S.Hrg.119-340

1[Senate Hearing 119-340]2[From the U.S. Government Publishing Office]34                                                        S. Hrg. 119-34056                      NOMINATIONS TO THE NATIONAL7                  TRANSPORTATION SAFETY BOARD AND THE8                     SURFACE TRANSPORTATION BOARD910=======================================================================1112                                HEARING1314                               before the1516                         COMMITTEE ON COMMERCE,17                      SCIENCE, AND TRANSPORTATION18                          UNITED STATES SENATE1920                    ONE HUNDRED NINETEENTH CONGRESS2122                             FIRST SESSION2324                               __________2526                            NOVEMBER 6, 20252728                               __________2930Printed for the use of the Committee on Commerce, Science, and Transportation3132                   [GRAPHIC NOT AVAILABLE IN TIFF FORMAT]3334                  Available online: http://www.govinfo.gov3536                               ______3738                 U.S. GOVERNMENT PUBLISHING OFFICE394063-178 PDF                WASHINGTON : 20264142       SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION4344                    ONE HUNDRED NINETEENTH CONGRESS4546                             FIRST SESSION4748                       TED CRUZ, Texas, Chairman49JOHN THUNE, South Dakota             MARIA CANTWELL, Washington,50ROGER WICKER, Mississippi                Ranking51DEB FISCHER, Nebraska                AMY KLOBUCHAR, Minnesota52JERRY MORAN, Kansas                  BRIAN SCHATZ, Hawaii53DAN SULLIVAN, Alaska                 EDWARD MARKEY, Massachusetts54MARSHA BLACKBURN, Tennessee          GARY PETERS, Michigan55TODD YOUNG, Indiana                  TAMMY BALDWIN, Wisconsin56TED BUDD, North Carolina             TAMMY DUCKWORTH, Illinois57ERIC SCHMITT, Missouri               JACKY ROSEN, Nevada58JOHN CURTIS, Utah                    BEN RAY LUJAN, New Mexico59BERNIE MORENO, Ohio                  JOHN HICKENLOOPER, Colorado60TIM SHEEHY, Montana                  JOHN FETTERMAN, Pennsylvania61SHELLEY MOORE CAPITO, West Virginia  ANDY KIM, New Jersey62CYNTHIA LUMMIS, Wyoming              LISA BLUNT ROCHESTER, Delaware63                 Brad Grantz, Republican Staff Director64           Nicole Christus, Republican Deputy Staff Director65                   Lila Harper Helms, Staff Director66                 Melissa Porter, Deputy Staff Director6768                            C O N T E N T S6970                              ----------71                                                                   Page72Hearing held on November 6, 2025.................................     173Statement of Senator Cruz........................................     174    Letter dated November 6, 2025 to Hon. Ted Cruz and Hon. Maria75      Cantwell from Chris Jahn, President and CEO, American76      Chemistry Council..........................................    8977    Letter dated November 3, 2025 to Hon. John Thune, Hon. Chuck78      Schumer, Hon. Ted Cruz, Hon. Maria Cantwell, Hon. Todd79      Young and Hon. Gary Peters from John N. Ward, Executive80      Director, National Coal Transportation Association.........    9081    Letter dated October 31, 2025 to Hon. John Thune, Hon. Chuck82      Schumer, Hon. Ted Cruz, Hon. Maria Cantwell, Hon. Todd83      Young and Hon. Gary Peters from Ann Warner LLC,84      Spokesperson for FRCA......................................    9185    Letter dated October 27, 2025 to Hon. Ted Cruz and Hon. Maria86      Cantwell from First Officer Nick Silva, President, Allied87      Pilots Association.........................................    9288    Letter dated November 3, 2025 to Hon. Ted Cruz from Paul F.89      Titterton, EVP and President, Rail North America, GATX90      Corporation................................................    9291    Letter dated November 5, 2025 to Hon. Ted Cruz from Donald W.92      Ruhmann, Chief Aerospace Safety Officer, Senior Vice93      President, Global Aerospace Safety, The Boeing Company.....    9394    Letter dated October 29, 2025 to Hon. Ted Cruz and Hon. Maria95      Cantwell from Captain Jody Reven, President, Southwest96      Airlines Pilots Association................................    9497    Letter dated October 28, 2025 to Hon. Ted Cruz and Hon. Maria98      Cantwell from Christopher T. Sununu, President and CEO,99      Airlines For America.......................................    94100    Letter dated October 28, 2025 to Hon. Ted Cruz and Hon. Maria101      Cantwell from David Seymour, Chief Operating Officer,102      American Airlines..........................................    95103    Letter dated November 3, 2025 to Hon. Ted Cruz from Chuck104      Baker, President, American Short Line and Regional Railroad105      Association (ASLRRA).......................................    95106    Letter dated Oct. 30, 2025 to Hon. Ted Cruz and Hon. Maria107      Cantwell from Hassan Shahidi, President and CEO, Flight108      Safety Foundation..........................................    96109    Letter dated October 27, 2025 to Hon. Ted Cruz and Hon. Maria110      Cantwell from First Officer Nick Silva, President, Allied111      Pilots Association.........................................    97112    Letter dated October 27, 2025 to Hon. Ted Cruz and Hon. Maria113      Cantwell from Faye Malarkey Black, President and CEO,114      Regional Airline Association...............................    97115    Letter dated January 27, 2025 to Serio Gor from Brad A.116      Myers, EVP and Chief Operating Officer, Amsted Digital117      Solutions Inc., an Amsted Rail company.....................    98118    Letter dated November 3, 2025 to Hon. Ted Cruz and Hon. Maria119      Cantwell from Capt. Dave Hunt, Vice President of Safety &120      Security, Southwest Airlines...............................    98121    Letter dated October 23, 2025 to whom it may concern from Bob122      Babcock, President/CEO, Livonia, Avon & Lakeville Railroads    99123    Letter dated October 28, 2025 to Hon. Ted Cruz and Hon. Maria124      Cantwell from Sandra J. Dearden, President, Highroad125      Consulting, Ltd............................................    99126    Letter dated October 30, 2025 to Hon. Ted Cruz and Hon. Maria127      Cantwell from Jack Isselmann, Senior Vice President,128      External Affairs and Communications; Past Chairman, Railway129      Supply Institute, The Greenbrier Companies.................   100130    Letter dated February 2, 2025 to Sergio Gor from Ross131      Corthell, Vice President--Transportation, Packaging132      Corporation of America.....................................   101133    Letter dated October 29, 2025 to Hon. Ted Cruz from Kevin134      Cook, President, Modern Rail Capital.......................   101135    Letter dated October 31, 2025 to Hon. John Thune, Hon. Chuck136      Schumer, Hon. Ted Cruz, Hon. Maria Cantwell, Hon. Todd137      Young and Hon. Gary Peters from Herman Haksteen, President,138      Private Railcar Food and Beverage Association..............   102139    Letter dated October 31, 2025 to Hon. John Thune, Hon. Chuck140      Schumer, Hon. Ted Cruz, Hon. Maria Cantwell, Hon. Todd141      Young and Hon. Gary Peters from E. Nancy O'Liddy, Executive142      Director, National Industrial Transportation League........   103143    Letter dated February 5, 2025 to Sergio Gor from Jeffrey T.144      Lytle......................................................   104145    Letter dated October 30, 2025 to Hon. Sam Brebbia and Hon.146      Ryan Cannon from Henry Posner III, Railroad Development147      Corporation................................................   105148    Letter dated November 3, 2025 to Hon. Ted Cruz and Hon. Maria149      Cantwell from Jack L. Todd, Vice President, Public Affairs,150      Trinity Industries, Inc....................................   105151    Letter dated November 3, 2025 to Hon. Ted Cruz and Hon. Maria152      Cantwell from Agricultural Retailers Association, American153      Cotton Shippers Association, American Feed Industry154      Association, AmericanHort, American Malting Barley155      Association, American Seed Trade Association, American156      Soybean Association, International Fresh Produce157      Association, National Association of Wheat Growers,158      National Cotton Council, National Council of Farmer159      Cooperatives, National Grain and Feed Association, National160      Milk Producers Federation, North American Millers'161      Association, Pet Food Institute. The Fertilizer Institute,162      USA Rice, and U.S. Rice Producers Association..............   106163    Letter dated Letter to Sergio Gor from Rick Webb, Executive164      Chairman, Watco Companies, LLC.............................   107165Statement of Senator Lujan.......................................     3166Statement of Senator Sheehy......................................    75167    Letter dated October 30, 2025 to Hon. Patrick Fuchs, Hon.168      Michelle Schultz, and Hon. Karen Hedlund from United States169      Senators: John Hoeven, Amy Klobuchar, Tim Sheehy, Martin170      Heinrich, Bill Cassidy, M.D., Tina Smith, Steve Daines,171      Raphael Warnock, Roger Marshall, M.D., Patty Murray, M.172      Michael Rounds, Ruben Gallego, Roger F. Wicker, Tammy173      Baldwin, Jim Banks, Tammy Duckworth, Joni K. Ernst, and174      Richard J. Durbin..........................................    75175Statement of Senator Baldwin.....................................    80176Statement of Senator Moreno......................................    84177178                               Witnesses179180John F. DeLeeuw, Nominee to be a Member, National Transportation181  Safety Board...................................................     6182    Prepared statement...........................................     8183    Biographical information.....................................     9184Richard J. Kloster, Nominee to be a Member, Surface185  Transportation Board...........................................    15186    Prepared statement...........................................    17187    Biographical information.....................................    17188Michelle A. Schultz, Nominee to Continue as a Member, Surface189  Transportation Board...........................................    38190    Prepared statement...........................................    39191    Biographical information.....................................    40192193                                Appendix194195Response to written questions submitted to John F. DeLeeuw by:196    Hon. Maria Cantwell..........................................   109197    Hon. Amy Klobuchar...........................................   110198    Hon. Tammy Baldwin...........................................   111199Response to written questions submitted to Richard Kloster by:200    Hon. Ted Cruz................................................   111201    Hon. Eric Schmitt............................................   111202    Hon. Maria Cantwell..........................................   112203    Hon. Amy Klobuchar...........................................   114204    Hon. Tammy Baldwin...........................................   114205    Hon. Lisa Blunt Rochester....................................   115206Response to written questions submitted to Michelle Schultz by:207    Hon. Ted Cruz................................................   116208    Hon. Eric Schmitt............................................   118209    Hon. Maria Cantwell..........................................   118210    Hon. Tammy Baldwin...........................................   120211    Hon. Lisa Blunt Rochester....................................   121212    Hon. Amy Klobuchar...........................................   122213214                      NOMINATIONS TO THE NATIONAL215                  TRANSPORTATION SAFETY BOARD AND THE216                      SURFACE TRANSPORTATION BOARD217218                              ----------219220                       THURSDAY, NOVEMBER 6, 2025221222                                       U.S. Senate,223        Committee on Commerce, Science, and Transportation,224                                                    Washington, DC.225    The Committee met, pursuant to notice, at 10:04 a.m., in226room SR-253, Russell Senate Office Building, Hon. Ted Cruz,227Chairman of the Committee, presiding.228    Present: Senators Cruz [presiding], Moreno, Sheehy,229Baldwin, Lujan, and Fetterman.230231              OPENING STATEMENT OF HON. TED CRUZ,232                    U.S. SENATOR FROM TEXAS233234    The Chairman. Good morning. The Senate Committee on235Commerce, Science, and Transportation will come to order.236    Today we will hear from three nominees: John DeLeeuw,237nominee to serve as a Board Member of the National238Transportation Safety Board; Richard Kloster, nominee to serve239as a Member of the Surface Transportation Board; and Michelle240Schultz, nominee to continue to serve as a Member of the241Surface Transportation Board. Congratulations to each of you.242    Before I introduce the nominees, I want to spend a moment243reflecting on the unprecedented impacts the continued244government shutdown is having on Americans lives. Almost a245month ago, CNN quoted a senior Democratic aide as saying that246Senate Democrats would not reopen the Government short of247quote, ``Planes falling out of the sky''. Given the tragic248accident we saw this week, sadly, Senate Democrats seem to want249to put that theory to test.250    Yesterday, Transportation Secretary Sean Duffy, and FAA251Administrator, Bryan Bedford, announced that beginning tomorrow252morning, there will be a 10 percent mandatory reduction in253flights at 40 airports across the Nation. The safety data that254the FAA relies on to keep the system safe was blinking red.255There are too many key staffers calling out because they are256not getting paid and having to save every penny and find ways257to make ends meet.258    Tens of thousands of Americans will have their flights259canceled every single day due entirely to Senate Democrats with260a few notable exceptions, virtually all of whom have voted now26114 times to keep the Government shutdown, and they have taken262the Government and the Air Traffic Control system hostage.263    Air traffic controllers are unpaid, they are frustrated,264and they are fatigued. A plane crashed in Louisville this week,265and the NTSB investigators on scene are not getting paid. The266impacts of this shutdown are real and becoming dangerous. And267understand the reason there is a 10 percent reduction in268flights is the FAA said they could not maintain the airspace269safely at full load. That is the consequence of this shutdown,270and the Schumer shutdown needs to end.271    It is the longest shutdown in the history of the United272States of America. And enough is enough. Now is a time for273responsible leadership.274    Now, I will turn to today's nominees. Let us begin with275John DeLeeuw, a proud Texan of nearly 40 years. Mr. DeLeeuw is276an accomplished safety professional and airline captain who277began his aviation career in the Air Force flying C-130278Hercules planes supporting combat missions in Desert Storm.279After his military service, Mr. DeLeeuw joined American280Airlines as a line captain and first officer in 1991. After 20-281plus years of flying for American, he then led the airline282safety initiatives for more than a decade. He also served as283Chairman of the American Pilots Association's National Safety284Committee, and he teaches aviation safety courses at the285University of Southern California.286    As I have seen from the investigation into the flight--of287the crash of the Flight 5342 near DCA, the NTSB needs288knowledgeable and experienced members to keep our289transportation system safe. Mr. DeLeeuw will draw on his290extensive aviation safety background to investigate accidents291and propose recommendations to prevent future harm. He is,292without a doubt, one of the most decorated and qualified293individuals to come before us. His resume is a perfect match294for the NTSB.295    We are also joined today by NTSB Chairwoman Jennifer296Homendy who is such a regular in this Committee that we may297have to find her a seat on the dais. I appreciate her being298here.299    As she said about Mr. DeLeeuw's nomination back in300September: John has an extensive background in aviation safety301and has worked alongside the NTSB for decades. He often uses302lessons learned to improve safety throughout transportation,303including oil, and pipelines, and maritime. John will be an304excellent addition to the Board, if confirmed.305    Next, we have Richard Kloster to serve on the STB. Mr.306Kloster is a seasoned railroad and transportation logistics307professional with over four decades of private sector308experience. He has worked for several railroads including the309Chicago and Northwestern Transportation Company and the Indiana310Railroad Company. Mr. Kloster also founded his own311transportation consulting firm and served as a board member of312the Railway Supply Institute. If confirmed, Mr. Kloster will313use his extensive knowledge of the rail industry, as well as314his experience working for railroads, suppliers, and shippers315to advance the STB's economic oversight of freight railroads.316    Last, President Trump has renominated Michelle Schultz to317continue to serve on the STB. Ms. Schultz decades of legal and318transportation experience have served her well on the STB.319Prior to joining STB in January 2021, she spent 14 years320leading legislative affairs and legal strategy at the321Southeastern Pennsylvania Transportation Authority, the322Nation's sixth largest public transportation system. As Vice323Chairman of the STB, Ms. Schultz has prioritized engaging with324stakeholders to improve freight rail service quality and325efficiency at the agency. If confirmed, she will continue to be326a diligent, thoughtful member of the STB, working to advance327essential oversight of the railroads.328    But my Democrat colleagues have sought to delay and derail329this hearing based on the President's exercise of his Article330II power. The focus of today should be plain and simple,331supporting transportation safety and rail competition. The332three individuals before us have a breadth of knowledge in333transportation safety and railroad operations and are well334equipped to serve on the NTSB and the STB. I am eager to hear335how each of you will approach your roles in ensuring the336overall strength and safety of our country's transportation337system.338    I now turn to Senator Lujan who is sitting in for Ranking339Member Cantwell.340341               STATEMENT OF HON. BEN RAY LUJAN,342                  U.S. SENATOR FROM NEW MEXICO343344    Senator Lujan. Thank you, Mr. Chairman. Mr. Chairman, as we345get started today, I appreciate your remarks and opening. Just346for anyone that is not aware across America, the majority of347the House of Representatives is Republicans. Speaker of the348House of Representatives is a Republican. The majority of the349U.S. Senate is Republican. The majority leader of the U.S.350Senate is a Republican. The President of the United States is a351Republican. Republicans have the majority. They are in charge.352With majorities and with the gavels comes responsibility. The353good Senator from Texas is the Chair of this Committee because354Republicans are in the majority.355    We had a Governor from the State of New Mexico, a cattle356rancher, his name is Bruce King. And Bruce used to tell us when357folks could not find some solution, he says, ``you know, you358have got to lock people up in a barn, not let him out until359they can come up with a solution to the problem''.360    My friend from Texas understands that. They have got good361cattle ranches down there. They have got good barns down there.362The President of the United States just finished jet setting363around the world and he decided to come back and celebrate with364a roaring 1920s party in Florida. Roaring 1920s. That was a365difficult time in our Nation's history because those parties366were about celebrating folks being broke, people not having367food. And they had that party, and on, I do not know Tuesday,368Wednesday--Wednesday I guess it was, the President had a369breakfast at the White House, which is good, he should have370more breakfasts, but he only invited Senate Republicans. And in371that meeting what was reported is he told them shutdown is not372good on Republicans. He knows they are in charge.373    I certainly hope the President will stick to his words when374he said, ``it is incumbent upon the President of the United375States to prevent shutdowns, to solve shutdowns''. And I376certainly hope that even where there are differences that377people come into a room and do the right thing because everyone378wants this shutdown to end.379    I do not believe my Republican colleagues want to see380insurance premiums across America double either. I really do381not. They care about their constituents the way that I care382about my constituents. And I am certainly hopeful that we will383see some leadership now, bring some people together, get some384breakfast. If they need some New Mexico chili to make it385better, I will bring it. But we have got to make sure that386people come together.387    So with that, Mr. Chairman, with my opening here, Captain388DeLeeuw, Mr. Kloster, and Ms. Schultz, congratulations on your389nominations and for taking time to be here today.390    And before I get to my questioning, I have to say I am391deeply disturbed and frankly alarmed that the Committee is392rushing ahead with this nomination to replace NTSB Vice Chair,393Alvin Brown, who President Trump illegally removed earlier this394year.395    Anyone that looks at the law, looks at the rules396surrounding this, it is plain and simple. The facts are397straightforward. The Senate unanimously confirmed Chair--Vice398Chair Brown last year, and his term does not expire until the399end of next year and the President removed him without400complying with the law that Congress passed. Plain and simple.401    And now, folks are choosing to look the other way and402advanced his replacement even though there is not a clear403vacancy to fill under the law. As the Chair knows, last week my404Democratic colleagues and I, we sent a letter conveying our405strong opposition to proceeding with this hearing on Vice Chair406Brown's replacement. Several colleagues on this Committee co-407signed this.408    As we wrote in that letter, I believe rushing this process409forward, particularly while there is active litigation over410this very issue only emboldens the White House to ignore the411law. And by withholding this hearing Republicans--or sorry--by412holding this hearing, Republicans are just rubberstamping this413behavior.414    So I will again urge my colleagues not to proceed with this415NTSB nomination until the ongoing litigation is conclusively416resolved on its merits.417    Some might say this is all inside baseball, too far removed418from the day-to-day lives of Americans, but these are not just419academic musings. The NTSB, like many other independent420agencies, works every day to help Americans stay safe by421seeking to unravel its independent status, inject uncertainty,422and politicize the Board.423    The administration is undermining the NTSB's ability to424formulate independent safety recommendations that save people's425lives.426    So Captain DeLeeuw, I wish your nomination came under427different circumstances because I acknowledge your significant428experience. I imagine under any other time if there was an429opening, you would probably get unanimous vote out of here, and430off the floor, and everywhere else. Your credentials are clear.431Your qualifications are absolutely clear. This is not about you432at all, sir. At all. I applaud your service, and I applaud what433you have done, what you have achieved.434    Now, that said, given your current employment with American435Airlines, as you know, you will need to recuse yourself from436working on the NTSB's pending investigation into the January43729th DCA midair collision. Captain DeLeeuw, I hope you will438make clear today that you understand the vital importance of an439independent NTSB.440    And out of respect for that independence and the rule of441law, I hope you will firmly commit to stepping aside if the442court declares Mr. Brown's removal to be unlawful.443    In addition to the NTSB, we also have two nominees for444Surface Transportation Board, Ms. Kloster, you will be joining445the Board after a long career in the rail industry.446    And Ms. Schultz, you will be renominated a second term on447the Board, the STB is another independent agency which plays a448critical role in protecting business and consumers from unfair449business practices that harm competition in the rail industry.450If confirmed, you will be responsible for reviewing the largest451rail merger in history between Union Pacific and Norfolk452Southern.453    I would also point out that early this year, President454Trump unlawfully removed STSB member Robert Primus without455cause, in violation of the law. Mr. Primus is also actively456challenging his removal in court.457    For the record, however, I will note that neither of458today's STSB nominees would replace Mr. Primus, if confirmed.459Nevertheless, the President's actions against Mr. Primus only460underscores why we need to have your firm commitment that you461will carry out your duties independent of improper political462influence if confirmed.463    Thank you, Mr. Chair.464    The Chairman. Thank you, Senator Lujan. You know, I would465note that witnesses in court are asked at the beginning of466their testimony to swear to tell the truth, the whole truth,467and nothing but the truth. And one of the most important468elements of that is the second element, the whole truth.469    What Senator Lujan said is correct. It is true that470Republicans have a majority in the House, a majority in the471Senate, and a majority in the White House. Because the American472people voted for Republicans in 2024, they voted for President473Trump. They voted for a Republican majority in the Senate. They474voted for a Republican majority in the House. The whole truth475that Senator Lujan knows well, but that he omitted is under the476Senate rules, funding for the Government cannot proceed in the477Senate without 60 votes. Senator Lujan is very well aware of478that.479    There are only 53 Republicans in the Senate. That means in480order to fund the Government, at least seven Democrats have to481vote to fund the Government. So the phrase, which is facile482used, of well, Republicans control everything, you guys should483fund it is said, deliberately playing on the fact that many484people do not know you need 60 votes to proceed to fund the485Government.486    And I would note Senator Lujan knows that in part because487when Joe Biden was President--this is not a new situation--when488Joe Biden was President 13 times, Senate Republicans joined489with Democrats to pass a clean Continuing Resolution. We could490have done the same thing. When Joe Biden was President, the491Democrats did not have 60 votes. What differed is when Joe492Biden was President, Republicans demonstrated responsibility.493We did not shut the Government down.494    Every Democrat in this body, you can play video after video495of them going on TV intoning, a government shutdown is496irresponsible. It is reckless. It hurts Americans. They all497know that. They have all said that repeatedly. By the way, we498had this situation happen earlier this year. In March,499Government funding expired. And what happened in March, a500handful of Senate Democrats did the responsible thing and they501joined with Republicans in keeping the Government open.502    But then a political problem developed which is Chuck503Schumer, the Democrat leader in the Senate, almost lost his504job. The extreme leftwing of the Democrat party got very, very505angry that the Democrats allowed the Government to open. And506Schumer is very afraid of being primaried from the left. The507election results on Tuesday underscore the grave political508peril Schumer sees from the extreme left in the party.509    So why are we in the longest shutdown in history? For one510reason, for Senator Schumer and Senate Democrats to demonstrate511to the extreme leftwing of their party that they really,512really, really hate Donald Trump.513    Well, we got that point. Every Federal employee who has not514gotten a paycheck got that point. We understand. Nobody will be515confused that my Democrat colleagues are sleeping at night with516a Donald Trump nightlight on the wall. We know their view.517Senator Lujan said: We just need to find a path forward. We518know the path forward. It is the exact same path forward that519we took 13 times when Biden was President. The path forward is520voting to fund the Government and passing a clean Continuing521Resolution.522    The path forward is literally the turn of a wrist. When we523vote on a Continuing Resolution, instead of doing this, rotate524your wrist 180 degrees. That is how we open the Government. We525have had three Senate Democrats show the courage to vote to526keep the Government open. Senator Fetterman, a member of this527Committee, has said quite candidly: This is a Democrat528shutdown.529    For the sake of the TSA agents, for the sake of the air530traffic controllers, for the sake of the flying public, let us531not test that idiot Democrat staffer who told Politico, ``We532will keep the shutdown going until planes start falling from533the sky.'' That is not funny. And I do believe my colleagues on534the Democrat side, they do not want to see that happen. But535every day that they starve the system of the resources it536needs, they increase the chances of a tragedy like that537occurring.538    Mr. DeLeeuw, you are recognized for your opening statement.539540STATEMENT OF JOHN F. DeLEEUW, NOMINEE TO BE A MEMBER, NATIONAL541                  TRANSPORTATION SAFETY BOARD542543    Mr. DeLeeuw. Thank you, Chairman Cruz, Ranking Member544Cantwell, Senator Lujan, and members of the Committee, it is an545honor to appear before you today as you consider my nomination546to be a Member of the National Transportation Safety Board. I547am immensely grateful to President Trump for nominating me as548this is a lifelong dream.549    As a safety professional who has worked alongside the NTSB550for nearly two decades, I cannot think of a greater privilege551than to serve the public at the world's preeminent safety552investigation agency, whose sole mission is to save lives.553    Before I begin, I would like to recognize some of my family554and friends. Though they are not able to be with me today in555person, my wife Kim is watching this hearing online with my556mom, Ruby, in Tucson, Arizona. My son Peter and his wife557Meredith have blessed Kim and me with two grandchildren, Mason558and Mabel. My daughter Julia and her husband Peter recently559welcomed into the world our grandson, Liam. My sister Jane and560my brother Howard also deserve recognition for letting me be561their big brother.562    I would also like to especially recognize my colleagues in563the Safety Department at American Airlines who are also564watching online and have provided me with incredible support565and encouragement. It is a privilege to work with amazing566safety professionals at American and throughout the industry.567    Special thanks to Cedric Wilson, David Seymour, and the568entire American Airline's senior leadership team for their569assistance and backing.570    There are three things I would like for you to know as you571consider my nomination for the Board. First, I am passionate572about safety. I was fortunate to serve our country as a pilot573in the United States Air Force for seven and a half years. In574that time, several of my fellow crew members were killed in the575line of duty flying military aircraft. Many of these accidents576could have been avoided and I was determined to learn from each577of them. In some cases that meant changing a procedure. Other578times it meant improving education and training, but the goal579was always the same, to prevent a similar accident from580happening.581    After serving in Desert Storm, I was hired as a pilot for582American Airlines and I am currently a captain on the Boeing583787 Dreamliner with over 19,000 flight hours. Today, I also584serve as the American Airlines Managing Director of Safety and585Efficiency. Seeking to fully immerse myself in safety, I586volunteered my time and efforts with the Allied Pilots587Association, which represents the pilots of American Airlines.588    Mr. Chairman, I ask that letter supporting my nomination589from the Allied Pilots Association, the Southwest Airlines590Pilots Association, and many others, be included in the hearing591record.592    Second, the NTSB saves lives. As I mentioned, I worked593closely with the NTSB for more than 15 years, and I have594enormous respect for the Board members and staff. As the595American Airlines party coordinator on NTSB investigations, I596know firsthand the efforts and time the NTSB commits to597accident investigations, family assistance, and safety598recommendations. If confirmed, I will be a strong advocate for599implementation of those recommendations.600    As Chairwoman Homendy often says, ``The investigation is601only the first step. Real safety change occurs after602recommendations are implemented and improvements are made''.603    Third, I believe there are opportunities to facilitate604safety information sharing across the various modes of605transportation and bring the different modes together to share606lessons learned. A cross-model approach will further the NTSB's607mission of preventing accidents and saving lives.608    One of the reasons I am here today is the tragic midair609collision involving a U.S. Army helicopter and Flight 5342610earlier this year. The accident site not far from where we are611sitting today. It has been one of the most difficult situations612I have faced in my entire career. I was in the Family613Assistance Center within days of the accident. I saw firsthand614the devastation, the tremendous loss, and the work that the615NTSB did to bring every resource available to grieving616families.617    I am confident the NTSB is doing the same thing right now618in Louisville, Kentucky, as they investigate Tuesday's tragedy.619I offer my sincere condolences to the victims and families of620those impacted by this devastating event. It is our duty621collectively to learn from each tragedy to draw knowledge to622improve the safety of us all.623    If confirmed, I would consider it a great honor and624privilege to serve my country once again. And I commit to625working with this Committee to improve safety across all modes626of transportation.627    Thank you again for this opportunity and I look forward to628answering your questions.629    [The prepared statement and biographical information of Mr.630DeLeeuw follow:]631632    Prepared Statement of John F. DeLeeuw, Nominee to be a Member,633                  National Transportation Safety Board634    Thank you, Chairman Cruz, Ranking Member Cantwell, and Members of635the Committee. It's an honor to appear before you today as you consider636my nomination to be a Member of the National Transportation Safety637Board (NTSB). I am immensely grateful to President Trump for nominating638me as this is a lifelong dream. As a safety professional who has worked639alongside the NTSB for nearly two decades, I cannot think of a greater640privilege than to serve the public at the world's pre-eminent safety641investigation agency whose sole mission is to save lives.642    Before I begin, I would like to recognize some of my family and643friends. Though they aren't able to be with me today in person, my644wife, Kim, is watching this hearing online with my mom, Ruby, in645Tucson, Arizona. My son, Peter, and his wife, Meredith, have blessed646Kim and me with two grandchildren--Mason and Mabel. My daughter, Julia,647and her husband, Peter, recently welcomed into the world our grandson,648Liam. My sister, Jane, and my brother, Howard, deserve recognition for649letting me be their big brother.650    I would also like to recognize my colleagues in the Safety651department at American Airlines who are also watching online and have652provided me with incredible support and encouragement. It is a653privilege to work with amazing safety professionals at American and654throughout the transportation industry. Special thanks to Cedric655Wilson, David Seymour, and the entire American Airlines leadership656team, for their support.657    There are three things I would like for you to know as you consider658my nomination for the Board.659    I am passionate about safety. I was fortunate to serve our country660as a pilot in the United States Air Force for seven and a half years.661In that time, several of my fellow crew members were killed in the line662of duty flying military aircraft. Many of these accidents could have663been avoided, and I was determined to learn from each of them. In some664cases, that meant changing a procedure. Other times, it meant improving665education and training, but the goal was always the same: To prevent a666similar accident from happening--to protect my fellow pilots and the667public.668    After serving in Desert Storm, I was hired as a pilot for American669Airlines, and am currently a Captain on the Boeing 787 Dreamliner, with670over 19,000 flight hours. Working with my fellow team members to safely671fly people and goods around the world has been rewarding and672fulfilling. The connections we enable and the commerce we ensure are673powerful reminders of the criticality of the aviation system. For me,674however, my sole focus is safely flying the passengers who put their675trust in me to get them to their destination.676    Seeking to fully immerse myself in safety issues, I volunteered my677time and efforts years ago with the Allied Pilots Association, which678represents the pilots of American Airlines. I was eventually offered679the opportunity to serve as a manager in the American Airlines680Corporate Safety department where I am currently the Managing Director681of Safety and Efficiency. The teams I lead and support are fully682engaged with our robust and industry-leading safety management system.683    Second, the NTSB saves lives. As I mentioned, I have worked closely684with the NTSB for more than 15 years and have enormous respect for the685NTSB Board Members and staff. As the American Airlines Party686Coordinator on NTSB investigations, I know firsthand the efforts and687time the NTSB commits to accident investigations, family assistance and688safety recommendations. As a result of the Board's investigations and689safety studies, since 1967, it has issued 15,686 safety recommendations690to more than 2,500 recipients, focused on preventing accidents from691reoccurring. Eighty-three percent of all recommendations are ``closed-692acceptable,'' but many others remain open. If confirmed, I will be a693strong advocate for implementation of those recommendations. As694Chairwoman Homendy often says, the investigation is only the first695step. Real safety change occurs after recommendations are implemented--696after improvements are made.697    Third, I believe we can continue to improve and enhance safety698through partnerships and sharing of best practices across the differing699modes of transportation. Airline operators often say that we are fierce700competitors, but we do not compete on safety. I believe that approach701can be industry and modal agnostic. There are opportunities to702facilitate safety information sharing across the various modes of703transportation and bring the different modes together to share lessons704learned. A cross-modal approach will further the NTSB's mission of705preventing accidents and saving lives.706    Lastly, I have observed Members of Congress spend their time707meeting with families struck by tragedy and moving legislation that708makes significant strides in safety, often closing longstanding NTSB709recommendations that were issued in response to these and other710accidents. Thank you for your safety leadership and thank you to the711NTSB Board Members and staff for your expertise and steadfast712commitment to safety, and for your advocacy and guidance over the713years.714    One of the reasons I am here today is the tragic mid-air collision715involving a U.S. Army helicopter and Flight 5342 earlier this year--the716accident site not far from where we sit. It's been one of the most717difficult situations I have faced in my entire career. I was in the718family assistance center within days of the accident. I saw firsthand719the devastation, the tremendous loss, and the work that the NTSB did to720bring every resource available to grieving families. I want to721acknowledge the Transportation Disaster Assistance team and the722families and loved ones of the 67 people lost on January 29th and all723families who have lost loved ones in other transportation accidents--it724is our duty, collectively, to learn from each tragedy, to draw725knowledge to improve the safety of us all.726    If confirmed, I would consider it a great honor and privilege to727serve my country once again and commit to working with this Committee728to improve safety across all modes of transportation.729    Thank you again for this opportunity, and I look forward to730answering your questions.731                                 ______732733                      a. biographical information734    1. Name (Include any former names or nicknames used): John735Ferdinand DeLeeuw.736    2. Position to which nominated: Member, National Transportation737Safety Board.738    3. Date of Nomination: September 10, 2025.739    4. Address (List current place of residence and office addresses):740741        Residence: Information not released to the public.742        Office: Information not provided.743744    5. Date and Place of Birth: Information not provided.745    6. Provide the name, position, and place of employment for your746spouse (if married) or domestic partner, and the names and ages of your747children (including stepchildren and children by a previous marriage).748749        Kim Elise DeLeeuw, retired (spouse); Peter Michael DeLeeuw, age750        35; Julia DeLeeuw Thayer, age 32.751752    7. List all college and graduate schools attended, whether or not753you were granted a degree by the institution. Provide the name of the754institution, the dates attended, the degree received, and the date of755the degree.756757        University of Arizona, 1979-1983758        Bachelor of Science, Business Administration, June 1983759760        University of Arkansas, 1987-1989761        Masters in Business Administration, June 1989762763    8. List all post-undergraduate employment, including the job title,764name of employer, and inclusive dates of employment, and highlight all765management-level jobs held and any non-managerial jobs that relate to766the position for which you are nominated.767768        United States Air Force, Pilot, 1984-1985769770        United States Air Force, C-130E and C-130 H Evaluator and771        Instructor Pilot, 1985-1991772773        American Airlines, Line Captain and First Officer, 1991 to774        present775776        American Airlines, Senior Manager of Flight Safety, 2010-2015777778        American Airlines, Managing Director, Safety and Efficiency,779        2022 to present780781        University of Southern California, Instructor, Aviation Safety782        & Security Program, 2013 to present783784    9. Attach a copy of your resume.785    Attached786    10. List any advisory, consultative, honorary, or other part-time787service or positions with Federal, State, or local governments, other788than those listed above after 18 years of age.789790        United States Air Force, Pilot, 1984-1985791        United States Air Force, C-130E and C-130 H Evaluator and792        Instructor Pilot, 1985-1991793794    11. List all positions held as an officer, director, trustee,795partner, proprietor, agent, representative, or consultant of any796corporation, company, firm, partnership, or other business, enterprise,797educational, or other institution.798799        Allied Pilots Association, Chair, National Safety Committee,800        2018-2022801802        Board Member, American Airlines Federal Credit Union, 2011 to803        present804805        Vice President of Safety, OPES Solutions Group, 2017 to present806807        Partner, Flight Data Monitoring at JH Consulting, 2021 to808        present809810    12. List all memberships you have had after 18 years of age or811currently hold with any civic, social, charitable, educational,812political, professional, fraternal, benevolent or religiously813affiliated organization, private club, or other membership organization814(You do not have to list your religious affiliation or membership in a815religious house of worship or institution). Include dates of membership816and any positions you have held with any organization. Please note817whether any such club or organization restricts membership on the basis818of sex, race, color, religion, national origin, age, or disability.819820        Member, Allied Pilots Association, 1991-2022 (see #11)821822        Member, Lions Club, 2008-2012823824        Member, Parent Teachers Association, Grapevine Middle School,825        2003-2006826827    13. Have you ever been a candidate for and/or held a public office828(elected, non-elected, or appointed)? If so, indicate whether any829campaign has any outstanding debt, the amount, and whether you are830personally liable for that debt. No.831    14. List all memberships and offices held with and services832rendered to, whether compensated or not, any political party or833election committee within the past ten years. If you have held a paid834position or served in a formal or official advisory position (whether835compensated or not) in a political campaign within the past ten years,836identify the particulars of the campaign, including the candidate, year837of the campaign, and your title and responsibilities. None.838    15. Itemize all political contributions to any individual, campaign839organization, political party, political action committee, or similar840entity of $200 or more for the past ten years.841842        American Airlines PAC, $2000843        Allied Pilots Association PAC, $500844845    16. List all scholarships, fellowships, honorary degrees, honorary846society memberships, military medals, and any other special recognition847for outstanding service or achievements.848849        University of Southern California, Certificate, Aviation850        Safety, 2012851852        Chairman's Safety Award, American Airlines, 2015853854        Chairman's Safety Award, American Airlines 2017855856    17. List all books, articles, columns, letters to the editor,857Internet blog postings, or other publications you have authored,858individually or with others. Include a link to each publication when859possible. If a link is not available, provide a digital copy of the860publication when available.861862        Article, American Airlines' Safety Pre-Flight, 2014 (link863        unavailable; subject was on the importance of following864        standard operating procedures)865866    18. List all speeches, panel discussions, and presentations (e.g.,867PowerPoint) that you have given on topics relevant to the position for868which you have been nominated. Include a link to each publication when869possible. If a link is not available, provide a digital copy of the870speech or presentation when available. None.871    19. List all public statements you have made during the past ten872years, including statements in news articles and radio and podcasts and873television appearances, which are on topics relevant to the position874for which you have been nominated, including dates. Include a link to875each statement when possible. If a link is not available, provide a876digital copy of the statement when available.877878        Pipeliners Podcast, Episode 226, What Pipeliners Can Learn From879        Aviation Safety, April 5, 2022880        https://share.google/puHP7Swc2JIrqHeEy881882        ASAP TechOps/ASAP Podcast, Episode 4, Collaboration of the883        Association and the APA with Captain John DeLeeuw, November884        2020885        https://share.google/FavPUBle9fKjTokEZ886887    20. List all digital platforms (including social media and other888digital content sites) on which you currently or have formerly operated889an account, regardless of whether or not the account was held in your890name or an alias. Include the full name of an ``alias'' or ``handle'',891including the complete URL and username with hyperlinks, you have used892on each of the named platforms. Indicate whether the account is active,893deleted, or dormant. Include a link to each account if possible. None.894    21. Please identify each instance in which you have testified895orally or in writing before Congress in a governmental or non-896governmental capacity and specify the date, committee, and subject897matter of each testimony. None.898    22. Given the current mission, major programs, and major899operational objectives of the department/agency/commission/corporation900to which you have been nominated, what in your background or employment901experience do you believe affirmatively qualifies you for appointment902to the position for which you have been nominated, and why do you wish903to serve in that position?904    I have dedicated my entire career to safety, first serving in the905United States Air Force as a pilot, instructor, and evaluator on the C-906130. I then served as a Senior Manager for Flight Safety for American907Airlines, as well as Chief Accident Investigator. Today, I serve as908American Airlines' Managing Director for Safety and Efficiency. In909these roles, I have been responsible for safety data systems such as910Flight Operations Quality Assurance (FOQA), Aviation Safety Action911Program (ASAP), and Line Operations Safety Audit (LOSA) as integral912elements within American Airlines' Safety Management System. I also act913as AA's liaison with the NTSB, FAA, and DOW (Department of War) and914serve as AA's Party Coordinator for NTSB accident investigations.915Additionally, I teach aviation safety at the University of Southern916California.917    Throughout my time at American Airlines, I have developed a close918and collaborative working relationship with NTSB Board Members and919staff. The NTSB has a critical safety mission. It would be a tremendous920honor and privilege to serve as a Board Member and work with my921colleagues on the Board to improve safety in all modes of922transportation.923    23. What do you believe are your responsibilities, if confirmed, to924ensure that the department/agency/commission/corporation has proper925management and accounting controls, and what experience do you have in926managing a large organization?927    If confirmed, my responsibilities, would be to serve as Board928Member of the NTSB. Its mission is to investigate accident and929incidents in all modes of transportation; issue safety recommendations930and advocate for implementation of those recommendations; conduct931safety studies to address a myriad of transportation safety issues;932provide assistance to families and victims of transportation accidents;933and review appeals of enforcement actions and certificate denials of934the Federal Aviation Administration and United States Coast Guard.935    If confirmed, I will abide by the legislative mandate of the NTSB936and exercise proper management and accounting controls, in coordination937with the Chairwoman and Board Members, to regularly evaluate and ensure938the effectiveness and accountability of the agency. This includes939overseeing development and implementation of the budget, expenditure of940appropriations provided by Congress, and meeting all requests and941deadlines set by Congress and Committees of jurisdiction.942    24. What do you believe to be the top three challenges facing the943department/agency/commission/corporation, and why?944945  1.  Implementation of safety recommendations. As of October 1, 2025,946        the NTSB has investigated over 153,000 aviation accidents and947        incidents in the U.S., supported over 8,500 foreign948        investigations, and investigated thousands of surface949        transportation accidents and events. As a result of these950        investigations and safety studies, the NTSB has issued 15,686951        safety recommendations to over 2,500 recipients, focused on952        preventing accidents from reoccurring; 83 percent of all953        recommendations are ``closed-acceptable,'' but many others954        remain open. Board Members have a responsibility to advocate955        for implementation of those recommendations after issuance of956        the final investigation report. The investigation is only the957        first step; real safety change occurs after recommendations are958        implemented.959960  2.  Hiring and training of personnel. About 25 percent of NTSB's961        staff is retirement eligible. Staffing is down to 415 from a962        high of 445 which has an impact on the timeliness of963        investigations. I will work with the Chairwoman and other Board964        Members and staff to increase staff resources, provide critical965        training, and improve the timeliness of accident966        investigations.967968  3.  Improve safety through partnerships. I believe there are969        opportunities to facilitate safety information sharing across970        the various modes of transportation and bring the different971        modes together to share lessons to be learned, as well as best972        practices in safety, with the goal of preventing accidents and973        save lives.974                   b. potential conflicts of interest975    1. Describe all financial arrangements, deferred compensation976agreements, and other continuing dealings with business associates,977clients, or customers. Please include information related to retirement978accounts, such as a 401(k) or pension plan.979    I do not have any financial arrangements, deferred compensation980agreement, and other continuing dealings with business associates,981clients, or customers. Because I will have a defined benefit pension982plan and 401(k) with American Airlines, I will not participate983personally and substantially in any particular matter that to my984knowledge has a direct and predictable effect on the ability or985willingness of American Airlines to make this payment to me, unless I986first obtain a written waiver, pursuant to 18 U.S.C. section 208(b)(1),987or qualify for a regulatory exemption, pursuant to 18 U.S.C. section988208(b)(2).989    2. Do you have any commitments or agreements, formal or informal,990to maintain employment, affiliation, or practice with any business,991association, or other organization during your appointment? If so,992please explain. No.993    3. Indicate any investments, obligations, liabilities, or other994relationships which could involve potential conflicts of interest in995the position to which you have been nominated. Explain how you will996resolve each potential conflict of interest.997    In connection with my nomination process, I have consulted with the998Office of Government Ethics and the NTSB's DAEO to identify potential999conflicts of interest. These commitments constitute my ethics agreement1000as identified in the ethics regulations. I am not aware of any other1001potential conflicts of interest.1002    4. Describe any business relationship, dealing, or financial1003transaction which you have had during the last ten years, whether for1004yourself, on behalf of a client, or acting as an agent, that could in1005any way constitute or result in a possible conflict of interest in the1006position to which you have been nominated. Explain how you will resolve1007each potential conflict of interest.1008    In connection with the nomination process, I have consulted with1009the Office of Government Ethics and the NTSB's DAEO to identify1010potential conflicts of interest. Any potential conflicts of interest1011will be resolved in accordance with the terms of an ethics agreement1012that I have entered into with the NTSB's DAEO and that has been1013provided to this Committee.1014    5. Identify any other potential conflicts of interest and explain1015how you will resolve each potential conflict of interest.1016    In connection with the nomination process, I have consulted with1017the Office of Government Ethics and the NTSB's DAEO to identify1018potential conflicts of interest. Any potential conflicts of interest1019will be resolved in accordance with the terms of an ethics agreement1020that I have entered into with the NTSB's DAEO and that has been1021provided to this Committee.1022    6. Describe any activity during the past ten years, including the1023names of clients represented, in which you have been engaged for the1024purpose of directly or indirectly influencing the passage, defeat, or1025modification of any legislation or affecting the administration and1026execution of law or public policy. None.1027                            c. legal matters1028    1. Have you ever been disciplined or cited for a breach of ethics,1029professional misconduct, or retaliation by, or been the subject of a1030complaint to, any court, administrative agency, the Office of Special1031Counsel, an Inspector General, professional association, disciplinary1032committee, or other professional group? If yes:10331034  a.  Provide the name of the court, agency, association, committee, or1035        group;10361037  b.  Provide the date the citation, disciplinary action, complaint, or1038        personnel action was issued or initiated;10391040  c.  Describe the citation, disciplinary action, complaint, or1041        personnel action;10421043  d.  