally, in the form of taxes on gasoline and diesel fuel, tires, heavy vehicles, and more . . .
But the Trust Fund isn’t the cash cow it used to be. . . The fund’s short-term future is unclear and its long-term future is in serious jeopardy. Next year, the fund will run a deficit of more than 3 billion dollars.
Why? One big reason is that gas tax revenues will decline in the coming decades as people drive more fuel efficient cars . . . and as driving growth levels off.
We in the Administration have proposed a temporary fix for the Trust Fund – to transfer a repayable loan from the mass transit portion of the trust fund to the highway account. . . but Congress is months away from resolving this.
In any case, many people are wondering if we should just go ahead and raise the fuel tax. . . .
As you may have heard, a bipartisan Commission on the future of our national surface transportation recently proposed just that -- a 40-cent per gallon federal gasoline tax over the next five years, with automatic increases tied to inflation.
That would more than triple federal fuel taxes from current levels by 2018.
Before increasing the tax burden, we must be good stewards of the funds taxpayers already entrust to us.
And at any rate, it’s not clear a fuel tax hike would fix the problem -- especially as people use less fuel.
What’s more, over the past 25 years, highway funding has increased 100 percent -- thanks in large part to fuel taxes -- yet congestion has increased 300 percent.
Clearly, we’ve reached a tipping point. . .
We can’t expect 20th century solutions to solve the enormous capital infrastructure challenges we face in the 21st century.
I was in New York City recently, where we are building three new subway lines. They’ve got four big boring machines working underground, digging out bedrock to build a tunnel. . .
People look at this and say it’s an enormous effort. . . unprecedented for New York. . . and a huge investment. . .
But guess what? China has 90 of these boring machines in operation.
We need to step up our game here in the U.S. . .
To begin with, we’ve got to stop thinking about transportation as a series of separate, unrelated modes – aviation, trucking, rail, shipping, and so forth. . .
Because when we invest limited federal dollars in transportation, we’re not really investing in one mode at the expense of another. . .
This isn’t about highway vs. rail…or urban vs. rural…
Rather, we need to realize we’re investing in a complex, integrated system that exists to serve its customers in the best way possible.
In other words, think people, not mode.
Awhile ago, Gordon Bethune (former Continental Airlines CEO) and Robert Crandall (former American Airlines CEO) told the Wall Street Journal that the best way to reduce aviation gridlock in the Northeast was to expand passenger rail service.
Can you imagine? Two airline executives proposing the expansion of a competing mode?
What a novel idea – and they were exactly right.
Such mode-neutral thinking is central to a new paradigm in transportation.
Over the years, the transportation industry has paid a price for failing to adopt this paradigm. . .
Consider the lesson of the Pennsylvania and New York Central Railroads. They had marketing myopia. . . They viewed themselves as being in the railroad business, rather than in the passenger transport business. . . And they went out of business because they couldn’t adapt to changing modes of travel.
This is all about learning to think outside the box -- something the transportation industry has not always been very good at, quite frankly.
But that’s changing.
We recognize that we need an honest assessment of how we plan to pay for transportation, not simply how much we pay.
And we recognize that to strengthen our infrastructure, we must find new and creative ways to pay for it.
DOT is addressing this head-on. . .
Last summer, DOT awarded $850 million in federal grants to five cities -- Miami, Minneapolis, San Francisco, Seattle and New York -- to support their bold and innovative strategies to reduce gridlock and raise new funds for transportation.
These cities are working on congestion pricing models for their busiest roadways. . . to improve traffic flows with tolling, better traffic management, and other strategies. . . If all goes according to plan, these efforts will generate $300-to-$400 million a year to fund dedicated transportation needs.
I know that congestion pricing is controversial . . . but considering the alternatives, it’s the right thing to do, to avoid higher taxes. . . more congestion. . . more earmarks that siphon dollars away from discretionary transportation projects. . . and more pollution.
Most economists who study transportation say that direct pricing of road use -- similar to how people pay for other utilities -- holds far more promise in addressing congestion and generating sustainable revenues for re-investment than do traditional gas taxes.
In fact, the Brookings Institution has reported that if we used congestion pricing in ONLY the largest 98 metropolitan areas, we’d generate approximately $120 billion a year in revenues -- while solving the recurring congestion problem in those areas.
We simply must encourage cities and states to partner with the private sector to finance major roadway improvements. . . and to implement open-road tolling systems using technologies that let you pay your toll without losing speed.
Many states, like Virginia, are already taking on this challenge. . . And over 30 major U.S. cities have responded to our call for innovative plans to actually reduce congestion, not simply to slow its growth.
Later this week, the New York State Legislature is going to decide whether to approve an ambitious road-pricing plan for Manhattan. . .
We’re really beginning to see a fundamental shift here.
As more of these plans emerge, it’s vital that Congress, state and local officials, the private sector, and the DOT work together, as partners, to ensure success. . . .
Now, all this talk about congestion and tolling. . . you may think it’s a new problem. . .
But really, once again it’s ‘the more things change, the more they stay the same’. . .
The president of Trans American Van Service said this about tolling back in 1954 -- at the dawn of the interstate highway era:
“Every road is a toll road. Everyone of us, as motor carriers, wants to pay our just share of maintaining the roads we use. But. . . we do not want to pay more than our share, nor do we want to pay the cost of political organizations that eat up tax money faster than an elephant eats hay.”
One other thing I want to mention is safety. . .
John Hill has done a terrific job on this. . . Nevertheless, about a quarter of all fatalities in large truck crashes have occurred on rural interstates over the last 5 years -- even though there’s less traffic on these roads generally.
I want you all to be aware that DOT has recently launched a Rural Safety Initiative to help make your cross-country trips as uneventful as possible. . . .
We’re working with all 50 states, law enforcement agencies, and others on a range of efforts to encourage safer driving, stiffer penalties for drunk drivers, and better emergency response services in rural areas.
After all, reducing gridlock is important – but keeping your trucks, your drivers, and your families as safe as possible is absolutely critical.
Where does all this leave the moving industry?
Your industry is as vital today as it was 50 years ago. . .
In the 1950s, James Knudson, the Pentagon’s Defense Transportation Administrator, said:
“Your industry is unique in that it is…organized to render a personal short-haul or long-haul service to the families of America. And in that regard, you supply an indispensable aid in preserving the continuity of the American family.”
He then went on to say:
“Any service that can…reduce the uncomfortable disorganization that attends the chore of moving…earns for itself a permanent place in the sunlight of American civilization.”
That’s powerful stuff. . . and still true.
However. . . the circumstances you depend on to succeed, have changed – posing enormous challenges to your business.
I’ve often said that transportation is the circulatory system of our economy. We cannot afford to let it fail -- and we should not settle for a system that is second-best behind other nations.
Now more than ever, we need leaders willing to make tough and courageous decisions about what it will really take to build and sustain a world-class transportation infrastructure, to keep our economy moving.
We need market-based solutions as well as government leadership.
And we need a mindset in the business community that is receptive to new ways of paying for -- and using -- our transportation networks.
We cannot afford to push this problem off onto future generations. . .
So let us all pledge that we’re going to work together -- government and business -- to find ways to make our transportation systems better. . . make them sustainable. . . and ensure that your industry can effectively compete anywhere in the country – and around the globe.
I’ll end my remarks by quoting a former president of General Motors—from the company’s heyday many years ago:
“Leadership is the courage to admit mistakes, the vision to welcome change, the enthusiasm to motivate others, and the confidence to stay out of step when everyone else is marching to the wrong tune.”
I have certainly tried to take that to heart at FTA, and I hope all of you do, too.