Mr. PISARSKI. Thank you, sir. I am delighted to be here to participate in this first hearing of the new Subcommittee on Ground Transportation. I think it is easy to miss some of the broad sweeping trends when we are in the middle of them, so we need to have greater sensitivity in an attempt to recognize trends that are affecting national patterns and growth. There are three trends that I have used over the years to gain my sense of what is happening out there both with respect to passengers and freight. The first of those is the trends in ton-miles per capita in the country of an affluent society in its relationship to freight movement. As we grow richer as a Nation, we consume more tons of 'stuff', and we consume more ton-miles of things. Since World War II, ton-miles of freight per capita has grown by about 85 percent and I think this is something that we can expect to continue to see out over time. Although we are beginning to see some downsizing in the quantities and the weights of things, I think that trend will still continue. A second trend is the relationship between ton-miles and the GNP or the GDP. The amount of 'stuff' that we need to produce a dollar's worth of GDP today has been declining over time. The amount that goes into producing a dollar's worth of services is much less than what might go into producing a dollar's worth of steel in the past. And so since World War II, we have seen about a 30-percent decline in the amount of ton-miles required to produce a dollar's worth of GDP. But we have also seen in recent research that the services industries are highly dependent upon freight movement as well. As the value of the products that are moved increases, the sensitivity to speed, the need for speed, reliability and security increases, which tends to equal a greater tolerance to higher transport cost modes such as air freight, trucking, and intermodal movement. Page 19 PREV PAGE TOP OF DOC Segment 2 Of 2 The third trend I follow is the growing travel activities of an affluent population. Since 1977, total travel by the population has increased by about 80 percent. If we look at long distance travel, that is to say, tourism and business travel, we see that travel over a hundred miles has grown by 115 percent in that period. We also need to recognize the prodigious growth in foreign visitors to our shores and their impact on our transportation system. The World Tourism Organization indicates that the U.S. in the year 2020 will be receiving about 100 million visitors a year, second in the world only to China. As when I turn to the future, I want to mention two trends that I think we have missed in the past which have really had a negative impact on our transportation capability, and then look at some of the trends that I think we can't afford to miss in the future. The two that we missed briefly are a product of the baby boom, the tremendous increases in workers that came out of the baby boom in the seventies and eighties, and women's sharp arrivals into the workplace which changed the nature of our commuting patterns and changed the nature of our other travel activities. The second trend that we missed is the tremendous growth in truck travel that Mr. Schneider was talking about as a share of total activity, as a share of the flows on our highways, and as just a component of total activity in the country.The lack of recognition of these trends, has hurt us badly. With respect to trends in the future, I think we are going to see trends that are forces of stability in the society, and then there are going to be trends that are strong forces of change. Just to list briefly the forces of stability: lowest population growth right now in any time in our century; the leveling off of young people joining the labor force, which gets to be a problem for Don Schneider because he can't find young truckers; the leveling off of automobile ownership; the leveling off of travel growth. All of those will be stabilizing effects on travel that I think we are going to be seeing. Page 20 PREV PAGE TOP OF DOC Segment 2 Of 2 On the growth side I will mention five items. The first is increasing specialization in the economy. The second is what I call the democratization of mobility, the last segments of the society gaining access to the automobile and participating fully in the society. The third item is immigration. The fourth is shifting age groups, something that was mentioned in the opening statements. And finally the improving incomes and dispersion of the population and jobs throughout the country. With respect to specialization, recent research has shown that America's economic future lies largely with improved competitive access between suppliers, manufacturers, and consumers. That research conducted in the Midwest showed that two dominant factors in competitive success cited were communications and transportation. The State of Wisconsin in related work has shown that in the smallest hinterland towns in the State—and this is work that Mr. Schneider and I were involved with a couple years ago with the State DOT—they saw that in the smallest towns in Wisconsin, there are many small companies that have exports as their major markets. And it was really a revelation, I think, to the State DOT. It certainly was to me and to some others. This division of labor and this change, I think, yields our tremendous productivity in our present society. In the economics sphere, it is a period of globalization of almost everything—production, markets, supply and demand—new economic arrangements. It is becoming increasingly clear that our domestic markets are sharply affected by the activities in the international realm, both in services and competition. There are a serious number of information gaps in this area that I have listed in my document that I won't mention here but I would commend them to you. With respect to the second trend that I wanted to talk about, I call it the ''democratization of mobility.'' If we look over the years, we will see that we went from about 20 percent of our households without automobiles 20 years ago down to about 10 percent of the households in America today still without vehicles. But if we look at that in terms of ethnicity and racial trends, we see that 8 percent of the white population are without vehicles, but almost 20 percent of the Hispanic population, and 30 percent of the black population. I think this situation is certainly not going to be anywhere near permanent in the future and we can expect those minority populations to, in a sense, mainstream with respect to vehicle-owning characteristics, suggesting that we will be somewhere around 1.7, 1.8 vehicles per household in the country. Page 21 PREV PAGE TOP OF DOC Segment 2 Of 2 The recent American Travel Survey that looked at long distance travel noted that minorities actually grew faster in their long distance travel than did the white non-Hispanic population, but still their levels of long distance travel just reached about the same as what the white population's was in 1977. So there is an immense source of growth and potential activity coming in the future from that quarter. The fact that we don't understand that and have not measured it well, I think is a serious concern. Immigration I will mention just briefly. U.S. population growth in the nineties has been the lowest in this century short of the Great Depression. Immigration today accounts for about a third of our total population increase. Where they go and what they do and how they behave is going to have dominant influence, I think, in the next decade. With respect to shifting age groups, it is really a very simple factor. The history of our era since World War II is the history of the baby boom slowly working its way through the society, affecting our grammar schools, our high schools, our road systems. And now we have a situation in which in this decade, from 1995 to 2005, there will be a 50-percent increase in the number of people in their fifties. Because this is the age group that is the highest travel age group in our society, we are going to see a very sharp increase in the kinds of travel that that age group produces. Finally, I would say that with improving incomes we are going to see dispersion of people and jobs, as an important aspect of our economic structure. Along with increasing incomes comes an increase in people's value of time. The pressures of time on our citizens will dominate travel decisions, emphasizing trip-chaining, faster modes, the single occupant vehicle, long distance travel, longer trips but shorter duration trips, and more frequent tourism. The dominant economic reality of the new century will be a shortage of skilled professionals. Employers will go where access to skilled workers is high to gain advantage over their competitors. Many of the logistical needs of businesses are now ubiquitously available. Employer location choices will be guided by the fact that they can locate almost anywhere: near a mailbox, a telephone, an airport, with access to skilled workers, access to capacity in the road system and in the air system. Page 22 PREV PAGE TOP OF DOC Segment 2 Of 2 The good news in all of this is, I think, that we have largely passed through a period of great change. Our problems in the future will be much more operable. We will add about 25 million to our population in the next decade and for the foreseeable future, as we have since 1950. Our ability to respond to that growth will grow faster than that. Our public infrastructure investments won't be overwhelmed by the dramatic growth levels we have seen in the eighties and nineties. I would just like to close by saying that most of these trips that we make have important economic transactions at their end, and when they don't, they have important social interactions that are of great value to the society. And responding to those and reducing distance as a factor in our social and economic structure will be a key to our future. Thank you very much, Mr. Chairman. Mr. PETRI. Thank you.