Provide the results of the citation, disciplinary action,1044        complaint, or personnel action.10451046    No1047    2. Have you ever been investigated, arrested, charged, or held by1048any Federal, State, or other law enforcement authority of any Federal,1049State, county, municipal, or foreign government entity, other than for1050a minor traffic offense? If so, please explain. No.1051    3. Have you or any business or nonprofit of which you are or were1052an officer ever been involved as a party in an administrative agency1053proceeding, criminal proceeding, or civil litigation? If so, please1054explain. No.1055    4. Have you ever been convicted (including pleas of guilty or nolo1056contendere) of any criminal violation other than a minor traffic1057offense? If so, please explain. No.1058    5. Have you ever been accused, formally or informally, of sexual1059assault, sexual harassment, or discrimination on the basis of sex,1060race, religion, or any other basis? If so, please explain. No.1061    6. Please advise the Committee of any additional information,1062favorable or unfavorable, which you feel should be disclosed in1063connection with your nomination. No.1064                     d. relationship with committee1065    1. Will you ensure that your department/agency/commission/1066corporation complies with deadlines for information set by1067congressional committees, and that your department/agency/commission/1068corporation endeavors to timely comply with requests for information1069from individual Members of Congress, including requests from members in1070the minority? Yes.1071    2. Will you ensure that your department/agency/commission/1072corporation does whatever it can to protect congressional witnesses and1073whistleblowers from reprisal for their testimony and disclosures? Yes.1074    3. Will you cooperate in providing the Committee with requested1075witnesses, including technical experts and career employees, with1076firsthand knowledge of matters of interest to the Committee? Yes.1077    4. Are you willing to appear and testify before any duly1078constituted committee of the Congress on such occasions as you may be1079reasonably requested to do so? Yes1080                                 ______10811082[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]10831084                                 ______10851086  Addendum to the questionnaire submitted to the Senate Committee on1087 Commerce, Science, and Transportation, 119th Congress by John DeLeeuw.1088    Upon further review, I have identified additional items that are1089responsive to questions A.8, A.15, A.18, A.19, E.1, and E.2 on the1090Committee's questionnaire. They are:10911092   A.810931094     The dates listed on questionnaire are in error for1095            employment at the University of Southern California. The1096            corrected response is:10971098                  University of Southern California, Instructor,1099                Aviation Safety & Security Program, 2010-present11001101   A.1511021103     The response as submitted was incorrect. The corrected1104            response is:11051106     2019, Allied Pilots Association Political Action1107            Committee, $11211081109     2023, American Airlines Inc. Political Action1110            Committee, $1,00011111112   A.1811131114     The following panel should be added:11151116                  Panel, 3/4/2020, NTSB Most Wanted Roundtable,1117                Pipeline Safety Management Systems (the panel was1118                cancelled; however, the agenda is still viewable on1119                NTSB's website).11201121   A.1911221123     The following items should be added:11241125                  9/30/2019, Article, Southwest pilots see1126                February or March return of Boeing Max, AP11271128                  9/30/2019, Article, Southwest Airline pilots'1129                union says Boeing 737 Max jets may not return to the1130                skies until `February or March' after the airline1131                grounded its fleet of planes earlier this year when to1132                crashes killed 346 people, Daily Mail UK11331134                  10/1/2019, Article, American Airlines to fly 21135                737 Max planes to Oklahoma this week, Dallas Business1136                Journal11371138                  10/8/2019, Article, Checklists come into focus1139                as pace-setter for 737 Max return, The Air Current11401141                  11/21/2019, Article, Boeing's fix tames the1142                `tiger' in the 737 MAX flight controls, says experts1143                and critics, Seattle Times11441145                  11/24/2020, Podcast, S3E10--Tell Me Why: ``We1146                made improvements not just for American, but for the1147                industry as a whole.''11481149                  12/3/2020, Article, Allied Pilots Association:1150                `Line Pilot Input' Was Key in Returning Boeing 737 MAX1151                to Service, Targeted News Service (on file with Comm.)11521153                  12/5/2020, Article, Post-crash recovery: How one1154                airline plans to restore confidence in the Boeing 7371155                MAX, CNN11561157                  12/7/2020, Article, Flying the Boeing 737 MAX1158                Again, Aviation Week11591160                  4/16/2024, Article, American Airlines Extends1161                Use of CEFA Aviation's EFB Flight Replay to More than1162                15,000 Pilots, CEF11631164    Senator Sheehy [presiding]. Thank you. Mr. Kloster, you are1165recognized for your opening statement.11661167   STATEMENT OF RICHARD J. KLOSTER, NOMINEE TO BE A MEMBER,1168                  SURFACE TRANSPORTATION BOARD11691170    Mr. Kloster. Thank you, Senator. I would like to begin with1171saying thank you to Chairman Cruz, Ranking Member Cantwell, and1172all the distinguished members of the Senate Commerce, Science,1173and Transportation Committee.1174    I am honored to appear before you today as you consider my1175nomination to be a member of the Surface Transportation Board.1176I am also grateful to President Trump for his nomination.1177    I spent my whole career working in the rail industry. It1178began at a Wisconsin rail yard during the third week of October1179in 1980. For those of you who do not remember, that was the1180same week that the Staggers Rail Act was signed into law. I was1181a young--I was young, just out of college, did not know, really1182know what a railroad was all about.1183    I remember telling my dad I was going to work for the1184railroad. He was a soft-spoken World War II veteran farmer from1185South Dakota, but he was so proud and would not stop talking1186about all the family members who had worked for the railroads.1187There were a lot of stories I had no idea. But to me, it was1188still just a job, something I needed since I was soon getting1189married to the love of my life.1190    As for the new job, the scale, the grandeur, and the1191importance of the railroad to the country had not yet been1192impressed on me. That would come later. The rail industry, for1193its part, had lost its way and was in disarray. It was the1194Staggers Act that provided a lifeline for what people at the1195time were calling a dying industry. It would take some time,1196but a rail renaissance would emerge, as would my love for the1197industry.1198    My time with the first Class I railroad would lead to1199working for a regional railroad and then a short line railroad,1200both of which were Class I spin-offs that were made possible by1201the Staggers Act. During this time, my knowledge and experience1202of railroad commercial, operational, and strategic matters1203would grow immensely.1204    After some time off from graduate school, I moved over to1205the rail industry supply chain working for the largest rail car1206lessor in the industry. This is where my understanding of all1207the different facets of equipment supply to the industry would1208emerge, covering the complete ecosystem, from builders, to1209lessors, to shops, to component suppliers, and others.1210    Then finally, about 17 years ago I started a successful1211strategic consulting firm specializing in the railroad and rail1212equipment sectors. These last 17 years have allowed me to1213expand and round out my knowledge even more, adding M&A,1214financial, regulatory, technical, and other expertise.1215    So when I look back on these 45 years, I see both me and1216the rail industry starting a new life together, beginning a new1217journey, one that I had no idea at the time I would embark on,1218but I am so glad I did.1219    When I look back over this time and I see the incredible1220changes and growth that have transpired in both me and the rail1221industry, and I would not change a thing, which brings me back1222to the last thing.1223    Why am I here today? I am here today to serve my country1224and the broader industry that has given me so much. The1225shippers, the railroads, and the supply chain. So I hope you1226will have me and allow me to serve and dedicate myself to1227advancing the mission of the Surface Transportation Board.1228    Thank you for your time and consideration. And I look1229forward to answering any questions you may have.1230    [The prepared statement and biographical information of Mr.1231Kloster follow:]12321233   Prepared Statement of Richard J. Kloster, Nominee to be a Member,1234                      Surface Transportation Board1235    I would like to begin with saying thank you to Chairman Cruz,1236Ranking Member Cantwell, and all the distinguished Members of the1237Commerce, Science, and Transportation Committee. I am honored to appear1238before you today as you consider my nomination to be a Member of the1239Surface Transportation Board (``Board''). I am also grateful to1240President Trump for his nomination.1241    I've spent my whole career working in the rail industry. It began1242at a Wisconsin rail yard during the third week of October of 1980. For1243those who don't remember, that was the same week the Staggers Rail Act1244was signed into law.1245    I was young, just out of college, and didn't really know what a1246railroad was all about. I remember telling my dad that I was going to1247work for the railroad. He was a softspoken WW2 veteran farmer from1248South Dakota, but he was so proud and wouldn't stop talking about all1249the family members that had worked for the railroad. There were a lot1250of stories. I had no idea.1251    But to me, it still was just a job. Something I needed since I was1252soon getting married to the love of my life. As for my new job, the1253scale, the grandeur, and the importance of the railroad hadn't yet been1254impressed on me. That would come later.1255    The rail industry, for its part, had lost its way and was in1256disarray. It was The Staggers Act that provided a lifeline for what1257people at the time were calling a dying industry. it would take some1258time, but a rail renaissance would emerge. As would my love for the1259industry.1260    My time with that first Class I railroad would lead to working for1261a regional railroad, and then a shortline railroad. Both of which were1262Class I spinoffs that were made possible by The Staggers Act. During1263this time my knowledge and experience of railroad commercial,1264operational and strategic matters would grow immensely.1265    After some time off for graduate school, I moved over to the rail1266supply chain, working for the largest railcar lessor in the industry.1267This is where my understanding of all the different facets of equipment1268supply to the industry would emerge, covering the complete eco-system1269from builders, to lessors, to shops, component suppliers, and others.1270    Then finally, about 17 years ago, I started a successful strategic1271consulting firm specializing in the railroad and rail equipment1272sectors. These last 17 years have allowed me to expand and round out my1273knowledge even more, adding M&A, financial, regulatory, technical, and1274other expertise.1275    So, when I look back 45 years ago, I see both me and the rail1276industry starting a new life together. Beginning a new journey. One I1277had no idea at the time I would embark on but glad I did. And I look1278back over this time, I see all the incredible changes and growth that1279have transpired in both me and the rail industry. I wouldn't change a1280thing.1281    Which brings me back to one last thing, why am I here today? I am1282here today to serve my country and the broader industry that has given1283me so much. . .the shippers, the railroads, and the supply chain. So, I1284hope you will have me and allow me to serve and dedicate myself to1285advancing the mission of the Surface Transportation Board.1286    Thank you for your time and consideration, and I look forward to1287answering any questions that you may have.1288                                 ______12891290                      a. biographical information1291    1. Name (Include any former names or nicknames used):12921293        Richard James Kloster (Dick).12941295    2. Position to which nominated: Board Member.1296    3. Date of Nomination: September 10, 2025.1297    4. Address (List current place of residence and office addresses):12981299        Residence: Information not released to the public.1300        Office: Information not provided.13011302    5. Date and Place of Birth: Information not provided.1303    6. Provide the name, position, and place of employment for your1304spouse (if married) or domestic partner, and the names and ages of your1305children (including stepchildren and children by a previous marriage).13061307        Wife--Constance Doone Kloster, not employed1308        Son--Andrew R. Kloster, age 41; Daughter--Allyson R. Kloster,1309        age 38; Daughter--Madelyn D. Kloster, age 3413101311    7. List all college and graduate schools attended, whether or not1312you were granted a degree by the institution. Provide the name of the1313institution, the dates attended, the degree received, and the date of1314the degree.13151316  1.  William Rainey Harper College, Palatine, IL, September 1976-May1317        1977, no degree/transferred13181319  2.  Northern Illinois University, DeKalb, IL, August 1977-August1320        1980, BS Business, December 13, 198013211322  3.  University of Alabama, Tuscaloosa, AL, August 1985-May 1986, MS1323        Marketing, May 17, 198613241325    8. List all post-undergraduate employment, including the job title,1326name of employer, and inclusive dates of employment, and highlight all1327management-level jobs held and any non-managerial jobs that relate to1328the position for which you are nominated.13291330   1.  Chicago & Northwestern Transportation Co.--October 1980 to1331        August 19851332       Damage Prevention Auditor--October 1980 to August1333            19811334       Assistant Pricing Manager, Automotive--August 19811335            to January 19821336       Pricing Manager, Paper & Forest Products--January1337            1982 to April 19821338       Pricing Manager, Chemicals & Fertilizers--April 19821339            to December 19821340       Market Manager, Industrial Chemicals--December 19821341            to August 198513421343   2.  University of Alabama1344       Graduate Research Assistant--August 1985 to August1345            198613461347   3.  Chicago Central & Pacific Railroad Company1348       Asst. Vice President, Marketing & Sales--August 19861349            to June 198713501351   4.  Indiana Rail Road Company1352       VP Marketing, Sales, Corporate Development--July1353            1987 to April 198913541355   5.  Chicago & Northwestern Transportation Co.1356       Director, Food Products Business Unit--April 1989 to1357            February 199113581359   6.  General Electric, GE Capital Railcar Services--February 1991 to1360        July 20071361       Senior Portfolio Manager--February 1991 to January1362            20011363       Vice President, Market Segment Leader, Railroads--1364            January 2001 to March 20031365       Vice President, Business and Market Intelligence--1366            March 2003 to July 200713671368   7.  Advanced Equipment Rail Solutions, Inc.1369       President and Founder--July 2007 to October 201213701371   8.  FTR Intel/FTR Consulting Group (Freight Transportation Research1372        Associates)1373       Principle & Senior Consultant (Rail)--January 20081374            to November 201913751376   9.  AllTranstek, LLC1377       Senior Vice President and Chief Commercial Officer--1378            October 2012 to November 201913791380  10.  Integrity Rail Partners, Inc.1381       President and Founder--November 2019 to Present13821383    9. Attach a copy of your resume.1384   See Appendix A1385    10. List any advisory, consultative, honorary, or other part-time1386service or positions with Federal, State, or local governments, other1387than those listed above after 18 years of age. None.1388    11. List all positions held as an officer, director, trustee,1389partner, proprietor, agent, representative, or consultant of any1390corporation, company, firm, partnership, or other business, enterprise,1391educational, or other institution.13921393   Advanced Rail Equipment Solutions, Inc.--President and CEO13941395   Integrity Rail Partners, Inc.--President and CEO13961397    12. List all memberships you have had after 18 years of age or1398currently hold with any civic, social, charitable, educational,1399political, professional, fraternal, benevolent or religiously1400affiliated organization, private club, or other membership organization1401(You do not have to list your religious affiliation or membership in a1402religious house of worship or institution). Include dates of membership1403and any positions you have held with any organization. Please note1404whether any such club or organization restricts membership on the basis1405of sex, race, color, religion, national origin, age, or disability.14061407   National Industrial Transportation League (NITL)--no1408        membership restrictions14091410   General Member, 1998-202514111412   Board Member, 2005-2007, 2012-202514131414   Executive Board Member & Treasurer 2021-202514151416   Railway Supply Institute (RSI)--no membership restrictions14171418   General Member, 1992-202514191420   Board Member, 2019-202114211422   Schaumburg Athletic Association (SAA)--no membership1423        restrictions14241425   Board Member, 2004-200914261427    13. Have you ever been a candidate for and/or held a public office1428(elected, non-elected, or appointed)? If so, indicate whether any1429campaign has any outstanding debt, the amount, and whether you are1430personally liable for that debt.1431   I have never been a candidate for or held any public office.1432    14. List all memberships and offices held with and services1433rendered to, whether compensated or not, any political party or1434election committee within the past ten years. If you have held a paid1435position or served in a formal or official advisory position (whether1436compensated or not) in a political campaign within the past ten years,1437identify the particulars of the campaign, including the candidate, year1438of the campaign, and your title and responsibilities.1439   None.1440    15. Itemize all political contributions to any individual, campaign1441organization, political party, political action committee, or similar1442entity of $200 or more for the past ten years.1443   None.1444    16. List all scholarships, fellowships, honorary degrees, honorary1445society memberships, military medals, and any other special recognition1446for outstanding service or achievements.1447   None.1448    17. List all books, articles, columns, letters to the editor,1449Internet blog postings, or other publications you have authored,1450individually or with others. Include a link to each publication when1451possible. If a link is not available, provide a digital copy of the1452publication when available.1453   See a list of article links in Appendix B1454    18. List all speeches, panel discussions, and presentations (e.g.,1455PowerPoint) that you have given on topics relevant to the position for1456which you have been nominated. Include a link to each publication when1457possible. If a link is not available, provide a digital copy of the1458speech or presentation when available.1459   See a list of presentations in Appendix C1460    19. List all public statements you have made during the past ten1461years, including statements in news articles and radio and podcasts and1462television appearances, which are on topics relevant to the position1463for which you have been nominated, including dates. Include a link to1464each statement when possible. If a link is not available, provide a1465digital copy of the statement when available.1466   See a list of article links in Appendix D1467    20. List all digital platforms (including social media and other1468digital content sites) on which you currently or have formerly operated1469an account, regardless of whether or not the account was held in your1470name or an alias. Include the full name of an ``alias'' or ``handle'',1471including the complete URL and username with hyperlinks, you have used1472on each of the named platforms. Indicate whether the account is active,1473deleted, or dormant. Include a link to each account if possible.14741475   LinkedIn--Richard Kloster, active account14761477   www.linkedin.com/in/richard-kloster-45b1bb414781479    21. Please identify each instance in which you have testified1480orally or in writing before Congress in a governmental or non-1481governmental capacity and specify the date, committee, and subject1482matter of each testimony.1483   I have never testified before Congress.1484    22. Given the current mission, major programs, and major1485operational objectives of the department/agency/commission/corporation1486to which you have been nominated, what in your background or employment1487experience do you believe affirmatively qualifies you for appointment1488to the position for which you have been nominated, and why do you wish1489to serve in that position?1490    I have spent my whole career working in the rail industry, having1491started with a railroad the second week of October 1980, the same week1492the Staggers Rail Act was enacted. Over the past 45 years, I have spent1493significant time working in, and with, all three sectors of the1494industry--the railroads, the supply chain, and the customer base,1495shippers.1496    This experience has allowed me to gain a deep understanding of1497``railroading'', from all stakeholder perspectives, Class 1's,1498shortlines, shippers, intermodal, rail suppliers, equipment and repair,1499financial/investors, and others. Importantly, I offer a neutral,1500trusted perspective that connects commercial and technical areas. My1501work has been relied upon across the industry valued by all major1502stakeholder groups.1503    I have a passion for the U.S. rail industry and the American1504economy, and a strong drive to help ensure the industry is robust, and1505equipped to adapt changing times, so that it can continue to be the1506backbone of American industry.1507    23. What do you believe are your responsibilities, if confirmed, to1508ensure that the department/agency/commission/corporation has proper1509management and accounting controls, and what experience do you have in1510managing a large organization?1511    The agency is tasked with ensuring the U.S. rail industry remains1512healthy, strong and competitive, to the benefit of the broader1513ecosystem, encompassing all stakeholders. However, to do this the STB1514must operate as a cohesive unit, led by its Chairman and supported by1515the other Board members and the staff. The Board must be able to1516execute its duties fairly and justly, with wisdom gained through1517experience. It is my hope and goal to bring my diverse, 45-year1518experience in the rail industry to help strengthen the Board's1519understanding of the industry it serves so as to strengthen its1520decision-making.1521    Over my career I have worked for large and small companies, as well1522as having started two small businesses, where I have always had1523managerial responsibilities. I pride myself as being a person who seeks1524out input from everyone in the organization.1525    I have managed large teams that focused on technical (engineering,1526inspections) and regulatory compliance (Federal Railroad1527Administration, Pipeline and Hazardous Materials Safety Administration,1528Association of American Railroads), as well as operational aspects of1529rail equipment and rail operations. I have also managed staff1530responsible for accounting and financial controls at different1531organizations including portfolio, operational, maintenance,1532commercial, budget and profit and loss responsibilities.1533    If confirmed, I am committed to learning about all the elements of1534compliance with Federal law, including best practices set by the Office1535of Management and Budget, the Government Accountability Office, and1536others, at the operational level, and ensuring the STB stays on track.1537    24. What do you believe to be the top three challenges facing the1538department/agency/commission/corporation, and why?1539    The STB handles hundreds of proceedings every year, some routine,1540but others very significant. However, all are just as important to one1541petitioner as it is to another. Moving all cases through the process1542has been a challenge in the past but should be a top goal of the Board,1543in terms of speed, timeliness and transparency of the process. If1544confirmed, my goal will be to contribute to the progress made by the1545new Chairman.1546    Some cases are very specific, affecting only the participants,1547while others will have lasting effects for the industry as a whole. In1548my mind, these decisions with long lasting impacts are the most1549critical and must me addressed with fairness, accountability, and1550adherence to law. Doing this requires the utmost due diligence in an1551open and transparent manner, involving input and debate from a broad1552set of stakeholders. If confirmed, this would be my approach. I would1553rely on my deep background and network in the industry to ensure sound1554and just decisions.1555    Making good decisions requires good input. The more knowledge and1556information you acquire, the better positioned you are to make sound1557decisions, while still balancing preparation with timely action. The1558STB is strong in this area, but there is always room for improvement.1559One of my goals would be to draw on my unique experience to enhance the1560agency's capabilities and ensure it obtains and understands the1561information necessary for effective decision-making.1562                   b. potential conflicts of interest1563    1. Describe all financial arrangements, deferred compensation1564agreements, and other continuing dealings with business associates,1565clients, or customers. Please include information related to retirement1566accounts, such as a 40l(k) or pension plan.1567    I have no existing financial arrangements or deferred compensation1568agreements. If confirmed, my consulting firm, Integrity Rail Partners,1569Inc., will become dormant and I will cease to have any future business1570relations with any business associates, clients, or customers.1571    I have 40l(k) rollover accounts from two former employers, GE1572Railcar Services (GE) and Rescar Inc. I also have a pension from GE1573Railcar Services (GE). These are listed in Section E.1.1574    2. Do you have any commitments or agreements, formal or informal,1575to maintain employment, affiliation, or practice with any business,1576association, or other organization during your appointment? If so,1577please explain.1578    I am the sole owner of my consulting firm, which does business as1579Integrity Rail Partners, Inc. If confirmed, my consulting firm will1580cease engaging in any business, including client engagements,1581consistent with my OGE Ethics Agreement.1582    3. Indicate any investments, obligations, liabilities, or other1583relationships which could involve potential conflicts of interest in1584the position to which you have been nominated. Explain how you will1585resolve each potential conflict of interest.1586    If confirmed, Integrity Rail Partners, Inc. will remain dormant and1587will not advertise, during my appointment to the position of Board1588Member. I will not perform any services for the firm, except that I1589will comply with any court orders or subpoenas and any requirements1590involving legal filings, taxes, and fees that are necessary to maintain1591the firm while it is in an inactive status. As a Board Member, I will1592not participate personally and substantially in any particular matter1593that to my knowledge has a direct and predictable effect on the1594financial interests of Integrity Rail Partners, Inc. All amounts owed1595to me by any of my clients will be fixed before I assume the duties of1596the position of Board Member, and I will not participate personally and1597substantially in any particular matter that to my knowledge has a1598direct and predictable effect on the ability or willingness of any of1599these clients to pay these amounts.1600    4. Describe any business relationship, dealing, or financial1601transaction which you have had during the last ten years, whether for1602yourself, on behalf of a client, or acting as an agent, that could in1603any way constitute or result in a possible conflict of interest in the1604position to which you have been nominated. Explain how you will resolve1605each potential conflict of interest.1606    I am not aware that I hold any financial interest that would raise1607a possible conflict of interest. However, in my Ethics Agreement, I1608have pledged that I will not participate personally and substantially1609in any particular matter in which I know that I have a financial1610interest directly and predictably affected by the matter, or in which I1611know that a person whose interests are imputed to me has a financial1612interest directly and predictably affected by the particular matter,1613unless I first obtain a written waiver, pursuant to 18 U.S.C.1614Sec. 208(b)(l). I understand that the interests of the following1615persons are imputed to me:16161617     Any spouse or minor child of mine;16181619     Any general partner of a partnership in which I am a1620            limited or general partner;16211622     Any organization in which I serve as an officer,1623            director, trustee, general partner, or employee, even if1624            uncompensated; and16251626     Any person or organization with which I am negotiating1627            or have an arrangement concerning prospective employment.16281629    Additionally, I have been advised that the duties of the position1630of Board Member may involve particular matters affecting the financial1631interests of Commtrex. The agency has determined that it is not1632necessary at this time for me to divest my interest in this entity1633because the likelihood that my duties will involve any such matter is1634remote. Accordingly, I will not participate personally and1635substantially in any particular matter that to my knowledge has a1636direct and predictable effect on the financial interests of Commtrex,1637unless I first obtain a written waiver, pursuant to 18 U.S.C.1638Sec. 208(b)(l).1639    5. Identify any other potential conflicts of interest and explain1640how you will resolve each potential conflict of interest. None.1641    6. Describe any activity during the past ten years, including the1642names of clients represented, in which you have been engaged for the1643purpose of directly or indirectly influencing the passage, defeat, or1644modification of any legislation or affecting the administration and1645execution of law or public policy. None.1646                            c. legal matters1647    1. Have you ever been disciplined or cited for a breach of ethics,1648professional misconduct, or retaliation by, or been the subject of a1649complaint to, any court, administrative agency, the Office of Special1650Counsel, an Inspector General, professional association, disciplinary1651committee, or other professional group? If yes:16521653  a.  Provide the name of the court, agency, association, committee, or1654        group;16551656  b.  Provide the date the citation, disciplinary action, complaint, or1657        personnel action was issued or initiated;16581659  c.  Describe the citation, disciplinary action, complaint, or1660        personnel action;16611662  d.  Provide the results of the citation, disciplinary action,1663        complaint, or personnel action.1664    No.1665    2. Have you ever been investigated, arrested, charged, or held by1666any Federal, State, or other law enforcement authority of any Federal,1667State, county, municipal, or foreign government entity, other than for1668a minor traffic offense? If so, please explain. No.1669    3. Have you or any business or nonprofit of which you are or were1670an officer ever been involved as a party in an administrative agency1671proceeding, criminal proceeding, or civil litigation? If so, please1672explain. No.1673    4. Have you ever been convicted (including pleas of guilty or nolo1674contendere) of any criminal violation other than a minor traffic1675offense? If so, please explain. No.1676    5. Have you ever been accused, formally or informally, of sexual1677assault, sexual harassment, or discrimination on the basis of sex,1678race, religion, or any other basis? If so, please explain. No.1679    6. Please advise the Committee of any additional information,1680favorable or unfavorable, which you feel should be disclosed in1681connection with your nomination.1682    I have nothing relevant to disclose.1683                     d. relationship with committee1684    1. Will you ensure that your department/agency/commission/1685corporation complies with deadlines for information set by1686congressional committees, and that your department/agency/commission/1687corporation endeavors to timely comply with requests for information1688from individual Members of Congress, including requests from members in1689the minority? Yes.1690    2. Will you ensure that your department/agency/commission/1691corporation does whatever it can to protect congressional witnesses and1692whistleblowers from reprisal for their testimony and disclosures? Yes.1693    3. Will you cooperate in providing the Committee with requested1694witnesses, including technical experts and career employees, with1695firsthand knowledge of matters of interest to the Committee? Yes.1696    4. Are you willing to appear and testify before any duly1697constituted committee of the Congress on such occasions as you may be1698reasonably requested to do so? Yes.16991700[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]17011702         Appendix B--Progressive Railroading Magazine Articles17032025 July--``The future of the rail-car supply chain? It's all about1704the freight''1705https://www.progressiverailroading.com/mechanical/article/The-future-1706of-the-rail-car-supply-cbain-Its-all-about-the-freight-mdasb-by-1707Richard-Kloster--74860170817092025 February--``On the eve of a new renaissance?--commentary by1710Richard Kloster''1711https://www.progressiverailroading.com/federal_legislation_regulation/1712news/On-the-eve-of-a-new-renaissance-mdash-commentary-by-Richard-1713Kloster--73848171417152024 December--``Rail-Car Outlook '25: Definitely not 'Back to the1716Future' anytime soon--forecast by Richard Kloster''1717https://www.progressiverailroading.com/rail_industry_trends/news/Rail-1718Car-Outlook-25-Definitely-not-Back-to-the-Future-anytime-soon-mdash-1719forecast-by-Richard-Kloster--73444172017212024 July--``If I were King of the Rail-car Fleet--commentary by1722Richard Kloster''1723   No link available, see the article at the end of this report172417252024 February--``Actions and Words: How will car supply affect the1726`Pivot to Growth?'--commentary by Richard Kloster''1727   No link available, see the article at the end of this report172817292023 December--``Rail-car outlook '24: Dick Kloster's annual forecast''1730https://www.progressiverailroading.com/mechanica1/article/Rail-car-1731outlook-24-Dick-Klosters-annua1-forecast--70825173217332023 July--``Death and Taxes: How regulations and inflation are1734impacting tank car maintenance''1735   No link available, see the article at the end of this report173617372023 February--``The Paradigm Shift: How rail-car supply and ownership1738has changed over time--commentary by Richard Kloster''1739   No link available, see the article below174017412022 December--``Rail-car outlook: Richard Kloster's 2023 delivery1742projection''1743https://www.progressiverailroading.com/mechanical/article/Rail-car-1744outlook-Richard-Klosters-2023-delivery-proiection--68134174517462022 July--``A funny thing happened on the way to the scrap yard--1747commentary by Richard Kloster''1748   No link available, see the article below174917502022 February--``The Tails That Wag the Dog: The three fleets that have1751been depressing fleet utilization--commentary by Richard Kloster''1752   No link available, see the article below175317542021 December--``What will the rail equipment market look like in17552022?''1756https://www.progressiverailroading.com/mechanical/article/What-will-1757the-rail-equipment-market-look-like-in-2022--65378175817592021 August--``Rail-car market update: What about Bob (I mean rail1760cars)?''1761https://www.progressiverailroading.com/mechanical/article/Rail-car-1762market-update-What-about-Bob-I-mean-rail-cars--64248176317642020 December--``What will the rail-car equipment market look like in17652021? (commentary by Richard Kloster)''1766https://www.progressiverailroading.com/mechanical/article/What-will-1767the-rail-car-equipment-market-look-like-in-2021-commentary-by-Richard-1768Kloster--62197176917702020 February--``A case for the 'hope for the best' contingent: rail1771equipment market commentary by Richard Kloster''1772https://www.progressiverailroading.com/mechanical/article/A-case-for-1773the-hope-for-the-best-contingent-rail-equipment-market-commentary-by-1774Richard-Kloster--59677177517762019 December--``Rail-car Outlook 2020--analysis by Richard Kloster''1777https://www.progressiverailroading.com/mechanical/article/Rail-car-1778Outlook-2020-analysis-by-Richard-Kloster--59245177917802019 August--``The plight of box cars--analysis by Richard Kloster''1781https://www.progressiverailroading.com/mechanical/article/The-plight-1782of-box-cars-analysis-by-Richard-Kloster--58261178317842019 February--``PSR and the rail car: Commentary by Richard Kloster''1785https://www.progressiverailroading.com/mechanical/article/PSR-and-the-1786rail-car-Commentary-by-Richard-Kloster--56697178717882018 December--``Outlook 2019: Rail-car forecast by Richard Kloster''1789https://www.progressiverailroading.com/mechanical/article.aspx?id=56257179017912018 July--``What if they never discovered oil in North Dakota?--by1792Richard Kloster''1793https://www.progressiverailroading.com/mechanical/article/What-if-they-1794never-discovered-oil-in-North-Dakota-by-Richard-Kloster--55040179517962018 February--``Commentary: Rail-car lessees need to know the new1797lease accounting standards''1798https://www.progressiverailroading.com/mechanical/article/Commentary-1799Rail-car-lessees-need-to-know-the-new-lease-accounting-standards--53872180018012017 December--``Outlook 2018: Rail-car forecast by Richard Kloster''1802https://www.progressiverailroading.com/rail_industry_trends/article/1803Outlook-2018-Rail-car-forecast-by-Richard-Kloster--53418180418052017 August--``Rail-car outlook: Where did the momentum go?--analysis1806by Richard Kloster''1807https://www.progressiverailroading.com/mechanical/article/Rail-car-1808outlook-Where-did-the-momentum-go-mdash-analysis-by-Richard-Kloster--180952368181018112017 February--``Commentary: If things are so bad in the rail-car1812leasing industry, why are so many jumping in?'1813https://www.progressiverailroading.com/mechanical/article/Commentary-1814If-things-are-so-bad-in-the-rail-car-leasing-industry-why-are-so-many-1815jumping-in--50788181618172016 December--``Outlook 2017: Rail-car forecast by Richard Kloster''1818https://www.progressiverailroading.com/mechanical/article/Outlook-2017-1819Rail-car-forecast-by-Richard-Kloster--50304182018212016 July--``Rule change could help ease box-car supply problem--1822commentary by Richard Kloster''1823https://www.progressiverailroading.com/mechanical/article/Rule-change-1824could-help-ease-box-car-supply-problem-commentary-by-Richard-Kloster--182548746182618272016 April--``Tank cars: The year of the shipper--commentary by Richard1828Kloster''1829https://www.progressiverailroading.com/mechanical/article/fank-cars-1830The-year-of-the-shipper-commentary-by-Richard-Kloster--47892183118322016 March--``AllTranstek tackles imploding tank car legend on1833MythBusters TV show''1834https://www.progressiverailroading.com/mechanical/article/AllTranstek-1835tackles-imploding-tank-car-legend-on-MythBusters-TV-show--47621183618372015 December--``Outlook 2016: Rail-car forecast by Richard Kloster''1838https://www.progressiverailroading.com/rail_industry_trends/article/1839Outlook-20l6-Rail-car-forecast-by-Richard-Kloster--467011840                                 ______184118422024 July--``If I were King of the Rail-car Fleet''1843If I were King of the Railcar Fleet1844The problem with Per Diem Leasing18451846                           By Richard Kloster18471848    Per diem leasing has outlived its usefulness. By about 20 years.1849There, can't believe I said it.1850    I spent ten years managing a huge boxcar fleet, so I learned a1851thing or two about per diem leasing, and I never thought I'd say this,1852but if I were King of the Railcar Fleet my first act would be to outlaw1853per diem leasing.1854    Per diem leasing used to be an extremely useful tool for railroads1855to secure equipment. It was created in the 1970s by Itel Corporation to1856provide leased equipment to cash-strapped shortline railroads. This was1857during a time of extreme equipment shortages, and the inability or1858unwillingness of Class 1 railroads to invest in additional equipment.1859Consequently, tens of thousands of desperately needed cars were built,1860many of them boxcars.1861    Fast forward to the 1990s when the industry adopted a new car hire1862compensation scheme. Deprescription, as it was called, is a market-1863based system that set railroad car hire rates based on supply and1864demand, replacing the ``prescribed'' system. This new system was1865laudable--who would object to a market-based system, as long as certain1866``guardrails'' were implemented to protect against abusive tactics.1867    However, like every new set of rules, there are those that will try1868to find a loophole to use for their own benefit. In this case the1869loophole is the default rate. More specifically, how the default rate1870is set for cars built after 1992. The default rate is the key part in1871deprescription since it sets the rate that is charged in the absence of1872a negotiated rate. Sounds fine, right? But how is the default rate set?1873    It is the ``lowest positive negotiated rate from the prior1874quarter''. The issue here is, all it takes to tip the scales in a car1875hire rate negotiation is for ONE ``car user'' and ONE ``car owner'',1876both of which are railroads, to negotiate an extremely low rate for ONE1877car.1878    The result is that one single car governs the rate for all the1879ensuing car builds of a specific car type. This has applied to tens of1880thousands of new cars built over the last 32 years, with some of the1881rates as low as $0.17 per hour, far from economically viable for a car1882owner, even at a car cost of 20 years ago.1883    This is a major reason why leasing companies today avoid investing1884in new boxcars.1885    So why outlaw per diem leasing? I think per diem is a crutch that1886has lost its relevance. It didn't use to be this way but now it is.1887    Boxcars shippers rely almost exclusively on the railroads for car1888supply and have been spoiled over the years because of the huge fleet1889they drew from. That is not the case today. However, unlike other1890industries that use covered hoppers and tank cars, most boxcar users1891never had to figure out how to include ownership or fixed rate leasing1892into their rail transportation business models. Covered hopper users1893have a robust car supply of owned, fixed leased, and railroad supplied1894at their disposal that is not facing the retirement cliff that boxcar1895users are facing now.1896    Pooling is always cited as the reason shipper ownership or fixed1897rate leasing doesn't work for boxcars, that the railroads need to1898control the cars to raise overall utilization. However, grain covered1899hopper pools have been in place since the 1990s with shipper owned and1900leased cars placed into railroad managed pools. Why hasn't this been1901done in the boxcar market? My belief is it's the lack of a historic1902shipper boxcar fleet, which goes back to the overreliance of per diem1903leasing and railroad supply. Boxcar shippers have never been pushed to1904develop their own ownership/fixed leasing strategies.1905    Yes, there are always exceptions, but I'm talking about the overall1906fleet and its decline over the last twenty years. There just haven't1907been enough ``exceptions'' to make the rule and overcome the lack of1908investment.1909    The point is that unless boxcar users reevaluate their aversion to1910fixed rate leasing or ownership, they will be left with only two paths1911forward. A declining fleet and/or a one-supplier market for car supply,1912TTX.1913    Providing car supply to shippers, the true customers, is the reason1914railcars exist. The manner in which they are financed, owned and1915supplied is a detail, an economically important one, but subservient to1916providing basic car supply. Unless boxcar shippers want to lose this1917rail transportation option, they will have to develop new car supply1918funding strategies.1919    Times have changed. New strategies are needed. So, if I were the1920King of the Railcar Fleet, I would take the away the crutch that per1921diem leasing has become, to force parties to face up to the realities1922of the present, and put all players--railroads, shippers and lessors--1923on equal footing. Off with Per Diem's head!1924    Note: The Railway Supply Institute has petitioned the Surface1925Transportation Board to review the current rules for setting1926compensation to boxcar owners. More on the petition can be found here:1927https://www.rsiweb.org/addressing-the-boxcar-cliff-an-inflection-point-1928we-cant-afford-to-miss/1929                                 ______193019312024 February--``Actions and Words: How will car supply affect the1932'Pivot to Growth?' ''1933February 2024 Fleet & Leasing Issue1934Actions and Words1935How will car supply affect the 'Pivot to Growth?'19361937                           By Richard Kloster19381939    I've told this story a million times. I joined the industry1940straight out of college and got a job with the CNW working in a yard in1941Wisconsin. I lasted one Wisconsin winter and was about to quit. I had1942another job lined up but with a pay cut--that's how much I didn't like1943being cold.1944    Anyway, when I told my boss I was resigning, she asked me what I1945was going to do. So, I told her. Her response? ``If you can find a1946[expletive deleted] job like that today, you can find a [expletive1947deleted] job like that in three months. Give me three months.'' A month1948later, I had a marketing and pricing job in Chicago.1949    This was in the early days of deregulation. Short lines were being1950created left and right. The Class Is were starting to merge and1951consolidate, but competition was still alive and well. Every piece of1952business was important-unless it didn't contribute economically. There1953were trains to fill and cars to load. The shackles of regulation were1954off. The time to grow was here.1955    Today, we hear Class Is talk about the ``Pivot to Growth.'' It1956sounds great and I hope it works, but it's too early to see any real1957measurable, systemic results. After all, it took the railroads almost195815 years after deregulation to rationalize and become ``profitable.''1959    But why is a rail-car guy going down railroad memory lane?1960    Because I've seen both sides of the coin. And I see some1961similarities, and contrasts, between the post-deregulation period and1962the current environment we're in, as it relates to rail cars. Back1963then, car supply wasn't a problem. We had too many of most car types--1964even though a lot were old and busted, we still had enough.1965    Today, in many fleets, we don't have enough. Reinvestment in new1966cars over time has not been sufficient, and has resulted in a lot of1967smaller, declining fleets of poor-quality cars. This indifference or1968reluctance to invest in rail cars is often claimed to be due to1969declining freight, meaning, ``If I don't have the load, I don't need1970the car.''1971    But what about the reverse? ``If I don't have the car, I'm not1972going to get the load.'' People always assume it's a one-directional1973paradigm. Lower freight volume causes the fleet to decline. But it's1974not always true, not by a long shot. It's often a two-way street.1975    While some rail fleets have declined due to freight issues, others1976have not. The box-car fleet is the perfect example.1977    Much of the box-car freight that was diverted to intermodal or1978truck was done so over 20 years ago. This is why the fleet fell from1979550,000 cars in 1980 (deregulation) to today's 115,000 cars. Since1980then, the freight that remains in box cars wants to move in box cars.1981Sure, there are exceptions, but most of the lost box-car freight has1982been due to the declining supply of box cars, which has been caused by1983the lack of reinvestment. Or a lack of service. Either way, not because1984the shipper wanted to. Because they had to. Ask any shipper.1985    There are many other examples of this supply-driven freight1986decline. I point this out because if the railroads want to pivot to1987growth and generate more freight, they're going to need to address car1988supply, and in many fleets, upgrade and add more cars. Which means1989they're going to have to reconsider their attitudes and strategies1990toward car supply.1991    Some say rail shipments are a leading indicator of the economy. I1992think that's true. But I also think that new car builds, fleet sizes1993and the quality of the fleets are leading indicators of the commitment1994that railroads have to their long-term growth prospects. Rail cars have1995long lives, and you'll need them for a long time.1996    So, if you're going to buy a new one, you had better have1997confidence in your business plans. If you don't, then you probably1998maintain the status quo. Either way, your actions will speak louder1999than your words.2000                                 ______200120022023 July--``Death and Taxes: How regulations and inflation are2003impacting tank car maintenance''2004Death and Taxes2005How regulations and inflation are impacting tank car maintenance20062007                           By Richard Kloster20082009    Death and taxes. You can't avoid them. For the tank car fleet, it's2010regulations and inflation that have been pushing the cost of owning and2011maintaining a tank car to new levels.2012    Regulations are like a Roach Motel or Hotel California. They check2013in but they never check out. And they always increase the operating2014costs of owning a tank car. The same is true for freight cars. However,2015the regulatory burden is much lower for freight cars, and the pace of2016change is slower.2017    The regulatory burden for tank cars is continuously in flux but2018change comes in bunches, sometime triggered by events, sometimes due to2019industry efforts to improve the quality and safety of tank cars, most2020of which are used to haul hazardous materials. The industry is2021currently dealing with the potential for new or revised regulations in2022the aftermath of the Palestine, OH derailment, which comes ten years2023after the Lac-Megantic derailment, and the resulting regulatory changes2024included in the 2015 Fast Act.2025    However, probably the most significant regulatory change affecting2026tank cars came with the introduction of HM-201, and the expanded HM-2027216B, requiring tank car owners to Qualify, or Requalify, their tank2028car every ten years or less.2029    The impact on maintenance costs and practices has been significant.2030Prior to HM-201 it was every 20 years, and the requirements were much2031less robust and costly. Most tank car went to shop when they need to--2032for repairs, change of service, lease return, reassignment, etc. These2033were mostly one-off, single car shopping events, with specific scopes2034of work. Preventative maintenance was done on some cars but was2035generally an exception.2036    Today, much of the tank car's general maintenance is performed when2037the car is at the shop for a qualification event. This benefits the car2038owner economically by reducing overall fleet transportation expenses,2039allows owners to ``bundle'' volume and manage the shopping as a project2040verses a series of one-offs, and also perform more ``true''2041preventative maintenance.2042    However, the overall cost burden is higher due to the additional2043regulatory compliance requirements. Depending on how a car owner2044manages fleet maintenance over time determines whether they experience2045a net benefit from a cost perspective, or not.2046    The other factor driving rising maintenance costs is inflation,2047however, there are several types of inflation that are at play. The2048first is the effect that the general rate of inflation in the economy2049is having on the cost components of maintenance. This includes labor,2050components, and materials.2051    Private repair shops set their own labor rates, but they move in2052concert with the published AAR Labor Rate, which lags the economy some2053but has risen shapely over the past two years. The second is interest2054rates, which at some point will abate but not in the near term.2055    The other two are industry and market based, namely concentration2056and demand. The shops that perform tank car maintenance are2057concentrated among a few large operators. Several are affiliated with2058large leasing companies and builders with their own fleets to maintain.2059Two companies operate large shop networks. The remaining tank car2060certified shops are independent companies with one or two locations.2061However, they tend to operate regionally. In the end, a fleet owner can2062find themselves with fewer options than they thought.2063    Compounding this is the demand for tank car repair, and this2064relates back to Qualifications, which are now driving the market. The2065industry is currently in the largest qualification cycle ever and will2066not peak until 2024 and 2025. With tank car ownership concentrated with2067a small number of very large fleets--five lessors own 65 percent of the2068total fleet--shop space is at a premium. Owners are booking shop space2069into late 2024 to secure capacity.2070    The combined effect of shop concentration, high demand, and lower2071industry capacity--several shops have been shut down in the last couple2072of years--has tightened tank car maintenance supply.2073    The net result of regulatory changes and inflationary forces both2074increase tank car maintenance costs. Combined with limitations on the2075supply of maintenance services and the current shopping practices of2076tank car owners, these forces have created a market environment that2077has shifted the balance of power toward the shop operators, resulting2078in higher costs going forward for the foreseeable future.2079    Death and Truces. While we can't avoid death, we can mitigate2080taxes, or in the world of tank cars, rising maintenance costs. However,2081doing this requires a sound understanding of the current and future2082environment, as well as implementing strategies to lessen the future2083cost burden of owning a tank car.2084                                 ______208520862023 February--``The Paradigm Shift: How rail-car supply and ownership2087has changed over time--commentary by Richard Kloster''2088The Paradigm Shift2089How rail-car supply and ownership has changed over time20902091                           By Richard Kloster20922093    Rail-car supply has been around for as long as we've had railroads.2094There's a reason we call rail shipments carloads. Because if you don't2095have the car, you won't get the load.2096    In the beginning, all cars were owned and supplied by the railroads2097and even built. Leasing companies emerged before the turn of the last2098century, primarily for tank cars. However, in 1980, the year the2099railroad industry was deregulated, around 80 percent of the 2 million2100rail cars were owned by the railroads. Today, the railroad ownership2101share is down to 17 percent, while the leasing company share is up to210255 percent. TIX and the shippers own the remaining 10 percent and 182103percent, respectively.2104    The reason for this huge ownership shift is fairly simple. The2105railroad industry is the most capex-intensive industry there is, and2106the financial community, operating lessors and banks have developed a2107huge appetite for hard, long-lived assets--which the railroads have2108been more than happy to hand off this capex category to.2109    However, what's important to understand is how this paradigm shift2110happened from a historical and strategic context-and most important,2111what the implications are for the future.2112    To better understand the evolution of rail-car reinvest, break the2113last 42-year timeline into quarters:2114    1st quarter: Post-deregulation. Very few new cars were built.2115Everyone was rightsizing their fleets, not growing them. This was a2116period of heavy consolidation among the lessors and builders.2117    2nd Quarter: Remerged build cycle. In the mid-1990s, when new car2118demand returned, builders were builders and lessors were lessors. The2119lessors competed to secure a new car lease order from a lessee. The2120winning lessor then released an RFP to the builders and selected one.2121Burgeoning new car demand attracted many new leasing companies. While2122two builders had effective leasing businesses, the others did not,2123which limited their market to selling cars instead of leasing them.2124This was the same model that existed for decades prior to deregulation.2125    Implication: The builders were at a competitive disadvantage,2126lessors were playing one builder off another, order books and2127production schedules were unpredictable, and margins were depressed.2128Advantage: Lessors.2129    3rd Quarter: Emergence of the builder that leases. Starting in the2130early 2000s, builders realized there was power in holding the new car2131lease order. By securing the new car lease order themselves, they2132avoided the lessor's RFP process and increased the value of the car by2133adding new margins to the historical new car build margin, namely a2134margin for attaching a lease to the new car and a management fee. While2135all the builders created leasing operations, some were more significant2136than others. Implication: The balance of power evened out. Some2137builders created partnerships with large, well-funded investors; began2138building a leased fleet portfolio's; increased their customer bases;2139and expanded their design portfolio. Advantage: Even.2140    4th Quarter: Emergence of the builder-lessor. By the 2010s, the2141builders were fully competitive with the lessors. Attractive new car2142leases rates helped builders secure an increasing market share. The2143builders and their partners began increasing their participation in the2144secondary market. Implication: Many lessors dropped out of the new car2145market and refocused their growth plans to the secondary market,2146leaving more available orders to the builders and larger lessors, who2147had large enough volumes to aggerate and secure favorable terms for new2148cars. Advantage: Builder-lessors.2149    The future: Going forward, the balance of power is likely to2150oscillate between these two groups. This evolution of the builders and2151the reordering of how typical lessors grow their fleet has redefined2152the two groups' roles, but most of the implications are positive for2153the supply chain. While market demand will still set the prices for new2154cars of all types, the builders are now more effectively able to manage2155their production schedules and control their costs, which improves2156margins. The secondary market has grown and now includes much more2157attractive and younger equipment, which allows lessors not originating2158their own new car leases to still add new(er) cars into their fleet2159growth plans.2160    On the downside, while component prices, steel costs and interest2161rates have increased, builder consolidation that has concentrated2162capacity has also contributed to a higher lease rate environment.2163Which, depending on your perspective, is either a positive or a2164negative.2165    Overall, the paradigm shift is largely complete--and like all2166things, subject to change.2167                                 ______216821692022 July--``A funny thing happened on the way to the scrap yard-2170commentary by Richard Kloster''2171A funny thing happened on the way to the scrap yard2172August 202221732174                           By Richard Kloster21752176    Understanding the retirement market shouldn't be that difficult.2177Railcars are built new. They spend their long lives moving freight.2178They get broken and then fixed. At some point a car gets too old, or2179the repair cost gets too high, and the decision is made to retire and2180scrap the car. Hopefully after a long and profitable life for the car2181owner.2182    Back in the day when the railroads owned most of the railcars,2183circa the 1980s post-Staggers era, surplus cars were parked in a south-218440s yard and forgotten. At least until someone decided to clean out the2185yard once or twice a decade. The cost of storing surplus cars was2186minimal and likely not even measured.2187    Not so today. The fleet used to be 80 percent owned by the2188railroads--back in the day. Today the fleet is 55 percent owned by the2189private leasing companies, 65 percent if you include TIX. Shippers own2190another 18 percent. That's 73 percent (TTX excluded) of the fleet owned2191by companies that don't have a south-40s yard to shove their surplus2192cars into. These car owners have to pay to store their cars, and that2193isn't cheap.2194    Since the 2nd half of 2019, scrap steel prices have almost2195quadrupled, and with this, an increase the retirement pace of old2196railcars, some of which are not even that old. Again, back in the day,2197a scrap railcar was worth $3,000 to $5,000 per car. Today, scrap values2198are 3-4 times that.2199    Another back in the day comparison is the age profile of the fleet.2200Back than the fleet had gone through some heavy build cycles in the22011970s which resulted in a relatively young fleet. Today's fleet has a2202significant number of fleet segments that are very large and challenged2203and steering retirement right in the face. To name a few, 4750 cuf2204grain CH, 70-ton boxcars, aggregate cars, mill gondolas, several GP2205tank car segments, bulkhead flatcars--and the list goes on.2206    The rule-of-thumb long-term retirement rate most often quoted is220740,000 car per year. This is as a good a planning assumption to use as2208any. However, it's still an average. Sometimes we have more, sometime2209less, but to maintain the average, low periods must be offset by high2210periods.2211    From 2000-2007, retirements averaged 42,000 per year. During 2008-22122010, the Great Recession years, retirements jumped to a 79,0002213average, before falling to 36,000 per year from 2011-2019. However,2214over the last two years, the ``Covid'' years, retirements have average221553,000.2216    Which brings us to 2022. This year's retirement rate started at a2217strong pace, a continuation of 2020-2021, but in March, railcar scrap2218rates fell dramatically with scrap yards struggling to find cars to2219cut.2220    Why? Freight volumes are still soft. Storage costs are high. Steel2221prices are high. Scrap cars should be flying to the scrap yards. But2222they're not. Again, why? Because railcar demand has improved2223considerably.2224    But not because carload volumes have improved, they haven't.2225Instead, rail network fluidity has worsened, and fleet productivity has2226suffered. This has forced more cars onto the network to relieve the2227pressure. A year ago, cars were leaving the storage yards for the scrap2228yard. Today they're leaving the storage yard to go back into service.2229    So, what's the outlook for fleet retirements? Last decade was below2230the long-term retirement average and the old fleets will run out life.2231Next decade retirements will play catch up and are projected to exceed2232last decade by 20-25 percent.2233    But current lull in scrapping will not last. At some point this2234year or next, the rail fluidity problems will correct themselves. When2235they do these older, less desirable cars--and some younger ones--will2236again find themselves surplus, and the march to the scrap yard will2237begin again. Father Time waits for no man, or rail car.2238                                 ______223922402022 February--``The Tails That Wag the Dog: The three fleets that have2241been depressing fleet utilization--commentary by Richard Kloster''2242The Tails That Wag the Dog2243The three fleets that have been depressing fleet utilization22442245                           By Richard Kloster22462247    While rail freight volumes fell sharply in early 2020 with the2248breakout of the pandemic, they had already been trending downward for2249much of 2019. Consequently, the number of stored cars exploded to2250levels last seen during the Great Recession. Most people, when asked2251about their thoughts on what it will take to bring down the high2252storage volume and improve fleet utilization will say, ``Traffic2253volumes needs to improve'', and they would be right, for the most part.2254This is a normal demand-side response. Freight cures a lot of Fleet2255sins.2256    However, in today's market there are three supply-side actors that2257have had an over-weighted negative effect on the storage numbers, and2258market, as well as on fleet utilization. Those three actors are small2259cube covered hoppers, coal gondolas & hoppers, and large general-2260purpose DOT 111 tank cars. If you strip these three fleets out of the2261storage numbers, the overall fleet utilization and storage statistics2262look much more respectable, with many in normalized market ranges.2263    So, what's in store for these three bad actors? And how long before2264they these three get corrected? Let's start with the coal cars. The2265coal car fleet was built up over several decades for all the right2266reasons, but cheap gas prices have fundamentally changed the market for2267these cars forever. The freight declines severally outpaced the fleet2268and suddenly surplus cars were shoved into storage. This started ten2269years ago but it's only been in the last five years that car owners2270have made a serious supply-side attempt to bring balance to the coal2271car fleets scrapping over 45,000 cars and shrinking the fleet by almost227225 percent. Today, while availability is still plentiful, lease rates2273have finned up and returns are not negative. Another three years and2274this fleet could start looking attractive again. Maybe even to invest2275in? We will see.2276    Small cube gravity covered hoppers used to be called cement cars,2277but now we call them sand cars. This fleet was stable until the2278industry seriously overbuilt the fleet to meet frac sand car demand.2279However, then oil drillers figured out how to use cheaper and closer2280brown sand. What started out as right reasons to build new cars, turned2281into wrong reasons, which then resulted in a lot of red ink and huge2282stored surpluses, some even in grass fields, ``up on blocks'' . . .2283literally. Almost immediately car owners began looking for alternative2284uses, and several years later, the fleet metrics have begun to improve.2285The surplus is still large but is coming down. Availability is high but2286homes are being found and cars are coming out of storage. Some cars are2287going back into frac sand service as is, others are having their gates2288changed out for cement, and many are being rebodied and converted into2289other types of hoppers, both covered and open top cars for a variety of2290other commodity services.2291    The large general purpose tank car fleet has a similar history as2292the small cube CH fleet. A stable fleet segment that was overbuilt to2293support a new market, and to make matters worse, had new regulatory2294demands enacted that obsoleted a whole class of younger tank cars.2295Again, car owners immediately began looking for alternative uses and2296have found quite a few . . . retrofits conversions, other commodity2297uses, Mexico placements, etc. However, one additional element, unique2298to tank cars, has helped tighten this fleet faster than the other two2299fleets . . . tank car requalification. Total requalification costs2300typically range from $12-15,000 and must be done within ten-year2301intervals. While there is still a large surplus of these cars, with a2302lot of remaining life, that could go back into service, car owners are2303reluctant to invest in requalifying a car that still has an unknown2304future only to put on a shorter-term lease. This has created a2305disconnect between real availability vs. perceived supply.2306    While finding alternative uses for these surplus fleets helps2307stabilize the market and generate revenue for the car owners, much of2308the heavy lifting in balancing out these fleets will fall on simply2309retiring and scrapping cars there are just too many cars of for2310today's, and tomorrow's, demand. Supply side discipline. The fleet2311needs to stop being wagged by it tails, and instead, go in for a good2312grooming. Which I think we're in the middle of.2313                                 ______23142315         Appendix C--Public Presentations, Speeches and Panels231620252317    1. 20250519 National Coal Transportation Association (NCTA), San2318Antonio, TX--``Railcar 101: Understanding the North American Fleet''231920242320    2. 240430 National Association of Rail Shippers (NARS), Chicago,2321IL--``Railcar Market Outlook''2322    3. 240521 National Coal Transportation Association (NCTA),2323Chattanooga, TN--``Railcar Market Update''2324    4. 240606 Progressive Railroading Magazine, webinar--``Rail Car2325Counts Mid-Year Update Webcast''2326    5. 240821 Metal Service Center Institute (MSCI) webinar--``Freight2327Rail Car Outlook: New rail car deliveries, retirements, and fleet2328projections''232920232330    6. 230502 Railway Supply Institute (RSI) Webinar--``RSI ARCI2331Webinar: Railcar Market Update''2332    7. 230911 Metal Service Center Institute Economic Summit (MSCI),2333Schaumburg, IL--``Freight Rail Car Outlook: New rail car deliveries,2334retirements, and fleet projections''2335    8. 231115 RailTrends, New York, NY--``Railcar Market Outlook''233620222337    9. 221114 RailTrends, New York, NY--``RailcarMarket Outlook''233820212339    10. 210414 Commtrex Webinar--``Railcar Market Update''2340    11. 210415 SEARS Spring Meeting--``Railcar Market Update''2341    12. 210607 ASLRRA, Kansas City, MO--``Railcar Market Update''2342    13. 210622 ASLRRA, Louisville, KY--``Railcar Market Update''234320202344    14. 201119 RailTrends, Webinar--``Railcar Market Outlook''234520192346    15. 03-12-19, American Railcar Institute (ARCI), Chicago, IL--2347Presentation no longer available2348    16. 07-21-19, Minnesota Regional RR Assoc, Brainerd, MN--2349Presentation no longer available2350    17. 09-10-19, FTR, Indianapolis, IN--Moderated multiple panels2351discussing rail freight and rail equipment markets and outlooks; No2352presentations2353    18. 11-08-19, Stephens Investor Conference, Nashville, TN--2354Participated in a three person panel (no presentation required)2355discussing current trends in the rail freight and rail equipment2356markets2357    19. 11-20-19, RailTrends, New York, NY--``Railcar Market Outlook''235820182359    20. 02-26-18, Frac Sand, Houston, TX--Presentation no longer2360available2361    21. 09-11-18, FTR, Indianapolis, IN--Moderated multiple panels2362discussing rail freight and rail equipment markets and outlooks, No2363presentations2364    22. 10-02-18, SWARS, Dallas, TX--``MythBusters Tank Car2365Implosion''--Presentation no longer available; Video: https://2366www.youtube.com/watch?v=yBq5uapC-e02367    23. 11-11-18, Stephens Investor Conference, New York, NY--2368Participated in a three person panel (no presentation required)2369discussing current trends in the rail freight and rail equipment2370markets; No presentations2371    24. 11-28-18, RailTrends, New York, NY--``Railcar Market Outlook''2372Presentation no longer available237320172374    25. 02-10-2017 Railway Supply Group, Chicago, IL--Presentation no2375longer available2376    26. 02-22-07, Argus Asphalt Summit, Miami, FL--Presentation no2377longer available2378    27. 02-26-17 EFLA, Houston, TX--Presentation no longer available2379    28. 04-11-17, Infonex Hydrocarbon Transport, Calgary, AB--2380Presentation no longer available2381    29. 05-16-17, PFITC, Rosemont, IL--Presentation no longer available2382    30. 05-23-17, National Association of Rail Shippers, San Francisco,2383CA--Presentation no longer available2384    31. 08-02-17, RSTAC, Washington, DC--Presentation no longer2385available2386    32. 09-13-17, FTR, Indianapolis, IN--Moderated multiple panels2387discussing rail freight and rail equipment markets and outlooks; No2388presentations2389    33. 11-11-17, Stephens Investor Conference, New York, NY--2390Participated in a three person panel (no presentation required)2391discussing current trends in the rail freight and rail equipment2392markets; No presentations2393    34. 11-30-17, RailTrends, New York, NY--``Railcar Market Outlook''2394Presentation no longer available239520162396    35. 01-14-16, MARS, Oakbrook, IL--Presentation no longer available2397    36. 02-11-16, ExpoRail, Acapulco, MX--Presentation no longer2398available2399    37. 02-23-16 EFLA, Scottsdale, AZ--Presentation no longer available2400    38. 03-02-16, Argus Americas Asphalt Summit, Miami, FL--2401Presentation no longer available2402    39. 04-12-16, Infonex Hydrocarbon by Rail, Calgary, AB--2403Presentation no longer available2404    40. 05-09-16, PFITC & P66, Atlanta, GA--Presentation no longer2405available2406    41. 07-13-16, National Transportation Safety Board (NTSB),2407Washington, DC--I participated in a roundtable discussion of the new2408regulations for the rail shipment of flammable liquids in tank car (no2409presentations but the session was video recorded)2410   https://safetycompass.wordpress.com/2016/08/01/roundtable-2411        review-part-1-the-latest-on-rail-tank-car-safety/2412    42. 09-14-16, FTR, Indianapolis, IN--Moderated multiple panels2413discussing rail freight and rail equipment markets and outlooks; No2414presentations2415    43. 11-07-16, Stephens Investor Conference, New York, NY--2416Participated in a three person panel (no presentation required)2417discussing current trends in the rail freight and rail equipment2418markets; No presentations2419    44. 11-16-16, RailTrends, New York, NY--``Railcar Market Outlook''2420Presentation no longer available242120152422    45. 04-14-15, InfoNex CBR, Calgary, AB--Presentation no longer2423available2424    46. 06-01-15, Argus Petro Transp Summit, Houston, TX--Presentation2425no longer available2426    47. 06-03-15, PFITC, Lake Forest, IL--Presentation no longer2427available2428    48. 09-15-15, FTR, Indianapolis, IN--Moderated multiple panels2429discussing rail freight and rail equipment markets and outlooks; No2430presentations2431    49. 10-07-15, SWARS, Dallas, TX--Presentation no longer available2432    50. 11-10-15, Stephens Investor Conference, New York, NY--2433Participated in a three person panel (no presentation required)2434discussing current trends in the rail freight and rail equipment2435markets; No presentations2436    51. 11-18-15, RailTrends, New York, NY--``Railcar Market Outlook''2437Presentation no longer available243820142439    52. 04-07-14 InfoNex CBR, Calgary, AB--Presentation no longer2440available2441    53. 06-24-14 Petrochem Tank Car, Houston, TX--Presentation no2442longer available2443    54. 06-24-14 Shale Rail, Houston, TX--Presentation no longer2444available2445    55. 09-09-14 FTR, Indianapolis, IN--Moderated multiple panels2446discussing rail freight and rail equipment markets and outlooks; No2447presentations2448    56. 09-16-14 Infonex CBR, Denver, CO--Presentation no longer2449available2450    57. 11-20-14 RailTrends, New York, NY--``Railcar Market Outlook''2451Presentation no longer available2452    58. 12-04-14 Infocast, Los Angeles, CA--Presentation no longer2453available245420132455    59. 03-06-2013 Argus Americas Asphalt Summit, Houston, TX--2456Presentation no longer available2457    60. 06-05-13 Argus N. Amer Crude Transportation Summit, Houston,2458TX--Presentation no longer available2459    61. 09-24-13 FTR, Indianapolis, IN--Moderated multiple panels2460discussing rail freight and rail equipment markets and outlooks; No2461presentations2462    62. 10-24-2013 Michigan State University, Chicago, IL--Presentation2463no longer available246420122465    63. 02-12-12 Michigan State University, Chicago, IL--Presentation2466no longer available2467    64. 03-04-12 REF, La Quinta, CA--Presentation no longer available2468    65. 07-24-12 Proppants Summit, Denver, CO--Presentation no longer2469available2470    66. 09-18-12 FTR, Indianapolis, IN--Moderated multiple panels2471discussing rail freight and rail equipment markets and outlooks, no2472presentations2473    67. 10-04-12 SWARS, The Woodlands, TX--Presentation no longer2474available247520112476    68. 03-06-11, REF, La Qunita, CA--Presentation no longer available2477    69. 03-29-11, SEARS, Savannah, GA--Presentation no longer available2478    70. 06-08-11, ASLRRA, Milwaukee, WI--Presentation no longer2479available2480    71. 09-13-11, FTR, Indianapolis, IN--Moderated multiple panels2481discussing rail freight and rail equipment markets and outlooks; No2482presentations248320102484    72. 01-26-10, Northwestern University, Transportation Center,2485Sandhouse Gang, Evanston, IL--Presentation no longer available2486    73. 03-07-10, Rail Equipment Finance Conference, La Qunita, CA--2487Presentation no longer available2488    74. 05-24-10, DTE, Denver, CO--Presentation no longer available2489    75. 05-26-10, Paper & Forest Products Transportation Committee2490(PFPTC)/National Association of Rail Shippers (NARS), Washington, DC--2491Presentation no longer available2492    76. 09-14-10, FTR, Indianapolis, IN--Moderated multiple panels2493discussing rail freight and rail equipment markets and outlooks; No2494presentations249520092496    77. 03-01-09, REF, La Qunita, CA--``The Market Outlook for Covered2497Hoppers'', Presentation no longer available2498    78. 05-26-09, National Association of Rail Shippers, Chicago, IL,2499``Rail Equipment Market Outlook'', Presentation no longer available2500    79. 08-25-09, FTR, Indianapolis, IN--``The Outlook for Rail Freight2501and Equipment'', Presentation no longer available250220072503    80. 08-27-07, FTR, Indianapolis, IN--``The Outlook for Rail Freight2504and Equipment'', Presentation no longer available250520062506    81. 04-06-2006, North American Rail Mechanical Operations Seminar,2507``A Cooperative Approach to Change''2508    82. 05-06-2006, North America Rail Shippers Association Annual2509Meeting, ``Shaping Our Destiny Through Collaboration''2510    83. 07-27-2006, Informa Economics--Transportation and Logistics2511Roundtable, ``Railcar Availability and Leasing Developments''251220052513    84. 05-25-2005, Paper and Forest Industry Transportation Committee2514Meeting, ``Rail Industry and Equipment Outlook for the Forest Products2515Industry''2516    85. 08-22-05, 2005, AAR Damage Prevention & Freight Claim2517Conference, ``Observations about Today's Boxcar Fleet''2518    86. 09-07-2005, FTR Associates' 2005 Freight Transportation2519Conference, ``America's Freight Transportation through 2009''2520    87. 11-10-2005, Association of Car Accounting and Car Service2521Officers' Annual Meeting, ``Today's North American Rail Car Fleet What2522is it Today? Some Implications and Consequences for the Future''252320042524    88. 04-16-2004, Paper and Forest Industry Transportation Committee,2525``Outlook for the Boxcar Fleet''252620032527    89. 03-02-2003, TAPP! Paper Workshop, ``GE Rail's Paper Quality2528Boxcar Survey''252920022530    90. 08-26-2002, American Shortline & Regional Railroad Association,2531Central/Pacific Region, ``The GE Boxcar Fleet and Deprescription''2532    91. 09-30-2002, American Shortline & Regional Railroad Association,2533Southern Region, ``The GE Boxcar Fleet and Deprescription''2534    92. 10-14-2002, American Shortline & Regional Railroad Association,2535Eastern Region, ``The GE Boxcar Fleet and Deprescription''253619962537    93. February 1996, Wisconsin Pulp & Paper Manufactures2538Association--``An Overview of the Boxcar Fleet and Railcar Leasing'',2539Presentation no longer available2540                                 ______25412542             Appendix D--Articles where interviewed/quoted254320252544    1. https://www.railwayage.com/news/a-wolfe-at-stbs-door-will-he-2545make-entry/ (July 30, 2025--not directly quoted)25462547    2. https://www.railwayage.com/news/kloster-schultz-chosen-for-stb-2548by-potus-47/ (September 11, 2025--not interviewed for this article but2549includes a quote from him from July, citing the ``A Wolfe. . .''2550article--quote is not in that prior article)255120242552    3. https://www.progressiverailroading.com/rai1Prime/details/Survey-2553says-Caveats-abound-but-rail-finance-and-leasing-execs-expect-a-2554slightly-better-year--71195 (early 2024)25552556    4. https://www.railwayage.com/financeleasing/there-will-be-hell-to-2557pay/?RAchan2558nel=home (June 25, 2024--not quoted but providing data from Integrity2559Rail Partners)25602023 (none found)25612022 (none found)25622021 (none found)256320202564    5. https://www.trains.com/trn/news-reviews/news-wire/76560-2/ (June256526, 20202566--not direct quote)25672019 (none found)256820182569    6. https://tlimagazine.com/news/alltranstek-llc/ (June 25, 2018)257020172571    7. https://www.bizjournals.com/stlouis/news/2017/10/31/american-2572railcar-indu2573stries-hit-by-lower-demand-as.html (October 31, 2017--not directly2574quoted)257520162576    8. https://www.lohud.com/story/news/2016/07/13/oil-trains-using-2577fewer-older-tank-cars-official-says/87052990/ (July 13, 2016--Article2578about NTSB roundtable mentioned below near end of this document)25792580    9. https://www.progressiverailroading.com/mechanical/article/2581AllTranstek-tackles-imploding-tank-car-legend-on-MythBusters-TV-show--25824762l (March 2016)258320152584    10. https://www.marketwatch.com/story/shortage-of-railroad-boxcars-2585has-ship2586pers-fuming-2015-06-21 (June 21, 2015)2587Earlier than 20152588    11. https://www.ttnews.com/articles/icahn-tank-car-maker-joins-2589industry-defying-oils-decline (November 6, 2014)25902591    12. https://www.logisticsmgmt.com/article/2592cn_announces_plan_to_acquire_new_2593freight_cars_and_containers (September 13, 2012)2594                                 ______25952596Commerce, Science, and Transportation, 119th Congress by Richard James2597                                Kloster2598    I would like to submit clarifications for the following three2599questions identified by the Committee. They are:26002601   A.4--Please clarify if the address listed is Mr. Kloster's2602        residence or place of employment, or both. Provide a supplement2603        as appropriate.26042605   A.11--Mr. Kloster's OGE 278e and Ethic Agreement indicates2606        that he consults with Gerson Lehrman Group, Inc., AlphaSights2607        Ltd., Capvision Pro Corporation, and Guidepoint Global LLC.2608        These are also listed under E.2 of the questionnaire. Please2609        clarify this and provide a supplement as necessary.26102611    Yes, I am supplementing my response to A.11 with these four2612        companies for whom I was a consultant.26132614   A.18--We received the presentation slides that Mr. Kloster2615        provided, but please provide a link to each presentation where2616        available as well. Please provide a supplement as necessary.26172618    All of these events have been double checked and on-line links to2619        the presentations are NOT available for any of them.26202621    The undersigned certifies that the information contained in the2622public addendum is true and correct.26232624/s/ Richard J. Kloster Date: October 27, 202526252626    Mr. Sheehy. Thank you, Mr. Kloster.2627    Ms. Schultz, you are recognized for your opening statement.26282629  STATEMENT OF MICHELLE A. SCHULTZ, NOMINEE TO CONTINUE AS A2630              MEMBER, SURFACE TRANSPORTATION BOARD26312632    Ms. Schultz. Thank you, Senator Cruz, Ranking Member2633Cantwell, Senator Lujan, and distinguished Members of the2634Commerce, Science, and Transportation Committee, I am honored2635to appear before you today as you consider my nomination for a2636second term as a Member of the Surface Transportation Board. I2637am also grateful to President Trump for his continued2638confidence in me through this renomination.2639    I wish to begin by expressing my sincere gratitude to the2640people who have supported me throughout my professional life.2641First and foremost, I thank my late parents, Ron and Bonnie2642Albright, whose example instilled in me the belief that hard2643work and integrity are the true measure of success. That2644principle guides me in everything I do. I would also like to2645acknowledge my brother, Dave; my sister-in-law, Heather, and my2646nephews Carson and Zach. Though they are not here today, their2647love and support are profoundly meaningful to me.2648    Joining me today are my two daughters, Sophia and Ella2649Schultz, who are my greatest inspiration. Having them here2650today means the world to me. Last, I would like to thank my2651fellow Board Members, Chairman Fuchs, and Member Hedlund, for2652joining me today, and for their continued collegiality and2653dedication to our shared mission.2654    For nearly five years, I have had the honor and privilege2655of serving on the Surface Transportation Board. From the2656beginning, I recognized the Board's critical role as the2657economic regulator of the freight rail industry and its2658responsibility for resolving service issues involving freight2659rail carriers and interstate passenger rail entities along with2660certain limited jurisdictional matters. While that remains true2661today, my time on the Board has deepened my appreciation for2662the complexity and significance of its work.2663    By listening to stakeholders, reviewing the evidentiary2664record, and applying the law, I have gained a fuller2665understanding of how the Board's decisions affect American2666consumers, the supply chain, and ultimately the Nation's2667economy.2668    During this time, I have worked closely with my colleagues2669and dedicated staff of the Board to ensure that the Nation's2670rail network operates efficiently and reliably. As a member, I2671have had the opportunity to navigate a wide range of complex2672and consequential challenges that reflect the evolving demands2673on our freight and passenger rail systems. These include:2674mergers, abandonments, service reliability issues, rail line2675construction applications, restoration of rail service, data2676modernization, on-time performance oversight, and rate review2677processes.2678    In every matter that comes before the Board, I am guided by2679several core principles, the evidentiary record, the governing2680law, and the policy objectives set forth by Congress in the2681rail transportation policy. I am deeply aware of the impact2682that Board decisions have on the parties who appear before us2683and on the broader public.2684    I take seriously the trust placed in me by Congress and the2685President. And I approach each case with fairness,2686impartiality, and a steadfast commitment to applying the law on2687its merits, always mindful of what best serves the long-term2688health and vitality of the National Rail Network.2689    If confirmed, I will continue this approach and remain2690committed to advancing the Board's mission. I look forward to2691continuing to work collaboratively with industry stakeholders,2692my fellow members, and this Committee to address the important2693issues that come before the Board.2694    Thank you for your time and consideration, and I look2695forward to answering any questions you may have.2696    [The prepared statement and biographical information of Ms.2697Schultz follow:]26982699  Prepared Statement of Michelle A. Schultz, Nominee to Continue as a2700                  Member, Surface Transportation Board2701    Thank you, Chairman Cruz, Ranking Member Cantwell, and2702distinguished Members of the Commerce, Science, and Transportation2703Committee. I am honored to appear before you today as you consider my2704nomination for a second term as a Member of the Surface Transportation2705Board (``Board''). I am also grateful to President Trump for his2706continued confidence in me through this renomination.2707    I wish to begin by expressing my sincere gratitude to the people2708who have supported me throughout my professional life. First and2709foremost, I thank my late parents, Ron and Bonnie Albright, whose2710example instilled in me the belief that hard work and integrity are the2711true measure of success. That principle guides me in everything I do. I2712would also like to acknowledge my brother Dave Albright, my sister-in-2713law Heather, and my nephews, Carson and Zach. Though they are not here2714today, their love and support are profoundly meaningful. Joining me2715today are my two daughters, Sophia and Ella Schultz, who are my2716greatest inspiration. Having them here today means the world to me.2717Lastly, I would like to thank my fellow Board Members, Chairman Fuchs2718and Member Hedlund, for joining me today and for their continued2719collegiality and dedication to our shared mission.2720    For nearly five years, I have had the honor and privilege of2721serving on the Surface Transportation Board. From the beginning, I2722recognized the Board's critical role as the economic regulator of the2723freight rail industry and its responsibility for resolving service2724issues involving freight rail carriers and interstate passenger rail2725entities, along with certain limited jurisdictional matters. While that2726remains true today, my time on the Board has deepened my appreciation2727for the complexity and significance of its work. By listening to2728stakeholders, reviewing the evidentiary record, and applying the law, I2729have gained a fuller understanding of how the Board's decisions affect2730American consumers, the supply chain and ultimately, the Nation's2731economy.2732    During this time, I have worked closely with my colleagues and the2733dedicated staff of the Board to ensure that our Nation's freight rail2734network operates efficiently and reliably. As a Member, I have had the2735opportunity to navigate a wide range of complex and consequential2736challenges that reflect the evolving demands on our freight and2737passenger rail systems. These include mergers, abandonments, service2738reliability issues, rail line construction applications, restoration of2739rail service, data modernization, on-time performance oversight, and2740rate review processes.2741    In every matter that comes before the Board, I am guided by several2742core principles: the evidentiary record, the governing law, and the2743policy objectives set forth by Congress in the Rail Transportation2744Policy. I am deeply aware of the impact that Board decisions have on2745the parties who appear before us and on the broader public. I take2746seriously the trust placed in me by Congress and the President, and I2747approach each case with fairness, impartiality, and a steadfast2748commitment to applying the law on its merits--always mindful of what2749best serves the long-term health and vitality of the national rail2750network.2751    If confirmed, I will continue this approach and remain committed to2752advancing the Board's mission. I look forward to continuing to work2753collaboratively with industry stakeholders, my fellow Members, and this2754Committee to address the important issues that come before the Board.2755    Thank you for your time and consideration. I look forward to2756answering any questions you may have.2757                                 ______27582759                      a. biographical information2760    1. Name (Include any former names or nicknames used):27612762        Michelle Albright Schultz (2003 to present)2763        Michelle Mummert Albright27642765    2. Position to which nominated: Member--Surface Transportation2766Board.2767    3. Date of Nomination: September 10, 2025.2768    4. Address (List current place of residence and office addresses):27692770        Residence: Information not released to the public.2771        Office: Information not provided.27722773    5. Date and Place of Birth: Information not provided.2774    6. Provide the name, position, and place of employment for your2775spouse (if married) or domestic partner, and the names and ages of your2776children (including stepchildren and children by a previous marriage).27772778        James D. Schultz (Separated. July 2021. Divorced, September2779        2025)2780        Executive Vice President, Global Legal and Public Policy2781        Scientific Games27822783    7. List all college and graduate schools attended, whether or not2784you were granted a degree by the institution. Provide the name of the2785institution, the dates attended, the degree received, and the date of2786the degree.27872788        Pennsylvania State University, BA English--1990-199427892790        University of Manchester, Spring 1994 (Study abroad)27912792        Widener University School of Law, JD--1995-199827932794        University of Pennsylvania, MGA--2006-200827952796    8. List all post-undergraduate employment, including the job title,2797name of employer, and inclusive dates of employment, and highlight all2798management-level jobs held and any non-managerial jobs that relate to2799the position for which you are nominated.28002801        Hanover Concrete Company, Treasurer (8/98-12/99)28022803        Superior Court of Pennsylvania-Law Clerk (1/00-6/00)28042805        United States Bankruptcy Court-Law Clerk (7/00-1/02)28062807        White and Williams LLP--Associate (1/02-8/06)28082809        Southeastern Pennsylvania Transportation Authority (8/06-1/21)2810                Manager, Legislative Affairs2811                Director, Legislative Affairs2812                Deputy General Counsel28132814        Surface Transportation Board (1/21 to Present)28152816        Management positions include serving as the Treasurer of2817        Hanover Concrete Co. 1/96-12/99); Director of Legislative2818        Affairs (10/10-12/13); Deputy General Counsel (1/14 to 1/21);2819        and Vice Chairman of the Surface Transportation Board (2/21-2/2820        22, 1/25 to present).28212822    9. Attach a copy of your resume.2823    Please see attached.2824    10. List any advisory, consultative, honorary, or other part-time2825service or positions with Federal, State, or local governments, other2826than those listed above after 18 years of age.2827    Not applicable.2828    11. List all positions held as an officer, director, trustee,2829partner, proprietor, agent, representative, or consultant of any2830corporation, company, firm, partnership, or other business, enterprise,2831educational, or other institution.28322833        Passive Member--Tamarack Four LLC2834        I did not hold any other positions.28352836    12. List all memberships you have had after 18 years of age or2837currently hold with any civic, social, charitable, educational,2838political, professional, fraternal, benevolent or religiously2839affiliated organization, private club, or other membership organization2840(You do not have to list your religious affiliation or membership in a2841religious house of worship or institution). Include dates of membership2842and any positions you have held with any organization. Please note2843whether any such club or organization restricts membership on the basis2844of sex, race, color, religion, national origin, age, or disability.28452846        The Union League of Philadelphia. The club does not restrict2847        membership on the basis of sex, race, color, religion, national2848        origin, age, or handicap.2849        March 2015-July 2021.28502851    13. Have you ever been a candidate for and/or held a public office2852(elected, non-elected, or appointed)? If so, indicate whether any2853campaign has any outstanding debt, the amount, and whether you are2854personally liable for that debt. No.2855    14. List all memberships and offices held with and services2856rendered to, whether compensated or not, any political party or2857election committee within the past ten years. If you have held a paid2858position or served in a formal or official advisory position (whether2859compensated or not) in a political campaign within the past ten years,2860identify the particulars of the campaign, including the candidate, year2861of the campaign, and your title and responsibilities.2862    Not applicable.2863    15. Itemize all political contributions to any individual, campaign2864organization, political party, political action committee, or similar2865entity of $200 or more for the past ten years.286620152867        Pennsylvania Future Fund $1000.00 (February)28682869        Williams for Mayor $1000.00 (March)28702871        Keystone Alliance $1000.00 (April)28722873        Kevin Dougherty for Pennsylvania $1000.00 (May)28742875        Chris Christie for President $2700.00 (December)28762877        Friends of Pat Toomey $1000.00 (January)28782879        Friends of Bill Shuster $1000.00 (April)28802881        Keystone Alliance $1000.00 (April)28822883        Friends of Pat Toomey $1000.00 (May)28842885        Friends of Alex Charlton $1000.00 (October)28862887        Friends of Alex Charlton $1000.00 (November)288820172889        Not applicable.289020182891        Cozen O'Connor Pac $3100.00 (Various dates-January through2892        June)28932894        Friends of Ken Lawrence $500.00 (May)28952896        Republican Party of Pennsylvania $2810.05 (August)28972898        McGarrigle for Senate $500.00 (August)28992900        Cozen O'Connor PAC $3100.00 (October)290120192902        Cozen O'Connor PAC $400.00 (January)29032904        Brian Fitzpatrick for Congress $1000.00 (February)29052020-20252906        Not applicable.29072908    16. List all scholarships, fellowships, honorary degrees, honorary2909society memberships, military medals, and any other special recognition2910for outstanding service or achievements.2911    Not applicable.2912    17. List all books, articles, columns, letters to the editor,2913Internet blog postings, or other publications you have authored,2914individually or with others. Include a link to each publication when2915possible. If a link is not available, provide a digital copy of the2916publication when available.2917    Not applicable.2918    18. List all speeches, panel discussions, and presentations (e.g.,2919PowerPoint) that you have given on topics relevant to the position for2920which you have been nominated. Include a link to each publication when2921possible. If a link is not available, provide a digital copy of the2922speech or presentation when available.29232924        Southwest Association of Rail Shippers (SWARS)2925        September 30, 2021--Fort Worth, TX (Attached)29262927        Association of Transportation Law Professionals Transportation2928        Forum (ATLP)2929        November 8, 2021--Virtual (Panel Discussion--Not applicable)29302931        Transportation Elevator & Grain Merchants Association 20222932        Annual Meeting (TEGMA)2933        January 27, 2022--Phoenix, AZ (Panel Discussion--Not2934        applicable)29352936        Northeast Association of Rail Shippers (NEARS)2937        April 7, 2022--Baltimore, MD (Attached)29382939        Association of Transportation Law Professionals--Transportation2940        Forum (ATLP)2941        November 2, 2022--Washington, D.C. (Panel Discussion--Not2942        applicable)29432944        National Grain & Feed Association Annual Convention (NGFA)2945        March 21, 2023--Palm Springs, CA (Attached)29462947        Institute of Scrap Recycling Industries2948        April 19, 2023--Nashville, TN (Q&A--Not applicable)29492950        Wolfe Research--Global Transportation Conference2951        May 24, 2023--New York, New York (Attached)29522953        Association of Transportation Law Professionals Annual2954        Conference (ATLP)2955        June 27, 2023--Toronto, Canada (Q&A--Not applicable)29562957        The Fertilizer Institute Conference--(TFI)2958        November 14, 2023--New Orleans, LA (Panel Discussion--Not2959        applicable)29602961        Soybean & Grain Transportation Conference (SSGA)2962        March 14, 2024--Toledo, OH (Attached)29632964        American Petroleum Institute (API)2965        June 4, 2024--Washington, DC (Q&A--Not applicable)29662967        Association of Transportation Law Professionals Annual2968        Conference (ATLP)2969        June 24, 2024--Denver, CO (Panel Discussion--Not applicable)29702971        MEGA Supply Chain Societies of Delaware Valley Meeting2972        October 10, 2024--Gwynedd Valley, PA (Attached)29732974        Private Railcar Food and Beverage Association (PRFBA)2975        October 23, 2024--Virtual (Attached)29762977        RailTrends2978        November 14, 2023--New York, New York (Attached)29792980        Association of Transportation Law Professionals Transportation2981        Forum (ATLP)2982        December 5, 2024--Washington, D.C. (Panel Discussion--Not2983        applicable)29842985        Northeast Association of Rail Shippers (NEARS)2986        September 19, 2025--Groton, CT (Q&A--Not applicable)29872988    19. List all public statements you have made during the past ten2989years, including statements in news articles and radio and podcasts and2990television appearances, which are on topics relevant to the position2991for which you have been nominated, including dates. Include a link to2992each statement when possible. If a link is not available, provide a2993digital copy of the statement when available.2994    Not applicable.2995    20. List all digital platforms (including social media and other2996digital content sites) on which you currently or have formerly operated2997an account, regardless of whether or not the account was held in your2998name or an alias. Include the full name of an ``alias'' or ``handle'',2999including the complete URL and username with hyperlinks, you have used3000on each of the named platforms. Indicate whether the account is active,3001deleted, or dormant. Include a link to each account if possible.30023003        Linkedin: Michelle Schultz30043005        Linkedin.com/in/michelle-schultz-47801aa30063007        Facebook: Michelle Albright Schultz3008        www.facebook.com/michelle.a.schultz.53009        @michellealbrightschultz30103011        Instagram: Michelle Albright Schultz3012        Michelleschultz749530133014        X: @mich_albright30153016        Tiktok: M Sl2953017        @user69173715230183019        Wikipedia: Michelle A. Schultz3020        https://en.wikipedia.org/wiki/Michelle_A._Schultz30213022    21. Please identify each instance in which you have testified3023orally or in writing before Congress in a governmental or non-3024governmental capacity and specify the date, committee, and subject3025matter of each testimony.3026    I testified before the Committee on Commerce, Science and3027Transportation of the United States Senate on April 11, 2018, regarding3028my nomination to the Surface Transportation Board.3029    I testified before the Committee on Transportation and3030Infrastructure of the House of Representatives, the Subcommittee on3031Railroads, Pipelines, and Hazardous Materials on May 12, 2022.3032    22. Given the current mission, major programs, and major3033operational objectives of the department/agency/commission/corporation3034to which you have been nominated, what in your background or employment3035experience do you believe affirmatively qualifies you for appointment3036to the position for which you have been nominated, and why do you wish3037to serve in that position?3038    During my service on the Surface Transportation Board (``STB'')3039over the past five years, I have had the privilege of contributing to3040the Board's critical work overseeing our Nation's freight rail network.3041In this role, I have participated in decisions and rulemakings3042addressing service reliability, competition, rate disputes, and3043regulatory compliance always recognizing the need to balance the needs3044of shippers, carriers, and the broader public. This work has allowed me3045to apply my legal training and transportation policy background on a3046national scale, helping to ensure a fair, transparent, and efficient3047regulatory environment.3048    Prior to my appointment, I worked for the Southeastern Pennsylvania3049Transportation Authority (``SEPTA'') for over 12 years. During that3050time, I became well versed in how railroads operate, how they interact3051with each other, and the challenges associated with those interactions.3052At SEPTA, I handled legislative, regulatory and compliance issues at3053the local, state and Federal levels, including matters related to the3054construction and reconstruction of commuter rail lines. Earlier in my3055career, I served as a law clerk for both the Superior Court of3056Pennsylvania and the United States Bankruptcy Court for the Eastern3057District of Pennsylvania. Additionally, I was an attorney at a law firm3058in Philadelphia. My practice focused on creditor's rights and3059commercial litigation.3060    I am seeking reappointment to the STB because I remain committed to3061serving the public through fair and balanced oversight of the Nation's3062freight rail network and other surface transportation. Our nation's3063economy and communities depend on a strong, reliable network and I3064believe the combination of my regulatory experience, legal expertise,3065and practical transportation knowledge enables me to continue3066contributing meaningfully to the Board's mission.3067    23. What do you believe are your responsibilities, if confirmed, to3068ensure that the department/agency/commission/corporation has proper3069management and accounting controls, and what experience do you have in3070managing a large organization?3071    As a Member of the Surface Transportation Board, it will continue3072to be incumbent upon me and my colleagues to issue decisions in a3073timely manner. With regard to the financial business and management of3074the STB, I believe Members are responsible for ensuring that proper3075management and accounting controls are in place and functioning3076effectively by ensuring that agency expenditures comply with3077appropriations law and are used only for authorized purposes; by3078following Office of Management and Budget guidance; and by meeting all3079statutory and congressional reporting requirements.3080    The STB is annually audited by an independent audit firm, subject3081to the Department of Transportation's Office of Inspector General's3082oversight and in accordance with the Generally Accepted Government3083Auditing Standards. My responsibilities would also include continuing3084to implement the recommendations made by the independent audit firm.3085    24. What do you believe to be the top three challenges facing the3086department/agency/commission/corporation, and why?3087    I believe the top three challenges facing the agency are as3088follows:30893090        Continued Reform of Agency Process30913092        As part of Chairman Fuchs' broader initiative to enhance agency3093        efficiency, transparency and accountability, I was asked by him3094        to hold informal listening sessions with the practitioners who3095        routinely appear before the Board. The goal of the sessions was3096        to identify practical ways to streamline the Board's processes3097        and procedures, particularly those impacting litigants and3098        parties in matters before the Board.30993100        Over several days, I met with around 20 practitioners who3101        provided more than 100 specific ideas for process improvements.3102        The insight that was provided was incredibly helpful and a3103        perspective that could only be provided by those who were3104        routinely filing matters before the Board. Following the review3105        and feedback, I submitted five initial recommendations to3106        Chairman Fuchs which focused on actionable steps to streamline3107        procedures such as enhancing case management and reducing3108        administrative burdens.31093110        At this time, proactive steps have been taken to advance all3111        five initiatives. I believe in the coming years, the Board3112        should consider more of the ideas and implement them. While all3113        of the suggestions address process reform, many of the3114        suggestions would require rulemaking proceedings.31153116        Concluding Regulatory and Adjudicatory Proceedings31173118        In the past, the Surface Transportation Board has experienced a3119        backlog on its docket. During the listening sessions I led in3120        May 2025 with legal practitioners who routinely appear before3121        the Board, a reoccurring comment was the impact that these3122        delays have on stakeholders who have pending matters before the3123        Board. Those stakeholders include Class I railroads, shippers,3124        passenger rail operators, local governments, and landowners.3125        These entities can face significant operational, financial and3126        strategic consequences from delays in adjudicatory matters and3127        rulemakings. In the past, some of these proceedings have3128        languished for years due to backlogs. Delays force parties to3129        incur ongoing legal, consulting, and compliance costs without3130        resolution. They can also delay capital investments which stall3131        growth and lead to costlier alternatives like increased3132        reliance on trucking.31333134        In January 2025, Chairman Fuchs began ongoing efforts to3135        address case backlogs as a priority for the agency to promote3136        transparency and accountability. Under his leadership, Chairman3137        Fuchs has implemented a reorganization of the agency to3138        streamline the internal review process of the Board. This3139        effort, along with process reform, has led to the agency3140        substantially increasing the speed of decisions. I believe it3141        is incumbent upon the Board to continue prioritizing any3142        outstanding matters as well as continuing to issue decisions in3143        a timely manner.31443145        Conducting Thorough Agency Analysis and Oversight31463147        Stakeholders provided positive feedback following the May3148        listening sessions. Many indicated that it was the first time3149        the Board has asked for this kind of insight and constructive3150        criticism. Based upon this feedback, the Board should consider3151        offering bi-annual reviews to create a regular, transparent3152        forum for stakeholders to assess the STB's processes and3153        provide actionable feedback on areas for improvement. This3154        initiative would enhance accountability by systematically3155        evaluating the Board's performance and holding the SIB3156        accountable to its mission of accountability and fair3157        regulation. Regular engagement would also ensure that diverse3158        perspectives from small shippers to Class I railroads are3159        incorporated, building upon the collaborative model of the 20253160        listening sessions. Bi-annual reviews would establish a3161        consistent feedback loop and would allow the SIB to adapt to3162        evolving industry needs and regulatory challenges.3163                   b. potential conflicts of interest3164    1. Describe all financial arrangements, deferred compensation3165agreements, and other continuing dealings with business associates,3166clients, or customers. Please include information related to retirement3167accounts, such as a 401(k) or pension plan.3168    I have no existing financial arrangements or deferred compensation3169agreements or dealings with business associates, clients, or customers.3170I participate in Southeastern Pennsylvania Transportation Authority3171(SEPTA) Defined Contribution Plan. While I will continue to participate3172in this defined contribution plan, SEPTA ceased making contributions3173upon my separation. I also participate in SEPTA's defined benefit plan,3174where I will receive a defined pension starting at age 62. These are3175listed in Section E. 1.3176    2. Do you have any commitments or agreements, formal or informal,3177to maintain employment, affiliation, or practice with any business,3178association, or other organization during your appointment? If so,3179please explain. No.3180    3. Indicate any investments, obligations, liabilities, or other3181relationships which could involve potential conflicts of interest in3182the position to which you have been nominated. Explain how you will3183resolve each potential conflict of interest.3184    I was employed by the Southeastern Pennsylvania Transportation3185Authority from 2006 until 2021. Upon confirmation of my first term as a3186Member of the STB, I entered into an Ethics Agreement and agreed not to3187participate personally and substantially in any particular matter where3188SEPTA was a party for a period of one year after my resignation from3189SEPTA. This time period has now passed, and I do not have any other3190potential conflicts of interest.3191    4. Describe any business relationship, dealing, or financial3192transaction which you have had during the last ten years, whether for3193yourself, on behalf of a client, or acting as an agent, that could in3194any way constitute or result in a possible conflict of interest in the3195position to which you have been nominated. Explain how you will resolve3196each potential conflict of interest.3197    I am not aware that I hold any financial interest that would raise3198a possible conflict of interest. However, in my Ethics Agreement, I3199have pledged that I will not participate personally and substantially3200in any particular matter in which I know that I have a financial3201interest directly and predictably affected by the matter, or in which I3202know that a person whose interests are imputed to me has a financial3203interest directly and predictably affected by the particular matter,3204unless I first obtain a written waiver, pursuant to 18 U.S.C.3205Sec. 208(b)(l). I understand that the interests of the following3206persons are imputed to me:32073208   Any spouse or minor child of mine;32093210   Any general partner of a partnership in which I am a limited3211        or general partner;32123213   Any organization in which I serve as an officer, director,3214        trustee, general partner, or employee, even if uncompensated;3215        and32163217   Any person or organization with which I am negotiating or3218        have an arrangement concerning prospective employment.32193220    5. Identify any other potential conflicts of interest and explain3221how you will resolve each potential conflict of interest.3222    I do not have any other potential conflicts of interest.3223    6. Describe any activity during the past ten years, including the3224names of clients represented, in which you have been engaged for the3225purpose of directly or indirectly influencing the passage, defeat, or3226modification of any legislation or affecting the administration and3227execution of law or public policy.3228    I have not engaged in influencing the passage, defeat or3229modification of legislation during the past ten years.3230                            c. legal matters3231    1. Have you ever been disciplined or cited for a breach of ethics,3232professional misconduct, or retaliation by, or been the subject of a3233complaint to, any court, administrative agency, the Office of Special3234Counsel, an Inspector General, professional association, disciplinary3235committee, or other professional group? If yes:32363237  a.  Provide the name of the court, agency, association, committee, or3238        group;32393240  b.  Provide the date the citation, disciplinary action, complaint, or3241        personnel action was issued or initiated;32423243  c.  Describe the citation, disciplinary action, complaint, or3244        personnel action;32453246  d.  Provide the results of the citation, disciplinary action,3247        complaint, or personnel action.32483249    No.3250    2. Have you ever been investigated, arrested, charged, or held by3251any Federal, State, or other law enforcement authority of any Federal,3252State, county, municipal, or foreign government entity, other than for3253a minor traffic offense? If so, please explain. No.3254    3. Have you or any business or nonprofit of which you are or were3255an officer ever been involved as a party in an administrative agency3256proceeding, criminal proceeding, or civil litigation? If so, please3257explain. No.3258    4. Have you ever been convicted (including pleas of guilty or nolo3259contendere) of any criminal violation other than a minor traffic3260offense? If so, please explain. No.3261    5. Have you ever been accused, formally or informally, of sexual3262assault, sexual harassment, or discrimination on the basis of sex,3263race, religion, or any other basis? If so, please explain. No.3264    6. Please advise the Committee of any additional information,3265favorable or unfavorable, which you feel should be disclosed in3266connection with your nomination.3267    It has been an extraordinary honor and privilege to serve on the3268Surface Transportation Board. I am profoundly grateful to President3269Trump for his nominations and trust in my ability to serve. I would3270also like to extend my sincere gratitude to the Senate Commerce3271Committee for their thoughtful consideration of my nomination. If3272granted the opportunity to continue, I am fully committed to supporting3273the stakeholders who depend on our Nation's surface transportation3274system by delivering diligent and equitable oversight of the3275transportation network that is vital to our Nation's economy and our3276communities.3277                     d. relationship with committee3278    1. Will you ensure that your department/agency/commission/3279corporation complies with deadlines for information set by3280congressional committees, and that your department/agency/commission/3281corporation endeavors to timely comply with requests for information3282from individual Members of Congress, including requests from members in3283the minority? Yes.3284    2. Will you ensure that your department/agency/commission/3285corporation does whatever it can to protect congressional witnesses and3286whistleblowers from reprisal for their testimony and disclosures? Yes.3287    3. Will you cooperate in providing the Committee with requested3288witnesses, including technical experts and career employees, with3289firsthand knowledge of matters of interest to the Committee? Yes.3290    4. Are you willing to appear and testify before any duly3291constituted committee of the Congress on such occasions as you may be3292reasonably requested to do so? Yes.32933294[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]32953296                                 ______32973298  Addendum to the questionnaire submitted to the Senate Committee on3299   Commerce, Science and Transportation, 119th Congress by Michelle3300                           Albright Schultz.3301    Upon further review, I have identified 17 additional submissions3302that are responsive to the Committee's questionnaire. They are as3303follows:3304    It is:3305    A.Q11, In my Senate Questionnaire from my 2019 nomination I3306included the following:33073308  a.  General Partner--Tamarack Four33093310  b.  Officer (Treasurer)--Gettysburg Concrete Company33113312    A.Q15, please include the following political contribution:3313    2016: $1,000, Democratic Party Joshua Shapiro for Attorney General3314    A.16--In the Senate Questionnaire I submitted for my 20193315nomination, I listed the Stephen B. Sweeney Award from the University3316of Pennsylvania for commitment to local government and public service.3317I did not include it in the submission to the 119th Congress because it3318was issued in 2010 which was outside of the ten year period. Q19,3319please include the following public statements made within the last ten3320years:33213322  a.  6/11/2025, Article, STB Looks to Streamline Operations. Railway3323        Age33243325  b.  6/1/2025, STB Press Release, STB Gathers More Than 100 Ideas From3326        Legal Practitioners to Streamline Board Processes33273328  c.  5/1/2025, STB Press Release, Vice Chairman Michelle Schultz to3329        Hold Listening Sessions on Legal Processes and Procedures33303331  d.  11/18/2024, Article, Railroads have turned the corner on service3332        and resiliency, analysts say FreightWaves33333334  e.  12/3/2024, Article, STB misses its own deadline for issuing3335        decision on CN's acquisition of Iowa Northern, TrainsPro33363337  f.  5/10/2024, STB Press Release, STB Chairman Martin Oberman Retires33383339  g.  3/24/2023, Article, STB's Michelle Schultz addresses recent rail3340        challenges. World-Grain33413342  h.  8/15/2023, Article, STB decides against BNSF's request to stay3343        coal order, FreightWaves33443345  i.  9/14/2023, Article, Viewpoint: The market, not the regulators,3346        should set freight rail prices, FreightWaves33473348  j.  6/26/2023, Article, STB orders BNSF to send more coal trains to3349        Montana mine, FreightWaves33503351  k.  1/22/2021, STB Press Release, Surface Transportation Board3352        Members Thank Ann Begeman, Congratulate Martin Oberman as3353        Chairmanship Changes Hands33543355  l.  7/11/2019, Article Senate Committee Approves STB Nominee Michelle3356        Schultz, Transport Topics33573358  m.  4/11/2018. Article, Senate Considers Presidential Nominees for3359        Surface Transportation Board, Transport Topics3360                                 ______33613362    Thank you for the introduction. It's so great to be here with all3363of you this afternoon in New York.3364    When I look at what we are facing in the rail industry, I am3365reminded of a quote from Paulo Coelho, the author of the Alchemist:33663367        ``When we least expect it, life sets us a challenge to test our3368        courage and willingness to change; at such a moment, there is3369        no point in pretending that nothing has happened or in saying3370        that we are not yet ready. The challenge will not wait.''33713372    The last few years have brought unprecedented challenges to the3373Nation's economy, our supply chain and the freight rail network. I am3374certain that everyone in this room has been following these challenges3375very closely. Supply chain disruptions have increased transportation3376costs for U.S. rail shippers in virtually every sector and industry.3377And while I know that unreliable service has cost rail shippers3378millions of dollars in lost profit, perhaps now just might be the time3379that these challenges are transformed into opportunities for change and3380for growth in the rail industry. Let me explain. ___3381    We all know that at the beginning of last year service was bad and3382getting worse. Velocity was down. ___ Terminal dwell and dwell at orgin3383was up for some railroads by double digits. And trains holding due to3384crew issues were also substantially up. We heard from many stakeholders3385about just how bad the service had gotten. The National Grain and Feed3386Association recounted how one of its members had to spend $3 million on3387secondary freight to keep animals fed, and another had to stop selling3388feed because a loaded train sat at origin for one week because of a3389lack of crew. In April, 2022, the Board held a two-day hearing on3390freight rail service challenges and heard from various industries and3391public officials including the Secretary of Transportation as well as3392executives from the Class I carriers. Not only did we hear in great3393detail about the extraordinary service disruptions, but also about the3394challenges associated with a rail labor shortage, which by the way,3395were pointed to by labor and the carriers themselves.3396    Immediately following the hearing, we issued an order requiring the3397reporting of service metrics and head counts. In the months that3398followed, we carefully monitored the bi-weekly reports and we started3399to see improvements across the network. During this time, Members of3400the Board met with the CEOs of the Class I carriers who shared their3401plans on service recovery and their plans to attract and retain rail3402labor during what we know was one of the tightest labor markets we have3403experienced in decades. Just a few weeks ago, the Board extended its3404temporary reporting period for all Class 1 carriers through the end of3405this year. And in that decision, the Board recognized that CSX met most3406of its service improvement targets and reduced CSX's reporting3407requirements.3408    As if the post-pandemic recovery did not present enough of a3409challenge, six months ago, the rail carriers and the unions were3410engaged in a labor dispute that posed a threat of bringing our freight3411rail network to a grinding halt. This would have cost our economy3412upwards of at least $1 billion per day and could have driven prices3413even higher for many consumer goods. And while the Board had no role in3414the negotiations, many of us held our breath along with the rest of the3415nation, until early December when the President signed a bill that3416imposed a settlement between labor and the carriers.3417    During the months leading up to the settlement, we became aware3418that Union Pacific was planning to reduce the number of cars on their3419network. Let me take a minute to walk through the issue. In order to3420reduce the number of cars, UP reached out to the customers that they3421believed had an excess number of cars on their system. UP then asked3422those customers to remove a certain number of cars within seven days.3423If a customer could not achieve UP's goal, a congestion embargo would3424be put in place unless the customer sought a permit. By the first week3425of December 2022, UP had put more than 1000 embargos in place for the3426year, and there were 141 active embargoes, all due to congestion. By3427way of comparison, in 2017, UP had implemented only 27. So in the3428second week of December, the Board conducted a two-day hearing with UP3429regarding the substantial increase in their use of embargoes as a3430method of reducing rail traffic congestion. As of April, 2023, UP3431discontinued its Pipeline Inventory Management Program and reduced3432their use of congestion-related embargos by 50 percent compared to last3433year. And while I applaud UP in its reduction, in my view, it's not3434enough because I understand the extreme difficulties that being3435embargoed places on a shipper. They have to assign manpower to deal3436with the issue, choose which shipments to reduce or delay, decide which3437receivers are going to be told that they aren't getting their shipment,3438and then try to move some traffic by truck, if they can. It just3439injects so much unnecessary difficulty and uncertainty as well as3440increased cost. And that's why I hope that UP's goal will be to achieve3441the industry standard.3442    At this point many of you may be wondering how do any of these3443circumstances lead to growth and transformation? Service disruptions?3444The threat of a national rail shutdown? Embargos? How could any of3445these circumstances lead to positive changes of any kind on the3446network?3447    Last year, I met with each of the Class I CEOs but two3448conversations in the latter part of the year stood out from all the3449others. Those were the meetings that I had with CEO Joe Hinrichs of CSX3450and CEO Alan Shaw of Norfolk Southern. As some of the other CEO's3451acknowledged, service was improving but was still not where they wanted3452it to be. But here's how these two meetings differed--both Joe and Alan3453talked about how they wanted to focus more on resiliency, taking a more3454customer-centric focus. It was also important to them to capture more3455freight volumes from truck and to improve their relationship with their3456employees. But perhaps most surprising to me, they were no longer going3457to focus exclusively on operating ratio and instead they talked about3458their goal to pivot toward growth. At the conclusion of both meetings,3459I found myself surprisingly in agreement with their goals and I hoped3460they would be successful--success in all of these areas would mean that3461these carriers would greatly improve in their ability to deliver3462predictable, reliable service to their customers and afford their3463customers the ability to ship more volume by rail instead of truck.3464    But at the same time, I also had to wonder, was this just a message3465that was being delivered behind closed doors to a regulator that they3466knew had been receiving a high number of complaints about rail service?3467Haven't the Carriers made promises of improved service in the past3468while at the same time promising their investors that they would reach3469an even lower operating ratio by reducing expenses--which often means3470cutting headcounts? How was this time any different?3471    Here, they were saying the opposite. They would not be identifying3472an OR goal and would be focusing on ``resiliency'' by actually3473increasing headcounts and improving retention. I would also say that3474what made this message different is that it was not just delivered to3475me but was also delivered publicly and directly to their investors. And3476what everyone knows is that resiliency is not just good for shippers,3477it's also good for the carriers as we watched this play out during the3478pandemic. There's a saying that comes to mind--luck is what happens3479when preparation meets opportunity. In order to take advantage of the3480surge in demand, grow their volumes, and provide predictable service,3481carriers needed to be prepared for it, and they were not.3482    And while no one could have predicted the pandemic or the national3483labor shortage that followed, what this experience has now shown is3484resiliency matters. ___ And the Carriers are making positive changes.3485Headcounts are increasing. According to our Office of Economics, total3486employment for the carriers is up by over 5 percent from last--with two3487Carriers--CSX and CPKC, now having reached pre-pandemic headcounts. And3488in recent weeks, all 6 of the Class I's have reached agreements3489awarding sick leave to some of their employees. I believe these3490agreements will further improve the quality of life for employees and3491most likely lead to a higher rate of retention and better resiliency.3492    And just to give some more credit where it's due, let me talk for a3493moment about CN which held its investor day just a little over three3494weeks ago. Like Norfolk Southern and CSX, CN is focused on growth,3495customer service and resiliency. CEO Tracy Robinson and COO Ed Harris3496stated that CN is focused on the ``right operating model'' and that3497``the Plan is Sacred.'' CN is committed to starting their trains on3498time, improving velocity and retaining its work force. CN went so far3499as to say ``that they are done cutting heads and that the way railroads3500make money is to keep things moving.'' Although CN was questioned3501extensively about its plans to increase capital expenditures, it is my3502hope that CN will be successful in its new operating model. If they3503are--they might better match the needs of shippers who routinely tell3504me that they want to ship more volume by rail.3505    One of the other reasons I am optimistic about the near future in3506the rail industry is the promise of what improved technology could do3507to benefit railroad-shipper relationships as well. When I first joined3508the Board two years ago, I was talking to a fellow Board Member and I3509was absolutely blown away to learn that you cannot track railcars as3510well as you can track an Amazon package. And today, I am still not sure3511about what is holding the industry back. But I do believe technology3512that would provide transparency might resolve a lot of the issues that3513rail customers are complaining about.3514    In my meetings with shippers, there are three main complaints that3515I hear about. First, they would like to ship more volume by rail.3516Second, they would like to have better communication with their3517Carriers about delayed shipments and the location of their rail cars.3518And third, and by far the most frequent complaint I hear about is the3519lack of predictable service. I think improved technology and better3520transparency on the network could give shippers at least part of what3521they are asking for--more knowledge about where their shipments are and3522when they will arrive.3523    Now I would like to spend a minute talking about the important and3524often difficult issue of regulation. The Surface Transportation Board3525is directed by Congress to follow the principles set forth in the Rail3526Transportation Policy enacted by Congress. While some of these3527principles are often viewed as competing, one such principle to quote3528``is to minimize the need for Federal regulatory control over the rail3529transportation system and to require fair and expeditious regulatory3530decisions when regulation is required.'' End quote. I call attention to3531this policy in particular because the plain words of the statute3532require the Board to implement regulations ``when they are required.''3533I believe when ``regulations are required'' is a viewpoint that differs3534greatly. To me, the role of the Board is to determine two things:3535whether there are issues that rise to the level of the need for3536regulatory action and whether the issue can be solved by regulation. In3537order to make that determination, the Board must consider both the3538principles of the Rail Transportation Policy as well as carefully3539consider any potential unintended consequences of the proposed3540regulatory solution. After input and comment from the industry, the3541Board must then consider whether the benefits of the proposed3542regulatory solution will outweigh any unintended harm.3543    If CSX, Norfolk Southern, and CN are successful in achieving their3544goals, they could accomplish more to improve service than any3545regulation that is implemented by the Board. At the end of the day,3546what shippers deserve is dependable service that is delivered with a3547customer-centric focus. And while opinions may differ, my own view is3548that the Carriers themselves will do a much better job of voluntarily3549achieving this goal across their networks than perhaps any changes that3550can be put into place through regulation. This is not to say that there3551are not circumstances that warrant regulation. It is just to say that3552in my view, the Carriers are in the best position to make operational3553decisions on how to meet the needs of their customers. And while3554regulations may correct certain issues, at the end of the day, only the3555Carriers themselves can deliver a good service product that meets the3556needs of their customers.3557    And so, again, it is my sincere hope that CSX, Norfolk Southern,3558and CN can successfully achieve the goals they've outlined not just for3559the sake of their customers but for the industry as a whole. If they3560are successful, this could result in higher headcounts, the ability to3561meet more of their customers' needs as well as better fluidity on the3562network. And most importantly, if CSX, Norfolk Southern, and CN are3563successful, perhaps this would inspire some other Carriers to pivot3564toward growth as well. Improving the freight rail network and shipping3565more volume of freight by rail will not only better meet the needs of3566the carrier's customers, it will improve the Nation's economy and3567reduce costs for every U.S. consumer.3568    I believe these remain challenging times on the freight rail3569network but I can't help but be optimistic about the future. There are3570a lot of opportunities for rail service to improve. Rail carriers, at3571least some of them, are showing that they have the courage and3572willingness to change their operating models with a goal to improve3573service, become more reliable, and grow volumes. The winds, I think,3574are shifting, and so I think we might see in these difficult times the3575beginnings of a great and much needed transformation in the rail3576industry.3577    I look forward to our continued conversation and thank all of you3578for your continued interest in the state of the freight rail network.3579Introduction3580    First, I want to thank the sponsors of the Mega Meeting for having3581me speak tonight: the Institute for Supply Management, the Southeastern3582Pennsylvania Alliance Chapter of ASCM, the Council of Supply Chain3583Management Professionals, the Traffic Clubs of Philadelphia and the3584Lehigh Valley, and the Warehousing Education and Research Council.3585Also, in particular, I want to thank Paul Delp of Lansdale Warehouse3586Company for reaching out to me and asking me to speak. Paul served on3587the STB's Railroad Shipper Transportation Advisory Council for 6 years.3588Paul--thank you for your service and for your willingness to share your3589insight with the Members of the Board.3590    Before I begin, I want to get a couple of preliminary items out of3591the way: First, nothing that I say tonight represents the views of the3592Surface Transportation Board or any of the other members. And second, I3593am unfortunately prohibited from discussing any pending proceedings3594before the Board or matters that are currently in litigation or on3595appeal.3596    With that out of the way, can I just say, what a time to be giving3597this speech. I feel like the supply chain is often an afterthought--3598something that just works, and when it's working, people don't think3599about how the journey their new car, or stove, or whatever else is that3600they purchased, got to them. Which port did it come in through? Was it3601put on a truck, or shipped by rail? Who made those decisions? That is,3602of course, until the something goes wrong. And it is never good when3603the supply chain is in the news, is it? When it is, its never because3604of how smoothly things are moving.3605    And speaking of times when the supply chain is in the news -as you3606all know, earlier this month we had a brief longshoreman strike on the3607East and Gulf Coasts. That certainly affected traffic flows here, but3608it also affected traffic flows on the West Coast. Union Pacific said3609that its container volumes were up 40 percent year over year in3610September as shippers diverted traffic in anticipation of the strike.3611BNSF also noted increase in volumes and both railroads had contingency3612plans in place to deal with the increase in traffic. I am extremely3613grateful that the strike has ended and the ports are back on line--with3614regard to this region, in August, I had the opportunity to tour the3615Port of Philadelphia and was hosted by Dominic O'Brien. During the3616tour, I was able to hear and experience first hand how vital the Port3617is to this region and its economic growth. It affects which companies3618locate here and who does business here. For example, Ikea, after3619encountering delays at the Port of New York and New Jersey, decided to3620run everything through Philadelphia. To turn this back to rail, good3621rail service at the Port means that containers can move efficiently and3622reliably which gives the Port the ability to move more goods. Growth in3623rail capacity enables growth at the Port and ultimately leads to3624economic growth for the Greater Philadelphia region.3625    And so now, I would take a moment to talk about the role of the3626Surface Transportation Board in the economy, including a little bit of3627background on the Board for anyone who isn't familiar with us. I'd also3628like to highlight a few recent issues that the Board has dealt with,3629including the hearing on growth in the freight rail industry we held3630just last month. And I'd like to talk about what I see as the current3631outlook for the Board, as well as for rail service generally. In a room3632full of supply chain professionals, I know that all of you know even3633better than I do how interconnected the supply chain is. As I said3634before, I do not speak for the Board, and I don't speak for my3635colleagues on the Board. But I hope that you'll gain insight from3636hearing at least one Member's thoughts on the role of the Board in the3637supply chain and how the growth of freight rail is a rising tide that3638lifts all boats.3639II. The Role of the Board3640    And so what is the role of the Board? The Surface Transportation3641Board was created in 1996 to take over many of the functions of the3642Interstate Commerce Commission. It is an independent agency, and3643although we have several areas of responsibility, our primary role3644involves economic regulation of the freight rail industry. We hear3645cases brought by shippers challenging rates, and we have jurisdiction3646over railroad practices and service. We also review rail mergers, rail3647construction, and abandonment of railroads. In some regards the rail3648industry has been deregulated, but there is still a place and a need3649for regulation since many shippers do not have options when it comes to3650which railroad they use or whether they can use another mode of3651transportation at all. I am a big believer in competition, and so I3652want competition and the market to drive railroads' business decisions,3653not government regulations. But where there is a market failure or3654there is insufficient competition, that is the core area of where the3655Board should regulate.3656    In a sense, our role is often as a backstop. When the rail network3657is not working, there can be significant consequences, both for the3658network as a whole and for an individual shipper. In either situation,3659the effects can reverberate from the shipper to the receiver, and to3660other consumers. And so while it is always my hope that railroads run3661their networks efficiently and provide good service to shippers, there3662are times when challenges occur and the Board is called upon to3663intervene.3664III. Recent Board Issues3665    And now I would like to turn to some recent Board issues. The STB3666is a small agency, but a busy one. And while I have not agreed with all3667of the Board's actions over the last few years, I think that overall we3668have had a positive impact on our small part of the supply chain.3669First, in 2022, rail service had reached a crisis point. The Board held3670a hearing and imposed new temporary reporting requirements related to3671service and employment levels. They say sunshine is the best3672disinfectant, and I think that requiring the Big Four railroads--Union3673Pacific, BNSF, CSX, and Norfolk Southern--to identify service and3674employment targets and regularly report metrics played a small part in3675helping to end that crisis. Today, while there are still pockets of3676difficulties, as there always are, the rail network is running fluidly.3677As noted by one of the panelists at the recent growth hearing, not only3678are volumes up this year, but train speeds are up, and dwell is down.3679In short, more freight is moving while service continues to improve.3680CPKC MERGER:3681    One of the most significant transactions that has ever been handled3682by the Board took place just last year when the Board approved the3683largest rail merger between Canadian Pacific and Kansas City Southern3684to become CPKC. The merger created the first railroad to span the3685United States, Canada, and Mexico, and the Board found that the merger3686would enhance competition and support the growth of the freight rail3687network.3688RECIPROCAL SWITCHING:3689    And earlier this year, the Board created a new rule which had been3690under consideration for quite some time. This rule was EP 711 and3691commonly referred to as reciprocal switching. Reciprocal switching3692gives certain shippers in terminal areas who have access to a single3693railroad the opportunity to get rail service from an alternate3694railroad. If the shipper's host railroad falls below certain metrics,3695the shipper then has the opportunity to come to the Board to seek a3696reciprocal switch.3697IV. The Growth Hearing, the State of the Rail Network, and Importance3698        of Freight Rail3699    And that brings me to September's hearing on growth in the freight3700rail industry. Not to put too fine a point on it, but a healthy and3701growing freight rail industry benefits everyone--even if you ship3702nothing by rail, and a lot of shippers do have the choice to ship by3703truck instead. But moving shipments from truck to rail benefits3704everyone. Rail is cheaper. It is better for the environment. It takes3705trucks off the road, which decreases wear and tear on public3706infrastructure and even saves lives.3707    While several parties at the growth hearing had valid criticisms3708for past or current practices of the railroads, something that I must3709underscore is that the United States freight rail network remains the3710best in the world. It is a phenomenal resource, even when it's not3711running optimally. This benefits the supply chain, which can take3712advantage of the private investments that railroads have made into the3713network, and it benefits the economy, as it offers a fuel-efficient,3714cost-efficient option for shippers to move their goods. But despite the3715clear benefits of rail, many shippers who could ship by rail choose to3716ship by truck. The hearing got into several reasons for this preference3717for truck, but two big issues from shippers was a lack of reliability3718and communication from the railroads.3719    Shippers often see rail as less reliable than truck, and it is3720easier to figure out where a truck is and when it will arrive at its3721destination than it is with a railcar. Both of these are valid points,3722and issues that the Class I railroads can and must address. And it3723really gets to what my chief concern always is in my role--rail3724service. Poor service impacts shippers and it impacts the national3725economy. But I have said, and I will say it again, regulations cannot3726provide good service. Carriers are the only ones with that power. So I3727want to give railroads room to run and operate the way that they want.3728They should be able to innovate, shift resources, and do what they3729think is best for their business. The same is true for shippers. And3730carriers, like shippers, are in the best position to know what3731resources they need to compete and perform well.3732    That being said, we've seen what happens when service suffers, and3733that is that, understandably, there are calls for increased regulation3734of the rail industry. And I will be the first to say, increased3735regulation is not something I want, and it is not something that3736Congress wanted when it created the Board. The Surface Transportation3737Board is directed to follow the principles set forth in the Rail3738Transportation Policy enacted by Congress. While some of these3739principles are often viewed as competing, one such principle is to3740quote ``minimize the need for Federal regulatory control over the rail3741transportation system and to require fair and expeditious regulatory3742decisions when regulation is required.'' I call attention to this3743policy in particular because the plain words of the statute require the3744Board to implement regulations ``when they are required.'' I believe3745when ``regulations are required'' is a viewpoint that differs greatly.3746To me, the role of the Board is to determine two things: whether there3747are issues that rise to the level of the need for regulatory action and3748whether the issue can be solved by regulation. In order to make that3749determination, the Board must consider both the principles of the Rail3750Transportation Policy as well as carefully consider any potential3751unintended consequences of the proposed regulatory solution. After3752input and comment from the industry, the Board must then consider3753whether the benefits of the proposed regulatory solution will outweigh3754any unintended harm.3755    At the end of the day, what shippers deserve is dependable service3756that is delivered with a customer-centric focus. And while opinions may3757differ, my own view is that the Carriers themselves will do a much3758better job of voluntarily achieving this goal across their networks3759than perhaps any changes that can be put into place through regulation.3760This is not to say that there are not circumstances that warrant3761regulation. It is just to say that in my view, the Carriers are in the3762best position to make operational decisions on how to meet the needs of3763their customers. They can make improvements faster and without the3764negative consequences of increased regulation, and so, ideally, they3765will continue to improve and make increased regulation by the Board3766unnecessary.3767    But I think the freight rail industry is poised to move forward,3768and the Philadelphia region is already seeing the benefits. The rail3769industry is starting to turn a little bit and become more customer3770oriented, seeking to grow its volumes rather than focus on increasing3771prices or cutting costs. The East Coast's two major railroads, CSX and3772Norfolk Southern, are two of the railroads that are really leading the3773charge in terms of changing the way they do business. Both railroads3774are focusing on resiliency and customer service. I think their quick3775actions after the Key Bridge collapse in Baltimore are evidence of3776that. When I asked CSX and NS about their response to the Key Bridge3777collapse at the recent growth hearing, let me tell you what they said.3778The CEO of CSX, Joe Heinrichs said that two things really helped--3779first, operations and sales within CSX worked well together to come up3780with solutions quickly. But he also said that it was the improved3781relationship with labor that allowed CSX to go to the union and the3782next day get approval to transfer employees. Without sufficient3783employees, and without a strong working relationship between labor and3784management, these types of quick actions are just not going to happen.3785And Ed Elkins from NS talked about the importance of fluidity and3786having capacity for resiliency that you can apply when things go wrong3787because there's always something that is going to go wrong. Ed also3788talked about the importance of trust with employees, customers, and3789even the ship operators. He indicated that things are going to go3790wrong, and the true test is how well the railroad is able to bounce3791back to normal operations. As both of these railroads serve3792Philadelphia, including the Port of Philadelphia, the benefits to the3793region are clear if CSX and NS are able to continue to improve service3794and their resiliency.3795    And while there is certainly room for improvement in the rail3796industry, there is also a lot to be optimistic about. Carriers are3797creating new partnerships with trucking companies to provide service3798that is more competitive with truck, such as BNSF's Quantum service in3799partnership with J.B. Hunt. Norfolk Southern has created a new3800department seeking to fuel customer growth and make rail easier to use,3801and it is working more closely with short lines to improve interchange.3802These are just a couple of examples of how the Class I railroads are3803changing their operations in order to drive growth. And I would be3804remiss if I did not mention the railroads efforts over the past couple3805of years to enter into paid sick leave agreements with their labor3806unions, which help retain and attract employees, because you can't have3807growth without employees. I hope to see more of approaches like these3808in the future, because I think that rail has a bright future,3809especially if carriers provide the type of reliable service that their3810customers deserve.3811V. Rail Customer and Public Assistance Program3812    Before I close, I have to plug the Board's Rail Customer and Public3813Assistance Program. You can find information about the program on the3814Board's website under the ``Resources'' tab. If you're a shipper and3815are having service issues or some other issue that you think the Board3816can help with, they are a great first call. Agency staff who work in3817the program are highly knowledgeable, and they can help with anything3818from giving you some information over the phone to informal mediation.3819And if you are having an issue and would just like to talk to someone,3820they will not reveal your identity to the railroad or other party3821without your consent. Again, it's informal, so they can't give you any3822binding guidance, but they are able to solve a lot of issues quicker,3823on an informal basis, before the issue ever gets to the Board itself.3824VI. Closing3825    In closing, I would like to reiterate that the United States has3826the most extensive freight rail network in the world. The value of that3827resource cannot be overstated, and freight railroads are vital to3828shippers and the U.S. economy. 40 percent of long-distance freight in3829the U.S. moves by rail. At the end of the day, what I care about is3830service. While the Board should do what it can to ensure the fluidity3831of the network, the Board cannot provide service through regulation.3832Only the carriers can do that. So if the network is running smoothly3833and carriers are meeting the needs of shippers by providing reliable3834service, that makes my job a whole lot easier, and it avoids the3835negative consequences of additional regulations, which, while well-3836intentioned, can instead stifle the same growth in the rail industry3837that we all want to see.3838    Thank you all for the opportunity to be here tonight and for the3839important role that all of you serve in keeping our supply chain and3840the Nation's economy moving.3841                                 ______38423843    Good afternoon, everyone. It's great to be here, and thank you for3844giving me the opportunity to update you on what's going on at the3845Board. Before I begin, I'd like to have someone else come up here with3846me. [Gabe Meyer is here today representing the Board's Rail Customer3847and Public Assistance Program, and I just want Gabe to introduce3848himself, so you can put a face to the name, and he'll tell you a little3849bit about the program and where you can find him if you'd like to3850discuss anything.]3851                        FIRST YEAR AT THE BOARD.3852    When I joined the Board, I knew the issues pending before the Board3853were complex and challenging. What I didn't know was just how complex3854and how challenging they are. And so I am grateful to have the3855opportunity to serve with such a great group of people and to serve at3856time when it is permissible to speak with a fellow Board Member about3857pending issues.3858    But really, I find our conversations to be invaluable--especially3859when they involve issues where I am not in agreement with a fellow3860Member. Having the opportunity to speak with another Member provides me3861with the ``why'' behind their position and allows me to have a better3862understanding of their opposing view. In some instances, I have even3863been enlightened to the point of agreeing with their position, and on3864limited occasions, I know that sharing my view has been persuasive as3865well.3866    I would also be remiss if I did not point out the invaluable role3867that the Board's career professionals have also had in my transition as3868well the help they have given to me with my learning curve. My3869observation is that the Board is very fortunate to have a small but3870highly talented group of professionals whose dedication to their work3871is evident in everything they do. In my short time on the Board, there3872has not been a question that they have not been able to answer off the3873top of their heads, and I believe the quality of our decisions speak3874for themselves. Lastly, I would like to take a moment to recognize the3875important role that my attorney advisor, Mike Small, has had in my time3876as a Board member.3877                IMPORTANCE OF HEARING FROM STAKEHOLDERS.3878    I've been a member of the STB for a little over a year now, and3879I've had the opportunity to meet with many different groups, including3880railroads, shipper groups, and individual shippers. I have made these3881meetings a priority, because, and let me stress this, these meetings3882are extremely important to me. It's one thing to read a brief or a3883comment that sets forth a problem that stakeholders are having, and3884another thing entirely to hear from you directly and have you explain3885to me in conversation what you are experiencing in the field. I can't3886emphasize enough how helpful these meetings are to me--to have the3887opportunity to ask questions and to hear your perspectives. And so, at3888least for me, as long as we are not discussing a pending matter, if3889anyone here today wants to present a challenge, explain it, and3890describe what you think the solution is, my door is wide open. Even if3891the Board is hearing completely different proposals from other3892stakeholders, I still want your suggestions, because you're the3893industry experts. More input can only make the Board's decisions3894better.3895             ROLE AT THE BOARD AND REGULATORY PERSPECTIVE.3896    Each of us Board Members brings difference strengths and3897backgrounds to the Board, which play a role in how each of us reaches3898our decisions. In my meetings with stakeholders, I have often been3899asked about my views, my leanings, or how I make decisions. Just to3900give you a sense about my perspective: I try to approach issues first3901from a question of, ``What did Congress ask the Board to do?'' I look3902at statutes, and legislative intent, and especially the Rail3903Transportation Policy set out by Congress. Now, I don't know how many3904of you have looked at the Rail Transportation Policy, but it sets out3905fifteen often-competing policy priorities to guide the Board's3906decisions. The Rail Transportation Policy, or RTP as we call it,3907directs the Board to minimize the need for Federal regulatory control--3908but also requires the Board not to minimize it too much, and to still3909provide some regulatory control. Where there isn't effective3910competition, the RTP asks us to make sure rates aren't too high--but we3911should also make sure they aren't too low either. Congress carved a3912narrow path for the Board to walk, and shippers and railroads are often3913pitted against each other on either side.3914    And yet, even though railroads and shippers are often at odds, in3915the long run, shippers, railroads, and the Board are, I think, in3916agreement. In one meeting I had with a shipper, they talked at some3917length about recurring problems with missed switches. But during that3918same conversation, the shipper emphasized the importance of a strong3919freight rail network, and how important it was for the shipping3920community that railroads are healthy. Even though shippers and3921railroads agree on this in principle, there is strong disagreement on3922how best to maintain and improve the health and strength of our freight3923rail network. But when I make decisions, and when I meet with3924stakeholders, the health and strength of the freight rail network is3925always my ultimate goal.3926                 IMPORTANCE OF PROCEEDING WITH CAUTION.3927    I guess if I could sum up my regulatory perspective in a word, it3928would be ``cautious.'' I've learned a few lessons both during the3929pandemic and during my time at the Board about how interconnected3930things are, how supply chain issues affect us all, and how many3931intersecting problems there are right now in the supply chain. In my3932meetings with stakeholders, both on the railroad and shipper sides,3933I've had a lot of productive and enlightening discussions about the3934issues affecting the rail network, and I cannot thank enough the people3935and organizations I've met with for lending me their expertise as I try3936to stay informed about the state of the network. I really see that as3937one of the most important aspects of my job, because whenever the Board3938considers regulatory action, I do not take this responsibility lightly,3939nor do I want us to do so in a vacuum.3940    Over just the past year, I think one of the words that I heard most3941was ``shortage.'' Chassis shortage. Rail labor shortage. Driver3942shortage. Warehouse labor shortage. Container shortage. Lumber3943shortage. Semiconductor shortage. I think the only thing that was not3944in shortage was consumer demand, but even that shifted. From my3945conversations, it sounds like the port and intermodal issues are likely3946to be with us for some time.3947    As I hear about all of these problems, I try to focus on two3948things. First, what can the Board do to help? I say can because at3949least some of the issues that are affecting the network may originate3950elsewhere along the supply chain, and therefore it's simply not an area3951where the Board has any power to regulate. Not only should the Board3952try to regulate within its area of expertise, but it should also3953regulate within its statutory mandate.3954    Second, what should the Board do to help? Part of the issue with3955regulations is that once they are on the books, it is very difficult to3956remove them. And as the Board looks to solve issues that we see in the3957network, I want to ensure that the solutions we impose match the3958problems that we are trying to solve. If a problem is temporary, the3959solution should be temporary. And if a problem can be resolved by the3960market, we should first see if the market will provide that solution.3961However--and I think this is clear from the pending Board proceedings--3962the Board will take action when it believes it is in the best interest3963of the rail network as a whole.3964    On that point, I'd like to express my deep concern regarding issues3965raised in recent letters to the Board from the National Grain and Feed3966Association, Senator Shelley Moore Capito of West Virginia, Secretary3967of Agriculture Tom Vilsack, and SMART-TD. The NGFA letter alleges3968widespread service issues affecting grain shippers and receivers,3969including NGFA members unable to purchase grain because they have3970loaded trains waiting to be moved out by the railroad, mills being shut3971down due to running out of grain, and livestock producers having3972difficulty keeping their animals fed. Senator Capito's letter alleges3973that railcar shortages have resulted in coal shipment cancellations or3974delays. The Board takes these matters seriously, and we are looking at3975how to move forward to learn more about the issues shippers are3976experiencing and what the Board can and should do to address the issues3977raised. It is my hope that the Board, shippers, and railroads can work3978together to resolve these service issues.3979                          OVERVIEW OF DOCKET.3980    It is an incredibly busy time right now at the Board. As you may be3981aware, there are several high profile matters that are currently3982pending--all of which I, unfortunately, cannot discuss with you because3983we are not permitted to discuss pending proceedings. But I can give you3984a broad overview of what the Board is working on.3985                                MERGERS.3986    First, of course, the Board has two large mergers pending before3987it, one of which is a major merger of two Class I railroads. It is the3988first time in 20 years that the Board has reviewed a merger of that3989size. The first involves CSX's acquisition of Pan Am Railways, which3990would extend CSX's network in New England. The Board held a two-day3991hearing in January, and, by statute, our decision on the merger will be3992issued later this month. The second involves Canadian Pacific's3993acquisition of Kansas City Southern, which would create a single3994railroad that extends from Canada, through the U.S., and into Mexico.3995We are squarely in the middle of the procedural schedule in that3996proceeding, although the procedural schedule is currently suspended3997pending the resolution of a data inconsistency, and for more3998information on that, I would direct you to our March 16th decision.3999                              RULEMAKINGS.4000    The Board has several rulemaking proceedings before it right now,4001some initiated by the Board, and some initiated by stakeholders. I'm4002not going to go through all of them, but to highlight a few:40034004   We have a rulemaking proceeding in which the Board has4005        proposed new reciprocal switching regulations. The Board held a4006        hearing in the proceeding last month, and we are having4007        meetings with stakeholders for the next two weeks.40084009   We have a rulemaking proceeding to consider a new procedure4010        for challenging the reasonableness of rates in smaller cases,4011        in which the Board would decide a case by selecting either the4012        shipper's or the railroad's final offer.40134014   There's another proposal from several Class I railroads to4015        create an arbitration program to resolve small rate disputes.4016        Reply comments regarding the arbitration proposal and the4017        Board's proposed final offer rate review program are due by4018        April 15th.40194020   The Board has a proposal pending to revoke the class4021        exemptions for certain commodities.40224023   We have a proceeding in which we invited comments regarding4024        first-mile/last-mile service, and whether there are additional4025        metrics that the Board should be looking at to assess that4026        service.40274028   Finally, we also have a proposal from several organizations4029        to create regulations authorizing private railcar owners to4030        assess, essentially, demurrage charges when a Class I railroad4031        holds on to a private railcar beyond a reasonable time. Last4032        week, the Board issued a decision asking for comments on the4033        proposal, and for comments on several questions that the Board4034        had. Initial comments on that are due by the end of June.4035                              OTHER CASES.4036    I'd say that's a pretty full plate, but beyond the mergers and4037rulemakings, the Board has other cases before it that could have large4038effects on the industry or the network. For example, we have a4039proceeding raising questions about the nature of railroads' common4040carrier obligations. We have another proceeding regarding whether4041Amtrak can start service between New Orleans and Mobile, and we are4042smack in the middle of a hearing in that case right now.4043                      PUBLIC COMMENTS ARE CRUCIAL.4044    Clearly, the issues before the Board are wide-ranging, and in4045several proceedings, any action that we take could have large effects4046on the industry or the network. As we consider multiple high-profile4047and consequential rulemakings, difficulties continue to plague many4048parts of the supply chain, both here and abroad. I do not want to4049impose a more-or-less permanent solution to what turns out to be a4050temporary problem. I wouldn't want to saddle either shippers or4051railroads with regulations that turn out to be unnecessary.4052    Because regulations are often in place for many years and come with4053associated costs, I believe it is incumbent upon the Board to proceed4054cautiously with any action that could have an effect on the rail4055network. One way the Board can proceed with caution is to make sure4056that the Board seeks input from the very people who best know the4057network--the stakeholders. If there's one thing I've learned in the4058dozens and dozens of meetings I've had with shippers and railroads and4059other organizations, it's how much I don't know. I both value and4060depend upon the insight and experience from people like the ones in4061this room who are literally on the network on daily basis, to tell me4062what works and what doesn't and how we could make it better. So, if4063there is something that the Board is doing that sounds like a good idea4064or bad idea, I hope you'll tell us what you think.4065    And with that, I'd be happy to take any questions if you have any.4066                                 ______40674068    Thank you for the introduction. It's so great to be here with all4069of you this afternoon in Palm Springs.4070    When I look at what we are facing in the rail industry, I am4071reminded of a quote from Winston Churchill:40724073        ``The pessimist sees the difficulty in every opportunity. The4074        optimist sees the opportunity in every difficulty.''40754076    The last few years have brought unprecedented challenges to the4077Nation's economy, our supply chain and the freight rail network. I know4078that almost everyone in this room has first-hand experience with these4079challenges--in fact, I've had the opportunity to speak with some of you4080directly. And while I know that unreliable service has cost rail4081shippers millions of dollars in lost profit, perhaps now just might be4082the time that these challenges are transformed into opportunities for4083change and for growth in the rail industry. Let me explain. ____4084    We all know that at the beginning of last year service was bad and4085getting worse.4086    Velocity was down. ____ Terminal dwell and dwell at orgin was up4087for some railroads by double digits. And trains holding due to crew4088issues were also substantially up. We heard from many stakeholders4089about just how bad the service had gotten. This organization recounted4090how one member had to spend $3 million on secondary freight to keep4091animals fed, and another had to stop selling feed because a loaded4092train sat at origin for one week because of a lack of crew. Then in4093April, 2022, the Board held a two-day hearing on freight rail service4094challenges and heard from various industries and public officials4095including your President Michael Seyfert, the Secretary of4096Transportation as well as executives from the Class I carriers. Not4097only did we hear in great detail about the extraordinary service4098disruptions, but also about the challenges associated with a rail labor4099shortage, which by the way, were pointed to by labor and the carriers4100themselves.4101    Immediately following the hearing, we issued an order requiring the4102reporting of service metrics and head counts. In the months that4103followed, we carefully monitored the bi-weekly reports and I am happy4104to say that we have started to see improvements across the network. We4105are also seeing a reduction in service complaints. During this time,4106Members of the Board met with the CEOs of the Class I carriers who4107shared their plans on service recovery and their plans to attract and4108retain rail labor during what we know was one of the tightest labor4109markets we have experienced in decades.4110    As if the post-pandemic recovery did not present enough of a4111challenge, six months ago, the rail carriers and the unions were4112engaged in a labor dispute that posed a threat of bringing our freight4113rail network to a grinding halt. This would have cost our economy4114upwards of at least $1 billion per day and could have driven prices4115even higher for many consumer goods. And while the Board had no role in4116the negotiations, many of us held our breath along with the rest of the4117nation, until early December when the President signed a bill that4118imposed a settlement between labor and the carriers.4119    During the months leading up to the settlement, we became aware4120that Union Pacific was planning to reduce the number of cars on their4121network. Let me take a minute to walk through the issue. In order to4122reduce the number of cars, UP reached out to the customers that they4123believed had an excess number of cars on their system. UP then asked4124those customers to remove a certain number of cars within seven days.4125If a customer could not achieve UP's goal, a congestion embargo would4126be put in place unless the customer sought a permit. By the first week4127of December 2022, UP had put more than 1000 embargos in place for the4128year, and there were 141 active embargoes, all due to congestion. By4129way of comparison, in 2017, UP had implemented only 27. So in the4130second week of December, the Board conducted a two-day hearing with UP4131regarding the substantial increase in their use of embargoes as a4132method of reducing rail traffic congestion. As of now, UP made several4133changes to their Inventory Management Program and has reduced4134congestion-related embargos by cutting them in half. Most recently,4135I've been told that if UP continues at their current pace, they'll be4136able to reduce their use of embargoes by 70 percent compared to last4137year. And while I applaud UP in its reduction, in my view, it's not4138enough because I understand the extreme difficulties that being4139embargoed places on a shipper. You've got to assign manpower to deal4140with the issue, choose which shipments to reduce or delay, decide which4141receivers are going to be told that they aren't getting their shipment,4142and then try to move some traffic by truck, if you can. It just injects4143so much unnecessary difficulty and uncertainty as well as increased4144cost. And that's why I hope that UP's goal will be to achieve the4145industry standard.4146    At this point many of you may be wondering how do any of these4147circumstances lead to growth and transformation? Service disruptions?4148The threat of a national rail shutdown? Embargos? How could any of4149these circumstances lead to positive changes of any kind on the4150network?4151    Last year, I met with each of the Class I CEOs but two4152conversations in the latter part of the year stood out from all the4153others. Those were the meetings that I had with CEO Joe Hinrichs of CSX4154and CEO Alan Shaw of Norfuk Southern. As some of the other CEO's4155acknowledged, service was improving but was still not where they wanted4156it to be. But here's how these two meetings differed--both Joe and Alan4157talked about how they wanted to focus more on resiliency, taking a more4158customer-centric focus. It was also important to them capture more4159freight volumes from truck and to improve their relationship with their4160employees. But perhaps most surprising to me, they were no longer going4161to focus exclusively on operating ratio and instead they talked about4162their goal to pivot toward growth. At the conclusion of both meetings,4163I found myself surprisingly in agreement with their goals and I hoped4164they would be successful for reasons I am sure many of you would agree4165with--success in all of these areas would mean that these carriers4166would greatly improve in their ability to deliver predictable, reliable4167service to their customers and afford their customers the ability to4168ship more volume by rail instead of truck.4169    But at the same time, I also had to wonder, was this just a message4170that was being delivered behind closed doors to a regulator that they4171knew had been receiving a high number of complaints about rail service?4172Haven't the Carriers made promises of improved service in the past4173while at the same time promising their investors that they would reach4174an even lower operating ratio by reducing expenses--which often means4175cutting headcounts? How was this time any different?4176    Here, they were saying the opposite. They would not be identifying4177an OR goal and would be focusing on ``resiliency'' by actually4178increasing headcounts and improving retention. I would also say that4179what made this message different is that it was not just delivered to4180me but was also delivered publicly and directly to their investors. For4181CSX, it was presented during their Quarterly Earnings call in mid-4182January while Norfuk Southern's took place during its investor day in4183early December. And what everyone in this room knows is that resiliency4184is not just good for shippers, it's also good for the carriers as we4185watched this play out during the pandemic. There's a saying that comes4186to mind--luck is what happens when preparation meets opportunity. In4187order to take advantage of the surge in demand, grow their volumes, and4188provide predictable service, carriers needed to be prepared for it, and4189they were not.4190    And while no one could have predicted the pandemic or the national4191labor shortage that followed, what this experience has now shown is4192resiliency matters. And the Carriers are making positive changes.4193Headcounts are increasing. According to our Office of Economics, total4194employment for the carriers is up by over 5 percent from last year. And4195in recent weeks, 5 of the 7 Class I's have reached agreements awarding4196sick leave, that I believe will further improve the quality of life for4197employees and most likely lead to a higher rate of employee retention4198and better resiliency.4199    And just to give some more credit where it's due, let me again talk4200for a moment about UP. They have not been doing great over the past4201year, but I do think they are coming to the realization that something4202must change. Just last week, I learned that they recently finished up a4203pilot program for employee scheduling, with the goal of providing4204employees with certainty on when they would be working, and when they4205would have days off. Something which I believe everyone can see the4206value in. Being able to schedule time off in advance is something that4207rail labor has been asking for. And I don't know if UP will expand the4208program or try it elsewhere, but I have to give them credit for trying.4209For recognizing that their employees are dissatisfied and for trying4210something new to improve their quality of life. By the way, this will4211also have the likely benefit of improving service for shippers. During4212the pilot program, UP said there were fewer, unscheduled employee call4213outs.4214    In terms of challenges to the rail industry, there is none more4215widely known than the unfortunate derailment in East Palesteen, Ohio.4216As a result of the derailment, the Department of Transportation has4217reintroduced proposed rail safety regulations; Members of Congress4218introduced the Railway Safety Act of 2023; NS announced a six-point4219plan to immediately improve safety; and the Association of American4220Railroads reported on immediate steps the Class I railroads are taking4221to prevent similar accidents in the future.4222    It goes without saying that no one wants derailments to happen. The4223FRA is the primary agency responsible for safety regulation in the rail4224industry, but while the Board doesn't regulate safety per se, we4225certainly consider safety when we act, and it is something that all of4226us--regulators, carriers, and shippers should be concerned about. And4227it is my hope that once the NTSB issues its final report, we can see4228what lessons can be learned and what can be done in the future to try4229to prevent an accident like this one from ever happening again.4230    Let me now turn back to an area that is under the Board's purview--4231service. One of the other reasons I am optimistic about the near future4232in the rail industry is the promise of what improved technology could4233do to benefit railroad-shipper relationships as well. When I first4234joined the Board two years ago, I was talking to a fellow Board Member4235and I was absolutely blown away to learn that you cannot track railcars4236as well as you can track an Amazon package. And today, I am still not4237sure about what is holding the industry back. But I do believe4238technology that would provide transparency might resolve a lot of the4239issues that rail customers are complaining about.4240    In my meetings with shippers, there are three main complaints that4241I hear about. First, they would like to ship more volume by rail.4242Second, they would like to have better communication with their4243Carriers about delayed shipments and the location of their rail cars.4244And third, and by far the most frequent complaint I hear about is the4245lack of predictable service. I think improved technology and better4246transparency on the network could give shippers at least part of what4247they are asking for--more knowledge about where their shipments are and4248when they will arrive.4249    Now I would like to spend a minute talking about the important and4250often difficult issue of regulation. The Surface Transportation Board4251is directed by Congress to follow the principles set forth in the Rail4252Transportation Policy enacted by Congress. While some of these4253principles are often viewed as competing, one such principle to quote4254``is to minimize the need for Federal regulatory control over the rail4255transportation system and to require fair and expeditious regulatory4256decisions when regulation is required.'' End quote. I call attention to4257this policy in particular because the plain words of the statute4258require the Board to implement regulations ``when they are required.''4259I believe when ``regulations are required'' is a viewpoint that differs4260greatly. To me, the role of the Board is to determine two things:4261whether there are issues that rise to the level of the need for4262regulatory action and whether the issue can be solved by regulation. In4263order to make that determination, the Board must consider both the4264principles of the Rail Transportation Policy as well as carefully4265consider any potential unintended consequences of the proposed4266regulatory solution. After input and comment from the industry, the4267Board must then consider whether the benefits of the proposed4268regulatory solution will outweigh any unintended harm.4269    If CSX and Norfuk Southern are successful in achieving their goals,4270they could accomplish more to improve service than any regulation that4271is implemented by the Board. At the end of the day, what shippers4272deserve is dependable service that is delivered with a customer-centric4273focus. And while opinions may differ, my own view is that the Carriers4274themselves will do a much better job of voluntarily achieving this goal4275across their networks than perhaps any changes that can be put into4276place through regulation. This is not to say that there are not4277circumstances that warrant regulation. It is just to say that in my4278view, the Carriers are in the best position to make operational4279decisions on how to meet the needs of their customers. And while4280regulations may correct certain issues, at the end of the day, only the4281Carriers themselves can deliver a good service product that meets the4282needs of their customers.4283    And so, again, it is my sincere hope that CSX and Norfuk Southern4284can successfully achieve the goals they've outlined not just for the4285sake of their customers but for the industry as a whole. Carriers seem4286to be under intense pressure from short term investors to focus on cost4287cutting and to reduce their operating ratios. A pivot to growth would4288most likely result in the loss of some short-term investors in exchange4289for higher profitability in the long term. If they are successful, this4290could result in higher headcounts, the ability to meet more of their4291customers' needs as well as better fluidity on the network. And most4292importantly, if CSX and Norfuk Southern are successful, perhaps this4293would inspire some other Carriers to pivot toward growth as well. In4294the meantime, I would still like to hear from you and get your4295perspective on how things are going on the network. I know that you are4296the industry experts and I very much value your perspective and I know4297my colleagues do as well.4298    These are difficult times, yet like Winston Churchill, I too see4299opportunity in every difficulty and can't help but be optimistic about4300the future. There are a lot of opportunities for rail service to4301improve. Rail carriers, at least some of them, see opportunities to4302improve service, become more reliable, and grow volumes. The winds, I4303think, are shifting, and so I think we might see in these difficult4304times the beginnings of a great and much needed transformation in the4305rail industry.4306    I look forward to our continued conversation and thank all of you4307for the contributions you make to continuing to improve the freight4308rail network. And with that I welcome any questions you might have for4309me this afternoon.4310                                 ______43114312I. Introduction4313    Good afternoon, and thank you for inviting me to speak today.4314    A couple of preliminary items to get out of the way: Nothing that I4315say tonight represents the views of the Surface Transportation Board or4316any of the other members. And I am somewhat constrained in what I can4317say about matters pending either before the Board or in litigation on4318appeal.4319    With that out of the way, can I just say, what a time to be giving4320this speech. I feel like the supply chain is often an afterthought--4321something that just works, and when it's working, people don't think4322about how the journey their new car, or stove, or whatever else got to4323them. Which port did it come in through? Was it put on a truck, or4324shipped by rail and put back on a truck again? Who made those4325decisions? That is, of course, until the something goes wrong. And it4326is never good when the supply chain is in the news, is it? Not much4327reporting going on about how the freight network is moving fluidly.4328    As you all know, earlier this month we had a longshoreman strike on4329the East and Gulf Coasts. That certainly affected traffic flows on the4330East Coast, but it also affected traffic flows on the West Coast. Union4331Pacific said that its container volumes were up 40 percent year over4332year in September as shippers diverted traffic in anticipation of the4333strike. BNSF also noted the increase in volumes in anticipation of the4334strike, and both railroads had contingency plans in place to deal with4335the increase in traffic. I am extremely grateful that the strike has4336ended and the ports are back on line, but it was just another reminder4337of how interconnected the freight network is.4338    Ann helpfully provided me with a few of the issues that you all are4339interested in, and while there are some that I either can't or4340shouldn't talk about, I'll address what I can.4341II. Background4342    But first, a little bit about my background for those of you who4343don't know me. Prior to working at the Board, I worked for 14 years4344with the Southeastern Pennsylvania Transportation Authority, the4345commuter railroad that serves the Philadelphia area. My most recent4346role with SEPTA was deputy general counsel, and in that role I4347represented the agency before the FRA and the Pennsylvania Public4348Utility Commission; served as lead counsel on a major railroad4349reconstruction project; and served as lead counsel on real estate4350transactions and contract negotiations. Prior to that role, I served as4351the Director of Legislative Affairs for SEPTA, leading a team to4352advocate for SEPTA at the local, state, and Federal level, and4353reviewing legislation and regulations at all levels to determine their4354impact on SEPTA.4355    Earlier in my career, I was in private practice with a focus on4356bankruptcy law and commercial litigation, and I served as a law clerk4357for the U.S. Bankruptcy Court for the Eastern District of Pennsylvania4358and a law clerk for the late Vincent A. Cirillo, President Judge4359Emeritus of the Superior Court of Pennsylvania.4360III. Issues of Interest4361    So that's a little bit about me and my background, which in case it4362is not clear, did not include freight rail. That is just one of the4363many reasons I appreciate PRFBA and its members for being such vocal4364participants in Board proceedings--most recently with Dave Burchett's4365testimony at last month's growth hearing--and for always being4366available to meet with the Board. Your input is vital, and I always4367appreciate hearing from you about issues on the network and what you4368see as possible solutions. Even when there is disagreement, you help us4369to see every side of the issue, and I think that makes our decisions4370better.4371A. Two-Two Split and Priorities as a Republican Member4372    I was asked about my thoughts on operating under a 2-2 split Board,4373which we have been since May, and about my priorities and objectives as4374a Republican Board Member. First things first, even though there is a43752-2 split, I feel very comfortable saying that I and all of my4376colleagues, regardless of affiliation, are always concerned about4377service. We have an election coming up, and, eventually, I would expect4378that 2-2 split to resolve one way or another, and whoever is Chairman4379under the next president will at some point have a majority. But the4380four of us will remain on the Board for some time, so regardless of the4381election, I do not expect our focus on service to change.4382    As for my priorities, I would say the timeliness of Board decisions4383is a priority. And please know, this is not a criticism of Board staff,4384or Board leadership. Since I joined the Board, it seems like we have4385not had a second to breathe, bouncing between crises, big cases, and4386complex rulemakings. We had the service crisis, the CSX-Pan Am merger,4387days-long hearing in the Amtrak Gulf Coast matter, Canadian Pacific's4388merger with Kansas City Southern, and major rulemakings including4389arbitration, final offer rate review, emergency service regulations,4390and reciprocal switching.4391    I think now is the right time to deal with the many issues that are4392already on the Board's plate. We have several petitions for rulemaking4393pending and a number of cases awaiting decision. And I think it is4394incumbent on the Board to decide those cases in a timely fashion. The4395Board is a small agency with a limited bandwidth, and I think there4396needs to be a recognition, both from the me and my colleagues as well4397as outside stakeholders, that there are tradeoffs.4398    When we focus on one thing, that often means taking our focus off4399something else. Couple that with decisions where Congress has mandated4400that we issue a decision within a certain number of days, and I think4401it is clear that the Board must be judicious in its use of resources.4402B. Expectations for Reciprocal Switching; applying it to contract and4403        exempt traffic.4404    I mentioned reciprocal switching a moment ago, and I know that is4405an issue that is very much on your minds. I am restricted in what I can4406say since that remains on appeal. Regarding Board support for4407legislation, I think that is really a question for the Chairman, and4408that issue, along with the related question of whether the Board will4409be advancing a reauthorization proposal, are two areas where the4410election may play a role in what direction the Board goes. Not only4411might we have a new chairman, we will be dealing with a new4412administration and a new Congress, so we will have to see where we are4413at that point.4414C. Does the Board have authority to address contracts?4415    I was asked whether the Board has authority to address contracts. I4416think the statute, Section 10709, is pretty clear that Board authority4417over contracts is greatly restricted. But in case this issue comes4418before the Board in the future, I'm going to have to decline to speak4419further on that.4420D. Clarifying the Common Carrier Obligation.4421    Another question you raised was about clarifying the common carrier4422obligation. That is a big one. I have some complex thoughts on that4423one. I mean, on the one hand, I am a big, big proponent of clarity in4424Board decisions. That is always something I strive for, and I think4425something the Board should strive for. Clarity makes our orders4426clearer, and it helps reduce litigation and disagreement in the future4427over what a given Board decision means. That being said, right now the4428Board decides alleged violations of the common carrier obligation on a4429case by case basis, and that fact specific approach, while slow, has4430its benefits. The most obvious one is that the Board can really tailor4431the remedy, if one is needed, to the facts at hand.4432    My worry about clarifying the common carrier obligation in a4433broader way is the possibility of unintended consequences, sweeping4434conduct or service failures that, while unfortunate, should not be4435classified as violating the common carrier obligation.4436    So I guess I should say that while I prefer the case-by-case4437approach, any clarification of the common carrier obligation must be4438done carefully, with ample opportunity for input from stakeholders. I4439would not want to set forth a clearer standard and have that be the4440wrong standard.4441E. Continued service concerns.4442    I was also asked to address general, continued service concerns,4443which I think is a good opportunity to talk about September's hearing4444on growth in the freight rail industry. Not to put too fine a point on4445it, but a healthy and growing freight rail industry benefits everyone--4446even if you ship nothing by rail, and a lot of shippers do have the4447choice to ship by truck instead. But moving shipments from truck to4448rail benefits everyone. Rail is cheaper. It is better for the4449environment. It takes trucks off the road, which decreases wear and4450tear on public infrastructure and even saves lives.4451    While several parties at the growth hearing had valid criticisms4452for past or current practices of the railroads, something that I must4453underscore is that the United States freight rail network remains the4454best in the world. It is a phenomenal resource, even when it's not4455running optimally. This benefits the supply chain, which can take4456advantage of the private investments that railroads have made into the4457network, and it benefits the economy, as it offers a fuel-efficient,4458cost-efficient option for shippers to move their goods. But despite the4459clear benefits of rail, many shippers who could ship by rail choose to4460ship by truck. The hearing got into several reasons for this preference4461for truck, but two big issues from shippers was a lack of reliability4462and communication from the railroads.4463    Shippers often see rail as less reliable than truck, and it is4464easier to figure out where a truck is and when it will arrive at its4465destination than it is with a railcar. Both of these are valid points,4466and issues that the Class I railroads can and must address. And it4467really gets to what my chief concern always is as a regulator--service.4468Poor service impacts shippers and it impacts the national economy. But4469I have said, and I will say it again, regulations cannot provide good4470service. Carriers are the only ones with that power. So I want to give4471railroads room to run and operate the way that they want. They should4472be able to innovate, shift resources, and do what they think is best4473for their business. The same is true for shippers. And carriers, like4474shippers, are in the best position to know what resources they need to4475compete and perform well.4476    At the end of the day, what shippers deserve is dependable service4477that is delivered with a customer-centric focus. And while opinions may4478differ, my own view is that the Carriers themselves will do a much4479better job of voluntarily achieving this goal across their networks4480than perhaps any changes that can be put into place through regulation.4481This is not to say that there are not circumstances that warrant4482regulation. It is just to say that in my view, the Carriers are in the4483best position to make operational decisions on how to meet the needs of4484their customers.4485    They can make improvements faster and without the negative4486consequences of increased regulation, and so, ideally, they will4487continue to improve and make increased regulation by the Board4488unnecessary.4489    But I think the freight rail industry is poised to move forward.4490The rail industry is starting to turn a little bit and become more4491customer oriented, seeking to grow its volumes rather than focus on4492increasing prices or cutting costs. CSX and Norfolk Southern are two of4493the railroads that are really leading the charge in terms of changing4494the way they do business. Both railroads are focusing on resiliency and4495customer service. I think their quick actions after the Key Bridge4496collapse in Baltimore are evidence of that. When I asked CSX and NS4497about their response to the Key Bridge collapse at the growth hearing,4498in case you didn't attend or watch their testimony, let me tell you4499what they said. Joe Hinrichs said that two things really helped--first,4500operations and sales within CSX worked well together to come up with4501solutions quickly. But he also said, and I think this is part of4502resiliency, that it was the improved relationship with labor that4503allowed CSX to quickly reroute trains from Baltimore to Newport News,4504because CSX was able to go to the union and the next day get approval4505to transfer employees to provide that new service. Without sufficient4506employees, and without a strong working relationship between labor and4507management, that is just not going to happen. And Ed Elkins from NS4508talked about the importance of fluidity and having capacity for4509resiliency that you can apply when things go wrong because there's4510always something going wrong somewhere. Ed also talked about the4511importance of trust with employees, customers, and even the ship4512operators, that NS would be able to deliver on what they said they were4513going to do. Things are going to go wrong, and the true test is how4514well the railroad is able to bounce back to normal operations.4515    There is certainly room for improvement in the rail industry, but4516there is also a lot to be optimistic about. Carriers are creating new4517partnerships with trucking companies to provide service that is more4518competitive with truck, such as BNSF's Quantum service in partnership4519with J.B. Hunt. Norfolk Southern has created a new department seeking4520to fuel customer growth and make rail easier to use, and it is working4521more closely with short lines to improve interchange. These are just a4522couple of examples of how the Class I railroads are changing their4523operations in order to drive growth. And I would be remiss if I did not4524mention the railroads efforts over the past couple of years to enter4525into paid sick leave agreements with their labor unions, which help4526retain and attract employees, because you can't have growth without4527employees. Are things perfect? No. But I think when we see these4528innovations, we are seeing carriers trying to be responsive to shippers4529needs and to grow their networks by providing a better service product.4530I hope to see more of approaches like these in the future, because I4531think that rail has a bright future, especially if carriers provide the4532type of reliable service that their customers deserve.4533IV. Rail Customer and Public Assistance Program4534    Before I close, I have to plug the Board's Rail Customer and Public4535Assistance Program. You can find information about the program on the4536Board's website under the ``Resources'' tab. If you're a shipper and4537are having service issues or some other issue that you think the Board4538can help with, they are a great first call. Agency staff who work in4539the program are highly knowledgeable, and they can help with anything4540from giving you some information over the phone to informal mediation.4541And if you are having an issue and would just like to talk to someone,4542they will not reveal your identity to the railroad or other party4543without your consent. Again, it's informal, so they can't give you any4544binding guidance, but they are able to solve a lot of issues quicker,4545on an informal basis, before the issue ever gets to the Board itself.4546    I'm happy to take any questions you might have.4547                                 ______45484549    Good afternoon! It is truly an honor to be here with all of the4550leaders of the rail industry as well as my colleagues--Vice Chairman4551Hedlund and Member Fuchs. I would like to take a moment to thank Tony4552Hatch for inviting us. Having the opportunity to be in this room and to4553hear the views of so many of the industry leaders is invaluable. I4554would also like to say that I am very appreciative of the opportunity4555to share some of my views as a Member of the Surface Transportation4556Board.4557    Since I started at the Board in January 2021, it has not been the4558smoothest time for the rail industry. As everyone in this room knows,4559the pandemic was a world event that had unforeseen effects on the4560supply chain. And the recovery for U.S. railroads, as well as for4561almost every other industry in the nation, was a difficult one. Since4562the recovery, carriers have had to contend with numerous events4563affecting trade flows--foreign conflicts, the Key Bridge collapse, rail4564negotiations, last month's port strike, foreign embargoes and I am sure4565I'm leaving things out. But I think what we've seen is that carriers4566have, in fact, become more resilient at dealing with both expected and4567unexpected disruptions. This is not the same rail industry that we had4568post-pandemic.4569    Carriers have taken active steps to improve their businesses and,4570in doing so, strengthen the supply chain. I'd like to commend the4571railroads, first and foremost, on improvements they have made in their4572relationships with labor through paid leave agreements and efforts to4573improve work life balance. Carriers have also invested billions of4574dollars in capital improvements over the past couple of years, despite4575volumes being down. And they have invested in new technologies that can4576increase the efficiency and safety of their operations. Investment in4577the network and expansion of capacity is going to pay dividends as4578volumes return. But I think the most monumental, positive change I have4579seen in the rail industry, is the acknowledgment over the past couple4580years that carriers need to improve their service product to become4581competitive with truck. We've seen a greater emphasis on service, and4582we've seen carriers become more customer-centric. They have offered new4583service products, improved communication with customers, and even4584partnered with truck to offer faster, more on-time service. Changes4585like these, which improve the reliability of the rail network and the4586strength of the supply chain overall, make my job as a regulator a lot4587easier.4588    I have also been giving thought to the Board's role in the supply4589chain, and what we as a Board can do to strengthen the network. I think4590one of those ways is through Federal preemption. Regulations have4591costs, and preemption prevents carriers from being subject to a4592patchwork of regulations, which not only increase compliance costs for4593carriers but would also be detrimental to rail service for shippers.4594    In addition to preemption, another way the Board can strengthen the4595network is to manage our docket more efficiently. Part of our role is4596to administer decisions in a timely fashion, and we can do better on4597that. Please note, this is not a criticism of Board staff or my4598colleagues. Since I joined the Board, the demand on the docket has been4599extraordinarily high, both with cases filed with the Board and with4600discretionary matters that the Board has taken up. Those have4601contributed to longer time periods to issue decisions, and there has4602been little if any time to review our internal processes. Going4603forward, the Board should make it a priority to look into our internal4604processes and streamline them so that we can issue decisions in a more4605timely manner.4606    I am cognizant that lengthy decisional timelines increase4607litigation and other costs, and they also inject uncertainty into4608industry decisions. The question becomes not ``what will the Board4609decide,'' but ``when, or if, will the Board decide it.'' And I would4610like the Board, myself included, to keep in mind that delayed decisions4611increase costs for railroads and shippers alike and even hinder4612investments. When parties come to the Board, it is because they have an4613issue that they were not able to solve themselves. The Board is not4614their first choice, and nobody enjoys unnecessary litigation. . .except4615maybe the attorneys. But, once a matter is before us, we have a duty,4616sometimes statutory and sometimes simply as a matter of good4617government, to decide the matter efficiently.4618    I think it's also important for the Board to continue to engage4619with stakeholders. We already do that, whether at the staff level4620through OPAGAC, or at the Board level, our through our advisory4621committees. Maintaining those lines of communication with carriers,4622shippers, and industry groups is important and even in my short time on4623the Board I have seen those lines of communication resolve issues4624before becoming a multi-year case. My apologies to the lawyers on those4625missed legal fees. But in all seriousness, communicating with4626stakeholders ensures that the Board has context and perspective when4627considering whether to take regulatory action, and I think that is very4628important for the members and the Board as a whole.4629    In closing, I'd like to address a question that has been asked of4630me--what is the long-term role of the Board? I think the week-to-week4631or month-to-month role of the Board may vary, but ultimately, it is to4632ensure the fluidity of the network. Sometimes, this means stepping in,4633where carriers or shippers bring disagreements to the Board. Other4634times, it could mean stepping back and allowing carriers to innovate4635and invest in each of their networks. Either way, the Board should4636always be guided by the long-term, sustainable health and growth of the4637network, and I think the Board, or any agency for that matter, should4638be wary of actions that could operate to hinder that growth absent4639extremely compelling reasons.4640    Thank you all for the opportunity to talk with you this afternoon4641and for the important role that you serve in keeping the freight rail4642network and nation's economy moving.4643                                 ______46444645    Good morning, it's great to be here with all of you in Toledo.4646Before I begin, I would like to thank your Executive Director, Eric4647Wenberg for inviting me to your conference. These conferences always4648provide wonderful opportunities to talk with the folks who are out4649there and interacting with the freight rail network on a daily basis4650and it is from these informal conversations that I often learn the4651most. So, thank you Eric as well as those that I had an opportunity to4652meet last evening.4653    Just in case anyone here isn't familiar with what the Surface4654Transportation Board does, I wanted to begin this morning with a brief4655overview and highlight some of the Board's recent matters as well as a4656couple of pending items.4657                             BOARD OVERVIEW4658    The Board is an independent Federal agency tasked with the economic4659regulation of various modes of surface transportation. However, our4660primary area of responsibility is freight railroads. We hear cases4661brought by shippers challenging rates, and we have jurisdiction over4662railroad practices and service. We also review rail mergers, rail4663construction, and abandonment of railroads. Although the rail industry4664has been deregulated in many ways, there is still a place and a need4665for regulation since many shippers do not have options when it comes to4666which railroad, they use or whether they can use another mode of4667transportation at all. I am a big believer in competition, and so I4668want competition and the market to drive railroads' business decisions,4669not government regulations. But where there is a market failure or4670there is insufficient competition, that is the area I think the Board4671should regulate.4672                      RECENT MATTERS FOR THE BOARD4673    I'd like to take a moment to talk about the recent matters that4674have kept the Board very busy over the last couple of years. In early46752022, it was clear that there was a service crisis in the rail4676industry. Velocity was down. Terminal dwell and dwell at origin were up4677for some railroads by double digits. And trains holding due to crew4678issues were also up substantially. We heard from many stakeholders4679about just how bad the service had gotten. The National Grain and Feed4680Association recounted how one of its members had to spend $3 million on4681secondary freight to keep animals fed, and another had to stop selling4682feed when a loaded train sat at origin for one week because of a lack4683of crew. In April 2022, the Board held a two-day hearing on freight4684rail service challenges and heard from various industries and public4685officials including the Secretary of Transportation as well as4686executives from the Class 1 carriers. Not only did we hear in great4687detail about the extraordinary service disruptions, but also about the4688challenges associated with a rail labor shortage, which by the way,4689were pointed to by labor and the carriers themselves.4690    Immediately following the hearing, we issued an order requiring the4691reporting of service metrics and head counts. In the months that4692followed, we carefully monitored the bi-weekly reports and we started4693to see improvements across the network. We also saw a reduction in4694service complaints. And Members of the Board met with the CEOs of the4695Class 1 carriers who shared their plans on service recovery and their4696plans to attract and retain rail labor during what we now know was one4697of the tightest labor markets we have experienced in decades.4698    As if the post-pandemic recovery did not present enough of a4699challenge, 2022 also saw the rail carriers and the unions engaged in a4700labor dispute that posed a threat of bringing our freight rail network4701to a grinding halt. This would have cost our economy upwards of at4702least $1 billion per day and could have driven prices even higher for4703many consumer goods. And while the Board had no role in the4704negotiations, many of us held our breath along with the rest of the4705nation, until early December when the President signed a bill that4706imposed a settlement between labor and the carriers.4707    Also in 2022, the Board conducted an 11-day-long hearing regarding4708restarting Amtrak service on the Gulf Coast. That proceeding is now in4709abeyance pending settlement, but the Board recently held an additional4710hearing in the matter to inquire about the status of the settlement4711discussions.4712    And, of course, no discussion of the Board's recent activities4713would be complete without mentioning the merger between two Class 14714railroads, Canadian Pacific and Kansas City Southern. The Board4715approved that merger, subject to a number of conditions, in March of4716last year after review of an extensive record. That decision is4717currently on appeal.4718                    ON THE BOARD'S AGENDA RIGHT NOW4719    That brings me to a couple of things on the Board's agenda right4720now. In January 2024, the Board extended part of our temporary4721reporting requirements for carriers that arose out of the service4722crisis hearing that I mentioned earlier. Ultimately, the Board required4723carriers to report certain service and employment metrics through the4724end of 2024. Again, because there is a petition for reconsideration4725pending, I can only speak about this case in a limited fashion. The4726Board extended the employment reporting requirements while4727discontinuing reporting on service metrics. Through the end of the4728year, railroads will have to report monthly on headcounts, and a few4729railroads will also have to provide additional information about4730trainee classes and hiring goals.4731    Another priority for the Board, which will come as no surprise to4732anyone who has heard Chairman Oberman speak is reciprocal switching.4733Last fall, the Board issued a notice of proposed rulemaking and4734requested comment on many issues contained within. In short, this4735proposed rule would establish standardized metrics. If carriers provide4736service that falls below the metrics, certain shippers who are served4737by a single carrier in terminal areas would be eligible to receive4738service from an alternative carrier. The comments and replies are in,4739and the Board is considering them. Again, because this is pending, I am4740not able to talk about this proceeding in any greater detail but what I4741can say is it is something that the Board is very focused on.4742                     THE STATE OF THE RAIL NETWORK4743    I would also like to talk for a moment about the state of the rail4744network today. But first, I will need to talk about where we were by4745way of comparison.4746    At the beginning of the pandemic, volume on the rail network4747dropped to astonishingly low levels. Faced with extraordinary4748uncertainty, the rail carriers, like the airlines and many other4749industries, responded by furloughing employees. Once volume returned,4750the carriers expected that they could bring their employees back. What4751they experienced was, they could not. I find it hard to fault them for4752that given the unprecedented nature of the pandemic and how it affected4753economies and industries across the globe. But that lack of employees4754contributed to the service crisis. Since then, railroads have increased4755their headcounts. In January 2024, headcounts were up by 9 percent from4756their lowest point during the service crisis in 2022 while Train and4757Engine employment has risen 15 percent during that same time. And4758service has improved. While there are still pockets of service4759challenges on the network, I am hearing a lot fewer complaints from4760shippers now than I was in 2022 or even since last year. The biggest4761concern I hear from shippers now is this: service is fine, but volumes4762are down. How will the railroads perform when volumes return? And yes,4763volumes are down and have been down for some time. Last quarter,4764carloadings for the Big 4 railroads were over 12 percent lower than4765they were in the fourth quarter of 2021. That is a big reason that the4766Board extended railroad reporting of employment metrics through the end4767of the year, so that we have that extra visibility into headcounts when4768volumes do return. Because when they do, Carriers will need to have4769resiliency in their workforce to meet that increased demand.4770    And so, as a regulator, what I care about most is service. Poor4771service impacts shippers and it impacts the Nation's economy. But as I4772have said before, regulations cannot provide shippers with a good4773service product. Only the Carriers themselves can do that. And I4774believe they should be able to innovate, shift resources, and do what4775they think is best for their business. The same is true for shippers.4776And carriers, like shippers, are in the best position to know what4777resources they need to compete and to perform well.4778                GOOD SERVICE AVOIDS INCREASED REGULATION4779    That being said, we've seen what happens when service suffers, and4780that is that there are calls for increased regulation of the rail4781industry. And I will be the first to say, increased regulation is not4782something that I believe is in the best interest of the network, and it4783is not something that Congress wanted when it created the Board. The4784Surface Transportation Board is directed to follow the principles set4785forth in the Rail Transportation Policy enacted by Congress. While some4786of these principles are often viewed as competing, one such principle4787is to ``minimize the need for Federal regulatory control over the rail4788transportation system and to require fair and expeditious regulatory4789decisions when regulation is required.'' I call attention to this4790policy because the plain words of the statute require the Board to4791implement regulations ``when they are required.'' Shippers, Carriers4792and Members of the Board all hold different views on when ``regulations4793are required.'' To me, the role of the Board is to determine two4794things: whether there are issues that rise to the level of the need for4795regulatory action and whether the issue can be solved by regulation. In4796order to make that determination, the Board must consider both the4797principles of the Rail Transportation Policy as well as carefully4798consider any potential unintended consequences of the proposed4799regulatory solution. After input and comment from the industry, the4800Board must then consider whether the benefits of the proposed4801regulatory solution will outweigh any unintended harm.4802    At the end of the day, what shippers deserve is dependable service4803that is delivered with a customer-centric focus. And while opinions may4804differ, my own view is that the Carriers themselves will do a much4805better job of voluntarily achieving this goal across their networks4806than perhaps any changes that can be put into place through regulation.4807While I believe there are circumstances that warrant regulation, I also4808believe the Carriers are in the best position to make operational4809decisions on how to meet the needs of their customers.4810                          THE ROLE OF SHIPPERS4811    And I know that so far, I've had a lot to say about the carriers,4812but it goes without saying that everyone in this room knows that4813shippers serve a vital role to the freight rail network as well.4814carriers can't do their job well without open and effective4815communication with shippers. So I have to commend all of you for being4816out there interacting with your carriers on a frequent basis, because4817the carriers can't really know what they are doing well, or poorly,4818without your feedback. Certainly, there are times when the Board is4819asked to get involved when there is either a breakdown in communication4820or a dispute between a shipper and a railroad. But generally speaking,4821those cases are and should be the exception, not the rule. Service is4822doing pretty well right now, and while volumes are down, I don't think4823that is the only reason things are moving. I believe another big reason4824has to be the continuous conversations between you and your rail4825carriers, and for that I thank you.4826                    NEW PARTNERSHIPS AND INVESTMENTS4827    While I know there is concern from shippers about the future, I4828think there are also reasons to be optimistic as carriers pursue new4829partnerships and invest in their networks. Just to name a few recent4830examples, there is BNSF's new partnership with J.B. Hunt and GMXT to4831provide faster intermodal service to and from Mexico, as well as BNSF4832and J.B. Hunt's Quantum service that aims for 95 percent on-time4833performance. Another example is last year's merger between Canadian4834Pacific and Kansas City Southern and UP, CN, and GMXT launched a new4835intermodal service last year connecting Canada, the U.S., and Mexico.4836    Additionally, the railroads are investing in infrastructure to not4837only maintain but also modernize their networks. Norfolk Southern4838invested $1 billion in infrastructure in 2023, while in 2024, CSX plans4839to spend $2.5 billion, UP plans to spend $3.4 billion, and BNSF plans4840to spend $3.9 billion. And I would be remiss if I did not mention the4841railroads efforts over the past year or so to enter into paid sick4842leave agreements with their labor unions--agreements which may help to4843both retain and attract employees to the rail industry. It is my hope4844that I continue to see even more approaches like these going forward4845because I believe that rail has a bright future, especially if carriers4846provide the type of reliable service that their customers deserve.4847              RAIL CUSTOMER AND PUBLIC ASSISTANCE PROGRAM4848    Before I close, I would like to mention the Board's Rail Customer4849and Public Assistance Program in the event that there is anyone in the4850room who may not be aware of this resource. You can find information4851about the program on the Board's website. If you are having service4852issues or some other issue that you think the Board can help with, they4853are a great first call. Agency staff who work in the program are highly4854knowledgeable, and they can help with anything from giving you some4855information over the phone to informal mediation. And if you are having4856an issue and would just like to talk to someone, they will not reveal4857your identity to the railroad or other party without your consent.4858Again, it's informal, so they can't give you any binding guidance, but4859they have successfully resolved countless issues on an informal basis4860without those issues having to ever get to the Board itself.4861                                CLOSING4862    I would like to close by highlighting that despite the challenges4863the industry has faced during the last few years, that the United4864States has the most extensive freight rail network in the world. And4865the value of this resource cannot be overstated. Approximately 404866percent of long-distance freight in the U.S. moves by rail which is why4867our national freight rail network plays an indispensable role in4868delivering goods to American families and businesses. Perhaps even more4869significantly, the U.S. Department of Transportation estimates the4870total number of U.S. Freight shipments will have increased by 304871percent between 2018 and 2040. This means that reliable and predictable4872service on the network will only become even more vital to linking4873businesses to each other within the United States and to businesses4874abroad as well. Which is why, at the end of the day, what I care about4875most is predictable and reliable rail service which in my view, cannot4876be achieved through regulation but can only be provided by the carriers4877themselves.4878    And so again, I would like to thank all of you for the4879contributions you make to the freight rail network, the Nation's supply4880chain, and the Nation's economy. I encourage each of you to keep4881communicating with your carriers and when necessary, with the Board.4882Thank you so much for your time and I look forward to your questions.4883                                 ______48844885    Good morning, everyone. It's great to be here and thank you for4886giving me the opportunity to give you this regulatory update.4887                               BACKGROUND4888    Just to tell you a little more about my background, prior to4889working at the Board, I worked for 14 years with the Southeastern4890Pennsylvania Transportation Authority, the commuter railroad that4891serves the Philadelphia area. My most recent role with SEPTA was deputy4892general counsel, and in that role, I represented the agency before the4893FRA and the Pennsylvania Public Utility Commission; served as lead4894counsel on a major railroad reconstruction project; and served as lead4895counsel on real estate transactions and contract negotiations. Prior to4896that role, I served as the Director of Legislative Affairs for SEPTA,4897leading a team to advocate for SEPTA at the local, state, and Federal4898level, and reviewing legislation and regulations at all levels to4899determine their impact on SEPTA.4900    Earlier in my career, I was in private practice with a focus on4901bankruptcy law and commercial litigation, and I served as a law clerk4902for the U.S. Bankruptcy Court for the Eastern District of Pennsylvania4903and a law clerk for the late Vincent A. Cirillo, President Judge4904Emeritus of the Superior Court of Pennsylvania.4905                              INTRODUCTION4906    Thank you for the warm introduction. It is wonderful to be here and4907to have the opportunity to meet with all of you. Chairman Oberman was4908invited to be your guest speaker today, and I know he would have liked4909to have attended himself if he could have. Just as an aside, are there4910any Dallas Cowboys fans in the room? I flew in from Philadelphia4911yesterday and I am an Eagles fan. I am hoping to have a better4912performance today than the Eagles had on Monday night against the4913Cowboys--or you will really wish Marty could have been here today.4914                        TRANSITION TO THE BOARD.4915    I have had an opportunity to meet with numerous stakeholders since4916I joined the Board. I am often asked about my transition to the Board4917so I thought I would take a moment to talk about it. I joined the Board4918on January 11, 2021. When I joined the Board, I knew the issues pending4919before the Board were complex and challenging. What I didn't know was4920just how complex and how challenging they are. I know I have so very4921much to learn and believe that I will continue to learn every day until4922the last day of my term a little under 5 years from now.4923    What I also quickly observed was how welcoming and helpful all my4924fellow Board Members were and how much smoother my transition was4925because of Patrick, Marty, and Ann. And Robert, who was sworn in just a4926few days prior to me, was in constant contact with me as we navigated4927the transition together. This frequent communication has continued with4928all my colleagues on both a personal and professional basis, and I am4929grateful to have the opportunity to serve with such a great group of4930people and to serve at time when it is permissible to speak with a4931fellow Board Member about pending issues. I find these conversations to4932be invaluable--especially when they involve issues where I am not in4933agreement with a fellow Member. Having the opportunity to speak with4934another Member provides me with the ``why'' behind their position and4935allows me to have a better understanding of their opposing view. In4936some instances, I have even been enlightened to the point of agreeing4937with their position and on limited occasions, I know that sharing my4938view has been persuasive as well.4939    I would also be remiss if I did not point out the invaluable role4940that the Board's career professionals have had in my transition, as4941well as the help they have given to me with my learning curve. My4942observation is that the Board is very fortunate to have a small but4943highly talented group of professionals whose dedication to their work4944is evident in everything they do. In my short time on the Board, there4945has not been a question that they have not been able to answer off the4946top of their heads, and I believe the quality of our decisions speak4947for themselves. Lastly, I would like to take a moment to recognize the4948important role that my attorney advisor, Mike Small, has had in my4949transition. Mike unfortunately could not be here today. Mike has truly4950been an incredible resource to me, and I cannot imagine having made4951this transition without him. I am hoping that he is not participating4952via Zoom today and is taking a well-deserved break from listening to4953me.4954                IMPORTANCE OF HEARING FROM STAKEHOLDERS4955    In my short time at the Board, I've had the opportunity to meet4956with many different groups, including railroads, shipper groups, and4957individual shippers. I have made these meetings a priority because, and4958let me stress this, these meetings are extremely important to me. It's4959one thing to read a brief or a comment that sets forth a problem that4960stakeholders are having, and another thing entirely to hear from you4961directly and have you explain to me in conversation what you are4962experiencing in the field. I can't emphasize enough how helpful these4963meetings are to me--to have the opportunity to ask questions and to4964hear your perspectives. And so, at least for me, as long as we are not4965discussing a pending matter, if SWARS or anyone here today wants to4966present a challenge, explain it, and describe what you think the4967solution is, my door is wide open. Even if the Board is hearing4968completely different proposals from other stakeholders, I still want4969your suggestions, because you're the industry experts. More input can4970only make the Board's decisions better. Right now, I've been at the4971Board for about eight months, and to say that there's a high learning4972curve is an understatement. But as I gain more experience in this role,4973I can only imagine that these meetings will become even more helpful.4974             ROLE AT THE BOARD AND REGULATORY PERSPECTIVE.4975    As you all know, I am just one of the five members of the Board. We4976all bring different strengths and backgrounds to the Board, which play4977a role in how each of us reaches our decisions. In my meetings with4978stakeholders, I have often been asked about my views, my leanings, or4979how I make decisions. Just to give you a sense about my perspective: I4980try to approach issues first from a question of, ``What did Congress4981ask the Board to do?'' I look at statutes, and legislative intent, and4982especially the Rail Transportation Policy set out by Congress. Now, I4983don't know how many of you have looked at the Rail Transportation4984Policy, but it sets out fifteen often-competing policy priorities to4985guide the Board's decisions. The Rail Transportation Policy, or RTP as4986we call it, directs the Board to minimize the need for Federal4987regulatory control--but also requires the Board not to minimize it too4988much, and to still provide some regulatory control. Where there isn't4989effective competition, the RTP asks us to make sure rates aren't too4990high--but we should also make sure they aren't too low either. Congress4991carved a narrow path for the Board to walk, and shippers and railroads4992are often pitted against each other on either side.4993    And yet, even though railroads and shippers are often at odds, in4994the long run, shippers, railroads, and the Board are, I think, in4995agreement. In one meeting I had with a shipper, they talked at some4996length about recurring problems with missed switches. But during that4997same conversation, the shipper emphasized the importance of a strong4998freight rail network, and how important it was for the shipping4999community that railroads are healthy. Even though shippers and5000railroads agree on this in principle, there is strong disagreement on5001how best to maintain and improve the health and strength of our freight5002rail network. But when I make decisions, and when I meet with5003stakeholders, the health and strength of freight rail network is always5004my ultimate goal.5005             COMING SOON--DEMURRAGE TRANSPARENCY MEASURES.5006    With regard to recent decisions, I know that all of you are focused5007on the various aspects of your industry so you might not be familiar5008with the Board's recent decisions. I'd like to take a moment to give a5009brief overview of one recent decision and expand a bit on my views,5010because the decision will be effective this coming Wednesday, October50116th.5012    In April, the Board issued a final rule in the Demurrage Billing5013Requirements proceeding. The final rule outlines several transparency5014measures for Class I carriers when they are billing shippers for5015demurrage charges and creates minimum standards for what railroads must5016tell shippers on or with any demurrage invoice. Among the items that5017railroads must provide are the original ETA of each car, the receipt of5018each car at the last interchange with the invoicing carrier, and the5019actual placement of each car.5020    While I know that transparency doesn't solve every problem, it can5021solve some and, at the very least, make clear where the points of5022disagreement are for demurrage charges. It is my hope that this rule5023makes the circumstances surrounding any demurrage charge more5024transparent to shippers so that they have a better ability to determine5025the reasonableness of individual charges.5026    In that regard, I also believe that this rule may be beneficial for5027the railroads themselves. By giving shippers greater clarity into5028demurrage charges, shippers may find it less necessary to inquire about5029certain charges. And when they do have a need to contact a railroad5030about a charge, ensuring that shippers and railroads are coming to the5031issue with the same information may help to prevent some disputes and5032resolve others more quickly and easily.5033    However, I recognize that this is not the end of the process. After5034the rule becomes effective in October, I ask you and your members to5035please let me know how things are going, either through your5036conversations with OPAGAC or by getting in touch with me directly. Even5037now, before the rule is effective, questions are forming in my mind:5038Have you seen changes in demurrage practices? Have you seen5039improvements? Did the Board's decision create unforeseen new issues? Is5040the additional information that you're getting from the railroads5041helpful? Is there any other information related to demurrage that would5042be helpful?5043                        GOALS AS A BOARD MEMBER.5044    This ties in with a couple of my goals as a Board member. The first5045of these is that I want to make sure that I do not decide these issues5046and then remain cloistered away in DC, unaware of the effect of our5047decisions on railroads and shippers. I want to be responsive to your5048concerns. But the Board necessarily is somewhat removed from the effect5049of our decisions. We aren't a shipper, and we aren't a railroad, so the5050Board very much relies on you, our stakeholders, to be its eyes and5051ears out there to tell us how things are going on the ground. And so,5052especially in situations like a pending proceeding where the rules5053prohibit me from meeting with you, I would like to request that when5054you file comments and pleadings, to get into specifics as much as you5055possibly can. Provide photos, diagrams, metrics, whatever you can.5056Really explain the situations and difficulties you're having so that I5057can step into your shoes and see things from your perspective. If some5058rule is going to have a detrimental effect on your business, please be5059sure to tell us, but as much as you can, please show us and provide5060supporting data when possible.5061    Another goal I have is to help ensure that Board decisions, to the5062extent possible, provide clarity, not just to the individual parties5063before us, but to the broader community of stakeholders as well.5064Depending on the case, our decisions can have far-reaching effects. I5065want to make sure that when we decide an issue that sets out or5066clarifies a policy, or applies precedent to a new situation, that we5067set out the principles for our decision in such a way that members of5068the freight rail community can read a decision and get a good sense of5069how the Board will decide a similar case in the future.5070                          OVERVIEW OF DOCKET.5071    It is an incredibly busy time right now at the Board. As you are5072aware, there are several high-profile matters--all of which I,5073unfortunately, cannot discuss with you because we are not permitted to5074discuss pending proceedings. I would like to give you a quick overview5075of what the Board is working on, but first, I'd like to take a moment5076to discuss the President's Executive Order, which I've been asked about5077recently, and how the executive order impacts the Board.5078           COMMENTS REGARDING EXECUTIVE ORDER ON COMPETITION.5079    As you are all aware, the executive order expressed concerns about5080consolidation in industries, and the effects of consolidation on5081competition. It highlighted the effects of consolidation not only on5082consumers, in terms of pricing, service, and choice, but also on some5083producers, who may encounter concentrated market power as they try to5084sell their goods.5085    While most of the executive order did not touch on the rail5086industry, the concerns about consolidation and pricing, and the desire5087to foster competition, are already reflected in the rail transportation5088policy, which is set forth by Congress, and the Board is directed to5089follow that policy when making many of its decisions.5090    The rail transportation policy establishes the policy of the U.S.5091government, and the Board, to allow competition and demand to establish5092reasonable rates, and to ensure that there is effective competition. In5093the absence of competition, where rates are too high, Congress directed5094us to maintain reasonable rates. If predatory pricing and practices5095exist, or there are undue concentrations of market power, the Board,5096through our decisions and rulemakings, is tasked with prohibiting5097those.5098    In other words, the driving forces and the concerns expressed in5099the President's executive order are consistent with the policies set5100forth within the Rail Transportation Policy. Therefore, concerns about5101competition, pricing, and market power will continue to inform the5102Board's decisions, as Congress intended.5103    And just as a last note, the Board is an independent agency, which5104means that we are ultimately guided by the RTP and our governing5105statutes. As the RTP certainly acknowledges, regulatory action is not5106always helpful in fostering competition, and further, imposing5107regulations will often have long-term impacts. So whenever the Board5108proceeds with regulatory action, we need to be as certain as possible5109that our proposed regulations will achieve our desired outcome, and try5110to avoid situations where unintended, undesirable consequences outweigh5111the benefits of regulation.5112MERGERS.5113    Now, moving on to the Board's docket: First, of course, the Board5114has two large mergers pending before it, one of which is a major merger5115of two Class I railroads. It is the first time in 20 years that the5116Board has reviewed a merger of that size. The first involves CSX's5117acquisition of Pan Am Railways, which would extend CSX's network in New5118England. The second involves Canadian Pacific's acquisition of Kansas5119City Southern, which would create a single railroad that extends from5120Canada, through the U.S., and into Mexico. For each of these mergers,5121the Board will be going through a transparent, public process, to5122ensure that concerns from all stakeholders are taken into account.5123RULEMAKINGS.5124    The Board has several rulemaking proceedings before it right now,5125some initiated by the Board, and some initiated by stakeholders. I'm5126not going to go through all of them, but to highlight a few:51275128   We have a petition from several Class I railroads asking us5129        to change how we determine whether Class I rail carriers are5130        revenue adequate on an annual basis, in which they argue for a5131        standard that would benchmark revenue adequacy to the S&P 500.51325133   We have a rulemaking proceeding to consider a new procedure5134        for challenging the reasonableness of rates in smaller cases,5135        in which the Board would decide a case by selecting either the5136        shipper's or the railroad's final offer.51375138   There's another proposal from several Class I railroads to5139        create an arbitration program to resolve small rate disputes.51405141   And we also have a proposal from several organizations to5142        create regulations authorizing private railcar owners to5143        assess, essentially, demurrage charges when a Class I railroad5144        holds on to a private railcar beyond a reasonable time.51455146    That brings me to one proceeding that I particularly wanted to5147highlight, because the Board is currently seeking public comment on an5148important issue.5149FIRST-MILE LAST-MILE.5150    A few weeks ago, we issued a decision asking for comments about5151issues related to first-mile last-mile rail service metrics. In my5152meetings with shippers and shipper organization, this is an issue that5153has been raised repeatedly. During these meetings, shippers have5154presented their challenges with first-mile, last-mile. While I would5155not be able to summarize those challenges, the challenges seem to vary5156by shipper. Our recent decision asks for, broadly, four types of5157information.5158    First, what issues are you having? How does the issue effect your5159operations? What remedies are available to you right now? Second, are5160there additional metrics that you think would be helpful for the Board5161to collect, and how would those metrics benefit you? Third, what data5162do Class I carriers currently track? And fourth, what are the trade-5163offs for any suggestions?5164    If you are having issues with first-mile last-mile service, I would5165like to hear about it. If you have an idea for information and metrics5166that you believe the Board should collect and which would be helpful to5167clarifying the challenges associated with First Mile Last Mile, I hope5168you will include it in your comments.5169    In my view, and I'd ask that you keep this in mind as you consider5170your comments, the most important question the Board is asking in the5171First-Mile Last-Mile proceeding is this: What problem are we trying to5172solve? Your comments will be essential for the Board to understand the5173scope of the problem.5174PUBLIC COMMENTS ARE CRUCIAL.5175    Clearly, the issues before the Board are wide-ranging, and in5176several proceedings, any action that we take could have large effects5177on the industry or the network. Because these regulations are often in5178place for many years and come with associated costs, I believe it is5179incumbent upon the Board to proceed cautiously with any action that5180could have an effect on the rail network. One way the Board can proceed5181with caution is to make sure that the Board seeks input from the very5182people who best know the network--the stakeholders. If there's one5183thing I've learned in the 70-or-so meetings I've had with shippers and5184railroads and other organizations, it's how much I don't know. I both5185value and depend upon the insight and experience from people like the5186ones in this room who are literally on the network on daily basis, to5187tell me what works and what doesn't and how we could make it better.5188So, if there is something that the Board is doing that sounds like a5189good idea or bad idea, I hope you will submit detailed comments.5190IMPORTANCE OF PROCEEDING WITH CAUTION.5191    I've learned a few lessons both during the pandemic and during my5192time at the Board about how interconnected things are, how supply chain5193issues affect us all, and how many intersecting problems there are5194right now in the supply chain. In my meetings with stakeholders, both5195on the railroad and shipper sides, I've had a lot of productive and5196enlightening discussions about the issues affecting the rail network5197right now, and I cannot thank enough the people and organizations I've5198met with for lending me their expertise as I try to stay informed about5199the state of the network. I really see that as one of the most5200important aspects of my job, because whenever the Board considers5201regulatory action, I do not take this responsibility lightly, nor do I5202want us to do so in a vacuum.5203    If I could sum up one takeaway from those meetings, it's that there5204are many potential issues affecting the network right now. Issues that5205stakeholders have raised to me include: chassis shortages; a shortage5206of railroad labor; truck driver shortages; and warehouse labor5207shortages. We've seen shifts in consumer demand, a lumber shortage, and5208now a continuing semiconductor shortage. And from my conversations, it5209sounds like the port and intermodal issues are likely to be with us for5210some time.5211    As I hear about all of these problems, I try to focus on two5212things. First, what can the Board do to help? I say can because at5213least some of the issues that are affecting the network may originate5214elsewhere along the supply chain, and therefore it's simply not an area5215where the Board has any power to regulate. Not only should the Board5216try to regulate within its area of expertise, but it should also5217regulate within its statutory mandate.5218    Second, what should the Board do to help? Part of the issue with5219regulations is that once they are on the books, it is very difficult to5220remove them. And as the Board looks to solve issues that we see in the5221network, I want to ensure that the problems that we are trying to solve5222are not temporary issues, or issues that may be resolved by the market.5223I do not want to impose a more-or-less permanent solution to what turns5224out to be a temporary problem. I wouldn't want to saddle either5225shippers or railroads with regulations that turn out to be unnecessary.5226    And this just further underscores the importance of hearing from5227you when we do propose regulations or ask for input, as in the First5228Mile Last Mile docket. Wherever possible, I'd like to rely on data5229before the Board creates a new rule, and it is from you and your5230companies that we are going to get a lot of that data. So, if anyone5231has first-mile last-mile issues, or you think that some additional5232metrics would help the Board to determine what actions are necessary,5233please send us your comments. The docket number is EP 767. Comments are5234due by December 17th. Replies are due by February 17th. It would be5235great for the Board, and for other stakeholders, to hear your thoughts.5236CLOSING.5237    As I said earlier, my door is always open, even if right now, that5238door is mostly a digital one. I am certainly available to meet through5239Teams or Zoom, but I'm hoping to get out and visit some of you to see5240your operations firsthand. That way, when I'm back in the office, I'll5241have a better, real-world picture of how things operate. Thanks so much5242for your time, and I'd be glad to answer some questions if you have5243any.52445245                 STATEMENT OF HON. TIM SHEEHY,5246                   U.S. SENATOR FROM MONTANA52475248    Senator Sheehy. Thank you all for your opening statements.5249    Obviously, recent events with aviation, we will look5250forward to talking a little bit about the NTSB. But I think5251before we get to current events, as Senator Lujan alluded to5252earlier, we are in a highly polarized time. But recently there5253is a bipartisan letter shared from a number of us expressing5254concern over proposed rail merger between Norfolk Southern and5255Union Pacific. I will enter that into the record here with our5256Committee staff.5257    [The information referred to follows:]52585259                                       United States Senate5260                                   Washington, DC, October 30, 202552615262Hon. Patrick Fuchs,5263Chairman,5264Surface Transportation Board,5265Washington, DC.52665267Hon. Karen Hedlund,5268Member,5269Surface Transportation Board,5270Washington, DC.5271Hon. Michelle Schultz,5272Vice Chair,5273Surface Transportation Board,5274Washington, DC.52755276Dear Chairman Fuchs, Vice Chair Schultz, and Member Hedlund:52775278    We write regarding the recently proposed merger between the Union5279Pacific Railroad (UP) and Norfolk Southern (NS) Railway and to5280encourage the Surface Transportation Board (``STB,'' or ``the Board'')5281to subject this proposed merger to a rigorous and comprehensive5282evaluation not just for its potential short-term efficiencies, but for5283its ability to demonstrate clear and tangible long-term improvements in5284competition.5285    As you know, the STBs post-2001 ``Major Rail Consolidation5286Procedures'' were adopted specifically to place heightened emphasis on5287whether Class I railroad mergers enhance, rather than merely preserve,5288competition, and to ensure that any potential anticompetitive effects5289or other harms are outweighed by substantive and demonstrable gains to5290the public interest. The proposed UP/NS merger will be the first to5291come before the Board under these rules, and it is essential that you5292establish a strong precedent and apply these heightened standards in5293the way they were intended.5294    In conducting its review, we strongly encourage the STB to take5295into consideration the impact the proposed merger, if approved, may5296have on our Nation's agricultural producers, and on the STBs mandate to5297preserve long-term competition and ensure efficient, economically5298viable rail service.5299Impact on Agricultural Supply Chains5300    U.S. farmers, ranchers, and producers are facing historic market5301losses as they strive to provide the highest quality, lowest-cost food5302supply in the world. They depend on reliable and competitive rail5303service to move their agricultural products to markets both domestic5304and international. Our producers already face limited competitive5305options for rail service. Further consolidation could compound these5306challenges by reducing routing flexibility, constraining network5307fluidity, increasing market power, and limiting access for both5308producers and processors. As part of its review of the proposed merger,5309the STB should take into account the long-term implications for the5310movement of agricultural products across the domestic rail network,5311including potential impacts on shipping costs and market access.5312Preserving Long-Term Competition5313    Since the passage of the Staggers Rail Act of 1980, which largely5314deregulated freight railroads, the number of Class I carriers in the5315U.S. has dropped from over 30 to just six. Today, four of those5316carriers control more than 90 percent of U.S. rail freight. Already5317highly consolidated, the current landscape of railroads as it exists5318today represents a fragile equilibrium with two in the west, two in the5319east, and two through the middle.5320    As the STB reviews the proposed merger, it is important to consider5321how additional consolidation could alter this equilibrium. In5322particular, the Board should examine potential impacts on key freight5323corridors, where fewer alternatives for shippers could reduce5324competitive pressure on rates and service. Over time, such dynamics5325risk embedding higher costs, diminished service quality, and less5326innovation across the network. These conditions, once entrenched, are5327difficult to reverse and may discourage future market entrants. The5328STB's post-2001 merger rules are designed precisely to guard against5329this outcome, requiring that mergers demonstrably strengthen5330competition rather than simply accelerate consolidation.5331Efficient, and Economically Viable Rail Service5332    Historical precedent highlights what is at stake. The 1996 Union5333Pacific-Southern Pacific merger triggered widespread service breakdowns5334and safety lapses. Integration challenges led to nine worker5335fatalities, a Federal Railroad Administration finding of a5336``fundamental breakdown'' in safety practices, and freight disruptions5337lasting more than a year and a half--delays that cost the broader5338economy an estimated $4 billion.5339    If approved, a combined UP/NS would handle more than 40 percent of5340all U.S. freight rail traffic. The Board should weigh the risks of a5341similar disruption given the proposed scale: a transcontinental system5342spanning 50,000 route miles across 43 states. Service interruptions of5343this magnitude could have severe consequences, especially for5344agricultural producers. Time-sensitive shipments during harvest could5345be delayed or spoiled, export windows could be missed, and access to5346global markets could be sharply reduced.5347    We thank you for your careful consideration of this merger5348application, and its impact on domestic agricultural production, as5349well as the STB's mandate to enhance long-term competition. We look5350forward to working with you to ensure the STB continues to promote an5351efficient, competitive, and economically viable freight rail network5352that serves the public interest.5353            Sincerely,53545355John Hoeven5356United States Senator53575358Tim Sheehy5359United States Senator53605361Bill Cassidy, M.D.5362United States Senator53635364Steve Daines5365United States Senator53665367Roger Marshall, M.D.5368United States Senator53695370M. Michael Rounds5371United States Senator53725373Roger F. Wicker5374United States Senator53755376Jim Banks5377United States Senator53785379Joni K. Ernst5380United States Senator53815382Amy Klobuchar5383United States Senator53845385Martin Heinrich5386United States Senator53875388Tina Smith5389United States Senator53905391Raphael Warnock5392United States Senator53935394Patty Murray5395United States Senator53965397Ruben Gallego5398United States Senator53995400Tammy Baldwin5401United States Senator54025403Tammy Duckworth5404United States Senator54055406Richard J. Durbin5407United States Senator54085409    Senator Sheehy. This letter, bipartisan, recognizes a5410growing concern from industry and from elected officials about5411mass consolidation within the rail industry. And the free5412market is the free market. As a former businessman, I support5413the best free market outcomes possible, but ultimately the free5414market must also serve its customers effectively.5415    And I want assurances from both you, Mr. Kloster and Ms.5416Schultz. And I would be curious of your thoughts right now of5417what the Service Transportation Board is going to do to examine5418this merger and make sure that in the end, if it does happen,5419we are not placing the needs of our farmers and ranchers, our5420manufacturers, and our rural communities who depend on an5421increasingly consolidated rail industry to serve them, their5422needs and their businesses.5423    Ms. Schultz. Thank you, Senator. I read the letter and5424clearly this transaction will be the largest and most5425monumental transaction that has ever come before the Board in5426the history of the Board. And what I can say is that I also5427expect that the record in this matter will be voluminous5428matching, you know, the magnitude of the case.5429    I can speak for myself in saying that in all matters that5430come before the Board I review the evidentiary record, the5431comments that are filed on the docket, and the applicable law5432and statutes, and I will be prepared to do so in this case as5433well.5434    Senator Sheehy. Mr. Kloster, any thoughts on the merger?5435    Mr. Kloster. Yes, Senator. You know, I have spent my whole5436career in the rail history and I have seen a lot, and I have5437seen all the mergers, you know, the successes, but also the5438failures. You know, my view is that, yes, this is the largest--5439this will be the largest merger ever. And you know my5440commitment to you and to this Committee would be to be5441objective, to be fair, to be impartial, to do all the research5442and the analysis to come up with the right decision regarding5443this merger, or any topic that, you know, case issue that comes5444before the Board.5445    Senator Sheehy. And ultimately for the Board--this is more5446of a philosophical question--but for either of you, I mean,5447what do you view the highest responsibility of the Board? Is it5448rail safety and standards of operation? Or is it industry5449health, and as far as industry health, where does that--where5450does that vector point you? Is that health of the corporations?5451The rail corporations? Is it the health of the businesses they5452serve? How do you view that that philosophical ordering of the5453priorities?5454    Ms. Schultz. Senator, thank you for the question. With all5455due respect, because the merger is a pending matter I have to5456be very, very careful about any comments I make on, you know,5457my views on any of the standards that I might be reviewing. As5458I am sure you are aware, this will be a case of first5459impression as it relates to the new merger rules, they are very5460much public and available on our website, but for me to provide5461comment on my views on how I view the standards of law or how I5462might apply them would be pre-decisional.5463    Mr. Kloster. I agree with Member Schultz.5464    Senator Sheehy. Mm-hmm.5465    Mr. Kloster. The only thing that I would add would be that5466I do not think there is any particular--there are a lot of5467matters that are important, and it is going to be incumbent5468upon me as a member, assuming I am confirmed, you know, to5469weigh all those matters.5470    Senator Sheehy. Mr. DeLeeuw, obviously we had a tragedy in5471Louisville recently, and that comes on the Hill--we have the5472safest airspace in the world. We have the safest aviation5473system in the world. I think it is important we remember that5474because clickbait on YouTube wants us to think that planes will5475fall out of the sky. But they do fall out of the sky, accidents5476do happen, and I think this actually dovetails into our last5477conversation about mass consolidation in any industry, and5478oftentimes those benefits are built as efficiencies. But it5479also creates a lack of competition between manufacturers and5480between operators.5481    So I am curious for your thoughts right now, and we only5482have a few seconds left, but what are your current concerns5483about what American aviation looks like so we can continue to5484be the leaders of the world, whether it is in manufacturing,5485whether it is in commercial operations. How do we maintain5486America's aviation dominance in the 21st century?5487    Mr. DeLeeuw. Well, thank you, Senator, for the question. I5488do think we have the premier aviation system in the world. We5489have by far the absolute best controllers in the United States.5490We have professional pilots. I think our national airspace5491system is safe. When we do discover things are maybe not quite5492right, for instance, the government shutdown, the airlines, the5493FAA are very proactive at looking at the data and making5494decisions to making sure things stay safe.5495    So in all matters in the aviation industry, we do very5496formalized risk assessments, we look at the consequences, and5497we look for ways to mitigate risks that we discover based on5498the hazards we are aware of.5499    Senator Sheehy. Well, the NTSB is a great organization, and5500the entire world has modeled their air safety off of ours. So I5501look forward to continuing that legacy.5502    Senator Lujan, I recognize you for your questions.5503    Senator Lujan. Thank you, Senator.5504    Mr. DeLeeuw, yesterday I had the opportunity to ask Mr.5505Morse questions about his role, as Deputy Director in the5506Office of Presidential Personnel, he told me in a meeting in my5507office when I asked him if he would ever do anything illegal,5508he said no. I appreciated that. But during his--during the5509hearing, he refused to answer any of my questions about the5510firings he carried out, saying they were subject to litigation.5511    However, Mr. Morse's actions have a direct link to your5512nomination today because he wrote the e-mail illegally firing5513Vice Chair Alvin Brown from the National Transportation Safety5514Board. Yes or no, is your nomination to the NTSB to take the5515vacancy left by Mr. Brown's firing?5516    Mr. DeLeeuw. Senator, I thank you for the question. I have5517an expertise flying aircraft and aviation safety. I am eager to5518serve on the NTSB, but I am not a constitutional lawyer. So5519your question, which I certainly understand, I will5520respectfully have to leave that with the courts in the legal5521process.5522    Senator Lujan. Which position would you be taking? Is there5523a vacant position today?5524    Mr. DeLeeuw. Sir, I have just been nominated to be one of5525the Board Members at the NTSB.5526    Senator Lujan. You do not know which position it is?5527    Mr. DeLeeuw. Sir, I believe it is an open position5528currently, but I do not----5529    Senator Lujan. I do not think it is a question from anyone5530here. It is not up to the courts. I am surprised you will not5531even answer that one.5532    Mr. DeLeeuw. Well----5533    Senator Lujan. But I will move on. I am not trying to play5534gotcha here, just that is fact. Anyone dispute that?5535    Hearing none. Yes or no, does the NTSB have a quote, ``For-5536cause removal criteria'' which says that, ``The President may5537remove a member for inefficiency, neglect of duty, or5538malfeasance in office''. And if you need the statute, it is 495539U.S.C. Section 1111(c). And I can get a copy of it if you need5540to see it.5541    Mr. DeLeeuw. Yes, Senator.5542    Senator Lujan. Yes or no, did Mr. Brown file a lawsuit5543suing the Trump administration for his illegal removal from the5544position at NTSB?5545    Mr. DeLeeuw. Senator, thank you for that question. Quite5546frankly, I am not aware of the--I hear rumors, I hear some5547stories in the media, but I am not aware of official lawsuits5548on--from no one.5549    Senator Lujan. Fact, Mr. Brown filed a lawsuit. I do not5550know if there is any dispute. Yes or no, has Mr. Brown's case5551been resolved?5552    Mr. DeLeeuw. Not that I am aware of, Senator.5553    Senator Lujan. Do you believe in the judicial process?5554    Mr. DeLeeuw. Yes, Senator.5555    Senator Lujan. Last week, I joined my Democratic colleagues5556in a letter to the Chairman urging him not to move forward with5557his hearing on NTSB Vice Chair Brown's replacement. As I5558mentioned in my opening remarks, Vice Chair Brown is actively5559challenging his unlawful removal in court. If the Senate moves5560forward to confirm the replacement and the courts then5561reinstate Vice Chair Brown to the NTSB, we could have two5562Senate confirmed board members for only one position.5563    My question, Captain DeLeeuw, if the court rules in favor5564of Vice Chair Brown and direct him to be reinstated, will you5565commit to stepping aside swiftly?5566    Mr. DeLeeuw. Senator, that is something that I have not5567considered or thought about, but if that situation was to5568arise, I would reach out and talk to the General Counsel of the5569NTSB and possibly the Department of Justice.5570    Senator Lujan. I appreciate that.5571    Mr. [sic] Schultz, since you currently serve on the Surface5572Transportation Board, I would like to ask you a few questions--5573or Ms. Schultz, I apologize--yes or no; is the Surface5574Transportation Board an independent Federal agency?5575    Ms. Schultz. I am sorry. Yes, Senator, the only statute----5576    Senator Lujan. Yes or no--yes or no; did Board Chair5577Patrick Fuchs send an e-mail to all career staff placing5578political blame for the shutdown?5579    Ms. Schultz. Chairman Fuchs sent an e-mail indicating that5580there was an impending shutdown.5581    Senator Lujan. Did he put blame on someone, one party or5582the other?5583    Ms. Schultz. There was language within the e-mail that5584indicated that, yes.5585    Senator Lujan. So in fact, he did place political blame for5586the shutdown. The reason I say this is statements like these5587are very concerning. As you know, there is a law that passed5588Congress years ago, it was actually by a New Mexico U.S.5589Senator, Senator Hatch, it is called the Hatch Act, and this5590could be seen as a violation of the Hatch Act.5591    Ms. Schultz, in your opening statement from your prior5592confirmation hearing, you wrote, quote, ``It is incumbent upon5593the Board to approach matters brought before it by conducting a5594thorough analysis of the facts and adjudicating matters in an5595impartial manner within the bounds of its jurisdiction and the5596law''.5597    However, the President has made it clear that agencies like5598the STB should not be independent, but wholly beholden to the5599President's direction and demands. How can the STB effectively5600function while subjected to political interference and5601coercion? Is it possible?5602    How can the STB effectively function while subjected to5603political interference and coercion?5604    Ms. Schultz. I am sorry, Senator, I could not hear the last5605portion, while----5606    Senator Lujan. How can the STB function effectively if they5607are subjected to political interference and coercion?5608    Ms. Schultz. Coercion, sorry, sir.5609    Senator Lujan. I have an accent. I apologize.5610    Ms. Schultz. I just, I could not hear the last part. I am5611sorry. Senator, I appreciate the concern that you have raised.5612I would also go back to, I believe what you opened with, which5613is the STB is an independent agency. It is contained within5614statute. And I can say that, if confirmed, I will uphold and5615apply the law in a fair and impartial way.5616    Senator Lujan. I appreciate that. I have other questions5617but I want to be mindful of my colleagues as well. Very much5618appreciate your response, Ms. Schultz.5619    Senator Sheehy. Senator Baldwin, you are recognized for5620your questions.56215622               STATEMENT OF HON. TAMMY BALDWIN,5623                  U.S. SENATOR FROM WISCONSIN56245625    Senator Baldwin. Thank you. I am going to continue down5626similar path to Ranking Member Lujan.5627    Mr. Kloster, I am concerned deeply about the independence5628and the integrity of the Surface Transportation Board,5629especially heading into an extremely significant decision that5630the Board will have to make regarding Union Pacific and Norfolk5631Southern in that merger.5632    Union Pacific's CEO recently met with the President about5633the merger and went as far as to make a contribution of funds5634to help President Trump build his ballroom. President Trump has5635stated that the merger sounds good to him, even though it5636should be clear that a merger of this magnitude would increase5637costs, create more unreliable service for shippers, and reduce5638overall competition.5639    When this merger comes before the Board, do I have your5640commitment to act independently of political influence and base5641your decision on the merits and the merits alone? Or do you5642plan to deliver the decision that the President wants?5643    Mr. Kloster. Absolutely, I will treat it with independence5644impartiality the merger application, it has not--they have not5645even filed an application so no one wants--no one even knows5646what they are going to propose. You know, if I am confirmed and5647I am on the Board, you know, I will look forward to, like5648everybody else, reading that and considering that. But I will5649promise to do all my research, my analysis, again, in an5650independent manner.5651    Senator Baldwin. On that issue of research and analysis,5652the Surface Transportation Board's post-2001 major rail5653consolidation procedures places heightened emphasis on whether5654Class I railroad mergers enhance rather than simply preserve5655competition. So will you commit to following this comprehensive5656evaluation required by these updated standards when evaluating5657the Union Pacific and Norfolk Southern merger?5658    Mr. Kloster. Yes, I will----5659    Senator Baldwin. Thank you.5660    Mr. Kloster.--I will follow the law.5661    Senator Baldwin. Ms. Schultz, I am going to ask you the5662exact same question that I just asked Mr. Kloster. Will you5663commit to following the rigorous and comprehensive evaluation5664required by the STB's post-2001 merger rules when evaluating5665the Union Pacific and Norfolk Southern merger?5666    Ms. Schultz. Yes, Senator.5667    Senator Baldwin. OK. It is my understanding, and I am5668dovetailing on a question that Senator Lujan just asked,5669because when we had--and thank you both for meeting with me in5670advance of this, and having a fulsome discussion about many of5671the issues that the STB will grapple with.5672    But I asked a question about whether there were any5673partisan postings or e-mails that you were aware of, and it is5674my understanding--and you replied no--but it is my5675understanding that just before the agency closed its doors on5676October 1, that Chairman Fuchs sent an unprecedented e-mail to5677agency staff blaming Democrats for the government shutdown. Are5678you aware of this e-mail and did you receive it?5679    Ms. Schultz. Yes, Senator, I did receive it. And I would5680like to note, in our meeting, at that time I was not aware of5681the e-mail. Upon meeting with some of the members of your5682staff, it was brought to my attention. I did go back and I did5683review the e-mail, but at the time that we met, I was in fact5684not aware of the e-mail.5685    Senator Baldwin. Among other things, that e-mail states5686that Democrats are blocking this Continuing Resolution in the5687U.S. Senate due to unrelated policy demands. And I have to tell5688you that I was really disappointed to see this e-mail. It is5689unbecoming of an independent board which is looking more like5690Trump--Donald Trump's board with the illegal firing of Robert5691Primus. Do you think it is appropriate for the Board leadership5692of an independent agency to circulate a clearly partisan e-mail5693to staff?5694    Ms. Schultz. Senator, I believe it is my understanding from5695reading the news, that that e-mail went out across the5696Government as a whole. That said, what I cannot say----5697    Senator Baldwin. So the Chairman sent that to other5698departments, other agencies?5699    Ms. Schultz. Not our Chairman, I believe similar language5700was included across--in other----5701    Senator Baldwin. Do you believe it was appropriate?5702    Ms. Schultz. Senator, what I can say is, if confirmed I5703will review every case the way I have always approached it,5704which is with impartiality, absent apart from politics which5705has no place at all within any Board decision, and I give you5706my commitment that I will--any pending matter I will apply the5707law on its merits.5708    Senator Baldwin. Do you believe the firing of Robert Primus5709was justified?5710    Ms. Schultz. Senator, as you are aware, my former5711colleague, Mr. Primus, has filed a lawsuit against the Surface5712Transportation Board. It is my practice to not comment on5713pending litigation.5714    Senator Baldwin. OK. More hypothetically then, do you--5715should the expectation be that as Board Members you will be5716removed if you do not support the President's agenda?5717    Ms. Schultz. I have been appointed by the President for my5718first term. I have been nominated for a second term, and I5719serve at the pleasure of the President. So he has the power to5720appoint and the power to remove.5721    Senator Sheehy. Thanks for your answer, Ms. Schultz. We are5722over time.5723    We will go back to the NTSB. We have talked a lot about5724rail here. None of you are constitutional lawyers, so let us5725talk about planes and trains. Your role in the NTSB, obviously5726the NTSB is the gold standard in investigating post-crash5727analysis. As a survivor of a fatal plane crash, I have been5728through an NTSB investigation. And I do not think anybody can5729argue that that how you dissect a crash scene and draw lessons5730from that is renowned worldwide.5731    But I think one thing that we can probably do better is5732hasten the feedback loop between when an accident happens and5733how that feedback makes it back to our manufacturing base, so5734we can ensure, and not just manufacturing base, our air traffic5735control system. We have heard a lot these past few months, and5736of course we are hearing a lot now about how America's ATC5737system is old. It is struggling under the weight of growing air5738traffic, and obviously now we are having controller shortages.5739    So I would love to hear your thoughts about what role the5740NTSB can play in ensuring that our ATC modernization and5741airspace modernization happens rapidly and safely so we can5742meet the demands of 21st century air travel?5743    Mr. DeLeeuw. Well, thank you, Senator, for the question.5744You know you mentioned about the NTSB. You know, the NTSB is a5745small agency, roughly about 425 people plus or minus 20, it is5746the preeminent safety agency worldwide, and what is amazing is5747for 400-and-plus people they provide a fantastic service to the5748American public.5749    So the NTSB does take the time, you know, you mentioned5750about the timeliness, I think that certainly improved in the5751last few years, but the NTSB is not about necessarily a5752timeliness piece of it. They want to be at--you know,5753investigation that is timely but it is all about the quality.5754So I have worked with the NTSB for years and I would say that,5755you know, timeliness is an issue and they are aware of it, but5756it is all about the quality. So they want to make a good final5757report with safety recommendations that will benefit safety and5758save lives.5759    The Chairman. Thank you. Mr. DeLeeuw, ahead of this5760hearing, Democrats criticized me for including you on this5761panel because of the pending litigation involving the former5762Mayor of Jacksonville. That is a distraction from the merits of5763your nomination. 11 people were killed in an aviation accident5764on Tuesday. This is a serious nomination and by any measure you5765are extremely qualified.5766    I want to start by asking you about your experience working5767in aviation safety. You currently serve as the Managing5768Director for Safety and Efficiency at American Airlines, and5769you have been in various safety positions at American and at5770the Allied Pilots Association for more than 15 years. What5771aviation safety issues have you personally worked on?5772    Mr. DeLeeuw. Well sir, thank you, Senator. Thank you for5773that question. Well, over the years I have worked with a lot of5774different programs. You know, the airlines they follow a safety5775management system. And so we have got four components to that,5776safety promotion, safety policy, safety risk management, safety5777assurance. I have been primarily in the safety assurance aspect5778of that which involves the voluntary confidential reporting5779programs. and aviation--we call that the Aviation Safety Action5780Program.5781    We also have the Flight Ops Quality Assurance which is5782flight data monitoring. We were--I was responsible to work with5783my team to start a continuous LOSA program, and the last5784several years we have started another safety assurance program5785called the Learning and Improvement Team. All these, some of5786these are trend setters, let us say.5787    But on the other part of it is that over the years several5788things have popped up. I would have to say that I was fortunate5789to be part of a joint committee between the American Airlines5790and the Allied Pilots Association. On the 737 MAX Return to5791Service, and that was successful. American was actually the5792first carrier to return the MAX to Revenue Service. But the5793entire process of working with the manufacturer was well done,5794and I think it was able to improve safety for all.5795    The Chairman. Thank you. By any measure you are objectively5796very well qualified for this position. As you know, in October,5797this Committee unanimously approved my legislation, the ROTOR5798Act, which requires aircraft operating in controlled airspace5799to be equipped with ADSB IN technology. ADSB IN is a valuable5800safety enhancing technology that improves situational awareness5801in the cockpit.5802    Mr. DeLeeuw, the NTSB recommended ADSB IN years ago. You5803are a commercial pilot. Can you tell us about your experience5804implementing ADSB IN and why it is important?5805    Mr. DeLeeuw. Thank you, Senator. That is a--it is a great5806question. I am glad to answer that. I am a huge proponent of5807ADSB IN, and I certainly appreciate everybody's work on the5808Commerce Committee, and certainly your leadership to get that5809pushed through.5810    You know, American Airlines has equipped many of our5811aircraft with the ADSB IN technology. We have been using that5812and we have been trying the system out. We have worked well5813with the air traffic controllers in a certain center. At first5814everybody is a little bit skeptical, but over the time now I5815would have to say that as we have looked through it.5816    And we have, you know, tried the system out, and we have5817worked with it, both pilots and controllers like this system.5818It is going to improve safety. It will save lives. It will5819reduce controller workload. It is the next step we need to5820improve safety in the airline system.5821    The Chairman. And what do you foresee as the challenges to5822implementation?5823    Mr. DeLeeuw. Well, Senator, I am a safety guy, but I would5824have to say that anytime new technology comes out, there is5825always a question about cost. I understand that. But my5826understanding is that people I have talked to, whether it is5827the labor associations, or the other airlines, there is always5828a little bit of concern on that, but in this case here there5829seems to be support throughout the industry for ADSB IN.5830    The Chairman. Well, I am hopeful that the Senate and the5831full Congress will listen to your testimony and move quickly to5832pass the ROTOR Act into law and put it on the President's desk5833to be signed.5834    Turning to the STB, in 2023, Congress enacted legislation5835that I wrote to fix a broken permitting process for four5836bridges between Texas and Mexico. One of those bridges is the5837Porto Verde Bridge in Maverick County, Texas. This past summer,5838the STB approved the environmental impact statement for the5839Porto Verde Bridge's corresponding railroad project. However, I5840have heard that Union Pacific has objected and put up various5841operational roadblocks to completing this project.5842    Ms. Schultz and Mr. Kloster, if confirmed, will you commit5843to working with me to ensure that the Green Eagle Railroad and5844the Porto Verde Bridge sponsors get a fair shot to finish their5845project?5846    Ms. Schultz. Yes, Senator.5847    The Chairman. Thank you.5848    Mr. Kloster. Yes.5849    The Chairman. Senator Moreno.58505851               STATEMENT OF HON. BERNIE MORENO,5852                     U.S. SENATOR FROM OHIO58535854    Senator Moreno. Thank you to the nominees for being here.5855Congratulations on being nominated by the President of the5856United States. I am sure for you and your families it is a5857great honor.5858    Mr. DeLeeuw, to start with you. Obviously, the NTSB is an5859investigative agency. You do not--you are not a regulator,5860correct?5861    Mr. DeLeeuw. Yes, Senator.5862    Senator Moreno. But you have been around the block, as they5863say, you have seen a lot in your career, like our Chairman5864said, imminently qualified. Kind of help us understand, help5865the public understand what the day is like for an air traffic5866controller? From your investigations where you see things went5867well, not commenting on a specific investigation, but just5868generally speaking, would you agree it is a very high-stress5869job?5870    Mr. DeLeeuw. Senator I appreciate that question. So I have5871been flying for 45 years in the national airspace system. I5872have flown all over the world, over many countries. I can say5873unequivocally that the air traffic controllers in this country5874are, by far, the best in the world. The air traffic controllers5875they have long hours, demanding days, I am aware of some of5876the--some of the impacts with the government shutdown. I am5877also aware of the struggles they have had in keeping5878controllers.5879    But I am fortunate to go--every year I participate in the--5880what they call the NATCA Communication for Safety and I am5881always amazed at the professionalism of the controllers. They5882have an award ceremony on the last night there, which is they5883refer to as the Archie Awards, and they give out--recognize the5884controllers who save lives.5885    So I would have to say that the--I am not an air traffic5886controller, but I have certainly worked with them. I consider5887them part of my brother and sisterhood, but they are--they are5888what keeps this national airspace system running.5889    Senator Moreno. And with a stressful job like that, we have5890limitations, right? They cannot work 20 hours a day, for5891example. They have to take breaks; is that accurate?5892    Mr. DeLeeuw. Senator, I am actually not familiar with their5893work rules.5894    Senator Moreno. But you would not want an air traffic5895controller that was fatigued, that was overly stressed? You5896want to make sure they are crisp and they are doing their job?5897That would be accurate just based on investigations you have5898been around?5899    Mr. DeLeeuw. Yes, Senator.5900    Senator Moreno. How many people do you know in your career5901that were either your co-workers that went a month and a half5902without getting a paycheck? Have you ever experienced that? In5903other words, have you ever--would you, like when you were--when5904you were just starting your young family, would you have gone a5905month and a half without a paycheck?5906    Mr. DeLeeuw. Well, I would hope I would not. If I had to do5907that, I sure would be mowing lawns then.5908    Senator Moreno. Right. And that would add enormous stress5909to you, your family, your spouse, your kids?5910    Mr. DeLeeuw. Yes, Senator.5911    Senator Moreno. I mean, to think about daycare, right? You5912cannot afford daycare. Daycare does not take credit. They5913expect to get paid.5914    Mr. DeLeeuw. Yes, sir.5915    Senator Moreno. And all that circulating through somebody's5916mind adds even more stress; is that fair?5917    Mr. DeLeeuw. Yes, Senator.5918    Senator Moreno. You need to be crisp when on. About a week5919ago, very unreported story, there was a helicopter--see if this5920story sounds familiar--there was a helicopter flying through5921the airspace at Cleveland Hopkins Airport. Fortunately, it was5922a nice day and that air--that helicopter flew almost directly5923in front of an inbound Southwest Airlines flight at 2,000 ft5924with almost no separation, vertical separation. They were5925literally on a collision path.5926    Now, when you are a pilot and you can see things out of the5927cockpit, it is a lot easier to be able to prevent those kinds5928of accidents; is that accurate, because you can see the5929obstacle in front of you?5930    Mr. DeLeeuw. Yes, Senator.5931    Senator Moreno. And you have flown into Cleveland Hopkins5932before in your career?5933    Mr. DeLeeuw. Many times, sir.5934    Senator Moreno. So you know we have--we are like Texas, we5935have beautiful weather 365 days a year. Now, imagine if that5936had been instead of last week, a nice sunny day, imagine it5937been a heavy snowstorm, zero visibility, snow showers, and you5938were totally dependent on instrumentation, what would have5939possibly happened in that situation?5940    Mr. DeLeeuw. Senator, thank you for the question. I am not5941100 percent familiar with the event you are referring to, and5942I--I remember reading or seeing something about that. Based on5943what you are telling me, I assume there is an investigation5944going on.5945    Senator Moreno. Of course.5946    Mr. DeLeeuw. And with that being the case, I would prefer5947not to get ahead of NTSB, and I would prefer to recuse and not5948discuss that yet.5949    Senator Moreno. And Mr. Chairman, the point I am trying to5950make is obvious. We have asked these air traffic controllers to5951go into a dark room in a very stressful job where there is all5952kinds of regulations about what they can and cannot do because5953we want to reduce that stress. And we are now day 37 into a5954Government shutdown in which they have not gotten paid and they5955are being used as political pawns. And quite frankly, I find5956that atrocious.5957    I find it atrocious that the Air Traffic Controllers Union5958itself, not exactly a right-wing organization, has begged5959Democrats to allow us to have a vote to open the Government,5960but Democrats have refused and they are playing with people's5961lives. They are allowing our skies to become more dangerous.5962    So for my Democrat colleagues, especially in this Committee5963that constantly talk about how important safety is, why don't5964we actually open the Government today--or actually let us have5965a vote. Let us have a vote to open the Government and get5966people paid.5967    Thank you, Mr. Chairman.5968    The Chairman. Senator Lujan.5969    Senator Lujan. Thank you, Mr. Chairman. I appreciate that.5970    I am going to ask some questions of Ms. Schultz. I am going5971to respond to Senator from Ohio. Ms. Schultz, I appreciate the5972question and response that you had to Senator Baldwin.5973    Mr. Kloster, the same question I have to you is, was the5974firing of Mr. Primus justified?5975    The Chairman. Please turn your microphone on.5976    Mr. Kloster. Oh. Sorry. I did not know him. I do not know5977the circumstances. I was not privy to the circumstances that he5978was removed by President Trump.5979    Senator Lujan. I have a follow up.5980    Mr. Kloster. It is a--it is in litigation, so I do not5981really have a comment on that.5982    Senator Lujan. I have a follow up here. The White House5983said that they fired Mr. Primus because he did not support the5984President's America First agenda, their words.5985    Mr. Kloster. Yes.5986    Senator Lujan. Ms. Schultz, yes or no, do you feel pressure5987to support the President's agenda?5988    Ms. Schultz. Thank you for the question, Senator. The5989answer to that is no. Again, I think of--in response to other5990questions, in my time on the Board with pending matters, I5991approach it from a pretty similar manner, which is to look at5992the--to look at the applicable law, including any statutes,5993regs, existing precedent. I also review the record extensively,5994consider the arguments on the merits, and you know, the policy5995principles that are set forth by Congress in the Rail5996Transportation Policy----5997    Senator Lujan. I appreciate--I am sorry that the Senator5998from Ohio has to leave after what he shared. I was going to5999share with him some statistics from DWI in Ohio and how many6000people die there every year. I was also going to respond to all6001that happened recently under President Trump with the nonsense6002that came from Elon Musk with termination after termination,6003threat after threat.6004    My House Republican colleagues have been home for I do not6005know 40, 50 days. I do not know what they are up to. Speaker6006Johnson, when he was asked about bringing them back specific to6007pay the controllers, Speaker Johnson said, quote, ``He would6008not bring the House back to pay controllers'', because he said6009it would be a waste of our time.6010    Look, I do not want to get in a back and forth of pointing6011fingers. I am tired of that. And I find I am falling guilty to6012it every day. It is time to fix this stuff. The reason there6013was not a shutdown under the previous administration with6014Democrats in the majority working with our Republican6015colleagues, because we worked together. Those CRs were amended.6016Democrats and Republicans got together to do the right thing6017for the American people. We need to do that again. And I am6018certainly hopeful that we will get there as well.6019    I am sorry that Senator Moreno does not want to see that6020there is a 26 percent increase in DWI deaths in Ohio. That one6021of the leading causes of fatalities in Ohio is people getting6022killed by people driving drunk. I hope that we will have a6023chance to have a conversation and that rather than just trying6024to throw a swing, you want to sit here and you are going to6025listen to the response as well.6026    I am just terribly sorry about that as well. But let me6027just get back here to close, and I appreciate the follow up6028here.6029    Mr. Kloster, the same question to you. Do you feel pressure6030to support the President's agenda?6031    Mr. Kloster. Well, I am not on the Board, so there has been6032no pressure, but if I was on the Board, if I was confirmed, I6033would take anyone's input, whether it was the President, or a6034member of this Committee, I would take their input. And then I6035would use that to make an independent, fair, unbiased decision.6036    Senator Lujan. You would take their input if it was in the6037record? Or you are going to take their input if they go to6038social media and say something?6039    Mr. Kloster. I am not on social media. I mean other than6040LinkedIn and that is----6041    Senator Lujan. Do you watch--do you watch television news?6042Do you watch----6043    Mr. Kloster. Oh. Totally. Yes.6044    Senator Lujan. So if the President says on broadcast news--6045--6046    Mr. Kloster. Yes.6047    Senator Lujan.--I want you all to do something and it is6048not in the record, how do you deal with that?6049    Mr. Kloster. That kind of stuff goes in one ear and out the6050other, for me.6051    Senator Lujan. It does not matter, correct?6052    Mr. Kloster. It is not going to matter.6053    Senator Lujan. It has to be in the record. Whatever6054evidence it is that you are going to use to make a decision has6055to be in the record that you are evaluating of whatever the6056case is; is that correct?6057    Mr. Kloster. I am not sure what you mean by ``on the6058record'', if someone called me up?6059    Senator Lujan. So help me understand, sir. I am from a6060small farm here. And is it you are going----6061    Mr. Kloster. Yes. And this is my first foray into this6062world.6063    Senator Lujan. Mr. Kloster, you have accepted a nomination.6064    Mr. Kloster. Yes.6065    Senator Lujan.--into a very serious job into an independent6066agency.6067    Mr. Kloster. Yes.6068    Senator Lujan. There are serious cases presented to you. A6069track going awry and going off a line. The case is presented to6070you to try to figure out what has happened; is that correct?6071    Mr. Kloster. Yes.6072    Senator Lujan. Is there a record that you review that is6073part of that case? Or what would you call it? What is the paper6074that gets put in front of you that you have to read and6075understand that all the evidence, all the investigations, what6076is that called? What do you call it? Because I want to use6077your----6078    Mr. Kloster. Yes. No, I understand what you mean by record6079now. Yes.6080    Senator Lujan. Would you call it a record?6081    Mr. Kloster. Yes. An application, or the evidence.6082    Senator Lujan. OK. So I am using your words--OK. If someone6083tells you to do something in the news, since you watch the6084news, you do not do social media, but you do--you watch the6085news.6086    Mr. Kloster. Yes.6087    Senator Lujan. And it is not in the record as we have just6088had a conversation about what the record is, do you just6089completely ignore it? Does it have no bearing in the outcome of6090the case?6091    Mr. Kloster. As I said, I would take all input, you know.6092    Senator Lujan. All right. Ms. Schultz, I am not even going6093to ask you the same question because I know you are going to6094say, no. It has to be in the record. That is how you have6095proven this.6096    So, Mr. Kloster, look, I am not a JD. I am not as smart as6097my colleagues here. I am a former public utility commissioner.6098I had to go to Reno to an ALJ school. You might want to go to6099the same school before you take this job so that you can6100understand what your responsibility is and how to evaluate a6101record and make a decision, man.6102    If any one of us goes to the news, or we speak from the6103mountain tops, or even in this hearing, and it is not in the6104case, and the record that you have before you, that you are6105making a decision, it does not matter, man.6106    I certainly hope that we just get to that case, and Mr.6107Chairman, maybe you and I can support some budget and funding6108to get some ALJ training for some of these folks and I would6109be--I would be proud to co-sponsor it with you.6110    Mr. Kloster. I appreciate that recommendation. And I also6111admit that, you know, if confirmed, there is going to be a bit6112of a learning curve for me in understanding how things are6113done. And I commit to getting up to speed as quick as I can.6114    Senator Lujan. There is a good school in Reno. I would be6115happy to get you information on it if you would like.6116    Mr. Kloster. Thank you.6117    The Chairman. Very good. Thank you to each of the nominees,6118Mr. DeLeeuw, Mr. Kloster, Ms. Schultz. My final question is6119required of all nominees.6120    If confirmed, do you pledge to work collaboratively with6121this Committee to provide thorough and timely responses to this6122Committee's requests, and to appear before the Committee when6123requested?6124    Mr. DeLeeuw. Yes, Senator.6125    Mr. Kloster. Yes, Senator.6126    Ms. Schultz. Yes, Senator.6127    The Chairman. Thank you. I have 31 letters of support from6128various organizations for the nominations of Mr. DeLeeuw, Mr.6129Kloster, and Ms. Schultz. I ask unanimous consent that these6130letters be inserted in the hearing record.6131    Without objection, so ordered.6132    [The information referred to follows:]61336134                                 American Chemistry Council6135                                                   November 6, 202561366137Hon. Ted Cruz,6138Chairman,6139Committee on Commerce, Science, and Transportation,6140U.S. Senate,6141Washington, DC.6142Hon. Maria Cantwell,6143Ranking Member,6144Committee on Commerce, Science, and Transportation,6145U.S. Senate,6146Washington, DC.61476148Dear Chairman Cruz and Ranking Member Cantwell:61496150    On behalf of the American Chemistry Council (ACC), I strongly6151endorse the nominations of Vice Chair Michelle Schultz to serve a6152second term and Richard Kloster to serve a first term on the U.S.6153Surface Transportation Board (STB). ACC urges the Committee to move6154expeditiously to review and favorably report the nominations for6155confirmation by the full Senate.6156    ACC represents more than 190 of America's leading chemical6157companies. Our members produce a wide variety of chemicals, polymers,6158and related products that make our lives and our world healthier,6159safer, more productive, and more sustainable. The business of chemistry6160supports over 25 percent of the U.S. Gross Domestic Product and6161directly touches nearly all manufactured goods. Our industry is one of6162the largest freight rail customers, shipping 2.1 million carloads6163annually. We rely on a strong, resilient, and efficient freight6164transportation network to support our domestic and international supply6165chains.6166    The STB plays a critical role in maintaining a healthy and6167competitive freight rail network while protecting the interests of rail6168customers and preventing undue concentration of market power. The Board6169faces critical challenges in modernizing its regulatory framework and6170reviewing the largest railroad merger ever proposed. Strong leadership6171is needed now more than ever to help ensure that the freight rail6172network delivers for U.S. manufacturers and serves the public interest.6173    Vice Chair Schultz understands STB's vital role and has provided6174dedicated service to all rail stakeholders during her first term. Mr.6175Kloster's deep expertise and broad experience with rail carriers,6176suppliers, and customers would be a welcome addition to the Board. ACC6177believes that, if confirmed, both nominees will help continue to move6178the country's freight rail policies forward.6179    Thank you for your attention to these important nominations.6180            Sincerely,6181                                                Chris Jahn,6182                                                 President and CEO,6183                                            American Chemistry Council.6184cc: Committee on Commerce, Science & Transportation6185The Honorable John Thune, Majority Leader, U.S. Senate6186The Honorable Chuck Schumer, Minority Leader, U.S. Senate6187                                 ______61886189                   National Coal Transportation Association6190                                      Sandy, Utah, November 3, 202561916192VIA EMAIL61936194Hon. John Thune,6195Senate Majority Leader,6196U.S. Senate,6197Washington, DC.61986199Hon. Ted Cruz,6200Chair,6201Senate Commerce, Science, and Transportation Committee,6202U.S. Senate,6203Washington, D.C. 2051062046205Hon. Todd Young,6206Chair,6207Surface Transportation, Freight, Pipelines and Safety Subcommittee,6208Senate Commerce, Science, and Transportation Committee,6209U.S. Senate,6210Washington, DC.6211Hon. Chuck Schumer,6212Senate Minority Leader,6213U.S. Senate,6214Washington, DC.62156216Hon. Maria Cantwell,6217Ranking Member,6218Senate Commerce, Science, and Transportation Committee,6219U.S. Senate,6220Washington, DC.62216222Hon. Gary Peters,6223Ranking Member,6224Surface Transportation, Freight, Pipelines and Safety Subcommittee,6225Senate Commerce, Science, and Transportation Committee,6226U.S. Senate,6227Washington, DC.62286229Dear Senators Thune, Schumer, Cruz, Cantwell, Young, and Peters:62306231    The National Coal Transportation Association (NCTA) supports the6232confirmation of supports the confirmation of Ms. Michelle A. Schultz6233(R) of Pennsylvania to serve as Members of the Surface Transportation6234Board (STB or Board).6235    NCTA is a nonprofit corporation comprised of electric utilities,6236coal producers, shippers of coal-related commodities, and entities that6237produce, repair, and manage all facets of railcar component parts and6238systems, as well as provide services for railcar operations. Its6239primary purpose is to promote the exchange of ideas, knowledge, and6240technology associated with the transportation and beneficial uses of6241coal. NCTA's members rely on a strong, reliable freight rail supply6242chain to ensure its customers receive their needed fuel.6243    Our country's ever-growing reliance on freight rail commands the6244Board to provide necessary and effective oversight, especially6245considering only four Class I railroads control 90 percent of our6246Nation's freight rail traffic. Freight rail is a vital component of our6247Nation's economy. Freight rail also enhances the growth of our economy6248and our global competitiveness.6249    FRCA welcomes the nomination of Member Schultz, the Board's current6250Vice Chairman, to serve a second term expiring November 30, 2030. Her6251continued leadership on the Board will help ensure continuity as the6252Board addresses longstanding proceedings such as Commodity Exemption6253and First-Mile/Last where the latter is expected to be incorporated in6254a more comprehensive data modernization initiative to include (1)6255eliminating unneeded data collections, (2) strengthening mission6256critical collections, (3) streamlining filing and automating processes,6257and (4) improving data visualization.6258    NCTA welcomes the continued leadership of Vice Chairman Schultz as6259the Board faces a potential merger between two Class I carriers--under6260new merger rules that have never been tested before--in an already6261consolidated market environment, with the continued use of Precision6262Scheduled Railroading.6263    FRCA views Vice Chair Schultz as an appropriate nominees to serve6264as Member of the STB and welcomes her swift confirmation.6265    Thank you for your continued leadership, and commitment in ensuring6266the continuity of a full complement of Members to the Board at this6267most critical time.6268            Sincerely,6269                                              John N. Ward,6270                                                Executive Director.6271                                 ______62726273                             Freight Rail Customer Alliance6274                                                   October 31, 202562756276VIA EMAIL62776278Hon. John Thune,6279Senate Majority Leader6280U.S. Senate6281Washington, DC62826283Hon. Ted Cruz,6284Chair,6285Senate Commerce, Science, and Transportation Committee,6286U.S. Senate,6287Washington, DC.62886289Hon. Todd Young,6290Chair,6291Surface Transportation, Freight, Pipelines and Safety Subcommittee,6292Senate Commerce, Science, and Transportation Committee,6293U.S. Senate,6294Washington, DC.6295Hon. Chuck Schumer,6296Senate Minority Leader,6297U.S. Senate,6298Washington, DC.62996300Hon. Maria Cantwell,6301Ranking Member,6302Senate Commerce, Science, and Transportation Committee,6303U.S. Senate,6304Washington, DC.63056306Hon. Gary Peters,6307Ranking Member,6308Surface Transportation, Freight, Pipelines and Safety Subcommittee,6309Senate Commerce, Science, and Transportation Committee,6310U.S. Senate,6311Washington, DC.63126313Dear Senators Thune, Schumer, Cruz, Cantwell, Young, and Peters:63146315    The Freight Rail Customer Alliance (FRCA)--an umbrella organization6316including trade associations representing more than 3,5006317manufacturing, agriculture chemical, and alternative fuels companies,6318electric utilities, and their customers--strongly supports the6319confirmation of Ms. Michelle A. Schultz (R) of Pennsylvania and Mr.6320Richard Kloster (R) of West Virginia to serve as Members of the Surface6321Transportation Board (STB or Board).6322    Our country's ever-growing reliance on freight rail commands the6323Board to provide necessary and effective oversight, especially6324considering only four Class I railroads control 90 percent of our6325Nation's freight rail traffic. Freight rail is a vital component of our6326Nation's economy. Farmers rely on rail both for fertilizer to grow6327their crops and to deliver those crops to market, and utilities and6328propane suppliers rely on rail to receive the fuel they need to serve6329their customers. Freight rail also enhances the growth of our economy6330and our global competitiveness.6331    FRCA welcomes the nomination of Member Schultz, the Board's current6332Vice Chairman, to serve a second term expiring November 30, 2030. Her6333continued leadership on the Board will help ensure continuity as the6334Board addresses longstanding proceedings such as Commodity Exemption6335and First-Mile/Last where the latter is expected to be incorporated in6336a more comprehensive data modernization initiative to include (1)6337eliminating unneeded data collections, (2) strengthening mission6338critical collections, (3) streamlining filing and automating processes,6339and (4) improving data visualization.6340    In addition, FRCA appreciates the nomination of Mr. Kloster to6341serve as Member of the STB for a term expiring December 31, 2028. With6342more than three decades' direct experience working with railroads, rail6343suppliers, and shippers, Mr. Kloster will provide not just varied rail6344industry expertise to the Board but also his unique business6345perspectives geared towards solving problems. His varied background6346will allow him to become familiar with the issues before the STB fairly6347quickly--matters that involve the most substantive issues of great6348importance to the Board, shippers, railroads, and the general public.6349They are technical, complex, and challenging, requiring resolution to6350reflect today's market conditions and freight rail demands.6351    FRCA welcomes the continued leadership of Vice Chairman Schultz and6352the service of Mr. Kloster as the Board faces a potential merger6353between two Class I carriers--under new merger rules that have never6354been tested before--in an already consolidated market environment, with6355the continued use of Precision Scheduled Railroading.6356    FRCA views Vice Chair Schultz and Mr. Kloster as appropriate6357nominees to serve as Members of the STB and welcomes their swift6358confirmation.6359    Thank you for your continued leadership and commitment in ensuring6360the continuity of a full complement of Members to the Board at this6361most critical time.6362            Sincerely,6363                                            Ann Warner LLC,6364                                             Spokesperson for FRCA.63656366cc: Members of the Senate Commerce, Science and Transportation6367Committee6368About FRCA6369    An umbrella membership organization, the Freight Rail Customer6370Alliance (FRCA) includes large trade associations representing more6371than 3,500 electric utility, agriculture, chemical, and alternative6372fuel companies and their consumers. Through a growing coalition of6373industries and associations, the mission of FRCA is to obtain changes6374in Federal law and policy that will provide all freight shippers with6375reliable rail service at competitive prices. www.railvoices.org6376                                 ______63776378                                  Allied Pilots Association6379                                   Fort Worth, TX, October 27, 202563806381Hon. Senator Ted Cruz, Chair,6382Hon. Senator Maria Cantwell, Ranking Member,6383U.S. Senate Committee on Commerce, Science, and Transportation,6384Washington, DC.63856386Dear Chair Cruz and Ranking Member Cantwell,63876388    On behalf of the 16,000 American Airlines pilots the Allied Pilots6389Association (APA) is honored to serve, I am writing to express APA's6390support for the nomination of Captain John DeLeeuw to serve on the6391National Transportation Safety Board (NTSB). Captain DeLeeuw brings an6392exceptional depth of experience and a decades-long commitment to6393aviation safety that make him superbly qualified for this critical6394role.6395    With a distinguished career in aviation and safety oversight,6396Captain DeLeeuw has demonstrated unwavering dedication to the6397principles of accident prevention, investigative integrity, and public6398service. His background includes experience as a military and6399commercial pilot, leadership in safety management systems, and direct6400involvement in accident investigations. These qualifications reflect6401his technical expertise and his ability to lead with clarity and6402compassion in high-stakes environments.6403    Captain DeLeeuw's insights into the operational realities of6404aviation, combined with his analytical approach to safety and risk6405management, will be a valuable complement to the NTSB's mission. His6406collaborative spirit and commitment to transparency further underscore6407his readiness to serve the American public in this capacity.6408    I respectfully urge the Committee to give full and favorable6409consideration to Captain DeLeeuw's nomination. His appointment would be6410an asset to the Board and to the continued advancement of6411transportation safety in the United States.6412    Thank you for your attention to this important matter.6413            Sincerely,6414                                  First Officer Nick Silva,6415                                                         President,6416                                             Allied Pilots Association.6417                                 ______64186419                                           GATX Corporation6420                                      Chicago, IL, November 3, 202564216422Hon. Ted Cruz, Chairman,6423Committee on Commerce, Science and Transportation,6424United States Senate,6425Washington, DC.64266427Dear Mr. Chairman64286429    On behalf of GATX Corporation, I want to express our strong support6430for the confirmation of Michelle Schultz to serve another term on the6431Surface Transportation Board (STB). Throughout her tenure, Member6432Schultz has demonstrated a deep understanding of the freight rail6433industry and a balanced commitment to ensuring a safe, efficient, and6434competitive transportation system that benefits shippers, carriers, and6435the broader community.6436    Ms. Schultz has played an essential role in improving transparency6437and collaboration between the STB and industry stakeholders. Her6438leadership in the Board's work on rail service performance data and6439dispute resolution procedures has been instrumental in advancing a more6440responsive and accountable regulatory environment. She has consistently6441emphasized pragmatic solutions grounded in careful analysis, reflecting6442a strong appreciation for safety, efficiency and operational realities.6443    Her combination of legal expertise, regulatory experience, and deep6444knowledge of rail transportation policy make her an asset to the Board.6445    I urge the Committee to advance her nomination.6446            Sincerely,6447                                         Paul F. Titterton,6448                               EVP & President, Rail North America.6449                                 ______64506451                                         The Boeing Company6452                                      Seattle, WA, November 5, 202564536454Hon. Ted Cruz,6455United States Senator,6456Washington, DC.64576458Dear Chairman Cruz:64596460    On behalf of The Boeing Company, I write to express our support for6461John DeLeeuw's nomination to serve as a Member of the National6462Transportation Safety Board (NTSB). Mr. DeLeeuw's extensive expertise,6463his commitment and leadership in the field of aviation safety, and his6464willingness to serve our country in this role make him well-qualified6465to serve in this vital position.6466    Mr. DeLeeuw is widely respected by his government and industry6467peers for his thoughtful approach, his analytical rigor, and his6468ability to build consensus in his efforts to build a safer commercial6469aviation system. Many Boeing pilots and engineers have known him and6470worked with him throughout his career, and his reputation in the field6471of aviation safety is exceptional.6472    Mr. DeLeeuw would bring a wealth of expertise and knowledge to the6473NTSB: more than three decades of experience as a military and6474commercial pilot, with deeply rooted experience in aviation safety and6475risk management. His 19,000 flight hours, on a variety of aircraft6476including the C-130, the 727, MD-80, and the 787, give him a practical6477understanding of human factors and the operational realities that6478influence transportation safety outcomes. His work as American6479Airlines' Managing Director of Safety and Efficiency demonstrate his6480passion to improve safety for all who fly and keep us safe: passengers,6481flight crews, cabin crews, maintenance, and ATC. His personal6482commitment to advance the industry as a whole is evident in his6483involvement in organizations such as the U.S. Aviation Safety Team6484(USAST) and the International Society of Air Safety Investigators6485(ISASI).6486    Given his extensive experience, Mr. DeLeeuw is well-qualified to6487help advance the NTSB's mission of improving the safety of6488transportation systems across all modes. Thank you for your6489consideration of this important nomination.6490            Sincerely,6491                                         Donald W. Ruhmann,6492                                    Chief Aerospace Safety Officer,6493                                             Senior Vice President,6494                                               Global Aerospace Safety.6495                                 ______64966497                      Southwest Airlines Pilots Association6498                                    Irving, Texas, October 29, 202564996500Hon. Senator Ted Cruz, Chair,6501Hon. Senator Maria Cantwell, Ranking Member,6502U.S. Senate Committee on Commerce, Science and Transportation,6503Washington, DC.65046505Dear Chair Cruz and Ranking Member Cantwell,65066507    On behalf of the more than 11,000 Southwest Airlines pilots6508represented by the Southwest Airlines Pilots Association (SWAPA), I am6509writing to offer SWAPA's support for Captain John DeLeeuw's nomination6510to the National Transportation Safety Board (NTSB).6511    Captain DeLeeuw has extensive experience in the airline industry6512and has dedicated his life to aviation safety. His credentials and6513credibility make him exceptionally equipped for this vital safety role.6514I believe he is uniquely qualified as his work as an investigator and6515Managing Director of Safety for American Airlines and as the National6516Safety Chair for the Allied Pilots Association have allowed him to see6517first-hand the impact that the NTSB has on the safety and efficacy of6518the airline industry.6519    A veteran military and commercial pilot, he has led safety6520management initiatives and participated directly in accident6521investigations demonstrating both technical expertise and sound6522judgment under pressure. His practical understanding of aviation6523operations, analytical approach to risk management, and collaborative6524leadership will greatly benefit the NTSB's mission.6525    I respectfully ask that the Committee favorably consider Captain6526DeLeeuw's nomination. There are very few in the aviation industry who6527have the skillset, support, and credentials that John possesses. His6528service would greatly strengthen the Board and further the advancement6529of transportation safety across this great nation.6530            Sincerely,6531                                        Captain Jody Reven,6532                                                         President,6533                                 Southwest Airlines Pilots Association.6534                                 ______65356536                                       Airlines for America6537                                                   October 28, 202565386539Senator Ted Cruz,6540Chairman,6541Senate Commerce, Science, and Transportation Committee,6542Washington, DC.6543Senator Maria Cantwell,6544Ranking Member,6545Senate Commerce, Science, and Transportation Committee6546Washington, DC.65476548Dear Chairman Cruz and Ranking Member Cantwell:65496550    On behalf of the members of Airlines for America (A4A), I write in6551support of Captain John DeLeeuw's nomination to be a Member of the6552National Transportation Safety Board (NTSB).6553    The NTSB is a critical element of our Nation's aviation system and6554plays a key role in investigating accidents and making critical6555recommendations to enhance aviation safety. Members of the NTSB must6556have the experience and judgment to guide this important work, and6557Captain John DeLeeuw has these qualifications.6558    Captain DeLeeuw's decades of experience in the cockpit of both6559commercial and military aircraft provide him the technical expertise to6560support the ongoing work of the NTSB. Additionally, his current role as6561the Managing Director of Safety and Efficiency at American Airlines6562give him unique knowledge into the safety managements systems in the6563real world.6564    Airlines work tirelessly to constantly improve their robust safety6565management systems, and safety is always the priority for each and6566every flight we operate. The NTSB would greatly benefit from Captain6567DeLeeuw's expertise, and he will make important contributions to6568enhance aviation's strong safety culture.6569    A4A supports Captain DeLeeuw's nomination and urges his swift6570confirmation.6571            Sincerely,6572                                     Christopher T. Sununu,6573                                                 President and CEO,6574                                                  Airlines For America.6575                                 ______65766577                                          American Airlines6578                                Fort Worth, Texas, October 28, 202565796580Senator Ted Cruz,6581Chairman,6582U.S. Senate Committee on Commerce, Science, and Transportation,6583Washington, DC6584Senator Maria Cantwell,6585Ranking Member,6586U.S. Senate Committee on Commerce, Science, and Transportation,6587Washington, DC.65886589Dear Chairman Cruz and Ranking Member Cantwell:65906591    On behalf of American Airlines and its 130.000 team members. I6592write in support of Captain John DeLeeuw's nomination to be a Member of6593the National Transportation Safety Board (NTSB).6594    The United States aviation system is the safest in the world and6595commercial aviation has long been the safest mode of transportation--6596two achievements made possible by the entire aviation ecosystem and6597importantly, the critical work and advocacy of the NTSB. The Board's6598role as chief investigator in aviation, highway, marine, rail, pipeline6599and hazardous materials transportation accidents requires impartial6600review, in-depth industry experience and an unwavering commitment to6601the safety of the traveling public and the United States.6602    Captain DeLeeuw has long been a champion of safety--in the aviation6603industry and for our Nation. As a United States Air Force pilot, he6604dedicated more than seven years while on active duty in defense of the6605American people. That custodial duty followed Captain DeLeeuw to6606American Airlines where he has not only maintained the safety of the6607skies while on the flight deck, but has led our airline and our global6608industry in pursuit of continuous improvement. Captain DeLeeuw's6609experience in routine airline operations and response to large-scale6610industry safety risks--including his industry-leading work following6611the tragic Boeing 737 MAX accidents--are critical attributes to advance6612the NTSB's mission of preventing future fatalities and serious In1unes.6613    American's foundation--our north star--is safety. It is bolstered6614by a robust safety management system and a constant pursuit of6615protecting our team, customers and equipment. Captain DeLeeuw has6616played an invaluable role in further strengthening American's safety6617culture--a culture that is, ultimately, industry-agnostic. I am6618confident Captain DeLeeuw's safety leadership and experience will6619support the NTSB's multi-modal safety work.6620    American Airlines is proud to support Captain DeLeeuw's nomination6621and urges his swift confirmation.6622            Sincerely.6623                                             David Seymour,6624                                           Chief Operating Officer,6625                                                     American Airlines.6626                                 ______66276628      American Short Line and Regional Railroad Association6629                                   Washington, DC, November 3, 202566306631Senator Ted Cruz, Chairman,6632Committee on Commerce, Science, and Transportation,6633Washington, DC.66346635Dear Chairman Cruz;66366637    The American Short Line and Regional Railroad Association (ASLRRA)6638represents the Nation's 600 short line and regional railroads.6639    ASLRRA staff and our members regularly work collaboratively with6640the National Transportation Safety Board (NTSB) towards the shared goal6641of continuously improving safety across the rail network, benefitting6642employees, tens of thousands of shippers across the United States who6643depend on rail to be competitive, the communities where short lines6644serve, and the U.S. economy.6645    The ASLRRA supports the nomination of John DeLeeuw as an NTSB Board6646Member. His decades-long career of demonstrating attention to safety6647and leadership in elevating safety above competing priorities make him6648an ideal board member.6649    He understands what it takes to operate in both commercial and6650military combat environments, keeping safety at the forefront. His6651experience leading safety investigations and coordinated response at6652American Airlines includes working as the Party Coordinator for6653American Airlines when working with the NTSB on investigations. This6654deep experience in establishing practices that support safety culture6655and safety performance and the procedures and protocols of managing an6656investigation will allow for Captain DeLeeuw to make an immediate6657impact at the NSTB.6658    We appreciate Mr. DeLeeuw's consistent and active engagement with6659the aviation industry. His experience with the Aviation Safety Action6660Program, which has similarities to the Federal Railroad6661Administration's Confidential Close Call Reporting (C 3 RS) program,6662will help him to understand short line railroad safety concerns and6663opportunities.6664            Sincerely,6665                                               Chuck Baker,6666                                                         President,6667                                                                ASLRRA.6668                                 ______66696670                                   Flight Safety Foundation6671                                      Alexandria, VA, Oct. 30, 20256672Hon, Ted Cruz,6673Chairman, Committee on Commerce, Science, and Transportation,6674United States Senate,6675Washington, DC.66766677Hon. Maria Cantwell,6678Ranking Member, Committee on Commerce, Science, and Transportation,6679United States Senate,6680Washington, DC.66816682Re: Letter of Support for the Nomination of Capt. John DeLeeuw to the6683        National Transportation Safety Board66846685Dear Chairman Cruz, Ranking Member Cantwell, and Members of the6686        Committee:66876688    On behalf of Flight Safety Foundation, I am pleased to express6689strong support for the nomination of Capt. John DeLeeuw to serve as a6690Member of the National Transportation Safety Board (NTSB).6691    I have known and worked with Capt. DeLeeuw for the past seven years6692through numerous aviation safety initiatives. In his role as managing6693director of Safety & Efficiency and as a Boeing 787 captain at American6694Airlines, John leads a large, multidisciplinary team responsible for6695core safety management system (SMS) assurance programs--FOQA, ASAP,6696LOSA, fatigue risk management, and learning/improvement--integrated to6697deliver measurable safety performance. His career reflects a consistent6698pattern of data-driven analysis, just-culture advocacy, and practical6699implementation of solutions across complex airline operations.6700    Capt. DeLeeuw has actively engaged with Flight Safety Foundation's6701advisory and technical work over many years. For example, he6702contributed to the Foundation's In-Time Aviation Safety Management6703System (IASMS) research roadmap efforts and has shared best practices6704with the aviation community, including as a speaker at our6705International Aviation Safety Summit (IASS). In every setting, he has6706demonstrated technical depth, operational judgment, and the ability to6707build trust among labor, management, regulators, and manufacturers--6708qualities essential to the NTSB's fact-finding mission.6709    Importantly, John brings direct, relevant experience with major6710investigations and safety communications. He has served as American6711Airlines' party coordinator in NTSB investigations and understands both6712the rigor of the Board's process and the discipline required to6713separate advocacy from objective analysis. Combined with prior service6714as a U.S. Air Force C-130 evaluator and instructor pilot, his6715background equips him to approach complex investigations with6716independence, technical competence, and humility.6717    From my firsthand interactions, John is principled, transparent,6718and solutions oriented. He listens carefully, tests assumptions with6719data, and helps organizations translate lessons learned into sustained6720safety improvement. I am confident he will be a thoughtful and6721effective Member of the NTSB and a constructive colleague to the Board6722and staff.6723    For these reasons, I respectfully urge the Committee to support his6724nomination favorably.6725            Regards,6726                                            Hassan Shahidi,6727                                                 President and CEO.6728                                 ______67296730                                  Allied Pilots Association6731                                   Fort Worth, TX, October 27, 202567326733Hon. Senator Ted Cruz, Chair,6734Hon. Senator Maria Cantwell, Ranking Member,6735U.S. Senate Committee on Commerce, Science, and Transportation,6736Washington, DC.67376738Dear Chair Cruz and Ranking Member Cantwell,67396740    On behalf of the 16,000 American Airlines pilots the Allied Pilots6741Association (APA) is honored to serve, I am writing to express APA's6742support for the nomination of Captain John DeLeeuw to serve on the6743National Transportation Safety Board (NTSB). Captain DeLeeuw brings an6744exceptional depth of experience and a decades-long commitment to6745aviation safety that make him superbly qualified for this critical6746role.6747    With a distinguished career in aviation and safety oversight,6748Captain DeLeeuw has demonstrated unwavering dedication to the6749principles of accident prevention, investigative integrity, and public6750service. His background includes experience as a military and6751commercial pilot, leadership in safety management systems, and direct6752involvement in accident investigations. These qualifications reflect6753his technical expertise and his ability to lead with clarity and6754compassion in high-stakes environments.6755    Captain DeLeeuw's insights into the operational realities of6756aviation, combined with his analytical approach to safety and risk6757management, will be a valuable complement to the NTSB's mission. His6758collaborative spirit and commitment to transparency further underscore6759his readiness to serve the American public in this capacity.6760    I respectfully urge the Committee to give full and favorable6761consideration to Captain DeLeeuw's nomination. His appointment would be6762an asset to the Board and to the continued advancement of6763transportation safety in the United States.6764    Thank you for your attention to this important matter.6765            Sincerely,6766                                  First Officer Nick Silva,6767                                                         President,6768                                             Allied Pilots Association.6769                                 ______67706771                               Regional Airline Association6772                                   Washington, DC, October 27, 202567736774Senator Ted Cruz,6775Chairman,6776Senate Commerce, Science, and Transportation Committee,6777Washington, DC.6778Senator Maria Cantwell,6779Ranking Member,6780Senate Commerce, Science, and Transportation Committee,6781Washington, DC.67826783Dear Chairman Cruz and Ranking Member Cantwell:67846785    On behalf of the members of the Regional Airline Association (RAA),6786I write in support of Captain John DeLeeuw's nomination to be a Member6787of the National Transportation Safety Board (NTSB).6788    The NTSB plays a vital role in maintaining the high standard of6789safety found in our Nation's aviation system. The work they do is key6790to enhancing aviation safety and it is essential that the Board Members6791have industry knowledge and expertise to ensure that appropriate safety6792recommendations are made to improve our national airspace. Captain6793DeLeeuw's decades of experience on the flight deck of both commercial6794and military aircraft provide him with the technical expertise to6795enhance the ongoing work of the NTSB.6796    Captain DeLeeuw has dedicated the majority of his career to6797improving aviation safety and increasing the adoption of a positive6798safety culture in aviation. His current role as the Managing Director6799of Safety and Efficiency at American Airlines provides him a unique6800insight into the safety management systems of the aviation industry and6801how all the operations of an airline, and the broader aerospace6802community, contribute to the safety of the National Airspace System.6803    Regional carriers are proud of our robust safety management systems6804and safety is always the priority for each and every &flight we6805operate. Captain DeLeeuw would provide first-hand knowledge of our6806industry's strong safety culture and be an asset to the multi-modal6807safety work of the Board.6808    RAA is proud to support Captain DeLeeuw's nomination and urge his6809swift confirmation.6810            Sincerely,6811                                       Faye Malarkey Black,6812                                                    President & CEO6813                                          Regional Airline Association.6814                                 ______68156816                                   Amsted Digital Solutions6817                         West Chester, PA, Monday, January 27, 202568186819Mr. Sergio Gor,6820Assistance to the President,6821Office of Presidential Personnel,6822The White House.68236824Re: Recommendation Letter--Mr. Richard J. Kloster68256826    Mr. Gor,68276828    I am writing to wholeheartedly recommend Mr. Richard J. Kloster for6829a board seat position on the Surface Transportation Board. Having had6830the privilege of working with Richard in various capacities throughout6831my 31 years in the freight railroad industry, I can confidently attest6832to his exceptional qualifications, deep industry knowledge, and6833unwavering commitment to the betterment of rail transportation.6834    Richard brings a wealth of professional experience that spans6835multiple facets of the freight rail sector. Early in his career, he6836gained hands-on insight into the operational challenges that rail6837operators face daily, providing him with a grounded understanding of6838the industry's complexities. His tenure at GE Railcar Leasing, one of6839the leading freight railcar leasing companies of its time, expanded his6840expertise and honed his ability to bridge the gap between rail network6841operations and the needs of railcar asset users. Over the past several6842years, Richard has become a recognized leader whose insights and6843research are sought after by stakeholders across the rail industry's6844ecosystem. His ability to assess strategic initiatives and offer6845actionable recommendations has been instrumental to numerous6846organizations navigating the evolving transportation landscape. On a6847personal level, Richard exemplifies humility, intellectual curiosity,6848and a genuine desire to help others succeed. His collaborative approach6849and forward-thinking perspective have fostered partnerships across the6850industry, uniting diverse stakeholders toward shared goals. He views6851the rail industry as a collective endeavor, emphasizing cooperation and6852innovation to advance its mission.6853    Given Richard's extensive experience, strategic mindset, and6854balanced perspective, I am confident he would be an invaluable asset to6855the Surface Transportation Board. His ability to approach regulatory6856challenges with impartiality, coupled with his unwavering commitment to6857ensuring the growth, safety, and efficiency of the freight rail sector,6858makes him uniquely qualified for this role.6859    Thank you for considering my recommendation. Please feel free to6860contact me at 214.707.3107 or bmyers@amstedrail.com if you require6861further information or wish to discuss Richard's candidacy in greater6862detail.6863            Sincerely,6864                                             Brad A. Myers,6865                                     EVP & Chief Operating Officer,6866                 Amsted Digital Solutions Inc., an Amsted Rail company.6867                                 ______68686869                                         Southwest Airlines6870                                       Dallas, TX, November 3, 202568716872Hon. Ted Cruz,6873Chair,6874Committee on Commerce, Science, and Transportation,6875United States Senate,6876Washington, DC.6877Hon. Maria Cantwell,6878Ranking Member,6879Committee on Commerce, Science, and Transportation,6880United States Senate,6881Washington, DC.68826883Dear Chairman Cruz and Ranking Member Cantwell,68846885    On behalf of Southwest Airlines, I am glad to express support for6886the nomination of John DeLeeuw to serve on the National Transportation6887Safety Board (NTSB).6888    As a leader in aviation safety with a history of service to the6889country, Mr. DeLeeuw is prepared to fill this critical role and help6890ensure that aviation remains the safest mode of transportation. Mr.6891DeLeeuw's strong record includes years of leadership and service as a6892pilot in the United States Air Force followed by decades as a Captain6893at American Airlines, including time as the Managing Director for6894Safety. John is a strong safety advocate who works openly and6895collaboratively with all stakeholders to continuously improve Safety6896across our industry.6897    We are glad to join NTSB Chair Jennifer Homendy and other aviation6898stakeholders in expressing our view that Mr. DeLeeuw will be an6899excellent addition to the NTSB, and we encourage the Senate to quickly6900to fill this important position.6901            Respectfully,6902                                           Capt. Dave Hunt.6903                                 ______69046905                   Livonia, Avon & Lakeville Railroad Corp.6906                                    Lakeville, NY, October 23, 202569076908To whom it may concern,69096910    I am writing in support of the nomination of Richard (Dick) Kloster6911to become a member of the Surface Transportation Board. Over the past691230years Dick has established himself as a leader and expert in the6913Railroad Industry and has served in high-level corporate positions and6914on various transportation related boards and trade associations.6915    Dick brings a wide range of experience that will be a great asset6916to the STB. Starting out as railroad field employee, Dick has literally6917worked his way through all facets of the industry and has acquired a6918unique knowledge base that is extremely rare in the industry. Dick6919brings expertise in railroad operations, railcarfleet management,6920equipment leasing, and strategic planning. His strengths in market6921research, financial planning, and supply chain management will be very6922useful in addressing the issues that are presented to the Board.6923    With the range of issues currently before the Board--and the6924likelihood of additional filings ahead-it's clear that experience will6925be essential to navigating what's next. Dick's strong background,6926respected industry reputation, and genuine passion for the railroad6927sector make him exceptionally well-suited to contribute as an effective6928and valued Board member.6929    I've known Dick personally for close to 20 years. I've leaned on6930him the entire time for help and advice. His vast knowledge and huge6931network of contacts have been invaluable to me.6932    Thank you for your time and consideration. Please don't hesitate to6933reach out if you have any additional questions or need further6934information.6935            Sincerely,6936                                               Bob Babcock,6937                                                     President/CEO,6938                                   Livonia, Avon & Lakeville Railroads.6939                                 ______69406941                                  Highroad Consulting, Ltd.6942                                Highland, Indiana, October 28, 202569436944Hon. Ted Cruz,6945Chair,6946Senate Commerce, Science and Transportation Committee6947U.S. Senate6948Washington, DC.69496950ATTN:6951Sean_Brebbia@commerce.senate.gov6952Chief Counsel for Oversight and Investigations6953Ryan_Cannon@commerce.senate.gov6954Coalitions and Member Services Advisor6955Hon. Maria Cantwell,6956Ranking Member,6957Senate Commerce, Science and Transportation Committee6958U.S. Senate6959Washington, D.C. 2051O69606961ATTN:6962Michael_Davisson@commerce.senate.gov6963Professional Staff Member69646965Dear Chairman Cruz and Ranking Member Cantwell:69666967    I am writing to endorse Richard Kloster's appointment to the U.S.6968Surface Transportation Board. I have personally known Mr. Kloster for6969more than thirty years, and can attest to his academic background, his6970character, and the potential contribution he will make at the Board.6971    Richard worked for me in an entry level marketing position at6972Chicago & North Western. He later resigned to return to the University6973of Alabama to pursue a Master's degree. He subsequently returned to6974North Western as a Market Manager in a different business unit. Richard6975has acquired impressive experience and knowledge since leaving the6976railroad; he gained new insight during his term with GE Railcar, which6977seemed to propel him forward, earning him recognition as the Number One6978industry expert in Rail car rules, policies, utilization, and6979acquisition of equipment.6980    Knowing Richard, I believe it likely that he is not done yet,6981because he has the passion for problem solving, always wanting to know6982more. I have always known Richard to use a pragmatic approach when6983making business decisions, and I submit he will make a positive6984contribution when working with STB Chairman Fuchs and the other Board6985members.6986    Thank you for considering this endorsement of Richard Kloster, and6987please feel free to contact me if you require additional information.6988            Sincerely,6989                                         Sandra J. Dearden,6990                                                         President.6991                                 ______69926993                                   The Greenbrier Companies6994                              Lake Oswego, Oregon, October 30, 202569956996Hon. Ted Cruz,6997Chairman,6998U.S. Senate Committee on Commerce, Science, and Transportation,6999Washington, DC.7000Hon. Maria Cantwell,7001Ranking Member,7002U.S. Senate Committee on Commerce, Science, and Transportation,7003Washington, DC.70047005Re: Nomination of Richard J. Kloster to the Surface Transportation7006            Board70077008Dear Chairman Cruz and Ranking Member Cantwell:70097010    I am pleased to recommend Richard (Dick) Kloster for a position on7011the Surface Transportation Board. With over 20 years of experience in7012the rail industry, Dick has built a strong reputation as a7013knowledgeable consultant, especially in his work with shippers, supply7014chain organizations, and shortline railroads. His extensive background7015uniquely equips him to offer valuable insights and solutions to the7016Board.7017    Throughout his career, Dick has shown a steadfast commitment to7018improving the efficiency and effectiveness of rail transportation. As7019an industry consultant, he has worked directly with various7020stakeholders, including railroads, shippers, and supply chain7021companies. In doing so, he has successfully navigated complex7022challenges to achieve mutually beneficial outcomes. This hands-on7023experience has provided him with a thorough understanding of the7024dynamics within the rail industry and the factors that influence its7025operations.7026    His active involvement in key industry associations, such as the7027National Industrial Transportation League (NITL) and the Railway Supply7028Institute (RSI), highlights his dedication to the field. His leadership7029within these organizations demonstrates his ability to collaborate with7030a diverse group of professionals, reflecting his commitment to7031fostering dialogue and cooperation throughout the industry.7032    Dick's expertise in supply chain management and his deep7033understanding of the regulatory environment makes him an ideal7034candidate for the Surface Transportation Board. He possesses a unique7035ability to balance the needs of various stakeholders while advocating7036for policies that promote innovation and sustainability within the rail7037industry. His analytical skills and strategic mindset will be7038invaluable as the Board addresses the ongoing challenges and7039opportunities facing the transportation sector.7040    Dick is an exceptional candidate for the Surface Transportation7041Board. His appointment would greatly benefit the Board and7042significantly contribute to the ongoing advancement of the rail7043industry. I wholeheartedly endorse his candidacy and am confident that7044he will bring the same level of dedication and expertise to this role7045as he has demonstrated throughout his career.7046    Thank you for your consideration. Should you require any further7047information or wish to discuss his qualifications in more detail,7048please feel free to contact me at your convenience.7049            Sincerely7050                                            Jack Isselmann,7051        Senior Vice President, External Affairs and Communications,7052                                                     Past Chairman,7053                                              Railway Supply Institute.7054                                 ______70557056                           Packaging Corporation of America7057                                  Lake Forest, IL, February 2, 202570587059Sergio Gor,7060Assistant to the President, Office of Presidential Personnel,7061The White House,7062Washington, DC.70637064Dear Mr. Gor:70657066    I am writing you today in regard to the open seat on the Surface7067Transportation Board (STB). I am Vice President of Transportation for7068Packaging Corporation of America (PCA), the Country's third largest7069producer of corrugated container products, and third largest producer7070of office and printing papers. PCA operate 8 paper mills and 95 box7071plants and we have business relationships with all of the Class I7072railroads and many of the short line railroads that operate in the7073United States.7074    In addition to my responsibility with PCA, I currently serve as7075Chair on the STB's RSTAC Committee, Chair of the National Industrial7076Transportation League, and a Board Member of the National Freight7077Transportation Association. In the case of this letter, however, I am7078weighing in solely in my capacity at Packaging Corporation of America.7079    I understand Mr. Richard (Dick) Kloster is on the short list of7080candidates to fill the STB seat. I want you to know that he has my full7081support. Over his decades of surface transportation experience, Dick7082has accumulated a blend of rail (Class I, Regional and Short lines),7083shipper and supply chain consultancy experiences. He has earned a place7084in my professional circle as someone I can bounce ideas off and know7085I'm getting a thoughtful reply based on his vast history and7086experience. He and I have had many deep conversations about supply7087chain management, and I consider him to be an expert in supply chains7088that rely on rail. I am convinced Dick will serve the STB and the7089Nation's Shippers/Supply Chains with the same distinction and integrity7090that I have experienced with him.7091    Please feel free to reach out to me should you require more7092feedback. Thank you for your service to the Nation.7093            Sincerely,7094                                             Ross Corthell,7095                                    Vice President--Transportation.7096                                 ______70977098                                        Modern Rail Capital7099                                      Chicago, IL, October 29, 202571007101Hon. Ted Cruz, Chairman,7102Senate Committee on Commerce, Science, and Transportation,7103Washington, DC.71047105Dear Chairman Cruz and Members of Committee,71067107    I am writing to express my support for the nomination of Richard7108Kloster to serve as a Member of the Surface Transportation Board (STB).7109Dick's extensive experience in the freight rail industry, his deep7110understanding of transportation economics, and his commitment to7111balanced, data-driven policy makes him well-qualified for this critical7112role.7113    Dick brings over three decades of experience in the rail sector,7114including his current leadership at Integrity Rail Partners, his prior7115service on the board of the Railway Supply Institute, railcar leasing7116experience at GE Rail, and railroad experience with Chicago7117Northwestern Railroad. His work has consistently demonstrated a deep7118knowledge of the complex interplay between rail carriers, shippers,7119equipment owners, and regulators. He is well respected for his7120analytical rigor, collaborative approach, and focus on improving the7121efficiency and fairness of the U.S. freight rail system.7122    At a time when the STB faces critical decisions, including7123oversight of major rail mergers, service performance, and7124infrastructure investment, Dick's appointment would ensure the Board7125benefits from a seasoned voice with both strategic insight and7126operational expertise. His nomination comes at a pivotal moment, and I7127am confident he will serve with distinction and integrity.7128    I urge the Committee to advance Dick's nomination swiftly and7129favorably. His leadership will be an asset not only to the Board but to7130the broader transportation community and the national economy it7131supports.7132    Thank you for your consideration.7133            Sincerely,7134                                                Kevin Cook,7135                                                         President,7136                                                   Modern Rail Capital.7137    Cc: Sean_Brebbia@commerce.senate.gov7138       Ryan_Cannon@commerce.senate.gov7139       Janie.Sheng@stb.gov7140                                 ______71417142              Private Railcar Food and Beverage Association7143                                                   October 31, 20257144VIA EMAIL71457146Hon. John Thune,7147Senate Majority Leader,7148U.S. Senate,7149Washington, DC.71507151Hon. Ted Cruz,7152Chair,7153Senate Commerce, Science, and Transportation Committee,7154U.S. Senate,7155Washington, DC.71567157Hon. Todd Young,7158Chair,7159Surface Transportation, Freight, Pipelines and Safety Subcommittee,7160U.S. Senate,7161Senate Commerce, Science, and Transportation Committee,7162Washington, D.C.71637164Hon. Chuck Schumer,7165Senate Minority Leader,7166U.S. Senate,7167Washington, DC.71687169Hon. Maria Cantwell,7170Ranking Member,7171Senate Commerce, Science, and Transportation Committee,7172U.S. Senate,7173Washington, DC.71747175Hon. Gary Peters,7176Ranking Member,7177Surface Transportation, Freight, Pipelines and Safety Subcommittee,7178U.S. Senate,7179Senate Commerce, Science, and Transportation Committee,7180Washington, DC.71817182Dear Senators Thune, Schumer, Cruz, Cantwell, Young, and Peters:71837184    The Private Railcar Food and Beverage Association (PRFBA) thanks7185you for considering the nominations of Vice Chair Michelle A. Schultz7186(R) of Pennsylvania and Mr. Richard Kloster (R) of West Virginia to7187serve as Members of the Surface Transportation Board (STB or Board).7188    PRFBA is comprised of numerous global food and beverage companies7189headquartered in North America who generated an estimated $150 billion7190in revenues in 2024. All are major rail shippers that 1) own or lease7191their own railcars and 2) rely on the railroads to produce and7192distribute their food and beverage products that are vital to the7193health and welfare of our Nation and essential to feeding its citizens.7194Without adequate rail service, their food and beverages will not be on7195American store shelves.7196    Our country's ever-growing reliance on freight rail commands the7197Board to provide necessary and effective oversight, especially7198considering only four Class I railroads control 90 percent of our7199Nation's freight rail traffic. Freight rail is a vital component of our7200Nation's economy--it enhances the growth of our economy and our global7201competitiveness.7202    PRFBA welcomes the nomination of Member Schultz, the Board's7203current Vice Chairman, to serve a second term expiring November 30,72042030. Her continued leadership on the Board will help ensure continuity7205as the Board addresses longstanding proceedings such as Commodity7206Exemption and First-Mile/Last where the latter is expected to be7207incorporated in a more comprehensive data modernization initiative to7208include (1) eliminating unneeded data collections, (2) strengthening7209mission critical collections, (3) streamlining filing and automating7210processes, and (4) improving data visualization.7211    PRFBA appreciates the nomination of Mr. Kloster to serve as Member7212of the STB for a term expiring December 31, 2028. Mr. Kloster will7213provide his more than three decades' direct experience working with7214railroads, rail suppliers, and shippers. He will offer not just diverse7215rail industry expertise to the Board but also his unique business7216perspectives geared towards solving problems. Also, Mr. Kloster's7217varied background will allow him to become familiar with the issues7218before the STB fairly quickly--matters that involve the most7219substantive issues of great importance to the Board, shippers,7220railroads, and the general public. They are technical, complex, and7221challenging, requiring resolution to reflect today's market conditions7222and freight rail demands.7223    PRFBA looks forward to the continued leadership of Vice Chair7224Schultz and the service of Mr. Kloster as the Board faces a potential7225merger between two Class I carriers--under new merger rules that have7226never been tested before--in an already consolidated market7227environment.7228    PRFBA views Vice Chair Schultz and Mr. Kloster as appropriate7229nominees to serve as Members of the STB and welcomes their swift7230confirmation.7231    Thank you for your consideration, and continued leadership and7232commitment in ensuring the continuity of a full complement of Members7233to the Board at this most critical time.7234            Sincerely yours,7235                                           Herman Haksteen,7236                                                         President,7237                         Private Railcar Food and Beverage Association.72387239cc: Members of the Senate Commerce, Science, and Transportation7240Committee7241                                 ______72427243                  National Industrial Transportation League7244                                      Dunkirk, MD, October 31, 202572457246VIA EMAIL72477248Hon. John Thune,7249Senate Majority Leader,7250U.S. Senate,7251Washington, DC.72527253Hon. Ted Cruz,7254Chair,7255Senate Commerce, Science, and Transportation Committee,7256U.S. Senate,7257Washington, DC.72587259Hon. Todd Young,7260Chair,7261Surface Transportation, Freight, Pipelines and Safety Subcommittee,7262U.S. Senate,7263Senate Commerce, Science, and Transportation Committee,7264Washington, D.C.72657266Hon. Chuck Schumer,7267Senate Minority Leader,7268U.S. Senate,7269Washington, DC.72707271Hon. Maria Cantwell,7272Ranking Member,7273Senate Commerce, Science, and Transportation Committee,7274U.S. Senate,7275Washington, DC.72767277Hon. Gary Peters,7278Ranking Member,7279Surface Transportation, Freight, Pipelines and Safety Subcommittee,7280U.S. Senate,7281Senate Commerce, Science, and Transportation Committee,7282Washington, DC.72837284Dear Senators Thune, Schumer, Cruz, Cantwell, Young, and Peters:72857286    The National Industrial Transportation League (NITL or ``The7287League'') thanks you for considering the nominations of Vice Chair7288Michelle A. Schultz (R) of Pennsylvania and Mr. Richard Koster (R) of7289West Virginia to serve as Members of the Surface Transportation Board7290(STB or Board).7291    NITL was founded in 1907. Its member companies range from some of7292the largest users of the Nation's transportation systems to smaller7293companies engaged in the shipment and receipt of goods--spending7294billions of dollars on freight annually. The League is the ``voice of7295the shipper'' on freight transportation policy matters involving all7296modes. The League members move a variety of commodities via rail7297including agriculture, chemicals, steel, scrap, paper/pulp/forest,7298retail, and fuel products. NITL members require reliable and cost-7299effective freight rail transportation services to meet their production7300and customers' requirements.7301    Our country's ever-growing reliance on freight rail requires the7302Board to provide necessary and effective oversight, especially7303considering only four Class I railroads control 90 percent of our7304Nation's freight rail traffic. Freight rail is a vital component of our7305Nation's economy--it enhances the growth of our economy and our global7306competitiveness.7307    NITL welcomes the nomination of Member Schultz, the Board's current7308Vice Chair, to serve a second term expiring November 30, 2030. Her7309continued leadership on the Board will help ensure continuity as the7310Board addresses longstanding proceedings such as Commodity Exemption7311and First-Mile/Last where the latter is expected to be incorporated in7312a more comprehensive data modernization initiative to include (1)7313eliminating unneeded data collections, (2) strengthening mission7314critical collections, (3) streamlining filing and automating processes,7315and (4) improving data visualization.7316    The League appreciates the nomination of Mr. Kloster to serve as7317Member of the STB for a term expiring December 31, 2028. NITL and its7318members have worked with Mr. Kloster during his more than three7319decades' direct experience working with railroads, rail suppliers, and7320shippers. He will provide not just varied rail industry expertise to7321the Board but also his unique business perspectives geared towards7322problem solving. His varied background will allow him to become7323familiar with the issues before the STB quickly--matters that involve7324the most substantive issues of significant importance to the Board,7325shippers, railroads, and the public.7326    They are technical, complex, and challenging, requiring resolution7327to reflect today's market conditions and freight rail demands.7328    NITL looks forward to the continued leadership of Vice Chair7329Schultz and the service of Mr. Kloster as the Board faces a potential7330merger between two Class I carriers--under new merger rules that have7331never been tested before--in an already consolidated market7332environment, with the continued use of Precision Scheduled Railroading.7333    NITL views Vice Chair Schultz and Mr. Kloster as appropriate7334nominees to serve as Members of the STB and welcomes their swift7335confirmation.7336    Thank you for your consideration, and continued leadership and7337commitment in ensuring the continuity of a full complement of Members7338to the Board at this most critical time.7339            Sincerely yours,7340                                          E. Nancy O'Liddy,7341                                                Executive Director,7342                             National Industrial Transportation League.73437344cc: Members of the Senate Commerce, Science, and Transportation7345Committee7346                                 ______73477348                                                   February 5, 20257349Mr. Sergio Gor7350Assistant to the President7351Office of Presidential Personnel7352The White House73537354Dear Mr. Gor:73557356    I am writing to express my personal support for Richard (Dick)7357Kloster as a candidate for a role on the Surface Transportation Board7358(STB).7359    It has been my immense pleasure to have known Dick for nearly 307360years--initially working together at GE Capital Railcar Services and7361later and to this day, collaborating with him on a range of industry7362issues and initiatives.7363    Dick brings a wealth of knowledge and experience to the table. His7364service as a long-time NIT League board member and years as a `go to'7365industry advisor highlights his commitment, credibility and deep7366understanding of the dynamics around serving the shipper community. He7367is a well-respected professional with keen insights that would benefit7368the shipper community and promote safety, improved service, and7369enhanced technology usage in rail transportation.7370    In my roles as President, CIT Rail and Chairman and currently Past7371Chairman, Railway Supply Institute--I understand the importance of7372having well qualified, committed professionals on the STB and I'm7373confident Dick would be an outstanding board member.7374    Thanks in advance for your consideration and kindly let me know if7375I can be of any further assistance.7376            Sincerely,7377                                          Jeffrey T. Lytle.7378                                 ______73797380                           Railroad Development Corporation7381                         Pittsburgh, Pennsylvania, October 30, 202573827383Hon. Sam Brebbia, Chief Counsel,7384Hon. Ryan Cannon, Coalitions and Member Services Advisor,7385Senate Commerce, Science, and Transportation Committee,7386Washington, DC.73877388Gentlemen,73897390    Please accept this as a letter of recommendation for the7391appointment of my railway colleague Richard Kloster to the Surface7392Transportation Board.7393    As background I have known him in my capacity as both Chairman of7394Railroad Development Corporation (www.rrdc.com), a Pittsburgh-based7395family owned international railway investment and management company,7396and the Iowa Interstate Railroad (``IAIS'', www.iaisrr.com), a Class 27397railroad operating between Chicago and Peoria in the east and Council7398Bluffs in the west. The significance of IAIS in this case is that we7399connect with each of the USA's Class 1 railroads and thus have7400interaction with STB -regulated companies on a constant basis.7401    As additional background, I teach an undergrad course on rail7402deregulation at Carnegie Mellon University, having spent my life in the7403industry and being involved in not only railroading in North America7404but also railway businesses in Latin America, Africa and Europe.7405    Finally, I am well aware of the STB's mission having served as Co-7406chair of its Passenger Rail Advisory Committee for the last year.7407    All of the above is not to brag but rather confirm that I am well7408positioned to recommend Mr. Kloster, because of his own background.7409    To be specific, he is both analytical and broad based, the best7410evidence of that being the diversity of his industry roles over the7411years ranging from statistical analysis of railcar fleets to7412representing multinationals and investors in the domestic marketplace.7413And his respect at the industry level includes an annual role in7414Railtrends, the top industry event for rail finance.7415    More specifically, Mr. Kloster is well aware of the role that7416railroads like IAIS play in the global marketplace and has among other7417things brought international investors to see us, thus facilitating not7418only commerce but finance.7419    I would be pleased to provide additional perspective on his fitness7420for the job, and to the extent that there is interest in a follow-up7421conversation with anyone related to his appointment I would be more7422than happy to oblige in anticipation of Mr. Kloster's confirmation, and7423this next chapter in his service to the Nation.7424            Sincerely,7425                                          Herny Posner III.74267427cc: Hon. Jamie Sheng, Director, OPACAC, STB Mr. Richard Kloster7428                                 ______74297430                                         Trinity Industries7431                                    Dallas, Texas, November 3, 202574327433Hon. Ted Cruz,7434Chairman,7435U.S. Senate Committee on Commerce, Science, and Transportation,7436Washington, DC7437Hon. Maria Cantwell,7438Ranking Member,7439U.S. Senate Committee on Commerce, Science, and Transportation,7440Washington, DC74417442Re: Nomination of Richard J. Kloster to the Surface Transportation7443            Board74447445Dear Chairman Cruz and Ranking Member Cantwell:74467447    As the Senate Committee on Commerce, Science, & Transportation7448prepares to hold a confirmation hearing for Richard J. Kloster to serve7449as a member of the Surface Transportation Board (STB), Trinity7450Industries, Inc. (``Trinity'') appreciates the oppo1tunity to express7451its strong support for Mr. Kloster's nomination and urges the committee7452to swiftly advance Mr. Kloster for full Senate consideration.7453    Trinity is a proud, publicly-held U.S. provider of railcar products7454and services in No1th America, with a leading railcar lease fleet and7455manufacturing, maintenance, and repair operations. With an owned and7456managed fleet of approximately 144,000 railcars, the Trinity platform7457plays a critical role in the North American supply chain, and the7458country's national security. Trinity supports the U.S. market with a7459footprint of 2,978 U.S. employees across 42 U.S. locations, including7460its Dallas, Texas headquarters; its production facility in Longview,7461Texas; its maintenance and repair facilities in Saginaw and Fort Worth,7462Texas; Shell Rock, Iowa; Jonesboro, Arkansas; and Ca1tersville,7463Georgia; and its rail logistics and services facilities in Florida,7464Georgia, Maryland, Michigan, North and South Carolina, Texas, and7465Virginia, among others.7466    Mr. Kloster has extensive experience across the U.S. freight rail7467ecosystem. He has demonstrated great leadership in the railway supply7468industry and his deep understanding of the complexities of the rail7469network make him an excellent choice for this crucial role as a member7470of the STB. He has experience working for Class 1 and sh01t line7471railroads, a rail car lessor, a rail car fleet management service7472provider, and a transportation economic forecasting and consulting7473firm. He also holds several patents for rail car design innovations.7474His knowledge and background make him an eminently qualified nominee to7475the STB.7476    Mr. Kloster will bring a unique, balanced, and knowledgeable7477perspective to the STB, and his insights into all segments of the rail7478industry will be invaluable in shaping the future of freight rail in7479America. Again, Trinity strongly supports Mr. Kloster's nomination and7480appreciates your consideration in supporting his nomination.7481            Sincerely,7482                                              Jack L. Todd,7483                                    Vice President, Public Affairs,7484                                               Trinity Industries, Inc.7485                                 ______74867487                                                   November 3, 202574887489Hon. Ted Cruz ,7490Chairman,7491Committee on Commerce, Science, and Transportation,7492U.S. Senate7493Washington, DC.7494Hon. Maria Cantwell,7495Ranking Member,7496Committee on Commerce, Science, and Transportation,7497U.S. Senate,7498Washington, DC.74997500Dear Chairman Cruz and Ranking Member Cantwell:75017502    The undersigned groups representing agricultural producers and7503agribusinesses strongly endorse and respectfully urge you to confirm7504Michelle Schultz for another term at the Surface Transportation Board7505(STB) and Richard Kloster for a first term.7506    The STB provides oversight of the freight rail marketplace, and STB7507Vice Chairman Schultz understands its vital role having been a board7508member for almost five years and overseeing the rail industry's7509recovery from very rough rail service conditions. As the Board7510considers a proposal for the largest rail merger in history, her deep7511understanding of STB services in the American Supply chain will be a7512great resource.7513    We are impressed by the extensive rail industry experience of Mr.7514Kloster, who founded Integrity Rail Partners Inc., a private7515transportation consulting company. Prior roles include Senior Vice7516President and Chief Commercial Officer for Alltranstek, Senior7517Consultant on freight transportation for FTR, President of Advanced7518Rail Equipment Solutions and partner for Norther American Transport7519Solutions. He also has served on the boards of the National Industrial7520Transportation League and the Railway Supply Institute.7521    Given the important matters pending at the STB, we urge swift7522movement to confirm Michelle Schultz for a second term at the STB and7523Richard Kloster to a first term.7524            Sincerely,75257526Agricultural Retailers Association7527American Cotton Shippers Association7528American Feed Industry Association7529AmericanHort7530American Malting Barley Association7531American Seed Trade Association7532American Soybean Association7533International Fresh Produce Association7534National Association of Wheat Growers7535National Cotton Council7536National Council of Farmer Cooperatives7537National Grain and Feed Association7538National Milk Producers Federation7539North American Millers' Association7540Pet Food Institute7541The Fertilizer Institute7542USA Rice7543U.S. Rice Producers Association75447545Cc: Committee on Commerce, Science & Transportation7546The Honorable John Thune, Majority Leader, U.S. Senate7547The Honorable Chuck Schumer, Minority Leader, U.S. Senate7548                                 ______75497550                                       Watco Companies, LLC7551                                                  Pittsburg, Kansas7552Sergio Gor7553Assistant to the President7554Office of Presidential Personnel7555The White House75567557Dear Mr. Gor,75587559    Please allow me to introduce myself, my name is Rick Webb, and I am7560the Executive Chairman of Watco Companies, LLC. Watco is a full-service7561supply chain solutions company focusing on freight rail services. In7562addition to rail services, we provide transloading, terminal and port,7563and logistics services. Our privately owned company is based in Kansas,7564but we currently have nearly 5,000 team members serving thousands of7565Customers throughout North America and Australia.7566    I write this letter in wholehearted support of having Mr. Richard7567J. Kloster fill the open Board Member position at the Surface7568Transportation Board. Mr. Kloster and I started in the rail industry in7569the early 1980s so we have known and collaborated with each other for7570decades. I can state without hesitation or reservation that Mr. Kloster7571is someone that knows the rail industry very well having worked in just7572about every aspect of it and is known for his sharp intellect and fair-7573mindedness when doing business.7574    Mr. Kloster's experience gives him a unique perspective on how the7575rail industry works and more importantly how it is supposed to work for7576the benefit of all stakeholders. Having worked for a Class 1 railroad,7577a shortline railroad, for several service providers and on behalf of7578many Customers/Shippers puts Mr. Kloster in the best position possible7579to know and understand the needs from all perspectives and to determine7580the most appropriate economic and fair solution for all parties.7581    If the task is to find an STB Board Member who has professional7582standing and business experience with demonstrated knowledge in7583transportation, transportation regulation and economic regulation then,7584in my opinion, one could not find a more qualified and capable7585candidate than Richard J. Kloster.7586    Best of luck with this process and let me know if you need further7587information or discussion as the decision for the next Surface7588Transportation Board Member is being made.7589            Sincerely,7590                                                 Rick Webb,7591                                                Executive Chairman.75927593    The Chairman. Senators will have until the close of7594business on November 10 to submit questions for the record. The7595nominees will have until the close of business on November 137596to respond to those questions.7597    That concludes today's hearing. The Committee stands7598adjourned.7599    [Whereupon, at 11:16 p.m., the hearing was adjourned.]76007601                            A P P E N D I X76027603   Response to Written Questions Submitted by Hon. Maria Cantwell to7604                            John F. DeLeeuw7605    Alvin Brown Firing. During an interview with my staff on October760631, 2025, you were asked whether you would step aside without delay if7607the courts ruled in favor of Vice Chair Alvin Brown in his pending7608lawsuit challenging his unlawful removal from the NTSB. During your7609hearing, you were asked the same question. In response, you testified7610that you had ``not considered or thought about'' what you would do in7611such a situation.76127613    Question 1. You have now had ample time to consider this very7614important question. If the courts rule in favor of Vice Chair Brown and7615direct him to be reinstated, will you commit to stepping aside swiftly?7616    Answer. I would consult with legal counsel and comply with all7617court orders.76187619    American Airlines Recusal. You have a long history working for7620American Airlines, spending at least 33 years flying for the airline,7621including serving as American's Managing Director for Safety and7622Efficiency.7623    Although American Airlines is not a formal party to the January 29,76242025, Ronald Reagan Washington National Airport (DCA) mid-air collision7625investigation, PSA Airlines--the regional carrier involved in the7626crash--is a wholly owned subsidiary of American.76277628    Question 1. Given your relationship with American Airlines, do you7629intend to recuse yourself from this NTSB investigation if confirmed?7630    Answer. Yes.76317632    Question 2. Given your employment at American, do you commit to7633recusing yourself from all matters before the NTSB involving American7634Airlines and its subsidiaries?7635    Answer. If confirmed, I will follow all applicable ethics laws and7636obligations, including recusal requirements. I will consult with NTSB7637ethics officials to ensure that any necessary recusals are handled7638appropriately.76397640    Question 3. Do you commit to consulting with NTSB's General Counsel7641to ensure there are no conflicts of interest before participating in7642Board matters involving American Airlines or its subsidiaries?7643    Answer. Yes.76447645    Strong ADS-B In Performance Standard. It's crucial for the safety7646of the flying public that aviation operators, especially the commercial7647passenger fleet--which moves over 2 million passengers each day, is7648equipped with ADS-B In technology, and not alternatives that don't7649deliver on safety.7650    Importantly, not every type of ADS-B In performs the same way and7651delivers the same benefits. That's why our bipartisan DCA safety7652legislation requires ADS-B In that boosts situational awareness for7653pilots and delivers real-time traffic advisories and alerts to ensure a7654robust additional layer of safety on the flight deck.76557656    Question 1. What are the benefits of pilots having ADS-B In that is7657integrated with avionics on the flight deck?7658    Answer. ADS-B In, unlike other means to identify traffic7659information, (TCAS Advisories), offer the pilot the ability to see all7660the traffic information around them before the traffic becomes a threat7661to the crew.76627663    Question 2. How would ensuring a clear compliance date for7664operators to equip with ADS-B In help advance safety in our aviation7665system?7666    Answer. I strongly support a deadline for ADS-B In implementation.7667Without a date, there could be delays equipping resulting in a7668degradation in safety that could have been achieved earlier.76697670    Question 3. Do you agree that ADS-B In provides pilots with better7671situational awareness at lower altitudes where Traffic Alert and7672Collision Avoidance System (TCAS) does not activate?7673    Answer. Yes. Pilots would have ability to reference the traffic7674around them and the improved situational awareness would lead to an7675awareness of threats.76767677    Question 4. Do you support our efforts to ensure FAA is moving7678forward with plans to certify advanced technologies that will be able7679to deliver stronger safety benefits than TCAS?7680    Answer. Yes, I believe ADS-B In provides additional safety7681enhancements and at American Airlines, our pilots have verified the7682safety benefits provided by our ADS-B In equipage. Offering airlines7683the ability to use the technology to not only improve safety but use7684the technology to improve airspace throughput, turns this mandate into7685a win/win for the National Airspace System.76867687    Independent Agencies. I am deeply concerned about this7688Administration's illegal firings at independent agencies--and its7689blanket refusal to nominate a Democrat to any independent Board or7690Commission. President Trump has illegally fired over 25 Members from7691independent Boards and Commissions this year, including at the NTSB.7692Meanwhile, nearly ten months into this Administration, the White House7693has not nominated any member of the opposite party to any independent7694Board or Commission.76957696    Question 1. Do you believe in the importance of bipartisanship on7697independent Boards and Commissions?7698    Answer. Yes.76997700    Question 2. Do you support having a fully staffed NTSB, which7701includes Members of the opposite political party?7702    Answer. Yes.77037704    Question 3. If the President or anyone else in this Administration7705threatened to fire you unless you took an action you disagreed with,7706would you refuse?7707    Answer. I do not believe the President would make such a threat; if7708so confirmed, I pledge to follow the law.77097710    Rail Safety/Surface Transportation Reauthorization. Last year,7711there were 37 train derailments in the state of Washington. Captain7712DeLeeuw, if confirmed you will have to respond to tragedies in many7713different modes of transportation. On February 3, 2023, we saw one of7714those tragedies with the preventable train derailment in East7715Palestine, Ohio. NTSB made 34 new recommendations after its7716investigation.7717    Last Congress, Senators Brown, Fetterman, Casey, and then-Senator7718Vance introduced the Railway Safety Act that would implement a number7719of those recommendations.77207721    Question 1. If confirmed do you commit to reviewing those 347722recommendations and working with Congress to include comprehensive rail7723safety reforms in the upcoming surface transportation reauthorization?7724    Answer. Yes, if confirmed, I will work with the Chairwoman of the7725NTSB to advocate for implementation of the rail safety recommendations.77267727    Roadway Safety. The NTSB is responsible for investigating7728significant highway crashes in the United States. We are currently7729facing a concerning roadway safety trend. In the state of Washington,77302023 was the worst year for traffic deaths since 1990. And last year,7731730 people died in crashes on our roads.77327733    Question 1. How do you believe we can reverse our worsening roadway7734safety record and save lives on our roads?7735    Answer. I believe education to all drivers about the dangers of7736impairment, distraction, and excess speed, and advocating for the7737adoption of current NTSB Safety Recommendations to be implemented, will7738help to reverse the trend.77397740    Question 2. The NTSB has 198 open recommendations to Department of7741Transportation on highway safety matters. What do you believe are the7742most important recommendations the board has made to address roadway7743safety?7744    Answer. Safety recommendations focusing on reducing speeding,7745impaired driving, and distracted driving by improving driver behavior7746through education and technology. These recommendations include the7747mandatory use of intelligent speed assistance systems, passive alcohol7748detection systems, and advanced driver-assistance technologies.7749                                 ______77507751    Response to Written Question Submitted by Hon. Amy Klobuchar to7752                            John F. DeLeeuw7753    Aviation Safety. Americans deserve safe and dependable air travel,7754and no one should have to second guess whether their loved one will7755make it safely to their destination. In your testimony you mentioned7756the importance of implementing National Transportation Safety Board7757recommendations to improve safety.77587759   Which open NTSB recommendations do you believe are7760        especially important for improving aviation safety?7761    Answer. Require ADS-B In (with a deadline), improve general7762aviation safety, and implementation of Safety Management Systems (SMS)7763for all revenue passenger-carrying operations.7764                                 ______77657766    Response to Written Question Submitted by Hon. Tammy Baldwin to7767                            John F. DeLeeuw7768    Question 1. In August, a CPKC train derailed in Dodge County,7769Wisconsin. This is the second derailment in the exact same location in7770two years. It raises serious questions about the reliability of this7771stretch of rail infrastructure and poses safety concerns for the7772Reeseville community. The NTSB is leading an ongoing investigation into7773the derailment. If confirmed, will you commit to thoroughly7774investigating this derailment and providing safety recommendations?7775    Answer. Yes.7776                                 ______77777778      Response to Written Questions Submitted by Hon. Ted Cruz to7779                           Richard J. Kloster7780    Question 1. The Office of Management and Budget (OMB) is the7781Federal agency responsible, in part, for budget and personnel decisions7782across the executive branch. Recently, OMB sent a message to Federal7783employees, including members of the Surface Transportation Board (STB),7784providing funding and personnel guidance in the wake of the government7785shutdown. STB leadership forwarded the contents of this message to STB7786employees. Do you agree that merely forwarding a message from OMB about7787the government shutdown does not weaken STB's impartiality and ability7788decide matters before it in compliance with relevant laws?7789    Answer. Yes, I agree that this does not affect the STB's7790impartiality and ability to decide matters before it in compliance with7791relevant laws.77927793    Question 2. Former STB Democrat Chairman Martin Oberman served on7794President Biden's ``White House Competition Council'' during his tenure7795as STB chairman and attended many meetings at the White House. STB7796members, and other members of independent executive agencies, interact7797with the President and other parts of the Executive Branch in the7798ordinary course of their work. Do you agree that an STB member, like7799Mr. Oberman in the Biden administration, can talk with the President or7800other members of the administration without affecting his or her7801impartiality in deciding matters before the STB?7802    Answer. Yes, I agree an STB member can talk with the President or7803other members of the Administration without affecting his or her7804impartiality in deciding matters before the STB. I believe it is not7805improper or inappropriate for agency heads, including STB members, to7806communicate with the President or other parts of the Executive Branch,7807consistent with applicable law. If confirmed, I commit to giving full7808and fair consideration to all comments filed in the docket.7809                                 ______78107811    Response to Written Questions Submitted by Hon. Eric Schmitt to7812                           Richard J. Kloster7813    Question 1. St. Louis is one of only a few cities in the U.S. with7814major facilities for both Union Pacific and Norfolk Southern. Any7815merger among these carriers could significantly affect the region.78167817     When reviewing a merger of this scale, how do you7818            intend to evaluate local economic impacts in cities like7819            St. Louis--specifically in terms of employment, service7820            reliability, and freight movement?78217822    What safeguards will you commit to implementing to ensure that7823communities like St. Louis don't lose rail capacity or face service7824degradation as a result of network realignment?7825    Answer. Because the UP-NS merger is currently pending before the7826STB, I cannot comment further. If confirmed, I commit to carefully7827reviewing all comments of stakeholders, filed in the docket and to7828apply the relevant law.7829                                 ______78307831   Response to Written Questions Submitted by Hon. Maria Cantwell to7832                           Richard J. Kloster7833    Surface Transportation Board (STB) Independence. During the 114th7834Congress, then Chairman Thune sponsored the Surface Transportation7835Board Reauthorization Act of 2015, which became law. Senator Thune's7836bill wisely added these 13 words to the law: ``The Surface7837Transportation Board is an independent establishment of the United7838States Government.''7839    I am concerned that the White House will seek to put its thumb on7840the scale of Union Pacific-Norfolk Southern merger unless we have board7841members that are committed to its independence from this or any7842President.78437844    Question 1. YES or NO: Do you believe in the importance of7845bipartisanship on independent boards and commissions?7846    Answer. If confirmed, I am committed to working in a fair and7847objective manner with all members of the STB, regardless of party7848affiliation.78497850    Question 2. YES or NO: If the President or anyone else in this7851Administration threatened to fire you unless you took an action you7852disagreed with, would you refuse?7853    Answer. While I do not believe the President or anyone else in this7854Administration would take any such actions, if confirmed, yes, I would7855refuse.78567857    Question 3. YES or NO: Do you commit to make an independent7858determination of the merger's impact on American farmers, workers, and7859families regardless of political pressure?7860    Answer. While I cannot comment on pending (or anticipated) matters,7861yes, in any matter that comes before me, if I am confirmed, I commit to7862making independent determinations consistent with law.78637864    Question 4. Do you think an STB Member is required to follow the7865President's direction?7866    Answer. I believe the STB Members should and will review all7867evidence and comments filed on the docket fully and fairly.78687869    Question 5. If confirmed, do you intend to follow formal or7870informal direction from President Trump with respect to any actions7871taken in your official capacity?7872    Answer. As noted for Question 4, if confirmed, I will review all7873evidence and comments filed in at the STB docket fully and fairly.78747875    Question 6. Approximately nine months ago, you ``liked'' a LinkedIn7876post that read: ``MAGA with a mandate from the American people demands7877that all 3 of these be confirmed. If you are Republican and vote nay7878then your political career is OVER!!'' The post contained pictures of7879Kash Patel, Tulsi Gabbard, and Robert Kennedy Jr., while their7880nominations were pending before the Senate.78817882    Yes or No: Do you agree that an STB Member is charged with7883protecting the public interest--not political interests?7884    Answer. Yes, I agree that an STB member is charged with following7885the law, which I commit to.78867887    Hatch Act Violations: The Hatch Act generally prohibits Executive7888Branch employees from engaging in political activity while on duty.7889Political activity includes ``activity directed at the success or7890failure of a political party, candidate for partisan political office,7891or partisan political group.''7892    At the hearing, STB Member Schultz acknowledged receiving an e-mail7893from STB Chair Patrick Fuchs which blamed only ``Congressional7894Democrats'' for the government shutdown.78957896    Question 1. Do you think it is appropriate for the head of an7897independent agency to send an agency-wide e-mail attempting to assign7898political blame to only one political party?7899    Answer. If confirmed, I commit to complying with the Hatch Act. I7900am not familiar with this situation, but my understanding is that that7901this was a government-wide e-mail from the Executive Office of the7902President, and STB leadership from both parties has long followed7903established redistribution protocols for EOP-drafted notices.79047905    Question 2. If you were directed to send an e-mail like this to STB7906staff, would you refuse?7907    Answer. If confirmed, I commit to complying with the Hatch Act as7908an STB member.79097910    Question 3. If you believed an employee of the Board violated the7911Hatch Act, would you report it to the U.S. Office of Special Counsel?7912    Answer. Yes, if confirmed, upon advice of counsel, I would report a7913violation of the Hatch Act to the U.S. Office of Special Counsel.79147915    Competition: Mr. Kloster, you have been in the rail industry for7916decades and have witnessed the changes to the rail industry brought on7917by precision scheduled railroading (PSR).79187919    Question 1. How would you define PSR?7920    Answer. PSR is a term used in the industry to describe changes in7921operating philosophy and practice. Most large railroads have deployed7922aspects of PSR, some significantly but others much less.79237924    Question 2. How has PSR impacted the rail industry?7925    Answer. I think that railroads have made changes over the years7926that have had different impacts and that the core of the issue for7927shippers is how it has affected their service, which is a very personal7928and specific thing to a particular shipper.79297930    Question 3. How have you seen consolidation among railroads impact7931the industry?7932    Answer. Over the last 30 years, I've seen rail consolidation led to7933great efficiencies and improvements in rail service, as well as opening7934new markets for shippers. But I've also seen consolidation led to7935increased prices and other difficulties for shippers. The economics and7936competitive impacts of any consolidation are unique and should be7937carefully studied.79387939    Question 4. What issues do you think the board needs to take a7940closer look at to improve service and competition in the rail industry?7941    Answer. Reliable rail service and competition in the rail industry7942are at the center of many pending matters currently before the STB. If7943confirmed, I commit to working diligently with my STB colleagues on7944these matters.79457946    Common Carrier Obligations: Federal law required railroads to7947provide ``transportation or service on reasonable request.''79487949    Question 1. Do you believe that this common carrier obligation7950includes a duty to provide reliable service to shippers?7951    Answer. Common carrier can be found in 49 U.S.C. Sec. 11101, and if7952confirmed, I will uphold the law.79537954    Cost-Benefit Analyses: Currently, the surface transportation board7955is not required to formally consider the costs and benefits of a7956regulation during the rulemaking process.79577958    Question 1. Do you believe the Board should conduct a formal costs7959and benefit analysis as part of the rule making process?7960    Answer. As a private sector executive and market analyst, I am7961always weighing costs and benefits, and as a policy matter that is what7962the STB has always done and what it should continue to do.79637964    Question 2. Are there ever times where you think a rule should not7965pass a cost benefit analysis?7966    Answer. Any rule adopted by the STB has, by definition, passed a7967cost-benefit analysis, whether or not it follows the formal procedures7968outlined by OMB policy.79697970    Reciprocal Switch Rule: In July, the U.S. Court of Appeals for the7971Seventh Circuit overturned the Board's reciprocal switching rules.79727973    Question 1. Do you believe the Board should revisit the regulations7974to update them in accordance with the Court's findings?7975    Answer. This issue is now back at the Board and commenting on this7976issue would not be appropriate. If I am confirmed to the Board, I7977commit to working with my fellow members to address and resolve this7978issue.79797980    Rate Cases: U.S. Court of Appeals for the Eighth Circuit recently7981overturned the Board's Final Offer Rate Review case which the Board7982implemented in response to provisions within the STB Reauthorization7983Act of 2015.79847985    Question 1. Do you believe that rate review cases at the Board need7986to be expedited?7987    Answer. If confirmed, I commit to working diligently to make sure7988all rate issues are dealt with fairly and in a timely fashion.79897990    Question 2. What ideas do you have to expedite rate review cases?7991    Answer. If I am confirmed, I commit to working with the other Board7992Members to explore ways to expedite rate review cases.79937994    Union Pacific-Norfolk Southern Merger. If approved, the Union7995Pacific-Norfolk Southern merger would be the largest rail merger in the7996U.S. history. The combined railroad would be worth over a quarter of a7997trillion dollars and control 40 percent of the Nation's rail traffic.7998In Washington State, one in every six tons of freight travels by rail.7999    Whether that's our wheat harvest moving to export port or consumer8000goods traveling to households--Washington's farmers, families, and8001businesses deserve reliable freight service options at reasonable8002rates.80038004    Question 1. YES or NO: Do you commit to following the STB's merger8005rules that require you to only approve this merger if it increases8006competition?8007    Answer. While I cannot comment on pending (or anticipated) matters,8008I do commit to always following relevant laws and acting impartially.80098010    Question 2. YES or NO: Do you commit to carefully examining the8011impacts on ports, farmers, small business shippers, and to workers and8012public safety?8013    Answer. Again, while I cannot comment on pending (or anticipated)8014matters, I commit to giving full and fair consideration to all evidence8015and comments filed in the record.80168017    Helping America's Farmers. According to an October 2, 2025, report8018from the Farm Bureau, U.S. Farm Income is down year-over-year for8019almost every crop category tracked, including: Corn, Soybeans,8020Vegetables & Melons, Wheat, Hay, Cotton, and Rice. For example the8021report notes, ``From January through August 2025, U.S. soybean exports8022to China totaled just 218 million bushels, down sharply from 9858023million bushels in 2024, when China purchased about half of all U.S.8024soybean exports.''80258026    Question 1. What can the STB do to lower transportation barriers8027for America's farmers and ensure they have rail access at reasonable8028rates to market their crops?8029    Answer. I believe the STB should fairly apply the laws and8030regulations in order to ensure an efficient and reliable interstate8031rail network that benefits all shipper industry segments.8032                                 ______80338034   Response to Written Questions Submitted by Hon. Amy Klobuchar to8035                           Richard J. Kloster8036    Agricultural Shippers. Agricultural producers depend on reliable8037and competitive rail service to move their products to domestic and8038international markets. Agricultural shippers already face limited8039competitive options for rail service and further consolidation could8040compound these challenges.80418042   How do you plan to protect the interests of agricultural8043        shippers going forward?8044    Answer. Agricultural shippers, as well as many other industries,8045are vital to the railroads. If confirmed, I commit to using the legal8046authorities of the STB to ensure an efficient interstate railroad8047network.8048                                 ______80498050   Response to Written Questions Submitted by Hon. Tammy Baldwin to8051                           Richard J. Kloster8052    Question 1. The common carrier obligation requires the railroads8053provide service upon reasonable request and at reasonable rates.8054However, it unfortunately lacks a clear definition, which the8055Transportation Research Board found to be ``poorly defined.'' Earlier8056this year, I introduced the Reliable Rail Service Act with Senator8057Marshall to better clarify the common carrier obligation, with the8058strong support of a wide range of rail shippers and rail labor unions.8059Do you believe that additional clarification of the common carrier8060obligation would provide more certainty to shippers?8061    Answer. I believe clarity is always a good thing, and that reliable8062rail service is a top issue. If confirmed, I commit to working closely8063with Senator Baldwin on rail service issues. If the Reliable Rail8064Service Act is enacted, I would apply the requirements set forth in the8065Act.80668067    Question 2. One of my longstanding priorities is for the STB to8068review, reduce or eliminate most or all its existing commodity8069exemptions. Shippers of exempted commodities are currently unable to8070seek relief from the STB unless they receive a ``revocation'' of the8071exemption beforehand. Doing so is a costly and lengthy process, and few8072shippers have pursued revocations for that reason. If confirmed, will8073you commit to looking into this issue further?8074    Answer. This is a matter that is currently before the Board, so it8075would be inappropriate for me to comment on it. If confirmed, I commit8076to looking into this issue with my fellow Board Members.80778078    Question 3. Do you believe the President and his Administration8079should be allowed to shape and influence Board actions and decisions?8080    Answer. Yes, the President and his Administration can do so, such8081as by providing comments to government agencies.80828083    Question 4. As an Independent Regulatory Agency, should the Board8084officially engage in partisan activities, including communications with8085Agency employees?8086    Answer. The STB is an independent agency established by Congress.8087The Board must carry out its functions in a fair and impartial manner.80888089    Question 5. If the Board and its members are required to no longer8090operate as an independent and impartial agency, what impact would it8091have on our country's freight rail network and the national supply8092chain?8093    Answer. The Board is an independent agency by law and if confirmed,8094I commit to making decisions fairly and after full consideration of the8095record.80968097    Question 6. Can the Board effectively function if subjected to8098political interference?8099    Answer. If confirmed, I commit to always exercising my own8100independent judgment after a thorough review of the record.8101                                 ______81028103Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to81048105                           Richard J. Kloster8106Topic: Independence of the Surface Transportation Board (STB)8107    Question 1. The White House said they fired Member Primus because8108he did not support the President's America First agenda.81098110    a. Do you believe Mr. Primus's firing was justified, and does it8111compromise the integrity and impartiality of the Board?8112    Answer. Because Mr. Primus has filed a lawsuit regarding his8113firing, it would be inappropriate for me to provide to comment on.81148115    b. Considering this, do you feel pressure to support the8116President's agenda? Should every member, including Democrats support8117the President's agenda? If not, should they be removed?8118    Answer. Because Mr. Primus has filed a lawsuit regarding his8119firing, it would be inappropriate for me to provide to comment on. The8120STB is an independent agency and if confirmed, I commit to following8121executing my duties consistent with law.81228123    c. Given the independence of the Surface Transportation Board, do8124you believe the President and the Trump administration should be8125permitted to influence the Board's decisions?8126    Answer. The President and the Trump administration are free to8127provide comments in the record on pending matters before the STB. This8128has been the practice of previous administrations, as well.81298130    d. If the Board and its members operate with only the President's8131agenda in mind, how will this impact our Nation's freight rail network8132and national supply chains? Can the Board continue to function8133effectively?8134    Answer. If confirmed, I commit to executing my responsibilities as8135a member of the STB fairly and impartially, after full consideration of8136the evidence and facts presented in the record of all matters that come8137before me.81388139    Question 2. During your confirmation hearing, Ms. Schultz confirmed8140that Chairman Fuchs sent an unprecedented e-mail to Surface8141Transportation Board staff blaming Democrats for the government8142shutdown.81438144    a. How would you define the Hatch Act?8145    Answer. The Hatch Act is current law and if confirmed, I commit to8146complying with the Act.81478148    b. Is it appropriate for apolitical Surface Transportation Board8149staff to be subjected to partisan e-mails from Board leadership and8150does it undermine the impartiality of the Board?8151    Answer. Because I am not at the STB, I have no personal knowledge8152of any e-mails, but I understand this was a government-wide e-mail from8153the Executive Office of the President. If confirmed, I commit to8154complying with the Hatch Act and would consult with agency counsel on8155all potential Hatch Act issues.8156                                 ______81578158      Response to Written Questions Submitted by Hon. Ted Cruz to8159                          Michelle A. Schultz8160    Question 1. The Office of Management and Budget (OMB) is the8161Federal agency responsible, in part, for budget and personnel decisions8162across the executive branch. Recently, OMB sent a message to Federal8163employees, including members of the Surface Transportation Board (STB),8164providing funding and personnel guidance in the wake of the government8165shutdown. STB leadership forwarded the contents of this message to STB8166employees. Do you agree that merely forwarding a message from OMB about8167the government shutdown does not weaken STB's impartiality and ability8168to decide matters before it in compliance with relevant laws?8169    Answer. Yes, I agree that sending such a message has no bearing on8170the STB's impartiality and ability to decide matters before it in8171compliance with relevant laws. As a general matter, STB leadership has8172long complied with government-wide personnel, funding, and other8173general administrative policies set forth across Administrations of8174both parties--from executive orders on hiring to regulations on8175workforce and building management to guidance on budget formulation. It8176is my understanding that the established practice of STB leadership,8177regardless of party, has been to utilize OMB-drafted notifications and8178that this practice is consistent with government-wide protocols or8179practices across Administrations.81808181    Question 2. Former STB Democrat Chairman Martin Oberman served on8182President Biden's ``White House Competition Council'' during his tenure8183as STB chairman and attended many meetings at the White House. STB8184members, and other members of independent executive agencies, interact8185with the President and other parts of the Executive Branch in the8186ordinary course of their work. Do you agree that an STB member, like8187Mr. Oberman in the Biden administration, can talk with the President or8188other members of the administration without affecting his or her8189impartiality in deciding matters before the STB?8190    Answer. Yes, an STB member can talk with the President or other8191members of the Administration without affecting his or her impartiality8192in deciding matters before the STB. As you point out, former Chairman8193Oberman actively participated in President Biden's ``White House8194Competition Council,'' interacting with the President and other parts8195of the Executive Branch. In Executive Order 14036, Promoting8196Competition in the American Economy, which established the White House8197Competition Council, President Biden encouraged former Chairman Oberman8198and the STB to consider substantial policy changes and enforcement8199actions, including rulemakings, investigations, and adjudicatory or8200licensing actions (e.g., merger reviews). Biden Administration8201officials then played active roles in many related or ensuing8202proceedings, by issuing public statements, submitting comments, and8203appearing at hearings.8204    Given the significance of the Board's work for our Nation's supply8205chain and the policy preferences of other political officials, some of8206whose jurisdictions are affected by Board decisions or have a statutory8207and regulatory role in Board proceedings, I understand the reasons why8208Administration officials would offer views on the Board's proceedings.8209I recognize the benefits of collaboration across government to address8210issues of national significance, which allows leaders to integrate8211perspectives and avoid siloed solutions. I also see value in the8212efficiencies and other benefits gained by consistent administrative8213policies across agencies, reflecting different agencies' jurisdictions8214and subject matter expertise. As such, I do not view interaction with8215the President or other parts of the Executive Branch, that are8216consistent with applicable law, as undermining my impartiality.82178218    Question 3. You have served on the STB under both the previous and8219current administration. During your tenure at the STB, has either8220administration, through official or unofficial channels, commented on8221board proceedings or decisions? To clarify, official means include an8222official filing in an open STB docket or an official publicly reported8223meeting, such as a hearing. Unofficial channels include press releases,8224statements in the press, comments made in official government documents8225that were not officially submitted to a STB docket, like an Executive8226order or official memorandum communication. If yes, please provide8227examples.8228    Answer. Yes, during my time on the Board, the previous and current8229administrations have both officially and unofficially commented on STB8230proceedings and decisions. For example, the Biden Administration8231routinely weighed in on STB policy, decisions, and administration, and8232the following are non-exhaustive examples within different facets of8233the agency's work:82348235   Rulemaking. President Biden's Executive Order 140368236        encouraged former Chairman Oberman and the Board to consider8237        commencing or continuing a rulemaking to strengthen its8238        regulations pursuant to 49 U.S.C. 11102(c). The STB had a8239        pending matter on the topic at that time. After the Executive8240        Order was issued, the U.S. Department of Transportation and8241        U.S. Department of Agriculture officially offered comments in8242        the relevant docket. After the STB decided to close that docket8243        and commence a new rulemaking, a special assistant to President8244        Biden informally offered views on the STB's new proposed rule,8245        which was then a pending matter, to the Wall Street Journal. In8246        general, on the White House website, the Biden Administration8247        listed STB rulemakings as actions the administration was taking8248        to advance competition in transportation.82498250   Adjudication/Licensing. In Executive Order 14036, President8251        Biden encouraged former Chairman Oberman and the Board to8252        consider certain rail carrier actions or responsibilities when8253        determining whether a merger is in the public interest. When8254        the STB evaluated the proposed voting trust underlying the8255        proposed merger between Canadian National and Kansas City8256        Southern, the U.S. Department of Justice formally filed8257        comments. After the STB issued its decision on the proposed8258        voting trust, Administration officials informally commented on8259        the action to the New York Times. In general, the Biden8260        Administration commented on and participated in several8261        adjudicatory proceedings of interest, ranging from new8262        passenger rail service to other mergers or transactions,8263        including other Federal agencies' weighing in on the proposed8264        merger between Canadian Pacific and Kansas City Southern.82658266   Investigations/Enforcement. President Biden also encouraged8267        former Chairman Oberman and the Board to vigorously enforce new8268        on-time performance requirements adopted pursuant to the8269        Passenger Rail Investment and Improvement Act of 2008. After8270        Executive Order 14036 was issued, Amtrak filed a complaint to8271        the STB, and the agency launched an investigation consistent8272        with statutory requirements. The relevant parties have8273        subsequently settled.82748275   Administration. As indicated above, the Biden Administration8276        issued many executive orders, directives, and guidance8277        documents concerning personnel, funding, and other8278        administrative matters at the STB and other government8279        agencies. Chairman Oberman implemented many workforce,8280        planning, and other such policies in compliance with or8281        consistent with the Biden Administration's issuances.82828283   Litigation. Consistent with statute, in carrying the8284        agency's litigation responsibilities, the STB routinely8285        collaborates and jointly files with the DOJ in defending the8286        STB's decisions and on other matters.82878288   Agency-specific advisory councils. Both by statute and8289        through the Board's discretion, officials from other agencies8290        serve on the STB's advisory councils, including the Railroad-8291        Shipper Transportation Advisory Council and Passenger Rail8292        Advisory Council, and informally contribute views on the8293        relevant subject matter for discussion.82948295   Multi-agency bodies. In addition to the White House8296        Competition Council, former Chairman Oberman also participated8297        on the White House-led efforts on supply chain resilience.82988299   Oversight and agenda formulation. Biden Administration8300        officials have formally and informally participated in and8301        commented on the STB's oversight proceedings, including8302        testimony from former Secretary Buttigieg.83038304    Examples span both administrations. During my time on the Board,8305President Trump's Administration has offered formal and informal views8306on the Board's agenda and proceedings. For example, President Trump has8307issued executive orders concerning government-wide review of8308regulations and policies related to competition, regulatory barriers,8309and American energy dominance, including EO 14267, Reducing Anti-8310Competitive Regulatory Barriers, and EO 14154, Unleashing American8311Energy. Trump Administration officials have also commented on potential8312and pending adjudications or licensing matters, such as the DOJ's8313recent formal comments on the proposed transaction between Norfolk8314Southern and Norfolk & Portsmouth Belt Line Railroad Company. Relevant8315across administrations, it is important to note that the Board's8316statutes and regulations explicitly reference the participation of8317other agencies in STB proceedings and other matters.8318    As stated above, given the significance of the Board's work for our8319Nation's supply chain and the policy preferences of other political8320officials, and considering different jurisdictions and statutory and8321regulatory roles, I expect government officials, regardless of party,8322to continue weighing in as appropriate on STB matters in the future.83238324    Question 4. When you have made STB decisions in the past, how did8325comments by either Administration, made through official or unofficial8326channels, impact your decision making?8327    Answer. During my time on the Board, I have demonstrated that I8328advance and promote thorough and fair decisions based on the evidence8329and argument in the record. I objectively review comments filed by all8330interested parties in the docket and make decisions based on the8331merits, including consideration of the Rail Transportation Policy of8332the United States at 49 U.S.C. 10101.83338334    Question 5. If confirmed for an additional term, would the process8335you use to make STB decisions change if the current administration or a8336future administration were to file comments through official or8337unofficial means?8338    Answer. No. I have always given careful consideration to all8339comments filed officially in the docket. If confirmed, I will continue8340to review the comments filed by all interested parties fairly,8341impartially, and thoroughly.8342                                 ______83438344    Response to Written Questions Submitted by Hon. Eric Schmitt to8345                          Michelle A. Schultz8346    Question 1. The Terminal Railroad Association of St. Louis was8347established in 1889 to serve as a neutral switching and terminal8348operator for multiple major freight carriers. Today it manages key8349infrastructure in the region, including the only two active rail8350bridges across the Mississippi River at St. Louis--the Merchants and8351MacArthur Bridges. Five of the six Class I railroads hold ownership8352stakes in the TRRA, but a merger between Union Pacific and Norfolk8353Southern could significantly shift that balance.83548355     How would you apply competition standards to determine8356            whether such a change in ownership could reduce competition8357            or access in the St. Louis region?83588359     Do you believe that the Board should take a more8360            active role in reviewing the governance of joint terminal8361            companies when ownership concentration increases through8362            mergers?8363    Answer. Because the merger is a pending matter, I am unfortunately8364unable to answer your question as any comments about how the standard8365of law will be applied in this case would be pre-decisional. What I can8366say is that I will be carefully reviewing all comments that are filed8367in the docket. I will also review the facts, evidence and applicable8368law and will make a decision based upon the merits of the case.8369                                 ______83708371   Response to Written Questions Submitted by Hon. Maria Cantwell to8372                          Michelle A. Schultz8373    Surface Transportation Board (STB) Independence. During the 114th8374Congress, then Chairman Thune sponsored the Surface Transportation8375Board Reauthorization Act of 2015, which became law. Senator Thune's8376bill wisely added these 13 words to the law: ``The Surface8377Transportation Board is an independent establishment of the United8378States Government.''8379    I am concerned that the White House will seek to put its thumb on8380the scale of Union Pacific-Norfolk Southern merger unless we have board8381members who are committed to its independence from this or any8382President.83838384    Question 1. YES or NO: Do you believe in the importance of8385bipartisanship on independent boards and commissions?8386    Answer. Yes, impartial decision-making is important to the STB's8387work.83888389    Question 2. YES or NO: If the President or anyone else in this8390Administration threatened to fire you unless you took an action you8391disagreed with, would you refuse?8392    Answer. Yes.83938394    Question 3. YES or NO: Do you commit to make an independent8395determination of the merger's impact on American farmers, workers, and8396families--regardless of political pressure?8397    Answer. Yes. I commit to reviewing the merger decision based upon8398the record including the filed comments of all stakeholders, the8399pleadings, the applicable law, and the evidence. I also commit to8400applying the principles set forth by the Rail Transportation Policy of8401the United States as enacted by Congress.84028403    Question 4. Do you think an STB Member is required to follow the8404President's direction?8405    Answer. As it relates to pending matters, I believe that an STB8406Member will review all comments filed on the docket fairly and with8407impartiality.84088409    Primus Removal. In the statute that created the predecessor to the8410STB in 1887, Congress set the standard of ``inefficiency, neglect of8411duty, or malfeasance in office'' for removal of a board member.8412Congress renewed that standard in 1995 when it created the modern STB.8413The only explanation the White House gave for the firing of Robert8414Primus from the STB was that he ``did not align with the President's8415America First agenda.''84168417    Question 1. You and Mr. Primus served together for over four-and-a-8418half years on the Board. In your personal experience, did you ever8419witness Mr. Primus act with, ``inefficiency, neglect of duty, or8420malfeasance in office?''8421    Answer. As you are aware, Mr. Primus has filed a lawsuit against8422the STB. As a matter of practice, I do not comment on pending8423litigation.84248425    Question 2. Do you personally think it was appropriate for the8426President to fire Mr. Primus?8427    Answer. Respectfully, again, I must defer providing an answer to8428this question. As you are aware, Mr. Primus has filed a lawsuit against8429the STB. As a matter of practice, I do not comment on pending8430litigation.84318432    Bipartisanship: The STB is designed to be composed of Members from8433different political parties. Specifically, pursuant to Congress's8434statutory directive, not more than three STB Members may belong to the8435same political party.84368437    Question 1. Do you believe the STB's decision-making process and8438credibility benefit from having Members from different political8439parties on the Board?8440    Answer. This is required by 49 U.S.C. Sec. 1301 (b)(1).84418442    Question 2. Do you believe it is important for the STB to have8443Senate-confirmed Members of the opposite political party?8444    Answer. The membership is set forth by 49 U.S.C. Sec. 1301 (b)(1),8445and it is required by law that the composition of the Board does not8446include more than three members of the same political party.84478448    Union Pacific-Norfolk Southern Merger. If approved, the Union8449Pacific-Norfolk Southern merger would be the largest rail merger in the8450U.S. history. The combined railroad would be worth over a quarter of a8451trillion dollars and control 40 percent of the Nation's rail traffic.8452In Washington State, one in every six tons of freight travels by rail.8453    Whether that's our wheat harvest moving to export port or consumer8454goods traveling to households--Washington's farmers, families, and8455businesses deserve reliable freight service options at reasonable8456rates.84578458    Question 1. YES or NO: Do you commit to following the STB's merger8459rules that require you to only approve this merger if it increases8460competition?8461    Answer. I commit to applying the standard set forth in 49 U.S.C.8462Sec. 11324. As you are aware, this will be a case of first impression8463as it relates to the application of the merger standard. I commit to8464applying all the requirements set forth in 49 C.F.R. Sec. 1180.1 to the8465facts that are presented in the docket and to make an impartial8466decision that is based upon the law, the record and that is in the best8467interest of the national rail network.84688469    Question 2. YES or NO: Do you commit to carefully examining the8470impacts to ports, farmers, small business shippers, and to worker and8471public safety?8472    Answer. I commit to carefully reviewing the record and the impacts8473to all stakeholders, including those you have identified. This case is8474the largest transaction to ever be filed with at the Board.8475    I am aware of the significance that this decision could have on the8476national rail network. I feel the weight of the importance of this8477decision and take this responsibility very seriously.84788479    Hatch Act Violations: The Hatch Act generally prohibits Executive8480Branch employees from engaging in political activity while on duty.8481Political activity includes ``activity directed at the success or8482failure of a political party, candidate for partisan political office,8483or partisan political group.''8484    At the hearing, you acknowledged receiving an e-mail from STB Chair8485Patrick Fuchs which blamed only ``Congressional Democrats'' for the8486government shutdown.84878488    Question 1. Do you think it is appropriate for the head of an8489independent agency to send an agency-wide e-mail attempting to assign8490political blame to only one political party?8491    Answer. I am committed to complying with the Hatch Act. In8492assessing the appropriateness of an agency-wide e-mail, I would ensure8493its legality, including through consultation with the STB's Office of8494Chief Counsel and, as applicable, consideration of relevant U.S. Office8495of Special Counsel precedent, such as advisory opinions on8496communications that concern policy or legislation and reference a8497political party. Further, I would ensure the e-mail's accuracy,8498including the evaluation of information, reporting, or analysis from8499credible and non-partisan sources.8500    Finally, I would consider the necessity or value of the e-mail and8501any relevant procedures, such as whether it involves pertinent legal or8502policy information disseminated consistent with established protocols8503or circulars reflecting different agencies' jurisdictions.85048505    Question 2. If you were directed to send an e-mail like this to STB8506staff, would you refuse?8507    Answer. As I have demonstrated throughout my government service, I8508would continue to comply with the Hatch Act. In assessing the8509appropriateness of any agency-wide e-mail, I would ensure its legality8510and accuracy and consider its necessity or value and any relevant8511procedures.85128513    Question 3. If you believed an employee of the Board violated the8514Hatch Act, would you report it to the U.S. Office of Special Counsel?8515    Answer. Yes, if I believed an employee of the Board violated the8516Hatch Act, I would report it to the U.S. Office of Special Counsel.8517                                 ______85188519   Response to Written Questions Submitted by Hon. Tammy Baldwin to8520                          Michelle A. Schultz8521    Question 1. The common carrier obligation requires the railroads8522provide service upon reasonable request and at reasonable rates.8523However, it unfortunately lacks a clear definition, which the8524Transportation Research Board found to be ``poorly defined.'' Earlier8525this year, I introduced the Reliable Rail Service Act with Senator8526Marshall to better clarify the common carrier obligation, with the8527strong support of a wide range of rail shippers and rail labor unions.8528Do you believe that additional clarification of the common carrier8529obligation would provide more certainty to shippers?8530    Answer. I believe predictable, reliable, service that meets the8531needs of shippers is critical to the supply chain and the Nation's8532economy. As you are aware, pursuant to 49 U.S.C. Sec. 11101(a), a rail8533carrier shall provide transportation or service on reasonable request.8534I believe that upon reasonable request is a question that is determined8535based upon the facts of each case. If the Reliable Rail Service Act is8536enacted, I would apply the requirements set forth in the Act to any8537cases alleging violations of the common carrier obligation.85388539    Question 2. One of my longstanding priorities is for the STB to8540review, reduce or eliminate most or all its existing commodity8541exemptions. Shippers of exempted commodities are currently unable to8542seek relief from the STB unless they receive a ``revocation'' of the8543exemption beforehand. Doing so is a costly and lengthy process, and few8544shippers have pursued revocations for that reason. If confirmed, will8545you commit to looking into this issue further?8546    Answer. Docket No. EP 704 (Sub-1) (Review of Commodity, Boxcar, and8547TOFC/COFC Exemptions) is currently a pending matter. If confirmed, I8548commit to looking into this issue further.85498550    Question 3. Do you believe the President and his Administration8551should be allowed to shape and influence Board actions and decisions?8552    Answer. I believe that all Presidents and their Administrations8553have at one time, or another provided comments to governmental8554agencies. Given the significance of the Board's work for our Nation's8555supply chain and the policy preferences of other political officials,8556as well as the different jurisdictions and statutory and regulatory8557roles, I believe government officials, regardless of party, will8558continue weighing in as appropriate on STB matters in the future.85598560    Question 4. As an Independent Regulatory Agency, should the Board8561officially engage in partisan activities, including communications with8562Agency employees?8563    Answer. Pursuant to 49 U.S.C. Sec. 1301(a), ``(t)he Surface8564Transportation Board is an independent establishment of the United8565States Government. The STB's statutory mission requires impartiality in8566our adjudicatory and regulatory functions. Our decisions are based upon8567evidence and the applicable law, not partisan considerations. As a8568general matter, the STB leadership has long complied with personnel,8569funding, and other administrative policies set forth across8570administrations of both parties--from executive orders on hiring to8571regulations on workforce and building management to guidance on budget8572formulation.85738574    Question 5. During the hearing, you stated that you serve at the8575pleasure of the President. 49 U.S.C. Sec. 1301 (b) (3) specifies that8576the President must give cause when removing a Board Member.85778578    a. Do you agree with this part of the Agency's statute?8579    Answer. As you are aware, Mr. Primus has filed a lawsuit against8580the STB in the U.S. District Court for the District of Columbia.8581Because this is the core legal question raised in the lawsuit, it would8582be inappropriate for me to provide a response.85838584    b. If a Board Member is fired without cause, does it compromise the8585integrity and impartiality of the Board?8586    Answer. Again, with all due respect to the question, it pertains to8587pending litigation and I must refrain from comment. What I can say is8588that the agency, by way of statute, is an independent agency. If8589confirmed, I commit to following the law and continuing to issue8590decisions based upon evidence and the law. I believe this approach8591protects the integrity of our processes and public confidence in our8592decisions.85938594    Question 6. If the Board and its members are required to no longer8595operate as an independent and impartial agency, what impact would it8596have on our country's freight rail network and the national supply8597chain?8598    Answer. The Surface Transportation Board is an independent agency8599as set forth in statute. See 49 U.S.C. Sec. 1301(a). I will defer to a8600Court ruling on this matter, or any statutory change from Congress and8601I will uphold the law.86028603    a. Can the Board effectively function if subjected to political8604interference?8605    Answer. The Board is an independent agency. I believe it is not8606only appropriate, but helpful, when Members of Congress write letters8607to the STB raising either their concerns or the concerns of their8608constituents. To the extent those concerns are related to a pending8609matter, the letter is then filed in the public docket so that all8610members of the public have access. This same respect for transparency8611would apply to any elected officials or any stakeholders.8612                                 ______86138614Response to Written Questions Submitted by Hon. Lisa Blunt Rochester to86158616                          Michelle A. Schultz8617Topic: Independence of the Surface Transportation Board (STB)8618    Question 1. In your opening statement, from your 2018 confirmation8619hearing, you wrote: ``it is incumbent upon the Board to approach8620matters brought before it by conducting a thorough analysis of the8621facts and adjudicating matters in an impartial manner within the bounds8622of its jurisdiction and the law.''86238624    a. Following your first term on the Board, do you still find that8625to be the case? And do you believe it is still possible despite recent8626pressures from the President and the Trump administration?8627    Answer. Yes. I still believe it is incumbent upon the Board to8628approach matters with impartiality, transparency and within the bounds8629of the law.8630    I have not been contacted by the President or anyone within the8631administration regarding any pending matter.86328633    Question 2. The White House said they fired Member Primus because8634he did not support the President's America First agenda.86358636    a. Do you believe Mr. Primus's firing was justified, and does it8637compromise the integrity and impartiality of the Board?8638    Answer. Mr. Primus filed a lawsuit against the Surface8639Transportation Board in U.S. District Court for the District of8640Columbia. As a general practice, I do not comment on pending litigation8641and must refrain from comment here.86428643    b. Considering this, do you feel pressure to support the8644President's agenda? Should every member, including Democrats support8645the President's agenda? If not, should they be removed?8646    Answer. Again, the issue of removal is currently pending in8647litigation. I must respectfully refrain from commenting.86488649    c. Given the independence of the Surface Transportation Board, do8650you believe the President and the Trump administration should be8651permitted to influence the Board's decisions?8652    Answer. I believe that the President as well as members of the8653Trump administration are free to provide opinions and file comments in8654pending matters as have members of prior Administrations. I will review8655all filed comments from all stakeholders, as well as the pleadings,8656evidence and applicable law and will issue a decision based upon the8657record in its entirety and on the merits.86588659    d. If the Board and its members operate with only the President's8660agenda in mind, how will this impact our Nation's freight rail network8661and national supply chains? Can the Board continue to function8662effectively?8663    Answer. As indicated in my opening statement and in response to8664similar questions presented during the hearing, I approach every8665pending matter by reviewing the record--including the pleadings, the8666filed comments from stakeholders, the evidence, the applicable law, and8667the principles of the Rail Transportation Policy of the United States8668as enacted by Congress.8669    After carefully weighing all the aforementioned, I strive to reach8670decisions that are consistent with the applicable law, and which8671provide the best outcome for the rail network.86728673    Question 3. During your confirmation, you confirmed that Chairman8674Fuchs sent an unprecedented e-mail to Surface Transportation Board8675staff blaming Democrats for the government shutdown.86768677    a) How would you define the Hatch Act?8678    Answer. By the plain language of the Act itself.86798680    b) Is it appropriate for apolitical Surface Transportation Board8681staff to be subjected to partisan e-mails from Board leadership and8682does it undermine the impartiality of the Board?8683    Answer. I am committed to complying with the Hatch Act. In8684assessing the appropriateness of an agency-wide e-mail, I would ensure8685its legality, including through consultation with the STB's Office of8686Chief Counsel and, as applicable, consideration of relevant U.S. Office8687of Special Counsel precedent, such as advisory opinions on8688communications that concern policy or legislation and reference a8689political party. Further, I would ensure the e-mail's accuracy,8690including the evaluation of information, reporting, or analysis from8691credible and non-partisan sources. Finally, I would consider the8692necessity or value of the e-mail and any relevant procedures, such as8693whether it involves pertinent legal, or policy information disseminated8694consistent with established protocols or circulars reflecting different8695agencies' jurisdictions.8696Topic: Reduced STB Staff Capacity8697    Question 1. In previous testimony before this committee, you stated8698that ``The efficiency of freight and intercity passenger rail8699transportation is vital to the Nation's mobility and economic8700competitiveness.'' Earlier this year, Chairman Fuchs reduced staffing8701capacity and closed the Office of Passenger Rail, an office dedicated8702to this very issue and Amtrak's on-time performance.87038704    a. Do you agree with the Chairman's decision to close this office8705and how will it impact the STB's ability to improve and expand8706intercity passenger rail throughout the country?8707    Answer. On August 1, 2025, the STB combined its two legal offices,8708the Office of Proceedings (OP) and the Office of the General Counsel8709(OGC), into one Office of Chief Counsel. The Board combined these8710offices to streamline and improve drafting and review procedures, which8711will benefit the Board and the public. The Office of Chief Counsel also8712houses the Board's Chief of Passenger Rail and Investigations, who will8713lead the Board's cross-disciplinary passenger rail flex team. When a8714matter is initiated, a team will be formed to leverage expertise from8715across the agency and nimbly respond to the needs of the case. This8716team replaces the Office of Passenger Rail and ensures the Board can8717efficiently continue to fulfill its statutory passenger rail8718investigatory and adjudicatory responsibilities. To date, Chairman8719Fuchs has not terminated any employee under any Reduction in Force8720action. I support the agency's actions to combine the two legal offices8721and housing the Chief of Passenger Rail and Investigations within the8722legal office. I believe these actions will improve the Board's ability8723to effectively carry out its statutory responsibilities concerning8724passenger rail and other matters.8725                                 ______87268727   Response to Written Questions Submitted by Hon. Amy Klobuchar to8728                          Michelle A. Schultz8729    Rail Merger. Senator Hoeven and I led a bipartisan group of8730senators in calling on the Surface Transportation Board to closely8731scrutinize the proposed merger and ensure long-term competition in the8732railroad industry.87338734   You mentioned in your testimony that in your role you must8735        be ``mindful of what best serves the long-term health and8736        vitality of the national rail network.'' How will you analyze8737        the potential long-term and knock-on effects of the proposed8738        merger?8739    Answer. Because the merger is a pending matter, I am unfortunately8740unable to answer your question as any comments about how I intend to8741analyze any specific aspect of the case and/or apply the standard of8742law in this case would be pre-decisional. What I can say is that I will8743be carefully reviewing all comments that are filed in the docket. I8744will also review the facts, pleadings, evidence and applicable law and8745will make a decision based upon the merits of the case that is in the8746best interest of the network.87478748    Agricultural Shippers. Agricultural producers depend on reliable8749and competitive rail service to move their products to domestic and8750international markets. Agricultural shippers already face limited8751competitive options for rail service and further consolidation could8752compound these challenges.87538754   How do you plan to protect the interests of agricultural8755        shippers going forward?8756    Answer. With all due respect to the question, again, the merger is8757a pending matter and is case of first impression, so I am unable to say8758how I plan to protect the interests of agricultural shippers going8759forward. What I can say is that I will be reviewing all the filed8760comments from all stakeholders, the pleadings, the applicable law and8761the evidence and will make a decision based upon the merits of the8762case. I will also be applying the principles set forth in the Rail8763Transportation Policy of the United States as enacted by Congress. I8764recognize the significance that this case will have on the national8765rail network and commit to making a decision that is in the best8766interest of the network.87678768                                  [all]